The Issue This is a bid protest proceeding pursuant to Section 120.57(3), Florida Statutes, in which the primary issue raised by the Petitioner (who is the second-ranked proposer) is that the subject contract should be awarded to the Petitioner because the first-ranked proposer submitted a non-responsive proposal. The Petitioner's alternative arguments challenge the manner in which the proposals were evaluated and assert, alternatively, that, if properly evaluated, the Petitioner would be the first-ranked proposer, or that the evaluation was so flawed as to require that all bids be rejected and that the agency embark upon a new request for proposals. The first-ranked proposer intervened to protect its substantial interests. The primary issues raised by the first- ranked proposer are that its own proposal is responsive, that any flaws in the evaluation process are insufficient in nature and number to warrant embarking on a new request for proposals, and that the second-ranked proposer lacks standing to challenge the proposed agency action because the proposal of the second-ranked proposer is asserted to be non-responsive. The third-ranked proposer intervened primarily in a defensive posture to protect its interests from any adverse consequences that might flow from the issues raised by the other two proposers, as well as to benefit from any windfall that might result from the challenges to the sufficiency of the other two proposals.
Findings Of Fact Preparation and issuance of the subject RFP The state agency involved in this dispute is AHCA. AHCA's powers and duties include the administration of Florida's Medicaid program. The Medicaid program provides medical services to eligible Medicaid recipients under Chapter 409, Florida Statutes, the United States Code Title 19, which involves Medicaid, and to children from birth until five years of age under United States Code Title 21, State Children's Health Insurance Program of the Social Security Act, through enrolled providers. On or about March 3, 2005, AHCA issued the subject RFP, which solicited proposals to develop the MMIS/DSS and to provide fiscal agent operations. The RFP required proposers to separately submit a technical proposal and a cost proposal. The RFP also required implementation of the new MMIS/DSS technical systems by July 1, 2007. However, the RFP permitted the implementation of some non-critical business functions after July 1, 2007. The RFP incorporated several separate addenda, numbered one through seven. Addendum Six, also had a separately issued Clarification Notice. Each addendum also included a list of questions asked by potential proposers concerning the RFP, and AHCA's answers to those questions. The questions and answers were part of the addenda in which they appeared and, therefore, became part of the RFP. Each proposer was required to include with its proposal a signed acknowledgement certifying its receipt of each addendum. Section 20.2 of the RFP includes the following: The State has established certain requirements with respect to responses submitted to competitive solicitations. The use of "shall", "must", or "will" (except to indicate futurity) in this solicitation, indicates a requirement or condition from which a material deviation may not be waived by the State. A deviation is material if, in the State's sole discretion, the deficient response is not in substantial accord with the solicitation requirements, provides an advantage to one respondent over another, or has a potentially significant effect on the quality of the response or on the cost to the State. Material deviations cannot be waived. The words "should" or "may" in this solicitation indicate desirable attributes or conditions, but are permissive in nature. Deviation from, or omission of, such desirable feature will not in itself cause rejection of a response. Sections 20.17 and 20.18 of the RFP read as follows: Correction of Proposal Errors If the Agency determines that a proposal contains a minor irregularity or an error, such as a transposition, extension or footing error in figures that are presented, the Agency may provide the Vendor an opportunity to correct the error. Information that is required to be included in the proposal and is inadvertently omitted shall not be accepted under this error correction provision. All information required to be included in a proposal must be received by the date and time that proposals are due to the Agency. The Agency reserves the right to seek clarification from a Vendor of any information contained in the proposal. Minor irregularities in proposals may be waived by the evaluators. A minor irregularity is a variation from the RFP terms and conditions that does not affect the price of the proposal or give one applicant an advantage or benefit not enjoyed by others or adversely affects the State's interest. Rejection of Proposals Proposals that do not conform to the mandatory requirements of this RFP shall be rejected by the Agency. Proposals may be rejected for reasons that are provided in Appendix M, Checklist of Mandatory Items; for failure to comply with any requirement of this RFP; when the proposal is conditional; or when in the Agency discretion, it is in the best interests of the Agency. The Agency reserves the right to reject any and all proposals. The three proposers ACS Parent, EDS Subsidiary, and Unisys each submitted a proposal in response to the subject RFP. EDS Parent did not submit a proposal in response to the RFP. A partnership or joint venture comprised of EDS Subsidiary and EDS Parent did not submit a proposal in response to the RFP. EDS Parent is not a party to this proceeding. A partnership or joint venture comprised of EDS Subsidiary and EDS Parent is not a party to this proceeding. In the MMIS area, EDS Parent and EDS Subsidiary frequently both sign the proposals and the contracts. EDS Parent and EDS Subsidiary as a matter of practice usually perform the EDS MMIS work together. As a general practice, EDS Parent stands behind the obligations of EDS Subsidiary as a guarantor of any unfulfilled liabilities of EDS Subsidiary, even when EDS Subsidiary is the only signer on a contract. And it may well be that EDS Parent and EDS Subsidiary intended to be co-proposers or joint adventurers on the subject RFP, but no such intention was set forth in the EDS Subsidiary proposal.2 EDS Parent and EDS Subsidiary are two separate legal entities. EDS Parent is a publicly traded Delaware corporation that was formed in the 1960s. EDS Subsidiary is a Delaware limited liability company that was formed in 1997. EDS Subsidiary is a wholly-owned subsidiary of EDS Parent. EDS Subsidiary was specifically established and has been operated as a separate business entity for the express purposes of obtaining the advantages of certain operational flexibilities, as well as certain tax advantages that may result from the operations of a separate business entity. During at least one period in its existence EDS Subsidiary owned assets valued at more than one billion dollars.3 Delivery of the proposals The RFP originally called for proposals to be submitted to AHCA's "Issuing Officer" at 2727 Mahan Drive, Tallahassee, FL 32308. Angela Smith was designated as the "Issuing Officer" of the RFP. Addendum Two to the RFP, which was issued on April 1, 2005, changed the delivery address for all proposals to: 2308 Killearn Center Boulevard, Tallahassee, Florida 32309. Proposals were required to be submitted at this new address by no later than 5:00 p.m. on June 2, 2005. EDS Subsidiary acknowledged receipt of Addendum Two. Section 20.08 of the RFP made it clear that it was each Proposer's responsibility "to obtain any issued addenda and to consider these materials in their response to the RFP." The RFP further expressly provided, "PROPOSALS RECEIVED AFTER THE SPECIFIED TIME AND DATE WILL NOT BE CONSIDERED AND RETURNED UNOPENED." In accordance with the requirements of the RFP, as amended by Addendum Two, ACS Parent and Unisys properly delivered their proposals to 2308 Killearn Center Boulevard, Tallahassee, Florida 32309. EDS Subsidiary's proposal consisted of 15 cartons. The proposal's cover letter and each carton were correctly addressed to 2308 Killearn Center Boulevard, Tallahassee, Florida 32309, but the proposal was never delivered to that address. Rather, EDS Subsidiary's proposal was delivered to AHCA's offices at 2727 Mahan Drive, Tallahassee, Florida 32308. Pat King, Marc Vandenbark, and Milt Ashford, employees of EDS Parent, delivered EDS Subsidiary's proposal to AHCA's 2727 Mahan Drive address at approximately 12:35 p.m. on June 2, 2005. Jason Kinchon, an AHCA employee, met Messers. King, Vandenbark, and Ashford outside of the AHCA office building and directed them to a second floor room in Building No. 2 where the EDS Subsidiary proposal was delivered. Mr. Kinchon brought a hand cart with him. Messrs. King, VanDenbark, Ashford, and Kinchon jointly loaded the proposal on a hand truck on multiple occasions near the rear entrance of the AHCA Contract Administration Office. It took three trips with the hand cart to move the proposal into AHCA Building Number 2 at 2727 Mahan Drive, Tallahassee, Florida. Messrs. Kinchon and King took the loaded hand cart into the AHCA Building Number 2 on the three trips into the building. Messrs. Kinchon and King placed the proposal in a room on the second floor of AHCA Building Number 2. Subsequent to delivery, AHCA secured the proposal to ensure that no unauthorized persons had access to the proposal. Messrs. King, VanDenbark, and Ashford attended the public proposal opening where they saw AHCA open the original proposal. At Mr. King's request, Mr. Kinchon provided a receipt for the EDS Subsidiary proposal bearing a date-time stamp and Mr. Kinchon's signature. After 5:00 p.m. on June 2, 2005, Angela Smith, AHCA's Issuing Officer for the RFP, called Mr. King to inquire about the status of EDS Subsidiary's proposal. Mr. King explained that he had delivered EDS Subsidiary's proposal to the incorrect Mahan Drive address and then faxed Ms. Smith a copy of Mr. Kinchon's receipt. After first conferring with legal counsel, Ms. Smith later informed Mr. King that AHCA would nevertheless accept the EDS Subsidiary proposal. The next day, at Ms. Smith's direction, other AHCA employees retrieved the EDS Subsidiary proposal from 2727 Mahan Drive, Tallahassee, Florida 32308, and delivered it to the AHCA office located at 1669 Mahan Center Boulevard, which was the address where AHCA planned to open, and in fact did open, all three of the proposals. On that same day, AHCA employees retrieved the ACS Parent proposal and the Unisys proposal from 2308 Killearn Center Boulevard and delivered those two proposals to the AHCA office located at 1669 Mahan Center Boulevard, at which address all three proposals were eventually opened. The delivery of the EDS Subsidiary proposal to an incorrect address did not confer any advantage to EDS Subsidiary, nor did it result in any detriment to either of the other proposers. EDS Subsidiary had no more time to prepare its proposal than its competitors and had no opportunity to see the bids of its competitors before submitting its own. The delivery to an incorrect address also did not result in any detriment to AHCA. On the day of the opening of the proposals, AHCA had to move each of the three proposals from the place where each proposal was received to the place where all of the proposals would be opened. It was no significant burden for AHCA to retrieve two proposals from one location and to retrieve the third from another location. The bid bond submitted by EDS Subsidiary On June 3, 2005, AHCA opened the technical proposals that were submitted by ACS Parent, EDS Subsidiary, and Unisys. Two AHCA employees, Angela Smith and Sally Morton-Crayton, presided over the opening. At the opening, Ms. Smith and Ms. Crayton reviewed each proposal to ensure the presence of those items required by the mandatory checklist located in Appendix M to the RFP. Section 70.4 of the RFP reads as follows: Each proposal will be reviewed for responsiveness to the mandatory requirements set forth in this RFP. This will be a yes/no evaluation. The purpose of this phase is to determine if the Technical Proposal is sufficiently responsive to the RFP to permit a complete evaluation. Mandatory requirements for the Technical Proposal are presented in a checklist in Appendix M. Failure to comply with the instructions or to submit a complete proposal will deem a proposal non-responsive, and will cause the proposal to be rejected with no further evaluation. The state reserves the right to waive minor irregularities. No points will be awarded for passing the mandatory requirements. As part of their review, Ms. Smith and Ms. Crayton did not actually read or analyze the mandatory items to determine whether the proposals complied with the RFP's requirements, but only looked to see if the items were present. The RFP required each proposer to submit a Proposal Guarantee with its proposal. In this regard, Section 20.12 of the RFP states: 20.12 Proposal Guarantee One proposal guarantee must be included in the sealed package with the original Technical Proposal. The original Technical Proposal shall be accompanied by a proposal guarantee payable to the State of Florida in the amount of $500,000.00. The form of the proposal guarantee shall be a bond, cashier's check, treasurer's check, bank draft, or certified check. If the proposal guarantee is a bond, the bond shall be written by a surety company authorized to do business in the State of Florida and signed by a Florida Licensed Agent. If a non-resident Florida Licensed Agent signs the bond, the bond shall be considered to have been made and executed in the State of Florida. All proposal guarantees shall be returned upon execution of a legal contract with the successful Vendor. If the successful Vendor fails to execute a contract within ten (10) consecutive calendar days after a contract has been presented to the Vendor for signature, the proposal guarantee shall be forfeited to the State. The proposal guarantee from the successful Vendor shall be returned only after the Agency has received the performance bond required under Section 30.24 of this RFP. The Proposal Guarantee submitted with the EDS Subsidiary proposal did not refer to any proposal submitted by EDS Subsidiary and did not name EDS Subsidiary as principal on the Proposal Guarantee. Fidelity and Deposit Company of Maryland is the surety that issued the Proposal Guarantee. The Proposal Guarantee named EDS Parent as the principal and the State of Florida as the obligee. On its face, the Proposal Guarantee provided security for a proposal submitted by EDS Parent (which proposal never existed), but not for a proposal submitted by EDS Subsidiary. The Proposal Guarantee does not indicate that EDS Parent, as the principal on the bond, is involved in a partnership or joint venture with any other entity, including EDS Subsidiary. Specifically, on its face, the Proposal Guarantee does not reference any entity, partnership, or venture other than EDS Parent as the principal. The Proposal Guarantee included in EDS Subsidiary's proposal does not guarantee EDS Subsidiary's proposal, but rather specifically references a proposal by EDS Parent; a proposal which never existed.4 Financial statements submitted by EDS Subsidiary Section 60.2.4(2) of the RFP required proposers to submit the following financial information: Corporate Financial Statements Audited financial statements for the legal contracting entity (and parent company if applicable) and subcontractors, sufficient to demonstrate the capability to perform this contract, shall be provided for each of the last three fiscal years. These shall include: Balance sheets; Statement of income; Statements of changes in financial position; Auditor's reports; Notes to financial statements; and Summary of significant accounting policies. If all of these are not provided, please explain why. The requirement quoted immediately above was amended by Addendum One, which included the following question and answer which became part of the RFP: Question: Audited financial statements are required in this section. However, many subcontracting firms may not be publicly held with the required forms available. What will the Agency accept for these financial requirements for non-public firms? Answer: If audited financial statements exist they are to be submitted. If audited financial statements do not exist, unaudited statements or financial information of the type that is contained in financial statements may be submitted with an appropriate explanation. (Emphasis added.) EDS Subsidiary's proposal did not include any financial information, audited or otherwise, from which the financial condition of EDS Subsidiary could be determined. Rather, the proposal only included consolidated audited financial statements for EDS Parent. In its proposal, under Tab 4, EDS Subsidiary explained: "EDS Information Systems (sic), L.L.C., will be the contract signing authority for the Florida Medicaid project. As a wholly owned subsidiary of EDS, EDS Information Systems (sic), L.L.C., is not a separate corporation and, as such, does not have separate financial statements. Throughout this RFP response, we will use the term ‘EDS’ to refer to this organization." While EDS Subsidiary may not have had audited separate financial statements, it certainly had "financial information of the type that is contained in financial statements." Without receiving any "financial information of the type that is contained in financial statements," AHCA has no information at all about the financial circumstances of EDS Subsidiary.5 In its proposal, on the title page under Tab 2, EDS Subsidiary stated that the vendor's name was "EDS Information Services, L.L.C." And in the transmittal letter under Tab 2 of the proposal, EDS Subsidiary states: "EDS Information Services, L.L.C., a subsidiary of the of Electronic Data Systems, (hereafter EDS), is pleased to submit our response to the Request for Proposal (RFP) 0514 issued by the Agency for Healthcare Administration." The transmittal letter also states: "EDS' federal tax identification number is 75-2714824." Tax identification number 75-2714824 is the tax identification number of EDS Subsidiary. The transmittal letter also lists "EDS Information Services, L.L.C." as the "Prime Contractor" and states that its "Corporate Charter Number" is M97000000533. That number is the document number assigned by the Florida Department of State to EDS Subsidiary. (The document number assigned by the Florida Department of State to EDS Parent is F96000001705.) The transmittal letter under Tab 2 of the EDS Subsidiary proposal also states: The following table reflects the exact amount of work in percentages to be completed by the Prime Contractor and each subcontractor. Company Percent of Work EDS Information Services, L.L.C. 76.5% First Health Services Corporation 21.8% APS Healthcare, Inc. 1.3% ProviderLink, Inc. .4% Cost proposal submitted with EDS Subsidiary's proposal Section 60.3 of the RFP required proposers to include in their Cost Proposal "a firm fixed price for each of the requirements contained on the pricing schedules within this section." Additionally, the mandatory checklist contained in Appendix M of the RFP required proposers to submit a "firm, fixed price without any additional stipulations or limitations." ACS Parent's Cost Proposal was $38 million less than the next least expensive Cost Proposal. ACS Parent submitted the lowest Cost Proposal and was awarded 600 points, consistent with the language of the RFP. The Cost Proposals for EDS Subsidiary and Unisys were awarded scores of 508 and 523, respectively, based on the application of a specified formula in the RFP and the ratio their prices bore to ACS Parent's price. Ms. Smith and Ms. Crayton oversaw the review and scoring of the proposers' Cost Proposals. During their opening of the Cost Proposals, Ms. Smith and Ms. Crayton did not analyze the Cost Proposal submitted with EDS Subsidiary's proposal to determine if it was submitted by the same legal entity. Ms. Smith and Ms. Crayton did not analyze EDS Subsidiary's Cost Proposal to determine whether it proposed a firm fixed price without additional stipulations or limitations. The Cost Proposal submitted with the EDS Subsidiary proposal identified a different legal entity, Electronic Data Systems, LLC, as the proposer. The Cost Proposal submitted with EDS Subsidiary's proposal included a firm, fixed price. The language in that proposal that described the "Cost Assumptions" underlying the Cost Proposal did not change the character of the Cost Proposal; it remained firm and fixed. Proposed EDS Subsidiary local operations facility Section 50.3.2.1 of the RFP reads as follows: 50.3.2.1 Location of Operations Facilities The Contractor's local facility shall be located within a five (5) mile radius of the State offices located at 2727 Mahan Drive, Tallahassee, Florida. The Agency prefers a location convenient to the Agency and will consider the location in the evaluation process. Consideration of potential expansion of operations should be given in choosing a site for the facility. The language quoted immediately above is rather ambiguous as to what must be included in the proposal regarding the proposer's local facility. It does not clearly state that a specific location must be identified in the proposal. The specific instructions in the RFP about what must be included under each tab of the proposals do not clearly require the inclusion of a specific address for the proposer's local facility. Further, the instructions in the Evaluation Manual do not appear to require the inclusion of a specific address. ACS Parent's proposal included a specific facility and address for its proposed operations facility location in Tallahassee. Unisys' proposal included the addresses for two possible locations, but did not include a specific proposed facility in Tallahassee. EDS Subsidiary's proposal did not include a proposed facility or an address for its operations facility in Tallahassee. EDS Subsidiary simply agreed to meet AHCA's requirements for a local facility. At its oral presentation, which occurred approximately six weeks after submission of the proposals, EDS Subsidiary first provided AHCA with a possible address for its local operations facility, at 325 John Knox Road in Tallahassee. Staffing information submitted by EDS Subsidiary The RFP required proposers to identify within their proposals certain individuals to fill various Named Staff positions. The Named Staff positions carried certain educational qualification requirements based on the type of work expected from each position. The Named Staff positions were separately identified because they were important positions and AHCA considered them critical to the success of the project. Addendum One to the RFP contained the following question and answer which became part of the RFP: Question: Will the State allow equivalent work experience in lieu of a bachelor's degree? Answer: The State will allow equivalent work experience, non-degree training and alternate certification in lieu of a required bachelors degree, provided the Vendor clearly identifies and explains the equivalence. Qualifications of proposed staff are an important consideration in the scoring of proposals. Several of the individuals that EDS Subsidiary and Unisys proposed to fill the Named Staff positions did not facially meet the minimal educational requirements as stated in the RFP. However, from resumes and other information submitted with the EDS Subsidiary and the Unisys proposals, AHCA could determine that the proposed staff at issue possessed degrees in related fields and/or had sufficient qualifications through extensive experience in the areas in which they would be working. Technical solutions proposed by EDS Subsidiary At paragraph 24 of the ACS Parent's amended petition, it asserts that EDS Subsidiary "failed to meet many of the mandatory technical requirements concerning the new FMMIS/DSS. . . ." In seven following subparagraphs the petition asserts seven specific alleged technical deficiencies in the EDS Subsidiary proposal. In view of the disposition of certain other issues in this case, it seems neither useful nor necessary to make detailed findings of fact (or conclusions of law) regarding these alleged technical deficiencies in the EDS Subsidiary proposal. In this regard it is sufficient to find that the technical solutions proposed in the EDS Subsidiary proposal were in compliance with the technical requirements of the RFP in all material matters. There are perhaps a few minor irregularities in a few minor details, but there is nothing in the technical solution proposed by EDS Subsidiary that deviates materially from the requirements of the RFP.6 The evaluation of the proposals In paragraph 26 of ACS Parent's amended petition, it is asserted that there were numerous irregularities in the manner in which the proposals were evaluated. The following paragraphs contain findings of fact related to those assertions. Gartner Report and Presentation AHCA hired Gartner, Inc. ("Gartner"), a third party company with technology expertise, to analyze the risk found in each of the technical proposals, and then produce a written report. The evaluators received and read the Gartner report before completing their final scores. The RFP did not disclose, and the proposers were never informed until after the proposed award was announced, that Gartner would conduct an analysis of the Technical Proposals. Gartner's written report visually displayed its final analysis through color coded comments (green, yellow, and orange). Gartner created its own criteria and sub-criteria to evaluate the proposals. The evaluators attended a presentation where the Gartner report's results were presented by Mr. Flowerree. The evaluators discussed these results at the presentation. This presentation on the Gartner report was neither publicly noticed or recorded, nor were any minutes taken at the meeting. AHCA did not give the proposers an opportunity to address the concerns and comments contained in the Gartner report and/or discussed at the presentation with the evaluators. The evaluators had the benefit of Gartner's analysis and conclusions when completing their scoring of the proposals. The evidence in this case is insufficient to determine whether the information in the Gartner presentation and report had any significant effect on the scoring of any of the proposals.7 ACS Parent's Corporate References Donna Eldridge. an AHCA employee, provided a corporate reference for ACS Parent which contained some errors, primarily errors of omission about matters of which Ms. Eldridge had no personal knowledge. There was also a corporate reference form from a Georgia official which contained a number of responses that were remarkably similar to the responses provided by Ms. Eldridge. The evidence in this case does not explain why the two responses were so similar. The evidence in this case is also insufficient to show that the information in either of the corporate references mentioned above had any material adverse impact on the evaluation scores of ACS Parent.8 Evenhanded evaluations During the course of their evaluation, to the best of their ability the evaluators applied the evaluation criteria in the same manner to all proposers. There is no persuasive evidence that the evaluators applied different criteria or different standards to different proposers. With regard to a related issue, the RFP required a critical path diagram for each phase. The proposal submitted by EDS Subsidiary had a critical path diagram for each of the phases. Organizational Conflicts of Interest Unbeknownst to the proposers, AHCA engaged Gartner to conduct an analysis of the proposals submitted in response to the RFP. As part of an earlier proposal submitted to the State of Texas, EDS Subsidiary proposed to hire Gartner as an "optional" subcontractor for the purpose of [I]ndependent assessment of governance processes." In that proposal, EDS Subsidiary described Gartner as having "[t]otal independence and objectivity--no ties to any one vendor or technology solution." EDS Subsidiary was not awarded the Texas contract, so the proposed use of Gartner as a subcontractor never happened. Site Visit Debriefing During the evaluation period, the evaluators attended multiple presentations and debriefings that covered different topics. AHCA did not publicly notice any of these meetings, and only one type of presentation, the proposers' oral presentations, was recorded or had any minutes taken. During their oral presentations, each proposer discussed its proposed solution and then answered questions posed by the evaluators. Evaluators also attended a briefing where they were presented with information gathered during AHCA's site visits to the proposers' operations in other states. This information included a presentation and a written site visit report compiling all of the site visit information into one document. Mr. Jay Ter Louw, an AHCA consultant, prepared the final site visit report. However, none of the evaluators attended any of the site visits. The evaluators relied upon the information presented during the site visit presentation and information contained in the site visit report to complete their assigned evaluations. The manner in which the site visits were conducted and reported was consistent with the provisions of the RFP. AHCA's Score Debriefings Section 70.3 of the RFP reads as follows: Evaluators will conduct a strictly controlled evaluation of the Technical Proposals submitted in response to this RFP. The evaluators will use prescribed evaluation criteria to score each proposal on its own merit regarding the Vendor's response to the requirements and adherence to the instructions in this RFP. The evaluators will not discuss the contents of the proposals with each other or anyone else during the evaluation process. The evaluators will be closely proctored to ensure that they follow the established rules of the evaluation. The evaluators attended numerous debriefings concerning their preliminary scoring. The stated purpose behind these debriefings was to give the evaluators an opportunity to discuss the reasons for their scores and where relevant information was located in the various proposals. The debriefing sessions were neither publicly noticed, recorded, nor were any minutes taken of these numerous sessions. While the evaluators did not discuss their scores with each other, they did discuss their evaluations and the contents of the proposals. All evaluators had the opportunity to change their scores based upon these discussions. At least one evaluator changed her scores after a debriefing session because of information she learned from other evaluators. Scoring After AHCA opened the proposals, it assigned various individuals to evaluate specific portions of the proposals. Some of the evaluators read the RFP and each proposal in its entirety, while others did not. The evaluators also reviewed an Evaluation Manual, an instruction manual produced by AHCA to guide agency staff and the evaluators through the evaluation process. After reading a proposal, an evaluator would generally assign preliminary scores for each of his or her assigned sections. The evaluators' scores were numeric and ranged from zero (worst) to ten (best). AHCA never gave the evaluators any instruction authorizing them to reject a proposal if it did not comply with the RFP's requirements. Rather, they were instructed to "score every section." Concerning the scoring of the Technical Proposals, Section 70.5.14 of the RFP provided, "[a] maximum of one thousand four hundred (1,400) points will be assigned to the highest passing Technical Proposal." The quoted provision is followed by a formula to be used to determine the number of points to be assigned to the other proposers for their Technical Proposals. It is clear from the formula that the formula only works if the highest passing Technical Proposal is awarded the full 1,400 points. Financial statements submitted by ACS Parent EDS Subsidiary asserts that the financial statements submitted with the ACS Parent proposal are deficient. The transmittal letter in the ACS Parent proposal contains a table reflecting the amount of work to be performed by the prime contractor and each subcontractor, as follows: Company Percent of Work ACS 97% Deloitte Consulting, LLP 1% FourThought Group, Inc. 0.2% Sun Microsystems, Inc. 1% Florida Pharmacy Association 0.4% KePRO, Inc. 0.4% There is no dispute about the sufficiency of the financial information submitted regarding ACS Parent, Deloitte Consulting, LLP, and KePRO, Inc. At page 4.4-5 of the proposal submitted by ACS Parent, Sun Microsystems includes the following: Per RFP Reference 60.2.4.2, we include our FY2004 Annual Report. The FY2004 Annual Report contains audited financial statements for fiscal years 2002 through 2004. These financial statements include information on the financial strength and stability of Sun including: Balance sheets Statement of income Statements of Changes in Financial Position Auditor's Reports Notes to Financial Statements Summary of Significant Accounting Policies The proposal submitted by ACS Parent also included information about both company and government web sites where additional financial information about Sun Microsystems could be found. With regard to the financial statements of the Florida Pharmacy Association, the proposal submitted by ACS Parent included the following: The Florida Pharmacy Association has not provided the above items [financial documents requested in the RFP] for submission with this proposal. Being a not-for-profit corporation we file an annual report with the Secretary of State and have enclosed a copy of our 2005 report in this section. We would be pleased to discuss additional details regarding our status with the Agency. The annual report included with the proposal did not contain any financial information regarding the Florida Pharmacy Association. FourThought Group, Inc., is a privately held corporation organized as an "S-Corporation." With regard to the financial statements of FourThought Group, Inc., the proposal submitted by ACS Parent included the following: FourThought Group has not provided the above items [financial documents requested in the RFP] for submission with this proposal. Being a privately held corporation, we do not routinely disclose our financials. We would be pleased to provide an overview of FourThought Group's financials to the agency. The information regarding FourThought Group, Inc., did not include any financial information. The ACS Parent cost proposal forms With respect to the cost proposal forms, RFP Section 60.4.3 states that "[w]here a signature block is indicated, pricing schedules must be signed and dated by an authorized corporate official." The pricing forms included in the RFP further state in all capital letters: "AN AUTHORIZED CORPORATE OFFICIAL OF THE VENDOR MUST SIGN THIS FORM. THE OFFICIAL'S TITLE AND THE DATE THIS FORM WAS SIGNED MUST BE ENTERED." The ACS Parent pricing schedules were all signed by John Crysler, who indicated that he was signing under the title and in the capacity of "Managing Director." When John Crysler signed the pricing schedules he was, and still is, a Senior Vice President and Assistant Secretary of ACS Parent. As such, when he signed the pricing schedules, Mr. Crysler was "an authorized corporate official of the vendor." The Unisys proposal The proposal submitted by Unisys (which was ranked third by AHCA) was responsive to the RFP in all material ways. No specific challenge to the responsiveness of the Unisys proposal was raised as an issue in the pleadings filed by either of the other two proposers. Similarly, AHCA did not file any pleading challenging the responsiveness of the Unisys proposal.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Agency for Health Care Administration enter a Final Order in this case rejecting the proposal of EDS Information Services, L.L.C., as non-responsive, and awarding the contract at issue in this case to Affiliated Computer Services, Inc. DONE AND ENTERED this 17th day of January, 2006, in Tallahassee, Leon County, Florida. S MICHAEL M. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings This 17th day of January, 2006.
Findings Of Fact On February 7, 14 and 21, 1989, respondent, School Board of Pinellas County (Board), published a legal advertisement in an area newspaper inviting prospective bidders to submit proposals for certain construction work to be performed on two elementary schools, Walsingham and Cross Bayou, located in Largo and Pinellas Park, Florida, respectively. The bidders were advised that their bids must be "prepared and submitted in accordance with the drawings and specifications" and that such drawings and specifications could be obtained from the Board. Such bids were to be filed with the Board no later than 2:00 p.m. on March 6, 1989. The notice also provided that the bids would be opened the same day. Bids were timely filed by at least five contracting firms, including petitioner, Prelude Construction Company, Inc. (Prelude), and intervenors, Lincoln Construction Company (Lincoln) and Bandes Construction Company (Bandes). In filing these proposals, each bidder represented he had "thoroughly examined all of the contract documents." After the bids were opened and reviewed by Board personnel, Lincoln, Prelude and Bandes were ranked first, second and fourth, respectively, based upon the dollar amount of their proposals. 2/ Thereafter, the Board issued its notice of intended action on March 7, 1989, wherein it advised all parties of its intention to award the contract to Lincoln. In doing so, the Board concluded that, although a bid bond accompanying Lincoln's proposal was not dated March 5 or 6 as required by the specifications, the deviation was minor and could be waived. That action prompted Prelude to file its protest. Through testimony of Lincoln's vice-president, it was established that the Board staff intended to change its initial position and to recommend to the Board that Lincoln's bid proposal be rejected and the contract awarded to Bandes. This change was prompted by the Board staff's discovery on the day of hearing (April 3) that, with the exception of Bandes, all bidders had failed to list the, roofing subcontractor on their bid proposals. The Board staff accordingly concluded that all bidders except Bandes should be disqualified. The bid specification upon which the Board relies to award the contract to Bandes is found in Part One, paragraph 1.1 of section 07511 of the bid specifications. The requirement is a relatively new one and imposes the following requirement upon bidders: NOTE: The contractor is required to list the name of the roofing subcontractor on the form of proposal, Section 1C. Section 1C is entitled "Form of Proposal" and includes the following section on page 1C-3 to be filled in by the bidder: The following subcontractors will be contracted with on this project. Type of Subcontractor Name of Subcontractor (Trade Specialty) (Company/Firm) The column on the left side is intended to identify the subcontractor by specialty, such as plumbing or roofing, while the blank spaces in the right hand column are to be filled in by the bidders with the name of the subcontractor who will perform the specialty. The Board has not been consistent in requiring bidders to list the name of subcontractors on the bid documents. According to the uncontroverted testimony of Lincoln, the Board requires the listing of subcontractors on some projects but not on others. For example, on the specifications for the recently let contract for the prototype new media center at four elementary schools, the left hand column on the above form was filled in by the Board with five types of subcontractors who were required on the project, including roofing. This meant that the bidder was to fill in the blanks in the right hand column with the name of the subcontractor who he intended to use on each specialty. However, on other contracts, including the one under challenge, both columns in the Form for Proposal have been left blank, and Lincoln construed this to mean that the name of the subcontractor was not required. Indeed, Lincoln pointed out, without contradiction, that on a recent contract which left both columns blank, as was true in this case, it was awarded the contract even though it did not identify the roofing subcontractor on its proposal. Because of this prior agency practice, Lincoln assumed the same policy would be used again. However, Lincoln conceded it had failed to read the requirement in paragraph 1.1 of section 07511 before preparing its proposal. There was no evidence that Lincoln gained any substantial advantage over other bidders by this omission. Also relevant to this controversy is Paragraph 10A of the General Requirements. This item is found on page 1B-11 and reads as follows: Each bidder shall indicate the names of specific major Subcontractors if called for on the form of proposal. If listing of Subcontractors is required and the Bidder fails to list them, the bid may, at Owner's option, be disqualified. (Emphasis added) This authority to waive the requirement is reinforced by language in Paragraph 21 of the General Requirements which provides in part that "(t)he owner reserves the right to waive minor technicalities." According to the Board's outside architectural consultant, who was the author of a portion of the contract specifications including section 07511, the omission of the name of the roofing subcontractor is a "minor" technicality that can be waived. However, the consultant had no personal knowledge as to whether the provision had actually been waived by the Board on prior contracts.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a Final Order be entered awarding the contract in question to Bandes Construction Company. DONE AND ORDERED this 20th day of April, 1989, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of April, 1989.
Findings Of Fact Petitioner is James Newberry Jr., who was also the Petitioner in the underlying challenge to Emergency Rule 64B14ER98-1 of Respondent Florida Board of Orthotists and Prosthetists, designated as DOAH Case No. 98-1186RE. The underlying case was brought pursuant to Section 120.56(5), Florida Statutes, pertaining to "Challenging Emergency Rules; Special Provisions." Mr. Newberry prevailed therein. The instant costs and fees case has been brought, in the alternative, pursuant to Sections 120.595(3) and 57.041, Florida Statutes. These are the only statutes relied upon in the Petition. In oral argument, Petitioner's counsel acknowledged that no case law exists to support an award of fees and/or costs under Section 57.041, Florida Statutes. The Petition does not contain an allegation that Petitioner incurred the attorney's fees set out in the attached affidavit of Ryan Garrett. The Petition does not attach any contract for attorney's fees. Petitioner's counsel acknowledged orally that no contract for fees existed and that the statements of the attorneys representing Petitioner addressed to "The Board of Orthotists Certification" in Baltimore, Maryland were addressed in that way because of an agreement between that private corporate entity and Petitioner Newberry, who is one of its members. By that agreement, apparently not reduced to writing, the Maryland corporation agreed to provide Petitioner with an attorney and pay the attorney's fees and further advanced all Petitioner's costs. "The Board of Orthotists Certification," also known as "The Board for Orthotics and Prosthetics Certification," of Baltimore, Maryland was not a party to the underlying emergency rule challenge. No evidence of its standing, if any, to challenge the emergency rule nor even of its involvement with Mr. Newberry for fee purposes was presented in DOAH Case No. 98- 1186RE.
The Issue The issues to be resolved in this proceeding are delineated with particularity in the Joint Pre-hearing Stipulation executed by all parties; however, the issues generally are as follows: Whether Experior has standing to challenge the RFP Process. Whether Promissor was a qualified or responsive proposer. Whether Experior's cost proposal was entitled to the maximum points if Promissor's proposal is determined to be unqualified or non-responsive. Whether the scoring of the proposals by Evaluator three was affected by his bias or was so aberrant as to be unsupportable or illogical or in violation of the RFP. Whether DBPR's award of MBE/WBE preference points to Experior and PSI was inappropriate and should be eliminated. Whether Experior suffered an unfair competitive disadvantage.
Findings Of Fact The Department first decided to seek proposals for computer-based testing (CBT) services on March 29, 2002, when it issued RFP 01-02-001. General Condition Number Seventeen of that RFP stated that any material submitted in response to the Request for Proposal will become a public document pursuant to Section 119.07, including any material which a responding proposer might consider confidential or a trade secret. Any claim of confidentiality was waived upon submission. Experior never protested that General Condition Number Seventeen in that first RFP. The cost proposals submitted by all proposers in response to that first RFP became public record after the Department posted the notice of intent to award the contract to Experior on September 17, 2002. Promissor and PSI filed notices of intent to protest and formal written protests. In response to those protests, however, the Department decided to reject all proposals. Experior then challenged the rejection of all proposals by filing a notice of intent to protest on October 24, 2002, but ultimately withdrew that protest on October 31, 2002. Thereafter on January 13, 2003, the Department issued requests for proposal RFP 02-03-005 (the RFP), seeking proposals for the provision of computer-based testing services for several professions regulated by the Department. That is the RFP with which this case is concerned. Questions arose by potential vendors at a Pre-Proposal Conference, which was held on January 21, 2003. Representatives of the Department, Experior, Promissor, and PSI attended. Amendment One to the RFP grew out of that conference and was issued on February 3, 2003. This amendment contained the written questions and the Department's answers and the minutes of the Pre-Proposal Conference. The Department appointed certain employees to serve on the evaluation committee. The employees who were appointed were Karen Campbell-Everett; Steven Allen; Mollie Shepard; Alan Lewis; Milan Chepko (alternate) and Joe Muffoletto (alternate). Additionally, Department employee Valerie Highsmith was appointed to evaluate proposer references. Ultimately, alternate evaluator Joe Muffoletto replaced evaluator Steven Allen due to the death of Mr. Allen's father. Amendment One to the RFP then identified the evaluators and informed all proposers that the educational and professional background of each evaluator could be obtained by making a public records request. The protest filed by Experior alleges that evaluator Joe Muffoletto was not appropriately qualified. Experior did not file a challenge to the evaluators within 72 hours after they were identified in RFP Amendment One. Realistically this would have been difficult to do unless they already knew what the objections to qualifications might be, since Amendment One, in identifying the evaluators, informed the proposers that they would need to make a public records request to obtain the educational and professional background of each evaluator. In any event, preponderant evidence shows that Mr. Muffoletto's experience is sufficient to constitute "experience and knowledge in program areas and service requirements" for the CBT contract within the meaning of Section 287.057(17)(a) (which only requires that evaluators "collectively" have such experience). Mr. Muffoletto has a bachelor's degree, with a major in English and a minor in psychology. He holds a master of science degree in education and master of arts degree in multi- disciplinary studies and has completed the graduate level course called "assessment of learning outcomes" at Florida State University. Before working for DBPR, in 1996, he was a junior high and high school English teacher for 30 years. He has worked as a computer trainer for students taking the New York State Regents Competency Exam. In 1996-1997 he was an OPS test editor with DBPR and from 1997 to 1999 worked for the Florida Department of Education as a coordinator of test development, where he trained consultants on how to write test items, review test items, and amend test content outlines and blue prints. While in that position, he also wrote an RFP and developed a set of exams. Since 1999 he has been a psychometrician with DBPR and currently develops computed-based examinations for landscape architects and auctioneers and regular examinations for electrical contractors. Promissor, Experior and PSI each submitted responses to the second RFP. The technical proposals were distributed to members of the evaluation committee for review sometime after a standardization session for evaluators was conducted on February 11, 2003. The members of the evaluation committee separately conducted an analysis of each proposal and awarded points based on their review. Each evaluator submitted his or her completed technical evaluation guides or score sheets to Lyra Erath, who then forwarded the score sheets to the lead evaluator, Molly Shepard. The evaluation of the proposer references was completed by Valerie Highsmith and her score sheets for such evaluations were submitted to Bobby Paulk. On February 27, 2003, the Department opened the cost proposals, which reflected the following prices proposed per hour: Promissor: $9.00; Experior: $10.50; PSI: $11.35; and NCS Pearson: $14.75. The score for each cost proposal was calculated in accordance with a mathematical formula set out in the RFP. Promissor proposed the lowest cost and thus received the maximum cost score of 175 points. Experior received 150 points, PSI 138.77 points, and NCS Pearson 106.79 points. Upon concluding the evaluation process established by the RFP, Promissor's proposal was ranked first with 490.08 points out of a maximum available 555 points. PSI was second place, being awarded 461.40; Experior was awarded 440.03 points and NCS Pearson, 305.16 points. The bid/proposal tabulation was posted by the Department on March 12, 2003. Therein it indicated its intent to award the contract for CBT Services to Promissor. On March 17, 2003, Experior and PSI filed notices of intent to protest the intended award to Promissor. Experior thereafter timely filed a formal written protest, although PSI did not. ISSUES TO BE RESOLVED The Time Period for Contract Implementation Experior's protest alleges that the time period for contract implementation was allegedly "too aggressive" (short). The RFP however, repeatedly notified all proposers that they would waive any protest of the terms and specifications of the RFP unless they filed such protest within 72 hours of receiving notice of the specifications, as provided in Section 120.57(3). Similarly, RFP Amendment One informed the proposers that the RFP was amended to include "changes and additions" and that failure to file a protest within the time specified in Section 120.57(3) would constitute a wavier of Chapter 120 proceedings. RFP Section V, states "A. DBPR estimates that the contract for the RFP will be effective on or about March 17, 2003, and the testing services begin May 19, 2003." The 30- day periods the protest claims were "too aggressive" (i.e. too short) were specifically disclosed in RFP Section X concerning "scope of services." The time period of which Experior now complains was apparent on the face of the RFP. Indeed, when Experior's personnel first read the RFP, they had a concern that the time period might give Promissor a competitive advantage. At the Pre-Proposal Conference on January 21, 2003, Mark Caulfield of Experior even expressed concern that the 60 days allowed for implementation was a very aggressive schedule and asked the Department to reconsider that time period. The concern over the implementation schedule was documented in written questions which DBPR answered in Amendment One, telling all proposers that the implementation schedule was fair, in its view, and would not be changed. Experior did not protest the RFP's implementation time period within 72 hours of first reading the RFP and never filed a protest to any term, condition or specification of RFP Amendment One, including the Department's notice that it felt that the implementation schedule was fair and that it would not be amended. Thus, any challenge to the implementation schedule was waived. Even had Experior not waived its challenge to the implementation schedule, there is no persuasive evidence that the schedule would give Promissor an unfair competitive advantage over Experior and PSI. The DBPR tests are already finalized and would simply have been transferred to a new vendor if a new vendor had been awarded the CBT Services Contract. Experior failed to adduce persuasive evidence to show that any proposer was advantaged or disadvantaged by the implementation schedule which applied to all proposers. Evaluation of the MWBE Submittals RFP Section XIV.Q. encouraged minority and women-owned businesses (MWBE) to provide work goods, or services associated with services contemplated by the RFP. Proposers were to be awarded additional points for committing to use MWBEs, based on the percentage of the business under the contract the MWBE would perform. Experior, Promissor and PSI each proposed to use MWBEs to supply goods or services needed to perform the CBT contract. Promissor indicated that it would use one MWBE for 30 percent of the contract value. Resultingly, the Department awarded Promissor 16.5 MWBE preference points (30 percent x 55 maximum points). Experior presented no persuasive evidence showing how the Department interpreted and applied the MWBE provisions of the RFP or showing that the Department acted in excess of its authority in determining the award of MWBE points, as described in Amendment One. Experior offered no evidence concerning whether the Department considered or applied the "two subcontractor" limitation in RFP Section VI.5 ("no more than two subcontractors may be used") when it evaluated the Experior and PSI MWBE proposals, nor how it applied that limitation. Experior and PSI both indicated they would use three MWBE vendors. Experior proposed to use JR Printers (Printing Services); Colamco, Inc. (computer equipment for testing centers); and Workplace Solutions, Inc. (furniture for testing centers). (Furniture is a commodity, not a service.) PSI proposed to use Victoria and Associates (staffing services); Franklin's Printing (printing/mailing services); and National Relocation Services, Inc. (furniture, computers, delivery and installation [commodities, not services]). Based on the proposals, the Department awarded Experior 7.15 points and awarded PSI 17.48 points. Although Experior claims that it and PSI each exceeded the two subcontractor limitation by proposing to use three MWBEs, RFP Section XIV.Q. did not specifically require that proposed MWBEs be subcontractors, but rather only required that MWBEs be utilized by the primary vendor (contractor) to provide work, goods or services. Thus a vendor of goods or a supplier of services could qualify as an MWBE (and, implicitly, not necessarily be a subcontractor). Experior did not prove that any of the MWBEs proposed by PSI or Experior were actually subcontractors on an ongoing basis. The parties stipulated that the companies that each proposed to use were vendors. Moreover, when questioned about the provisions of Section VI regarding sub- contracting of services under the RFP, Jerome Andrews, chief of purchasing and human resources, differentiated the purchase of services from the purchase of commodities as being defined by statute. (See Sections 287.012(4) and 287.012(7).) Experior did not explain or offer persuasive evidence relating to its allegation that PSI's proposal for MWBE services was misleading. Experior did not show that PSI's MWBE proposal did not conform to the RFP requirements or, if there were a defect, how many points, if any, should be subtracted from PSI's total. Moreover, to the extent that Experior claims that the proposal was defective because PSI's proposed suppliers would not provide services over the course of the entire contract, Experior's proposal suffers the same defect, as Experior's proposal admits that "[c]omputer equipment and furniture services will be performed during the implementation phase of the contract." Thus, if PSI's MWBE point award had to be reduced, so would Experior's. Experior fail to carry its burden to show any error in the scoring of the PSI MWBE proposal. It did not establish that these vendors were subcontractors and thus did not establish that the relevant vendors were of a number to exceed the subcontractor limitation in the RFP. It did not persuasively establish that such would have been a material defect, if it had been exceeded. Completion of Evaluation Sheets Some of the RFP's evaluation criteria identified the number of points available and state that such points would be "awarded as a whole and not broken down by sub-sections." In contrast, the remainder of the evaluation criteria simply stated that a specific number of points was available for each specified criterion. In each instance where the evaluation criteria stated that points are "awarded as a whole and not broken down by subsections," the corresponding section of the RFP was broken down into two or more subsections. In each instance where the evaluation criteria simply listed the number of points available, the corresponding section of the RFP was not broken down into subsections. Experior alleged that the evaluators did not properly score Experior's proposal in instances where the evaluation sheet indicated "points are to be awarded as a whole and not broken down by subsections." Experior offered no proof regarding how the Department interpreted that provision or the manner in which the scoring was actually conducted, however. The score sheets reflect that the evaluators actually did award points "as a whole," not broken down by subsections, for those evaluation criteria where that was required. The record does not support any finding that the Department or its evaluators violated the requirements of the RFP, Department policy or controlling law and rules in this regard. Issue of Bias on the Part of Evaluator Three Experior contends that Evaluator Three, Mr. Muffoletto, was biased against Experior. The persuasive evidence does not support that allegation. During his employment with the Department, Mr. Muffoletto interacted with Experior on one occasion regarding reciprocity of an out-of-state examination. This experience left him with the impression that Experior was "proprietary" because it was protective of the content of its examinations. The evidence did not show he had any other impressions, positive or negative, concerning Experior or misgivings about Experior being selected in the first RFP. The mere fact that his total score for Experior was lower than those awarded by other evaluators does not establish bias or irrationality in scoring. The evidence shows that Mr. Muffoletto scored the proposals in a rational manner. He appeared to evaluate criteria comparatively and gave a proposer more points if that proposer was more convincing than another on a particular criteria or point of evaluation. He gave lower scores when the proposer simply copied the text of the RFP and then stated that the proposer would meet or exceed the criteria; in accordance with instructions that evaluators could give lower scores in such cases, so long as the scoring was consistent between proposals. Mr. Muffoletto gave higher scores when the proposers gave more individualized responses, provided more thorough statistics and ways to interpret those statistics, gave numerous specific examples and had a more attractive presentation. Even if Mr. Muffoletto had been biased, it has not been persuasively shown that such would have a material impact on the outcome of the evaluation. If the scores of Evaluator Three were completely eliminated for both PSI and Experior, which is not justified, PSI's point total would be 459.12 and Experior's point total would be 453.54. If Evaluator Three were deemed to give Experior scores equivalent to the highest scores awarded to Experior by any other evaluator, PSI's total would be 461.42 and Experior's point total would be 458.87. Even if Evaluator Three had given Experior the maximum points for each criterion, PSI's point total would have been 461.42 and Experior's point total would have 461.12. Issue of Prior Knowledge of Experior's Prior Cost Proposal Experior contends that Promissor's knowledge of Experior's cost proposal submitted in response to the first RFP in 2002 gave Promissor an unfair competitive advantage. Experior waived that challenge, however, when it withdrew its protest to the rejection of all bids submitted in response to the first RFP. Experior knew when it filed and withdrew its protest to the first RFP decision that all cost proposals had become public record and so it was incumbent on Experior to have challenged the issuance of a second RFP, if it had a legal and factual basis to do so. At the latest, Experior should have challenged the second RFP specifications when issued (within 72 hours) as Experior had already obtained the other proposers' cost proposals and so it knew then that the prior cost proposals were available to all for review. Even if Experior had not waived that challenge, the evidence does not support a finding that Promissor gained any competitive advantage. Although Experior attempted to show, through the testimony of Mark Caulfield, that Promissor could not perform the CBT Services Contract at a profit at the $9.00 per hour price it proposed, Mr. Caulfield actually testified that it would be possible for a company to perform the services for $9.00 per hour, and he did not know what Promissor's actual costs were. Moreover, there is no persuasive evidence that Experior's prior cost proposal played any role in Promissor's determination of its bid for the second RFP or, if it did, that such consideration would have violated any provision of the RFP, governing statutes or rules or Department policies, under the prevailing circumstances, if it had occurred. Alleged Improper Scoring of Experior's Proposal with Respect to Criterion VII.A. Experior alleged that Evaluator One should have awarded 15 points instead 11 points for Experior's proposal format, criterion VII.A., but Experior did not offer the testimony of Evaluator One or any other evidence supporting that allegation. Experior failed to carry its burden of showing that the award of 11 points to Experior for criterion VII.A., was irrational or violated the requirements of the RFP or controlling policies, law or rules of the Department. Even if Evaluator One had awarded 15 points for that criterion, Experior admitted it would have no material impact on the outcome of the procurement, given the more than 21 point advantage PSI enjoyed over Experior. Responsiveness and Qualification The preponderant evidence does not establish that Experior was entitled to but did not receive the additional 21.38 points that it would have to earn to score higher than PSI and move into second place. Experior did not establish error in the evaluation or scoring of its proposal or PSI's proposal that alone, or collectively, would be sufficient for Experior to overtake PSI. As a result, Experior could only prove its standing ahead of PSI by having the Promissor proposal disqualified, which would move it to the first-ranked position because of accession of the full 175 points for having what, in that event, would be the lowest cost proposal. Experior's objection to the Promissor proposal is not meritorious. Its protest alleges that "because Promissor will [allegedly] subcontract for services representing more than 33 percent of contract value, Promissor is disqualified from submitting its proposal and its proposal must be stricken from consideration." Experior did not allege any error in the scoring of Promissor's proposal and so Promissor's highest score cannot be changed. Indeed, even if Experior were awarded the maximum technical score of 325 points, Experior's score would be 482.15 points, still less than Promissor's score of 490.08 points. Experior, as a practical matter, cannot earn enough points because of the disparity in final cost proposal scores to overtake Promissor, unless it can prove Promissor should be disqualified. Experior's proof did not amount to preponderant, persuasive evidence that the Department erred in determining that Promissor's proposal was responsive and that Promissor was a qualified proposer. The Department did an initial review of the proposals to determine if they were responsive to all mandatory requirements, and any proposer determined non-responsive would have been excluded at that point. Promissor's proposal contained all required information in the required format and was deemed responsive. The preponderant evidence shows that the Department's determination that Promissor was responsive and qualified comported with the requirements of the RFP and controlling policy, rules and law. Promissor expressly stated that it would comply with the RFP's subcontracting guidelines upon performing the contract wherein it stated "Promissor agrees and commits to meet the requirement of the RFP." Promissor's proposal stated its intent to subcontract less than 33 percent of the contract value, and that was all that was required for the proposal to be responsive. There is nothing in the Promissor proposal that indicated that Promissor would not comply with the subcontracting guidelines. Experior's entire challenge to the Promissor proposal is based on the contention that Promissor intended to use a subcontractor to provide call center services under the Florida contract but did not say so in its proposal. The Promissor proposal actually stated that Promissor would use its "proprietary scheduling system" or "proprietary reservation system" to service the Department's contract as it was currently doing, not that it would use any particular call center. These representations appear to be true, as Promissor's "scheduling system" or "reservation system" (the proprietary software Promissor uses to take reservations) that it said it would use for the new Florida contract is the same system used under the prior contact with the Department. Ordinarily, whether or not Promissor would actually comply with the subcontractor guidelines could not be determined until Promissor actually performs the contract. It is an issue of contract compliance and not responsiveness or qualification. Here the evidence shows that Promissor was in compliance with the 33 percent maximum subcontracting requirement before the originally scheduled contract implementation date. Since Promissor wished to obtain the maximum points for minority participation, Promissor decided to subcontract to the maximum possible extent with an MWBE. In doing so, Promissor wanted to assure that the use of Thompson Direct, Inc., for call center services did not make it exceed the 33 percent subcontractor standard. Thus, Promissor decided, before it submitted its proposal, to perform the call center services from one of its three regional centers and this decision was communicated internally before Promissor prepared its proposal. Promissor initially intended to perform the call center services from its regional offices in Atlanta, Georgia. In order to implement that decision, senior executives of Promissor, including its president, toured that office in early March, before the Department posted its notice of intent to award to Promissor. After the notice of award was posted on March 12, 2003, Promissor promptly posted an employment advertisement on its website seeking persons to act as call center representatives to service the Florida contract from the Atlanta office. That advertisement was posted on March 14, 2003, a day before Experior filed its notice of intent to protest. In early to mid-April, the manager of the Georgia regional office prepared a project plan that revealed that the Georgia regional office might not be ready to perform call center services by the May 20th contract implementation date. Promissor then decided to use its Maryland regional office to perform the call center services. Regardless of the location of the call center, the scheduling system used by Promissor would be the same as under the prior contract and the same as Promissor promised in its proposal. The Scranton call center and the three regional offices use the same proprietary scheduling system provided by Promissor and run from servers located at Promissor's headquarters in Bala Cynwyd, Pennsylvania. Even at the Scranton call center that was previously used, Promissor trained all of the employees, who handle calls only for Promissor, wrote the scripts for their use and provided the proprietary scheduling software. The Maryland call center was actually accepting all calls for the Florida programs to be serviced pursuant to the RFP by May 19th, before the May 20th contract implementation date. Since the call center services were actually being provided by Promissor's Maryland regional office before the contract implementation date, Experior's claim that Promissor would provide those services through a subcontractor is not supported by preponderant evidence. Allegations that Promissor Made Misrepresentations Regarding Subcontractors In light of Promissor's actual provision of call center services from its regional office before the contract implementation date, Experior's contention that alleged misrepresentations occurred in the Promissor proposal are without merit. Even if Promissor had not actually performed, however, Experior failed to prove that Promissor made any misrepresentations or was unqualified. In support of its claim that Promissor was unqualified, Experior introduced into evidence three proposals that Promissor or ASI (a corporate predecessor to Promissor) had submitted to agencies in other states in the past three years. Experior argues that Promissor/ASI made misrepresentations in the other proposals and, therefore, Promissor made misrepresentations in the proposal at issue in this proceeding. Its basis for alleging that Promissor made misrepresentations in the Florida proposal at issue is its contention that Promissor/ASI made misrepresentations in other proposals to other states. No evidence was offered that Promissor had made a misrepresentation to the Department as to this RFP, however. In light of Promissor's actual performance in accordance with its proposal and the RFP requirements, the proposals from the other states have little relevance. Experior did not prove that Promissor made misrepresentations in the other proposals, particularly when considering the timing of those proposals and Promissor's corporate history. Promissor's corporate history must be considered in evaluating the claim of misrepresentation to the other state agencies in other states. In 1995, Assessment Systems, Inc., or "ASI," was acquired by Harcourt Brace Publishers. In June of 2001, ASI was sold with a number of other Harcourt companies, including a company called Harcourt Learning Direct, to the Thompson corporation. Harcourt Learning Direct was re-named Thompson Education Direct. Soon after, the federal government required, for anti-trust reasons, that Thompson divest itself of ASI. Accordingly, ASI was acquired by Houghton Mifflin Publishers in December 2001, and its name was later changed to Promissor. Up until December 2001, the entity now known as Promissor and the entity now known as Thompson Education Direct were corporate affiliates under the same corporate umbrella. The Kansas Proposal Experior's Exhibit five was ASI's Proposal for Agent Licensing Examination Services for the Kansas Insurance Department dated May 8, 2000. A letter that accompanied the proposal stated that ASI would not engage a subcontractor for examination development or administration services. Mark Caulfield testified that he did not know whether or not what was said in this letter was true on the date it was written. He testified that he did not know if ASI was using any subcontractors or any outside contractors for any purpose in May of 2000. In fact, as of May 2000, ASI did not subcontract for any call center services; at the time that the letter was written, all of the representations in the letter were true. ASI was awarded the Kansas contract and Experior did not protest. Experior did not offer any evidence related to the requirements in the Kansas RFP and is not aware of any issues between Kansas and Promissor regarding the contract. There is no evidence that the Kansas request for proposals had any subcontracting limitations in it. The proposal that ASI submitted to Kansas in May 2000 listed a phone number for ASI's call center. In preparation for the hearing, witness Mark Caulfield called that phone number and claimed that a person answered the phone "Promissor," and said she was located in Scranton, Pennsylvania. Experior did not show that the person that answered the phone was an employee of Promissor. Whether or not the person who answered the phone in that example was or was not an employee of Promissor and could or could not bind Promissor with any statement as a party admission, is beside the point that it has not been shown who would have answered the phone in May 2000, or where they would have been located, as to whether or not that person was the employee of Promissor or its immediate corporate predecessor in interest or whether that person was employed by some subcontractor. That is immaterial, however, in the face of the fact that it has not been proven that the Kansas request for proposals had any subcontracting limitations in the first place and, therefore, no misrepresentation in the Kansas situation has been proven on the part of Promissor. The Maine Proposal Experior's Exhibit seven is ASI's proposal to provide real estate examination administration and related services for the Maine Department of Professional Regulation and is dated August 1, 2001. As of August 1, 2001, ASI did not subcontract for call center services. On pages 2-10 of the Maine proposal, there is a reference to ASI having an extensive network of program-specific, toll-free telephone lines and program-dedicated customer care representatives. This statement was shown to be accurate and was an accurate statement when made on August 1, 2001. The statement refers to the monitoring of the reservation process done by ASI management. Experior admitted that it had no reason to believe that in August of 2001, ASI did not have an extensive network or program-specific toll-free telephone lines and program-dedicated customer care representatives, and Experior did not prove that to be currently untrue. Experior's Exhibit eight is Promissor's Real Estate Candidate handbook regarding the Maine procurement dated April 2003. As of April 2003, the statements made in the handbook were accurate and correct. The handbook listed on page 11 a customer care phone number of 877-543-5220. Experior provided no evidence as to the location where that phone number rang in April of 2003. Experior did not show persuasive evidence regarding the requirements in the Maine RFP and there is no evidence that the Maine RFP had any subcontracting limitations as are in question in the instant case. The Oklahoma Proposal Experior's Exhibit nine was Promissor's response to Bid No. N031354 for License Testing Services for the Oklahoma Insurance Department. It is dated December 18, 2002. Promissor did not state in the proposal that it would not use subcontractors. There is no need to reference subcontractors in the Oklahoma proposal as the Oklahoma RFP did not contain subcontracting limitations. Oklahoma has approved the manner in which Promissor is performing under that contract and Experior did not establish that the statements in Promissor's proposal were false when made or now. The Texas Proposal Experior's Exhibit twelve is Promissor's press release titled "Texas Selects Promissor as Exclusive Provider for Insurance License Testing," dated October 1, 2002, in which Promissor referred to "the Promissor Call Center." Experior did not establish that Texas was not served by a Promissor call center or that Promissor was not performing in the manner its Texas proposal promised. In fact, Texas has approved Promissor's performance under the Texas contract. Even if the proposals Promissor offered had stated that Promissor would provide call center services through a specified entity (which they did not do), and then Promissor later performed such services through another entity, such evidence would be insufficient to prove that Promissor would not comply with the Florida RFP's subcontracting guidelines, especially given Promissor's actual performance in accordance with its proposal. Experior did not establish with preponderant evidence a "routine business practice" of Promissor to make misleading or false promises in proposals to evade subcontracting guidelines. There is no evidence in any of the four states concerning which Experior provided evidence, that they had any subcontracting limitation in their RFPs. The evidence showed that the statements in each of these proposals were undoubtedly accurate at the time they were made; to the extent that the provision of call center services differs from what was promised (although the evidence does not establish that), such difference is explained by the changes in corporate structures that have occurred since the proposals were submitted. Additionally, the evidence established that Promissor has submitted between 70 and 120 proposals since the beginning of 2000 across the nation. The documents relating only to other proposals to other states that were not even proved to have requirements similar to Florida's are insufficient to establish that Promissor had a "routine" practice of making misleading promises about its call center services. Accordingly, the Petitioner has not offered preponderant, persuasive evidence that Promissor is unqualified as a proposer.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a final order be entered by the Department of Business and Professional Regulation denying the Petition and approving the intended award of the contract to Promissor, Inc. DONE AND ENTERED this 22nd day of August, 2003, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with Clerk of the Division of Administrative Hearings this 22nd day of August, 2003. COPIES FURNISHED: Wendy Russell Weiner, Esquire Mang Law Firm, P.A. 660 East Jefferson Street Tallahassee, Florida 32301 Joseph M. Helton, Jr., Esquire Michael J. Wheeler, Esquire Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2022 Paul R. Ezatoff, Esquire Katz, Kutter, Alderman & Bryant, P.A. 106 East College Avenue, Suite 1200 Tallahassee, Florida 32301 Michael P. Donaldson, Esquire Carlton Fields Law Firm 215 South Monroe Street, Suite 500 Tallahassee, Florida 32301 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202
The Issue Are the intended contract awards by the Department of Juvenile Justice (Department) to Intervenor, Ramsay Youth Services, Inc. (Ramsay) under Request for Proposal (RFP) Numbers J5G01 and J5G02 contrary to the Department's governing statutes, applicable rules or policies, or the specifications of the RFPs?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: Background On March 29, 2002, the Department issued RFP No. J5G01 for the operation of a 350-bed residential commitment program for high-risk males in Polk City, Florida (Polk Program). On April 5, 2002, the Department issued RFP No. J5G02 for the operation of a 74-bed, multi-level residential commitment program in Homeland, Florida (Bartow Program). CSC is the incumbent provider for both the Polk and Bartow Programs. On or about April 25, 2002, two proposals were submitted in response to the RFP for the Polk Program, one from CSC and one from Ramsay. On or about May 3, 2002, four separate proposals were submitted by CSC, Ramsay, Sescuricor New Century (Securicor), and Lighthouse Care Center (Lighthouse) in response to the RFP for the Bartow Program. On June 25, 2002, the Department posted separate notices of its intent to award contracts for the Polk and Bartow Programs to Ramsay. The Notice of Intended Contract Award for the Polk Program (RFP No. J5G01) lists Ramsay as the highest-ranked bidder with 655.3 average points, and CSC as the second-ranked bidder with 537 average points. The Notice of Intended Contract Award for the Bartow Program (RFP No. J5G02) lists Ramsay as the highest-ranked bidder with 590.3 points, followed by Securicor with 542.7 average points, CSC with 535.7 points, and Lighthouse with 233.3 points. All parties stipulated to the Department's scoring of the past performance portion of both CSC proposals. With the exception of Item C-3.7, all parties stipulated to the Department's scoring of the past performance portion of both Ramsay proposals. With regard to Item C-3.7, the parties stipulated the Department's scoring for Ramsay should have reflected 60 additional points because Ramsay's Manatee Adolescent Treatment Services program (Department's Contract No. F7027) met or exceeded the approved Performance Based Budgeting performance measure for recidivism for the past two years. In light of the corrections for Item C-3.7, Ramsay's total average score for the Polk Program should have been 715.3 (i.e., 655.3+60), compared to CSC's score of 537. Likewise, for the Bartow Program, Ramsay's total average score should have been 650.3 (i.e., 590.3 + 60), compared to CSC's score of 535.7. The Process Since at least the end of 2001, the Department has utilized two procurement methods: one provides for the scoring of costs; the other does not because the RFP specifies a fixed maximum contract price. When the fixed price method is used and costs are not scored the Department conducts a so- called "negotiation phase" after issuing notice of intent to award the contract. During the so-called "negotiation phase," the Department and offeror determine such things as the unfilled bed rate and maintenance rate, but the Department does not negotiate material terms of the technical proposal or allow the selected offeror to modify its proposal. The Department does not allow the selected offeror to increase the cost or price included in its proposal. However, if an error is discovered in the selected offeror's budget, the budget can be adjusted to redistribute expenses from one line item to another, so long as the proposed services are provided and the proposed cost or price is not exceeded. If the Department is unable to complete execution of the contract because the selected offeror is unable to provide the program services within the contract set forth in its proposal, the Department moves on to negotiate with the next offeror. Use of the "fixed price" procurement method has enabled the Department to reduce procurement process from 180 to less than 120 days on average, and often as low as 60 days. Speeding up the procurement process helps to ensure that services will continue to be provided and that legislatively appropriated funds do not go unused and, as a result, become subject to forfeiture. This is important because the State has a "waiting list" of committed youth who require program services. The "fixed price" method also allows the Department to place its principal emphasis on the quality of programs offered. In this case, the RFPs for both programs contemplate fixed priced contracts. Each RFP specifies a maximum contract dollar amount that the Department will award for each contract. The dollar amount is a "fatal criterion," meaning that any proposal with a cost exceeding that amount would be rejected. Both RFPs required each offer to submit a technical proposal (Volume I) setting forth an introductory statement and specific sections describing the offeror's management capability, the offeror's past performance, and the program services being offered. Both RFP's required offerors to submit financial data (Volume II) including, among other things, a total cost or price for the program and an itemized budget. The total costs submitted by Ramsay and CSC did not differ significantly; the difference was less than one dollar for the Polk Program and only two dollars for the Bartow Program. Both RFP's provided that zero points would be assigned for costs or price, indicating that costs or price would not be scored. Instead, the primary scoring criteria are "program services" and "past performance." Together, these criteria reflect 700 out of the 1000s total points available. Nothing in the RFPs requires the Department to evaluate budget details in conjunction with its review of the technical proposals prior to the notice of intended award. The Department uses the budget information primarily as a baseline to assist it in moving through the "negotiation phase." It enables the Department to determine if specific costs would not be incurred or not allowable. It enables the Department to negotiate the unfilled bed rate, which allows the Department to reduce the contract rate to account for costs that would not be incurred for beds that are not occupied. It also forces offerors to determine whether they can provide the required services within the maximum price before they submit proposals. Based on a Department document entitled "Briefing for SSET Team Members and Advisors," CSC claims that the "RFP Process" requires the Department to evaluate proposed costs for realism, reasonableness, and completeness. The "Briefing" document does state that "the contract administrator is responsible for evaluating the cost proposals of each offeror for completeness, reasonableness, and reality using the COST [PRICE] PROPOSAL EVALUATING form. However, the "Briefing" document is not a part of the RFP's and does not reflect official Department policy. The "Briefing" document is merely a guideline. In this case, the Contract Administrator, Marvin Floyd, did not sign the "Briefing" document and did not score or perform an extensive analysis of the specifics of the proposed budgets for realism, reasonableness, and completeness. However, Marvin Floyd did review each cost proposal to determine whether it included a total cost or price and whether the budget information in Attachment H was filled out. In that sense, Marvin Floyd did review the cost proposal for completeness. Similarly, Marvin Floyd also reviewed the proposed costs and price to determine whether it exceeded maximum contract dollar amount, which the Department had previously determined to be realistic and reasonable. In that sense, Marvin Floyd did review the costs or price for realisms and reasonableness. CSC failed to demonstrate that the evaluation process utilized by the Department provided a competitive advantage to Ramsay. To the contrary, the same evaluation process and guidelines were used for both CSC and Ramsay. Ramsay's Proposed Budget Based on isolated statements made in Ramsay's technical proposal and a review of Ramsay's budget, CSC's senior Vice President, Paul Donnelly, opined that Ramsay's proposal was somewhat "naïve" and a "virtual primer . . . for a novice[.]" However, Donnelly opinions must be weighed in light of the fact that CSC received "minimal performance" and "noncompliance" ratings for both the Polk and Bartow Programs in the latest Department Quality Assurance reviews. Furthermore, Donnelly himself testified in deposition that Ramsay submitted an "impressive technical proposal." The record demonstrated that Ramsay is an experienced provider that currently operates nine programs for the Department, including the Department's only contracted maximum-risk program. CSC contends that the budget included in Volume II of Ramsay's proposal for the Polk Program is not realistic, reasonable, or complete because it did not include specific line items for certain direct expenses, including start-up costs, overtime, employee expenses, and taxes, as well as certain indirect expenses, such as insurance and corporate overhead. CSC failed to demonstrate that the RFP specifications or the Department policy requires such budgetary detail. Moreover, Ramsay's Chief Operating Office, Jorge Rico, explained that Ramsay's budget did address most of the costs identified by CSC in other, more general line items. Whereas CSC's budget was more specific as to some items, Ramsay's budget was more specific as to others. For example, Ramsay included a specific line item for recruiting, but CSC addressed this expense in the general category of corporate overhead. Similarly, Ramsay included specific line items for nursing staff, whereas CSC addressed nursing staff in the general category of medical services. CSC also faulted Ramsay for not including start-up or "transition" costs in its budget for the Polk Program. But had such a line item been included, it would have been eliminated during the so-called "negotiation phase" because the Department does not allow start-up costs for existing programs. CSC's argument that Ramsay should have budgeted these costs amounts to a claim that CSC should be given a competitive advantage because, as the incumbent provider, CSC would not incur transitional costs and, therefore, would have no reason to budget them. Such an advantage would be contrary to competitive principles by favoring the incumbent provider over other offerors. The primary indirect expense that CSC criticized Ramsay for not including in its budget is corporate overhead. As Rico explained, however, corporate overhead is a fixed cost that will not increase with the addition of a new program. Ramsay made a business decision to put whatever funds that might be allocated as corporate overhead into the program itself. CSC claims that Ramsay cannot provide the services outlined in its proposal without incurring a loss. Rico acknowledged that Ramsay likely would incur losses for at least the first year of the programs, as is common when a new provider takes over an existing program. However, whether or not a provider makes a profit on a program is not the Department's concern and is not an award criterion. In fact, when corporate overhead is allocated as CSC suggests Ramsay should have in its budget, CSC itself incurred losses on both Polk and Bartow Programs over the twelve-month period ending July 2002. In its totality, the evidence indicates that the budgets submitted by Ramsay and CSC differ due to differences in management styles. Those differences do not render Ramsay's budget unrealistic, unreasonable, or incomplete. The differences in total costs proposed by CSC and Ramsay were negligible. In any event, budgets are estimates, actual expenses never match budget line items. The evidence does not support CSC's claim that Ramsay will need to make material changes to its budget in order to provide the program services at the cost or price set forth in its proposal. Ramsay is committed to providing the services described in its technical proposal at the cost set forth in its cost proposal. Staffing Ratio Based on a statement in Ramsay's technical proposal, CSC suggests that Ramsay would not meet the staffing ratios required for the Polk Program. However, Ramsay's technical proposal clearly states in bold lettering that Ramsay "will meet staffing requirements documented in the RFP (1:8 days and evening; 1:12 nights)." Moreover, Ramsay's budget includes enough positions and dollars to meet the required staffing ratios. In fact, with regard to "youth workers," who provide the core of the program staff, Ramsay's budget includes considerably more positions (186 full time equivalent or "FTEs"), than does CSC's budget (120.9 FTEs). Instructions to Evaluators CSC failed to demonstrate that the Department failed to provide its evaluators with specific and legally sufficient instructions regarding the scoring of proposals. To the contrary, the scoring sheets provided to the evaluators contain specific and detailed instructions on how each scoring criterion was to be evaluated. For example, in evaluating "Programs Services," the scoring sheets advise the evaluators to assess "soundness of approach" and "compliance with requirements" as follows: SOUNDNESS OF APPROACH: (Does the proposal reasonably and logically identify the proposed approach to perform the services as specified and required by the RFP, Attachment G, Exhibit 1, Scope of Services?) COMPLIANCE WITH REQUIREMENTS: (The degree to which the proposal complies with the requirement specified and required by the RFP, Attachment G, Exhibit 1, Scope of Services)(Does the proposal comply with all requirements for all service components, as identified in Attachment G, Exhibit 1, Scope of services, of the RFP?) The evaluators were then required to provide a numeric score ranging from 5 to zero. The scoring sheets provide specific criteria for determining the appropriate numeric score. For example, an "excellent" score of 5 would be appropriate if "[t]he proposal exceeds all technical specifications and requirements for all program components (and it) is innovative, comprehensive, and complete in every detail." Other Issues CSC failed to prove its allegations that the Departments' scorers evaluated and scored the proposals inconsistently or incorrectly or that the Department deviated from the RFP criteria in evaluating and scoring the proposals. CSC also failed to demonstrate that the Department's reduction in the number of beds for the Bartow Program from 74 to 50 beds after issuance of the RFP provided an unfair advantage to Ramsay or was otherwise contrary to competition.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order dismissing CSC's protests and awarding the contracts to Ramsay pursuant to RFP Nos. J5G01 and J5G01 as originally proposed. DONE AND ENTERED this 29th day of October, 2002. Tallahassee, Leon County, Florida. ___________________________________ WILLIAM R. CAVE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6947 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of October, 2002. COPIES FURNISHED: Brian Berkowitz, Esquire Department of Juvenile Justice 2737 Centerview Drive Tallahassee, Florida 32399-3100 James C. Hauser, Esquire Warren Husband, Esquire Metz, Hauser and Husband, P.A. Post Office Box 10909 Tallahassee, Florida 32302-2909 Gary V. Perko, Esquire Hopping, Green, Sams & Smith 123 South Calhoun Street Post Office Box 6526 Tallahassee, Florida 32314 R. Terry Rigsby, Esquire Law Offices of R. Terry Rigsby, P.A. 215 South Monroe Street, Suite 505 Tallahassee, Florida 32301 Gary P. Sams, Esquire Hopping, Green, Sams & Smith Post Office Box 6526 Tallahassee, Florida 32314 William G. Bankhead, Secretary Department of Juvenile Justice Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-3100 Robert N. Sechern, General Counsel Department of Juvenile Justice Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-3100
The Issue The issue in this case is whether the Department of Insurance acted according to the requirements of law in reviewing submissions of vendors responding to the Department's request for proposals for provision of licensure and examination services.
Findings Of Fact The Department of Insurance is the state agency responsible for licensure and regulation of insurance agents in Florida pursuant to the Insurance Field Representative Licensing Procedures Law set forth at Chapter 626, Florida Statutes. Persons seeking to become licensed by the Department are required to take and pass an examination. Insurance Testing Corporation (ITC) develops and administers insurance licensure examinations in other states. Assessment Systems Incorporated (ASI) develops and administers insurance licensure examinations in other states. Since 1990, the Department has contracted with the University of South Florida (USF) for exam administration. The contract was to expire on September 30, 1994. It has been twice extended and is currently set to expire on September 30, 1996. The parties have standing to participate in this proceeding. On December 29, 1995, the Department of Insurance issued a Request for Proposal Number 95/96-07 (RFP) seeking the provision of testing development and administration services. The RFP was prepared through a collaborative effort within the Department. In issuing the RFP, the Department intended to broaden the level of services obtained from a contracted vendor and to take advantage of the expertise of companies already in the business of regulatory examination provision. The Department issued an RFP to permit vendors to generate their own programs for licensure and examination programs. The alternative, an Invitation to Bid, would have required vendors to bid on a program designed by the Department. The RFP provided that the contract between the Department and the successful vendor would consist of the RFP, addenda and amendments to the RFP, and the successful vendor's proposal. The RFP also provided that Department reserved the right to negotiate with the selected contractor, to waive minor irregularities and to reject all submissions. The RFP provided a schedule and deadlines as follows: submission of questions and requests for clarification by vendors, January 15, 1996; the preproposal conference with vendors, January 22, 1996; submission of proposals, February 12, 1996; oral presentations by vendors, February 19, 1996; and posting of the intended award, February 23, 1996. There was no protest to the RFP's specifications. Submissions were received from five vendors. The RFP evaluation panel scheduled separate oral presentations by the five vendors submitting proposals. The purpose of oral presentations was to permit the vendors to present their proposals and to respond to questions from the evaluation committee. The first thirty minutes of each one-hour presentation were reserved for the vendor presentation; the second thirty minutes were reserved for questions from the evaluation panel to vendor representatives. Vendors were not invited to and did not attend the oral presentations of other vendors. For reasons discussed herein, ITC's proposal was deemed non-responsive and was not evaluated. After completion of oral presentations, the evaluation panel independently reviewed and scored the proposals (other than ITC's) and submitted the scores to the Department's purchasing office. The purchasing office opened and scored the vendors cost proposals, then calculated the vendors' total scores. Of the proposals which were evaluated, ASI's received the highest total score of 134.5 points. The second highest score, 115 points, was received by USF. The Department posted a Notice of Intended Award to ASI on February 23, 1996. On February 23, 1996, ITC contacted the Department purchasing director and requested a copy of the ASI proposal. At that time, ITC was advised that a notice of protest would be due on February 28, 1996. ITC filed a Notice of Protest on February 28, 1996. ITC filed a formal protest on March 8. 1996. Although the State of Florida insurance licensure tests are currently administered by USF, the Department retains ownership of the questions ("test items") used in the examination. Upon the expiration of the contract with USF, all test items are to be returned to the Department. The test items used in Florida insurance exams are developed by employees of the Department with experience in the subject matter being tested. Test items have been revised and updated by USF according to psychometric principles. The Department desires to continue ownership of the "Florida bank" of test items. Section 2.1B of the RFP, "EXAMINATION DEVELOPMENT," states: The Department currently retains ownership of all test items in use for existing exams. The Department shall maintain exclusive owner- ship of the items developed, item bank(s), examinations, and all related materials deve- loped for use in fulfilling the requirements of this RFP. The Contractor will be respons- ible for continued development and maintenance of an item bank for use in preparing the examinations.... Section 2.2 of the RFP, "Related Requirements and Information," states: Use of any test items owned by the Department or developed to fulfill obligations resulting from a contract entered into as a result of this RFP for any purpose other than those covered by said contract is prohibited with- out advance written authorization by the De- partment. Any violation of this provision will result in immediate cancellation of the contract and/or legal actions against the contractor. Vendors were allowed to submit questions and requests for clarification by January 15, 1996. At the preproposal conference, an addendum to the RFP was issued which included the Department's responses to vendor requests for clarification. All potential vendors received the addendum. As did other vendors, ITC submitted question and requests for clarification. ITC question Number 8 states: The Department claims ownership of all existing test questions and requires owner- ship of all items, examinations, and related materials used in the Florida tests. This requirement precludes the use of previously developed, calibrated, and validated banks of items owned by the major providers of insur- ance license examinations. It thus requires the development and maintenance of a completely separate bank of test questions for Florida. This can be done only at considerable expense, which must be reflected in the test fees. Is it truly the Department position that all questions used in Florida insurance tests will be or become the property of the Depart- ment? Is this a negotiable item? The Department's response to ITC's question Number 8 states: The desire of the Department to retain owner- ship of its test items does not preclude the use of previously developed, calibrated and validated banks of items. Subject to the approval of the Department, the selected vendor may use test items it has already de- veloped as long as the subject/line of auth- ority listings for Florida are adhered to and are in accordance with Florida law and administrative rules. It is the Department's position that all items currently owned by the Department or developed for the Department in fulfillment of services requested through this RFP, re- main the property of the Department. This is not a negotiable item. ITC question Number 22 states: Will the Department grant the contractor the right to use test items owned by the Depart- ment in other states where it has testing contracts. If so, what guarantees will the Department offer that the Department will treat these questions as confidential material in the future, when they are used in other states. The Department's response to ITC's question Number 22 states: Yes, the Department will grant the vendor authority to use test items owned by the Department in other states where it has testing contracts. However, some agreement would have to be reached regarding the vendor's liability and responsibility should any test item become compromised as a result of such use. The question relating to the Department offering a guarantee that it will treat such questions as confidential when they are in use in other states is not understood. Obviously, the Department would not want to compromise its own test items. By February 12, 1996, the deadline for submission of proposals, five vendors had submitted responses to the RFP, including ITC, ASI and USF. On the question of test item creation, ITC's proposal states: Generally, we provide the entire bank of questions that are used in the tests of a state we serve. Florida is unusual in providing a bank of questions to start with. Our approach to questions for the Florida tests will follow three tracks. First, we will use the questions in the current Florida tests. Second, we will identify those ques- tions in our own bank that are appropriate for use in Florida. Third, we will write additional questions where shortages are identified in the banks, or to cover add- itional topics in the study manuals. ITC's proposal further states, "ITC staff will write and develop all of the new test questions. We will not rely upon Department staff or the Florida insurance industry...to write any of the new questions required for your tests." On the question of test item ownership, ITC's proposal states: Since you currently own a bank of test ques- tions, we understand that you will want to own a bank of test questions when a contract you may establish with us comes to an end. We currently own our bank of questions and would not want to relinquish ownership to that bank as a result of contracting with Florida. Therefore, our proposal is to divide the bank ownership according to four criteria: (1) Ownership of questions in the original Florida bank will remain with Florida; (2) ownership of questions in ITC's bank as of contracting will remain with ITC; (3) owner- ship of ITC-developed questions that are Florida specific and not applicable to other states will be assigned to Florida; (4) ownership of ITC-developed questions that are applicable to other states will remain with ITC. Florida questions that are materially revised by ITC will be considered ITC questions. During the ITC oral presentation, the evaluation panel sought clarification of ITC's position on test item ownership. ITC indicated that its position was as set forth in the proposal. The issue of test item ownership was the central question discussed at ITC's oral presentation. Essentially, the ITC proposal provides that at the close of any potential contract period, the Department will own the questions it currently owns and only those ITC-developed questions that are specific to Florida and to no other state. Further, under the proposal, ITC would be able to "materially revise" any question in the current Florida test item bank and claim ownership of the revised question. Neither ITC's proposal nor its oral presentation provided reliable information as to what would constitute a "material revision" of a test item. After the oral presentations were concluded, the evaluation panel and Department purchasing personnel determined that the ITC proposal did not comply with RFP's requirement related to test item ownership. The ITC proposal was disqualified and was not evaluated by the panel. The evidence fails to establish that the Department acted improperly in disqualifying the ITC proposal. The evidence establishes that the ITC proposal fails to meet the requirements of the RFP relating to ownership of test items, and was properly disqualified from further evaluation. As set forth in the RFP, the Department requires "exclusive ownership of the items developed, item bank(s), examinations, and all related materials developed for use" in providing examination and licensure services to the Department. RFP Addendum Number 1 clearly states "the Department's position that all items currently owned by the Department or developed for the Department in fulfillment of services requested through this RFP, remain the property of the Department" and further states that the item is not negotiable. The purpose of the Department's insistence on ownership of test items is to assure that, at the conclusion of the contract period, the Department will own the questions which have been prepared by the successful vendor for use in Florida exams. ITC's proposal fails to provide the Department with test item ownership as specifically required by the RFP and addendum. ITC asserts that on the question of test item ownership, its proposal is essentially the same as the proposal submitted by ASI. The evidence fails to support the assertion. ASI's proposal states: ASI acknowledges that the Department currently owns all examination items in use for existing exams. Furthermore, the Depart- ment will also retain ownership of all items developed for use in Florida examinations. Unlike the ITC proposal, the ASI proposal clearly states that the Department will own all items developed for use on the Florida exam. Items developed for the Florida exam will be owned by the Department, whether or not the items are applicable to other states. ITC asserts that the inclusion of cost information within the body of the RFP warrants disqualification of the ASI proposal. The evidence fails to support the assertion. Each vendor was evaluated on compliance with Florida Certified Minority Business Enterprise (CMBE) contracting goals. Evaluation points were awarded if a vendor established that CMBE firms would receive at least 10 percent of the contract award. Section 2.4 of the RFP, "Proposal Form and Content," provides instructions on how to structure a vendor proposal and states: ...ATTENTION IS CALLED TO SECTION 1.8. ANY REFERENCE TO COST IN PARAGRAPHS (A) THROUGH (G) BELOW MAY DISQUALIFY THAT PROPOSAL. Paragraphs (A) through (G) include items related to technical portions of vendor proposals. Section 1.8 addresses copies of proposals and states, "[c]ost proposals must be labelled as such and be submitted in a separate envelope." ASI's proposal included the following statement: ...ASI has signed a Letter of Agreement with Stallion Properties Management of Tallahassee to provide certain real estate and property management services specifically related to the Department's RFP and this Proposal. In total, it is estimated that ASI's Letter of Agreement with Stallion Properties Management will provide a total income of approximately $600,000.00 to Stallion over the term of ASI's three year contract with the Department. This project income to Stallion represents ten percent of the total projected income that ASI will earn should we be awarded the Department's contract. The requirement for submission of sealed cost proposals is intended to assure that the technical review of proposals is not influenced by cost factors. Other than to note compliance with the CMBE goal, the members of the evaluation panel did not extrapolate the ASI disclosure to determine the total ASI cost proposal. There is no evidence that the ASI disclosure affected the panel's evaluation of the proposal. Had the ASI technical proposal included its total cost proposal, evaluation panel members would have referred the issue to the Department's purchasing office. Apparently because the panel members did not note the inclusion of the CMBE total and did not extrapolate cost information based on the CMBE disclosure, the members did not refer the matter to purchasing. Because no other vendor included cost information within the technical portion of the proposals, there was no comparative cost information available for evaluation until the cost proposals were opened by Department purchasing personnel. Cost proposals were reviewed after the evaluation of technical factors was completed. ITC asserts that ASI's proposal modification after the proposals had been opened and during the oral presentation warrants rejection of ASI's proposal. The evidence fails to support the assertion. Section 2.1L of the RFP, "COLLECTION AND REMITTANCE OF FEES," states: The Department requires the collection of certain fees from applicants for services related to the licensure and examination process. It is intended that the Contractor collect these fees, as necessary and appropri- ate, and remit these fees daily (exclusive of weekends and State of Florida holidays) in a manner acceptable to the Department. It is intended that the Contractor retain its fee for services as provided for in the contract and remit the balance to the Department as appropriate. The Department is currently not prepared to accept electronic funds transfers in this area, however, it is interested in proposals which could accommodate such tran- sactions during the contract period. The Department contemplates technological enhance- ments in the Receipt's database within the contract period, however it is unable to specify the details of such at this time. Contractor must be able to accommodate such technological changes and enhancements. If any invoices are required to be submitted by the contractor to the Department, they must be submitted in a manner acceptable to the Department and in detail sufficient for a pre- audit and postaudit thereof. The Contractor shall have a system which maintains certain data, as specified by the Department, related to its activities in this area. The Department had indicated that a vendor could collect the total fee, deduct the vendor service charge, and remit the balance of the fee to the Department. Prior to the preproposal conference, ITC submitted a question (Number 21) seeking information on how fees were to be conveyed to the Department. In Addendum Number 1, the Department indicated that a response to the question would be provided in a second addendum to be issued after the preproposal conference. In the second addendum, the Department's response to ITC's question Number 21 states: The Department intends for the vendor to receive, on behalf of the Department, certain fees currently paid by licensure applicants and/or exam candidates. These fees may be paid by personal check, certified check or money order. Cash cannot be accepted. All checks or money orders must be made payable to the Florida Department of Insurance and must be deposited by the vendor into a state concentration account (with Barnett Bank) or a clearing fund in the name of the Department. The Department will assist in establishing these accounts. The Department will require a daily accounting of all monies collected and/or deposited. This information must be in the format prescribed by the Department. This information must be transmitted via an automated system compatible with the Department's existing information systems in this area. The vendor will be required to submit in- voices to the Department for services rendered on a monthly basis. Such invoices must be in sufficient detail for pre-audit and post-audit purposes and be in a format prescribed by the Department. The Department's response in addendum Number 2 specifically noted that the Department's position had changed. ASI's proposal states: Fees will be collected on the day of examina- tion and/or license issuance. This method will eliminate late payment processing. We will collect examination fees payable to ASI. This will minimize reconciliation tasks for the Department, and will allow accounting efforts to focus on those fees collected on behalf of the Department. Application re- venues will be shared with the vendor, based on prices stipulated in the price proposal and associated processing volumes. Appli- cation and fingerprinting fees will be collected via checks made payable to the Department. ASI will provide a reconcilia- tion of these fees, and daily deposits will be made to the Department's account. ASI will invoice the Department for its applica- tion screening services on a monthly basis. ASI's proposal further states: As part of the standard project planning process, [ASI will work side-by-side with the Department to identify specific requirements to be included in the implementation plan, including fee collection procedures], de- tailed invoice requirements, and the most appropriate method to transmit detailed tran- saction information to the Department.... [emphasis supplied] The proposed fee collection process suggested by ASI is inconsistent with applicable Florida law and does not follow the procedure set out by the Department in Addendum Number 2. Section 2.4 of the RFP, "Proposal Form and Content," subsection (C) "Work Plan" states: Describe in narrative form your plan for accom- plishing the work described....Modifications of requirements of this RFP are permitted, however, reasons for changes should be fully explained and justified. " At the oral presentation, and prior to evaluation of the proposals, the evaluation panel advised ASI that the fee collection proposal was not legally appropriate. ASI representatives indicated that they were attempting to provide an improved fee reconciliation process and were not aware that Florida law prohibited their fee collection plan. ASI utilizes the two-check fee payment system in some of the states where ASI administers licensing exams. At the oral presentation, ASI representatives assured that, as specifically stated in the proposal, ASI was committed to working with the Department "...to identify specific requirements to be included in the implementation plan, including fee collection procedures...." ASI representatives stated that the fee collection procedure desired by the Department would be accomplished within the costs set forth in the proposal. Although ASI's fee collection procedure does not follow the method suggested in the RFP, such does not warrant rejection of the ASI proposal. As stated in the RFP, ASI's modification of the RFP requirement was permitted where the reasons for changes were fully explained and justified. ITC implies that ASI can't provide the services offered in the ASI proposal within the fee and cost structure set forth in the response to the RFP. There is no credible evidence supporting the implication.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Department of Insurance enter a Final Order DISMISSING the case and awarding the contract to Assessment Systems, Incorporated. DONE and ENTERED this 21st day of May, 1996 in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of May, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 96-1330BID To comply with the requirements of Section 120.59(2), Florida Statutes, the following constitute rulings on proposed findings of facts submitted by the parties. Petitioner The Petitioner's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 6. Rejected, not supported by the weight of the evidence. Rejected, subordinate. Rejected, not supported by the weight of the evidence. Rejected, comment on testimony is not finding of fact. Rejected, unnecessary. The ITC proposal is not responsive to the Department's requirement of test item ownership. 12-13. Rejected, contrary to the weight of the evidence. Rejected, immaterial. Rejected, subordinate. Rejected, not supported by the weight of the evidence. 22. Rejected, subordinate. 23-24. Rejected, unnecessary. Rejected, subordinate. Rejected, unnecessary. Rejected, not supported by the weight of the evidence. Respondent The Respondent's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 2. Rejected, subordinate. 3-5. Rejected, unnecessary. 7-8. Rejected, unnecessary. 14. Rejected, irrelevant. 20-23. Rejected, unnecessary. 34-37. Rejected, cumulative. 48-59. Rejected, cumulative. 61-62. Rejected, irrelevant. 63-69. Rejected, cumulative. Rejected, unnecessary. Rejected, cumulative. 83. Rejected, cumulative. 96. Rejected, unnecessary. Intervenor ASI Intervenor ASI's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: Rejected, unnecessary. Intervenor USF Intervenor USF's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 20-21. Rejected, unnecessary. Rejected, subordinate. Rejected, subordinate. Rejected, unnecessary. Rejected as to use of phrase "final offer;" the ASI RFP specifically committed to working with the Department on fee collection procedures. Rejected, unnecessary. 45. Rejected, subordinate. 50. Rejected, unnecessary. COPIES FURNISHED: Bill Nelson State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Dan Sumner, General Counsel Department of Insurance The Capitol, PL-11 Tallahassee, Florida 32399-0300 Carl D. Motes, Esquire Maguire, Voorhis and Wells, P.A. 2804 Remington Green Circle, Suite 4 Tallahassee, Florida 32317-2429 Frank Fernandez, Esquire Thomas Valentine, Esquire Department of Insurance Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0333 William B. Graham, Esquire Richard N. Sox, Jr., Esquire Bateman and Graham, P.A. 300 East Park Avenue Tallahassee, Florida 32301 Regina L. DeIulio, Esquire Office of the General Counsel University of South Florida 4202 East Fowler Avenue, ADM 250 Tampa, Florida 33620-6250
Findings Of Fact On December 24, 1986, respondent, Department of Transportation (DOT), gave notice to qualified and interested contracting firms that it was accepting bids from firms interested in providing construction and maintenance services on State Job No. 08150-3412. Such bids were due on or before January 21, 1987. The job description read as follows: At State Bridge Nos. 080025 and 000026 over the Withlacoochee River North of Tampa. Work consists of Furnish and Install Integral Pile Jackets (port. cement grout filled); Remove and Replace Sections of Bridge Deck; Floating Turbidity Barrier; and Incidental Items. Length 0.066 Mile. (B.I. 1144013) Stated in plainer language, the project called for repairs to two bridges on I-75 which span the Withlacoochee River southwest of Ocala in Hernando County. The bidders were also provided with a copy of the specifications and bid form dated November 4, 1986 regarding the contract. In response to this offer, petitioner, CSA Marine Services, Inc. (CSAMS), a contractor with offices at 759 Parkway Street, Jupiter, Florida, filed a bid proposal by the established deadline. Its bid totalled $123,347.59. Also filing a bid proposal was Seig and Ambachtsheer, Inc. (SAI), a contractor in Orange City, Florida. Its bid price was $137,209.50. The bid form itself was prepared by DOT and merely required the contractor to fill in the blanks where appropriate. The first two columns were labeled "item number" and "approximate quantities" and were already completed by DOT. For those items having a quantity of only one, the words "lump sum were written in the second column. Where quantities exceeded one, they were expressed in such terms as linear feet, cubic yards and pounds together with the approximate numerical quantities. The third column was labeled "item description and unit or lump price (written in words)." The fourth column read "unit price (in figures)" and required the bidder to indicate the unit price of each line item in figures. The fifth or final column was labeled "amounts" and required the bidder to reflect the lump sum price of each line item in figures. Columns three through five were filled in by CSAMS where necessary. The total price of the bid was to be listed on a bid blank which was attached to the bid form. On its face, the third column on the form offered petitioner the option of either using a unit or lump sum price. In addition, section 2-5.1 of the Standard Specifications for Road and Bridge Construction, 1986 Edition, which governs the awarding of contracts and has been incorporated as a part of the bid documents, provides as follows: Proposals shall be submitted on the form described in 2-2. Unit or lump sum prices for all bid items shall be shown in words and figures, and all extensions shall be carried out. Notwithstanding the form and instructions, according to a DOT representative, a lump sum price may be used only when the quantity in column two is one item. If more than one item is reflected in column two, then DOT expects a contractor to use the unit price. However, there is no written rule, instruction or provision in the specifications that sets forth this requirement. CSAMS properly opted to use lump sum price under column three on at least two line items even though the quantities exceeded one. Of particular interest was line item 8400-3-4 which, according to column two, required 20.800 cubic yards of concrete for a "superstructure." Relying upon the optional language on the form, petitioner wrote the words seven thousand, one hundred, fifty five dollars and 00/100 cents" in column three (which was a lump sum price), and a unit price of $344.00 in column four. It then used the figure of $7,155 in the final column of that item, which is the approximate sum of $344 times the quantity (20.800). Because of the volume of bid lettings each month, DOT uses a computer to total the numbers in each line item for each bid. If the amount in column five does not agree with the figures in columns three and four, the computer flags the item, and a manual review of the line item is made. While reviewing line item 8400-3-4 of petitioner's bid form, the computer found the numbers did not agree. More specifically, when 20.800 in column two was multiplied times $344.00 in column four, it equalled $7,155.20 and not $7,155.00 as reflected in column five of petitioner's bid form. This twenty-cent disagreement arose because petitioner had rounded off the unit price from $343.99038 to $344.00 in column four. The disagreement prompted a manual review of petitioner's bid form and a recalculation of the line item. On January 30, 1987 DOT bureau chief J. Ted Barefield prepared a letter to CSAMS styled "Notice of Switch in Apparent Low Bidder" indicating in part: Due to mathematical error(s) on the bid of CSA Marine Services, Inc. and Continental Shelf Associates, Inc., the apparent low bidder, whose bid amount was $123,347.59 is now $265,016.59. Therefore, the apparent low bidder is Seig & Ambachtsheer, Inc. The change in amount was the result of DOT increasing the unit price in column four from $344 to $7,155 (to agree with column three) and multiplying the quantity (20.800) times the sum specified in words in column three ($7,155) to arrive at a total in column five of $148,824. This caused an increase of $141,669 over the original bid price. In making the above change, DOT relied on Section 3-1 of the 1986 Edition of the Standard Specifications for Road and Bridge Construction. Section 3-1 provides in relevant part as follows: In the event of any discrepancy in the three entries for the price for 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. (Emphasis added) Here, because of the twenty-cent discrepancy in the entries for line item 8400-3-4, DOT used the "unit price as shown in words" in column three to recalculate the item since the extension ($7,155.00) and the unit price shown in figures ($344.00)" did not agree. In doing so, DOT did not first evaluate the price written in words to see if it was a lump sum or unit price. After receiving the above letter, CSAMS and DOT representatives met in early February 1987 to discuss the CSAMS proposal. It was represented to CSAMS that it should have used a unit price in words in column three rather than a lump sum price. Petitioner was also provided with a copy of a letter previously sent to it on September 6, 1985 by DOT which noted the following irregularity on a bid: "Unit prices as written in words and figures do not agree (Item 8457- 70)." However, the letter did not contain explicit advice as to DOT's unwritten policy. On February 5, 1987 Barefield wrote a second letter to CSAMS indicating that there were several discrepancies in its bid proposal. These included: (a) the name on the cover sheet (CSAMS and Continental Shelf Associates, Inc.) did not agree with the name (CSAMS) in other parts of the bid, (b) unit prices as written in words and figures did not agree, (c) an incomplete affidavit was filed, and (d) an incorrect MBE Certification and incomplete Utilization Sheets were submitted. The latter two errors were related to the discrepancy in the names. However, the letter stated that "no further action is requested by you at this time," and that the letter was to serve as a reminder that in the future the irregularities could cause petitioner's bid to be rejected. Petitioner's bid was accepted as being appropriate but with the substantially higher bid price of $265,016.59. The error made by CSAMS is a common one. Indeed, it was stated the same mistake is made by contractors on "several bids during each letting." Even so, DOT has not considered providing some special instruction or rule to clarify this matter.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that petitioner be awarded the contract on State Job No. 08150- 3412. DONE AND ORDERED this 22nd day of April, 1987, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of April, 1987.
The Issue The issue in this case is whether the bid specifications, together with other applicable authority, require that a bid, in order to be responsive, contain any written list of subcontractors.
Findings Of Fact On September 26, 1989, Respondent issued a document entitled, Specifications for Replacement of Air Conditioning, West Orange High School, Winter Garden, Florida, Engineers Project No. 89-016. As amended by three addenda, the above-described specifications shall be referred to as the "ITB." Respondent duly advertised for bids ore September 26, October 3, and October 10, 1989. The advertisement did not state that Respondent reserved the right to waive minor irregularities. In response to the ITB, Florida Mechanical, Inc. ("FMI") and B & I Contractors, Inc. ("B & I") timely submitted bids. For the base work and alternate 1, which Respondent ultimately decided to select, FMI bid $1,439,000, B & I bid $1,438,000, and a third bidder, S. I. Goldman, Company bid $1,621,000. These bids are recorded on a Bid Tabulation Sheet prepared by the engineer retained by Respondent for the project. The Bid Tabulation Sheet contains eight columns. Four columns record bid amounts for the base work and various alternates. The remaining columns are entitled, "Bidder," "Bid Bond," "Addenda," and "Subs." Each of the three bidders were named in one of the rows beneath the "Bidder," column. Each bidder had one "X" in its "Bid Bond" column and three "X"s in its "Addenda" column. However, only FMI and S. I. Goldman Company had "X"'s in their "Subs" columns. By resolution adopted on November 29, 1989, Respondent directed that all bids were rejected and that the Superintendent would correct any ambiguities and uncertainties in the ITB and solicit new bids. The resolution noted that Respondents staff had recommended that, if any bid were accepted, it should be that of B & I. However, [FMI] submitted with its bid a list of Major Sub-contractors of the form displayed in the [ITB], and B & I did not submit wish its aid a list of Major Sub-contractors[.] The resolution concluded that Respondent based on advice of staff and counsel, found that the [ITB is) ambiguous and/or uncertain as to whether or not a bidder must submit along with his bid a list of Major Sub-contractors, (b) that because of such ambiguity and/or uncertainty, it would be unfair and/or improper for [Respondent] to accept either of the bids received by it, and (c) that as a result thereof [Respondent] should reject all bids received by it for ,the Project and should solicit new bids for the Project as soon as is reasonably feasible after correction by [Respondents] staff of any ambiguity and uncertainty as aforesaid in the [ITB]. FMI and B & I each timely filed a notice of intent to protest and formal written protest of Respondent's decision to reject each company's respective bid. S. I. Goldman did not protest the decision and is not a party to the subject case. At a meeting on December 12, 1989, Respondent elected to refer the bid protests to the Division of Administrative Hearings for a formal hearing., At the beginning of the hearing, the parties filed a written stipulation, which stated that the only issue for determination was which Petitioner should be awarded the contract and not whether Respondent should seek further bids or award the contract to another bidder. The stipulation also stated that the Petitioners and Respondent agreed to abide by the recommendation of the hearing officer. At the hearing, the parties further stipulated that the sole issue for determination is whether the ITB, together with other applicable authority, required that the responsive bid contain any written list of subcontractors. In addition, the parties stipulated that both Petitioners had standing and the protests were timely and sufficient. The ITB requires that each bidder familiarize itself with all federal, state, and "Local Laws, ordinances, rules, and regulations that in any manner affect the work." Under the section entitled, "Preparation and Submission of Bids," the ITB states: "Each bidder shall use the Bid Form that is inserted herein, and may copy or reproduce the form on this own letterhead." Among other requirements, the ITB requires two bonds. The first is a "bid guarantee" of at, least five percent of the amount of the bid. The form of this guarantee may be cash or a Bid Bond." The other bond described in the ITB a 100% public construction bond. The surety on this bond must have been admitted to do business in Florida, must have been in business and have a record of successful continuous operation for at least five years, and must have at least a Bests Financial Rating of "Class VI" and a Bests Policyholder Ration of "A." The Bid Form contained in the ITB is two pages. Among other things, the Bid Form requires that the bidder receiving written notice of acceptance of its bid must provide the prescribed payment and performance bond and execute the contract within ten days after notification. The next document in the ITB is a single page entitled, "Form of Bid Bond." The provisions on this page identify the A.I.A. document to use and state that the Bid Bond "shall be submitted with the Bid Proposal Form." The next document in the ITB is a single page entitled, "List of Major Subcontractors." The List of Major Subcontractors states: Bidders shall list all major subcontractors that will be used if a contract is awarded. Additionally, bidders shall identify in the appropriate box whether or not that trade specialty is minority owned. Another paragraph defines minority ownership. The remainder of the form consists of ten rows for the "bidder" and nine major subcontractors, such as concrete, electrical, HVAC, and controls, and blanks where the bidder can indicate which of these entities are minority owned. The next document in the ITB is the Owner-Contractor Agreement, which is followed by tie Form of Construction Bond, General Conditions, and Supplementary General Conditions. Section 7.11 of the Supplementary General Conditions establishes certain requirements to be performed after the submission of bids. This section provides: Pre-Award Submittals: Before the Contract is awarded the apparent low bidder shall provide the following information to the owner. A copy of the Contractors current State of Florida General Contractor's or Mechanical Contractors License. Pre-Construction Meeting. After the Notice to Proceed and within eight (8) business days of the Owner [sic], the Contractor shall meet with the Owner, Engineer and Subcontractors that the Owner may designate... The Contractor shall provide the following to the Owner. * * * 2. A written list of all Subcontractors, material men and suppliers with such information as requested by the Owner or Engineer. * * * The remaining documents in the ITB are the technical specifications for the job. The three addenda supply additional technical information not relevant to this case. Respondent has promulgated rules with respect to the bidding process ("Rules"). The ITB does not refer to the Rules, which define and use many terms that are found in the ITB. For instance, Rule 1.1.25 defines the phrases, "Performance and Payment Bond," which is the same phrase used in the Bid Form in the ITB. The Rules define several other capitalized terms that are also used in the ITB, such as Bid Bond, Bid Guarantee, Bidder, and Contractor. Rule 4.1 similarly states that the bidder is familiar with federal, state, and "Local Laws, Ordinances, Rules and Regulations that in any manner affect the Work." Rule 6.1 describes the process by which a bidder is to prepare and submit bids and the Bid Guarantee in language similar to that contained in the ITB. Rule 6.2 discusses the listing of subcontractors. Rules 6.2.1 and 6.2.2 state: General Contractor shall include as an integral part of his bid a List of Subcontractors he proposes to use. The Bidder shall enclose this list in a 4" x 9" envelope, sealed and marked "List of Subcontractors" and identified ... The Bidder shall enclose said envelope with his bid proposal in the mailing envelope. The List of Subcontractors enclosed with tee Proposal of each Bidder will be examined by the ... Engineer before the Proposal is opened and read. In the event that the form is not properly executed and signed, the Proposal of that Bidder will be returned to him unopened... Rule 6.3 requires a Statement of Surety as another "integral part" of each bid. Rule 6.3.3 states: The Statement of Surety will be opened examined by the ... Engineer prior to the opening of the Proposal.... Although similar to Rule 6.2, Rule 6.3 lacks the warming that if the Statement of Surety is not "properly executed and signed, the Proposal of that Bidder will be returned to him unopened." Rule 19.1 sets forth the requirements, for the surety. These requirements are different than those set forth in the ITB. Rules 19.1.1 and 19.1.2 require, as does the ITB, that the surety be admitted to do business in the State of Florida and shall have been in business and have a record of successful continuous operations for at least five years. However, Rule 19.1.1 requires that the surety be represented by a reputable and responsible surety bond agency licensed to do, business in the State of Florida and have a local representative in the Orlando area. Rule 19.1.3 requires minimum Bests ratings of "A" in "management," and, as to "strength and surplus," "AAA+" in financial rating and $12,500,000 minimum surplus. Rule 19.1.3.3 also requires that the surety be listed on the U.S. Treasury Departments Circular 570. The bids of FMI and S. I. Goldman Company contained a completed List of Major Subcontractors. The bid of B & I did not. No bidder included a Statement of Surety with its bid.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the School Board of Orange County enter a Final Order awarding the subject contract to Florida Mechanical, Inc. ENTERED this 15th day of February, 1990, in Tallahassee, Florida. ROBERT E. MEALE 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 15th day of February, 1990. APPENDIX Treatment Accorded Proposed Findings of FMI All of FMI's proposed findings have been adopted or adopted in substance. Treatment Accorded Proposed Findings of B & I 1-4: adopted or adopted in substance. 5: adopted, except that the staff recommended that, if the bid was to be awarded, that it be awarded to B & I. 6: adopted in substance. 7: rejected as conclusion of law and, to the extent fact, subordinate. 8-12: rejected as subordinate. 13-16: adopted or adopted in substance. 17: rejected as subordinate. 18: rejected as unsupported by the greater height of the evidence. 19-21: rejected as subordinate. 22: rejected as beyond the scope of the issues and irrelevant in view of the stipulation. In the stipulation, the parties agreed that the issue to be addressed would not be whether the intended agency action of Respondent was lawful (i.e., not arbitrary, fraudulent, dishonest, or otherwise improper), but rather whether the ITB, together with other applicable authority, required that the responsive bid contain any written list of subcontractors. COPIES FURNISHED: James L. Schott, Superintendent The School Board of Orange County, Florida P.O. Box 271 Orlando, FL 32802 Charles Robinson Fawsett, P. A. Shutts & Bowen 20 North Orange Avenue Suite 1000 Orlando, FL 32801 James F. Butler, III Smith, Currie & Hancock 2600 Peachtree Center Harris Tower 233 Peachtree Street, N.E. Atlanta, GA 30043-6601 William M. Rowland, Jr., Esq. Rowland, Thomas & Jacobs, P.A. 1786 North Mills Avenue P.O. Box 305 Orlando, FL 32803
The Issue The issue in this case is whether Respondent’s proposed contract award for the Medicaid Third Party Liability Program, AHCA ITN 0805, is contrary to Respondent’s governing statutes, Respondent’s rules or policies, or the solicitation specifications.
Findings Of Fact AHCA is the state agency responsible for administering the Medicaid Program in Florida. Medicaid is the state and federal partnership that provides health coverage for selected categories of people with low incomes. AHCA’s Division of Medicaid, TPL Unit, is responsible for identifying and recovering funds for claims paid by Medicaid for which a third party is liable. The TPL Program is intended to implement the federal mandate that Medicaid be the payor of last resort. In this regard, as the state agency responsible for administering the federal Medicaid program, AHCA must take all reasonable measures before paying for medical services to ascertain whether a third party is liable for such services and should pay instead of Medicaid. In cases where a liable third party is not found until after Medicaid has already paid, AHCA is required to seek reimbursement from the third party for the costs paid by Medicaid. The TPL vendor is responsible for identifying potential third-party payors and recouping from them the costs that have been paid by Medicaid. Third parties include private insurance carriers, the Medicare program, estates, liability insurers, third-party administrators, pharmacy benefits managers, and any other individual, entity, or program that “may be, could be, should be, or has been liable for all or part of the cost of medical services related to any medical assistance covered by Medicaid.” § 409.901(26), Fla. Stat. (2007).1 AHCA’s TPL functions are outsourced, and HMS is the incumbent vendor. On January 22, 2008, AHCA issued an invitation to negotiate (ITN) for the purpose of selecting a vendor to provide TPL program services. The scope of the services consists of eight components: (a) casualty recovery, (b) estate recovery, (3) trust and annuity recovery, (4) Medicare and other third- party payor recovery, (5) cost avoidance, (6) Medicaid Reform Opt Out Program, (7) Health Insurance Premium Payment Program, and (8) other recovery programs. The selected vendor would be paid a combination contingency fee and fixed fee based on rates offered by the vendor. The ITN established a two-step process for selecting a vendor with which to contract: the evaluation phase and the negotiation phase. In the evaluation phase, each vendor was required to submit a reply to the ITN containing its technical proposal and price proposal for the services identified in the ITN. A total of 980 points was available in a variety of categories. The vendor responses were to be evaluated and scored based on detailed criteria set forth in the ITN. The ITN includes the following statement: Each evaluator will calculate a total score for each response. The Issuing Officer will use the total point scores to rank the responses by evaluator (response with the highest number of points = 1, second highest = 2, etc.). The Chairman will then calculate an average rank for each response for evaluators. The Agency will negotiate with the three highest ranked vendors. The purpose of the scoring was to determine which vendors would participate in the negotiations. The scoring did not determine which vendor would be awarded the contract. The award of the contract would be based on the vendors’ presentations during the negotiation phase. The ITN did not set forth evaluation criteria that would be used in the negotiation phase. The criteria in Attachment E of the ITN pertained to the criteria that would be used to determine the responsive and responsible vendors with whom AHCA would negotiate, and, to that extent, the criteria in Attachment E were relevant to the negotiation phase of the procurement process. No vendor objected to the specifications contained in the ITN. The ITN provided a deadline for the vendors to submit questions regarding the ITN and stated: The Agency will receive all questions pertaining to this solicitation no later than the date and time specified for written inquiries in Section C.6, Solicitation Timeline. All inquiries must be made in writing to the Issuing Officer identified in Section C.5. Questions may be sent by US Mail, email, fax or hand delivered. (Email is preferred and encouraged.) No telephone calls will be accepted. No questions, written or otherwise, will be accepted except as indicated in Section C.6, Solicitation Timeline. The Agency’s response to questions received will be posted as an addendum to this solicitation as specified in Section C.6, Solicitation Timeline. (Emphasis in original) The timeline contained in the ITN set February 4, 2008, as the deadline for receipt of written inquiries from the vendors. The ITN set March 6, 2008, as the deadline for receiving responses to the ITN from the vendors. On February 12, 2008, a vendors’ conference was held to allow the vendors to ask questions concerning the ITN. Representatives from ACS, MAXIMUS, and HMS attended the conference. During the vendors’ conference, AHCA personnel stated that if the vendors had additional inquiries concerning the ITN that the inquiries should be directed to the procurement office. The ITN provided that AHCA would accept oral questions during the vendors’ conference and that AHCA would “make a reasonable effort to provide answers to oral questions” at the vendors’ conference. The ITN also provided: “[O]ral answers and discussions are not binding on the agency. Only those communications, which are in writing from the Agency, may be considered as duly authorized expressions on behalf of the State.” The ITN solicitation timeline indicated that the anticipated date for AHCA’s responses to the vendors’ written inquiries would be February 22, 2008. On February 13, 2008, Jeannine Zibilich from ACS sent an e-mail to Cathy McEachron with the following inquiry: Given the significant number of questions asked and the anticipated date for the responses, ACS respectfully requests that the proposal due date for ITN 0805, Florida Medicaid Third Party Liability Program, be extended to March 28, 2007 [sic]. We thank you for your prompt consideration of this request and look forward to an answer at your earliest convenience. Ms. McEachron forwarded the e-mail to Jennifer Barrett who is the AHCA administrator within the Division of Medicaid, TPL unit. Ms. McEachron and Ms. Barrett agreed that the March 28 date was too much of an extension, but agreed that the deadline for submitting the responses to the ITN could be extended to March 14, 2008. On February 14, 2008, AHCA provided written responses to the inquiries made by the vendors. The written responses were published as part of Addendum No. 1 of the ITN. The verbal directive allowing additional inquiries after February 4, 2008, which changed the timeline in the original ITN, was not published as an addendum to the ITN.2 Addendum No. 1 also changed the deadline for submitting responses to the ITN to March 14, 2008. HMS claims that ACS received a benefit from the extension of the time frame for submitting responses to the ITN and that HMS did not receive a benefit because it did not need additional time to submit a response. The extension of time to submit responses to the ITN benefited all vendors. Each vendor had additional time to prepare and submit a better response to the ITN. On February 26, 2008, Chuck Cliburn from ACS sent e-mails to Ms. McEachron requesting additional information concerning claims paid, the number of members for managed care and fee for service, and the total benefits paid for the current casualty cases. Ms. McEachron forwarded the e-mail to Ms. Barrett with the following notation: Hey. We’ve received one more question on the TPL solicitation. Since it is after the question and answer period, technically, we don’t have to answer it. Keep in mind, however, the more information the vendors have, the better their responses will be. If we have this info readily available, I’d recommend providing it. If you decide to, I will post it to VBS as addendum number 2. Ms. Barrett advised Ms. McEachron that the information was not readily available, but that some information could be accessed on a website, and provided Ms. McEachron the website link. Ms. McEachron issued Addendum No. 2 on March 3, 2008, providing the website link to the vendors. The information requested by ACS was provided to all vendors. HMS claims that it did not have the advantage of being able to ask questions after the ITN deadline. The only question identified by HMS that it would have asked after the deadline was answered at the vendors’ conference. The ITN required that contact with the procurement officer by the vendors was to be done in writing. Ms. McEachron lifted the restriction on written responses by allowing the vendors to make telephone calls with general inquiries such as asking whether their proposals had been received or complaining that the AHCA website was unavailable. The use of telephone calls for general inquiries applied to all vendors. AHCA Deputy Secretary Carlton Dyke Snipes appointed three evaluators to independently score most aspects of the responses. An additional individual was appointed to evaluate financial stability. Another individual was asked to award points for past performance. Points for the cost element of the responses were awarded by the ITN’s issuing officer. Three vendors submitted responses to the ITN: HMS, ACS, and MAXIMUS. AHCA determined that MAXIMUS’ response was not responsive to the ITN. Both ACS and HMS are wholly-owned subsidiaries. The parent company for ACS is Affiliated Computer Services, and the parent company for HMS is HMS Holdings Corp. The ITN provides that the vendors were to submit their most recent financial information with their response. The information could be submitted as either the most recent financial statement or the most recent audit. Both ACS and HMS submitted the annual reports on the Form 10-K for their parent companies. AHCA customarily accepts the financial information for the parent company for evaluation of vendor responses. The Form 10-K submitted by HMS contained a note that provided financial information directly related to HMS. The Form 10-K submitted by ACS did not contain specific financial information about ACS. Affiliated Computer Services is a larger company than HMS Holdings Corp.3 Because Affiliated Computer Services is such a large company, the financial information for ACS would not be reported separately as was the information relating to HMS. Both ACS and HMS were evaluated based on their parent companies' financial capability. ACS received a score of five in the evaluation of the financial information it submitted. A score of five meant that ACS was considered to have excellent financial capabilities. HMS received a score of four on its financial information. A score of four meant that ACS had above average financial capability. The ITN required the vendors to list the subcontractors that they intended to use. If a vendor was going to use a sister corporation as subcontractor, AHCA did not require that the sister corporation be listed and so advised the vendors during the vendors’ conference. ACS Recovery Services, Inc., and ACS Commercial Solutions, Inc., operate within ACS Commercial Solutions Group, which is a line of business of Affiliated Computer Services, Inc. ACS; ACS Commercial Solutions, Inc.; and ACS Recovery Services, Inc., are considered by ACS to be sister corporations, but are separate corporate entities. ACS intends to use its sister corporations to perform many of the services offered in ACS’s reply to the ITN. The reply states that the services will be provided by the sister corporations, but does not list the sister corporations as subcontractors. ACS will not actually enter into a subcontract with its sister corporations. The responses submitted by HMS and ACS were evaluated, and HMS received the highest number of points and, thus, was ranked number one. On March 25, 2008, AHCA sent letters to both ACS and HMS advising them that they had been selected as candidates for negotiations and providing dates that were available for the negotiation sessions. Each letter stated: “The negotiation and selection process will consider each company’s ability to meet or exceed the business, technical, and financial requirements of the Agency.” The ACS negotiation was scheduled for April 7, 2008, and the HMS negotiation was scheduled for April 8, 2008. On April 3, 2008, confirmation letters were sent to ACS and HMS, confirming the scheduled negotiation dates and times. The letters directed each vendor to “plan to provide handout materials for four (4) AHCA team members.” Each letter also included a “list of topics to be discussed.” The topics were based on the information provided in each vendor’s response to the ITN. ACS provided AHCA with copies of their written responses to topics listed in its confirmation letter prior to the commencement of the negotiation session. Ms. Barrett received a copy of the written responses on the morning of the negotiation session with ACS and had time to quickly read the materials prior to the negotiation session. HMS did not provide advance copies of their written responses, and the negotiators received HMS’s materials at the negotiation session. Neither ACS nor HMS was advised, prior to the negotiations, whether it was permissible to provide AHCA with advance copies of the written responses or other handout materials. Ms. Barrett reviewed both vendors’ written responses after the negotiation sessions. Each negotiation session was conducted by Ms. McEachron, the director of AHCA’s Procurement Office and the issuing officer for the ITN. David Suhrweir and Daniel Roy, two of the three evaluators, were also designated as negotiators. Ms. Barrett, the AHCA TPL contract manager, was also a negotiator. Ms. Barrett had been listed as client reference by HMS because Ms. Barrett was the contract manager for the current contract with HMS for TPL services. With the exception of Ms. McEachron, at the time of the negotiations, the negotiators were unaware of the total scores received by HMS and ACS during the evaluation of their responses. Ms. McEachron did not inform the other negotiators of the evaluation scores prior to negotiations to prevent any bias towards the vendors based on the scores they received during the evaluation phase. The negotiation sessions were transcribed by a court reporter. Each negotiation session was scheduled to last for two hours and ACHA’s decision to award a contract was to be based on the information that was provided during the negotiation sessions. At the beginning of each negotiation session, the vendors were informed that any topic was open for discussion during the negotiation. HMS had submitted a lower cost proposal than ACS. Prior to the commencement of the negotiations, Ms. Barrett sent an e-mail to Ms. McEachron inquiring whether price could be negotiated during the negotiation sessions. Ms. McEachron advised Ms. Barrett that price was open for discussion. Ms. Barrett wanted to negotiate price with ACS to see if AHCA could get a lower price. Because HMS had the lower prices, she did not intend to bring up the subject of price with HMS, but felt that HMS was not precluded from negotiating a lower price. During the negotiation with ACS, Ms. Barrett asked ACS whether it would lower its prices and stated: I will ask the all important question . . . In reference to the cost proposal, is there any chance that ACS would be willing to reduce some of their costs they are proposing? . . . It’s mainly in the area of the cost avoidance per policy. And then the opt out, there is a wide difference in the amount that was proposed in costs in those three areas. Ms. McEachron gave ACS until the end of the week to come up with a best and final offer for prices. The end of the week would have been April 11. The negotiators were more impressed with the presentation by ACS than the presentation by HMS. ACS was more organized and well-prepared than HMS. To the negotiators, HMS appeared to be disjointed, flustered, and confused. A 2006 United States Supreme Court decision, Arkansas Dept. of Health and Human Services v. Ahlborn, 547 U.S. 268 (2006), limited Medicaid liens to the medical portion of recoveries in casualty cases, and ACS proposed to address the impact of the decision by taking a proactive approach and work with the attorneys on the cases prior to the cases going to trial or settlement. HMS claims that ACS misrepresented its success in dealing with the Ahlborn decision by stating that ACS had successfully argued the Ahlborn issue in Florida courts. During the negotiations, Melissa Lively, an attorney for ACS, indicated that ACS had success in working with the attorneys for the Medicaid clients by discussing the Ahlborn decision during the early stages of litigation. As a result of ACS’s proactive approach, ACS had been successful in its recoveries. Following each of the negotiation sessions, the negotiators spoke together briefly to share their general impressions and thoughts of the negotiation. Later in the afternoon following the last negotiation, Ms. Barrett, Mr. Roy, and Mr. Suhrweir again met to further discuss their impressions of the two vendors based on the negotiation sessions. The three negotiators jointly and unanimously agreed to recommend to AHCA’s senior management that ACS be awarded the contract. Ms. Barrett drafted a memorandum recommending that the contract be awarded to ACS and, on April 9, 2008, provided the memorandum to Mr. Roy and Mr. Suhrweir for their review and comments. The memorandum listed the following as “items [that] are representative of issues ACS presented to the Agency during the negotiations that provides a justification for this recommendation”: Case Tracking System – The case tracking system for casualty, estate, trusts, and annuities demonstrated by ACS currently has the capability to automatically relate and unrelate claims based upon injuries. This feature will eliminate some of the manual processes in identifying claims that are related to a Medicaid recipient’s accident or incident. The system also automatically generates letters with an electronic signature that go directly to ACS’s mail operations. Ahlborn Supreme Court decision – ACS indicated it will take a proactive approach and become involved with attorneys in the beginning of a case to ensure the Medicaid lien amount is included in the total settlement amount, thus preventing a hearing. ACS advised it would conduct outreach regarding the Ahlborn decision in order to educate attorneys on Medicaid’s rights to recovery. Quality control – ACS proposes using the Report Card process for quality control. ACS has identified a full-time quality staff person as required by the ITN. ACS demonstrated a clear understanding of the importance of quality control in all areas of the contract. Cost Avoidance – ACS has presented an innovative approach to cost avoidance data. Through its Smart TPL and MEVSNET systems, real time cost avoidance is provided thereby potentially increasing cost avoidance and carrier billing collections. Innovation – ACS has presented innovative approaches to increasing recoveries. For example, ACS will review the dates of death of Medicaid recipients and file a Caveat by Creditor in the deceased recipient’s county of residency. The clerk of the Court will then be required to provide a Notice of Summary Administration and ACS would file an estate claim on behalf of the Agency. By e-mail dated April 10, 2008, ACS notified Ms. McEachron that ACS would revise its pricing. In its original pricing ACS’s proposed prices were higher than HMS’s prices in three of the four categories. ACS’s revised prices were higher than HMS’s prices in two of the four categories. The negotiators had made a decision to recommend the contract award to ACS prior to receiving the revised pricing, and the revised pricing was not determinative of the recommendation to award to ACS. The negotiators’ recommendation was presented to management of AHCA’s Division of Medicaid. The deputy secretary for Medicaid considered the recommendation and directed the award of the contract to ACS. On April 28, 2008, AHCA posted a notice listing the scores and rankings for both HMS and ACS. The notice announced the agency’s intent to award the contract to ACS. Prior to the award of a contract, the procurement office maintains a solicitation file, which contains the documents relating to the solicitation process. After the award of a contract, the procurement office will create a contract file, which contains certain information required by Subsection 287.057(3)(b), Florida Statutes. In the instant case, the contract award has not been made, and, therefore, the contract file has not been created.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered dismissing HMS’s formal written protest and awarding the contract to ACS. DONE AND ENTERED this 15th day of August, 2008, in Tallahassee, Leon County, Florida. S SUSAN B. HARRELL 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 15th day of August, 2008.
