Findings Of Fact On August 31, 1994, the Respondent received and opened bids for its Project No. HSMV 92044000, Repairs, Art Sutton Drivers' License Office, Miami, Florida (the Project). The bid specification documents (the Specifications) for the Project included requirements for a Base Bid and for specific alternate proposals with respect to three defined items of alternate work. Section 01100 of the Specifications stated that "[a]ll Alternates described in this Section are required to be reflected on the Bid Form as submitted by the bidder." Part 2 of that section provided: ALTERNATE NO. 1 A. Provide a deductive price to the base bid for the removal of existing window units and the installation of new units as indicated in plans and specification Section 08520. ALTERNATE NO. 2 A. Provide a deductive price to the base bid for the provision of communications conductors see specification Section 16400. ALTERNATE No. 3 A. Provide a deductive price to the base bid for the installation of all landscape materials as indicated on plans and as per specification Section 02960. Also included in the Specifications as Exhibit 4 was a Proposal Form. The Specifications required each bidder to submit this form in triplicate on the bidder's letterhead. With respect to alternates, the Proposal Form required: With the foregoing as a Base Bid, the following costs of alternate proposals are submitted in accordance with the drawings and specifications. Alternate No. 1 Add or Deduct $ Alternate No. 2 Add or Deduct $ Alternate No. 3 Add or Deduct $ The Respondent's architect received four bids on August 31, 1994. As recorded on the Bid Tabulation and Notice of Award Recommendation, three bidders provided specific prices for the three alternates, as well as a Base Bid. The Bid Tabulation shows that two bidders provided specific prices for the three alternates and included the alternate prices in their Base Bids. The Petitioner provided specific prices for the three alternates, but excluded the alternate prices from its Base Bid. The fourth bidder provided a specific price for only one alternate and excluded that alternate price from its Base Bid. (The fourth bidder was disqualified as non-responsive for failing to submit prices on all three alternates.) In pertinent part, the Petitioner's proposal read: With the foregoing as a Base Bid, the following costs of alternate proposals are submitted in accordance with the drawings and specifications: Alternate No. 1 Add or Deduct . . . $4,400.00 Alternate No. 2 Add or Deduct . . . $1,158.00 Alternate No. 3 Add or Deduct . . . $2,084.00 These Alternates were in addition to the Petitioner's Base bid of $204,322.00. The proposal form submitted by the Petitioner comports with Exhibit 4 to the Specifications, which was the mandatory Proposal Form. On August 31, 1994, William Phillip Austin, Peitioner's President, wrote the architect: Per our telephone conversation this date regard- ing the confusion relating to the Add/Deduct for Alternates 1, 2 and 3 for the above project, please be advised that our base bid did not include the work described in the Alternates. As stated if you want work described in Alternates 1, 2 and 3, you must add the cost to our base bid. The base bid including Alternates 1, 2 and 3 would, therefore, be $211,964.00. If we can provide additional information, please do not hesitate to contact us. The Respondent's architect completed and submitted the bid Tabulation and Notice of Award Recommendation to the Respondent in early September. The document clearly discloses the amounts of each bidder's Base Bid and Alternate proposals. Using plus (+) and minus (-) signs, the Bid Tabulation further shows each bidder's method of calculation. The record is devoid of evidence that the Respondent had any problem in evaluating the bids and identifying the lowest bidder. The Petitioner was the lowest bidder on any combination of base bid plus or minus any or all alternates. Subsequently the Petitioner received a NOTICE OF AWARD RECOMMENDATION dated October 4, 1994. The Notice informed the Petitioner that the Respondent "has recommended that the contract be awarded to your firm in the total amount of $211,964.00, accepting the Base Bid and Alternates #1, #2 & #3. The Administrator of Contracts Design and Permitting, Division of Building Construction, Department of Management Services, State of Florida will consider this recommendation." Larry R. Coleman, Construction Projects Administrator, signed the letter. The Petitioner acknowledged receipt. A representative of the second lowest bidder, Kalex Construction, then contacted the Respondent, complaining of the Award Recommendation. The grounds for the Kalex complaint are not in the record. However, on October 14, 1994, H. R. Hough, the Respondent's Contracts Administrator, sent the Petitioner a letter "to notify you of the State's decision to reject all bids on the above referenced project due to ambiguities in the specifications." Mr. Hough's reasons for the rejection are "other than those stated by the protestor," Kalex. The Respondent's Rule 60D-5.007, Florida Administrative Code, states: Determination of Successful Bidder. All projects except where competitive bidding is waived under the provisions of Rule 60D-5.008 will be publicly bid in accordance with the provisions in the project specifications bidding documents. Award of contract will be made to the responsive bidder, determined to be qualified in accordance with the provisions herein and meeting the requirements of the bidding documents, that submits the lowest valid bid for the work. The lowest bid will be determined as follows: The lowest bid will be the bid from the responsive bidder that has submitted the lowest price for the base bid or the base bid plus the additive alternates or less the deductive alternates chosen by the Agency to be included in or excluded from the proposed contract, taken in numerical order listed in the bid documents. The order of the alternates may be selected by the Agency in any sequence so long as such acceptance out of order does not alter the designation of the low bidder. Under the above-quoted rule, the Respondent compares bids beginning with the lowest "base bid." The Respondent is of the view that for this comparison to be fair and equal, all bidders must include the same scope of work in the "base bid." The Respondent does not interpret the above-quoted rule to allow deductive alternates from some bidders and additive alternates from others. (For reasons discussed in the Conclusions of Law which follow, the Respondent's interpretation and application of the above-quoted rule is erroneous.) The Specifications contain some ambiguous and inconsistent language regarding whether alternates should be treated as additive or deductive. The ambiguous and inconsistent language did not provide any bidder with an advantage or a disadvantage, nor did it otherwise affect the fairness of the bidding process.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services issue a Final Order in this case awarding a contract for the subject project to the Petitioner. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 16th day of December 1994. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of December 1994. APPENDIX The following are my specific rulings on all proposed findings of fact submitted by all parties. Proposed findings submitted by Petitioner Paragraph 1: This is primarily a statement of position and is addressed in the Preliminary Statement. Paragraphs 2 through 10: Accepted in substance with a few unnecessary details omitted. Proposed findings submitted by Respondent Paragraphs 1 through 6: Accepted in substance. Paragraph 7: First sentence accepted in substance. Second sentence rejected as constituting a conclusion which is not warranted by the evidence. Third sentence is accepted as an accurate statement of how Respondent has been interpreting the subject rule, but is not accepted as constituting a correct interpretation of the rule. Paragraph 8: Rejected as misleading and confusing because the "scope of work" to be performed under the contract can only be determined after the Respondent decides which alternates to include and which to exclude. Paragraph 9: The first two sentences are accepted in substance. The last sentence is rejected as constituting a conclusion which is not warranted by the evidence. COPIES FURNISHED: Timothy J. Armstrong, Esquire Armstrong & Mejer Suite 1111 Douglas Centre 2600 Douglas Road Coral Gables, Florida 33134 Stephen S. Mathues, Esquire Department of General Services Knight Building, Suite 312 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 Paul A. Rowell, General Counsel Department of General Services Knight Building, Suite 312 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 William H. Lindner, Secretary Department of General Services Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950
The Issue At issue in this proceeding is whether the Department of Environmental Protection's decision to reject all bids submitted for the project entitled BDRS 52-01/02 was illegal, arbitrary, dishonest, or fraudulent.
Findings Of Fact Parties Petitioner, All America Homes of Gainesville, Inc. (All America), is a corporation doing business in the State of Florida. All America submitted a timely written bid in response to the Department's ITB and filed timely protests to the Department's actions. The Respondent, the Department of Environmental Protection, is an agency of the State of Florida which manages and operates state parks under its jurisdiction, and solicits construction projects in state parks, pursuant to Chapter 258, Part I, Florida Statutes, through its Division of Recreation and Parks, Bureau of Design and Recreation Services. The ITB In November, 2001, the Department issued an ITB on a construction project entitled Hillsborough River State Park Concession Building, project number BDRS 52-01/02. The ITB included the Bid Specifications for the project. Bids were required to be submitted no later than 3:30 p.m. on Tuesday, December 18, 2001, at the Bureau's Tallahassee, Florida, office. The written Specifications define several terms, including, but not limited, to the following: ADDENDUM: A written explanation, interpretation, change, correction, addition, deletion, or modification, affecting the contract documents, including drawings and specifications issued by the OWNER [Department] and distributed to the prospective Bidders prior to the bid opening. ALTERNATE BID: Separate optional bid item for more or less project requirement used for tailoring project to available funding. Also may consist of alternate construction techniques. BASE BID: Formal bid exclusive of any alternate bids. BID FORM: The official form on which the OWNER requires formal bids to be prepared and submitted. ORAL STATEMENTS: Verbal instruction. NOTE: No oral statement of any person, whomever shall in any manner or degree modify or otherwise affect the provisions of the contract documents.[1] SEALED BID: The formal written offer of the Bidder for the proposed work when submitted on the prescribed bid form, properly signed and guaranteed. The Bid Specifications also contained the following relevant sections: Alternatives If the OWNER wishes to learn the relative or additional construction cost of an alternative method of construction, an alternative use of type of material or an increase or decrease in scope of the project, these items will be defined as alternates and will be specifically indicated and referenced to the drawings and specifications. Alternates will be listed in the bid form in such a manner that the Bidder shall be able to clearly indicate what sums he will add to (or deduct from) his Base Bid. The OWNER will judge for himself that such alternates are of comparable character and quality to the specified items. The Order of the alternate may be selected by the Department in any sequence so long as such acceptance out of order does not alter the designation of the low bidder. ADDENDA If the Consultant[2] finds it would be expedient to supplement, modify or interpret any portion of the bidding documents during the bidding period, such procedure will be accomplished by the issuance of written Addenda to the bidding documents which will be delivered or mailed by the OWNER'S Contracts section to all bidders who have requested bidding documents. Interpretation No interpretation of the meaning of the drawings, specifications or other bidding documents and no correction of any apparent ambiguity, inconsistency or error therein will be made to any Bidder orally. Every request for such interpretation or correction should be in writing, addressed to the Consultant. All such interpretations and supplemental instructions will be in the form of written Addenda to the bidding documents. Only the interpretation or correction so given by the Consultant in writing and approved by the OWNER shall be binding, and prospective Bidders are advised that no other source is authorized to give information concerning, or to explain or interpret, the bidding documents. B-16 Bid Modification Bid modification will be accepted from Bidders, if addressed as indicated in Advertisement for Bids and if received prior to the opening of bids. No bid modification will be accepted after the close of bidding has been announced. Modifications will only be accepted if addressed in written or printed form submitted with the bid in sealed envelopes. Telegrams, facsimiles, separate sealed envelopes, written on printed modifications on the outside of the sealed envelopes will not be accepted. All bid modifications must be signed by an authorized representative of the Bidder. Modification will be read by the OWNER at the opening of formal bids. B-21 Rejection of Bids The OWNER reserves the right to reject any and all bids when such rejection is in the interest of the State of Florida, and to reject the bid of a bidder who the OWNER determines is not in a position to perform the work. B-23 Award of Bid . . .The qualified Bidder submitting the lowest bid will be that Bidder who has submitted the lowest base bid plus any selected alternates. . . . The OWNER reserves the right to waive any minor irregularities in bids received when such waiver is in the interest of the OWNER. The Award of Bid will be issued by the OWNER only with responsible Bidders, found to meet all requirements for Award of Bid, qualified by experience and in a financial position to do the work specified. Each bidder shall, if so requested by the OWNER, present additional evidence of his experience, qualifications and ability to carry out the terms of the Agreement. (Emphasis in original, except for Section B-10.) The Bid Form is included with the Specifications and provides in part: Base Bid: Furnish labor, equipment, Lump Sum $ supervision and material to construct a new concession building of 2940 square feet located at the Hillsborough River State Park along with the alteration of the existing concession building according to plans and specifications. Alternate #1: Furnish labor, equipment, Add Amt.$__ supervision and material to renovate the existing concession building according to plans and specifications. There is a separate section for "Allowances," i.e., Section 01210, for the Hillsborough State Park. This section provides in part: SECTION 01210 – ALLOWANCES * * * 1.2 SUMMARY This Section includes administrative and procedural requirements governing allowances. Certain materials and equipment are specified in the Contract Documents and are defined by this [sic] specifications as material and labor to be provided against a pre-determined allowance. Allowances have been established in lieu of additional requirements and to defer selection of actual materials and equipment to a later date when additional information is available for evaluation. If necessary, additional requirements will be issued by Change Order. * * * 3.3 SCHEDULE OF ALLOWANCES A. Allowance #1: Include in the base bid an allowance for the purchase and installation of. . . kitchen equipment. . . . The total dollar amount of the allowance to be included shall be $12,000.00. There is also a separate section for "Alternates," i.e., section 01230, for Hillsborough River State Park, which provides in part: SECTION 01230 – ALTERNATES * * * 1.3 DEFINITIONS Alternate: An amount proposed by bidders and stated on the Bid Form for certain work defined in the Bidding Requirements that may be added to or deducted from the Base Bid amount if OWNER decides to accept a corresponding change either in the amount of construction to be completed or in the products, materials, equipment, systems, or installation methods described in the Contract Documents. The cost or credit for each alternate is the net addition to or deduction from the Contract Sum to incorporate alternate into the Work. No other adjustments are made to the Contract Sum. . . . . 3.1 SCHEDULE OF ALTERNATES A. Alternate No. 1: Renovate the existing concession building in its entirety as shown in the drawings and specified herein. (emphasis added.) At this stage of the bidding documents, the contractor/bidder is requested to provide a Base Bid/Lump Sum on the Bid Form to "[f]urnish labor, equipment,. . .to construct a new concession building," and to provide an additional and separate amount for Alternate No. 1 to "[f]urnish labor, equipment, . . . to renovate the existing concession building." On December 13, 2001, the Bureau issued "Addendum No. One (1)" (written by the architect) to the ITB on the "Hillsborough River State Park – Concession Building." The Addendum contained the following relevant sections: Specification Section 01210: Allowances Add the following new paragraph 3.3.B: ”Allowance #2: Include in the base bid an allowance for the renovations of the existing concession building; renovations shall be defined by the Owner. The total dollar amount of the allowance to be included shall be $25,000." Specification Section 01230: Alternates Modify paragraph 3.1.A. as follows: "Alternate No. 1: Renovate the existing concession building as defined by the Owner, and as provided for under Section 01210, Allowances." (emphasis added.) Each contractor was required to sign the Addendum and attach it to the bid. By definition, and pertinent here, an addendum is an additional written instruction to a contractor during the bidding process. Based on the weight of the evidence, the purpose of this Addendum was to require the contractor to include a $25,000.00 Allowance (for Allowance # 2) in the Base Bid, for the work which might be performed if the Department requested the work to be performed for Alternate No. 1, i.e., for the renovation of the existing concession building.3 (The Department's architect decided it would cost approximately $25,000.00 to renovate the existing concession building, hence Allowance # 2.) In other words, the Addendum does not have a specific dollar amount to be included for Alternate No. 1. Rather, the $25,000.00 is an Allowance for the work described as Alternate No. 1, but the amount is to be included in the Base Bid and not as a separate line item, dollar amount. But, importantly, the Addendum did not delete the potential work to be performed as described in Alternate No. 1, although Mr. Bowman and others believed that the Addendum deleted Alternate No. 1. It deleted the necessity to place a specific dollar amount on the Bid Form for Alternate No. 1. (Mr. Bowman is a registered Professional Engineer and a licensed contractor. He has worked for the Department for 15 years and has served as Bureau Chief for two years. He supervises the contract section and the design section, which was responsible for preparing the technical plans and specifications and bidding out the job.) Mr. Bowman offered the following explanation why he believed the Addendum was confusing: Okay. I think the confusion that was created, you know, I think the addendum in itself, you know, said add $25,000 to the base bid, but then on the bid form, it still had the space down there for alternate number one, which alternate number one, which alternate number one had become $25,000 that was to be allowed for the concession building, and I think that's where the confusion came in because I think they were still confused, that they weren't really sure that they should not put that 25 down there but they knew they had been told in the addendum to do it and I think that's the reason for the notes and we got to the correspondence on the bid form, was they wanted to make sure that that's what we were wanting to do. And I think that's where the confusion came in. Like I said, it's always, if you could go back and do it again, it would be much wiser just to issue a whole new bid form and then we wouldn't be here today. But, we didn't do that. Okay. So, that's why we are here. The language in this Addendum, when read with the original Bid Specifications, apparently caused confusion with some of the bidders on the project. Several bidders called Marvin Allen (an architect and project manager for the Department's Bureau of Design and Recreation Services) prior to the submission of the bids, to clarify how the $25,000.00 Allowance should be shown on the Bid Form. (Mr. Allen did not author any of the specifications, including the Addendum.) He was listed as a contact person. He did not contact any bidders. But, Mr. Allen recalled telling each bidder who asked that the Allowance of $25,000.00 should be included in the Base Bid. But, he does not recall the names or numbers of the bidders who called, "possibly" three, four or five. Mr. Allen believed the Addendum was clear. According to Mr. Allen, the bidders who called him found the Addendum confusing. The oral responses to the bidders can be construed as interpretations of the Addendum. However, pursuant to Section B- 10 of the Specifications, any such interpretations were required to "be in the form of written Addenda to the bidding documents." Also, any such questions should have been in writing. If Section B-10 were complied with, all bidders would have been potentially on the same footing, or, at the very least, would have had access to a written clarifying document. Opening of the Bids On December 18, 2001, the bids were opened by Mike Renard, Contracts Manager with the Bureau of Design and Recreation Services, and Susan Maynard, Administrative Assistant. Mr. Dwight Fitzpatrick, a representative of All America, also attended the bid opening. The Bid Form submitted by Nelco showed a Base Bid of $355,478.00 (Lump Sum $355,478.00), and also showed an amount of $25,000.00 on the Alternate # 1 line (Add Amt. $25,000.00). See Finding of Fact 6. (It was clear to Mr. Renard that the $25,000.00 should have been included on Nelco's Base Bid. But Mr. Renard believed that Nelco submitted a responsive bid because the Department only accepted the Base Bid. Mr. Bowman agreed.) Nelco was the only one of five bidders to have a dollar amount in the Alternate #1 line under "Add Amt. $ ." All America submitted the second lowest Base Bid of $362,000.00. There was also a hand-written note on the All- America Bid Form that stated: "Addenda # 1 instruction to place $25,000 allowance in both Base Bid and as alternate # 1." Another hand written note was located below the "Add Amt. $-0-" line: "amount added in Base Bid with $25,000 allowance per Marvin Allen." The Department considered All America's bid responsive. It is a fair inference that three out of five of the other Bid Forms contained language indicating that the bidders were relying on Addendum No. One by placing the $25,000.00 Allowance in the Base Bid.4 It is uncertain whether they did so in light of the instructions of Mr. Allen concerning how to complete the Bids Forms. However, given the nature of the calls to Mr. Allen, there is a reasonable inference that there was some confusion among some of the bidders. The Department determined that Nelco submitted the lowest Base Bid, but the Department's staff had a question as to whether Nelco had included the $25,000.00 in its Base Bid. After conferring with his superiors, Mr. Renard was instructed to call Nelco to make certain that its Base Bid included the Allowance amount ($25,000.00). Mr. Renard spoke with Steve Cleveland, Nelco's Project Manager, "to verify the fact that [Nelco] had the allowance in their base bid." Mr. Cleveland orally confirmed that Nelco's Base Bid included the $25,000.00 Allowance. Mr. Renard asked Mr. Cleveland to send him a letter verifying this statement. Mr. Renard viewed this inquiry as a request for clarification or verification, not an opportunity for Nelco to modify its bid. Mr. Bowman agreed. (Mr. Renard did not believe Addendum No. 1 was confusing.) In a letter dated December 20, 2001, Mr. Cleveland confirmed that Nelco’s Base Bid of $355,478.00 included the Allowance amount and that Nelco could still perform the contract if the $25,000 Allowance was removed from its Base Bid pursuant to the ITB, i.e., that Nelco would perform the contract for $355,478.00 less $25,000.00, or $330,478.00, if the Department did not accept Alternate # 1 and the Allowance. (An alternate does not have to be accepted by the Department.) According to Mr. Renard, Mr. Cleveland never mentioned modifying, changing, or altering Nelco's bid. The Department only accepted the Base Bid for each bid. Mr. Renard did not consider it unusual to call a bidder or contractor to verify information to determine whether they can or cannot perform the work at the stipulated price. He considered it common to make this inquiry. Also, it was common in Mr. Bowman's experience to call a bidder to get clarification. Mr. Renard was not aware of any statute or rule which authorizes the Department to request clarification from a bidder after the bids are opened. Mr. Renard was more familiar with the bid forms than Mr. Allen. After receiving Mr. Cleveland's letter, the Department determined that Nelco submitted the lowest Base Bid and that the $25,000.00 amount that Nelco wrote on the Bid Form Alternate # 1 line, was a minor irregularity in the bid which the Department, as the Owner, could waive pursuant to the ITB. On December 20, 2001, the Department posted the Tabulation of Bids showing the anticipated award of the contract to Nelco. At the hearing, an unsigned letter on Department letterhead was introduced, which was addressed to Nelco and stated that Nelco submitted the apparent low bid. However, Mr. Renard testified that these letters are prepared routinely, but not mailed out without his signature. Mr. Renard did not recall signing the letter or ever sending out such a letter to Nelco. On December 21, 2001, the Department received a Notice of Intent to Protest letter from Allen E. Stine, the President of All America. In his letter, Mr. Stine stated that Nelco’s bid should have been rejected for failure to follow the specified format as per Addendum No. 1, or adjusted to have the $25,000.00 amount added to their Base Bid. Bid Protests All America filed a written formal bid protest on January 4, 2001. On January 9, 2001, Cindy Otero of All America, notified Mr. Renard by letter, and stated that Mr. Stine was available for a hearing regarding the bid protest. On January 28, 2002, Mr. Renard returned All America's check for the bond, stating that it was unnecessary. Mr. Stine recounted a number of unanswered telephone calls after the first protest was filed. During one conversation, Mr. Renard recalled Mr. Stine saying to him, "You can't do this, you can't do this." After receiving the first formal protest, the Department staff consulted with legal staff and reviewed the documents and bid procedures. Based on the number of questions received concerning the Addendum and the hand-written notes on several of the bid forms, Mr. Bowman, Bureau Chief, determined that the bid documents were confusing and ambiguous. (Mr. Bowman stated that this was their first bid protest in his 15 years with the Department.) Therefore, Mr. Bowman decided that it would in the best interest of the State of Florida to reject all of the bids pursuant to the Bid Specifications. Mr. Bowman felt that the ITB should be re-written in order to make it clearer and allowing all of the bidders to re-bid the project without any confusion or ambiguity. Mr. Stine stated that his "senior estimator" told him that the bid language "could be confusing." He and his "senior estimator" had a discussion about whether the Allowance should have been placed in the Base Bid or not. At the time of submission of All America's bid, Mr. Stine was clear that the Allowance should be placed in the Base Bid, especially after calling Mr. Allen. But, his senior estimator was not so clear. In order to appease him, Mr. Stine placed the hand-written note on All America’s proposal. Mr. Stine essentially, "cleaned" up his proposal. At the hearing, Mr. Bowman testified Rule 60D-5.0071, Florida Administrative Code, see Conclusion of Law 59, does not list "confusing or ambiguous bid specifications" as one of the circumstances allowing for the rejection of all bids. However, Mr. Bowman later stated during the hearing that he believed the circumstances listed in Rule 60D-5.0071 were not the only circumstances authorizing the Department to reject all bids. Mr. Bowman testified that he believed that general confusion among the bidders caused by the ambiguous ITB constituted sufficient grounds for rejecting all bids. Mr. Bowman was advised by legal counsel that rejecting all of the bids would probably result in another bid protest by Nelco, All America, or both. Thus, the Department decided to delay addressing All American’s first protest until after posting the rejection of all bids and receiving the subsequent protests, so that all of the protests could be resolved at once in an efficient and economical manner. Notwithstanding the Department's justifications for rejecting all bids and not proceeding on All America's initial protest, the record is unclear why the Department waited several months to reject all bids. On May 13, 2002, the Department posted the rejection of all bids. On May 16, 2002, the Department received a formal written protest of the rejection of all bids filed by All America. On May 17, 2002, Jerome I. Johnson, attorney for the Department, contacted Mr. Robert A. Lash, All America's counsel at the time, concerning the resolution of All America’s formal protest. (Before the final hearing, Mr. Lash, with All America's consent, withdrew as counsel for All America.) The parties agreed to suspend formal bid protest procedures until a meeting could be held between the parties in an attempt to resolve the protests. Mr. Johnson sent a letter dated May 21, 2002, to Mr. Lash confirming this conversation. On June 26, 2002, a meeting was held among the Department staff, legal staff, and Mr. Lash and Mr. Stine, representing All America. The parties were unable to resolve the protests. At the conclusion of the meeting, the parties agreed that formal protest procedures would not be implemented until Mr. Stine could confer further with his counsel. In a letter dated July 5, 2002, Mr. Lash stated that his client wished to proceed with formal protest procedures and requested an administrative hearing on the protests. Are the Specifications and Bid Documents Ambiguous and Was There Confusion? The parties stipulated that "[t]he Addendum language was confusing," notwithstanding the testimony of several witnesses that they were not confused. The Department's determination that the bid Specifications, including the Addendum, and the Bid Form, which remained unchanged after the Addendum was issued, were confusing and ambiguous, is supported by the weight of the evidence. This is particularly true regarding the Bid Form. The Addendum required the bidder to include an Allowance of $25,000.00 in the Base Bid for work described as Alternate # 1. But the Bid Form was unchanged to reflect the Addendum changes. The Bid Form retained a line for the bidder to submit an additional amount for Alternate # 1. Further, it appears that several bidders were confused, including, Mr. Stine, who spoke with Mr. Allen and requested and received clarification. Further, it is unclear whether all of the bidders, including Nelco, were aware of the oral interpretations or clarifications of the Addendum rendered to some of the bidders. Rejection of All Bids Based upon the foregoing, given the standard of review in this proceeding discussed in the Conclusions of Law, the weight of the evidence indicates that the Department's action, in rejecting all bids, was not illegal, arbitrary, dishonest, or fraudulent. The Department's staff was well-intended and made some mistakes along the way, e.g., by not changing the Bid Form, which they readily admit. But there was a rationale for rejecting all bids under the circumstances.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department issue a final order dismissing All America’s Petition to Prevent Rejection of Bids and Award Contract to Petitioner and denying All America's request for attorney’s fees and costs. DONE AND ENTERED this 24th day of September 2002, in Tallahassee, Leon County, Florida. CHARLES A. STAMPELOS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 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 24th day of September 2002.
Findings Of Fact Findings based on stipulation The School Board of Broward County, Florida, ["Board"] issued bid number 94-307D [Lease of School Board Owned Parking Lot - Term Contract] on the 22nd day of November, 1993. Three bidders responded to the invitation to bid. They were: Bliss Parking, Inc., a Florida Corporation ("Bliss"); Fort Lauderdale Transportation, Inc., d/b/a USA Parking Systems ("USA"); and Carl A. Borge. An initial review of the tabulations of the bids indicated that Bliss and USA had submitted the identical percentage of shared revenue to the Board in their respective bids. After the review of the bids, Board staff posted a recommendation to award the bid to USA. [See the "remarks" portion of Exhibit B.] A bid protest was filed by Bliss because of the "remarks" portion of Exhibit B. After a review of Bliss' bid protest, Board staff amended its recommendation to reject all bids because of the issues raised in Bliss' protest. After Board staff notified all bidders of this amended recommendation, USA filed a notice and formal protest. The Board, at its meeting on March 1, 1994, heard the presentation of USA and Board staff. The Board, after deliberating the matter, deferred the item until the meeting of March 15, 1994, wherein seven Board members would be present. At the March 15, 1994, Board meeting, by a vote of 4 to 3, the Board granted USA's protest and awarded the bid to USA whom the Board had determined was the highest bidder meeting bid specifications. All bidders were notified of the Board's action and on the 16th day of March 1994 Bliss timely filed its notice of protest and its formal written protest. Bliss appeared with counsel before the Board on the 5th day of April 1994. After considering arguments of counsel for Bliss and reviewing the material in Agenda Item H-1 and in consideration of its previous actions, it voted to reject Bliss' protest seeking the rejection of all bids received and re-bidding of the item. Bliss subsequently requested a formal hearing under Chapter 120.57, Florida Statutes. Findings based on evidence adduced at hearing The General Conditions portion of the Invitation To Bid includes the following provision: INTERPRETATIONS: Any questions concerning conditions and specifications must be submitted in writing and received by the Department of Purchasing no later than five (5) working days prior to the original bid opening date. If necessary, an Addendum will be issued. A related provision in the Special Conditions portion of the Invitation To Bid reads as follows: 21. INFORMATION: Any questions by prospective bidders concerning this Invitation to Bid should be addressed to Mrs. Sharon Swan, Purchasing Agent, Purchasing Department, (305) 765-6086 who is authorized only to direct the attention of prospective bidders to various portions of the Bid so they may read and interpret such for themselves. Neither Mrs. Swan nor any employee of the SBBC is authorized to interpret any portion of the Bid or give information as to the requirements of the Bid in addition to that contained in the written Bid Document. Questions should be submitted in accordance with General Condition #7. Interpretations of the Bid or additional information as to its requirements, where necessary, shall be communicated to bidders only by written addendum. The Special Conditions portion of the subject Invitation To Bid includes the following provisions: REFERENCES: A minimum of three (3) references must be provided by completing page 14 of the bid. Failure to provide references with the bid or within five (5) days of request by the Purchasing Department will be reason for disqualification of bid submitted. All references will be called. SBBC reserves the right to reject bid based on information provided by references. Page 14 of the Invitation To Bid has three sections, each of which reads as follows: COMPANY NAME: STREET ADDRESS: CITY: STATE: ZIP: TELEPHONE NUMBER: CONTACT PERSON'S NAME: NUMBER OF PARKING SPACES: LENGTH OF CONTRACT: At page 12 of the Invitation To Bid, the following note appears under the Bid Summary Sheet portion of the document: "NOTE: Calculation of high bidder shall be the bidder offering the highest percent of shared revenue meeting all specifications and conditions of this bid." The Special Conditions portion of the Invitation To Bid also contains a procedure for resolving tie bids, which reads as follows, in pertinent part: TIE BID PROCEDURES: When identical prices are received from two or more vendors and all other factors are equal, priority for award shall be given to vendors in the following sequence: A business that certifies that it has implemented a drug free work place program shall be given preference in accordance with the provisions of Chapter 287.087, Florida Statutes; The Broward County Certified Minority/ Women Business Enterprise vendor; The Palm Beach or Dade County Certified Minority/Women Business Enterprise vendor; The Florida Certified Minority/Women Business Enterprise vendor; The Broward County vendor, other than a Minority/Women Business Enterprise vendor: The Palm Beach or Dade County vendor, other than a Minority/Women Business Enterprise vendor; The Florida vendor, other than a Minority/Women Business Enterprise vendor. If application of the above criteria does not indicate a priority for award, the award will be decided by a coin toss. The coin toss shall be held publicly in the Purchasing Department; the tie low bid vendors invited to be present as witnesses. The Petitioner filled out all three sections on page 14 of the Invitation To Bid and submitted that page with its bid. The three references listed by the Petitioner were companies for whom the Petitioner provided parking services or parking facilities, but none of the three references listed by the Petitioner was a land owner from whom the Petitioner leased land for the operation of a parking facility. Mr. Arthur Smith Hanby is the Director of Purchasing for the School Board of Broward County. In that capacity he is in charge of the bidding process for the School Board. Specifically, he was in charge of the bidding process for the subject project. In the course of evaluating the bids on the subject project, the evaluation committee reached the conclusion that there was a problem with the bid submitted by the Petitioner with respect to the references listed in the Petitioner's bid. In the original bid tabulation and recommendation posted on January 4, 1994, the recommendation was that the contract be awarded to the Intervenor, whose bid amount tied with the Petitioner's bid amount. 4/ The reasons for the recommendation were described as follows in the "remarks" portion of the tabulation and recommendation form: REJECT BID FROM BLISS PARKING, INC. REFERENCES WERE GIVEN ON PAGE 14 OF BID. ALL REFERENCES WERE CALLED. BASED UPON INFORMATION PROVIDED BY THESE REFERENCES AND IN ACCORDANCE WITH SPECIAL CONDITION #10, IT IS RECOMMENDED THAT THE BID FROM BLISS PARKING, INC. BE REJECTED. EVALUATION OF THIS BID CEASED AT THIS TIME. THERE MAY BE ADDITIONAL REASONS WHY THIS BID COULD NOT BE ACCEPTED. The sole reason for the rejection of the Petitioner's bid was that the references listed by the Petitioner were not the types of references the evaluation committee wanted to receive. The evaluation committee wanted references from entities who, like the School Board, were land owners who had leased land to a parking lot operator. The evaluation committee was of the opinion that references from other sources would not adequately protect the interests of the School Board. There is nothing in the Invitation To Bid that addresses the issue of who should be listed as references. Specifically, there is nothing in the Invitation To Bid requiring that references be submitted from land owners who had leased land to a parking lot operator. At the time of the issuance of the subject Invitation To Bid, the Petitioner was operating the subject parking lot for the School Board. There were no material differences in the bids submitted by the Petitioner and the Intervenor other than the differences in the types of references they listed. The Petitioner's references who were contacted did not provide any adverse information about the Petitioner. The evaluation committee spoke to two of the references listed by the Petitioner, but did not speak to the third listed reference. The third reference listed by the Petitioner was a court reporting firm located across the street from the location of the subject parking lot. The evaluation committee did not speak to anyone at the court reporting office because the telephone number listed for that reference was not a working number. The evaluation committee made an unsuccessful attempt to locate the telephone number of the court reporting firm in the telephone book.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that the School Board issue a final order in this case concluding that the Petitioner's bid is responsive to the Invitation To Bid and that the School Board then take one of the courses of action described in paragraph 26, above. DONE AND ENTERED this 23rd day of June 1994 at Tallahassee, Leon County, Florida. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of June 1994.
Findings Of Fact The Petitioner, PFO, is a professional corporation organized and existing under the laws of the State of Florida. Petitioner's principal office is located in West Palm Beach, Florida. At all times material to the claims of this case, Petitioner had fewer than 25 full-time employees. At all times material to the claims of this case, Petitioner had a net worth of less than $2 million. On May 22, 1995, the Department provided Petitioner with a clear point of entry to a formal administrative hearing pursuant to Section 120.53(5), Florida Statutes. At that time the Department issued an intent to award the Palm Beach County (Intrastate) CSE contract to a third party. This dispute evolved into DOAH case no. 95-3138BID or "the bid case." The Department was not a "nominal party" in the bid case. A recommended order was entered in the bid case on September 5, 1995. Except for a minor point not relevant to the issues of this matter, the Department adopted the findings and conclusions of the recommended order and entered its final order on December 1, 1995. The final order in DOAH case no. 95-3138BID awarded the Palm Beach County (Intrastate) contract for CSE legal services to Petitioner. Such award was based upon the conclusions that the third party's proposal was nonresponsive and that aspects of the evaluation process were arbitrary. No appeal was timely filed against the final order. Petitioner is, therefore, a prevailing small business party within the meaning of Section 57.111, Florida Statutes. The Petitioner timely filed its request for attorneys' fees and costs in the instant case pursuant to Section 57.111, Florida Statutes. The total amount of attorneys' fees and costs incurred by Petitioner in the bid case was $63,495.25. Of that amount, at least $15,000 was reasonable and necessary for Petitioner to incur in the preparations for, and attendance at, the hearing in the bid case. The solicitation package for the bid case contained mandatory requirements with which all applicants were to comply. The final order in the bid case concluded that the successful applicant had failed to satisfy all mandatory requirements. Its bid was, therefore, nonresponsive to the solicitation. Additionally, the final order determined that the instructions regarding how the proposals were to be evaluated were unclear and that points were inappropriately assigned to the successful applicant. The overall conclusion of the final order found that the Department had acted arbitrarily in the intended award to this third party applicant. All of the material deficiencies relied on in the recommended order and the final order to reach the conclusion that the Department had acted arbitrarily were known to the Department at the time of its initial review and evaluation of the proposals. For example, the Department knew that the applicant had not identified two attorneys who would be expected to perform services under the contract, and had not included certificates of good standing from the Florida Bar for them. Additionally, the applicant had not provided references from three persons as specified in the solicitation package. This was evident upon the opening of the proposal. Nevertheless, the Department scored the nonresponsive proposal and awarded it sufficient points to be the apparent winner among the applicants. An award of attorneys fees' and costs under Section 57.111, Florida Statutes, is capped at $15,000. The agency has not disputed the reasonableness nor the amount of fees claimed in connection with the bid case. The agency has not offered evidence to specify each item of cost or fee in dispute. Discovery requested by the Department sought information for the period September 1995 through January 1996 which included runner logs of Petitioner's counsel, itemized bills regarding another party (not a party to the bid case nor this case), and the deposition of Don Pickett. None of the requested discovery addressed the issue of whether the Department's actions in the bid case were substantially justified. None of the requested discovery addressed facts which the Department had placed in issue by its response to the petition. None of the discovery addressed the issue of whether there are special circumstances which would make an award of reasonable fees and costs unjust. Moreover, the parties have stipulated that there are no special circumstances which would make an award of reasonable fees and costs unjust. No new information pertinent to the claim for fees and costs herein which was unknown to the Department as a result of the bid case proceeding was discovered from the deposition of Don Pickett. No new information pertinent to the reasonableness or amount of the fees claimed was discovered from the deposition of Don Pickett or the other discovery requested. The factual circumstances argued in Respondent's Proposed (sic) Recommended Order, ie. that the agency had relied on findings and conclusions from an unrelated DOAH case in connection with the review of the underlying bid case, were not set forth in the response filed by the agency in the instant case and have not been deemed credible in determining the issues of this case. The proposal submitted by the third party in the bid case was nonresponsive. The Department has stipulated that the award of a contract to a nonresponsive bidder is arbitrary.
The Issue Whether Respondent acted contrary to the agency's governing statutes, rules or policies, or the bid specifications in its proposed decision to award a contract to Intervenor Xerox Corporation pursuant to Request for Proposal ("RFP") No. 07-015- 040-RFP.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of the proceeding, the following findings of fact are made: On December 15, 2006, PCS issued the 2007 RFP, entitled "Copier Program--Request for Proposals." The 2007 RFP was intended to provide a comprehensive copier program for the entire Pinellas County School District from the award date of the bid, then anticipated to be February 20, 2007, through June 30, 2012. The purpose of the 2007 RFP was stated as follows in Section 3.1 of the General Information section: [PCS] requests proposals from experienced and qualified vendors to provide a comprehensive copier program countywide which fulfills the priorities and needs expressed by district focus groups. PCS wishes to partner with a qualified vendor who will continue to improve information sharing, right size number of assets, and reduce the number of device types while lowering the district's cost. Vendors may propose whatever program they feel best meets the district's needs and are not restricted in any way other than to meet the basic equipment specifications, terms and conditions outlined in this bid. . . . (Emphasis added) A statement of the 2007 RFP's "scope" set forth in the Special Conditions similarly provided: [PCS] requests proposals from experienced and qualified vendors to provide a comprehensive copier program countywide which fulfills the priorities and needs expressed by district focus groups. Vendors may propose whatever program they feel best meets these needs and a district evaluation committee made up of participants from the focus groups will evaluate proposals and make the selection it feels best meets these needs based upon a set of criteria published in this document. . . . [Emphasis added] The 2007 RFP provided for proposals to be received no later than January 18, 2007, at 3:00 p.m. The 2007 RFP contained General Terms and Conditions, setting forth the standard boilerplate terms common to all PCS procurements, and Section 1 of "Special Conditions" particular to this contract.1 These were followed by: Section 2, "Personnel Matrix"; Section 3, "General Information"; Section 4, "Program Specifications"; Section 5, "Equipment Specifications"; Section 6, "Cost Proposal"; and Section 7, "Contractor Response." PCS has adopted the General Terms and Conditions as rules, codified in Part A of the PCS Purchasing Handbook. Paragraph 1(g) of the General Terms and Conditions, "Freight Terms," provided: All items are to be bid FOB destination with all transportation charges prepaid and included in the bid prices and title transferring to the district at the time of delivery, unless otherwise stated in bid invitation. Any exceptions to these freight terms taken by the bidder must be clearly stated in the bidder's proposal. The purchasing department will evaluate any such exceptions and determine if the exception constitutes grounds for rejection of the bidder's proposal. [Emphasis added] Paragraph 3 of the General Terms and Conditions, "Acceptance and Withdrawal of Bids," provided: A bid (or amendment thereto) will not be accepted by the purchasing department after the time and date specified for the bid opening, nor may a bid (or amendment thereto) which has already been opened in public be withdrawn by the bidder for a period of sixty (60) calendar days after the bid opening date and time, unless authorized by the purchasing department. By written request to the purchasing department, the bidder may withdraw from the bid process and ask to have their sealed bid proposal returned at any time prior to the closing date and time for the receipt of bid proposals. Paragraph 14 of the General Terms and Conditions, "Variance to Bid Documents," provided: For the purpose of bid evaluation, bidders must clearly stipulate any or all variances to the bid documents or specifications, no matter how slight. If variations are not stated in the bidder's proposal, it shall be construed that the bid proposal submitted fully complies in every respect with our bid documents. Paragraph 30 of the General Terms and Conditions, "Errors and Omissions," provided: In the event an error or obvious omission is discovered in a bidder's proposal, either by the purchasing department or the bidder, the bidder may have the opportunity of withdrawing their bid, provided they can produce sufficient evidence to document that the error or omission was clerical in nature and unintentional . . . This privilege shall not extend to allowing a bidder to change any information contained in their bid proposal; however, in the event of a minor omission or oversight on the part of the bidder, the purchasing department (or designee) may request written clarification from a bidder in order to confirm the evaluator's interpretation of the bidder's response and to preclude the rejection of their bid, either in part or in whole. The purchasing department will have the authority to weigh the severity of the infraction and determine its acceptability. Paragraph 31 of the General Terms and Conditions, "Basis of Award of Bids," provides: "A Bidder who substitutes its standard terms and conditions for the district's, or who qualifies its bid in such a manner as to nullify or limit its liability to the district will be considered nonresponsive." The standard form cover sheet to both the 2006 and 2007 RFPs contained a "Note to Bidder" that stated: "A signed bid submitted to the School Board obligates the bidder to all terms, conditions and specifications stated in this bid document, unless exceptions are taken and clearly stated in the bidder's proposal." (Emphasis added) The Special Conditions of the 2007 RFP included a provision titled "Acceptance of Vendor Responses," which stated: "The purchasing department reserves the right to accept proposals from multiple vendors, and to accept or reject portions of a proposal based upon the information requested. Vendors may be excluded from further consideration for failure to fully comply with the requirements of this RFP solely at the purchasing department's discretion." (Emphasis added) The Special Conditions of the 2007 RFP also included a provision entitled "Integrity of Bid Documents," which stated: Bidders shall use the original Bid Proposal Forms provided by the Purchasing Department and enter information only in the spaces where a response is requested. Bidders may use an attachment as an addendum to the Bid Proposal form if sufficient space is not available on the original form for the bidder to enter a complete response. Any modifications or alterations to the original bid documents by the bidder, whether intentional or otherwise, will constitute grounds for rejection of a bid. Any such modifications or alterations that a bidder wishes to propose must be clearly stated in the bidder's proposal response and presented in the form of an addendum to the original bid documents. Both Xerox and IKON timely submitted proposals in response to the 2007 RFP. Evaluations of the responses to the RFP were based on a two-step procedure. First, a focus group of individuals from the Pinellas County School District would analyze the bids and award points based on the specifications and the Proposal Evaluation Form set forth in the RFP. The maximum award was 100 points, with 80 points constituting the threshold for further consideration. Second, those vendors which met the 80-point threshold would compete solely on price. Those bidders who did not score 80 points in the first stage would not have their price bids opened. By January 24, 2007, the focus group had finalized its evaluations, and the cost proposals were to be opened on January 26, 2007. Both IKON and Xerox scored above the 80 point level. IKON received a score of 87 points from the focus group and Xerox received a score of 81 points. Xerox's proposal included, among 15 unnumbered appendices, an appendix titled "Xerox Clarification Addendum to the RFP." This Addendum contained four "clarifications" of portions of the General Terms and Conditions, seven "clarifications" regarding the Program Specifications portion of the Special Conditions, and 12 items under the heading "Other Xerox Service Terms" that purported to set forth contractual provisions regarding service, personnel, risk of loss, limitations on liability, payment schedules, and other standard contract terms. PCS's purchasing department conducted a responsiveness review of the proposals prior to sending them to the focus group for substantive evaluation, but did not notice the Xerox Addendum. Mark Lindemann, the director of purchasing for PCS, testified that it is not customary for bidders to submit such an addendum, and, therefore, his staff was not looking for it when conducting their responsiveness review. On January 30, 2007, after the focus group had performed its evaluation of all the bids, and the cost proposals had been opened and the bid tabulations had been posted on the PCS website, Colin Castle of IKON brought to the attention of the PCS purchasing department the presence of the Xerox Addendum. Geri Pomerantz is the Xerox employee responsible for public sector solicitations in the Southeast United States. She is responsible for understanding the terms and conditions of a solicitation, for pricing the solution based on the customer's requirements, and for ensuring that Xerox submits a responsive proposal. Ms. Pomerantz signed and submitted Xerox's proposal in response to the 2007 RFP. Ms. Pomerantz believed that the Xerox Addendum complied with the "Integrity of Bid Documents" provision of the Special Conditions, quoted above. By submitting the Addendum, Xerox sought to clarify areas of the RFP, to explain how Xerox was meeting the requirements of the RFP, and to propose new items where Ms. Pomerantz believed the RFP was silent on important terms. Ms. Pomerantz testified that, to comply with the "Integrity of Bid Documents" provision, Xerox included the proposed clarifications in the body of its proposal, where that was possible, then further called them to the attention of PCS by placing them in the Addendum. Though unnumbered, the Xerox Addendum is clearly identified in the Table of Contents at the front of the Xerox proposal and on a separate tab on the side of the proposal. Xerox incorporated its clarifications in the body of its proposal in those places where the 2007 RFP requested a response from the vendor, i.e., Section 4, the Program Specifications portion and Section 5, the Equipment Specifications portion. Xerox incorporated clarifications to the following Program and Equipment Specifications: Section 4.3.1-–Equipment Build Status; Sections 4.3.4, 5.3.2 and 5.3.13 –-Price Offering; Sections 4.7.4 and 4.7.5-–Inspection and Acceptance; Section 4.10.2-–Response Time; Section 4.10.3-– Uptime; Section 4.10.4--Electronic Meter Reads; and Section 4.17–-Insurance Specifications for Contractors. The General Terms and Conditions did not call for a vendor response, and Xerox's clarifications or proposed modifications to those were made only in the Addendum. The introduction to the Xerox Addendum provides as follows: We have reviewed your Invitation to Bid ("Bid")[2] for a Copier Program, and have prepared a proposal that we believe addresses your requirements. However, some of the Board's requirements require that we make some limited clarifications to the terms and conditions included in your Bid. These clarifications are set forth below and are part of our Proposal. In addition, we have included some additional terms and conditions, which are also included as part of our Proposal. Should there be a conflict between the terms and conditions of the various documents the order of precedence will be this Addendum, followed by your Bid. Please note that if any of the terms or clarifications are inconsistent with Florida law or otherwise unacceptable to you, Xerox agrees to negotiate a reasonable alternative that is acceptable to both parties. Our team is also prepared to discuss the Xerox Proposal in greater detail and, if required, adjust our offering based on your final requirements, which may include a modification to our proposed equipment, support services, terms and conditions, and/or price offering. The Xerox Addendum expressly proposed clarifications or modifications to four provisions of the General Terms and Conditions. Paragraph 1(g), set forth in full above, contains PCS's standard freight terms and describes the process by which a vendor may take exception to those terms: exceptions must be clearly stated in the proposal, and the purchasing department will determine whether the exceptions constitute grounds for rejecting the vendor's proposal. The Xerox Addendum proposed to transfer to PCS the cost of any "non-standard delivery or removal expenses, such as additional costs where additional time or resources are required to disassemble equipment due to lack of adequate facility access, or the need to use stair creepers or cranes to deliver equipment to upper floors of buildings.3 Ms. Pomerantz justified this variance by asserting that the 2007 RFP was silent regarding the issue of "non- standard delivery", and that Xerox was merely offering a clarifying solution to this problem. Mr. Lindemann believed this clarification to be salutary, based on disputes PCS has had with its current vendor, IKON, regarding unusual delivery issues. Paragraph 1(g) of the General Terms and Conditions specifically allowed the vendor to propose exceptions to the standard freight terms, provided those exceptions were clearly stated and the vendor understood that its exceptions could be grounds for rejection of its proposal. Thus, it is found that the Xerox Addendum did not materially deviate from the provisions of the RFP as to this variance. The Xerox Addendum also proposed modification of paragraph 11 of the General Terms and Conditions, which states that PCS has "sole and exclusive property" rights to any discovery, invention or work product produced under the contract. Xerox proposed that any work developed under this contract would be of a generic nature and would remain the sole property of Xerox. Mr. Lindemann reasonably opined that this was not a material deviation because there was no intellectual property involved in this RFP. The Xerox Addendum did not materially deviate from the provisions of the RFP as to this variance. The Xerox Addendum proposed modification of paragraph 41 of the General Terms and Conditions. Paragraph 41 provided that unless otherwise specified in the Special Conditions, all items requested "must be new, the latest model manufactured, first quality, carry the manufacturer's standard warranty and be equal to or exceed the specifications" listed in the RFP. In this instance, the Special Conditions did provide otherwise. Section 4.3.1 of the Program Specifications provided, in relevant part, that vendors "may propose all used, all new or a combination of new and used equipment, but all equipment must meet the minimum standards outlined later in this section. To assure ease of operation for end users, if used equipment is proposed it should all be of the same brand and model within any given Group of copiers, within any given facility." The Xerox Addendum simply provided clarification regarding the company's terminology for its equipment. The equipment provided by Xerox would be either "Newly Manufactured," "Factory Produced New Models," or "Remanufactured," internal Xerox distinctions regarding the use of new, reconditioned or recycled components, and Xerox disclaimed any intent to use reconditioned, recycled, refurbished or used equipment as defined by industry standard. In this instance, Xerox submitted a clarification that did not deviate from or attempt to modify the Program Specifications. The Xerox Addendum proposed modification of paragraph 44 of the General Terms and Conditions, the limitation of liability provision, which provided: The bidder guarantees to save [PCS], its agents and employees, harmless from liability of any nature or kind for use of any copyrighted or non-copyrighted materials, secret process, patented or unpatented inventions, articles or appliances, furnished or used in performance of the contract for which the contractor is not the patentee, assignee or licensee. The Xerox Addendum to paragraph 44 provided as follows: Xerox agrees that it will indemnify the Board from all copyright and patent information that is included in Xerox- branded equipment/software. However, Xerox will not indemnify the Board, its directors, officers, employees, volunteers, and agent [sic] for any patent infringement caused by complying with the Board's requirement to use, or the Board's use of, the Xerox- branded/supplied equipment with equipment or software not provided by Xerox. Mr. Lindemann testified that this modification of the limitation of liability provision would most likely require PCS to purchase additional contingent liability insurance, which would be a cost essentially passed on from Xerox to PCS. It is found that the Xerox Addendum materially deviated from the provisions of the RFP as to this variance. The Xerox Addendum proposed a second limitation of liability provision in the section titled "Other Xerox Service Terms," which was essentially a list of standard terms and conditions that Xerox proposed to take precedence over similar provisions in the 2007 RFP. This second limitation of liability proposal provided as follows: Excluding personal injury (including death), property damage, and intellectual property indemnification on Xerox branded equipment, Xerox will not be liable to you for any direct damages in excess of $100,000 or the amounts you've paid to Xerox, whichever is greater. Neither party shall be liable to the other for any special, indirect, incidental, consequential or punitive damages arising out of or relating to this Agreement, whether the claim alleges tortious conduct (including negligence) or any other legal theory. Any action you take against Xerox must be commenced within two (2) years after the event that caused it. Ms. Pomerantz testified that when she read the RFP she focused on the indemnification language in paragraph 44 of the General Terms and Conditions regarding copyright and patent issues. She thought the RFP was silent on broader indemnification issues, and she sought to clarify it with this proposed language. Mr. Lindemann testified that the $100,000 limitation of liability could result in costs to PCS in the event of a judgment against PCS and might require the purchase of additional liability insurance. Mr. Lindemann believed this proposed limitation on liability was a material deviation and formed the basis for his request to Xerox to withdraw the Addendum. Paragraph 31 of the Standard Terms and Conditions states: "A Bidder who substitutes its standard terms and conditions for the district's, or who qualifies its bid in such a manner as to nullify or limit its liability to the district will be considered nonresponsive." (Emphasis added) It is found that the Xerox Addendum materially deviated from the provisions of the RFP as to this variance. 34. Sections 4.3.4, 5.3.2, and 5.3.13 of the Program/Equipment Specifications related to the vendors' cost proposals provide: 4.3.4 Whatever type of pricing methodology is proposed, it shall include all costs associated with the administration of the service, including, but not limited to: all imaging devices, any peripheral equipment (file servers, etc.), delivery, removal, installation, training, dedicated technician(s), all supplies needed to operate the imaging devices except paper, delivery of supplies and removal of the equipment upon termination of this contract. * * * 5.3.2 Pricing should include all costs associated with the administration of the service, including, but not limited to all imaging devices, delivery, removal, installation, training, certified technicians and all supplies except paper needed to operate the imaging devices. * * * 5.3.13 Pricing must include all costs associated with the administration of the service, including, but not limited to all copier devices, delivery, removal, installation, training, certified technician(s), all supplies except paper, end-user training and semi-annual customer satisfaction surveys. The three quoted provisions state that price proposals must include all costs associated with the administration of the service in question, except for paper, delivery of supplies, removal of equipment upon contract termination, end user training, and customer satisfaction surveys. The Xerox Addendum sets forth a monthly minimum and cost-per-copy charge that would cover standard equipment, supplies, maintenance, delivery and removal, installation and user training, but would require PCS to pay for "optional accessories," "non-standard operating supplies," "excess rigging" needed due to inadequate site access or the need to use stair creepers or cranes to install or remove equipment,4 overtime service coverage, and expenses associated with site preparation. The Xerox Addendum attempted to vary the quoted Special Conditions that require the vendor's price to include all costs associated with delivery, removal, and installation and, thus, materially deviated from the provisions of the RFP. Sections 4.7.4 and 4.7.5 of the Program Specifications required the vendor to "provide and pay for all material, labor, tools, transportation and handling, and other facilities necessary for the furnishing, delivery, assembly plus inspection before, during and after installation of all items specified herein." The Xerox Addendum to Sections 4.7.4 and 4.7.5 attempted to limit Xerox's obligation to inspect the devices by stating that they are "deemed accepted" upon installation unless PCS specifically requires an inspection. It is found that the Xerox Addendum materially deviated from the provisions of the RFP as to this variance. Section 4.17.1 of the Program Specifications required acceptance testing for each imaging device and accessory, including a period of four consecutive business days, each containing seven hours of operational use time, in which the equipment maintains a 95 percent level of performance. The Xerox Addendum to Section 4.17.1 attempted to limit Xerox's obligation to inspect the devices by stating that they are "deemed accepted" upon installation unless PCS specifically requires an inspection. It is found that the Xerox Addendum materially deviated from the provisions of the RFP as to this variance. Section 4.10.2 of the Program Specifications provided requirements regarding service calls and response times. This condition defines "response time" as the interim between the user's call to the repair office and the appearance of a certified technician on-site who is prepared to effect repairs. Section 4.10.2 provides that the response time cannot exceed four hours. PCS would have the option of charging the contractor $50.00 per failure to meet this four-hour response time requirement. The Xerox Addendum proposed that service response times be averaged quarterly according to a formula by which "target response time" would be divided by "average service response time," which is measured by dividing the sum of all service call response times during the quarter by the total number of service calls. Xerox proposed that the $50.00 charge be imposed based upon Xerox's failure to meet "the 90-day 4 hour average unit response time commitment." IKON also proposed to calculate the response time using a quarterly average, providing for an average response time "of 2 to 6 hours for all customer service calls located within 30 miles of an IKON service center, and 4 to 8 hours for all customer service calls located 30 miles or more from an IKON service center." IKON's proposal did not clearly state how far IKON's nearest service center is located from any Pinellas County school site. Another section of IKON's proposal discusses the company's recent consolidation of its "customer care centers," which "provide direct customer support" and house "the field service call center and inside sales function for a geographical region," into four central locations, the closest to Pinellas County being in Atlanta, Georgia. In this instance, both Xerox and IKON have proposed material deviations from the RFP requirement. Section 4.10.2 of the Special Conditions set forth a simple response time requirement that PCS itself could monitor and enforce without input from the vendor. Both Xerox and IKON attempted to substitute complex formulas arriving at quarterly averages for response time. IKON's proposal further attempted to make its compliance with the four hour response time requirement contingent upon the location of IKON's service centers. Section 4.10.3 of the Special Conditions requires a guaranteed uptime of 95 percent per machine for any 90-day period, and further requires that machines failing to maintain 95 percent uptime must be removed and replaced with an identical or comparable model at no cost to PCS. The Xerox Addendum announced an uptime objective of maintaining an average 95 percent equipment uptime performance based on a three-month rolling average, a variation in the wording of Section 4.10.3 that does not materially change the RFP requirement. Xerox also offered slight variations in the definition of "downtime" that are in the nature of clarifications rather than amendments to Section 4.10.3. The Xerox Addendum also contained 12 "Other Xerox Service Terms," essentially Xerox's standard terms and conditions dealing with service guarantees, personnel, substitution of equipment or software, risk of loss for equipment, treatment of confidential information, compliance with laws, vendor liability for customer-supplied items, the limitation of liability provision discussed above, force majeure, payment upon 45 days of invoice, breach of contract and remedies thereto, and a procedure for amendment of the contract. The 2007 RFP's General Terms and Conditions contain requirements for breach of contract, limitation of liability, standards of conduct for vendor personnel, and equipment substitution. Thus, the Xerox Addendum violated the following language in paragraph 31 of the Standard Terms and Conditions: "A Bidder who substitutes its standard terms and conditions for the district's, or who qualifies its bid in such a manner as to nullify or limit its liability to the district will be considered nonresponsive." In summary, the Xerox Addendum materially deviated from the requirements of the 2007 RFP in the following ways: it varied from the limitation of liability requirements of paragraph 44 of the General Terms and Conditions; it offered a cost proposal that was not all-inclusive, in contravention of Sections 4.3.4, 5.3.2, and 5.3.13 of the Program Specifications; it attempted to limit inspections after installation and acceptance testing, in contravention of Sections 4.7.4, 4.7.5, and 4.17.1 of the Special Conditions; it varied from the response time requirements of Section 4.10.2 of the Special Conditions; and it attempted to substitute several of Xerox's standard terms and conditions for those of PCS, in violation of paragraph 31 of the General Terms and Conditions. After learning of the Xerox Addendum from Mr. Castle on January 30, 2007, PCS reviewed the Addendum and concluded that it included material deviations to the terms and conditions of the RFP solicitation and that either the Addendum or Xerox's bid must be withdrawn. Negotiations commenced between PCS and Xerox. On February 2, 2007, Xerox offered PCS a revised Addendum. PCS rejected the revised Addendum and informed Xerox that the Addendum must be withdrawn in its entirety. On February 5, 2007, Xerox notified PCS by letter that it was withdrawing the Addendum from its proposal. Also on February 5, 2007, PCS posted its notice of intent to award the contract to Xerox. IKON's protest complained that Xerox's letter did not accomplish a complete withdrawal of the deviations included in the Xerox Addendum, because many of those deviations remained in the main body of the Xerox proposal. As noted above, Xerox incorporated its clarifications in the main body of its proposal in those places where the 2007 RFP requested a response from the vendor. These clarifications were included in Section 7.1.4 of the Xerox proposal, "Proposed Work Plan, Transition Plan." When Xerox withdrew its Addendum, it did not also submit a revised proposal that deleted the Addendum provisions from those places where they had been incorporated into the main body of the proposal. Nevertheless, both Xerox and PCS understood that withdrawal of the Addendum accomplished the complete withdrawal of the materials included in the Addendum, including where they were incorporated into the main body of the Xerox proposal. This understanding was reasonable under the circumstances. However, IKON raises a related objection that is more pertinent. Xerox was allowed to withdraw its Addendum, and then was awarded the contract. Thus, the winning proposal is different than the proposal that was reviewed and scored by the PCS focus group. IKON argues that it is very likely that Xerox would not have passed the 80-point threshold without the Addendum provisions that were incorporated into the main body of the proposal. Mr. Lindemann of PCS believed that Xerox's score would probably have been higher without the Addendum provisions. The salient point is that both sides are free to speculate about what the score of the winning bid might have been, because PCS proposes to award a contract on a proposal that was never reviewed or scored in the manner prescribed by the 2007 RFP. PCS argues that the withdrawal of the Xerox Addendum was entirely in keeping with the RFP, citing paragraph 3 of the General Terms and Conditions, quoted in full above and relevant portion of which provides: A bid (or amendment thereto) will not be accepted by the purchasing department after the time and date specified for the bid opening, nor may a bid (or amendment thereto) which has already been opened in public be withdrawn by the bidder for a period of sixty (60) calendar days after the bid opening date and time, unless authorized by the purchasing department. [Emphasis added] PCS contends that the emphasized language grants the purchasing department authority to allow a bidder to withdraw a portion of its bid after the bids have been opened. This is correct, if the portion in question is a timely submitted amendment to the original bid.5 In their arguments, both PCS and Xerox equate the terms "amendment" and "addendum," and assume that the Xerox Addendum could be withdrawn as an "amendment" to the Xerox proposal. However, the Xerox Addendum was not an amendment to the Xerox proposal; it was an integral part of that proposal. The Addendum did not amend anything contained in the Xerox proposal; rather, it attempted to "amend" the terms of the RFP. The underscored portion of paragraph 3 anticipates the late withdrawal of an entire bid or an amendment to a bid, not a wholesale grant of authority to the purchasing department to allow a bidder to save a nonresponsive proposal by withdrawing the objectionable provisions. PCS argues that Xerox was given no economic or competitive advantage in being allowed to submit and then withdraw its Addendum. Ms. Pomerantz testified that none of the items in the Addendum would have affected the price bid by Xerox, because they were essentially items of overhead that Xerox cannot "cost out" to include in a price proposal. However, the testimony by Mr. Lindemann convincingly made the point that some of the variations from RFP terms offered by Xerox would affect PCS's costs regardless of their impact on Xerox's price proposal. Passing on costs to the agency that have been absorbed by IKON and the other vendors in their proposals works to Xerox's economic advantage and to the detriment of PCS. Xerox had an obvious competitive advantage in being granted the opportunity to amend its proposal after the substantive proposals were opened and evaluated and the price proposals had been opened and posted. Xerox was also granted the option, afforded to no other bidder, of simply declining to withdraw its Addendum and thereby walking away from the procurement after submitting a proposal that, under the terms of the RFP, is supposed to bind the vendor for a period of 90 days. Subsection 120.57(3)(f), Florida Statutes, provides, in relevant part: In a protest to an invitation to bid or request for proposals procurement, no submissions made after the bid or proposal opening which amend or supplement the bid or proposal shall be considered. . . . The PCS rules and RFP provisions, correctly understood, do not contravene this statutory requirement. They grant the purchasing department the flexibility to allow a bidder, under special circumstances, to withdraw from a given procurement after submitting a bid, and they allow PCS to waive slight variations or minor irregularities in a bid. To the extent that PCS interprets its rules and RFP to allow Xerox to substantially amend its proposal after the opening,6 as occurred in this procurement, then PCS has violated its governing statutes in a fashion that is clearly erroneous, contrary to competition, arbitrary, or capricious. PCS argues that even if the Xerox Addendum contained material deviations, the RFP and PCS's rule permitted bidders to submit addenda with material deviations. PCS based this argument on that portion of Section 3.1 of the Special Conditions stating that bidders "may propose whatever program they feel best meets the district's needs and are not restricted in any way other than to meet the basic equipment specifications, terms and conditions outlined in this bid." When read within the context of the Special Conditions in their entirety, this language clearly contemplates allowing the vendors to offer creative solutions within their field of substantive expertise, i.e., the establishment of a comprehensive copier program countywide. It was rational for the drafters of the RFP to assume that a company such as Xerox enters the process in possession of more knowledge and experience in the field of copier installation, service, and repair than the school district possesses. PCS conducted focus groups to determine the top priorities of the school personnel who use the copiers and presented the bidders with specifications broad enough to allow maximum flexibility in crafting proposals responsive to the listed priorities. However, there are rarely "creative solutions" to boilerplate RFP terms such as shipping, limitation of liability, the requirement that cost proposals be all-inclusive, inspection of equipment prior to acceptance, and response time for repairs. These are areas in which the purchasing department of PCS may be presumed to have at least as much expertise as Xerox or IKON. Variations from the RFP's requirements proposed by a bidder regarding these items are likely to be self-serving efforts to protect the bidder's interests or pass on costs to the agency. Paragraph 31 of the General Terms and Conditions recognizes this reality by stating that a bidder that substitutes its standard terms and conditions for those of PCS will be considered nonresponsive.7 PCS is correct that the "Integrity of Bid Documents" paragraph of Section 1 of the Special Conditions of the 2007 RFP allows bidders to submit addenda that clearly state "modifications or alterations that a bidder wishes to propose." However, contrary to PCS's treatment of Xerox in this procurement, the RFP does not state that the bidder may propose modifications of the RFP terms without risk.8 The cited paragraph clearly warns bidders that proposed modifications or alterations constitute grounds for rejection of a bid. The paragraph does not, and under Subsection 120.57(3)(f), Florida Statutes (2006), could not, state that bidders will be given the opportunity to withdraw those portions of their proposals deemed nonresponsive after bid opening. PCS also emphasizes the first sentence of the "Acceptance of Vendor Responses" paragraph of the Special Conditions: "The purchasing department reserves the right to accept proposals from multiple vendors, and to accept or reject portions of a proposal based upon the information requested." However, the next sentence of that paragraph states that the remedy is not after-the-fact withdrawal of the rejected portion of the proposal, but rejection of the proposal: "Vendors may be excluded from further consideration for failure to fully comply with the requirements of this RFP solely at the purchasing department's discretion." Both PCS and Xerox raised the issue of the 2006 RFP in an effort to show that IKON was now attacking a process from which it earlier benefited. In the 2006 procurement, IKON was allowed to withdraw portions of an addendum after a competitor filed a protest. PCS ultimately rejected all of the 2006 Proposals because of confusion on the part of the bidders, partly related to the fact that IKON was allowed to withdraw its addendum but a competitor was not given the same opportunity. PCS then issued the 2007 RFP in December 2006 to procure the same copy services sought by the 2006 RFP. The 2006 RFP is relevant only to show that PCS has allowed the withdrawal of amendments in at least one previous procurement, a moot point because PCS has freely stated its position that it has the authority to reject an addendum without rejecting the entire proposal. Xerox's original proposal, including the Addendum, was nonresponsive for the reasons set forth above. PCS's effort to save Xerox's low bid by allowing it to withdraw the Addendum violated Subsection 120.57(3)(f), Florida Statutes (2006), as well as the terms of the RFP. The remaining question is whether IKON's proposal was responsive and may therefore be awarded the contract. As already found above, IKON's proposal materially deviated from Section 4.10.2 of the Special Conditions by substituting a complex formula for the simple response time requirement of the RFP and by making compliance with the four- hour response time requirement contingent upon the location of IKON's service centers.9 Section 7.1.3 of the Contractor Response portion of the 2007 RFP, "Proposed Models and Equipment Configurations," provides the following: The respondent must provide a comprehensive description of its proposed standard models and equipment configurations for each of the various grade levels (elementary, middle, high school). Consideration should be given to the stated needs of the focus groups (Section 3), particularly "ease of operation", "accessibility" to machines and "reliability". Vendors should provide detailed, technical product literature for each piece of equipment proposed including all options. The respondent should also describe what flexibility will be allowed for adding or deleting equipment as program needs change and how that will effect the amount billed according to the cost proposal plan proposed. [Emphasis added] Section 7.1.7 of the Special Conditions, "Cost Proposal," provides the following: Respondent must include a complete, detailed cost proposal which encompasses all costs associated with the proposed program. The cost proposal must allow for flexibility to add or delete equipment as program needs change. The district will not entertain any proposals to purchase or lease any equipment. [Emphasis added] IKON's proposal contained the following paragraph within its response to Section 7.1.3 of the Special Conditions: As requested by PCS in Section 7.1.7 of the Invitation to Bid, IKON's cost proposal allows for flexibility. IKON will permit PCS to add or delete equipment as PCS' needs change by permitting PCS to upgrade or downgrade equipment at the beginning or at the end of its fiscal year. Under this program, PCS may replace upgraded or downgraded equipment with additional equipment that addresses PCS' needs. Specifically, IKON will permit PCS to identify up to [three] percent of the overall equipment fleet value procured by PCS from IKON, including models and specifications that are representative of the entire fleet population, as flexible equipment that may be upgraded or downgraded at the beginning or at the end of the fiscal year, while all other equipment may be canceled only in the event of a non- appropriation or termination for cause. The flexible equipment may also be relocated or otherwise used to facilitate a rightsizing program, as directed by PCS. PCS may utilize this flexibility program in its own discretion. In no event shall either party be liable to the other party for any indirect, special or consequential damages. Xerox contends that by limiting PCS to a three percent change in the overall equipment fleet value, IKON's proposal materially deviates from Sections 7.1.3 and 7.1.7 of the Special Conditions, which required that PCS have the flexibility to increase or decrease the size of the copier fleet to meet its needs. However, Section 7.1.3 did not prescribe the amount of "flexibility" required in the vendors' bids; rather, it expressly requested the vendors to "describe what flexibility will be allowed for adding or deleting equipment." IKON's bid described the allowed flexibility as three percent of the overall equipment fleet value and was thus responsive on its face. The evidence presented at hearing was insufficient to determine whether a three percent limit would be so restrictive of PCS's needs to add or delete equipment as to render IKON's proposal nonresponsive. More problematic is the last sentence of the quoted paragraph: "In no event shall either party be liable to the other party for any indirect, special or consequential damages." Xerox cogently argues that if its own proposed limitation of liability is a material deviation, then this similar limitation of liability included in the IKON bid must also be found a material deviation. IKON responds that it is clear from the context that this limitation of liability provision, unlike that in Xerox's proposal, applies only to Section 7.1.3. For this reason, IKON contends, PCS determined that IKON's bid was responsive. IKON argues that its own limitation of liability provision is implicated only in the event that PCS requires additional equipment and that it does not limit any direct liability of IKON to PCS and concerns only a distinct class of damages: indirect, special or consequential damages. The position of the quoted sentence, at the end of the final paragraph of IKON's response to Section 7.1.3 of the Special Conditions, supports IKON's contention that the limitation of liability applies only to that section. However, the wording of the sentence ("In no event . . .") indicates a broader intended application. IKON also failed to explain why the requirement of additional equipment, and only the requirement of additional equipment, raised concerns within IKON that indirect, special or consequential damages might be claimed by either party to the contract. At best, this provision is ambiguous in the scope of its application and, in any event, seeks to limit the liability of IKON beyond the limits provided by the RFP. If Xerox's limitations of liability constitute material deviations, then so must IKON's. IKON's proposal thus contains two material deviations from the RFP, one regarding response time and one regarding limitations of liability. IKON's proposal is nonresponsive.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED that PCS enter a final order that (a) declares Xerox's bid to be materially nonresponsive and, accordingly, rescinds the proposed award to Xerox; and (b) declares IKON's bid to be materially nonresponsive and, accordingly, rejects the same. Because the choice of remedies for invalid procurement actions is ultimately within the agency's discretion, the undersigned declines to make a recommendation as to whether PCS should award the contract to the next-lowest responsive bidder or reject all bids and start over. DONE AND ORDERED this 10th day of May, 2007, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON 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 10th day of May, 2007.
The Issue The issue is whether Petitioner's bid was responsive to the Department of Health and Rehabilitative Services' Invitation to Bid 590:2248 for lease space in Lake County, Florida.
Findings Of Fact Department of Health and Rehabilitative Services issued its Invitation to Bid (ITB) No. 590:2248 for lease space in Lake County, Florida. The ITB contained bidder specifications, evaluation criteria and documentation requirements. Petitioner Kevin T. Roberts submitted a bid within the time limits of the ITB. Petitioner Roberts attended a pre-bid conference conducted by HRS. In its ITB, HRS reserved the right to reject any and all bids. The ITB required that the bid must show control of the property by the owner of record, a lease with documentation, an option to purchase with documentation, or an option to lease with authority to sublease with documentation. The ITB required that the successful bidder enter into a lease with HRS on the lease form attached to the ITB as Attachment E (Joint Exhibit 1). This lease form required exclusive-use parking spaces. The ITB required a minimum of 300 parking spaces. Petitioner was present at the pre-bid conference where the exclusive nature of parking spaces required by the bid was discussed. Petitioner's bid contains 30 exclusive-use parking spaces. The site plan of the Lake Hills Shopping Center submitted with Roberts' bid shows a total of 378 parking spaces for the entire shopping center. Approximately one-half of the space in the center is included in the bid proposal. The available parking spaces are insufficient to meet the minimum requirements of the ITB. The shopping center involved in the bid proposal has approximately 40,000 square feet of lease space which was not included in the bid proposal. Diamondhead Partnership is a partnership under the laws of the State of Florida, and Kevin T. Roberts and Thomas E. Smith are the general partners of the partnership. Diamondhead Partnership holds an option to lease and authority to sublease 45,000 square feet of the commercial space located in the Lake Hills Shopping Center. Kevin T. Roberts submitted a bid proposal in his individual name for 45,000 square feet of commercial space located in the Lake Hills Shopping Center in Eustis, Lake County, Florida. The documentation to show control of the property filed by Roberts with his bid contained a copy of Diamondhead Partnership's lease option. Thomas E. Smith, the other general partner in Diamondhead Partnership, submitted a bid proposal in his individual name for the same 45,000 square feet of commercial space located in the Lake Hills Shopping Center in Eustis, Lake County, Florida, and relied on the same copy of Diamondhead Partnership's lease option. Kevin T. Roberts does not have control of the property that is the subject of his bid proposal. The ITB requires that the name of the entity submitting the bid be identified and, if a partnership, that the name of the partnership be typed or stamped on the bid. Further, Roberts used his personal social security number on his bid and not the partnership's tax ID number. The ITB requires the social security number or tax ID number of the entity submitting the bid. Diamondhead Partnership, the entity with control of the property, did not file a bid in this case.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Health and Rehabilitative Services enter a Final Order rejecting the bid of Kevin T. Roberts as nonresponsive to ITB 590:2248. DONE and ENTERED this 28th day of January, 1991, in Tallahassee, Florida. DIANE K. KIESLING 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 28th day of January, 1991. APPENDIX TO RECOMMENDED ORDER The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted in this case. Specific Rulings on Proposed Findings of Fact Submitted by Respondent, Department of Health and Rehabilitative Services Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1(1); 3-17(2-16); and 19(19) Proposed findings of fact 2 and 18 are irrelevant. COPIES FURNISHED: Frances S. Childers, Assistant Counsel HRS District 3 Legal Office 1000 N.E. 16th Avenue Gainesville, FL 32609 Joe A. McClain, Attorney at Law McClain, Dwyer & Sestak, P.A. Post Office Box 4 402 East Church Avenue Dade City, FL 33526 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Linda K. Harris Acting General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
Findings Of Fact During the month of March 1996, the Pinellas County School Board, pursuant to an advertised invitation for bids, (IFB), solicited bids for the construction of a new facility for John H. Sexton Elementary School (Sexton school). Each party submitting a bid was required to do so on a bid proposal form which was contained in the bid documents prepared by the project architect, Mr. Hoffman, and furnished to each prospective bidder who requested the bid package. One section of the bid proposal form related to "dewatering" potentially required at the construction site, and consistent with that potential two sentences were contained on the bid proposal form relating to dewatering of footings and of utilities, both of which provided for election by checking of an affirmative or a negative, and both of which had been pre-checked in the affirmative by the Board. It was the position of the Board that the pre- checked sentences as to dewatering on the bid proposal form constituted an acknowledgment by each bidder that that bidder's submittal included dewatering in the base bid. In addition to the check, the dewatering section also included blanks for the insertion by the bidder of figures representing lineal feet of header pipe and unit price per foot which figure would constitute a credit given by the bidder to the Board against the total bid price if dewatering were found not to be necessary, both as to footings and to utilities. Even further, the form also contained blanks to be filled in by the bidder for unit prices to be charged the Board in the event additional dewatering was required by virtue of the Board's later inclusion in the project of additional footings or utilities. Prior to the time for bid submittal, the Board conducted a meeting of all prospective bidders at which the project was explained and bidders given an opportunity to ask questions raised by the bid package. Johnson did not ask any questions regarding dewatering or that portion of the package relating thereto. Numerous bids were submitted in response to the proposal, including those from Johnson and Ellis. By stipulation at the hearing, the parties agreed that in all ways other than in that section of the bid proposal form for this project relating to dewatering, Johnson was and is a responsive and responsible bidder, as is Ellis. The bid proposals were opened by the Board at 2:00 PM on April 11, 1996 and the base bid prices on each proposal were read aloud to all in attendance by a Board representative. The project architect was present at the opening and tabulated and reviewed the bid proposals as opened. Johnson submitted the lowest base bid with a price of $7,965,000. The next lowest bid was that of Ellis, whose base bid price was $7,945,200. At the time of opening, no Board representative indicated anything was wrong with Johnson's bid Mr. Hoffman, the project architect, immediately noticed that Johnson had altered the Board's pre-checked bid proposal form by striking out the pre- checked "is" space regarding inclusion of dewatering in the base price of the two dewaterings, and making an X in each of the "is not" spaces. Mr. Hoffman considered that alteration by Johnson as a material alteration of the Board's solicitation which rendered Johnson's bid non-responsive. It must be noted that each change bears the initials, R. Y. Reza Yazdani is Johnson's president who initialed the changes and signed the bid proposal form for the company. In addition, Johnson also inserted a "0" in those spaces which dealt with amount of credit and cost of additional dewatering in the event additional work is required by the Board. In that regard, Hoffman opined that had Johnson not changed the check marks, but inserted the "0" figures as it did, the bid would have been responsive and Johnson would still have been lowest responsive bidder. The reason for this is that the bid form specifically notes that "the unit costs described in A & B above shall in no manner influence the School Board's selection of a firm to whom to award the Contract." The Board now recognizes that there is no part "B", as referenced in the proposal form. Since the "0's" would not influence the selection, use of an unmodified Board form, along with the lowest submitted base price would, in Hoffman's opinion, probably have meant that Johnson would have been awarded the contract. Johnson's representative, Mr. Mohme, who drafted the company proposal, specifically indicated he did not believe dewatering was a potential in this project. He recognized that such dewatering as was necessary was required by other provisions in the project specifications and he could not figure any way to recognize this and yet accurately reflect his belief that dewatering would not be necessary, other than to strike the pre-checked block and insert the check in the alternative block. He felt that by doing so, he was more accurately reflecting Johnson's bid. This reasoning is rather obscure. By letter dated April 12, 1996, written to the Board after the bids were opened, Mr. Mohme reiterated Johnson's position that dewatering is not necessary on this project, but further stated that if dewatering were to be necessary, Johnson would do so solely at its own risk and without any risk of additional cost to the Board. Bids may be clarified by a bidder, but such clarification must take place before the bids are opened. Bids may not be modified after bid opening. Before that letter was written, however, when the bids were opened and Mr. Hoffman observed what he considered was Johnson's alteration of the bid form, Hoffman consulted with a representative of the Board's purchasing department, Ms. Maas, who also reviewed Johnson's bid. Ms. Mass was of the opinion that Johnson may have attempted to qualify its bid, and she and Mr. Hoffman thereafter met with Mr. Rivas, the Board's director of facilities design and construction, to explain the problem. Mr. Rivas took the problem to two other Board personnel to see if there were some way Johnson's bid could be deemed responsive so that the Board could benefit by Johnson's low bid price. Within the context of those aforementioned discussions, Hoffman took the position that the alteration might leave the Board open to a possible change order and additional liability if dewatering were to be required and the Board had accepted Johnson's bid indicating that process was not included in the base price. Mr. Rivas, after consulting with the Board's attorney, also concluded that Johnson's alteration expressly excluded dewatering as an included factor and its exclusion constituted a serious and material deviation from the Board's solicitation. It was deemed material in that the deviation apparently gave Johnson a competitive advantage over other bidders who did not amend the form. This appears to be a valid conclusion and is adopted herein. The decision to recommend rejection of Johnson's bid and acceptance of Ellis's as the lowest responsive bid was ultimately reached by the Board's administrative staff. The Ellis bid was responsive to the solicitation whereas the determination was made that Johnson's was not responsive because of the alteration. It was not the actual act of alteration that caused that determination but rather the potential effect of the alteration. This was consistent with long standing Board policy not to accept a bid which does not conform to a bid solicitation and not to accept bids from bidders who alter the Board's bid proposal form or otherwise attempt to qualify their bids. It is the opinion of the Board personnel that such consistency in bidding procedure has resulted over time in more qualified bidders submitting bids for Board work which, in turn, has resulted in more competitive prices for the work let for bid. This is a reasonable policy. Mr. Gottschalk, Johnson's expert architect, who has designed schools for the Board, offered an alternative disposition to this dilemma. While admitting that Johnson's shifting of the risk of loss as a result of possible dewatering was a material matter, he suggested the Board could have disregarded the dewatering clause on every submittal and thereafter awarded the contract to Johnson, the lowest bidder, whose bid was responsive to the solicitation except for the dewatering provision. Recognizing this solution would have placed each bidder on an equal footing and allowed award to the lowest bidder at a substantial savings to the Board, he nonetheless also understood the decision made by Mr. Hoffman and the Board staff here and could not fault it. He agreed that reasonable men could differ on the issue of responsiveness here and how to deal with it. It is so found. After a review of the evidence submitted, including the testimony indicating the remoteness of the likelihood that extensive dewatering would be required, there appears to be no evidence that the Board, or its staff, acted dishonestly, fraudulently, illegally or arbitrarily in rejecting Johnson's bid on this project and recommending award to Ellis.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Pinellas County School Board enter a final order denying and dismissing G. H. Johnson Construction Company's protest and awarding a contract for the construction of Sexton Elementary School to Ellis Construction Company, Inc. DONE and ENTERED this 8th day of May, 1996, in Tallahassee, Florida. ARNOLD H. POLLOCK, 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 8th day of May, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 96-1942BID To comply with the requirements of Section 120.59(2), Florida Statutes (1993), the following rulings are made on the parties' proposed findings of fact: Johnson's Proposed Findings of Fact. 1.-5. Accepted and incorporated herein. Accepted. Accepted but not a proper Finding of Fact. More a restatement of and comment on testimony. Rejected. Accepted but not a proper Findings of Fact. More a restatement of and comment on testimony. &11. Accepted. Accepted and incorporated herein. First sentence accepted as a literal statement of what appears in the specifications. Second and third sentences accepted but not probative of any material issue of fact. Accepted and incorporated herein. First sentence accepted. Balance not Finding of fact but argument. Ellis' Proposed Findings of Fact. 1.&2. Accepted and incorporated herein. 3.-6. Accepted. 7.-10. Accepted and incorporated herein. 11.-15. Accepted and incorporated herein. 16. Accepted but word "certain" is changed to read "likely." 17.-21. Accepted and incorporated herein. 22. Accepted and incorporated herein. 23.&24. Accepted. 25.&26. Accepted and incorporated herein. 27.-29. Accepted. Accepted and incorporated herein. Not relevant to any material issue of fact. COPIES FURNISHED: Jawdet I. Rubaii, Esquire Clearwater Executive Suites, No. 213 1345 South Missouri Avenue Clearwater, Florida 34616 John W. Bowen, Esquire Pinellas County School Board 301 4th Street S.W. Largo, Florida 34649-2942 E. A. Mills, Jr. Esquire Dale W. Vash, Esquire Fowler, White, Gillen, Boggs, Villareal and Banker, P.A. 501 East Kennedy Boulevard Post Office Box 1438 Tampa, Florida 33601 Pinellas County School Board 301 4th Avenue, S.W. Largo, Florida 34649-2942
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, I make the following findings of fact: The School Board of Palm Beach County advertised for sealed bids for a project consisting of structural modifications and reroofing at Atlantic Community High School, project no. 000881600. All bidders were required to be prequalified by the School Board prior to the bid opening and had to exhibit evidence that similar work of equivalent magnitude had been accomplished prior to this bid. Language in the bid advertisement notified potential bidders that the School Board reserved the right to waive minor informalities in the bids, or to reject all bids. On April 5, 1989, the bids for the Atlantic Community High School (Atlantic) project were opened and a tabulation performed. All bidders had been prequalified by the School Board and had properly submitted the required bid bond. The results of the bid tabulation established GRI as the lowest bidder, Anderson second, and Milne & Nicholls third. Only three bids were timely received. The amount indicated on the GRI bid was stated only in numbers, not written in words. The written numbers, however, were clearly noted and GRI has, at all times, stated it intends to be bound by the figures listed. No error in the amount has been suggested. On April 5, 1989, Dr. Louwers, as contract administrator for the School Board, notified GRI that its bid for the Atlantic project had been deemed nonresponsive. The basis for this determination was GRI's failure to submit the bid book intact, failure to submit bid Form 00420 at the time of the bid opening, the lack of a warranty letter at the time of the bib opening, and the failure to state the price of the bids in words. GRI sought review of the determination that it had been nonresponsive and an informal hearing was conducted on April 11, 1989. As a result of that hearing, GRI'S bid was deemed responsive and all bidders were notified. Thereafter, Anderson timely challenged the intended bid award to GRI. At the time of the bid opening, GRI did not submit its bid book intact. Instead, GRI submitted the proposal form with the amounts indicated for each section together with the bid bond. The bid proposal form required the bidders to indicate an amount in several categories. These categories included a base bid and six alternates numbered 1 through 6. The amounts listed by all bidders were tallied and are specified on joint exhibit no. 10. GRI's bid was the lowest of the three bids received. Once the bids were opened, and it was determined who the three low bidders were, GRI immediately submitted its list of major subcontractors on Form 00420. Within 24 hours of the bid opening, GRI submitted its list of subcontractors and suppliers, Form 00430. Pertinent to this case are the following provisions found in the Instructions to Bidders, section 00100 of the bid package: BIDDING PROCEDURES: 3.01 All bids must be prepared using the forms contained in these specifications and submitted in accordance with the Instructions to Bidders. * * * 3.05 Preparation and Submission of Bid Proposal Form: Each bidder shall use Proposal Form contained in these specifications, indicate his bid prices thereon in proper spaces, for the entire work and for the alternates. Proposal Forms shall remain attached to the specifications.... Each proposal shall specify a unit price written in ink in both words and figures, * * * (d) The specification book is to be left INTACT, the cover signed by the Contractor, the proposal bid guarantee (Certified Check or Bid Bond) to be signed and filled out in the specification book which will be enclosed in a sealed envelope which shall be marked: * * 3.10 Subcontractors: At the time of the bid opening each bidder submitting a bid shall have in his possession a written list of the major subcontractors; namely, structural metal work and metal covering, structural manufacturer, lightweight insulating concrete, plumbing, HVAC, and electrical, whom he proposes to use on this work. The three (3) apparent low bidders will be required to submit Form 00420 (list of major subcontractors) to the Owner at the time of the opening of the bids.... Within 24 hours of the bid opening, the apparent low bidder shall submit Form 00430 (list of subcontractors and suppliers), completed in full to the Owner. Failure to submit these lists within the time period specified herein shall result in a non- responsive bid. * * * 6. REJECTION OF BIDS: 6.01 The bidder acknowledges the right of the Owner to reject any or all bids and to waive any informality or irregularity in any bid received. In addition, the bidder recognizes the right of the Owner to reject a bid if the bidder failed to furnish any required bid security, or to submit the data required by the bidding documents, or if the bid is any way incomplete or irregular; to reject the bid of a bidder who is not in a position to perform the contract; and to re- advertise for other or further bid proposals. In addition to the foregoing, the apparent three lowest bidders were required to submit certifications to verify information regarding the roofing system included in their proposals. These certifications included: a certification verifying that the pre-engineered metal roofing system had been tested and approved by Underwriter's Laboratory as Class 90; a dealer certification verifying the supplier is a manufacturer's authorized and franchised dealer of the roofing system to be furnished including the date on which authorization was granted; an installer certification specifying that the installer had been regularly engaged in the installation of pre-engirieered metal buildings of same or equal construction to the system proposed including a list of successful installations performed within 200 miles of West Palm Beach, Florida; and a manufacturer's certification verifying that the manufacturer will provide warranties in accordance with the bid specifications. These certifications were to be provided with Form 00430, within 24 hours of being determined an apparent low bidder. GRI did not provide the certifications identified in paragraph 8 within 24 hours of April 5, 1989; however, all certifications were submitted prior to the final hearing in this cause. GRI was not deemed responsive by School Board personnel until after the informal hearing conducted on April 11, 1989. The letter to GRI notifying it of the results of the informal hearing was dated April 19, 1989. The issue of the certifications, therefore, did not arise until Anderson sought to challenge the decision reached by the informal hearing (that GRI was responsive). Anderson submitted all data required by the bid package at the time of the bid opening or within 24 hours of being determined an apparent low bidder. Anderson submitted the bid package intact and complete. According to bark Lottes, the project architect for the Atlantic bid, the manufacturer's certification required to be submitted within 24 hours of the the bid package was to assure the School Board that it would obtain the warranty designated in the bid specifications. Typically, a warranty is not issued until the work is completed. The purpose of the manufacturer's certication is to verify that the warranty, when issued, will be of the type and terms designated by the bid package. No structural deck replacement will be required for the Atlantic job. A general contractor would be required to perform structural deck replacement. GRI listed a general contractor, Mancini Building, among its list of subcontractors and suppliers. The roofing system proposed by GRI is to be manufactured by Varco- Pruden. The installer to perform the structural metal work for the roofing system proposed by GRI is Bretsnyder Netals, Incorporated (Bretsnyder). Bretsnyder has prior experience with metal roofs of the type designated by this bid project. Varco-Pruden has acknowledged Bretsnyder to be an authorized installer of the Varco-Pruden roofing system proposed by GRI. Varco-Pruden has provided a certification that it will warranty the roofing system pursuant to the bid specifications. GPI is registered as a roofing contractor with Gregg Wallick as its licensed roofing contractor. Anderson is a registered general contractor.
Recommendation Based on the foregoing, it is RECOMMENDED: That the School Board of Palm Beach County enter a final order awarding the bid for the Atlantic project, project no. 000881600, to GRI, Inc. as the lowest responsive bidder. DONE and ENTERED this 23rd day of June, 1989, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division ofAdministrative Hearings this 23rd day of June, 1989. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 89-2175BID Rulings on the proposed findings of fact submitted by Anderson: Paragraphs 1 through 3, 5, 6, 7, and 8 are accepted. Paragraph 4 is rejected as irrelevant or immaterial. Whether or not a general contractor is required to perform portions of the work for the Atlantic project is irrelevant to the resolution of the issue in this case. First, because a general cortractor was listed among GRI's subcontractors (the list of which was timely filed) and second, because the weight of the testimony established the project to be roofing in nature with no structural work required. Paragraph 9 is rejected as argument or unsupported by the weight of the evidence in this cause. Rulings on the proposed findings of fact submitted by the School Board: Paragraphs 1 through 15 are accepted. Paragraph 16 is rejected as irrelevant. Rulings on the proposed findings of fact submitted by GRI: Paragraphs 1 through 4 are accepted. Paragraph 5 is accepted to the extent that it states the GPI bid to be lowest; however, as to the exact amount of the difference, it is rejected as contrary to the weight of the evidence. Paragraphs 6 through 8 are accepted. Paragraph 9 is rejected as argument. To the extent that the paragraph is addressed in findings of fact paragraphs 4 and 5, it is accepted. Paragraph 10 is accepted. Paragraph 11 is rejected as conclusion of law or argument except as provided in paragraphs of the preliminary statement, together with paragraphs 6, 8, 9, 12, and 13. COPIES FURNISHED: Jack S. Cox Merola, McCarthy & Cox, P.A. 4114 Northlake Boulevard Suite 301 Palm Beach Gardens, Florida 33410 Robert A. Rosillo Associate Counsel School Board of Palm Beach County 3323 Belvedere Road P.O. Box 24690 West Palm Beach, Florida 33416-4690 Nathan E Nason Gary N. Gerson Nason, Gildan, Yeager & Gerson, P.A. Post Office Box 3704 West Palm Beach, Florida 33402 Thomas J. Mills Superintendent of Schools School Board of Palm Beach County 3323 Belvedere Road P.O. Box 24690 West Palm Beach, Florida 33416-4690
The Issue Whether the School Board of Seminole County's, notice of intent to award Bid No. 102589, for air filter maintenance, service, and replacement to Filter Service and Installation Corporation was clearly erroneous, contrary to competition, arbitrary, or capricious.
Findings Of Fact The Seminole County School District is a political subdivision of the State of Florida, created by Article IX, Section 4, Florida Constitution. The powers and duties of the school board are enumerated in Chapter 230, Florida Statutes. The Superintendent of the Seminole County School District is a constitutional officer, whose office is created by Article IX, Section 5, Florida Constitution. The powers and duties of the Superintendent are enumerated in Chapter 230, Florida Statutes. The Seminole County School Board issued a call for bids for air filter maintenance service and replacement under Bid No. 102589 on September 14, 1998. Bids were submitted by Con-Air Industries, Inc., the protester, and Filter Service & Installation Corp., the apparent low bidder. The bids were opened on September 28, 1998, and were evaluated. Each bidder was determined to be a responsible bidder to the CFB. Intervenor submitted the lowest numerical bid. On October 1, 1998, Respondent's staff recommended that the CFB be awarded to Intervenor. The decision to recommend the award of the filter service Bid No. 102589 complies with the bid specifications. The instructions to bidders, as stated on the Proposal Form, direct a bidder to total lines A-C and to enter the total at line D. The instructions state that a bidder is not to include the cost as stated at lines E & F in the total. The proposal form then states that the total cost, as stated at line D shall be used to determine the apparent low bidder. The bid proposal document stated that the total of the prices stated at items A, B, and C would be used to determine the lowest numerical bid. The bid proposal document stated that the Respondent reserves the right to negotiate unit cost proposed for item E. The line D total submitted by the Petitioner is stated at $3.45. The line D total submitted by the apparent low bidder, is stated at $2.60. Intervenor submitted the lowest numerical bid. Intervenor does business under the fictitious name Filter Sales & Service. That fictitious name has been registered with the Secretary of State for the State of Florida. Filter Service & Installation Corp., and Filter Sales & Service are one and the same. The reference by Intervenor at line F to "Per Price Sheet" and the failure of Filter Service & Installation Corp. to attach a price sheet to its proposal form is not a material deviation from the requirements of the bid specifications. The total at line D is the total used to determine the lowest bidder. Filter Service & Installation Corp. is the lowest and best bid from a responsive and responsible bidder. The Petitioner followed the procedure set forth in the bid proposal document in making a determination that the Intervenor was the lowest numerical bidder. Petitioner reserved the right to reject all bids and to waive any informalities. Petitioner failed to prove that the notice of intent to award the bid to Intervenor was clearly erroneous, contrary to competition, arbitrary, or capricious.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Respondent award the contract for filter maintenance, service, and replacement under Bid No. 102589 to the Intervenor, Filter Service and Installation Corp., as recommended by its staff. DONE AND ENTERED this 11th day of December, 1998, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 11th day of December, 1998. COPIES FURNISHED: Robert N. Hering, President Con-Air Industries, Inc. 3055 Pennington Drive Orlando, Florida 32804 Ned N. Julian, Jr., Esquire Seminole County Public Schools Legal Services Department 400 East Lake Mary Boulevard Sanford, Florida 32773-7127 Robert W. Smith, Esquire 430 North Mills Avenue, Suite 1000 Orlando, Florida 32803 Dr. Paul J. Hagerty, Superintendent Seminole County Public Schools 400 East Lake Mary Boulevard Sanford, Florida 32773-7127
The Issue Whether Respondent Department of Transportation’s intended decision to conduct negotiations with Xerox State and Local Solutions, Inc., under ITN-DOT-13/14-8001-SM is contrary to the Department’s governing statutes, rules, or policies or to the solicitation specifications.
Findings Of Fact The ITN The Department is an agency of the State of Florida charged with planning, acquiring, leasing, constructing, maintaining, and operating toll facilities and cooperating with and assisting local governments in the development of a statewide transportation system. § 334.044(16)-(22), Fla. Stat. (2013).1/ The Department is authorized to enter contracts and agreements to help fulfill these duties. See §§ 20.23(6) and 334.044(7), Fla. Stat. FTE is a legislatively created arm of the Department and is authorized to plan, develop, own, purchase, lease, or otherwise acquire, demolish, construct, improve, relocate, equip, repair, maintain, operate, and manage the Florida Turnpike System. § 338.2216(1)(b), Fla. Stat. FTE is also authorized to cooperate, coordinate, partner, and contract with other entities, public and private, to accomplish these purposes. Id. The Department has the express power to employ the procurement methods available to the Department of Management Services under chapter 287, Florida Statutes.2/ § 338.2216(2), Fla. Stat.; see also Barton Protective Servs., LLC v. Dep’t of Transp., Case No. 06-1541BID (Fla. DOAH July 20, 2006; Fla. DOT Aug. 21, 2006). OOCEA (now known as the Central Florida Expressway Authority), MDX, and THEA are legislatively created or authorized agencies of the State with the power to fix, alter, charge, establish, and collect tolls, rates, fees, rentals, and other charges for the services and facilities system. §§ 348.0003(1)- .0004(2)(e), Fla. Stat. Each of these authorities has the power to enter contracts and to execute all instruments necessary or convenient for the carrying on of its business; to enter contracts, leases, or other transactions with any state agency or any other public body of the State; and to do all acts and things necessary or convenient for the conduct of its business and the general welfare of the authority in order to carry out the powers granted to it by law. § 348.0004(2)(g), (h), (k), Fla. Stat. On November 1, 2013, the Department advertised the ITN, soliciting proposals from vendors interested in participating in competitive negotiations for the award of a contract to provide a CCSS and associated operations and maintenance. The ITN was issued pursuant to section 287.057, Florida Statutes. The purpose of the ITN is to replace the existing customer service center systems of FTE, OOCEA, THEA, and MDX with a CCSS that can be expanded over time to include other tolling and transit agencies in the State of Florida. The CCSS is expected to process nearly all electronic toll transactions in Florida. The successful vendor will enter a contract directly with the Department. The Department will then enter agreements with the other authorities to address coordinated and joint use of the system. Generally, the ITN sets forth a selection process consisting of two parts. Part one involves: (a) the pre- qualification, or shortlisting, of vendors in order to determine a vendor’s eligibility to submit proposals; and (b) the proposal submission, evaluation, and ranking. Part two is the negotiation phase. The instant proceeding relates only to part one. Part two -- negotiations -- has yet to occur. The TRT and Selection Committee – The Evaluators Cubic alleges that “not all of the members of either [the Technical Review or Selection Committee] teams had the requisite experience or knowledge required by section 287.057(16)(a)1., Florida Statutes.” Accenture alleges that “the Selection Committee did not collectively have expertise in all of the subject areas covered by th[e] ITN.” Section 287.057(16)(a) provides in part that the agency head shall appoint “[a]t least three persons to evaluate proposals and replies who collectively have experience and knowledge in the program areas and service requirements for which commodities or contractual services are sought.”3/ In accordance with the requirements of section 287.057(16)(a), the ITN established a Technical Review Team (TRT) that would be “composed of at least one representative from each Agency and may include consultant (private sector) staff.” The ITN also provided for a Selection Committee that would be “composed of executive management at the Agencies.” Each agency executive director appointed two individuals from their agency to the TRT. Each agency director was familiar with the background and qualifications of their appointees, who had experience in various aspects of tolling operations including tolling, software, finance, and procurement. The following individuals were appointed to serve on the TRT. Bren Dietrich, a budget and financial planner for FTE, has an accounting degree and has worked at FTE for 12 years in budget and financial planning. Mr. Dietrich has been a technical committee member for seven or eight procurements. Mohamed Hassan, a senior operations manager for FTE, has been in information technology for nearly 40 years and with FTE for 22 years handling all aspects of software development and maintenance for the state’s largest tolling authority. Mr. Hassan’s expertise is in software development and maintenance. Mr. Hassan oversees staff that is responsible for maintaining the database application systems, hardware, communications coming in and going out of the customer service center, and any development projects such as transaction processing or account management system upgrades. Steve Andriuk is a deputy executive director for MDX and oversees all tolling operations within MDX’s jurisdiction. Mr. Andriuk’s tolling background goes beyond his tenure at MDX, as he previously was an executive director at Chesapeake Bay Bridge Authority. Jason Greene, MDX’s comptroller of financial controls and budget manager, has a background in finance and accounting and in project management. Mr. Greene has been with MDX for 11 years. Lisa Lumbard, who has been with OOCEA for 16 years, is the interim chief financial officer and previously was the manager of accounting and finance. Ms. Lumbard runs OOCEA’s finance and accounting office and has both procurement experience and substantial experience in the financial aspects of back- office tolling. David Wynne is the director of toll operations of OOCEA and is responsible for the overall collection of all tolls and for the violation enforcement process. Mr. Wynne has held some iteration of this position for approximately 11 years and worked for OOCEA for 16. He also has both procurement and substantial tolling experience. Robert Reardon, THEA’s chief operating officer, is responsible for THEA’s day-to-day operations, including tolls. Mr. Reardon has been with THEA for six years and has experience as a technical evaluator for public procurements. Rafael Hernandez is THEA’s manager of toll operations and oversees all toll operations within THEA’s jurisdiction. The TRT members collectively have the requisite knowledge and experience in tolling, software, finance, and procurement. The following individuals constituted the Selection Committee. Diane Gutierrez-Scaccetti has been FTE’s executive director since 2011 and worked for the New Jersey Turnpike Authority for over 20 years, the last two as executive director and the previous 14 as deputy executive director. Laura Kelley is OOCEA’s deputy director over finance administration and the interim executive director. Ms. Kelly has 30 years’ experience in transportation finance and management, 15 of which occurred at the Department and eight of which occurred at OOCEA overseeing information technology, finance, and procurement. Javier Rodriguez, MDX’s executive director, oversees all MDX operations, including planning, finance, operations, and maintenance functions. Mr. Rodriguez has been with MDX for seven years and was with the Department for over 15 years prior to his employment with MDX. Joseph Waggoner has been THEA’s executive director for approximately seven years. Prior to joining THEA, he was with the Maryland Department of Transportation for nearly 30 years, six of which were in tolling operations. ITN section 2.6.2 provides as follows: Following Proposal Oral Presentations by all short-listed Proposers (see section 2.25 Proposal Oral Presentations for additional details) the Technical Review Team members will independently evaluate the Proposals based on the criteria provided in Section 2.5.2 and will prepare written summary evaluations. There will then be a public meeting of the Selection Committee at the date, time and location in Table 1-2 Procurement Timeline. The Technical Review Team’s compiled written summary evaluations will be submitted to the Selection Committee. The Technical Review and Selection Committee will review and discuss the individual summary evaluations, and the Selection Committee will come to consensus about ranking the Proposers in order of preference, based on their technical approach, capabilities and best value. In addition to the Technical Review Team, the Selection Committee may request attendance of others at this meeting to provide information in response to any questions. The ITN is structured such that both the TRT and the Selection Committee have shared responsibility for evaluating proposals, with the Selection Committee having ultimate responsibility for ranking the Proposers for the negotiations stage of the procurement process. Combining the eight members of the TRT with the four members of the Selection Team means that there were a total of 12 individuals tasked with the responsibility of evaluating the proposals prior to the negotiations stage of the process. Pre-Qualification and Rankings In the pre-qualification portion of the ITN, interested vendors initially submitted reference forms to demonstrate that the vendors met the minimum project experience set forth in the ITN. Vendors meeting this requirement were invited to give a full-day Pre-Qualification Oral Presentation to the TRT in which each vendor was given the opportunity to demonstrate its proposed system. Under ITN section 2.6.1, A Technical Review Team will attend the Pre- Qualification Oral Presentations and will develop scores and written comments pertaining to the reviewed area(s) identified in Section 2.5.1. The Technical Review Team will be composed of at least one representative from each Agency and may include consultant (private sector) staff. The scores provided by each Technical Review Team member for each area of the Pre- Qualification Oral Presentations will be totaled and averaged with the scores of the other Technical Review Team members to determine the average score for an area of the Pre-Qualification Oral Presentation. The average score for each area of a Pre- Qualification Oral Presentation will then be totaled to determine a total Pre- Qualification Oral Presentation score. Each vendor’s Pre-Qualification Oral Presentation was then scored based on criteria set forth in ITN section 2.5.1. Any vendor that received a score of 700 or higher was “short- listed” and invited to submit proposals. Put differently, those receiving a score of at least 700 were deemed qualified to submit formal proposals. ITN section 2.5.1 provides that the “review/evaluation of the Pre-Qualification Oral Presentations will not be included in decisions beyond determining the initial short-list of Proposers to proceed in the ITN process.” Accordingly, the scores assigned in the pre-qualification phase were irrelevant after the short-listing. Six vendors submitted pre-qualifications responses, including Xerox, Accenture, and Cubic. On January 21, 2014, the Department posted its short-list decision, identifying that all six vendors, including Xerox, Accenture, and Cubic, were deemed qualified to submit formal written proposals to the ITN (the “First Posting”). As required by section 120.57(3)(a), Florida Statutes, the posting stated, “Failure to file a protest within the time prescribed in Section 120.57(3), Florida Statutes, or failure to post the bond or other security required by law within the time allowed for filing a bond shall constitute a waiver of proceedings under Chapter 120, Florida Statutes.” This posting created a point of entry to protest, and no vendor initiated a protest. After the First Posting, short-listed vendors submitted technical and price proposals and made Proposal Oral Presentations. ITN section 2.24 provides detailed instructions for technical and price proposal preparation and submission. ITN section 2.25 (as amended by Addendum 8) sets forth the process for short-listed vendors to make Proposal Oral Presentations to the TRT. Short-listed Proposers will each be scheduled to meet with the Technical Review Team for Proposal Oral Presentations of their firm’s capabilities and approach to the Scope of Work and Requirements within the time period identified in Table 1-2 Procurement Timeline. Short-listed Proposers will be notified of a time and date for their Proposal Oral Presentation. Proposal Oral Presentation sessions are not open to the public. The Selection Committee will attend these Presentations. In advance of the Proposal Oral Presentations Proposers will be given detailed instructions on what the format and content of the Proposal Oral Presentation will be, including what functionality shall be demonstrated. The Department may also provide demonstration scripts to be followed. Proposers should be prepared to demonstrate key elements of their proposed System and Project approach and to respond to specific questions regarding their Proposals. These Proposal Oral Presentations will be used to present the Proposer’s approach and improve understanding about the Department’s needs and expectations. The Technical Review Team will participate in all Proposal Oral Presentations. After each Oral Presentation, each individual on the Technical Review Team will complete a written summary evaluation of each Proposer’s technical approach and capabilities using the criteria established in Section 2.5.2 in order to assure the Technical Proposal and Oral Presentations are uniformly ranked. The evaluation will consider both the Technical Proposal and the Oral Presentations. ITN section 2.5.2 is titled “Best Value Selection” and provides as follows: The Department intends to contract with the responsive and responsible short-listed Proposer whose Proposal is determined to provide the best value to the Department. “Best value,” as defined in Section 287.012(4), F.S., means the highest overall value to the state, based on objective factors that include but are not limited to . . . . ITN section 2.5.2 goes on to delineate seven “objective factors,” or evaluation criteria, on which proposals would be evaluated: Company history Project experience and qualifications Proposed Project approach to the technical requirements Proposed approach to the Project plan and implementation Proposed approach to System Maintenance Proposed approach to Operations and performance Price ITN section 2.6.2 explains the process for evaluation of technical proposals and Proposal Oral Presentations and states that: Following Proposal Oral Presentations by all short-listed Proposers (see Section 2.25 Proposal Oral Presentations for additional details) the Technical Review Team members will independently evaluate the Proposals based on the criteria provided in Section 2.5.2 and will prepare written summary evaluations. There will then be a public meeting of the Selection Committee at the date, time and location in Table 1-2 Procurement Timeline. The Technical Review Team’s compiled written summary evaluations will be submitted to the Selection Committee. The Technical Review Team and Selection Committee will review and discuss the individual summary evaluations, and the Selection Committee will come to consensus about ranking the Proposers in order of preference, based on their technical approach, capabilities and best value. In addition to the Technical Review Team, the Selection Committee may request attendance of others at this meeting to provide information in response to any questions. Of the six short-listed vendors, five submitted proposals and gave Proposal Oral Presentations, including Xerox, Accenture, and Cubic. The Department then undertook a ranking using the evaluation criteria delineated in ITN section 2.5.2. To perform this ranking, TRT members individually evaluated the proposals and prepared detailed, written evaluations that tracked the evaluation criteria factors. The TRT’s evaluations, together with proposal summaries prepared by HNTB, were provided to the Selection Committee in preparation for a joint meeting of the TRT and Selection Committee on April 9, 2014. At the April 9th meeting, the TRT and Selection Committee members engaged in an in-depth discussion about the bases for and differences between the individual TRT members’ rankings and evaluations. Thereafter, the Selection Committee made its ranking decision. On April 10, 2014, the Department posted its ranking of vendors, with Xerox first, Accenture second, and Cubic third (the “Second Posting”). The Second Posting also announced the Department’s intent to commence negotiations with Xerox as the first-ranked vendor.4/ If negotiations fail with Xerox, negotiations will then begin with second-ranked vendor Accenture, then Cubic, and so on down the order of ranking until the Department negotiates an acceptable agreement. Accenture and Cubic each timely filed notices of intent to protest the Second Posting and timely filed formal written protest petitions and the requisite bonds. Negotiations are not at Issue ITN section 2.26 provides: Once Proposers have been ranked in accordance with Section 2.6.2 Proposal Evaluation, the Department will proceed with negotiations in accordance with the negotiation process described below. Proposers should be cognizant of the fact that the Department reserves the right to finalize negotiations at any time in the process that the Department determines that such election would be in the best interest of the State. Step 1: Follow the evaluation process and rank Proposals as outlined in Section 2.6 Evaluation Process. Step 2: The ranking will be posted, in accordance with the law (see Section 2.27), stating the Department’s intent to negotiate and award a contract to the highest ranked Proposer that reaches an acceptable agreement with the Department. Step 3: Once the posting period has ended, the Negotiation Team will undertake negotiations with the first-ranked Proposer until an acceptable Contract is established, or it is determined an acceptable agreement cannot be achieved with such Proposer. If negotiations fail with the first-ranked Proposer, negotiations may begin with the second-ranked Proposer, and so on until there is an agreement on an acceptable Contract. The Department reserves the option to resume negotiations that were previously suspended. Negotiation sessions are not open to the public and all negotiation sessions will be recorded by the Department. Step 4: The Negotiation Team will write a short plain statement for the procurement file that explains the basis for Proposer selection and how the Proposer’s deliverables and price will provide the best value to the state. Step 5: The Department will contract with the selected Proposer. As Accenture and Cubic protested the decision by the Department to enter negotiations with Xerox (and because of the automatic stay provision of section 120.57(3), Florida Statutes) the negotiation phase of the procurement never commenced. Thus, this proceeding concerns the Department’s actions up to the Second Posting, and not what may happen during future negotiations. Second Posting and Intended Award Section 1.2 of the ITN sets forth the procurement timeline for the CCSS project. The ITN originally indicated that the “Posting of Ranking/Intended Award” would occur on March 31, 2014. By addendum issued on February 13, 2014, the date for “Posting of Ranking/Intended Award” was changed to April 10, 2014. Section 1.3.1 of the ITN provides an agenda for the April 10, 2014, “Meeting to Summarize and Determine Ranking/Intended Award.” Section 2.27 of the ITN is labeled “POSTING OF RANKING/INTENDED AWARD.” Section 2.27.1, Ranking/Intended Award, provides that “[t]he Ranking/Intended Award will be made to the responsive and responsible Proposer that is determined to be capable of providing the best value and best meet the needs of the Department.” Section 2.27.2 is labeled “Posting of Short- list/Ranking/Intended Award” and provides in part that “[a]ny Proposer who is adversely affected by the Department’s recommended award or intended decision must . . . file a written notice of protest within seventy-two hours after posting of the Intended Award.” Joint Exhibits 10 and 12 are copies of forms used to announce the rankings of the Proposers. It is not clear from the record if these forms are a part of the ITN. Nevertheless, the forms are identical in format. Each form has three boxes that follow the words “TYPE OF POSTING.” The first box is followed by the word “Shortlist,” the second box is followed by the word “Ranking,” and the third box is followed by the words “Intended Award.” The form also has three columns that coincide with the three boxes previously referenced. The three columns are respectively labeled, “X indicates shortlisted vendor,” “ranking of negotiations,” and “X indicates intended award.” With respect to the last two columns, explanatory comments appearing at the bottom of the form read as follows: ** Ranking: The Department intends to negotiate separately and will award a contract to the highest ranked vendor that reaches an acceptable agreement with the Department. The Department will commence negotiations with the number one ranked vendor until an acceptable contract is agreed upon or it is determined an acceptable agreement cannot be reached with such vendor. If negotiations fail with the number one ranked vendor, negotiations may begin with the second-ranked vendor, and so on down the order of ranking until the Department is able to negotiate an acceptable agreement. *** Intended Award: “X” in the Intended Award column indicates the vendor whom the Department intends to award the contract to, but does not constitute an acceptance of any offer created by the vendor’s proposal or negotiations. No binding contract will be deemed to exist until such time as a written agreement has been fully executed by the Department and the awarded vendor. If irregularities are subsequently discovered in the vendor’s proposal or in the negotiations or if the vendor fails to submit required [b]onds and insurance, fails to execute the contract, or otherwise fails to comply with the ITN requirements, the Department has the right to undertake negotiations with the next highest vendor and continue negotiations in accordance with the ITN process, reject all proposals, or act in the best interest of the Department. On April 10, 2014, the Department issued a posting wherein the “Ranking” box was checked and the “Intended Award” box was not. According to Sheree Merting, it was a mistake to have only checked the “Ranking” box because the box labeled “Intended Award” should have also been checked. Petitioners contend that by not simultaneously checking both the “Ranking” and “Intended Award” boxes that the Department materially changed the process identified in the ITN. Protesters’ arguments as to this issue appear to be more related to form than substance. In looking at the plain language of the ITN, it reasonably appears that the Department intended to simultaneously announce the “Ranking” and “Intended Award.” The fact that the Department failed to combine these two items in a single notice is of no consequence because neither Cubic nor Accenture have offered any evidence establishing how they were competitively disadvantaged, or how the integrity of the bidding process was materially impaired as a consequence of the omission. In other words, Sheree Merting’s confessed error of not checking the “Intended Award” box contemporaneously with the “Ranking” box is harmless error. See, e.g., Fin. Clearing House, Inc. v. Fla. Prop. Recovery Consultants, Inc., Case No. 97-3150BID (Fla. DOAH Nov. 25, 1997; Dep’t of Banking & Fin. Feb 4, 1998)(applying harmless error rule to deny protest where agency initially violated provisions of section 287.057(15), Florida Statutes, by selecting two evaluators instead of three required by statute, but later added required evaluator). Sequential Negotiations As previously noted, section 2.26 of the ITN provides that following the ranking of the short-list proposers, the “Negotiation Team will undertake negotiations with the first- ranked Proposer until an acceptable Contract is established . . . [and] [i]f negotiations fail with the first-ranked Proposer, negotiations may begin with the second-ranked Proposer, and so on until there is an agreement on an acceptable Contract.” Petitioners assert that the Department has abandoned the sequential negotiation process set forth in section 2.26 and has announced “that it will conduct the procurement negotiations only with Xerox as the number one ranked proposer” and that the process of negotiating with only one proposer is contrary to the law because section 287.057(1)(c) “requires that the Department negotiate with all proposers within the competitive range.” Diane Gutierrez-Scaccetti testified as follows (T: 1119): Q: Now, you understand that as a result of the rankings that were posted on April 10th, negotiations under this ITN are to proceed with only a single vendor, is that right? A: I believe the ITN provided for consecutive negotiations starting with the first-ranked firm and then proceeding down until we reached a contract. Contrary to Petitioners’ assertions, the evidence establishes that the Department intends to follow the negotiation process set forth in section 2.26. Petitioners’ contention that section 287.057(1)(c) does not authorize sequential negotiations is a challenge to the terms, conditions, and specifications of the ITN and should have been filed within 72 hours after the posting of the solicitation as required by section 120.57(3)(b). Petitioners have waived their right of protest with respect to this issue. Petitioners’ waiver notwithstanding, section 287.057(1)(c) does not preclude the type of sequential negotiation process set forth in section 2.26 of the ITN. Section 287.057(1)(c) provides in part that “[t]he invitation to negotiate is a solicitation used by an agency which is intended to determine the best method for achieving a specific goal or solving a particular problem and identifies one or more responsive vendors with which the agency may negotiate in order to receive the best value.” (Emphasis added). Section 287.057(1)(c)4. provides that “[t]he agency shall evaluate replies against all evaluation criteria set forth in the invitation to negotiate in order to establish a competitive range of replies reasonably susceptible of award [and] [t]he agency may select one or more vendors within the competitive range with which to commence negotiations.” (Emphasis added). The opening paragraph of section 287.057(1)(c), which is essentially the preamble portion of the ITN provisions, expresses the purpose for which the ITN process was developed, to wit: “to determine the best method for achieving a specific goal or solving a particular problem.” In furtherance of the stated purpose, the Legislature instructs, in the preamble, that the process should “identif[y] one or more responsive vendors with which the agency may negotiate in order to receive the best value.” If the preamble is read in statutory isolation, then one could reasonably conclude that if the agency identifies more than one responsive vendor then the agency should negotiate with each of the vendors “in order to receive the best value.” Arguably, the preamble merely looks at vendor “responsiveness” as the guidepost for determining with whom the agency shall negotiate. Mere “responsiveness” however, is clearly not the only standard for selecting a vendor through the ITN process and illustrates why this portion of the statute cannot be read in isolation. As previously noted, subparagraph four of section 287.057(1)(c), provides that the agency “shall . . . establish a competitive range of replies reasonably susceptible of award,” and once this is done, “[t]he agency may select one or more vendors within the competitive range with which to commence negotiations.” (Emphasis added). By using the word “may” in subparagraph four, the Legislature is authorizing agencies to exercise discretion when selecting vendors with whom to negotiate. In exercising its discretion, agencies can decide to negotiate with a single vendor or with multiple vendors. An agency’s exercise of its discretion is not absolute and the “check” on the exercise of its discretion, in the context of the instant case, is a bid protest whereby an unsuccessful bidder can attempt to prove that the procurement process was impermissibly tainted. Contrary to Petitioners’ allegations, the sequential negotiation process utilized by the Department in the present case does not run afoul of section 287.057. Petitioners forcefully argue that they have been shutout of the negotiation process because neither of them was ranked first. This assertion mischaracterizes the nature of the sequential negotiation process used by the Department. The evidence shows that if the Department fails to come to terms with Xerox, then negotiations may begin with the second-ranked vendor, and so on down the order of ranking until the Department negotiates an acceptable agreement. The truth of the matter is that neither of the protesters has been shutout of the negotiations. It is simply the case that neither occupies the preferred position of being the highest ranked, short-listed vendor. Petitioners also argue that the Florida Department of Transportation Commodities and Contractual Services Procurement Manual – 375-040-020, prohibits sequential negotiations. For invitations to negotiate, the manual provides: There are two general negotiation methods used: Competitive Method A – Vendors are ranked based on technical qualifications and negotiations are conducted commencing with the first ranked vendor. Competitive Method B – Vendor qualifications are evaluated and vendors may be short-listed. Negotiations of scope and price will be conducted with short-listed or all vendors. An award is made to the vendor with the best combination of proposal, qualifications, and price. According to Petitioners, the ITN does not comport with either Method A or Method B. Again, Petitioners failed to timely challenge the ITN specifications regarding sequential negotiations and thus have waived this argument. Even if the merits of the argument are considered, Petitioners’ argument fails. The methods described in the manual are not the only methods available to the Department; in fact, the manual, by stating that “there are two general negotiation methods used (emphasis added),” recognizes that the methods are subject to refinement or modification as the Department deems best to meet the perceived needs of a particular solicitation as long as the final method complies with section 287.057(1), Florida Statutes. Further, the procurement manager for the ITN, Sheree Merting, testified that the shell, or template, provided by the Department’s central office, and used when drafting an invitation to negotiate, contains a combination of the manual’s methods A and B, which is referred to as A/B. The order of negotiations provided for in the ITN and reiterated in the First and Second Postings is not, therefore, inconsistent with the Department’s policies or procedures. Best Value Decision Petitioners contend that the Department, via the Second Posting, has already (and improperly) determined which vendor will provide the best value to the State even though negotiations have not yet occurred. This contention is not supported by the evidence. ITN section 2.5.2 states the Department’s intent to contract with the vendor whose proposal is determined to provide the best value and sets forth the statutorily mandated objective factors, or criteria, on which proposals will be evaluated. ITN section 2.6.2 provides that the TRT and Selection Committee will review and discuss the TRT members’ individual summary evaluations and the Selection Committee “will come to consensus about ranking the Proposers in order of preference, based on technical approach, capabilities and best value.” The evidence reflects that the evaluation factors were applied during the evaluation process to formulate a best value ranking, but the question of which vendor ultimately provides the best value to the State will not be conclusively determined until after negotiations are concluded. See § 287.057(1)(c)4., Fla. Stat. (“After negotiations are conducted, the agency shall award the contract to the responsible and responsive vendor that the agency determines will provide the best value to the state, based on the selection criteria.”). As testified by Ms. Gutierrez- Scaccetti, “[t]he Selection Committee agreed upon the ranking of firms. It has not made an award.” This is consistent with the ITN and Florida law, which require award to the best value proposer after negotiations. Evaluation Criteria Properly Followed As explained above, ITN section 2.5.2 sets forth the evaluation factors that the TRT and Selection Committee were to use in evaluating proposals. Petitioners allege that the TRT and Selection Committee did not follow the ITN and based their evaluations and rankings on factors other than those listed in ITN section 2.5.2. The evidence establishes that the TRT did in fact use these factors, as evidenced by the detailed evaluation summaries prepared by each of the eight TRT members, which almost uniformly tracked these factors. Seven of these summaries are organized by headings that mirror the seven criteria of section 2.5.2. The remaining summary, prepared by TRT member Mohamed Hassan, was formatted in terms of pros and cons, but nonetheless addressed all of the section 2.5.2 evaluation criteria. Reflective of the TRT’s approach, TRT member David Wynne prepared detailed, typed proposal summaries that are four pages long and single-spaced for each proposal. Mr. Wynne’s summaries capture his deliberate thought process in ranking the proposals and include headings that directly tie back to the evaluation criteria in the ITN. His summaries include specific details from each proposal justifying his qualitative assessment of the proposals. For example, he discusses the benefits of Xerox’s Vector 4G tolling platform, Xerox’s proposed project schedule, and maintenance. Mr. Wynne even included a breakdown of the pricing and his thoughts on how the pricing compared to the other vendors. The other TRT members had equally detailed summaries. When read as a whole, these summaries demonstrate that the TRT engaged in a rational, deliberative, and thoughtful evaluation of the proposals based on the ITN criteria. Additionally, the TRT members testified that they applied the ITN section 2.5.2 factors in conducting their evaluations. Thus, the evidence demonstrates that the TRT members did as instructed in the ITN and evaluated proposals based on ITN section 2.5.2’s factors. There is no credible basis to find that the section 2.5.2 criteria were not the bases of the TRT’s evaluations, rankings, and narratives. The evidence also establishes that the Selection Committee applied ITN section 2.5.2 factors in reaching its decision. The Selection Committee reviewed the TRT summaries, along with a detailed notebook prepared by HNTB, the Department’s consultant. The HNTB notebook was a comprehensive summary of information compiled from the vendors’ voluminous proposals and organized in a digestible format to aid the Selection Committee’s review, including helpful summaries providing head-to-head objective comparisons of vendor pricing, software development, and vendors’ exceptions and assumptions. The HNTB notebook of materials objectively compiled the content taken directly from the vendors’ own proposals and included no editorial comments or opinions by the Department’s consultants. Moreover, the HNTB notebook contained a chart summarizing the TRT’s rankings by TRT member, along with copies of each TRT member’s detailed written summaries. It also contained a detailed, 36-page pricing summary that pulled price information directly from the vendors’ proposals and summarized the information in a manner that allowed for easy side-by-side comparison. The notebook also included a systems matrix summary that was prepared by taking proposed systems information directly from the vendors’ proposals and combining it in a format that could be easily processed. In fact, the notebook even included pages copied directly from the proposals. Armed with the comprehensive TRT summaries and the HNTB notebook, the Selection Committee then engaged the TRT in a thoughtful and detailed discussion and analysis of the qualitative merits of each vendor’s proposal -- all within the bounds of the section 2.5.2 criteria. Petitioners contend that during the TRT and Selection Committee’s discussions, issues such as risk were improperly considered. Although “risk” was not a separately labeled criterion under section 2.5.2 (“risk of solution” is, however, referenced as a sub-bullet), risk is inherently a significant consideration in each of the evaluation factors. Stated differently, the concept of risk is integral to the ITN section 2.5.2 factors, and the Department properly considered such risks. For example, a vendor’s prior project experience -- whether it has successfully completed similar projects before -- was a listed criterion, which is directly relevant to the risk the Department would take in selecting a vendor, that is, the risk that the vendor’s experience is or is not sufficient to assure a timely project completion and quality services under the ITN. Indeed, section 287.057(1)(c) requires that the Department consider prior experience. Another example of risk considered by at least one Selection Committee member was the potential that Accenture’s project manager would not be assigned solely to this project, but might be shared with Accenture’s Illinois tolling project (“local presence commitment” is referenced as a sub-bullet in section 2.5.2). The evidence shows that Accenture stopped short of saying without qualification that its project manager would be released from Illinois and solely assigned to CCSS. This uncertainty raised a risk concern whether the critical project implementation would be properly managed. Considerations such as these are rational and reasonable. There is a Reasonable Basis for the Department’s Ranking Petitioners further contend that there was no reasonable basis for the Department’s intended decision to begin negotiations with Xerox. However, as explained above, the evidence demonstrates the opposite as the TRT and Selection Committee collectively discussed and considered the evaluation criteria and the Selection Committee reached consensus on moving forward to negotiations with Xerox. Moreover, there is ample evidence that the Selection Committee’s decision was rational and reasonable. The TRT and Selection Committee’s discussion at the April 9, 2014, meeting where the ranking decision was reached, demonstrates the studied analysis by which the evaluations were conducted. At the meeting, the four Selection Committee members, who had already reviewed the TRT members’ individual rankings and evaluations, each questioned the TRT members about their assessments of the proposals. Selection Committee members asked about the bases for the differences between the individual TRT members’ evaluations, and the TRT members explained why they ranked the vendors the way they did. The discussion revolved around the top three ranked vendors, Xerox, Accenture, and Cubic, which one TRT member described as being “head and shoulders above the rest” -- that is, above the vendors ranked fourth and fifth. As noted above, the Selection Committee members’ primary focus in these discussions was on risk assessment -- the financial risks, operations risks, and information technology risks that the TRT members believed accompanied each proposal. Major Selection Committee items of discussion included modifications to the existing systems, proprietary versus off- the-shelf software issues, and the vendors’ proximity to Florida. Additional discussion points included the risk associated with Accenture’s use of multiple subcontractors and Cubic’s lack of experience with certain tolling systems. From these discussions, it appears that the overriding factor behind the Selection Committee’s ranking decision at the April 9 meeting was Xerox’s proven experience with other similar and large tolling projects, including some of the country’s largest tolling systems, which Accenture and Cubic simply did not possess.5/ As one Selection Committee member expressed, Xerox brought a “comfort level” that did not exist with Accenture and Cubic. Moreover, Xerox, with 78 percent, is the leader in the evaluative category that looks at the percentage of the company’s existing baseline system that meets the CCSS requirements -- more than Accenture’s and Cubic’s combined percentages. As the percentage of existing baseline system compliance increases, the implementation risks decrease. Selection Committee members Diane Gutierrez-Scaccetti and Joseph Waggoner expressed the importance of this based on their firsthand experience with existing tolling systems in use for their respective agencies. In sum, this analysis and assessment is a valid and reasonable basis for the Department’s decision. Cubic also contends that such analysis is improper because the ITN allowed transit firms to submit proposals, thus making tolling experience an irrelevant evaluative factor. This contention fails because by prequalifying transit firms to bid, the Department was not precluded from considering a vendor’s specific tolling experience as part of the evaluative process. Contrary to Cubic’s allegation, the factors listed in ITN section 2.5.2, including “Project Experience and Qualifications,” contemplate tolling experience as being part of the relevant analysis. Therefore, the Selection Committee was fully authorized under the ITN to consider the benefits of a proven commodity -- a firm with Xerox’s extensive tolling experience. The Selection Committee’s qualitative assessment that, on the whole, Xerox was the better choice for commencing negotiations was supported by reason and logic and was wholly consistent with the ITN specifications. Petitioners further argue that the Department’s ranking decision is inconsistent with the pre-qualification scoring, where Accenture and Cubic each scored slightly higher than Xerox. This argument fails as ITN section 2.5.1 expressly provides that the evaluations and scoring of the Pre-Qualification Oral Presentations will not be included in decisions beyond determining the initial short-list. Regardless, these three vendors were essentially tied in that scoring: Accenture’s score was 885.38, Cubic’s was 874.75, and Xerox’s was 874.00. Petitioners also contend that the Selection Committee’s ranking decision is inconsistent with the ranking decision of the TRT majority. The ITN is clear, however, that the Selection Committee would be the final arbiter of ranking. No Demonstrations Were Cancelled The procurement timeline in the original ITN allotted ten business days for Proposal Oral Presentations. The revised timeline in Addendum 8 allotted two days. Cubic asserts that this reduction in presentation time occurred because the Department, without explanation, cancelled planned vendor demonstrations that were to occur during Proposal Oral Presentations, thus placing Cubic at a disadvantage as it was unable to present its demonstrations to Selection Committee members. Cubic also asserts that the cancellation of demonstrations is an indication that the Department had already made up its mind to select Xerox. The ITN and the testimony are unequivocal that no demonstrations were “cancelled.” ITN section 2.25 contemplates that the Department may request demonstrations in the proposal evaluation phase but in no way states that demonstrations will be held. Section 2.25 also provides that if any demonstrations were to be held, they would be as directed by the Department. Thus, the ITN did not guarantee Cubic any presentation, as Cubic suggests. Moreover, all vendors were treated equally in this regard. Further, the evidence reflects that the decision to hold demonstrations only during the Pre-Qualification Presentations was made when the ITN was released and that the Department never planned to have vendor demonstrations at the Proposal Oral Presentations. Indeed, during the mandatory pre- proposal meeting, the Department informed all vendors of the planned process, to include one demonstration at the pre- qualification phase and an oral presentation and question-and- answer session during the proposal and ranking phase. In short, Cubic presented no credible evidence in support of its allegations regarding the alleged cancellation of the demonstrations or any resulting harm. Exceptions and Assumptions were properly considered The ITN required vendors, in their technical proposals, to identify assumptions and exceptions to contract terms and conditions. Significantly, the ITN states that the Department is not obligated to accept any exceptions, and further that exceptions may be considered at the Department’s discretion during the evaluation process. ITN Technical Proposal Section 9 provides, in its entirety: Technical Proposal Section 9: Exceptions and Assumptions If Proposers take exception to Contract terms and conditions, such exceptions must be specified, detailed and submitted under this Proposal section in a separate, signed certification. The Department is under no obligation to accept the exceptions to the stated Contract terms and conditions. Proposers shall not identify any exceptions in the Price Proposal. All exceptions should be noted in the certification provided for in Proposal Section 9. Proposers shall not include any assumptions in their Price Proposals. Any assumptions should be identified and documented in this Section 9 of the Proposal. Any assumptions included in the Price Proposals will not be considered by the Department as a part of the Proposal and will not be evaluated or included in any Contract between the Department and the Proposer, should the Proposer be selected to perform the Work. Failure to take exception in the manner set forth above shall be deemed a waiver of any objection. Exceptions may be considered during the Proposal evaluation process at the sole discretion of the Department. Petitioners allege that the ITN did not clearly set forth how vendors’ exceptions and assumptions would be treated and that the Department accordingly failed to consider such exceptions and assumptions. This is a belated specifications challenge and therefore has been waived. Regardless, the evidence demonstrates that both the TRT and Selection Committee did, in fact, consider the exceptions and assumptions in the evaluation and ranking of proposers. The TRT and Selection Committee were instructed to consider exceptions and assumptions and to give them the weight they deemed appropriate subject to staying within the confines of the ITN’s section 2.5.2 criteria. Consistent with these instructions, some TRT members included comments regarding exceptions and assumptions in those members’ evaluation summaries, reflecting that exceptions and assumptions were considered during the evaluation process. Other TRT members considered the exceptions of minimal significance given that the Department would address them during negotiations and was not bound to agree to any. Indeed, the evidence was that it was the Department’s intent to sort out the exceptions and assumptions in the negotiation process and, again, that the Department need not agree to any exceptions initially set forth by the vendors. Thus, the Department acted rationally and within the bounds of the ITN and its discretion when considering exceptions and assumptions. The Selection Committee Reached Consensus Accenture alleges that the Selection Committee failed to carry out its duty to reach a “consensus” in ranking vendor proposals. The evidence establishes the exact opposite. The ITN provides that the Selection Committee will come to “consensus” about ranking the vendors in order of preference, based on technical approach, capabilities, and best value. A consensus does not require unanimity. According to the testimony of Selection Committee member Javier Rodriguez, who was the only Selection Committee member who voted for Accenture as his first choice, “at the end, Xerox got three votes from the Selection Committee; Accenture got one. So for me, consensus meant: Are we in consensus to move forward with Xerox? And as I said at the selection meeting, I didn’t object. So from a consensus standpoint, we’re moving on to starting negotiations with Xerox, and that was the intent.” Therefore, the unrebutted evidence is that the Selection Committee did, in fact, reach consensus. Subject Matter Experts Accenture contends that the TRT and Selection Committee made use of subject matter experts in the course of the evaluation and ranking in violation of Florida statutory requirements and governing procurement policies. The record, however, is void of any substantial competent evidence in support of these allegations. Tim Garrett is the tolls program manager for HNTB under the General Engineering Consulting contract for FTE. Mr. Garrett was the overall project manager assigned to support FTE in the development and execution of the ITN. He and other HNTB employees, such as Wendy Viellenave and Theresa Weekes, CPA, provided support to both TRT and Selection Committee members in regards to summarizing proposals and defining the process. There is no evidence that any employee of, or sub-consultant to, HNTB communicated qualitative assessments or opinions about any of the competing proposals to TRT or Selection Committee members. Rather, the evidence shows that HNTB facilitated the TRT’s and Selection Committee’s evaluation work by presenting to the committee members data in the form of summaries, charts, and recapitulations pulled from the voluminous technical and price proposals submitted by the five competing vendors. Other than the support provided by HNTB, the record is essentially devoid of evidence that proposal evaluators made use of subject matter experts.6/ But in any event, neither Petitioner has made a showing that the use of subject matter experts is proscribed by governing statutes, rules, policies, or the specifications of the ITN. Although the use of subject matter experts was not addressed in the ITN itself, the Department, before the Pre- Qualification Oral Presentations in early January 2014, issued written “Instructions to Technical Review Committee.” These instructions authorized TRT members to confer with subject matter experts during the procurement process on specific technical questions and subject to certain additional parameters, as follows: Subject Matter Experts Subject matter experts are authorized to support the TRC on specific technical questions that the TRC members may have throughout the procurement process. Subject matter experts may respond to questions on any aspect of the procurement or proposal, but may not be asked to, nor will they support, the evaluation of proposals, which is the responsibility of each TRC member. A subject matter expert can discuss the specific elements of the ITN and a vendor’s proposal with a TRC member, but they cannot meet with more than one TRC member at a time, unless in a public meeting – subject to the Procurement Rules of Conduct stated above. The subject matter experts are fact finders. A subject matter expert cannot disclose the specific questions asked by another TRC member. No evidence has been presented to establish that the Instructions to Technical Review Committee, as to the use of subject matter experts, violated Florida law or the terms of the ITN, or that any subject matter expert -- whether affiliated with HNTB or not -- failed to perform within the parameters set forth in the Instructions.7/ Both Petitioners devoted significant hearing time to the FTE consultancy work of John McCarey, McCarey Consultants, LLC, and John Henneman, an employee of Atkins Engineering, Inc., and sub-consultant to HNTB. There has been no showing by Petitioners that either Mr. McCarey or Mr. Henneman served as a subject matter expert to any member of the TRT or Selection Committee or that either had improper contacts in regards to the evaluation or ranking of the vendors. The undisputed evidence is that Mr. McCarey did not serve as a subject matter expert for any of the evaluators. As for Mr. Henneman, although one TRT member testified in deposition that he “believe[d]” Mr. Henneman was a technical expert or considered one of the subject matter experts, there is no evidence that Mr. Henneman served as a subject matter expert for any of the evaluators -- TRT or Selection Committee. In sum, there is simply no evidence that any of the subject matter experts had any improper influence on the TRT or Selection Committee members.8/ No Improper Contacts, Attempts to Influence, or Bias Cubic alleges that there was improper contact between the Department and Xerox during this protest that violates the statutorily imposed “cone of silence” for procurements. Cubic also asserts that there were attempts by Xerox to influence the evaluations or rankings based on the Department’s, or the other agencies’, past or existing relationships with Xerox or Xerox’s acquired entities. There simply is no record support for the assertions that there was any improper contact or any attempt by any person to influence the Department’s evaluations or rankings based on past or existing relationships between the Department and Xerox or Xerox’s acquired entities. Xerox’s counsel did not have any contact with the TRT or the Selection Committee prior to the filing of the protests and the attendant “stop” of the procurement process pursuant to section 120.57(3)(c), Florida Statutes. The only contact Xerox’s counsel had with TRT or Selection Committee members was as a participant with the Department’s counsel in pre-deposition meetings with some witnesses designated by Petitioners -- all in the context of ongoing litigation following the filing of Accenture’s and Cubic’s protest petitions. This contact is essentially no different than Petitioners’ contact with Department personnel in depositions and the trial, as well as during the section 120.57(3)(d)1., Florida Statutes, settlement conference with the Department. Furthermore, all such contact was after both the TRT’s and the Selection Committee’s work under the ITN was completed and the said contact was of no import to the procurement process. In short, there is no evidence of attempts by Xerox to influence the process, improper contact between Xerox and the Department, or Department bias in favor of Xerox. Responsiveness of Xerox’s Proposal The evidence, at best, is that the Department has yet to fully vet the representations made in the proposals by the respective Proposers, including Xerox. Protesters suggest that such a full vetting is a condition precedent to negotiations. Such an argument, however, ignores ITN section 2.12, which has to be reconciled with ITN section 2.9.1 b). ITN section 2.9.1 b) provides in part that “[t]he Proposer shall have Key Team members with the following experience at the time of Proposal submission.” The section then goes on to list several positions that fall within the “Key Team Personnel” category. Petitioners contend that the Contract Project Manager, Quality Assurance Manager, and Human Resources Manager proposed by Xerox fail to meet the “Qualifications of Key Team Personnel” set forth in ITN section 2.9.1 b), thus rendering the Xerox proposal nonresponsive. ITN section 2.12 provides in part that “[a]fter the Proposal due date and prior to Contract execution, the Department reserves the right to perform . . . [a] review of the Proposer’s . . . qualifications [and that] [t]his review will serve to verify data and representations submitted by the Proposer and may be used to determine whether the Proposer has an adequate, qualified, and experienced staff.” Xerox’s omission, at this point in the process, amounts to a non-material deviation from the ITN specifications given that ITN section 2.12 reserves in the Department the right to review key personnel representations made by Xerox, and any other short-listed Proposer, at any time “prior to Contract execution.” Cubic also contends that Xerox and Accenture submitted conditional Price Proposals rendering their proposals non- responsive under ITN section 2.16. The analysis turns on the provisions of Technical Proposal Section 9: Exceptions and Assumptions, which provides a detailed description of how exceptions and assumptions are to be provided by vendors, and explains that “[e]xceptions may be considered during the Proposal evaluation process at the sole discretion of the Department.” As provided by the ITN, all vendors included a detailed listing of exceptions and assumptions in their Technical Proposal. Consistent with the discretion afforded to the Department under ITN Technical Proposal Section 9 to consider listed exceptions during the Proposal evaluation process, the Department then made the following inquiry of each of the Proposers: Please identify whether your price proposal is based on the Department’s acceptance of the Exceptions in Section 9 of your technical proposal? Please identify whether your price proposal is based on the Department’s acceptance of the Assumptions in Section 9 of your technical proposal? Xerox responded to both inquiries as follows: “The Xerox price proposal is based on the assumptions and general risk profile created by the inclusion of Section 9. We assume the parties will reach mutual agreement on the issues raised in Section 9 without a material deviation in the price proposal.” In addition to providing written answers to the questions, the vendors also addressed these issues in the Proposal Oral Presentations in response to questions by the Department. By the end of the Proposal Oral Presentations, all three vendors had made clear to the Department that resolution of exceptions and assumptions would not affect the proposed price. For example, Xerox’s senior executive in charge of the procurement, Richard Bastan, represented that there is no financial implication to any of the exceptions and that Xerox would honor the terms and conditions and the scope of services in the ITN for the price set forth in the Price Proposal. Accordingly, none of the proposals were improperly conditioned, and Xerox, Accenture, and Cubic were treated equally. Cubic also contends that Xerox’s proposal was nonresponsive as Xerox allegedly failed to meet the stated experience minimums for transactions processed and accounts maintained. There is, however, no credible evidence to support this contention. Indeed, the evidence is that the Department, through its consultant HNTB, verified these requirements by calling the referenced projects. Moreover, Xerox met or exceeded the stated minimums with its New York project reference. The Department’s decision that Xerox was responsive on this issue is logical, reasonable, and supported by the evidence. Price Proposals ITN section 2.5.2 lists “price” as a factor to consider in determining “Best Value.” The vendors’ price proposals were presented to the TRT members for purposes of conducting their evaluations. Price was also an appropriate factor for consideration by the Selection Committee. Accenture argues that “[t]he ITN does not indicate how pricing will be considered by FDOT during the selection process.” Accenture’s contention that the ITN failed to disclose the relative importance of price is a challenge to the terms, conditions, and specifications of the ITN and should have been filed within 72 hours after the posting of the solicitation, as required by section 120.57(3)(b). Accenture has waived its right of protest with respect to this issue. Conflict of Interest Accenture complains that “[n]either Mr. Henneman nor Mr. McCarey submitted conflict of interest forms as required under the Department’s Procurement Manual . . . [because both] were present during the oral presentations made by the vendors in connection with this procurement.” Accenture also complains that Wendy Viellenave never disclosed that her husband works for TransCore, a company that is a subcontractor for Xerox. Ms. Viellenave’s husband currently works for TransCore as a maintenance and installation manager in California and has not worked in Florida in nearly twenty years. There is no credible evidence that Ms. Viellenave, through the relationship with her husband, has any “significant” direct or indirect -- financial or otherwise -- interest in TransCore that would interfere with her allegiance to the Department. The fact that Ms. Viellenave is married to an individual that works for a Xerox subcontractor is insufficient, in itself, to establish a real or potential conflict of interest. Jack Henneman currently runs the back office operation for FTE at its Boca Raton facility. His future role for the CCSS is as project manager for the implementation of the CCSS. Mr. Henneman became aware of the CCSS procurement through his work on a Florida Transportation Commission Report that culminated in 2012. This report documented the cost efficiencies for all of the tolling authorities in Florida. Mr. Henneman attended some of the Pre-Qualification Demonstrations as his schedule would permit because he is the “go-forward” project manager for the CCSS implementation. Mr. Henneman formerly worked for ACS from 2002 – 2009, and met Ms. Gutierrez-Scaccetti during his employment with the company. Mr. Henneman was the transition manager for the transfer of the back office operation of the New Jersey Turnpike from WorldCom to ACS. Mr. Henneman did not have any contact with Ms. Gutierrez-Scaccetti from approximately 2009 to 2012. In his capacity as the “go-forward” project manager, Mr. Henneman reviewed the technical proposals submitted by the vendors in the instant proceeding but he did not have any discussions with the TRT members or the Selection Committee members about the proposals. He reviewed the technical proposals for the purpose of educating himself so that he would be better prepared to carry out his functions as the “go-forward” project manager. John McCarey is a sub-consultant to FTE general engineering contractor, Atkins. Mr. McCarey has a future role as being a part of the negotiations group for the CCSS. Mr. McCarey formerly worked for Lockheed for approximately 25 years and then spent 5 years working for ACS. Mr. McCarey was the chief financial officer for ACS’s State and Local Solutions Group at one time. Mr. McCarey left the employment of ACS in 2006. Mr. McCarey currently assists with various functions, including work on issues with the consolidation of the back office systems of OOCEA and FTE. For approximately 10 years before becoming a sub-consultant, Mr. McCarey had not had any contact with Ms. Gutierrez-Scaccetti. As it relates to the CCSS project, there is no persuasive evidence that Mr. McCarey provided recommendations to the TRT or the Selection Committee.
Recommendation Based on the Findings of Fact and Conclusions of Law, it is recommended that Petitioners’ protests be dismissed. DONE AND ENTERED this 4th day of September, 2014, in Tallahassee, Leon County, Florida. S LINZIE F. BOGAN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 4th day of September, 2014.
