The Issue The issue is whether the proposed award of Contract No. E1G23 to DeAngelo Brothers, Inc. d/b/a DBI Services Corporation (DBI) is contrary to the Department of Transportation’s governing statutes, rules, policies, or the specifications in the Request for Proposals (RFP).
Findings Of Fact On June 18, 2007, the Department issued RFP No. E1G23, which solicited proposals for “ultra asset maintenance” for Interstate 75 (I-75) and interchanges in Broward, Collier, Lee, Charlotte, Manatee, Desoto, and Sarasota Counties. The Department issued three addenda to the RFP. The addenda did not make any material changes that are pertinent to the issues in this proceeding. The Scope of Services for the RFP stated that for all roadways and facilities covered by the contract, the contractor will be responsible for performing all of the maintenance activities that would otherwise have been performed by the Department, including but not limited to, mowing the right-of- way, maintaining guardrails, fixing potholes, maintaining stormwater management facilities, cleaning and maintaining rest areas, tree trimming, and incident response and management. In the asset management industry, this type of contract is known as a comprehensive asset management contract because the contractor is responsible for all maintenance activities within the right-of-way “from fence to fence, including the fence.” The RFP states that the contract will be awarded to the responsive and responsible vendor whose proposal receives the highest total score, which is composed of a price score and a technical score. The price score is weighted 30 percent, and the technical score is weighted 70 percent. The vendor proposing the lowest price received the full 30 points for the price score. The other vendors’ price scores were calculated through a mathematical formula based upon the percentage that the vendor’s price exceeded the lowest price. The technical score was based upon a subjective evaluation of the proposals in four broad categories: administration plan (weighted 20 points); management and technical plan (weighted 30 points); operation plan (weighted 30 points); and compliance plan (weighted 20 points). There are sub-categories in each of those categories, with a specific number of points assigned to each sub-category. Five evaluators independently reviewed the proposals. The evaluators –- Jennifer Perry, Howard Summers, David Holden, Lance Grace, and Robert Mannix -- were Department employees selected based upon their familiarity with the areas and services covered by the contract. All of the evaluators attended the pre-bid conference, which was mandatory for prospective bidders. No questions or concerns were raised at the pre-bid conference or at any point prior to submittal of the proposals regarding the evaluators having experience with the prior I-75 contract or having been involved in the preparation of the RFP. Three companies -- ICA, DBI, and VMS, Inc. (VMS) -- submitted responses to the RFP. ICA is a Tennessee corporation. DBI is a Pennsylvania corporation. Both companies provide asset management services in Florida and around the country, but ICA has more experience than DBI in providing comprehensive asset management services. The price offered by ICA -- $89,200,300.01 -- was the lowest of the three vendors that responded to the RFP; the price offered by DBI -- $92,630,739 -- was approximately 3.8 percent higher. As a result, ICA received a price score of 30 and DBI received a price score of 28.89. Three of the five evaluators -- Ms. Perry, Mr. Summers, and Mr. Golden -- scored DBI’s proposal the highest. Two of the evaluators -- Mr. Grace and Mr. Mannix -- scored ICA’s proposal higher than DBI’s proposal, but they scored VMS's proposal the highest. None of the evaluators scored ICA’s proposal the highest. DBI’s proposal received an average score of 85.40 from the evaluators, and ICA’s proposal received an average score of 82.96. As result, DBI received a technical score of 59.78, and ICA received a technical score of 58.07. When the price scores and the technical scores were combined, DBI received the highest total score of 88.67. ICA was the second-ranked vendor with a total score of 88.07. VMS was the third-ranked vendor with a total score of 86.12.3 On August 21, 2007, the Department posted notice of its intent to award the contract to DBI. The initial posting erroneously identified the winning vendor as “DeAngelo Brothers, Inc. T/A Aguagenix, Inc.” rather than DBI. The contract administrator, Cheryl Sanchious, explained that this was a clerical error caused by the Department’s computer system and that it has been corrected in the system. ICA timely filed a notice of protest and a formal written protest challenging the award to DBI. ICA posted a cashier’s check in the statutorily required amount in lieu of a protest bond. After the protest was filed, the Department entered into temporary emergency asset management contracts for the roadways and facilities covered by contract at issue in this case. ICA was given the contract for Broward and Collier Counties because it was already providing asset management in those counties under the predecessor to the contract at issue in this case, No. BC680. DBI was given the contract for the other counties, Sarasota, Lee, Manatee, Charlotte, and Desoto. It is undisputed that ICA’s proposal was responsive to the RFP in all material respects. The focus of ICA’s protest is four-fold. First, ICA contends that DBI’s proposal is not responsive because it did not affirmatively state that it would grant a first right of refusal to RESPECT of Florida (RESPECT). Second ICA contends that DBI is not a “responsible vendor” and that the Department confused the concepts of “responsiveness” and “responsibility” in its review of the proposals. Third, ICA contends that the evaluation committee failed to prepare a technical summary as required by the RFP, and that its failure to do so was material because it would have brought to light the discrepancies in Ms. Perry's scoring. Fourth, ICA contends that Ms. Perry's scoring was flawed and out of sync with the other evaluators in several respects. Each issue is discussed in turn. Responsiveness / RESPECT First Right of Refusal Section 8.2 of the RFP provides that “[a] responsive proposal shall perform the scope of services called for in this Proposal Requirements [sic] and receive a Technical Proposal score of at least seventy (70) percent of the maximum attainable points established for scoring the Technical Proposal.” Section 17.1 of the RFP provides that “[d]uring the process of evaluation, the District Contracts Office will conduct examinations of Proposals for responsiveness to requirements of the Proposal Solicitation. Those determined to be non-responsive will be automatically rejected.” Section 16.5 of the RFP requires the proposal to “[u]se only statements of what the Proposer will or will not accomplish” rather than “words such as may, might, should, etc.” Section 8.5 of the RFP authorizes the Department to “waive minor informalities or irregularities in Proposals received where such is merely a matter of form and not substance, and the correction or waiver of which is not prejudicial to other Proposers.” That section defines “minor irregularities” as “those that will not have an adverse effect on the Department’s interest and will not affect the price of the Proposal by giving a Proposer an advantage or benefit not enjoyed by other Proposers.” The Scope of Services for the RFP requires the contractor to “grant ‘Respect of Florida’ a first right of refusal” to provide maintenance services at rest areas. This was intended by the Department to be a mandatory requirement of the RFP, and was understood as such by ICA and DBI. RESPECT is a not-for-profit organization that employs disabled and disadvantaged individuals. RESPECT employees perform janitorial and grounds maintenance functions at rest areas, including one of the rest areas covered by the RFP. ICA’s proposal expressly states that “ICA will grant Respect of Florida first right of refusal on rest area janitorial work consistent with statewide maintenance practices.” DBI’s proposal does not include an affirmative statement that it will grant RESPECT a first right of refusal. However, DBI stated in its proposal that it “is currently in negotiation with [RESPECT] to expand their existing maintenance responsibilities for rest areas within the project limits” and that “DBI Services believes that expanding [RESPECT’s] responsibilities in the project is the right thing to do.” The absence of an affirmative statement in DBI’s proposal that it will grant RESPECT a first right of refusal was not material to the evaluators. For example, evaluator Robert Mannix testified that he “generally looked for more of the intent to give [RESPECT] the opportunity of making a bid rather than the specific language of right of first refusal.”4 Similarly Ms. Perry testified that she considered granting RESPECT a first right of refusal to be a requirement of the contract whether or not the contractor mentioned it in its proposal. Amy Burlarley-Hyland, director of asset management for DBI, testified that DBI intends to provide a first right of refusal to RESPECT and that, consistent with the statement in DBI’s proposal, DBI is “committed to expanding Respect’s responsibilities on this project.” She explained that she did not include an affirmative statement to that effect in the proposal because it is “a known requirement” that will be part of the contract by virtue of it being in the RFP. Mr. Rader, ICA’s executive vice president, testified that it is more costly to contract with RESPECT to provide maintenance services than to contract with another entity to provide those services. Ms. Hyland disagreed with that testimony, as did Ms. Perry. No documentation was provided to support Mr. Rader’s claim that it is more expensive to contract with RESPECT, and the evidence was not persuasive that DBI received a competitive advantage by not affirmatively stating in its proposal that it will grant a first right of refusal to RESPECT. The RFP does not require the vendor to expressly acknowledge and affirmatively agree to meet each and every mandatory requirement in the RFP. Indeed, if this were the test for responsiveness, ICA’s proposal would be nonresopnsive because it failed to expressly acknowledge and affirmatively agree to meet a number of the mandatory requirements in the RFP. DBI’s proposal complies with the intent of the RFP in regards to RESPECT. Its failure to specifically state that it will grant RESPECT a first right of refusal is, at most, a minor irregularity. Failure to Determine DBI’s Responsibility Responsiveness and responsibility are separate, but related concepts in the competitive procurement context. Section 287.012(24), Florida Statutes, defines “responsible vendor” to mean “a vendor who has the capability in all respects to fully perform the contract requirements and the integrity and reliability that will assure good faith performance.” Section 287.012(26), Florida Statutes, defines “responsive vendor” to mean “a vendor that has submitted a bid, proposal, or reply that conforms in all material respects to the solicitation.” In order to bid on certain Department contracts, a vendor has to be pre-qualified under Florida Administrative Code Rule Chapter 14-22. Pre-qualification serves as an advance determination of the vendor’s responsibility. Pre-qualification is generally not required in order to bid on maintenance contracts; bidders are presumed qualified to bid on such contracts. However, as noted in the Bid Solicitation Notice for the RFP, “certain maintenance contracts will contain specific requirements for maintenance contractor eligibility” if deemed necessary by the Department. This is such a maintenance contract. Section 7.1 of the RFP required the Department to determine whether the proposer is “qualified to perform the services being contracted.” That determination was to be made “based upon the[] Proposal Package demonstrating satisfactory experience and capability in the work area.” The RFP did not specify when or by whom this determination was to be made. The Department and DBI contend that the determination required by Section 7.1 is essentially a determination of whether the bidder is responsible, and that the determination is to be made by the evaluators during their scoring of the proposals. In support of that contention, the Department and DBI refer to Section 17.1 of the RFP, which provides that “[p]roposing firms must receive an average technical proposal score of at least (70) percent of the maximum attainable points established for scoring the Technical Proposal to be considered responsive.” Similar language is included in Section 8.2 of the RFP under the heading “Responsiveness of Proposals.” The interpretation of the RFP advocated by the Department and DBI is reasonable, and DBI’s proposal received an average score from the evaluators of 85.40, which exceeds the 70 percent threshold in Section 17.1 of the RFP. Indeed, each of the evaluators gave DBI more than 70 points for its technical proposal. The preponderance of the evidence presented at the final hearing supports the Department's implicit determination that DBI is “qualified to perform the services being contracted,” as required by Section 7.1 of the RFP. DBI has a 29-year history. It employs approximately 700 employees in 34 offices nationwide; it is the largest vegetation management company in the world; and it is ranked in the top five nationally in Pavement Maintenance Magazine. Even though DBI has less experience in comprehensive asset management contracts than does ICA, DBI has extensive experience in managing comprehensive activities under large contracts. DBI has managed over $400 million in performance- based contracts nationwide, including a $9 million comprehensive asset management contract with the Department in District 4 (US 27/Belle Glade area), and DBI’s director of asset management has extensive experience in highway and facility asset management in the private sector with DBI and VMS and in the public sector with the New York Department of Transportation. In sum, a determination that DBI is a responsible bidder was inherent in the Department’s decision to award the contract to DBI, which was based in large part on the technical score of its proposal by the evaluators, and the evidence presented in this de novo proceeding supports that determination. Therefore, even if, as ICA argues, the Department and DBI are improperly construing the word “responsive” in Section 17.1 of the RFP to mean “responsible,” ICA failed to prove that such error is material to the outcome of this proceeding. Failure to Prepare Technical Summary Section 17.1 of the RFP describes the evaluation process as follows: A Technical Evaluation Committee . . . will be established to review and evaluate each Proposal Package submitted in response to this Proposal Solicitation. The Committee will be comprised of at least five persons with background, experience, and/or professional credentials in relative service areas. The District Contracts Office will distribute to each member of the Committee a copy of each technical proposal. The Committee members will independently evaluate the Proposals on the criteria in the section below entitled “Criteria for Evaluation” in order to ensure that the Proposals are uniformly rated. The Committee will then assign points, utilizing the technical evaluation criteria identified herein and complete a technical summary. . . . . (Emphasis supplied). The District Contracts Office and/or the Project Manager/Technical Evaluation Committee will review and evaluate the price packages and prepare a summary of its price evaluation. Points will be assigned based on price evaluation criteria identified herein. During the process of the evaluation, the District Contracts Office will conduct examinations of Proposals for responsiveness to requirements of the Proposal Solicitation. Those determined to be non- responsive will be rejected. ICA contends that the evaluation committee failed to prepare a “technical summary,” which would have brought to light the scoring issues discussed below concerning Ms. Perry. The RFP does not define “technical summary” nor does it specify the form that the summary must take. The RFP does not specify how the evaluation committee as a whole would assign points to the proposals in light of the independent scoring mandated by Section 17.1 of the RFP. The evaluators did not assign points to the proposals as a committee, but rather independently scored the proposals. The evaluators did not meet as a committee to prepare a “technical summary.” Several of the evaluators testified that they considered the evaluation form that they completed for each proposal to be their “technical summary” for the proposal because the form included the scores assigned in each technical review category and summary comments about the proposal. The evaluators did not collectively discuss their scoring of the proposals after they completed their independent evaluations; they simply submitted their completed evaluation forms to Ms. Sanchious. Ms. Sanchious’ office prepared a spreadsheet summarizing the evaluators’ technical scoring of the proposals. The spreadsheet -– Joint Exhibit 33, titled “Proposal Evaluation/Breakdown Sheet” -- lists the scores awarded by each evaluator in each technical review category; calculates the total points awarded by each evaluator for each proposal; and calculates an “overall score” for each proposal by averaging the five evaluators’ scores for each proposal. This spreadsheet is more akin to a “technical summary” than is Joint Exhibit 21, which DBI and the Department contend is the “technical summary.” Indeed, Joint Exhibit 21 only includes the “overall score” and not the underlying data that was used to calculate that score. It was not unreasonable for the Department to calculate an “overall score” for each proposal by simply averaging the five evaluators’ scores for each proposal, and ICA failed to prove that the averaging being done by Ms. Sanchious’ office (instead of the evaluation committee) was a material deviation from the RFP. Indeed, ICA’s contention that discussion amongst the evaluation committee members to prepare the “technical summary” would have changed Ms. Perry’s scoring of ICA’s or DBI’s proposal is speculative, at best, in light of the findings below. In sum, the evaluation committee’s failure to prepare a “technical summary” as required by Section 17.1 of the RFP does not undermine the proposed award to DBI. Scoring by Jennifer Perry Ms. Perry was one of the five evaluators who reviewed the technical proposals submitted in response to the RFP. Ms. Perry is a licensed professional engineer. She has 10 years of work experience with the Department, and she currently serves as the assistant maintenance engineer for District 1. In that capacity, she is responsible for all forms of maintenance contracting in District 1, including routine maintenance and asset maintenance. Ms. Perry served for a time as the project manager for the existing asset management contract for I-75, which was held by ICA. As a result, she had the occasion to work with ICA employees and become familiar with ICA’s performance under that contract. There is no evidence that Ms. Perry is biased against ICA in any way. Indeed, she credibly testified that she had a good working relationship with ICA; that she had no major issues with ICA’s performance under the existing contract; and that she would have had no hesitation recommending that the contract be awarded to ICA if its proposal had received the highest score. Ms. Perry was heavily involved in the preparation of the RFP as a result of her position as assistant maintenance engineer for District 1. She was also involved in the selection of the evaluators. There is no Department rule or policy that prohibits a person from serving as an evaluator if he or she was involved in the preparation of the RFP. Likewise, the fact that Ms. Perry served as the project manager for the asset management contract held by ICA does not preclude her from serving as an evaluator. Indeed, Section 17.1 of the RFP specifically contemplates that the evaluators will have “background, experience, and/or professional credentials in relative service areas.” Similar language is contained in Section 287.057(17)(a), Florida Statutes. Ms. Perry spent between 10½ and 11 hours reviewing and scoring the proposals. She made detailed notes while she was scoring in order to capture her general impressions of each proposal and to serve as a reminder of issues to address with the vendor who was ultimately awarded the contract. Ms. Perry gave ICA’s proposal a score of 74. She gave DBI’s proposal a score of 86. Ms. Perry double-checked her scores before submitting her completed score sheets. She specifically went back over her scoring of ICA’s proposal after she noticed that she scored ICA lower than DBI and VMS because she thought she may have added wrong or overlooked something. She decided not to make changes to give ICA additional points just because she liked working with ICA. The main difference in Ms. Perry’s scoring of DBI's and ICA's proposals relates to Plan for Compliance with Standards (Plan for Compliance) section. She gave ICA 10 points for that section, and she gave DBI 20 points, which is the maximum available for that section. Each of the other evaluators gave ICA and DBI very similar scores in the Plan for Compliance section. The Plan for Compliance section describes the programs that the proposer intends to implement to ensure compliance with the applicable statutes, rules and Department policies. A proposer’s quality assurance/quality control (QA/QC) program is an important component of its plan for compliance. DBI gave the Plan for Compliance section significant emphasis because of the weight assigned to the section in the RFP. Ms. Burlarly-Hyland rewrote the section to make it more detailed because of her perception of its importance to the Department. ICA did not place as significant of an emphasis on the Plan for Compliance section in its proposal as did DBI. Indeed, ICA’s position in this case is that “a plan for compliance is quite standard and one would expect to see very similar plans and therefore very similar scores among the proposals.” DBI references its QA/QC program several times in the Plan for Compliance section, but the detailed description of the QA/QC program is included in the Management and Technical Plan section of DBI’s proposal. Ms. Perry relied on the description of the QA/QC program in the Management and Technical Plan section of DBI’s proposal in her scoring of the Plan for Compliance section. Similarly, in her scoring of the ICA and VMS proposals Ms. Perry did not limit her scoring of a particular section of the proposal to information presented in that section. Instead, she looked at the proposals in their entirety and “gave them credit . . . in any section that [she] felt it applied to because . . . [i]f they have a good idea, they need credit for it.” Ms. Perry explained that that she scored DBI higher than ICA in the Plan for Compliance section because, even though both proposals discussed their QA/QC program, DBI went into much greater detail about its program and its plan for compliance generally. Ms. Perry viewed the level of detail provided by DBI regarding its QA/QC program and its plan for compliance generally as an indication of the importance of these matters to DBI. Some of the material differences identified by Ms. Perry were DBI’s commitment to do its first QA/QC within the first three months instead of waiting six months as ICA proposed; DBI’s identification of a high-level person, the project manager, as being responsible for compliance; DBI’s commitment to provide its QA/QC reports directly to the Department; DBI’s “corporate culture concept” program that is similar to the Department’s “grassroots” program; DBI’s more detailed description of its training programs; and DBI’s commitment to have all of its herbicide applicators licensed by the state, not just in compliance with state law. Ms. Perry’s rationale for her scoring differences on the Plan for Compliance section is generally consistent with another evaluator’s “overall impression” that “the ICA proposal did not offer a lot of new innovation or continuous quality improvement over the level of performance that we had already experienced and . . . we were hoping to have in reletting the new contract rather than renewing the existing contract ”5 ICA also takes issue with Ms. Perry’s scoring of the ICA and DBI proposals in the DBE/RESPECT/Agency Participation section; the Proposed Facilities Capabilities section; the Routine/Periodic Maintenance Operations section; and the Rest Area Maintenance Operations section. Ms. Perry gave DBI’s proposal five points and ICA’s proposal three points for the DBE/RESPECT/Agency Participation section. She explained that she scored DBI higher than ICA in this section because DBI provided more detail on how it would help develop disadvantaged business subcontractors, including training them on compliance with Department standards and helping them obtain work. She recognized that ICA also had a subcontractor development program, but she was more impressed with DBI's proposal because “DBI really went into a lot more detail in what they were going to do.” Ms. Perry gave DBI’s proposal five points and gave ICA’s proposal three points for the Proposed Facilities Capabilities section. She explained that she scored DBI higher than ICA in this section because of the amount and type of equipment that DBI was going to make available for the contract and because of DBI’s commitment to put an office on the Alligator Alley corridor. Ms. Perry felt that the Alligator office was “very important” because that area is isolated and having an office in the area would make it easier for the contractor to respond quickly to problems. ICA’s proposal did not commit to put an office on the Alligator Alley corridor. Ms. Perry gave DBI’s proposal ten points and gave ICA’s proposal six points for the Routine/Periodic Maintenance Operations section. She explained that she scored DBI higher than ICA in this section because DBI’s proposal included a week- by-week maintenance plan that detailed the specific activities that DBI would be working on each week and it also included detailed charts identifying the efforts that DBI would undertake to meet the requirements of the Department’s maintenance program. The description of the maintenance plan in ICA’s proposal was not nearly as detailed, and Ms. Perry was so impressed with DBI’s maintenance plan that she provided copies of the plan to the other districts’ operation centers as an example of the type of detained planning that she felt the Department should move towards. Ms. Perry scored ICA and DBI the same for the Rest Area Maintenance Operation section. She explained that even though the proposals focused on different aspects of their rest area maintenance plans, the plans were roughly equivalent overall. For example, DBI committed to maintain the rest areas in accordance with the Department’s standard maintenance requirements and, like ICA, DBI will handle customer comment cards from rest areas through its QA/QC program. Ms. Perry scored ICA higher than DBI in areas that she found ICA’s proposal to be better than DBI’s proposal. For example, in the Identification of Key Personnel Section, she gave ICA four points and DBI three points; in the Contractor Experience section, she gave ICA the maximum five points and DBI two points; in the Bridge Inspection section, she gave ICA the maximum 10 points and DBI seven points; in the Incident Response Operations section, she gave ICA nine points and DBI eight points; and in the Bridge Maintenance Operations section, she gave ICA the maximum five points and DBI three points. Ms. Perry’s explanation of her scoring decisions was reasonable and supported by the preponderance of the evidence presented at the final hearing. The evidence fails to establish that Ms. Perry's scoring of the proposals was arbitrary, capricious, or otherwise improper.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department issue a final order dismissing the Formal Protest Petition filed by ICA, and awarding Contract No. E1G23 to DBI. DONE AND ENTERED this 14th day of December, 2007, in Tallahassee, Leon County, Florida. S T. KENT WETHERELL, II 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 14th day of December, 2007.
The Issue At issue in this proceeding is whether the decision of the respondent, Department of Administration (Department), to reject, as untimely, the proposals submitted by petitioner, Medco Containment Services, Inc. (Medco), and intervenor, Preferred Employee Pharmaceutical, Inc. (Preferred), comported with the essential requirements of law, and whether the Department should exercise its discretion to reject all proposals and extend a new request for proposals.
Findings Of Fact Background On June 14, 1991, the Department of Administration, Division of State Employees' Insurance (Department), issued Request for Proposal No. 91-15 for a mail order prescription drug program (hereafter the "RFP"). The deadline for submitting sealed proposals in response to the RFP, as amended, was established as 2:00 p.m., August 2, 1991, and the time for opening proposals was established as 2:01 p.m., August 2, 1991. Pertinent to the deadline for submitting proposals established by the RFP, the RFP provided, at General Condition 3 (DGS Form PUR 7033): PROPOSAL OPENING: Shall be public on the date, location and the time specified on the acknowledgment form. It is the proposers responsibility to assure that his proposal is delivered at the proper time and place of the proposal opening. Proposals which for any reason are not so delivered will not be considered. . . . The RFP further provided at Section III, subsection L: Proposals must be mailed or hand delivered to arrive at the time, date and address as shown in the Schedule of Events. ALL PROPOSALS WILL BE PUBLICLY OPENED ON THE TIME, DATE AND ADDRESS SHOWN IN THE SCHEDULE OF EVENTS. ANY PROPOSALS RECEIVED AFTER THIS SPECIFIED TIME AND DATE WILL BE RETURNED UNOPENED. At the time of the deadline, the Department had received a number of proposals, including that of intervenor, Revco D.S., Inc. (Revco). Thereafter, at 2:02 p.m. on the bid opening date, the Department received proposals from petitioner, Medco Containment Services, Inc. (Medco), and intervenor, Preferred Employee Pharmaceuticals, Inc. (Preferred). These late submittals were rejected by the Department as untimely. Medco and Preferred contest the propriety of the Department's rejection of their proposals as untimely, and contend that the late submission of their proposals was a minor irregularity that should be waived by the Department or, alternatively, that the Department should exercise its discretion to reject all proposals and extend a new request for proposal. Pertinent to the position advocated by Medco and Preferred, the RFP provided, at General Condition 6: AWARDS: As the best interest of the State may require, the right is reserved to reject any and all proposals or waive any irregularity or technicality in proposals received. . . . However, no persuasive proof was offered that it was in the best interest of the state to waive the late filing of such proposals or reject all proposals. 2/ The Department, contrary to the contentions of Medco and Preferred, has evidenced no intention during the course of these proceedings to waive, as a minor irregularity, the late submission of their proposals in light of the mandatory language of the RFP regarding the rejection of such late submittals, and has evidenced no intent or advanced any reason to exercise its discretion to reject all bids. The circumstances surrounding the late submittal of the Medco and Preferred proposals In response to the RFP, Medco prepared a proposal at its Montvale, New Jersey, offices. 3/ The proposal was enclosed in a box which was entrusted, along with a second box containing Medco's response to the Department's RFP No. 91-14 for a prescription drug card program, to a courier service in Montvale on the afternoon of August 1, 1991, for delivery to the Department prior to 2:00 p.m., August 2, 1991. While both boxes apparently arrived in Tallahassee, Florida, the morning of August 2, 1991, the local courier service only picked up one box, that containing Medco's proposal in response to RFP No. 91-14. Not until 1:00 p.m. that day was such oversight discovered by a second courier service, which then took possession of Medco's response to the subject RFP (RFP No. 91-15) and delivered it to the Department at 2:02 p.m. that day. Preferred, located in Davie, Florida, also prepared a response to the subject RFP. On the morning of August 2, 1991, Preferred entrusted its proposal to US Air's PDQ courier service for delivery to the Department prior to 2:00 p.m. that date. The courier service did not, however, deliver Preferred's proposal to the Department until 2:02 p.m. Following the receipt of the Medco and Preferred proposals, they were taken to the bid opening room, where the bid opening for the RFP had already commenced. At that time, only envelopes which contained "no bids" (a notice that the respondent did not wish to submit a proposal) had actually been opened. Notwithstanding, based on the untimeliness of their submittal, the Department rejected the Medco and Preferred proposals. 4/ During the course of the public opening of the proposals that had been timely submitted, the cost proposals of such potential vendors were announced and posted. However, the award process has been stopped pending resolution of this protest and all proposals that were timely submitted are currently in the custody of the Department's evaluation team. 5/ By letters of August 7, 1991, addressed to Medco and Preferred, the Department advised such parties that, under separate cover, it was returning their proposals since they had not been received until after the opening of proposals had commenced. Medco refused to accept delivery of its proposal from the United States Post Office and it was returned to the Department, where it currently remains. Regarding the integrity of such proposal, the proof demonstrates that at no time since it was originally entrusted to the courier service by Medco on August 1, 1991, until the present has such proposal been opened or in any other manner been tampered with. Regarding the Preferred proposal, the proof demonstrates that upon the return of such proposal it was opened, and remains in Preferred's possession.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is recommended that a final order be entered which dismisses the protests of Medco and Preferred. RECOMMENDED in Tallahassee, Leon County, Florida, this 23rd day of October, 1991. WILLIAM J. KENDRICK, 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 October, 1991.
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.
Findings Of Fact Petitioner works for the Department of Transportation as an Engineer Technician III in the maintenance section of the Tallahassee field office in Leon County, Florida. Petitioner's position requires that he perform certain tasks in Leon, Gadsden, Jefferson, Wakulla, Franklin and Liberty counties. Ninety percent of Petitioner's duties involve the inspection of contract maintenance work within a six county area to ensure conformance to contract specifications, department specifications, rules, regulations, and policies. More specifically, Petitioner inspects, supervises, or measures: (a) work zone traffic control and maintenance of traffic setup; (b) contract roadside mowing, slope mowing, small machine mowing and hand trimming; (c) removal and replacement of existing striping, symbols and raised pavement markers; (d) roadway sweeping and edging and roadside litter removal; (e) tree trimming; and (f) brush removal, drainage repair and other activities assigned to Department of Corrections crews. Petitioner's job also requires him to: (a) prepare forms used for various concrete projects and daily inspection reports; (b) sample and test concrete and other materials as required; (c) calculate data and input it to computer for weekly status reports; (d) participate in Department/Contractor pre-construction conferences; (e) measure, compute and computerize quantities to be used for future contracts; (f) measure, calculate, and input to computer contract quantities to determine payment to contractors and for reporting to Respondent; and (g) assist in contract office administration by preparing required correspondence, documents and quantities on a personal computer. Approximately five percent of Petitioner's time is spent making daily pre-trip inspections of vehicles, tools and equipment including cleaning and maintenance or scheduling of maintenance. The remaining five percent of Petitioner's time is spent performing other duties as required. At times, Respondent's employees, including Petitioner's supervisors, have site meetings with county commissioners, county permitting officials, and/or their delegates. Occasionally Respondent enters into contracts, memoranda of agreement and joint participation agreements with counties and boards of county commissioners. Respondent's enforcement of these contracts sometimes conflicts with the desires of the local government. Petitioner currently provides specifications and inspects work being done by the county for driveways or county road intersections on a state highway. It is his responsibility to ensure that county employees comply with all specifications when widening turning lanes, deceleration lanes, and acceleration lanes or when placing culverts in ditches. Petitioner's job requires him to meet with county residents and private contractors to inspect work performed under a Department of Transportation permit. County residents often call upon their county commissioners to assist them when problems arise in the permitting or inspection process. Petitioner is not actively involved in issuing permits and awarding contracts. However, if Petitioner campaigns or becomes a county commissioner, a conflict of interest would arise any time the county residents put pressure on him to intercede on their behalf and take a position contrary to that of Respondent. In that case, Petitioner would be in a situation where regard for a private or local interest might lead to a disregard for the employee's duty as a state employee.
Recommendation Based upon the findings of fact and the conclusions of law, it is, RECOMMENDED: That Respondent enter a Final Order denying Petitioner's request to campaign for, and to hold, the office of county commissioner in Liberty County, Florida. DONE and ENTERED this 6th day of May, 1996, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD, 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 6th day of May, 1996. APPENDIX CASE NO. 95-5901 The following are the Hearing Officer's specific rulings on the finding of facts proposed by the parties in their proposed findings of fact. Petitioner's Proposed Findings of Fact Accepted in Findings of Fact 1 of this Recommended Order. Accepted in part in Findings of Fact 2-6 of this Recommended Order. Not supported by competent substantial evidence. The letter from the Clerk to the Board of County Commissioners of Liberty County is hearsay which is not sufficient to support a finding of fact. Section 120.58(1)(a), Florida Statutes. Irrelevant. Accepted in Finding of Fact 11 of this Recommended Order. Accept that, if elected, Petitioner would be a member of a board who could abstain from voting on matters involving a conflict of interest. However, reject that the influence of a county commissioner is limited to formal votes during board meetings. Therefore, irrelevant. Accepted in part in Finding of Fact 11. However, Petitioner admits that he could be required to work in permitting at anytime. Accept, however, if elected, Petitioner as a county commissioner would be meeting with the Assistant District Maintenance Engineer to discuss some issue then, as the state's inspector, be required to follow the engineer's policy decisions regardless of Petitioner's political position on that issue. Accept. However, the conflict of interest would still exist. Reject as not supported by persuasive competent substantial evidence. See above. Reject as not supported by persuasive competent substantial evidence. Reject. See above. Accept in Findings of Fact 11 of this Recommended Order. Respondent's Proposed Findings of Fact Accepted in part in Preliminary Statement. Petitioner's allegations are not findings of fact. Accepted as reasons Respondent gave for not giving Petitioner authorization to campaign and hold office. Accepted. See Preliminary Statement. Accepted in Findings of Fact 1 of this Recommended Order. Accepted in Findings of Fact 1 of this Recommended Order. Accepted in Findings of Fact 9 of this Recommended Order. Accepted in Findings of Fact 2 of this Recommended Order. Not necessary for resolution of the case. Accept as a specific example of conflict described in Findings of Fact 10 of this Recommended Order. Accepted as restated in Findings of Fact 9-11 of this Recommended Order. COPIES FURNISHED: Charles G. Gardner, Esquire Dept. of Transportation 605 Suwannee Street Tallahassee, FL 32399-0458 David Summerlin Post Office 122 Hosford, FL 32334 Ben G. Watts, Secretary Attn: Diedre Grubbs Department of Transportation Mail Station 58 Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0450 Thornton J. Williams, Esquire Department of Transportation 562 Haydon Burns Building Tallahassee, FL 32399-0450
The Issue The issue for determination is whether Respondent's intent to award a contract for bridge-tending services (RFP DOT 92/93 2088 REBID) to Intervenor constitutes fraudulent, arbitrary, capricious, illegal or dishonest action.
Findings Of Fact The parties stipulated to findings of fact set forth in paragraphs 1.-12., below. Stipulated Facts Respondent issued the RFP for bridge-tending services on May 14, 1993. Proposals submitted in response to the RFP were opened on June 16, 1993. Proposals were submitted by five firms, including Petitioner and Intervenor. All proposals were determined at the time to be responsive. A Technical Review Committee (TRC) was appointed to review the technical portion of the proposals. The three members of the TRC were Alan Hyman, J. L. Gillis, and Yingyong Sujjavanich. The members reviewed the technical portion of the proposals on June 17, 1993. The evaluation forms completed by the TRC and a summary score sheet were delivered to Respondent's purchasing office on the morning of June 18, 1993. The price proposal was evaluated by Respondent's purchasing office. The price evaluation of each proposal was performed by applying a formula which compared the submitted price quotations. After the scores for the technical proposal and the cost proposals were totalled, it was determined that Intervenor's proposal had earned the highest number of points. This result was presented to Respondent's District 2 Executive Committee and a recommendation was communicated by the Purchasing Director to award the RFP to Intervenor. The Executive Committee accepted the recommendation and directed that the contract be awarded to Intervenor. On June 18, 1993, at 4 p.m., the bid tabs were posted noticing Respondent's intent to award the contract to Intervenor. On or about July 6, 1993, Petitioner requested a meeting with Respondent's representatives regarding the RFP. That meeting was held on July 9, 1993. At the meeting, Petitioner raised an issue regarding an arithmetic error in the scoring of the technical proposals. Intervenor remained the proposer with the highest number of points. However, another proposal formerly ranked as number two was lowered to number three status and Petitioner, previously ranked number three, was raised to number two rank. On July 12, 1993, Respondent posted an amended bid tab indicating its intent to award the contract to Intervenor. Other Facts Respondent chose to score the bid pricing, a non- subjective task, in Respondent's District 2 office. Technical portions of the proposals were reviewed by the TRC, comprised of members from Respondent's District 5 office. This unusual step was taken by Respondent in order to reduce prejudice to any proposal in view of previous accusations made against District 2 employees. Bud Rosier, Respondent's employee, has overall responsibility for bridge determination that District 5 employees chosen as committee members were qualified to evaluate the proposals. Each response to the RFP contained a technical proposal and a price proposal. Intervenor's technical proposal received 1.33 points less than Petitioner's technical proposal. The price proposals, as noted above, were scored in accordance with a mathematical formula that compares price proposals to each other and does not take any subjective factors into consideration. Intervenor was awarded 5.55 points, compared to Petitioner who received no points for a proposal more than $140,000 higher for the initial year of the contemplated contract. Although members of the TRC were not given any background information by Respondent regarding the competing proposals, beyond that contained in the submitted bid packages, no information was withheld from the committee. The members were given adequate time to review the proposals and do any desired independent background checking regarding past performance of any proposer, although no requirement in the RFP mandated such a background review. At least one of the TRC members, Sujjavanich, chose not to independently research past performance of the Intervenor. No evidence was offered at hearing with regard to whether the other two members independently researched any of the proposers' past performances. Even if review of past performance, apart from the materials submitted by the proposers, were required by provisions of the RFP, failure of the evaluators to accomplish that task would result only in the loss to Intervenor of the 3.66 points awarded for past performance and Intervenor, with a remaining total of 81.89 points, would remain the highest ranked proposer. In view of the objective process used to arrive at the results of the evaluation of the prices of the competing proposals, there was no need to provide this information to the members of the TRC who were doing the technical proposal evaluation. Although the RFP provided that the TRC would be given such results, the failure of Respondent's personnel to provide this information to the evaluators could not have made any difference in the final result since the committee, using the objective price evaluation criteria, would have arrived at the same result as the purchasing office on cost scores. The admitted failure to provide the superfluous cost information to the TRC is inadequate to show that such omission resulted in prejudice to the final scores of any of the competing proposals and must be considered to be only a minor variation from the RFP by Respondent. Contrary to Petitioner's allegations, there is no competent substantial evidence to support any finding that the members of the TRC (Hyman, Gillis, and Sujjavanich) did not possess required background, experience or professional credentials adequate for evaluating proposals for bridge-tending services. All three members of the TRC were familiar with the RFP, attachments to the RFP, bridge-tending procedures and bridge-tending qualification procedures. There is no competent substantial evidence to establish that Intervenor's proposal is not financially feasible. Proposed utilization of 72 bridge-tenders by Intervenor for a total price of $673,333.44 does not mean that 72 bridge-tender positions would be established or filled, or that the positions would be paid at the rate proposed by Petitioner of $8.40 per hour. The evidence establishes that a proposer would need an optimum number of bridge requirements.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered granting the award of the bid in RFP DOT 92/93 2088 Rebid to Intervenor. DONE AND ENTERED this 4th day of October, 1993, in Tallahassee, Leon County, Florida. DON W. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of October, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-4271BID The following constitutes my specific rulings, in accordance with Section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's Proposed Findings. 1.-12. Accepted. 13.-16. Rejected, relevancy. 17. Accepted. 18.-19. Rejected, relevancy. 20.-25. Accepted. 26.-27. Rejected, cumulative. 28. Rejected, credibility. 29.-33. Rejected, relevancy. 34.-35. Accepted. 36.-37. Rejected, argumentative and mischaracterization. 38.-46. Rejected, subordinate to HO findings. 47.-51. Rejected, relevancy. Intervenor's Proposed Findings. 1.-2. Rejected, cumulative. 3.-4. Accepted. 5.-6. Rejected, unnecessary. Rejected, cumulative. Rejected, unnecessary. Rejected, argumentative. 10.-11. Rejected, unnecessary. 12.-13. Adopted by reference. 14.-16. Accepted, but not verbatim. 17.-22. Adopted by reference. 23. Rejected, unnecessary. 24.-30. Adopted, but not verbatim. 31. Rejected, narrative. 32.-35. Rejected, cumulative. Respondent's Proposed Findings. 1.-11. Adopted. 12. Rejected, unnecessary. 13.-17. Adopted, not verbatim. 18.-19. Rejected, cumulative. 20.-22. Adopted. 23. Rejected, recitation of RFP. 24.-26. Adopted. 27. Rejected, recitation of RFP. 28.-29. Adopted in substance. COPIES FURNISHED: Thomas Cassidy, III, Esquire. John O. Williams, Esquire Renaissance Square 1343 East Tennessee Street Tallahassee, Florida 32308 Carolyn S. Holifield, Esquire Mark D. Tucker, Esquire Department of Transportation Haydon Burns Building, Mail Station 58 605 Suwanee Street Tallahassee, Florida 32399-0458 Timothy G. Schoenwalder, Esquire 204-B South Monroe Street Tallahassee, Florida 32302-3068 Ben G. Watts, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399 Thornton J. Williams General Counsel Department of Transportation Haydon Burns Building # 562 605 Suwannee Street Tallahassee, Florida 32399
Findings Of Fact Standard Specifications are a part of every DOT construction contract issued. Subsection 8-1.1 of these standard Specifications provides that a subcontractor shall be recognized only in the capacity of an employee or agent of the Contractor, and his removal may be required by the Engineer, as in the case of any employee (Exhibit 1). Subsection 8-5 thereof provides the Contractor shall assure that all superintendents, foreman and workman employed by him are competent, careful and reliable (Exhibit 3). All contracts entered into by DOT provide for a contract completion time and provide for adjustment to the contract period for delays in construction due to factors beyond the contractor's control which could not be reasonably anticipated at the time bids for the contract were received (Exhibit 4). Requests for extension of contract time are made by the Contractor to DOT, and each request is evaluated on its merits. Often these requests for extension of contract time are made after the contract is completed and the contractor is seeking relief from penalties accrued as a result of his failure to complete the contract in the time allocated. Prior to 1987, all contracts entered into by DOT contained built-in delays based on average weather conditions expected during the contract period. Since mid-1987, contract delays due to expected adverse weather are not included in the contract time, but the period is subsequently adjusted based on daily recording of weather conditions during the contract period. There is no policy by DOT, as suggested by Petitioner, that delays due to weather outside the initial contract period but within the extension granted due to weather delays will not be considered by DOT in granting extensions of contract time. Federal Department of Transportation grants to Florida DOT for road construction in Florida contain a provision that a certain percentage of the contract must be subcontracted to DBE's. This provision is included in the contracts on which the prime contractors submit bids. In order to qualify as a responsible bidder on these contracts, the Contractor must show compliance with the DBE quota for the job at the time his bid is submitted or show that despite good faith efforts the Contractor was unable to meet the DBE goals. DOT certifies individuals and companies which meet the minority business standards needed for certification and maintains a current list of all potential subcontractors who can be used by the Contractor to meet the DBE quota for the specific contract on which the Contractor bids. These DBE subcontractors are not qualified by DOT as capable to perform the work for which they hold themselves out as able to perform. DOT qualifies no subcontractors, either DBE or non-DBE. In the event the Contractor needs to replace a subcontractor for any reason, his application to replace a non- DBE subcontractor is routinely approved by DOT. However, if the Contractor proposes to replace a DBE subcontractor, the Contractor must replace him with another DBE subcontractor (if this is necessary to retain the required DBE participation) and show to DOT that the replacement was for just cause and does not constitute unlawful discrimination. Accordingly, it is more likely to delay a project if a DBE subcontractor is replaced for failure to perform the work for which he subcontracted than if a non-DBE subcontractor has to be replaced for the same reason. Although DOT individually considers each request for extension of contract time, it treats delays resulting from DBE subcontractor performance the same as it treats delays resulting from non-DBE subcontractor performance. As noted in finding 2 above, the contract provides that subcontractors are agents or employees of the Contractor. Accordingly, extensions of time for completion of the contract are not generally granted when the delay is due to the agents or employees of the Contractor. It is the refusal of DOT to treat DBE subcontractors different from non-DBE subcontractors that forms the basis of Petitioner's challenge to this "policy" that extensions of contract time are not granted when the delay was due to the DBE subcontractor failing to comply with his subcontract which failure was "beyond the control" of the Contractor.
The Issue The issue in this case is whether Respondent's intended award of a contract to Intervenor pursuant to Request for Proposals No. 10-DC-8200 is contrary to Respondent's governing statutes, Respondent's rules and policies, and the specifications of the Request for Proposals.
Findings Of Fact The State of Florida has, by legislative enactment, developed programs to electronically supervise offenders sentenced under a community control alternative to prison, and to supervise, register, and monitor designated sexual offenders and predators under the Jessica Lunsford Act. The Department of Corrections is the agency charged with the implementation of the electronic monitoring program, and to ensure that probation officers and other community supervision personnel have access to offender monitoring data. Pro Tech and BI are both well-recognized and established providers of electronic monitoring devices and monitoring and reporting services to federal, state, and local law enforcement and correctional agencies in Florida and across the United States. Pro-Tech is the incumbent vendor to the Department for electronic monitoring services. RFP 10-DC-8200 On August 30, 2010, the Department issued RFP 10-DC- 8200, the purpose of which was to select a contractor to provide active Global Positioning Satellite (GPS) electronic monitoring services for supervision of offenders sentenced under a community control alternative to prison, and to monitor designated sexual offenders and predators under the Jessica Lunsford Act. As of June 30, 2010, the Department was utilizing approximately 2,538 active GPS units to monitor offenders. The Department projected that within three years, as many as 3,015 offenders would be on active GPS monitoring. The scope of work for the contract was detailed in section 3 of the RFP. Briefly, the winning vendor is expected to ?provide active [GPS] services 24 hours a day, 7 days a week, which shall include a monitoring system that is capable of being accessed through a secure internet connection and fully supported by a secure database for transactional records.? Provisions of the RFP that are material to this proceeding include, by section number, the following (all emphasis is in the original): 1.13 Mandatory Responsiveness Requirements: Terms, conditions or requirements that must be met by the proposer to be responsive to this RFP. The responsiveness requirements are mandatory. Failure to meet the responsiveness requirements will cause rejection of a proposal. Any proposal rejected for failure to meet mandatory responsiveness requirements will not be evaluated. Material Deviations: The Department has established certain requirements with respect to proposals to be submitted by Proposers. The use of shall, must or will (except to indicate simple futurity) in this RFP indicates a requirement or condition which may not be waived by the Department except where any deviation therefore is not material. A deviation is material if, in the Department's sole discretion, the deficient response is not in substantial accord with this RFP's requirements, provides an advantage to one Proposer over other Proposers, or has a potentially significant effect on the quantity or quality of items or services proposed, or on the cost to the Department. Material deviations cannot be waived and shall be the basis for rejection of a response. Because this is an RFP, the Department will apply this definition liberally in reviewing responses in regard to service delivery. Minor Irregularity: A variation from the RFP terms and conditions which does not affect the price proposed or gives the proposer an advantage or benefit not enjoyed by the other proposers or does not adversely impact the interests of the Department. 5.2.9 The Proposer shall provide for both the Contractor and Contractor‘s personnel, copies of any and all documents regarding complaints filed, investigations made, warning letters or inspection reports issued, or any disciplinary action imposed by Federal or State oversight agencies within the past five (5) years. Narrative/Record of Past Experience As indicated in Section 2.2 and Attachment 1, it is a mandatory responsiveness requirement that the Proposer has at least three (3) years of business/corporate experience within the last five (5) years relevant to providing electronic monitoring services and equipment similar to the services described in this RFP, to correctional, criminal justice or law enforcement agencies. Details of the Proposer‘s experience that meet this requirement shall be provided in narrative form and in sufficient detail so that the Department is able to judge its complexity and relevance. Specifically include: provide a description of past years‘ experience providing electronic monitoring equipment and services. provide a description of past experience and the specific length of time providing Active GPS services (as identified in this RFP). identify all current and/or past (or within three (3) years) federal, state or government contracts for the provision of electronic monitoring services, and the number of active GPS units utilized for each. provide a narrative summary of contract performance in the above-identified contracts, including any major adverse findings. provide the name and telephone number and address for the specified federal, state, or government contract manager. provide a summary of any exemplary or qualitative findings, recommendations, or other validations, demonstrating operational experience. (i.e., specialized accreditation, grant awards, etc.). The proposer shall provide a detailed description of the General Equipment specifications that meets or exceeds all requirements in Section 3.7.2 and specifically: provide manufacturer‘s specifications and literature on all equipment proposed, including equipment which is acquired from any other source than the proposer; describe the process utilized to notify the Department and/or the offender when a low battery condition exists in any component of the equipment (transmitter or receiver dialer); describe and list the tools necessary for installation of any of the monitoring unit equipment; and provide copies of required licensing by the Federal Communications Commission for the equipment proposed. The proposer shall provide a detailed description of the Contractor‘s method and approach for meeting or exceeding all Monitoring Center requirements in Section 3.13, and specifically: provide a copy of the staffing plan for monitoring services twenty four (24) hours a day, seven (7) days a week, including holidays; and provide a copy of the Disaster Recovery plan. The proposer shall provide a detailed description of the approach to meeting or exceeding all Training requirements in Section 3.16, and specifically: provide a description of the method(s) for securely sizing and installing the transmitter securely to offenders; provide a copy of the training curriculum; and provide a copy of proposed course/instructor evaluation form. Please note - final evaluation form to be approved by Contract Manager and/or designee. As part of the RFP process, each interested vendor was allowed to submit questions regarding the terms of the RFP, and the services being sought. The Department responded to each of the 72 questions submitted. On November 2, 2010, the responses, along with revised RFP pages resulting therefrom, were provided to each prospective vendor as RFP #10-DC-8200 Addendum #1. Among the questions for which the Department provided answers were the following: Question #11: Sections 5.3.2.3 & 5.3.2.4 on Page 38 requires that we: ?identify all current and/or past (or within (3) years) federal, state or government contracts for the provisions of electronic monitoring services, . . . .? And that we ?provide a narrative summary of contract performance in the above identified contracts,. . .? In the case of Pro Tech, this would amount to more than a hundred contracts resulting in a voluminous response. Perhaps a more reasonable requirement would be to provide the information for our 10 largest or 10 most similar contracts. Answer #11: These requirements remain as stated in the RFP. Question #16:5.3.2. Narrative/Record of Past Experience identify all current and/or past (or within three (3) years) federal, state or government contracts for the provision of electronic monitoring services, and the number of active GPS units utilized for each. Question: Since it is feasible that Proposers could have several hundred current/past contracts, will Florida Department of Corrections consider revising the requirement to be “Provide the total number of current and/or past (or within 3 years) federal, state or government contracts?” Answer #16: This requirement remains as stated in the RFP. Question #17: provide a narrative summary of contract performance in the above-identified contracts, including any major adverse findings. Question: Since it is feasible that Proposers could have several hundred current/past contracts, will Florida Department of Corrections consider revising the requirement to be “Provide a performance summary of all contracts past/present?” Answer #17: This requirement remains as stated in the RFP. Question #28: Should respondents view ?shall? and ?must? language as mandatory requirements? Answer #28: This question is confusing different terms. See Section 1.13 that defines ?Mandatory Responsiveness Requirements?. See Section 1.15 that defines ?Material Deviations? which explains the terms ?shall and must?, and should not be confused with Section 5.1 Mandatory Responsive Requirements/ Fatal Criteria. Each proposed vendor signed an Addendum Acknowledgement Form for RFP #10-DC-8200 Addendum #1, and included it as part of its proposal. By signing and submitting the Addendum Acknowledgement Form, the vendors understood that the changes reflected in the Addendum ?are applicable to the original specifications of the above-referenced RFP? and that ?this addendum now becomes a part of the original RFP.? No prospective vendor filed a protest of any of the terms, conditions, or specifications of the RFP or Addendum #1. Proposals in Response to the RFP Proposals were submitted on November 22, 2010, by Pro Tech and BI, as well as five other electronic monitoring vendors, G4S Justice Services, LLC, iSecureTrac Corporation, Satellite Tracking of People, LLC, SecureAlert, and SOS International. BI proposed using its ExacuTrack One monitoring device to monitor offenders in Florida. The ExacuTrack One is a single piece device that is affixed to the offender‘s ankle. The unit contains a GPS signal receiver, a transmitter, cellular capability to transmit data to the monitoring center, a speaker for transmitting warnings, a device for the offender to transmit acknowledgement signals, and a rechargeable battery. The ExacuTrack One device meets the specifications of the RFP. When offenders go into prohibited areas, or when tracking capabilities are interrupted, either through shielding of the GPS signal or unauthorized tampering with the device, an alert is transmitted to the monitoring center. Each customer has a time interval set by contract by which a notification is sent to the customer, which may vary based on the nature of the alert. For example, if an offender strays into a prohibited area, an alert is transmitted to the monitoring center. If the offender exits the area before the contractual time interval is exceeded, a violation report is not required. The ExacuTrack One device has the ability to transmit an audible alert to the offender when the offender enters into an exclusion zone or otherwise violates the terms of his or her release. When an audible alert is given, the offender is required to acknowledge receipt of the alert, and to exit the area. The ExacuTrack One units are fully capable of meeting the requirements of the RFP operating on their own. However, in order to provide an option to conserve battery life of the ankle device, BI proposed to use a radio frequency ?Beacon.? When an offender is in range of his or her Beacon, generally being within the perimeter of the offender‘s home, the GPS feature goes into a low power state, and data is transmitted through the Beacon, thus extending the battery charge. BI considered the Beacon to be an optional device that exceeded the requirements of the RFP, and that could be provided at no additional cost at the discretion of the Department. Monitoring of the ExacuTrack One device may be accomplished in one of two ways. The monitoring system and devices can be sold to an agency which then provides its own monitoring, referred to as a ?local host? facility. The more commonly used system and that proposed for Florida, is one in which the monitoring devices are provided to the agency, with the resulting data sent to the BI monitoring center. The data is then stored and made available through the TotalAccess case management system. Department staff, correctional and probation officers, and other authorized users can access the system to perform a number of tasks, and are notified according to contract when monitoring alerts are transmitted to the monitoring center. The BI monitoring center has fully redundant capabilities, with all data being replicated both at the primary monitoring center in Boulder, Colorado, and at the backup center in Anderson, Indiana. Review of the Proposals Mandatory Responsiveness Requirements Review The Department initially reviewed each of the proposals to determine if Mandatory Responsiveness Requirements were met. Pursuant to section 5.1 of the RFP, the only Mandatory Responsiveness Requirements/Fatal Criteria were: a) that the complete proposal be submitted on time; and b) that the certification and cover sheet be signed. No prospective vendor was determined to be non-responsive for either of the Mandatory Responsiveness Requirements. Material Deviations/Minor Irregularities Review The procedure by which the Department was to begin the process of review of those proposals that survived the Mandatory Responsiveness Requirements/Fatal Criteria review was for procurement staff to review the proposals ?for compliance with the items required in the . . . Proposal Submissions outlined in Section 5 of the RFP.? The purpose of the compliance review was to determine whether the proposals contained any deviations from the terms, conditions, and specifications of the RFP, and whether such deviations were material deviations requiring rejection of a response, or whether they were waivable minor irregularities. If a deviation was determined to be a minor irregularity, the Department reserved the right to require additional information prior to the contract award. Kelly Wright was the Department staff person who was directly, and almost exclusively, responsible for the RFP. Ms. Wright was, in consultation with the Department‘s subject matter experts, the primary drafter of the RFP. She was responsible for vendor questions and for preparing the Addendum #1 in which those questions were answered. She prepared the evaluation manual, trained the evaluators, and compiled their scores. She performed the review of the proposals for compliance with the mandatory requirements/fatal criteria, and reviewed the executive summaries and transmittal letters. It was also Ms. Wright‘s responsibility to identify deviations from the RFP requirements and initiate the process by which such deviations were resolved. Gail Hillhouse, who is Ms. Wright‘s supervisor, and is an active participant in the decision-making process for other procurements, was not materially involved in Request for Proposals No. 10-DC-8200. She did not assist Ms. Wright in the review of responses, nor was she involved in the process of resolving deviations of the proposals from the terms of the RFP. Ms. Hillhouse never reviewed the BI proposal at any time prior to the posting of the award. If during the course of the pre-evaluation review of the proposals, or otherwise during the selection process, a deviation from the terms, conditions, and specifications was discovered, Ms. Wright was to take it directly to her bureau chief, Robert Staney. Mr. Staney‘s practice was to consult with the Department‘s legal staff, and then make a determination as to whether the deviation was a non-waivable material deviation under section 1.15 of the RFP, or a waivable minor irregularity under section 1.16 of the RFP. The Department appointed an Evaluation Committee to evaluate the proposals. The evaluators were charged with scoring the proposals as they were provided to them. The evaluators were not asked to determine whether any provision of the responses constituted a material deviation from the terms, conditions, or specifications of the RFP, and none did so. The evaluators were provided with scoring sheets that established the factors, referred to as ?considers,? that were to go into each individual score by section. Most sections contained multiple ?considers? that were to be evaluated to determine the overall score for that section. In the event a proposal was ?completely utterly unresponsive? as to the ?considers? listed for a particular section, a score of zero could be assigned. A zero would generally be an indication that some item had been omitted, thus triggering a ?material deviation? review. The scoring was to be performed as a composite, and the ?considers? within a section were not to be scored individually. Therefore, even if an element of a section was omitted in its entirety, a score of greater than zero would be required as long as there was information provided regarding the other ?considers.? That was so even if the omitted ?consider? would -- standing alone -- constitute a material deviation from the terms, conditions and specifications of the RFP. Only if an evaluator assigned an overall section score of zero would a review be undertaken to determine whether that section of the proposal materially deviated from the requirements of the RFP. Neither Pro Tech nor BI scored a zero for any section. Since there were no zeros, no ?material deviation? review was made. Ms. Wright did not review the BI proposal from beginning to end until the evaluation and scoring was completed, and the award to BI was ready to be posted. The evidence in this case demonstrates that, except as related to the financial documentation discussed herein, no one in the Department reviewed the proposals to determine if they contained deviations, material or not, from the terms, conditions or specifications of the RFP, nor was any such determination made prior to the posting of the intended award. Financial Documentation Review Each prospective vendor was required to submit financial documentation of its ability to perform the contract pursuant to section 5.4 of the RFP. The financial documentation was not a Mandatory Responsiveness Requirement/Fatal Criteria pursuant to section 1.13. Rather, section 5.4.4 provided that the ?proposer shall provide financial documentation that is sufficient to demonstrate its financial viability,? and listed the items to be included in the proposal. The RFP further provided that ?[f]ailure to provide any of the aforementioned financial information may result in proposal disqualification.? The financial documentation for each proposal was reviewed by an independent Certified Public Accountant, who determined its sufficiency under section 5.4 of the RFP. Three of the responses, those of iSecureTrac Corporation, SecureAlert, and SOS International, failed to pass the Financial Documentation review, and were disqualified from further review and consideration. The CPA determined that the G4S Justice Services, LLC financial statement had several deficiencies, including the omission of items required by section 5.4.1 of the RFP. The information was provided by the CPA to the Department‘s procurement office. After consultation with legal staff, the Department determined the deficiency to be a minor irregularity, and it was therefore waived. Evaluation Each member of the evaluation committee had experience in the field of electronic monitoring. There are no disputed issues of fact regarding the qualifications or training of the evaluation team, the procedures by which the RFP scoring was performed, or of any individual score. Therefore, further findings or conclusions regarding the evaluators or the scoring of the proposals are unnecessary. Proposed Award As a result of the process of evaluating and scoring the proposals, the Department determined that BI was the highest scoring proposer. Pro Tech was the second highest scoring responsive proposer. Satellite Tracking of People, LLC and G4S Justice Services, LLC were ranked third and fourth, respectively. The final scores were calculated, and the proposers were ranked as follows: Proposers Actual points received by Proposers (X) Highest points received by any Proposal (N) Awarded Points (Z) CATEGORY 1 - Business/Corporate Experience - Maximum 300 Points - (X/N x 300 = Z) BI 209.64 253.39 248.20 G4S 186.07 253.39 220.30 Pro Tech 253.39 253.39 300 STOP 196.43 253.39 232.56 CATEGORY 2 - Technical Specs & Service Delivery Approach - Maximum 400 Points - (X/N x 400 = Z) BI 241.96 285.54 338.95 G4S 246.96 285.54 345.96 Pro Tech 285.54 285.54 400 STOP 248.57 285.54 348.21 Proposers Proposed Per Diem Unit Price (X) Lowest Verified Per Diem Unit Price of All Proposals (N) Awarded Points (Z) CATEGORY 3 - Cost Proposal - Maximum 300 Points - (N/X x 300 = Z) BI $3.00 $3.00 300 G4S $6.88 $3.00 130.81 Pro Tech $5.20 $3.00 173.08 STOP $4.15 $3.00 216.87 Total Proposal Points and Ranking Proposers Total Proposal Points Ranking BI 887.15 1 G4S 697.07 2 Pro Tech 873.08 3 STOP 797.64 4 On December 17, 2010, the Department posted its intent to award the contract to BI. The ?October 5, 2010 Incident? BI has contracts with the Department of Homeland Security, several states, and numerous political subdivisions under which persons are monitored with BI-supplied equipment. The data from the monitoring devices is transmitted to a centralized monitoring location. All of the BI GPS devices, as well as a number of radio frequency and alcohol monitoring devices, were monitored through BI‘s ?TotalAccess? system. On October 5, 2010, at approximately 7:30 a.m. MDT, the number of records contained in the ?identity column? field in the TotalAccess database, which operated on a 32-bit platform, exceeded the capacity of that field. As a result, the monitoring center could no longer receive data from any of the 16,000 devices using the TotalAccess system, which included all of BI‘s almost 9,000 GPS devices. The ?outage? lasted approximately 12 hours. Although the monitoring devices continued to collect and store data on the whereabouts of the offenders during that period, the data could not be sent to the monitoring center or accessed by officers. Offenders had no direct way of knowing that the monitoring devices were not transmitting data. When the system came back on-line at approximately 7:25 p.m. MDT, the data was transmitted from the affected devices to the monitoring center. No data was permanently lost as a result of the outage. Officers were notified of any activities that would have triggered an alert during the period of the outage. If any questions arose as to the movements of an offender during the outage, that data could be retrieved and examined after the fact. During the outage, BI customers were alerted, either by e-mail or by telephone, and advised of the problem. The customers were updated throughout the outage period. The resolution of the issue was achieved by rewriting the ?identity column? data file from 32-bit, with a capacity of 2.1 billion records, to a 64-bit file, with a capacity of 9 quintillion records. In addition, a customized monitor was developed and installed so that a warning will be provided in the future if the system nears capacity. Thus, it is unlikely that this particular problem will recur. The October 5, 2010, incident was, by BI‘s own admission, the single worst event in BI‘s operational history. Protest Issues Petitioner, Pro Tech, timely filed a protest of the award of the contract to BI. The January 3, 2011, protest petition identified the issues that formed the basis for its protest of the award of the contract to BI.1/ The issues alleged by Petitioner are: Whether BI failed to comply with section 5.3.2 of the RFP by failing to: identify all of its federal, state or government contracts under which it provided electronic monitoring services and the number of active GPS units utilized for each; and provide a narrative summary of contract performance for each contract so identified, including major adverse findings; Whether BI failed to comply with section 5.2.9 of the RFP by failing to disclose ?complaints filed, investigations made, warning letters or inspection reports issued, or any disciplinary action? by governmental entities, specifically related to the outage of service that occurred on October 5, 2010; Whether BI failed to comply with section 5.5.13 of the RFP by refusing to provide a copy of its Disaster Recovery Plan. Whether BI failed to comply with section 5.5.15 of the RFP by failing to provide a copy of its training curriculum; and Whether BI failed to comply with section 5.5.5 of the RFP by failing to provide a copy of the FCC Grant of Authorization for the ?Beacon? device identified in its proposal. Pro Tech alleged that each of the deficiencies identified in its protest petition constituted a Material Deviation from the terms, conditions, and specifications of the RFP that, pursuant to section 1.15 of the RFP, could not be waived and that warranted rejection of the BI response. On November 15, 2011, BI filed its Petition for Leave to Intervene, in which it raised, as a disputed issue of fact and law, ?[w]hether Pro Tech‘s RFP reply met all of the requirements of the RFP and/or was materially non-responsive.? The responsiveness of Pro Tech‘s proposal was not preserved as an issue remaining for disposition in the Joint Pre-Hearing Stipulation.2/ Issue 1: Failure to comply with past experience requirements Section 5.3.2. requires that details of the proposed vendors‘ experience ?shall be provided in narrative form and in sufficient detail so that the Department is able to judge its complexity and relevance,? and as part of that directive, the proposed vendor was required, in part, to ?identify all current and/or past (or within three (3) years) federal, state or government contracts for the provision of electronic monitoring services, and the number of active GPS units utilized for each,? and to ?provide a narrative summary of contract performance in the above-identified contracts, including any major adverse findings.? (emphasis added). The subsections directing the vendors to provide supportive information, including 5.3.2.3. and 5.3.2.4., can be reasonably read in no way other than to be inclusive of the requirement that such information ?shall be provided in narrative form and in sufficient detail . . .? As part of the scheduled process of refining and clarifying the terms, conditions, and specifications of the RFP, potential responding vendors were allowed to submit questions to the Department. The requirement that prospective vendors provide information regarding all government contracts was worrisome to two vendors, including Pro Tech, due to the fact that such a requirement would involve at least a hundred, and up to ?several hundred? contracts. As a result of its concern with the extent of the work necessary to identify all of its electronic monitoring contracts, Pro Tech made the specific inquiry as to whether it would be allowed to ?provide the information for our 10 largest or 10 most similar contracts.? Similarly, another vendor sought to limit the scope of the specification by requesting to ?provide the total number of current and/or past (or within 3 years) federal, state or government contracts,? rather than identifying them individually, and to provide an aggregated, rather than an individual, narrative summary of contract performance. To each question, the Department responded that ?[t]hese requirements remain as stated in the RFP.? The answers were posted by the Department, and became part of the RFP‘s terms, conditions, and specifications. The only reasonable construction of the Department‘s response is that it remained ?a requirement or condition? of the RFP for vendors to identify all electronic monitoring contracts, specify the number of GPS units utilized in each contract, and provide a narrative summary of contract performance. While that requirement may appear to be burdensome, it nonetheless is the requirement. If a proposed vendor believed the requirement to be overly broad or unnecessary, it was obligated to challenge the specification. The specification was not challenged. Failure to identify all contracts In response to section 5.3.2.3, BI responded as follows: ?While BI currently has contracts for EM equipment and services with approximately 1,000 customers, as directed by the requirements in Section 5.3.2 we are providing contracts that are similar in size and scope to those specified in this RFP only.? BI thereupon listed seven contracts, the largest of which used approximately 3,500 ExacuTrack One GPS units, and the smallest of which used 100 ExacuTrack One GPS units. BI believed that listing all of its contracts was not necessary for it to show that it had the requisite experience to perform the Florida contract. Mr. Murnock testified that ?[i]t was clear we did not respond with all one thousand contracts,? and that BI‘s deficient response was made with ?[t]he risk of being scored lower, yes, is one of the risks.? The decision to limit the information to be provided in response to what is an objectively clear requirement was made with considerable forethought and calculation. With regard to the decision to identify seven of its approximately 1,000 customers, Mr. Murnock testified that ?there's certain things that we did not put in this response. We provided our answers to that because we knew, at the risk of getting a lower score, it was a risk-risk situation, you know, where do I expose contracts, do I expose my customer list that could -- while being protected by confidentiality we don't trust, we have seen that breached in other jurisdictions, we've seen that breached here in Florida, I was not going to expose information that we feel to be protected. I answered the specification as I defined it.? (emphasis added). Mr. Murnock stated that BI‘s decision to limit contract disclosure was, in part, the result of a desire to avoid the risk of exposing its customer list because ?[t]here are some customers that don‘t like their information being disseminated.? The suggestion that BI‘s decision was driven by an altruistic concern for the interests of its customers is unconvincing. The Department requested only ?federal, state or government contracts.? No explanation was offered as to why the existence of a government contract would be confidential, or a narrative of BI‘s performance under that contract would be a problem. Regardless of the purported reasons for non-compliance, the options when faced with a clear, direct, and unambiguous requirement of a public procurement to disclose ?sensitive? information are to: a) protest the specification; b) submit the information under the procurement‘s confidential information provisions; or c) choose not to submit a proposal. Picking and choosing what required information to provide, and what not to provide, is not among the acceptable or competitive options. Section 5.2.3 of the RFP is clear and unambiguous. BI‘s response was not in substantial accord with the RFP's requirements. The suggestion that vendors are free to unreasonably ?define? terms so as to meet their subjective desires is contrary to a fair and even-handed procurement process. All vendors are expected to comply with the terms, conditions, and specifications in the same way so as to present an equal playing field. BI‘s decision to provide only a tiny percentage of its government contracts tilted the field in its favor by allowing it to devote the time saved by not compiling the required information -- time spent by the other complying vendors -- to other sections of its proposal, a result that is contrary to competition. BI‘s representation that it provided contracts ?similar in size and scope? is itself questionable. The contract with the Wisconsin DOC was described as an Electronic Home Detention Program. Wisconsin uses the BI 9000, the HomeGuard 200, and the Sobrietor systems. Those systems were not described in the proposal. There was no indication of whether they are active GPS units or whether they are comparable to the ExacuTrack One system proposed for Florida. In short, the proposal failed to provide any information that would allow the reader to conclude that the Wisconsin DOC contract is similar in scope to the services being sought by the Florida DOC. The contract with the Delaware DOC does not include monitoring of the field units, as is called for in the Florida contract. The lack of a monitoring component makes the Delaware contract dissimilar in scope from the proposed Florida contract. The information provided with regard to the Broward County, Florida contract failed to indicate whether that contract utilizes BI monitoring services. Furthermore, the Broward County narrative indicated that the Broward Pretrial Services Division ?uses BI ExacuTrack AT, HomeGuard 200, GroupGuard Plus, and BI VoiceID,? but failed to describe those units or indicate their comparability to units proposed for the Florida contract. The undersigned will presume that the ?ExacuTrack AT? is a version of the ExacuTrack One. However, the narrative failed to list the ?number of active GPS units? as required by the specification, so it is unknown how many are in service. There was little information provided that would allow a determination that the Pennsylvania contract is ?similar in size and scope? to the proposed Florida contract. The RFP proposal states that ?the Pennsylvania Office of Probation and Parole Services have been operating its own offender monitoring center . . . .? Mr. Murnock confirmed that Pennsylvania was not affected by the October 5, 2010, incident because it used its own local host monitoring system. The lack of a monitoring component makes the Pennsylvania contract dissimilar in scope from the proposed Florida contract. The proposal also indicated that Pennsylvania ?has 450 HomeGuard units and 649 BI 9000‘s units, operating through a GuardServer 750 system.? None of those units, or the GuardServer 750 system, are described in the proposal, and they are not the devices or services proposed for the Florida contract. As such, the proposal fails to provide any information that would allow the reader to conclude that the Pennsylvania contract is similar in scope to the services being sought by Florida. In addition to the fact that Wisconsin, Delaware, Broward County, and Pennsylvania contracts are not, based on the information provided in the RFP, of the same scope as the Florida proposal, the Delaware DOC contract (175 ExacuTrack One units), the Broward County, Florida contract (an unknown number of ExacuTrack AT units), the Fayette County Adult Probation contract (120 ExacuTrack One units), and the City and County of Denver contract (100 ExacuTrack One units, along with 300 radio frequency and 70 alcohol monitoring units) do not approach the size of the Florida contract. As a result of BI‘s decision to forego its duty to identify all of its contracts, as required by the RFP, the Department was left with precious few contracts ?similar in size and scope? to that proposed for Florida with which to compare. BI was a party to other contracts that included BI monitoring and the use of the GPS device proposed for Florida that it elected not to disclose. BI has a contract with the state of Missouri that includes BI monitoring services and, in part, the ExacuTrack One field device. BI failed to list its contract with the state of Missouri in its response to section 5.3.2, purportedly because it consisted predominantly of alcohol and radio frequency monitoring, with ?a few GPS, but I couldn‘t tell you the count.? However, at section 5.5.19 of its proposal, BI noted that the Missouri Department of Corrections ?awarded BI with a contract for GPS, alcohol monitoring and radio frequency? that included the use of the same ExacuTrack One unit proposed for Florida. BI touted the Missouri contract as an example of its ability to rapidly implement the Florida contract. By tucking away information regarding the Missouri contract (along with contracts with agencies in California and Illinois) in section 5.5.19, BI was not obligated to provide a narrative summary of contract performance, or contact information that would allow the Department to follow up if it so chose. The reasoning for excluding the Missouri contract is disingenuous, considering that BI listed its contract with the City and County of Denver, in which GPS monitoring is a small percentage of the total monitoring devices in that contract. Because of BI‘s failure to disclose, it is not known how many other contracts among the 1,000 include features proposed for Florida, and which may have been of value to the evaluators. BI made a calculated decision not to disclose all of its contracts. Petitioner‘s allegations that BI ?cherry-picked? the contracts it chose to disclose is a harsh assessment, but it is an assessment that is supported by the evidence of this proceeding. BI made similar decisions to limit disclosure of its contracts in past procurements, with other agencies, without the consequence of disqualification. Therefore, BI decided to stay with its practice, in the words of Mr. Murnock, to ?disseminate it as we see fit? and chose not to disclose all government electronic monitoring contracts ?at the risk of being scored low.? The fact that BI was ?allowed?3/ to proceed, despite the fact that its response was not in substantial accord with the RFP's requirements, provided a competitive advantage to BI over other proposers. The first advantage is the immeasurable advantage conferred by withholding information on its contracts, and possible problems related thereto. The more direct advantage is the time saved by BI as a result of its decision to forego the work necessary to compile the contracts, and provide a narrative summary of their performance. The competitive advantage conferred on BI was, in this case, significant. Petitioner‘s President, Mr. Chapin, testified that Pro Tech devoted two full- time employees for approximately two weeks to collect the data necessary to fully respond to section 5.2.3, in addition to the time devoted by contract account managers in verifying contract performance matters. That was time not expended by BI –- and was time that BI could use to bolster and enhance other sections of its proposal. In addition to the direct competitive advantage conferred on BI, the Department‘s failure to enforce the clear and unambiguous requirements, especially when its ?decision? was made after the preliminary results of the evaluation were known, and when the deviation benefitted the vendor proposing a lower price, fosters an appearance and opportunity for preferential treatment that compromises the integrity of the competitive process.4/ The response to section 5.2.3.3. of the RFP provided by BI is clearly deficient, is not in substantial accord with the RFP's requirements, and is a material deviation from the terms, conditions, and specifications of the RFP. The Department‘s failure to enforce the requirement in accordance with the terms of section 1.15 was clearly erroneous, contrary to competition, arbitrary, and capricious. Failure to provide a narrative summary of contract performance Section 5.3.2.4 of the RFP required proposed vendors to provide a narrative summary of their contract performance, including major adverse findings. The summaries were not limited to major adverse findings. Rather, contract performance goes beyond adverse findings, and includes the manner and efficiency in which the contract services are accomplished, whether good or bad. BI provided narrative summaries of the few contracts it chose to identify, but little information as to contract performance. The evidence in this case demonstrates that the October 5, 2010, incident was, without question, the worst single operational event in BI‘s history, and among the two or three most significant failures in the history of the electronic monitoring industry. It affected at least one of the contracts identified by BI, that being with the state of Wisconsin. It occurred while the RFP proposal was being prepared, and approximately six weeks prior to its submission. It is absurd to believe that the October 5, 2010, incident was not a significant element that should have been disclosed in any discussion of contract performance. It may well be, as asserted by BI, that its customers were satisfied with its response to the October 5, 2010, incident. If so, it would have been a simple matter to provide an assessment of the satisfaction of BI‘s customers with its response, and with a description of the remedial measures taken to ensure that it would never recur. BI did not. Although several customers, including the state of Wisconsin, expressed their concern with the situation in writing, and BI offered credits to its customers, there do not appear to have been any ?major adverse findings? as that term may be narrowly construed. As a measure of ?contract performance,? Mr. Murnock testified that the October 5, 2010, incident ?is certainly not a good incident to occur. But when you look at the specifications, we interpreted them exactly the way they were listed.? That is not the case. Rather, the decision to withhold any mention of the incident came about by a careful and measured parsing of words. BI witnesses testified that the October 5, 2011, incident was no secret, and that it had put out media coverage and press releases because it ?wanted to be an open book? regarding the incident. However, as to the ?threshold? of the items that would have to be disclosed as a significant issue of contract performance, Mr. Murnock testified that ?that would be a very long list of performance items, whether it be from a billing issue that may have been raised, to this October 5th issue.? The equation of a simple ?billing issue? with the October 5, 2010, incident -- the single worst event in BI‘s history -- serves to highlight the attitude that allowed BI to willingly avoid disclosure of a direct, material, and significant element of contract performance that affected the very goods and services being proposed for Florida. The incident was enough of a secret that no evaluator was aware of it. The evaluators acknowledged that the event was significant, and could have affected their scores on the performance section of the RFP, though none could state whether the effect would have been positive or negative. It may well be that the explanation of the prompt remedial measures would have been well received by the evaluators, and that no reduction in scores would have resulted. It may also be that the event, given its severity, would have negatively affected their scores.5/ The testimony of Department witnesses that the October 5, 2010, incident was not necessarily something that it would have wanted to know about rings hollow. There is absolutely no reason why that information would not be pertinent and material to this RFP. The suggestion that the October 5 incident was something the Department viewed with ambivalence goes more to its desire to support the contract award than it does to the sufficiency of the BI narrative of contract performance.6/ Despite what is clearly a designed and calculated effort on the part of BI to withhold information regarding the incident from the Department -- and the Department‘s inexplicable lack of concern regarding the withholding of material information regarding subject matter of the RFP -- the fact is that BI‘s proposal included ?narrative summaries,? thereby meeting the minimal requirement established in section 5.3.2.4. Despite a lack of candor on the part of BI that raises significant concern, the undersigned cannot conclude that the deficiencies in the narrative summaries constituted an issue of basic responsiveness. Therefore, the undersigned cannot find that BI‘s omission of information regarding the goods and services proposed for Florida is a material deviation from section 5.3.2.4. of the RFP. Issue 2: Failure to disclose ?complaints? related to the October 5, 2010 event Section 5.2.9. of the RFP requires proposed vendors to provide ?any and all documents regarding complaints filed, investigations made, warning letters or inspection reports issued, or any disciplinary action imposed by Federal or State oversight agencies within the past five (5) years.? Pro Tech asserts that an October 7, 2010, ?deficiency notice? from the Missouri Department of Corrections regarding the October 5, 2010, incident, and follow-up correspondence through December 23, 2010, fell within the class of governmental action that should have been disclosed, but was not. The October 7, 2011, letter from the Missouri DOC identifies itself as a ?letter of notification to BI of a deficiency notice,? and requested of BI ?a written response within 7 calendar days identifying the problem area(s) which led to the failure and what steps BI intends to initiate to ensure that the system failure is not repeated.? BI witnesses testified that a ?deficiency notice? was not one of the specific items listed in section 5.2.9 of the RFP, and that it was therefore not obligated to disclose the Missouri letter under its very narrow reading of the items requested. BI‘s candor with regard to the October 5, 2010, incident as expressed in its response to section 5.2.9. is roughly approximate to that evident from its response to section 5.3.2.4.7/ Section 5.2.9. uses very specific terms. It is doubtful that the Department intended potential vendors to disclose only those documents with the words ?complaint,? ?investigation,? ?warning letter,? ?inspection report,? or ?disciplinary action? splashed prominently across the document. Rather, a fair reading of the requirement, coupled with an interest in being open and forthright regarding performance -- an ?open book? as stated by Mr. Murnock -- would clearly include a ?deficiency notice? to be within the class of items being requested. However, since the specific RFP language listed specific items, without a more inclusive descriptor, such as ?including but not limited to,? or ?in the nature of,? the undersigned will not broaden the specific RFP requirement. Since the Missouri letter did not include the words ?complaint,? ?investigation,? ?warning letter,? ?inspection report,? or ?disciplinary action? within the body of the correspondence, despite its being plainly within the general class of those documents, the response provided by BI to section 5.2.9. was not a material deviation from that requirement of the RFP. Issue 3: Failure to provide a copy of the Disaster Recovery Plan The RFP, at section 5.5.13., provides that ?[t]he proposer shall provide a detailed description of the Contractor‘s method and approach for meeting or exceeding all Monitoring Center requirements in section 3.13, and specifically . . . provide a copy of the Disaster Recovery plan.? The requirement is clear, direct, and unambiguous. BI did not file a protest of the specification, nor did it question the submission of its Disaster Recovery Plan during the process that resulted in the issuance of Addendum #1. In response to section 5.5.13. of the RFP, BI responded as follows: ?Because of security reasons, the Disaster Recovery Plan is not included with this response. For an outline of the Disaster Recovery Plan, see „3.13.4? beginning on page 148.? BI‘s refusal to provide the Disaster Recovery Plan is reiterated in its response to section 3.13.10. There is no industry standard as to what constitutes a Disaster Recovery Plan. However, BI clearly understood what constituted its Disaster Recovery Plan, and made the calculated decision that it was not going to submit it. The response provided by BI is clearly deficient, and is not in substantial accord with the RFP's requirements. BI decided that it would not provide its Disaster Recovery Plan to the Department ?because it has always been a practice that we not provide that unless it is outside of the production of the RFP, upon request.? The decision to ignore the requirement was made with calculated and matter-of-fact intent, relying on the assumption that it would entail at most a scoring reduction. In lieu of providing the Disaster Recovery Plan as required, Ms. White testified that elements of the plan were ?listed within the RFP itself in several different sections, about 30 different pages.? Thus, according to BI, various elements of what one might expect to find in a Disaster Recovery Plan lay flung about in unrelated sections of its RFP proposal, awaiting the efforts of the intrepid evaluators to uncover their existence and significance. BI‘s assertion that it intended those far-flung elements to meet the RFP‘s requirement that it provide its Disaster Recovery Plan is belied by its express statement that, with knowledge of its action, it elected to omit the Disaster Recovery Plan. The evaluation of a procurement proposal is not akin to a game of hide-and-seek. It is unreasonable to expect evaluators to scour each proposal to glean information scattered throughout, when there is a clear, unmistakable, and mandatory direction to provide the Disaster Recovery Plan as a single, stand-alone document. Compliance with a mandatory item of a public procurement, particularly one designed to ensure that the proposing vendor can adequately reply to a disaster scenario when its services are arguably most needed, cannot be left to the chance that an evaluator might be able to sift through the proposal, and to thereby piece together an understanding of what disaster preparedness measures are proposed. The fact that the Disaster Recovery Plan contains confidential and proprietary information does not lessen the obligation to provide that information. Section 4.3.20. of the RFP provides the procedure by which confidential, proprietary, or trade secret material may be subject to protection under the Constitution and laws of Florida. If a proposed vendor believes the protections to be insufficient, it has a hard decision to make as to whether to submit or not submit a proposal. That decision does not include whether to ignore a mandatory requirement of the RFP on the chance that the consequence would be insignificant. It is clear that the Department never determined whether BI‘s admitted failure to disregard the Disaster Recovery Plan requirement was a material deviation from the terms, conditions, and specifications of the RFP. When Ms. Wright finally reviewed the BI proposal immediately before the posting of the award of the contract, she noted that BI had not submitted a copy of its Disaster Recovery Plan as required by the RFP. Ms. Wright did not follow the established procedure of discussing the issue with Mr. Staney, nor was legal staff consulted. Rather, Ms. Wright called Douglas Smith, who was an evaluator. Ms. Wright indicated that, despite BI‘s express statement that it was not submitting a copy of its Disaster Recovery Plan as required, she wanted ?to check with Mr. Smith on if he felt comfortable with what they had shared about the Disaster Recovery Plan, and was it sufficient.? Mr. Smith recalled his conversation with Ms. Wright, and indicated that ?it wasn‘t so much the Disaster Recovery Plan specifically, she was asking about the elements we reviewed. Are you comfortable with the score that was given? Are they adequate, satisfactory to be able to perform the services based on the contract?? Based on her discussion with Mr. Jones, Ms. Wright unilaterally determined that she did not need to take the issue of the omission of the Disaster Recovery Plan to Mr. Staney or to legal staff. Notably, Ms. Wright admitted that she did not make a determination of whether BI‘s admitted failure to provide a copy of its Disaster Recovery Plan, as required by the RFP, was a material deviation or a minor irregularity. Vendors with an interest in the Florida contract may have been discouraged from submitting proposals because of similar concerns with the security of their Disaster Recovery Plans, or because they did not have a stand-alone Disaster Recovery Plan. It generally cannot be known how many, if any, potential proposers may have been dissuaded from submitting a proposal because of one project specification or another. However, although the effect of an agency choosing to ignore a clear and unambiguous requirement for one proposer that is applicable to all other proposers confers a competitive advantage that is difficult to calculate, it is nonetheless real. Furthermore, withholding its Disaster Recovery Plan until after the posting of the award gave BI the opportunity to review the other proposals. If it then determined that its proposal was less than advantageous, it could effectively pull itself from the procurement by maintaining its refusal to submit its Disaster Recovery Plan when requested by the Department. Thus, the failure to submit the Disaster Recovery Plan when required was a material deviation that conferred a competitive advantage on BI that was not enjoyed by the other compliant proposers. In addition to the foregoing, the refusal to enforce the clear and unambiguous requirement that BI submit a copy of its Disaster Recovery Plan, particularly when such a waiver has occurred outside of the Department‘s normal practice of evaluating deviations from the requirements of the RFP, and after the preliminary outcome of the evaluation was known, raises the distinct appearance of favoritism and preferential treatment towards BI. BI‘s failure to provide a copy of its Disaster Recovery plan is not in substantial accord with the RFP‘s requirements, and is a material deviation from the terms, conditions, and specifications of the RFP. The Department‘s failure to enforce the requirement in accordance with the terms of section 1.15 was clearly erroneous, contrary to competition, arbitrary, and capricious. Issue 4: Failure to provide a training curriculum The RFP, at section 5.5.13, provides that ?[t]he proposer shall provide a detailed description of the approach to meeting or exceeding all Training requirements in section 3.16, and specifically: . . . provide a copy of the training curriculum.? In response to section 5.5.15 of the RFP, BI provided a summary of the topics to be covered in its course for training officers and other employees in the use of the monitoring system. The summary described the outline for the training to be provided, but did not go into detail as to manner in which the training would be provided. The RFP does not define the term ?curriculum.? In general, a curriculum is defined as ?the courses offered by an educational institution? or ?a set of courses constituting an area of specialization.? MERRIAM-WEBSTER DICTIONARY, at http://www.merriam-webster.com. In this case, there is a single training course. The information provided by BI described the basic course that it intended to provide. What appears to be the subject of Pro Tech‘s complaint is that BI did not provide a complete syllabus, or the complete set of materials, for the training course that was to be provided. A syllabus or training materials were not required. The RFP, at section 3.16, provided that: [t]he training curriculum . . . [is] hereby adopted as the approved curriculum . . . to be utilized for all training purposes under this Contract. Said curriculum . . . [is] incorporated herein as if fully stated. Any changes to these documents shall be approved in writing by the Department‘s Contract Manager. Based on that provision of the RFP, a credible argument can be made that the intent of the provision was for the proposer to submit a document far more comprehensive than provided by BI. The Department‘s proffered explanation that the ?curriculum? provided by BI was what was intended by the RFP is not convincing, and generally runs contrary to the requirements of section 3.16. However, the description of what was to constitute a curriculum was imprecise and ambiguous. The information provided by BI describes the training course offering, and may reasonably be construed -- in a broad sense of the term -- to be a curriculum. The response provided by BI to section 5.5.15 is in substantial accord with the RFP's requirements as stated, and was not a material deviation from those requirements. Issue 5: Failure to provide the FCC license for the ?Beacon? Section 5.5.5 of the RFP requires the proposed vendors to provide the Department with ?a detailed description of the General Equipment specifications that meets or exceeds all requirements in section 3.7.2,? and ?provide copies of required licensing by the Federal Communications Commission for the equipment proposed.? The equipment proposed by BI as responsive to the general equipment specifications of section 3.7.2 consists of the ExacuTrack One single piece GPS tracking unit. The ExacuTrack One meets or exceeds all requirements established in section 3.7.2. The FCC grant of equipment authorization was provided for the ExacuTrack One unit. The ?Beacon? was identified in section 5.5.21 of the RFP as a value-added service that was above and beyond the RFP‘s minimum service delivery requirements and specifications. The Beacon is not a necessary component of the equipment for tracking offenders as established in section 3.7.2, but serves as a home-base unit to transmit location and data, and conserve battery power. Section 5.5.5, is reasonably construed to require that the FCC ?license? be provided only for the general equipment proposed pursuant to section 3.7.2 of the RFP. BI complied with that requirement. Based on the terms, conditions and specifications of the RFP, the response provided by BI to section 5.5.5 is in substantial accord with the RFP's requirements, and was not a material deviation from those requirements. Ultimate Findings of Fact Based on the foregoing, the BI response to Request for Proposals, Solicitation Number 10-DC-8200, materially deviated from the mandatory terms, conditions, and specifications of sections 5.3.2.3. of the RFP, as supplemented by Addendum #1, and section 5.5.13 of the RFP. The items that rendered the BI proposal non-responsive, and that materially deviated from the terms, conditions, and specifications of the RFP, gave BI an advantage or benefit not enjoyed by the other proposers, were not minor irregularities, and could not be waived under the terms of the RFP. Based on the foregoing, Pro Tech demonstrated by a preponderance of the evidence that the award of the contract to BI was clearly erroneous, contrary to competition, arbitrary, and capricious. The undersigned is not unmindful of the fact that BI proposed the lowest cost, and that the rejection of the BI proposal will result in a higher overall cost for offender monitoring services to the state. Perhaps the fact that Pro Tech proposed a system that was scored higher based on its business experience and technical merits will offset any concerns. Regardless, the decision as to whether BI met the clear and unambiguous requirements of RFP 10-DC-8200 cannot, in the interests of fair and open competition, be the result of preferential treatment afforded to BI based on one element of a multi-factored RFP.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent, Department of Corrections, enter a final order that adopts the Findings of Fact and Conclusions of Law set forth herein. It is further recommended that the contract issued in response to Request for Proposals, Solicitation Number 10-DC-8200, entitled "Global Positioning Satellite Electronic Monitoring Services" be awarded to Petitioner, Pro Tech Monitoring, Inc. as the highest scoring responsive vendor. DONE AND ENTERED this 4th day of April, 2012, in Tallahassee, Leon County, Florida. S E. GARY EARLY 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 April, 2012. 1/ The protest petition initially alleged that the evaluation team members did not meet the experience and knowledge requirements of section 287.057(16)(a), and that the price proposed by BI was unrealistically low, thereby jeopardizing the ability of BI to provide service under the contract. Both of those issues were withdrawn prior to the final hearing. 2/ If the issue of the responsiveness of the Pro Tech proposal had not been waived, the undersigned would have found and concluded that BI failed to demonstrate that the Pro Tech proposal was not responsive to the terms, conditions, and specifications of the RFP. The responsiveness issue was related solely to whether Pro Tech identified its contracts, provided narrative summaries, and disclosed complaints related thereto, in violation of sections 5.3.2. and 5.2.9. of the RFP. The only evidence of such non-responsiveness was related to a contract between G4S Justice Services, LLC, and the state of Connecticut, for which Pro Tech was a subcontractor. The RFP contained no requirement that a proposer disclose or discuss its subcontracts with other vendors, but rather required only the disclosure of ?all current and/or past (or within three (3) years) federal, state or government contracts.? Therefore, Pro Tech‘s failure to disclose its subcontract with G4S -- despite its disclosure of a different subcontract to which it was a party in Missouri - - was not a deviation from the terms, conditions, and specifications of the RFP. 3/ The suggestion that the Department ?allowed? the BI proposal to pass through the review process, or that the Department made such a decision, is a bit inaccurate. The evidence clearly demonstrates that the Department made no decision as to whether BI‘s proposal contained material deviations until faced with the issue in the context of litigation. However, for ease of reference, the terms ?allowed? and ?decision? will be used when describing the effect of BI‘s decisions to submit less information than required under the terms, conditions, and specifications of the RFP, and the Department‘s after-the-fact litigation strategy to support its determination to award the contract to BI. 4/ In Syslogic Technology Servs., Inc. v. So. Fla. Water Mgmt. Dist., Case No. 01-4385BID, at 61, n.19, (Fla. DOAH Jan. 18, 2002; SFWMD Mar. 6, 2002), Judge Van Laningham was similarly faced with a situation in which the agency failed to make a determination as to whether a deviation from the procurement specifications was material until after the proposals were scored and ranked, and the preliminary outcome known. His analysis is instructive and well-written, and is adopted, with full attribution, by the undersigned. The reason for this should be clear: If the decision on materiality were made from a post facto perspective based on extrinsic factors, then the temptation would be great to base the determination on reasons that should not bear on the issue. In particular, the materiality of a deviation should not depend on whether the deficient proposal happens to be highest ranked. To see this point, imagine a close football game in which, at the start of the fourth quarter, one team scores a go-ahead touchdown -- if the receiver came down in bounds. Would anyone think it fair if the referees awarded the points provisionally and reserved ruling on whether the touchdown should count until after the end of the game? Of course not. In a contest, potentially determinative decisions involving a competitor's compliance with the rules need to be made when the outcome is in doubt, when the effect of the decision is yet unknown; otherwise, the outcome may be manipulated. 5/ The Department would treat the failure to disclose the October 5, 2010, incident as a minor irregularity, thus allowing it to be treated as a scoring issue. However, the October 5, 2010, incident cannot be treated as a scoring issue due to BI‘s failure to disclose. Captain Yossarian would have made an appropriate evaluator of Request for Proposals No. 10-DC-8200. 6/ Again, with a tip of the hat to Judge Van Laningham: When an agency asserts for the first time as a party litigant in a bid protest that an irregularity was immaterial, the contention must be treated, not with deference as a presumptively neutral finding of ultimate fact, but with fair impartiality as a legal argument; in other words, the agency is entitled to nothing more or less than to be heard on an equal footing with the protester. Phil‘s Expert Tree Service v. Broward Co. Sch. Bd., Case No. 06- 4499BID at 42, n.13, (Fla. DOAH Mar. 19, 2007; BCSB June 11, 2007). 7/ To BI‘s credit, it did disclose an investigation by the state of New Jersey into its billing practices which, not surprisingly, ?concluded that BI was not at fault,? and for which BI included 23 pages of supportive information. COPIES FURNISHED: J. Stephen Menton, Esquire Rutledge, Ecenia, and Purnell, P.A. 119 South Monroe Street, Suite 202 Post Office Box 551 Tallahassee, Florida 32301 smenton@reuphlaw.com Christopher Ryan Maloney, Esquire Foley and Lardner Suite 1300 1 Independent Drive Jacksonville, Florida 32202 cmaloney@foley.com Benjamin J. Grossman, Esquire Foley and Lardner, LLP Suite 900 106 East College Avenue Tallahassee, Florida 32301 bjgrossman@foley.com Jonathan P. Sanford, Esquire Florida Department of Corrections 501 South Calhoun Street Tallahassee, Florida 32399 sanford.jonathan@mail.dc.state.fl.us Ken Tucker, Secretary Department of Corrections 501 South Calhoun Street Tallahassee, Florida 32399-2500 Jennifer Parker, General Counsel Department of Corrections 501 South Calhoun Street Tallahassee, Florida 32399-2500
The Issue Whether the Department of Children and Family Services' (FDCF) notice of intent to award the contract for RFP No. MF650TH was contrary to the agency's rules or policies, or the proposal specifications and whether the Petitioner established that FDCF's decision was clearly erroneous, contrary to competition, arbitrary or capricious.
Findings Of Fact 1. The parties' Joint Prehearing Stipulation specified, in pertinent part, as follows: ADMITTED FACTS The following facts are admitted by all parties and will require no proof at hearing: On or about January 23, 1998, the Department issued RFP No. MF650TH ("the RFP"), Automated Fingerprint Identification System (AFIS). The purpose of the RFP was to solicit proposals from qualified proposers to design, develop and implement an automated fingerprint identification system, or AFIS, and to procure a statewide fingerprint identification capability for applicants and recipients of public assistance. The RFP was subsequently amended by Addendums 1, 2, 3, and 4 dated February 18, February 26, March 9, and March 16, 1998, respectively. Two vendors, Lockheed Martin and Sagem Morpho, submitted proposals in response to the RFP on March 23, 1998. The Department posted notice of its intent to award the contract described in the RFP to Morpho on April 17, 1998. On April 22, 1998, Lockheed Martin timely submitted a notice of intent to protest the proposed award to Sagem Morpho, pursuant to the terms of the RFP and Section 120.57(3), Florida Statutes. On May 1, 1998, Lockheed Martin filed its Formal Written Protest and Petition for Formal Administrative Proceeding. Jayne Paris served as Procurement Manager for the AFIS RFP. Connie Reinhardt served as Project Manager for the AFIS project. AGREED UPON ISSUES OF LAW The parties have agreed on the following issues of law: The Administrative Law Judge shall conduct a hearing pursuant to Section 120.57(3), Florida Statutes. All parties have standing to participate in this proceeding. ISSUES OF FACT WHICH REMAIN TO BE LITIGATED. The following issues of fact remain to be litigated: Whether Morpho's AFIS proposal was responsive to the RFP. Whether Lockheed Martin's AFIS proposal was responsive to the RFP. Lockheed Martin contends that the following additional facts remain to be litigated: What the Department's policy is with respect to evaluation of cost proposals on RFPs. Whether and when the Department altered its method of evaluating the AFIS cost proposals. The reason the Department decided not to use the cost proposal ranking and fatal criteria checklist which had been previously prepared. Whether the addenda to the RFP provided supplemental RFP instructions and incorporated clarifications in response to questions submitted by potential proposers. ISSUES OF LAW WHICH REMAIN FOR DETERMINATION BY THE JUDGE The following issues of law remain for determination by the Court: Whether Morpho's AFIS proposal was materially responsive to the RFP. Whether Lockheed Martin's AFIS proposal was materially responsive to the RFP. Lockheed Martin contends that the following additional issues of law remain for determination by the Judge: Whether any minor irregularities waived by the Department in evaluating and scoring the AFIS proposals met the definition of a "minor irregularity" under Rule 60A- 1.002(16), F.A.C. Whether the Department may alter its proposal evaluation methods after proposals have been received by it. Whether the Department's proposed award of the AFIS contract to Morpho is contrary to the Department's governing statutes, rules, or policies, or the AFIS RFP specifications. Whether the Administrative Law Judge shall conduct a de novo proceeding pursuant to Section 120.57(3), Florida Statutes, to determine whether the Department's proposed action is contrary to its governing statutes, rules, or policies, or the AFIS RFP specifications. Lockheed's unilateral statements of issues do not bind the parties or the undersigned but are included so that the pending Motion to Strike may be addressed in the Conclusions of Law, infra. At formal hearing, Petitioner Lockheed contended that Morpho's proposal was not responsive to the RFP and that Lockheed should be awarded the contract. Intervenor Morpho contended that its proposal was responsive and that Lockheed's proposal was not responsive. FDCF contended that both proposals were responsive and that the proposed final agency action to award the contract to Morpho should be carried out. The RFP solicited proposals from qualified proposers to design, develop and implement an Automated Fingerprint Identification System (AFIS) and to procure a statewide fingerprint identification capability for applicants and recipients of public assistance. (Agreed Facts). AFIS is intended to support the client certification process for the benefit programs delivered through the Department's electronic Benefits Transfer program (EBT). The current EBT programs include Food Stamps, Temporary Assistance to Needy Families -- Work and Gain Economic Self-Sufficiency (TANF-WAGES), and the Refuge Assistance (RA) programs. The Department had determined that AFIS is the only acceptable biometric technology. The RFP included the following pertinent provisions: General Provisions – The procurement process will provide for the evaluation of proposals and selection of the winning proposals according to applicable state and federal laws and administrative regulations. All responses received by the closing deadline, unless determined to be non-responsive will be evaluated by an evaluation team. (Exhibit P-1. pp. 66-67). Statement of Purpose The objective of this Request for Proposals (RFP) is to obtain proposals from qualified proposers to design, develop and implement the AFIS in accordance with the requirements defined in Section B of this RFP. FDCF intends to procure a statewide fingerprint identification capability for applicants and recipients of public assistance programs as stated above. Through this competitive solicitation, the FDCF desires to obtain a comprehensive identification service which represents the best value for the state, and which provides all hardware, (with the exception of existing administrative terminals as discussed in RFP Section B, subsection 6), software, communications networks, central site operations, terminal operations training, system administration training, operational support, maintenance, and other services. State personnel will be utilized to operate the system's imaging, fraud investigation, and administrative workstations located at state facilities. The system will include a central identification system to maintain fingerprint and photographic identification records and perform duplicate fingerprint record search and verification. It will also include workstations for creation of the fingerprint and photo identification records and for support of administrative and fraud investigation activities. Evaluation of Technical Proposals Part A Fatal Criteria Failure to comply with all Fatal Criteria will render a proposal non-responsive and ineligible for further evaluation. For a list of Fatal Criteria, see Appendix XIX. Any technical proposal that is incomplete, non-responsive, contains cost or pricing data, or in which there are significant inconsistencies or inaccuracies will be rejected by the FDCF. No points will be awarded for complying with the Fatal Criteria. 1.7 Acceptance of Proposals . . . Untimely proposals will be rejected as unresponsive. * * * All responsive proposals timely submitted will be evaluated. No proposed changes to the terms and conditions set out in this RFP, its appendices and any addenda will be accepted and submission of a proposal which purports to do so will make the proposal non- responsive. The FDCF may waive minor irregularities, but need not do so. Where the FDCF waives minor irregularities, such waiver shall in no way modify the RFP requirements or excuse the proposer from full compliance with the RFP specifications and other contract requirements if the proposer is awarded the contract. * * * The FDCF reserves the right to reject any or all proposals, cancel the RFP, or waive minor irregularities when to do so would be in the best interest of the State of Florida. Minor irregularities are those which will not, in the opinion of the contact person, have significant adverse effect on overall competition, cost or performance. 2. Proposal Format * * * The proposal should be prepared concisely and economically, providing a straightforward description of services to be provided and capabilities to satisfy the requirements of this RFP. Emphasis should be on completeness and clarity of content. In order to expedite the evaluation of proposals, it is essential that proposers follow the format and instructions contained herein. For purposes of this section, the terms "shall, will and must" are intended to identify items that are required to be submitted as part of the proposal. Failure to comply with all such requirements will result in the proposal being rejected as non-responsive. 3.3 Tab 3. Transmittal Letter Each copy of the proposal must include a transmittal letter in the form of a standard business letter and must be signed by an individual authorized to legally bind the proposer. It shall include at a minimum: * * * A statement indicating that the proposer and any proposed subcontractors are corporations or other legal entities and that each satisfied all licensing requirements of state or federal law and that they are authorized to do business within the State of Florida. All subcontractors must be identified. A statement indicating the percentage of work to be done by the proposer and by each subcontractor as measured by the percentage of total proposed price. A statement identifying the proposer's and any proposed subcontractor's federal tax identification number(s). 3.12 Tab 11. Technical Proposal: Corporate Qualifications . . . This section must also identify and describe the corporate capabilities of any proposed subcontractors and must include three (3) references for each subcontractor including names, addresses, and telephone numbers, and a description of the services which are being provided. Subcontractors not identified in the proposal will not be permitted to perform any work under any contract which results from the RFP. Cost Proposed Format The following information is intended to provide proposers with instructions and a format for submitting cost quotations. Cost quotations must be submitted using the provided pricing schedules. Responses that do not provide cost proposals in the required format will be rejected. Unless otherwise noted, the costs quoted shall apply for the entire term of the contact. Proposers are encouraged to identify means to reduce the cost of AFIS services in Florida. As part of the cost proposal, proposers should identify cost reduction factors, the rationale for costs savings, and any options in service that would produce such cost savings. In order to assess FDCF options, proposers are requested to submit AFIS system costs in two ways—as a bundled price per add transaction and as an unbundled price. The selection of the contract pricing method— either bundled or unbundled—shall be at the sole discretion of the FDCF. The FDCF will not make any corrections to arithmetic or other errors in the cost proposal. All numbers submitted will be assumed by the FDCF to be accurate even if an error appears likely. Proposers are cautioned to assure the accuracy of any amounts submitted because they will be held to the amounts which appear in the cost proposal throughout the term of any contract which results from this RFP as well as any extension or renewals of that contract. The RFP provided blank pricing schedules in the required format for submitting bundled and unbundled proposals. The RFP required proposers to submit prices based on alternative bundled and unbundled methods. Under the first method, proposers were to provide one lump sum price per record added to the AFIS database. An "add" is the function by which a fingerprint image is programmed into the computer and no match is found, indicating that fingerprint is not already in the system. Under that method, the provider was to be paid based on the number of fingerprints added to the database. (Schedules 1A and 1B). Under the second method, proposers were to provide a price per add, a price per inquiry (when the system searches the existing database), and prices for all hardware, broken down by type of hardware. This is called unbundled pricing. (Schedules 2A and 2B). As to unbundled pricing, the RFP specifically provided: Proposers must also provide unbundled pricing under the two communications network assumptions. Unbundled pricing includes a unit price per record added to the database, a unit price per workstation, and a unit price per printer. The cost of system development, implementation and operations must be reflected in the unit prices per add or inquiry. Schedule 3 applied to a POS Verification Study. The RFP also required a way to resolve smudged print identifications: 5.3.7. Identification Searching c) Workstations must provide the capability to launch identification search transactions using selected client records with or without minutiae editing. The RFP also required proposers to submit a thumb print option: Option to Add Thumb Prints . . . The department is also considering the option of capturing and storing both thumb prints, in addition to both index fingers, for each applicant household member required to comply. In order to help the department assess this option, the proposer shall provide an incremental price per record added to the database. . . There is no guarantee that the department will exercise the option to capture and store thumb prints. However, should the department decide to exercise this option, the successful proposer's system must be capable of supporting this option. The proposer was to provide the incremental price to capture and store thumb prints in Schedule 4. The RFP required proposers to submit a technical proposal and a separate sealed cost proposal. The RFP contemplated FDCF doing a completeness review against the "Fatal Criteria" provided in the RFP before the agency technically evaluated the proposals. The RFP presumed that those proposals which failed the completeness review would not be technically evaluated. No points were to be assigned via the completeness review. The RFP also contemplated that the cost proposals would remain sealed unless, and until, a proposer had passed the technical evaluation with at least 400 points. The evaluation system set out in the RFP provided for ranking proposals based on 600 possible points for the technical proposals and 400 possible points for the cost proposals. Any score less than 400 points on the technical proposal would mean the proposer could not be evaluated for cost. On March 23, 1998, the day of submittal, the technical responses were opened by Jayne Paris. She was FDCF's Procurement Manager and contact person for this RFP. In doing the completeness review, Ms. Paris compared the technical proposals with the Fatal Criteria checklist for completeness. She also reviewed each proposer's Supplemental Proposal Sheet for completeness and to be sure each proposer had promised compliance with all RFP requirements. She also reviewed each proposer's transmittal letter to be sure neither proposer intended to deviate from the RFP requirements. This completeness review was witnessed by Project Director, Connie Reinhardt, to assure the integrity and accuracy of the process. Although a consultant's checklist geared to federal contract review of cost proposal compliance was in the contract file which FDCF is required to maintain on every project, this checklist was only a suggestion which FDCF had rejected and had not included in the RFP. Ms. Paris did not apply it. Both Morpho and Lockheed used conditional language in their respective transmittal letters. Morpho's transmittal letter stated, "In the event that these stated requirements and assumptions are subsequently altered by the issuing agency, or are proved [sic] to be invalid due to actual experience, Sagem Morpho, Inc. reserves the right to make appropriate modifications to its scheduling or pricing." Lockheed asserts that by this language Morpho attempted to change the terms of the RFP, condition Morpho's prices, and include "pricing information" contrary to the RFP. The RFP required that each proposer identify in its transmittal letter all proposed subcontractors by name, corporate status, eligibility through licensure for state projects, the percentage of subcontract work each subcontractor would be doing, and federal tax identification number, and also provide three references for each contractor. It also provided that any subcontractors not identified by the proposer could not work on the contract. Lockheed's transmittal letter did not propose any subcontractors. It merely stated that Lockheed anticipated the need for a maintenance subcontractor beginning in June 1999, approximately 13 months after the start of the contract, and that Lockheed anticipated submitting a request for approval of a subcontractor by March 1999. Lockheed stated as its reason for the absence of subcontractor information that waiting until June 1999 would result in selection of a subcontractor that would provide the service levels demanded by Lockheed and FDCF. FDCF concedes that if a proposer intended to deviate from the RFP requirements, i.e. if the transmittal letter created a significant variance from the RFP specifications, that variance would have rendered that proposal substantively unresponsive at the completeness review, and no further evaluation of that proposal should have taken place. (TR-133; Exhibits P-2; P-3; DCF's PRO at page 7) However, in her initial completeness review of the respective proposals for the Fatal Criteria, signed management summary material checklist, and transmittal letter, Ms. Paris, in fact, only considered whether all necessary parts of each proposer's response were included. The Fatal Criteria only applied to the technical response. Ms. Paris deferred consideration of the content or effect of each proposer's "extraneous language" related in Findings of Fact 18-20 to the subsequent technical and cost evaluations. Therefore, Lockheed and Morpho were treated equally at the completeness review, because neither was disqualified as non-responsive nor docked any points on the basis of their respective transmittal letters. Ms. Paris' reason for not finding the transmittal letters unresponsive was apparently based at that stage on Section 1.7 of the RFP, which would hold the proposer to the RFP specifications despite waivers of irregularities. The next day, March 24, 1998, Ms. Paris provided the technical evaluation team with Sections I and III of an Evaluation Manual, which included the introduction and the substantive Evaluation Criteria Parts C-K. Ms. Paris also conducted a training session during which she provided a briefing on the evaluation process and instructions to the evaluation team members. The evaluation team was to evaluate only the technical merit of each proposal. Sections II and IV of the Evaluation Manual, which had been prepared for FDCF by outside consultants, were removed before the manual was distributed to the evaluation team on the basis that these sections were cost-related and the technical evaluation team members, whose duties did not include consideration of cost, were not to use them. The technical evaluation team members individually and independently evaluated the technical portion of each proposal and scored each technical response using a scale of 0 to 4 points, as instructed in Part I of the Evaluation Manual. With the exception of questions requiring a "yes" or "no" answer, scores were assigned as follows: 0 = no value; proposer demonstrated no capability to satisfy the Department's needs, ignored this area, or has so poorly described the proposal for this criteria that understanding it is not possible. 1 = poor; proposer demonstrated little or no direct capability to satisfy the Department's needs, or has not covered this area, but there is some indication of marginal capability. 2 = acceptable; proposer demonstrated adequate capability to satisfy the department's needs 3 = good; proposer demonstrated more than just adequate capability and good approach to satisfy the Department's needs. 4 = superior; proposer demonstrated excellent capability and an outstanding approach to satisfy the Department's needs. This scoring concept comports with the RFP, pp 67-68. A proposer had to receive a minimum score of 400 technical points before FDCF would open, review, and rank that proposer's cost proposal. FDCF determined that both Petitioner and Intervenor met this requirement. Morpho received 582.99 points out of a possible 600 points. Lockheed received 559.88 points. Under the scoring system, neither the Fatal Criteria nor the management summary were entitled to any points, so neither proposer was scored any points on those bases during the technical evaluation. "Minutiae editing" is the process of correcting misinformation details in an original fingerprint image which is smudged. Under Section 5.3.7 of the RFP, the system's workstations were required to have the capability to launch identification searches of fingerprint images "with or without minutiae editing." Morpho's system as proposed can launch a search and find a match after minituae editing. Lockheed's system could search, but its proposal candidly admitted that the Lockheed system could not match prints after minutiae editing. FDCF waived this technical problem with Lockheed's proposed system as an "immaterial irregularity" because the RFP expressly provided that proposers would be bound by the terms of the RFP. The RFP required submittal of a thumb print option but reserved the right of FDCF to unilaterally exercise the option. Lockheed submitted Schedule 4, providing for the thumb print identification option, quoting a cost of $0. However, Lockheed conditioned that $0 quote on FDCF accepting Lockheed's proposal at the time of the initial contract. Morpho did not submit any Schedule 4, and Morpho's technical proposal shows this omission was probably inadvertent. FDCF waived as "immaterial" Lockheed's extraneous language conditioning the thumb print option in its proposal and likewise waived Morpho's complete failure to submit a Schedule 4 for the thumb print option pursuant to the RFP. The optional thumb print function had no impact on ultimate scoring of the respective proposals because no value was assigned to it. FDCF has taken the position that since the technical evaluation team did not consider either proposal to be technically "nonresponsive," then all flaws or omissions were properly waived. The cost proposals remained sealed until after the technical proposals were scored by the technical evaluation team. At formal hearing, FDCF personnel testified that it was never FDCF's intent to enter into a contract for the thumb print option at the time of the initial contract and that the thumb print option was purely for future informational purposes. The RFP used mandatory language to ensure that cost proposals would be submitted in two ways -- a bundled price and an unbundled price. The bundled and unbundled pricing schedules were mutually exclusive, and the point system set up in the RFP assigned equal weight to the scoring of the bundled and unbundled price schedules. FDCF reserved the unilateral right to select either bundled or unbundled pricing as its procurement method. Cost proposals were to be scored using a formula which compared each proposer's price to the lowest price proposal. Of the 400 points possible for cost proposals, 195 points were allocated by the RFP to the bundled pricing schedules (Schedules 1A and 1B), 195 points were allocated to the unbundled pricing schedules (Schedules 2A and 2B), and 10 points were allocated to the POS Verification Study (Schedule 3). The RFP clearly indicated that both bundled and unbundled prices were required to be submitted on the provided Schedule format "in order to assess FDCF options." FDCF did not decide until after scoring the cost proposals and immediately before it was ready to post the Notice of Intent to Award to Morpho, that it would elect to contract based on the bundled cost proposals. Up until that moment, the bundled and unbundled price schedules had some significance to FDCF, if only for flexibility in procurement. The RFP specified that FDCF would not own any of the equipment (hardware) for which it was seeking single unit prices in the unbundled schedules. Nonetheless, on the unbundled pricing schedules provided in the RFP, proposers were required to provide an unbundled unit price per workstation and unit price per printer. On Schedules 2A and 2B, "Unbundled Pricing," Morpho did not provide an entry in dollars and cents for fraud workstation printers or administrative workstation printers. Rather, Morpho's schedule inserted in those spaces, "included in w/s (workstation) price" or "included above." Lockheed also had some extraneous language on one of its schedules as opposed to just a dollar amount, but cost breakout was clear. Morpho considered the printers part of the imaging and fraud investigation workstations because the RFP required a dedicated printer for each workstation and the RFP specified FDCF would not own or maintain any hardware. Ms. Paris reviewed each cost proposal for compliance with Section C of the RFP. She was concerned about whether Morpho's "unbundled" schedules complied with the RFP. The RFP defined waiveable "minor irregularities" as "those which will not, in the opinion of the contact person, have significant adverse effect on the overall competition, cost or performance." Upon advice of her supervisor, Connie Reinhardt, and FDCF's General Counsel, Ms. Paris determined both proposals to be responsive, and substituted a price of "zero" in the questionable spaces on Morpho's "unbundled" schedules, despite the absence of a pricing break-out between the fraud workstations and printers or between the administrative workstations and printers on Morpho's "unbundled" schedules. Ms. Paris conceded that she was never referred to Rule 68-1.001(16) Florida Administrative Code,1 which defines "minor irregularity" in terms of effect on cost. Ms. Paris was told that only items which had an effect on the overall scores of the responding proposers' cost proposals could not be waived. The cost proposals were not evaluated and scored subjectively as the technical proposals had been. No Fatal Criteria applied to this third review phase. Scoring was to be based on a purely mathematical formula devised prior to distributing the RFP. The RFP drafters had contemplated ranking the respective cost proposals by simply inserting the dollar values each proposer placed on the unbundled unit price list into a computer program. Ms. Paris attempted to rank the cost proposals. To assure the integrity of the process, Chris Haggard, Automation Specialist, physically entered cost proposal figures into the computer program. Ms. Paris instructed him to ignore any "extraneous language" on the schedules of both proposers. The computer program would not accept the "zeros" inserted by FDCF. Without any substitutions by Ms. Paris, Morpho had bid "zero" in the space indicating there would be no charge for the unbundled unit price per inquiry, thereby intending to signify that there would be no charge for this function. The record does not suggest that this proper use of "zero" had any effect on the computer program. Ms. Reinhardt viewed the problem with FDCF's imputed zero components as a purely technical problem with the computer program and not an "irregularity" under the RFP. The computer program was adjusted to accommodate the imputed zeroes and produce a spreadsheet. On unbundled Item 14, FDCF ranked Morpho with a score of one and Lockheed with 15, the maximum. On Item 15, the fraud workstation color printer, Morpho was ranked 15 and Lockheed was ranked zero. On Item 16, the administration workstation, Morpho was ranked three; Lockheed was ranked 15. On Item 17, the administration workstation printer, Morpho was ranked 15 and Lockheed was ranked zero. Pursuant to the adjusted spreadsheet, Morpho received a score of 343 for its cost proposal, and Lockheed received a score of 240. Even if Morpho had received zero points for the printers and work stations (lines 14-17 of the Unbundled Schedules), and if Lockheed had received the maximum number of points available on these items, Morpho still would have received the higher score for its cost proposal. At the disputed fact hearing, FDCF gave as its justification for imputing "zero" for bundling language in Morpho's "unbundled" schedules the following reasoning: because FDCF had requested unbundled prices purely for future contracts, not the contract to arise out of this RFP, for informational purposes, or for a cost benefit analysis for state budget purposes; because the RFP specified that FDCF would neither own nor maintain any of the hardware proposed for this RFP; because Morpho's failure to conform to the unbundled price format was not "irregular" if Morpho did not sell printers independently and Morpho used the unbundled schedules in a manner consistent with Morpho's offer; because the zero imputed by FDCF reflected accurately the integrated costs in effect; because Morpho was not charging separately for the printers; because FDCF's insertion of "zero" constituted no unfair economic advantage to Morpho; and finally, because having chosen the bundled option, FDCF believed the Morpho proposal will save a great deal of money and "represent the best value for the state."2 The RFP specified that the successful proposer would be responsible for the "cost of system development, implementation, and operations" for the contract term as well as any extensions and include that cost in either the unbundled unit price per record added (per add) or the price per inquiry (per inquiry) in Schedules 2A and 2B. There is no RFP requirement that the maintenance portion be "unbundled" further. "Cost of . . . operations" meant "cost of maintenance." According to Richard Woodard, who was responsible for the Morpho cost proposal, including Item 9, Morpho's price per add of $6.70 on Schedule 2A included $.80 for maintenance. However, at formal hearing, Lockheed elicited from Ms. Paris testimony that even though Morpho had indicated that maintenance was not included in its unbundled schedules, FDCF had decided to hold Morpho to the prices shown in their per add or per inquiry line item (TR-61), and that because of Morpho's own extra schedule attached to the bottom of unbundled pricing Schedule 2A, Morpho's maintenance price over 5 years could be calculated on current maintenance prices. (TR-62) When the prices are calculated mathematically over the life of the contract they do not correspond to the $.80 per add testified to by Mr. Woodard.3 Morpho's maintenance cost schedule and the provisions within Morpho's "Comments on Unbundled Pricing" indicated that only 12 months of warranty were included with the equipment identified in Morpho's unbundled pricing schedules and that after 12 months, maintenance contracts would be negotiated. FDCF ignored this as "extraneous language," and did not consider it to be a material irregularity. The Morpho bundled cost proposal was calculated on an average of 2.2 persons per file who would require finger imaging and matching. Morpho asserted that these calculations had been made on a "worst case scenario" based on RFP Addendum 3's specification that an actual number cannot be provided. It is expected that less than 2.2 persons per case will be printed. Lockheed selected a number less than 2.2 per file, and asserted that Morpho's "worst case" scenario is, in effect, a "best case" scenario because the higher the number of prints, the less Morpho can afford to charge per add; that by selecting the 2.2, Morpho has materially failed to comply with the RFP specification which estimated less than 2.2 persons per file, and that because Morpho also inserted the extraneous language in its transmittal letter as set out in Finding of Fact 19, supra., Morpho's proposal not only varied the express terms of the RFP by the use of "2.2" but also included "pricing information" in its transmittal letter and conditioned its prices on the potentially false assumptions stated or on a figure greater than a figure "less than 2.2," as required by the RFP.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Florida Department of Children and Family Services enter a final order rejecting all proposals. DONE AND ENTERED this 21st day of December, 1998, in Tallahassee, Leon County, Florida. ELLA JANE P. DAVIS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 21st day of December, 1998.
The Issue 1. Whether the proposals submitted by Consultec and EDS met the mandatory requirements of the Request for Proposals, and, if not, whether the proposal submitted by GTE met the mandatory requirements; (2) Whether the evaluation of the proposals by HRS was infected with substantial, material irregularities which resulted in an arbitrary scoring and evaluation process; (3) Whether GTE has standing to contest the award of the contract to Consultec; and (4) Whether GTE has waived any of the issues it has raised due to its failure to timely challenge the terms and conditions of the Request for Proposals.
Findings Of Fact General Background of the RFP On January 6, 1987, HRS released a Request for Proposals for Florida Medicaid Program Fiscal Agent Services (RFP) for qualified organizations to implement and operate a certifiable Medicaid Management Information System (MMIS) for the Florida Medicaid Program. There were several reasons why HRS wanted a new MMIS system for the Florida Medicaid Program. First, the current system was more than ten years old and, although enhanced and modified numerous times, had been determined to be archaic. Second, the federal government indicated to HRS that it would not participate in future funding of the operation of the current system. Third, the federal government recommended that Florida purchase a new system. In February 1986, HRS began the process of preparing the RFP to be used in selecting the fiscal agent for the new MMIS. The process began with the development of an Advanced Planning Document (APD). Since the federal government pays for the large majority of Medicaid services, the federal Health Care Financing Administration (HCFA) of the Department of Health and Human Services (HHS) is very much involved in the various stages of the state procurement process. The purpose of the APD, which describes in detail the planned procurement process, is to obtain federal approval of the procurement process proposed by the state to ensure federal financial participation. The APD was submitted to and approved by HCFA. After approval of the APD, HRS contracted with Peat, Marwick, Mitchell and Company-Compass Consulting Group (PMM Compass) for consultant services regarding HRS's Medicaid fiscal agent procurement. PMM Compass is a nationally known consulting firm in Medicaid procurements. Its function was to review the proposed evaluation section of the RFP and to prepare a detailed evaluation plan, including written evaluation instruments and an evaluation manual, evaluation procedures, and evaluation training and materials, which would be used in evaluating the fiscal agent business and technical proposals. After the RFP was prepared, it was submitted to HCFA for approval. HCFA oversees federal financial participation in the Medicaid program and reviews state RFP's for MMIS systems to ensure that federal acquisition regulations have been met. The HCFA approved the RFP on November 28, 1986. On December 8, 1986, the Information Technology Resource Procurement Advisory Council of the Department of General Services approved the RFP. On January 6, 1987, the RFP was issued. Section 60.800 of the RFP provided that any party adversely affected by the bid solicitation must file a notice of protest within 72 hours after receipt of the RFP. No one filed a protest contesting any of the provisions of the RFP. On April 6, 1987, proposals were received from the following three offerors: Consultec, Inc. (Consultec), EDS Federal Corporation (EDS), and GTE Data Services, Inc. (GTE), subcontracting with The Computer Company (TCC). The RFP The RFP was issued for the procurement of fiscal agent services for the Florida Medicaid Program. The contractor chosen will serve as the HRS fiscal agent to administer the state's Medicaid program. The contractor must furnish all computer hardware, computer software, personnel, and other necessary resources to process approximately 24 million Medicaid claims each year and to keep current track of all Medicaid providers and recipients. The contractor must design and implement the computer and personnel systems to provide these services, must implement necessary changes to the system during the life of the contract, and must perform certain tasks to turn the system over to the state or to the new contractor at the end of the contract term. The total dollar amount paid during the contract will be approximately 45 to 50 million dollars. The RFP is a two-volume document containing approximately 500 pages, including the Appendix which is Volume II. The RFP consists of nine sections which are numbered 10, 20, 30, and so forth through 90. Section 10 provides an administrative overview; Section 20 provides a summary of the present system; Section 30 outlines the scope of the work required setting forth the responsibilities of the contractor and of the state; Section 40 sets forth the Florida MMIS System requirements; Section 50 contains the terms and conditions of the contract; Section 60 sets forth the procurement procedures; Section 70 contains the required contents of the technical proposal, which includes sections concerning corporate background and experience, project organization and staffing, project management and control, work plan and schedule, MMIS system description, and data processing; Section 80 sets forth the required content and format of the business proposal, which contains each offeror's price information; and Section 90 relates to the manner in which the proposals will be evaluated. The RFP provided that the proposal should be submitted in two parts: the technical proposal and the business proposal. The technical and business proposals had to be sealed separately, though submitted simultaneously, and would be open at different stages. The technical proposals were opened on April 6, 1987; the business proposals were opened on June 15, 1987, after scoring of the technical proposals was completed. Each technical proposal was several volumes in length. The Evaluation Process The evaluation process was conducted in accordance with the formal evaluation plan developed by the RFP Project Director, Tom Arnold, and PMM Compass. Section 90 of the RFP set forth the manner in which proposals would be evaluated. The evaluation was conducted in five phases: Phase 1, Evaluation of Mandatory Requirements of Technical Proposals; Phase 2, Evaluation of Technical Proposals; Phase 3, Evaluation of Mandatory Requirements of Business Proposals; Phase 4, Evaluation of Business Proposals; and Phase 5, Ranking of Proposals. The way in which the proposals would be evaluated in each of the five phases was described in Section 90 of the RFP. Phase 1 The first phase of the evaluation process was to review the technical proposals submitted by the offeror to ascertain whether the proposals complied with all the mandatory requirements of the RFP. The purpose of Phase 1, as stated in Section 90.200 of the RFP, was to determine whether each technical proposal was sufficiently responsive to the RFP to permit a complete evaluation. This phase of the evaluation was performed on a "pass-fail" basis and was conducted immediately following the proposal due date. Section 90.200 of the RFP lists the 27 questions that would be used to determine whether the technical proposals met the mandatory requirements of the RFP. HRS considered that an offeror met the mandatory requirements for the technical proposals if an affirmative answer could be given to all 27 questions. The 27 questions were divided into two categories, proposal submission and technical proposals. The questions under the proposal submission category were questions such as the following: Was the proposal received by HRS no later than 2:00 P.M. (Eastern Standard Time) on April 6, 1987? Did the vendor submit separate, sealed business and technical proposals and the required proposal bond? Is this the only proposal? (Alternate proposals not allowed). Are there fifteen (15) copies of the technical proposal? Does each copy of the technical proposal contain the required transmission letter? The questions under the technical proposal category were simply questions to ensure that each of the sections required to be included in the technical proposal had in fact been included. There were eight questions to correspond to the eight sections that were required. Each question was worded in the same manner, such as, "Is a Corporate Background and Experience section included? All three offerors submitted technical proposals that were determined to be sufficiently responsive to the RFP to permit a complete evaluation. Each offeror received a "pass" designation for all questions except GTE. GTE did not receive a pass on Question No. 4, which required that 15 copies of technical proposal be submitted. GTE submitted only 14 complete copies of its technical proposal by the deadline. However, HRS determined this was a minor irregularity, and GTE was allowed to submit the missing volume of its technical proposal the following day. In the appendix to the RFP a "minor irregularity is defined as follows: Minor irregularities are those exceptions which will not have an adverse effect on costs or performance. The first phase of the evaluation process was conducted by Tom Arnold, Tom Wallace, and Barbara Thrower of HRS. This phase was completed within 3 or 4 hours after the proposals had been opened. The mandatory requirements portion of the HRS evaluation manual was used in determining whether each offeror met the mandatory requirements. The same 27 questions listed in the RFP were contained in the evaluation manual. The evaluators were instructed in the manual to assign a "pass" score to each item for which their response to the question defined in the item is "yes." Phase 2 After determining that all of the technical proposals met the mandatory requirements and were sufficiently responsive to permit a complete evaluation, Phase 2 of the Evaluation Process was begun. The purpose of Phase 2 was to measure the individual merit of each technical proposal in each of several areas according to preestablished criteria. A maximum of 2,000 points could be received for each technical proposal. The basic categories evaluated and their maximum number of points were: Corporate Background and Experience 200 pts. Project Organization and Staffing 225 pts. Technical Approach 225 pts. Project Management and Control 150 pts. Work Plan and Schedule 200 pts. MMIS Description 800 pts. Data Processing 200 pts. Proposals were evaluated through four separate methods: (1) Review of the written response to the RFP; (2) Oral presentation; (3) Visits to sites where each offeror operated a baseline system; and (4) Reference checks. The RFP advised the offeror of the scoring system for the technical proposals and the ways in which information would be obtained. The offerors were advised by the RFP that detailed evaluation criteria had been developed for each of the categories listed. Further, for each of the categories listed, the RFP contained a paragraph which was meant to "describe generally the factors covered by the detailed criteria." Section 90.390 of the RFP set forth the manner in which points would be assigned to the technical proposal. Section 90.390 reads as follows: Scoring of the seven areas in each technical proposal shall be done using preestablished criteria and predefined scoring values. Each criterion within an area will be independently scored by evaluators. Indivi- dual raw scores from the evaluators, for each criterion, for each offeror's proposal, will be averaged then multiplied by a predetermined weight to get a weighted point value for that criterion. Scoring weights will not be available to the evaluation committee, but will be applied to raw scores by other designated staff. Weighted point values for all criteria in an offeror's proposal will then be tallied. The final technical score for each proposal is then calculated using the following methodology: A maximum of two thousand (2,000) weighted points will be assigned to the highest passing technical proposal. . . . The formula to be used to award all other offerors a proportional amount of points was also included. The formal evaluation and initial scoring of the technical and business proposals was performed by a Technical Evaluation Committee (Evaluation Committee) appointed by the Secretary of HRS. The Committee consisted of eleven members with backgrounds and experiences in MMIS program development, data processing, and financial analysis. While the members of the Evaluation Committee did not formulate the evaluation criteria which were used, they were well-qualified to apply the evaluation criteria provided. Further, on March 24-27, 1987, prior to the receipt of Proposals on April 6, HRS Sponsored a three and one- half day training session for the members of the Evaluation Committee. Judith Hansen, a consultant with PMM Compass, headed the training sessions. During the course of these training sessions, the evaluators went over each of the criteria on which proposals were to be judged to ensure that all of the evaluators understood the scoring criteria in the categories they would be scoring. Ten of the Evaluation Committee members were responsible for evaluating the technical proposals in Phase 2 of the evaluation process. The individuals were divided into subgroups representing each of the seven categories to be evaluated. Five of the categories had three evaluators. The MMIS Description category had six evaluators, and the Technical Approach category had five evaluators. None of the members of the Evaluation Committee was an evaluator in each of the seven categories; the most categories scored by any one evaluator was four. Each member of the Evaluation Committee scored each of the proposals in the categories to which they were assigned; however, to ensure that each proposal was judged solely by the detailed evaluation criteria provided rather than against each other, an evaluator was permitted to have only one proposal before him to score at a time. Evaluators were also instructed not to discuss their scoring with the other evaluators but to independently score each proposal. The Evaluation Committee began reviewing the technical proposals on April 7, 1987, the day after proposals were submitted. Proposals were evaluated by the committee members at the Government Employee's Credit Union, a location away from their normal work place. Each evaluator was given a technical proposal and was allotted two days simply to read the particular proposal and become familiar with it. They then began to evaluate the proposal in the categories assigned. When the evaluators had finished the first proposal, they turned in both the proposal they were reviewing and their scoring manual for that proposal and received another offeror's technical proposal to read and evaluate. Each evaluator was given a separate scoring manual for each of the offerors which contained the criteria to be used in scoring the proposal in the assigned categories. Each category had criteria to be scored. Different categories had a different number of criteria. For example, the Corporate Background and Experience category had fifteen criteria; the Project Management and Control had eight; and the MMIS Description had 49 criteria. Each criterion in every category was to be scored from zero to ten by the evaluator. A zero was to be given when the offeror had omitted the particular aspect of the area or did not establish the capability to perform it. One to three points was "poor," four to six points was "average," seven to nine points was "good," and ten points was excellent. The scoring manual was organized with the criterion to be scored, and matters that might be considered under that criterion, on the left-hand page. The scoring sheet for that criterion was on the right-hand page. The scoring sheet contained a space for the numerical points awarded and also provided space for comments to indicate the reason for the score given. All proposals were initially scored based on the information provided in the proposals. The scores were Subsequently reviewed and revised, if appropriate, as additional information became available through the reference checks, the oral presentations, and the on-site visits. The evaluations of the technical proposals took over two months to complete. Throughout this period, but after the initial scoring was completed, debriefing sessions were conducted with the evaluators to ensure that the evaluators neither misunderstood nor overlooked relevant information from the proposals, reference checks, oral presentations, or site visits. Reference checks were conducted to verify both the corporate capabilities of the offeror and the qualifications of proposed senior project personnel. The reference checks were conducted by two members of the Evaluation Committee, Diana Flagg and George Strickland. These two individuals were chosen to conduct the reference checking because of their skills and abilities--they both had experience in contract management functions and dealing with state agencies-- because their workload was such that they had the time available. Ms. Flagg and Mr. Strickland were given a reference check manual that had been prepared as part of the evaluation package which contained the questions to be asked; however, they were not told which references to call. After discussing the matter, they decided to contact three (3) different states as corporate references for each of the bidders. They used the following criteria to determine which states to contact: (a) whether the state used the same baseline system proposed by the offeror for Florida; (b) whether the state had recent experience with the offeror; and (c) whether the state had experience with the development and operations of MMIS systems that would be similar to Florida's. The term "baseline system" refers to the proposed subsections of a certifiable, operational MMIS. An MMIS is comprised of six to seven federally required general system design subsections. The RFP defined "Baseline System" as "[t]he basic systems code used for the FMMIS consisting of, at the minimum, the Claims Processing Subsystem, the Reference Subsystem and the MAR Subsystem." The RFP required offerors to propose a certifiable operational MMIS and stated that the baseline system had to be operational in some state. Therefore, contacting the states that had the same or a similar baseline system as that proposed for Florida was the important factor in choosing the states to be contacted. Based on the three criteria stated, HRS decided to contact Montana, Ohio and Washington for Consultec; Georgia, Tennessee and Virginia for GTE/TCC; and Arkansas, Kentucky and Georgia for EDS. The corporate reference checks were conducted in the following manner: After deciding the states to be contacted, Ms. Flagg and Mr. Strickland jointly called the person listed by the offeror as the corporate reference for that state. Upon reaching the listed person, Mr. Strickland asked the corporate reference the predetermined questions in the reference check manual regarding that state's experience with the offeror. The reference was asked to rate the offeror on a scale of 0 to 4 and to give comments supporting the score where appropriate. To insure accuracy, both Ms. Flagg and Mr. Strickland recorded both the scores and the comments given by the reference for each offeror. After each call was completed, they compared their notes to make sure the reference's scores and comments were accurately transcribed. The personnel reference checks were conducted by Ms. Flagg and Mr. Strickland in the same manner. The personnel references called were those listed as references in the proposal for the individual, except in one case the listed reference referred the evaluators to another individual who had worked more closely with the person being checked. After the corporate and personnel reference checks were completed, the reference check manual containing the information received was made available to all of the evaluators for use in scoring the proposals. Oral presentations by each offeror were held on May 26, 27, 28, 1987. The orals provided the offerors with a chance to present their proposals and provided the committee with an opportunity to obtain answers to questions developed during their initial review of the proposals, to observe the offerors in action, and to request clarification of an offeror's proposal. The offerors were advised at the beginning of the presentation that any answers given at the oral presentation would be considered part of the proposal. In addition to the oral presentation, six members of the Evaluation Committee, plus the project director and the evaluation oversight manager, made visits to one installation site where each offeror's baseline system was operational. The site visits gave the evaluators an opportunity to see the offerors in action and to speak with state personnel in person about the offeror. The following site visits were made: June 1-2 EDS Little Rock, Arkansas June 3-4 GTE Data Services/The Computer Company Nashville, Tennessee June 8-9 Consultec, Inc. Jefferson City, Missouri Columbus, Ohio For Consultec, two locations rather than one were visited because while Ohio utilizes the Consultec baseline system bid in Florida, Consultec does not-run the system. In Missouri, on the other hand, Consultec is operating an MMIS system originally designed by EDS. Thus, by visiting two locations, HRS was able to evaluate Consultec's baseline system and analyze Consultec's operations and capabilities as a fiscal agent. The information received as a result of the site visits was recorded in the Site Visits Manual for each offeror. The manual contained the questions to be asked at each site and was part of the evaluation package. As with the Reference Check Manual, the Site Visits Manual was made available to all of the evaluators. On June 15, 1987, after the scoring of the technical proposals was completed by the Evaluation Committee, the raw scores assigned by each evaluator for each criterion were transferred to a summary scoring document. The scores were averaged then multiplied by the weight factor assigned to that criterion. The weighted scores for each of the criteria in each category were then added together, providing a total score for category. The following are the weighted scores received by each offeror, rounded to the nearest whole number: Corporate Background Consultec EDS GTE and Experience 107 139 98 Project Organization and Staffing 128 115 112 Technical Approach 132 121 127 Project Management and Control 87 95 75 Work Plan & Schedule 88 118 80 MMIS Description 425 473 418 Data Processing 126 135 135 1093 1196 1045 34. Since EDS had the highest total points scored, it received 2,000 points for its technical proposal. The others received a comparable point value determined by dividing the offeror's score by EDS's score and multiplying the result by 2,000. Consultec received 1,828 points, and GTE received 1,747 points. The completed technical evaluation points were locked in a bank vault and were not disclosed. On June 15, 1987, the business proposals were publicly opened. Prior to that time the sealed business proposals had been kept in the vault. Thus, no one knew the contents of the business proposals while the technical proposals were being evaluated. At the public opening, the business proposal summary pricing schedules were read to all offerors and posted at HRS. Phase 3 Following the public opening of the business proposals, HRS reviewed the business proposals for compliance with the mandatory requirements for business proposals contained in the RFP. HRS conducted this "pass-fail review" of the business proposals by determining whether the business proposals submitted by each offeror complied with the requirements of Section 90.400 of the RFP. The first two paragraphs of this Section read: The purpose of this phase is to determine if the business proposal is sufficiently responsive to the RFP to permit a complete evaluation. The following items will be reviewed as mandatory requirements: Section 90.400 of the RFP then lists 19 questions regarding the business proposals submitted by offerors. HRS considered an offeror as having met the mandatory requirements for the business proposals if an affirmative answer could be given to all 19 questions contained in Section 90.400. All three offerors submitted business proposals which were determined to have met the mandatory requirements for business proposals contained in the RFP. Phase 4 The business proposals then underwent a more detailed review by three of the HRS evaluators, all of whom were accountants and two of whom were CPAs. This review was to determine whether the business proposal for each offeror was consistent with that offeror's technical proposal and whether the calculations in the pricing schedules contained in the business proposals were accurate. For each offeror, the overall business proposal was determined to be consistent with the technical proposal. Minor arithmetic errors and inconsistencies were noted by the evaluators on each of the business proposals. For example, GTE's installation task salaries appeared to be unreasonable compared to the effort required to complete the tasks proposed in the technical proposal. Although all three evaluators noted this problem, it was determined that the inconsistency was not significant enough, considering the entire project, to merit rejection of the bid. The evaluators noted that Consultec had combined the building and utility categories on the pricing schedules, but found this also to be insignificant Section 90.520 of the RFP provides as follows: "Any business proposal that is incomplete or in which there are significant inconsisten- cies or inaccuracies may be rejected by HRS. (e.s.) As specified in the RFP, points were awarded for the business proposal as follows: the lowest evaluated operational price, the total fixed price per claim for the five-year contract period, was awarded 850 points; the lowest total installation price, the sum of the planning, design and development, acceptance testing and implementation tasks, was awarded 50 points; the lowest systems personnel billing rate was awarded 50 points; the lowest total field representative price was awarded 25 points; and the lowest hourly cost of CPU time was awarded 25 points. The other offerors in each category were awarded a proportional share of the maximum points allowable. The price per claim category received 850 of the 1,000 possible points because this payment represents the most important work to be performed under the contract and because payment will occur during at least five years of the contract. The fixed price per claim is of vital importance to the state because it allows the risk of claims volume variance to be transferred to the contractor. A 10 million variance in annual claims volume, from 19 million to 29 million was established in the RFP, with provision for dealing with claims volume outside the range parameters. There is considerable risk for abnormal claims variance due to program changes that can occur during the life of the contract such as federal establishment of new eligibility groups, new services, or redefined claims definitions. The state legislature may require additional Medicaid services or additional eligibles. However, a fixed price per claim limits the cost of handling increased processing services. The following table displays the points awarded for the business proposals by offeror: Consultec EDS GTE Installation Price 23 43 50 ($7,439,321) ($4,030,129) ($3,433,822) Price Per Claim 850 620 689 ($.2652) ($.3637) ($.3270) Composite Hourly Rate 29 21 50 for Systems Personnel ($95/hr) ($134/hr) ($55/hr) Provider Field Reps 23 25 21 for Five years ($1,892,820) ($1,810,380) ($2,124,450) Price for CPU Time 25 13 4 ($1,100) ($3,625) ($400) TOTAL 951 722 814 Phase 5 After the proposals were rated by the Technical Evaluation Committee, points awarded to the business proposals were added to the technical points to determine the ranking and recommendation of the committee. The ranking and recommendation of the committee along with supporting materials were conveyed to the Steering Committee, composed of four HRS executives. The Proposal Evaluation Committee's Report to the Steering Committee provided a 116 page detailed summary of the overall evaluation results, concluding with the Evaluation Committee's ranking of proposals, which were as follows: Consultec EDS GTE Technical Proposal 1,828 2,000 1,747 Business Proposal 951 722 814 Total 2,779 2,722 2,561 Ranking 1 2 3 In addition to receiving the Evaluation Committee's report, the Steering Committee, through Mr. Moody, one of its members, became aware of a letter written by Senator Grant to the Secretary of HRS concerning the evaluation of the proposals. Attached to the letter was a position paper prepared by GTE which attempted to compare the business proposals submitted by Consultec and GTE by considering the "future value of funds" or "time value of money" based on interest that could be earned on the difference between Consultec's installation price and GTE's installation price. Mr. Moody, a CPA, had been assigned the task of responding to the letter and the position paper. Mr. Moody raised the topic with the Steering Committee and also explained the deficiencies in the GTE analysis. After a thorough review of the Evaluation Committee's report, the Steering Committee was satisfied with the evaluation process. The Steering Committee unanimously recommended the selection of Consultec as the contractor for fiscal agent services for the State of Florida. The Secretary of HRS concurred with the recommendation, and by letter dated July 9, 1987, the offerors were notified of the intent to award the contract to Consultec. GTE filed its notice of protest on July 15, 1987, and its Formal Written Protest on July 24, 1987. After announcing its decision to award the contract to Consultec, HRS informed HCFA of its choice and submitted to HCFA a revised APD reflecting the costs contained in Consultec's business proposal. After reviewing this document and, having previously approved the evaluation process used in selecting the successful offeror, HCFA informed HRS that it did not need any additional information in order to approve the contract award and that the initial review indicated that approval would be granted at the appropriate federal financial participation rate. However, HCFA cannot give the state final approval while the contract award is being disputed. DID THE PROPOSALS SUBMITTED BY CONSULTEC MEET THE MANDATORY REQUIREMENTS OF THE RFP? FINANCIAL STATEMENTS Among the several sections required in each technical proposal was one entitled "Corporate Background and Experience." The required contents of this section were set forth in Sections 70.400 through 70.440 of the RFP. Section 70.400 stated: The Corporate Background and Experience section shall include for the offeror and each sub-contractor (if any): details of the background of the company, its size and resources, details of corporate experience relevant to the proposed fiscal agent contract, financial statements, and a list of all current or recent Medicaid or related projects. The detailed requirements for each of the required elements listed in Section 70.400 was contained in the subsequent sections to the RFP. The requirement for financial statements was detailed in Section 70.420 as follows: Financial statements for the contracting entity shall be provided for each of the last three years, including at a minimum: balance sheets statement of income statements of changes in financial position auditors' reports notes to financial statements summary of significant accounting policies The word "shall" is defined in the Glossary of the RFP as "[i]ndicates a mandatory requirement or condition to be met." After the RFP was released but prior to the submission of bids, HRS provided an opportunity for all prospective offerors to submit written questions to HRS regarding the terms and conditions of the RFP. After receiving these questions, HRS sent all prospective offerors both the written questions submitted by the various prospective offerors and HRS' written responses to them. During this process, one bidder, EDS, submitted the following question to HRS: Since our parent corporation does not publish financial statements for each of its individual subsidiaries, will the financial statements for the parent company be satisfactory? In response, HRS provided all prospective bidders with the following answer: It is the department's intent to review the financial stability of each offeror. Offerors should present appropriate documen- tation to meet this requirement. From the answer given, it is apparent that HRS did not intend to preclude the submission of consolidated financial statements but did intend that each offeror should include "appropriate documentation" to allow HRS to review, and evaluate, the financial stability of the offeror. Like EDS's parent corporation, Consultec's parent, General American Life Insurance Company (General American), has a policy of not releasing the financial statements of its subsidiaries. Based on this policy and HRS' written response to the EDS question, Consultec submitted with its proposal the consolidated financial statements of its parent, General American. Consultec also submitted an annual report showing Consultec achieved a before tax income of $3.4 million in 1985. In its response to the RFP, Consultec indicated that the financial resources of General American backed any agreement Consultec entered into, as follows: The considerable resources of General American ensure Consultec's financial stability. Additionally, our access to the resources of our parent company (including manpower, data processing facilities, and financial support) ensures the successful performance of any contractual obligations. Because of this support, Consultec has greater capacity now than at any time in its corporate history to meet any and all contractual requirements and commitments. However, the General American consolidated, audited financial statements contained in the Consultec proposal contained no ascertainable information about the separate financial condition or financial performance of Consultec. Section 90 of the RFP explained how the technical proposals would be evaluated and specified what items would be considered "mandatory requirements." Technical proposal Mandatory Requirement No. 21 asks only the general question, "Is a Corporate Background and Experience section included? (Section 70.400)". A Corporate Background and Experience section was included in Consultec's submission. The detailed evaluation of criteria under the Corporate Background and Experience section occurred under the Phase 2 Evaluation of Technical Proposals. Oral presentations were considered a part of the technical proposal evaluation process. During Consultec's oral presentation, HRS asked Consultec to clarify its proposal by stating whether General American would be financially responsible for the Florida MMIS project. In a follow-up question, Mr. Tom Arnold asked Consultec if it would consider either submitting separate financial statements for Consultec or agreeing that General American would guarantee Consultec's performance if Consultec were awarded the contract. Consultec responded to this request by submitting a letter to HRS wherein Consultec stated that General American was willing to guarantee Consultec's performance under the contract. This letter was signed by Richard Martz, Senior Vice President of Consultec. RFP specifically stated that the state reserved the right to request amendments to the proposals or to waive minor irregularities. The purpose of the oral presentations was to clarify any information provided in the technical proposals. Further, the financial statements were considered in scoring only one criterion in the Corporate Background and Experience section which was worth a total of 10 points. Finally, GTE included in its proposal the financial statements of its parent, GTE Corporation, and all three evaluators considered the financial strength of GTE's parent in award points for that criterion. GTE also scored more points in this area than Consultec. Consultec received no material advantage over other offerors by submitting consolidated financial statements. If Consultec's failure to include its own financial statements in the technical proposal can be considered a deviation at all from the requirements of the RFP, in light of HRS's clarification of those requirements, it certainly cannot be considered a deviation that would require the rejection of its proposal. CONSISTENCY OF THE BUSINESS AND TECHNICAL PROPOSALS Sections 90.500 and 90.510 of the RFP provide: 90.500.--Each business proposal successfully meeting the mandatory requirements reviewed in Phase 3 will be examined to determine if the business proposal is consistent with the technical proposal and its calculations are accurate. 9O.510--Any business proposal that is incomplete or in which there are significant inconsistencies or inaccuracies may be rejected by HRS. The state reserves the right to reject all proposals. In its Formal Protest, GTE alleged that Consultec's business and technical proposals were not consistent because Consultec "front-end loaded" its proposal. "Front-end loading" means moving a cost from the later part of a contract to the front or charging for a cost that will not be incurred until later in the contract. Section 80 of the RFP describes the RFP's requirements for the business proposals. In the business proposal, each offeror sets forth the costs of its proposed FMMIS. The RFP directs each offeror to include in its business proposal "a firm fixed price for each of the requirements contained on the pricing schedule. . . ." One of the five requirements is installation costs. Section 81.210 of the RFP states that Pricing Schedule B of the business proposal summarizes the four major tasks involved in the installation phase of the Florida MMIS system as described in the RFP. Those four major tasks are described in the RFP at Sections 30.120 through 30.450. The offeror is directed to "schedule the fees for each of these tasks on the detailed Schedules B-1 through B-4" and is told that "[t]hese fees will form the basis from which the installation price is determined." Section 80.120 similarly states that "the installation price will be calculated as the combined sums of the prices of the Planning Task, Design and Development Task, Acceptance Testing Task and the Implementation Task." As required by the RFP, Consultec submitted a business proposal including Pricing Schedule B, which set out the price components of its installation price by task. One line item of the price components is labeled "computer resources." GTE's argument is that the cost of certain computer equipment (computer hardware and software) which Consultec included in the installation price under "computer resources," should have been allocated over the life of the contract and included in the operational price. Consultec's total price bid for the installation phase was $7,439,321, as compared to $4,030,129 for EDS and $3,433,822 for GTE. These differences are largely explained by differences in the cost item, "computer resources." These costs total $3,049,809 for Consultec, $1,130,856 for EDS, and $608,493 for GTE. The treatment of the acquisition price of the computer equipment to be purchased by Consultec is not consistent with generally accepted accounting practices. Proper accounting practices would distribute the cost of the equipment over its useful life rather than charging the entire purchase price as an initial cost in the installation period. Nevertheless, nothing in the RFP required the use of "generally accepted accounting practices" in allocating costs. Nothing in the RFP required that the costs of purchasing the computer equipment be made a part of the operations costs, by allocation over the life of the contract, as opposed to being charged as an installation cost at the time of purchase. Section 30.220 specifically states that it is the contractor's responsibility in carrying out the Design and Development Task, described as part of the installation phase, to [a]cquire the equipment to be used for the design, development, implementation, and operation of the new system." GTE has failed to show how Consultec's business proposal was inconsistent with its technical proposal. The purpose of requiring consistency between the two proposals, generally, is to ensure that each bidder has sufficient funds in its business proposal to perform the tasks required in the technical proposal. If computer hardware to be used during the life of the contract is purchased during the installation phase, the expense is incurred and paid for at that time, and inclusion of such cost as an installation cost is appropriate. GTE also argues that Consultec's business and technical proposals are inconsistent because Consultec has failed to provide sufficient data entry operators in their proposal. GTE attempted to establish this shortage through the testimony of Ms. Clark. However, there were discrepancies in her calculations and she was confused in her testimony. Further, her testimony was based on several assumptions that Consultec did not necessarily make or have to make. Finally, Ms. Clark's calculations indicated that Consultec was short 10 data entry operators in the first year of operation, yet Consultec provided 49 data entry operators the first year--the same number provided by both EDS and GTE in their proposals. In short, there was no competent evidence presented to show that Consultec's proposal provided for an insufficient number of data entry operators. After HRS announced its intent to award the contract to Consultec, HCFA reviewed Consultec's technical and business proposals to determine whether they were consistent with one another. After conducting this consistency review, it was HCFA's conclusion that Consultec's technical and business proposals were consistent. PRICING SCHEDULES - CORPORATE REGISTRATION In its formal protest, GTE alleged that Consultec "modified several of the pricing schedules in its proposals so that the cost categories submitted were different from those required." This was not included as an issue in respondent GTE's prehearing statement, and at the hearing, GTE presented no evidence that any such modifications were material or gave Consultec an advantage. In its formal protest GTE alleged that the corporate charter number provided by Consultec in its transmission letter was for a corporation named "General American Consultec, Inc." This was not included as an issue in GTE's prehearing statement, and there was no evidence presented to support this allegation. WAS THE EVALUATION OF THE PROPOSALS BY HRS INFECTED WITH SUBSTANTIAL, MATERIAL IRREGULARITIES? CRITERIA USED IN THE TECHNICAL EVALUATION. In evaluating the technical proposals, the HRS evaluators used an evaluation or scoring manual which contained the criteria to be used in scoring the technical proposal in each of the seven sections or categories. In its Formal Protest, GTE alleged that the scoring manual used by the HRS evaluators contained criteria and tests which were materially different from those set forth in RFP. The RFP evaluation criteria for the "Corporate Background and Experience" section of the proposal included, among others: (a) large scale data processing development and implementation experience, (b) medical claims processing experience, and (c) medicaid and MMIS experience. The RFP evaluation criteria for the "Data Processing" section of the proposal included, among others: (a) telecommunications network support, and (b) telecommunications experience. GTE has no previous MMIS contracts, but is the country's fourth-largest data processing company. It designed and submitted its proposal expecting to be graded on large-scale data processing experience, telecommunications network support and telecommunications network experience. Mr. Brandenburg, a Medicaid project director for GTE, testified that he felt HRS' scoring manual did not give any weight to an offeror's large scale data processing experience or telecommunications network experience even though these were listed as items HRS would consider in the RFP. However, several of the scoring criteria reference communication links, telecommunications network support, telecommunications network experience and number of persons engaged in claims processing operations. Further, in scoring GTE on criteria 8, 13 and 5 under the Data Processing section, the evaluators referred to GTE's section on telecommunciation experience and support. Section 90 of the RFP made it quite clear that proposals would be evaluated based on preestablished criteria that had been developed for each of the various sections of the technical proposals. The RFP stated that paragraphs 90.320 - 90.380 described "generally" the factors covered by the criteria. In essence, because "large-scale data processing development and implementation experience" was listed as one of the factors that would be covered by the criteria under Corporate Management and Experience, GTE assumed that it would be accorded more weight than it was in the evaluation criteria. Mr. Brandenburg felt that too much consideration was given to MMIS experience in the evaluation process and not enough to experience outside the MMIS industry. However, section 90.310 of the RFP provides: Offerors should note that the entire evaluation will place considerable emphasis on demonstrated experience directly applicable to MMIS transfer or replacement, modification development, and Medicaid fiscal agent operations. In summary, there was no competent evidence presented to support GTE's allegation that the scoring manual used to evaluate the proposals contained criteria that was materially different than those set forth in the RFP. THE EVALUATION PROCESS AND REFERENCE CHECKS Although the RFP set forth generally the criteria to be used in evaluating the technical proposal, the specific criteria used in evaluating the proposal were not included in the RFP. However, the RFP made it clear to offerors that there were predetermined criteria that would be used. The RFP indicated that information would be obtained from reference checks, from the proposal itself, from site visits, and from oral presentations. The RFP specified that the raw scores from the evaluators for each criterion would be averaged and then multiplied by a predetermined weight to get the point value for each criterion. None of the offerors protested the method of evaluating the proposals. Further, there was no evidence presented to suggest that the use of undisclosed weights was irregular. The initial recommended weights from the evaluation expert, PMM Compass, were modified by the Issuing Officer to reflect the areas most important to Florida, then reviewed with and approved by HCFA officials. Mr. Larry Platt of HCFA confirmed that the use of non-disclosed weights is very typical. Indeed, he had not been involved in any procurements in which weights were disclosed to offerors. He also confirmed that it was customary not to include the detailed evaluation criteria in the RFP. GTE also challenged the manner in which corporate reference checks were conducted. In this regard, Dr. Elton Scott testified that it would have been better if the HRS evaluators had contacted all the states where the offerors had certifiable MMIS systems even though this would result in as many as 18 states being contacted for one offeror and as few as 3 for another. Dr. Scott admitted, however, that if, due to time restraints or other reasons, less than all of the listed references could be contacted, it was reasonable to contact those states which used a baseline system similar to the offeror's proposed system for Florida, to contact states with recent experience with the offeror, and to contact states with experience similar to Florida's. Larry Platt has had extensive experience with state RFPs in his position with HCFA and his testimony is accepted. He testified that it was important that an equal number of references be contacted for each offeror and that a state's decision to contact three corporate references for each offeror was reasonable. He further testified that contacting states with recent experience with the offeror and states with the same baseline system were the criteria normally used in determining which states should be contacted as references. In support of its contention that the corporate reference checks were unreliable due to the number of references contacted, GTE introduced into evidence the depositions of Joel Schnedler, Jeff Harriott, Helen Condry, Ruth Fisher, and Robert Kelly, to show that, had additional references been contacted, GTE's corporate reference checks would have been better. However, with one exception, these individuals are Medicaid officials in states purposefully not contacted by HRS as corporate references. Mr. Schnedler is employed by the State of Missouri, which was not contacted because the baseline system operated by Consultec in Missouri was designed and installed by EDS. Ms. Condry is employed by the State of West Virginia, which was not contacted as a corporate reference for GTE/TCC because TCC's responsibilities in West Virginia are limited--TCC does not perform many of the provider relations and some of the other operations. Ms. Fisher is employed by the State of Delaware, which was not contacted as a corporate reference for GTE/TCC because the baseline system used in Delaware has not been certified by the federal government, a requirement for the baseline system proposed for Florida. Robert Kelly is an employee of the State of Pennsylvania, which was not contacted as a corporate reference for GTE/TCC because the baseline system operated in Pennsylvania was not developed, designed or installed by GTE or TCC. GTE contended that it received lower scores on the corporate background and experience questions dealing with MMIS experience solely because the experience shown in its proposal for that area was that of a subcontractor, TCC. In fact, the evaluators did not penalize GTE's proposal in this or any other manner. If the evaluators had not considered the MMIS experience of TCC in evaluating GTE's proposal, GTE would have received zero points in this area for the simple reason that GTE had no previous MMIS experience. Although Ms. Flagg testified that her scoring might have been different if GTE's and TCC's roles were reversed, it does not mean GTE did not receive proper credit for TCC's experience. If their roles were reversed, GTE and TCC would be performing different functions, and thus the scoring would very likely be different. The evaluation of the technical proposals in this case may not have been perfect; however, a review of the entire evaluation package and the evaluation manuals completed by the individual evaluators reveals that the evaluation was thorough and fair. The evaluation package was reviewed by HCFA section by section to determine whether the evaluation process ensured open and free competition. The evaluation package was approved by HCFA. Mr. Platt felt that the evaluation manual was "a very thorough job." Mr. Platt reviewed the evaluation itself after it was completed to ensure that the evaluation plan had been followed. He was satisfied with the process. The completed evaluation manuals show that the evaluators performed their tasks conscientiously and were well-informed. The analyses performed by Dr. McClave revealed high consistency among evaluators and good inter-evaluator reliability. These results support the conclusion that the evaluation procedure was reliable. There was no evidence to suggest that scores were assigned arbitrarily or that the evaluation process was infected with substantial material irregularities. PRESENT VALUE EVALUATION: As stated previously, the RFP provided that business proposals would be scored according to a preestablish point system for the five different types of costs required to be bid. The various categories of costs and the maximum number of points to be awarded to the low bidder for each category were: Max. Pts. Available Installation Price 50 Price Per Claim 850 Hourly Rate for Systems Personnel 50 Provider Field Representatives 25 Price for CPU Time 25 From the above scoring system contained in the RFP, prospective offerors knew or should have known that the State did not propose to evaluate bids on a present value basis. At the time that the RFP was developed, Mr. Arnold was aware of Section 287.0572, Florida Statutes, which requires the use of present value methodology to evaluate the cost of contracts "which require the payment of money for more than 1 year and include provisions for unequal payment streams or unequal time payment periods." Mr. Arnold did not believe that the statute applied to this RFP, and therefore did not change the scoring system. Merrill Moody is the Assistant Secretary for Administration. In that capacity, Mr. Moody oversees personnel, budget, finance, accounting, staff development and training, revenue enhancements, contracting, purchasing, leasing, management systems, audit, and quality control for HRS. Mr. Moody is a CPA, has been employed by HRS for nine years, and oversees a 60 million dollar budget. Like Mr. Arnold, Mr. Moody had considered whether Section 287.0572, Florida Statutes, applied to this procurement prior to the issue being raised by GTE. It was Mr. Moody's considered opinion that the statute did not apply because the contract does not call for an uneven payment stream. Dr. McClave, an expert in econometrics, testified that there is not enough certainty in this RFP to say whether or not there are unequal payment streams, and, accordingly, whether or not the statute applies. He also explained why the application of the statute would be an exercise in futility. First, the only part of the contract arguably subject to present value analysis is the installation phase. This takes place within the first year of the contract and, accordingly, makes it practically impossible to do a useful present value analysis. Furthermore, even if the installation phase payments could be construed as an unequal payment stream within the meaning of the statute, the statute does not require a present value analysis to be applied to unequal payment streams which are to take place under a contract whose duration is less than one year. To apply a present value analysis to the installation phase price would be counterproductive. During the installation phase, the contractor is to be paid at certain points during the first year at which milestones or tasks are completed. At such points, the contractor is to be paid a certain percentage of the total installation price. If a present value analysis were performed, the proposal most highly valued would be that in which all tasks would be finished on the last day of the contract, clearly not a result in the state's best interest. The application of present value analysis to the remaining four fixed price components of the bids is simply not necessary. Each one of the remaining categories called for a fixed price for a certain unit of services to be delivered to HRS by the contractor. There is clearly not an unequal payment stream or unequal time payment periods for these items. Where there is a fixed price for a unit of service, there is obviously no need to apply a present value analysis. If, for example, HRS knows that it will be charged $.2652 per claim by Consultec as opposed to $.3270 per claim by GTE, Consultec's price will always be lower regardless of claim volume. To apply a present value analysis to the cost per claim, systems personnel hourly rate, and CPU hourly rate would create uncertainty in the cost evaluation. This is because the RFP did not specify the number of claims or hours involved. The RFP contained an estimate of between nineteen and twenty-nine million Medicaid claims per year, a ten million claim difference. Likewise, the number of hours of systems personnel time and CPU time is not specified. To conduct a present value analysis assumptions would have to be made. If the assumptions prove wrong, the lowest present value cost bid could become the most costly contract. Dr. James E. Pitts, an expert in the field of economics, agreed with Dr. McClave's conclusion that given the range of possible volumes on the number of claims as well as in systems personnel and computer time, a present value analysis would provide a "horrendous" range of possible present values and the analysis would be extremely sensitive to the assumptions that would be made. Although a present value analysis of the cost of the proposal would require certain assumptions to be made, and thus swould provide a comparison of costs that is not as accurate as comparing the fixed rate costs, a present value analysis can be performed using reasonable assumptions. However, the present value analyses of both GTE and HRS show that Consultec's business proposal yields the lowest present value. Accordingly, had a present value analysis been performed, Consultec would remain the lowest bidder. GTE's expert Dr. Scott, HRS' expert Dr. McClave, and Consultec's expert Dr. Pitts all agreed that even when a present value analysis was used, Consultec's bid remained less than GTE's. THE EDS BID GTE alleged that the proposal submitted by EDS did not comply with the mandatory requirements of the RFP in two respects: (1) It submitted consolidated financial statements; (2) it proposed to supply one element of the FMMIS by using a subcontractor's "propriety" software. The first allegation has been previously discussed in reference to the Consultec proposal. The submission of consolidated financial statements did not make EDS's proposal unresponsive. The financial statements were used as a source of information from which the financial stability and corporate background of the offeror could be evaluated. As to the second allegation, GTE has simply failed to show how EDS's proposal materially deviated from the requirements of the RFP. EDS's transmittal letter stated that EDS would use Health Information Designs (HID) as a subcontractor to produce Drug Utilization Review Reports, thus subcontracting out a total of .78 percent of the work as measured by total contract price. The letter from HID stated that it would not "convey access to or title in any of HID's proprietary DURbase software or system documentation." When EDS was questioned at the oral presentation about how it would comply with Section 50.900, which would be part of the contract to be entered into and requires that HRS shall receive "a royalty-free, nonexclusive, and irrevocable license to reproduce, publish, or otherwise use . . . all software . . . and documentation comprising the Florida MMIS", EDS responded that the purchase of DUR-based services was the procuring of services, not software. Further, if the subcontractor's statement in its letter is considered a deviation from the requirements of the RFP, then EDS complied with the requirements of Section 70.100 of the RFP by identifying and explaining the deviation in the transmittal letter. There was no evidence presented to show that the deviation was material or that the state could not accept the proposal with the deviation. Section 50.000 provides that modification of the contract can be made by mutual agreement of the state and contractor.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Health and Rehabilitative Services enter a Final Order awarding the contract for the Florida MMIS system to Consultec. DONE and ENTERED this 19th day of November, 1987, in Tallahassee, Florida. DIANE A. GRUBBS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of November, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-3188BID GTE's proposed findings of fact 1-19. Accepted generally, though not with same wording or quotations. 20-21. Rejected due to contrary findings. 22-27. Accepted as true but not included in detail in RO because unnecessary. 28-33. Rejected as irrelevant, except to the degree these paragraphs reflect that Consultec intends to purchase computer equipment in the installation phase and charge the cost during the installation phase. Rejected - no competent substantial evidence (CSE) that Florida will pay for costs not attributable to this contract. Accepted in part; rejected in part by contrary finding. 36-40. Rejected as unnecessary. Rejected as not supported by CSE. Accepted. Rejected as not supported by CSE. 44-45. Accepted. 46-53. Rejected as unnecessary. Accepted. Rejected as unnecessary. First sentence accepted, second rejected. Rejected. 58-59. Rejected as irrelevant. Accepted to the degree relevant. Accepted generally. Rejected as unnecessary. Accepted generally. Accepted generally. Rejected. 66-70. Accepted to the degree relevant. 71. Rejected. 72-73. Accepted, except for last sentence which is rejected as not supported by CSE. 74-77. Accepted generally. 78. Rejected as irrelevant, there was no evidence of bias in scoring. 79-81. Rejected generally by contrary finding. Rejected as unnecessary, last part of last sentence rejected for lack of CSE. Accepted generally. 84-85. Rejected by contrary findings. HRS's proposed findings of fact 1-26. Accepted generally. 27-34. Accepted to the degree that Dr. McClave's analyses support the conclusion that the evaluation process was reliable. Accepted generally. Rejected, not supported by cited reference. Though criterion 2 related to the prime contractor, the criterion also related to financial resources not MMIS experience. Last part of paragraph accepted. 37-39. Accepted generally. Accepted generally; however, first sentence rejected because the evaluation manuals of all three evaluators reflect that the guarantee was factor in scoring. However, the comments also reflect that it was not the only consideration. Accepted in part. Part relating to GTE rejected as unnecessary. Last sentence rejected in that letter is not in the exhibit cited. 42-51. Accepted generally. 52. Rejected as unnecessary. 53-54. Accepted generally that Consultec had computer equipment costs in installation phase. Unnecessary. Accepted generally. Unnecessary. Unnecessary. 59-60. Accepted generally. 61-80. Accepted generally. 81-82. Unnecessary. Consultec's proposed findings of fact 1-18. Accepted. 19. Accepted, except as to date and when scoring was begun. 20-38. Accepted generally. 39. Accepted generally, except third from last sentence. 40-42. Accepted generally. Rejected, in that was not reflected in information known at time of evaluation. Accepted generally. Rejected as unnecessary, but accepted as true. 46-55. Accepted to the degree necessary considering Ms. Clark's testimony was not credible. 56-98. Accepted generally but included in order only to the degree necessary. COPIES FURNISHED: Douglas L. Mannheimer, Esquire M. Stephen Turner, Esquire BROAD AND CASSEL 300 E. Park Avenue Post Office Drawer 11300 Tallahassee, Florida 32302 C. Gary Williams, Esquire Jann Johnson, Esquire Steven C. Emmanuel, Esquire AUSLEY, McMULLEN, McGEHEE CAROTHERS AND PROCTOR Post Office Box 391 Tallahassee, Florida 32302 H. Michael Madsen, Esquire James Hauser, Esquire MESSER, VICKERS, CAPARELLO, FRENCH AND MADSEN First Florida Bank Building Suite 701 215 South Monroe Street P. O. Box 1876 Tallahassee, Florida 32302-1876 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
The Issue The issue in this case is whether the Department of Insurance acted according to the requirements of law in reviewing submissions of vendors responding to the Department's request for proposals for provision of licensure and examination services.
Findings Of Fact The Department of Insurance is the state agency responsible for licensure and regulation of insurance agents in Florida pursuant to the Insurance Field Representative Licensing Procedures Law set forth at Chapter 626, Florida Statutes. Persons seeking to become licensed by the Department are required to take and pass an examination. Insurance Testing Corporation (ITC) develops and administers insurance licensure examinations in other states. Assessment Systems Incorporated (ASI) develops and administers insurance licensure examinations in other states. Since 1990, the Department has contracted with the University of South Florida (USF) for exam administration. The contract was to expire on September 30, 1994. It has been twice extended and is currently set to expire on September 30, 1996. The parties have standing to participate in this proceeding. On December 29, 1995, the Department of Insurance issued a Request for Proposal Number 95/96-07 (RFP) seeking the provision of testing development and administration services. The RFP was prepared through a collaborative effort within the Department. In issuing the RFP, the Department intended to broaden the level of services obtained from a contracted vendor and to take advantage of the expertise of companies already in the business of regulatory examination provision. The Department issued an RFP to permit vendors to generate their own programs for licensure and examination programs. The alternative, an Invitation to Bid, would have required vendors to bid on a program designed by the Department. The RFP provided that the contract between the Department and the successful vendor would consist of the RFP, addenda and amendments to the RFP, and the successful vendor's proposal. The RFP also provided that Department reserved the right to negotiate with the selected contractor, to waive minor irregularities and to reject all submissions. The RFP provided a schedule and deadlines as follows: submission of questions and requests for clarification by vendors, January 15, 1996; the preproposal conference with vendors, January 22, 1996; submission of proposals, February 12, 1996; oral presentations by vendors, February 19, 1996; and posting of the intended award, February 23, 1996. There was no protest to the RFP's specifications. Submissions were received from five vendors. The RFP evaluation panel scheduled separate oral presentations by the five vendors submitting proposals. The purpose of oral presentations was to permit the vendors to present their proposals and to respond to questions from the evaluation committee. The first thirty minutes of each one-hour presentation were reserved for the vendor presentation; the second thirty minutes were reserved for questions from the evaluation panel to vendor representatives. Vendors were not invited to and did not attend the oral presentations of other vendors. For reasons discussed herein, ITC's proposal was deemed non-responsive and was not evaluated. After completion of oral presentations, the evaluation panel independently reviewed and scored the proposals (other than ITC's) and submitted the scores to the Department's purchasing office. The purchasing office opened and scored the vendors cost proposals, then calculated the vendors' total scores. Of the proposals which were evaluated, ASI's received the highest total score of 134.5 points. The second highest score, 115 points, was received by USF. The Department posted a Notice of Intended Award to ASI on February 23, 1996. On February 23, 1996, ITC contacted the Department purchasing director and requested a copy of the ASI proposal. At that time, ITC was advised that a notice of protest would be due on February 28, 1996. ITC filed a Notice of Protest on February 28, 1996. ITC filed a formal protest on March 8. 1996. Although the State of Florida insurance licensure tests are currently administered by USF, the Department retains ownership of the questions ("test items") used in the examination. Upon the expiration of the contract with USF, all test items are to be returned to the Department. The test items used in Florida insurance exams are developed by employees of the Department with experience in the subject matter being tested. Test items have been revised and updated by USF according to psychometric principles. The Department desires to continue ownership of the "Florida bank" of test items. Section 2.1B of the RFP, "EXAMINATION DEVELOPMENT," states: The Department currently retains ownership of all test items in use for existing exams. The Department shall maintain exclusive owner- ship of the items developed, item bank(s), examinations, and all related materials deve- loped for use in fulfilling the requirements of this RFP. The Contractor will be respons- ible for continued development and maintenance of an item bank for use in preparing the examinations.... Section 2.2 of the RFP, "Related Requirements and Information," states: Use of any test items owned by the Department or developed to fulfill obligations resulting from a contract entered into as a result of this RFP for any purpose other than those covered by said contract is prohibited with- out advance written authorization by the De- partment. Any violation of this provision will result in immediate cancellation of the contract and/or legal actions against the contractor. Vendors were allowed to submit questions and requests for clarification by January 15, 1996. At the preproposal conference, an addendum to the RFP was issued which included the Department's responses to vendor requests for clarification. All potential vendors received the addendum. As did other vendors, ITC submitted question and requests for clarification. ITC question Number 8 states: The Department claims ownership of all existing test questions and requires owner- ship of all items, examinations, and related materials used in the Florida tests. This requirement precludes the use of previously developed, calibrated, and validated banks of items owned by the major providers of insur- ance license examinations. It thus requires the development and maintenance of a completely separate bank of test questions for Florida. This can be done only at considerable expense, which must be reflected in the test fees. Is it truly the Department position that all questions used in Florida insurance tests will be or become the property of the Depart- ment? Is this a negotiable item? The Department's response to ITC's question Number 8 states: The desire of the Department to retain owner- ship of its test items does not preclude the use of previously developed, calibrated and validated banks of items. Subject to the approval of the Department, the selected vendor may use test items it has already de- veloped as long as the subject/line of auth- ority listings for Florida are adhered to and are in accordance with Florida law and administrative rules. It is the Department's position that all items currently owned by the Department or developed for the Department in fulfillment of services requested through this RFP, re- main the property of the Department. This is not a negotiable item. ITC question Number 22 states: Will the Department grant the contractor the right to use test items owned by the Depart- ment in other states where it has testing contracts. If so, what guarantees will the Department offer that the Department will treat these questions as confidential material in the future, when they are used in other states. The Department's response to ITC's question Number 22 states: Yes, the Department will grant the vendor authority to use test items owned by the Department in other states where it has testing contracts. However, some agreement would have to be reached regarding the vendor's liability and responsibility should any test item become compromised as a result of such use. The question relating to the Department offering a guarantee that it will treat such questions as confidential when they are in use in other states is not understood. Obviously, the Department would not want to compromise its own test items. By February 12, 1996, the deadline for submission of proposals, five vendors had submitted responses to the RFP, including ITC, ASI and USF. On the question of test item creation, ITC's proposal states: Generally, we provide the entire bank of questions that are used in the tests of a state we serve. Florida is unusual in providing a bank of questions to start with. Our approach to questions for the Florida tests will follow three tracks. First, we will use the questions in the current Florida tests. Second, we will identify those ques- tions in our own bank that are appropriate for use in Florida. Third, we will write additional questions where shortages are identified in the banks, or to cover add- itional topics in the study manuals. ITC's proposal further states, "ITC staff will write and develop all of the new test questions. We will not rely upon Department staff or the Florida insurance industry...to write any of the new questions required for your tests." On the question of test item ownership, ITC's proposal states: Since you currently own a bank of test ques- tions, we understand that you will want to own a bank of test questions when a contract you may establish with us comes to an end. We currently own our bank of questions and would not want to relinquish ownership to that bank as a result of contracting with Florida. Therefore, our proposal is to divide the bank ownership according to four criteria: (1) Ownership of questions in the original Florida bank will remain with Florida; (2) ownership of questions in ITC's bank as of contracting will remain with ITC; (3) owner- ship of ITC-developed questions that are Florida specific and not applicable to other states will be assigned to Florida; (4) ownership of ITC-developed questions that are applicable to other states will remain with ITC. Florida questions that are materially revised by ITC will be considered ITC questions. During the ITC oral presentation, the evaluation panel sought clarification of ITC's position on test item ownership. ITC indicated that its position was as set forth in the proposal. The issue of test item ownership was the central question discussed at ITC's oral presentation. Essentially, the ITC proposal provides that at the close of any potential contract period, the Department will own the questions it currently owns and only those ITC-developed questions that are specific to Florida and to no other state. Further, under the proposal, ITC would be able to "materially revise" any question in the current Florida test item bank and claim ownership of the revised question. Neither ITC's proposal nor its oral presentation provided reliable information as to what would constitute a "material revision" of a test item. After the oral presentations were concluded, the evaluation panel and Department purchasing personnel determined that the ITC proposal did not comply with RFP's requirement related to test item ownership. The ITC proposal was disqualified and was not evaluated by the panel. The evidence fails to establish that the Department acted improperly in disqualifying the ITC proposal. The evidence establishes that the ITC proposal fails to meet the requirements of the RFP relating to ownership of test items, and was properly disqualified from further evaluation. As set forth in the RFP, the Department requires "exclusive ownership of the items developed, item bank(s), examinations, and all related materials developed for use" in providing examination and licensure services to the Department. RFP Addendum Number 1 clearly states "the Department's position that all items currently owned by the Department or developed for the Department in fulfillment of services requested through this RFP, remain the property of the Department" and further states that the item is not negotiable. The purpose of the Department's insistence on ownership of test items is to assure that, at the conclusion of the contract period, the Department will own the questions which have been prepared by the successful vendor for use in Florida exams. ITC's proposal fails to provide the Department with test item ownership as specifically required by the RFP and addendum. ITC asserts that on the question of test item ownership, its proposal is essentially the same as the proposal submitted by ASI. The evidence fails to support the assertion. ASI's proposal states: ASI acknowledges that the Department currently owns all examination items in use for existing exams. Furthermore, the Depart- ment will also retain ownership of all items developed for use in Florida examinations. Unlike the ITC proposal, the ASI proposal clearly states that the Department will own all items developed for use on the Florida exam. Items developed for the Florida exam will be owned by the Department, whether or not the items are applicable to other states. ITC asserts that the inclusion of cost information within the body of the RFP warrants disqualification of the ASI proposal. The evidence fails to support the assertion. Each vendor was evaluated on compliance with Florida Certified Minority Business Enterprise (CMBE) contracting goals. Evaluation points were awarded if a vendor established that CMBE firms would receive at least 10 percent of the contract award. Section 2.4 of the RFP, "Proposal Form and Content," provides instructions on how to structure a vendor proposal and states: ...ATTENTION IS CALLED TO SECTION 1.8. ANY REFERENCE TO COST IN PARAGRAPHS (A) THROUGH (G) BELOW MAY DISQUALIFY THAT PROPOSAL. Paragraphs (A) through (G) include items related to technical portions of vendor proposals. Section 1.8 addresses copies of proposals and states, "[c]ost proposals must be labelled as such and be submitted in a separate envelope." ASI's proposal included the following statement: ...ASI has signed a Letter of Agreement with Stallion Properties Management of Tallahassee to provide certain real estate and property management services specifically related to the Department's RFP and this Proposal. In total, it is estimated that ASI's Letter of Agreement with Stallion Properties Management will provide a total income of approximately $600,000.00 to Stallion over the term of ASI's three year contract with the Department. This project income to Stallion represents ten percent of the total projected income that ASI will earn should we be awarded the Department's contract. The requirement for submission of sealed cost proposals is intended to assure that the technical review of proposals is not influenced by cost factors. Other than to note compliance with the CMBE goal, the members of the evaluation panel did not extrapolate the ASI disclosure to determine the total ASI cost proposal. There is no evidence that the ASI disclosure affected the panel's evaluation of the proposal. Had the ASI technical proposal included its total cost proposal, evaluation panel members would have referred the issue to the Department's purchasing office. Apparently because the panel members did not note the inclusion of the CMBE total and did not extrapolate cost information based on the CMBE disclosure, the members did not refer the matter to purchasing. Because no other vendor included cost information within the technical portion of the proposals, there was no comparative cost information available for evaluation until the cost proposals were opened by Department purchasing personnel. Cost proposals were reviewed after the evaluation of technical factors was completed. ITC asserts that ASI's proposal modification after the proposals had been opened and during the oral presentation warrants rejection of ASI's proposal. The evidence fails to support the assertion. Section 2.1L of the RFP, "COLLECTION AND REMITTANCE OF FEES," states: The Department requires the collection of certain fees from applicants for services related to the licensure and examination process. It is intended that the Contractor collect these fees, as necessary and appropri- ate, and remit these fees daily (exclusive of weekends and State of Florida holidays) in a manner acceptable to the Department. It is intended that the Contractor retain its fee for services as provided for in the contract and remit the balance to the Department as appropriate. The Department is currently not prepared to accept electronic funds transfers in this area, however, it is interested in proposals which could accommodate such tran- sactions during the contract period. The Department contemplates technological enhance- ments in the Receipt's database within the contract period, however it is unable to specify the details of such at this time. Contractor must be able to accommodate such technological changes and enhancements. If any invoices are required to be submitted by the contractor to the Department, they must be submitted in a manner acceptable to the Department and in detail sufficient for a pre- audit and postaudit thereof. The Contractor shall have a system which maintains certain data, as specified by the Department, related to its activities in this area. The Department had indicated that a vendor could collect the total fee, deduct the vendor service charge, and remit the balance of the fee to the Department. Prior to the preproposal conference, ITC submitted a question (Number 21) seeking information on how fees were to be conveyed to the Department. In Addendum Number 1, the Department indicated that a response to the question would be provided in a second addendum to be issued after the preproposal conference. In the second addendum, the Department's response to ITC's question Number 21 states: The Department intends for the vendor to receive, on behalf of the Department, certain fees currently paid by licensure applicants and/or exam candidates. These fees may be paid by personal check, certified check or money order. Cash cannot be accepted. All checks or money orders must be made payable to the Florida Department of Insurance and must be deposited by the vendor into a state concentration account (with Barnett Bank) or a clearing fund in the name of the Department. The Department will assist in establishing these accounts. The Department will require a daily accounting of all monies collected and/or deposited. This information must be in the format prescribed by the Department. This information must be transmitted via an automated system compatible with the Department's existing information systems in this area. The vendor will be required to submit in- voices to the Department for services rendered on a monthly basis. Such invoices must be in sufficient detail for pre-audit and post-audit purposes and be in a format prescribed by the Department. The Department's response in addendum Number 2 specifically noted that the Department's position had changed. ASI's proposal states: Fees will be collected on the day of examina- tion and/or license issuance. This method will eliminate late payment processing. We will collect examination fees payable to ASI. This will minimize reconciliation tasks for the Department, and will allow accounting efforts to focus on those fees collected on behalf of the Department. Application re- venues will be shared with the vendor, based on prices stipulated in the price proposal and associated processing volumes. Appli- cation and fingerprinting fees will be collected via checks made payable to the Department. ASI will provide a reconcilia- tion of these fees, and daily deposits will be made to the Department's account. ASI will invoice the Department for its applica- tion screening services on a monthly basis. ASI's proposal further states: As part of the standard project planning process, [ASI will work side-by-side with the Department to identify specific requirements to be included in the implementation plan, including fee collection procedures], de- tailed invoice requirements, and the most appropriate method to transmit detailed tran- saction information to the Department.... [emphasis supplied] The proposed fee collection process suggested by ASI is inconsistent with applicable Florida law and does not follow the procedure set out by the Department in Addendum Number 2. Section 2.4 of the RFP, "Proposal Form and Content," subsection (C) "Work Plan" states: Describe in narrative form your plan for accom- plishing the work described....Modifications of requirements of this RFP are permitted, however, reasons for changes should be fully explained and justified. " At the oral presentation, and prior to evaluation of the proposals, the evaluation panel advised ASI that the fee collection proposal was not legally appropriate. ASI representatives indicated that they were attempting to provide an improved fee reconciliation process and were not aware that Florida law prohibited their fee collection plan. ASI utilizes the two-check fee payment system in some of the states where ASI administers licensing exams. At the oral presentation, ASI representatives assured that, as specifically stated in the proposal, ASI was committed to working with the Department "...to identify specific requirements to be included in the implementation plan, including fee collection procedures...." ASI representatives stated that the fee collection procedure desired by the Department would be accomplished within the costs set forth in the proposal. Although ASI's fee collection procedure does not follow the method suggested in the RFP, such does not warrant rejection of the ASI proposal. As stated in the RFP, ASI's modification of the RFP requirement was permitted where the reasons for changes were fully explained and justified. ITC implies that ASI can't provide the services offered in the ASI proposal within the fee and cost structure set forth in the response to the RFP. There is no credible evidence supporting the implication.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Department of Insurance enter a Final Order DISMISSING the case and awarding the contract to Assessment Systems, Incorporated. DONE and ENTERED this 21st day of May, 1996 in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of May, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 96-1330BID To comply with the requirements of Section 120.59(2), Florida Statutes, the following constitute rulings on proposed findings of facts submitted by the parties. Petitioner The Petitioner's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 6. Rejected, not supported by the weight of the evidence. Rejected, subordinate. Rejected, not supported by the weight of the evidence. Rejected, comment on testimony is not finding of fact. Rejected, unnecessary. The ITC proposal is not responsive to the Department's requirement of test item ownership. 12-13. Rejected, contrary to the weight of the evidence. Rejected, immaterial. Rejected, subordinate. Rejected, not supported by the weight of the evidence. 22. Rejected, subordinate. 23-24. Rejected, unnecessary. Rejected, subordinate. Rejected, unnecessary. Rejected, not supported by the weight of the evidence. Respondent The Respondent's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 2. Rejected, subordinate. 3-5. Rejected, unnecessary. 7-8. Rejected, unnecessary. 14. Rejected, irrelevant. 20-23. Rejected, unnecessary. 34-37. Rejected, cumulative. 48-59. Rejected, cumulative. 61-62. Rejected, irrelevant. 63-69. Rejected, cumulative. Rejected, unnecessary. Rejected, cumulative. 83. Rejected, cumulative. 96. Rejected, unnecessary. Intervenor ASI Intervenor ASI's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: Rejected, unnecessary. Intervenor USF Intervenor USF's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 20-21. Rejected, unnecessary. Rejected, subordinate. Rejected, subordinate. Rejected, unnecessary. Rejected as to use of phrase "final offer;" the ASI RFP specifically committed to working with the Department on fee collection procedures. Rejected, unnecessary. 45. Rejected, subordinate. 50. Rejected, unnecessary. COPIES FURNISHED: Bill Nelson State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Dan Sumner, General Counsel Department of Insurance The Capitol, PL-11 Tallahassee, Florida 32399-0300 Carl D. Motes, Esquire Maguire, Voorhis and Wells, P.A. 2804 Remington Green Circle, Suite 4 Tallahassee, Florida 32317-2429 Frank Fernandez, Esquire Thomas Valentine, Esquire Department of Insurance Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0333 William B. Graham, Esquire Richard N. Sox, Jr., Esquire Bateman and Graham, P.A. 300 East Park Avenue Tallahassee, Florida 32301 Regina L. DeIulio, Esquire Office of the General Counsel University of South Florida 4202 East Fowler Avenue, ADM 250 Tampa, Florida 33620-6250
