The Issue The issue in this case is whether Respondent, the Department of Children and Families, properly rejected all bids received on an Invitation to Bid on Proposed Lease No. 590:2622.
Findings Of Fact The Existing Lease and the Decision to Look for New Space. District 7 of the Respondent, the Department of Children and Families (at all times relevant to this proceeding, the Department of Children and Families was known as the Department of Health and Rehabilitative Services)(hereinafter referred to as the “District”), leases approximately 26,955 spare feet of office space located in Palm Bay, Brevard County, Florida. The space is used as a client service center. Pursuant to the District’s current lease, the lease will expire on April 30, 1997. The current lease (hereinafter referred to as the “Existing Lease”) was still in effect at the time of the formal hearing of this matter. The Existing Lease also provides for a five-year renewal. For the first two years of the renewal period, the Existing Lease provides for a rental rate of $11.50 per square foot. For the third and fourth years of the renewal the rate is $11.75 and for the last year, $12.00. In June of 1995, the District submitted a Letter of Agency Staffing (hereinafter referred to as a “LAS”) and a Request for Prior Approval of Space Need (hereinafter referred to as a “RSN”), to the Department of Management Services. Pursuant to the LAS and RSN, the District sought approval from the Department of Management Services to seek a new lease of 26,872 square feet of office space in Palm Bay. The reasons given for seeking approval of a new lease set out in the RSN were as follows: New Service Center in Brevard County(Palm Bay Area). The existing lease is up! 4/30/97. The current space does not adequately provide for : (1) Secured storage, visitation areas, and case file storage. The June of 1995, RSN was approved. The District, however, did not immediately seek the approved space. The evidence failed to prove why. In July of 1996 the District submitted another Request for Space Need (hereinafter referred to as the “Second RSN”). The same amount of space was sought and the same justification for seeking new space was described in the Second RSN. The Second RSN was approved by the Department of Management Services on or about July 8, 1996. The RSN and the Second RSN were prepared by Jim Birch. Mr. Birch is the District’s Facilities Services Manager. The reason for seeking a new lease set out in the RSN and the Second RSN was provided to Mr. Birch by Bill Rawlings and Philip Penley. Mr. Penley is the District’s Sub-District Administrator for Brevard County. Mr. Rawlings is the Program Administrator for Brevard County. The Existing Lease was first entered into in 1977. The amount of space leased has increased over the years and is located in more than one building. Mr. Penley decided to request approval to seek new space in the hopes that the client service center in Palm Bay could be moved under one roof and in the hopes that more ideal space could be obtained. The representation in the RSN and the Second RSN that the existing space “does not adequately provide for: (1) Secured storage, visitation areas, and case file storage” is misleading and incorrect. The programs located in the existing space in Palm Bay can, in fact, be carried out without relocating. The Invitation to Bid. The District released an Invitation to Bid (hereinafter referred to as the “ITB”), between July 16 and July 19, 1996. The ITB provided that the “Project Contact Person” was Mr. Birch. The ITB sought bids on proposed lease number 590:2622, for approximately 26,872 square feet of office space in an existing building. The ITB sought office space in Palm Bay. The building was to be used as the District’s client service center. The term of the lease was to be ten years with five one-year optional renewal periods. The ITB scheduled a pre-bid meeting for August 8, 1996. Attendance at the meeting was not mandatory. The ITB specified, however, that “information and explanations provided at this meeting must be complied with by the bidder ” A representative of Petitioner, Executive Ventures (hereinafter referred to as “Executive”), attended the pre-bid meeting on August 8, 1996. During that meeting, the lessor under the Existing Lease asked questions about the renewal terms of the Existing Lease. Executive’s representative informed Executive of the discussions soon after the meeting. Executive was, therefore, aware of the existence of the Existing Lease and the fact that it could be renewed prior to submitting a bid in response to the ITB. The ITB provided that bids could be submitted at any time up to 10:00 a.m., September 12, 1996. Bids were to be opened at the close of the bidding period. The ITB provided that all bids received were to be evaluated first for technical responsiveness. Nonresponsive bids were to be withdrawn from further consideration. Responsive bids were to be presented to a bid evaluation committee “for comparison and formulation of a recommendation for award.” The ITB informed potential bidders that the District reserved the right to reject all bids received in response to the ITB. The first page of the ITB provides that “[t]he Florida Department of [Children and Families] reserves the right to reject any and all bids and award to the bid judged to be in the best interest of the state.” At page A1-5-8 of the ITB the following is provided concerning the rejection of bids: ITB. REJECTION OF BIDS 1. The department reserves the right to reject any and all bids when such rejection is in the interest of the State of Florida. Such rejection shall not be arbitrary, but be based on strong justification which shall be communicated to each rejected bidder by certified mail. [Emphasis in original]. . . . . Bids Submitted in Response to the ITB. A total of four bids were submitted in response to the The bids were opened on September 12, 1996. A bid tabulation sheet was prepared by Mr. Birch. The annual rental rates per square foot for the ten years of the lease were included on the tabulation as required by the ITB. Pursuant to the ITB, no other information was provided at the time the bids were opened and tabulated Executive submitted one of the four bids. Executive’s bid consisted of 90 to 100 pages. Executive expended a good deal of effort and incurred expenses in the amount of approximately $17,000.00 in preparing its bid. The suggestion that Executive incurred unnecessary expenses is not supported by the weight of the evidence. The rental rates per square foot bid by Executive for the term of the proposed leased are as follows: Year Rate 1 $14.56 2 15.00 3 15.53 4 16.08 5 16.73 6 17.40 7 18.10 8 19.01 9 19.96 10 20.96 The District’s Decision to Reject All Bids. Mr. Birch had expected to receive rental rate bids in the range of $12.00 to $13.00. Mr. Birch’s expectation was based upon what he had been told to expect by John Stewart and Mr. Penley. Mr. Stewart is the District’s General Service Manager. Upon tabulating the bids, Mr. Birch discovered that the bids were higher than expected. He realized that the bids were $3.00 per square foot higher than the Existing Lease. Mr. Birch contacted Mr. Stewart and informed him of the difference in rates. Mr. Stewart informed Mr. Penley of the rates that had been bid. Mr. Penley informed Mr. Stewart that the bid rates were too high. Mr. Stewart then informed Sid McAlister, the Deputy District Administrator, and Paul Sneed. Mr. McAlister and Mr. Sneed told Mr. Stewart that the rates bid were excessive. Mr. Stewart subsequently directed Mr. Birch to notify the bidders that all bids were being rejected. Had the bids received in response to the ITB been accepted, the District would have been required to pay an additional approximately $80,000.00 in rent during the first year of the lease. The amount of rent required in the second year would be in excess of $80,000.00. The decision to reject all bids was based upon a realization of the impact the rates contained in the bids would have on the District’s budget if the lowest bid were accepted in relation to the impact on the District’s budget of the rates of the Existing Lease. The District realized that the increase in rent would have a substantial negative impact on its budget. It was also suggested that the impact on the District’s budget as a result of the newly enacted Federal “Welfare Reform Act” was also considered. In particular, the impact of the Welfare Reform Act’s “Work and Gaining Economic Self Sufficiency” or “WAGES” program was considered. The Welfare Reform Act and, consequently WAGES, was signed into law in August of 1996. WAGES was effective October 1, 1996. Among other things, WAGES establishes time limits for the District’s clients' receipt of cash benefits. It also results in the integration of programs of the District and the Department of Labor. This integration of programs will have impacts on the District’s space needs, staffing levels and the ability to pay rental rates in the future. Mr. Penley was aware of WAGES. It was suggested that at the time the ITB was issued little was known about the impact on the District that WAGES would have and that it was not until the bids were received that Mr. Penley had sufficient information concerning WAGES to be concerned about the impact of WAGES on the District’s budget. The weight of the evidence in this case failed to prove that when the decision of the District to reject all bids was made that the decision was based upon WAGES. While the impact of WAGES was of greater concern at the time of the formal hearing, the evidence failed to prove that the District’s concern about WAGES as explained at the formal hearing was taken into account at the time the bids were rejected. Notice of the District’s Decision to Reject All Bids. On September 13, 1996, the day after the bids were opened, the District sent a letter to Executive and the other bidders informing them of the decision to reject all bids: This is to give notice that in the best interest of the State of Florida and the Department of [Children and Families], that any and all bids are hereby rejected. The letter was signed by Mr. Birch. The letter informing Executive of the decision was sent by certified mail. “Strong justification” for the rejection was not “communicated to each rejected bidder by certified mail.” After receiving the September 13, 1996 rejection letter, Executive was informed during a telephone call with Mr. Birch that all bids had been rejected due to excessive rental rates and budgetary constraints. The District failed to comply with the requirement of the ITB that it inform bidders by certified mail of the reason why it rejected all bids. The appropriate remedy for this error, however, would not be to require that the District now evaluate the bids. The appropriate remedy for the error would be to require that the District send out a corrected notice by certified mail containing the explanation of the reasons for rejecting the bids required by the ITB. This remedy would only be appropriate, however, if Executive had sought such a remedy AND the evidence had proved that Executive had been prejudiced by the failure to provide the explanation of the District’s justification for rejecting all bids contemplated by the ITB. Evidence to support such a finding was not presented. In fact, the evidence proved that Executive was not prejudiced by the District’s error. Executive was given additional information concerning the bid rejection during a telephone conversation and it had an opportunity to explore the reasons for the rejection through discovery prior to the formal hearing of this case. Executive, therefore, had the opportunity to determine the specific justification for the rejection in preparation for the hearing on this matter. Zone Rates. The Department of Management Services establishes maximum rental rates which agencies can agree to pay without obtaining approval of the Department of Management Services. The rates are established for geographic zones on what is referred to as a “Zone Rate Schedule”. Zone Rate Schedules may be obtained from the Department of Management Services or other agencies by potential bidders. At all times relevant to this proceeding Executive was aware of the Zone Rate Schedule applicable to Palm Bay. Rental rates which do not exceed the zone rate by more than 10% may be accepted by an agency without further approval from the Department of Management Services. Any rate in excess of 10% over the zone rate must be approved by the Department of Management Services before an agency may accept it. The rental rates submitted by Executive in response to the ITB exceeded the zone rate but not by more than 10%. Individuals involved with the District’s decision in this matter either were not aware of the Zone Rate Schedule or gave it no consideration in deciding to reject all bids. The evidence also failed to prove that agreeing to pay a rate included on a Zone Rate Schedule for which approval from the Department of Management Services need not be obtained is necessarily in the “best interest of the state”. Additionally, the evidence failed to prove that the District did not have a reasonable basis for rejecting all bids despite the fact that the rates bid by Executive were within the Zone Rate Schedule plus 10%. Executive’s Challenge. Executive filed a Protest dated September 25, 1996, challenging as arbitrary the Department’s decision to reject all bids. In its Protest Executive alleged the following “facts” in support of its argument that the District’s rejection of all bids was arbitrary: The District failed to “communicate to each rejected bidder any justification whatsoever for rejecting any and all bids.” The District had decided to “reject any and all bids if the bid rental per square foot exceeded the rental they were paying under their present Lease, since such Lease had an option to renew for an additional five years. The present Lease renewal failed to comply with the requirements and specifications set forth in the Invitation to Bid.” The District, “at all times, knew that if such bids exceeded the square foot rental of the present Lease, that they intended to reject all bids and renew the existing Lease, although the existing Lease failed to meet the bid specifications.” The District “violated the competitive bidding procedure by failing to include in their Invitation to Bid a provision that any bid exceeding a specific dollar amount per square foot would be rejected in favor of the existing Lease. ” Although the evidence proved the first fact cited in finding of fact 51, that fact does not support a conclusion that the District’s decision was arbitrary. As to the other facts alleged by Executive in its Protest cited in finding of fact 53, the evidence simply failed to prove those alleged facts. At hearing, Executive presented the testimony of Mary Goodman, a consultant and former Chief of the Bureau of Property Management, Department of Management Services. Ms. Goodman was accepted as an expert witness. Ms. Goodman opined that the District’s actions in this matter were arbitrary. Ms. Goodman’s opinion was based in part on her conclusion that the submittal of the RSN and the Second RSN constituted a “determination by the Department to not renew the existing lease.” The evidence failed to support this contention. Executive has failed to cite any provision of Florida law which supports this contention. Ms. Goodman also based her opinion on the assumption that the District had established a rental rate cap which it failed to inform prospective bidders of. The evidence failed to support this assumption. Ms. Goodman also based her opinion on the fact that the bid submitted by Executive was within the Zone Rate Schedule for the area. The evidence in this case failed to prove that the fact that the bids were within 10% of the Zone Rate Schedule rates means that the decision to reject bids that would have cost the District approximately $80,000.00 the first year in additional rent was arbitrary because the rental bids did not require approval of the Department of Management Services. Executive has cited no provision of Florida law that requires agencies to accept bids simple because they do not require approval from the Department of Management Services. Ms. Goodman also based her opinion on her conclusion that the District should have known of its budgetary constraints before issuance of the ITB. Ms. Goodman, however, acknowledged that she knew nothing specifically about the District’s budget. Finally, Ms. Goodman based her opinion on the District’s failure to provide the notice of the District’s reason for rejecting the bids required by the ITB. As discussed, supra, the evidence failed to support this conclusion. The evidence failed to prove that Executive filed the action for an improper purpose.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered by the Department of Children and Families dismissing the Protest filed by Executive Ventures. DONE and ORDERED this 30th day of April, 1997, in Tallahassee, Florida. LARRY J. SARTIN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 30th day of April, 1997. COPIES FURNISHED: Walter Smith, Esquire SMITH, GRIMSLEY, BAUMAN, PINKERTON, PETERMANN, SAXER, WELLS Post Office Box 2379 Fort Walton Beach, Florida 32549 Eric D. Dunlap Assistant District Legal Counsel Department of Children and Families 400 West Robinson Street Suite S-1106 Orlando, Florida 32801 Richard A. Doran General Counsel Department of Children & Families Building 2 Room 204 1317 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory D. Venz, Agency Clerk Department of Children & Families Building 2, Room 204 1317 Winewood Boulevard Tallahassee, Florida 32399-0700
The Issue Whether the petition should be dismissed for failure to comply with Section 120.53(5)(b), Florida Statutes.
Findings Of Fact The Petitioner filed bids for ITB No. 4-600-370-K which, if responsive, were the apparent low bid for the Class 3 bid and next to lowest for Class 4 and 5 categories of copier equipment listed in the ITB. [Petition, page 8] On October 16, 1995, the Department posted the intended awards and disqualified all three of Petitioner's bids as nonresponsive. [Petitioner's memorandum in opposition to Respondent's motion for summary recommended order (MEMO), paragraph 1] The Petitioner filed a notice of protest against the disqualification of its bids on October 19, 1995. [MEMO, paragraph 1] The petition for formal hearing was filed with the Department on October 30, 1995. [MEMO, paragraph 1] The petition for formal hearing alleged, in part: SUMMARY OF GROUNDS FOR PROTEST ...The Division of Purchasing ("Division") disqualified all three of Petitioner's bids on vague grounds identified by three words: "Disquality -- Manufacturers Certification. " See Ex. 3 hereto at 1. There are two provisions in the ITB that require the "certification" of the Original Equipment Manufacturer ("OEM"). See Ex. 1 hereto at 3 and 32. Since the State has not seen fit to adequately identify which provision(s) are at issue, Petitioner is required to address both provisions that might apply. Both of these requirements are completely arbitrary, irrational and, most importantly, anticompeti- tive, for the reasons described further in Section 3 below. The "certification" require- ments are arbitrary and irrational because they are not designed to obtain the equipment at issue for the lowest price. Indeed, they ensure that the State will pay higher prices than it would without the requirements. Neither are the "certification" requirements rationally related to the quality of the equip- ment that was bid by Petitioner or the other bidders, including the OEMs. Finally, these requirements are blatantly anticompetitive be- cause they place the right to exclude all other competitors in the hands of the OEMs, which can deny such certification with impunity, ensuring that only those OEM bidders will prevail, as was the outcome here. This preferential treat- ment not only runs counter to the express intent of the legislature to promote free and open competition, it also raises serious anti- trust concerns. Disqualification of Petitioner's bids on the grounds presented by the Division should be reversed and the contract awards should be adjusted accordingly. * * * The preferential treatment provided to Xerox, Kodak, and other OEMs by insertion of the "certification" requirements in this ITB is consistent with a longstanding history of such anticompetitive treatment of independent providers of the equipment and service at issue, resulting in higher prices (but not necessarily higher quality) for the State's taxpayers. Petitioner's recent experience in dealing with the State on these matters is also consistent with this pattern of bias toward OEMs. * * * 3. BASIS OF PROTEST A. The Division of Purchasing Has Acted Arbitrarily and in Restraint of Trade * * * Petitioner has identified two potentially applicable provisions that the Division could be relying on for its disqualification decision. First, in the ITB's definition of "acceptable equipment" it states that bids for classes 3, 4, 5 and 6 shall be for "new and newly remanu- factured equipment only," and that "newly remanufactured equipment must be certified by the manufacturer." Ex. 1 at 3. This pro- vision also states that "remanufactured" equip- ment is not acceptable. Second, the ITB requires certification by the manufacturer as to the copy speed, recommended monthly copy volume, and other basic specifications of the equipment models being bid. Ex. 1 at 32. Both of these provisions are irrational, arbitrary, and clearly anticompetitive. * * * The Division's definition of acceptable equipment bears no relationship to the actual remanufacturing processes used by Petitioner or Xerox. Even if Xerox certifies its own "remanufactured" equipment, the State only receives assurances that the remanufacturing process used by Xerox meets certain standards. Petitioner certifies that its equipment meets certain quality and performance standards, just like Xerox does. There is no rational reason why self-certification of the equipment at issue would provide any different assurances of quality for the State. * * * 2. Certification by the OEM of Copy Speed and Other Basic Specifications Petitioner provided a sworn verification that its equipment meets the copy speed, recommended monthly copy volume, and other minimum specifications for each category of equipment for which it submitted bids. Its certification is based on the same procedures used by Xerox to certify its own equipment. There is no rational reason why that certifi- cation cannot meet the needs of the State. To insist upon certification only from the OEM is an arbitrary and anticompetitive requirement not related to quality or designed to achieve the lowest price. * * * This requirement also is blatantly anticompet- itive. Petitioner is in direct competition with Xerox for the sale and maintenance of the equipment at issue. It is irrational for the Division to expect Xerox to provide such certification to its competitors, even as to this type of uncontroversial information unless award to Xerox is the intended goal. The ITB required a manufacturer's certification which specified a notarized certification of the copy speed, recommended monthly copy volume, and other minimum specifications for the equipment bid. [Exhibit 1 to the Petition] The bids submitted by Petitioner included a certification executed by Advantage's president, Jane Beekmann. [MEMO, paragraph 3] The equipment specified by Advantage was manufactured by Xerox but was remanufactured by Advantage. [MEMO, paragraph 3, and as represented by Petitioner's counsel] Advantage maintains it may certify its remanufactured equipment in the same manner that Xerox certified its equipment. [MEMO, paragraph 5] The ITB provided, in pertinent part: ACCEPTABLE EQUIPMENT ...Bids for Classes 3, 4, 5 and 6 shall be for new and newly remanufactured equipment only. In Classes 3, 4, 5 and 6 newly remanu- factured equipment must be certified by the manufacturer. The ITB further provided, at page 32: This is to certify the manufacturer's recommended monthly volumes and certified copy speed (specify from the glass or document feeder) for the machines listed below. Monthly volume indicates the number of copies which can be made per month by the machine without causing excessive downtime. It does not necessarily denote the maximum number of copies that can be made by that particular machine. NOTE: This must be executed by the manu- facturer and must be notarized. Dealers are not authorized to sign this certification form. Failure to submit this certification with your bid shall result in disqualification of bid. The certifications provided by Petitioner identified the machines proposed by Advantage as the Xerox 5100, the Xerox 1090 w/finisher; and the Xerox 1075 w/finisher. Each of these certifications identified Advantage as the name of the manufacturer. [Exhibit C to the motion not disputed by Petitioner] Petitioner did not manufacture the Xerox 5100, the Xerox 1090 w/finisher; or the Xerox 1075 w/finisher. [Petitioner represents it is the remanufacturer, MEMO, paragraph 2] Petitioner maintains, and for purposes of this order it is accepted, that Advantage is the remanufacturer of the Xerox 5100, the Xerox 1090 w/finisher; or the Xerox 1075 w/finisher. [MEMO, paragraph 2] Petitioner did not timely challenge the specifications for ITB No. 4- 600-370-K.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Department of General Services enter a final order dismissing the petition of Advantage as an untimely challenge to the ITB specifications. DONE AND ENTERED this 5th day of January, 1996, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of January, 1996. COPIES FURNISHED: William H. Lindner, Secretary Department of Management Services Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 Paul A. Rowell, General Counsel Department of Management Services Knight Building, Suite 312 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 Cindy Horne Assistant General Counsel Department of General Services Office of the General Counsel 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950 J. Daniel Leftwich Berry & Leftwich 2000 K Street, Northwest. Suite 450 Washington, D.C. 20006 James Leech Post Office Box 7473 Fort Lauderdale, Florida 33338 Lawrence P. Stevenson Hume F. Coleman HOLLAND & KNIGHT Post Office Drawer 810 Tallahassee, Florida 32302
The Issue The issue is whether Respondent's notice of intent to award a contract for a Prescription Drug Monitoring System (PDMS) to Intervenor is, under section 120.57(3)(f), Florida Statutes, contrary to governing statutes, rules, policies, or solicitation specifications due to the nonresponsiveness of Intervenor's proposal or flaws in the scoring.
Findings Of Fact RFP On October 14, 2010, Respondent issued the RFP. RFP Section 3.1 states that the purpose of the RFP is to acquire and implement a customizable, commercial, off-the-shelf PDMS, in accordance with section 893.055, Florida Statutes. RFP Section 3.1 states that this statute provides for the establishment of a comprehensive, electronic database securely to collect and store data of the dispensing of Schedule II-IV controlled substances by prescribers and dispensers. Section 3.3 defines a commercial, off-the-shelf program as "computer software or hardware, technology, or computer products that are ready-made and available [to] the general public, which includes systems that are manufactured commercially, and then tailored for specific uses." RFP Section 3.2 states that the initial term of the PDMS contract is November 30, 2010, through September 30, 2011. The November 30 start date for this ten-month contract anticipated the posting of the intent to award on November 16, 2010 and no challenge to the proposed award. Section 3.2 states that the proposed PDMS should be delivered and accepted by Respondent within 90 days after execution of the contract. RFP Section 4.1 states: To participate in this solicitation the Proposer must provide documentation to answer all the qualification questions listed in Attachment I. Each mandatory question requires a "Yes" or "No" answer. Proposals that have any "No" answer to these mandatory requirements will be deemed non- responsive and will not be given further consideration. Proposers should use care and integrity in preparing their documentation supporting responses to the qualification questions, since these are mandatory requirements. The RFP contains a detailed statement of the scope of services,1 specific tasks,2 projected staffing profiles,3 qualifications,4 technical approach and implementation timelines,5 and other matters.6 Many of these provisions, such as the scope of services and specific tasks, are requirements imposed upon proposals. Among the requirements incorporated into the RFP is PUR 1001, which is the state of Florida "General Instructions to Respondents" to bid solicitation documents. Paragraph 4 of PUR 1001 states: "Failure to comply with terms and conditions, including those specifying information that must be submitted with a response, shall be grounds for rejecting a response." RFP Section 4.21 states that each proposer must submit a cost proposal, using the Cost Proposal Form that is Attachment XI. The cost proposal depicts the costs for the term of the contract plus three, one-year renewals. Of especial significance to this case, RFP Section 4.21 contains four bullet points and two flush paragraphs. Section states: The cost proposal must include the following items: The proposer must submit a cost proposal using the worksheet provided in Attachment XI, covering the entire period of the contract, including potential renewals. The cost proposal must show the cost for implementing the system, the cost for the maintenance of the system, the cost for hosting of the date through September 11, 2011, and the cost for providing operational support to the PDMS. The cost proposal shall include the costs necessary for the proposer to fully comply with the contract terms and conditions, RFP requirements including amendments, and the proposer's proposal. . . . Only costs incurred after the resulting contract's effective date specifically related to the implementation, maintenance, hosting, and operational support of contracted services should be included in the cost proposal. Proposers shall provide a firm fixed price for the tasks and deliverables outlined in this RFP. The fixed price shall take into consideration, including but not limited to, all staff hours, equipment, travel costs, overhead, and any profit or fees required for that deliverable. Immediately following these four bullet points, the first flush paragraph of RFP Section 4.21 provides: The Proposer must submit a narrative itemizing the costs included in the cost proposal. The narrative must specifically address the comprehensiveness of the proposed PDMS and any tasks or services that are excluded and are considered enhancements that may be implemented in the future. Proposed costs for prospective enhancements should be included. RFP Section 4.21 concludes with the second flush paragraph, which describes the scoring of the cost proposals. Section 4.21 provides that 50 points will be awarded to the lowest cost proposal. For higher cost proposals, the proposers will receive a score that results from multiplying 50 points times a fraction whose numerator is the lowest proposed cost and whose denominator is the proposed cost of the proposer under review. RFP Section 4.22 provides: Each qualified proposal will be evaluated and scored based on the criteria defined in Attachment II. Evaluation sheets will be used by the Evaluation Team to designate the point value assigned to each proposal. The scores of each member of the Evaluation Team will be averaged with the scores of the other members to determine the final scoring. . . . The proposer receiving the highest score will be selected for the award. RFP Section 5.8 provides: [Respondent] reserves the right to accept or reject any and all proposals, or separable portions thereof, and to waive any minor irregularity, technicality, or omission if [Respondent] determines that doing so will serve the State's best interests. [Respondent] may reject any response not submitted in the manner specified by the solicitation documents. Attachment I is "Qualifying Criteria." This attachment states at the top: . . . All proposals will be screened for compliance. Failure to comply shall render a proposal non-responsive and ineligible for further evaluation. . . . The nine qualifying criteria in Attachment I are stated as questions, and the form implies that Respondent will evaluate each proposal by answering "yes" or "no" to each of the questions. The qualifying criteria are: Does the proposal include a fully executed Statement of Financial Capability, including all supporting documentation? Attachment I. Does the proposer certify that they [sic] will comply with the Harold Rogers Grant #2009PM-BX-4004? (See Required DOH Certifications Attachment III) Does the proposal provide documentation that the prospective proposer currently hosts a PDMS as defined in this RFP in at least one other state for at least one year? See Section 3.2 Does the proposal provide documentation that the proposed system is a customizable, commercial-off-the-shelf data base system? See Section 4.6.1 Does the proposal provide documentation that the proposed system is compatible with existing PDMS used nationally? See Section 4.6.1 Does the proposal provide documentation that the proposed system collects electronic data in the format established by the American Society for Automation in Pharmacy (ASAP) 2007, version 4.1, Rules Based Implementation Guide for Prescription Monitoring Programs or its successor? See Section 4.2 Will the proposed system be hosted offsite and operate independently of any other systems or networks of the Department or the State of Florida? Does the proposed system comply with Health Insurance Portability and Accountability (HIPPA) as it pertains to protected health information, electronic protected health information (EPHI), and all other relevant state and federal privacy and security laws/regulations? See Section 4.2 Does the submitted Statement of Financial Capability and supporting documentation demonstrate the Proposer has the financial capability to complete the tasks of this RFP? For the last qualifying criterion, Attachment I adds: The Statement of Financial Capability . . . will be evaluated by an evaluator designated by the Department as having the knowledge and experience to determine if the Proposer is financially capable of completing all the services and tasks contemplated by this RFP. Failure to receive "YES" shall render a proposal non-responsive and ineligible for further evaluation. Attachment II is "Evaluation Criteria." These are the technical scoring items of this RFP. Attachment II states: Evaluation sheets will be used by the Evaluation Team to designate the point value assigned to each proposal. The scores of each member of the Evaluation Team will be averaged with the scores of the other members to determine the final scoring. The proposer receiving the highest score will be selected for award. Point Value: Unless otherwise indicated, zero is lowest possible and the number indicated in this column is the highest possible. Attachment II lists 19 items to be scored. For each item, Attachment II prescribes what is to be scored, identifies the section of the RFP to which the item relates, and states the maximum available points. The RFP does not contain further guidance for the evaluators in terms of the meaning of the maximum score or a score less than the maximum. The 19 scoring items carry a maximum of 500 points. The scoring dispute in this case focuses largely on one evaluator's scores of Items 15-19, each of which has a maximum score of 20 points.7 The five, 20-point items in dispute are stated below, with the item number on the left. The RFP reference for each items is RFP Section 4.21. The five items are: How well does the cost proposal narrative explain the costs of the customization and the necessity of the costs for delivery of the proposed PDMS? How well does the cost proposal narrative explain the operational support costs and the necessity of those costs for the proposed PDMS? How well does the cost proposal narrative explain the system maintenance costs and the necessity of those costs for the proposed PDMS? How well does the cost proposal narrative explain the costs for hosting and the necessity of those costs for the proposed PDMS? How well does the cost proposal narrative explain the need for and the cost of prospective enhancements? In contrast to the first 14 items, which require the evaluator to assess "the proposal," Items 15-19 direct the evaluator to assess "the cost proposal narrative." Four of the five challenged items require the proposer to explain the costs for a particular PDMS cost category and the necessity of these costs. The final item requires the proposer to explain the need for, and costs of, enhancements. Attachment XI, which is the Cost Proposal Form, identifies five categories of costs on a single page. The form requires the proposer to state a total cost for the commercial, off-the-shelf product, which is complete on delivery at the start of the contract, and a total cost for the customization required to conform the off-the-shelf product to the technical specifications in RFP Section 4.6. The RFP defines customization to include implementation, hosting, and maintenance through September 30, 2011. Attachment XI calls for a total cost for each of the remaining three categories of costs, which are maintenance support, operations support, and hosting for each of the three one-year anticipated renewal periods ending September 30, 2012, 2013, and 2014. The form requires the itemization of these three categories of costs into monthly amounts, which are merely the total annual costs of each category of cost divided by twelve. Lastly, the form requires the totaling of these five categories of costs, so that the proposer states at the bottom of the completed Attachment XI its "grand total cost proposal." Responses Cost Proposals Petitioner's Attachment XI shows no cost for the commercial, off-the-shelf program. The total cost of customization is $94,380. The annual costs for maintenance, operations, and hosting are, respectively, $40,440, $66,912, and $49,536, and these costs remain unchanged over the three anticipated renewal years. Petitioner's grand total cost proposal is therefore $565,044. Petitioner Response, p. 190. Intervenor's Attachment XI shows the total cost for the commercial, off-the-shelf program is $96,730, and the total cost of customization is $115,068. The annual costs for maintenance, operations, and hosting are, respectively, $50,665, $132,976, and $41,455, and these costs remain unchanged over the three anticipated renewal years. Intervenors grand total cost proposal is therefore $887,059. Intervenor Response, p. 126. Item 15: Customization Costs and Their Necessity Petitioner Response For its narrative of the cost of customization and the necessity of this cost, Petitioner's response explains that the first part of the customization cost is $15,015. Petitioner Response, p. 191. This is the labor cost of customization. Petitioner Response, p. 192. The narrative explains that most of the features described in RFP Section 4.6.1 are already in the commercial, off-the-shelf program. The labor in customizing the off-the-shelf program includes: Time spent in requirement analysis meetings to arrive at the Requirements Definition for customization of the software. We propose to have two sessions. To customize the software such that application security can be configured per user to assign security roles to authorized department staff, dispensers, prescribers, and any other users authorized by law. To make necessary changes and modifications to the application software such that all of the web pages are tuned to comply with the business rules of the State of Florida as agreed upon in the requirements sessions. To include a statement in the software indicating that Florida's PDMS was made available using funds from a federal grant . . .. Provide for a method that allows the department to suspend the 15 day requirement during emergency events (e.g., hurricane) Provide a method that allows registered dispensers to request an extension to the reporting requirement (e.g., per individual or per pharmacy) in accordance with proposed Rule 64K-1, F.A.C. Create a method to coordinate and implement the initial mass registration of dispensers and prescribers. Petitioner Response, pp. 192-93. To customize its off-the-shelf program, Petitioner stated that it must perform requirements analysis; perform analysis, study, and design; perform design documentation and review; make changes to the database; make changes to the user interface; make changes to the business logic; conduct quality assurance and quality control; prepare user documentation; and perform project management. In documenting $15,010 in total labor for customization, Petitioner's response itemizes the labor costs by hourly rate and number of hours for the following positions: systems analyst, database administrator, senior programmer analyst, programmer analyst, quality analyst, technical writer, and project manager. Petitioner Response, p. 193. The second part of Petitioner's customization cost is $14,000. This is for all costs and expenses related to implementation, travel, training, setup and data collection for system software and system hardware (servers), and setup for the help desk. Petitioner breaks down these costs into skilled labor and travel expenses. The skilled labor covers individual tasks--e.g., hardware and server setup, data collection help desk setup, and implementation of customized PDMS--by position type, hourly rate, and hours. The travel expenses show airfares, food and per diem for particular tasks, such as the "kick off" and requirements session, and training by a specified number of staff for a specified number of days. The total is $28,000, but Petitioner discounts this item by half for what it anticipates will be a long-term relationship. Petitioner Response, p. 191. The third part of the customization cost is $65,370. This is for the hosting, maintenance, and operations support from the "go-live" date of April 8, 2011,8 through September 30, 2011, or five months. The monthly cost for each of these components is, respectively, $3370, $5576, and $4128. Petitioner Response, p. 192. 2. Intervenor Response For its narrative of the cost of customization and the necessity of this cost, Intervenor's response states: all associated start-up costs for development, configuration, and integration are part of the total proposed implementation price. [Intervenor] will fully host the RxSentry solution for [Respondent] utilizing our state-of-the-art co-location data center, AtlantaNAP. Hosting costs include all hardware, software, co-location data center fees, communication fees, maintenance, and technical support as required under the contract. Additional costs for implementation include travel, training, and administrative fees such as bond and FBI criminal background checks for key personnel per [Respondent] requirements. A one-time licensing fee for RxSentry is included in the implementation pricing. Ongoing operational support costs in terms of personnel expense, operating expense, systems expense, corporate overhead, and annual maintenance for RxSentry are included in the total pricing for the initial contract period. [Intervenor] project management, clinical, and technical support staff are provided to ensure a seamless transition from implementation to daily operations. Personnel costs include a primary contact as the PDMP Account Manager Ms. Sheila McCollough, access to clinical expertise from our Training Manager, Mr. Steve Espy, RPh, technical writing expertise for customized user guides and training materials, quality and contractual compliance oversight, and a highly skilled technical and customer service staff to maintain the RxSentry solution and provide customer service and support to both [Respondent] staff and the prescriber/dispenser population. [Intervenor] performs regular monitoring and maintenance for all our clients, including routine backup and recovery activity, data archiving and removal, and other system upgrades, improvements, and error corrections to ensure that RxSentry continues to meet our clients' needs and standards. Expense categories used in pricing the project include all line item costs shown in the following table [no costs are shown]: [Technical Lead] Information Systems Manager . . . Customer Support Manager [Training Coordinator] . . . Technical Support Manager . . . Technical Help Desk Staff Technical Writing Staff Operating Expenses: Travel Training Office Supplies Printing fees Mailings Administrative fees . . . System Expenses: Hardware leasing Software purchase (one time) RxPert License Fee (one time) AtlantaNAP Data Center Fees Communication Fees Software Maintenance Hardware Maintenance Intervenor Response, pp. 123-24. Under the heading, "Customization," Intervenor's response states that Intervenor will work with Respondent during the implementation requirement sessions to document all specifications for collecting and reporting controlled substance data. This includes: dentifying required fields and layouts for patient advisory alerts and reports, request forms and authorization requirements, user roles and access, standard and ad-hoc report content and layout, and customization of screens per [Respondent] request. The next section of Intervenor's response is "Assumptions." This section states: No inflationary increase has been added to ongoing operational pricing. Standard technical hours and support for data submitters and requestors will be provided Mon-Fri, EST, from 9:00 AM - 5:00 PM; excluding state and national holidays. Training materials for dispensers and practitioners will be hosted online along with computer-based training as required by [Respondent]. Notification letter mailing costs for uploaders is based upon 8,322 active pharmacies and approximately 7,312 active dispensing healthcare practitioners. All tasks and activities will be performed at the [Intervenor's] Corporate Office in Auburn, AL. Proposed pricing and annual maintenance for PMIX Hub is not included in the cost proposal but is provided in the following narrative section, "System Enhancements." Intervenor Response, p. 125. Item 16: Operational Support Costs and Their Necessity Petitioner Response For its narrative of the cost of operational support and the necessity of this cost, Petitioner's response states that the operational support costs are $5576 per month for each of the three one-year renewal terms. These costs include "all labor costs . . . to support the collection and uploading of prescription data." These services include collecting, validating, scrubbing, and uploading the data, as well as contacting the data collectors about prescription errors. Petitioner Response, p. 195. Petitioner breaks down the operational support costs by position, hourly rate, and hours per month. The positions are data collection help desk analyst and data collection senior help desk analyst. Other expenses include infrastructure and office space and telephone. Petitioner's response describes the positions in terms of work experience. 2. Intervenor Response Except for enhancements, Intervenor's entire cost narrative has been described above. Item 17: System Maintenance Costs and Their Necessity Petitioner Response For its narrative of the cost of system maintenance and the necessity of this cost, Petitioner's response notes that the system maintenance costs are $3,370 per month for each of the three one-year renewal terms. These services are to respond to all emails from Respondent. For system-down calls, Petitioner will respond within four hours; for severely impaired-impact calls, Petitioner will respond within 24 hours. For the remaining calls, Petitioner will respond within 72 hours. Petitioner breaks down the system maintenance costs by position, hourly rate, and hours per month. The positions are database administrator, programmer analyst, quality analyst, and project manager. The proposal assumes 36 hours of software support and maintenance, but acknowledges that there is no limit on hours of support that Petitioner will actually provide. 2. Intervenor Response Except for enhancements, Intervenor's entire cost narrative has been described above. Item 18: Hosting Costs and Their Necessity Petitioner Response For its narrative of the cost of hosting and the necessity of this cost, Petitioner's response notes that the hosting costs are $4128 per month for each of the three one-year renewal terms. Hosting is at a secure facility with redundant power and redundant data carriers. Petitioner breaks down the hosting costs by the single position, which is system/network manager, and her hourly rate and hours per month. Other itemized costs are relatively small and include a backup circuit and server. 2. Intervenor Response Except for enhancements, Intervenor's entire cost narrative has been described above. Item 19: Need for, and Cost of, Prospective Enhancements Petitioner Response For its narrative of the need for and cost of prospective enhancements, Petitioner's response notes that its software has an available PMIX interface software module. Because PMIX "is beyond the scope of the current proposed project," Petitioner's response proposes the module as a prospective future enhancement. Petitioner breaks down the cost of the PMIX enhancement into a one-time cost of $10,600, which consists of $7800 for customization and implementation, and $2800, which consists of travel costs for training. Monthly costs would increase $1000, which consists of $750 for maintenance and $250 for operations. Petitioner breaks down the one-time labor costs by position, hour rate, and hours, and the travel costs for two persons for one day in Tallahassee. Additionally, Petitioner's response offers a methodology for how it would approach proposals from Respondent for future enhancements, including the hourly rates of 12 positions that might be involved in such work. 2. Intervenor Response The final section of the cost worksheets in Intervenor's response is "System Enhancements." This section states that Intervenor "is currently developing interchange functionality for RxSentry that will allow the exchange of data between states." Intervenor's response warns: "Pricing for PMIX Hub is not included in the proposed contract pricing but is provided below as a prospective enhancement to the RxSentry solution." The following table lists "PMIX Implementation" at a cost of $40,035 and "PMIX Hub Annual Maintenance" at a cost of $15,000. Assessment and Scoring of Proposals Respondent received only the two proposals of Petitioner and Intervenor. After the submittal deadline had passed, Respondent's Chief of Bureau of Operations, Lola Pouncey, examined each of the two proposals for compliance with the first eight of nine mandatories contained in Attachment I. Respondent hired CPA Richard Long to examine each proposal for compliance with the ninth mandatory, which requires an assessment of demonstrated financial capability. Ms. Pouncey and Mr. Long determined that both proposals met all of the mandatories in Attachment I. These determinations are not at issue. Likewise, one of Respondent's representatives calculated the cost scores for both proposals--50 points for Petitioner and 31.85 points for Intervenor--and these determinations are not at issue. The five evaluators had been trained by Respondent's Administrative Lead Janice Brown. By memorandum dated December 7, 2010, she advised them to "evaluate each proposal individually" and not to meet with other evaluators to discuss a proposal. Providing a little more guidance for scoring than is found in the RFP, the memorandum adds: The maximum possible score for each category should only be awarded if the vendor addressed each element we requested for that section thoroughly. If a vendor does not address elements in that section, their scores should be reduced accordingly. The five evaluators scored all of the Evaluation Criteria of Attachment II. The technical scores for Petitioner averaged 409.2 points--ranging from Ms. Poston's score of 266 to another evaluator's near-perfect score of 496. The technical scores for Intervenor averaged 448.6 points--ranging from scores of 360 to a perfect score of 500. Ms. Poston's total score for Intervenor is 430. Her score for Intervenor is its second lowest. Two of the evaluators scored Petitioner's proposal higher by 21 and 18 points. Two of the evaluators scored Intervenor's proposal higher by 40 and 32 points. Ignoring Ms. Poston's scores, which favored Intervenor by a lusty 164 points, Intervenor would have emerged from the technical scoring with an 8.25-point advantage. Because Petitioner earned a 18.15-point advantage from its superior cost proposal, Ms. Poston's scores, in this sense, dictated the outcome of the procurement. However, if Ms. Poston had assigned Petitioner's technical proposal the average of the scores of the other four evaluators or even the score of Petitioner's second-lowest evaluator, Petitioner would have prevailed on total points. Combining the technical scores with the cost scores, Respondent determined that Intervenor earned 480.45 points, and Petitioner earned 459.20 points. After confirming that Intervenor's references were acceptable, on December 21, 2010, Respondent posted its intent to award the contract to Intervenor. Except for the above-described examination of the proposals for compliance with the nine mandatories of Attachment I, at no time while Respondent processed the proposals did anyone determine whether each proposal was responsive to all of the other requirements of the RFP. On December 23, Petitioner timely filed a notice of intent to protest the intended award to Intervenor. On or before January 3, 2011, Petitioner timely filed the Formal Written Protest with a proper and sufficient bond. Respondent transmitted the file to the Division of Administrative Hearings on January 19, 2011. Determinations Concerning Responsiveness Respondent misreads the RFP in arguing that Attachment I is an exhaustive list of the requirements of the RFP to which a proposal must respond in order to be responsive. Attachment I lists nine requirements that, if unmet, will render a proposal unresponsive.9 But nothing in Attachment I implies that its nine requirements are an exhaustive list of the requirements of the RFP, or an exhaustive list of the RFP requirements that a proposal must satisfy to be responsive. Respondent's strained interpretation of its RFP creates an unnecessary conflict between Attachment I and paragraph 4 of PUR 1001, which warns proposers that Respondent may reject a proposal for a failure to comply with any RFP condition. On the basis of paragraph 4 of PUR 1001, as well as the authority cited in the Conclusions of Law, requirements contained in other RFP provisions, including Section 4.21, if unmet, may result in a determination that the proposal is nonresponsive, regardless of whether a proposal meets all of the mandatories set forth in Attachment I. As quoted above, Section 4.21 requires a "narrative itemizing the costs included in the cost proposal." (Emphasis supplied.) Intervenor's proposal does not itemize the costs of customization, operations, maintenance, and hosting. Intervenor's proposal minimally itemizes the costs of enhancement--$40,035 for PMIX Implementation and $15,000 for PMIX annual maintenance. The unitemized costs in Intervenor's cost proposal are: 1) $96,730 for the off-the-shelf program; 2) $115,068 for customization; 3) $50,655 for maintenance; 4) $132,976 for operations; and 5) $41,455 for hosting. The costs included in Petitioner's cost proposal are: 1) nothing for the off-the-shelf program; 2) $94,380 for customization; 3) $40,440 for maintenance; 4) $66,912 for operations; and 5) $49,536 for hosting. Petitioner's cost narratives itemize these costs in detail. The $94,380 for customization comprises $15,010 for customization labor, $14,000 for implementation, training, servers setup and data collection, and $65,370 for hosting, maintenance and operations through September 30, 2011, which is defined by the RFP as part of customization. Petitioner further itemizes the $15,015 of labor, $14,000 of implementation, training, servers setup and data collection, and $65,370 for hosting, maintenance and operations, which is merely the monthly costs for these items, as shown in Petitioner's Attachment XI, during the three annual renewal periods. Additionally, Petitioner's proposal itemizes the $3,370 per month for maintenance by showing hourly rates and number of hours by four positions; the $4,128 per month for hosting by showing the hourly rate and number of hours for one position plus various other monthly costs; and the $5,576 per month for operations by showing the hourly rate and number of hours for two positions and various other monthly costs. Lastly, for the PMIX enhancement, Petitioner itemizes the one- time customization costs of $7,800, which themselves are broken down; travel costs for training of $2,800, which themselves are broken down; and additional monthly costs of $1,000 for maintenance and operations. However, Intervenor's failure to itemize the costs in the cost proposal gave it no competitive advantage. Despite some unclear comments about a "cost-plus" proposal, Intervenor's proposal contains an unambiguous, enforceable statement of costs, as does Petitioner's. Each proposal locks in its proposer in terms of what it is agreeing to provide and at what cost. Nor did the requirement of itemization likely chill the bidding, so as to discourage potential vendors from competing for the PDMS contract. Attachment XI requires each proposer to identify the costs of customization and ongoing operations, maintenance, and hosting. To arrive at these broader category of costs, a diligent vendor probably would have had to assemble the underlying subcosts, so it would be easy to add them to the proposal. The effort in constructing the itemization appears minimal. The monthly costs of maintenance, operation, and hosting are relatively modest, so they do not have many subcosts, and the process of extending these costs for the term of the contract, plus renewals, is a simple matter of multiplication. In its proposed recommended order, Petitioner argues that Intervenor gained competitive advantage as follows: [Petitioner] recognized that this additional level of detail would enable [Respondent] to understand the level of commitment of resources of each respondent, and to hold the ultimate contract awardee accountable for the provision of the promised level of performance as reflected in the itemized costs. If a competitor fails to provide the detailed, itemized costs required by Section 4.21, it will enjoy a competitive advantage relative to bidders that do comply with that requirement. By failing to commit to any particular itemized cost, a bidder such as [Intervenor] may provide less training, and enjoy less expense, than another provider that itemized its costs. Failing to comply with Section 4.21 allows a bidder the flexibility not only to reduce its costs, but to also reduce the level and quality of services provided, without violating a commitment made to [Respondent.] Petitioner's proposed recommended order, p. 9. These arguments are that cost itemization: 1) enables Respondent to understand the level of commitment of each proposer; 2) enables Respondent to hold the selected proposer accountable for the promised level of performance; and 3) prevents a nonitemizing proposer from providing less services by reducing the level and quality of services provided. The second argument misses the purpose of itemization. Itemization breaks down the overall costs shown in Attachment XI. The accountability function that Petitioner mistakenly assigns to the itemization requirement is actually served by numerous other provisions of the RFP, such as the undertaking of to satisfy the scope of services, including specified data fields, data, and training10; the undertaking to provide the detailed tasks and services11; the specification of proposed staffing levels, which are enforceable conditions12; the detailed description of the design, capacity, and other features of host facility13; the detailed description of the proposer's approach to providing the technical services that demonstrates a thorough understanding of the project and includes a detailed description of the PDMS and how general maintenance and support services will be performed14; and the focus of the other 14 technical scoring items on various features of the PDMS.15 The first and third arguments are also unpersuasive. Respondent rejected the first argument in its preparation of the RFP. Omitting the Section 4.21 requirement of itemization from the five technical scoring items related to cost, Respondent implicitly decided that it did not need the additional insight into a proposer's level of commitment. This is not a complicated procurement. Each proposer has implemented at least one monitoring system of this type in another state. For the same reason that itemization may have been omitted from the scoring items, so it is not especially important in understanding the level of commitment of resources of each proposer. Also, the worries sometimes attendant to the association of underbidding with the failure to include all of the solicited goods and services do not apply here, at least based on the relative cost proposals of both proposers. The third argument implies that the cost narratives will be elevated into the contract itself. But nothing in the RFP compels a proposer to pay a help-desk employee or data programmer the rate of pay specified in any cost itemization. Perhaps, in a deflationary economy, the rate of pay of these employees may decline, as may the office rent and travel costs. The selected vendor may pocket these savings, just as it must absorb the additional expenses, if, in an inflationary economy, these items increase in cost during the term of the initial contract or three annual renewal terms. The floor on services is not provided by a few cost itemizations, but by enforceable contract provisions and the selected vendor's incentive to keep the contract for the three one-year renewal periods, and perhaps beyond. Determinations Concerning Scoring General Petitioner objects to Ms. Poston's scoring--in general, all of it, but, in particular, her scoring of Items 15-19. In its proposed recommended order, Petitioner seems to make two arguments about Ms. Poston's scoring of its proposal. First, Ms. Poston favored Intervenor's proposal by such a wide margin as to call into question all of her scores. Second, Ms. Poston offered startlingly odd reasons, such as noncompliant formatting, for the relatively low scores of Petitioner's proposal. However, as in the Formal Written Protest and the hearing, Petitioner analyzes Ms. Poston's scoring of Items 15-19 only. Preliminarily, Petitioner's approach to the scoring issue raises two problems. First, absent analysis of Ms. Poston's scoring of the other items, Petitioner fails to prove flawed scoring of these items under the Clearly Erroneous Standard, which is explained in the Conclusions of Law. For this reason, this recommended order will not otherwise consider Ms. Poston's scoring of these items. Second, Petitioner's challenge to Ms. Poston's scoring of Items 15-19 suffers from a misreading of what these items require to be evaluated. Specifically, Petitioner misreads Items 15-19 to require the evaluators to evaluate how well the cost narratives itemize costs, among other things. One example of this misreading occurs at the last sentence of paragraph 18 of its proposed recommended order, which states: "In fact, the Section 4.21 requirement that each proposer submit an itemization of its costs . . . received twice as much weight as the cost proposal itself." Itemization of costs actually receives no weight in the five scoring items that pertain to the cost narrative. None of these five scoring items uses the word, "itemize" or "itemization." RFP Section 4.21 requires the itemization of various costs, and this requirement, as discussed in the preceding section, serves as a basis on which to determine the responsiveness of proposals. But Respondent did not include the itemization requirement of Section 4.21 in the scoring items for the cost narrative. In preparing the RFP, Respondent included some, but not all, of the requirements of Section 4.21 in these five scoring items, which are drawn from the first bullet and first flush paragraph of this section. The first flush paragraph requires a narrative that: 1) itemizes the costs in Attachment XI; 2) specifically addresses the comprehensiveness of the proposed PDMS; and 3) specifically addresses any excluded tasks or services that may be enhancements. The first flush paragraph encourages--through the use of the word, "should"--the inclusion within this narrative of a fourth element: proposed costs for prospective enhancements. The first four scoring items focus exclusively on the four cost categories--customization, operation, maintenance, and hosting--identified in the first bullet of Section 4.21. The five scoring items authorize scoring of the narratives only as to how well they explain the costs and their necessity. When compared to RFP Section 4.21, the five scoring items omit the requirements of an itemization of costs, a specific description of the comprehensiveness of the proposed PDMS, and a specific description of excluded tasks that may be enhancements, although this last requirement is covered to some degree by the fifth scoring item. At minimum, then, the narrative's itemization of costs and specific description of the comprehensiveness of the proposed PDMS receive no direct weight in scoring, except, as noted below, for the indirect value of each of these elements when scoring the cost narrative for its explanations of costs and their necessity. Further distinguishing RFP Section 4.21 from the five scoring items covering the cost narrative, the scoring items add two elements not found in RFP Section 4.21: 1) an explanation of the costs and 2) an explanation of the necessity of the costs. These elements are closely related to the provisions of Section 4.21, but are not explicitly required in this section. Petitioner's misreading of Items 15-19 undermines its scoring argument. This misreading attaches great significance to Petitioner's compliance with the itemization requirement of RFP Section 4.21 and Intervenor's noncompliance with this requirement--facts of some importance to the responsiveness issue discussed in the preceding section, but of no direct importance to the scoring issue discussed in this section. Also unhelpful to Petitioner's scoring argument is the fact that Ms. Poston's scores of Items 15-19 do not stand out among the evaluators. She gave each proposal 60 points, although she was the sole evaluator to score Intervenor's proposal higher than Petitioner's proposal on Item 15. One other evaluator scored the two proposals a tie on these five items, although his score was 100 points each. Another evaluator scored the two proposals a near-tie, with Petitioner's proposal earning 100 points and Intervenor's proposal earning 98 points. The remaining two evaluators scored these five items substantially in Petitioner's favor, with advantages of 39 and 20 points. The proper analysis of Ms. Poston's scores is based on the actual language of Items 15-19. The impact of the inclusion or omission of the itemized costs from these cost narratives is more nuanced than Petitioner argues in its scoring argument. A cost narrative may explain the cost of, say, customization and the necessity of this cost without itemizing or identifying the subcosts of customization, although a cost narrative that starts by itemizing these subcosts may facilitate its explanation of the overall cost and its necessity. Understandably, Petitioner stresses Ms. Poston's testimony at the hearing that she reduced Petitioner's scores in general, at least in part, for the failure of its proposal to conform to various stylistic requirements in the RFP. These nonconformities include excessively small font size, inadequate margins, other unidentified formatting errors, numerous typographical errors, poor organization in which information was just "dropped" into various places, and inconsistency in style where sometimes the proposal uses bullet points and sometimes it uses narrative. Ms. Poston's testimony in the preceding paragraph is problematic for two reasons. First, Ms. Poston's testimony attempts to justify, in part, her scoring on grounds that are not authorized by the provisions of Attachment II. Second, this testimony is inapt. As to Petitioner's cost narrative, at least, the Administrative Law Judge did not measure font size, but did not notice any problems with font size, legibility, margins, formatting, typographical errors, or inconsistencies in style. And the organization of Petitioner's cost narrative permitted the Administrative Law Judge to find the relevant information much more readily than he could find it in Intervenor's cost narrative, which, as seen above, combined most of its responses to Items 15-18 in one section. Ms. Poston's typewritten scoring notes offer more support than her testimony, although her notes for Item 15 incorrectly report that Petitioner's response explained only the labor costs of customization. But her notes for Item 17 suggest that she captured more detail from Intervenor's proposal's explanation of system maintenance costs. However, nothing in the record suggests in any way that Ms. Poston was guilty of bias, fraud, or collusion in scoring, nor does Petitioner suggest as much. When asked, Ms. Poston freely explained her scores on items, using her typewritten notes when she could. She testified candidly and matter-of-factly about her scoring. Although not at all apologetic, Ms. Poston never appeared unduly invested in her scores or Respondent's proposed award. While testifying, she never acted adversarially, as an ally of Intervenor or opponent of Petitioner. Nor are Ms. Poston's scores of Items 15-19 arbitrary or capricious. Notwithstanding her comments about formatting, proofreading errors, and organization, Ms. Poston's scoring of these items is neither illogical nor irrational. Her typewritten notes reveal a clear understanding of the RFP and Petitioner's proposal, suggest an organized pattern to her thoughtful approach to scoring the items in question, and dispel any randomness in the scoring. The sole remaining question is whether Ms. Poston's scores of Items 15-19 are within the range of the reasonable. Consideration of the reasonableness of Ms. Poston's scoring must start with the acknowledgement that the phrasing of Items 15-19 invites a wider range of scores than would questions imposing on evaluators a task requiring more precision. These open-ended scoring items ask only "how well" a response "explains" certain costs and their necessity or, in the case of Item 19, "how well" a response explains the necessity and cost of prospective enhancements. Scoring of Item 15: Customization For Item 15, Petitioner first explains the labor in terms of the communications with Respondent's staff to obtain particularized information about what Respondent needs, programming to customize the off-the-shelf program to ensure that it delivers these communicated needs, and specific methods to allow registered dispensers to request extensions for reporting events and the mass registrations of dispensers and prescribers required on the initiation of the PDMS. Detailing this explanation of the labor involved in the customization of the off-the-shelf program, Petitioner's response outlines the tasks, which largely comprise the expected activities of analysis, design, design review, quality assurance and control, user documentation, and project management, but also identify changes to user interface and business logic. Petitioner's response further explains the costs of customization by detailing, by numbers of hours, the work to be done by systems analysts, database administrators, senior programmer analysts, programmer analysts, quality analysts, technical writers, and project managers. Second, Petitioner explains the costs of customization by discussing the costs and expenses related to implementation, travel, training, setup and data collection for system software and system hardware (servers), and setup for the help desk. This discussion shows individual tasks, such as hardware and server setup, data collection help desk setup, and implementation of customized PDMS, but distinguishes itself by identifying the hours of work by position type. The travel expenses show airfares, food and per diem for particular tasks, such as the "kick off" and requirements session, and training by a specified number of staff for a specified number of days. Petitioner's explanation of costs is particularly relevant for this topic because it further explains that it has halved these projected costs. Third, Petitioner explains the costs of customization with respect to the operational support, hosting, and maintenance costs from the "go-live" date through the end of the original term of the contract. Petitioner's explanation of these costs is ample. For Item 15, Intervenor explains that it starts with an off-the-shelf program that necessitates the payment of a one- time license fee. From there, Intervenor's proposal states that it will perform "all associated start-up costs for development, configuration, and integration [that] are part of the total proposed implementation price." "Additional costs for implementation include travel, training, and administrative fees such as bond and FBI criminal background checks for key personnel per [Respondent] requirements." Intervenor's proposal identifies some "line item costs" by position type, but this table omits hours or total costs and pertains largely, if not entirely, to operational support, hosting, and maintenance. Intervenor's proposal addresses customization costs explicitly in a relatively brief section devoted to this component. Intervenor explains that it will identify required fields and layouts for patient advisory alerts and reports, request forms and authorization requirements, user roles and access, standard and ad-hoc report content and layout, and customization of screens, as requested by Respondent. Ms. Poston assigned 15 points to Intervenor's conclusory explanation of customization costs and their necessity and 10 points to Petitioner's detailed explanation of these costs and their necessity. A score that assigns more points to Intervenor than to Petitioner for Item 15 is outside the range of the reasonable by five points. Scoring of Item 16: Operational Support For Item 16, Petitioner explains that operational support costs include "all labor costs . . . to support the collection and uploading of prescription data." These services include collecting, validating, scrubbing, and uploading the data, as well as contacting the data collectors about prescription errors. Petitioner identifies two positions--two help desk analysts--and breaks down the operational support costs by hourly rate and hours per month. Petitioner's response describes these positions in terms of work experience. For Item 16, Intervenor explains ongoing operational support costs in terms of personnel expense, operating expense, systems expense, corporate overhead, and annual maintenance for RxSentry, all of which are included in the total pricing for the initial contract period. Intervenor explains that project management, clinical, and technical support staff will assist Respondent in the transition from implementation to daily operations. Intervenor identifies available personnel by name and position--although not the expected extent of availability or use. Ms. Poston assigned each proposal 10 points for Item Petitioner's explanation of hours per month is of some utility, but the range of personnel--two help desk analysts-- limits the value of this response when compared, say, to the wider range of labor tasks involved in customization. Although more explanation might have been expected of Intervenor on this item, given the large difference between the two proposals for operations costs, the two explanations of operations costs and their necessity are roughly comparable, and Ms. Poston's scores for Item 16 are within the range of the reasonable. Scoring of Item 17: System Maintenance For Item 17, Petitioner explains that these costs involve email responses to service calls from Respondent, and Petitioner provides call-back deadlines based on the severity of reported problems. Petitioner breaks down the system maintenance costs by position, hourly rate, and hours per month. The positions are database administrator, programmer analyst, quality analyst, and project manager. The proposal assumes 36 hours of software support and maintenance, but acknowledges that there is no limit on hours of support that Petitioner will actually provide. For Item 17, Intervenor explains that maintenance is included in hosting and it will undertake all software and hardware maintenance. Additionally, Intervenor explains that it will perform routine backup and recovery activity, data archiving and removal, and other system upgrades, improvements, and error corrections necessary for the PDMS. Ms. Poston gave Intervenor 15 points and Petitioner 10 points for Item 17. She may legitimately have valued Intervenor's emphasis on system solutions over Petitioner's emphasis on customer service, so Ms. Poston's scores for Item 17 are within the range of the reasonable. Scoring of Item 18: Hosting For Item 18, Petitioner explains that the hosting is at a secure facility with redundant power and redundant data carriers. Petitioner breaks down the hosting costs by a single position, which is system/network manager, and her hourly rate and hours per month. Other itemized costs are relatively small and include a backup circuit and server. For Item 18, Intervenor explains that the hosting is at its "state-of-the-art" data center. Intervenor explains that hosting costs include all hardware, software, co-location data center fees, communication fees, maintenance, and technical support as required under the contract. Ms. Poston gave both proposals a 10 for Item 18. She understandably found no difference between a secure facility with redundant power and redundant data carriers and a state-of- the-art data center, so Ms. Poston's scores for Item 18 are within the range of the reasonable. Scoring of Item 19: Prospective Enhancements For Item 19, both parties identified the PMIX hub as a prospective enhancement. For this item, the RFP requires an explanation of the need for, and costs of, any enhancement. Neither party addressed the need for the enhancement in any detail, but perhaps that is because the PMIX hub is in the RFP Scope of Services, at RFP Section 4.2, although it is not in the Tasks and Services, at RFP Section 4.6.1. Petitioner explains that its software has an available PMIX interface software module. Petitioner further explains this cost by breaking the PMIX enhancement into one-time costs of customization and implementation and travel costs for training and monthly costs for maintenance and operations. Petitioner breaks down the one-time labor costs by position, hour rate, and hours. Petitioner further explains this cost by describing a methodology for how it would approach proposals from Respondent for future enhancements, including the hourly rates of 12 positions that might be involved in such work. Intervenor warns that it "is currently developing interchange functionality for RxSentry that will allow the exchange of data between states." Intervenor identifies the implementation and maintenance costs of a PMIX hub. Ms. Poston assigned Petitioner 20 points and Intervenor 10 points for Item 19. Contrasted to Petitioner's detailed explanation of enhancement costs, Intervenor's proposal acknowledges a present inability to provide this service, which certainly limits its ability to explain the costs that will eventually go with this service, once it is developed. Ms. Poston's scores for Item 19 are within the range of the reasonable. Summary of Scoring Findings Another shortcoming in Petitioner's scoring challenge is its failure to explain why the flaws in Ms. Poston's scoring of Items 15-19 should result in the rejection of all of her scores. To outpoint Intervenor, Petitioner needs over 100 more points from Ms. Poston. Items 15-19 are worth a total of 100 points, and Petitioner already received 60 points from her on these items, so Petitioner's scoring challenge, despite its focus on Items 15-19, necessarily seeks to overturn more than Ms. Poston's scores on these five items in Petitioner's proposal. But Petitioner does not seek more points from Ms. Poston. The gist of Petitioner's complaint with the scoring starts with the fact that it won or lost, by narrow margins, with the other four evaluators, but Ms. Poston's overall scoring margin--430 for Intervenor and 266 for Petitioner--determined the outcome of the scoring. Petitioner argues that Ms. Poston's scoring of Items 15-19 was illogical, irrational, and so outside the range of the reasonable that its effect cascades through all of her scores and, to preserve the integrity of the subject procurement, her scores must be thrown out in their entirety, resulting in a recommendation that Respondent rebid the PDMS contract or award it to Petitioner. Whatever the exact form of this argument, after close analysis of the five scoring items that Petitioner challenged, the Administrative Law Judge has found nothing arbitrary or capricious in Ms. Poston's scoring and only one item that falls outside the range of the reasonable--by only five points. As discussed in more detail in the Conclusions of Law, this finding provides no platform for Petitioner's larger attack on the reliability of Ms. Poston's overall scoring and its role in Respondent's overall evaluation of the two proposals.
Recommendation It is RECOMMENDED that the Department of Health enter a final order dismissing the Formal Written Protest. DONE AND ENTERED this 8th day of March, 2011, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE 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 8th day of March, 2011.
Findings Of Fact Prior to May 26, 1993, FDOT issued an invitation to bid (ITB) on a contract for landscaping approximately 3.6 miles of roadway in St. Lucie County, State Project No. 94030-3502. The ITB required bidders to submit unit prices for 31 items of work. Bidders were to multiply the unit price by the estimated quantity of the item to arrive at a total quote for each item. The item totals were to be added together to arrive at the total bid. FDOT provided the estimated quantities upon which the bids were to be based. In preparing its ITBs, FDOT utilizes standard unit price designations. These standard unit price designations are not altered on a job-by-job basis and are not altered after bids are opened. The ITB herein included two bid items for mulch work: item no. 580-173 for bed preparation and mulching, and item no. 580-326-3 for shredded cypress bark mulch. The two mulching items result in one task: spreading the mulch under the landscaping plants. FDOT always designates item no. 580-326-3, mulch shredded cypress bark, to be paid on a square yard basis. This is not an uncommon procedure. FDOT never pays contractors on this item in other than square yard computations. FDOT's Basis of Estimates Manual (FDOT Exhibit 3) contains all the measurement units for all bid items and lists shredded cypress bark mulch as being measured and paid for in square yards. None of the mulch items are paid for in cubic yards. FDOT considers itself bound by this Manual as to method of payment (unit of measure). See Findings of Fact 17 and 24-25 infra. Project plans, typically prepared by consultants, may designate units of measurement differently from FDOT's standard unit price designations. It is not unusual for a unit of measurement to be expressed one way on the project plans and another way on the ITB. It is not unusual for a bidder to be required to adjust a plan quantity in order to arrive at a different unit price. Bidders are expected to convert measurements of items to correlate with how the item will be paid. With regard to ITB 94030-3502, four certified landscape contractors submitted bids. Among them were Intervenor Hayslip, Weekly Asphalt, Inc. (Weekly), Central Florida Landscaping of Tampa, Inc. (Central), and Petitioner Vila. Bids were opened on May 26, 1993. After the bids were opened, each bid was reviewed by FDOT's Technical Review Committee to determine whether the bid was mathematically and materially unbalanced, contained all appropriate signatures, contained all appropriate documents, and otherwise met the technical requirements of the ITB. In essence, the Technical Review Committee reviews each bid to determine whether it is responsive to the ITB and, if not responsive, whether the bid's lack of responsiveness is immaterial and waiveable by FDOT. Only after reaching that determination does the Technical Review Committee make a recommendation to FDOT's Contract Awards Committee as to whether or not a bid should be rejected for material nonresponsiveness to the ITB. As a result of the responsiveness review, Central's bid was declared irregular due to an altered bid bond and was rejected. Central filed no protest and no petition and has not moved to intervene herein. The thrust of the instant proceeding involves item no. 580-326-3, mulch shredded cypress bark, stated in the ITB as "500 square yards." All the bidders utilized the consultant's plans which specified the correct quantity of mulch contrary to the ITB. Hayslip's bid for item no. 580-326-3 was $2.50 per square yard. Weekly's bid for that item was $2.25 per square yard. Central's bid for that item was $2.12 per square yard. Petitioner's bid for that item was $8.50 per square yard. Clearly, Petitioner's bid on this item was mathematically unbalanced since Petitioner's unit price bid of $8.50 per square yard far exceeded each of the other bidders' responses on that item on this ITB. Petitioner's bid was also exceptionally high in comparison with its own usual bid price in square yards of mulch, averaging $1.95 to $2.50 per square yard and unaccountably low in comparison with its own usual bid price in cubic yards of mulch, averaging $20.00 to $30.00. Mr. Ricardo Leal, Petitioner's General Manager and Chief Estimator, prepared Petitioner's bid herein and testified with regard to how its mathematical imbalancing occurred. When Mr. Leal received the ITB package approximately fourteen days before the May 26, 1993 bid date, he performed some preliminary work on the bid, such as getting prices from subcontractors, obtaining a bond for the job, and making copies of the plans. He then did nothing with the bid until approximately two days before the May 26 bid letting. Despite Mr. Leal's testimony that crucial discrepancies between the consultant's plans and the ITB could not have been discovered within 72 hours of receiving the ITB, it is clear that his decision to delay concentrated work on this bid was based on extensive experience with a constant cycle of bidding. In preparing Petitioner's bid during the last two days before the letting, Mr. Leal formed the opinion that the plans' 500 cubic yard requirement for cypress bark mulch was correct and the ITB's 500 square yard requirement was a typographical error and that the project would probably require 6,000 square yards of cypress bark mulch. He based his calculations on 6,000 square yards (which equals 500 cubic yards from the plans) but expressed the unit price on Petitioner's bid according to the square yard unit FDOT had used in the ITB. Despite testimony concerning confusion arising from the ITB and plans, Mr. Leal candidly stated that he consciously bid in that manner to protect Petitioner in case FDOT required the successful bidder to provide 500 cubic yards (6,000 square yards) instead of 500 square yards, and he then split the final number he came up with between the two items so as to bid $.95 per square yard on item 580-173 and $8.50 per square yard on item 580-326-3. In so doing, he relied on his own judgment. The ITB also contained other questionable items including meter fees and contradictory specifications on plant size and color. Despite testimony that Vilma Croft, FDOT Project Manager was not helpful, it appears that in preparing Petitioner's bid, Mr. Leal asked Vilma Croft to clarify a concern about local meter fees, which she did late on the day before bid letting. He also asked her three additional questions about plant list specification discrepancies, and she told him he must use his own judgment. However, he then did not ever pose his prepared question with regard to the mulch discrepancy (TR-47-54). Unbalancing to some extent is discernible in virtually all bids. FDOT does not, therefore, reject all bids that are unbalanced. Only when unbalancing results in reasonable doubt that an award to the mathematically unbalanced bidder will result in the lowest ultimate cost to the state does FDOT consider the unbalancing "material." Unbalancing in a bid is determined by computerized program. The FDOT computer program figures in the bids on every item, does a bell curve distribution, keeping a center of 1 and 1/2 deviations and then discards the high and low bids. It then re-averages the remaining bids to determine a reasonable cost for any particular pay item. Any bids falling outside a certain tolerance window, either above or under, are flagged as mathematically unbalanced. FDOT's computer assessment identified as mathematically unbalanced five items in Petitioner's bid, among them the mulch item already referenced, and three items in the Intervenor's bid. FDOT's computer for purposes of determining imbalancing is programmed according to FDOT's interpretation of its Basis of Estimates Manual and its Standard Specifications for Roadway and Bridge Construction, which interpretation is to the effect that the agency may not alter the method of payment (unit of measure) without letting a new ITB/contract but may alter quantities without such a new bid letting procedure. (TR 159-160; 271-272. FDOT Exhibits 3 and 4). The square yard pay unit is entered in the computer program for these reasons and is standard FDOT practice. (See Findings of Fact 5 and 24-25.) When a mathematical unbalancing is discovered, FDOT analyzes the bid further for purposes of discovering whether the bid is materially unbalanced. FDOT personnel conducted further investigation to determine whether there was a likelihood of an overrun in the quantity of shredded cypress mulch which would be sufficient to change the order of the bidders. Vilma Croft, FDOT's Project Manager, acted as a conduit between FDOT's design consultant and Robert Griner, FDOT's Preliminary Estimating Engineer. At her request, the consultant who had designed the project plans, filled in unbalanced review sheets stating that the quantity of 500 square yards for cypress bark mulch was not correct in the ITB and that the correct quantity was 6,000 square yards. Croft relayed the adjusted quantity to Griner's office, noting that page LD28 of the plans had expressed 500 cubic yards. Thus, the quantity of cypress mulch to be placed on the project was not 500 square yards but 500 cubic yards which translates into 6,000 square yards, amounting to a likely overrun of 5,500 square yards. After multiplying the likely quantity overrun by the Petitioner's unbalanced unit price of $8.50 per square yard, FDOT personnel adjusted Petitioner's contract price by $46,750.00, reaching an adjusted total contract price of $793,351.45. FDOT made similar adjustments for mathematically unbalanced items in both Intervenor's and Weekly's bids. After those adjustments, the contract prices were $763,346.15 and $920,278.45, respectively. FDOT's further investigation and reconciliation of the remaining unbalanced items in Petitioner's bid and the unbalanced items in the Intervenor's bid and Weekly's bids are not at issue here. Mr. Griner made a presentation to FDOT's Technical Review Committee that there would be an overrun of 5,500 square yards of cypress bark mulch and that the overrun had resulted in a switch in the order of the bids. Again, square yards is FDOT's standard unit of calculation. The Technical Review Committee recommended rejection of Petitioner's bid as materially unbalanced and award of the contract to Intervenor. The Contracts Award Committee followed this recommendation. It voted to reject Petitioner's bid and declared FDOT's intent to award the bid to Intervenor. Intervenor was declared to be the apparent low bidder. Petitioner timely protested. Intervenor timely moved to intervene and was granted intervention. Both have standing in this proceeding. Weekly filed no protest and no petition and has not moved to intervene. It is not unusual for a mistake to be made in the estimated quantity of a project. FDOT routinely corrects mistakes that show up in quantities after bids are opened. FDOT does not assume responsibility that final quantities in a project will remain in accordance with quantities as "estimated" in its ITBs. Put in layman's terms, ITBs are created upon FDOT's "best estimates," but FDOT reserves the right to pay only for actual work done. Sometimes, this means contractors get more work/pay than they initially anticipated and sometimes they get less. ITBs do not guarantee successful bidders a dollar amount of work. (TR 271-272; FDOT Exhibits 3 and 4). Specifically, FDOT's "Contract Bible," the Standard Specifications for Roadway and Bridge Construction (FDOT Exhibit 4), which is incorporated by reference in its agency rules and in its ITBs, provides as follows: 2-3 Interpretation of Estimated Quantities. For those items which are to be constructed within authorized plan limits or dimensions, the quantities shown in the plans and in the proposal form are given as the basis of bid and also for final payment as limited by the provisions for the individual items. For those items having variable final pay quantities which are dependent on actual field conditions, use and measurement, the quantities shown in the plans and in the proposal form are approximate and are given only as a basis of calculation upon which the award of the contract is to be made. Where items are listed for payment as lump sum units and the plans show estimates of component quantities, the Department's responsibility for the accuracy of those quantities is limited to the provisions of 9-3.3. Where items are listed for payment as lump sum units and the plans do not show estimates of component quantities, the contractor shall be solely responsible for his own estimates of such quantities. The Department does not assume any responsibility that the final quantities will remain in accordance with estimated quantities, nor shall the contractor claim misunderstanding or deception because of such estimate of quantities. The estimated quantities of work to be done or materials to be furnished may be increased, decreased, or omitted as hereinafter provided. FDOT interprets this specification/rule to permit the agency to adjust quantities under the circumstances of this case with regard to its ITBs.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that the Department of Transportation enter a final order dismissing the Petitioner's protest and awarding the contract to the Intervenor. RECOMMENDED this 22nd day of October, 1993, at Tallahassee, Florida. ELLA JANE P. DAVIS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of October, 1993. APPENDIX TO RECOMMENDED ORDER 93-4556BID The following constitute specific rulings, pursuant to S120.59(2), F.S., upon the parties' respective proposed findings of fact (PFOF). Petitioner's (Vila's) PFOF: Accepted. (Findings of Fact 1, 4). Accepted but subordinate material not adopted. (Findings of Fact 4- 6, 11-12, 14, 18). Accepted but subordinate material not adopted. (Findings of Fact 5, 6, 11, 12, 14, 18). Accepted. (Findings of Fact 13- 14). Accepted in part in Finding of Fact 13. Remainder rejected as not supported by the record as a whole. Covered in the conclusions of law as legal argument. Accepted but subordinate material not adopted. (Findings of Fact 6, 12, 14). Accepted. (Findings of Fact 5, 6, 12, 13, 14, 17, 24-25). Accepted in part in Findings of Fact 5, 12, 14, 18. Rejected in part as unnecessary, subordinate or cumulative to the facts as found. The last sentence is rejected as not supported by the record and as argument contrary to law. Accepted. (Findings of Fact 14- 15). Accepted in part and rejected in part as not supported by the record as a whole. (Findings of Fact 14- 15). Rejected as immaterial and/or not supported by the record as a whole. Accepted that Petitioner usually bids in cubic yards, but the record demonstrates that mulch items are bid in all variety of ways and that FDOT typically requires bids in square yards for payment purposes. (Findings of Fact 2-3, 5-7, 13, 17, 21, 24-25). Accepted. (Findings of Fact 12, 14). Accepted but not dispositive or adopted. Accepted. (Findings of Fact 6, 18). Accepted but not adopted because unnecessary, subordinate, or cumulative to the facts as found, or immaterial. (Finding of Fact 18). Accepted. (Finding of Fact 16). Accepted. (Finding of Fact 16). Accepted. (Findings of Fact 16, 18). Accepted. (Finding of Fact 16). Accepted. (Findings of Fact 16, 20). Accepted. (Findings of Fact 16, 19-20). Rejected as irrelevant and immaterial. Accepted. (Finding of Fact 18). Accepted but unnecessary, subordinate, or cumulative material. Not adopted. (See Finding of Fact 18). Accepted in Finding of Fact 18 except to the degree unnecessary, subordinate, or cumulative to the facts as found. Also, the motivations of the project manager and the fact that this has not occurred before, is deemed irrelevant and immaterial. Accepted but not adopted to the degree unnecessary, subordinate, or cumulative to the facts as found. (See Finding of Fact 18). The first sentence is accepted but not adopted to the degree unnecessary, subordinate, or cumulative to the facts as found. The second sentence is rejected as out of context and contrary to the greater weight of the evidence as a whole. (Findings of Fact 2-3, 5-7, 17, 21, 24-25). Rejected as stated because not supported by the record as a whole. There is no secret in this case as to the discrepancy between the plans and ITB. (Findings of Fact 12, 18). Accepted. (Findings of Fact 18, 21-22). Accepted but not adopted because immaterial. Covered in the Conclusions of Law. Rejected as misleading and contrary to the record evidence supporting Findings of Fact 2-3, 5-7, 17, 21, 24-25. Covered in the Conclusions of Law. Rejected as not material, as speculative, and as not dispositive. Also rejected as use of isolated testimony as legal argument. FDOT is entitled to alter quantities. The substance is discussed in Findings of Fact 18, and 21-25 and the Conclusions of Law. Accepted. (Finding of Fact 21). Accepted but not adopted because unnecessary to disposition. Accepted but not adopted because unnecessary to disposition. Accepted but not adopted as cumulative. See Findings of Fact 4-5, 17, 24-25. Rejected as stated. Covered in substance in Findings of Fact 3, 11-12, 18 and the Conclusions of Law. Rejected as legal argument. Covered in substance in the Conclusions of Law. Rejected as use of isolated testimony for argument. Rejected as not supported by the record evidence as a whole. (Findings of Fact 5, 17, 24-25). Rejected as legal argument. Not dispositive. See Findings of Fact 2-4, 14 and Conclusions of Law. Accepted but not dispositive. See Findings of Fact 2-4, 14, 18, and the Conclusions of Law. Accepted. (Findings of Fact 12, 14, 18). Rejected as stated as not supported by the record evidence as a whole. Covered in Finding of Fact 14 and Conclusions of Law. Rejected as not supported by the record and as argument contrary to law. See Finding of Fact 14 and the Conclusions of Law. Rejected as Immaterial. Rejected as Immaterial. Respondent's (FDOT's) PFOF: Accepted. (Findings of Fact 1, 10). Accepted. (Finding of Fact 14). Accepted except to the degree unnecessary, subordinate, or cumulative to the facts as found. (Finding of Fact 14). Accepted except to the degree unnecessary, subordinate, or cumulative to the facts as found. (Finding of Fact 2, 4, 11, 14). Accepted except to the degree unnecessary, subordinate, or cumulative to the facts as found. (Finding of Fact 2-3, 5-7, 13, 17, 21-25). Accepted except to the degree unnecessary, subordinate, or cumulative to the facts as found. (Finding of Fact 16). Accepted. (Finding of Fact 16). Accepted except to the degree unnecessary, subordinate, or cumulative to the facts as found. (Findings of Fact 2-3, 5-7, 13, 17, 24-25). Accepted. (Finding of Fact 18). Accepted. (Finding of Fact 18). Accepted. (Findings of Fact 6-7). Accepted as modified to better conform to the record. (See Findings of Fact 5, 17, 24-25 and Conclusions of Laws). Accepted as modified to better conform to the record and eliminate mere argument. (Findings of Fact 24-25). Accepted. (Findings of Fact 18- 22). Accepted. (Findings of Fact 9, 16, 21-22). Accepted. (Findings of Fact 9, 16- 18, 21-22). Accepted. (Finding of Fact 2, 4, 14). Intervenor (Hayslip's) PFOF: 1 Accepted. (Finding of Fact 1). 2 Accepted. (Findings of Fact 2). 3 Accepted. (Findings of Fact 8). 4 Accepted. (Findings of fact 9, 21- 22). 5 Accepted. (Finding of Fact 10). 6 Accepted. (Finding of Fact 11). 7 Accepted. (Finding of Fact 13). 8 Accepted. (Finding of Fact 13). 9 Accepted. (Finding of Fact 13). 10 Accepted. (Finding of Fact 13). Accepted as modified to eliminate mere argument. (Finding of Fact 13). Accepted. (Finding of Fact 13). Accepted as modified to better conform to the record. (Finding of Fact 16). Accepted as modified to better conform to the record and eliminate cumulative material. (Finding of Fact 18). Accepted. (Findings of Fact 18, 21-22). Accepted. (Findings of Fact 21- 22). Accepted. (Finding of Fact 19). Accepted. (Finding of Fact 3). Accepted. (Finding of Fact 5). Accepted. (Finding of Fact 6). Accepted. (Finding of Fact 7). Rejected as unnecessary, subordinate, or cumulative to the facts as found or immaterial. COPIES FURNISHED: F. Alan Cummings, Esquire, Mary Piccard, Esquire, and Jeffrey V. Nelson, Esquire Cummings, Lawrence & Vezina, P.A. Post Office Box 589 Tallahassee, Florida 32302-0589 James W. Anderson, Esquire Savlov & Anderson Post Office Drawer 870 Tallahassee, Florida 32302-0870 William H. Roberts, Esquire Assistant General Counsel Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0450 Ben G. Watts, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Floirda 32399-0458 Thornton J. Williams, Esquire Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0458
Findings Of Fact The American Health and Rehabilitation Center, Inc., is a nursing home located in Plantation, Florida. The subject administrative hearing was requested by Petitioner in order to settle a dispute as to $17,356 disallowed by the Respondent, Department of Health and Rehabilitative Services, under Medicaid guidelines. The disputed disallowed costs were as follows: $6,855 - Lawn Maintenance; $1,975 - Telephone Advertising and long distance calls; $6,470 - Owner/Administrator auto rental; and $2,056 - Auto Expense for the year ending June 30, 1976. (a) Yellow Pages Advertising Petitioner contends: that the yellow pages advertising had never been disallowed before and having been paid under HIM 15 should now be paid. Respondent contends: that only a telephone listing in the yellow pages is allowable; that a display advertisement is not compensable, and that even though such display advertising might have been paid in the past, it should not have been paid and should not be allowed as a result of this hearing. Lawn/Landscape Maintenance Petitioner contends: that there was a "bookkeeping error" in the amount of $2,853 charged for additional trees and plants and agrees that amount should not have been charged to "maintenance" expense; that the maintenance service that was utilized was less expensive for the services they required and gave better protection against loss of trees and other lawn and landscaping materials; that the equipment needed to service the lawn would not be supplied by the men they could hire. Respondent contends: that a fee of $12,000 for lawn and landscape maintenance is not supportable and that the occupancy of the home had always been full and therefore did not improve with the tripling of annual landscaping expenses; that there is a poor cost-benefit ratio with such charges and that a full time maintenance man could have been employed at near minimum wage to care for the lawn. Undocumented Use of Automobile Petitioner contends: that they had been previously allowed such costs and were audited each year and they had no way of knowing that they would be disallowed for the subject cost period; that they had some staff who used the cars for errands; that automobile expense is an acceptable business expense. Respondent contends: that transportation of Medicaid patients to physicians was arranged by direct payment to third party transportation providers or by having the physicians see the patients at the nursing home; that because of the lack of documentation by Petitioner there was no way to determine the business and non-business endeavors which included the use of the automobile and therefore the full amount should have been disallowed.. The yellow page display was designed primarily to advertise the nursing home to those seeking nursing home care. Evidence presented showed that Petitioner was charged a sum of $700 per month or $8,400 per year. Whereon Petitioner claimed $12,000. The lawn covers approximately 1-1/2 acres. No documentation was presented or testimony established as to the portion of the disallowed automobile use attributable to business use, the Mercedes used by the Petitioner and the complete lack of documentation as to its business use was not substantiated.
Recommendation Allow telephone listing expense only and $700 per month for lawn maintenance. Disallow the undocumented automobile use. Unwarranted payments for advertisements, excessive lawn care and undocumented automobile expenses that have been made in the past is no reason that such undue payments should be continued. DONE AND ENTERED this 2nd day of August 1978 in Tallahassee, Florida. DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of August 1978. COPIES FURNISHED: James Mahorner, Esquire Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301 Miss Patricia E. Hintz Administrator American Health and Rehabilitation Center 7751 West Broward Boulevard Plantation, Florida 33324
Findings Of Fact K & B Enterprises, Respondent, purchased plants from Roy Amerson, Inc., Petitioner, and they were delivered to Respondent on February 19, 1980. Respondent had ordered Bottlebrush and Cuban laurel (Ficus Nitida) packaged in wire baskets to protect root ball in shipment. Upon arrival Respondent noted that the wires were mangled and some root balls appeared separated from the roots. Before the trees were unloaded Mrs. Benway telephoned the salesman for Petitioner and told him about the condition of the trees. The salesman advised her to accept the trees, water them, and they (Amerson) would make an allowance for the damage. This, he said, would be better and cause less damage to the trees than if they were sent back on the truck that brought them. The driver was requested by Mr. Benway to note the condition of the trees on the invoice accompanying the shipment (Exhibit 1). No such notation was made. The driver did note the date of delivery. Respondent Benway acknowledged receipt of the merchandise by signing Exhibit 1 below the following statement printed near the bottom of Exhibit 1: STOCK MAY BE REFUSED AT TIME OF DELIVERY FOR A DEFINITE REASON, BUT ONCE SIGNED FOR CUSTOMER ASSUMES RESPONSIBILITY FOR TOTAL AMOUNT OF INVOICE. OPEN ACCOUNTS PAYABLE BY THE 10TH OF THE MONTH. 1 1/2 PERCENT CHARGE ADDED IF NOT PAID BY THE 25TH WHICH IS ANNUAL RATE OF 18 PERCENT. Respondent is a plant retailer and landscape contractor. After accepting the February 19, 1980 delivery the Cuban laurel was planted as were the other plants. Attempts to settle the dispute with Petitioner's salesman were unsuccessful. Nine of the Bottlebrush died but all of the Cuban laurel have survived. At the instruction of the salesman these plants were watered but not trimmed or fertilized. Respondent paid for the other plants received on this invoice and for the damaged plants as they have been sold. As of the date of the hearing the balance owed on the stock delivered on Exhibit 1 was $1,494.90.
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
Findings Of Fact Petitioner, Golfcrest Nursing Home (Golfcrest), is a properly licensed 67-bed nursing home located in Broward County, Florida. Respondent, the Department of Health and Rehabilitative Services (HRS), was the state agency responsible for administration and implementation of the Florida Medicaid Program. Those responsibilities have been transferred to the Agency For Health Care Administration. Golfcrest participates in the Florida Medicaid Program and provides inpatient nursing home services to Medicaid eligible persons. Golfcrest is entitled to reimbursement in accordance with the Florida Title XIX Long-Term Care Reimbursement Plan (Plan) which has been adopted and incorporated by reference in Rule 10C-7.0482, Florida Administrative Code. The Plan contains provisions which authorize a nursing home participating in the Medicaid Program to request an interim change in its Medicaid reimbursement rate when it incurs property related costs which would change its reimbursement rate by one percent (1 percent) or when it incurs costs resulting from patient care or operating changes made to comply with existing state regulations, and said costs are at least $5,000 or one percent (1 percent) of its reimbursement rate. In 1980 Americare Corporation (Americare) purchased Golfcrest. In 1983 or 1984, Americare did some cosmetic renovations at Golfcrest. Portions of the facility are 45 years old. Americare contracted with Diversicare Management Services to manage the operations of Golfcrest. In 1988-1989, Joann Verbanic, a regional vice- president for Diversicare Management Services, recommended to the Board of Directors of Americare that major renovations to the Golfcrest facility be done. On March 19, 1990, Americare sent a team to Golfcrest to survey the facility for needed renovations. Later a plan was presented to Americare's Board of Directors and permission was given to proceed with a major renovation. In May of 1990 and July of 1991, HRS conducted its annual licensure surveys at Golfcrest. As a result, HRS identified several licensure deficiencies. Correction of these deficiencies was mandated by HRS. Failure to correct these deficiencies would have resulted in sanctions against Golfcrest's nursing home license, including administrative fines, a reduction in licensure rating, other civil penalties, and a reduction in Medicaid reimbursement. In order to correct the licensure deficiencies, Golfcrest incurred substantial property costs and costs due to patient care and operating changes. By letter dated January 6, 1992, Golfcrest submitted to HRS a request for an interim rate increase for patient care costs, operating costs, and property costs incurred or to be incurred to comply with existing state regulations and to correct identified licensure deficiencies. By letter dated April 14, 1992, Golfcrest provided additional information which had been requested by HRS. Golfcrest requested that the following costs be included in the calculation of its interim rate: Operating Costs Office Furniture $ 896.45 3 Laundry Carts 696.31 Office Door 125.00 Light Fixtures 1,067.30 Laundry Table 482.00 Structural Repairs 100.00 Repairs for Boiler 390.00 42 Overhead Lights 11,861.07 Patient Care Costs 57 Hi-Lo Beds 19,301.40 Blinds 5,145.02 Dining Room Furniture 3,167.70 Lobby Furniture 2,500.00 Bedspreads 3,404.78 Valances 3,472.05 Cubicle Curtains, Tracks 9,579.51 Activity Furniture 1,000.00 Property Costs Bldg. Imp. Depreciation 16,356.00 HRS denied in part and granted in part, Golfcrest's interim rate request by letter dated June 15, 1992, as revised by letter dated July 1, 1992. HRS granted the patient care costs for the 57 Hi-Lo beds and for the cubicle curtain and tracks and the property costs for the building improvement depreciation. In its proposed recommended order, Golfcrest withdrew its request for costs of the boiler leak, the lobby furniture, folding table for the laundry, and structural repairs. Golfcrest incurred the costs for which the interim rate is requested. Golfcrest requested that the purchase of office furniture be accepted as an allowable cost. Golfcrest did not specify what office furniture was purchased nor did it adequately relate such a purchase to a cited deficiency in either the 1990 or the 1991 survey. Additionally, Golfcrest did not establish that the cost of the office furniture was what a prudent and cost-conscious buyer would pay for office furniture. In the 1990 survey report, Golfcrest was cited for having linen stored on dressers in residents' rooms. There was insufficient space to store the linen in the laundry area so Golfcrest purchased three laundry carts to store the linens in the hallways. The purchase of the laundry carts was necessary to correct the deficiency cited in the 1990 survey. However, no evidence was presented to establish that the amount paid for the laundry carts was what a prudent and cost-conscious buyer would pay for the item. In the 1991 survey, Golfcrest was cited for having exit doors with screens missing and broken jalousie slats; therefore, it did not meet the requirement that the facility must provide housekeeping and maintenance services necessary to maintain an orderly and comfortable interior. Golfcrest relies on this cited deficiency to support its claim for the cost of replacing a new office door. Golfcrest's reliance is misplaced. The deficiency is the failure to perform ordinary maintenance services. The replacement of the office door is not necessary to comply with the cited licensure requirements. Golfcrest stated in its plan of correction that it would repair the cited doors by replacing the screens. Additionally, Golfcrest did not establish that the cost of the door was what a prudent and cost-conscious buyer would pay for the door. Rule 10D-29.121(7)(d), Florida Administrative Code, required that renovations to restore a nonconforming building to its condition previous to deterioration must minimally meet standards for a new facility. The unrebutted testimony was that termites had damaged the wall studs and the walls had to be torn out and replaced. In order to meet the required NFPA standards and building code requirements for lumens and wiring, it was necessary to replace 42 overbed lights and 14 light fixtures for 3-bed wards. The purchase of this lighting was necessary to correct deficiencies that would result if the old lighting were retained after the renovations. However, no evidence was presented that would establish that the cost of the lighting fixtures was what a prudent and cost-conscious buyer would pay for the lighting. In the 1990 survey report, Golfcrest was cited for having broken venetian blinds in rooms 6 and 33. Golfcrest stated in its plan of correction that "broken blinds are repaired/replaced as needed." Golfcrest requested that in its interim rate request that $5,145.02 be considered an allowable cost for the replacement of blinds. Although there was a deficiency noted concerning broken venetian blinds, Golfcrest did not establish that the cost for the blinds was what a prudent and cost-conscious buyer would pay for the blinds. In the 1991 survey, Golfcrest was cited for not being adequately furnished in the dining areas and not having sufficient space to accommodate all activities. In order to provide more space in the dining areas, Golfcrest purchased ten collapsible dining tables which could be easily removed to provide more space for large group activities in the dining room. The purchase of the dining tables was necessary to correct the deficiency of inadequate space, however, Golfcrest did not establish that the cost of the dining tables did not exceed the level of what a prudent and cost-conscious buyer would pay for dining tables. Golfcrest purchased 67 dining room chairs. However, Golfcrest did not establish how the purchase of the dining room chairs corrected the cited deficiency and did not establish that the cost of the dining room chairs was what a prudent and cost-conscious buyer would pay for dining room chairs. In the 1991 survey report, Golfcrest was cited for not providing clean beds. As an example of this deficiency, the survey listed torn blankets, threadbare sheets, pillow cases and towels and sunrotted sheets. Golfcrest purchased 104 bedspreads to replace all the bedspreads in the facility and to maintain an inventory of bedspreads to be used while bedspreads was being laundered. The purchase of the bedspreads were related to a cited deficiency, but Golfcrest did not establish that the cost of the bedspreads was what a prudent and cost-conscious buyer would pay for the bedspreads. Golfcrest requested that the purchase of valances be considered an allowable cost in its interim rate request. In its proposed recommended order, Golfcrest relied on the deficiencies cited in the 1991 survey report relating to the life safety survey dealing with privacy curtains which did not have netting at the top for support of its request for the valances. Golfcrest did not establish that the valances purchased were part of the cited privacy curtains. Given the fact that Golfcrest's request for replacement of cubicle curtains and tracks, was a separate request from the valances, it is reasonable to infer that the valances did not relate to the licensure requirement relied upon by Golfcrest. Additionally, Golfcrest did not establish that the cost of the valances was what a prudent and cost-conscious buyer would pay for valances. Golfcrest requested that the purchase of furniture for the activities area be considered an allowable cost in the calculation of its interim rate. Golfcrest did not establish what furniture was purchased for the activity area; thus, it did not establish how the purchase of the furniture was necessary to correct the deficiency that Golfcrest did not provide sufficient space and equipment and did not adequately furnish recreation and program areas to enable staff to provide residents with needed services as required. Additionally, Golfcrest did not establish that the cost of the furnishings for the activity room was what a prudent and cost-conscious buyer would pay for the furnishings. In its January 6, 1992 letter requesting an interim rate request, Golfcrest used 22,676 patient days to calculate the per diem rate for property costs. This number was taken from the July 31, 1990 cost report. HRS used 23,010 patient days to calculate the per diem rate. This number was taken from the last cost report dated July 31, 1991 and is the appropriate number to use in calculating the interim rate. The total per diem reimbursement rate for Golfcrest which was in effect at the time of the interim rate request was $71.2565. The per diem reimbursement for the property component is not one percent or more of Golfcrest's total per diem reimbursement rate.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered by the Agency for Health Care Administration as successor in interest for the Department of Health and Rehabilitative Services determining the interim rate for Golfcrest to be $1.2551. DONE AND ENTERED this 3rd day of August, 1994, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND 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 3rd day of August, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-847 To comply with the requirements of Section 120.59(2), Florida Statutes (1993), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact Paragraphs 1-6: Accepted. Paragraph 7-9: Accepted in substance. Paragraph 10: Rejected as unnecessary detail. Paragraph 11-16: Accepted in substance. Paragraphs 17-19: Rejected as subordinate to the facts actually found. Paragraph 20: Accepted in substance. Paragraph 21: Rejected as constituting a conclusion of law. Paragraph 22: Accepted in substance. HRS had allowed the cost of the Hi-Lo beds, thus, those costs were not in dispute. Paragraph 23: Accepted in substance as to the blinds but not as to the shades and shower curtains. The shades and shower curtains were not part of the interim rate request, thus whether they were necessary to correct a deficiency is not addressed in this Recommended Order. Paragraph 24: Accepted in substance as it relates to the dining tables but not as to the dining chairs. Paragraph 25: Accepted in substance. Paragraph 26: Accepted in substance as it relates to the cubicle curtains and tracks but not as it relates to the valances. The cubicle curtains and tracks were allowed by HRS as a cost and thus was not in dispute. Paragraphs 27-28: Accepted in substance. Paragraph 29: Rejected as not supported by the greater weight of the evidence. Paragraph 30: Accepted in substance. Paragraph 31: Rejected as not supported by the greater weight of the evidence. Paragraphs 32 and 33: Accepted in substance. Paragraph 34: The first two sentences are accepted in substance. The third, fifth, sixth and seventh sentences are rejected as constituting conclusions of law. The fourth sentence is accepted. Paragraphs 35-36: Rejected as not supported by the greater weight of the evidence. Paragraph 37: The first sentence is accepted. The second sentence is rejected as not supported by the greater weight of the evidence. Paragraph 38: Rejected as subordinate to the facts actually found. Paragraph 39: With exception of the last sentence the paragraph is rejected as unnecessary detail. The last sentence is rejected as constituting a conclusion of law. Respondent's Proposed Findings of Fact. Paragraph 1: Accepted in substance. Paragraphs 2-9: Accepted. Paragraph 10-11: Accepted in substance. Paragraph 12-22: Rejected as unnecessary detail. Paragraphs 23-28: Accepted in substance except in paragraph 24 the reference to floor coverings should be to light fixtures. Paragraph 29: Rejected as not supported by the greater weight of the evidence. Paragraph 30: Accepted in substance. Paragraph 31-33: Rejected as subordinate to the facts actually found. Paragraph 34: Accepted in substance. Paragraph 35: Rejected as subordinate to the facts actually found. Paragraphs 36-39: Accepted in substance. COPIES FURNISHED: Alfred W. Clark, Esquire 117 South Gadsden, Suite 201 Tallahassee, Florida 32301 Karel Baarslag, Esquire HRS Medicaid Office 1317 Winewood Boulevard Building Six, Room 233 Tallahassee, Florida 32399-0700 R. S. Power, Agency Clerk Agency for Health Care Administration Atrium Building, Suite 301 325 John Knox Road Tallahassee, Florida 32303 Harold D. Lewis, Esquire Agency For Health Care Administration The Atrium, Suite 301 325 John Knox Road Tallahassee, Florida 32303
