The Issue Whether Respondent acted contrary to the agency's governing statutes, rules or policies, or the bid specifications in its proposed decision to award a contract to Intervenor Xerox Corporation pursuant to Request for Proposal ("RFP") No. 07-015- 040-RFP.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of the proceeding, the following findings of fact are made: On December 15, 2006, PCS issued the 2007 RFP, entitled "Copier Program--Request for Proposals." The 2007 RFP was intended to provide a comprehensive copier program for the entire Pinellas County School District from the award date of the bid, then anticipated to be February 20, 2007, through June 30, 2012. The purpose of the 2007 RFP was stated as follows in Section 3.1 of the General Information section: [PCS] requests proposals from experienced and qualified vendors to provide a comprehensive copier program countywide which fulfills the priorities and needs expressed by district focus groups. PCS wishes to partner with a qualified vendor who will continue to improve information sharing, right size number of assets, and reduce the number of device types while lowering the district's cost. Vendors may propose whatever program they feel best meets the district's needs and are not restricted in any way other than to meet the basic equipment specifications, terms and conditions outlined in this bid. . . . (Emphasis added) A statement of the 2007 RFP's "scope" set forth in the Special Conditions similarly provided: [PCS] requests proposals from experienced and qualified vendors to provide a comprehensive copier program countywide which fulfills the priorities and needs expressed by district focus groups. Vendors may propose whatever program they feel best meets these needs and a district evaluation committee made up of participants from the focus groups will evaluate proposals and make the selection it feels best meets these needs based upon a set of criteria published in this document. . . . [Emphasis added] The 2007 RFP provided for proposals to be received no later than January 18, 2007, at 3:00 p.m. The 2007 RFP contained General Terms and Conditions, setting forth the standard boilerplate terms common to all PCS procurements, and Section 1 of "Special Conditions" particular to this contract.1 These were followed by: Section 2, "Personnel Matrix"; Section 3, "General Information"; Section 4, "Program Specifications"; Section 5, "Equipment Specifications"; Section 6, "Cost Proposal"; and Section 7, "Contractor Response." PCS has adopted the General Terms and Conditions as rules, codified in Part A of the PCS Purchasing Handbook. Paragraph 1(g) of the General Terms and Conditions, "Freight Terms," provided: All items are to be bid FOB destination with all transportation charges prepaid and included in the bid prices and title transferring to the district at the time of delivery, unless otherwise stated in bid invitation. Any exceptions to these freight terms taken by the bidder must be clearly stated in the bidder's proposal. The purchasing department will evaluate any such exceptions and determine if the exception constitutes grounds for rejection of the bidder's proposal. [Emphasis added] Paragraph 3 of the General Terms and Conditions, "Acceptance and Withdrawal of Bids," provided: A bid (or amendment thereto) will not be accepted by the purchasing department after the time and date specified for the bid opening, nor may a bid (or amendment thereto) which has already been opened in public be withdrawn by the bidder for a period of sixty (60) calendar days after the bid opening date and time, unless authorized by the purchasing department. By written request to the purchasing department, the bidder may withdraw from the bid process and ask to have their sealed bid proposal returned at any time prior to the closing date and time for the receipt of bid proposals. Paragraph 14 of the General Terms and Conditions, "Variance to Bid Documents," provided: For the purpose of bid evaluation, bidders must clearly stipulate any or all variances to the bid documents or specifications, no matter how slight. If variations are not stated in the bidder's proposal, it shall be construed that the bid proposal submitted fully complies in every respect with our bid documents. Paragraph 30 of the General Terms and Conditions, "Errors and Omissions," provided: In the event an error or obvious omission is discovered in a bidder's proposal, either by the purchasing department or the bidder, the bidder may have the opportunity of withdrawing their bid, provided they can produce sufficient evidence to document that the error or omission was clerical in nature and unintentional . . . This privilege shall not extend to allowing a bidder to change any information contained in their bid proposal; however, in the event of a minor omission or oversight on the part of the bidder, the purchasing department (or designee) may request written clarification from a bidder in order to confirm the evaluator's interpretation of the bidder's response and to preclude the rejection of their bid, either in part or in whole. The purchasing department will have the authority to weigh the severity of the infraction and determine its acceptability. Paragraph 31 of the General Terms and Conditions, "Basis of Award of Bids," provides: "A Bidder who substitutes its standard terms and conditions for the district's, or who qualifies its bid in such a manner as to nullify or limit its liability to the district will be considered nonresponsive." The standard form cover sheet to both the 2006 and 2007 RFPs contained a "Note to Bidder" that stated: "A signed bid submitted to the School Board obligates the bidder to all terms, conditions and specifications stated in this bid document, unless exceptions are taken and clearly stated in the bidder's proposal." (Emphasis added) The Special Conditions of the 2007 RFP included a provision titled "Acceptance of Vendor Responses," which stated: "The purchasing department reserves the right to accept proposals from multiple vendors, and to accept or reject portions of a proposal based upon the information requested. Vendors may be excluded from further consideration for failure to fully comply with the requirements of this RFP solely at the purchasing department's discretion." (Emphasis added) The Special Conditions of the 2007 RFP also included a provision entitled "Integrity of Bid Documents," which stated: Bidders shall use the original Bid Proposal Forms provided by the Purchasing Department and enter information only in the spaces where a response is requested. Bidders may use an attachment as an addendum to the Bid Proposal form if sufficient space is not available on the original form for the bidder to enter a complete response. Any modifications or alterations to the original bid documents by the bidder, whether intentional or otherwise, will constitute grounds for rejection of a bid. Any such modifications or alterations that a bidder wishes to propose must be clearly stated in the bidder's proposal response and presented in the form of an addendum to the original bid documents. Both Xerox and IKON timely submitted proposals in response to the 2007 RFP. Evaluations of the responses to the RFP were based on a two-step procedure. First, a focus group of individuals from the Pinellas County School District would analyze the bids and award points based on the specifications and the Proposal Evaluation Form set forth in the RFP. The maximum award was 100 points, with 80 points constituting the threshold for further consideration. Second, those vendors which met the 80-point threshold would compete solely on price. Those bidders who did not score 80 points in the first stage would not have their price bids opened. By January 24, 2007, the focus group had finalized its evaluations, and the cost proposals were to be opened on January 26, 2007. Both IKON and Xerox scored above the 80 point level. IKON received a score of 87 points from the focus group and Xerox received a score of 81 points. Xerox's proposal included, among 15 unnumbered appendices, an appendix titled "Xerox Clarification Addendum to the RFP." This Addendum contained four "clarifications" of portions of the General Terms and Conditions, seven "clarifications" regarding the Program Specifications portion of the Special Conditions, and 12 items under the heading "Other Xerox Service Terms" that purported to set forth contractual provisions regarding service, personnel, risk of loss, limitations on liability, payment schedules, and other standard contract terms. PCS's purchasing department conducted a responsiveness review of the proposals prior to sending them to the focus group for substantive evaluation, but did not notice the Xerox Addendum. Mark Lindemann, the director of purchasing for PCS, testified that it is not customary for bidders to submit such an addendum, and, therefore, his staff was not looking for it when conducting their responsiveness review. On January 30, 2007, after the focus group had performed its evaluation of all the bids, and the cost proposals had been opened and the bid tabulations had been posted on the PCS website, Colin Castle of IKON brought to the attention of the PCS purchasing department the presence of the Xerox Addendum. Geri Pomerantz is the Xerox employee responsible for public sector solicitations in the Southeast United States. She is responsible for understanding the terms and conditions of a solicitation, for pricing the solution based on the customer's requirements, and for ensuring that Xerox submits a responsive proposal. Ms. Pomerantz signed and submitted Xerox's proposal in response to the 2007 RFP. Ms. Pomerantz believed that the Xerox Addendum complied with the "Integrity of Bid Documents" provision of the Special Conditions, quoted above. By submitting the Addendum, Xerox sought to clarify areas of the RFP, to explain how Xerox was meeting the requirements of the RFP, and to propose new items where Ms. Pomerantz believed the RFP was silent on important terms. Ms. Pomerantz testified that, to comply with the "Integrity of Bid Documents" provision, Xerox included the proposed clarifications in the body of its proposal, where that was possible, then further called them to the attention of PCS by placing them in the Addendum. Though unnumbered, the Xerox Addendum is clearly identified in the Table of Contents at the front of the Xerox proposal and on a separate tab on the side of the proposal. Xerox incorporated its clarifications in the body of its proposal in those places where the 2007 RFP requested a response from the vendor, i.e., Section 4, the Program Specifications portion and Section 5, the Equipment Specifications portion. Xerox incorporated clarifications to the following Program and Equipment Specifications: Section 4.3.1-–Equipment Build Status; Sections 4.3.4, 5.3.2 and 5.3.13 –-Price Offering; Sections 4.7.4 and 4.7.5-–Inspection and Acceptance; Section 4.10.2-–Response Time; Section 4.10.3-– Uptime; Section 4.10.4--Electronic Meter Reads; and Section 4.17–-Insurance Specifications for Contractors. The General Terms and Conditions did not call for a vendor response, and Xerox's clarifications or proposed modifications to those were made only in the Addendum. The introduction to the Xerox Addendum provides as follows: We have reviewed your Invitation to Bid ("Bid")[2] for a Copier Program, and have prepared a proposal that we believe addresses your requirements. However, some of the Board's requirements require that we make some limited clarifications to the terms and conditions included in your Bid. These clarifications are set forth below and are part of our Proposal. In addition, we have included some additional terms and conditions, which are also included as part of our Proposal. Should there be a conflict between the terms and conditions of the various documents the order of precedence will be this Addendum, followed by your Bid. Please note that if any of the terms or clarifications are inconsistent with Florida law or otherwise unacceptable to you, Xerox agrees to negotiate a reasonable alternative that is acceptable to both parties. Our team is also prepared to discuss the Xerox Proposal in greater detail and, if required, adjust our offering based on your final requirements, which may include a modification to our proposed equipment, support services, terms and conditions, and/or price offering. The Xerox Addendum expressly proposed clarifications or modifications to four provisions of the General Terms and Conditions. Paragraph 1(g), set forth in full above, contains PCS's standard freight terms and describes the process by which a vendor may take exception to those terms: exceptions must be clearly stated in the proposal, and the purchasing department will determine whether the exceptions constitute grounds for rejecting the vendor's proposal. The Xerox Addendum proposed to transfer to PCS the cost of any "non-standard delivery or removal expenses, such as additional costs where additional time or resources are required to disassemble equipment due to lack of adequate facility access, or the need to use stair creepers or cranes to deliver equipment to upper floors of buildings.3 Ms. Pomerantz justified this variance by asserting that the 2007 RFP was silent regarding the issue of "non- standard delivery", and that Xerox was merely offering a clarifying solution to this problem. Mr. Lindemann believed this clarification to be salutary, based on disputes PCS has had with its current vendor, IKON, regarding unusual delivery issues. Paragraph 1(g) of the General Terms and Conditions specifically allowed the vendor to propose exceptions to the standard freight terms, provided those exceptions were clearly stated and the vendor understood that its exceptions could be grounds for rejection of its proposal. Thus, it is found that the Xerox Addendum did not materially deviate from the provisions of the RFP as to this variance. The Xerox Addendum also proposed modification of paragraph 11 of the General Terms and Conditions, which states that PCS has "sole and exclusive property" rights to any discovery, invention or work product produced under the contract. Xerox proposed that any work developed under this contract would be of a generic nature and would remain the sole property of Xerox. Mr. Lindemann reasonably opined that this was not a material deviation because there was no intellectual property involved in this RFP. The Xerox Addendum did not materially deviate from the provisions of the RFP as to this variance. The Xerox Addendum proposed modification of paragraph 41 of the General Terms and Conditions. Paragraph 41 provided that unless otherwise specified in the Special Conditions, all items requested "must be new, the latest model manufactured, first quality, carry the manufacturer's standard warranty and be equal to or exceed the specifications" listed in the RFP. In this instance, the Special Conditions did provide otherwise. Section 4.3.1 of the Program Specifications provided, in relevant part, that vendors "may propose all used, all new or a combination of new and used equipment, but all equipment must meet the minimum standards outlined later in this section. To assure ease of operation for end users, if used equipment is proposed it should all be of the same brand and model within any given Group of copiers, within any given facility." The Xerox Addendum simply provided clarification regarding the company's terminology for its equipment. The equipment provided by Xerox would be either "Newly Manufactured," "Factory Produced New Models," or "Remanufactured," internal Xerox distinctions regarding the use of new, reconditioned or recycled components, and Xerox disclaimed any intent to use reconditioned, recycled, refurbished or used equipment as defined by industry standard. In this instance, Xerox submitted a clarification that did not deviate from or attempt to modify the Program Specifications. The Xerox Addendum proposed modification of paragraph 44 of the General Terms and Conditions, the limitation of liability provision, which provided: The bidder guarantees to save [PCS], its agents and employees, harmless from liability of any nature or kind for use of any copyrighted or non-copyrighted materials, secret process, patented or unpatented inventions, articles or appliances, furnished or used in performance of the contract for which the contractor is not the patentee, assignee or licensee. The Xerox Addendum to paragraph 44 provided as follows: Xerox agrees that it will indemnify the Board from all copyright and patent information that is included in Xerox- branded equipment/software. However, Xerox will not indemnify the Board, its directors, officers, employees, volunteers, and agent [sic] for any patent infringement caused by complying with the Board's requirement to use, or the Board's use of, the Xerox- branded/supplied equipment with equipment or software not provided by Xerox. Mr. Lindemann testified that this modification of the limitation of liability provision would most likely require PCS to purchase additional contingent liability insurance, which would be a cost essentially passed on from Xerox to PCS. It is found that the Xerox Addendum materially deviated from the provisions of the RFP as to this variance. The Xerox Addendum proposed a second limitation of liability provision in the section titled "Other Xerox Service Terms," which was essentially a list of standard terms and conditions that Xerox proposed to take precedence over similar provisions in the 2007 RFP. This second limitation of liability proposal provided as follows: Excluding personal injury (including death), property damage, and intellectual property indemnification on Xerox branded equipment, Xerox will not be liable to you for any direct damages in excess of $100,000 or the amounts you've paid to Xerox, whichever is greater. Neither party shall be liable to the other for any special, indirect, incidental, consequential or punitive damages arising out of or relating to this Agreement, whether the claim alleges tortious conduct (including negligence) or any other legal theory. Any action you take against Xerox must be commenced within two (2) years after the event that caused it. Ms. Pomerantz testified that when she read the RFP she focused on the indemnification language in paragraph 44 of the General Terms and Conditions regarding copyright and patent issues. She thought the RFP was silent on broader indemnification issues, and she sought to clarify it with this proposed language. Mr. Lindemann testified that the $100,000 limitation of liability could result in costs to PCS in the event of a judgment against PCS and might require the purchase of additional liability insurance. Mr. Lindemann believed this proposed limitation on liability was a material deviation and formed the basis for his request to Xerox to withdraw the Addendum. Paragraph 31 of the Standard Terms and Conditions states: "A Bidder who substitutes its standard terms and conditions for the district's, or who qualifies its bid in such a manner as to nullify or limit its liability to the district will be considered nonresponsive." (Emphasis added) It is found that the Xerox Addendum materially deviated from the provisions of the RFP as to this variance. 34. Sections 4.3.4, 5.3.2, and 5.3.13 of the Program/Equipment Specifications related to the vendors' cost proposals provide: 4.3.4 Whatever type of pricing methodology is proposed, it shall include all costs associated with the administration of the service, including, but not limited to: all imaging devices, any peripheral equipment (file servers, etc.), delivery, removal, installation, training, dedicated technician(s), all supplies needed to operate the imaging devices except paper, delivery of supplies and removal of the equipment upon termination of this contract. * * * 5.3.2 Pricing should include all costs associated with the administration of the service, including, but not limited to all imaging devices, delivery, removal, installation, training, certified technicians and all supplies except paper needed to operate the imaging devices. * * * 5.3.13 Pricing must include all costs associated with the administration of the service, including, but not limited to all copier devices, delivery, removal, installation, training, certified technician(s), all supplies except paper, end-user training and semi-annual customer satisfaction surveys. The three quoted provisions state that price proposals must include all costs associated with the administration of the service in question, except for paper, delivery of supplies, removal of equipment upon contract termination, end user training, and customer satisfaction surveys. The Xerox Addendum sets forth a monthly minimum and cost-per-copy charge that would cover standard equipment, supplies, maintenance, delivery and removal, installation and user training, but would require PCS to pay for "optional accessories," "non-standard operating supplies," "excess rigging" needed due to inadequate site access or the need to use stair creepers or cranes to install or remove equipment,4 overtime service coverage, and expenses associated with site preparation. The Xerox Addendum attempted to vary the quoted Special Conditions that require the vendor's price to include all costs associated with delivery, removal, and installation and, thus, materially deviated from the provisions of the RFP. Sections 4.7.4 and 4.7.5 of the Program Specifications required the vendor to "provide and pay for all material, labor, tools, transportation and handling, and other facilities necessary for the furnishing, delivery, assembly plus inspection before, during and after installation of all items specified herein." The Xerox Addendum to Sections 4.7.4 and 4.7.5 attempted to limit Xerox's obligation to inspect the devices by stating that they are "deemed accepted" upon installation unless PCS specifically requires an inspection. It is found that the Xerox Addendum materially deviated from the provisions of the RFP as to this variance. Section 4.17.1 of the Program Specifications required acceptance testing for each imaging device and accessory, including a period of four consecutive business days, each containing seven hours of operational use time, in which the equipment maintains a 95 percent level of performance. The Xerox Addendum to Section 4.17.1 attempted to limit Xerox's obligation to inspect the devices by stating that they are "deemed accepted" upon installation unless PCS specifically requires an inspection. It is found that the Xerox Addendum materially deviated from the provisions of the RFP as to this variance. Section 4.10.2 of the Program Specifications provided requirements regarding service calls and response times. This condition defines "response time" as the interim between the user's call to the repair office and the appearance of a certified technician on-site who is prepared to effect repairs. Section 4.10.2 provides that the response time cannot exceed four hours. PCS would have the option of charging the contractor $50.00 per failure to meet this four-hour response time requirement. The Xerox Addendum proposed that service response times be averaged quarterly according to a formula by which "target response time" would be divided by "average service response time," which is measured by dividing the sum of all service call response times during the quarter by the total number of service calls. Xerox proposed that the $50.00 charge be imposed based upon Xerox's failure to meet "the 90-day 4 hour average unit response time commitment." IKON also proposed to calculate the response time using a quarterly average, providing for an average response time "of 2 to 6 hours for all customer service calls located within 30 miles of an IKON service center, and 4 to 8 hours for all customer service calls located 30 miles or more from an IKON service center." IKON's proposal did not clearly state how far IKON's nearest service center is located from any Pinellas County school site. Another section of IKON's proposal discusses the company's recent consolidation of its "customer care centers," which "provide direct customer support" and house "the field service call center and inside sales function for a geographical region," into four central locations, the closest to Pinellas County being in Atlanta, Georgia. In this instance, both Xerox and IKON have proposed material deviations from the RFP requirement. Section 4.10.2 of the Special Conditions set forth a simple response time requirement that PCS itself could monitor and enforce without input from the vendor. Both Xerox and IKON attempted to substitute complex formulas arriving at quarterly averages for response time. IKON's proposal further attempted to make its compliance with the four hour response time requirement contingent upon the location of IKON's service centers. Section 4.10.3 of the Special Conditions requires a guaranteed uptime of 95 percent per machine for any 90-day period, and further requires that machines failing to maintain 95 percent uptime must be removed and replaced with an identical or comparable model at no cost to PCS. The Xerox Addendum announced an uptime objective of maintaining an average 95 percent equipment uptime performance based on a three-month rolling average, a variation in the wording of Section 4.10.3 that does not materially change the RFP requirement. Xerox also offered slight variations in the definition of "downtime" that are in the nature of clarifications rather than amendments to Section 4.10.3. The Xerox Addendum also contained 12 "Other Xerox Service Terms," essentially Xerox's standard terms and conditions dealing with service guarantees, personnel, substitution of equipment or software, risk of loss for equipment, treatment of confidential information, compliance with laws, vendor liability for customer-supplied items, the limitation of liability provision discussed above, force majeure, payment upon 45 days of invoice, breach of contract and remedies thereto, and a procedure for amendment of the contract. The 2007 RFP's General Terms and Conditions contain requirements for breach of contract, limitation of liability, standards of conduct for vendor personnel, and equipment substitution. Thus, the Xerox Addendum violated the following language in paragraph 31 of the Standard Terms and Conditions: "A Bidder who substitutes its standard terms and conditions for the district's, or who qualifies its bid in such a manner as to nullify or limit its liability to the district will be considered nonresponsive." In summary, the Xerox Addendum materially deviated from the requirements of the 2007 RFP in the following ways: it varied from the limitation of liability requirements of paragraph 44 of the General Terms and Conditions; it offered a cost proposal that was not all-inclusive, in contravention of Sections 4.3.4, 5.3.2, and 5.3.13 of the Program Specifications; it attempted to limit inspections after installation and acceptance testing, in contravention of Sections 4.7.4, 4.7.5, and 4.17.1 of the Special Conditions; it varied from the response time requirements of Section 4.10.2 of the Special Conditions; and it attempted to substitute several of Xerox's standard terms and conditions for those of PCS, in violation of paragraph 31 of the General Terms and Conditions. After learning of the Xerox Addendum from Mr. Castle on January 30, 2007, PCS reviewed the Addendum and concluded that it included material deviations to the terms and conditions of the RFP solicitation and that either the Addendum or Xerox's bid must be withdrawn. Negotiations commenced between PCS and Xerox. On February 2, 2007, Xerox offered PCS a revised Addendum. PCS rejected the revised Addendum and informed Xerox that the Addendum must be withdrawn in its entirety. On February 5, 2007, Xerox notified PCS by letter that it was withdrawing the Addendum from its proposal. Also on February 5, 2007, PCS posted its notice of intent to award the contract to Xerox. IKON's protest complained that Xerox's letter did not accomplish a complete withdrawal of the deviations included in the Xerox Addendum, because many of those deviations remained in the main body of the Xerox proposal. As noted above, Xerox incorporated its clarifications in the main body of its proposal in those places where the 2007 RFP requested a response from the vendor. These clarifications were included in Section 7.1.4 of the Xerox proposal, "Proposed Work Plan, Transition Plan." When Xerox withdrew its Addendum, it did not also submit a revised proposal that deleted the Addendum provisions from those places where they had been incorporated into the main body of the proposal. Nevertheless, both Xerox and PCS understood that withdrawal of the Addendum accomplished the complete withdrawal of the materials included in the Addendum, including where they were incorporated into the main body of the Xerox proposal. This understanding was reasonable under the circumstances. However, IKON raises a related objection that is more pertinent. Xerox was allowed to withdraw its Addendum, and then was awarded the contract. Thus, the winning proposal is different than the proposal that was reviewed and scored by the PCS focus group. IKON argues that it is very likely that Xerox would not have passed the 80-point threshold without the Addendum provisions that were incorporated into the main body of the proposal. Mr. Lindemann of PCS believed that Xerox's score would probably have been higher without the Addendum provisions. The salient point is that both sides are free to speculate about what the score of the winning bid might have been, because PCS proposes to award a contract on a proposal that was never reviewed or scored in the manner prescribed by the 2007 RFP. PCS argues that the withdrawal of the Xerox Addendum was entirely in keeping with the RFP, citing paragraph 3 of the General Terms and Conditions, quoted in full above and relevant portion of which provides: A bid (or amendment thereto) will not be accepted by the purchasing department after the time and date specified for the bid opening, nor may a bid (or amendment thereto) which has already been opened in public be withdrawn by the bidder for a period of sixty (60) calendar days after the bid opening date and time, unless authorized by the purchasing department. [Emphasis added] PCS contends that the emphasized language grants the purchasing department authority to allow a bidder to withdraw a portion of its bid after the bids have been opened. This is correct, if the portion in question is a timely submitted amendment to the original bid.5 In their arguments, both PCS and Xerox equate the terms "amendment" and "addendum," and assume that the Xerox Addendum could be withdrawn as an "amendment" to the Xerox proposal. However, the Xerox Addendum was not an amendment to the Xerox proposal; it was an integral part of that proposal. The Addendum did not amend anything contained in the Xerox proposal; rather, it attempted to "amend" the terms of the RFP. The underscored portion of paragraph 3 anticipates the late withdrawal of an entire bid or an amendment to a bid, not a wholesale grant of authority to the purchasing department to allow a bidder to save a nonresponsive proposal by withdrawing the objectionable provisions. PCS argues that Xerox was given no economic or competitive advantage in being allowed to submit and then withdraw its Addendum. Ms. Pomerantz testified that none of the items in the Addendum would have affected the price bid by Xerox, because they were essentially items of overhead that Xerox cannot "cost out" to include in a price proposal. However, the testimony by Mr. Lindemann convincingly made the point that some of the variations from RFP terms offered by Xerox would affect PCS's costs regardless of their impact on Xerox's price proposal. Passing on costs to the agency that have been absorbed by IKON and the other vendors in their proposals works to Xerox's economic advantage and to the detriment of PCS. Xerox had an obvious competitive advantage in being granted the opportunity to amend its proposal after the substantive proposals were opened and evaluated and the price proposals had been opened and posted. Xerox was also granted the option, afforded to no other bidder, of simply declining to withdraw its Addendum and thereby walking away from the procurement after submitting a proposal that, under the terms of the RFP, is supposed to bind the vendor for a period of 90 days. Subsection 120.57(3)(f), Florida Statutes, provides, in relevant part: In a protest to an invitation to bid or request for proposals procurement, no submissions made after the bid or proposal opening which amend or supplement the bid or proposal shall be considered. . . . The PCS rules and RFP provisions, correctly understood, do not contravene this statutory requirement. They grant the purchasing department the flexibility to allow a bidder, under special circumstances, to withdraw from a given procurement after submitting a bid, and they allow PCS to waive slight variations or minor irregularities in a bid. To the extent that PCS interprets its rules and RFP to allow Xerox to substantially amend its proposal after the opening,6 as occurred in this procurement, then PCS has violated its governing statutes in a fashion that is clearly erroneous, contrary to competition, arbitrary, or capricious. PCS argues that even if the Xerox Addendum contained material deviations, the RFP and PCS's rule permitted bidders to submit addenda with material deviations. PCS based this argument on that portion of Section 3.1 of the Special Conditions stating that bidders "may propose whatever program they feel best meets the district's needs and are not restricted in any way other than to meet the basic equipment specifications, terms and conditions outlined in this bid." When read within the context of the Special Conditions in their entirety, this language clearly contemplates allowing the vendors to offer creative solutions within their field of substantive expertise, i.e., the establishment of a comprehensive copier program countywide. It was rational for the drafters of the RFP to assume that a company such as Xerox enters the process in possession of more knowledge and experience in the field of copier installation, service, and repair than the school district possesses. PCS conducted focus groups to determine the top priorities of the school personnel who use the copiers and presented the bidders with specifications broad enough to allow maximum flexibility in crafting proposals responsive to the listed priorities. However, there are rarely "creative solutions" to boilerplate RFP terms such as shipping, limitation of liability, the requirement that cost proposals be all-inclusive, inspection of equipment prior to acceptance, and response time for repairs. These are areas in which the purchasing department of PCS may be presumed to have at least as much expertise as Xerox or IKON. Variations from the RFP's requirements proposed by a bidder regarding these items are likely to be self-serving efforts to protect the bidder's interests or pass on costs to the agency. Paragraph 31 of the General Terms and Conditions recognizes this reality by stating that a bidder that substitutes its standard terms and conditions for those of PCS will be considered nonresponsive.7 PCS is correct that the "Integrity of Bid Documents" paragraph of Section 1 of the Special Conditions of the 2007 RFP allows bidders to submit addenda that clearly state "modifications or alterations that a bidder wishes to propose." However, contrary to PCS's treatment of Xerox in this procurement, the RFP does not state that the bidder may propose modifications of the RFP terms without risk.8 The cited paragraph clearly warns bidders that proposed modifications or alterations constitute grounds for rejection of a bid. The paragraph does not, and under Subsection 120.57(3)(f), Florida Statutes (2006), could not, state that bidders will be given the opportunity to withdraw those portions of their proposals deemed nonresponsive after bid opening. PCS also emphasizes the first sentence of the "Acceptance of Vendor Responses" paragraph of the Special Conditions: "The purchasing department reserves the right to accept proposals from multiple vendors, and to accept or reject portions of a proposal based upon the information requested." However, the next sentence of that paragraph states that the remedy is not after-the-fact withdrawal of the rejected portion of the proposal, but rejection of the proposal: "Vendors may be excluded from further consideration for failure to fully comply with the requirements of this RFP solely at the purchasing department's discretion." Both PCS and Xerox raised the issue of the 2006 RFP in an effort to show that IKON was now attacking a process from which it earlier benefited. In the 2006 procurement, IKON was allowed to withdraw portions of an addendum after a competitor filed a protest. PCS ultimately rejected all of the 2006 Proposals because of confusion on the part of the bidders, partly related to the fact that IKON was allowed to withdraw its addendum but a competitor was not given the same opportunity. PCS then issued the 2007 RFP in December 2006 to procure the same copy services sought by the 2006 RFP. The 2006 RFP is relevant only to show that PCS has allowed the withdrawal of amendments in at least one previous procurement, a moot point because PCS has freely stated its position that it has the authority to reject an addendum without rejecting the entire proposal. Xerox's original proposal, including the Addendum, was nonresponsive for the reasons set forth above. PCS's effort to save Xerox's low bid by allowing it to withdraw the Addendum violated Subsection 120.57(3)(f), Florida Statutes (2006), as well as the terms of the RFP. The remaining question is whether IKON's proposal was responsive and may therefore be awarded the contract. As already found above, IKON's proposal materially deviated from Section 4.10.2 of the Special Conditions by substituting a complex formula for the simple response time requirement of the RFP and by making compliance with the four- hour response time requirement contingent upon the location of IKON's service centers.9 Section 7.1.3 of the Contractor Response portion of the 2007 RFP, "Proposed Models and Equipment Configurations," provides the following: The respondent must provide a comprehensive description of its proposed standard models and equipment configurations for each of the various grade levels (elementary, middle, high school). Consideration should be given to the stated needs of the focus groups (Section 3), particularly "ease of operation", "accessibility" to machines and "reliability". Vendors should provide detailed, technical product literature for each piece of equipment proposed including all options. The respondent should also describe what flexibility will be allowed for adding or deleting equipment as program needs change and how that will effect the amount billed according to the cost proposal plan proposed. [Emphasis added] Section 7.1.7 of the Special Conditions, "Cost Proposal," provides the following: Respondent must include a complete, detailed cost proposal which encompasses all costs associated with the proposed program. The cost proposal must allow for flexibility to add or delete equipment as program needs change. The district will not entertain any proposals to purchase or lease any equipment. [Emphasis added] IKON's proposal contained the following paragraph within its response to Section 7.1.3 of the Special Conditions: As requested by PCS in Section 7.1.7 of the Invitation to Bid, IKON's cost proposal allows for flexibility. IKON will permit PCS to add or delete equipment as PCS' needs change by permitting PCS to upgrade or downgrade equipment at the beginning or at the end of its fiscal year. Under this program, PCS may replace upgraded or downgraded equipment with additional equipment that addresses PCS' needs. Specifically, IKON will permit PCS to identify up to [three] percent of the overall equipment fleet value procured by PCS from IKON, including models and specifications that are representative of the entire fleet population, as flexible equipment that may be upgraded or downgraded at the beginning or at the end of the fiscal year, while all other equipment may be canceled only in the event of a non- appropriation or termination for cause. The flexible equipment may also be relocated or otherwise used to facilitate a rightsizing program, as directed by PCS. PCS may utilize this flexibility program in its own discretion. In no event shall either party be liable to the other party for any indirect, special or consequential damages. Xerox contends that by limiting PCS to a three percent change in the overall equipment fleet value, IKON's proposal materially deviates from Sections 7.1.3 and 7.1.7 of the Special Conditions, which required that PCS have the flexibility to increase or decrease the size of the copier fleet to meet its needs. However, Section 7.1.3 did not prescribe the amount of "flexibility" required in the vendors' bids; rather, it expressly requested the vendors to "describe what flexibility will be allowed for adding or deleting equipment." IKON's bid described the allowed flexibility as three percent of the overall equipment fleet value and was thus responsive on its face. The evidence presented at hearing was insufficient to determine whether a three percent limit would be so restrictive of PCS's needs to add or delete equipment as to render IKON's proposal nonresponsive. More problematic is the last sentence of the quoted paragraph: "In no event shall either party be liable to the other party for any indirect, special or consequential damages." Xerox cogently argues that if its own proposed limitation of liability is a material deviation, then this similar limitation of liability included in the IKON bid must also be found a material deviation. IKON responds that it is clear from the context that this limitation of liability provision, unlike that in Xerox's proposal, applies only to Section 7.1.3. For this reason, IKON contends, PCS determined that IKON's bid was responsive. IKON argues that its own limitation of liability provision is implicated only in the event that PCS requires additional equipment and that it does not limit any direct liability of IKON to PCS and concerns only a distinct class of damages: indirect, special or consequential damages. The position of the quoted sentence, at the end of the final paragraph of IKON's response to Section 7.1.3 of the Special Conditions, supports IKON's contention that the limitation of liability applies only to that section. However, the wording of the sentence ("In no event . . .") indicates a broader intended application. IKON also failed to explain why the requirement of additional equipment, and only the requirement of additional equipment, raised concerns within IKON that indirect, special or consequential damages might be claimed by either party to the contract. At best, this provision is ambiguous in the scope of its application and, in any event, seeks to limit the liability of IKON beyond the limits provided by the RFP. If Xerox's limitations of liability constitute material deviations, then so must IKON's. IKON's proposal thus contains two material deviations from the RFP, one regarding response time and one regarding limitations of liability. IKON's proposal is nonresponsive.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED that PCS enter a final order that (a) declares Xerox's bid to be materially nonresponsive and, accordingly, rescinds the proposed award to Xerox; and (b) declares IKON's bid to be materially nonresponsive and, accordingly, rejects the same. Because the choice of remedies for invalid procurement actions is ultimately within the agency's discretion, the undersigned declines to make a recommendation as to whether PCS should award the contract to the next-lowest responsive bidder or reject all bids and start over. DONE AND ORDERED this 10th day of May, 2007, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 10th day of May, 2007.
The Issue The ultimate issue to be determined in this proceeding is which of the bids submitted to the Department of Health and Rehabilitative Services in response to its Request for Proposal for office space and facilities in Arcadia, Florida, is the lowest and best response to the invitation. The Petitioner contends that the Intervenor's bid was not responsive to the Request for Proposal, and that even if the Intervenor's bid were considered responsive, that Petitioner's bid was the lowest and best response. The Intervenor contends that its bid was responsive and that it was the lowest and best response. The Department contends that it properly evaluated the responses and that the bid should be awarded to the Intervenor.
Findings Of Fact In order to provide services as required by various federal and state statutes, the Department of Health and Rehabilitative Services needs to maintain office space in or near to the city of Arcadia, Florida. The Department is presently leasing office space from C. W. Whidden, the Intervenor in this proceeding. The lease expires on November 30, 1982. The Department's space needs have expanded since the time that it entered into the lease for the existing facility. In order to meet the need for increased space and to continue with its present activities, the Department issued an "Invitation to Propose" inviting interested persons to submit bids for the required office space. Three persons responded to the invitation: Chuck Bundschu, Inc.; Martin M. McAllister, the Petitioner in this proceeding; and the Intervenor. The bid acquisition has been designated by the Department as Lease No. 590:1526. The Department formed a bid evaluation committee composed of five employees of the Department's District VIII office. The facility being acquired would be located within and serve people within the Department's District VIII. Members of the bid evaluation committee individually reviewed the three bids, and met together to form a consensus. On May 14, 1982, the committee generated a memorandum in which the three bids were given points in 12 separate evaluation areas. The Petitioner's bid was given 87 points, the Intervenor's bid was given 83 points, and the bid submitted by Chuck Bundschu, Inc., was given 75 points. The committee recommended that the lease be awarded to the Petitioner. The Department's District VIII Administrative Services Director, Frances Clendenin, was among the members of the committee. She was not satisfied with the committee's evaluation, and she communicated about it with Cindi Shaffer, the Department's Facilities Services Coordinator in Tallahassee. Shaffer agreed that the committee's evaluation had not been sufficiently objective, or at least that the evaluation did not adequately reveal that objective criteria were applied. She recommended to Clendenin that tangible factors be applied. She suggested that the most tangible factor was cost to the Department; and if cost was not a factor, that the committee should set out a detailed narrative statement in support of its conclusions that one bidder or another should receive more or less points in any given area of the evaluation. Clendenin interpreted these suggestions as meaning that all bidders should be awarded the same points in any area unless a specific cost to the Department could be identified so as to justify less points being given to any bidder. The committee conducted a second evaluation and concluded, based upon criteria directed by Clendenin, that the Intervenor's bid should be given 98 points, that Petitioner's bid should receive 90 points, and that the Bundschu bid should receive 81 points. Accordingly, the committee recommended that the lease be awarded to the Intervenor. This recommendation was accepted by the Department. Petitioner filed a timely bid protest, and this proceeding ensued. Chuck Bundschu, Inc., neither protested the bid award nor appeared in this proceeding. The Petitioner has contended that the bid submitted by Intervenor is not responsive to the specifications set out in the Invitation to Propose. The Invitation sets out the following evaluation criteria: The successful bid will be the one determined to be the lowest and best. All bids will be evaluated based on the award factors enumerated below: Provision of the adequate square footage in a single building. Proposals will be considered, but fewer points given, which offer the aggregate square footage in not more than two locations provided the facilities are immediately adjacent to or within 100 yards of each other. Intervenor has proposed to provide the required aggregate square footage in three buildings. Two of the buildings are presently occupied by the Department under the lease which will soon expire. They are separated only by a five- or six-foot-wide concrete walkway which is covered. To get from one building to the other, one must merely open one door, cross the sidewalk, and open another door. While these are more than one building, they effectively serve as a single location in the same sense that two floors in a single building serve as a single location. The third building in Intervenor's proposal is located across a parking lot from the other two buildings, within 100 yards of them. Intervenor proposes to meet the aggregate square footage required by the Department through three buildings. The three buildings constitute two locations, however, which are within 100 yards of each other. The proposal thus meets the bid evaluation criteria and is not unresponsive to the Invitation to Propose. The evaluation criteria set out in the Invitation to Propose delineates 12 separate areas to be evaluated and designates a weighted point value to be assigned each area. The highest number of points that could be given was 100. The first area for evaluation is "rental rate including projected operating expenses." Twenty-five points are assigned to this area. The Intervenor's bid offered the lowest rental rate. Over the 10-year period of the proposed leases, Intervenor's bid is between $84,000 and $85,000 lower than Petitioner's bid. In its first report, the evaluation committee gave Intervenor 25 points and the Petitioner 21 points. In its second evaluation, Intervenor was given 25 points and Petitioner 17 points. The second evaluation more objectively sets out the difference in rental rate between the proposals and constitutes an accurate appraisal of the difference between the rental rates proposed by Intervenor and Petitioner. Petitioner sought to establish at the hearing that the Department would incur additional operating expenses under Intervenor's proposal which would not be incurred under Petitioner's proposal. Petitioner offered the testimony of an employee of the electrical utility that serves the area to the effect that electrical utility charges would be greater for Intervenor's facility than for Petitioner's. The evidence is not, however, credible. The witness estimated Intervenor's utility charges by tracing the past history of charges for the two buildings presently occupied by the Department and assuming that the third building would incur utility expenses at the same rate per square foot. The Petitioner has proposed to construct a new building. The witness estimated utility charges that would be incurred at Petitioner's facility by utilizing accepted formulas. The comparison is not appropriate in an evidentiary sense because of the different techniques used to estimate charges for the two facilities. Furthermore, the witness's assumption that utility charges in the Intervenor's third building would be consistent with those in the other two is not valid because the third building would not be utilized on a daily basis. Finally, the theoretical computations for Intervenor's building cannot be credited because such services as heating and required equipment were not included in the estimate. Petitioner sought to establish that the Department would incur increased operating expenses under Intervenor's proposal because an additional employee would be required for Intervenor's facility. This contention is not supported by the evidence. The Department's activities are presently being undertaken in the Intervenor's two buildings that are separated only by a sidewalk, and no additional employees are required because of the configuration. Petitioner sought to establish that the Department would incur higher janitorial charges under Intervenor's proposal than under Petitioner's. A janitorial service made an estimate of the amounts that it would charge for the Petitioner's proposed building and for the Intervenor's existing three buildings. The estimate assumed that the third building would be utilized on a daily basis by the Department. The evidence establishes, however, that the building would be used on less than a daily basis and only for a portion of those days on which it is used. The janitorial service estimates are therefore based upon an unsupported assumption. The second area to be evaluated is "conformance of space offered to the specific requirements contained in the Invitation to Bid." Twenty-five points are assigned to this area. In its initial report, the evaluation committee gave the Intervenor 20 points in this area, and the Petitioner 25 points. In its second evaluation, both bidders were given 25 points. The first evaluation reflects a concern with the fact that Intervenor's proposal was to provide the required square footage in three buildings, while Petitioner proposed to construct a new facility and to offer the square footage in a single building. The second evaluation reflected the committee's inability to assign a specific dollar amount to the inconvenience that would be caused by utilizing three buildings instead of one. Clearly, there are inconveniences that would result from use of three buildings rather than a single building. The operation would be less compact and therefore less efficient. Petitioner's proposal met the specific requirements in the Invitation to Bid with precision as might be expected from a facility which is designed specifically with the Invitation in mind. As also might be expected, Intervenor's facility, which was not developed with this specific Invitation in mind, does not conform as specifically with the requirements of the Invitation. The initial evaluation giving the Intervenor 20 points and the Petitioner 25 points for this area appropriately reflects differences in the bids offered by Intervenor and Petitioner and accurately assesses the difference through the point system. The fourth area to be evaluated is "provision of the aggregate square footage in a single building." Ten points are assigned to this area in the Invitation. In its initial report, the committee gave five points to the Intervenor and 10 points to Petitioner. In its second report, Intervenor was given eight points and Petitioner 10 points. The second evaluation reflects a more objective appraisal of the disadvantages of the three-building complex offered by Intervenor as compared to the one-building complex offered by Petitioner. The first evaluation represented too harsh a view of the inconveniences that would result from the three-building proposal. Some members of the evaluation committee felt that an additional employee would be required, which is not the case. Furthermore, the third building proposed by Intervenor, which is located across a parking lot, would be utilized only for storage of old files and as a conference room. It would not be used on a daily basis, and this minimizes the inconvenience that would result from its being located across the parking lot. It is appropriate that the Intervenor be given eight points and the Petitioner 10 points for this area of the evaluation. The fifth area to be evaluated is "susceptibility of the design of the space offered to efficient layout and good utilization." In its initial report, the committee gave Intervenor three points and the Petitioner five points. In its second report, both Intervenor and Petitioner were given five points. The first evaluation too harshly downgrades the effect of three buildings, and the second evaluation gives too little weight to it. It is appropriate that Intervenor be given four points and Petitioner five points for this area of the evaluation. The twelfth area of the evaluation is "moving costs." Two points are assigned to this area in the Invitation. In both of its reports, the evaluation committee gave Intervenor two points and Petitioner no points for this area. Given the fact that no moving costs would be incurred under Intervenor's proposal, and costs would be incurred under Petitioner's, this appears to be an appropriate evaluation. The third and sixth through eleventh areas to be evaluated under the Invitation for Bid are "proximity to clients," "environmental factors," parking," "street-level space," "transportation," "dining facilities," and "proximity to other Department activities." The evaluation committee's reports varied in insignificant respects, but the evidence demonstrates that, objectively, the Intervenor's and Petitioner's proposals are equal in each of these areas. A total of 33 points is assigned to these areas under the Invitation. Both Petitioner's and Intervenor's bids meet the requirements in these areas set out in the Invitation, and both should be given 33 points. In its initial report, the evaluation committee gave Intervenor 83 points and Petitioner 87 points. In its second report, the committee gave Intervenor 98 points and Petitioner 90 points. The first report did not reflect an appropriate scoring because too much penalty was assigned to Intervenor's three-building configuration. The second evaluation did not adequately downgrade Intervenor's bid because of the three-building configuration. When the points set out in the above findings are added, Intervenor's bid is given 92 points and Petitioner's bid 90 points. This numerical assignment accurately reflects the differences between the bids and the advantages that would accrue to the Department for accepting one bid or the other. The reduced price of Intervenor's proposal and increased efficiency of Petitioner's render the proposals very nearly equal in value to the Department. By a very narrow margin, the Intervenor's proposal is the lowest and best bid in response to the Invitation to Propose for Lease No. 590:1526.
The Issue The issue in this case is whether the proposed award by the Division of Emergency Management (DEM) of the contract referenced herein to Everbridge, Inc. (Everbridge) is contrary to DEM’s governing statutes, rules or policies, or to the solicitation specifications.
Findings Of Fact On September 1, 2015, DEM posted RFP-DEM-15-16-037 (RFP), titled ”Florida Statewide Emergency Alert and Notification System,” on the state’s Vendor Bid System (“VBS”). The purpose of the RFP is to procure a statewide emergency alert and notification system as mandated by section 252.35(2)(a)(6) Florida Statutes, which requires the DEM to “[e]stablish a system of communications and warning to ensure that the state’s population and emergency management agencies are warned of developing emergency situations and can communicate emergency response decisions.” DEM is a separate budget entity established within the Executive Office of the Governor. Tara Walters, the purchasing manager for DEM, was responsible for the RFP and the procurement process. According to the RFP, the system is to be “vendor- hosted” and capable of proving “mass notification” of “imminent or sudden hazards” through voice telephone calls, text messages, emails, social media, and “Telecommunications Device of the Deaf/TeleTYpewriter (TDD/TTY)” systems. ECN and Everbridge are vendors of mass notification systems. Section 5 of the RFP provided, in relevant part, as follows: RESPONSIVENESS Vendor. In order to qualify as a responsive vendor as that term is defined by section 287.012(27), Florida Statutes, a Proposer must submit a proposal that conforms in all material respects to this solicitation. Proposal. In order to qualify as a responsive proposal as that term is defined by section 287.012(26), Florida Statutes, a proposal must conform in all material respects to this solicitation. The Division shall not consider any proposal that contains a material deviation from the terms of this solicitation. However, the Division reserves the right to consider a proposal that contains a minor deviation or irregularity so long as that minor deviation or irregularity does not provide a competitive advantage over the other proposers. The Division shall not permit a vendor to amend a proposal after the due date for submissions – even if to correct a deviation or irregularity. * * * A proposal may fail to qualify as responsive by reasons that include, but are not limited to: Failure to include a material form or addendum; Failure to include material information; Modification of the proposal specifications; Submission of conditional proposals or incomplete proposals; and, Submission of indefinite or ambiguous proposals. Section 28 of the RFP included specific proposal format instructions. Each proposal was to contain two parts: a “Technical Proposal” (Part I) and a “Price Proposal” (Part II). The RFP explicitly identified the contents to be set forth within each part. The Technical Proposal was to include multiple sections, including a table of contents, an executive summary, and a “Management Plan.” According to the RFP, the Management Plan was required to include four elements: the vendor’s relevant experience; significant examples of the vendor’s other clients and pertinent references; a project staffing plan; and a completed “data sheet,” the form for which was included in the RFP. The RFP also required that the Technical Proposal include a section identified as “Technical Plan/Minimum System Requirements” related to the “Scope of Work” necessary to implement the system. The referenced minimum requirements were explicitly set forth at Exhibit “A” to the RFP. Finally, the RFP required that the Technical Proposal include the vendor’s financial statements for the prior three years as follows: The Proposer shall provide information regarding its financial status in order to demonstrate that it is financially stable and has the resources necessary to perform the services outlined in this RFP on a statewide basis. Proposers are to include financial statements created in accordance with Generally Accepted Accounting Principles for the last three years. (Financial documentation may be combined into one file and are not included in the page count). The Division reserves the right to evaluate the financial status of any or all Proposers before making an award decision. The Price Proposal was to be submitted separately from the Technical Proposal by using the “Price Proposal Form” included in the RFP. According to the Schedule of Events set forth in the RFP, proposals were due on September 30, 2015. DEM received five proposals in response to the RFP. DEM determined that three of the proposals were not responsive, and they received no further evaluation. The two proposals that advanced into the evaluation process were those submitted by ECN and Everbridge. The RFP identified the process by which each proposal would be evaluated, including the formulas by which some scores would be calculated. Technical Proposals and Price Proposals were separately evaluated. The Technical Proposals were reviewed by a group of six evaluators, several of whom had extensive experience in emergency management and notification systems. The evaluators subjectively scored the three Management Plan elements pertaining to relative experience, examples/references, and staffing plan. Based on the evaluation, proposals could be awarded up to 30 points allocated between the referenced elements. The scores assigned by the evaluators to ECN and Everbridge for the three Management Plan elements were as follows: Evaluator ECN Everbridge Danny Hinson 13 30 Scott Nelson 30 30 Brian Misner 24 29 Phil Royce 29 27 Kevin Smith 24 25 Scott Warner 20 26 The fourth element of the Management Plan, the data sheet, was worth up to 20 points, and was scored through a formula included in the RFP. The data sheet required a vendor to identify a “guaranteed minimum number of concurrent recipient contacts” obtainable by various methods and timeframes. Using this formula, Everbridge received a data sheet score of 20 and ECN received a data sheet score of 3.99. An assertion by ECN that Everbridge cannot achieve the guaranteed minimums set forth on its data sheet was unsupported by evidence. The RFP specifically provided that the “Technical Plan/Minimum System Requirements” section of the Technical Proposal section would be evaluated on a pass/fail basis as follows: The minimum requirements of the system are broken down in to five (5) sections in the Exhibit “A”, Scope of Work, and are as follows: Minimum System Requirements, Minimum Geographical Information System Requirements, Minimum Notification Requirements, Minimum Security Requirements, and Minimum Support Requirements. Vendor’s responses shall state each requirement and detail how the system they are proposing meets or exceeds that requirement. This portion of your response is very important as proposed systems that do not meet each of the minimum requirements shall fail the Responsibility Requirements of the RFP and shall not be considered for additional review or scoring. Three of the six evaluators determined that ECN’s proposal failed to comply with all of the minimum requirements and accordingly failed to comply with the “Responsibility Requirements” of the RFP. Nonetheless, DEM completed the review and scoring of the ECN proposal. Price Proposals were reviewed and scored by Ms. Walters according to a formula specified in the RFP. Pricing was worth up to 10 points. Everbridge received a price score of 7 points. ECN received a price score of 10 points. There is no evidence that Ms. Walter’s review of the Price Proposals failed to comply with the applicable requirements of the RFP. At the conclusion of the evaluation process, Everbridge’s total score was 54.83 and ECN’s total score was 37.32. On October 19, 2015, DEM posted its Notice of Intent to Award the contract under the RFP to Everbridge. ECN filed a Notice of Protest on October 20, 2015. ECN filed a Formal Written Protest on October 30, 2015. ECN asserts that at least some of the Management Plan scoring deviated from the RFP and the instructions provided to the evaluators. ECN specifically asserts that the evaluations conducted by three of the evaluators included consideration of information extrinsic to the RFP and the vendor proposals, that the information was flawed, and that the scores awarded were therefore inappropriate. The evidence fails to establish that the evaluation of the Management Plan materially failed to comply with procedures or criteria set forth in the RFP. The evidence establishes that the individuals selected to evaluate the proposals understood the requirements of the RFP, and that they conducted their evaluations according to their understanding of the evaluation criteria at the time the evaluations were performed. The evidence further fails to establish that any alleged deficiencies in the evaluation process, even if established, would have altered the total scores sufficiently to change the intended award of the contract as set forth in the DEM Notice of Intent. ECN asserts that the Question and Answer process employed by DEM was irrational and materially impaired the competitiveness of the procurement process. Pursuant to the RFP, vendors were permitted to submit questions to DEM. On September 21, 2015, DEM posted the questions and the DEM responses, including this question submitted by ECN: If a prospective bidder utilizes third parties for completing the RFP requirements, shall the bidder’s service level agreements (SLAs) with those third parties be submitted within the proposal response? DEM’s posted response to the question was “Yes.” Everbridge did not include SLAs within its proposal. ECN asserts that DEM should have rejected the Everbridge proposal as nonresponsive because Everbridge failed to include SLAs in its proposal. ECN submitted SLAs within its proposal, although the SLAs submitted by ECN were unexecuted or incomplete. There is no requirement in the RFP that vendors submit SLAs as part of a response to the RFP. Section 15 of the RFP (titled “Oral Instructions/Changes to the Request for Proposal (Addenda)”) provided in material part as follows: No negotiations, decisions, or actions will be initiated or executed by a proposer as a result of any oral discussions with a State employee. Only those communications which are in writing from the Division will be considered as a duly authorized expression on behalf of the Division. Notices of changes (addenda) will be posted on the Florida Vendor Bid System at: http://vbs.dms.state.fl.us/vbs/main_menu. It is the responsibility of all potential proposers to monitor this site for any changing information prior to submitting your proposal. All addenda will be acknowledged by signature and subsequent submission of addenda with proposal when so stated in the addenda. DEM’s response to the question posed by ECN did not amend the RFP. DEM did not issue any notice of change or addenda to the RFP that required a vendor to include SLAs within a response to an RFP. ECN asserts that Everbridge is not a responsible vendor because Everbridge failed to comply with Section 18 of the RFP (titled “Qualifications”), which provided, in relevant, part as follows: The Division will determine whether the Proposer is qualified to perform the services being contracted based upon their proposal demonstrating satisfactory experience and capability in the work area. * * * In accordance with sections 607.1501, 608.501, and 620.169, Florida Statutes, foreign corporations, foreign limited liability companies, and foreign limited partnerships must be authorized to do business in the State of Florida. “Foreign Corporation” means a corporation for profit incorporated under laws other than the laws of this state. Such authorization should be obtained by the proposal due date and time, but in any case, must be obtained prior to posting of the intended award of the contract. ECN, a Delaware-incorporated limited liability company, complied with the referenced requirement. Everbridge, a Delaware-incorporated corporation, did not. Although Everbridge asserts that the statutes referenced in the requirement did not require it to be registered prior to the posting of the intended award, the issue is not whether Everbridge complied with state law, but whether Everbridge met the RFP’s qualification requirements. The RFP specifically provided that in order to qualify as a responsive vendor “as that term is defined by section 287.012(27) Florida Statutes,” proposals were required to conform in all material respects to the solicitation. The RFP provided as follows: The Division shall not consider any proposal that contains a material deviation from the terms of this solicitation. However, the Division reserves the right to consider a proposal that contains a minor deviation or irregularity so long as that minor deviation or irregularity does not provide a competitive advantage over the other proposers. The issue is whether the registration requirement was “material” to the RFP. It was not. The foreign corporation registration requirement was “boiler plate” language, apparently included by DEM in the RFP with little thought. Neither Ms. Walters, nor any other DEM employee, made any effort to determine whether the vendors that submitted proposals in response to the RFP complied with the requirement. The evidence fails to establish that the failure to comply with the registration requirement constituted a material deviation from the terms of the RFP. Everbridge obtained no competitive advantage over ECN or any other vendor through noncompliance with the registration requirement. ECN asserts that the Everbridge proposal was nonresponsive to the RFP because the Everbridge proposal included the following language: Legal Disclosure Everbridge's RFP response is provided for informational purposes and is not meant to form a binding contract for the provision of our critical communications suite. Upon request, Everbridge will engage in contract negotiations to execute a service agreement tailored to appropriately capture each party's applicable rights and obligations. ECN asserts that the cited language rendered the Everbridge proposal as conditional. The RFP provided that submission of a conditional proposal could result in a proposal being deemed nonresponsive. The evidence fails to establish that Everbridge submitted a conditional proposal in response to the RFP. Section 20 of the RFP (titled “Agreement Document”) provided as follows: The Division’s “Contract” document is attached hereto and made a part hereof. The terms and conditions contained therein will become an integral part of the contract resulting from this RFP. In submitting a proposal, the proposer agrees to be legally bound by these terms and conditions. One of the three submitted proposals rejected by DEM prior to evaluation was considered to be a conditional proposal, in part because the vendor struck through portions of the RFP in its response. Unlike that vendor, Everbridge unequivocally acknowledged, on page 127 of its response, the DEM’s “instructions regarding the terms and conditions that will ultimately form the service agreement between the state and its selected vendor.” Everbridge asserts that the ECN proposal failed to comply with the requirement that the Technical Proposal include “financial statements created in accordance with Generally Accepted Accounting Principles for the last three years,” and that the failure renders the ECN proposal nonresponsive. The evidence supports the assertion. The phrase “Generally Accepted Accounting Principles” (GAAP) refers to a set of financial reporting standards and procedures adopted by the Financial Accounting Standards Board (FASB), a private organization, and adopted throughout the accounting profession. Financial statements prepared in accordance with GAAP include what are commonly identified as “notes” that disclose extensive and relevant information supporting the financial analysis reported in the statements. The financial statements submitted by ECN did not meet the requirements of the RFP. Although ECN asserted at the hearing that the financial statements it submitted were prepared in accordance with GAAP, the financial statements submitted by ECN were incomplete because they failed to contain the requisite notes. The RFP required that the financial information provided by each vendor “demonstrate that it is financially stable and has the resources necessary to perform the services outlined in this RFP on a statewide basis.” The notes to ECN’s financial statements should properly have disclosed that the ECN statements contained financial information related to ECN subsidiaries, in addition to that of ECN. The absence of notes impeded determination of the reporting entity’s financial stability and resources. The Everbridge proposal fully complied with the requirement to submit financial statements prepared in accordance with GAAP and included the notes. ECN’s failure to submit financial statements meeting the RFP requirement is a material deviation from the terms of the solicitation that may not be waived because it provided a competitive advantage over other proposers who complied with the requirement. Everbridge also asserts that the ECN proposal is nonresponsive because three of the six evaluators determined that, for various reasons, ECN’s technical plan failed to meet the minimum requirements set forth in the Scope of Work. The RFP specifically provided that a failure to meet each of the minimum requirements would result in a proposal not being further reviewed or scored. Nonetheless, the ECN proposal was reviewed and scored.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Emergency Management enter a final order dismissing the First Amended Formal Written Protest and Petition for Formal Administrative Hearing filed by Emergency Communications Network, LLC, and awarding the contract to Everbridge, Inc. DONE AND ENTERED this 28th day of January, 2016, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 28th day of January, 2016.
The Issue The issue in this case is whether the proposed award of contracts by the Agency for Health Care Administration (AHCA) to Caremark, Inc. (Caremark), and Lynnfield Drugs, Inc., d/b/a Hemophilia of the Sunshine State (Lynnfield), pursuant to AHCA's Request For Proposal (RFP) 0507, was contrary to AHCA's governing statutes, AHCA's rules or policies, or the solicitation specifications.
Findings Of Fact AHCA is the state agency authorized to make payments for medical assistance and related services under Title XIX of the Social Security Act (the "Medicaid" program). There are approximately 250 Medicaid-eligible individuals ("beneficiaries") in Florida who have hemophilia. Hemophilia is a bleeding disorder caused by a deficiency in one of numerous clotting proteins or "factors" that contribute to the ability of a person's blood to clot. The disease is treated by administration of the deficient clotting factor to a person. The costs for hemophilia medicines ("factor products") and treatment for this relatively small group of beneficiaries are extremely high, estimated to be $46 million in 2005. Half of these costs are paid by Florida, half by the federal government. Section 287.057, Florida Statutes (2004),2/ requires an agency to make a written determination that an Invitation to Bid is not practicable for procurement of commodities or services prior to issuance of an RFP. On August 24, 2004, AHCA made the written determination that an Invitation to Bid was not practicable for procurement of the services called for in the MCHM program. Pursuant to Subsection 120.57(3)(b), Florida Statutes, a challenge to the terms and specifications of an RFP must be filed within 72 hours of notice of the posting of the RFP. There were no challenges filed to the terms and specifications of RFP 0507. RFP 0507 contemplates a statewide hemophilia management program that combines pharmaceutical management and disease management. Section 5.0 of the RFP identifies the two fundamental requirements for vendors responding to the RFP: The vendor must demonstrate that it has the capability to design, implement, monitor and evaluate a comprehensive hemophilia management program. The vendor must demonstrate that it has the experience in designing and implementing projects similar to the one prescribed in this RFP. Under the terms of the RFP, AHCA was to contract with up to three experienced vendors for a period of two years, with an option to extend the contract for an additional two-year period. Beneficiaries of the hemophilia services will be notified and instructed to choose one of the winning vendors or, for beneficiaries who do not make a choice, AHCA will assign a winning vendor on an equal, rotational basis. The RFP provides that the successful vendors will be paid on the basis of the factor products dispensed to eligible Medicaid beneficiaries. All other services required by the RFP must be delivered within the revenue provided by AHCA's reimbursement of factor product costs. Originally, RFP 0507 called for the submission of a technical proposal and a separate cost proposal. The cost to the State for the services provided was not to exceed the total cost of the factor products dispensed, discounted to the Average Wholesale Price (AWP) of the factor product, minus 39 percent. Cost proposals would have been scored separately from technical proposals, and then the two scores were to be combined to determine the ranking of the competing vendors. On January 21, 2005, prior to the deadline for responses to RFP 0507, AHCA issued Addendum 5 to the RFP, which eliminated the requirement for a separate cost proposal. All vendors were required to provide the technical services for the revenue they would receive under a reimbursement methodology set forth in Addendum 5. The reimbursement methodology makes AWP, minus 39 percent one of several measures of cost, the lowest of which determines the maximum reimbursement that Florida will pay the vendor. The change to RFP 0507 brought about by Addendum 5 did not change the fundamental nature of the RFP. Both the original RFP and the revised RFP created a competition among vendors to provide the best hemophilia management services to the State for a maximum cost. Addendum 5 changed the maximum cost from AWP, minus 39 percent, for factor products to a cost determined by the reimbursement formula. Under both the original RFP 0507 and the RFP as modified by Addendum 5, vendors could propose to provide factor products at a cost to the State lower than AWP, minus 39 percent. However, greater weight or importance would have been given to a proposal to provide factor products at a lower cost under the original RFP, because it called for cost proposals to be separately presented, evaluated, and scored. Based on the maximum scores attainable for the technical and cost proposals (1000 and 500, respectively), the cost proposal would have accounted for a third of a vendor's total score under the original RFP. Under the revised RFP, cost-saving measures offered by a vendor were relevant to only a few of the technical items in the RFP, such as those related to the management and dispensing of factor products. Even in the aggregate, these evaluation criteria allowed for the award of relatively few points for cost-saving measures contained in a proposal. AHCA received eight proposals in response to RFP 0507. One proposal was rejected by AHCA because it was determined to be non-responsive. The seven remaining proposals were made a part of the case record. Although RFP 0507 stated that up to three contracts would be awarded, AHCA decided to award contracts only to Caremark and Lynnfield. In a memorandum dated May 16, 2005, AHCA explained that "the points awarded indicate the top proposals scored significantly higher than the others. A difference of 124 points between the number two and the number three ranked proposal indicates a measurable difference in quality." The Organization of HHS's Proposal Section 6.0 of the RFP sets forth "Proposal Instructions." These instructions include a requirement to submit the proposal in a three-ring binder and to number the pages of the proposal. Another requirement imposed on the form of the proposal, as opposed to its content, was that the proposal had to use four tabs with specified titles. Tab 4 was to contain each vendor's technical response to the RFP. The RFP stated, "This is the most important section of the response with respect to the organization's ability to perform under the contract." Section 6.1E of the RFP describes the various categories of information that are required to be part of the vendor's technical response. There are eight general categories: Summary; Organizational Background and Experience; Project Staffing; Technical Approach; Innovations; Implementation Plan; Systems, Security and Confidentiality; and Certification Relating to Contracts. Some of these general categories were broken down further into separately numbered items of required information. For example, under the heading "Organizational Background and Experience," there are 11 numbered paragraphs describing the information required to be included in the proposal. Some of the numbered paragraphs are further divided into information requests identified by letter, such as item 9, which is divided into 23 information requests, lettered a through w. A logical manner in which to organize a proposal would be to present the information in the same order as the information is requested in the RFP, using the same headings, numbers, and letters that are used in the RFP. All the vendors, except HHS, organized their proposals so that the technical information required by Section 6.1E of the RFP was located under a divider or page labeled "Tab 4" or "Technical Proposal," and presented in the same order as the information was requested in the RFP. HHS's proposal has a "Tab 4" with a first page that includes the title "Technical Proposal" and begins with the required "Summary." Following the summary, however, HHS skips items 1 through 8 that were set forth in the RFP under the general category "Organizational Background and Experience" and presents a response to item 9. Then, HHS skips other items set forth in the RFP and presents information about "Innovations." At the end of HHS's Tab 4 is the heading "Additional Requested Information," followed by a list of seven appendices. Some of the information required to be in HHS's technical proposal is contained in these seven appendices. HHS's proposal included a table of contents that listed 31 other appendices, with subject titles, that contained more of the information that the RFP required to be included in each vendor's technical proposal. HHS chose to organize its proposal as it did because it believed the information it placed in the appendices was responsive to several parts of the RFP, and it would "irritate" the evaluators to see the same information repeated in several places. However, HHS's proposal did not always include notations that directed the evaluators to the appendices where relevant information was located. HHS acknowledged that it could have done "a much better job" in organizing its proposal. In the case of some items of requested information, very little effort was required for the evaluators to find the information in HHS's technical proposal. For example, it was relatively easy for an evaluator looking for information related to project staffing to find it in HHS's Appendix AG, entitled "Project Staffing." In other cases, however, greater effort was needed to find the information HHS says was relevant to a particular information request in the RFP. For example, HHS did not include behind Tab 4 a direct response to item 5 under "Organizational Background and Experience," which requests a detailed description of the vendor's organizational structure and ownership, and HHS did not refer the evaluator to a particular appendix. HHS contends the requested information is provided in Appendix AL, entitled "2004 Accredo Annual Report," which contains the Form 10-K for Accredo Health, Inc., HHS's parent company. Another example is HHS's response to item 8 under "Organizational Background and Experience," which requests a plan for the use of woman- or minority-owned businesses. HHS did not respond directly to this request under Tab 4 of its proposal, and its proposal merely contains a letter in Appendix AJ, entitled "Ethnically Diverse Utilization," from a woman-owned business to Accredo Health, Inc., acknowledging an existing relationship with HHS's parent company.3/ One of AHCA's evaluators said she gave HHS a score of zero for 27 evaluation criteria because she could not find the relevant information in HHS's proposal. The record evidence does not show that any other evaluator was unable to find information presented in HHS's proposal or failed to review the proposal in its entirety and score the proposal on its substantive merits. Whether HHS's Proposal Was Non-Responsive AHCA and the Intervenors claim that HHS's proposal was non-responsive to RFP 0507 because it does not include information required by Sections 7.2I and 7.2L of the RFP. Section 7.2 is entitled "Evaluation of the Mandatory Requirements of the Technical Proposal" and states in relevant part: During this phase, the Agency will determine if the technical proposal is sufficiently responsive to the technical requirements of the RFP to permit a complete evaluation. In making this determination upon opening the technical proposal, the overseer(s) will check each technical proposal against the following list: * * * Does the proposal include a table of contents listing sections included in the proposal and the corresponding sections of the RFP to which they refer? * * * L. Does the technical proposal include a description of the vendor's corporate background and experience at the level outlined in Section 6.1E of the RFP? Section 7.3 states that only those technical proposals determined to meet the mandatory technical requirements set out in Section 7.2 will be further evaluated. Presumably, AHCA determined that HHS's technical proposal included all mandatory requirements, because the proposal was not rejected. The table of contents in HHS's proposal accurately describes the information that is presented in its proposal. However, it does not list all the headings and information items as they appear in the RFP. There are over 30 itemized information requests in Section 6.1E related to the vendor's background and experience. HHS's proposal included information about its corporate organization and experience. However, the organization of the proposal made some of the information difficult to find. Sandra Berger, the AHCA employee who has coordinated contracts and procurements for the Medicaid program, stated that AHCA's policy regarding the review of RFPs is that the evaluator is to review the entire proposal; and if information is not found where it should have been presented, the evaluator will look elsewhere in the proposal for the information. AHCA's expectation is that the evaluator will read every sentence in every paragraph of each proposal. AHCA's Consideration of HHS's Guarantees HHS contends that three cost-saving measures that it offered in its proposal were not considered at all or not fairly considered by the evaluators. HHS offered an "assay management guarantee," an emergency room visit guarantee, and an outdated product guarantee. Because clotting factors are proteins or "biologics," the manufacturers of factor products cannot create a precise potency; they can only target potency. In the same sense that ore is assayed to determine its content of gold or other mineral, factor products are assayed to determine their content of clotting factor (potency). A manufacturer of factor products will generally produce products with low range, mid-range, and high-range potencies. Even within a targeted range, there will be variances of potency between particular vials of product that are dispensed. The recommended potency for some hemophilia treatments, such as a prophylactic regimen, is less than for others, such as for break-through bleeding. Therefore, "assay management" for factor products is a fundamental component of the current treatment of hemophilia. AHCA has established 105 percent as a threshold for evaluation of assay management. That means AHCA has an expectation that the factor dispensed to a patient will generally deviate less than five percent above the factor assay or potency prescribed for the patient by the physician. The 105 percent figure is a monitoring and evaluation threshold, not an absolute maximum. The State is required to pay for factor products exceeding the 105 percent threshold if they were medically necessary. HHS offered an "assay management guarantee" to repay AHCA on a quarterly basis for the cost of factor product that exceeded 102 percent of the target dose. Based on an HHS study done with 56 patients, the guarantee would have created a cost savings of $154,000. If a similar savings rate were realized for the approximately 250 Medicaid-eligible hemophilia patients in Florida, the savings would be approximately three times greater. Caremark also offered an assay management guarantee, but structured differently. However, AHCA does not view this particular type of guarantee as necessarily beneficial. AHCA believes it could create an incentive for the provider to withhold care, not based on medical considerations, but on financial considerations. A provider might reduce factor products dispensed to the patient in order to avoid exceeding a guarantee and having to repay the State. HHS also offered an emergency room visit guarantee so that AHCA would not have to pay for unnecessary emergency room visits. HHS defined unnecessary emergency room visits as those caused by the patient not having the correct amount or type of factor or a sufficient amount or type of infusion "ancillaries." HHS offered to credit AHCA $500 for each unnecessary visit. Another cost-saving measure offered in HHS's proposal was to replace outdated product without cost to AHCA. AHCA did not dispute that these two cost-saving measures would be of benefit to the State. No evidence was presented regarding the estimated value of the benefit. Few of the evaluation criteria for RFP 0507 related directly to the cost-saving measures offered by HHS. HHS presented information about its assay management guarantee in items 9.j and l, under "Organizational Background and Experience." Information about HHS's outdated product guarantee was presented under item 9.k. Information about HHS's emergency room visit guarantee was presented under item 9.v. The maximum score that HHS could have received for these four items was 20 points, out of a total score of 1000 for all criteria.4/ The Scoring Criteria For purposes of evaluation and scoring of proposals, AHCA formed the technical requirements of the RFP into 50 separate criteria, each worth from zero to 10 points, for a maximum possible score of 1000 points. The scoring scale for the 50 criteria was as follows: Points Vendor has demonstrated 0 No capability to meet the criterion 1-3 Marginal or poor capability to meet the criterion 4-6 Average capability to meet the criterion 7-9 Above average capability to meet the criterion 10 Excellent capability to meet the criterion Each of the 50 criteria was set forth on a separate evaluation sheet used by the evaluators. Each evaluation sheet identified from where in the RFP the criterion came. The 50 criteria in the evaluation sheets, however, did not correspond to 50 evaluation criteria, identified as such, in the RFP. RFP 0507 rarely uses the term "criteria." Instead, the itemized information requests in the RFP are alternately referred to as "instructions" (Section 6.0), as "specifications" (Section 6.1E), and as "requirements" (Section 7.3). In seven instances, two or more itemized information requests in the RFP were combined to form one criterion on an evaluation sheet. An example is page 13 of the evaluation sheets that grouped together items 9.e, f, g, and h, under "Organization Background and Experience." Judith Saltpeter, the AHCA employee who was principally responsible for the creation of the evaluation sheets, grouped these items together because they all related to vendor assistance to "physicians, specialists and other providers." Another example is the combination of items 9.j, k, and l into one criterion for scoring on page 15 of the evaluation sheets. These three items were combined by Ms. Saltpeter because they were all related to the vendor's proposed handling of factor products. There were two instances in which a single information request in the RFP was divided into more than one criterion for scoring on the evaluation sheets. For example, the evaluation criteria on pages 25, 26, and 27 of the evaluation sheets are derived from a single paragraph of the RFP under "Project Staffing": 2. Identification of staff along with details of training and experience of those individuals who will serve as the Project/Contract Manager, Clinical Pharmacist Coordinator, and Care Management Coordinator. Resumes and relevant licensure of all identified/named staff shall be included in an appendix to the proposal. AHCA made each of the three positions named in this paragraph a separate criterion for evaluation and scoring because of the perceived importance of these positions to the quality of the vendor's performance. The 50 evaluation criteria used for RFP 0507 were almost identical to the 50 evaluation criteria used for RFP 0403, in which HHS participated. Section 7.3 of the RFP, entitled "Evaluation of Technical Proposals," states in relevant part: Only those technical proposals determined to meet the technical requirements of this RFP will be further evaluated. Evaluation of technical proposals will involve the point scoring of each proposal by component specified in the RFP. The Agency will evaluate the extent to which the services offered in the proposal and the procedures and methods for performing such services meet the requirements of the RFP. For this purpose, evaluators will judge a vendor's description and explanation of the services it will perform to meet the service requirements of each component. Included in Addendum 5 to RFP 0507 and made a part of the RFP are "Agency Responses to Bidders' Questions," which include questions asked by the vendors at the vendors conference held prior to submittal of proposals and AHCA's answers. Two questions and answers are relevant here: Question: How will scoring for the technical proposal be evaluated? Do some [technical] questions have higher weight: If so provide weighting. Answer: All technical items have equal weight. Question: What specific factors will be used for the technical proposal evaluation pursuant to Section 7.3 of the RFP? What will be the relative weight of each factor? Answer: Equal consideration will be given to all items found under Section 6, excluding 6.3 Cost Proposal Requirements and 6.4, Cost Proposal Instructions. The organization of the technical requirements of the RFP into itemized lists and AHCA's statements to the vendors that "All technical items have equal weight" and "Equal consideration will be given to all items found under Section 6," communicated to the vendors a scoring process that was not followed by AHCA. There is nothing in the RFP that informs prospective vendors of the scoring process that was actually used. The combining and dividing of the information requirements in the RFP for scoring purposes affected their relative importance, but no prospective vendor would know from reading RFP 0507 that some of the requirements of the technical proposal would be combined for scoring and other requirements would be divided for scoring. No prospective vendor would know which items in the RFP would be worth up to 10 points, which items were worth only 1/3 or 1/4 as much and which items were worth twice as much. There is no evidence that AHCA acted arbitrarily or capriciously in combining and dividing the technical requirements of the RFP to create the 50 evaluation criteria. There was a rationale behind the combinations and divisions. However, RFP 0507 did not indicate the relative importance of the criteria. Their relative importance was only determinable by reviewing the evaluation sheets, which were not made a part of the RFP. Nevertheless, HHS failed to demonstrate that this error by AHCA made any difference to the contract awards under RFP 0507. The combining and dividing of technical requirements affected all vendors equally. Adjusting the scores so that every itemized technical requirement from the RFP is given equal value would not change the rankings. For example, if an evaluator gave a score of "5" for a criterion that was created from four requirements set forth in the RFP, the score was adjusted to 20 (four times five), and this kind of adjustment was made to all scores for all affected criteria, HHS would still finish in sixth place. Even if the actual scores might have varied from the adjustment just described, there is no evidence to explain how the variance could be more than de minimus or could change HHS's ranking. A related issue concerns item 3 under "Project Staffing" and item 20 under "Technical Approach," also related to staffing, that did not become evaluation criteria for scoring purposes. HHS claims that AHCA's decision to not make these items evaluation criteria was prejudicial to HHS because its proposal regarding project staffing was superior to what was offered by the other vendors. However, if these two items had become two evaluation criteria, they would have been worth a maximum of only 20 points. Even assuming that HHS had been given the highest points by all four technical evaluators for these two items, HHS's ranking would not have changed. Scoring by the Evaluators The four AHCA employees who evaluated the technical proposals were Linda Barnes, a registered pharmacist (Scorer "A"); Maresa Thomas, a registered nurse (Scorer "B"); Bruce McCall, who holds a doctorate in pharmacy (Scorer "C"); and Nancy Knox, a registered nurse (Scorer "D"). Kay Newman, a certified public accountant, reviewed only the financial information provided by the vendors. The evaluators were each provided a copy of the seven proposals, the original RFP, Addendums 5 and 11 to the RFP, an evaluation packet, and a conflict of interest form. The technical evaluators were given an instruction sheet and verbal instructions for evaluating the technical proposals. The instruction sheet distributed to the evaluators provided that the evaluators "should" justify their scores in the "comments" section of the score sheets. Some of the evaluators made comments, others did not. Each evaluator worked independently. The evaluators did not confer with each other or with anyone else during their evaluation of the proposals. The evaluators conducted their evaluations over a period of three weeks. Because each evaluator worked independently, the scores on each proposal differed. It can be expected, and was true in this case, that some evaluators will generally assign lower scores than other evaluators; some evaluators will tend to assign higher scores. There was no evidence that any evaluator for RFP 0507 was inconsistent in the application of his or her scoring approach to all proposals. In addition to the points awarded by the technical evaluators for the 50 criteria, each proposal also received "Financial Audit" points (between one and ten) from Kay Newman. Ms. Newman scored the seven proposals as follows: Caremark 9 Lynnfield 9 AmeriHealth 0 OptionCare 8 Maxim 8 HHS 9 PDI Pharmacy 4 Points were also assigned to the vendors based on telephone "reference reviews" conducted by AHCA employees Hope Chukes and Patricia Morena. Two references were selected for each vendor from the references listed in the proposals. The reviewers used a form with questions related to whether the vendor had fulfilled its obligations under previous contracts. In most cases, three points were given to the vendor when the reference reported that the vendor had performed the particular obligation; otherwise, a score of zero was given. The maximum score that could be obtained for the reference review was 19 points. Some questions on the reference review form were not relevant to the previous contract between the vendor and the reference organization. In those instances, Ms. Chukes was directed to give vendors a score of "3" for the question, rather than penalize the vendors with a score of zero. Because the reference reviews indicated that all vendors had performed their obligations under previous contracts, AHCA gave all vendors the maximum total score of 19. Following the conclusion of the technical evaluations, Ms. Chukes tallied the scores from the four technical evaluators, the financial audit scores from Ms. Newman, and the reference review scores. The resulting total scores and ranking of proposals were as follows: 1 Caremark 1437.2 2 Lynnfield 1384.9 3 AmeriHealth 1207.83 4 OptionCare 1107 5 Maxim 964.3 6 HHS 889.3 7 PDI Pharmacy 774.55 There are some fractional scores, because Ms. Thomas (and only Ms. Thomas) scored multi-part criteria by initially assigning a score to each subpart, using the zero-to-ten scale, and then averaging the result. Although this scoring approach would have caused a variance, in some cases, from the score that Ms. Thomas would have assigned if she had simply scored the criterion as a whole, the variance would have been de minimus. It would not have changed HHS's ranking. For reasons not explained in the record, AHCA manipulated the raw scores by averaging them, assigning the highest ranked vendor a score of 1000, and dividing the average scores of the other vendors by 1000. These manipulations did not change the ranking that resulted from the total raw scores as indicated above. None of the evaluators ranked HHS higher than fourth. One evaluator ranked HHS fourth, one ranked HHS fifth, and two ranked HHS seventh (last). Scoring by Ms. Thomas Ms. Thomas assigned HHS's proposal a zero for 27 of the 50 evaluation criteria. In her notes on the evaluation sheets and in her testimony at the hearing, Ms. Thomas explained that she gave HHS zeroes because she could not find HHS' responses for these criteria, and she assumed they had been omitted. For example, because she did not see information under Tab 4 of HHS's proposal numbered 1 through 7 to correspond to paragraphs 1 through 7 of the RFP, she assumed that the information had been omitted from HHS's proposal. Ms. Thomas did not always look through HHS's entire proposal to determine whether the information she expected to see in Tab 4 was located in an appendix or elsewhere. When she did not find information where she expected it, she often made a notation "nothing presented" on the evaluation sheet and assigned a zero for the criterion. There was no evidence that any other evaluator did the same. The other three evaluators apparently looked through HHS's entire proposal, found the relevant information, and assigned points for each criterion based on their review of the information. As stated above, AHCA's policy regarding the review of a proposal is that the evaluator is to review the entire proposal and, if information is not found where it should have been presented, the evaluator will look elsewhere in the proposal for the information. AHCA's expectation is that the evaluator will read every sentence in every paragraph of each proposal. There is no evidence that Ms. Thomas was biased either for or against any particular vendor. However, it was the duty of the evaluators to read each proposal in its entirety. Nothing in the RFP instructions authorized the evaluators to ignore information in a proposal if it were in the "wrong" place. In most cases, the information Ms. Thomas claims she could not find required little effort to find and was found by the other three evaluators. Ms. Thomas' failure to consider all the information presented in HHS's proposal when assigning scores under the 50 evaluation criteria was contrary to agency policy. Her assignment of a zero to HHS in 27 categories was arbitrary. However, HHS failed to demonstrate that, but for the arbitrary scoring by Ms. Thomas, HHS would have been awarded a contract under RFP 0507. If all of Ms. Thomas's scores are deleted, HHS still ranks sixth. If all of the zeroes that Ms. Thomas gave HHS were converted to tens, HHS would only move up to fourth place and would still not win a contract under RFP 0507. HHS complained of other aspects of the evaluation process used for RFP 0507, such as the separate financial audit performed by Ms. Newman and the reference review. However, HHS failed to prove that if all these alleged errors by AHCA were eliminated, HHS would have been a winner under RFP 0507.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Heath Care Administration enter a final order awarding contracts under RFP 0507 to Caremark, Inc., and Lynnfield Drugs, Inc. DONE AND ENTERED this 2nd day of December, 2005, in Tallahassee, Leon County, Florida. S BRAM D. E. CANTER 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 2nd day of December, 2005.
The Issue Did Respondent Department of Labor and Employment Security (Department) properly reject the response submitted to the Department's Request For Proposal No. RFP 96-033-VA, For Computer Hardware and Related Equipment Maintenance Including Operating Software (RFP) by Petitioner Knaus Systems, Inc. (Knaus)? Did the Department provide Knaus with a clear point of entry to challenge the Department's decision, and, if so, did Knaus timely file its notice of protest or formal written protest?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: On January 29, 1996, the Department issued an RFP which requested a Vendor Technical Proposal (technical proposal) and a Vendor Cost Proposal (cost proposal). Knaus was on the Department's bidder's list and received a copy of the RFP around the end of January, 1996. Knaus is engaged in the business of selling and servicing computer hardware, and currently has nine contracts with the State of Florida in response to requests for proposals. As required by Rule 60A-1.002(9)(a), Florida Administrative Code, the original RFP contained the Department of Management Services' Form PUR 7033, revised 1/9/95, (cover sheet), which in pertinent part provides: PROPOSALS WILL BE OPENED 3:00 P.M., MARCH 19. 1996 and may not be withdrawn within 30 days after such date and time. POSTING OF PROPOSAL TABULATIONS Proposal tabulations with recommended awards will be posted for review by interested parties at the location where proposals were opened and will remain posted for a period of 72 hours. Failure to file a protest with- in the time prescribed in Section 120.53(5), Florida Statutes shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. Posting will be on or about MARCH 21, 1996 In pertinent part, Sections 2 and 5 of the RFP provide: 2.1 RFP Submission Date Vendors shall submit their proposals on or before the date and time indicated in Section 5.9 and to the location indicated in Section 5.12 of this Request For Proposal. * * * 2.5 Addenda All addenda to this Request For Proposal will be in writing, with content and number of pages described, and sent to all Vendors known to be in receipt of this Request For Proposal. The Vendor must acknowledge receipt of all addenda in in writing and submit with the Proposal. * * * 5.1 Bid Evaluation and Award Proposals which do not meet the requirements specified in this Request for Proposal will not be considered for award. Please return your sealed bid response in the enclosed self-addressed envelope labeled: BID: RFP 96-033-VA TIME: 3:00 p.m. DATE: March 19, 1996 The Proposal number must be clearly marked on the outside of the vendors submittal. Failure to identify a Proposal in the above prescribed manner shall result in automatic disqualification of the Proposal. * * * 5.9 Calendar of Events Listed below are the important date and times by which actions noted must be taken or completed. If the Department finds it necessary to change any of these dates or times, the change will be accomplished by addendum. Date/Time Event February 13, 1996 Written Vendors Inquiries Due February 22, 1996 Pre-proposal Conference (Vendor attendance is mandatory) February 28, 1996 Addenda issued by Department March 19, 1996 Opening of Vendor 3:00 p.m Technical Proposals April 2, 1996 Opening of Vendor 10:30 a.m. Cost Proposals April 4, 1996 Posting of RFP Award * * * Responsiveness and Rejection of Proposals All proposals must be in writing. A responsive proposal is an offer to perform the scope of services called for in the Request For Proposal. A Proposal may be rejected if it fails to meet the general requirements and mandatory specifications as stated in this Request for Proposal. . . . Submission of Proposals Sealed proposals must be received by the Department of Labor and Employment Security at the address noted below, on or before the date and time shown in Section 5.9 "Calendar of Events". . . . * * * The vendor must submit both a technical proposal for evaluation and a cost proposal. Both proposals must be in a separate sealed envelope and clearly marked on the outside stating technical proposal or cost proposal Both proposals must be delivered as stated above. * * * Proposals, including amendments, may be mailed or hand-delivered, but in either case must be received no later than 3:00 P. M. on March 19, 1996. . . . NUMBER OF COPIES: 1 original and 5 copies for each category bid SUBMIT TO: Vonnie Allen -- DLES Computer Maintenance, Department of Labor and Employment Security, 2012 Capitol Circle S.E. 104 Hartman Building, Tallahassee, Florida 32399-2169 DEADLINE: March 19, 1996 at 3:00 p.m * * * 5.16 Posting of Recommended Award Proposal tabulation with recommended award will be posted for review by interested parties at the Department's Office of Purchasing on or about the date noted on the cover sheet of this RFP, and will remain posted for a period of seventy-two (72) hours, not including weekends or holidays. [Emphasis supplied] In accordance with the initial RFP, the technical and cost proposals were to be submitted in separate sealed envelopes within a single envelope to the Department on or before 3:00 p.m. on March 19, 1996, which was also the date for opening the technical proposals. All vendors, including Knaus, understood that for their response to the RFP to be timely both the technical proposal and the cost proposal had be received by the Department on or before 3:00 p.m. on March 19, 1996, the time and date scheduled for opening the technical proposals set out in Section 5.9. The date (March 21, 1996) shown on the cover sheet of the RFP for posting proposal tabulations with recommended awards is different from the date (April 4, 1996) shown in Section 5.9 of the RFP for posting RFP award. It is unclear whether these are two separate events requiring separate dates or a conflict as to the posting date. In accordance with the terms of the RFP, the Department conducted a mandatory Pre-proposal Conference on February 22, 1996. Knaus was represented at this conference. Questions raised by Knaus and other vendors at this conference necessitated an amendment to the RFP. On March 13, 1996, the Department issued Addendum [No.] 1 to the RFP, a copy of which was received by Knaus. In pertinent part, Addendum [No.] 1 provides: March 13, 1996 Addendum: [No.] 1 Bid: [No.] 96-033-VA Opening Date/time: March 19, 1996, changed (Technical) to April 2, 1996 April 2, 1996 changed to April 16, 1996 (Cost) Dear Sir or Madam: The subject Request for Proposal is hereby amended as follows: * * * 5.1, 5.9, 5.12 RFP Technical Opening is to be changed from 3:00 p.m. on March 19, 1996 to 3:00 p.m. on April 2, 1996. The Cost Opening is to be changed from 10:30 a.m. April 2, 1996 to 10:30 a.m. April l6, 1996. Addendum [No.] 1 did not amend or delete the requirement of the RFP that the technical and cost proposals be sealed in separate envelopes and both envelopes to be placed in the self-addressed envelope furnished with the RFP and submitted to the Department. All vendors, other than Knaus, relying only on the RFP and Addendum [No.] 1 concluded that both the technical and cost proposal were to be submitted on or before the opening of the technical proposal and therefore, submitted their technical and cost proposals on or before 3:00 p.m. on April 2, 1996. None of the vendors, including Knaus, submitted their response to the RFP on or before March 19, 1996, the original submittal date for responses and the original opening date for technical proposals. The Department received Knaus' technical proposal on April 1, 1996, and Knaus' cost proposal on April 5, 1996. On April 11, 1996, Vonnie Allen, the Department's Purchasing Specialist, telephoned Anthony J. Knaus, President and Chief Executive Officer for Knaus, to advise him that the Knaus proposal was non-responsive because the Department had not received both the technical and cost proposal before the opening of the technical proposals at 3:00 p.m. on April 2, 1996. During this telephone conversation, Anthony Knaus expressed his understanding of Addendum [No.] 1 as not requiring receipt of the cost proposal by the Department before the opening of the technical proposal at 3:00 p.m. on April 2, 1996. After his conversation with Vonnie Allen on April 11, 1996, Anthony Knaus wrote Allen a letter advising her that based on Addendum [No.] 1 that Knaus intended to file a protest in regards to the RFP. On April 15, 1996, Anthony Knaus again wrote Allen a letter in regards to the April 11, 1996, telephone conversation advising Allen that he had not received written notification from the Department of Knaus' noncompliance with the RFP but that Knaus would proceed with the protest. The letter further advised Allen that Knaus intended to file a formal protest. On April 19, 1996, Barbara Chance, Purchasing Director for the Department, wrote Knaus a letter advising Knaus that its response to the RFP was non-responsive due to the cost proposal not being submitted as stated in the RFP, and returning Knaus' certified check that had been submitted with its proposal. No further explanation of the basis for this determination was included in the letter. Likewise, there was no notice of Knaus' right to challenge the Department's determination as required by Section 120.53(5)(b), Florida Statutes, and Rule 60A-1.001(7) and (8), Florida Administrative Code. On April 23, 1996, the Department issued what is titled "NOTIFICATION [No.] 2" concerning Cost Opening Date which advised Responsive Vendors that the cost opening had been moved to 9:00 a.m. on April 24, 1996, and such opening was to be held at the Hartman Building, 2012 Capital Circle, Southeast. The letter further advised the Responsive Vendors that posting of the intended award would be "approximately Thursday, April 25, 1996 at 9:00 a.m.". Since the Department did not consider Knaus a responsive vendor, Knaus did not receive a copy of "NOTIFICATION [No.] 2". Knaus was never advised by the Department of the change in dates for the posting of intended award prior to or during the time of posting. On April 25, 1996, Dennis H. McVeen, General Manager for Knaus, wrote the Department's General Counsel concerning Barbara Chance's letter of April 19, 1996, and requested that Knaus be advised of the exact deadline for filing its protest. The Department never responded to this letter. The Department did not respond to any of Knaus' letters, and has yet to advise Knaus of its right to contest the Department's determination that because Knaus' cost proposal was not received by the Department on or before the opening of the technical proposal at 3:00 p.m. on April 2, 1996, Knaus' response to the RFP was non-responsive . On April 25, 1996, the Department posted the bid tabulations for the RFP, which, in pertinent part, states: "FAILURE TO FILE A PROTEST WITHIN THE TIME PRESCRIBED IN SECTION 120.53(5). FLORIDA STATUTES, SHALL CONSTITUTE A WAIVER OF PROCEEDINGS UNDER CHAPTER 120, FLORIDA STATUTES." The Bid Tabulation indicated a Posting Time/Date from 8:00, 4/25 until 8:00, 4/30. The Bid Tabulation does not indicate whether 8:00 was a.m. or p.m. However, Allen testified that it was intended to be a.m. Knaus was listed on the Bid Tabulation as to "Technical only" and was shown as NR or non-responsive. The Department has not fully evaluated Knaus' response to the RFP. Knaus obtained a copy of the Bid Tabulation sometime after 8:00 a.m. on April 30, 1996, which was after the time for posting. Obtaining a copy of the Bid Tabulation was the result of Knaus' own efforts and cannot be attributed to any efforts on the part of the Department. Knaus filed its Petition For Administrative Proceedings, Notice of Protest and Formal Written Protest on May 13, 1996, with the Department. Knaus did not file a Notice of Intent to Protest or Formal Protest addressed to the specifications contained in the RFP or Addendum [No.] 1. There was no evidence that Knaus gained any advantage by submitting the cost proposal after the technical proposals were opened. There is sufficient evidence to establish facts to show that Knaus knew or should have known that the RFP as amended by Addendum [No.] 1 required that both the technical and cost proposal be submitted together on or before April 2, 1996.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law it is recommended that the Department of Labor and Employment Security enter a final order that Knaus' failure to timely submit its cost proposal was a minor irregularity and is waived, and directing staff to reevaluate all responses, including Knaus', under the RFP, as amended. RECOMMENDED this 24th day of July, 1996, at Tallahassee, Florida. WILLIAM R. CAVE, 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 24th day of July, 1996. APPENDIX TO RECOMMENDED ORDER CASE NO. 96-2365BID The following constitutes my specific rulings, pursuant to Section 120.59(2), Florida Statutes, on all of the proposed findings of fact submitted by the parties in this case. Knaus' Proposed Findings of Fact. Proposed findings of fact 1 through 37, 44, 45 and 47 are adopted in substance as modified in Findings of Fact 1 through 25. Proposed findings of fact 38 through 43 go to the weight of the testimony of witness and are not considered as proposed findings of fact. Proposed finding of fact 46 is neither material nor relevant. Proposed finding of fact 48 is covered in the Preliminary Statement. Department's Proposed Findings of Fact. 1 Proposed findings of fact 1 through 14 and 16 through 21 are adopted in substance as modified in Findings of Fact 1 through 25. 2. Proposed finding of fact 15 is neither material nor relevant. COPIES FURNISHED: Douglas L. Jamerson, Secretary Department of Labor and Employment Security Suite 303, Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152 Edward A. Dion, General Counsel Department of Labor and Employment Security Suite 307, Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152 Daniel H. Thompson, Esquire Berger and Davis, P.A. 215 South Monroe Street, Suite 804 Tallahassee, Florida 32301
Findings Of Fact ICF Kaiser Engineers, Inc. is a foreign corporation authorized to do business in Florida. KE Realty Services, Inc. is a Florida corporation which has its principal place of business in Fort Lauderdale, Florida. On February 26, 1993, the Department issued a RFP to solicit offers on the SR 7 contract. This RFP was identified as RFP-DOT-92-93-4008. Proposals submitted in response to the request were to be opened March 26, 1993, and the bid tabulations were to be posted on April 29, 1993. Four vendors submitted proposals in connection with the subject RFP: the Petitioners; Gulf Coast Property Acquisition, Inc. (Gulf Coast); The Urban Group; and Keith and Schnars, P.A. Each proposal was scored based upon four criteria: technical plan; price; certified DBE; and executive judgment. The points available for each were preset and known to all vendors. The technical plan could receive a maximum of 75 points, price could receive 20 points, and each of the other criteria could receive 5 points. Obviously, the technical plan portion was the more weighted criterion. The technical plan portion of each vendor's proposal was evaluated by a Technical Review Committee (TRC). This committee consisted of Claire Tronel, Kevin Szatmary, Steve Gonot, Lynda Parsons, Van Neilly, and Cheryl Balogh. The membership of the TRC was not kept secret and Petitioners knew, and perhaps other vendors as well, who would be evaluating the proposals. Each member of the TRC scored the proposals independently. The average of all of the independent scores for each proposal was then computed as the technical plan score. The vendors received the following technical plan scores: Petitioners a 67.42; Gulf Coast a 56.79; The Urban Group a 36.42; and Keith & Schnars a 29.71. To determine the price score, the lowest priced proposal received the maximum number of points (20). The other proposals received a fraction of the twenty points available based upon the relation of their price to the lowest price. According to the formula, Keith & Schnars received the highest price score (20), then The Urban Group (17.20), Gulf Coast (15.60), and finally, Petitioners (10.60). Petitioners received the lowest price score because it submitted the highest priced proposal. The ratio of its price with the lowest priced proposal multiplied by 20 resulted in the 10.60 score. The scores for the DBE criterion are not in dispute but were assigned as follows: Petitioners, 5.0; Gulf Coast, 5.0; The Urban Group, 0.0; and Keith & Schnars, 2.0. The TRC did not know the prices submitted with the proposals until it had completed the technical scores for each vendor. The final criterion, executive judgment, was determined by the Selection Committee which consisted of: Rick Chesser, James Wolfe, and Joseph Yesbeck. This committee considered two factors in assigning its five points. First, the vendor's ability to do the work; and second, the cost of the work. The scores for executive judgment were: 0 for The Urban Group and Keith & Schnars because their technical proposals were poor; 1 for Petitioners because, while their technical proposals were good, their price was high; and 5 for Gulf Coast. Following tabulation of all criteria scores, the vendors were ranked as follows: Petitioners with 84.02; Gulf Coast with 82.39; The Urban Group with 53.62; and Keith & Schnars with 51.71. On April 29, 1993, the Department posted the foregoing tabulation and its intent to award the SR 7 contract to Petitioners on May 3, 1993. Thereafter, allegations of impropriety and/or conflict of interest were raised by an unsuccessful vendor. The claims were: that members of the TRC had family members who were either employed by or under contract to Petitioners; that Petitioners had conversations with Department employees prior to the submission of the proposals regarding a revised Department budget for the SR 7 contract; and that an employee of the Department served as the registered agent for Petitioners. Gulf Coast met with the Department and alleged that improprieties had occurred or conflicts of interests existed that had affected the technical evaluation of the bids. Based upon the allegations, the Selection Committee decided to avoid the appearance of any impropriety and to rescind the intent to award to Petitioners and to reject all proposals submitted. The decision reached by the Selection Committee was hurried as the Department believed it was bound, by law, to reach such decision before 8:00 a.m., May 4, 1993. A complete investigation into the truthfulness of the charges was not finished prior to the imposed deadline. On May 5, 1993, the Department posted its formal notice of its intent to reject all proposals. The basis for such decision was "perceived improprieties in the selection process and possible conflict of interest." There were no actual conflicts of interest in the review of the subject proposals. Further, there were no actual improprieties in the proposal review or scoring. With regard to the allegations related to family members employed by Petitioners, no such conflict existed. Claire Tronel's husband has a contract with Petitioners unrelated to any of the issues of this case. Such contract is well-known in the industry and was known to the vendors prior to the assessment of these proposals. Further, the Department knew of such relationship prior to Ms. Tronel being selected for membership on the TRC. Mr. Tronel is not an officer, partner, director, or proprietor of either Petitioner. Nor does he have a direct or indirect ownership interest in more than a five percent of the total assets or capital stock of either company. Ms. Tronel had refrained from serving as a scoring member of earlier technical review committees because of her husband's contractual relationship. Ms. Tronel's supervisor was aware of the relationship Mr. Tronel had to Petitioners and did not consider his limited business relationship to be a conflict. Ms. Tronel was chosen to serve on the TRC because of her experience in right-of-way services, and the relative lack of experience of some of the other committee members. Before serving on the TRC, Ms. Tronel consulted with the district general counsel in order to determine whether her participation would violate Florida Statutes or the Department's ethical standards. After receiving advice and making same known to her supervisors, it was decided Ms. Tronel should serve as a committee member. The contractual relationship between Mr. Tronel and Petitioner did not effect Claire Tronel's evaluation of the proposals. In fact, if the scores assigned by Ms. Tronel to the technical plans of each proposal were subtracted from the average scores, the margin between Petitioners' technical score and the next highest score would widen. Ms. Tronel showed no favoritism or bias in favor of Petitioners. Gulf Coast did not complain about improper conflicts related to their proposal yet Michael Sheridan, the son of TRC member Linda Parsons, is employed by O.R. Colan, an appraisal firm which was listed as a subcontractor in Gulf Coast's proposal. Perhaps Gulf Coast did not complain about Ms. Parsons' membership on the TRC because Ms. Parsons' relationship to Michael Sheridan is also widely known in the vendor community. Petitioners knew of such relationship but did not dispute the accuracy or fairness of Ms. Parsons. If Ms. Parsons' score were deleted from the scoring, Gulf Coast would have received the highest score. Ms. Parsons, who is the chief review appraiser, generally serves on the technical review committee for projects which include appraisal services. Since her son became an employee of O.R. Colan, Ms. Parsons has served on technical review committees which evaluated proposals submitted by O.R. Colan and those submitted by vendors who listed O.R. Colan as a subcontractor. Michael Sheridan is not an officer, partner, director, or proprietor of either Gulf Coast or O.R. Colan and does not own, either directly or indirectly, more than five percent of the total assets or the capital stock of either company. While Ms. Parsons has been instructed not to serve on technical review committees in the future when her son is reflected as a participant in one of the proposals, she has not been instructed to refrain from participating whenever her son's employer participates in a proposal. Ms. Parsons showed no favoritism toward Gulf Coast in her evaluation of the proposals. The facts do not support even an appearance that Ms. Parsons showed any favoritism toward Gulf Coast. Ms. Tronel and Ms. Parsons did not disregard their public duties in favor of a private interest. Therefore, no impropriety by reason of their participation resulted. The Department's decision to rescind the award to Petitioners and to reject all bids was also premised, in part, on concerns regarding contacts between Petitioners and the Department employees before proposals were submitted. Petitioners contacted the Department to ask questions because during the course of preparing its proposal an issue of pricing became apparent. An inconsistency between the amounts that they were developing for the project and the amounts reflected in the Department's work program budget for the project became obvious. Because of the disparity between the Department's budget for the project and the prices that Petitioners developed, Mr. Thomas became concerned that he was misinterpreting the RFP. Mr. Thomas called the Department and spoke, first, to Van Neilly and, subsequently, to Claire Tronel about his concerns. Ms. Tronel confirmed that all services, including appraisal, were to be included in the proposals submitted. Ms. Tronel did not tell Mr. Thomas that the Department intended to revise its budget for the project, nor did Mr. Thomas tell Ms. Tronel or Mr. Neilly what Petitioners' price for the SR 7 proposal would be. Subsequently, the Department did revise its budget for the SR 7 contract by forty to fifty percent. The revised budget exceeds the price bid by Petitioners. The Department's work program budget is a public document which lists all of the projects planned by the Department for a five-year period and includes the Department's price estimate for each project. Petitioners submit bids for Department projects and normally submit proposal prices which exceed the Department's budget. Petitioners normally submit proposals which are highly ranked for their technical quality. It was not improper for Petitioners to ask the question regarding the inclusion of appraisal services and it was not improper for a Department employee to confirm that appraisal services were to be included in the project. It is common practice for vendors to call Department employees before the submittal of proposals. However, vendors are warned not to rely upon information which is not provided to them in writing. In addition, it would be improper for a Department employee to share information with one vendor, which could be advantageous to that vendor, without also providing the information to all other vendors. Petitioners received no information which gave them an advantage over the other vendors. Rick Conner is a Department employee who was, until recently, the resident agent for KE Realty Services, Inc. Mr. Conner served in this position without compensation. He was not involved in any way in the RFP or the evaluation of the subject proposals. His role as resident agent had no effect on the scoring of proposals, and was not a factor in the Department's decision to rescind the award to Petitioners. There was no evidence offered at the hearing to suggest that the relationship between Rick Conner and KE Realty gave the appearance of impropriety. Petitioners expended approximately $40,000 in the preparation of the proposal; and, if there is a rebid, will incur additional amounts to prepare a new proposal. Petitioners hired additional employees for the SR 7 contract, so that it could report in its proposal that it had the staff on hand to begin work immediately. If the SR/7 Contract is not rebid until late 1993 or early 1994, the opportunity to recoup the overhead expenses associated with these additional employees will be lost. In addition, Petitioners' ability to rebid is adversely affected by the Department's decision since Gulf Coast made a copy of the proposal and may now benefit from the technical ideas and suggestions developed by Petitioners.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Department of Transportation enter a final order awarding job no. 86100-3576/2508 for the SR 7 project to Petitioners. DONE AND RECOMMENDED this 17th day of September, 1993, 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 17th day of September, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-3034 Rulings on the proposed findings of fact submitted by the Petitioners: 1. Paragraphs 1 through 23, 25, 26, 28, 29, 31 through 48, 50, 51, and 53 through 61 are accepted. Paragraph 24 is rejected as a statement of law, not fact. Paragraph 27 is rejected as irrelevant. The first sentence of paragraph 30 is accepted; the remainder rejected as irrelevant. Paragraph 49 is rejected as irrelevant. Paragraph 52 is rejected as argument or comment. Rulings on the proposed findings of fact submitted by the Respondent: Paragraphs 1 through 17, 21, and 22 are accepted. While paragraphs 18 through 20 accurately state the rationale expressed by the selection committee (one member of which changed his opinion after a thorough review of the facts), the ultimate facts expressed by the paragraphs (for example, that there was an appearance of impropriety) are rejected as not supported by the weight of the credible evidence. Not one person from the public or from the other vendors testified. The Department took the unfounded allegation of an unsuccessful bidder (not even corroborated at trial) as proof that an appearance of impropriety existed. Paragraph 23 is rejected as argument, conclusion of law, or contrary to the weight of credible evidence. Paragraph 24 is rejected as contrary to the weight of credible evidence. Paragraph 25 is rejected as irrelevant or argument. Paragraph 26 is rejected as irrelevant or argument. The first two sentences of paragraph 27 are accepted; the remainder rejected as irrelevant or argument. Paragraphs 28 and 29 are rejected as argument. Paragraph 30 is rejected as contrary to the weight of the credible evidence. Paragraph 31 is rejected as argument and contrary to the weight of the credible evidence. Paragraph 32 is rejected as argument. COPIES FURNISHED: Paul Sexton Assistant General Counsel Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0450 Martha Harrell Chumbler CARLTON, FIELDS, WARD, EMMANUEL, SMITH & CUTLER, P.A. First Florida Bank Building 215 South Monroe Street, Suite 500 Post Office Drawer 190 Tallahassee, Florida 32302 Ben G. Watts, Secretary Department of Transportation ATTN: Eleanor F. Turner, Mail Station 58 Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0458 Thornton J. Williams General Counsel Department of Transportation 562 Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0458
The Issue The issue to be resolved in this proceeding concerns whether the rejection of Petitioner Compaq Computer Corporation's (Compaq) submission in response to an invitation to negotiate #01/02-31 for the Child Support Enforcement (CSE) Automated Management Systems (CAMS) case management informational technology system is "clearly erroneous, contrary to competition, arbitrary or capricious." Embodied within that general issue are the considerations of whether the proposal by Compaq was responsive and whether the submittal by Compaq of a "Form 7105," with the absence of the vendor certification purportedly required on the front, or first page of that form, and the signature by the representative of Compaq in a signature area designated for an agency representative is a material irregularity.
Findings Of Fact The Petitioner, Compaq, is a Texas Corporation. It is authorized to do business in the State of Florida. The Respondent, DOR is a state agency charged with the responsibility of administering the Child Support Enforcement Program for the State of Florida in accordance with Section 20.21(h), Florida Statutes. The DOR issued an Invitation to Negotiate (ITN) for the CAMS compliance enforcement implementation on February 1, 2002. This procurement is designed to give the DOR a "state of the art system" that will meet all Federal and State regulations and policies for Child Support Enforcement, improve effectiveness of collections of child support and automate enforcement to the greatest extent possible. It will automate data processing and other decision support functions and allow rapid implementation of changes in regulatory requirements resulting from updated Federal and State regulation policies in Florida initiatives, including statutory ones. The ITN provided for a multi-phased process to be followed by negotiations with the selected proposers. The first phase of review consisted of a review of mandatory items. There followed evaluations of key proposal topics, management and technical and cost items. The top scoring proposers would then be invited to make oral presentations which would also be scored and which would then be followed by negotiations. The Department of Management Services has promulgated several forms with the designation "PUR" followed by a numerical reference. The numerical reference corresponds to the procurement methodology being used for the particular procurement at issue. For instance, the PUR 7105 is for invitations to negotiate. The other PUR forms identified in Rule 60A-1.002(7), Florida Administrative Code, are PUR 7028 for invitations to bid for commodities, PUR 7031 for invitations to bid for contractual services, PUR 7051 for requests for proposals for commodities, and PUR 7033 for requests for proposals for contractual services. Section 7.2.1.3 of the ITN advises proposers that the State of Florida invitation to negotiate acknowledgement form, PUR 7105 must be signed and included with the original of a proposer's package. It also notified the proposers that this form would be provided with the ITN on the DMS Vendor Bid System (the internet). "DMS" refers to the State of Florida Department of Management Services which maintains the Vendor Bid System referred to by the ITN. Form PUR 7105 is a purchasing form developed and produced by the Department of Management Services. When downloading the form PUR 7105 from the Vendor Bid System (VBS) on the internet, the first page containing the vendor information, certification and signature space, is not identified as being the first portion of form PUR 7105. The second and third pages, with the title "General Conditions" are the only ones denoted as being part of form PUR 7105. Compaq became aware that the procurement was going to proceed and began assembling a staff in order to be prepared to respond to the procurement and submit a proposal. Michael Angeley was designated project manager of the Global Services Division of Compaq to head the evaluation of the ITN for Compaq and to be in charge of preparation of Compaq's response to the ITN. As indicated above, the availability of the ITN was posted on the internet and made available on the VBS of the DMS. When accessing the ITN by computer, the applicable computer screen, which first becomes available, advises the viewer to "click here to view the bid specifications." If the viewer clicks "here," the first document which comes up on the screen is an unnumbered form, identified by its Universal Resource Locator (URL) line as follows: http://fen.state.fl.us.owa_vbs/owa/vbs_www.boiler_plate.show? boiler_plate_key_str=1129. At the bottom of the unidentified form, is the direction to "click here for additional required files." If the viewer clicks for additional required files at the bottom of the unidentified form, a document identified as "Downloadable Files for ITN-CAMS Compliance Enforcement Implementation" appears on the screen. The "Downloadable Files" screen provides a list of filed documents, and an indication of their type, with a check mark beside each file and a notation at the bottom of the page which states that a check mark "indicates required file." The first file document on the "Downloadable Files" screen is described as "General Conditions," with the "Type" indicated as PUR 7105, and a check mark indicating that it was a required file. If the viewer clicks to download the file designated as PUR 7105, a two-paged document entitled "General Conditions" appears in the Adobe Acrobat format with the statement at the bottom of each page that it is "PUR7105Rev.6/1/98." Michael Angeley, as Project Manager for Compaq, journeyed to Tallahassee to a pre-proposers conference. In response to statements by DOR representatives at the pre- proposers conference, Mr. Angeley went directly to Compaq's office in Tallahassee and downloaded the PUR 7105 form which was identified as such on the list of required files. In doing so, Mr. Angeley followed the procedure set forth in paragraphs 9-13 above. The Petitioner's Exhibit three, which the Respondent asserts is the first page of form PUR 7105, is not part of the "Downloadable Files for ITN-CAMS" which is listed as "required" on the VBS screen. Compaq did not download the first page or include it in its proposal response. Compaq perceived the downloaded document entitled "General Conditions" as the correct form based on its designation as such on the form and from the URL which reads: "http://fcn.state.fl.us/fcn/centers/purchase/vbs/ pur7105.pdf." After downloading the files indicated as required on the VBS, Mr. Angeley placed the entire document in a separate system file on his local network, and thereafter did not have to access the documents through the original process. Mr. Angeley, along with four other Compaq representatives, attended the mandatory pre-proposers conference that was held in Tallahassee on February 13, 2002. At the pre-proposers conference, which was attended by over 100 persons, questions which had been previously asked of DOR in writing, were answered in writing and a hand-out containing the answers was provided to each attendee. No additional questions were permitted at the pre-proposers conference. At that conference a DOR representative (Ms. Phillips) held up a document in front of the audience and advised the attendees that the form, identified by her as PUR 7105, needed to be included in the proposal. The document held up to the audience was not handed out, nor was it clearly visible to all attendees at the pre-proposers conference. Compaq representatives in attendance at the pre-proposers conference understood that form PUR 7105 was required to be included in the proposal package and, therefore, made no further inquiry regarding the form. Compaq's belief was that it was following the directions provided by DOR with regard to form PUR 7105, including those received at the pre-proposers conference and as contained in the ITN and the other computer accessible documents. That belief has been shown to reasonable under the circumstances. Compaq Vice President Kevin French signed the signature line on the only signature line available on the downloaded portion of form PUR 7105 in Compaq's possession. Mr. French had the authority to bind Compaq to the terms and conditions listed on the form. The signature of Mr. French on form PUR 7105 and in three other places in the submittal, including the transmittal letter, was intended by Compaq to and did bind it to the terms and conditions of the ITN. No unfair or competitive advantage was obtained by Compaq by signing the last page of form PUR 7105 by mistake, instead of the first page which it had not downloaded, consisting of the "Acknowledgement Form." The Evaluation Process The evaluation of proposals submitted in response to the ITN was designed to be a multi-stepped process. The evaluation was conducted by a review committee comprised of representatives from DOR's Purchasing Division and from the CSE Division as well as from DMS. The relevant portions of the evaluation process consist of the following steps: 8.1 Evaluation Process Proposers are responsible for thoroughly reviewing all ITN requirements to ensure that the proposal and the proposed approach are fully compliant with ITN requirements and approach are fully compliant with ITN requires and thereby avoid the possibility of being ruled non-compliant. FDOR will evaluate and score proposals with the following methodology that is more fully described in the following subsections. FDOR will: Perform Mandatory Items Compliance Evaluation to validate proposals against the mandatory items listed in Table 8-1. Proposals that do not respond to all mandatory items will be rejected and not considered further. Score Key Proposal Topics to ensure a proposal achieves the minimum acceptable score for these key topics before the effort is expended to fully evaluate it. Proposals that fail to achieve a minimally acceptable score for these key topics will be rejected and not considered further. (Emphasis supplied) The minimum score for the second step of the evaluation process was 150 points out of a possible 230. Section 8.1.1. of the ITN, "Table 8-1 (Selected Mandatory Items) lists 24 separate items in question format, with a reference to the ITN setting forth the location of the requirement. The Steering Committee selected the 24 items listed as mandatory but did not rank the items as to importance because all were considered mandatory. Section 2.3.8 of the ITN states as follows: 2.3.8 Rejection of Proposals FDOR will reject a proposal that FDOR deems to have a material defect. A material defect is any part of the proposed solution that violates a mandatory requirement and results in an unacceptable system or unacceptable risk. FDOR will reject proposals that fail to pass the Mandatory Items Compliance Evaluation (see Section 8.1.1). FDOR will reject proposals that include, in proposal Volume 3 (Contract), contract wording identified as mandatory by the proposer that is unacceptable to FDOR (see Section 7.4.1.2). FDOR will reject proposals that fail to achieve the minimum acceptable score for Key Proposal Topics (see Section 8.1.2). FDOR reserves the right to reject any and all proposals received if FDOR determines such action is in the best interest of the State of Florida or FDOR. Item 12 on Table 8-1 queries, "Did the proposer submit a PUR 7105 form signed by an authorized representative?", with a reference to ITN 7.2.1.3. Section 7.2.1.3 of the ITN states as follows: 7.2.1.3 State of Florida Invitation to Negotiate Acknowledgement Form, PUR 7105 The proposal shall include a form PUR 7105, completed and signed. The form will be provided with the ITN and the DMS Vendor Bid System. The original form PUR 7105 must be included with the Original/Master Copy (copy one) of Volume 1 of the proposal. Ms. Barbara Phillips, a purchasing specialist with DOR who was assigned to duties as an initial evaluator of the proposals, created a check list for the initial screening process and selected items 1, 2, 6, 8, 11, and 12, from the list of 24 "Mandatory Items" on Table 8-1. If a proposal received a negative ranking, indicated by an "N" as to one of the items on the check list, no further evaluation was done on the proposal. Seven proposals were submitted to DOR in response to the ITN. Compaq's proposal was the only proposal rejected as not responsive by DOR. Compaq's proposal was rejected on the basis of Compaq's failure to include a complete form PUR 7105 as part of its proposal and for signing the last page of form PUR 7105 on the line marked for the "Authorized Agency Signature" instead of on the first page. The confusing manner in which the information regarding form PUR 7105 was presented in the VBS substantially contributed to Compaq's inclusion of only two of the three pages of form PUR 7105 in its proposal. Once the decision was made to reject Compaq's proposal on the basis of form PUR 7105, evaluation of the proposal was stopped. Compaq's proposal was not scored in the second step of the evaluation process relating to Key Proposal Topics, therefore, it is not known whether it would have received the minimum score of 150 in order to proceed further in the process. Covansys Corporation submitted a proposal which was deemed responsive by DOR even though only the first unnumbered page of what DOR refers to as an "Acknowledgement Form" was included in its proposal and not the "General Conditions" which are listed as "Required" in the VBS system. Accenture, LLP submitted a proposal which was deemed responsive by DOR even though it made a notation on the Acknowledgement Form: "Subject to Accenture's Exceptions and Reservations in Volume 3, Section 1." The only difference between signing at the end of the two page "General Conditions" document listed in the VBS system as: "PUR FORM 7105" and not signing the "Acknowledgement Form" is that the vendor does not make a representation of non- collusion. However, the agency's representative made it clear that this provision is subject to negotiation and that the signature did not actually bind the vendor to that certification. When Accenture was deemed responsive and moved to the next stage of the evaluation process, the DOR reviewers did not check and did not know how many of the General Conditions were subject to Accenture's exceptions and reservations, nor the extent of the exceptions and reservations. In fact, they did not know whether or not Accenture agreed to any or all of the terms and conditions provided on form PUR 7105. Unisys submitted a proposal which was deemed responsive by DOR even though several Mandatory Items including Volumes 1 and 2 of the electronic copy (CD) of its proposal, as well as the Microsoft Project Plan, were not submitted. TIER submitted a proposal which was deemed responsive by DOR even though the reviewers found that Mandatory Items were not submitted in accordance with the directions in the ITN and despite the reviewers' determination that the documentation submitted from the Secretary of State's Office regarding its corporate status had expired. KPMG submitted a proposal which was deemed responsive by DOR even though the reviewers stated on the evaluation form that KPMG did not comply with certain Mandatory Items listed on Table 8-1.
Recommendation RECOMMENDED that a final order be entered by the State of Florida Department of Revenue deeming Compaq's proposal to be responsive to the Invitation to Negotiate and entitled to proceed to the next step in the evaluation process. DONE AND ENTERED this 23rd day of September, 2002, in Tallahassee, Leon County, Florida. P. MICHAEL RUFF Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with Clerk of the Division of Administrative Hearings this 23rd day of September, 2002. COPIES FURNISHED: O. Earl Black, Esquire Department of Revenue Post Office Box 6668 Tallahassee, Florida 32399-0100 David W. Moye, Esquire Fowler, White, Gillen, Boggs, Villareal, and Banker, P.A. Post Office Box 11240 Tallahassee, Florida 32302 Bruce Hoffman, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 James Zingale, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
Findings Of Fact Respondent, St. Johns Water Management District, is a special taxing district authorized by law to perform various water resource duties and is empowered to hire and terminate employees. As an employer, the District has developed an employment policy which states in pertinent part: VII. ACTS OF MISCONDUCT AND WORK STANDARDS VIOLATIONS FOR DISTRICT EMPLOYEES The following acts of misconduct and violation of work standards will subject an employee of the District to disciplinary action: 15. Insubordination - An employee may not willfully or deliberately refuse to comply with a direct order or any established work assignment of an immediate supervisor or higher level supervisor unless such order or assignment would result in an immediate danger to the health and safety of the employee or others. STANDARDS OF DISCIPLINARY ACTION The following standards are established to insure the District is consistent in taking disciplinary actions against employees involved in similar situations. The recommended disciplinary action is normally the penalty which should be imposed. However, circumstances may make a greater or lesser action more appropriate than the one suggested. Realizing that some of the offenses and deficiencies listed will be more serious and more frequent in certain cases, the District shall utilize good judgement in light of all available facts in each case. Secondary and subsequent offenses have a cumulative effect and justify greater penalties. An offense need not be similar in nature to an earlier offense in order to have such cumulative effect. The disciplinary action should be based on an overall evaluation of conditions and severity of the violations. The standard of discipline for the first occasion of insubordination is a written reprimand, suspension up to three days or dismissal. The standard for the second event of insubordination is dismissal. Teresa Brun was employed by the District from July of 1988 to February 25, 1992. From April 1989 to February 25, 1992, Ms. Brun held the position of contract administrator in the water resources section of the District. As a contract administrator, she, along with four other contract administrators, oversaw various purchasing contracts for the District which the District was in the process of letting out for bid. Ms. Brun had also been assigned to work on drafting a new contracts policy manual and drafting standard forms for the new manual. Performance of clerical duties associated with the various purchasing contracts assigned her were not part of Petitioners established work assignment. Ms. Brun's supervisor was Mr. Jadwin, the contract supervisor. The water resources contract section had a secretary who, during the time period relevant to this proceeding, was Betty Anderson. Ms. Anderson had limited experience in the water resources section since she had been employed in the section since October or November 1990. Ms. Anderson's function was to perform clerical duties for the section's supervisor and contract administrators, including Ms. Brun. In essence, Ms. Anderson was supposed to work with the contracts administrators and perform the secretarial functions of the office as instructed by the contracts administrators. Her duties included, among other things, working with the bid files, maintaining a list of bidder's addresses (bidders' list), and typing and preparing bid tabulation sheets. Ms. Brun as well as other contract administrators did take materials to Ms. Anderson and instruct her how to prepare various materials and bid documents required by the contracts office. Ms. Anderson was a slow learner and was difficult to get along with. However, Ms. Brun felt that since Ms. Anderson had been employed for approximately three months, it was time for Ms. Anderson to learn to utilize the bid files and computer files containing bidder's addresses in order to gather the information she needed to prepare bid documents and materials without being spoon fed the information. In short, Ms. Brun legitimately expected Ms. Anderson to perform as past section secretaries had performed. On Friday, January 25, 1991, Ms. Anderson received a note from Ms. Brun asking Ms. Anderson to prepare a standard "Notice of Intent" to issue a contract on a particular bid which was to go before the Board for adoption. A "Notice of Intent" includes a cover letter, bid tabulation sheet and a Notice of Rights. The complete package is then mailed to the bidders who expressed an interest in the bid. Ms. Brun prepared the cover letter and standard Notice of Rights and requested Ms. Anderson to mail the Notice of Intent to all the bidders. Ms. Brun informed Ms. Anderson that the bid tabulation sheet was in the bid file. Ms. Anderson wrote a note back to Ms. Brun requesting that she furnish the "pertinent information" needed to complete the assignment. Ms. Anderson's request for information appears to refer to the bid tabulation sheet and the addresses of interested bidders to whom the Notice of Intent should be sent. 1/ The note from Ms. Anderson was deposited in Ms. Brun's in-basket. On Monday, January 28, Ms. Brun saw Ms. Anderson's note and responded with a note telling Ms. Anderson that the information she sought was in the bid file and she should get it herself. Following the note exchange, Ms. Brun and Ms. Anderson talked over the problem of preparing the Notice of Intent and bid addresses in a meeting initiated by Ms. Anderson about problems with the addresses for this bid. Ms. Brun told Ms. Anderson to go into her contract files and secure the information. Ms. Anderson refused to go into the bid files to find the bid tabulation sheet and refused to print out an address list from her computer file. Ms. Anderson's reply was that if she had to get the information, it would not get done and that she would wait and talk to Mr. Jadwin. Ms. Anderson left the file on Ms. Brun's desk and would not, as instructed by Ms. Brun, take it with her. Ms. Anderson made her refusal in front of another contracts manager, Cindy Gilmore. Ms. Anderson's refusal to comply with the requests of Ms. Brun were only explained as "territorial concerns." However, Ms. Anderson did eventually learn that part of her job was to get information out of the bid files and to utilize the address information she maintained in her directory. Following this impasse, Ms. Anderson went to Mr. Jadwin, who was the mutual supervisor of both Ms. Brun and Ms. Anderson. Mr. Jadwin agreed with Ms. Anderson's position and, told Ms. Anderson that he would talk to Ms. Brun. However, Ms. Anderson asked if she could work it out herself because she wished to develop effective working relationships with the contract administrators. Mr. Jadwin agreed and Ms. Anderson returned to Ms. Brun and asked to speak about the needed materials. Ms. Anderson informed Ms. Brun that Mr. Jadwin thought it was fair that Ms. Brun get the bid tabulation sheet out of the file and give it to Ms. Anderson. Ms. Brun still angry over Ms. Anderson's refusal to perform her secretarial duties refused to discuss the matter further and told Ms. Anderson to "just write in a memo what you will do and what you will not do." Mr. Jadwin later asked Ms. Anderson how her meeting with Ms. Brun had gone. She replied things had not gone well and she was writing the memo requested by Ms. Brun. Mr. Jadwin told her not to write the memo and that he would "take care of it." Ms. Anderson then got the bid file for the first time, went through it, and could not find the bid tabulation sheet. The yellow cards with the bidder's addresses as well as green cards from bidders who had submitted bids were in the file. Ms. Anderson then took the file to Mr. Jadwin and he searched for the bid tabulation sheet and could not find it. The bid tabulation sheet had been removed from the bid file and had been placed in a standard information-packet to the Board. This packet was known as Board back-up. Ms. Brun was unaware that the bid tabulation sheet had been removed from the bid file. On the other hand, the information to recreate the bid tabulation sheet was in the file. Additionally, the bid tabulation sheet was readily findable by any thinking secretary or individual who had become familiar with office procedures. On January 31, 1991, Mr. Jadwin approached Ms. Brun. 2/ This was the first time in these events that an immediate supervisor had addressed Ms. Brun on the bid tabulation sheet and address list. The meeting took place in Ms. Brun's office which was next to Ms. Anderson's desk. Ms. Anderson was seated at her desk and could hear the conversation. All the witnesses agree that Mr. Jadwin asked Ms. Brun if Ms. Anderson had typed a certain bid tabulation sheet. Ms. Brun replied affirmatively. Mr. Jadwin then informed Ms. Brun for the first time that neither he or Ms. Anderson could locate the bid tabulation sheet in the file. Mr. Jadwin asked Ms. Brun to help Ms. Anderson out and give Ms. Anderson the information to type another bid sheet. Ms. Brun said she would. Mr. Jadwin then began to broach the subject of the addresses. He said, 'About the address,' "We've had some problems with the address on that." Ms. Brun replied that she was "not the only person who makes problems with the bids." Mr. Jadwin started to say something else and Ms. Brun cut him short and said, "Why don't you just address everything that you need to me in a memo." Mr. Jadwin again began to say something else but Ms. Brun stated "Bob, I'm not going to argue with you," got up, put the bid file in the file cabinet and walked out of her office. Clearly, Ms. Brun terminated Mr. Jadwin''s conversation with her. Whether the termination was abrupt and cut short what Mr. Jadwin wanted to say, depends on the particular witnesses point of view. However, Mr. Jadwin did not object to the conversation's termination and did not ask or order Ms. Brun to stay. No instructions were given to Ms. Brun in regards to the addresses because she exited her office. However, Ms. Brun's behavior while rude and perhaps contemptuous toward Mr. Jadwin was not insubordinate conduct on her part. That afternoon Ms. Brun learned for the first time that some bid packages had been returned because the party to whom they had been addressed was not located at the address to which the packages had been mailed. Ms. Brun took the returned packages to Mr. Jadwin. Later that same afternoon, Ms. Brun furnished the bid tabulation sheet to Ms. Anderson. Ms. Anderson retyped the bid tabulation sheet which had caused so much trouble. After typing the bid tabulation sheet, Ms. Anderson came into Ms. Brun's office and asked where the bidder's list was. Ms. Brun told Ms. Anderson the list was in the file. Ms. Anderson replied that the list "just won't get done," and threw the bid file on Ms. Bruns desk. Ms. Brun put the file back in Ms. Anderson's work tray. Ms. Anderson said the file would "just stay there." The following day, Ms. Brun sent out a partial Notice of Intent. On Friday, February 1, approximately 2 days after Mr. Jadwin's conversation with Ms. Brun, Mr. Jadwin wrote Ms. Brun a note. The note states: To: Teresa From: Bob Subject: Notice of intended award Walkways - Clay Island Date: 2-91 I have asked you to supply Betty with the list of addresses to which to send the above Notice. Betty has had to re-type the Bid summary sheet that was lost from your file. 3/ If you choose to continue to refuse this request please explain your reasons immediately to Mr. Payton. As of Monday, 2/4/91, your refusal has held this 'Notice' up for one week. Please do not delay in getting this done. Bob The note was placed in Ms. Brun's in-basket on February 1. However, she did not receive Mr. Jadwin's note until Monday morning, February 4. Ms. Brun stated she did not give Ms. Anderson the list of addresses upon receiving the note because the note was in error about being instructed to furnish the addresses to Ms. Anderson and because her interpretation of the note was not as a directive to produce the addresses but as an option of going to Mr. Payton because she would in essence be doing Ms. Anderson's job for her. Ms. Brun decided to go to Mr. Payton. Given the inaccuracies in the note and its tenor, Ms. Brun's interpretation was reasonable under the circumstances of this case. Ms. Brun printed out a copy of Ms. Anderson's directory which included the file for the bidder's list and immediately went to Mr. Payton. There is conflict in the testimony over what occurred at this meeting. Ms. Brun's version is that Mr. Payton sided with her and told her to go back to Ms. Anderson and tell her that the file was in the computer and explain the file to her. Mr. Payton denies this version, saying that he had discussed the matter during the previous week with Mr. Jadwin after the walkout and that he (Mr. Payton) then told Ms. Brun to provide the address list to her supervisor without getting upset and to go and ask Ms. Anderson what information she needed and provide that information. Except as set forth Ms. Brun's hearing testimony that Mr. Payton sided with her against her immediate supervisor is deemed not credible. Ms. Brun returned from Mr. Payton's office and told Ms. Anderson that Mr. Payton had directed her (Ms. Brun) to tell Ms. Anderson what she was to do with the file for the addresses and that the address file was in the computer. Mr. Jadwin overheard the conversation with Ms. Anderson and intervened because it was not consistent with what had been previously told to him by Mr. Payton. Mr. Jadwin then directed Ms. Anderson to complete the matter as best she could and have Ms. Brun verify the addresses. The address list was finally produced and Ms. Brun did satisfactorily verify the addresses. During the time Ms. Brun worked for the District, she was evaluated on an annual basis and never received any evaluation below the "above satisfactory" category. Her only prior disciplinary history was a reprimand for insubordination which she received in December, 1990. A reprimand is the least severe form of discipline at St. Johns River Water Management District.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That a final order be entered by the Governing Board reinstating the Petitioner's employment with the District. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 2nd day of September, 1992. DIANE CLEAVINGER 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 2 day of September, 1992.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: In February 1989, petitioner, Dennis John Hujar, was an examinee on the certified residential contractor examination The test is prepared under the direction of and administered by respondent, Department of Professional Regulation, Construction Industry Licensing Board (Department or Board). Petitioner later received written advice from the Department that he had made a grade of 68 on the examination. According to agency rules, a score of at least 69.1 is required for passing. Petitioner then filed an appeal of his grade contending that question 19 was ambiguous. That prompted this proceeding. The examination in question was prepared by the National Assessment Institute and contains three specific areas of testing, including business and financial management. The latter section includes questions on business law. Each item or question is drafted by a committee made up of representatives of the Department, Board and construction industry. After being drafted, the question is reviewed by the Department and Board for accuracy and content. However, the business law questions are not reviewed by attorneys prior to their use. Question 19 was a business law question having a value of two points on an examinee's overall score. The parties agree that if Hujar had received two additional points he would have passed the examination. Question 19 was designed to ascertain if the candidate could differentiate between a licensed and unlicensed contractor, the significance of that distinction, and the circumstances under which the recovery of profit and supervisory costs would be allowed. The question contained four possible answers, (a), (b), (c) and (d), one of which was a "good detractor" for the examinees. The correct solution was based on reference material contained in section 2.10 of the Florida Construction Law Manual, a copy of which has been received in evidence as hearing officer exhibit 2. As is pertinent here, that section provided as follows: Where a contractor or subcontractor has no license and enters into a contract, the contract is void for illegality. (citation omitted) The unlicensed contractor is not permitted to recover for lost profit. However, where work has already been done, the courts have allowed recovery on the basis of quantum meruit, but still deny recover of lost profit and cost of supervision. (citation omitted) In a case where the principal of a corporation was licensed as a general contractor for 17 years, but the corporation owned by the principal was not so licensed, a California court held that there was substantial compliance with licensing so as not to deny recovery of sums due. (citation omitted) Any person who is not licensed may not be considered as a lienor and may not have a mechanic's lien. (citation omitted) Because of security and confidentiality constraints, the challenged question cannot be repeated verbatim herein. It is suffice to say that the problem posed a hypothetical situation involving a state licensed general contractor who utilized an out-of-state (or unlicensed) subcontractor for site work on a Florida project. After the subcontractor completed site work of a specified value, the initial draw request was submitted to the owner for reimbursement of that cost and a reasonable profit. A second invoice for site work was then submitted to the Florida contractor but not the owner. At the same time, the owner learned of the subcontractor's unlicensed status and halted work on the project. The question asked the amount of money that the owner would "most likely (be) liable for at the time of the due date for the initial draw." According to the answer sheet received in evidence as hearing officer exhibit 1, the owner was liable for the initial draw request at that time, including allowable overhead, but did not owe for the cost of the second invoice not yet submitted to him by the contractor. This response was consistent with the cited reference material. Through his representative, petitioner claimed that the word "liable" most logically should be construed to mean the amount of money that the owner was ultimately liable to pay on the project although not necessarily at that point in time. Under this theory, the owner would have been responsible for a dollar amount at least equal to the contractors's cost in the initial draw plus the second but not yet submitted invoice for completion of the site work. If such an interpretation of the question was valid, petitioner's answer would have been correct. In this regard, it is noted that although there is no testimony as to the response given by Hujar on this question, it may be reasonably inferred that his answer was the same as that suggested by his representative. Koning contended further that in order to make correct the Board's response, the question should have asked for the owner's liability "at that time", thereby denoting that the ultimate liability was not in issue. It is noted that petitioner's representative is a licensed general, plumbing, roofing and underground utilities contractor and teaches the law manual as a preparatory course for the state examination. Petitioner is a former student. Respondent's consultant, George Bruton, who is a licensed general contractor and assists in the preparation of examination questions, considered the question to be clear and unambiguous. According to Bruton, the question required a student to recognize that 100% of a subcontractor's invoice plus allowable overhead are due and payable in full at the time of the first draw. However, because the owner had not yet been invoiced for the remaining amount of site work, he would not be liable for that amount. Bruton discounted petitioner's suggested answer as being nonresponsive on the grounds the words "ultimate liability" did not appear in the question, and petitioner was assuming a condition not called for in the question. Since the question did not use the words "ultimate liability", and petitioner's interpretation is not the most reasonable one, it is found that the question was not so "substantially misleading and insufficient" as to warrant the invalidation of the question or to justify a different response.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered denying petitioner's request to receive a passing grade on the examination. DONE and ENTERED this 26th day of October, 1989, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of October, 1989. APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-4313 Petitioner: 1-2. Used in finding of fact 2. Used in findings of fact 2 and 4. Used in preliminary statement and conclusions of law. Used in preliminary statement and finding of fact 8. Used in finding of fact 7. Rejected since it can be inferred that petitioner's response was choice c. Respondent: Respondent's "summary of facts" has been treated as conclusions of law and therefore specific rulings have not been made. The document attached to the summary of facts is not of record and has accordingly been disregarded. COPIES FURNISHED: Mr. Robert Koning 8301 Joliet Street Hudson, Florida 34667 Mr. Dennis J. Hujar 1511 Brooker Road Brandon, Florida 33511 E. Harper Field, Esquire 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-0792 Fred Seely, Executive Director Construction Industry Licensing Board Post Office Box 2 Jacksonville, Florida 32202 Kenneth E. Easley, Esquire 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-0792
