10-000535BID Eckerd Youth Alternatives, Inc. vs. Department Of Juvenile Justice Status: Closed Recommended Order on Wednesday, April 28, 2010.

Summary: Respondent's use of a long-standing policy to evaluate proposals was appropriate. Petitioner failed to protest the methodology that was traditionally used within 72 hours of the issuance of the RFP.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ECKERD YOUTH ALTERNATIVES, )

INC., )

)

Petitioner, )

)

vs. ) Case No. 10-0535BID

)

DEPARTMENT OF JUVENILE JUSTICE, )

)

Respondent, )

and )

)

THE HENRY AND RILLA WHITE YOUTH )

FOUNDATION, INC., )

)

Intervenor. )

)

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing was held in this case

on March 11, 2010, in Tallahassee, Florida, before Susan B.

Harrell, a designated Administrative Law Judge of the Division

of Administrative Hearings.

APPEARANCES

For Petitioner: Martha Harrell Chumbler, Esquire

Matthew Bernier, Esquire

Carlton Fields, P.A.

215 South Monroe Street, Suite 500

Post Office Drawer 190

Tallahassee, Florida 32302-0190

For Respondent: Tonja Mathews, Esquire

Department of Juvenile Justice

2737 Centerview Drive

Tallahassee, Florida 32399-3100

For Intervenor: Maureen McCarthy Daughton, Esquire

Ramona Thomas, Esquire

Broad and Cassel

215 South Monroe Street, Suite 400

Post Office Drawer 11300

Tallahassee, Florida 32302

STATEMENT OF THE ISSUE

The issue in this case is whether the intended contract

award to Intervenor pursuant to Request for Proposals P2056 for

a Community Based Intervention Services Program in Brevard

County, Florida, is contrary to Respondent’s governing statutes,

Respondent’s policies and rules, and the request for proposals.

PRELIMINARY STATEMENT

On December 11, 2009, Respondent, Department of Juvenile

Justice (Department), posted a Notice of Agency Action, which

indicated that, pursuant to Request for Proposals P2056 (the

RFP), the Department intended to award a contract for a

Community Based Intervention Services Program for youth in

Brevard County to Intervenor, The Henry and Rilla White Youth

Foundation, Inc. (White). Petitioner, Eckerd Youth

Alternatives, Inc. (Eckerd), had also submitted a proposal to

the RFP and filed a Formal Written Protest and Petition for

Administrative Hearings (the Petition) on December 28, 2009,

contesting the award to White.

The case was forwarded to the Division of Administrative

Hearings on February 5, 2010, for assignment to an

Administrative Law Judge. On February 8, 2010, White filed a

Petition to Intervene, which was granted by Order dated

February 9, 2010. A pre-hearing conference was held on

February 9, 2010, and the parties agreed to a final hearing date

of March 11, 2010.

On February 17, 2010, Eckerd filed a Motion for Costs and

Charges should it prevail.

The parties filed a Joint Prehearing Stipulation, in which

they stipulated to certain facts contained in paragraphs 1

through 13 of section E of the Joint Prehearing Stipulation.

Those facts have been incorporated in this Recommended Order to

the extent relevant.

At the final hearing, the parties submitted Joint

Exhibits 1 and 2, which were admitted in evidence. Eckerd

called the following witnesses: Ellyn Evans, Paul Hatcher, and

Douglas Zahn, Ph.D. Petitioner’s Exhibits 1 through 12 were

admitted in evidence. The Department called Paul Hatcher as its

witness. The Department and White jointly submitted Exhibits 1

through 32, which were admitted in evidence. White did not call

any witnesses.

The one-volume Transcript was filed on March 25, 2010. At

the final hearing, the parties agreed to file their proposed

recommended orders within ten days of the filing of the

Transcript. On March 31, 2010, White filed Intervenor’s Motion

for Extension of Deadline to File Proposed Recommended Order.

The motion was granted by Order dated April 1, 2010, and the

time for filing proposed recommended orders was extended to

April 9, 2010. The parties timely filed their Proposed

Recommended Orders, which have been considered in the

preparation of this Recommended Order.

FINDINGS OF FACT

1. The Department is an agency of the State of Florida and

is the procuring agency for the RFP at issue in this proceeding.

2. Eckerd is a not-for-profit corporation duly-organized

under the laws of the State of Florida.

3. White is a not-for-profit corporation duly-organized

under the laws of the State of Florida.

4. On September 4, 2009, the Department issued the RFP to

select a provider to operate a 44-slot Community Based

Intervention Services Program for youth ages ten through 21 in

Brevard County, Florida. Eckerd did not protest the

specifications of the RFP nor the methodology that the

Department had historically used in scoring proposals for

similar services within 72 hours of the issuance of the RFP.

5. Eckerd and White submitted timely responses to the RFP

on or before October 14, 2009.

6. Under the RFP, one of the categories that the

Department evaluates is the “Evaluation of the Past Performance

for Non-Residential Programs.” One of the three components of

the past performance standard is: Part I—Evaluation for Past

Performance in Florida. This includes, as a subcomponent, the

of 200 points.

7. The RFP defines CSR as “Percentage of youth who do not

recidivate,” and further provides, “Points are awarded based on

the combination of successful youth program completions, and the

percentage of youth who do not recidivate.”

8. Each proposer was required to complete and submit with

its proposal Attachment C to the RFP entitled “Data Sheet: Past

Performance of Non-Residential Programs” (Data Sheet). The Data

Sheet was to provide certain information for non-residential

programs that the proposer had operated in Fiscal Year (FY)

2006-2007, including program name, contract number, number of

completions during FY 2006-2007, and FY 2006-2007 Recidivism

Rates. Some of the information, such as the completions and the

recidivism rates, was to be based on information found in the

Department’s 2008 Florida Comprehensive Accountability Report

[CAR]. 1 The CAR is prepared by the Department and includes

program outcomes, including total releases, number of

completions, completion rates, and success rates for all types

of probation and community intervention programs that released

youth in FY 2006-2007. The information is reported by judicial

circuit. The CAR may report information on different programs

in a judicial circuit, and some of the programs may be included

in one contract with a provider.

9. For example, White has one contract in the Second

Judicial Circuit, contract number P2028, but the CAR reports

information for two programs under contract number P2028. In

the Fourth Judicial Circuit, White has one contract, contract

number D7102, under which services are provided in Duval and

Nassau Counties. The CAR treats the counties as being separate

programs and provides separate data for the services provided in

Duval County and for the services provided in Nassau County.

10. As set forth in the Data Sheet, the number of

completions is defined as “[t]he number of youth completing the

program during FY 2006/2007 documented in the Department’s 2008

Florida Comprehensive Accountability Report.” In the CAR, the

column titled “N4” provides the number of youth who successfully

completed a specific program.

11. The recidivism rate is the percentage of youth who

later offended. The Data Sheet provides that the recidivism

rate is found in the “2006-2007 Recidivism Column as reported in

the Department’s 2008 Florida Comprehensive Accountability

Report.” The CAR does not report recidivism rates; it reports

success rates. Instead of providing the percentage of youth who

completed the program and reoffended, the CAR reports the

percentage of youth who did not reoffend. Thus, the recidivism

rate is calculated by subtracting the success rate from 100.

The Department relies on data from the CAR in determining the

percentage of recidivism because the success completion

percentages that are reported in the CAR have been calculated

already. Therefore, it is easy to calculate the recidivism

percentages using the CAR success rates.

12. Paul Hatcher, senior management analyst for the

Department, is the individual responsible for determining the

CSR for providers who have submitted proposals in response to

requests for proposals issued by the Department. Mr. Hatcher is

the only individual who performs this function for the

Department and has been in this position, performing this task,

for over nine years.

13. Mr. Hatcher processes the proposals through a standard

procedure. The RFP provides that the information submitted in

the Data Sheet “will be verified by the Department [and] [a]ny

inaccurate or omitted information will be corrected.” After

receiving the proposals, Mr. Hatcher verifies the accuracy of

the information provided, including the number of completions

and the recidivism rate reported on the Data Sheets submitted

with each proposal, against the information provided in the

corresponding CAR. If the information regarding a program is

reported incorrectly, Mr. Hatcher corrects it to conform to the

information in the appropriate CAR.

14. The information submitted on the Data Sheet is

submitted by contract number. The contract number is how the

Department identifies quality assurance reviews, as well as

fiscal and other data sources. For example, for contract

number P2028, White submitted the completions for both programs

in the Second Judicial Circuit. One program had 19 completions

and the other program had 29 completions, for a total of 48.

White intended to combine the completions for placement under

Column 9 of the Data Sheet but erroneously used the combined

number of releases. Pursuant to the RFP, Mr. Hatcher corrected

the data to reflect the combined completions as reported in the

CAR. 2 The CAR reported a success rate of one program as

63% and the success rate of the other program as 69%, which

equated to recidivism rates of 37% and 31%. White recorded the

recidivism rates for the contract on the Data Sheet as 37%/31%.

15. The same approach was used for reporting the

information on contract number D7102 for the services provided

in Duval County and Nassau County in the Fourth Judicial

Circuit. The services provided in Duval and Nassau Counties

were considered by the Department to be one program; however,

the CAR reported the information by county as if they were

separate programs. The completions for both counties were

intended to be combined for reporting on the Data Sheet, but

White recorded the combined number of releases on the Data

Sheet. 3 Mr. Hatcher corrected the data to reflect the combined

completions as reported in the CAR. The CAR reported the

success rates for the Duval County program as 62% and the

success rate of the Nassau County program as 100%. These

success rates equated to recidivism rates of 38% and 0%.

16. Because the Department is looking for the recidivism

rate for each contract, and the CAR reports the success rates

used to calculate recidivism rates by program as in the Second

Judicial Circuit or by county as in the Fourth Judicial Circuit,

Mr. Hatcher averages the combined recidivism rates to come up

with one recidivism rate for each contract in the Second and

Fourth Judicial Circuits. Thus, the recidivism rates for

contract number P2028 for the Second Judicial Circuit were

averaged, resulting in one recidivism rate of 21%. The same

method was applied to the recidivism rates for the Fourth

Judicial Circuit, resulting in one recidivism rate of 19%.

17. After checking the reported numbers and making all

necessary changes, including making corrections to the data to

match the data reported in the CAR and averaging the recidivism

rates for contracts encompassing more than one program or more

than one county, Mr. Hatcher inputs the number of completions

and the recidivism rate for each contract into a standardized

Microsoft Excel spreadsheet (Spreadsheet), which performs the

actual calculations and computes the total CSR for each

individual proposal.

18. The Spreadsheet uses fixed formulas to perform the

mathematical calculations necessary to determine the CSR for

each proposal. The last two columns on the right hand side of

the Spreadsheet relate to the CSR, and the numbers shown therein

are generated by the fixed formulas.

19. The Spreadsheet performs several calculations. It

multiplies the number of completions by the recidivism rate for

each contract to obtain the number of youth recidivating. Then,

from each contract, the number of youth recidivating was

subtracted from the number of total completions to obtain the

number of successful youth for each contract. It then adds each

of these successful youth figures together and divides the total

by the combined total number of completions, resulting in the

total CSR.

20. The Department awarded Eckerd a score of 129 points

based on a 64.5% Combined Success Rate. The Department awarded

White a score of 160 points based on an 80% Combined Success

Rate.

21. On December 11, 2009, the Department posted its Notice

of Agency Action, which indicated its intent to award the

contract to White. The Department awarded White the highest

overall score of 1554.49 points. The Department awarded Eckerd

the second highest overall score of 1544.49 points.

22. On December 28, 2009, Eckerd filed the Petition

pursuant to Subsection 120.57(3), Florida Statutes (2009), 4 and

Florida Administrative Code Rule 28-110.004.

23. The same Spreadsheet had been used by the Department

for several years in calculating the CSR for proposals submitted

in response to requests for proposals. Additionally, the

Department’s practice of averaging scores for single-contract

programs with more than one set of data was not a new scoring

concept for the procurement at issue.

24. In 2007, Eckerd submitted a response to Request for

Proposal P2303 (RFP P2303) issued by the Department and was

awarded the contract by achieving the highest score that was

calculated in the same manner as the scores for the procurement

at issue. 5 In the Data Sheet submitted by Eckerd for RFP P2303,

under program name, it entered in one cell, a single-contract

program (contract number P70444) operated by Eckerd in the Tenth

and Twelfth Judicial Circuits as “Circuit 10, 12, West/EYDC.”

25. In its Data Sheet for RFP P2303, Eckerd took the total

number of completions from the 2006 CAR for the Tenth Judicial

Circuit and the Twelfth Judicial Circuit for contract

number P7044, 19 and 31, respectively, and added them together

for a total of 50 completions, which it entered under the

“Number of Completions” column.

26. The 2006 CAR reported recidivism rates for the Tenth

and Twelfth Judicial Circuits as 26% and 23%, respectively, for

contract number 7044. Eckerd listed both recidivism rates in

its Data Sheet for RFP P2303 under the “2004-2005 Recidivism

Rate.” Mr. Hatcher averaged the recidivism rates for contract

number 7044 resulting in a single recidivism rate of 25%. This

figure was used in the Spreadsheet to calculate the CSR.

27. The Data Sheet submitted by Eckerd for RFP P2303 also

contains two boxes at the bottom of the page that contain

statements indicating that each circuit was reported separately

and that the cell contains both circuits. The boxes have arrows

that point to the relevant combined data cells in the “Number of

Completions” and “2004-2005 Recidivism Rate” columns. The

information contained in the data cells was derived from the

2006 CAR, which listed separate data for the Tenth and Twelfth

Judicial Circuits even though the services provided were through

a single contract.

28. Eckerd has also submitted responses for other requests

for proposals, RFP P2028, RFP P2032, and RFP P2034, using the

same data for each Data Sheet as it used for the Data Sheet

submitted for RFP P2303.

29. On February 15, 2010, the Department changed its

policy on the scoring methodology to be used in procurements

such as the one at issue. The change in policy was expressed in

an addendum to RFP P2062. The addendum stated in part:

If the 2008 CAR Report lists a program with

more than one recidivism percent, list all

of the percentages and the number of

completions for the program on Attachment C

[Data Sheet], and the Department will be

treating a Provider’s program with more than

one recidivism rate as separate programs for

the purposes of calculating success rate and

will not be averaging the programs. The

Department verifies all program information

from the CAR Report.

30. This change in policy was in response to the

anticipated changes to the 2009 CAR, which will report and

identify multiple areas of information, including more programs

with several separately reported recidivism rates. The change

in policy was implemented upon evaluation of the 2009 CAR and in

anticipation of the release of the 2009 CAR.

31. Eckerd claims that the policy of averaging recidivism

percentages for contracts in which the CAR lists more than one

recidivism rate resulted in an inaccurate recidivism percentage

for White’s contracts for the Second and Fourth Judicial

Circuits. For example, in the Fourth Judicial Circuit, the

recidivism rate for Duval County was 38%, and the recidivism

rate for Nassau County was 0%. Eckerd contends that the

multiple recidivism rates as calculated from the CAR should have

been used in the Spreadsheet rather than an average of multiple

recidivism rates for a single contract. When the recidivism

rate that is calculated from the CAR report for Duval County is

used, the number of youth reoffending is 87.4, and the number of

youth reoffending in Nassau County is 0%. When the average

recidivism rate of 19% is used for Duval and Nassau Counties,

the number of youth reoffending drops to 44.08, which is not an

accurate accounting of the actual number of youth who

reoffended. When the recidivism rate is lowered, the success

rate will rise. Therefore, if the method espoused by Eckerd was

used, White would have received a 71.9 score for CSR, resulting

in a decrease of the points awarded to White of 16 points for

CSR and a corresponding decrease in the total points awarded to

White. Using Eckerd’s methodology, Eckerd would have received

the highest number of points.

CONCLUSIONS OF LAW

32. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding. §§ 120.569 and 120.57, Fla. Stat.

33. Subsection 120.57(3)(f), Florida Statutes, provides

that in a protest to a proposed contract award pursuant to a

request for proposals:

[u]nless otherwise provided by statute, the

burden of proof shall rest with the party

protesting the proposed agency action. In a

competitive-procurement protest, other than

a rejection of all bids, proposals, or

replies, the administrative law judge shall

conduct a de novo proceeding to determine

whether the agency's proposed action is

contrary to the agency's governing statutes,

the agency's rules or policies, or the

solicitation specifications. The standard

of proof for such proceedings shall be

whether the proposed agency action was

clearly erroneous, contrary to competition,

arbitrary, or capricious.

34. The court in Colbert v. Department of Health , 890 So.

2d 1165, 1166 (Fla. 1st DCA 2004), defined the clearly erroneous

standard to mean “the interpretation will be upheld if the

agency’s construction falls within the permissible range of

interpretations. If however, the agency’s interpretation

conflicts with the plain and ordinary intent of the law,

judicial deference need not be given to it.” (Citations omitted)

35. An agency action is “contrary to competition” if it

unreasonably interferes with the purposes of competitive

procurement, which has been described in Wester v. Belote ,

138 So. 721, 722 (Fla. 1931), as follows:

The object and purpose of competitive

bidding is to protect the public against

collusive contracts; to secure fair

competition upon equal terms to all bidders;

to remove, not only collusion, but

temptation for collusion and opportunity for

gain at public expense; to close all avenues

to favoritism and fraud in its various

forms; to secure the best values at the

lowest possible expense; and to afford an

equal advantage to all desiring to do

business with the public authorities, by

providing an opportunity for an exact

comparison of bids.

36. A capricious action has been defined as an action,

“which is taken without thought or reason or irrationally.”

Agrico Chemical Co. v. Department of Environmental Regulation ,

365 So. 2d 759, 763 (Fla. 1st DCA 1978), cert. denied , 376 So.

2d 74 (Fla. 1979). “An arbitrary decision is one that is not

supported by facts or logic.” Id. The inquiry to be made in

determining whether an agency has acted in an arbitrary or

capricious manner involves consideration of “whether the agency:

(1) has considered all relevant factors; (2) given actual, good

faith consideration to the factors; and (3) has used reason

rather than whim to progress from consideration of these factors

to its final decision.” Adam Smith Enterprises v. Department of

Environmental Regulation , 553 So. 2d 1260, 1273 (Fla. 1st DCA

1989). The standard has also been formulated by the court in

Dravo Basic Materials Co. v. Department of Transportation , 602

So. 2d 632, 632 n.3 (Fla. 2d DCA 1992), as follows: “If an

administrative decision is justifiable under any analysis that a

reasonable person would use to reach a decision of similar

importance, it would seem that the decision is neither arbitrary

nor capricious.”

37. Eckerd has the burden to establish the allegations in

the Petition by a preponderance of the evidence. Department of

Transportation v. Groves-Watkins , 530 So. 2d 912, 913-914 (Fla.

1988). Eckerd has alleged that the Department incorrectly

scored White’s CSR by averaging the recidivism percentages for

the Second and Fourth Judicial Circuits. 6

38. Subsection 120.57(3)(b), Florida Statutes, provides:

Any person who is adversely affected by the

agency decision or intended decision shall

file with the agency a notice of protest in

writing within 72 hours after the posting of

the notice of decision or intended decision.

With respect to a protest of the terms,

conditions, and specifications contained in

a solicitation, including any provisions

governing the methods for ranking bids,

proposals, or replies, awarding contracts,

reserving rights of further negotiation, or

modifying or amending any contract, the

notice of protest shall be filed in writing

within 72 hours after the posting of the

solicitation. The formal written protest

shall be filed within 10 days after the date

the notice of protest is filed. Failure to

file a notice of protest or failure to file

a formal written protest shall constitute a

waiver of proceedings under this chapter.

39. Although the methodology which the Department used to

calculate the CSR by averaging recidivism rates for multiple

programs in a judicial circuit was not set forth in the RFP, it

was not a new methodology and had been used for many requests

for proposals, including ones for which Eckerd submitted

proposals. Eckerd had submitted Data Sheets for other requests

for proposals in which multiple recidivism rates were listed on

the same line and averaged by the Department in calculating the

CSRs for Eckerd.

40. Eckerd argues that it did not contest the intended

awards for the other requests for proposals because the use of

the methodology did not make a change in the scoring which would

give Eckerd the highest number of points. This argument begs

the question of when the methodology should have been protested.

If Eckerd thought that the methodology that had historically

been used was not the appropriate way to calculate CSRs, Eckerd

should have protested the methodology within 72 hours of the

release of the RFP rather than wait to see if the methodology

would make a difference in the scoring. If the Department had

departed from its long-standing policy of averaging recidivism

rates, Eckerd would have a valid protest that the Department had

evaluated the proposals contrary to the Department’s policies.

41. Having failed to protest the methodology within 72

hours of the issuance of the RFP, Eckerd has waived any

objections to the use of the Department’s long-standing policy

of averaging recidivism percentages for contracts that may span

more than one county such as contract number D7102 and for

contracts with more than one program such as contract

number P2028 for the Second Judicial Circuit.

42. Assuming, arguendo , that Eckerd has not waived its

objections to the methodology for computing the CSRs, Eckerd has

failed to show the methodology is contrary to the RFP. The RFP

defines CSR as the percentage of youth who do not recidivate and

states that points will be awarded on the combination of

successful youth program completions and the percentage of youth

who do not recidivate. The RFP does not state exactly how the

CSR will be calculated such as using the formulas that are

contained in the Spreadsheet, but Eckerd was familiar with the

methodology that had been used in the past.

43. Eckerd has failed to show that the methodology for

calculating CSRs is contrary to the governing statutes of the

Department, the Department’s rules, or the Department’s

policies. In fact, the use of a methodology other than the one

used for the RFP would have been contrary to the Department’s

policy of calculating CSRs that the Department had used for

several years.

44. The methodology used by the Department is neither

arbitrary nor capricious. The Department had given some thought

to coming up with a way to have one recidivism rate for a

contract that had multiple recidivism rates reported by the CAR.

It may not be the most desirable method, but there is no

evidence that it is an unreasonable method for calculating CSRs.

The methodology is not contrary to competition. The same

methodology was used for the evaluation of all proposals. The

methodology was not used to give an unfair advantage to a

certain proposer over the other proposers.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that a final order be entered dismissing

the Petition filed by Eckerd.

DONE AND ENTERED this 28th day of April, 2010, in

Tallahassee, Leon County, Florida.

S

SUSAN B. HARRELL

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 28th day of April, 2010.

ENDNOTES

1/ References to the 2008 Florida Comprehensive Accountability

Report will generally be “CAR,” and the CAR for any other year

will be identified by the year of issuance.

2/ White erroneously listed the combined number of total

releases for the two programs, 81, rather than the combined

number of youth completing the program, 48. This mistake was

corrected by the Department as provided in the RFP.

3/ White included the combined releases, 266, on the Data Sheet.

This number was corrected pursuant the RFP to the combined

number of completions, 232.

4/ Unless otherwise indicated, all references to the Florida

Statutes are to the 2009 version.

5/ The maximum number of points that could be awarded per

category may have differed, but the methodology in calculating

the scores remained the same.

6/ Eckerd had raised issues concerning whether all of the

appropriate programs had been listed and considered in the CSR,

but counsel for Eckerd stated at the final hearing that those

issues were abandoned.

COPIES FURNISHED :

Tonja Mathews, Esquire

Department of Juvenile Justice

2737 Centerview Drive

Tallahassee, Florida 32399-3100

Martha Harrell Chumbler, Esquire

Matthew Bernier, Esquire

Carlton Fields, P.A.

215 South Monroe Street, Suite 500

Post Office Drawer 190

Tallahassee, Florida 32302-0190

Maureen McCarthy Daughton, Esquire

Ramona Thomas, Esquire

Broad and Cassel

215 South Monroe Street, Suite 400

Post Office Drawer 11300

Tallahassee, Florida 32302

Frank Peterman, Jr., Secretary

Department of Juvenile Justice

Knight Building

2737 Centerview Drive

Tallahassee, Florida 32399-3100

Jennifer Parker, General Counsel

Department of Juvenile Justice

Knight Building

2737 Centerview Drive

Tallahassee, Florida 32399-1300

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

10 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.