88-003842BID The Reliable Life Insurance Company vs. Broward County School Board Status: Closed Recommended Order on Thursday, October 27, 1988.

Summary: Unsuccessful bid protest where bid submitted by protester was not responsive to bid specifications

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

THE RELIABLE LIFE INSURANCE )

COMPANY, )

)

Petitioner, )

)

vs. ) CASE NO. 88-3842BID

)

SCHOOL BOARD OF BROWARD COUNTY, )

FLORIDA, DEPARTMENT OF PURCHASING, )

)

Respondent. )

_____________________________________)

RECOMMENDED ORDER

Pursuant to notice, this cause was heard by Linda M. Rigot, the assigned

Hearing Officer of the Division of Administrative Hearings, on August 23, 1988,

in Fort Lauderdale, Florida.

Petitioner The Reliable Life Insurance Company was represented by K.

Michael Swann, Esquire, and William M. Rishoi, Esquire, Winter Park, Florida;

and Respondent School Board of Broward County, Florida, Department of

Purchasing, was represented by Edward J. Marko, Esquire, Fort Lauderdale

Florida.

Pursuant to an Invitation to Bid issued by Respondent, Petitioner timely

submitted a bid for student accident insurance. Respondent determined that

Petitioner was not a responsive bidder and awarded the bid to Davis-Gillingham

Associates, Inc. Petitioner timely protested that bid award. Accordingly, the

issue presented for determination herein is whether the bid submitted by The

Reliable Life Insurance Company complied with the bid specifications of the

School Board of Broward County, Florida, Bid Number 89-1105 for student accident

insurance?

Petitioner called as its witnesses Joseph Herman Hughes, Jr., and Judith A.

Hunt. Additionally, Petitioner's Exhibits numbered 1-3 were admitted in

evidence.

Respondent called as its witnesses James Marshall, Jr.; Judith A. Hunt; and

Sharon Swan. Additionally, Respondent's Exhibits numbered 1 and 2 were admitted

in evidence.

At the commencement of the final hearing in this cause, Petitioner School

Insurance of Florida, Inc., withdrew from this proceeding, and Respondent's

Motion to Dismiss Petitioner Hughes for Lack of Standing was granted. Thus, the

remaining Petitioner in this matter is The Reliable Life Insurance Company.

Both parties submitted post-hearing proposed findings of fact in the form

of proposed recommended orders. A ruling on each proposed finding of fact can

be found in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. On June 7, 1988, the School Board of Broward County, Florida, sent an

invitation to several insurance companies to submit bids on student accident

insurance, Bid No. 89-1105, by 2:00 p.m. on June 20, 1988. The invitation

required the bidding vendor to complete a bid form, attach a specimen policy to

the bid form, and return this information to the School Board by the specified

date.

2. Joseph Herman Hughes, Jr., received a copy of the Invitation to Bid as

the Petitioner's agent.

3. Petitioner through its agent Hughes hand-delivered a bid form and a

specimen policy to the Department of Purchasing for the School Board on June 20,

1988, in Fort Lauderdale, Florida.

4. When Hughes arrived in Fort Lauderdale on June 20, 1988, he was

informed by the Department of Purchasing that the bid opening date had been

extended to June 28, 1988. On June 20, 1988, Hughes received a copy of an

addendum dated June 14, 1988, which revised page 8 of 14 pages to Bid No. 89-

1105 and page 9 of 14 pages to Bid No. 89-1105.

5. Reliable timely submitted its bid on June 28, 1988.

6. The bids were opened by the Department of Purchasing and Petitioner's

bid of $210,820 per year for the 1988-1989 and 1989-1990 school years was the

lowest bid that was submitted. The bid specifications stated that a

recommendation by the Director of the Department of Risk Management would be

posted subsequently.

7. On July 8, 1988, the recommendation of Risk Management was posted. The

recommendation letter dated July 6, 1988, stated that the bid for student

accident insurance should be awarded to Davis-Gillingham Associates, Inc., which

bid $313,514 for the first year and $334,772 for the second year. The

recommendation letter also stated that the bid from Reliable had been rejected

because Part IV of the Reliable specimen policy included an additional exclusion

which altered the specifications of Bid No. 89-110S.

8. Reliable timely filed a protest to the recommendation and, after

considering the protest, The School Board rejected it.

9. Hughes was aware of Paragraph 8 of the General Conditions on Page 2 of

the Invitation to Bid, which reads as follows:

INTERPRETATIONS: Any questions concerning

conditions and specifications should be

submitted in writing and received by the

Department of Purchasing no later than

three (3) working days prior to the bid

opening.

Hughes had questions concerning the interpretation of the conditions and

specifications of the bid, but did not follow that provision. Further, he was

familiar with Paragraph 14 appearing on Page 4 of 14 entitled "INFORMATION,"

which reads as follows:

Any questions by prospective bidders

concerning this Invitation to Bid should be

addressed to Mrs. Sharon Swan, Purchasing

Agent, Purchasing Department, (305) 765-

6086 who is authorized only to direct the

attention of prospective bidders to various

portions of the Bid so they may read and

interpret such for themselves. Neither

Mrs. Swan nor any employee of the School

Board of Broward County is authorized to

interpret any portion of the Bid or give

information as to the requirements of the

Bid in addition to that contained in the

written Bid Document. Interpretations of

the Bid or additional information as to its

requirements, where necessary, shall be

communicated to bidders only by written

addendum.

It is clear that Hughes had from approximately the 9th or 10th of June to the

28th of June to make any written inquiries to Mrs. Swan concerning either an

interpretation or information, as provided for on Page 2 in Paragraph 8 of the

General Conditions and Page 4 of 14 pages of the Special Conditions, but never

did so.

10. The provision entitled "Coverages" subsection "Medical and Hospital

Expense Benefits" on Page 8 of the Invitation to Bid provides as follows:

If the insured, within thirty days

following the date of accident, because of

injury caused accidently and independently

of all other causes, shall require

treatment by a licensed physician, the

Company will pay, on the basis specified in

Paragraphs A through K as follows, the

expenses incurred within fifty-two (52)

weeks after date of accident for ...

Hughes wrote, in the exclusion portion of the specimen policy required to be

attached to the bids submitted, Reliable's Paragraph J (1): "Any injury not

treated within 30 days by a licensed physician ... after date of accident." The

exclusion Hughes wrote specifically means that if a person is not treated within

thirty days of the date of the accident there will be no coverage.

11. The wording in the bid specifications does not provide that treatment

must be rendered within thirty days; rather, the specification is that the

treatment be required within thirty days. The exclusionary provision provided

for in Reliable's specimen policy constitutes a significant restriction in

coverage from the coverage described in the bid specifications.

12. Therefore, the wording contained in J-1 of the exclusions of the

specimen policy submitted by Reliable materially altered the specifications

required by the School Board's Invitation to Bid number 89-1105 for student

accident insurance. Reliable's bid was properly rejected from consideration in

the award of the bid.

13. Paragraph 7 of page 3 of 14 pages, Special Conditions, Bid No. 89-

1105, states as follows:

All bids shall be for the benefits as

specified in this Bid Document. In the

event of any conflict between the terms of

these specifications and terms of the

Policy issued on a bid submitted under

these specifications, it is understood and

agreed to by the bidder and the insurance

company that the policy is amended to

conform with these specifications, unless

specifically waived in writing by the

School Board of Broward County, Florida.

14. The clear intent of the wording in Paragraph 7 of the Special

Conditions provides that if the policy that is issued after the bid is awarded

does not conform to the bid, then the effect of Paragraph 7 of the Special

Conditions is to automatically reform the policy to be read as though it did

comply with the bid. However, all bids must be for the benefits (coverage)

specified in the Invitation to Bid.

15. Paragraph 7 of the Special Conditions found on Page 3 of the

Invitation to Bid applies, if at all, only after the award of the bid and does

not serve to cure defects in bid submissions. Reliable's policy does not

conflict with the bid specifications; rather, its bid materially alters the bid

specifications.

16. Paragraph 1 of page 3 of 14 pages, Special Conditions, Bid No. 89-

1105, states as follows:

The School Board of Broward County,

Florida, desires bids on Student Accident

Insurance as specified herein. This aid is

to, establish a two (2) year term contract

from August 29, 1988 through August 30,

1990 or the day preceding the opening day

of school for students in the school year

1990-91. Prices quoted shall remain firm

for the two year contract period.

17. Requiring policies to be firm or definite for multiple contract

periods is common in the industry. To require prices to remain firm for a 2-

year contract period means that the premium for year one and the premium for

year two must each remain fixed at the amounts bid for those respective years.

The fact that there are different premiums for the two different years does not

require a separate policy.

18. The submission by Davis-Gillingham Associates, Inc., was in compliance

with that bid specification of the Invitation to Bid as the premium for each

coverage year is not required to be identical. Rather, the prices quoted for

the two coverage years may not be altered during the contract period.

CONCLUSIONS OF LAW

19. The Division of Administrative Hearings has jurisdiction over the

subject matter hereof and the parties hereto. Sections 120.53 and 120.57(1),

Florida Statutes.

20. A School board may award a bid to the bidder who submits the lowest

and best bid meeting all specifications. Rule 6A-1.012, Florida Administrative

Code. A bid submission which has materially altered the specifications fails to

satisfy the requirements of the bid and may not be considered as a responsible

bid. It is clear that the other bidders were bidding on coverage provided for

in the General Terms and Conditions of the bid which was broader than and less

restrictive than that of the submittal by Reliable.

21. The provision regarding "conflicts" between the bid specifications and

any policy subsequently issued does not cure Petitioner's defective bid. There

was no showing that the Invitation to Bid would ever be incorporated in any

policy issued by Reliable to any student or that the School Board would be a

party to the actual contract of insurance individually purchased by a student

from Reliable. If the "conflict" provision has any meaning at all (which is

doubtful at best), it clearly does not apply where the alleged "conflict" is

simply a failure to submit a bid which complies with the bid specifications.

22. Since Reliable has failed in its burden of proving that it was a

responsive bidder, it cannot prove that it was the lowest responsive bidder.

Lastly, its sole challenge to the bid of the successful bidder -- Davis-

Gillingham Associates, Inc.'s, firm although different price quotes for the two

years in question -- was also unsuccessful.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is,

RECOMMENDED that a Final Order be entered denying the bid protest of The

Reliable Life Insurance Company and awarding Bid No. 89-1105 to Davis-Gillingham

Associates, Inc.

DONE and RECOMMENDED this 27th day of October, 1988, at Tallahassee,

Florida.

_________________________________

LINDA M. RIGOT, Hearing Officer

Division of Administrative Hearings

The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 27th day of October, 1988.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-3842BID

1. Petitioner's proposed findings of fact numbered 1-6, 11, 13-15, 25, 27,

29 and 30 have been adopted either verbatim or in substance in this Recommended

Order.

2. Petitioner's proposed findings of fact numbered 7, 8, 16-19, and 22

have been rejected as being irrelevant to the issue under consideration herein.

3. Petitioner's proposed findings of fact numbered 9, 10 and 20 have been

rejected as not being supported by the weight of the credible evidence.

4. Petitioners proposed finding of fact numbered 12 has been rejected as

being unnecessary for determination of the issues herein.

5. Petitioner's proposed findings of fact numbered 21, 23, 24, 26, 28 and

31 have been rejected as being contrary to the weight of the evidence in this

cause.

6. Respondent's proposed findings of fact numbered 1-4, 6, 7, 10, 11, 13,

16, 17, 20 and 21 have been adopted either verbatim or in substance in this

Recommended Order.

7. Respondents's proposed findings of fact numbered 5, 8, 9, 12, 14, 15,

18 and 19 have been rejected as not constituting findings of fact but rather as

constituting argument of counsel, conclusions of law, or recitation of the

testimony.

COPIES FURNISHED:

William J. Leary, Superintendent

School Board of Broward County

1320 Southwest Fourth Street

Fort Lauderdale, Florida 33312

K. Michael Swann, Esquire

William M. Rishoi, Esquire

280 West Canton Avenue, Suite 240

Winter Park, Florida 32789

Edward J. Marko, Esquire

Post Office Box 4369

Fort Lauderdale, Florida 33338

Arthur Hanby, Director

School Board of Broward County

Purchasing Department

1320 Southwest Fourth Street

Fort Lauderdale, Florida 33312