96-004762BID Lonnie Jackson Revocable Trust vs. Department Of Corrections Status: Closed Recommended Order on Thursday, November 21, 1996.

Summary: Agency's rejection of all bids, including Petitioner's, was not arbitrary. Space offered by Petitioner did not meet size requirements of specs.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LONNIE JACKSON REVOCABLE TRUST, )

)

Petitioner, )

)

vs. ) CASE NO. 96-4762BID

)

DEPARTMENT OF CORRECTIONS, )

)

Respondent. )

__________________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted in this case on November

6, 1996, in Fort Lauderdale, Florida, before Stuart M. Lerner, a duly designated

Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Gregory L. Jackson

Howard Craft

Lonnie Jackson Revocable Trust

601 Andrews Avenue

Fort Lauderdale, Florida 33301

For Respondent: Daniel Te Young

Assistant General Counsel

Department of Corrections

2601 Blair Stone Road

Tallahassee, Florida 32399-2500

STATEMENT OF THE ISSUE

Whether the Department of Corrections (Department) should sustain

Petitioner's challenge to the Department's decision to reject all proposals

(including Petitioner's) submitted in response to the Department's request for

proposals for Lease No. 700:0754?

PRELIMINARY STATEMENT

On or about September 26, 1996, Petitioner submitted to the Department a

signed and dated Notice of Protest which read as follows:

Lease Number 700:0754

Probation and Parole Office 17-0

Authority: Florida Statute 120.53(5) 1/

To: Maria L. Cortes

District General Services Manager

3810 Inverrary Blvd. C-101

Lauderhill, FL 33319

Protest Deadline: 5:00 PM, September 26, 1996

Today's Date: September 26, 1996 (Hand Delivered)

Bidder: Lonnie Jackson Revocable Trust

The undersigned protests the decision by the

Department of Corrections to reject all bids

submitted for the above referenced lease, as

our bid meets all requirements.

On October 10, 1996, the Department referred the matter to the Division of

Administrative Hearings (Division). Along with a referral letter and a copy of

Petitioner's Notice of Protest, the Department filed with the Division a Motion

to Dismiss for Failure to File the Protest Bond, and a Motion to Dismiss, or in

the Alternative, for a More Definite Statement (Respondent's Motions). In its

Motion to Dismiss for Failure to File the Protest Bond, the Department contended

that, because Petitioner did not post, at the time it submitted its Notice of

Protest to Respondent, a bond in accordance with the provisions of Section

255.25(3)(c), Florida Statutes (Supp. 1996), 2/ the Notice of Protest should

be dismissed. In its Motion to Dismiss, or in the Alternative, for a More

Definite Statement, the Department argued that Petitioner's Notice of Protest

did not comply with the law governing the contents of a formal bid protest. 3/

On October 14, 1996, the undersigned Administrative Law Judge issued an

order directing that Petitioner, "[n]o later than October 22, 1996, . . . file

with the undersigned . . . , and serve on Respondent [the Department] , a

written response to Respondent's Motions." 4/ On October 22, 1996, Petitioner

filed a More Definite Statement, in which it made the following assertions:

1) Petitioner's Bid meets all requirements

in the R.F.P.

2) Florida Department of Corrections staff

committed error in measuring Petitioner's

building, as clearly shown in the documents

attached hereto. 5/

On October 29, 1996, the undersigned Administrative Law Judge issued an

order: (1) denying Respondent's Motion to Dismiss, or in the Alternative, for a

More Definite Statement; and (2) giving Petitioner until 4:00 p.m. on Friday,

November 1, 1996, to post the bond required by Section 255.25(3)(c), Florida

Statutes (Supp. 1996). 6/ During a telephone conference call held on November

1, 1996, (following the 4:00 p.m. posting deadline), the parties advised the

undersigned that Petitioner had timely posted the requisite bond. Accordingly,

the undersigned announced that the Section 120.57(1) hearing on the merits of

Petitioner's protest (which had been scheduled for November 6, 1996) would be

held as scheduled.

On November 4, 1996, the parties filed a Joint Prehearing Stipulation in

which they stated their respective positions as follows:

1. Petitioner

As in earlier ([Sept.]. 26) response to the

D.O.C., our bid meets all bid specs; D.O.C.

staff committed error in measuring our building.

2. The Department

The Department issued a request for proposals

to lease office space for a probation and parole

office in Fort Lauderdale. The request stated

that the net square footage required was 9,169,

within a plus three percent tolerance, and that

restrooms and mechanical rooms were not to be

included in calculating the square footage.

No responsive proposal was received. The

proposal submitted by Petitioner was non-

responsive because it did not meet the minimum

net square footage required. Because no

responsive bids were received, the Department,

by letters dated 19 September 1996, notified

all bidders that it was rejecting all bids and

that a new request for proposals would soon be

issued. The rejection of all bids was proper;

it was neither fraudulent, arbitrary, illegal,

or dishonest.

The disputed issues of fact and law were described as follows in the parties'

Joint Prehearing Stipulation:

VII. ISSUES OF FACT TO BE LITIGATED

Whether Department staff committed error

in measuring Petitioner's bid building at

609 South Andrews Avenue, Ft. Lauderdale, Florida.

VIII. ISSUES OF LAW FOR [ADMINISTRATIVE LAW

JUDGE] TO DETERMINE

Whether the Department's rejection of all bids

was arbitrary.

The hearing on the merits of Petitioner's protest was held, as scheduled,

on November 6, 1996. At the outset of the hearing, the Department requested

that the undersigned take official recognition (pursuant to Section

120.569(2)(g), Florida Statutes (Supp. 1996) 7/ ) of the final order issued in

Preferred Services, Inc. v. Department of Health and Rehabilitative Services,

DOAH Case No. 94-4890BID (HRS January 23, 1995), a bid protest case in which the

Department of Health and Rehabilitative Services (HRS), adopting the

recommendation of the Hearing Officer, concluded that "[i]t was reasonable for

[it] to conclude that the [protestant's] bid [to lease space to HRS] was

unresponsive by failing to provide the minimum number of restroom sets, or that

by deducting another two sets of restrooms, the bid was unresponsive as not

meeting the minimum square footage requirements [set forth in the Invitation to

Bid]." The undersigned advised Petitioner that, if it contested the

Department's request for official recognition, it so advise the undersigned in

writing no later than Tuesday, November 12, 1996. On that date (November 12,

1996), Petitioner filed a written "objection" to the undersigned taking official

recognition of the final order issued in DOAH Case No. 94-4890BID. Having

carefully considered the matter, the undersigned is of the view that no useful

purpose would be served by granting the Department's official recognition

request and adding the final order issued in DOAH Case No. 94-4890BID to the

record in the instant case. See Mercedes Lighting and Electrical Supply, Inc.,

v. Department of General Services, 560 So.2d 272, 278 (Fla. 1st DCA 1990).

Accordingly, the request is hereby DENIED.

A total of two witnesses (Douglas Sweredoski and Aubrey Hutchison, Jr.,

P.E.) testified at the November 6, 1996, final hearing held in the instant case.

In addition to the testimony of these two witnesses, seven exhibits

(Petitioner's Exhibits 1 and 3 and Respondent's Exhibits 1 through 5) were

offered and received into evidence. (Petitioner's Exhibit 2 was also offered

and received into evidence, but it was subsequently withdrawn.)

At the close of the evidentiary portion of the November 6, 1996, final

hearing, the undersigned, on the record, advised the parties of their right to

submit proposed recommended orders and established a deadline (ten days from the

date of the close of the hearing) for the filing of these proposed recommended

orders. The Department timely filed a proposed recommended order on Monday,

November 18, 1996. The Department's proposed recommended order has been

carefully considered by the undersigned. To date Petitioner has not filed a

proposed recommended order.

FINDINGS OF FACT

Based upon the evidence adduced at hearing, and the record as a whole, the

following Findings of Fact are made:

The Request for Proposals

1. Through the issuance and distribution of a Request for Proposal and/or

Proposal Submittal Form (RFP), the Department's Region IV solicited the

submission of proposals from prospective lessors interested in leasing to the

Department office space in an area (more particularly described in the RFP) in

Broward County.

2. The RFP contained the following "General Specifications and

Requirements," among others:

1. Net square footage required: 9,196 (within

plus 3 percent tolerance) measured in accordance

with the Standard Method of Space Measurement

(Attachment A). NOTE: restrooms and mechanical

rooms are not to be included in calculating net

rentable square footage.

BIDDER RESPONSE: Net square feet available _______

(Space offered must be within the percent

required) . . .

2. Space to be located in the County of Broward,

Florida depicted in the following boundaries:

NORTH: N.W. 2nd Street,

N.E. 2nd Street

SOUTH: Davie Boulevard

EAST: Federal Highway, U.S. 1

WEST: S.W. 4th Avenue,

N.W. 7th Avenue

(See attached map (Attachment B). )

Proposals (bids) shall be considered responsive

if the space is within or abutting the specified

boundaries. Space for purpose of this paragraph

means the net square footage to be leased.

BIDDER RESPONSE: ____________ (address of proposed

location- mark location on Attachment B also).

Include zip code.

The offered space represents ____ percent of the

entire building.

4. Space to be made available on July 1, 1997 or

within 90 days after notification of award of

proposal, whichever occurs last. . . .

5. Term of lease: Five (5) years with an option

to renew for an additional Five (5) Years.

6. Services: Full Services to be provided by

lessor, including utilities, interior and exterior

maintenance, recycling services, garbage disposal,

janitorial services and supplies as specified in

Attachment C. . . .

10. Photographs and Floor Plans: As part of the

bidder's submittal, bidders are to provide:

a) A clear photograph or prospectus showing

exterior front, sides and rear of the proposed

facility.

b) A floor plan to scale . . . showing present

configurations with measurements that equate to

the net rentable square footage. The final floor

plan will be as described in the specifications

and as identified through consultation with the

Department.

BIDDER RESPONSE: Floor Plan and _____ Photograph(s)

are included as a part of this proposal. . . .

12. Existing building. The proposed space must

be an existing building. To be considered as

existing the proposed space must be dry and

measurable (capable of being physically measured).

To be considered as "Dry and Measurable" the

construction area of all floors of the building

including bathrooms, basement, mechanical equip-

ment rooms, stairways, penthouses, and the like

must be enclosed with floor, finished roof and

exterior walls with windows and doors installed,

so that the interior of the building will remain

dry during adverse weather conditions. The areas

mentioned must be clearly defined within the

building, but are not required to be completed,

to allow the actual occupiable (rental) area of

the building to be measured at the time of pro-

posal submittal. Renovations to bring the facility

into compliance with all applicable Federal, State

and local codes and regulations and/or to meet the

desired arrangements are permitted, if carried out

in accordance with prescribed procedures.

a) The facility must comply or be renovated

to comply with the requirements for Accessibility

by Handicapped Persons as mandated by Chapter

553, Sections 553.501-553.513, Florida Statutes,

and the latest Accessibility Requirements manual

published by the Department of Community Affairs,

(DCA) Florida Board of Building Codes and Stan-

dards, as well as the requirements of Public Law

101-336, July 26, 1990 known as the "Americans

with Disabilities Act of 1990" Appendix A to Part

36, "Standards for Accessible Design." The Lessor

agrees that the de[v]ised premises now conform, or

that, prior to Lessee's occupancy, that said

premise[s] shall, at the Lessor's expense, be

brought into compliance with all specified

requirements. (Attachment D).

Successful bidder will provide a floor plan

including a site plan of the parking areas for

ADA review. . . .

3. The RFP contained the following "Space Requirement Criteria," among

others:

1. Plans review fees for State leased buildings:

Floor plans are to be a joint effort of departmental

staff and the successful bidder. The successful

bidder is to provide architectural services by a

licensed architect to prepare renovation plans

per the 1991 Edition of NFPA 101. The final floor

plan is subject to department determination and

State Fire Marshall review and approval. . . .

See floor plan, Attachment H, for suggested

configuration of offices and rooms.

5 Offices not to exceed 120 sq. ft. each-

600 net sq/ft

55 Offices not to exceed 64 sq. ft each-

3,520 net sq/ft

File Areas- 84 net sq/ft

Reception Areas- 300 net sq/ft

Conference Room- 550 net sq/ft

Storage Areas with floor to ceiling shelves-

180 net sq/ft

Copy and Mail Distribution Room- 100 net sq/ft

Employee Lounge with sink/cabinets/counter top-

90 net sq/ft

Inactive File Room w/open shelves- 2,000 net sq/ft

Drug Testing Room*- 100 net sq/ft

MIS & Office Automation Terminals and Printers-

255 net sq/ft

Firearm Storage- 40 net sq/ft

Internal Circulation- 1,377 net sq/ft

*Must include: Adjoining restroom, stainless

steel sink, viewing window between testing room

and restroom, storage shelves and cabinets, and

dead bolt lock on testing room. This bathroom

is additional to restrooms referenced under

"Restrooms" . . .

8. Restrooms: (must meet requirements of

Americans with Disability Act of 1990 and the

requirements of the Accessibility by Handicapped

Persons, Section 553.504(12-13), Florida Statutes-

Attachment D):

Waterclosets- 1 Men's (Public); 1 Men's (Staff);

1 Women's (Public); 1 Women's (Staff)

Urinals- 1 Men's (Public); 1 Men's (Staff)

Lavatories w/mirrors- 1 Men's (Public); 1 Men's

(Staff); 1 Women's (Public); 1 Women's (Staff)

Note: If space is offered on more than one floor,

restroom facilities must be provided to code on

each floor in conformance with occupancy and code

requirements whichever is greater. . . .

4. The RFP contained the following "General Provisions," among others:

2. All bids accepted by the State are subject to

the State's terms and conditions and any and all

additional terms and conditions submitted by

bidders are rejected and shall have no force

and effect. . . .

5. All Proposal sheets must be executed and

submitted in a sealed and titled envelope,

enclosed in an outer envelope. The face of

the inner envelope shall contain, in addition

to the Department's address . . ., the date

and time of the bid opening and the lease

number. PROPOSALS NOT SUBMITTED ON THIS

PROPOSAL SUBMITTAL FORM SHALL BE REJECTED.

All proposals are subject to the conditions

specified herein. Those which do not comply

with these conditions are subject to rejection.

Each proposal shall be signed by the owner(s),

corporate officers, or legal representative(s).

The corporate, trade, or partnership title must

be either stamped or typewritten beside the

actual signature(s). . . .

7. The Department agrees to enter into a

lease agreement based on submission and accep-

tance of the proposal in the best interest of

the Department and the State.

8. The Department reserves the right to reject

any and all proposals for reason which shall

include, but not be limited to, the agency's

budgetary constraints; waive any minor infor-

mation or technicality in proposals, to accept

the proposal deemed to be the lowest and in the

best interest of the State, and if necessary,

to reinstate procedures for soliciting competitive

proposals. . . .

10. Late proposals, modification of proposals,

or withdrawal of proposals:

(a) Any proposal received at the office

designated in the solicitation after the exact

time specified for receipt will not be considered

and will be returned unopened.

(b) A proposal may be withdrawn in person by

a proposer or his/her authorized representative

provided his/her identity is made known and he/she

signs a receipt for the proposal, but only if the

withdrawal is made prior to the exact time set for

the receipt of proposals. . . .

13. Sealed proposals will be received until 10:00

a.m. on August 21, 1996 by Maria L. Cortes at 3810

Inverrary Blvd., Bldg. C, Suite 101 Conference Room,

Lauderhill, FL 33319, at which time all proposals

will be publicly opened and read aloud. Notification

of award will be made within 30 calendar days and

shall be given either by posting the proposal

tabulation at the location where the bids were

opened or by certified United States mail, return

receipt requested. . . .

14. A preproposal conference . . . will be held

at 10:00 a.m. on July 17, 1996 at 3810 Inverrary

Blvd., Bldg C, Suite 101, Conference Room, Lauder-

hill, FL 33319

5. "Attachment A" to the RFP was the "Standard Method of Space

Measurement," which was referenced in the "Net square footage required"

provision of the RFP's "General Specifications and Requirements." "Attachment

A" read as follows:

STANDARD METHOD OF SPACE MEASUREMENT

The purpose of this standard is to permit

communication and computation on a clear and

understandable basis. Another important purpose

is to allow comparison of values on the basis of

a generally agreed upon unit of measurement

(net square footage).

It should also be noted that this standard can

and should be used in measuring office space in

old as well as new buildings, leased office

space as well as State-owned office space. It

is applicable to any architectural design or

type of construction because it is based on

the premise that the area being measured is

that which the agency may occupy and use for

its furnishings and its people.

This standard method of measuring office space

measures only occupiable space, undistorted by

variance in design from one building to another.

It measures the area of office building that

actually has usable (rental) value and, therefore,

as a standard can be used by all parties with

confidence and with a clear understanding of

what is being measured. Area measurement in

office buildings is based in all cases upon the

typical floor plans, and barring structural

changes which affect materially the typical floor,

such measurements stand for the life of the

building, regardless of readjustments incident

to agency layouts.

All usable (rentable) office space, leased or

State-owned, shall be computed by:

Measuring to the inside finish of permanent outer

building walls to the office side of corridors

and/or other permanent partitions, and to the

center of partitions that separate the premises

from adjoining usable areas. This usable

(rentable) area shall EXCLUDE: bathrooms,

stairs, elevator shafts, flues, pipe shafts,

vertical ducts, air-conditioning rooms, fan

rooms, janitor closet, electrical closets-- and

such other rooms not actually available to the

tenant for his furnishings and personnel--- and

their enclosing walls.

No deductions shall be made for columns and

projections necessary to the building.

Pre-Proposal Conference

6. A pre-proposal conference was held, as scheduled, to give prospective

lessors the opportunity to receive from the Department answers to questions they

had regarding the RFP.

7. The Department emphasized to those prospective lessors who attended the

pre-proposal conference that, as indicated in the "Net square footage required"

provision of the RFP's "General Specifications and Requirements," it would not

accept a proposal offering space with a "net square footage" of less than 9,196

square feet.

8. Petitioner did not send a representative to the pre-proposal

conference.

Petitioner's Proposal

9. Two proposals were submitted in response to the RFP.

10. One of these proposals was submitted by Petitioner, which offered the

Department the entire space in a two-story building located at 609 South Andrews

Avenue in Fort Lauderdale, Florida (Petitioner's Building). In its proposal,

Petitioner indicated that the "net square feet available" in its building was

9,370.

11. Along with its proposal, Petitioner submitted to the Department

existing and proposed floor plans.

12. There are currently two restrooms on the first floor of Petitioner's

Building and two restrooms on the second floor of the building.

13. None of these restrooms meets the accessibility requirements

prescribed in the RFP.

14. It is Petitioner's intention, if it is awarded the lease by the

Department, to eliminate these existing restrooms and replace them with

restrooms to be constructed adjacent to the existing structure in space that is

not now, nor was it at the time of the submission of Petitioner's proposal, "Dry

and Measurable," as that term is defined in the "Existing building" provision of

the RFP's "General Specifications and Requirements."

15. These intentions of Petitioner's were reflected in the materials

Petitioner submitted to the Department along with its proposal.

The Department's Initial Evaluation of the Responsiveness of the Two Proposals

16. Douglas Sweredoski is the Facilities Services Manager Assistant for

the Department's Region IV. He is a certified real estate appraiser.

17. On or about September 15, 1996, Sweredoski went to Petitioner's

Building and measured the dimensions of the building (and certain of its

component parts), using an electronic measuring device, to ascertain whether the

building had the "net square footage required" by the RFP.

18. Employing the "Standard Method of Space Measurement," Sweredoski

reasonably determined that Petitioner's Building had less than the "net square

footage required" by the RFP and that therefore Petitioner's proposal was not

responsive to the RFP.

19. The other proposal that the Department received was also deemed to be

non-responsive (a determination that has not been challenged).

The Department's Notice of Rejection of Proposals

20. Having determined that both proposals it had received were materially

non-responsive, the Department, by letter dated September 19, 1996, informed

Petitioner of the following:

This letter is to inform you that the Department

of Corrections has determined that it is in the

best interest of the State of Florida to reject

all bids submitted for the above referenced

lease [Lease No. 700:0754]. A new Request for

Proposal will be issued soon.

This letter constitutes agency action concerning

the referenced bid. You have seventy-two (72)

hours from receipt of this letter to file a

written notice of protest to this action, and ten

(10) days after filing such written notice of

protest to file a formal written protest. All

documents should be addressed to the undersigned

at 3810 Inverrary Boulevard, Building C, Suite 101,

Lauderhill, Florida 33319. Failure to file a

protest within the times prescribed in Section

120.53(5), Florida Statutes, shall constitute a

waiver of proceedings under Chapter 120, Florida

Statutes.

Petitioner's Protest

21. Petitioner timely protested the Department's decision to reject

Petitioner's proposal and to issue a new RFP.

Sweredoski's Return to Petitioner's Building

22. On or about October 1, 1996, Sweredoski returned to Petitioner's

Building to verify the accuracy of the measurements that he had obtained (using

an electronic device) during his earlier visit to the building.

23. On this follow-up visit to the building, Sweredoski used a mechanical

device (more specifically, a tape measure) to measure the dimensions of the

building (and certain of its component parts).

24. The measurements he obtained during this second visit were "very

close" to the measurements he had obtained during his previous visit.

25. Sweredoski, employing (as he had during his earlier visit) the

"Standard Method of Space Measurement," reasonably determined that Petitioner's

Building had a "net square footage" of 8,731 net square feet (a "gross square

footage" of 9,369 square feet minus: 271 square feet for the existing stairway

leading from the first to the second floor; 110 square feet for the existing

telephone/mechanical closet on the second floor; and 257 square feet for the

existing bathrooms on the first and second floors).

Referral of Petitioner's Protest to the Division

26. On October 10, 1996, the Department referred Petitioner's protest to

the Division.

CONCLUSIONS OF LAW

27. With certain exceptions not applicable to the instant case, state

agencies (including the Department) may not "enter into a lease as lessee for

the use of 3,000 square feet or more of space in a privately owned building

except upon advertisement for and receipt of competitive bids and award to the

lowest and best bidder." Section 255.25(3), Fla. Stat. (Supp. 1996); Rule 60H-

1.015, Fla. Admin. Code.

28. It has been said on more than one occasion that competitive bidding

requirements, such as those imposed upon state agencies seeking to lease 3,000

square feet or more of space in privately owned buildings, have as their purpose

and object the following:

[T]o 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

various forms; to secure the best values for

the [public] at the lowest possible expense;

and to afford an equal advantage to all desiring

to do business with the [government], by affording

an opportunity for an exact comparison of bids.

Wester v. Belote, 103 Fla. 976, 138 So. 721, 723-24 (Fla. 1931); Harry Pepper

and Associates, Inc. v. City of Cape Coral, 352 So.2d 1190, 1192 (Fla. 2d DCA

1977).

29. In soliciting and accepting competitive bids/proposals for space of

3,000 square feet or more in privately owned buildings, a state agency has wide

discretion. See D.O.T. v. Groves-Watkins Constructors, 530 So.2d 912, 913 (Fla.

1988); Liberty County v. Baxter's Asphalt and Concrete, Inc., 421 So.2d 505,

507 (Fla. 1982).

30. Its discretion with respect to these matters, while broad, is not

unbridled. It must exercise its discretion in a manner that is not illegal,

dishonest, fraudulent, arbitrary, unreasonable, capricious or in any other way

that would subvert or undermine the purpose and object of competitive bidding.

See D.O.T. v. Groves-Watkins Constructors, 530 So.2d 912, 913-14 (Fla. 1988);

Caber Systems v. Department of General Services, 530 So.2d 325, 336 (Fla. 1st

DCA 1988); Couch Construction Company, Inc. v. Department of Transportation,

361 So.2d 172, 175 (Fla. 1st DCA 1978); Wood-Hopkins Contracting Company v.

Roger J. Au and Son, Inc., 354 So.2d 446, 450 (Fla. 1st DCA 1978).

31. In soliciting competitive bids/proposals from prospective lessors, an

agency must provide specifications to prospective lessors which should set

forth, among other things, (as did the RFP in the instant case) the

"[a]pproximate net square footage required [by the agency], to be measured in

compliance with the Department of Management Services' Standard Method of Space

Measurement, pursuant to Rule 60H-2.003(2), Florida Administrative Code." Rule

60H-1.015(3)(b)1, Fla. Admin. Code. (Rule 60H-2.003(2), Florida Administrative

Code, provides as follows:

Usable space is floor space that has usable

value. It does not include outer building

walls but includes space covered by interior

walls. If an interior wall separates spaces

occupied by two tenants, half of the wall is

included in each tenant's measurement. Usable

space does not include bathrooms, stairs, exit

stair passageways, public corridors, main

entrance lobbies, elevator lobbies, elevator

shafts, flues, furnaces, pipe shafts, vertical

ducts, air conditioning rooms, fan rooms,

janitor closets, and such other equipment and

building support rooms not actually available

to the tenant for furnishings and personnel

and their enclosing walls. Usable space

includes columns and projections necessary to

the building. Any other corridors are usable,

chargeable space and, if shared by agencies,

shall be prorated.)

32. Bids/proposals submitted by prospective lessors must "specifically

respond but need not be limited to each item included in the specifications."

Rule 60H-1.015(4)(a), Fla. Admin. Code.

33. The agency has the discretion "to accept or reject any or all

bids[/proposals] submitted and if necessary [to] reinitiate procedures for

soliciting competitive proposals." Rule 60H-1.015(5), Fla. Admin. Code.

34. In determining whether to accept or reject a bid/proposal, the agency

may not use criteria that were not set forth in the invitation to bid/request

for proposals. See Air Support Services International, Inc. v. Metropolitan

Dade County, 614 So.2d 583, 584 (Fla. 3d DCA 1993)("[p]ublic bid requirements

may not be materially altered subsequent to the submission of bids").

35. Furthermore, the agency may not accept a bid/proposal that is

materially at variance with the bid/proposal specifications. "[A]lthough a

bid/proposal containing a material variance is unacceptable, not every deviation

from the [bid/proposal specifications] is material. It is only material if it

gives the bidder a substantial advantage over the other bidders and thereby

restricts or stifles competition." Tropabest Foods, Inc. v. Department of

General Services, 493 So.2d 50, 52 (Fla. 1st DCA 1986). If it does not provide

the bidder with such a palpable competitive advantage, it constitutes a minor

irregularity that should be waived by the agency. See Robinson Electrical Co.,

Inc. v. Dade County, 417 So.2d 1032, 1034 (Fla. 3d DCA 1982).

36. An unsuccessful bidder/proposer may file a protest with the soliciting

state agency challenging the agency's lease award or, if no award has been made,

the agency's decision to reject all bids/proposals. The protest must be

resolved in accordance with the rules adopted by the agency pursuant to Section

120.57(3), Florida Statutes (Supp. 1996), which provides, in part, as follows:

An agency which enters into a contract pursuant

to the provisions of . . . chapter 255 . . .

shall adopt rules specifying procedures for the

resolution of protests arising from the contract

bidding process. Such rules shall at least

provide that:

(a) The agency shall provide notice of its

decision or intended decision concerning a bid

solicitation or contract award as follows:

1. For a bid solicitation, notice of a

decision or intended decision shall be given by

United States mail or by hand delivery.

* * *

3. For any other agency decision, notice

of a decision or intended decision shall be

given either by posting the bid tabulation at

the location where bids were opened or by

certified United States mail or other express

delivery service, return receipt requested.

(a) The notice required by this paragraph

shall contain the following statement: "Failure

to file a protest within the time prescribed

in s. 120.57(3), Florida Statutes, shall con-

stitute a waiver of proceedings under chapter

120, Florida Statutes."

(b) 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 bid tabulation or after receipt of the notice

of the agency decision or intended decision and

shall file a formal written protest within 10 days

after filing the notice of protest. With respect

to a protest of the specifications contained in

an invitation to bid or in a request for proposals,

the notice of protest shall be filed in writing

within 72 hours after the receipt of notice of

the project plans and specifications or intended

project plans and specifications in an invitation

to bid or request for proposals, and 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. The

formal written protest shall state with particu-

larity the facts and law upon which the protest

is based.

* * *

(d)1. The agency shall provide an opportunity

to resolve the protest by mutual agreement between

the parties within 7 days, excluding Saturdays,

Sundays, and legal holidays, after receipt of a

formal written protest.

2. If the subject of a protest is not resolved

by mutual agreement within 7 days, excluding

Saturdays, Sundays, and legal holidays, after

receipt of the formal written protest, and if

there is no disputed issue of material fact,

an informal proceeding shall be conducted

pursuant to subsection (2) and applicable agency

rules before a person whose qualifications have

been prescribed by rules of the agency.

3. If the subject of a protest is not resolved

by mutual agreement within 7 days, excluding

Saturdays, Sundays, and legal holidays, after

receipt of the formal written protest, and if

there is a disputed issue of material fact, the

agency shall refer the protest to the [D]ivision

[of Administrative Hearings] for proceedings

under subsection (1).

(e) Upon receipt of a formal written protest

referred pursuant to this subsection, the

director of the [D]ivision shall expedite the

hearing and assign an administrative law judge

within 30 days after the receipt of the formal

written protest by the [D]ivision and render a

recommended order within 30 days after the

hearing or within 30 days after receipt of the

hearing transcript 8/ or hearing videotape by

the administrative law judge, whichever is later.

The provisions of this paragraph may be waived

upon stipulation by all parties.

(f) In a competitive-procurement protest, no

submissions made after the bid or proposal

opening amending or supplementing the bid or

proposal shall be considered. Unless 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, 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 bid or proposal specifications. The

standard of proof for such proceedings shall be

whether the proposed agency action was clearly

erroneous, contrary to competition, arbitrary,

or capricious. In any bid-protest proceeding

contesting an intended agency action to reject

all bids, the standard of review by an adminis-

trative law judge shall be whether the agency's

intended action is illegal, arbitrary, dishonest,

or fraudulent.

37. Section 120.57(3)(f), Florida Statutes (Supp. 1996), represents: (1)

a codification of the holding in D.O.T. v. Groves-Watkins Constructors, 530

So.2d 912, 913 (Fla. 1988) that, where a state agency's decision to reject all

bids/proposals is challenged, "the hearing officer's 9/ sole responsibility is

to ascertain whether the agency acted fraudulently, arbitrarily, 10/

illegally, or dishonestly" in making its decision; and (2) a rejection of the

view (expressed in such post-Groves-Watkins cases as Moore v. Department of

Health and Rehabilitative Services, 596 So.2d 759, 761 (Fla. 1st DCA 1992))

that, in bid/proposal protest cases not involving the rejection of all

bids/proposals, the scope of inquiry is similarly limited and that "[d]e novo

consideration" is inappropriate.

38. In the instant case, Petitioner is challenging the Department's

decision to reject (as materially non-responsive) all proposals (including

Petitioner's) submitted in response to the Department's request for proposals

for Lease No. 700:0754. Petitioner contends that the Department's decision was

arbitrary inasmuch as its proposal met all of the requirements of the RFP,

including the "Net square footage required" provision of the RFP's "General

Specifications and Requirements." According to Petitioner (which has not

challenged the Department's decision to reject the other proposal submitted in

response to the RFP), the Department's "staff committed error in measuring

Petitioner's building."

39. Pursuant to Section 120.57(3)(f), Florida Statutes (Supp. 1996), the

burden was on Petitioner (at the Section 120.57(1) hearing held in this case) to

prove (by a preponderance of the evidence 11/ ) its allegation that the

Department acted arbitrarily in rejecting all proposals submitted in response to

the RFP and that therefore the Department's action should be overturned.

40. Petitioner failed to meet its burden of proof.

41. There has been no showing that the Department's decision to reject (as

materially non-responsive) Petitioner's proposal on the ground that the building

offered by Petitioner had less than the "Net square footage required" by the RFP

was anything other than the product of the honest exercise of the Department's

discretion which was based upon a reasonable interpretation of the pertinent

provisions of the RFP, as well as reasonably accurate measurements of the

dimensions of Petitioner's Building and its component parts.

42. By all appearances, the Department acted within the bounds of reason

and logic, and not arbitrarily, in rejecting Petitioner's proposal. 12/

43. Accordingly, the Department's decision to reject Petitioner's proposal

and "to reinitiate procedures for soliciting competitive proposals" for Lease

No. 700:0754 should not be overturned.

RECOMMENDATION

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

hereby

RECOMMENDED that the Department of Corrections enter a final order denying

Petitioner's protest of the Department's decision to reject all proposals

(including Petitioner's) submitted in response to the Department's request for

proposals for Lease No. 700:0754.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 21st day of

November, 1996.

___________________________________

STUART M. LERNER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 21st day of November, 1996.

ENDNOTES

1/ Effective October 1, 1996, the provisions in Florida's Administrative

Procedure Act applicable to bid protests were revised and moved from Section

120.53(5) to Section 120.57(3), Florida Statutes.

2/ Section 255.25(3)(c), Florida Statutes (Supp. 1996), provides, in pertinent

part, as follows:

Any person who files an action protesting a decision or intended decision

pertaining to a competitive bid for space to be leased by the agency pursuant to

s. 120.57(3)(b) shall post with the state agency at the time of filing the

formal written protest a bond payable to the agency in an amount equal to 1

percent of the estimated total rental of the basic lease period, or $5,000,

whichever is less, which bond shall be conditioned upon the payment of all costs

which may be adjudged against him or her in the administrative hearing in which

the action is brought and in any subsequent appellate court proceeding. . . .

3/ Section 120.57(3)(b), Florida Statutes (Supp. 1996), mandates that a "formal

written protest . . . state with particularity the facts and law upon which the

protest is based."

4/ In his order, the undersigned advised that Respondent's Motions would be

"treated as motions requesting the entry of a recommended order of dismissal

inasmuch as the undersigned does not have final order authority in the instant

case." In addition, he made the following comments:

Referring a bid protest that, on its face, is legally insufficient to the

Division of Administrative Hearings for the entry of a recommended order of

dismissal results in unnecessary delay. When an agency is presented with such a

facially insufficient bid protest, it should, in keeping with the intent of the

Legislature (expressed in Section 120.57(3), Florida Statutes [Supp. 1996]),

that bid protests be resolved expeditiously, act swiftly to dispose of the

protest and not seek a recommendation from the Division of Administrative

Hearings before deciding what action to take. See D.A.B. Contractors, Inc., v.

Department of Transportation, 656 So.2d 940, 942 (Fla. 1st DCA 1995).

5/ These attached documents included: an October 20, letter from Aubrey B.

Hutchison, Jr., PE, to Petitioner's representative in this case; an October 21,

1996, letter from Petitioner's representative to the Department's counsel of

record in this case; and an October 22, 1996, letter from Howard Craft,

Petitioner's real estate broker, to the Department's counsel of record.

6/ In imposing this deadline, the undersigned noted that "[t]he requirement of

Section 255.25(3)(c), Florida Statutes [Supp. 1996], that a bond be posted at

the time of the filing of the formal protest . . . is not jurisdictional and

therefore Respondent [the Department] is required to give a protestant like

Petitioner 'notice and a reasonable opportunity to post the bond before denying

the protest solely because of failure to post the bond.' ABI Walton Insurance

Company v. Department of Management Services, 641 So.2d 967, 968-69 (Fla. 1st

DCA 1994)."

7/ Section 120.569(2)(g), Florida Statutes (Supp. 1996), provides as follows:

When official recognition is requested, the parties shall be notified and

given an opportunity to examine and contest the material.

8/ In the instant case, the hearing transcript was received by the undersigned

on November 15, 1996.

9/ Pursuant to Chapter 96-159, Laws of Florida, the title of the undersigned

and of all other Hearing Officers of the Division was changed to Administrative

Law Judge, effective October 1, 1996.

10/ "An arbitrary decision is one not supported by facts or logic, or

despotic." Agrico Chemical Company v. Department of Environmental Regulation,

365 So.2d 759, 763 (Fla. 1st DCA 1978). "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 [not]

arbitrary." Dravo Basic Materials Company, Inc., v. Department of

Transportation, 602 So.2d 632, 634 n.3 (Fla. 2d DCA 1992).

11/ "'As a general rule the comparative degree of proof by which a case must be

established is the same before an administrative tribunal as in a judicial

proceeding- that is, a preponderance of the evidence. It is not satisfied by

proof creating an equipoise, but it does not require proof beyond a reasonable

doubt.'" Florida Department of Health and Rehabilitative Services v. Career

Service Commission, 289 So.2d 412, 415 (Fla. 4th DCA 1974); see also Section

120.57(1)(h), Fla. Stat. (Supp. 1996)("[f]indings of fact shall be based on a

preponderance of the evidence, except in penal or licensure disciplinary

proceedings or except as otherwise provided by statute"); Cf. Board of Trustees

of the Internal Improvement Trust Fund v. Levy, 656 So.2d 1359, 1363 (Fla. 1st

DCA 1995)("[t]he burden of proving abuse of agency discretion is upon the

challenger of the rule, who must meet that burden with a preponderance of the

evidence").

12/ If the Department had accepted Petitioner's proposal, notwithstanding the

proposal's "net square footage" deficiency, it would have been unfair to any

prospective lessors who did not submit proposals in response to the RFP, but who

would have done so had they known that, contrary to what had been indicated in

the RFP, the Department would accept a proposal which, like Petitioner's,

offered less than 9,196 net square feet of space, as measured in accordance with

the "Standard Method of Space Measurement" set forth in "Attachment A" to the

RFP. Should the Department now be willing to lease space which, like

Petitioner's Building, has a "net square footage" of less than 9,196 net square

feet, it should issue a new RFP so indicating in order to afford other

prospective lessors interested in leasing such space to the Department a fair

opportunity to compete with Petitioner for the lease.

COPIES FURNISHED:

Gregory L. Jackson

Lonnie Jackson Revocable Trust

601 Andrews Avenue

Fort Lauderdale, Florida 33301

Howard Craft

108 Southeast 8th Avenue, Suite 116

Fort Lauderdale, Florida 33301

Daniel Te Young

Assistant General Counsel

Department of Corrections

2601 Blair Stone Road

Tallahassee, Florida 32399-2500

Harry K. Singletary, Jr., Secretary

Department of Corrections

2601 Blair Stone Road

Tallahassee, Florida 32399-2500

Louis A. Vargas, General Counsel

Department of Corrections

2601 Blair Stone Road

Tallahassee, Florida 32399-2500

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this recommended

order. All agencies allow each party at least 10 days in which to submit

written exceptions. Some agencies allow a larger period of time within which to

submit written exceptions. You should contact the agency that will issue the

final order in this case concerning agency rules on the deadline for filing

exceptions to this recommended order. Any exceptions to this recommended order

should be filed with the agency that will issue the final order in this case.