99-003600BID Capital Properties Group, Inc. vs. Department Of Corrections Status: Closed Recommended Order on Friday, May 19, 2000.

Summary: Agency properly rejected all bids for budgetary considerations, and because one bidder was next to schools and playgrounds, even though those considerations were not included in the request for proposals as basis to disqualify bidder.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CAPITAL PROPERTIES GROUP, INC., )

)

Petitioner, )

)

vs. ) Case No. 99- 3600BID

)

DEPARTMENT OF CORRECTIONS, )

)

Respondent. )

___________________________________)

RECOMMENDED ORDER

Pursuant to notice the Division of Administrative Hearings

by its duly designated Administrative Law Judge, Mary Clark, held

a formal hearing in the above-styled case by videoconference on

February 10, 2000. The Administrative Law Judge presided from

Tallahassee, Florida; the parties, their counsel, and witnesses

participated from Fort Myers, Florida.

APPEARANCES

For Petitioner: Robert A. Sweetapple, Esquire

Sweetapple, Broeker & Varkas

165 East Boca Raton Road

Boca Raton, Florida 33432-3911

For Respondent: Obed Dorceus, Esquire

Department of Corrections

2601 Blairstone Road

Tallahassee, Florida 32399-2500

STATEMENT OF THE ISSUE

The issue for disposition in this proceeding is whether the

Department of Corrections acted fraudulently, arbitrarily,

illegally, or dishonestly when it rejected all bids in lease

no. 700:0820.

PRELIMINARY MATTERS

After receiving a letter stating that the Department of

Corrections was rejecting all bids for lease no. 700:0820,

Capital Properties Group, Inc., filed its formal protest on

July 29, 1999.

The protest was forwarded to the Division of Administrative

Hearings with the parties' request that the hearing not be

conducted before September 16, 1999.

On September 20, 1999, the parties filed a Joint Motion for

Continuance and later requested an abeyance of the case during

protracted settlement negotiations. When those negotiations

failed the hearing was rescheduled and proceeded as described

above.

At the hearing the Capital Properties Group, Inc. presented

testimony of Robert Harrison and Malcom Wilson. Its exhibits

marked Petitioner's Exhibits Nos. 1-6 were received in evidence.

The Department of Corrections presented testimony of Joseph

Papy (by deposition, without objection) and Raymond Bockner. Its

Exhibits Nos. 1-7 were received into evidence.

The parties requested and received leave to file their

proposed recommended orders within 15 days of the filing of the

transcript. The Transcript was filed March 31, 2000. The

Proposed Recommended Orders have been considered in the

preparation of this Recommended Order. The parties' submittals

reflect very little dispute as to the material facts.

FINDINGS OF FACT

1. On or about May 9, 1999, the Department of Corrections

(DOC or agency) issued a request for proposals ( RFP) for the

agency's Probation and Parole Office in Fort Myers, Florida

(lease no. 700:0820).

2. The RFP sought approximately 5225 square feet of space,

plus or minus 3 percent. The RFP required that bidders indicate

in their proposals whether the space being offered was within one

quarter mile of the following:

a school for children in grade 12

or lower,

a licensed day care facility,

a park or playground,

a nursing home,

a convalescent center,

a hospital,

an association for disabled

population,

a mental health center,

a youth center, or

a group home for disabled

population.

3. Two proposals were submitted: one from Capital

Properties Group, Inc. (Capital), and one from Offilock, Inc.

( Offilock), the entity currently providing office space for the

Probation and Parole Office.

4. Both bids were found to be responsive and were evaluated

on or about July 7, 1999. According to the RFP criteria the

evaluation team considered the following: fiscal costs (base and

options period rental rate), moving costs, location (including

proxmity to the Justice Center, public transportation, and

clients, as well as security issues), and the facility (layout

and future expansion).

5. Offilock's bid included lease rates higher than the

rates set for the geographical region by the Department of

Management Services ( DMS). Capital's bid provided lease rates at

the highest end of DMS' rates.

6. While DOC is required to consider DMS' rates, it is not

bound by those rates and higher rates would not automatically

disqualify a bidder. Still, DOC was concerned with reducing its

office lease costs either by reducing the rental rates or by

reducing the space requirements. The agency had hoped to obtain

a lease rate at the low-to-mid range of DMS' rates.

7. The evaluation committee rated Capital higher than

Offilock in the fiscal category but substantially lower than

Offilock in the remaining categories. The final scores for the

two bidders were Capital: 242; Offilock: 328.

8. In its response to the question described in paragraph

2, above, regarding location, Capital indicated that its space is

within one quarter mile of a school for children in grade 12 or

lower. It responded "no," as to the other facilities.

Offilock's space is not within one quarter mile of any of the

facilities.

9. During site visits DOC staff noted that Capital's

building abutts a school for children in grades pre-kindergarten

through eight, with a playground approximately 30 feet from the

proposed office. Across the street from the building is another

school for elementary through high-school children. Also across

the street is a church with a children's outdoor play area.

10. The office which is the subject of lease no. 700:0820

serves approximately 1100 felony probationers, including sexual

offenders, drug offenders, and other felons. Most are required

to report to the office at least once a month.

11. Nothing in the RFP for lease no. 700:820 specifies that

a property will be disqualified because of proximity to a school

or other facility listed in paragraph 2 above. Instead, Section

945.28, Florida Statutes, requires that the DOC provide newspaper

notice and written notice to the county or city manager whenever

the agency intends to lease or purchase probation and parole

office space. DOC complied with this requirement.

12. Before any complaints were received, on July 13, 1999,

DOC General Services Manager Malcolm Wilson sent a letter to both

Capital and Offilock stating that the agency was rejecting all

bids for this project as not being in the best interests of the

State of Florida. The letter thanked the bidders and stated they

would be given an opportunity to bid on a new package.

13. Although there was some concern initially that

Capital's property might not be zoned for a probation and parole

office, that concern was eliminated with a letter from the Lee

County Department of Community Development.

14. In their testimony at hearing and in their pre-

rejection internal memoranda, DOC staff explained that the bases

for rejecting all bids were lease costs and the immediate

proximity of Capital's offered property to schools and

playgrounds. The staff responsible for the decision in lease

no. 700:0820 were concerned about public safety and negative

responses by the community. In other similar cases in the past

the agency has experienced objections by the community.

15. Since July 1999, DOC has included in other probation

and parole office RFPs the provision that such offices may not be

located within one quarter mile of the facilities listed in

Section 945.28, Florida Statutes.

CONCLUSIONS OF LAW

16. The Division of Administrative Hearings has

jurisdiction in this proceeding pursuant to Section 120.57(1) and

(3), Florida Statutes.

17. Capital must prove by a preponderance of the evidence

that DOC's intended rejection of all bids is illegal, arbitrary,

dishonest, or fraudulent. See Section 120.57(3)(f), Florida

Statutes. This standard codifies the standard established by the

Florida Supreme Court in Department of Transportation v. Groves -

Watkins Constructors , 530 So. 2d 912 (Fla. 1988) and, as a review

standard, is contrasted with the statutory mandate that in

competitive procurement protests the role of the administrative

Law Judge is a de novo determination of 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 [other than rejection

of all bids] shall be whether the

proposed agency action was clearly

erroneous, contrary to competition,

arbitrary, or capricious. (Section

120.57(3)(f), Florida Statutes)

18. Capital argues that its bid may not be rejected as it

was fully responsive to the RFP. This argument ignores the

agency's sole discretion to accept or reject all bids and to

reinitiate the solicitation process. See Rule 96-60H-015(5)(a),

Florida Administrative Code, and Executive Ventures v. Department

of Children and Families , 1997 WL 1052877 (DOAH no. 96- 5852BID,

Final Order entered 8/27/97). Rejection of all bids may be based

on the "best interests of the state" and on budgetary

constraints. See Rule 60H-1.029(3), Florida Administrative Code.

19. "[A]n agency's rejection of all bids must stand, absent

a showing that the 'purpose or effect of the rejection is to

defeat the object and integrity of competitive bidding.'" Gulf

Real Properties, Inc. v. Department of Health and Rehabilitative

Services , 687 So. 2d. 1336 (Fla. 1st DCA 1997). There was no

evidence whatsoever in this proceeding to suggest that the

agency's stated reasons for rejection were merely pretext.

20. Capital failed to meet its burden of proving that DOC's

intended action is illegal, arbitrary, dishonest, or fraudulent.

The purpose of the action according to uncontroverted evidence

was to safeguard community security, to avoid public controversy,

and to further agency goals to reduce rental costs.

21. Capital seeks to reverse the agency's

rejection of all bids and to obtain an order awarding the lease

to the "lowest and best bidder." See Capital's Proposed

Recommended Order, page 17. Presumably Capital considers itself

the "lowest and best bidder," but has failed to prove in this

proceeding that it is any more than the "lowest" bidder. The

evaluation committee otherwise ranked Capital's proposal

substantially lower than that of Offilock. Assuming that it

could successfully require that a bidder be selected, Capital has

failed to establish that it, and not its competitor, should be

awarded the lease.

RECOMMENDATION

Based on the foregoing, it is hereby

RECOMMENDED: That the protest of Capital Properties Group,

Inc., be dismissed.

DONE AND ENTERED this 19th day of May, 2000, in Tallahassee,

Leon County, Florida.

___________________________________

MARY CLARK

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 19th day of May, 2000.

COPIES FURNISHED:

Robert A. Sweetapple, Esquire

Sweetapple, Broeker & Varkas

165 East Boca Raton Road

Boca Raton, Florida 33432-3911

Obed Dorceus, Esquire

Department of Corrections

2601 Blairstone Road

Tallahassee, Florida 32399-2500

Louis A. Vargas, General Counsel

Department of Corrections

2601 Blairstone Road

Tallahassee, Florida 32399-2500

Michael W. Moore, Secretary

Department of Corrections

2601 Blairstone Road

Tallahassee, Florida 32399-2500

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.