00-003520BID Lauderdale Market Place Investments, L.L.C. vs. Department Of Juvenile Justice Status: Closed Recommended Order on Friday, July 27, 2001.

Summary: Agency`s inability to provide facts or logic to justify rejection of all bids is arbitrary and violates term of Request for Proposals requiring "strong justification" to reject all bids.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LAUDERDALE MARKET PLACE )

INVESTMENTS, L.L.C. , )

)

Petitioner , )

)

vs. ) Case No. 00-3520BID

)

FLORIDA DEPARTMENT OF )

JUVENILE JUSTICE , )

)

Respondent , )

)

and )

)

SUNRISE POINT I, LTD. and )

HIGH GLEN DEVELOPMENT, LTD. , )

)

Intervenors. )

_________________________________)

SUNRISE POINT I, LTD. , )

)

Petitioner , )

)

vs. ) Case No. 00-3522BID

)

FLORIDA DEPARTMENT OF )

JUVENILE JUSTICE , )

)

Respondent , )

)

and )

)

)

LAUDERDALE MARKET PLACE )

INVESTMENTS, L.L.C. and )

HIGH GLEN DEVELOPMENT, LTD. , )

)

Intervenors. )

_________________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in these

cases by video teleconference on April 6, 2001, with the

parties appearing in Tallahassee, Florida, and with witnesses

testifying from Fort Lauderdale, Florida, before J. D.

Parrish , a designated Administrative Law Judge of the Division

of Administrative Hearings.

APPEARANCES

For Petitioner : Daniel H. Thompson, Esquire

Berger, Davis & Singerman

215 South Monroe Street, Suite 705

Tallahassee, Florida 32301

For Respondent : Brian D. Berkowitz, Esquire

Assistant General Counsel

Office of General Counsel

Department of Juvenile Justice

2737 Centerview Drive

Tallahassee, Florida 32399-3100

STATEMENT OF THE ISSUE

Whether the decision to reject all bids for Lease No.

800:0187 is illegal, arbitrary, dishonest, or fraudulent under

the provisions of Section 120.57(3), Florida Statutes, or

violates the terms of the Request for Proposal.

PRELIMINARY STATEMENT

Petitioner/Intervenor, Lauderdale Market Place

Investments, L.L.C. (Lauderdale or Petitioner), filed a Formal

Written Protest and Petition for Administrative Proceedings

with the Respondent, Department of Juvenile Justice

(Department or Respondent), on August 7, 2000. This protest

contested the Department's decision of July 24, 2000. The

Department's decision, to reject all bids for Lease No.

800:0187, was also protested by Sunrise Point I, LTD

(Sunrise). That case, assigned DOAH Case No. 00-3522BID, was

withdrawn and abandoned by Sunrise on April 5, 2001.

Accordingly, DOAH Case No. 00-3522BID is hereby closed.

Jurisdiction in that matter is relinquished to the Department.

As to this case, DOAH Case No. 00-3520BID, the Petitioner

has alleged that the Department's decision to reject all bids

is illegal, arbitrary, dishonest, or fraudulent. Moreover,

the Petitioner maintains that such action is contrary to

Section M of the Request for Proposal ( RFP ) as the Department

has not established "strong justification" for its decision.

A third group, High Glen Development, Ltd. and Rossland

Real Estate Ltd. (Intervenor), whose request to intervene in

the proceedings had been granted also withdrew and abandoned

its claim in this cause. Accordingly, the matter went to

hearing with only Petitioner presenting evidence in opposition

to the Department's decision.

The Petitioner presented testimony from Alan Taylor and

Mary Goodwin. The Petitioner's Exhibits numbered 1-5 were

admitted into evidence. The Department presented testimony

from Perry Anderson. The Respondent's exhibit, marked for

identification as DJJ Exhibit 1, was also received in

evidence. Joint Exhibits numbered 1-12 were received by

stipulation of the parties.

The transcript of these proceedings was filed on May 7,

2001. Thereafter, an Unopposed Motion for Extension of Time

to file Proposed Recommended Orders was granted. The parties

timely filed Proposed Recommended Orders that have been fully

considered in the preparation of this order.

FINDINGS OF FACT

1. Prior to May 17, 1999, the Department issued a RFP

for office space seeking to lease approximately 14,420

contiguous square feet of space located in Broward County,

Florida. This lease, designated 800:0187 in this record, was

to run for a basic term of seven years with three two-year

renewal options. The RFP specified the lessor was to provide

full services and 60 parking spaces.

2. In response to the RFP, the Petitioner, Sunrise, and

Intervenor timely submitted proposals. The space proposed by

Petitioner complied with the requirements of the RFP.

Additionally, the Petitioner's submittal was well within the

Department's acceptable rate range.

3. On May 17, 1999, the Department issued an intended

award to Sunrise for lease 800:0187. Sunrise was deemed the

lowest responsive bidder. All objections to the award to

Sunrise were resolved or withdrawn.

4. For reasons not clearly documented in this record,

the Department withdrew its decision to award the lease to

Sunrise. The agency action, posted on June 12, 2000, some 13

months after the initial posting, stated Sunrise had not

performed and recommended Lauderdale as the second-ranked

entity that had responded to the RFP.

5. Both Sunrise and the Intervenor timely filed protests

to the proposed award to Lauderdale. The Petitioner filed

motions with the Department to dismiss and intervene in those

protests. As of the date of the final hearing in the instant

case, the Department had not resolved or referred those

protests to the Division of Administrative Hearings.

6. Instead, on July 24, 2000, the Department issued a

notice stating it would reject all bids for lease 800:0187 and

rescind the award to Lauderdale. In reaching this decision,

the Department stated it "cannot determine its space needs

until after the pending Department reorganization is

complete."

7. If the Department was being "reorganized" such

reorganization would have been known to the Department on

June 12, 2000 . No legislative or administrative action was

taken to require reorganization between June 12, 2000 and

July 24, 2000.

8. The Department determined that its decision of

July 24, 2000, rendered the June 12 award to Lauderdale moot.

9. The Petitioner, Sunrise, and Intervenor challenged

the agency's decision to reject all bids.

10. Section M of the RFP provides, in pertinent part:

The Department reserves the right to reject

any and all proposals when such rejection

is in the best interest of the State of

Florida. Such rejection shall not be

arbitrary, but be based on strong

justification. (Emphasis in original

omitted.)

11. Subsequent to the protests of the rejection of all

proposals, Perry Anderson, a regional administrator for the

Department whose region encompasses Broward County, drafted a

memorandum dated September 22, 2000, to address the number of

leases and unit requirements for service areas of Broward

County. The proposals set forth in the memorandum have not

been resolved. As of the date of the hearing, the Department

did not present any definitive statement as to its leasing

needs for Broward County or how and why the submittals for

lease 800:0187 could not address the agency's need.

12. The Department has not presented documentation for

any agency plan or statutory mandate to reorganize or

decentralize the office space encompassed by lease 800:0187.

13. If decentralization is required, the Department has

presented no studies to determine the location, service areas,

or numbers of clients for such offices. Studies for

demographics, travel times, accessibility to public

transportation, client case loads, or how reorganization would

better address such issues have not been presented.

14. Moreover, the Department has not demonstrated how

decentralization would be inconsistent with the award of lease

space as designated by lease 800:0187.

15. The only justification for the rejection of all

proposals for lease 800:0187 was the alleged reorganization of

the Department. The Department presented no factual

information as to how the "reorganization" related to an

emerging philosophy supporting decentralization or improved

services to the client population.

CONCLUSIONS OF LAW

16. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of

these proceedings. Section 120.57, Florida Statutes.

17. The Petitioner has standing to challenge the agency

action and has met all procedural prerequisites in timely

filing the instant challenge.

18. Section 120.57(3), Florida Statutes, provides in

pertinent part ::

(3 ) ADDITIONAL PROCEDURES APPLICABLE TO

PROTESTS TO CONTRACT BIDDING OR AWARD.–

Agencies subject to this chapter shall

utilize the uniform rules of procedure,

which provide procedures for the resolution

of protests arising from the contract

bidding process. Such rules shall at least

provide that:

* * *

(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 administrative law

judge shall be whether the agency's

intended action is illegal, arbitrary,

dishonest, or fraudulent.

19. Based upon the foregoing, the Petitioner bears the

burden of proof to establish the Department intended action is

illegal, arbitrary, dishonest, or fraudulent. Additionally,

as the Petitioner maintains the Department's action is without

strong justification, it must also meet that evidentiary

burden.

20. A decision is arbitrary if it is not supported by

fact or logic. See Agrico Chemical Co. v. State Department of

Environmental Regulation , 365 So. 2d 759 (Fla. 1st DCA 1978).

In this regard the Petitioner has established that the

decision to reject all proposals was not supported by fact or

logic. The Department's representation of "reorganization"

was pretextual in that no mandate by rule or policy existed at

the time of the decision. This conclusion is further

supported by the fact that a mandate to reorganize would have

been equally applicable at the time of the award to the

Petitioner. Instead, the decision to reject all proposals

followed the unresolved protests of the award to the

Petitioner. By electing to reject all proposals, the

Department sought to avoid the procedural and substantive

obligation to resolve the protests. Convenience of the

Department is not strong justification for the rejection of

all bids.

21. In this case there has been no demonstration of a

strong justification to reject all proposals. The Department

issued the first award on the RFP in May of 1999. Since that

time the first successful bidder has been rejected for alleged

non-performance, the second successful bidder has been

rejected to accommodate an alleged reorganization, and all

proposals have been rejected without any definite

clarification as to why the Department is unable to state its

leasing needs. Such conduct is not strong justification for

the agency's action and does not logically support its

decision to reject all bids.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions

of Law, it is RECOMMENDED that the Department of Juvenile

Justice enter a final order rescinding its decision to reject

all proposals for lease 800:0187.

DONE AND ENTERED this 27th day of July, 2001, in

Tallahassee, Leon County, Florida.

___________________________________

J. D. Parrish

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488- 9675 SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 27th day of July, 2001.

COPIES FURNISHED:

Brian D. Berkowitz, Esquire

Scott Wright, Esquire

Office of General Counsel

Department of Juvenile Justice

2737 Centerview Drive

Tallahassee, Florida 32399-3100

Robert A. Sweetapple, Esquire

Sweetapple, Broeker & Varkas

165 East Boca Raton Road

Boca Raton, Florida 33432

Daniel H. Thompson, Esquire

Berger, Davis & Singerman

215 South Monroe Street

Suite 705

Tallahassee, Florida 32301

A. Margaret Hesford, Esquire

5648 West Atlantic Boulevard

Margate, Florida 33063

William G. Bankhead, Secretary

Department of Juvenile Justice

Knight Building

2737 Centerview Drive

Tallahassee, Florida 32399-3100

Robert N. Sechen, General Counsel

Department of Juvenile Justice

Knight Building

2737 Centerview Drive

Tallahassee, Florida 32399-3100

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.