01-000612BID School Food Service Systems, Inc. vs. Broward County School Board Status: Closed Recommended Order on Thursday, May 31, 2001.

Summary: Respondent`s decision to reject all bids on contract to deliver food and other supplies to public school cafeterias was arbitrary. Petitioner`s bid protest being well taken, Respondent urged to award contract to the lowest responsive, responsible bidder.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SCHOOL FOOD SERVICE SYSTEMS, )

INC., )

)

Petitioner, )

)

vs. ) Case No. 01-0612BID

)

BROWARD COUNTY SCHOOL BOARD, )

)

Respondent, )

)

and )

)

SYSCO FOOD SERVICES OF SOUTH )

FLORIDA, INC., a Delaware )

corporation, )

)

Intervenor. )

)

RECOMMENDED ORDER

The parties having been provided proper notice,

Administrative Law Judge John G. Van Laningham of the Division

of Administrative Hearings convened a formal hearing of this

matter in Fort Lauderdale, Florida, on April 9, 2001.

APPEARANCES

For Petitioner : Jerome S. Reisman, Esquire

Reisman & Abraham, P.A.

3006 Aviation Avenue, Suite 4B

Coconut Grove, Florida 33133

For Respondent : Robert Paul Vignola, Esquire

Steven H. Feldman, Esquire

School Board of Broward County

600 Southeast Third Avenue, 11th Floor

K. C. Wright Administration Building

Fort Lauderdale, Florida 33301

For Intervenor : Thomas R. Tatum, Esquire

Brinkley, McNerney, Morgan,

Solomon & Tatum, P.A.

200 East Las Olas Boulevard, Suite 1800

Fort Lauderdale, Florida 33301

STATEMENT OF THE ISSUE

The issue in this bid protest is whether Respondent acted

fraudulently, arbitrarily, illegally, or dishonestly when it

decided to reject all of the bids it had received on a

contract to deliver food and supplies to the public school

cafeterias in Broward County.

PRELIMINARY STATEMENT

On September 28, 2000, Respondent, The Sch ool Board of

Broward County, Florida (the “Board”), issued an invitation to

bid (“ITB”) on a four-year contract to provide “Mainline Foods

and Supplies for Cafeterias” to the public schools of Broward

County. Four bidders timely submitted bids on October 31,

2000. Among these bidders were Petitioner School Food Service

Systems, Inc. (“School Food”) and the incumbent vendor,

Intervenor Sysco Food Services of South Florida, Inc.

(“Sysco”). After reviewing the bids, agency staff on

November 9, 2000, posted a notice of intent to award the

contract to School Food.

Sysco timely filed a protest of the intended award to

School Food. In reviewing the issues raised in Sysco's

protest of the recommended award, staff determined that the

ITB was fatally flawed due to purportedly defective

specifications in the product descriptions of four items out

of 186 on which bids were required. Due to these allegedly

defective specifications, staff believed that bidders acting

in good faith could have offered goods that failed to meet the

Board’s needs.

On December 1, 2000, a Bid Protest Committee met pursuant

to Board rule to consider Sysco’s protest. Staff informed the

committee that the allegedly defective specifications were

believed to have caused confusion which adversely affected

competition. The Board’s staff and counsel recommended to the

Bid Protest Committee that the original recommendation to

award the contract to School Food be rescinded, that all bids

be rejected, and that the contract be re-bid. The Bid Protest

Committee considered these matters and voted to approve the

actions that staff had recommended.

School Food filed a formal written protest concerning the

intended rejection of all bids. The Bid Protest Committee met

on February 9, 2001, to consider School Food’s protest, and

decided, by a two-to-one vote, to stick with the rejection

decision. Thereafter, School Food requested that its formal

written protest be referred to the Florida Division of

Administrative Hearings, which was done. Sysco filed a

Petition to Intervene on March 2, 2001, which was granted by

an Order issued on March 2, 2001.

At a pre-hearing conference on April 6, 2001, the

administrative law judge held that the standard of review in

this case would be whether the agency’s intended action was

illegal, arbitrary, dishonest, or fraudulent. It was also

held that there was no need, in this proceeding, to consider

issues relating to the responsiveness of either School Food’s

or Sysco’s bid, because the Board’s rejection decision

presupposed that both were qualifying responses.

The parties stipulated to a number of facts in advance of

the formal hearing. The stipulated facts were memorialized in

the record and taken as established without need of further

proof. At the hearing, Joint Exhibits 1-19, 21-23, and 26-27

were admitted into evidence. Joint Exhibit 5 was determined

to be a composite document comprised of (a) the bid submitted

by School Food (those pages of Joint Exhibit 5 up to and

including Page 84 of 84 pages) and (b) documents received by

the agency after the opening of bids, for purposes of

evaluating School Food’s bid (all pages of Joint Exhibit 5

following Page 84 of 84 pages). Petitioner’s Exhibit 1 was

marked for identification but not received in evidence.

In additi on to these documents, School Food presented the

testimony of Elaine Blaine of Sysco; and Raymond Papa, Melissa

Grimm, and John Quercia, all of whom are employees of the

Board. No further witnesses were called by the Board or

Sysco.

The parties requested and were granted leave to serve

their proposed recommended orders through and including

May 10, 2001. The transcript of the formal hearing was filed

on April 26, 2001. All parties timely filed proposed

recommended orders containing proposed findings of fact and

conclusions of law. The parties’ proposed recommended orders

have been carefully considered during the preparation of this

Recommended Order.

FINDINGS OF FACT

The evidence presented at final hearing established the

facts that follow.

I. The Invitation to Bid

1. On September 28, 2000, the Board issued ITB 21-076B

for procurement of “Mainline Foods and Supplies for

Cafeterias.” Through this solicitation the Board sought to

let a four-year contract, renewable for two additional one-

year periods, pursuant to which the successful bidder would

deliver food and supplies to the approximately 192 public

school cafeterias in Broward County, Florida. Sysco is the

incumbent supplier of foods and supplies for the Board’s

cafeterias.

2. The ITB l isted and described the desired foods and

supplies in two separate sections, Section 5.09 and Section

6.02. Bidders were required to bid on each of the 186

individual items listed in the Product Bid Sheets that

comprise Section 5.09. In contrast, bidders were instructed

not to quote prices for the 130 items listed in Section 6.02;

rather, the ITB provided that “[t ]he awardee, once selected,

shall submit to the [Board] product costs and selling prices

for items in Section 6.02 .” This protest focuses on

particular specifications of the Product Bid Sheets in Section

5.09 and is not concerned with Section 6.02.

3. The Product Bid Sheets in Section 5.09 were composed

of tables consisting of eight columns and, in total, 189

rows — one row for each item and three empty or "open" rows

requiring no response. The first three columns, from left to

right, set forth information that identified each item sought.

At each row, Column 1 contained the “Sequence Number” that the

Board had assigned to each product “for tracking purposes.”

Column 2 in each row contained a description of the product to

be purchased. So-called “approved brands” for each item were

listed in Column 3.

4. The ITB identified “approved brands” in several ways.

The most specific identification was by brand name and product

code or number, for example “Tony’s 78642.” This form of

identification designated a particular manufacturer’s

particular product. The term “approved branded product” will

be used herein to refer to this type of specific product

identification in Column 3.

5. For many items, an approved brand was identified by

manufacturer’s name only, without an accompanying product

code, e.g. “Lykes ________.” The ITB instructed bidders that

“[i ]f a code number, name, or color is not listed by [the

Board] along with an approved brand[,] the bidder shall enter

the code by the brand in the space provided.” (ITB, Section

5.03.) In this Recommended Order, the term “brand-only

approval” will denote a brand approval that lacked a specific

product code.

6. Finally, the ITB identified a large number of

approved brands in Column 3 of Section 5.09 by the term

“Distributor’s Choice,” meaning the distributor’s brand of

choice. Bidders were instructed to “enter, in the space

provided, the brand and code” when quoting a Distributor’s

Choice. (ITB, Section 5.03.)

7. For 84 of the 186 items listed in the Product Bid

Sheets, the approved brands in Column 3 were identified

exclusively as Distributor’s Choice. 1 Thus, for nearly half

of the Section 5.09 items, the bidder needed to select a brand

and product that fit the specifications set forth in Column 2.

For another 15 items, Column 3 contained brand-only approvals,

meaning that the bidder was required to select an appropriate

product from the approved manufacturer’s line. Brand-only

approvals were combined with a Distributor’s Choice option in

Column 3 for ten additional items. Consequently, there were

109 items — 59% of the total — on which the bidders were not

given the option of bidding an approved branded product.

8. Conversely, for 23 items Column 3 listed just one

approved branded product, leaving the bidders no alternative

but to bid on a particular manufacturer's particular product.

Similarly, for 26 additional items, at least two approved

branded products were listed, giving bidders a choice but not

requiring them to compare the specifically designated brand-

name products with the product descriptions in Column 2. In

sum, bidders were obligated (and entitled) to bid an approved

branded product on at least 49 items.

9. There were 28 items for which Column 3 combined an

approved branded product (or products) with either a brand-

only approval (or approvals) or a Distributor’s Choice

option. 2 Accordingly, a bidder could, in theory, have quoted

prices on as many as 77 approved branded products. At the

other extreme, a bidder could have bid 137 items for which it

had selected brand, product code, or both.

10. Of the 186 items listed in Section 5.09, four are at

the heart of the instant dispute. Ignoring for present

purposes the sequences above and below the at-issue items,

these four were described as follows in the first three

columns of the Product Bid Sheets: 3

1 2 3

SEQ PRODUCT APPROVED

NO. DESCRIPTION BRANDS

1009 Breakfast Pizza (F). Crust Tony’s 63564

topped with cheese, gravy, Nardone’s 80MSA-100

scrambled eggs and bacon.

Minimum size 3 oz. to

meet 1 meat/meat alternate

plus 1 bread serving. CN

Label.

Size of portion _____ oz.

1036 Pizza, French Bread, Southland Bagel

Pepperoni (F): 50-50 8953S

Mozzarella blend. Minimum Prestige 30215

5.45 oz. to meet 2 oz. Nordone’s _________

meat/meat alternative and 2 KT Kitchen ________

bread servings.

CN label.

Size portion ________ oz.

1037 Pizza, Mexican Style (F). Tony’s 63669

Minimum 5 ounces to meet 2 Nordone’s 100MA

oz. meat/meat alternate and 1 KT Kitchens 01476

½ bread serving. With or w/o

VPP.

CN label.

Size portion ________ oz.

2010 Pancake and Sausage (F ) State Fair 70601

Pancake batter around a link Leon’s 28002

sausage on a stick. 2.5 oz. Foster Farms 96113

Minimum weight to meet 1 oz.

meat/meat alternative and 1

bread serving. CN Label.

Size of portion: _______ oz.

11. Other provisions of the ITB are relevant to this

protest as well. Section 7 of the General Conditions of the

ITB stated in pertinent part as follows:

AWARDS : In the best interest of the School

Board, the Board reserves the right to

withdraw this bid at any time prior to the

time and date specified for the bid

opening; to reject any and all bids and to

waive any irregularity in bids received; to

accept any items or group of items unless

qualified by bidder; to acquire additional

quantities at prices quoted on this

invitation unless additional quantities are

not acceptable, in which case the bid

sheets shall be noted “BID IS FOR SPECIFIED

QUANTITY ONLY.” All awards made as a

result of this bid shall conform to

applicable Florida Statutes.

12. Section 1.03 of the IT B’s Special Conditions stated

in pertinent part as follows:

AWARD : A contract shall be awarded IN ITS

ENTIRETY to the lowest responsive,

responsible bidder (See Section 4.01) with

the lowest initial product cost plus fixed

fee and meeting all specifications terms

and conditions of the bid. It is necessary

to bid on every item on the Product Bid

Sheets (Section 5.09) in order to have your

bid considered for award. Product costs

shall be stated in the spaces provided in

the Product Bid Sheets (Section 5.09). All

items shall have an individual cost.

Failure to state the individual cost for an

item shall result in disqualification of

bid submitted. Bidder shall carefully

consider each item for conformance to

specifications. Any item that does not

meet the specifications shall be

disqualified.

13. Section 1.10 of the ITB stated as follows:

INTERPRETATIONS : Any questions concerning

any condition or requirement of this bid

shall be received in the Purchasing

Department in writing on or before October

11, 2000 . Submit all questions to the

attention of the individual stated in

Section 1.37 [ sic ] of this Bid. If

necessary, an Addendum shall be issued.

Any verbal or written information which is

obtained other than by information in this

bid document or by Addenda shall not be

binding on the School Board.

14. Section 1.12 of the ITB stated as follows:

BRAND STANDARDIZATION : The specified

brands and product numbers listed on the

Product Bid Sheets have been approved by

SBBC Food and Nutrition Services Department

and bids shall be accepted only on these

approved items, except where “Distributor’s

Choice” is indicated.

If a bidder wishes to have an item placed

on this approved list for future bidding,

the bidder shall furnish Food and Nutrition

Services Department samples of the item for

testing purposes. If approved, the Food

and Nutrition Services Department shall

include the new item on the future list of

approved items.

In the event that any approved item

supplied under this bid does not prove

satisfactory, that item shall be removed

from the approved list until such time as

correction is made to the satisfaction of

the Food and Nutrition Services Department.

15. Section 1.13 of the ITB stated as follows:

PRODUCT NUMBER CORRECTIONS : If the product

number for the brand specified on the

Product Bid Sheets is: a) no longer

available and has been replaced with a new

updated number with new specifications, the

bidder should submit complete descriptive

literature on the new product number; or b)

incorrect, the corrected product number

should be noted on the Product Bid Sheets,

in the space provided.

16. Section 1.35 of the ITB stated as follows:

INFORMATION: Any questions by prospective

bidders concerning this Invitation to Bid

should be addressed to Mr. Charles High,

Purchasing Agent, Purchasing Department,

[phone] 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 Mr. High nor any employee of [the

Board] 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. Questions should be submitted in

accordance with Special Condition 1.10.

Interpretations of the Bid or additional

information as to its requirements, where

necessary, shall be communicated to bidders

only by written addendum.

17. Section 2.03 of the ITB stated as follows:

ADDING AND DELETING ITEMS : Food and non-

food items utilized by SBBC Food and

Nutrition Services Department may be

subsequently added, deleted or transferred

from or to the lists in Sections 5.09 and

6.0 , individually or in groups, at the

discretion of SBBC Food and Nutrition

Services Department

18. Sect ion 5.02 of the ITB provided in pertinent part

as follows:

COLUMN 2 : (Product Description ) This

column provides bidder with descriptions of

the products to be purchased, including

portion or serving sizes or grades and

standards, as may be applicable. Bidders

should fill in the information wherever

indicated on portion, serving size, etc.,

and provide manufacturers’ certificates of

grades or compliance whenever “CR” is

shown. If there is a conflict between the

product description in Column 2 and the

approved brands in Column 3, compliance

with approved brands shall prevail . [W ]hen

evaluating bids, [staff] may request that a

bidder furnish, within three days of

request, further confirmations of grades

and standards, copies of specification

sheets, and other product data, as may be

required.

(Underlining supplied). For ease of reference, the underlined

sentence above — which will prove pivotal — will be called the

"Reconciliation Clause" in this Recommended Order.

19. Section 5.03 of the ITB stated in pe rtinent part as

follows:

COLUMN 3 : (Approved Brands*) Prior to

acceptance of a bid, all bid brands are

subject to review by SBBC Food and

Nutrition Services Department for

compliance with the bid product

requirements. If a code number, name, or

color is not listed by SBBC along with an

approved brand; the bidder shall enter the

code by the brand in the space provided.

Whenever quoting a “Distributor’s Choice”,

a bidder shall enter, in the space

provided, the brand and code. Whenever an

approved brand, other than “Distributor’s

Choice”, is listed, the bidder should

indicate in Column 3 the brand bidding,

(circle the brand). IMPORTANT : Some of

the codes listed may be obsolete or

incorrect, in which case the bidder is to

enter the correct code. After award, SBBC

may request the awardee to obtain prices

and samples for brands and codes not

listed. The decision as to whether a

product does or does not meet the

requirements of Column 2 is at the

discretion of SBBC. A bidder may be

requested, prior to bid award, to furnish

acceptable confirmation from a packer that

a product meets the requirements set forth

in Column 2.

20. Section 5.11 of the ITB stated in pertinent part as

follows:

CN Label : When a product is CN (Child

Nutrition) labeled, it is “certified” by

the packer to conform to the nutritional

requirements of the USDA Food and Nutrition

Service (FNS). The label shows the

contribution made by a given amount of

product toward meal requirements. When CN

label is noted in Column 2 of the Product

Bid Sheets, it is understood that the CN

label must be in place for the product to

be bid.

II. Particular Responses to the Invitation to Bid

A. Sequence No. 1009 – Breakfast Pizza

21. At Sequence No. 1009, Column 3 of the Product Bid

Sheet contained two approved branded products : Tony’s 63904

and Nardone’s 80MSA-100. School Food quoted a price of

$28,500 on the specifically approved Nardone’s product.

22. In preparing its bid, Sysco obtained a product

description from Nardone Bros. Baking Co. Inc. ("Nardone") for

its 80MSA-100 product. Sysco believed that Nardone’s 80MSA-

100 failed to meet the product description set forth in Column

2 and therefore offered the other approved branded product,

Tony’s 63564, at a price of $33,000.

23. A third bidder, Mutual Wholesale Co. ("Mutual

Wholesale" ), offered to provide the approved Tony’s product at

a price of $33,012.00.

B. Sequence No. 1036 – French Bread Pepperoni Pizza

24. The product description in Column 2 of the item

listed at Sequence No. 1036 required that a CN label be in

place for a product to be bid.

25. A CN label signifies compliance with certain U.S.

Department of Agriculture guidelines. The Board must obey

these guidelines to obtain reimbursement for its food services

program from federal funding sources.

26. School Food offered the Prestige 30215 approved

branded product in its response to Sequence No. 1036 at a

price of $30,750.

27. In preparing its response to the ITB, Sysco learned

that the Prestige 30215 approved branded product had been

submitted for CN label approval but lacked that approval at

the time of bidding. Perceiving a conflict between the

product description in Column 2 and the approved branded

product in Column 3, Sysco concluded that it could not quote a

price for Prestige 30215. Instead, Sysco offered to provide

another approved brand, KT Kitchen’s 01093, at a cost to the

Board of $36,397.50.

28. Like School Food, Mutual Wholesale bid on the

Prestige 30215 brand name product, quoting a price of $30,000.

29. As of November 29, 2000, the approved branded

product, Prestige 30215, had obtained CN approval from the

U.S. Department of Agriculture.

C. Sequence No. 1037 – Mexican-Style Pizza

30. In its response to Sequence No. 1037, School Food

offered an approved branded product, Nardone's 100MA, quoting

a price of $206,620.

31. During its bid preparation, Sysco learned that

Nardone used another code for this product — namely, "96MCSA."

Sysco believed that it could not bid on "Nardone’s 100MA,"

even though it was an approved branded product. Thus, in its

bid Sysco offered to provide another approved branded product,

Tony's 63669, at a price to the Board of $229,800.

32. In its response to Sequence No. 1037, Mutual

Wholesale quoted a price of $214,020 for yet another approved

branded product, KT Kitchen’s 01476.

33. "Nardone's 100MA" is an actual product code used

internally by Nardone to denote an actual, available product

that is referred to externally (or "on the street") as

"Nardone's 96MCSA." In other words, "Nardone's 100MA" and

"Nardone's 96MCSA" refer to the same product.

D. Sequence No. 2010 – Pancake and Sausage

34. In response to Sequence No. 2010, School Food

offered to provide an approved branded product, Leon’s 28002,

at a cost to the Board of $14,858.

35. Sysco discovered through its bid preparation

research that there might be a conflict between the product

description in Column 2 of Sequence 2010 and the approved

Leon’s 28002 brand name product, which was unambiguously

designated in Column 3, because Leon’s 28002 consisted of a

"frankfurter" wrapped in a pancake, and Sysco did not consider

a "frankfurter" to be a "link sausage." 4

36. As the Board has conceded, unless a bidder knew the

products well or made a comparison of the approved branded

products to the product description in Column 2, it would not

have perceived the possible conflict between that description

and the approved Leon’s 28002 brand name product listed in

Column 3.

37. Around October 20, 2000, Sysco notified the Board of

its concern regarding Sequence No. 2010. In so doing,

however, Sysco failed to comply with Section 1.10 of the ITB,

which required that questions about the bid specifications be

submitted in writing on or before October 11, 2000. In

violation of Section 1.10, a Sysco employee named Elaine

Blaine, who was responsible for preparing Sysco's bid, left a

telephone message with the Board's Purchasing Agent, Charles

High, inquiring about Leon's 28002 and letting him know that,

in Sysco's opinion, this approved branded product did not

match the description in Column 2 of Sequence No. 2010.

38. Mr. High returned Ms. Blaine's phone call on or

around October 24, 2000, leaving a message on her voice mail

to the effect that Leon's 28002 was not the correct item and

advising that another brand name product, Leon's 28012, should

be bid in its place. As Section 1.35 of the ITB made plain,

however, Mr. High had no authority whatsoever to render an

opinion such as this.

39. Although Mr. High's communication with Ms. Blaine

was improper, it had no effect on the competitive process.

Clearly, Sysco could not reasonably have relied on Mr. High's

unauthorized opinion, and anyway it did not do so. Thus, in

short, while Mr. High's irregular contact with Ms. Blaine

cannot be condoned, his ex parte advice to Sysco fortunately

conferred no competitive advantage on any bidder and hence was

immaterial.

40. In the end, Sysco offered another approved branded

product, State Fair 70601, in lieu of Leon's 28002, quoting a

price of $20,111.

41. Mutual Wholesale also bid on State Fair 70601,

quoting a price of $20,119.50.

III. Issuance of Addenda and Submission of Bids

42. The Board issued two addenda to the ITB. Addendum

No. 1, among other things, inserted the code number for the

approved KT Kitchen’s brand name product listed in Column 3

for Sequence No. 1036, and it also changed the approved Foster

Farms branded product listed in Sequence No. 2010. The

addenda made no other changes to either Sequence Nos. 1009,

1036, 1037, or 2010.

43. On October 31, 2000, the Board opened the four bids

that it had received in response to the ITB. Bids were

submitted by Big Bamboo, Inc., Mutual Wholesale, Sysco, and

School Food.

44. Big Bamboo, Inc. failed to submit a complete

proposal and thus its bid was disqualified as non-responsive.

The remaining bids, which were determined to be responsive,

offered, respectively, the following total annual contract

prices:

Mutual Wholesale $9,757,284.86

Sysco $9,656,770.21

School Foo d $9,263,170.42

Accordingly, School Food was the lowest bidder, its bottom

line beating the closest competitor by nearly $400,000 per

year.

45. On November 9, 2000, the Board's Purchasing

Department posted its recommendation that the contract be

awarded to School Food.

IV. The Sysco Protest of the Recommended Award

46. On November 13, 2000, Sysco timely filed a notice of

intent to protest the recommended award to School Food. Sysco

timely filed its formal written protest with the Board on

November 22, 2000.

47. Pursuant to rule, a Bid Protest Committee comprised

of three administrators is required to meet with a bid

protester in accordance with Section 120.57(3)(d), Florida

Statutes, to attempt a resolution of the protest by mutual

agreement. By rule, the Bid Protest Committee has been

delegated the agency’s authority to perform this function.

48. Consequently, pursuant to School Board Policy 3320

and Section 120.57(3)(d), Florida Statutes, a Bid Protest

Committee convened on December 1, 2000, in an attempt to

mutually resolve any disputed issues arising out of Sysco's

protest.

49. Despite the fact that the thrust of Sysco's protest

was an attack on the responsiveness of School Food's bid,

School Food was not invited to attend the December 1, 2000,

meeting of the Bid Protest Committee, which apparently was not

conducted as a public meeting. A court reporter was present,

however, and the transcript of the committee's December 1,

2000, meeting is in evidence.

50. The Bid Protest Committee restri cted its review of

the procurement to consideration of whether the ITB suffered

from defective specifications in Sequence Nos. 1009, 1036,

1037, and 2010, even though Sysco’s protest had raised broader

issues concerning the responsiveness of School Food's bid.

51. At the December 1, 2000, meeting of the Bid Protest

Committee, a Board employee named Raymond Papa, whose title is

Supervisor of Field Services for Food and Nutrition Service,

made the following representations concerning the sequence

numbers in question:

(a ) 1009 (Breakfast Pizza). Mr. Papa claimed to

have erred by listing Nardone's 80MSA-100 in Column 3 of

Sequence No. 1009. This approved branded product ,

Mr. Papa told the committee, should have been identified

in Column 3 of Sequence No. 1008, which is also a

breakfast pizza but has a different product description.

(b ) 1036 (French Bread Pepperoni Pizza). Mr. Papa

informed the committee that Prestige 30215 was approved

by the U.S. Department of Agriculture but did not have a

CN label "at this time."

(c ) 1037 (Mexican Style Pizza). Mr. Papa advised

the committee that there seemed to be some confusion

arising from the ITB's use, in Column 3 of Sequence No.

1037, of the Nardone's product code 100MA, which was the

manufacturer's internal code for the approved branded

product, instead of the more common "street number"

(96MCSA) used in the company's literature. Mr. Papa

further explained: "Apparently that code [referring to

100MA] would have given me the right product" — in fact,

it would have, see Paragraph 33 above — "but it needs

more clarification on my part."

(d ) 2010 (Pancake and Sausage). Mr. Papa pointed

out the purported conflict between the product

description in Column 2 of Sequence 2010 and the approved

Leon's 28002 brand name product identified in Column 3.

He claimed to have been seeking a pancake with a sausage

inside, not a frankfurter, asserting that the two meat

products were substantially different.

52. The Board’s counsel informed the committee that the

specifications for Sequence Nos. 1009, 1036, 1037, and 2010

had created sufficient confusion to adversely affect the

competition. He urged the committee to remedy this purported

confusion by voting to reject all bids so that the contract

could be re-advertised with revised specifications.

53. The committee was not asked to consider the

Reconciliation Clause of Section 5.02 of the ITB. The three

members did not discuss this provision. It is reasonable to

infer, and the trier of fact so finds, that the committee paid

no attention to the Reconciliation Clause in weighing the

merits of staff's recommendation to reject all bids.

54. With little discussion, the three-member Bid Protest

Committee voted unanimously to rescind the recommendation to

award School Food the contract and to reject all bids on the

ground that the specifications were defective and hence that

revisions were needed to "level the playing field."

55. A revised recommendation to reject all bids was

posted on December 12, 2000.

V. School Food's Protest of the Rejection of All Bids

56. On December 15, 2000, School Food timely filed its

notice of intent to protest the Board's preliminary decision

to reject all bids. This was timely followed by a formal

written protest, which was filed with the Board on

December 22, 2000.

57. The revised recommendation posted on December 12,

2000, accurately announced the Board's intention to reject all

bids. As noted in School Food's formal bid protest, however,

the revised recommendation erroneously stated that the action

was taken because “no acceptable bids were received.” To

remedy this problem, a corrected revised recommendation was

posted by the Board on January 12, 2001. It stated that the

rejection of all bids was “due to inaccuracies within the bid

specifications.”

58. On January 16, 2001, School Food timely notified the

Board of its intent to protest the corrected revised

recommendation. Thereafter, on January 24, 2001, School Food

timely filed its formal protest of the corrected revised

recommendation to reject all bids.

59. School Food posted a bid protest bond in the amount

of $5,000 in accordance with School Board Policy 3320. This

bond is conditioned upon School Food's payment of the Board's

litigation costs should the Board prevail.

60. Pursuant to School Board Policy 3320 and Section

120.57(3)(d), Florida Statutes, the Board's Bid Protest

Committee conducted a meeting with School Food on February 9,

2001, in an attempt to mutually resolve any matters in

dispute. The Bid Protest Committee was composed of two

persons who had participated in the December 1, 2000, meeting

and a third member who had not attended that earlier meeting.

61. Sysco received advance notice of the February 9,

2001 , meeting of the Bid Protest Committee, and its lawyer was

permitted to attend as a witness. These courtesies,

tellingly, had not been extended to School Food in connection

with the committee meeting that had been held on December 1,

2000, to discuss the original Sysco bid protest.

62. As before, a court reporter was present, and the

transcript of the February 9, 2001, meeting is in evidence.

63. The Bid Protest Committee was again informed of

staff's opinion that the ITB contained defective

specifications in Sequence Nos. 1009, 1036, 1037 and 2010.

64. At the February 9, 2001 meeting, the Board's counsel

argued vigorously in support of the decision to reject all

bids. For the most part, his argument was an expanded version

of that which had been advanced in favor of rejection at the

December 1, 2000, meeting. More emphasis was placed, the

second time around, on the concern that the supposedly

defective specifications would or might, in some cases, result

in the Board not receiving the food items that it had desired.

65. Once again, the committee was not asked to consider

the Reconciliation Clause of Section 5.02 of the ITB. And

once more, the committee members did not discuss this

provision. It is reasonable to infer, and the trier of fact

so finds, that the committee failed to take account of the

Reconciliation Clause in weighing the merits of staff's

recommendation that the previous decision to reject all bids

be adhered to.

66. By a vote of two to one, the Bid Protest Committee

upheld the recommendation to reject all bids. The

contemporaneous comments from the members in the majority,

together with other evidence introduced at hearing, reveal

that the committee was persuaded that the field of play had

been tilted by the purportedly defective bid specifications;

its decision clearly was based on a desire to “level the

playing field.”

VI. Ultimate Factual Determinations

67. All of the purported deficiencies in the bid

specifications fall squarely within the operation of the ITB’s

plain and unambiguous Reconciliation Clause which, to repeat

for emphasis, provided as follows:

If there is a conflict between the product

description in Column 2 and the approved

brands in Column 3, compliance with

approved brands shall prevail.

(ITB, Section 5.02.) 5 There is no evidence that the

Reconciliation Clause misrepresented the Board's true intent

or was the product of a mistake.

68. The administrative law judge has determined as a

matter of law that the Reconciliation Clause is clear and

unambiguous; therefore, as a matter of fact, it manifests the

Board's intent that a Column 2 description must yield to the

identification of an approved branded product in Column 3 in

the event of conflict between them.

69. By providing in clear terms a straightforward,

easily applied, bright-line rule for resolving the very type

of conflict that the Board now urges justifies a rejection of

all bids, the ITB reasonably ensured that no such ambiguity or

uncertainty would imperil the competitive process.

70. No reasonable bidder could possibly have been

confused by the unambiguous Reconciliation Clause. All

bidders, of course, were entitled to protest the

Reconciliation Clause, and any other bid specifications,

within 72 hours after receiving the ITB. See Section

120.57(3)(b), Florida Statutes; see also ITB, Section 1.21.

None did.

71. If Sysco believed, as Ms. Blaine testified, that it

could not bid on certain approved branded products listed in

Sequence Nos. 1009, 1036, 1037, and 2010, then its belief was

unreasonable. Confusion that is objectively unreasonable in

fact, as Sysco's was, is not evidence of deficiencies in the

bid specifications or of a breach in the integrity of the

competitive process.

72. In sum, the purported "deficiencies" upon which the

Board based its intended decision to reject all bids are not

deficiencies in fact. Thus, the Board's professed reason for

starting over — that flaws in Sequence Nos. 1009, 1036, 1037,

and 2010 put bidders to the Hobson's choice of either risking

disqualification by bidding on an approved branded product

that did not strictly conform to the description in Column 2

or offering a higher-priced product meeting the Column 2

description — is factually unfounded and illogical. 6

73. It should be observed, also, that, in view of the

unambiguous Reconciliation Clause, the approved branded

products upon which School Food bid in response to Sequence

Nos. 1009, 1036, 1037, and 2010 are conforming goods in every

respect. That is, School Food did not "mis-bid" these items.

Indeed, the Board having identified specific approved branded

products; having instructed bidders that "bids shall be

accepted only on these approved items, except where

‘Distributor's Choice’ is indicated," see ITB, Section 1.12;

and having made clear, in the Reconciliation Clause, that any

conflict between an approved branded product and a product

description shall be resolved in favor of the approved branded

product, it would be arbitrary and capricious to disqualify

School Food's bid for non-responsiveness in connection with

these items. See Footnote 6, supra .

74. The evidence regarding which particular products the

Board truly wanted to purchase in connection with the

sequences at issue is in conflict. On the one hand, there is

the ITB itself, which is strong evidence of the Board's

desires. As a written expression of the Board's intent, the

ITB gives voice not merely to the opinions of one person, but

rather speaks for the whole Board as an organization. (The

latter point is underscored by Section 1.35, which plainly

stated that no single employee of the Board was authorized

unilaterally to interpret the ITB.) The ITB's reliability is

further enhanced by the fact that it was prepared before the

bids were opened, before it was known that the incumbent

vendor was not the apparent low bidder, before the first

protest was filed, and before this administrative litigation

commenced.

75. On the other hand, there is Mr. Papa's testimony

that he made mistakes in Sequence Nos. 1009, 1036, 1037, and

2010, listing approved branded products that, in hindsight, he

claimed should not have been listed. Casting doubt on Mr.

Papa's credibility, however, is the fact that he did not

discover these so-called mistakes until after the Sysco

protest helpfully brought the matters to his attention. Also,

in deciding how much weight to give Mr. Papa’s testimony, the

trier paid particular attention to the picayune nature of the

purported conflicts in the specifications . Indeed, it is

seriously debatable whether there really were any conflicts in

Sequence Nos. 1009, 1036, 1037, and 2010. 7 Additionally,

having observed Mr. Papa’s demeanor and having given

thoughtful consideration to the substance of his testimony,

the trier of fact formed the distinct impression that this

witness was a bit too anxious to grasp at a plausible excuse —

even these hyper-technical “conflicts” — to scuttle the

process and do it over. In weighing Mr. Papa's testimony, the

trier has factored in a discount for reasonably inferred bias.

76. Further, Mr. Papa's testimony was premised on the

view that Column 2 expressed the Board's true intent, taking

priority over Column 3 in cases of conflict. To fully credit

Mr. Papa's testimony would require that the Reconciliation

Clause be turned on its head — which, incidentally, would

constitute an impermissible material change in the bid

specifications. 8 There is absolutely no basis in this record

for doing that.

77. In resolving the conflict in the evidence regarding

which goods the Board really wanted, the trier of fact has

considered the totality of circumstances and has chosen to

give the greatest weight to the plain and unambiguous

Reconciliation Clause in the ITB which, when read in

conjunction with the clear designations of approved branded

products in Column 3 at the sequences in question, makes

manifest the Board's intent. This clear provision speaks for

itself and proves that the Board, as an entity, made a

reasoned and conscious decision to deem approved branded

products in Column 3 of the Product Bid Sheets to be the goods

intended for purchase in those instances where a Column 2

product description might suggest a different desire. Neither

Mr. Papa's testimony nor any other evidence persuasively calls

into question the reliability and credibility of the

Reconciliation Clause as an accurate expression of the Board's

intent.

78. Thus, under the evidence presented, the following

items are approved branded products that, as a matter of fact,

the Board wanted to purchase : Nardone's 80MSA-100, Prestige

30215, Nardone's 100MA, and Leon's 28002.

79. Moreover, if the Board decides that one or more of

these approved branded products are not what it wants after

all, it has the right, pursuant to Section 2.03 of the ITB

( see Paragraph 17, supra ), to arrange for the purchase and

delivery of different products. The argument of the Board and

Sysco that the Board's exercise of its right to add and delete

items would constitute an impermissible material alteration of

the bid specifications is, in the context of the present

circumstances, plainly wrong in fact and illogical.

80. To explain why this is so, let us stipulate that it

would be arbitrary for the Board, say, to delete several items

from each bidder's proposal because, for example, one or more

bidders had mis-bid those items, and then to re-tabulate the

bids to determine which bidder would now be the low bidder. 9

Similarly, it would be arbitrary for the Board, under the

guise of adding items, to designate as approved branded

products certain non-conforming goods offered by a bidder as

Distributor's Choices, thereby allowing a bid that otherwise

would be disqualified to be considered responsive. As a final

example, it would be arbitrary for the Board to delete an

approved branded product from the product list and use such

deletion as the basis for disqualifying a bidder that had

quoted the now-deleted item. Each of these hypothetical

situations involves a material change to the specifications on

which the bidders based their proposals, which is not allowed,

for good reason.

81. It is a different kettle of fish, however, for the

Board to add or delete items after making an award to the

lowest responsive, responsible bidder in accordance with the

terms and conditions of the ITB. When the bids are judged

pursuant to the rules clearly spelled out in advance in the

ITB — which would not be the case in the examples set forth in

the immediately preceding paragraph — there is simply no

change in the specifications, material or otherwise.

82. In the instant case, therefore, if the Board awards

the contract to School Food and decides that it does not want

a hot dog pancake for Sequence No. 2010, then all it need do

is delete Leon's 28002 from the product list and add the

desired Leon's product or require the distributor to deliver

one of the remaining approved branded products. 10 Nothing

about that course of action requires or effects a change in

the bid specifications. To the contrary, all of the bidders

were notified, upon entering this competition, that such post-

award additions and deletions of product were possible. All

of the bidders, moreover, could have quoted a price for the

hot dog pancake, which was unambiguously designated as a

conforming product. If the hot dog pancake were a less

expensive item, then Sysco could have and should have bid on

it. Put another way, if School Food secured a competitive

advantage by bidding on the lower-priced approved branded

product, it was a legitimate advantage under the plain rules

of the contest — rules that applied equally to all.

83. In a nutshell, the Board is in no reasonable danger

of receiving a food product that it does not desire to

purchase.

84. The Board's preliminary decision to reject all bids

is not supported by facts or logic. Indeed, the Board's

analysis of the situation failed to account for the

Reconciliation Clause — a clearly relevant factor. When the

Reconciliation Clause is considered, together with the rest of

the evidence in the record, the following become clear : The

ITB's specifications were clear and unambiguous. The

competitive playing field was level. The Board will obtain

the goods that it intended to purchase.

85. At bottom, the Board's decision here cannot be

justified by any analysis that a reasonable person would use

to reach a decision of similar importance. It is arbitrary. 11

CONCLUSIONS OF LAW

VII. Jurisdiction

86. The Division of Administrative Hearings has personal

and subject matter jurisdiction in this proceeding pursuant to

Sections 120.569 and 120.57(1), Florida, and the parties have

standing.

VIII. The Standard of Review

87. Section 120.57(3)(f), Florida Statutes, provides

that the standard of review in a protest of an intended

decision to reject all bids shall be whether the proposed

agency action is illegal, arbitrary, dishonest or fraudulent.

88. In Scientific Games, Inc. v. Dittler Brothers, Inc .,

586 So. 2d 1128, 1131 (Fla. 1st DCA 1991), the First District

Court of Appeal described the deference to be accorded an

agency in connection with a competitive procurement:

The Hearing Officer need not, in effect,

second guess the members of the evaluation

committee to determine whether he and/or

other reasonable and well-informed persons

might have reached a contrary result.

Rather, a “public body has wide discretion ”

in the bidding process and “its discretion,

when based on an honest exercise” of the

discretion, should not be overturned “even

if it may appear erroneous and even if

reasonable persons may disagree.”

(Citations omitted ; emphasis in original).

89. In U.S. Foodservice, Inc. v. The School Board of

Hillsborough County , 1998 WL 930094, *27, DOAH Case No. 98-

3415BID (Recommended Order issued Nov. 17, 1998), the

administrative law judge analyzed the review criteria

applicable to the rejection of all bids subsequent to the 1997

legislative revision of the Administrative Procedures Act:

[T ]he . . . provisions of Section

120.57(3)(f) represent a Legislative

reshaping of bid law, at least in cases in

which an agency proposes to award a bid, as

opposed to cases in which an agency

proposes to reject all bids. When an

agency rejects all bids, Section

120.57(3)(f) enacts the deferential

standard of review previously stated in

Department of Transportation v. Groves-

Watkins Constructors , 530 So. 2d 912 (Fla.

1988).

179. By negative implication, the

third sentence of Section 120.57(3)(f) also

legislatively endorses the language in

Groves-Watkins limiting the administrative

law judge’s “review” of the agency decision

to reject all bids to something less than

the typical de novo administrative hearing.

In the typical de novo hearing, the

administrative law judge does not merely

review the agency decision.

180. . . . Logically, once the

Legislature chose to distinguish, as it

clearly has, between agency decisions to

award a bid and agency decisions to reject

all bids, the latter decision should

receive greater deference. A decision to

reject all bids does not directly favor one

bidder ,[ 12 ] and overturning such a decision

is compelling the agency to spend money for

goods, services, or property when it no

longer wishes to do so.[ 13 ] The use in

Section 120.57(3)(f) of “standard of proof”

in award cases and “standard of review” in

rejection cases is also consistent with the

lesser deference required in award cases,

which entitle the protester to a de novo

hearing.

* * *

182. The real question is exactly how

much less deference is the Legislature

mandating in award cases. The valid answer

must lie somewhere between the unchanged

level of relatively great deference for

agency rejection decisions and the

relatively little deference for agency

action in the typical, nonbid de novo

hearing.

90. In Gulf Real Properties, Inc. v. Department of

Health and Rehabilitative Services , 687 So. 2d 1336, 1338

(Fla. 1st DCA 1997), the court upheld an agency’s intended

rejection of all bids, stating that “an 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.” (Emphasis added).

91. In Department of Transportation v. Groves-Watkins

Constructors , 530 So. 2d 912, 914 (Fla. 1988), the Florida

Supreme Court held that when an agency rejects all bids, no

statutory right exists in any bidder to have its bid accepted

and that the administrative law judge’s “sole responsibility

is to ascertain whether the agency acted fraudulently,

arbitrarily, illegally or dishonestly.”

92. Pursuant to Section 120.57(3)(f), Florida Statutes,

the burden of proof rests with the party opposing the proposed

agency action. See State Contracting and Engineering Corp. v.

Department of Transportation , 709 So. 2d 607, 609 (Fla. 1998).

School Food must sustain its burden of proof by a

preponderance of the evidence. Department of Transportation

v. J.W.C. Co., Inc ., 396 So. 2d 778, 787 (Fla. 1st DCA 1981).

93. The review of an agency decision to reject all bids

does not require or permit the administrative law judge to

substitute his judgment for that of the agency as to the

wisdom of the discretionary act. Rather, the applicable

standard of review requires only a determination that the

record contains a factual or logical basis upon which the

agency could have chosen to exercise its wide discretion to

reject all bids. See Groves-Watkins , 530 So. 2d at 913.

94. An arbitrary decision is one that is not supported

by facts or logic, or is despotic. Agrico Chemical Co. v.

Department of Environmental Regulation , 365 So. 2d 759, 763

(Fla. 1st DCA 1978). Under the arbitrary and capricious

standard, "an agency is to be subjected only to the most

rudimentary command of rationality. The reviewing court is

not authorized to examine whether the agency’s empirical

conclusions have support in substantial evidence." Adam Smith

Enterprises, Inc. v. State Department of Environmental

Regulation , 553 So. 2d 1260, 1273 (Fla. 1st DCA 1989). Still,

the reviewing court must consider whether

the agency: (1) has considered all

relevant factors; (2) has given actual,

good faith consideration to those factors;

and (3) has used reason rather than whim to

progress from consideration of each of

these factors to its final decision.

Id.

95. The second district nicely framed the review

standard in these terms: "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." Dravo

Basic Materials Company, Inc. v. State Department of

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

As the court observed, this "is usually a fact-intensive

determination." Id. at 634.

96. To summarize, in reviewing an agency's intended

decision to reject all bids, the administrative law judge must

give substantial deference to the agency's determination,

owing to its wide discretion in procurement matters. There is

an appreciable difference, however, between according the

respect that deference entails and affixing the rubber stamp.

IX. Discussion

97. As set forth in the preceding Findings of Fact, the

trier has determined as matter of ultimate fact that the

Board's decision was arbitrary. These factual findings,

however, were necessarily informed not only by the

administrative law judge's application of the above legal

principles but also his legal conclusions regarding the

clarity of particular provisions of the ITB and the plain

meaning of those provisions.

98. The terms and conditions of the ITB upon which fact

findings were made were found to be unambiguous. Therefore,

in his role as the trier of fact, the administrative law judge

did not consider any extrinsic evidence regarding the meaning

of these provisions. In addition, it was not necessary for

the administrative law judge, as arbiter of the law, to resort

to principles of interpretation to understand the ITB. To the

extent findings of fact regarding the Board's intent as

plainly expressed in the unambiguous language of the ITB are

deemed to be legal conclusions, they are hereby incorporated

by reference as if set forth in this Conclusions of Law

section of the Recommended Order and adopted as such.

99. A brief comment on a couple of the Board's legal

contentions may shed additional light on the ultimate factual

findings. The Board has taken pains to make the facts of this

case seem to fit within the holding of Caber Systems, Inc. v.

Department of General Services , 530 So. 2d 325 (Fla. 1st DCA

1988). There are some superficial similarities between the

two cases. There, as here, the agency decided to reject all

bids after a disappointed bidder had protested the intended

award. Unlike this case, however, in Caber the administrative

law judge found, as a matter of fact, that the invitation to

bid was "seriously flawed in several respects." Id. at 331.

Indeed, the bid specifications were so ambiguous, a finding of

fact was made that the invitation to bid had failed clearly to

reflect either the agency's or anyone else's intent. Id. The

court held that, in view of the hopelessly ambiguous

specifications, the agency's rejection of all bids was neither

arbitrary nor capricious, even though the decision to pull the

plug on the procurement had been made while the first protest

remained pending. Id. at 336.

100. In stark contrast, the ITB here was not confusing,

ambiguous, or flawed. Rather, it clearly and plainly stated

the Board's intent. In fact, no reasonable bidder could have

been flummoxed by the purported flaws in the specifications

for the at-issue sequences. Caber , therefore, is

distinguishable on this basis. 14

101. The Board also relied heavily on U.S. Foodservice,

Inc. v. The School Board of Hillsborough County , 1998 WL

930094, DOAH Case No. 98-3415BID (Recommended Order issued

Nov. 17, 1998), in support of its position. There, another

school district issued a bid for main-line foods involving 297

items of main-line food and 37 items of snack foods and

beverages. All of the relevant bidders had included products

in their bids that failed to meet specifications. In an

attempt to salvage the procurement, the school district simply

eliminated from the bids all items “mis-bid” by any bidder —

i.e. items for which any bidder had proposed goods that failed

to meet specifications — and then it re-tabulated the cost of

each proposal to determine the low bidder. Calling this

process clearly erroneous, contrary to competition, and

arbitrary, see id. at *17, the administrative law judge issued

a recommended order urging that the proposed award be set

aside and the contract re-bid.

102. Nothing of the sort has occurred here, however, nor

is any similar action contemplated under any reasonably

foreseeable approach to proceeding with an award under this

ITB. Simply put, none of the bidders deemed to have submitted

responsive proposals mis-bid on any of the four items set

forth in the sequences at issue. Rather, unlike U.S.

Foodservice , they each quoted prices on conforming goods; it

thus was not only possible fairly and reasonably to tabulate

and compare the three responsive proposals without resort to

the kind of tampering that went on in the U.S. Foodservice

case, but also staff in fact did just that before Sysco’s

apparent loss of the contract and subsequent protest of the

intended result triggered the rejection decision under review

here. In short, U.S. Food Service is off-point and fails to

justify the Board’s decision to reject all bids.

X. General Conclusion

103. The evidence supports School Food’s claim that the

Board’s intended rejection of all bids is arbitrary. The

record establishes that the terms of Sequence Nos. 1009, 1036,

1037 and 2010 of the ITB were clear and unambiguous; the

plain-language Reconciliation Clause resolved definitively any

conflicts at those sequences between the approved branded

products in Column 3 and their respective descriptions in

Column 2. Letting authorities must be mindful that rejecting

all bids discourages competitive bidding and hence should be

the exception in public procurement rather than the rule.

Disregarding this maxim, the Board here acted precipitately

and without sufficient justification in fact or logic when it

decided to reject the bids received on this substantial

contract.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions

of Law, it is RECOMMENDED that the Board award the contract

advertised in the subject ITB to the lowest responsive,

responsible bidder, in accordance with the terms and

conditions of the ITB. It is further recommended that the

Board, pursuant to its own rules, return School Food’s protest

bond and, in the Final Order, award School Food the costs

Petitioner has incurred in prosecuting this matter. If a

dispute arises concerning the amount of such costs, the matter

may be referred to the Division of Administrative Hearings for

further proceedings.

DONE AND ENTERED this 31st day of May, 2001, in

Tallahassee, Leon County, Florida.

___________________________________

JOHN G. VAN LANINGHAM

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 31st day of May, 2001.

ENDNOTES

1 / The ITB provided that “[i ]f no brand is listed in Column

3, then ‘Distributor's Choice’ shall equal or exceed the

product description in Column 2.” (ITB, Section 5.03.)

Further, bidders were informed that "[t ]he decision whether a

product does or does not meet the requirements of Column 2 is

at the discretion of [the Board]." Id.

2 / Bidders were told that “[w ]henever an approved brand(s) is

listed in the same box with ‘Distributor's Choice,’ the

Distributor's Choice brand should be of equal or better

quality than the approved brand(s) listed, as interpreted by

[the Board].” (ITB, Section 5.03)( emphasis removed).

3 / In the Product Bid Sheets, "(F)" stood for "frozen," and

"VPP" referred to a vegetable protein product.

4 / In fact, a "frankfurter" is, by definition, a "cured

cooked sausage (as of beef or beef and pork) that may be

skinless or stuffed in a casing." Merriam-Webster's OnLine

Collegiate® Dictionary. The administrative law judge

recognizes, however, that the terms "frankfurter" and

"sausage," as used in ordinary discourse, commonly connote

different foods. The former uniquely calls to mind the

product frequently referred to as a "hot dog" or "wiener"

which is typically served in a bun. The term "sausage," in

contrast, is commonly associated with a meat product that is

spicier and more heavily seasoned than the ordinary

frankfurter.

5 / The Reconciliation Clause unambiguously drew a sharp

distinction between product codes that are in “conflict” with

product descriptions, on the one hand, and those which are

“obsolete” or “incorrect” on the other. The latter were

addressed in Sections 1.13 and 5.03, which instructed bidders

to enter the correct code when confronted with one that was

obsolete or incorrect — meaning, clearly, a code that, because

of a scrivener’s error or having gone out of use, described an

approved branded product that either never existed or was no

longer available. As the Reconciliation Clause made clear,

however, a product code would not be “incorrect” if it were in

“conflict” with the product description, provided the code

designated an actual, available product; to the contrary, an

in- conflict product code, by operation of the Reconciliation

Clause’s plain language, would be correct .

In the instant case, each of the approved branded products

that the Board now contends was “incorrect” is, in fact, an

actual, available product. Therefore, none was designated

with an “obsolete” or “incorrect” product code as Sections

1.13 and 5.03 of the ITB used those terms.

6 / The Board has argued that because it reserved the

discretion to decide “whether a product meets the requirements

of Column 2,” (ITB, Section 5.03), and because “[a ]ny item

that does not meet the specifications shall be disqualified”

(ITB, Section 1.03), thereby rendering a bid non-responsive, a

bidder that dared to quote prices on either Nardone’s 80MSA-

100, Prestige 30215, Nardone’s 100MA, or Leon’s 28002 — all of

which, remember, were approved branded products — did so at

the risk of having its bid rejected. This is an unconvincing

and illogical argument.

Plainly, in view of the Reconciliation Clause, the Board’s

right to disqualify an item — and with it, possibly, a bid —

based on that item’s failure to meet the requirements of

Column 2 extends only to Distributor’s Choice items and those

for which brand-only approval was given. For those items (as

many as 137) that required the bidder to choose brand, code,

or both, the bidder clearly needed to “carefully consider each

item for conformance to specifications.” See ITB, Section

1.03. On at least 48 items, however, bidders were not

required to choose either brand or code but rather were

instructed to bid on specific approved branded products. As

the Reconciliation Clause made clear beyond peradventure,

these items met the specifications even if there were a

conflict between any of them and their respective descriptions

in Column 2 . To disqualify a bid for having quoted an

approved branded product would be arbitrary and unacceptable.

7 / To be grounds for a rejection of all bids, a mistake or

misrepresentation in the bid specifications must be material .

See Capeletti Brothers, Inc. v. State Department of General

Services , 432 So. 2d 1359, 1362-63 (Fla. 1st DCA 1983).

Therefore, as an alternative finding of fact, the trier has

concluded that the purported conflicts between the approved

branded products on which School Food bid in response to the

sequences at issue and their respective product descriptions

do not constitute material misrepresentations or defects.

To see this, consider, as a thought experiment, what would

happen if Sysco were given the benefit of School Food’s lower

bids on Sequence Nos. 1009, 1036, 1037, and 2010, while School

Food was simultaneously burdened with Sysco’s higher bids on

those same items. The net effect of such a maneuver would

bring these two proposals closer together by about $77,000 —

not nearly enough to bridge the approximately $400,000 chasm

that separates them.

The point of this exercise is not to suggest that the bids

should be re-tabulated in this fashion — obviously they should

not be. Rather, it is to demonstrate that, as a practical

matter, neither the competition that this procurement entailed

nor the outcome of the contest was affected in the least by

the alleged flaws in the ITB. Indeed, the purported

deficiencies in the specifications had no more effect on the

competition and outcome than did Mr. High’s improper

communication with Sysco. See Paragraphs 38-39, supra . It

would be folly to throw out the bids for such inconsequential

“deficiencies.” No fair-minded reasonable person would take

such action.

Further highlighting the immateriality of the alleged

deficiencies is School Food’s representation, acknowledged by

the Board, that it can deliver any of the approved branded

products listed at the sequences in question for the same

prices quoted in its bid.

8 / See Air Support Services International, Inc. v.

Metropolitan Dade County , 614 So. 2d 583, 584 (Fla. 3d DCA

1993)(public bid requirements may not be materially altered

after the submission of bids).

9 / This is how the agency proceeded in U.S. Foodservice, Inc.

v. The School Board of Hillsborough County , 1998 WL 930094,

DOAH Case No. 98-3415BID (Recommended Order issued Nov. 17,

1998), a distinguishable case upon which the Board relies that

is discussed infra at Paragraphs 101-02.

10 / The Board has argued erroneously that it could not

properly make such a decision during the period between the

submission of bids and the contract award — a limitation

nowhere mentioned in the ITB. In fact, provided there is no

effect on the terms and conditions of the ITB under which the

contract award is made, the timing of Board’s decision to add

or delete items is irrelevant. To be sure, it is possible to

imagine a scenario in which the Board’s exercise of its right

to add or delete items might be an impermissible abuse of

discretion. Suppose, for example, that the Board knowingly

listed numerous items that it knew it did not want, with the

intent that its favored bidder would benefit thereby, and

then, after the award, it replaced the undesired items with

products that an unsuccessful bidder could have delivered at

lower cost than the contract recipient. In that case, a

strong argument could be made that the bid specifications had

been materially changed. But that hypothetical case, it

hardly need be said, is not this one.

11 / School Food concedes, and the administrative law judge

agrees, that Petitioner did not prove fraud or illegality on

the Board’s part. The administrative law judge rejects School

Food’s contention that the Board acted dishonestly; that

allegation was not proved by competent substantial evidence

either.

12 / Care must be taken not to read too much into this notion

because, obviously, “it ain’t necessarily so.” Clearly,

giving the disappointed bidders another chance to win the

contract spares them from immediate defeat — and, in that

sense at least, favors them. The result may or may not be the

result of favoritism — that is, partiality or bias on the

letting authority’s part — but the effect on the putatively

successful bidder is undeniably adverse either way. As Judge

Booth explained, “[o ]nce bids are opened and then rejected, a

favored bidder(s) is given the change to resubmit a low bid,

and the original low bidder loses the advantage as well as the

time and preparation costs for that bid. The power to reject

all bids, and the threat of the use of that power, are potent

weapons that can be misused to eliminate the fair, open

competitive bidding procedures.” Caber Systems, Inc. v.

Department of General Services , 530 So. 2d 325, 340 (Fla. 1st

DCA 1988)(Booth, J., concurring and dissenting)(footnote

omitted).

13 / This latter point, which has logical appeal when the

letting authority has decided to abandon the subject

procurement, lacks persuasive force when, as here, the agency

plans to proceed with an award of the contract in question.

14 / Because Caber is inapposite, it is not presently necessary

to decide whether that decision needs to be revisited in light

of subsequent statutory changes. Of particular interest,

however, is that, some two years after Caber was decided, it

became necessary to bring a specifications protest within 72

hours after receipt of the invitation to bid — or be deemed to

have waived the right to do so. Legislation enacted in 1990

inserted the following sentence into Section 120.53(5)(b),

Florida Statutes: "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."

Ch. 90-302, Laws of Florida. This language is currently found

in Section 120.57(3)(b).

Given the requirement that specifications be protested

immediately — which was not the law at the time of Caber —

there is now reason to view with some suspicion an agency's

decision to reject all bids on the basis of alleged problems

with the specifications when, as happened here, the purported

deficiencies have been brought to the agency's attention by

the protest of a disappointed bidder. The concern, of course,

is that the agency may have favored a preferred bidder by

granting it relief on grounds which the bidder, having failed

to bring a timely specifications protest, clearly had waived,

and by doing so effectively have circumvented the deadline

that Section 120.57(3)(b) imposes.

COPIES FURNISHED :

Honorable Charlie Crist

Commissioner of Education

Department of Education

The Capitol, Plaza Level 08

Tallahassee, Florida 32399-0400

Dr. Franklin Till, Jr.

Superintendent

Broward County School Board

600 Southeast Third Avenue

Fort Lauderdale, Florida 33301

Donald L. Lunny, Esquire

Brinkley, McNerney, Morgan, Solomon & Tatum, LLP

200 East Las Olas Boulevard, Suite 1800

Fort Lauderdale, Florida 33301

Jerome S. Reisman, Esquire

Reisman & Abraham, P.A.

3006 Aviation Avenue, Suite 4B

Coconut Grove, Florida 33133

Robert Paul Vignola, Esquire

School Board of Broward County

600 Southeast Third Avenue, 11th Floor

K. C. Wright Administrative Building

Fort Lauderdale, Florida 33301

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

10 days from the date of this R ecommended O rder. Any

exceptions to this R ecommended O rder should be filed with the

agency that will issue the F inal O rder in this case.