02-003922F Rhc And Associates, Inc. vs. Hillsborough County School Board Status: Closed DOAH Final Order on Monday, February 3, 2003.

Summary: School Board was not substantially justified when it issued competitive procurement solicitation without any evaluation criteria. No special circumstances would make fee award to Petitioner unjust. Award $5,563 in fees and costs.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RHC AND ASSOCIATES, INC., )

)

Petitioner, )

)

vs. ) Case No. 02 - 3922F

)

HILLSBOROUGH COUNTY SCHOOL )

BOARD, )

)

Respondent. )

)

FINAL ORDER

This cause came before T. Kent Wetherell, II, the

designated administrative law judge of the Division of

Administrative Hearings, on Petitioner's Amended Motion for

Attorney's Fees and Costs, filed on October 29, 2002.

APPEARANCES

For Petitioner: George P. Kickliter, Esquire

RHC and Associates, Inc.

Post Office Box 17326

Clearwater, Florida 33762 - 0326

For Respondent: W. Crosby Few, Esquire

Few & Ayala

501 East Kennedy Boulevard

Suite 1401

Tampa, Florida 33602

and

Jason L. Odom, Esquire

Thompson, Sizemore & Gonzales, P.A.

501 East Kennedy Boulevard

Suite 1400

Tampa, Florida 33602

ISSUE PRESENTED

The issue is whether Petitioner is entitled to an award of

attorney's fees and costs under Section 57.111, Florida

Statutes, as a prevailing small business party in DOAH Case No.

02 - 2230BID.

P RELIMINARY STATEMENT

On October 7, 2002, Petitioner filed a motion for

attorney's fees and costs in DOAH Case No. 02 - 2230BID. The

motion sought an award of attorney's fees and costs against the

Hillsborough County School Board (Respondent, School Board, or

District) pursuant to Sections 57.041, 57.071, 57.105, 57.111,

and 120.595(3), Florida Statutes. In accordance with the

standard practice of the Clerk of the Division of Administrative

Hearings (Division), in cases where the underlying Recommended

Orde r does not reserve jurisdiction on the issue of attorney’s

fees and costs, Petitioner’s motion was assigned a new case

number as reflected above.

On October 11, 2002, Respondent filed a motion to dismiss

Petitioner's motion for attorney's fees and costs. Respondent's

motion was disposed of through an Order dated October 15, 2002.

The October 15, 2002 Order denied Petitioner's request for

attorney's fees and costs under Sections 57.041, 57.071, 57.105,

and 120.595(3), Florida Statutes. The Order also dismi ssed

Petitioner's motion without prejudice with respect to the

request under Section 57.111, Florida Statutes, and gave

Petitioner leave to file an amended petition for attorney's fees

and costs which complied with Section 57.111, Florida Statutes.

On Octo ber 29, 2002, Petitioner filed an Amended Motion for

Attorney's Fees and Costs (Amended Motion) with supporting

affidavits. In compliance with October 15, 2002 Order,

Respondent filed a response to the Amended Motion on

November 12, 2002. The response i ncluded some, but not all of

the information required by the Initial Order issued in this

case on October 9, 2002. Accordingly, a telephonic case

management conference was held on November 21, 2002, to discuss

the scope of the issues remaining to be litig ated and the need

for an evidentiary hearing.

At the case management conference, the parties stipulated

that an evidentiary hearing was not necessary. The parties

further agreed that the disposition of this case should be based

upon the record of DOAH Cas e No. 02 - 2230BID (which is hereby

officially recognized) 1 ; the Final Order in DOAH Case No.

02 - 3138RP (which is hereby officially recognized); and the

pleadings, affidavits and legal memoranda filed in this case,

along with the parties' stipulations outl ined below.

The School Board stipulated at the case management

conference that Petitioner is a small business party (in light

of the uncontested affidavit of Petitioner's president and

majority owner), that Petitioner was a prevailing small business

party in DOAH Case No. 02 - 2230BID (in light of the final order

issued by the School Board adopting the Recommended Order in

that case), and that the attorney's fees and costs incurred by

Petitioner in DOAH Case No. 02 - 2230BID were reasonable (in light

of the unc ontested affidavit of Petitioner's attorney). The

School Board disputed that it "initiated" DOAH Case No. 02 -

2230BID for purposes of Section 57.111, Florida Statutes;

however, the School Board did stipulate that the request for

qualifications (RFQ) at iss ue in DOAH Case No. 02 - 2230BID did

not include any language advising substantially affected persons

of their right to challenge the specifications of the RFQ

(putting aside the question of whether it was required to do

so).

The parties were given an oppor tunity to file supplemental

legal memoranda on their respective positions no later than

December 13, 2002. Neither did so.

FINDINGS OF FACT

Based upon the pleadings, affidavits, stipulations, and the

matters officially recognized, the following findi ngs are made:

A. Parties

1. Petitioner is an engineering firm whose principal

office is located in Tampa, Florida.

2. Petitioner is certified as a minority - owned business by

the State of Florida and the School Board. Petitioner’s

majority own er and president is an African - American male.

At all times material hereto, Petitioner had less than 25 full -

time employees or a net worth less than $2 million.

3. Respondent is a local school district of the State of

Florida.

4. Respondent i s responsible for the construction,

renovation, management, and operation of the public schools in

Hillsborough County. To fulfill those responsibilities,

Respondent is often required to obtain the services of

architects, engineers, and other professional s through

competitive procurement under Section 287.055, Florida Statutes,

the Consultants’ Competitive Negotiation Act (CCNA).

B. DOAH Case No. 02 - 2230BID

5. On May 21, 2002, the School Board published a notice in

the Tampa Tribune announcing its n eed for professional

architectural and/or engineering services to supplement its in -

house staff of architects and inspectors in order to provide

increased on - site supervision, management, and inspection on

ongoing school construction projects.

6. The notice is a request for qualifications (RFQ), and

is subject to the provisions of the CCNA.

7. A report prepared by the Ernst & Young consulting firm

based upon its “forensic evaluation and analysis of the

District’s construction and maintenance policies , practices, and

procedures” had recommended augmenting the District’s staff in

the manner described in the RFQ.

8. At the time the RFQ was advertised, the only adopted

policy governing the School Board's acquisition of professional

services was Section 7 .14 of the Hillsborough County School

Board Policy Manual (Policy Manaual). Section 7.14 did not

specifically reference the CCNA and simply included a general

authorization for the Superintendent of the District or his or

her designee to “contract for pro fessional or educational

services to complete projects or activities authorized or

approved by the school board.”

9. The only other description of Respondent’s procurement

process under the CCNA in existence at the time the RFQ was

advertised was a docume nt entitled "Capital Projects Standard

Procedures" which was presented to but never adopted by the

School Board. That document references the CCNA in connection

with the selection of architects and construction managers, but

not engineers, and it only pro vided a general outline of the

selection process.

10. The RFQ did not specifically reference or otherwise

incorporate Section 7.14 of the Policy Manual or the “Capital

Projects Standard Procedures” document, nor did the RFQ explain

the criteria or fa ctors upon which the responses to the RFQ

would be evaluated or the weight that would be given to each

factor.

11. The RFQ did not specifically inform potential

Respondents of their right to file a protest challenging the

specifications, nor did it i nclude the language provided in

Section 120.57(3)(a), Florida Statutes.

12. Petitioner timely filed a notice of protest and formal

written protest challenging the specifications in the RFQ

pursuant to Section 120.57(3)(b), Florida Statutes. Among other

things, Petitioner challenged the absence of evaluation criteria

in the RFQ and the absence of a formally - adopted policy

governing the procurement process. Petitioner’s protest was

referred to the Division, where it was assigned DOAH Case No.

02 - 22 30BID.

13. A formal administrative hearing was held on the

protest, and on September 6, 2002, a Recommended Order was

issued in DOAH Case No. 02 - 2230BID (hereafter “Specification

Protest Recommended Order”). The Specification Protest

Recommended Ord er agreed with Petitioner that the specifications

in the RFQ were deficient and, more specifically, concluded

that:

the School Board's current selection process

is deficient because neither the RFQ or the

School Board's existing policies and

procedures spe cify in advance the factors

upon which the responses will be evaluated

nor do they identify the weight which the

School Board will give to each criteria.

The process is also deficient because the

selection committee members do not utilize a

uniform method of evaluating the

respondents. These deficiencies affect the

integrity of the School Board's selection

process and subvert the policies underlying

Section 287.055 and competitive procurement

generally. Accordingly, Petitioner met its

burden of showing t hat the RFQ

specifications are arbitrary and contrary to

competition.

Specification Protest Recommended Order, at 36 (paragraph 85)

(emphasis in original).

14. That conclusion was consistent with the report

prepared by Ernst & Young, the following e xcerpts from which are

pertinent here:

[W]e have identified significant

shortcomings related to ranking the

professional service providers that have

submitted bids for either architectural

design, engineering, or construction

management services.

* * *

[T]he architects and construction managers

within the [architectural/

engineering/construction (A/E/C)]

community do not understand how vendors are

evaluated or ultimately rank ordered [sic]

by the District to arrive at a list of the

three highest rank ed respondents. As a

matter of fact, the District has moved away

from using a score sheet or "score card"

with pre - established evaluation criteria and

a weighted point structure, and toward a

rather subjective process whereby a

selection committee simply appoints

professional service providers either based

upon past performance on a similar type of

project ( i.e . replicate design) or based

upon the District's desire to equitably

distribute work amongst the A/E/C community.

This type of evaluation and selec tion

process, as currently utilized by the

District, while effective at distributing

work amongst the A/E/C community, does not

ensure that the best or most qualified

vendor will be selected for each of the

proposed school district projects. The

current v endor selection process could

permit abuse and favoritism as the selection

committee could be influenced by School

Board input, personal relationship [sic] and

lack of objective criteria. Although we

found no evidence of undue influence, the

subjective na ture of the process offers the

District little credibility.

* * *

E&Y [Ernst & Young] found that the vendor

selection process being utilized by [the

District] lacks credibility in that it

remains highly subjective as new projects

are allocated withou t respect to numerical

analysis of prior performance, company

financial condition, proposed project

management team, etc. Moreover, the

selection committees do not rotate

sufficiently to eliminate the possible

influence from senior [District]

Administrato rs or Board Members.

* * *

Upon comparison to each of the peer and

contiguous school districts, Ernst & Young

found that only [the District] engages in a

vendor selection process in the absence of

pre - established or pre - determined evaluation

criteria and a numerically - based scoring

system which permits a numerical ranking of

each interested professional service

provider. E&Y found that the vendor

selection process being utilized by [the

District] lacks credibility in that it

remains highly subjective as new projects

are allocated without respect to numerical

analysis of proper performance, company

financial condition, proposed project

management team, etc. . . .

* * *

The District's vendor selection process can

be more objective and better under stood

within the A/E/C community by developing

standard evaluation criteria and a

numerically - based scoring system. Such a

system will permit the District to

numerically rank each interested

professional service provider and thus

eliminate bias and potent ial favoritism of

the [District] selection committee.

Evaluation criteria should include, among

other things, prior performance, company

financial condition, proposed project

management team, etc. . . .

E&Y Report, at 27 - 29, 107, 117.

15. The Er nst & Young report was formally transmitted to

the School Board on May 17, 2002, which is four days prior to

the date that the RFQ was published in the Tampa Tribune .

16. The Specification Protest Recommended Order and the

Ernst & Young report were n ot critical of all aspects of

Respondent’s procurement process. Both concluded that the

procedural elements of the evaluation process utilized by the

School Board were consistent with the procedural requirements in

the CCNA.

17. Specifically, the Ernst & Young report stated “[o]ur

review of [the District’s] vendor’s [sic] selection process

indicates in many respects, that the process follows traditional

requirements established by SREF [State Requirements for

Educational Facilities] and Florida Sta tute[s] . . . [and], in

many instances, the procedures mirror those utilized by peer and

contiguous school districts” (E&Y Report, at 27), and the

Specification Protest Recommended Order similarly concluded

that:

the School Board's current selection

proce ss, although not detailed in a

formally - adopted rule or policy, is

consistent with the procedural requirements

of the CCNA. The only material difference

is that the School Board has consolidated

the second and third steps in the process --

i.e. , qualifica tion and competitive

selection -- by interviewing every

respondent and not just three pre - qualified

firms as required by Section 287.055(4)(a).

Accordingly, Petitioner failed to show that

specifications of the RFQ are contrary to

the School Board's govern ing statutes ( i.e. ,

Section 287.055) or its rules or policies.

Specification Protest Recommended Order, at 35 - 36 (paragraph

84).

18. Nevertheless, based upon the deficiencies in the RFQ

described above, the Specification Protest Recommended Order

recomme nded that:

the School Board issue a final order that

rescinds the request for qualifications

published May 21, 2002, and reformulates the

specifications of the request in a manner

that, at a minimum, advises potential

respondents in advance of the factors upon

which the responses will be evaluated and

the weight that will be uniformly given to

each factor by the selection committee.

Id. at 37.

19. The School Board adopted the Specification Protest

Recommended Order at its meeting on October 1, 20 02, and

consistent with the recommendation therein it rescinded the RFQ.

C. DOAH Case No. 02 - 3138RP

20. In response to the Ernst & Young report and

Petitioner’s challenge to the RFQ specifications (and while DOAH

Case No. 02 - 2230BID was pending), t he School Board initiated the

rulemaking process under Chapter 120, Florida Statutes, to adopt

new policies and summaries of procedures to govern the

acquisition of professional services pursuant to the CCNA.

21. Petitioner timely challenged the pr oposed new policies

and summaries of procedure pursuant to Section 120.56(2),

Florida Statutes. The challenge was assigned DOAH Case No. 02 -

3138RP.

22. A formal administrative hearing was held, and on

October 11, 2002, a Final Order was issued in DO AH Case No.

02 - 3138RP (hereafter “Rule Challenge Final Order”). The Rule

Challenge Final Order dismissed Petitioner’s challenge to all of

the proposed new policies and summaries of procedures except for

that portion of proposed Section 7.31 of the Policy Manual which

provided that interviews are optional for projects costing less

than $1 million.

23. The procedural aspects of the new policies and

summaries of procedure are essentially the same as the practice

followed by the School Board in the past pur suant to Section

7.14 of the Policy Manual and the unadopted “Capital Project

Standard Procedures” document. However, the new policies and

summaries of procedure addressed the deficiencies in the

substantive elements of the School Board’s procurement proc ess.

In this regard, the Rule Challenge Final Order included the

following observation:

[T]he Proposed Rules address the fundamental

deficiencies in the School Board's

procurement process that were identified in

the Ernst & Young report and the Recommende d

Order in DOAH Case No. 02 - 2230BID. The

Proposed Rules require the factors/criteria

upon which the applicants will be evaluated

and the weights [sic] that will be given to

each factor to be formulated and provided to

the applicants in advance of each

sol icitation, and they require uniformity in

the evaluation and scoring of the applicants

by the Committee. The Proposed Rules also

provide the necessary framework for the

preparation of the project - specific forms

and materials which will be prepared in

conn ection with each RFQ/RFP, and they

provide a discernable standards against

which to judge those materials in the event

of a Section 120.57(3) protest of the

specifications of the RFQ/RFP or the award

of the contract arising therefrom.

Rule Challenge Final Order, at 57 - 58 (paragraph 145).

24. The Rule Challenge Final Order was not appealed.

D. Attorney’s Fees and Costs Incurred by Petitioner

25. Petitioner was represented in DOAH Case No. 02 - 2230BID

by attorney George Kickliter.

26. Mr. Kickliter spent 25 hours on Petitioner’s behalf in

DOAH Case No. 02 - 2230BID, and he charged Petitioner a fee of

$200.00 per hour. Accordingly, Petitioner incurred a total of

$5,000.00 in attorney’s fees in DOAH Case No. 02 - 2230BID.

27. Petitioner inc urred costs in the amount of $563.00 in

DOAH Case No. 02 - 2230BID. That amount is attributable to the

cost of the Transcript of the final hearing in that proceeding.

28. Respondent stipulated that the attorney’s fees and

costs incurred by Petitioner in DOAH Case No. 02 - 2230BID were

reasonable.

CONCLUSIONS OF LAW

A. Jurisdiction

29. The Division of Administrative Hearings has

jurisdiction over the parties to and subject matter of this

proceeding pursuant to Sections 57.111, 120.569, and 120.57(1),

F lorida Statutes. (All references to Sections are to the

Florida Statutes (2001), except as otherwise indicated. All

references to Rules are to the Florida Administrative Code.)

B. Section 57.111

30. The purpose and intent of Section 57.111, the F lorida

Equal Access to Justice Act (FEAJA), is as follows:

The Legislature finds that certain persons

may be deterred from seeking review of, or

defending against, unreasonable governmental

action because of the expense of civil

actions and administrative proceedings.

Because of the greater resources of the

state, the standard for an award of

attorney's fees and costs against the state

should be different from the standard for an

award against a private litigant. The

purpose of this section is to diminish the

deterrent effect of seeking review of, or

defending against, governmental action by

providing in certain situations an award of

attorney's fees and costs against the state.

Section 57.111(2). And see Dept. of Health and Rehabilitative

Servs. v. Sou th Beach Pharmacy, Inc. , 635 So. 2d 117, 121 (Fla.

1st DCA 1994) ("The Act is designed to discourage unreasonable

governmental action, not to paralyze agencies doing the

necessary and beneficial work of government.").

31. In furtherance of the stated legi slative purpose and

intent, Section 57.111(4)(a) provides:

Unless otherwise provided by law, an award

of attorney's fees and costs shall be made

to a prevailing small business party in any

adjudicatory proceeding or administrative

proceeding pursuant to ch apter 120 initiated

by a state agency, unless the actions of the

agency were substantially justified or

special circumstances exist which would make

the award unjust.

32. Section 57.111(3)(f), which defines "state agency" for

purposes of the FEAJA, specifically cross - references Section

120.52(1) which defines “agency” to include "educational units,"

see Section 120.52(1)(b)7., which in turn is defined in Section

120.52(6) to include local school districts. And cf.

Witgenstein v. School Board of Leon County , 347 So. 2d 1069,

1071 (Fla. 1st DCA 1977). Accordingly, Respondent is a "state

agency" for the purposes of the FEAJA.

33. The School Board stipulated that Petitioner is a small

business party and that Petitioner was a prevailing small

busin ess party in DOAH Case No. 02 - 2230BID. Accordingly, the

only issues in this proceeding are (1) whether DOAH Case No. 02 -

2230BID was initiated by the School Board for purposes of the

FEAJA, and (2) whether the actions of the School Board in DOAH

Case No. 0 2 - 2230BID were substantially justified or whether

special circumstances exist which would make and award of

attorney's fees and costs to Petitioner unjust. Each issue will

be addressed in turn.

1. Initiation of DOAH Case No. 02 - 2230BID

34. A proceeding is "initiated by a state agency" for

purposes of the FEAJA when that the state agency:

1. Filed the first pleading in any state or

federal court in this state;

2. Filed a request for an administrative

hearing pursuant to chapter 120; or

3. Was requir ed by law or rule to advise a

small business party of a clear point of

entry after some recognizable event in the

investigatory or other free - form proceeding

of the agency.

Section 57.111(3)(b) (emphasis supplied).

35. Subparagraphs 57.111(3)(b)1. a nd 2. are clearly

inapplicable. Accordingly, only if Subparagraph 57.111(3)(b)3.

applies can it be determined that DOAH Case No. 02 - 2230BID was

initiated by the School Board for purposes of an award under the

FEAJA.

36. It is undisputed that the Sch ool Board did not provide

Petitioner or other substantially affected parties a "point of

entry" in connection with the publication of the RFQ. However,

the issue is not whether it did so, but whether it "was required

by law or rule to do so."

37. Se ction 120.57(3)(a) requires agencies subject to

Chapter 120 (which includes local school districts pursuant to

Sections 120.52(1)(b)7. and 120.52(6)) to provide notice of

their decision or intended decision concerning a competitive

procurement solicitation or contract award. 2 Section

120.57(3)(a) further provides that:

The notice required by this paragraph shall

contain the following statement: "Failure

to file a protest within the time prescribed

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

constitute a waiv er of proceedings under

chapter 120, Florida Statutes."

38. As noted in the Specification Protest Recommended

Order (Pages 20 - 21, Paragraphs 53 - 55), there are two types of

protests that can be filed under Section 120.57(3) to challenge

an agency's c ompetitive procurement decision or intended

decision: (1) protests to the specifications in the procurement

document and (2) protests to the agency's intended award. And

see Section 120.57(3)(b) (describing the time for filing a

notice of protest at each point in the competitive procurement

process).

39. It is clear that an agency is required to provide a

point of entry to challenge its intended award of a

competitively - procured contract. That point of entry is

provided through the statement required by Section 120.57(3)(a),

and that has been considered to be the initiation of a

proceeding by the state agency for purposes of the FEAJA even

though the disappointed bidder initiated the protest in the

traditional sense by filing the protest. See, e.g. , Rey more v.

Department of Revenue , DOAH Case No. 96 - 1123F, 1996 WL 1060258

(Oct. 31, 1996); Mid America Governmental Group v. Daytona Beach

Community College , DOAH Case No. 96 - 1335F, 1996 WL 1060269 (Oct.

18, 1996); Pickett, Fanelli & O'Toole v. Department of Revenue ,

DOAH Case No. 96 - 1122F, 1996 WL 1060257 (Aug. 14, 1996); Belveal

v. Department of Revenue , DOAH Case No. 94 - 3926F, 1994 WL

1028217 (Dec. 19, 1994); Proctor v. Department of Health and

Rehabilitative Services , DOAH Case No. 93 - 0263F, 1993 WL 943745

(Sept. 3, 1993).

40. The same result is appropriate with respect to a

specification protest. Indeed, because the purpose of a

specification protest is to ensure fair competition amongst

potential Respondents, see Capaletti Bros., Inc. v. Department

of Transportation , 499 So. 2d 855, 857 (Fla. 1st DCA 1986), the

competitive procurement process is equally undermined by vague,

arbitrary, or otherwise unreasonable project specifications

(whether in a RFQ or other solicitation) as it is by an

arbitrary or ot herwise improper award of the contract. See

Specification Protest Recommended Order, at 33 - 34 (paragraph 82)

(citing Deloitte & Touche LLP v. Department of Health &

Rehabilitative Services , DOAH Case No. 95 - 0727BID, Recommended

Order (May 12, 1995), and o ther decisions describing the

importance of adequate specifications to the competitive

procurement process).

41. The Uniform Rules of Administrative Procedure, which

are adopted pursuant to Section 120.54(5) and are referenced in

Section 120.57(3)(a), sup port the conclusion that notice and a

point of entry must be provided at both points in the

procurement process, i.e. , publication of the specifications and

publication of the intended award. Specifically, Rule 28 -

110.002(2)(a) defines "decision or intend ed decision" (which is

the phrase used in Section 120.57(3)(a) to trigger the notice

requirement) to include "[t]he contents of an [invitation to

bid] or a [request for proposals] or other specifications ,

including addenda." (emphasis supplied).

42. Read together, Section 120.57(3)(a) and Rule 28 -

110.002(2)(a) require agencies to advise adversely affected

persons (through the statement provided in Section 120.57(3)(a))

of their opportunity to file a protest the specifications as

well as the intended award of the contract. Accordingly, the

School Board was required by statute and rule to provide a point

of entry to persons such as Petitioner in connection with its

posting of the RFQ, and as a result, the School Board initiated

DOAH Case No. 02 - 2230BID for purposes of the FEAJA. See Section

57.111(3)(b)3.

2. Substantial Justification or Special Circumstances

43. The School Board has the burden to demonstrate that

its actions were substantially justified or that special

circumstances exist that woul d make an award of attorney's fees

and costs to Petitioner unjust. See Helmy v. Department of

Business & Professional Reg. , 707 So. 2d 366, 368 (Fla. 1st DCA

1998); South Beach Pharmacy , 635 So. 2d at 121; Department of

Professional Reg. v. Toledo Realty, Inc. , 549 So. 2d 715, 717 - 18

(Fla. 1st DCA 1989).

a. Substantial Justification

44. Section 57.111(3)(e) provides that a proceeding is

"substantially justified" if it had "a reasonable basis in law

and fact at the time it was initiated by a state ag ency." This

standard has been described as "fall[ing] somewhere between the

no justiciable issue standard in Section 57.105 . . . and an

automatic award of fees to a prevailing party." Helmy , 707 So.

2d at 368. See also Department of Health & Rehabilita tive

Services v. S.G. , 613 So. 2d 1380, 1386 (Fla. 1st DCA 1993)

(explaining that non - frivolous does not equate to substantially

justified).

45. To demonstrate that its actions were substantially

justified, the agency must show that it had "a solid t hough not

necessarily correct basis in fact and law for the actions that

it took." S.G. , 613 So. 2d at 1386 (quoting McDonald v.

Schweiker , 726 F. 2d 311, 316 (7th Cir. 1983)); Fish v.

Department of Health , 825 So. 2d 421, 423 (Fla. 4th DCA 2002)

(same). At the very least, the agency must "have a working

knowledge of the applicable statutes under which it is

proceeding." Helmy , 707 So. 2d at 370.

46. Applying the foregoing standards to this case presents

a close question. On one hand, the procurem ent practice

followed by the School Board at the time the RFQ was published

was found to be " consistent with the procedural requirements of

the CCNA," even though it was not formally adopted through rule

or policy (Specification Protest Recommended Order, at 35 - 36),

which clearly suggests that Respondent had at least a working

knowledge of the CCNA. However, the School Board's failure to

articulate in advance the standards by which the responses to

the RFQ would be evaluated was found to be inconsistent wi th

well - established competitive procurement law ( id. at 32 - 35), and

had also been criticized by the Ernst & Young just days before

the RFQ was published (E&Y Report, at 27 - 29, 107, 117). These

factors strongly undercut the reasonableness of the School

Boa rd's decision to publish the RFQ.

47. On balance, it is concluded that the School Board was

not substantially justified for purposes of Section 57.111 when

it published the RFQ without any explanation as to the factors

that it would use to evaluate the re sponses or the weight that

would be given to those factors despite well - established law

requiring such and despite the findings of the Ernst & Young

report. In this regard, the School Board could have avoided

DOAH Case No. 02 - 2230BID altogether by simply rescinding the RFQ

upon receipt of Petitioner's notice of protest or formal written

protest (which alleged deficiencies nearly identical to those

detailed in the Ernst & Young report) while it addressed the

deficiencies through the adoption of new polices and summaries

of procedures. Had it done so, Petitioner would not have been

forced to incur the attorney's fees and costs that it incurred

in seeking review of the RFQ through the specification protest.

On this point, the following observations from Cour tenay v.

Department of Health & Rehabilitative Servs. , 581 So. 2d 621

(Fla. 5th DCA 1991), are relevant:

The bid procedure was fashioned to

discourage discriminatory governmental

awards and to assure the procurement of the

best value in exchange for public funds.

When the procedure is not followed, those

objectives are not achieved. Potential

bidders either may decline to participate in

bidding or may be tempted to add premiums to

the bids for having to deal with the

bureaucracy. The best that this court can

do is to award attorney's fees to the

challenging bidder who must have more

courage than a Mississippi riverboat

gambler. The bidder must gamble on winning

during the original bidding procedure, but

if he loses as a result of an unfair bid

procedure, he must then gamble that he will

prevail in a three - stage procedure -- once

before the hearing officer, once before the

agency, and, finally, before the appellate

court. The stakes of the gamble are that he

will be reimbursed the costs and attorney's

fees to obtain that which he was originally

guaranteed statutorily -- an opportunity to

obtain an award in a fair arena.

Id. at 623 - 24.

48. In making the foregoing determination that the School

Board was not substantially justified when it published th e RFQ,

the undersigned has not given any weight to the fact that the

new policies and summaries of procedures were upheld in DOAH

Case No. 02 - 3138RP because Section 57.l11(3)(e) limits that

determination to the circumstances in existence "at time [the

proc eeding] was initiated by the state agency," which in this

case is the publication of the RFQ. As a result, subsequent

events are not relevant in determining whether the School Board

was substantially justified when it published the RFQ. See

Romaguera v. Dept. of Professional Reg. , DOAH Case No. 87 - 3604F,

1988 WL 618003, at **3 - 4 (Jan. 4, 1988). See also Wisotsky,

Practice and Procedure Under the FEAJA , Florida Bar Journal,

April 1996, at 31 (noting that the FEAJA differs from the

federal Equal Access to Justice Act in that "substantial

justification" under the federal Act is based upon the "record

as a whole" whereas under the FEAJA it is determined only at the

time the action is initiated); Toledo Realty , 549 So. 2d at 718

(noting the same distinction).

49. In sum, Respondent failed to demonstrate that its

actions were "substantially justified" and therefore cannot

avoid an award of attorney's fees and costs to Petitioner under

the FEAJA on that ground.

b. Special Circumstances

50. Despite the fo regoing determination that Respondent's

actions were not substantially justified, it can still avoid an

award under the FEAJA if it proves that special circumstances

exist that would make an award to Petitioner unjust. See

Section 57.111(4)(d) (providing that fees shall be awarded to

prevailing small business party "unless the actions of the

agency were (1) substantially justified or (2) special

circumstances exist which would make the award unjust")

(emphasis supplied).

51. There is no definition of "spe cial circumstances" in

Section 57.111(4)(d). Nor do there appear to be any Florida

cases construing that defense.

52. There is, however, federal authority construing the

"special circumstances" defense that is codified in the federal

Equal Access to Just ice Act, 5 U.S.C.A. Section 504. Because

the FEAJA was patterned after the federal Equal Access to

Justice Act, cases construing the federal Act are persuasive

authority in construing the FEAJA. See Gentele v. Dept. of

Professional Reg. , 513 So. 2d 672 ( Fla. 1st DCA 1987).

53. In Grayson Electric Co. v. N.L.R.B. , 951 F.2d 1100,

1103 (9th Cir. 1981), the court quoted from a Congressional

report which explained that the "special circumstances" defense

in 5 U.S.C.A. Section 504(a)(1) "provides a safety valv e where

unusual circumstances dictate that the government is advancing

in good faith a credible, though novel, rule of law." And see

Animal Lovers Volunteer Ass'n v. Carlucci , 867 F.2d 1224, 1226

(9th Cir. 1989) (finding no special circumstances because " [t]he

litigation on the merits did not involve a close or novel

question"); United States v. Gavilan Joint Community College

Dist. , 849 F.2d 1246, 1249 (9th Cir. 1988) (finding no special

circumstances that would permit denial of an award because the

case did not involve a novel but credible interpretation of law,

an issue on which reasonable minds could differ, or an important

and doubtful question).

54. Unlike the substantial justification defense which, by

virtue of Section 57.111(3)(e), is limited to c ircumstances in

existence "at time [the proceeding] was initiated by the state

agency," the special circumstances defense is grounded in equity

and therefore appears to require a broader view of the

circumstances of the proceeding which generated the fee r equest.

Accordingly, in determining whether an award under the FEAJA

would be equitable (or "unjust"), all of the circumstances of

the DOAH Case No. 02 - 2230BID, including events subsequent to the

initiation of the proceeding such as the School Board's

suc cessful defense of its new policies and summaries of

procedures in the related DOAH Case No. 02 - 3138RP, are

appropriate to be considered.

55. In this regard, the School Board identified three

special circumstances which it contends would make an award to

Petitioner unjust. First, the School Board contends that it

acted in good faith in adopting the new policies and summaries

of procedures to cure the identified deficiencies in its

procurement practices. Second, the School Board argues that

Petitioner suf fered no prejudice in connection with DOAH Case

No. 02 - 2230BID because the RFQ was rescinded prior to an award

of the contract. And, third, the School Board points out that

new policies and summaries of procedures were upheld in the

related DOAH Case No. 02 - 3138RP.

56. The first and third circumstances relied upon by

Petitioner are related and are a variation of the mootness

argument previously rejected in the Specification Protest

Recommended Order, at pages 26 - 29. Those circumstances do not

constitut e "special circumstances" for purposes of the FEAJA.

Cf. Martin v. Heckler , 773 F.2d 1145 (11th Cir. 1985) ( en

banc )(holding that prompt adoption of remedial legislation which

provided plaintiffs relief they sought did not constitute

special circumstances which would allow agency to avoid a fee

award under 42 U.S.C.A. Section 1988 or 28 U.S.C.A. Section

2412), disapproved on other grounds by Texas State Teachers

Ass'n v. Garland , 489 U.S. 782, 784, 790 (1989):

Defendants' good faith, lack of culpability,

o r prompt remedial action do not warrant a

denial of fees under the special

circumstances preclusion.

* * *

The general concept that governmental

defendants will accede to complaints that

show clear error in the statutes and

regulations under which the y operate is not

sufficient to bar a fee award, if in fact

the litigation was the catalyst necessary to

bring about governmental action at the time.

Id. at 1150.

57. Moreover, the issue in the DOAH Case No. 02 - 2230BID --

i.e. , whether the specifications in the RFQ were inconsistent

with the provisions of Section 287.055, are arbitrary, or are

otherwise contrary to competition -- did not involve novel

issues of law as referenced in Grason and the cases and

Congressional report cited therein. While the qu estion as to

whether the School Board's existing practice was consistent with

Section 287.055 despite the absence of a formally adopted policy

was a close question, the question as to whether the RFQ was

arbitrary and contrary to competition was not. Inde ed, the

latter issue was decided based upon long - standing principles of

competitive procurement law and well - settled case law. See

Specification Protest Recommended Order, at 32 - 35.

58. Nor is the second alleged "special circumstance" a

sufficient basis to avoid an award of fees and costs under the

FEAJA. Indeed, in every case where the small business party

prevails in the underlying proceeding, it could be argued that

the business suffered no prejudice or injury since it ultimately

prevented or defeated the agency action. However, the prejudice

which the FEAJA seeks to remedy is the cost of seeking review of

or defending against the agency action. See Section 57.111(2).

And cf. Courtenay , supra . In this regard, as discussed above,

the fact that the S chool Board did not rescind the RFQ until

after the issuance of the Specification Protest Recommended

Order (and after Petitioner was forced to incur over $5,500.00

in attorney's fees and costs) weighs against the School Board

not in its favor.

59. In su m, none of the circumstances identified by

Respondent constitute "special circumstances," as the

counterpart language in the federal Equal Access to Justice Act

has been narrowly construed by the federal courts. Therefore,

Respondent failed to demonstrate that "special circumstances

exist that would make the award [of fees and costs to

Petitioner] unjust," and it cannot avoid an award of attorney's

fees and costs to Petitioner under the FEAJA on that ground.

ORDER

Based upon the foregoing findings of fact and conclusions

of law, it is

ORDERED that:

1. Petitioner's Amended Motion for Attorney's Fees and

Costs is GRANTED.

2. Respondent shall pay to Petitioner within thirty (30)

days of the date of this Order the sum of $5,563.00, which

represents the reasonable attorney's fees and costs incurred by

Petitioner in DOAH Case No. 02 - 2230BID.

DONE AND ORDERED this 3rd day of February, 2003, in

Tallahassee, Leon County, Florida.

___________________________________

T. KENT WETHERELL, II

Administrative L aw Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 3rd day of February, 2003.

ENDNOTES

1/ Because the School Board, and not the Division, issued the

final order in DOAH Case No. 02 - 2230BID, the Division only

retained the pleadings filed in that case. The remainder of the

record in DOAH Case No. 02 - 2230BID -- i.e. , Transcript,

exhibits, and matters officially recognized -- was transmitted

to the School Board with the Recommended Order issued in that

case. Respondent filed the exhibits from DOAH Case No. 02 -

2230BID with the Division on De cember 13, 2002, and filed the

Transcript from that case with the Division on December 23,

2002.

2/ Section 120.57(3) was amended in the 2002 Session. See

Chapter 2002 - 207, Section 2, Laws of Florida (effective July 1,

2002). That Act replaced referenc es to "bidding" in Section

120.57(3), including those references in Section 120.57(3)(a),

with the more generic "contract solicitation or award process."

The 2002 amendments appear to be clarifying in nature since the

Uniform Rules of Administrative Proce dure adopted in 1997

interpreted the prior version of Section 120.57(3) to apply to

all competitive procurement decisions and not just those arising

out of the competitive bidding process. See Rule 28 - 110.001(1).

COPIES FURNISHED :

W. Crosby Few, Esquir e

Few & Ayala

501 East Kennedy Boulevard

Suite 1401

Tampa, Florida 33602

George P. Kickliter, Esquire

RHC and Associates, Inc.

Post Office Box 17326

Clearwater, Florida 33762 - 0326

Jason L. Odom, Esquire

Thompson, Sizemore & Gonzales, P.A.

501 East Kenn edy Boulevard

Suite 1400

Tampa, Florida 33602

Dr. Earl J. Lennard, Superintendent

Hillsborough County School Board

Post Office Box 3408

Tampa, Florida 33601 - 3408

Daniel J. Woodring, General Counsel

Department of Education

Turlington Building, Room 1244

325 West Gaines Street

Tallahassee, Florida 32399 - 0400

Honorable Jim Horne

Commissioner of Education

Turlington Building, Suite 1514

325 West Gaines Street

Tallahassee, Florida 32399 - 0400

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adv ersely affected by this Final Order is

entitled to judicial review pursuant to Section 120.68, Florida

Statutes. Review proceedings are governed by the Florida Rules

of Appellate Procedure. Such proceedings are commenced by

filing the original notice of appeal with the Clerk of the

Division of Administrative Hearings and a copy, accompanied by

filing fees prescribed by law, with the District Court of

Appeal, First District, or with the District Court of Appeal in

the Appellate District where the party res ides. The notice of

appeal must be filed within 30 days of rendition of the order to

be reviewed.