03-001581BID E - Builder vs. Miami-Dade County School Board Status: Closed Recommended Order on Friday, October 10, 2003.

Summary: Petitioner failed to establish that Respondent`s preliminary decision to award a public contract was contrary to a governing statute, rule, policy, or project specification. Recommended that bid protest be rejected.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

E - BUILDER, )

)

Petitioner, )

)

vs. ) Case No. 03 - 1581BID

)

MIAMI - DADE COUNTY SCHOOL BOARD, )

)

Respondent, )

)

and )

)

EMERGING SOLUTIONS d/b/a )

CONSTRUCTWARE, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

This case came before Administrative Law Judge John G.

Van Laningham for final hearing on June 17 and 18, 2003, in

Miami, Florida.

APPEARANCES

For Petitioner: Aaron R. Resnick, Esquir e

Gunster, Yoakley & Stewart, P.A.

One Biscayne Tower, Suite 3400

2 South Biscayne Boulevard

Miami, Florida 33131

For Respondent: Luis M. Garcia, Esquire

Miami - Dade County School Board

1450 Northeast 2nd Avenue, Suite 400

Miami, Florida 33132

For Intervenor: Mitchell A. Bierman, Esquire

Weiss, Serota, Helfman, Pastoriza

& Guedes, P.A.

2665 South Bayshore Drive, Suite 420

Miami, Florida 33133

STATEMENT OF THE ISSUES

The issues in this bid protest are whether, in making a

preliminary decision to award a public contract, Respondent

acted contrary to a governing statute, rule, policy, or project

specification; and, if so, for each such instance, whether th e

misstep was clearly erroneous, arbitrary or capricious, or

contrary to competition.

PRELIMINARY STATEMENT

Petitioner E - Builder, Inc. (“E - Builder”) has challenged a

selection committee’s recommendation to Respondent Miami - Dade

County School Board (the “B oard”) that a contract be awarded to

Intervenor Emerging Solutions d/b/a Constructware, Inc.

(“Constructware”). The subject contract is for internet - based

collaborative construction and claims reduction support

services, which will facilitate the administ ration of the

ongoing capital construction program in the Miami - Dade County

Public School District (the “District”).

Six vendors submitted proposals in response to Request for

Proposals No. 026 - CC10, which had been issued in the autumn of

2002. A selection committee reviewed the proposals and, in

December 2002, voted to recommend that the contract be awarded

to Constructware. E - Builder protested, the Board referred the

matter to the Division of Administrative Hearings (“DOAH”),

Constructware was allowed to intervene, and the undersigned

scheduled a final hearing, which took place on June 17 and 18,

2003.

At the final hearing, E - Builder presented Jonathan Antevy,

one of its principals, together with four witnesses who were, at

the time, employ ees of the District, namely Rose Barefield Cox,

John Pennington, Barbara Jones, and Laurence White. E - Builder

also offered 15 exhibits (Petitioner’s Exhibits 4, 25 - 27, 30,

40, 49, 55, 56, 132, 133, and 143 - 46), which were received into

evidence.

By agre ement of the parties, the Board and Constructware

conducted direct examinations, as desired, of the witnesses

called during E - Builder’s case. As well, exhibits numbered 2 - 12

were admitted as Respondent’s Exhibits, and official recognition

was taken of Sch ool Board Rule 6Gx13 - 8C - 1.064 , which was marked

for identification as Respondent’s Exhibit 1.

T he final hearing transcript was filed with DOAH on

September 8, 2003, and the parties timely filed their respective

Proposed Recommended Orders before the e stablished deadline,

which was September 26, 2003.

Unless otherwise indicated, citations to the Florida

Statutes refer to the 2003 Florida Statutes.

FINDINGS OF FACT

I. The Request for Proposals

1. In the fall of 2002, the Board issued Request for

Pro posals No. 026 - CC10 (the “RFP”) to solicit offers on a

contract for internet - based collaborative construction and

claims reduction support services.

2. As stated in Section II at page 1, the purpose of the

RFP was

[t]o commission one or more firms to provide

the Board with internet - based collaborative

construction and claims reduction support

services. It is intended that this

technology be gradually phased into the

construction program as new projects from

the District’s Capital Construction Five -

ye ar Work Plan come online. Miami - Dade

County Public Schools is the fourth largest

public school system in the nation and has a

large - scale on - going capital construction

program.

The deadline for submission of proposals in response to the RFP

was Novembe r 26, 2002.

3. Section V of the RFP, which was titled “Required

Information to be Submitted by Proposers,” prefaced a list of

ten specific items with the instruction that “[a]ll proposals

shall contain the following information and shall be presented

i n the following format[.]” There is no dispute that material

compliance with Section V was mandatory and that proposals could

be —— and in fact were —— disqualified from consideration for

failure to include all of the required information.

4. Section VI of the RFP set forth the scope of work. It

provided, in pertinent part:

The proposer(s) shall provide Internet

collaborative construction and claims

reduction support services for use in

connection with the [Board]’s capital

construction program which should include

but not be limited to, the following:

A. The proposer should provide an off -

the - shelf application product and

application service provider services on a

purely web - based system. Users will access

and interface with the application via the

inter net using Internet Explorer TM browser

software running on computer workstations

under typical Windows TM operating system.

Users should not have to purchase or have

installed on their workstations any other

applications in order to use the application

serv ice provider's application. The

application service provider should host all

applications and data and own and/or own the

lease to their facility as well as all

hardware and software. The application

should include but not limited to the

following:

* * *

9. Custom web site documents folders

and subfolders creation and organization and

the ability to submit multiple documents or

files (select, drag and drop) to the project

web site electronically from authorized

computer workstations. Project folders

should be capable of storing, including but

not limited to, all plans, drawings,

specifications, contracts, general

conditions, surveys, geo - technical

photographs, reports and other documents

typically encountered in a multiple - large -

project const ruction program.

* * *

11. Ability to submit documents to

specific web site documents folders or

attach them to specific forms using

facsimile machines to allow non - computer

users to interface with the system. Ability

to electronically print documents directly

to web site documents folders from other

Windows TM applications. Ability to download

documents from the project site and to

resubmit them as new versions with all

original maintained and accessible.

* * *

C. Furnish and insta ll a zoom/tilt/pan

web - camera and connect to a high speed

Internet connection at each construction

site. Proposers should provide web camera

server equipment and ISP services necessary

to support web camera functions such as

automatic multiple daily view picture

taking, picture archival and retrieval and

time lapse playback of pictures.

5. Section VII of the RFP, which prescribed various

“submittal requirements,” stated in relevant part:

Proposers shall indicate in their submittal,

the capabilities of t heir system regarding

the above scope of work, as well as the

following:

A. Initial set - up process, list Licenses

requirements, state the software and

hardware requirements for M - DCPS in order to

use the web - based system (i.e. browser plug -

ins, operating systems, etc).

* * *

E. Describe the training program to train

M - DCPS in use of the web - based system, on

site, number of classes, number of students

and hours of training proposed.

* * *

G. Describe travel distance from technical

sup port to M - DCPS. Provide technical

support in person at M - DCPS when required.

II. The Evaluation

6. On December 9, 2002, a group of individuals who had

been appointed to serve on a committee (the “Evaluation

Committee”) whose task was to make a recomme ndation to the Board

as to whom should be awarded the contract met to review the six

proposals that were timely submitted in response to the RFP.

The Evaluation Committee unanimously agreed that the proposals

submitted by E - Builder, Constructware, and ano ther vendor were

responsive to the requirements of Sections V, VI, and VII; the

other proposers were eliminated from further consideration. The

Evaluation Committee decided to invite the three remaining

contenders to make presentations to the Evaluation C ommittee at

a later date.

7. The Evaluation Committee met again on December 16,

2002. At that time, the three proposers still in the

competition were allowed one hour apiece to demonstrate,

explain, and answer questions about their respective solutions.

After the presentations, the Evaluation Committee voted for the

proposal which best met the needs of the District. When the

votes were tallied, Constructware was the winner, with E - Builder

in second place. Accordingly, the Evaluation Committee agreed

t o recommend that the contract be awarded to Constructware.

III. Relevant Details About Constructware’s Proposal

8. Because the instant protest is based largely on E -

Builder’s contention that Constructware’s proposal was

materially nonresponsive to severa l provisions in Sections VI

and VII of the RFP, the following is a brief look at the

relevant aspects of Constructware’s response to the RFP.

9. In its proposal, Constructware addressed the items

contained in Section VI by interlining specific responses within

the relevant language of the RFP, which language was reproduced

in its entirety. For present purposes, given the reasons for

the recommended disposition that follows, it is not necessary to

quote Constructware’s responses to Section VI, which are

i ncluded in the evidentiary record in any event. Suffice it to

say that Constructware’s proposal was complete in the sense that

for each item listed in Section VI, Constructware provided a

response, offered a solution, or explained what it could do if

awar ded the contract.

10. Turning to Section VII, Constructware’s proposal

stated in pertinent part as follows:

[With reference to Section VII.A.,]

Constructware is a true [Application Service

Provider] requiring only a web - browser and a

connection to the Internet. The System can

function on a 56K connection, but faster

bandwidth is recommended for maximum

performance.

* * *

[With reference to Section VII.E.,]

Constructware has established a team of

individuals specifically geared to train and

implement the application to M - DCPS’ unique

needs. The Solution Group is made up of

professional Implementation Managers and

Certified Constructware Trainers. In most

cases, the Implementation Manager will meet

with your executive team to understand the

scope of the program / project(s) and the

desired goal of using the application. With

this information and direct feedback from

your team, the Implementation Manager will

develop a scope document to help guide the

team through this rollout. This informat ion

will be shared with the Certified

Constructware Trainers to develop a custom

training plan to meet your goals.

Throughout the rollout, the Implementation

Managers will stay in contact with your

executive team to provide status and update

the rollout p lan as the project progresses.

The following is a list of the standard

training and implementation options

available:

1) Private Training – ½ day to 5 day

per student depending on the amount of the

product utilized and the type of user

trained. Class s izes for private training

are limited to 12 students.

2) Train the Trainer – 5 day course

designed to train in - house individuals to

act as your personal certified trainer.

3) Public Training – 3 - day course in

our Atlanta Headquarters covering the

ma jority of the modules available.

4) Implementation Services

5) Orientation – Offered as part of

the initial database setup, this orientation

would assist your Constructware Supervisor

on how to get started with the system. This

orientation is done r emotely utilizing Webex

technology.

* * *

[With reference to Section VII.G.,]

[b]ecause Constructware is an Internet - based

application, technical support staffs have

not been required to travel to a client’s

site to resolve issues. Constructwa re

utilizes the Webex technology to review user

browser settings in the event a user has any

problems accessing the product. Clients

wanting a true web - based system should

exercise caution dealing with vendors

offering on site technical support. This is

a prime indicator of workstation setups and

additional software loads not required on

true web - based solutions.

Constructware’s Solutions Group offers

consultant visits to ensure proper

connectivity and browser settings in the

event clients lack the tec hnical staff that

would normally handle these procedures.

Constructware is headquartered near Atlanta,

Georgia. All support staff and consultants

are based in this office, but are accustom

[ sic ] to traveling to client sites

throughout the nation when req uired.

IV. E - Builder’s Protest

11. By letter dated December 18, 2002, E - Builder was told

that it would not be awarded the contract. The letter, however,

did not notify E - Builder, as it should have pursuant to Section

120.57(3)(a), Florida Statutes, that failure to file a formal

protest within the time prescribed in Section 120.57(3) would

constitute a waiver of proceedings under the Administrative

Procedure Act (“APA”).

12. To better understand what happened next, it is useful

to know that the RFP, at page iii, set up an informal protest

procedure as a nonexlusive alternative to formal administrative

proceedings under the APA. According to this informal

procedure,

[p]roposers may file letters of protest no

later than 48 hours prior to the Board

Mee ting for which the award is scheduled to

be made. These letters of protest will be

reviewed by Staff. Staff will offer the

protesting proposer the opportunity for a

meeting to discuss the protest. If the

proposer is not satisfied with the response

to th e protest, he/she may request to

address the School Board.

On January 13, 2003, E - Builder submitted an “Official Letter of

Protest” that was timely under the above quoted provisions

because the Board was scheduled to make the award at its meeting

on Janua ry 15, 2003. As a result of E - Builder’s informal

protest, the item relating to the contract in question was

removed from the Board’s agenda for January 15.

13. By letter dated February 10, 2003, E - Builder was

informed that the Board’s staff had decided that the informal

protest was without merit and that E - Builder had “failed to

demonstrate violation of any established procedures or

misconduct on the part of the evaluation committee.” E - Builder

was further notified that it could “request to address the

school board [at its next meeting on February 12, 2003, when the

award was expected to be made], or invoke the provisions of §

120.569 Florida Statutes.”

14. On February 12, 2003, within 72 hours after receiving

the letter just discussed, E - Builder del ivered to the Board a

letter styled “Supplement to Official Letter of Protest.” In

this supplemental protest letter, E - Builder reiterated its

desire to protest the intended award and expressed its intent to

address the Board later that day. While there i s room for

debate, the undersigned finds and concludes that E - Builder’s

correspondence of February 12, 2003, constituted a “notice of

protest” which was effective to commence the formal bid protest

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

15. At its meeting on February 12, 2003, the Board heard

from E - Builder concerning the pending protest, and following

that the recommendation to award Constructware the contract was

tabled. (As of the date of the final hearing, the Board had

taken no further action toward awarding the contract.)

16. On February 20, 2003, E - Builder filed with the Board a

“Petition of Committee Recommendation Regarding Request for

Proposal No.: 026 - CC10 and for Formal Administrative Hearing.”

The undersigned finds and concludes that this petition

constituted a timely filed “formal written protest” as that term

is used in Section 120.57(3)(b), Florida Statutes; as such, the

February 20, 2003, petition is the operative pleading in this

case.

17. As bases for relief, E - Builder asserted in its

petition, among other things, that Constructware’s proposal was

materially nonresponsive for failure to comply with several of

the RFP’s allegedly mandatory requirements. E - Builder also

alleged that the Evaluation Committee had fai led to take into

account total annual cost when weighing the merits of the

respective proposals. 1

CONCLUSIONS OF LAW

V. Jurisdiction

18. The Division of Administrative Hearings has personal

and subject matter jurisdiction in this proceeding pursuant to

S ections 120.569 and 120.57(1), Florida Statutes, and the

parties have standing.

VI. The Burden of Proof

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

the burden of proof rests with the party opposing the proposed

agency action, here E - Builder. See State Contracting and

Engineering Corp. v. Department of Transp. , 709 So. 2d 607, 609

(Fla. 1st DCA 1998). E - Builder must sustain its burden of proof

by a preponderance of the evidence. Florida Dept. of Transp. v.

J.W.C. Co., Inc ., 396 So. 2d 778, 7 87 (Fla. 1st DCA 1981).

VII. The Rules of Decision in Bid Protests

A. The Standard of Conduct

20. Section 120.57(3)(f), Florida Statutes, spells out the

rules of decision applicable in bid protests. In pertinent

part, the statute provides:

In a compet itive - procurement protest, other

than a rejection of all bids, the

administrative law judge shall conduct a de

novo proceeding to determine whether the

agency's proposed action is contrary to the

agency's governing statutes, the agency's

rules or policies, or the bid or proposal

specifications. The standard of proof for

such proceedings shall be whether the

proposed agency action was clearly

erroneous, contrary to competition,

arbitrary, or capricious.

21. The First District Court of Appeal has construe d the

term “de novo proceeding,” as used in Section 120.57(3)(f),

Florida Statutes, to “describe a form of intra - agency review.[ 2 ]

The judge may receive evidence, as with any formal hearing under

section 120.57(1), but the object of the proceeding is to

e valuate the action taken by the agency.” State Contracting and

Engineering Corp. v. Department of Transp. , 709 So. 2d 607, 609

(Fla. 1st DCA 1998). In this, the court followed its earlier

Intercontinental Properties, Inc. v. State Dept. of Health and

Reh abilitative Services , 606 So. 2d 380, 386 (Fla. 1st DCA

1992), a decision which predates the present version of the bid

protest statute, wherein the court had reasoned:

Although the hearing before the hearing

officer was a de novo proceeding, that

simply m eans that there was an evidentiary

hearing during which each party had a full

and fair opportunity to develop an

evidentiary record for administrative review

purposes. It does not mean, as the hearing

officer apparently thought, that the hearing

officer s its as a substitute for the

Department and makes a determination whether

to award the bid de novo. Instead, the

hearing officer sits in a review capacity,

and must determine whether the bid review

criteria set . . . have been satisfied.

22. In framing t he ultimate issue to be decided in this de

novo proceeding as being “whether the agency’s proposed action

is contrary to the agency’s governing statutes, the agency’s

rules or policies, or the bid or proposal specifications,” the

statute effectively establ ishes a standard of conduct for the

agency, which is that, in soliciting and accepting bids or

proposals, the agency must obey its governing statutes, rules,

and the project specifications. If the agency breaches this

standard of conduct, its proposed act ion is subject to

(recommended) reversal by the administrative law judge in a

protest proceeding.

23. Consequently, the party protesting the intended award

must identify and prove, by the greater weight of the evidence,

a specific instance or instances w here the agency’s conduct in

taking its proposed action was either:

(a) contrary to the agency’s governing statutes;

(b) contrary to the agency’s rules or policies; or

(c) contrary to the bid or proposal specifications.

24. It is not sufficient, however, for the protester to

prove merely that the agency violated the general standard of

conduct. By virtue of the applicable standards of “proof,”

which are best understood as standards of review, 3 the protester

additionally must establish that the ag ency’s misstep was:

(a) clearly erroneous;

(b) contrary to competition; or

(c) an abuse of discretion.

25. The three review standards mentioned in the preceding

paragraph are markedly different from one another. The abuse of

discretion standard, for example, is more deferential (or

narrower) than the clearly erroneous standard. The bid protest

review process thus necessarily entails a decision or decisions

regarding which of the several standards of review to use in

evaluating a particular action . To do this requires that the

meaning and applicability of each standard be carefully

considered.

B. The Standards of Review

1. The Clearly Erroneous Standard

26. The clearly erroneous standard is generally applied in

reviewing a lower tribunal’s f indings of fact. In Anderson v.

City of Bessemer City, N.C. , 470 U.S. 564, 573 - 74 (1985), the

United States Supreme Court expounded on the meaning of the

phrase “clearly erroneous,” explaining:

Although the meaning of the phrase "clearly

erroneous" is not immediately apparent,

certain general principles governing the

exercise of the appellate court's power to

overturn findings of a [trial] court may be

derived from our cases. The foremost of

these principles . . . is that "[a] finding

is 'clearly erroneou s' when although there

is evidence to support it, the reviewing

court on the entire evidence is left with

the definite and firm conviction that a

mistake has been committed ." . . . . This

standard plainly does not entitle a

reviewing court to reverse the finding of

the trier of fact simply because it is

convinced that it would have decided the

case differently. The reviewing court

oversteps the bounds of its duty . . . if it

undertakes to duplicate the role of the

lower court. "In applying the clearly

e rroneous standard to the findings of a

[trial] court sitting without a jury,

appellate courts must constantly have in

mind that their function is not to decide

factual issues de novo. " . . . . If the

[trial] court's account of the evidence is

plausible in light of the record viewed in

its entirety, the court of appeals may not

reverse it even though convinced that had it

been sitting as the trier of fact, it would

have weighed the evidence differently. Where

there are two permissible views of the

evidenc e, the factfinder's choice between

them cannot be clearly erroneous. . . . .

(Citations omitted)(emphasis added).

27. The Florida Supreme Court has used somewhat different

language to give this standard essentially the same meaning:

A finding of fac t by the trial court in a

non - jury case will not be set aside on

review unless there is no substantial

evidence to sustain it, unless it is clearly

against the weight of the evidence, or

unless it was induced by an erroneous view

of the law. A finding whi ch rests on

conclusions drawn from undisputed evidence,

rather than on conflicts in the testimony,

does not carry with it the same

conclusiveness as a finding resting on

probative disputed facts, but is rather in

the nature of a legal conclusion. . . . .

When the appellate court is convinced that

an express or inferential finding of the

trial court is without support of any

substantial evidence, is clearly against the

weight of the evidence or that the trial

court has misapplied the law to the

established facts, then the decision is

'clearly erroneous' and the appellate court

will reverse because the trial court has

'failed to give legal effect to the

evidence' in its entirety.

Holland v. Gross , 89 So. 2d 255, 258 (Fla. 1956)(citation

omitted).

28. Be cause administrative law judges are the triers of

fact charged with resolving disputed issues of material fact

based upon the evidence presented at hearing, and because bid

protests are fundamentally de novo proceedings, the undersigned

is not required to defer to the letting authority in regard to

any findings of objective historical fact that might have been

made in the run - up to preliminary agency action. It is

exclusively the administrative law judge’s job, as the trier of

fact, to ascertain from the c ompetent, substantial evidence in

the record what actually happened in the past or what reality

presently exists, as if no findings previously had been made.

29. If, however, the challenged agency action involves an

ultimate factual determination —— for e xample, an agency’s

conclusion that a proposal’s departure from the project

specifications was a minor irregularity as opposed to a material

deviation —— then some deference is in order, according to the

clearly erroneous standard of review. 4 To prevail on an

objection to an ultimate finding, therefore, the protester must

substantially undermine the factual predicate for the agency’s

conclusion or convince the judge that a defect in the agency’s

logic led it unequivocally to commit a mistake.

30. There is a nother species of agency action that also is

entitled to review under the clearly erroneous standard:

interpretations of statutes for whose administration the agency

is responsible, and interpretations of the agency’s own rules.

See State Contracting and Engineering Corp. v. Department of

Transp. , 709 So. 2d 607, 610 (Fla. 1st DCA 1998). In deference

to the agency’s expertise, such interpretations will not be

overturned unless clearly erroneous. Id. 5

31. This means that if the protester objects to the

proposed agency action on the ground that it violates either a

governing statute within the agency’s substantive jurisdiction

or the agency’s own rule, and if, further, the validity of the

objection turns on the meaning, which is in dispute, of the

subjec t statute or rule, then the agency’s interpretation should

be accorded deference; the challenged action should stand unless

the agency’s interpretation is clearly erroneous (assuming the

agency acted in accordance therewith). 6

2. The Abuse of Discretion S tandard

32. The statute requires that agency action (in violation

of the applicable standard of conduct) which is “arbitrary, or

capricious” be set aside. Earlier, the phrase “arbitrary, or

capricious” was equated with the abuse of discretion standard,

s ee endnote 3, supra , because the concepts are practically

indistinguishable —— and because use of the term “discretion”

serves as a useful reminder regarding the kind of agency action

reviewable under this highly deferential standard.

33. It has been obse rved that an arbitrary decision is one

that is not supported by facts or logic, or is despotic. Agrico

Chemical Co. v. State Dept. of Environmental Regulation , 365 So.

2d 759, 763 (Fla. 1st DCA 1978), cert. denied , 376 So. 2d 74

(Fla. 1979). Thus, under the arbitrary or 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.” Ad am Smith Enterprises, Inc.

v. State Dept. of Environmental Regulation , 553 So. 2d 1260,

1273 (Fla. 1st DCA 1989). Nevertheless,

the reviewing court must consider whether

the agency: (1) has considered all relevant

factors; (2) has given actual, good fai th

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.

34. The second district framed the “arbitrary or

capricious” 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 Co., Inc. v. State Dept.

of Transp. , 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.

35. Compare the foregoing “arbitrary or capricious”

analysis with the test for reviewing discretionary d ecisions:

"Discretion, in this sense, is abused when

the judicial action is arbitrary, fanciful,

or unreasonable, which is another way of

saying that discretion is abused only where

no reasonable man would take the view

adopted by the trial court. If re asonable

men could differ as to the propriety of the

action taken by the trial court, then it

cannot be said that the trial court abused

its discretion."

Canakaris v. Canakaris , 382 So. 2d 1197, 1203 (Fla. 1980),

quoting Delno v. Market St. Ry. Co. , 124 F .2d 965, 967 (9th Cir.

1942). Further,

[t]he trial court's discretionary power is

subject only to the test of reasonableness,

but that test requires a determination of

whether there is logic and justification for

the result. The trial courts' discretion ary

power was never intended to be exercised in

accordance with whim or caprice of the judge

nor in an inconsistent manner. Judges

dealing with cases essentially alike should

reach the same result. Different results

reached from substantially the same fa cts

comport with neither logic nor

reasonableness.

Canakaris , 382 So. 2d at 1203

36. Whether the standard is called “arbitrary or

capricious” or “abuse of discretion,” the scope of review, which

demands maximum deference, is the same. Clearly, then, th e

narrow “arbitrary or capricious” standard of review cannot

properly be applied in evaluating all agency actions that might

be challenged in a bid protest; rather, this highly deferential

standard appropriately applies only to those decisions which are

co mmitted to the agency’s discretion.

37. Therefore, where the protester objects to agency

action that entails the exercise of discretion, but only in such

instances, the objection cannot be sustained unless the agency

abused its discretion, i.e. acted ar bitrarily or capriciously.

3. The Contrary to Competition Standard

38. The third standard of review articulated in Section

120.57(3)(f) is unique to bid protests. The “contrary to

competition” test is a catch - all which applies to agency actions

that d o not turn on the interpretation of a statue or rule, do

not involve the exercise of discretion, and do not depend upon

(or amount to) a determination of ultimate fact.

39. Although the contrary to competition standard, being

unique to bid protests, is le ss well defined than the other

review standards, the undersigned concludes that the set of

proscribed actions should include, at a minimum, those which:

(a) create the appearance of and opportunity for favoritism; (b)

erode public confidence that contract s are awarded equitably and

economically; (c) cause the procurement process to be genuinely

unfair or unreasonably exclusive; or (d) are unethical,

dishonest, illegal, or fraudulent.

VIII. The Responsiveness of Constructware’s Proposal

40. As its prim ary protest grounds, E - Builder contends

that Constructware’s response deviated materially in at least

six respects from the project specifications as set forth in the

RFP, and that, therefore, the Board breached the applicable

standard of conduct by evalua ting, rather than rejecting,

Constructware’s allegedly nonconforming proposal. Four of the

seven specific protest grounds are based on Constructware’s

alleged failure to comply strictly with the scope of work

requirements set forth in Section VI of the RF P. E - Builder

further alleges that Constructware’s proposal deviated in two

material instances from the provisions of Section VII of the

RFP, which specifies the submittal requirements. These alleged

irregularities will be addressed below.

A. Scope of Wo rk

41. E - Builder’s contentions regarding Constructware’s

alleged noncompliance with various parts of Section VI are all

premised on the idea that the specifications contained therein

were mandatory requirements. If instead the provisions of

Section VI w ere merely precatory or directory, however, then E -

Builder’s position would be untenable, as its counsel all but

conceded at final hearing. To prevail on its protest grounds

relating to the scope of work, E - Builder must demonstrate that

Section VI unambig uously imposed mandatory requirements, which

is a question of law. 7 See Travelers Indem. Co. of Illinois v.

Hutson , 847 So. 2d 1113, 1114 (Fla. 1st DCA 2003)(“Whether

ambiguity exists in a contract is . . . a question of law.”);

accord Specialty Restauran ts Corp. v. City of Miami , 501 So. 2d

101, 103 (Fla. 3d DCA 1987).

42. E - Builder argues that the word “shall” in the sentence

that introduces the scope of work specifications is

determinative. The introductory sentence reads:

The proposer(s) shall provid e [the type of]

services [sought under this RFP] which

should include but not be limited to, the

following [particular services, products,

and benefits, as described below].

(Emphasis added). E - Builder interprets this sentence to mean,

effectively, that the proposer(s) shall provide services

including but not limited to the services specifically mentioned

in Section VI. 8 E - Builder thus plays down the distinction, which

this sentence draws, between (a) the relevant category of

services and (b) the constit uent services —— that is, the many

discrete services, products, and benefits that might constitute

categorical services, where the relevant category of services is

defined as “Internet[ - based] collaborative construction and

claims reduction support services for use in connection with the

[Board]’s capital construction program.”

43. The undersigned, however, considers the distinction

just mentioned to be crucial to the meaning of the sentence in

question. It is clear to the undersigned that the drafters o f

the RFP intended, first , to reiterate (perhaps redundantly) that

the successful proposer should provide 9 a category of services

labeled “Internet[ - based] collaborative construction and claims

reductions support services” and, next , to describe specific

s ervices putatively falling within that category that the Board

believed —— but was not necessarily convinced —— would meet its

needs.

44. To explain further, as the undersigned reads the

sentence, the mandate of “shall” stops at the relative clause

beginnin g with “which” —— and hence embraces only the category of

services sought. In the relative clause, which modifies the

referenced category of services by introducing a nonexclusive

list of particular services that the Board perceived as being

within such cat egory, the word “should” was intended, through

its unmistakable contrast with “shall,” to soften the latter’s

mandatory connotation and convey instead advisability or

suitability. 10 Put simply, the relative clause is directory

rather than mandatory; it con notes strong desire, not decisive

command. 11

45. Accordingly, it is concluded, contrary to E - Builder’s

argument, that Section VI did not unambiguously mandate the

inclusion of all the listed items. Rather, Section VI

unambiguously advised prospectiv e proposers that including the

enumerated items would be prudent —— while letting them know that

alternative solutions had not been ruled out.

46. Moreover, the undersigned concludes that even if the

above interpretation (which accords with the Board’s) we re not

the only reasonable one, it is at least a reasonable

interpretation, and therefore, in any event, the first sentence

of Section VI is ambiguous. Thus, the Board’s interpretation,

if not correct, at a minimum is not clearly erroneous and hence

shoul d be upheld in this proceeding.

47. Finally, because Constructware’s proposal addressed

all of the items listed in Section VI, though arguably without

strictly conforming to each and every one, 12 the undersigned

concludes that the Board’s decision to ev aluate Constructware’s

proposal rather than rejecting it as nonresponsive, which

decision was taken in accordance with a permissible

interpretation of Section VI, was not clearly erroneous and will

not be disturbed. 13

B. Submittal Requirements

48. E - Buil der charges that Constructware’s proposal failed

to comply with Subsections A, E, and F of Section VII of the

RFP. These provisions —— together with Constructware’s particular

responses —— are set forth above in the Findings of Fact.

49. The parties have not advanced competing

interpretations of the relevant language of Section VII. The

undersigned concludes that the provisions in question are

reasonably clear and unambiguous, making parsing unnecessary.

The dispositive question, therefore, is whether th e Evaluation

Committee’s ultimate factual determination that Constructware’s

proposal materially conformed to Section VII of the RFP is

clearly erroneous.

50. In comparing Constructware’s proposal to the RFP

provisions at issue, the undersigned is not le ft with a definite

and firm conviction that the Evaluation Committee made a mistake

when it deemed Constructware’s proposal to be in material

compliance with Section VII. Thus, the undersigned cannot

conclude that the Evaluation Committee’s decision, when measured

against the applicable standard of review, is clearly erroneous.

C. Other Factors

51. E - Builder alleges that the Board violated a governing

statute, namely Section 287.057(2)(a), because, first, the RFP

did not require the proposers to state “ the price for each year

the contract may be renewed” and, second, the Evaluation

Committee failed to consider “the total cost for each year as

submitted by the vendor[s].” See § 287.057(2)(a), F LA . S TAT .

52. E - Builder’s argument must be rejected because Section

287.057(2)(a), which is located in Part I of Chapter 287,

Florida Statutes, does not apply to constitutional entities such

as school boards. See Dunbar Elec. Supply, Inc. v. School Bd.

of Dade County , 690 So. 2d 1339, 1340 (Fla. 3d DCA 1997). Thi s

limitation on the chapter’s reach stems from the definition of

the term “agency” as set forth in Section 287.012(1), 14 which

operates to draw into Chapter 287, Part I, only the executive

branch of state government. Id. 15

53. Because Section 287.057(2)( a) is not a statute that

governs the Board, the Board was not required to comply with it

in order to meet the standard of conduct prescribed in Section

120.57(3)(f). 16 No further analysis is necessary to conclude

that these protest grounds are without meri t.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Board enter a Final Order

declaring E - Builder’s protest to be without substantial merit

and authorizing the award of the subject contract to

Const ructware.

DONE AND ENTERED this 10th day of October , 2003 , in

Tallahassee, Leon County, Florida.

S

___________________________________

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 (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 10th day of October , 2003 .

ENDNOTES

1 / Allegations that were not raised at the final hearing or

argued in E - Builder’ s Proposed Recommended Order have been

rejected as unpersuasive and will not be discussed herein.

2 / Because DOAH is always independent of the letting authority,

see § 120.65(1), Florida Statutes, it might be preferable to

label bid protests before DOAH a form of inter - agency review or,

alternatively, intra - branch review; however, because the letting

authority itself ultimately renders the final order, the first

district’s nomenclature is not incorrect.

3 / The term “standard of proof” as used in § 120.5 7(3)(f)

reasonably may be interpreted to reference standards of review .

This is because, while the “standard of proof” sentence fails to

mention any common standards of proof, it does articulate two

accepted standards of review: (1) the “clearly erroneou s”

standard and (2) the abuse of discretion (= “arbitrary, or

capricious”) standard. (The “contrary to competition”

standard —— whether it be a standard of proof or standard of

review —— is unique to bid protests.)

4 / An ultimate factual determination is a conclusion derived by

reasoning from objective facts; it frequently involves the

application of a legal principle or rule to historical facts:

e.g. the driver failed to use reasonable care under the

circumstances and therefore was negligent; and it may be infused

with policy considerations. Reaching an ultimate factual

finding requires that judgment calls be made which are unlike

those that attend the pure fact finding functions of weighing

evidence and choosing between conflicting but permissible view s

of reality.

5 / From the general principle of deference follows the more

specific rule that an agency’s interpretation need not be the

sole possible interpretation or even the most desirable one; it

need only be within the range of permissible interpret ations.

State Bd. of Optometry v. Florida Soc. of Ophthalmology , 538 So.

2d 878, 885 (Fla. 1st DCA 1988); see also Suddath Van Lines,

Inc. v. State Dept. of Environmental Protection , 668 So. 2d 209,

212 (Fla. 1st DCA 1996). However, “[t]he deference grant ed an

agency’s interpretation is not absolute.” Department of Natural

Resources v. Wingfield Development Co. , 581 So. 2d 193, 197

(Fla. 1st DCA 1991). Obviously, an agency cannot implement any

conceivable construction of a statute or rule no matter how

s trained, stilted, or fanciful it might be. Id. Rather, "only

a permissible construction” will be upheld by the courts.

Florida Soc. of Ophthalmology , 538 So. 2d at 885. Accordingly,

“[w]hen the agency's construction clearly contradicts the

unambiguous language of the rule, the construction is clearly

erroneous and cannot stand.” Woodley v. Department of Health

and Rehabilitative Services , 505 So. 2d 676, 678 (Fla. 1st DCA

1987); see also Legal Environmental Assistance Foundation v.

Board of County Com’ rs of Brevard County , 642 So. 2d 1081, 1083 -

84 (Fla. 1994)(“unreasonable interpretation” will not be

sustained).

6 / The same standard of review also applies, in a protest

following the announcement of an intended award, with regard to

preliminary agency action taken upon the agency’s interpretation

of the project specifications —— but perhaps for a reason other

than deference to agency expertise. Section 120.57(3)(b),

Florida Statutes, provides a remedy for badly - written or

ambiguous specifications: they may be protested within 72 hours

after the posting of the specifications. The failure to avail

oneself of this remedy effects a waiver of the right to complain

about the specifications per se. Consequently, if the dispute

in a protest challenging a propo sed award turns on the

interpretation of an ambiguous, vague, or unreasonable

specification, which could have been corrected or clarified

prior to acceptance of the bids or proposals had a timely

specifications protest been brought, and if the agency has a cted

thereafter in accordance with a permissible interpretation of

the specification ( i.e. one that is not clearly erroneous), then

the agency’s intended action should be upheld —— not necessarily

out of deference to agency expertise, but as a result of the

protester’s waiver of the right to seek relief based on a faulty

specification. If, however, the agency has acted contrary to

the plain language of a lawful specification, then its action

should probably be corrected, for in that event the preliminary

age ncy action likely would be clearly erroneous or contrary to

competition; in that situation, there should be no waiver,

because a reasonable person would not protest an unambiguous

specification that facially conforms to Florida procurement law.

7 / If Sec tion VI were found to be ambiguous as a matter of law,

then the Board’s preliminary action would be upheld, provided

the Board acted in accordance with a permissible interpretation

of the specifications at issue. See endnote 6, supra , and

accompanying tex t.

8 / If “should” were intended to mean “shall” in the subject

sentence, as E - Builder urges, then Section VI would contain both

a mandate to provide the listed services and a prohibitory

command not to provide only those services. Under E - Builder’s

cons truction, in other words, the successful proposer would be

required to provide the enumerated services —— and then some.

9 / Here, the word “should” is used in its capacity as the past

tense of “shall.” Note, in contrast, that “should” was not used

as the past tense of “shall” in the first sentence of Section

VI.

10 / Because the word “should,” like many words in the English

language, can have different shades of meaning depending on the

context, judicial interpretations of the term “should” as used

in othe r situations are of relatively limited value. Indeed,

although the parties have found some cases in which “should” was

given a mandatory connotation, and others wherein “should” was

deemed directory or permissive, none is on point. Compare

United States v. Anderson , 798 F.2d 919, 923 - 24 (7th Cir.

1986)(holding that, where the relevant ethical canon provides

that a judge “should not” engage in ex parte communications,

jury properly may be instructed that the Code of Judicial

Conduct requires the presence o f both sides in judicial

proceedings because the word “should” is commonly interpreted to

mean “shall”), with State of Florida v. Thomas , 528 So. 2d 1274,

1275 - 76 (Fla. 3d DCA 1988)(procedural rule specifying that

“statutory maximum sentence should be impo sed” in a particular

situation left room for exercise of judicial discretion because,

read in context, the term “should” was directory rather than

mandatory). In this case, in arriving at what is considered to

be the plain and natural meaning of Section V I, the undersigned

has relied less on previous appellate decisions than on common

sense and a practical understanding of modern usage.

11 / The undersigned views the relative clause, in this context,

as being somewhat stronger than precatory; the word “sho uld”

here, it seems, is not so much expressing a wish as forcefully

instructing would - be proposers that the enumerated items had

better be included —— or equivalent or superior services offered

in their stead. Thus, while the relative clause was not meant

t o be mandatory, the Evaluation Committee nevertheless was

justified in rejecting one of the proposals as inadequate for

failing to include a sufficient number of the enumerated items

without offering acceptable alternative solutions.

12 / As used in the ac companying text, the words “arguably” and

“strictly” should be emphasized, for the undersigned is not

persuaded that Constructware’s proposal was materially deficient

even if Section VI were construed to impose mandatory

requirements. Although it is not n ecessary to explore this

subject in detail, the undersigned believes that Constructware’s

proposal is in substantial compliance, at least, with Section

VI, and he would be hard - pressed to declare that any of the

alleged deviations were material deviations. In this regard,

the undersigned is mindful that while “a bid containing a

material variance is unacceptable, not every deviation from the

invitation to bid is material. [A deviation] is material if it

gives the bidder a substantial advantage over the ot her bidders

and thereby restricts or stifles competition.” Tropabest Foods,

Inc. v. State Dept. of General Services , 493 So. 2d 50, 52 (Fla.

1st DCA 1986). “The test for measuring whether a deviation in a

bid is sufficiently material to destroy its compe titive

character is whether the variation affects the amount of the bid

by giving the bidder an advantage or benefit not enjoyed by

other bidders.” Harry Pepper & Associates, Inc. v. City of Cape

Coral , 352 So. 2d 1190, 1193 (Fla. 2d DCA 1977).

13 / The B oard’s decision that Constructware’s proposal

materially complied with Section VI was an ultimate factual

determination and therefore is entitled to some deference in

this proceeding. See endnote 4, supra , and accompanying text.

14 / § 287.012(1) provides that:

“Agency" means any of the various state

officers, departments, boards, commissions,

divisions, bureaus, and councils and any

other unit of organization, however

designated, of the executive branch of state

government. “Agency” does not include the

university and college boards of trustees or

the state universities and colleges.

15 / As the court noted in Dunbar , there is one exception to this

general statement regarding the chapter’s scope. The

Consultants’ Competitive Negotiation Act, which is c odified in §

287.055, employs a special definition of “agency” that

specifically includes school boards. See §

287.055(2)(b)(“‘Agency’ means the state, a state agency, a

municipality, a political subdivision, a school district, or a

school board.”). As a result, school boards must comply with §

287.055 when they purchase “professional services” as defined in

§ 287.055(2)(a). In this case, however, the Board is not

seeking to acquire “professional services” within the meaning of

§ 287.055(2)(a). Thus, th e Consultants’ Competitive Negotiation

Act is not presently relevant.

16 / In R. N. Expertise, Inc. v. Miami - Dade County School Board,

et al. , DOAH Case No. 01 - 2663BID, 2002 WL 185217

(Fla.Div.Admin.Hrgs. 2002), the undersigned entered a

Recommended Order, which the Board later adopted in toto,

wherein it was urged that the Board’s preliminary decision to

award a contract for drug screening services be rescinded —— in

part because the award would have been contrary to Section

287.057(2) and other provisions o f Chapter 287, Part I. In that

case, however, the Board did not timely bring the Dunbar

decision to the undersigned’s attention, or otherwise suggest

that the provisions of Chapter 287 not be applied as governing

statutes, as was done here. (Moreover, as it happened, any

error in the application of Chapter 287 in R. N. Expertise was

harmless, because the outcome would have been the same

regardless.) To the limited extent that R. N. Expertise is in

conflict with Dunbar , the undersigned must recede from th e

former in favor of the latter.

COPIES FURNISHED :

Aaron R. Resnick, Esquire

Gunster, Yoakley & Stewart, P.A.

One Biscayne Tower, Suite 3400

2 South Biscayne Boulevard

Miami, Florida 33131

Luis M. Garcia, Esquire

Miami - Dade County Schoo l Board

1450 Northeast 2nd Avenue, Suite 400

Miami, Florida 33132

Mitchell A. Bierman, Esquire

Weiss, Serota, Helfman, Pastoriza

& Guedes, P.A.

2665 South Bayshore Drive, Suite 420

Miami, Florida 33133

Merrett R. Stierheim

Interim Superintenden t

Miami - Dade County School Board

1450 Northeast Second Avenue, No. 912

Miami, Florida 33132 - 1394

Honorable Jim Horne

Commissioner of Education

Turlington Building, Suite 1514

325 West Gaines Street

Tallahassee, Florida 32399 - 0400

Daniel J. Woodring, Ge neral Counsel

Department of Education

Turlington Building, Suite 1244

325 West Gaines Street

Tallahassee, Florida 32399 - 0400

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of th is Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.