03-003672BID Juvenile Services Program, Inc. vs. Department Of Juvenile Justice Status: Closed Recommended Order on Friday, January 16, 2004.

Summary: Failure to make proper deposit at time of filing bid protest requires dismissal of petition. Evidence fails to establish Respondent`s evaluation of proposals was erroneous or unreasonable.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MAD DADS OF GREATER OCALA, )

INC., )

)

Petitioner, )

)

vs. ) Case No. 03 - 36 70BID

)

DEPARTMENT OF JUVENILE JUSTICE, )

)

Respondent, )

)

and )

)

BAY AREA YOUTH SERVICES, INC., )

)

Intervenor. )

_______________________________ )

JUVENILE S ERVICES PROGRAM, )

INC., )

)

Petitioner, )

)

vs. ) Case Nos. 03 - 3671BID

) 03 - 3672BID

DEPARTMENT OF JUVENILE JUSTICE, ) 03 - 3673BID

)

Respondent, )

)

and )

)

BAY AREA YOUTH SERVICES, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

On November 13, 2003, an administrative hearing in this

cause was held in Tallahassee, Florida, before William F.

Quattlebaum, Administrative Law J udge, Division of

Administrative Hearings. Immediately prior to the hearing, the

Petitioner in Case No. 03 - 3670BID withdrew its challenge to the

award of the bid and made no appearance at the hearing.

Appearances in Case Nos. 03 - 3671BID, 03 - 3672BID, and 03 - 3673BID

are as follows:

APPEARANCES

For Petitioner: Andrea V. Nelson, Esquire

The Nelson Law Firm, P.A.

Post Office Box 6677

Tallahassee, Florida 32314

For Respondent: Brian Berkowitz, Esquire

Kimberly Sisko Ward, Esquire

Department of Juvenile Justice

Knight Building, Room 312V

2737 Centerview Drive

Tallahassee, Florida 32399 - 3100

For Intervenor: James M. Barclay, Esquire

Ruden, McClosky, Smith, Schuster

& Russell, P.A.

215 South Monroe Street, Suite 815

Tallahassee, Florida 32301

STATEMENT OF THE ISSUE

The issue in these cases is whether the Department of

Juvenile Justice's (Department) proposed award of certain

contracts to Bay Area Youth Services, Inc. (BAYS), based on

evaluations of proposals submitted in response to a Request for

Proposals is clearly erroneous, contrary to com petition,

arbitrary, or capricious.

PRELIMINARY STATEMENT

The Department seeks to contract with providers of

Intensive Delinquency Diversion Services (IDDS) in twenty

judicial circuits. On September 8, 2003, Juvenile Services

Program, Inc. (JSP), filed Petitions for Formal Hearings

challenging the proposed award of contracts in Circuits 5, 6,

and 20. The Petitions were forwarded to the Division of

Administrative Hearings, which consolidated the cases, and

scheduled and noticed the proceeding. BAYS fil ed a Petition to

Intervene in the consolidated cases that was granted without

opposition.

Immediately prior to the hearing, the Petitioner in Case

No. 03 - 3670BID withdrew the bid protest and made no appearance

at the hearing.

On November 12, 2003, BAYS filed a Motion to Dismiss

asserting that the cases should be dismissed based on the

alleged failure of JSP to timely post a bond in the correct

amount. At the commencement of the hearing on November 13,

ruling on the Motion was reserved, and the parties were invited

to respond to the Motion as part of the post - hearing submittals.

As set forth herein, the Motion to Dismiss is granted.

At the hearing, JSP presented the testimony of five

witnesses. BAYS presented the testimony of one witness. Joint

Ex hibits numbered 1, 3 through 6, 8, and 10 through 20 were

admitted into evidence.

The one - volume Transcript of the hearing was filed on

December 3, 2003. By agreement of the parties, the deposition

testimony of six additional witnesses was filed by JSP on

December 9, 2003. The Department, BAYS, and JSP filed Proposed

Recommended Orders on December 12, 2003.

FINDINGS OF FACT

1. On July 2, 2003, the Department issued Request for

Proposal (RFP) No. V6P01 for operation of IDDS programs in

Judicial Circui ts 1 through 20. The Department issued a single

RFP and anticipated entering into 20 separate contracts, one for

each circuit. Each contract was for a three - year period with

the possibility of a renewal for an additional three - year

period.

2. The RFP was prepared based on a "contract initiation

memo" generated within the Department and upon which the scope

of services set forth in the RFP was based. The Department

assigned one contract administrator to handle the procurement

process.

3. An addendum dated July 18, 2003, was issued to the RFP.

As amended by the addendum, the RFP required submission of

information in a tabbed format of three volumes. Volume I was

the technical proposal. Volume II was the financial proposal.

Volume III addressed pas t performance by the vendor. The

addendum also allowed providers to submit some information in

electronic format.

4. The addendum requested, but did not require, that it be

signed and returned with the submission. BAYS did not return a

signed copy of the addendum in its proposal. Failure to sign

and return the addendum was not fatal to the consideration of a

proposal.

5. The RFP set forth only two criteria for which

noncompliance would be deemed "fatal" to a proposal. Failure to

comply with a fata l criterion would have resulted in automatic

elimination of a provider's response; otherwise, all responses

submitted were evaluated.

6. The proposals were opened on July 31, 2003. The

contract administrator and staff reviewed the bids to ascertain

whe ther required items were included, and noted the proposed

costs on bid tabulation sheets.

7. The first fatal criterion was failing to submit a

properly executed "Attachment A" form to a submission.

Attachment A is a bidder acknowledgment form. Both BAYS and JSP

included a completed Attachment A in the responses at issue in

this proceeding.

8. The second fatal criterion was exceeding the Maximum

Contract Dollar Amount. RFP Attachment B, Section XIII,

provides in relevant part as follows:

The Maximum Co ntract Dollar Amount will be

the Annual Maximum Contract Dollar Amount

multiplied by the number of years in the

initial term of the Contract . . . .

EXCEEDING THE ANNUAL MAXIMUM CONTRACT DOLLAR

AMOUNT IS A FATAL CRITERION. ANY PROPOSAL

WITH A COST EXCEED ING THE ANNUAL MAXIMUM

CONTRACT DOLLAR AMOUNT WILL BE REJECTED.

9. The information reviewed as to each provider's cost

proposal was set forth in Volume II, Tab 1, which included RFP

Attachment J. RFP Attachment J is a cost sheet where providers

were r equired to set forth proposal costs identified as the

"Maximum Payment" under their proposal.

10. Attachment K to the RFP identifies the counties served

in each circuit, number of available slots in each circuit, and

the Annual Maximum Contract Dollar A mount for each circuit. JSP

appears to have simply copied information from Attachment K onto

Attachment J.

11. The Department's contract administrator was the sole

person assigned to review Volume II of the responses. Volume II

included the cost propo sal, the supplier evaluation report

(SER), and the certified minority business enterprise (CMBE)

subcontracting utilization plan.

12. Neither BAYS nor JSP exceeded the Annual Maximum

Contract Dollar Amount applicable to any circuit at issue in

this proce eding. Both BAYS and JSP identified a Maximum Payment

equal to the Annual Maximum Contract Dollar Amount as their

proposal cost. Both BAYS and JSP received scores of 100 points

for cost proposals in all responses at issue in this proceeding.

13. JSP ass erts that the instructions as to identification

of the Annual Maximum Contract Dollar Amount were confusing and

that its actual cost proposal was less than that set forth as

the "Maximum Payment" on Attachment J.

14. JSP asserts that it actually listed its cost proposal

at the section identified on Attachment J as "renewal term

dollar amount proposed." JSP asserts that the Department should

have reviewed supporting budget information set forth in

Attachment H to the RFP to determine JSP's cost proposal, and

that the Department should have determined that JSP's actual

cost proposal was less than that of BAYS.

15. The Department did not review the budget information

in Attachment H, but based its cost evaluation of the proposals

on the total figures set forth on Attachment J. Nothing in the

RFP suggests that underlying information as to cost proposals

would be reviewed or evaluated. The evidence fails to establish

that the Department's reliance on the information set forth on

Attachment J was unreasona ble or erroneous. The evidence fails

to establish that the Department's scoring of the cost proposals

was contrary to the RFP. The evidence fails to establish that

JSP is entitled to have its cost proposal re - scored.

16. One of the requirements of the R FP was submission of a

"Supplier Evaluation Report" (SER) from Dunn & Bradstreet. The

submission of the SER was worth 90 points. Dunn & Bradstreet

transmitted most of the SERs directly to the Department, and the

Department properly credited the providers for whom such reports

were transmitted.

17. The Department's contract administrator failed to

examine BAYS submission for the SER, and BAYS did not receive

credit for the SER included within its proposal. The failure to

credit BAYS for the SERs was cl early erroneous. BAYS is

entitled to additional credit as set forth herein.

18. The RFP sought utilization of a CMBE in a provider's

proposal. BAYS proposal included utilization of The Nelco

Company, an employee leasing operation. The Nelco Company i s a

properly credentialed CMBE.

19. Under the BAYS/Nelco arrangement, BAYS would retain

responsibility for identification and recruitment of potential

employees. BAYS performs the background screening and makes

final employment decisions. BAYS retains t he right to fire,

transfer, and demote employees. The Nelco Company would process

payroll and handle other fiscal human resource tasks including

insurance matters. The Nelco Company invoices BAYS on a per

payroll basis, and BAYS pays based on the Nelco i nvoice.

20. JSP asserts that under the facts of this case, the

participation of The Nelco Company fails to comply with the

RFP's requirement for CMBE utilization. BAYS proposals also

included utilization of other CMBEs. There is no credible

evidence tha t BAYS utilization of The Nelco Company or of the

other CMBEs included within the BAYS proposals fails to comply

with the RFP's requirement for CMBE utilization.

21. The Department assigned the responsibility for service

proposal evaluation to employees located within each circuit.

The contract administrator and staff distributed appropriate

portions of Volume I of each proposal to the evaluators.

22. The evidence establishes that the evaluators received

the documents and evaluated the materials purs uant to written

scoring instructions received from the Department. Some

reviewers had more experience than others, but there is no

evidence that a lack of experience resulted in an inappropriate

review being performed.

23. In two cases, the evaluators worked apart from one

another. In one circuit, the evaluators processed the materials

in the same room, but did not discuss their reviews with each

other at any time. There is no evidence that evaluators were

directed to reach any specific result in the evaluative process.

24. JSP asserts that there was bias on the part of one

evaluator who had knowledge of some unidentified incident

related to JSP. The evidence fails to establish the facts of

the incident and fails to establish that the incident, whate ver

it was, played any role in the evaluator's review of the JSP

proposal. JSP also asserts that another evaluator had contact

with JSP at some point prior to his evaluation of the RFP

responses. There is no evidence that the contact was negative

or was a factor either for or against JSP in the evaluation of

the RFP responses.

25. The RFP required that each provider's proposal include

letters of intent from "local service resources" indicating a

willingness to work with the provider and a letter of sup port

from the State Attorney in the judicial circuit where the

provider's program would operate.

26. The RFP indicates that Volume I of a provider's

response should contain five tabbed sections. The RFP provides

that "information submitted in variance with these instructions

may not be reviewed or evaluated." The RFP further provides

that failure to provide information "shall result in no points

being awarded for that element of the evaluation."

27. JSP included letters of support in Tab 5 of Volume I .

BAYS included letters of support in a tabbed section identified

as Tab 6 of Volume I.

28. JSP asserts that information included in Tab 6 of BAYS

proposals should not have been evaluated and that no points

should have been awarded based on the informa tion included

therein. The evidence fails to support the assertion. Based on

the language of the RFP, submission of information in a format

other than that prescribed is not fatal to a proposal. The

Department reserved the authority to waive such defect s and to

evaluate the material. Here, the Department waived the variance

as the RFP permitted, and reviewed the material submitted by

BAYS.

29. JSP asserts that BAYS proposal breached client

confidentiality by inclusion of information regarding an

indi vidual who has allegedly received services through BAYS.

Records regarding assessment or treatment of juveniles through

the Department are deemed confidential pursuant Section 985.04,

Florida Statutes (2003). The evidence fails to establish that

an alleg ed violation of Section 985.04, Florida Statutes (2003),

requires rejection of the BAYS proposals. There is no evidence

that the information was released outside of the Department

prior to the bid protest forming the basis of this proceeding.

30. The e vidence establishes that JSP misidentified the

name of its contract manager in its transmittal letter. The

evidence establishes that the misidentification was deemed

immaterial to the Department, which went on to evaluate the JSP

proposals.

31. The r esults of the evaluations were returned to the

contract administrator, who tabulated and posted the results of

the process. On August 25, 2003, the Department posted a Notice

of Intent to Award contacts based on the proposals submitted in

response to the RFP.

32. Insofar as is relevant to this proceeding, the

Department proposed to award the contracts for Circuits 5, 6,

and 20 to BAYS.

33. The Department received four proposals from IDDS

program providers in Circuit 5 (DOAH Case No. 03 - 3671BID).

Accordi ng to the Notice of Intended Contract Award, BAYS was the

highest ranked bidder with 651.8 points. JSP was the second

highest bidder with 642.6 points. White Foundation was the

third highest bidder at 630.7 points, and MAD DADS was the

fourth bidder at 4 42.8 points.

34. The evidence establishes that BAYS included its SER in

its Circuit 5 proposal. The Department neglected to examine

BAYS submission for the SER, and BAYS did not receive credit for

its SER. BAYS should have received an additional 90 poin ts,

bringing its total points to 741.8.

35. The Department received two proposals from IDDS

program providers in Circuit 6 (DOAH Case No. 03 - 3672BID).

According to the Notice of Intended Contract Award, BAYS was the

highest ranked bidder with 649.0 poi nts. JSP was the second

highest bidder with 648.8 points.

36. The evidence establishes that BAYS included its SER in

its Circuit 6 proposal. The Department neglected to examine

BAYS submission for the SER, and BAYS did not receive credit for

its SER. BAYS should have received an additional 90 points,

bringing its total points to 739.0.

37. The Department received two proposals from IDDS

program providers in Circuit 20 (DOAH Case No. 03 - 3673BID).

According to the Notice of Intended Contract Award, BAYS was the

highest ranked bidder with 644.2 points. JSP was the second

highest bidder with 620.6 points.

38. The evidence establishes that BAYS included its SER in

its Circuit 20 proposal. The Department neglected to examine

BAYS submission for the SER, and BAYS did not receive credit for

its SER. BAYS should have received an additional 90 points,

bringing its total points to 734.2.

MOTION TO DISMISS

39. BAYS asserts that the Petitions for Hearing filed by

JSP must be dismissed for failure to com ply with Section

287.042(2)(c), Florida Statutes (2003), which requires that a

protesting bidder post a bond or cash in an amount equal to one

percent of the estimated contract amount by the time a formal

written bid protest is filed.

40. Item 8 of th e RFP indicated that the bond or cash

amount required was one percent of the total contract amount or

$5,000, whichever was less. However, RFP Attachment "B,"

Section IX, indicates that it replaces RFP Item 8, and provides

that the required bond or cash a mount is one percent of the

estimated contract amount.

41. Pursuant to Section 120.57(3)(b), Florida Statutes

(2003), JSP had 72 hours from the announcement of the bid award

to file a Notice of Protest and an additional ten days to file a

Formal Written Protest. The notice of intended bid award was

posted on August 25, 2003. Accordingly, the written protest and

appropriate deposits were due by September 8, 2003.

42. The Department's Notice of Intended Award referenced

the bond requirement and stated that failure to post the bond

would constitute a waiver of proceedings.

43. On September 8, 2003, JSP provided to the Department a

cashier's check for $2,159.70 in relation to its protest of the

award for Circuit 5. The contract amount was $647,910. One

percent of the contract amount is $6,479.10.

44. On September 8, 2003, JSP provided to the Department a

cashier's check for $3,414.52 in relation to its protest of the

award for Circuit 6. The contract amount was $1,025,857.50.

One percent of the contract amount is $10,258.57.

45. On September 8, 2003, JSP provided to the Department a

cashier's check for $2,231.69 in relation to its protest of the

award for Circuit 20. The contract amount was $669,507. One

percent of the contract amount is $6,69 5.07.

46. In response to JSP's insufficient cashier's checks,

the Department, by letter of September 12, 2003, advised JSP of

the underpayment and permitted JSP an additional ten days to

provide additional funds sufficient to meet the requirements of

the statute. JSP, apparently still relying on the superceded

language in the RFP, forwarded only an amount sufficient to

bring the deposited funds to $5,000 in each case.

47. By letter dated September 25, 2003, the Department

again advised JSP that the depos ited funds were insufficient and

provided yet another opportunity to JSP to deposit additional

funds. On September 29, 2003, JSP forwarded additional funds to

provide the appropriate deposits.

CONCLUSIONS OF LAW

48. The Division of Administrative Heari ngs has

jurisdiction over the parties to and subject matter of this

proceeding. §§ 120.57(1) and 120.57(3), Fla. Stat. (2003).

49. Section 120.57(3)(f), Florida Statutes (2003),

provides as follows:

In a protest to an invitation to bid or

request for pr oposals procurement, no

submissions made after the bid or proposal

opening which amend or supplement the bid or

proposal shall be considered. In a protest

to an invitation to negotiate procurement,

no submissions made after the agency

announces its intent to award a contract,

reject all replies, or withdraw the

solicitation which amend or supplement the

reply shall be considered. Unless otherwise

provided by statute, the burden of proof

shall rest with the party protesting the

proposed agency action . In a competitive -

procurement protest, other than a rejection

of all bids, proposals, or replies, 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 solicitation

specifications. The standard of proof for

such proceedings shall be whether the

proposed agency action was clearly

erroneous, contrary to competition,

arbitrary, or capricious. In any bid -

protest procee ding contesting an intended

agency action to reject all bids, proposals,

or replies, the standard of review by an

administrative law judge shall be whether

the agency's intended action is illegal,

arbitrary, dishonest, or fraudulent.

50. Otherwise stated , the Petitioner has the burden of

establishing that the Department's proposed action was clearly

erroneous, contrary to competition, arbitrary, or capricious.

§ 120.57(3)(f), Fla. Stat. (2003). In this case, the burden has

not been met.

51. The evide nce fails to establish that BAYS' failure to

include a signed copy of the RFP addendum in its proposal should

have resulted in a rejection of the BAYS submission. Inclusion

of a signed copy was not required by the RFP or by the addendum.

52. The eviden ce fails to establish that the Department's

reliance on the "maximum payment" information set forth on JSP's

cost sheet was inappropriate. There is no requirement that the

Department examine supporting documentation to determine whether

a provider has cor rectly set forth its own cost proposal. JSP

clearly identified a "maximum payment," and the Department

properly relied on the information in scoring JSP's cost

proposal.

53. There is no credible evidence that the CMBE proposal

submitted by BAYS fails t o comply with the requirements of the

RFP or is otherwise inappropriate.

54. There is no credible evidence that the evaluations

performed by the Department employees were improper or biased in

any manner. The Department employees were aware of the RFP

requirements, were aware of the scoring procedure, and performed

their evaluations appropriately. The evidence fails to

establish that is was a substantial error for the evaluators to

consider the information set forth in Volume I, Tab 6, of BAYS

proposal .

55. The evidence establishes that the Department failed to

consider the SERs submitted by BAYS in its proposals. Such

failure was clearly erroneous; BAYS is entitled to an award of

additional points as set forth herein.

MOTION TO DISMISS

56. As to the Motion to Dismiss filed by BAYS, Section

287.042(2)(c), Florida Statutes (2003), clearly provides that a

deposit of one percent of the total contract amount is required

by the date upon which the formal written protest is due.

57. Florida Adminis trative Code Rule 28 - 110.005(3)

provides as follows:

When a bond is required, a notice of

decision or intended decision shall contain

this statement: "Failure to file a protest

within the time prescribed in Section

120.57(3), Florida Statutes, or failure to

post the bond or other security required by

law within the time allowed for filing a

bond shall constitute a waiver of

proceedings under Chapter 120, Florida

Statutes." If the notice advises of the

bond requirement but a bond or statutorily

authorized alternate is not posted when

required, the agency shall summarily dismiss

the petition. (Emphasis supplied)

58. The notice of intended award clearly referenced the

deposit requirement.

59. In the Department's letters to JSP extending the

deadline fo r filing the deposit, the Department cites no legal

authority supporting the extension. In the Proposed Recommended

Order filed by the Department in this case, the Department

acknowledges that there is no authority to waive or delay the

bond requirement a nd further acknowledges that JSP's petitions

for hearing should have been dismissed. The Department has no

legal authority to waive or delay the posting of a proper bond

or cash amount. The cited Rule requires that the Department

dismiss the cases. The Motion to Dismiss filed by BAYS is

granted.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Department of Juvenile Justice enter a

Final Order as follows:

1. Dismissing the Petition for Hearing filed by MAD DADS of

Greater Ocala, Inc., in Case No. 03 - 3670BID based on the

withdrawal of the Petition for Hearing.

2. Dismissing the Petitions for Hearing filed by JSP for

failure to comply with Section 287.042(2)(c), Florida Statutes

(2003), and for the other reasons set forth herein.

DONE AND ENTERED this 16th day of January, 2004, in

Tallahassee, Leon County, Florida.

S

WILLIAM F. QUATTLEBAUM

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 16th day of January, 2004.

COPIES FURN ISHED :

James M. Barclay, Esquire

Ruden, McClosky, Smith, Schuster

& Russell, P.A.

215 South Monroe Street, Suite 815

Tallahassee, Florida 32301

Brian Berkowitz, Esquire

Kimberly Sisko Ward, Esquire

Department of Juvenile Justice

Knight Building, Room 312V

2737 Centerview Drive

Tallahassee, Florida 32399 - 3100

Larry K. Brown, Executive Director

MAD DADS of Greater Ocala, Inc.

210 Northwest 12th Avenue

Post Office Box 3704

Ocala, Florida 34478 - 3704

Andrea V. Nelson, Esquire

The Nelson Law Firm, P.A.

P ost Office Box 6677

Tallahassee, Florida 32314

William G. Bankhead, Secretary

Department of Juvenile Justice

Knight Building

2737 Centerview Drive

Tallahassee, Florida 32399 - 3100

Robert N. Sechen, General Counsel

Department of Juvenile Justice

Knight B uilding

2737 Centerview Drive

Tallahassee, Florida 32399 - 3100

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

10 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.