05-000007BID Compass Environmental, Inc., And Shaw Environmental, Inc. vs. Department Of Environmental Protection Status: Closed Recommended Order on Monday, March 21, 2005.

Summary: Where a member of an agency evaluation team had a professional relationship with the highest-ranked vendor and its subcontractor, an appearance of impropriety arose. Therefore, the award of contract to the highest-ranked vendor was inappropriate.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

COMPASS ENVIRONMENTAL, INC., )

and SHAW ENVIRONMENTAL, INC., )

)

Petitioners, )

)

vs. )

) Case Nos. 05 - 0007BID

DEPARTMENT OF ENVIRONMENTAL ) 05 - 0008BID

PROTECTION, )

)

Respondent, )

)

and )

)

CDM CONSTRUCTORS, INC., )

)

Intervenor. )

_____________________________ )

RECOMMENDED ORDER

This matter was heard before the Division of

Administrative Hearings by its assigned Administrative Law

Judge, Donald R. Alexander, on February 2, 3, 4, and 7, 2005, in

Tallahassee, Florida.

APPEARANCES

For Petitioner: J. Andrew Bertron, Jr., Esquire

(Compass) Amy W. Schrader, Esquire

H uey, Guilday, Tucker, Schwartz

& Williams, P.A.

Post Office Box 12500

Tallahassee, Florida 32317 - 2500

For Petitioner: Seann M. Frazier, Esquire

(Shaw) John K. Lond ot, Esquire

Greenberg Traurig, P.A.

Post Office Box 1838

Tallahassee, Florida 32302 - 1838

Dorn C. McGrath, III, Esquire

Greenberg Traurig, P.A.

1750 Tysons Boulevard, Suite 1200

McLean, Virginia 22102 - 4208

For Respondent: Thomas M. Beason, Esquire

Marshall G. Wiseheart, Esquire

Francine M. Ffolkes, Esquire

Brian J. Cross, Esquire

Department of Environmental Protection

3900 Commonwealth Boulevard

Mail Station 35

Tallahassee, Florida 32399 - 3000

For Intervenor: A. Kenneth Levine, Esquire

Chistopher J. Karo, Esquire

Tew Cardenas, LLP

215 South Monroe Street, Suite 702

Tallahassee, Florida 3 2301 - 1839

STATEMENT OF THE ISSUE

The issue is whether the Department of Environmental

Protection's (Department's) proposed award of a contract to

Intervenor, CDM Constructors, Inc. (CDM), is contrary to the

Department's governing statutes, rules or polic ies, or the

solicitation's specifications.

PRELIMINARY STATEMENT

This matter began on December 7, 2004, when the Department

advised all vendors who had filed proposals that it intended to

award a contract for Solicitation Number 2005002C to CDM. The

contr act calls for CDM to assist the Department in the

management and closure of the Piney Point Phosphates

Phosphogypsum Stack System (Piney Point) in Manatee County,

Florida.

On December 9, 2004, Petitioners, Compass Environmental,

Inc. (Compass) and Shaw E nvironmental, Inc. (Shaw), who had also

participated in the solicitation process, gave timely notice

that they intended to file a formal written protest to the

proposed award. Formal written protests were filed by both

Petitioners on December 20, 2004. I n its protest, Compass

contended that the negotiation process was flawed because a

member of the Department's evaluation committee (Dr. Fuliehan)

had an actual or apparent conflict of interest because one of

his consulting firm's clients was a subcontracto r listed in

CDM's proposal. In its protest, Shaw raised the same conflict

of interest issue, and further contended that the proposals of

CDM and Compass were non - responsive, that the evaluations were

not conducted in the "sunshine," as required by Florida law, and

that the scoring of the responses was arbitrary, capricious, and

contrary to competition.

The matter was referred by the Department to the Division

of Administrative Hearings on January 3, 2005, with a request

that an Administrative Law Judge b e assigned to conduct a

hearing. Compass's protest was assigned Case No. 05 - 0007BID,

while Shaw's protest was assigned Case No. 05 - 0008BID. On

January 14, 2005, CDM's Petition to Intervene was granted.

By Notice of Hearing dated January 6, 2005, a fi nal hearing

was scheduled on February 2 and 3, 2005, in Tallahassee,

Florida. Continued hearings were held on February 4 and 7,

2005.

On January 28, 2005, Shaw filed a Petition for Review of

Non - Final Agency Action and Motion to Stay with the First

Distr ict Court of Appeal seeking to stay the Department's

decision to continue contract negotiations with CDM until this

protest is resolved. The Motion to Stay was denied on March 2,

2005; a decision on the merits of the case remains pending. See

Shaw Enviro nmental, Inc. v. State, Department of Environmental

Protection et al. , Case No. 1D05 - 407.

On January 28, 2005, the Department's Motion for Protective

Order was denied in part and Petitioners were allowed to depose

Theresa L. Mussetto, a Department attorn ey serving as the

Department's Ethics Officer, regarding certain ethical issues.

At the outset of the final hearing, the Department's Motion in

Limine and to Strike Portions of Petitioners' Petitions for

Hearing was denied. A ruling on a similar Motion b y CDM filed

the morning of the final hearing was reserved. The Motion is

hereby denied.

On January 31, 2005, the parties consented to the entry of

an Agreed Confidentiality Order, which allowed the parties to

review, under specified conditions, certain d ocuments and other

information that Ardaman & Associates, Inc. (Ardaman), an

outside consulting firm used by the Department, asserted were

confidential and constituted trade secrets. That information is

found in Shaw Exhibit 64 and has been sealed to prot ect its

confidentiality. In addition, during the course of the hearing,

certain confidential information was discussed, and that portion

of the record has been transcribed in a separate volume of the

Transcript and sealed to protect its confidentiality.

A t the final hearing, Compass presented the testimony of

Tom McSweeney, its vice - president; and Charles E. Icenogle, a

consultant. Also, it offered Compass Exhibits 12, 21, 24, 32,

56, and 61, which were received in evidence. Exhibit 56 is the

deposition testimony of William Perpich, an employee of U.S.

Filter, which operates a reverse osmosis system at Piney Point.

Shaw presented the testimony of Gwenn D. Godfrey, Department

Procurement Administrator; Phil Coram, Chief of the Department's

Bureau of Mine Reclamation; Dr. Nadim F. Fuleihan, a consultant;

Earl Black, an attorney at the Department of Revenue; Ivan

Nance, a Project Manager at the Piney Point facility; Bruce

Scott, a Project Manager at the Piney Point facility; James E.

Fendley, Vice - President of Commercial Construction; and Barbara

F. Phillips, a Procurement Analyst at the Department of Revenue.

Also, it offered Shaw Exhibits 21, 54, 61, and 64, which were

received in evidence. Exhibit 54 is the deposition of Theresa

L. Mussetto, a Department attorney. The Department presented

the testimony of Phil Coram, Chief of the Department's Bureau of

Mine Reclamation; Dr. Nadim F. Fuleihan, a consultant and

accepted as an expert; Robert H. Brown, a Senior Environmental

Administrator with Manatee County ; Gwenn D. Godfrey, Department

Procurement Administrator and accepted as an expert; Sam Zamani,

Department Administrator of the Phosphate Management Program;

John Wright, a Department professional engineer; Earl Black, a

Department of Revenue attorney; Bar bara F. Phillips, a

Procurement Analyst at the Department of Revenue; and Jon Alden,

a Department attorney. Also it offered Department Exhibits 1,

2, 4 - 6, 8, 9, 14, 16, 17, 23, 27, and 43. Exhibits 16 and 17

were not admitted while a ruling was reserved on Exhibit 43.

All other exhibits were received. Exhibit 43 is also received

in evidence. CDM presented the testimony of Michael Edgar, a

Client Officer; Dr. Vaughn Astley, a consultant and accepted as

an expert; and Craig A. Kovach, a consultant and ac cepted as an

expert. Also, it offered CDM Exhibit 1, which was received in

evidence. Finally, the parties offered Joint Exhibits 1, 4 - 11,

13, 16, 22, 23, 26 - 28, 34 - 36, 38, 39, and 41, which were

received in evidence.

The Transcript of the hearing (eight volumes) was filed on

February 16, 2005. Proposed Findings of Fact and Conclusions of

Law were filed by the parties on February 28, 2005, and they

have been considered by the undersigned in the preparation of

this Recommended Order.

FINDINGS OF FACT

Bas ed on all of the evidence, the following findings of

fact are made:

a. Background

1. Piney Point is an abandoned fertilizer manufacturing

plant adjacent to Port Manatee in Manatee County. In the

fertilizer manufacturing process, phosphate rock is conver ted

into soluble phosphorus by adding sulfuric acid to the phosphate

rock to produce phosphoric acid. A by - product of this activity

is phosphogypsum. For every ton of phosphoric acid produced,

approximately five tons of phosphogypsum are produced. The

p hosphogypsum is stored in stacks like the ones at Piney Point.

2. Federal and state regulations require that the

phosphogypsum be managed in stack systems. (Stack systems are

large impoundments containing contaminated water that has come

into contact w ith the phosphogypsum.) This is accomplished by

using process water to "slurry" the phosphogypsum to the stacks

where the phosphogypsum settles out.

3. The process water becomes extremely polluted as a

result of the manufacturing activities and is typ ically very

acidic. It contains heavy metals, such as arsenic, cadmium,

chromium, and fluoride, in addition to high levels of nutrients,

nitrogen, and total dissolved solids. It is also slightly

radioactive. The process water is stored in impoundments

s urrounded by the phosphogypsum stacks, in cooling ponds, and in

the seepage ditches around the stacks.

4. The Piney Point site is located south of Tampa,

approximately one mile inland from Bishops Harbor, which is a

portion of Tampa Bay. The site encom passes a total of

approximately six hundred acres. There are two phosphogypsum

stacks located at Piney Point; each of these is divided into two

compartments or ponds. Today, the old gypsum stack rises to a

height of eighty feet. The site previously held around 1.4

billion gallons of process water with 800 million gallons stored

in the various ponds and 600 million gallons stored in the pores

of the gypsum stacks as pore water. The site is currently

estimated to have 500 to 550 million gallons of process water of

which about 350 million gallons is pore water. All of this

water must be treated and removed in order to close and

remediate the site.

5. To close one of these phosphogypsum stack systems, all

of the water must be removed from the ponds. The surface is

allowed to dry and is then graded. A polyethylene liner is

placed over the surface and than a soil cover is placed on top

of the liner. The liner prevents any additional rainfall from

infiltrating into the gypsum stack and creating additional

process water. The pore water underneath the liner is then

allowed to drain from the stack and is collected in seepage

ditches, where the water will ultimately be treated. A thick

layer of grass is grown on the steep slopes of the gypsum stacks

to help prevent infiltration of rainwater back into the stacks.

The ultimate goal is to convert this site into a freshwater

reservoir for the residents of Manatee County.

6. Until early 2001, Piney Point Phosphates, Inc., which

was a subsidiary of Mulberry Pho sphate Company (Mulberry), owned

and operated a fertilizer manufacturing complex at Piney Point.

(Mulberry also operated another fertilizer manufacturing complex

in Mulberry, Florida). In February 2001, Mulberry filed a

petition for protection from credi tors in the United States

Bankruptcy Court in Tampa, Florida. At the same time, Mulberry

notified the Department that it did not have the resources to

maintain the site. (The Department was also advised by Mulberry

that it did not have the resources to m aintain the stack system

at the Mulberry site.)

7. Because there existed the potential for release of the

contaminated waters from Piney Point into Tampa Bay, the

Department immediately assumed financial responsibility for

Piney Point and in May 2001, a state court appointed a Receiver

for Piney Point to take "all reasonable steps and action to

preserve the Property's environmental integrity and its

compliance with environmental regulations." To execute these

duties, the Receiver entered into a contract with the

Department. Pursuant to that contract, it retained the services

of Ardaman, an international engineering consulting firm in

Orlando, Florida, as its engineer of record to design a plan to

close Piney Point and to ensure that the plan was properly

implemented. At about the same time, the Receiver contracted

with IT Corporation, the predecessor to Shaw, to begin some of

the site closure work on an emergency basis. Since that time,

the Department has spent $63 million at Piney Point, with Shaw

rece iving a majority of that amount.

8. Based on the Department’s experience at the Mulberry

site, it believed that it could realize a significant savings to

the State through the Invitation to Negotiate (ITN) process and

the use of a lump sum contract, rathe r than continuing to

contract out the work for Piney Point on a time and materials

basis. Further, the Department's Inspector General had

recommended a lump sum contract as an incentive to the

contractor selected to conduct the closure work.

b. The ITN

9. Under Section 403.4154(3)(a), Florida Statutes (2004), 1

"[t]he department may take action to abate or substantially

reduce any imminent hazard caused by the physical condition,

maintenance, operation, or closure of a phosphogypsum stack

system." Pursu ant to this provision, on July 16, 2004, the

Department issued ITN No. 2005002C (the ITN) entitled "Closure

of the Piney Point Phosphogypsum Stack System." The contract

called for a contractor to provide services at the Piney Point

site in three primary a reas: continued operation and

maintenance of the site; water consumption; and closure of the

phosphogypsum stack system. Water consumption consists of

treating the process water and pore water and removing it from

the site by evaporation, irrigation, dis charge, or other

methods. Closure of the stacks includes draining water from the

stacks, grading the banks, and installing liners, clean soil,

and sod. The contract is estimated to be worth approximately

$51.2 million to the successful vendor. The contr act was

intended to replace the Receiver's existing contract with Shaw,

although Shaw was free to compete for the new contract.

10. A number of individuals were involved with developing

the ITN. First, Gwenn D. Godfrey, who is the Department's

Procuremen t Administrator, assisted with the original ITN.

Also, Phil Coram, who is the Department's Chief of the Bureau of

Mine Reclamation, was heavily involved with the ITN and assumed

a major role on technical issues such as operation and

maintenance as well as water management planning. Although the

Department does not normally use private consultants in the

procurement process, due to the complex technical issues

involved, it retained Ardaman to assist with the procurement

process. Ardaman, who was then serv ing as engineer of record on

the project, does approximately 90 to 95 percent of all work

performed in Florida in the area of phosphogypsum stack systems

and has special expertise in that area. (As noted above,

Ardaman designed the complex closure plan fo r the facility.)

One of its employees, Dr. Nadim Fuleihan, a senior vice

president and principal engineer, has served as the chief

engineer for the Piney Point project since 2001 and has worked

closely with Mr. Coram, who has been the Department's

coordin ator on the project since 2002. According to Mr. Coram,

Dr. Fuleihan "knew more about that site, especially the closure

aspects, . . . than anyone." This observation was undisputed.

For that reason, Dr. Fuleihan was requested to assist in the

procuremen t process.

11. Mr. Coram was asked by Department management to

identify individuals to serve as evaluators for the ITN process.

Besides Dr. Fuleihan, management wanted the evaluators to

consist of Department employees within the Bureau of Mine

Reclamatio n, the Division of Waste Management, the Office of

General Counsel, and representatives from other agencies that

had been involved with Piney Point.

12. The seven ITN evaluators consisted of Mr. Coram;

Dr. Fuleihan; Sam Zamani, Administrator for the Department's

Phosphate Management Program; John Wright, a professional

engineer in the Department's Division of Waste Management; Jon

Alden, a Department attorney who has represented the Department

in the Mulberry bankruptcy case; Robert Brown, a Senior

En vironmental Administrator for Manatee County; and Richard

Eckenrod, Executive Director of the Tampa Bay Estuary Program

(TBEP).

13. Before the evaluation process began, the Department

required all members of the evaluation team to sign a

certification t hat if "at any time during [their] participation

on the contractor selection committee, that a potential conflict

of interest exists," they agreed to notify the Department's

Procurement Section of the circumstances surrounding the

potential conflict of int erest. By doing so, the Department

complied with Section 287.057(20), Florida Statutes, which

requires that if the procurement costs more than $25,000.00,

"the individuals taking part in the development or selection of

criteria for evaluation, the evaluat ion process, and the award

process shall attest in writing that they are independent of,

and have no conflict of interest in, the entities evaluated and

selected." A requirement that the certification form be

executed by each team member is also found in the solicitation

instructions. Significantly, the certification form imposed a

continuing obligation on the evaluators to notify the Department

should any "potential conflict of interest arise."

14. Prior to submitting responses, three potential

vendors, Shaw, Compass, and CDM, contacted Dr. Fuleihan and

asked him to participate on their respective teams in the ITN

process. Dr. Fuleihan declined to work with any of them on an

exclusive basis. Tetra Tech, Inc., which is Ardaman's parent

company, also con sidered preparing a response to the ITN but

Dr. Fuleihan advised it not to do so since Ardaman's status as

engineer of record could raise a conflict of interest.

15. On September 10, 2004, CDM, Compass, Shaw, and Coburn

Construction (Coburn) submitted re plies to the ITN. The

Department subsequently deemed the reply by Coburn to be non -

responsive for its failure to comply with the requirements of

the ITN. Coburn did not challenge this determination. The

other proposals were independently reviewed, score d, and ranked.

The results were given to Mr. Coram, who computed an average

rank for each of the firms. The final average rankings were

very close with Shaw being ranked first, followed by Compass and

CDM, who were tied.

16. After the initial replies we re filed, Mr. Eckenrod

became concerned that he had a potential conflict of interest

with Craig A. Kovach, President of QuietEarth Consultants, Inc.,

which was identified as a CDM subcontractor and team member.

Mr. Kovach's wife served on the TBEP Board o f Directors and had

hiring and firing authority over Mr. Eckenrod. Accordingly,

Mr. Eckenrod emailed the Department's Office of General Counsel

for a determination of whether a conflict existed.

17. Under the Department's Code of Ethics, which is also

known as Administrative Directive DEP 202 (DEP 202),

"[e]mployees should avoid any conduct . . . which might

undermine the public trust, whether that conduct is unethical or

may give the appearance of ethical impropriety." See Compass

Exhibit 32, DEP 202 , paragraph 7.a. In addition, another

document known as DEP 315 establishes Department policy for the

purchase of contractual and professional services. See Compass

Exhibit 61. Paragraph 26 of DEP 315 adopts the standards of

conduct for public officers and employees which are codified in

Section 112.313(3) and (7)(a), Florida Statutes. While not

specifically applicable to Mr. Eckenrod's situation, among other

things, that paragraph prohibits Department employees from

having an "employment or contractual relationship with any

business entity . . . which is . . . doing business with" the

Department.

18. Teresa L. Mussetto, a Department attorney who then

served as a Department Ethics Officer on behalf of the General

Counsel, issued an opinion on September 29, 2004, stating in

part that even though Mr. and Mrs. Kovach had never sought to

influence Mr. Eckenrod, his professional association with a

member of the CDM team "may be perceived as a conflict of

interest," and that if the contract were ultimately awa rded

to CDM, the transaction might "reasonably give rise to the

'appearance of impropriety.'" See Shaw Exhibit 21. Ms.

Mussetto also determined that even though Mr. Eckenrod was not a

Department employee, he acted as an integral part of the

procuremen t team and that DEP 202 was applicable to him. (It

follows that DEP 315 would likewise apply.) Because DEP 202

requires that every aspect of the procurement process be

conducted in a manner which would not undermine the public trust

or lead a reasonable person to question its fairness and

impartiality, Mr. Eckenrod's potential conflict with CDM's

subcontractor was a sufficient basis for his removal from the

evaluation team, and he did not participate further in the

process.

19. On October 12, 2004, the D epartment gave notice of its

rankings of the vendors and informed them that it intended to

exercise its right to conduct oral discussions with all three

vendors. The firms would then be asked to submit Best and Final

Offers (BAFOs) which would be scored a new. This was consistent

with the ITN, which provided that the Department "reserves the

right to short list respondents deemed to be in the competitive

range to conduct oral discussions prior to the final

determination of contract award." The decision to conduct oral

discussions was made by senior management in the Department at

the time scores were posted for the replies to the ITN. The

Secretary of the Department, along with other senior management,

determined oral discussions would be conducted with a ll three

vendors to assist in formulating the BAFO Instructions

(Instructions) and then the Department would proceed to score

the BAFOs. No one has challenged this process.

c. Development of the BAFO Instructions

20. Before drafting the Instructions, th e Secretary of the

Department met with Earl Black, a Department of Revenue

attorney, and Barbara F. Phillips, a Purchasing Analyst with the

same agency. Both individuals had substantial experience with

procurements and were asked to participate in the BAF O process.

They agreed and were added to the evaluation team. As finally

formed, the team consisted of two attorneys, four engineers, and

two persons with significant procurement experience. Six of the

eight had considerable prior knowledge of the Piney Point site.

21. In an effort to refine the Instructions, CDM, Compass,

and Shaw each made oral presentations to the Department's

evaluators and other Department staff on November 3, 2004. All

of the evaluators, including Mr. Black and Ms. Phillips,

atte nded the oral presentation. As part of this process, the

vendors were able to ask questions of the evaluators, and the

evaluators were able to ask questions of the vendors.

22. Following the oral discussions, another round of

discussions was held with each vendor. These discussions were

referred to as "negotiation sessions." The purpose of these

discussions was to better understand the cost elements and facts

of each vendor’s initial proposal in order to develop the

Instructions. Mr. Alden, Dr. Fulei han, Mr. Black, and

Ms. Phillips conducted these discussions with each vendor.

23. The Instructions were drafted by a group of

individuals including Dr. Fuleihan, Mr. Black, Ms. Phillips,

Ms. Godfrey, Mr. Alden, and Mr. Coram. Dr. Fuleihan gave input

on the sections relating to technical issues primarily in the

scope of work, which included the process water consumption

section. He was also involved in revising the pricing summary

and developing the evaluation criteria. Neither Shaw nor

Compas s challenged any part of the Instructions.

24. After the Instructions were completed, but before the

BAFOs were submitted by the three vendors, the Department again

required each evaluator to complete a second conflict of

interest certification. The form was similar to the earlier

certification in the procurement process and required that the

members certify that they had "no conflict of interest" with

the "entities being considered for the contract award." Like

the earlier form, it imposed a continuing obligation on the

evaluators to notify the Department should any potential

conflict of interest arise. The form listed CDM, Compass,

and Shaw as the relevant entities. Each member, including

Dr. Fuleihan, executed the certification. At that time,

Dr. Fuleihan was not aware of any projects that Ardaman was

doing for Shaw or Compass, and he did not believe that Ardaman

was doing any work for CDM because of a past disagreement with

one of the CDM entities that resulted in no work between the

com panies for many years.

25. Section 1.19 of the Instructions provides that the

Department reserves the right to waive minor informalities or

irregularities in the offers received where such are merely a

matter of form and not substance and the correction of which are

not prejudicial to other vendors.

d. Evaluation of the BAFOs

26. On November 15, 2004, the Department issued the

Instructions, which required that responses be filed by the

three vendors no later than Wednesday, December 1, 2004. The

Ins tructions also informed the vendors that negotiations with

the top - ranked vendor would begin immediately after the posting

of the scoring results. CDM, Compass, and Shaw timely submitted

their BAFOs on December 1, 2004. CDM's response indicated that

it p roposed to use a specific water treatment process relying on

The Mosaic Company (Mosaic) as its subcontractor. This company

was formed when the phosphate operations of the Cargill

Companies and IMC Global, Inc. were combined in October 2004, or

shortly be fore the BAFOs were filed.

27. The evaluators located in Tallahassee were

individually given the responses submitted by CDM, Compass, and

Shaw on Thursday, December 2, 2004. For those evaluators

located outside of Tallahassee, the responses were given on

Friday, December 3, 2004. Pursuant to a specific set of

instructions provided by the Department, each evaluator, acting

independently, then individually ranked the BAFO responses.

28. In order to determine the responsiveness of the BAFOs,

Ms. Godfrey used a checklist to review the individual submittals

and found that all three were complete. Also, Dr. Fuleihan, who

served as the subject matter expert, reviewed each proposal to

ensure that the qualifications of the persons identified in the

responses m et the minimum qualifications listed in the

Instructions. He determined that all three vendors met the

minimum qualifications. Therefore, the Department considered

all three vendors responsive to the Instructions and qualified

to perform the work. (If a n evaluator considered a particular

item in the response to be incomplete or defective, the

evaluator could reflect that by assigning a lower score to that

response.)

e. The BAFO Scoring Process

29. For scoring purposes, each BAFO response was divided

in to approximately fifteen identified subcategories. A one - to -

five scale (with five being the highest score) was used to

evaluate each subcategory of the vendor’s response. The raw

scores for a given subcategory would be multiplied by a weight

factor that corresponded to that subcategory to arrive at a

weighted score for each subcategory. To obtain a total score

for each vendor, the weighted scores for each subcategory would

then be added together. The total weighted scores could range

between 0 and 220. Each vendor was then assigned a ranking

based on its weighted total score. The vendor with the highest

score received a rank of one, the second highest score received

a rank of two, and the third highest score received a rank of

three. If two or more ve ndors had identical weighted total

scores the ranks were added together and divided by two. (For

example, if Vendor A received a 175 and Vendors B and C each

received a 170, the vendors would be ranked as follows: Vendor

A - 1.0, Vendor B - 2.5, and Vend or C - 2.5.)

30. After all the scores had been submitted, the ranks of

each vendor were averaged to determine the best proposal for the

State. Average ranks were used in order to normalize the

evaluations so that an especially generous or especially ha rd

grader would not skew the outcome.

31. Each of the eight evaluators conducted an individual,

objective, and impartial review of the three responses to the

Instructions. They all spent four to five days, including a

weekend, reviewing each of the res ponses. (There is some

confusion regarding the actual amount of time that Mr. Zamani

spent reviewing the BAFOs. Documents offered by Shaw reflect

that he received the BAFOs on December 3 and returned his

rankings the following day, December 4. Testimony offered by

the Department reflects that he spent several days reviewing the

filings. Even if Shaw's time frame is correct, there is no

evidence that Mr. Zamani evaluated the BAFOs in an improper or

arbitrary manner.) The evaluators did not have any disc ussions

during the evaluation process about their evaluations. Outside

one phone call from Mr. Brown to Mr. Coram to clarify what the

vendors had received with the Instructions, the evaluators had

no contact with one another.

32. Mr. Alden ranked CDM f irst with a score of 177,

Compass second with a score of 174, and Shaw third with a score

of 172. Mr. Black ranked CDM first with a score of 140, Compass

second with a score of 137 and Shaw third with a score of 106.

Mr. Brown ranked CDM first with a sco re of 205, Compass second

with a score of 183 and Shaw third with a score of 182. Mr.

Coram ranked Compass first with a score of 180, Shaw second with

a score of 175 and CDM third with a score of 170. Dr. Fuleihan

ranked CDM first with a score of 192, wh ile Compass and Shaw

tied with scores of 189. Ms. Phillips originally submitted her

evaluations with Compass ranked first with a score of 144, and

Shaw and CDM tied with a score of 141. Due to an error when she

transposed her scores from her notes to her score sheet, she

corrected her evaluations at the hearing. With the corrected

scores Compass was still ranked first with a score of 144, but

CDM was now second with a score of 143, and Shaw third with a

score of 139. However, this correction did not cha nge the final

results of the evaluation process. Mr. Wright ranked Shaw first

with a score of 183, Compass second with a score of 181, and CDM

third with a score of 166. Mr. Zamani ranked CDM first with a

score of 218, Compass second with a score of 210, and Shaw third

with a score of 191.

33. After the evaluators submitted their score sheets, the

ranks were added up and averaged to obtain a final ranking for

each vendor. The final ranking was as follows: CDM was ranked

first with an average rank of 1.688, Compass second with an

average rank of 1.813, and Shaw third with an average rank of

2.500. (If Dr. Fuleihan's scores were removed from the final

tabulation, as requested by Compass, then Compass would be the

highest ranked vendor.) On December 7, 2004, the Department

electronically posted a recommended award to CDM as the best -

ranked vendor. As predetermined in the Instructions, the

announcement also stated that negotiations would immediately

begin with CDM, and if those negotiations failed, it w ould then

negotiate with Compass, the second ranked vendor, and if those

failed, with Shaw, who was ranked last.

34. Compass and Shaw timely filed their Notices of Protest

on December 9, 2004. On December 20, 2004, they timely filed

their Formal Written Protests. Both Petitioners have contended

that the process was flawed because Mosaic (a listed

subcontractor on CDM's proposal) was a client of Ardaman; that

Dr. Fuleihan had a conflict of interest which should have been

disclosed; and he should have recu sed himself from the process.

Shaw also contends (for the first time in its Proposed

Recommended Order) that at least two of the evaluators

(Mr. Black and Ms. Phillips) had little, if any, knowledge or

experience concerning the scientific and techni cal requirements

sought in the ITN and Instructions and were not qualified to

evaluate the responses. It also alleged that a Sunshine Law

violation may have occurred; that Mr. Zamani did not have a

sufficient amount of time to evaluate the proposals; 2 and that

the proposals of CDM and Compass were non - responsive in various

respects. The other contentions raised in Shaw's formal protest

and the Pre - Hearing Stipulation have not been addressed in its

Proposed Recommended Order and are deemed to have been

aba ndoned. The remaining contentions are discussed below.

f. Sunshine Law Violation

35. There is no evidence that the evaluators met in closed

meetings. Rather than scoring as a group, each of the

evaluators scored the BAFOs separately and independently.

Therefore, there was no meeting of the evaluators that was

required to be conducted in the sunshine.

36. No vendor attended the oral discussion meetings

between another vendor and the evaluation team. However, there

is no evidence that any of the vend ors asked to attend those

meetings or that the Department denied the vendors the ability

to attend.

g. Q ualifications of the Evaluators

37. There was no allegation in the Pre - Hearing Stipulation

that any of the evaluators were unqualified. Although Shaw

elicited testimony on that issue at hearing, especially

regarding the qualifications of Mr. Black and Ms. Phillips, the

issue was not timely raised. Even if it was, the evidence does

not show that those two individuals, or any other member of the

team, w ere not qualified. Mr. Black and Ms. Phillips were

chosen for the team because of their extensive experience in

state procurement, and not for their technical or scientific

background. Mr. Black, who has been an attorney for thirty - two

years, is an Assis tant General Counsel and Section Chief for the

Department of Revenue (DOR). In this position, he has handled

numerous procurement cases for that agency. His duties include

handling procurement matters, leasing matters and administrative

functions for DOR . Prior to assuming his position at DOR, he

worked for fourteen years for the Department of Management

Services (DMS) as its primary attorney responsible for contracts

dealing with environmental issues.

38. Ms. Phillips is a Purchasing Analyst for DOR with over

28 years of procurement experience with the vast majority

involving solicitation evaluations. Her responsibilities

involve ensuring proper administration of complex contracts and

specifications, Invitations to Bid (ITB), Requests for Proposals

( RFP), ITNs, and advertisements. She develops guidelines and

procedures to facilitate the ITB/RFP/ITN process and has

evaluated procurement policies and procedures for DOR.

h. Conflict of Interest Issue

39. In its response to the ITN, CDM identified IMC Global,

Inc., as a subcontractor for water treatment. After CDM's

initial reply was submitted, IMC Global, Inc. and a subsidiary

of Cargill merged to form a new company known as The Mosaic

Company. To conform its BAFO with this corporate merger, CDM

cha nged its response to reflect the new company as a

subcontractor for water treatment and consumption. Because

Ardaman had a contractual relationship with Mosaic at the time

the BAFOs were submitted, Petitioners have contended that

Dr. Fuleihan had a co nflict of interest, that he should have

disclosed this fact, and that he should have withdrawn from the

ITN process. They also contend that the Department dismissed

another non - employee evaluator, Richard Eckenrod, when it

learned that he had a potential conflict of interest and that

Dr. Fuleihan's circumstances are no different.

40. When Mr. Coram suggested that Dr. Fuleihan participate

as an evaluator, he knew that it would be likely that Ardaman

would have contractual relationships with most or all o f the

phosphate companies over time. He expected Ardaman to continue

to have such contractual relationships in the future simply

because Ardaman does excellent work. However, he did not

hesitate to recommend Dr. Fuleihan because he had worked with

him on a daily basis for over the past three years and had known

him for at least ten years. Mr. Coram testified that he always

found Dr. Fuleihan's actions to be ethical and in the best

interests of the State.

41. Dr. Ardaman is a Senior Vice President of A rdaman, a

member of its management team, and head of the firm's corporate

engineering group. He receives a salary, bonus, and stock

options; the bonus and stock options are tied to performance and

profitability of Ardaman and its parent company, Tetra Tec h,

Inc.

42. IMC, The Cargill Companies, and Mosaic have been

clients of Ardaman. This is not surprising, however, because

Ardaman's clients include "the whole phosphate industry."

Indeed, Ardaman does approximately 90 to 95 percent of the

engineering wo rk performed in Florida involving phosphogypsum

stack systems, a fact well known by virtually all of the players

in the phosphate industry, including Petitioners. Over the last

five years, Ardaman has represented such clients as Agrico

Chemical Company, C F Industries, Inc., the United States Army

Corps of Engineers, the Florida Department of Community Affairs,

PCS Phosphate, Comanco Environmental Corporation, Moretrench

Environmental Services, Inc., Shaw Environmental, Inc. (and its

predecessor, IT Corpora tion), PENN PRO, Inc., and the Florida

Department of Transportation. The Department itself is among

Ardaman's most significant clients.

43. When the ITN was first posted it was well known that

Dr. Fuleihan knew all of the principals of CDM, Compass, and

Shaw, including those who testified at the final hearing. In

fact, Dr. Fuleihan has worked on numerous occasions with most,

if not all, of the subcontractors and the consultants listed by

all three vendors in their BAFOs. All three vendors also knew

that Dr. Fuleihan had assisted with the ITN and BAFO processes

and was serving as an evaluator for the BAFOs. Prior to the

issuance of the Instructions, Dr. Fuleihan was present during

the oral discussions along with the other evaluators. He also

led the "ne gotiation sessions" where the Department was

gathering information to develop the Instructions. Only after

the Department proposed to award the contract to CDM on

December 7, 2004, did Petitioners challenge Dr. Fuleihan's

participation in the solicitatio n process and express a fear

that the process might be tainted.

44. Mosaic is considered an important client for Ardaman.

However, there was no evidence that Ardaman would stand to gain

anything from Mosaic by it serving as a subcontractor. Under

the terms of the ITN, Ardaman will continue working for the

Department at Piney Point as the engineer of record regardless

of which vendor ultimately contracts with the Department.

Ardaman did not receive any additional work from IMC Global,

Inc., when it was conducting work at Piney Point in 2003, and

Ardaman does not expect to receive any additional work if Mosaic

returns to the site to assist with the operation of water

treatment equipment.

45. Although it is characterized as an important team

member, Mo saic at most will have a limited role on CDM's team

and would receive very little financial benefit from this work.

Specifically, Mosaic will receive a nominal fee for allowing CDM

to use the patents on its reverse osmosis equipment and roughly

$50,000.00 for technical support in years three through five of

the project, or a total of less than one - tenth of one percent of

the estimated $52 million contract. (There is no guarantee that

Mosaic will even be used by CDM since the vendor has the right

to substi tute subcontractors during the post - award negotiation

process. In fact, CDM approached Mosaic because, at that time,

Dr. Vaughn Astley worked for Mosaic, and CDM wanted his

expertise and experience as part of CDM's team. Dr. Astley

subsequently retired f rom Mosaic, as planned.)

46. There is no evidence that, as a result of Mosaic being

retained as a subcontractor for CDM, Ardaman or Dr. Fuleihan

would be given extra business over and above what they already

provide. There is also no evidence that as a result of CDM's

being awarded the contract that Dr. Fuleihan would have his

salary increased, obtain some sort of bonus, increase his stock

options, or be enriched in any way.

47. There is no evidence that Dr. Fuleihan attempted to

influence the BAFO pro cess to the advantage of any particular

vendor. There is no evidence that he favored one vendor over

another when he assisted in the preparation of the Instructions,

determined whether the responses to the Instructions satisfied

the minimum qualifications , and reviewed the BAFOs. To the

contrary, the evidence supports a finding that Dr. Fuleihan

scored and ranked the individual BAFOs in a fair and objective

manner.

48. Notwithstanding the lack of any evidence to show that

Dr. Fuliehan exhibited bias or f avoritism during the

solicitation process, the facts surrounding the removal of

Mr. Eckenrod are essentially the same as those of Dr. Fuleihan.

In the case of Mr. Eckenrod, a non - employee, he alerted the

Department that he feared that there might be an appearance of

impropriety due to the fact that one of the individuals listed

in CDM's proposal and his wife held positions on boards of the

organization where he worked. Because the boards had the

ability to hire or fire him, and determine the program's budget,

Mr. Eckenrod was under the impression that this relationship

might be perceived as potentially influencing his evaluation of

the proposals. Given this impression, it was determined that a

reasonable person might come to the same conclusion and

the refore Mr. Eckenrod was excused from service.

49. In the case of Dr. Fuleihan, also a non - employee, he

had a professional relationship with a subcontractor (Mosaic),

which relationship might reasonably give rise to an appearance

of ethical impropriety i n the event the contract was ultimately

awarded to CDM. Therefore, even though there is no evidence

that Dr. Fuleihan acted improperly in evaluating the proposals,

a reasonable person might question his perceived impartiality.

Under the precedent establi shed in Mr. Eckenrod's case, DEP 202

and DEP 315 apply to Dr. Fuleihan's conduct, and he is obligated

"to avoid any conduct . . . which might undermine the public

trust . . . or give the appearance of ethical impropriety," and

to not have a "contractual re lationship with any business entity

. . . doing business with" the Department. Given these

standards, at a minimum, disclosure of this conflict was

necessary as soon as the BAFOs were filed. By failing to make

such a disclosure, the requirements in Sect ion 287.057(20),

Florida Statutes, the corresponding Instructions, and DEP 202

and 315 were contravened. The Department's contention that DEP

202 and DEP 315 do not apply to non - employees has been rejected,

especially since the Department applied the same provisions to

Mr. Eckenrod.

50. During the course of discovery in this case (and after

the solicitation process was over), Dr. Fuleihan learned that

Ardaman does have one small contract (valued at $57,000) with

CDM's parent company, Camp, Dresser & McKee (located in St.

Louis, Missouri), that was entered into in April 2004. That

contract calls for Ardaman to serve as a specialty consultant/

subcontractor to Monsanto Company (Monsanto) in providing waste

disposal services for Monsanto's elemental phosphor us plant

located in Idaho. When Dr. Fuleihan reviewed the BAFOs, he was

unaware of this contract. He acknowledged, however, that had he

known, he would have disclosed this fact to the Department.

Even so, it is fair to infer that a reasonable search of

Ardaman's records prior to the commencement of the process would

have revealed this conflict, and the Department's Ethics Officer

could have then made a determination as to whether Dr. Fuleihan

could serve as a team member.

51. Dr. Fuleihan signed two c onflict of interest forms

certifying that he had no conflict. He did not disclose any

conflict with Mosaic because he did not believe that the form

applied to subcontractors (as opposed to prime contractors), and

because his firm's relationship with a pot ential subcontractor

would not impede his ability to carry out his responsibilities

in evaluating the proposals. (If Mosaic had been a prime

contractor, Dr. Fuleihan acknowledged that he would have recused

himself from the process.) Other Department witn esses (Godfrey

and Coram) conceded, however, that the conflict of interest form

applies to subcontractors as well as the prime contractor, and

that if a conflict with a subcontractor arose, it should be

disclosed to the Department.

52. In summary, while there is no evidence that Ardaman's

professional relationship with both a prime contractor and a

subcontractor caused the evaluator to exhibit bias or favoritism

towards any particular vendor, the relationships give rise to an

appearance of ethical improp riety so that a reasonable person

might question the impartiality of Dr. Fuleihan. By not having

those relationships disclosed, the Department's governing

statutes, policies, and Instructions were contravened.

g. Were the CDM and Compass Proposals Resp onsive?

53. Shaw also contends that there were "many areas" in

which the proposals made by CDM and Compass did not materially

comply with the Instructions, and that they should be considered

non - responsive. Although Shaw's Formal Written Protest

identifi ed a wide range of purported deficiencies, only those

items which are discussed in Shaw's Proposed Recommended Order

are addressed here.

54. Shaw first contends that even though the vendors were

required by the Instructions to demonstrate the reliability of

their chosen methods of water treatment, Compass elected to

treat half of all water it would treat through an unproven

technology that was not demonstrated to be reliable.

55. Compass proposed a water treatment and consumption

method consisting of doub le - liming and air stripping or

aeration, followed by reverse osmosis. (Double - liming is a

chemical treatment process involving the addition of lime to

process water, while reverse osmosis is a physical treatment

where process water is forced through a sem i - permeable membrane

at high pressure to separate the clean and contaminated water.)

This was consistent with the Instructions, which specifically

allowed a vendor to use double - lime, air - stripping, and reverse

osmosis for water treatment. See Joint Exhi bit 4, Attachment 3

at pages 20 - 21. There is no requirement in Attachment 3 that

vendors use "proven technology" or demonstrate the reliability

and viability of their proposed water treatment methods.

56. There is no credible evidence in the record that the

water treatment method proposed by Compass would not work.

57. Shaw also alleged that Compass failed to adequately

bid utility services, because on line A2 of its BAFO, Compass

bid only $36,200.00 for all five years of electric utility

services.

5 8. In its proposal, Compass also included an assumed

prevailing rate for power of $100,922.00 per month. Although

only $36,200.00 is shown on line A2, Compass spread the rest of

the utility costs (approximately $2.3 million) throughout the

lines in Secti on B of Attachment 4. While this amount was lower

than the other vendors, the Department believed that Compass'

overall operation and maintenance expenses were reasonable, and

if any mistake had been made by Compass by understating the

power cost, it was to Compass' detriment and would not adversely

affect the interests of the State.

59. Shaw also argues that Compass submitted a drawing that

included reinforced geotextile but omitted the cost for that

item in that portion of its BAFO entitled "clarificati ons."

(Geotextiles allow for drainage of fluids and provide a basis

for bridging over soft, unstable materials).

60. Compass indicated in the clarifications section of its

BAFO that "reinforced geotextile would be (as needed). The cost

for this reinfo rced geotextile is not included." Under the

terms of the Instructions, there was no requirement that a

vendor estimate quantities that are not listed on the Pricing

Summary Sheet, so long as it submits a fixed price bid. Here,

the Pricing Summary Sheet i n the Instructions does not have a

line for the "as needed" geotextiles, and Compass submitted a

fixed price bid. Therefore, the omission of the cost for that

item did not render the BAFO non - responsive.

61. Finally, Shaw has alleged that in its BAFO, Co mpass

limited its exposure for the cost of normal repairs and

replacements of pumps and piping and was therefore non -

responsive. This argument is based on the fact that Compass

included $1.1 million in its cost estimate for normal repairs

and replacement of pumps and piping. Shaw asserts, however,

that because the plant is very old, the contractor will have to

take responsibility for failing equipment in order to keep the

plant running, and Compass has essentially capped its

replacement costs for transfor mers, switch gears, and other

necessary equipment.

62. Shaw did not present evidence that Compass had

actually capped its pump maintenance costs or that the amount

shown was inadequate. In fact, Shaw's estimated pump

maintenance was between $660,000.00 and $900,000.00, or less

than the amount proposed by Compass. Even if the amount shown

was underestimated, the Department has made it clear that it

wanted a lump sum contract and would hold the vendors to the

price stated in the BAFOs. (Like the other ve ndors, Compass

submitted a fixed price bid.)

63. Shaw next contends that CDM's proposal was non -

responsive in the areas of spray evaporation, the closure

construction schedule, water balance, and spray irrigation.

These items will be discussed separately below.

64. Shaw first asserts that CDM overestimated the amount

of process water it can treat with spray equipment during the

first two years of the contract since the spray equipment CDM

proposes to use will not be available until the fifth month of

t he first year of the contract.

65. During the first two years of the contract, CDM

proposes to dispose of 175 million gallons of process water

through spray evaporation, which involves spraying water into

the air to form a mist of small droplets and enha ncing the

natural evaporation through various techniques. In doing so,

CDM intends to use a new spray system developed by CF

Industries, which has achieved a rate of 200 million gallons per

year, or twice as much as the amount CDM proposes over a two

year period. Therefore, even if the equipment can only be used

for twenty months during the first two years, it is reasonable

to assume that CDM can evaporate 175 million gallons of process

water during the first two years, as projected in its BAFO.

66. Shaw also points out that the Instructions require

each vendor to supply a closure schedule including eight

"milestones" that must be completed within certain time frames.

The eighth milestone is the closure and placement of grass on

all lined reservoir slope s at least one year prior to the end of

the contract. See Joint Exhibit 4, Attachment 3, page 4, § IV.

While it concedes that CDM included a closure schedule for the

site, Shaw asserts that CDM failed to indicate when, if ever, it

would place grass - prote cted soil cover on all lined reservoir

slopes.

67. While the Department acknowledged that CDM's BAFO was

not as detailed as those of the other two vendors, it points out

there is "a lot of flexibility in the BAFO," and that "the

covers were not critical f or the closure schedule." Because CDM

clearly intends to place the soil cover on the lined areas in

conformance with the closure schedule, the omission was not

material and does not render the BAFO non - responsive.

68. Shaw next contends that even though the Instructions

require that a vendor prepare an independent water balance, it

is not apparent in the BAFO whether CDM prepared one. See Joint

Exhibit 4, page 14, § B. (A water balance is a professional

estimate of the volume of water on site, coupled with a

projection of how it will fluctuate over time considering

rainfall and groundwater inputs, surface and spray system

evaporation, groundwater seepage, and other factors.)

69. The Instructions required that CDM independently

estimate the water balanc e for the five - year contract period.

Nothing in the Instructions, though, requires that the actual

calculation or spreadsheets that support the estimated water

balance be shown.

70. With the assistance of its consultants, CDM estimated

the total quantity of process water as slightly in excess of one

billion gallons, which it rounded off to one billion. This

amount was responsive to the Instructions and was similar to the

amounts estimated by Shaw and Compass. Accordingly, the

estimate by CDM was respons ive to the Instructions.

71. Finally, Shaw argues that while "CDM also mentioned

the use of spray irrigation," CDM "did not estimate any volume

of water to be treated with this method." The contention has

been considered and found to be without merit.

7 2. In summary, the BAFOs submitted by CDM and Compass

conformed in all material respects to the solicitation. To the

extent that there were any minor deviations, they did not give

Compass or CDM an advantage or benefit not enjoyed by Shaw, and

under Sect ion 1.19 of the Instructions they could be waived by

the Department.

CONCLUSIONS OF LAW

73. The Division of Administrative Hearings has

jurisdiction over the subject matter and the parties thereto

pursuant to Sections 120.569 and 120.57(3), Florida Statut es.

74. Section 120.57(3)(f), Florida Statutes, provides in

relevant part as follows:

Unless otherwise provided by statute, the

burden of proof shall rest with the party

protesting the proposed agency action. In a

competitive - procurement protest, . . . t he

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.

75. By including the standard of proof language in the

last sentence, the statute is confusing and awkwardly worded.

I t is clear, however, that Petitioners have the burden of

proving by a preponderance of the evidence that the Department's

proposed award of the contract to CDM is contrary to the

Department's governing statutes, rules, policies, or the

Instructions. Presu mably, the standard of proof language

requires that Petitioners prove that the Department was clearly

erroneous or acted in a manner that was arbitrary, capricious,

or contrary to competition when it interpreted, applied, or

otherwise considered the govern ing statutes, rules, policies, or

Instructions.

76. Shaw contends that by selecting Dr. Fuleihan, and

having him participate in every phase of the process even though

he had a conflict of interest which was never disclosed, the

Department violated Section s 287.001 and 287.057(20), Florida

Statutes, DEP 202 and DEP 315, and the conflict attestation form

included in the Instructions. (Section 287.001, Florida

Statutes, establishes "fair and open competition" as a basic

tenet of the procurement process, whic h is designed to reduce

"the appearance and opportunity for favoritism." Assuming that

an agency's action can contravene an aspirational statute that

merely expresses legislative intent, the argument has been

considered.) Shaw also contends that the Depa rtment violated

Section 286.011, Florida Statutes (also known as the Sunshine

Law), because the evaluation team and the Department's

management met privately on several occasions to discuss the

proposals. Finally, and presumably for the purpose of

establi shing standing, it contends that the BAFOs filed by

Compass and CDM were contrary to the Instructions in several

material respects and were therefore non - responsive. A

contention that at least two of the evaluators were not

qualified was not timely raised and need not be considered.

Nonetheless, in the findings of fact, this contention has been

rejected. In its Formal Written Protest, Compass has raised a

single issue, that being Dr. Fuleihan's conflict of interest.

77. By a preponderance of the evide nce, Petitioners have

established that Ardaman (and Dr. Fuleihan) had a professional

relationship with the top - ranked vendor (CDM) and one of its

subcontractors (Mosaic) during the solicitation process; that

Dr. Fuleihan failed to disclose these conflicts on the

certification forms or to the Department; and that this omission

contravened the requirements of Sections 287.001 and

287.057(20), Florida Statutes, DEP 202 and DEP 315, and the

attestation form in the Instructions. Therefore, "the

[Department's] p roposed action is contrary to the [Department's]

governing statutes, the [Department's] rules or policies, or the

solicitation specifications." § 120.57(3)(f), Fla. Stat. 3 It is

inappropriate, then, to award a contract to CDM using an

evaluation team tha t includes Dr. Fuleihan.

78. For the reasons given in the findings of fact, the

evidence does not support a conclusion that the Sunshine Laws

were violated. Likewise, the evidence does not support a

conclusion that the BAFOs submitted by Compass and CDM were non -

responsive. To the extent that the BAFOs deviated from the

Instructions, such deviations were immaterial and could be

waived by the Department under Section 1.19 of the Instructions.

79. All other arguments presented by Shaw not specifically

add ressed by this Recommended Order have been considered and

rejected.

80. In summary, because the proposed award of the contract

to CDM contravenes the Department's governing statutes,

policies, and the Instructions, the proposed award cannot be

sustained .

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Department of Environmental Protection

enter a final order determining that its proposed award of the

contract to CDM Constructors, Inc., which was based upon a

review, grading, and ranking of the vendors by an evaluation

team that included Dr. Fuleihan, is contrary to its governing

statutes, policies, and specifications.

DONE AND ENTERED this 21st day of March, 2005, in

Tallahassee, Leon County, F lorida.

S

DONALD R. ALEXANDER

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 21st day of March, 2005.

ENDNOTES

1/ All future references are to Florida Statutes (2004).

2/ This contention has been rejected in Finding of Fact 31.

3/ In reaching this conclusion, the undersigned has considered a

contention by the Department and CDM (grounded on the two cases

cited below) that unless Petitioners can present "hard facts,"

and not mere suspicion or innuendo, that some impropriety

occurre d during the procurement process, the Department's action

must be sustained. See Gibbons & Company, Inc. v. State of Fla.,

Fla. Board of Regents et al. , DOAH Case No. 99 - 0697BID, 1999 WL

1486501 *70 - 71 (allegation that a member of evaluation team, in

coll usion with highest ranked vendor, designed the RFP so that

the vendor would receive contract rejected where no evidence to

support that allegation); Enpower, Inc. et al. v. Tampa Bay Water

et al. , DOAH Case No. 99 - 3398BID, 1999 WL 1486695 *38 (allegation

t hat "various individuals manipulated the procurement process to

the point of corruption" rejected where no facts to support that

charge). In the instant case, however, there is evidence that an

evaluator had a professional relationship with the highest ra nked

vendor and one of its subcontractors; and that he participated in

reviewing, ranking, and grading those two entities. Given these

circumstances, an appearance of ethical impropriety arises, and a

reasonable person might question the evaluator's impar tiality.

Because governing statutes, the Code of Ethics, and the

Instructions require that individuals disclose and avoid this

type of conflict, there is no need to show any "hard facts" that

favoritism and bias actually occurred.

COPIES FURNISHED:

K athy C. Carter, Agency Clerk

Department of Environmental Protection

3900 Commonwealth Boulevard

Mail Station 35

Tallahassee, Florida 32399 - 3000

Thomas M. Beason, Esquire

Department of Environmental Protection

3900 Commonwealth Boulevard

Mail Station 35

Tallahassee, Florida 32399 - 3000

Jere Earlywine, Esquire

Tew Cardenas LLP

215 South Monroe Street, Suite 702

Tallahassee, Florida 32301 - 1839

J. Andrew Bertron, Jr., Esquire

Huey, Guilday, Tucker, Schwartz

& Williams, P.A.

Post Office Box 12500

Tallaha ssee, Florida 32317 - 2500

Seann M. Frazier, Esquire

Greenberg Traurig, P.A.

Post Office Drawer 1838

Tallahassee, Florida 32302 - 1838

Dorn C. McGrath, III, Esquire

Greenberg Traurig, P.A.

1750 Tysons Boulevard, Suite 1200

McLean, Virginia 22102 - 4208

Gre gory M. Munson, General Counsel

Department of Environmental Protection

3900 Commonwealth Boulevard

Mail Station 35

Tallahassee, Florida 32399 - 3000

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 10

da ys from the date of this Recommended Order. Any exceptions to

this Recommended Order should be filed with the agency that will

render a final order in this matter.