05-000920BID Transportation Management Services Of Broward, Inc. vs. Commission For The Transportation Disadvantaged Status: Closed Recommended Order on Friday, May 20, 2005.

Summary: A member of the evaluation committee for the Request for Proposals for transportation services in Broward County had the appearance of a conflict of interest. The evaluation of the bids was improper and clearly erroneous. Recommend a re-bid.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

TRANSPORTATION MANAGEMENT )

SERVICES OF BROWARD, INC., )

)

Petitioner, )

)

vs. ) Case No. 05 - 0920BID

)

COMMISSION FOR THE )

TRANSPORTATION DISADVANTAGED, )

)

Respondent, )

)

and )

)

LOGISTICARE SOLUTIONS, LLC , )

)

Intervenor. )

)

RECOMMENDED ORDER

A formal hearing was held before Daniel M. Kilbride,

Administrative Law Judge of the Division of Administrative

Hearings in Tallahassee , Florida , on April 4 and 5, 2005.

APPEARANCES

For Petitioner: E. A. "Seth" Mills, Jr., Esquire

Mills, Paskert, Divers, P.A.

100 North Tampa Street, Suite 2010

Tampa, Florida 33602

For Respondent: Jeffrey D. Jones, Esquire

Tom Barnhart, Esquire

Dep artment of Legal Affairs

The Capitol, Plaza Level 01

Tallahassee, Florida 32399 - 1050

For Intervenor: Geoffrey D. Smith, Esquire

Kellie D. Scott, Esquire

Blank, Meenan & Smith, P.A.

204 South Monroe Street

Post Office Box 11068

Tallah assee, Florida 32302 - 3068

STATEMENT OF THE ISSUES

Whether the N otice of I ntent issued by the Commission for

the Transportation Disadvantaged (Respondent) to award a

contract for Medicaid Non - Emergency Transportation Services

(Medicaid NET Services) to Medicaid b eneficiaries in Broward

County to LogistiCare Solutions, LLC (Intervenor) is contrary to

Respondent's governing statutes, rules , or policies ;

Whether the bid or proposal specifications relating to the

receipt and evaluation of the Responses to the Requests for

Proposals RFP - DOT - 04/05 - 9021 - LG (RFP) was clearly erroneous,

contrary to competition, arbitrary, or capricious;

Whether an evaluator was improperly biased or legally

unqualified to render a fair and impartial evaluation; and

Whether the provisions of the RFP, Federal l aw, Chapters

286 and 287 , Florida Statutes (2004), or agency policy were

violated by the proposed award to Respondent concerning the

provision of Medicaid NET S ervices in Broward County.

PRELIMINARY STATEMENT

This is an ad ministrative proceeding involving a contract

procurement protest filed by Transportation Management Services

of Broward, Inc. (Petitioner) , as it relates to the proposed

decision of Respondent to award a contract to Intervenor to

provide non - emergency tran sportation services to Medicaid

recipients in Broward County. Respondent, for purposes of

administration, is attached to the Florida Department of

Transportation ( FD OT).

On January 24, 2005, F DOT posted its Notice of Intent to

award a contract for Brow ard County to Intervenor. On

January 25, 2005, Petitioner timely submitted its Notice of

Intent to Protest to FDOT and filed its Petition for Formal

Administrative Hearing with FDOT on February 3, 2005. Upon the

failure of mediation to resolve this matte r, FDOT referred this

matter to the Division of Administrative Hearings (DOAH) on

March 10 , 2005.

Upon motion, an Order G ranting I ntervention to Logisticare,

Inc., was entered on March 11, 2005, and expedited discovery

ensued.

On April 4 , 2005, Intervenor filed a Motion to Amend its

Petition for Leave to Intervene based on a scrivener's error ,

which was considered at the commencement of the formal hearing

on April 4, 2005. The Motion to Amend alleged that Intervenor

mistakenly filed its Petition for Leave to Intervene under the

name Logisticare , Inc., instead of Logisticare Solutions, LLC.

It is found that Logisticare, Inc., is the parent company

to Logisticare Solutions, LLC, which is a 100 - percent wholly -

owned subsidiary of Logisticare, Inc. The Petitio n for Leave to

Intervene clearly states that "Logisticare's substantial

interest will be affected by the outcome of this proceeding

because it has been awarded the contract through the process

being disputed." It was clear from the p etition itself that

Lo gisticare Solutions, LLC, was meant to be the intervening

party. The fact that Logisticare, Inc.'s , name was on the

Petition for Leave to Intervene , rather than Logisticare

Solutions, LLC's, name , was a simple error.

On April 4, 2005, at the commencement of the hearing,

Petitioner brought an oral Motion to Dismiss Due to Lack of

Standing before this tribunal. Petitioner argued that

Logisticare, Inc.'s, substantial interests were not at stake in

this proceeding, since they were not the real party in intere st.

The Administrative Law Judge reserved ruling on both of the

motions and allowed Intervenor to participate in the hearing.

Upon the evidence, it is clear that the Motion to Amend

should be granted and the Motion to Dismiss denied. Craig v.

East Pasco Medical Center, Inc. , 650 So. 2d 179 (Fla. 2d DCA

1995); Bill William s Air Conditioning & Heating, Inc. v.

Haymarket Cooperative Bank , 592 So. 2d 302 (Fla. 1st DCA 199 1 ).

At the final hearing, the parties stipulated to the

admission of Joint Exhibits 1 th rough 12, 14 through 27, 28 - A

through C, 29 - A, and 29 - B. Petitioner presented the oral

testimony of Lisa Bacot, Robert Siedlecki , and Lillian Graham in

its case - in - chief. Petitioner's Impeachment Exhibit 1 was also

admitted into evidence as part of Petit ioner's case - in - chief.

Respondent presented no oral testimony or exhibits, but

participated in the hearing. During its case - in - chief,

Intervenor presented the oral testimony of Kirk Gonzalez, but

offered no additional exhibits. At the conclusion of the

hearing, the parties requested and were granted 20 days from the

filing of the transcript in which to file proposed recommended

orders.

The three - volume T ranscript of the hearing was filed

April 9, 2005. Petitioner and Intervenor timely filed Proposed

Re commended Order s on April 29, 2005. Respondent has not filed

separate proposals as of the date of this Order. The parties'

proposals have been carefully considered in preparation of th is

Recommended Order.

FINDINGS OF FACT

A. Background

1. Responde nt is an independent commission of the State of

Florida created pursuant to Section 427.012, Florida Statutes

(2004) , and housed administratively and fiscally within FDOT.

Respondent's address is 605 Suwannee Street, Mail Station 49,

Tallahassee, Florida 32399 - 0450. The stated purpose of the

Commission is "to accomplish the coordination of transportation

services provided to the transportation disadvantaged."

§ 427.013, Fla. Stat. (2004). Respondent helps to provide

quality, efficient transportation ser vices for people who are

transportation disadvantaged, including the elderly, disabled

and those on low income. It provides transportation to doctor s '

offices, hospitals, and other kinds of health care services for

people who cannot afford to purchase tra nsportation or cannot

drive, for whatever reason.

2. In order to accomplish its purpose, Respondent obtained

federal dollars from the United States Department of Health and

Human Services to pay for the services described in the RFP.

3. Respondent , th rough FDOT, issued a n RFP f or qualified

Proposer s to provide Medicaid NET Services to Medicaid

b eneficiaries in Broward County and other counties in Florida.

4. Respondent is required to comply with FDOT's

procurement rules, policies, and procedures. FDOT administered

the procurement process for Respondent by issuing the

solicitation and , otherwise , administratively handling the

procurement for Respondent.

5. The Notice of Solicitation for bids was issued , and

responses were due on January 4, 2005.

6. Neither party filed a challenge to the terms of the RFP

within the 72 - hour period after the posting pursuant to

Subsection 120.57(3)(b), Florida Statutes (2004).

7. Two entities timely submitted proposals in response to

the RFP. Petitioner submitted a proposal in response to the RFP

and is a corporation authorized to do business in Florida.

Petitioner's business address is 16117 U.S. 19, Clearwater,

Florida 33764. Intervenor submitted a proposal in response to

the RFP and is a foreign , limited liab ility , for - profit

corporation registered to do business in the State of Florida.

Intervenor's principal business address is 1640 Phoenix

Boulevard, Suite 200, College Park, Georgia 30349.

8. Oral presentations took place on January 1 9, 2005 , in

Tallah assee .

9. On January 25, 2005, FDOT, on behalf of Respondent,

posted a Notice of Intent to Award Contract for Medicaid NET

Services for Broward County to Intervenor .

1 0 . On January 25, 2005, Petitioner submitted to FDOT a

notice indicating its intent to protest the proposed award and

filed its timely Petition for Formal Administrative Hearing with

FDOT on February 3, 2005. Following mediation, FDOT referred

the matter to DOAH on March 10 , 2005.

B. The RFP

11. FDOT assisted Respondent administratively in the

procurement of Medicaid NET S ervices described in the RFP. FDOT

policies and Chapter 287, Florida Statutes (2004), require

written justification when an agency elects to use an RFP as a

procurement method , rather than an Invitation to Bid (ITB).

12 . Respondent, however, failed to document the need for

an RFP , rather than an ITB. However, no challenge was made as

to the use of an RFP , rather than an ITB , within 72 hours of the

release of the N otice of S olicitation.

13. Respondent, nevertheless, requ ested written proposals

from qualified Proposers to provide Medicaid NET Services to

Medicaid b eneficiaries in Broward County.

14. According to the RFP, Respondent sought to enter into

a one - year contract with providers in Brevard, Broward , and

Hillsboroug h counties for the delivery of transportation

services to the transportation disadvantaged.

15. The contract price sheet s t ates that "[t]his is a set

price contract for each county, and price proposals are not

required."

16. No entity submitting a proposal for provision of

Medicaid NET Services in Hillsborough, Brevard, or Broward

Counties submitted any price other than the signed price page in

each of their proposals. No Proposer filed any protest

regarding the "set" price in the solicitation , and no chal lenges

were made with regard to the contract price until the day of the

hearing.

17. The form contract , attached to and incorporated in the

RFP , explicitly states that "[r]enewal of the contract shall be

in writing and shall be subject to the same terms an d conditions

set forth in the initial contract."

18. Respondent expected that the original contract would

run for a one - year period and that the renewal period would not

exceed an additional three years. The RFP further stated that

the contract would be r enewable "for up to 3 years or the term

of the contract, whichever [was] longer."

19. Respondent did not expect Proposer s to submit renewal

option prices.

20. No Proposer for Hillsborough, Brevard , or Broward

Counties submitted any option renewal prices , a nd all accepted

the fact that renewals would be under the same terms and

conditions subject to annual appropriation.

21. No Proposer filed any protest regarding the lack of

renewal option price s in the solicitation.

C . Proposals

22 . The RFP anticipated th at Proposers would submit

written proposals in response to the request. The RFP defined

"Proposer" as the "the prime vendor acting on their own behalf

and those individuals, partnerships, firms, or corporations

comprising the Proposer team."

23 . The Propo ser team consisted of those persons and

entities that were referenced in the p roposal.

24 . Petitioner's Proposer team included various

individuals and affiliates with experience providing Medicaid

NET S ervices in Florida. These affiliates included MMG

Tra nsportation, Inc., Transportation Management Services of

Brevard, Inc., Transportation Contract Services, Inc., and

Greater Pinellas Transportation Management Services.

Petitioner's Proposer team had good management credentials and

experience in the provi sion of Medicaid NET S ervices in various

parts of Florida. As demonstrated in its proposal and the

signed letters of intent contained therein, Petitioner's

Proposer team also included subcontractors with experience in

providing Medicaid NET S ervices in Br oward County .

25 . Intervenor's Proposer team included, among others, its

parent company, Logisticare, Inc., and its proposed

subcontractors, including AAA Wheelchair Wagon Service, Inc.

("AAA").

26 . Intervenor claims it is the largest transportation

manage ment company in the United States and the first company to

do transportation management brokerage services in association

with the Georgia Medicaid P rogram in 1997. Intervenor o perates

in 11 states, ha s five primary operation centers , approximately

28 to 29 field offices , employs roughly 500 people , and serves

approximately six million individual members around the United

States. Intervenor provides the full continuum of all potential

levels of services that a Medicaid recipient might require from

a non - e mergen cy transportation service.

27 . Intervenor was established to run transportation

operations formerly run directly by Logisticare, Inc.

Intervenor was formed as a limited liability company in 1998, as

a function of capitalization of Logisticare, Inc. The direct

corporate history of Intervenor can be traced back to 1989. The

Logisticare companies have had the same management in place for

over 15 years. Today, Intervenor is the only "Logisticare"

company that has employees and is the sole operating en tity.

28. Logisticare, Inc., managed identical Medicaid NET

Services for the Broward County program from 1996 through 1999

and substantially similar services to Broward County as early as

approximately 1991. Intervenor currently provides Medicaid NET

Serv ices for the Miami - Dade a rea t hat have taken them to and

through Broward County.

29 . When describing its past experience providing Medicaid

NET Services, Intervenor's proposal simply referred to

"Logisticare" and did not clearly distinguish which corporate

entity, whether it be Logisticare, Inc., Logisticare Solutions

LLC, or the prior company, Automated Dispatch Systems, which had

the prior experience. This is true even though the Broward

County experience listed in Intervenor's proposal was gained

before Intervenor ever legally existed. In fact, the services

were actually performed by a different corporate entity.

Intervenor had no direct experience in providing Medica id NET

Services in Broward County.

30 . The financial documents in Intervenor 's proposa l were

consolidated financials of several companies, not just the

Proposer, but this distinction was not known to at least one of

the evaluators because he did not read it.

31. As a result, Intervenor was given full credit for all

of the experience and fin ancial capabilities described in its

p roposal, while the same was not done for Petitioner.

32 . Petitioner was a seven - week - old corporation at the

time the proposals were evaluated. There was no evidence that

Petitioner was a successor entity of any other company or that

there was a continuous line of operation leading up to the

creation of Petitioner. Petitioner listed some companies as

being "in association with" and "affiliated with" them, but its

meaning was not defined in its proposal or at the final hearing.

No representative of Petitioner testified at the final hearing.

3 3 . Petitioner did not have any prior experience providing

Medicaid NET Services in Broward County, nor did it have any

prior experience in providing Medicaid NET Services in the Sta te

of Florida.

D . Letters of Intent

3 4 . Both Petitioner and Intervenor listed several entities

as potential subcontractors in their proposals through the

inclusion of letters of intent to negotiate. Petitioner's

proposal included letters of intent from V illage Care Service,

Inc. ("Village Car e "), B&L Service, Inc. ("B&L Service"), and

All Broward . " Intervenor's proposal included letters of intent

from AAA , Village Car e , Allied Charter and Tours ("Allied"), and

Handi - Van, Inc. ("Handi - Van").

3 5 . The lette rs of intent state that the entities are

interested in providing Medicaid NET S ervices under subcontract,

but the letter of intent itself is not a subcontract. The

letters only express intent to enter an agreement if rates and

other accepted terms and con ditions can be negotiated.

3 6 . It is a common practice for entities that have signed

letters of intent with a P roposer to , ultimately, not sign a

subcontract with a company. It is also common practice for

entities that have not signed letters of intent wi th a Proposer

to subsequently negotiate and sign additional subcontracts for

the provision of transportation services.

3 7 . According to Respondent , letters of intent to

negotiate could be changed.

3 8 . When establishing Medicaid NET Services in a new area,

Intervenor, as a general practice, goes into the existing

marketplace of providers to obtain letters of intent from those

providers so as to ensure continuity of service so that the

Medicaid recipients will not miss a trip. AAA is an existing

provider of Medicaid NET Services of Broward County.

39 . The fact that AAA notified Intervenor after the Notice

of Intent was issued that it will not participate in future

provision s of Medicaid NET Services in Broward County and that

its last day of providing such se rvices will be May 16, 2005, is

irrelevant to this proceeding.

E . Evaluation Committee

4 0 . It was FDOT and Petitioner's intent to evaluate the

proposals in a fair, open , and objective manner.

4 1 . In addition, both the RFP and FDOT policies require

evaluat ion committee members to provide fair, open, objective ,

and uniformly - rated evaluations using the criteria established

in the RFP.

4 2 . Respondent established an evaluation committee to

review and evaluate the proposals submitted in response to the

RFP. Th is committee consisted of Lisa Bacot, executive director

of Respondent ; K aren Somerset, assistant director of Programs

Evaluation and Oversight of Respondent; and Robert Siedlecki ,

chairman of the Medicaid Committee of Respondent .

4 3 . Bacot had been involv ed with one other evaluation of

an RFP . Siedlecki had been an evaluator on hundreds of requests

for proposals.

4 4 . Siedlecki has been trained by the federal government

as an investigator and evaluator of requests for proposals and

grants and is a trainer of evaluators on a federal level. He

has served on Respondent as a c ommissioner for nine years. He

has served as the chair of the Fraud Prevention Committee and

the Insurance Committee and is currently the chair of the

Medicaid Committee.

45. Siedlecki has a long, close, extensive , and on - going

relationship with Karen Caputo, the owner of AAA and one of the

prospective subcontractors identified in Intervenor's proposal

at the time he evaluated the proposals.

46. This relationship included:

a. A busines s association that extends back to

1978 , and periods as manager/owner and

contractor/subcontractor ;

b. Siedlecki's use of free - storage space in a

building owned by Caputo at the time of his

evaluation ;

c. Siedlecki holding a promissory note and

receiving payments from Caputo at the time of his

evaluation ;

d. Co - ownership of a closely - held transportation

services corporation, from which both received

substantial compensation at the time of his

evaluation ;

e. Jointly serving as directors for a non - profit

corporation ;

f. Caputo's previous rentals and purchases of

real property from Siedlecki worth hundreds of

thousands of dollars ; and

e. Siedlecki's sharing office space and fax

lines, free of any charge or expense, with AAA at the

time of his evaluation.

47. Siedlecki saw and communicated with Caputo on an

almost daily basis at the time of his evaluation. These

communications included discussions about Caputo's intended

actions concerning the services requested in the RFP. Other

than Siedlecki, no other evaluator had such information or based

their evaluation on such information outside of that described

in the p roposals and at the Oral Presentations. As a result,

Siedlecki knew that AAA was performing approximately 50 percent

of the Medicaid NET Service s in Broward County when he evaluated

the proposals from Petitioner and Intervenor.

48. Siedlecki actively considered these facts and

information obtained outside of the RFP and the evaluation

process when conducting his review of the submitted proposals.

49. In view of Siedlecki's relationship with Caputo and

AAA, there was an appearance of a conflict of interest. He

should have recused himself from the e valuation c ommittee when

this information bec a me known to him.

F. Evaluation of Proposals

50 . The RFP provided a point break - down and a maximum

score of 200 points for the evaluation of the proposals.

51 . The Technical Proposal points were divided into three

categories. These categories were Executive Summary, worth 10

points ; Management Plan, worth 60 p oints ; and Technical Plan,

worth 30 points.

52 . The Oral Presentation points were divided into two

categories. These categories were Presentation, worth 70

points , and Questions, worth 30 points.

53 . In addition to the points outlined in the RFP, the

eval uation committee , subsequently , added evaluation criteria

and decided to assign various and previously undisclosed weights

to sub - divide the Management Plan points into eight separate

criteria which would be evaluated.

5 4 . These newly - weighted criteria wer e not provided to the

Proposers.

5 5 . Nevertheless, the evaluators did not uniformly rate

the Technical Proposals as some gave experience credit under the

same criteria for all persons described in the Proposer team and

others did not. More importantly, it is clear that Siedlecki

applied the same criteria differently as to each p roposal.

5 6 . The activities of the evaluation committee were also

not "open" as some evaluator discussions were not publicly

noticed at all and others did not have the required minu tes

taken to comply with Florida's Sunshine L aw requirements.

5 7 . The same evaluation committee also evaluated the Oral

Presentations. These evaluations were based on two general

point categories as described in the RFP. No uniform or

specific criteria w ere established for use in evaluating the

Oral Presentations.

5 8 . The Oral Presentation evaluations were based solely on

the subjective criteria of each individual evaluator.

5 9 . The RFP required the committee responsible for

evaluating the proposals to "i ndependently evaluate the oral

presentations on the criteria established [in this section of

the RFP] to assure that orals [were] uniformly rate d. "

60 . Oral Presentations by Petitioner and Intervenor took

place on January 19, 2005.

61 . During its evaluatio n of the O ral P resentations, the

evaluation committee did not ask the Proposers a uniform set of

questions or , otherwise , use uniform criteria in con ducting

their evaluations.

62 . The evaluation committee did not consider cost as a

criteria in the evaluati on of the proposals submitted to perform

Medicaid NET Services in Broward County , since the RFP called

for a set price contract.

6 3 . Siedlecki never read the entire RFP before conducting

his evaluations. Specifically, Siedlecki was unaware of the

definiti on of "Proposer" as contained in the RFP and did not

apply such definition to his evaluation of Petitioner's

p roposal. Had Siedlecki known of the definition of "Proposer"

in the RFP, by his own testimony, he would have given Petitioner

a much higher score .

6 4 . Siedlecki im properly p erformed the evaluation of

Petitioner 's and Intervenor 's proposals. This resulted in an

inconsistent application of the evaluation criteria.

6 5 . Examples of his faulty evaluation include:

a. Failing to read the entire RFP befo re the

evaluations ;

b. Failing to read the entire Proposals while

conducting his evaluation ;

c. Incorrectly assuming Intervenor and

Logisticare, Inc., were the same corporate entity ;

d. Failing to inquire about the existing legal

relationship between L ogisticare, Inc., and Intervenor

and , yet , granted Intervenor full credit for past work

experience it did not actually possess ;

e . Applying the same evaluation criteria

differently to Petitioner and Intervenor as a result

of his faulty assumptions and lac k of inquiry ; and

f. Failing to consistently apply the term

"Proposer" as defined in the RFP, when evaluating the

proposals submitted by Petitioner and Intervenor.

6 6 . Siedlecki testified that because of the way that he

evaluated Petitioner's proposal , he arrived at a lower score

than Petitioner actually deserved.

6 7 . At the conclusion of the flawed evaluation process and

out of a possible 200 points to be awarded, the evaluation

committee arrived at the following scores for Petitioner and

Intervenor :

a. Ms. Bacot: Petitioner - 184 Intervenor - 171

b. Ms. Somerset: Petitioner - 170 Intervenor - 174

c. Mr. Siedlecki: Petitioner - 111 Intervenor - 200

CONCLUSIONS OF LAW

6 8 . The Division of Administrative Hearings has

jurisdiction over the parties and the subject matter pursuant to

Section 120.569 and Subsection 120.57(3), Florida Statutes

(2004).

Burden of Proof

69 . Subsection 120.57(3) (f) , Florida Statutes (2004),

reads in relevant part:

Unless otherwise provided by statute, the

burden of proof sh all 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 t o competition,

arbitrary, or capricious. . . .

7 0 . The protestor has the burden of proving by a

preponderance of the evidence that Respondent's proposed agency

action is invalid under the standards set forth in Subsection

120.57(3)(f), Florida Statutes ( 2004). See § 120.57(1)(j), Fla.

Stat. (2004) ("Finding s of fact shall be based upon a

preponderance of the evidence, except in penal or licensure

discipli nary proceedings or except as otherwise provided by

statute, and shall be based exclusively on the ev idence of

record and on matters officially recognized." ) See also State

Contr acting and Engineering Corp. v. Department of

Transportation , 709 So. 2d 607, 609 (Fla. 1st DCA 1998).

Standing

7 1 . Petitioner has challenged the fundamental fairness of

Respon dent 's procurement process and was "adversely affected" by

the alleged flawed process that led to Respondent 's proposed

agency action and, thus, has standing to file this protest.

§ 120.57(3), Fla. Stat. (2004).

7 2 . Intervenor, the first - rank bidder, has standing to

intervene in this proceeding because its substantial interests

will be determined by the challenge to Respondent's intended

action, which is to award the contract to Intervenor.

De Novo Proceeding

7 3. The requirement that the Administrative Law Judge

conduct a de novo hearing has been interpreted by th e First

District Court of Appeal. The court described a de novo hearing

in the context of a bid protest as "a form of intra - agency

review. The judge may rec eive evidence, as with any formal

h earing under section 120.57(1), but the object of the

proceeding is to evaluate the action taken by the agency.

[citations omitted.] " State Contr acting and Engineering Corp. ,

709 So. 2d at 609.

7 4 . As outlined in Subsection 120.57(3)(f), Florida

Statute s (2004), the ultimate issue in this proceeding is

"whether the agency's proposed action is contrary to the

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

the solicitation specifications." See , e.g. , R.N. Expertise,

Inc. v. Miami - Dade Cou nty School Board , Case No. 01 - 2663BID

(DOAH February 4, 2002) (Final Order March 14, 2002, adopting

Recommended Order), where the Administrative Law Judge stated:

By framing the ultimate issue 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," it is probabl e

that the legislature, rather than describing

a standard of review, intended to establish

a standard of conduct for the agency. The

sta ndard is: 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 action is

subject to (recommended) reversal by the

administrative law judge in a protest

proceeding.

Id. at 39.

7 5 . In addition to proving that Respondent breached this

statutory standard of conduct, a protester additionally must

establish that Respondent 's violation was either clearly

erroneous, contrar y to competition, arbitrary , or capricious.

§ 120.57(3)(f), Fla. Stat. (2004).

7 6 . E ach of these phrases has been construed by Florida's

appellate courts. See , e.g. , Colbert v. Department of Health ,

890 So. 2d 1165 (Fla. 1st DCA 2004) ("[O]ur review sta ndard . .

. is that of clearly erroneous, meaning the interpretation will

be upheld if the agency's construction falls within the

permissible range of interpretations. [citation omitted . ] If,

however, the agency's interpretation conflicts with the plain

and ordinary intent of the law, judicial deference need not be

given to it." [citation omitted . ] ) Id. at 1166 . Agrico

Chemical Co. v. State Department of Environmental Regulation ,

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

(Fla. 1979 ) ( A capricious action is one which is taken without

thought or reason, or irrationally. An arbitrary decision is

one not supported by facts or logic.) Id. at 763 .

7 7 . The purpose of competitive bidding requirements for

the award of public contracts is to ensure fairness to

prospective vendors and to secure the best value at the lowest

possible price to the public. The Florida Supreme Court

established this as the first paradigm of public procurement in

Wester v. Belote , 138 So. 721 , 722 (Fla. 1938), wh ere it

explained that:

The object and purpose of competitive

bidding statutes is to protect the public

against collusive contracts; to secure fair

competition upon equal terms to all bidders;

to remove, not only collusion, but

temptation for collusion an d opportunity for

gain at public expense; to close all avenues

to favoritism and fraud in its various

forms; to secure the best values at the

lowest possible expense; and to afford an

equal advantage to all desiring to do

business with the public authoriti es, by

providing an opportunity for an exact

comparison of bids.

7 8 . Since federal dollars from the U.S. Health and Human

Services Department are funding this procurement , we must also

look at relevant federal regulations. Those regulations also

require "to the maximum extent practical, open and free

competition." 45 C.F.R. § 74.43.

79 . Additionally, federal law provides:

No employee, officer or agent [of the

recipient of federal funds] shall

participate in the selection, award or

administration of a c ontract supported by

Federal funds if a real or apparent conflict

of interest would be involved.

See 45 C.F.R. § 74.42; Medco Behavioral Care Corporation v.

State of Iowa Department of Human Services , 553 N.W.2d 556 (Iowa

1996) (holding appearance of co nflict of interest sufficient

under state and federal law to nullify proposed contract award).

Appearance of Conflict of Inter e st

8 0 . The on - going business, personal , and professional

relationship between Siedlecki (as evaluator) and Caputo (owner

of AAA ) clearly presents the appearance of a conflict of

interest such that Siedlecki, o n appearances , may not have been

fair, neutral and objective in his evaluation. This results in

violations of the specific terms of the RFP, 45 C.F.R. Section

74.42, and Sec tion 287.001, Florida Statutes (2004) (which

requires "fair and open competition" in order to "reduce the

appearance and opportunity for favoritism and inspire public

confidence"), and the ideals expressed above in the Wester

decision.

8 1 . As a result o f Siedlecki's extensive and on - going

relationship with Caputo and AAA, there was, at a minimum , the

appearance of conflict of interest that prohibited him from

serving as a fair, neutral, and unbiased evaluator.

Faulty Evaluation Process

8 2 . In addition, t he evaluations conducted by Siedlecki

were both arbitrary and capricious. First, he failed to even

read the entire RFP or to properly apply the definition of

"Proposer" contained in the RFP as it applied to Petitioner. As

a result, he treated the two P roposer s entirely different, while

ostensibly applying the same evaluation criteria . Siedlecki

gave full credit to Intervenor's Proposer team, but did not d o

so for Petitioner. He further admitted that had he known the

definition of "Proposer" in the RFP and applied it to

Petitioner, it would have substantially increased Petitioner's

scores. This is true because he viewed Petitioner's Proposer

team as being "excellent." A second major flaw in Siedlecki's

evaluation process was that he failed to read or understand the

financial information provided by Intervenor . He assumed it

only related to the Proposer , which it did not.

83. These undisputed facts coupled with the findings of

fact set out above, clearly demonstrate that the overall

evaluation proce ss and scoring was tainted by these

deficiencies. Given the otherwise close scoring by the other

two evaluators, it appears that the overall award of the

proposed contract was significantly impacted by these improper

actions. See The Wachenhut Corporatio n v. FDOT , Case

No. 94 - 3160 BID (DOAH January 31, 1995) .

8 4 . The statutory requirement to place, in writing, the

need to use an RFP process , rather than an I TB was not performed

by Respondent . As such, the RFP process was improper.

A dditionally, Subsec tion 287.057(2)(a), Florida Statutes (2004),

also requires that the RFP describe the evaluation criteria and

their relative importance. Here, the relative importance of the

points awarded for the Management Plan was not established in

the RFP. The relati ve importance was subsequently established

by the evaluation committee when scor e sheets were prepared and

points were re - weighted. This also was improper.

8 5 . The same statute further requires that price "shall"

be considered in every RFP as one of the evaluation criteria.

However, i n this instance, the RFP provided for a set price.

Therefore, t his is not contrary to law. See § 287.057(2)(a)

and (b) , Fla. Stat. (2004) .

8 6. The policy of the FDOT, the applicable federal

regulations referenced above, a nd Sections 287.001 and 286.011,

Florida Statutes (2004), all require the actions of the

evaluation committee to be in the "sunshine" or "open." Here,

some of the evaluators' discussions concerning the RFP and their

evaluation were not open or in the suns hine as required by law.

Specifically, Subsection 286.011(2), Florida Statutes (2004),

requires minutes of all evaluative sessions to be "recorded."

No such recording occurred here , and as a result, t he evaluation

process was again improper.

8 7 . Addit ionally, Siedlecki based his evaluation, in part,

on his private discussions with Caputo and her intentions

relating to continuation of providing services in Broward

County . None of her comments were part of the proposals or the

RFP, and , thus, should hav e been excluded from the evaluation

proce s s. All of these actions were, thus, improper.

RECOMMENDATION

Based on the foregoing Findings of Facts and Conclusions of

Law, it is

RECOMMENDED that Respondent, Commission for the

Transportation Disadvantaged, reject the award to Intervenor ,

direct that this matter be re - bid or re - procured through a

properly drafted ITB or RFP , and exclude as evaluators all

person s with real or apparent conflicts of interest.

DONE AND ENT ERED this 20th day of May , 2005 , in

Ta llahassee, Leon County, Florida.

S

DANIEL M. KILBRIDE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 96 75

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 20th day of May , 2005 .

COPIES FURNISHED :

Jeffrey D. Jones, Esquire

Tom Barnhart, Esquire

Department of Legal Affairs

The Capitol, Pla za Level 01

Tallahassee, Florida 32399 - 1050

E. A. "Seth" Mills, Jr., Esquire

Mills, Paskert, Divers, P.A.

100 North Tampa Street, Suite 2010

Tampa, Florida 33602

Geoffrey D. Smith, Esquire

Kellie D. Scott, Esquire

Blank, Meenan & Smith, P.A.

204 South Monroe Street

Post Office Box 11068

Tallahassee, Florida 32302 - 3068

Lisa M. Bacot, Executive Director

Commission for the Transportation

Disadvantaged

605 Suwannee Street

Rhynes Building, Mail Station 49

Tallahassee, Florida 32399 - 0450

NOTICE O F 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.