05-004571BID Supply Chain Concepts vs. Miami-Dade County School Board Status: Closed Recommended Order on Monday, February 13, 2006.

Summary: In drawing the specifications for an invitation to bid, Respondent did not act contrary to a governing statute, rule, or policy; thus, Petitioner`s bid protest fails.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SUPPLY CHAIN CONCEPTS , )

)

Petitioner, )

)

vs. ) Case No. 05 - 4571 BID

)

MIAMI - DADE COUNTY SCHOOL BOARD, )

)

Respondent, )

)

and )

)

SCHOOL FOOD SERVICE SYSTEMS, )

INC. , )

)

Intervenor. )

)

RECOMMENDED ORDER

This case came before Administrative Law Judge John G.

Van Laningham for final hearing on January 18, 2006, in Miami,

Florida.

APPEARANCES

For Petitioner: Paula C. Coffman, Esquir e

200 East Robinson Street, Suite 290

Orlando, Florida 32801

For Respondent: Stephen L. Shochet, Esquire

Miami - Dade County School Board

1450 Northeast 2nd Avenue, Suite 400

Miami, Florida 33132

For I ntervenor: Jerome S. Reisman, Esquire

Jerome S. Reisman, P.A.

3006 Aviation Avenue, Suite 4B

Coconut Grove, Florida 33133

STATEMENT OF THE ISSUES

The issues in this bid protest are whether, in drawing the

specifications for an invitation to bid, Respondent acted

contrary to a governing statute, rule, or policy; and, if so,

whether the misstep was clearly erroneous, arbitrary or

capricious, or contrary to competition.

PRELIMINARY STATEMENT

On October 20, 2005, Petitioner Supply Chain Concepts

timely filed its notice of intent to protest the specifications

for dry cereal contained in an invitation to bid that Respondent

Miami - Dade County School Board had issued in furtherance of its

intent to award a contract for food items and distribution

services. This notice was followed by a formal written protest,

which Petitioner filed on October 31, 2005. Petitioner

subsequently submitted two separate addenda to its formal

protest. Respondent referred the matter to the Division of

Administrative Hearings on December 16, 2005.

The final hearing took place in Miami, Florida, as

scheduled. At the outset of the hearing, School Food Service

Systems, Inc. —— a potential bidder on the proposed contract —— was

granted leave to intervene, with out objection.

Petitioner presented the testimony of its president,

William G. Coffman, II; and Carol Chong, a dietician who works

for the Miami - Dade County Public School District. Intervenor

called Barry Gray, its Director of Purchasing, as its sole

witn ess. Respondent called no witnesses. Respondent's Exhibit

1 was the only exhibit offered and received in evidence.

Although a court reporter recorded the proceeding, neither

party ordered a transcript. Each party submitted a proposed

recommended order before the established deadline, which (after

one enlargement) was February 3, 2006. These were carefully

considered.

Unless otherwise indicated, citations to the Florida

Statutes refer to the 2005 Florida Statutes.

FINDINGS OF FACT

1. In 2005, Respond ent Miami - Dade County School Board (the

"Board") issued Invitation to Bid No. 010 - FF03 to solicit bids

on a contract for Mainline Foods and Distribution Services. The

Board intends, during the life of the proposed contract, to

purchase from the vendor to whom the contract is awarded

approximately 400 items of food, in varying quantities, for

service in the cafeterias of the schools located in the Miami -

Dade County Public School District (the "District").

2. Petitioner Supply Chain Concepts ("Supply Chain" ) is a

brokerage firm that represents the Malt - O - Meal Company ("Malt - O -

Meal"). Malt - O - Meal manufactures cereal, at least some of which

is sold under the Malt - O - Meal® brand. (Malt - O - Meal® cereals are

basically imitations of pricier, nationally recognized brands.

For example, Malt - O - Meal makes Coco Roos®, a cereal which

resembles Cocoa Puffs®, the familiar product of General Mills,

Inc.; and Crispy Rice®, a copy of Kellogg's Rice Krispies®.) As

of the date of the final hearing in this case, Supply Chain w as

under contract with the Board to supply —— and was supplying ——

Malt - O - Meal® cereals to the District's schools.

3. Under the proposed contract, the Board would purchase

cereal, together with hundreds of other foodstuffs, from a

single distributor. Suppl y Chain, which is not a distributor,

is not qualified to bid on the subject contract. Supply Chain,

however, supplies Malt - O - Meal® cereals to Intervenor School Food

Service Systems, Inc. ("SFSS"), which is a distributor eligible

to bid on the subject cont ract. SFSS would offer Malt - O - Meal®

cereals in its bid, if such cereals were responsive to the bid

specifications (which question goes to the heart of the present

dispute). Thus, Supply Chain's substantial interests are

affected by the instant procuremen t. 1

4. One of the food items in the subject bid is dry cereal.

The descriptive specifications for this item require that the

cereal be packaged in individual, self - serve bowls. The

specifications further provide as follows:

ASSORTED SWEETENED AND UNSWEE TENED FLAVORS.

EACH PRODUCT SERVING MUST MEET MINIMUM OF

ONE BREAD COMPONENT CREDIT AS INDICATED BY

THE USDA STANDARDS FOR THE NATIONAL SCHOOL

BREAKFAST PROGRAM. A MINIMUM OF VARIETIES

OF EIGHT FLAVORS, PLUS BRAN CEREAL WITH

RAISINS, TOTAL OF NINE FLAVOR S, FLAVORS TO

BE SELECTED BY THE DEPARTMENT OF FOOD AND

NUTRITION FROM A LIST OF FLAVORS PROVIDED BY

THE WINNING VENDOR. CEREALS TO CONTAIN A

MINIMUM OF 0.5 GRAMS OF DIETARY FIBER AND A

MAXIMUM OF 12 GRAMS OF SUGAR PER SERVING

(28G). INDIVIDUAL PRODUCT S ERVING MUST MEET

MINIMUM OF ONE BREAD COMPONENT CREDIT AS

INDICATED BY THE USDA STANDARDS FOR THE

NATIONAL SCHOOL BREAKFAST PROGRAM.

(Boldface and uppercase in original.) The boldface in the above

specifications (hereafter the "Nutritional Standards")

pr escribes requirements that the Board is implementing for the

first time in the procurement under review.

5. Finally, the specifications identify a number of

"approved brands." Six of these are products of the Kellogg

Company and four are General Mills' cereals. 2 None of Malt - O -

Meal's cereals is listed as an approved brand.

6. The Board did not designate any Malt - O - Meal® cereals as

approved brands because it had determined, in the process of

preparing the bid specifications, that Malt - O - Meal does not

offer a sufficient number of varieties that meet the Nutritional

Standards. It is the Board's position (which is not disputed)

that eight flavors (excluding raisin bran) must meet the

Nutritional Standards. 3 It is undisputed that Malt - O - Meal makes

only s even varieties (excluding raisin bran) that meet the

Nutritional Standards. 4

7. The Board included the requirement that the each

competing vendor offer a minimum number of flavors to ensure

that students will have a variety of cereals from which to

cho ose. As for why the Board chose to require a minimum of

eight flavors plus raisin bran, as opposed to some other number,

the evidence establishes that the "eight plus one" formula was

used in the last procurement and proved satisfactory.

CONCLUSIONS OF LAW

8. The Division of Administrative Hearings has personal

and subject matter jurisdiction in this proceeding pursuant to

Sections 120.569 and 120.57(1), Florida Statutes, and the

parties have standing.

9. Pursuant to Section 120.57(3)(f), Florida Stat utes, the

burden of proof rests with the party opposing the proposed

agency action, here Supply Chain. See State Contracting and

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

(Fla. 1st DCA 1998). Supply Chain must sustain its burden of

proof by a preponderance of the evidence. Florida Dept. of

Transp. v. J.W.C. Co., Inc ., 396 So. 2d 778, 787 (Fla. 1st DCA

1981).

The Rules of Decision in Bid Protests

The Standard of Conduct.

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

ru les of decision applicable in bid protests. In pertinent

part, the statute provides:

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 determ ine

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.

11. The First District Court of Appeal has construed the

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

Florida Statutes, to "describe a form of intra - agency review.[ 5 ]

The judg e may receive evidence, as with any formal hearing under

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

evaluate the action taken by the agency." State Contracting and

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

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

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

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

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

protest statute, whe rein the court had reasoned:

Although the hearing before the hearing

officer was a de novo proceeding, that

simply means that there was an evidentiary

hearing during which each party had a full

and fair opportunity to develop an

evidentiary record for admi nistrative review

purposes. It does not mean, as the hearing

officer apparently thought, that the hearing

officer sits as a substitute for the

Department and makes a determination whether

to award the bid de novo. Instead, the

hearing officer sits in a r eview capacity,

and must determine whether the bid review

criteria set . . . have been satisfied.

12. In framing the ultimate issue to be decided in this de

novo proceeding as being "whether the agency's proposed action

is contrary to the agency's govern ing statutes, the agency's

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

statute effectively establishes a standard of conduct for the

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

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

policies, 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.

13. Consequently, the party pr otesting the intended award

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

a specific instance or instances where the agency's conduct in

taking its proposed action was either:

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

(b) contr ary to the agency's rules or policies; or

(c) contrary to the bid or proposal specifications.

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

prove merely that the agency violated the general standard of

conduct. By virtue of the applicable standards of "proof,"

which are best understood as standards of review, 6 the protester

additionally must establish that the agency's misstep was:

(a) clearly erroneous;

(b) contrary to competition; or

(c) an abuse of discretion.

15. The three revi ew standards mentioned in the preceding

paragraph are markedly different from one another. The abuse of

discretion standard, for example, is more deferential (or

narrower) than the clearly erroneous standard. The bid protest

review process thus necessari ly entails a decision or decisions

regarding which of the several standards of review to use in

evaluating a particular action. To do this requires that the

meaning and applicability of each standard be carefully

considered.

The Standards of Review.

16. The Clearly Erroneous Standard. The clearly erroneous

standard is generally applied in reviewing a lower tribunal's

findings of fact. In Anderson v. City of Bessemer City, N.C. ,

470 U.S. 564, 573 - 74 (1985), the United States Supreme Court

expounded on th e meaning of the phrase "clearly erroneous,"

explaining:

Although the meaning of the phrase "clearly

erroneous" is not immediately apparent,

certain general principles governing the

exercise of the appellate court's power to

overturn findings of a [trial] court may be

derived from our cases. The foremost of

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

is 'clearly erroneous' when although there

is evidence to support it, the reviewing

court on the entire evidence is left with

the definite and firm conviction that a

mistake has been committed ." . . . . This

standard plainly does not entitle a

reviewing court to reverse the finding of

the trier of fact simply because it is

convinced that it would have decided the

case differently. The reviewing court

overste ps the bounds of its duty . . . if it

undertakes to duplicate the role of the

lower court. "In applying the clearly

erroneous standard to the findings of a

[trial] court sitting without a jury,

appellate courts must constantly have in

mind that their func tion is not to decide

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

[trial] court's account of the evidence is

plausible in light of the record viewed in

its entirety, the court of appeals may not

reverse it even though convinced that had it

been sitting as t he trier of fact, it would

have weighed the evidence differently. Where

there are two permissible views of the

evidence, the factfinder's choice between

them cannot be clearly erroneous. . . . .

(Citations omitted; emphasis added).

17. The Florida S upreme Court has used somewhat different

language to give this standard essentially the same meaning:

A finding of fact by the trial court in a

non - jury case will not be set aside on

review unless there is no substantial

evidence to sustain it, unless it i s clearly

against the weight of the evidence, or

unless it was induced by an erroneous view

of the law. A finding which rests on

conclusions drawn from undisputed evidence,

rather than on conflicts in the testimony,

does not carry with it the same

conclus iveness as a finding resting on

probative disputed facts, but is rather in

the nature of a legal conclusion. . . . .

When the appellate court is convinced that

an express or inferential finding of the

trial court is without support of any

substantial evi dence, is clearly against the

weight of the evidence or that the trial

court has misapplied the law to the

established facts, then the decision is

'clearly erroneous' and the appellate court

will reverse because the trial court has

'failed to give legal ef fect to the

evidence' in its entirety.

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

omitted).

18. Because administrative law judges are the triers of

fact charged with resolving disputed issues of material fact

based upon the evidence pre sented at hearing, and because bid

protests are fundamentally de novo proceedings, the undersigned

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

any findings of objective historical fact that might have been

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

exclusively the administrative law judge's responsibility, as

the trier of fact, to ascertain from the competent, substantial

evidence in the record what actually happened in the past or

what reality presently exists, as if no find ings previously had

been made.

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

ultimate factual determination —— for example, an agency's

conclusion that a proposal's departure from the project

specifications was a minor irregularity as opposed to a material

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

clearly erroneous standard of review. 7 To prevail on an

objection to an ultimate finding, therefore, the protester must

substantially undermine the factual predicate for the agency 's

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

logic led it unequivocally to commit a mistake.

20. There is another species of agency action that also is

entitled to review under the clearly erroneous standard:

interpretations of statu tes for whose administration the agency

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

See State Contracting and Engineering Corp. v. Department of

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

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

overturned unless clearly erroneous. Id. 8

21. This means that if the protester objects to the

proposed agency action on the ground that it violates either a

governing statute within the agency's substantive jurisdiction

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

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

subject statute or rule, then the agency's interpretation should

be accorded deference; the challenged action should stand unless

the agency’s interpretation is clearly erroneous (assuming the

agency acted in accordance therewith). 9

22. The Abuse of Discretion Standard. The statute

requires that agency action (in violation of the applicable

standard of conduct) which is "arbitrary or capricious" be set

aside. Earlier, the phrase "arbitrary or capricious" was

equated with the abuse of discretion standard, see endnote 6,

supra , because the concepts are practically indistinguishable ——

and because use of the term "discretion" serves as a u seful

reminder regarding the kind of agency action reviewable under

this highly deferential standard.

23. It has been observed that an arbitrary decision is one

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

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

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

(Fla. 1979). Thus, under the arbitrary or capricious standard,

"an agency is to be subjected only to the most rudimentary

command of rationality. The revie wing court is not authorized

to examine whether the agency's empirical conclusions have

support in substantial evidence." Adam Smith Enterprises, Inc.

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

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

t he reviewing court must consider whether

the agency: (1) has considered all relevant

factors; (2) has given actual, good faith

consideration to those factors; and (3) has

used reason rather than whim to progress

from consideration of each of these factors

to its final decision.

Id.

24. The second district framed the "arbitrary or

capricious" review standard in these terms: "If an

administrative decision is justifiable under any analysis that a

reasonable person would use to reach a decision of simila r

importance, it would seem that the decision is neither arbitrary

nor capricious." Dravo Basic Materials Co., Inc. v. State Dept.

of Transp. , 602 So. 2d 632, 634 n.3 (Fla. 2d DCA 1992). As the

court observed, this "is usually a fact - intensive

determinat ion." Id. at 634.

25. Compare the foregoing "arbitrary or capricious"

analysis with the test for reviewing discretionary decisions:

"Discretion, in this sense, is abused when

the judicial action is arbitrary, fanciful,

or unreasonable, which is anothe r way of

saying that discretion is abused only where

no reasonable man would take the view

adopted by the trial court. If reasonable

men could differ as to the propriety of the

action taken by the trial court, then it

cannot be said that the trial court a bused

its discretion."

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

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

1942). Further,

[t]he trial court's discretionary power is

subject only to the test of reasonableness,

but that test requires a determination of

whether there is logic and justification for

the result. The trial courts' discretionary

power was never intended to be exercised in

accordance with whim or caprice of the judge

nor in an inconsistent manner. Judges

dealing with cases essentially alike should

reach the same result. Different results

reached from substantially the same facts

comport with neither logic nor

reasonableness.

Canakaris , 382 So. 2d at 1203

26. Whether the standard is called "arbitrary o r

capricious" or "abuse of discretion," the scope of review, which

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

narrow "arbitrary or capricious" standard of review cannot

properly be applied in evaluating all agency actions that might

be cha llenged in a bid protest; rather, this highly deferential

standard appropriately applies only to those decisions which are

committed to the agency's discretion.

27. Therefore, where the protester objects to agency

action that entails the exercise of dis cretion, but only in such

instances, the objection cannot be sustained unless the agency

abused its discretion, i.e. acted arbitrarily or capriciously.

28. The Contrary to Competition Standard. The third

standard of review articulated in Section 120.57 (3)(f) is unique

to bid protests. The "contrary to competition" test is a catch -

all which applies to agency actions that do not turn on the

interpretation of a statue or rule, do not involve the exercise

of discretion, and do not depend upon (or amount to ) a

determination of ultimate fact.

29. Although the contrary to competition standard, being

unique to bid protests, is less well defined than the other

review standards, the undersigned concludes that the set of

proscribed actions should include, at a mi nimum, those which:

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

erode public confidence that contracts are awarded equitably and

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

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

dishonest, illegal, or fraudulent.

The Protest Grounds

30. Supply Chain protests the specifications for dry

cereal on two main grounds. First, Supply Chain contends that

requiring a manufacturer to offer at least eight varieties of

cere al that meet the Nutritional Standards is arbitrary and

capricious. Second, Supply Chain argues that specifying

approved brands is unduly restrictive of competition, in

violation of federal law. Each contention will be examined

below.

Minimum Compliance With the Nutritional Standards.

31. Supply Chain is not challenging the Nutritional

Standards per se, nor is it objecting to the Board's requiring

that some number of the cereals that a vendor offers meet the

Nutritional Standards. Rather, Supply Chai n complains that

"requiring the Petitioner [meaning, apparently, Malt - O - Meal, the

manufacturer which is not a party to this proceeding] to provide

a minimum of eight (8) varieties that comply with the new

nutritional specifications, instead of seven (7)," is

arbitrary. 10

32. Underlying Supply Chain's argument is the assumption ——

which all of the parties share —— that the specifications require

that at least eight of a cereal manufacturer's brands must meet

the Nutritional Standards in order for a vendor to offer any of

that manufacturer's brands in its bid. The parties apparently

consider this "requirement" to be self - evident, for none has

identified where, in the specifications, such a "requirement" is

to be found. Yet, having independently scrutinized th e

specifications, the undersigned concludes that, contrary to the

parties' assumption, the specifications clearly do not prohibit

a vendor from offering, as one (or more) of the eight flavors

meeting the Nutritional Standards, the brand(s) of a

manufacture r whose line of cereals contains fewer than eight

products that conform to the Nutritional Standards.

33. Accordingly, under the specifications at hand, the

fact that Malt - O - Meal makes fewer than eight varieties of cereal

that conform to the Nutritional Standards is not (or should not

be), of itself , 11 determinative of whether a vendor can include

Malt - O - Meal® cereals in its bid. If a vendor wants to offer

Malt - O - Meal® cereals, however, it must also include in its bid

some brands of another manufacturer, such as General Mills, in

order to fulfill the requirement of offering a minimum of eight

flavors (not including raisin bran) that conform to the

Nutritional Standards. 12

34. Turning now to what the specifications do require,

Supply Chain has not pointed to any statute, rule, or policy

which precludes the Board from demanding that, for a bid to be

responsive, a bidder must offer at least nine flavors of cereal

(including raisin bran), of which a minimum of eight (excluding

raisin bran) must satisfy the Nut ritional Standards. Moreover,

the evidence, such as there is, establishes that the Board had a

rational basis in fact for selecting the specified minimum

number of flavors, namely, favorable experience with that

amount. In this regard, the undersigned re jects, as unfounded

in fact or law, Supply Chain's contention that the Board's

imposition of the Nutritional Standards somehow compelled the

Board to settle for less variety in the assortment of cereals to

be served in the District's schools.

35. It is c oncluded, therefore, that requiring a vendor to

offer, in addition to a bran cereal with raisins, at least eight

flavors of cereal that conform to the Nutritional Standards is

neither arbitrary nor capricious.

The Approved Brands.

36. Supply Chain's ar gument —— echoed by SFSS —— that the

specifications' inclusion of approved brands violates federal

procurement regulations is an interesting one. But because

neither Supply Chain nor SFSS fully developed the argument, and

because the Board elected to ignore i t, the undersigned must

resolve the questions presented with considerably less input

from the parties than is desirable.

37. Supply Chain contends that the specifications

contravene 7 C.F.R. § 3016.36(c), which provides in relevant

part as follows:

(c) Competition. (1) All procurement

transactions will be conducted in a manner

providing full and open competition

consistent with the standards of § 3016.36.

Some of the situations considered to be

restrictive of competition include but are

not limited to:

(i) Placing unreasonable requirements on

firms in order for them to qualify to do

business,

(ii) Requiring unnecessary experience and

excessive bonding,

(iii) Noncompetitive pricing practices

between firms or between affiliated

companies,

(iv) Noncompe titive awards to consultants

that are on retainer contracts,

(v) Organizational conflicts of interest,

(vi) Specifying only a "brand name" product

instead of allowing "an equal" product to be

offered and describing the performance of

other relevant requ irements of the

procurement , and

(vii) Any arbitrary action in the

procurement process.

(Emphasis added).

38. Before considering whether the specifications run

afoul of the foregoing federal regulation (a point which Supply

Chain largely assumes), it mu st be explained that the

undersigned does not have jurisdiction generally to enforce

compliance with federal law. Thus, that the Board might have

violated an applicable federal regulation in drawing the

specifications under review is of no immediate conce rn, unless

there exists a state statute, rule, or policy that requires the

Board to obey the federal law in question.

39. For that reason, it is necessary to determine not only

whether the Board is subject to 7 C.F.R. § 3016.36(c), but also,

if so, whet her the instant state administrative forum is the

proper place to enforce the Board's compliance therewith.

40. On the question whether the Board is subject to 7

C.F.R. § 3016.36(c), Supply Chain asserts that, as a matter of

fact, the Board "operat[e s] an entitlement program within the

State of Florida under the auspices of the United States

Department of Agriculture." 13 Supply Chain then argues that, as

a legal consequence of the asserted "fact," the Board must

follow the above - referenced federal reg ulation, plus other

federal laws applicable to the "entitlement program." 14

41. The undersigned recalls no testimony about an

entitlement program. The specifications mention "USDA standards

for the National Breakfast Program," and apparently this is the

e ntitlement program to which Supply Chain refers, but the

references to the National Breakfast Program in the

specifications are insufficient, without more, to prove that the

Board participates in the program.

42. Research reveals that the Florida Legisl ature has

enacted the following statute pertaining to school food service

programs:

(1) In recognition of the demonstrated

relationship between good nutrition and the

capacity of students to develop and learn,

it is the policy of the state to provide

stan dards for school food service and to

require district school boards to establish

and maintain an appropriate private school

food service program consistent with the

nutritional needs of students.

(2) The State Board of Education shall

adopt rules coverin g the administration and

operation of the school food service

programs.

(3) Each district school board shall

consider the recommendations of the district

school superintendent and adopt policies to

provide for an appropriate food and

nutrition program fo r students consistent

with federal law and State Board of

Education rule.

(4) The state shall provide the state

National School Lunch Act matching

requirements. The funds provided shall be

distributed in such a manner as to comply

with the requirements of the National School

Lunch Act.

(5)(a) Each district school board shall

implement school breakfast programs in all

elementary schools that make breakfast

available to all students in kindergarten

through grade 6 in each district school ,

unless the elem entary school goes only

through grade 5, in which case the

requirement shall apply only through grade

5. Each district school board shall

implement breakfast programs in all

elementary schools in which students are

eligible for free and reduced price lunc h

meals , to the extent specifically funded in

the General Appropriations Act. A district

school board may operate a breakfast program

providing for food preparation at the school

site or in central locations with

distribution to designated satellite schoo ls

or any combination thereof.

(b) The commissioner shall make every

reasonable effort to ensure that any school

designated a "severe need school" receives

the highest rate of reimbursement to which

it is entitled pursuant to 42 U.S.C. s. 1773

for each f ree and reduced price breakfast

served.

(c) The department shall calculate and

distribute a school district breakfast

supplement for each school year by

multiplying the state breakfast rate as

specified in the General Appropriations Act

by the number of free and reduced price

breakfast meals served.

(d) The Legislature shall provide

sufficient funds in the General

Appropriations Act to reimburse

participating school districts for the

difference between the average federal

reimbursement for free and redu ced price

breakfasts and the average statewide cost

for breakfasts.

§ 1006.06, Fla. Stat. (emphasis added). As this statute makes

clear, Florida has elected to participate in the national school

food service programs for which federal grants are availab le

under the National School Lunch Act, and local school districts

are authorized —— and required in some circumstances —— to

participate in the National Breakfast Program, which was

established under the Child Nutrition Act of 1966. The

undersigned therefore accepts the premise that the District

operates a school food program that is funded, in part, through

federal grants.

43. As a general rule, when a state chooses to participate

in a voluntary federal program for which federal funds are

distributed, the state must comply with the federal statutes and

regulations governing the program, to be eligible for the

federal money. See Public Health Trust of Dade County, Fla. v. Dade County

School Bd. , 693 So. 2d 562, 564 (Fla. 3d DCA 1996)(state's participation i n the

Medicaid program necessitates its compliance with federal statutes and regulations

governing Medicaid); Florida v. Mathews , 526 F.2d 319, 326 (5th Cir.

1976)(" Once a state chooses to participate in a federally funded

program, it must comply with fede ral standards.") ; Buchanan v.

Ives , 793 F. Supp. 361, 363 ( D. Me. 1991)(states receiving

federal grants for the provision of vocational rehabilitation

services must comply with federal guidelines) . The undersigned

therefore concludes that the Board is req uired to comply with

the federal statutes and regulations governing the entitlement

programs authorized by the National School Lunch Act and the

Child Nutrition Act of 1966.

44. The United States Secretary of Agriculture is

authorized to promulgate regul ations for the operation of the

National School Breakfast Program, 42 U.S.C. §§ 1771 et seq. ,

and the National School Lunch Program, 42 U.S.C. §§ 1751 et.

seq. See 42 U.S.C. § 1779. Among the federal regulations

prescribed under this authority is 7 C.F.R . § 3016.4, which

provides in pertinent part as follows:

(b) Entitlement programs. In USDA, the

entitlement programs enumerated in this

paragraph are subject to subparts A through

D and the modifications in subpart E of this

part [ i.e. , part 3016].

(1) Entitlement grants under the following

programs authorized by The National School

Lunch Act:

(i) National School Lunch Program, General

Assistance (section 4 of the Act),

(ii) Commodity Assistance (section 6 of the

Act),

(iii) National School Lunch Prog ram, Special

Meal Assistance (section 11 of the Act),

(iv) Summer Food Service Program for

Children (section 13 of the Act), and

(v) Child and Adult Care Food Program

(section 17 of the Act);

(2) Entitlement grants under the following

programs authori zed by The Child Nutrition

Act of 1966:

(i) Special Milk Program for Children

(section 3 of the Act),

(ii) School Breakfast Program (section 4 of

the Act)[.]

45. Title 7, Code of Federal Regulations, Section

3016.36(c), a portion of which was quoted a bove in paragraph 37,

is located in subpart C of part 3016 of the Code. Therefore, to

the extent the Board receives federal financial assistance for

the operation of School Breakfast and School Lunch Programs, it

is subject, according to 7 C.F.R. § 3016.4 , to the procurement

standards prescribed in 7 C.F.R. § 3016.36.

46. The important question still remains whether any state

statute, rule, or policy requires the Board's compliance with

referenced federal procurement regulation. Unless the

specifications under review would contravene a state law by

violating the procurement standards prescribed in 7 C.F.R. §

3016.36, the undersigned would lack jurisdiction to invalidate

the specifications as contrary to the federal regulation. Put

another way, if the spe cifications violate 7 C.F.R. § 3016.36

but are not contrary to a state statute, rule, or policy as a

result of such violation, then this administrative forum is not

the proper place for the violation of federal law to be

addressed.

47. Section 1006.06, F lorida Statutes, which was quoted

above in paragraph 42, is the logical starting point in

reviewing potentially applicable state laws, for it deals with

school food service programs. But while Section 1006.06

provides that the state shall distribute match ing funds to the

school districts "in such a manner as to comply with the

requirements of the National School Lunch Act," this statute

does not explicitly direct the districts to adhere to federal

procurement standards in purchasing food for their respecti ve

school food service programs. Thus, we must look elsewhere for

the requisite state law.

48. Florida Administrative Code Rule 6 - 7.042 allocates

responsibilities for school food service programs. It provides

as follows:

(1) The Deputy Commissioner for Planning,

Budgeting and Management, shall have the

following responsibilities:

(a) To provide leadership and guidance in

the overall administration and development

of school food service programs.

(b) To administer federal and state school

food service funds, as provided by law or

regulation.

(c) To require that all programs for which

federal reimbursement is granted shall meet

at least the minimum standards established

by the United States Department of

Agriculture as provided in 7 CFR Parts 210,

215, 220, 225, 226, 227, 235, 240, 245, 250

and 252.

(d) To require that all programs meet at

least the minimum standards established by

Florida law and rules of the State Board.

Provided, however, that under extenuating

circumstances and upon written

recomme ndation of the Deputy Commissioner

for Planning, Budgeting and Management, the

Commissioner shall have authority to waive

any state school food service regulation for

a period of time not to exceed six (6)

months; provided further, that an extended

waiver may be granted based upon evidence

that it will contribute to the maintenance

of district or school goals. Such an

extended waiver shall be for no more than an

additional twelve (12) months during which

time the district must make periodic reports

to the D epartment as to the impact of the

waiver upon the districts food service

programs. Based upon positive results the

Commissioner may grant further waivers as

deemed appropriate.

(e) To distribute the required state

matching in such a manner as to comply w ith

the provisions for state matching under the

National School Lunch Act. The annual state

matching allocation shall be distributed by

computing the district's percentage share of

total federal revenue received times the

state general revenue matching al location.

The federal revenue includes Sections 4 and

11 of the National School Lunch Act and

Sections 4 and 5 of the Child Nutrition Act

of 1966, as mended, for two (2) fiscal years

prior to the current fiscal year. The state

matching allocation shall be distributed to

school districts in equal amounts quarterly.

(f) To prescribe an incentive plan for

qualified supervision for Child Nutrition

Programs.

(2) Each district school board shall have

the following responsibilities:

(a) To provide the necess ary food service

programs to meet nutritional needs of

students during the school day. These food

service programs shall be appropriately

scheduled and shall include as a minimum a

reimbursable lunch and if desired, a

reimbursable breakfast, both priced a s a

unit. Supplemental foods which make a

nutritional contribution to these meals may

also be provided.

(b) To adopt policies covering all phases

of the district school food service program.

(c) To control the sale of food and

beverage items in competit ion with the

district approved food service program,

including those classified as "foods of

minimal nutritional value," listed in Code

of Federal Regulations 210, Appendix B.

These items may be sold in secondary schools

only, with the approval of the sch ool board,

one (1) hour following the close of the last

lunch period. A school board may allow the

sale of carbonated beverages to students in

high schools by a school activity or

organization authorized by the principal at

all times if a beverage of one hundred (100)

percent fruit juice is sold at each location

where carbonated beverages are sold.

However, carbonated beverages may not be

sold where breakfast or lunch is being

served or eaten. Non - carbonated beverages,

including one hundred (100) percent fruit

juice, may be sold at all times during the

day at any location. Consideration should

be given to allowing only the sale of

nutritious food and beverage items which

meet at least United States Department of

Agriculture dietary guidelines for

American s.

(d) To require that when competitive food

and beverage items are sold during the

school day all proceeds from such sales

shall accrue to the food service program or

to a school organization approved by the

school board.

(e) To provide an alternative f ood service

program for students attending double

session schools. The school board, after

considering the nutritional needs of all the

students attending the school, shall

determine the alternative program needed.

(f) To provide facilities and equipment

necessary for the efficient and effective

operation of the school food service

programs, in compliance with Chapter 6 - 2,

F.A.C.

(g) To provide for the control,

administration, supervision, and operation

of all of the food service programs of the

district . The school board may contract

with a food management company to provide

food service in one (1) or more schools;

provided that the school board shall retain

responsibility for its operation,

administration, supervision and control, in

compliance with th e program agreement and

federal regulations.

(h) To adopt a policy for providing

economically needy students with free and

reduced price lunches and breakfasts, when

breakfasts are served, that will comply with

federal regulations. This policy shall

incl ude a plan for verifying economic need

of students and shall be approved by the

Deputy Commissioner for Planning, Budgeting

and Management.

(i) To adopt policies prescribing

procedures for purchases of food and nonfood

items in compliance with the require ments of

Rule 6A - 1.012, F.A.C. , of these rules,

provided that such policies:

1. Shall establish procedures to assure

that all foods purchased conform to the

Federal Food, Drug and Cosmetic Act, the

Federal Meat Inspection Act, and the Meat

Inspection Law of Florida, and any other

federal or state safeguards relating to

wholesomeness of specific items being

purchased.

2. May exempt food products except milk

from the bid requirements of Rule 6A - 1.012,

F.A.C. Milk may be exempt under the

following condition s:

a. The district school board has made a

finding that no valid or acceptable firm bid

has been received within the prescribed

time; or

b. The district school board has made a

finding that an emergency situation exists

and may enter into negotiations wi th

suppliers of milk and shall have the

authority to execute contracts under

whatever terms and conditions as the board

determines to be in the best interest of the

school system.

(j) To provide optional meal service at

cost to Department approved nonprof it child

nutrition sponsors of federal or state

nutrition programs operating within a

district.

(k) To limit, beginning with fiscal year

1984 - 1985, the amount of funds recovered

annually for food service indirect costs to

the district's approved restricte d federal

indirect cost rate, multiplied by the total

Food Service Fund expenditures less

expenditures for capital outlay, replacement

of equipment, and United States Department

of Agriculture donated foods; and cash - in -

lieu of donated foods.

(l) To condu ct a survey at the beginning of

each school year, in each school not having

a breakfast program asking parents whether

their children would participate if a

reimbursed breakfast program were available.

Within thirty (30) days after completion of

the survey , upon due public notice, the

superintendent shall present the results of

these surveys on a school by school basis to

the school board. The survey results shall

include the number of students represented

by parents requesting school breakfast and

recomme ndations from individual principals

desiring a school breakfast program, based

on the needs of the children within their

school. Upon presentation of the survey to

the school board, the school board shall

determine whether or not to accept the

recommendat ions of the individual principals

and whether or not to accept the breakfast

program in individual schools. If surveys

have been conducted for three (3)

consecutive years and the school board has

not established a breakfast program, the

survey may be cond ucted thereafter once

every three (3) years.

(3) The school principal and local school

staff shall have the following

responsibilities:

(a) To comply with federal and state laws,

regulations and district school board

policies.

(b) To effect, through cla ssroom

instruction and learning experiences outside

the classroom, ways to increase the pupil's

knowledge concerning nutrition.

(c) To schedule meal serving periods in

such a manner as to permit and encourage

maximum student participation in the food

serv ice program.

(4) Forms ESE 156, Preaward

Nondiscrimination Compliance Review Summer

Food Service Program for Children; ESE 195,

Monthly Claim for Reimbursement Summer Food

Service Program for Children; ESE 196,

Summer Food Service Program for Children

App lication for Participation; ESE 197,

Summer Food Service Program for Children

Site Information Sheet; ESE 198, Summer Food

Service Program for Children Agreement; ESE

003, Food Service Special Revenue Financial

Report; ESE 157, Application for Change in

Fo od Service Program; ESE 174, Monthly

Reimbursement Voucher School Lunch and

Breakfast Programs; ESE 177, Monthly

Reimbursement Voucher Special Milk (Only)

Program; ESE 178, Private School/Institution

Financial Report; ESE 491, National School

Lunch, School Breakfast and Commodity School

Program Application, Agreement & Policy

Statement; ESE 472, Special Milk Program for

Children Application, Agreement and Policy

Statement; and Form ESE 080, Breakfast

Program Supplement Report are hereby

incorporated by refe rence and made a part of

this rule to become effective September,

1999. These forms may be obtained from the

Administrator of Information Services and

Accountability, Division of Technology and

Administration, Department of Education, The

Florida Educatio n Center, Tallahassee,

Florida 32399.

Fla. Admin. Code R. 6 - 7.042. (emphasis added).

49. Pursuant to Rule 6 - 7.042(2)(h), the Board is required

to adopt a policy for operating its school food service

programs, and the policy must adhere to federal regula tions.

Conceivably, therefore, the Board has promulgated a policy under

which it is obligated to comply with federal laws including 7

C.F.R. § 3016.36. Supply Chain did not offer any evidence of

such a policy, however, and hence the undersigned is unable to

determine whether the specifications at issue, if found in

violation of 7 C.F.R. § 3016.36, would be contrary to the

Board's food service policy.

50. Rule 6 - 7.042(2)(i) directs district school boards to

adopt procurement policies in compliance with t he provisions of

Florida Administrative Code Rule 6A - 1.012. Although this latter

Rule is silent regarding compliance with federal law, it is

possible that the Board's procurement procedures require its

compliance with federal purchasing regulations such a s 7 C.F.R.

§ 3016.36. But Supply Chain did not offer any evidence of such

policies, and therefore the undersigned is unable to determine

whether the specifications at issue would be contrary to the

Board's procurement procedures were the specifications vi olative

of 7 C.F.R. § 3016.36.

51. The undersigned has not overlooked Rule 6 - 7.042(3)(a),

which requires school principals and local school staffs to

comply with federal law (among other applicable laws). Because,

however, the question at hand is whethe r state law compels the

Board to obey federal law —— specifically federal procurement

regulations —— Rule 6 - 7.042(3)(a) is not instructive. Further,

Supply Chain offered no evidence that school principals or local

school staffs were (or likely will be) direct ly involved in the

procurement at issue. Thus, the undersigned would be unable to

conclude that the challenged specifications contravene Rule 6 -

7.042(3)(a), even if he were to find them to contrary to 7

C.F.R. § 3016.36.

52. In sum, Supply Chain fail ed to establish that if the

specifications for dry cereal were restrictive of competition in

violation of 7 C.F.R. § 3016.36(c), then they would be "contrary

to the agency's governing statutes, [or] the agency's rules or

policies." See § 120.57(3)(f), Fla . Stat. The protest fails

for this reason.

53. Although this case c ould be decided without

determining whether the specifications are anti - competitive

under federal procurement law, the undersigned will nevertheless

render his opinion on the issue, pr oviding an independently

dispositive basis for the ultimate recommendation .

54. The federal regulation deems it an anti - competitive

procurement practice to specify "only" a "brand name" product

instead of describing the relevant characteristics of the

product sought and allowing equivalent "off brands" to be

offered. Here, the Board's specifications do not specify only a

brand name product; rather, they describe the relevant

requirements for the product sought, namely dry cereal. This is

consistent wi th 7 C.F.R. § 3016.36(c), not contrary thereto.

55. The specifications list 10 approved brands, each of

which is a cereal manufactured either by General Mills or

Kellogg. Supply Chain assumes that a bidder may offer only

these 10 brands and no others. Thus, according to Supply Chain,

because Malt - O - Meal® cereals are not mentioned, SFSS and other

bidders are precluded from offering them. If this were true,

then the specifications would be restrictive of competition

pursuant to 7 C.F.R. § 3016.36(c).

56 . The undersigned does not believe, however, that the

approved brands identified in the dry cereal specifications were

intended to be the only responsive brands. 15 If that were the

Board's intent, then it would not have been necessary to

publish, in the i nvitation to bid, the descriptive

specifications (including the Nutritional Standards) for dry

cereals, as they would be mere surplusage. Rather, it would

have been sufficient simply to ask for bids on the 10 approved

brands of cereal. To give meaning to the specifications as a

whole, without rendering a large portion thereof essentially

pointless, it is necessary to interpret the list as being

exemplary rather than exclusive, naming items which are

definitely responsive to the Board's invitation while al lowing

others of like kind ( i.e. meeting the descriptive specifications

including the Nutritional Standards) to be offered as well.

57. In further support of this interpretation, the

undersigned notes that there is no dispute that Kellogg and

General Mil ls each offer brands, in addition to the approved

brands, that meet the Nutritional Standards. If the list of

approved brands were exclusive, then these other brands of

Kellogg and General Mills could not be offered. Yet, although

there was no direct evi dence on this point, the undersigned

infers from the testimony presented that the specifications were

intended to allow a bidder to offer any products of General

Mills or Kellogg that meet the Nutritional Standards and other

requirements. The undersigned believes that the specifications

likewise allow a bidder to offer any Malt - O - Meal® cereals that

meet the Nutritional Standards and other descriptive

requirements, because to exclude them while accepting bids on

other brands not listed would be irrational, arbitrary, and

contrary to competition —— and the Board undoubtedly does not

intend to act in such a manner.

58. The undersigned therefore concludes that the

specifications, properly understood, are not restrictive of

competition as such is defined in 7 C.F .R. § 3016.36(c).

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

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

declaring Supply Chain's protest to be unsuccessful and

authorizing the procurement to proceed. 16

DONE AN D ENTERED this 13th day of February, 2006, in

Tallahassee, Leon County, Florida.

S

JOHN G. VAN LANINGHAM

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee , Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

F iled with the Clerk of the

Division of Administrative Hearings

this 13th day of February, 2006 .

ENDNOTES

1 / The Bo ard did not challenge Supply Chain's standing to

maintain this protest.

2 / The approved brands are identified by manufacturer and

product number, e.g. Kellogg's 01996 —— not brand name, e.g.

Kellogg's Corn Flakes®. The evidence is insufficient to permit

t he undersigned to make findings regarding the particular brands

of cereal deemed approved pursuant to the bid specifications.

3 / The undersigned is less sure than the parties that the

specifications at issue unambiguously require that only eight

out of t he total of nine minimum flavors must meet the

Nutritional Standards. The undersigned would read the

specifications as requiring: (a) that raisin bran be one of the

nine minimum flavors (the only flavor specifically required),

and (b) that all varieties offered (of which there must be at

least nine including raisin bran) meet the Nutritional

Standards. Nevertheless, because all parties accepted the

Board's position as described above, and because the Board's

position is not clearly contrary to the specif ications, the

undersigned, too, accepts the Board's position without further

comment.

4 / There is information in the file —— but not in the evidentiary

record —— concerning the nutritional specifications of Malt - O -

Meal® cereals. Based on these data, which a re set forth in a

document that was appended to a memorandum referenced in the

second addendum to Supply Chain's formal protest, the

undersigned counts seven of Malt - O - Meal's cereals ( including

raisin bran) as being in compliance with the Nutritional

Stand ards, after adjusting the fiber and sugar contents of the

respective varieties to match the specified serving size of 28

grams. (The Nutritional Standards are expressed in terms of

fiber/sugar per 28 grams of product. Many of the Malt - O - Meal®

cereals are packaged in bowls containing an amount not equal to

28 grams, e.g. 21 grams (Apple Zings®) or 24 grams (Coco - Roos®).

To determine the amount of fiber and sugar in 28 grams of, say,

Coco - Roos® requires, therefore, that the nutritional data for a

24 - gram s erving be increased by a factor of 1.17 (28 ÷24).)

Thus, it could be that, in fact, Malt - O - Meal makes only six

varieties (excluding raisin bran) that conform to the

Nutritional Standards. But evidence to support such a finding

was not offered, and the par ties agreed on the finding expressed

in the text.

5 / Because DOAH is independent of the letting authority, see §

120.65(1), Florida Statutes, it might be preferable to label bid

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

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

authority itself ultimately renders the final order, the first

district’s nomenclature is not incorrect.

6 / The term "standard of proof" as used in § 120.57(3)(f)

reasonably may be interpreted to reference stan dards of review .

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

mention any common standards of proof, it does articulate two

accepted standards of review: (1) the "clearly erroneous"

standard and (2) the abuse of discretion (= "arbitra ry or

capricious") standard. The "contrary to competition"

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

review —— is unique to bid protests.

7 / An ultimate factual determination is a conclusion derived by

reasoning from objective facts; it frequently involves the

application of a legal principle or rule to historical facts:

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

circumstances and therefore was negligent; and it may be infused

with policy considerations. Reaching an ultimat e factual

finding requires that judgment calls be made which are unlike

those that attend the pure fact finding functions of weighing

evidence and choosing between conflicting but permissible views

of reality.

8 / From the general principle of deference f ollows the more

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

sole possible interpretation or even the most desirable one; it

need only be within the range of permissible interpretations.

State Bd. of Optometry v. Florida Soc. of Ophthalmol ogy , 538 So.

2d 878, 885 (Fla. 1st DCA 1988), rev. denied , 542 So. 2d 1333

(Fla. 1989); see also Suddath Van Lines, Inc. v. State Dept. of

Environmental Protection , 668 So. 2d 209, 212 (Fla. 1st DCA

1996). However, "[t]he deference granted an agency’s

int erpretation is not absolute." Department of Natural

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

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

conceivable construction of a statute or rule no matter how

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

a permissible construction" will be upheld by the courts.

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

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

unambiguous language of the ru le, the construction is clearly

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

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

1987); see also Legal Environmental Assistance Foundation v.

Board of County Com'rs of Brevard Coun ty , 642 So. 2d 1081, 1083 -

84 (Fla. 1994)("unreasonable interpretation" will not be

sustained).

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

following the announcement of an intended award, with regard to

preliminary agency action taken upon the agency’s interpretation

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

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

Florida Statutes, provides a remedy for badly written or

ambiguous specifications: they may be protested w ithin 72 hours

after the posting of the specifications. The failure to avail

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

about the specifications per se. Consequently, if the dispute

in a protest challenging a proposed award turns on the

interpretation of an ambiguous, vague, or unreasonable

specification, which could have been corrected or clarified

prior to acceptance of the bids or proposals had a timely

specifications protest been brought, and if the agency has acted

thereafter in accordance with a permissible interpretation of

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

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

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

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

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

the plain language of a lawful specification, then its action

should probably be corrected, for in that event the preliminary

agency action likely would be clearly erroneous or contrary to

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

because a reasonable person would not protest an unambiguous

specification that facially conforms to Florida procurement law.

10 / Pet.'s Prop. Findings of Fact at 5.

11 / A separate issue concerning whether the list of approved

brands is exclusive will be addressed below.

12 / There is no evidence as to whether a distributor is likely,

as a practical business matter, simultaneously to offer cereals

of compe titors such as Kellogg and Malt - O - Meal. The

specifications pertaining to minimum compliance with the

Nutritional Standards do not, however, prevent such from

occurring. In fact, if the list of approved brands were

exclusive in nature, then a vendor would have to offer cereals

of both Kellogg and General Mills because each makes fewer than

nine approved brands.

13 / Pet.'s Prop. Findings of Fact at 3 - 4.

14 / Id. at 4.

15 / The undersigned recalls the Board's counsel arguing at

hearing that the list of ap proved brands in the specifications

was indeed meant to be exclusive. This argument was never

reduced to writing, however, and no evidence was presented to

establish the Board's intent as a matter of fact. For the

reasons set forth in the text above, the undersigned considers

it unreasonable to interpret the mention of approved brands as

an exclusion of all other brands.

16 / The Board's motion for attorney's fees is denied.

COPIES FURNISHED :

Paula C. Coffman, Esquire

200 East Robinson Street, Suite 2 90

Orlando, Florida 32801

Stephen L. Shochet, Esquire

Miami - Dade County School Board

1450 Northeast 2nd Avenue, Suite 400

Miami, Florida 33132

Jerome S. Reisman, Esquire

Jerome S. Reisman, P.A.

3006 Aviation Avenue, Suite 4B

Coconut Grove, Florida 33133

Dr. Rudolph F. Crew, Superintendent

Miami - Dade County School Board

1450 Northeast Second Avenue, No. 912

Miami, Florida 33132 - 1394

Honorable John L. Winn

Commissioner of Education

Turlington Building, Suite 1514

325 West Gaines Street

Tallahasse e, Florida 32399 - 0400

Daniel J. Woodring, General Counsel

Department of Education

Turlington Building, Suite 1244

325 West Gaines Street

Tallahassee, Florida 32399 - 0400

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit writt en 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.