06-001466BID Choicepoint Government Services, Inc. vs. Department Of Law Enforcement Status: Closed Recommended Order on Wednesday, July 12, 2006.

Summary: Petitioner failed to show that the negotiation of a contract with the selected vendor was a violation of the Respondent`s governing statutes, rules, policies or the Invitation to Bid specifications. Recommend that the petition be dismissed.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CHOICEPOINT GOVERNMENT )

SERVICES, INC. , )

)

Petitioner , )

)

vs. ) Case No. 06 - 1466BID

)

DEPARTMENT OF LAW ENFORCEMENT , )

)

Respondent, )

)

and )

)

LEXISNEXIS, )

)

Intervenor . )

)

RECOMMENDED ORDER

Administrative Law Judge Don W. Davis of the Division of

Administrative Hearings (DOAH) held a final hearing in the above

titled cause on May 19, 2006, in Tallahassee, Florida.

APPEARANCES

For P etitioner: J. Stephen Menton, Esquire

Rutledge, Ecenia, Purnell

and Hoffman, P.A.

Post Office Box 551

Tallahassee, Florida 32302

For Respondent: John Booth, Esquire

Departm ent of Law Enforcement

Post Office Box 1489

Tallahassee, Florida 32302 - 1489

For Intervenor: Mary Piccard Vance, Esquire

Vezina, Lawrence and Piscitelli, P.A.

413 East Park Avenue

Tallahassee, Florida 32301

STATEMENT OF THE ISSUE

Whether the State of Florida, Department of Law Enforcement

(FDLE), issued a Notice of Intent to Award a contract, pursuant

to an Invitation to Negotiate (ITN), to LexisNexis (Interv enor),

which was contrary to FDLE’s governing statutes, rules, polices,

or any applicable bid or proposal specification.

PRELIMINARY STATEMENT

On November 2, 2005, FDLE issued ITN No. B1003 in order to

secure proposals from vendors for a contract to pro vide

information and technology services to support domestic security

and other criminal investigations by FDLE.

By December 14, 2005, eight proposals were received by

FDLE. Two proposals were eliminated on opening due to omission

of required material s. Four other vendors were eliminated

following oral presentations during the week of January 3, 2006.

FDLE’s evaluation team recommended that the two remaining

vendors, Choicepoint Government Services, Inc. (Petitioner), and

Intervenor be chosen for negotiations with FDLE to obtain the

Best and Final Offer (BAFO) of each vendor. The decision was

publicly posted on January 25, 2006.

Following subsequent negotiations between FDLE and the two

vendors, both vendors submitted their BAFOs on February 23 ,

2006. Notice was posted on March 7, 2006, that an award to

Intervenor was recommended as offering the best overall value to

the State of Florida.

On March 10, 2006, Petitioner timely filed a Notice of

Protest of the Notice of Intent to award to Interv enor and,

later, on March 20, 2006, a Formal Written Protest. The matter

was then referred to DOAH by FDLE.

At the final hearing, the parties presented eight joint

exhibits, which were received into evidence. FDLE also

presented testimony of two witnes ses and offered two exhibits,

which were admitted into evidence. Petitioner presented the

testimony of three witnesses.

A Transcript of the hearing was filed with DOAH on June 8,

2006. All parties filed Proposed Recommended Orders, which have

been rev iewed and utilized in the preparation of this

Recommended Order.

References to Florida Statutes are to the 2005 edition,

unless otherwise noted.

FINDINGS OF FACT

Stipulated Facts

1. FDLE issued Invitation to Negotiate #B1003 (the ITN) on

November 2, 20 05, seeking detailed and competitive proposals to

provide information and technology services to support domestic

security and other criminal investigations.

2. FDLE received and evaluated responses to the ITN from

six firms , including Petitioner and In tervenor.

3. On January 25, 2006, FDLE posted its notice of intent

to enter into negotiations with Petitioner and Intervenor.

4. FDLE issued final instructions to Petitioner and

Intervenor, including a request for BAFOs on February 15, 2006.

5. Peti tioner and Intervenor submitted timely BAFOs on

February 23, 2006.

6. FDLE posted a notice of intent to award the contract to

Intervenor on March 7, 2006.

7. Petitioner timely filed a notice of intent to protest

followed by a formal written protest a nd appropriate protest

bond.

8. Intervenor filed a petition to intervene, which was

granted.

Other Facts

9. Initial replies to the ITN were received, reviewed for

responsiveness, evaluated, and ranked by FDLE. Both Petitioner

and Intervenor replies to the ITN were deemed to be responsive,

and, subsequently, to constitute the top two proposers. In

accordance with the ITN specifications, negotiations ensued with

both Petitioner and Intervenor. FDLE’s negotiation team met

with Petitioner representativ es and then with Intervenor

representatives between February 6 and 8, 2006.

10. During the negotiations, the vendors and FDLE’s

negotiation team engaged in substantive discussions regarding

the vendors’ respective proposals. Both vendors agreed to

chan ges both in technical areas and in pricing. Both vendors

had the opportunity to fully explain the merits of their

respective proposals and to discuss with the negotiation team

FDLE’s needs and concerns. The negotiation process was

conducted in accordance with the terms of the ITN and the

requirements of S ection 287.057(3), Fl orida Stat utes .

11. After the negotiations were completed and as a result

of the information gained through these negotiation meetings,

FDLE prepared and issued Addendum 7 to the ITN , which requested

a BAFO from each vendor.

12. Addendum 7 modified certain provisions of Section 6 of

the ITN.

13. FDLE received and evaluated the BAFOs submitted by

Petitioner and Intervenor. Mark Scharein, Kevin Patten, and

Larry Shaw, FDLE employee s and members of the FDLE negotiation

team, prepared a memorandum to Mark Zadra, Chief of

Investigations for the Office of Statewide Intelligence,

providing a recommendation for award to Intervenor and the

rationale for that recommendation. Zadra concurre d , and FDLE

ultimately decided to award the contract to Intervenor and

issued an official intent to make such an award.

Alleged Deficiencies of Intervenor BAFO

14. Petitioner’s protest with respect to Intervenor’s

BAFO centers around two provisions of t he ITN – section 6 (C)(7)

and section 6 (F)(1).

15. Sections 6 (C)(7) of the ITN was revised in Addendum

7. Section 6 (F)(1) was not, however, revised in Addendum 7.

16. Section 6 (C)(7) of the ITN, as revised by Addendum 7,

provides:

The solution s hall include proactive

notification capability. This will include

flagging subjects individually or batch via

user interface or FTP site. The system will

match these records against new public

records data at regular intervals (such as

each 24 hours). N otifications will then be

sent on matching records to the user with

this new information. This capability will

be made available to selected users as

enabled by an FDLE administrator.

17. Intervenor’s response in its BAFO to Section 6 (C)(7)

provides:

This functionality, which describes our

Accurint Watchdog service, has not been

previously discussed and is outside of the

scope of requirements in the original ITN.

However, this functionality is available for

an additional fee and [Intervenor] is ope n

to negotiating supplying this service.

This response occurred during the negotiation phase and is

included in the final, firm price proposal submitted by

Intervenor. FDLE properly considered that price proposal

binding and used that firm price propos al in reaching its

determination that Intervenor offered the best value to the

state.

18. Section 6 (F)(1) of the ITN provided that “[t]he

system shall provide support structured as well as unstructured

(free - text) search capabilities.” This requirement in the ITN

was not altered by Addendum 7, and Intervenor’s BAFO response to

this requirement, the same response that was in its original

reply to the ITN, was not timely subjected to challenge.

BAFO Evaluation By FDLE

19. After FDLE received the BAFOs, t hey were reviewed by

FDLE personnel which then undertook a cost analysis to determine

which offer provided the best value to the state. The analysis

is memorialized in a memorandum dated March 7, 2006, and a

summary chart.

20. FDLE undertook the cost a nalysis fully cognizant of

its experience and knowledge of the existing system, its

experience with replacement contracts, and its reasonable

understandings with respect to future needs. As a first step in

the process, a comparison was made of the price o ffered by each

vendor as derived directly from their respective BAFO S .

21. Committed to paying no more than the amounts denoted

in the vendors’ BAFO price sheets, FDLE could move to final

negotiation with Petitioner in the event that Intervenor refused

to contract for the price listed in its pricing sheet.

22. The second step in FDLE’s pricing analysis was

consideration of implementation costs that are internal to FDLE.

23. FDLE had asked both vendors to identify the amount of

time and effort requir ed of FDLE for development and

implementation of their respective systems. Utilizing this

information provided by the vendors, the implementation costs

were calculated by analyzing the implementation requirements in

terms of man - hours as provided by the v endors. FDLE multiplied

the man - hours provided by the vendors with the average salary

rates of the various FDLE employees needed to complete

implementation of the system. As a result of this exercise,

FDLE concluded that the implementation costs to FDLE for

Petitioner’s system was $340,000. The implementation costs to

FDLE for Intervenor’s system was $0.

24. In the third step of FDLE’s exercise to determine the

real cost impacts of contracting with the respective vendors,

FDLE considered the cost of p urchasing licenses for additional

users over the full term of the contract. Based on experience,

FDLE personnel determined an additional 1000 users could be

reasonably anticipated over the next ten (10) years.

Accordingly, the original ITN called for pri cing based on a

minimum of 1000 users.

25. Section 6 (L) of the ITN specifically states that FDLE

shall have the option to acquire additional licenses for

additional users. The vendors were informed during negotiations

that FDLE would like to know the price for additional users

beyond 1000. Neither vendor was informed how many more users

FDLE anticipated adding over the next ten years. Both vendors

knew, however, that FDLE currently has demand for additional

users to its system. Both vendors were tol d that FDLE would

likely add more users to the system.

26. FDLE was seeking a system capable of supporting at

least 1000 simultaneous users and with the option of purchasing

rights for additional users who could use the system

simultaneously. Opportuni ty for Petitioner was available to

find out the historical growth rate of users during the

negotiation phase if that was information of interest to that

vendor.

27. Prior to issuance of the ITN, FDLE informed potential

vendors that it was reasonable to assume that the number of

users would grow beyond 1000 and that FDLE could have 1500 users

over time. Petitioner received that pre - ITN information which

was made public as part of a request for information relating to

the ITN.

28. Based on FDLE’s exper ience, it is common for a

software vendor to be required to offer a price per user without

any idea as to how many licenses for users the state will

eventually need.

29. Petitioner offered a price of $9,000,000 based on 1000

users, with a price of $1400 for each additional user over the

first 1000. By contrast, Intervenor offered a price of

$10,379,658.62 based on 1500 users, with a price of $1028 for

each additional user over the first 1000 -- a forty (40) percent

difference in favor of Intervenor for the price of each

additional user.

30. Without even considering the 500 additional users

included in Intervenor’s BAFO, FDLE determined that Intervenor

provided a lower total cost to FDLE by almost one million

dollars. Further, if an additional 500 us ers are included in

the analysis, the price difference spreads to as much as five

million dollars in favor of Intervenor.

31. FDLE appropriately and properly concluded that

Intervenor offered the best overall value to the state.

CONCLUSIONS OF LAW

32. The Division of Administrative Hearings has

jurisdiction over this subject matter and the parties to this

action pursuant to Section 120.57(1) and (3), Florida Statutes.

33. Petitioner has standing to challenge FDLE’s proposed

action to award the subj ect contract to Intervenor.

Additionally, Intervenor has standing to intervene in this

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

34. As the party challenging FDLE’s proposed action,

Petitioner has the burden of proof in this proceeding.

§ 120.57(3) (f), Fla. Stat.

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

relevant part:

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 d etermine

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

cl early erroneous, contrary to competition,

arbitrary, or capricious.

36. Petitioner has the burden of showing that FDLE’s

intent to negotiate a contract for Information and Technology

Services t o Support Domestic Security and Other Criminal

Investigatio ns with Intervenor is contrary to the agency’s

governing statutes, rules or policies, or the ITN

specifications. The proposed award will not be overturned so

long as the decision is based on an honest exercise of

discretion. Scientific Games, Inc. v. Dit tler Brothers, Inc. ,

586 So. 2d 1128, 1131 (Fla. 1st DCA 1991).

37. After an agency evaluates and ranks responsive replies

to an ITN against all evaluation criteria set forth in the ITN,

the agency must select, based on the ranking, one or more

vendors with which to negotiate. § 287.057 (3)(b), Fla. Stat.

(2005). After the negotiations are conducted, the agency must

award the contract to the vendor that provides the best value to

the state. Id.

38. Best value is defined by statute and means “the

high est overall value to the state based on objective factors

that include, but are not limited to, price, quality, design,

and workmanship.” § 287.012 (4), Fla. Stat. (2005).

39. “Absent a showing that Respondent . . . was not

engaged in an honest exercise to obtain the best value for the

state, Respondent . . . was free to use whatever criteria in the

negotiation phase that it chose.” M/A - Com, Inc., v. Dept. of

Management Services , DOAH Case No. 04 - 1091BID (May 25, 2004).

40. The main thrust of Petitio ner’s protest, that

Intervenor’s response to two technical requirements,

unstructured (free - text) search capability, from the ITN, and

proactive notification capability, from the BAFO, were non -

responsive or not in compliance with the ITN specifications, i s

not supported by the substantial competent evidence elicited in

this proceeding.

RECOMMENDATION

Based upon the Findings of Fact and Conclusions of Law, it

is

RECOMMENDED:

That Respondent enter a final order denying Petitioner's

protest.

DONE AND ENTERED this 1 2 th day of July , 2006 , in

Tallahassee, Leon County, Florida.

S

DON W. DAVIS

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 3239 9 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 12 th day of July , 2006 .

COPIES FURNISHED :

John P. Booth, Esquire

Department of Law Enforcement

P ost Office Box 1489

Tallahassee, Florida 32302 - 1489

J. Stephen Menton, Esquire

Rutledge, Ecenia, Purnell & Hoffman, P.A.

Post Office Box 551

Tallahassee, Florida 32302

W. Robert Vezina, III, Esquire

Vezina, Lawrence & Piscitelli, P.A.

413 East Park Aven ue

Tallahassee, Florida 32301

Michael Ramage, General Counsel

Florida Department of Law Enforcement

Post Office Box 1489

Tallahassee, Florida 32302

Gerald Bailey, Commissioner

Florida Department of Law Enforcement

Post Office Box 1489

Tallahassee, Flor ida 32302

NOTICE OF RIGHT TO S UBMIT 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.