08-000164BID Laboratory Corporation Of America vs. Department Of Revenue Status: Closed Recommended Order on Friday, June 13, 2008.

Summary: The Department`s award of the contract was not arbitrary, capricious, or contrary to competition.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LABORATORY CORPORATION OF )

AMERICA, )

)

Petitioner, )

)

vs. ) Case No. 08-0164BID

)

DEPARTMENT OF REVENUE, )

)

Respondent, )

and )

)

ORCHID CELLMARK, INC., )

)

Intervenor. )

)

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing was conducted in this

case on April 21 through 23, 2008, in Tallahassee, Florida,

before Administrative Law Judge R. Bruce McKibben of the

Division of Administrative Hearings.

APPEARANCES

For Petitioner: Jack Fernandez, Esquire

Nathan Berman, Esquire

Zuckerman Spaeder, LLP

101 East Kennedy Boulevard, Suite 1200

Tampa, Florida 33602

William E. Williams, Esquire

Michael E. Riley, Esquire

Amy W. Schrader, Esquire

Gray Robinson, P.A.

301 South Bronough Street, Suite 600

Tallahassee, Florida 32301

For Respondent: Cindy Horne, Esquire

William Nickell, Esquire

Department of Revenue

Post Office Box 6668

Tallahassee, Florida 32399-6668

For Intervenor: Charles A. Guyton, Esquire

Teri L. Donaldson, Esquire

Gary P. Timin, Esquire

Squire, Sanders & Dempsey, LLP

215 South Monroe Street, Suite 601

Tallahassee, Florida 32301

STATEMENT OF THE ISSUES

This case is a bid protest filed by Petitioner, Laboratory

Corporation of America Holdings ("LabCorp"), to contest the

award of a contract by Respondent, Department of Revenue

("Department"), to Intervenor, Orchid Cellmark, Inc ("Orchid" or

sometimes "OCI"). The issues are whether the Orchid bid was

responsive to the bid criteria, whether Orchid is a responsible

bidder, and whether the Department's award of the bid to Orchid

should be deemed clearly erroneous, contrary to competition,

arbitrary or capricious.

PRELIMINARY STATEMENT

On or about August 31, 2007, the Department issued Request

for Proposal No. 07/08-9 AD (the "RFP"). Four bids were

received in response to the RFP, and a decision to award the

contract to Orchid was published on December 4, 2007. LabCorp

timely filed a protest with the Department, and a formal

administrative hearing was conducted as set forth above.

At the final hearing, LabCorp 's Exhibits 1 through 6, 24,

25, 27 through 35, and 42 were admitted into evidence. LabCorp

called four witnesses: Laurie Neff, director of Customer

Service for Orchid; Dr. Gary Stuhlmiller, director of DNA

testing for LabCorp; Dr. George Maha, LabCorp laboratory

director; and Lisa Hartley, business manager for LabCorp's DNA

testing division. The Department Exhibits 1 through 6 were

admitted into evidence. The Department called four witnesses:

Harold Bankirer, deputy director of the Department's Child

Support Enforcement (CSE) Program; John Kinneer, government

analyst in the Department's Purchasing Office; Martin Ehlen,

government operations consultant for the Department's CSE

Program; and Carey Abney, CSE program administrator for the

Department. Orchid Exhibits 1, 2, 5, 13, and 15 through 18 were

admitted into evidence. Orchid called five witnesses: John

Rader, Bid Response Team supervisor; Teresa Northrop; Anna

Longuski, Orchid's director of Operations; Dr. Marco Scarpetta,

manager of Orchid's Paternity Division and also its laboratory

director; and Lori Neff. The parties also stipulated to 19

joint exhibits, each of which was admitted into evidence without

objection.

The parties requested and were allowed 14 days from the

filing of the transcript at DOAH to file proposed recommended

orders. The Transcript was filed on May 9, 2008. Each party

timely filed Proposed Findings of Fact and Conclusions of Law,

and each submission was duly considered in the rendering of this

Recommended Order. Also, because a large portion of the

testimony for consideration was presented in the form of

deposition transcripts, the parties requested an opportunity to

file objections concerning such testimony. To accommodate this

request, the parties were allowed a period of ten days after

filing of the proposed recommended orders in which to submit

objections to any portions of the testimony relied upon by

another party to support a finding of fact. Orchid timely filed

objections to various portions of the deposition transcripts

relied upon by Petitioner. A ruling on those objections is set

forth below:

Objection No. 1: Orchid objects to the use of

Dr. Scarpetta's deposition transcript on the basis that it is

cumulative testimony. That objection could have been raised at

the time the transcripts were offered into evidence at the final

hearing. By not doing so, the objection is waived.

Objection No. 2: Orchid objects to three separate series

of questions posed to Dr. Scarpetta during his deposition.

However, no objections to those questions were raised when the

deposition was taken. And, while it is true that Dr. Scarpetta

did not use the word "inaccurate" in his description of the

errors in Orchid's proposal, he did acknowledge (using other

language) that some of the wording was not completely accurate.

The objection is denied.

Objection No. 3: Orchid objects to LabCorp's discussion of

testimony by Ms. Longuski during her deposition. Again, Orchid

did not object to the questions asked of Ms. Longuski at the

time of the deposition. LabCorp's conclusion that Ms. Longuski

knew that certain statements were inaccurate is correct.

Whether Ms. Longuski saw the inaccurate statements during her

review is not clear, however. The objection is denied, but the

testimony at issue has little weight on which to base a finding

of fact.

Objection Nos. 4, 5 and 6: Orchid objects to statements

from Scott Edmonds' deposition transcript as calling for

speculation and being irrelevant. Orchid did not object to the

questions asked of Mr. Edmonds during his deposition. Once

again, however, the testimony at issue is obviously speculative

in nature and will not support a finding of fact. It does show

Mr. Edmonds' state of mind during his review, but nothing more.

Objection No. 7: Orchid objects to statements from

Mayra Levenson's deposition on the grounds that the question is

compound, calls for speculation, and is vague and irrelevant.

An objection to the form of the question was raised during the

deposition. The objection is sustained.

FINDINGS OF FACT

Based on the oral and documentary evidence presented at the

final hearing and on the entire record of the proceeding,

including the Joint Pre-Hearing Stipulation of the parties, the

following Findings of Fact are made:

1. Petitioner, Laboratory Corporation of America Holdings,

is a national testing laboratory with over 1,700 company-owned

Patient Service Centers in the United States, including 176 in

Florida. LabCorp has an existing contract with the State of

Florida to provide Child Support Enforcement Genetic Testing

Services in Department Regions 2, 3, 4 and 5, as well as Manatee

County. These regions comprise the majority of the state.

LabCorp has a longer history of providing paternity testing

services using buccal swab collections (see discussion below)

than any other party bidding on the RFP.

2. Intervenor, Orchid Cellmark, Inc., is also a long-time

provider of genetic testing and has been providing genetic

parentage testing services since 1979. Orchid currently has a

contract with the Department to provide such services in two

areas of the state: Department Region 1 (comprising essentially

all of Florida panhandle) and Dade County. Orchid has

experience providing parentage services to governmental

entities, including the states of Ohio, Georgia and Michigan.

In its services to the State of Florida, Orchid has tested over

20,000 cases involving over 53,000 samples; it had zero

misreported results to the Department related to those cases.

3. Respondent, Department of Revenue, is the state agency

responsible for the CSE program. CSE is one of six programs

within the Department that interacts with clients on a one-to-

one basis. The Department, unlike many state agencies, is

organized using a business process model similar to the

structure used in commercial and industrial sectors. Tasks and

activities within the Department are aggregated from the bottom

to the top, where the executive director is found.

4. CSE became a function of the Department in 1994, moving

from the Department of Children and Families. The purpose of

the move was to emphasize collection of funds and to change from

a caseworker model to a business process model. As a result,

cases within CSE are handled by different offices or persons

depending on the nature of the activity being addressed within

that particular case, as opposed to having the entire case

handled by a single assigned caseworker.

5. CSE has five core processes: Case Management, Payment

Processing and Fund Distribution, Child Support Aid,

Establishment, and Compliance. CSE is organized into five

geographic regions, each of which has service sites where CSE

provides client services. One of the important services

provided in these regions is genetic testing which is used to

establish paternity. Inasmuch as the Department does not have

the personnel or wherewithal to perform genetic testing

internally, that function is contracted out to established

providers of such services.

6. CSE handles the establishment of the paternity process

up to the point of genetic testing before allowing its

contracted providers to perform the test. Once the test is

completed, CSE continues with its duties concerning CSE. Each

contracted provider of testing is responsible for the entire

testing process: collecting specimens, transfer of specimens to

a lab, maintaining chain of custody, conducting tests and

reporting results to the Department. Further, each testing

provider is responsible for seeing that a licensed phlebotomist

is present to take the sample from the Department's client.

Providers will not be paid if there are any failures during the

testing process.

7. On or about August 31, 2007, the Department put out the

RFP soliciting bids for genetic testing of clients and

associated persons within the CSE program. The contract period

runs from the contract execution date (or January 1, 2008,

whichever is later) until June 30, 2011, plus three optional

one-year renewals.

8. Bids from the following entities were received in

response to the RFP: Orchid, Labcorp, Paternity Testing

Corporation, and ReliaGene Technologies. 1/

9. Each of the four bids was reviewed upon submission to

determine whether they were responsive to the bid criteria.

Each was found to be responsive.

10. Thereafter, four Department employees designated as

"evaluators," each reviewed the four bids (or proposals). The

evaluators were: William Branch, Carey Abney, Mayra Levenson,

and Scott Edmonds. The bids were scored pursuant to points

assessed for each section of the RFP, as indicated in the table

below:

Maximum

Maximum Raw Weight Points

Technical Response Score Factor Possible

Understanding the Required

Services 5 20 100

Methodology Used for

Providing the Services 5 25 125

Management Plan for Providing

the Services 5 15 75

Experience and Qualifications 5 20 100

Cost Response 5 5 0 2 5 0

11. Based upon these evaluation criteria, the four

proposals were scored by the evaluators as follows:

LabCorp: Technical--306.25; Cost--250.00; Total--556.25

Orchid: Technical--368.75; Cost--241.94; Total--610.69

PTC: Technical--301.25; Cost--187.50; Total--488.75

ReliaGene: Technical--217.50; Cost--157.34; Total--374.84

12. LabCorp, whose cost proposal segment 2/ was deemed

superior to the other applicants, contests the total point

assignment to Orchid on several bases. Each of those will be

discussed below, but first a brief discussion of the underlying

service in the contract: DNA testing.

DNA Testing Versus Genetic Testing

13. DNA testing for human identity first became available

in the mid-to-late 1980s. DNA paternity testing began in

approximately 1990. Early DNA paternity testing contracts

bidded out by various states required DNA testing to be

performed on blood drawn from the putative parents and the child

for whom paternity was to be established. However, as the

science in this area improved, other testing methods became

available. At the present time, Florida requires paternity

testing to be done by way of polymerase chain reaction (PCR)

technology.

14. PCR technology allows laboratories to perform DNA

testing on a very small sample. This technology is utilized to

evaluate human epithelial or "buccal" cells drawn from the

inside of a person's cheek by use of buccal swabs. This process

eliminates the need to draw venous blood from the subjects,

expediting and easing the specimen collection process.

15. The purpose section of the RFP includes this language:

[CSE] is soliciting proposals for genetic

testing services through this Request for

Proposal for the purpose of conducting

genetic testing services for the Department

Program in child support cases throughout

Florida. The Genetic Testing provided by

the Provider is to conclusively determine

the paternity of a child when paternity has

not already been established. In certain

circumstances in which paternity may have

already been established, the court may

order genetic tests in order to assist with

its decision in a contested case.

16. The general instructions to the RFP include language

relating to misstatements made by vendors. The RFP states:

All information provided by, and

representations made by, the respondent are

material and important and will be relied

upon by the Buyer in awarding the Contract.

Any misstatement shall be treated as

fraudulent concealment from the Buyer of the

true facts relating to submission of the

bid. A misrepresentation shall be punished

under law, including, but not limited to

Chapter 817 of the Florida Statutes.

17. Chapter 817, Florida Statutes, relates to Fraudulent

Practices, including issuing statements under false pretenses

and fraud.

18. Relating to action that can be taken by the Department

if a vendor submits a proposal with misstatements, Section

1.4.18 of the RFP states:

FDOR will reject all proposals that FDOR

deems to have a material defect. A material

defect is any part of the proposed solution

that violates a mandatory requirement and

results in an unacceptable system or

unacceptable risk.

FDOR will reject proposals that fail to pass

the Selected Mandatory Items Compliance

Evaluation.

19. Further, Paragraph 16 of the General Instructions to

the RFP states:

Minor Irregularities/Right to Reject. The

Buyer reserves the right to accept or reject

any and all bids, or separable potions

thereof, and to waive any minor

irregularity, technicality, or omission if

the Buyer determines that doing so will

serve the State's best interests. The Buyer

may reject any response not submitted in the

manner specified by the solicitation

documents.

20. With that backdrop, LabCorp maintains that Orchid

provided false information in its bid proposal, thereby making

the proposal non-responsive to the RFP. LabCorp's position is

based on certain statements by Orchid concerning Orchid's

history in the field of genetic testing.

Orchid's History of DNA Testing

21. Orchid, in its proposal, states, "Orchid Cellmark,

Inc. (OCI), has been a leading provider of parentage and other

family relationship DNA analysis since 1979, and is one of the

largest providers of identity testing services in the world."

It also states, "OCI has a history of providing the highest

quality and most reliable DNA testing services identical to

those outlined in this [RFP] for over 27 years." In actuality,

DNA testing has not been in existence since 1979, a fact Orchid

freely conceded at final hearing. 3/ Orchid actually intended its

statement to suggest that Orchid had been involved in "genetic"

testing since 1979; that is also a true fact and more accurately

reflects Orchid's history.

22. None of the evaluators made any distinction between

DNA testing versus genetic testing when reviewing the competing

proposals. The phrase "DNA testing," in and of itself, does not

appear to have been material or relevant to the assignment of

scores by the evaluators under the scoring criteria.

23. LabCorp also contends that Orchid provided misleading

information by claiming to own a large number of testing sites

when, in fact, Orchid generally does not own testing sites that

it utilizes.

Orchid's Network of Approved Sites

24. In its proposal, Orchid stated several times that it

had a network of over 5,000 established, approved sites for

specimen collections. That network has been developed by Orchid

as it performed services under various contracts around the

United States (and Great Britain). Orchid does not own or lease

any of the sites. Nonetheless, Orchid's proposal states,

"Currently, OCI provides secure and convenient specimen

collection services at 127 of its own sites in addition to many

Service Centers designated by the State." Orchid distinguishes

the phrases "own sites" from "owned sites" by saying that the

former means a site used by them on a regular basis. This

definition is supported by the attachment to Orchid's proposal

which lists the various sites. That list includes not only

state office buildings, but also hospitals and other health

facilities. (In fact, Orchid lists as part of its 5,000 sites

some sites actually owned by LabCorp.) It is clear Orchid is

not claiming ownership of those places. Orchid's witnesses'

testimony concerning this issue is credible.

25. There was no representation by Orchid that it had

obtained state or other government approval for its intended

collection sites. Rather, the sites were "approved" internally

by Orchid, representing the fact that such sites had been used

by Orchid previously and found to be sufficient for their

purposes.

26. None of the evaluators based their scoring on whether

Orchid owned or leased a collection site versus simply having

access to them based on past relationships, nor did calling the

sites "approved" sway the evaluators.

Failure of Orchid to Identify Subcontracted Phlebotomists

27. LabCorp also contends that Orchid failed to properly

identify and provide information for all of its intended

subcontract-phlebotomists.

28. The RFP, at section 2.5, states:

Subcontractors may be used to perform work

under this Contract. If a proposer intends

to use subcontractors, the proposer must

identify in the proposal the following:

(a) complete name of the subcontractor,

(b) complete address of the subcontractor,

(c) type of work the subcontractor will be

performing,

(d) percentage of work the subcontractor

will be performing,

(e) evidence that the subcontractor holds a

valid business license,

(f) a written statement, signed by each

proposed subcontractor, that clearly

verifies that the subcontractor is committed

to render the services required by the

Contract.

A proposer's failure to provide this

information may cause the FDOR to consider

their proposal non-responsive and reject it.

The substitution of one subcontractor for

another may be made only at the direction

and prior written approval of the Contract

Manager for the FDOR. Subcontractors of the

Provider must adhere to the same level of

qualifications and standards as required of

the Provider.

29. LabCorp maintains that Orchid violated this provision

of the RFP by failing to identify its phlebotomists as

subcontractors and failing to provide all the required

information about such subcontractors.

30. LabCorp does most of its collections and testing using

its own employees. The company occasionally subcontracts with

other vendors to provide some services. LabCorp, in its

proposal, identified a subcontractor with whom it intended to do

business under the contract with the State of Florida. All

required information concerning that subcontractor was supplied

to the Department in LabCorp's response.

31. Conversely, Orchid has no employees who do actual

collecting of samples. Rather, Orchid relies on the services of

persons and entities which operate independently of Orchid.

Some of these independent collectors are located within the

network of 5,000 sites addressed by Orchid in its proposal. The

collectors for the contract at issue are yet to be named or will

be contracted once the award has become final. This arrangement

(using independent collectors for doing collections) has worked

well for Orchid during its historical operations and

particularly during its current contract with the State of

Florida in Region 1 and Dade County. Orchid intends to use the

same arrangement for collections under the contract currently in

dispute.

32. Orchid has an agreement it utilizes when hiring

third-party sample collectors. The agreement is part of the

Collector Manual employed by Orchid and distributed to many of

its collector sites.

33. In response to emails from the Department concerning

its current contract with Orchid, Orchid was asked whether a

certain collector was a subcontractor and, if so, to provide

certain required information about that collector. In response,

Orchid emailed the Department a list of collectors designated

either as a "Business" or as an "Independent Contractor."

Apparently Orchid's distinction between independent contractors

and businesses is that individuals (real persons as opposed to

business entities) are independent contractors. Since Orchid

does not employ subcontractors, this list was submitted in

response to the inquiry instead of a list of subcontractors

(which it does not have).

34. The term "subcontractor" is not defined in the RFP.

It is defined in Black's Law Dictionary as:

One who takes portion of a contract from

principal contractor or another

subcontractor. . . One who has entered

into a contract, express or implied, for

the performance of an act with the person

who has already contracted for the

performance. . . One who takes from the

principal or prime contractor a specific

part of the work undertaken by the principal

contractor.

35. Clearly, Orchid intends to allow some non-affiliated

persons to perform some portions of the contracted work under

the RFP. However, Orchid has always referred to such persons as

independent contractors, as evidenced by its response to a

Department email in March 2007. In its email, the Department

has asked Orchid whether a certain business entity (Accurate DNA

of Northeast Florida) was Orchid's subcontractor. In response,

Orchid provided a list of active specimen collectors that it

utilized at that time. The list contained the requisite

information (Federal ID number, address, name, etc.), but

identified the entities as either businesses or independent

contractors. The Department then thanked Orchid for providing

"your list of subcontractors."

36. The RFP addresses phlebotomists a number of times.

However, in only one section (5.1.2.2.5) does the RFP

specifically address "sub-contracted phlebotomists." In that

section, providers are directed to insure that both its

phlebotomists and subcontracted phlebotomists maintain a

professional appearance and demeanor while at a collection site.

37. It is impossible to distinguish the semantics in the

discussion between Orchid and the Department on this issue to

ascertain whether each was contemplating the same thing.

Nonetheless, in the RFP at issue, Orchid did not provide a list

of subcontractors, but the Department exercised its discretion

and deemed the proposal responsive nonetheless. 4/

38. The Department intended to designate specific

collection sites upon final award of the contract. Thereafter,

the winning bidder would be expected to propose additional sites

as necessary to provide services to meet the needs of the

Department. It is reasonable to presume that a bidder would not

be able to list all of its intended phlebotomists at the time of

the initial bid. And, the Department's deputy director for the

CSE program testified that the Department did not presume or

expect a vendor to list its intended phlebotomists.

39. In its review of proposals, the Department made a

determination as to each bidder's qualifications and experience.

It did not attempt to determine if one bidder was more qualified

and experienced than another. Rather, it simply determined that

a bidder had enough experience to carry out the terms of the

contract. Both Orchid and LabCorp were found to meet the

necessary experience threshold. A side-by-side comparison of

the relative experience and qualifications of Orchid versus

LabCorp was irrelevant to the award of the contract.

CONCLUSIONS OF LAW

40. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding pursuant to Sections 120.569 and 120.57(1), Florida

Statutes (2007). 5/

41. Subsection 120.57(3)(f), Florida Statutes, provides in

pertinent part:

In a protest to an invitation to bid or

request for proposals procurement, no

submissions made after the bid or proposal

opening which amend or supplement the bid or

proposal shall be considered. . . Unless

otherwise provided by statute, the burden of

proof shall rest with the party protesting

the proposed agency action. In a

competitive-procurement protest, other than

a rejection of all bids, proposals, or

replies, the administrative law judge shall

conduct a de novo proceeding to determine

whether the agency's proposed action is

contrary to the agency's governing statutes,

the agency's rules or policies, or the

solicitation specifications. The standard

of proof for such proceedings shall be

whether the proposed agency action was

clearly erroneous, contrary to competition,

arbitrary or capricious.

42. "A capricious action is one taken without thought or

reason or irrationally. An arbitrary decision is one not

supported by facts or logic." Agrico Chemical Co. v. Department

of Environmental Regulation , 365 So. 2d 759, 763 (Fla. 1st DCA

1978). In order to prove that an action is arbitrary,

capricious, contrary to competition or clearly erroneous, the

challenging party is held to a preponderance of the evidence

standard. Department of Transportation v. Groves-Watkins

Constructors , 530 So. 2d 912, 913-914 (Fla. 1988).

43. While Subsection 120.57(3)(f), Florida Statutes,

describes the standard of review as de novo , for the purposes of

a protest to a competitive procurement the courts have viewed

the hearing as a "form of inter-agency review." State

Contracting & Engineering Corp. v. Department of Transportation ,

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

Prop. Inc. v. State Department of Health and Rehabilitative

Services , 606 So. 2d 380 (Fla. 3d DCA 1992)). The object of a

bid dispute is to evaluate the action taken by the agency based

upon the information that was available to the agency at the

time it took such action. § 120.57(1), Fla. Stat.

44. Both Orchid and LabCorp submitted responsive bids to

the RFP which were reviewed by the Department. The review was

done logically, with forethought and reason. The review was

neither arbitrary nor capricious as carried out by the

evaluators. Even though LabCorp interpreted the RFP to require

a listing of all possible subcontracted phlebotomists, the fact

that neither Orchid nor the other bidders did so, is not

relevant. That fact alone did not make the bidding process

contrary to competition. There is no evidence that LabCorp lost

points or that Orchid gained points based on their different

approaches to the RFP.

45. Within the context of its review of proposals, the

Department is given the discretion to view projects as a whole

and to waive or ignore minor irregularities. A minor

irregularity is a variation from the bid invitation or proposal

terms and conditions, which does not affect the price of the bid

or give the bidder an advantage or benefit not enjoyed by other

bidders, or does not adversely affect the interests of the

governmental entity letting the bid. Liberty County v. Baxter's

Asphalt & Concrete, Inc. , 421 So. 2d 505 (Fla. 1982).

46. Orchid's failure to provide a list of subcontracted

phlebotomists in its proposal is, at worst, a minor irregularity

to the RFP requirements. But based upon its explanation (i.e.,

that it did not have any subcontracted phlebotomists to

identify), failure to provide the list does not even appear to

be an irregularity. Inasmuch as the Department reviewers did

not grant Orchid any special consideration or deny LabCorp

consideration based on how each bidder addressed this topic, the

issue is irrelevant. The Department did not act arbitrarily,

capriciously or contrary to competition by deeming Orchid's

proposal responsive to the RFP even without a list of

subcontractors.

47. The erroneous statements by Orchid concerning "DNA

testing" are clearly semantical and were not considered by the

reviewers when grading the proposals. The statements do not

constitute material misrepresentations. Orchid's witnesses'

testimony concerning the absence of any intent to mislead the

Department is credible. There was no fraud as contemplated in

Chapter 817, Florida Statutes.

48. It has long been recognized that a bid containing a

material variance is not acceptable. However, not every

deviation from the invitation to bid is material. "[A

deviation] is only material if it gives the bidder a substantial

advantage over the other bidders and thereby restricts or

stifles competition." Tropabest Foods, Inc. v. State Department

of General Services , 493 So. 2d 50, 52 (Fla. 1st DCA 1986).

"The test for measuring whether a deviation in a bid is

sufficiently material to destroy its competitive character is

whether the variation affects the amount of the bid by giving

the bidder an advantage or benefit not enjoyed by other

bidders." Harry Pepper & Associates, Inc. v. City of Cape

Coral , 352 So. 2d 1190, 1193 (Fla. 2d DCA 1977).

49. In the present case, Respondent's acceptance of

Orchid's bid was not based in any fashion on the supposed

variations and erroneous statements. The testimony of the

evaluators and decision makers is clear on that point.

50. Agencies enjoy wide discretion when it comes to

soliciting and accepting proposals, and an agency's decision,

when based upon an honest exercise of such discretion, will not

be set aside even where it may appear erroneous or if reasonable

people might disagree. Baxter's Asphalt & Concrete, Inc. v.

Department of Transportation , 475 So. 2d 1284, 1287 (Fla. 1st

DCA 1985). Capelletti Brothers, Inc. v State, Department of

General Services , 432 So. 2d 1359, 1363 (Fla. 1st DCA 1983).

DOAH has a history of upholding an agency's decision if such

action was within the realm of reasonableness. See , e.g. , M/A

Corn, Inc. v Department of Management Services, State Technology

Office , Case No. 04-1091BID (DOAH May 25, 2004); Hemophilia

Health Services, Inc. v. Agency for Health Care Administration ,

Case No. 04-0017BID (DOAH No. April 29, 2004); Paul Sierra

Construction, Inc. v. Southwest Fla. Water Management District ,

Case No. 02-3790BID (DOAH December 4, 2002); Just for Kids, Inc.

v. Palm County School Board , Case No. 03-2168BID (DOAH

November 7, 2003).

51. There is no evidence in the present case to suggest

that the Department acted in any fashion other than honestly and

fairly. The review of competing bids was carried out uniformly

as it related to each bidder. The award of the contract to

Orchid was based upon sound reasoning and rationale, as

explained by each reviewer.

52. Both Orchid and LabCorp submitted clearly viable bids.

Each was responsive and each was properly reviewed by the

evaluators. Either entity could perform the terms of the

contract, but the Department's decision to award Orchid, rather

than LabCorp, is a matter of discretion and was supported by the

facts. It was neither arbitrary, nor capricious, to select

Orchid as the prevailing bidder. The decision was not contrary

to competition. And nothing in the record indicates the

decision was clearly erroneous, Orchid's minor mistakes

notwithstanding.

53. A decision is considered to be clearly erroneous when

although there is evidence to support it, after review of the

entire record the tribunal is left with the definite and firm

conviction that a mistake has been committed. United States v.

U.S. Gypsum Co. , 333 U.S. 354, 395 (1948). The record in the

present case does not support the contention that any mistake

was made. Rather, despite some minor irregularities, the

decision reached by all four evaluators seems reasonable.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that a final order be entered by the Department

of Revenue upholding its award of the contract to Orchid.

DONE AND ENTERED this 13th day of June, 2008, in

Tallahassee, Leon County, Florida.

R. BRUCE MCKIBBEN

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 13th day of June, 2008.

ENDNOTES

1/ There is no dispute concerning timeliness of submission for

the subject bids. Neither Paternity Testing Corporation nor

ReliaGene protested the award of the bid to Orchid.

2/ For the cost proposals, LabCorp proposed $90.00 per case for

the entire term of the contract. Orchid proposed $96.00 per

case for the first three years of the contract, then $90.00 per

case for each successive year.

3/ See discussion in previous findings, above. Furthermore, the

first DNA case took place in the United Kingdom in 1984 using a

method called "multilocus probes," sometimes called a DNA

fingerprint. This method of DNA analysis never became widely

used and was replaced by the analysis of "single locus probes"

or "variable number tandem repeats" (VNTR). These VNTRs were

evaluated using the Restriction Fragment Length Polymorphism

(RFLP) method. The RFLP method is also not commonly used any

longer. Rather, both proposers in this case intend to utilize

the polymerase chain reaction of short tandem repeats method to

fulfill the contract requirements. This type of testing was

first described in scientific literature about 16 years ago.

4/ Actually, LabCorp was the only vendor of the four that read

the RFP to require a list of possible phlebotomists as

subcontractors.

5/ Unless otherwise stated, all references to Florida Statutes

shall be to the 2007 version.

COPIES FURNISHED :

Lisa Echeverri, Executive Director

Department of Revenue

The Carlton Building, Room 104

501 South Calhoun Street

Tallahassee, Florida 32399-0100

Marshall Stranburg, General Counsel

Department of Revenue

Post Office Box 6668

Tallahassee, Florida 32399-6668

Charles A. Guyton, Esquire

Teri L. Donaldson, Esquire

Gary P. Timin, Esquire

Squire, Sanders and Dempsey, LLP

215 South Monroe Street, Suite 601

Tallahassee, Florida 32301

William E. Williams, Esquire

Michael E. Riley, Esquire

Amy W. Schrader, Esquire

Gray Robinson, P.A.

301 South Bronough Street, Suite 600

Tallahassee, Florida 32301

Cindy Horne, Esquire

William Nickell, Esquire

Department of Revenue

Post Office Box 6668

Tallahassee, Florida 32399-6668

Jack Fernandez, Esquire

Nathan Berman, Esquire

Zuckerman Spaeder, LLP

101 East Kennedy Boulevard, Suite 1200

Tampa, Florida 33602

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

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

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.