08-004442BID Morales Moving And Storage Company, Inc. vs. Miami-Dade County School Board Status: Closed Recommended Order on Friday, May 1, 2009.

Summary: Petitioner failed to demonstrate that it should not be found ineligible and not be disqualified by Respondent for the invitation to bid. Recommend dismissal of protest.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MORALES MOVING AND STORAGE )

COMPANY, INC., )

)

Petitioner, )

)

vs. ) Case No. 08-4442BID

)

MIAMI-DADE COUNTY SCHOOL BOARD, )

)

Respondent. )

________________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case

on January 22 and 23, 2009, in Miami, Florida, before

Errol H. Powell, an Administrative Law Judge of the Division of

Administrative Hearings.

APPEARANCES

For Petitioner: Philip S. Vova, Esquire

The Law Office of Philip S. Vova, P.A.

4000 Hollywood Boulevard, Suite 375 South

Fort Lauderdale, Florida 33021

For Respondent: Stephen L. Shochet, Esquire

Miami-Dade County School Board

1450 Northeast Second Avenue, Suite 400

Miami, Florida 33132

STATEMENT OF THE ISSUE

The issue for determination is whether the intended action

by Respondent to disqualify Petitioner from eligibility for

award of the Invitation to Bid No. 062-HH10 — Relocation of

Furniture, Fixtures and Equipment — was improper.

PRELIMINARY STATEMENT

By registered letter dated August 14, 2008, Miami-Dade

County School Board (Respondent) notified Morales Moving and

Storage Company, Inc. (Petitioner), that, even though Petitioner

was in the group of low bidders for the Invitation to Bid (ITB)

No. 062-HH10 — Relocation of Furniture, Fixtures and Equipment

(FF&E), Petitioner was not being considered for the award of the

contract because Petitioner was non-responsive. Further,

Respondent indicated that Petitioner was non-responsive on the

basis of “Special Condition #5 – Reference/Qualifications,”

which provides in pertinent part: “Bidders who, in the past

three years, have billed the School Board for work not actually

performed, or who have charged amounts materially in excess of

the contract unit prices, may be determined to be ineligible for

award under this Bid.” Petitioner timely filed a Petition of

Protest, protesting the intended action by the Respondent to

disqualify Petitioner from the award of the contract for ITB No.

062-HH10, Relocation of FF&E. On September 12, 2008, this

matter was referred to the Division of Administrative Hearings.

The parties waived the 30-day requirements. Prior to

hearing, the parties filed a Joint Pre-hearing Stipulation,

which included limited admitted facts.

At hearing, Petitioner presented the testimony of four

witnesses. Respondent did not present the testimony of any

witnesses. The parties entered seven joint exhibits (Joint

Exhibits numbered 1-7) into evidence.

A transcript of the hearing was ordered. At the request of

the parties, the time for filing post-hearing submissions was

set for 20 days following the filing of the transcript. The

Transcript, consisting of one volume, was filed on March 4,

2009. The parties' post-hearing submissions were due on or

before March 24, 2009. Subsequently, Petitioner requested

additional time in which to file post-hearing submissions, to

which Respondent did not object. Petitioner’s request was

granted. The parties timely filed post-hearing submissions,

which have been considered in the preparation of this

Recommended Order.

FINDINGS OF FACT

1. No dispute exists that, at all times material hereto,

Respondent was a duly-constituted School Board, with the duty to

operate, control and supervise all free public schools within

the school district of Miami-Dade County, Florida, pursuant to

Article IX, Section 4(b) of the Florida Constitution.

2. Respondent issued ITB No. 062-HH10, Relocation of FF&E.

The purpose of ITB No. 062-HH10, Relocation of FF&E is, among

other things, to obtain multiple providers for moving,

relocation, and installation services of Respondent’s FF&E.

Bids were accepted until 2:00 p.m. on August 5, 2008.

3. ITB No. 062-HH10, Relocation of FF&E contains a section

titled “Instruction to Bidders,” which provides in pertinent

part:

II. Submitting of Bids

* * *

D. Public Entity Crimes. Section

287.133(2)(a), Florida Statute [sic]. A

person who has been placed on the convicted

vendor list following a conviction for a

public entity crime may not submit a bid on

a contract to provide goods or services to a

public entity . . . may not be awarded or

perform work as a contractor, supplier,

subcontractor, or consultant under a

contract with any public entity, and may not

transact business with any public entity in

excess of the threshold amount provided in

Section 287.017, for CATEGORY TWO for a

period of 36 months from the date of being

placed on the convicted vendor list.

(emphasis in original)

4. ITB No. 062-HH10, Relocation of FF&E contains a

“Special Conditions” section. Paragraph numbered 2 of the

Special Conditions, titled “Award,” provides in pertinent part:

The School Board of Miami-Dade County,

Florida [Respondent], will award the

contract to a maximum of five (5) lowest

responsive, responsible bidders who offer

the total low bid for all items. . . M-DCPS

[Respondent] reserves the right, before

awarding this contract, to require bidders

to submit their qualifications. Bidders

must meet all specifications and

requirements of this bid to be considered

for award.

Successful vendors will be considered pre-

qualified Contractor(s) and will be invited

to participate in the quoting process for

each relocation project. The Contractor

offering the lowest quote for each

relocation project, complying in full with

all requirements, shall be awarded the

project. . . .

5. Paragraph numbered 5 of the Special Conditions, titled

“References/Qualifications,” provides in pertinent part:

Bidders who, in the past three years, have

billed the School Board [Respondent] for

work not actually performed, or who have

charged amounts materially in excess of the

contract unit prices, may be determined to

be ineligible for award under this Bid.

6. Respondent’s “Buyer” indicated on ITB No. 062-HH10,

Relocation of FF&E is Barbara D. Jones, Executive Director of

the Procurement Management Services (PMS).

7. Since approximately 1998, Petitioner had been a

provider of FF&E relocation services to Respondent.

8. For the past five years, Respondent had awarded bids

regularly to Petitioner.

9. Petitioner’s owner is Rene Morales. Petitioner,

through Mr. Morales, is very familiar with Respondent’s bidding

process and documents.

10. Prior to ITB No. 062-HH10, Relocation of FF&E,

Petitioner had submitted a bid for ITB No. 062-EE10, Relocation

of FF&E, as a provider of FF&E relocation services. Bids were

accepted until 2:00 p.m. on July 14, 2005. Respondent awarded

Petitioner the contract. The term of the contract was for two

(2) years from the date of the award. Ms. Jones was also

indicated as Respondent’s buyer.

11. No dispute exists that, during the performance period

of ITB No. 062-EE10, Relocation of FF&E, Petitioner performed

some legitimate moves and properly billed Respondent for those

moves.

12. However, in or around February or March 2007,

Respondent’s employees in its FF&E Department, who were charged

with administering the FF&E relocation program, devised a scheme

to obtain payment for work that was not performed. At the

request of the FF&E employees, certain of Respondent’s vendors,

who were performing relocation of FF&E services, would submit

lump-sum relocation service quotations for moves, which did not

actually occur, at a certain cost, i.e., $6,400.00; and those

particular employees in the FF&E Department would designate

certain persons to whom the participating vendor would pay a

certain amount, i.e., $5,200.00. The designated person would be

included on the quotation documents, but, in actuality was not

an employee of the participating vendor. Respondent would pay

the lump-sum cost quoted; the participating vendor would pay the

designated person; and the participating vendor would retain the

balance, i.e., $1,200.00, for itself.

13. The FF&E Department submitted the required paperwork

to Respondent’s PMS for payment of the relocation services

quotations. Ms. Jones, testified that PMS relied upon the FF&E

Department for the correctness of the paperwork submitted, and

that, therefore, PMS accepted the paperwork, including purchase

orders, submitted by the FF&E Department without questioning the

validity of the paperwork. Her testimony is found to be

credible. Ms. Jones signed the purchase orders, authorizing

payment. PMS issued payment for the purchase orders based upon

the paperwork submitted by the FF&E Department.

14. No dispute exists that Respondent’s employees in the

FF&E Department participated in the scheme and committed illegal

acts.

15. Beginning in March 2007, the employees at the FF&E

Department requested Petitioner to submit a number of lump sum

bid quotations, i.e., $6,400.00, for FF&E relocation services,

with a designated person named. However, no FF&E relocation

services were involved. Petitioner complied with the requests

on at least five (5) separate occasions in 2007.

16. Petitioner’s lump-sum bid quotations were accepted by

the employees at the FF&E Department. An Award Letter/Work

Order (AL/WO) for each quotation was issued to Petitioner by the

employees at the FF&E Department—AL/WO N1943E; AL/WO N1855E;

AL/WO N1940E; AL/WO N2066E; and AL/WO N2065E.

17. The employees at the FF&E submitted the paperwork to

PMS for payment of the lump-sum quotations. Ms. Jones signed

the purchase orders submitted by the employees of the FF&E

Department, authorizing payment. PMS issued payment to

Petitioner for the lump-sum purchase orders of $6,400.00 each,

based upon the paperwork submitted by the FF&E Department.

Petitioner paid the designated person on each bid quote

$5,200.00 and retained the remainder.

18. Mr. Morales, testified at hearing. He testified that,

in 2007, Petitioner was not receiving payment for services that

had been performed under ITB No. 062-EE10, Relocation of FF&E

because the director of the FF&E Department, Will Lopez, was

absent due to illness; that Petitioner was owed approximately

$100,000.00 under ITB No. 062-EE10, Relocation of FF&E, but was

not receiving payment; and that he (Mr. Morales) was being

informed by the FF&E Department that FF&E payment documents

required the approval of Mr. Lopez. Furthermore, Mr. Morales

testified that, at the time of the first request for the lump

sum quotation, he (Mr. Morales) was informed that the designated

person would perform the paperwork that was needed for

Petitioner to receive the payments. Mr. Morales’ testimony is

found to be credible. An inference is drawn and a finding of

fact is made that Mr. Morales agreed to submit the lump sum

requests in order to obtain monies for Petitioner, which, at

that time, Petitioner was not receiving from Respondent even

though Respondent had performed services under ITB No. 062-EE10,

Relocation of FF&E.

19. Additionally, Mr. Morales testified that, when he

submitted the requested lump-sum bid quotations in 2007, that

was the first time that he had observed the requests containing

a designated person; and that, when he questioned the

designation, the employee at the FF&E Department informed him

that the FF&E Department needed assistance with the paperwork

required to process payments and that was the person who would

provide such assistance. His testimony is found to be credible.

20. Mr. Morales further testified that, in all the other

jobs, he was required to place the name of his crew chief, or an

alternate person on the documents he submitted to the FF&E

Department in order not to delay payment; and that the crew

chief or alternate person would report to the school site at

which the school coordinator would inform the crew chief as to

what was to be done. However, Mr. Morales testified that, for

the 2007 lump sum quotations, time sheets were signed by the

crew chief, not the designated person; that no crew chief was

used for any of the relocation jobs; that he (Mr. Morales) would

pay the designated person, as an employee, based upon the hours

worked by the designated person at the rate of $32.00 per hour;

and that the balance of the money received from Respondent was

to be retained by him (Mr. Morales) for administration costs.

Mr. Morales also testified that for one of the designated

persons, Petitioner did not pay any monies to the designated

person, but to someone else. Mr. Morales’ testimony is found to

be credible, except as to paying monies for hours worked; as to

the designate person being employed by Petitioner for relocation

services; and as to administration costs representing the

balance of the monies retained by Petitioner.

21. No furniture relocation services were performed by

Petitioner regarding AL/WO N1943E; AL/WO N1855E; AL/WO N1940E;

AL/WO N2066E; and AL/WO N2065E.

22. A finding of fact is made that Petitioner knowingly

participated in the scheme with Respondent’s employees at the

FF&E Department.

23. Ms. Jones filed a complaint with the Miami-Dade

Schools Police Department (M-DCPD), which performed an

investigation of the scheme. The investigation took many

months. Mr. Morales cooperated with the M-DCPD.

24. Ms. Jones included Special Condition, paragraph

numbered 5 in ITB No. 062-HH10, Relocation of FF&E because of

the scheme.

25. Special Conditions, paragraph numbered 5, was applied

to all vendors which had participated in the scheme.

26. Petitioner was in the group of low bidders for ITB No.

062-HH10, Relocation of FF&E. However, Petitioner was not

considered for the award of the contract due to being non-

responsive as a result of being ineligible because of Special

Condition, paragraph numbered 5.

27. All of the bidders for ITB No. 062-HH10, Relocation of

FF&E, who participated in the scheme, were found to be non-

responsive as a result of Special Condition, paragraph numbered

5.

28. Petitioner was not convicted of a criminal offense

involving the scheme.

29. At all times material hereto, Petitioner was not

placed on the convicted vendor list.

30. By registered letter dated August 14, 2008, Respondent

notified Petitioner that, even though Petitioner was in the

group of low bidders for ITB No. 062-HH10, Relocation of FF&E,

Petitioner was not being considered for the award of the

contract because Petitioner was non-responsive. Further,

Respondent indicated that Petitioner was non-responsive on the

basis of Special Condition, paragraph numbered 5.

31. Petitioner timely filed a Petition of Protest,

protesting the intended action by the Respondent to disqualify

Petitioner from the award of the contract for ITB No. 062-HH10,

Relocation of FF&E.

CONCLUSIONS OF LAW

32. The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and the

parties thereto pursuant to Section 120.569 and Subsections

120.57(1) and (3), Florida Statutes (2008).

33. Subsection 120.57(3), Florida Statutes (2008),

provides in pertinent part:

(f) 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. . . .

34. Petitioner, as the protestor, has the burden of proof.

35. Petitioner must sustain its burden of proof by a

preponderance of the evidence. Department of Transportation v.

J.W.C. Co., Inc. , 396 So. 2d 778, 787 (Fla. 1st DCA 1981);

§ 120.57(1)(j), Florida Statutes (2008).

36. The hearing conducted by the undersigned was a de novo

hearing. § 120.57(3)(f), Florida Statutes (2008). The

definition of a de novo hearing in the context of the instant

case is found in State Contracting and Engineering Corporation

v. Department of Transportation , 709 So. 2d 607, 609 (Fla. 1st

DCA 1998):

In this context, the phrase " de novo

hearing" is used to describe a form of

intra-agency review. The [administrative

law] judge 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.

(citations omitted)

37. Not only must Petitioner show that Respondent’s

proposed action is contrary to Respondent’s governing statutes,

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

Petitioner must also show, pursuant to the standard of proof,

that Respondent’s proposed action is clearly erroneous, contrary

to competition, arbitrary, or capricious.

38. Petitioner failed to timely challenge the

specifications and, therefore, could not challenge the

specifications at hearing. Hence, any challenge presented at

this juncture is limited to substantive application of the

specifications. 1

39. A decision is considered to be clearly erroneous when,

although evidence supports the decision, after review of the

entire record, the tribunal is left with the definite and firm

conviction that a mistake has been committed. U.S. v. U.S.

Gypsum Co. , 333 U.S. 364, 395, 68 S. Ct. 525, 542, 92 L. Ed.

746, 766 (1948). An agency’s decision is arbitrary if it is not

supported by facts or logic. See Agrico Chemical Company v.

State Department of Environmental Regulation , 365 So. 2d 759,

763 (Fla. 1st DCA 1978). An agency’s action is capricious if

the agency takes the action without thought or reason or with

irrationally. Id. An agency decision is contrary to

competition if it unreasonably interferes with the objectives of

competitive bidding. See Webster v. Belote , 103 Fla. 976, 138

So. 721, 723-34 (1931).

40. An agency has wide discretion when it comes to

soliciting and accepting bids for public contracts, 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 persons may disagree. Liberty County

v. Baxter’s Asphalt and Concrete, Inc. , 421 So. 2d 505, 507

(Fla. 1982); Baxter’s Asphalt and Concrete, Inc. v. Department

of Transportation , 475 So. 2d 1284, 1287 (Fla. 1st DCA 1985);

Capeletti Brothers, Inc. v. Department of General Services , 432

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

41. The evidence demonstrates that Petitioner was one of

the five lowest bidders, which had submitted bids on August 5,

2008, for ITB No. 062-HH10, Relocation of FF&E.

42. The evidence demonstrates that Respondent’s employees

in its FF&E Department participated in the scheme.

43. The evidence demonstrates that Petitioner knowingly

participated in the scheme on at least five separate occasions

during the time period that Petitioner was rendering services to

Respondent under ITB No. 061-EE10, Relocation of FF&E.

Furthermore, the evidence demonstrates that Petitioner, within

the past three years prior to submitting its bid for ITB No.

062-HH10, Relocation of FF&E, had billed Respondent for work not

actually performed.

44. The evidence demonstrates that Petitioner falls within

the requirements of Special Condition, paragraph numbered 5, of

ITB No. 062-HH10, Relocation of FF&E.

45. The evidence demonstrates that Respondent applied

Special Condition, paragraph numbered 5, of ITB No. 062-HH10,

Relocation of FF&E to Petitioner and all bidders that

participated in the scheme. Furthermore, the evidence

demonstrates that Respondent considered Petitioner and all

bidders that participated in the scheme as ineligible and

disqualified.

46. The evidence demonstrates that Petitioner failed to

meet all specifications and requirements of ITB No. 062-HH10,

Relocation of FF&E to be considered by Respondent for the award

of the bid.

47. Based on the totality of the evidence presented,

Petitioner failed to meet its burden. The evidence fails to

demonstrate that Respondent’s intended action to find Petitioner

ineligible and disqualify Petitioner, under Special Condition,

paragraph numbered 5, for award of the contract for ITB No. 062-

HH10, Relocation of FF&E is in contradiction to any of

Respondent’s statutory or rule provisions, or policies, or

specifications. Furthermore, the evidence fails to demonstrate

that Respondent’s intended action to find Petitioner ineligible

and disqualify Petitioner, under Special Condition, paragraph

numbered 5, for award of the contract for ITB No. 062-HH10,

Relocation of FF&E is clearly erroneous, contrary to

competition, arbitrary, or capricious.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Miami-Dade County School Board enter a

final order dismissing Morales Moving and Storage Company,

Inc.’s Petition of Protest.

DONE AND ENTERED this 1st day of May 2009, in Tallahassee,

Leon County, Florida.

___________________________________

ERROL H. POWELL

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 1st day of May, 2009.

ENDNOTE

1/ A ruling to this effect was made, prior to hearing, by this

Administrative Law Judge by Order Regarding Striking and/or

Limiting Portions of Petition of Protest issued on November 13,

2008.

COPIES FURNISHED:

Philip S. Vova, Esquire

The Law Office of Philip S. Vova, P.A.

4000 Hollywood Boulevard, Suite 375 South

Fort Lauderdale, Florida 33021

Stephen L. Shochet, Esquire

Miami-Dade County School Board

1450 Northeast Second Avenue, Suite 400

Miami, Florida 33132

Alberto M. Carvalho, Superintendent

Miami-Dade County School District

1450 Northeast Second Avenue, No. 912

Miami, Florida 33132-1308

Deborah K. Kearney, General Counsel

Department of Education

Turlington Building, Suite 1244

325 West Gaines Street

Tallahassee, Florida 32399-0400

Dr. Eric J. Smith, Commissioner

Department of Education

Turlington Building, Suite 1514

325 West Gaines Street

Tallahassee, Florida 32399-0400

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.