13-000963BID Cooperative Services Of Florida, Inc. vs. Department Of Management Services Status: Closed Recommended Order on Wednesday, January 15, 2014.

Summary: Petitioner failed to show DMS' proposed action is either contrary to the DMS' governing statutes, rules, or policies, or the ITN specifications or that DMS' actions were clearly erroneous, contrary to competition or arbitrary or capricious.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

COOPERATIVE SERVICES OF FLORIDA,

INC.,

Petitioner,

vs. Case No. 13 - 0963BID

DEPARTMENT OF MANAGEMENT

SERVICES,

Respondent,

and

MINNESOTA MULTISTATE CONTRACTING

ALLIANCE FOR PHARMACY,

Intervenor.

/

RECOMMEN D ED ORDER

Pursuant to notice, a formal hearing was conducted in this

case on October 2 and 3 , 2013, in Tallahassee, Florida, before

June C. McKinney, Administrative Law Judge with the Division of

Administrative Hearings.

APPEARANCES

For Petitioner : Albert T. Gimbel, Esquire

Bryan Duke, Esquire

Messer Caparello, P.A.

2618 Centennial Place

Post Office B ox 15579

Tallahassee, Florida 32317

For Respo ndent: Clifford A. Taylor, Esquire

Matthew F. Minno, Esquire

Department of Management Services

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399

For I ntervenor: Justin Kaufman, Esquire

Minnesota Multistate Contracting Alliance

f or Pharmacy

50 Shelburne Avenue , Room 112

St. Paul, Minnesota 55155

STATE MENT OF THE ISSUE

The issue is whether the Department of Management ServicesÓ

(ÐRespondentÑ or ÐDepartmentÑ or ÐDMSÑ) decision to issue an

Intent to Award for a state term pharmaceutical Group Purchasing

Organization (ÐGPOÑ) contract to Minnesota Multistate

Contracting Alliance for Pharmacy (ÐMMCAPÑ) as contemplated in

its Invitation to Negotiate (ÐITNÑ) was contrary to DMSÓs

govern ing statutes, rules, policies, or ITN specifications, and

whether the DepartmentÓs decision was clearly erroneous,

contrary to competition, arbitrary or capricious.

PRELIMINARY STATEMENT

On November 1, 2011, the Department issued an ITN for the

selection of a pharmaceutical GPO to purchase ph armaceuticals on

behalf of the S tate of Florida.

Three ven dors responded to the ITN . Those vendors were

Managed H ealthcare Associates (ÐMHAÑ) , Cooperative Services of

Florida ( Ð CSFÑ or ÐPetitionerÑ ), and MMCAP (ÐvendorsÑ) . All

three vendors advanced to the negotiation stage.

The Notice of Intent to Award, showing the DepartmentÓs

intention to award the contract to MMCAP, was posted on

January 23, 2013. Petitioner timely filed its Notice of Protest

on January 25, 2013.

On February 4, 2013, CSF timely filed its Petition and

Fo rmal Written Protest (ÐPetitionÑ) challenging the Department Ós

intended decision, alleging that the intention to award the bid

to MMCAP was contrary to DMSÓs governing statutes, its rules,

policies, and the ITN specifications . Petitioner further

alleged t hat RespondentÓs analysis criteria were flawed.

On March 1, 2013, an opportunity to resolve the protest

meeting was held and an impasse was reached. On March 19, 2013,

the Petition challenging the DepartmentÓs Intent to Award was

referred to the Division of Administrative Hearings (Ð DOAH Ñ) .

The parties waived the 30 - day final hearing requirement

contained in section 120.57(3)(e), Florida Statutes. By O rder

dated March 29, 2013, MMCAP was permitted to intervene in the

proceedings.

On July 3, 2013, CSF f il ed an A mended Petition and Formal

Written Protest.

The parties stipulated to continu e the formal hearing twice

and the hearing was conducted on October 2 - 3, 2013, in

Tallahassee, Florida.

At hearing, the parties presented Joint Exhibits 1 and 2,

which we re admitted into evidence. Petitioner presented four

witnesses: Robert Simpson, CSF and LeeSar President and CEO;

Kenneth Greco, CSF Vice President of Pharmaceutical Services;

David Bennett, DMS Purchasing Specialist Supervisor and Category

Manager for IT Hardware ; and Ron ald Hartmann , MedAssets Senior

Vice President for Pharmacy . PetitionerÓs Exhibits numbered 1

through 31, 34 through 42, 44 through 58 , 60 through 63, 65

through 67, 69 through 73, 75 , and 77 through 82 were admitted

into evidence.

Respondent presented the testimony of three witnesses:

Clifford Nilson, Jr. , DMSÓs Bureau Chief; Dr. Steven Douglas

Whitfield, Department of Corrections Pharmaceutical Services

Director; and Dr. Brandon Elliott Brantley, Department of Health

Bureau Chief f or Bureau of Public Health Pharmacy. RespondentÓs

Exhibits 1 through 8 and 10 through 26 were admitted into

evidence. RespondentÓs Exhibits 13 through 16 were offered for

the limited purpose of proving possible violations of section

287.057(23).

Interve nor presented the testimony of three witnesses: R ose

Jacobs Svitak, MMCAP Knowledge and Financial Management Unit

Manager; Alan Dahlgren, MMCAP Managing Director; and Dr. Sara

Turnbow, MMCAP Contracting and Business Operations Group

Director. IntervenorÓs Exhibits 1 through 6, 10, and 12 through

17 were admitted into evidence.

At the conclusion of the hearing, the parties agreed to

file their proposed recommended orders withi n 30 days of the

filing of the t ranscript with a 50 - page limit. The proceedings

were transcribed and the parties availed themselves of the right

to submit proposed recommended orders after the filing of the

transcript. The four - volume Transcript of the formal hearing

was filed with DOAH on October 21, 2013. The parti es timely

filed Proposed Recommended Orders, which have been considered in

the preparation of this Recommended Order.

FINDINGS OF FACT

Senate Bill 2002

1. In 2011 , the Florida L egislature passed SB 2002 as the

implementing bill for the 2011 - 2012 General Appropriations Act.

Section 78 directs the Department , by November 1, 2011, to issue

a competitive solicitation pursuant to chapter 287 for a

pharmaceutical purchasing arrangement as a sta te term contract.

Section 78 requires , at a minimum , that the GPOÓs drug

purchasing system provide Ð transpar ent pricing . . . p ermit s

purchases outside the agreement if such purchases offer the best

value to the state, and establishes a preferred drug list that

utilizes generic drugs to the extent feasible and cost

effective .Ñ

2. Section 78 further directs the Department of Health to

terminate its ÐparticipationÑ with MMCAP upon award of a

contract under the ITN , which has not taken place . Section 78

end s with the following: ÐAward of any contract is contingent

upon the appr oval of the Legislative Budget C ommission that the

requirements of this section have been met. Upon approval of

the Legislative Budget Commission, the Department of H ealth

shall terminate its participation in the Minnesota Multistate

Contracting Alliance for Pharmacy.Ñ

3. On November 1, 2011, the Department issued ITN 10/268 -

000 - E for the selection of a pharmaceutical G PO , which will

subsequently work with a procured wholesaler to provide

pharmaceutical products to the State of Florida .

4. Three vendors responded to the ITN : MHA, CSF, and

MMCAP . CSFÓs proposal was presented as a partnership model with

a larger GPO, MedAssets.

Vendors Ó Responsiveness to ITN Criteria

5. S ection 1.1.2 of the ITN provides: Ð[DMS] anticipates

awarding a contract to the responsive and responsible [ vendor]

whose proposal is assessed as providing the best value to the

state.Ñ

6. The ITN included a series of minimum mandatory

requirement questions, the answers to which the initial

determination of responsiveness was based .

7. Each of the minimum mandatory requirement questions was

labeled as a ÐScreening QuestionÑ requiring the v endor to attach

specific supporting documentation. The Evaluation Team

determined responsiveness based on each vendor Ó s responses to

the criteria.

8. The terms of the ITN permitted vendors to submit

questions both about the ITN and its requirements fro m the time

of the ITN release to the deadline for submitting a proposal on

November 22, 2011.

9. With the release of the ITN and each of the subsequent

11 Addenda, DMS included the following language setting a

deadline to protest: ÐFAILURE TO FILE A PROT EST WITHIN THE TIME

PRESCRIBED IN §120.57(3), FLORIDA STATUTES, OR FAILURE TO FILE A

BOND OR OTHER SECURITY WITHIN THE TIME ALLOWED FOR FILING A BOND

SHALL CONSTITUTE A WAIVER OF PROCEEDINGS UNDER CHAPTER 120,

FLORIDA STATUTES.Ñ

GPO E xperience

10. The first minimum mandatory ITN requirement in S ection

2.12.1.1.1 required a minimum of four yearsÓ experience and

stated: Ð Do you have a minimum of four (4) years of experience

as a group purchasing organization? Ñ

11. CSF responded to S ection 2.12.1.1 .1 , ÐCooperative

Services of Florida organized as a Group Purchasing Organization

in 1997. CSF creates value for the members by contracting

directly with manufacturers.Ñ

12. CSFÓs 1997 Articles of Incorporation filed with the

Florida Department of State provide that the general nature of

the subject and purpose shall be Ð as a cooperative, non - stock

membership corporation for the pro motion of the interests of its

M embers as patrons within the meaning of the Subchapter T of

Internal Rev enue Code of 1986, as amended.Ñ

13. Even though CSF had been operating as a group

purchasing organization since 1997, Petitioner amended its

Articles of Incorporation Ós purpose in 2010 to state: Ðto

operate a group purchasing organization . Ñ

14. MMCAP b egan its pharmaceutical cooperative purchasing

venture between the states of Wisconsin and Minnesota in 1995

and has continued expanding to 46 other states , including

Florida , since 2003.

Annual Pharmaceutical Purchase Volume

15. DMS set the second minimum mandatory requirement in

the ITN as an annual pharmaceutical purchase volume of one

billion dollars in order to adequately me et the needs of the

S tate of Florida. Section 2.12.1.1.2 stated , ÐWithin the last

two years, have you had an annual pharma ceutical purchase volume

of at least one billion dollars?Ñ

16. CSF responded , ÐCooperative Services of Florida

confirms that the annual pharmaceutical purchase volume exceeds

the requirement of one billion dollars. Additionally, this has

been met more t han the two (2) year requirement.Ñ CSF

calculated its response to S ection 2.12.1.1.2 by using the

unsubstantiated financial data of its joint partner, MedAssets ,

obtained from the internet . At hearing, however, CSF c larified

the dollar amounts through Hartman n Ós credible testimony that

MedAssets exceeded the billion - dollar threshold required in both

2009 and 2010.

17. MMCAP also meets the second minimum mandatory

requirement by having at least one billion dollars within the

last two years. 1/

Governmen t Client

18. The minimum mandatory requirement question labeled

Section 2.12.1.1.3 of the ITN asked , ÐDo you have at least one

client who is a government or governmental purchasing agency?Ñ

19. CSF responded yes and provided DMS its governmental

list ent itled ÐGovernmental Entity Customers,Ñ which itemized

Lee Memorial Health System, Fort Myers, Florida; Sarasota County

Public Hospital District; The Health Authority of the City of

Huntsville; and Central Florida Health Alliance, Inc. At

hearing, CSF reiterated that it had governmental customers and

that there is also some type of ownership interest between CSF

and those entities .

20. MM CAP undisputedly meets Section 2.12.1.1.3.

Initial Pricing Exercise

21. During the evaluation phase, a pricing exercise was

conducted and each vendor submitted pricing information based on

the stateÓs purchase of pharmaceutica ls during fiscal year 2011 .

CSFÓ s prices were the lowest during the evaluation pricing

exercise.

MM CAPÓs Responsiveness

22. During the IT N process, MMCAP informed the Department

by email on November 10, 2011, that it was constitutionally

prohibited from complying with the ITN indemnification

requirements , and requested guidance.

23 . On November 14, 2011, DMS released Addendum No. 2 of

the ITN to waive the indemnification requirements of the

original ITN for governmental entity GPOs such as MMCAP.

24 . The ITN also required each vendor to commit that it

would be able to work with the pharmaceutical wholesaler

selected by a separate state con tract.

25 . When MMCAP responded to the ITN, it only had contracts

with three wholesalers: Cardinal, Amerisource Bergan, and Morris

& Dickson. At the time, i ts charter provided that the state

Ðmust use the MMCAP - contracted wholesaler selected by the home

state of the Member Facility when obtaining pharmaceuticals . Ñ

26 . At the hearing, MM CAP Ós Charter had recently been

amended to allow MMCAP to work with any wholesaler and MMCAP was

prepared to work with the wholesaler selected by the separate

state contra ct .

27 . The Evaluation T eam reviewed each of the three

vendorsÓ proposals and determined each proposal was responsive .

Subsequently, all three vendors advanced to the negotiation

stage of the ITN .

Conflict of Interest

28 . Jasper Watkins is a Department of Health employee who

also served on MMCAP Ó s advisory board. I n order to avoid any

potential conflict of interest with a future ITN being released ,

h e resigned from the advisory board by email on September 2,

2010. Watkins continued to g et MMCAPÓs newsletter from the

distribution list through 2012 .

2 9 . On December 9, 2011, DMSÓs Secretary designated Jasper

Watkins to serve on the Evaluation T eam, which advanced all

three vendors to the negotiation stag e. Watkins was appointed

to the Negotiation Team on February 24, 2012, and participated

in several strategy sessions. On March 21, 2012, the day before

the negotiations with the vendors started, Watkins was removed

from the Negotiation Team. Watkins played no further role in

the ITN pr ocess after his removal.

Negotiation Stage

30 . The second stage of the ITN procurement process for

the three vendors was the negotiation phase. The Negotiation

Team consisted of five members. D uring the negotiation phase,

each of the members of the Neg otiation Team had the opportunity

to raise questions and issues with each of the participants.

31 . During the Recommendation Meetings, the Negotiation

Team reviewed the list of potential criteria and then,

consistent with section 287.057(c)(4), identified nine criteria

in selecting the vendor for award of the GPO contract: i)

pricing ; ii) scope and depth of contract portfolio, current and

to be acquired ; iii) transition; iv) ability to help change the

stateÓs purchasing behavior to save dollars ; v) ability to be a

strategic purchasing partner ; vi) management of the wholesaler ;

vii) assistance in creating formularies for agencies and the

state ; viii) deliverables; and ix) E - audit.

32 . Negotiations with the three selected vendors were

conducted separately for seven months from March 2012 through

October 2012. T he Negotiation Team question ed each of the

partic ipants regarding all aspects of their proposals including

pricing technical specifications, service level agreements , and

business operations. At var ious instances during the

negotiation meetings, the negotiation team members properly

discussed matters outside the ITN. Additional information and

revisions were sought from the vendors so that the Negotiation

Team could fully evaluat e the services and b enefits that the

vendor was able to provide.

33 . During the n egotiation phase, a second pricing

exercise was conducted based upon the stateÓs pharmaceutical

purchases for fiscal year 2012. MMCAPÓs prices were lower for

the exercise. Like the first pric ing exercise during the ITN

evaluation phase, the second exercise did not establish an

actual price that would be paid by the state or incorporated

into the final contract.

34 . The pricing exercises undertaken in this ITN process

were only snapshot s in time. DMS had the vendors participate in

the analysis to show the best overall pricing and to demonstrate

whether the vendor would be able to aggressively work on behalf

of the state to maintain best pricing in the constantly changing

pharmaceutical m arket. All vendors showed that their analysis

could work successfully within the competitive environment.

35 . On October 22, 2012, all three vendors submitted Best

and Final Offers . On October 26 and 29, 2012, the Negotiation

Team reviewed the offers t o determine which vendor would provide

the best value to the State of Florida. The Negotiation Team

focused on the selection criteria of the ITN Ðas refined during

the negotiations.Ñ

36 . After the negotiations were complete , t hree of the

five Negotiation T eam members , Brantley, Whitfield, and Wells,

voted to recommend MMCAP receive the GPO award. Two members of

the Negotiation T eam , Nilson and Bennett, voted for CSF to

receive the award.

37 . On N ovember 5, 2012, the Negotiation Team issued a

memorandum to DMSÓ Secretary, which summarized the reasons 2/ for

the selection of MMCAP . The Recommendation Memo was accepted by

the Secretary of DMS on January 22, 2013.

38 . On January 23, 2013, DMS posted its Notice of Intent

to Award the pharmaceutica l GPO contract to MMCAP. CSF timely

filed its Notice of Protest to the award on January 25, 2013.

CSF had never previously protested any specifications or Addenda

in the ITN before January 25, 2013.

39 . On February 4, 2013, Petitioner filed a timely for mal

protest challenging the Intent to Award .

40 . On March 1, 2013, a meeting for an opportunity to

resolve the protest was held pursuant to section 120.57(3)(d) .

An impasse was reached.

41 . On Ma rch 19, 2013, DMS forwarded CSFÓs formal protest

petition to DOAH , which is before the undersigned .

CONCLUSION S OF LAW

4 2 . DOAH has jurisdiction of the parties and subject

matter in this case pursuant to sections 120.569, 120.57(1) and

(3), Florida Statutes (2013 ) .

43 . Petitioner has challenged the DepartmentÓ s proposed

agency action to award the pharmaceutical GPO contract to MMCAP.

44 . The burden of proof resides with CSF, the party

contesting the agency action. This de novo proceeding was

conducted for the purpose of evaluating the action that was

taken by the Department in an attempt to determine whether that

action is contrary to the DepartmentÓs governing statutes, the

DepartmentÓs rules or policies, or the solicitation

speci fications. See § 120.57(3) (f), F la. Stat., and State

Contracting and EngÓg Cor p. v . DepÓt of Transp . , 709 So. 2d 607

(Fla. 1 st DCA 1998).

45 . The standard of proof in this proceeding is whether

the agency action was clearly erroneous, contrary to

competition, arbitrary, or capricious. § 120.57(3)(f), Fla.

Stat.

Standing

46 . As a preliminary matter, the Department and MMCAP h ave

challenged the standing of CSF . DMS alleg es that CSF is not a

responsive and responsible vendor regarding the minimum

mandatory requirements , despite the fact that the Department

originally de termined CSFÓs proposal to be responsive . Section

287.057(1)(c)(4) prohibits agencies from contracting with

vendors that are not responsive and responsible. Also, DMS

contends CSF waived its ability to challenge ITN specifications.

47 . Section 287.012(2 5) defines a responsible vendor as Ða

vendor who has the capability in all respects to fully perform

the contract requirements and the integrity and reliability that

will assure good faith performance.Ñ

48 . Section 287.012(27 ) defines a respons iv e vendor as Ða

vendor that has submitted a bid, proposal, or reply that

conforms in all material respects to the solicitation.Ñ

49 . A party has standing to protest an intended award if

that party has a Ðsubstantial interestÑ to be determined by the

agency. Prest on Carroll Co. v. Fla . Keys Aqueduct Auth . , 400

So. 2d. 524, 525 (Fla. 3d DCA 1981).

50 . DMS Ó argument that CSF is not a responsive and

responsible vendor is premised on several propositions. First,

DMS asserts that CSFÓs amendment to its corporate charter Ós

purpose to specify that it is operating as a GPO in 2010

demonstrates CSF was no t a GPO previously . Nothing in the ITN

required that the primary purpose of four years as a GPO be in

the vendorÓs charter. The testimony of CSFÓs CEO that CSF has

been a GPO since 1997 is found to be more persuasive than any

significance attached to the 2010 charter change , and

demonstrates CSF meets Section 2.12.1.1.1 .

51 . The DepartmentÓs position that CSF would not meet the

requirement of an annual pharmaceutica l purchase volume of at

least one billion dollars in the two years previous to the

submission without MedAssets is correct. However, no evidence

was presented that demonstrated that CSF is prohibited from

submitting a partner model proposal with MedAssets as a vendor.

Hence, the joint model vendor at issue, CSF/MedAssets, meets

Section 2.12.1. 1.2 .

52 . DMS further contends that CSF did not meet the

mandatory minimum requirement to have at least one client who is

a government or governmental purchasing agency because the four

government entities provided are also entities with which CSF

has an ownership interest . H owever, nothing in the ITN

specifications prohibited such a client relationship or

disallowed such ownership direc tly or indirectly. Therefore,

CSF also meets Section 2.12.1.1.3.

53 . For these reasons , CSF conforms to the mandatory

minimum requirements of the ITN as a responsive vendor. CSF is

also responsible since no evidence was presented that CSF cannot

fully p erform the contract . Consequently, CSFÓs substantial

interest in obtaining the contract is affected by the intended

award of the contract to MMCAP , and Petitioner has standing to

protest the award .

54 . As to the price methodology standing issue, Petitioner

contends that the Department Ós procurement process price

methodology was flawed and challenges the price analysis .

However, CSF failed to challenge the price analysis

specifications within the proper time line. CSF challenged the

issue after D MS posted the Notice of Intent to Award , not during

the 72 - hour protest period required pursuant to section

120.57(3)(b) to which CSF had clearly been advised. Petitioner

failed to preserve its right to protest the ITN as originally

posted . Therefore, CS F lacks standing to challenge the price

analysis.

CSFÓs Challenge

55 . CSF protests the intent to award the GPO contract to

MMCAP and asserts that it was contrary to DMSÓ governing

statutes, rules, policies, and solicitation specifications

developed by the Negotiation Team.

56 . Section 287.057 (1) provides the process for ITNs in

relevant part:

( c) Invitation to negotiate. Ï The invitation

to negotiate is a solicitation used by an

agency which is intended to determine the

best method for achieving a specific goal or

solving a particular problem and identifies

one or more responsive vendors with which

the agency may negotiate in order to receive

the best value.

1. Before issuing an invitation to

negotiate, the head of an agency must

determine and specify in w riting the reasons

that procurement by an invitation to bid or

a request for proposal is not practicable.

2. The invitation to negotiate must

describe the questions being explored, the

facts being sought, and the specific goals

or problems that are the su bject of the

solicitation.

3. The criteria that will be used for

determining the acceptability of the reply

and guiding the selection of the vendors

with which the agency will negotiate must be

specified.

4. The agency shall evaluate replies

against all evaluation criteria set forth in

the invitation to negotiate in order to

establish a competitive range of replies

reasonably susceptible of award . The agency

may select one or more vendors within the

competitive range with which to commence

negotiations . After negotiations are

conducted, the agency shall award the

contract to the responsible and responsive

vendor that the agency determines will

provide the best value to the state, based

on the selection criteria.

5. The contract file for a vendor selecte d

through an invitation to negotiate must

contain a short plain statement that

explains the basis for the selection of the

vendor and that sets forth the vendorÓs

deliverables and price, pursuant to the

contract, along with an explanation of how

these deli verables and price provide the

best value to the state.

57 . Section 287.012 defines best value to mean Ð the

highest overall value to the state based on factors that

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

workmanship. Ñ

58 . In this matter, DMSÓs ITN procurement process was in

compliance with the governing rules, policies, and ITN

specifications. N o evidence to the contrary was presented at

hearing . Instead, the record shows DMS acted in conformity with

SB 2002 and chapter 2 87.

59 . Section 78 of SB 2002 does not prohibit MMCAP from

applying for the new GPO contract to provide pharmaceuticals for

the State of Florida under a state term contract. The bill

simply requires specific terms and conditions to which MMCAP

must c ompl y.

60 . As to chapter 287, DMS properly followed the

evaluation process of reviewing the minimum mandatory

Ðevaluation criteriaÑ as the starting point in this procurement.

Each Ðevalu ation criteriaÑ was specified in the ITN. The

Evaluation Team determine d all three vendors had the

capabilities to perform the contract by meeting the minimum

mandatory requirements according to the ITN specifications and

moved the three vendors to the second phase of the process Ð to

which to commence negotiations.Ñ

61 . Lik e CSF, MMCAP is also a responsive and responsible

vendor who has met the minimum mandatory requirements . MMCAP Ós

amended charter allows it to work with a non - contracted

wholesaler and it does not have to indemnify the state under the

contract because of A ddendum No. 2. A dditionally, MMCAPÓs GPO

experience far exceeded the four - year requirement and its annual

pharmaceutical purchase volume was at least one billion dollars

for the two - year requirement . Also, i t is undisputed that MMCAP

had at least one gov ernmental entity client . Furthermore, MMCAP

has the ability to perform the pharmaceutical contract.

62 . Contrary to CSFÓs allegations, the negotiations in

this procurement process were handled properly. DMS made the

award based on the proper selection criteria . Section

287.057 (c) (4) sets forth a two - phase process and distinguishes

Ðevaluation criteriaÑ from Ðselection criteria .Ñ

6 3 . First, t he Evaluation Team must use Ðevaluation

criteriaÑ that is Ðset forth in the [ ITN ] Ñ to choose the vendors

who wil l go to the negotiation stage , which occurred in this

matter .

64 . Next , the Negotiation Team properly develop ed

Ðselection criteriaÑ by which vendor s would provide the Ð best

value to the stateÑ after negotiations . T he statute clearly

expands Ðs election criteria Ñ parameters for the Negotiation Team

further than Ðevaluation criteriaÑ to allow the Negotiation T eam

to include objective factors because they are not limited to ,

Ð price, quality, design, and workmanship Ñ as set forth in

section 287.012 .

65 . In this matter, t he selection criteria developed by

the Negotiation Team during the negotiation phase of the ITN

process fell within the parameters of section 287.057(1)(c) (4).

The team took seven months to develop the criteria based on

responses received, negotiations, and Best and Final Offers.

Also, during the negotiation period, the three vendors were able

to clarify , enhance, and modif y their proposals in an effort to

demonstrate that they had the ability to provide the best

service for the State of Fl orida . The final selection criteria

the Negotiation Team chose provided the best value to the state.

66 . In the Joint Pre - hearing Stipulation and Proposed

Recommended Order , Petitioner alleged that the DepartmentÓs

intent to award the contract to MMCAP is also arbitrary and

capricious. An agency action is capricious if the agency takes

the action without thought, reason, or rationality. An agency

decision is arbitrary if it is not supported by facts or logic .

Agrico Chem. Co. v. State DepÓt of Envtl. Reg . , 365 So . 2d 759,

763 (Fla. 1 st DCA 1978).

67 . The record is void of evidence to demonstrate any of

the underlying methodology used by the negotiators was biased ,

flawed , or that the decision was arrived at in any manner other

than based upon logic, facts, rational thought , or the

individual expertise and judgment of each negotiator .

Therefore, the undersigned rejects CSFÓs proposition that the

RespondentÓs Intent to Award is arbitrary or capricious.

68 . Likewise, the record lacks persuasive evidence to

demonstrate the DepartmentÓs actions were clearly erroneous.

69 . Petitioner further contends that Watkins Ó

participation on the Evaluation Team and N egotiation Team was a

conflict of interest because his involvement in the process

resulted in favor itism for MMCAP, because he had served on

MMCAPÓs advisory board previously. Such a position is unfounded

in that no evidence was presented at hearing to demonstrate the

process was improperly affected by the inclusion of Watkins as a

member of the Evaluation and Negotiation teams. Watkins neither

participate d in the true n egotiation period nor was any conflict

of interest or prejudice demonstrated by his level of

participation . Therefore, Petitioner failed to demonstrate

WatkinsÓ selection or any other of the DepartmentÓs actions were

contrary to competition.

70 . Accordingly, Petitioner has not met its burden to

demonstrate that the DepartmentÓs proposed action is either

contr ary to the DepartmentÓs governing statutes, rules or

policies, and ITN specifications or that DMSÓ actions during the

procurement process were clearly erroneous, contrary to

competition or arbitrary or capricious .

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law set forth herein, it is

RECOMMENDED:

That the Department of Management Services enter a final

order dismissing the bid protest filed by Petitioner.

DONE AND ENT ERED this 15th day of January, 2014 , in

Tallahassee, Le on County, Florida.

S

JUNE C. MCKINNEY

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www. doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 15th day of January, 2014 .

ENDNOTES

1/ CSFÓs position that MMCAP does no t meet the criteria is

rejected.

2/ CSFÓs Exhibit #37.

COPIES FURNISHED :

Clifford A. Taylor, Esquire

Department of Management Services

Suite 160D

4050 Esplanade Way

Tallahassee, Florida 32399

Albert T. Gimbel, Esquire

Messer Caparello, P.A.

2618 Centennial Place

Tallahassee, Florida 32308

Justin Kaufman, Esquire

Minnesota Multistate Contracting

Alliance for Pharmacy

50 Sherburne Avenue

St. Paul, Minnesota 55416

Craig Nichols, Secretary

Department of Management Services

4050 Esplanade Way

Tallahassee, Florida 32399

Josefina M. Tamayo , Gen eral Counsel

Office of the General Counse l

Department of Management Services

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit exceptions within 10 days

from the date of the Recommended Order. Any exceptions to this

Recommended Order should be filed with the agency that will

issue the final order in this case.