13-003030BID Securus Technologies, Inc. vs. Department Of Corrections Status: Closed Recommended Order on Friday, November 1, 2013.

Summary: Petitioners failed to prove that the Department's rejection of all replies due to unclear criteria for award is illegal, arbitrary, dishonest, or fraudulent.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GLOBAL TEL LINK CORPORATION, A

DELAWARE CORPORATION ,

Petitioner ,

and

SECURUS TECHNOLOGIES, INC.,

Intervenor,

vs. Case No. 13 - 3028BID

DEPARTMENT OF CORRECTIONS ,

Respondent,

and

EMBARQ PAYPHONE SERV ICES, INC.,

d/b/a CENTURYLINK,

Intervenor.

/

EMBARQ PAYPHONE SERVICES, INC.,

d/b/a CENTURYLINK,

Petitioner,

and

GLOBAL TEL LINK CORPORATION, A

DELAWARE CORPOR ATION ,

Intervenor,

vs. Case No. 13 - 3029BID

DEPARTMENT OF CORRECTIONS,

Respondent,

and

SECURUS TECHNOLOGIES, INC.,

Intervenor.

/

SECURUS TECHNOLOGIES , INC.,

Petitioner,

and

GLOBAL TEL LINK CORPORATION, A

DELAWARE CORPORATION,

Intervenor,

vs. Case No. 13 - 3030BID

DEPARTMENT OF CORRECTIONS,

Respondent,

and

EMBARQ PAYPHONE SERVICES, INC.,

d/b/a CENTURYLINK,

Intervenor.

/

GLOBAL TEL LINK CORPORATION, A

DELAWARE CORPORATION,

Petitioner,

and

SECURUS TECHNOLOGIES, INC.,

Intervenor,

and

EMBARQ PAYPHONE SERVICES, INC.,

d/b/a CENTU RYLINK,

Intervenor,

vs. Case No. 13 - 3041BID

DEPARTMENT OF CORRECTIONS,

Respondent.

/

RECOMMENDED ORDER

On September 11, 12, and 18 , 2013, a duly - noticed hearing

was held in Tallahassee, Florida, before F. Scott Boyd, an

a dministrative l aw j udge assigned by the Division of

Administrative Hearings.

APPEARANCES

For Global Tel Link Corporation:

Robert H. Hosay, Esquire

James A. McKee, Esquire

Foley and Lardner, LLP

Suite 900

106 East College Avenue

Tallahassee, Florida 32301

John A. Tucker

Foley and Lardner, LLP

Suite 1300

One Independent Drive

Jacksonville, Florida 32202

For Embarq Payphone Services, Inc. , d/b/a/ CenturyLink:

Amy W. Schrader, Esq uire

William E. Williams, Esquire

GrayRobinson, P.A.

Post Office Box 11189

Tallahassee, Florida 32302

For Securus Technologies, Inc.:

W. Robert Vezina, III, Esquire

Eduardo S. Lombard, Esquire

Vezina, Lawrence and Piscitelli, P.A.

413 East Park A venue

Tallahassee, Florida 32301

For Department of Corrections:

Jonathan P. Sanford, Esquire

James Fortunas, Esquire

Florida Department of Corrections

501 South Calhoun Street

Tallahassee, Florida 32399

STATEMENT OF THE ISSUE

Whether the De partment of CorrectionsÓ a ction to withdraw

its Intent to Award and to reject all replies to ITN 12 - DC - 8396

is illegal, arbitrary, dishonest, or fraudulent, and if so,

whether its Intent to Award is contrary to governing statutes,

rules, policies, or th e s olicitation specifications.

PRELIMINARY STATEMENT

On April 15, 2013, the Department of Corrections ( the DOC

or the Department) issued Invitation to Negotiate 12 - DC - 8396

(the ITN) to solicit competitive replies for the a ward of a

contract to provide statew ide i nmate t elephone s ervices . The

Department issued Addenda to the ITN on Apr il 23, 2013, and

May 14, 2013.

The Department posted a Notice of Intent to Negotiate with

Embarq Payphon e Services, Inc., d/b/a CenturyL ink (EPSI), Global

Tel Link Corporation ( GTL), and Securus Technologies, Inc.

(Securus). After negotiations, the Department issued its

Request for Best and Final Offers on June 14, 2013. After

receiving and considering offers, the Department announced its

Notice of Agency Decision to award the contract to EP SI on

June 25, 2013. Securus filed its Noti ce of Intent to Protest on

June 28, 2013, and its formal protest on July 5, 2013. GTL

filed its Notice of Intent to Pr otest on June 28, 2013, and its

f ormal protest on July 8, 2013.

On July 23, 201 3, the Department posted a Notice of Agency

Decision advising of its intent to withdraw the Intent to Award

and to instead reject all replies and re - issue the ITN. EPSI

and GTL each filed a Notice of Intent to Protest the

DepartmentÓs decision to reject a ll replies on July 26, 2013,

and filed their formal protests on August 5, 2013.

These four bid protests were referred to the Division of

Administrative Hearings for assignment of an administrative law

judge. After a te lephonic pre - hearing conference on Au gust 19,

2013, the cases were consolidated for hearing.

After re - scheduling, the hearing was set for September 11,

12, and 18, 2013. At the hearing, 53 Joint Exhibits, J - 1

through J - 18, J - 20 through J - 24, J - 28 through J - 43, J - 46, and

J - 48 through J - 60 we re a dmitted, with J - 33 indicated as

confidential. In addition, nine other exhibits were accepted:

two offered by EPSI, E - 2 and E - 3; four from GTL, G - 4 through

G - 7; and three from Securus, S - 5 through S - 7. A joint

Stipulation of Facts was accepted and those facts are included

below among the Findings of Fact. Seven witnesses testified.

Mr. Paul Cooper, G eneral M anager of CenturyLinkÓs Public Access

Group, and Mr. Shane Phillips, an o perations m anager with the

Department, were called by EPSI. GTL call ed Mr. Steve Montanaro

of GTL Marketing and Communications; Ms. Julyn Hussey,

Purchas ing Analyst with the Department; and Ms. Jodi Bailey,

Director of Procurement and Con tracts for the Department.

Mr. Stephan Viefhaus, Sales Vice President of Securus , was

called by Securus. The Department called Ms. Rosalyn Ingram,

Chief of Procurement, Land Leasing, and General Services for the

Department.

The five - volume Transcript of the proceedings was filed

with the Division of Administrative Hearings on October 2, 2 013.

All parties timely filed Proposed Recommended Orders, which were

considered.

FINDINGS OF FACT

1. The DOC is an agency of the State of Florida that is

responsible for the supervisory and protective care, custody,

and control of FloridaÓs inmate pop ulation. In carrying out

this statutory responsibility, the Department provides access to

inmate telephone services.

2. On April 15, 2013, the DOC issued the ITN, entitled

Ð Statewide Inmate Telephone Services, ITN 12 - DC - 8396 ,Ñ seeking

vendors to provide managed - access inmate telephone service to

the DOC. Responses to the ITN were due to be opened on May 21,

2013.

3. The DOC issued Addendum #1 to the ITN on April 23,

2013, revising one page of the ITN.

4. The DOC issued Addendum #2 to the ITN on May 14, 2013,

revising a number of pages of the ITN, and including answers to

a number of vendor questions.

5. EPSI, GTL, and Securus are providers of inmate

telephone systems and services. Securus is the incumbent

contractor, and has been providing the Departm ent with services

substantially similar to those solicited for over five years.

6. No party filed a notice of protest to the terms,

conditions, or specifications contained in the ITN or the

Addenda within 72 hours of their posting or a formal written

pro test with in 10 days thereafter.

7. Replies to the ITN were received from EPSI, GTL,

Securus, and Telmate, LLC. TelmateÓs reply was determined to be

not responsive to the ITN.

Two - Part ITN

8. As amended by Addendum #2, section 2.4 of the ITN,

entitled Ð ITN Process,Ñ provided that the Invitation to

Negotiate p rocess to select qualified vendors would consist of

two distinct parts. In Part 1, an interested vendor was to

submit a response that described certain Mandatory

Responsiveness Requirement elements, as well as a Statement of

Qualifications, Technical Response, and Financial Documentation.

These responses would then be scored using established

evaluation criteria and the scores would be combined with cost

points assigned from submitted Cost Proposals .

9. In Part 2, the Department was to select one or more

qualified vendors for negotiations. After negotiations, the

Department would reque st a Best and Final Offer from each vendor

for final consideration prior to final award decision. The ITN

provided that the Department could reject any and all responses

at any time.

High Commissions and Low Rates

10. Section 2.5 of the ITN, entitled ÐInitial Cost

Response,Ñ provided in part:

It is the DepartmentÓs intention, through

the ITN process, to generate the highest

percentage of revenue for the State, while

ensuring a quality telephone service with

reasonable and justifiable telephone call

rate charges for inmateÓs family and friends

similar to those available to the public - at -

large.

11. Section 2.6 of the ITN, entitled ÐRevenue to be Paid

to the Department , Ñ provided in part that the Department

intended to enter into a contract to provide inmate telephone

service at no cost to the Department. It provided that, Ð[t]he

successful Contractor shall pay to the Department a commission

calculated as a percentage of gross revenues.Ñ 1/

12. The commission paid by a vendor is the single largest

expense in the industry and is a n important aspect of any bid.

Contract Term

13. Section 2.8 of the ITN was entitled ÐContract TermÑ

and provided:

It is anticipated that the initial term of

any Contract resulting from this ITN shall

be for a five (5) year period. At its sole

discretion, the Department may renew the

Contract in accordance with Form PUR 1000

#26. The ren ewal shall be contingent, at a

minimum, on satisfactory performance of the

Contract by the Contractor as determined by

the Department, and subject to the

availability of funds. If the Department

desires to renew the Contracts resulting

from this ITN, it w ill provide written

notice to the Contractor no later than

thirty days prior to the Contract expiration

date.

Own Technology System

14. Section 3.4 of the ITN provided in part:

The successful Contractor is required to

implement its own technology system to

facilitate inmate telephone service. Due to

the size and complexity of the anticipated

system, the successful Contractor will be

allowed a period of transition beginning on

the date the contract is executed in which

to install and implement the utiliz ation of

its own technology systemansition,

implementation and installation are limited

to eighty (80) days. The Department

realizes that some "down time" will occur

during this transition, and Respondents

shall propose an implementation plan that

re duces this "down time" and allows for a

smooth progression to the proposed ITS.

15. GTL emphasizes the language stating that the

successful contractor must implement Ðits ownÑ technology

system, and asserts that the technology system which EPSI offers

to install is not owned by it, but by Inmate Calling Solutions,

LLC ( ICS ) , its subcontractor. However, EPSI demonstrated that

while the inmate telephone platform, dubbed the ÐEnforcer

Sys tem,Ñ is owned by ICS now, that EPSI has a Master User

Agreement with ICS and that an agreement has already been

reached that before the contract would be entered into, a

Statement of Work would be executed to create actual ownership

in EPSI for pur poses of the Florida contract.

16. GTL alleges that in EPSIÓs reply , EPSI re lied upon the

experience, qualifications, and resources of its affilia ted

entities in other areas as well . For example, GTL asserts that

EPSIÓs claim that it would be providing 83 percent of the

manpower is false, since EPSI has acknowledged that EPSI is only

a contracting subsidiary of CenturyLink, Inc., and that EPSI has

no employees of its own. While it is clear that EPSIÓs reply to

the ITN relies upon the resources of its parent to carry out the

terms of the contract with respect to experience, presen ce in

the state, and personnel, EPSI demonstrated that this

arrangement was common, and well understood by the Department.

17. EPSI demonstrated that all required capabilities would

be available to it through the resources of its parent and

subcontractors at the time the contract was entered into, and

that its reply was in conformance with the provisions of the ITN

in all material respects.

18. EPSI has the integrity and reliability to assure good

faith performance of the contract.

Call Recording

19. Sec tion 3.6 of the ITN, entitled ÐInmate Telephone

System Functionality (General),Ñ provided in part:

The system shall provide the capability to

flag any individual telephone number in the

inmateÓs Ò Approved Number List Ó as Ò Do Not

Record. Ó The default set ting for each

telephone number will be to record until

flagged by Department personnel to the

contrary.

20. Securus alleges that section 3.6 of the ITN implements

Department regulations 2/ and that EPSIÓs reply was non - responsive

because it stated that re cording of calls to specific telephone

numbers would be deactivated regardless of who called that

number . Securus alleges that this creates a security risk

because other inmates calling the same number should still have

their calls recorded .

21. EPSI ind icated in its reply to the ITN that it read,

agreed, and would comply with section 3.6. While EPSI went on

to say that this capability was not connected to an inmateÓs

PIN, the language of section 3.6 does not mention an inmateÓs

PIN either. Read literal ly, this section requires only the

ability to ÐflagÑ any individual telephone number that appears

in an inmateÓs number list as Ðdo not recordÑ and requires that,

by default, calls to a telephone number will be recorded until

it is flagged. EPSIÓs reply i ndicated it could meet this

requirement. This provision says nothing about continuing to

record calls to that same number from other inmates. Whether or

not this creates a security risk or is what the Department

actually desired are issues which might we ll be discussed as

part of the negotiations, but this do es not affect the

responsiveness of EPSIÓs reply to section 3.6. Furthermore,

Mr. Cooper testified at hearing that EPSI does have the

capability to mark a number as Ðdo not recordÑ only with respect

to an individual inmate, at the option of the Department.

22. EPSIÓs reply conformed to the call - recording

provisions of section 3.6 of the ITN in all material respects.

Call Forwarding

23. Section 3.6.8 of the ITN, entitled ÐSystem

Restriction, Fraud C ontrol and Notification Requirements,Ñ

provided that the provided inmate telephone services have the

following security capability:

Ability to immediately terminate a call if

it detects that a called partyÓs telephone

number is call forwarded to another

telephone number. The system shall make a

ÐnotationÑ in the database on the inmateÓs

call. The system shall make this

information available, in a report format,

to designated department personnel.

24. In response to an inquiry noting that , as worded, t he

ITN did not technically require a vendor to have the capability

to detect call - forwarded calls in the first place, the

Department responded that this functionality was required.

25. Securus alleges that EPSI is unable to comply with

this requirement, c iting as evidence EPSIÓs admission, made some

months before in connection with an RFP being conducted by the

Kansas Department of Corrections, that it did not yet have this

capability.

26. EPSI indicated in its reply to the ITN that it read,

agreed, and w ould comply with this requirement. As for the

Kansas solicitation, EPSI showed that it now possesses this

capability, and h as in fact installed it before.

27. EPSIÓs reply conformed to the call - forwarding

provisions of section 3.6.8 of th e ITN in all mat erial respects.

Keefe Commissary Network

28. Section 5.2.1 of the ITN, entitled ÐRespondentsÓ

Business/Corporate Experience,Ñ at paragraph e. directed each

vendor to:

[P]rovide and identify all entities of or

related to the Respondent (including parent

company and subsidiaries of the parent

company; divisions or subdivisions of parent

company or of Respondent), that have ever

been convicted of fraud or of deceit or

unlawful business dealings whether related

to the services contemplated by this ITN or

not , or entered into any type of settlement

agreement concerning a business practice,

including services contemplated by this ITN,

in response to a civil or criminal action,

or have been the subject of any complaint,

action, investigation or suit involving an y

other type of dealings contrary to federal,

state, or other regulatory agency

regulations. The Respondent shall identify

the amount of any payments made as part of

any settlement agreement, consent order or

conviction.

29. Attachment 6 to the ITN, se tting forth Evaluation

Criteria, similarly provided guidance regarding the assessment

of points for Business/Corporate Experience. Paragraph 1.(f)

provided: ÐIf any entities of, or related to, the Respondent

were convicted of fraud or of deceit or unlawf ul business

dealings, what were the circumstances that led to the conviction

and how was i t resolved by the Respondent?Ñ

30. Addendum #2. to the ITN, which included questions and

answers, also contained the following:

Question 57: In Attachment 6, Articl e 1.f.

regarding respondents Ðconvicted of fraud,

deceit, or unlawful business dealing . . .Ñ

does this include associated subcontractors

proposed in this ITN?

Answ er 57: Yes, any subcontractors you

intend to utilize on this project, would be

considered an enti ty of and related to your

firm.

31. As a proposed subcontractor, ICS is an entity of, or

related to, EPSI. There is no evidence to indicate that ICS has

ever been convicted of fraud or of deceit or unlawful business

dealings. There is no evidenc e to indicate that ICS has entered

into any type of settlement agreement concerning a business

practice in response to a civil or criminal action. There is no

evidence to indicate that ICS has been the subject of any

complaint, action, investigation , or s uit involving any other

type of dealings contrary to federal, state, or other regulatory

agency regulations.

32. The only evidence at hearing as to convictions

involved Ðtwo individuals from the Florida DOCÑ and Ðtwo

individuals from a company called AI S, I think thatÓs American

Institutional Services.Ñ No evidence was presented that AIS was

Ðan entity of or related toÑ EPSI.

33. Conversely, there was no evidence that Keefe

Commissary Network (KCN) or anyone employed by it was ever

convicted of any cri me. There was similarly no evidence that

KCN entered into any type of settlement agreement concerning a

business practice in response to civil or criminal action. It

was shown that KCN Ðcooperated with the federal government in an

investigationÑ that res ulted in criminal convictions, and it is

concluded that KCN was therefore itself a subject of an

investigation involving any other type of dealings contrary to

federal, state, or other regulatory agency regulations.

34. However, KCN is not an entity of, o r related to, EPSI.

KCN is not a parent company of EPSI, it is not a division,

subdivision, or subsidiary of EPSI, and it is not a division,

subdivision, or subsidiary of EPSIÓs par ent company,

CenturyLink, Inc.

35. EPSIÓs reply conformed to the disclosu re requirements

of section 5.2.1, Attachment 6, and Addendum #2 of th e ITN in

all material respects.

Phases of the ITN

36. Section 6 describes nine phases of the ITN:

Phase 1 Î Public Opening and Review of

Mandatory Responsiveness Requirements

Phase 2 Î Review of References and Other Bid

Requirements

Phase 3 Î Evaluations of Statement of

Qualifications, Technical Responses, and

Managed Access Solutions 3/

Phase 4 Î CPA Review of Financial

Documentation

Phase 5 Î Review of Initial Cost Sheets

Phase 6 Î Determination of Final Scores

Phase 7 Î Negotiations

Phase 8 Î Best and Final Offers from

Respondents

Phase 9 Î Notice of Intended Decision

Evaluation Criteria in the ITN

37. As amended by Addendum #2, the ITN established scoring

criteria to evaluate replies in three main categories:

Statement of Qualifications (500 points); Technical Response

(400 points); and Initial Cost Sheets (100 points). It also

provided specific guidance for consideration of the commissions

and rates shown on the Initial Cost Sheet that made up the

pricing category. Section 6.1.5 of the ITN, entitled ÐPhase 5 Î

Review of Initial Cost Sheet,Ñ provided in part:

The Initial Cost Proposal with the highest

commission (percentage of gross revenue) to

be paid to the Department wil l be awarded 50

points. The price submitted in Table 1 for

the Original Contract Term, and the

subsequent renewal price pages for Table 1

will be averaged to determine the highest

commission submitted. All other commission

percentages will receive points according to

the following formula:

(X/N) x 50 = Z

Where: X = Respondents proposed Commission

Percentage to be Paid. N = highest

Commission Percentage to be Paid of all

responses submitted. Z = points awarded.

* * *

The Initial Cost Proposal with t he lowest

telephone rate charge will be awarded 50

points. The price submitted in Table 1 for

the Original Contract Term, and the

subsequent renewal price pages for Table 1

will be averaged to determine the highest

commission submitted. All other cost

re sponses will receive points according to

the following formula:

(N/X) x 50 = Z

Where: N = lowest verified telephone rate

charge of all responses submitted.

X = RespondentÓs proposed lowest telephone

rate charge. Z = points awarded.

38. The I TN as amended by Addendum #2 provided

instructions that initial costs should be submitted with the

most favorable terms the Respondent could offer and that final

percentages and rates would be determined through the

negotiation process. It included the fo llowing chart: 4/

COST PROPOSAL

INITIAL ONE TWO THREE FOUR FIVE

Contract Year Year Year Year Year

Term Renewal Renewal Renewal Renewal Renewal

5 years

Initial

Department

Commission %

Rate Proposed

Initial Blended

Telephone Rate

for All Calls*

(inc lusive of

surcharges)

39. The ITN, including its Addenda, did not specify

selection criteria upon which the determination of best valu e to

the state would be based.

Allegation that EPSI Reply was Misleading

40. On the Certification/Attestation Pa ge, each vendor was

required to certify that the information contained in its reply

was true and sufficiently complet e so as not to be misleading.

41. While portions of its reply might have provided more

detail, EPSI did not mislead the Department regardi ng its legal

structure, affiliations, and subcontractors, or misrepresent

what entity would be providing technology or services if EPSI

was awarded the contract. EPSIÓs reply explained that EPSI was

a wholly owned corporate subsidiary of CenturyLink, Inc. , and

described many aspects of the contract that would be performed

using resources of its parent, as well as aspects that would be

performed through ICS as its subcontractor.

Department Evaluation of Initial Replies

42. The information on the Cost Propo sal t able was

reviewed and scored by Ms. Hussey, who had been appointed as the

p rocurement m anager for the ITN. Attempting to follow the

instructions provided in section 6.1.5, she added together the

six numbers found in the boxes indicating commission pe rcentages

on the Cost Proposal sheets. One of these boxes contained the

commission percentage for the original five - year contract term

and each of the other five boxes contained th e commission

percentage for one of the five renewal years. She then divide d

this sum by six, the number of boxes in the computation chart

(Ðdivide by sixÑ). In other words, she calculated the

arithmetic mean of the six numbers provided in each proposal.

43. The Department had not intended for the commission

percentages to be a veraged in this manner. Instead, they had

intended that a weighted mean would be calculated. That is,

they intended that five times the commission percentage shown

for the initial contract term would be added to the commission

percentages for the five re newal years, with that sum then being

divided by ten, the total numb er of years (Ðdivide by tenÑ).

44. The Department did not clearly express this intent in

section 6.1.5. Mr. Viefhaus testified that based upon the

language, Securus believed that in Phas e 5 the Department would

compute the average commission rate the way that Ms. Hussey

actually did it, taking the arithmetic mean of the six

commission percentages provided by each vendor, and that

therefore Securus prepared its submission with that calcula tion

in mind. 5/

45. Mr. Montanaro testified that based upon the language,

GTL believed that in Phase 5 the Department would Ðdivide by

ten,Ñ tha t is, compute the weighted mean covering the ten - year

period of the contract, and that GTL filled out its Cost

Proposal table based upon that understanding.

46. The DOC posted a notice of its intent to negotiate

with GTL, Securus, and EPSI on June 3, 2013. Telmate, LLC , was

not chosen for negotiations. 6/

47. Following the Notice of Intent to Negotiate was this

s tatement in bold print:

Failure to file a protest within the time

prescribed in Section 120.57(3), Florida

Statutes, or failure to post the bond or

other security required by law within the

time allowed for filing a bond shall

constitute a waiver of procee dings under

Chapter 120, Florida Statutes.

48. On June 14, 2013, the DOC issued a Request for Best

and Final Offers (RBAFO), directing that Best and Final Offers

(BAFO) be provided to the DOC by June 18, 2013.

Location - Based Services

4 9. The RBAFO incl uded location - based services of called

cell phones as an additional negotiated service, requesting a

narrative description of the service that could be provided.

The capability to provide location - based servi ces had not been

part of the original ITN, but discussions took place as part of

the negotiations.

50. Securus contends that EPSI was not a responsible

vendor because it misrepresented its ability to provide such

l ocation - b ased s ervices through 3Cinteractive, Inc. (3Ci).

51. EPSI demonstrated that it had indicated to the

Department during negotiations that it did not have the

capability at that time, but that the capability could easily be

added. EPSI showed that due to an earlier call it received from

3Ci, it believed that 3Ci wo uld be able to pro vide location -

based services to it. EPSI was also talking at this time to

another company, CTI, which could al so provide it that

capability.

52. In its BAFO, EPSI indicated it could provide these

services, explained that they wo uld require payments to a third -

party provider, and showed a corresponding financial change to

their offer.

53. No competent evidence showed whether or not 3Ci was

actually able to provide that service on behalf of EPSI, either

at the time the BAFO was submitted, or earlier. EPSI showed

that it believed 3Ci was available to provide that service,

however, and there is no basis to conclude that EPSI in any way

misrepresented its ability to provide location - based services

during negotiations or in its BAFO.

Language of the RBAFO

54. The RBAFO provided in part:

This RBAFO contains Pricing, Additional

Negotiated Services, and Value Added

Services as discussed during negotiation and

outlined below. The other specifications of

the original ITN, unless modified in the

RBAFO, remain in e ffect. Respondents are

cautioned to clearly read the entire RBAFO

for all revisions and changes to the

original ITN and any addenda to

specifications, which are incorporated

herein and made a part of this RBAFO

document.

Unless otherwise modified in this Request

for Best and Final Offer, the initial

requirements as set forth in the

DepartmentÓs Invitation to Negotiate

document and any addenda issued thereto have

not been revised and remain as previously

indicated . Additionally, to the extent that

portion s of the ITN have not been revised or

changed, the previous reply/initial reply

provided to the Department will remain in

effect.

55. These two introductory paragraphs of the RBAFO were

confusing. It was not clear on the face of the RBAFO whether

Ðother specificationsÑ excluded only the pricing information to

be supplied or also the specifications indicating how that

pricing information would be calculated or evaluated. It was

not clear whether Ðother specificationsÑ were the same thing as

Ðinitial requ irementsÑ wh ich had not been revised . It was not

clear whether scoring procedures constituted Ðspecifications.Ñ

While it was clear that , to the extent not revised or changed by

the RBAFO, initial replies that had been submitted -- including

Statements of Qualifications, Technical R esponse, Financial

Documentation, and Cost Proposals -- would Ðremain in effect,Ñ

it was not clear how, if at all, these would be considered in

determining the best value to the State.

56. In the RBAFO under the heading ÐPRICIN G,Ñ vendors were

instructed to provide their BAFO for rates on a provided Cost

Proposal table which was virtually identical to the table that

had been provided earlier in the ITN for the evaluation stage,

including a single square within which to indicate a commission

rate for the initial five - year contract term, and five squares

within which to indicate commission rates for each of five

renewal years.

57. The RBAFO stated that the Department was seeking

pricing that would provide the Ðbest value to the st ate.Ñ It

included a list of 11 additional services that had been

addressed in negotiations and stated that , Ðin order to provide

the best value to the state , Ñ the Department reserved the right

to accept or reject any or all of these additional services. It

provided that after BAFOs were received, the Negotiation Team

would prepare a summary of the negotiations and make a

recommendation as to which vendor would provide the Ðbest val ue

to the state.Ñ

58. The RBAFO did not specify selection criteria upon

wh ich the determination of best val ue to the State would be

based.

59. In considering commission percentages as part of their

determination as to which vendor would receive the contract, the

Negotiation Team decided not to consider commissions that had

been listed by vendors for the renewal years, co ncluding that

the original five - year contract term was all that was assured,

since renewals might or might not occur.

60. On June 25, 2013, the DOC posted its Notice of Agency

Decision stating its intent to awar d a contract to EPSI .

Protests and the Decision to Reject All Replies

61. Subsequent to timely filing notices of intent to

protest the intended award, Securus and GTL filed Formal Written

Protests with the DOC on July 5 and 8, 2013, respectively.

62. The Department considered and compared the protests.

It determined that language in the ITN directing that in Phase 5

the highest commission would be determined by averaging the

price for the original contract term with the prices for the

renewal years was a mbiguous and flawed. It determined that use

of a table with six squares as the in itial cost sheet was a

mistake.

63. The Department determined that the language and

structure of the RBAFO could be read one way to say that the

Department would use the sam e methodology to evaluate the

pricing in the negotiation stage as had been used to evaluate

the Initi al Cost sheets in Phase 5, or could be read another way

to mean that BAFO pricing would not be evaluated that way. It

determined that the inclusion in the RBAFO of a table virtually

identical to the one used as the ini tial cost sheet was a

mistake.

64. The Department determined that the language and the

structure of the RBAFO could be read one way to require further

consideration of such factors as the Sta tement of Qualifications

and Technical Response in determining best value to the S tate,

or could be read another way to require no further consideration

of these factors.

65. The Department prepared some spreadsheets

demonstrating the varying results that would be obtained using

Ðdivide by sixÑ and Ðdivide by tenÑ and also considered a

spreadsheet that had been prepared by Securus. The Department

considered that its own Contract Manager had interpreted the

Phase 5 instructions to mean Ðdivide by six,Ñ whi le the

Department had actually intended the instru ctions to mean

Ðdivide by ten.Ñ

66. The De partment had intended that the N egotiation T eam

give som e weight to the renewal - year pricing, and had included

the pricing table in the RBAFO for that reason, not simply to

comply with statutory requirements regarding renewal pricing.

The Department determined that the way the RBAFO was written and

the inclusion of the chart required at least some consideration

of ten - year pricing, and th at vendors had therefore be en misled

when the N egotiation T eam gave no consideration to the

commission perc entages for the renewal years.

67. Specifically, based upon the Securus protest, the

Department determined that the RBAFO language had been

interpreted by Securus to require t hat the Phase 5 calculation

of average commission percentage be carried over to evaluation

of the pricing in the BAFOs, which Securus had concluded meant

Ðdivide by six.Ñ

68. The Department further determined that based upon the

GTL protest, the RBAFO lan guage had been interpreted by GTL to

require the Department to consider the renewal years in pricing,

as well as such things as the Statement of Qualifications and

Techni cal Response in the BAFO stage.

69. The Department determined that had Ðdivide by six Ñ

been used in evaluating the BAFOs , Securus would have a computed

percentage of 70 percent, higher than any other vendor.

70. The Department concluded that the wording and

structure of the ITN and RBAFO did not create a level playing

field to evaluate re plies because they were confusing and

ambiguous and were not understood by everyone in the same way.

Vendors naturally had structured their replies to maximize their

chances of being awarded the contract based upon their

understanding of how the replies w ould be evaluated. The

Department concluded that vendor pricing might have been

different but for the misleading language and structure of the

ITN and RBAFO.

71. The Department did not compute what the final award

would have been had it applied the sco ring procedures for the

initial cost sheets set forth in section 6.1.5 to the cost

elements of the BAFOs. The Department did not compute what the

final award would have been had it applied the scoring

procedures for the Statement of Qualifications and Tec hnical

Response set forth in section 6.1.3 to the BAFOs.

72. Ms. Bailey testified that while she had originally

approved the ITN, she was unaware of any problems, and that it

was only later, after the protests to the Notice of Intended

Award had been file d and she had reviewed the specifications

again, that she had come to the conclusion that the ITN and

RBAFO were flawed.

73. Following the protests of the intended award by GTL

and Securus, on July 23, 2013, the DOC posted to the Vendor Bid

System a Not ice of Revised Agency Decision stating the DOCÓs

intent to reject all replies and reissue the ITN.

74. On August 5, 2013, EPSI, GTL, and Securus filed formal

written protests challenging DOCÓs intended decision to reject

all replies. Securus subsequently withdrew its protest to DOCÓs

rejection of all replies.

75. As the vendor initially notified that it would receive

the contract, EPSIÓs substantial interests were affected by the

Department's subsequent decision to reject all replies.

76. GTL alleged t he contract had wrongly been awarded to

EPSI and that it should have received the award, and its

substantial interests were affected by the Department's

subsequent d ecision to reject all replies.

77. The Department did not act arbitrarily in its d ecision

to reject all replies.

78. The Department did not act illegally, dishonestly , or

fraudulently in its decision to reject all replies.

79. EPSI would likely be harmed in any re - solicitation of

bids relative to its position in the first ITN, because

potenti al competitors would have detailed information about

EPSIÓs earlier reply that was unavailable to them during the

first ITN.

80. An ITN requires a great deal of work by the Department

and creates a big demand on Department resources. The decision

to reje ct all repl ies was not undertaken lightly.

81. The State of Florida would likely benefit in any new

competitive solicitation 7/ because all vendors would be aware of

the replies that had been submitted earlier in response to the

ITN, and bidders would like ly try to improve upon those

proposals to improve their chances of being awarded the

contract.

CONCLUSIONS OF LAW

82. The Division of Administrative Hearings has

jurisdiction over the subject matter and the parties in this

case under sections 120.569 and 120.57(3), Florida Statutes

(2013) .

83. All fou r protests were timely filed.

84. Petitioners protesting the DepartmentÓs proposed

agency actions bear the burden of proof. § 120.57(3)(f); State

Contr. and Eng Óg Corp. v. Dep't of Transp ., 709 So. 2d 607, 609

(Fla. 1st DCA 1998) .

Point of En try to Challenge Responsiveness

85. Section 287.057(1)(c)4. provides in part:

The agency shall evaluate replies against all

evaluation criteria set forth in the

invitation to negotiate in order to establish

a competi tive range of replies reasonably

susceptible of award. The agency may select

one or more vendors within the competitive

range with which to commence negotiations.

86. Consistent with this statute, the Department posted

its Notice of Intent to Negotiate with EPSI, GTL, and Securus,

including point of entry language.

87. Prior to hearing, and in response to pleadings

indicating that GTL and Securus sought to challenge the

responsibility of EPSI or the responsiveness of its reply, EPSI

sought to limit any evidence as to these issues. EPSI argued

that the Notice of Intent to Negotiate offered the appropriate

point of entry, and that failure to raise these issues at that

time meant that they had been waived. EPSI cited Verizon

Business Network Services, In c. v. Department of Corrections ,

Case No. 07 - 2468BID at ¶¶ 39, 40, 60j (Fla. DOAH Aug. 13, 2007),

rejected in part (Fla. DOC Sept. 18, 2008), a case in which the

Department previously determined that the Notice of Intent to

Negotiate had provided such a po int of entry. 8/

88. GTL and Securus countered that at the time the Notice

of Intention to Negotiate was issued, EPSIÓs reply to the

solicitation remained confidential and was exempt from the Public

Records Act under section 119.071(1)(b)2 . They argued th at the

DepartmentÓs purported creation of a clear point of entry

beginning at the time of the Notice of Intent to Negotiate was

thus ÐillusoryÑ and contrary to statute. It would be absurd,

they argued, to conclude that they had waived their right to

chall enge before they even had access to the facts that would be

require d to support such a challenge.

89. An agency normally has some discretion in determining

at what point Ðthe necessary or convenient procedures, unknown

to the APA, by which an agency trans acts its day - to - day

businessÑ 9/ crystallize into Ðagency actionÑ and so necessitate

the offering of a point of entry. A point of entry, once

offered, can be waived if the challenge is not timely asserted.

Dickerson, Inc. v. Rose , 398 So. 2d 922, 924 (Fla . 1st DCA

1981).

90. An agency is not writing with a free hand, however,

when conducting bid protest proceedings, because the statute

requires that certain points of entry must be offered.

Section 120.57(3)(a) provides that an agency shall provide a

noti ce of rights to accompany Ða decision or intended decision

concerning a solicitation, contract award, or exceptional

purchase by electronic posting.Ñ S ection 120.57(3)(b) then goes

on to expressly provide that failure to file a notice of protest

within 72 hours after notice of an agency Ðdecision or intended

decisionÑ followed by a formal written protest within 10 days

consti tutes waiver.

91. Florida Adminis trative Code Rule 28 - 110.002(2) defines

Ðdecision or intended decisionÑ for purposes of contract

so licitation and award:

(2) ÐDecision or intended decisionÑ means:

(a) The contents of a solicitation,

including addenda;

(b) A determination that a specified

procurement can be made only from a single

source;

(c) Rejection of a response or all

respon ses to a solicitation; or

(d) Intention to award a contract as

indicated by a posted solicitation

tabulation or other written notice.

92. Whatever its discretion to offer other points of

entry, the Department is thus statutorily compelled to offer an

o pportunity for hearing at the time it gives notice of its

intention to award a contract. Section 287.057(1)(c)4. provides

that the award shall be made to the Ðresponsible and responsive

vendor that the agency determines will provide the best value to

the state, based on the selection criteria.Ñ The determination

that the winning bidder is responsible and responsive is thus an

integral part of the decision to award. An agency cannot

effectively rewrite the statute through procedures that purport

to winnow off and insulate from later challenge various

components of its intended decision before that decision has

even been announced. S tatutorily mandated points of entry

cannot be modified or vitiate d by such agency initiatives.

EPSIÓs Responsibility and Resp onsiveness

93. Although the pre - hearing ruling thus denied EPSIÓs

motions to limit the introduction of evidence as to its

responsibility or the responsiveness of its reply, no pre -

hearing motion was filed contesting EPSIÓs standing. Cf . Peace

River/Manas ota Reg'l Water Supply Auth. v. IMC Phosphates Co. ,

18 So. 3d 1079, 1081 n. 2 (Fla. 2d DCA 2009)(though standing is

usually a threshold issue, where facts need to be developed to a

great degree, judicial economy may be served by considering

standing in the hearing on the merits).

94. Section 287.012(24) defines a responsible vendor as "a

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."

95. EP SI demonstrated at hearing that it had the

capability to fully perform the contract requirements utilizing

the resources of its parent company and those of subcontractors

and it made no misrepresentations regarding its structure or

relationship with other entities. It showed that it had the

integrity and reliability to assure good faith performance of

the contract. EPSI was a responsible vendor.

96. A responsive vendor is defined by section 287.012(26)

as "a vendor that has submitted a bid, proposal, o r reply that

conforms in all material respects to the solicitation."

97. EPSI demonstrated at hearing that its reply was

responsive to provisions of the ITN relating to call - recording,

call - forwarding, business and corporate experience disclosures,

and ca pabilities to perform the contract, and that its reply

otherwise conformed in all material respects to the

solicitation. EPSI was a responsive vendor.

98. GTL also demonstrated that it had the capability in

all respects to fully perform the contract re quirements and the

integrity and reliability to assure good faith performance, and

so was a responsible vendor. GTL similarly demonstrated that

its reply conformed in all material respects to the

solicitation, and th at it was a responsive vendor.

99. In order to demonstrate standing, a party must show :

1) that he will suffer injury in fact which is of sufficient

immediacy to entitle him to a section 120.57 hearing, and

2) that his substantial injury is of a type or nature which the

proceeding is designed to protect. The first aspect of the test

deals with the degree of injury. The second deals with the

nature of the injury. Agrico Chem. Co. v. Dep't of Envtl. Reg. ,

406 So. 2d 478, 482 (Fla. 2d DCA 1981) .

100. The Department had announced that EPSI wou ld be

awarded the contract. As a responsive and responsible vendor,

EPSIÓs substantial interests were thus affected by the

subsequent decision to reject all replies, and EPSI has

standing. Westinghouse Elec. Corp. v. Jacksonville Transp.

Auth. , 491 So. 2 d 1238, 1240 (Fla. 1st DCA 1986). GTL, a

responsive and responsible vendor alleging irregularities in

evaluation of the BAFOs and an incorrect award to EPSI, also has

standing to challenge the rejection of all replies. Couch

Const r . Co. v. DepÓt of Trans p. , 361 So. 2d 172 (Fla. 1st DCA

1978).

Rejection of All Replies

101. In a proceeding brought to protest intended rejection

of all competitive proposals, the applicable standard of review

is that developed in Department of Transportation v. Groves -

Watkins Constructors , 530 So. 2d 912, 914 (Fla. 1988), a case in

which the Florida Supreme Court held that the administrative law

judge's responsibility Ðis to ascertain whether the agency acted

fraudulently, arbitrarily, illegally or dishonestly." The

statute w as later amended to reflect that this is the applicable

standard when all replies are rejected. § 120.57(3)(f) .

102. This is a stringent burden. As the First District

has stated, "an agency's rejection of all bids must stand,

absent a showing that the ' purpose or effect of the rejection is

to defeat the object and integrity of competitive bidding.'"

Gulf Real Props., Inc. v. Dep't of HRS , 687 So. 2d 1336, 1338

(Fla. 1st DCA 1997).

103. No party here has alleged that the Department acted

fraudulently or dishonestly. There has been no evidence that

the rejection of all replies was illegal, as distinct from

contentions that it was arbitrary. This leaves only the

question of whether the Department's intended decision to r eject

all replies is arbitrary.

10 4. An arbitrary decision is one that is not supported by

facts or logic, or is despotic. Agrico Chem. Co. v. Dep't of

Envtl. Reg. , 365 So. 2d 759, 763 (Fla. 1st DCA 1978) .

105. Where an agency, in deciding to reject all replies,

has engaged in an honest , lawful, and rational exercise of its

"wide discretion in soliciting and accepting bids for public

improvements , " its decision will not be overturned, even if it

may appear erroneous and even if reasonable persons may

disagree. DepÓt of Transp. v. Groves - Watkins Constructors , 530

So. 2d 912, 913 (Fla. 1988) (quoting Liberty Cnty. v. Baxter's

Asphalt & Concrete , 421 So. 2d 505, 507 (Fla. 1982)) .

106. An agency's discretion to reject all replies is not

unbridled, however. In applying the "arbitrary or cap ricious"

standard of review, it must be determined whether the agency

has: (1) considered all the relevant factors; (2) given actual,

good faith consideration to those factors; and (3) used reason

rather than whim to progress from consideration of each of these

factors to its final decision. Adam Smith Enters. v. DepÓt of

Envtl. Reg. , 553 So. 2d 1260, 1273 (Fla. 1st DCA 1989) . I f

agency action is justifiable under any analysis that a

reasonable person would use to reach a decision of similar

importance, the decision is neither arbitrary nor capricious.

Dravo Basic Materials Co. v. Dep't of Transp. , 602 So. 2d 632,

634 n.3 (Fla. 2d DCA 1992).

107. Evidence was adduced at hearing regarding the factors

considered by the Department in making its decision t o reject

all replies. The Department considered spreadsheets comparing

Ðdivide by sixÑ and Ðdivide by tenÑ using the commission numbers

supplied by the vendors. The Department considered that its own

Contract Manager had interpreted the Phase 5 instructi ons to

mean Ðdivide by six,Ñ though the Department had actually

intended them to mean Ðdivide by ten.Ñ The Department

considered that the protests indicated that Securus had

interpreted the RBAFO to require Ðdivide by sixÑ and GTL had

interpreted the RBAF O to bring over elements of the initial

evaluation and require the Department to give some consideration

to commission percentages. It considered that its N egotiation

T eam had not done this.

108. Petitioners can prove the Department's action

arbitrary if they demonstrate that these factors were

irrelevant, that good faith consideration was not given to them,

or that the Department did not use reason in progressing from

these factors to its decision.

109. EPSI asserts that any flaw in the scoring formula in

section 6.1.5 is irrelevant. It correctly points out that no

vendor was prejudiced by the DepartmentÓs application of the

scoring formula to the initial cost proposals in Phase 5 because

the purpose of that scoring was simply to select vendors for

nego tiation, and in fact the Department entered into negotiation

with all three vendors. However, it does not follow that the

DepartmentÓs determination that the scoring formula language was

flawed is therefore irrelevant in this proceeding.

110. The Depar tment determined that Securus read language

in the RBAFO to mean that the flawed scoring formula for Phase 5

had been incorporated by reference as selection criteria in

determining the best value to the S tate. The Department thus

determined that it was th e cumulative effect of these two poorly

worded documents, considered together, that misled Securus. The

language of section 6.1.5 is therefore relevant.

111. Consideration must also be given to the language of

section 287.057(1)(c), which provides in pa rt:

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 se t 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 ar e

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 . (emphasis added) .

112. It appears that the reference to Ðthe s election

criteriaÑ at the end of subparagraph 4. relates back to the

criteria used to determine acceptability of replies and select

vendors for negotiation, mentioned immediately before in the

same subparagraph and in subparagraph 3. If the statute does i n

fact strictly require an agency to apply these exact same

criteria at the award stage, the Invitation to Negotiate process

has lost a tremendous amount of flexibility. When, as here,

that agency has established a detailed and reasonably objective

scorin g system to be applied as the standard for determining the

acceptability of replies and selection of vendors for

negotiations, it might limit the determination of best value to

simple mathematical recalculation based upon changes in offers

by vendors.

113. On the other hand, the phrase Ðbased on the selection

criteriaÑ might be interpreted more loosely to allow an agency

to establish and describe distinct selection criteria to be

applied in determining best value. Exactly how close a

relationship these cr iteria must have to the standards that were

used to determine the acceptability of replies and select

vendors for negotiation will likely be a matter considered by

courts in the future. In any case, the legislative history of

the statute dictates that som e additional criteria beyond the

old Ðbest value to the stateÑ mantra must be applied. The

phrase Ðbased on the selection criteriaÑ was not added until

eight years 10/ after the Legislature created the Ðbest valueÑ

standard. 11/ A statute must be interpret ed to give effect to

every clause in it, and to accord meaning and harmony to all of

its parts. Larimore v. State , 2 So. 3d 101, 106 (Fla. 2008);

Jones v. ETS of New Orleans, Inc . , 793 So. 2d 912, 914 - 15 (Fla.

2001). The modifying phrase Ðbased on the se lection criteriaÑ

must be given meaning. An agency must establish selection

criteria to determine the best value to the state.

114. It is not necessary, however, to determine whether or

not the Department here violated section 287.057(1)(c)4., either

by failing to apply the exact criteria it had earlier used to

select vendors for negotiation or alternatively by failing to

establish and apply distinct criteria to determine best value to

the S tate. 12/ While there is no reason to conclude that the

Departmen tÓs rejection of all replies was predicated upon any

conviction that it had violated this statute, the record does

indicate that the Department based its decision to reject all

replies on a closely related issue: that the ITN specifications

and RBAFO, tak en together, were not clear as to how the

Department was going to select the winning vendor .

115. The goals and purposes of competitive procurement

statutes are clear:

[T]he object and purpose of this statute is

to protect the public against collusive

con tracts; to secure fair competition upon

equal terms to all bidders; to remove not

only collusion but temptation for collusion

and opportunity for gain at public expense;

to close all avenues to favoritism and fraud

in its various forms; to secure the best

values for the county at the lowest possible

expense, and to afford an equal advantage to

all desiring to do business with the county,

by affording an opportunity for an exact

comparison of bids.

Wester v. Belote , 138 So. 721, 723 - 24 (Fla. 1931) .

116. In Caber Systems, Inc. v. Department of General

Services , 530 So. 2d 325, 334 (Fla. 1st DCA 1988) , it was held

that it was not arbitrary for an agency to reject all bids where

there was ambiguity in the bid specifications:

Some bidders prepared their bids ba sed upon

the historical method of award, and others

followed more literal readings of the

invitation to bid. Thus, the specifications

did not adequately apprise the bidders of

the method of award that would be used.

117. There is evidence supporting th e DepartmentÓs

determination that Securus interpreted the language of the ITN

very literally and read it in conjunction with the language and

structure of the RBAFO to conclude that the Department was

required to Ðdivide by sixÑ in evaluating BAFOs. Evide nce also

supports the DepartmentÓs determination that GTL read both

documents differently, to require consideration of broader

aspects from the initial evaluation, and also require the

Department to give some consideration to renewal years. EPSI

interpret ed different language in the RBAFO to allow the

Department to base its award only on the commission percentage

for the initial contract term, and to provide no restriction on

how the Department would determine the Ðbest value to the

stateÑ.

118. The Dep artment reasonably concluded that the

introductory language in the RBAFO , along with the Cost Proposal

table there, when considered in light of the detailed directions

as to what and how the initial replies would be evaluated, had

led to ambiguity as to th e selection criteria the Department

would be using to determine which vendor offered the best value

to the S tate. It further concluded that it had failed to

apprise vendors of the criteria for award, and had affected the

preparation of their replies. See Aurora Pump, Div. of Gen.

Signal Corp. v. Goulds Pumps, Inc. , 424 So. 2d 70, 74 - 75 (Fla.

1st DCA 1982).

119. The DepartmentÓs conclusion that these ambiguities

destroyed its ability to fairly compare replies cannot be said

to be irrational. There was e vidence upon which the Department

could conclude that the vendors conformed their commission

pricing to their respective interpretations of the ITN and RBAFO

to maximize their opportunity to be awarded the contract, and

this evidence was before the Departm ent at the time it made the

d ecision to reject all replies.

120. There are few, if any, aspects of a solicitation more

fundamental and material than the basis of award. The

evaluation of the commission percentage alone would be material,

for the commissi on paid by a vendor is the single largest

expense in the industry. If vendors were misled as to the

selection criteria, rejection was appropriate. Cf. Capeletti

Bros. v. State Dep't of Gen . Servs. , 432 So. 2d 1359, 1363 (Fla.

1st DCA 1983)(error in site drawings was not so material as to

require agency to reject all bids where there was no evidence

that anyone was misled) .

121. GTL argues that the case of Austin Construction

Corporation v. Department of Management Services , Case No. 94 -

006082BID (Fla. DO AH Dec. 16, 1994; Fla. DMS Dec. 21, 1994) ,

instructs that if bids can be accurately compared by conducting

a simple mathematical calculation, that should be done, and in

such a case all bids should not be rejected. While the

principle of Austin is undoubt edly correct, it is not applicable

in the instant case. The DepartmentÓs motivation here to reject

all replies was not because different methods had been used to

convey pricing in the various replies, which could be made

uniform by subjecting them to a si mple mathematical calculation.

Instead, the Department conclud ed that the ITN and RBAFO misle d

vendors into making different bids than they would have made had

the selection criteria been made clear. If the Department is

correct, no after - the - fact mathem atical adjustment could remedy

that error.

122. While reasonable persons might disagree with the

DepartmentÓs conclusion that Securus and GTL were misled by

Department documents, and that this affected their replies and

the fairness of the solicitation, t here is evidence to support

it, and there is no reason to conclude that the DepartmentÓs

determination was not made in good faith. The DepartmentÓs

decision to reject a ll replies was not arbitrary.

123. Petitioners have not met their burden to show that

the rejection of all replies was illegal, arbitrary, dishonest,

or fraudulent.

Award to EPSI

124. As it has been determined that the DepartmentÓs

intended decision to reject all replies is not illegal,

arbitrary, dishonest, or fraudulent, the earlier in tended

decision to award the contract to EPSI need not be considered .

RECOMMENDATION

Upon consideration of the above findings of fact and

conclusions of law, it is

RECOMMENDED:

That the Department of Corrections issue a final order

finding that the reject ion of all replies submitted in response

to ITN 12 - DC - 8396 was not illegal, arbitrary, dishonest, or

fraudulent, and dismissing all four protests.

DONE AND ENTERED th is 1st day of November , 2013 , in

Tallahassee, Leon County, Florida.

S

F. SCOTT BOYD

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 1st day of November , 2013 .

ENDNOTES

1/ The ITN also called for telephone rates to be paid by inmates

and their families, including rates for renewal years. The

solicitation of telephone rates is barely discusse d here because

it raises issues similar to those involving commission

percentages and there is less variation in telephone rate

pricing.

2/ The ITN provision does not appear to implement Florida

Administrative Code Rule 33 - 602.205(3) at all, but instead

appears to be seeking to establish a new system. The rule

actually provides that if an attorney telephone number is placed

on an inmateÓs telephone list , it is thereby subjected to

recording. The rule requires the use of a specially designated

phone that is not even connected to the monitoring system if a

call is not to be recorded. The ITN, in contrast, describes a

system with capability to Ðturn offÑ the recording function with

respect to certain telephone nu mbers that appear on the list.

3/ Addendum #2 eliminated Managed Access Solutions from the

solicitation and struck references to it.

4/ A second table was also provided to contain commission rates

and telephone rates applicable to proposals including managed

access, but , as noted , this option wa s later abandoned.

5/ ÐDivide by sixÑ is not a logical method of computing average

commission percentage because it bears no relationship to the

actual contract term. The arithmetic mean calculated from the

commission rates supplied by Securus could not actually ever be

realized. However, if Securus was correct in its belief that

this was the method that the Department was required to use (or

would use), it would be logical for Securus to use Ðdivide by

sixÑ in preparing its reply, perhaps especially so if it

correctly bel ieved others would not do so.

6/ Although TelmateÓs bid was found non - responsive, it is clear

from the language of section 287.057(1)(c)4. that those vendors

not found responsible or responsive and those vendors with whom

the agency n egotiates are not necessarily exclusive categories.

Based upon criteria set forth in an ITN, an agency is free to

choose not to negotiate with a responsible and responsive bidder,

or even one that falls Ðwithin the competitive range.Ñ Although

Ms. Hussey testified that Telmate was not included on the short

list because they were ÐnonresponsiveÑ on their financials, the

ITN provided at section 2.4 that the Department intended to

conduct negotiations with Ðone or moreÑ qualified respondents

while introducto ry provisions in section 6 stated that the

Department would establish a committee to evaluate and select the

Ðthree highest ranking responses.Ñ

7/ It is not clear that an ITN would be appropriate because the

Department may now know what additional serv ices it desires and

because the managed access component that provided major

justification for that type of procurement is evidently no

longer being solicited.

8/ It appears that the arguments found persuasive here as to the

effect of rule 28 - 110.002(2) and the point of entry mandated by

section 120.57(3)(b) were not presented to the ALJ or to the

Department in Verizon . Given the conclusion that

section 120.57(3)(b) offers a point of entry upon the posting of

the decision or intended decision, the issue of lack of

authority of the Department to provide additional points of

entry without modification of either the statute or the uniform

rules, as suggested by GTL and Securus, does not arise under the

facts of this case. However, assuming the Department ha s such

authority, it must be exercised in such a manner as to provide

effective access to a substantial interests hearing. A point of

entry may be too early as easily as too late. Cf . Gen. Dev.

Utils. v. Fla. Dep't of Envtl. Reg. , 417 So. 2d 1068, 1070 ( Fla.

1st DCA 1982)(Ðsimply providing a point of entry is not enough

if the point of entry is so remote from the agency action as to

be ineffectual as a vehicle for affording a partyÑ a fair

opportunity to challenge). A point of entry at t he Notice of

Inte nt to Negotiate may well be premature, at least as to chosen

vendors seeking to challenge the responsiveness of their

competitorsÓ replies, as opposed to a vendor challenging its own

non - selection. It is recommended that in its final order the

Department explain this and recede from its conclusion in

Verizon . The Department might also wish to re - examine its

purposes in providing this earlier point of e ntry not discussed

in the ITN.

9/ Capelletti Bros., Inc. v. DepÓt of Transp. , 362 So. 2d 346,

348 (Fla. 1st DCA 1978).

10/ Section 19 of chapter 2010 - 151, Laws of Florida, added

Ðbased upon the selection criteria.Ñ

11/ Section 15 of chapter 2002 - 207, Laws of Florida, codified

the Ðbest value to the stateÑ language.

12/ No vendor here filed a timely challenge to the

specifications for failing to set forth the selection criteria

to be used in determining the best value to the state, and so

any protest on this ground was waived. Consultech of

Jacksonville v. Dep't of Health , 876 So. 2d 731, 734 (Fla. 1 st

DCA 2004). Neither has any vendor argued that the failure of

the Department to subsequently establish such criteria in the

RBAFO wa s contrary to the statute.

COPIES FURNISHED

Jonathan P. Sanford, Esquire

James Fortunas, Esquire

Department of Correct ions

501 South Calhoun Street

Tallahassee, Florida 32399

Robert H. Hosay, Esquire

Foley and Lardner, LLP Suite 900

106 East College Avenue

Tallahassee, Florida 32311

John A. Tucker, Esquire

Foley and Lardner, LLP Suite 1300

1 Independent Drive

J acksonville, Florida 32202

W. Robert Vezina, III, Esquire

Eduardo S. Lombard, Esquire

Vezina, Lawrence and Piscitelli, P.A.

413 East Park Avenue

Tallahassee, Florida 32301

Amy W. Schrader, Esquire

William E. Williams, Esquire

Gray Robinson, P.A. Suite 600

301 South Bronough Street

Tallahassee, Florida 32301

Michael D. Crews, Secretary

D epartment of C orrections

501 South Calhoun Street

Tallahassee, Florida 32399 - 2500

Jennifer Parker, General Counsel

D epartment of C orrections

501 South Calh oun Street

Tallahassee, Florida 32399 - 2500

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 ag ency that will

issue the final order in this case.