14-000985BID Keefe Commissary Network, L.L.C. vs. Department Of Corrections Status: Closed Recommended Order on Monday, June 9, 2014.

Summary: Petitioner failed to prove that Respondent acted contraty to its governing statutes, rules or policies, or the bid specifications.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

KEEFE COMMISSARY NETWORK,

L.L.C.,

Petitioner,

vs. Case No. 14 - 0985BID

DEPARTMENT OF CORRECTIONS,

Respondent,

and

TRINITY SERVICES GROUP, INC.,

AND ARAMARK CORRECTIONAL

SERVICES, L.L.C.,

Intervenors.

_______________________________/

RECOMMENDED ORDER

On April 15 and 16, 2014, the Division of Administrative

Hearings (DOAH) conducted a final hearing in Tallahassee,

Florida, before Thomas P. Crapps, an Administrative Law Jud ge

assigned by DOAH.

APPEARANCES

For Petitioner Keefe Commissary Network, LLC :

David C. Ashburn, Esquire

Hayden R. Dempsey, Esquire

Greenberg Traurig, P.A.

101 East College Avenue

T allahassee, Florida 32301

For Respondent Department of Corrections :

Jonathan P. Sanford, Esquire

James Fortunas, Esquire

Florida Department of Corrections

501 South Calhoun Street

Tallahassee, Florida 32399 - 2500

For Intervenor Trinity Services Group, Inc. :

Donna E. Blanton, Esquire

Brittany Adams Long, Esquire

Radey Law Firm

301 South Bronough Street, Suite 200

Tallahassee, Florida 32301

For Intervenor Aramark Correctional Service, LLC :

Karen D. Walker, Esquire

Mia L. McKown, Esquire

Holland and Knight LLP

315 South Calhoun Street, Suite 600

Tallahassee, Florida 32301

STATEMENT OF THE ISSUE

Whether the Florida Department of Corrections Ó (Department)

intended decision to award Trinity Services Group, Inc. (Trinity)

with a contract for Statewide Canteen Operations under Invitation

to Bid, DOC ITB - 13 - 015 (ITB), is contrary to the agencyÓs

governing statutes, rules or policies, or the bid specifications.

PRELIMINARY STATEMENT

On December 9, 2013, the Department issued an ITB seeking to

solicit bids for the provision of Statewide Cante en services for

inmates and their visitors at the DepartmentÓs facilities.

Trinity ; Aramark Correctional Service, LLC (Aramark) ; and

Keefe Commissary Network, LLC (Keefe) submitted bids for

consideration. On February 4, 2014, the Department posted its

int ent to award Trinity with the contract.

On February 7, 2014, Keefe timely filed a bid protest with

the Department. On February 20, 2014, Trinity intervened in the

protest. Aramark did not file a bid protest, but filed a Notice

of Appearance as a Named Pa rty based on KeefeÓs allegations that

Aramark was not a responsive or responsible bidder.

On March 4, 2014, the Department transferred KeefeÓs bid

challenge to DOAH for a final hearing. The undersigned held a

Case Management hearing on March 11, 2014. Du ring the Case

Management hearing, the parties requested that the final hearing

be set outside of the 30 - day time limit contained in

section 120.57(3)(e), Florida Statutes (2013), 1 / in order to

conduct discovery. Because the parties waived the time

requir ement, the undersigned set the final hearing for April 15

through 18, 2014.

At the final hearing, the parties introduced Joint Exhibits

numbered 1 through 38. 2 /

Keefe presented the testimony of Rosalyn Ingram, the

DepartmentÓs bureau chief for Procuremen t, Land and Leasing , and

General Services (Ms. Ingram); Jon Creamer, the DepartmentÓs

bureau chief for Contract Management and Monitoring

(Mr. Creamer); and William Bosco (Mr. Bosco), KeefeÓs vice -

president for Southeast Region. The Department presented the

testimony of Ms. Ingram and Mr. Creamer. 3 / In addition to

Ms. Ingram and Mr. Creamer, the Department presented the

testimony of Shane Phillips (Mr. Phillips), the DepartmentÓs

o perations m anager for the canteen - contract. Keefe introduced

Exhibits K - 1, K - 2, and K - 4 into evidence .

Trinity presented the testimony of Patrick Tolliver

(Mr. Tolliver), TrinityÓs v ice - p resident for Information

Technology, and James Long (Mr. Long), TrinityÓs chief executive

officer inity introduced Exhibits T - 1 through T - 5, T - 7, T - 8

and T - 13.

Aramark participated in the final hearing, but did not

present any witnesses or offer any exhibits into evidence.

FINDING S OF FACT

1. The Department is the state agency that is charged with

the purpose of Ðprotect[ing] the public through the incarceration

and supervision of offenders and to rehabilitate offenders

through the application of work, programs, and services . Ñ

§ 20.315(1), Fla. Stat. The Department considers its provision

of canteen commissary services to inmates and their visitors an

integral part of its responsibilities regarding inmate

supervision. 4/

2. Keefe is the largest private provider for canteen

services in correctional facilities nationwide. Since 2003,

Keefe has provided the Department with canteen servic es for

inmates. 5 / KeefeÓs existing contract with the Department provides

canteen services for approximately 89,000 inmates and their

families, and the contract is the largest private canteen

services contract in the nation. KeefeÓs gross revenue generate d

under the existing contract with the Department is approximately

$79 million dollars. Furthermore, under the existing contract,

Keefe pays the Department a per diem rate of $0.96 per inmate,

per day, which generates over $30 million dollars annually.

3. Trinity is a Florida corporation that provides food,

canteen , and laundry services to correctional facilities in 45

states, and services 650 canteen accountsinity consists of

subsidiaries, A & S and Swanson, which Trinity acquired with its

focus o f providing services in correctional facilities.

4. Aramark is also in the business of providing canteen

services in correctional facilities.

5. On December 9, 2013, the Department released the ITB

seeking bids for providing statewide canteen operati ons through

the DepartmentÓs on - site inmate canteens and visitor park

canteens. According to the ITB, the Department was seeking a

vendor to serve a current population of 89,000 inmates, at 267

canteens and 106 visiting park canteens. 6 /

6. Under the ITB, the Department does not pay the winning

bidder for providing canteen services. Rather, as the ITB

explains, the selected bidder pays the Department on a per diem

basis of fixed fee, per day, per inmate based on the DepartmentÓs

official midnight count. The responsive, responsible bidder that

provided the Department with the highest per diem rate, per

inmate would be considered the successful bidder.

7. The ITB set out a time frame for implementation of the

statewide canteen operations. Bids were to b e submitted and

opened on January 21, 2014. The contract was to begin March 6,

2014 , with full implementation of the canteen operations by

April 1, 2014.

8. The ITBÓs initial language concerning the implementation

and start of the canteen contract req uired full service delivery

of canteen operations at all institutions by April 1, 2014, but

also recognized a 90 - day Ò start - up Ó period for the initial

delivery of equipment, supplies , hiring and training of

Contractor staff , and transition of services from the current

contractor.Ñ 7 /

9. The ITB also attached a Master Canteen Product List as

Exhibit A, listing the products and prices for each product that

was to be sold in the canteen.

10. The Department compiled the Master Canteen Product List

based on the list of products currently offered by the incumbent

provider, Keefe. The prices found in the Master Canteen Product

List for each product had been previously determined by the

Department and Keefe based on section 94 5.215, Florida Statutes ,

which req uires that the price not exceed fair market price .

11. Before releasing the ITB with the Master Canteen

Product List, the Department reviewed the products sold in the

canteens, and attempted to remove any items it identified by name

as being proprietary to Keefe. For example, the Department

removed KeefeÓs own brand of potato chips , Moon Lodge , from the

Master Canteen Product List.

12. The ITB provided prospective bidders the opportunity to

submit written inquires to the Department concerning the ITB by

January 3, 2014.

13. The Department received written questions and posted

its responses in the ITB in Addendum 1 on January 10, 2014.

Addendum 1 provided answers to questions about the ITBÓs

specifications ; revised certain ITB specifications and Exhi bits

A, B and H ; and added new ITB Exhibits I, J, K and L.

14. Addendum 1 amended the beginning date of the contractÓs

implementation to February 3, 2014 , and the date for full - service

delivery at all Department institutions by April 1, 2014.

(Addendum 1, 2.4, revised page 10). Importantly, for this case,

the Department revised section 2.4 , deleting its allowance of a

90 - day Ðstart - upÑ period for the transition of the canteen

contract. 8 /

15. Further, Addendum 1 removed certain proprietary items

from t he Master Canteen Products List found in the ITB.

Questions submitted to the Department in Addendum 1 show, in

pertinent part, th at potential bidders expressed concerns about

the ability to provide certain products that the incumbent

provider, Keefe, had proprietary interest or exclusive right to

sell from the manufacturer. 9 / The Department answered, in

essence, that the successful bidder was required to provide all

products listed for re - sale identified on the Master Canteen

Product List and that s ection 3.10 of the ITB set out the process

for the successful bidder to seek substitutions on the Master

Canteen Product List.

16. After the DepartmentÓs issuance of Addendum 1,

Mr. Stephen Hould, TrinityÓs g eneral c ounsel , emailed a letter on

January 13, 20 14 , to the Department expressing TrinityÓs

concerns . Specifically, Mr. Hould raised issues that Trinity

believe would negatively impact the capacity to respond to the

ITB with a competitive bid.

17. Mr. HouldÓs letter question ed the ability to implement

the canteen services timely and requested information about the

cash sales in Visitor Parks , and about determining the amount of

revenue generated from the sale of the proprietary items removed

from the Master Canteen List.

18. On the specific issue co ncerning the implementation

date, Mr. Hould wrote the following:

The Recommended Award is scheduled to be

posted on January 28, 2014, and the ITB

requires that implementation commence

February 3, 2014 , and be complete at all

institutions by April 1, 2014. (Addendum 1,

2.4, Revised Page 10). That schedule does

not allow sufficient time to establish the

pilot program at Jefferson C.I., complete the

field testing of the Point of Sale Equipment

required by 4.5 of the ITB, enter into a

contract, acquire, insta ll and test the

necessary equipment and software, hire and

train staff and fully implement the

commissary systems at all locations. As a

result, the only vendor who can comply is the

incumbent. The current schedule defeats the

opportunity for anyone othe r than the

incumbent to offer a competitive bid.

The ITB, s ection 2.4, indicated, prior to

Addendum One, that the Department will allow

a ninety (90) day start up period for the

initial delivery of equipment, supplies and

hiring and training of Contractor staff and

transition services from the present

contractor. A ninety (90) day start up

period would be practical and allow for

competition. However, the current schedule,

if it can be met, allows only forty - one (41)

working days from commencement to the

deadline to have all canteens open which does

not allow a competitive bid.

19. Because Mr. HouldÓs letter arrived during the time

frame for a bid specifications challenge , the Department

officials seriously considered the issues raised in the letter.

20 . Upon receipt of Mr. HouldÓs letter, the Department

contacted Mr. Bosco, KeefeÓs representative, requesting

information about KeefeÓs revenues from proprietary items

identified in the usage report from the Department by the end of

the day, and the cash s ales information.

21. Mr. Bosco replied to the Department by e - mail the same

date, identifying additional proprietary products contained on

the Master Product Canteen List and providing the Department with

the cash sales information.

22. Mr. Phillips, th e DepartmentÓs canteen contract manager

for the ITB procurement, reviewed the information provided by

Mr. Bosco , and revised the Master Canteen Product List.

23. On January 16, 2014, the Department published

Addendum 2 which, in part, revised answers to certain questions

addressed in Addendum 1, and issued a revised Exhibit K and a new

Exhibit M. The revised Exhibit K provided a usage report

containing the incumbent vendorÓs proprietary items.

24. Addendum 2 did not change the implementation date f or

the canteen contract, which was April 1, 2014 , based on the ITB

and Addendum 1.

25. In reference to issues concerning the Master Canteen

Product List, Addendum 2 revised answers to questions 10, 37,

and 50. In those questions, potential bidders had asked the

Department if the ITB required the b idders to submit a product

list. The potential bidders noted that the ITBÓs Master Canteen

Product List referenced products that were proprietary to the

incumbent vendor. The Department answered that bidders were not

required to submit a product list, and that section 3.10 of the

ITB outlined the process for a successful bidder to add, delete ,

or substitute products listed on the Master Canteen Product

List. 10 /

26. No bidder protested the ITBÓs specificatio ns, including

the Addendums.

27. Keefe, Trinity and Aramark submitted bids concerning

the ITB.

28. The Department opened the bids on January 23, 2014.

29. The Department reviewed all three bids and determined

that the bids met the required mandatory bid submissions outlined

in section 5.1 of the ITB.

30. The Department conducted a review of the biddersÓ

financial documentation and determined that all of the bidders

met the ITBÓs financial requirements.

31. The Department posted its bid tabulation on F ebruary 4,

2014, and announced its recommended award to Trinity, the bidder

that the Department determined to be the first - ranked bidder.

The Department determined that Aramark was the second - ranked

bidder and Keefe was the third - ranked bidder based on th e Unit

Prices shown on the tabulation. 11/

32. Keefe filed a timely notice of intent to protest the

award to Trinity, and timely filed its formal written protest.

Implementation Date

33. The existing contract between Keefe and the Department

provided that the contract would terminate on March 31, 2014.

34. The Department began to prepare the ITB in the summer

of 2013, based on the March 31, 2014 , contractual deadline with

Keefe.

35. The Department delayed in releasing the ITB based on

internal deliberati ons concerning whether the ITB would include

only statewide canteen operations or include other programs, such

as inmatesÓ access to MP3 players. Consequently, the Department

issued the ITB on December 9, 2013.

36. The existing contract contains a provis ion requiring

the incumbent provider, Keefe, to provide a transition schedule

for a potential new vendor, if selected in competitive

procurement, 180 days before the expiration of the contract.

Keefe did not submit a transition plan.

37. The Department d id not seek to enforce KeefeÓs

contractual obligation of providing a transition plan.

38. The Department contacted Keefe about a short - term

extension of the canteen contract beyond the March 31, 2014 ,

date. Keefe did not agree to a short - term extension o f the

current canteen contract. Thus, because Keefe did not agree to

the contract extension, the Department needed a provider

beginning April 1, 2014. It is noted that Keefe, however, did

eventually agree to a short - term extension when it submitted its

f ormal bid protest.

39. Keefe as the incumbent provider of the canteen services

had a significant advantage over other bidders in being able to

meet the April 1, 2014 , deadline.

40. The ITB specifically provides that the winning bidder

Ðmust have the cap ability to commence services statewide no later

than April 1, 2014 . Ñ Section 2.4, revised in Addendum 1.

41. Section 3.5 in Addendum 1 provides, in pertinent part:

The Contractor shall have the capability to

commence implementation of services no later

t han February 3, 2014, and full service

delivery of canteen operations shall be

completed at all institutions by April 1,

2014. The ContractorÓs Estimated

Implementation Plan and Transition Date

Schedule submitted with the bid (per Section

5.2.8) shall be adjusted as necessary and

approved as ContractorÓs Final Implementation

Plan and Transition Date Schedule by the

Contract Manager. This plan shall be

designed to provide for seamless transition

with minimal interruption of sales or

operations.

42. Secti on 5.2.8 of the ITB provides, in part:

The Bidder shall provide an Estimated

Implementation Plan and Transition Date

Schedule detailing the ContractorÓs plan and

date of phase - in of service for each of the

DepartmentÓs institutional sites identified

on Exh ibit B to assure full implementation by

April 1, 2014.

* * *

Implementation by this date is critical to

service delivery and must be met to ensure

contract compliance. The Estimated

Implementation Plan is for informational

purposes only. A Fina l Implementation Plan

and Transition Date Schedule that meets the

objectives for service implementation, as

outlined in Section 3.5 shall be agreed upon

by the successful Bidder, the current canteen

operator, and the Department, with copies

provided by the Department to all parties.

43. TrinityÓs bid provided an Estimated Implementation Plan

that contained a transition schedule that identified , by

facility , the date that Trinity anticipated in being able to

assume full canteen service operations, and a s tep - by - step

implementation plan.

44. TrinityÓs bid provided that if it was the successful

bidder, then Trinity would contact Keefe about purchasing the

physical property and stock in the canteens. If Keefe was

unwilling to sell the property, then there would need to be

sufficient time for Keefe to remove their inventory. In its

Estimated Implementation Plan, Trinity states the following:

11. As all canteens will come on line

simultaneously, all canteens will close on

April 1 st for inventory of Keefe p roducts and

plan on reopening the following Monday

(April 7). This will allow time to receive

the initial orders and restock and ensure all

staff are familiar with Trinity procedures.

Each Warden will be requested to announce

this closing and allow inma tes sufficient

time to purchase additional products prior to

April 1. Individual facilities may open

sooner than April 7 if all accountability and

restocking is accomplished. Our goal will be

to reopen in time for the Visitor Park

canteen to function as normal on April 5.

45. Mr. Long, TrinityÓs chief executive officer , testified

that in preparing the ITB, Trinity determined that it could meet

the implementation deadline, contrary to Mr. HouldÓs statement in

the letter to the Department during the bid p rocess. The

undersigned finds that Mr. LongÓs assessment that Trinity could

fully implement the canteen services on April 1, 2014, as overly

optimistic, and not the basis for a finding of fact.

46. The ITB expressly provides the implementation date for

f ull canteen services as April 1, 2014 , and the Department

characterized the implementation date as ÐcriticalÑ and Ðmust be

met to ensure contract compliance.Ñ § 5.2.8, ITB.

47. TrinityÓs bid, on its face, indicates that the canteens

will close on April 1 , 2014, and re - open the following week on

April 7, 2014. Further, Trinity states in its bid that Ð [w]e

recognize that we must be flexible in our schedule and will

adjust as necessary to meet State requirements.Ñ

48. TrinityÓs bid candidly demonstrates th e difficulty of a

seamless one - day transition, from March 31 to April 1, 2014, by

describing the tasks of either purchasing KeefeÓs stock, or

allowing Keefe an opportunity to inventory and remove their

stock, and for Trinity to order new products and re - st ock the

canteens. Moreover, Trinity would be required to train the

inmate - employees with TrinityÓs procedures. Those tasks undercut

the conclusion that Trinity would be able to fully operate the

267 canteens on April 1, 2014.

49. The undersigned finds t hat TrinityÓs bid stating that

it will close the canteens on April 1, 2014, and re - open the

following week on April 7, 2014, is a deviation from the specific

date set out in the ITB.

50 . TrinityÓs bid submission concerning the implementation

date, however , is not a material deviation because it did not

give Trinity an unfair competitive advantage over Keefe or

Aramark.

Master Canteen Product List

51 . The provisions concerning the Master Canteen Product

List in the ITB are found in sections 3.8 through 3.10, which are

pertinent for this case.

52 . The Master Canteen Product List contains the list of

products that the Department approved for re - sale in the

canteens.

53 . Important for this case, section 3.10 provides a

mechanism for the selected contra ctor to make substitutions for

items on the Master Canteen Product list. Specifically,

section 3.10 provides that:

the Contractor may request that items be

substituted if no longer available from the

manufacturer for resale. Substitutions will

only be a llowed if the item to be substituted

is of the same or similar quality, packaging

and price. Product substitutions shall be

only for Brand Name Items. A contractorÓs

request for a product substitution is

submitted to the DepartmentÓs Contract

Manager, a nd a decision given within 15 days

of receipt.

54 . Section 3.5 of the ITB specifically contemplates that

the winning bidder may purchase the incumbent vendorÓs inventory

during the transition between the two contracts.

55 . During the ITB period, the b idders learned that one

product, a 20 - ounce V8 Vegetable Juice drink, listed on the

Master Canteen Product List , did not exist. Further, during the

ITB process , Keefe learned that two products, which it had

supplied , would no longer be manufactured, beef stew by Armour

and Hanes four pack of white boxer shorts. In both instances,

the potential bidders were informed that section 3.10 concerning

substitutions would apply for those products.

Information Technology

56 . Section 5 of the ITB sets out what th e bidders were

required to submit. The bidderÓs ÐTransmittal Letter with

Executive SummaryÑ was to include a Ðsynopsis of the bidderÓs

method of delivering the required services in compliance with the

minimum requirements and scope of services outlined in s ection 3,

Scope of Services, of the ITB.Ñ

57 . Section 3 of the ITB is detailed and , regarding

technology , provides an explanation of how the system works and

then lists 16 requirements for the point - of - sale system with

which the vendor must comply.

58 . Trinity certified that it would comply with all terms

of the ITB, including the technology requirements.

59 . TrinityÓs certification was supported by the credible

testimony of Mr. Tolliver. Mr. Tolliver is TrinityÓs vice -

president for Information Tech nology and was familiar with

TrinityÓs ITB bid.

60 . Mr. Tolliver testified that Trinity would provide a

point - of - sale system which did not use a keyboard, TrinityÓs

system did use a Ðstore - and - forwardÑ process in case of a failure

of the DepartmentÓs WA N, and that Trinity would be able to

perform issues such as a Ðquick disconnectÑ if a security issue

arose in the facilities.

61 . Mr. TolliverÓs testimony and TrinityÓs bid submission

show that Trinity has the ability to meet its obligation

concerning th e information technology.

CONCLUSIONS OF LAW

62 . DOAH has jurisdiction over the parties and subject

matter of this cause pursuant to sections 120.569 and 120.57(3) ,

Florida Statutes .

63 . Keefe, as the party opposing the DepartmentÓs decision

to award Trinity the canteen contract, has the burden of showing

Ða ground for invalidating the award.Ñ State Contracting and

EngÓg Corp. v. DepÓt of Transp . , 709 So. 2d 607, 609 (Fla. 1 st

DCA 1998); 120.57(3)(f), Fla. Stat . KeefeÓs challenge here is

governed by section 120.57(3)(f), Florida Statutes. 12 / The issue,

as framed by section 120.57(3)(f), is Ðwhether the agencyÓs

proposed action is contrary to the agencyÓs governing statutes,

the agencyÓs rules or policies, or the solicitation

specifications.Ñ

64 . Section 120.57(3)(f) provides that Ðt he standard of

proof for such proceedings shall be whether the proposed agency

action was clearly erroneous, contrary to competition, arbitrary,

or capricious.Ñ The statuteÓs terms Ðclearly erroneous, Ñ 13 /

Ðcontrary to competition, Ñ 14 / Ðarbitrary or capriciousÑ 15 / have

been defined in case law concerning bid protests. Finally, as

the challenger to the DepartmentÓs action, the law is clear that

Keefe must establish its burden of proof by the preponderance of

the evidenc e. 16 /

65 . The Florida Legislature expressly recognizes that Ðfair

and open competition is a basic tenant of public procurement;

that such competition reduces the appearance and opportunity for

favoritism and inspires public confidence that contracts are

awarded equitably and economically . Ñ £ 287.001, Fla. Stat.

66 . The objectives that the State seeks in having

competitive procurements are the following :

[T]o protect the public against collusive

contracts; 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 various forms; to secure the best values

for the [public] at the lowest possible

expense; and to afford an equal advantage to

all desiring to do business with the

[government], by affording an opportunity fo r

an exact comparison of bids. Harry Pepper &

Assoc. v. City of Cape Coral , 352 So. 2d

1190, 1192 (Fla. 2d DCA 1977), quoting Wester

v. Be lote , 138 So. 721, 723 - 724 (Fla. 1931).

67 . S ection 287.057(1)(a)4., provides that the award of a

contract, in an invitation to bid competitive solicitation

process, shall be made to the Ðresponsible and responsive vendor

who submits the lowest respons ive bid.Ñ Consequently, the

determination that the winning bidder is responsible and

responsive, as defined by chapter 287 , is an integral part of the

decision to award a contract.

68 . The term Ðresponsible vendorÑ is defined as Ð a vendor

who has the c apability in all respects to fully perform the

contract requirements and the integrity and reliability that will

assure good faith performance.Ñ £ 287.012(25), Fla. Stat.

Further, the term Ðresponsive bidÑ means Ða bid, or proposal, or

reply submitted by a responsive and responsible vendor which

conforms in all material respects to the solicitation.Ñ

§ 287.012(26), Fla. Stat. Finally, a Ðresponsive vendorÑ means a

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

conforms in all material respect s to the solicitation.Ñ

§ 287.012(27), Fla. Stat. As these definitions show, the bidder

must submit a bid that Ðconforms in all material respects to the

solicitation.Ñ

69 . ÐThe test for measuring whether a deviation . . . is

sufficiently material to destroy it s competitive character is

whether the variation affects the amount of the bid by giving the

bidder an advantage or benefit not enjoyed by other bidders.Ñ

Harry Pepper , 352 So. 2d at 1193.

70 . Keefe challenges whether Trinity and Aramark sub mitted

responsive and responsible bids, in response to the ITB. Keefe

argues that it is the only entity that provided a responsive and

responsible bid because neither Trinity nor Aramark stated the

ability to fully implement all canteen services on April 1, 2014.

Keefe also argues that neither Trinity nor Aramark are responsive

bidders because neither bidder is able to provide all of the

products listed on the Master Product Canteen List , which

contains products that are proprietary to Keefe. Finally, Ke efe

argues that Trinity is not a responsible bidder because it failed

to show its experience in providing canteen services and is vague

on the details concerning the implementation of the required

information technology services.

71 . Applying the rules of law to the facts here, the

undersigned finds that Keefe has failed to meet its burden of

proof.

72 . The first consideration is whether TrinityÓs bid is

responsive concerning the canteen contractÓs implementation

date. 17/

73 . At the onset, the undersign ed recognizes that TrinityÓs

bid failed to show a full implementation of statewide canteen

services on April 1, 2014. Although TrinityÓs bid shows that

during the implementation period, Trinity would take significant

steps in order to be ready to comply w ith the April 1, 2014 ,

deadline, the bid on its face shows that the canteens would be

closed from April 1 through April 7, 2014 , to allow for re -

stocking and training of inmate - employees. Part of the delay

identified by Trinity in implementing full servic e would be the

incumbent providerÓs removal and inventory of its stock, if the

incumbent chose not to sell the inventory to Trinity.

74 . The undersigned finds that the short interval that

Trinity was proposing to close the canteens, in order to fully

im plement canteen service , is not a material deviation from the

ITB. The DepartmentÓs delay in releasing the ITB as well as

KeefeÓs refusal to allow a short - term contract extension or

create a transition schedule 180 days before the March 31, 2014 ,

contract termination , as required under the existing contract ,

created a situation where Keefe had a significant advantage in

the ITB. Keefe as the incumbent would have no hardship

transitioning from the contract termination date of March 31,

2014 , to the beginni ng of the new contract on April 1, 2014. In

contrast, both Trinity and Aramark would have to install new

technology, train the inmate - employees, and re - sto ck the

canteens, in a day.

75 . TrinityÓs bid is not a material deviation because it

did not give Tr inity an unfair competitive advantage. Rather

than creating an unfair advantage, the DepartmentÓs

interpretation of the implementation schedule provided the State

with competitive bids. In contrast, to accept KeefeÓs argument,

the competitive procurement would have resulted in only one

bidder.

76 . The next consideration is KeefeÓs argument is that it

is the only responsive bidder because neither Trinity nor Aramark

could provide all of the items in the Master Canteen Product List

attached to the ITB.

77 . The DepartmentÓs determination that TrinityÓs bid is

responsive concerning the Master Canteen Product List is neither

clearly erroneous, contrary to competition, nor is the

DepartmentÓs decision arbitrary or capricious.

78 . A review of the Master Canteen Product List and the

record shows that the Department took great efforts to remove all

items from the ITB that Keefe had an exclusive or proprietary

right to sell in the canteens. The purpose of removing

proprietary items from the Master Canteen P roduct List was to

open competition for all bidders.

79 . Moreover, the Department specifically addressed

questions from potential bidders about whether or not bidders

were required to submit a product list with the bid submission.

These questions arose because potential bidders recognized that

some of the products found on the Master Canteen Product List

contained items that Keefe had an exclusive sales agreement or

owned a proprietary interest in the product. The DepartmentÓs

answers to the questions referred the potential bidders to

s ection 3.10 of the ITB which sets out the process for the

winning bidder to add, delete, or substitute products on the

Master Canteen Product List during the term of the contract.

80 . The DepartmentÓs interpretation of allowing the winning

bidder to seek a substitution of an unavailable product is

permitted by the ITB. Clearly, if Keefe has an exclusive right

with a manufacturer, then KeefeÓs exclusive product is not

available and may be substituted pursuant to s ection 3.10. It is

interesting to note that all of the bidders here would be

required to seek substitutions for several products on the Master

Canteen Product List. For example, it was undisputed that the

Campbell SoupÓs 20 - ounce V8 vegetable drink does not ex ist and

that during the procurement process two products were being

discontinued by the manufacturers. Consequently, all of the

bidders would be required to use s ection 3.10 in order to provide

the products listed.

81 . The DepartmentÓs interpretation in recognizing that the

winning bidder would seek substitutions or be able to purchase

the incumbent vendorÓs inventory is not clearly erroneous or

contrary to competition.

82 . As discussed concerning the implementation period, if

one adopted KeefeÓs an alysis, the result would be that only Keefe

could ever provide a responsive bid. In contrast, the

DepartmentÓs interpretation consistently provided a level playing

field in which all bidders had an opportunity to offer the State

the best value.

83 . An ad ditional consideration in this case is that this

competitive bid procurement is different from bid procurements

where the Department is seeking to buy products or services.

Unlike most cases, the instant case involves potential bidders

informing the Depar tment what per diem rate the bidders will pay

for the opportunity to sell products in the DepartmentÓs

facilities. This per diem rate is a flat rate paid by the vendor

to the Department based on the inmate count each night. The per

diem rate paid to the Department does not vary based on the

sales, the costs or the revenue. The winning bidderÓs ability to

earn a profit will be based on its profit margin for the products

it sells. However, the productsÓ prices are set by the

Department based on a statutor y formula. In the instant case,

there was no credible evidence showing that Trinity received an

unfair competitive advantage by the DepartmentÓs interpretation

that the winning bidder could seek a substitution of an

unavailable product under the process o utlined in section 3.10 of

the ITB.

84 . Finally, assuming for argumentÓs sake , that TrinityÓs

inability to provide all of the products identified in the ITB

was a deviation from the ITBÓs specifications, the undersigned

finds that the deviation is not mat erial.

85 . A deviation is considered material Ðif it gives the

bidder a substantial advantage over the other bidders and thereby

restricts or stifles competition.Ñ Tropabest Foods, Inc. v.

DepÓt of Gen. Serv. , 493 So. 2d 50, 52 (Fla. 1 st DCA 1986). In

the instant case, only ten items out of the Master Canteen

Product List of approximately 294 items, from 17 different menus,

has been shown to be exclusive to Keefeinity did not receive

a competitive advantage by the Department recognizing that the

s elected bidder would be able to substitute unavailable products.

All potential bidders had the same ability to seek substitution

of any unavailable product. Moreover, there was no showing that

Trinity received an unfair advantage over Keefe in being able to

request a substitution of a product, if se lected as the winning

bidder. Consequently, any deviation in allowing Trinity to

substitute unavailable products , if selected as the winning

bidder , is not a material deviation.

Information Technology

86 . A review of TrinityÓs bid shows that it was responsive

concerning the ITBÓs specifications concerning Information

Technology and implementation of technology services. TrinityÓs

bid contains an Implementation Plan and Transition Date Schedule.

TrinityÓs a bility to perform timely was further supported by the

testimony of M r. Tolliver and Mr. Long .

Trinity as a responsible vendor

87 . The final consideration is KeefeÓs argument that

Trinity is not a responsible vendor because TrinityÓs bid and the

facts do not show that it has the needed experience to operate a

large commissary canteen contract, like the DepartmentÓs

contract. The record clearly shows that Trinity has extensive

experience in commissary canteen contracts in correctional

facilities and food service. This experience is set out in its

subsidiaries, Swanson and A & S, and supported by Mr. LongÓs

testimony. Further, the Department officials credibly testified

that they were familiar with Trinity and found the organization

to be a responsible bi dder.

88 . Keefe has failed to meet its burden of proof showing

that the DepartmentÓs intended action in awarding the canteen

contract was clearly erroneous, contrary to competition, or

arbitrary or capricious.

89 . Finally, the DepartmentÓs decision a warding Trinity

with the canteen contract is neither arbitrary nor capricious.

The DepartmentÓs award of the contract here is based on which

bidder offered the State of Florida the highest per diem rate per

inmate count. Clearly, Trinity presented the De partment with the

highest amount of per diem rate, and created the best value for

the citizens of Florida.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department award Trinity Services

Group, Inc . with the contract that is the subject of Invitation

to Bid , DOC ITB - 13 - 015.

DONE AND ENTERED this 9th day of June , 2014 , in Tallahassee,

Leon County, Florida.

S

THOMAS P. CRAPPS

Administrative Law Judge

Division of A dministrative 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 9th day of June , 2014 .

E NDNOTE S

1/ All references to Florida Statutes shall be the 2013 version,

unless otherwise specified.

2/ The Joint Exhibits were provided in a notebook. Exhibits

numbered 9, 12, and 30 were identified as ÐreservedÑ because

there was not an agreement as to those numbers contained in the

notebook.

3/ In order to efficiently present the testimony, the parties

agreed that the D epartment, Trinity and Aramark will ask

questions of Ms. Ingram and Mr. Creamer outside the scope of

direct examination.

4/ Th e terms Ðcanteen and commissary servicesÑ are used

interchangeabl y . The canteen and commissary services provide an

inmate or visitor with the opportunity to purchase items, such as

food or snacks.

5/ Keefe began canteen service operations for the Depart ment in

November 2003, and has continued after being selected in

competitive procurements in 2007 and 2009.

6/ The number of inmate canteens, 267, and the number of visiting

parks , 106 , is greater than the total number of Department

facilities because so me facilities have more than one canteen.

7/ Section 2.4 of the ITB, as it was initially released, reads as

follows:

The Contractor must have the capability to

commence implementation of services no later

than the start date of the resulting Contract

an d to complete full service delivery of

canteen operations at all institutions by

April 1, 2014.

Pursuant to Section 5.2.8 of the ITB, each

bidder shall submit an Estimated

Implementation and Transition Date Schedule

in their response to this ITB. The est imated

plan will be adjusted , as necessary, and

approved as ContractorÓs Final Implementation

Plan and Transition Date Schedule by the

Contract Manager. The plan shall be designed

to provide for seamless transition with

minimal interruption of sales or o perations.

After execution of the Contract resulting

from this ITB, the Department will allow a

maximum of a ninety (90) day Ðstart upÑ

period, for the initial delivery of

equipment, supplies and hiring and training

of Contractor staff and transition of

services from the current contractor.

8/ Addendum 1 deleted s ection 2.4 and substituted the following:

The DepartmentÓs current contract ends on

March 31, 2014. The successful Contractor

must have the capability to commence services

statewide no later than April 1, 2014.

Implementation Period - February 3, 2014

through April 1, 2014.

Significantly, the Department deleted the ITBÓs language stating

that the Department would allow a 90 - day Ðstart - upÑ transition

period.

9/ Addendum 1 shows the followi ng specific questions and answers

addressing the products that the ITB sought a vendor to provide:

Question #7 : Can canteen products list be

confirmed as current? For example, the list

has Uncle AlÓs Chocolate Chip 5 oz. cookies,

but a 6 oz. bag was obs erved during the

walkthrough.

Answer #7: Several items for sale in the

inmate and/or visiting park canteens were not

included on the Master Canteen Products List

because they are specifically packaged and/or

manufactured for the current contractor.

Ques tion #10: We do not stock the identical

item as the current contractor, who is a

competitor. Is it a requirement of the

submission to provide a product list based on

the products and pricing given in Exhibit A

or is this determined during negotiations?

If it is a required submission, is the

product brand and size sufficient or do we

need to identify which items are being

substituted?

Answer #10: Per Section 3.1 of the ITB, the

contractor shall provide all products for

resale as identified on the Depart mentÓs

Master Canteen Product List. Section 3.10

describes the process for additions/deletions

and substitutions to the Master Canteen

Product List.

Question #37 : Section 3.9, Master Canteen

Products List Pricing and Price Increases,

requires that ÐThe Contractor shall make all

items contained on the Master Canteen

Products List available for purchase at the

price(s) indicated.Ñ This list appears to

consist of the current vendorÓs menu. In

some cases the current vendor may have

negotiated exclusive ri ghts to carry the

exact sizes or items listed. Ð Cajun Shrimp Ñ

flavored Maruchan ramen for instance is a

flavor that Maruchan sells exclusively

through the current vendor. There are other

brands of ramen that offer similar flavors to

other bidders and oth er flavors that Maruchan

sells on the open market; but if every bidder

has to exactly match Exhibit A then there can

be only one bidder and the State will not get

the benefit of a competitive bid process.

a) Will the State permit bidders to submit

variat ions, comparable items or equivalent

items rather than the exact brand/size/item

listed on the Master Canteen list?

b) Would the Master Canteen List committee

like to review samples or approve any

variations or substitutions for the current

contractorÓs menu items prior to accepting

bids?

c) If so, to where and whom should we submit

sample merchandise and/or item

specifications?

Answer #37: The Department has provided the

Master Canteen Products List the successful

contractor will be required to follo w in

Exhibit A. Revised 1 , 10 , and 14 of this

ITB.

Per section 3.28 of this ITB, unless

otherwise indicated or determined by the

institutionÓs Warden, all items on the

approved Master Canteen Products List must be

available in the inmate canteens for res ale

to the inmates.

After contract execution, the successful

contractor will have opportunities to request

changes to the Master Canteen Products List

Exhibit A in accordance with Section 3 scope

of service of the ITB. With the above

explanation, please see the answers below to

questions a), b) , and c):

a) No variables, comparable items,

equivalents or substitutions to the Master

Canteen Products List will be allowed at bid

submittal.

b) Samples are not required with bid

submittal.

c) See answer to a and b above.

Question #50: Section 3.9 s tates: ÐThe

Contractor shall make all items contained on

the Master Canteen Products List available

for purchase at the price(s) indicated.Ñ

Will any substitution of name brand product

be allowed on the ITBÓs Ma ster Canteen

Products List for evaluation of this ITB?

Answer #50: No.

10/ The following are the questions and revised answers

concerning the Master Canteen Product List:

Question #10: We do not stock the identical

item as the current contractor, wh o is a

competitor. Is it a requirement of the

submission to provide a product list based on

the products and pricing given in Exhibit A

or is this determined during negotiations?

If it is a required submission, is the

product brand and size sufficient or do we

need to identify which items are being

substituted?

Answer # 10 : Per section 3.1 of the ITB, the contractor shall

provid e all products for resale as identi fi ed on the DepartmentÓs

Master Canteen Product List. Section 3.10 describes the process

for additions/deletions and substitutions to the Master Canteen

Product List

No, it is not a requirement of the submission

to provide a product list.

Section 3.10 outlines the process for the

successful Contractor to add, delete and

substitute Master Cant een Products during the

term of the Contract.

Question #37 : Section 3.9, Master Canteen

Products List Pricing and Price Increases,

requires that ÐThe Contractor shall make all

items contained on the Master Canteen

Products List available for purchase at the

price(s) indicated.Ñ This list appears to

consist of the current vendorÓs menu. In

some cases the current vendor may have

negotiated exclusive rights to carry the

exact sizes or items listed. Ð Cajun Shrimp Ñ

flavored Maruchan ramen for instance is a

flavor that Maruchan sells exclusively

through the current vendor. There are other

brands of ramen that offer similar flavors to

other bidders and other flavors that Maruchan

sells on the open market; but if every bidder

has to exactly match Exhibit A the n there can

be only one bidder and the State will not get

the benefit of a competitive bid process.

a ) Will the State permit bidders to submit

variations, comparable items or equivalent

items rather than the exact brand/size/item

listed on the Master Can teen list?

b ) Would the Master Canteen List committee

like to review samples or approve any

variations or substitutions for the current

contractorÓs menu items prior to accepting

bids?

c ) If so, to where and whom should we submit

sample merchandise and/ or item

specifications?

Answer #37: The Department has provided the Master Canteen

Products List the successful contractor will be required to

follow in Exhibit A. Revised 1, 10, 14, of this ITB .

Per section 3.28 of the ITB, unless otherwise indicated or

determined by the institutionÓs Warden, all items on the approved

Master Canteen Products List must be available in the inmate

canteens for resale to the inmates.

After contract execution, the successful contractor will have

opportunities to request ch anges to the Master Canteen Products

List Exhibit A in accordance with Section 3 scope of service of

the ITB. With the above explanation, please see the answers

below to questions a), b), and c):

a) No variables, comparable items, equivalents or substit utions

to the Master Canteen Products List will be allowed at bid

submittal.

b) Samples are not required with bid submittal.

c) See answer to a and b above .

The product list is not required with bid

submittal. However, Section 3.10 outlines

the proce ss for the successful Contractor to

add, delete and substitute Master Canteen

Products during the term of the Contract.

Question #50: Section 3.9 s tates: ÐThe

Contractor shall make all items contained on

the Master Canteen Products List available

for pur chase at the price(s) indicated.Ñ

Will any substitution of name brand product

be allowed on the ITBÓs Master Canteen

Products List for evaluation of this ITB?

Answer #50: No. See Answers to Questions 10

and 37.

11/ The bid prices for the three bidde rs were the following:

Trinity: $37,912.635.78 ;

Aramark: $34,560,730.17; and

Keefe: $32,868,465.35.

12/ S ection 120.57(3)(f), Florida Statutes, provides, in

pertinent part:

Unless otherwise provided by statute, the

burden of proof shall rest with t he party

protesting the proposed agency action. In a

competitive - procurement protest, other than a

rejection of all bids, proposals, or replies,

the administrative law judge shall conduct a

de novo proceeding to determine whether the

agencyÓs proposed act ion is contrary to the

agencyÓs governing statutes, the agencyÓs

rules or policies, or the solicitation

specifications. The standard of proof for

such proceedings shall be whether the

proposed agency action was clearly erroneous,

contrary to competition, arbitrary, or

capricious. In any bid - protest proceeding

contesting an intended agency action to

reject all bids, proposals, or replies, the

standard of review by an administrative law

judge shall be whether the agencyÓs intended

action is illegal, arbitra ry, dishonest, or

fraudulent.

13/ A decision is Ðclearly erroneousÑ when, although there is

evidence to support it, after review of the entire record the

tribunal is left with the definite and firm conviction that a

mistake has been committed. United St ates v. U.S. Gypsum Co. ,

333 U.S. 364, 395 ( 1948) ; see also , Floridian Constr. & Dev. Co.,

In c . v. DepÓt of Envtl. Prot. , Case No. 09 - 0858BID, 18 (DOAH

May 1, 2009)(Ða decision is clearly erroneous when unsupported by

substantial evidence or contrary to t he clear weight of the

evidence or is induced by an erroneous view of the law.Ñ).

14/ An agency decision is "contrary to competition" when it

unreasonably interferes with the objectives of competitive

bidding.

15/ An Ðarbitrary or capriciousÑ decision in the context of a bid

protest means Ðan action is Òarbitrary if it is not supported by

logic or the necessary facts,Ó and Òcapricious if it is adopted

without thought or reason or is irrational.ÓÑ Hadi v. Liberty

Behavioral Health Corp. , 927 So. 2d 34, 38 - 39 (Fla. 1st DCA

2006) . To determine whether an agency acted in an arbitrary or

capricious manner, it must be determined "whether the agency:

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

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

reason rather than whim to progress from consideration of these

factors to its final decision." Adam Smith Enter. v. Dept . of

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

if a decision is justifiable under any analysis t hat a reasonable

person would use to reach a decision of similar importance, the

decision is neither arbitrary nor capricious. Dravco Basic

Materials Co. v. DepÓt of Transp . , 602 So. 2d 632, n. 3 (Fla. 2d

DCA 1992).

16/ Section 120.57(1)(j), Florida S tatutes , provides that

findings of fact shall be based upon a preponderance of the

evidence, except in penal or licensure disciplinary proceedings

or except as otherwise provided by statute.

17/ Because the undersigned finds that TrinityÓs bid is

respons ive to the implementation date, the undersigned does not

address whether AramarkÓs bid is also responsive to the

implementation date.

COPIES FURNISHED:

David C. Ashburn, Esquire

Greenberg Traurig, P.A.

Post Office Drawer 1838

101 East College Avenue

Tal lahassee, Florida 32302

Jonathan P. Sanford, Esquire

Florida Department of Corrections

501 South Calhoun Street

Tallahassee, Florida 32399

Karen D. Walker, Esquire

Holland and Knight, LLP

315 South Calhoun Street , Suite 600

Tallahassee, Florida 32301

Brittany Adams Long, Esquire

Radey Thomas Yon and Clark, P.A.

301 South Bronough Street , Suite 200

Tallahassee, Florida 32301

Michael D. Crews, Secretary

Department of Corrections

501 South Calhoun Street

Tallahassee, Florida 32399 - 2500

Jennifer Parke r, General Counsel

Department of Corrections

501 South Calhoun Street

Tallahassee, Florida 32399 - 2500

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

1 0 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.