14-001024BID At And T Corp. vs. Brevard County School Board Status: Closed Recommended Order on Wednesday, October 1, 2014.

Summary: Vendors, although responsible and responsive to the RFP, not entitled to change pricing once proposal is submitted.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AT AND T CORP.,

Petitioner,

vs. Case No. 14 - 1024BID

BREVARD COUNTY SCHOOL BOARD,

Respondent,

and

BRIGHT HOUSE NETWORK, LLC,

Intervenor.

_______________________________/

R ECOMMENDED ORDER

Pursuant to notice , this case was tried before

J. D. Parrish, an Administrative Law Judge with the Division of

Administrative Hearings (DOAH) , on July 10 and 11, 2014, in

Viera, Florida.

APPEARANCES

For Petitioner: William K. Mosca, Esq uire

Gabrielle A. Figueroa, Esquire

Bevan, Mosca, Guiditta,

and Zarillo, P.C.

222 Mount Airy Road, Suite 200

Basking Ridge, New Jersey 07920

For Respondent: Ha rold T. Bistline, Esquire

Stromire, Bistline and Miniclier

1 037 Pathfinder Way , Suite 150

Rockledge, Florida 32955

For Intervenor: Frank C. Kruppenbacher, Esquire

Frank Kruppenbacher, P. A.

9064 Great Heron Circle

Orlando, Florida 32836 - 5483

Thomas P. Callan, Esquire

Callan Law Firm, P.A.

921 Bradshaw Terrace

Orlando, Florida 32806

Gigi Rollini, Esquire

2618 Centennial Place

Tallahassee, Florida 32308

Frederick R. Dudley, Esquire

Dudley, Sellers & Healy, P.L.

3522 Tho masville Road

Tallahassee, Florida 32309

STATEMENT OF THE ISSUE

Whether the Brevard County School Board (Board) erred in

issuing its preliminary decision to award a contract for proposal

#14 - P - 081 - WH for internet provider wide area netwo rk services to

Intervenor, Bright House Network, LLC (Bright House) .

PRELIMINARY STATEMENT

On or about December 23, 2013, the Board issued a request

for proposal (RFP) designated as #14 - P - 081 - WH seeking vendors who

could provide internet provider (IP) wide area network (WAN)

services as described in the proposal documents. The RFP set

forth a pre - proposal meeting to allow interested parties to ask

questions and seek additional information if needed in order to

accurately prepare a proposal.

The deadline for the submittal of proposals was January 22,

2014 , at 2:00 p.m. Petitioner, AT and T Corp. ( AT and T ), timely

submitted a proposal for the contract award as did Bright House.

Eventually , AT and T and Bright House were chosen as the two

final candidates to be considered for the contract. In

accordance with the RFP they were invited to make oral

presentations. The selection committee was to then rank the

companies to determine which would receive the contract. After

the deliberations were completed , AT and T did not receive the

award. Based upon the manner and timing of the oral

presentations along with technical claims raised against the

Bright House proposal, AT and T timely filed a challenge to the

proposed award to Bright House.

The Board referre d this case to DOAH on March 7, 2014. The

Formal Written Protest (the protest) filed by Petitioner

requested that the Board Ðcancel/rescind its proposed award to

Bright House Network Enterprise Solutions and instead award this

contract to AT and T , the on ly responsive bidder between the two

finalists.Ñ PetitionerÓs protest alleged that Bright House

should not be awarded the contract because : a. IntervenorÓs

proposal was non - responsive to the RFP, and b. Intervenor

obtained an unfair advantage in the eval uation process. Bright

House has maintained its proposal substantially met all

requirements of the RFP (this claim is accepted by the School

Board) and that it did not receive an unfair advantage during the

oral presentation portion of the evaluation (thi s claim is

disputed by the School Board).

During the discovery portion of the instant case , Respondent

determined its initial decision to award the contract to Bright

House was incorrect. Thereafter, the Board joined AT and T in

its assertion that Brigh t House participated in the oral

presentation with an unfair advantage and that by its conduct

should not receive the award.

The case was originally scheduled for hearing for March 31

and April 1, 2014. Thereafter , the case was continued twice

before it was transferred to the undersigned. The parties

engaged in significant discovery that ultimately reduced the

hearing time required for the case and limited the factual issues

to be tried.

At hearing , Petitioner presented testimony from Erik

Lindborg, C raig Cowden, Gabino Nieto, and Kristine Rumping.

Respondent presented the testimony of Cheryl Olson. Intervenor

offered testimony from the following witnesses: William

Henzmann, Brad Freathy, Carrie Smith, Jeffrey Cook, and Tom E.

Lewis. The parties of fered exhibits as described in the

transcript of the proceedings. All objections to exhibits,

documents, depositions, testimony, or motions to strike were

ruled upon at hearing and are accurately noted in the transcript.

The only unresolved motions pendi ng are those filed by Petitioner

and Intervenor seeking attorneysÓ fees in connection with this

case. Those motions are addressed herein.

The T ranscript was filed with DOAH on July 29, 2014. All

parties timely filed Proposed Recommended Orders that hav e been

reviewed and considered in the drafting of this Recommended

Order .

FINDING S OF FACT

1. The Board is a lawful entity of the State of Florida

fully authorized to enter into contracts for the purchase of

goods and services for the Brevard County Schoo l District.

2. As part of its responsibility to acquire IP WAN services

to its properties , the BoardÓs Office of Purchasing & Warehouse

Services issued RFP #14 - P - 081 - WH on December 23, 2013.

3. The RFP gave potential vendors the opportunity to attend

a pre - proposal conference. Additionally, questions concerning

any portion of the RFP could be directed in writing or by email

to the BoardÓs designated employees. The deadline for submitting

questions was seven days before the closing date. If questions

were posed , the BoardÓ s staff afforded all vendors the

opportunity to review questions and answers.

4. The RFP terms and conditions were not challenged by any

vendor.

5. Five vendors timely submitted proposals for the RFP. Of

those , AT and T and Brigh t House were deemed responsive and

responsible and, as the highest ranked vendors, were invited to

make oral presentations to the selection committee.

6. AT and T was selected to present first at the oral

presentations on February 5, 2014. Its presentati on began at

8:30 a.m. The Bright House presentation was scheduled to begin

at 10:00 a.m.

7. Since both vendors were deemed responsive and

responsible , the criteria for evaluating the proposals was

designated by the RFP as follows:

5.0 ORAL PRESENTATION EVALUATION CRITERIA

After evaluation of the proposals, the

evaluation committee may conduct interview s

or presentations from a short list of

vendors. If this is determined, your company

will be contacted for presentation to occur

on the date specified in Attachment ÐA.Ñ

Again, this is an optional presentation to be

determined by the evaluation committee.

The RespondentÓs response will be scored by

Committee member in accordance with the

following scale:

0= Unsatisfactory: Not responsive to the

ques tion.

1= Below Minimum Standards: Responsive to

the question but below acceptable standards.

2= Marginal: Minimal acceptable performance

standards and responsive to the question.

3= Satisfactory: Above minimum performance,

Effective and Responsive to the question.

4= Exceeeds Expectations for effectiveness

and responsiveness to the question.

All presentations shall include at minimum:

1. Ability, Capacity, and Skill of the

Proposer - (Weighted Value 25) The ability,

capacity, and skill of the f irm to be able to

provide the services here in addressed .

2. Relevant Experience - (Weighted Value 25)

The experience of the respondent with Florida

School Boards and/or other political

subdivisions.

3. Approach and Methodology - (Weighted Value

10) The FirmÓs approach and methodology of

how the services herein addressed will be

provided.

4. Best and Final Fee Schedule - (Weighted

Value 40) Completed Table 1.1 - Fee Schedule

and Attachment ÐBÑ Proposal Form and

Statement of Compliance. List any relevant

s ervices that are in addition to the duties

outlined in this solicitation and/or

revisions in the attached draft contract.

8. The events that transpired at the oral presentations led

to the protest filed by AT and T . As previously noted , AT and T

was s cheduled to begin its presentation at 8:30 a.m. The

AT and T team arrived timely for the demonstration and noted that

members of the Bright House group were present in the room where

the presentations were to be made. AT and T sought assurances

that the Bright House presence would not adversely impact the

chances of AT and T to receive the contract. It never occurred

to the BoardÓs selection committee members that Bright House

might receive an unfair advantage by being able to view the

AT and T demonst ration before their presentation would be

offered.

9. As the presentations were Ðopen to the public,Ñ Bright

House was allowed to remain in the room and reluctantly AT and T

proceeded with its demonstration and explanation of its proposal,

the equipment it planned to use, and its best and final fee

schedule. During the oral presentation , AT and T acknowledged

that their Ðbest and final fee scheduleÑ was different from the

numbers previously listed in their proposal. In the time between

the original pro posal submittal and the oral presentation,

AT and T had whittled its pricing down to its Ðbest and final

offer.Ñ

10. When Bright House heard the final fee schedule AT and T

was proposing had changed in the interim, Bright House quickly

did a spreadsheet to reduce its prices below those proposed by

AT and T . It is undisputed that in the time between the two

presentations Bright House modified its oral presentation to

include information drafted in response to the AT and T oral

presentation.

11. AT and T did not know the pricing Bright House had

included in its initial submission. Bright House did not know

the pricing AT and T had included in its initial submission.

Both vendors should have known that the highest ranked vendor

following the oral prese ntations would likely be awarded the

contract. As the weighted value for pricing was the heaviest

weighted criteria, Bright House obtained an unfair advantage by

changing its proposal after hearing and seeing the fee schedule

proposed by AT and T .

12. Af ter the oral presentations , the selection committee

reviewed the proposals and selected Bright House for the intended

award. Once the Board discovered that Bright House changed its

presentation and fee schedule in response to the AT and T

proposal, it ann ounced its intention to rescind the proposed

award to Bright House and to give the contract to AT and T .

13. Bright House maintains that because AT and T was

allowed to change its pricing from the sealed proposal, it, too,

was justified in changing its fee schedule. Bright House

believes that the sealed proposal price was the pricing the Board

was required to consider. Bright House claims that it did not

act unethically in changing its oral presentation materials since

it only did what AT and T was all owed to do (change its pricing).

14. The Board now requires sealed documents from all

vendors making oral presentations so that no vendor may change

its proposal in response to an earlier presentation. It did not

occur to Board staff that a vendor woul d ever make such changes.

15. In Florida , there are three competitive solicitation

processes that are used for the procurement of goods and

services. They are distinct under the law. An invitation to bid

(ITB) is used when the agency is able to define t he product or

service needed and when the acquisition is price - driven and

evaluated based upon the lowest responsive bid.

16. The second process for the procurement of goods and

services is the request for proposals (RFP). This process

affords more flexi bility in that while the agency can define and

specify what it needs in terms of goods and services the price -

driven pro cess is not practicable as other considerations need to

be reviewed.

17. And finally, the third process for the procurement of

goods or services is called invitation to negotiate (ITN). This

method is more time consuming and is designed to allow the agency

to negotiate in order to receive the best value.

18. In this case , the Board attempted to fo llow a hybrid of

the RFP and ITN pro cesses. By allowing the vendors to fine - tune

their pricing between the submission of the original proposal and

the oral presentation , the Board sought to obtain the vendorÓs

lowest and best price.

19. The letter dated January 30, 2014, from Board emplo yee ,

Cheryl Olson , to Bright House and AT and T reiterated the oral

presentation evaluation criteria. The letter further provided,

Ðshould you have any questions regarding the presentations,

please do not hesitate to contact Wil Henzmann, the Purchasing

A gent responsible for this projectÑ and gave his contact

information. Neither vendor contacted Mr. Henzmann regarding the

oral presentation evaluation criteria.

20. The issue of this case resulted because Bright House

did not know that Ðbest and final f ee scheduleÑ as stated in the

oral presentation evaluation criteria (as interpreted by the

Board) allowed AT and T to do what it did: lower its fee

schedule to the lowest it could for the work proposed.

21. The Board determined that both the Bright Hou se and

AT and T proposals materially met the terms and conditions of the

RFP. That determination was correct based upon the weight of the

credible evidence presented in this case. Both proposals

demonstrate the vendors were Ðresponsive and responsibleÑ as

described in the RFP.

22. It is further determined that AT and T timely filed its

protest in this cause and submitted the appropriate bond as

required by law and section 3.45 of the RFP.

23. No vendor timely challenged the terms Ðbest and final

fee sc heduleÑ as stated in section 5.0 of the RFP.

24. Allowing Bright House to change its presentation in

response to the AT and T presentation gave it an advantage not

extended to AT and T .

25. The selection committee did not authorize the changes

Bright H ouse made to its oral presentation in response to

AT and T Ós presentation.

26. Bright House did not readily admit it had made changes

to its presentation after viewing and hearing the AT and T

presentation.

27. Bright House does not acknowledge it took unfair

advantage by changing its proposal in response to the AT and T

oral presentation.

28. None of the pricing schedules were made public until

the oral presentations on February 5, 2014.

29. Section 3.10 of the RFP provides:

The School Board reserves the right to award

the contract to the respondent(s) that the

School Board deems to offer the best overall

proposal(s). The School Board is therefore

not bound to accept a proposal on the basis

of lowest price. In addition, the School

Board at its sole d iscretion, reserves the

right to cancel this RFP, to reject any and

all proposals, to waive any and all

informalities, if it is deemed to be in the

best interest of the School Board to do so.

The School Board also reserves the right to

make multiple award s, based upon experience

and qualifications if it is deemed to be in

the School BoardÓs best interest. The

District reserves the right to further

negotiate any proposal, including price, with

the highest rated respondent. If an

agreement cannot be reache d with the highest

rated respondent, the District reserves the

right to negotiate and recommend award to the

next highest respondent or subsequent

respondents until an agreement is reached.

[Emphasis added.]

30. Section 3.29 of the RFP provided:

It is t he School BoardÓs intent to award a

contract(s) to the respondent(s) deemed most

advantageous to the School Board in

accordance with the evaluation criteria

specified elsewhere in this RFP. The School

Board reserves the right however, to conduct

post - clos ing discussions with any respondent

who has a realistic possibility of contract

award including, but not limited to: request

for additional information, competitive

negotiations, and best and final offers .

[Emphasis added.]

CONCLUSIONS OF LAW

31. The D ivision of Administrative Hearings has

jurisdiction over the parties to and subject matter of this

proceeding . § § 120.57(1) and (3), Fla. Stat. (2013).

32. Section 120.57(3), Florida Statutes , provides , in part:

(3) ADDITIONAL PROCEDURES APPLICABLE TO

P ROTESTS TO CONTRACT SOLICITATION OR AWARD. Ï

Agencies subject to this chapter shall use

the uniform rules of procedure, which provide

procedures for the resolution of protests

arising from the contract solicitation or

award process. Such rules shall at leas t

provide that:

* * *

(f) In a protest to an invitation to bid or

request for proposals procurement, no

submissions made after the bid or proposal

opening which amend or supplement the bid or

proposal shall be considered. In a protest

to an inv itation to negotiate procurement, no

submissions made after the agency announces

its intent to award a contract, reject all

replies, or withdraw the solicitation which

amend or supplement the reply shall be

considered. Unless otherwise provided by

statute , the burden of proof shall rest with

the party protesting the proposed agency

action. In a competitive - procurement

protest, other than a rejection of all bids,

proposals, or replies, the administrative law

judge shall conduct a de novo proceeding to

dete rmine whether the agencyÓs proposed

action 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

clear ly 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

agenc yÓs intended action is illegal,

arbitrary, dishonest, or fraudulent.

[Emphasis added.]

33. An agency action will be found to be Ðclearly

erroneousÑ if the agencyÓs interpretation conflicts with the

plain and ordinary intent of the law. Colbert v. Dep Ó t of

Health , 890 So. 2d 1165 (Fla. 1 st DCA 2004). Colbert provides

that in such a case, Ðjudicial deference need not be givenÑ to

the agencyÓs interpretation. In this regard, the Board has

maintained that it is the trend among school districts to allow

the two - step pricing described by the RFP. Such argument

conflicts with the plain and unambiguous language of the law.

34. An act is Ðcontrary to competitionÑ if it unreasonably

interferes with the objectives of competitive bidding, which are:

[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 its va rious forms; to secure the best

values for the county at the lowest possible

expense; and to afford equal advantage to all

desiring to do business with the county,

affording an opportunity for an exact

comparison of bids.

Wester v. Belote , 103 Fla. 976, 9 81, 138 So. 721, 723 - 724 (Fla.

1931). In this case , Bright House took an unfair advantage of

the situation and enjoyed a competitive edge not afforded

AT and T .

35. Acts unsupported by logic or the necessary facts are

arbitrary. Similarly, decisions a re capricious if adopted

without thought or reason, or if irrational. See Hadi v. Liberty

Behavioral Health Corp. , 927 So. 2d 34 (Fla. 1 st DCA 2006).

36. In this case , the Board announced its decision to

change its award mid - protest. After learni ng that Bright House

changed its presentation and pricing in response to the AT and T

oral presentation, the Board determined that unfair advantage had

resulted. The Board has not, however, addressed the fundamental

issue related to the procurement proces s of this case: that the

RFP cannot be read to allow submittals that would amend or

supplement the proposals already opened. See § 120.57(3)(f),

Fla. Stat. Although information clarifying a submittal or

answering questions posed by staff may be permitte d after the

proposals were opened, an RFP cannot allow proposers to amend

their proposals after they have been opened. The BoardÓs attempt

to employ a hybrid process of RFP and ITN is not allowed by law.

37. The plain and ordinary reading of the s tatute

prohibited AT and T and Bright House from changing the pricing

schedules at the oral presentation. Neither vendor should have

been allowed to do so.

38. In this case , the evaluation committee did not use the

correct pricing to determine whic h vendor should be afforded the

weighted value (40 per the RFP document). More critical,

however, is the prospect of negotiating with one vendor and,

should that not work out to the BoardÓs satisfaction, the

intention to negotiate with the other. The acq uisition process

used by the Board does not contemplate that type of negotiation.

39. It is concluded that the intended award to Bright House

must be withdrawn based upon the inappropriate actions of the

vendor in changing its pricing in direct res ponse to the AT and T

oral presentation. It is contrary to fair and competitive

processes to allow a vendor to modify its presentation after

view ing another vendorÓs pricing. It is further concluded that

allowing AT and T to modify its pricing was contra ry to the law

governing the RFP process.

40. Finally, as to the partiesÓ requests for attorneysÓ

fees, it is determined that neither Bright House nor AT and T

complied with the strict letter of the rules governing this

proceeding. Neither afforded the in formation sought during

discovery in a timely, full, and complete manner. With regard to

Bright House it is determined that the failure to disclose its

Ðexpert witnessÑ in a timely manner was of no consequence or

prejudice to AT and T as the testimony was largely discounted and

deemed unpersuasive. It is concluded no party is entitled to

recover attorneysÓ fees based upon the record of this case.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Scho ol Board of Brevard County,

Florida, enter a Final Order rejecting all proposals for this

RFP.

DONE AND ENTERED this 1st day of October , 2014 , in

Tallahassee, Leon County, Florida.

S

J. D. PARRISH

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 October , 2014 .

COPIES FURNISHED:

Harold T. Bistline, Esquire

Stromire, Bistline and Miniclier

1037 Pathfinder Way , Suite 150

Rockledge, Florida 32955

(eServed)

Scott A. Markowitz, Esquire

Demahy, Labrador, Drake,

Victor and Cabeza

6400 North Andrews Avenue

Fort Lauderdale, Florida 33309

(eServed)

Gabrielle A. Figueroa, Esquire

Bevan, Mosca, Giuditta ,

and Zarillo, P.C.

222 Mount Airy Road , Suite 200

Basking Ridge, New Jersey 07920

Frank C. Kruppenbacher, Esquire

Frank Kruppenbacher, P.A.

9064 Great Heron Circle

Orlando, Florida 32836 - 5483

(eServed)

William K. Mosca, Esquire

Bevan, Mosca, Giuditta ,

and Zarillo, P.C.

222 Mount Airy Road , Suite 200

Basking Ridge, New Jersey 07920

(eServed)

Frederick R. Dudley, Esquire

Dudley, Sellers and H ealy, P.L.

3522 Thomasville Road , Suite 301

Tallahassee, Florida 32309

(eServed)

Gigi Rollini, Esquire

Messer Caparello, P.A.

2618 Centennial Place

Tallahassee, Florida 32308

(eServed)

Brian Binggeli, Superintendent

Brevard County School Board

2700 Ju dge Fran Jamieson Way

Viera, Florida 32740 - 6601

Pam Stewart, Commissioner

Department of Education

Turlington Building, Suite 1514

325 West Gaines Street

Tallahassee, Florida 32399 - 0400

(eServed)

Lois Tepper, Interim General Counsel

Department of Educat ion

Turlington Building, Suite 1244

325 West Gaines Street

Tallahassee, Florida 32399 - 0400

(eServed)

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.