14-002915BID Humana, Inc. vs. Department Of Management Services Status: Closed Settled and/or Dismissed prior to entry of RO/FO on Tuesday, July 15, 2014.

STATE OF FLORIDA

DEPARTMENT OF MANAGEMENT SERVICES

HUMANA, INC.,

Petitioner, Final Order No. DMS -14-0054

v. DOAH CASE NO.: 14-2915BID

DMS CASE NO.: 14-29418

DEPARTMENT OF MANAGEMENT

SERVICES, DIVISION OF STATE

GROUP INSURANCE,

Respondent,

and

SUPERIOR VISION SERVICES, INC.

Intervenor.

_______________ 1

FINAL ORDER

On June 12, 2014, Petitioner, Humana, Inc. (Humana), timely filed with the Department

of Management Services (Department)its Formal Written Protest and Petition for Administrative

Hearing (petition) challenging the Department's intent to award a contract to Superior Vision

Services, Inc. (Superior), based on the evaluation of proposals received in response to the

Request for Proposals for Group Vision Benefits Insurance, RFP No. DMS 13/14-030-REBID

(Request for Proposal). The petition also sought to award the contract to Humana as the lowest

responsive and responsible bidder.

On June 20, 2014, the formal protest was referred to the Division of Administrative

Hearings for further proceedings. Prior to final hearing scheduled for July 16 and 17,2014, the

parties moved for the entry of an order relinquishing jurisdiction back to the agency and closing

the file with the Division of Administrative Hearings. The agreed upon basis for the Motion to

Relinquish Jurisdiction was that the intended awardee, Superior, has not been licensed by the

Office of Insurance Regulation for the requisite three year period. This licensure period is a

minimum requirement in the Request for Proposals and failure to meet this requirement causes

the Department to find that the bid proposal submitted by Superior as non-responsiveand

therefore disqualified the bid proposal from further consideration. The parties also agreed that as

a result of a flawed evaluation regarding the responsiveness of Superior's proposal, the

Department's intended decision to award the contract to Superior was clearly erroneous and can

no longer be maintained. As a result, the administrative law judge granted the Motion on July

16,2014 and jurisdiction was relinquished back to the·Department, pursuant to section 120.57(i),

Florida Statutes, and rule 28-106.204(2), Florida Administrative Code. This matter is before the

undersigned for the purpose of issuing a Final Order, in accordance with section 120.57(4),

Florida Statutes.

STIPULATED FINDINGS OF FACT

1. Five vendors responded to the Request for Proposal including Humana, Superior,

MetLife, United HealthCare, and Davis Vision. (Joint Pre-Hearing Stipulation)

2. MetLife was declared non-responsive for failure to provide requested rates for the

optional renewal term and United HealthCare and Davis were both declared non-responsive for

their failure to provide minimum Network Access. (Joint Pre-Hearing Stipulation)

3. Only responsive vendors eligible to proceed to the scoring portion of the

procurement. (Joint Pre-Hearing Stipulation)

4. The intended awardee, Superior, has not been licensed by the Office of Insurance

Regulation for the requisite three year period. This licensure period is a minimum requirement

in the request for proposals and failure to meet this requirement deems the bid proposal

submitted by Superior non-responsive and disqualifies the bid proposal from further

consideration. (Motion to Relinquish Jurisdiction)

5. As a result of a flawed evaluation regarding the responsiveness of Superior's

proposal, the Department's intended decision to award the contract to Superior wasclearly

erroneous and can no longer be maintained. (Motion to Relinquish Jurisdiction)

6. Humana is a responsive and responsible vendor to the Request for Proposal at

issue. (Joint Pre-Hearing Stipulation)

CONCLUSIONS OF LAW

7. The Department of Management Services has jurisdiction over the parties and the

subject matter of this proceeding. Sections 120.57(1)(i) and 120.57(4), Florida Statutes.

8. Section 120.57(1 )(i), Florida Statutes, states:

When, in any proceeding conducted pursuant to this subsection

a dispute of material fact no longer exists, any party may

move the administrative law judge to relinquish jurisdiction to

the agency. An order relinquishing jurisdiction shall be

rendered if the administrative law judge determines from

the pleadings, depositions, answers to interrogatories, and

admissions on file, together with supporting and opposing

affidavits, if any, that no genuine issue as to any material fact

exists. If the administrative law judge enters an order relinquish­

ing jurisdiction, the agency may promptly conduct a proceeding

pursuant to subsection (2), if appropriate ... [emphasis added.]

9. Section 120.57(4), Florida Statutes, allows for an informal disposition of the case

based upon the following:

INFORMAL DISPOSITION. - Unless precluded by law, informal

Disposition may be made of any proceeding by stipulation, agreed settlement, or

consent order.

10. Material disputes of fact in this case were resolved through stipulations in the

Motion to Relinquish Jurisdiction and the Joint Pre-Hearing Stipulation, which allow for an

informal disposition of the proceedings. Under the facts and circumstances, additional

proceedings under section 120.57(2), Florida Statutes, are unnecessary and inappropriate because

the need for a de novo proceeding no longer exists.

11. The burden of proof in this bid protest is upon Humana. Section 120.57 (3) (t),

Florida Statutes, provides:

... 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, the administrative

law judge shall conduct a de novo proceeding to determine whether the

agency's proposed action is contrary to the agency's governing statutes,

the agency's rules or policies, or the bid or proposal specifications. The

standard of proof for such proceedings shall be whether the proposed

agency action was clearly erroneous, contrary to competition, arbitrary or

capricious.

12. The clearly erroneous standard of proof set forth in section 120.57(3)(t), Florida

Statutes,govems the detennination that the Department's intended decision to award the contract

to Superior was improper. Under the specifications set forth in the request for proposals, failure

to meet the three year licensure requirement renders a proposal non-responsive and disqualifies

the bid proposal from further consideration. The Department's initial review regarding the

responsiveness of Superior's bid was incorrect, which was realized during the discovery process

in the bid protest. Once this ultimate question of fact was established, further proceedings before

an administrative law judge were unnecessary. As a matter of law, Humana was able to prove

by the clearly erroneous standard that the Department's decision to select the proposal of

Superior was inconsistent with the request for proposal.

13. The return of the case to the Department for a final order and a contract award to

Humana after the error was established is consistent with State Contracting and Engineering

Corporation v. Department of Transportation, 709 So. 2d 607 (Fla. 1 st DCA 1998). In State

Contracting, the court stated that the object of the de novo proceeding in an award case is to

"evaluate the action taken by the agency". The evaluation was completed in this case, without

the need for continued proceedings.

14. In its petition, Humana requested that the Division of Administrative Hearings

enter a Recommended Order recommending that the Department award the contract to Humana.

Because the case has been relinquished back to the Department, a contract award can be made as

part of this final order because it was stipulated that Humana's bid was responsive and the

proposals from the other four vendors were non-responsive. A final order can authorize an

award when two or more bids have been received and at least one bid confirms in all material

respects to the requestfor proposals. See Satellite Television Engineering Inc., v. Department

of General Services, 522 So. 2d 440 (Fla. 1 st DCA 1988); Harris\M v. Office Sys. Consultants,

533 So.2d 833 (Fla. 1 st DCA 1988).

15. All of the vendors, who responded to the request for proposals and were declared

non-responsive, had clear points of entry to challenge the decision regarding their respective bids

in an administrative hearing. Accordingly, due process requirements for all vendors have been

met and further challenges to a contract award to Humana have been waived. They were

provided a full and fair opportunity to contest the proposed agency action on any relevant ground

before the proposed action of deciaring them non-responsive became final. See Gtech Corp. v.

Department of Lottery, 737 So.2d 615 (Fla. 1 st DCA 1999), rev. dismissed 822 So.2d 1243 (Fla.

2002).

Based upon the foregoing Stipulated Findings of Fact and Conclusions of Law, it is

ORDERED:

A. The Department will award to Humana, Inc., the proposed contract in accordance

withand subject to the requirements of the Request for Proposal No. DMS 13114-30-REBID for

Group Vision Benefits Insurance, and the submissions from Humana, Inc., in response to the

request for proposal.

B. The Department will return to Humana, Inc., the cashier's check in the amount of

$195,000.00 that accompanied the petition, as required by the request for proposal.

C. This Final Order shall become effective on the date offiling with the agency clerk

of the Department of Management Services.

DONE and ORDERED on this t b!L day of -f1a ,2014.

g J. Nic 0 ,A'gency Secretary

Department If Management Services

4050 Esplanade Way, Suite 285

Tallahassee, Florida 32399

NOTICE OF RIGHT TO APPEAL

Unless expressly waived by a party such as in a stipulation or in other similar fOTIns of

settlement, any party substantially affected by this final order may seek judicial review by filing

an original notice of appeal with the agency clerk of the department of management services, and

a copy, accompanied by filing fees prescribed by law, with the clerk of the appropriate district

coun of appeal. The notice of appeal must be filed within thirty (30) days of rendition of this

order, in accordance with Rule 9.110, Florida Rules of Appellate Procedure, and Section 120.68,

Florida Statutes.

Certificate of Clerk:

Filed in the Office of the Agency

Clerk of the Department of Management

Services on this ,,;) "1-4 .... day of

:::Su J ,2014.

Mi· ae Sivilla, Agency Clerk

Copies furnished to:

Donna Blanton, Esquire Brian A. Newman, Esquire

Radey Law Firm Pennington, Moore, Wilkinson,

301 South Bronough Street, Suite 200 Bell and Dunbar, P.A.

Tallahassee, Florida 32301 215 South Monroe Street, Second Floor

Post Office Box 10095

Laura M. Dennis, Esquire Tallahassee, Florida 32302-2095

Radey Law Firm

301 South Bronough Street, Suite 200

Tallahassee, Florida 32301

Veronica Donnelly, Esquire

Assistant General Counsel

Department of Management Services

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399-0950

Cynthia S. Tunnic1iff, Esquire

Pennington, Moore, Wilkinson,

Bell and Dunbar, P.A.

215 South Monroe Street, Second Floor

Post Office Box 10095

Tallahassee, Florida 32302

Howard E. Adams, Esquire

Pennington, Moore, Wilkinson,

Bell and Dunbar, P.A.

215 South Monroe Street, Second Floor

Post Office Box 10095

Tallahassee, Florida 32302

Mallory L. Harrell, Esquire

Pennington, Moore, Wilkinson,

Bell and Dunbar, P.A.

215 South Monroe Street, Second Floor

Post Office Box 10095

Tallahassee, Florida 32302

Brandice D. Dickson, Esquire

Pennington, Moore, Wilkinson,

Bell and Dunbar, P.A.

215 South Monroe Street, Second Floor

Post Office Box 10095

Tallahassee, Florida 32302