14-005300BID Toshiba Business Soultions (Usa), Inc., A Delaware Corporation vs. School Board Of Broward County Status: Closed Recommended Order on Monday, June 15, 2015.

Summary: Petitioner failed to show that the School Board's intended award was contrary to its governing rules, policies or solicition specifications or that the School Board's actions were clearly erroneous, contrary to competition, or capricious.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

TOSHIBA BUSINESS SOL U TIONS

(USA), INC., A DELAWARE

CORPORATION,

Petitioner,

vs. Case No. 14 - 5300BID

SCHOOL BOARD OF BROWARD COUNTY,

Respondent,

and

IMAGENET CONSULTING OF MIAMI,

INC.,

Intervenor.

__ _____________________________/

RECOMMENDED ORDER

Pursuant to notice, a formal administrative hearing was

conducted before Administrative Law Judge Mary Li Creasy in Fort

Lauderdale, Florida, on April 9 , 2015.

APPEARANCES

For Petitioner: William G. Salim, Jr., Esquire

Moskowitz, Mandell, Salim

and Simowitz, P.A.

800 Corporate Drive, Suite 500

Fort Lauderdale, Florida 33334

Eric J. Ray man, Esquire

Genovese, Joblove and Battista, P.A.

PNC Center, Suite 1110

200 East Broward Boulevard

Fort Lauderdale, Florida 33301

For Respondent: Robert Paul Vignol a, Esquire

Office of the General Counsel

Eleventh Floor

600 Southeast Third Avenue

Fort Lauderdale, Florida 33301

For Intervenor: Albert E. Dotson, Esquire

Wendy Franco is, Esquire

Bilzin , Sumberg , Baena , Price

and Axelrod, LLP

1450 Brickell Avenue, Suite 2300

Miami, Florida 33131

STATEMENT OF THE ISSUE S

Whether, in issuing the Revised Recommendation/ Tabulation

for contracts for Items 1 and 3 for Invitation to Bid No. 15 -

048E, Multifunctional Devices, Cost - Per - Copy, Respondent acted

contrary to one or more governing statutes, rules, policies, or

procurement specifications, or any combination thereof; a nd if

so, for each such instance, whether the misstep was clearly

erroneous, arbitrary or capricious, or contrary to competition.

PRELIMINARY STATEMENT

On June 3, 2014, Respondent, School Board of Broward County

( SBBC ), issued Invitation to Bid (ITB) No. 15 - 048E entitled

" Multifunctional Devices, Cost - Per - Copy " for the provision and

maintenance of copying d evices during the contract term. On

June 18, 2014, SBBC issued Addendum Number 1 for the ITB which

replaced a number of pages of the bidding documents and contained

responses to questions posed by prospective bidders. Addendum

Number 1 included an Appendix A Î Summary Cost Sheet which

requested bidders to provide cost - per - copy based on a stated

average monthly number of copies, and to extrapolate cost out for

12 months, 36 months, 48 months , and 60 months.

On June 20, 2014, shortly before bid submissions were

due, SBBC issued Addendum Number 2 for the ITB which deleted

Appendix A Î Summary Cost Sheet , provided a Revised - Appendix A -

Summary Cost Sheet which st ated " A Cost Summary Sheet must be

completed for each options 36 months, 48 months and 60 months , "

and included a cost summary sheet for each of those three

options. No bid specifications protest was filed by any person

or entity concerning the ITB or a dd enda n umbers 1 or 2.

The se aled bids were opened on June 24 , 2014. SBBC posted

its original Recommendation Tabulation on July 10, 2014 , which

recommended award of Items 1 and 2 to Intervenor, ImageNet

Consulting Services of Miami, Inc. (Image N et), as the primary

awardee and to Innovative Software Solutions, Inc. (Innovative) ,

as the alternate awardee; and award of Item 3 to Ricoh USA, Inc.

(Ricoh) , as the primary awardee and to ImageNet as the alternate

awardee based upon the lowest costs submitted by bidders for a

36 - month contract term. The award period specified in the

Recommendation/Tabulati on was for a 36 - month contract term

commencing on August 6, 2014 , and concluding September 30, 2017

( the additional weeks beyond the 36 - month period were to al low

the awardee to install the equipment necessary to provide the

copying services ) . Timely bid protests to the July 10, 2014 ,

posted award recommendation were filed by Petitioner, Toshiba

Business Solutions (USA) , Inc. (Toshiba) , and Konica Minolta ,

Inc. (Konica) .

SBBC met with the protestors in accordance with

s ection 120.57(3), Florida Statutes, and SBBC Policy 3320. As

a result of that meeting, SBBC determined that Konica ' s bid was

timely submitted and should be considered for purposes of award.

SBBC also determined that Toshiba ' s bid for Item 2 should be

rejected as non - responsive due to a failure of its proposed

equipment to meet the technical specifications for Item 2.

SBBC posted a Revised Recommendation/Tabulation on

August 29, 2014 , which contin ued to recommend award of Item 1 to

ImageNet as the primary awardee and to Innovative as the

alternate awardee; and award of Item 3 to Ricoh as the primary

awardee and to ImageNet as the alternate awardee. In addition,

the Revised Recommendation/Tabulatio n include d an award

recommendation for Item 2 which is not at issue in these

proceedings. The award period specified in the Revised

Recommendation/Tabulation was for a 36 - month contract term

commencing on October 7, 2014 , and concluding November 30, 2017

( the additional weeks beyond the 36 - month - period were again to

allow the awardee to install the equipment necessary to provide

the copying services ) .

On September 4, 2014, Toshiba timely filed its notice of

intent to protest the August 29, 2014 , posted Re vised

Recommendation /Tabulation. On September 15, 2014, Toshiba timely

filed its Amended Formal Petition Protesting Proposed Revised

Recommendation/Tabulation. SBBC ' s Bid Protest Committee

conducted a meeting with Toshiba on November 5, 2014 , pursuant to

s ection 120.57(3), S BBC Purchasing Policy 3320 , and the ITB, and

rejected Toshiba ' s bid protest.

On November 10, 2014, Toshiba timely requested that SBBC

forward its bid protest to the Division of Administrative

Hearings (DOAH) for a formal hearing. Imag eNet subsequently was

granted leave to intervene in these proceedings. The parties

agreed to waive the requirement under s ection 120.57(3) that the

formal hearing be commenced in these proceedings within 30 days

after the receipt of the formal written pro test by DOAH.

On April 7, 2015, the parties file d a Joint Pre - hearing

Stipulation which included a 51 paragraph Statement of Admitted

Facts. To the extent deemed relevant, those facts have been

incorporated herein. The final hearing was conducted as

sche duled on April 9, 2015. The parties stipulated to the entry

of Joint Exhibits 1 through 15 into evidence. Matth ew L. Barnes,

Petitioner ' s President, testified on behalf of Toshiba .

Toshiba ' s Exhibits 1 through 13 were admitted into evidence.

Michelle B ryant Wilcox, Purchasing Agent for SBBC , testified on

behalf of SBBC . Richard Lane, District Sales Manager for

Samsung , testified as a rebuttal witness for ImageNet .

A one - volume Transcript of the proceeding w as filed with

DOAH on April 27 , 2015. Propose d recommended orders were timely

filed by all parties and have been given due consideration during

the preparation of this Recommended Order.

Unless otherwise indicated, all rule and statutory

references are to the versions in effect at the time of the

all eged violations.

FINDING S OF FACT

1. On June 3, 2014, SBBC issued I TB No. 15 - 048E ( the ITB)

entitled " Multifunctional Devices, Cost - Per - Copy " for the

provision and maintenance of copying devices during the contract

term. The listed Submittal Requiremen ts were:

a. Manufacturer ' s Authorization Special Condition 8 ;

b. Descriptive Literature Special Condition 6 ; and

c. Material Safety Data Sheets Special Condition 16.

A Bidder ' s Preference Statement was not identified as a Submittal

Requirement.

2. S ection 4, Paragraph 2 , of the ITB was entitled " TERM "

and notified bidders that SBBC sought through the award of this

bid to " establish a contract for the period beginning from the

date of award and continuing through June 30, 2017. "

3. The Bid Summary Sheet found at Section 5 of the ITB

requested bidders to provide cost - per - copy based on a stated

average monthly number of copies, and to extrapolate cost out for

12 months and for 36 months.

4. Page 1 of the ITB contained a certification to be

executed b y each bidder ' s authorized representative which stated

in pertinent part as follows:

Bidder agrees to be bound to any and all

specifications, terms and conditions

contained in the ITB, and any released

Addenda and understand that the following are

requirem ents of this ITB and failure to

comply will result in dis qualification of bid

submitted .

All bidders submitted a signed bidder certification.

5. Section 3, Paragraph 1(a), of the General Conditions of

the ITB provided as follows:

SEALED BID REQUIREMENTS : The " Bidder

Acknowledgment Section " must be completed,

signed and returned with the bid. The Bid

Summary Sheet pages on which the Bidder

actually submits a bid, and any pages, upon

which information is required to be inserted,

must be completed and sub mitted with the bid.

The School Board of Broward County (SBBC)

reserves the right to reject any bid that

fails to comply with these submittal

requirements.

a) BIDDER ' S RESPONSIBILITY: It is the

responsibility of the Bidder to be certain

that all numbe red pages of the bid and all

attachments thereto are received and all

Addendum released are received prior to

submitting a bid without regard to how a copy

of this ITB was obtained. All bids are

subject to the conditions specified herein on

the attached b id documents and on any Addenda

issued thereto.

6. Section 3 , Paragraph 6, of the General Conditions of the

ITB provided as follows:

AWARDS: In the best interest of SBBC, the

Board reserves the right to: 1) withdraw

this bid at any time prior to the time and

date specified for the bid opening; 2) to

reject any or all bids received when there

are sound documented business reasons that

serve the best interest of SBBC; 3) to accept

any item or group of items unless qualified

by Bidder; and 4) to acquire additional

quantities at prices quoted on this ITB

unless additional quantities are not

acceptable, in which case, the bid sheets

must be noted " BID IS FOR SPECIFIED QUANTITY

ONLY. "

7. On June 18, 2014, SBBC issued Addendum Number 1 for the

ITB which re placed a number of pages within the bidding documents

and contained responses to questions posed by prospective

bidders.

8. Addendum Number 1 included Question No. 6 in which Xero x

inquired whether SBBC " would . . . consider a change to the

contract ter m of the contract to 48 or 60 - month term? " SBBC

responded through Addendum Number 1 that it had amended the bid

" to include additional pricing for 48 or 60 - months term[s] , " and

SBBC continued to request proposals for a 36 - month contract term.

9. Addendu m Number 1 revised Section 4 , Paragraph 2, of the

Special Conditions of the ITB to state as follows:

TERM: The award of this bid shall establish

a contract for the period beginning from the

date of award and continuing through an award

for a term of 36, 4 8 or 60 months. Bids will

not be considered for a shorter period of

time. All prices quoted must be firm

throughout the contract period. Items will

be ordered on an as needed basis.

10. Addendum Number 1 included an Appendix A Î Summary Cost

Sheet whic h required bidders to provide cost - per - copy based on a

stated average monthly number of copies, and to extr apolate cost

out for 12 months, 36 months, 48 months, and 60 months.

11. On June 20, 2014, SBBC issued Addendum Number 2 for the

ITB. The first pa ge of Addendum Numbe r 2 advised prospective

bidders, " This Addendum amends the above referenced bid in the

following particulars only: 1. DELETE: Appendix A Î Cost Summary

Sheet INSERT: Revised Appendix A Î Cost Summary Sheet. " The first

page of Addendum N umber 2 further cautioned bidders that " [i]t is

important to include the REVISED page when submitting your

response. " Addendum Number 2 went on to provide a Revised -

Appendix A - Summary Cost Sheet which stated " A Cost Summary Sheet

must be completed for eac h options [sic] 36 months, 48 months and

60 months " and included a cost summary sheet for each of those

three options.

12. The ITB and a ddenda n umbers 1 and 2 were released by

SBBC via Onvia DemandStar, with email notices thereof to

prospective vendors w ho subscribed to its bid notification

service.

13. Toshiba downloaded the ITB, Addendum Number 1 , and at

least the first page o f Addendum Number 2 from DemandS tar prior

to the submission of its bid to SBBC. Again, the first page of

Addendum Number 2 ca utioned bidders that Appendix A Î Summary Cost

Sheet had been deleted and replaced and that it was " important to

include the REVISED page when submitting your response. "

14. No bid specifications protest was filed by any person

or entity concerning the ITB or a ddenda n umbers 1 or 2.

15. On July 3, 2014, SBBC opened bids timely submitted in

response t o the ITB by : Toshiba ; I mageNet; Innovative; Lexmark

International, Inc.; and Ricoh. Konica had also presented a bid

to SBBC in the bid opening room prior t o the opening of bids but

after the announced time for submittal of bids. The Konica bid

was delivered to SBBC but was not opened at the time of the bid

opening.

16. Toshiba, the incumbent, was the only bidder that

violated the pricing requirements of th e ITB. The bid submitted

by Toshiba utilized the version of Appendix A - Summary Cost Sheet

that was released under Addendum N umber 1 and only offered cost -

per - copy pricing for the 60 - month term option. Toshiba ' s bid did

not submit the Revised - Appendix A - S ummary Cost Sheet issued under

Addendum N umber 2 , nor did it contain any bids offering cost per

copy pricing to SBBC for the 36 or 48 - month term options.

Although Toshiba ' s bid was not rejected as non - responsive for

failing to bid on the 36 and 48 - month t erm options and for

failing to utilize and complete the Revised - Appendix A - Summary

Cost Sheet issued under Addendum N umber 2, SBBC ' s staff later

concluded in hindsight that it should have been rejected for such

non - compliance.

17. Toshiba ' s bid included a " Pricing " note immediately

prior to its Appendix A Î Summary Cost Sheet that stated:

[Toshiba] is proposing a 60 month CPC as a

response to the [ITB]. Based on the fact the

[ITB] has no minimum, cancellation for

convenience, ability to upgrade and downgra de

with no penalty, it is in the best interest

of our organization to bid a term of

60 months. This term allows us to provide

the most aggressive price to the [SBBC] and

maintain the excellent service and support

level in place.

18. SBBC ' s staff recomm ended that an award be made under

the ITB for pricing offered for a 36 - month contract term for

Items 1, 2, and 3 for a contract period of August 6, 2014,

through September 30, 2017. On July 10, 2014, SBBC posted its

initial ITB Recommendation/Tabulation w hich did not consider the

Konica bid. The initial posted Recommendation/Tabulation

notified bidders of SBBC ' s intended award of contracts for

Items 1 and 2 to ImageNet as the primary awardee a nd to

Innovative as the alternate awardee for a contract period of

August 6, 2014, through September 30, 2017, and recommended the

award of contracts for Item 3 to Ricoh as primary awardee and to

ImageNet as alternate awardee for a contract period of August 6,

2014 , through September 30, 2017.

19. Timely bid protes ts and bid protest bonds were

filed by Konica a nd by Toshiba concerning SBBC ' s initial

Recommendation/Tabulation of July 10, 2014. SBBC ' s Bid Protest

Committee conducted a meeting with the protestors on August 26,

2014, and determined that Konica ' s bid ha d been timely submitted

and directed SBBC ' s Procurement and Warehousing Services

Depar tment ( the Department) to evaluate Konica ' s bid for

responsiveness. It also directed the Department to revise its

recommendation on the ITB to reject Toshiba ' s bid for I tem 2 as

the device offered by Toshiba for that item did not meet the

ITB ' s specifications which called for a single device capable of

perfor ming 95 copies per minute (cpm ) and Toshiba instead offered

two devices that performed at 85 cpm.

20. After revie wing Konica ' s bid for responsiveness,

SBBC posted a Revised Recommendation/Tabulation for the ITB on

August 29, 2014, which (a) recommended award of Item 1 to

ImageNet for a term from October 7, 2014 , through November 30,

2017 , as the primary awardee and t o Innovative as the alternate

awardee; (b) recommended award of Item 3 to Ricoh for a term from

October 7, 2014 , through November 30, 2017 , as the primary

awardee and to ImageNet as the alternate awardee ; and

(c) recommended the rejection of Toshiba ' s bid for Item 2 for its

failure to meet the specifications for that Item.

21. On September 4, 2014, Toshiba timely filed its notice

of intent to protest the August 29, 2014 , posted Revised

Recommendation/Tabulation. On September 15, 2014, Toshiba timely

file d its Amended Formal Petition Protesting Proposed Revised

Recommendation/Tabulation.

22. SBBC ' s Bid Protest Committee conducted a meeting with

Toshiba on November 5, 2014, pursuant to s ection 120.57(3), S BBC

Purchasing Policy 3320, and the ITB, and reje cted Toshiba ' s bid

protest.

23. On November 10, 2014, Toshiba timely requested that

SBBC forward its bid protest to DOAH for a formal hearing.

24. Toshiba has presented a number of arguments in these

proceedings seeking to avoid the circumstances Toshiba created

for itself when it failed to comply with Addendum Number 2 and

violated the ITB ' s pricing requirements and the ITB ' s requirement

as to the term of the contract to be awarded, when Toshiba only

submitted a single bid and restricted the contract ter m for which

it would be considered to 60 months. First, Toshiba attempts to

divest SBBC of its express authority to select proposals for any

contract duration for which it solicited bids other than for a

60 - month term. Second, Toshiba argues that SBBC wa s somehow

obligated to specify within the bid specifications those business

considerations that would inform SBBC ' s selection of the duration

of the contract term to be awarded under the ITB. Third, Toshiba

argues that ImageNet was non - responsive regardin g the ITB ' s

specifications concerning manufacturer ' s certifications. Toshiba

also argues that all bidders, including itself, were non -

responsive with regard to the ITB ' s specifications regarding

bidding preference laws. None of the arguments presented by

Toshiba in opposition to SBBC ' s intended award of Items 1 and 3

are persuasive.

A. The Selection of the 36 - Month Term

25. SBBC ' s recommended award for a 36 - month contract period

from October 7, 2014 , through November 30, 2017 , is consistent

with the te rms and conditions of the ITB and its a ddenda. At the

very start of this competitive solicitation, SBBC informed

bidders through Section 4, Paragraph 2 , of the ITB and the Bid

Summary Sheet at Section 5 of the ITB that it was seeking a

contract through Ju ne 30, 2017 - Î i.e. , a 36 - month contract. SBBC

also made it clear in its response to Question No. 6 of Addendum

Number 1 that " [t]he contract will be for a full 36 months. "

26. Although SBBC revised the bid specifications through

Addendum Number 1 to allo w bidders to submit " additional pricing

for 48 and 60 months term[s], " " to allow the School District to

consider a 48 and/or 60 months term contract , " and revised

Section 4 , Paragraph 2, of the ITB to provide for " an award for a

term of 36, 48 or 60 months , " it was clear under the ITB that

SBBC contemplated that a 36 - month contract could serve its needs.

Addendum Number 2 further revised the bid specifications by

providing the Revised Î Appendix A Î S ummary Cost Sheet which

informed bidders that " a Cost Summar y Sheet must be completed for

each options [sic] 36 months, 48 months and 60 months. " SBBC

intended to review the additional pricing offered for 48 and 60 -

month contract terms to determine whether those particular

options were a better business decision f or SBBC.

27. S everal factors were considered by SBBC in selecting

the contract duration for the award under the ITB. The selection

of the shorter 36 - month contract term was consistent with the

expressed terms of the ITB and a ddenda and the expressed

pr eference of SBBC ' s governing board to refrain from entering

into long - term contracts and enabled SBBC to be flexible in

finding solutions to its copying needs and to take advantage of

changes that may arise in technology; avoided problems the school

distri ct was currently experiencing with a long - term cost - per -

copy contract which ranged from equipment performance issues to

the long - term placement of technology in schools; and enabled the

school district to conduct research to determine whether future

implem entation of a managed print solution would provide the

school district with additional cost savings or financial

benefits in contrast to the cost - per - copy services being procured

through the ITB. Clearly, this selection was neither arbitrary

nor capriciou s.

28. SBBC ' s elected governing board has made it known by its

actions taken at public meetings that it disfavors long - term

contracts for the procurement of goods and services and has gone

so far as to reduce the term of contracts from the dais. SBBC ' s

staff determined that the pricing offered to SBBC for a 60 - month

contract term was not significant enough to recommend a contract

longer than the 36 - month term SBBC had been requesting since the

release of the ITB. Any cost advantages offered by Toshiba ' s

bids for Items 1, 2 , and 3 were reduced by $525,000 per year due

to the disqualification of its bid for Item 2 , which failed to

meet the ITB ' s specifications.

B. Consideration of Managed Print Services

29. Xerox Corporation informed SBBC that a managed print

services (MPS) program could save millions of dollars per year

and later submitted a no bid response to SBBC regarding the ITB

because SBBC was not implementing a MPS program under the ITB.

SBBC had also received proposals from vendors in October 2 013

concerning a MPS program and concluded that there existed a

potential annual savings of millions of dollars if such a program

could be implemented. All of which were additional reasonable,

rational reasons for SBBC to remain consistent with its decisi on

to award the contracts for a term of 36 months and not something

longer.

30. The ITB contains standard terms and conditions which

enable SBBC to terminate an awarded contract regardless of reason

and with or without cause upon 30 days written notice to the

other party. Toshiba wants SBBC to rescue Toshiba from its

failure to submit required bids for 36 - month and 48 - month periods

by forcing SBBC to award a contract obligating the agency for a

longer duration under the ITB than desired by the agency and then

have SBBC terminate the 60 - month contract award for convenience

after 36 months.

31. SBBC includes termination for convenience

provisions within its contracts for goods and services due

to s ection 1011.14, Florida Statutes, which restricts the abilit y

of district school boards to obligate public funds for a period

beyond one year. The inclusion of the standard termination for

convenience clauses in its ITBs enables SBBC to enter into

contracts exceeding one year which affords the school district

oppo rtunities to obtain continuity of service and price

advantages that would not be available under shorter contracts.

32. While SBBC has the ability under the ITB to terminate

contracts for convenience upon 30 days ' notice, it rarely does

so. SBBC has nev er exercised its right to terminate its two

prior contracts for the services sought under this ITB . A ny such

termination requires action by SBBC ' s governing board during a

public meeting.

33. SBBC ' s staff would not engage in the sham of

recommending a co ntract to its governing board for a contract

term longer than the period for which it intends to procure

services from a vendor. SBBC ' s procurement staff believes that

using the termination for convenience clause in the manner

Toshiba recommends can have an adverse effect upon the school

district ' s ability to encourage bidders to participate in its

competitive solicitations or to offer it their best pricing.

Questions 1 and 59 of Addendum Number 1 of the ITB provide

evidence of concern within the bidding m arketplace that SBBC

might exercise its termination for convenience clauses with

regard to the services being procured under the ITB and support

the perception of SBBC ' s that it should avoid a reputation for

exercising such termination authority.

34. Tosh iba argues that SBBC somehow materially misled

bidders through the ITB by stating in response to Question No. 3

concerning MPS of Addendum Number 1 that:

¤ The School District is not planning to

implement a Managed Print Services at this

time.

¤ The Sc hool District would like to receive

A dditional information regarding other

districts that have implemented a Managed

Print Services.

¤ There are no evaluation points associated

with this ITB.

SBBC ' s responses to Question No. 3 of Addendum Number 1 were

accurate and did not mislead bidders. Toshiba is the only bidder

to claim to have been misled.

35. Section 6 , Paragraph 10, of the ITB requested bidders

provide SBBC with information about how the awardee could

transition SBBC to a MPS model from the cos t - per - copy model being

offered under its bid. While SBBC requested such information

from vendors within the bidding marketplace, there is no evidence

that any bidder ' s provision or omission of such information

within its bid submission was considered in t he selection of the

recommended awardees. In fact, ImageNet was recommended for

award even though it did not provide this ancillary information

about transition to a MPS delivery model. Rather, the

recommended awardees for a 36 - month contract term for It ems 1 and

3 were determined solely on the basis of cost submitted for those

items by the bidders, all in accordance with the ITB.

36. A MPS program was a possible initiative being

considered by SBBC ' s former Chief Information Officer prior to

his departur e from SBBC in February 2014 , at which time the

school district ' s current cost - per - copy contract was nearing its

expiration. Although SBBC still had an interest in the

possibility of a MPS program, it was not going in that direction

at the time it needed to release a bid for copying services to

replace its current expiring contract.

37. Toshiba contends that SBBC was somehow required to

disclose to bidders whether the potential future implementation

of a MPS program might impact the contract award period that SBBC

might choose under the ITB. A myriad of business considerations

may inform an agency in selecting the length of its contracts for

goods and services , and there is no law or rule that requires an

agency to specify those factors within an ITB.

C. Responsiveness of the Bidders

38. Toshiba has attempted to argue that ImageNet, the

recommended awardee for Item 1 and the alternate awardee for

Item 3, was somehow non - responsive under the ITB and ineligible

for award. In support of this argument, Tos hiba has referenced

Section 4 , Paragraph 8, of the Special Conditions of the ITB

which state as follows:

MANUFACTURER ' S CERTIFICATION:

Bidder must submit with their ITB a notarized

letter from manufacturer certifying that

bidder is authorized to sell, ser vice and

warrant the multifunctional devices offered

within this ITB. Failure of the bidder to

provide this letter with their submitted

bid or upon request shall result in

disqualification of entire bid. If the

bidder is the manufacturer, then bidder

sho uld state that their company is the

manufacturer of the equipment provided in

this bid (the letter does not need to be

notarized).

39. A bid is only disqualified under Section 4 ,

Paragraph 8, of the ITB if (1) a notarized manufacturer ' s letter

is omitted from the bid ; and (2) the bidder fails to comply with

a subsequent request from SBBC to provide the letter. N o bidder,

including Toshiba and ImageNet, included a notarized letter from

a manufacturer with its b id. SBBC did not request any of the

bidders t o submit a notarized manufacturer ' s letter at any time

after the submission of bids. As a result, none of the bids,

including that of ImageNet, was non - responsive for a failure to

satisfy Paragraph 8 of Section 4 of the ITB.

40. Toshiba has also argued t hat all bids should be

rejected due to Section 3, Paragraph 1(d), of the General

Conditions of the ITB which concerns bidders ' preference laws and

states as follows:

d) BIDDING PREFERENCE LAWS: ALL BIDDERS

MUST COMPLETE AND SUBMIT THE LEGAL OPINION OF

BI DDER ' S PREFERENCE FORM IN ORDER TO BE

CONSIDERED [ sic ] FOR AWARD. The State of

Florida provides a Bidder ' s preference for

Florida vendors for the purchase of personal

property. The local preference is five (5)

percent. Bidders outside the State of

Flori da must have an Attorney, licensed

to practice law in the out - of - state

jurisdiction, as required by Florida

Statute 287.084(2), execute the " Opinion

of Out - of - State Bidder ' s Attorney on Bidding

Preferences " form and must submit this form

with the submitted bid. Such opinion should

permit SBBC ' s reliance on such attorney ' s

opinion for purposes of complying with

Florida Statute 287.084. Florida Bidders

must also complete its portion of the form.

Failure to submit and execute this form, with

the bid, shall result in bid being considered

" non - responsive " and bid rejected.

41. No bidder, including Toshiba, included an " Opinion of

Out - of - State Bidder ' s Attorney on Bidding Preferences " form with

its bid. Each bidder ' s omission of that form was for good

reaso n. Section 3, Paragraph 1(d), of the General Conditions of

the ITB is a boilerplate provision within SBBC ' s standard bidding

documents that is included pursuant to s ection 297.084(2),

Florida Statutes, for any competitive solicitations in which

personal p roperty is to be purchased by SBBC. In instances in

which it solicits bids to purchase personal property, SBBC

includes a " Bidder ' s Preference Statement " form and includes that

form among the checked " Submittal Requirements " listed in

S ection 2 , Page 1 , o f the ITB. This ITB did not include a

" Bidders Preference Statement " form among the bidding documents

or list it as one of the required submittals.

42. The state law and the boilerplate provision at

Section 3, Paragraph 1(d), of the General Conditions of the ITB

are only applicable to competitive solicitations for the purchase

of personal property and do not extend to competitive

solicitations for the purchase of services. As Section 4,

Paragraph 12, of the Special Conditions of the ITB makes it clear

th at the multi - functional devices to be provided by the awardee

under the ITB will " remain the property of the vendor, " the

standard bidder ' s preference provision contained within the ITB

is plainly inapplicable to this procurement.

CONCLUSIONS OF LAW

4 3. DOAH has personal and subject matter jurisdiction in

this proceeding pursuant to sections 120.569, 120.57(1), and

120.57(3), Florida Statutes (2014) .

A. Petitioner ' s Burden and Standards of Proof

4 4. Pursuant to section 120.57(3)(f) , the burden of proof

rests with T oshiba as the party opposing the proposed agency

action. State Contracting & Eng ' g Corp. v. Dep ' t of Transp. , 709

So. 2d 607, 609 (Fla. 1st DCA 1998). Toshiba must sustain its

burden of proof by a preponderance of the evidence. Dep ' t of

Transp. v. J.W.C. Co. , 396 So. 2d 778, 787 (Fla. 1st DCA 1981).

4 5. Section 120.57(3)(f) spells out the rules of decision

applicable in bid protests and, in pertinent part, provides:

In a protest to an invitation to bid or

request for proposals pro curement, no

submissions made after the bid or proposal

opening which amend or supplement the bid or

proposal shall be considered . . . . Unless

otherwise provided by statute, the burden of

proof shall rest with the party protesting

the proposed agency ac tion. 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

agency ' s proposed action is contrary to the

agency ' s governing statutes, the agency ' s

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.

4 6. The First District Court of Appeal has construed the

term " de novo proceeding, " as used in section 120.57(3)(f), to

" describe a form of intra - agency review. The judge may receive

evidence, as with any formal hearing under section 120.57(1), but

the object of the pr oceeding is to evaluate the action taken by

the agency. " State Contracting , 709 So. 2d at 609.

4 7. In framing the ultimate issue to be decided in this de

novo proceeding as being " whether the agency ' s proposed action is

contrary to the agency ' s governi ng statutes, the agency ' s rules

or policies, or the bid or proposal specifications, " the statute

effectively establishes a standard of conduct for the agency,

which is that, in soliciting, evaluating, and accepting bids or

proposals, the agency must obey i ts governing statutes, rules,

and the project specifications. If the agency breaches this

standard of conduct, its proposed action is subject to reversal

in a protest proceeding.

4 8. Consequently, the party protesting the intended award

must identify an d prove, by the greater weight of the evidence, a

specific instance or instances where the agency ' s conduct in

taking its proposed action was either: (a) contrary to the

agency ' s governing statutes; (b) contrary to the agency ' s rules

or policies; or (c) c ontrary to the bid or proposal

specifications.

4 9. It is not sufficient, however, for the protester to

prove merely that the agency violated the general standard of

conduct. By virtue of the applicable standards of " proof, " which

are best understood as standards of review, the protester

additionally must establish that the agency ' s misstep was:

(a) clearly erroneous; (b) contrary to competition; or (c) an

abuse of discretion.

5 0. The three review standards mentioned in the preceding

paragraph are mar kedly different from one another. The abuse of

discretion standard, for example, is more deferential (or

narrower) than the clearly erroneous standard. The bid protest

review process thus necessarily entails a decision or decisions

regarding which of the several standards of review to use in

evaluating a particular action. To do this requires that the

meaning and applicability of each standard be carefully

considered.

5 1. The clearly erroneous standard is generally applied in

reviewing a lower tribunal ' s findings of fact. The Florida

Supreme Court has explained this standard as follows:

A finding of fact by the trial court in a

non - jury case will not be set aside on review

unless there is no substantial evidence to

sustain it, unless it is clearly aga inst the

weight of the evidence, or unless it was

induced by an erroneous view of the law. A

finding which rests on conclusions drawn from

undisputed evidence, rather than on conflicts

in the testimony, does not carry with it the

same conclusiveness as a finding resting on

probative disputed facts, but is rather in

the nature of a legal conclusion. . . . When

the appellate court is convinced that an

express or inferential finding of the trial

court is without support of any substantial

evidence, is clearl y against the weight of

the evidence or that the trial court has

misapplied the law to the established facts,

then the decision is ' clearly erroneous ' and

the appellate court will reverse because the

trial court has ' failed to give legal effect

to the evid ence ' in its entirety.

Holland v. Gross , 89 So. 2d 255, 258 (Fla. 1956)(citation

omitted).

5 2. Because administrative law judges (ALJs) are the triers

of fact charged with resolving disputed issues of material fact

based upon the evidence presented at he aring, and because bid

protests are fundamentally de novo proceedings, the undersigned

is not required to defer to the letting authority in regard to

any findings of objective historical fact that might have been

made prior to the agency ' s proposed action. It is exclusiv ely

the ALJ ' s responsibility, as the trier of fact, to ascertain from

the competent, substantial evidence in the record what actually

happened in the past or what reality presently exists, as if no

findings previously had been made.

5 3. If , however, the challenged agency action involves an

ultimate factual determination ÏÏ for example, an agency ' s

conclusion that a proposal ' s departure from the project

specifications was a minor irregularity as opposed to a material

deviation ÏÏ then some defer ence is in order, according to the

clearly erroneous standard of review. To prevail on an objection

to an ultimate finding, therefore, the protester must

substantially undermine the factual predicate for the agency ' s

conclusion or convince the ALJ that a defect in the agency ' s

logic unequivocally led to a mistake.

5 4. There is another species of agency action that also is

entitled to review under the clearly erroneous standard:

interpretations of statutes for whose administration the agency

is responsibl e, and interpretations of the agency ' s own rules.

State Contracting & Eng ' g Corp. v. Dep ' t of Transp. ,

709 So. 2d 607, 610 (Fla. 1st DCA 1998). In deference to the

agency ' s expertise, such interpretations will not be overturned

unless clearly erroneous. Id.

5 5. This means that if the protester objects to the

proposed agency action on the ground that it violates either a

governing statute within the agency ' s substantive jurisdiction or

the agency ' s own rule, and if, further, the validity of the

objectio n turns on the meaning of the subject statute or rule,

then the agency ' s interpretation should be accorded deference;

the challenged action should stand unless the agency ' s

interpretation is clearly erroneous (assuming the agency acted in

accordance therew ith).

5 6. The same standard of review also applies, in a protest

following the announcement of an intended award, with regard to

preliminary agency action taken upon the agency ' s interpretation

of the project specifications ÏÏ but for a reason other than

de ference to agency expertise. Section 120.57(3)(b) provides a

remedy for badly written or ambiguous specifications: they may

be protested within 72 hours after the posting of the

specifications. The failure to avail oneself of this remedy

results in a wa iver of the right to complain about the

specifications per se.

5 7. Consequently, if the dispute in a protest challenging a

proposed award turns on the interpretation of an ambiguous,

vague, or unreasonable specification, which could have been

corrected or clarified prior to acceptance of the bids or

proposals had a timely specifications protest been brought, and

if the agency has acted thereafter in accordance with a

permissible interpretation of the specification (i.e., one that

is not clearly erroneous ), then the agency ' s intended action

should be upheld ÏÏ not out of deference to agency expertise, but

as a result of the protester ' s waiver of the right to seek relief

based on a faulty specification.

5 8. The statute also requires that agency action (in

vi olation of the applicable standard of conduct) which is

" arbitrary, or capricious " be set aside. The phrase " arbitrary,

or capricious " can be equated with the abuse of discretion

standard because the concepts are practically indistinguishable ÏÏ

and because use of the term " discretion " serves as a useful

reminder regarding the kind of agency action reviewable under

this highly deferential standard.

5 9. It has been observed that an arbitrary decision is one

that is not supported by facts or logic, or is de spotic. Agrico

Chemical Co. v. Dep ' t of Envtl. Reg. , 365 So. 2d 759, 763 (Fla.

1st DCA 1978), cert. denied , 376 So. 2d 74 (Fla. 1979). Thus,

under the arbitrary or capricious standard, " an agency is to be

subjected only to the most rudimentary command of rationality.

The reviewing court is not authorized to examine whether the

agency ' s empirical conclusions have support in substantial

evidence. " Adam Smith Enters., Inc. v. Dep ' t of Envtl. Reg. ,

553 So. 2d 1260, 1273 (Fla. 1st DCA 1989). Nevertheless, the

reviewing court must consider 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 each of these factor s

to its final decision. Id.

6 0. Whether the standard is called " arbitrary or

capricious " or " abuse of discretion, " the scope of review, which

demands maximum deference, is the same. Clearly, then, the

narrow " arbitrary or capricious " standard of review cannot

properly be applied in evaluating all agency actions that might

be challenged in a bid protest; rather, this highly deferential

standard appropriately applies only to those decisions which are

committed to the agency ' s discretion.

6 1. Therefore, where the protester objects to agency action

that entails the exercise of discretion, but only in such

instances, the objection cannot be sustained unless the agency

abused its discretion, i.e., acted arbitrarily or capriciously.

6 2. The third standard of review articulated in

section 120.57(3)(f) is unique to bid protests. The " contrary to

competition " test is a catch - all which applies to agency actions

that do not turn on the interpretation of a statute or rule, do

not involve the exercise of discre tion, and do not depend upon

(or amount to) a determination of ultimate fact.

6 3. Although the contrary to competition standard, being

unique to bid protests, is less well defined than the other

review standards, the undersigned concludes that the set of

proscribed actions should include, at a minimum, those which:

(a) create the appearance of and opportunity for

favoritism;

(b) erode public confidence that contracts are awarded

equitably and economically;

(c) cause the procurement process to be genui nely unfair or

unreasonably exclusive; or

(d) are unethical, dishonest, illegal, or fraudulent. See,

e.g. , Phil ' s Expert Tree Service, Inc. v. Broward Cnty . Sch . Bd . ,

Case No. 06 - 4499BID, 2006 Fla. Div. Ad m. Hear. LEXIS 161, *24

( DOAH Mar . 19, 2007 ; BCS B May 8, 2007 ); R. N. Expertise, Inc. v.

Miami - Dade Cnty. Sch. Bd. , Case No. 01 - 2663BID, 2002 Fla. Div.

Adm. Hear. LEXIS 163 , *58 (DOAH Feb. 4, 2002 ; MDCSB Mar. 14,

2002 ); see also E - Builder v. Miami - Dade Cnty. Sch. Bd. , Case No.

03 - 1581BID, 2003 WL 223479 89, *10 (DOAH Oct. 10, 2003 ; MDCSB Nov.

25, 2003 ).

B. The Merits of This Bid Protest

6 4. As discussed above, Toshiba advances three primary

arguments in this bid protest:

( a ) the selection of a 36 - month contract term violates

governing statu t e s, SBBC ' s policies and the ITB specifications

because the contract term providing the most financial benefit to

the school was the 60 - month term as offered by Toshiba;

( b ) Toshiba ' s bid, at a 60 - month term, offered the lowest

cost - per - copy by a respo nsive and responsible bidder; and

( c ) ImageNet ' s bid failed to comply with the ITB ' s

specifications.

1. SBBC ' s choice of a 36 - month term did not violate

applicable statutes , SBBC policies or the ITB specifications .

65. Regarding the leng th of the contract term recommended

for award, SBBC had a logic al justification for its selection of

a 36 - month term. The 36 - month contract period avoid s locking

SBBC into an obligation that would limit its ability to take

advantage of technological chang es and new solutions to its

copying needs, particularly when marketplace leaders inform ed

SBBC that it could save millions of dollars annually through a

copying program other than the one being solicited under the ITB.

It also avoids performance problems such as those currently being

experienced by SBBC when copying service technology is kept in

place for more than three years. In addition, the 36 - month

period was in keeping with the expressed preference of SBBC ' s

elected governing board for contracts tha t do not exceed three

years in duration.

6 6. Toshiba ' s arguments are based on no more than a claim

that SBBC should have made a different business judgment.

Florida ' s courts have consistently rejected such claims and

support the decision - making auth ority and business judgment of

public bodies. As was stated in Engineering Contractors

Ass ociation of S outh Fl orida v. Broward C ou nty , 789 So. 2d 445,

450 (Fla. 4th DCA 2001) , citing Liberty C ou nty v. Baxter ' s

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

Florida . . . a public body has wide discretion in soliciting and

accepting bids and its decision, when based on an honest exercise

of this discretion, will not be overturned by a court even if it

may appear erroneous and even if reasonab le persons may

disagree. " DOAH has repeatedly found that " An agency has wide

discretion in soliciting and accepting bids, and its decision, if

based on an honest exercise of this discretion, will not be

overturned even if reasonable persons may differ wit h the

outcome. " AAA - 1 Quality Lawn Care Serv . v. Sch . Bd . of Pa l m

Beach Cnty . , Fla . , Case No. 95 - 3879BID, 1995 WL 1053216, at ¶ 3

(DOAH Oct. 23, 1995 ; SBPBC Dec. 19, 1995 ).

67. Toshiba states in its a mended p rotest, " In essence,

the School Board co uld receive the same items and services for an

additional two years while saving the District hundreds of

thousands of dollars. " But to do so, SBBC would need to commit

to a longer contract term than what made business sense and in an

honest exercise of i ts discretion it chose not to do so.

6 8 . Toshiba ' s offer is detrimental to SBBC because it

deprives SBBC of an opportunity to exercise business judgment as

expressed in the ITB. Choosing a 60 - month contract term does

provide financial benefits, but choosing a 36 - month term provides

other financial benefits that SBBC deemed to be more beneficial.

There is an obvious trade - off between the contract term and the

unit price, but the decision to accept a higher unit price in

exchange for the greater flexib ility that a shorter term affords,

as opposed to a lower unit price with no flexibility, was solely

SBBC ' s to make. Section 3, Paragraph 6, of the General

Conditions of the ITB makes this clear to bidders in stating

that, " In the best interest of SBBC, th e Board reserves the right

to . . . reject any or all bids received when there are sound

documented business reasons that serve the best interest of

SBBC. "

6 9 . Toshiba ' s claim , that the evaluation process was

tainted as a result of the consideration of SBBC ' s potential

future plans to transition to a MPS program , does not pass muster

because no such evaluation criteria were advertised, it was not

possible to conform the ITB to incorporate MPS , and no other

bidders were privy to information to which To shiba did not have

access.

70 . I n Section 10, P age 33 , of the ITB, SBBC stated, " If

the School District wishes to implement Managed Print Services

district - wide for all of its Print/Copy/Fax/Scan needs, provide

information on how the Awardee could t ransition the District to a

Managed Printed Services model. " This disclosed to all proposers

that SBBC may be considering a transition to MPS in the future (a

fact already known to Toshiba) , and also allowed proposers the

opportunity to provide informatio n regarding this consideration

and incorporate this fact into their pricing and their overall

proposal. It was Toshiba ' s responsibility to respond accordingly

in its proposal. The possibility of transitioning to MPS in the

future was made known to propos ers and that possibility was

properly relied upon by SBBC in making the business decision to

select a shorter contract term.

71 . MPS provides a complete print management program that

monitors and maintains all print devices as it relates to overall

p rinting efforts, so as to reduce recurring spending on document

output, eliminate wasteful printing, reduce printing fleet, and

reduce delays caused by printer malfunctions and unexpected

repairs. MPS offers visibility and control of printing to help

cut costs, improve sustainability, productivity, and automation.

Thus, MPS was not incorporated into the ITB because it could not

be; the ITB is cost - per - copy . MPS is an integrated system of

management and production of copying and printing needs.

72. The ITB was properly awarded in accordance with the

terms and conditions set forth therein. SB B C did not use the

potential transition to MPS as part of its evaluation criteria to

select an awardee or award points; it used the possibility of

implementing MPS as a factor in deciding the best contract term

to use.

7 3 . Toshiba has attempted to somehow limit SBBC ' s ability

to select any bids other than Toshiba ' s 60 - month bids for Items 1

and 3 by citing a response to Question No. 6 within Addendum

Numbe r 1 in which it stated that " [b]ased on the responses to bid

document, the School District will make a business decision to

award to the lowest responsive bidder for the contract term that

provides the most financial benefit to the District. " That

sentenc e does not create a revised standard for award of an ITB,

but rather acknowledges that the lowest and best bid will receive

the award. The Addendum response references , to " mak[ing] a

business decision " and the " most financial benefit to the

District , " si mply inform the bidders that, after receiving the

costs information in their bids, SBBC will assess the three (3)

alternate periods of contract duration and exercise its

discretion and business judgment to select the contract term that

best meets its needs .

7 4 . Even if SBBC were to make its business decision solely

upon financial considerations, the potential savings through

types of copier programs other than the one sought through this

ITB that were identified to SBBC by the vending marketplace , bo th

prior to and within this competitive solicitation , provide a

logical justification to support SBBC ' s selection of the lowest

and best bids submitted for Items 1 and 3 for a 36 - month contract

term.

2. Toshiba was a nonresponsive bidder.

75. I n order to protest the award of the ITB, Toshiba

needed to establish that it had a " substantial interest " that

would be determined or affected by SBBC or a personal stake in

the outcome of the ITB. Preston Carroll Co ., Inc. v. Fla . Keys

Aqueduct Auth . , 40 0 So. 2d 524 (Fla. 3d DCA 1981).

76. In Enabling Technologies Company v. Florida Department

of Labor and Employment Security , 1996 WL 1060412 ( DOAH Case

No. 96 - 3265 BID (DOAH Sept . 11, 1996 ) ) , at Paragraph 18, the

hearing officer held as follows:

Pers ons " affected adversely " by the agency ' s

decision or intended decision in a bid

proceeding are provided in section 120.53(5),

Florida Statutes [now Section 120.57(3),

Florida Statutes], the opportunity to protest

and challenge the agency ' s action or intend ed

action. " Standing, " or the status of

" affected adversely, " is the subject of

myriad appellate court decisions related to

bid proceedings. Those decisions . . .

establish that a bidder who is ineligible to

be awarded the contract does not have

standing to protest the award.

77 . Because Toshiba ' s bid did not provide the information

upon which award of the ITB was based (proposals for a 36 or

48 - month contract term) , its bid was nonresponsive and Toshiba

does not have standing to protest because it does not have a

substantial interest that is being affected by SBBC ' s decision.

7 8 . Toshiba argues that its failure to follow the specific

requirement of the ITB is immaterial and a minor irregularity

that SBBC has the discretion to waive. But, the courts have

denied the discretion to waive irregularities when one bidder

would be placed " in a position of advantage over other bidders. "

Robinson Elec. Co. v. Dade Cnty. , 417 So. 2d 1034, 1034 (Fla. 3d

DCA 1982). See also Liberty Cnty . v. Baxter ' s As phalt & Concrete

Inc. , 421 So. 2d 505 (Fla. 1982). Minor irregularities do not

affect the bid price, give a competitive advantage, or adversely

impact the procuring agency ' s interests. Toshiba ' s bid does all

three of these things , and therefore , its nonc ompliance with the

ITB requirements constitutes a substantial, non - waivable

irregularity. See Lab . Corp . of Am . v. Dep ' t o f Health , Case

No. 12 - 3170BID, 2012 WL 6512603, at ¶ 2 (DOAH Dec. 10, 2012 ; DOH

Jan. 16, 2013 ); Qualtech Cleaning, Inc., d/b/a Action Cleaning v.

Fla . State Univ . , Case No. 00 - 4420BID, 2001 WL 92108, at ¶ 7

(DOAH Feb. 1, 2001 ; FSU Feb. 21, 2001 ); N EC Bus . Commc ' n Sys .

(E . ), Inc. v. Seminole Cnty . Sch . Bd . , Case No. 95 - 5038BID, 1995

WL 1053245, at ¶ 13 ( DOAH Dec. 29, 1995 ; SCSB Feb. 1, 1 996 ).

79 . Bid ders can not select whatever requirements they decide

best suit them regardless of whether the procuring agency

establishes and publishes different requirements. Such an

approach to government contracting would completely undermine all

p ublic procurements and diminish SBBC ' s ability to do business

with private parties.

80 . Accepting Toshiba ' s bid would be to ignore this

tribunal ' s warning that accepting bids that fail to meet

requirements that are outlined in addenda " would encourag e

bidders to submit incomplete bi ds with artificially low

pric e . . . . This is contrary to the purpose of competitive

bidding. It discourages fair competition upon equal terms and

eliminates the opportunity for an exact comparison of bids. "

David Nixon , Inc. v. Dep ' t of Corr . , Case No. 90 - 006278BID (Fla.

DOAH Mar . 1, 1991). In David Nixon, Inc. , th e hearing officer

found that when the failure to follow the instructions provided

in an addenda provide a " substantial benefit not enjoyed by the

other bidde rs such an irregularity may not be waived " and " would

provide no penalty for manipulating the competitive bidding

system by submitting incomplete, ' low - ball ' bids. "

81 . Indeed, at the h earing , Toshiba emphasized that its bid

included a pricing note stating:

[Toshiba] is proposing a 60 month CPC as a

response to the [ITB]. Based on the fact the

[ITB] has no minimum, cancellation for

convenience, ability to upgrade and downgrade

with no penalty, it is in the best interest

of our organization to bid a term of 60

months. This term allows us to provide the

most aggressive price to the [SBBC] and

maintain the excellent service and support

level in place.

82 . Acceptance of Toshiba ' s bid, in contravention of the

ITB ' s rules and standards, would perm it Toshiba to gain an unfair

competitive advantage by allowing it to choose what evaluation

standards are in its best interest and because longer term

contracts are generally cheaper, at the 60 - month term its bid is

more appealing than that of the other bi dders. Other firms took

on risk by providing different prices for different contract term

periods. Thus, if the only price submitted by a bidder is for

the longer contract term, it is only natural that such bidder

will appear to be the lowest bidder. A price proposal for only

the 60 - month term contract is a material variance from what SBBC

specified in its requirements insomuch as it granted Toshiba an

unfair competitive advantage and deprived SBBC of the ability to

enter into a contract on the critical terms it desired.

Toshiba ' s proposal was non - responsive and was properly rejected.

83 . Further, a material deviation arise s if a bid fail s to

provide the agency the goods, services or benefits sought by the

ag ency under an ITB . In this case, Toshib a failed to offer SBBC

its requested prices for 36 - month and 48 - month contracts for

cost - per - copy services despite the plain directions in Addendum

N umber 2. It was Toshiba ' s clear and sole responsibility under

the ITB ' s certification statement and S ectio n 3 , Paragraph 1(a),

of the ITB to obtain Addendum Number 2 and to submit a bid in

compliance with that addendum ' s directions. By failing to submit

completed Revised Î Appendix A - Summary Cost Sheet s for the 36 - month

and 48 - month contract terms, Toshiba not only failed to comply

with the ITB ' s terms and specifications, it failed to extend an

offer for SBBC to consider for any contract period other than its

lone 60 - month bid.

84. Toshiba ' s proposal deprived SBBC of the assurance that

such a contract will be entered into, performed, and guaranteed

according to SBBC ' s specified requirements because it failed to

comply with the instructions of Addendum Number 2. As a result,

Toshiba is ineligible for consideration by SBBC for an award

under the ITB for a co ntract of any duration - Î and has no pending

offer for the 36 - month contract duration chosen by SBBC in the

reasonable exercise of its business judgment.

85 . In the i nitial p rotest, and in the a mended p rotest,

Toshiba attempted to excuse its noncomplia nce with the ITB by

asserting that it only had part of the bid instructions. More

specifically, Toshiba claims that it, " did not receive actual

notice of Addendum Number 2 until after its bid submission. " In

the a mended p rotest, Toshiba states that it " d id not receive

actual notice of the second revised Cost Summary Sheet in

Addendum 2 until after it submitted its bid. " Significantly,

Toshiba does not argue that SBBC did not provide adequate

notification of Addendum Number 2. In fact, Toshiba admits tha t

it did receive notification from Onvia DemandStar of Addendum

Number 2 on the same day the bid was due. Rather, Toshiba argues

that, despite this notice, it did not know about Addendum

Number 2.

8 6 . In Xerox Corporation v. Department of General S ervices ,

Case No. 79 - 2226BID, 1980 WL 142896 ( DOAH Feb. 29, 1980 ; DGS

June 1, 1980 ), the Department of General Services issued an ITB

for cost - per - copy copying machines and five addenda to the ITB.

The basis of evaluation of the bids was cost - per - copy of

r esponsive bids. One of the addenda included a revised bid sheet

and instructions that only this revised bid sheet should be used.

Xerox did not insert on its bid sheet the price of the machine it

was proposing, claiming that the revised bid sheet did not

contain dollar signs next to the blanks. Xerox ' s bid package did

include a catalog which contained a list of machine prices. No

other bidder failed to insert the machine cost on their bid

sheets. Xerox was not selected for award and filed a bid

protest . DOAH ruled that Xerox ' s proposal was properly

disqualified for not including a price on the bid sheet and that

it failed to submit a low, responsive bid because its bid

constituted a material deviation from the provisions of the ITB.

The hearing office r stated, " Inasmuch as cost per copy

constituted the basis for an award, such failure was a material

deviation and renders the outright purchase bids unresponsive.

The ITB required all pricing information to be placed on the bid

sheet. " Id. at 6.

8 7 . The holding in Xerox applies with equal force here.

Much like Xerox, Toshiba cannot hold SBBC responsible for its own

negligence. Price was a critical factor in the evaluation of the

bids and to deny SBBC the ability to properly assess that factor

di minishes SBBC ' s use of its discretion and business judgment.

The procedures followed in competitive bids must afford an " equal

advantage to all vendors " and not adversely affect the interests

of the agency, but rather allow the agency to confidently

contra ct by being able to verify costs. Id. Toshiba ' s bid did

not allow SBBC the opportunity to be assured of the cost of a 36 -

month term contract. See Nat ' l Data Prod . , Inc. v. State of Fla . ,

Dep ' t of Mgmt . Servs . , Div . of Purchasing , Case No. 93 - 0534BID,

199 3 WL 943766, at ¶ 8 (DOAH Mar. 31, 1993; DMS June 9, 1993 ).

The fact that Toshiba did not have the time to review the

Addendum Number 2 or chose not to review it, is not reason to

suspend the established rules and standards of the ITB and

evaluate Toshiba ' s bid differently than that of the other

bidders. Toshiba ' s failure to comply with the ITB cannot be

excused by Toshiba ' s own lack of diligence in reviewing the

addenda to the ITB.

8 8 . Toshiba attempts to discount the difference in contract

term o ptions by pointing to the fact that the contract may be

terminated for convenience, but by law SBBC is not permitted to

enter into a 60 - month term contract with the intent to simply

terminate it after 36 months. In Handi - Van, Inc. v. Broward

County , 116 S o. 3d 530 (2013), the court explains that the

standard used to analyze the propriety of a governmental

entity ' s decision to terminate for convenience is whether the

governmental entity exercised its right to terminate in bad

faith. Id. at 538. Importantl y, in cases in which the

governmental entity entered into the contract with no intention

of fulfilling its promise, the court reads into termination for

convenience clauses the requirement of a change from the

circumstances of the bargain or in the expecta tions of the

parties, further limiting the ability to terminate for

convenience. Id. at 537, 539.

89 . SBBC is not permitted to enter into a contract with the

intent to cut it short. On page 14 of Addendum Number 1, when

asked about the early termin ation clause " of the RFP [sic] , " SBBC

responded in a manner that explained that it does not typically

use the termination clause stating, " [SBBC] has not exercised

this option in its two previous contract terms. This period

would be from 2002 to present. " Thus, Toshiba ' s argument that

their longer term contract can simply be cancelled for

convenience to conform with SBBC ' s ultimate decision to select a

36 - month contract term is incorrect, would expose SBBC to a

lawsuit challenging the legality of the term ination, and is not

in line with the business practices of SBBC.

3. ImageNet ' s bid complied with the ITB specifications.

90 . ImageNet ' s bid is not rendered non - responsive by its

lack of the notarized Manufacturer ' s Certification discussed at

Se ction 4 , Paragraph 8, of the ITB. Although this ITB provision

states that a bidder is to submit a notarized letter with its bid

from the manufacturer certifying that the bidder is authorized to

sell, service and warrant the multifunctional devices offered

under the ITB, the ITB states that disqualification would only

occur if the bidder failed to provide the letter " with their

submitted bid or upon request. " (emphasis added). The reco rd is

clear that (a) no bidder ( including Toshiba ) submitted a

notarize d manufacturer ' s certification ; and (b) no post - bid

request was made by SBBC to any bidder for the submission of a

notarized manufacturer ' s certification. Under these facts and

the terms of Section 3 , Paragraph 1(d), of the ITB, none of the

bidders are su bject to disqualification of their bids.

91 . Toshiba also argues that ImageNet ' s bid (and those of

the other bidders) was non - responsive due to a lack of a legal

opinion of bidder ' s preference form. The standard boilerplate

provision at Section 3 , Paragraph 1(d), of the ITB ' s general

conditions concerning submission of a legal opinion of bidders

preference form , as well as section 287.084(2), Florida S tatutes,

which prompted inclusion of that boilerplate provision , are

inapplicable to this competit ive solicitation. The terms and

conditions of the ITB make it clear that the recommended awardee

will be providing cost - per - copy services to SBB C and that SBBC

will not be purchasing personal property under the contract

awarded pursuant to the ITB. As su ch, the lack of a legal

opinion of bidders preference form within ImageNet ' s bid , or that

of any other bidder , does not render those bids non r esponsive.

4. The awardees were the lowest and second lowest

responsive, responsible bidders .

92 . SBBC sel ected awardees that followed the fixed rules

and standards outlined in the ITB which required that a price

proposal be submitted for each contract term. If SBBC accepted

Toshiba ' s bid and decided to not follow its own ITB requirements,

it would be acting arbitrarily. Procacci v. Dep ' t of H RS , 603

So. 2d 1299, 1299 - 1300 (Fla. 1st DCA 1992).

93 . SBBC issued an addendum that specifically stated that a

Cost Summary Sheet must be completed for each of the contract

terms, thus, contrary to what Toshiba claims, it is not

arbitrary, capricious, illogical or despotic for it to then base

its decision to award on any of the contract terms for which

bidders were required to offer a price proposal. SBBC properly

exercised its discretion when it recommended ImageNet a nd not

Toshiba for award and Toshiba did not prove that SBBC acted

arbitrarily or capriciously.

94 . In light of the foregoing F indings of F act and

C onclusions of L aw, the lowest and second lowest respo nsive,

responsible bidders for I tem 1 under the ITB fo r the 36 - month

contract option were ImageNet and Innovative and the lowest and

second lowest responsive, responsible bidders for Item 3 under

the ITB for this 36 - month contract option were Ricoh and

ImageNet.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the School Board of Broward County

enter a f inal o rder that adopts the Findings of Fact and

Conclusions of Law contained herein, dismisses the protest filed

by Toshiba Business Solutions (USA), Inc., a nd upholds the awards

of contracts under the procurement for a 36 - month term from

October 7, 2014 , through November 30, 2017 , to ImageNet

Consulting of Miami, Inc. , as the primary awardee for Item 1 and

to Innovative Software Solution, Inc. , as the alterna te awardee

for Item 1 , and to Ricoh USA, Inc. , as the primary awardee for

Item 3 and to ImageNet Consulting of Miami, Inc. , as the

alternate awardee for Item 3.

DONE AND ENTERED this 15th day of June , 2015 , in

Tallahassee, Leon County, Florida.

S

MARY LI CREASY

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 15th day of June , 2015 .

COPIES FURNISHED:

Robert Paul Vignola, Esquire

Office of the General Counsel

Eleventh Floor

600 Southeast Third Avenue

Fort Lauderdale, Florida 33301

(eServed)

William G. Sa lim, Jr., Esquire

Moskowitz, Mandell, Salim

and Simowitz, P.A.

800 Corporate Drive , Suite 500

Fort Lauderdale, Florida 33334

(eServed)

Eric J. Rayman, Esquire

Genovese, Joblove and Battista, P.A.

PNC Center, Suite 1110

200 East Broward Boulevard

Fort L auderdale, Florida 33301

(eServed)

Albert E. Dotson, Esquire

Wendy Francois, Esquire

Bilzin , Sumberg , Baena , Price

and Axelrod, LLP

1450 Brickell Avenue , Suite 2300

Miami, Florida 33131

(eServed)

Matthew Mears , General Counsel

Department of Educatio n

Turlington Building, Suite 1244

325 West Gaines Street

Tallahassee, Florida 32399 - 0400

(eServed)

Robert W. Runcie, Superintendent

Broward County School Board

Tenth Floor

600 Southeast Third Avenue

Fort Lauderdale, Florida 33301

(eServed)

Pam Stewart

Commissioner of Education

Department of Education

Turlington Building, Suite 1514

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 da ys 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.