17-002499BID Jpm Outlook One Limited Partnership vs. Florida Housing Finance Corporation Status: Closed Recommended Order on Thursday, June 29, 2017.

Summary: Petitioners failed to demonstrate that Florida Housing's decision to disqualify their applications was arbitrary, capricious, contrary to competition, or contrary to the agency's governing statutes, rules, or the terms of the RFA.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JPM OUTLOOK ONE LIMITED

PARTNERSHIP ,

Petitioner,

vs. Case No. 17 - 2499BID

FLORIDA HOUSING FINANCE

CORPORATION,

Respondent,

and

HTG HAMMOCK RIDGE II, LLC,

Intervenor.

_______________________________/

GRANDE PARK LIMITED PARTNERSHIP ,

Petitioner,

vs. Case No. 17 - 2500BID

FLORIDA HOUSING FINANCE

CORPORATION,

Respondent,

and

HTG HAMMOCK RIDGE II, LLC,

Intervenor.

_______________________________/

RECOMMENDED ORDER

Pursuant to notice, a final hearing was held in these case s

on May 15, 2017, before Lawrence P. Stevenson, a duly - designated

Administrative Law Judge, sitting as an informal hearing officer

pursuant to sections 120.57(2) & (3), Flor ida Statutes, in

Tallahassee, Florida.

APPEARANCES

For Petitioner s : Michael P. Donaldson, Esquire

Carlton Fields Jorden Burt, P.A.

Post Office Drawer 190

215 South Monroe Str eet, Suite 500

Tallahassee, Florida 32302 - 0190

For Respondent: Chris topher McGuire, Esquire

Florida Housing Finance Corporation

Suite 5000

227 North Bronough Street

Tallahassee, Florida 32301

For Intervenor: Maureen McCarthy Daughton, Esquire

Maureen McCarthy Daughton, LLC

1725 Capital Circle Northeast, Suite 304

Tallahassee, Florida 3 2308

STATEMENT OF THE ISSUE

At issue in this proceeding is whether the actions of the

Florida Housing Finance Corporation (ÐFlorida HousingÑ)

concerning the review and scoring of the responses to Request for

Applications 2016 - 110, Housing Credit Financing for Affordable

Housing Developments Located in Medium and Small Counties (the

ÐRFAÑ), was clearly erroneous, contrary to competition, arbitrary

or capricious. Specifically, the issue is whether Florida

Housing acted contrary to the agencyÓs governing sta tutes, rules,

policies, or the RFA specifications in finding that the

applications of Petitioners JPM Outlook One Limited Partnership

(ÐJPM OutlookÑ) and Grande Park Limited Partnership (ÐGrande

ParkÑ) were ineligible for funding.

PRELIMINARY STATEMENT

O n October 7, 2016, Florida Housing issued the RFA, which

solicited applications to compete for an allocation of Federal

Low - Income Housing Tax Credit funding for the construction of

affordable housing developments. Florida Housing issued a

modification to the RFA on November 10, 2016. On December 2,

2016, a number of developers submitted applications in response

to the RFA, including Petitioners JPM Outlook and Grande Park,

and Intervenor Hammock Ridge II, L LC (ÐHammock RidgeÑ). On

March 24, 2017, Florid a Housing posted notice of its intended

decision to award funding to 10 applicants, including Hammock

Ridge. Petitioners JPM Outlook and Grande Park were determined

to be ineligible for funding.

JPM Outlook and Grande Park timely filed with Florida

Housin g their notices of protest, followed by a Formal Written

Protest and Petition for Administrative Hearing (ÐPetitionÑ) for

each Petitioner, pursuant to section 120.57(3) and Florida

Administrative Code Rules 67 - 60.009 and 28 - 110.004.

On April 24, 2017, Hamm ock Ridge filed with Florida Housing

its Petition for Leave to Intervene in both cases, pursuant to

Florida Administrative Code R ule 28 - 106.205.

On April 25, 2017, Florida Housing forwarded the cases to

the Division of Administrative Hearings (ÐDOAHÑ). By O rders

dated May 1, 2017, the cases were consolidated for hearing and

Hammock RidgeÓs Petition for Leave to Intervene was granted.

All parties agreed that the issues raised in the Petition

were matters of law and that there were no disputed issues of

ma terial fact requiring resolution at the hearing. Therefore,

this proceeding was conducted as an informal hearing pursu ant to

sections 120.57(2) and (3) . The parties submitted a Prehearing

Stipulation setting forth the agreed facts as to the RFA process

a nd the scoring issue raised in this proceeding.

The informal hearing was held on May 15, 2017. At the

hearing, Joint Exhibits 1 through 10 were admitted into evidence.

Petitioners presented the testimony of Brian Parent, a principal

of both companies who was involved in preparing the applications.

Florida Housing presented the testimony of Ken Reecy, its

Director of Multifamily Programs. Intervenor called no

witnesses. All three parties presented oral argument.

The one - volume Transcript of the final he aring was filed at

DOAH on June 1, 2017. On J une 8, 2017, Petitioners filed an

Unopposed Motion for Extension of Time to File Proposed

Recommended Orders, which was granted orally on June 9, 2017 , and

memorialized in a written Order Granting Extension of Time on

June 12, 2017. All three parties submitted Proposed Recommended

Orders on June 13, 2017, as set forth i n the Order Granting

Extension of Time. The Proposed Recommended Orders have been

given due consideration in the preparation of this Recommende d

Order.

Unless otherwise stated, all statutory references are to the

2016 edition of the Florida Statutes.

FINDING S OF FACT

Based on the oral and documentary evidence adduced at the

final hearing, and the entire record in this proceeding, the

following F indings of Fact are made:

1. JPM Outlook is a Florida limited partnership based in

Jacksonville, Florida, that is in the business of providing

affordable housing.

2. Grande Park is a Florida limited partnership based in

Jacksonville, Florida, that is in the business of providing

affordable housing.

3. Hammock Ridge is a Florida limited liability company

based i n Coconut Grove, Florida, that is in the business of

providing affordable housing.

4. Florida Housing is a public corporation created pursuant

to section 420.504, Florida Statutes. For the purposes of this

proceeding, Florida Housing is an agency of the State of Florida.

Its purpose is to promote public welfare by administering the

governmental function of financing affordable housing in Florida.

Pursuant to section 420.5099, Florida Housing is designated as the

housing credit agency for Florida within the meaning of section

42(h)(7)(A) of the Internal Revenue Code and has the

responsibility and authority to establish procedures for

allocating an d distributing low - income housing tax credits.

5. The low income housing tax credit program was enacted to

incentivize the private market to invest in affordable rental

housing. These tax credits are awarded competitively to housing

developers in Florida for rental housing projects that qualify.

The credits are then normally sold by developers for cash to raise

capital for their projects. The effect of this sale is to reduce

the amount that the developer would have to borrow otherwise.

Because the total debt is lower, a tax credit property can (and

must) offer lower, more affordable rents. Developers also

covenant to keep rents at affordable levels for periods of 30 to

50 years as consideration for receipt of the tax credits.

6. Housing tax credits are not tax deductions. For example,

a $1,000 deduction in a 15 - percent tax bracket reduces taxable

income by $1,000 and reduces tax li ability by $150, while a

$1,000 tax credit reduces tax liability by $1,000. The demand for

tax credits provided by the fed eral government exceeds the supply.

7. Florida Housing is authorized to allocate housing tax

credits and other funding by means of a request for proposal or

other competitive solicitation in s ection 420.507(48). Florida

Housing has adopted c hapter 67 - 60 to govern the competitive

solicitation process for several different programs, including the

program for tax credits. Chapter 67 - 60 provides that Florida

Housing allocate its housing tax credits, which are made available

to Florida Housing on an annual ba sis by the U.Seasury,

through the bid protest provisions of section 120.57(3) .

8. In their applications, applicants request a specific

dollar amount of housing tax credits to be given to the applicant

each year for a period of 10 years. Applicants wi ll normally sell

the rights to that future stream of income tax credits (through

the sale of almost all of the ownership interest in the applicant

entity) to an investor to generate the amount of capital needed to

build the development. The amount which c an be received depends

upon the accomplishment of several factors , such as a certain

percentage of the projected Total Development Cost; a maximum

funding amount per development based on the county in which the

development will be located; and whether the development is

located within certain designated area of some counties. This,

however, is not an exhaustive list of the factors considered.

9. Housing tax credits are made available through a

competitive application process commenced by the issuance of a

Request for Applications. A Request for Applications is

equivalent to a Ðrequest for proposal,Ñ as indicated in rule

67 - 60.009(3) . The RFA in this case was issued on October 7, 2016.

A modification to the RFA was issued on November 10, 2016, and

respo nses were due December 2, 2016. A challenge was filed to the

terms, conditions, or requirements of the RFA by parties not

associated with the instant case, but th at challenge was dismissed

prior to hearing.

10. Through the RFA, Florida Housing seeks to a ward up to an

estimated $12,312,632 of housing tax credits to qualified

applicants to provide affordable housing developments in Medium

Counties, as well as up to an estimated $477,091 of housing tax

credits to qualified applicants to provide affordable ho using

developments in Small Counties other than Monroe County.

11. By the terms of the RFA, a review committee made up of

Florida Housing staff reviewed and scored each application. These

scores were presented in a public meeting and the committee

ultima tely made a recommendation as to which projects should be

funded. This recommendation was presented to Florida HousingÓs

Board of Directors (Ðthe BoardÑ) for final agency action.

12. On March 24, 2017, all applicants received notice that

the Board had ap proved the recommendation of the review committee

concerning which applications were eligible or ineligible for

funding and which applications were selected for awards of housing

tax credits, subject to satisfactory completion of the credit

underwriting pr ocess. The notice was provided by the posting on

Florida HousingÓs website (www.floridahousing.org) of two

spreadsheets, one listing the ÐeligibleÑ and ÐineligibleÑ

applications and one identifying the applications which Florida

Housing proposed to fund.

13. Florida Housing announced its intention to award funding

to 10 developments, including Intervenor Hammock Ridge.

Petitioners JPM Outlook and Grande Park were deemed ineligible.

14. If JPM Outlook and Grande P ark had been deemed eligible,

each would h ave been in the funding range based on its assigned

lottery number and the RFA selection criteria. If Grande P ark had

been deemed eligible, Hammock Ridge would not have been

recommended for funding.

15. Petitioners JPM Outlook and Grande P ark timely file d

notices of protest and petitions for administrative proceedings.

16. The scoring decision at issue in this proceeding is

based on Florida HousingÓs decision that Petitioners failed to

submit a s Attachment 1 to Exhibit A the correct and properly

signed v ersion of the Applicant Certification and Acknowledgment

Form. PetitionersÓ admitted failure to submit the correct

Applicant Certification and Acknowledgement Form was the sole

reason that Florida Housing found Petitioners Ó applications to be

ineligible f or funding.

17. Section Four of the RFA was titled, ÐINFORMATION TO BE

PROVIDED IN APPLICATION.Ñ Listed there among the Exhibit A

submission requirements was the Applicant Certification and

Acknowledgement Form, described as follows:

The Applicant must include a signed Applicant

Certification and Acknowledgement form as

Attachment 1 to Exhibit A to indicate the

ApplicantÓs certification and acknowledgement

of the provisions and requirements of the

RFA. The form included in the copy of the

Application l abeled ÐOriginal Hard CopyÑ must

reflect an original signature (blue ink is

preferred). The Applicant Certification and

Acknowledgement form is provided in Exhibit B

of this RFA and on the CorporationÓs Website

http://www.floridahousing.org/Developers/

Mu ltiFamilyPrograms/Competitive/2016 -

110/RelatedForms/ (also accessible by

clicking here). Note: If the Applicant

provides any version of the Applicant

Certification and Acknowledgement form other

than the version included in this RFA, the

form will not be considered.

The final sentence of the quoted language is referred to by

Florida Housing as the Ðeffects clause.Ñ

18. The November 10, 2016 , modifications to the RFA were

communicated to applicants in three ways. First, Florida Housing

provided a W eb B o ard notice. The Florida Housing Web Board is a

communication tool that allows interested parties and development

partners to stay apprised of modifications to procurement

documents. Second, each RFA issued by Florida Housing, including

the one at issue i n this proceeding, has its own specific page on

Florida Housing's website with hyperlinks to all documents related

to that RFA. Third, Florida Housing released an Official

Modification Notice that delineated every modification, including

a ÐblacklineÑ ver sion showing the changes with underscoring for

emphasis.

19. Brian Parent is a principal for both JPM Outlook and

Grande P ark . Mr. Parent received the Web Board notification of

the RFA modifications via email. Upon receiving the email,

Mr. Parent review ed the modifications on the Florida Housing

website.

20. The modification to the RFA, posted on Florida HousingÓs

website on November 10, 2016, included the following modification

of the Applicant Certification and Acknowledgement Form, with

textual under scoring indicating new language:

Pursuant to Rule 67 - 60.005, F.A.C.,

Modification of Terms of Competitive

Solicitations, Florida Housing hereby

modifies Item 2.b.(4) of the Applicant

Certification and Acknowledgement Form to

read as follows :

(4) Confirma tion that, if the proposed

Development meets the definition of Scattered

Sites, all Scattered Sites requirements that

were not required to be met in the

Application will be met, including that all

features and amenities committed to and

proposed by the App licant that are not unit -

specific shall be located on each of the

Scattered Sites, or no more than 1/16 mile

from the Scattered Site with the most units,

or a combination of both. If the Surveyor

Certification form in the Application

indicates that the pr oposed Development does

not consist of Scattered Sites, but it is

determined during credit underwriting that

the proposed Development does meet the

definition of Scattered Sites, all of the

Scattered Sites requirements must have been

met as of Application Deadline and, if all

Scattered Sites requirements were not in

place as of the Application Deadline, the

ApplicantÓs funding award will be rescinded ;

Note: For the Application to be eligible for

funding, the version of the Applicant

Certification and Ackn owledgement Form

reflecting the Modification posted 11 - 10 - 16

must be submitted to the Corporation by the

Application Deadline, as outlined in the RFA.

21. Rule 67 - 48.002(105) defines ÐScattered SitesÑ as

follows:

ÐScattered Sites,Ñ as applied to a single

Development, means a Development site that,

when taken as a whole, is comprised of real

property that is not contiguous (each such

non - contiguous site within a Scattered Site

Development, is considered to be a ÐScattered

SiteÑ). For purposes of this defi nition

ÐcontiguousÑ means touching at a point or

along a boundary. Real property is

contiguous if the only intervening real

property interest is an easement, provided

the easement is not a roadway or street. All

of the Scattered Sites must be located in the

same county.

22. The RFA modification included other changes concerning

Scattered Sites. Those changes either modified the Surveyor

Certification Form itself or required applicants to correctly

provide information concerning Scattered Sites in the S urveyor

Certification Form.

23. Each Petitioner included in its application a Surveyor

Certification Form indicating that its proposed development sites

did not consist of Scattered Sites. The Surveyor Certification

Forms submitted were the f orms require d by the modified RFA.

There was no allegation that Petitioners incorrectly filled out

the Surveyor Certification Forms.

24. However, the Applicant Certification and Acknowledgement

Form submitted by each of the Petitioners was the original form,

not the form as modified to include the underscored language set

forth in Finding of Fact 20 regarding the effect of mislabeling

Scattered Sites on the Surveyor Certification Form.

25. The failure of JPM Outlook and Grande P ark to submit the

correct Applicant Certification and Acknowledgement Form was the

sole reason that Florida Housing found them ineligible for

funding.

26. In deposition testimony, Ken Reecy, Florida HousingÓs

Director of Multifamily Programs, explained the purpose of the

Applicant Certifica tion and Acknowledgement Form:

ThereÓs a number of things that we want to be

sure that the applicants are absolutely aware

of in regard to future actions or requirements

by the Corporation. If they win the award,

there are certain things that they need to

know that they must do or that they are under

certain obligations, that thereÓs certain

obligations and commitments associated with

the application to make i t clear what the

requirements -- what certain requirements are,

not only now in the application, but also

perhaps in the future if they won awards.

27. At the conclusion of a lengthy exposition on the

significance of the modified language relating to Scattered Sites,

Mr. Reecy concluded as follows:

[W]e wanted to make sure that if somebody

answered t he question or did not indicate that

they were a scattered site, but then we found

out that they were, in fact, a scattered site,

we wanted to make it absolutely clear to

everyone involved that in the event that your

scattered sites did not meet all of tho se

requirements as of the application deadline,

that the funding would be rescinded.

28. Petitioners argue that the failure to submit the

modified Applicant Certification and Acknowledgement Form should

be waived as a minor irregularity. Their simplest argument on

that point is that their applications did not in fact include

Scattered Sites and therefore the cautionary language added to the

Applicant Certification and Ackno wledgement Form by the

November 10, 2016 , modifications did not apply to them and could

have no substantive effect on their applications.

29. Petitioners note that their applications included the

substantive changes required by the November 10, 2016 ,

modifications, including those related to Scattered Sites.

Petitioners submitted th e unmodified Applicant Certification and

Acknowledgement Form as Attachment 1 to their modified Exhibit A.

30. Petitioners further note that the ÐAbility to Proceed

FormsÑ they submitted with their applications on December 2, 2016 ,

were the forms as modif ied on November 10, 2016. They assert that

this submission indicates their clear intent to acknowledge and

certify the modified RFA and forms, regardless of their error in

submitting the unmodified Applicant Certification and

Acknowledgement Form.

31. Pe titioners assert that the Scattered Sites language

added to the Applicant Certification and Acknowledgement Form by

the November 10, 2016 , modifications was essentially redundant.

Mr. Reecy conceded that the warning regarding Scattered Sites was

not tied to any specific substantive modification of the RFA. The

language was added to make it Ðmore clearÑ to the applicant that

funding would be rescinded if the Scattered sites requirements

were not met as of the application deadline. Petitioners point

out th at this warning is the same as that applying to underwriting

failures generally.

32. Petitioners assert that the new language had no

substanti ve effect on either the Applicant Certification and

Acknowledgement Form or on the certifications and acknowled gements

required of the applicants. Even in the absence of the modified

language, Petitioners would be required to satisfy all applicable

requirements for Scattered Sites if it were determined during

underwriting that their applications included Scattered Sites.

33. Petitioners conclude that, even though the modified

Applicant Certification and Acknowledgement Form was not included

with either of their applications, the deviation should be waived

as a minor irregularity. Florida Housing could not have be en

confused as to what Petitioners were acknowledging and certifying.

The unmodified Applicant Certification and Acknowledgement Form

was submitted with a modified Attachment 1 that included all

substantive changes made by the November 10, 2016 , modificat ions

to the RFA. Petitioners gained no advantage by mistakenly

submitting an unmodified version of the Applicant Certification

and Acknowledgement Form. The submittal of the unmodified version

of the f orm was an obvious mistake and waiving the mistake do es

not adversely impact Florida Housing or the public.

34. Mr. Reecy testified that he could recall no instance in

which Florida Housing had waived the submittal of the wrong form

as a minor irregularity. He also observed that the credibility of

Florida Housing could be negatively affected if it waived the

submission of the correct form in light of the Ðeffects clauseÑ

contained in Section Four:

Due to the fact that we did have an effects

clause in this RFA and we felt that, in

accordance with the rule re quirements

regarding minor irregularities, that it would

be contrary to competition because we wanted

everybody to sign and acknowledge the same

criteria in the certification ; so we felt that

if some did -- some certified some things and

some certified to ot hers, that that would be

problematic.

And the fact that we had very specifically

instructed that if we did not get the modified

version, that we would not consider it, and

then if we backed up and considered it, that

that would erode the credibility of th e

Corporation and the scoring process.

35. Mr. Reecy testified that the modification to the

Applicant Certification and Acknowledgement Form was intended not

merely to clarify the Scattered Sites requirement but to

strengthen Florida HousingÓs legal posi tion in any litigation that

might ensue from a decision to rescind the funding of an applicant

that did not comply with the Scattered Sites requirements as of

the application deadline. He believed that waiving the Ðeffects

clauseÑ would tend to weaken Flo rida HousingÓs legal position in

such a case.

36. Petitioners had clear notice that they were required to

submit the modified Applicant Certification and Acknowledgement

Form. They did not avail themselves of the opportunity to protest

the RFA modifica tions. There is no allegation that they were

misled by Florida Housing or that they had no way of knowing they

were submitting the wrong form. The relative importance of the

new acknowledgement in the modified form may be a matter of

argument, but the co nsequences for failure to submit the proper

form were plainly set forth in the effects clause. Florida

Housing simply applied the terms of the modified RFA to

Petitioners Ó applications and correctly deemed them ineligible for

funding.

CONCLUSIONS OF LAW

37. Pursuant to s ections 120.569 and 120.57(2) and (3),

Florida Statutes, the Division of Administrative Hearings has

jurisdiction of the parties and the subject matter of this

proceeding. Florida HousingÓs decisions in this case affected the

substantial interests of each of the parties, and each has

standing to challenge Florida HousingÓs scoring and review

decisions.

38. This is a competitive procurement protest proceeding and

as such is governed by section 120.57(3)(f), which provides as

follows in pe rtinent part:

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 la w judge shall conduct a

de novo proceeding to determine 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 sha ll be whether the

proposed agency action was clearly erroneous,

contrary to competition, arbitrary, or

capricious. . . .

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

rests with Petitioners as the parties opposing the proposed

agency action. See State Contracting and EngÓg Corp. v. DepÓt of

Transp. , 709 So. 2d 607, 609 (Fla. 1st DCA 1998). Petitioners

must prove by a preponderance of the evidence that Florida

HousingÓs proposed action is arbitrary, capricious, or beyond the

scope of Florida HousingÓs discretion as a state agency. DepÓt

of Transp. v. Groves - Watkins Constructors , 530 So. 2d 912,

913 - 914 (Fla. 1988); DepÓt of Transp. v. J.W.C. Co. , 396 So. 2d

778, 787 (Fla. 1st DCA 1981). See also § 120.57(1)(j), Fla.

Stat.

40. The First Dis trict Court of Appeal has interpreted the

process set forth in section 120.57(3)(f) as follows:

A bid protest before a state agency is

governed by the Administrative Procedure Act.

Section 120.57(3), Florida Statutes (Supp.

1996) [1/] provides that if a bi d protest

involves a disputed issue of material fact,

the agency shall refer the matter to the

Division of Administrative Hearings. The

administrative law judge must then conduct a

de novo hearing on the protest. See

§ 120.57(3)(f), Fla. Stat. (Supp. 199 6). In

this context, the phrase " de novo hearing" is

used 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 proceeding

is to evaluate the action taken by t he

agency. See Intercontinental Properties,

Inc. v. Department of Health and

Rehabilitative Services , 606 So. 2d 380 (Fla.

3d DCA 1992) (interpreting the phrase " de

novo hearing" as it was used in bid protest

proceedings before the 1996 revision of the

Ad ministrative Procedure Act).

State Contracting and EngÓg Corp. , 709 So. 2d at 609.

41. The ultimate issue in this proceeding is "whether the

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

statutes, the agency's rules or policies, or the b id or proposal

specifications." In addition to proving that Florida Housing

breached this statutory standard of conduct, Petitioners also

must establish that Florida HousingÓs violation was either

clearly erroneous, contrary to competition, arbitrary, or

capricious. § 120.57(3)(f), Fla. Stat.

42. The First District Court of Appeal has described the

"clearly erroneous" standard as meaning that an agency's

interpretation of law will be upheld "if the agency's

construction falls within the permissible range of

interpretations. If, however, the agency's interpretation

conflicts with the plain and ordinary intent of the law, judicial

deference need not be given to it." Colbert v. DepÓt of Health ,

890 So. 2d 1165, 1166 (Fla. 1st DCA 2004)(citations omitted) ; s ee

also Anderson v. Bessemer City , 470 U.S. 564, 573 - 74 , 105 S. Ct.

1504, 1511 , 84 L. Ed. 2d 518, 528 (1985)(ÐWhere there are two

permissible views of the evidence, the factfinderÓs choice

between them cannot be clearly erroneous.Ñ) .

43. An agency decisi on is "contrary to competition" when it

unreasonably interferes with the objectives of competitive

bidding. Those objectives have been stated to be:

[T]o protect the public against collusive

contracts; to secure fair competition upon

equal terms to all bi dders; to remove not

only collusion but temptation for collusion

and opportunity for gain at public expense;

to close all avenues to favoritism and fraud

in various forms; to secure the best values

for the [public] at the lowest possible

expense; and to af ford an equal advantage to

all desiring to do business with the

[government], by affording an opportunity for

an exact comparison of bids.

Harry Pepper & Assoc., Inc. v. City of Cape Coral , 352 So. 2d

1190, 1192 (Fla. 2d DCA 1977)( quoting Wester v. Belote , 138 So.

721, 723 - 724 (Fla. 1931)).

44. An agency action is capricious if the agency takes the

action without thought or reason or irrationally. An agency

action is arbitrary if it is not supported by facts or logic.

See Agrico Chem. Co. v. DepÓt of En vtl. Reg. , 365 So. 2d 759, 763

(Fla. 1st DCA 1978).

45. To determine whether an agency acted in an arbitrary or

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

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

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

reason rather than whim to progress from consideration of these

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

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

46. However, if a decision is justifiable under any

analysis that a reasonable person would use to reach a decision

of similar importance, the decision is neither arbitrary nor

capricious. Dravo Basic Materials Co. v. DepÓt of Transp. ,

602 So. 2d 632 n.3 (Fla. 2d DCA 1992).

47. Rule 67 - 60.006 is titled , ÐResponsibility of

Applicants.Ñ Subsection (1) of the rule provides as follows:

(1) The failure of an Applicant to supply

required information in connection with any

competitive solicitation pursuant to this

rule chapter shall be gr ounds for a

determination of nonresponsiveness with

respect to its Application. If a

determination of nonresponsiveness is made by

the Corporation, the Application shall not be

considered.

48. Rule 67 - 60.008 provides:

The Corporation may waive Minor

Irr egularities in an otherwise valid

Application. Mistakes clearly evident to the

Corporation on the face of the Application,

such as computation and typographical errors

may be corrected by the Corporation; however,

the Corporation shall have no duty or

obl igation to correct any such mistakes.

49. Rule 67 - 60.002(6) defines Ðminor irregularityÑ to mean

Ð a variation in a term or condition of an Application pursuant to

this rule chapter that does not provide a competitive advantage

or benefit not enjoyed by o ther Applicants, and does not

adversely impact the interests of the Corporation or the public.Ñ

50. In the instant case, Florida Housing provided adequate

justification for its determination that the failure of

Petitioners to submit the correct Applicant Certification and

Acknowledgement Form was not a minor irregularity. The

submission of the wrong form was not an error that Florida

Housing could correct. More important, the interest of Florida

Housing in maintaining the credibility and integrity of its

bidding process requires that it enforce the Ðeffects clauseÑ

when no prospective vendor has contested its use via a challenge

to the RFA specifications. See Consultech of Jacksonville, Inc.

v. DepÓt of Health , 876 So. 2d 731, 734 (Fla. 1st DCA 2004)

( ve ndor waived right to challenge agencyÓs weighting of cost

proposals by failing to timely file a specifications protest);

Optiplan, Inc. v. Sch. Bd. of Broward Cnty . , 710 So. 2d 569, 572

(Fla. 4th DCA 1998)(by failing to timely file specifications

protest, vendor waived right to challenge evaluation criteria in

its award challenge).

51. The effects clause is not ambiguous: ÐIf the Applicant

provides any version of the Applicant Certification and

Acknowledgement form other than the version included in thi s RFA,

the form will not be considered.Ñ Florida Housing reasonably

points out that waiving such a specific mandatory requirement in

the RFA would put it on a Ðslippery slopeÑ in which any mandatory

requirement might be considered waivable. See St. Eliza beth

Gardens v. Fla. Hous. Fin. Corp. , Case No. 16 - 4132BID, RO at

47 - 48 ( Fla. DOAH Oct . 18, 2016; F HFC Nov . 28, 2016). Applicants

would be in doubt as to how strictly Florida Housing intends to

interpret mandatory provisions in future RFAs. One bidder w ould

naturally suspect favoritism when the agency waived mandatory

specifications for another bidder, thus undermining public

confidence in the integrity of the process. It would not be in

the interest of Florida Housing or the public to intentionally

int roduce ambiguity into this clear RFA provision.

52. To be a minor irregularity, a variation must not

provide the bidder a competitive advantage and must not adversely

affect the interests of Florida Housing or the public. Even if

it is accepted that Peti tioners gained no competitive advantage

by submitting the wrong Applicant Certification and

Acknowledgement Form, Florida Housing has articulated sufficient

reasons why PetitionersÓ noncompliance does not meet the

definition of a minor irregularity because of its adverse effect

on the interests of Florida Housing and the public in a fair

bidding process conducted on a level playing field according to

clear specifications.

53. It is concluded that Petitioners have failed to carry

their burden of pro ving that Florida HousingÓs proposed decision

in these consolidated cases was clearly erroneous, arbitrary, or

capricious, contrary to the governing statutes, rules, or RFA

specifications, or was contrary to competition.

RECOMMENDATION

Based on the foregoi ng, it is

RECOMMENDED that the Florida Housing Finance Corporation

enter a final order confirming its initial decision finding JPM

Outlook One Limited Partnership and Grande Park Limited

Partnership ineligible for funding , and dismissing each Formal

Writt en Protest and Petition for Administrative Hearing filed by

JPM Outlook One Limited Partnership and Grande Park Limited

Partnership.

DONE AND ENTERED this 29th day of June , 2017 , in

Tallahassee, Leon County, Florida.

S

LA WRENCE P. STEVENSON

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 29th day of June , 2017 .

ENDNOTE

1/ The meaning of the operative language has remained the same

since its adoption in 1996:

In a competitive - procurement protest, no

submissions made after the bid or proposal

opening ame nding or supplementing 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 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. . . .

§ 120.57(3)(f), Fla. Stat. (1997).

COPIES FURNISHED:

Hugh R. Brown, General Counsel

Florida Housing Finance Corporation

Suite 5000

227 North Bronough Street

Tallahassee, Florida 32301 - 0190

(eServed)

Christopher McGuire, Esquire

Florida Housing Finance Corporation

Suite 5000

227 North Bronough Street

Tallahassee, Florida 32301

(eServed)

Michael P. Don aldson, Esquire

Carlton Fields Jorden Burt, P.A.

Post Office Drawer 190

215 South Monroe Street, Suite 500

Tallahassee, Florida 32302 - 0190

(eServed)

Betty Zachem, Esquire

Florida Housing Finance Corporation

Suite 5000

227 North Bronough Street

Tallahasse e, Florida 32301

(eServed)

Maureen McCarthy Daughton, Esquire

Maureen McCarthy Daughton, LLC

Suite 304

1725 Capital Circle Northeast

Tallahassee, Florida 32308

(eServed)

Kate Flemming, Corporation Clerk

Florida Housing Finance Corporation

Suite 5000

2 27 North Bronough Street

Tallahassee, Florida 32301 - 1329

(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.