17-002500BID Grande Park Limited Partnership vs. Florida Housing Finance Corporation
 Status: Closed
Recommended Order on Thursday, June 29, 2017.


View Dockets  
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.

1STATE OF FLORIDA

4DIVISION OF ADMINISTRATIVE HEARINGS

8JPM OUTLOOK ONE LIMITED

12PARTNERSHIP ,

13Petitioner,

14vs. Case No. 17 - 2499BID

20FLORIDA HOUSING FINANCE

23CORPORATION,

24Respondent,

25and

26HTG HAMMOCK RIDGE II, LLC,

31Intervenor.

32_______________________________/

33GRANDE PARK LIMITED PARTNERSHIP ,

37Petitioner,

38vs. Case No. 17 - 2500BID

44FLORIDA HOUSING FINANCE

47CORPORATION,

48Respondent,

49and

50HTG HAMMOCK RIDGE II, LLC,

55Intervenor.

56_______________________________/

57RECOMMENDED ORDER

59Pursuant to notice, a final hearing was held in these case s

71on May 15, 2017, before Lawrence P. Stevenson, a duly - designated

83Administrative Law Judge, sitting as an informal hearing officer

92pursuant to sections 120.57(2) & (3), Flor ida Statutes, in

102Tallahassee, Florida.

104APPEARANCES

105For Petitioner s : Michael P. Donaldson, Esquire

113Carlton Fields Jorden Burt, P.A.

118Post Office Drawer 190

122215 South Monroe Str eet, Suite 500

129Tallahassee, Florida 32302 - 0190

134For Respondent: Chris topher McGuire, Esquire

140Florida Housing Finance Corporation

144Suite 5000

146227 North Bronough Street

150Tallahassee, Florida 32301

153For Intervenor: Maureen McCarthy Daughton, Esquire

159Maureen McCarthy Daughton, LLC

1631725 Capital Circle Northeast, Suite 304

169Tallahassee, Florida 3 2308

173STATEMENT OF THE ISSUE

177At issue in this proceeding is whether the actions of the

188Florida Housing Finance Corporation (ÐFlorida HousingÑ)

194concerning the review and scoring of the responses to Request for

205Applications 2016 - 110, Housing Credit Financing for Affordable

214Housing Developments Located in Medium and Small Counties (the

223ÐRFAÑ), was clearly erroneous, contrary to competition, arbitrary

231or capricious. Specifically, the issue is whether Florida

239Housing acted contrary to the agencyÓs governing sta tutes, rules,

249policies, or the RFA specifications in finding that the

258applications of Petitioners JPM Outlook One Limited Partnership

266(ÐJPM OutlookÑ) and Grande Park Limited Partnership (ÐGrande

274ParkÑ) were ineligible for funding.

279PRELIMINARY STATEMENT

281O n October 7, 2016, Florida Housing issued the RFA, which

292solicited applications to compete for an allocation of Federal

301Low - Income Housing Tax Credit funding for the construction of

312affordable housing developments. Florida Housing issued a

319modification to the RFA on November 10, 2016. On December 2,

3302016, a number of developers submitted applications in response

339to the RFA, including Petitioners JPM Outlook and Grande Park,

349and Intervenor Hammock Ridge II, L LC (ÐHammock RidgeÑ). On

359March 24, 2017, Florid a Housing posted notice of its intended

370decision to award funding to 10 applicants, including Hammock

379Ridge. Petitioners JPM Outlook and Grande Park were determined

388to be ineligible for funding.

393JPM Outlook and Grande Park timely filed with Florida

402Housin g their notices of protest, followed by a Formal Written

413Protest and Petition for Administrative Hearing (ÐPetitionÑ) for

421each Petitioner, pursuant to section 120.57(3) and Florida

429Administrative Code Rules 67 - 60.009 and 28 - 110.004.

439On April 24, 2017, Hamm ock Ridge filed with Florida Housing

450its Petition for Leave to Intervene in both cases, pursuant to

461Florida Administrative Code R ule 28 - 106.205.

469On April 25, 2017, Florida Housing forwarded the cases to

479the Division of Administrative Hearings (ÐDOAHÑ). By O rders

488dated May 1, 2017, the cases were consolidated for hearing and

499Hammock RidgeÓs Petition for Leave to Intervene was granted.

508All parties agreed that the issues raised in the Petition

518were matters of law and that there were no disputed issues of

530ma terial fact requiring resolution at the hearing. Therefore,

539this proceeding was conducted as an informal hearing pursu ant to

550sections 120.57(2) and (3) . The parties submitted a Prehearing

560Stipulation setting forth the agreed facts as to the RFA process

571a nd the scoring issue raised in this proceeding.

580The informal hearing was held on May 15, 2017. At the

591hearing, Joint Exhibits 1 through 10 were admitted into evidence.

601Petitioners presented the testimony of Brian Parent, a principal

610of both companies who was involved in preparing the applications.

620Florida Housing presented the testimony of Ken Reecy, its

629Director of Multifamily Programs. Intervenor called no

636witnesses. All three parties presented oral argument.

643The one - volume Transcript of the final he aring was filed at

656DOAH on June 1, 2017. On J une 8, 2017, Petitioners filed an

669Unopposed Motion for Extension of Time to File Proposed

678Recommended Orders, which was granted orally on June 9, 2017 , and

689memorialized in a written Order Granting Extension of Time on

699June 12, 2017. All three parties submitted Proposed Recommended

708Orders on June 13, 2017, as set forth i n the Order Granting

721Extension of Time. The Proposed Recommended Orders have been

730given due consideration in the preparation of this Recommende d

740Order.

741Unless otherwise stated, all statutory references are to the

7502016 edition of the Florida Statutes.

756FINDING S OF FACT

760Based on the oral and documentary evidence adduced at the

770final hearing, and the entire record in this proceeding, the

780following F indings of Fact are made:

7871. JPM Outlook is a Florida limited partnership based in

797Jacksonville, Florida, that is in the business of providing

806affordable housing.

8082. Grande Park is a Florida limited partnership based in

818Jacksonville, Florida, that is in the business of providing

827affordable housing.

8293. Hammock Ridge is a Florida limited liability company

838based i n Coconut Grove, Florida, that is in the business of

850providing affordable housing.

8534. Florida Housing is a public corporation created pursuant

862to section 420.504, Florida Statutes. For the purposes of this

872proceeding, Florida Housing is an agency of the State of Florida.

883Its purpose is to promote public welfare by administering the

893governmental function of financing affordable housing in Florida.

901Pursuant to section 420.5099, Florida Housing is designated as the

911housing credit agency for Florida within the meaning of section

92142(h)(7)(A) of the Internal Revenue Code and has the

930responsibility and authority to establish procedures for

937allocating an d distributing low - income housing tax credits.

9475. The low income housing tax credit program was enacted to

958incentivize the private market to invest in affordable rental

967housing. These tax credits are awarded competitively to housing

976developers in Florida for rental housing projects that qualify.

985The credits are then normally sold by developers for cash to raise

997capital for their projects. The effect of this sale is to reduce

1009the amount that the developer would have to borrow otherwise.

1019Because the total debt is lower, a tax credit property can (and

1031must) offer lower, more affordable rents. Developers also

1039covenant to keep rents at affordable levels for periods of 30 to

105150 years as consideration for receipt of the tax credits.

10616. Housing tax credits are not tax deductions. For example,

1071a $1,000 deduction in a 15 - percent tax bracket reduces taxable

1084income by $1,000 and reduces tax li ability by $150, while a

1097$1,000 tax credit reduces tax liability by $1,000. The demand for

1110tax credits provided by the fed eral government exceeds the supply.

11217. Florida Housing is authorized to allocate housing tax

1130credits and other funding by means of a request for proposal or

1142other competitive solicitation in s ection 420.507(48). Florida

1150Housing has adopted c hapter 67 - 60 to govern the competitive

1162solicitation process for several different programs, including the

1170program for tax credits. Chapter 67 - 60 provides that Florida

1181Housing allocate its housing tax credits, which are made available

1191to Florida Housing on an annual ba sis by the U.Seasury,

1202through the bid protest provisions of section 120.57(3) .

12118. In their applications, applicants request a specific

1219dollar amount of housing tax credits to be given to the applicant

1231each year for a period of 10 years. Applicants wi ll normally sell

1244the rights to that future stream of income tax credits (through

1255the sale of almost all of the ownership interest in the applicant

1267entity) to an investor to generate the amount of capital needed to

1279build the development. The amount which c an be received depends

1290upon the accomplishment of several factors , such as a certain

1300percentage of the projected Total Development Cost; a maximum

1309funding amount per development based on the county in which the

1320development will be located; and whether the development is

1329located within certain designated area of some counties. This,

1338however, is not an exhaustive list of the factors considered.

13489. Housing tax credits are made available through a

1357competitive application process commenced by the issuance of a

1366Request for Applications. A Request for Applications is

1374equivalent to a Ðrequest for proposal,Ñ as indicated in rule

138567 - 60.009(3) . The RFA in this case was issued on October 7, 2016.

1400A modification to the RFA was issued on November 10, 2016, and

1412respo nses were due December 2, 2016. A challenge was filed to the

1425terms, conditions, or requirements of the RFA by parties not

1435associated with the instant case, but th at challenge was dismissed

1446prior to hearing.

144910. Through the RFA, Florida Housing seeks to a ward up to an

1462estimated $12,312,632 of housing tax credits to qualified

1472applicants to provide affordable housing developments in Medium

1480Counties, as well as up to an estimated $477,091 of housing tax

1493credits to qualified applicants to provide affordable ho using

1502developments in Small Counties other than Monroe County.

151011. By the terms of the RFA, a review committee made up of

1523Florida Housing staff reviewed and scored each application. These

1532scores were presented in a public meeting and the committee

1542ultima tely made a recommendation as to which projects should be

1553funded. This recommendation was presented to Florida HousingÓs

1561Board of Directors (Ðthe BoardÑ) for final agency action.

157012. On March 24, 2017, all applicants received notice that

1580the Board had ap proved the recommendation of the review committee

1591concerning which applications were eligible or ineligible for

1599funding and which applications were selected for awards of housing

1609tax credits, subject to satisfactory completion of the credit

1618underwriting pr ocess. The notice was provided by the posting on

1629Florida HousingÓs website (www.floridahousing.org) of two

1635spreadsheets, one listing the ÐeligibleÑ and ÐineligibleÑ

1642applications and one identifying the applications which Florida

1650Housing proposed to fund.

165413. Florida Housing announced its intention to award funding

1663to 10 developments, including Intervenor Hammock Ridge.

1670Petitioners JPM Outlook and Grande Park were deemed ineligible.

167914. If JPM Outlook and Grande P ark had been deemed eligible,

1691each would h ave been in the funding range based on its assigned

1704lottery number and the RFA selection criteria. If Grande P ark had

1716been deemed eligible, Hammock Ridge would not have been

1725recommended for funding.

172815. Petitioners JPM Outlook and Grande P ark timely file d

1739notices of protest and petitions for administrative proceedings.

174716. The scoring decision at issue in this proceeding is

1757based on Florida HousingÓs decision that Petitioners failed to

1766submit a s Attachment 1 to Exhibit A the correct and properly

1778signed v ersion of the Applicant Certification and Acknowledgment

1787Form. PetitionersÓ admitted failure to submit the correct

1795Applicant Certification and Acknowledgement Form was the sole

1803reason that Florida Housing found Petitioners Ó applications to be

1813ineligible f or funding.

181717. Section Four of the RFA was titled, ÐINFORMATION TO BE

1828PROVIDED IN APPLICATION.Ñ Listed there among the Exhibit A

1837submission requirements was the Applicant Certification and

1844Acknowledgement Form, described as follows:

1849The Applicant must include a signed Applicant

1856Certification and Acknowledgement form as

1861Attachment 1 to Exhibit A to indicate the

1869ApplicantÓs certification and acknowledgement

1873of the provisions and requirements of the

1880RFA. The form included in the copy of the

1889Application l abeled ÐOriginal Hard CopyÑ must

1896reflect an original signature (blue ink is

1903preferred). The Applicant Certification and

1908Acknowledgement form is provided in Exhibit B

1915of this RFA and on the CorporationÓs Website

1923http://www.floridahousing.org/Developers/

1924Mu ltiFamilyPrograms/Competitive/2016 -

1927110/RelatedForms/ (also accessible by

1931clicking here). Note: If the Applicant

1937provides any version of the Applicant

1943Certification and Acknowledgement form other

1948than the version included in this RFA, the

1956form will not be considered.

1961The final sentence of the quoted language is referred to by

1972Florida Housing as the Ðeffects clause.Ñ

197818. The November 10, 2016 , modifications to the RFA were

1988communicated to applicants in three ways. First, Florida Housing

1997provided a W eb B o ard notice. The Florida Housing Web Board is a

2012communication tool that allows interested parties and development

2020partners to stay apprised of modifications to procurement

2028documents. Second, each RFA issued by Florida Housing, including

2037the one at issue i n this proceeding, has its own specific page on

2051Florida Housing's website with hyperlinks to all documents related

2060to that RFA. Third, Florida Housing released an Official

2069Modification Notice that delineated every modification, including

2076a ÐblacklineÑ ver sion showing the changes with underscoring for

2086emphasis.

208719. Brian Parent is a principal for both JPM Outlook and

2098Grande P ark . Mr. Parent received the Web Board notification of

2110the RFA modifications via email. Upon receiving the email,

2119Mr. Parent review ed the modifications on the Florida Housing

2129website.

213020. The modification to the RFA, posted on Florida HousingÓs

2140website on November 10, 2016, included the following modification

2149of the Applicant Certification and Acknowledgement Form, with

2157textual under scoring indicating new language:

2163Pursuant to Rule 67 - 60.005, F.A.C.,

2170Modification of Terms of Competitive

2175Solicitations, Florida Housing hereby

2179modifies Item 2.b.(4) of the Applicant

2185Certification and Acknowledgement Form to

2190read as follows :

2194(4) Confirma tion that, if the proposed

2201Development meets the definition of Scattered

2207Sites, all Scattered Sites requirements that

2213were not required to be met in the

2221Application will be met, including that all

2228features and amenities committed to and

2234proposed by the App licant that are not unit -

2244specific shall be located on each of the

2252Scattered Sites, or no more than 1/16 mile

2260from the Scattered Site with the most units,

2268or a combination of both. If the Surveyor

2276Certification form in the Application

2281indicates that the pr oposed Development does

2288not consist of Scattered Sites, but it is

2296determined during credit underwriting that

2301the proposed Development does meet the

2307definition of Scattered Sites, all of the

2314Scattered Sites requirements must have been

2320met as of Application Deadline and, if all

2328Scattered Sites requirements were not in

2334place as of the Application Deadline, the

2341ApplicantÓs funding award will be rescinded ;

2347Note: For the Application to be eligible for

2355funding, the version of the Applicant

2361Certification and Ackn owledgement Form

2366reflecting the Modification posted 11 - 10 - 16

2375must be submitted to the Corporation by the

2383Application Deadline, as outlined in the RFA.

239021. Rule 67 - 48.002(105) defines ÐScattered SitesÑ as

2399follows:

2400ÐScattered Sites,Ñ as applied to a single

2408Development, means a Development site that,

2414when taken as a whole, is comprised of real

2423property that is not contiguous (each such

2430non - contiguous site within a Scattered Site

2438Development, is considered to be a ÐScattered

2445SiteÑ). For purposes of this defi nition

2452ÐcontiguousÑ means touching at a point or

2459along a boundary. Real property is

2465contiguous if the only intervening real

2471property interest is an easement, provided

2477the easement is not a roadway or street. All

2486of the Scattered Sites must be located in the

2495same county.

249722. The RFA modification included other changes concerning

2505Scattered Sites. Those changes either modified the Surveyor

2513Certification Form itself or required applicants to correctly

2521provide information concerning Scattered Sites in the S urveyor

2530Certification Form.

253223. Each Petitioner included in its application a Surveyor

2541Certification Form indicating that its proposed development sites

2549did not consist of Scattered Sites. The Surveyor Certification

2558Forms submitted were the f orms require d by the modified RFA.

2570There was no allegation that Petitioners incorrectly filled out

2579the Surveyor Certification Forms.

258324. However, the Applicant Certification and Acknowledgement

2590Form submitted by each of the Petitioners was the original form,

2601not the form as modified to include the underscored language set

2612forth in Finding of Fact 20 regarding the effect of mislabeling

2623Scattered Sites on the Surveyor Certification Form.

263025. The failure of JPM Outlook and Grande P ark to submit the

2643correct Applicant Certification and Acknowledgement Form was the

2651sole reason that Florida Housing found them ineligible for

2660funding.

266126. In deposition testimony, Ken Reecy, Florida HousingÓs

2669Director of Multifamily Programs, explained the purpose of the

2678Applicant Certifica tion and Acknowledgement Form:

2684ThereÓs a number of things that we want to be

2694sure that the applicants are absolutely aware

2701of in regard to future actions or requirements

2709by the Corporation. If they win the award,

2717there are certain things that they need to

2725know that they must do or that they are under

2735certain obligations, that thereÓs certain

2740obligations and commitments associated with

2745the application to make i t clear what the

2754requirements -- what certain requirements are,

2760not only now in the application, but also

2768perhaps in the future if they won awards.

277627. At the conclusion of a lengthy exposition on the

2786significance of the modified language relating to Scattered Sites,

2795Mr. Reecy concluded as follows:

2800[W]e wanted to make sure that if somebody

2808answered t he question or did not indicate that

2817they were a scattered site, but then we found

2826out that they were, in fact, a scattered site,

2835we wanted to make it absolutely clear to

2843everyone involved that in the event that your

2851scattered sites did not meet all of tho se

2860requirements as of the application deadline,

2866that the funding would be rescinded.

287228. Petitioners argue that the failure to submit the

2881modified Applicant Certification and Acknowledgement Form should

2888be waived as a minor irregularity. Their simplest argument on

2898that point is that their applications did not in fact include

2909Scattered Sites and therefore the cautionary language added to the

2919Applicant Certification and Ackno wledgement Form by the

2927November 10, 2016 , modifications did not apply to them and could

2938have no substantive effect on their applications.

294529. Petitioners note that their applications included the

2953substantive changes required by the November 10, 2016 ,

2961modifications, including those related to Scattered Sites.

2968Petitioners submitted th e unmodified Applicant Certification and

2976Acknowledgement Form as Attachment 1 to their modified Exhibit A.

298630. Petitioners further note that the ÐAbility to Proceed

2995FormsÑ they submitted with their applications on December 2, 2016 ,

3005were the forms as modif ied on November 10, 2016. They assert that

3018this submission indicates their clear intent to acknowledge and

3027certify the modified RFA and forms, regardless of their error in

3038submitting the unmodified Applicant Certification and

3044Acknowledgement Form.

304631. Pe titioners assert that the Scattered Sites language

3055added to the Applicant Certification and Acknowledgement Form by

3064the November 10, 2016 , modifications was essentially redundant.

3072Mr. Reecy conceded that the warning regarding Scattered Sites was

3082not tied to any specific substantive modification of the RFA. The

3093language was added to make it Ðmore clearÑ to the applicant that

3105funding would be rescinded if the Scattered sites requirements

3114were not met as of the application deadline. Petitioners point

3124out th at this warning is the same as that applying to underwriting

3137failures generally.

313932. Petitioners assert that the new language had no

3148substanti ve effect on either the Applicant Certification and

3157Acknowledgement Form or on the certifications and acknowled gements

3166required of the applicants. Even in the absence of the modified

3177language, Petitioners would be required to satisfy all applicable

3186requirements for Scattered Sites if it were determined during

3195underwriting that their applications included Scattered Sites.

320233. Petitioners conclude that, even though the modified

3210Applicant Certification and Acknowledgement Form was not included

3218with either of their applications, the deviation should be waived

3228as a minor irregularity. Florida Housing could not have be en

3239confused as to what Petitioners were acknowledging and certifying.

3248The unmodified Applicant Certification and Acknowledgement Form

3255was submitted with a modified Attachment 1 that included all

3265substantive changes made by the November 10, 2016 , modificat ions

3275to the RFA. Petitioners gained no advantage by mistakenly

3284submitting an unmodified version of the Applicant Certification

3292and Acknowledgement Form. The submittal of the unmodified version

3301of the f orm was an obvious mistake and waiving the mistake do es

3315not adversely impact Florida Housing or the public.

332334. Mr. Reecy testified that he could recall no instance in

3334which Florida Housing had waived the submittal of the wrong form

3345as a minor irregularity. He also observed that the credibility of

3356Florida Housing could be negatively affected if it waived the

3366submission of the correct form in light of the Ðeffects clauseÑ

3377contained in Section Four:

3381Due to the fact that we did have an effects

3391clause in this RFA and we felt that, in

3400accordance with the rule re quirements

3406regarding minor irregularities, that it would

3412be contrary to competition because we wanted

3419everybody to sign and acknowledge the same

3426criteria in the certification ; so we felt that

3434if some did -- some certified some things and

3443some certified to ot hers, that that would be

3452problematic.

3453And the fact that we had very specifically

3461instructed that if we did not get the modified

3470version, that we would not consider it, and

3478then if we backed up and considered it, that

3487that would erode the credibility of th e

3495Corporation and the scoring process.

350035. Mr. Reecy testified that the modification to the

3509Applicant Certification and Acknowledgement Form was intended not

3517merely to clarify the Scattered Sites requirement but to

3526strengthen Florida HousingÓs legal posi tion in any litigation that

3536might ensue from a decision to rescind the funding of an applicant

3548that did not comply with the Scattered Sites requirements as of

3559the application deadline. He believed that waiving the Ðeffects

3568clauseÑ would tend to weaken Flo rida HousingÓs legal position in

3579such a case.

358236. Petitioners had clear notice that they were required to

3592submit the modified Applicant Certification and Acknowledgement

3599Form. They did not avail themselves of the opportunity to protest

3610the RFA modifica tions. There is no allegation that they were

3621misled by Florida Housing or that they had no way of knowing they

3634were submitting the wrong form. The relative importance of the

3644new acknowledgement in the modified form may be a matter of

3655argument, but the co nsequences for failure to submit the proper

3666form were plainly set forth in the effects clause. Florida

3676Housing simply applied the terms of the modified RFA to

3686Petitioners Ó applications and correctly deemed them ineligible for

3695funding.

3696CONCLUSIONS OF LAW

369937. Pursuant to s ections 120.569 and 120.57(2) and (3),

3709Florida Statutes, the Division of Administrative Hearings has

3717jurisdiction of the parties and the subject matter of this

3727proceeding. Florida HousingÓs decisions in this case affected the

3736substantial interests of each of the parties, and each has

3746standing to challenge Florida HousingÓs scoring and review

3754decisions.

375538. This is a competitive procurement protest proceeding and

3764as such is governed by section 120.57(3)(f), which provides as

3774follows in pe rtinent part:

3779Unless otherwise provided by statute, the

3785burden of proof shall rest with the party

3793protesting the proposed agency action. In a

3800competitive - procurement protest, other than a

3807rejection of all bids, proposals, or replies,

3814the administrative la w judge shall conduct a

3822de novo proceeding to determine whether the

3829agencyÓs proposed action is contrary to the

3836agencyÓs governing statutes, the agencyÓs

3841rules or policies, or the solicitation

3847specifications. The standard of proof for

3853such proceedings sha ll be whether the

3860proposed agency action was clearly erroneous,

3866contrary to competition, arbitrary, or

3871capricious. . . .

387539. Pursuant to section 120.57(3)(f), the burden of proof

3884rests with Petitioners as the parties opposing the proposed

3893agency action. See State Contracting and EngÓg Corp. v. DepÓt of

3904Transp. , 709 So. 2d 607, 609 (Fla. 1st DCA 1998). Petitioners

3915must prove by a preponderance of the evidence that Florida

3925HousingÓs proposed action is arbitrary, capricious, or beyond the

3934scope of Florida HousingÓs discretion as a state agency. DepÓt

3944of Transp. v. Groves - Watkins Constructors , 530 So. 2d 912,

3955913 - 914 (Fla. 1988); DepÓt of Transp. v. J.W.C. Co. , 396 So. 2d

3969778, 787 (Fla. 1st DCA 1981). See also § 120.57(1)(j), Fla.

3980Stat.

398140. The First Dis trict Court of Appeal has interpreted the

3992process set forth in section 120.57(3)(f) as follows:

4000A bid protest before a state agency is

4008governed by the Administrative Procedure Act.

4014Section 120.57(3), Florida Statutes (Supp.

40191996) [1/] provides that if a bi d protest

4028involves a disputed issue of material fact,

4035the agency shall refer the matter to the

4043Division of Administrative Hearings. The

4048administrative law judge must then conduct a

4055de novo hearing on the protest. See

4062§ 120.57(3)(f), Fla. Stat. (Supp. 199 6). In

4070this context, the phrase " de novo hearing" is

4078used to describe a form of intra - agency

4087review. The judge may receive evidence, as

4094with any formal hearing under section

4100120.57(1), but the object of the proceeding

4107is to evaluate the action taken by t he

4116agency. See Intercontinental Properties,

4120Inc. v. Department of Health and

4126Rehabilitative Services , 606 So. 2d 380 (Fla.

41333d DCA 1992) (interpreting the phrase " de

4140novo hearing" as it was used in bid protest

4149proceedings before the 1996 revision of the

4156Ad ministrative Procedure Act).

4160State Contracting and EngÓg Corp. , 709 So. 2d at 609.

417041. The ultimate issue in this proceeding is "whether the

4180agency's proposed action is contrary to the agency's governing

4189statutes, the agency's rules or policies, or the b id or proposal

4201specifications." In addition to proving that Florida Housing

4209breached this statutory standard of conduct, Petitioners also

4217must establish that Florida HousingÓs violation was either

4225clearly erroneous, contrary to competition, arbitrary, or

4232capricious. § 120.57(3)(f), Fla. Stat.

423742. The First District Court of Appeal has described the

"4247clearly erroneous" standard as meaning that an agency's

4255interpretation of law will be upheld "if the agency's

4264construction falls within the permissible range of

4271interpretations. If, however, the agency's interpretation

4277conflicts with the plain and ordinary intent of the law, judicial

4288deference need not be given to it." Colbert v. DepÓt of Health ,

4300890 So. 2d 1165, 1166 (Fla. 1st DCA 2004)(citations omitted) ; s ee

4312also Anderson v. Bessemer City , 470 U.S. 564, 573 - 74 , 105 S. Ct.

43261504, 1511 , 84 L. Ed. 2d 518, 528 (1985)(ÐWhere there are two

4338permissible views of the evidence, the factfinderÓs choice

4346between them cannot be clearly erroneous.Ñ) .

435343. An agency decisi on is "contrary to competition" when it

4364unreasonably interferes with the objectives of competitive

4371bidding. Those objectives have been stated to be:

4379[T]o protect the public against collusive

4385contracts; to secure fair competition upon

4391equal terms to all bi dders; to remove not

4400only collusion but temptation for collusion

4406and opportunity for gain at public expense;

4413to close all avenues to favoritism and fraud

4421in various forms; to secure the best values

4429for the [public] at the lowest possible

4436expense; and to af ford an equal advantage to

4445all desiring to do business with the

4452[government], by affording an opportunity for

4458an exact comparison of bids.

4463Harry Pepper & Assoc., Inc. v. City of Cape Coral , 352 So. 2d

44761190, 1192 (Fla. 2d DCA 1977)( quoting Wester v. Belote , 138 So.

4488721, 723 - 724 (Fla. 1931)).

449444. An agency action is capricious if the agency takes the

4505action without thought or reason or irrationally. An agency

4514action is arbitrary if it is not supported by facts or logic.

4526See Agrico Chem. Co. v. DepÓt of En vtl. Reg. , 365 So. 2d 759, 763

4541(Fla. 1st DCA 1978).

454545. To determine whether an agency acted in an arbitrary or

4556capricious manner, it must be determined "whether the agency:

4565(1) has considered all relevant factors; (2) has given actual,

4575good faith consid eration to those factors; and (3) has used

4586reason rather than whim to progress from consideration of these

4596factors to its final decision." Adam Smith Enter . v. DepÓt of

4608Envtl. Reg. , 553 So. 2d 1260, 1273 (Fla. 1st DCA 1989).

461946. However, if a decision is justifiable under any

4628analysis that a reasonable person would use to reach a decision

4639of similar importance, the decision is neither arbitrary nor

4648capricious. Dravo Basic Materials Co. v. DepÓt of Transp. ,

4657602 So. 2d 632 n.3 (Fla. 2d DCA 1992).

466647. Rule 67 - 60.006 is titled , ÐResponsibility of

4675Applicants.Ñ Subsection (1) of the rule provides as follows:

4684(1) The failure of an Applicant to supply

4692required information in connection with any

4698competitive solicitation pursuant to this

4703rule chapter shall be gr ounds for a

4711determination of nonresponsiveness with

4715respect to its Application. If a

4721determination of nonresponsiveness is made by

4727the Corporation, the Application shall not be

4734considered.

473548. Rule 67 - 60.008 provides:

4741The Corporation may waive Minor

4746Irr egularities in an otherwise valid

4752Application. Mistakes clearly evident to the

4758Corporation on the face of the Application,

4765such as computation and typographical errors

4771may be corrected by the Corporation; however,

4778the Corporation shall have no duty or

4785obl igation to correct any such mistakes.

479249. Rule 67 - 60.002(6) defines Ðminor irregularityÑ to mean

4802Ð a variation in a term or condition of an Application pursuant to

4815this rule chapter that does not provide a competitive advantage

4825or benefit not enjoyed by o ther Applicants, and does not

4836adversely impact the interests of the Corporation or the public.Ñ

484650. In the instant case, Florida Housing provided adequate

4855justification for its determination that the failure of

4863Petitioners to submit the correct Applicant Certification and

4871Acknowledgement Form was not a minor irregularity. The

4879submission of the wrong form was not an error that Florida

4890Housing could correct. More important, the interest of Florida

4899Housing in maintaining the credibility and integrity of its

4908bidding process requires that it enforce the Ðeffects clauseÑ

4917when no prospective vendor has contested its use via a challenge

4928to the RFA specifications. See Consultech of Jacksonville, Inc.

4937v. DepÓt of Health , 876 So. 2d 731, 734 (Fla. 1st DCA 2004)

4950( ve ndor waived right to challenge agencyÓs weighting of cost

4961proposals by failing to timely file a specifications protest);

4970Optiplan, Inc. v. Sch. Bd. of Broward Cnty . , 710 So. 2d 569, 572

4984(Fla. 4th DCA 1998)(by failing to timely file specifications

4993protest, vendor waived right to challenge evaluation criteria in

5002its award challenge).

500551. The effects clause is not ambiguous: ÐIf the Applicant

5015provides any version of the Applicant Certification and

5023Acknowledgement form other than the version included in thi s RFA,

5034the form will not be considered.Ñ Florida Housing reasonably

5043points out that waiving such a specific mandatory requirement in

5053the RFA would put it on a Ðslippery slopeÑ in which any mandatory

5066requirement might be considered waivable. See St. Eliza beth

5075Gardens v. Fla. Hous. Fin. Corp. , Case No. 16 - 4132BID, RO at

508847 - 48 ( Fla. DOAH Oct . 18, 2016; F HFC Nov . 28, 2016). Applicants

5105would be in doubt as to how strictly Florida Housing intends to

5117interpret mandatory provisions in future RFAs. One bidder w ould

5127naturally suspect favoritism when the agency waived mandatory

5135specifications for another bidder, thus undermining public

5142confidence in the integrity of the process. It would not be in

5154the interest of Florida Housing or the public to intentionally

5164int roduce ambiguity into this clear RFA provision.

517252. To be a minor irregularity, a variation must not

5182provide the bidder a competitive advantage and must not adversely

5192affect the interests of Florida Housing or the public. Even if

5203it is accepted that Peti tioners gained no competitive advantage

5213by submitting the wrong Applicant Certification and

5220Acknowledgement Form, Florida Housing has articulated sufficient

5227reasons why PetitionersÓ noncompliance does not meet the

5235definition of a minor irregularity because of its adverse effect

5245on the interests of Florida Housing and the public in a fair

5257bidding process conducted on a level playing field according to

5267clear specifications.

526953. It is concluded that Petitioners have failed to carry

5279their burden of pro ving that Florida HousingÓs proposed decision

5289in these consolidated cases was clearly erroneous, arbitrary, or

5298capricious, contrary to the governing statutes, rules, or RFA

5307specifications, or was contrary to competition.

5313RECOMMENDATION

5314Based on the foregoi ng, it is

5321RECOMMENDED that the Florida Housing Finance Corporation

5328enter a final order confirming its initial decision finding JPM

5338Outlook One Limited Partnership and Grande Park Limited

5346Partnership ineligible for funding , and dismissing each Formal

5354Writt en Protest and Petition for Administrative Hearing filed by

5364JPM Outlook One Limited Partnership and Grande Park Limited

5373Partnership.

5374DONE AND ENTERED this 29th day of June , 2017 , in

5384Tallahassee, Leon County, Florida.

5388S

5389LA WRENCE P. STEVENSON

5393Administrative Law Judge

5396Division of Administrative Hearings

5400The DeSoto Building

54031230 Apalachee Parkway

5406Tallahassee, Florida 32399 - 3060

5411(850) 488 - 9675

5415Fax Filing (850) 921 - 6847

5421www.doah.state.fl.us

5422Filed with the Clerk of the

5428Division of Administrative Hearings

5432this 29th day of June , 2017 .

5439ENDNOTE

54401/ The meaning of the operative language has remained the same

5451since its adoption in 1996:

5456In a competitive - procurement protest, no

5463submissions made after the bid or proposal

5470opening ame nding or supplementing the bid or

5478proposal shall be considered. Unless

5483otherwise provided by statute, the burden of

5490proof shall rest with the party protesting

5497the proposed agency action. In a

5503competitive - procurement protest, other than a

5510rejection of all bids, the administrative law

5517judge shall conduct a de novo proceeding to

5525determine whether the agency's proposed

5530action is contrary to the agency's governing

5537statutes, the agency's rules or policies, or

5544the bid or proposal specifications. The

5550standard of proof for such proceedings shall

5557be whether the proposed agency action was

5564clearly erroneous, contrary to competition,

5569arbitrary, or capricious. . . .

5575§ 120.57(3)(f), Fla. Stat. (1997).

5580COPIES FURNISHED:

5582Hugh R. Brown, General Counsel

5587Florida Housing Finance Corporation

5591Suite 5000

5593227 North Bronough Street

5597Tallahassee, Florida 32301 - 0190

5602(eServed)

5603Christopher McGuire, Esquire

5606Florida Housing Finance Corporation

5610Suite 5000

5612227 North Bronough Street

5616Tallahassee, Florida 32301

5619(eServed)

5620Michael P. Don aldson, Esquire

5625Carlton Fields Jorden Burt, P.A.

5630Post Office Drawer 190

5634215 South Monroe Street, Suite 500

5640Tallahassee, Florida 32302 - 0190

5645(eServed)

5646Betty Zachem, Esquire

5649Florida Housing Finance Corporation

5653Suite 5000

5655227 North Bronough Street

5659Tallahasse e, Florida 32301

5663(eServed)

5664Maureen McCarthy Daughton, Esquire

5668Maureen McCarthy Daughton, LLC

5672Suite 304

56741725 Capital Circle Northeast

5678Tallahassee, Florida 32308

5681(eServed)

5682Kate Flemming, Corporation Clerk

5686Florida Housing Finance Corporation

5690Suite 5000

56922 27 North Bronough Street

5697Tallahassee, Florida 32301 - 1329

5702(eServed)

5703NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

5709All parties have the right to submit written exceptions within

57191 0 days from the date of this Recommended Order. Any exceptions

5731to this Recommended Order should be filed with the agency that

5742will issue the Final Order in this case.

Select the PDF icon to view the document.
PDF
Date
Proceedings
PDF:
Date: 12/12/2017
Proceedings: Agency Final Order filed.
PDF:
Date: 07/28/2017
Proceedings: Agency Final Order
PDF:
Date: 06/29/2017
Proceedings: Recommended Order
PDF:
Date: 06/29/2017
Proceedings: Recommended Order cover letter identifying the hearing record referred to the Agency.
PDF:
Date: 06/29/2017
Proceedings: Recommended Order (hearing held May 15, 2017). CASE CLOSED.
PDF:
Date: 06/13/2017
Proceedings: Respondent's Proposed Recommended Order filed.
PDF:
Date: 06/13/2017
Proceedings: (Petitioner's Proposed) Recommended Order filed.
PDF:
Date: 06/13/2017
Proceedings: Petitioners' Notice of Filing Petitioner's Proposed Recommended Order filed.
PDF:
Date: 06/13/2017
Proceedings: Intervenor Hammock Ridge II, LLC's Proposed Recommended Order filed.
PDF:
Date: 06/12/2017
Proceedings: Order Granting Extension of Time.
PDF:
Date: 06/08/2017
Proceedings: Unopposed Motion for Extension of Time to File Proposed Recommended Orders filed.
Date: 06/01/2017
Proceedings: Transcript of Proceedings (not available for viewing) filed.
Date: 05/15/2017
Proceedings: CASE STATUS: Hearing Held.
PDF:
Date: 05/11/2017
Proceedings: Joint Pre-hearing Stipulation filed.
PDF:
Date: 05/01/2017
Proceedings: Petitioners' JPM Outlook One Limited Partnership and Grande Park Limited Partnership Notice of Taking Deposition filed.
PDF:
Date: 05/01/2017
Proceedings: Order of Pre-hearing Instructions.
PDF:
Date: 05/01/2017
Proceedings: Notice of Hearing (hearing set for May 15, 2017; 9:30 a.m.; Tallahassee, FL).
PDF:
Date: 05/01/2017
Proceedings: Order Granting Petition to Intervene.
PDF:
Date: 05/01/2017
Proceedings: Order of Consolidation (DOAH Case Nos. 17-2499BID and 17-2500BID).
PDF:
Date: 04/25/2017
Proceedings: HTG Hammock Ridge II, LLC's Petition for Leave to Intervene filed.
PDF:
Date: 04/25/2017
Proceedings: Notice of Appearance (Betty Zachem).
PDF:
Date: 04/25/2017
Proceedings: Notice to All Bidders on RFA 2016-110 filed.
PDF:
Date: 04/25/2017
Proceedings: Notice of Intent to Protest filed.
PDF:
Date: 04/25/2017
Proceedings: Formal Written Protest and Petition for Administrative Hearing filed.
PDF:
Date: 04/25/2017
Proceedings: Agency referral filed.

Case Information

Judge:
LAWRENCE P. STEVENSON
Date Filed:
04/25/2017
Date Assignment:
04/26/2017
Last Docket Entry:
12/12/2017
Location:
Tallahassee, Florida
District:
Northern
Agency:
ADOPTED IN TOTO
Suffix:
BID
 

Counsels

Related Florida Statute(s) (6):

Related Florida Rule(s) (1):