19-000126BID Securus Technologies, Inc. vs. Department Of Corrections Status: Closed Recommended Order on Monday, March 25, 2019.

Summary: Petitioner failed to prove Respondent acted contrary to its governing statutes, rules or policies, and did not demonstrate the ITN process was illegal, arbitrary, dishonest or fradulent.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SECURUS TECHNOLOGIES, INC.,

Petitioner,

vs. Case No. 19 - 0 126BID

DEPARTMENT OF CORRECTIONS,

Respondent,

and

GLOBAL TEL*LINK CORPORATION,

Intervenor.

_______________________________/

RECOMMENDED ORDER

On January 31 and February 1, 2019, pursuant to sections

120.569, and 120.57(1) and (3), Florida Statutes (201 8 ), 1/ a duly -

noticed hearing was held in Tallahassee, Florida , before Lynne A.

Quimby - Pennock , an a dministrative law j udge (ALJ) assigned by the

Division of Administrative Hearings (DOAH) .

APPEARANCES

For Petitioner: William Robert Vezina, III, Esq uire

Andrew Rubin Fier, Esq uire

Megan Reynolds, Esq uire

Vezina, Lawrence and Piscitelli, P. A.

413 East Park Avenue

Tallahassee, Florida 32301

For Respondent: William D. Hall, Esq uire

Dean Mead

Suite 130

215 South Monroe Street

Tallahassee, Florida 32301

Daniel Ryan Russell, Esquire

Dean Mead

Post Office Box 351

Tallahassee, Florida 32302

Kristen Krueger Clemons, Esq uire

Department of Corrections

501 South Calhoun Street

Tallahassee, Florida 32399

For Intervenor: John A. Tucker, Esq uire

Foley & Lardner, LLP

Suite 13 00

One Independent Drive

Jacksonville, Florida 32202

Benjamin J. Grossman, Esq uire

Robert H. Hosay, Esq uire

Mallory Neumann, Esq uire

Foley & Lardner LLP

Sui te 900

106 East College Avenue

Tallahassee, Florida 32301

STATEMENT OF THE ISSUE

Whether Respondent Ós intended decision to award a contract

to Intervenor, Global Tel*Link Corporation (GTL) , for

telecommunication ser vices pursuant to an ÐINVITATION TO

NEGOTIATE FOR INMATE TELECOMMUNICATIONS SERVICES FDC ITN - 17 - 122Ñ

(the ITN), is contrary to RespondentÓs governing statutes, its

rules, or the ITN specifications; and, if so, whether it was

contrary to competition, clearl y erroneous, arbitrary, or

capricious.

PRELIMINARY STATEMENT

On November 2, 2016, the Florida Department of Corrections

(DOC) released the ITN seeking replies from vendors to provide

telecommunications services for inmates at all DOC institutions

and its a ssociated satellite facilities. Twenty - five months

later , on December 11, 2018, DOC posted its intent to award the

ITN contract to GTL.

On December 13, 2018, Securus Technologies, Inc. (Securus)

timely filed its Notice of Intent to Protest, and a protes t bond.

On January 7, 2019, DOC referred the matter to DOAH to assign an

ALJ to conduct Ðall proceedings required by law and to submit a

recommended order to the Department.Ñ On January 9, 2019, GTL,

the designated winner of the ITN, filed its Notice of

Intervention.

A telephonic conference was held on January 11, 2019, with

all participants represented. At the conclusion of the telephonic

conference, the parties were advised that the hearing would start

on January 31, 2019, and continue on February 1, 4 and 5, 2019.

Later that same day, Securus filed correspondence 2/ requesting

Ðthe final hearing be scheduled for February 4 and 5, with the

option of scheduling one or two additional hearing days.Ñ On

January 14, 2019, the Notice of Hearing was issued confirming the

final hearing would begin on January 31, 2019, and a separate

Order was issued denying SecurusÓ request for the hearing to start

on February 4, 2019.

On January 24, 2019, a Protective Order was issued based upon

a stipulated motion seeking protection for certain confidential

information.

Securus filed a motion seeking to amend its Petition on

January 25, 2019 . Both DOC and GTL filed responses in opposition

to this motion on January 28, 2019. On January 28, 2019, GTL also

filed a Motion see king to compel Securus to respond to GTLÓs

second set of production requests. Later , on January 29, 2019,

Securus filed a revised motion regarding its earlier motion

seeking to amend its Petition. After notice, a telephonic

conference was held on January 29, 2019, and an Order was issued

addressing all these motions.

On January 30, 2019, the parties filed a Joint Prehearing

Stipulation, and several additional motions were filed: Securus

filed a motion seeking to exclude its current contract with DOC;

GTL filed a motion requesting the dismissal of parts of SecurusÓ

Petition on the basis of a failure to state a legally cognizable

claim, and included an alternative motion to exclude certain

evidence and argument about specifications of the ITN; DOC filed a

motion pursuing the partial dismissal of SecurusÓ Petition; and

GTL filed a response opposing SecurusÓ motion. Prior to the start

of the hearing, Securus filed a notice that it did not stipulate

to certain joint exhibits identified in the Joint Preheari ng

Stipulation. All the motions were argued and denied prior to the

start of the hearing, which commenced on January 31, 2019. The

hearing continued to and was concluded on February 1, 2019. To

the extent that any of the stipulated facts found in the Jo int

Prehearing Stipulation are relevant to this action, they may be

found below.

The parties presented the following joint exhibits 3/ which

were admitted in evidence: 1, 5 through 21, and 23 through 59.

Securus presented th e testimony of Kasey Faulk and

Steve Viefhaus. 4/ SecurusÓ Exhibits 1 through 4, 6, 8 through 11,

and 15 through 25 were offered and received in evidence. DOC

called Carl Wesley Kirkland and Michael Harrell. 5/ DOCÓs Exhibits

1 through 9 were offered and received in evidence. GTL di d not

call any witnesses, but fully participated in examining the

witnesses called to testify. GTLÓs Exhibits 1, and 3 through 26,

32 and 33 were offered and received in evidence. GTLÓs Exhibit 34

was marked for identification, but was not admitted into the

record.

The three - volume Transcript 6 / o f the proceedings was filed

with DOAH on February 15, 2019 .

On February 20, 2019, Securus filed an amended motion to

determine that certain joint exhibits were not confidential,

proprietary, or a t rade s ecret. 7/ Securus presented that DOC

objected to the amended motion, but Securus had not received GTLÓs

response. GTL filed its response to this amended motion on

February 27, 2019, and also filed a motion to determine the

confidentiality of certain portions of i ts response. Securus then

filed an unopposed motion to determine the confidentiality of

portions of its proposed recommended order. Orders were issued

separately to address all these motions.

All parties timely filed proposed recommended orders, which

w ere carefully considered in the preparation of this Recommended

Order.

FINDING S OF FACT

Based upon the oral and documentary evidence presented at

hearing, the following facts are found:

1. DOC is the state agency responsible for the supervisory

and protec tive care, custody and control of all inmates

incarcerated by DOC, its buildings, ground s , and property in the

state. See § 945.025, Fl a. Stat. In carrying out this statutory

responsibility, DOC provides access to inmate telephone services.

2. DOC b e l i e v e s that inmate c onta c t with their family and

friends r e du ce s r e c id i vism b y e n c o u ra g i n g f a m i l y c onn e c t i ons a nd

pr e p a r e s in m a tes for their e v e n tual r e le a s e back into society .

DOC r e c ords a ll non - privil e g e d ca l l s in ord e r to pr e v e nt a nd

d e t e c t the c oordin a t i on of vio l e nt a nd/or ille g a l a c t i vi t y ov e r

the telephon e . Inmates may contact their family and friends by

using a prepaid card or calling collect.

3. The current rates for prepaid inmate calls are $0.04 per

minute for local calls and $0.14 per minute fo r intra - Local Access

Transport Area (LATA), inter - LATA and long distance calls. Under

the current system , there is no deposit or funding fee for each

call. The majority of inmates are not incarcerated in their home

community, thus approximately 75 percen t of current inmate calls

fall into the $0.14 per minute categories. Inmate calls are

limited to 15 minutes per call, however if there is no one waiting

to use the telephone, the inmate may call again. A 15 - minute

local call currently costs $0. 60 cents. A 15 - minute intra - LATA,

inter - LATA or long distance call currently costs $2.10.

4. Securus, through its wholly owned subsidiary T - Netix

Telecommunications Services, Inc., currently holds the contract to

provide DOC inmate telephone service. DOC does not provide or pay

for inmate telephone services, but is authorized pu rsuant to

section 945.215(1)(b), Florida Statutes, to contract with

telephone - service providers who install and maintain all the

necessary telephone equipment for this service.

5. On July 25, 2016, Ms. Faulk 8/ (DOCÓs b ureau chief of

p rocurement and lead negotiator) proposed a Ðjustification memoÑ

(memo) to DOCÓs c hief of s taff for the use of an ITN Ðfor the

purpose of competitively procuring Statewide Inmate

Telecommunication Services.Ñ T he stated purpose of the ITN was:

to solicit replies from fully capable and

qualified respondents, and to ultimately

establish a Contract, based on the ÐBest

ValueÑ, for quality tele - communication

services for inmates underÑ DOCÓs care and

custody.

The memo suggested that the ITN process provided flexibility that

would help DOC in Ðdetermining the service and programming options

available and the opportunity to understand the implications of

those services and proposed rates.Ñ Further, the use of an ITN

would allow DOC:

to discuss in detail, each respondentÓs

technical capabilities, professional

experience, and capability to provide quality

services in relation to the rates charged to

inmate friends and family members. The

negotiation phase . . . will provide a venue

for discussion of value - added services, and

will ensure the most qualified vendor is

selected.

6. Section 287.012(17), Florida Statutes, defines

ÐInvitation to negotiateÑ as:

[a] written or electronically posted

solicitation for compet itive sealed replies to

select one or more vendors with which to

commence negotiations for the procurement of

commodities or contractual services.

7. Section 287.057(1)(c) further explains an ITN as a type

of procurement method which allows an agency to Ðdetermine the

best method for achieving a specific goal or solving a particular

problemÑ and to identify Ðone or more responsive vendors with

which the agency may negotiate in order to receive the best

value. Ñ

8. On November 2, 2016, DOC released the I TN, seeking

competitive replies from qualified vendors to provide

telecommunications services for inmates at all DOC institutions,

and its associated satellite facilities. The ITN specifically

sought a no - cost contract, meaning DOC would not expend any St ate

funds for the services procured. Instead, the winning vendor

would charge an inmatesÓ family or friends on a per - minute basis

for an inmate to place each telephone call.

9. The original ITN timeline provided that the anticipated

posting of the inte nt to award the contract was in April 2017.

However, that original timeline was changed on December 22, 2016,

and revised another 16 times before the intent to award was

actually published. Revisions or changes (excluding solely

timeline revisions) to th e actual requirements of the ITN were

found in the following addenda 9/ : 1 , 3 , 5 , 6 , and 8.

10. The ITNÓs ÐStatement of PurposeÑ found in section 2.2

provides:

The Department is seeking responses, from

interested and qualified Vendors, for the

provision of telecommunication services for

inmates at all its institutions, and

associated satellite facilities, listed in

Attachment II. Vendors must have at least

three years, out of the last five years, of

business/corporate experience, specifically

providing t elecommunication services through

multiple sites in a correctional or other

security/ law enforcement setting, as described

in this ITN.

Specifically, the Department is seeking

replies for telecommunication services for all

its facilities. The Department intends to

award the resultant Contract to a single

Vendor, Statewide.

11. The ITNÓs ÐProcurement OverviewÑ found in section 2.3

provides:

The Department is requesting competitive,

sealed replies, from responsible Vendors, in

order to establish a multi - year Contract for

the provision of telecommunication services to

inmates in the DepartmentÓs care. The

Department is interested in considering value -

added services that would be beneficial to, or

will otherwise complement, the services

required by this I TN .

The process for evaluating and selecting a

Vendor will consist of two phases. The first

phase involves evaluation of the replies to

the ITN, which will result in the selection of

Vendors to proceed to the negotiation phase.

In the second phase, Vend ors will be asked to

provide a presentation of their Reply. This

phase also includes negotiation of a final

statement of work, pricing, and terms and

conditions of the final Contract. The

negotiation phase culminates in one or more of

the Vendors receivi ng a request, from the

Department, to submit a best and final offer

(BAFO), which must include: (1) a revised

statement of work; (2) a final Contract draft;

and (3) a final cost and compensation model.

(Emphasis added) .

12. The ITNÓs goals and specific goals are found in sections

2.4 and 2.4.1 , which provide:

2.4 FDC Goals

The Department is looking to not only continue

providing quality telephone services for

inmates in our care, at the minimum, levels of

service required by law and rule, but also to

a chieve strategic improvements in the area of

tele - communication services. Overall goals

for the Department include:

Û Reduce recidivism through increased

family re - unification and re - entry efforts.

Û Ensure the safety and security of staff,

inmates, and the public through the use of

modern technology.

Û Control inmate telephone usage and

limiting the use of the telephone service for

fraudulent activity.

Û Ensure a quality telephone service with

reasonable and justifiable telephone call rate

charges for inmateÓ s families and friends

similar to those available to the public at

large.

The intent of this procurement is to contract

with a Vendor who will assist the Department

in meeting these goals.

2.4.1 Specific Goals of this ITN :

• Establish a flexible contract, with

transparency of service costs and better

alignment of costs with services.

• Establish a contract that allows the

Vendor to bring market expertise and an

ability to shape strategy, to lower the cost

of telecommunication services for inmates

friends an d family, and maximize the benefits

to the Department .

• Ensure a smooth transition/continuation

of services from the current Contract to a new

Contract without disruption.

• Award to a Vendor that applies technical

and operational expertise to ensure a smoo th

continuatio n of services with minimal risk.

• Ensure pricing that is cost effective

through entire term of the Contract.

• Establish a collaborative relationship,

with the prospective Vendor, which will

maximize the extent to which the Department

can achi eve the objectives of this ITN.

( Emphasis added) .

13 . DOC mandated an initial five - year contract, with an

option for DOC to renew the contract up to five more years or any

portion ther eof. The additional five - year renewal period was

Ðcontingent, at a minimum, upon satisfactory performance by the

Vendor, as determined by the Department, and will be subject to

the availability of funds.Ñ 10/

14. The ITNÓs pricing methodology found at 2.7 provided:

The Department is seeking pricing that will

provide the most favorable terms the Vendor

can offer in terms of lowest phone rates to

the State [11] ; therefor, interested Vendors

must submit a Cost Reply, utilizing the Price

Information Sheet, Atta chment III. Best and

Final Offers from Vendors will be solicited to

establish the lowest possible telephone rates

and most beneficial value added services .

Vendors are encouraged to submit a Cost Reply

in such a manner as to offer the most cost

effective , and innovative solution for

services and resources, as cost efficiency for

the State will be a consideration in

determining best value. Vendors must provide

the Cost Reply in accordance with the

instructions in Section 4.8. (Emphasis added ) .

15. The d efinition for value added service (VAS) is found in

the ITN at section 1.29 as:

Advanced and/or additional services provided

to the Department that include new and

innovative technologies relating to the

telecommunication services sought, and at no

additio nal cost to the Department.

16. There is no definition for telecommunication services

found in the ITN.

17. DOC included a list of VASs in section 3.2 of the ITN.

That list included in pertinent part:

As part of this revenue generating Contract,

the Department is interested in obtaining

value - added services in lieu of commissions.

The Department requests that Vendors provide

with their Reply, a detailed description of

all value - added services the Vendor is

offering to the Department. These services

would be in addition to those services that

meet the minimum service requirements and

specifications of this ITN.

At no cost to the Department, for the duration

of the Contract term and any subsequent

renewals, the Department is especially

interested in t he following value - added

services; however, Vendors are encouraged to

provide additional or alternate value - added

services.

3.2.1 Handheld Cell Phone Detection Units

(CEIA or equivalent).

3.2.2 A fully functioning Cell Phone Forensic

Laboratory with th e following:

* * *

3.2.3 Access to ICER (Inmate Inter -

Communications Evaluation and Reporting)

national database for identifying and

reporting inmate - to - inmate communications.

3.2.4 Word spotting services through the

Vendors proposed inmate tel ephone system.

3.2.5 Voice Biometric Analysis through the

Vendors proposed inmate telephone system.

3.2.6 Vendor - provided call monitoring.

3.2.7 A Managed Access System (MAS), in an

effort to control and eliminate wireless

communications within our i nstitutions.

Vendors are encouraged to include a single

facility, multi - facility or statewide solution

that will prevent unwanted or unauthorized

access to commercial wireless networks while

simultaneously enabling legitimate, mission -

critical, or emergen cy connections. Any

Managed Access Solution being proposed by the

Vendor shall be inclusive of all equipment,

installation, infrastructure and network,

training, operation, and ongoing repairs and

maintenance.

18. Change number 3 found in the ITNÓs Adde ndum 5, posted on

February 23, 2017, provided revisions to section 3.2, the VASs

section. T he changes are shown via strike - through for the deleted

language, and underscored for the new language:

As part of this revenue generating Contract,

the Department is interested in obtaining

value - added services in lieu of commissions.

The Department requests that Vendors provide

with their Reply, a detailed description of

all value - added services the Vendor is

offering to the Department. These services

would be in addition to those services that

meet the minimum service requirements and

specifications of this ITN ; at no cost to the

Department, for the duration of the Contract

term and any subsequent renewals, The

Department is especially interested in the

following value - added services; however,

reviewing Vendor proposed value - added services

or technology to aid in the prevention and

detection of cellular devices, peripheral

hardware and hazardous contraband at entry

points and within the secure perimeter of our

cor rectional institutions. Vendors are

encouraged to provide additional or alternate

value - added services , beyond what is included

in this Section. While value - added services

are considered in the evaluation (see Section

4.9 of this ITN), Vendors are not re quired to

propose a particular value - added service or

group of services to be considered.

19. Change number 4 found in the ITNÓs Addendum 5, posted on

February 23, 2017, provided revisions to section 3.2.7. T he

changes are shown via strike - through for t he deleted language, and

underscored for the new language:

A Managed Access System (MAS), in an effort to

control and eliminate wireless communications

within our institutions. Vendors are

encouraged to include a single facility,

multi - facility or statewi de solution that will

prevent unwanted or unauthorized access to

commercial wireless networks while

simultaneously enabling legitimate, mission -

critical, or emergency connections. Any

Managed Access Solution being proposed by the

Vendor shall be inclusive of all equipment,

installation, infrastructure and network,

training, operation, and ongoing repairs and

maintenance. Vendors are not required to

provide a MAS as part of their solution;

however, if a Vendor chooses to include a MAS

in their Reply, the Department is interested

in the MAS meeting the below minimum

requirements:

3.2.7.1 Locations

* * *

3.2.7.2. Implementation

* * *

3.2.7.3 System Requirements

* * *

3.2.7.4 Vendor Responsibilities

* * *

3.2.7.5 Departmen t Responsibilities

* * *

3.2.7.6 System Maintenance

* * *

3.2.7.7 Reporting

* * *

3.2.7.8 Support

20. The ITN process to select qualified vendors consisted of

two distinct parts: Part 1 and Part 2.

21. Part 1 required vendor s to submit a Ðstraightforward,

concise delineation of the VendorÓs capabilities to satisfy the

requirementsÑ of the ITN. Eight specific components were

described, and the evaluation criteria were provided. However,

the actual components need not be revi ewed here, as section 4.9.C

provided the Ðscore from the Evaluation Phase will not carry over

into negotiations and the Negotiation Team will not be bound by

those scores.Ñ

22. CenturyLink, GTL, and Securus are providers of

telecommunications services for inmates, and each timely submitted

the ÐTechnical Reply and Cost RepliesÑ for Part 1 of the ITN. It

is well settled and uncontested that Securus scored the highest in

Part 1, followed by GTL and CenturyLink.

23. Part 2 allowed DOC to select one or more qualified

vendors for the negotiation phase. DOC invited all three vendors

to negotiate. The negotiation team (Team) included three DOC

employees: Ms. Faulk, Mr. Kirkland 12/ (DOCÓs d eputy d irector of

Institutional Operations), and Mr. Harrell 13/ (D OCÓs b ureau c hief

of Security Operations).

24. Section 4.9 B. in the ITN set forth the following

ÐNegotiation Phase MethodologyÑ:

The Department reserves the right to negotiate

with any or all responsive and responsible

Vendors, serially or concurrent ly, to

determine the best solution.

During the negotiation process the Department

reserves the right to exercise the following

rights. This list is not exhaustive.

1. Schedule additional negotiating sessions

with any or all responsive Vendors.

2. Req uire any or all responsive Vendors to

provide additional revised or final written

Replies addressing specified topics.

3. Require any or all responsive Vendors to

provide a written Best and Final Offer

(BAFO).

4. Require any or all responsive Vendors to

address services, prices, or conditions

offered by any other Vendor.

5. Pursue a contract with one or more

responsive Vendors for the services

encompassed by this solicitation, any addenda

thereto, and any request for additional

revised or final writt en Replies or request

for best and final offers.

6. Pursue the division of contracts between

responsive Vendors by type of service or

geographic area, or both.

7. Arrive at an agreement with any responsive

Vendor, finalize principal Contract terms with

such Vendor and terminate negotiations with

any or all other Vendors, regardless of the

status of or scheduled negotiations with such

other Vendors.

8. Decline to conduct further negotiations

with any Vendor.

9. Reopen negotiations with any Vendor.

1 0. Take any additional administrative steps

deemed necessary in determining the final

award, including additional fact - finding,

evaluation, or negotiation where necessary

and consistent with the terms of this

solicitation.

11. Review and rely on relevan t information

contained in the Replies received from

Vendors.

12. Review and rely on relevant portions of

the evaluations conducted.

13. Reject any and all Replies if the

Department determines such action is in the

best interest of the State.

14. N egotiate concurrently or separately with

competing Vendors.

15. Accept portions of a competing VendorÓs

Reply and merge such portions into one

project, including contracting with the

entities offering such portions.

16. Waive minor irregularities in Re plies.

17. Utilize subject matter experts, subject

matter advisors, and multi - agency advisors to

assist the negotiation team.

The ITN provided that DOC had Ðsole discretion in deciding whether

and when to take any ofÑ these actions. This methodology se ction

included that the focus of the negotiations would be on Ðachieving

the solution thatÑ provided Ðthe best value to the State based

upon the ÒSelection CriteriaÓ and satisfies the DepartmentÓs

primary goals as identified in the ITN.Ñ

25. Section 4.9 B. also included the Selection Criteria as:

1. The RespondentÓs articulation of its

approach to provide the services.

2. The innovativeness of RespondentÓs

approach to provide the services.

3. RespondentÓs articulation of its solution

and the ability of the solution to meet the

requirements of this ITN and provide

additional innovations.

4. RespondentÓs demonstrated ability to

effectively provide the services.

5. RespondentÓs experience in providing the

services being procured and the skills of

pr oposed staff relative to the proposed

approach and offering.

6. RespondentÓs technical Reply and Cost

Replies as they relate to satisfying the

primary goals of the telecommunicati on

services identified herein.

26. Change number 2 found in the ITNÓs A ddendum 8 posted on

June 13, 2017, provided revisions to section 4.8.A (2) , the

description of offering section. The changes provided the number

of points allocated for each section in the Part 1 evaluation

phase. H owever, paragraph Ð4.8.A.2. ( c)Ñ provide d a further break -

down of the overall points allocated to the ÐVendorÓs proposed

value - added servicesÑ and provided important information for the

negotiation phase. The pertinent changes are shown via underscore

for the new language:

c) To what extent d o the VendorÓs proposed

value - added services maximize the benefits to

the Department? ( Worth 21 weighted points,

allocated below)

a. Cell phone detection equipment and phone

system surveillance services, including those

listed in Sections 3.2.1, 3.2.4, and 3.2.5.

(4 points)

b. Cell phone forensics and intelligence,

including those listed in Sections 3.2.2 and

3.2.3. (4 points)

c. Managed Access Systems described in

Section 3.2.7. (4 points)

d. Vendor - provided phone call monitoring

services refere nced in Section 3.2.6.

(4 points)

e. Any other Vendor proposed value - added

services or technology to aid in the

prevention and detection of cellular devices,

peripheral hardware and hazardous contraband

at entry points and within the secure

perimeter of our correctional institutions.

(5 points)

In the negotiation phase of this procurement,

the Department reserves the right to negotiate

for these or other value - added services

identified through the negotiation process.

Further, the Department is not bo und to the

point allocation or prioritization included in

this section when determining the best value

to the Department.

27. Securus did not file a protest when Addendum 8 was

posted.

28. In the later part of November 2017, roughly a year after

postin g the ITN, DOCÓs Team began conducting negotiation meetings

with each vendor separately. Over the course of the next several

months, t he T e a m h e ld a t o t a l of 20 n e g o ti a t i on s e s si o n s:

6 s e ss i o n s w it h C e n t u r yL i n k; a nd 7 s e ss i o n s eac h w it h G T L a nd

S ec urus. I n a d diti o n , t he T e a m h e l d 24 s t ra t e g y s e s si o n s whe r e

t h e y dis c u s s e d p ot e n t i a l n e g o ti a ti on st ra t e g i e s, t he v e n d orsÓ

o f f e r i n g s, a nd o pti o n s for a c h i e v i n g t he b e st v a l ue t o t he S t a t e .

29. DOC used a negotiating strategy that ÐflippedÑ SecurusÓ

negotiatin g strategy. Instead of starting the negotiations with

the low cost telephone rate charges and securing the VASs through

the money collected in that manner, DOC elected to use a higher

telephone rate charge to seek more VASs. Ms. Faulk explained this

tact ic as similar to how a car company operates. Instead of

starting with a base price and adding specific features one at a

time, a car company bundles added features, and a consumer has to

take the bundle just to get the individual features they want.

30. In SecurusÓ first negotiation meeting with DOC,

Ms. Faulk informed Securus that DOC was:

fairly comfortable with the base phone system

. . . they are fairly solid system platforms.

So the main focus will be on the value added

services, as IÓm sure you a ll expected it to

be.

Ms. Faulk made clear that the negotiations Ðas a whole are

intended to be a two - way street.Ñ Although Ms. Faulk advised

Securus that DOC would not be ÐdictatingÑ what was in SecurusÓ

best and final offer (BAFO) to DOC, DOC was prov iding Securus Ðan

opportunity to understand whatÓs important toÑ DOC.

31. During the negotiation meetings, Ms. Faulk also stated

that DOC was looking for:

the solutions that we [DOC] can deploy and hit

the biggest, the most number of institutions

and kind of spread our buck or your [vendorÓs]

buck essentially the furthest that we can.

Because, you know, we have funding struggles

like any other public entity. And so, we want

to utilize [the ITN process] in the best way

we can.

Ms. Faulk provided that DOC was trying to find a Ðsweet spot,Ñ a

call rate that was ÐreasonableÑ for inmatesÓ family and friends

that also provided the VAS that DOC wanted.

32. The ITN was a Ðrevenue - generating contractÑ for the

vendor to provide DOC with VASs Ðin lieu of commissio ns.Ñ See

ITN, sect ion 3.2 Value - Added Services. However that changed

during the negotiation phase. During the third or fourth

negotiating session, Ða change to the terms laid out in the ITNÑ

was provided. DOC coveted a $5 million commission paid on a

y early basis. Ms. Faulk testified that the reasons for this

change dealt with the need to fill a revenue gap created when a

different DOC contract expired. According to Ms. Faulk, DOC

Ðwanted to ensure that we [DOC] did not reduce our [DOC]

contribution t o the general revenue.Ñ All proceeds from telephone

commissions are deposited into the StateÓs General Revenue Fund.

See § 945.215 (1)(b), Fla. Stat. Ms. Faulk further testified that

the ITN was structured to allow for negotiation, and DOC was, at

that p oint, Ðnegotiating terms and conditions.Ñ

33. DOC reviewed available telephone industry pricing for

other state correctional departments (including FloridaÓs current

provider) and found rates vary from a low of $0.04 (DOC) for local

per minute calls to $ 0.13 (Georgia Department of Corrections,

GDOC) for local per minute calls ; and from a low of $0.06 (Texas

Department of Corrections, TDOC) for an interstate per minute call

to $0.25 (California Department of Corrections, CDOC) for an

interstate per minute call. The other states also included a

funding fee or account set up fee ranging from CDOCÓs $3.00 (for a

one - time set up fee) and $0.99 for each ÐAdvanced Pay One Call , Ñ

up to TDOCÓs $5.95 to fund prepaid accounts , plus $2.00 per

collect call. No direct comparison can be made from these other

states as there are too many variables in play.

34. The Federal Communications Commission (FCC) recently

conducted a study that determined a Ðreasonable rateÑ to charge

inmates for telephone usage was $0.21 per min ute.

35. During the negotiation stage, Securus suggested to DOC

that it provide a specific fixed per - minute rate , as well as

include a deposit fee, in an effort to level the playing field for

all competing vendors. Further, Securus explored the multipl e

VASs options that DOC discussed during the negotiation sessions.

36. On April 23, 2018, following completion of the multiple

negotiation sessions with all the vendors, DOC issued a Request

for Best and Final Offers (RBAFO) pursuant to section 4.9 of the

ITN. The RBAFO directions had a specific reference to VASs. It

provided:

Value - added Services to include any additional

ideas for improvement or cost reduction,

additional commodities or additional services,

which the Vendor will provide to the

Departme nt at no additional cost(s). These

should be thoroughly detailed including an

exact quantity, proposed implementation

schedule, and maintenance, as applicable.

37. The RBAFO also provided specific directions on the

format for the BAFO response and requi red that detailed

information be provided on a revised price information sheet

(RPIS). The RPIS included:

The Vendor shall provide their proposed

monthly commission rates per the stated per

minute rate and deposit fee. Value - added

services should be inc luded on a separate

sheet, along with any price assumptions.

Please note, these rates are the only fees to

be charged to inmate friends and family and

shall include any surcharges and connection

fees.

The RPIS also required the initial term and renewal te rm be

stated. The RPIS also supplied: the per minute telephone rate

for all calls at $0.135; the deposit fee of $0.99 14/ ; and a monthly

commission rate of Ð$__________.Ñ The RPIS then again instructed

that ÐThe Vendor should include all Value - added Serv ices on a

separate sheet.Ñ The form also contained the appropriate lines

for the date, Federal Identification Number, the vendorÓs name,

the vendorÓs printed authorized representativeÓs name and his/her

signature.

38. On May 30, 2018, Securus, GTL, and C enturyLink submitted

their BAFOs. GTL and CenturyLink each submitted one BAFO, while

Securus initially submitted four BAFOs. The Team requested

clarification from the vendors, and additional responses were

submitted on June 25, 2018. GTL and CenturyLink each revised or

submitted one BAFO, while Securus submitted an additional three

BAFOs. Securus provided multiple scenarios as to how it could

best accomplish DOCÓs goals, using different telephone rates.

39. GTLÓs BAFO provided the required call rate, d eposit fee,

monthly commission, and VAS within the five - year initial contract

period.

40. Option 5 of SecurusÓ BAFOs, which was closest to the GTL

BAFO, provided the required call rate, deposit fee, monthly

commission, and VAS, but delivery was over a 10 - year period as

opposed to the five - year initial contract.

41. The Team held a final meeting on November 21, 2018, to

discuss the various BAFO proposals. Ultimately, the Team

recommended GTL for the contract award. The TeamÓs recommendation

memorandum p rovided the Team Ðfelt that both Securus and GTL

offered similar core inmate telecommunication services to inmates

and the Department with a robust management system.Ñ

42. The difference, and the basis for the TeamÓs

recommendation to award the contract to GTL, was grounded on GTLÓs

Ðoffered commission rates and value - added services that would be

implemented throughout the course of a five (5) - year initial

contract termÑ as opposed to SecurusÓ proposal Ðover a 10 - year

initial contract term.Ñ The remaini ng six options by Securus,

offered the Ðfive (5) - year contract term, [but] provided lower

commission rates and less value - added servicesÑ to DOC.

43. On December 11, 2018, DOC posted its Notice of Intent to

Award the contract to GTL. Securus timely prote sted DOCÓs

selection of GTL.

44. SecurusÓ protest focused on what it perceived to be VASs

that were not related to inmate telecommunications services,

specifically: hand - held walkie - talkies; a biometric entry/exit

system for inmates, staff and visitors ; and a radio frequency

identification system (RFID). Securus failed to appreciate DOCÓs

stated goal: ÐEnsure the safety and security of staff, inmates

and the public through the use of modern technology.Ñ Each of

these VASs falls within that goal.

45. DOC maintained its goal of Ðreasonable and justifiable

telephone call rates.Ñ DOC failed to maintain its specific goal

for establishing a contract that lowered, not raised, the cost of

telecommunication services for inmatesÓ friends and family, but

held fast to maximizing the benefits to DOC. Although contrary to

the goal, DOC placed all vendors on notice of its intention to

seek the desired VASs in relation to the telecommunication

services.

CONCLUSIONS OF LAW

46. DOAH has jurisdiction over the subject matter and the

parties to this competitive procurement protest pursuant to

sections 120.569, 120.57(1), and 120.57(3).

47. Following negotiations, GTL was the announced recipient

of the contract for the inmate telecommunications services

contract, with Securus coming in second. Under the traditional

standing test in Agrico Chemical Co. v. Dep artment of

Env ironmen t a l Reg ulations , 406 So. 2d 478, 479 (Fla. 2d DCA 1981),

Securus was Ðadversely affectedÑ by DOCÓs allegedly wrongful award

of this contract t o GTL.

48. Securus challenges DOCÓs intent to award the contract to

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

this matter rests with Securus as the party protesting the

proposed agency action. Section 120.57(3)(f) further provides

that in a competitive procurement protest:

[T]he administrative law 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 solicitati on

specifications. The standard of proof for

such proceedings shall be whether the proposed

agency action was clearly erroneous, contrary

to competition, arbitrary, or capricious.

49. The phrase Ðde novo proceedingÑ describes a form of

intra - agency revi ew. The purpose of the ALJÓs review is to

Ðevaluate the action taken by the agency.Ñ J.D. v. Fla. DepÓt of

Child. & Fams. , 114 So. 3d 1127, 1132 (Fla. 1st DCA 2013); and

State Contr. v. Dep Ó t of Transp. , 709 So. 2d 607, 609 (Fla. 1st

DCA 1998). A de nov o proceeding Ðsimply means that there was an

evidentiary hearing . . . for administrative review purposesÑ and

does not mean that the ALJ Ðsits as a substitute for the [agency]

and makes a determination whether to award the bid de novo .Ñ J.D.

v Fla. Dep Ót of Child. & Fams. , 114 So. 3d at 1133;

Intercontinental Props., Inc. v. DepÓt of HRS , 606 So. 2d 380, 386

(Fla. 3d DCA 1992).

50. The Ðgoverning statuteÑ for DOCÓs use of an invitation

to negotiate process to procure contractual services is found in

section 287.057(1)(c), which provides:

[T]he agency shall evaluate replies against

all evaluation criteria set forth in the

invitation to negotiate in order to establish

a competitive range of replies reasonably

susceptible of award. The agency may select

one or more vendors within the competitive

range with which to commence negotiations.

After negotiations are conducted, the agency

shall award the contract to the responsible

and responsive vendor that the agency

determines will provide the best value to the

state, based on the selection criteria.

51. Securus must prove, as the party protesting DOCÓs

intended award, by a preponderance of the evidence, that DOCÓs

proposed action is either: (a) contrary to its governing

statutes; (b) contrary to its ru les or policies; or (c) contrary

to the specifications of the ITN.

52. The standard of proof Securus must meet to establish

that the award to GTL violates this statutory standard of conduct

is whether DOCÓs decision was: (a) clearly erroneous;

(b) contr ary to competition; or (c) arbitrary or capricious.

§§ 120.57(3)(f) and 120.57(1)(j) Fla . Stat. ; and AT&T Corp. v.

State, Dep't of Mgmt. Servs. , 201 So. 3d 852, 854 (Fla. 1st DCA

2016).

53. The Ðclearly erroneousÑ standard has been defined to

mean Ðthe interpretation will be upheld if the agencyÓs

construction falls within the permissible range of

interpretations.Ñ Colbert v. DepÓt of Health , 890 So. 2d 1165,

1166 (Fla. 1st DCA 2004); see also Holland v. Gross , 89 So. 2d

255, 258 (Fla. 1956)(when a find ing of fact by the trial court Ðis

without support of any substantial evidence, is clearly against

the weight of the evidence or . . . the trial court has misapplied

the law to the established facts, then the decision is Òclearly

erroneous.ÓÑ).

54. An age ncy action is Ðcontrary to competitionÑ if it

unreasonably interferes with the purpose of competitive

p rocurement. As described in Wester v. Belote , 138 So. 721, 722

(Fla. 1931):

The object and purpose [of the bidding

process] . . . is to protect the pub lic

against collusive contracts; to secure

fair competition upon equal terms to all

bidders; to remove not only collusion but

temptation for collusion and opportunity for

gain at public expense; to close all avenues

to favoritism and fraud in its various

forms; to secure the best values . . . at the

lowest possible expense; and to afford an

equal advantage to all desiring to do business

. . . , by affording an opportunity for an

exact comparison of bids.

In other words, the Ðcontrary to competitionÑ test forbids agency

actions that: (a) create the appearance and opportu nity for

favoritism; (b) reduce public confidence that contracts are

awarded equita bly and economically; (c) cause the procurement

process to be genuinely unfair or unreasonably exclusive; or

(d) are abuses, i.e., dishonest, fraudulent, illegal, or

unethical. See § 287.001, Fla. Stat.; and Harry Pepper & Assoc.,

Inc. v. City of Cape Coral , 352 So. 2d 1190, 1192 (Fla. 2d DCA

1977).

55. An ÐarbitraryÑ decision is one that is Ðnot supported by

facts or logic, or is despotic.Ñ Agrico Chemical Co. v. DepÓt of

Envtl. Reg. , 365 So. 2d 759, 763 (Fla. 1st DCA 1978), cert.

denied , 376 So. 2d 74 (Fla. 1979). A ÐcapriciousÑ action is one

which is Ðtaken without thought or reason or irrationally.Ñ Id.

56. To determine whether an agency acted in an Ðarbitrary,

or capriciousÑ manner involves consideration of Ðwhether the

agency: (1) has considered all relevant factors; (2) given

actual, good faith consideration to the factors; and (3) has used

reaso n rather than whim to progress from consideration of these

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

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

standard has also been formulated by the court in Dravo Basic

Materials C o. v. DepÓt of Transp. , 602 So. 2d 632, 632 n.3 (Fla.

2d DCA 1992), as follows: ÐIf an administrative decision is

justifiable under any analysis that a reasonable person would use

to reach a decision of similar importance, it would seem that the

decision is neither arbitrary nor capricious .Ñ

57. Section 287. 012(4) defines Ðbest valueÑ as:

T he highest overall value to the state based

on factors that include, but are not limited

to, price, quality, design, and workmanship.

58. Turning to the merits of S ecurusÓ protest, the evidence

at the final hearing conclusively establishes the following facts:

• The ITN put Securus on notice of DOCÓs goals, specific

goals and the requirements for submission of a BAFO.

• The multiple addend a addressed questions, concer ns ,

timelines , and changes for the conclusion of the process.

• Securus participated in multiple negotiation sessions,

and made suggestions to DOC for a standardized telephone rate

charge, plus a deposit fee.

• Securus participated in multiple negotiation s essions

where DOC explained and discussed VASs that it wanted as part of

the ITN.

• Securus was aware of the initial contract term, with the

option for an additional five year renewal term.

• Securus responded to DOCÓs ITN, not once, but utilizing

seven differ ent approaches.

59. In light of these factual findings, the central issue in

this matter turns on whether DOCÓs decision to award the contract

to GTL was based on a process that was clearly erroneous, contrary

to competition, arbitrary, or capricious. If Securus demonstrates

that DOC should not have awarded the contract to GTL, then DOCÓs

failure to contract with Securus (the next eligible vendor) would

be contrary to its governing statutes (§ 287.057 , Fla. Stat. ) and

the ITN specifications.

60. To pro cure contractual services through an invitation to

negotiation, section 287.057(16)(a) required the Department to

appoint:

At least three persons to conduct negotiations

during a competitive sealed reply procurement

who collectively have experience and kn owledge

in negotiating contracts, contract

procurement, and the program areas and service

requirements for which commodities or

contractual services are sought.

61. The evidence in the record establishes that the persons

DOC assigned to the Team Ðcollect ivelyÑ had the requisite

experience and knowledge to conduct negotiations for the inmate

telecommunications services. Based on the testimony, Ms. Faulk

Mr. Kirkland, and Mr. Harrell each demonstrated their proficiency

in contract procurement through their previous and current work

responsibilities. Ms. Faulk is qualified to be the lead

negotiator. DOC established that the Team ÐcollectivelyÑ had the

required experience and knowledge to negotiate and make the

recommendation.

62. The undersigned conclude s that DOCÓs decision to award

the contract to GTL is not clearly erroneous, contrary to

competition, or arbitrary or capricious. DOC did not act in an

arbitrary or capricious manner. All vendors were provided a fair

and equal opportunity to compete for the contract award. DOC

concluded that except for the difference in the vendorsÓ base

contract terms, both Securus and GTL seemingly presented very

comparable and competitive offers to DOC. That Securus was out -

negotiated is not a basis upon which a lega l challenge may be

sustained. The ITN process inherently relies upon and

necessitates vendor competition, in terms of both pricing and

negotiation strategy. Securus failed to show any credible or

reliable evidence that DOCÓs violated its governing statut es,

rules, or policies in awarding GTL the contract.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department of Corrections enter a

final order dismissing the protest by Securus . It is further

r ecommended that the Department of Corrections award the contract

under Invitation to Negotiate , ITN - 17 - 122, to GTL .

DONE AND ENTERED this 2 5 th day of March , 2019 , in

Tallahassee, Leon County, Florida.

S

LYNNE A. QUIMBY - P ENNOCK

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 Administr ative Hearings

this 2 5 th day of March , 2019 .

ENDNOTE S

1/ All references to the Florida Statutes are to the 2018

codification unless otherwise indicated.

2/ Securus failed to comply with Florida Administrative Code Rule

28 - 106.204(3).

3/ The fail ure of all parties to utilize each otherÓs exhibits

wasted resources and caused the undersigned to review , or begin to

review , the same documents, only in different exhibit books.

4/ Ms. Faulk was listed as a witness for all three participants.

Mr. Vi efhaus was listed as a witness for Securus and GTL. Counsel

for all parties were given wide latitude to exten sively examine

each witness.

5/ Mr. Kirkland and Mr. Harrell were each listed as a witness for

all three participants.

6/ The third volume i ncluded a sealed envelope for the

confidential portion (inclusive of pages 349 Î 365) of the

hearing.

7/ Prior to filing the a mended m otion, a Motion for Order

Determining Certain Joint Exhibits Not to Be Confidential,

Proprietary, or Trade Secret was filed.

8/ Ms. Faulk has worked in procurement for 14 years. She is a

Florida Certified Contract Manager, a Florida Certified Contract

Negotiator, and a Project Management Professional. Ms. Faulk has

also overseen approximately 18 ITNs while working w ith DOC, and

has participated in over 150 state procurements during her career.

9/ Addendum 001, posted on December 22, 2017, revised the time

line, and deleted a specific paragraph in section 4.9.

Addendum 002, posted on January 9, 2017, purports to contain

DOCÓs Ðwritten responses to written inquiries, a revised timeline,

and other revisions to requirements in the ITN document.Ñ The

undersigned only found a revision to the timeline.

Addendum 003, posted on January 17, 2017, provided DOCÓs

Ðwritten responses to VendorÓs written inquiries, as well as,

revisions made to requirements of ITN.Ñ Specific chan ges were

made to sections 3.6.4, 3.6.4.1 , 3.6.5 , 4.9(A) , and Ðthe call

data, by month for the last 12 months.Ñ Forty questio ns were also

addressed.

Revisions found in addendum 005, posted on February 23, 2017,

will be provided in detail and found at paragraphs 18 and 19 of

this Order.

Addendum 006, dated May 18, 2017, provided DOCÓs Ðanswers to

the second round of written questions receivedÑ and added Ðnew

language to the ITN.Ñ Specific changes were made to section

4.8.A (2) (which was changed again in addendum 008); a new

attachment XI, regarding the non - disclosure agreement for

restricted information; and answers to 33 questions.

Revisions f ound in addendum 008, posted on June 13, 2017,

will be provided in detail and found at paragraph 26 of this

Order.

Addenda 4, 7, 9, 10, 11, 12, 13, 14, 15, 16, and 17

specifically revise the ITN timeline.

10/ The phrase Ðsubject to the availability o f fundsÑ is somewhat

misleading as it appears that a contract renewal is subject to

some form of remuneration from the state, which is not the case.

11/ The phrase Ðin terms of lowest phone rates to the StateÑ ; is

misleading, at best, because this is a Ðrevenue generating ContractÑ

for the vendors to supply value added services. The ITN

specifically states ÐAt no cost to the Department.Ñ

12/ Mr. Kirkland began his 28 - year career with DOC as a correctional

officer and has been promoted through variou s security - related

positions. As the d eputy d ire ctor of Institution Operations,

Mr. Kirkland oversees the Bureau of Security Operations, the Prison

Rape Elimination Act Compliance Office, the Emergency Management

Special Teams, and the Radio Communication s Office. Mr. Kirkland

was on the Team and participated in all the negotiations and DOC

strategy sessions.

13/ Mr. Harrell started his 26 - year career as a correctional

office r , and worked his way through the ranks to colonel. He also

served as an assi stant bureau chief of security Operations, and is

its current b ureau chief. Mr. Harrell was on the Team and

participated in the negotiations and the DOC strategy sessions

14/ At these rates, all family and friends will pay $3.015

($0.135 x 15, plus $ 0.99) for a 15 - minute call. While that may

seem to be a trivial amount to some, inmate calls to family and

friends may be less frequent .

COPIES FURNISHED:

Kristen Krueger Clemons, Esquire

Department of Corrections

501 South Calhoun Street

Tallahassee, Florida 32399

(eServed)

William Robert Vezina, III, Esquire

Vezina, Lawrence and Piscitelli, P.A.

413 East Park Avenue

Tallahassee, Florida 32301

(eServed)

Andrew Rubin Fier, Esquire

Vezina, Lawrence, & Piscitelli

413 East Park Avenue

Tallahassee, Flor ida 32301

(eServed)

Megan S. Reynolds, Esquire

Vezina Lawrence & Piscitelli, P.A.

413 East Park Avenue

Tallahassee, Florida 32301

(eServed)

William D. Hall, Esquire

Dean Mead

Suite 130

215 South Monroe Street

Tallahassee, Florida 32301

(eServed)

Dan iel Ryan Russell, Esquire

Dean Mead

Post Office Box 351

Tallahassee, Florida 32302

(eServed)

John A. Tucker, Esquire

Foley & Lardner, LLP

Suite 1300

One Independent Drive

Jacksonville, Florida 32202

(eServed)

Robert H. Hosay, Esquire

Foley & Lardner LL P

Suite 900

106 East College Avenue

Tallahassee, Florida 32301

(eServed)

Mallory Neumann, Esquire

Foley & Lardner LLP

106 East College Avenue

Tallahassee, Florida 32301

(eServed)

Benjamin J. Grossman, Esquire

Foley & Lardner LLP

Suite 900

106 East Coll ege Avenue

Tallahassee, Florida 32301

(eServed)

Nicholas John Peter Meros, Esquire

Foley & Lardner

Suite 900

106 East College Avenue

Tallahassee, Florida 32301

(eServed)

Mark S. Inch, Secretary

Department of Corrections

501 South Calhoun Street

Talla hassee, Florida 32399 - 2500

Kenneth S. Steely, General Counsel

Department of Corrections

501 South Calhoun Street

Tallahassee, Florida 32399 - 2500

(eServed)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions wit hin

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.