19-000754BID Social Sentinel, Inc. vs. State Of Florida, Department Of Education Status: Closed Recommended Order on Wednesday, April 17, 2019.

Summary: DOE's failure to meet statutory deadline for procurement of social media monitoring tool does not constitute illegality so as to require setting aside of its reject-all decision.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SOCIAL SENTINEL, INC. ,

Petitioner,

vs.

STATE OF FLORIDA, DEPARTMENT OF

EDUCATION , Case No. 19 - 0754BID

Respondent ,

and

ABACODE, LLC ; and ZEROFOX,

INC.,

Intervenors.

_______________________________/

RECOMMENDED ORDER

On March 7, 2019 , Robert E. Meale, Administrative Law Judge

of the Division of Administrative Hearings (DOAH), conducted the

final hearing in Tallahassee, Florida.

APPEARANCES

For Petitioner: Thomas P. Crapps, Esquire

Kirsten H. Mathis, Esquire

Joy Ryan, Esquire

Meenan, P.A.

300 South Duval, Suite 4 1 0

Tallahassee, Florida 32301

For Respondent : Jason D. Borntreger, Esquire

James L. Richmond, Esquire

Department of Education

325 West Gaines Street, Suite 1244

Tallahassee, Florida 32399 - 0400

For Intervenors: J. Riley Davis, Esquire

Akerman, LLP

106 East College Aven ue, Suite 1200

Tallahassee, Florida 32301

STATEMENT OF THE ISSUE

The issue is whether Respondent 's decision to reject all

replies to Invitation to Negotiate 2019 - 44, Social Media

Monitoring (ITN) , is arbitrary or illegal , within the meaning of

section 120.57(3)(f), Florida Statutes .

PRELIMINARY STATEMENT

By ITN issued on August 3, 2018, Respondent solicited

replies to negotiate the procurement of a web - based s ocial media

monitoring tool (Monitoring Tool) to examine social media posts

to enhance school safety . On December 10, 2018, Respondent

issued an Intent to Award to Intervenor Abacode, LLC (Abacode).

On December 13, 2018, Petitioner filed a Notice of Protest,

and, on December 21, 2018, Petitioner filed a Formal Written

Protest and Petition for Administrative Hearing, as well as a

bond. On January 3, 2019, Respondent issued an Amended Agency

Decision t o reject all replies.

On January 7, 2019, Petitioner issued a Second Notice of

Protest, and, on January 16, 2019, Petitioner filed a Formal

Written Protest and a Petition for Administrative Hearing

(Petition).

The Petition alleges that Respondent's rejec tion of all

replies is contrary to a statutory deadline of December 1, 2018,

for making the Monitoring Tool available for use by school

districts, and Respondent should instead award the contract to

Petitioner. The Petition alleges that Respondent's rejec tion of

Petitioner's reply is arbitrary due to the absence of a stated

logical reason for the rejection and illegal because it is

contrary to the purpo se of a competitive procurement. As to the

latter point, the Petition alleges that , by proposing an awar d

and then rejecting all replies, Respondent allowed the replies to

become public record, so that other vendors could examine the

previously confidential replies of their competitors. The

Petition requests a recommended order directing Respondent to

a wa rd the contract to Petitioner.

In the Pre - h earing S tipulation filed on March 5, 2019 ,

Petitioner clarified the Petition. First, Petitioner sought

alternative relief to an awar d of the contract to Petitioner: a

reopening of the procurement to allow the eight vendors to submit

replies to the ITN, as revised by Respondent in the manner set

forth below , and a rescoring of the new replies.

Second, a lthough Petitioner continued to allege that

Respondent's reject - all decision is arbitrary and illegal,

Petitioner revised its bases for these grounds. Petitioner

claimed that the reject - all decision is arbitrary because

Respondent failed to meet the December 1 statutory deadline;

Respondent failed to state a reason for t he reject - all decision;

and Respondent tardily made the reject - all decision following an

award decision, so that the replies of Petitioner and other

vendors became nonexempt public record s , thus undermining the

integrity of the competitive procurement. Pe t itioner claimed

that the reject - all decision is illegal because Respondent failed

to meet the December 1 statutory deadline and Respondent tardily

made the reject - all decision following an award decision, so that

the replies of Petitioner and other vendor s became nonexempt

public record s, thus undermining the integrity of the competitive

procurement.

Respondent transmitted the file to DOAH on February 14,

2019. A Motion to Intervene was filed February 25, 2019, by

Abacode and its partner, ZeroFox, Inc. 1 / By response filed

February 28, 2019, Petitio ner objected to the motion. The

administrative law judge granted the Motion to Intervene by Order

entered on March 1, 2019 .

At the hearing, Petitioner called one witness and offered

into evidence 14 exh ibits: Petitioner Exhibits 1 through 14 .

Respondent called two witness es and offered into evidence two

exhibits : Respondent Exhibits 1 and 2 . Intervenors called no

witnesses and offered into evidence no exhibits. The parties

jointly offered 19 exhibits: Joi nt Exhibits 1 through 19. All

exhibits were admitted.

The court reporter filed the transcript on April 4 , 2019 .

Each party filed a propose d recommended order on April 15 , 2019 .

Petitioner's proposed recommended order does not contend that

Respondent's r eject - all decision is illegal, but does not

withdraw this claim, so it is addressed below.

FINDING S OF FACT

1. In response to the tragi c shootings at Marjorie Stoneman

Douglas High School in February 2018, the legislature enacted,

effective Marc h 9, 2018, the Marjorie Stoneman Douglas High

School Public Safety Act (the Act). A mong other things, the Act

authorizes Respondent to spend $3 million for the 2018 - 19 fiscal

year "to competitively procure . . . [a] centralized data

repository and analytics resourc es pursuant to s. 1001.212,

Florida Statutes[,]" and provides that Respondent " shall make

such resources available to the school districts no later than

Dec ember 1, 2018." Ch. 2018 - 3, §§ 50 and 52, Laws of Fla.

2. Within one month after the passage of the Act,

Respondent confirmed that the above - quoted language mandated the

procurement of two systems and that "analytics resources" refer s

to the Monitoring Tool. Respondent researched the relevant

technology and draf ted an ITN, which it issued on August 3, 2018.

3. In general, the ITN requires each vendor to submi t , by

September 6, 2018 , a reply consisting of a tech nical reply and a

price reply and provides that Respondent will evaluate the

replies by September 10, 2018. ITN sectio n 3.4 states that the

Negotiation Committee will commence negotiations on or about

September 24, 2018, and the winning vendor or vendors will

commence work on October 19, 2018.

4. ITN section 8.1.2 , which contains the "Criteria for

Evaluation," states that Respondent will score each reply based

on a maximum of 70 points for the technical reply and 30 points

for the price reply. Section 8.1.2 states that, after

negotiati ons, Respondent anticipates awarding the contract, if

any, to not more than three vendors that Respondent has

determined provide the best value to the state. ITN section 8.3

provides that, after Respondent awards a contract to each of up

to three vendors, "[s]chool districts will then choose from these

approved vendors to determine which [Monitoring Tool] is used in

their district."

5. ITN section 8.1.3, which contains the "Criteria for

Negotiations," broadly authorizes Respondent to negotiate

revisions to each vendor's technical reply, as required to serve

the best interest of the state. S ection 8.1.3.E. also authorizes

Respondent to revisit each vendor's price reply: "[Respondent]

reserves the right to negotiate differe nt terms and related price

adjustments if [Respondent] determines that it is in the state's

best interest to do so."

6. ITN Attachment B is the " Price Reply. " The first

paragraph of Attachment B states: "There shall be no additional

costs charged for work performed under this I TN. The [school]

district price on this page will be used for evaluation and

scoring purposes." The second paragraph, which is titled,

"Assessment Instrument," add s : "Respondent shall provide a cost

for the Social Media Monitoring instrument and service s in

subsequent contract." Immediately below this statement is the

following price form :

Description Cost

Social Media Monitoring Contract 10/19/18 - 6/30/19 $ ____

instrument and services Period 7/1/19 - 6/30/20 $ ____

2018 - 2021 7/1/20 - 6/30/21 $ ____

Social Media Monitoring Optional 7/1/21 - 6/30/22 $ ____

instrument and services Renewal 7/1/22 - 6/30/23 $ ____

Years 7/1/23 - 6/30/24 $ ____

Grand Total Cost* $____ $ ____

7. The price form fails to reveal if the "Grand Total Cost"

and annual costs are per - district prices or gross price s ,

regardless of the number of school districts choosing to use the

Monitoring Tool . The asterisk is meaningless because the ITN

contains no explanation as to its meaning . The second blank line

to the right of "Grand Tot al Cost" is consistent with an

extension of a per - district price, but the document does not

direct the vendor to perform such an extension, which would be

impossible because, as noted above, the multiplier is unknown

until districts contract to use a speci fic Monitoring Tool .

8. On August 22, 2018, Respondent issued ITN Addendum #1,

which answers questions posed by vendors. Through this means,

Respondent informed vendors that school districts are not

required to use the Monitoring T ool, Addendum #1, p. 3; it is

impossible to determine the volume of usage of the Monitoring

T ool among over 4000 schools serving about 3 m illion students,

Addendum #1, p. 3; replies may include more detailed pricing

schedules, such as "pricing based on dif fering user counts and/or

number of schools or districts, " Addendum #1, p. 4; and the

Monitoring Tool may be used by as many as 67 school districts

plus six university - affiliated l ab or charter schools,

Addendum #1, p. 6.

9. On August 30, 2018, Respondent issued ITN Addendum #2,

which makes two changes to Attachment B. Addendum #2 deletes the

second blank line to the right of "Grand Total Cost" and explains

the asterisk by stating , "Points awarded will be based on this

price." Neither change resolves the ambiguity as to whether the

quoted price s are per - district or gross price s .

10. Eight vendors , including Petitioner, timely submitted

replies. Petitioner is a responsible vendor and its reply is

responsive.

11. It appears that Responde nt completed scoring of all of

the technical and price replies of the eight vendors in

substantial conformity with the September 10 deadline stated in

the ITN . As provided by the ITN, f ive of Respondent's employees

scored the technical replies , staff scored the price replies , and

the five employees who scored the technical replies formed the

negotiating team .

12. One of the technical evaluators failed to discharge his

responsibilities. Appearing not to have read or understood the

basics of Petitioner 's reply, which describes a Monitoring Tool

already in use by several Florida school districts, the evaluator

wrongly concluded that Petitioner's reply did not offer a

Monitoring Tool and improperly assigned a low score to its reply.

This evaluator abrupt ly quit the day after turning in his

evaluations, and Respondent's negotiating team was reduced to the

four remaining evaluators.

13. Based on the scoring of the replies , Respondent

selected three ve ndors with which to negotiate: Abacode,

Veratics, Inc. (Veratics), and NTT Data Inc. (NTT Data).

14. Abacode re solved the ambiguity of the price form in

Attachment B by adding to the price form language stating that

its price is a per - district price. For the three years of the

base contract and three option al renewal years, Abacode's

"Per - District Grand Total Cost" was $68,350 , meaning that, even

ignoring the lab schools , the gross price would slightly exceed

$4.5 million, if all 67 school districts chose Abacode's

Monitoring Tool for six years. Abacode off ered a 15% discount i n

the unlikely event that all 73 school districts and lab schools

chose to use its Monitoring Tool .

15. Veratics did not alter the price form and offered a

"Grand Total Cost" of $143,325.18 for the three years of the base

contract and three optional renewal years. This appears to be a

per - district price , so the gross price would slightly exceed

$9.6 million, if all 67 school districts chose Veratics'

Monitoring Tool for six years .

16. NTT Data likewise completed the price form without

alterations, showing a "Grand Total Cost" of $88,454 for the

three years of the base contract and three optional renewal

years. An additional page entitl ed, "Additional Pricing Detail "

c onfirms that the "Gran d Total Cost" is a per - district price , so

the gross price would slightly exceed $5.9 million, if all

67 school districts chose NTT Data's Monitoring Tool for six

years .

17. Negotiations with the three vendors commenced in late

October 2018. During negotiations , Respondent's negotiating team

realized that the ITN failed to convey adequately Respondent 's

requirement to receive the notifications that the Monitoring T ool

transmits to the contracting school district , as vendors had not

included this serv ice in their price replies .

18. A t some point, the negotiating te am also realized that

the price form was ambiguous as to per - district or gross pricing.

O n November 13, 2018, Respondent's procurement officer sent to a

member of the negotiating team a draft revised price form that

specified per - district pricing for the base years, but not for

the optional renewal years. After further revisions by the

recipie nt of the email , Respondent distributed a revised price

form to the three vendors, but not the five vendors that it had

not selected for negotiations.

19. As applicable to both the base and optional renewal

period s , the revised price form requires an annual price for

notifications to Respondent; a one - time price for the "Initial

Districts [sic] firs t six (6) months " ; and "Costs per additional

district," which are classified by " Small," "Medium," and

"Large." The revised price form also includes a list of all

67 districts with their 2017 - 18 enrollments and classifies each

district as "Small," "Medium," or "Large."

20. The three vendors timely submitted revised p rice

replies with the following "Grand Total Costs": Abacode --

$4.6 million, Veratics -- $34.4 million, and NTT Data -- $6.0

million. The price replies of Abacode and NTT Data increased by

relatively modest amounts , but the price reply of Veratics , which

increased by nearly $25 million over the six years of the

procured servi ce, itemized about $5.5 million for the first year.

Hurdling past the $3 million authorized for the procurements of

the Monitoring Tool and a centralized data repository, Veratics

implicitly eliminated itself as a vendor.

21. On December 10, 2018 -- nine d ays after the statutory

deadline for making the Monitoring Tool(s) available to school

districts -- Respondent issued a Notice of Intent t o Award the

contract to Abacode. Petitioner timely filed a Notice of Protest

and Formal Written Protest, which includes a Petition for

Administrative Hearing. The petition details, among other

things, the ambiguity in the original price form as to

per - d istrict or gross pricing and alleges that Respondent failed

to perform the necessary conversions to compare price replies

accurately. Addressing the negotiations, the petition notes,

among other things, that the three selected vendors were allowed

to chan ge their price replies and submitted what the petition

describes only as "higher" pricing -- certainly, a charitable

understatement as applied to Veratics. For relief, Petitioner

requested recommended and final orders directing that Respondent

award the con tract to Petitioner, "or, alternatively, that

[Respondent] reject all Replies and conduct a new procurement."

22. On January 3, 2019, Respondent did just that:

Respondent issued an Amended Agency Decision rejecting all

replies and advising that it would reissue the ITN in a second

attempt to procure the Monitoring Tool. However, Petitioner

timely filed a Second Notice of Intent t o Pro test and Formal

Written Protest, as well as the Petition, which, as noted above,

requests a recommended order awarding the contract to Petitioner.

23. Due to the school - safety issues involved in the subject

procurement, Commissioner of Education Richard Corcoran issued a

memorandum on February 13, 2019, authorizing Respondent to

proceed with the second procurement "to avoid an immediate and

serious danger to the public health, safety or welfare," as

provided by section 120.57(3)(c). On the same date, Governor Ron

DeSantis issued Executive Order 19 - 45, which, among other things,

characterizes as "unacceptable" Respondent's fa ilure to meet the

December 1 statutory deadline and orders Respondent to

"immediately take any and all steps necessary to implement [the

Act] to provide . . . [the Monitoring Tool] . . . by August 1,

2019."

24. The new invitation to negotiate is s imilar to the ITN,

except that its definition of "Notifications" in the scope of

services clearly defines the need to transmit notifications to

Respondent, as well as to the contracting school district , and

the price form i n Attachment B bases the evaluation on gross

prices.

25. Respondent's decision to reject all replies is

supported by five facts: 1) the irrational scoring of

Petitioner's reply by one evaluator; 2) the potential confusion

caused among potential vendors, including the eight vendors that

submitted replies, by the ambiguity contained in the price form

in Attachment B; 3) the revision of the price form for the three

selected vendors to clarif y that the pricing was on a

per - district basis; 4) the effective loss of one of the thre e

selected vendors upon receipt of pricing replies to the revised

price form ; and 5) the capacity to resolve the then - pending

protest by acceding to Petitioner's demand for a reject - all

decision .

26. As for the first reason, Petitioner objected at hearing

to testimony from one of Respondent's witnesses pertaining to

this matter because, on deposition, Respondent's agency

representative failed to identify the irrational scoring as a

factor in the reject - all decision. As discussed in the

Conclusions of Law, section 120.57(3)(f) requires a determination

of whether an agency's reject - all decision "is," not "was,"

arbitrary. Thus, all facts may be considered, regardless of

whether an agency witness cited them in a deposition or, more

broadly, whether an agency cited them at the time of making the

reject - all decision. Additionally , despite the failure of the

deposition witness to identify this factor, P etitioner mentioned

in the Pre - h earing Stipulation "incorrect evaluations" by at

least one evaluator, so Petitioner was aware of this ba sis for

the reject - all decision, even though Pe titioner may not have been

aware that Respondent relied on t his factor in making the

reject - all decision.

27. As for the third reason, as noted above, the ITN

permits Responden t to negotiate new items and, if so, obtain

revised price replies from the vendors with which it is

negotiating. These provisions cover the addition of the

notification to Respondent, which Respondent substantially

omitted from the ITN. However, resoluti on of a basic element of

any bid 2 / solicitation -- here , whether the price form calls for

per - district or gross pricing -- does not fall within these

provisions, so Respondent's decision to provide this revision

only to the three selected vendors raises compet itive concerns.

28. As for the fourth reason, the ITN p ermits Respondent to

have selected two vendors for negotiations in the first place.

But this does not mean that the effective loss of a selected

vendor is not available as a legitimate reason to re ject all

replies. Also, Veratics' jarring price increase indicates either

that one of the successful vendors failed to appreciate the scope

of the procurement or did not wish to participate in the

procurement any further -- either reason signaling a potential

problem with the procurement , so that Respondent rationally may

have decided to reject all replies .

29. As for the fifth reason, Respondent had already missed

the December 1 statutory deadline, and a reject - all decision

represent ed the quic ker route to comp leting this procurement

because of the above - cited flaws in the initial procurement; the

school - safety issue , which authorizes the immediate commencement

of a second procurement for the Monitoring Tool ; and, as

discuss ed in the Conclusions of Law, a reject - all decision is

easier to defend than an award decision.

30. In the Pre - h earing Stipulation, Petitioner requested

relief in the form of a reopening of the procurement process

following a clarification from Respondent -- presumably, as to the

pricing ambiguity in the original price form and the need to

provide notifications to Respondent; an opportunity for all eight

vendors to submit new replies; and the scoring of the new

replies.

31. First, Petitioner did not seek this relief in its

initial petition protesting the award decision or even in the

Petition protesting the reject - all decision. So, when making the

reject - all decision, Respondent was acceding to the only

alternative posed by Petitioner that did not result in an award

to Petitioner . By doing so, as explained above, Respondent

rationally pursued an expeditious resolution of the then - pending

protest and, thus, the procurement of the Monitoring Tool. Had

Respondent chosen an opt ion not presented by Petitioner,

Respondent had no assurance that its choice would have induced

Petitioner to dismiss its first protest.

32. Second, even if Respondent should have assumed that a

restart of the first procurement would have resolved Petitio ner's

then - pending protest, as it accomplishes the same thing as a

reject - all decision followed by a rebid, the focus is on whether

Respondent made a rational choice, not whether it made the best

choice. By this point, at least , Respondent was trying to h urry

along the procurement , and a reject - all decision would achieve

this end, even if a restart of the first procuremen t might have

been resulted in an earlier award.

33. Under the circumstances, Respondent's decision in

January 2019 to cut its losses and reject all replies, clean up

the documents, and rebid the procurement is not arbitrary .

34. As discussed in the Conclusions of Law, no further

analysis is required of Petitioner's claim that the reject - all

decision is arbitrary fo r the additional reason that the sequence

of events -- an award decision, a re ject - all decision, and a

rebid -- has resulted in the disclosure of each vendor's reply and

undermined the integrity of the procurement process. The point

is that the reject - all dec ision is rational -- not, as discussed

above, whether Respondent could have made a better decision or,

in connection with a claim of arbitrariness , whether the effect

of the agency's decisionmaking sequence may also have undermined

the integrity of the procu rement process.

CONCLUSIONS OF LAW

35 . DOAH has jurisdiction. §§ 120.569 and 120.57(1)

and (3) , Fla. Stat. Petitioner and Abacode are "adversely

affected" by the reject - all decision. § 120.57(3)(b).

36. The burden of proof is on Petitioner. § 120.57(3)(f).

Section 120.57(3)(f) identifies what Petitioner must prove in

order to prevail in a bid case based on an award decision or a

reject - all decision :

In a competitive - procurement protest, other

than a rejection of all bids, proposals, or

replies, the administrative law judge shall

conduct a de novo proceeding to determine

whether the agencyÓs proposed action is

contrary to the agencyÓs governing statute s,

the agencyÓs rules or policies, or the

solicitation specifications. The standard of

proof for such proceedings shall be whether

the proposed agency action was clearly

erroneous, contrary to competition,

arbitrary, or capricious. In any bid - protest

pro ceeding contesting an intended agency

action to reject all bids, proposals, or

replies, the standard of review by an

administrative law judge shall be whether the

agencyÓs intended action is illegal,

arbitrary, dishonest, or fraudulent.

37. Section 120.5 7(3)(f) requires deference to an agency's

decision in any bid case and greater deference to an agency's

decision in a reject - all case than an award case. 3 / I n an award

case , the role of the administrative law judge is to conduct a

de novo hearing and apply a standard of proof, but the standards

of proof and criteria for overturning the proposed award decision

are deferential. I n a reject - all case, the role of the

administrative law judge is to conduct a hearing , impliedly not

entirely de novo, and app ly a standard of review , not proof, and

the criteria for overturning the proposed reject - all decision are

even more deferential. In both c ases, the deferential

criteria -- and, in the award case, the deferential standards of

proof -- apply only to the agency' s intended 4 / action. 5 /

38. A close reading of section 120.57(3)(f) is unnecessary

to reject Petitioner's claim that Respondent's intended agency

action to reject all replies is arbitrary. In general, an

"arbitrary" decision is a decision unsupported by logic or the

necessary facts. See § 120.52(8)(e) ( defining "arbitrary" as

criterion for invalidating a rule); Agrico Chem. Co. v. Dep't of

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

means "despotic" or not supported by facts or logic). As an

appellate standard of review, the "arbitrary and capricious"

standard subjects an agency's decisionmaking "only to the most

rudimentary command of rationality[, requiring] an inquiry into

the basic orderliness of the [decisionmaking] process, and

authoriz[ing] the courts to scrutinize the actual [decision] for

signs of blind prejudice or inattention to crucial facts." Ad am

Smith Enters. v. State Dep't of Envtl. Reg. , 553 So. 2d 1260,

1273 (Fla. 1st DCA 1989) (construing former statute governing

direct appeals of legislative rulemaking by agencies).

39. The language of section 120.57(3)(f) requires a

determination of whether the intended agency action to reject all

replies "is" arbitr ary. This implies that the determination is

based on the facts available at the time of the hearing,

regardless of whether the agency relied on them when making its

reject - all decision. Regardless of whether Respondent rejected

all replies, in part, due to the irrational scoring of one

evaluator , am ple additional reasons support Respondent's

reject - all decision, as set forth in the Findings of Fact.

Petitioner thus has failed to prove that Respondent's reject - all

decision is arbitrary.

40. A close reading of section 120.57(3)(f) is not

necessary to reject one of Respondent's claim s that the intended

agency action to reject all replies is illegal. Section

120.57(3) does not define "illegal," but a common definition of

the term is "not accord ing to or authorized by law." Merriam

Webste r online dictionary . 6 / Justice Canady has cited a similar

definition, which states that "illegal means 'contrary to, or

forbidden by, law.' 7 The Oxford English Dictionary 652 (2d ed.

1989)." State v. McMahon , 94 So. 3d 468, 479 (Fla. 2012)

(Canady, J., dissenting).

41. There is nothing even literally illegal in the sequence

of the procurement, which consists of an award decision, a

disclosure of the replies of all of the vendors, a reject - all

decision, and a reissuance of substantially the same ITN. As

P etitioner contends, by law, the subject procurement required a

competitive sealed reply, § 287.057, and the replies remained

exempt public records under certain conditions. § 119.071(1)(b).

The effect of en tire sequence of events res ulted in the loss of

the public - records exemption prior to the issuance of the new

invitation to negotiate , but this represents nothing more than

the interplay of the laws governing competitive proc urement and

the laws governing public records, including replies to an

invitation to negotiate. 7 / Petitioner thus has failed to prove

that Respondent's reject - all decision is illegal due to the

disclosure of the contents of Petitioner's reply .

42. However, a close reading of section 120.57(3)(f) is

necessary to address the other illegality claim , which is

predicated on Respondent's failure to complete the procurement by

the statutory deadline of December 1, 2018. The facts support

this claim. It i s undisputed that the procurement has missed the

statutory deadline -- as of this date, by over four months on a

procurement that, from start to finish, was allotted nine months.

It is undisputed that time is of the essence in this procurement,

which, by le gislative mandate, was to enhance school safety on a

sche dule enacted by the legislature .

43. It is necessary to distinguish between the claim and

the relief sought by Petitioner. Claiming that the failure to

meet the statutory deadline satisfies the criterion of

illegality, so as to necessitate the setting aside of the

reject - all decision, Petitioner variably has reques ted an award

of the contract, a restart of the procurement, or, at least

implicitly, a remand of the matter for Respondent to reconsid er

its reject - all decis ion, freed of whatever illegality attached to

its January 3 reject - all decision.

44. It is irrelevant that Petitioner has failed to

recognize the power of its claim. If the failure to meet the

statutory deadline satisfies the meani ng of illegality in section

120.57(3)(f), this is a condition that cannot be cured. In other

words, i f Respondent's failure to make available a Monitoring

Tool to the school districts by December 1 is illegal, all acts

after December 1, 2018, to procure the Monitoring Tool may be set

aside, if challenged by an adversely affected person , 8 / unless the

legislature reinstates the procurement.

45. The question is whether this claim is supported by the

law. B etween the utter irrationality of arbitrariness and the

deception or corruption associated with dishonesty or fraud lie

bidding mishaps arising from an agency's inattention to detail:

within this spacious middle ground, an agency's intended action

may giv e rise to claims of illegality.

46. A literal d efinition of illegal contradicts the

structure of section 120.57(3)(f). A violation of law, at least

as applicable to bidding, is well described by the three criteria

for setting aside an award decision: a violation of statute,

rule or policy, or, treating the invitation to bid as a contract

binding on the agency , the specification document. If "illegal"

covers substantially the s ame ground, then a reject - all case may

be easier to win for a protestor, which, if unable to prove

illegality, may show one of the other criteria; of course, such a

situation would undermine section 120.57(3)(f), which secure s

greater deference to an agenc y decision not to do business with

any vendor than an agency decision to do business with a vendor.

47. T he source of the legislative enactment of i l legality

as a criterion for setting aside a reject - all decision was a

then - recent Florida Supreme Court case, which, in turn, relie d on

other decisions. But none of these cases sets aside an agency

bid decis ion based on a literal definitio n of illegal ity .

48. Enacted in 1996, 9 / the reject - all provisions of section

120.57(3)(f) codified Departm ent of Transportation v. Groves -

Watkins Constructors , 10 / whi ch held that an agency's reject - all

decision may not be overturned absent a finding of "'illegality,

fraud, oppression, or misconduct,'" 11 / as the Court had earlier

held in Liberty County v. Baxter's Aspha lt & Concrete, Inc. 12 /

49. Groves - Watkins was an illegality case that,

unfortunately, was treated as an arbitrariness case by the Court,

the lower court, and the hearing officer. In Groves - Watkins , the

agency reject ed all bids to construct a complex highway

interchange and immediately reissued the same invitation to bid.

The agency based its reject - all decision on the fact that the

lowest bid exceeded the agency's projected costs by 29% .

However, the large discrepancy was due to the agency 's

miscalculation of projected cost s, which, when corrected,

substantially eliminated any difference between the projected

costs and the bid amount . Because the agency's policy was

automatically to award a bid if the lowest bid was less than 7%

more than pro jected costs, the hearing officer concluded that the

reject - all decision was arbitrary and capricious and recommended

that the agency issue a final order setting aside the reject - all

decision and awarding the bid to the lowest bidder.

50. The agency iss ued a final order rejecting the

recommended order and affirming its reject - all decision .

Reversing, the First District Court of Appeal concluded that the

agency's reject - all decision was arbitrary and capricious. 13 / In

dissent, Judge Ervin stated that there was no finding of

"'illegality, fraud, oppression or misconduct'" and, if there

were one, it would have lacked a sufficient evidentiary basis,

implying that he was not equating "illegality" with literal

illegality . Judge Ervi n reviewed case law from other

jurisdictions that, notwithstanding some conflicting decisions ,

provided that an agency enjoys "unbridled discretion" to reject

all bids, so as always to reserve for the agency the right to

redesign its procurement to reduce costs . Ultimately retreating

from this position , Judge Erving concluded that a reject - all

decision must be sustained, as long as it is free from " the

Liberty County standard of . . . f raud, oppression, or

misconduct, " 14 / this time omitting from his restatement of the

Liberty County criteria the troublesome criterion of illegality.

51. Reversing the First District, the Florida Supreme Court

held that the Liberty County criteria conform to "the majority

view that . . . judicial inte rvention to prevent the rejection of

a bid should occur only when the purpose or effect of the

rejection is to defeat the object and i ntegrity of competitive

bidding . " Ignoring the Liberty County criterion of illegality,

the Court understandably found t hat budgetary concerns arising

from an "honest mistake" by the agency in projec ting costs

insulated the reject - all decision from a claim of arbitrariness.

52. In support of its holding , the Court cited , among other

sources, a Third Circuit Court of Appeal s decision, Sea - Land

Service, Inc. v. Brown , 15 / for the principle that "only [a]

showing of clear illegality will entitle an aggrieved bidder to

judicial relief." 16 / The Court did not explain how a violation of

the 7% policy did not constitute "clear illegality " or explain

the meaning of "clear illegality."

53. The Sea - Land Service d ecision equates a "showing of

clear illegality " with "no r ational basis" for the decision , 17 / so

as to treat illegality and arbitrariness synonymously . But, a s

Groves - Watkins itself illustrates , a reject - all decision may be

illegal without being arbitrary. In any case , neither

Groves - Watkins nor Sea - Land Services offers any support for a

literal interpretation of illegal ity , and their common use of

"clear illegality" suggests a judicial intent to require

illegality plus something unspecified by the courts.

54. More recent federal procurement cases have identified a

factor to be added to literal illegality: prejudice to the

protestor . I n Caddell Construction Co. v. U nited States , 18 / the

court summarized the applicable law for setting aside an agency's

decision in a bid case:

As the [federal Administrative Procedure Act

in determining whether to

set aside agency action, the Court shall

take "due account . . . of the rule of

prejudicial error." 5 U.S.C. § 706. In the

seminal case of Kentron Hawaii, Ltd. v.

Warner , [ 19 / ] . . . the United States Court of

Appeals for the Dist rict of Columbia Circuit

emphasized that to be remediable, a

procedural procurement error had to result

in a "prejudicial violation of applicable

statute or regulations," or an irrational

award decision. 480 F.2d 1166, 1169, . . .

(D.C. Cir. 1973). Thus, when an irrational

or arbitrary and capricious agency action

has occurred, prejudice is presumed, but

when a violation of statute or regulation

has occurred, there must be a separate

showing of prejudice. See generally Centech

Grp., Inc. v. United States , 554 F.3d 1029,

1037 (Fed. Cir. 2009) (recognizing that "a

reviewing court may set aside a procurement

action if the procurement official's

decision lacked a rational basis or for a

challenge involving "a violation of

regulation or procedure . . . the

dis appointed bidder must show a clear and

prejudicial violation of applicable statutes

or regulations.") (emphasis added) (internal

citations omitted); Banknote Corp. of Am.

Inc. v. United States , 365 F.3d 1345, 1351

(Fed. Cir. 2004) (recognizing that under t he

APA standard applied in [ Administrative

Dispute Resolution Act of 1996 ] cases "a bid

award may be set aside if either (1) the

procurement official's decision lacked a

rational basis; or (2) the procurement

procedure involved a violation of regulation

or procedure . . . . When a challenge is

brought on the second ground, the

disappointed bidder must show a clear and

prejudicial violation of applicable statutes

or regulations.") (emphasis added) (internal

citation and quotation marks omitted). [ 20 / ]

O ther federal decisions require a showing of prejudice , wit hout

regard to the fe deral APA, evidently based on the application of

common law to federal procurements . See, e.g. , TRW Envtl. Safety

Sys., Inc. v. U.S. ; 21 / Data Gen. Corp. v. Johnson . 22 /

55. None of these definitions works. The literal

definition destroys the structure of section 120.57(3)(f) and its

establishment of different levels of deference. Examined from

the perspectives o f Respondent's failure to comply with the

statutory deadline, a hypothetical failure to coordinate the

procurement of the Monitoring Tool with the Florida Department of

Law Enforcement and school districts, and the Groves - Watkins

facts, proposed agency action in each of these cases would be

illegal, and each of these procurements could not proceed.

56. The "clearly illegal" definition lacks meaning ,

although the Court 's reference to the object of competitive

bidding implies the exclusion of literal illegality . It would

ma ke little sense if the Court were referring to the probability

of illegality. Factfinding is by degree, but judicial

conclusions of law are not. Once the facts are found by the

agreed - upon evidentiary standard, an act or omission is legal or

it is not, and labeling the act or omission as "clearly illegal"

adds nothing. For example , treating the standard of illegality

as "certainly illegal," the proposed agency action would be

illegal in this case, the coordination hypothetical, and

Groves - Watkins , just as the proposed agency action would be using

a literal definition of illegal.

57. Literal illegality plus prejudice achieves greater

deference because the proposed agency action in the three

scenarios would be illegal only in Groves - Watkins . In the

pres ent case, Petitioner's claims arising out of the disclosure

of its reply involve prejudice, but not prejudice arising from

Respondent's failure to comply with the statutory deadline.

However, prejudice is extrinsic to illeg ality, not part of

illegality, s o as likely to require legislation to be added to

section 120.57(3)(f).

58. A nother definition preserves the structure of section

120.57(3)(f) and , if not precisely co - extensive with literal

illegality, introduces no extrinsic elem ents, while achieving at

least the deference of literal illegality plus prejudice . 23 / The

definition is a departure from the essential requirements of law ,

which is the primary criterion used by courts to review , by

certiorari, quasi - judicial actions of agencies that are not

subject to chapter 120 when no other method of review is

available. Haines City Cmty. Dev. v. Heggs , 658 So. 2d 523, 530

(Fla. 1995). Although more frequently applied to certiorari

review of local land use decisions, this deferential criterion

ha s been applied to a bid decision of an agency not covered by

chapter 120. Biscayne Marine Partners, LLC v. City of Miami ,

2 019 Fla. App. LEXIS 2122, pp. 7 - 8 (Fla. 3d DCA 2019) (discussion

of the four Liberty County criteria in analysis of whether a

proposed bid award constituted a departure from the essential

requirements of law) .

59. Specifically, a departure from the essential

requirements of law is :

an inherent illegality or irregularity, an

abuse of judicial p ower, an act of judicial

tyranny perpetrated with disregard of

procedural requirements, resulting in a

gross miscarriage of justice. The writ of

certiorari properly issues to correct

essential illegality but not legal error.

Heggs , 658 So. 2d at 527 - 28 (citing Jones v. State , 477 So. 2d

566, 569 (Fla. 1985) (Boyd, C.J., concurring specially) ) .

Consistent with the reference to the object of competitive

bidding in Groves - Watkins , t his is the meaning of illegality in

section 120.57(3)(f).

60. Assessed by this definition, Respondent's failure to

meet the statutory deadline is not an inherent or essential

illegality , and proceeding with the procurement after December 1,

2018, is not an abuse of administrative power of any sort , nor a

miscarriage of justice. Thus, the failure to meet the statutory

deadline is not a departure from the essential requirements of

law, so it does not constitute illegality within the meaning of

section 120.57(3)(f).

61. Respondent's violation of the stat utory deadline is not

a departure from the essential requirements of law, in part,

because the legislature imposed no penalty on Respondent's

violation of the statutory deadline , notwithstanding its

materiality . 24 / As noted above, the Governor and Commissioner of

Education have inferred that the procurement may continue --

implicitly recogniz ing that it is illogical, when a statutory

deadline is violated, to impose draconian consequences, not

specified by statute, so as to defeat the objective of the

statutory deadline in the first place -- here, to secure the

Monitoring Tool, sooner rather than later . 25 / A literal

definition of illegality in section 120.57(3)(f) would write into

the Act a draconian penalty for Responden t's violation of the

statutory deadline in defiance of common sense.

62. Petitioner thus has failed to prove that Respondent's

r eject - all decision is illegal because Respondent violated the

statutory deadline.

RECOMMENDATION

It is

RECOMMENDED that the Department of Education enter a final

order dismissing the Petition.

DONE AND ENTERED this 1 7 th day of April , 2019 , in

Tallahassee, Leon County, Florida.

S

ROBERT E. MEALE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 1 7 th day of April , 2019 .

ENDNOTES

1 / All references to "Abacode" include ZeroFox, Inc.

2 / All references to "bid" are to all types of procurements,

including an invitation to negotiate.

3 / The statutory analysis in this recommended order does not rely

on legislative intent, except where explicitly so stated.

Instead, the statutory analysis defines the key word,

"illegality," based, not on its liter al meaning in isolation, but

on:

the entire text of a statute, including its

structure and the physical and logical

relation of its many parts, when applying

the language of the statute to a set of

facts. See Scalia & Garner, Reading the

Law: The Interpr etation of Legal Texts ,

p. 167 (2012) ("Perhaps no interpretative

fault is more common than the failure to

follow the whole - text canon, which calls on

the judicial interpreter to consider the

entire text, in view of its structure and of

the physical and lo gical relation of its

many parts.").

Hous. Opportunities Project v. SPV Realty, LC , 212 So. 3d 419, 421

(Fla. 3d DCA 2016).

Adherence to the whole - text canon avoids any conflict between

the legislative intent and the statutory language, although some

decisions hold that legislative intent may override the "strict

letter of the statute." See, e.g. , Vildibill v. Johnson , 492 So.

2d 1047, 1048 (Fla. 1986); State v. Webb , 398 So. 2d 820 (Fla.

1981). The First District Court of Appeal has limited these

Florida Supreme Court holdings to cases in which a literal

construction would lead to "absurd or unreasonable

unconstitutional resu lts" or "ambiguity, absurdity, or

unreasonableness on the face of the statute." Kuria v. BMLRW,

LLLP , 101 So. 3d 425, 426 - 27 (Fla. 1st DCA 2012). However, this

may be a misreading of Vildibill , which consists of two

independent parts: first, the crediti ng of le gislative intent,

even when it may contradict th e strict letter of the statute, and,

second, the reading of a statute to harmonize it with the

constitution. See also Byrd v. Richardson - Greenshields Secur.,

Inc. , 552 So. 2d 1099 (Fla. 1989); State v. Webb , 392 So. 2d 820

(Fla. 1981); Dep't of Prof' l Reg. v. Fla. Dental Hygienist Ass'n ,

612 So. 2d 646 (Fla. 1st DCA 1993).

4 / Section 120.57(3)(f) addresses "proposed" agency action in the

award case and "intended" agency action in the reject - all case .

The administrative law judge is unaware of any difference in

meaning between "proposed" and "intended" agency action. Perhaps

the statute uses the two terms to emphasize the distinction

between the award case and the reject - all case. This recommended

order uses the terms interchangeably.

5 / Because the deferential standards and criteria apply to the

proposed agency action, the administrative law judge may find

direct evidentiary facts based on the preponderance standard.

§ 120.57(1)(j). Such facts would include what was said at a

bidders' conference, when a bidder submitted a bid, or an

evaluator's explanation for a score. The agency may make some

intermediate - level determinations, such as whether a variance is

a minor irregularity and, if so, whet her to waive it, that may

also be addressed under the deferential standards and criteria

because they are not direct evidentiary facts.

6 / "Illegal," merriam - webster.com, https://www.merriam -

webster.com/dictionary/illegal (last visited April 15 , 2019).

7 / As an aside, it does not appear that any vendor availed itself

of the opportunity to protect the confidentiality of any trade

secrets, as provided by section 815.045. See Managed Care of

N. Am., Inc. v. Fla. Healthy Kids Corp. , 2019 Fla. App. LEXIS

40 39 (Fla. 1st DCA 2019) (not yet final).

8 / The inclusion of a statutory deadline for a procurement may

not be common, so the inability to cure a violation may be an

unusual situation. The Act also requires Respondent, in

preparing the ITN, to coordinate with the Florida Department of

Law Enforcement and the school districts. If a protestor proved

a claim that Respondent failed to do so and a literal definition

of illegality applied, Respondent's failure to coordinate would

constitute a literal illegalit y, but presumably could be remedied

by later coordination with these entities and making revisions to

the ITN, as necessary or advisable.

9 / Ch. 1996 - 159, § 19, Laws of Fla.

10 / 530 So. 2d 912 (Fla. 1988). Donna E. Blanton, Florida's

Revised Administra tive Procedure Act, 70 Fla. B.J., July/Aug.

1996, at 30, 35 .

11 / Groves - Watkins , 530 So. 2d at 914 ( citing Liberty C nty . v.

Baxter's Asphalt & Concrete, Inc. , 421 So. 2d 505, 507 (Fla.

1982) ) . As to the addition of the criterion of illegality, see

preceding endnote.

12 / 421 So. 2d 505, 507 (Fla. 1982).

13 / Some of the above - cited facts are found only in the

intermediate appellate decision, Groves - Watkins Constructors v.

Dep't of Transp. , 511 So. 2d 323 (Fla. 1st DCA), reh. denied with

opinion , 511 So. 2d 323 (Fla. 1st DCA 1987) (discussions of,

among other things, the effect of agency's proceeding with second

procurement during a pending bid protest and the power of court

to direct agency to award contract to a vendor).

14 / Groves - Watkins , 511 So. 2d at 330, 332 (Ervin, J.,

dissenting).

15 / 600 F.2d 429 (3d Cir. 1979).

16 / Groves - Watkins , 530 So. 2d at 913.

17 / Sea - Land Service , 600 F.2d at 434.

18 / 125 Fed. Cl. 30 (2016).

19 / 480 F.2d 1166 (D.C. Cir. 1973). This case is cited by

Sea - Land Services .

20 / Caddell Constr. , 125 Fed. Cl. at 50.

21 / 18 Cl. Ct. 33, 65 (1989).

22 / 78 F.3d 1556 (Fed. Cir. 1996).

23 / Defining illegality as a departure from the essential

requirements of law may even preserve the agency's re ject - all

decision o n the Groves - Watkins facts, although it is a close

call. If not, the only standard that would preserve the

reject - all decisio n would be Judge Ervin's "unfetter ed

discretion" standard, which reads out of the law all four Liberty

County criteria.

24 / Using simil ar reasoning, Florida courts traditionally have

examined the history and subject matter of a statutory deadline

and, if the statute did not explicitly restrain the performance

of the act after the deadline and the statute was not

jurisdictional, declined t o enforce a statutory deadline because

the statute was directory rather than mandatory. See, e.g. ,

Schneider v. Gustafson Indus . , Inc. , 139 So. 2d 423, 425 (Fla.

1962); First Providian, L.L.C. v. Evans , 852 So. 2d 908 (Fla. 4th

DCA 2003).

25 / In the unlikely event that the legislature were to take a

different view, it could easily terminate the procurement by not

authorizing or appropriating funding for years after the 2018 - 19

fiscal year.

COPIES FURNISHED:

Jason D. Borntreger, Esquire

James L. Richmond, Esquire

Department of Education

325 West Gaines Street, Suite 1244

Tallahassee, Florida 32399 - 0400

(eServed)

Thomas P. Crapps, Esquire

Joy Ryan, Esquire

Meenan P.A.

300 South Duval Street, Suite 410

Tallahassee, Florida 32301

(eServed)

Kirsten H. Mathis, Esquire

Meenan, P.A.

300 South Duval Street, Suite 410

Tallahassee, Florida 32301

J. Riley Davis, Esquire

Akerman, LLP

106 East College Avenue, Suite 1200

Tallahassee, Florida 32301

(eServed)

Chris Emerson, Agency Clerk

Department of Education

Turlington Building, Suite 1520

325 West Gaines Street

Tallahassee, Florida 32399 - 0400

(eServed)

Matthew Mears, General Counsel

Department of Education

Turlington Building, Suite 1244

325 West Gaines Street

Tallahassee, Florida 32399 - 0400

(eServed)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

ten 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.