20-004844BID Arthur J. Gallagher Risk Management Services, Inc., D/B/A Gallagher vs. The School Board Of Miami-Dade County, Fl Status: Closed Recommended Order on Wednesday, January 13, 2021.

Summary: Petitioner failed to establish that the Intervenor's proposal was non-responsive or that any challenged determinations or actions by Respondent were arbitrary, capricious, clearly erroneous, or contrary to competition.

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

A RTHUR J. G ALLAGHER R ISK

M ANAGEMENT S ERVICES , I NC .,

D / B / A G ALLAGHER ,

Petitioner ,

vs. Case No. 20 - 4844BID

T HE S CHOOL B OARD OF M IAMI - D ADE

C OUNTY , F L ,

Respondent,

and

M ARSH U SA , I NC . ,

Intervenor .

/

R ECOMMENDED O RDER

Pursuant to notice, a final hearing in this case was conducted before

Administrative Law Judge Mary Li Creasy of the Division of Administrative

He arings (ÑDOAHÒ) by Zoom video tele conference on December 2 through 4 ,

2020.

A PPEARANCES

For Petitioner: Elizabeth L. Pedersen, Esquire

Panza, Maurer & Maynard, P.A.

Coastal Towers, Suite 905

2400 East Commercial Boulevard

Fort Lauderdale, Florida 33308

Virginia Cambre Dailey, Esquire

Panza, Maurer & Maynard, P.A.

201 East Park Avenue , Suite 200

Tallahassee, Florida 32301

For Respondent: Jeff James, Esquire

The School Board of Miami - Dade County, Florida

1450 Northeast Second Avenue, Suite 430

Miami, Florida 33132

For Intervenor: David C. Ashburn, Esquire

Greenberg Traurig, P.A.

101 East Coll ege Avenue

Post Office Drawer 1838

Tallahassee, Florida 32301

S TATEMENT OF T HE I SSUE

W hether Respondent's , School Board of Miami - Dade County ( Ñ Board Ò ) ,

decision to award a contract to Interv enor , Marsh USA, Inc. ( ÑMarshÒ or

ÑIntervenorÒ), pursuant to Request for Proposal Number 019 - 010 - CM (Risk

Management and Insurance Broker Services), was clearly erroneous,

arbitrary or capricious, or contrary to competition.

P RELIMINARY S TATEMENT

In June 2020, t he Board issued Request for Proposal Number 019 - 010 - CM

for Risk Management and Insurance Broker Services (ÑRFPÒ) , followed by the

issuance of two addenda to the RFP, the second of which was published in

July 2020. No challenges to the RFP specificat ions were filed. Timely

responses to the RFP were filed by: Petitioner, Arthur J. Gallagher Risk

Management Services, Inc. (ÑAJGÒ); Intervenor, Marsh; and Aon R isk

Services, Inc. , of Florida (ÑAonÒ). The Board Ôs procurement staff reviewed all

three proposa ls and determined that each proposal satisfie d the minimum

criteria set forth in the RFP, and were responsive to the RFP.

A selection committee comprised of seven members (the ÑSelection

CommitteeÒ) reviewed the AJG, Marsh , and Aon proposals, received a

p resentation by a consultant retained by the Board, received presentations by

each of the proposers, engaged in a deliberation among themselves, and

scored the proposals on five criteria. MarshÔs Proposal received the Selection

CommitteeÔs highest score, fo llowed by AJG , and then Aon. The Selection

Committee then voted to recommend that the Board authorize Board staff to

negotiate with Marsh for a contract to provide the services solicited by the

RFP. AJG filed a protest to challenge the Selection CommitteeÔ s

recommendation.

On November 2, 2020 , the Board referred the protest to DOAH to conduct

formal administrative proceedings pursuant to c hapter 120, Florida Statutes.

The final hearing was held as scheduled via Zoom video teleconference on

December 2 thro ugh 4 , 2020. AJG presented the testimony of 12 witnesses:

Nelson Izquierdo , Jr., Selection Committee Member fro m the Office of Labor

Relations; Jorge Wright , Selection Committee Member from the Office of

Economic Opportunity; Renny Neyra , Selection Committ ee Member from the

Office of School Operations; Edward Mcauliff , Selection Committee Member

from the Off ice of Information Technology; Aston Henry , Jr. , Selection

Committee Member from Broward County Public Schools; Jorge Davila ,

Executive Director for the Office of Risk and Benefits Management ; Vaness a

Flores, Procurement Director; Charisma Montfort , Dist rict Director for

Procurement; Mario De Barros , Chief Procurement Officer ; Michael Fox ,

Selection Committee Member and Risk and Benefits Officer ; Kathy Go rdon ,

Independent Consultant from Siver Insurance Agency, Inc. ; and Ron Steiger ,

Selection Committee Member and Chief Financi al Officer for the Board .

The B oard and Marsh did not present any witnesses. However, t he parties

agreed that the Board and Marsh would conduct their cross - examination at

the conclusion of the direct examination of AJG Ôs witnesses and that cross -

examination not be limited to the scope of direct to avoid calling witnesses

multiple times and in the interest of efficiency .

AJGÔs Exhib its 1 through 8, 10, and 12 through 15 were admitted in to

evidence. The BoardÔs Exhibits 1 through 8 were admitted into evidence.

MarshÔs Exhibits 1 through 3 and 5 through 8 were admitted into evidence.

The four - volume Transcript was filed with DOAH on D ecember 14 , 2020.

The parties timely filed proposed recommended orders which were taken into

consideration in the drafting of this Recommended Order. All references to

the Florida S tatutes refer to the 20 20 version unless otherwise specified.

F INDINGS OF F ACT

The Parties

1. The Board is a duly constituted school board charged with the duty to

operate, control , and supervise all free public schools within the S chool

D istrict of Miami - Dade County, Florida, pursuant to Article IX , section 4(b) of

the Florida Constitution an d section 1001.32(2), Fl orida Stat utes .

2. AJG is an Illinois corporation engaged in the business of supplying

broker services for risk management and insurance. AJG is the incumbent

provider for risk m anagement and insurance services for th e Board.

3. Marsh is a corporation authorized to do business in the State of Florida

and engaged in the business of supplying broker service s for risk

management and insurance.

The RFP

4. The Board issued the RFP for the purpose of qualifying and selecting a

Risk Management and Insurance Broker of Record (broker). The Board

requested that interested firms present broker qualifications and conceptual

submittals for property and casualty insurance programs for the Board. The

initial term of the contract was f or a period of five years, commencing

January 1, 2021, through December 31, 2025 .

5. Due to the nature of the RFP, the Board hired Kathy Gordon, an

I ndependent C onsultant with Siver Insurance Agency, Inc. , to assist with

drafting the RFP and creating a com parison chart of all the responses

submitted by proposers.

6. The RFP required all proposers to provide the following certification

(the ÑProposer CertificationÒ):

I hereby certify that: I am submitting the following

information as my firmÔs Proposer and I am

authorized by Proposer to do so. Proposer agrees to

complete an unconditional acceptance of contents of

all pages in this Request For Proposals, and all

appendices and the contents of any Addenda

released hereto; Proposer agrees to be bound by any

and all specifications, terms and conditions

contained in the RFP, and any released Addenda

and understand [sic] that the following are

requirements of this RFP and failure to comply will

result in disqualification of proposal. Proposer has

not divulged, disc ussed, or compared the proposal

with other Proposers and has not colluded with any

other Proposer or party to any other proposal.

7. The Marsh Proposal included this required Proposer Certification .

8. The provisions in Section 1 of the RFP, entitled ÑIns tructions to

Proposers , Ò are ÑboilerplateÒ provisions that typically do not change from one

Board request for proposals to another. B y its express provisions, the RFPÔs

ÑSpecificationsÒ and ÑSpecial ConditionsÒ take precedence over the

ÑInstructions to Pro posers , Ò to the extent there is any inconsistency between

those RFP sections, with ÑSpecificationsÒ assigned t he highest level of

precedence.

9. Section 2 of the RFP, entitled ÑRFP Timetable , Ò established the

timetable under which the Board would accept qu estions concerning the RFP

and set a deadline for receipt of proposals .

10. Section 4 of the RFP, entitled ÑScope of Services , Ò provided general

information regarding the Board, explained the purpose of the RFP, and

identified ÑRequired ServicesÒ solicited by the RFP.

11. Section 5 of the RFP, entitled ÑMinimum Qualification Requirements,Ò

established the minimum qualifications each proposer was required to satisfy

to be a responsive proposer whose proposal would thereby qualify for review,

and included the following statement:

All proposers are required to submit the following

information to be considered for award. Failure to

submit any of the required documents with the

proposal may cause the proposer to be considered

non - responsive and ineligible for fur ther

consideration.

12. Section 6 of the RFP, entitled ÑSubmission Requirements , Ò also

imposed additional requirements pertaining to technical components of the

RFP.

13. Section 7 of the RFP, entitled ÑEvaluation/Selection Process , Ò

identified the criteri a pursuant to which proposals would be evaluated, and

assigned total points that were available to be awarded with respect to each

criteri on .

14. Section 8 of the RFP, entitled ÑProposal Pricing , Ò directed prospective

proposers to an Excel workbook which p roposers were required to complete in

order to provide in detail the commission they proposed to charge for the

services solicited by the RFP. MarshÔs P roposal included the required Excel

workbook, and it included pricing terms (commission - based compensati on) as

requi red by the RFP.

15. Section 9 of the RFP, entitled ÑInsurance Requirements , Ò described

insurance the awarded proposer would be required to maintain, and included

the following statement: ÑIn consideration of this Contract, if awarded, the

Vendo r agrees without reservation to the indemnification and insurance

clauses contained herein.Ò

16. Section 10 of the RFP included the forms and attachments prospective

proposers were to submit with their proposals. It is undisputed that MarshÔs

Proposal incl uded all of the forms and attachments included in Section 10 .

17. On July 17, 2020, Addendum No. 2 to the RFP (ÑRFP Addendum 2Ò)

was published , which included the Board Ôs responses to questions received

regarding the RFP and , in addition, 12 attachments in cluded in response to

those questions. RFP Addendum 2 modified the conditions of the RFP.

18. Specifically relevant to these proceedings is the following question and

answer included within RFP Addendum 2:

Q2: Under Exhibit 17 - Proposed Contract

(specific ally section 4.6), can [the Board] confirm if

it will accept any limitation of liability provisions in

its broker contract.

A2: Proposers should clearly state with specificity

any contract provisions which they propose to

deviate. All proposals which meet the minimum

qualifications will be considered. The selection

committee will determine which deviations are

acceptable and to what extent deviations will

impact the evaluation. Contract amendments,

including reasonable limitations of liability, will be

sub ject to final contrac t negotiations with the

[ Board].

19. At no point in time after the publication of the RFP documents and the

subsequent addenda did any proposer file any ÑSpecification ProtestÒ to the

RFP and/or subsequent addenda.

Review Process

20. Proposals in response to the RFP were required to be submitted in

sealed envelopes or boxes to the Board's Division of Procurement by

1:00 p.m., August 4, 2020 .

21. Following the BoardÔs receipt of the Marsh, AJG , and Aon Proposals,

Vanessa Flores, a Procu rement Director for the Board, conducted a review of

the proposals to determine whether the proposals were, as submitted,

responsive to the RFP. To determine such responsiveness, Ms. Flores checked

for compliance with Section 5 of the RFP, as it is that se ction alone that

governed the responsiveness determination for the RFP . Ms. Flores

determined that each of the proposals received by the Board in response to

the RFP, including MarshÔs Proposal, satisfied all of the requirements set

forth in Section 5 and were , therefore , responsive to the RFP and qualified for

review. 1

22. Based on the determination that the Marsh, AJG , and Aon Proposals

met the RFPÔs minimum qualifications and , therefore , qualified for review,

those proposals were provided to Ms. Gordon. Ms. Gordon took information

from the proposals and created a comparison sheet for use by the Selection

Committee (the ÑInitial ComparisonÒ).

23. Included within the Initial Comparison is a ÑTab 4Ò in which

Ms. Gordon applied the p roposersÔ proposed commiss ion percentages to

assumed premiums for each of three categories of insurance: property

insurance, NFIP flood insurance , and other insurance .

24. After the Initial Comparison was created, it was determined that the

assumed premium for the Ñother insuranceÒ category should have been

$3.2 million instead of the $6.5 million that was included within the RFP and

upon which the proposers had based their proposed percentage commission.

1 Section 4.3 of the RFP identifies ÑRequired Services , Ò and Section 6 of the RFP identifies

ÑSubmission Requirements . Ò However, while the failure of a proposer to satisfy Section 5Ôs

Minimum Qualification Requirements would render the proposerÔs proposal non - responsive,

the failure of a proposer to satisfy the requirements of S ection 4.3 or 6 do not include a

determination of non - responsiveness. Instead, Section s 4 and 6 of the RFP provide as follows:

ÑThe inability or denial expressed in a proposal, or omission in the proposal, to offer to

comply/conform with the technical requirements of this Section of the RFP may result in

deductions in the allocation of points by the Selection Committee.Ò

During the oral presentations, each of the proposers was asked whether the

ch ange in assumed premium for Ñother insuranceÒ would change i t s proposed

commission for Ñother insurance . Ò Each of the proposers responded that their

proposed commissions would not change based on the reduction in assumed

premium for Ñother insurance . Ò Havi ng received that information, Ms.

Gordon created an updated spreadsheet that was presented in the final

hearing as Exhibit 7 (the ÑUpdated ComparisonÒ).

25. To review the p roposals and select the proposer with whom the Board

should negotiate for a contract for the RFP - solicited services, the Selection

Committee, comprised of the following persons , was constituted: 2

a. Ron Steiger, the School BoardÔs Chief Financial

Officer;

b. Renny Neyra, the School BoardÔs District

Di rector of Alternative Education ;

c. Edward Mcauliff, Executive Director of Data

Security, Governance and Compliance for the

School Board;

d. Nelson Izquierdo, the School BoardÔs

Administrativ e Director for Labor Relations ;

e. Michael Fox, Officer of Risk and Benefits for the

School Board ;

f. Jorge Wright, Director of Contract Compliance,

Office of Economic Opportunity for the School

Board; and

g. Aston Henry, Director of Risk Management for

the Broward County Public Schools.

2 Ms. Neyra was a representative of Deputy Superintendent Valtena Brown. Ms. NeyraÔs

scores for the proposals are those shown on the Board Ôs Exhibit 2, the ÑComposite Tabulation

Sheet Ò for Ms. Brown. Mr. Izquierdo was a representative of Jose Dotres. Mr. IzquierdoÔs

scores for the proposals are those shown on the Board Ôs Exhibit 2, the ÑComposite Tabulation

SheetÒ for Mr. Dotres.

26. The Selection Committee met on two separate days. On Sep tember 1,

2020, the Selection Committee and Ms. Gordon met to discuss the Selection

Committee procedures. It was decided that a subsequent Selection

Committee meeting would take place that would include a presentation from

Ms. Gordon and oral presentations of all proposers, followed by a debriefing

session among the Selection Committee and Ms. Gordon .

27. The subsequent meeting was held on September 4, 2020. After a

presentation by Ms. Gordon, the proposers were each allowed up to one hour

to make an oral p resentation and to answer any questions from the Selection

Committee M embers. Each of the proposers availed itself of that opportunity .

28. Prior to the September 4 , 2020, meeting, each of the Selection

Committee M embers was provided with the following doc uments: Selection

Committee Procedures; t he RFP; the three p roposals; t he Initial Comparison;

and the Updated Comparison. Each of the Selection Committee M embers

reviewed each of those documents.

29. After hearing each of the proposer s Ô presentations, the Selection

Committee deliberated and discussed all three proposals during the

Ñdebriefing session.Ò During the Selection Committee debriefing session , but

prior to submitting the scores for each proposer, Ms. Gordon and Ms. Flores

stated that committee memb er score s must be based on what was proposed

and submitted by the proposers.

30. During the debriefing session, the Selection Committee M embers

discussed the fact that Marsh did not have a price cap as part of the property

insurance commission and how that will affect future pricing.

31. Selection Committee Members, Ron Steiger, the Chief Financial

Officer for the Board , and Mike Fox , the Risks and Benefit Officer for the

Board, both stated that they were well aware of the fact that MarshÔs

P roposal did not include a price cap on commission and that, due to

budgetary constraints , price cap on commission s was not relevant.

32. M r. Fox made it clear that , due to budgetary constraints, the Board

would not exceed the dollar figure of any price cap , and that is w hy whether a

proposer had a price cap was inconsequential.

33 . Prior to submitting their scores, all committee members stated that

they felt that they had all of the information they needed, that they were

comfortable with that information , and that they k new that they can only

rely on the information included in the actual proposals.

34. Following the debriefing, the Selection Committee M embers provided

their scores for each proposal on each of the ÑCriteria for EvaluationÒ

specified in Section 7 of the RF P. Those scores are shown on the ÑComposite

Tabulation Sheet.Ò

35 . The Composite Tabulation Sheet revealed that Marsh was the highest

ranked proposer . Accordingly, the Selection Committee then voted

unanimously to seek approval from the Board to negotiate and contract with

Marsh for the services solicited by the RFP .

36 . As the next step in the process, Board staff began to prepare for

presentation of the Selection CommitteeÔs recommendation to the BoardÔs

fiscal committee and , thereafter , to the Board itse lf. Mr. Steiger and his staff,

with the assistance of the BoardÔs procurement staff, met and prepared an

RFP proposal Ñagenda itemÒ for submission to and consideration by the fiscal

committee and the Board (the ÑAgenda ItemÒ).

37 . On October 9, 2020, the B oard posted the notice of intended action to

recommend the award of the RFP to Marsh (the ÑNotice of AwardÒ). On

October 12, 2020, AJG submitted its "Notice of Intent to Protest RFP # 19 -

010 - CM for Risk Management and Insurance Broker Services . Ò The Agenda

Item and recommendation of the Selection Committee was originally

scheduled to be presented to the Board on October 21, 2020. However, that

recommendation was withdrawn due to AJGÔs filing of its letter of protest.

AJGÔs Protest

38 . AJGÔs protest raises three primary issues with the recommendation of

Marsh for the award of the broker services contract. 3 AJG alleges that Marsh

was non - responsive to the specifications of the RFP due to its inclusion of a

sample agreement that differs from the agreement se t forth in the RFP . AJG

asserts that the Selection CommitteeÔs scoring was arbitrary and capricious

as to MarshÔs pricing , particularly as to the effect of no cap on certain

commissions, and extra fees . Further , AJG asserts that Marsh was permitted

to chan ge its proposal after the bid opening .

MarshÔs Sample Agreement and Alleged Non - Responsiveness

39 . Section 6, Paragraph 10 of the ÑSubmission RequirementsÒ of the RFP,

state s:

The Proposer must complete, sign and submit

Exhibits 1 through 17 in Section 10 as part of the

Proposal. By submitting a proposal, the Proposer

agrees to be bound by and to execute the Sample

Agreement, Exhibit 17 of this RFP.

40 . AJG contends that when Marsh included its own ÑSample form of

Client Services AgreementÒ ( Ñ Marsh s ample a greementÒ ) as part of the

proposal packet, Marsh did not agree to be bound by the RFP sample

a greement, Exhibit 17 of the RFP.

41 . AJG fails to take into account that on Exhibit 17, Marsh include d the

following language on the exhibit:

Prior to the commen cement of any work in

connection with this RFP, Marsh will work with

MDCPS to arrive at a mutually acceptable service

agreement, which will incorporate the terms and

conditions of the RFP together with such additional

3 The Pre - h earing Stipulation includes an additional con tention by AJG on whether the cone

of silence was violated. However, AJG failed to plead that allegation in its f ormal w r itten

p rotest , nor did AJG ever timely amend its f ormal w ritten p rotest to add that alleg ation. At

the hearing, the undersigned ruled t hat because AJG failed to amend the pleadings prior to

the final hearing , it w ould be unfair to move forward with any allegations regarding the cone

of silence.

terms and conditions as may be useful for the

particular insurance brokerage services requested

by the RFP. See the enclosed sample form of Client

Service Agreement for additional terms and

conditions which would be applicable to this

agreement.

42 . Marsh then include d a sample agreement that has a ÑSAMPLEÒ

watermark on all pages. At the hearing , several witnesses stated that they

understood that MarshÔs sample agreement was in fact just that -- a sampl e .

The witnesses further testified that Marsh a gree d to be bound by Exhibit 17 ,

the RFP s ample a greement, when Marsh included the language Ñ È which

will incorporate the terms and conditions of the RFP.Ò

43 . As it relates to the RFP Ôs responsiveness requirement, Section 5 of the

RFP states that ÑAll proposers are required to submit the following

in formation to be considered for award. Failure to submit any of the required

documents with the proposal may cause the proposer to be considered non -

responsive and ineligible for further consideration.Ò Also, per the response to

a question posed in the adde ndum to the RFP, the Board clarified that

p roposers should clearly state with specificity any contract provisions from

which they propose to deviate. Ñ All proposals which meet the minimum

qualifications will be considered. Ò (Emphasis added) .

44 . As Selecti on Committee M embers explained, MarshÔs statements

regarding the potential for additional terms were of no consequence to them

because the Board would be under no obligation to agree to any such terms.

What mattered was the fact that Marsh agreed to the te rms of the RFP

sample agreement . As Mr. Fox, Selection Committee M ember and Board

Officer of Risk and Benefits, testified, ÑMy understanding was that [Marsh]

would agree to our terms and conditions, but if there were other items we

wanted to negotiate to i nclude in our agreement, we could do so.Ò

45 . Terms of the RFP sample agreement make clear that negotiations

between the Board and the selected proposer would be necessary. Section 4.1

of the RFP , entitled ÑScope of Services , Ò provides only, ÑSee Attachmen t A.Ò

The referenced ÑAttachment AÒ identifies the Scope of Services as ÑTBD.Ò

Additionally, the RFP explicitly contemplates negotiations. S ection 7.6 of

the RFP provides for negotiations between a proposer and the Board. RFP

Addendum 2 provides that propo sers should identify Ñany contract provisions

which they propose to deviateÒ and that Ñ [c] ontract amendments, including

reasonable limitations of liability, will be subject to final contract

negotiations with the School Board.Ò

46 . MarshÔs Proposal did jus t what RFP Addendum 2 authorized. On the

pa ge immediately preceding the Marsh sample agreement , Marsh specifically

identified two prop osed modifications to the RFP s ample agreement . The fact

that Marsh specifically identified only two modifications to the RFP sample

agreement is further support for the clear fact that the M arsh sample

agreement merely identified potential terms to which Marsh would be

amenable if the parties, following negotiations, found to be useful.

47 . AJG argues that MarshÔs Proposal d eviated from the RFP

specifications regarding provisions relating to insurance and indemnification .

Specifically, relying solely upon Section 8 of the M arsh sample agreement ,

AJG argued that MarshÔs Proposal deviated from the requirements of

Sec tions 1 and 9 of the RFP. However, because the M arsh sample agreement

was nothing more than the ÑsampleÒ described above, AJGÔs argument fail s .

48 . The nature of the Marsh sample agreement also requires rejection of

AJGÔs contention that the Initial and Updated Compa rison failed to

accurately depict MarshÔs Cost Proposal. For example, AJG pointed to

portions of Section 3 of the Marsh sample agreement that refer to

ÑcompensationÒ that Ñwill not be credited against the annual feeÒ as

compensation that was additional to that included in MarshÔs Cost Proposal

and not included in the Initial or Updated Comparison.

49. Ms. Gordon properly did not include the compensation described in

S ection 3 of the M arsh sample agreement, because the Marsh sample

agreement was , as Ms. Gord on recognized , nothing more than the Ñsam pleÒ

described above. Moreover, doing so would have been illogical, since Marsh

did not propose an Ñannual feeÒ against which any fee could be credited.

Pricing and Scoring

50. AJG alleges that MarshÔs Proposal cont ained additional charges,

beyond those reflected in MarshÔs Cost Proposal, for services required by the

RFP that were not considered by the Selection Committee . As an example,

AJG pointed to a chart in MarshÔs P roposal on which Marsh identified

numerous se rvices Marsh performs, one of which is ÑCATDQ - Catastrophic

Data QualityÒ and for which it is stated, ÑAdditional Cost depending on

service offering selected.Ò

51. However, when Mr. Henry , Selection Committee M ember and Director

of Risk Management for Browa rd County Public Schools , was asked if the

described services were Ñsimilar to or different fromÒ a particular service

described in Section 4.3 of the RFP , he replied that the services are different .

Moreover, it was clear that any services for which Marsh would expect to

receive compensation in addition to that reflected in MarshÔs Cost Proposal

would be in addition to services required by the RFP.

52. AJG also contends that the Selection Committee improperly calculated

potential cost saving s of the M a rsh commission percentage proposal as

compared to AJGÔs P roposal.

53. The Agenda Item noted the following:

The Marsh proposal includes 5 - year savings of

$1,235,000 versus the incumbent [AJG] based upon

the premium levels assumed in the RFP process.

Additional ly, the Marsh proposal provides estimate

annual wholesale commission savings of $306,453.

54. AJG attempted to call into question the amount of the savings that

would result from an award of a contract to Marsh by contending that

insurance premium s are su bject to change each year, and that those changes

could be so significant as to eliminate savings attributable to MarshÔs lower

proposed commissions, in the absence of a cap on those commissions.

55. AJG did not, however, provide any evidence to support a conclusion

that insurance premiums would rise sufficiently during the anticipated term

of the contract to eliminate the savings associated with MarshÔs lower

percentage commissions. AJGÔs contention ignores the undisputed fact that ,

even in the face of ris ing insurance costs, the amount the Board will pay for

insurance is limited by budget constraints.

56. Further, even if there are increases in the costs of insurance coverage,

the Board has tools at its disposal to control the amount it will pay for

insura nce (and concomitantly, the commissions it will pay to a broker). For

example, instead of paying increased premiums, the Board could : (i) choose to

buy less coverage and increase the amount by which it already self - insures;

or (ii) increase its insurance d eductibles .

Alleged Change to MarshÔs Cost Proposal

57. AJG argues that Marsh changed its Cost Proposal to include a cap on

property insurance commissions after the Board opened the proposersÔ

proposals, and that the Selection CommitteeÔs decision to recom mend Marsh

for negotiation and contract was predicated on that change. Both arguments

are rejected.

58. MarshÔs Proposal did not include a cap on property insurance

commissions. Marsh does not dispute that fact, and the BoardÔs procurement

staff, Ms. Gordo n, and the Selection Committee M embers understood that

fact. Twice during the Selection CommitteeÔs debriefing session, each time

prior to the scoring of the proposals, the Selection Committee was informed

that its scoring of the proposals could only be ba sed on the information

included in the Marsh, AJG , and Aon Proposals ; the information provided by

Ms. Gordon ; and the proposersÔ oral presentations.

59. Recognizing that their scoring was limited to the proposersÔ proposals,

two of the seven Selection Comm ittee M embers commented that a cap on

property insurance commissions might, at some point prior to execution of a

contract, be a subject for negotiation.

60. In response to those comments, Ms. Flores , Procurement Director , and

Ms. Gordon reiterated that th e scoring of the proposals by the Selection

Committee M embers was required to be limited to what had actually been

proposed by Marsh, AJG , and Aon. Indeed, Ms. Gordon specifically stated

that , with regard to the Marsh Proposal, the Selection Committee Memb ers

had to take Ñinto consideration in the scoring that [MarshÔs Proposal] had no

cap, compared to the others.Ò

61. With full knowledge that MarshÔs Proposal did not include a cap on

property insurance commissions, and full knowledge that the absence of su ch

a cap had to be Ñtaken into accountÒ in their scoring of the proposals, the

Selection Committee M embers scored the proposals in the manner reflected

in the Composite Tabulation Sheet . As reflected on the Composite

Tabulations Sheet, MarshÔs Proposal rec eived the highest score, and it was on

that basis that the Selection Committee Members unanimously

recommended Marsh be presented to the Board as the proposer with which

the Board procurement staff should negotiate and contract for the services

solicited b y the RFP.

62. Almost a month after the completion of the Selection CommitteeÔs

work, and unanimous vote to recommend the Marsh Proposal to the Board,

the BoardÔs procurement staff emailed Marsh to inquire regarding an

application of a cap on the commissio ns proposed by Marsh. MarshÔs response

indicated MarshÔs willingness to be subject to such a cap.

63. Ron Steiger, as the BoardÔs Chief Financial O fficer , was responsible for

presenting the Selection CommitteeÔs recommendation to the BoardÔs fiscal

committ ee members and the BoardÔs governing body. The cap inquiry to

Marsh occurred simply because Mr. Steiger, based on his experience with

those various members, anticipated that some of them may be interested in

whether Marsh would be open to including a cap o n property insurance

commissions in the contract to be ultimately entered into between the Board

and Marsh.

64. Notably, Mr. Steiger explained that MarshÔs response to the inquiry

would not affect the recommendations to the B oard. If Marsh responded by

say ing it was not open to a cap on commissions, Mr. Steiger intended to

explain that costs could be Ñmanaged through the budget process.Ò If Marsh

responded by expressing a willingness to agree to a cap, then the issue of a

cap could be the subject of the neg otiations that would take place following

provision by the BoardÔs governing body of the authorizations being sought.

65. In any event, the Agenda Item prepared for presentation to the

BoardÔs fiscal committee and the BoardÔs governing body included no men tion

of a cap on property insurance commission s in MarshÔs Proposal, nor any

mention of MarshÔs willingness to agree to such a cap. The fact that the

Selection CommitteeÔs scores were provided based on the express direction

that they had to Ñtake into cons iderationÒ the absence of a property insurance

cap in the Marsh Proposal, combined with the absence of any mention of such

a cap in the Agenda Item , reflects the fact that the Selection CommitteeÔs

recommendations were not predicated upon inclusion of such a cap in

MarshÔs Proposal .

66. AJG failed to establish that the Selection CommitteeÔs

recommendations were arbitrary, capricious, clearly erroneous , or contrary to

competition.

C ONCLUSIONS OF L AW

67 . DOAH has personal and subject matter jurisdiction in t his proceeding

pursuant to sections 120.569 and 120.57(1) and (3), Florida Statutes.

68 . Pursuant to section 120.57(3)(f), the burden of proof rests with AJG as

the party opposing the proposed agency action. State Contracting & Eng'g

Corp. v. Dep't of Tra nsp. , 709 So. 2d 607, 609 (Fla. 1st DCA 1998). AJG must

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

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

69. Section 120.57(3)(f) provides , in part , as follow s:

Unless otherwise provided by statute, the burden of

proof shall rest with the party protesting the

proposed agency action. In a competitive

procurement protest, other than a rejection of all

bids, proposals, or replies, the administrative law

judge sha ll conduct a de novo proceeding to

determine whether the agency's proposed action is

contrary to the agency's governing statutes, the

agency's rules or policies, or the solicitation

specifications. The standard of proof for such

proceedings shall be whethe r the proposed agency

action was clearly erroneous, contrary to

competition, arbitrary, or capricious.

70. An arbitrary decision is one that is not supported by facts or logic, or is

despotic. See Agrico Chemical Co. v. State Dep Ô t of Envtl . Reg . , 365 So. 2d 759

(Fla. 1st DCA 1978). Under the arbitrary or capricious standard, "an agency

is to be subjected only to the most rudimentary command of rationality. The

reviewing court is not authorized to examine whether the agency's empirical

conclusions have sup port in substantial evidence.Ò Adam Smith Enter s. , Inc.

v. State Dep Ô t of Envtl . Reg . , 553 So. 2d 1260 (Fla. 1st DCA 1989); see also

Dravo Basic Materials Co., Inc. v. State Dep Ô t of Transp. , 602 So. 2d 632, 634

n.3 (Fla. 2d DCA 1992) ("If an administrativ e 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 . ").

71. FloridaÔs District Court of Appeal articulated the Ñcapri ciousÒ standard

as follows:

A capricious action is one which is taken without

thought or reason or irrationally. An arbitrary

decision is one not supported by facts or logic, or

despotic. Administrative discretion must be

reasoned and based upon competent substantial

evidence. Competent substantial evidence has been

described as such evidence as a reasonable person

would accept as adequate to support a conclusion.

Agrico Chemical Co. , 365 So. 2d at 763.

72. The Ñclearly erroneousÒ standard has been explai ned by the Florida

Supreme Court as follows:

A finding of fact is clearly erroneous when,

although there is evidence to support such finding,

the reviewing court upon reviewing the entire

evidence is left with the definite and firm

conviction that a mista ke has been committed. This

standard plainly does not entitle a reviewing court

to reverse the finding of the trier of fact simply

because it is convinced that it would have decided

the case differently. Such a mistake will be found to

have occurred where findings are not supported by

substantial evidence, are contrary to the clear

weight of the evidence, or are based on an

erroneous view of the law. Similarly, it has been

held that a finding is clearly erroneous where it

bears no rational relationship to t he supporting

evidentiary data, where it is based on a mistake as

to the effect of the evidence, or where, although

there is evidence which if credible would be

substantial, the force and effect of the testimony

considered as a whole convinces the court th at the

finding is so against the great preponderance of the

credible testimony that it does not reflect or

represent the truth and right of the case.

Dorsey v. State , 868 So. 2d 1192, 1209 n.16 (Fla. 2003).

73. To establish that the actions challenged in this proceeding are

Ñcontrary to competition , Ò AJG must establish that those actions, at a

minimum:

(a) create the appearance of and opportunity for

favoritism;

(b) erode public confidence that contracts are

awarded equitably and economically;

(c) caus e the procurement process to be genuinely

unfair or unreasonably exclusive; or

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

74. The specifications of the RFP and its addenda were never challenged.

Therefore, AJG waived any challenges to those sp ecifications. See

§ 120.57(3)(b), Fla. Stat.

75. Section 5 of the RFP established the criteria that a proposer had to

satisfy to qualify for review. While a proposerÔs failure to satisfy other RFP

requirements might negatively impact scores assigned to the proposerÔs

proposal, only a failure to satisfy the requirements of Section 5 would,

pursuant to the terms of the RFP, disqualify a proposer from review.

76. AJG has failed to provide any evidence that the Marsh Proposal failed

to satisfy any of the requir ements in Section 5 of the RFP. Therefore, AJG

has failed to satisfy its burden to establish that the BoardÔs determination

that MarshÔs Proposal was responsive to the RFP was arbitrary, capricious,

clearly erroneous , or contrary to competition .

77. AJGÔs contentions that MarshÔs Proposal deviated from sections of the

RFP other than Section 5, based upon provisions in the Marsh sample

agreement , must also fail.

7 8. Marsh did not, in its proposal, refuse to be bound by the terms of the

RFP sample agreement . To the contrary, Marsh expressly certified its

agreement to be bound by the terms of the RFP sample agreement , while also

expressing a willingness to negotiate with the Board to include Ñadditional

terms and conditions as may be usefulÒ in a contract with the Board.

79. MarshÔs Proposal did not deviate from the insurance and

indemnification provisions in the RFP. Once again, AJGÔs arguments

concerning MarshÔs alleged failure to comply with those RFP provis ions are

based solely on the Marsh sample agreement . The Board re asonably

determined that the Marsh sample agreement was, as the watermark on

each pag e of the Marsh sample agreement states, a Ñsample,Ò and that Marsh

agreed to be bound by the terms of the RFP .

80. AJG contends that Marsh proposed to charge the Board extra for

certain services identified by the RFP as Ñrequired services.Ò Once again, the

evidence offered by AJG in support of its argum ent is limited solely to the

Marsh sample agreement . The uncontroverted testimony at the final hearing

was tha t MarshÔs Cost Proposal include d all RFP - required services.

81. AJG failed to prove that the BoardÔs determinations , regarding

MarshÔs agreement to be bound by the terms of the RFP sample agreement ,

were arbitrary, capricious, clearly erroneous , or contrar y to competition.

82. AJGÔs allegation that Marsh changed its proposal after the bid opening

is simply erroneous, as is its contention that the Selection CommitteeÔs

recommendations to the Board were based upon the alleged change. The

Selection Committee M embers were specifically made aware -- and

acknowledged -- that their scoring and recommendation were required to be

based solely on the proposersÔ proposals and oral presentations. AJG failed to

carry its burden to demonstrate that the determinations were arb itrary,

capricious, clearly erroneous , or contrary to competition based upon an

alleged change to MarshÔs Cost Proposal .

83. In sum, AJG has failed to carry its burden to establish that the Marsh

P roposal was non - responsive or that any challenged determina tions or

actions by the Board were arbitrary, capricious, clearly erroneous , or contrary

to competition .

R ECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

R ECOMMENDED that the Miami - Dade County School Board enter a f inal o rder

that adopts the foregoing Findings of Fact and Conclusions of Law , upholds

the challenged r ecommendations , and awards a contract, pursuant to the

RFP, to Intervenor Marsh.

D ONE A ND E NTERED this 13th day of January , 2021 , in Tallahassee, Leon

County, Florida.

S

M ARY L I C REASY

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 13th day of January , 2021 .

C OPIES F URNISHED :

Elizabeth L. Pedersen, Esquire

Panza, Maurer & Maynard, P.A.

Coastal Towers, Suite 905

2400 East Commercial Boulevard

Fort Lauderdale, Florida 33308

(eServed)

Vi rginia Cambre Dailey, Esquire

Panza, Maurer & Maynard, P.A.

201 East Park Avenue , Suite 200

Tallahassee, Florida 32301

(eServed)

Jeff James, Esquire

The School Board of Miami - Dade County , Florida

1450 Northeast Second Avenue , Suite 430

Miami, Florida 33 132

(eServed)

David C. Ashburn, Esquire

Greenberg Traurig, P.A.

101 East College Avenue

Post Office Drawer 1838

Tallahassee, Florida 32301

(eServed)

Michael J. Cherniga, Esquire

Greenberg Traurig, P.A.

101 East College Avenue

Post Office Drawer 1838

Ta llahassee, Florida 32301

(eServed)

Jose F. Diaz, Esquire

Panza, Maurer & Maynard, P.A.

Coastal Towers, Suite 905

2400 East Commercial Boulevard

Fort Lauderdale, Florida 33308

(eServed)

Sara M. Marken, Esquire

The School Board of Miami - Dade County , Flor ida

1450 Northeast Second Avenue , Suite 430

Miami, Florida 33132

(eServed)

Alberto M. Carvalho, Superintendent

The School Board of Miami - Dade County , Florida

1450 Northeast Second Avenue, Suite 912

Miami, Florida 33132

Matthew Mears, General Counsel

De partment of Education

Turlington Building, Suite 1244

325 West Gaines Street

Tallahassee, Florida 32399 - 0400

(eServed)

N OTICE OF R IGHT T O S UBMIT E XCEPTIONS

All parties have the right to submit written exceptions within 1 0 days from

the date of this Re commended Order. Any exceptions to this Recommended

Order should be filed with the agency that will issue the Final Order in this

case.