95-000290BID Jack Richer And J. D. Raymond, Trustees, And Winewood Park Limited vs. Department Of Health And Rehabilitative Services Status: Closed Recommended Order on Friday, May 5, 1995.

Summary: Intervenor's Bid was not responsive, lacked standing to challenge award of lease by HRS to Winewood.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JACK RICHER and J.D. RAYMOND, )

as Trustees, and WINEWOOD PARK )

LIMITED, a Florida Limited )

Partnership, )

)

Petitioners, )

)

vs. ) CASE NO. 95-0290BID

)

STATE OF FLORIDA, DEPARTMENT OF )

HEALTH AND REHABILITATIVE )

SERVICES, )

)

Respondent, )

and )

)

O.C. ALLEN/WALTON PROPERTIES, )

)

Intervenor. )

__________________________________)

RECOMMENDED ORDER

The final hearing in this case was held before Larry J. Sartin, Hearing

Officer, on February 27, 1995, March 1 and 14-15, 1995, in Tallahassee, Florida.

APPEARANCES

For Petitioners: J. Michael Huey, Esquire

William E. Williams, Esquire

Rex D. Ware, Esquire

Huey, Guilday & Tucker, P.A.

Post Office Box 1794

Tallahassee, Florida 32302

and

Benjamin K. Phipps, Esquire

George Hamm, Esquire

ADORNO & ZEDER, P.A.

Post Office Box 1351

Tallahassee, Florida 32302

For Respondent: William A. Frieder

Assistant General Counsel

Department of Health and

Rehabilitative Services

Building E, Suite 200

1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

For Intervenor: O. C. Allen, pro se

O. C. Allen/Walton Properties

Post Office Box 10572

Tallahassee, Florida 32302

STATEMENT OF THE ISSUE

The issue in this case is whether Intervenor's bid for Lease No. 590:2572

was response to the requirements of Respondent's Invitation to Bid.

PRELIMINARY STATEMENT

On or about November 11, 1994, Respondent, the Department of Health and

Rehabilitative Services, issued an "Invitation to Bid for Existing Facilities,

Lease Nos. 590:2572 and 590:2573." Petitioners, Jack Richer and J. D. Raymond,

as Trustees, and Winewood Park Limited, a Florida Limited Partnership, submitted

a bid in response to the Invitation to Bid on both leases. Intervenor, O. C.

Allen/Walton Properties submitted a bid in response to the Invitation to Bid on

Lease No. 590-2572.

Petitioners and Intervenor were notified by certified letters in December

of 1994 that Respondent was rejecting all bids.

On or about January 3, 1995, Petitioners filed a Notice of Intent to

Protest the Department's decision. On or about January 12, 1995, Petitioners

filed a Formal Notice of Protest challenging Respondent's decision. On January

24, 1995, the protest was filed with the Division of Administrative Hearings by

Notice of Referral and Notice to Bidders from Respondent. Respondent requested

assignment of the protest to a Hearing Officer.

The protest was designated case number 95-290BID and was initially assigned

to Hearing Officer Ella Jane P. Davis. Prior to the final hearing, the matter

was assigned to the undersigned.

The final hearing was originally scheduled to commence February 20, 1995 by

Notice of Hearing entered February 1, 1995. The hearing was continued until

February 27, 1995, by an Order entered February 20, 1995.

A Motion for Leave to File Amended Formal Protest was filed on February 22,

1995. The Motion was granted.

Prior to the filing of this matter by Respondent with the Division of

Administrative Hearings, Intervenor filed a Petition for Leave to Intervene. A

second copy of the Petition for Leave to Intervene was filed on January 24,

1995. Intervention was granted by an Order entered February 9, 1995.

At the final hearing Petitioners presented the testimony of James P.

Hughes, H. James Towey, Gregory L. Coler, Carl Graham, Lowell L. Clary, Wayne

Clotfelter, Linda Meml, Randall C. Baker and Mary Goodman. Petitioners

exhibits 1-9, 12-13, 16-18 and 20 were offered and accepted into evidence.

Official recognition of Section 216.044, Florida Statutes, and Chapters

60H-1 and 60H-2, Florida Administrative Code, was taken at the request of

Petitioners.

Intervenor presented the testimony of Mary Goodman, Carl Graham, Randall C.

Baker, Bill Baldwin and Bob Ryals. Intervenor also presented the deposition

testimony of William Sabella. Mr. Sabella's deposition was taken and filed

after the adjournment of the final hearing by agreement of the parties.

Intervenor offered nine exhibits. Intervenor's exhibits 1, 6, 7 and 8 were

accepted into evidence. Intervenor's exhibits 2, 3 and 5 were rejected. A

ruling on Intervenor's exhibits 4 and 9 was withheld. Intervenor's exhibits 4

and 9 are accepted into evidence for impeachment purposes only.

Respondent called no witnesses. Respondent offered three exhibits which

were accepted into evidence. Respondent's exhibit 2 is the deposition testimony

of Jeffrey Poole.

On April 10, 1995, Respondent filed a Motion to Dismiss Intervenor, to

Bifurcate Issues, and for Expedited Order on Issue of Standing. Argument on the

motion was heard by telephone. Respondent informed the undersigned that

Petitioners and Respondent might be able to resolve their dispute if Intervenor

were dismissed from this proceeding for lack of standing. After hearing

argument on the issue, the parties were informed that dismissal of Intervenor,

if appropriate, would require the issuance of a Recommended Order. The parties

were also informed that, based upon the evidence presented in this matter, it

appeared that Intervenor had not submitted a responsive bid. Respondent was

informed that, despite the comments of the undersigned, it was possible that

Intervenor would be found to have filed a responsive bid when the Recommended

Order was actually written because of the more thorough review involved in

writing this Recommended Order.

On April 25, 1995, Respondent filed a Joint Stipulation and Request for

Recommended Order. Respondent reported that Petitioners and Respondent have

amicably resolved their dispute and were desirous of entering into lease

agreements attached to the Stipulation. Respondent suggested that the only

issue which remained to be resolved in this proceeding was whether Intervenor's

bid submission was responsive and, therefore, whether Intervenor has standing.

Respondent, therefore, requested that a Recommended Order be entered disposing

of the issue of the responsiveness of Intervenor's bid submission.

On April 28, 1995, Intervenor filed Intervenor's Notice of Intent to

Respond to Joint Stipulation and Request for Recommended Order.

On May 2, 1995, an Amended Joint Stipulation and Request for Recommended

Order was filed. The only change in the Amended Joint Stipulation was to

indicate the date of service of the pleading.

On May 3, 1995, Intervenor filed Intervenor's Request for Recommended Order

apparently in response to the Joint Stipulation and Request for Recommended

Order.

Respondent filed a Motion to Strike Intervenor's Response to Joint

Stipulation.

To the extent that Intervenor and Respondent have requested that a

Recommended Order be entered, their requests are granted. To the extent that

any other relief has been requested by Intervenor or Respondent, their requests

are denied. The Motion to Strike Intervenor's Response to Joint Stipulation is

also denied.

The transcript of the final hearing was filed on April 6 and 10, 1995.

During the motion hearing conducted April 10, 1995, it was agreed that the

parties would file proposed orders on or before April 20, 1995. An extension

until April 25, 1995 to file proposed orders was subsequently requested and

granted.

The parties have all filed proposed orders containing proposed findings of

fact. A ruling on each proposed finding of fact has been made either directly

or indirectly in this Recommended Order or the proposed finding of fact has been

accepted or rejected in the Appendix which is attached hereto.

FINDINGS OF FACT

A. The Parties.

1. Petitioners, Jack Richer and J. D. Raymond, as Trustees, and Winewood

Park Limited, a Florida Limited Partnership (hereinafter referred to as

"Winewood"), are the owners of office buildings known as Winewood Office Park.

2. Respondent, the Florida Department of Health and Rehabilitative

Services (hereinafter referred to as the "Department"), is an agency of the

State of Florida.

3. Intervenor, O. C. Allen/Walton Properties, is a name used by O. C.

Allen, an individual, to submit a bid to the invitation to bid which is the

subject of this dispute.

B. The Department's Invitation to Bid.

4. The Department's headquarters are located in Tallahassee, Florida.

5. The Department is the primary tenant of office buildings in Winewood

Office Park. The Department occupies the offices pursuant to Lease No.

590:1634. Winewood is the lessor under the leases.

6. The Department's current lease will expire on June 30, 1995.

7. On or about November 11, 1994, the Department issued "Invitation to Bid

for Existing Facilities, Lease Nos. 590:2572 and 590:2573," (hereinafter

referred to as the "ITB"). See Petitioners' exhibit 2.

8. Through the ITB, the Department sought two leases for a total of

292,054 net leasable square feet of office space.

9. The Department sought 126,865 net leasable square feet of office space

for the offices of the Department's Administration and Secretary under proposed

Lease No. 590:2572 (hereinafter referred to as the "Administration Lease").

10. The Department also sought 165,189 net leasable square feet of office

space for the offices of the Department's Health and Programs under proposed

Lease No. 590:2573 (hereinafter referred to as the "Programs Lease").

11. Potential bidders were invited to submit proposals on either or both

of the proposed leases.

C. Responses to the ITB.

12. Winewood submitted a bid in response to the ITB for the Administration

and the Programs Leases. Petitioner's exhibit 2. Winewood offered office space

in Winewood Office Park for both proposed leases.

13. Mr. Allen submitted a bid in response to the ITB for the

Administration Lease. Respondent's exhibit 3. Mr. Allen offered space in a

building currently occupied by Kmart, located at 1700 North Monroe Street,

Tallahassee, Florida. Mr. Allen proposed renovating the property if awarded the

Administration Lease.

D. The Department's Review and Rejection of the Bid

Submissions.

14. Bid submissions were received and opened on December 13, 1994.

15. Initially, the Petitioners' and Mr. Allen's bid submission were

reviewed for responsiveness by Carl Graham, Assistant Staff Director, Central

Support Services of the Department, and Ken McLane, General Services Specialist

of the Department.

16. Mr. Graham was designated by the Department to determine responsive of

bids submitted in response to the ITB. The designation of Mr. Graham to decide

whether bid submittals were responsive was reasonable.

17. Winewood's bid submission was determined to be responsive to the

requirements of the ITB. Winewood's proposed rental rate was also determined to

be within the maximum rental rate or "zone rate" of $16.75 per square foot

established by the Department of Management Services for Leon County, Florida,

for privately owned rental space.

18. Mr. Allen's bid submission was determined to be nonresponsive. The

specific reasons for determining that Mr. Allen's bid submission nonresponsive

are discussed, infra.

19. After initially determining that Mr. Allen's bid submission was

nonresponsive, Mr. Graham met with the Department of Management Services to

discuss his conclusions.

20. Winewood's bid submission was then provided to the Department's

evaluation committee as contemplated by the ITB. The evaluation committee

reviewed Winewood's submission pursuant to the terms of the ITB and scored it.

21. Mr. Allen's bid submission was not provided to the evaluation

committee for review because it was nonresponsive.

22. The evaluation committee concluded that Winewood's bid submission was

the lowest and best responsive bid to the ITB. The evidence failed to prove

that this conclusion was fraudulent, arbitrary, illegal or dishonest.

23. The Department reserved the right in a paragraph of the ITB entitled

"Rejection of Bids" to reject bid submissions under the following circumstances:

1. The department reserves the right to

reject any and all bids when such rejection

is in the interest of the State of Florida.

Such rejection shall not be arbitrary, but

be based on strong justification which shall

be communicated to each rejected bidder by

certified mail. [Emphasis in original].

Petitioners' exhibit 2, page 11 of the ITB. See also Rule 60H-1.015(5)(a),

Florida Administrative Code.

24. Secretary Towey concluded that it would not be in the best interest of

the State to award any bids pursuant to the ITB.

25. On December 21, 1994 and December 22, 1994, the Department advised Mr.

Allen and Winewood, respectively, by letter of Secretary Towey's decision and

that all bids submitted in response to the ITB were rejected.

E. The Department's Determination of Nonresponsiveness of

Mr. Allen's Bid Submission.

26. The Department provided the following with regard to whether a bid

submission was responsive to the ITB:

EVALUATION OF BIDS

1. Bids received are first evaluated to

determine technical responsiveness; this

includes submittal on bid submittal form,

inclusion of required information, data,

attachments, signatures, etc. Nonresponsive

bids will be withdrawn from further consideration.

Nonresponsive bidders will be informed immediately

by certified mail. [Emphasis in original].

Petitioners' exhibit 2, page 7 of the ITB.

27. In a paragraph in the ITB entitled "Preparation and Submission of

Bids," it was provided that " . . . [a]ll documentation requested is to be

prepared and submitted with the bid submittal." Petitioners' exhibit 2, page 5

of the ITB.

28. The ITB also provided that not all irregularities in a bid submission

would result in rejection for nonresponsiveness:

4. The department reserves the right to waive

any minor informalities or technicality and seek

clarification of bids received, when such is in

the best interest of the state, but not limited

to the correction of simple mistakes or typo-

graphical errors. Such corrections will be

initiated (and [sic] dated on the original bid

submittal by the bidder.

Petitioners' exhibit 2, pages 11-12 of the ITB.

29. On page 13 of the ITB, a list of documentation to be submitted with

all bid submittals was listed. At the top of the list, it is provided that

"[i]n order for a bid proposal to be accepted, the items 1 through 6 must be

included in the bid proposal. Items 7 through 11 must be included, if

applicable." Petitioners' exhibit 2, page 13 of the ITB>

30. The Department, through Mr. Graham, determined that Mr. Allen's bid

submission was nonresponsive for the following reasons:

a. Mr. Allen's proposed rate of rental was in excess of ten percent of the

maximum zone rate for Tallahassee;

b. Mr. Allen failed to submit a "floor plan";

c. Mr. Allen failed to submit a certification of a registered structural

engineer concerning live load capacity;

d. Mr. Allen failed to submit a written statement by the existing tenant

of the proposed property acknowledging the lessor's bid and the tenant's consent

to vacate the proposed premises by the proposed occupancy date or earlier;

e. Mr. Allen failed to submit a certificate concerning debarment; and

f. Mr. Allen failed to submit satisfactory evidence that he controls the

proposed lease property.

F. Mr. Allen's Proposed Rental Rate Exceeded the Acceptable

Zone Rate.

31. The maximum rental rates, or zone rates, for agency leases of

privately owned office space are established twice annually in accordance with

Rule 60H-1.030, Florida Administrative Code.

32. For the relevant period of time and type lease involved in this

matter, the maximum rental rate was $16.75 per square foot.

33. Mr. Allen's bid submittal proposed a rental rate of $22.00 per square

foot. Mr. Allen's proposed rental rate is more than ten percent in excess of

the maximum rental rate established by the Department of Management Services for

Leon County, Florida.

34. While the ITB specifies that bidders are required to be familiar with

all relevant laws that affect the subject leases, the ITB does not specify that

rental rates must be consistent with the maximum rental rate established for

Leon County in order to be considered responsive.

35. The fact that Mr. Allen's bid submittal rental rate is excessive may

have been grounds to ultimately reject Mr. Allen's bid, but it does not

establish that his bid submittal was nonresponsive.

G. Mr. Allen Failed to Submit a Floor Plan Consistent with

the Requirements of the ITB

36. Among the documents listed on page 13 of the ITB which were required

to be submitted was a Bid Submittal Form. Petitioners' exhibit 2, page 13 of

the ITB. The Bid Submittal Form to be completed and submitted by bidders was

attached to the ITB. Petitioners' exhibit 2.

37. On page 1 of the Bid Submittal Form, paragraph 1, the net square

footage sought is provided. In this regard, bidders were informed that net

square footage would be determined as follows:

Measured in accordance with the Standard Method

of Space Measurement (Attachment A). NOTE:

Restrooms and mechanical rooms are not included

in calculating net rentable square footage.

Petitioners' exhibit 2, page 1 of the Bid Submittal Form.

38. The ITB informed bidders that the Department was required to be

provided information necessary for the Department, not an engineer or architect,

to measure the net rentable square footage (as that term is defined in the ITB).

In this regard, bidders were informed of the following "Standard Method of Space

Measurement":

All usable (rentable) office space, lease or

state-owned, shall be computed by:

Measuring to the inside finish of permanent

outer building wall to the office side of

corridors and/or other permanent partitions,

and to the center of partitions that separate

the premises from adjoining usable areas. This

usable (rentable) area shall EXCLUDE: bathroom,

stairs, elevator shafts, flues, pipe shafts,

vertical ducts, air-conditioning rooms, fan rooms,

janitor closets, elect closets -- and such other

rooms not actually available to the tenant for

his furnishings and personnel -- and their

enclosing walls.

Petitioners' exhibit 2, Attachment A to the Bid Submittal Form, page 26.

39. The Bid Submittal Form required that bidders provide a calculation of

the net rentable square footage available using measurements from a scaled floor

plan showing the present configurations with measurements:

9. As part of the bid submittal, bidders are

to provide:

* * *

b) A scaled (1/16" or 1/8" or 1/4" = 1'0")

floor plan showing present configurations with

measurements. The final floor plan will be as

described in the bid specifications. [Emphasis

in original].

c) Calculation of the net rentable square

footage available using measurements from the

floor plan. Refer to Attachment A, Standard

Method of Space Measurement.

* * *

Petitioners' exhibit 2, page 3 of the Bid Submittal Form.

40. Bidders were also informed that they were required to submit the

following:

* * *

_____4. Floor Plan showing present layout

with dimensions. See paragraph 10B

of Bid Submittal Form.

Petitioners' exhibit 2, page 13 of the ITB.

41. An example of a floor plan, which was described as the "typical floor

plan", illustrating the application Standard Method of Space Measurement was

attached to Attachment A of the Bid Submittal Form. The example of a typical

floor plan provided shows the various features described in the Standard Method

of Space Measurement which were required to be taken into account in measuring

net rentable square footage. Nowhere in Mr. Allen's bid submission is there a

drawing which follows this example or even provides the information necessary to

compile such a drawing.

42. Mr. Allen did not submit a scaled floor plan showing the present

layout with dimensions of the office space he proposed.

43. Mr. Allen submitted two "site plans" showing "existing conditions" and

"proposed conditions". A site plan is a drawing showing the location of

buildings, parking, roads, landscaping, and other features of a parcel of

property.

44. Mr. Allen's site plans met the requirement found on page 13 of the Bid

Submittal Form that a "Site Layout with all parking spaces and utilization of

spaces shown" be submitted.

45. The site plans are drawn to a 1 inch equals 50 feet scale.

Respondent's exhibit 3. The site plans submitted by Mr. Allen do not delineate

the location of "pipe shafts, vertical ducts, air-conditioning rooms, fan rooms,

janitor closets, elect closets -- and such other rooms not actually available

to the tenant for his furnishings and personnel -- and their enclosing walls."

Nor do the site plans delineate the location of columns, entries, exists or rest

rooms.

46. With regard to the building, the site plans submitted by Mr. Allen

show only its "footprint". The footprint of the building is the building's

exterior walls only.

47. The site plans submitted by Mr. Allen are not floor plans. More

importantly, the site plans are insufficient for the Department to determine,

consistent with the Standard Method of Space Measurement, whether the amount of

space Mr. Allen offered was consistent with the amount of space sought by the

ITB.

48. While gross square footage may be calculated from the site plans

submitted by Mr. Allen, net square footage as defined in the ITB, which is what

the Department was looking for, cannot be determined.

49. Mr. Allen also submitted a document entitled "Fleet 4.0 Data

Submittal." This document was submitted as part of a Life Cycle Cost Analysis

required to be provided by bidders. See Petitioners' exhibit 2, page 13 of the

Bid Submittal Form. Attached to the document is a drawing of the building

footprint. The scale of the drawing is one inch equals fifty feet. The

document is not a floor plan. It suffers from the same deficiencies as the site

plans submitted by Mr. Allen.

50. Mr. Allen failed to provide sufficient information as required by the

ITB so that the Department could calculate net rentable square footage, not as

defined generally by an architect, but as specifically defined in the ITB.

H. Mr. Allen Failed to Submit a Certification from a

Florida Registered Structural Engineer.

51. Another document required to be submitted with bid submissions listed

on page 4 of the Bid Submittal Form was the following:

d) Bids offering multi-story buildings must

meet the Building Code minimum of 50 pounds per

square foot live load and be certified of a

registered State of Florida structural engineer.

[Emphasis in original].

Petitioners' exhibit 2, page 4 of the Bid Submittal Form.

52. Mr. Allen's proposal offered a multi-story building.

53. Mr. Allen did not include a certificate of a registered State of

Florida structural engineer that the building will meet the Building Code

minimum of 50 pounds per square foot live load.

I. Mr. Allen Failed to Submit Written Documentation from an

Existing Tenant.

54. The Bid Submittal Form required the following with regard to existing

tenants:

EXISTING TENANTS: If the offered space or any

portion thereof (including parking areas) is at

present occupied or will be covered by an active

lease(s) at the stated availability date, written

documentation by the tenant indicating acknow-

ledgment of the lessor's bid and ability to vacate

premises by the proposed date or earlier to allow

lessor's renovation work to be completed must be

included the bid submittal.

BIDDER RESPONSE: (Check where appropriate)

____ Existing tenant

acknowledgment included

as a part of this bid

proposal.

____ Not applicable.

Petitioners' exhibit 2, page 5 of the Bid Submittal Form.

55. On Mr. Allen's bid submission the space next to "Not applicable" was

checked.

56. The property offered by Mr. Allen, however, is currently occupied by

existing tenants. Photographs submitted by Mr. Allen as part of his bid

submission show the existence of the present tenant, Kmart.

57. Mr. Allen did not, however, provide any written documentation from

Kmart acknowledging the ability to vacate the premises by the proposed date or

earlier to allow lessor's renovation work to be completed.

J. Mr. Allen Failed to Submit Certification Regarding

Debarment, Suspension, Ineligibility and Voluntary

Exclusion Contracts/Subcontracts.

58. The ITB, page 5, required that Attachment "N", a Certification

Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion

Contracts/Subcontracts, be filed with all bid submissions.

59. Paragraph 23 of the Bid Submittal Form also specified all bidders

"must execute the enclosed (Attachment N)".

60. Mr. Allen did not submit Attachment "N" with his bid submission. Mr.

Allen did not attempt to submit Attachment N until after the final hearing in

this case had commenced.

K. Mr. Allen Failed to Submit Proof of Control of the

Property Submitted for Lease.

61. The ITB, page 3, provided the following concerning control of the

property proposed by a bidder:

1. Control of Property - This pertains to both

the structure(s) and proposed parking areas. To

submit a responsive bid, a prospective lessor must

provide evidence of one of the following qualifi-

cations with the bid:

a) Be the owner of record of the facility and

parking areas and submit a copy of deed(s).

b) Be the lessee of space being proposed and

present with bid, a copy of lease with documentation

of authorization to sublease the facility and parking

areas through the term of the base lease and all

renewal option periods.

c) Submit documentation of an option to purchase

the facility and/or parking areas.

d) Submit documentation of an option to lease the

facility with authorization to in-turn, sublease.

Any lease must encompass the entire time period of

the basic lease and any renewal option periods as

required by the state.

e) Submit notarized documentation of the detailed

trust agreement.

f) Submit documentation of proper zoning (optional).

* * *

Petitioners' exhibit 2, page 3 of the ITB.

62. Mr. Allen failed to submit documentation sufficient to prove that any

of the situations identified in finding of fact 61 apply to Mr. Allen.

63. What Mr. Allen submitted with his bid submission concerning his

involvement with the bid property was a letter dated December 12, 1994, from

Jeffrey M. Poole, Real Estate Department, Kmart Corporation, to Mr. Allen. The

letter provides, in pertinent part, the following:

Further to our negotiations and agreements reached

on the option to sublease our facility per the

above referenced, this is to grant you our firm's

authority to bid same on that State of Florida

Department of Health and Rehabilitative Services

Invitation to Bid on December 13, 1994.

We are in total agreement that written consummation

of those terms which grant you control of our lease-

hold are contingent upon time frames, formalizing

our understandings, and your enjoying success in

your bid proposals of tomorrow. Thank you.

Respondent's exhibit 3.

64. The letter submitted by Mr. Allen is not proof that he is the "owner

of record" of the property, that he is a "lessee of space", that he has, or had

at the time of his bid submission, an "option to lease the facility" or a trust

agreement.

65. The statement in the letter submitted by Mr. Allen to the effect that

Kmart and Mr. Allen have had "negotiations and agreements reached on the option

to sublease" does not indicate that an option to sublease has actually been

entered into.

66. The statement in the letter that Kmart was granting Mr. Allen

"authority to bid" the property is nothing more than an authorization for Mr.

Allen to act as an agent for Kmart.

67. Finally, the second paragraph of the letter submitted by Mr. Allen

indicates that consummation of an agreement of Kmart and Mr. Allen should be

consummated in writing in the future, but even that agreement is contingent upon

reaching further agreement and Mr. Allen "enjoying success in [his] bid

proposals . . . ."

68. Nothing in Mr. Allen's letter from Kmart complies with the

requirements of page 3 of the ITB concerning what was required to be submitted

to show control of the property proposed by Mr. Allen.

L. Mr. Allen's Bid Submission is Nonresponsive.

69. Based upon the foregoing, Mr. Allen's bid submission failed to provide

information and documents specifically required by the ITB to be submitted by

all bidders. The information and documents not provided were all required to be

provided at the time of bid submittal.

70. Mr. Allen did not file a challenge to any of the requirements of the

ITB. Therefore, it is too late for Mr. Allen to question whether requirements

of the ITB which he failed to comply with are reasonable or otherwise must be

complied with.

71. Mr. Allen's bid submittal was nonresponsive for failing to provide the

information and documents discussed, supra, in sections G, H, I, J and K of the

Recommended Order.

72. The failure of Mr. Allen to provide the information and documents was

not a minor irregularity which the ITB allowed the Department to waive. The

failure of Mr. Allen to include any one of the documents discussed, supra, in

sections G, H, I, J and K of the Recommended Order is sufficient to conclude

that Mr. Allen's bid submission was nonresponsive.

M. Procedural Issues.

73. The December 21 and 22, 1994, certified letters from the Department

informing the parties of the rejection of all bids did not include notice that

"Failure to file a protest within the time prescribed in section 125.53(5),

Florida Statutes, shall constitute a waiver of proceedings under Chapter 120,

Florida Statutes."

74. The only agency decision announced in the Department's certified

letters subject to proceedings under Chapter 120, Florida Statutes, was the

decision to reject all bids.

75. On or about January 3, 1995, Winewood filed a Notice of Intent to

Protest the Department's decision to reject all bids. On or about January 12,

1995, Winewood filed a Formal Notice of Protest challenging Respondent's

decision.

76. On January 24, 1995, Winewood's protest was filed with the Division of

Administrative Hearings by Notice of Referral and Notice to Bidders from the

Department.

77. On January 17, 1995, Mr. Allen filed a petition for leave to

intervene. A second copy of the petition was filed on January 24, 1995.

78. Mr. Allen was granted leave to intervene. The Order granting

intervention specifically provided that Intervenor "takes the case as it finds

it, subject to the issues as framed in Winewood's Petition, except that each

party's standing is always at issue and subject to proof at formal hearing."

79. Although Mr. Allen was not notified of his right to challenge the

Department's decision in the certified letter provided to him, Mr. Allen at no

time prior to the conclusion of the final hearing raised the issue. More

importantly, Mr. Allen was able to participate fully in the challenge to the

Department's announced decision in this proceeding as if he had filed a separate

petition.

80. The ITB specifically provides that nonresponsive bidders will be

"informed immediately by certified mail" of the determination that a bid

submission was nonresponsiveness.

81. The Department has not provided notice of nonresponsiveness to Mr.

Allen by certified mail.

82. Mr. Allen first learned that his bid submittal was nonresponsive

during discovery prior to the final hearing of this case. Mr. Allen was

informed, however, early in the proceeding by both Hearing Officers assigned to

this matter that the question of whether he has standing to participate in this

proceeding was an issue, and that the question of his standing depended upon his

ability to prove that he had submitted a responsive bid.

83. Mr. Allen was further put on notice of the issue by pleadings filed by

the Department and through discovery in preparation for the final hearing of

this case.

84. Mr. Allen was given sufficient opportunity to address the issue of

whether his bid submission was responsive and to make preparations to present

evidence on the issue. At no time did Mr. Allen suggest that he was either not

aware of his burden of proof or not able to adequately prepare to meet that

burden.

85. Subsequent to the conclusion of the final hearing of this matter, the

Department and Winewood filed an Amended Joint Stipulation and Request for

Recommended Order. Pursuant to this pleading, the Department reported that

Winewood and the Department have amicably resolved their dispute and are

desirous of entering into lease agreements attached to the Stipulation. The

Department suggested that the only issue which remains to be resolved in this

proceeding is whether Mr. Allen's bid was responsive and, therefore, whether Mr.

Allen has standing.

86. The impact of the Stipulation filed by the Department and Winewood is

to withdraw the Department's rejection of all bids and to award both leases to

Winewood.

CONCLUSIONS OF LAW

A. Jurisdiction.

87. The Division of Administrative Hearings has jurisdiction of the

parties to and the subject matter of this proceeding. Sections 120.53(5) and

120.57(1), Florida Statutes (1993).

B. Burden of Proof.

88. The burden of proof absent a statutory directive to the contrary is on

the party asserting the affirmative of the issue of the proceeding. Antel v.

Department of Professional Regulation, 522 So.2d 1056 (Fla. 5th DCA 1988);

Department of Transportation v. J.W.C. Co. Inc., 396 So.2d 778 (Fla. 1st DCA

1981); and Balino v. Department of Health and Rehabilitative Services, 348 So.2d

249 (Fla. 1st DCA 1977).

89. In this proceeding it was initially Winewood and Mr. Allen that were

asserting the affirmative. With the resolution of the dispute between the

Department and Winewood, the only issue left to be resolve is whether Mr. Allen

submitted a responsive bid. Mr. Allen had the burden of proving that he did

submit a responsive bid. If successful, Mr. Allen could then attempt to prove

that the Department's decision to award the leases to Winewood was fraudulent,

arbitrary, illegal or dishonest.

C. Mr. Allen Failed to Prove that his Bid Submittal

was Responsive.

90. The evidence overwhelmingly established that Mr. Allen's bid

submission did not include all of the documentation and information specifically

required to be submitted by the ITB. It is for this reason that the Department

concluded that Mr. Allen's bid submission was nonresponsive.

91. The determination that Mr. Allen's bid submission did not include all

of the documentation and information required, however, does not end this

inquiry. Not all irregularities in bid submissions or deviations from the terms

of an invitation to bid are considered material enough to require rejection of a

bid submittalopabest Foods, Inc. v. Department of General Services, 493

So.2d 50 (Fla. 1st DCA 1986). See also Rule 60A-1.002(13), Florida

Administrative Code. A deviation from the requirements of an invitation to bid

"is only material if it gives the bidder a substantial advantage over the other

bidders and thereby restricts or stifles competitionopabest Foods at 52.

92. Rule 60A-1.001(30), Florida Administrative Code, defines the terms

"minor irregularity" as:

A variation from the invitation to bid/request

for proposal terms and conditions which does

not affect the price of the bid/proposal, or

give the bidder or offer or an advantage or

benefit not enjoyed by other bidders or offer

or, does not adversely impact the interest of

the agency.

93. Additionally, pursuant to the ITB, the Department reserved the right

to waive any "minor informalities or technicality".

94. The Department concluded that Mr. Allen's deviations from the ITB were

not minor irregularities, informalities or technicalities and concluded that Mr.

Allen's bid submission should be rejected as nonresponsive.

95. The weight of the evidence in this case overwhelming proved that Mr.

Allen's bid submission was nonresponsive to the ITB. The weight of the evidence

also failed to prove that the Department's decision that Mr. Allen's bid

submission was nonresponsive was fraudulent, arbitrary, illegal or dishonest.

See Overstreet Paving Company v. Department of Transportation, 608 So.2d 851

(Fla.. 2d DCA 1992), citing Department of Transportation v. Groves-Watkins

Construction Co., 530 So.2d 912 (Fla. 1988).

D. Standing.

96. Winewood and Mr. Allen were required to prove that they have standing

to participate in this proceeding. In order for Winewood and Mr. Allen to prove

standing, they were required to prove that the Department's proposed decision

would substantially impact them.

97. The evidence in this case proved that Winewood had standing to

challenge the Department's initial decision to reject all bids. The evidence

proved that Winewood's bid submission was responsive and determined to be the

lowest and best bid. The only reason advanced by the Department for not

awarding the leases to Winewood was the decision to reject all bids. Winewood

was, therefore, substantially affected and subject to injury by the Department's

decision.

98. The evidence failed to prove that Mr. Allen's bid submission was

responsive to the ITB. Therefore, the decision to reject all bids had no impact

on Mr. Allen. Mr. Allen, therefore, lacked standing to challenge the

Department's initial decision to reject all bids. See Preston Carroll Company

v. Florida Keys Aqueduct Authority, 400 So.2d 524 (Fla. 3d DCA 1981).

99. The Department has now withdrawn its decision to reject all bids and

decided that Winewood should be awarded the leases to be awarded pursuant to the

ITB. Mr. Allen also failed to prove that he has standing to challenge that

decision because he failed to submit a responsive bid.

100. One final point concerning standing should be addressed. The effect

of the Department's decision to withdraw its rejection of all bids and its

decision that Mr. Allen's bid was nonresponsive. Had the Department initially

decided to accept the Winewood bid submissions rather than rejecting all bids,

the Department presumably would have notified Mr. Allen of that determination.

101. The decision to reject Mr. Allen's bid for nonresponsiveness does

substantially affect Mr. Allen. Mr. Allen, therefore, does have standing to

challenge the Department's decision to reject his bid for nonresponsiveness. He

was given a fair and adequate opportunity to challenge the Department's decision

and he failed to prove, as concluded supra, that the Department's decision was

fraudulent, arbitrary, illegal or dishonest.

E. Adequacy of the Department's Notice of Rejection of All

Bids.

102. While the Department failed to provide notice of the impact of its

decision to reject all bids in the certified letter sent to Mr. Allen, the

evidence failed to prove that Mr. Allen was in anyway prejudiced or denied the

right to a fair hearing on the decision announced in the letter.

E. The Department's Failure to Provide Written

Notice of Its Conclusion that Mr. Allen's Bid was

Nonresponsive.

103. When the decision to reject all bids was made by the Department, it

was not necessary to provide notice to Mr. Allen that it had determined that his

bid submission was nonresponsive. Mr. Allen was required, regardless of the

Department's decision, to prove his standing, which included the filing of a

responsive bid, in order to challenge the decision to reject all bids.

104. Therefore, the failure to notify Mr. Allen that his bid submission

was nonresponsive was of no consequence. Mr. Allen, whether notified of the

Department's decision or not, was required to prove that his response was in

fact responsiveness.

105. Additionally, even if it could be concluded that it was error not to

have notified Mr. Allen of the conclusion that his bid was nonresponsive, the

evidence proved that Mr. Allen had actual notice in sufficient time prior to the

final hearing for him to adequately prepare to address the issue.

106. Although the Department's proposed agency action changed after the

hearing to a decision to award the leases to Winewood, the issue of whether Mr.

Allen's bid submission was responsiveness did not change.

107. If there were any validity to Mr. Allen's argument that he should be

provided with notice by certified mail that his bid submission was

nonresponsive, the Department would be required to provide such notice, Mr.

Allen could then challenge that decision and a second hearing addressing the

same issue addressed in this hearing would be conducted. A second hearing would

only serve to cause prejudice to all the parties, including Mr. Allen, by

requiring the relitigation of an issue already fairly and adequately addressed.

RECOMMENDATION

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

RECOMMENDED that a final order be entered by the Department of Health and

Rehabilitative Services finding that the O.C. Allen/Walton Properties bid

submission was nonresponsive and dismissing O.C. Allen/Walton Properties from

this proceeding.

DONE AND ENTERED this 5th day of May, 1995, in Tallahassee Florida.

___________________________________

LARRY J. SARTIN, Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 5th day of May, 1995.

APPENDIX

The parties have submitted proposed findings of fact. It has been noted

below which proposed findings of fact have been generally accepted and the

paragraph number(s) in the Recommended Order where they have been accepted, if

any. Those proposed findings of fact which have been rejected and the reason

for their rejection have also been noted.

Winewood's Proposed Findings of Fact

1 Accepted in 1 and 5.

2 Accepted in 7-11.

3 Hereby accepted.

4 Accepted in 14 and hereby accepted.

5 Accepted in 12-13.

6 Accepted in 26 and hereby accepted.

7 Accepted in 27.

8 Accepted in 28.

9 Accepted in 15.

10 Accepted in 17.

11 Accepted in 20 and 22.

12 Accepted in 18 and 21.

13 Accepted in 38, 71-72 and hereby accepted.

14 Accepted in 39 and 41.

15 Accepted in 42-43, 45, 47-48 and 50.

16 Accepted in 51-53.

17 Accepted in 54 and 56-57.

18 Accepted in 58-60.

19 Accepted in 61-68.

20 The decision in this matter must be based upon information provided

in the bid submissions. Evidence concerning whether Mr. Allen will provide

interior walls in compliance with the requirements of the ITB was not included

as part of his bid submission. Therefore, that evidence cannot be taken into

account in determining whether his bid submission was responsive with regard to

the walls he was proposing. The evidence concerning this matter is, however,

relevant and has been considered in concluding that Mr. Allen's response was

nonresponsive with regard to the floor plan. Had Mr. Allen provided a floor

plan as required by the ITB, the Department would have been aware that Mr. Allen

was proposing a building that would not comply with the requirement that all

interior walls be ceiling to floor.

21 Accepted in 31-33. The last sentence is not relevant. See 34-35.

22 Accepted in 70.

23 Accepted in 85.

Mr. Allen's Proposed Findings of Fact

1 Accepted in 7-10, 23, 26 and hereby accepted.

2 Accepted in 5 and 12-13. The third sentence is not supported by the

weight of the evidence. For the location of the proposed property, see 3.

3 Accepted in 25. The third and fourth sentences are not relevant.

4 Accepted in 24-25 and 73.

5 See 83.

6 Accepted in 81. But see 82-84. The last sentence is not relevant.

The Department's procurement manual does not override the provisions of the ITB.

If Mr. Allen believed that the ITB was inconsistent with the Department's

procurement manual, he should have challenged the provisions of the ITB.

7 Not supported by the weight of the evidence.

8-9 Not relevant.

10 Speculative and not relevant. See 85.

11 See 85-86.

12 Argument and not supported by the weight of the evidence.

13 Accepted in 14 and 26. The Department's procurement manual is not

relevant.

14 See 83. Also see 82 and 84.

15 See 15-16 and 18. The last two sentences are not relevant.

16-21 Not relevant.

22 Hereby accepted. The second sentence is not relevant. The last

sentence is not supported by the weight of the evidence.

23 Hereby accepted.

24 See 81. But see 82-84. The last two sentences are not relevant.

25 See 30.

26a Accepted in 34-35 to the extent relevant. Whether Mr. Allen

submitted the lowest bid is not relevant and is not supported by the weight of

the evidence.

26b See 58. The second sentence is not relevant. The third sentence

is not relevant because Mr. Allen was required to challenge the provisions of

the ITB prior to submission of bids and not at the formal hearing. The next to

last sentence misinterprets the requirements of the ITB--Attachment N was

required to be executed and filed with the bid submissions. The last sentence

is not relevant--Mr. Allen was required to file the form with his bid

submission.

26c Not relevant.

Paragraph between 26c and 26d: Not supported by the weight of the

evidence.

26d The first sentence is not supported by the weight of the evidence.

The second sentence is not relevant and not supported by the weight of the

evidence. The third sentence through the end of the proposed findings is not

relevant.

26e Not relevant.

26f Not relevant and not supported by the weight of the evidence.

26g See 41, 43, 45 and 49. The first sentence is not supported by the

weight of the evidence--the requirement of the ITB at issue is not whether the

building is really in existence or whether it can be "physically verified". The

second sentence is not supported by the weight of the evidence. The fourth

sentence is not relevant. The sixth trough eighth sentences are not supported

by the weight of the evidence. Mr. Baldwin's calculation was not of "net

rentable square footage" AS DEFINED IN THE ITB or based only on what Mr. Allen

submitted. The eleventh sentence is not relevant. The last sentence takes Ms.

Goodman's testimony out of context.

26h See 43, 45 and 49. The first sentence is not supported by the

weight of the evidence. The third and fourth sentences are not relevant. The

fifth sentence is not supported by the weight of the evidence.

26i See 43, 5-46 and 49. The first sentence is a summary of some of

the testimony. The second sentence is not supported by the weight of the

evidence. The fourth sentence is not relevant. The last sentence is not

supported by the weight of the evidence to the extent that it suggests that a

"third floor plan" was submitted by Mr. Allen. The sixth sentence is hereby

accepted. The eighth sentence and the last sentence are not supported by the

weight of the evidence. The ninth, tenth and eleventh sentences are not

relevant.

26j The first sentence is hereby accepted. The second sentence is not

relevant. The third sentence is not relevant. The fourth sentence is not

supported by the weight of the evidence.

27 Not supported by the weight of the evidence and not relevant.

The Department's Proposed Findings of Fact

1 Accepted in 7 and 9-10

2-3 Accepted in 12-13.

4 Accepted in 25.

5 Accepted in 20.

6 Accepted in 18.

7-10 Hereby accepted.

11 Accepted in 24.

12 Accepted in 19.

13 See 33. But see 34-35.

14 Accepted in 31.

15 Hereby accepted. But see 34-35.

16 See 23 and hereby accepted.

17 Accepted in 26.

18 Accepted in 72.

19 See 36-41 and hereby accepted.

20 Accepted in 27.

21 Accepted in 36.

22 Accepted in 51 and 53.

23 Accepted in 54.

24 Accepted in 57.

25 Accepted in 59.

26 Accepted in 60.

27 Accepted in 38.

28 Accepted in 39.

29 Accepted in 71-72.

30 Accepted in 42.

31 Accepted in 71-72.

32 Accepted in 48 and 50.

33 Accepted in 70.

34 Accepted in 61.

35 Accepted in 62-68.

36 See 73.

37 Accepted in 39, and 43-47.

38 Accepted in 47 and 50.

39 Accepted in 27.

COPIES FURNISHED:

J. Michael Huey, Esquire

William E. Williams, Esquire

Rex D. Ware, Esquire

Post Office Box 1794

Tallahassee, Florida 32302

Benjamin K. Phipps, Esquire

George Hamm, Esquire

Post Office Box 1351

Tallahassee, Florida 32302

William A. Frieder

Assistant General Counsel

Department of Health and

Rehabilitative Services

Building E, Suite 200

1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

O.C. Allen

Post Office Box 10572

Tallahassee, Florida 32302

Robert L. Powell, Agency Clerk

Department of Health and

Rehabilitative Services

1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

Kim Tucker, General Counsel

Department of Health and

Rehabilitative Services

1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended

Order. All agencies allow each party at least 10 days in which to submit

written exceptions. Some agencies allow a larger period within which to submit

written exceptions. You should contact the agency that will issue the final

order in this case concerning agency rules on the deadline for filing exceptions

to this Recommended Order. Any exceptions to this Recommended Order should be

filed with the agency that will issue the final order in this case.