95-004559BID Pca Health Plans Of Florida, Inc., And Pca Family Health Plans, Inc. vs. Broward County School Board Status: Closed Recommended Order on Friday, December 8, 1995.

Summary: Evidence in bid protest proceeding was insufficient to prove that agency action was illegal, dishonest, fraudulent or arbitrary.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PCA HEALTH PLANS OF FLORIDA, )

INC., a Florida corporation, )

)

Petitioner, )

)

vs. )

)

THE SCHOOL BOARD OF BROWARD )

COUNTY, FLORIDA )

)

Respondent. ) CASE NO. 95-4559BID

and )

)

HIP HEALTH PLAN OF FLORIDA )

INC., a Florida corporation, )

and HUMANA HEALTH INSURANCE )

CO. OF FLORIDA, INC., )

)

Intervenors. )

_________________________________)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly

designated Hearing Officer, Michael M. Parrish, held a formal hearing in the

above-styled case on October 16, 17, and 18, 1995, in Fort Lauderdale, Broward

County, Florida.

APPEARANCES

For Petitioner: Andrew S. Berman, Esquire

Young, Berkman, Berman & Karpf, P.A.

17071 West Dixie Highway

North Miami Beach, Florida 33160

For Respondent: Edward J. Marko, Esquire

Marko & Stephany

1401 East Broward Boulevard, Suite 201

Fort Lauderdale, Florida 33301

For Intervenor: Robert L. Shevin, Esquire

HIP Richard Simring, Esquire

Strook & Strook & Lavan

200 South Biscayne Boulevard, Suite 3300

Miami, Florida, 33131

and

W. George Allen, Esquire

Allen, Hursey and Lucas

305 South Andrews Avenue, Suite 701

Fort Lauderdale, Florida 33302

and

Gerald M. Cohen, Esquire

300 South Park Road

Hollywood, Florida 33021

For Intervenor: Holly Skolnick, Esquire

Humana Greenberg, Traurig, Hoffman, Lipoff

Rosen & Quentel, P.A.

1221 Brickell Avenue

Miami, Florida 33131

STATEMENT OF THE ISSUES

Petitioner, PCA Health Plans of Florida, Inc. ("PCA"), has challenged The

Broward County School Board's proposed award of the group health plan HMO

contract pursuant to Request for Proposals 96-030S. The ultimate issue

presented is whether the School Board's proposed award is fraudulent, arbitrary,

dishonest, or illegal.

PCA framed the following subsidiary issues in the Joint Prehearing

Stipulation ("JPS"):

(a) Whether committee members were arbitrary

and capricious in rating HIP and Humana

Respondent, proposals as the only proposed

products that exceeded current benefits

(Criterion #3).

(b) Whether committee members were arbitrary

and capricious by scoring PCA's mental health

benefit package lower than Humana's (Criterion

#5).

(c) Whether committee members were arbitrary

and capricious by scoring PCA significantly

lower than competitors in the area of willing-

ness to comply with requested services, where

PCA's proposal was either identical to or

exceeded the proposal of the successful

bidders (Criteria #10 and #11).

(d) Whether some of the voting was the

result of bias for or against a particular

proposer so as to affect the integrity of

the RFP process to the damage of PCA.

(e) Whether the Board's vote on August 15,

1995 to approve the contracts with HIP and

Humana, while PCA's protest was outstanding

and unresolved, violated the terms of the

RFP, School Board rules and Florida law, and

tainted and poisoned the Board's hearing of

PCA's formal protest.

(f) Whether committee members acted

arbitrarily and capriciously by scoring PCA

significantly lower than competitors in the

M/WBE category, where the Board's own study

suggested that PCA was at or near the top in

this category, and was certainly superior

to the successful bidders. One committee

member gave PCA a zero.

(g) Whether some of the scoring was illegal

because some of the insurance committee

members had alternates.

(h) Whether some of the scoring was illegal

because at least one of the insurance committee

member's scores was collaborative.

In addition, PCA filed a memorandum of law requesting a finding of fact

that the School Board's M/WBE policy is unconstitutional.

PRELIMINARY STATEMENT

This case was referred to the Division of Administrative Hearings on

September 15, 1995, after PCA filed its formal written protest and petition for

formal administrative hearing. By agreement of the parties, the hearing was

held on October 16, 17, and 18, 1995, in Broward County, Florida.

The School Board and PCA stipulated to the intervention of HIP and Humana

as parties.

At the hearing the School Board made an ore tenus motion in limine based on

Section 120.53(5)(b), Florida Statutes. That section requires that a formal

written protest "state with particularity the facts and law upon which the

protest is based." The School Board asserted in its motion that issues (e), (g),

and (h), as set forth above in the Statement of the Issues, were not properly

part of this proceeding because they were not raised in PCA's formal written

protest. After hearing argument from all parties, the Hearing Officer granted

the School Board's motion and limited the issues to be litigated to those set

forth with particularity in the formal written protest.

PCA presented the following witnesses: Walter Collymore, Stephanie Sheppa,

Mary Kay Shea, and Patricia Thompson. PCA exhibits 2-5, 7, 10-13, 15, 18, 19,

23(b), and 27-34 were received in evidence. Exhibits 1, 23(a), 24, 25, 35 and

36 were rejected. Exhibit 26 was marked for identification but never introduced.

(There are no exhibits 6, 8, 14, 16, 17, 20, 21 or 22.)

The School Board presented the testimony of James Marshall, Jr., and Mark

Seigle. School Board exhibit 1 was received in evidence.

Neither HIP nor Humana presented any witnesses. HIP exhibits 1-3 were

received in evidence. Humana did not offer any exhibits.

Prior to the hearing, on October 5, 1995, Humana filed a motion to dismiss.

The arguments set forth in Humana's motion have been considered and are

incorporated in the conclusions of law.

At the conclusion of the hearing the parties were allowed ten days from the

filing of the transcript within which to file their proposed recommended orders.

The hearing transcript was filed on October 25, 1995. On November 6, 1995, the

Petitioner and the Intervenor HIP both filed proposed recommended orders

containing proposed findings of fact and conclusions of law. The Petitioner

also filed a separate Memorandum of Law and Intervenor HIP filed a separate

Closing Argument. The Respondent and the Intervenor Humana both filed

statements adopting the proposed recommended order submitted by the Intervenor

HIP.

The proposals submitted by the parties have been carefully considered

during the preparation of this Recommended Order. All proposed findings of fact

submitted by the parties are specifically addressed in the appendix to this

Recommended Order.

FINDINGS OF FACT

The Parties

1. The School Board of Broward County, Florida is responsible for, among

many other things, the purchase of group health insurance for school system

employees. The Broward County School System is the second largest in Florida

and the seventh largest in the United States with 21,033 eligible employees.

2. PCA, HIP, and Humana are large managed care companies providing a wide

range of health care services to the public. Each proposer submitted proposals

in response to the RFP. PCA's proposal was subdivided into PCA Basic (which was

designed to generally match the current benefit plan) and PCA Enhanced (which

was designed to exceed the current benefit plan). HIP and Humana are interested

parties, entitled to intervene, because they were jointly awarded the health

insurance contract by the Board, subject to PCA's protest.

The Insurance Consultant

3. The Board retained the services of Siver Insurance Management

Consultants ("Siver"), an independent insurance management consulting firm, to

aid it and the Insurance Committee with this RFP and other matters. Siver is a

group of professionals who provide advice and counsel to both public and private

sector clients. The majority of its public sector work involves assisting

governmental entities in purchasing their insurance programs.

4. Siver was not retained to score the proposals or to provide a

recommendation to the Insurance Committee or the School Board as to which

proposal should be chosen.

5. At one of the early Insurance Committee meetings, Siver made a

presentation entitled "Insurance 101" to inform the Committee members about

group health insurance and to advise them about the criteria that could be used

in the evaluation process.

The RFP

6. On April 11, 1995 the Board issued an RFP to solicit bids for its group

health program, covering eligible employees of the Broward County School System.

It sought proposals on one or more of the following managed care organizations,

with each organization to be evaluated on its own merit (standing alone):

a. Health Maintenance Organization (HMO)

b. Point-of-Service Health Maintenance Organization (POSHMO)

c. Preferred Provider Organization (PPO)

The contract was to begin January 1, 1996 and run through January 1, 2000

(4 years).

7. The RFP set forth, in general terms, the criteria that would be used to

evaluate the proposals. Under the category "Evaluation Criteria and Selection

Factors", the RFP provided that out of a total of 100 points, 0 to 45 points

would be allocated to projected costs and rate guarantees, 0 to 45 points would

be allocated based upon the extent to which the proposers were "willing and able

to provide products and services as specified in the RFP", and 0 to 10 points

would be allocated for the extent to which minorities and women were to

participate in the providing of services.

8. The criteria in the RFP were further broken down for the "willing and

able" and M/WBE categories. In the willing and able category (45 points

maximum) the major factors which may be considered were stated to be: The

degree of relevant experience of the proposer with respect to comparable clients

in Florida; the degree to which the proposer matched current plan provisions,

coverages and services required by the RFP; the degree to which the proposer

exceeded the current plan provisions, coverages, and services required; and the

capability of the network to provide proposed care and services.

9. The M/WBE category (10 points maximum) was further broken down as

follows: (a) The degree to which minorities and women participate in the

services to be performed and (b) the estimated amount of remuneration to

qualified M/WBE's. The M/WBE criteria also provided:

A greater amount of evaluation credit will be

given to Proposers with a Broward County

office(s) whose employee composition by

ethnicity and gender reflects the Broward

County population as defined by the 1990

census. Less evaluation credit will be given

to Proposers with administrative office(s)

located outside Broward County and/or whose

office(s) do not have the employee composition

by ethnicity and gender that reflects the

Broward County population as defined by the

1990 census.

10. The RFP specifically provided that Proposers could protest the

contents of the RFP within 72 hours of its receipt. Neither PCA, nor any other

Proposer, filed a protest to the contents of the RFP. Specifically, PCA did not

protest the School Board's express intention, set forth in Section II, pages 7-8

of the RFP, to use the ratio of minority and women business enterprises as one

of the criteria to rate the proposals.

The Insurance Committee

11. The RFP was developed by an Insurance Committee of fourteen

individuals chosen by the Superintendent of the School Board.

12. The Insurance Committee was charged with responsibility for evaluating

the various proposals submitted in response to the RFP and making a

recommendation to the Superintendent.

13. The fourteen Insurance Committee members, and their respective

backgrounds, were as follows:

a. Ray Adkins

Executive Director

Confidential Office Personnel Association

b. Walter Browne

Executive Director

Federation of Public Employees

c. James Flynn

Executive Director

Support Services Personnel Association

d. Anthony Gentile

President, Broward County Teachers Association

e. Judith Hunt

Director of Risk Management and Safety for

the Broward County School Board

f. Nona L. Jones

Local Businesswoman with background in risk management

g. George Latimer

Chief Finance Officer, Broward County School Board

h. Lisa Maxwell

Executive Director,

Broward County Principals Association

i. Robert Parks

School Board Member

Professor, Nova Southeastern University

j. William Read

Retired Businessman

Former Benefits Manager, Chrysler Motor Corporation

k. Mark S. Seigle

Associate Superintendent for Personnel of the

Broward County School Board

l. Richard Thomas

Director of Benefits, Broward County School Board

m. Patricia Thompson

President, Broward County Paraprofessional Association

n. Lois Wexler

School Board Member

14. Of the 14 Insurance Committee members, two were School Board members,

four were high ranking employees of the School Board, six were representatives

of various employee unions and associations, and two were from the Broward

business community.

15. Each of the Insurance Committee members was furnished with, among

other things, a copy of each of the proposals submitted in response to the RFP.

These copies comprised several boxes full of documents.

16. The Insurance Committee met a total of 11 times, beginning on February

17, 1995 and ending on July 17, 1995. Each meeting lasted between 3 and 10

hours.

17. All the meetings of the Insurance Committee were publicly held "in the

Sunshine."

The Committee Evaluation Process

18. The intention of the Insurance Committee in evaluating the proposals

was to design evaluation criteria that afforded maximum discretion. There was

no intention of making the Insurance Committee a "mathematical scoring machine."

19. Based on consultations with Siver, and through its various meetings,

the Insurance Committee adopted a scoring matrix to use in evaluating the

various proposals.

20. The scores were divided, as required by the RFP, into three

categories: Ready, Willing and Able ("RWA"), Price, andMinority/Women Business

Enterprise ("M/WBE").

21. The maximum scores for each category were as follows:

Price 45

Ready and Willing 45

M/WBE 10

TOTAL: 100 Points

22. The RWA category was subdivided into twelve separate criteria. The

M/WBE category was subdivided into two separate criteria. The Insurance

Committee thus ranked the proposals using a total of 14 separate criteria.

23. Ultimately, the willing and able category was broken down into the

following 12 "detailed categories": The number of products offered (1,2 or 3);

whether the proposal matched current plan benefits or model; whether the

proposal exceeds current benefits or model; allocation of premium dollars to

medical services/claims; whether the proposal exceeded, equalled or provided

less than the current level of mental health and substance abuse benefits;

wellness program (level of services to be provided); credentials for managed

care products; the extent to which the proposal exceeded, equalled, or provided

less than the current provider of managed care services; the ratio of board

certified providers to total network providers; comply with requested services

set forth in the RFP; agree to service standards set forth in the RFP; and

overall experience, specifically in Florida.

24. The Insurance Committee then allocated maximum points to each of the

12 "detailed categories" according to their importance. The total of the points

added up to 45. The Insurance Committee created a scoring grid containing the

"detailed criteria", listing the detailed criteria and maximum points to be

awarded in each category on the left side of the document, along with the 12

separate proposers across the page from left to right, leaving space to score

each proposer in each criterion. In assigning points to the various criteria,

it was the intention of the Insurance Committee members to allow for scoring

anywhere along the range of assigned points. As noted in an early draft of the

scoring matrix: "Maximum Suggested Points means that points may be awarded up

to the stated maximum for each criteria."

25. As a general rule, when establishing criteria for the evaluation of

competing proposals for the furnishing of services it is best to try to avoid or

minimize the use of subjective criteria. However, with regard to proposals of

the type involved in this case, it is difficult to make meaningful comparisons

on a purely objective basis and a certain amount of subjectivity is unavoidable.

Honest mistakes are to be expected in a committee evaluation of competing

proposals. Although a number of the criteria adopted by the Committe in this

case were largely subjective, all of the criteria were relevant to a reasonable

comparison of competing proposals.

26. The consultant for the Board, Siver, prepared an analysis and

comparative study of the various proposals to assist the Insurance Committee in

scoring the proposals. The Proposal Analysis consisted of a breakdown and

comparison of those features in each proposal which were relevant to each of the

12 RWA criteria established by the Insurance Committee. It listed each of the

criteria individually and then outlined how each proposer complied or did not

comply with the criteria. The analysis provided a quick reference for

Insurance Committee members to use during their evaluation of the proposals,

particularly given the number and size of the proposals. Each of the Insurance

Committee members was provided a copy of the Siver analysis.

27. Siver's Proposal Analysis was limited to the price/cost and "willing

and able" categories. The Board utilized the resources of its own staff to

assemble and compare information contained in the proposals with respect to the

M/WBE category. Ultimately, the Committee decided to break down the M/WBE

category into two sub-categories, to wit: workforce environment and M/WBE

participation. It also decided that the workforce environment category would

count for 3 points, and the M/WBE participation category for 7 total points.

28. Shelia Dudley, the M/WBE coordinator for the Board supplied Insurance

Committee members with several proposal analyses. The first was a document

analyzing the percentage of minority and women employees in the proposers'

regional, local, and corporate offices. The second was a proposal analysis of

the extent to which the proposers committed to M/WBE participation. The document

contained three columns. The first noted the firmness of any contracts with a

qualified M/WBE and the dollar commitment, if provided; the second column set

forth the form of minority contractor participation, viz: wellness program,

printing, copying, etc., and the third column extracted general information from

the proposals which might be useful to the analysis. The next document provided

a breakdown of minorities/women for "physicians and others", and Dudley

indicated that only Humana provided such information. PCA did supply a list of

all minority physicians in Broward County with estimated capitation dollars,

although without percentages.

29. Lastly, Ms. Dudley provided Insurance Committee members with a

document outlining possible evaluation considerations for the workforce

environment criteria and the M/WBE participation criteria. There was no

evidence in the record that Ms. Dudley's proposed evaluation considerations were

ever adopted by the Committee.

The July 13, 1995 Scoring

30. The Insurance Committee met on July 13, 1995, to score the various

proposals.

31. Prior to the July 13, 1995, Committee meeting, all of the proposers

had been given an opportunity to make an oral presentation, to hand out written

presentation materials, and to participate in a question and answer session

before the Committee voted. In addition, many of the Proposers, including PCA,

had previously met individually with most of the Committee members for 20 or 30

minutes. The Committee members had also been lobbied by the various Proposers.

32. Each member of the Insurance Committee scored the proposals for three

different group medical products: an HMO product, a PPO product, and a Point of

Service HMO product.

33. The Insurance Committee elected not to independently score the price

category, but rather to adopt Siver's price rankings based on a formula approved

by the Committee.

The July 17, 1995, Scoring

34. The Insurance Committee reconvened on July 17, 1995, because Siver, at

the request of some of the proposers, asked the Insurance Committee members to

re-check some of their scores that in Siver's opinion were objectively

verifiable and possibly inconsistent with the scores given by other Committee

members. Siver offered its help, but left it to the individual Committee members

to decide whether to rescore. Some did; some did not. (The final scores by each

Insurance Committee member on each of the criteria are set forth in Petitioner

Exhibit 18.)

35. The Insurance Committee's final aggregate scores on HIP's HMO,

Humana's HMO, and PCA's two separate HMOs (referred to as "PCA Basic" and "PCA

Enhanced") were as follows:

7/17/95 Score

HIP HUM PCA PCA Enh

RWA 1 3.00 3.00 2.64 2.69

RWA 2 6.93 7.00 6.21 6.77

RWA 3 4.57 3.00 1.57 3.46

RWA 4 3.00 0.79 2.93 2.92

RWA 5 2.36 2.43 1.86 1.92

RWA 6 2.71 2.36 2.36 2.31

RWA 7 3.04 -0.36 0.29 0.23

RWA 8 1.43 2.21 0.93 0.85

RWA 9 2.64 0.14 0.07 0.08

RWA 10 2.57 2.50 1.93 2.00

RWA 11 2.43 2.50 1.79 1.85

RWA 12 2.75 3.57 1.57 1.54

RWA Subtotal 37.43 29.14 24.14 26.62

Cost 40.49 41.29 43.65 40.42

M/WBE 1 2.73 2.89 1.07 1.15

M/WBE 2 6.00 6.43 4.93 5.31

M/WBE Subtotal 8.73 9.32 6.00 6.46

HMO TOTALS: 86.65 79.75 73.79 73.50

36. The Insurance Committee posted the final scores for all Proposers and

each of their products on July 24, 1995. HIP and Humana scored more total

points than any other bidders on each of the three products. Accordingly, the

Committee recommended that the School Board award the entire RFP, including the

HMO contract, jointly to HIP and Humana.

September 5, 1995 School Board Meeting

37. On July 27, 1995, PCA filed a Notice of Protest with the Director of

Purchasing of the School Board, as required by the RFP. On August 7, 1995, PCA

filed a Formal Written Protest with the School Board. PCA's protest challenged

the scoring on eight separate criteria: RWA Criteria Nos. 2, 3, 4, 5, 9, 10,

and 11, and the M/WBE criteria.

38. On September 5, 1995, the School Board met to consider PCA's protest.

The School Board heard argument from PCA's attorney and from Siver.

39. Mr. Marshall, on behalf of Siver, informed the School Board that,

although some of the criteria were objectively verifiable, others had been

scored on a subjective range.

40. Following Siver's recommendation and its own evaluation of the

criteria, the School Board agreed to give PCA the benefit of the doubt and to

accept PCA's asserted revised scores on RWA Criteria Nos. 2, 4 and 9 because

those criteria were arguably objectively verifiable. The School Board rejected

PCA's arguments regarding the other criteria.

41. Even with the School Board's willingness to give PCA the benefit of

the doubt on the three criteria mentioned above, the Insurance Committee's July

17th rankings did not change. Consequently, the School Board denied PCA's

protest.

42. The revised aggregate scores agreed to by the parties for purposes of

the final administrative hearing include the revised scores recommended by Siver

and agreed to by the School Board on Criteria Nos. 2, 4, and 9. They are as

follows:

9/5/95 Board Rescoring

HUM PCA PCA Enh

RWA 1 3.00 2.64 2.69

RWA 2 7.00 7.00 7.00

RWA 3 3.00 1.57 3.46

RWA 4 0.43 3.00 3.00

RWA 5 2.43 1.86 1.92

RWA 6 2.36 2.36 2.31

RWA 7 -0.36 0.29 0.23

RWA 8 2.21 0.93 0.85

RWA 9 0.00 0.00 0.00

RWA 10 2.50 1.93 2.00

RWA 11 2.50 1.79 1.85

RWA 12 3.57 1.57 1.54

RWA Subtotal 28.64 24.93 26.85

Cost 41.29 43.65 40.42

M/WBE 1 2.89 1.15 1.15

M/WBE 2 6.43 5.31 5.31

M/WBE Subtotal 9.32 6.46 6.46

HMO TOTALS: 79.25 75.04 73.73

43. On September 12, 1995, PCA filed a Petition for Formal Administrative

Hearing.

RWA Criterion # 3

44. Since neither HIP, Humana, nor PCA received a perfect "5" in the

aggregate on Criterion #3, the Insurance Committee members obviously viewed the

scoring on this criteria as a range from 0 to 5. Criterion #3 was largely

subjective and was scorable on a range based upon the Committee members'

individual perspectives of the value of the enhancements.

45. There is a reasonable factual basis in the record for the Insurance

Committee members to have differentiated along a range between the proposers on

this criterion. Because each proposer offered different enhancements, it was a

matter of discretion for each Committee member, in his or her own judgment, to

rate those enhancements based on their perceived value to the employees of the

Broward County School Board. The evidence is insufficient to show that the

scoring on this criterion was arbitrary to any material or quantifiable extent.

RWA Criterion #5

46. Since neither HIP, Humana, nor PCA received a perfect "4" in the

aggregate on Criterion #5, the Insurance Committee members obviously viewed the

scoring on this criteria as a range from 0 to 4. Criterion #5 was highly

subjective and scorable on a range.

47. The RFP required at section III, pages 6-8 that each provider's mental

health subcontractors should "reflect the racial and ethnic composition of the

School Board's employees." The Insurance Committee members could have

differentiated along a range between the Proposers on this criteria. Each

Proposer offered different mental health and substance abuse packages, and it

was therefore a matter of wide discretion for each Committee member, in his or

her own judgment, to rate those packages based on their perceived value to the

employees of the Broward County School Board. The evidence is insufficient to

show that the scoring on this criterion was arbitrary to any material or

quantifiable extent.

RWA Criterion #10

48. Since neither HIP, Humana, nor PCA received a perfect "" in the

aggregate on Criterion #10, the Insurance Committee members obviously viewed the

scoring on this criteria as a range from -3 to .

49. The Insurance Committee members could have differentiated along a

range between the Proposers on this criteria. For example, each Proposer

offered a different number of on-site customer service representatives: HIP

offered 6 representatives, Humana offered 2, and PCA offered 1.

50. Members of the Insurance Committee could have evaluated Proposers

based not just on whether they would, but whether they could, provide the

requested services. This inference could be drawn by a Committee member based

on the Proposer's references, which demonstrated their prior ability to perform,

and the number of years that the Proposer has been a health care provider. The

evidence is insufficient to show that the scoring on this criterion was

arbitrary to any material or quantifiable extent.

RWA Criterion #11

51. Since neither HIP, Humana, nor PCA received a perfect "" in the

aggregate on Criterion #11, the Insurance Committee members obviously viewed the

scoring on this criteria as a range from -3 to .

52. The Insurance Committee members could have differentiated along a

range between the Proposers on this criteria. Just as with Criterion #10, the

Insurance Committee members could have evaluated Proposers based not just on

whether they would, but whether they could, comply with the requested services.

The evidence is insufficient to show that the scoring on this criterion was

arbitrary to any material or quantifiable extent.

The M/WBE Criteria

53. The M/WBE criteria was broken down into two categories: workforce

environment and vendor participation. Out of 10 possible points, the Committee

decided to allow a maximum of 3 points for workforce environment and 7 points

for minority participation.

54. The RFP, however, expressly indicated that Proposers who did not have

an administrative office in Broward County would be scored lower than Proposers

that did. (See Paragraph 9 of these Findings of Fact.) PCA does not have an

administrative office in Broward County. Both HIP and Humana do have

administrative offices in Broward County. This information alone was sufficient

for the Insurance Committee, in its honest discretion, to score PCA less than

HIP and Humana.

55. The M/WBE Participation Proposal Analysis prepared by the School

Board's Equal Employment Opportunity Department indicated that Humana

anticipated that 48 percent of its primary care physicians would be M/WBEs, that

35 percent of its specialty physicians would be M/WBEs, and that 43.5 percent

($157,783,000) of the total dollars paid to physicians in 1994 were paid to

M/WBEs.

56. PCA did not provide a breakdown of the ratio of its M/WBE physicians

to the total number of physicians. Instead, PCA indicated that it had about 378

total M/WBE physicians and that the total fees that would be paid to such

physicians were estimated to be $853,944.

57. Humana was the only Proposer to provide a breakdown of its physicians

by ethnicity and gender.

58. There was other sufficient information available to the Insurance

Committee members upon which they could reasonably have scored PCA lower than

HIP and Humana in their "honest exercise of discretion." The evidence is

insufficient to show that the scoring of the M/WBE criteria was arbitrary to any

material or quantifiable extent.

Bias

59. PCA did not present any evidence that any of the Insurance Committee

members were biased for or against any of the Proposers.

60. A comparison of the scores of the various Insurance Committee members

indicate that they were, for the most part, in reasonably good agreement with

respect to how they rated HIP, Humana, and PCA on each criteria. There are,

however, as mentioned below, a number of scores that appear to be abberations.

Some General Observations

61. The evidence in this case is sufficient to show that at least one

member of the Insurance Committee made at least some scoring decisions on the

basis of arbitrary considerations. The evidence also establishes that another

member of the Insurance Committee made all of his material scoring decisions on

the basis of appropriate considerations. The evidence does not show the

reasoning behind any of the scoring decisions of any of the other twelve members

of the Insurance Committee. Accordingly, the evidence is insufficient to

establish that any of the scoring decisions of any of the other twelve Committee

members was arbitrary.

62. The arbitrary scoring decisions of one member of the Insurance

Committee have not been described in detail in these Findings of Fact because

the impact of those few scores on the average scores is de minimus. If all of

the average scores were to be recalculated to take into account the few arbirary

scores that were proved there would be no significant change in the ranking of

the parties.

63. There were some scores by some members of the Insurance Committee

that, on the record in this case, appear to be what can best be described as

unexplained abberations. Because they are unexplained, the evidence is

insufficient to establish that these apparent abberations were based on

arbitrary considerations. It is possible they were merely honest mistakes. It

is possible there is some logical explanation for some or all of the apparent

abberations, which explanation is not part of the record in this case because

the members who cast those votes were not called as witnesses. Unexplained

abberations are an insufficient basis upon which to conclude that a bidding

process is arbitrary.

Final Rankings

64. According to the July 17, 1995 scores, PCA's best score was 5.96

points lower than Humana's score.

65. Using the September 5, 1995 scores (and thus giving PCA the benefit of

the doubt of higher scores on those criteria that were objectively verifiable),

PCA's best score is still be 4.21 points lower than Humana's score.

66. Even if the M/WBE scores were not considered, PCA's best score using

the September 5, 1995 scoring would be 1.35 points lower than Humana's.

67. Even if PCA were given the full 10 points for the M/WBE criteria,

PCA's best score using the September 5, 1995 scoring would still be .67 points

lower than Humana's.

CONCLUSIONS OF LAW

68. The Division of Administrative Hearings has jurisdiction over the

subject matter of and the parties to this proceeding pursuant to Sections

120.53(5) and 120.57(1), Florida Statutes.

69. HIP and Humana, as the successful bidders for the RFP, are entitled to

intervene as parties in this proceeding.

70. In a bid protest such as this, the sole responsibility of the Hearing

Officer is to ascertain whether the agency acted fraudulently, arbitrarily,

illegally, or dishonestly. Department of Transportation v. Groves-Watkins

Constructors, 530 So. 2d 912, 913(Fla. 1988); Liberty County v. Baxter's Asphalt

and Concrete, Inc., 421 So. 2d 505, 507 (Fla. 1982); Blue Cross and Blue Shield

of Florida, Inc v. AHCA, DOAH Case No. 95-3635BID (RO issued September 27,

1995).

71. As the Florida Supreme Court noted in Liberty County:

[A] public body has wide discretion in

soliciting and accepting bids for public

improvements and its decision, when based on

an honest exercise of this discretion, will

not be overturned by a court even if it may

appear erroneous and even if reasonable

persons may disagree.

530 So. 2d at 913 (emphasis added).

72. In the context of an evaluating committee, such as the Insurance

Committee in this case, the courts have held as follows:

The Hearing Officer need not, in effect,

second guess the members of [the] evaluation

committee to determine whether [they] and/or

other reasonable and well-informed persons

might have reached a contrary result.

Scientific Games, Inc. v. Dittler Bros., Inc., 568 So. 2d 1128, 1131 (Fla. 1st

DCA 1991) (emphasis added).

73. This more restrictive standard of review for competitive bidding cases

is consistent with the limited remedy available to a successful bid challenger.

If a public bid process is declared arbitrary, a Hearing Officer does not have

authority, even if the parties so stipulate, to make a de novo evaluation of the

bids or to award the contract to a different bidder. The Hearing Officer only

has jurisdiction to remand the entire matter to the agency for further action.

Procacci v. Department of Health & Rehabilitative Services, 603 So. 2d 1299,

1300-01 (Fla. 1st DCA 1992); Moore v. Department of Health & Rehabilitative

Services, 596 So. 2d 759, 761 (Fla. 1st DCA 1992).

74. Substantial disagreement among the members of an evaluation committee

is not unusual in cases of this nature. See, for example, Blue Cross and Blue

Shield of Florida, Inc. v. AHCA, DOAH Case No. 95-3635BID (RO issued September

27, 1995), which involved the "use of 24 evaluators with diverse backgrounds and

perspectives; use of questions involving the application of judgement and

subjective standards; and use of the 0-10 scoring scale without any exact or

true score for any questions."

75. The Petitioner in this case has not contended that the School Board's

action is fraudulent or dishonest. The Petitioner's primary contention is that

the School Board's action is arbitrary and, by reason of being arbitrary is,

therefore, also illegal. There is no assertion by the Petitioner of any illegal

conduct by the School Board other than the allegedly arbitrary conduct in

awarding the subject contract.

76. Based on the agreement of the parties resulting from the September 5,

1995, School Board Meeting, PCA is challenging only the Board's scores on the

following five criteria:

RWA Criterion #3: Whether the proposal exceeds current

benefits or model;

RWA Criterion #5: Mental Health and Substance Abuse;

RWA Criterion #10: Whether the proposal complies with

requested services;

RWA Criterion #11: Whether the Proposer agrees to

service standards; and

The M/WBE criteria.

77. PCA only challenges the School Board's award of the HMO product, not

its award of the PPO or the POSHMO. PCA is not contesting the price rankings.

PCA is not challenging HIP's first place ranking; it only challenges Humana's

second-place ranking over PCA's third-place ranking.

78. On all of the contested criteria, there was information made available

to the Insurance Committee upon which it could, within the exercise of a

reasonable discretion, reasonably score Humana higher than PCA.

79. While it is possible that some of the scoring decisions of the twelve

Committee members who did not testify may have been arbitrary, there is no

persuasive competent substantial evidence in the record of this case to

establish that such is the case. Further, on the record in this case there is no

way in which the impact of any such possible arbitrary scoring can be

quantified. Absent quantification it cannot be shown that any such possible

arbitrary scoring resulted in any substantial injury to the Petitioner's

interests.

80. A great deal of the Petitioner's argument is based on the notion that

an unexplained deviation from an expected scoring result constitutes proof that

the unexpected result was the result of some arbitrary action by one or more

Committee members. Such is not the case. Deviations from expectations can

result from any number of different reasons. In order to demonstrate

entitlement to relief from unexpected results, the Petitioner must present

evidence of the reason for the results and must prove that the reason

constituted an arbitrary, illegal, fraudulent, or dishonest act. Absent such

proof, relief must be denied.

81. The Division of Administrative Hearings does not have jurisdiction to

address PCA's claim that the M/WBE criteria utilized by the School Board in

scoring the RFP was unconstitutional. See, e.g., Myers v. Hawkins, 362 So. 2d

926, 928 (Fla. 1978). PCA's attempt in its memorandum to recharacterize the

issue as factual rather than legal is unavailing.

82. Even if PCA had a valid constitutional claim, PCA waived its right to

contest the School Board's use of the M/WBE criteria because it did not contest

the relevant portion of the RFP within 72 hours as required by the RFP itself.

83. In brief conclusion, the evidence in this case is an insufficient

basis for granting the relief sought by the Petitioner. The few instances of

arbitrary scoring that were actually proved were too few in number to have any

material impact on the average scores. Accordingly, the Petition and Formal

Protest should be dismissed and all relief requested in the Petition should be

denied.

RECOMMENDATION

On the basis of all of the foregoing, it is RECOMMENDED that the School

Board of Broward County issue a final order in this case dismissing the Petition

and Formal Protest filed by the Petitioner and denying all relief requested by

the Petitioner.

DONE and ENTERED this 8th day of December, 1995, at Tallahassee, Leon

County, Florida.

_________________________________

MICHAEL M. PARRISH

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 8th day of December, 1995.

APPENDIX

The following are the specific rulings on all proposed findings of fact

submitted by all parties.

Proposed findings submitted by Petitioner:

Paragraphs 1 and 2: Accepted.

Paragraph 3: Accepted in substance, but with a large number of

argumentative or editorial details omitted.

Paragraph 4: First two sentences accepted in substance. The remainder of

this paragraph is rejected as subordinate and unnecessary details, or as

irrelevant.

Paragraph 5: Rejected as consisting primarily of quotations of testimony

and of subordinate and unnecessary details.

Paragraph 6: Rejected as subordinate and unnecessary details.

Paragraphs 7 through 10: Accepted in substance.

Paragraph 12: Rejected as subordinate and unnecessary details that are not

entirely accurate.

Paragraph 13: Accepted in substance.

Paragraph 14: Most of this paragraph has been rejected as consisting of

subordinate and unnecessary details and of quotations of testimony; portions

also rejected as irrelevant.

Paragraphs 15 through 21: Accepted in substance, but with some

argumentative and editorial language omitted.

Paragraph 22: First two sentences accepted in substance. The remainder is

rejected as consisting primarily of argument, of summaries of testimony, and of

subordinate and unnecessary details.

Paragraph 23: Accepted in substance.

Paragraph 24: The basic substance of this paragraph has been accepted, but

the majority of the details have been omitted as subordinate and unnecessary or

as quotations rather than proposed findings of fact.

Paragraph 25: Rejected as subordinate and unnecessary details or as

irrelevant.

Paragraph 26: Rejected as comprised primarily of argument and proposed

legal conclusions, rather than proposed findings of fact.

Paragraphs 27 through 31: Accepted in substance, but with a number of

argumentative, subordinate, and unnecessary details omitted.

Paragraph 32: Rejected as comprised primarily of argument and proposed

legal conclusions, rather than proposed findings of fact.

Paragraph 33: Rejected as comprised primarily of a statement of another

party's position, rather than proposed findings of fact.

Paragraphs 34 and 35: Rejected as comprised primarily of argument and

proposed legal conclusions, rather than proposed findings of fact. Also

rejected as irrelevant, inasmuch as the School Board has agreed that PCA should

receive full credit on the subject criterion.

Paragraph 36: Rejected as irrelevant, inasmuch as the School Board has

agreed that PCA should receive full credit on the subject criterion.

Paragraph 37: Most of this paragraph has been rejected as being

argumentative, as consisting of subordinate and unnecessary details, or as

irrelevant. A few facts from this paragraph have been accepted.

Paragraph 38: Most of this paragraph has been rejected as subordinate and

unnecessary details, or as irrelevant because, even if accepted, evidence of

improper voting by one of fourteen members would not be a sufficient basis upon

which to conclude that the Petitioner was entitled to any relief. The last

sentence of this paragraph has been rejected as too vague to be meaningful and

as not fully supported by the persuasive competent substantial evidence.

Paragraph 39: Rejected as subordinate and unnecessary details.

Paragraphs 40 through 44: Rejected as consisting primarily of argument and

legal conclusions, rather than proposed findings of fact.

Paragraphs 45 through 58: These paragraphs are, for the most part,

rejected for several reasons. They include many subordinate and unnecessary

details. They are comprised extensively of argument, much of which argument is

predicated on theories which are not persuasive to the Hearing Officer.

Paragraph 59: Rejected as subordinate and unnecessary details.

Paragraph 60: Rejected as a combination of argument and subordinate and

unnecessary details.

Paragraphs 61 and 62: These paragraphs are, for the most part, rejected

for several reasons. They include many subordinate and unnecessary details.

They are comprised extensively of argument, much of which argument is predicated

on theories which are not persuasive to the Hearing Officer.

Paragraph 63 through 65: First three sentences of paragraph 63 are

accepted in substance. The remainder of these three paragraphs is rejected as

irrelevant because they deal with an issue not properly raised in this case.

Paragraph 66: Rejected as consisting primarily of argument with

subordinate and unnecessary details.

Paragraph 67: First sentence is accepted in substance. The remainder of

this paragraph is rejected as argument.

Proposed findings submitted by Respondent:

(None submitted; Respondent adopted the findings proposed by

Intervenor HIP.)

Proposed findings submitted by Intervenor HIP:

Paragraphs 1 through 9: Accepted in whole or in substance.

Paragraph 10: Rejected as subordinate and unnecessary details not relevant

to the disposition of this case.

Paragraphs 11 through 40: Accepted in whole or in substance.

Paragraphs 41 through 45: These paragraphs consist of descriptions of a

party's positions or arguments; they belong more appropriately in the

conclusions of law than in the findings of fact.

Paragraphs 46 and 47: Rejected as subordinate and unnecessary details.

Paragraphs 48 and 49: The form of these paragraphs is rejected as

constituting summaries or quotations of testimony, rather than proposed findings

of fact. The underlying essence has been accepted in substance.

Paragraph 50: Accepted.

Paragraphs 51: Accepted in substance.

Paragraphs 52 and 53: Rejected as summaries of testimony, rather than

proposed findings of fact. Also rejected as subordinate and unnecessary

details.

Paragraph 54: Accepted in substance.

through 54: The form of these paragraphs is rejected as constituting

summaries or quotations of testimony, rather than proposed findings of fact.

The underlying essence has been accepted in substance.

Paragraphs 55 and 56: Rejected as summaries of testimony, rather than

proposed findings of fact. Also rejected as subordinate and unnecessary

details.

Paragraph 57: This paragraph consists of descriptions of a party's

positions or arguments; it belongs more appropriately in the conclusions of law

than in the findings of fact.

Paragraph 58: Rejected as subordinate and unnecessary details.

Paragraph 59: Accepted.

Paragraphs 60 through 62: Rejected as summaries or quotations of

testimony, or as subordinate and unnecessary details.

Paragraph 63: Rejected as a statement of a party's position, rather than a

finding of fact based on the evidence.

Paragraphs 64 and 65: Rejected as summaries or quotations of testimony, or

as subordinate and unnecessary details.

Paragraph 66: The first sentence of this paragraph is accepted in

substance. Most of the details in the several subparagraphs of paragraph 66 are

rejected as subordinate and unnecessary details.

Paragraph 67: This paragraph consists of descriptions of a party's

positions or arguments; it belongs more appropriately in the conclusions of law

than in the findings of fact.

Paragraphs 68 through 72: Accepted in substance with a large number of

subordinate and unnecessary details omitted.

Paragraph 73: This paragraph consists of descriptions of a party's

positions or arguments; it belongs more appropriately in the conclusions of law

than in the findings of fact.

Paragraphs 74 through 77: Accepted in substance with a large number of

subordinate and unnecessary details omitted.

Paragraph 78: This paragraph consists of descriptions of a party's

positions or arguments; it belongs more appropriately in the conclusions of law

than in the findings of fact.

Paragraphs 79 through 81: Accepted in substance with a large number of

subordinate and unnecessary details omitted.

Paragraph 82: Accepted.

Paragraph 83: This paragraph consists of descriptions of a party's

positions or arguments; it belongs more appropriately in the conclusions of law

than in the findings of fact.

Paragraphs 84 through 86: Accepted.

Paragraph 87: Rejected as subordinate and unnecessary details.

Paragraph 88: Rejected as consisting of a summary of testimony, rather

than proposed findings of fact. Also rejected as subordinate and unnecessary

details.

Paragraph 89: Accepted in substance.

Paragraph 90: This paragraph consists of descriptions of a party's

positions or arguments; it belongs more appropriately in the conclusions of law

than in the findings of fact.

Paragraph 91: This paragraph is rejected as consisting primarily of

argument about the weight of the evidence, rather than consisting of proposed

findings of fact.

Paragraphs 92 through 94: Rejected as subordinate and unnecessary details.

Paragraphs 95 through 97: Accepted.

Paragraph 98: Rejected as subordinate and unnecessary details.

Paragraph 99: Accepted.

Paragraph 100: First sentence rejected as constituting primarily argument

about the weight to be given to the evidence. Second sentence accepted in

substance.

Paragraph 101: First sentence accepted in substance. Second sentence

rejected as subordinate and unnecessary details.

Paragraphs 102 through 104: Rejected as subordinate and unnecessary

details.

Paragraphs 105 through 107: Rejected as irrelevant or as subordinate and

unnecessary details.

Paragraph 108: Accepted in substance.

Paragraphs 109 through 111: Rejected as subordinate and unnecessary

details.

Paragraphs 112 and 113: Rejected as comprised primarily of arguments,

rather than proposed findings of fact. Also rejected as subordinate and

unnecessary details.

Paragraphs 114 through 117: Accepted.

Proposed findings submitted by Intervenor Humana:

(None submitted; Intervenor Humana adopted the findings proposed by

Intervenor HIP.)

COPIES FURNISHED:

Andrew S. Berman, Esquire

Young, Berkman, Berman & Karpf, P.A.

17071 West Dixie Highway

North Miami Beach, Florida 33160

Edward J. Marko, Esquire

Marko & Stephany

1401 East Broward Blvd, Ste. 201

Fort Lauderdale, Florida 33301

Robert L. Shevin, Esquire

Richard Simring, Esquire

Strook & Strook & Lavan

200 South Biscayne Boulevard

Suite 3300

Miami, Florida, 33131

W. George Allen, Esquire

Allen, Hursey and Lucas

305 South Andrews Avenue

Suite 701

Fort Lauderdale, Florida 33302

Gerald M. Cohen, Esquire

300 South Park Road

Hollywood, Florida 33021

Holly Skolnick, Esquire

Greenberg, Traurig, Hoffman, Lipoff

Rosen & Quentel, P.A.

1221 Brickell Avenue

Miami, Florida 33131

Dr. Frank R. Petruzielo

Superintendent of Schools

Broward County School District

600 S. E. Third Avenue

Fort Lauderdale, Florida 33301-3125

NOTICE OF RIGHT TO FILE EXCEPTIONS

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

order. All agencies allow each party at least ten 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.