98-002172BID Florida Overland Express, L.P. vs. Department Of Transportation Status: Closed Recommended Order on Thursday, August 6, 1998.

Summary: FOX protested Request For Proposal to co-locate another rail system in the Beeline Expressway right-of-way, saying it would interfere with FOX`s high-speed rail project. Recommended Order: premature to invalidate Request for Proposal.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA OVERLAND EXPRESS, L.P., )

)

Petitioner, )

)

vs. ) Case No. 98-2172BID

) DOT Case No. 98-80

DEPARTMENT OF TRANSPORTATION, )

)

Respondent, )

)

and )

)

BEE LINE MONORAIL SYSTEM, INC., )

)

Intervenor. )

___________________________________)

RECOMMENDED ORDER

On June 16 and July 2, 1998, a formal administrative hearing

was held in this case in Tallahassee, Florida, before J. Lawrence

Johnston, Administrative Law Judge, Division of Administrative

Hearings.

APPEARANCES

For Petitioner: Martha Harrell Chumbler, Esquire

Carlton, Fields, Ward, Emmanuel,

Smith & Cutler, P.A.

Post Office Drawer 190

Tallahassee, Florida 32302

Betty J. Steffens, Esquire

210 South Monroe Street

Tallahassee, Florida 32301

For Respondent: John C. Bottcher

Assistant General Counsel

Department of Transportation

605 Suwannee Street

Tallahassee, Florida 32399-0450

For Intervenor: Peter Antonacci, Esquire

Rumberger, Kirk & Caldwell, P.A.

Post Office Box 10507

Tallahassee, Florida 32392-2507

STATEMENT OF THE ISSUES

The issues in this case are whether the specifications

included in the Request for Proposals for Lease of Right-of-Way,

S.R. 528 (Bee Line Expressway)("the RFP") are contrary to

governing statutes and rules, clearly erroneous, contrary to

competition, arbitrary, or capricious.

PRELIMINARY STATEMENT

The Respondent, the Department of Transportation (the

Department), issued the RFP on April 17, 1998. The Petitioner,

Florida Overland eXpress, L.P. ("FOX") filed a written protest of

the RFP's specifications on May 4, 1998.

On May 13, 1998, the Bee Line Monorail System, Inc.

("BLMS"), moved to intervene in support of the Department and the

RFP's specifications and filed a Motion to Dismiss Formal Written

Protests and Petitions for Formal Administrative Hearing in Case

Nos. 98-2171BID and 98-2172BID. A Voluntary Dismissal was filed

in the former case on May 19, 1998.

On May 20, 1998, BLMS was allowed to intervene, and final

hearing was scheduled for June 11, 1998.

A hearing was held on BLMS' Motion to Dismiss on May 26,

1998. Later that day, FOX filed an unopposed Motion for Leave to

Amend and Proposed Amended Written Protest and Petition for

Formal Administrative Hearing. Anticipating leave to amend, BLMS

filed a Motion to Dismiss the Amended Written Protest and

Petition for Formal Administrative Hearing on May 27, 1998.

Later on that day, FOX filed a Response to Motion to Dismiss.

The Motion to Dismiss the Amended Written Protest and

Petition for Formal Administrative Hearing asserted that FOX had

no standing to protest the specifications of the RFP because FOX

is not a prospective bidder.

On May 29, 1998, an Order Granting Leave to Amend and

Denying Motion to Dismiss was entered grant; however, FOX's

protest was limited to its interest in refining the RFP's

specifications and was not allowed to extend to efforts to enjoin

or cancel the RFP.

On June 3, 1998, BLMS' agreed Motion to Amend Prehearing

Order was granted, and final hearing was rescheduled for

June 16-17 and July 2, 1998, to accommodate witnesses.

The parties' Joint Prehearing Stipulation was filed on

June 15, 1998. On June 16, 1998, FOX called two witnesses and

had Petitioner's Exhibits 1 through 3 admitted in evidence.

Joint Exhibits 1 through 6 were then received in evidence. The

Department called one witness and had Department Exhibits 1 and 2

admitted in evidence. BLMS called one witness and had BLMS

Exhibits 1 and 2 admitted in evidence. On July 2, 1998, FOX

called one additional witness, and the parties rested their

cases.

The parties ordered the preparation of a transcript of the

final hearing and were given ten days from the filing of the

transcript in which to file proposed recommended orders. The

transcript was filed on July 15, 1998.

FINDINGS OF FACT

The Bee Line Expressway

1. The Bee Line Expressway, which carries the number

designation of State Road 528, extends from its western terminus

at Interstate 4 in Orange County, easterly across the St. Johns

River into Brevard County; it then extends slightly southerly

across Interstate 95, the Banana River, Indian River, and Merritt

Island; it ends at its eastern terminus at Port Canaveral in

Brevard County.

2. The portion of the Bee Line Expressway from Interstate 4

to approximately the Florida Turnpike is owned by the Respondent,

the Florida Department of Transportation ("the Department" or

"DOT"). The portion from approximately the Turnpike to the

vicinity of State Road 520, is owned by the Orlando-Orange County

Expressway Authority (the "Expressway Authority") and is subject

to a lease/purchase agreement between DOT and the Expressway

Authority. The portion from the vicinity of State Road 520 to

the center of the Intracoastal Waterway is owned by DOT. The

portion from the center of the Intracoastal Waterway to Port

Canaveral is owned by the Canaveral Port Authority (the "Port

Authority.")

3. Since the late 1980s there has been consideration of a

fixed guideway transportation system linking Orlando and the

Space Coast along the Bee Line Expressway. There were at least

two proposals prior to June 1997 to co-locate transportation

facilities along the Bee Line right-of-way. Such a system would

be in accordance with and advance Department policies and

responsibilities to develop new transportation systems to keep

pace with Florida's growth.

Bee Line Rail Unsolicited Proposal

4. In June 1997, the Department received an unsolicited

proposal titled "Proposal of Bee Line Rail System, Inc., for the

Development of a Monorail System along the Bee Line Expressway."

Since that time, the name of Bee Line Rail System, Inc. has been

changed to Bee Line Monorail System, Inc. ("BLMS"). BLMS

proposed the lease of certain Department properties along the Bee

Line Expressway (S.R. 528) for the construction and operation of

a rail system connecting a terminal at Cape Canaveral on the

eastern coast of Florida, a terminal at the Orlando International

Airport, and a terminal to be located near International Drive

adjacent to Interstate 4.

5. The BLMS unsolicited proposal became the impetus for the

Department's Request for Proposals ("RFP"), which is the subject

of this proceeding. Knowing that a rail line connecting the

Orlando area with the Space Coast had merit and would further

Department policies and responsibilities, the Department formed a

team of experts to write the RFP including the evaluation

criteria to be used in reviewing proposals submitted in response

to the RFP. The team worked together to develop the evaluation

criteria and to formulate the RFP in accordance with the

governing statute and rules. In the process of formulating the

RFP, the Department had discussions with the Expressway

Authority, the Canaveral Port Authority, and Florida Overland

eXpress (FOX), the Petitioner in this case. Each of these

entities' concerns were considered in the formulation of the RFP.

Specifically, DOT held several discussions with FOX and made

modifications to the RFP as a result. The RFP is substantially

different from the BLMS unsolicited proposal.

The Bee Line Expressway RFP

6. On April 17, 1998, DOT issued the RFP pursuant to

Section 337.251, Florida Statutes (1997). It consists of the

Request for Proposal Cover Page, the Evaluation Criteria for

Lease of S.R. 528 (Bee Line Expressway) Right of Way (the

"Evaluation Criteria"), and the Bee Line Lease Agreement. Each

part of the RFP contains specifications that describe the

information a proposer must provide in order to be responsive, as

well as the criteria by which the submitted information will be

evaluated. Responses to the RFP are due October 19, 1998.

7. The RFP solicited proposals for lease of the right-of-

way within the Bee Line Expressway (State Road 528) for the

purpose of establishing a transportation system (excluding

pipelines) connecting terminals and stations in Orange and

Brevard Counties, with an option to also lease right-of-way owned

by DOT along portions of State Road 407. Among other things,

proposals responsive to the RFP would have to clearly identify

the route for the proposed transportation system on aerial

photographs. (Evaluation Criteria, Part III, page 7) Proposals

would have to specify the services to be provided, whether they

would be for passengers, for freight, or for both, and the

locations of stations would have to be identified. (Evaluation

Criteria, Part V, page 9.) Proposers would have the option to

describe the specific technology to be deployed or to identify

the performance specifications to be achieved for a technology to

be specified at a later time. (Evaluation Criteria, Part VI,

pages 10-11.) Safety of proposed systems would have to be fully

explained including the identification of applicable federal and

state safety regulations. (Evaluation Criteria, Part VII, page

11; Bee Line Lease Agreement, Paragraph 5.) Proposed systems

would have to be in compliance with all applicable environmental

and land use requirements. (Evaluation Criteria, Part IX, page

13 and Part XII, page 15; Bee Line Lease Agreement, Paragraph 2.)

Constructability and maintenance of the proposed facilities would

have to be described. (Evaluation Criteria, Part X, page 13 and

Part XI, page 14.)

8. The RFP requires that proposals include the information

designated in the Department's Florida Administrative Code Rule

14-109.0011(4)(c). Among other things, the RFP requires that

proposals include:

The proposed design for the use of the space,

including facilities to be constructed, as

well as maps, plans and/or sketches as are

necessary to set out pertinent features in

relation to the transportation facility are

required by the RFP. (Evaluation Criteria,

Part III, page 7.)

A three -dimensional drawing and legal

description of the space to be leased is

required by the RFP. (Evaluation Criteria,

Part III, page 7.)

An explanation of all planned uses of the

property to be leased as well as all

activities to be conducted on the property is

required by the RFP. (Evaluation Criteria,

III, page 7 and V, page 9.)

Clarification Of The RFP

9. The RFP provides two methods of obtaining a

clarification about its requirements. A potential proposer is

required to attend a "Mandatory Pre-proposal Conference." (RFP

Cover page, 2.) (This conference had been scheduled for May 5,

1998, but was canceled due to the filing of the protests.) At

this meeting the attendees would be given the opportunity to ask

questions, and the Department would answer the questions, either

orally at the meeting, or in writing. In addition, any person

can submit a written request for clarification by a specified

date, which was to be July 6, 1998; within 21 days, the

Department would provide a written response. The request for

clarification and the Department's response would be provided to

all persons who attended the pre-proposal conference. (RFP Cover

page.)

Florida High Speed Rail Project

10. FOX's witnesses did not testify that the specifications

in the RFP were invalid. Indeed, David S. Gedney, chief project

executive for the FOX project, testified that FOX was not opposed

to the RFP, just the timing of its issuance. FOX focused on the

timing of the RFP and the way in which it might complicate FOX's

planning efforts in establishing and locating the Florida High

Speed Rail Project.

11. On February 28, 1995, the Department issued the High

Speed Rail Transportation System Request for Proposals that

solicited applications for a franchise for a high speed rail

transportation system to provide service to four designated

service areas--Tampa Bay (Hillsborough and Pinellas Counties),

Lakeland (Polk County), the Orlando area (Seminole, Orange, and

Osceola Counties), and Southeast Florida (Dade, Broward, and Palm

Beach Counties).

12. In April 1996, the Department awarded FOX the franchise

for a high-speed rail system to connect the four service areas

identified in the High Speed Rail Transportation System Request

for Proposals. Brevard County is not in one of the service areas

identified.

13. The award of the franchise was conditioned upon FOX and

the Department entering into certain post-franchise agreements

that would establish a solid foundation for the development of

the high-speed rail project. These agreements included a Finance

Post-Franchise Agreement (FPFA) to establish successful financing

for the endeavor and the Pre-Certification Post-Franchise

Agreement (PCPFA) to ensure the ultimate development and

certification of the project. The Department's Final Order

Awarding Franchise To Overland eXpress, L.P. - Franchise and

Terms and Conditions and the post-franchise agreements

collectively are referenced as the "Franchise."

14. In accordance with Section 341.3338, Florida Statutes

(1997), and the Final Order that awarded the Franchise, FOX has

the exclusive right to establish, and upon issuance of

certification, to locate, construct, operate, and maintain a high

speed rail transportation system that serves the geographical

areas identified. These exclusive rights only apply to high

speed rail transportation systems.

15. The Franchise does not grant to FOX an exclusive right

to provide high speed rail service to Brevard County, since that

county is not listed as a service area in the Franchise.

16. In addition to the exclusive rights granted by the

Final Order, the Department agreed to seek legislatively

additional provisions to secure the exclusivity of the FOX

Franchise and to protect the state's financial investment in the

project. These are contained in the Finance Post-Franchise

Agreement (FPFA). Specifically, the FPFA, provides, starting on

page 3:

§2.2 Exclusivity. Pursuant to § 341.3338,

Florida Statutes, and Article III, Section A

of the Franchise Document, FOX has the

exclusive right to plan, establish,

construct, operate and maintain the System

serving the service areas identified in the

Franchise Document. Subject to the enactment

of any necessary State legislation, as set

forth in Section 12.21 , the Department agrees

as set forth in Sections 2.2(a) through (e)

below:

(a) No Competing System. The Department

shall not permit any new or substantially

renovated fixed-guideway, inter-city

passenger transportation system (including

any high-speed rail transportation system)

which competes with the System and any

extensions thereof, it being understood that

such legislation should not limit the

development of feeder distribution systems.

* * *

(e) New Fixed-Guideway Inter-City Systems

In Florida. FOX (or, at the election of FOX,

any of the Sponsors or one or more Affiliates

of FOX or any of the Sponsors) shall have a

right of first refusal with respect to the

design, engineering, procurement,

construction, testing, commissioning,

operation and maintenance of any high-speed

rail transportation system in the State of

Florida other than the System in accordance

with terms and conditions to be agreed in the

Fixed-Guideway Development Post-Franchise

Agreement to be entered into by the

Department and FOX.

17. To ensure that the Department fully complied with the

Franchise, including the above agreement, the RFP included

specific protections for the FOX project in Part IV of the

Evaluation Criteria, titled "High Speed Rail Project."

(Evaluation Criteria, pages 8-9.)

18. To safeguard the Department's agreements with FOX, and

in particular Subsection 2.2(a) of the FPFA, relating to the

protection from competing systems, the RFP included information

requirements designed to protect the FOX Franchise and

specifically stated:

. . . The Department must ensure that this

proposed lease of the Bee Line expressway

right of way does not compete with or

otherwise adversely impact the FOX franchise.

(Evaluation Criteria, page 8.)

19. No proposal responsive to the RFP could compete with

the FOX project. While any reliable existing technology or

performance specifications that can be met by existing technology

are allowed to be proposed, the system proposed must not be

capable of operating in excess of 120 miles per hour.

(Evaluation Criteria, Part VI, pages 10-11.)

20. The Department also is in compliance with the terms of

Subsection 2.2(e) of the FPFA, relating to FOX's right of first

refusal. Subsection 2.2(e) only applies to a new high-speed rail

transportation system, and by definition a high-speed rail

transportation system must be capable of operating in excess of

120 miles per hour. Section 341.322(16), Florida Statutes

(1997). The RFP solicits a system that will not be capable of

operating in excess of 120 miles per hour. In any event,

Subsection 2.2(e) is not, as yet, effective because FOX and the

Department have not entered into the Fixed-Guideway Development

Post-Franchise Agreement.

21. A rail system proposed in response to the RFP would

complement the FOX system by providing passenger transportation

to specific destinations along the Bee Line Expressway, for

example to the Port of Canaveral, a destination not within a

service area to be served by FOX, or to the Orange County

Convention Center. Such feeder distributor functions of a Bee

Line rail system are specifically allowed by the FOX Franchise to

be developed by entities other than FOX.

22. At present, the physical alignment of the FOX project

is not known. FOX is currently in the preliminary phase of

developing the high-speed rail project. DOT has retained

consultants who are presently engaged in the early stages of

evaluating the potential environmental and socioeconomic effects

of the FOX project.

23. Under the National Environmental Policy Act (NEPA),

42 U.S.C. Sections 4321, et seq ., the Florida High Speed Rail

Project must undergo an extensive review of all aspects of the

proposed system. This review produces the Environmental Impact

Statement (EIS). NEPA mandates analyses of the need for the

project, a comparison of all reasonable alternatives and routes,

including the alternative of not doing anything, as well as the

impacts on the human environment for each alternative. The

review is anticipated to take more than two years. The

alternative routings undergoing NEPA review include alignments

co-locating with portions of the Bee Line Expressway.

24. Simultaneously with the NEPA review, the project will

be undergoing environmental review pursuant to a certification

process established by the Florida High Speed Rail Transportation

Act. This process, which is expected to take two to three years,

will result in the denial or approval of certification for the

project. The certification, which approves the final location of

the project, and which becomes the sole license and authority for

the project, is required prior to the construction and operation

of the system. The alignments for the high-speed rail

transportation system do not become final until the NEPA review

is completed and certification granted.

25. On December 12, 1997, the United States Department of

Transportation, Federal Railroad Administration (FRA), published

notice of a proposed rule setting safety standards for the FOX

High Speed Rail Project. These proposed safety standards, which

are premised on accident and collision avoidance, contain various

requirements to ensure that high-speed rail tracks remain free of

any intrusion that could cause a wreck, including the

requirements that the right-of-way be fenced, that physical

barriers be built where the line is adjacent to other

transportation systems, and that a detection and alarm system be

installed to alert and stop the train should any intrusion occur.

26. The proposed FRA rule would require FOX to develop a

system safety plan, which would describe FOX's system safety

program. FOX cannot finalize the design of its system until it

has developed its safety plan and completed the analysis required

by that plan. Since the system safety program established by the

plan will be a determining factor in deciding the exact right-of-

way for the FOX project, the exact right-of-way cannot be

determined until the at least the design portion of the system

safety plan is approved.

27. Alternatives for collision avoidance can be costly. A

berm, including the cost of additional land needed for such a

structure, could cost $300,000 per linear foot. A concrete

barrier would cost $1.8 million per mile. Elevation of the FOX

guideway would add $10 million per mile to the cost of

constructing the guideway.

28. If increased distance between FOX and another system

required FOX to diverge from the Bee Line right-of-way, resulting

in the need to purchase additional land, increased costs to the

project would be significant. Required eminent domain

proceedings also would be time-consuming. Increased

environmental permitting and mitigation also might result, at

additional costs in money and time. It was estimated that a year

of delay in the project would reduce FOX's bottom line by $200

million.

29. While the final alignment of the FOX Project may not be

known for years, there was no evidence that a rail system

constructed along the Bee Line Expressway in response to the RFP

would make it impossible for FOX to comply with FRA safety

standards. A separate transportation system using part of the

Bee Line right-of-way can be planned simultaneously with the FOX

system with proper coordination. It is not necessary to delay

the Bee Line Expressway RFP until after FOX has its alignment

fixed.

30. Planning the FOX Project and the Bee Line Expressway

RFP simultaneously may, but would not necessarily, increase the

construction cost of the FOX Project. Meanwhile, it might not be

possible to plan and implement a rail system along the Bee Line

Expressway after final alignment of the FOX project; if still

possible, logically, the costs of a rail system along the Bee

Line Expressway could increase if it had to be planned and

implemented after the final alignment of the FOX Project is

determined. Finally, delaying the Bee Line Expressway RFP until

after the FOX final alignment may only postpone, without totally

eliminating, additional costs to the FOX project. Whether nearby

transportation systems are in place initially or come after the

FOX project, the FRA will require FOX to take the measures

necessary to avoid collisions.

31. Delay in the issuance of the RFP delays the opportunity

for the establishment of a complementary system along the Bee

Line Expressway. It is in the public interest for both systems

to go forward in a coordinated matter. The sooner the systems

are implemented, the sooner the needs of Florida's traveling

public will be served.

32. It also is noted that the RFP does not set a date of

decision on proposals (except that the proposed Bee Line Lease

Agreement form is designed to accommodate a date before the turn

of the century.) In addition, the RFP Cover Sheet provides that

the Department can reject all proposals if they are not

satisfactory.

Property Not Owned By The Department

33. The RFP allows proposers to include in the proposal the

use of right-of-way owned by the Port Authority and Expressway

Authority. (Evaluation Criteria, Part I, page 1.) This is

allowed to give a proposer the opportunity to develop a rail

system along the Bee Line Expressway that has meaningful station

locations, and such locations may well be on, or require the use

of, a portion of the Bee Line Expressway owned by another agency.

There is merit for the system to connect the Port of Canaveral

with the Orlando International Airport, and the RFP gives the

proposer the opportunity to propose these as stations. It will

be up to the proposer to suggest the property ownership

relationship for those portions of the alignment not owned by the

Department and to obtain approval of the land owners for such

relationship. (Evaluation Criteria, Part I, page 1.) These

other agencies agreed to issuance of the RFP and are willing to

work with the Department to effectuate a rail system that both

the Department and the agencies can approve. The RFP clearly

requires that the land owners approve any proposal affecting

their ownership rights. (Evaluation Criteria, Part I, page 1.)

Compliance With Zoning and Land Use Plans

34. Part XII of the RFP's Evaluation Criteria requires

proposers to "demonstrate consistency to the maximum extent

feasible" with the applicable land use plans and "indicate the

extent of compatibility with existing and proposed land uses and

transportation systems." (Evaluation Criteria, Part IX, page 13

and Part XII, page 15.) The proposed lease agreement which is

part of the RFP specifies that the lessee is required to "conform

to and obey any present and future ordinances and/or rules,

regulations, requirements and orders of governmental authorities

or agencies respecting the use and occupation of said premises."

(Bee Line Lease Agreement, Paragraph 2.)

35. As drafted, the RFP simply recognizes that certain

aspects of local comprehensive plans may need to be modified,

since a proposed transportation facility may not have been

considered during plan development. A proposal may require a

comprehensive plan amendment to be in compliance; alternatively,

it is possible that a necessary variance could be obtained.

Milestones

36. The RFP allows for what it terms "milestones," which

are events and critical decisions that need to occur in

accordance with a schedule, because the Department recognizes:

Many requirements for system implementation

such as the total financing package, station

location selection, technology selection,

permitting, etc., probably will not be

finalized upon execution of a lease

agreement.

(Evaluation Criteria, Part I, pages 1-2.)

37. This milestone concept is necessary to ensure the

orderly development of the facilities on the leased premises.

The "milestones" are conditions precedent and conditions

subsequent that will become part of the business arrangement for

the lease.

38. The RFP gives proposers wide latitude to propose a

schedule for implementation of a proposal. The schedule will

include specific milestones for various activities. The

activities for which milestones are expected are identified in

the RFP. (Evaluation Criteria, Part I, pages 1-2; Part III, page

7; Part V, page 9; Part VI, page 11; Part VII, page 11; Part

VIII, page 12; Part IX, page 13; Part X, page 13, Part XI, page

14; Part XII, page 15; Part XIII, page 22; Part XIII, Subpart H,

page 23.) Proposers are to include in the proposal a schedule to

comply with the milestones. The Department would use this

information in evaluating the proposals. For the proposal

selected, the Department would also use this information to

establish a reasonable schedule for implementing the proposal.

The Department would use the "team approach" to ensure the

reasonableness of schedule, i.e. an expert in each milestone

subject area would be consulted.

39. Part I. A. of the Evaluation Criteria refers to

"technology selection" among items of milestone information

required for system implementation that "probably will not be

finalized upon execution of a lease agreement." FOX suggests

that this reference makes the RFP confusing as to whether the

technology proposed should be in the RFP response and subject to

evaluation in the proposal selection process.

40. Part I.B. of the Evaluation Criteria provides that:

[i]n determining whether to select or reject

a proposal the Department will consider and

balance all information required to be

submitted by the Request for Proposal and to

this extent each item of information

solicited is to be considered an evaluation

criterion. In its assessment of submitted

application, the Department will analyze the

information submitted in relation to the

information requirements of this RFP, the

provisions of Section 337.251, Florida

Statutes (1997), and Florida Administrative

Code Chapter 14-109, and will compare each

proposal to the other proposals submitted.

Under this provision, all information--including proposed

milestone schedules--will be subject to evaluation in the

proposal selection process.

41. The evidence was reasonably clear that the RFP was not

intended to defer the technology proposal to milestone

information. Part VI of the Evaluation Criteria is reasonably

clear that the technology proposed should be included in the RFP

response and not deferred to milestone information. See Finding

7, supra . In addition, it is implied throughout Part VIII of the

Evaluation Criteria, on "Operating Certification," that responses

to the RFP would include the actual technology proposed. Also,

while the RFP gives proposers flexibility in the selection of the

technology to be used, it specifies that "new" and "untried"

technologies are not to be proposed. (Evaluation Criteria, Part

VI, pages 10-11) The RFP is reasonably clear that it does not

defer the technology proposal to milestone information; rather,

it should be construed at most to afford the option of proposing

a milestone schedule for the "finalization" of the technology

selection.

42. FOX also suggests that the requirement of a milestone

schedule for ridership and revenue estimates in Part XIII.H. of

the Evaluation Criteria makes the RFP confusing as to whether the

ridership analysis should be included in the RFP response and not

deferred to milestone information. But Part IV of the Evaluation

Criteria clearly requires proposers to provide an "[a]nalysis of

the ridership of the proposed system by year and

origin/destination pair to identify potential diversion of

ridership and associated revenue from FOX." Part XIII.H

requires, in addition, milestone information for "ridership and

revenue estimates that are current (no more than six months old)

and certified by a nationally recognized consulting firm."

43. Part I.B. of the Evaluation Criteria should not cause

confusion as to whether information should be submitted at the

time of a response to the RFP in the form of milestones. Rather,

it simply makes clear that all information, including proposed

milestone schedules, will be considered as part of a proposal.

Logic and Fair Competition

44. The Department RFP and its specifications, which were

developed by a team of experts, are designed to further the

Department's transportation policies and are based upon sound

transportation concepts. Within the framework of the governing

statute and rules, the specifications are logical in that they

provide for the selection of a lessee who will use the leased

premises for a much-needed transportation system.

45. The specifications of the RFP apply to any entity

wishing to lease the Bee Line Expressway to develop a

transportation system that has a maximum speed capability of less

than 120 miles per hour. The specifications do not favor any

particular vendor of equipment or otherwise contain any

requirement that would be adverse to open competition by all

potential proposers desiring to respond to the RFP.

CONCLUSIONS OF LAW

46. Section 120.57(3)(b), Florida Statutes (1997), provides

in pertinent part:

Any person who is adversely affected by the

agency decision or intended decision shall

file with the agency a notice of protest in

writing within 72 hours after the posting of

the bid tabulation or after receipt of the

notice of the agency decision or intended

decision and shall file a formal written

protest within 10 days after filing the

notice of protest. With respect to a protest

of the specifications contained in an

invitation to bid or in a request for

proposals, the notice of protest shall be

filed in writing within 72 hours after the

receipt of notice of the project plans and

specifications or intended project plans and

specifications in an invitation to bid or

request for proposals, and the formal written

protest shall be filed within 10 days after

the date the notice of protest is filed.

FOX filed its protest of the RFP's specifications under this

statute.

Standing

47. The case law is clear that standing to protest agency

decisions concerning a contract award arising from the contract

bidding process under Section 120.57(3), Florida Statutes (1997),

is limited to bidders except in "exceptional circumstances." See

Ft. Howard v. Dept. of Management Services , 624 So. 2d 783, 785

(Fla. 1st DCA 1993)(bidder's supplier had no standing to protest

award to another bidder with a different supplier); Westinghouse

Elec. v. Jacksonville Transp. Authority , 491 So. 2d 1238, 1241

(Fla. 1st DCA 1986)(submission of ruse, instead of good faith

proposal, did not confer standing.) See also Brasfield & Gorrie

General Contractor, Inc., v. Ajax Construction Company, Inc., of

Tallahassee , 627 So. 2d 1200 (Fla. 1st DCA 1993)(non-bidder

construction company would have had no standing to protest award

and likewise had no standing to seek injunction of bidding

process.)

48. In principle, there would not seem to be any reason why

standing to protest agency decisions concerning bid solicitations

or requests for proposals (and their specifications) should be

treated any differently. In practice, however, since the bidding

has not yet taken place when these early agency decisions are

being made, it can be difficult if not impossible to ascertain

whether such a protester will be a bidder.

49. In this case, FOX initially did not allege that it

intended to respond to the RFP. After the Motion to Dismiss

FOX's original petition (and while maintaining that its

allegations were sufficient for standing,) FOX added the

allegation in paragraph 24 of the Amended Written Protest and

Petition for Formal Administrative Hearing that "FOX is a

potential respondent to the RFP." Prehearing, BLMS discounted

this additional allegation because, it contended, not only is

"potential" bidder status insufficient but also FOX's other

allegations ruled out all "potential" that FOX would respond to

the RFP.

50. While it seemed from the face of the Amend ed Written

Protest and Petition for Formal Administrative Hearing as well as

from FOX's Response to Motion to Dismiss improbable that FOX

would respond to the RFP, it could not be said that all

"potential" was ruled out at that time. It was not clear until

final hearing that FOX has no intention to respond to the RFP.

51. Nonetheless, it is concluded that FOX had standing to

protest the RFP specifications even though FOX is not a potential

bidder. The Ft. Howard and Westinghouse decisions contained

dicta that there can be "exceptional circumstances" that would

confer standing on a non-bidder to protest a bid award. But

neither defined the "exceptional circumstances," finding only

that they were not present in those cases. It is concluded that

FOX has a substantial interest in the RFP specifications because

they could affect FOX's statutory and contract rights as

Florida's exclusive high-speed rail transportation system

provider. It is concluded that this interest is the kind of

"exceptional circumstance" that is sufficient to support FOX's

standing in this case.

52. FOX also contended that the decision in Fairbanks,

Inc., v. Dept. of Transp. , 635 So. 2d 58 (Fla. 1st DCA 1994),

supports its standing in this case under the "exceptional

circumstances." But the Fairbanks court was careful to

distinguish that the case before it arose from a request for a

formal administrative proceeding under Section 120.57(1), not

from a bid protest under Section 120.53(5) [now 120.57(3),

Florida Statutes (1997)], Florida Statutes (1991). The court

implied that the result may have been different had the case

arisen from a bid protest. In addition, the Fairbanks court

distinguished the Ft. Howard decision, stating that the protester

in Ft. Howard would not have had standing under either Section

120.53(5) [now 120.57(3), Florida Statutes (1997)], or Section

120.57(1), Florida Statutes (1991). Fairbanks , at 61.

53. While it has been concluded that FOX has standing to

protest the RFP specifications, that does not mean FOX has

standing in this case to attempt to cancel the RFP altogether.

It is concluded that the purpose of bid protests under Section

120.57(3), Florida Statutes (1997), is to facilitate the contract

bidding process, not to enjoin it. (Even the ultimate rejection

of all bids as a result of a bid protest must be seen as

facilitating the contract bidding process, not enjoining it, as

it often results in re-bidding.) As a result, FOX's protest is

limited to its interest in refining the RFP's specifications; any

efforts to enjoin or cancel the RFP would have to take place in

some other proceeding.

Burden and Standard of Proof

54. Section 120.57(3)(f), Florida Statutes (1997),

Unless otherwise provided by statute, the

burden of proof shall rest with the party

protesting the proposed agency action. In a

competitive-procurement protest, other than a

rejection of all bids, the administrative law

judge shall conduct a de novo proceeding to

determine whether the agency's proposed

action is contrary to the agency's governing

statutes, the agency's rules or policies, or

the bid or proposal specifications. The

standard of proof for such proceedings shall

be whether the proposed agency action was

clearly erroneous, contrary to competition,

arbitrary, or capricious.

In this case, FOX had the burden of proving that the RFP's

specifications are contrary to the Department's governing

statutes, rules or policies; in so doing, FOX must show that

specifications are clearly erroneous, contrary to competition,

arbitrary, or capricious.

Timing of the Lease

55. Section 337.251(1), Florida Statutes (1997), provides

in pertinent part:

Leases under this section are subject to any

reservations, restrictions, or conditions

necessary to ensure adequate protection for

the safe and efficient operation and

maintenance of all transportation and utility

facilities, the adequacy of traffic flow, and

the full use of existing and future state

transportation facilities. Such joint

public-private use or commercial use of

property may not interfere with the primary

state transportation needs or present or

future utility needs for that property nor be

contrary to the best interests of the public.

FOX contends that the RFP is clearly erroneous, as contrary to

this statute, because FOX's right-of-way alignment and operating

envelope cannot be ascertained prior to submission of responses

to the RFP or a resulting lease.

56. While it does appear that the precise impact of a

resulting lease on FOX cannot be ascertained prior to submission

of responses to the RFP or a resulting lease, that does not

necessarily mean that the Department will be unable to proceed

with the RFP in a way that will meet the requirements of Section

337.251(1), Florida Statutes (1997).

57. While an adverse impact on the FOX Project may be

enough to support FOX's standing, Section 337.251(1) only

prohibits a lease that would "interfere with" the FOX project.

One of the express purposes of the RFP is to obtain proposals

that would not "interfere with" the FOX Project. It would be

premature at this time to conclude that the Department cannot and

will not receive a proposal that would enable the Department to

proceed with both projects in a way that would meet the

requirements of the statute.

58. FOX similarly also contends that the RFP's

specifications are clearly erroneous, arbitrary or capricious

because Parts III and IV of the Evaluation Criteria contain

requirements that cannot be met prior to submission of responses

to the RFP or a resulting lease. But, again, it is premature at

this time to conclude that the Department cannot and will not

receive a proposal that meets the RFP's requirements.

59. Part III of the RFP requires each proposer to describe

the proposed operating envelope and vertical alignment "within

the lease limits and at any point where this system crosses or

encroaches on any existing or proposed transportation

facilities." Clearly, it may not be possible to specify where a

proposed system would cross or encroach on the FOX system at this

time because the FOX system has not yet been "proposed" with

specificity. But just as clearly, a proposer could specify

crossing and encroachments with any existing systems and

specifically proposed systems (as well as with the FOX system to

the extent possible at this time), which is all the RFP requires.

60. Part IV of the RFP requires responses to contain "[a]n

analysis of the land to be leased showing it does not adversely

impact the potential physical alignment of the FOX system," as

well as "[a]n analysis of the ridership of the proposed system."

Certainly, such analyses are possible although they might be

limited by the uncertainty of the FOX system. Part IV simply

states that, using the analyses, the "Department must ensure that

[the lease] does not compete with or otherwise adversely impact

the FOX franchise." It is premature at this time to conclude

that the Department will not be able to "ensure that [the lease]

does not compete with or otherwise adversely impact the FOX

franchise."

61. FOX suggests that, to correct alleged deficiencies in

the timing of the lease, either the proposal submission date or

the date of decision must be postponed. However, it is noted

that the RFP does not set a date of decision on proposals. In

addition, the RFP Cover Sheet provides that the Department can

reject all proposals if they are not satisfactory.

Property Not Owned By The Department

62. Section 337.251(1), Florida Statutes (1997), also

provides in pertinent part:

The department may lease to public agencies

or private entities, for a term not to exceed

99 years, the use of department property,

including rights-of-way, for joint public-

private transportation purposes to further

economic development in this state and

generate revenue for transportation.

Florida Administrative Code Rule 14-109.001(2)(e) contains the

definition:

"Joint Public/Private Development" means the

leasing of Department-owned property,

including airspace, on which major

improvements will be constructed by the

lessee, the term of which shall not exceed 99

years, and the Department may accept cash,

goods, or services for rent, or a combination

of cash and goods or services for rent.

FOX contends that the RFP is clearly erroneous, as contrary to

this statute and rule, because the RFP covers property now owned

by the Orlando-Orange County Expressway Authority and by the

Canaveral Port Authority.

63. Neither the statute or rule prohibits the RFP as

issued. The statute and rule simply authorize the Department to

lease property it owns. Clearly, the Department cannot lease

land owned by others without the owners' consent. It is clear

that the Orlando-Orange County Expressway Authority and the

Canaveral Port Authority have participated in the formulation of

the RFP; the leasing entities logically have sought proposals

integrating leases from all three into a single proposed project,

and the Department initiated the RFP process on behalf of all

three. Part I.A. of the Evaluation Criteria of the RFP specifies

and makes clear that the Orlando-Orange County Expressway

Authority and the Canaveral Port Authority must approve any

proposed lease selected by the Department.

64. As the RFP is presently formulated, at some point after

the selection of a proposal, the Orlando-Orange County Expressway

Authority and the Canaveral Port Authority would have to convey

to the Department an interest in their property that the

Department could in turn lease (or perhaps sub-lease) to the

successful proposer. Proposals are expected to suggest how this

should be done. It is premature to invalidate the RFP at this

time.

Compliance With Zoning and Land Use Plans

65. Section 337.251(1), Florida Statutes (1997), also

provides in pertinent part:

The department may not lease any such

property if the proposed use conflicts with

zoning or land development codes of any

affected local government.

FOX contends that the RFP is clearly erroneous, as contrary to

this statute, because Part XII of the RFP's Evaluation Criteria

requires proposers to "demonstrate consistency to the maximum

extent feasible" with the applicable land use plans and "indicate

the extent of compatibility with existing and proposed land uses

and transportation systems." While the statute does not permit

the Department to lease property in conflict with local zoning

and land use planning, the RFP does not suggest that it will

result in a lease in violation of the statute. To the contrary,

the proposed lease agreement which is part of the RFP specifies

that the lessee is required to "conform to and obey any present

and future ordinances and/or rules, regulations, requirements and

orders of governmental authorities or agencies respecting the use

and occupation of said premises." The RFP appropriately and

logically requires information from which the impact of a

proposal on local zoning and land use planning can be assessed.

This information would let the Department know if a variance or

amendment from existing or proposed local zoning or land use

plans would be required.

Milestones

66. FOX makes several arguments with respect to alleged

flaws in the RFP's solicitation of milestone information. It

contends that the milestones inappropriately defer information

that should be provided at the time of the responses to the RFP;

allegedly, this results in the exclusion of evaluation criteria,

in violation of Florida Administrative Code

Rule 14-109.0011(4)(a)3. and Section 287.057(2), Florida Statutes

(1997).

67. Rule 14-109.0011(4)(a)3. provides that "[e]valuation

criteria for proposals shall be included in each Request for

Proposals pursuant to Section 287.057(2), Florida Statutes."

Section 287.057(2) requires that requests for proposals include:

"all contractual terms and conditions applicable to the

procurement . . ., including criteria . . . ."; it also requires

selection of the proposal "determined in writing to be the most

advantageous to the state, taking into consideration the price

and the other criteria set forth in the request for proposals."

68. FOX contends that parts of the RFP inappropriately

suggest that the selection of technology may be deferred and just

be milestone information. But it has been found that the RFP is

reasonably clear that this is not so. At most, the RFP merely

affords the option of proposing a milestone schedule for the

"finalization" of the technology selection.

69. Similarly, FOX contends that a part of the RFP

inappropriately suggests that the ridership analysis may be

deferred. But it has been found that this clearly is not so.

The RFP merely requires, in addition to the ridership analysis

required to be submitted with responses to the RFP, milestone

information for "ridership and revenue estimates that are current

(no more than six months old) and certified by a nationally

recognized consulting firm."

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Department of Transportation enter a

final order denying FOX's protest and upholding the RFP's

specifications.

DONE AND ENTERED this 6th day of August, 1998, in

Tallahassee, Leon County, Florida.

___________________________________

J. LAWRENCE JOHNSTON

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 6th day of August, 1998.

COPIES FURNISHED:

Martha Harrell Chumbler, Esquire

Carlton, Fields, Ward, Emmanuel,

Smith & Cutler, P.A.

Post Office Drawer 190

Tallahassee, Florida 32302

Betty J. Steffens, Esquire

210 South Monroe Street

Tallahassee, Florida 32301

John C. Bottcher

Assistant General Counsel

Department of Transportation

605 Suwannee Street

Tallahassee, Florida 32399-0450

Peter Antonacci, Esquire

George N. Meros, Jr., Esquire

Rumberger, Kirk & Caldwell, P.A.

Post Office Box 10507

Tallahassee, Florida 32392-2507

Thomas F. Barry, Secretary

Attention: Diedre Grubbs

Department of Transportation

Haydon Burns Building

605 Suwannee Street, Mail Station 58

Tallahassee, Florida 32399-0450

Pamela Leslie, General Counsel

Department of Transportation

Haydon Burns Building

605 Suwannee Street, Mail Station 58

Tallahassee, Florida 32399-0450

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15

days from the date of this Recommended Order. Any exceptions to

this Recommended Order should be filed with the agency that will

issue the final order in this case.