99-001192BID Nationwide Credit, Inc. vs. Department Of Education Status: Closed Recommended Order on Friday, June 11, 1999.

Summary: Petitioner failed to establish facts to show that the Department of Education`s proposed action was contrary to its governing statutes, rules or policies, or proposal specifications.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

NATIONWIDE CREDIT, INC, )

)

Petitioner, )

)

vs. ) Case No. 99-1192BID

)

STATE OF FLORIDA, DEPARTMENT )

OF EDUCATION, )

)

Respondent. )

____________________________________)

RECOMMENDED ORDER

Upon due notice, William R. Cave, an Administrative Law

Judge for the Division of Administrative Hearings, held a formal

hearing in this matter on April 15, 1999, in Tallahassee,

Florida.

APPEARANCES

For Petitioner: Martha Harrell Chumbler, Esquire

Michael P. Donaldson, Esquire

Carlton, Fields, Ward, Emmanuel,

Smith, and Culter, P.A.

Post Office Box 190

Tallahassee, Florida 32302

For Respondent: H. Richard Bisbee, Esquire

Theresa M. Bender, Esquire

Blank, Rigsby, and Meenan, P.A.

204 South Monroe Street

Tallahassee, Florida 32301

STATEMENT OF THE ISSUES

1. Was the Department of Education's (Department) refusal

to review and evaluate Nationwide Credit, Inc.'s (Nationwide)

response to the Department's Request for Proposal, Collection

Services for Defaulted Florida Guaranteed Student Loans and

Delinquent Florida Teacher Scholarships Loans, No. 99-06 (RFP)

contrary to governing statutes and rules, clearly erroneous,

contrary to competition, arbitrary, or capricious?

2. Was the Department's failure to consider the reason for

Nationwide's untimely delivery of its response to the RFP

contrary to governing statutes and rules?

PRELIMINARY STATEMENT

This cause is a challenge to the Department's refusal to

review and evaluate Nationwide's response to the Department's

RFP. The RFP was issued by the Department on October 9, 1998.

Nationwide filed a Formal Written Protest and Petition for

Administrative Hearing (Petition) on February 26, 1999. On

March 11, 1999, an informal meeting was held which proved to be

unsuccessful. The Petition was then forwarded to the Division of

Administrative Hearings (Division) by the Department for the

assignment of an Administrative Law Judge and for the conduct of

a hearing. The undersigned Administrative Law Judge was assigned

to hear this matter and a hearing was scheduled for

April 15, 1999.

At the hearing, Nationwide presented the testimony of

David Lubets. Nationwide's Exhibits Numbered 1A-1C and 2 were

received as evidence. The Department presented the testimonies

of Henry C. Bergmann (incorrectly spelled in trial Transcript as

"Burgmann") and Ashley Roseborough. Department's Exhibits

Numbered 1 and 2 were received as evidence. Joint Exhibits

Numbered 1-6 were received as evidence. Chapter 287, Florida

Statutes; Rules 60A-1.001 and 60A-1.002, Florida Administrative

Code; and Form PUR 7033 Revised 6/1/98, Request for Proposal were

officially recognized. On May 4, 1999, subsequent to the filing

of the Transcript but prior to the filing of the parties'

proposed recommended orders, Nationwide filed a Request for

Judicial Notice and Motion to Supplement the Record which shall

be treated as a request for official recognition. After

consideration of it, the request was granted and the Department

of Education's Motion to Relinquish Jurisdiction and Remand to

Agency, in Collection Technology, Inc, vs. Department of

Education , Case No. 99-1901BID and the Department's same motion

in NCO Financial Inc. vs. Department of Education , Case No. 99-

1902BID , were officially recognized.

A Transcript of this proceeding was filed with the Division

on April 29, 1999. The parties filed their Proposed Recommended

Orders.

FINDINGS OF FACT

Upon consideration of the oral and documentary evidence

adduced at the hearing, the following relevant findings of fact

are made:

1. Nationwide is a foreign corporation authorized to do

business in the State of Florida. Nationwide is in the business

of collecting defaulted student loans and has worked with the

State of Florida, and specifically the Department, for

approximately nine years.

2. On October 9, 1998, the Department issued RFP No.99-06,

which solicited proposals for the provision of collection

services for defaulted student loans. The technical requirements

and requests found in the RFP were prepared by the Office of

Student Financial Affairs (OSFA) which was the section within the

Department requesting the services and the section which

ultimately performed the review and evaluation of the responses

to the RFP.

3. The initial deadline for receipt of responses to the RFP

was 3:00 p.m. Eastern Standard Time (EST) on December 3, 1998.

The responses were to be delivered to the Department's Office of

Purchasing for initial inspection and distribution to OSFA.

4. The Department, through four separate RFP addenda,

received and accepted by Nationwide, revised and postponed the

response deadline until January 20, 1999, at 3:00 p.m. EST. The

postponement was caused by the delay of the Department responding

to questions posed by prospective vendors during the question and

answer portion of the RFP procurement process.

5. Nationwide had been prepared to submit it proposal to

the Department on the date of the previous deadlines.

6. The Department scheduled the deadline for receipt of

proposals at 3:00 p.m. to accommodate those prospective vendors

who used third-party delivery services.

7. The response review process as established by the RFP

consisted of the following: (a) a review of the technical

components to be completed by February 3, 1999; (b) a cost

proposal evaluation to be completed by February 9, 1999; and (c)

a posting of intended award by February 16, 1999. In accordance

with the RFP, multiple contracts were to be entered into based on

the highest ranked responses. The actual signing of these

contracts was not to occur until March 1999, after approval of

the awards by the State Board of Education.

8. Nationwide has previously provided the Department with

the same services called for by the RFP. It was Nationwide's

wish that it continue to provide those services and accordingly,

its employees expended between 50 and 70 hours preparing

Nationwide's response.

9. On January 19, 1999, Nationwide, from its office in

Marietta, Georgia, utilized a third party, Federal Express, to

deliver Nationwide's response to the Department's RFP.

Nationwide's general business practice is to use Federal Express

and there has never been a problem with late delivery.

Nationwide does not have an office in Tallahassee, Florida.

Nationwide's only Florida office is in south Florida.

10. Nationwide directed Federal Express to ship its

response to the RFP by Priority Overnight Service and further

directed Federal Express to deliver Nationwide's response to the

RFP to the Department by 10:00 a.m. EST on January 20, 1999.

These instructions to Federal Express were clearly reflected on

the Airbill. Federal Express picked up Nationwide's proposal at

1:20 p.m. EST on January 19, 1999. Due to an error in the

Federal Express distribution process, Nationwide's response to

the RFP was not delivered to the Department until January 21,

1999, at 10:41 a.m. EST.

11. Nationwide did not contact the Department on

January 20, 1999, after 10:00 a.m. EST (the time Federal Express

was to deliver Nationwide's proposal) to determine if its

proposal had been delivered timely by Federal Express.

12. There was sufficient time between 10:00 a.m. and

3:00 p.m. on January 20, 1999, for Nationwide to hand deliver its

proposal to the Department had Nationwide been aware that its

proposal had not been delivered by Federal Express as requested

by Nationwide.

13. Eighteen responses were submitted to the Department's

Office of Purchasing prior to 3:00 p.m. EST on January 20, 1999.

In order to ensure that no vendor had access to another vendor's

proposal, the proposals were locked in a secured room. At

3:01 p.m. EST on January 20, 1999, the Office of Purchasing

physically opened the 18 responses that were timely submitted and

in its possession. The Office of Purchasing then conducted an

initial review which included a tabulation of the responses to

ensure that all responses satisfied procedural requirements. The

timely proposals were also inspected to ensure that the

appropriate transmittal letter was enclosed. The Office of

Purchasing did not open the technical or price components of the

responses.

14. Once the initial review was completed by the Office of

Purchasing, the proposals were sent to OSFA for purposes of

conducting the detailed technical review contemplated by the RFP.

The initial review by the Office of Purchasing took two days, and

the proposals were not forwarded to OSFA until around

January 25, 1999.

15. At the time Nationwide's proposal was received by the

Department, the Office of Purchasing was still in the process of

completing its initial review. None of the timely proposals had

been forwarded to OSFA for detailed review at this time.

16. By letter dated January 27, 1999, the Department

advised Nationwide that its proposal had been received after the

deadline and that its proposal must be "retrieved no later than

February 15, 1999." At this time, the evaluation of the

technical and costs proposals by OSFA had not been completed.

The Department similarly advised another vendor whose proposal

had been received 30 minutes after the deadline. Nationwide did

not retrieve its proposal, and it still remains in an unopened

state with the Department.

17. The Department rejected Nationwide's proposal without

any consideration being given to the circumstances surrounding

the untimeliness of Nationwide's proposal. At the time

Nationwide's proposal was rejected, the Office of Purchasing had

knowledge of the fact that Nationwide had submitted its proposal

to Federal Express in advance of the due date and in sufficient

time to be delivered timely to the Department.

18. On February 8, 1999, after contacting the Office of

Purchasing to determine the reasons for the rejection of its

proposal, Nationwide provided the Department with a written

explanation from Federal Express explaining why Nationwide's

proposal was untimely. Nationwide then requested the Department

to consider the circumstances and use its discretion to waive the

late filing and review the proposal.

19. By letter dated February 12, 1999, the Department

advised Nationwide that it was unable to consider Nationwide's

untimely proposal. It is the Department's policy that, under the

purchasing rules of the State of Florida, it should never

consider or review a proposal received from a vendor after the

date and time specified in the RFP regardless of the reason for

the untimeliness. However, the Department did indicate that it

may waive that policy where the untimeliness is due to an "act of

God," such as a tornado or hurricane, which prevented timely

delivery or resulted in the Department's office being unable to

accept delivery in a timely fashion.

20. General Conditions, Paragraph 3, of Form PUR-7033,

revised 6/1/98, provides in relevant part as follows:

PROPOSAL OPENING: Shall be public, on the

date, location, and the time specified on the

acknowledgement form. It is the proposer's

responsibility to assure that this proposal

is delivered at the proper time and place of

the proposal opening. Proposals which for

any reason are not so delivered, will not be

considered. (Emphasis furnished.)

21. Section 40.16 of the RFP provides as follows:

40.16 PUBLIC OPENING OF PROPOSALS

Each proposal will be dated, time-marked, and

logged by the department as received. Each

will also be examined to verify that it is

properly addressed and sealed. Any proposal

received after the specified date and time

for receipt of proposals will be rejected and

returned unopened to the contractor.

(Emphasis furnished.)

22. Section 40.17 of the RFP provides as follows:

40.17 REJECTION OF PROPOSALS

Proposals which do not conform to the

requirements of this Request for Proposal may

be rejected by the department. Proposals may

be rejected for reasons which include, but

are not limited to, the following:

* * *

The proposal is received late. (Emphasis

furnished.)

23. Section 40.15 of the RFP provides as follows:

40.15 ACCEPTANCE OF PROPOSALS

* * *

The department also reserves the right, in

its sole discretion, to waive minor

irregularities in proposals . A minor

irregularity is a variation from the Request

for Proposal which does not affect the price

of the proposal, or give the contractor an

advantage or benefit not enjoyed by other

contractors, or adversely impact the interest

of the department . (Emphasis furnished.)

CONCLUSIONS OF LAW

24. The Division of Administrative Hearings has

jurisdiction over the parties and the subject matter of this

proceeding pursuant to Section 120.57(1), Florida Statutes.

25. Section 120.57(3)(f), Florida Statutes, provides as

follows:

(f) In a competitive-procurement protest, no

submissions made after the bid or proposal

shall be considered. 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. . . . (Emphasis

furnished.)

26. Clearly, Nationwide has failed to establish facts to

show that the Department's proposed action is contrary to its

governing statutes, rules or policies, or proposal

specifications. While the Department may have the discretion to

accept and review an untimely proposal, it has always been its

policy not to exercise that discretion, except possibly in

situation where the untimeliness is caused by an "act of God."

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Department enter a final order

dismissing Nationwide's protest.

DONE AND ENTERED this 14th day of June, 1999, in

Tallahassee, Leon County, Florida.

___________________________________

WILLIAM R. CAVE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 14th of June, 1999.

COPIES FURNISHED:

Tom Gallagher

Commissioner of Education

The Capitol, Plaza Level 08

Tallahassee, Florida 32399-0400

Michael H. Olenick

General Counsel

Department of Education

The Capitol, Suite 1701

Tallahassee, Florida 32399-0400

Martha Harrell Chumbler, Esquire

Michael P. Donaldson, Esquire

Carlton, Fields, Ward, Emmanuel

Smith, and Culter, P.A.

Post Office Box 190

Tallahassee, Florida 32302

H. Richard Bisbee, Esquire

Theresa M. Bender, Esquire

Blank, Rigsby, and Meenan, P.A.

204 South Monroe Street

Tallahassee, Florida 32301

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit 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.