President Proposes Changes to FLSA Regulations

In an article yesterday, the President announced that he would be proposing changes to FLSA overtime and minimum wage exemptions. These changes, if approved will have a significant impact on many business who rely on executive or administrative exemptions to the FLSA. These exemptions permit an employer to pay a straight salary to certain employees even when those employees work more than 40 hours per week. Without these exemptions, the employer would be required to pay the employee one and one half times his regular rate of pay for each hour over 40. These proposed changes mean that fewer employees will be eligible for these exemptions.

The Law, the Rules, and the Proposed Changes

Section 213(a)(1) of the Fair Labor Standards Act (“FLSA”) provides that employees “employed in a bona fide executive, administrative, or professional capacity” are not subject to the minimum wage and overtime provisions of the FLSA. The rules defining these employees provide, among other things, that the employee must be “[c]ompensated on a salary basis at
a rate of not less than $455 per week.” 29 CFR Sections 541.100(a)(1) & 541.200(a)(1). Based upon this, employees who meet the other requirements of an executive or administrative employee, who are paid at least $23,660 a year, do not need to be paid a minimum wage nor do they need to be paid one and one half times their regular rate when they work more than 40 hours in a week.

The President plans to have this amount increased to $50,400 per year (almost $970.00 per week) in 2016. While this change will most likely affect executive, administrative, and professional employees, from a practical standpoint, this will largely affect companies using the executive and administrative exemptions.

Executive Employees
In addition to the salary requirements, to meet the executive exemption, the employee must:

  • Have a primary job duty of “management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof;”
  • “[C]ustomarily and regularly [direct] the work of two or more other employees;”
  • Have “the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight.”

29 CFR Section 541.100(a).

Management activities include: “interviewing, selecting, and training of employees; setting and adjusting their rates of pay and hours of work; directing the work of employees; maintaining production or sales records for use in supervision or control; appraising employees’ productivity and efficiency for the purpose of recommending promotions or other changes in status; handling employee complaints and grievances; disciplining employees; planning the work; determining the techniques to be used; apportioning the work among the employees; determining the type of materials, supplies, machinery, equipment or tools to be used or merchandise to be bought, stocked and sold; controlling the flow and distribution of materials or merchandise and supplies; providing for the safety and security of the employees or the property; planning and controlling the budget; and monitoring or implementing legal compliance measures.” 29 CFR Section 541.102.

Administrative Employees

In addition to the salary requirements, to meet the administrative exemption, the employee’s primary job duty must be the “performance of office or non-manual work directly related to the management or general business operations” and must include “the exercise of discretion and independent judgment with respect to matters of significance.” 29 CFR Section 541.200(a). As examples of administrative employees, the CFR lists administrative assistants to business owners and executives, project leads, human resource managers, employees in the financial service industry, and insurance claims adjusters.

Conclusion

The President expects these rules to be in place by the end of the year. This means that employers relying on the administrative and executive exemptions to the FLSA need to closely follow these rule changes and be prepared to reevaluate their exemptions upon their passing. This is a significant, over 100%, increase in the salary threshold to meet these exceptions. As these are rule changes, not legislative changes, the approval of congress is not needed. However, there is a procedure which must be followed for any change to the CFR (outlined here).

If you have questions or concerns regarding these exemptions, the proposed rule changes, or any other employment law mater, please contact the experienced professionals at Smith & Associates for a free consultation.

Local Bid Protests – You Can Fight City Hall: Protesting Your County, Municipality, or District, Procurement Decisions

Introduction

This article provides a brief overview of local government bid protest procedures. Unlike the state bid protest process, which is primarily governed by Florida state statutes and rules1, and is discussed at length in our previous article, “Bid Protests: Know Your Rights – the Clock is Ticking” at http://smithlawtlh.com/bid-protests-know-your-rights-the-clock-is-ticking/ (“State Bid Protest article”), the bid protest procedures for local government entities (counties; municipalities — cities, towns, villages; special districts) vary with each particular local authority.

In Florida, there are 67 counties, 282 cities, 109 towns, 19 villages, and over 1600 Special Districts2, and there is no uniform process or procedure for challenging the procurement decisions of each local entity. While the same substantive arguments typically raised in state agency bid protests (e.g., non-responsive bids, non-responsible bidder issues, bias/favoritism, arbitrary scoring, ex-parte communications)3, can often be raised when challenging local government entity decisions, the procedural process and timing for local government entity bid protests is not controlled by state statutes.4 Instead, the process varies for each county, municipality, and special district, depending on their individual authorizing charters, ordinances, procurement codes, and policies.

Some local government entities expressly adopt or follow, in whole or in part, the state procurement process and state procedures for challenging bid awards5, but more often the local government entities create their own procurement process and procedures, which are governed by their individual charters, ordinances, rules, as well as by their specific bid proposals (e.g., ITB, RFP specifications). In addition, judicial precedents and Florida’s strong public policy in favor of fair competition (discussed briefly below, and in more detail in our State Bid Protest article) provide avenues for challengers to contest unfair and arbitrary bid award decisions.

No Uniformity: Examples of Various Local Government Entity’s Bid Protest Procedures

As discussed at length in our prior State Bid Protest article, there is a uniform and rather straightforward bid protest process for challenging state agencies: the timeframe for bringing a notice of protest challenging a state agency’s bid solicitation specifications is 72 hours from date of posting of award, and the protester then has an additional 10 days after the notice of protest to file its formal written protest. The timeframes for challenging intended state agency awards are consistent with the timeframes for challenging solicitation specifications: 72 hours from the posting of the contract award to file a notice of intent to protest, and 10 days thereafter to file the formal written protest of intended award.

After receipt of a bid protest, the process thereafter is also relatively straightforward and uniform with regard to state agency bid protests: upon receipt of the formal written protest, the agency shall attempt to resolve the protest by mutual agreement within 7 days. If there is no mutual resolution of the protest within the 7 days after receipt of written protest, and there are disputed issues of material fact, the agency shall refer the protest to the Division of Administrative Hearings for assignment of an Administrative Law Judge to conduct a hearing within 30 days, and shall issue a Recommended Order (RO) within 30 days after the hearing (or within 30 days from receipt of the hearing transcript, whichever is later). Each party shall have 10 days to file written exceptions to the RO, and a Final Order (FO) shall be entered by the agency within 30 days after entry of the RO. See 120.57(3), Florida Statutes.

In contrast, the bid protest process for challenging local government entities is far from uniform and simple, as it varies within each specific local entity. In other words, each county, city, township, district has its own bid protest process.

Below are just a few examples from various county, village, city, and district governing procurement documents in order to demonstrate the complexity and lack of uniformity in local bid protest procedures, and the need for experienced legal counsel to represent vendor interests in any challenge to a local government entity’s competitive bidding process.6

County Example: Miami-Dade County

The primary governing procurement document for Miami-Dade County is Implementing Order 3-21, entitled Bid Protest Procedures. See http://www.miamidade.gov/aopdfdoc/aopdf/pdffiles/IO3-21.pdf.

Protests of Solicitation Specifications: Pursuant to Implementing Order 3-21, written protests of solicitation specifications must be brought at least two days prior to the hour of bid opening or will be deemed waived. (“Any question, issue, objection or disagreement concerning, generated by, or arising from the published requirements, terms, conditions or processes contained in the solicitation document shall be deemed waived by the protestor and shall be rejected as a basis for a bid protest, unless it was brought by that bidder or proposer to the attention, in writing, of the procurement agent, buyer, contracting officer or other contact person of the County department that issued the solicitation document, at least two work days (not less than 48 hours) prior to the hour of bid opening or proposal submission.”). Compare to Florida Statutes governing state agency protests, which provides that a “notice of protest” of state agency solicitation specifications shall be made within 72 hours of the posting of the solicitation, and the “formal written protest” shall be filed 10 days after the “notice of protest.”

Protest of Intended Contract Award: With respect to formal (concerning contract award amounts over $250,000) and informal (concerning contract award amounts between $25,000 and $250,000) bid protests of intended contract awards, bidders/proposers may protest an award recommendation by filing a written intent to protest within three work days of the filing of the award recommendation. The bidder/proposer must then file its formal written protest (including all pertinent documents and supporting evidence) within three work days after the filing of the intent to protest. (Compare section 120.57(3)(b), Florida Statutes, regarding protest deadlines for challenging state agency awards, which provides that the notice of protest must be filed 72 hours from the posting of the notice of intent, and the formal written protest must be filed within 10 days after the date the notice of protest is filed).7 Thus, Miami-Dade County’s timeframes for filing a written protest significantly differ from those outlined in Florida Statutes regarding challenging state agency decisions, and failure to adhere to the more stringent timeframes in the local administrative order may result in waiver of the right to protest.

The protest shall be filed with the Clerk of the Board of the County Commission, and, depending on the intended contract award amount, may thereafter be referred to a hearing examiner appointed by the Clerk of the Board within 5 days after the filing of the written protest, and, if so referred, a hearing will be conducted within 10 days thereafter. The hearing examiner will issue a Recommended Order (RO) within 5 days of the hearing.

Hearing Process Dependent on Contract Award Amount: Depending on the contract amount in question, the hearing process proceeds differently. Intended contract award bid protests concerning expenditures over $250,000 and that exceed the county manager’s delegated authority, proceed as follows: the hearing examiner’s findings and recommendation shall be presented to the Commission by the County Manager together with the recommendation of the County Manager. If the hearing examiner’s recommendation concurs with the County Manager’s recommendation, the Commission shall not allow presentations by participants at the time the matter is presented to the Commission, and a 2/3 vote of the Commission shall be required to take action other than that which was recommended. If the hearing examiner does not concur in the County Manager’s recommendation, the participants in the competitive process and their representatives may make presentations to the Commission and the Commission shall decide the matter by majority vote.

In contrast, protests where the amount in question is over $250,000 but does not exceed the County Manager’s delegated authority, proceed as follows: if the hearing examiner concurs in the award recommendation of the Department of Procurement or other issuing department, the department shall be bound thereby and shall implement such recommendation within 5 days. If the hearing examiner does not concur in the award recommendation, the Director of the Department of Procurement Management or of the issuing department shall either accept the hearing examiner’s recommendation and implement such recommendation with 5 days, or shall submit a written recommendation to the County Manager with 5 days stating the reasons why the County Manager should approve the department’s recommendation, despite the hearing officer’s recommendation, and the County Manager shall, within 5 days, choose either the department’s or the hearing examiner’s recommendation and instruct the department to implement such recommendation.

For intended contract awards under $250,000 but over $25,000, the procedure is as follows: the issuing Department Director shall review the protest, and after consultation with the County Attorney, shall issue a report and recommendation within 20 days of the filing of the protest stating the Department’s recommendation. The Department Director’s findings shall be forwarded to the County Manager for final determination and disposition of the protest. There will be an opportunity to settle the protest within 5 days of the filing of the protest.

In addition to Implementing Order 3-21, Miami-Dade County’s procurement process is governed by its Charter and County Code, specifically section 2-8.4 of the Code of Miami-Dade County, entitled “Protest Procedures.” (See http://miamidade.fl.eregulations.us/code/cid10620/2-8.4/) Moreover, all county vendor contracts in Miami-Dade County are subject to the General Terms and Conditions found at: http://www.miamidade.gov/procurement/library/boilerplate/general-terms-and-conditions.pdf.

Municipality Example: The Village of Wellington’s (“Wellington”)

The Village of Wellington’s procurement process is governed primarily by its Purchasing Manual, as well as by the requirements outlined in the specific ITB/RFP at issue. The Purchasing Manual establishes specific directions, guidelines and requirements for purchasing, and states that all purchases “shall be in accordance with this Manual…” (See Purchasing Manual at http://wellingtonfl.gov/images/stories/departments/Purchasing/docs/Code_and_policy/Final%20Purchasing%20Manual%202014.pdf.)

With regard to ranking bids, Wellington’s Purchasing Manual specifies the criteria to be used to decide a tie if two or more bids are tied. One factor that may be considered is the date and time that the bid was received by Wellington. In other words, if there’s a tie, and if other specified criteria do not resolve the tie, Wellington will consider which bid was received first in awarding the contract. These types of details and nuances specific to each locale are very important for vendors to be aware of prior to submitting their bids, as they may very well impact the outcome of the award.

Protests of Solicitation Specifications: With regard to protesting solicitation specifications, Wellington’s purchasing manual provides that prospective bidders must file its written protest to the solicitation within three days after the advertising/posting of the competitive solicitation. (“A prospective bidder, proposer or offeror may submit a protest in writing to the Purchasing Manager challenging the terms, conditions, or specifications of a competitive solicitation, including any provision governing the methods for ranking bids, proposals, or replies, awarding contracts, reserving rights of further negotiation, or modifying or amending any contract…. The protest must be filed in three (3) days . . . after the public posting… Failure to file a protest as to the terms, conditions, or specifications of a competitive solicitation shall be deemed a waiver of the right to protest on those grounds.”). Compare Florida Statutes, which provides that only a “notice of protest” to a solicitation specification must be filed within three days, and that the formal written protest may be filed ten days thereafter.

Protest of Intended Contract Award: Similarly, Wellington’s procedure for challenging an intended award of a bid contract also requires that the formal written protest be made within three days of the notice of intended award. Again compare Florida Statutes, which provides that only a “notice of protest” must be filed within three days, and that the formal written protest may be filed ten days thereafter.

Thus, Wellington’s truncated timeframes vary significantly from those required pursuant to Florida Statutes governing challenges to state agency solicitation and intended awards. It is crucial that bid proposers are aware of the local government entity’s timeframes, which often vary greatly from those specified in Florida Statutes, in order to ensure that no rights are waived.8

Bid Protest Process: The process for Wellington’s bid protests is as follows: the written protest must be submitted to the Purchasing Manager of the Purchasing Division within three days of the notice of intended award. Within 7 days of receipt of the written protest, the Purchasing Manager shall attempt to settle or resolve the dispute, with or without a hearing and within his/her sole discretion, and shall render a written decision. Any person aggrieved by the decision of the Purchasing Manager may appeal to the Village Manager within 7 days from the date of the Purchasing Manager’s decision. The Manager shall attempt to resolve the matter, with or without a hearing and within his/her sole discretion, and shall render a decision within 7 days following receipt of the appeal.

Discretionary Hearing: In the event that either the Purchasing Manager or Manager decides to conduct a hearing, such hearings shall be informal and Florida Rules of Evidence shall not apply. All evidence of a type commonly relied upon by reasonably prudent persons may be considered, and other bidders or proposers who have standing to intervene may be permitted to participate in the hearing.

Appeal to Council: The Manager’s decision shall be final and conclusive unless the protestor files a written appeal directly with Wellington’s Council within 3 days of the Manager’s decision. The Council shall consider the appeal within 30 days, and shall hold a quasi-judicial evidentiary hearing on the appeal. Failure to follow these protest procedures shall nullify any protest.

Special District Example: The Canaveral Harbor Port District (Canaveral Port District).

The Canaveral Harbor Port District (Canaveral Port District), created by the Florida Legislature and encompassing approximately one-half of Brevard County, Florida, is primarily governed by its Charter (Chapter No. 2014-241, Laws of Florida Special Acts of 1953, as amended). (See http://www.portcanaveral.com/PortCanaveral/media/Publications/2014Charter.pdf). The procurement process for the Canaveral Port District is addressed in Article XVII of its Charter, entitled, “Contracts; Competition.” While the Charter briefly discusses the bid proposal process and specifies that competitive bidding shall be enforced when contracts exceed $100,000, it is silent with regard to any procedure or process for challenging bid awards. Thus, those wishing to challenge are left with little guidance regarding the procedure for doing so. Florida Statutes, case law, public policy, the specific ITB or RFP criteria and instructions, and resort to Circuit Court will thus be instrumental in any protest.

Other Non-State Agency Protest Example9 – University of North Florida (“UNF”)

In Florida, there are 12 state universities, and 28 community and state colleges10, and each has its own procurement process. For example, University of North Florida’s procurement process is governed by its Purchasing Regulations, specifically 13.0020R, entitled “Notice and Protest Procedures Related to a University Contract Procurement Process” (See https://www.unf.edu/president/policies_regulations/13-Procurement_Services/13_0020R.aspx), as well as the Board of Governors’ Regulations 18.002 and 18.003.

Protests of Solicitation Specifications: Similar to the bid protest process for state agencies, UNF’s regulations provide that the Notice of Intent to protest a solicitation specification must be filed within 72 hours of the posting of the specification. Failure to timely file within the 72 hours shall constitute waiver of the right to protest proceedings related to the specification. A Formal Protest must be filed within 10 days after filing the Notice of Protest.

Protest of Intended Contract Award: Also similar to the bid protest process for state agencies, UNF regulations provide that a Notice of Protest of an intended contract award must be filed within 72 hours of the posting of the University’s notice of decision or intended decision, and that the Formal Protest must be filed within 10 days after filing the Notice of Protest.

Pursuant to UNF Regulations, the UNF President/President’s Designee may, in response to a Protest of a specification or intended award, terminate the contract procurement process, terminate the solicitation process, and/or reject all bids. If any such action is taken, the Protest shall be automatically dismissed, and the University may, if desired, reinitiate the contract procurement process.

Bid Protest Process: According to UNF Regulations, within 7 days of the filing of the Formal Protest, the University may hold informal discussions with the protester to attempt to resolve the protest by mutual agreement. If no resolution is reached, the protest shall proceed to a summary proceeding presided upon by a University official if there are no disputed issues of material fact, or to a quasi-judicial hearing if there are disputed issues of material fact.

Quasi-Judicial Hearing: If the Formal Protest contains issues of material fact, the President/President’s Designee shall either refer the Formal Protest to an appointed quasi-judicial officer for a quasi-judicial hearing or may forward a request for hearing to DOAH for assignment of an Administrative Law Judge (“ALJ”) to conduct the quasi-judicial hearing (in the same fashion as state agency bid protests). The hearing shall be conducted within forty (40) days after the date the Formal Protest was filed. The quasi-judicial hearing shall be a de novo proceeding to determine whether the University’s decision or intended decision is contrary to the statutes, regulations, or policies governing the University, or contrary to the Specifications. The standard of proof for the proceedings shall be whether the proposed University action was clearly erroneous, contrary to competition, arbitrary, or capricious.

All parties have an opportunity to present evidence; to respond to all issues involved; to conduct cross-examination and submit rebuttal evidence; and to submit proposed findings of fact and proposed orders. The hearing shall be conducted in conformity with the Florida Rules of Civil Procedure and the Florida Rules of Evidence. The Quasi-Judicial Officer will issue a written Recommended Order, and the University President shall thereafter issue a Preliminary Order, to which the parties may file objections, after which the President will review any timely filed objections and render a Final Order.

Judicial review of the University’s final decision shall be in accordance with Florida Rules of Appellate Procedure Rule 9.190(b)(3), applicable to review of quasi-judicial decisions of an administrative body not subject to the Administrative Procedure Act. A request for review may be made by filing a petition for certiorari review with the appropriate circuit court within thirty (30) days after the University’s final decision. Failure to seek timely review shall constitute a waiver of the right to appeal the University’s final decision.

It is clear from just the few examples highlighted above that there are no uniform timeframes or procedures for challenging local government entity procurement solicitation specifications and intended decisions, and that the procedures for challenging a local government entity’s procurement process are often extremely complex, and entirely dependent upon the local government entity’s governing procurement documents.

In addition to the different timeframes for bringing protests, each local entity’s governing purchasing documents may vary in terms of the contract amount that is subject to competitive bidding11, and the specific steps for protesting – the who, what, where, and how of protesting solicitations and intended awards (e.g., who does it need to be submitted to, who reviews the challenge, who do you appeal your challenge to; what information is required to be included, what information are you entitled to include; where should it be submitted, where do you appeal; and how do you ensure you exhaust your administrative remedies).

Typical Process in Local Government Bid Protests Despite Lack of Uniform Procedures

Overview

Despite the many procedural differences in each locale, the typical protest process pursuant to most local government procurement codes involves submitting a written protest to the local government’s administrative procurement staff (e.g., the Purchasing Department, the Purchasing Division, Procurement Office), and then appealing up the chain of command if unsuccessful below. Typically, there will be informal attempts to negotiate a settlement once a protest has been filed. Ultimately, most counties, municipalities, and districts will allow for an informal hearing (quasi-judicial hearing) before their Board or Commission. (See below re: quasi-judicial hearing).

Vendors will need to make several strategic decisions along with way. First, they will need to decide if they should challenge the solicitation specification. If they don’t timely object to the solicitation specifications, then they will waive the right to raise such issues later after the intended contract award has been made. However, if they do timely object, they run the risk of possibly offending or ultimately being disfavored by the local entity that they are protesting, and thus putting themselves in a vulnerable position vis-à-vis ultimately being awarded the contract.

Additionally, vendors will need to decide if and when to file suit in circuit court. Depending on the facts and the local government procurement procedures, it may be prudent to file in circuit court prior to any final decision by the Commission. See Wood-Hopkins Contracting Co. v. Roger J. Au & Son, Inc., 354 So. 2d 446, 448 (Fla. 1st DCA 1978). Conversely, depending on the facts and the likelihood of being successfully awarded the contract, it may be more beneficial to wait until after the Commission renders its final decision, and then if adverse, to seek a circuit court injunction or petition for writ of certiorari. (Silver Exp. Co. v. Dist. Bd. of Lower Tribunal Trustees of Miami-Dade Cmty. Coll., 691 So. 2d 1099, 1102 (Fla. Dist. Ct. App. 1997) (holding that unsuccessful bidder’s circuit court action to enjoin College’s contract award to another contractor should have been granted due to the irreparable injury caused by College’s violation of sunshine laws).

What to do – Step by Step

The first step in determining whether to protest is to be sure to familiarize yourself with the local authority’s governing purchasing documents, ordinances, charters, etc., as well state statutes and relevant case law, in case the documents are silent on various procedures.

Next, once you are notified of a solicitation/intended award that you think is improper, it is crucial to act quickly and submit your protest so as not to miss any deadlines and waive any rights. It is imperative to follow the specific protest procedures outlined by the local entity’s governing documents.

Challenge to Bid Solicitation Specifications: Most local government procurement documents specify the timeframes and procedures for challenging bid solicitation specifications, and provide that the failure to timely file a protest to the specifications of a bid solicitation shall preclude the protester from raising those issues in a bid protest after the contract has been awarded. (For example, Miami-Dade County provides that a protest to solicitation specifications must be made 2 days prior to bid opening or are waived, at IO 3-21; The Village of Wellington provides that a protest to solicitation specifications must be filed within 3 days of the posting of the competitive solicitation, and that failure to do so shall be deemed a waiver of the right to protest on those grounds.).

Thus, if a bidder wishes to challenge the terms, conditions, or specifications contained in the solicitation (including any provision governing the methods for ranking bids, awarding contracts, reserving rights for further negotiation, or modifying or amending any contract) the protest to the solicitation must be timely filed in accordance with the local governing procurement documents, typically within a few days of the posting of the solicitation.

While it is illegal in competitive bidding for a local government entity to tailor bid criteria or specifications in favor of a preferred vendor, it is a fairly frequent problem in public procurement.12 If a vendor believes that any part of the solicitation is suspect, it must timely file the required protest pursuant to the local governing procurement documents or the issue is forever waived.

One of the most common problems in public procurement – whether local or state procurement – is that a vendor fails to timely challenge the bid specifications or criteria although the vendor believes that a particular criteria or specification is unfair, unnecessary, or one that the vendor simply cannot meet. A vendor might forego challenging a specification in an effort to remain on good terms with the local authority out of fear that an action may potentially bias the contracting entity against the vendor.

Failure to timely file a protest to the solicitation specification within the timeframe outlined in the local entity’s governing procurement documents will result in waiver of the right to challenge such specifications. In other words, if they wait until after the notice of intended award, and then file a protest attempting to raise bid specification irregularities, those allegations will be excluded from consideration.

This results in several procedural and tactical questions for the vendor to consider and weigh in consultation with its attorney. Often vendors are concerned that if they protest the solicitation specifications, regardless of the outcome of that protest, that the local entity may harbor resentment or ill will toward them, and fear that the local entity may become biased against them, and that ultimately they will fair less well in any final decision regarding awarding them the contract. These considerations should be discussed and weighed with experienced bid protest counsel.

Challenge to Intended Contract Awards: If the local entity improperly awards the contract to another bidder, vendors shall timely file a protest to the intended contract award in accordance with the local government entity’s procurement code/ordinances. Depending on the local procurement process, the vendor may be required to first file a Notice of Protest and then to follow up with a formal Written Protest. In other locales, the vendor may be required to file the formal Written Protest without any initial Notice of Protest. Intervening holidays and weekends are typically excluded in computing the Notice of Protest due dates and typically included in computing the formal Written Protest due dates, but again, this will depend entirely on the governing local procurement documents.

As discussed above, challenges will typically be filed with procurement administrative staff (Purchasing Department, Procurement Office, etc.), and will be appealed up the chain of command, ultimately concluding in a quasi-judicial hearing before the Commission. Additionally, there will typically be opportunities to informally resolve the protest through settlement negotiations.

Bid Protest Bond: Local government procurement documents typically require, similar to the state agency bid protests, that the protestor file a bond payable to the local government. The amount of the bid protest bond will depend on the local government’s procurement documents. (For example, Miami-Dade County has an escalating bond fee schedule that increases the fee amount based on the contract award amount, ranging from a $500 filing fee for contract award under $250,000 to a $5,000 filing fee for contracts awards over $5 million). Failure to timely file the bond in accordance with the local government procurement process shall typically constitute waiver of the protestor’s right to protest and/or the denial and dismissal of the protest.

Quasi-Judicial Hearing: Unresolved bid protests are typically set for quasi-judicial hearing before the Board or Commission. Depending on the local entity’s procurement process, these hearings may range from informal presentations by the parties and/or their representatives to full-fledged quasi-judicial hearings involving witness testimony, cross-examination, presentation of evidence, and written submissions. Typically the rules of evidence do not apply. Participating parties shall be afforded notice and the opportunity to be heard. Additionally, in a quasi-judicial proceeding certain standards of fairness and due process are afforded to the parties.

Seeking Relief in Circuit Court: Unsuccessful bidders may seek a temporary injunction in circuit court prohibiting the local authority from awarding the contract to the successful bidder. In order to prevail on an injunction in circuit court, the complaining party generally must establish: (1) a likelihood of irreparable harm; (2) the unavailability of an adequate remedy at law; (3) a substantial likelihood of success on the merits; and (4) public interest considerations. See Wood-Hopkins Contracting Co. v. Roger J. Au & Son, Inc., 354 So. 2d 446, 448 (Fla. 1st DCA 1978) (affirming temporary injunction and stating that “trial court was correct in taking action to preserve the status quo and secure the rights of the parties to equitable relief”); Miami-Dade Cnty. v. Church & Tower, Inc., 715 So. 2d 1084, 1087 (Fla. 3d DCA 1998) (affirming denial of temporary injunction and holding that protestor did not have a substantial likelihood of success on the merits); Charlotte County v. Grant Medical Transp., Inc., 68 So. 3d 920 (Fla. 2nd DCA 2011); Silver Exp. Co. v. Dist. Bd. of Lower Tribunal Trustees of Miami-Dade Cmty. Coll., 691 So. 2d 1099, 1102 (Fla. Dist. Ct. App. 1997). See also Naegele Outdoor Adver. Co. v. City of Jacksonville, 659 So. 2d 1046, 1047 (Fla.1995); Smith Barney Shearson, Inc. v. Berman, 678 So. 2d 376, 377 (Fla. 3d DCA 1996).

While there is strong judicial deference afforded to a local authority’s discretion to competitively award contracts, such discretion must not be arbitrary or capricious, illegal, or fraudulent. Emerald Corr. Mgmt. v. Bay Cnty. Bd. of Cnty. Comm’rs, 955 So. 2d 647, 652 (Fla. 1st DCA 2007) (holding county to arbitrary and capricious competitive bidding standard); Hotel China & Glassware Co. v. Bd. of Public Constr. of Alachua Cnty., 130 So. 2d 78, 81 (Fla. 1st DCA 1961) (public authority may not arbitrarily or capriciously discriminate between bidders, or make award on basis of personal preference). However, a local authority’s honest exercise of discretion in awarding a contract will not be overturned even if it appears erroneous or if reasonable persons could disagree. See Miami-Dade Cnty. v. Church & Tower, Inc., 715 So. 2d 1084, 1087 (Fla. 3d DCA 1998) (disappointed bidder’s protest did not show arbitrary or capricious action; thus, bidder failed to demonstrate a substantial likelihood of success in its challenge to the commission decision, and temporary injunction barring further proceeding on the contact was not warranted).

Circuit Court Remedies: It is important to obtain an injunction in circuit court to stop the contract award before the contract is executed and relied upon. While section 120.57(3)(c), Florida Statutes, expressly provides that any intended contract awards shall be stayed pending resolution of a timely filed bid protest13, there is no similar uniform requirement for a stay of intended contract awards for local government bid protests. Accordingly, it is very possible that the contract will be awarded and relied upon prior to your “winning” your appeal.

So what happens if the contract has already been executed and then you “win” your appeal? Some courts have held that you are only entitled to the cost of preparing the bid, while other courts have held that the government entity shall provide a comparable contract at a later point in time. To date, no Florida courts have held that an unsuccessful bidder is entitled to lost profits. See Miami Dade Cnty. Sch. Bd. v. J. Ruiz Sch. Bus Serv., Inc., 874 So. 2d 59, 62-65 (Fla. 3d DCA 2004) (reversing award of lost profits and remanding with directions that appellees be awarded equitable relief in the form of future comparable contracts, if possible, or, in the alternative, that their damages be limited to their bid preparation and/or bid protest costs.). See also City of Cape Coral v. Water Servs. of Am., Inc., 567 So. 2d 510, 512 (Fla. 2d DCA 1990) (holding that (1) unsuccessful bidder was entitled to recover bid preparation costs and prejudgment interest thereon when city failed to adhere to its representation that bid would not be rejected on ground that bidder was not licensed general contractor; (2) unsuccessful bidder had no cause of action against public entity for lost profits; and (3) bidder was not entitled to award of attorney fees.); City of Tallahassee v. Blankenship & Lee, 736 So. 2d 29 (Fla. 1st DCA 1999) (disappointed bidder on natural gas line construction project that sued city for disqualification of bid was not entitled to award of attorney fees, despite award of bid preparation costs; there was no contractual or statutory authority for recovery of attorney fees from city and litigation was against city and not third party).14

Florida’s Public Policy and Case Law in Support of Fair Competition

In addition to the specific protest procedures for each local government entity, government contracting in Florida is guided by strong public policy considerations aimed at the protection of the public against collusive contracts, fraud, bias, and favoritism. While public bodies have discretion in contracting for goods and services, they cannot act illegally, arbitrarily, capriciously, or fraudulently. See, e.g., Wester v. Belote, 103 Fla. 976, 138 So. 721 (Fla. 1931) (laws of this kind requiring contracts to be let to the lowest bidder are based upon public economy, are of great importance to the taxpayers, and ought not to be frittered away by exceptions; they serve the object of protecting the public against collusive contracts and prevent favoritism toward contractors by public officials and tend to secure fair competition upon equal terms to all bidders, they remove temptation on the part of public officers to seek private gain at the taxpayers’ expense, are of highly remedial character, and should receive a construction always which will fully effectuate and advance their true intent and purpose and which will avoid the likelihood of same being circumvented, evaded, or defeated) (emphasis added); Emerald Corr. Mgmt. v. Bay Cnty. Bd. of Cnty. Comm’rs, 955 So. 2d 647, 652 (Fla. 1st DCA 2007) (holding county to arbitrary and capricious competitive bidding standard); Hotel China & Glassware Co. v. Bd. of Public Constr. of Alachua Cnty., 130 So. 2d 78, 81 (Fla. 1st DCA 1961) (public authority may not arbitrarily or capriciously discriminate between bidders, or make award on basis of personal preference); City of Sweetwater v. Solo Constr. Corp., 823 So. 2d 798 (Fla. 3d DCA 2002) (applying arbitrary and capricious standard to RFPs as well as bids). Florida’s public policy, case law, and statutes dictate that competitive procurement, regardless of the local government entity’s bid protest process, is designed to secure fair competition on equal terms to all bidders, to secure the best values at the lowest possible expense, to provide an opportunity for an exact comparison of bids, and to assure that the most responsive bid is accepted. Additionally, government entities must afford fundamental due process rights to its citizens and must allow for a clear point of entry to challenge its decisions. See, e.g., Capeletti Brothers, Inc. v. Dep’t of Transp., 362 So. 2d 346, 348 (Fla. 1st DCA 1978) (holding that agency must afford due process right of clear point of entry to challenge agency decision).

Finally, regardless of the type of local government (county, municipality, district), all local government entities must adhere to the terms of their RFP/ITB, and can be challenged for deviating from the specifications of their RFP/ITB. See, e.g., City of Sweetwater v. Solo Constr. Corp., 823 So. 2d 798, 800, 802 (Fla. 3rd DCA 2002) (City’s award based upon categories and criteria not included in the bid documents was arbitrary, capricious, and contrary to Florida’s competitive bid statutes); Hemophilia Health Services, Inc., v. AHCA, No. 05-2804BID, 2005 WL 3733800, ¶¶ 38-40, 44-46, 75 (DOAH Dec. 2, 2005; AHCA FO Jan. 26, 2005) (evaluation sheets used by evaluators did not correspond to the RFP evaluation criteria); Syslogic Tech. Servs., Inc. v. South Florida Water Mgmt. Vill., No. 01-4385BID, 2002 WL 76312 at ¶¶ 24, 36, 104-05, 108-110 (DOAH Jan. 18, 2002; AHCA FO March 6, 2002 104-111) (scoring was contrary to the RFP and contrary to competition).

Conclusion

Local government bid protest procedures and requirements are often quite confusing and may vary greatly depending on the local government’s ordinances, codes, charters, etc. Because there are no uniform procedures for challenging local government procurement decisions, and because the bid protest process proceeds on an extremely fast track, important rights can be waived if not immediately asserted. For these and other reasons, it is crucial that you know your rights whenever you or your company becomes involved in any local government procurement, and that you involve experienced bid protest counsel as early as possible. Experienced bid protest counsel can assist in compliance with local government bid procedures, ensure that your rights are protected throughout the bid process, timely protest any unfavorable decisions, and advocate for your interests at the local government level, as well as in circuit and appellate court proceedings.

Geoffrey D. Smith is a shareholder in the law firm of Smith & Associates, and has practiced federal, state, and local bid protest law for over 20 years.

1 Florida Statutes and rules governing state bid protests include, but are not limited to: Chapter 120, Florida Statutes (Florida’s Administrative Procedure Act); Chapter 287, Florida Statutes (state procurement); and Chapter 28-110, Florida Administrative Code (state bid protests).
2 http://en.wikipedia.org/wiki/List_of_municipalities_in_Florida; https://dca.deo.myflorida.com/fhcd/sdip/OfficialListdeo/index.cfm.
3 For a detailed overview of the bid protest process for challenging state agency procurement decisions, including a discussion of common grounds for protesting state agency procurement decisions, please see “Bid Protests: Know Your Rights – the Clock is Ticking” at http://smithlawtlh.com/bid-protests-know-your-rights-the-clock-is-ticking/ (“State Bid Protest article”).
4 Chapter 120 (the Administrative Procedures Act), Florida Statutes, provides uniform procedures applicable to state agencies, which by definition, do not include local government entities, and section 120.57(3), Florida Statutes, specifically governs bid protests against Florida state agencies. While section 255.20, Florida Statutes, addresses local government competitive bidding for public construction projects, it does not address bid protest procedures. Moreover, there is no Florida Statute governing bid protest procedures for local government procurement of goods or other services.
5 See Palm Beach County School Board, Policy 6.14, for an example of a local government entity that explicitly implements the bid protest procedures of the Administrative Procedures Act, section 120.57 (3), Florida Statutes, and Chapter 28-110, Florida Administrative Code.
6 Several of the representative examples outlined in this article were taken from recent bid protest cases litigated and resolved by Smith & Associates.
7 See §120.57(3)(b), Fla. Stat., and State Bid Protest article, cited infra note 2.
8 Such variations from Florida Statutes’ timeframes, are also seen in larger municipalities, such as the City of Miami, whose purchasing process is outlined in its municipal code, Section 18-104, entitled “Resolution of protested solicitations and awards.” (See http://www.miamigov.com/procurement/docs/BidProtest.pdf). Section 18-104 provides that aggrieved proposers must file a notice of protest within two days after receipt of the notice of proposed award, and then must file its written protest within five days after the date the notice of protest was filed. Once again, we see the truncated timeframe for filing a protest at the local level, as compared to protesting state agency procurement decisions. See also Orange County Bid Protest Procedures (Orange County Florida Code of Ordinances, Sec. 17-313), which requires that a notice of protest to a bid solicitation or intended award be filed within five days of the date of posting, and that the formal written protest be filed within five days after the date of the filing of the notice of protest.
9 There are competing arguments as to whether Florida state universities and colleges are considered “state agencies” for purposes of Chapter 120 bid protest rights. Section 120.57(3), Florida Statutes, governing state agency bid protest procedures, specifically provides in subsection 120.57(3)(g), Florida Statues, that “the definitions in s. 287.012 apply.” Section 287.012, Florida Statutes, expressly states that the definition of Agency “does not include the university and college boards of trustees or the state universities and colleges.” However, this definition appears to conflict with the definition of “Agency” in section 120.52, Florida Statutes, which provides that “Agency” includes educational units, including state universities when the university is acting pursuant to statutory authority.” Further confusing the issue, bid protests of state universities are routinely referred to DOAH for hearing. See e.g., Schlage Lock Company, LLC v. State University System, University of North Florida, Case No. 14-1559BID (DOAH April 10, 2014). For purposes of this bid protest article, universities and colleges are classified as non-state agencies.
10 http://en.wikipedia.org/wiki/List_of_colleges_and_universities_in_Florida
11 While Florida State Statutes provides for competitive solicitation for state agencies for all contract awards in excess of $35,000 (hereinafter “competitive solicitation threshold”), the threshold amount requiring competitive bidding varies dramatically for each local government entity depending on its specific local charter, ordinances, code, etc. For example, Miami-Dade County’s competitive solicitation threshold is $25,000 (Miami-Dade County Implementing Order 3-21) (check); University of North Florida Board’s competitive solicitation threshold is $75,000 (UNF Purchasing Regulation 13.0010R); Village of Wellington’s competitive solicitation threshold is $25,000 (Wellington Purchasing Manual, Ch. 2, A, at p. 3); and Canaveral Port Harbor District’s competitive solicitation threshold is $100,000.
12 One exception to this is that many local governments provide in their governing procurement documents that a preference be given to local businesses. (For example, Miami-Dade County’s governing procurement document provides in its preference for local businesses, that “If the Low Bidder is not a Local Business, then any and all responsive and responsible Local Businesses submitting a price within ten percent of the Low Bid…shall have an opportunity to submit a best and final bid equal to or lower than the Low Bid.” See Miami-Dade County, Section 1.10, General Terms and Conditions). The preference criteria should be outlined in the local government documents and any deviations from the specified criteria can be subject to challenge. Miami-Dade County, Section 1.10, General Terms and Conditions.
13 Section 120.57(3) provides:
Upon receipt of the formal written protest that has been timely filed, the agency shall stop the solicitation or contract award process until the subject of the protest is resolved by final agency action, unless the agency head sets forth in writing particular facts and circumstances which require the continuance of the solicitation or contract award process without delay in order to avoid an immediate and serious danger to the public health, safety, or welfare. § 120.57(3), Fla. Stat. See also Cianbro Corp. v. Jacksonville Transp. Auth., 473 So. 2d 209, 212 (Fla. 1st DCA 1985) (statutory scheme providing for stay of intended contract award “should be upset in only the most compelling circumstances.”).
14 While beyond the scope of this article, for a detailed discussion of potential legal remedies after you have been awarded a contract, see http://smithlawtlh.com/unfairness-or-public-corruption-in-government-contracting/.

BMI Copyright Infringement Lawsuits

Yesterday, BMI filed two copyright infringement lawsuits against area restaurants. In these lawsuits, BMI maintains that these restaurants allowed the unauthorized public performance of songs to which it holds the copyright. In layman’s terms, this means that the restaurant played the radio over the speakers without first purchasing a license from BMI.

Many restaurant owners are not aware that the simple act of playing songs over the speakers can constitute copyright infringement if the appropriate license is not purchased. This simple act can have large consequences. For each unauthorized song played, the restaurant can be liable for up to $150,000.00 in statutory damages plus attorney’s fees and costs. All of this just by turning on the radio.

If you or your company have been contacted by BMI regarding unauthorized performance of songs, you mast act quickly to protect your rights. At Smith & Associates, we not understand litigation and copyright law. If you need help addressing this or any other copyright issue, please contact us for a free consultation.

With Bid Protests, Deadlines are Essential

Recently, the GAO denied the bid protest of Bridges System Integration, LLC (“Bridge”) (decision here). This bid protest involved an RFP for a standing solicitation for the provision of professional audio/video, telemetry/tracking, recording, reproducing and signal data solutions. Bridge’s bid was rejected for not complying with the RFP. While there were multiple issues involved in this decision, this article focuses on Bridge’s challenge to the terms of the solicitation as they related to its already submitted and rejected bid.

The GAO held that “[t]o be timely, a challenge to the terms of this solicitation had to be raised prior to submitting a proposal under the terms of that solicitation.” It further held that for standing orders, which do not have a set time for submissions, “challenges to the terms of a standing FSS solicitation are untimely, with respect to the application of these terms to the evaluation of an offeror’s proposal, if the protest is filed after the protester has submitted a proposal under that solicitation.” For this, and other reasons enumerated in the decision, the bid protest was denied.

Timelines are key to bid protest cases. Failure to timely file a bid protest can forfeit your rights to even bring the protest. If you believe that the specifications for an RFP are biased or unfair, contact the experienced bid protest attorneys at Smith & Associates for a free consultation.

Defending Alleged Survey Deficiencies at Assisted Living Facilities (ALFs) and Skilled Nursing Facilities (SNFs)

View PDF Version here.

You have probably seen the full page newspaper advertisements by certain law firms trying to solicit Plaintiffs to sue your ALF or nursing home, and placing your recent Survey Deficiencies in big bold print for all the world to see.   These tactics highlight the importance of knowing your rights as an ALF or SNF operator.  Whether to challenge a statement of deficiencies or an Administrative Complaint by the Agency for Health Care Administration is an important decision with far reaching consequences.  You should know your rights and make an informed decision.

Inspections and Survey Deficiencies: Know Your Rights

Assisted Living Facilities (“ALFs”) (governed by Chapter 429, Part I, Florida Statutes, in addition to Chapter 408, Florida Statutes) and Skilled Nursing Facilities (“SNFs”) (governed by Chapter 400, Part II, Florida Statutes, in addition to Chapter 408, Florida Statutes) need to be aware of their legal rights and responsibilities regarding Agency for Health Care Administration (AHCA or Agency) inspections, surveys, and enforcement actions.

With regard to inspections, pursuant to Florida Statutes, AHCA may conduct unannounced inspections of ALFs and SNFs1. If faced with an inspection, an ALF/SNF operator has no legal right to refuse to allow the inspectors access to the facility2.  During the inspection, AHCA is entitled to have access to copies of all provider records required during the inspection3.  An ALF/SNF operator may request that an Administrator  or  other  designated  representative  accompany  the  inspectors  while  at  the facility.  It is advisable that the ALF/SNF operator immediately consult with legal counsel if an unannounced AHCA inspection is made.  During an exit interview, the AHCA representatives should explain their findings, including any alleged deficiencies that were found.

Subsequent to an inspection, AHCA will provide the ALF/SNF Administrator with a survey report that provides a detailed written explanation of the findings made during an inspection. If a violation of a regulation is found during an inspection or investigation, it is cited as a deficiency on the Statement of Deficiencies.  Any deficiency must be corrected within 30 calendar days after the provider is notified of inspection results unless an alternative timeframe is approved by the agency4. The ALF/SNF will be given 10 calendar days in which to present a Plan of Correction5.  ALFs/SNFs must maintain for a three-year period, and make available upon request, records of all inspection reports pertaining to that provider that have been filed by the agency unless such reports are exempt from public disclosure6.

Although seldom asserted, an ALF/SNF operator may assert a legal right to challenge a survey report and petition for a formal administrative hearing pursuant to Section 120.569 and 120.57(1), Florida Statutes, if the provider believes that there were in fact no deficiencies that should result in a Plan of Correction being submitted.  However, in most instances, the results of a licensure or complaint survey can be resolved through submission and implementation of a Plan of Correction.

Statutory Framework Regarding AHCA’s Issuance of Deficiencies

Emergency License Suspension Orders

In the event of alleged severe deficiencies which AHCA claims threaten the health, safety or welfare of an ALF/SNF resident, AHCA can impose an immediate moratorium on admissions or an emergency order of license suspension7.   However, the right to take such emergency action is limited, and  such orders can be challenged legally.  AHCA is required by Section 120.60(6), Florida Statutes, to make specific findings that document the existence of the emergency situation, and may take only such action as is required to address the emergency. An improper Emergency Suspension Order or Moratorium may be immediately appealed to the District Court of Appeal, and there are numerous decisions where Agency action that is not based on a true emergency is reversed and set aside.

Further, AHCA must also provide an ALF/SNF operator faced with an emergency moratorium, or suspension order, or any other effort to suspend or revoke a license with the opportunity to file a Petition for Formal Administrative Hearings to challenge the validity of AHCA’s action or proposed action on the license8.  Hearings on license proceedings are held before an independent administrative law judge at the Division of Administrative Hearings.  Such hearings are an opportunity to prove that the true facts do not support a moratorium, suspension or revocation of the ALF/SNF license.

In addition to or in lieu of taking direct action against an ALF/SNF operator’s license, AHCA may also seek imposition of civil penalties for alleged violation of licensure rules and standards.

Administrative Fines and Classification of Deficiencies

AHCA imposes administrative fines for violations according to a classification system in statute, based on the nature of the violation and the gravity of its probable effect on facility residents.  The agency shall indicate the classification on the written notice of the violation9.   In addition, the scope of the violation may be cited as an isolated deficiency (affecting a very limited number of clients), a patterned deficiency (repeated violations affecting more than a limited number of clients), or a widespread deficiency (pervasive or systemic failures that have the potential to affect a large portion of clients)10.

Assisted Living Facilities (ALFs) and Chapter 429, Florida Statutes

Pursuant to sections 408.813 (AHCA’s “Core Licensure Act”) and 429.19, Florida Statutes (which governs the operations of an ALF), the “classifications” assigned to the alleged violation and the attendant administrative fines are as follows:

Class I violations: present an imminent danger to clients or a substantial probability that death or serious physical or emotional harm would result.  These violations must be corrected within 24 hours.  Imposition of a fine is mandatory in an amount not less than $5,000 and not exceeding $10,000 per violation, even if the violation is corrected11.

Class II violations:  directly threaten the physical or emotional health, safety or security of clients (other than Class I).  Imposition of a fine is mandatory in an amount not less than $1,000 and not exceeding $5,000 per violation, even if the violation is corrected12.

Class III violations: indirectly or potentially threaten the physical or emotional health, safety or security of clients (other than Class I or Class II).   AHCA shall impose a fine in an amount not less than $500 and not exceeding $1,000 per violation, unless the violation is corrected within the time specified for correction in the citation13. [Note: ALF statute (Ch. 429) provides that fines are mandatory for Class III and Class IV violations, but the core licensure statute (Ch.  408) says that the fine will not be imposed if corrected within a specified time, see discussion below.]

Class IV violations:  pertain to reports, forms or documents that do not have the potential of negatively affecting clients (purely paperwork type violations).  These violations are those that AHCA has determined do not threaten the health, safety, or security of clients.  AHCA shall impose a fine in the amount not less than $100 and not exceeding $200 per violation, unless the violation is corrected within the time specified for correction in the citation14.

Section 408.813, Florida Statutes, expressly provides that no fines shall be imposed for timely corrected Class III and Class IV violations.  However, AHCA has been known to take a contrary view, and the specific fine amounts for violation of ALF licensure standards are stated in mandatory language in Chapter 429, Florida Statutes.  Section 408.832, Florida Statutes, provides that when the AHCA Core Licensing Act conflicts with the specific facility governing statutes (such as the ALF statute) then the Core Licensure Act should prevail.  Applying that principle, then no fines should be imposed for minor Class III and IV violations when they are timely corrected by the ALF.  If AHCA were to impose fines for Class III and Class IV violations, the ALF would have appropriate grounds for challenging such fines.

In determining if a penalty is to be imposed and in fixing the amount of the fine, AHCA shall consider the following factors:

  • the severity of the violation and the extent to which the provision of the applicable laws were violated,
  • actions taken by the ALF administrator to correct violations,
  • previous violations,
  • the financial benefit to the facility of committing the violation, and
  • the licensed capacity of the facility15.

Additionally, each day of continuing violation after the date determined by AHCA for termination of the violation, constitutes an additional, separate, and distinct violation16.

Because AHCA considers previous violations when imposing penalties, it is important that ALF Administrators ensure that they quickly address and resolve all minor violations so that these will not later serve as a basis for imposing more severe sanctions.  Additionally, ALF administrators shall document in writing all actions to correct violations and these shall be verified through AHCA follow up visits.  AHCA may impose a fine, and in some instances, revoke or deny a facility’s license when a facility administrator fraudulently misrepresents action taken to correct a violation17.

Additionally, AHCA may impose administrative fines in an amount not to exceed $500 per violation for violations that are not designated as Class I, II, III, or IV violations. Unclassified violations include, but are not limited to: violating a condition of the license, violating statutes or rules, exceeding license capacity, and providing services beyond the scope of the license.

Skilled Nursing Facilities (SNFs) and Chapter 400, Florida Statutes

Skilled Nursing Facilities (SNFs) are governed by Chapter 400, Part II, Florida Statutes, as well as Chapter 408, Part II, Florida Statutes.  In accordance with section 400.23(7), Florida Statutes, AHCA shall, at least every 15 months, evaluate all nursing home facilities and make a determination as to the degree of compliance.  The agency’s determination shall be based on the most recent inspection report, as well as findings from other reports and investigations.  In addition to the license classification categories authorized under part II of chapter 408 (discussed above), AHCA shall assign either a “standard licensure status” or a “conditional licensure status” to each nursing home18. A “standard licensure status” means that a facility has no class I or class II deficiencies and has corrected all class III deficiencies within the time established by the agency.  A “conditional licensure status” means that a facility, due to the presence of one or more class I or class II deficiencies, or class III deficiencies not corrected within the time established by the agency, is not in substantial compliance at the time of the survey19.

The current licensure status of each facility shall be indicated in bold print on the face of the facility’s license, and a list of the deficiencies of the facility shall be posted in a prominent place that is in clear and unobstructed public view at or near the place where residents are being admitted to that facility20.

Licensees receiving a conditional licensure status for a facility shall prepare, within 10 working days after receiving notice of deficiencies, a plan for correction of all deficiencies and shall submit the plan to the agency for approval21.

An operator has the right to challenge a Conditional license rating through the filing of a Petition for Formal Administrative Hearing and a trial before an independent Administrative Law Judge.

Classification and Civil Penalties/Administrative Penalties

The “classification” system and attendant penalties for SNF deficiencies are found in section 400.23(8), Florida Statutes, and outlined below.  The classifications are similar to that of ALFs, though not identical, and the attendant penalties are quite different.  Of note, the SNF statute expressly provides for different levels of fines depending on the whether the deficiency was isolated, patterned, or widespread.  Moreover, for Class I, II, and III deficiencies, section 400.23(8), Florida Statutes, provides that “the fine amount shall be doubled for each deficiency if the facility was previously cited for one or more class I or class II deficiencies during the last licensure inspection.”

Class I deficiency: a deficiency requiring immediate corrective action because the facility’s noncompliance has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident receiving care in a facility. A class I deficiency is subject to a civil penalty of $10,000 for an isolated deficiency, $12,500 for a patterned deficiency, and $15,000 for a widespread deficiency. The fine amount shall be doubled for each deficiency if the facility was previously cited for one or more class I or class II deficiencies during the last licensure inspection or any inspection or complaint investigation since the last licensure inspection. A fine must be levied notwithstanding the correction of the deficiency22.

Class II deficiency: a deficiency that the agency determines has compromised the resident’s ability to maintain or reach his or her highest practicable physical, mental, and psychosocial well-being. A class II deficiency is subject to a civil penalty of $2,500 for an isolated deficiency, $5,000 for a patterned deficiency, and $7,500 for a widespread deficiency. The fine amount shall be doubled for each deficiency if the facility was previously cited for one or more class I or class II deficiencies during the last licensure inspection or any inspection or complaint investigation since the last licensure inspection. A fine shall be levied notwithstanding the correction of the deficiency23.

Class III deficiency: a deficiency that the agency determines will result in no more than minimal physical, mental, or psychosocial discomfort to the resident. A class III deficiency is subject to a civil penalty of $1,000 for an isolated deficiency, $2,000 for a patterned deficiency, and $3,000 for a widespread deficiency. The fine amount shall be doubled for each deficiency if the facility was previously cited for one or more class I or class II deficiencies during the last licensure inspection or any inspection or complaint investigation since the last licensure inspection. If a class III deficiency is corrected within the time specified, a civil penalty may not be imposed24.

Class IV deficiency: a deficiency that the agency determines has the potential for causing no more than a minor negative impact on the resident. If the class IV deficiency is isolated, no plan of correction is required25.

In addition to the above, section 400.121, Florida Statutes, provides for the denial, suspension, or revocation of nursing home and related health care facility licenses, and also provides for administrative fines.  In accordance with section 400.121(1), Florida Statutes, AHCA may revoke or suspend a license, or impose administrative fines not to exceed $500 per violation per day.  Section 400.121(2), Florida Statutes, states:

“Except as provided in 400.23(8), a $500 fine shall be imposed for each violation.  Each day a violation of this part or part II of chapter 408 occurs constitutes a separate violation and is subject to a separate fine, but in no event may any fine aggregate more than $5,000.”

This section further provides:

“A fine may be levied pursuant to this section in lieu of and notwithstanding the provisions of s. 400.23.”26

Thus, the statutes governing administrative fines for skilled nursing facilities appear to be inconsistent and afford the agency significant discretion.  On the one hand, it states that “except as provided in 400.23(8), a $500 fine shall be imposed,” but, on the other hand, it also appears to state that the $500 per day fine not to exceed the $5,000 in aggregate may be imposed in lieu of the fines provided for in Section 400.23(8) above.  An experienced health care attorney can help to navigate these somewhat confusing and contradictory statutes, and seek to have them interpreted and applied in a manner most beneficial to the provider.

Revocation and Suspension:  With respect to revoking a SNF license, AHCA may revoke a license where the facility: has had two moratoria issued for substandard care within any 30-month period; is conditionally licensed for 180 continuous days; is cited for two unrelated Class I deficiencies during the same survey; or is cited for two Class I deficiencies arising from separate surveys within a 30-month period.27  If AHCA has placed a moratorium on a facility two times within a 7-year period, AHCA may suspend the nursing home license.  The licensee may present factors in mitigation of revocation, and AHCA may determine not to revoke the license based upon the facility’s mitigating factors.

Any action to suspend or revoke a facility’s license under Chapters 400 or 408 shall be heard by the Division of Administrative Hearings within 60 days after the assignment of an administrative law judge (ALJ), unless the time limitation is waived by both parties, and the ALJ shall render a decision with 30 days after receipt of the proposed recommended order.28  Agency action may be overcome by the licensee upon a showing by a preponderance of evidence to the contrary.29

Challenging a Statement of Deficiencies

Existing case law allows a provider to challenge the issuance of Statement of Deficiencies prior to AHCA filing an Administrative Complaint. See e.g., W. Frank Wells Nursing Home v. Ag. for Health Care Admin., 27 So. 3d 73, 74 (Fla. 1st DCA 2009) (holding that a statement of deficiencies constituted agency action and could be challenged in an administrative hearing).  However, the decision to file a petition to challenge a Statement of Deficiencies has significant implications on the burden of proof at hearing.  AHCA Final Orders have indicated that a party challenging a Statement of Deficiencies has the burden to show that no violations occurred by a preponderance of the evidence. See Water’s Edge Extended Care v. Ag. For Health Care Admin., DOAH 12-2188, 2013 WL 4080436, at *3 (Aug. 2, 2013) (“Here, the Agency issued a document known as a statement of deficiencies. It imposed no penalty on the Petitioner. Nor did it alter Petitioner’s licensure status in any way. Thus, it did not meet the definition of an administrative complaint found in Rule 28-106.2015(1), Florida Administrative Code. Therefore, Petitioner should have born the burden of proof by a preponderance of the evidence.”).  In contrast, if AHCA files an Administrative Complaint, then AHCA has the burden to prove the violation by clear and convincing evidence.30

Because the burden on AHCA to prove the violation is much greater when it brings an Administrative Complaint (as compared to when a facility challenges a Statement of Deficiencies), ALFs/SNFs need to seriously consider the pros and cons of challenging a Statement of Deficiencies.  In most instances, the best course of action is to challenge the Administrative Complaint, rather than challenging the Statement of Deficiencies.  However, the following are circumstances where it may be prudent for a facility to challenge the Statement of Deficiencies:

  • When AHCA is requiring some immediate corrective action that the provider believes is unwarranted under the circumstances and that would be unduly burdensome on the provider;
  • When the facility reasonably believes that the Statement of Deficiencies will result in a negative stigma affecting its business operations if it fails to challenge the alleged deficiency;
  • When the facility reasonably believes that certain payors may take adverse action based on the Statement of Deficiencies being filed and unchallenged.

It should be noted that although administrative case law in certain Final Orders has indicated that the burden on the provider is much greater when it challenges a Statement of Deficiencies, there have been no appellate decisions on this issue to date.

Case Law Examples: Recent Reported Final Orders

ALF Final Order Examples

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION v. ANGEL AIDES CENTER, INC. d/b/a BOYNTON BEACH ASSISTED LIVING FACILITY, 2014 WL 7385342 (December 17, 2014), DOAH NO. 13-1258

Action to revoke the ALF’s license and impose $5,000 fine and $500 survey fee.  Agency cited the facility for two Class II deficiencies as a result of complaint investigation surveys.  Based on the surveys it was determined that the facility failed to ensure that residents met the residency requirements (several residents required medical and psychological supervision exceeding the residency criteria) and failed to provide supervision to the residents.  Specifically, during the investigation it was revealed that one of the residents who did not meet the residency requirement (as he required medical supervision due to antisocial behavior) had sexually assaulted another resident several months prior. Pursuant to section 429.14 (1) (e), Florida Statutes, the Agency sought to revoke the license since it had previously cited the facility for four Class II deficiencies.

Holding/Fine: ALF license was revoked, and respondent was required to pay the Agency $5,500.

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner v. DAYSPRING VILLAGE, INC., 2014 WL 2624256 (June 3, 2014); DOAH CASE NO. 13-1451

Administrative Complaint sought to impose an administrative fine of $2,000 based on two Class II deficiencies discovered during a complaint inspection of Dayspring Village’s assisted living facility (“ALF”), as well as a $185.00 survey fee. Specifically, the complaint alleged that the facility failed to provide adequate and appropriate health care consistent with established and recognized standards within the community by allowing diabetic residents to use the same glucometer without disinfecting or cleaning the glucometer device in between resident usage, and failed to properly supervise residents taking their medication.

Holding: The Final Order concluded that AHCA proved its violations by clear and convincing evidence and imposed an administrative fine of $2,000 and a survey fee of $185.50 on Dayspring Village, Inc.

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner v. PINE TREE MANOR, INC. d/b/a PINE TREE MANOR, Respondent, 2014 WL 554674 (February 5, 2014) DOAH CASE NOS. 13-2011, 13-2397

AHCA charged Pine Tree Manor with two Class I violations and sought to revoke its license for two separate deficiencies.  The first alleged Class I violation concerned the facility’s failure to remain generally aware of one of its residents whereabouts.  Specifically, a resident wandered off from the facility and the facility did not seek to locate him until the next morning.  They were unable to locate him, and he was found, deceased, several days later.  The Final Order held that AHCA had not proved by clear and convincing evidence that the facility was on notice the resident was in “imminent danger of death or serious physical harm” to substantiate a Class I, and held that it was a Class II violation, and imposed a $5,500 fine.  The second alleged violation concerned the facility’s failure to properly respond to an emergency situation where a resident stopped breathing and ultimately died.  The employee failed to immediately call 911 and provide CPR.  The Final Order held this was a Class I violation, revoked respondent’s license, and imposed an $8,000 fine.

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner v. STEPHENS MEMORIAL HOME, INC. d/b/a STEPHENS MEMORIAL HOME, 2013 WL 3490616 (July 8, 2013), DOAH CASE NO. 13-0368

AHCA conducted an unannounced biennial licensure and complaint survey that gave rise to the Administrative Complaint.  The Administrative Complaint alleged a widespread class II deficiency and sought the imposition of an administrative fine of $1,000 against Respondent. Specifically, the Administrative Complaint alleged that Stephens Memorial failed to insure that one of four sampled residents was free of physical restraints in violation of Florida Statutes because that resident had an activity board attached to his wheelchair that appeared to prevent the resident from getting up from his wheelchair.

Holding: The Final Order held that the resident was able to remove the activity board and that it was prescribed for therapeutic purposes and thus did not meet the definition of a “restraint” and the Administrative Complaint was dismissed.

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner v. DOS OF CRYSTAL RIVER ALF, LLC d/b/a CRYSTAL GEM ALF, 2013 WL 595490 (February 7, 2013);  DOAH CASE No. 12-2306

Administrative Complaint alleged a Class III violation for facility’s failure to have a properly completed Residential Health Assessment form for each resident, and Class I violation for failure to provide appropriate supervision to prevent elopement.

Holding: Held that while violations did occur in that the forms were not properly completed, they did not constitute Class III violations because there was no threat to the physical or emotional health of the residents, and thus it was reduced to a Class IV violation with a fine of $100.  With regard to the alleged Class I violation regarding elopement, the Final Order held that the Agency did not prove, by clear and convincing evidence, that the facility violated Florida Statutes with respect to the provision of care and supervision of its residents.

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner v. ALLAN V. COMRIE d/b/a PREMIER ADULT CARE; ALLAN V. COMRIE d/b/a FIRST CLASS PHASE II; and ALLAN V. COMRIE d/b/a FIRST CLASS ADULT FAMILY CARE and JAM, 2012 WL 5705633 (November 8, 2012);  DOAH CASE NO. 12-0102

AHCA alleged that Respondent had advertised and operated a facility without first obtaining licensure for that program, had misrepresented the licensure status of the home, had failed to comply with rules governing facilities, and had failed to cooperate with authorities with regard to the facility. As to all alleged violations, Respondent maintained it was not required to hold a license for the subject property as its operation was exempt as a matter of law. Additionally, Respondent averred that any incorrect advertising was merely a clerical error and not an intentional misrepresentation of the licensure status of the facility.

Holding: Although the Administrative Law Judge did not recommend revocation, AHCA entered a Final Order and imposed a $7,000 fine and revoked Respondent’s license.   The operator elected not to appeal to the District Court of Appeal.

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION v. AVALON’S ASSISTED LIVING, LLC d/b/a AVALON’S ASSISTED LIVING and d/b/a AVALON’S ASSISTED LIVING AT AVALON PARK; and AVALON’S ASSISTED LIVING II, LLC, 2011 WL 860551 (March 9, 2011)

Action to revoke the facilities’ licenses due to Class II deficiencies regarding: 1) failure to provide required employee training and falsified training certifications, and 2) the failure to provide residents with appropriate pain medication and required care. The evidence established that the violations posed a direct threat to the physical and emotional health of the residents.  License revocation was an appropriate penalty pursuant to section 429.14(1)(e)(2), Florida Statutes, regarding revocation where there are three or more cited class II deficiencies.

Holding/Fine: The licenses of the facilities were revoked and an administrative fine of $3,000 was imposed.

SNF Final Order Examples

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner v. TALLAHASSEE FACILITY OPERATIONS. LLC d/b/a CONSULATE HEALTHCARE OF TALLAHASSEE, Respondent, 2015 WL 510385 (February 2, 2015), DOAH CASE NO. 14-0436

Administrative Complaint sought to impose an administrative fine in the amount of $1,000 and conditional licensure status based on one uncorrected Class III deficiency discovered during a revisit survey inspection conducted on August 12, 2013. AHCA conducted a survey of the facility in July 2013 and found a Class III deficiency for failure to follow physician orders that patient be bathed daily.  Respondent submitted a corrective action plan which was approved by AHCA.  AHCA re-surveyed respondent in August 2013, and found additional Class III violations regarding failure to follow physician orders concerning PICC-dressing changes in violation of rule 59A-4.107(5).  AHCA alleged the August violation constituted an uncorrected violation of the earlier failure to follow physician orders.

Respondent argued that the August violation was different than the July violation, and thus the August violation should not be construed as an “uncorrected violation.” AHCA argued that both violations concerned the failure to follow physician orders and thus the second violation was an “uncorrected violation.” AHCA further argued that its acceptance of the corrective action plan did not  absolve Respondent from its responsibility to correct every area in which it was found out of compliance.

Holding: AHCA demonstrated by clear and convincing evidence that Respondent committed an uncorrected Class III deficiency. Final Order imposed a fine of $1,000 and further imposed conditional licensure on Respondent for the period from August 13, 2013 through September 30, 2014.

WATER’S EDGE EXTENDED CARE, Petitioner v. STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Respondent, 2013 WL 4080436 (August 02, 2013), DOAH 12-2188

AHCA conducted a complaint survey and issued a statement of deficiencies for alleged violation of section 400.0255, Florida Statutes, regarding transfers or discharges initiated by nursing homes.  The statement of deficiencies was challenged by petitioner and the matter was referred to DOAH.  The ALJ found that section 400.0255, Florida Statutes, was inapplicable to the circumstances, as the physician initiated the Baker Act transfer, not the nursing home.

Holding: The Final Order found that the Agency failed to establish that respondent violated section 400.0255, Florida Statutes, by improperly discharging or transferring the resident, and they Agency withdrew its Statement of Deficiencies.

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner v. GREENBRIAR NH, LLC d/b/a GREENBRIAR REHABILITATION AND NURSING CENTER, Respondent, 2012 WL 2191285 (June 7, 2012) DOAH CASE NO. 11-4379

Administrative Complaint alleged that Respondent failed to comply with background screenings and alleged a Class II deficiency.

Holding: the Respondent failed to comply with the relevant law regarding background screenings as well as its own policies and procedures when it hired new employee. However, the Petitioner failed to prove that these failures constituted a Class II deficiency.  The Final Order dismissed the Administrative Complaint and replaced the Conditional License with a Standard License for the time period in question.

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner v. SA-PG SUN CITY CENTER, LLC d/b/a PALM GARDEN OF SUN CITY, Respondent, 2011 WL 379931 (January 1, 2011), DOAH CASE NO. 10-4740

Administrative Complaint alleged that Respondent failed to follow established and recognized practice standards regarding care to its residents; and failed to comply with the rules governing skilled nursing facilities adopted by AHCA.

Holding: There is no competent and substantial evidence that Respondent failed to follow established practice standards that resulted in harm to its residents and failed to comply with rules governing skilled nursing facilities, or that otherwise warrants a fine or Conditional rating. Respondent was marginally deficient in two minor areas concerning their own policies, but neither violation is a Class II deficiency, nor warrants imposition of a sanction.

Conclusion

Preventative measures are the best way to protect against survey deficiencies.  ALF/SNF administrators should develop and implement trainings and staff education to ensure compliance with Florida Statutes and rules.  Qualified health care consulting firms and health care attorneys can assist with developing compliant materials and compliance programs.  An ounce of prevention in this respect will be well worth avoiding the costs of a bad survey or inspection by AHCA.

However, even with a good education and compliance program in place, AHCA may still seek to suspend or revoke a license, or impose a moratorium on admissions or levy substantial fines.  In order to assess penalties, AHCA is required to file an Administrative Complaint.  ALFs/SNFs have the right to demand a formal hearing to challenge the facts, and to challenge the amount or appropriateness of the fines being imposed.

ALF/SNF administrators in such situations should consult and retain experienced legal counsel to contest and defend against such actions by filing a Petition for Formal Administrative Hearing pursuant to Chapter 120.  The timeframe for responding to an Administrative Complaint is 21 days from receipt of the Complaint, and failure to timely file a petition may result in an admission of the facts alleged in the Complaint and entry of a Final Order by the agency.  ALF/SNF administrators need to be aware of their legal rights prior to receiving an Administrative Complaint and need to be sure to consult with counsel prior to inadvertently waiving any rights.  Hiring experienced legal counsel is crucial in any challenge to an Administrative Complaint.  Experienced counsel can not only help to protect your due process rights, but can also ensure that the State is required to prove its case by clear and convincing evidence.

Geoffrey D. Smith is a shareholder in the law firm of Smith & Associates, and has practiced in the area of health care law for over 20 years.

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1 §408.811 (1), Fla.  Stat., §429.34 (1), Fla.  Stat., §400.19, Fla.  Stat.

2 §408.811 (1), Fla.  Stat.

3 §408.811 (3), Fla.  Stat.

4 §408.811 (4), Fla.  Stat.

5 §408.811 (5), Fla.  Stat.

6 §408.811 (6), Fla.  Stat.

7 §408.814 (1), Fla.  Stat.

8 §120.60 (7), Fla.  Stat.

9 §429.19 (2), Fla.  Stat.

10 §408.813(2), Fla.  Stat.

11 §408.813(2)(a), Fla.  Stat.; §429.19(2)(a), Fla.  Stat.

12 §408.813(2)(b), Fla.  Stat.; §429.19(2)(b), Fla.  Stat.

13 §408.813(2)(c), Fla.  Stat.; §429.19(2)(c), Fla.  Stat.

14 §408.813(2)(d), Fla.  Stat.; §429.19(2)(d), Fla.  Stat.

15 §429.19(3), Fla.  Stat.

16 §429.19(4), Fla.  Stat.

17 §429.19(5), Fla.  Stat.

18 §400.23(7), Fla.  Stat.

19 §400.23(7)(a) and (b), Fla.  Stat.

20 §400.23(7)(d), Fla.  Stat.

21 §400.23(7)(d), Fla.  Stat.

22 §400.23(8), Fla.  Stat.

23 §400.23(8), Fla.  Stat.

24 §400.23(8), Fla.  Stat.

25 §400.23(8), Fla.  Stat.

26 §400.121(2), Fla.  Stat. (emphasis added).

27 §400.121(3), Fla.  Stat.

28 §400.121(5), Fla.  Stat.

29 §400.121(7), Fla.  Stat.

30 The burden of proof on AHCA to impose an administrative fine is by clear and convincing evidence. Dep’t of Banking & Fin, v. Osborne Stern & Co., 670 So. 2d 932 (Fla. 1996). The burden of proof for the assignment of licensure status is by a preponderance of the evidence. See Florida Dep’t of Transp. v. J.W.C. Co., Inc., 396 So. 2d 778 (Fla. 1st DCA 1981); Balino v. Dep’t of HRS, 348 So. 2d 349 (Fla. 1st DCA 1977).  See also AGENCY FOR HEALTH CARE ADMINISTRATION v. TALLAHASSEE FACILITY OPERATIONS. LLC d/b/a CONSULATE HEALTHCARE OF TALLAHASSEE, 2015 WL 510385, at *12 (February 2, 2015), DOAH CASE NO. 14-0436.

 

Government Must Look at Bidder’s Unique Approach When Evaluating Bids

Last week the GAO issued a recommendation in the Matter of: Alcazar Trades, Inc.; Sparkle Warner JV, LLC. The Government issued an RFP for a fixed-price contract, with a 1-year base period and four option years, to furnish custodial services for 23 buildings and 7 guard shacks at the Denver Federal Center. The award was to be made to the bidder whose proposal was the “most advantageous to the government,” considering price and the following non-price evaluation factors: management plan (30 percent of the non-price factors), past performance (30 percent), and experience (40 percent). Alcazar Trades, Inc. (“ATI”) submitted the bid with the lowest price. The government found that ATI’s bid was unrealistic such as to “put the government at risk if the Offeror tried to perform the services with inadequate funding.” ATI then filed this bid protest.

The GAO found that as a general matter “[p]rice realism need not necessarily be considered in evaluating proposals for the award of a fixed-price contract, because these contracts place the risk of loss upon the contractor rather than the government.” The GAO further held that “[w]here offerors take a similar approach to meeting the solicitation requirements, our Office has generally not objected to a price realism analysis that focuses on a comparison of an offeror’s price to the government estimate and the prices of other offerors… Our Office has recognized, however, that a price realism evaluation must consider the unique technical approaches proposed by each offeror.” ATI argued that its staffing approach was unique and was not comparable to the other bidders, as such, it was able to offer a much lower price. The GAO agreed and concluded that the government “unreasonably evaluated the realism of ATI’s low price, failing to account for ATI’s unique staffing approach.” It then recommended that the government reevaluate the proposals and reimburse ATI its attorney’s fees and costs.

If you believe that your bid response has been improperly evaluated, contact the experienced bid protest attorneys at Smith & Associates for a free consultation.

GAO’s Bid Protest Decision Breathes New Life Into Protester’s Bids

Last week, the GAO issued a decision in The Matter of Al Raha Group for Technical Services,Inc.; Logistics Management International, Inc. The Air Force issued an RFP for F-15 fighter jet transportation support services. In response, it received 7 proposals. These proposals would be evaluated based upon three factors: technical; past performance; and cost/price. All seven bidders received “Acceptable” scores with regards to the technical factor. Logistics Management International, Inc (“LMI”) and Al Raha Group for Technical Services, Inc. (“RGTS”) submitted the two lowest bids respectively with regards to price, with SupplyCore coming in third. However, both LMI and RGTS recieved a “Limited” score on the Past Performance Confidence factor. Due to this, the Air Force awarded the bid to SupplyCore and LMI and RGTS filed a bid protest.

The GAO held that the Air Force failed to evaluate SupplyCore’s past performance in accordance with RFP requirements. It further held that the Air Force failed to meaningfully consider available agency information regarding LMI’s past performance of similar requirements for the Air Force, and therefore sustained LMI’s bid protest. However, the GAO held that the Air Force did not unreasonably ignore or contradict RGTS’s CPARs, rely on adverse past performance information, or ignore relevant past performance information not yet captured in a final, formal CPAR.

Based upon these holdings, the GOA recommended that the Air Force reevaluate offerors’ past performance information and, based on that reevaluation, it recommended that the agency make a new source selection determination. Finally, it recommended that the agency reimburse the protesters their respective costs associated with filing and pursuing their protests, including reasonable attorneys’ fees.

If you believe that your bid has been improperly scored, contact the experienced bid protest attorneys at Smith & Associates for a free consultation.

Bid Protest Are Not Only for the Lowest Bidder

Orange County recently requested bids for its trash collection service. FCC Infrastructure responded with the lowest bid across the board. Now, two other bidders, Waste Pro and Florida Republic, are protesting the award of the contract to FCC. While the details of the case are still forthcoming, this news article contains some details of the issue and statements from each of the bidders.

According to Waste Pro and Florida Republic, FCC was able to get the lowest bid because they did not properly bid the project. According to a Waste Pro representative, FCC’s bid would require it to do with one truck what Waste Pro would need ten trucks to do. In essence, Waste Pro is arguing that, while FCC was the lowest bidder, it was not the lowest responsible bidder.

Public authorities are required to award bids to the “lowest responsible bidder.” Wester v. Belote, 103 Fla. 976, 138 So. 721 (1931). “A responsible, or qualified, bidder is one who has the capability in all respects to fully perform the contract requirements and the integrity and reliability that will assure good faith performance.” Am. Eng’g & Dev. Corp. v. Town of Highland Beach, 20 So. 3d 1000, 1000-01 (Fla. Dist. Ct. App. 2009) internal quotes omitted. Thus, simply submitting the lowest bid is not enough. A bidder must also be qualified to perform the work.

Therefore, a bidder who does not submit the lowest bid can still file a bid protest if the lowest bidder is not a responsible bidder. If you have been denied an award of a public contract due to the lowest bidder not being a responsible bidder, contact the experienced bid protest attorneys here at Smith & Associates for a free consultation. Be aware that bid protest cases have very strict, short deadlines, so you must act quickly to preserve your rights.

Update on Return of Nursing Home CON in Florida

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The “post moratorium era” continues for the Nursing Home Certificate of Need (“CON”), with twenty-eight Letters of Intent filed in response to published Fixed Need Pools for an additional 493 nursing home beds statewide. Since the lifting of the moratorium on nursing home CON by the Legislature last year, the Agency for Health Care Administration (“AHCA “) has approved a total of 3,198 needed nursing home beds. Under the legislation, AHCA cannot approve any more CONs for nursing home beds equal to or greater than 3,750 (until June 30, 2017). Assuming AHCA awards all of the published need to these applicants, the total approvals by AHCA since the legislation was passed will be 3,691 beds. This would mean that there would only be 59 beds left before the 3,750 statutory cap is reached. Other deadlines are fast approaching, as well. Any provider that wishes to file a competing Grace Period Letter of Intent has until May 6, 2015 to file for a competing proposal.

The following tables show the Fixed Need Pool in each subdistrict where AHCA has received one or more letters of intent. The tables reflect the number of beds published in the Fixed Need Pool and a summary of the Letters of Intent received in each subdistrict to date. Additional notations are made as to any observations regarding the number of beds sought in relation to the fixed need pool.

Subdistrict 1-1
(Escambia and Santa Rosa)
Need: 61

Escambia FL HUD Pensacola/Specialty Health and Rehabilitation Center Add 30 community nursing home beds
Escambia NF Bay, LLC Establish a new 90-bed community nursing home
Escambia PruittHealth – Escambia County, LLC Establish a new community nursing home of up to 120 beds

*Note: Two applicants have filed for a number greater than published need; and one less.

Subdistrict 2-1
(Gadsden, Holmes, Jackson and Washington)
Need: 41
No LOIs received despite published need.


Subdistrict 3-1
(Columbia, Hamilton and Suwannee)
Need: 113

Columbia MF Orange, LLC Establish a new 113-bed community nursing home
Columbia Palm Garden of Lake City, LLC Establish a new community nursing home of up to 113 beds
Columbia PruittHealth – Alachua County, LLC Establish a new community nursing home of up to 113 beds
Columbia Terrace Enterprises, LLC Establish a new community nursing home of up to 113 beds

Subdistrict 3-2
(Alachua, Bradford, Dixie, Gilchrist, Lafeyette, Union, and Levy)
Need: 47

Alachua Innovative Medical Management Solutions, LLC Establish a new 47-bed community nursing home
Alachua Oak Hammock at the University of Florida Add 17 community nursing home beds through the conversion of 17 sheltered nursing home beds
Alachua Palm Garden of Gainesville, LLC Add up to 47 community nursing home beds

Subdistrict 3-3
(Putnam)
Need: 34

Putnam Crestwood Nursing Center, Inc. Add up to 34 community nursing home beds
Putnam Lakewood Nursing Center, Inc. Add up to 34 community nursing home beds

Subdistrict 3-4
(Marion)
Need: 0

Marion Ocala SNF, LLC Establish a new community nursing home of up to 120 beds

*Note: No published need, but an LOI was received.

Subdistrict 3-5
(Citrus)
Need: 23
Need published but no LOIs filed.


Subdistrict 3-6
(Hernando)
Need: 5
Need published but no LOIs filed.


Subdistrict 4-1
(Nassau and North Duval)
Need: 14

Duval Edgewood Nursing Center, Inc. Add up to 14 community nursing home beds
Duval Innovative Medical Management Solutions, LLC Establish a new 14-bed community nursing home

Subdistrict 4-3
(St. Johns and Southeast Duval)
Need: 0

St. Johns Saint Johns SNF LLC Establish a new community nursing home of up to 120 beds

*Note: No published need, but an LOI was received.

Subdistrict 5-1
(Pasco)
Note: 44

Pasco Innovative Medical Management Solutions, LLC Establish a new 44-bed community nursing home
Pasco LP New Port Richey, LLC/Southern Pines Healthcare Center Add 44 community nursing home beds

Subdistrict 6-4
(Highlands)
Need: 11
Need published but no LOIs filed.



Subdistrict 7-2
(Orange)
Need: 0

Orange Orange SNF, LLC Establish a new community nursing home of up to 120 beds

*Note: No published need, but an LOI was received.

Subdistrict 7-4
(Seminole)
Need: 33

Seminole Innovative Medical Management Solutions, LLC Establish a new 33-bed community nursing home

Seminole Lifespace Communities, Inc./Village on the Green Add up to 33 community nursing home beds
Seminole Seminole SNF LLC Establish a new community nursing home of up to 120 beds

*One applicant exceeds published need.

Subdistrict 8-2
(Collier)
Need: 0

Collier Pelican Bay Retirement Services/Premier Place at the Glenview Add up to 14 community nursing home beds through the conversion of up to 14 sheltered beds

*Note: No published need, but an LOI was received.

Subdistrict 9-1
(Indian River)
Need: 9

Indian River Palm Garden of Vero Beach, LLC Add up to nine community nursing home beds

Subdistrict 9-2
(Martin)
Need: 9
Need published but no LOIs filed.


Subdistrict 9-3
(Okeechobee)
Need: 4
Need published but no LOIs filed.


Subdistrict 11-1
(Miami Dade)
45

Miami Dade CC-Aventura, Inc./VI at Aventura Add up to 40 community nursing home beds
Miami Dade Florida Medical Systems, LLC/Florida Medical Systems, LLC Add up to 45 community nursing home beds and a partial of 15 beds
Miami Dade Palm Garden of Aventura, LLC/Palm Garden of Aventura, LLC Add up to 45 community nursing home beds
Miami Dade Pediatric Specialty Care of Florida, LLC/Pediatric Specialty Care of Florida, LLC Establish a new community nusing home of up to 45 beds

Total Statewide: 493



Any provider that has been contemplating an opportunity to seek a CON for a new facility or additional beds at an existing facility should review the currently filed Letters of Intent carefully, and decide if now is the time to seek approval for a competing project. Existing providers should also carefully consider their options, and decide whether to oppose a project that may have a negative impact on existing operations. Please feel free to call me for any additional information.

Geoffrey D. Smith is a shareholder in the law firm of Smith & Associates, and has practiced in the area of health care law and CON regulation for over 20 years.

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Smith & Associates in the News

Smith & Associates successfully lobbied the Brevard County Board of County Commissions allowing Cocoa Expo to hold baseball games pending the final completion of the stadium.

As a result, there likely will be high school and college baseball games there most weekends during April and early May, according to Geoffrey Smith of the Smith & Associates law firm, which represented Cocoa Expo before the County Commission.

Read the full story here : http://www.floridatoday.com/story/news/local/2015/04/01/play-ball-cocoa-expo-can-temporarily-open-baseball/70745240/

And watch Jason Steele, a lobbyist at Smith & Associates, discuss the impact of this decision below.

The professionals at Smith & Associates have decades of experience in lobbying, land use, and zoning laws. If you are having land use of zoning issues with local government, contact us today.