Emerald Correctional v. Bay County Bd.

• Decision Date: 04 May 2007
• Docket Number: No. 1D06-2754.,1D06-2754.
• Citation: 955 So.2d 647
• Parties: EMERALD CORRECTIONAL MANAGEMENT, Appellant, v. BAY COUNTY BOARD OF COUNTY COMMISSIONERS, Bay County, a political subdivision of the State of Florida, and Corrections Corporation of America, Appellees.
• Court: Florida District Court of Appeals

955 So.2d 647

EMERALD CORRECTIONAL MANAGEMENT, Appellant, v. BAY COUNTY BOARD OF COUNTY COMMISSIONERS, Bay County, a political subdivision of the State of Florida, and Corrections Corporation of America, Appellees.

No. 1D06-2754.

District Court of Appeal of Florida, First District.

May 4, 2007.

Obed Dorceus, Tallahassee, for Appellant.

William C. Henry, Panama City, for Appellee Bay County; and Clifford C. Higby, Panama City, for Appellee Corrections Corporation of America.

WOLF, J.

Emerald Correctional Management (Emerald) challenges a final order dismissing appellant's complaint with prejudice for failing to state a cause of action concerning appellee Bay County Board of County Commissioners' (the Board) decision to award a contract to Corrections Corporation of America (CCA) pursuant to a request for proposals. The issues before the court are: (1) whether the trial court erroneously relied on the broad discretion retained by the county in the request for proposal process in denying appellant's complaint alleging improper manipulation of the request for proposal process by the county, and (2) whether appellant sufficiently stated a cause of action premised on the county's alleged violation of Florida's "Sunshine Law."

We find no merit in the Sunshine Law complaint and, because there is no allegation of improper communication between two members of the same public board, uphold the trial court's dismissal as to that issue without further comment. We find, however, that the trial court erred in dismissing appellant's complaints regarding improper favoritism in the award of the contract regarding the Bay County Jail.

On June 21, 2005, appellee, Bay County (the County) issued a Request for Proposals (RFP) asking potential contractors to submit proposals to design, build, and finance an expansion of Bay County's existing correctional facility. The RFP further required that the winning contractor manage the existing facility, the expanded facility, a court holding, and a vehicle sally port facility proximal to the Bay County Courthouse. Pursuant to the RFP, a bidder was required to provide detailed breakdowns of said costs on two forms that were also provided by the County. The RFP included the following clause:

The Board of County Commissioners reserves the right to accept or reject any and all proposals in whole or in part, to waive informalities in the process, to obtain new proposals, or to postpone the opening pursuant to the Board's purchasing policies. Bids shall be valid to Bay County for a period of one hundred and twenty days after the opening.

In addition, the RFP expressly stated:

3.0 PROPOSAL INFORMATION

. . . .

3.5 The County reserves the right to accept or reject in part or in whole any or all proposals submitted.

3.6 The County shall accept all proposals properly submitted. However, the County reserves the right to request clarifications or corrections to proposals. Requests for clarifications or corrections by the County shall be in writing.

. . . .

4.0 BASIS FOR AWARD

4.1 The Contract will generally be awarded to the respondent that has the highest score on a structured evaluation tool approved by the Bay County Board of County Commissioners. The intent is to select the respondent considered to offer the best overall total value to the County.

4.2 There is no obligation on the part of the County to award the proposal to the lowest priced respondent, and the County reserves the right to award the proposal to the respondent submitting the best overall responsive proposal with a resulting negotiated agreement which is most advantageous and in the best interest of Bay County, and to waive any irregularity or technicality in the proposals received. Bay County shall be the sole judge of the proposal and the resulting negotiating agreement that is in its best interest and its decision shall be final.

Sealed proposals were due on September 15, 2005. Two bidders, Emerald and Intervener CCA, submitted proposals in response to the County's request for proposals and both proposals were determined by the County to be responsive.

In its response to the RFP, appellant submitted a construction only cost of $35,404,000 to Bay County on the County's own required proposal cost form, for the construction of the project. A breakdown of appellant's construction cost was also provided by appellant on the County's cost breakdown form as required. CCA, in its response to the RFP, submitted a construction only cost of $41,598,836 on the proposal cost form provided by the County. Upon receipt of the proposals, the County issued a "Request for Clarifications" by submitting separate questions to appellant and to CCA regarding their individual proposals.

On December 20, 2005, relying on new numbers submitted by CCA in response to the County's Request for Clarifications, the County created a "New Jail Analysis" and presented the analysis to the Board. Based on CCA's new submission, in the New Jail Analysis presented to the Board before the vote on the two proposals, the County restructured CCA's cost proposal and reduced the original construction price by $5,109,859 to $36,488,977. This resulted in a presentation to the Board of an estimated total price for the project of $117,164,000.00 for appellant and $114,254,417 for CCA. Following the presentation, the Board directed the County to begin negotiating a contract with CCA.

On January 6, 2006, appellant filed a formal notice of protest challenging the County's decision to negotiate a contract with CCA and the County's intended decision to award the contract to CCA. Upon receipt of the formal request, the protest was presented to the Board, which voted to continue the negotiations with CCA. No findings were issued. On January 27, 2006, the county manager issued a letter denying appellant's protest based on the recommendation of the county purchasing agent.

On February 8, 2006, appellant filed a six-count complaint challenging the County's award to CCA. We find that the trial court properly dismissed all of the counts except Counts II and IV. Count II, in pertinent part, alleged that the County permitted CCA to add a clause in their bid proposal forgoing the setting of an established cost pursuant to fluctuating construction costs. As such, appellant alleged CCA was allowed to tentatively estimate a cost that would later be inflated due to the increasing construction inflation, while appellant was required to submit a set cost estimate that would not be subject to change. Appellant asserts this action unfairly favored CCA in the bid process. Count IV, in pertinent part, alleged that the County's decision to allow CCA to make material changes to its non-responsive proposal was improper.

The County moved to dismiss. The trial court dismissed Count II because "the County is afforded significant discretion in the RFP process, the Court finds that ECM has not shown the probability of success required . . . ." Count IV was dismissed even though the trial court found that Emerald has alleged the County's actions were illegal, arbitrary, and capricious because the trial court reasoned that the County retained its express right in the RFP to maintain sole discretion in rejecting any and all proposals.

While we recognize the wider discretion afforded counties and cities in exercising discretion in accepting or rejecting responses to RFPs, the decisions still must be subject to review to determine whether the governing body acted arbitrarily or capriciously. § 255.20, Fla. Stat. (2005).

Whether a complaint is sufficient to state a cause of action is an issue of law, subject to de novo review. Warren ex rel. Brassell v. K-Mart Corp., 765 So.2d 235, 236 (Fla. 1st DCA 2000). In ruling on a motion to dismiss for failure to state a cause of action, this court is confined to a consideration of the allegations made within the four corners of the complaint. Meadows Cmty. Ass'n, Inc. v. Russell-Tutty, 928 So.2d 1276, 1280 (Fla. 2d DCA 2006). This court must assume that all allegations are true and decide whether the complaint states a cause of action. Id. at 1279. Furthermore, in a bid protest dispute where the petitioner alleges the County abused its discretion and did not comply with the RFP in evaluating proposals and/or the evaluators misinterpreted the RFP, proposal, statute or facts, the reviewing court need not second guess the members of the evaluation committee to determine whether reasonable persons might reach a contrary result. Scientific Games, Inc. v. Dittler Bros., Inc., 586 So.2d 1128, 1131 (Fla. 1st DCA 1991). Rather, a "public body has wide discretion" in the bidding process and "its decision, when based on an honest exercise" of the discretion, should not be overturned even if reasonable persons might disagree. See Sutron Corp. v. Lake Co. Water Auth., 870 So.2d 930, 932 (Fla. 5th DCA 2004) (explaining that discretion of public entity to solicit, accept or reject contract bids should not be interfered with by the courts absent a showing of dishonesty, illegality, fraud, oppression or misconduct).

In the instant case, appellant asserts the County's acceptance of CCA's proposal did not comply with the RFP because (1) the County unfairly amended and manipulated CCA's proposal to bring down the overall cost of the project; (2) the County accepted CCA's proposal even though the proposal materially altered the termination terms as set out in the RFP; and (3) the County accepted CCA's proposal even though the proposal did not set a construction cost as required by the RFP.

In contrast to bids, a RFP is used when the public authority is incapable of completely defining the scope of work required, when the service may be provided in several different ways, when the qualifications and quality of service are considered the primary factors instead of price, or when responses contain varying levels of service which may require subsequent negotiation and...