ALJDEC decisions subject to certification as final
18-0002-PHX · City of Phoenix · 2018-06-22
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
In the matter of:
ISS Facility Services, Inc.
v.
City of Phoenix
No. 18-0002-PHX
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: No hearing was conducted; the matter was resolved based on the administrative record provided by the City of Phoenix
ADMINISTRATIVE LAW JUDGE: Thomas Shedden
_____________________________________________________________________
FINDINGS OF FACT
The City of Phoenix and the Arizona Office of Administrative Hearings have a contract under which OAH conducts administrative review of appeals of procurement disputes as provided for in Phoenix City Code, Chapter 43.
The City referred this matter to OAH on May 24, 2018.
The issue is ISS Facility Services, Inc.’s (“ISS”) protest and appeal of the proposed award resulting from the City’s Aviation Department’s Request for Proposal 18-006 – Custodial Services.
RFP 18-006 was issued by the Aviation Department on December 18, 2017; five addenda were subsequently issued.
RFP 18-006 requested proposals for the provision of custodial services at three City Airports. The RFP calls for the award of two contracts, a large company contract and a small company contract. Only the large company contract is at issue in this matter.
Six companies submitted proposals for the large company contract. As pertinent to this matter these included ISS and Flagship Airport Services, Inc. (“Flagship”).
Proposals were evaluated under five criteria: Operations Plan (250 points maximum); Qualifications/Experience (200 points maximum); Quality Assurance Program (200 points maximum); Recruitment and Retention Plan (200 points maximum); and Pricing (150 points maximum).
Flagship received 932.13 points and ISS 869.58.
The City determine that Flagship was in the “competitive range” and it offered Flagship the opportunity to make a Best and Final Offer (“BAFO”). No other offerors were found to be in the competitive range.
As part of the BAFO process, the procurement officer met with representatives from Flagship on March 14, 2018. Prior to that meeting, the City informed Flagship that to “relieve some budgetary challenges” it was asking Flagship to review and revise three areas and to provide its best competitive pricing. The three areas were: (1) Exploring possible reductions in the program areas identified Flagship’s proposal. (2) Revisit wages and minimum wage law (Proposition 206) including escalation over the initial three years of the contract, and identify possible cost saving opportunities for the City. (3) That the City would be reducing the scope of service by removing “inner and outer curbs” at Terminal 2, 3, 4 and Rental Car Center, and “Operations Center Sidewall & Curb” once the contract is established.
On April 4, 2018, the City posted a Notice of Award Recommendation showing the City’s recommendation that Flagship be awarded the large company contract. The Notice shows that the procurement file was available upon request as of that date.
On April 5, 2018, ISS made a request to view the procurement file. On April 6, 2018, the procurement officer informed ISS that the file was not available in electronic format, and that ISS should let her know when it wanted to view the file and she would arrange for a meeting room.
ISS’s representatives viewed the procurement file on April 9 and 10, 2018. On April 10, 2018, ISS requested an index of the withheld documents, which the City provided on that date.
ISS filed with the City a protest on April 11, 2018.
Through its protest, ISS asserted that: (1) the City did not comply with ISS’s records request made under Ariz. Rev. Stat. section 39-121 and it violated City Code section 43-25(A)(4) by failing to extend the due date for ISS’s protest; (2) the City did not provide an index of withheld documents as required by Ariz. Rev. Stat. section 39-121.01(D)(2); (3) the scoring for “Recruitment and Retention” was flawed in violation of City Code section 43-15; (4) the scoring for “Qualifications and Experience” was flawed in violation of City Code section 43-15; and (5) Flagship was provided “unique information” related to reduction of service lines and staffing, and that Flagship was given the opportunity to submit what was effectively a new bid response.
In its protest, ISS requested that the award be cancelled pursuant to City Code section 43-29 for failure to comply with City Code section 43-15.
On April 27, 2018, through counsel, the procurement officer issued a Protest Response denying ISS’s protest.
Regarding ISS’s allegation that the City failed to extend the deadline for ISS to file a protest, the Protest Response shows that the procurement officer was of the opinion that City Code section 43-25(A)(4) was not applicable because the entire procurement file had been made available on April 4, 2018, which was the day before ISS made its public records request.
Regarding ISS’s allegation that the City failed to comply with Ariz. Rev. Stat. section 39-121.01(D)(2), the Protest Response shows that the procurement officer was of the opinion that the City complied with ISS’s request on the day it was made, and that City Code section 43-25(A)(4) does not require the extension of a protest deadline for failure to comply with section 39-121.01(D)(2).
Regarding the scoring of the proposals, citing Lumetra v United States, the procurement officer took the position that a difference of opinion in scoring was not a basis on which an award could be overturned.
In “Recruitment and Retention,” Flagship scored 197 points and ISS 171. In “Qualifications and Experience,” Flagship scored 190 points and ISS 194.
In total, Flagship outscored ISS by sixty-two points, consequently, the procurement officer concluded that even if ISS’s score was adjusted in these two areas (to 197 points for Recruitment and Retention and to 200 points in Qualifications and Experience), Flagship would still have had the higher score.
Regarding ISS’s allegation that the City had provided Flagship unique information during the BAFO process, the Protest Response shows that the procurement officer was of the opinion that the discussions with Flagship regarding ways to reduce its pricing were in conformity with Section III of the RFP, which addresses the BAFO process. The procurement officer also noted that the City had authority to reject all offers as allowed by the RFP.
On May 3, 2018, ISS filed its Appeal of Denial of Protest under RFP 18-006.
In its Appeal, ISS: (1) reasserted its position that the City did not comply with Ariz. Rev. Stat. section 39-121 regarding ISS’s April 5, 2018 records request; (2) argued that the Protest Response did not provide an adequate response to ISS’s allegations regarding the scoring for “Recruitment and Retention” and “Qualifications and Experience;” and (3) argued the bid process was not competitive because the City made material and significant changes to the scope of the RFP during its BAFO negotiations with Flagship.
On May 17, 2018, the procurement officer submitted to the City Manager an Appeal Summary summarizing the process and providing responses to the issues raised in ISS’s appeal.
CONCLUSIONS OF LAW
The City has jurisdiction over the subject matter in this case.
The Director of the Office of Administrative Hearings is authorized to enter into contracts with political subdivisions of this state for the purpose of providing administrative proceedings. Ariz. Rev. Stat. § 41-1092.01(J).
The City contracted with the Office of Administrative Hearings to provide the administrative proceeding in this matter, including the preparation of Findings of Fact, Conclusions of Law, and Recommended Order for action by the City.
ISS bears the burden of proof. See Vazzano v. Superior Court, 74 Ariz. 369, 249 P.2d 837 (1952); see also Ariz. Admin. Code § R2-19-119.
The standard of proof on all issues is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119.
A preponderance of the evidence is:
The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.
Black’s Law Dictionary 1373 (10th ed. 2014).
Phoenix City Code Chapter 43 governs procurement issues.
This matter is suitable for resolution based on the administrative record. Phoenix City Code § 43-26(E)(“If assigned to a hearing officer for fact finding, the appeal may be supplemented in the discretion of the hearing officer ....”).
A city’s procurement decision should not be disturbed absent a finding that the decision was “illegal, unfair or arbitrary.” Brown v. City of Phoenix, 77 Ariz. 368, 377, 272 P.2d 358, 364 (1954); see also Lumetra v. United States, 84 Fed. Cl. 542, 549, (Fed. Cl., 2008) (the court “will not second guess the minutiae of the procurement process in such matters as technical ratings”)(citation omitted).
An arbitrary action is an “unreasoning action, without consideration and in disregard for facts and circumstances; where there is room for two opinions, the action is not arbitrary or capricious if exercised honestly and upon due consideration, even though it may be believed that an erroneous conclusion has been reached.” Maricopa County v. Gottsponer, 150 Ariz. 367, 372, 723 P.2d 716, 721 (App. 1986)(quoting Petras v. Arizona State Liquor Board, 129 Ariz. 449, 631 P.2d 1107 (App. 1981)).
Ariz. Rev. Stat. section 39-121 provides that “Public records and other matters in the custody of any officer shall be open to inspection by any person at all times during office hours.” The procurement file was available for viewing as of April 4, 2018. ISS has not shown by a preponderance of the evidence that the City failed to comply with ISS’s April 5, 2018 request to review that file. And because the procurement file was available for review at the time ISS made its request, the provision of City Code section 43-25 requiring the deadline for protests to be extended does not apply to this matter.
The City does not meet the definition of an “agency” found at Ariz. Rev. Stat. section 41-1001. Consequently, Ariz. Rev. Stat. section 39.121.01(D)(2) is not applicable to the City. ISS has failed to show that any alleged violation of that subsection provides a basis on which to grant its protest.
ISS did not show through either its protest or appeal that the City’s scoring decisions for “Recruitment and Retention” and “Qualifications and Experience” were arbitrary, illegal, or unfair. In its Appeal ISS did not address the arguments and reasoning regarding this issue as set out in the procurement officer’s Protest Response, nor did ISS demonstrate that the procurement officer’s reasoning was flawed. ISS has not shown by a preponderance of the evidence that the scoring provides a basis on which to grant its protest.
In its Protest, ISS asserted that the City violated City Code section 43-15 during its BAFO negotiations with Flagship, but it did identify any specific subsection of that provision. In its Appeal, ISS again asserted that the City violated section 43-15 without identifying a specific subsection. In its Appeal ISS did not address the arguments and reasoning regarding this issue as set out in the procurement officer’s Protest Response, nor did ISS demonstrate that the procurement officer’s reasoning was flawed. ISS has not shown by a preponderance of the evidence that the City’s negotiations with Flagship provide a basis on which to grant ISS’s protest.
RECOMMENDED ORDER
In view of the foregoing, it is recommended that ISS Facility Services, Inc.’s protest and appeal be dismissed.
Done this day, June 22, 2018
/s/ Thomas Shedden
Thomas Shedden
Administrative Law Judge
Transmitted electronically to:
Ed Zuercher, City Manager
City of Phoenix