CITY OF MIAMI, FLORIDA MEMORANDUM. TO: City of Miami Commissioners DATE: May 10, 2016 New Rickenbacker Marina, LLC SUBJECT: Response to Bid Protest submitted on behalf of New Rickenbacker Marina, LLC FROM: Daniel Rotenberg, REFERENCES: Virginia Key Marina RFP No. 12-14-07 Director Department of Real Estate and ENCLOSURES: Bid Protest submitted on behalf of New Asset Management Rickenbacker Marina, LLC RESPONSE TO BID PROTEST ‘SUBMITTED ON BEHALF OF NEW RICKENBACKER MARINA, LLC Background ‘The City of Miami Department of Real Estate and Asset Management (“DREAM”) issued RFP No. 12-14- 077 for the development and lease of a city-owned waterfront property located in Virginia Key ("Virginia Key Marina RFP"), and proposals were received from the following firms: Virginia Key, LLC ("RCI Group”), New Rickenbacker Marina, LLC ("Tifon”), and Virginia Key SMI, LLC ("Suntex”). The Selection Committee (“Committee”) appointed by the City Manager, met on March 16, 2016 to evaluate the proposals and recommended that the City negotiate with the highest ranked proposer, RCI Group. The City Manager concurred with the Committee's recommendation, and Tifon and Suntex submitted timely bid protests. The responses were reviewed by Mr. Rotenberg, the Director of Dream, as Chief Procurement Officer for RFPs regarding real estate per Section 18-176.3, City Code. Protest Allegations Tifon argues and alleges that the final recommendation by the City Manager was arbitrary and capricious based on the following points, as more specifically detailed in their bid protest, which is enclosed for your review. ‘The recommended proposer, RCI Group, was permitted to make material changes after submission; ‘The second ranked proposer, Suntex, was non-responsive; A Committee member's scores were arbitrary and capricio ‘The referenced Committee member used evaluation criteria outside the established ys and The referenced Committee member submitted a divergent score evidencing a conflict of interest. veene protest, the Chief Procurement Officer's position is filled by the Director of DREAM. See Section 18-176.3, City Code, Per Section 18-104(a)(2), the Chief Procurement Officer shall limit his review to the arguments alleged in the written protest, and no other facts, grounds, documentation, or evidence shall be considered. As such, my response shall be limited to the arguments provided in the Protest. As Director of DREAM and therefore the Chief Procurement Officer for this RFP, I submit to you the following response, which provides, that the protest submitted on behalf of Tifon should be denied. In sum, both RCI Group and Suntex Were responsive and responsible bidders and the process was conducted fairly with no evidence of conflict. 1. No material changes were made to RCI Group's proposal after submission, only clarifications Page 1of 5RCI Group was not permitted to make any changes to their Proposal. Rather, they were asked to clarify items that were unclear, as permitted by applicable law. In short, RCI Group provided two alternative plans in their proposal: the first included the MPA Parking garage in the location originally designated ("Alternative Plan”), and the second included a parking garage under the proposed dry storage facility ("Preferred Plan”). Admittedly, upon a first reading of the Preferred Plan, it appeared as though RCI Group would not provide the parking contribution and would build operate and maintain the municipal parking garage, contrary to RFP requirements. However, upon a second review it became apparent, despite Tifon ‘s arguments otherwise, that the Preferred Plan submitted by RCI Group does not make the previous assertion, but rather, was simply unclear regarding what entity would build operate and maintain the municipal parking garage and whether RCI Group would pay the parking contribution. RCI Group then clarified these items in their Preferred Plan, indicating total compliance with RFP requirements. As this concern was easily resolved by a simple request for clarification and corresponding request that they clarify this point during their presentation, the proposal was not deemed to be contrary to the RFP and RCI Group was permitted to present both alternative plans to the Committee. In support of their argument, Tifon cites to RCI Group’s proposed revisions to the draft lease, which provide, in relevant part, “[als an alternative, Lessee, at Lessee’s election may, in lieu of making the parking trust fund contribution, provide for all of its required parking on the Premises at Lessee’s sole cost and expense.” There are a few points to make in response to this allegation, the first being that this language is simply a proposed modification to the lease that could be rejected by the City during the negotiations phase after the highest ranked bidder was recommended for selection. Furthermore, RCI Group specifically provided in the draft lease that all proposed revisions to the lease were subject to withdrawal in the event the City found any such term to be non-responsive. ifon also argues that RCI Group's Preferred Plan is non-responsive for providing surface parking in the area originally designated for the MPA parking garage. However, the RFP specifically provided that, although the MPA would have final discretion, the proposers could propose an alternate location for the garage. See also RFP, p. 20. The City allowed for this in the RFP with full knowledge that the land deeded by the County could potentially be subject to reversion, however, the City invited proposers to indicate alternative locations that may have been superior aesthetically, productively, or economically for the City. Ultimately, the City would ‘weigh the options and decide the best course of action. Another argument proposed by Tifon in support of the allegation that RCI Group's Preferred Plan did not originally provide for a parking contribution is that RCI Group agreed to pay the parking contribution only if the Alternative Plan is accepted. Nowhere in RCI Group's proposal does it provide that language, and in fact, the referenced paragraph is concluded by unilaterally stating that RCI will provide the contribution if the garage is built. They cite the following paragraph included in RCI Group's propos. As the RFP requires the Proposer to make a contribution to the MPA toward the construction of a parking structure to provide the required parking for the Project, RCI has also submitted an Alternative Plan that does provide the required parking in the conventional MPA garage along the Rickenbacker in the location identified by the City in the RFP. RCI is prepared to make the required contribution of $15,000 per ‘space to the MPA garage ifit isto be built. Based on its apparent plain meaning, the proposal provides that the contribution will be paid regardless. However, if Tifon would like to discuss all of the possible interpretations of the above paragraph, we should also consider the interpretation that the first sentence of the above paragraph simply provides that the Alternative Plan includes the parking garage in the originally proposed location. However, as stated earlier, the location of the garage was not a hard and fast requirement, and in fact, proposers were encouraged to indicate alternative locations. Although this argument is not even necessary in light of the plain meaning of the paragraph, it simply supports the point that multiple interpretations were possible, and that the only way to determine the proposer's true intention was to request a clarification. The clarification provided was consistent with the language provided in the proposal and with the RFP. Page 2 of 5Tifon misinterprets the RFP as well as the proposal submitted by RCI Group. Proposers were required only to confirm that they would pay the required parking contribution and that MPA would build operate and ‘maintain the municipal parking garage. The proposal submitted by RCI Group, as clarified, complies with these requirements. The clarification was not a material variance from the proposal because it was consistent with the proposal and was not previously addressed by the proposal. {As Tifon’s final point regarding the parking contribution, they allege that RCI Group's clarification does not satisfy the parking contribution requirement set forth in the RFP because RCI Group agreed to pay the minimum $3,450,000, but not the minimum required by the proposed number of slips and retail space However, this argument also fails as the RFP required that the Successful Proposer contribute an amount “based on the number of parking spaces required for the Project.” If the Proposer has provided alternate parking on the site sufficient to satisfy their parking requirement, then the amount of the parking contribution would fall to the minimum required by the RFP. Based on this logical conclusion, the clarification by RCI Group is acceptable and does not deem them non-responsive. At the very worst, RCI Group's choice of wording was a minor variance or irregularity which the City, by receipt of supplemental information, clarified. Per Section Il (W) of the RFP, the City specifically reserved the right to waive any non-material irregularities in the proposal responses. Any clarification of the preferred plan, which was merely an option presented by RCI Group, was not a material variance. RCI Group's clarification did not give it an unfair advantage over the other bidders; rather, it simply explained what was intended in the original proposal. See Tropabest Foods, Inc. v. State Dept. of General Services, 493 So. 2d 50 (Fla. 1st DCA 1986) {holding that a variance “is only material if it gives the bidder a substantial advantage over the other bidders and thereby restricts or stifles competition.”). The goal for any competitive bid is to obtain the best responsible offer for the City and minor irregularities can be waived in order to achieve that goal. id. at 52. Therefore, assuming for the sake of argument that RCI group's clarification was a variance, it was a minor and nonmaterial variance or irregularity, which is allowable by both the RFP itself and applicable law. 2. Suntex met minimum requirements and qualifications Tifon makes an argument that Suntex should be disqualified from this process for two allegedly non- responsive components of their proposal, namely, the minimum qualifications and the proposed second parking garage. With regard to the threshold minimum qualifications, Tifon alleges that Suntex failed to meet the ‘minimum qualifications required in the RFP, particularly concerning restaurant experience. Suntex provided in their original Proposal submission that they met these minimum qualifications, including over ten (10) years’ active experience and responsibility for daily operations of the restaurant. To confirm and clarify, we requested that Suntex identify the representative that satisfied this requirement, and they appropriately did so by clarifying that Mr. Chris Petty, a principal of Suntex, had the requisite experience. Concerning the municipal parking garage, Tifon argues that Suntex should not have been permitted to propose a second parking garage. The RFP provided that the Proposers must contribute to the development of a new municipal parking garage. However, as Tifon correctly points out, the City did not preclude Proposers from providing additional parking on the site. In fact, nothing in the RFP provides that the Proposers may not construct a second parking garage. In fact, as Tifon admits in their protest, Tifon’s proposal also provides alternat 1g on the site. Further, Tifon claims that the physical location of the second parking garage proposed by Suntex should deem them non-responsive. This argument is based on two material facts, which are that (1) the RFP provides that proposers must maintain the access road indicated in the survey; and (2) the second parking garage is built over the referenced access road. However, this would not deem Suntex non-responsive as they have indicated within their proposal that the access road would be maintained under the proposed second parking garage, and the same is clear from the site plans and renderings they provided. Page 3 of S3. The Committee’s scores should be preserved because the Committee’s scores were reasonably based on facts and logic; were within the evaluation criteria established by the RFP; and there was no evidence of any conflict, fraud, dishonesty, or misconduct. Ina final attempt to jump from the lowest-ranked bidder to the highest, Tifon proceeds to attack the Committee and its scores despite the fact that itis established in both the RFP and the City Code that a “written protest may not challenge the relative weight of the evaluation criteria or the formula for assigning points in making an award determination.” See Section XI. 2., RFP; see also Section 18-104(a)(2), City Code. Upon review of the Committee's deliberations, it is apparent that the scores were reasonably based on facts and logic. In particular, Tifon specifically contests the scores provided by Committee member Pamela Weller, who ranked Tifon lowest of the three proposals. Tifon argues that Ms. Weller’s scores are arbitrary and capricious because she gave Suntex a score of 100. The fact that Ms. Weller scored a proposal with 100 points does not automatically deem the score arbitrary and capricious. The score was based on Mss. Weller’s reasonable determination thatthe proposal provided by Suntex was in the best interest ofthe City. At no point did the City specify that a score of 100 means that the proposal is perfect, and it is reasonable for Ms. Weller to give 100 points to the proposal she determined in her reasonable discretion to be in the best interest of the City. Tifon argues that she could not possibly provide a score of 100 when they allegedly provided the greatest financial return to the City and when her score was different than the other Committee members’ scores. Ms. Weller is entitled to her own conclusions, and is not bound to follow the interpretations of other Committee members. In fact, the City regularly encourages diversity in experiences and credentials when appointing RFP Committee members in order to ensure a well-rounded determination of which proposal is in the City’s best interest. Additionally, Ms, Weller’s scores were clearly within the evaluation criteria established by the RFP. Tifon takes particular offense to Ms. Weller’s comments to the evaluation criteria concerning overall project design. The RFP provides that a total of 25 points may be provided for “Overall Project Design/Proposed Renovation and Activities & Projects” including “Compatibility and enhancement of Master Plan features’ and “Compatibility between required and proposed uses.” The RFP further provides that the Committee will “evaluate proposals using the Evaluation form and may further define each of the criteria on the Evaluation form so long as it is consistent with the information in this RFP.” Based on the above-referenced RFP language, itis clear that the Committee may further define the evaluation criteria. Even if the Committee was not allowed to further define the evaluation criteria, the comments made by Ms. Weller are consistent with and fall within the scope of the above-mentioned criteria. Ms. Weller provided that “[Suntex] and [RCI Group] both did a great job designing and talking through the overall project design and concept. | was especially impressed with community outreach for [Suntex] project.” Tifon alleges that a proposer’s community outreach “was not one of the evaluation criteria that would even remotely relate to “Overall Project Design.” This argument fails on its face. There is no doubt that community outreach fas within this criteria. in fact, the criteria specifically includes “Activities & Projects”, and Suntex took particular care to include community outreach not only in the activities it hopes to incorporate on the site, but also into its overall project design by making the site available to all members of the public, whether disabled, underprivileged, or otherwise, Finally, Tifon alleges that Ms. Weller’s scores should be dismissed because she is the General Manager of Bayside Marketplace, and that by virtue of potential competition, she allegedly has a conflict of interest. This is just another far-fetched argument proffered by Tifon. Ms. Weller was specifically chosen because of her extensive experience in retail surrounding marinas. Ms. Weller did not provide any indication of any conflict of interest or illegality. t is particularly important to note that Ms. Weller has no ownership interest in Bayside Marketplace or General Growth Properties, Inc. (the managing company), and therefore would not benefit from conspiring against Tifon, as Tifon would have the Commission believe. Further, Tifon knew that all of the members of the Committee would have experience with similar projects, as the RFP specifically provided that Committee members “shall have experience in real estate, finance Page 4 of 5renovation projects and/or experience with development projects of this nature.” In fact, Tfon was made aware of the Committee members’ identities and positions prior to the presentations and deliberations, and did not at any point indicate any concern regarding the appointments. Only after Tifon failed to receive the highest score, did they begin to take issue with the appointment. The scores themselves are insufficient to deem a member conflicted, and to allow such a protest would not only be contrary to applicable law, but would set a precedent to overthrow every Committee members’ scores simply because the losing proposer was unhappy with the results. Its also important to note that Tifon does not have standing to institute or maintain this protest. Tifon, is the third-ranked proposer, falling behind RCI Group and Suntex, which were ranked first and second, respectively. The general rule in Florida regarding standing to protest is that a bidder or proposer who would not be awarded the contract, even if the protest was successful, lacks standing. Preston Carroll Co. v. Florida Keys Aqueduct Authority, 400 So. 2d 524 (Fla. 3d DCA 1981). The City has a procedure for written ranking of the bidders or proposers. The importance of ranking becomes paramount when the City realizes that an irrefutable placement in the third position would eliminate standing. In Tifon’s attempt to avoid this clear argues that not only the top-ranked bidder, RCI Group, but also Suntex, are non-responsive. Based on the arguments provided above, itis clear that even if RCI Group were to commit some error to deem them non- responsive, Suntex is also responsive, and as the second-ranked bidder would step into the shoes of the top- ranked. However, even in such a situtation, Tifon would not be awarded the contract, and therefore has no standing to bring this protest. Conclusion & Recommendation to City Commission Tifon claims that their Proposal is the only responsive proposal submitted to the City on this RFP. This is inaccurate, and is based on Tifon’s narrow interpretation of the RFP requirements. The RFP was specifically written to allow Proposers to have some flexibility in their design proposals. Furthermore, Tifon argues that the Committee's scores were arbitrary and capricious in a weak attempt to dismiss the scores of the Committee. This argument also fails for the simple reason that the Committee’s scores were reasonable based on the established criteria and there was no evidence of any fraud, dishonesty, illegality, or conflict of interest. Its also apparent that Tifon has no standing to bring this protest. Based on the above, | submit the following recommendation to the City Commission: (1) the City should deny the protest submitted on behalf of Tifon; and (2) the City Manager, or his designee, should be allowed to proceed to negotiate with the top-ranked bidder, RCI Group. Respectfully, Daniel Rotenberg, Director Department of Real Estate and Asset Management DRL Enclosures Ex. A~ Protest by Tifon DREAM160033 Subject to Approval by: Daniel Alfonso, City Manager Victoria Mendéz, City Attorney Page 5 of 5