FleetCor Technologies Operating Company, L.L.C., d/b/a FleetCor, The Fleet Card Company VS State of Louisiana Through the Division of Administration, Office of Purchasing
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STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT NUMBER 2009 CA 0976 FLEETCOR TECHNOLOGIES OPERATING COMPANY LLC VERSUS ST ATE OF LOUISIANA THROUGH THE DIVISION OF ADMINISTRATION OFFICE OF STATE PURCHASING Judgment Rendered Appealed December 23 2009 from the Nineteenth Judicial District Court In and for the Parish of East Baton Rouge State of Louisiana Suit Number 570 100 Honorable Janice Clark Judge H Alston Johnson III Counsel for S Dennis Blunt Plaintiff Appellant Susan W Furr FleetCor Betty Baton Burke Uzee Rouge Technologies Operating Company LLC LA Pamela Miller Perkins Counsel for Paul Holmes Defendant Appellee Carlos Romanach State of Louisiana Baton Rouge LA Division of Administration Office of State David L Guerry Counsel for Appellee J Wendell Clark Intervenor Jamie Hurst Watts FuelTrac Inc Mark L Barbre Baton Rouge BEFORE LA CARTER C J Purchasing GUIDRY AND PETTIGREW n GUIDRY J FleetCor proposer on a state contract of the district court Administration contract to LLC Technologies Operating Company FleetCor for fuel and maintenance services affirming appeals rejected a a judgment the decision of the State of Louisiana Division of Office of State Purchasing State Purchasing to award a state opposing proposer an FACTS AND PROCEDURAL HISTORY On August Fleet Fuel and leased vehicles was out copies of Service RFP proposals ultimately comprised of the State Fleet and the Business Services Based recommended the the State and a opening expertise Administrative Coordinator from the Services and for the whose members have were to be received on in various areas Manager an Account Tech Department of Public Safety and Manager from the Department of Social proposal submitted by FuelTrac was by State Purchasing Resources the committee s evaluation of the contract of Property Assistance Agency the Purchasing Director for the Department of Natural Corrections owned andor I and the Assistant Director for the Louisiana an state proposals was Property competitive proposals the RFP all The Evaluation Committee and solicit committee to a to repair and maintenance services for November 1 2007 by Louisiana Request for Proposal for Statewide a The deadline for submission of According and evaluated the Division of Administration Repair Maintenance fleet fuel and provide proposals 2007 Agency mailed Assistance to 24 awarded to as proposals being most the committee advantageous to FuelTrac in accordance with the recommendation I The original deadline for submission of the addenda issued for the RFP the deadline was proposals was October 2 extended to November 1 2 2007 but because of 2007 FleetCor filed Purchasing chief procurement officer in accordance with La R S 39 1671 A as The director of State Purchasing the director s appealed accordance with La decision written protest of the award with the director of State a to deny decision RS denied FleetCor s protest and FleetCor timely the Commissioner to of Administration The Commissioner 39 1683 the protest and FleetCor filed a petition the director s upheld for judicial review with the Nineteenth Judicial District Court in accordance with La R S 39 1691 A judicial review is from that the district court On the decisions of the agency officials and it upheld that FleetCor judgment in appeals to this See court La R S 2 39 1691 E ASSIGNMENTS OF ERROR On appeal Purchasing I FleetCor asserts the following errors were committed by reviewing and ultimately rejecting its proposal in The Purchasing State Director FleetCor and failed disqualified required review erred to when she afford FleetCor s arbitrarily appeal the 2 Purchasing erred in its selection process because the RFP did not comply with the law mandating that appropriate weight be given to price as compared to technical factors 3 Purchasing erred in its evaluation of the technical category because the evaluation was unsupported by a preponderance of the State State evidence and 4 State In Willows v State 56 62 the Louisiana Code provide any contract a or was arbitrary and capricious Purchasing awarded the 2 State erred and failed contract Department Supreme for diesel of Health comply with the law when it without accepting competitive bids to Hospitals 08 2357 p 9 La 5 legislature did not intend that Court held that the 5 09 15 So 3d the Procurement right of appeal to this court relative to any claims or controversies arising out of agreement executed prior to August 1 2008 Because of FleetCor s protest State Purchasing stayed the intent to award Commissioner of Administration issued to FuelTrac dated FleetCor s April 18 2008 Following the 12 2008 the ruling protest August stay was lifted and FuelTrac was authorized to proceed with contract negotiations by the director of State Purchasing pursuant to a letter dated August 18 2008 FleetCor filed a petition for judicial review and for a stay of the award and implementation of contract on August 25 2008 with the Nineteenth Judicial District Court Since the contract in this matter was not executed prior to for us to consider FleetCor s appeal August 1 2008 jurisdiction lies s on 3 on STANDARD OF REVIEW The standard agency is applicable governed by to review of our a decision of v Board of Supervisors of Louisiana State and Mechanical 1045 93 1948 College 1 p 1046 writ denied 95 0211 that section administrative Section 964 of the Louisiana Administrative Procedures Act GC Services Limited contained in Title 49 of the Louisiana Revised Statutes Partnership an La App 1st Cir and Agricultural 648 So 12 22 94 652 So 2d 1345 7 4 95 La University Paragraph 2d G of provides affirm the decision of the agency or remand the case for further proceedings The court may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the The court may administrative findings inferences conclusions In violation of constitutional 1 2 In of the statutory excess 3 Made upon unlawful 4 Affected by other or authority of the supported determined are agency procedure error of law Arbitrary or capricious or characterized by clearly unwarranted exercise of discretion or Not decisions statutory provisions 5 6 or and sustainable by the reviewing by abuse of discretion or preponderance of evidence as the application of this rule the a court In shall make its own determination and conclusions of fact by a preponderance of evidence based upon its own evaluation of the court record reviewed in its entirety judicial review In the application has the opportunity to judge the upon where the agency of witnesses by first hand observation of demeanor of the rule credibility witness stand and the given to the agency s reviewing does court determination of not credibility due regard on the shall be issues DISCUSSION In its first assignment Purchasing Denise alleged error in did concluding evaluated because it argument for two Lea of not FleetCor contends that the director of State afford its protest proper review based that its was non reasons error proposal responsive to should have been the RFP First while the director did 4 We find state on her rejected and not no merit in this in her written response to FleetCor s protest that she found FleetCor s should not have been evaluated at all she proposal went on responsive non to state that i n and that it my review of how the Evaluation Committee scored the technical aspects of FleetCor s in comparison with the the part of the evaluators not substitute my Thus procurement Absent opinion I do not find any arbitrariness from FueITrac proposal proposal clearly arbitrary unreasonable or scoring on I will for that of the multi agency committee used in this while the director may FleetCor would have desired she nevertheless have reached the conclusion not summarily addressed the specific contentions raised by FleetCor in its written protest Second we find that although the director FleetCor raised in its protest provided by the director for further review under the law La App well as first second evaluation of the subsequent procedures assignment of proposals submitted It is not criteria that not was evaluating the price not not factors than to 1992 Therefore we argues that the unlawful for failing to provided by statute regulation any give appropriate and the requirement or rather the main contention is that the specific weight by which it would be disclose the weight would be and given to more importantly that it the individual technical the price factors listed in the RFP The Evaluation Committee used full factors La essentially as due State 596 So 2d 822 827 828 and technical factors of the RFP disclose that greater was FleetCor error disclosed in the RFP Evaluation Committee did did v alleged that the Evaluation Committee used was FleetCor to lacking merit error as assignment of accorded FleetCor with all the process it writ denied 600 So 2d 641 weight to the price and technical factors RFP it may have desired the review as Alexander Inc See Alexander reject FleetCor s the sufficiently provided 1st Cir 1991 In its as thoroughly as may not have addressed the issues presented in the proposals submitted 5 point values in assessing the technical but used tenths of a point in assessing It is FleetCor s contention that the price factors of assessment the relative R S importance 39 1593 C both the improper was b 2 of because it failed to proposer could FleetCor portions reasonably believe or weights as to assess the factors of the which it 39 1593 C 2 d i and RFP 1 25 We added Notably importance the statute of importance is that it the evaluation factors to the to b score As the be evaluated about the current of 100 points specific was resulting to be formula provided scores that the RFP a the technical See than price RS La that the RFP must must Instead a price Emphasis proper construction of importance of all price factors would be allocated a shall indicate the relative indicate the relative total of 50 allocated in the evaluation of the a This was total of 50 points for an proposals by which the pricing portion of the proposals would in the RFP for the FleetCor price proposals market conditions should have revealed experienced participant to State states points and the technical factors would be allocated overall compared as be used in the RFP which should include done in the RFP which stated that because to reject these assertions not state that the RFP points by using different being given greater importance to other evaluation factors states misleading was of price and other evaluation factors the statute does price 50 equal weight would be used in factors price Louisiana Revised Statutes 39 1593 C 2 indicate the relative in violation of La FleetCor argues that advantageous not was proposal it did that results in the technical factors claims proposers sufficient notice of alleges that the equal allocation of evaluating the price and technical factors point values give price and other evaluation factors and technical price of the aforementioned method use of the fuel industry 6 cannot since to that the validly claim surprise clearly FleetCor prices to the formula and a be seasoned and proposed were likely that to be mere quite tenths of quoted and it was FleetCor should have been point could separate the a definitely aware that Furthermore scored than FueITrac higher to scored higher which fuel So the as its of price Committee delineated notably s a the per would assignment scoring specific same or of mainly to possibility on error a to prices the in that portions s proposal factors for onsite FuelTrac lower than FleetCor for onsite the State based by for offsite fuel providing FleetCor 5 area more See RFP complains of the onsite on State fueling and 3 2 1 about the Evaluation The RFP proposals by which the price factors would be evaluated but similar formula Instead the scoring to and offsite fuel be realized move of the technical formula RFP gallon was looking for the overall savings technical factors 3 based price that would be realized savings price proposal In its third of the 4 consignment fuel in the meant amount were scores for the individual s Purchasing indicated that it wanted therefore proposers aware although for the overall price proposal FleetCor alternately referred FleetCor s fully equal weight would be given of the onsite and offsite fuel factors pricing was 3 close was not provided for the technical factors for evaluation of the the RFP simply stated that The RFP advised proposers that they could submit price proposals as either a mark up rebate or both price structures The proposers chose to submit their proposals with both mark up and rebate pricing For mark up pricing proposers were advised in the RFP that the pricing should reference a recognized benchmark information table such as the Oil Price Information Service OPIS Gross Average Rack Price and that a ny benchmark table used must reflect the fuel index instructed pricing to for the Baton indicate pricing as Rouge metropolitan area For rebate pricing proposers were retail less tax 4 Additionally in a written inquiry made by FleetCor prior to submission of its proposal it suggested that greater instead of equal weight should be given to the price factor for offsite fuel relative to onsite fuel The Evaluation Committee rejected this suggestion and maintained that it would use the formula as outlined in the RFP 5 Throughout its brief FleetCor presents the additional speculative argument that FuelTrac could have quoted a grossly uncompetitive price in its proposal and still have been awarded the contract There is no merit in this argument for two reasons First it is mere fallacy since that did not occur Second purchasing regulations and the RFP would prohibit the awarding of a LAC 34 1 1303 and See La RS 39 1593 C 2 d ii contract under such circumstances all proposals that are 1307 A RFP S1 15 and 125 wherein authority is given to reject any and deemed not to be in the best interest ofthe State including when all otherwise acceptable bids received are at unreasonable prices 7 following criteria are RFP and will be used by t he technical proposal value period but prior to be to importance and Emphasis was to given told t added the Evaluation Committee specify the weight the technical factors listed in the RFP he values are unknown Nevertheless evaluation relevance to the evaluation of this the Evaluation Committee in the evaluation of the requested that FleetCor point of under the at or during the inquiry this time but will be established regulations6 rules and purchasing contained in the Louisiana Administrative Code it is stated specification is to serve as a basis for obtaining a or major repair item adequate and suitable for the state s needs in a cost effective manner taking into account to the extent practicable the costs of ownership and operation as well as It is the policy of the state that initial acquisition costs specifications permit maximum practicable competition consistent with this purpose Specifications shall be drafted with the objective of clearly describing the state s requirements The purpose of supply service a LAC 34 I301 A 2 administrative notice of the and RFP weight the proposers were purpose of the RFP 39 1593 C weight or point aware importance similarly worded point to S1 to we exact cannot say This to Service District No 1 of must knowledge give prior All of improper information and advised that the be as competitive was sufficient Additionally in Executone of Central Tangipahoa n was to allowed by La R S the individual technical factors FleetCor of the technical factors statute that the failure despite its lack of knowledge of the specific Thus given same applicable statutory the competitive proposals proposal that its RFP the obtain 1 1 be Considering value for the technical factors provided value added provisions was requirements of the 6 or See RFP nonetheless of the emphasis Parish in respect to put FleetCor as we Louisiana 99 2819 p to 4 all of the on explained Inc La v App was notice about a Hospital 1st Cir proposals and contracts submitted are subject to provisions of the laws of the State of Louisiana including but not limited to La RS 39 1551 1736 purchasing rules and regulations executive orders standard terms and conditions special terms and conditions and specifications listed in this RFP Section 45 1 of the RFP states that a ll n 8 11 5 798 So 2d 987 991 01 La R S or 39 1593 C specific Moreover the FleetCor weight disadvantaged by to La point RS or was point comply 39 1671A to with the grouped not be able value precluded from making be to no given correctly choose a subsequent inquiry the technical factors inquiry period protest the failure So terms as if to it advise proposers of the long felt we also as follows of the RFP 8 must reject this argument weight s proposal for which it lost pertaining with respect to ofbids a one Approach 16 points categories except point and allocated did and for points Methodology FuelTrac received Service and Support Requirements 9 because of the noted weakness of to the solicitation in this matter La RS 39 1671 A writing at least two solicitation shall be submitted in the points Plan for to points 5 Company Background and Experience ImplementationOrientation for all the or The Evaluation Committee major categories 20 score truly As for its assertion that the Evaluation Support Requirements points it as 7 merit in FleetCor s assertions that FuelTrac Service and perfect to knowledge it could have asserted its rights pursuant the technical factors into four each category 8 to arbitrarily and erroneously evaluated its proposal in regard technical factors As ofa formula percentage chart value to be accorded the individual technical factors Committee 7 use outsider an the established this lack of We further find not require the not 798 So 2d 116 merely by reading the proposals contract presented during was does Nor is it necessary for form the winner of the regarding b 2 writ denied 01 1737 La 9 28 01 providing a gallon a per provides that p rotests days prior to the opening proposal should have been deemed because it quoted a monthly monitoring fee of 24 95 for the installation of This service was fuel level monitors to onsite fuel dispensers owned by the State wireless clearly optional and not a definite service that had to be provided Section 2 1 2 of the RFP i t is not expected that the contractor will be responsible for installation states that maintenance and or repair of existing fuel dispensers nor is the contractor expected to install electronic pulsars Similarly FuelTrac s proposal that it be paid in 25 days ofthe State s receipt 34 1 of the RFP that provides that of an invoice was not clearly violative of the Section p ayments will be made by the Agency within approximately thirty 30 days after receipt of a properly executed invoice Emphasis added For example nonresponsive FleetCor argues that FuelTrac 9 s month minimum for added consignment deduction of three points for the attributed for added consignment same onsite onsite fuel sites FleetCor received criteria group because of the fuel sites for for charging a it cost generic non reports and for providing very limited ad hoc reporting The Commissioner of Administration was given too many factors which were arbitrary and s deduction of paragraph Work Services points for appreciate that the of the specific technical services I sought charging side product offers Preventative Maintenance a Innovative Concept that Tracking 84 95 per month for the agency sound and non There to generic reports to for relates 1 2 titled charging were no of fees for one PM and proposal FleetCor as an for to customers but for which it to a optional nominal agrees to cap Thus there appears to be a non generic reports noted weaknesses indicated for FuelTrac for any of the Methodology and Approach and web based reporting tool is Methodology not and three the Implementation points were areas Orientation Plan RFP did not enterprise level management tool 10 of For deducted because FleetCor s enterprise level management tool desired complains that the FleetCor an to arbitrary basis for the Evaluation Committee s deduction of points Approach constitute side Scope of remaining categories but FleetCor had noted weaknesses indicated for the RFP a DOA LP AA and Reporting System participant by that the asserts solely it refers Yet in its will be made available the fee at for FleetCor s and of 29 95 per bill group per month monthly charge was enhanced Preventative Maintenance Emphasis added state agency account was non Section Repair Service data shall be provided electronically appropriate for proposed in the RFP that states score Nevertheless FleetCor because the fee it capricious FleetCor fails to product in the RFP listed not found that FuelTrac Davis points in this category because its Evaluation Committee was Angele explain per what features would This argument is not persuasive Section 1 7 2 of the RFP is hereby firmly RFP further provides that t he to in submit inquiries meant by the term have been to an that it on an Moreover requirement timely enterprise we issue in not a the Evaluation Committee expressly states available at FuelTrac online several o detailed review of the relative thereto and depth proposal if FleetCor the proper and contrary to and law to and FuelTrac s distinct difference in their s difference in levels of are desired review and transaction information is software would remedy weigh competing as relative proposal two with account of option this to that could support The RFP proposals information account proposals two whereas the web based maintenance web as reporting accessible and and saving and delivering reports Excel CSV and Tab Delimited file formats viewable online directly So and only downloaded if desired or necessary glance FleetCor s or imported into the applications that are to system appears transaction files that the State could downloaded for provides with the the system in PDF At first was wait until later not reviewing the In hierarchy s proposals the scoring nline solutions performed online information is requires accurately identified by the RFP The FuelTrac system to be That of what was unsure inquiry period online system could be characterized generated by all that the inquiry period system proposed by FleetCor could be better characterized accessed billing s during a initial reasonably expects conduct their in reviewing FleetCor observe perform level management tool arbitrary was a n questions state Hence manner ask for clarification complain proposals a to submit any written to and interested proposers responsible to for all interested proposers set documents and section expressly provides that outlines how the FleetCor system on the provides 11 pre via the web that access State agency present provide only s computer system accessing computer programmed must then to view The be using proposal for transaction information to be downloaded VIa Microsoft Access where analysis and FleetCor appears to provide Executive Level sending format some preparing of the not offered by executive level overview the Eventually proposal function of its online system which ReportBuilder but it is of or be used for further easily Snapshot Reporting and availability for can in Microsoft Excel via Email discusses the the transaction file Even the tracking only provides reporting reports and data into Microsoft Excel format numerous clear if all of the functions provided in the FuelTrac system FleetCor have served as s less than clear and concise the basis for the company s been perceived by the State given s purpose the the evaluators as opposed opposite impression as As such will substitute administrative agency based Division v State Through on scoring two our simpler and more judgment a high for the or equal may have readily adaptable presentation to to may have reasonable basis for the relative proposals its reasonable as presentation of its system could have formed scoring between the not much s not of its online system could that of FleetCor whose to difference in we proposal The fact that FuelTrac that of FueITrac s presentation to good perceptions their online systems faith See judgment of the Haughton Elevator Division of Administration 367 So 2d 1161 1165 La 1979 for the weakness noted As of category having implementation plan proposals FuelTrac FleetCor s Terminals a failure as to fueling Implementation Orientation Plan clearly defined responsibilities n o submitted from reviewing the Evaluation Committee s indicated requested in Section a in the the RFP and the FleetCor and comment could be addressed clearly delineate the responsibilities relative ll proposers should offer onsite for the 2 1 2 of the RFP to to Fuel Control That section provides that Fuel Control Terminal for each State agency owned station upon request by any State agency under the umbrella of this 12 The section further contract concise list that clarifies what must be telephone electrical installed prior to FuelTrac does proposal stated that it s equipment ach e required conditions present proposal clearly at each site should include proposal equipment a ie services or Fuel Control Terminal is a must gather the exact to be at each site FleetCor contractor equipment configuration for each site needing confirm the number of hoses and that it still needed be ordered and the associated to whereas FleetCor s requirements that it would replacement automated needed outlines these Despite being the existing fuel supply not being that installation fuel control terminal meters provides to determine what Hence costs we find a non arbitrary basis for the higher scoring of FuelTrac s proposal for this category Ultimately we arbitrary was not proposals or capricious within the Evaluation Committee whose is proposal review of 39 1593 C most s 2d attributes until and thus its decision should stand It is advantageous 2 d It i was a set might outweigh were s responsible choose the state forth in the RFP part of the Evaluation Committee met RS discretion s a 99 2819 cluster of features quoted price We therefore submitted and reviewed La the factors listed in the RFP and offered feature any differences in offerer taking into consideration did in Executone of Central Louisiana Inc the fact that any proposals to the to price and the evaluation factors as we at 991 of the discretion decide which of the offered features best observe assessment conclude that the Evaluation Committee could at 5 or to we 798 So specific not be known reject this assignment of error Finally FleetCor contends that State supply of diesel fuel that no in the contract issued competitive bids Committee did not were consider accepted or use to the Purchasing unlawfully included the pursuant to the subject supply diesel fuel and RFP alleging that the Evaluation prices quoted for diesel fuel in evaluating 13 the respective proposals 9 State that the decision was made include consideration of the diesel fuel quotes in the actual evaluation not to process because the supply and that it could determine needed to stated the relative not Purchasing explained not it justify making circumstances small purchase project the quantities of diesel fuel that would be or determinative factor of the bid and the criteria importance Purchasing execution of the a a As the RFP clearly desired from the procurement the evaluation factors outcomes find State of diesel fuel would be considered s contract provided to be used in evaluating the handling of the diesel price quotes that included the proposals as their we precluding supply of diesel fuel under do the the See La R S 39 1593 C 2 b CONCLUSION Accordingly having thoroughly matter and before affirm us the administrative and considering All the arguments raised of the district judgment matter reviewed the administrative record in the costs of this Technologies Operating Company court appeal are we on reject FleetCor judicial cast to the review appellant appeal s of this FleetCor LLC AFFIRMED 9 Section Proposers 1 3 of the RFP states cost structure applied a ll Financial Proposal evaluations shall be based unleaded gasoline to the cost of regular 14 on the
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