EXECUTONE OF CENTRAL LOUISIANA INC. v. Hospital Serv. Dist. No. 1

798 So. 2d 987, 2001 WL 498774
CourtLouisiana Court of Appeal
DecidedMay 11, 2001
Docket1999 CA 2819
StatusPublished
Cited by9 cases

This text of 798 So. 2d 987 (EXECUTONE OF CENTRAL LOUISIANA INC. v. Hospital Serv. Dist. No. 1) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
EXECUTONE OF CENTRAL LOUISIANA INC. v. Hospital Serv. Dist. No. 1, 798 So. 2d 987, 2001 WL 498774 (La. Ct. App. 2001).

Opinion

798 So.2d 987 (2001)

EXECUTONE OF CENTRAL LOUISIANA, INC.
v.
HOSPITAL SERVICE DISTRICT NO. 1 OF TANGIPAHOA PARISH d/b/a North Oaks Medical Center and Tangipahoa Parish Government.

No. 1999 CA 2819.

Court of Appeal of Louisiana, First Circuit.

May 11, 2001.
Writ Denied September 28, 2001.

*989 Michael D. Hebert, Lafayette, LA, for plaintiff—appellant, Executone of Central Louisiana, Inc.

Office of the District Attorney, Amite, LA, for defendant, Tangipahoa Parish Government.

Alton B. Lewis, Ashley Edwards-Sandage, Hammond, LA, for defendant—appellee, Hospital Service District No. 1 of Tangipahoa Parish d/b/a North Oaks Medical Center.

BEFORE: PARRO, FITZSIMMONS, and GUIDRY, JJ.

FITZSIMMONS, Judge.

Plaintiff, Executone of Central Louisiana, Inc. (Executone), sued Hospital Service District No. 1 of Tangipahoa Parish d/b/a North Oaks Medical Center (hospital). In its suit, Executone asserted that the hospital improperly awarded a contract to Hill-Rom. The trial court found that the hospital did not violate the provisions of the Political Subdivisions Telecommunications and Data Processing Procurement Act, La.R.S. 38:2234, et seq., and dismissed Executone's suit. Executone appealed. We affirm.

Specifically, the hospital requested proposals for a nurse call/information system. In response to the requests, two companies, Executone and Hill-Rom, submitted proposals. Although Executone's quoted price was lower, the contract was awarded to Hill-Rom. On appeal, Executone maintains it should have been awarded the contract, and requests damages. In support, it makes the following arguments:

1. Executone met all specifications at the lowest price, except for a prohibited "closed specification."

2. The hospital improperly used a secret assessment of Executone's system and improperly evaluated the offered system.

3. The request for proposals (RFP) violated La.R.S. 38:2237A(7), which requires the RFP to "indicate the relative importance of price and other evaluation factors...." On the issue of sufficient evaluation criteria, the trial court erred in excluding the testimony of plaintiffs witness.

4. Hill-Rom was not a licensed contractor, which prohibited the contract under La.R.S. 37:2150.1(4), 2160A(1), and 2163.

THE ACT

Interpretations of the provisions of the Political Subdivisions Telecommunications and Data Processing Procurement Act (Act), La.R.S. 38:2234, et seq., necessary to the resolution of this case, are issues of first impression. The Act has specific provisions that trump the general or similar provisions from our more familiar public bid law. Under the Act, the governing political authority is vested with sufficient discretion to maneuver the increasingly complex byways of multi-optioned, invasive, and expensive technology.

After a RFP is issued pursuant to the Act and proposals are received, the governing *990 authority decides who is a "responsible offerer."[1] The governing authority then makes its assessments of the proposals. To determine which proposal best fits its particular needs, the governing authority decides which proposal is not only advantageous to the governing authority, but which proposal is the "most advantageous." La.R.S. 38:2237A(8).

The selection decision could vary. The range is expansive: from some, few, or no "most advantageous" proposals for the specific needs of the governing authority. This range provides the governing authority with the ability to decline the selection of a system, even though that system might be suitable. Rejection of one or all of the proposals may be founded on a finding that the system proposed simply does not meet as many of the present needs, or perhaps more importantly, the future needs of the authority. In a hospital setting, once these sophisticated systems are incorporated, it is difficult to efficiently replace a standing technological system. Thus, the traditional concept under the bid process, that the "lowest responsible bidder," or "last man standing," receives the contract, is not embraced or incorporated by the Act. See Haughton Elevator Division v. State, Division of Administration, 367 So.2d 1161, 1165 (La. 1979). The question as to which proposal is the "most advantageous" does not depend on the number of remaining offerers from the proposal process, but rather on the reasonable perceptions of the governing authority. In deciding these cases, such realities must wield their influence.

CLOSED SPECIFICATION

Closed specifications require a specific brand or product be used "to the exclusion of all other products of apparent equal quality and utility." La.R.S. 38:2296A (emphasis added). A closed specification is prohibited by La.R.S. 38:2290. The statutory provisions on closed specifications were meant to prohibit specifications that excluded other viable choices of products. However, those statutory provisions do not bar the state from obtaining needed one-of-a-kind products or breakthrough technological systems. Whether Hill-Rom is improperly refusing to share its discoveries with other companies is not an issue before this court.

The feature objected to by Executone, the bedrail monitoring interface, is allegedly only offered by Hill-Rom. We found no evidence that a product of "apparent equal quality and utility" was available. La.R.S. 38:2296A. Thus, by definition, the Hill-Rom feature was not a closed specification. The request for the exclusive Hill-Rom feature does not foreclose any features or brands of equal value.

SUFFICIENCY OF EVALUATION CRITERIA

La.R.S. 38:2237A(7) provides that the "request for proposals will indicate the relative importance of price and other evaluation factors" as well as "the criteria to be used in evaluating the proposals...." The hospital's RFP stated that "[b]oth price and features will be the determining factors," but "the vendor capable of supplying the desired attributes will receive more consideration."

Executone produced a witness learned in the method used by the State of Louisiana to present evaluation criteria for its RFPs. However, the witness did not profess *991 to espouse a set method for political subdivisions. Nor did the trial court exclude the witness's testimony on the sufficiency of evaluation criteria issue. Rather, in its reasons for judgment, the trial court found that the testimony was irrelevant and not determinative of whether the hospital, a political subdivision, provided sufficient information in this particular case.

We disagree with the trial court on the finding of relevancy. The procedures adopted by the state to meet requirements of like statutes was relevant to the issue of what might qualify as sufficient criteria. However, the testimony did not exclude the method chosen by the hospital, or render it unreasonable or insufficient. The trial court did not err by choosing to reject the witness's opinion.

Contrary to the argument of Executone, La.R.S. 38:2237A(7) does not require the use of a formula, percentage chart, or specific form. Nor is it necessary for an outsider to be able to correctly choose the winner of the contract merely by reading the proposals. Based on the evaluation set out in the RFP, the hospital has the discretion to choose "the responsible offerer whose proposal is determined... to be the most advantageous" to the hospital. La.R.S. 38:2237A(8). It would be part of the hospital's discretion to decide which offered features best met the listed desired features.

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