Fla. Admin. Code Ann. R. 12-25.005 - Selection Procedures for Contract Auditors

(1) Contract auditing services are exempted from the competitive bid selection procedures of chapter 287, F.S. The selection processes described in this rule shall be utilized by the Department.

(2)

(a)

1. The Department will publish a new Request for Information and use the resulting responses to establish a ranked list of qualified applicants, when the Department identifies the need to revise or replace the group of firms under contract. Reasons to revise or replace will include, but not be limited to, the Department identifying a potential economic benefit to the state to be derived from publishing another Request for Information, the current firms not possessing or not possessing in sufficient quantity a specific professional expertise, the sum of the current firms and firms that had a contract in the immediately preceding program year that meet the renewal criteria being less than the total number of contracts the Department elects to let for a fiscal year, or there being a substantial change in the enabling statute (section 213.28, F.S.).

2. This list represents the qualified applicants with which the Department will negotiate, in the order of their ranking, to select contract auditors. If the number of applicants exceeds 75, the Department will use statistical sampling techniques to determine which applicants will be ranked.

3. When the Department identifies the need to revise or replace the group of firms under contract, and the number of applicants exceeds 75, then the following statistical sampling techniques will be utilized to select applications to be ranked in that particular pool:

a. The population will be defined as the applications filed in a complete, timely manner (as determined by the Request for Information), for the subject contract size pool, exclusive of any applicant that has satisfactorily completed a contract at the time it submits an application and who meets all the criteria established in subsection (2) of this rule at the cut-off date established by the Contract Manager.

b. A random number generator software package will be used to select which applicants from the population will be ranked.

c. The size of this statistical sample will be of sufficient size to ensure that there are at least 2 firms competing for each available contract. The critical factor in determining the sample size will be the time available for the Applicants Ranking Committee to perform its function.

d. Any applicant that has completed a contract at the time it submits an application and who meets all the criteria established in subsection (2) of this rule at the cut-off date established by the Contract Manager will automatically be included in the ranking process.

(b) Until the Department identifies the need to revise or replace the group of firms under contract, the Contract Manager will develop a ranked list from those firms that have had contracts within the two immediate preceding program years for General Tax Administration (GTA) management approval. The approved ranked list will then be used by the Contract Manager to negotiate contracts, using the same procedures set forth in this rule section. The following method will be used to develop this ranked list, and the list discussed in paragraph (2)(a) of this rule:

1. Step A: The Contract Manager will establish a cut-off date prior to developing the ranked list. The Evaluation rating(s) and the Efficiency rating(s) for any individual audit submitted to the Department subsequent to the established cut-off date will not be considered in the current ranking process. The Contract Manager will eliminate from the list of firms any firms that, at the cut-off date:

a. No longer meet the prerequisites stated in rule 12-25.004, F.A.C.; or,

b. Fail to comply with the requirements of rule 12-25.0056, F.A.C.; or,

c. Have not submitted for review and approval at least 40 percent of their assigned audit hours. "Submitted" is defined as the completed audit file(s) delivered to the Department for final review on or before the cut-off date. If the applicant elects to use an overnight mail service to deliver its completed files, the delivery date is the date the service actually provides the files to the Department, not the date the completed files are provided to the overnight mail service, and not the date the overnight mail service is paid by the applicant. The U.S. Postal Service postmark date on the mailing envelope, which constitutes the mailing date, containing such completed file(s) will be used to determine if the file(s) were submitted on or before the cut-off date. The 40 percent will be calculated by dividing the sum of the budgets for the submitted audits by the sum of the total assigned hours for the subject program year. For the purposes of these rules, the term "completed" is defined as the case file being ready for final Department review - the Notice of Intent to Make Audit Changes has been issued, the taxpayer response received, necessary adjustments have been made to the file, and all required work papers have been prepared.

2. Step B: The Contract Manager will calculate at the cut-off date the overall evaluation rating provided in rule 12-25.0056, F.A.C., for each firm remaining after Step A is completed. The Contract Manager will eliminate from the list firms that do not have an overall weighted evaluation rating, as provided in rule 12-25.0056, F.A.C., of at least 1.50.

3. Step C: The Contract Manager will calculate at the cut-off date the overall Efficiency rating provided in rule 12-25.0056, F.A.C., for each firm remaining after Step A is completed. The Efficiency rating will be taken to four decimal places.

4. Step D: The Contract Manager will use the ratings developed in Steps B and C, and the Fee Proposals to develop a ranked list of qualified applicants. A firm's points resulting from its overall Evaluation rating will be weighted 33 percent, the points resulting from its overall Efficiency rating will be weighted at 17 percent, and the points resulting from its Fee Proposal will be weighted at 50 percent.

(3) When the Department identifies the need to revise or replace the group of firms under contract, the Department will publish a Request for Information (R.F.I.) in the Florida Administrative Register announcing that it is seeking contract auditors to provide tax audit services. This Request for Information will be published at least thirty days before the Department establishes the ranked list of qualified contract auditors.

(4) The R.F.I. will contain instructions and information which applicants must submit in a complete, timely application to be considered for a contract for the fiscal year.

(5)

(a) Applicants must submit their written application in response to the Department's Request for Information to the address specified in the subject Request for Information.

(b) To be timely, an application in response to the Request for Information must be postmarked by the U.S. Postal Service or hand-delivered within 30 calendar days of the issue date of the Florida Administrative Register in which the Request for Information is published. If the applicant elects to use an overnight mail service to deliver the application, the delivery date is the date the service actually provides the application to the Department, not the date the application is provided to the overnight mail service, and not the date the overnight mail service is paid by the applicant.

(6) The Department's Request for Information will solicit information which reflects, at a minimum, the qualifications of the team identified by the applicant in its application to perform tax audit services for the Department, as follows:

(a) Experience in Florida tax law, as specified in the published Request for Information;

(b) Knowledge of Florida tax law, as specified in the published Request for Information;

(c) Experience in federal tax law;

(d) Submission of the applicant's most recent on-site quality review report or peer report, Letter of Comments, if any, and Letter of Response, if any;

(e) Any masters or doctoral degrees in taxation possessed by members of the team identified by the applicant in its application;

(f) Whether the applicant is a certified minority business enterprise pursuant to section 287.0943, F.S.;

(g) Other specific skills, including computer capabilities;

(h) States in which the applicant is licensed and the applicant's license number in each state;

(i) The geographic location of the applicant's main office, as well as any branch offices;

(j) The names of the professional staff and the engagement partner (i.e., the team) who will work on the audits. Except as discussed next, all team members listed in the response to the Request for Information must work on the contract. Once a contract is awarded, the Department will approve firm member substitutions if:

1. The original firm member cannot work on the contract due to either health reasons or because the member is no longer employed by the firm; and,

2. The substituted firm member has approximately the same number of months of professional experience, the same general educational background, and the same general position level within the firm;

(k) The results of any Board of Accountancy disciplinary actions within the last 3 calendar years; and,

(l) Any complaints filed within the last 3 calendar years with the Division of Consumer Services (Florida Department of Agriculture and Consumer Services) or a local better business bureau, or any similar agency in the applicant firm's state of domicile.

The applicant may be asked by the Department to provide supplemental details for the information submitted pursuant to the above criteria. For example, if the applicant states a qualification of experience in Florida tax law, supplemental information may be requested concerning the nature of this experience and how this experience was obtained.

(7) After reviewing those written responses to the Department's Request for Information that are selected for ranking, the Applicants Ranking Committee will rank the applicants in order based on requested technical criteria and their fee proposal, for negotiation purposes.

(8) The Contract Audit Section will then enter into contract negotiations with the highest ranked applicants in the order of their ranking. The negotiation process will continue until all the available contracts for the subject period are let.

Notes

Fla. Admin. Code Ann. R. 12-25.005

Rulemaking Authority 213.06(1), 213.28(4) FS. Law Implemented 213.28 FS.

New 5-11-92, Amended 3-20-94, 10-30-96, 7-31-00.

New 5-11-92, Amended 3-20-94, 10-30-96, 7-31-00.