            IN THE MISSOURI COURT OF APPEALS
                    WESTERN DISTRICT

 TRI-COUNTY COUNSELING                           )
 SERVICES, INC., et al.,                         )
                                                 )
                                  Appellants,    )   WD82751
 v.                                              )
                                                 )   OPINION FILED:
                                                 )   March 3, 2020
 OFFICE OF ADMINISTRATION, et al.,               )
                                                 )
                                Respondents.     )


                  Appeal from the Circuit Court of Cole County, Missouri
                       The Honorable Richard G. Callahan, Judge

               Before Division One: Thomas N. Chapman, Presiding Judge, and
                      Mark D. Pfeiffer and Anthony Rex Gabbert, Judges

       In this appeal, an unsuccessful bidder appeals a judgment denying its challenges to state

contract awards made under Missouri’s procurement laws.

       Tri-County Counseling Services, Inc. doing business as Family Facets and its executive

director Sheila Searfoss (collectively “Family Facets”) appeal the judgment of the Circuit Court

of Cole County, Missouri (“trial court”), partially granting motions to dismiss of Office of

Administration, Division of Purchasing (“OA”), and the Department of Social Services (“DSS”)

(collectively “State”), and Intervenor Cornerstones of Care (“Cornerstones”) relating to certain

counts of Family Facets’ First Amended Verified Petition (“Petition”) and the First Amended
Cross-Claim of Intervenor Great Circle, a Missouri not-for-profit corporation (“Great Circle”), and

otherwise ruling in favor of the State on all remaining counts after a bench trial. We affirm.

                              Factual and Procedural Background

       On    September     13,   2017,    the   State   issued   a   Request   for   Proposal,    No.

RFPS30034901800623 (“RFP”), seeking seventeen separate contracts for Intensive In-Home

Services (IIS), Intensive Family Reunification Services (IFRS), and Training Services at seventeen

different project sites throughout Missouri. The RFP required, among other things, the provision

of a certain number of IIS Specialists at each project site. The minimum qualifications of an IIS

Specialist as set forth in the RFP required an individual with a college degree or a professional

license or designation, and multiple years of experience, as well as the ability to respond

twenty-four hours per day, seven days a week.

       The RFP contained several scored categories, including the following: Cost (eighty

maximum points); Vendor’s Experience and Reliability, Expertise of Personnel (“Experience”)

(thirty maximum points); Method of Performance (“Performance”) (eighty maximum points);

MBE/WBE Participation (ten maximum points); and the Sheltered Workshop Preference

(“Sheltered Workshop”) (ten preference points).

       The Experience and Performance categories were subjectively and comparatively scored

by three evaluators from DSS, and the remaining categories, including the Sheltered Workshop

category were scored objectively by OA. The RFP set out specific evaluation criteria for the

subjective categories and specific information to be provided related to that evaluation criteria. In

performing the subjective evaluations, the evaluators considered each site separately, comparing

the proposals for each site and scoring them based on their subjective judgment as to the relative

merits of each offeror’s proposal in relation to each other and the evaluation criteria. The Sheltered




                                                  2
Workshop preference points were available to qualifying bidders in accordance with

section 34.165 of the Revised Statutes of Missouri.1            Vendors that qualified for Sheltered

Workshop preference points were to receive ten points and those that did not were to receive zero

points. In the other categories, vendors could receive none, all, or some of the available points for

the category, and the highest rated vendor in each category was to receive the maximum points

possible for the category.

        Eleven vendors submitted bids including proposals for multiple project sites in response to

the RFP, including Family Facets, Great Circle, and Cornerstones. Family Facets’ proposal

committed to sheltered workshop participation, indicating that it would use IIS Specialists to be

hired and employed directly by Lake Area Industries, an organization that operated a sheltered

workshop, to perform some of the services required by the RFP. After the initial review of Family

Facets’ proposal, the State concluded that the proposal included adequate documentation of use of

a sheltered workshop and awarded ten preference points to Family Facets for each site it bid on,

except one for failure to submit properly completed paperwork. The arrangement between Family

Facets and Lake Area Industries was memorialized in a Memorandum of Understanding (“MOU”)

between the parties, but was not provided to the State as part of Family Facets’ initial proposal.

        In April 2018, after the proposals received were evaluated, the State tallied each vendor’s

total scores for each of the sites. On April 23, 2018, the State issued Notices of Award for each

site, awarding contracts to three vendors: Family Facets (eight sites: 733, 736, 738, 739, 831,

932, 933, and 936); Great Circle (five sites: 732, 735, 737, 931, and 935); and Cornerstones (four

sites: 731, 734, 740, and 934).




        1
         All statutory references are to the REVISED STATUTES OF MISSOURI 2016, as updated through the 2017
Cumulative Supplement.


                                                    3
       Two bid protests followed the award of the contracts. Family Facets’ protest addressed

multiple issues with evaluations of the proposals of Family Facets, Great Circle, and Cornerstones

for sites 732 and 735. Great Circle’s protest challenged the award of Sheltered Workshop points

to Family Facets for Sites 732, 733, 738, 739, 831, 932, and 933.

       Family Facets’ proposal scored .27 and 3.65 points behind Great Circle on Sites 732 and

735, respectively, on the Evaluation Report. Family Facets’ protest was based on its claims that:

accreditation was improperly considered by the evaluators because accreditation was not

specifically mentioned in the RFP; the improper analysis of implementation time frames; and the

inconsistent point allocations for method of performance when the method of performances

proposed did not vary from site to site. Each point of Family Facets’ protest expressly mentioned

sites 732 and 735 and requested relief only for these sites.

       In response to Family Facets’ protest, the State sustained the protest, cancelled the

complained-of contracts, issued an Amended Notice of Award to Great Circle to reflect the protest

relief granted, and opened the procurement process on the complained-of sites for rebid.

       In the response to Great Circle’s protest, the State sustained the protest, deducted the

Sheltered Workshop points previously granted to Family Facets and re-scored the points awarded

without Family Facets receiving the ten Sheltered Workshop preference points on its proposals.

Following the re-scoring of the Family Facets points, OA determined that the best vendor proposal

for sites 733, 831, 932, and 933 was Cornerstones. The State issued an Amended Notice of Award

to Family Facets reflecting the results of the Great Circle protest.

       Family Facets filed its eight-count Petition in the trial court, which alleged, in relevant part,

that the State violated the procurement requirements of section 34.165 and 1 CSR 40-1.050(10)

[2016] by disallowing Sheltered Workshop preference points (Count II), by materially changing




                                                  4
the points awarded to Family Facets after the time for submission of bids had closed, rather than

rebidding the contracts for the four sites “taken” from Family Facets (Count III), by unfairly,

unreasonably, arbitrarily and capriciously determining Experience points by improperly

considering offeror accreditation (Count IV), by unfairly, unreasonably, arbitrarily and

capriciously calculating Performance points by improperly evaluating implementation schedules

and varying scores among the different sites even though the proposed method of performance did

not vary from site to site (Count VI), and by awarding the contract to a non-responsive vendor

because Cornerstones’ proposal failed to provide information for community resources on three

sites and did not mention an implementation date for one (Count VII), and therefore requested

injunctive relief, including a temporary restraining order and preliminary injunction on all counts

(Count VIII).2 Great Circle intervened and filed a First Amended Cross-Claim (“Cross-Claim”).

Cornerstones was also granted leave to intervene.

       A bench trial was held, as well as argument on motions to dismiss filed by the State and by

Cornerstones against Family Facets’ Petition and Great Circle’s Cross-Claim.3 Subsequently, the

trial court issued its judgment, which included dismissals of Counts III, IV, VI, and VII on the

grounds that Family Facets failed to exhaust available administrative remedies, partially dismissed

Count VIII to the extent that it was derivative of Counts III, IV, VI, and VII, and issued findings

of fact and conclusions of law ruling in favor of the State on Count II “since Family Facets was

not entitled to the sheltered workshop preference of Section 34.165, RSMo, the denial of the

preference points to Family Facets was reasonable, and not arbitrary or capricious[,]” and likewise

ruled in favor of the State on Count VIII to the extent that it was derivative of Count II.

       Family Facets timely appeals.


       2
           Counts I and V were dismissed prior to trial.
       3
           Great Circle’s Cross-Claim was dismissed and Great Circle has not appealed from that dismissal.


                                                         5
                             Statutory and Regulatory Framework

       The procurement of services by the State of Missouri is governed by Chapter 34.

Section 34.050 provides that “[t]he commissioner of administration shall make and adopt such

rules and regulations, not contrary to the provisions of this chapter, for the purchase of supplies

and prescribing the purchasing policy of the state as may be necessary.” Section 34.165.3

authorizes further rulemaking by the commissioner of administration, mandating that he or she

“shall make such rules and regulations regarding specifications, quality standards, time of delivery,

performance, bidding preferences, and other relevant matters as shall be necessary to carry out the

purpose of this section.” Pursuant to the authority delegated in section 34.050, as well as

section 34.165.3, the commissioner of administration has made and adopted rules and regulations

governing purchasing and materials management by the State in Division 40 of the Code of State

Regulations. Among these, “[t]he procedures for solicitation, receipt of bids, and award and

administration of contracts by the State are set forth in 1 CSR 40-1.050[.]” Office of Admin. v.

Pharmacy Corp. of Am., 586 S.W.3d 318, 324 (Mo. App. W.D. 2019).

       1 CSR 40-1.050(10) [2016] provides the procedure for implementing the sheltered

workshop preference required by section 34.165:

       (10) Section 34.165, RSMo, provides for a ten- (10-) point bonus on bids/proposals
       submitted by . . . qualified sheltered workshops, if the participating organization
       provides the greater of two percent (2%) or five thousand dollars ($5,000) of the
       total contract value of bids/proposals for a purchase not exceeding ten (10) million
       dollars.

               (A) The bonus points can apply if the bidder/offeror is a qualified . . .
                   sheltered workshop or if the bidder/offeror is subcontracting with
                   [a] . . . sheltered workshop.

               (B) Supplies provided by [a] . . . sheltered workshop must provide a
                   commercially useful function that offers added value to a contract.
                   Supplies shall be provided exclusive to the performance of a contract,
                   and the organization’s obligation outside of a state contract shall not be



                                                 6
                   considered an added value. Services or supplies to be provided by an
                   organization that are outside the usual and customary business of the
                   organization may be considered not to offer added value.

                      1. An organization performs a commercially useful function when it
                      is responsible for executing a distinct element of the work of the
                      contract and is carrying out its responsibilities by actually
                      performing, managing, or supervising the work involved. To
                      perform a commercially useful function, the organization must also
                      be responsible, when applicable, with respect to materials and
                      supplies used on the contract, for negotiating price, determining
                      quality and quantity, ordering the material, and installing (where
                      applicable) and paying for the material itself.

                      2. To determine whether an organization is performing a
                      commercially useful function, the division may evaluate the amount
                      of work subcontracted, whether the amount the organization is to be
                      paid under the contract is commensurate with the work it is actually
                      performing and the organization’s credit claimed for its performance
                      of the work, and other relevant factors.

                      3. An organization does not perform a commercially useful function
                      if its role is limited to that of an extra participant in a transaction,
                      contract, or project through which funds are passed in order to obtain
                      the appearance of an organization’s participation. In determining
                      whether an organization is such an extra participant, the division
                      may examine similar transactions, particularly those in which
                      organizations do not participate.

       1 CSR § 40-1.050 also sets forth the mandatory procedure for seeking administrative

review of an award of a contract by the State:

       (9) A bid or proposal award protest must be submitted in writing to the director or
       designee and must be received by the division within ten (10) business days after
       the date of award. If the tenth day falls on a Saturday, Sunday, or state holiday, the
       period shall extend to the next state business day. A protest submitted after the ten
       (10) business-day period shall not be considered. The written protest should
       include the following information:

               (A) Name, address, and phone number of the protester;

               (B) Signature of the protester or the protester’s representative;

               (C) Solicitation number;




                                                 7
               (D) Detailed statement describing the grounds for the protest; and

               (E) Supporting exhibits, evidence, or documents to substantiate claim.

       A protest which fails to contain the information listed above may be denied solely
       on that basis. All protests filed in a timely manner will be reviewed by the director
       or designee. The director or designee will only issue a determination on the issues
       asserted in the protest. A protest, which is untimely or fails to establish standing to
       protest, will be summarily denied. In other cases, the determination will contain
       findings of fact, an analysis of the protest, and a conclusion that the protest will
       either be sustained or denied. If the protest is sustained, remedies include canceling
       the award. If the protest is denied, no further action will be taken by the division.

1 CSR § 40-1.050(9) [2016].

                                             Analysis

                       Points I and II - Sheltered Workshop Preference

       In its first and second points on appeal, Family Facets argues that it was entitled to the

ten-point sheltered workshop preference provided for in section 34.165 and 1 CSR

40-1.050(10)(B), because Family Facets asserts that its proposals satisfied all statutory workshop

preference requirements and any additional requirements imposed by rules and regulations

promulgated by the State’s commissioner of administration were unenforceable.

       On appeal of a circuit court’s decision in a non-contested case, our review is of

       the judgment of the circuit court, rather than the decision of the administrative
       agency. As such, our review is essentially the same as for other judgments in a
       judge-tried case. In reviewing a judge-tried case, we are governed by Murphy v.
       Carron, 536 S.W.2d 30, 32 (Mo. banc 1976), and we will affirm the decision of the
       trial court unless it is not supported by substantial and competent evidence, is
       against the weight of the evidence, or erroneously declares or applies the law.

State ex rel. Christian Health Care of Springfield, Inc. v. Mo. Dep’t of Health & Senior Servs., 229

S.W.3d 270, 275 (Mo. App. W.D. 2007) (citation omitted) (internal quotation marks omitted).

       Section 34.165 requires the State to give a bidding preference “for products and services

manufactured, produced or assembled in . . . sheltered workshops holding a certificate of approval




                                                 8
from the department of elementary and secondary education pursuant to section 178.920.” A

“sheltered workshop” is “an occupation-oriented facility operated by a not-for-profit corporation,

which, except for its staff, employs only persons with disabilities and has a minimum enrollment

of at least fifteen employable persons with disabilities[.]” § 178.900(3) (emphasis added). The

“staff” of a sheltered workshop is expressly limited by statute to “employees of a sheltered

workshop engaged in management, work procurement, purchasing, supervision, sales,

bookkeeping, and secretarial and clerical functions.” § 178.900(4).

       Here, it is undisputed that no persons with disabilities that are otherwise employed by Lake

Area Industries would be providing any products or services relevant to the state contracts at issue;

instead, the only “employee(s)” of Lake Area Industries that would be providing anything of value

to the relevant state contracts would be IIS Specialists that Lake Area Industries would “hire” and

“pay,” but each IIS Specialist “hire” was subject to pre-approval by Family Facets, each “hire”

would be supervised by Family Facets, Family Facets retained the authority to withdraw approval

for any such “hire,” and Family Facets would directly pay Lake Area Industries for one thing:

“providing” IIS services by IIS Specialists. This arrangement is nothing more than Family Facets

using Lake Area Industries’ sheltered workshop certification as a straw-person entity to give the

appearance of sheltered workshop “participation” when, in reality, the arrangement was nothing

more than a financial “pass-through” in order for Family Facets to attempt to qualify for the

sheltered workshop preference.

       First, though there is little doubt that Lake Area Industries had, in the past, operated as a

sheltered workshop as that term is defined in sections 178.900(3)-(4), upon “hiring” IIS Specialists

for use in providing services in the relevant state contracts, Lake Area Industries could no longer

“wear the hat” of “sheltered workshop” in that IIS Specialists meeting the highly specialized




                                                 9
requirements set forth in the RFP—a college degree or a professional license or designation, and

multiple years of experience, as well as the ability to respond twenty-four hours per day, seven

days a week—would not qualify as a person with disabilities nor an employee of the sheltered

workshop engaged in management, work procurement, purchasing, supervision, sales,

bookkeeping, or a secretarial or clerical function. And, because Lake Area Industries no longer

qualified as a statutory “sheltered workshop,” Family Facets could not obtain sheltered workshop

preference points by employing Lake Area Industries.

       Likewise, Family Facets’ argument that “sheltered workshops usually and customarily

engage in business activities in addition to the services provided by their handicapped employees”

is misplaced in the factual context of this case. While a not-for-profit corporation certified to

operate a sheltered workshop may “usually and customarily engage in business activities in

addition to the services provided by their handicapped employees[,]” as discussed above, the

statutes make clear that employees of a sheltered workshop consist of “only persons with

disabilities” “except for its staff,” which consists of only employees “engaged in management,

work procurement, purchasing, supervision, sales, bookkeeping, and secretarial and clerical

functions.” Hence, any services provided by IIS Specialists employed by Lake Area Industries

were not services provided by a sheltered workshop.

       1 CSR 40-1.050(10), previously referenced with particularity, which provides the

procedure for implementing the sheltered workshop preference required by section 34.165,

clarifies the distinction expressed in the statute that the preference is for services and products of

the sheltered workshop, not just any business touching the not-for-profit corporation that operates

it.




                                                 10
       Lake Area Industries was a general not-for-profit Missouri corporation certified to operate

a sheltered workshop by the Department of Elementary and Secondary Education pursuant to

section 178.900 et seq. Prior to its interactions with Family Facets, Lake Area Industries had not

provided IIS/IFRS services and had not employed IIS specialists and would not otherwise provide

such services beyond the employment of the Family Facets IIS Specialists. Lake Area Industries

would have to hire new employees to provide IIS/IFRS services for Family Facets’ contracts with

the State. As such, the services to be provided by Lake Area Industries did not qualify for the

Sheltered Workshop preference in that the regulation requires such services to “provide a

commercially useful function that offers added value to a contract” and “the organization’s

obligation outside of a state contract [(here, the actual operation of its sheltered workshop by

persons with disabilities,)] shall not be considered an added value. Services . . . to be provided by

an organization that are outside the usual and customary business of the organization [(here, the

provision of IIS Specialists)] may be considered not to offer added value.”                  1 CSR

§ 40-1.050(10)(B) [2016].

       Under the MOU governing the arrangement between Family Facets and Lake Area

Industries, Family Facets and Lake Area Industries would enter into a contract for each of the

project sites for which Family Facets was awarded a contract. Under each contract, Lake Area

Industries IIS Specialists would provide intensive in-home services twenty-four hours a day, seven

days a week each month. For each of the project sites, Lake Area Industries would interview,

select, negotiate and set the salary for, hire, employ, and pay a designated number of IIS Specialists

who would provide IIS services under the contract. Family Facets retained the authority to approve

in advance each IIS Specialist before Lake Area Industries would be paid for their services and

could withdraw its approval at any time. Family Facets would submit the individual personnel




                                                 11
data to the Children’s Division, would exclusively supervise IIS Specialists in performance of IIS

program functions, and would require IIS Specialists to follow all policies and procedures of

Family Facets. Family Facets would provide the IIS Specialists with a cell phone, laptop, email

address, and company car from the Family Facets fleet, procedure and program manuals, necessary

office supplies, direct individual reimbursement for personal funds expended for necessary and

approved expenses, and the option to enroll in health insurance on the same terms and conditions

as other Family Facets employees. The financial agreement was that Lake Area Industries was to

be paid directly by Family Facets for the IIS services provided by the IIS Specialists. Lake Area

Industries was free to pay the IIS Specialists at rates that were less than, equal to or more than the

designated annual salary cap rate established by Family Facets; however, Family Facets would

only reimburse Lake Area Industries based upon Family Facets’ annual salary cap.

          Based upon these facts, the services to be provided by Lake Area Industries did not qualify

for the Sheltered Workshop preference in that the regulation requires such services to “provide a

commercially useful function[.]” Lake Area Industries would not be providing a commercially

useful function under the State contracts because it would not be “responsible for executing a

distinct element of the work of the contract and [carry] out its responsibilities by actually

performing, managing, or supervising the work involved.” 1 CSR § 40-1.050(10)(B)(1) [2016].

Further, the arrangement memorialized in the MOU showed that Lake Area Industries’ “role

[would be] limited to that of an extra participant in a transaction, contract, or project through which

funds are passed in order to obtain the appearance of an organization’s participation,” which

precludes application of the Sheltered Workshop preference, as well. 1 CSR § 40-1.050(10)(B)(3)

[2016].




                                                  12
       Finally, Family Facets’ assertion that “1 CSR 40-1.050(10), as applied, is unenforceable to

the extent it imposes substantive conditions on entitlement to the sheltered workshop preference

not found in section 34.165” fails as well.        “[A]dministrative regulations are entitled to a

presumption of validity and may ‘not be overruled except for weighty reasons[.]” Union Elec. Co.

v. Dir. of Revenue, 425 S.W.3d 118, 124 (Mo. banc 2014) (internal quotation marks omitted).

“Rules and regulations are valid unless unreasonable and plainly inconsistent with the statute under

which the regulation was promulgated.” State ex rel. Mo. Pub. Def. Comm’n v. Waters, 370

S.W.3d 592, 602 (Mo. banc 2012) (internal quotation marks omitted). A party challenging a rule

has the burden “‘to show that [it] bear[s] no reasonable relationship to the legislative objective.’”

Id. at 603 (quoting Foremost-McKesson, Inc. v. Davis, 488 S.W.2d 193, 197 (Mo. banc 1972)).

“Administrative rules should be reviewed in light of the evil they seek to cure and are not

unreasonable merely because they are burdensome.” Id. at 602 (internal quotation marks omitted).

A rule or regulation is void only where it conflicts with a statute, goes beyond the scope of the

authority the legislature conferred on the rulemaking agency, or if it attempts to extend or modify

a statute. Brown v. Mo. Bd. of Prob. & Parole, 517 S.W.3d 24, 26-27 (Mo. App. W.D. 2016).

       “Chapter 34 gives the State’s commissioner of administration broad purchasing authority

on behalf of the State.” Lee’s Summit License, LLC v. Office of Admin., 486 S.W.3d 409, 418 (Mo.

App. W.D. 2016). “Section 34.030 provides that the commissioner of administration ‘shall

purchase all supplies for all departments of the state, except as in this chapter otherwise provided.’”

Id. “‘Supplies’ is defined by section 34.010.6 to ‘be deemed to mean, supplies, materials,

equipment, contractual services, and any and all articles or things.’” Id. at 418-19. “The

Chapter 34 bidding procedures also include section 34.050 which provides that ‘[t]he

commissioner of administration shall make and adopt such rules and regulations, not contrary to




                                                  13
the provisions of this chapter, for the purchase of supplies and prescribing the purchasing policy

of the state as may be necessary.’” Id. at 419. Chapter 34 also mandates a bidding preference for

“products and services manufactured, produced or assembled in” sheltered workshops in

section 34.165, and provides that the commissioner “shall make such rules and regulations

regarding specifications, quality standards, time of delivery, performance, bidding preferences,

and other relevant matters as shall be necessary to carry out the purpose of this section.”

§§ 34.165.1, 34.165.3.

          One such rule is 1 CSR 40-1.050, addressing procedures for the solicitation and receipt of

bids and the awarding and administration of contracts. 1 CSR 40-1.050(10)(B) delineates the

limits of the preference as it provides: “Supplies provided by . . . [a] sheltered workshop must

provide a commercially useful function that offers added value to a contract.” Clarifying and

defining the appropriate application of the preference was “not contrary to the provisions of

[chapter 34]” and was “necessary to carry out the purpose of [section 34.165].” §§ 34.050,

34.165.3. Plainly, delineating the application of the sheltered workshop preference to bids for

Chapter 34 State contracts is authorized by statute, as it is authorized by a rule lawfully

promulgated pursuant to sections 34.050 and 34.165.3. Lee’s Summit License, LLC, 486 S.W.3d

at 419.

          The trial court did not err in ruling in favor of the State on Counts II and VIII regarding the

determination that Family Facets was not entitled to the Sheltered Workshop preference points.

Points I and II are denied.4


          4
           Family Facets relies on Information Technologies, Inc. v. St. Louis County, 14 S.W.3d 60, 65 (Mo. App.
E.D. 1999), a case interpreting section 34.073, which requires bidding preferences for the award of state contracts to
Missouri firms, corporations, and individuals. However, the “Missouri resident” preference identified by
section 34.073 is much more general in application than the specificity attached to the “sheltered workshop”
preferences set forth in section 34.165. Furthermore, the Information Technologies court did not note any duly
promulgated rules or regulations regarding the interpretation or application of section 34.073, whereas
section 34.165.3 specifically authorizes the commissioner of administration to make rules and regulations “regarding


                                                         14
       Points III, IV, and V - Dismissal for Failure to Exhaust Administrative Remedies

         In its third, fourth, and fifth points on appeal, Family Facets asserts that the trial court erred

in dismissing Counts III, IV, VI, VII, and VIII for failure to exhaust administrative remedies.

         Our standard of review for the granting of a motion to dismiss is de novo. McDonald v.

Chamber of Commerce of Independence, 581 S.W.3d 110, 113 (Mo. App. W.D. 2019) (citing

Avery Contracting, LLC v. Niehaus, 492 S.W.3d 159, 161-62 (Mo. banc 2016)). “‘In determining

the appropriateness of the trial court’s dismissal of a petition, an appellate court reviews the

grounds raised in the defendant’s motion to dismiss.’” Id. at 114 (quoting Goldsby v. Lombardi,

559 S.W.3d 878, 881 (Mo. banc 2018)). We will not reverse the trial court’s ruling unless the

motion to dismiss cannot be sustained on any ground.5 Id.

         Following trial, the State moved to dismiss all counts of Family Facets’ Petition because

“All counts fail to state a claim upon which relief can be granted, because Family Facet[s] failed

to exhaust administrative remedies by not filing a protest against the contract award to

Cornerstones of Care on sites 733, 831, 932, and 933[.]” The trial court dismissed Counts III, IV,

VI, VII, and VIII on this basis as raised in the motion.

         1 CSR § 40-1.050(9) provides the mandatory procedure for seeking administrative review

of an award of a contract by the State, requiring that: “A bid or proposal award protest must be




specifications, quality standards, time of delivery, performance, bidding preferences, and other relevant matters as
shall be necessary to carry out the purpose of this section” § 34.165.3, which has been done and further clarifies
application of the sheltered workshop preference (1 CSR 40-1.050(10) [2016]). Both of these important distinguishing
aspects are more thoroughly discussed in our analysis in today’s ruling. Accordingly, Family Facets’ reliance upon
Information Technologies is misplaced.
          5
            On appeal, Cornerstones asserts other grounds upon which the trial court should have dismissed Family
Facets’ petition below. Cornerstones also asserts in its briefing that the trial court erred in failing to dismiss all of the
claims asserted by Family Facets below—though Cornerstones did not file a cross-appeal or motion to dismiss the
present appeal and, instead, only made these arguments in its briefing to this court. First, given our ruling today that
the trial court did not err in dismissing certain of Family Facets’ counts below, we deem Cornerstones’ alternative
arguments for dismissal to be moot. Second, to the extent that Cornerstones seeks dismissal of the remainder of the
present appeal, we deny such request for dismissal.


                                                            15
submitted in writing to the director or designee and must be received by the division within ten

(10) business days after the date of award.” The rule also expressly limits the scope of the

disposition of such a protest: “The director or designee will only issue a determination on the

issues asserted in the protest.” 1 CSR § 40-1.050(9) [2016]. In the event that a protesting party

disagrees with the disposition following such administrative review, section 536.150.1 provides

for judicial review of the State’s ruling:

       When any administrative officer or body existing under the constitution or by
       statute or by municipal charter or ordinance shall have rendered a decision which
       is not subject to administrative review, determining the legal rights, duties or
       privileges of any person, . . . and there is no other provision for judicial inquiry into
       or review of such decision, such decision may be reviewed by suit for injunction,
       certiorari, mandamus, prohibition or other appropriate action, and in any such
       review proceeding the court may determine the facts relevant to the question
       whether such person at the time of such decision was subject to such legal duty, or
       had such right, or was entitled to such privilege, and may hear such evidence on
       such question as may be properly adduced, and the court may determine whether
       such decision, in view of the facts as they appear to the court, is unconstitutional,
       unlawful, unreasonable, arbitrary, or capricious or involves an abuse of discretion;
       and the court shall render judgment accordingly, and may order the administrative
       officer or body to take such further action as it may be proper to require; but the
       court shall not substitute its discretion for discretion legally vested in such
       administrative officer or body, and in cases where the granting or withholding of a
       privilege is committed by law to the sole discretion of such administrative officer
       or body, such discretion lawfully exercised shall not be disturbed.

Because section 536.150.1 provides a right to judicial review when an agency decision is “‘not

subject to administrative review[,]’” it requires that a party exhaust its administrative remedies

prior to seeking judicial review in non-contested cases. State ex rel. Robison v. Lindley-Myers,

551 S.W.3d 468, 472 (Mo. banc 2018) (quoting § 536.150.1).

       The purpose of requiring the exhaustion of administrative remedies is the preservation of

“the efficiency in the relationships between agencies and the courts.” Coleman v. Mo. Sec’y of

State, 313 S.W.3d 148, 154 (Mo. App. W.D. 2010). This court explained in Coleman:




                                                  16
        Agencies have a special expertise. A factual record can be more fully developed
        by pursuing the designated channels for relief with the agency, or a matter may be
        resolved by the agency, rendering review by the court unnecessary. In addition, the
        exhaustion of remedies doctrine is rooted in policy considerations designed to
        encourage agencies to correct their own errors and to compile the record for
        purposes of judicial review.

Id. (citations omitted).

        Family Facets cites to non-binding precedent, 73 C.J.S. Public Administrative Law and

Procedure § 129; Mazariegos-Paiz v. Holder, 734 F.3d 57, 63 (1st Cir. 2013), to argue it should

benefit from the principle stated therein that: “The administrative exhaustion requirement is

satisfied as to particular issues when the agency, either on its own initiative or at the behest of

some other party to the proceedings, has addressed those claims on the merits regardless of which

party raised the issue or even if the agency raised it sua sponte.” On this ground, Family Facets

argues that since it specifically argued that State evaluators had improperly considered certain

factors as to specific complained-of sites it and others protested during the protest period, those

arguments should be deemed “exhausted” as to any number of other sites that were not submitted

as a protest to the State during the administrative appeal.

        However, Family Facets fatally misconstrues the scope of the State’s decisions regarding

the protests before it. 1 CSR § 40-1.050(9) expressly limits the scope of the State’s disposition of

a protest brought under the rule: “The director or designee will only issue a determination on the

issues asserted in the protest.”

        Here, Family Facets’ protest challenged only the awards for sites 732 and 735 and made

no mention of sites 733, 831, 932, or 933. As such, the State’s ensuing decision was limited to the

issues Family Facets argued in its protest as to sites 732 and 735 only. Moreover, the State did not

have before it, and thus had no reason or opportunity to consider, Family Facets’ arguments, only

later made in its petition to the trial court that, for sites 733, 831, 932, and 933, consideration of



                                                 17
accreditation in evaluation of the Experience category was improper, evaluation and scoring of

implementation schedules was improper, and evaluation and scoring of the Performance category

was improper. Great Circle’s protest was made on the ground that Family Facets was improperly

awarded the Sheltered Workshop preference on all sites for which it was awarded a contract

(sites 732, 733, 738, 739, 831, 932, and 933) and argued that the points should be removed and the

awards made accordingly. As such, the State did not have before it, and thus had no reason or

opportunity to consider, Family Facets’ argument in its petition that, rather than removing the

preference points and making the awards accordingly as requested by Great Circle, the proper

remedy was to rebid the contracts for those sites. It is only “[w]here no adequate remedy lies

through the administrative process” that “the court will not require exhaustion.”                        Premium

Standard Farms, Inc. v. Lincoln Twp. of Putnam Cty., 946 S.W.2d 234, 237 (Mo. banc 1997); State

ex rel. Mo. Parks Ass’n v. Mo. Dep’t of Nat. Res., 316 S.W.3d 375, 388 n.12 (Mo. App. W.D.

2010).

         Because Family Facets failed to show that it exhausted its administrative remedies that

were available to it or that it should be deemed to have done so, the trial court did not err in

dismissing Counts III, IV, VI, VII, and VIII, in part, for failure to exhaust administrative remedies.

         Point III is denied.6

         Family Facets contends, in the alternative, that it was “not required to exhaust

administrative remedies under the futility exception to [the exhaustion of administrative remedies]

doctrine in that OA fully considered and decided all the issues which form the basis for Counts III,



          6
            Family Facets again cites to precedent, Alhalabi v. Missouri Department of Natural Resources, 300 S.W.3d
518 (Mo. App. E.D. 2009) and Jeffery v. St. Louis Fire Department, 506 S.W.3d 394 (Mo. App. E.D. 2016), that is
inapposite, as this precedent addresses the application of the Missouri Human Rights Act—which is to be construed
liberally for the sake of remediating human rights violations against frequently unsophisticated parties—as opposed
to the distinct context of the present case: experienced, sophisticated parties competing for multiple complex state
contracts for highly specialized services.


                                                        18
IV, VI, VII and VIII in its decisions on the two bid protests before it.” This argument critically

misunderstands the nature of the futility exception. The futility exception requires consideration

of the authority and ability of the administrative body to provide an adequate remedy, not the

subjective likelihood of it doing so. Bartlett v. U.S. Dep’t of Agric., 716 F.3d 464, 472-73 (8th

Cir. 2013) (“An administrative remedy will be deemed futile if there is doubt about whether the

agency could grant effective relief.”); Duncan v. Mo. Bd. for Architects, Prof’l Eng’rs & Land

Surveyors, 744 S.W.2d 524, 531 (Mo. App. E.D. 1988) (reasoning that because “[a]dministrative

agencies lack the jurisdiction to determine the constitutionality of statutory enactments[,] . . .

[r]aising the constitutionality of a statute before such a body is to present to it an issue it has no

authority to decide” and concluding that “[t]he law does not require the doing of [that] useless and

futile act” in that context.).

        Family Facets argues that because “OA’s determination of Family Facets[’] initial protest

addressed the issues in Counts II, IV, VI and VII directly” and the State “defended OA’s actions

on the merits at the trial court[,]” to require them to exhaust administrative remedies by filing a

protest to the awards of sites 733, 831, 932, and 933 would be to force them “to raise the same

issues on the same set of facts arising under the same RFP” and would be “the epitome of a useless

and futile act.” However,

        [w]e cannot assume that consequence. Such a position is unsound in principle and
        unsupported by the authorities. To countenance such view would break down the
        rule of exhaustion of remedies. There is always the possibility that the action of
        the administrative board may render resort to the courts unnecessary, for it might
        correct the error complained of at a hearing under its rules. The exhaustion rule has
        been held to be applicable, even though the litigant may believe that his petition to
        the administrative agency will be denied and consequently his attempt would be
        futile.




                                                 19
State ex rel. Scott v. Scearce, 303 S.W.2d 175, 180 (Mo. App. 1957). Furthermore, as discussed

in our analysis of Point III, we disagree with Family Facets’ characterization of the scope of the

State’s determination of Family Facets’ protest.

        Because Family Facets failed to show it was not required to exhaust administrative

remedies under the futility exception to the exhaustion of administrative remedies doctrine, the

trial court did not err in dismissing Counts III, IV, VI, VII, and VIII, in part, for failure to exhaust

administrative remedies.

        Point IV is denied.

        Family Facets argues in its final point that it was “not subject to an exhaustion requirement

in that the OA protest procedure applies only to an award of a contract, not the amendment of an

award already made[.]” 1 CSR § 40-1.050(9) requires that “[a] bid or proposal award protest must

be submitted in writing to the director or designee and must be received by the division within ten

(10) business days after the date of award.” Family Facets offers no convincing rationale or legal

authority for differentiating between an “initial” award made following the submission of bids and

an “amended” award made following a protest. As such, this unsupported argument on appeal is

deemed abandoned.       Lattimer v. Clark, 412 S.W.3d 420, 423 (Mo. App. W.D. 2013) (“A

contention that is not supported with argument beyond conclusions is considered abandoned.”);

Martin v. Summers, 576 S.W.3d 249, 257 n.12 (Mo. App. W.D. 2019) (“If a party does not support

contentions with relevant authority or argument beyond conclusory statements, the point is deemed

abandoned.”).

        Family Facets further argues in its final point that “the protest procedure is not the type of

remedy that is subject to the exhaustion requirement” because it is not legislatively mandated and

the legislature did not originally entrust the determination to the agency. Although Chapter 34




                                                  20
does not expressly set forth the administrative review provided for by the protest procedure, it does

expressly provide the Office of Administration broad rulemaking authority to govern the “purchase

of supplies and prescribing the purchasing policy of the state as may be necessary,” so long as it

is “not contrary to the provisions of [chapter 34].” § 34.050. Pursuant to that authority, the Office

of Administration promulgated rule 1 CSR 40-1.050(9), which mandates, in part: “A bid or

proposal award protest must be submitted in writing to the director or designee and received by

the division within ten (10) business days after the date of award.” The rule prescribing the award

protest procedure is not contrary to any provision of Chapter 34. Because the protest procedure

rule was duly promulgated within the authority provided in section 34.050, it has the force and

effect of law. United Pharmacal Co. of Mo. v. Mo. Bd. of Pharmacy, 159 S.W.3d 361, 365 (Mo.

banc 2005) (“‘[R]ules promulgated by an administrative agency with properly delegated authority

have the force and effect of law.’”). Only in the event that a party has exhausted the administrative

review provided for in the protest procedure under 1 CSR 40-1.050(9) does section 536.150.1

provide for judicial review of the State’s decision on the protest:

       When any administrative officer or body existing under the constitution or by
       statute or by municipal charter or ordinance shall have rendered a decision which
       is not subject to administrative review, determining the legal rights, duties or
       privileges of any person, . . . and there is no other provision for judicial inquiry into
       or review of such decision, such decision may be reviewed by suit for injunction,
       certiorari, mandamus, prohibition or other appropriate action . . . .

(Emphasis added.)

       Because Family Facets was subject to an exhaustion requirement in that the protest

procedure rule applies to an amended award of a contract and the protest procedure is the type of

remedy that is subject to the exhaustion requirement because it is legislatively authorized and has

the force and effect of law, the trial court did not err in dismissing Counts III, IV, VI, VII, and

VIII, in part, for failure to exhaust administrative remedies.



                                                  21
      Point V is denied.

                                          Conclusion

      The judgment of the trial court is affirmed.



                                            /s/Mark D. Pfeiffer
                                            Mark D. Pfeiffer, Judge

Thomas N. Chapman, Presiding Judge, and Anthony Rex Gabbert, Judge, concur.




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