STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

UNISYS CORPORATION, )

)

Petitioner, )

)

vs. ) CASE NO. 91-6515CVL

) STATE OF FLORIDA, DEPARTMENT OF ) GENERAL SERVICES, )

)

Respondent. )

)

FINAL ORDER CASE HISTORY

As contemplated by Section 287.133(3)(a) and (b), Florida Statutes, Petitioner made Respondent aware that Petitioner had been convicted of commission of a public entity crime as defined in Section 287.133(1)(g), Florida Statutes. This conviction occurred in the United States District Court, Eastern District of Virginia, on September 6, 1991. That case has been referred to as "Ill Wind."

Respondent subsequently became aware of the September 13, 1991, conviction of commission of a public entity crime as defined in Section 287.133(1)(g), Florida Statutes, pertaining to Sperry Corporation, the predecessor corporation of Petitioner. This conviction occurred in the United States District Court, Eastern District of New York, and is referred to as D'Avino.

As a consequence of the previously described convictions Respondent gave notice on October 11, 1991, concerning its belief that good cause existed to place Petitioner on the State of Florida Convicted Vendor List. That notification of intended agency action was dated October 11, 1991. The action was taken pursuant to Section 287.133(3)(e)1, Florida Statutes. In accordance with Section 287.133(3)(e)2, Florida Statutes, Petitioner was advised that it had 21 days to file a petition for formal hearing pursuant to Section 120.57(1), Florida Statutes. That hearing would be for the purpose of deciding whether it would be in the public interest for the Petitioner to be placed on the Convicted Vendor List.

In accordance with Section 287.133(3)(e)2.a, Florida Statutes, Petitioner filed its petition with Respondent.

In accordance with Section 287.133(3)(e)2.b, Florida Statutes, Respondent notified the Division of Administrative Hearings of the request for formal hearing. That notification occurred on October 11, 1991.

In furtherance of the procedures set out in Section 287.133(3)(e)2.b, Florida Statutes, the Director of the Division of Administrative Hearings assigned the case to the undersigned to preside over the proceeding. The order of assignment was entered on October 15, 1991.

CASE DISCUSSION

Contemporaneous with the notification of the Division of Administrative Hearings of the request for formal hearing a joint stipulation was filed and a joint motion to expedite the hearing process. By their terms these documents identify the lack of disputed issues of material fact between the parties and the agreement that all necessary facts have been provided by the stipulation text and its referenced exhibits to allow a determination concerning the issue of whether Petitioner should be placed on the Convicted Vendor List. This means that the formal hearing envisioned by Section 287.133(3)(e)2.c, Florida Statutes, need not be conducted.

Having reviewed the joint stipulation and joint motion to expedite, and having heard the explanations by counsel at the conference held at 2:00 p.m. October 15, 1991, in the offices of the Division of Administrative Hearings, the DeSoto Building, 1230 Apalachee Parkway, Tallahassee, Florida, it is clear that the parties do not wish to participate in a formal hearing as contemplated by Section 120.57(1), Florida Statutes, even to the extent of submitting proposed final orders which would be designed to argue the manner in which the Hearing Officer should conclude this case by entering a final order. Petitioner has, by correspondence dated October 16, 1991, filed a more specific reference to the place within the exhibits to the joint stipulation where the more pertinent aspects of the factual stipulation of the parties may be found. This information was provided pursuant to a request from the Hearing Officer.

Having considered the joint stipulation and joint motion to expedite, it is determined that the parties intend that the case be resolved through informal disposition as contemplated under Section 120.57(3), Florida Statutes, and more specifically spoken to in Section 287.133(3)(e)2.f, Florida Statutes. The latter provision calls for the Hearing Officer to enter a final order which adopts the joint stipulation under the agreed to statement of facts and law herein. This resolution of the case is as contrasted with a formal hearing pursuant to Section 120.57(1), Florida Statutes, where material disputes of fact must be resolved and having in mind that informal disposition pursuant to Section 120.57(2), Florida Statutes, where material facts are not in dispute is not an available procedure in that it is prohibited as a means of disposition in the statutory language set out in Section 287.133(3)(e)2, Florida Statutes.

Therefore, unless precluded by law, the joint stipulation must be adopted through entry of the final order. Having examined the joint stipulation and joint motion to expedite the outcome contemplated by the joint stipulation and joint motion to expedite are not precluded by law. To better understand this reasoning, the text to the joint stipulation and joint motion to expedite is now set forth:

The Petitioner, Unisys Corporation (Unisys) and the Respondent, Department of General Services (Department), by their undersigned attorneys, enter into this Joint Stipulation and stipulate to the following facts:

1. On September 6, 1991, Unisys was convicted of commission of a public entity crime as defined within subsection 287.133(1)(g), Florida Statutes. This con- viction occurred in the United States District Court, Eastern District of Virginia,

   and is hereafter referred to as Ill Wind. (See Exhibit A and Exhibit B, Tabs 6 & 7.)

   
   

2. On September 13, 1991, Sperry Corporation (Sperry) was convicted of commission of a public entity crime as defined within subsec- tion 287.133(1)(g), Florida Statutes. Sperry is a predecessor corporation of Unisys. This conviction occurred in the United States District Court, Eastern District of New York, and is hereafter referred to as D'Avino.

   (See Exhibit B, Tabs 8 & 9.

   
   

3. Pursuant to Paragraphs 287.133(3)(a) and (b), Florida Statutes, Unisys made timely notification to the Department concerning the details of the Ill Wind and D'Avino convic- tions. (See Exhibit B, Tabs 6, 7, 8 & 9, and Exhibit C.)

   
   

4. On October 11, 1991, the Department issued a notice of intent pursuant to Subparagraph 287.133(3)(e)1., Florida Statutes. (See Exhibit D.)

   
   

5. On October 11, 1991, pursuant to Subpara- graph 287.133(3)(3)2., Florida Statutes, Unisys timely filed a petition for formal administrative hearing pursuant to Subsection 120.57(1), Florida Statutes, to determine whether it is in the public interest for Unisys to be placed on the State of Florida Convicted Vendor List. (See Exhibit E.)

   
   

6. The Ill Wind and D'Avino convictions arose out of investigations initiated by the United States Justice Department into possible Pentagon procurement fraud.

   
   

7. Subparagraph 287.133(3)(e)3., Florida Statutes, establishes factors which, if appli- cable to a convicted vendor, will mitigate against placement of that vendor on the Convicted Vendor List.

   
   

8. Subparagraph 287.133(3)(e)3.d., Florida Statutes, establishes "[p]rompt or voluntary payment of any damages or penalty as a result of the conviction" as a factor mitigating against placement on the Convicted Vendor List.

   
   

9. As a result of its conviction in Ill Wind, Unisys has been directed and has agreed to pay fines, penalties and damages in an amount not to exceed $190,000,000. Unisys has timely paid all civil and criminal damages owed the

   federal government as they have become due. (See Exhibit B, Tabs 3a & 3b and Exhibit F.)

   
   

10. As a result of the D'Avino conviction, Sperry has been directed and has agreed to pay fines, penalties and damages in an amount not to exceed $11,000,000. Sperry has timely paid all civil and criminal damages owed the federal government as they have become due. (See Exhibit F.)

    
    

11. In the course of a separate investiga- tion, the Department of the Navy temporarily suspended three operations of the former Sperry Defense Systems group from March 1989 until June 1989. According to paragraph 10 of the AGREEMENT BETWEEN UNISYS CORPORATION AND THE DEPARTMENT OF DEFENSE CONCERNING TERMINATION OF SUSPENSION OF THE SHIPBOARD

    AND GROUND SYSTEMS GROUP, THE COMPUTER SYSTEMS DIVISION, AND THE COMMUNICATION SYSTEMS DIVISION OF UNISYS CORPORATION DEFENSE SYSTEMS, AND THE ESTABLISHMENT OF A CONTINUING SURVEILLANCE PROGRAM (Exhibit G),

    Unisys voluntarily agreed to pay the Navy's costs of the investigation incurred during the suspension review. Unisys promptly paid

    $200,000 in full compliance with the Agreement. (See Exhibit H.)

    
    

12. Subparagraph 287.133(3)(e)3.e., Florida Statutes, establishes "[c]ooperation with state or federal investigation or prosecution of any public entity crime" as a mitigating factor.

    
    

13. Unisys fully cooperated with the federal authorities in connection with the Ill Wind investigation. As described in paragraph 7 of the Plea Agreement:

    
    

    In this regard it is noted that immediately after the UNISYS CORPORATION became aware of the Illwind [sic] investigation, the company assured the government of its intention to cooperate with its investigation. Since that time, the UNISYS CORPORATION has produced documents without subpoena, made its personnel available for interviews, performed accounting and financial analyses to assist the FBI, and otherwise fully cooperated with the United States Attorney's office in its investigation not only of SPERRY CORPORATION but of other individuals and companies as well. (Exhibit B, Tab 6, p.3.)

14. Unisys fully cooperated with the federal authorities in connection with the D'Avino investigation. As described in paragraph 5 of the Notice of Plea Agreement and Plea Agreement:

    
    

    The United States acknowledges that Unisys was cooperative during the investigation that cul- minated in this plea. . . . (Exhibit B, Tab, 9, p. 3.)

    
    

15. Unisys also cooperated in the investiga- tion conduction by the U.S. Navy. The Navy determined that Unisys would not be debarred from further dealings. (See Exhibit B, Tab 4.)

    
    

16. Unisys fully cooperated with the Depart- ment in connection with its investigation ini- tiated pursuant to Section 287.133, Florida Statutes.

    
    

17. Subsubparagraph 287.133(3)(e)3.f., Florida Statutes, establishes "[d]isassocia- tion from any other persons or affiliates convicted of the public entity crime" as a mitigating factor.

    
    

18. Individuals convicted of the wrongdoing which gave rise to the pleas in question are no longer employed by Unisys. (See

    Exhibit 1.)

    
    

19. Subsubparagraph 287.133(3)(e)3.g., Florida Statutes, establishes "[p]rior or future self-policing by the person or affiliate to prevent public entity crimes" as a mitigating factor.

    
    

20. Unisys has an active ethics compliance and training program. Unisys has made both past and present efforts to insure the highest standards of business conduct by the Company and its employees. (See Composite Exhibit J.)

    
    

21. Subsubparagraph 287.133(3)(e)3.h., Florida Statutes, establishes "[r]einstatement or clemency in any jurisdiction in relation to the public entity crime at issue in the proceeding" as a mitigating factor.

    
    

22. Although the Navy temporarily suspended three operations of the former Sperry Defense Systems (see Paragraph 11 above), the three Unisys defense operations were reinstated. The government has extended clemency to Unisys and Unisys will not be suspended or

    debarred based upon the activity set forth in the Ill Wind Plea Agreement.

    
    

23. Subsubparagraph 287.133(3)(e)2.k., Florida Statutes, establishes "any demon- stration of good citizenship" as a mitigating factor.

    
    

24. Unisys, including its predecessor(s), has sponsored the Florida Special Olympics Torch Run since 1984. (See Exhibit K.)

    
    

25. This Joint Stipulation provides a full and complete factual basis for determining whether Unisys should be placed on the Convicted Vendor List. In light of the facts and the criteria set forth in Subsubparagraph 287.133(3)(e)3.a through k., Florida Statutes, there are no disputed issues of material fact between the Department and Unisys which would require a formal hearing.

* * * EXHIBIT LIST

Exhibit A. Transcript of Guilty Plea, September 6, 1991

Exhibit B. Unisys Global Settlement Exhibit C. transmittal document,

September 9, 1991, Statement of

Facts, September 6, 1991.

Exhibit D. Notice of intent letter, October 11, 1991.

Exhibit E. Unisys' Petition for Formal Administrative Hearing

Exhibit F. Payment memorandum dated October 7, 1991.

Exhibit G. AGREEMENT BETWEEN UNISYS CORPORATION AND THE DEPARTMENT OF DEFENSE. . . .

Exhibit H. July 18, 1989, cover letter and Unisys' check

Exhibit I. Letter dated October 9, 1991 Composite Exhibit J.

1. - Code of Ethical Conduct and 1990 Pamphlet

2. - Ethics Video Tape and Script (1989)

3. - Employee Ethics Awareness Training and Certification

4a - Handbook of Ethical Business Practices (Rev. 6/1989)

4b - Handbook of Ethical Business Practices (Rev. 4/1990)

4c - 1991 Supplement to Handbook of Ethical Business Practices

1. - Ethics Training Progam--Policy/Procedure documents

2. - March 16, 1990, memorandum to Ethics Training Coordinators

3. - 1989 Unisys Corporation Operations Directory

4. - Three (3) Ethics Video Tapes (1991) Exhibit K. April 23, 1991, letter

JOINT MOTION TO EXPEDITE

The Petitioner, Unisys Corporation (Unisys) and the Respondent, Department of General Services (Department), by their undersigned attorneys, hereby jointly move that this proceeding be expedited pursuant to Rule 22I-6.018, Florida Administrative Code, and state as grounds:

1. Unisys has filed a petition for formal administrative hearing pursuant to Subsection 120.57(1), Florida Statutes, to determine whether it is in the public interest for Unisys to be placed on the State of Florida Convicted Vendor List pursuant to Section 287.133, Florida Statutes.

   
   

2. Public entities are essentially barred from transacting business with a company whose name is placed on the Convicted Vendor List for thirty-six (36) months after placement on the List. Paragraph 287.133(2)(b), Florida Statutes.

   
   

3. Significant procurements between public entities and Unisys are currently pending, but are contingent upon the outcome of this proceeding.

   
   

4. It is the position of the parties that there are no disputed issues of fact and no hearing is required in this proceeding. . . .

CONCLUSIONS OF LAW

The parties have conceded that the Ill Wind and D'Avino cases in Federal Court make out a prima facie showing that it is in the public interest for Petitioner to be placed on the Convicted Vendor List. The parties have also

agreed that based upon the prompt payment of damages, cooperation with investigations, and termination of the employment or other relationship with the employee or other natural person responsible for the public entity crime a rebuttable presumption has been created that it would not be in the public interest to place the Petitioner on the Convicted Vendor List. No evidence was presented to overcome the presumption the parties having expressed a common position on these issues. See Section 287.133(3)(e)4, Florida Statutes, which states:

In any proceeding under this section, the department shall be required to prove that it is in the public interest for the person to whom it has given notice under this section to be placed on the convicted vendor list.

Proof of a conviction of the person or that one is an affiliate of such person shall constitute a prima facie case that it is in the public interest for the person or affiliate to whom the department has given notice to be put on the convicted vendor list. Prompt payment of damages or posting of a bond, cooperation with investigation, and termination of the employment or other relationship with the employee or other natural person responsible for the public entity crime shall create a rebuttable presumption that it is not in the public interest to place a person or affiliate on

the convicted vendor list. Status as an affiliate must be proven by clear and convincing evidence. If the hearing officer determines that the person was not convicted or is not an affiliate of such person, that person or affiliate shall not be placed on the convicted vendor list.

Additionally, the parties are not in dispute concerning Petitioner's proof by a preponderance of the evidence that it would not be in the public interest to put the Petitioner on the Convicted Vendor List based upon evidence addressing all factors in Section 287.133(3)(e)3, Florida Statutes. The opportunity to prove by a preponderance of evidence that it would not be in the public interest to put the Petitioner on the Convicted Vendor List is provided in Section 287.133(3)(e)5, Florida Statutes. The factors to be considered in Section 287.133(3)(e)3, Florida Statutes, which coincide with the representations set forth in the joint stipulation and joint motion to expedite are as follows:

1. In determining whether it is in the public interest to place a person or affiliate on the convicted vendor list, the hearing officer shall consider the following factors:

   1. Whether the person or affiliate committed a public entity crime.

   2. The nature and details of the public entity crime.

   3. The degree of culpability of the person or affiliate proposed to be placed on the convic- ted vendor list.

   4. Prompt or voluntary payment of any damages or penalty as a result of the conviction.

   5. Cooperation with state or federal investi- gation or prosecution of any public entity crime, provided that a good faith exercise of any constitutional, statutory, or other right during any portion of the investigation or prosecution of any public entity crime shall not be considered a lack of cooperation.

   6. Disassociation from any other persons or affiliates convicted of the public entity crime.

   7. Prior or future self-policing by the person or affiliate to prevent public entity crimes.

   8. Reinstatement or clemency in any jurisdic- tion in relation to the public entity crime

      at issue in the proceeding.

   9. Compliance by the person or affiliate with the notification provisions of paragraph (a)

      or paragraph (b).

   10. The needs of public entities for addi- tional competition in the procurement of good and services in their respective markets.

   11. Mitigation based upon any demonstration of good citizenship by the person or affiliate.

In this connection, the nature and details of the public entity crimes and the degree of culpability of the Petitioner proposed for placement on the Convicted Vendor List may be better understood by examining the exhibits referenced in the joint stipulation. This speaks to the factors set out in Section 287.133(3)(e)3.b. and c, Florida Statutes. The position of the parties concerning the needs of the public entities in Florida for additional competition in the procurement process for goods and services in respective markets, the factor in 287.133(3)(e)3.j, Florida Statutes, is addressed in the third paragraph to the joint motion to expedite.

In summary, having in mind the consensus between the parties concerning facts and law, it would not be in the public interest to place Petitioner on the Convicted Vendor List.

DONE AND ORDERED in Tallahassee, Leon County, Florida, this 18th day of October 1991.

CHARLES C. ADAMS

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 18th day of October 1991.

COPIES FURNISHED:

Ronald W. Thomas, Executive Director Department of General Services

Koger Executive Center 2737 Centerview Drive Knight Building, Suite 110

Tallahassee, Florida 32399-0950

Martha Harrell Hall, Esquire CARLTON, FIELDS, WARD, EMMANUEL,

SMITH & CUTLER, P.A.

Post Office Drawer 190 Tallahassee, Florida 32302

Susan B. Kirkland, Esquire Stephen S. Mathues, Esquire Department of General Services Koger Executive Center

2737 Centerview Drive

Tallahassee, Florida 32399-0950

NOTICE OF RIGHT TO JUDICIAL REVIEW

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW PURSUANT TO SECTION 120.68. FLORIDA STATUTES. REVIEW PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY, ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.

Docket for Case No: 91-006515CVL

Orders for Case No: 91-006515CVL