STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF MANAGEMENT )

SERVICES, )

)

Petitioner, )

)

vs. ) CASE NOS. 94-1194CVL

) 94-1195CVL

UNITED STATES TESTING )

COMPANY, INC., )

)

and )

)

CRANE INSPECTION AND )

CERTIFICATION BUREAU, )

)

Respondents. )

)

FINAL ORDER

This case came before James W. York, a duly designated Hearing Officer of the Division of Administrative Hearings, after the parties waived their rights to a formal administrative hearing and submitted a stipulated record.

APPEARANCES

For Petitioner: Terry A. Stepp, Esquire

Department of Management Services Knight Building, Suite 312

2737 Centerview Drive, Suite 309

Tallahassee, Florida 32399-0950

For Respondents: R. Kennedy Bridwell, Esquire

Assistant General Counsel

United States Testing Company, Inc.

9 Campus Drive

Post Office Box 5490

Parsippany, New Jersey 07054-5490 STATEMENT OF THE ISSUES

Whether the Respondents should be placed on the convicted vendor list maintained by the Petitioner pursuant to Section 287.133, Florida Statutes.

PRELIMINARY STATEMENT

By letter dated February 10, 1994, the Department of Management Services (DMS), informed both United States Testing Company, Inc. and Crane Inspection and Certification Bureau that the Department had determined that good cause existed to place both entities on the State of Florida Convicted Vendor List.

On or about February 28, 1994, each entity filed a petition with DMS challenging

the Department's decision. These petitions were filed with the Division of Administrative Hearings by letter dated March 4, 1994, from DMS requesting the assignment of a Hearing Officer to conduct a hearing pursuant to Section 120.57(1), Florida Statutes.

On March 4, 1994, the undersigned issued Initial Orders requesting that the parties provide information regarding the length of time necessary, the location, and suggested dates for a final hearing in this cause.

On March 15, 1994, the parties filed Joint Responses to the Initial Orders in which the parties requested that disposition of these cases be rendered based upon stipulated facts and, since the essential stipulated facts in each case are identical, that the cases be consolidated for the purpose of decision.

Pursuant to the Joint Responses to the Initial Orders, these cases have been consolidated, the parties have waived any right to a formal hearing, and the parties have agreed to the disposition of this matter on certain facts stipulated to in the Joint Stipulations filed with the Division of Administrative Hearings on March 15, 1994.

The facts contained in the Joint Stipulations have been agreed upon by the parties and are incorporated and accepted in this Final Order. The parties also stipulated the admission into evidence of certain exhibits which are hereby accepted.

On March 22, 1994, an order granting the request that disposition be rendered based upon stipulated facts and consolidating these cases was entered. The parties were informed that this Final Order would be rendered within thirty days of the order of March 22, 1994, and that the parties could file proposed final orders by no later than March 31, 1994, at 5:00 p.m. No proposed final orders have been filed.

The petitions in this cause were filed by United States Testing Company, Inc. (USTC), and crane Inspection and Certification Bureau (CICB), respectively. Since, by operation of Section 287.133, Florida Statutes, the DMS has the burden of proof, the Department is the Petitioner and USTC and CICB are the Respondents.

FINDINGS OF FACT

The following findings of fact, stipulated to by the parties (and edited by the undersigned where appropriate to reflect that the facts are common to both Respondents), are hereby accepted:

1. USTC is incorporated under the laws of New York State and has its principal place of business at 1415 Park Avenue, Hoboken, New Jersey. It performs testing and inspection services in most of the states in the continental United States.

   
   

2. USTC is registered and qualified to do business in the State of Florida. The primary activities of USTC in the State of Florida are crane training, inspection and certification services, project inspections, quality control, and non- destructive testing inspection performed for utility and petrochemical companies.

   
   

3. USTC (trade name) business in Florida is conducted under several trade names including:

   1. Crane Inspection & Certification Bureau

   2. R&T Supply Company

   3. SGS Industrial Services

      
      

4. USTC's wholly owned subsidiaries, all of which have or may in the future conduct business in the State of Florida, are:

   
   

   1. Instrument Marketing Services, Inc.

   2. Nationwide Consumer Testing Institute, Inc.

   3. Qualitiest, Inc.

      
      

5. Examples of Florida public entities for whom USTC has rendered services

   are:

   
   

   1. Brevard County Maintenance Department

   2. City of Lakeland

   3. Florida Department of Transportation

   4. Orlando Utilities Company [sic]

   5. Orange County

   6. Port Everglades Port Authority

   7. Tampa Port Authority

   
   

   USTC has a large number of commercial customers who also do business with Florida public entities.

   
   

6. In addition to its wholly owned subsidiaries, affiliates of USTC in the United States include the following corporations which are not controlled by USTC, and were not involved with the events leading to the criminal conviction of USTC:

   
   

   1. CH&A Corporation

   2. Commercial Testing & Engineering Co.

   3. GAB Business Services, Inc.

   4. INS Investigation Bureau, Inc.

   5. Intermodal Transportation Services, Inc.

   6. SGS Control Services, Inc.

   7. SGS Government Programs, Inc.

   8. SGS International Certification Services, Inc.

   9. SGS North America, Inc.

   
   

   The affiliates have or may in the future do business with Florida public entities or with commercial customers who do business with Florida public entities.

   
   

7. Crane Inspection and Certification Bureau, located at 5874 South Semoran Boulevard, Orlando, Florida 32812, is a Division of USTC owned 100 percent by USTC.

   
   

   1. CICB inspects cranes for a variety of city, county, and state authorities in Florida. Inspection services are performed on an on call basis and pursuant to award of competitive contracts.

      
      

   2. CICB conducts crane safety training programs for State of Florida, local, county, and state employees.

8. On April 17, 1991, USTC was convicted of the commission of a public entity crime as defined within subparagraph 287.133(1)(g), Florida Statutes. Exhibit A

   
   

   1. Pursuant to the Plea Agreement and Information attached as Exhibits B and C, USTC pled guilty in United States District Court for the District of New Jersey to one count of making false statements to a federal official in violation of 18 U.S.C. s. 1001.

      
      

   2. On July 9, 1992, Mr. Richard Posner a former Vice President of USTC, was convicted of a public entity crime as defined within subparagraph 287.133(1)(g), Florida Statutes, pursuant to an Information and Plea agreement.

      Exhibits D, E, F

      
      

   3. Mr. Posner pled guilty in United States District Court for the District of New Jersey to one felony count of making false statements to a federal official in violation of 18 U.S.C. s. 1001. The conviction of Mr. Posner was derived from the same investigation that resulted in the conviction of USTC.

      
      

   4. Mr. Posner entered into an agreement effective upon his conviction, with the U.S. Environmental Protection Agency, which barred him for life from Federal Contracting activities. Exhibit G

      
      

   5. Mr. Posner was placed on the Florida Convicted Vendor List, by Florida Department of Management Services Order dated May 17, 1993. Exhibit H

      
      

   6. U.S. Testing, Inc. was suspended from Federal contracting by the

   U.S. Environmental Protection Agency on April 24, 1990. The suspension was removed April 4, 1991. Exhibit I

   
   

9. Pursuant to subparagraphs 287.133(3)(a) and (b), Florida Statutes, USTC made timely notification to DMS and provided details of the convictions.

   Exhibit J

   
   

10. On February 10, 1994, DMS issued a notice of intent pursuant to subparagraph 287.122(3)(e)1, Florida Statutes. Exhibit K

    
    

11. On February 28, 1994, pursuant to subparagraph 287.133(3)(e)2, Florida Statutes, USTC and CICB timely filed petitions for formal administrative hearing pursuant to subparagraph 120.57(1), Florida Statutes, to determine whether it is in the public interest for USTC and/or CICB to be placed on the State of Florida Convicted Vendor List. Exhibit L

    
    

12. Subparagraph 287.133(3)(e)3, Florida Statutes, establishes factors which, if applicable to a convicted vendor, will mitigate against placement of that vendor upon the convicted vendor list.

    
    

13. Subparagraph 287.133(3)(e)3d, Florida Statutes, established "[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.

    
    

    1. Pursuant to its Plea Agreement, USTC has made restitution to the federal government of all amounts it received under two federal Environmental Protection Agency (EPA) contracts totaling $913,717.74. Exhibit M

    2. USTC also paid a fine in the amount of $100,000 and contributed

    $200 to the crime victims' reimbursement fund. Exhibit M

    
    

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

    
    

    (a) In open court the Assistant United States Attorney for the District of New Jersey informed the Court of the cooperation of USTC with the federal investigation. Furthermore, the Assistant United States Attorney wrote to the EPA advising it of the cooperation of USTC. Exhibit I, pp. 18-19

    
    

15. USTC fully cooperated with DMS in connection with its investigation initiated pursuant to Section 287.133, Florida Statutes.

    
    

16. Subparagraph 287.133(3)(e)3f, Florida Statutes, establishes "[d]isassociation from any other persons or affiliates convicted of the public entity crime" as a mitigating factor.

    
    

    1. On July 9, 1992, Richard Posner, former Vice President of the Chemical Services Division of USTC was also convicted in United States District Court for the District of New Jersey on one count of making false statements to a federal official in violation of 18 U.S.C. s. 1001 in connection with events related to the conviction of USTC. See Exhibit D

       
       

    2. Mr. Posner is the only person thus far charged or convicted of any crimes pertaining to the conviction of USTC. Mr. Posner left the employment of USTC in 1989, before the EPA investigation of USTC commenced.

    
    

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

    
    

    (a) USTC has instituted a corporate Code of Business Conduct, a corporate responsibility program and taken other steps to prevent a recurrence of the events resulting in its conviction. Those steps were reviewed in administrative proceedings hereinafter described, and were contributing factors to the decisions therein.

    
    

18. Subparagraph 287.133(3)(e)3h, 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.

    
    

    1. On April 23, 1991, the EPA lifted the administrative suspension of USTC. It is now under no constraints whatsoever as a federal contractor.

       See Exhibit I

       
       

    2. In December 1991, after an administrative proceeding, the City of New York lifted a debarment from contracting with City agencies which had been imposed because of the EPA suspension. USTC is now under no constraints whatsoever as a contractor with agencies of the City of New York. Exhibit O

    
    

19. Subparagraph 287.133(3)(e)3i, Florida Statutes, established "[c]ompliance by the person or affiliate with the notification provisions of paragraph (a) or paragraph (b)" as a mitigating factor. Exhibits J, P

20. This joint stipulation provides a full and complete factual basis for determining whether USTC and/or CICB should be placed on the convicted vendor list.

    
    

    CONCLUSIONS OF LAW

    
    

    Jurisdiction

    
    

21. The Division of Administrative Hearings has jurisdiction of the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes (1993).

    
    

    Burden of Proof

    
    

22. The burden of proof, absent a statutory directive to the contrary, is on the party asserting the affirmative of the issue of the proceeding. Antel v. Department of Professional Regulation, 522 So.2d 1056 (Fla. 5th DCA 1988); Department of Transportation v. J.W.C. Co., Inc., 396 So.2d 778 (Fla. 1st DCA 1981); and Balino v. Department of Health and Rehabilitative Services, 348 So.2d

    249 (Fla. 1st DCA 1977).

    
    

23. In this proceeding it is DMS that is asserting the affirmative: that it is "in the public interest" to place the Respondents on the convicted vendor list. See Section 287.133(3)(e)4, Florida Statutes.

    
    

    The Convicted Vendor List

    
    

24. Sections 287.132 and 287.133, Florida Statutes, authorize the Department to investigate and determine whether persons transacting business with public entities have been convicted of certain crimes and, if so, whether it would be "in the public interest" to place such persons on a "convicted vendor list." Any person placed on the convicted vendor list is prohibited from transacting business with public entities in Florida.

    
    

25. Section 287.133(3)(e)4, Florida Statutes, governs whether a person should be placed on the convicted vendor list and provides as follows:

    
    

    4. 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 employ- ment 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 in- terest 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 af- filiate shall not be placed on the convicted vendor list.

    
    

26. USTC, as a corporate entity, and CICB, as a division of USTC, owned

    100 percent by USTC, are persons for the purpose of Section 287.13, Florida Statutes. USTC has been "convicted" of a "public entity crime." See Sections 287.133(1)(b) and (g), Florida Statutes, and paragraphs 1-2 and 7 and 8 of the Joint Stipulations.

    
    

27. The parties have stipulated to facts concerning the factors to be considered pursuant to Section 287.133(3)(e), Florida Statutes, which mitigate against placing Respondents on the convicted vendor list.

    
    

28. The parties have stipulated to facts that indicate "[p]rompt payment of damages or posting of a bond, cooperation with investigation, the termination of the employment or other relationship with the employee or other natural person responsible for the public entity crime, prior or future self policing by USTC to prevent public entity crimes, and reinstatement of clemency in a jurisdiction in relation to the public entity crime at issue . . ." Therefore, pursuant to Section 287.133(3)(e)4, Florida Statutes, the parties have stipulated to facts which "create a rebuttable presumption that it is not in the public interest to place [Respondents] on the convicted vendor list."

    
    

29. DMS has not suggested that proof exists sufficient to overcome the rebuttable presumption that Respondents should not be placed on the convicted vendor list. DMS has, therefore, failed to prove that it would be in the public interest to place Respondents on the Florida convicted vendor list.

ORDER

Based upon the foregoing Findings of Fact and Conclusions of Law, it is ORDERED that the Department of Management Services has failed to prove that

Respondents should be placed on the Florida convicted vendor list.

DONE and ORDERED this 4th day of April, 1994, at Tallahassee, Florida.

JAMES W. YORK, 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 4th day of April, 1994.

COPIES FURNISHED:

Terry A. Stepp, Esquire Department of Management Services Knight Building, Suite 312

2737 Centerview Drive, Suite 309

Tallahassee, Florida 32399-0950

R. Kennedy Bridwell, Esquire Assistant General Counsel

United States Testing Company, Inc.

9 Campus Drive

Post Office Box 5490

Parsippany, New Jersey 07054-5490

William H. Lindner, Secretary Department of Management Services Knight Building, Suite 307

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: 94-001194CVL

Orders for Case No: 94-001194CVL