STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

M & B PRODUCTS, INC. and DALE ) McCLELLAN, )

)

Petitioners, )

)

vs. ) CASE NO. 95-5029CVL

) DEPARTMENT OF MANAGEMENT SERVICES, )

)

Respondent. )

)

FINAL ORDER

On October 10, 1995, Petitioners, M & B Products, Inc. and Dale McClellan, filed a Petition for Formal Administrative Hearing. The Petition and a Joint Stipulation were subsequently filed with the Division of Administrative Hearings. As the parties agreed there were no disputed issues of material fact, disposition of the cause shall be rendered based upon the stipulated facts without a formal hearing.

FINDINGS OF FACT

1. On June 19, 1991, Dale McClellan was convicted of a one count violation of the Sherman Anti-Trust Act for conduct that occurred on or before August 8, 1986.

   
   

2. Dale McClellan's conviction arose out of an investigation initiated by the Florida Attorney General in 1987 into possible bid rigging of school requirements contracts in Florida by thirteen dairies and distributors. In 1988, the Attorney General filed a civil action against these 13 dairies and distributors.

   
   

3. In 1987, the United States Attorney General began an investigation into the same conduct pursuant to the Sherman Anti-Trust Act.

   
   

4. Pursuant to paragraphs 287.133(3)(a) and (b), Florida Statutes, M & B Products, Inc. and Dale McClellan made timely notification to the Department of Management Services (DMS) and provided details of the convictions.

   
   

5. On September 6, 1995, DMS issued a notice of intent pursuant to Subparagraph 287.133(3)(e)1., Florida Statutes.

   
   

6. On September 29, 1995, pursuant to Subparagraph 287.133(3)(e)2., Florida Statutes, M & B Products, Inc. and Dale McClellan 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 M & B Products, Inc. and Dale McClellan to be placed on the State of Florida Convicted Vendor List.

7. 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.

   
   

8. Section 287.133(3)(e)3.e., Florida Statutes, establishes "cooperation with a State or Federal investigation into a public entity case as a mitigating factor against placement on the convicted vendor list."

   
   

9. Dale McClellan was notified of an Investigative Demand by the Attorney General's Office in 1987. On December 14, 1987, Phillip Hall, Esquire, a representative of the Attorney General, State of Florida, reviewed records of two companies operated by Dale McClellan. These records were voluntarily produced by Mr. McClellan.

   
   

10. Subsequent to Phillip Hall reviewing business records of Dale McClellan, copies of a portion of said records were voluntarily provided to the Florida Attorney General's Office.

    
    

11. Dale McClellan met with representatives of the Attorney General's Office in January of 1988 and gave a statement in cooperation of their investigation, to Richard Arnold, Esquire, and Assistant Attorney General Jerome Hoffman.

    
    

12. In November 1987, Dale McClellan cooperated with the Federal Grand Jury in Atlanta, Georgia, producing ten (10) boxes of records in response to a subpoena directed at his business.

    
    

13. In March 1991, prior to his conviction in Federal Court, Dale McClellan cooperated with Federal Prosecutors at a meeting arranged by them in Atlanta, Georgia.

    
    

14. Section 287.133(3)(e)3.d., Florida Statutes, provides prompt payment of any damages or penalty as the result of the conviction as a mitigating factor against placement on the convicted vendor list.

    
    

15. Dale McClellan paid a penalty of $2,500.00 imposed by Judge William Castagna, on June 19, 1991.

    
    

16. Section 287.133(3)(e)3.e., Florida Statutes, establishes the nature and details of the public entity crime as a mitigatory factor.

    
    

17. Dale McClellan's violation consisted of supplying milk to 11 schools in Hillsborough County, Florida, through his company, M & B Dairy. Dale McClellan in the 1985-86 school year supplied 210 cases of half-pint milk cartons per day at a gross profit of less than one cent per carton. M & B Dairy went out of business in 1988. Pet, Inc., Southland Corporation, Borden, Inc. and Land-O-Sun Dairies, Inc., defendants in the federal court case (each convicted and fined several million dollars, sold tens of millions of dollars worth of milk to schools and federal government installations. Dale McClellan's involvement, in comparison, was very minor.

    
    

18. Section 287.133(e)(e)3.e., Florida Statutes, establishes disassociation from other persons or affiliates convicted of public entity crimes as a mitigating factor in determining whether to place a person or entity on the convicted vendor list.

19. Dale McClellan has not associated with any person convicted of a public entity crime.

    
    

20. Section 287.133(3)(e)e.g., Florida Statutes, establishes self policing by the person to prevent public entity crimes as a mitigating factor in determining whether to place a person or entity on the convicted vendor list.

    
    

21. M & B Products, Inc. has instituted policies that prohibit any employee from discussing, even casually, the bidding on or bidding strategies concerning school requirements contracts.

    
    

22. In addition, Dale McClellan has resigned as an officer in M & B Products, Inc.

    
    

23. Section 287.133(3)(e)e.j., Florida Statutes, states that the need of public entities for additional competition in the procurement of goods and services in their respective markets is a mitigating factor in determining whether to place a person on the convicted vendor list.

    
    

24. Since the conclusion of the State and Federal investigation, many suppliers and distributors have discontinued business and there is a great need for competition in this area. M & B Products, Inc. is a significant factor in providing such competition and has helped lower prices in the areas where it supplies his product.

    
    

25. Section 287.133(3)(e)3.e., Florida Statutes, establishes good citizenship as a mitigating factor, in determining whether to place a person on the convicted vendor list.

    
    

26. In May 1991, Dale McClellan received a Certificate of Recognition from the Hillsborough County Sheriff's Office for his support of law enforcement and crime prevention.

    
    

27. Dale McClellan has assisted persons addicted to alcohol by helping through a church sponsored Alcoholics Anonymous program, and helped found "301 House," an AA program in East Hillsborough County. He is still active in helping and counselling alcoholics.

    
    

    CONCLUSIONS OF LAW

    
    

28. The Division of Administrative Hearings has jurisdiction of the subject matter of and the parties to this case, pursuant to Section 120.57, Florida Statutes.

    
    

29. DMS is required by Section 287.133, Florida Statutes, to conduct investigations regarding public entity crimes. Dale McClellan committed a public entity crime as defined in Section 287.133, Florida Statutes. DMS completed an investigation of the public entity crime pursuant to this statute.

    
    

30. Chapter 287.133, Florida Statutes, requires that DMS place a vendor, convicted of a public entity crime, on the convicted vendors list unless the company has complied with the statutory mitigating factors. Placement on the convicted vendor's list forbids the company from doing business with the state.

    
    

31. M & B Products and Dale McClellan have complied with the mitigating factors. It is not in the public interest to place M & B Products and Dale McClellan on the convicted vendor list.

ORDER

Based upon the foregoing Findings of Fact and Conclusions of Law, it is ORDERED:

1. That the petition shall be granted and the Department of Management Services shall not place M & B Products or Dale McClellan on the convicted vendors' list.

   
   

2. That the file in this case is closed.

DONE and ORDERED this 7th day of November, 1995, in 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 7th day of November, 1995.

COPIES FURNISHED:

Walter O. Hobbs, Esquire Post Office Box 18225 Tampa, Florida 33679

Joan Van Arsdall, Esquire Staff Attorney

Department of Management Services 4050 Esplanade Way

Tallahassee, Florida 32399-0950

William H. Lindner, Secretary Department of Management Services 4050 Esplanade Way

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: 95-005029CVL

Orders for Case No: 95-005029CVL