STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BOOZ-ALLEN and HAMILTON, INC., )

)

Petitioners, )

)

vs. ) Case No. 97-4422CVL

) DEPARTMENT OF MANAGEMENT SERVICES, )

)

Respondent. )

)

FINAL ORDER

This cause came on for consideration of the parties' Joint Stipulation and Settlement Agreement and request that a Final Order adopting the stipulation and settlement be entered by Diane Cleavinger, an Administrative Law Judge with the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Robin L. Shaffert, Esquire

Booz-Allen and Hamilton, Inc. 8283 Greensboro Drive

McLean, Virginia 22102

For Respondent: Terry A. Stepp, Esquire

Department of Management Services 4050 Esplanade Way, Suite 260

Tallahassee, Florida 32399-0950 STATEMENT OF ISSUES

Whether it is in the public interest to place Petitioners, Booz-Allen and Hamilton, Inc., on the State of Florida Convicted Vendor List maintained by Respondent, State of Florida Department

of Management Services (the Department) Section 287.133, Florida Statutes (Supp. 1996).

PRELIMINARY STATEMENT

On August 27, 1997, the Department noticed Petitioner that the Department had conducted an investigation pursuant to

Section 287.133, Florida Statutes, and determined that good cause existed to place Petitioner on the Convicted Vendor List. The Department notified Petitioner that it had the right, within 21 days of receipt of the notice, to petition for a formal hearing to determine whether it was in the public interest for Petitioner to be placed on the Convicted Vendor List.

On September 17, 1997, Petitioner filed a petition for formal administrative hearing with the Department to determine whether it was in the public interest for Petitioner to be placed on the Convicted Vendor List.

Prior to the scheduling of a final hearing, the parties entered into a Joint Stipulation and Settlement Agreement and requested that a final order disposing of the case be rendered based upon the stipulation and settlement agreement. The parties' request is granted.

FINDINGS OF FACT

1. The parties stipulated to the facts, as follows:

   
   

   1. On August 19, 1993, Petitioner was convicted of the commission of a public entity crime as defined within subsection 287.133(1)(g), Florida Statutes.

   2. Petitioner pled guilty in the U.S. District Court for the Middle District of North Carolina to two counts of filing false claims in violation of 18 U.S.C. section 287. The conviction related to time charging irregularities on two subcontracts to the United States Environmental Protection Agency.

      
      

   3. On February 25, 1994, Petitioner properly reported this conviction in its proposal to the Lee County Board of Commissioners.

      
      

   4. At the time the plea was entered, Petitioner paid to the United States

      $1,638,000. This included a $1,000,000 criminal fine, and $488,000 in civil damages, and $150,000 to reimburse EPA’s Office of the Inspector General for the costs of the investigation. The government estimated that the amount of improper charges was approximately $200,000.

      
      

   5. Petitioner’s cooperation with the EPA included voluntarily providing a wide array of information to EPA. Employees from Petitioner’s Finance and Contracts Department met with EPA investigators and auditors to explain Petitioner’s accounting system. Petitioner assisted EPA by making employees available for interviews. Petitioner voluntarily provided documents and other information to EPA.

      
      

   6. Petitioner fully cooperated with the Department of Management Services in connection with its investigation initiated pursuant to Section 287.133, Florida Statutes. Petitioner provided information as requested.

      
      

   7. No other persons or affiliates were charged with public entity crimes in relation to these matters.

      
      

   8. As a responsible government contractor, Petitioner has taken steps to prevent actions like those that formed the basis for its guilty plea from recurring. These steps and the ethical history of the company are listed

      in the stipulation and settlement agreement attached as Appendix A and are incorporated herein.

      
      

   9. Petitioner properly reported its plea to the Lee County Board of Commissioners and provided additional, extensive information concerning its guilty plea and related matters to the Respondent on April 5, 1994 and June 23, 1995.

      
      

   10. Petitioner’s presence in the market adds to competition in Florida markets for the transportation and consulting in solving state/public sector problems and in implementing their solutions.

       
       

   11. Petitioner’s commercial freight practice is the foremost management consultant to port authorities in the United States. Petitioner’s depth of knowledge and understanding of port operations, management, and planning have made Petitioner the consultant of choice to port authorities throughout the country. Specific projects are outlined in the stipulation and settlement agreement and are incorporated herein.

   12. In addition, Petitioner, due to its over

       80 years of experience in both public and private sector (including Florida), can provide a broad perspective on solving state/public sector problems and in implementing their solutions in areas including law enforcement, systems integration and health care.

       
       

   13. Petitioner has a long history of providing service to the communities in which it works. Again specific instances of community service are referenced in the stipulation and settlement agreement and are incorporated herein.

       CONCLUSIONS OF LAW

       
       

2. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Sections 120.57 and 287.133, Florida Statutes (Supp. 1996).

3. The parties have stipulated to facts as contemplated by Section 287.133(3)(e)2.f, Florida Statutes (Supp. 1996), and have stipulated to the legal outcome. Therefore, the case may be disposed of by informal means as contemplated by Section 120.57(4), Florida Statutes (Supp. 1996).

4. Petitioner is a person as defined in Section 287.133(1)(e), Florida Statutes (Supp. 1996), in that it is an entity organized under appropriate laws and with the legal power to enter into binding contracts with public entities in Florida. Section 287.133(1)(f), Florida Statutes (Supp. 1996).

5. Petitioner has committed public entity crimes as defined in Section 287.133(1)(g), Florida Statutes (Supp. 1996), as described in the stipulation and settlement agreement.

6. Petitioner has also satisfied mitigating factors contained in Section 287.133(3), Florida Statutes. The mitigating factors included prompt and voluntary payment of any damages or penalty as a result of the conviction, cooperation with state or federal investigation or prosecution of any public entity crime, disassociation from any other persons or affiliates convicted of the public entity crime, prior or future self- policing by the person or affiliate to prevent public entity

crimes, compliance by the person or affiliate with the notification requirements, the need by public entities for additional competition in their respective markets, and demonstration of good citizenship. Those mitigating factors raise a rebuttable presumption in Petitioner’s favor that it would not be in the public interest to place Petitioner on the Convicted Vendor List. The presumption was not rebutted by Respondent.

ORDER

It is, therefore,

ORDERED that Petitioner, Booz-Allen and Hamilton, Inc., not be placed on the Convicted Vendor List.

DONE AND ENTERED this 24th day of February, 1998, in Tallahassee, Leon County, Florida.

DIANE CLEAVINGER

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 24th day of February, 1998.

COPIES FURNISHED:

Robin L. Shaffert, Esquire Booz-Allen and Hamilton, Inc. 8283 Greensboro Drive

McLean, Virginia 22102

Terry A. Stepp, Esquire Department of Management Services 4050 Esplanade Way, Suite 260

Tallahassee, Florida 32399-0950

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

Tallahassee, Florida 32399-0950

Paul A. Rowell, Esquire Department of Management Services 4050 Esplanade Way

Tallahassee, Florida 32399-0950

Informational Copies:

George N. Meros, Jr., Esquire Michael E. Eiley, Esquire

106 East College Avenue, Suite 700 Post Office Box 10507

Tallahassee, Florida 32302

Richard L. Thobbins, Esquire 999 Peachtree Street, Northeast Atlanta, Georgia 30309-3996

NOTICE OF RIGHT TO APPEAL

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 the 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.

EXHIBIT A

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BOOZ ALLEN & HAMILTON INC.

Petitioner,

vs. CASE NO. 97-4422

STATE OF FLORIDA,DEPARTMENT OF MANAGEMENT SERVICES,

Respondent.

/

JOINT STIPULATION AND AGREED SETTLEMENT

The Petitioner, BOOZ ALLEN & HAMILTON INC.,("BOOZ ALLEN")

and the Respondent, State of Florida, Department of Management Services ("Department"), by their undersigned attorneys, enter into this agreed settlement permitting informal disposition pursuant to Sections 287.133(3)(e)2f and 120.57(3), Florida Statutes. The Joint Stipulation of Fact entered into by the parties is attached as Exhibit A and the parties stipulate that there is no material issue of fact remaining which would require a formal hearing.

The Joint Stipulation of Fact establishes that the Petitioner has satisfied mitigating elements contained in 287.133(3), Florida Statutes, including elements that raise a rebuttable presumption in favor of Petitioner, that it would not be in the public interest to place Petitioner on the Florida Convicted Vendors' List. There are no stipulated facts that overcome the rebuttable presumption.

Therefore, the parties agree to a disposition of this matter in which it is requested a Final Order be issued adopting the settlement agreement and Joint Stipulation of the parties pursuant to Sections 287.1 33(3)(e)2f and 120.57(3), Florida Statutes, and finding it is not in the public interest to place the Petitioner on the Florida Convicted Vendors' List. If the agreed settlement of the parties is not accepted, it is requested that the matter be submitted to a formal hearing under the procedures permitted by Section 287.133, Florida Statutes.

Respectively submitted this 20 day of November, 1997.

Robin L. Shaffert Associate General Counsel BOOZ ALLEN & HAMILTON INC.

8283 Greensboro Drive

McLean, VA 22102

(703) 902-5000

Attorney for Petitioner

Terry A. Stepp

Assistant General Counsel Office of the General Counsel 4050 Esplanade Way, Suite 260

Tallahassee, FL 32399-0950

(904) 487-1082

Attorney for Respondent

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BOOZ-ALLEN & HAMILTON INC.,

Petitioner,

vs. DOAH CASE NO. 97-4422

STATE OF FLORIDA DEPARTMENT OF MANAGEMENT SERVICES,

Respondent.

/

JOINT STIPULATION

The Petitioner, Booz-Allen & Hamilton Inc. ("Booz-Allen"), and the Respondent, Department of Management Services ("Department"), by their undersigned attorneys, enter into this joint stipulation and stipulate to the following facts:

1. On August 19, 1993, Booz-Allen was convicted of the commission of a public entity crime as defined within subsection 287.133(1)(g), Florida Statutes.

   
   

2. Booz-Allen pled guilty in the U.S. District Court for the Middle District of North Carolina to two counts of filing false claims in violation of 18 U.S.C. §287. The conviction related to time charging irregularities on two subcontracts to the United States Environmental Protection Agency. (See Exhibits

   A. B. C. D.)

   
   

3. On February 25, 1994, Booz-Allen properly reported this conviction in its proposal to the Lee County Board of Commissioners. (See Exhibit E.)

   
   

4. On August 27, 1997, the Department of Management Services issued a notice of intent pursuant to subparagraph 287.133(3)(e)1., Florida Statutes. (See Exhibit V)

   
   

5. On September 17, 1997, pursuant to subparagraph 287 133(3)(e)2, Florida Statutes. Booz-Allen timely filed a petition for formal administrative hearings pursuant to subsection 120.57(1), Florida Statutes, to determine whether it is in the public interest for Booz-Allen to be placed on the State of Florida Convicted Vendor List. (See Exhibit W)

   
   

6. 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.

   
   

7. Subsubparagraph 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.

   
   

8. At the time its plea was entered, Booz-Allen paid to the United States $1,638,000. This included a $1,000,000 criminal fine, $488,000 in civil damages, and $150,000 to reimburse EPA's Office of the Inspector General for the costs of the investigation. The government estimated that the amount of the improper changes was approximately $200,000. (See Exhibits B. F. G,)

   
   

9. Subsubparagraph 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.

   
   

10. Booz-Allen's cooperation with EPA included voluntarily providing a wide array of information to EPA. Employees from

    Booz-Allen's Finance and Contracts Department met with EPA investigators and auditors to explain Booz-Allen's accounting system. Booz-Allen assisted EPA by making employees available for interviews. Booz-Allen also voluntarily provided documents and other information to EPA. (See Exhibits F and G.)

    
    

11. Booz-Allen fully cooperated with the Department of Management Services in connection with its investigation initiated pursuant to section 287.133, Florida Statutes. Booz Allen provided information as requested. (Exhibits H and I.)

    
    

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

    
    

13. No other persons or affiliates were charged with public entity crimes in relation to these matters.

    
    

14. Subsubparagraph 287 133(3)(e)3 g, Florida Statutes, establishes "[plrior or future self-policing by the person or affiliate to prevent public entity crimes" as a mitigating factor.

    
    

15. As a responsible government contractor, Booz-Allen has taken steps to prevent actions like those that formed the basis for its guilty plea from recurring. Since the time of these incidents in the late 1980's, Booz-Allen has substantially augmented its government contracts compliance programs. So much so in fact, that in reliance on Booz-Allen's comprehensive compliance program the United States Environmental Protection Agency agreed not to suspend or debar Booz-Allen on the basis of the guilty plea. (See Exhibit J.)

    
    

16. Founded in 1914, Booz-Allen has always emphasized the importance of acting with the highest integrity in all operations of its business. In 1977, Booz-Allen first promulgated the "Green Book," which is the Firm's Statement of Professional Values, Policies, and Practices. The Green Book, now in its fifth edition, sets forth the Firm's commitment to the highest ethical standards in performance of all of its work, as well as its commitment to ethical treatment of its employees. (See Exhibit K.)

    
    

17. In 1987, the Firm formalized a supplemental ethics program for the Technology Center (now known as the Worldwide Technology Business ("WTB"), this part of the Firm performs virtually all of the Firm's U.S. government contracts) to ensure compliance with applicable Government contracting laws and regulations. Initially, the ethics program had three primary

    components. First, the Code of Ethics and Conduct for Government Business, the "Blue Book," was issued. The Blue Book addresses: Conflicts of Interest, Gifts and Gratuities, Proprietary Data, Role of Former Government Employees, and Time and Expense Reporting. The current edition of the Blue Book is attached as Exhibit L. Second, the Firm established a Business Ethics Review Committee. Third, employees received training on government contracts rules and regulations.

    
    

18. Booz-Allen has monitored and expanded its Ethics Program. In 1990, Booz-Allen revised its time charging policy and trained employees on that policy. Procurement Integrity Guidelines were issued to all employees in 1992. In 1992, Booz- Allen also revised and updated its Blue Book and instituted a floor-check program, sharing results with DCAA.

    
    

19. During 1993, Booz-Allen took significant measures to enhance its already comprehensive Government contracts compliance program. Booz-Allen expanded its Law Department and Regulatory Compliance Staff, and Booz-Allen formalized an internal Ethics Hotline. (See Exhibit M.) It enhanced the role of its Ethics Committee to include oversight of the internal Ethics Hotline and regular communication with employees on ethical issues. Samples of Ethics Committee communications are attached as Exhibit N. In coordination with DCAA, the Firm revised its time reporting policy and trained all Technology Center employees on that policy. The current time reporting policy is attached as Exhibit

1. This extensive effort included producing a new videotape featuring the Technology Center President and new training materials, which continue to be used to strengthen new hire ethics training. (See Exhibit P.) The Firm also expanded its floor-check program and committed to perform floor checks in two field offices each month. The Firm also committed to send (and has sent) periodic communications from the WTB President and the Ethics Committee to all employees reiterating the Firm's commitment to compliance with laws and regulation governing Government contracting. Sample communications from the WTB President are attached as Exhibit Q.

   1. Subsubparagraph 287.1 33(3)(e)3 i, Florida Statutes, establishes "[c]ompliance by the person or affiliate with the notification provisions of paragraph (a) or paragraph (b)" as a mitigating factor.

      
      

   2. Booz-Allen properly reported its plea to the Lee County Board of Commissioners and provided additional, extensive information concerning its guilty plea and related matters to the Florida Department of Management Services on April 5, 1994 and June 23, 1995. (See Exhibits E. H. I.)

   3. Subsubparagraph 287.133(3)(e)3.j., Florida Statutes, establishes "[t]he needs of public entities for additional competition in the procurement of goods and services in their respective markets" as a mitigating factor.

      
      

   4. Booz-Allen's presence in the market adds to competition in Florida markets for transportation and consulting in solving state public/sector problems and in implementing their solutions.

      
      

   5. Booz-Allen's commercial freight practice is the foremost management consultant to port authorities in the United States. Booz-Allen's depth of knowledge and understanding of port operations, management, and planning have made Booz-Allen the consultant of choice to port authorities throughout the country. Booz-Allen completed a study for the three Tampa Bay ports to identify areas in which they could work together cooperatively. Booz-Allen was selected by those three ports as they were of the opinion that no other consulting firm had the industry knowledge necessary to successfully undertake the effort. Booz-Allen developed a Strategic Plan and a Master Plan for the Tampa Bay Port Authority. Booz-Allen was selected for both of these assignments out of a competitive field of a number of consulting firms. Thus, Booz-Allen adds to the competitive field in Florida and provides an important consulting option for Florida clients. (See Exhibit R.)

      
      

   6. In addition, Booz-Allen, due to its over 80 years of experience in both the public and private sector (including Florida, can provide a broad perspective on solving state/public sector problems and in implementing their solutions in areas including law enforcement, systems integration and health care. (See Exhibit S.)

      
      

   7. Subsubparagraph 287 1 33(3)(e)3 k Florida Statutes, establishes "any demonstration of good citizenship" as a mitigating factor.

      
      

   8. Booz-Allen has a long history of providing service to the communities in which it works. Five years ago, Booz-Allen formalized a program to encourage volunteerism. Headed by Community Relations Director Kevin Casey, the community relations office oversees a vast array of service activities. Last year in WTB alone, over 2,000 volunteers supported 110 programs and activities sponsored by Booz-Allen. These programs include partnerships with schools and tutoring school children, sponsoring blood drives, and fundraising drives, and encouraging participation in fundraising walk-a-thong and runs. Booz-Allen also participates in Special Olympics and house renovation projects. One major fundraising drive that was completed in 1995 raised money for relief from Hurricane Opal. Booz-Allen

      employees raised almost $3,890, which the Firm matched for a total of almost $8,000. (See Exhibits T and U.)

      
      

   9. This joint stipulation provides a full and complete factual basis for determining whether Booz-Allen 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 of Management Services and Booz-Allen which would require a formal hearing.

Respectfully submitted this 20 day of November, 1997.

Robin L. Shaffert Associate General Counsel BOOZ ALLEN & HAMILTON INC.

8283 Greensboro Drive

McLean, VA 22102

(703) 902-5000(904) 487-1082

Attorney for Petitioner

Terry A. Stepp

Assistant General Counsel Office of the General Counsel 4050 Esplanade Way, Suite 260

Tallahassee, FL 32399-0950

Attorney for Respondent

Docket for Case No: 97-004422CVL

Orders for Case No: 97-004422CVL