STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FISHER SCIENTIFIC COMPANY, )

)

Petitioner, )

)

vs. ) Case No. 97-5259CVL

) DEPARTMENT OF MANAGEMENT SERVICES, )

)

Respondent. )

)

FINAL ORDER

This matter came before Stuart M. Lerner, a duly designated Administrative Law Judge of the Division of Administrative Hearings (Division), after the parties submitted to the Division a Joint Stipulation and Agreed Upon Settlement that incorporated a waiver of their right to a Section 120.57(1) hearing.

APPEARANCES

For Petitioner: James J. Brink, Esquire

Litigation Manager

Fisher Scientific Company 2000 Park Land Drive

Pittsburgh, Pennsylvania 15275

For Respondent: Terry A. Stepp, Esquire

Assistant General Counsel Department of Management Services 4050 Esplanade Way, Suite 260

Tallahassee, Florida 32399-0950

STATEMENT OF THE ISSUE

Whether Petitioner should be placed on the convicted vendor list.

PRELIMINARY STATEMENT

On October 3, 1997, the Department of Management Services (Department) issued a notice of intent to place Fisher Scientific Company (FSC) on the convicted vendor list so as to disqualify FSC from conducting business with the State of Florida. FSC filed a Petition for Formal Administrative Hearing requesting a Section 120.57(1) hearing on the Department's proposed action on October 16, 1997.

On November 6, 1997, the parties executed a Joint Stipulation and Agreed Upon Settlement (settlement document). The settlement document contains, among other things, stipulated facts. Furthermore, there are exhibits attached to and incorporated in the settlement document. FSC's Petition for Formal Administrative Hearing and the parties’ settlement

document (with attachments) were forwarded to the Division. They were received by the Division on November 7, 1997. The purpose of this Final Order is to adopt the settlement document as required by Section 287.133(3)(e)2.f., Florida Statutes.

FINDINGS OF FACT

1. As noted above in the Preliminary Statement, the parties have entered into a settlement document.

2. The settlement document provides as follows:

   
   

   The Petitioner, Fisher Scientific and the Respondent, State of Florida, Department of Management Services ("Department"), by their undersigned attorneys, enter into this agreed upon 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 Vendor's List. There are no stipulated facts that overcome the rebuttable presumption.

   
   

   THEREFORE, the parties agree to 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 287.133(3)(e)2f and 120.57(3), Florida Statutes, and finding that it is not in the public interest to place the Petitioner on the Florida Convicted Vendors List.

3. Paragraphs 1, 2, and 10 through 21 of the Joint Stipulation of Facts appended to and incorporated in the settlement document provide as follows:

   1. On June 10, 1994, FSC was convicted of the commission of a public entity crime as defined within subsection 287.133(1)(g), Florida Statutes.

      
      

   2. FSC entered a guilty plea to one count of a misdemeanor Information charging FSC with making a false writing in violation of 18

      U.S.C.A. Sections 1018 and 2. A copy of the Information is attached as Exhibit 1. The entry of the guilty pleas by FSC was made pursuant to a Plea Agreement with the United States Attorney for the District of New Jersey dated March 10, 1994. A copy of the plea agreement is attached as

      Exhibit 2. . . .

      1. Pursuant to Paragraphs 287.133(3)(a) and (b), Florida Statutes, FSC made timely notification to the Department of Management Services and provided details of the misdemeanor conviction.

         
         

      2. On October 3, 1997, the Department of Management Services issued a notice of intent pursuant to subparagraph 287.133(3)(e)1. Florida Statutes. Exhibit 6.

         
         

      3. On October 16, 1997 pursuant to subparagraph 287.133(3)(e)2., Florida Statutes, FSC 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 FSC to be placed on the State of Florida Convicted Vendor List. Exhibit 7.

         
         

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

         
         

      5. 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.

         
         

         (a) In March, 1994, FSC paid restitution to the U.S. Agency for International Development (AID) in the amount of $1,200,000. FSC also reimbursed AID for the cost of its investigation in the amount of $500,000. FSC paid these amounts prior to the entry of its conviction order, a copy of which is attached as Exhibit 3. On July 8, 1994, FSC paid a criminal fine in the amount of $20,000.

         
         

      6. 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.

         (a) FSC cooperated fully and immediately with the federal authorities investigating the performance of FSC's International Division relating to certain contracts FSC entered into with foreign organizations to supply laboratory products. Payments for such products sold to foreign organizations were made to FSC by AID pursuant to various federal statutes and programs. A summary of FSC's cooperation is detailed in a letter dated May 24, 1994, to Ms. Beth Nuegass, Senior U.S. Probation officer, a copy of which is attached as Exhibit 4.

         
         

      7. FSC fully cooperated with the Department of Management Services in connection with its investigation initiated pursuant to section 287.133, Florida Statutes.

         
         

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

         
         

         1. The individual primarily responsible for the illegal conduct resulting in FSC's conviction, John Sommer, left FSC to join FSC's competitor several days prior to the commencement of AID's investigation. Several of Sommer's subordinates who shared his culpability also left at this time.

            
            

         2. The employees who may have been peripherally involved with Sommer and who remained employed with FSC were disciplined.

            
            

         3. FSC also changed the organization structure of the International Division subsequent to its conviction. FSII, FSC's parent company, established Fisher Scientific Worldwide Inc., as the new wholly owned subsidiary responsible for managing FSC's international business. Accordingly, the entity "Fisher Scientific Company" which now conducts business with state agencies and political subdivisions in Florida is separate from the unit which conducts business with the U.S. Agency for International Development.

      9. Subparagraph 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. FSC engaged in self-policing in three respects:

         
         

         1. In 1990, FSC retained the law firm of Wilmer, Cutler & Pickering as a special counsel to conduct a through investigation and provide the results to AID and the U.S. Attorney.

            
            

         2. After 1990, FSC provided additional education and training to its International Division in compliance with the country of origin requirements of AID.

            
            

         3. FSC has promulgated and reinforced with training, a Code of Business Conduct which addresses unethical and fraudulent conduct by employees, including requirements of government contracting. Exhibit 8.

         
         

      10. Subparagraph 287.133(3)(e)3.g., 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.

          
          

          (a) Attached as Exhibit 5 is a letter from Mr. Robert S. Perkins, Counsel to the Inspector General of AID, to FSC's counsel stating that no further action was taken by AID in order to suspend or debar FSC from contracting with AID or any other federal agency.

          
          

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

          
          

          1. FSC has acted as the prime supplier of laboratory products to the University of Florida and the State of Florida since 1990. FSC's satisfactory performance of these contracts has enabled various public

             laboratories throughout Florida to perform essential functions, standardizing in many instances, products available only through FSC.

             
             

          2. In addition, the merger of Curtin Matheson Scientific, Inc. and FSC in June, 1990, brought numerous contracts to FSC to provide clinical laboratory products to public hospitals and other institutions in Florida.

             
             

          3. Action preventing FSC from bidding on the requirements for laboratory products of these various state and political subdivisions laboratories would materially reduce the competition in procurement and reduce the scope of products and services available to such laboratories.

          
          

      12. This joint stipulation provides a full and complete factual basis for determining whether FSC should be placed on the Convicted Vendor List. In light of the facts and the criteria set forth in subparagraph 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 FSC which would require a formal hearing.

4. The parties’ settlement document constitutes an informal disposition of all issues in this proceeding.

   CONCLUSIONS OF LAW

   
   

5. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties hereto pursuant to Chapters 120 and 287, Florida Statutes.

6. Section 120.57(4), Florida Statutes, provides as follows:

   (4) INFORMAL DISPOSITION.- Unless precluded by law, informal disposition may be made of

   any proceeding by stipulation, agreed settlement, or consent order.

   
   

7. Section 287.133(3)(e)2.f., Florida Statutes, provides as follows:

   At any time after the filing of the petition, informal disposition may be made pursuant to s.120.57(4). In that event, the administrative law judge shall enter a final order adopting the stipulation, agreed settlement, or consent order.

   
   

   (Emphasis added.)

   
   

8. Where, as here, the parties have informally disposed of all issues by entering into an agreed settlement, the mandatory nature of the statutory language underscored above does not appear to authorize the administrative law judge to exercise any discretion. Rather, the statute requires entry of “a final order adopting the stipulation, agreed settlement, or consent order.”

Consistent with the underscored mandate of Section 287.133(3)(e)2.f., it is hereby ORDERED:

That the Agreed Settlement of the parties is adopted, and the Petitioners shall not be placed on the convicted vendor list.

DONE AND ORDERED this 25th day of November, 1997, in Tallahassee, Leon County, Florida.

STUART M. LERNER

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(904) 488-9675 SUNCOM 278-9675

Fax Filing (904) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 25th day of November, 1997.

COPIES FURNISHED:

James J. Brink, Esquire Litigation Manager

Fisher Scientific Company 2000 Park Land Drive Pittsburgh, PA 15275

Terry A. Stepp, Esquire Assistant General Counsel

Department of Management Services 4050 Esplanade Way, Suite 260

Tallahassee, Florida 32399-0950

Paul A. Rowell, Esquire Department of Management Services 4050 Esplanade Way, Suite 260

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

Any 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 a 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 district where the party resides. The notice of appeal must be filed within thirty days of rendition of the order to be reviewed.

Docket for Case No: 97-005259CVL

Orders for Case No: 97-005259CVL