The Issue The issues for determination are: (1) Whether Respondent, David M. Whitehead, a member of Escambia County Commission, violated Section 112.313(7)(a), Florida Statutes, by having or holding an employment or contractual relationship with B & W Productions of Pensacola, Inc. (B & W Productions) which created a continuing or frequently recurring conflict between his private interests and the performance of his public duties or which impeded the full and faithful discharge of his public duties; whether Respondent violated Section 112.3143(3)(a), Florida Statutes, by voting on measures that came before the Escambia County Commission regarding Carlan Killam Consulting Group, Inc. (Carlan Killam Consulting or Carlan Killam), Baskerville-Donovan, Inc. (Baskerville-Donovan), DelGallo-Morette Construction Company (DelGallo-Morette), and/or Champion International Corporation (Champion), all of whom were sponsors of a television show hosted by Respondent; and (3) if so, what penalty is appropriate.
Findings Of Fact Respondent, David M. Whitehead (Respondent), currently serves as county commissioner for Escambia County, Florida, and has continuously served in that capacity since taking office after his election in 1992. As a county commissioner for Escambia County, Respondent is subject to the requirements of Part III, Chapter 112, Florida Statutes, the Code of Ethics for Public Officers and Employees (Code of Ethics), and is a "public officer" as that term is defined in Sections 112.313(1) and 112.3143(1)(a), Florida Statutes. As a county commissioner for Escambia County, Respondent is subject to the provisions of Sections 112.313(7)(a) and 112.3143(3)(a), Florida Statutes. Respondent formed B & W Productions, a Subchapter S, for-profit corporation, for the purpose of producing a morning television show that was to be known as the "Lois and Mike Show" or the "Wake-Up with Lois and Mike Show" (the "Lois and Mike Show"). Respondent is "Mike" on the Lois and Mike Show and co- hosts the show with Lois Benson. B & W Productions was incorporated to shield the personal assets of Respondent and Benson in case of liability. B & W Productions was organized under the laws of the State of Florida, effective June 17, 1998. B & W Productions was active from June 17, 1998, through September 23, 1999. On September 24, 1999, B & W Productions was administratively dissolved for failure to file its annual report, as required by law. During its corporate existence, B & W Productions maintained a corporate bank account at SunTrust Bank, West Florida; produced periodic profit and loss statements of its activities; applied for a federal tax identification number as a Subchapter S corporation; filed a corporate tax return with the Internal Revenue Service; and entered into sponsorship agreements with specific sponsors of the Lois and Mike Show. However, during its corporate existence, the corporation failed to conduct meetings of its shareholders, to take minutes, and to file its annual report. Respondent served as chief executive officer of B & W Productions until approximately March of 1999. In March 1999, after Respondent stepped down as CEO, Benson took over the books and management of B & W Productions. Thereafter, Respondent was not involved in the active management of B & W Productions. In November of 1999, Respondent transferred to Benson "all ownership rights, rights to compensation in any form, and right to any benefits, accrued or accruing in the future, with regard to B & W Productions, Inc., and "Wake Up with Lois and Mike . . . ." Respondent transferred complete ownership of B & W Productions to Benson, free and clear of any obligation for repayment. The Lois and Mike Show began airing on a local cable station in Pensacola known as "BLAB TV" in September of 1998. Respondent and Benson have received no compensation for their efforts in connection with the Lois and Mike Show. Since the Lois and Mike Show first aired, over 200 guests, all local people, have appeared on the show. Daily rundowns of the show for the calendar year 1999 evidence a program highlighting local community events and personal information presented by local residents consistent with a weekly theme developed by Benson. As a political figure, Respondent receives an incidental benefit of appearing as local personality on the Lois and Mike Show. However, the show is not a political show. Rather, consistent with its mission, the show entertains and informs its audience on issues specific to the Pensacola area, highlighting local news and issues, local events, and local people. BLAB TV requires the payment of $1,250.00 for each week that the Lois and Mike Show is aired. Other costs incurred in the production of the show included contract labor and outside production companies used to produce a portion of the show. The primary source of income to pay for the Lois and Mike Show is money paid by sponsors or supporters of the Lois and Mike Show. Using a public broadcasting system model, Benson developed a market plan to secure sponsors for the Lois and Mike Show. The plan proposed different tiers of sponsorship: segment sponsors; traditional commercial sponsors; and friends and benefactors. Benson developed lists of potential sponsors which included a wide range of businesses in the Pensacola area. These businesses included but were not limited to Baskerville-Donovan, DelGallo-Morette and Champion. Various potential sponsors including Baskerville-Donovan, DelGallo-Morette and Champion, were targeted for a personal solicitation from either Benson and/or Respondent. Initially, B & W Productions was responsible for billing and collecting sponsorship fees. However, in December 1998, three months after the show was first aired, responsibility for billing and collection of sponsorship fees was assumed by BLAB TV. Since BLAB TV took over these responsibilities, all sponsors of the Lois and Mike Show are billed directly by BLAB TV. Both Respondent and Benson personally paid a portion of the costs for the airing and production of the Lois and Mike Show. Respondent paid approximately $16,000.00 of his personal funds for the production of the Lois and Mike Show. Benson expended approximately $30,000 of her personal funds for the production of the show. These payments have at various times been characterized as loans and capital contributions. In March of 1999, Respondent determined that he could not put anymore of his personal funds into B & W Productions and did not do so. Both before and after the airing of the first Lois and Mike Show, Respondent solicited funds from sponsors to help pay the amount charged by BLAB TV for airing the show. Sponsorships were solicited from over 200 individuals and entities in the Pensacola community by Respondent and Benson. Respondent solicited funds in 1998 for the sponsorship of the Lois and Mike Show from a number of sources, including Baskerville-Donovan, Carlan Killam Consulting, Champion, and DelGallo-Morette, all of whom gave money for the sponsorship of the Lois and Mike Show. There was never any discussion at the time the solicitations were made that any of these potential sponsors might have matters before the Escambia County Commission (County Commission or Commission). Respondent has not solicited sponsors for the show since March of 1999. Baskerville-Donovan, Carlan Killam Consulting, Champion, and DelGallo-Morette have all had matters come before the Escambia County Commission after giving money for the Lois and Mike Show. Respondent, as a county commissioner for Escambia County, has voted on matters that have come before the County Commission regarding Baskerville-Donovan, Carlan Killam Consulting, Champion, and DelGallo-Morette after those companies gave money to support the airing and/or production of the Lois and Mike Show. However, Respondent has never been employed by and has never owned property with or engaged in a business enterprise with Baskerville-Donovan, Carlan Killam Consulting, Champion, or DelGallo-Morette. Since July of 1998, Respondent has cast approximately 3,000 votes as a member of the County Commission. He has never abstained from a vote as a county commissioner or filed a conflict of interest disclosure form based upon payments that have been made by any entity to B & W Productions or for the Lois and Mike Show. Baskerville-Donovan provides architectural and engineering services to Escambia County. These services are provided pursuant to an on-going contract with the county. Respondent solicited a sponsorship from Baskerville- Donovan. Subsequently, Baskerville-Donovan became a regular sponsor of the Lois and Mike Show paying $200 a month, beginning September or October 1998, and continuing through April 2000. The following matters that came before the Escambia County Commission for a vote regarding Baskerville-Donovan just before and after it became a sponsor of the Lois and Mike Show: On June 23, 1998, the Commission approved issuance of a Task Order to Baskerville-Donovan on Contract PD 95- 96.74 in the amount of $394,568 to design several road projects to the 35 percent stage. This item was unanimously approved by the Commission upon motion made by Respondent. This vote occurred prior to any sponsorship funds being paid to B & W Productions by Baskerville- Donovan. On September 22, 1998, the Commissioner approved the extension of six contracts with various consultants, including Contract PD 95-96.74 to Baskerville- Donovan for the second consecutive one- year option period, October 1, 1998, through September 30, 1999, at the same price, terms, and conditions. The extensions applied to contracts that had been awarded on August 6, 1996. This item was unanimously approved as part of the Commission's Consent Agenda. This vote occurred after sponsorship funds were paid by Baskerville-Donovan to B & W Productions. On December 22, 1998, the Commission approved Addendum Number 7 to Contract 95-96.63 to Baskerville-Donovan in the amount of $316,775.60 to provide full- time inspection and contract administration for the University Parkway Widening and Realignment Projects. This item was unanimously approved by the Commission with Respondent seconding the motion for approval made by Commissioner Boss. This vote occurred after sponsorship funds were paid to B & W Productions by Baskerville-Donovan and after responsibility for collecting and accounting for sponsorship funds for the Lois and Mike Show was transferred to BLAB TV. On January 21, 1999, the Commission approved issuance of a Task Order on Contract PD 95-96.74 to Baskerville- Donovan, in the amount of $490,729.00 to design various paving and drainage projects to the 30 percent stage. This item was unanimously approved as part of the Commission's Consent Agenda. This vote occurred after sponsorship funds were paid to B & W Productions and after responsibility for collecting and accounting for sponsorship funds for the Lois and Mike Show was transferred to BLAB TV. On January 21, 1999, the Commission approved extension of five current contracts with various consultants, including Contract PD 95-96.100 to Baskerville-Donovan, for the third consecutive one-year option period, March 14, 1999, through March 13, 2000, at the same prices, terms and conditions. The extensions applied to contracts that had been awarded March 14, 1998. The item was unanimously approved as part of the Commission's Consent Agenda. This vote occurred after sponsorship funds were paid to B & W Productions and after responsibility for collecting and accounting for sponsorship funds for the Lois and Mike Show was transferred to BLAB TV. On February 4, 1999, the Commission approved Amendment Number 4 to Contract PD 94-95.59 between Escambia County and Baskerville-Donovan, in the amount of $51,200, for architectural and engineering services for various projects. (The original contract was approved on April 25, 1995.) This item was unanimously approved as part of the Commission's Consent Agenda, with Respondent moving approval of the Consent Agenda. This vote occurred after sponsorship funds were paid to B & W Productions and after responsibility for collecting and accounting for sponsorship funds for the Lois and Mike Show was transferred to BLAB TV. On April 22, 1999, the Commission approved the expenditure of approximately $3,000 to Baskerville-Donovan to complete the design package for renovations to the Board Chambers located in the Old Courthouse. This item was approved by a vote of 4-0, with Commissioner Robertson absent. This vote occurred after sponsorship funds were paid to B & W Productions and after responsibility for collecting and accounting for sponsorship funds for the Lois and Mike Show was transferred to BLAB TV. On May 20, 1999 the Commission approved three items extending Contract PD 95- 96.83 to allow three consultants, including Baskerville-Donovan, to proceed with various tasks with respect to the extension of I-110. In the first vote, the Commission unanimously approved extension of the contract to allow consultants to proceed with the preparation of applications associated with the request for funds for the I-110 extension project. In the second vote, the Commission unanimously approved extension of the contract to allow the consultants to proceed with design and preparation of other documents required in connection with extension of I-110 to Nine Mile Road. In the third vote, the Commission approved, by a vote of 3-2, extension of the contract to allow consultants to proceed with design and preparation of related documents for further extension of I-110 using as much of the Gulf Power right-of-way as possible. With respect to each vote, Respondent seconded the motion for approval and voted in the affirmative on each item. These votes occurred after sponsorship funds were paid to B & W Productions and after responsibility for collecting and accounting for sponsorship funds for the Lois and Mike Show was transferred to BLAB TV. On October 7,1999, the Commission approved Contract PD 98-99.83 to Baskerville-Donovan, in the amount of $100,000 for a feasibility study for the Central Commerce Park. This item was approved unanimously by the Commission upon motion seconded by Respondent. This vote occurred after sponsorship funds were paid to B & W Productions and after responsibility for collecting and accounting for sponsorship funds for the Lois and Mike Show was transferred to BLAB TV. With respect to each of the matters which were the subject of votes referenced in paragraph 25, neither Respondent nor B & W Productions provided any services to Baskerville- Donovan. Nor did Respondent or B & W Productions have any responsibility for evaluating or inspecting Baskerville-Donovan's performance under any of these contracts. Moreover, neither Respondent nor B & W Productions provided any services with respect to any of the projects which were the subject of the Commission votes. Finally, neither the Respondent nor B & W Productions benefited from the votes of the County Commission approving various items involving Baskerville-Donovan. Respondent has never been employed or retained by Baskerville-Donovan. Respondent has never been engaged in a business enterprise with Baskerville-Donovan as a partner, a joint venturer, a co-owner of property, or in a corporate entity whose shares are not listed on a national or regional stock exchange. Carlan Killam Consulting provides architectural services to Escambia County, and has done so since 1973. These services have been provided to the county through on-going contracts. Carlan Killam Consulting provided one payment of $1,500.00 to sponsor the Lois and Mike Show. That payment was made on or about July 29, 1998. Benson initially approached Charles Carlan, the president of Carlan Killam Consulting, about sponsoring the Lois and Mike Show. Subsequently, Carlan met with Respondent and decided to have his company sponsor the show because it showed the positive side of Pensacola, as opposed to the negative side shown in the regular media. Carlan Killam Consulting engaged in a similar sponsorship endeavor with respect to the Pensacola Independent Newspaper. The following matters came before the Escambia County Commission for a vote regarding Carlan Killam Consulting just before and after it became a sponsor of the Lois and Mike Show: On June 23, 1998, the Commission, upon motion by Respondent, unanimously approved the issuance of a Task Order on Contract PD 95-96.74 to Carlan Killam in the amount of $254,920 to design several road projects to 30 percent stage. This vote occurred before sponsorship funds were paid by Carlan Killam. On July 28, 1998, the Commission unanimously approved, as part of its Consent Agenda, a Task Order on Contract PD 95-96.74 to Carlan Killam in the amount of $379,618 for various road paving and draining design projects. This vote occurred before any sponsorship funds were paid by Carlan Killam. On September 22, 1998, the Commission approved extensions of six current contracts with various consultants, including Carlan Killam (Contract PD 95.96.74), for the second consecutive one-year option period, October 1, 1998, through September 30, 1999, at the same prices, terms and conditions. (The extensions applied to contracts that had been awarded August 6, 1996.) This item was unanimously approved as part of the Commission's Consent Agenda. The vote occurred after the one-time sponsorship payment was made to B & W Productions by Carlan Killam. On November 24, 1998, the Commission considered and unanimously approved the Proposal Review Committee's ranking of firms based on their letters of interest regarding providing professional architectural consulting services to prepare a 10-year master space plan. Carlan Killam ranked second. This vote occurred after Carlan Killam made a one- time sponsorship payment to B & W Productions. On December 3, 1998, the Commission approved issuance of a Task Order on Contract PD-96.74.3P to Carlan Killam in the amount of $134,748 for services on various waste water projects. This vote occurred after the one-time sponsorship payment was made by Carlan Killam to B & W Productions. On December 22, 1998, the Commission approved issuance of a Task Order on Contract 95-96.74 in the amount of $104,927 for design, engineering, and surveying services for storm-water and drainage projects. This item was unanimously approved as part of the Commission's Consent Agenda. This vote occurred after the one-time sponsorship payment was made by Carlan Killam to B & W Productions. On March 18, 1999, the Commission approved issuance of three task orders on Contract PD 95-96.74 to Carlan Killam in amounts of $136,476; $504,771; and $69,087. These items were unanimously approved as part of the Commission's Consent Agenda. Respondent was not present for this meeting. On April 22, 1999, the Commission approved issuance of a Task Order on Contract PD 95-96.74 to Carlan Killam in the amount of $110,666 for the design and engineering for various road projects. This item was unanimously approved as part of the Commission's Consent Agenda for this date. This vote occurred after the one-time sponsorship payment was made by Carlan Killam to B & W Production. On May 20, 1999, the Commission approved three items extending Contract PD 95-96.83 to direct named consultants, including Carlan Killam, to proceed with various tasks with respect to the extension of I-110. In the first vote, the Commission unanimously approved extension of the contract to allow consultants to proceed with the preparation of applications associated with the request for funds for the I-110 extension project. In the second vote, the Commission unanimously approved extension of the contract to allow the consultants to proceed with design and preparation of other documents required in connection with extension of I-110 to Nine Mile Road. In the third vote, the Commission approved, by a vote of 3-2, extension of the contract to allow consultants to proceed with design and preparation of documents for further extension of I-110 using as much of the Gulf Power right-of-way as possible. With respect to each item, Respondent seconded the motion for approval and voted in the affirmative. These votes occurred after the one-time sponsorship payment was made by Carlan Killam to B & W Productions. On October 21, 1999, the Commission approved issuance of Task Order on Contract PD 95-96.83 to Carlan Killam in an amount not to exceed $263,727.28, to provide the first phase of project development to study the I-110 extension to Nine Mile Road. This item was approved by the Commission, by a vote of 4-1, with Respondent voting in the affirmative. This vote occurred after the one-time sponsorship payment was made to B & W Productions. With respect to each of the matters which were the subject of votes referenced in paragraph 31, neither Respondent nor B & W Productions provided any services to Carlan Killam. Moreover, neither Respondent nor B & W Productions had any responsibility for evaluating or inspecting Carlan Killam's performance under the aforementioned contracts or for providing any services with respect to any of the projects which were the subjects of these votes. Finally, neither Respondent or B & W Productions benefited in any manner from the votes of the County Commission approving various items involving Carlan Killam. Respondent has never been employed or retained by Carlan Killam. Respondent has never been engaged in a business enterprise with Carlan Killam as a partner, a joint venturer, a co-owner of property, or in a corporate entity whose shares are not listed on a national or regional stock exchange. DelGallo-Morette provides construction services to Escambia County. Benson suggested that Respondent contact DelGallo- Morette as a potential sponsor. Both Respondent and Benson discussed sponsorship of the Lois and Mike Show with Steve DelGallo, the president of DelGallo-Morette. Subsequently, DelGallo-Morette provided a one-time payment of $2,500 to sponsor the Lois and Mike Show. That payment was made on or about August 21, 1998. Benson's credible testimony was that she and DelGallo are good friends and that if there was any reason for DelGallo-Morette to sponsor the show, it was because she had just recently drawn the house plans for DelGallo free of charge. Matters that came before the Escambia County Commission for a vote regarding DelGallo-Morette just before and after it became a sponsor of the Lois and Mike Show include the following: On June 23, 1998, the Commission approved the unanimous recommendation of the Bid Review Committee to award a lump sum contract to DelGallo-Morette, in the amount of $89,5000 as the lowest, most responsive, and most responsible bidder, for a renovation construction project. This item was unanimously approved by the Commission, upon motion made by Respondent. This vote occurred prior to any sponsorship funds being paid to B & W Productions by DelGallo-Morette. On June 30, 1998, upon motion by Respondent, the Commission approved an increase in maximum price, by a sum not to exceed $385,000, for telecommunication system improvements at the M.C. Blanchard Judicial Center pursuant to a contract approved by the Commission on November 19, 1996, with Brown and Root Building Company, in association with DelGallo-Morette. This vote occurred prior to any sponsorship funds being paid to B & W Productions by DelGallo-Morette. On November 24, 1998, upon motion by Respondent, the Commission unanimously approved a guaranteed maximum price on the Escambia County Control Booking and Detention Facility in the amount of $14,661,576 with Brown and Root Building Company, as the contractor, in association DelGallo-Morette and a total project cost of $16,054,682 relative to Contract PD 97-97.155. This vote occurred after the one-time sponsorship payment was made paid to B & W Productions by DelGallo-Morette. On March 18, 1999, the Commission approved amending Contract PD 95-96.113 with Brown and Root Building Company, in association with DelGallo-Morette, to increase the guaranteed maximum price of $900,000 to provide for additional costs for construction change orders and other items associated with renovation of the M.C. Blanchard Judicial Center Expansion Project. This item was unanimously approved as part of the Commission's Consent Agenda by a vote of 4-0. Respondent was absent and did not vote. With respect to each of the matters which were the subject of votes referenced in paragraph 37, neither Respondent nor B & W Productions provided any services to DelGallo-Morette. Nor did Respondent or B & W Productions have any responsibility for evaluating or inspecting DelGallo-Morette's performance under the contracts addressed by the votes. Neither Respondent nor B & W Productions provided any services with respect to any of the projects which were the subjects of those votes. Further, neither Respondent nor B & W Productions benefited in any manner from the votes of the Commission approving various items involving DelGallo-Morette. Respondent has never been employed or retained by DelGallo-Morette. Moreover, Respondent has never been engaged in a business enterprise with DelGallo-Morette as a partner, a joint venturer, a co-owner of property, or in a corporate entity whose shares are not listed on a national or regional stock exchange. Champion is a forest products company whose primary products are a variety of papers, lumber, and plywood. Champion has a contract with Escambia County for the disposal of ash at the landfill in exchange for natural gas. In August or September 1998, Respondent and Benson met with representatives of Champion to discuss sponsorship of the Lois and Mike Show. Benson made most of the presentation which focused on the negative public image of Champion in the community at that time. Champion's negative image resulted from Champion's planned wastewater discharge into Escambia Bay. The Escambia County Commission did not have regulatory jurisdiction over this issue. Rather, regulatory jurisdiction resided at the Department of Environmental Protection and the Environmental Protection Agency. Champion was a segment sponsor of the Lois and Mike Show for a year, beginning in September 1998 through September 1999, at a rate of $260 a month. As a segment sponsor, Champion paid $260 monthly. From October 1999 through December 1999, Champion paid $178.50 per month to sponsor the show and in December 1999, Champion paid $119 in sponsorship fees. After December 1999, Champion discontinued its sponsorship of the show. The following matters that came before the Escambia County Commission regarding Champion before and after it became a sponsor of the Lois and Mike Show: On July 28, 1999, the Commission approved retaining Chris H. Bentley, Esquire, to monitor and advise the Commission on Champion's permitting activities regarding discharge of treated wastewater into Escambia River. This item was unanimously approved by Commission upon motion seconded by Respondent. This vote occurred prior to any sponsorship funds being paid to B & W Productions by Champion and did not address any item which Champion had before the Commission. On September 22, 1998, the Commission amended its License Agreements with Champion for the period January 1, 1998, through December 31, 1998, to include installation of gas monitoring wells at various landfill sites which was inadvertently omitted from the prior approved agreements. This item was unanimously approved by the Commission, upon motion made by Respondent. This vote occurred prior to any sponsorship funds being paid to B & W Productions by Champion. On October 8, 1998, the Commission took two actions concerning Champion. First, it voted to accept, for filing in the minutes of the Commission, the "Escambia County Citizens' Executive Point Paper" regarding Champion's proposed discharge of wastewater into the Escambia River. This action was taken unanimously, upon motion seconded by Respondent. Second, the Commission voted to approve the staff's making a written request to Environmental Protection Agency's (EPA) "Technology Team" to evaluate the impact of Champion's proposed wastewater discharge into Escambia Bay relative to the request of the Escambia County Citizen's Coalition, Inc. This action was taken unanimously, upon motion made by Respondent. This vote occurred prior to any sponsorship funds being paid to B & W Productions by Champion and did not address any item which Champion had before the Commission. On November 5, 1998, the Commission discussed a proposal from the Department of Environmental Protection that Escambia County form a partnership with Santa Rosa County and the EPA for a unified peer review approach to Champion's proposed relocation wastewater discharge point and to analyze the processing of wastewater discharge permitted for Champion and its impact on Escambia Bay and Perdido Bay. The Commission voted unanimously to refer to DEP's proposal to the County's Department of Neighborhood and Environmental Services for analysis and recommendation. This vote occurred after sponsorship funds were paid to B & W Productions by Champion and did not address any item which Champion had before the Commission. On November 24, 1998, the Commission approved the renewal of four License Agreements with Champion for the operation of water quality monitoring and gas wells located at various landfill sites, for the period January 1, 1999, through December 31, 1999. This item occurred after sponsorship funds were paid to B & W Productions by Champion. On February 2, 1999, the Commission adopted a resolution urging Champion to use monies encumbered for construction and permitting of its proposed pipeline to the Escambia River to fund improvements to the effluent being dumped into Eleven Mile Creek. This item was approved by the Commission, by a vote of 3-2, with Respondent voting in the affirmative. This vote occurred after sponsorship funds were paid to B & W Productions by Champion and did not address any item which Champion had before the Commission. On April 8, 1999, the Commission authorized staff to negotiate the purchase of a parcel of property from Champion to be used as a district park. This item was unanimously approved by the Commission, upon motion made by Respondent, with Commissioner Boss absent. This vote occurred after sponsorship funds were paid to B & W Productions by Champion and after responsibility for collecting and accounting for sponsorship funds for the Lois and Mike Show was transferred to BLAB TV. On April 22, 1999, the Commission amended a previously approved Qualified Industry Tax Refund Incentive for Champion's dimensional lumber production facility. This item was unanimously approved by the Commission, upon motion made by Respondent, with Commissioner Robertson absent. This vote occurred after sponsorship funds were paid to B & W Productions by Champion and after responsibility for collecting and accounting for sponsorship funds for the Lois and Mike Show was transferred to BLAB TV. On June 22, 1999, the Commission adopted an ordinance establishing an economic development ad valorem tax exemption for Champion for its expansion of its Pensacola Mill located in Cantonment and for its hiring of additional employees. (Champion had expended $40 million in improvements at the facility that resulted in increased production and employment.) An employee of Champion met individually with Respondent as well as other members of the Commission to discuss this issue. The value of the ad valorem tax exemption to Champion was $1.8 million spread over 6.9 years. This item was unanimously approved by the Commission. This vote occurred after sponsorship funds were paid to B & W Productions by Champion and after responsibility for collecting and accounting for sponsorship funds for the Lois and Mike Show was transferred to BLAB TV. On July 15, 1999, the Commission approved the purchase of real property for a park from Champion for $375,000. This item was approved as part of the Commission's Consent Agenda by a vote of 4-0, with Respondent absent. With respect to each of the matters which were the subject of votes referenced in paragraph 43, neither Respondent nor B & W Productions provided any services to Champion. Nor did Respondent or B & W Productions have any responsibility for evaluating or inspecting Champion's performance under the items addressed by the votes. Neither Respondent nor B & W Productions provided any services with respect to any of the matters which were the subject of these votes. Neither Respondent nor B & W Productions benefited in any manner from the votes of the Commission on these items involving Champion. Respondent had no interest in the real property which the Commission directed staff to negotiate with Champion regarding purchase by the county. Respondent has never been employed or retained by Champion. Moreover, Respondent has never been engaged in a business enterprise with Champion as a partner, a joint venturer, a co-owner of property, or in a corporate entity whose shares are not listed on a national or regional stock exchange. Respondent was present and voted in favor of all of the issues involving sponsors as set forth in paragraphs 25, 31, 37, and 43 above, except as otherwise noted. All of the aforementioned sponsors paid for the sponsorship of the Lois and Mike Show. Furthermore, two of these sponsors, Baskerville-Donovan and Champion, continued to make monthly sponsorship payments in months just before, as well as after the votes, in the amounts of $200 and 260, respectively. Since the sponsorships reduced the personal contributions that had to be made by Respondent and his business associate, Benson, for the airing of the Lois and Mike Show, they directly benefited from money received from sponsors who did business with and regularly appeared before the Escambia County Commission. The facts show that all four of the above-mentioned sponsors were doing business with the Escambia County Commission and that both Baskerville-Donovan and Champion made sponsorship payments for the Lois and Mike Show during this interim period after dissolution but prior to the time that Respondent transferred his interest in the show to Lois Benson. Neither Respondent nor Benson believed that soliciting sponsorship from businesses that appear before the Escambia County Commission for a vote was a conflict. However, Respondent's contractual relationship with B & W Productions, and its interest in the Lois and Mike Show, his direct solicitation of sponsorships from businesses appearing before the County Commission, and Respondent's and B & W's dependence upon funds derived from those sponsors, constituted a continuing and frequently recurring conflict between Respondent's private interests and the performance of his public duties as a member of the Escambia County Commission.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Ethics Commission enter a final order and public report finding that Respondent, David Whitehead: (1) did not violate Section 112.3143(3)(a), Florida Statutes; and (2) violated Section 112.313(7)(a), Florida Statutes. It is further recommended that for the violation of Section 112.313(7)(a), Florida Statutes, the Commission impose a civil penalty of $2,000 against Respondent and issue a public censure and reprimand. DONE AND ENTERED this 15th day of August, 2000, in Tallahassee, Leon County, Florida. CAROLYN S. HOLIFIELD 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 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 15th day of August, 2000. COPIES FURNISHED: James H. Peterson, III, Esquire Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 Mark Herron, Esquire Akerman, Senterfitt & Edison, P.A. 301 South Bronough Street, Suite 200 Tallahassee, Florida 32801 Sheri L. Gerety, Agency Clerk Florida Commission on Ethics 2822 Remington Green Circle, Suite 101 Post Office Drawer 15709 Tallahassee, Florida 32317-5709 Philip C. Claypool, General Counsel Florida Commission on Ethics 2822 Remington Green Circle, Suite 101 Post Office Drawer 15709 Tallahassee, Florida 32317-5709 Bonnie J. Williams, Executive Director Florida Commission on Ethics 2822 Remington Green Circle, Suite 101 Post Office Drawer 15709 Tallahassee, Florida 32317-5709
The Issue The issue for consideration in this hearing is whether Petitioner, Larsen Communications and Professional Services, Inc., should be certified and designated as a Minority Business Enterprise.
Findings Of Fact At all times pertinent to the issues herein, the Commission on Minority Economic and Business Development was one of the agencies in Florida responsible for the certification of women and minority owned businesses in Florida as Minority Business Enterprises. Larsen Communications and Professional Services, Inc. was operating a video production and public relations company in Tampa. Petitioner, as a part of its business operation, sought and performed contracts with various agencies of the State of Florida. Valerie D. Larsen, current President and 75 percent owner of the Petitioner corporation, is a graduate of high school in Hillsborough County. After graduation, she went to work as a legal secretary and worked in that field for several years. She is currently a financial analyst with GTE Data Services. From 1991 through 1993 she was a student at the Tampa Academy of Performing Arts from which she claims to have graduated, though she has no diploma to so indicate. While there, she took training in on-camera acting, camera handling, voice over, and other facets of video production. She also acted in and produced plays, directed plays, and was active in all aspects of theatre production, both from the artistic and the business sides. In March, 1990, Ms. Larsen married her husband, a 1973 graduate of Florida State University with a bachelor's degree in Broadcast Communications. Mr. Larsen was, for many years, a television reporter in the Tampa area as well as elsewhere. He has considerable experience in the on-camera presentation of news stories and has written many of the pieces he delivered on air. From the very beginning, Mrs. Larsen wanted to own her own business, and over the years, as she worked as a legal secretary and with GTE, she maintained this ambition. Several years ago, when her husband was put out of work, she got the idea of starting her own production company, not only to give herself an opportunity to do that which she most enjoyed doing, but also to give her husband something to do as well. Ms. Larsen admits that she made a big mistake in not hiring an attorney to help her draft the business organization papers. Instead, she went to Office Depot and purchased an incorporation kit which she filled out without any professional advice and submitted to the Florida Secretary of State's office for registration. In doing so, she made her husband the President of the company even though she was in charge and actually made the business decisions. She did this in order to help her husband maintain his self respect. This officer designation was corrected sometime thereafter. When Ms. Larsen graduated from the Tampa Academy of Performing Arts she knew she wanted to start her own company and what she liked to do. Video production seemed to fit the bill, and on September 4, 1992, because she no longer could act due to her pregnancy, she started the company. The initial funding for the company came from a $2,500 withdrawal from funds owned jointly by the parties and to which she had contributed over the years. At the time the company was started, Mr. Larsen had his severance pay of $3,200 per month for two or three months. This money was used for the family's living expenses. The money which was invested in the company, and which had been in the joint account, came, Ms.Larsen avers, from her salary from GTE Data Services. Ms. Larsen is currently President of the company. She professes to make all business decisions. She consistently researches jobs to bid on and is a subscriber to the Florida Administrative Weekly, which lists bid opportunities. If she find something she feels the company can handle, she contacts the agency and asks for a proposal package. Then, she claims, she prepares and submits the company's bid. Ms. Larsen on the one hand claims to handle all the company accounting, but on the other hand states she hires a CPA to do the payroll. She claims also to make all the arrangements for financing and borrowing for the company, the hiring and firing of personnel, and the solicitation of work for the company. There are no full time employees, however, besides the Larsens. Usually, people with the particular skills needed for a specific job are contracted with on a tempor ary basis. She decides who she wants to use on a particular job, determines the costs as to how much each element will cost, and comes up with a final bid price. She might have Mr. Larsen do some of the research and plug details into the computerized bid shell, but she does the majority of the bid process and makes the ultimate decision as to whether a bid will be submitted. She also pays all the bills. Mrs. Larsen claims she must do a lot of research for the business which she does in her spare time at work, during her lunch periods and in the evenings. She also calls Mr. Larsen at home and gives him things to look up. For her research, she uses the University of South Florida library, two newspapers and other research sources dealing with the subject matter of the pending bid, so that she can effectively evaluate the project and submit an appropriate bid. Bid prices are based on what it will cost her to hire the required people and lease the required equipment. Since the company is small, she hires most artists, such as writers, photographers, editors and graphic artists, on a per job basis. If Larsen is successful and is awarded a bid for a particular production, Ms. Larsen has the initial job of preparing the script for the production, the blueprint to present to the photographer. A script is prepared for each production designed around the requirements of that particular subject. Most scripts are written on the basis of her research and that of her husband, and the skills needed to prepare a script include an ability to do research, writing skills, formatting skills, experience and creativity. Once the script is prepared, it is presented to the client for review and suggestions. Upon final approval, Ms. Larsen hires the photographer who will do the shooting. Often the photographer works alone, but sometimes either Ms. or Mr. Larsen accompanies him. Mr. Larsen does some of the research and the typing and purchases some supplies, but major purchases are approved and determined by Ms. Larsen. He also is responsible for answering the phone. Mr. Larsen is often the narrator on their productions, which is appropriate because of his on-air experience and his voice. In Mr. Larsen's prior career as a news journalist he wrote some of his material and appeared on camera. The nature of news broadcasting, however, is different from the productions of Larsen Communications. Whereas news reporting is primarily a recitation of facts which have occurred, Larsen's productions are far more creative, designed to tell a story or sell a particular product or point of view. Therefore, his prior experience, while good for on camera work, is not necessarily translatable to the management of the work the company does. In fact, Ms. Larsen is of the opinion that he does not have any skills she does not have, and is convinced that if he were not with the company, his absence would not have much effect on its operation. She is quite confident that she could do what he does or could easily hire someone to do what he does. Larsen Communications is a small company. To date, not more than 10 contracts have been awarded to it, and in each case, the solicitation process described above was used. Earnings from the company are split. Ms. Larsen receives an intermittent draw, depending on the company income. Mr. Larsen receives a set salary of $1,000 per month. There are no bonuses paid because this is all Ms. Larsen feels can be afforded, and even Mr. Larsen's salary is based on the company's money flow. He has been a salaried employee for several years, but only recently has he been paid by check. Aside from Ms. Larsen's 75 percent of the stock and Mr. Larsen's 25 percent, there are no other owners of the company and no one else shares any risk of loss. If the business fails, Ms. Larsen will bear the biggest loss, and Mr. Larsen would have to find a job elsewhere. The original application for MBE certification submitted by Larsen in 1994 sought certification in three areas: video production, public relations and media relations. This has been amended and now the only certification sought is that in video production. Ms. Larsen believes that all three areas are interrelated. Mr. Larsen confirms the testimony of Ms. Larsen regarding the responsibility for accomplishment of duties within the corporation. When the company was formed, he was unemployed and he agreed to support Ms. Larsen in the operation of her business; the company was her brainchild. She is the one who secured and filled out the incorporation forms that were submitted to the Secretary of State's office, and he did not know what the papers intended or what they said he was to do. He knows he was the original President of the company and a Director, but he also recognizes that those designations have been changed in the interim. Based on his education and experience, he believes he is qualified in video production, public relations and media relations. However, he was in news broadcasting by experience and throughout his career, and the business of Larsen Communications is totally different - more like entertainment. Mr. Larsen indicated he probably could be called the Marketing Director of the company, but it is a small company and in reality he has no title. He is authorized to make decisions on minor matters, but the ultimate decisions are made by Ms. Larsen. The company is her baby, her brainchild and her business, and he agrees that if he were to walk away from the company, while she might have trouble running the business alone while maintaining a full time job elsewhere, she has the skills, the experience and the ability to do so. He could be replaced easily. At no time, according to Mr. Larsen, did he ever run the company. He has researched and written scripts but Ms. Larsen has always had a major idea or input into whatever he has done and he works, he claims, at her direction. When Larsen's application was forwarded to the Commission, it was evaluated by Mr. Ringgold who conducted a telephone interview with Mr. and Ms. Larsen on August 29, 1994. At this point, the Commission now agrees there is now no issue as to the ownership of the corporation and that Larsen Communications in owned by Ms. Larsen. Nonetheless, Mr. Ringgold recommended that Larsen's application be denied under the provisions of Rule 60A-2.005, F.A.C. because he believed that Ms. Larsen does not assume the majority share of risk; that she does not have the authority to control and the experience to exercise dominant control over the corporation; that she does not have sufficient technical capability to run the corporation; that her control is not real, substantial and continuing; that she does not control the purchase of equipment and supplies; that she does not have independence in seeking business and that she does not have direction and control over all aspects of the business. Because he now accepts the fact that Ms. Larsen has knowledge and control of the company's financial affairs, the preexisting objection on that grounds is withdrawn, but taken together, as of the date of the hearing, Mr. Ringgold still recommended denial. No evidence was presented by the Commission, other than the testimony of Mr. Larsen which tended to support Petitioner's position, which would show with particularity any basis for disbelieving Petitioner's assertions. When Mr. Ringgold made his recommendation for denial, his decision was based on the matters submitted by the applicant and the information gained in the telephone interview. He did not make an on-site inspection of Larsen's facility. By the same token, he did not know of Ms. Larsen's schooling at the Tampa Academy of performing Arts at the time he made his recommendation. He does not recall ever having changed his mind regarding a recommendation in the nine years he has been doing this work. Mr. Ringgold has his educational credentials in speech and has some knowledge of video production having worked in that area for his uncle while in school.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that Petitioner, Larsen Communications and Professional Services, Inc., be granted certification as a Minority Business Enterprise. RECOMMENDED this 29th day of August, 1995, in Tallahassee, Florida. ARNOLD H. POLLOCK, 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 29th day of August, 1995. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 94-5839 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: Not a Finding of Fact but a Conclusion of Law. - 4. Accepted and incorporated herein. Accepted and incorporated herein except for references to F.A.C. which are Conclusions of law. - 8. Accepted and incorporated herein. FOR THE RESPONDENT: None Submitted. COPIES FURNISHED: Miriam L. Sumpter, Esquire 2700 North MacDill Avenue Suite 218 Tampa, Florida 33607 Joseph L. Shields, Esquire Commission on Minority Economic and Business Development 201 Collins Building 107 West Gaines Street Tallahassee, Florida 32399-2000 Crandall Jones Executive Administrator Commission on Minority Economic and Business Development Collins Building - Suite 201 107 West Gaines Street Tallahassee, Florida 32399-2000
Findings Of Fact Pursuant to agreement of the parties, this case was submitted to the undersigned Hearing Officer upon the filing of briefs and proposed final orders. There are no disputed issues of material fact. The legal issue in this case is whether Rule 13A-1.002(3), Florida Administrative Code, is an invalid exercise of delegated legislative authority. The parties were represented as follows: Petitioner: Richard A. Lotspeich, Esquire Post Office Box 271 Tallahassee, Florida 32302 Respondent: Sandra E. Allen, Esquire Room 452, Larson Building Tallahassee, Florida 32399-0955 Intervenors: Charles S. Ruberg, Esquire Knott Building Tallahassee, Florida 32399 (Department of Education) Paul W. Lambert, Esquire Post Office Box 11189 Tallahassee, Florida 32302 (Microdyne Corporation) The parties' proposed final orders were filed on June 25, 1987 and a ruling on each proposed finding of fact is included in the Appendix to this Final Order.
The Issue Whether the Department of Transportation can reject all bids on State Project No. 37906-9007?
Findings Of Fact In response to an invitation to bid, petitioner C & S Chemical Company (C&S) submitted a bid, No. 9059-86, offering to undertake complete maintenance operations to ensure Rest Area facilities located on State Road 93 (1-75) in Suwannee and Hamilton Counties are maintained in a safe, attractive, clean and sanitary manner." Respondent's Exhibit No. 1. Invitations to bid were mailed in October of last year, (T.9), and bids were to have been opened on December 2, 1987. C&S's bid price was $14,860.76 monthly or $178,329.12 for the year. By letter dated December 9, 1986, however, the Department of Transportation (DOT) advised C&S that all bids had been rejected, stating that the "Department reserved the right to reject any/or all bids when it is determined to be in the best interest of the Department. Petitioner's Exhibit No. 1. C&S mailed notice of protest the same day it received the Department's advice that all bids had been rejected. C&S's formal written protest took the form of a letter, dated December 18, 1986, in which C&S inquired: [H]ow can the Department of Transportation offend and deprive legitimate contractors of this work by negotiating a Contract with a non-profit organization after the bid prices have been made public knowledge? Petitioner's Exhibit No. 2. In this letter, C&S took the position that DOT should not reject all bids: We feel that if the non-profit organizations are going to get Department of Transportation contracts, they should either bid compet[i]tively with private enterprises, or that certain contracts should be set aside for them well advance of the bidding process. At hearing, Mr. Sperring narrowed or clarified the grounds of the protest when he stated, "I have no objection to the concept of the nonprofit organizations as long as they are set aside," (T.12) before bids are invited. The parties agree that, after bids were solicited, DOT decided to award the contract for Project No. 37906-9007 to intervenor Florida Association of Rehabilitative Facilities, Inc. (FARF), even though FARF never bid on the project. By agreement dated August 21, 1985, the Commission for Purchase for the Blind and other Severely Handicapped designated FARF "the central nonprofit agency of the Commission . . . [and its] sole agent." Intervenor's Exhibit No. 2. The day before, DOT Secretary Thomas E. Drawdy had signed a policy statement proclaiming DOT's intention "to procure commodities or services from qualified nonprofit agencies for the blind or other severely handicapped when feasible unless otherwise restricted by budgetary constraints." Intervenor's Exhibit No. 1.
The Issue Whether Petitioner is entitled to attorneys' fees and costs and, if so, in what amount.
Findings Of Fact On or about April 29, 1993, the Department of Health and Rehabilitative Services issued an agency action letter which rejected certain of Petitioner's cost reports in calculating the Medicaid reimbursement to which Petitioner was entitled. As a result, the Medicaid reimbursement to Petitioner was reduced. Thereafter, Petitioner timely filed a challenge to the agency action, and the matter was forwarded to the Division of Administrative Hearings for formal proceedings, DOAH Case No. 93-3687. Such case was assigned to Judge Arrington and scheduled for hearing in Miami for October 14-15, 1993. On October 12, 1993, the Department filed a suggestion of mootness which led to the withdrawal of the agency action letter, the acceptance of Petitioner's cost reports, and, presumably, to the recalculation of the Medicaid reimbursement favorable to Petitioner. On May 2, 1996, the agency, now the Agency for Health Care Administration, entered a final order adopting the recommended order. On July 1, 1996, the Petitioner filed the instant motion for attorney's fees and costs and supporting memorandum of law together with the exhibits thereto. On or about September 6, 1996, Respondent filed a motion to dismiss or alternatively motion to strike Petitioner's motion for attorney's fees and costs, and argued that the Petitioner is not entitled to fees pursuant to Section 57.105, Florida Statutes; that the affidavit submitted by Petitioner does not comply with the statute; that Petitioner is not a prevailing party under Section 57.111, Florida Statutes; and that the relief requested exceeds the maximum award of $15,000.00. Such responses relate only to the initial pleading filed, however, and not to the amended request filed on February 12, 1997. Petitioner has a net worth of not more than $2,000,000.00 and its principal place of business is Dade County, Florida. Petitioner's attorney's normal billing rate for general matters is $250.00 and he expended in excess of 100 hours of time in the litigation of the underlying matter. Petitioner has requested $87,500.00 in attorney's fees as the prevailing party in the principal case and $21,875 for litigation on the issue of fees and costs. Petitioner alleged it is entitled to fees and costs pursuant to Sections 57.105 and 57.111, Florida Statutes.
Findings Of Fact On or about August 10, 1979, HRS caused a legal advertisement to be published concerning its Purchase Order No. 52579, requesting bids for window film installation pursuant to HRS Bid No. 30-497WR. The Invitation to Bid provided, in part, that: As the best interests of the State may require, the right is reserved to make award(s) by individual item, group of items, all or none or a combination thereof; to reject any and all bids or waive any minor irregularity or technicality in bids received. When it is determined there is competition to the lowest responsive bidder, then other bids may not be evaluated. Bidders are cautioned to make no assumptions unless their bid has been evaluated as being responsive. Among the special conditions of the Invitation to Bid was the following: The successful bidder will furnish and install window insulation film on all glass exposures of buildings designated as one through eight with the exception of these [sic] windows now having film installed. These buildings are commonly known as the Winewood Complex which is located at One Winewood Blvd., Tallahassee, Florida 32301. Subleased or other occupied space will be an addition to the basic glass square footage of buildings five, six, seven and eight now occupied by the Department of Corrections, Winewood Office Park Lmtd. and the Parole and Probation Commission. Prospective bidders will be provided these applicable locations by the project manager. The bid will contain a diagram and listing of these square footages. The computations of total square footages of applicable glass areas will be separated by buildings. This is necessary so that after the installation of the film on each building is completed and accepted by the project manager, an invoice can be submitted for payment. [Emphasis added]. In addition, tee following clause was also contained in the Special Conditions of the Invitation to Bid: All work performed by the Contractor in completing the subject project shall be guaranteed by the Contractor against all defect resulting from the use of materials, equipment and workmanship for a period of five years from the date of final completion of the subject project. If, within any guarantee period, repairs or changes are required in connection with the guarantee work, which in the opinion of the Owner is rendered necessary as a result of the use of materials, equipment or workmanship which are defective or inferior or not in accordance with the terms of the Contract, the Contractor shall, promptly upon receipt of notice from the Owner and without expense to the Owner, proceed to: Place in satisfactory condition in very [sic] particular all of such guaranteed work, correct all defects therein; and make good all damages to the structure or contents thereof, which in the opinion of the Owner, is the result of the use of materials, equipment, or workmanship which are inferior, defective, or not in accordance with the terms of the Contract; and made [sic] good any work or materials or the equipment and contects [sic] of structures or site disturbed in fulfilling any such guarantee. [Emphasis added]. The Special Conditions also provided that: No interpretation of the meaning of the Drawings, specifications, or other Bidding Documents, no correction of any apparent ambitquity [sic], inconsistency or error therein, will be made to any Bidder orally. Every request for such interpretation or correction should be in writing, addressed to the Project Manager. All such interpretations and supplemental instruction will be in the form of written addenda to the Bidding Documents. Only the interpretation or correction so given by the Project Manager in writing, shall be binding and prospective Bidders are advised that no other source is authorized to give information concerning, or to explain or interpret the Bidding Documents. Finally, the Invitation to Bid also provided for modification of bids if received in writing prior to bid opening. HRS distributed more than 25 bid invitations pursuant to the aforementioned bid, and in response thereto received four bids, one of which was a "no bid". Of the three remaining bidders, Solar-X of Tallahassee submitted a total bid of $34,624.88, based upon a measurement of 29,096 square feet at a price of $1.19 per square foot; Florida Solar Power, Inc. submitted a total bid of $30,079.14, based upon 30,693 square feet at $.98 per square foot; and, finally, Petitioner submitted a total bid of $43,555.10 based upon a calculation of 37,874 square feet at $1.15 per square foot. The bids of Solar-X of Tallahassee and Florida Solar Power, Inc. were determined to be unresponsive to the Invitation to Bid for reasons not here pertinent. Although Petitioner's bid contained a total square footage on which it proposed to install window film, the bid did not break down the area of glass on a per-building basis as required by the conditions of the Invitation to Bid. In addition, the conditions of the Invitation to Bid required that building space occupied by sublessors be separately computed in bid responses in order to attempt to pass on to those sublessors their pro-rata share of the cost. Petitioner did not separate this space in its bid as required. Petitioner also failed to furnish with its bid a diagram of exposed glass area in each building as required in the special conditions. Finally, Petitioner's bid response contained the following warranty provision: . . .3M Company and the [Petitioner] warrants [sic] "SCOTCHING" Brand Solar Control films against peeling, cracking, crazing, or loosening for a period of five (5) years after installation in the event the product is found to be defective under this warranty. [Petitioner] will replace such quantity of the film proved to be defective with the [Petitioner] additionally providing the reapplication labor free of charge for the first two (2) years of the warranty. The customer shall pay for any reapplication labor charges during the last three (3) years of the warranty. . .[Emphasis added]. At final hearing, a representative of Petitioner testified that this warranty was the manufacturer's warranty, and that Petitioner, as the seller of the product, intended that full warranty protection in accordance with the conditions of the Invitation to Bid be part of Petitioner's bid. However, nothing to this affect appears in Petitioner's bid, nor did Petitioner attempt to modify its bid in writing before bid opening to make HRS aware of its intentions in this regard. Although bid opening was initially scheduled for August 24, 1979, the opening date was extended to September 4, 1979, by addendum to the Invitation to Bid. After opening, bids ware reviewed by the staff of the Director of the Office of General Service in HRS for technical compliance with the Invitation to Bid. As a result of this review, it was determined that Petitioner's bid was the only bid submitted which complied with all provisions of the bid specifications, and the staff, therefore, recommended award of the contract to Petitioner. At this point the question of the award of the contract came to the attention of the Purchasing Director of HRS's Central General Services, whose office is responsible for evaluation of bids for compliance with the terms and conditions of an Invitation to Bid, state purchasing law and administrative rules relating to state commodity purchases. During the course of this review, it was determined that Petitioner's bid did not comply with the conditions of the Invitation to Bid in that it failed to break down its bid on a per-building basis and, additionally, improperly qualified the five-year warranty requirement contained in the Invitation to Bid and its conditions. At the Federal hearing in this cause the Purchasing Director for Central General Services also testified that he had received oral communications from other vendors, some of whom submitted bids and some who did not, to the effect that the technical specifications of the Invitation to Bid were tailored to the products sold by Petitioner to such an extent as to effectively close the bidding process to competition. None of these vendors protested the content of the specifications as required in the Invitation to Bid, nor was any direct testimony adduced at final hearing in this cause from these vendors. Although the Division of Purchasing of the Department of General Services also concluded that the bid specifications were too restrictive, there is insufficient evidence in the record in this proceeding upon which to base a conclusion that the specifications contained in the Invitation to Bid were either tailored to Petitioner's product, or were so restrictive as to limit competitive bidding. Indeed, one of the actual bidders, Solar-X of Tallahassee, submitted a bid which complied with the technical specifications, but was rejected because it included an unacceptable contingency clause for late delivery. After extensive in-house review by various HRS employees, a letter dated October 4, 1979, was forwarded to all vendors advising that HRS, after ". . .an extensive analysis of the bid responses. . ." had decided to reject all bids and issue a second call for bids. This letter also indicated that ". . .areas of concern which were expressed relative to the initial invitation will be addressed in the second call." The letter did not attempt to further identify the "areas of concern." The facts of record in this proceeding clearly establish that Petitioner's bid was not responsive to the Invitation to Bid. Petitioner did not include in its bid a diagram of each building on which window film was to be installed, nor did the bid indicate the number of square feet contained in each building. The two vendors whose bids were rejected apparently had no difficulty complying with this requirement. As a result, HRS was precluded from comparing the per-building cost of the competing bids, and, had the contract been awarded to Petitioner, HRS could not have determined the proper amount of periodic progress segments without performing independent measurement. Most importantly, however, Petitioner improperly qualified the five- year warranty provision contained in the Special Conditions. Petitioner's bid, on its face, limited its responsibility to replacement of defective window film during the five-year warranty period, and required that HRS be responsible for payment of labor charges for reinstallation during the last three years of the warranty period. This warranty qualification was clearly contrary to the requirement that any product replacement or reinstallation be without expense to HRS for a period of five years from the date of final completion of the project. There was extensive testimony at final hearing concerning allegations by Petitioner of improper conduct on the part of the HRS Purchasing Director for Central General Services which allegedly resulted in the decision to reject all bids and submit a second call for bids. Testimony on this issue involved Petitioner's assertion that the HRS employee's relationship by marriage to one of the unsuccessful bidders led to his conclusion that the technical specifications were so narrowly drawn as to preclude a consideration of his relative's product, and that the specifications should be redrafted so as to allow consideration of products other than Petitioner's. In light of the fact that Petitioner's bid was not responsive to the Invitation to Bid, in that it improperly qualified the warranty required, and did not contain square footage computations on a per-building basis, it is unnecessary to reach the question of the propriety of any conduct on the part of the HRS employee. The propriety of the rejection of Petitioner's bid was determined by Petitioner's failure to comply with the Special Conditions of the Invitation to Bid, and could not have been affected by the alleged misconduct on the part of an employee of HRS. Both Petitioner and Respondent have submitted proposed findings of fact for consideration by the Hearing Officer. To the extent that such proposed findings of fact have not been adopted in this Recommended Order, they have been specifically rejected as being irrelevant to the issues in this cause, or as not having been supported by the evidence.
The Issue The issue for consideration herein is whether the Petitioners, MISSCO, GENERAL, AND INTERSTATE should be placed on the convicted vendor list pursuant to Section 287.133 Florida Statutes (1991).
Findings Of Fact The facts stated in the Joint Stipulations to the extent set forth below are hereby adopted as findings of fact: On April 9, 1993, DMS issued notices of intent pursuant to Section 187.133(3)(e)(1), Florida Statutes. Jt. Stips. Appen. at pp. 72-73. On April 13, 1993, MISSCO filed petitions with DMS for a formal hearing pursuant to Section 120.57(1), Florida Statutes, to determine whether it is in the public interest for MISSCO, GENERAL, or INTERSTATE to be placed on the Florida Convicted Vendor List pursuant to Section 287.133, Florida Statutes. Jt. Stips. Appen. at p. 74-77. Subparagraph 287.133(3)(e)e., Florida Statutes, establishes factors which, if applicable to a convicted vendor, will mitigate against placement of that vendor upon the convicted vendor list. On April 5, 1991, General Equipment Manufacturers, Inc., (hereinafter "General"), a Mississippi corporation, and wholly owned subsidiary of MISSCO Corporation, was convicted of the commission of a public entity crime as defined within subsection 287.133(1)(g), Florida Statutes. Jr. Stips. p. 1, Appen. at pp. 41-43. A criminal information was filed in the United States District Court for the Southern District of Mississippi against General Equipment Manufacturers, Inc., alleging a violation of Section 1001, Title 18, United States Code and applicable Federal Acquisition Regulations which occurred on or about December 2, 1988. Jt. Stips. p. 1, Appen. at p. 40. The criminal information filed in the United States District Court, Southern District of Mississippi charged General with falsely representing on or about December 2, 1988 that the equipment schedule and price list submitted to the General Services Administration (hereinafter GSA) was General's established commercial price list. (Jt. Stips. p. 2, Appen. at p. 40. Upon entry of a plea of guilty, the Court entered a judgement against General which was filed April 5, 1991. The judgement required payment of a special assessment of $200, a fine in the amount of $10,000, without interest, and restitution in the amount of $28,000. Jt. Stips. p. 2, Appen. at pp. 40-48. The GSA issued Solicitation No. FCGS-X8-38010-N for FSC Group 66 Part II, Section P, Laboratory/Pharmacy Furniture. General submitted an offer dated August 18, 1988, and signed by Charles H. Wright, General Manager of General's SystaModules Division. In connection with its offer, General submitted its purported commercial price list dated January 31, 1987. Mr. Wright certified in Section M-FSS-330, M.3, Basis for Price Negotiation, Item (c), Certificate of Established Catalog or Market Price, that: The price(s) quoted in General's proposal is based on established catalog or market prices of commercial items, as defined in FAR 15.804-3(c), in effect on the date of the offer or on the dates of revisions submitted during the course of negotiations. Substantial quantities of the items have been sold to the general public at such prices. All of the data, including sales data, submitted with General's offer are accurate, complete, and current representations of actual transactions to the date when price negotiations are concluded. By letter dated December 2, 1988, Mr. Wright, in his capacity as General Manager of General's SystaModules Division, certified on behalf of General that: . . . all data submitted with General's offer pursuant to the discount schedule ad marketing data sheets and any other data submitted as as part of General's offer on Solicitation FGS-X8-38010-N are current, accurate, and complete a of the conclusion of negotiations, which occurred on December 2, 1988. Jt. Stips. p. 2-3, Appen. at pp. 51-53. On the basis of General's offer on Solicitation No. FGS-X8-38010-N, the GSA awarded General Contract No. GS-00F-06709 on December 13, 1988. The contract was for the period February 1, 1989, through January 31, 1992. Jt. Stips. p. 3-4, Appen. at p. 53. An investigation by the Federal Bureau of Investigation determined that General provided the GSA with fabricated price lists in connection with FGS-X8-38010-N. Jt. Stips. p. 4, Appen. at pp. 53-54. The details of the criminal information against General are discussed in the findings and determination made by the GSA Office of Acquisition Policy, dated May 18, 1992, which are incorporated herein by reference. Jt. Stips. Appen. at pp. 49-71). Particular findings are as follows: Federal debarment was imposed on General and its corporate officials Messrs. Wright and Majure. Jt. Stips. Appen. at p. 50. The debarments were effective throughout the Federal Executive Branch. The debarment precluded the award, renewal, or extension of federal contracts. Jt. Stips. Appen. at p. 50. Debarment proceedings were initiated by separate notices dated November 1, 1990 based on a referral from the Federal General Services Administration (GSA), Office of Inspector General (OIG). Jt. Stips. Appen. at p. 51. General bid on GSA Solicitation No. FGS-X3-36426-N and in connection with its offer General submitted a "dealer retail price list," and certified that: its prices were based on established catalog or market prices, substantial quantities of the items had been sold to the general public at said prices: and that all of the data submitted with its offer was accurate, complete and current representations of actual transactions up to the date when price negotiations were concluded. Jt. Stips. Appen. at p. 51. General's offer on the solicitation was accepted and it was awarded contract number GS-00F-70316 on April 19, 1984. Jt. Stips. Appen. at p. 52. On June 28, 1985 General made the same representations as to GSA Solicitation No. FGS-X8-38000-N for laboratory and pharmacy furniture. The award was made to General on December 9, 1985. Jt. Stips. Appen. at p. 52. Identical representations were made by General in response to GSA Solicitation No. FCGS-X8-38010-N issued on July 7, 1988. The solicitation was for laboratory and pharmacy furniture. The award was made to General on December 13, 1988. Jt. Stips. Appen. at p. 53. Criminal Information Number J90-00080(B) was filed in the U.S. District Court for the Southern District of Mississippi on November 15, 1990. The information was based on the FBI investigation of General's submission of false commercial price lists to GSA. The criminal information charged General with violating Title 18, U.S.C. 1001 in connection with its offer on Solicitation No. FGS-X8-38010-N. It alleged that General knowingly, willfully, and falsely represented to GSA that the equipment schedule and price lists submitted with General's 1988 offer was General's established commercial price list. Jt. Stips. Appen. at p. 54. General pled guilty to Criminal Information No. J90-00080(B) on December 19, 1990 and was ordered to pay a fine of $10,000 and to make just restitution to the GSA in the amount of $28,000. The conviction was also used as the basis for the federal debarment of General. Jt. Stips. Appen. at p. 54. Mr. Wright and Mr. Majure were also debarred by virtue of their conduct in connection with the General conviction. Jt. Stips. Appen. at pp. 54- 59. General and MISSCO are affiliated companies. General is a wholly-owned subsidiary of MISSCO. MISSCO is directed and governed by its executive committee which acts in lieu of the board of directors. Mr. Majure was a director of MISSCO, a member of MISSCO'S executive committee, a senior vice president of MISSCO, and president, director, and general manager of General. Jt. Stips. Appen. at p. 59. Mr. Majure held a position of substantial responsibility in both MISSCO and General, and through MISSCO's control group is accountable for the circumstances of General's crime. Jt. Stips. Appen. at p. 60. A decision not to impose federal debarment on MISSCO was predicated on MISSCO management's decision to ensure that it did not supply the Federal government with the same goods and services formerly provided by General during the period of General's debarment: MISSCO management made a commitment to emphasize ethical business practices: the people responsible for General's crime were no longer employed by MISSCO: the GSA administrative record (with the exception of General) does not indicate a lack of business integrity or poor performance on federal contracts. Jt. Stips. Appen. at pp. 61-63. Federal debarment of General was predicated upon the following: conviction of the crime of making false statements posed a substantial risk to government business dealings: General submitted false information on solicitations over an extended period of time: General fabricated price lists and false certification son two prior solicitations: General's crime posed a substantial danger to the integrity of the Federal government's MAS program: the accountable individuals for the crime were high-ranking officials at General. Jt. Stips. Appen. at pp. 63-66. The federal debarment proceedings found mitigating factors in that: the parties pled guilty and cooperated with the Department of Justice throughout the investigation: the parties cooperated with GSA throughout the debarment proceedings: General was not charged with deliberate overcharges on its federal MAS contracts: General promptly paid its fine and restitution: General has made good faith efforts to undertake remedial action. Jt. Stips. Appen. at pp. 68-69. On April 9, 1993, Respondent issued Notices of Intent pursuant to Section 287.133(3)(e)1, Florida Statutes, which were received by the Petitioners. Jt. Stips. p. 5, Appen. at pp. 72-73. On April 13, 1993, Petitions filed petitions pursuant to Section 287.133(3)(e)2, Florida Statutes, and Section 120.57(1), Florida Statutes, requesting an order determining that it is not in the public interest for Petitioners to be placed on the State of Florida Convicted Vendor List. Jt. Stips. p. 5, Appen. at pp. 74-75. MISSCO is a holding company which has a number of operating divisions and two wholly-owned subsidiary corporations, General Equipment Manufacturers (General) and MISSCO Exports Corporation (Exports). Jt. Stips. p. 2, Appen. at pp. 35-36. Interstate of Florida is a Division of MISSCO and is a dealer (re- seller) of General's products. Jt. Stips. p. 2. General and MISSCO are commercially distinguishable and they do not occupy the same facilities. MISSCO's primary lines of business are distribution of school equipment and supplies, office equipment and supplies, and commercial printing. Jt. Stips. p. 4. MISSCO Exports is an entity formed solely for accounting and tax purposes, has no employees, and does not engage in substantive commercial operations. Jt. Stips. p. 4. MISSCO has extensive dealings with the federal government, as supplier of goods manufactured by other entities. General is the only MISSCO entity that contracts with the government under the Multiple Awards Schedule (MAS) program. General's primary line of business is manufacturing institutional furniture. Jt. Stips. pp. 4-5. In compliance with paragraphs 287.133(3)(a) and (B), Florida Statutes, MISSCO made timely notification to the DMS and provided details of the conviction of General, by letter dated March 24, 1992 and provided copies of the criminal information, judgement and related correspondence. Jt. Stips. p. 5, Appen. at pp. 37048. Payment of the fine in the amount of $10,000 and restitution in the amount of $28,000 imposed by the conviction and judgement entered April 5, 1991 were promptly paid by General on April 15, 1991. Jt. Stips. pp. 5-6, Appen. at pp. 47-48. Subsequent to the criminal information filed in the United States District court, Southern District of Mississippi in November of 1990, General entered a plea of guilty to the charge, thus eliminating the necessity for further investigation and trial. Jt. Stips. p. 6. The GSA in its findings and determination dated May 18, 1992, cited mitigating factors favorable to General and MISSCO. The factors included, cooperation with the Department of Justice throughout its investigation; cooperation with the GSA throughout the debarment proceeding; constructive dealings by counsel for MISSCO and General with the GSA Office of General Counsel on issues relating to the restrictions on MISSCO and General's business relationship with the government and government prime contractors. Jt. Stips. p. 6, Appen. at pp. 68-69. MISSCO fully cooperated with the DMS in connection with its investigation initiated pursuant to Section 287.133, Florida Statutes. Jt. Stips. p. 6. MISSCO formally filed its disclosure pursuant to Section 287.133(3)(b), Florida Statutes with the DMS by letter dated March 24, 1992, together with exhibits attached thereto. The letter specifically referred to the criminal information filed against General and the judgement entered by the Federal District Court. A copy of the criminal information and judgement were enclosed with the letter, together with a copy of correspondence between MISSCO and the GSA. Jt. Stips. pp. 8-9, Appen. at pp. 37-39. In response to a request dated April 15, 1992 from the DMS for additional information, MISSCO promptly furnished all such information. Jt. Stips. p. 9. At its meeting held December 17, 1992, the Board of Directors of MISSCO was convened and all of the offices then held by Mr. James T. Majure, former President of General, were declared vacant and other persons were elected to those positions. Jt. Stips. p. 7, Appen. at pp. 2, 67, 70. Mr. Charles Wright was retired from General under a medical disability prior to 1990. Jt. Stips. p. 7. MISSCO Corporation fully cooperated with the GSA by proposing and implementing remedial measures including the presentation of an Ethics Seminar by Mr. Norman Roberts, past chairman of the American Bar Association's section on government contracting. Jt. Stips. p. 7. MISSCO revised its corporate Code of Ethics, revised its Employee Handbook, installed an 800 hotline telephone number permitting employees to communicate any concerns regarding business ethics, designated a Corporate Vice President as the Ethics Compliance Officer, appointed a committee of three corporate executives to monitor corporate business activities, and revised its internal audit procedures to insure that no cash is unaccounted for which might be used for the purpose of kickbacks. Jt. Stips. pp. 7-8, Appen. at pp. 28-33, 62-63. MISSCO's management undertook prompt and verifiable action to comply with the restrictions imposed on MISSCO's business dealings with the government after notices of proposed debarment. General promptly and voluntarily withdrew from the GSA contract that was tainted by the submission of a fabricated commercial price list during negotiations. Jt. Stips. p. 8. MISSCO had a code of business ethics in place when the circumstances leading to General's conviction arose. The code was amended following the initiation of debarment proceedings to specifically address the importance of truthful certifications and providing accurate information in connection with business transactions with the government. Jt. Stips. p. 8. MISSCO substantially expanded its corporate ethics compliance program and undertook extensive training in business ethics. A detailed "ethics audit" was undertaken by MISSCO, and the results of this audit were provided to the GSA. Jt. Stips. p. 8, Appen. at pp. 10-22, 28-34. General sells its products through a dealer network and not through factory direct sales. General has a dealer agreement with Interstate of Florida for the sale of its products in Florida to private and public entities. Jt. Stips. p. 9. Interstate of Florida, a division of MISSCO Corporation of Jackson, is a dealer (re-seller) of General's products. There are other dealers throughout the United States which also market and sell General's products. Interstate of Florida had gross sales of approximately $6.8 million in fiscal year 1990-91. Approximately 99 percent of those sales were to public entities. Jt. Stips. p. 9. Interstate of Florida is primarily an educational sales company which sells educational contract furnishings such as laboratory casework, auditorium seating, and folding bleachers. It has conducted business with almost every school district in Florida. The largest transactions have been conducted with the school districts of Dade and Orange Counties in Florida. The largest municipal transactions have been conducted with the City of Tallahassee. Jt. Stips. p. 10.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is, RECOMMENDED: That the Department not place the names of the Petitioners on the Florida Convicted Vendor List. DONE and ENTERED this 29th day of July, 1993, in Tallahassee, Florida. STEPHEN F. DEAN 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 29th day of July, 1993. COPIES FURNISHED: William H. Lindner, Secretary Department of Management Services Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, FL 32399-0950 Susan B. Kirkland, Esquire Department of Management Services Knight Building, Suite 309 Koger Executive Center 2737 Centerview Drive Tallahassee, FL 32399-0950 C. Graham Carothers, Esquire Ausley, McMullen, McGehee Carothers & Proctor Post Office Box 391 Tallahassee, FL 32392 Terry A. Stepp, Esquire Department of Management Services Knight Building, Suite 309 Koger Executive Center 2737 Centerview Drive Tallahassee, FL 32399-0950
The Issue The issue in this case is whether Respondent should award a contract to Intervenor to provide physical and occupational therapy services to approximately 1,300 exceptional education students who qualify for such services in 77 public schools in Brevard County, Florida.
Findings Of Fact Intervenor is the incumbent contractor for physical and occupational therapy services provided to Respondent. Intervenor has provided such services to Respondent for approximately six years. On February 24, 1999, Respondent issued its request for proposals ("RFP") for occupational and physical therapy services. The RFP consists of eight unnumbered pages. Ten companies responded to the RFP. However, only the proposals of Petitioner and Intervenor are at issue in this proceeding. A four-member evaluation committee ranked each proposal on the basis of six categories. The six categories were: experience; qualification; recruiting ability; location of office; and responsiveness. The evaluation committee also considered the hourly rate and mileage to be charged by each proposer. The evaluation committee met as a body. Each member of the committee then returned to his or her respective office to complete a scoring sheet. The scoring sheet listed each proposer's name in a column down the left side of the sheet and the six categories for evaluation from left to right across the top of the sheet. A column down the right side of each sheet listed the hourly rate to be charged by the proposer identified in the column down the left side of the sheet. The RFP does not prescribe a scoring formula to be used in completing the scoring sheets. In relevant part, the RFP merely states: . . . The Selection Committee shall rank the firms in order of preference and will submit its recommendation to the Superintendent for his consideration. The [Board] will bear responsibility for the selection of the Contractor and will decide which bid [sic] is most appropriate for Brevard schools and their students. The Superintendent will recommend a therapy service provider which will be presented to the . . . Board for approval at a regular or special Board meeting. RFP at unnumbered page 8. All four members of the evaluation committee ranked Intervenor's proposal first and Petitioner's proposal second. However, the hourly rate in Petitioner's proposal was the lowest of all proposers, at $34.75, and $4.25 less than the $39 hourly rate quoted in the proposal submitted by Intervenor. The proposal submitted by Intervenor charged mileage in addition to the hourly rate while the hourly rate quoted by Petitioner included mileage. Before May 11, 1999, when the Board selected Intervenor as the proposer, the evaluation committee met. The committee asked Respondent's buyer assigned to the contract if the committee was required to recommend the proposal with the lowest price. The buyer advised the committee that the contract was for professional services and did not require the committee to recommend the lowest-priced proposal. The committee determined that Ms. Eva Lewis, one of its members and the Director of Program Support for Exceptional Student Education in Brevard County, should telephone Intervenor and ask if Intervenor would match Petitioner's price. Ms. Lewis telephoned Mr. Rick McCrary, the manager for Intervenor, and asked if Intervenor would accept the contract price of $34.75. After consultation with his superiors, Mr. McCrary agreed to the straight-rate price of $34.75. On May 11, 1999, Ms. Lewis presented the recommendation of the evaluation committee to the Board. The Board asked Ms. Lewis if Intervenor's price was the lowest price. Ms. Lewis disclosed that the evaluation committee preferred the proposal submitted by Intervenor, asked Intervenor to lower its price to meet that of Petitioner, and that Intervenor agreed to do so. The Board voted unanimously to select Intervenor as the proposer to be awarded the contract. The parties directed most of their efforts in this proceeding to the issues of whether competitive bidding requirements apply to the proposed agency action and whether the scoring formula used to rank the proposers complied with those requirements. Petitioner asserts that the selection of Intervenor by the Board violates the competitive bidding provisions in Section 120.57(3), Florida Statutes (1997). (All chapter and section references are to Florida Statutes (1997) unless otherwise stated). Intervenor and Respondent contend that Section 120.57(1), rather than Section 120.57(3), controls the Board's selection of Intervenor for the contract. Although the document used by Respondent to obtain proposals from vendors describes itself as an RFP and describes the responses as either proposals or bids, Respondent and Intervenor suggest that the document is not an RFP but merely a "solicitation." Respondent and Intervenor further argue: . . . that the . . . Board . . . did not attempt to comply with the requirements for competitive procurement under Section 120.57(3) or Chapter 287. . . . And . . . that the . . . Board was never required to comply with those statutes. . . . these are contracts for professional, educational and health services, contracts uniquely and specifically exempted from [the] competitive bid procurement process. Transcript ("TR") at 40. It is not necessary to reach the issue of whether Section 120.57(1) or the competitive procurement provisions in Section 120.57(3) and Chapter 287 control Respondent's selection of Intervenor as the proposer to be awarded the contract. In either event, the proposed agency action is contrary to the specifications in the RFP. Assuming arguendo that Section 120.57(3) and Chapter 287 do not apply to the contract at issue in this proceeding, Respondent failed to comply with RFP specifications. As Intervenor and Respondent point out in their joint PRO, Section F.8. of the RFP states: The . . . Board . . . and the selected proposer will negotiate a contract as to terms and conditions for submission to the . . . Board for consideration and approval. In the event an agreement cannot be reached with the selected proposer in a timely manner, then the . . . Board reserves the right to select an alternative proposer. (emphasis supplied) Intervenor and Respondent are also correct that the phrase "negotiate a contract as to terms and conditions" includes terms and conditions such as the contract price. Contrary to the provisions of Section F.8., the Board did not first select a proposer at its meeting on May 11, 1999, and then negotiate a contract price with the selected proposer. Rather, the evaluation committee negotiated a contract price with Intervenor before May 11, 1999, and the Board then selected Intervenor as the successful proposer. The evaluation committee is not the Board and does not have authority to act on behalf of the Board. As the RFP states, the evaluation committee has authority only to: . . . rank the firms in order of preference and . . . submit its recommendation to the Superintendent for his consideration. The [Board] will bear responsibility for the selection of the Contractor and will decide which bid [sic] is most appropriate for Brevard schools and their students. The Superintendent will recommend a therapy service provider which will be presented to the . . . Board for approval at a regular or special Board meeting. RFP at unnumbered page 8. The last sentence in Section F.8. makes clear that the right to select a proposer is the sole province of the Board and not the evaluation committee. Even if one were to ignore the legal distinctions between the evaluation committee and the Board and the authority of each, the RFP specifications fail to provide adequate notice to potential proposers of the true purpose for the RFP. As Respondent and Intervenor state in their joint PRO: . . . the . . . Board used the proposals it received to test the market for physical and occupational therapy services in Brevard County. The . . . Board then used the information it developed from the proposals as negotiating leverage to obtain a price concession from its incumbent contractor. The . . . Board's negotiation tactics permitted it to secure the superior vendor at the price of an inferior vendor. PRO at 33. The RFP fails to disclose that Respondent intended to use potential proposers to obtain negotiating leverage with the incumbent contractor. The failure of the RFP to disclose its purpose violates fundamental principles of due process, adequate notice, and fairness to potential proposers. It creates a gap between what agency staff knew of the Respondent's intent for the RFP and what potential proposers could know from reading the specifications in the RFP. The failure of the RFP to disclose its true purpose suggests that its authors recognized the chilling effect such a disclosure would have had on the response of potential proposers. The lack of responses from potential proposers, in turn, would have frustrated Respondent's intent to "secure the superior vendor at the price of an inferior vendor." Assuming arguendo that Section 120.57(3) controls the contract award at issue in this proceeding, Respondent's proposed agency action violates relevant provisions in Section 120.57(3)(f). In relevant part, Section 120.57(3)(f) provides: In a competitive procurement contest, other than a rejection of all bids, the Administrative Law Judge shall conduct a de novo proceeding to determine whether the agency’s proposed action is contrary to the agency’s governing statutes, the agency’s rules, or policies, or the bid or proposal specifications. The standard of proof for such proceedings shall be whether the proposed agency action was clearly erroneous, contrary to competition, or arbitrary, or capricious. . . . (emphasis supplied) As previously found, the proposed award of the contract to Intervenor is contrary to the RFP specifications, including specifications for the evaluation and selection process described in paragraphs 7 and 17, supra. The proposed agency action is clearly erroneous within the meaning of Section 120.57(3)(f). It violates fundamental notions of due process, adequate notice, and a level playing field for all proposers. All of the proposers who were induced by the terms of the RFP to expend the time, energy, and expense required to prepare and submit proposals were entitled to rely in good faith on the specifications in the RFP and to require Respondent to adhere to its own specifications. The proposed agency action is also contrary to competition within the meaning of Section 120.57(3)(f). The economic incentive to respond to an RFP would likely diminish over time if the proposed agency action were to persist. Potential proposers would eventually recognize the RFP process as a device intended to reduce the contract price of the incumbent provider rather than as a bona fide business opportunity for potential proposers to gain new market share. Such an economic environment would not likely induce potential proposers to incur the time and expense necessary to prepare and submit proposals. The pool of potential proposers would shrink, and Respondent would lose negotiating leverage with the incumbent vendor. The likely result would be an erosion of negotiating leverage and an accretion in costs.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a Final Order finding that the selection of Intervenor for the contract award is contrary to the RFP specifications and contrary to competition. DONE AND ENTERED this 3rd day of September, 1999, in Tallahassee, Leon County, Florida. DANIEL MANRY 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 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 3rd day of September, 1999. COPIES FURNISHED: Dr. David Sawyer, Superintendent Brevard County School Board 2700 Judge Fran Jamieson Way Viera, Florida 32940-6699 Harold Bistline, Esquire Stromire, Bistline, Miniclier, Miniclier and Griffith 1970 Michigan Avenue, Building E Cocoa, Florida 32922 Jonathan Sjostram, Esquire Steel Hector and Davis, LLP 215 South Monroe Street, Suite 601 Tallahassee, Florida 32301 Edward J. Kinberg, Esquire Edward J. Kinberg, P.A. 2101 South Waverly Place Suite 200E Melbourne, Florida 32901
The Issue The issue in this case is whether Petitioner, Conval-Care, Inc., is entitled to the payment of attorney fees and costs pursuant to Section 57.111, Florida Statutes, from the Agency for Health Care Administration, the successor in interest to the Respondent, the Department of Health and Rehabilitative Services.
Findings Of Fact By letter dated November 4, 1991, the Department of Health and Rehabilitative Services (hereinafter referred to as the "Department"), notified Conval-Care, Inc. (hereinafter referred to as "Conval-Care"), that it intended to impose an administrative fine on Conval-Care pursuant to Section 409.913(9)(c), Florida Statutes. Conval-Care contested the proposed fine and requested a formal administrative hearing, including a request that it be awarded attorney fees and costs pursuant to Section 57.111, Florida Statutes. The matter was designated case number 92-0126 and was assigned to the Honorable Judge Robert T. Benton, then Hearing Officer Benton. On June 30, 1993, following a formal hearing held on March 24, 1993, Hearing Officer Benton entered a Recommended Order recommending dismissal of the sanctions letter of November 4, 1991. The findings of fact made by Hearing Officer Benton, in Conval-Care, Inc. v. Department of Health and Rehabilitative Services, DOAH Case No. 92-0126, are hereby adopted to the extent relevant to this proceeding. On September 19, 1993, the Department entered a Final Order. The Department accepted and incorporated into its Final Order the findings of fact made by Hearing Officer Benton. The Department, however, rejected Hearing Officer Benton's conclusions of law to the extent that he not had concluded that Conval-Care lacked authority to reject the demand for its records which was the subject of the proceedings. The Department concluded that, in light of the fact that Conval-Care had acted on the advice of counsel, it would reduce the fine from $25,000.00 to $5,000.00. The Department's decision was appealed by Conval-Care. On December 16, 1994, the District Court of Appeal, First District, filed an opinion reversing the Department's Final Order. Mandate from the First District was entered January 3, 1995. On February 14, 1995, Conval-Care filed a Petition for Attorneys Fees and Costs in this case. Conval-Care requested an award of $15,000.00 as a small business party pursuant to the provisions of Section 57.111, Florida Statutes. Attached to the Petition were the Final Order entered by the Department, the Recommended Order, the First District's Opinion and Mandate, an Attorney's Affidavit stating the nature, extent and monetary value of the services rendered and costs incurred in the proceedings, the Petition for Formal Administrative Hearing filed by Conval-Care in 1991 and the Department's November 4, 1991 sanctions letter. On March 2, 1995, the Agency for Health Care Administration, the successor in interest of the Department (hereinafter referred to as "AHCA"), filed a Response in Opposition to Petition for Attorney's Fees and Costs. 10 In its Response, AHCA admitted all of the allegations contained in paragraphs 1 through 6 and 8 through 9 of the Petition. AHCA denied the allegations of paragraph 7 of the Petition. Paragraph 7 of the Petition alleged the following: 7. The action of DHRS, in filing the admini- strative complaint against CCI, was not sub- stantially justified because there was no reasonable basis in law or fact to support the issuance of its letter seeking to impose an administrative fine upon CCI. Attached to the Response was an Affidavit from John M. Whiddon in support of its position that its actions were substantially justified. The Affidavit does not add any alleged credible justification not presented to Hearing Officer Benton or the First District Court of Appeal. AHCA did not assert in it Response the following: that the costs and attorney's fees claimed in Conval-Care's affidavit were unreasonable; that Conval-Care is not a prevailing small business party; that circumstances exist that would make an award unjust; or that AHCA was a nominal party only. AHCA also did not "either admit to the reasonableness of the fees and costs claimed or file a counter affidavit [specifying each item of costs and fee in dispute] along with its response." Finally, AHCA did not request an evidentiary hearing in its Response. The only issue which AHCA asserted in its Response was at issue in this proceeding is whether AHCA's actions were substantially justified. On April 6, 1995, an Order to Provide Information was entered. Although the parties had not requested an evidentiary hearing, the undersigned entered the Order soliciting input from the parties before the undersigned decided whether a hearing was necessary on the one issue raised by the Department. In the Order, the parties were given an opportunity to provide input concerning the procedures they believed should be followed to resolve this matter. The parties were specifically requested to answer certain specified questions, including the following: 1. Do the parties believe that an [sic] hearing is necessary to resolve any factual disputes and/or for purposes of oral argument before a decision is rendered? * * * 5. Do the parties agree that the documents attached to the Petition and the Response should be considered in rendering a decision in this case? . . ." Conval-Care filed a response to the April 6, 1995 Order indicating that there was no need for a hearing. Conval-Care asserted that a hearing would be improper unless Conval-Care consents to one. Conval-Care also asserted that all of the documents attached to petition should be considered. AHCA filed a response to the April 6, 1995 Order indicating that "[t]he Respondent feels a hearing in this matter is essential." AHCA did not provide any explanation of why it believed a hearing was necessary or any discussion of whether a hearing was authorized under the applicable statutes and rules. AHCA also indicated in its response that it "agrees that the documents attached to the Petition and Response should be considered in this case " On May 19, 1995, an Order Concerning Final Order was entered. Based upon a review of the pleadings and the lack of explanation from either party to justify an evidentiary hearing, it was concluded that no evidentiary hearing was necessary. Therefore, the parties were informed in the May 19, 1995 Order that a hearing would not be held in this case. The parties were also informed that they could file proposed final orders on or before May 30, 1995. Conval-Care filed a proposed order. AHCA did not. Neither Conval-Care nor AHCA timely requested an evidentiary hearing in this case. Both parties agreed that the documentation filed with Conval- Care's Petition and AHCA's Response could be relied upon in reaching a decision in this case. Based upon AHCA's failure to contest most of the relevant issues in this proceeding, the only issue which requires a decision if whether the Department's actions against Conval-Care were substantially justified. The documents, including the Mr. Whiddon's Affidavit filed by AHCA with its Response, sufficiently explain why the Department took the actions it took against Conval-Care which led to this proceeding. No evidentiary hearing was, therefore, necessary. The weight of the evidence failed to prove that the Department's actions in this matter were substantially justified. The Department could have sought the information it wanted by pursuing available discovery. Counsel for Conval-Care even remained the Department of the availability of discovery. The Department, however, rather than pursuing the information which it indicated it needed, elected to pursue a punitive action against Conval-Care rather than obtaining the information through discovery. The Department's reason for pursuing punitive actions against Conval-Care was not convincing to Hearing Officer Benton. Despite this fact, the Department entered a Final Order upholding its actions and imposing a fine of $5,000.00 for refusing to provide it with information which it could have obtained through other means. The First District Court reversed the Department's Final Order opining that the Department "lacked a legitimate investigatory purpose for demanding the records" which gave rise to its action against Conval-Care. Finally, the entire record in this case failed to indicate that there was any basis in law or fact to substantially justify the actions of the Department.
The Issue Is Petitioner entitled under Section 57.111(4), Florida Statutes, to attorney's fees and costs incurred in DOAH Case No. 97-5194?
Findings Of Fact Outcome of Prior Administrative Proceeding Thomas A. Birkhead, d/b/a Century Center ("Birkhead," "Mr. Birkhead, or the "business") is a business in the form of a sole proprietorship. On August 4, 1997, the Division of Hotels and Restaurants (the "Division") served the business with a Notice to Show Cause. Seven weeks or so earlier, on June 13, 1997, the business had been served with an Emergency Order of Suspension. The Emergency Order suspended the business's license to operate a public lodging establishment in Cocoa Beach, Florida, as a nontransient rooming house. The license, bearing number 15-04001 H, had been issued to Mr. Birkhead by the Division. Mr. Birkhead requested a hearing on both the Emergency Order and the Notice to Show Cause. The request was referred to DOAH and assigned Case No. 97-5184. Unlike this case for fees and costs in which Mr. Severs has appeared in behalf of Mr. Birkhead, at no time during the pendency of DOAH Case No. 97-5184 did any attorney, including Mr. Severs, file a notice of appearance or appear in any capacity on behalf of Mr. Birkhead. The hearing held in April and June of 1998 (at which Mr. Birkhead appeared pro se) culminated in a Recommended Order issued October 1, 1998. The order recommended that the Notice to Show Cause be dismissed but that the Emergency Order be sustained. On May 14, 1998, the Division issued a Final Order. The Order makes no mention of Mr. Birkhead having been represented in any capacity other than pro se in post-recommended order proceedings. In acceptance of the advice of the Recommended Order, the Division dismissed the Notice to Show Cause. As for the recommendation with regard to the Emergency Order the final order stated: The Emergency Order of Suspension was a final order of the Division and subject to judicial review pursuant to section 120.60(6) and 120.68, Florida Statutes, not administrative review. Thus, the part of Birkhead's request for formal administrative review that pertained to the issuance of the Emergency Order of Suspension should have been dismissed for lack of jurisdiction. Final Order, page 9, Paragraph 16. Accordingly, the Division ordered that "Birkhead's Motion to Dismiss is hereby granted and the request for formal administrative review of the Emergency Order of Suspension is hereby dismissed." Final Order, page 10. Attorney's Fees and Costs When Case No. 97-5184 was initiated, Mr. Severs had long represented Mr. Birkhead as an attorney in various matters. His normal billing rate during the life of the case was $175 per hour. Although Mr. Severs did not appear as attorney of record in the administrative case, from the time the Emergency Order of Suspension was issued in June of 1997, through the issuance of the Final Order by the Department in Case No. 97-5184, Mr. Severs provided legal services to Mr. Birkhead. Some of the services were related to the administrative case; some were related to other matters. The fees for these services, related or unrelated, totaled $14,929.95, according to the petition filed in this case. An affidavit by Mr. Severs, attached to the petition, showed that only $4,860 of that amount was related to the administrative case. The related services were performed on at least fifteen occasions. Principally these included review and/or drafting of documents and consultation with regard to the reviewed or drafted documents. Mr. Severs' records demonstrate that at least 32.4 hours were expended in the performance of legal services related to Case No. 97-5184. (There were many telephone consultations not included in these hours because Mr. Severs moved from one firm, to his own firm, to the Titusville City Hall, where he is now the full-time City Attorney for the City of Titusville. Because of these transitions, phone records became unavailable.) At an hourly rate of $150 (the rate requested by Petitioner for this case, $25 below Mr. Severs' normal rate), total attorney's fees for 32.4 hours come to $4,860.00. These fees are reasonable. Court reporter costs in defending this action incurred by Mr. Birkhead totaled $478.50. He paid an expert witness fee in the amount of $200 to an engineer who testified in the proceeding. In addition, there were subpoenas for documents of $42; publications, such as the Fire Safety Manual 101, necessary to purchase in order to defend the case, in the amount of $49.35; photocopies of $48.10; office supplies of $56.12; postage and postage stamps of $173.52; and copier maintenance of $605.13. These costs total: $1,655.72. Mr. Birkhead also claimed additional costs of more than $10,000 used to maintain and operate the closed Century Center as an office for the duration of the administrative case. Mr. Birkhead explained this claim at hearing: The building that I was in there using as an office [Century Center] was shut down by the Division, so I could do nothing with it, except just work out of there myself to prepare this case, to work on the case. So, what I have given here is the direct charges of -- you know, that were during the time period for electricity and so forth. (Tr. 25). In addition to electricity, this sum includes charges for telephone, sanitation, pest control, water and sewer and fire extinguisher maintenance. Small Business Party The business's claim for attorney's fees and costs is filed under the authority of Section 57.111, Florida Statutes, a provision of the Florida Equal Access To Justice Act (the "Act.") Section 57.111(3)(d), Florida Statutes, of the Act defines the term "small business party," in pertinent part as: A sole proprietor of an unincorporated business . . . whose principal office is in this state, who is domiciled in this state, and whose business . . . has, at the time the action is initiated by a state agency, not more than 25 full-time employees or a net worth of not more than $2 million including both personal and business investments. . . Mr. Birkhead is the sole proprietor of the business, Thomas A. Birkhead, d/b/a Century Center. The business is unincorporated. Its principal office is in Florida. Mr. Birkhead is domiciled in Florida and his business has less than 25 full-time employees. The only criterion left in order for Thomas A. Birkhead, d/b/a Century Center to qualify as a small business party is net worth. Is Mr. Birkhead's net worth "not more than $2 million including both personal and business investments . . ."? Net Worth Mr. Birkhead's undocumented testimony that his personal net worth and that of the business was less than two million dollars was not rebutted by any evidence offered by the Division. Cross examination revealed that Birkhead's net worth in June of 1997 was certainly in excess of $1.5 million. How much in excess could not be determined because his calculation of net worth was anything but precise as shown from Mr. Birkhead's testimony: Q What is the value of the hotel located across the street from the Century Center? A The value of the hotel at that time, I believe was one and a half million dollars . . . Q What portion of the hotel did you own? A Um? Q What portion of the hotel did you own? A Two thirds. Two thirds of the stock. * * * Q . . . And what was the Century Center worth [in June of 97]? * * * A Well, I had a mortgage against it for two hundred and some thousand dollars. I gave, I believe, five hundred something. So, five hundred and something minus two, whatever it was, forty or fifty thousand, two hundred and thirty five or forty thousand. It would leave three hundred thousand dollars. Q . . . Your testimony is that you've had an equity in the Century Center of three hundred thousand dollars? A That was my intention, to say that. Yes. I subtracted out in my mind the mortgage that I had against the property, versus what I had paid for it. Q And when did you purchase it? A I purchased it . . .in 1990. Q But you don't . . . know what the value was in 1997? A Not at the Century Center. * * * Q . . . What other properties did you own, besides the Century Center, the hotel and the condo in Cape Canaveral? A I own my house. Q How much is it worth? A Well I paid sixty five thousand for it, I believe. It's probably worth a little bit more than that now. * * * JUDGE: When did you buy it? * * * WITNESS: When did I buy it? I bought it in -- let's see. Twenty five years ago or more. * * * Q Was there any other property that we didn't cover so far that you owned at that time? A Let me think a little bit. Yeah. I've got one in Cape Canaveral. It's an empty lot up there. I think I paid very little for it. I bought it because it was cheap. It's the only reason I've still got the thing. I think I gave eighteen hundred dollars for it or something like that. It think it would be worth more than that now. I don't know exactly what it would be worth. Try to sell it. These lots go up, you know, they might be worth fifteen to twenty thousand dollars. I can't -- I can't give you an exact figure on that. JUDGE: When did you buy it? * * * A . . . April of 1967, I believe. * * * JUDGE: . . . What Mr. Biggins is getting at is he wants to know about all our your personal and business investments and what their . . . net worth is. And you said you made a list and you went through and you figured this out. WITNESS: Say what? JUDGE: You said that you figured this out before you filed this motion for attorney's fees . . . WITNESS: Yeah. I called and got the figures as to what I had in June of '97. And I looked at, you know, statements that I had, and this that and the other thing, and added it all up. . . Some of the things, like I say, are joint with my wife. JUDGE: Yes, sir. But what were those things? That's what I want to know. You say you did this calculation. You got together all this information. Now, what information was it and what did the information show? WITNESS: Well, it showed the value of the things that I had in June of '97. JUDGE: And what were those things? What information did you obtain? WITNESS: Well, bank accounts, stock brokers, whatever I could, you know, had money in. JUDGE: . . . What was the value of the bank accounts? WITNESS: Not a whole lot. I don't think I probably had over -- I'm guessing a little bit now. You know, three or four thousand dollars. JUDGE: How about stock? WITNESS: Um? JUDGE: Stock? WITNESS: Stock, what? JUDGE: Equities. WITNESS: Um? JUDGE: Equities? New York Stock Exchange? WITNESS: Well, my stock is largely in a joint account with my wife. And . . . JUDGE: . . . You have control of it? WITNESS: Um? JUDGE: You have control of it? WITNESS: Well, either one of us could be called in control. It's joint . . . with right of survivorship. JUDGE: . . . Did you include the value of that stock in this calculation you did? WITNESS: I believe I did. Yes sir. JUDGE: . . . And what was the value of that stock? WITNESS: I can't recall, Your Honor, exactly what it was. JUDGE: Well, we've been . . . dealing with approximations here. So, do your best. WITNESS: Well, it's a joint account. JUDGE: And what's the value of the account? WITNESS: . . . I think it's somewhere in the neighborhood of probably seventy five or a hundred thousand dollars. JUDGE: And you can't do any better than that? WITNESS: Um? JUDGE: You can't pinpoint it any more than that, a twenty five thousand dollar swing? WITNESS: I can't to be honest with you, Your Honor . . . (Tr. 38-50). Mr. Birkhead's testimony also revealed that he owned two "low priced condos in Cape Canaveral" (Tr. 36) held as rental property. At the time he purchased them, Mr. Birkhead "gave twenty four thousand and change for them." Id. Asked when they were purchased, Mr. Birkhead replied, "I'm not sure. Before 1997." When asked to approximate when they were purchased, Mr. Birkhead testified, "Five, ten years. I don't know." Id.
