CEO 01-5 -- March 20, 2001

POST-EMPLOYMENT; CONTRACTUAL SERVICES

DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION EMPLOYEE LEAVING STATE EMPLOYMENT TO "OUTSOURCE" WITH DEPARTMENT ON COMPUTER PROJECT

To: Mr. Scott T. Stewart, Chief Information Officer, Department of Business and Professional Regulation (Tallahassee)

SUMMARY:

The Code of Ethics would not be violated when a former employee contracts with the State agency where he was formerly employed to serve as project director for a project that he helped initiate when he was employed by the agency. Rather than representing a client for compensation before his former agency, he would be contracting with the agency, so Section 112.313(9)(a)4, Florida Statutes, would not be applicable. The limitations in Sections 112.3185(3) and (4), Florida Statutes, would not be violated because the statutory language allows contractual relationships with an agency. However, the salary cap imposed by Section 112.3185(5), Florida Statutes, would limit the amount of compensation he could receive from the agency for the first year after he leaves State employment unless the agency head waives it after determining that contracting with him will result in significant time or cost savings to the State.

QUESTION:

Does the Code of Ethics prevent you from contracting, either directly or indirectly, with your former State agency to serve as project director of a program that you helped initiate while an agency employee?

Your question is answered in the negative.

In your letter of inquiry, you advise that you are employed by the Department of Business and Professional Regulation as its Chief Information Officer, a Senior Management Position (SMS). You advise that the Department is approaching the end of a procurement process to select a vendor for Business Process Re-Engineering and Electronic Information Management Services. In your position, you directed a 15-month preliminary feasibility study and procurement process that defined the core business functions and computer information support requirements. Now that the project is about to start, the Secretary has asked you to serve as its Project Director. Because of the nature and duration of the project, you would prefer that the Department obtain your services through a contract arrangement, either directly with you or through a third party. You question whether this would be permissible under the Code of Ethics for Public Officers and Employees.

There are two post-employment provisions applicable to State employees. Section 112.313(9)(a)4, Florida Statutes, provides in relevant part:

No agency employee shall personally represent another person or entity for compensation before the agency with which he or she was employed for a period of two years following vacation of position, unless employed by another agency of state government.

This restriction is applicable to you as an SMS employee. However, since you would not be representing another person or entity before the Department--rather, you would be contracting with the Department--it would not be violated by the proposed arrangement.

More relevant to your inquiry are the provisions in Section 112.3185, Florida Statutes, which provide:

(3) No agency employee shall, after retirement or termination, have or hold any employment or contractual relationship with any business entity other than an agency in connection with any contract in which the agency employee participated personally and substantially through decision, approval, disapproval, recommendation, rendering of advice, or investigation while an officer or employee.

(4) No agency employee shall, within 2 years of retirement or termination, have or hold any employment or contractual relationship with any business entity other than an agency in connection with any contract for contractual services which was within his or her responsibility while an employee.

(5) The sum of money paid to a former agency employee during the first year after the cessation of his or her responsibilities, by the agency with whom he or she was employed, for contractual services provided to the agency, shall not exceed the annual salary received on the date of cessation of his or her responsibilities. The provisions of this subsection may be waived by the agency head for a particular contract if the agency head determines that such waiver will result in significant time or cost savings for the state.

Sections 112.3185(3) and (4) restrict you from having an employment or contractual relationship with a business entity in connection with a contract for contractual services where you were involved in the procurement of the contract or where your employment is in connection with a contract which was within your area of responsibility while you were an agency employee. However, both provisions exclude contracts entered into with an agency. Therefore, while these provisions could be violated if you become employed by or contract with a business entity which, in turn, contracts with the Department (since it appears that you have been involved in the procurement process and the contract is in your area of responsibility as a Department employee), neither would be violated where you contract directly with the Department to serve as its Project Director. The only issue then is the salary limitation in Section 112.3185(5), Florida Statutes, which limits the amount of money the Department can pay you during the first year to no more than your annual salary as a Department employee. However, this provision may be waived by the Secretary of the Department if it is determined that contracting with you will result in significant time or cost savings to the State.

In a number of opinions where former State employees sought to contract with their former agencies to provide contractual services, we noted in the opinions we rendered to them that they had not been involved in the procurement process that led to their contracting with their former agencies. See CEO 88-7, CEO 84-115, CEO 84-30, and CEO 83-94. We recognize here that you have been involved in that procurement process, but that does not affect our decision under the circumstances presented, where there is no indication that you misused your position to obtain a special privilege or benefit under Section 112.313(6), Florida Statutes. We are aware that State government is intentionally moving towards policies that will create a smaller, more efficient government. The trend towards "privatization" of traditional governmental functions is expected to increase, while some services that agency employees formerly provided will be obtained from outside sources or "outsourced." Notwithstanding, we do not believe that Section 112.3185 would be violated were you to contract with your former agency to serve as Project Director of its Business Process Re-engineering and Electronic Information Management Services project, subject only to the salary limitation in Section 112.3185(5), Florida Statutes.

Your question is answered accordingly.

ORDERED by the State of Florida Commission on Ethics meeting in public session on March 15, 2001 and RENDERED this 20th day of March, 2001.

__________________________

Howard Marks

Chair