CEO 01-7 -- March 20, 2001
CONFLICT OF INTEREST
DEPARTMENT OF TRANSPORTATION DISTRICT EMPLOYEES SELLING BORROW MATERIAL TO SUCCESSFUL BIDDER OF A DEPARTMENT BRIDGE PROJECT
To: J. T. Brown, Jr, Quality Control Maintenance Engineer, Department of Transportation (Lake City)
SUMMARY:
Under the circumstances presented, no prohibited conflict of interest would be created were two Department of Transportation District employees who are married to each other to sell borrow material to a contractor for use in a Department bridge project. They would not be acting as "purchasing agents" for their District to purchase borrow material from their property for the District, and they are not in the business of selling borrow material. Therefore, the first part of Section 112.313(3), Florida Statutes, does not apply to prohibit them from selling borrow material from their property to a company contracting with their District. Similarly, the second part of Section 112.313(3) does not apply to prohibit them from selling the borrow material because they would not be selling the borrow material in their private capacities to the District. Rather they would be selling the borrow material to a company that is contracting with the District.
However, by agreeing to sell borrow material to the company, the employees would have a contractual relationship with a company that would be doing business with their agency in violation of the first part of Section 112.313(7)(a). Nevertheless, because the employees were and are not in positions to give advice or recommendations regarding the bridge project to the District, because they had and have no involvement in the planning, prioritizing, or the selection of the company for the bridge project, because they neither had nor have any public responsibilities relative to the bridge project, and because their sale of borrow material to the company would not interfere with the full and faithful discharge of their public duties, Section 112.316 may be applied to negate the prohibitions of Section 112.313(7)(a), Florida Statutes.
QUESTION:
Would a prohibited conflict of interest be created were you, a Quality Control Maintenance Engineer employed by District 2 of the Florida Department of Transportation, and your wife, who also is employed by the District but as an Assistant District Planning Manager, to sell borrow material to a company that was awarded a bid on a planned Department of Transportation bridge project?
Under the circumstances presented, your question is answered in the negative.
By your letter of inquiry, we are advised that both you and your wife are employed in Lake City by the Florida Department of Transportation ("FDOT") respectively as a Quality Control Maintenance Engineer and as an Assistant District Planning Manager. We also are advised that because you and your wife own property that is suitable for use by construction companies as a borrow pit for sand and soil in the vicinity of a planned FDOT bridge project, you have been asked by the successful bidder on the project, Anderson Columbia ("company"), if you would be interested in selling borrow material to the company.[1] However, you are concerned about whether prohibited conflicts of interest would be created for you and/or your wife were you to sell borrow material to the company.
Neither you nor your wife, in your official capacities as employees of FDOT District 2, are responsible for or involved in the selection of contractors who bid on road or bridge projects, you advise. Furthermore, you write that neither you nor your wife are involved with inspecting or approving any of the work performed by the contractors on these projects.
You have provided us with copies of written Career Service System Position Descriptions ("Position Description[s]") for both you and your wife. Your Position Description indicates that, as a Quality Control Maintenance Engineer for FDOT District 2, a position that you have held since November 1999, you are responsible for "insuring the quality of maintenance and repair activities performed by State forces and contractors." Among your duties and responsibilities as listed on your written Position Description are the following:
< Reviewing maintenance procedures in order to establish measurements for a quality control program for districtwide maintenance activities;
< Reviewing state force and contract maintenance and repair activities and performing quality control checks for the District Maintenance Office;
< Monitoring the District Bridge and Maintenance Units' quality control programs and coordinating any necessary improvements with the respective units; and
< Keeping the District Maintenance Engineer apprised of deficient areas (areas not meeting the District's "procedural guidelines").
Your wife's Position Description indicates that, as Assistant District Planning Manager for FDOT District 2, she has responsibilities relative to the development of the Department's Five Year Work Program, its budget, and the Urban Transportation Studies for Department planning. Among her duties and responsibilities listed on her written Position Description are the following:
< Supervising the District's Urban Planning Section and developing and maintaining in "priority order" a candidate list of all capacity improvements for roadway segments in the District, coordinating, also in "priority order," projects for preservation, bridges, traffic operations, and other "candidate projects" for inclusion in the Five Year Work Program, as well as performing an equity analysis of funds spent in the various counties within the District to assure that the programmed projects are distributed equitably;
< Scheduling and assisting the presentation of the Department's Five Year Work Program to local governments, Metropolitan Planning Organizations (MPO's), and audiences at other public hearings, and serving as liaison and providing technical assistance to local governments, MPO's, regional planning offices, and other State agencies relative to various planning programs, project priorities, and available funding options; and
< Preparing and administering the District Planning Budget and Work Program and preparing a multi-year budget relative to expenses and Capital Outlay and the District's Planning Work Program.
Relevant to your inquiry are the following provisions of the Code of Ethics for Public Officers and Employees:
DOING BUSINESS WITH ONE'S AGENCY.--No employee of an agency acting in his or her official capacity as a purchasing agent, or public officer acting in his or her official capacity, shall either directly or indirectly purchase, rent, or lease any realty, goods, or services for his or her own agency from any business entity of which the officer or employee or the officer's or employee's spouse or child is an officer, partner, director, or proprietor or in which such officer or employee or the officer's or employee's spouse or child, or any combination of them, has a material interest. Nor shall a public officer or employee, acting in a private capacity, rent, lease, or sell any realty, goods, or services to the officer's or employee's own agency, if he or she is a state officer or employee, or to any political subdivision or any agency thereof, if he or she is serving as an officer or employee of that political subdivision. The foregoing shall not apply to district offices maintained by legislators when such offices are located in the legislator's place of business. This subsection shall not affect or be construed to prohibit contracts entered into prior to:
(a) October 1, 1975.
(b) Qualification for elective office.
(c) Appointment to public office.
(d) Beginning public employment.
[Section 112.313(3), Florida Statutes.]
CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP.--No public officer or employee of an agency shall have or hold any employment or contractual relationship with any business entity or any agency which is subject to the regulation of, or is doing business with, an agency of which he or she is an officer or employee, excluding those organizations and their officers who, when acting in their official capacity, enter into or negotiate a collective bargaining contract with the state or any municipality, County, or other political subdivision of the state; nor shall an officer or employee of an agency have or hold any employment or contractual relationship that will create a continuing or frequently recurring conflict between his or her private interests and the performance of his or her public duties or that would impede the full and faithful discharge of his or her public duties. [Section 112.313(7)(a), Florida Statutes.]
Unless one of the exemptions of Section 112.313(12), Florida Statutes, applies, Section 112.313(3), Florida Statutes, prohibits both you and your wife from acting in your official capacities to purchase any realty, goods, or services for your respective agencies from a business entity of which you and/or your wife or child is an officer, partner, director, or proprietor, or in which you and/or your wife or child owns more than a five percent interest. It also prohibits you and your wife from acting in your private capacities to sell realty, goods, or services to your respective agencies. The term "agency" is defined in the Code to mean
any state, regional, county, local, or municipal government entity of this state, whether executive, judicial, or legislative; any department, division, bureau, commission, authority, or political subdivision of this state therein; or any public school, community college, or state university. [Section 112.312(2), Florida Statutes.]
Therefore, for purposes of the Code of Ethics, we find that your "agency" and your wife's "agency" is FDOT District 2. See CEO 88-58 and CEO 92-13.
For purposes of applying Section 112.313(3) here, the term "business entity" also is defined at Section 112.312(5) to mean
any corporation, partnership, limited partnership, proprietorship, firm, enterprise, franchise, association, self-employed individual, or trust, whether fictitiously named or not, doing business in this state. [E.S.]
Because we have no indication that either you or your wife would be acting as a "purchasing agent" to purchase borrow material from your property for FDOT, and because we also have no indication that you and/or your wife are in the business of selling borrow material for purposes of allowing us to find that you and/or your wife are a "business entity," we find that the first part of Section 112.313(3) would not apply.
We also are of the opinion that the second part of Section 112.313(3) is not implicated because there is no indication that you would be selling the borrow material to FDOT District 2. Rather, you have indicated that you would be selling the borrow material to the company.
Unless one of the exemptions of Section 112.313(12), Florida Statutes, applies, Section 112.313(7)(a), Florida Statutes, prohibits you and your wife from having a contractual relationship with the company if the company either is doing business with or is subject to the regulation of FDOT District 2, or if you and your wife's contractual relationship with the company would create a continuing or frequently recurring conflict between your and/or your wife's private interests and the performance of your and/or your wife's public duties or an impediment to the full and faithful discharge of your and/or your wife's public duties. For purposes of Section 112.313(7)(a), the phrase "conflict of interest" is defined at Section 112.312(8), Florida Statutes, to mean "a situation in which regard for a private interest tends to lead to disregard of a public duty of interest."
By agreeing to sell borrow material to the company, you and your wife would have a contractual relationship with a company that would be doing business with FDOT District 2, your agency, relative to the planned bridge project in violation of the first part of Section 112.313(7)(a). However, Section 112.313(12), Florida Statutes, contains a number of exemptions to the prohibitions of Sections 112.313(3) and 112.313(7)(a). Among the exemptions and the most relevant to your proposed sale of borrow material to the company, are Sections 112.313(12)(b) and (12)(f), Florida Statutes, which provides as follows:
EXEMPTION.-- . . . In addition, no person shall be held in violation of [Section 112.313(3)] or [Section 112.313(7)] if:
(b) The business is awarded under a system of sealed, competitive bidding to the lowest or best bidder and:
1. The official or his spouse or child has in no way participated in the determination of the lowest or best bidder.
2. The official or his spouse or child has in no way used or attempted to use his influence to persuade the agency or any personnel thereof to enter such a contract other than by the mere submission of the bid;
3. The official, prior to or at the time of the submission of the bid, has filed a statement with the Department of State, if he is a state officer or employee, or with the supervisor of elections of the county in which the agency has its principal office, if he is an officer or employee of a political subdivision, disclosing his interest, or the interest of his spouse or child, and the nature of the intended business.
(f) The total amount of the transactions in the aggregate between the business entity and the agency does not exceed $500 per calendar year.
Section 112.313(12)(b) provides an exemption to the prohibitions of Sections 112.313(3) and 112.313(7)(a) where the business is awarded under a system of sealed competitive bidding, but only where: (1) neither you nor your wife or child has participated in either the determination of the bid specifications or the lowest and best bidder; (2) neither you nor your wife or child has used or attempted to use your or her influence to persuade the District or any of its employees to enter into the contract with the company, other than by the mere submission of a bid; and (3) you and your wife, prior to or at the time of submission of the bid, filed statements [CE Form 3A] with the Florida Department of State disclosing your interests and the nature of the intended business. See CEO 94-9. Thus, in order for the exemption to apply, all of the requirements of Section 112.313(12(b) would have had to have been met, including your filing a form CE Form 3A prior to or at the time of the company's submission of its bid to the District.
Although you have advised that the company was selected for the FDOT Bridge Project pursuant to a "sealed competitive bid" process, and neither you nor your wife had any role in establishing the specifications for the project, in determining the lowest or best bidder, or in the selection in any other manner of the company for the project, we are of the opinion that this exemption would not apply because you could not have filed a CE Form 3A [Interest in Competitive Bid for Public Business] prior to or at the time that the company submitted its bid to the District.
Similarly, we find that the Section 112.313(12)(f) exemption would not apply. In previous opinions interpreting the exemption of Section 112.313(12)(f), with the exception of CEO 82-17, we have applied the $500 exemption to the amount of public funds expended between the business entity, the company in this case, and the agency, the FDOT District, rather than to the amount of compensation received by the public officer or employee from the business entity. See, for example, CEO 85-25, CEO 85-11, and CEO 84-67. Therefore, regardless of the amount of compensation that you are paid for the borrow material, because the amount of the contract between FDOT or FDOT District 2 and the company is presumably a great deal more than $500, we find that this exemption would not apply.
Nevertheless, we believe that under the specific circumstances presented, Section 112.316, Florida Statutes, may be applied to negate the prohibitions of Section 112.313(7)(a). Section 112.316, Florida Statutes, provides as follows:
CONSTRUCTION.--It is not the intent of this part, nor shall it be construed, to prevent any officer or employee of a state agency, or county, city or other political subdivision of the state or any legislator or legislative employee from accepting other employment or following any pursuit which does not interfere with the full and faithful discharge by such officer, employee, legislator, or legislative employee of his duties to the state or the county city, or other political subdivision of the state involved.
This provision requires that the Code of Ethics not be interpreted to preclude private employment which does not interfere with the full and faithful discharge of a public employee's duties. See CEO 92-30 and CEO 86-30.
In CEO 93-26, we observed that because one of the central purposes of Section 112.313(7)(a), Florida Statutes, is to prohibit those situations in which a public officer or employee obtains preferential treatment from, or awards public business to, a business with which he is associated, we have interpreted Section 112.316, Florida Statutes, to apply to situations in which an employee is not in a position to give advice or recommendations regarding any business transacted between his agency and a business entity. See CEO 76-10 and CEO 88-2. We also have applied it and found no conflict where the employee had no input into her agency's purchasing decision (CEO 82-76), the employee's public responsibilities were removed from the organization employing him and its contract with his agency (CEO 84-20), the employee played no role in the contracting process between his agency and his private employer, his public duties were unrelated to the private employer and its contract with his agency (CEO 84-24, CEO 84-99 and CEO 89-62), the employment did not interfere with the full and faithful discharge of the public employee's discharge of his public duties (CEO 86-24), and the employee had no role in the licensure or inspection of his private employer (CEO 87-34 and CEO 89-62).
You have indicated that as Quality Control Maintenance Engineer, you were only involved with quality control as it relates to routine maintenance and repair activities performed by Maintenance Units and their maintenance contractors (presumably the company is not a maintenance contractor), and as Bridge Maintenance Engineer prior to October 1999, you were only involved in routine bridge maintenance activities. Therefore, you claim that you do not have and have not had any involvement with the subject bridge project or with any similar projects.
Similarly, your wife also claims to have had no involvement with the subject bridge project. She advises that the Bridge Replacement Program is a statewide program managed by the FDOT Central Office where priorities are set for the entire State. The planning of the bridge project, we are advised, was conducted in the District's Environmental Management Office through a Project Development and Environmental Study (PD&E). The only involvement that your wife's planning office had relative to the project related to public involvement coordination in order to insure that the businesses and residents in the immediate area of the project were aware of it. The coordination, your wife writes, was handled by an employee in the District's Gainesville Regional Planning Office.
Because neither you nor your wife were in positions to give advice or recommendations regarding the bridge project to the District, because neither you nor your wife had any involvement in the planning, prioritizing, or the selection of the contractor for the bridge project, because neither you nor your wife had or have any public responsibilities relative to the bridge project, and because neither you nor your wife have any involvement with the company relative to any other District projects, we find that under the circumstances presented your sale of borrow material to the company will not interfere with the full and faithful discharge of your public duties. Accordingly, we are of the opinion that Section 112.316 may be applied to negate the prohibitions of Section 112.313(7)(a), Florida Statutes.
However, our conclusion here pertains only to our application of the Code of Ethics, that is Part III, Chapter 112, Florida Statutes, to the situation that you describe. You also should be aware that Section 112.326, Florida Statutes, recognizes an agency's ability to adopt more stringent ethical standards for its employees than those contained in Section 112.313(7)(a) or other provisions of the Code of Ethics. For example, Section 334.193, Florida Statutes, provides as follows:
UNLAWFUL FOR CERTAIN PERSONS TO BE FINANCIALLY INTERESTED IN PURCHASES, SALES, AND CERTAIN CONTRACTS; PENALTIES.--
(1) It is unlawful for a state officer, or an employee or agent of the department, or for any company, corporation, or firm in which a state officer, or an employee or agent of the department has a financial interest, to bid on, enter into, or be personally interested in:
(a) The purchase or the furnishing of any materials or supplies to be used in the work of the state.
(b) A contract for the construction of any state road, the sale of any property, or the performance of any other work for which the department is responsible.
(2) Any person who is convicted of a violation of this section is guilty of a misdemeanor of the first degree, punishable as provided in s. 775.082 or s. 775.083, and shall be removed from his or her office or employment. [Section 334.193, Florida Statutes.]
In order to implement this provision, FDOT has promulgated Rule 14‑17.011, F.A.C. [Ethical Conduct], which provides in relevant part as follows:
Conflict of Interest Regarding Contracted State Work and/or Purchase of Property, Materials, or Supplies Prohibited.
(a) No employee of the Department shall bid on, enter into, or be personally interested in:
1. The purchase or furnishing of any materials or supplies to be used in the work of the State;
2. A contract for the construction of any State road, the sale of any property to the State; or
3. The performance of any other work for which the Department is responsible. [Rule 14-17.011(7), F.A.C.]
Since the Rule is beyond our jurisdiction to interpret,[2] we recommend that you consult directly with the "appropriate executive level manager," as provided for in Rule 14-17.011(1)(f), F.A.C., concerning whether a prohibited conflict of interest would exist under FDOT's rules were you to enter into a contract with the company to sell borrow material.
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
[1]You advise that, while no details concerning price had been discussed with the company, you have learned that the company generally pays $0.25 per yard for borrow material and the project requires approximately 18,000 yards of borrow material. However, you also advise that part of the agreement with the company would be that any excavation that it makes be "graded and dressed" so that it holds water and has an "acceptable appearance." Consequently, you believe that the actual compensation that you receive from the company could be as little as "nothing" to as much as $4,000 to $5,000.
[2]In addition to our receipt and investigation of sworn complaints of violations of the Code of Ethics (Part III, Chapter 112, Florida Statutes), or any other alleged breach of the public trust as provided in Art. II, Section 8(f), Florida Constitution, we are authorized to render formal opinions to public officers, candidates for public office, public employees, such as yourself, and to any public officer or employee having the power to hire or terminate employees, concerning the applicability and interpretation of the Code or the Sunshine Amendment to such employees. We have no jurisdiction to address any possible conflicts of interest that may exist under rules promulgated by agencies pursuant to statutes outside of the Code of Ethics unless specifically provided for by the Legislature. Here, the Legislature has not authorized us to interpret either Section 334.193, Florida Statutes, or any of the provisions of Rule 14-17.011, F.A.C.