CONFLICT OF INTEREST; POST-EMPLOYMENT RESTRICTION

UNIVERSITY EMPLOYEE RESPONDING TO UNIVERSITY REQUEST FOR PROPOSAL PRIOR TO RETIRING

To: Louis Schilling, Project Manager for the Architecture/Engineering Department of the Physical Plant Division, University of Florida (Gainesville)

SUMMARY:

No conflict of interest would be created under Sections 112.313(3) or (7), Florida Statutes, were an architect employed by the University of Florida to respond to a Request for Proposals from the University for architectural services, where the employee had no role in preparing the Request and would retire prior to entering into any contract with the University. Section 112.3185(5) limits the amount of money which could be paid to the former employee for contractual services during the first year after leaving employment.

QUESTION:

Would a prohibited conflict of interest exist were you, an employee of the University of Florida, to respond to a Request for Proposals from the University?

Your question is answered in the negative.

Through your letter of inquiry, subsequent correspondence and documents you provided, and telephone conversations with our staff, we are advised that you are a registered architect and have been employed by the University of Florida ("University" or "UF") for more than 10 years as a Project Manager for the Architecture/Engineering Department of the Physical Plant Division. In this capacity, you state, you manage projects which have estimated construction costs from zero to $1,000,000, and your particular responsibilities are with the Quick Response Team, a section of the Department which handles projects with a cost of up to $100,000, although most fall between $10,000 and $60,000. According to your correspondence, after departments wishing to make minor modifications to their facilities issue a work order, you "investigate the condition of the building, the needs of the customer, etc [sic] and promulgate documents that a contractor can utilize to establish a price." If the contractor's quote is acceptable, you write, you help coordinate the construction and review and modify or approve the contractor's application for payment. You state that for some time now, and with the University's approval, you have practiced architecture "on the side," and that your business is not incorporated.

According to your letter, the University recently issued Requests for Proposals for Professional Services ("RFP's") for contracts relating to Continuing Renovation/Construction Minor Projects. The overall project had a number of components, you advise, and included eight contracts for architectural services. You relate that you responded in the categories of Small Architect ("small business" being defined as a business having been in existence for at least six months, having 25 or fewer employees, and less than $1,000,000 in annual revenues), Emerging Architect (defined as having performed less than $15,000 in design fees at UF over the past three years), and Small Emerging Architect (defined as meeting both the previous criteria). According to the Advertisement for Professional Services you provided, these are open-ended contracts for one year, with an option to renew for two years. The selected firms will provide "design, construction documents and construction administration services for any Minor projects assigned" with a maximum per-project cost of $1,000,000.

You write that you had absolutely no part in developing the RFP and no role in the selection process. Your immediate supervisor served on the five-member selection committee, but you advise that he represented that he would not participate in votes involving your proposal. The selection format involved an advertised meeting for all applicants, (which you did not attend, due to illness), followed by acceptance of applications and formulation of a "shortlist," and then interviews, scoring, and selection. You understand that you can not be employed by the University and at the same time contract with it, and you state that had you been selected it was your intent to retire from the University prior to signing any contract. Your question is whether any conflict was created by the fact of your applying for the contract while still employed. You state that while you did not make the "shortlist," with respect to this particular contract, the situation may recur in the future.

The Code of Ethics states, in relevant part:

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.
[Section 112.313(3), Florida Statutes.]

CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP.- (a) 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.]

As a University employee, your "agency," for purposes of these two statutes, is the University. Section 112.312(2), Florida Statutes, CEO 87-44. Therefore, Section 112.313(3) prohibits you from acting in a private capacity to sell goods or services to the University. In past opinions, we have said that "acting in a private capacity" includes situations where the public officer or employee is personally involved with the sale to the agency (CEO 81-50), situations where the official is an officer or director, or owns more than a 5% interest in a business, (CEO 81-2), and situations such as yours, where the public officer or employee is a sole proprietor of a business. CEO 76-2. The question here hinges not on whether your responding to the RFP constitutes acting in a private capacity-it clearly is-rather, the question is whether the response to the RFP in itself constitutes selling. None of our prior opinions address this question.¹

The term is not defined in the statute, but the first definition given by the American Heritage Dictionary, Third Edition (1993) for the verb "sell" is, "To exchange or deliver for money or its equivalent." This definition suggests that "selling" only occurs when a sale is actually accomplished. Such an interpretation is consistent with our precedent in other contexts, where we have said that the private interests giving rise to the conflict must be concurrent with the public service in order for a conflict to exist. For example, with respect to voting conflicts under Section 112.3143, Florida Statutes, we have said that the statute is not violated unless the relationship which creates the conflict exists at the same time the vote is taken. See, CEO 06-5, and the opinions cited therein. Similarly, in CEO 87-71, we observed, "Prior Commission opinions have found Section 112.313(7)(a), Florida Statutes, not to be violated in situations where the contractual relationships between the agency, employee, and private business entity were not concurrent."

Accordingly, we find that your responding to the University's RFP does not create a prohibited conflict of interest under Section 112.313(3), Florida Statutes.

We also find that your responding to the RFP would not violate Section 112.313(7), Florida Statutes. The first part of Section 112.313(7) prohibits you from having a contractual or employment relationship with any business entity regulated by or doing business with the University. As a sole proprietorship, you have an employment relationship with your own business. CEO 78-93. But again, since you plan to retire prior to signing any contract, your company's "doing business with" the University would not occur contemporaneously with your public employment.

The second part of Section 112.313(7) prohibits you from having any contractual relationship which would create a continuing or frequently recurring conflict between your private interests and the performance of your public duties, or that would impede the full and faithful discharge of your public duties. In Zerweck v. State Commission on Ethics, 409 So. 2d 57 (Fla. 4th DCA 1982), the court said that this provision establishes an objective standard which requires an examination of the nature and extent of the public officer's duties together with a review of his private interests to determine whether the two are compatible, separate and distinct, or whether they coincide to create a situation which "tempts dishonor." As you had no input into the drafting of the RFP and no role in the selection process, and nothing in the description of duties you have provided suggests any public responsibility which might be impacted by your responding, in your private capacity, to the University's RFP, this provision would not be violated.

Should you leave your position at the University, Section 112.3185(5), Florida Statutes, would apply. It provides, in pertinent part:

Additional standards for state agency employees.-

(1) For the purposes of this section:

(a) "Contractual services" shall be defined as set forth in chapter 287.

(b) "Agency" means any state officer, department, board, commission, or council of the executive or judicial branch of state government and includes the Public Service Commission.

(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. 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.

Section 112.3185 uses a different definition of "agency," than do Sections 112.313(3) or (7). It defines "agency," as "any state officer, department, board, commission or council of the executive or judicial branch of state government" and includes the Public Service Commission. Prior to July 1, 2001, the Board of Regents was the Director of the Division of Universities within the Department of Education, and in CEO 88-12, we found the Board of Regents to be the "agency" of a former employee of a state university for purposes of Section 112.3185. Effective July 1, 2001, the Board of Regents was abolished, and its duties were transferred to the Florida Board of Education, an arrangement which remained in place until the Constitution was amended in November 2002 to create a Board of Governors. Pursuant to Article 9, Section 7 of the Florida Constitution, the Board of Governors has the responsibility to "operate, regulate control, and be fully responsible for the management of the whole university system." Section 1001.705, Florida Statutes, provides that members of the Board of Governors are state officers subject to the ethics laws, that the Board of Governors is part of the Executive branch, and that state universities are agencies of the state for purposes of delineation of constitutional lines of authority, although exemptions for universities from laws pertaining to state agencies "are not repealed by virtue of this definition . . . ." Given the powers and duties of the Board of Governors and the analysis of CEO 88-12, we find that as a university employee, you are an employee of an "agency," i.e., the Board of Governors, for purposes of Section 112.3185.

Section 112.3185(5) prohibits your being paid by the University for your services in an amount greater than the annual salary you received prior to the termination of your employment, a prohibition which may be waived by the agency head upon a determination that such waiver will result in significant time or cost savings to the State.

In CEO 86-69 we dealt with a question from an employee of the Game and Fresh Water Fish Commission who sought to bid on a lakes management and operation contract to be awarded by the Commission through a sealed competitive bid process. In addressing the restriction of Section 112.3185(5), we said,

Because of the language used in the statute, we are of the opinion that the prohibition refers to the "gross" amount paid by the agency, rather than the "net" amount received by a former employee after subtracting the costs incurred by the former employee in the performance of the contract. The language used, "sum of money paid to a former agency employee," would seem to allow no other interpretation.

In CEO 88-12, we advised a former university associate director for test administration seeking to contract with the university that where the contract was to recruit, hire, and pay test center personnel, the payments to such personnel were "a material term of the contract" rather than "costs incurred by the former employee in performance of the contract." That being the case, we advised that such payments could be deducted from the gross received by the former employee in determining whether the payment from the university exceeded the limitation of Section 112.3185(5).

Nothing in the information or documents you have provided indicates that the engagement of others is a material term of the contract. Thus, in accordance with the plain language of the statute and our precedent, you would be limited in the first year to a gross payment from the University no greater than your most recent year's salary.

Accordingly, we find that no prohibited conflict of interest would exist were you to respond to a Request for Proposals from the University for architectural services, but that unless waived by the agency head, you are prohibited from being paid by the University for your services any amount more than the annual salary you received prior to the termination of your employment.

ORDERED by the State of Florida Commission on Ethics meeting in public session on July 25, 2008 and RENDERED this 30th day of July, 2008.

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Albert P. Massey, III, Chairman