CEO 78-64 -- September 8, 1978

CONFLICT OF INTEREST

MEMBER OF BASIN BOARD SUBCONTRACTING AS CONSULTING ENGINEER WITH CONSULTING ENGINEERING FIRM DOING BUSINESS WITH BASIN BOARD

To: Robert Grafton, District Counsel, South Florida Water Management District, West Palm Beach

Prepared by: Phil Claypool

SUMMARY:

As the Code of Ethics prohibits a public officer from having a contractual relationship with a business entity doing business with his public agency, a prohibited conflict of interest would be created were a member of a basin board to enter into a contract with a consulting engineering firm contractually performing work for the board. Section 112.313(7)(a), F. S. 1977. As the board member was serving on the board at the time the contract was awarded the consulting engineering firm, and because the need for subcontracting was not apparent at that time, the exemption contained in s. 112.313(12)(b), relating to competitive bidding and including prior disclosure by the officer, is not applicable. Relative to potential future subcontracting work by the board member, no prohibited conflict would be created so long as the restrictions, procedures, and disclosure mandated by s. 112.313(12)(b) are complied with.

QUESTIONS:

1. Would a prohibited conflict of interest be created were a basin board member to subcontract as a consulting engineer with an engineering firm to help perform a contract which has been entered into between the basin board and the engineering firm?

2. Would a conflict of interest be created were the subject basin board member to subcontract as a consulting engineer with an engineering firm doing business with the basin board under a contract negotiated at a future date?

Question 1 is answered in the affirmative.

In your letter of inquiry you advise that the 1977-1978 annual budget of the Board of the Big Cypress Basin included a sum of money for engineering consulting services, part of which services involved obtaining and analyzing water samples from test wells within the basin. You also advise that through appropriate legal procedures an engineering firm was employed to undertake this work. However, after the contract was awarded, it became apparent that it would be quite expensive were the firm to undertake the water sampling and analysis itself because it is based outside of the basin area. Therefore, the firm investigated costs which might be charged by either of the two local engineering firms who are equipped to handle such work. You also advise that the firm which would charge the lower price is partially owned by the subject basin board member.

The Code of Ethics for Public Officers and Employees provides in relevant part:

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 is an officer or employee . . . . [Section 112.313(7)(a), F. S. 1977.]

Were the subject board member to enter into a contract with the consulting engineering firm which previously has contracted with the basin board, it appears that he would have a contractual relationship with a business entity which is doing business with his agency, in violation of the above-quoted provision. There are several exemptions to the operation of this provision, one of which provides as follows:

. . . [N]o person shall be held in violation of subsection (3) or subsection (7) if:

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 bid specifications or 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; and

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 Clerk of the Circuit Court of the county in which the agency has its principal office, if he is an officer or employee of a political subdivision, disclosing his, or his spouse's or child's, interest and the nature of the intended business. [Section 112.313(12)(b), F. S. 1977.]

In your letter of inquiry you advise that the subject board member was serving on the board at the time the contract was awarded to the consultant and that he no doubt voted to approve that contract. You also advise that the consultant did not indicate until just recently that there would be any need or desire to use a local engineering firm for part of the work. As this is the case, the terms of the bidding exemption quoted above cannot be complied with by the subject board member.

Accordingly, we find that a prohibited conflict of interest would be created were the subject board member at this time to enter into a contract with the consulting engineering firm which has contracted with the basin board.

As to question 2, so long as the restrictions, procedures, and disclosure mandated by s. 112.313(12)(b) are complied with by the subject basin board member when a future contract for consulting engineering services is awarded by the basin board, no prohibited conflict of interest would be created. See CEO 77-155.