CEO 80-31 -- May 21, 1980

CONFLICT OF INTEREST

HOSPITAL BOARD MEMBER PRESIDENT OF COMPANY SELLING TO HOSPITAL

To: Harold T. Phillips, Board of Trustees, Bay Memorial Hospital, Panama City

Prepared by: Phil Claypool

SUMMARY:

Although s. 112.313(3), F. S., prohibits a public official from doing business with his agency. Section 112.313(12)(b) provides an exemption from such prohibition when the business is awarded under a system of sealed, competitive bidding to the lowest or best bidder, and the official or his spouse or child has not participated in the determination of the bid specifications or award; no influence has been used on agency personnel relative to award of the bid; and the official, prior to or at the time of the submission of the bid, has filed a disclosure statement relative to the intended business. So long as the terms of this exemption are met, no prohibited conflict of interest is created when one serves on a public hospital's board of trustees while also acting as president of a company which sells meats to the hospital by sealed, competitive bidding.

QUESTION:

Would a prohibited conflict of interest be created were I to serve on a public hospital's board of trustees while also acting as president of a company which sells meats to the hospital by sealed, competitive bidding?

Your question is answered in the negative.

In your letter of inquiry you advise that recently you were appointed by the Governor as a member of the board of trustees of a public hospital. You also advise that you are the president of a meat and seafood company which has been selling meats to the hospital since 1961. Finally, you advise that the hospital buys its meats on the basis of the lowest or best bid awarded from among several vendors submitting sealed bids.

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

DOING BUSINESS WITH ONE'S AGENCY. -- No employee of an agency acting in his official capacity as a purchasing agent, or public officer acting in his official capacity, shall either directly or indirectly purchase, rent, or lease any realty, goods, or services for his own agency from any business entity of which he or his spouse or child is an officer, partner, director, or proprietor or in which such officer or employee or his 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 his own agency, if he is a state officer or employee, or to any political subdivision or any agency thereof, if he 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.

(d) Beginning public employment.

[Section 112.313(3), F. S.]

This provision would prohibit a hospital board member from being president of a company which is selling any goods to the hospital. However, the Code of Ethics also contains several exemptions to this provision, including the following:

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.]

In compliance with this provision, you have enclosed a completed copy of CE form 3A, which we have promulgated for use in making the disclosure required by this provision.

We are of the opinion that the competitive bidding exemption applies to the situation you have outlined because the hospital purchases its meats "under a system of sealed, competitive bidding to the lowest or best bidder." Accordingly, we find that the meat and seafood company of which you are president may sell meats to the hospital which you serve as trustee.