CEO 80-2 -- January 17, 1980

CONFLICT OF INTEREST

ENGINEER EMPLOYED BY CITY ACTING AS GENERAL CONTRACTOR OR PROFESSIONAL ENGINEER ON WORK WITHIN CITY

To: George L. Farmer, Head of the Engineering Design Section, Hollywood

Prepared by: Phil Claypool

SUMMARY:

Section 112.313(7)(a), F. S., prohibits a public employee from having a contractual relationship with a business entity subject to the regulation of his public agency. The term "agency" is defined in the Code of Ethics to mean "any . . . municipal government entity of this state . . . any department, division, bureau . . . therein . . . ." Section 112.312(2), F. S. When a municipal engineering department consists of three divisions which are not mandated by law but rather reflect a differentiation between the primary responsibilities of the department, the entire department is deemed to constitute the employee's "agency" for purposes of the Code of Ethics. Therefore, an engineer who serves as head of engineering design for that city is prohibited from privately working as either a general contractor or engineer for construction projects within the city, based on the fact that his agency, the engineering department, regulates the work of construction contractors and engineers by review, inspection, and permitting. His engaging in work on projects outside the city would pose no problem under the Code of Ethics inasmuch as they would not be subject to inspection, review, or supervision by the city. A public employee further is prohibited by s. 112.313(3) from acting in a private capacity to sell any goods or services to the municipality he serves or to any agency thereof. An exemption from this prohibition provided in s. 112.313(12)(b) is not deemed to be applicable when the subject engineer wishes to act as general contractor on city construction projects because, in his capacity as head of engineering design, he will have substantial responsibilities in the design of city projects to be let out for bids. Therefore, he would be prohibited from acting as a general contractor on city construction projects while being employed by the city as head of engineering design.

QUESTIONS:

1. Would a prohibited conflict of interest be created were I, the Head of Engineering Design for the City of Hollywood, to work as a general contractor within or outside of the city?

2. Would a prohibited conflict of interest be created were I, the Head of Engineering Design for the City of Hollywood, to act as general contractor on city construction projects?

3. Would a prohibited conflict of interest be created were I, the Head of Engineering Design for the City of Hollywood, to design plans as a registered professional engineer for construction projects located within or outside the city?

Question 1 is answered in the negative regarding work outside the city and in the affirmative regarding work located within the city.

In your letter of inquiry you advise that presently you are employed as Head of the Engineering Design Section for the City of Hollywood, in which position you are responsible for the preparation of plans and specifications for various municipal construction projects. You further advise that the engineering design section is part of the city's engineering department. That department, which is headed by the city engineer, contains three divisions: the engineering division, the parking division, and the building division. The engineering division is further broken down into the design section and the field section. In a telephone conversation with our staff, you advised that the field section consists of two survey crews and a city inspector who are involved only with projects of the city. The design section, you advise, prepares plans for municipal projects, which go to the building division for its review. It is the building division which is responsible for inspecting construction within the city and for reviewing plans submitted to it. Finally, the parking division is responsible for city parking facilities.

The Code of Ethics for Public Officers and Employees states 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 . . . 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 private interests and the performance of his public duties or that would impede the full and faithful discharge of his public duties. [Section 112.313(7)(a), F. S.]

This provision prohibits a public employee from having a contractual relationship with a business entity subject to the regulation of his public agency; it also prohibits a public employee from having a contractual relationship that will create a continuing or frequently recurring conflict of interest or that would impede the full and faithful discharge of his public responsibilities. In previous opinions we have advised that this provision prohibits a public employee from private work which would place him in a position of inspecting or approving his own work or the work of his associates. See CEO's 76-113, 76-42, and 76-2A. Similarly, we have advised that this provision would prohibit a county plumbing and gas inspector from performing electrical contracting work within the county on the ground that his work would be inspected by another member of his agency. See CEO 79-41.

The term "agency" is defined in the Code of Ethics to mean "any . . . municipal government entity of this state . . . any department, division, bureau . . . therein . . . ." Section 112.312(2), F. S. Although the city engineering department consists of three divisions, you have advised our staff in a telephone conversation that these divisions are not mandated by law but rather reflect a differentiation between the primary responsibilities of the department. It is our opinion that the language "any department, division, bureau . . . therein" in the definition of "agency" was intended to include only those departments, divisions, and bureaus created by law or authorized to be established pursuant to law. See, for example, s. 20.04, F. S., defining the terms "department," "division," and "bureau" for purposes of departments of state government. Therefore, we find that your "agency" is the city engineering department.

As your agency regulates the work of construction contractors by review, inspection, and permitting, your outside employment within the city would be subject to the regulation of your agency, in violation of s. 112.313(7)(a), F. S. Your engaging in work as a general contractor on projects outside of the city would pose no problem under the Code of Ethics inasmuch as such projects would not be subject to inspection, review, or supervision by the city. See CEO 78-87.

Accordingly, we find that a prohibited conflict of interest would be created were you, the Head of Engineering Design for the City of Hollywood, to work as a general contractor within the city. No prohibited conflict of interest would be created were you to work as a general contractor outside the city.

Your second question is answered in the affirmative.

In your letter of inquiry you advise that you are contemplating acting as general contractor on city construction projects. Relative to this situation, the Code of Ethics provides as follows:

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 prohibits a public employee from acting in a private capacity to sell any goods or services to the municipality he serves or to any agency thereof. Therefore, you would be prohibited from contracting with the city to provide services as a general contractor on city construction projects.

The Code of Ethics provides several exceptions to the operation of the above-quoted provisions, 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 previous opinions we have advised that if the requirements of this provision are complied with, an officer or employee of a city may sell goods or services to the city. See CEO 77-130.

However, it is apparent that this exemption was intended by the Legislature to apply only when the public officer or employee had totally recused himself from dealing with the subject matter of the bid in his public capacity. As head of the design section of the engineering department, however, you will have substantial responsibilities in the design of a city project which would be let out for bid. Therefore, we find that the competitive bidding exemption would not apply in your situation.

Accordingly, we find that you would be prohibited from acting as a general contractor on city construction projects while being employed by the city as the head of engineering design for the city.

Your third question is answered in the negative regarding projects outside the city and in the affirmative regarding projects located within the city.

In your letter of inquiry you advise that, in the near future, you will be a registered professional engineer and would like to do work in the City of Hollywood as well as in other areas of the state. This situation is substantially the same as that referred to in question 1; therefore, we find that a prohibited conflict of interest would be created were you to design plans as a registered professional engineer for construction projects located within the city while remaining the Head of Engineering Design for the City of Hollywood. Similarly, no prohibited conflict of interest would be created were you to design plans as a registered professional engineer for construction projects located outside the city.