CEO 87-23 -- April 23, 1987

CONFLICT OF INTEREST

SCHOOL BOARD MINORITY BUSINESS ENTERPRISE ADVISORY COMMITTEE

MEMBER CONTRACTING WITH SCHOOL BOARD

To: J. Robert Stobs, II, Member, Dade County School Board Minority Business Enterprise Advisory Committee, Miami

SUMMARY:

A prohibited conflict of interest would be created under subsections (3) and (7) of Section 112.313, Florida Statutes, where an officer of a general contracting firm serves as a member of a school board's minority business enterprise advisory committee and his firm does business with the school board. However, Section 112.313(12), Florida Statutes, provides an exemption to these prohibitions for persons serving on advisory boards. An additional exemption exists where the business is awarded under a system of sealed, competitive bidding. CEO 82-51 is referenced.

QUESTION:

Would a prohibited conflict of interest be created where the secretary-treasurer of a general contracting firm serves as a member of a school board's minority business enterprise advisory committee and his firm does business with the school board?

Your question is answered in the affirmative, subject to the exceptions noted below.

In your letter of inquiry you advise that you are a member of the Dade County School Board Minority Business Enterprise Advisory Committee. The Committee was established pursuant to Board rule as a standing committee to assist in the development, implementation, and evaluation of a minority business enterprise program. Committee members are appointed either by the Superintendent or the Board members. This Committee has formulated, with the school board staff's input, guidelines aimed at increasing participation of minority business enterprises doing business with the School Board.

You further advise that you are the secretary-treasurer of a state-certified general contracting firm that has contracted for work with the School Board in the past. These contracts have been acquired by a sealed, competitive bidding process. You question whether your firm may continue doing business with the Dade County School Board while you serve on its Minority Business Advisory Committee.

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.

(c) Appointment to public office.

(d) Beginning public employment.

[Section 112.313(3), Florida Statutes (1985).]

This provision prohibits a public officer from being an officer of a business entity which sells any goods or services to the agency which he serves. Additionally, Section 112.313(7), Florida Statutes, prohibits a public officer from having an employment or contractual relationship with a business entity which is doing business with his agency.

Nevertheless, as the Committee serves as an advisory board, the exemption of Section 112.313(12), Florida Statutes, for persons serving on advisory boards would be applicable here. That exemption permits the appointing body of an advisory board member to waive a particular conflict of interest of that member upon full disclosure of the transaction or relationship and an affirmative, two-thirds vote. See CEO 82-51. In instances in which appointment to the advisory board was made by an individual, waiver may be effected, after public hearing, by a determination by the appointing person and full disclosure of the transaction or relationship by the appointee to the appointing person. We have promulgated CE Form 4A, "Disclosure of Business Transaction, Relationship, or Interest," for use in making the disclosure required by this provision.

In addition, the Code of Ethics contains an exemption where:

(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 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), Florida Statutes (1985).]

Therefore, so long as the Dade County School Board uses a system of sealed, competitive bidding to award a contract, your firm may bid on that contract if you comply with the three requirements of the exemption. The disclosure required by this provision should be made on Commission on Ethics Form 3A, "Interest in Competitive Bid for Public Business."

Accordingly, we find that a prohibited conflict of interest would be created were you, the secretary-treasurer of a general contracting firm, to serve on the Dade County School Board's Minority Business Enterprise Advisory Committee, if your firm does business with the school system. We also find that this conflict may be waived in accordance with Section 112.313(12), Florida Statutes, or may be exempted under the provisions of Section 112.313(12)(b), Florida Statutes, where the business is awarded under a system of sealed, competitive bidding.