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Preliminary Report to the Leon County School BoardNovember 10, 2014
Henry M. Coxe, III
Brian T. Coughlin
Bedell Firm
101 E. Adams St.
Jacksonville, FL 32202
Background and Scope
Scope of engagement
Initially, to advise Leon County School District employees during law enforcement investigation to the extent necessary, and to coordinate with government authorities
Broadened into an investigation, for the benefit of the Leon County School Board, focused primarily on the Department of Construction and Facilities
The “Notebook”
Scope includes allegations in the notebook related to construction activities within the District
Goals
Objectively review all facts and opinions
Identify shortcomings in decision making and operation
Make recommendations with focus on improving:
-efficiency
-transparency
Resources available
We have had cooperation from the Office of the Superintendent and the Department of Construction and Facilities
Also from some former employees and independent witnesses
No authority to compel information from non-District employees
Majority of investigation complete
40+ interviews
Thousands of documents, both internal and external
Construction Contracts
Awarded based on improper considerations?
Political contributions
Personal relationships
Division of construction projects
Why were projects divided?
Was it lawful to divide projects?
Applicable law
Construction Contracts
Governed by Section 287.055, Florida Statutes, also known as the Consultants’ Competitive Negotiation Act (CCNA)
Section 255.103, Florida Statutes, provides that the District may enter into “continuing contracts,” pursuant to the process required by the CCNA, for contracts that do not exceed $2 million
Continuing Contracts
A contract for professional services between an agency
and a firm whereby the firm provides professional services
to the agency for projects in which the estimated
construction cost of each project under the contract does
not exceed $2 million … or for work of a specified nature
as outlined in the contract required by the agency.
§287.055(2)(g), Florida Statutes
CCNA
Designed to provide clear procedures for governmental agencies to follow to:
-make contracting for professional services more competitive
-require employment of the most qualified and competent individuals and firms at fair, competitive, and reasonable compensation
CCNA
1. Public announcement
2. Competitive Selection
-only certified/prequalified individuals or firms
3. Competitive Negotiation
Public Announcement
The government agency shall publicly announce, in a uniform and consistent manner, each occasion when professional services must be purchased for a construction project
§287.055(3)(a)1., Florida Statutes
Competitive SelectionIn determining whether a firm is qualified, the agency shall consider such factors as:
-the ability of professional personnel
-whether a firm is a certified minority business enterprise
-past performance
-willingness to meet time and budget requirements
-location
-workloads of the firms
-volume of work previously awarded to the firms by the agency
Competitive Selection
“… with the object of effecting an equitable distribution of contracts among qualified firms, provided such distribution does not violate the principle of selection of the most highly qualified firms.”
§287.055(4)(b), Florida Statutes
Competitive Negotiation
The agency shall negotiate a contract with the most qualified firm for professional services at compensation which the agency determines is fair, competitive, and reasonable.
§287.055(5)(a), Florida Statutes
Competitive Negotiation
If unable to negotiate a satisfactory contract with the most qualified firm at a price the agency determines to be fair, competitive, and reasonable, negotiations with that firm must be formally terminated. The agency shall then undertake negotiations with the second most qualified firm. (Then third, fourth, etc.)
§287.055(5)(b), Florida Statutes
Preliminary Findings
Awarding of contracts
We have not identified evidence that construction contracts were selected or assigned with criminal or fraudulent intent
Political contributions and construction projects
Allegation in the notebook:
“The appearance that the Superintendent and Assistant Superintendent are actively lobbied and influenced by potential contractors and consultants …”
“The appearance …”
Those involved in the compilation of “the notebook” told us that they had no direct proof
No one within or connected to the Department of Construction and Facilities has offered proof
No bid protests by contractors
Contributions to Pons’ campaigns(2006 to present)
0
2
4
6
8
10
12
$ T
hou
san
ds
Contractor
Assigned contracts(January 2007 to January 2014)
0
2
4
6
8
10
12
14
$ M
illi
on
s
Contractor
Political Contributions
$80,849 , 9%
$776,188 , 91%
Contractors
Other
Division of projects
Intended to divide large projects so they could be assigned to multiple firms pursuant to continuing contracts
Examples:
Griffin Middle School (2)
Killearn Lakes Elementary School (2)
Gilchrist Elementary School (2)
Kate Sullivan Elementary School (3)
Griffin Middle School
Has drawn much attention
First divided project
Selection committee interviews nearly halted
Last minute change
February 24, 2009:
Closing of Belle Vue Middle School approved
March 9, 2009 to April 9, 2014:
Rezoning meetings
April 14, 2009:
Selection Committee interviews
Presentation to LCSB
Presentation to LCSB
Why divide?
Local economy
-recession began in late 2007, businesses hurting
-spread projects among a broad group of local contractors
-maintain viable base for the district’s future work
Timeline issues
-finite periods of time to spend and build
Control
Stated motivation is altruistic
Superintendent is a hands-on leader
Division of projects allowed maintenance of control
Audit recommendation
State Auditor General critical of the practice:
“District records did not evidence the basis upon which the District separated the CME construction and upfit services into two different projects. In these circumstances, the District effectively circumvented the provisions of Section 287.055, Florida Statutes …”
Practice continued for a small number of projects that had already been approved, then was stopped
Efforts to avoid competitive selection
Gilchrist Elementary
Consent agenda
$1,999,782
Efforts to avoid competitive selection
Ghazvini Center – Gym
$1,999,999
Assignment of contractors
“Talent to the task”
Documentation extensive, but lacking in reasoning behind assignments
Assignment of contractors
When asked for further insight:
“A committee was not used for selection, however the following factors were evaluated: past experience of the contractor, current workload of the contractor, and ability to complete project on time and within budget.”
Allows criticism and skepticism to thrive
Continuing Contracts
The continuing contract provision of 287.055, Florida Statutes, represents an exception to the general competitive bidding provisions of the act and should be read narrowly and utilized sparingly in order to avoid an appearance of circumventing the requirements of the statute.
Florida Op.Atty.Gen., 2013-28 (2013)
Recommendations
Steps already taken
Move away from placement on consent agenda
Provide more extensive information to LSCB regarding construction issues
Selection projects
Stay true to the statutory intent of CCNA
Consider providing guidelines for who should sit on the selection committees
Assigned projectsProcess considerations
How should the decisions get made?
By whom?
Thoroughly document analysis and factors behind assignments
Create standard documents for use
Consider threshold $ amount for assignment
($1.5 million?)
Other issues
Explore best term length for continuing contracts
Disclosure cap for dollars spent under continuing contract
Create specific guidelines for when amendments or change orders are appropriate, especially with GMP contracts
Be sure to prequalify on annual basis, pursuant to SREF 4.1
Maintain public confidenceA candidate may not, in the furtherance of his or her candidacy for nomination or election to public office in any election, use the services of any state, county, municipal, or district officer or employee during working hours.
§106.15(3), Florida Statutes
A step further, consider keeping employees involved in election efforts completely separate from selection and assignment of contracts
Maintain public confidence
Consider requiring disclosure when political contributions came from those attempting to do business with the District
Designate a person or entity available to district employee to address concerns or answer questions
Summary
• No evidence of criminal or fraudulent intent
• Projects divided
• Need for better documentation as to reasoning
• Stay true to applicable statutes
• Emphasis on transparency
Questions?