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?