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Preliminary Report to

the Leon County


School Board
November 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 Selection
In 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)
12

$ Thousands

10
8
6
4
2
0

Contractor

Assigned contracts

(January 2007 to January 2014)


14
12

$ Millions

10

8
6
4
2
0

Contractor

Political Contributions
$80,849 , 9%

Contractors

Other

$776,188 , 91%

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 districts 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 projects
Process 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 confidence


A 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?