In re: Request for Opinion ISD Project No.

E13-WASD-01R Program and Construction Management Services Related to the Wastewater System Priority Projects for the Miami-Dade Water and Sewer Department. /

REPORT OF PROFESSOR ANTHONY V. ALFIERI ON PUBLIC PROCUREMENT ANTHONY V. ALFIERI, for his declaration pursuant to section 92.525, Fla. Stat. (2013), states under penalty of perjury that the following is true and correct: PROFESSIONAL BACKGROUND 1. I am a Professor of Law, Deans Distinguished Scholar, and the founding Director of the Center for Ethics and Public Service at the University of Miami School of Law, where I have taught civil procedure, lawyering skills, professional responsibility, and professional liability and legal malpractice since 1991.1 I am also a Visiting Scholar at the Dartmouth College Ethics Institute. 2. I earned an A.B. from Brown University, graduating magna cum laude in 1981 with concentration and senior thesis honors in Law and Society from the Center for Law and Liberal Education, and a J.D. from Columbia University School of Law graduating in 1984 with Harlan Fiske Stone Scholar, Charles Evans Hughes Fellowship, and Jane Marks Murphy Prize honors. 3. I have published more than 70 articles, editorials, and essays on ethics, the law of lawyering, and the legal profession in leading law journals, newspapers, and book anthologies. This
1

The Center for Ethics & Public Service is an interdisciplinary ethics education, professionalism training, and community assistance program devoted to the values of ethical judgment, professional responsibility, and public service in law and society. It is the winner of the American Bar Association 1998 E. Smythe Gambrell Professionalism Award, the Florida Bar Seventh Annual 1999-2000 Professionalism Award, and the Miami-Dade County Commission on Ethics and Public Trust 2001 Arete Award for nonprofit of the year.

body of scholarship, together with my work on behalf of the Center for Ethics and Public Service, has been cited more than 3,000 times in law journals, research networks, and in the media (e.g., Daily Business Review, Miami Herald, New York Times, Sun-Sentinel, Wall Street Journal, Washington Post, National Public Radio, ABC News Nightline, CNN, and PBS). I have also lectured widely on ethics and professional responsibility for bar associations, corporations, for-profit and nonprofit law firms, government agencies, and federal and state courts. My curriculum vitae is attached as Exhibit A. 4. I am a member of the American Law Institute, the American Bar Association Center for Professional Responsibility, the Executive Committee of the Association of American Law Schools Section on Professional Responsibility, and the New York Bar; a former member of the Ethics, Integrity & Accountability Task Force of the Miami-Dade County Commission on Ethics and Public Trust, the Florida Bar Standing Committee on Professionalism, the Florida Bar Task Force on the Attorney-Client Privilege, and the Executive Committee of the Association of American Law Schools Section on Clinical Education; a former advisor to the Miami-Dade County Alliance for Ethical Government; an elected fellow of the American Bar Foundation and an elected member of the Omicron Delta Kappa Honor Society and the Alpha Epsilon Lambda Graduate Honor Society at the University of Miami; a former Contributing Op-Ed Columnist for the Miami Herald; and the winner of the Florida Supreme Court 1999 Faculty Professionalism Award, the University of Miami School of Laws 2000 and 2009 Richard Hausler Professor of the Year Awards, the Association of American Law Schools Section on Clinical Education 2004-2005 Gary Bellow Scholar Award, the Association of American Law Schools Section on Clinical Legal Education 2007 William Pincus Award, the Association of American Law Schools Section

on Pro Bono and Public Service Opportunities 2007 Father Robert Drinan Award, and the University of Miami School of Laws 2011-2012 Public Interest Innovative Service Award. 5. I have been accepted in Florida federal and state courts as an expert witness in numerous matters of legal ethics and professional responsibility, and served as a legal ethics expert for the Discipline Counsel of the Florida Bar. 6. I make this declaration upon personal knowledge of the law of lawyering, the body of law regulating the legal ethics and professional responsibility of the legal profession,2 as well as the laws and regulations governing Florida and Miami-Dade County, including The Conflict of Interest and Code of Ethics Ordinance. See Miami-Dade County Conflict of Interest and Code of Ethics Ordinance 2-11.1 (as amended through July 2012). RETENTION IN THIS MATTER 7. I have been engaged by Genovese Joblove & Battista to render an objective and truthful ethics opinion regarding Miami-Dade County public procurement policies in this matter. 8. I have been afforded the opportunity to review the following documents and their accompanying exhibits: Letter from Mayor Carlos A. Gimenez to Joseph M. Centorino (Sept. 27, 2013)(the Gimenez Letter), In Re: The Protest of Recommendation to of Notice to Professional Consultants for ISD Project No. E13-WASD-01R (Sept. 26, 2013)(the Protest Letter), Letter from Albert E. Dotson, Jr. to Joseph M. Centorino (Oct. 7, 2013), and Letter from Albert E. Dotson, Jr. to Robert Cuevas (Sept. 30, 2013). STATEMENT OF FACTS 9. Based on a review of the above-mentioned information, and communications with Genovese Joblove & Battista and others, I understand the relevant facts in this matter pertain to
2

In Florida, the law of lawyering includes the Florida Rules of Professional Conduct (Florida Rules), adopting with modification the American Bar Association Model Rules of Professional Conduct (Model Rules). See Florida Rules of Profl Conduct (2013); Model Rules of Profl Conduct (2013).

Miami-Dade Countys Notice to Professional Consultants for ISD Project No. E13-WASD-01R (the NTPC) and the proposers AECOM Technical Services, Inc. (AECOM) and CH2M Hill (CH2M), specifically various communications taken by [CH2M] during the evaluation period of the [NTPC] solicitation. Gimenez Letter at 1. The first communication occurred on August 9, 2013, five days prior to the First Tier meeting of the NTPC selection committee,3 in the form of a direct e-mail by a CH2M representative to selection committee members. Gimenez Letter at 2. The second communication occurred on August 27, 2013, one day prior to the Second Tier meeting of the NTPC selection committee, in the form of a Tier 2 Supplemental Submittal containing additional materials and resumes hand delivered by CH2M directly to the selection committee members. Gimenez Letter at 2. OPINION 10. In summary, based on the above statement of facts, in my opinion: (a) an integrity problem is created when a proposer communicates directly with each selection committee member during the evaluation process after the proposals are received, opened and made public; (b) following the public opening and distribution of competitive proposals, it is inappropriate to allow a proposer to supplement its original submittal to include additional information and staff credentials directly to selection committee members prior to the selection meeting; and (c) there is an integrity and competitive advantage problem created when a proposer submits a supplemental submittal to include a substantial amount of additional new information. I hold this opinion to a reasonable certainty. 11. BOTH INTEGRITY WHEN
A AND

COMPETITIVE ADVANTAGE PROBLEMS ARE CREATED

WITH

PROPOSER INAPPROPRIATELY COMMUNICATES DIRECTLY

EACH SELECTION

By appointment, the selection committee was comprised of County staff and non-County members. Gimenez Letter at 2.

COMMITTEE MEMBER DURING

THE

EVALUATION PROCESS AFTER

AND

THE

PROPOSALS ARE
A

RECEIVED, OPENED, DISTRIBUTED, INAPPROPRIATELY SUPPLEMENTS AMOUNT

OF ITS

MADE PUBLIC,

AND TO

WHEN
A

PROPOSER

ORIGINAL SUBMITTAL
AND

INCLUDE

SUBSTANTIAL

ADDITIONAL NEW INFORMATION

TO

STAFF CREDENTIALS

AND

DELIVERS THE SELECTION

SUBMITTAL DIRECTLY MEETING.

SELECTION COMMITTEE MEMBERS PRIOR

TO THE

Both integrity and competitive advantage problems are created when a proposer inappropriately communicates directly with each selection committee member during the evaluation process after the proposals are received, opened, distributed, and made public, and moreover, when a proposer inappropriately supplements its original submittal to include a substantial amount of additional new information and staff credentials and delivers the submittal directly to selection committee members prior to the selection meeting. Integrity and competitive advantage problems affect both the process and the outcome of governmental decision making in the context of public procurement. (a) Government Process-based Integrity and Competitive Advantage Problems. Government process-based integrity and competitive advantage problems taint procurement decision making procedures by injecting bias and prejudice, or the risk of bias and prejudice,4 either against or in favor of a party. Even when actual bias and prejudice is unproven, if the impartiality of the decision making process might reasonably be questioned, public confidence and trust in open and accountable government are eroded. The express legislative intent and purpose of the Miami-Dade County Commission on Ethics and Public Trust is to restore public confidence in government. Miami-Dade County, Florida, Code of Ordinances,

Process-based integrity problems also increase the risk of inaccurate, inconsistent, and unpredictable decision making.

Part III, Chap. 2, Administration, Art. LXXVIII, Commission on Ethics and Public Trust, 21067 (2011). See also Danielle M. Conway, State and Local Government Procurement 311 (2012)(observing that the purpose of general ethical standards of conduct in public contracting is to maintain the public trust and to promote procurement integrity throughout the procurement process). To ensure the evenhanded treatment of parties in the government procurement process, Miami-Dade County has consistently provided that communication and delivery of proposals/submittals to selection committee members is through the Countys professional st aff and that proposals or supplemental information are not submitted directly to the selection committee by proposers or their representatives. Gimenez Letter at 2. This gatekeeping policy serves three important prophylactic purposes: first, it prevents the use or disclosure of confidential information to the advantage or disadvantage of a particular proposer; second, it screens potential conflicts of interest involving the personal interest of a decision maker and the interests of a proposer or a third person; and third, it promotes decision making efficiency by channeling the form, content, and delivery of information through the Countys professional staff. For reasons of statutory accountability, procurement experience, and regulatory expertise, the Countys professional staff, rather than self-interested proposers, stand in the best position to make such gatekeeping judgments. Significantly, the Countys approved gatekeeping policy is reinforced by the C one of Silence provision in section 1.11 of the NTPC. See Protest Letter Ex. 5. By its express terms, the Cone of Silence prohibited CH2Ms communications with the selection committee in this case. The standard exception to this prohibition is inapposite here because of the membership composition of the NTPC selection committee and because of the submittal protocols required

under section 2.2 of the NTPC document governing the delivery of information. See MiamiDade County Conflict of Interest and Code of Ethics Ordinance 2-11.1 (t)(1)(c)(i) (as amended through July 2012); Protest Letter Ex. 5. CH2Ms representative explicitly acknowledged the Countys established informational screening and delivery procedures and protocols. See Letter from Mitchell A. Bierman to Hugo Benitez (Aug. 22, 2013).5 Nonetheless, on August 9, 2013 five days prior to the First Tier meeting, CH2M unilaterally disregarded the Countys well settled policy by communicating with selection committee members through direct e-mail, thereby negating important gatekeeping and screening functions and creating the risk of unchecked governmental decision making. See Protest Letter, Ex. 6, at 1. CH2Ms deliberate and repeated violation of the Countys gatekeeping policy undermined the fairness of the NTPC selection process. On its face, the First Tier Meeting Tabulation Sheet, dated August 14, 2013, shows AECOM, rather than CH2M, to be deserving of the contract award strictly on the merits of its proposal under the applicable NTPC qualitative criteria. See First Tier Meeting Tabulation Sheet (Aug. 14, 2013). The reversal of that determination subsequent to CH2Ms intentional contravention of the Countys gatekeeping policy and inappropriate delivery of a Tier 2 Supplemental Submittal containing additional materials and resumes to selection committee members during the NTPC evaluation period without affording AECOM adequate notice or a meaningful opportunity to be heard raises serious issues of procedural fairness. See Second Tier Meeting Tabulation Sheet (Aug. 28, 2013). The calibrated timing of CH2Ms breach, coming after the opening and public dissemination of AECOMs proposal, is doubly vexing because it enabled CH2M to revise its initial submittal based on advantageous information gleaned from AECOMs proposal and the selection

CH2Ms refusal to abide by County procedures and protocols raises concerns under the Florida Rules of Professional Conduct. See Fla. Rules of Profl Conduct R. 4-3.4 (c), 4-3.9 (2013).

committees Tabulation Sheet. On procedural fairness grounds, CH2Ms multiple breaches and its larger defiance of the Countys gatekeeping policy deprived AECOM of adequate notice of, and a meaningful opportunity to respond to, the improperly delivered Supplemental Submittal. (b) Government Outcome-based Integrity and Competitive Advantage Problems. Government outcome-based integrity and competitive advantage problems tilt results unfairly against or in favor of a party to the procurement process. Fairness problems involve the unequal treatment, or the lack of evenhanded treatment, of similarly situated parties, here AECOM and CH2M. Once again, to safeguard the equal treatment of parties in the government procurement process, Miami-Dade County has consistently provided that communication and delivery of proposals/submittals to selection committee members is through the Countys professional staff and that proposals or supplemental information are not submitted directly to the selection committee by proposers or their representatives. Gimenez Letter at 2. As before, this gatekeeping policy serves the core civic governance purposes of preventing the use or disclosure of confidential information to the advantage or disadvantage of a particular proposer, screening potential conflicts of interest, and promoting decision making efficiency by channeling the form, content, and delivery of information. Once more, the Countys endorsed gatekeeping policy is bolstered by the Cone of Silence provision in section 1.11 of the NTPC. See Protest Letter Ex. 5. By design, the Cone of Silence proviso barred CH2Ms communications with the selection committee. The exception to this prohibition is inapplicable here due to the composition of the NTPC selection committee and the stringent submittal protocols required under section 2.2 of the NTPC document. See MiamiDade County Conflict of Interest and Code of Ethics Ordinance 2-11.1 (t)(1)(c)(i) (as amended through July 2012); Protest Letter Ex. 5. CH2Ms representative freely recognized the Countys

informational screening and delivery procedures and protocols. See Letter from Mitchell A. Bierman to Hugo Benitez (Aug. 22, 2013). Nevertheless, again on August 9, 2013 five days prior to the First Tier meeting, CH2M flouted the Countys accepted policy by communicating with selection committee members through direct e-mail. See Protest Letter, Ex. 6, at 1. CH2Ms knowing violation of the Countys policy compromised the result of the NTPC selection process recommending CH2M for the NTPC contract. To be a just result, a government contract award to a proposer must be defensible on the merits. A plain reading of the First Tier Meeting Tabulation Sheet, dated August 14, 2013, demonstrates that AECOM, not CH2M, earned the contract award strictly on the merits of its proposal under relevant NTPC criteria. See First Tier Meeting Tabulation Sheet (Aug. 14, 2013). The upsetting of that determination following CH2Ms violation of the Countys policy and its inappropriate delivery of a Tier 2 Supplemental Submittal providing additional materials and resumes to selection committee members during the NTPC evaluation period without notice to AECOM and without giving AECOM an opportunity to be heard raises grave issues of substantive justice. See Second Tier Meeting Tabulation Sheet (Aug. 28, 2013). The timing of CH2Ms breach, subsequent to the public opening and distribution of AECOMs proposal, improperly allowed CH2M to revise its initial submittal based on useful information taken from AECOMs proposal and the selection committees Tabulation Sheet. On substantive justice grounds, CH2Ms disregard of the Countys policy resulted in the improper admission and unfiltered consideration of ssupplemental materials, including substantial new information, during the selection process, a deliberative and evidentiary error that condemns the instant result. (c) Cost Inefficiency-based Integrity Problems in Public Procurement.

In the context of public procurement transactions, government process- and outcomebased integrity problems create situations of cost inefficiency. Cost inefficiency occurs when scarce public resources are wasted and private costs are increased. A procurement process, for example the NTPC, that must be reopened because of CH2M-instigated procedural irregularities and substantive unfairness wastes scarce public resources and increases the private costs incurred by AECOM, a blameless third party. Increasing the cost burdens on firms like AECOM in an environment of economic austerity creates market entry barriers in public works capital improvement projects, reducing competition, and driving up pricing. These burdens weigh especially heavily on firms, like AECOM, committed to a culture of regulatory compliance with correspondingly higher institutional costs of training, monitoring, and enforcement. (d) Moral Hazard Problems in Public Procurement. Moral hazard problems arise when a party, here CH2M, knowingly engages in calculated, rule-breaking behavior without incurring the adverse costs of such behavior which instead shift to a rule-compliant third party, in this case AECOM, and the public.6 This risk asymmetry insulates the risk-taking party, namely CH2M, from the negative public and private consequences of its own rule-breaking behavior, thereby incentivizing inappropriate or reckless conduct in the future. Negative public consequences here include the social cost of reopening the NTPC competitive selection process and reaching a new determination, as well as the social cost of undermining public confidence in the competitive selection process. The cost of reopening and redetermination are calculable, measured by the transaction costs of a new selection process and the environmental costs of unabated sanitary sewer overflow. In contrast, the cost to the integrity of the Miami-Dade County public works procurement system and to public confidence in that
6

See generally Tom Baker, On the Genealogy of Moral Hazard, 75 Texas L. Rev. 237 (1996).

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system are incalculable, whether gauged by the higher regulatory costs of monitoring and deterring proposer bad behavior or the higher civic costs of regaining public confidence in compromised procedures and unreliable results. Negative private consequences include the economic cost to present proposers, like AECOM, who must redraft their submittals and restart a new selection process, and the economic cost to future proposers who must prepare their submittals and navigate a selection process vulnerable to competitive rule-breaking behavior. Inevitably, if forced to restart or to suffer a protracted selection process, present and future proposers will incur lost opportunity costs and lost profits. Within the limited marketplace of firms undertaking capital improvement projects of the scale contemplated here, lost profits ultimately will drive out firms operating at a competitive disadvantage because of the inappropriate, rule-breaking conduct of competitors, encourage monopolistic pricing by surviving firms, and in the long run increase government public works project costs to the detriment of an already strained County budget. At the same time, if encouraged by result-oriented selection incentives and rewards to engage in competitive bad behavior, present and future proposers will wage a race to the bottom marked by inappropriate, risk-taking conduct at the expense of their own private, institutional integrity. Taken together, the negative public and private consequences of rewarding CH2M in the context of the NTPC selection process cogently illustrate the meaning of moral hazard if you cushion the consequences of bad behavior, then you encourage that bad behavior.7 Here, the incentive effects of reopening the NTPC selection process not only tempt future proposers to engage in bad, rule-breaking behavior, but also condone a procurement model that systematically favors the interests of proposers who treat that process as a rule-breaking gambit or a high stakes game of chance. Conversely, the same incentive effects systematically disadvantage proposers
7

Baker, supra note 6, at 238 n. 2.

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like AECOM who comply in good faith with communication policies crafted to guarantee fair and just procurement practices and to foster public trust in honest and open government. 12. CONCLUSION For the reasons stated above, in my opinion: (a) an integrity problem is created when a proposer communicates directly with each selection committee member during the evaluation process after the proposals are received, opened and made public; (b) following the public opening and distribution of competitive proposals, it is inappropriate to allow a proposer to supplement its original submittal to include additional information and staff credentials directly to selection committee members prior to the selection meeting; and (c) there is an integrity and competitive advantage problem created when a proposer submits a supplemental submittal to include a substantial amount of additional new information. I hold this opinion to a reasonable certainty. Insofar as this matter is ongoing, I will continue to review materials relevant to this opinion. Therefore, this opinion is subject to change as additional information becomes available or receives clarification in the future. Under penalty of perjury under the laws of Florida, I declare that the foregoing is true and correct to the best of my knowledge and belief. Dated: Coral Gables, Florida October 28, 2013

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