Loading...
07/16/2010 Audit n I • • • Z_ I I � AUDIT REPORT OF MONROE COUNTY'S INTERLOCAL AGREEMENTS WITH THE FLORIDA KEYS AQUEDUCT AUTHORITY FOR THE BIG COPPITT WASTEWATER PROJECT July 16, 2010 couNT y vMCU,Q G s ° Mir : .hY2+ . i11111., • FoouNri• jt Prepared by: Internal Audit Department Clerk of the Circuit Court Danny L. Kolhage, Clerk Monroe County, Florida II F^1 AUDIT REPORT OF MONROE COUNTY'S INTERLOCAL AGREEMENTS WITH THE FLORIDA KEYS AQUEDUCT AUTHORITY FOR THE BIG COPPITT WASTEWATER PROJECT cn TABLE OF CONTENTS Page I. OBJECTIVES AND SCOPE 1 II. METHODOLOGY 1-2 III. BACKGROUND INFORMATION 2-3 IV. AUDIT CONCLUSIONS 4 1 V. AUDIT FINDINGS 1. FKAA is combining wastewater and water on the same contracts, change orders and schedule of values. 5 I— L 2. FKAA's Finance Department billed$494,439.30 to the County Wastewater Department in error. 6 _ 3. FKAA's Finance Department applies County reimbursements to the oldest invoices outstanding rather than balance each individual invoice. 7-8 r-� 4. Submission of incomplete invoices by the FKAA causes delays in processing. 9-10 5. The County Wastewater Department and the Clerk's Finance Department are not always able to process FKAA invoices in a timely manner. 11-12 6. The FKAA used continuing contracts with engineering firms for projects costing over$1 million, contrary to Section 287.055 (2) (g), Florida 7, Statutes,which requires a competitive selection process. 13-16 VI.EXHIBITS r� A. Change Order Overview. B. Florida Statute 287.055. C. Professional Engineering Services Request for Qualifications. D. FKAA Invoices. E. FKAA Reconciliation. F. Incomplete Invoice. G. Auditor General Finding#14. H. Auditor General Follow-Up Finding#14. I. Auditor General Opinion 93-56. J. Auditor General Opinion 75-131. K. Attorney General Opinion 2010-20. VII.AUDITEE RESPONSES-FKAA VIII.AUDITEE RESPONSES-County Administrator IX.AUDITEE RESPONSES-Clerk's Finance Department L _' I_J 1 r-I, i r-, AUDIT REPORT OF MONROE COUNTY'S INTERLOCAL AGREEMENTS WITH THE FLORIDA KEYS AQUEDUCT AUTHORITY FOR I , THE BIG COPPITT WASTEWATER PROJECT 1 1. OBJECTIVES AND SCOPE - At the request of the Monroe County Clerk of the Circuit Court, the Internal Audit Department has completed a review of the Interlocal Agreement (Agreement) between Monroe County (County) and the Florida Keys Aqueduct Authority (FKAA) for installation of the Big Coppitt wastewater system. The Agreement provides the funds to the FKAA to develop centralized wastewater treatment, collection and disposal services on a regional basis. The objectives of the audit were to determine compliance with state and local laws, ordinances, and agreements, whether expenditures were appropriate, the degree of compliance with established operating policy and procedures, and to review the extent of contract oversight provided. 'l II. METHODOLOGY A. We interviewed the following personnel to obtain information about the FKAA's processes, purchasing policies, and payments made to the FKAA and their contractors. 1. Tim Esquinaldo, FKAA Internal Compliance Auditor f i 2. Thomas Walker, FKAA Department Director Engineering 3. Kirk Zuelch, FKAA General Counsel 4. Ray Shimokubo, FKAA Project Manager 5. Denise Hull, FKAA Director of Finance and Administration 6. Jill Cranney-Gage, FKAA Senior Accountant 7. The Clerk's Finance Department personnel 8. Monroe County Attorney's personnel 9. Monroe County Senior Administrator—Sewer Projects 10.Monroe County Director of Engineering Services B. Internal Audit Department examined the following documents: i 1. Florida Statute Chapter 189 Special Districts: General Provisions 2. Florida Statute Chapter 287.055 Consultant's Competitive Negotiations Act 3. Monroe County local ordinances,resolutions,policies and procedures 4. FKAA reimbursement requests 5. Monroe County checks reimbursing FKAA 6. FKAA Procurement Policy • I 1 I II 7. Interlocal Agreement Between Monroe County and Florida Keys Aqueduct Authority for the Big Coppitt Regional Wastewater System dated June 21, 2006 8. First Amendment to Interlocal Agreement between Monroe County and the Florida Keys Aqueduct Authority for the Big Coppitt Regional Wastewater System dated November 14, 2007 9. Second Amendment to Interlocal Agreement for the Big Coppitt Regional Wastewater System dated February 18,2009 10. Various Attorney General Opinions ii C. The Internal Audit Department reviewed the contracts to ensure that the terms and conditions were being complied with as documented within the Agreement. III. BACKGROUND INFORMATION The FKAA was created in 1937 by the Florida Legislature and was recreated as an independent special district by Chapter 76-441,Laws of Florida (amended by Chapter 77-605). Under these laws, the primary purpose of the FKAA was to obtain, supply, and distribute an adequate water supply to the Florida Keys. In 1998 and 2002, the Authority's enabling legislation was amended to redefine the purpose of the FKAA to include collecting, treating and disposing of wastewater in certain areas of the Florida Keys. The FKAA has the authority, in compliance with the rules of the Department of Health and ` Environmental Protection, to regulate the use of specific types of wastewater facilities and to prescribe the specific types of wastewater treatment facilities or measures required to be utili7ed within the boundaries of the FKAA, in order to manage effluent disposal and wastewater matters. The FKAA is governed by a five (5) member Board of Directors appointed by the Governor of Florida. These five (5) Board members are from each of the five (5) districts within Monroe County. The Board employs an executive director who is chief executive officer of the FKAA. r- Reclaimed water provides a non-drinkable water source that can be utili7ed for irrigation, car washing, boat washing, and aesthetic fountains at a cost that is less than potable water. Reclaimed water is derived from highly treated and disinfected wastewater that meets the standards of the Florida Department of Environmental Protection. In February 2006, the FKAA received a$5,000,000 advance from the County to assist in the design, development and construction of a wastewater system for the Big Coppitt area. FKAA has to provide documentation for the use of the advance as well as other reimbursements requested. Of this $35 million project, the County has funded $34,935,052 to date. Another amended interlocal agreement increasing the funding is in the process to close out the project. There are also Interlocal Agreements with the County for Duck Key and Cudjoe Regional. The County is providing the funding for these projects and the FKAA is responsible for the construction and management of the wastewater plant. Monroe County Wastewater, the FKAA and the Clerk's Finance Department have to work in cooperation with each other across governmental lines to obtain and provide the necessary funding for the projects, from obtaining grants and loans, I ' I I 2 interlocal agreements, agreements with private wastewater providers and reimbursements to FKAA. The process of billing Monroe County for work completed by FKAA contractors is an ongoing process and changes have been made to try and streamline the process to accommodate both FKAA and Monroe County. Construction Contractors Five construction contracts have been procured by FKAA to build the Big Coppitt Regional Wastewater Treatment System with numerous change orders. These include the following: Component Contractor • Contract 1 —Forcemain Douglas N. Higgins, Inc. Contract 2—Geiger/Rockland Collection Giannetti Contracting Corporation Contract 3 —Big Coppitt Collection Charley Toppino & Sons, Inc. Contract 4—Shark Key Collection ADB Utility Contractors Contract 5 -Wastewater Treatment Plant Contract Wharton-Smith, Inc. The Big Coppitt Wastewater Treatment Plant FKAA Project No. 4002-00 was bid and awarded,to Wharton-Smith, Inc. for the construction of a Wastewater Treatment Plant at the Rockland Key Commerce Center Industrial Subdivision near mile marker nine (9). The contract between Wharton- Smith, Inc. (General Contractor) and the FKAA totaled$10,777,000. See Exhibit A—Change Order Overview. r_- ' Consultants Competitive Negotiations Act Adopted by the Florida Legislature in 1973, Florida Statute 287.055 (CCNA) requires state government agencies,municipalities or political subdivisions, school boards and districts, to select a consulting firm based on qualifications rather than on a "lowest bid" basis. Qualifications based selection is a competitive process which looks at qualifications, competence, track record. and availability. See Exhibit B —Florida Statute 287.055, (5) Competitive Negotiation. In March 2006, the FKAA issued a Request for Qualifications (RFQ) for Professional Engineering Consulting firms to enter into a Continuing Contract for Capital Improvement Project Engineering Services for the planning, design, permitting, bid phase, and construction and certification phase services for system improvements of the FKAA's utility system and facilities. Review, evaluation and ranking of the Letter of Interest were performed by a selection committee. All of the projected capital projects are listed on the RFQ. See Exhibit C — Professional Engineering Services Request for Qualifications. ll According to FKAA Competitive Selection Policy and Procedures, in determining whether a firm is the most highly qualified for a particular project, the Authority considers whether a firm is a certified minority business enterprise, past performance, willingness to meet time and budget requirements, location, recent, current, and projected workloads of the firms, and the volume of work previously awarded to each firm by FKAA, with the object of an equitable distribution of contracts among qualified firms. 3 Irl I-1 IV. AUDIT CONCLUSIONS 1.FKAA is combining wastewater and water on the same contracts, change orders and schedule of values. 2.FKAA's Finance Department billed $494,439.30 to the County Wastewater Department in error. 3.FKAA's Finance Department applies County reimbursements to the oldest invoices outstanding rather than balance each individual invoice. 4.Submission of incomplete invoices by the FKAA causes delays in processing. 5.The County Wastewater Department and the Clerk's Finance Department are not always able to process FKAA invoices in a timely manner. 6.FKAA used continuing contracts with engineering firms for projects costing over $1 million, contrary to Section 287.055 (2)(g), Florida Statutes, which requires a competitive selection process. 17 r. rn 4 V. AUDIT FINDINGS 1. FKAA is combining wastewater and water on the same contracts, change orders and schedule of values. Finding: FKAA is combining wastewater construction and water construction on the same contract for various reasons. One reason is that as the pipes are being installed for wastewater certain economies of scale can be achieved by installing reclaimed water or water lines. The schedule of values for both water and wastewater are also combined. The amounts for water are not always identified separately on the schedule of values submitted to Monroe County Wastewater Department Resources (County Wastewater) for review and payment. In one case a change order for$1.6 million for Duck Key reclaimed water was added to the contract for Big Coppitt. All five of the construction contracts have at least two water change orders. See Exhibit A — Change Order Overview. This requires a County engineer to review and correct the schedule of values rather than the contract specialist and thus it becomes a very labor intensive task. Water and reclaimed water amounts are the responsibility of FKAA and are not subject to the Interlocal agreements. During the audit, FKAA management agreed to separately contract and require contractors to bill separately for wastewater. Recommendation(s): 1. FKAA should contract separately and require contractors to bill separately for water and wastewater. FKAA Response(s): 1. Management will require contractors to bill separately for water and wastewater. li Il' 5 2. FKAA's Finance Department billed $494,439.30 to the County Wastewater Department in error. Finding: FKAA's Finance Department billed Monroe County for ineligible work. In one instance, the invoices from FKAA to Monroe County for reimbursement for Big Coppitt, dated August 26, 2007 and September 9, 2007 included. Duck Key reclaimed water work of $552,981 minus ten percent (10%) retainage. This amount was listed on D.N. Higgins pay applications 6 and 7. The amount billed minus retainage was approved for payment by the County Wastewater Department. See Exhibit D - FKAA Invoices, 2nd page. The County Wastewater Department identified the ineligible costs and deducted them on the invoice for reimbursement dated March 25, 2008. FKAA's Engineering Department approves the payment request from the contractor but does not approve the invoice for reimbursement prepared by FKAA's Finance Department that is sent to the County. FKAA's Finance Department compiles the invoices but are not aware of the details of the project and only completes a review to ensure it is mathematically correct. During the audit, FKAA's Engineering Department has agreed to review the invoice reimbursement package before it is sent to the County Wastewater Department. Recommendation(s): 1.FKAA Management should contract separately and require contractors to bill separately for water and wastewater. 2.We recommend that FKAA Management develop procedures to ensure that the FKAA Project Manager reviews reimbursement invoices before transmittal to the County Wastewater Department. FKAA Response(s): 1. Management will require contractors to bill separately for water and wastewater. 2. Management has developed procedures that will ensure the FKAA Project Manager reviews reimbursement invoices before submittal. • 6 II • 3. FKAA's Finance Department applies County reimbursements to the oldest invoices outstanding rather than balance each individual invoice. Finding: Internal Audit requested an accounting of funds from FKAA's Finance Department for amounts that the County owed to FKAA for each wastewater project. The County Wastewater Department and the Clerk's Finance Department frequently make deductions from FKAA invoices as submitted. The Clerk's Finance Department did not always include documentation which explained the deductions to FKAA's Finance Department and the County Wastewater Department. The amounts deducted also affects the retainage amount held. According to the FKAA accounting reconciliation, the balance owed by the County for the Big Coppitt project on April 19, 2010 was $2,738,086.58 See Exhibit E—FKAA Reconciliation. However, this amount included ineligible items. The amount requested by FKAA's Finance Department and the amount paid were not the same. With the advance of five million outstanding, FKAA's Finance Department applied County reimbursements to the oldest invoices rather than balance each individual payment. During the audit the County Wastewater Department and FKAA's Finance Department were working on the reconciliation of amounts due. Project reconciliations completed on a timely basis would have alerted management that there was a problem with the reimbursement process. During the audit, the Clerk's Finance Department has agreed to include documentation with the reimbursement check that explains any discrepancies or deductions to FKAA's Finance Department. A copy of this information will be forwarded to the County Wastewater Department. 1 Recommendation(s): 1. The FKAA Finance and County Wastewater project reconciliations should be completed on a more timely basis. 2. The Clerk's Finance Department should include documentation which explains the amounts deducted with the reimbursement check. A copy of this documentation should be transmitted to the County Wastewater Department. FKAA Response(s): 1. The FKAA Finance and Clerk's Finance Department will reconcile projects on a monthly basis. 2. The Clerk's Finance Department will send FKAA a schedule of amounts deducted with each to ensure payment that all payments area lied correctlyto each request. PY PP q County Administrator Response(s): Copying the Wastewater Department on deductions made by the Clerk's Finance Dept,will improve the County's ability to reimburse FKAA for all work performed through re-submittal of invoices with required documentation. 7 • The Clerk's Finance Department: The Clerk's Finance Department has begun preparing a report detailing the amounts paid and deductions taken against FIB payment requests. The report detailing the line-by-line deductions will be placed in the envelope containing the payment to FIB. In addition, a copy of this report will be forwarded to the County Wastewater Department to allow them to maintain up-to-date and accurate records. f-- • r I-, , it 8 4. Submission of incomplete invoices by the FKAA causes delays in processing. Finding: The County r Wastewater Department receives the invoice for reimbursement from FKAA's Finance j Department. Some invoices do not include all supporting documentation necessary to process reimbursements. In an attempt to expedite the payment, after reviewing the invoices the County Wastewater calls or e-mails information requests to FKAA's Finance Department. FKAA's Finance Department then requests documentation from FKAA's Engineering Department. Examples of missing information could be contracts, change orders, pay application sequencing issues, task orders, releases of liens, and boarding passes. See Exhibit F - Incomplete Invoice. If FKAA's Engineering Department does not have the required documentation it must be requested from the contractor. The requests for documentation are often not answered in a timely manner causing the invoice to remain in the County Wastewater Department. During the audit, to facilitate the reimbursement process, FKAA stated that they would send the County Wastewater Department an executed copy of all wastewater information submitted and approved by the FKAA Board of Directors. According to the Interlocal Agreement if the County Senior Administrator for Sewer Projects or the Clerk determines that the submission is unacceptable, either of them shall return it to the FKAA in writing with a written description of the deficiency. During the audit, both FKAA's Finance Department and the County Wastewater Department agreed it would be beneficial if the County Wastewater Department sent the original invoice back to the FKAA's Finance Department with a list of the required items. This will eliminate the confusion of receiving the documentation in a disjointed fashion. Also, FKAA will know what is required for reimbursement documentation. Recommendation(s): 1.We recommend that FKAA Management develop procedures to ensure that the FKAA Engineering Project Manager reviews reimbursement invoices for completeness before transmittal to County Wastewater. 2.FKAA should send County Wastewater all executed copies of contracts, change orders and miscellaneous wastewater items submitted and approved by the FKAA Board of Directors. FKAA Response(s): 1. Management has developed procedures that will ensure the FKAA Project Manager reviews reimbursement invoices before submittal. 2. FKAA will forward to County Wastewater copies of all wastewater items including items submitted to the FKAA Board of Directors or authorized by FKAA's Executive Director. County Administrator Response(s): Receipt by the Wastewater Department of Contract Documents upon approval by FKAA Board of Directors and execution by parties will be beneficial in ensuring that reimbursement requests can be efficiently reviewed and approved for payment. In some cases, final payments were made by FKAA before final Change Orders were executed. FKAA is discouraged from approving invoices unless n 9 � I required contract documents are in place and from approving invoices in a manner inconsistent with contract documents. L� III J 10 i 5. The County Wastewater Department and the Clerk's Finance Department are not always able to process FKAA invoices in a timely manner. Finding: The County Wastewater Department and the Clerk's Finance Department are not always able to process FKAA invoices in a timely manner. Loan and grant fund submittals were also necessary. A large bundle of documentation often accompanies the billing for five or six contractors on one FKAA invoice. County Wastewater Department's procedure is to date stamp invoices upon receipt. This procedure was not always followed by staff; therefore the County Engineer reiterated the procedure. During the audit, the County Engineer further stated when invoices are received from FKAA they need to be reviewed within one (1) week of their arrival. If all the documentation is adequate for payment, the invoices should be transmitted to the Clerk's Finance Department within two (2) weeks of their arrival so that the Clerk's Finance Department has time to process the payment within the thirty (30) day allowable timeframe. If the County Wastewater Department does not have all the required documentation after review, the invoice will be sent back immediately to FKAA with a cover letter explaining what is needed. The County Engineer wrote to staff "Invoices should be sent back or held up for major items only such as lack of a contract, task order,previous pay application, that will prevent Finance from processing the payment. If minor things like hotel receipts are missing we should simply make a note on the invoice that it is missing, short pay the invoice by that amount and move on." After the necessary approvals at the County, the FKAA invoices are sent from County Wastewater Department to the Clerk's Finance Department. The invoices are date stamped and given to the Assistant Finance Director. Before the audit there were many FKAA contractors on one bill so the Assistant Finance Director had to distribute the construction invoices to the Director of Administrative Services, the Clerk's employee responsible for review and payment of construction . contracts, while retaining professional services and other miscellaneous invoices. During the audit FKAA began invoicing separately for each wastewater bill. The County Wastewater Department should send construction invoices directly to the Director of Administrative Services. I '' FKAA invoices should be returned or paid within the required time frame on a consistent basis. Recommendation(s): 1. We recommend that County Wastewater develop written procedures to support staff directives. 2. Construction invoices should be sent to the Director of Administrative Services for payment. 3. The Clerk's Finance Department and County Wastewater Department should pay FKAA invoices within the proper time frame. Clerk's Finance Department Response(s): The Clerk's Finance Department has received large packets of FKAA invoices from the County Engineering Department covering many months to multiple years, with some invoices being in excess of five years old. The large volume of invoices received at one time makes it difficult to �� 11 i process the pay request within our two week goal. With the implementation of the recommendations contained throughout this Audit report, we do not anticipate these processing backups will occur in the future. The Clerk's Finance Department will review packets soon after receipt for completeness and ensure timely processing. County Administrator Response(s): Reviewing invoices within one week of receipt and transmitting to the Clerk's Finance Department within two weeks unless major items are missing will improve the reimbursement process. Returning reimbursement requests for insufficient documentation or out of contract approval may initially delay processing;however, this approach will quickly resolve the paperwork issues. Li 12 is 6. FKAA used continuing contracts with engineering firms for projects costing over $1 million, contrary to Section 287.055 (2)(g), Florida Statutes, which requires a competitive selection process. Finding: The Consultants' Competitive Negotiation Act (CCNA) Section 287.055, Florida Statutes provides that professional services, including architectural, professional engineering, landscape architecture, and registered surveying services, be acquired pursuant to a formal competitive selection and negotiation process. The Act generally requires that the District publicly announce,in a uniform and consistent manner, each occasion when professional services must be purchased for a project with a basic construction cost that is estimated by the agency to exceed $250,000, or when a planning or study activity fee is estimated to exceed $25,000. Additionally, the Act provides that a continuing contract for professional services may be entered into for construction projects when the construction costs do not exceed $1 million, for a study activity when the fee for such professional service does not exceed $50,000, or for work of a specified nature as outlined in the contract. These parameters were increased to $2 million, $200,000, respectively in 2009. The construction project as a whole is over the stated threshold amount. In March 2006, the FKAA issued a Request for Qualifications (RFQ) for Professional Engineering Consulting firms to enter into a Continuing Contract for Capital Improvement Project Engineering Services for the planning, design, permitting, bid phase, and construction and certification phase services for system improvements of the FKAA's utility system and facilities. Review, evaluation and ranking of the Letter of Interest were performed by a selection committee. All of the projected capital projects are listed on the RFQ. .The Capital Improvement Projects (CIP) are advertised in conjunction with the RFQ for professional engineering services as notification to both the public and to alert engineering firms as to required expertise given the nature of the projects comprising the CIP. Additionally, the CIP is advertised and approved as part of the budget process by the Board of Directors on an annual basis. According to the FKAA Competitive Selection Policy and Procedures, in determining whether a firm is the most highly qualified for a particular project, the Authority considers whether a firm is a certified minority business enterprise, past performance, willingness to meet time and budget requirements, location, recent, current, and projected workloads of the firms, and the volume of work previously awarded to each firm by FKAA, with the object of an equitable distribution of contracts among qualified firms. The Auditor General's Report No. 2007-012 titled Florida Keys Aqueduct Authority Operational Audit included finding number fourteen (Competitive Selection of Engineers) which,stated that the Authority was not in full compliance with 287.055(3) (A) because the engineers were selected from a pre-approved pool, instead of the Authority publicly announcing each occasion when .the engineering services were to be purchased for a project. The public announcement was only made when the Board established the pool of pre-approved engineering firms through its Request for Qualifications process. See Exhibit G — Auditor General Finding #14 In the finding the Auditor General states "The Legislature has recognized in Section 287.001, Florida Statutes, that fair and open competition is a basic tenant of public procurement, and that such competition reduces the appearance and opportunity for favoritism and inspires public confidence that contracts are awarded LJ ' 13 ( l equitably and economically. Absent utilisation of the required competitive selection process, the q Yq P Authority's ability to demonstrate the fair, equitable, and economical procurement of professional service is limited." In the Authority's response they stated that they were in compliance with 287.055. In the Auditor General Report 2009-012 Follow-Up on Operational Audit Report No. 2007-012 the auditor stated "Although the Executive Director stated that the Board of Directors has adopted policies and procedures to insure compliance with applicable Florida Statutes, the point of our finding is that such policies and procedures provide for the Board of Directors to select a Board pre-approved engineering firm from a pool when construction projects are scheduled to begin, rather than follow Section 287.055 .(3)(a), Florida Statutes, which requires the Authority to publicly announce each occasion when professional services must be purchased for a project." See Exhibit H — Auditor General Follow-Up Finding#14. The CCNA definitions and applicable sections are as follows: f) "Project" means that fixed capital outlay study or planning activitydescribed in the public notice 1 of the state or a state agency under paragraph (3)(a). A project may include: 1. A grouping of minor construction,rehabilitation, or renovation activities. 2. A grouping of substantially similar construction,rehabilitation, or renovation activities. (g) A "continuing contract" is a contract for professional services entered into in accordance with all the procedures of this act 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 individual project under the contract does not exceed $2 million, for study activity if the fee for professional _ services for each individual study under the contract does not exceed $200,000, or for work of a specified nature as outlined in the contract required by the agency, with the contract being for a fixed term or with no time limitation except that the contract must provide a termination clause. Firms providing professional services under continuing contracts shall not be required to bid against one another. (3) PUBLIC ANNOUNCEMENT AND QUALIFICATION PROCEDURES.-- • (a)1. Each agency shall publicly announce,in a uniform and consistent manner, each occasion when professional services must be purchased for a project the basic construction cost of which is estimated by the agency to exceed the threshold amount provided in s. 287.017 for CA1'F.GORY FIVE or for a planning or study activity when the fee for professional services exceeds the threshold amount provided in s. 287.017 for CATEGORY TWO, except in cases of valid public emergencies certified by the agency head. The public notice must include a general description of the project and must indicate how interested consultants may apply for consideration. 2. Each agency shall provide a good faith estimate in determining whether the proposed activity meets the threshold amounts referred to in this paragraph. (b) Each agency shall encourage firms engaged in the lawful practice of their professions that desire to provide professional services to the agency to submit annually statements of qualifications and performance data. See Exhibit B—Florida Statute 287.055. 14 i-' We also reviewed Attorney General Opinions on the subject. Advisory Legal Opinion —AGO 93- 56 Footnote 1 states: [1] While this office has not been asked to comment on this arrangement I would note that the continuing contract provision of s. 287.055,F.S. (1992 Supp.),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. Cf., City of Lynn Haven v. Bay County Council of Registered Architects, Inc., 528 So.2d 1244, 1246 (1 D.C.A. Fla., 1988) (in which the court determined that the City's procedures contravened the legislative intent and undermined the effectiveness of the CCNA. Specifically, the City's bidding procedure would not effectuate an equitable distribution of contracts among the most qualified firms pursuant to Section 287.055(4), Florida Statutes. See Exhibit I—AGO 93-56. Advisory Legal Opinion—AGO 75— 131 SUMMARY: A city may employ a city engineer under a yearly contract to provide general advice and assistance without complying with the Consultants' Competitive Negotiation Act, s. 287.055, F. S. However, a particular engineering project must be publicly announced, notices sent to interested engineering firms, and if the compensation for the engineeringservices is more than $5,000, at least three p $ , engineering firms must be considered before finally negotiating an engineering contract for the project, as required by the act. The Consultants' Competitive Negotiation Act (the "CCNA" hereafter) was adopted in 1973 for the purpose of promoting competition among firms supplying j j professional architectural, engineering, and land surveying services to public agencies. Attorney General Opinion 074-191. Except in an emergency, the agency is required to make a public announcement on "each occasion" when professional services are required to be "purchased" and, in addition, to mail the announcement to each "certified" firm which has requested notification of - the need for the services. The announcement must include a general description of the "project" and indicate how interested consultants may apply for consideration. Section 287.055(3),.F. S. If the compensation for the professional services in question will exceed $5,000, the public agency is required to consider at least three firms in the light of various "factors" listed in the statute "with the object of effecting an equitable distribution of contracts among qualified firms," s. 287.055(4), id.; and, under s. 287.055(5), the agency is required to "negotiate a contract with the most qualified firm for professional services at compensation which the agency determines is fair, competitive, and reasonable. . . .". See Exhibit J—AGO 75-131. In the project definition it includes the public notice requirements of (3) (A) above. In FKAA's policy and procedures, it states "The Authority may publicly announce multiple projects in one announcement." Absent utilization of the required competitive selection process, the District's ability to demonstrate the fair, equitable, and economic procurement of professional services is limited. In summary, the FKAA needs to publicly announce each occasion when professional services must be purchased for a project subject to the threshold amounts. 15 Recommendation(s): r 1. FKAA Management should consider obtaining an official Attorney General Opinion on the public announcement issue. P FKAA Response: 1. Section 287.055 of the Florida Statutes provides for the acquisition of professional architectural, engineering, landscape architectural or surveying and mapping services. It establishes a competitive selection process based on qualifications, rather than compensation. The Authority publicly advertises all projects identified in its Capital Improvement Plan when soliciting engineers pursuant to the provisions of this statute and if a project is not identified in the Capital Improvement Plan it is advertised in a separate public announcement. On June 26, 2008 the Board adopted a competitive selection policy and procedures for the acquisition of these professional services. The policy follows Florida Statutes and provided for contract negotiation with the most qualified firm based on current statements of qualifications, capabilities, adequacy of personnel, past record, experience, whether the firm is a certified minority business enterprise, and such other factors determined by the Authority to be essential. Auditor's Comment: Attorney General Opinion 2010-20, CCNA, price and qualitative considerations dated June 7, 2010 further defines the requirement for the District to publicly announce each occasion when professional services must be purchased for a project. See Exhibit K— Attorney General'Opinion 2010-20. f—'� 16 VI. EXHIBITS EXHIBIT A Change Order Overview - Florida Keys Aqueduct Authority Big Coppitt Wastewater Project#4002-00 Change Order Overview L CO Change Orders Contractor # Water Wastewater Description Douglass Higgins $2,186,480 original contract amount P . To construct an additional 1,700 linear feet of 12"sanitary Contract 1 1 173,800.00 sewer force main with fittings;and to change valve box from n fiberglass.to pre-cast concrete. 2 138,000.00 To construct reclaimed,i.e.,reuse water piping. 3 15,000.00 For manhole installation. I— 4 1,600,000.00 Construction of a portion of Duck Key reclaimed water distribution system. -_ 5 14,540.00 Soil contamination remediation. 6 22,110.88 Increase cost of stainless steel piping. Over the course of construction,unforeseen field conditions 7 (173,955.45) (7,248.55) necessitated changes in piping configuration.of wastewater collection system and reclaimed water reuse system .resulting in an overall decrease in materials needed Giannetti $8,228,012.20 original contract amount — Installation of approximately 24,120 feet of PVC water main Contract 2 1 1,359,133.00 &appurtenances for Geiger Key to replace old cast iron water lines. 2 12,325.00 29,802.00 Installation of tapping sleeves,security fencing,force main r^ Chaney Toppino& pump outs,pump,&bridge hanger modifications. Sons $9,737,807.39 original contract amount i_!Contract 3 1 179,763.95 To construct reclaimed,i.e.,reuse water piping. —_ 2 921,401.31 To construct potable and reclaimed water main extensions. 3 21,225.89 139,549.68 Miscellaneous changes to sewer and water systems. —ADB Utility $1,698,732.60 original contract amount Contractors Contract 4 1 6,198.50 Increase cost for asphalt for reclaimed water system work. 2 63,311.22 Increase cost for additional milling,paving&asphalt overlay for reclaimed water system work. 3 114,510.00 Excavation,lateral relocations,changes in Tiburon Circle, pump price increase,etc. 4 32,316.00 Added manholes and laterals. (10,000.00) For added delays. P Wharton-Smith $10,777,000 original contract amount IL Contract 6 . 1 - - DEP supplementary conditions acknowledgement Modify information and SCADA system to a fiber based 2 51,467.00 information system requiring installation of additional electrical systems,conduiting and wiring. 3 58,504.00 To provide lighting protection for plant monitoring and control systems. 4 (173,800.00) Material&work deletions relating to reuse. 5 (52,821.00) Exclusion of Aqua's eng neering charges b' 6 18,200.00 Electrical changes and water piping I L. 11 h 1 b EXHIBIT B Florida Statute 287.055 Note: IA has highlighted areas of this exhibit. I Statutes & Constitution :View Statutes :->2009->Ch0287->Section 055 : Online Sunshine Page 1 of 6 Select Year: 2009 '3 The 2009 Florida Statutes Title XIX Chapter187 Yiewfntire Chapter PUBLIC BUSINESS PROCUREMENT OF PERSONAL PROPERTY AND SERVICES 287.055 Acquisition of professional architectural, engineering, landscape architectural, or surveying and mapping services; definitions; procedures; contingent fees prohibited; penalties.-- (1) SHORT TITLE.--This section shall be known as the"Consultants'Competitive Negotiation Act." (2) DEFINITIONS.--For purposes of this section: (a) "Professional services' means those services within the scope of the practice of architecture, professional engineering, landscape architecture, or registered surveying and mapping, as defined by the laws of the state, or those performed by any architect, professional engineer, landscape architect, or registered surveyor and mapper in connection with his or her professional employment or practice. (b) "Agency" means the state, a state agency, a municipality, a political subdivision, a school district, or a school board. The term "agency" does not extend to a nongovernmental developer that contributes public facilities to a political subdivision under s. 38Q.06 or ss. 163.322Q-163.3243. (c) -Firm" means any individual, firm, partnership, corporation, association, or other legal entity permitted by law to practice architecture, engineering, or surveying and mapping in the state. (d) "Compensation" means the amount paid by the agency for professional services regardless of whether stated as compensation or stated as hourly rates, overhead rates, or other figures or formulas from which compensation can be calculated. (e) "Agency official" means any elected or appointed officeholder, employee, consultant, person in the category of other personal service or any other person receiving compensation from the state, a state agency, municipality, or political subdivision, a school district or a school board. (f) "Project" means that fixed capital outlay study or planning activity described in the public notice of the state or a state agency under paragraph (3)(a). A project may include: 1. A grouping of minor construction, rehabilitation, or renovation activities. 2. A grouping of substantially similar construction, rehabilitation, or renovation activities. (g) A"continuing contract" is a contract for professional services entered into in accordance with all the procedures of this act 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 individual project under the contract does not exceed $2 million, for study activity if the fee for professional services for each individual study under the contract does not exceed $200,000, or for http://www.leg.state.il.us/Statuteslindex.cfm?App mode=Display_Statute&Search_String=&.uRL=Ch0287;5... 5/5/2010 Statutes & Constitution :View Statutes :->2009->Ch0287->Section 055 : Online Sunshine Page 2 of 6 work of a specified nature as outlined in the contract required by the agency, with the contract being for a fixed term or with no time limitation except that the contract must provide a termination clause. Firms providing professional services under continuing contracts shall not be required to bid against one another. (hi A "design-build firm" means a partnership, corporation, or other legal entity that: 1. Is certified under s. 489.1 t9 to engage in contracting through a certified or registered general contractor or a certified or registered building contractor as the qualifying agent; or 2. Is certified under s. 471.023 to practice or to offer to practice engineering; certified under s. 481.219 to practice or to offer to practice architecture; or certified under s. 481.319 to practice or to offer to practice landscape architecture. (il A "design-build contract" means a single contract with a design-build firm for the design and construction of a public construction project. (j) A "design criteria package" means concise, performance-oriented drawings or specifications of the public construction project. The purpose of the design criteria package is to furnish sufficient information to permit design-build firms to prepare a bid or a response to an agency's request for proposal, or to permit an agency to enter into a negotiated design- build contract. The design criteria package must specify performance-based criteria for the public construction pro)ect, including the legal description of the site, survey information concerning the site, interior space requirements, material quality standards, schematic layouts and conceptual design criteria of the project, cost or budget estimates, design and construction schedules, site development requirements, provisions for utilities, stormwater retention and disposal, and parking requirements applicable to the project. (k) A "design criteria professional" means a firm who holds a current certificate of registration under chapter 481 to practice architecture or landscape architecture or a firm who holds a current certificate as a registered engineer under chapter 471 to practice engineering and who is employed by or under contract to the agency for the providing of professional architect services, landscape architect services, or engineering services in connection with the preparation of the design criteria package. (t) "Negotiate or any form of that word means to conduct legitimate, arms length discussions and conferences to reach an agreement on a term or price. For purposes of this section, the term does not include presentation of flat-fee schedules with no alternatives or discussion. (3) PUBLIC ANNOUNCEMENT AND QUALIFICATION PROCEDURES.-- (a)1. Each agency shall publicly announce, in a uniform and consistent manner, each occasion when professional services must be purchased for a project the basic construction cost of which is estimated by the agency to exceed the threshold amount provided in s. 287.017 for CATEGORY FIVE or for a planning or study activity when the fee for professional services exceeds the threshold amount provided in s. 287.017 for CATEGORY TWO, except in cases of valid public emergencies certified by the agency head. The public notice must include a general description of the project and must indicate how interested consultants may apply for consideration. 2. Each agency shall provide a good faith estimate in determining whether the proposed activity meets the threshold amounts referred to in this paragraph. (b) Each agency shall encourage firms engaged in the lawful practice of their professions that desire to provide http://www.leg.state.fl.us!Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL h0287/S... 5/5/2010 Statutes & Constitution :View Statutes :->2009->Ch0287->Section 055 : Online Sunshine Page 3 of 6 professional services to the agency to submit annually statements of qualifications and performance data. (c) Any firm or individual desiring to provide professional services to the agency must first be certified by the agency as qualified pursuant to taw and the regulations of the agency. The agency must find that the firm or individual to be employed is fully qualified to render the required service. Among the factors to be considered in making this finding are the capabilities, adequacy of personnel, past record, and experience of the firm or individual. (d) Each agency shall evaluate professional services, including capabilities, adequacy of personnel, past record, experience, whether the firm is a certified minority business enterprise as defined by the Florida Small and Minority Business Assistance Act, and other factors determined by the agency to be applicable to its particular requirements. When securing professional services, an agency must endeavor to meet the minority business enterprise procurement goats under s. 287_21451. (e) The public must not be excluded from the proceedings under this section. (4) COMPETITIVE SELECTION.-- (a) For each proposed project, the agency shall evaluate current statements of qualifications and performance data on file with the agency, together with those that may be submitted by other firms regarding the proposed project, and shall conduct discussions with, and may require public presentations by, no fewer than three firms regarding their qualifications, approach to the project, and ability to furnish the required services. (b) The agency shall select in order of preference no fewer than three firms deemed to be the most highly qualified to perform the required services. 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; recent, current, and projected workloads of the firms; and the volume of work previously awarded to each firm by the agency, 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. The agency may request, accept, and consider proposals for the compensation to be paid under the contract only during competitive negotiations under subsection (5). (c) This subsection does not apply to a professional service contract for a project the basic construction cost of which is estimated by the agency to be not in excess of the threshold amount provided in s. Z87.017 for CATEGORY FIVE or for a planning or study activity when the fee for professional services is not in excess of the threshold amount provided in s. Z$7.017 for CATEGORY TWO. However, if, in using another procurement process, the majority of the compensation proposed by firms is in excess of the appropriate threshold amount, the agency shall reject all proposals and reinitiate the procurement pursuant to this subsection. (d) Nothing in this act shall be construed to prohibit a continuing contract between a firm and an agency. (5) COMPETITIVE NEGOTIATION.-- (a) 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. In making such determination, the agency shall conduct a detailed analysis of the cost of the professional services required in addition to considering their scope and complexity. For any lump-sum or cost-plus-a-fixed-fee professional service contract over the threshold amount provided in s. 287_017 for CATEGORY FOUR, the agency shall require the firm receiving the award to execute a truth-in-negotiation certificate http.,'rw Vv.w.leg.state.fl.us;Statutesiindex.cfm?App_mode—I)isplay_Slat ute&Search_String=&URL=Ch0287/S... 5i5/2010 r1 ' Statutes&Constitution :View Statutes :->2009->Ch0287->Section 055 : Online Sunshine Page 4 of 6 1-1 stating that wage rates and other factual unit costs supporting the compensation are accurate, complete, and current at the time of contracting. Any professional service contract under which sucha certificate is required must contain a r provision that.the original contract price and any additions thereto will be adjusted to exclude any significant sums by which the agency determines the contract price was increased due to inaccurate, incomplete, or noncurrent wage rates - and other factual unit costs. All such contract adjustments must be made within 1 year following the end of the contract. ' (b) Should the agency be unable to negotiate a satisfactory contract with the firm considered to be the most qualified 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. Failing accord with the second mostqualified firm, the agency must terminate negotiations.The agency shall then undertake negotiations with. the third most qualified firm. (c) Should the agency be unable to negotiate a satisfactory contract with any of the selected firms, the agency shall select additional firms in the order of their competence and qualification and continue negotiations in accordance with -} this subsection until an agreement is reached. (6) PROHIBITION AGAINST CONTINGENT FEES.-- (a) Each contract entered into by the agency for professional services must contain a prohibition against contingent fees as follows: "The architect (or registered surveyor and mapper or professional engineer, as applicable)warrants that he or she has not employed or retained any company or person, other than a bona.fide employee working solely for the architect(or registered surveyor and mapper, or professional engineer, as applicable)to solicitor secure this agreement and that he or she has not paid or agreed to pay any person, company, corporation, individual, or firm, other thana bona fide employee working solely for the architect (or registered surveyor and mapper or professional engineer, as applicable) any fee,.commission, percentage, gift, or other consideration contingent upon or resulting from the award or making of this agreement."For the breach or violation of this provision, the agency shalt have the right to terminate the agreement without liability and, at its discretion, to deduct from the contract price, or otherwise recover, the full amount of such fee, commission, percentage, gift, or consideration. (b) Any individual, corporation, partnership, firm, or company, other than a bona fide employee working:solely for an architect, professional engineer, or registered land surveyor and mapper, who offers, agrees,-or contracts to solicit or secure agency contracts for professional services for any other individual, company, corporation, partnership,or firm and to be paid, or is paid, any fee, commission, percentage, gift, or other consideration contingent upon, or resulting from, the award or the.making of a contract for professional services shall, upon conviction in a.competent court of this state, be found guilty of a first degree misdemeanor, punishable as provided in s. ZZS.0882 ors.ZZ5.083. (c) Any architect, professional engineer, or registered surveyor and mapper, or any group, association, company, corporation, firm, or partnership thereof, who offers to pay, or pays, any fee,commission, percentage, gift,:or other TT consideration contingent upon, or resulting from, the award or.making of any agency contract for professional services shalt, upon conviction in a state court of competent authority, be found guilty of a first degree misdemeanor, punishable as provided in s. 775.082 or s. 775.083. (d) Any agency official who offers to solicit or secure, or solicits or secures, a contract for professional services and to be paid, or is paid, any fee, commission, percentage, gift, or other consideration contingent.upon the award or making of such a contract for professional services between the agency and any individual person, company, firm, partnership, or corporation shall, upon conviction bya court of competent authority, be found guilty of a'first g ty degree misdemeanor, punishable as provided in s. 7Z5.1082 or s. Z75..213. http://www.leg.state.fi.us/Statutes/index.ef'm?App mode=Display_Statute&Search_String=&URL=Ch0287/S... 5/5/2010 Statutes&Constitution :View Statutes :->2009->Ch0287->Section 055 : Online Sunshine Page 5 of 6 (7) AUTHORITY OF DEPARTMENT OF MANAGEMENT SERVICES.--Notwithstanding any other provision of this section, the Department of Management Services shall be the agency of state government which is solely and exclusively authorized and empowered to administer and perform the functions described in subsections (3), (4), and (5) respecting all projects for which the funds necessary to complete same are appropriated to the Department of Management Services, irrespective of whether such projects are intended for the use and benefit of the Department of Management Services or a other gamer arty agency of government. However, nothing herein shall be construed to be in derogation of any authority conferred on the Department of Management Services by other express provisions of law.Additionally, any agency of government may, with the approval of the Department of Management Services, delegate to the Department of Management Services authority to In administer and perform the functions described in subsections (3), (4), and (5). Under the terms of the delegation, the agency may reserve its right to accept or reject a proposed contract. (8) STATE ASSISTANCE TO LOCAL AGENCIES.--On.any professional service contract for which the fee.is over$25,000, the Department of Transportation or the Department of Management Services shall provide, upon request by a municipality, political subdivision, school board, or school district, and upon reimbursement of the costs involved, assistance in selecting consultants and in negotiating consultant contracts. (9) APPLICABILITY TO DESIGN-BUILD CONTRACTS.-- (a) .Except as provided in this subsection, this section is not applicable to the procurement of design-build contracts by any agency, and the agency must award design-build contracts in accordance with the procurement laws, rules, and ordinances applicable to the agency. (b) The design criteria package must be prepared and seated by a design criteria professional employed by or retained by the agency. If the agency elects to enter into a professional services contract for the preparation of the design criteria package, then the design criteria professional must be selected and contracted with under the requirements of subsections (4)and (5). A design criteria professional who has been selected to prepare the design criteria package is not eligible to render services under a design-build contract executed pursuant to the design criteria package. (c) Except as otherwise provided in s. 33L.11(7),the Department of Management Services shall adopt rules for the award of design-build contracts to be followed by state.agencies. Each other agency must adopt rules or ordinances for the -- award of design-build contracts. Municipalities, political subdivisions,school:districts, and school boards shall award design-build contracts by the use of a competitive proposal selection process as described in this subsection, or by the use of a qualifications-based selection process pursuant to subsections(3), (4), and (5) for entering into a contract whereby - the selected firm will, subsequent to.competitive negotiations, establish a-guaranteed maximum price and guaranteed completion date. If the procuring agency elects the option of qualifications-based selection, during the selection of the design-build firm the procuring agency shall employ or retain a licensed design professional appropriate to the project to - I serve as the agency's representative. Procedures for the use of a competitive proposal selection process must include as a minimum the following: 1. The preparation of a design criteria package for the design and construction of the public construction project. 2. The qualification and selection of no fewer than three design-build firms as the most qualified, based on the qualifications, availability, and past work of the firms, including the partners or members thereof. 3. The criteria, procedures, and standards for the evaluation of design-build contract proposals or bids, based on price, technical, and design aspects of the public construction project, weighted for the project. ,httpJ/www.leg.state.fl.us/Statutes/index.cfn?App mode=Display_Statute&Search_String—&URL--Ch0287/S... 5/5/2010 I�l Statutes&Constitution:View Statutes :->2009->Ch0287->Section 055 :Online Sunshine Page 6 of 6 4. The solicitation of competitive proposals, pursuant to a design criteria package, from those qualified design-build firms and the evaluation of the responses or bids submitted by those firms based on the evaluation criteria and procedures established prior to the solicitation of competitive proposals. 5. For consultation with the employed or retained design criteria professional concerning the evaluation of the responses or bids submitted by the design-build firms, the supervision or approval by the agency of the detailed working drawings of t the project; and for evaluation of the compliance of the project construction with the design criteria package by the design criteria professional. -, 6. In the case of public emergencies, for the agency head to declare an emergency and authorize negotiations with the best qualified design-build firm available at that time. 1 (10) REUSE OF EXISTING PLANS.--Notwithstanding any other provision of this section, there shall be no public notice _ requirement or utilization of the selection process as provided in this section for projects in which the agency is able to reuse existing plans from a prior project of the agency, or, in the case of a board as defined in s. 1013.01, a prior project of that or any other board. Except for plans of a board as defined in s. 1013.01, public notice for any plans that are intended to be reused at some future time must contain a statement that provides that the plans are subject to reuse in accordance with the provisions of this subsection. (11) CONSTRUCTION OF LAW.--Nothing in the amendment of this section by chapter 75-281, Laws of Florida, is intended to supersede the provisions of ss. 1013.45 and 10.13 History.--ss. 1, 2, 3, 4, 5, 6, 7, 8, ch. 73-19; ss. 1, 2, 3, ch. 75-281; s. 1,ch. 77-174; s. 1, ch. 77-199; s. 10, ch. 84-321; ss. 23, 32, ch. 85-104; s. 57, ch. 85-349; s. 6, ch. 86-204; s. 1, ch. 88-108; s. 1, ch. 89-158; s. 16, ch. 90-268; s. 15, ch. 91- 137; s. 7, ch. 91-162; s. 250, ch. 92-279; s. 55, ch. 92-326; s. 1, ch. 93-95; s. 114, ch. 94-119; s. 10, ch. 94-322; s. 868, ch. - - 95-148; s. 2, ch. 95-410; s. 45, ch. 9b-399; s. 38, ch. 97-100; 5. 1, ch. 97-296; s. 80, ch. 98-279; s. 55, ch. 2001-61; s. 63, ch. 2002-20; s. 944, ch. 2002-387; s. 1, ch. 2005-224; s. 19, ch. 2007-157; s. 3, ch. 2007-159; s. 3, ch. 2009-227. Copyright©1995-2010 The Florida Legislature •Privacy Statement•C_onttact i i http://www.leg.state.fl.us/Statutes/index.cfm?App_rnode=Di splay_Statute&Search_String=&U RL=Ch0287/S... 5/5/2010 r-1 EXHIBIT C Professional Engineering Services Request for Qualifications r_ 4111( Florida Keys 2;5 Aqueduct Authority Past Office Box 1239 1100 Kennedy Drive Keyes Florida 33041-1239 Professional Engineering Services Request for Qualifications Legal Notice The Florida Keys Aqueduct Authority(FKAA),pursuant to Florida Statutes,Chapter 287.055, Consultants Competitive Negotiations Act,is seeking Professional Engineering Consulting firms to enter into a Continuing Contract for Capital Improvement Project Engineering Services for the planning,design,permitting,bid phase,and c+astractba and certification phase services for system hnprovements of the FKAA's utility system,and faalHes. A copy of the Qualifications Package may be obtained from Ms.Peggy Medina,FKAA Department of Eagieeering,1100 Kennedy Drive,Key West,FL 33040;telephone(305)296-2454. Consulting firms desiring to provide professional services to FKAA shall submit five(5)copies of a Letter of Interest and completed Qualifications Package addressed to: Ray M.Shhnokubo,PE Director of Environmental Services Florida Keys Aqueduct Authority 1100 Kennedy Drive Telephone: 305-296.2454 P.O.Box 1239 Fax: 305-294-5623 Key West,FL 33041-1239 E-Mail: rshhnoknbotZa fkau.com Correspondences for additional information via e-mail are preferred Letter of Interest and Qualifications Package shall be sealed in envelopes plainly marked on the outside: "Project Name: Florida Keys Aqueduct Authority Capital Improvement Project Engineering Service Qualifications Package" Letters of Interest and Qualifications Packages will be received until 4:30 p.m.,local time,on Tuesday,the 2l"1 day of March,2006. Review,evaluation and ranking of the Letter of Interest and Qualifications Package will be performed by a selection committee as determined by FKAA's Executive Director. The services include assistance from Consulting firms in planning,design,permitting,bid phase, and construction phase services for the following FKAA Capital Improvement Projects: • • Stock Island WTP-Reverse Osmosis WTP Upgrade Design • Florida City WTP-Membrane WI?Expansion Design and Construction • Florida City W IP—Deep Injection Wen Constructon • Florida City WTI'—Raw Water Supply Well Construction • Ocean Reef WTP-Membrane WIT Expansion Design and Construction • Ocean Reef WTI'—Concentrate Disposal Design and Construction • Ocean Reef WTP—Raw Water Supply Well Design and Construction • Water Distribution System Addition—Design and Construction • Marathon Pump Station Improvements-Construction • Water Trau mbdon System-Cathodic Ps+otectlon Contraction • Water Transmission System-Pipeline Replacement Design and Construction • Water Transmission System— Pump Station Design and Construction • Island- and a • Big Copper Wastewater Collection System—Construction • Big Copper WWTP—Dedga and Construction • Stock Island Wastewater Transmission System—Design aid Construction • Stock Island W WTP—AWT Upgrade and Expansion Design and Construction • Duck Key Wastewater Collection System—Design and Contraction • Hawk's Cay WWTP—AWT Upgrade and Expansion Design and Construction • Cudjoe and Summerland Wastewater Collection System—Design and Constriction • Cudjoe and Summerland WWT?—Design and Construction • Sugarloaf Wastewater Collection System—Design and Constriction • Sugarloaf WWI?—Design and Construction • Big Pine Wastewater Collection System—Design and Construction • Big Pine W WTP—Design and Construction Only those Consulting firms mbndtgag Letter of Interest and completed Qualifications Package which best meet the needs of the Florida Keys Aqueduct Authority will be considered for the requested services,regardless of past contracts with the Florida Keys Aqueduct Authority. 1I l i ! EXHIBIT D FKAA Invoices Note: IA has highlighted areas of this exhibit. ' • Engineering Division "0, MEMORANDUM 7 - 10//1 To: Jackie Clynes ecor :•!••e Finance Department CQ ;( From: Elizabeth Wood - Sr. Administrator, Sewer Projects Date: 6/3/2008 Re: FKAA Construction Expenses Submitted March 25, 2008 for October 1, 2007 — March 4, 3008. The FKAA reimbursement request for the Big Coppitt Regional Wastewater System in the amount of $3,266,923.26 has been reviewed and approved for $2,168,324.56. Enclosed please find the following: • Purchase Order, • .FKAA Summary of Expenses for October 2007 — March 2008, and • Construction Binder for PE0807 which includes Master Summary Spreadsheet and Summary Spreadsheets for D.N. Higgins, Inc., Charley Toppino & Sons, Inc. and ADB Utility Contractors; pay applications to date, and contract documents. Five construction contracts have been procured by FKAA to build the Big.Coppitt Regional Wastewater Treatment System. These include the following: Component Contractor Contract 1 - Forcemain Douglas .N. Higgins Contract 2 - Geiger/Rockland Collection Engineering awaiting conformed docs Contract 3 - Big Coppitt Collection Charley Toppino & Sons, Inc. Contract 4 - Shark Key Collection ADB Utility Contractors Wastewater Treatment Plant Contract Wharton Smith Li,,..4. This reimbursement request is for forcemain (D.N. Higgins, Inc.), BigCoppitt Collection (CharleyToppino (ADB & Sons, Inc.) and Shark Key Collection Utility Contractors. These components are to be paid from FLDEP Grant Agreemt (Cost Center 23006 - project PE0807). Monroe County is being reimbursed by June 3, 2008 FDEP for Contract 1 , 3 and 4 construction. A binder is enclosed for projects reimburseable from project PE0807 that includes contracts, pay applications, change orders, general and supplementary conditions, and notices to proceed (for D.N. Higgins) to date. Copies of notices to proceed have been requested for Charley Toppino & Sons, Inc. and ADB Utility Contractors. Check # 2234 for Wharton Smith (WWTP Contractor) on the FKAA Summary of Expenses was previously requested for payment on May 7, 2008 from the FRUFC Loan (project PE0806). Contract 1 This reimbursement request is for D.N. Higgins pay applications 10 and 11. Contract 1 has 5 Change Orders. Change Orders 1 , 3, and 5 are for wastewater work. Change Orders 2 and 4 are for water and reclaimed water work that is not covered under the County/FKAA Interlocal Agreement for the Big Coppitt Regional Wastewater System. Change orders 2 and 4 are highlighted in blue to designate "water" work not to be paid by Monroe County. Change Order 5 extended the final completion date to December 1, 2007 A series of calculations are located below the line item quantities. The Payment to Contractor by FKAA reflects the Total Work to Date less Stored Materials, Retainage to Date and the previous column Total Work to Date less Retainage (prior payment). Article 9.3 of Contract 1 allows a reduction in retainage to 5% at 50% complete. FKAA approved a reduction in retainage to 2.5% on pay application 11. County Engineering used 5% for the Retainage to Date and for the Retainage for Ineligible Cost on Pay Application 11. The deducted amount of $104,119.40 is partially for the unallowed retainage and for water work performed under Change Order 2. The Reduction by County Engineer is ineligible costs for water Change Orders less the associated retainage deducted by FKAA in the payment to Contractor. FKAA previously requestedand Engineering Division approved ineligible work in the amount of $494, 39.30 for Douglas N. Higgins, Inc. Pay Applications 6 -7. FKAA calculated the County's payment to FKAA for the wastewater portion of pay application 9 to be $345,227.45; however, this did not include 5% of previously held retainage for Change Orders 1 and 3 (eligible for reimbursement by County). A wastewater payment due calculation sheet is included as the first page of pay application 9 to exhibit the calculation. Engineering requests that $494,439.30 be deducted from this reimbursement request to account for incorrect previous requests associated with ineligible non-wastewater projects. Page 2 of 2 • June 3, 2008 Contract 3 The Notice to Proceed was issued on June 25, 2007 with a final completion date of January 15, 2009. One Change Order for water has been issued. County has only reimbursed FKAA for wastewater work. Copies of notices to proceed have. been requested for Charley Toppino & Sons, Inc. and ADB Utility Contractors. The email from FKAA Contract Manager, Joe Ivey, provides the contract dates in the binder in place of notice to proceed copies. Contract 4 The Notice to Proceed was issued on July 12, 2007 with.a final completion date of February 7, 2008. One Change Order for water has been issued. County has only reimbursed FKAA for wastewater work. A no cost time extension Change Order is anticipated. • Please provide me with a reference number for the reimbursement once made. Please call me with questions or concerns at 292-4526. Thank you. Page.3 of 2 r-� EXHIBIT E FKAA Reconciliation • fkaa Monroe County interiacai agreement Big Coppitt a,rpendaureI I ReimburseMr*cheeks Radassas Wane* . Advance 1 5,000,000.00 August-06 18,458.97 4,981,541.03 September-06 827,784.70 _ 4,153,756.33 December-06 247,541.18 r 3,906,215.15 December-06 65,980.80 3,840,234.35 3,840,234,35 • 3,840,234.35 March-07 524,639.39 _ 3,315,594.96 March-07 148,015.80 r 3,167,579.16 June-07 3,167,579.16 3,167,579.16 3,167,579.16 June-07 713,169.25 2,454,409.91 July-07 640,069.12 804,295.95 (73,302.48), 2,691,939.22 August-07 567,792.68 (19,412.00) 2,143,558.54 September-07 1,247,640.98 (250.00) 896,167.56 oct 07-march 08 3,266,923.26 2,767,410.95 396,655.25 oct 07-march 08 328,301.13 68,354.12 oct 07-march 08 714,996.00 1,060,955.54 414,313.66 Reverse Accruals ;!;It 0{7 74; 520,351.40 January-08 57,642.39 462,709.01 Jar,-Apr 08 67,988.42 171,696.96 J 566,417.55 Jan-Apr 08 2,720,677.03 5,102,008.64 2,947,749.16 Mey&June 2008 726,320.26 3,089,857.55 5,311,286.45 May&lune 2008 467,233.20 4,844,053.25 May&June 2008 150,420.49 4,693,632.76 May&June 2008 1,927,003.95 2,766,628.81 July-08 721,87415 2,044,754.66 July-08 100,837 44 1,943,917.22 Aug&Sept 08 215,327.41 1,728,589.81 Aug&Sept 08 2,564,842.85 (75,101.96) (761,151.08) September-08 2,239,821,41 (5.400.00) (2,995,572.49) September-08 121.57 (22,599.24) (2,973,094.82) December-08 3,458,084.44 (6,431,179.26) lanurary-09 2,143,939.9E 2,198,859.66 (6,376,259.55) February-09 1,749,545.49 5,931,706.26 (2,194,098.78) March-09 75,653,10 552,324.68 (1,717,427.20) Apr,1.09 1,271,457.36 (2,988,884.56) Apr&May-09 2,244,908.66 (5,233,793.22) April Reclass (28.00) (5,233,765,22) May-09 504,102.67 405,203.83 391,778.83 (5,724,442.89) May Reclasses (5,724,442.89) June-09 1,905,793.07 3,351,367.68 (4,278,868.28) June Reclass (11,149.85) (4,267,718.43) July-09 1,078,578.55 2,891,324.06 (2,454,972.92) (2,454,972.92) August-09 180,260.85 (2,635,233.77) September-09 1,117,562 02 (3,752,795.79) Sept Reclasses (991,490.31) (2,761,305.48) September-09 8,902.50 (2,752,402.98) Reverse Accruals (34,589.34) (2,717,813.64) October-09 159,606.11 (18,237.40) (2,539,970.131 Reverse Accruals (2,539,970.13) November-09 31,868.15 215,502.29 (2,356,335.99) December-09 374,646.35 (1,981,6119.64) Jan 10 1,066,374.79 (566,997.07) (2,481,067.36) Jan Reclasses (7,841.10) (2,473,226.26) February-1C 235,194.3S I8458.97 (2,726,879.58) March-10 11,207.00 (2,738,086.58) I (2,738.086.58) 12,738,08658) r�l EXHIBIT F l Incomplete Invoice Note: IA has highlighted areas of this exhibit. • r-� Ir r Ii riM RI�';CPJ 2 iw �y 1� filLkV Engineering Division ± °� ` MEMORANDUM I .» -,3 ' ' !4', . +, ra . - i To: Kevin Madok °•r '1 Finance Department From: Elizabeth Wood — Senior Administrator, Sewer Projects Date: 10/27/09 Re: FKAA Reimbursement Request dated 2/12/09 The FKAA reimbursement request for Big Coppitt Regional Wastewater in the amount of $2,143,939.95 has been reviewed. Construction has previously been reimbursed. Fiscal Year 2008 engineering expenses have been approved in the amount of $142,162.19. Fiscal year 2009 engineering expenses have been approved in the amount of $88,021 .88. Boyle Addendum 2 for engineering services during construction of Contract 2 has still not been received. If it is not received, the approved amount for the FY09 engineering services is $73,340.10. Enclosed please find the following: • Audit Slip for FY08 engineering expenses, • Purchase order # 24275 for FY09 engineering expenses, • Summary Spreadsheet — Finance Format for FY08 and FY09, • Summary Spreadsheet Finance Format assuming Boyle Addendum 2 not received, • FKAA Summary of Expenses for the above pay requests, • Summary Spreadsheet for Brown and Caldwell, • Summary Spreadsheet for HDR, • Summary Spreadsheet for Boyle and • FKAA Copies of vendor invoices and other backup documentation. Please call me with questions or concerns at 292-4525. Thank you. Rig Coppitt Jun-07 CK# ITEM RQSTD DEDUCTED SUPPORTED NOTATION D N Higgins 2907 465,492.19 465,492.19 Pay applicator 003 is marked as 002 D N Higgins 2924 _ 245,430.01 245,430.01 Partiallien waver should be signed for Pay applicator 004. Perez Eng 2936 500.00 500.00 0.00 Backup for permit fees DEP 2942 750.00 750 00 i , 0.00 Backup for permit fees DEP 2943 150.00 150.00 ./ 0.00 Backup for permit fees Sun-Sentinel 2788 847.05 847.05 TOTALS: 713,169.25 1,400.00 711,769.25 CK NO: DATED: 713,169.25 ( 1,400.60 711,769.25 Vl 1 iu1,4)7 CK#-. ITEM - RQSTD DEDUCTED.. SUPPORTED,- .:' NOTATION - •` D N Higgins 2194 14,148.00 14,148.00 0.00 �c-'- :•1i :Dr Reve..sec C'smos s , D N Higgins 2952 194,374.79 194,374.79 Pay Application 005 Only pay 727 87 or Boyle invoice 42545-1 Co not pay 510.060 for FEMA Elevator Certifications FKAA Sites o=Tavernier Customer Service Building and Field office. Hawks Cay Facility. ano Layton Wastewater Facili /. For Bo le invoices 042536 and 44051 we Professional services in connection with constructing a server system and lift stations in the Big Coppitt area of Monroe County"submitted with Boyle Eng 2960 77,244.69 10,000.00 67.244.69 invoices and appropriate backup Brown &Caldwell 2961 72,689.71 18,403.20 54,286.51 Need Authorization for Task 11 (Peer Review)charges. Brown &Caldwell 2961 34,430.40 34,430.40 D N Higgins 2969 194,543.11 194,543.11 Need contract for Boyle project� 16735;1Trofessional services in connecticr: ,v.th :instruction phase generai engineenng and certification Need Bording Passes for Garland and Eckmann and Boyle Eng 2973 28,144.04 28,144.04 0.00 for March 12-13,2007 Brown &Caldwell 2974 55.177.93 6,535.55 48,642.38 Do not pay invoice 132546(-6535.55) Is for Hawks Cay. TOTALS: 670.752.67 77,230.79 593,521.88 CK NO: DATED: 77,230.79 593,521-88 .:-.. .- ....,� ...-.....-'� .4.....nw.rw s... ..vwv S u... ►: raw awvs... LAP _ _ ano war�... a n• .e.. twy Nutting Engineers 2784 Environmental 2,377.50 2.377.50 Brown&Caldwell 2778 Progress Billing#2 ----- 191,175 74 1,216.08 189.959.66 Rec;nS,irseTex.sencen:,es-see below Fl Dept Env Protectior 2772 Permit 230.00 MIS 0.00 f"-sapaoµ'or pe^..n* 'ee a "1111_, 1" Brown 8 Caldwell 2798 Progress Billing#3 6.396.60 6.396 60 Brown 8 Caldwell 2810 Progress Bolling#4 45,140 27 45,140 27 Fla limes Union 2795 Advertising 1.743.25 AlpMO 1:045.95 need prrof of publication s = huiti:A Orlando Sentinel 9885 Advertising 457 82 457 82 5bi�`` Subtotal P/R 247,541 18 ' , TOTALS 247.541 18 2.163.38 245.377.80 249.704 56 CJC NO: DATED: 247,541 18 2,163.38 245,377 80 2.163.36 4...sii, 2118. Need travel expenses organized by traveler and language attesting:o vati. y of travel.smilar to:na:toun:or.the State o'Fiona travel reimburse-nen'fore. The use of tne Florda trav-e'voucher is preferred,'Need air ooarcrn passes.nee a FKAA trave:ao+Ines one per Bier rates for meals,need reason and location for tad,need toll rece:ots and reason for parsing and reasor for ded.a trig 50%of parlungttolts r-, EXHIBIT G Auditor General Finding #14 Note: IA has highlighted areas of this exhibit. AuGt•sT 2006 REPORT No.2007-012 Finding No. 10: The Authority's policies and Finding No. 18: During the 2003 calendar year, procedures for completing travel vouchers and the Authority utilized a law firm that was affiliated documenting travel and training expenses could with its General Counsel, an employee, thus be improved. violating Section 112.31.1(3), Florida Statutes. Finding No. 11: Meal allowances for day travel INTRoDUCIToN (Class C travel) were not reported to the Internal Revenue Service as taxable wages to the The Honda Keys Aqueduct Authority (FKAA) was employee, contrary to Internal Revenue Service created in 1937 by the Florida Legislature and was regulations. recreated as an independent special district by Chapter 76-441, Laws of Honda, as amended by Chapter Finding No. 12: The Authority did not allocate 605, Laws of Florida. Under these laws, the primary $160,000 paid by the wastewater system for the purpose of FKAA was to obtain, supply, and portion applicable to improvements to the water distribute an adequate water supply to the citizens of system. Additionally, some indirect costs for the Florida Keys. adnninistratiye support functions were not allocated to the wastewater system. In 1998 and 2002 , the Authority's enabling legislation was amended to redefine the primary purpose of the Finding No, 13: Contracts with, and invoices Authority to include collecting, treating and disposing from, consultants and outside attorneys did not of wastewater in certain areas oldie Florida Keys. contain specific deliverables or otherwise provide s a basis for payments. FiNtnitit;s aN1) RLt t)MNtt-\DA'Itar Finding No. 14: The Authority used continuing contracts with engineering firms for projects I Financial Management costing over $1 million, contrary to Section. Finding No.1: Administrative Expenses 287.055, Florida Statutes, which requires a competitive selection process. The Honda Key Aqueduct Authority (Authonn•) does not receive specific funding to finance its Finding No. 15: The Authority did not consider administrative expenses. Administrative costs,such as directly purchasing materials for major construction projects or, awarding bids by major salaries and benefits, travel,utilities,and administrative facilities, are financed with user fees for water and components. wastewater services. Accordingly, management's Finding No. 16: The Authority overpaid some decisions as to the level of spending and the nature of engineering firms, made a final payment prior to specific spending activities for administrative expenses completion of the work, and paid for some have an impact on the fees charged to water and charges not included in contracts. Additionally, wastewater users. the Authority paid for some services without the use of competitive bids,contrary to its policies. We disclosed several matters in this report in which we question the efficiency of certain management Finding No. 17: The Authority did not always practices and the public purpose served by incurring establish substantial and final completion dates certain expenses or providing certain benefits to for wastewater projects or document the reasons Authonty employees; specifically, findings No. 5, for delays in meeting these dates. As a result, the investment Practices; No. 6, Weekly Payroll Authority may not have assessed contractors for Processing; No. -, Severance Pay; No. 8, Insurance liquidated damages provided for in their Benetit I pon Retirement; No. 9, Employee Awards contracts. Page 2 of 26 AUGUST 2006 REPORT NO.2007-012 Recommendation: Although not required to construction costs do not exceed SI million, for a do so by law, sound business practices suggest study activity when the fee for such professional that the Authority should follow a competitive service does not exceed $50,000, or for work of a selection process when entering into such specified nature as outlined in the contract. arrangements. The Authority should also develop written agreements for future financial The Authority entered into continuing contracts with arrangements with the consultants and attorneys, three professional engineering firms in 1999 and 2003 documenting specific deliverables and work products. Also, the Authority should formally to provide general water and wastewater consulting evaluate, at least annually, the effectiveness of and design engineering services. The continuing these consultants and attorneys prior to renewing contracts entered into as a result of the selection the agreements. process did not identify or list individual construction projects or outline and describe any work of a Finding No. 14: Competitive Selection of specified nature. The contracts provided that the Engineers Authority would issue task orders to authorize work, Section 287.055, Honda Statutes (the Consultants' projects, and services, and to describe the scope of Competitive Negotiation Act), provides that work to be performed. Compensation for the services professional services, including architectural, performed on each task order was to be based on a professional engineering, landscape architecture, and negotiated lump sum amount, or a not-to-exceed registered surveying services,be acquired pursuant to a budgeted amount based on time charges and the formal competitive selection and negotiation process. hourly rates listed in the contracts, plus actual The Act generally requires that the Authority publicly reimbursable expenses. The Board reaffirmed the announce, in a uniform and consistent manner, each contracts annually, and periodically approved occasion when professional services must he adjustments to the hourly rates listed in the contracts. purchased for a project with a basic construction cost The Authority issued continuing contract task orders that is estimated by the agency to exceed $250,000, or for the design, permitting, bidding, and construction when a planning or study activity fee is estimated to phase engineering services to one engineering firm for exceed $25,000. Additionally, the Act provides that a four wastewater projects in which construction costs continuing contract for professional services may be exceeded$1,(JOO,000,as follows: entered into for construction projects when the Task Order Total Project Range of Dates Engineering Construction Project Task Orders Issued Elsa Costs, little \c•ntce& I.tttic \cntcc I.xpaiidcd (. lb,.'>'1—4 16/114 S1,532, 92 $I 1,31 1,304 Ray Point 8/28/00—5/08/04 525,127 _ 5,192,141) Conch Key 8/28/00—7/29/04 337,917 1,390,642 Big Coppitt Key 11/02/05 1,135,553 (1) 23,575,(N10 (2) (1) Amount is for the design phase only (2) Estimated construction costs reported in the 5-year capital improvement plan Page 12 of 26 AUGUST 2006 REPORT NO.2007-012 Under these conditions, the engineering firms were Finding No. 15: Awarding of Wastewater hired to perform professional engineering services for Constniction Contracts construction projects without going through the The Authority has recently completed, or is in the public announcement and formal competitive process of completing, several wastewater projects selection and negotiation process, although the g P g with construction costs totaling approximately $23.2 estimated construction costs exceeded the thresholds million. Our review of projects either completed or specified in Section 287,055, Florida Statutes. The underway disclosed the following: Legislature has recognized in Section 287.001, Florida Statutes, that fair and open compcution is a basic tenet ' The Authority's construction contracts of public procurement, and that such competition generally do not provide for the direct reduces the appearance and opportunity for favoritism purchase of construction materials and, as a and inspires public confidence that contracts are result, sales tax is included in the construction awarded equitably and economically. Absent costs of water and wastewater system facilities utilization of the required competitive selection and improvements. Section 212.08(6), Florida process. the Authority's ability to demonstrate the fair, Statutes, provides an exemption from the equitable, and economical procurement of Florida sales tax to governmental entities professional services is limited. when payments are made directly to the vendor by the governmental entity. Although In March 2006, the Authority published a request for it may not be feasible to directly purchase all qualifications from professional engineering consulting construction materials, the Authority could firms interested in entering into engineering services have directly purchased a large portion of the contracts with the Authority for individual capital required construction materials for those improvement projects. A total of 27 water and projects and benefited from the sales tax wastewater capital Improvement projects were savings. for example, major equipment for identified in the request for qualifications. We were the Little Venice Wastewater System, advised by Authority personnel that continuing excluding the collection system,was estimated contracts for engineering services would not be used by the Authority's contracted engineer to cost for the projects identified in the request for 51,129,000, on which sales tax would have qualifications, and that continuingcontracts would no totaled S67 740 (6 percent of $1,129,t)00). longer be used for any professional services for Although there would be some cost to the construction projects in which estimated construction Authority to directly purchase materials, such costs exceed$1 million. as staff time and storage of material prior to Recommendation: The Authority should installation, these costs should be weighed establish written policies and procedures to against the sales tax that would be incurred if ensure that professional services are obtained the Authority did not directly purchase the pursuant to competitive selection and negotiation when the construction cost or the fee for materials. Direct purchase of materials would professional services is estimated to exceed the entail separation between materials and labor thresholds specified in Section 287.055, Florida costs on bid proposals. During the audit Statutes. period, the Authority did not require competitive bid proposals to contain separate costs for materials and labor for wastewater projects. The practice of direct purchases is being utilized by other governmental entities, Page 13 of 26 • AUGUST 2006 REPORT No.2007-012 • APPENDIX A(CONTINUED) MANAGEMENT RESPONSE August 25,2006 Page 5 Response No. 14-Competitive Selection of Engineers Section 287.055 of the Florida Statutes provides for the acquisition of professional architectural. engineering.landscape architectural or surveying and mapping seines.It establishes a competitive selection process based on qualifications.rather than compensation. the Authority solicits eiigineers pursuant to the provisions of this statute. The .\uthority is currently in compliance with the pros sinus of Section 287.055 ol'the Florida Statutes. Response No. 15-Awarding of Wastewater('onstructlon Contracts It is the practice of the Authority to consider the cost benefits of the direct purchase of certain materials, thereby receiving a sales tax savings. the Authority has directly purchased materials.such as large generators and pump-station pumps.on previously procured projects and will continue to consider this option on all future projects if a savings will be realized.The Authority will also consider modifying its construction contract documents to allow for the direct purchase of materials on a more regular basis. For us first several wastewater projects,the Authority procured the projects as one large system. I he reason tier this process was to provide for a single point of responsibility through a general contractor for the entire project.This process relieved the Authority of any responsibility or risk associated with the coordination of the interfacing of the sewer collection system with the sewer treatment plant.This interfacing is especially critical with a vacuum sewer system. The Authonty is now designing the Big C'opput Wastewater System which includes a wastewater treatment plant and a gravity collection system. phis project will be procured by major components with the collection system hid separately from the treatment plant The Authority will also consider this procurement option on future projects. Response No. 16-Contract Pay meats The Authority retains an internal auditor and is subject to an annual audit by an independent auditor. The items of concern mentioned in this finding have been audited by the Authority's internal auditor whose recommendations of specific procedures to enhance related internal controls have been implemented.The Authority will bill the engineering firms involved to recover any amounts due to the Authority. the instance cited regarding non-competitive bidding for pumping and disposal of wastewater sludge is an isolated instance.The Authority originally bid the pumping and disposal of wastewater sludge as part of contractual services for plant operation,but the results indicated that this service was too costly. fhc vendor was utilized first on an emergency basis,and later used due to twenty four(24)hour service • availability and Florida Department of Environmental Protection permit requirements that disposal be made by way of Monroe County transfer stations. the vendor utilized has a contract with Monroe County for sludge disposal.The Authority will ensure that future routine pumping and disposal of wastewater and sludge from the Authority's wastewater projects will be procured by competttl e bidding. Page 25 of 26 it EXHIBIT H -11 Auditor General Follow-Up #14 Note: IA has highlighted areas of this exhibit. SEPTEMBER 2008 REPORT NO.2009-012 Board are initialed by the General Counsel, through the Executive Director and himself by Executive Director, Department Director electronic mail correspondence, telephone Executive,and internal Auditor. conservations, and other written communication (copies of proposed legislation,law summaries,etc.). Contract renewal discussions during Board meetings may include law firm or consultant past Finding No. 14: Competitive Selection of performance, and such discussions would be Engineers documented in the Board's minutes. Previously reported The Authority entered into written agreements with eight law firms to provide a variety of legal services. The Authority used continuing contracts with Our review of the attorney contracts disclosed that the engineering firms for projects costing over $1 million, contracts generally specified the nature of the services contrary to Section 287.055, Honda Statutes, which to be performed and the amount of compensation. requires a competitive selection process. The Authority also entered into lump sum consultant We recommended that the Authority establish written agreements with three consultants to provide policies and procedures to ensure that professional governmental relations consulting services, which services are obtained pursuant to competitive selection included lobbying and Legislative contacts for the and negotiation when the construction cost or the fee advancement of .'luthority purposes. Generally, the for professional services is estimated to exceed the agreements identified the services to be provided. thresholds specified in Section 287.055, Florida Statutes. i The agreement with one consultant required quarterly written reports or presentations to the Results of follow-up procedures Board sununanzing the results of work performed The Aurhorin has partially addressed this finding and initiatives accomplished. Quarterly written Our review disclosed that the Authority did not follow reports or presentations were provided to the the competitive selection and negotiation procedures Board,as required. required by Section 287.055, Florida Statutes, the `P. Agreements with the other two consultants Consultants' Competitive Negotiation Act, when provided that services would include consultation awarding contracts for professional engineering with the Authority through the Executive services. Requests For Qualifications were issued and a selection committee was established for evaluating Director, General Counsel and, as required from time to time, by presentations directly to the the qualifications of responding firms, ranking the firms based on various qualification criteria, and Board; however, the agreements did not provide for any specific work products or deliverables, or recommending qualified firms to the Board. The require written reports summarizing the results of Board-approved engineering firms were placed in a their work. Between August 2006 and March pool from which firms were later selected when 2008 each of the two consultants made two proposed construction projects were scheduled to Legislative update presentations to the Board. begin. However, Section 287.055(3)(a), Florida Subsequent to our inquiry, one agreement was Statutes, requires the Authority to publicly announce amended on July 24, 2008, and the other each occasion when professional services must be agreement was renewed on June 26, 2008, to purchased for a project, the basic construction cost of include a provision for written quarterly reports. which is estimated to exceed $250,000. Section 287.055(4)(a), Florida Statutes, requires the Authority, We were advised by the Authority's General Counsel for each proposed project, to evaluate current that the three consultants provided continuing statements of qualifications and performance data on updated Legislative information to the Authority Page 7 of 15 SEPTEMBER2008 RI t'oiit No.2009-012 file, together with those that may be submitted by -- other firms regarding the proposed project, and to Finding No. 15: Awarding of Wastewater conduct discussions with no fewer than three firms Construction Contracts fe regarding their qualifications, approach to the project, Previously reported and ability to furnish the required services. Subsequent to our inquiry, on June 26, 20118, the The Authority did not consider directly purchasing Board approved competitive selection policy and materials for major construction projects, or awarding bids by major components. procedures for the acquisition of professional architectural, engineering, landscape architectural or We recommended that the .Authority consider surveying and mapping services. The policy and implementing procedures that require competitive bid procedures provided in part that the Authority shall proposals to contain separate costs for materials and negotiate a contract with the most qualified firm based labor for construction projects, and to provide for the on current statements of qualifications, capabilities, direct purchase of construction materials whenever it adequacy of personnel, past record, experience. would be more cost effective. Additionally, we whether the firm is a certified minority business recommended that the Authority consider awarding enterprise, and such other factors determined by the contracts based on the lowest bid by major Authority to be applicable to its particular component, when such components are unrelated requirements. Additionally, the policies and sufficiently to the remainder of the project so as not to procedures required the Executive Director or his hinder the timely completion or coordination of the designee to prepare written certification that the project. We noted that such procedures, if effectively requirements of the policy had been satisfied. implemented, would enable the Authority to better evaluate bids and could result in cost savings in capital Follow-up to Executi.e Director's Response construction projects. In his response, the E aeiive Director stated that the Results of follow-up procedures Authority publicly advertises all projects identified in its Capital Improvement Plan when awarding contracts for professional The Authority has partially addressed this finding engineering firms and that if a preyed it not identified in the Our review disclosed that five wastewater construction Capital Improvement Plan, it is advertised in a separate public contracts entered into subsequent to the release of announcement.Although the Executive Director stated that the report No. 200'-012 were awarded based on the Board of Directors has adopted policies and procedures to insure lowest bid by major component. However, bid compliers with applicable Florida Statutes, the point of our proposals for those contracts were not required to finding is that such policies and procedures provide for the Board show separate costs for labor and materials. The of Directors to select a Board pre-approved engineering firm_from contracts awarded from those bids, totaling a pool when cnnstnuetion projects are scheduled to begin, rather approximately $30 million, did not provide for the than follow Section 287.055(3)(a), Florida Statutes, which direct purchase of construction materials and requires the Authority to publicly announce each occasion when equipment. We were advised by Authority personnel professional services must be punhased fora project. that the contractor and three suppliers of equipment for the Big Coppitt Wastewater Treatment Plant construction project ($10,77',000 contract) verbally agreed to allow the Authority to directly purchase some equipment for the treatment plant. The Authority did, however, provide for and made direct purchases of construction materials and Page 8 of 15 SEPTEMBER 2008 REPORT No.2009-012 The Auditor General has found that the Authority has adequately addressed this finding. Response No. 6 - Weekly Payroll Processing The Auditor General has found that the Authority has adequately addressed this finding. Response No. 7- Severance Pay The Auditor General has found that the Authority had no opportunity to address this finding. The Authority will address this finding the next time it considers professional employee contracts. Response No. S - Insurance Benefits Upon Retirement The Auditor General has found that the Authority has adequately addressed this finding. Response No.9- Employee Awards and Benefits The Auditor General has found that the Authority has adequately addressed this finding. Response No. 10-Travel Expense Requirements The Auditor General has found that the Authority has partially addressed this finding. The Authority has put in place procedures that insure that all Board Members and staff sign their respective certifications on the travel vouchers, all use of purchasing cards is documented on the travel vouchers and times of departures and returns are properly noted on travel vouchers before payment is made. Response No. 11 -Class C Travel Reimbursement The Auditor General has found that the Authority has partially addressed this finding. The Authority, upon being advised of this IRS requirement, now reports all Class C Travel Expense requirements to the IRS. Response No. 12 - Allocation of Costs The Auditor General has found that the Authority has adequately addressed this finding. Response No. 13 - Consultant and Attorney Services The Auditor General has found that the Authority has partially addressed this finding. The Authority's contracts with all governmental consultants now require that specific work products or deliverables be submitted to the Board of Directors on at least a quarterly basis. Response No. 14-Competitive Selection of Engineers Page 14 of 15 SEPTEMBER 2008 MAJOR' No.2009-012 The Auditor General has found that the Authority has partially addressed this finding. The Authority publically advertises all projects identified in its Capital Improvement Plan when awarding contracts for professional engineering firms. If a project is not identified in the Capital Improvement Plan it is advertised in a separate public announcement. The Board of Directors has adopted policies and procedures to insure compliance with applicable Florida Statutes. Response No. 15-Awarding of Wastes+ater Construction Contracts The Auditor General has found that the Authority has partially addressed this finding. The Authority has put in place procedures to insure that all construction contracts provide provisions for the direct purchases of construction materials, when it is in the best interest of the Authority. Response No. 16-Contract Payments The Auditor General has found that the Authority has partially addressed this finding. The Authority is seeking to recover a $2,226.00 refund for a duplicate payment. Internal procedures are in place to insure that no payments are made without the proper documentation. Response No. 17-Substantial and Final Completion Dates The Auditor General has found that the Authority has adequately addressed this finding. Response No. 18-Conflict of Interest The Auditor General has found that the Authority has had no opportunity to address this finding. The Authority on December 22, 2005 terminated the General Counsel's contract effective January 27, 2006, thereby resolving this conflict of interest. There are no current contracted employees affiliated with any outside professional firms. On behalf of the Florida Keys Aqueduct Authority Board and Staff, I would like to take this opportunity to thank you and your Staff for the professionalism exhibited in conducting the initial audit and this follow-up draft report. Sincerely a► s C. , Executive Director orida Key queduct Authority Board of Directors Page 15 of 15 • EXHIBIT I • AGO 93-56 Note: IA has highlighted areas of this exhibit. f • • • n Th it r-1 ji r-, I u P Advisory Legal Opinion-Municipal procedure/contract for professional services Page 1 of 3 Florida Attorney General Advisory Legal Opinion I� Number: AGO 93-56 Date: August 23, 1993 Subject: Municipal procedure/contract for professional services I_J c 1 Mr:. Fred S. Disselkoen City Attorney City of Ormond Beach Post Office Box 277 Ormond Beach, Florida 32175-0277 Ljll RE: CONSULTANTS' COMPETITIVE NEGOTIATION ACT-MUNICIPALITIES--CONTINUING CONTRACTS-- municipal procedure for negotiating contract for professional Supp.) services. a. 287.055, F.S. (1992 Su Dear Mr. Disselkoen: You have asked for my opinion on the following question: c'lhen a local government has entered into a number of continuing contracts for professional engineering services in accordance with the Consultants' II Competitive Negotiation Act may the local government seek fee quotations � ' from those firma under contract, in the course of selecting a firm to perform a given project? In sum: fl The, Consultants'Competitive Negotiation Act does not provide criteria for ii negotiating a contract for professional services under a continuing contract and a municipality may develop its own procedures for evaluating r- such a contract. According to your letter, the City of Ormond Beach currently has four r- "continuing contracts, " as defined in s. 287.055(2)-(g) , F.S. (1992 Supp.) , 1 for the provision of professional engineering services. Each contract has - a general fee structure describing the hourly fee per position, but each also provides that given projects will be negotiated and defined in subsequent addenda. [1] The Consultants' Competitive Negotiation Act, s. 287.055, F.S. (1992 II Supp.) , sets forth requirements for the procurement and contracting of L_i' professional architectural, engineering, landscape architectural, or land surveying services [2] by governmental agencies. (3-] The statute also (� provides that " [n]othing in this act shall be construed to prohibit a continuing contract betweena firm and an agency." [4] A "continuing contract is defined in s. 287.055(2) (g) , F.S. (1992 Supp.) , as: " (A] contract for professional services entered into in accordance with httpa/www.myfloridalegal.com/ago.nsf/printview/FD690A778A432CBD8525623F005EF40A 5/7/2010 Advisory Legal Opinion - Municipal procedure/contract for professional services Page 2 of 3 all the procedures of this act between an agency and a firm whereby the firm provides professional services to the agency for projects in which construction costs do not exceed 500, 000, for study activity when the fee for such professional service does not exceed 25, 000, or for work of a specified nature as outlined in the contract required by the agency, with no time limitation except that the contract shall provide a termination clause. " However, nothing in a. 287 . 055, F.S. (1992 Supp. ) , purports to regulate the terms of a continuing contract. Nor does the statute address instances where an agency seeks to impose additional criteria on continuing contractors to insure impartiality when a choice must be made among them. You have specifically directed my attention to subsection (4) of s. 287 .055, F.S. (1992 Supp. ) , which provides that " [t] he agency may request, accept, and consider proposals for the compensation to be paid under the contract only during competitive negotiations . . . . " [5] You question whether this provision would preclude the City of Ormond Beach from considering compensation for projects falling within the scope of its continuing contracts. However, the plain language of the statute indicates that these requirements are to be utilized in the competitive negotiation process. [6] In fact, subsection (4) (d) , states that " (n]othing in this act shall be construed to prohibit a continuing contract between a firm and an agency. " Therefore, if a municipality determines that it is appropriate to develop criteria for determining which firm under continuing contract with the city will be selected to perform a project, it may do so. [7] It may be advisable for the city to adopt an ordinance or develop an administrative rule or procedure to insure that these criteria are applied uniformly to all continuing contracts into which the city enters. Sincerely, Robert A. Butterworth Attorney General RAB/tgk [1] While this office has not been asked to comment on this arrangement I would note that the continuing contract provision of s. 287 .055, F.S. (1992 Supp. ) , 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. Cf. , City of Lynn Haven v. Bay County Council of Registered Architects, Inc. , 528 So.2d 1244, 1246 (1 D.C.A. Fla. , 1988) (in which the court determined that the City' s procedures contravened the legislative intent and undermined the effectiveness of the CCNA. Specifically, the City' s bidding procedure would not effectuate an equitable distribution of contracts among the most qualified firms pursuant to Section 287 .055 (4) , http:itwww.myfloridalegal.com/ago.nsf/printview/FD690A778A432CBD8525623F005EF40A 5/7/2010 Advisory Legal Opinion - Municipal procedure/contract for professional services Page 3 of 3 Florida Statutes. ) [2] See, s. 287 . 055 (2) (a) , P.S. (1992 Supp. ) , defining " [p] rofessional services. " [3] See, s. 287 . 055 (2) (b) , F.S. (1992 Supp. ) , which defines " (algency" as "the state or a state agency, municipality, or political subdivision, or a school district or school board. • [4] Section 287 . 055 (4) (d) , P.S. (1992 Supp. ) . [5] Section 287 . 055 (4) (b) , F.S. (1992 Supp. ) . (6] See, Heading to s. 287 .055 (4) , F.S. (1992 Supp. ) , which indicates that this subsection relates to competitive selection. (7) Cf. , Marriott Corporation v. Metropolitan Dade County, 383 So.2d 662 (3 D.C.A. Fla. , 1980) , which recognizes that even under competitive bidding requirements contracts must be awarded as a function of the reasonable exercise of power by municipal governmental authorities as a matter of public policy and fidelity to the public trust; William A. Berbusse, Jr. , Incorporated v. North Broward Hospital District, 117 So.2d 550 (2 D.C.A. Fla. , 1960) (where statute requires that public body award contracts to low bidder, proper municipal authorities have wide discretion in determination of lowest responsible bidder) . hap://www.myfloridalegal.comiago.nsf/printview/FD690A778A432CBD8525623F005EF40A 5/7/2010 EXHIBIT J r-, AGO 75-131 j ! Note: IA has highlighted areas of this exhibit. '1 ' l i ' r-, r-; Advisory Legal Opinion -Consultants' competitive negotiation act Page 1 of 2 Florida Attorney General Advisory Legal Opinion Number: AGO 75-131 Date: May 5, 1975 Subject: Consultants' competitive negotiation act 075-131 - - May 5, 1975 CONSULTANTS ' COMPETITIVE NEGOTIATION ACT APPLICABILITY TO EMPLOYMENT OF CITY ENGINEER To: Michael Zealy, Lauderdale Lakes City Attorney, Ft. Lauderdale Prepared by: Rebecca Bowles Hawkins, Assistant Attorney General QUESTION: May a city utilize its city engineer, employed under a yearly contract with stated fees for specified services, for all engineering services, including those in excess of $5, 000, without complying with the Consultants ' Competitive Negotiation Act, s . 287 . 055, F. S. ? SUMMARY: A city may employ a city engineer under a yearly contract to provide general advice and assistance without complying with the Consultants ' Competitive Negotiation Act, s . 287 . 055, F. S . However, a particular engineering project must be publicly announced, notices sent to interested engineering firms, and, if the compensation for the engineering services is more than $5, 000, at least three engineering firms must be considered before finally negotiating an engineering contract for the project, as required by the act. The Consultants ' Competitive Negotiation Act (the "CCNA" hereafter) was adopted in 1973 for the purpose of promoting competition among firms supplying professional architectural, engineering, and land surveying services to public agencies. Attorney General Opinion 074-191. Except in an emergency, the agency is required to make a public announcement on "each occasion" when professional services are required to be "purchased" and, in addition, to mail the announcement to each "certified" firm which has requested notification of the need for the services. The announcement must include a general description of the "project" and indicate how interested consultants may apply for consideration. Section 287 . 055 (3) , F. S. If the compensation for the professional services in question will exceed $5, 000, the public agency is required to consider at least three firms in the light of various "factors" listed in the statute "with the object of effecting an equitable distribution of contracts among qualified firms, " s . hap://www.mytloridalegal.com/ago.nsf/printview/483622F309974184852566B70055B 1 DA 5/7/2010 VA\ al Opinion - Consultants' competitive negotiation act Page 2 of 2 287 . 055 (4) , id. ; and, under s . 287 . 055 (5) , the agency is required to "negotiate a contract with the most qualified firm for professional services at compensation which the agency determines is fair, competitive, and reasonable. . . . " I see no reason why a city could not employ a so-called city engineer under a yearly contract for general consultation and advice to supplement the city' s own staff, including attendance at meetings of the city council and other assistance of a general nature. And it seems clear that the requirements of the CCNA would not have to be complied with each time the city called upon the city engineer for general advice or assistance pursuant to the contract of employment. (The contract of employment, itself, would not appear to be a "project" that should be negotiated under the CCNA. ) However, such an employment contract should be limited to general advice and assistance; and an engineering contract for a particular project should be negotiated in compliance with the CCNA requirements by making a public announcement, sending notice to interested certified firms, and, if the compensation will exceed $5, 000, selecting at least three engineering firms for consideration before negotiating an engineering contract with the most qualified firm at a fair, competitive, and reasonable compensation. Any other construction of the statute would be contrary to the purpose and intent of the CCNA to promote competition among engineering firms for the city' s engineering business and effect an "equitable distribution" of engineering contracts among qualified firms. http://www.myfloridalegal.com/ago.nst%printview/483622F309974184852566B70055B 1 DA 5/7/2010 1 I'i EXHIBIT K Attorney General Opinion 2010-20 ADVISORY BULLETIN Florida Association of Court Clerks Com/ ptrollers REF:AGO 2010.20-CCNA,Price and Qualitative Considerations DATE:June 10,2010 NO: 10-038 FILE NO. F02.008.061010.01 TELEPHONE: (850)921-0808 CONTACT: S. Hudson PAGE 1 OF 9 Number: AGO 2010-20 Date: June 7, 2010 Subject: CCNA,price and qualitative considerations The Honorable Dwight E. Brock Collier County Clerk of Courts Post Office Box 413044 Naples, Florida 34101-3044 RE: CLERK OF THE CIRCUIT COURT—CONSULTANTS'COMPETITIVE NEGOTIATION ACT—COUNTIES—QUANTUM MERUIT—validity of county purchasing procedure; CCNA requirements. s. 287.055, Fla. Stat. Dear Mr. Brock: You have asked for my opinion on substantially the following questions: I. Does a procedure for the acquisition of professional services which is based upon an • evaluation of a combination of price and qualitative considerations comply with the provisions of section 287.055, Florida Statutes? 2. Does the concept of quantum meruit authorize the Clerk of the Circuit Court to legally payfor g Y professional services provided under contracts entered into by Collier County which may not conform to the requirements of section 287.055, Florida Statutes? In sum: 1. Section 287.055, Florida Statutes, the "Consultants'Competitive Negotiation Act," describes a process of qualification based selection whereby professional services firms are selected in order of preference based on their ability to perform the required services. Following competitive selection, a contract is negotiated for professional services at a fair, competitive, and reasonable r , price. Nothing in section 287.055, Florida Statutes, authorizes an agency to include compensation rates as a factor in the initial consideration and selection of a firm to provide professional services. (L L , ADVISORY BULLETIN 10.038 PAGE 2 2. The Collier County Commission is authorized to determine the validity of an equitable claim such as quantum meruit and the Clerk of the Circuit Court may pay such claim at the County's direction. As the elected Clerk of the Circuit Court of Collier County, you are charged by the Florida Constitution with acting as the "ex officio clerk of the board of county commissioners,auditor, recorder and custodian of all county funds."[1] Section 129.09, Florida Statutes, also makes the clerk personally liable if he or she pays any claim against the county that is not authorized by law. Thus, as your letter advises,the clerk, by law,possesses certain pre-audit functions and • powers requiring him or her to refuse to make expenditures or authorize disbursements of public funds that he or she believes may be illegal. You have questioned the procedure used by Collier County in several contracts entered into for professional services. This office has no authority to review contracts entered into by the county or to comment on the terms of those contracts. Like the courts,this office must.presume that official actions taken by the county are valid and enforceable until a court of competent jurisdiction determines otherwise.[2] For these reasons, my response to your request for an opinion on Collier County's compliance with the procedures of the Consultant's Competitive Negotiation Act(the CCNA)will be general in nature. Question One The Consultants' Competitive Negotiation Act, section 287.055, Florida Statutes, creates a qualifications based selection process for the procurement of professional architectural,. engineering, landscape architectural, or land surveying services[3] by governmental agencies.[4] Pursuant to the act, an agency, including a county, must competitively select and negotiate with the most qualified firm to provide these professional services for a project.[5] The statute also provides that "[n]othing in this act shall be construed to prohibit a continuing contract between a firm and an agency."[6] Section 287.055(3), Florida Statutes, operates to require a county subject to the CCNA to follow certain procedures for announcing occasions when professional services are required to be purchased and for certifying firms or individuals desiring to provide such services as qualified. The statute directs agencies to adopt administrative procedures for the evaluation of professional services.[7] An agency is required to publicly announce each occasion when professional services are required to be purchased for a project covered by the statute.[8] , Section 287.055(4), Florida Statutes, states that an agency must evaluate firms that offer to provide professional services for a proposed project and select no fewer than three firms that are deemed to be the most highly qualified to perform the required services.[9] The statute provides criteria for evaluating the qualifications of these firms and prohibits the consideration of compensation until after the three most qualified firms are selected: 't. ADVISORY BULLETIN 10.038 PAGE 3 "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; recent, current, and projected workloads of the firms; and the volume of work previously awarded to each firm by the agency,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. The agency may request, accept, and consider proposals for the compensation to be paid under the contract only during competitive negotiations under subsection (5)."[10] (e.s.) Following competitive selection, the act requires that the agency negotiate a contract with the most qualified firm at a compensation level determined to be fair, competitive, and reasonable. To make this determination, "the agency shall conduct a detailed analysis of the cost of the professional services required in addition to considering their scope and complexity."[11] If the agency is unable to negotiate a satisfactory contract with the most qualified firm at a price that the agency determines to be fair, competitive and reasonable, negotiations with that firm are terminated and the agency must undertake negotiations with the second most qualified firm.[12] This procedure is followed until an agreement is reached.[13] Thus, the CCNA is a statutory procurement system that contemplates a four-step process:public announcement of the work,qualifications-based selection of the professional firm, arms-length negotiations with the most qualified firm and, ultimately, execution of a contract.As this office concluded in Attorney General Opinion 88-42, a process that establishes a fee for proposed professional services prior to the initiation of the other steps required by section 287.055, Florida Statutes, would not comply with the requirements of the act, which mandates a project-by- project selection and negotiation process.[14] Collier County's procurement policy for professional services recognizes that "requests exclusively for services defined under VII.B.2 [relating to those services within the scope of the CCNA] will be procured in a manner consistent with Section 287.055, F.S., known as "The Consultant's Competitive Negotiation Act" as required by said statute. Projects may include, but are not strictly limited to one or more of the following: 1. Fixed assignment contracts: A grouping of minor professional service (including construction inspection services)assignments. 2. Fixed term contracts: Countywide agreements for various and miscellaneous minor professional services (including construction inspection services)on an as needed basis. 3. General Professional Services: Includes administration, support and management of engineering, architectural, surveying and planning activities." in ADVISORY BULLETIN 10-038 PAGE 4 �y However, the policy goes on to authorize the county's purchasing director to qualify those requests for-services by soliciting proposals on a "best value" basis involving both qualifications and price. Nothing in section 287.055,Florida Statutes, would authorize a county to adopt a procedure in conflict with the provision of the CCNA mandating a project-by-project selection and negotiation process. In Attorney General Opinion 07-12, this office was asked whether a city project met the requirements of section 287.055, Florida Statutes, the Consultants' Competitive Negotiation Act, when a construction manager at risk or program manager at risk contract was used for the design and construction of a multi-phase project and each phase of the project was separately negotiated for a guaranteed maximum price and completion date. The opinion concluded that "separately negotiating each phase of a multi-phase project that has been awarded to a construction manager at risk or program manager at risk does not comply with the plain language or intent of section 287.055(9)(c), Florida Statutes," and that the procedures of the statute "clearly indicate that compensation will be negotiated prior to the selected firm beginning work under the contract."[15] It appears that Collier County has attempted to adopt a procurement procedure similar to that authorized under section 287.057, Florida Statutes. That statute includes a provision for using a "best value" approach in acquiring certain commodities and services outside the scope of the CCNA.However, nothing in section 287.055, Florida Statutes, would extend the authority to negotiate price as a factor in the competitive selection and negotiation process except by using the project-by-project evaluation process mandated in section 287.055, Florida Statutes. Finally, there is a suggestion in some of the materials forwarded to this office that continuing contracts or fixed term contracts may not be subject to the same project-by-project consideration that the CCNA otherwise requires. On the contrary, "continuing contracts" for theacquisition of professional services including those for a fixed term are specifically made subject to section 287.055,Florida Statutes, and the Legislature has directed that these contracts may only be entered into "in accordance with all the procedures of this act."[16] Thus, an agency is required to comply with the four-step process when entering into continuing or fixed term contracts: public announcement of the work, qualifications-based selection of the professional firm,arms- length negotiations with the most qualified firm and, ultimately, execution of a contract. The Legislature has specifically provided that "[fjirms providing professional services under continuing contracts shall not be required to bid against one another."[17] While this office has concluded that an agency may enter into multiple continuing contracts, compliance with the CCNA is . required in each instance.[18] Thus, section 287055 2 qO(g), Florida Statutes,would control any continuing contracts for professional services into which Collier County may enter and would prohibit the authority from askingfirms providing p g professional services under continuing contracts to bid against one another. 1 � { ADVISORY BULLETIN 10.038 PAGE 5 Question Two You ask whether you are authorized under a claim of quantum meruit to pay contractors who have provided professional services to Collier County pursuant to the policy discussed above. While this office will not comment on contracts into which Collier County has entered, I would note that the general rule is that a contract which is beyond the scope of authority vested by law in the board of county commissioners or which is in violation of law is invalid and unenforceable.[19] Similarly, since county officers can exercise only such powers as are conferred on them expressly or impliedly by constitutional or statutory provision,contracts made — on behalf of the county by officers or agents without lawful authority to do so are likewise invalid.[20] However, you have suggested that the board of county commissioners may be estopped to deny the validity of contracts entered into under the policies of the county when these contracts have been fully executed and professional services have been provided to the county. Under these circumstances,you ask whether you, as clerk of the circuit court, are authorized to make a determination of the validity of any such claim and make payment for professional services rendered thereunder. Thisoffice has previously that theclerk p ous y stated cle k of the circuit court, although a constitutional officer, possesses only such powers as have been expressly or by necessary implication granted by statute.[21] Thus,the clerk's powers, like those of other constitutional county officers, are limited to those powers which have been expressly granted or are clearly necessary to give meaning and effect to those powers which have been expressly granted.[22] In the case of Alachua County V. Powers,[23] the Clerk of the Circuit Court of Alachua County sought a declaratory judgment to clarify his fiscal duties as clerk of the county commission in four capacities: as auditor, accountant, custodian, and investor of county funds. The Florida Supreme Court stated that the trial court had correctly determined that"the Clerk was to act as county auditor in all auditing functions except when the board employs an independent auditing firm pursuant to Section 125.01(1)(x), Florida Statutes (1975)." As the Court in Alachua County v. Powers, stated: "The clerk has the authority and responsibility to perform the auditing functions both as an arm of the board in auditing the records of constitutional officers and as a watchdog of the board in the case of pre-auditing accounts of the board in determining legality of expenditure. The phrase "legality of expenditure" includes that the funds are spent for a public purpose,that the funds are spent in conformity with county purchasing procedures or statutory bidding procedures,that the expenditure does not overspend any account or fund of the budget as finally adopted and recorded in the office of the clerk. [f the board becomes concerned, it has the authority to require a performance audit or post-audit by an independent accounting firm."[24] No statutory or constitutional authority would authorize the clerk of court to make a determination of the validity of equitable claims made under contracts entered into by Collier County. Section 1(e), Article VIII of the Florida Constitution states that, unless otherwise provided by county charter,the governing body of each county shall be a board of county commissioners. ADVISORY BULLETIN 10-038 PAGE 6 Section 125.01(1), Florida Statutes,provides, in pertinent part, that "[t]he legislative and governing body of a county shall have the power to carry on county government. . . ." Pursuant to section 125.01(3)(a), Florida Statutes,the county commission is empowered to enter into contractual obligations to carry out any of its enumerated or implied powers. Finally, under section 125.15, Florida Statutes, the county commissioners must sue and be sued in the name of the county of which they are commissioners. Thus, it is clear that, under state law,the board of county commissioners is the agency which is authorized to act for or on behalf of the county.[25] j As a number of Florida Attorney General Opinions and Florida Supreme Court Opinions have noted: "Florida has, for many years,recognized the liability of a County on quantum meruit for the value of work done and materials furnished to a County which receives benefit therefrom[.]"[26] Thus,while this office is not a fact-finding agency and is without authority to determine whether or not a negotiated settlement represents the fair and reasonable value of the professional services provided to Collier County, it would appear that the county commission would be authorized to make such a determination and order payment p of the claim.[27] I am, therefore, of the opinion that the clerk of the circuit court does not have the authority to determine the validity of an equitable claim such as quantum meruil and to make payment of such a claim unless directed to do so by the board of county commissioners. Finally, the materials you have submitted cite several cases which hold that a contract entered into in violation of statutes and rules requiring competitive bids "is absolutely void, and . . . no rights can be acquired thereunder by the contracting party."[28] In these cases, a local governmental entity contracted for goods, but did not comply with competitive bidding requirements and Florida courts refused to employ equitable remedies to compensate the contracting party. Under this analysis, a contractor may not recover even on a quantum meruil basis if the contract was let without compliance with mandatory competitive bidding requirements. While expressing no comment on how a court might view the contracts entered into by Collier County under its "procurement of professional services"procedures, I would note that the county's procedure does not completely disregard or abandon the CCNA and competitive negotiation. Rather, the county appears to have utilized additional factors in its competitive selection process that are not currently contemplated by the CCNA. Sincerely, Bill McCollum Attorney General BM/tgh ADVISORY BULLETIN 10.038 PAGE 7 [1] Article VIII,'s. 1(d), Fla. Const. [2] Cf Evans v. Hillsborough County, 186 So. 193, 196 (Fla. 1938); White v. Crandon, 156 So. 303,305 (Fla. 1934);State ex rel. Gillespie v. Thursby, 139 So. 372, 375 (Fla. 1932); Belk- ;, James, Inc., v. Nuzum, 358 So. 2d 174, 177 (Fla. 1978), for the proposition that a statute is presumptively valid and must be obeyed and given effect unless and until it is judicially • determined invalid. [3]See s. 287.055 2 a Fla. Stat., defining "[p]rofessional( )( )� services." A review of the "Procurement of Professional Services" section of the Purchasing Policy of Collier County indicates that "a professional service" for purposes of the county policy may also include such services as medical services and legal services. These services are obviously outside the scope of section 287.055, Florida Statutes. [4]See s.287.055(2)(b),Fla. Stat., which defines "[a]gency" as "the state, a state agency, a municipality, a political subdivision,a school district or a school board[;]" and s. 1.01(8), Fla. Stat.,defining the term "political subdivision'to include counties. [5] Section 287.055(4)and (5),Fla. Stat. [6] Section 287.055(4)(d),Fla. Stat. [7]See s. 287.055(2)(a)and (b),.Fla. Stat., respectively defining "[p]rofessional services" and "[a]gency." • [8] Section 287.055(3), Fla. Stat. [9] See s. 287.055(4)(c), Fla. Stat., setting forth exceptions to the application of the statute. [10] Section 287.055(4)(b), Fla. Stat. [11] Section 287.055(5)(a), Fla. Stat. [12] Section 287.055(5)(b), Fla. Stat. 7 [13] Section 287.055(5)(c),Fla. Stat. [14] See Alsop v. Pierce, 19 So. 2d 799, 805 (Fla. 1944) ("When the Legislature has prescribed the mode, that mode must be observed."). Cf. City of Jacksonville v. Reynolds, Smith & Hills, Architects, Engineers &Planners, Inc., 424 So. 2d 63 (Fla. 1st DCA 1982), in which the court recognizes that budget considerations may be a factor in selecting the covered professional services. rr ADVISORY BULLETIN 10-038 PAGE 8 � [15] Subsequent to issuance of this opinion, Ch. 2007-159, Laws of Fla.,was enacted to define the manner in which local governments can utilize the services of construction management or program management entities. [16] Section 287.055(2)(g), Fla. Stat. [17] Id. [18] See Op. Att'y Gen. Fla. 07-49 (2007). [19] 20 C.J.S. Counties s. 193;Jones v. Pinellas County, 88 So. 389, 390 (Fla. 1921); National Bank ofJacksonville v. Duval County,34 So. 894, 895 (Fla. 1903); accord: Robert G. Lassiter & Co. v. Taylor, I28 So. 14(Fla. 1930) (applying rule with respect to contracts made by municipal corporations). [20] 20 C.J.S. Counties s. 193; Ramsey v. City of Kissimmee, 149 So. 553, 554 (Fla. 1933) (in the absence of ratification by the city council, a contract will not be enforced where the mayor rather than the city council signed the contract, and where the city charter did not authorize the mayor to contract on behalf of the city); Fruchtl v. Foley, 84 So. 2d 906, 908 (Fla. 1956) (where charter required the city attorney to perform such duties 'as may be required of him by ordinance or resolution of the City Board of Managers'the city attorney who received only oral instructions to represent city in land transaction did not have the power to bind the city to the resulting conveyances; hence, such conveyances were void). School Board of Leon County v. Goodson, 335 So. 2d 308, 310 (Fla. 1st DCA 1976) (school board has exclusive authority to form contracts with instructional personnel of school system; hence, agreement between principal and teacher in regard to teacher's employment was not binding on county school board, absent any indication board approved agreement). [21] See, e.g., O . Att'yGen. Fla. -� p 78 95 concluding (1978), b that,in the absence of any authorizing statute,the clerk of the circuit court was not authorized to enter into a contract for insurance as specified therein, and Ops. Att'y Gen. Fla. 77-76 (1977)and 79-70 (1979); cf Op. Att'y Gen. Fla. 80-59 (1980).And see Security Finance Co. v. Gentry, 109 So. 220, 222 (Fla. 1926), in which the Florida Supreme Court stated that "[t]he clerk's authority is entirely statutory, and his official action, to be binding upon others, must be in conformity with the statutes." Cf. Pan American World Airways v. Gregory, 96 So. 2d 669, 671 (Fla. 3d DCA 1957), stating that "[t]he clerk is an officer of the court whose duties are ministerial and as such he does not exercise any discretion." [22] See Overholser v. Overstreet, 383 So. 2d 953 (Fla. 3d DCA 1980) (clerk's authority is entirely statutory, and his official action to be binding upon others,must be in conformity with such statutes); Ferlita v. State,380 So. 2d 1118 (Fla. 2d DCA 1980) (clerk of court's power to act must clearly appear from particular statute). Gessner v. Del Air Corporation, 17 So. 2d 522 (F1a.1944); and 67 C.J.S. Officers s. 190(a).See also Ops. Att'y Gen. Fla. 86-94 (1986), 78-95 (1978) and 75-161 (1975). [23]Alachua County v. Powers, 351 So. 2d 32(Fla. 1977). [24] Supra at 37. ADVISORY BULLETIN 10-038 PAGE 9 [25] See Kirkland v. State,97 So. 502 (Fla. 1923). [26] Pinellas County v. Guarantee Abstract & Title Co., 184 So. 2d 670 (Fla. 2d DCA 1966), citing Harwell v. Hillsborough County, 149 So. 547 (Fla. 1935); Moore v: Spanish River Land Co., 159 So. 673 (Fla. 1935); and Webb v_ Hillsborough County, 175 So. 874 (Fla. 1937). [27] See s. 125.01(1)(b), Fla. Stat.,providing that the board of county commissioners is empowered to "[p]rovide for the prosecution and defense of legal causes in behalf of the county . .;" White v. Crandon, 156 So. 303, 305 (Fla. 1934), in which the Supreme Court held that a bona fide dispute between the county commissioners and another county officer regarding the disbursement of county revenues pursuant to acts of the county officer,whose authority to act for and bind the county as purchasing agent is reasonabI questionable bythe coun Y tY commissioners, constituted a "legal cause" which the county commissioners were entitled to prosecute or defend under statutory authority conferred upon them to represent the county in the prosecution and defense of"all legal causes"; and Op. Att'y Gen. Fla. 60-90 (1960), in which this office concluded that "[a]s the financial agent of the county having general control over its property and the management of its business,the board of county commissioners has the power to compromise and settle claims in favor of the countyagainst and claims against the county." [28] Harris v. School Board of Duval County,921 So. 2d 725 (Fla. 1st DCA 2006);Armco Drainage &Metal Products, Inc. v. County of Pinellas, 137 So. 2d 234 (Fla. 2d DCA 1962). { • VII. AUDITEE RESPONSES - F.KAA f jl ail r-, II I n I ' David C. Ritz B y Chairman 4'\ Key Largo '� I Florida Keys Rose M.Dell A' Vice-Chairman W� -1- Aqueduct Authority Big Pine Key Antoinette M.Appel' ,.H,..77.5.10, Post Office Box 1239 Secretary/Treasurer 1100 Kennedy Drive d/ Marathon Key West,Florida 33041-1239 J.Robert Dean Telephone(305)296-2454 Key West f www.fkaa.com 0 N o 4 k U '' . £0 Elena Z. Herrera Rockland Key 1ri C CP James C.ve Reynoolds Ex1 — Danny L. Kolhage I Clerk of the Circuit Court 500 Whitehead Street, Suite 101 Key West, FL 33040 Dear Mr. Kolhage, . i Below are the Florida Keys Aqueduct Authorities responses to the audit report of Monroe County's interlocal agreement with the Florida Keys Aqueduct Authority for the Big Coppitt wastewater project. V. Audit Findings 1. FKAA is combining wastewater and water on the same contracts, change orders and schedule of values. Finding: FKAA is combining wastewater construction and water construction on the same contract for various reasons. One reason is that as the pipes are being installed for wastewater certain economies of scale can be achieved by installing reclaimed water or water lines. The schedule of values for both water and wastewater are also combined. The amounts for water are not always identified separately on the schedule of values submitted to Monroe County Wastewater I�I Department Resources (County Wastewater) for review and payment. In one case a change -- order for $1.6 million for Duck Key reclaimed water was added to the contract for Big Coppitt. All five of the construction contracts have at least two water change orders. See Exhibit A- n' Change Order Overview. This requires a County engineer to review and correct the schedule of -- values rather than the contract specialist and thus it becomes a very labor intensive task. Water and reclaimed water amounts are the responsibility of FKAA and are not subject to the Interlocal agreements. During the audit, FKAA management agreed to separately contract and require contractors to bill separately for wastewater. Recommendation(s): 1. FKAA should contract separately and require contractors to bill separately for water and wastewater. 1 I FKAA Response(s): • 1. Management will require contractors to bill separately for water and wastewater. i1 2. FKAA's Finance Department billed $494,439.30 to the County " Wastewater 1 Department in error. Q Finding: h FKAA's Finance Department billed Monroe County for ineligible work. In one instance, the invoices from FKAA to Monroe County for reimbursement for Big Coppitt, dated August 26, 2007 and September 9, 2007 included Duck Key reclaimed water work of$552,981 minus ten percent (10%) retainage. This amount was listed on D.N. Higgins pay application 6 and 7. The amount billed minus retainage was approved for payment by the County Wastewater Department. See Exhibit D-FKAA Invoiced, 2nd page. The County Wastewater Department identified the ineligible costs and deducted them on the invoice for reimbursement dated March -- 25, 2008. FKAA's Engineering Department approves the payment request from the contractor but does not approve the invoice for reimbursement prepared by FKAA's Finance Department that is sent to the County. FKAA's Finance Department compiles the invoices but are not aware of the details of the project and only completes a review to ensure it is mathematically correct. During the audit, FKAA's Engineering Department has agreed to review the invoice reimbursement package before it is sent to the County Wastewater Department. Recommendation(s): 1. FKAA Management should contract separately and require contractors to bill separately for water and wastewater. 2. We recommend that FKAA Management develop procedures to ensure that the FKAA Project Manager reviews reimbursement invoices before transmittal to the County Wastewater Department. f FKAA Response(s): 1. Management will require contractors to bill separately for water and wastewater. 2. Management has developed procedures that will ensure the FKAA Project Manager reviews reimbursement invoices before submittal. 3. FKAA's Finance Department applies County reimbursements to the oldest invoices outstanding rather than balance each individual invoice. Finding: Internal Audit requested an accounting of funds from FKAA's Finance Department for amounts that the County owed to FKAA for each wastewater project. The County Wastewater Department and the Clerk's Finance Department frequently make deductions from FKAA i 2 1 i Ii invoices as submitted. The Clerk's Finance Department did not always include documentation • which explained the deductions to FKAA's Finance Department and the County Wastewater Department. The amounts deducted also affects the retainage amount held. According to the FKAA accounting reconciliation, the balance owed by the County for the Big Coppitt project �.I April 19, 2010 was $2,738,086.58 See Exhibit E-FKAA Reconciliation. However, this amount included ineligible items. The amount requested by FKAA's Finance Department and the amount paid were not the same. With the advance of five million outstanding, FKAA's Finance Department applied County y . reimbursements to the oldest invoices rather than balance each individual payment. During the audit the County Wastewater Department and FKAA's Finance Department were working on the reconciliation of amounts due. Project reconciliations completed on a timely basis would have alerted management that there was a problem with the reimbursement process. During the audit, the Clerk's Finance Department has agreed to include documentation with the reimbursement check that explains any discrepancies or deductions to FKAA's Finance Department. A copy of this information will be forwarded to the County Wastewater Department. Recommendation(s): 1. The FKAA Finance and County Wastewater project reconciliations should be completed on a more timely basis. ' 2. The Clerk's Finance Department should include documentation which explains the amounts deducted with the reimbursement check. A copy of this documentation should be transmitted to the County Wastewater Department. FKAA Response(s): 1. The FKAA Finance and Clerk's Finance Department will reconcile projects on a monthly basis. 2. he Clerk's Finance Department will send FKAA a schedule of amounts deducted with each payment to ensure that all payments are applied correctly to each request. County Administrator Response(s): The Clerk's Finance Department(s): • 4. Submission of incomplete invoices by the FKAA causes delays in processing. Finding: The County Wastewater Department receives the invoice for reimbursement from FKAA's Finance Department. Some invoices do not include all supporting documentation necessary to 3 r-, r'1 • process reimbursements. In an attempt to expedite the payment, after reviewing the invoices the County Wastewater calls or e-mails information requests to FKAA' Finance Department. FKAA's Finance Department then requests documentation from FKAA's Engineering Department. Examples of missing information could be contracts, change orders, pay application sequencing issues, task orders, releases of liens, and boarding passes. See Exhibit F- Incomplete Invoice. If FKAA's Engineering Department does not have the required documentation it must be requested from the contractor. The requests for documentation are often not answered in a timely manner causing the invoice to remain in the County Wastewater Department. During the audit, to facilitate the reimbursement process, FKAA stated that they would send the County Wastewater Department an executed copy of all wastewater information submitted and approved by the FKAA Board of Directors. According to the Interlocal Agreement if the County Senior Administrator for Sewer Projects or the Clerk determines that the submission is unacceptable, either of them shall return it to the FKAA in writing with a written description of the deficiency. During the audit, both FKAA's Finance Department and the County Wastewater Department agreed it would be beneficial if the County Wastewater Department sent the original invoice back to the FKAA's Finance Department with a list of the required items. This will eliminate the confusion of receiving the documentation in a disjointed fashion. Also, FKAA will know what is required for reimbursement documentation. Recommendation(s): 1. We recommend that FKAA Management develop procedures to ensure that the FKAA Engineering Project Manager reviews reimbursement invoices for completeness before transmittal to County Wastewater. 2. FKAA should send County Wastewater all executed copies of contracts, change orders and miscellaneous wastewater items submitted and approved by the FKAA Board of Directors. FKAA Response(s): 1. Management has developed procedures that will ensure the FKAA Project Manager reviews reimbursement invoices before submittal. 2. FKAA will forward to County Wastewater copies of all wastewater items including items submitted to the FKAA Board of Directors or authorized by FKAA's Executive Director. County Administrator Response(s): 5. The County Wastewater Department and the Clerk's Finance Department are not always able to process FKAA invoices in a timely manner. FKAA Response(s): 4 1 ' , FKAA response not applicable. 6. FKAA used continuing contracts with engineering firms for projects costing over S1 jmillion, contrary to Section 287.055 (2)(g), Florida Statutes, which requires a competitive - selection process. Finding: ---' The Consultants' Competitive Negotiations Act (CCNA) Section 287.055, Florida Statutes —, provides that professional services, including architectural, professional engineering, landscape architecture, and registered surveying services, be acquired pursuant to a formal competitive selection and negotiation process. The Act generally requires that the District publicly announce, in a uniform and consistent manner, each occasion when professional services must be purchased for a project with a basic construction cost that is estimated by the agency to exceed $250,000, or when a planning or study activity fees is estimated to exceed $25,000. , Additionally, the Act provides that a continuing contract for professional services may be entered into for construction projects when the construction costs do not exceed $I million, for a study activity when the fee for such professional services does not exceed $50,000, or for work of a, specified nature as outlined in the contract. These parameters were increased to $2 million, $200,000, respectively in 2009. The construction project as a whole is over the state threshold amount. In March 2006, the FKAA issued a Request for Qualifications (RFQ) for Professional Engineering Consulting firms to enter into a Continuing Contract for Capital Improvement. Project Engineering Services for the planning, design, permitting, bid phase, and construction and certification phase services for system improvements of the FKAA's utility system and - facilities. Review, evaluation and ranking of the Letter of Interest were performedby selection committee. All of the projected capital projects are listed on the RFQ. The Capital Improvement Projects (CIP) are advertised in conjunction with the RFQ for professional engineering services - as notification to both the public and to alert engineering firms as to required expertise given the nature of the projects comprising the CIP. Additionally, the CIP is advertised and approved as part of the budget process by the Board of Directors. According to the FKAA Competitive Selection Policy and Procedures, in determining whether a firm is the most highly qualified for a particular project, the Authority considers whether a firm - is a certified minority business enterprise, past performance, willingness to meet time and budget requirements, location, recent, current, and projected workloads of the firms, and the volume,of work previously awarded to each firm by FKAA, with the object of an equitable distribution of contracts among qualified firms. The Auditor General's Report No. 2007-012 titled Florida Keys Aqueduct Authority Operational ' Audit included finding number fourteen (Competitive Selection of Engineers) which stated that the Authority was not in full compliance the 2878.055(3) (A) because the engineers were selected from a pre-approved pool, instead of the Authority publicly announcing each occasion when the engineering services were to be purchased for a project. The public announcement was 5 __ only made when the Board established the pool of pre-approved engineering firms through its Request for Qualifications process. See Exhibit G—Auditor General Finding #14 In the finding the Auditor General states "The Legislature has recognized in Section 287.001, Florida Statutes, that fair and open competition is a basic tenant of public procurement, and that such competition reduces the appearance and opportunity for favoritism and inspires public confidence that • contracts are awarded equitably and economically. Absent utilization of the required competitive selection process, the Authority's ability to demonstrate the fair, equitable, and economical procurement of professional service is limited." In the Authority's response they stated that they were in compliance with 287.055. In the Auditor General Report 2009-012 Follow-Up on Operational Audit Report No. 2007-012 the auditor stated "Although the Executive Director stated that the Board of Directors has adopted policies and procedures to insure compliance with applicable Florida Statutes, the point of our finding is that such policies and procedures provide for the Board of Directors to select a Board • pre-approved engineering firm from a pool when construction projects are scheduled to begin, rather than follow Section287.055 (3)(a), Florida Statutes, which requires the Authority to publicly announce each occasion when professional services must be purchased for a project." See Exhibit H—Auditor General Follow-Up Finding#14. The CCNA definitions and applicable sections are as follows: (f) "Project" means that fixed capital outlay study or planning activity described in the public notice of the state or a state agency under paragraph(3)(a). A project may include: 1. A grouping of minor construction, rehabilitation,or renovation activities. 2. A grouping of substantially similar construction, rehabilitation, or renovation activities. (g) A "continuing contract" is a contract for professional services entered into in accordance with all the procedures of this act 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 individual project under the contract does not exceed $2 million, for study activity if the fee for professional services for each individual study under the contract does not exceed $200,000, or for work of a specified nature as outlined in the contract required by the agency, with the contract being for a fixed term or with no time limitation except that the contract must provide a termination clause. Firms providing professional services under continuing contracts shall not be required to bid against one another. (3) PUBLIC ANNOUNCEMENT AND QUALIFICATION PROCEDURES.— (a)(1). Each agency shall publicly announce, in a uniform and consistent manner, each occasion when professional services must be purchased for a project the basic construction cost of which is estimated by the agency to exceed the threshold amount provided in s. 287.017 for CATEGORY FIVE or for a planning or study activity when the fee for professional services exceeds the threshold amount provided in s. 287.017 for CATEGORY TWO, except in cases of valid public emergencies certified by the agency head. The public notice must include a general --i 6 ' description of the project and must indicate how interested consultants may apply for consideration. 2. Each agency shall provide a good faith estimate in determining whether the proposed activity meets the threshold amounts referred to in this paragraph. (b) Each agency shall encourage firms engaged in the lawful practice of their professions that desire to provide professional services to the agency to submit annually statements of qualifications and performance data. See Exhibit B—Florida Statute 287.055. We also reviewed Attorney General Opinions on the subject. Advisory Legal Opinion — AGO 93-56-Footnote 1 states: [1] While this office has not been asked to comment on this arrangement, I would note that the continuing contract provision of s. 287.055, F.S. (1992 Stipp.), 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. Cf., } City of Lynn Haven V. Bay County Council of Registered Architects. Inc., 528 So.2d 1244, 1246 (.1 D.C.A. Fla, 1988) (in which the court determined that the City's procedures contravened the legislative intent and undermined the effectiveness of the CCNA. Specifically, the City's • bidding procedure would not effectuate an equitable distribution of contracts among the most qualified firms pursuant to Section 287.055, Florida Statutes. See Exhibit I—AGO 93-56. Advisory Legal Opinion—AGO 75-131 SUMMARY: A city may employ a city engineer under a yearly contract to provide general advice- and assistance without complying with the Consultants' Competitive Negotiation Ace, s. 287.055, F.S. However, a particular engineering project must be publicly announced, notices sent to interested engineering firms, and, if the compensation for the engineering services is more than $5,000, at least three engineering firms must be considered before finally negotiating an engineering contract for the project, as required by the act. The Consultants' Competitive Negotiation Act (the "CCNA" hereafter) was adopted in 1973 for the purpose of promoting competition among fires supplying professional architectural, engineering, and land surveying services to public agencies. Attorney General Opinion 074-191. Except in an emergency, the agency is required to be "purchased" and, in addition, to mail the announcement to each "certified" firm which has requested notification of the need for the services. The announcement must include a general description of the "project" and indicate how interested consultants may apply for consideration. Section 287.055(3), F.S. If the compensation for the professional services in question will exceed $5,000, the public agency is required to consider at least three firms in the light of various "factors" listed in the statute "with the object of effecting an equitable distribution of contracts among qualified firms," s. 287.055(4), id.; and, under s. 287.055(5), the agency is required to "negotiate a contract with the most qualified firm for professional services at compensation which the agency determines is fair, competitive, and reasonable. . . ." See Exhibit J—AGO 75-131. 7 j In the project definition it includes the public notice requirements of(3) (A) above. In FKAA's policy and procedures, it states "The Authority may publicly announce multiple projects in one • announcement." Absent utilization of the required competitive selection process, the District's ability to demonstrate the fair, equitable, and economic procurement of professional services is limited. In summary, the FKAA needs to publicly announce each occasion when professional services must be purchased for a project subject to the threshold amounts. I ! Recommendation(s): 1. FKAA Management should consider obtaining an official Attorney General Opinion on the public announcement issue. FKAA Response(s): 1. Section 287.055 of the Florida Statutes provides for the acquisition of professional architectural, engineering, landscape architectural or surveying and mapping services. It establishes a competitive selection process based on qualifications, rather than • compensation. The Authority publicly advertises all projects identified in its Capital Improvement Plan when soliciting engineers pursuant to the provisions of this statute and if a project is not identified in the Capital Improvement Plan it is advertised in a separate public announcement. On June 26, 2008 the Board adopted a competitive selection policy and procedures for the acquisition of these professional services. The policy follows Florida Statutes and provided for contract negotiation with the most qualified firm based on current statements of qualifications, capabilities, adequacy of personnel, past record, experience, whether the firm is a certified minority business enterprise, and such other factors determined by the Authority to be essential. FLORIDA KEYS AQUEDUCT • ORITY Kerry G. Shelby, De s uty Executive Director Date 8 VIII. AUDITEE RESPONSES - County Administrator • • II rw- ,i1, BOARD OF COUNTY COMMISSIONERS —1 1,. IF, - Mayor George Neugent, District 2 4 Mayor Pro Tem Sylvia 3.Murphy,District 5 _� Kim Wigington,District 1 OUNTY oMON ROE `' � ,', Heather Carruthers,District 3 �I KEY WEST FLORIDA 33040 Mario Di Gennaro,District 4 Ittl (3D5)294-4641 � r Monroe County e 0. 0,,,,v,. Board of County Commissioners _ . Office of the County Administrator The Historic Gato Cigar Factory' 1 100 Simonton Street,Suite 205 Key West, FL 33040 ) (305)2924441 —Phone (305)292-4544-Fax July 15, 2010 Danny Kolhage Clerk of the Circuit Court 500 Whitehead St. Key West, Fl. 33040 RE: Draft Preliminary Audit Report—ILA with Florida Keys Aqueduct Authority for the Big Coppitt Wastewater Project Dear Mr. Kolhage: I have reviewed the audit report and worked with staff to provide a response to the recently completed draft audit report and the findings that concern the County that were prepared by the Internal Audit Department of the Clerk of the Circuit Court. 3. FKAA's Finance Department applies County reimbursements to the oldest invoices outstanding rather than balance each individual invoice. Response: Copying the Wastewater Department on deductions made by the Clerk's Finance Dept, will improve the County's ability to reimburse FKAA for all work performed through re-submittal of invoices with required documentation. 4. Submission of incomplete invoices by the FKAA causes delays in processing. Response: Receipt by the Wastewater Department of Contract Documents upon approval by FKAA Board of Directors and execution by parties will be beneficial in ensuring that reimbursement requests can be efficiently reviewed and approved for payment. In some cases, final payments were made by FKAA before final Change Orders were executed. FKAA is discouraged from approving invoices unless required contract documents are in place and from approving invoices in a manner inconsistent with contract documents. 5. The County Wastewater Department and the Clerk's Finance Department are not always able to process FKAA invoices in a timely manner. Response: Reviewing invoices within one week of receipt and transmitting to the Clerk's Finance Department within two weeks unless major items are missing will improve the reimbursement process. Returning reimbursement requests for insufficient documentation or out of contract approval may initially delay processing; however, this approach will quickly resolve the paperwork issues. I look forward to reading your final report and will take up the issues with staff at that time. Accordingly. please copy Judy Clark on the final report, so that she can work with staff to take corrective actions. Sincerely, Roman Gastesi County Administrator Cc: Judy Clark ir- IX. AUDITEE RESPONSES — Clerk's Finance Office c0�ury0 _ if 41. j 9OE COUMP/.is � I CLERK OF THE CIRCUIT COURT MONROE COUNTY BRANCH OFFICE BRANCH OFFICE MARATHON SUB COURTHOUSE MONROE COUNTY COURTHOUSEPLANTATION KEY 3117•OVERSEAS HIGHWAY 500 WHITEHEAD STREET,SUITE 101 GOVERNMENTH CENTER MARATHON,FLORIDA 33050 . AT O OVERSEASFLORIDAHIGHWAY I � TEL.(305)289-6027 KEY WEST,FLORIDA 33040 PLANTATION KEY,FLO 33070 FAX(305)289-1745 TEL.(305)292-3550 TEI..(305)852-7145 FAX(305)295-3663 FAX(305)852-7146 Sandy Mathena Internal Audit Clerk of the Circuit Court Dear Ms. Mathena, 'Below are the comments of the Clerk's Finance Department to the two findings contained in the audit report for the FKAA Big Coppitt Wastewater Project which relate to our department. • Finding 3 The Clerk's Finance Department has begun preparing a report detailing the amounts paid and deductions taken • against FKAA payment requests. The report detailing the line-by-line deductions will be placed in the envelope containing the payment to FKAA. In addition,a copy of this report will be forwarded to the County Wastewater Department to allow them to maintain up-to-date and accurate records. Finding 5 The Clerk's Finance Department has received large packets of FKAA invoices from the County Engineering Department covering many months to multiple years,with some invoices being in excess of five years old. The large volume of invoices received at one time makes it difficult to process the pay request within our two week goal. With the implementation of the recommendations contained throughout this Audit report,we do not anticipate these processing backups will occur in the future. The Clerk's Finance Department will review packets soon after receipt for completeness and ensure timely processing. Please call if you have any questions. • Sincerely, • Kevin Madok Assistant Finance Director . . L