OPINION NO. 07-02
STATE ETHICS COMMISSION
The Administrator of the State Highway Administration ("SHA") has requested an advisory opinion pursuant to Maryland Public Ethics Law, §15-501(b)(ii), and State Government Article, Title 15 (Supp. 2006), Annotated Code of Maryland, to allow the Deputy Director/Design Manager ("Deputy Director") of the Office of the Intercounty Connector ("OICC") to participate in matters involving Intercounty Connector ("ICC") design-build contracts, procurement reviews and design reviews in which a consulting company (hereinafter "Subcontractor") that employs the Deputy Director's brother may be a subcontractor on an ICC proposal team. Based on the facts and specific circumstances presented, we advise, subject to the guidelines set forth in this opinion, that an exception to the prohibition on participation may be granted to the Deputy Director with respect to matters involving the Subcontractor.
State Highway Administration
The SHA is a modal administration in the Maryland Department of Transportation. SHA is responsible for construction of the ICC. The ICC is one of the largest public projects undertaken by the State of Maryland and will link existing and proposed developmental areas between the I-270 and I-95/US 1 corridors within central and eastern Montgomery County and northwestern Prince George's County. In addition to constructing new highways to increase mobility and alleviate traffic congestion in this area, the ICC project also involves restoring natural, human and cultural environments from past developmental impacts in the project areas. 1
The ICC project has been divided into five separate contracts (Contracts AE). Contract A, connecting I-270/I-370 to MD 97 has been awarded and Contract C is in the early stages of the procurement process. According to SHA and OICC officials, the Deputy Director has not been involved in the review of qualifications or design-build team proposals for Contracts A and C. Contracts B, D and E will follow Contract C in the ICC project. SHA uses a competitive sealed proposal process to obtain the most qualified design-build team at the most cost effective price. This includes a two-step process. First, a Request for Qualification ("RFQ") is used to identify a list of qualified teams. Following the identification of qualified teams, a Request for Proposals (RFP) is submitted by the qualified teams and is evaluated on the basis of technical information and proposed price.
The Deputy Director has been employed with SHA for thirty years and was recently promoted to his current position. His State duties include participating as a member of several independent evaluation teams that review specific portions of each of the design-build teams' RFQ and RFP proposals. Each independent evaluation team provides analysis and recommendations to the ICC Evaluation Committee, which includes representatives of SHA, the Maryland Transportation Authority ("MdTA") and the Federal Highway Administration ("FHWA"). The ICC Evaluation Committee reviews each team's evaluations of the technical and price proposals and makes a collective recommendation to the Procurement Officer. The Procurement Officer, subsequent to his review, makes a recommendation to the ICC Selection Committee, comprised of representatives of SHA, MdTA and FHWA. The Deputy Director is not part of the ICC Selection Committee. The ICC Selection Committee makes the final decision regarding the selection of the successful design-build team for each contract. Only the Procurement Officer may contact the design-build teams during the procurement process.
The Deputy Director is also responsible for reviewing potential Alternative Technical Concepts ("ATC") to determine various elements of technical compliance. This information is provided to the ICC Review Committee for its review and approval or disapproval. The Deputy Director does not serve as a member of the ICC Review Committee, which makes the final determination on the approval of any proposed ATC.
After an ICC Contract is awarded, the Deputy Director's duties include reviewing plan submittals, design and construction issues. In the event that a proposal involves a major change in the scope of the project or cost, the ICC Project Director and the SHA Administrator will make the final decision.
The Deputy Director does not have duties related to the payment of invoices submitted by the successful design-build team. In the event that direct contact between the OICC and the Subcontractor is necessary, another SHA employee will complete these duties and report directly to the ICC Project Director. The Deputy Director will not have any involvement in any direct contact matter.
The Deputy Director has a qualifying relative 2 who is employed as a computer-aided design and drafting ("CADD") technician for the Subcontractor. The Deputy Director's qualifying relative is not a principal in or part of any management team for the Subcontractor. The Deputy Director and his qualifying relative do not hold any joint investments, properties, debts or loans. The Deputy Director has disclosed his qualifying relative's employment with the Subcontractor on his annual financial disclosure statements filed with the Commission. 3
The Subcontractor is a third tier consultant on Contract A and a similar level subcontractor on a team that may propose a design-build for Contract C of the ICC. At our hearing, SHA and OICC officials indicated that they anticipate that the Subcontractor may be a second or third tier subcontractor on a team proposing a design-build for the remaining ICC Project contracts. However, due to the scope involved in the remaining ICC Contracts and the size of the Subcontractor's firm, SHA and OICC officials do not expect the Subcontractor to ever be a prime contractor on any of the remaining contracts.
The Maryland Public Ethics Law §15-501(a), and State Government Article, Title 15 (Supp. 2006),Annotated Code of Maryland., provides at that a State official or employee may not participate in a matter if a party to that matter is a business entity that employs the official or employee's spouse, parent, child, brother or sister. However, Section 15-501(b) of the law allows the Commission to grant exceptions to the non-participation restriction by opinion, which we have done on five prior occasions. 4 In the past advice matters, we have considered whether the overall circumstances were sufficiently remote to grant an exception. 5
In Opinion No. 05-01, we considered granting an exemption to a State employee who had two qualifying relatives employed by entities that did business with his governmental unit. In granting the exception the Commission discussed the general purposes of the Ethics Law. The Opinion read in part:
. . . The Public Ethics Law counsels State employees and officials to avoid conflicts of interest and even the appearance of conflict. The Legislature, in establishing the requirements of §15-501, defined situations or circumstances where it believed that participation in a State matter by an official or employee created a conflict of interest or the appearance of conflict. Obviously non-participation is a key ethics tool to avoid the appearance of conflict or possible impropriety. The Legislature also recognized that there could be some circumstances where an exception from the non-participation provision could be allowed by us based on our specific review of the circumstances. The law instructs us to do so by advisory opinion and we have looked at the remoteness of the relationships and whether it is sufficient to grant an exception . . . .
After a full review of the facts, we conclude that the present situation is sufficiently remote to allow an exception. The Deputy Director's qualifying relative is not part of any management team for the Subcontractor, nor does he have any ownership interest with this entity. The Subcontractor is not a large firm and is likely to remain to be a second or third tier subcontractor on design-build teams proposing bids for future ICC contracts. SHA and OICC have taken steps to insulate the Deputy Director from any direct contact with the Subcontractor and will reassign the review of any invoices or other matters specifically involving the Subcontractor to another employee in a similar position as the Deputy Director. The Deputy Director will review proposals in the RFQ and RFP design-build procurement process for the ICC Project. He will be able to participate as a member of the technical review team for a proposed ATC. Although his input and thirty years of design expertise were highlighted by SHA officials, the Deputy Director is not the final decision maker or a member of any of the final review committees on any of the ICC contracts. The Deputy Director does not have duties related to the payment of invoices on the ICC contracts and SHA has guidelines in place to ensure no future interaction between the Deputy Director and Subcontractor.
Under these particular facts, we grant the Deputy Director an exception under the provisions of §15-501(b) of the Ethics Law to participate in matters involving the Subcontractor as a member of a proposed design-build team on the contracts involved in the ICC Project. The Deputy Director should continue to disclose his qualifying relative's employment relationship with the Subcontractor on Schedule I of his annual financial disclosure statement. In the event that the Deputy Director or his qualifying relative change positions with the respective employers or be assigned additional responsibility or authority in any matter between the Subcontractor, SHA or OICC, we would further review this exception. We advise that SHA and OICC should continue to monitor this situation and bring any issues of concern to our attention.
Robert F. Scholz, Chairman
H. Richard Duden, III
Janet E. McHugh
Julian L. Lapides
Paul M. Vettori
October 11, 2007
#1 Information regarding the ICC and the ICC procurement process were obtained from the ICC website http://www.iccproject.com and materials provided by SHA during this opinion process.
#2 Qualifying relative is defined as a spouse, parent, child, brother or sister in §15-502(gg) of the Public Ethics Law (Md. Code Ann., State Gov't Title 15 (Supp. 2006)).
#3 The Deputy Director is not required to make a disclosure of his adult brother's employment on his annual financial disclosure statement. Section 15-607(f) requires that filers disclose information regarding employment by or interests in business entities doing business with the State held by the individual filer or members of their immediate family. "Immediate family" is defined in §15-102(s) as an individual's spouse or dependent children.
#4 See Opinions 90-2, 90-15, 04-02, 05-01, and 05-02.
#5 See Opinions 04-02, 05-01 and 05-02.