Needelman Wins Partial Victory in Court Case Brought by Ellis

TITUSVILLE, Florida -- The 'Florida Sunshine Law' lawsuit brought by former Brevard County Clerk of Court Scott Ellis against current Clerk of Court Mitch Needelman is set for hearing before 18th Circuit Court Judge John M. Harris at 9:00 a.m. on Monday, July 23, 2012 at the Historic Courthouse located on 506 Palm Avenue in Titusville, Florida.

Needelman Wins Partial Victory in Court Case Brought by Ellis

9:15 a.m. UPDATE: Charles Parker:  Scott Ellis and Mitch Needelman's attorney are in a jury room per order of the judge to try to work it out.  Mitch Needelman is not present.


9:45 a.m. UPDATE: Court is in session.

9:50 a.m. UPDATE:Needelman's office to Judge Harris: 'No knowledge of a May 23, 2012 contract.'

10:00 a.m. UPDATE: Judge Harris: Needelman's office must provide Matt Nye with requests and associated emails before noon Friday. 

10:05 a.m. UPDATE: Judge Harris: Future invoices of notification of charges from Needelman's office to Ellis must be provided within 48 hours.  

10:15 a.m. UPDATE: Judge Harris is reviewing the Krasny and Dettmer, P.A. in camera (in chambers) to determine whether attorney-client/work product privilege exists.


10:20 a.m. UPDATE: Needelman's attorney asks that the Court approve any further public records requests made by Ellis.  Judge Harris says "No, take it up with the Florida Legislature."


10:40 a.m. UPDATE: Judge Harris finds attorney-client/work product privilege exists with Krasny and Dettmer, P.A. opinion letter - is exempt from public records request.

The lawsuit stems from Florida Statute Chapter 119 public records requests made by Ellis in May to Needelman for documents related to an $8.52 million award made by Needelman to corporations affiliated with BlueWare - a company that digitizes business and medical records and develops software for the management of those records.  

BlueWare made local business headlines in recent months when Florida Governor Rick Scott took credit for bringing the company to Florida from Michigan.

Ellis contends that the documents will ultimately reveal that Needelman engaged in 'no bid' or 'sham bid' contracts with BlueWare associated companies so that Needelman's former lobbying associate from the lobbying firm Eligere Strategies, Matt Dupree, would get consulting fees from the deal.  To support his claims, Ellis has produced a payables spreadsheet which shows three separate payments of $20,000, $5,000, and $5,000 going to an entity named "Matt D/Susan Smith Escrow."


At the Brevard County Conservative Coalition Constitutional Officers Forum at the Holiday Inn at Viera, Florida on May 24, 2012, Needelman repeatedly denied that Dupree represented BlueWare.

"COMPLICATED" REQUESTS

“The reason Scott did not receive his request back in May was because it was made during contract negotiations, which is protected under statute until completed.  The contract was signed on 06/29/12 and that is the date we released the information.  Scott was notified that his request was ready and of his costs on 07/02/12.  He didn't pay and pick up until the 3rd,” Needelman said to Brevard Times earlier this month. "Because his real purpose is not to gather information, but to set up failure if possible, his requests are always multi-layered and complicated.  His hope is that something will be missed, left out, or simply not accessible without a great deal of time-consuming research on the part of my staff.  It feels like he has made a request every other day since I took office." 


 

QUESTIONABLE CONTRACTING PROCEDURES
 

Since that article ran, Needelman has produced more documents to Ellis which raises even more questions whether Needelman complied with Florida Statutes regulating the fair bidding procedures for government agencies.

Rather than issue an Request for Proposals or Invitation to Bid, Needelman issued an Invitation to Negotiate on May 3 for the digitizing of the Clerk's records, one day before Florida Governor Rick Scott issued his press release announcing BlueWare's move to Florida.  

An Invitation to Negotiate is statutorily the least preferred method for governments to solicit contracts from outside vendors.  In fact, Florida Statute Section 287.057(1)(c)(1) requires that "Before issuing an invitation to negotiate, the head of an agency must determine and specify in writing the reasons that the procurement by an invitation to bid or request for proposal is not practicable." 

But because Needelman did not make readily available to the public the Fla. Stat. Sec. 287.057(1)(c)(1) written justification for the Invitation to Negotiate, a competing vendor who was not awarded the contract submitted a public information request for the document.  

Although Needelman had cited a budgetary crisis in the Clerk's office as the reason to outsource Clerk employees last year, Needelman awarded one of BlueWare's affiliated companies, BlueGem, L.L.C., a five-year, $8.52 million digitizing contract on May 23 with a $500k up-front payment  which was wired to BlueGem that same day even though a final contract had not been signed until June 29.  An additional 90k signing payment was wired from the Clerk to BlueGem on June 29.  

Before the May 3 Invitation to Negotiate was issued and a contract later awarded to BlueGem, Needelman had separately contracted on April 6 with yet another BlueWare-affiliated company, RoseWare, L.L.C., to "Review all outside vendor contracts on behalf of the Brevard County Clerk's Office."
 

Whether RoseWare was quarantined from the digitizing contract formulation and negotiation process that ultimately ended in the award to affiliated BlueGem, or was actually paid for being involved in the process has yet to be revealed.  Florida Statute Section 287.057(17)(a) requires that a governmental agency avoid such conflicts of interest while subsection (b) bars a contract award if an unfair competitive advantage has been given to one vendor over another.

Additionally, an invoice dated March 20, 2012 from BlueGem to the Brevard County Clerk of Courts has a description of work performed prior to the issuance of the May 3 Invitation to Negotiate with the following:

a. Evaluate and audit scanning capabilities and efficiencies
b. Evaluate and audit redaction and IT hardware and software available to meet digitizing demands
c. Evaluate current scanning and redaction capacities and demands
d. Appraise software and hardware inputting and output to Industry "best practices" standards
e. Assess personnel time and efficiency requirements for current demand
f. Present oral report of audits and activities
  i. Outline current staff and technologies abilities compare to industry "best practices"
  ii. Analyze software and hardware needs to increase efficiences and reduce costs
  iii. Suggest software/hardware/personnel deployment strategies for improved performance.
  iv. Suggest improvements for improving current and back compliance with record digitizing "best standards"


Florida Statute Section 287.057(17) provides that:

(a)1. Each agency must avoid, neutralize, or mitigate significant potential organizational conflicts of interest before a contract is awarded. If the agency elects to mitigate the significant potential organizational conflict or conflicts of interest, an adequate mitigation plan, including organizational, physical, and electronic barriers, shall be developed.

2. If a conflict cannot be avoided or mitigated, an agency may proceed with the contract award if the agency head certifies that the award is in the best interests of the state. The agency head must specify in writing the basis for the certification.

(b)1. An agency head may not proceed with a contract award under subparagraph (a)2. if a conflict of interest is based upon the vendor gaining an unfair competitive advantage.

2. An unfair competitive advantage exists when the vendor competing for the award of a contract obtained:

a. Access to information that is not available to the public and would assist the vendor in obtaining the contract; or

b. Source selection information that is relevant to the contract but is not available to all competitors and that would assist the vendor in obtaining the contract.

(c) A person who receives a contract that has not been procured pursuant to subsections (1)-(3) to perform a feasibility study of the potential implementation of a subsequent contract, who participates in the drafting of a solicitation or who develops a program for future implementation, is not eligible to contract with the agency for any other contracts dealing with that specific subject matter, and any firm in which such person has any interest is not eligible to receive such contract. However, this prohibition does not prevent a vendor who responds to a request for information from being eligible to contract with an agency.


REMAINING DOCUMENTS

One of the outstanding documents that has not been produced in this case is a legal opinion letter for the Brevard County Clerk of Court's office regarding the proposed BlueGem contract prepared by Krasny and Dettmer, P.A. - a law firm in Melbourne, Florida.  Ellis has obtained the law firm's invoice to the Clerk of Court, but not the actual opinion letter.

In an email to Ellis, Needelman's office contends that the letter is protected by attorney-client / work product privilege:

"Another request you have made is for an opinion letter provided by the law firm of Krasny and Dittmer.  Respectfully, I must decline this request at this time.  The letter is Work Product and covered under attorney client privilege and especially under the anticipation of your litigation that is now in the records.  Please see   

Ҥ119.071(1)

(d)1.

A public record that was prepared by an agency attorney (including an attorney employed or retained by the agency or employed or retained by another public officer or agency to protect or represent the interests of the agency having custody of the record) or prepared at the attorney’s express direction, that reflects a mental impression, conclusion, litigation strategy, or legal theory of the attorney or the agency, and that was prepared exclusively for civil or criminal litigation or for adversarial administrative proceedings, or that was prepared in anticipation of imminent civil or criminal litigation or imminent adversarial administrative proceedings, is exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution until the conclusion of the litigation or adversarial administrative proceedings."

Ellis, who will represent himself at the hearing, contends that the opinion letter was not drafted in anticipation for litigation related to his public records requests.  He says that "The FS 119 issue has nothing to do with a legal opinion on a signed contract."

Ironically, Merrily T. Longacre, Esq., Chief Staff Counsel for the Brevard County Clerk of Courts, told Ellis in a follow up e-mail that "That letter remains exempt.  You have the invoice.  If there are other items you believe are related, please let me know.  For now, until the litigation is over, the letter remains exempt."

In other words, as soon as Ellis' litigation with Needelman for the opinion letter ends, it will no longer be subject to attorney-client privilege and become publicly available to Ellis.

SILENCE 
 
Brevard Times reached out to Needelman's office to explain the issues surrounding these contracts, and to include the Fla. Stat. Sec. 287.057(1)(c)(1) written justification for the Invitation To Negotiate.  However, Needelman's office did not respond our repeated inquiries.

 

Since Brevard Times wrote the initial story surrounding the contacts, Needelman has remained out of the public spotlight despite the fact that the Primary Election Day is only a few weeks away.  He did not attend the biggest Republican event in Brevard County, the Brevard Republican Executive Committee picnic.  His campaign website has no events scheduled from now until Election Day.
 

Rose Harr, who has been involved in the contracting process with the Clerk of Court's office on behalf of both RoseWare and BlueGem, told Brevard Times on July 8 that, "Because public interest in BlueWare is being generated by contentious remarks in the Brevard County Clerk of Court race, we will be inviting representatives from local media sources to a press conference.  At this conference, we will provide information on BlueWare and BlueGEM, discuss details on the recently signed contract with the Brevard County Clerk of Court, and answer questions addressing the aforementioned remarks."  To date however, a press conference has not been held.

Also, Brevard Times contacted Florida Governor Rick Scott's office to find out what role his office played in the lucrative Clerk of Court contract given to the BlueWare-affiliated companies.  His office did not respond.