STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

POWER LINE ENGINEERING, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 87-1174

) DEPARTMENT OF GENERAL SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, an administrative hearing was held before Diane D. Tremor, Hearing Officer, with the Division of Administrative Hearings, on June 10, 1987, in Tampa, Florida. The issue for determination in this proceeding is whether Power Line Engineering, Inc. is entitled to certification as a Minority Business Enterprise.

APPEARANCES

For Petitioner: LaVerne Sloan

Power Line Engineering, Inc. Post Office Box 671

Plant City, Florida 33566

For Respondent: Sandra E. Allen

Office of General Counsel Room 452, Larson Building

Tallahassee, Florida 32399-0955 INTRODUCTION

In support of its position that it is entitled to certification as a Minority Business Enterprise, the petitioner presented the testimony of LaVerne Sloan, William Roger Sloan and Scott Austin, Jr. No documentary evidence was introduced by the petitioner or the respondent.

A transcript of the final hearing has not been received.

Subsequent to the hearing, counsel for the respondent Department of General Services filed proposed findings of fact and proposed conclusions of law. The respondent's proposed factual findings have been accepted and are incorporated herein.

FINDINGS OF FACT

Upon consideration of the testimony received at the hearing, the following relevant facts are found:

1. Power Line Engineering, Inc. was originally formed in 1983 by Roger Sloan, who initially held 100 percent of the stock. The business of the corporation is the installation of overhead power lines and street lights.

   
   

2. In August of 1986, approximately 52 percent of the corporation's stock was transferred to LaVerne Sloan, Roger Sloan's wife, and 10 percent was transferred to Scott Austin. Roger Sloan retained the remainder of the shares. The testimony was unclear as to how many directors the corporation has, and no documentary evidence was offered at the hearing. Roger Sloan is the president, Scott Austin is the vice-president and LaVerne Sloan is the secretary/treasurer of the corporation. It appears that these three individuals are also the sole directors of the petitioner.

   
   

3. Roger Sloan is the chief estimator and does most of the public relations work for the company. He solves problems in the field and does cost estimating for bids. Most of the equipment owned by the company was purchased by him prior to August of 1986.

   
   

4. Scott Austin is in charge of the field work and he consults with Roger Sloan if there are problems in the field. He also helps with the bid work. It is his view that he and Mr. and Mrs. Sloan are partners in running the company.

   
   

5. LaVerne Sloan is the general manager in the office. While the company uses an accountant for the book work, she signs all the checks, except during emergencies, and all purchases are approved by her. She also makes decisions as to whether union or nonunion employees are utilized on jobs. However, if there are problems with employees in the field, Mr. Austin and Mr. Sloan make the decision regarding their retention. LaVerne Sloan assembles the bid packages and does some public relations work for the company. She is a full-time employee for the petitioner. The evidence was unclear as to the amount of time, if any, that LaVerne Sloan was employed by the petitioner prior to August of 1986.

   
   

6. Roger Sloan, LaVerne Sloan and Scott Austin talk together each day and discuss what has happened that day with respect to the business.

   
   

7. While the application for certification as a Minority Business Enterprise was not offered into evidence, LaVerne Sloan stated that she applied in September of 1986.

   
   

   CONCLUSIONS OF LAW

   
   

8. The burden of proof in this proceeding is upon the petitioner to demonstrate entitlement to certification as a Minority Business Enterprise. A Minority Business Enterprise (MBE) is statutorily defined, in relevant part, as a "small business concern ... which is at least 51 percent owned by minority persons and whose management and daily operations are controlled by such persons." Section 288.703(2), Florida Statutes. A "small business" is

   
   

   "an independently owned and operated business concern which employs 25 or fewer permanent full-time employees, and which has a net worth of not more than 1 million."

   
   

   Section 288.703(1), Florida Statutes. In this proceeding, the petitioner failed to demonstrate by competent, substantial evidence that it was either a "small

   business" or that its management and daily operations are controlled by a minority; to wit: an American woman, in this instance.

   
   

9. No evidence as to the net worth of Power Line Engineering, Inc. was produced at the hearing. No evidence was produced as to the number of permanent, full-time employees. The regulations of the Department of General Services set forth the documents which must be submitted for establishing that an applicant is a small business concern. Rule 13-8.005(4), Florida Administrative Code. No such documents were produced by the petitioner at the hearing.

   
   

10. However, even if it could be concluded that petitioner is a "small business" as statutorily defined, there was a failure to demonstrate that the management and daily operations of the petitioner are controlled by LaVerne Sloan. Among the factors which the respondent is required to consider when determining whether a minority owner possesses control over the management and daily operations of a business are whether such owner has

    
    

    (b) ... the authority to hire and fire employees

    . . .

    1. ... the capability, knowledge, and experience required to make decisions regarding that particular type of work; and

    2. ... displayed independence and initiative in seeking and negotiating contracts, accepting and rejecting bids and in conducting all major aspects of the business.

    
    

    Rule 13-8.005(3), Florida Administrative Code.

    
    

11. Here, petitioner failed to produce any evidence in the form of bylaws, articles of incorporation or minutes as to the structural organization of the petitioner. If it is controlled by a three-member board of directors, it could be assumed that Mrs. Sloan could be outvoted by the two non-minority members of the board. If it is controlled by the officers, it is reasonable to assume that Mr. Sloan, as president, would be the chief executive officer and thus have control over the corporation's daily operations.

    
    

12. While it was established that Mrs. Sloan acts as general manager with regard to running the petitioner's office and even the financial affairs, it was not established that she has control over the daily operations of the business. Her capability, knowledge and experience with regard to the business of installing power lines and street lights was not established. While she hires employees, it was not established that she had the authority to fire employees. Indeed, the evidence establishes that that function is left to Mr. Sloan and Mr. Austin. While she engages in some public relations work, it was established that her husband performs the vast majority of the work relating to contracts and bids. It appears that the duties of the three shareholders are somewhat divided and that the three make joint decisions concerning the overall functioning of the corporation. Mr. Sloan and Mr. Austin perform and/or supervise the field work and perform cost estimates for bids. Mrs. Sloan manages the office, does the finances, makes arrangements for labor and performs some public relation functions when it appears to be beneficial to the company for her to do so. While checks and purchase orders are signed by her as general manager and/or secretary/treasurer of the corporation, it was not established

    that she has the authority to control the finances or business decisions of the petitioner. Nor did it appear that she had the experience or background to do so.

    
    

13. In summary, petitioner has failed to sustain its burden to demonstrate that it is a small business whose management and daily operations are controlled by LaVerne Sloan. Indeed, the testimony presented at the hearing suggests that the three officers and shareholders of the corporation meet on a daily basis, discuss the business and jointly decide how the corporation will be operated.

RECOMMENDATION

Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the petitioner's application for certification as a Minority Business Enterprise be DENIED.

Respectfully submitted and entered this 13th day of August, 1987, in Tallahassee, Florida.

DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 13th day of August, 1987.

COPIES FURNISHED:

LaVerne Sloan

Power Line Engineering, Inc. Post Office Box 671

Plant City, Florida 33566

Sandra E. Allen Department of General

Services

Office of General Counsel Room 452, Larson Building

Tallahassee, Florida 32399-0955

Ronald W. Thomas Executive Director Department of General

Services

Room 133, Larson Building Tallahassee, Florida 32399-0950

Docket for Case No: 87-001174

Orders for Case No: 87-001174