vs. ) CASE NO. 83-3998
Respondent. )
For Petitioner: Tyrie A. Boyer, Esquire and
Michael J. Korn, Esquire Jacksonville, Florida
For Respondent: Linda G. Miklowitz, Esquire
The final hearing in this case was held on May 10, 1984, in Jacksonville. The issue is whether respondent should grant petitioner, Metro Signal Company, Inc., certification as a minority business enterprise.
Petitioner Metro Signal Company, Inc. (Metro) is a Florida corporation in good standing, whose primary business is the installation of various traffic signalization devices (T. 20-22). Metro was incorporated on July 29, 1983 (T. 21). Its president, secretary and treasurer is Rosalyn T. Beasley, who was employed for twelve years by the American National Bank in Jacksonville and was responsible for various matters relating to construction financing and project inspection prior to the founding of Metro. She eventually became Manager of American Bank's Land Development and Construction Loan Department (T. 70). Mrs. Beasley is a high school graduate who has taken various college courses in business, accounting, lending, real estate and construction estimating (T. 19- 20).
The vice president of Metro is D. J. Beasley, who is married to Rosalyn
T. Beasley. Mr. Beasley has twenty-five (25) years of experience in the commercial and industrial electrical field (T. 154). Mr. Beasley worked for seventeen years on various projects as a general journeyman electrician as a member of Local 177, International Brotherhood of Electrical Workers (IBEW), Jacksonville, Florida (T. 21, 154). Immediately before joining Metro, Mr. Beasley was employed for two years by Globe Electric Company in Jacksonville, Florida, where he obtained experience in traffic signalization and was responsible for field supervision and job management of Globe's Traffic signalization projects (T. 21, 155).
Mr. Beasley owns four of the ten shares of stock issued by Metro (a 40 percent owner of the company) (T. 159). Mrs. Beasley owns sic of the ten shares
of stock issued by Metro (a 60 percent owner of the company) and contributed
$5,000.00 as the initial capitalization for the company. Mr. Beasley contributed his expertise and various tools and equipment to the start-up of the business (T. 20-22). Mrs. Beasley also is a member of Metro's Board of Directors and is registered agent for the corporation.
Rosalyn Beasley is solely responsible for and has handled all business matters relating to the banking and financing of the company, and has been the sole corporate officer responsible for obtaining necessary bonding and insurance coverage for the company (T. 24-25, 160).
Rosalyn Beasley has the power to hire and fire all employees, including
D. J. Beasley (T. 124). Rosalyn Beasley makes all contacts with equipment suppliers to obtain necessary signalization (T. 47). Mrs. Beasley sings contracts and bid proposals on behalf of Metro (T. 57), and she signs approximately eight bid proposals per month. Although some correspondence would be directed to D. J. Beasley in the early days of the company, Rosalyn Beasley signs virtually all outgoing Metro correspondence, and would respond to correspondence initially directed to D. J. Beasley and inform the persons that Metro correspondence should be directed to her attention (T. 73-74).
Mrs. Beasley testified regarding the efforts required for a new company such as Metro to obtain "bid bond" coverage, which had to be obtained before Metro could bid on traffic signalization projects being let by the Department of Transportation (DOT) (T. 23-25). Through Mrs. Beasley's efforts, Metro was able to gain a favorable reputation with representatives of the Small Business Administration, and Metro subsequently was able to obtain bid bonding through a private bonding company (T. 25). Mrs. Beasley made all contacts with Small Business Administration personnel.
Mrs. Beasley reads advertisements placed by DOT announcing various jobs of interest in the geographic areas of Florida where Metro sought to operate. These jobs were usually let from the DOT offices in Bartow, Lake City, DeLand, and Chipley, Florida (T. 26). If Metro was interested in bidding on a particular job on a subcontractor basis, the plans and specifications for the project would be ordered from DOT's Tallahassee office in order to determine what signalization would be required (T. 26). The DOT Plans and specifications supply Mrs. Beasley with all necessary information regarding the type and quantity of traffic signalization equipment required to complete the project (T. 26-27). The procedure for the letting of sub-contract bids in Tallahassee requires physical delivery of bids to the various contractors who may be bidding on a particular project. Metro has acted as both a prime contractor and a sub- contractor on DOT projects, depending on the scope of the project (T. 23, 26). Mr. and Mrs. Beasley have attended all Tallahassee bid lettings together since Metro was formed (T. 135). Mrs. Beasley prepared and signed the actual bid proposals that Metro has submitted (T. 31). The bid would be determined after analysis of the DOT plans and specifications, which would allow Mrs. Beasley to determine the needed amount of equipment and manpower. When Metro was first formed, either D. J. Beasley or Rosalyn Beasley would prepare a bid proposal, while the other would be responsible for reviewing it (T. 32). D. J. Beasley only prepared and signed three bid proposals; Mrs. Beasley was not involved in these bids because she did not have sufficient time to handle those particular projects because of her other duties (T. 59). However, Mrs. Beasley reviewed those three bid proposals before they were submitted, and understood and approved them (T. 60). Rosalyn Beasley now prepares all Metro bid proposals, although D. J. Beasley is available for consultation if Mrs. Beasley needs or desires further input on a certain topic (T. 32).
Mrs. Beasley makes all contacts with equipment suppliers in determining the cost of each piece of equipment required by the DOT plans and specifications for a particular project, and Mrs. Beasley determines the appropriate "mark-up" so that Metro may earn a profit. Mrs. Beasley makes these inquiries without the assistance or involvement of D. J. Beasley (T. 47). Mrs. Beasley is responsible for studying the plans and specifications after their arrival from Tallahassee DOT (T. 46).
Although Mrs. Beasley is not a trained electrician or engineer, she has a working knowledge of the traffic signalization industry which enables her to actively participate, since Metro's inception, in the bid letting process (T. 75). She has gained additional experience by participating in the various bid lettings, preparing bids, and by becoming more familiar with the signalization business as a result of her activities in the normal course of business as Metro's chief executive officer (T. 28,46). Mrs. Beasley can describe various components of electrical traffic signalization projects upon which Metro has recently and successfully bid (T. 34-46). Mrs. Beasley also can explain the definitions of some signalization terms such as "grounding electrode", "conduit", "span wire assembly", "pull and junction boxes", "signal bead auxiliary", "inductive loop detector", and "five section traffic cluster." Mrs. Beasley knows that various DOT manuals contain the code and item numbers for all pieces of equipment which are found in the plans and specifications of DOT projects (T. 39), and she consults numerous DOT reference sources if she has a question or problem. These publications include "Standard Specifications 1982" (with supplements), "Roads and Bridges Construction 1982 - Traffic Signals" (T. 143), and "Roadway and Traffic Design Standards" (T. 148).
When Metro is working on a project in the Jacksonville area (the location of Metro's corporate offices) Mrs. Beasley regularly visits the job site three to five times per week, and as needed, to get a progress report, to supervise and offer assisstance (T. 48). She is consulted by the project foreman, either D. J. Beasley or Robert Erb (another employee), about any problems or complications which have occurred at the project site during the day (T. 48-49). Metro currently has six employees, including Mr. and Mrs. Beasley (T. 48). Any changes in the plans and specifications of a project must first be cleared with DOT personnel, and liaison with the DOT is handled by Mrs. Beasley (T. 49). Mrs. Beasley also is responsible for seeing the work is performed smoothly and in a timely fashion, and that adequate personnel are assigned to each job (T. 50).
If the project is performed outside of Jacksonville, Mrs. Beasley must, of necessity, delegate more responsibility to the on-site foreman. However, she stays in close telephone communications with the project foreman (T. 51), and is kept informed of progress being made and any complications.
Mrs. Beasley also has had responsibility for conferring with DOT project engineers relating to compliance with the subcontract agreement and DOT removal of pre-existing poles and wires from a roadway median in the vicinity of a Metro project (T. 136, 139). Although Mrs. Beasley does not engage in physical labor or in the actual installation of equipment at any Metro job site (T. 119), she observes D. J. Beasley and other Metro employees performing work at the projects in Jacksonville and has assisted as needed in directing traffic and keeping the project site orderly (T. 120).
D. J. Beasley and Rosalyn Beasley have discussed technical and financial issues concerning traffic signalization regularly since Metro's
inception (T. 125). If her husband was giving the company unsound or incorrect advice, Mrs. Beasley would have the ability to find out why it was unsound or incorrect, but they have not yet disagreed from an engineering standpoint regarding traffic signalization installation (T. 125, 126). Since a DOT engineer is present at the job site during all phases of project construction (T. 121), the DOT supervisory engineer would likely have already prevented Metro personnel from continuing any improper installation or other act before the president of the company could be notified and corrective action taken (T. 126- 127). Mrs. Beasley has sufficient knowledge of the traffic signalization business to be able to exhibit a working knowledge and exercise independent judgment. The hardest part of traffic signalization work is the "red tape" involved, not the technical aspects (T. 156, 157). The signalization contractor does little more than follow the DOT project plan and order the necessary equipment from a qualified supplier. If there is a problem, it stems from the plan itself or from equipment supplied (T. 158). Metro's job is to do the work necessary to follow the DOT plan (T. 163). Mr. Beasley takes no actions relating to a Metro project without Mrs. Beasley's knowledge and approval (T.
161). Rosalyn Beasley has the basic knowledge of the traffic signalization business which enables Metro to successfully do business (T. 164). "Hands-on experience" is not necessary to have such knowledge (T. 165).
Numerous procedures" supplied by the federal government are, as a matter of policy, utilized-by--the DOT during the MBE/WBE certification process. The purpose of this policy is to insure compliance with federal law establishing requirements for qualification of Florida highway projects for federal funding. One "procedure", dealing with the independence of the MBE applicant, states:
The minority person or woman should show that basic decisions pertaining to the daily operations of the business can be
independently made. This does not necessarily rule out the minority person or a woman owner seeking paid or unpaid advice and assistance. It does mean that the minority owner currently must possess the knowledge to weigh all advice given and make an independent determination.
Another federal "procedure" as also introduced into evidence by DOT pertaining to the technical competence required of the MBE applicant.
The minority person or a woman should have some technical competence in the industry to which certification is sought. Technical competence in this sense does not mean expert knowledge. It does mean the minority person or woman should have a working knowledge of the technical requirements of the business needed to operate in the industry.
The two above-referenced procedures are not part of the Florida Administrative Code, Florida Statutes or otherwise disseminated to potential MBE/WBE applicants.
CONCLUSIONS OF LAW
Section 14-78.05, Florida Administrative Code (1983), sets forth standards for certification of eligible minority or woman business enterprises. Section 14-78.05(3), states in pertinent part as follows:
In certifying a firm as an MBE, the Department (DOT) shall consider but shall not be limited to the following standards: (a) Bona fide minority group membership . . . (b) An eligible minority business enterprise under this rule shall be an independent business entity, the real, substantial, and continuing ownership and control of which shall be by minorities or women and go beyond mere
pro forma ownership of the firm as reflected in its ownership documents. The minority or woman owners shall enjoy the customary inci- dence of ownership and shall share in the risks and profits commensurate with their ownership interests, as demonstrated by an examination of the substance rather than form of financial and managerial arrangements. In assessing business independence the department shall consider all relevant factors, including but not limited to the date the MBE applicant
was established, the adequacy of its resources, and the degree to which financial relation- ships, equipment leasing and other business relationships with non-minority firms vary
from industry practice.
* * *
An eligible minority business enterprise under this rule shall be one in which the minority or women owners shall also possess the power to direct or cause the direction of the management and policies of the MBE and to make day-to-day as well as major business decisions concerning the MBEs management, policy and operation. The discretion of the minority or women owner shall not be subject to any formal or informal restrictions (in- cluding, but not limited to, bylaw provisions, partnership agreements, or charter require- ments or cumulative voting rights or otherwise) which would vary managerial discre- tion customary in the industry. (Emphasis added.)
In determining whether the minority or women owners also possess the power to direct or cause the direction of the management and policies of the MBE and have the requisite decision-making authority, the Department may look to the control lodged in the owners who are not minorities or women. If the owners who are not minorities or women are
disproportionately responsible for the opera-
tion of the enterprise or if there exists any requirement which prevents the minority or women owners from making business decisions without concurrence of any owner or employee who is not a minority or a woman, then the enterprise is not controlled by minorities
or women and shall not be considered an MBE within the meaning of this rule. Where the actual management of the enterprise is con- tracted out to individuals other than the owner(s), those persons who have the ultimate power to hire and fire other managers can, for the purpose of this rule, be considered as controlling the enterprise.
An eligible minority business enterprise under this rule shall be one in which the contributions of capital or expertise invested by the minority or business owners in order to acquire their interest(s) in the enterprise
are real and substantial. Examples of insuffi- cient contributions include a promise to con- tribute capital, a note payable to the enter- prise or its owners who are neither socially nor economically disadvantaged, or the mere participation as an employee rather than as a decision maker.
In addition, numerous "procedures" supplied by the federal government are utilized by the DOT during the MBE/WBE certification process as a matter of policy. One "procedure", dealing with the independence of the MBE applicant, states:
The minority person or woman should show that basic decisions pertaining to the daily operations of the business can be indepen- dently made. This does not necessarily rule out the minority person or a woman owner
seeking paid or unpaid advice and assistance. It does mean that the minority owner currently must possess the knowledge to weigh all
advice given and make an independent determination.
Another federal "procedure" was also introduced into evidence by DOT pertaining to the technical competence required of the MBE applicant.
The minority person or a woman should have some technical competence in the industry to which certification is sought. Technical competence in this sense does not mean expert knowledge. It does mean the minority person or woman should have a working knowledge of the technical requirements of the business needed to operate in the industry.
The only genuine issue for determination in this case is whether Rosalyn Beasley is able, based on her personal technical knowledge or experience
in the traffic signalization business, to exercise independent judgment and control. After considering the evidence presented in this proceeding, I conclude that Rosalyn Beasley has exhibited sufficient knowledge of, and experience in, the traffic signalization industry to allow her to exercise independent control. Mrs. Beasley is in total and complete control of all office administrative and financial matters relating to Metro projects. Mrs. Beasley also has a working knowledge of the business in which Metro engages and has the power to direct the activities of Metro, either personally or through directions to employees. She has the power to hire and fire all employees. She has able technical advisors to assist her if necessary, but she is also able to independently assess any potential problems. Therefore, under both the "procedures" supplied by the federal government and applicable portions of Chapter 14-78, F.A.C., Metro has met its burden of showing that its owner, Rosalyn Beasley, possesses sufficient technical knowledge and ability to exercise independent judgment and control over the company.
Chapter 14-78.05(3)(b) provides in pertinent part that the "real, substantial and continuing ownership and control" shall be by minorities or women. Metro has established that Rosalyn Beasley has the requisite knowledge and indeed exercises such control under either the Florida or federal standards. Chapter 14-78.05(3)(d) provides in pertinent part that the minority or woman owner must "also possess the power to direct or cause the direction of the management and policies" of the company, and shall possess the power "to make day-to-day as well as major business decisions concerning the MBE's management, policy and operation."
Rosalyn Beasley has adequately demonstrated her actual control, and ability to control, Metro's management. Given the type of business in which Metro is engaged, Mrs. Beasley has shown that she indeed makes all major decisions pertaining to every facet of company operation. Mrs. Beasley is not normally involved actively in the actual physical installation of traffic signals. But the applicable law does not require that Mrs. Beasley perform manual labor as a means of establishing her knowledge of the traffic signalization business in order to qualify for certification under the WBE/MBE program.
In the foregoing and in all other respects, Metro has met the requirements for certification as a Woman Business Enterprise as found in the Florida Administrative Code, and by application of the federal guidelines referred to above, and is qualified and entitled to receive certification as a Woman Business Enterprise by the DOT.
Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that respondent certify petitioner Metro Signal Company, Inc. as a duly qualified Woman Business Enterprise.
RECOMMENDED this 20th day of July, 1984, at Tallahassee, Florida.
J. LAWRENCE JOHNSTON Hearing Officer
Filed with the Clerk of the Division of Administrative Hearings this 20th day of July, 1984.
1/ Petitioner's proposed findings of fact have been considered and, to the extent reflected in these Findings of Fact, have been approved and adopted; to the extent not reflected in these Findings of Fact, petitioner's proposed findings of fact are rejected as either being unsupported by competent substantial evidence, being subordinate, or being irrelevant. Respondent did not timely file proposed findings of face and therefore none were considered.
Linda G. Miklowitz, Esquire Department of Transportation Haydon Burns Building
Tyrie A. Boyer, Esquire 3030 Independent Square
Michael J. Korn, Esquire 3030 Independent Square
Paul A. Pappas, Secretary Department of Transporation Haydon Burn Building Tallahassee, Florida 32301
