STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GENERAL CONTRACTORS & ) CONSTRUCTION MANAGEMENT, INC., )

)

Petitioner, )

vs. ) CASE NO. 94-4690

) STATE OF FLORIDA, COMMISSION ) ON MINORITY ECONOMIC AND )

BUSINESS DEVELOPMENT, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to written notice, a formal hearing was held in this case before Errol H. Powell, a duly designated Hearing Officer of the Division of Administrative Hearings, on March 9, 1995, by video teleconferencing in Miami, Florida.

APPEARANCES

For Petitioner: Akram Niroomand-Rad, President

General Contractors & Construction Management, Inc.

7390 Southwest 116th Terrace Miami, Florida 33156

For Respondent: George L. Waas

Assistant Attorney General Office of the Attorney General PL-01 The Capitol

Tallahassee, Florida 32399-1050 STATEMENT OF THE ISSUES

The issue for determination is whether Petitioner is eligible for certification as a Minority Business Enterprise.

PRELIMINARY STATEMENT

General Contractors & Construction Management, Inc., (Petitioner), by and through its President, Ms. Akram Niroomand-Rad, made application to the Florida Department of Management Services (Department) for certification as a Minority Business Enterprise (MBE). By letter dated June 14, 1994, the Department notified Petitioner that its application for certification as an MBE was denied based upon (1) Petitioner's minority owner, Ms. Niroomand-Rad, not being in control of the management and daily operations of the business and (2) Petitioner's failure to meet the requirements of MBE Rules 60A-2.001(7) and

(14), 60A-2.005(3), (3)(a)-(d), and 60A-2.005(3)(d) 1-6, Florida Administrative Code. By letter dated August 15, 1994, Petitioner contested the denial and requested a hearing.

Subsequent to the denial, the Florida Commission on Minority Economic and Business Development (Respondent) was created by the Florida Legislature and, among other things, the responsibility for certifying MBEs was transferred from the Department to the Respondent.

On August 25, 1994, the matter was referred to the Division of Administrative Hearings. A formal hearing was scheduled pursuant to notice.

At hearing, Petitioner's President testified and two exhibits were entered into evidence on behalf of Petitioner. The parties entered one joint composite exhibit into evidence. Respondent presented the testimony of one witness and entered three exhibits into evidence, two of which were deposition testimony.

A transcript of the formal hearing was ordered. At the request of the parties, the time for filing posthearing submissions was set for more than ten days following the filing of the transcript. The parties submitted proposed findings of fact which have been addressed in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. General Contractors & Construction Management, Inc. (Petitioner), is a Florida corporation engaged in the business of general contracting and construction (construction and renovation of commercial and residential buildings), including subcontracting, since 1985. Petitioner's President is Ms. Akram Niroomand-Rad and its Vice-President is Mr. Kamran Ghovanloo, Ms. Niroomand-Rad's husband. Petitioner is a small business concern as defined by Subsection 288.703(1), Florida Statutes.

   
   

2. Prior to April 1990, Ms. Niroomand-Rad owned 50 percent of Petitioner's stock. In April 1990, she acquired 100 percent of the stock and became the Petitioner's sole owner.

   
   

3. Ms. Niroomand-Rad is a minority person as defined by Subsection 288.703(3), Florida Statutes.

   
   

4. According to Petitioner's articles of incorporation and by-laws, its corporate business is conducted by a majority of the board of directors. Petitioner has two directors, Ms. Niroomand-Rad and Mr. Ghovanloo, 1/ and as such, the minority owner does not control the board of directors.

   
   

5. Also, according to Petitioner's by-laws, Petitioner's President manages its business and affairs subject to the direction of the board of directors.

   
   

6. Petitioner's licensed contractor is Mr. Ghovanloo who is a certified general contractor. Ms. Niroomand-Rad is not a licensed contractor although she is taking course work to become a licensed contractor.

   
   

7. Mr. Ghovanloo is Petitioner's qualifier, and, as its qualifier, brings his expertise and license to the business. Further, as qualifier, he is also responsible for the finances of Petitioner and for pulling the necessary permits in order for Petitioner to perform the contractual work.

8. Additionally, Mr. Ghovanloo performs Petitioner's estimating, handles quality inspection of job sites, assists in the evaluation and preparation of bids, and attends some of the pre-bid meetings on projects.

   
   

9. Ms. Niroomand-Rad has been involved in soliciting bids, reviewing bids and estimates, negotiating contracts, visiting clients, responding to correspondence, overseeing financial activities, hiring and firing, and visiting job sites. However, Ms. Niroomand-Rad relies heavily upon Mr. Ghovanloo's technical expertise, expert opinions, and judgment and upon others for guidance and for handling the technical aspects of the business.

   
   

10. Further, Ms. Niroomand-Rad relies heavily on Mr. Ghovanloo, and others to a lesser degree, regarding the purchasing of goods, equipment, or inventory, and services needed for the day-to-day operation of the business, including evaluating and retaining subcontractors. Mr. Ghovanloo is authorized to sign checks without restriction.

    
    

11. Ms. Niroomand-Rad was reared in a construction environment. Also, she has completed a construction management course offered by the City of Miami and is a licensed real estate broker.

    
    

12. Petitioner has been certified as an MBE by Dade County and the Dade County School Board.

    
    

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and the parties thereto, pursuant to Subsection 120.57(1), Florida Statutes. The parties were duly noticed for the formal hearing.

    
    

14. Petitioner bears the burden of demonstrating that it is eligible for certification as an Minority Business Enterprise (MBE). Florida Department of Transportation v. J.W.C. Company, 396 So.2d 778, 788 (Fla. 1st DCA 1981).

    
    

15. At the time of Petitioner's application for certification as an MBE, Section 288.703, Florida Statutes, provided in pertinent part:

    
    

    1. "Minority business enterprise" means any small business concern as defined in subsection (1) which is organized to engage

       in commercial transactions, which is domiciled in Florida, and which is at least 51 percent owned by minority persons and whose management and daily operations are controlled by such persons. A minority business enterprise may primarily involve the practice of a profession.

       
       

16. Currently, and subsequent to Petitioner's application, Section 288.703, Florida Statutes (1994 Supp.), provides in pertinent part:

    
    

    1. "Minority business enterprise" means any small business concern as defined in subsection

       (1) which is organized to engage in commercial transactions, which is domiciled in Florida, and which is at least 51-percent-owned by minority persons who are members of an insular group that

       is of a particular racial, ethnic, or gender

       makeup or national origin, which has been subjected historically to disparate treatment due to identification in and with that group resulting

       in an under-representation of commercial enterprises under the group's control, and whose management

       and daily operations are controlled by such persons. A minority business enterprise may primarily involve the practice of a profession.

       
       

17. Also, currently, and subsequent to Petitioner's application, Section 287.0943(1), Florida Statutes (1994 Supp.), provides in pertinent part:

    
    

    1. In assessing the status of ownership and control, certification criteria shall, at a minimum:

       1. Link ownership by a minority person, as defined in s. 288.703(3), or as dictated by the legal obligations of a certifying organization, to day-to-day control and financial risk by the qualifying minority owner, and to licensure of a minority owner in any trade or profession that the minority business enterprise will offer to the state when certified; however, the minority license holder need not be the controlling owner of the enterprise, but must hold an ownership

    interest. Minority business enterprises presently certified by the state will not be subject to the licensure requirement until 5 years after the effective date of this act.

    
    

18. Pertinent to this case, Subsection 287.0943(1)(e) mandates that, as a minimum criteria, the minority owner must be licensed in the trade or profession that the MBE will offer to the state when it is certified. Petitioner will offer to the state the trade or profession of general contracting, but its minority owner is not licensed as a general contractor.

    
    

19. Petitioner contends that Subsection 287.0943(1)(e) should not be applicable to it because the statutory requirement became effective subsequent to its application for MBE certification. Petitioner's argument is not persuasive. The general rule is that a change in a licensure statute, during the pendency of the application for licensure, is applicable to the pending application and, therefore, the statute, as changed, determines the granting of the license. Lavernia v. Department of Professional Regulation, Board of Medicine, 616 So.2d 53 (Fla. 1st DCA 1993). 2/

    
    

20. Accordingly, Petitioner has failed to demonstrate that it has satisfied even the minimum criteria, prescribed in Subsection 287.0943(1)(e), to be eligible for certification by Respondent as an MBE.

    
    

21. It is unnecessary to examine whether Petitioner has demonstrated that it has satisfied the requirements of Respondent's rules as to control and independence. For even if Petitioner demonstrates that it has satisfied the requirements of the rules, Petitioner could not be certified due to its failure to satisfy the statutory requirement of Subsection 287.0943(1)(e).

22. However, even assuming that Subsection 287.0943(l)(e) is not applicable, Petitioner has failed to demonstrate that it has satisfied the requirements of control and independence enunciated in Rules 60A-2.001(14), 60A- 2.005(3)(b)-(d), and 60A-2.005(3)(d)1-6, Florida Administrative Code.

    
    

23. This determination does not preclude Petitioner from making application at a later time for certification by Respondent as an MBE.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission on Minority Economic and Business

Development enter a final order denying General Contractors & Construction

Management, Inc., certification as a Minority Business Enterprise.

DONE AND ENTERED this 24th day of July, 1995, in Tallahassee, Leon County, Florida.

ERROL H. POWELL

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 24th day of July, 1995.

ENDNOTES

1/ Attached to Petitioner's proposed recommended order is an exhibit purporting to show that Ms. Niroomand-Rad is the sole director, as of December 2, 1992.

This document was not entered into evidence at the hearing and, therefore, cannot, and will not, be considered.

2/ Petitioner has not demonstrated that its circumstances fall within any exception to the general rule.

APPENDIX

The following rulings are made on the parties' proposed findings of fact: Petitioner (Petitioner did not number its proposed findings of fact.) Paragraph 1. Partially accepted in findings of fact 1 and 2.

Paragraph 2. Partially accepted in findings of fact 6 and 11. Paragraph 3. Partially accepted in findings of fact 5 and 9.

Respondent

1. Partially accepted in finding of fact 1.

2. Partially accepted in finding of fact 4.

3 and 4. Partially accepted in finding of fact 6.

1. Partially accepted in finding of fact 9.

2. Partially accepted in findings of fact 7 and 8.

3. Partially accepted in finding of fact 10.

NOTE: Where a proposed finding has been partially accepted, the remainder has been rejected as being irrelevant, unnecessary, subordinate, not supported by the more credible evidence, argument, or a conclusion of law.

COPIES FURNISHED:

Crandall Jones Executive Administrator

Commission on Minority Economic & Business Development

Knight Building 2727 Centerview Dr.

Tallahassee, FL 32399-0950

Ms. Akram Niroomand-Rad General Contractor & Construction Management, Inc. 7390 SW 116th Terrace

Miami, FL 33156

George L. Waas

Assistant Attorney General PL-01 The Capitol Tallahassee, FL 32399-1050

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 94-004690

Orders for Case No: 94-004690