STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

1. S. CONSTRUCTION, INC., )

   )

   Petitioner, )

   )

   vs. ) CASE NO. 96-0380

   ) COMMISSION ON MINORITY ECONOMIC ) AND BUSINESS DEVELOPMENT, )

   )

   Respondent. )

   )

   
   

   RECOMMENDED ORDER

   
   

   Pursuant to notice, a formal hearing was held in this case on April 2, 1996, in Sarasota, Florida, before Carolyn S. Holifield, a duly designated Hearing Officer of the Division of Administrative Hearings.

   
   

   APPEARANCES

   
   

   For Petitioner: Richard J. Hazen, Esquire

   227 Pensacola Road Venice, Florida 34285

   
   

   For Respondent: Joseph L. Shields, Esquire

   Commission on Minority Economic and Business Development

   107 West Gaines Street Collins Building, Suite 201

   Tallahassee, Florida 32399-2000 STATEMENT OF THE ISSUE

   The issue for determination is whether the Petitioner is eligible for certification as a Minority Business Enterprise by the Commission on Minority Economic and Business Development.

   
   

   PRELIMINARY STATEMENT

   
   

   Petitioner, P. S. Construction, Inc., filed an application with Respondent, Commission on Minority Economic and Business Development (Commission), for certification as a Minority Business Enterprise (MBE). The Commission denied the request on December 22, 1995, after which P. S. Construction timely filed a request for a formal hearing challenging the denial. By letter dated January 19, 1995, the matter was referred to the Division of Administrative Hearings which scheduled and noticed the formal proceeding.

   
   

   At the final hearing, Petitioner presented the testimony of two witnesses, Pamela Sigmund, President of P. S. Construction, and Richard Mouhot, stockholder and officer of Pine Hollow, Inc. Petitioner had two exhibits admitted into

   evidence. Respondent presented the testimony of one witness, Lloyd Ringgold, a certification officer with the Commission, and had one exhibit admitted into evidence. The proceeding was recorded but not transcribed.

   
   

   At the request of the parties, the time set for filing proposed recommended orders was set for more than ten days after the hearing. Prior to the date set for filing post-hearing submissions, Respondent requested and was granted an extension beyond the time originally scheduled for proposed recommended orders. Respondent timely filed proposed findings of fact and conclusions of law under the extended time frame. No post-hearing proposal was filed by Petitioner.

   
   

   Explicit rulings on the proposed findings of fact contained in Respondent's proposed recommend order may be found on the attached Appendix to Recommended Order 96-0380.

   
   

   FINDINGS OF FACT

   
   

   1. P. S. Construction is a Florida corporation in the general construction business, specializing in the construction of single family homes. Pamela Sigmund is the President of P. S. Construction, and is the sole stockholder and director of the company.

      
      

   2. Ms. Sigmund is licensed by the State of Florida as a general contractor and is the general contractor for P. S. Construction. She also is the qualifying agent for Pine Hollow Construction Corporation (Pine Hollow Construction), a non-minority construction firm.

      
      

   3. Pamela Sigmund has no ownership interest in Pine Hollow Construction. However, Ms. Sigmund is currently employed by Pine Hollow Construction as the general contractor. In that capacity, Ms. Sigmund has oversight responsibility for a project involving the construction of two-story condominiums. Pursuant to a written agreement, Pine Hollow Construction compensates Ms. Sigmund for her services as follows: a weekly salary of $600.00; a monthly car allowance of

      $300.00; a Christmas bonus of $4000.00; insurance benefits; and vacation time. Furthermore, the agreement provides that Pine Hollow will pay to Ms. Sigmund a small percentage of the net cash flow. Considering the scope of Pamela Sigmund's responsibility for this large construction project, the compensation package is reasonable.

      
      

   4. Pine Hollow Construction provides space within its business office for Pamela Sigmund to perform her duties as general contractor for Pine Hollow Construction. A secretary, employed by Pine Hollow Construction, is assigned to Ms. Sigmund to assist her in performing responsibilities related to Pine Hollow Construction. This secretary works exclusively for Pine Hollow Construction and does not perform any duties related to P. S. Construction.

      
      

   5. P. S. Construction's mailing address is Post Office Box 6124, Venice, Florida. This address is used exclusively for P. S. Construction and is not the mailing address for Pine Hollow. Ms. Sigmund conducts P. S. Construction's business out of her home during evening hours and not while she is working for Pine Hollow Construction in its office.

      
      

   6. Although P. S. Construction has a post office box and the company's business is conducted from Ms. Sigmund's home, neither of these addresses was listed on Petitioner's application for MBE status. Rather, Petitioner's application listed the address of Pine Hollow Construction. This was done, not because P. S. Construction is located at the same address as Pine Hollow

      Construction, but as a convenience to Ms. Sigmund, who is usually at the Pine Hollow Construction office during the day.

      
      

   7. Pine Hollow Construction and P. S. Construction are involved in different types of construction and share no common owners, directors, managers, facilities, or financial resources. Likewise, the two companies do not share employees, nor do they use the same subcontractors.

      
      

      CONCLUSIONS OF LAW

      
      

   8. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of these proceedings.

      
      

   9. P. S. Construction has the burden of proving by a preponderance of the evidence that it is entitled to certification as an MBE. Florida Department of Transportation v. J. W. C. Company, Inc., 396 So.2d 778 (Fla. 1st DCA 1981)

      
      

   10. To qualify as MBE, as entity must come within the statutory definition of that term in Section 288.703(2), Florida Statutes, which provides in pertinent part:

       
       

       (2) "Minority business enterprise" means any small business concern as defined in sub- section (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. . .

       
       

   11. Rule 60A-2.005(4)(b), Florida Administrative Code, sets out certain factors to be considered in determining whether an applicant is a small business concern. To establish that it is a small business concern, the applicant must demonstrate that it is

       
       

       (b) not an affiliate of a non-minority busi- ness nor share (on an individual or combined basis) common ownership, directors, management, employees, facilities, inventory, financial resources and expenses, equipment, or business operations with a non-minority person and/or business concern which is in the same or an associated field of operation.

       
       

   12. There is no dispute that Petitioner is organized to engage in commercial transactions and is domiciled in Florida. Similarly, it is undisputed that Pamela Sigmund, president of P. S. Construction, is a minority person as defined in Section 288.703(3), Florida Statutes, and owns at least 51 percent of the company.

   13. The issue which must be resolved is whether Petitioner is a small business concern within the meaning of 60A-2.005(4)(b), Florida Administrative Code. According to that provision, in order to qualify as an MBE, Petitioner must demonstrate that it is neither affiliated with a non-minority business nor does it share "common ownership, directors, management, employees, facilities...with a non-minority person and/or business concern which is in the same or associated field."

       
       

   14. In this case, Petitioner has demonstrated that it is not an affiliate of a non-minority business. The unrefuted evidence established that P. S. Construction does not share common ownership, directors, management, employees, facilities, or financial resources with Pine Hollow Construction. Accordingly,

P. S. Construction is a small business concern within the meaning of Rule 60A- 2.005(4)(b), Florida Administrative Code, and is an MBE as defined in Section 288.703(2), Florida Statutes.

RECOMMENDATION

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

Development enter a Final Order granting P. S. Construction certification as a Minority Business Enterprise.

DONE and ENTERED this 17th day of June, 1996, at Tallahassee, Leon County, Florida.

CARLOYN S. HOLIFIELD, 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 17th day of June, 1996.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 96-0380

The following constitutes my specific rulings, pursuant to Section 120.59(2), Florida Statutes, on all of the proposed findings of fact submitted by the Respondent in this case.

Respondent's Proposed Findings of Fact.

1. Accepted and incorporated.

2-3. Rejected as not supported by the record.

1. Accepted and incorporated.

2. First sentence as a conclusion of law.

Second sentence rejected as not supported by the record.

COPIES FURNISHED:

Richard J. Hazen, Esquire

227 Pensacola Road Venice, Florida 34285

Joseph L. Shields General Counsel

Commission on Minority Economic and Business Development

107 West Gaines Street Collins Building, Suite 201

Tallahassee, Florida 32399-2000

Veronica Anderson Executive Administrator

Commission on Minority Economic and Business Development

107 West Gaines Street Collins Building, Suite 201

Tallahassee, Florida 32399-2000

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to the 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 consult with the agency that will issue the final order in this case concerning their 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: 96-000380

Orders for Case No: 96-000380