The Issue Whether Respondent engaged in construction contracting without a license as alleged in the Administrative Complaint; and, if so, the appropriate penalty.
Findings Of Fact DBPR is the state agency responsible for regulating the practice of construction contracting pursuant to section 20.165 and chapters 455 and 489, Florida Statutes. DBPR has jurisdiction over the unlicensed practice of construction contracting pursuant to sections 455.227, 455.228, and 489.13, Florida Statutes. At all times material to this matter, Mr. Johnson was the owner of J3. Mr. Johnson is not licensed, registered, or certified to perform construction contracting services in Florida. At the heart of this case is whether Mr. Johnson “offered, contracted, or performed regulated construction contracting services, including but not limited to, installation of a pool pump at 3905 Cardiff Place, Parrish, Florida.” Mr. Johnson, via J3, provided pool service, specifically pool cleaning to Mr. Sylvester. Mr. Sylvester thought the pool cleaning service was very good, and agreed that the two men (Mr. Johnson and Mr. Sylvester) had a “good customer-client relationship.” In April 2016, Mr. Sylvester hired Mr. Johnson to install a pool pump motor (motor) at a residence located at 3905 Cardiff Place, Parrish, Florida.5/ At that time, Mr. Sylvester did not know Mr. Johnson was not licensed to install a motor. On the installation day, Mr. Johnson left a voicemail message for Mr. Sylvester advising him that the motor had been installed, but it would not work. Mr. Johnson speculated that the electricity to the motor was turned off, and the switch was located in a closed garage. After arriving at the house, Mr. Sylvester turned the electricity on, the motor did not work, and Mr. Sylvester called Mr. Johnson. Mr. Johnson came to the pool location and worked on the motor. The motor started working. On April 7, 2016, after the motor was installed, Mr. Sylvester (or his wife) wrote a check to “J3 Pools & Pressure Washing” for $310.00 for the “motor.” A warranty was included with the installation; however there was no description of the type or length of the warranty provided.6/ In April 2016, Mr. Johnson sold his “pool route,” including the 3905 Cardiff Place location to another company. When contacted about the motor not working, Mr. Johnson advised Mr. Sylvester to contact the other company for the warranty work. Mr. Sylvester credibly testified that his only contact with the other company was shortly after the notification that Mr. Johnson had sold his pool route. Mr. Sylvester called the other company and “fired” them, as he wished to engage a different pool service. Approximately three to four months (July or August 2016) after the motor was installed, it stopped working. The pool turned green because the motor was not cycling on and off. This complaint was generated after the motor failed, and it came to light that Respondent was not licensed. Petitioner established that it incurred $217.09 in investigative costs while investigating this complaint. The evidence is clear and convincing that Respondent’s installation of the motor constituted the practice of construction contracting without a license. As a result, Respondent is guilty of unlicensed contracting, as charged in the Administrative Complaint.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation issue a final order that: Finds Respondent guilty of unlicensed contracting in violation of section 489.13(1), as alleged in the Administrative Complaint; Imposes an administrative fine of $3,000; and Requires Mr. Johnson to pay the Department’s investigative costs of $217.09. DONE AND ENTERED this 12th day of June, 2017, in Tallahassee, Leon County, Florida. S LYNNE A. QUIMBY-PENNOCK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 12th day of June, 2017.
The Issue At issue is whether Respondent committed the offenses set forth in the Amended Administrative Complaint and, if so, what penalty should be imposed.
Findings Of Fact Petitioner, the Department, is the state agency charged with the duty and responsibility of regulating the practice of contracting pursuant to Chapters 20, 455 and 489. At all times material to the allegations of the Amended Administrative Complaint, Stephen Wesley Williams, d/b/a Superior Design Construction, Co. Inc., was licensed as a Florida State Certified Building Contractor and a Florida State Certified Pool/Spa Contractor, having been issued license numbers CRC 045849 and CPC 56443 respectively. His licensure status for the Residential Contractor license is designated as "Current, Active." His licensure status for the Pool/Spa Contractor license is designated as "Delinquent, Active." On or about December 19, 2001, Respondent, doing business as Superior Design Construction Company, Inc., entered into a contract with Thomas and Denise Shinn (the Shinns) for construction of a residential swimming pool and pool enclosure to be located at 4050 Retford Drive, Jacksonville, Florida. The contract price was $40,000.00. Respondent obtained a building permit for the job in question as "Superior Design Const Co." The contract does not contain a written statement explaining the consumer's rights under the Construction Industries Recovery Fund. The Department's records establish that Respondent's Certificate of Authority for Superior Design and Construction as a Contractor Qualified Business was issued on May 9, 1997, but has been null and void since August 31, 1999. Construction on the project began around January 2002. Work on the project ceased in or around March 2002. The construction was substantially completed when work ceased on the pool. Mr. Shinn described it as "98 percent of it was finished except for the heater." Other than the heater not being installed, Mr. Shinn considered the few other items that were not completed as minor. The contract specified the installation of a heat pump called an Ice Breaker. This type of pump was specified because it can both heat and cool a pool, which is what the Shinns wanted. Mr. Shinn paid Respondent a total of $38,050 for the job. According to Mr. Shinn, he withheld the final payment of $1,950 because the Ice Breaker heat pump was not installed. According to Respondent, he did not put in the heat pump because he had not been paid the remaining $1,950. The portion of the contract entitled Contract Price & Payment Schedule requires a payment of $1,000 at contract execution and four subsequent payments: Payment #1 - 35% due at Excavation; Payment #2 - 30% due at Gunite; Payment #3 - 30% due at Deck; Payment #4 - 5% due at Plaster. The amount listed for payment number 4 is $1,950. Included in the General Terms and Conditions portion of the contract is the following: PAYMENTS & COLLECTIONS. Contractor reserves the right to stop work at any time past due payment occurs. Owner hereby expressly agrees to such work stoppage and any such work stoppage shall not constitute a breach of contract by contractor. If collection is required of any amounts due under the terms of this contract, or any subsequent approved schedule, owner expressly agrees that he shall be responsible for 18% interest and reasonable attorney's fees for trial, appeal and all costs. Mr. Shinn contacted Respondent several times regarding completion of the contract. While Respondent did not answer many of Mr. Shinn's calls, he did come to the Shinn's home at one point to resolve the situation. However, the heat pump issue remained unresolved. Out of frustration, Mr. Shinn contacted an attorney who wrote a demand letter to Respondent. On or about October 31, 2002, the City of Jacksonville, Department of Public Works, Building Inspection Division, sent a letter to Mr. Shinn notifying him that Respondent had not obtained any inspections for 180 days and that state law could consider this project abandoned. The letter suggested that he contact Respondent immediately to attempt to rectify this situation. Mr. Shinn continued to attempt to contact Respondent but was unsuccessful. Respondent did not notify the Shinns in writing that he was canceling the contract. He did not go to the city to cancel the permit. One work item that was not completed when Respondent ceased working on the job was an unfinished electrical socket near the pool. Mr. Shinn hired Thompson Electric to complete this electrical work that was contemplated by the contract. As a result, Mr. Shinn paid $207.50 to Thompson Electric to have this work completed. In January of 2004, Mr. Shinn contracted with Pinch- A-Penny to install a heater in the pool as one had never been installed. He paid Pinch-A-Penny $3,777.09 to install a pool heater. Mr. Shinn chose to install only a pool heater and not the heating and cooling system specifically referenced in the contract (Ice Breaker) because the Ice Breaker would have cost him $5,500 from Pinch-a-Penny. The amount needed to complete the job as contracted totaled was $5,707.50, which includes $207.50 for Thompson Electric and $5,500.00 for the Ice Breaker heat pump, which is what Pinch-a-Penny charges. Subtracting the $1,950 that the Shinns never paid Respondent leaves a balance of $3,757.50 that the Shinns paid or would have to pay to get the completed pool as contemplated by the contract. As of June 2, 2005, the Department's costs of investigation and prosecution, excluding legal costs, totaled $614.77. Respondent's construction company went out of business on a date that is not clear from the record although Respondent described this job as "about the last pool I built." Clearly, he was no longer in the construction business on the date of the hearing.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED: That the Construction Industry Licensing Board enter a final order imposing a $100.00 fine to be deposited in the Construction Industries Recovery Fund for a violation of Section 489.1425; issue a notice of noncompliance pursuant to Section 489.119(6)(e); impose fines in the amount of $500 for abandonment of a construction job; $500 for misconduct; and $100 for failure to put his license number on the contract; pay $3,757.50 in restitution; and require Respondent to pay $614.77 in costs of investigation and prosecution. DONE AND ENTERED this 11th day of August, 2005, in Tallahassee, Leon County, Florida. S ___________________________________ BARBARA J. STAROS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 11th day of August, 2005. COPIES FURNISHED: Brian Elzweig, Esquire Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202 Stephen Wesley Williams 3146 Brachenbury Lane Jacksonville, Florida 32225 Tim Vaccaro, Executive Director Construction Industry Licensing Board Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202 Leon Biegalski, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202
The Issue Whether petitioners have timely availed themselves of a clear point of entry into administrative proceedings on Mr. and Mrs. Rankin's application for a permit to build a dock and, if so, whether the permit application should be granted?
Findings Of Fact On April 12, 1982, Frederick W. Rankin applied for a dredge and fill permit to construct a dock six feet wide and 300 feet long in the waters of Bayou Chico in Escambia County, Florida. Paralleling the dock on either side of the outboard end, two rows of mooring pilings 19.5 feet distance from the dock were proposed in the application. On April 20, 1983, Mark N. Snowdon, an employee of the Department of Environmental Regulation (DER) inspected the site, and, in an official DER permit application appraisal dated April 23, 1982, reported: Two large support vessels (crew boats) are moored at a small pier immediately east of the site. A commercial marina facility i[s] located directly across the bayou (north) from the project site. Bayou Chico is approximately 0.25 mile wide at this point. DER Exhibit No. 4. Between the crew boats' dock (Gulfwater Marine) and the site proposed for the Rankins' dock is the mouth of a small embayment (the bayouette). The Holzbauers own a house and lot, separated from the Rankins' lot by a parcel less than 75 feet wide, that fronts on the bayouette. PERMIT ISSUES DER issued a permit on June 9, 1982, and work began on the Rankins' dock on June 12, 1982. On the same day, Mr. Holzbauer inquired of the men putting in pilings whether DER had issued a permit for the work, then telephoned DER and asked DER's Mr. Fancher the same question. Mr. Fancher told Mr. Holzbauer that a permit had been issued, which was the first Mr. Holzbauer was told of issuance of the permit. As far as the evidence revealed, no notice of intent to issue preceded issuance of the permit. On June 26, 1982, the Holzbauers received a letter from W. Richard Fancher on behalf of DER, dated June 24, 1982, in which he stated: It is my understanding that, until recently, you had no knowledge of this private dock project. If this is correct, you may consider this formal notice of the activity. Should you object to this permit, including any and all of the conditions contained therein, you may file an appropriate petition for administrative hearing. This petition must be filed within 14 days of the receipt of this letter. Further, the petition must conform to the requirements of Part III, Chapter 17-1 and Section 28-5.201, Florida Administrative Code (copies enclosed). The petition must be filed with the Office of General Counsel, Department of Environmental Regulation, Twin Towers Office Building, 2600 Blair Stone Road, Tallahassee, Florida 32301. If no petition is filed within the prescribed time, you will be deemed to have waived your right to request an administrative hearing on this matter. DER Exhibit No. 1. A copy of Mr. Fancher's letter to the Holzbauers was also sent to Mr. Rankin. On July 8, 1982, a letter from the Holzbauers to Ms. Tschinkel reached DER's Office of the Secretary, protesting issuance of the permit and alleging that the dock did not conform to permit conditions. 1/ This letter was referred to the Division of Administrative Hearings, whose Director entered an order, sua sponte, on July 28, 1982, that "[t]his matter is dismissed without prejudice." No. 82-1947. An amended petition dated August 4, 1982, reached DER's Office of the Secretary on August 9, 1982, and the Division of Administrative Hearings on August 20, 1982. No. 82-2314. NO PERMIT RELIANCE The dock has been continued to completion, at a cost of $11,000.00. As built, the dock veers out from shore at a more easterly angle than the permit purported to allow. Whereas the permit contemplated construction at an angle several degrees west of north, the dock has in fact been built at an angle about 15 degrees east of north. One result is that the end is some 90 feet east of the point contemplated by the permit. Although a DER employee testified that this deviation was "within reason," it is clearly a significant departure from what the permit putatively allowed. The Rankins only own 86 feet of bayou frontage. The mouth of the bayouette is no more than 110 feet across. The mooring pilings, moreover, have been set in two rows parallel to the dock not 19.5 feet on either side, but 40 feet from the west side of the dock and 30 feet from the east side. If any of the landowners on the bayouette (with one exception) tried to build a pier perpendicular to their shore line extending even half the length of the Rankins' dock, it would intersect the Rankins' dock. NAVIGATION While the dock does not seal off the bayouette, it makes access considerably more difficult, especially for Mr. Holzbauer who sails in and out in his 14 foot boat. The dock juts out from the point at the western edge of the entrance into the bayouette at such an angle that it comes within 70 feet of the eastern edge of the entrance into the bayouette. Petitioner's Exhibit No. The crew boats moored to the east of the Rankins' dock have overall lengths ranging from 65 to 85 feet and there were three of them moored at Gulfwater Marine last summer. When the crew boats are docked, the distance between the westernmost one and the most inboard mooring piling next to the Rankins' dock is 81.5 to 103 feet. Where traffic from Bayou Chico to Pensacola Bay passes under a bridge, the channel is only 80 feet wide and the crew boats sometimes hit the bridge. The greatest problem the Rankins' dock has caused the crew boats is making docking more difficult. It is not always easy to turn an 85 foot boat around in the wind. The root of the problem, according to Mr. Kingry, who owns the crew boats, is that a patch of slightly deeper water in this generally shoaled area has been cut or blocked by the Rankins' dock. Sooner or later, Mr. Kingry predicted, a crew boat will "wipe out" the Rankins' mooring pilings.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That the Department of Environmental Regulation deny the application for a dredge and fill permit for a dock located and aligned as this dock is. DONE and ENTERED this 27th day of April, 1983, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of April, 1983.
The Issue Whether Petitioner’s application for a certified building contractor’s license should be granted, and whether Respondent relied upon an unadopted rule in formulating its intended decision to deny Petitioner’s application, in violation of section 120.57(1)(e), Florida Statutes (2015).1/
Findings Of Fact Respondent, Construction Industry Licensing Board (Respondent or Board), is charged with administering chapter 489, Part I, Florida Statutes, relating to construction contracting, and issuing licenses to certified building contractors. Petitioner, Tony L. Phillips, applied to the Board for a certified building contractor’s license, pursuant to section 489.111, on March 3, 2015. Petitioner passed the required written examination and his application was scheduled for hearing before the Board on May 14, 2015. Building contractors are licensed to construct commercial buildings, and single-dwelling or multiple-dwelling residential buildings, not exceeding three stories in height. See § 489.105(3)(b), Fla. Stat. Section 489.111(2)(c)2. provides eligibility for licensure as a construction contractor. An applicant is eligible for licensure by examination if he or she has a total of at least four years of active experience as a worker who has learned the trade by serving an apprenticeship as a skilled worker who is able to command the rate of a mechanic in the particular trade or as a foreman who is in charge of a group of workers and usually is responsible to a superintendent or a contractor or his or her equivalent, provided, however, that at least 1 year of active experience shall be as a foreman. (emphasis added). Florida Administrative Code Rule 61G4-15.001(2)(a), provides the qualifications for certified building contractors, in pertinent part, as follows: In the case of applicants for certification in the general or building contractor categories, the phrases ‘active experience’ and ‘proven experience’ as used in Section 489.111(2)(c)1., 2., or 3., F.S., shall be defined to mean construction experience in four or more of the following areas: Foundation/Slabs in excess of twenty thousand (20,000) square feet. Masonry walls. Steel erection. Elevated slabs. Precast concrete structures. Column erection. Formwork for structural reinforced concrete. (emphasis added). In his application, Petitioner listed his experience as a foreman with Jacobs Engineering Group, Inc. (Jacobs), to meet the statutory and rule requirements for active experience in the trade. At all times relevant hereto, Jacobs was a construction engineering inspection consultant for the Florida Department of Transportation (FDOT). Jacobs performed the inspection of various design-build roadway projects undertaken by construction contractors on behalf of FDOT. Petitioner’s application included three specific projects to demonstrate Petitioner’s relevant experience: Wekiva Parkway, John Young Parkway Extension, and Baseline Road. The Wekiva Parkway project consisted of a four-lane highway, three category one bridges, a toll gantry, and equipment enclosure. The general contractor charged with construction of this project was the De Moya Group. Jacobs performed the construction engineering inspection role for FDOT. Jacobs’ role was quality control and inspection. Petitioner indicated in his application that he was the foreman “charged with overseeing the construction of the work on the bridges, roads and related structures.” Jacobs employed Petitioner as a foreman of Jacobs’ employees, who conducted inspections of construction work performed by the De Moya Group. Petitioner’s duties on the Wekiva project were to perform inspections. Petitioner did not perform construction duties, but rather inspected the construction performed to ensure compliance with the applicable FDOT and contractual requirements. While Petitioner’s inspection duties were vital to ensure the soundness of the facilities under construction, he did not perform construction work. The John Young Parkway project consisted of a flyover over State Road 441, including a large steel girder with integral pier box flyover bridge, sound walls, signalization, sidewalks, asphalt, and reinforced earth walls. The general contractor charged with construction of this project was Southland Construction. Jacobs performed the construction engineering inspection role for FDOT. Petitioner was project foreman for Jacobs on the John Young Parkway project. As such, Petitioner was responsible to ensure that the work was performed in accordance with the contract documents. Petitioner did not perform any construction work or supervise the construction workers employed by Southland Construction. As senior roadway inspector on John Young Parkway, Petitioner had the authority to question the work of the construction crew, and redirect work if it was not being performed per the contract documents or FDOT specifications. If necessary, Petitioner, through the chain of command at Jacobs, could stop work on the project in order to conform work to specifications. However, Petitioner did not perform any construction work on the project. The Baseline Road project consisted of small bridges, small animal crossings, noise walls, drainage structures and gravity walls, signalization, curb gutters, and sidewalks. The general contractor charged with construction of this project was C.W. Roberts Contracting. Jacobs performed the construction engineering inspection role for FDOT. On the Baseline Road project, Petitioner supervised the inspection of all animal crossing structures, as well as the relocation and installation of utilities, and the movement of traffic through the construction site. Petitioner admitted that all of the technical qualifications listed in his application were earned as a Jacobs’ employee performing the task of construction engineering inspection on these three projects. All of the experience Petitioner listed in his application was in the execution of projects performed on behalf of FDOT. None of the job descriptions which Petitioner listed in his work experience as road inspector, bridge inspector, utility coordination facilitator, environmental monitoring personnel, and administrator of maintenance of traffic contracts is considered “construction” by the Board. In fact, contracting work on roads, bridges, streets, and highways is exempt from regulation as construction contracting. See § 489.103(1), Fla. Stat. Thus, even the work performed by the FDOT contractors on those three projects was not “construction” subject to regulation by the Board. The single building or enclosed structure of any kind that Petitioner had any involvement with over the four years of work experience offered in his application was a one-story concrete enclosure to house toll-reading equipment. Petitioner did not supply any further information on this structure. It is clear from the record that Petitioner did not perform any of the construction work himself nor was he a foreman on any of the construction crews. All of the work that he performed concerned the inspection of work performed by construction contractors. Petitioner admitted that he has never built, or supervised the construction of, a single, two, or three-story, habitable, commercial, or residential building. Unadopted Rules Petitioner alleges that Respondent relied upon non- rule policy in formulating its decision to deny Petitioner’s application, in violation of section 120.57(1)(e). Section 120.57(1)(e)1. prohibits agencies from basing agency action that determines the substantial interests of a party on an unadopted rule. The denial of Petitioner’s application for a building contractor’s license affects Petitioner’s substantial interests. A “rule” is “an agency statement of general applicability that implements, interprets, or prescribes law or policy.” § 120.52(16), Fla. Stat. Agencies are required to adopt each agency statement defined as a rule by rulemaking procedures set forth in section 120.54. See § 120.54(1)(a), Fla. Stat. Petitioner alleges Respondent maintains three statements which constitute rules, pursuant to section 120.52(16), but which have not been adopted as rules, pursuant to section 120.54, and relied on those statements in formulating its decision to deny Petitioner’s application, in violation of section 120.57(1)(e). First, Petitioner maintains the Board denied his application because, on the jobs he submitted to demonstrate his relative experience, he could not “hire or fire” contractors and did not control the “means and methods” of construction. Because these terms are not used in the controlling statute or rule, Petitioner argues that the Board relied upon statements of general applicability which have not been adopted as rules.2/ During the hearing on Petitioner’s application, two of the seven Board members, Mr. Boyette and Mr. Cathey, questioned Petitioner about whether he had control over the “means and methods” of construction on the projects he listed in his application. Both Board members concluded that, on the projects Petitioner listed as experience relevant to the building contractor’s license, he did not control the “means and methods” of construction. “Means and methods” of construction is a term of art in the construction industry referring to the plans for executing the work on a particular project. The term encompasses scheduling different aspects of a project and directing the work of a construction crew and, sometimes, subcontractors. A construction foreman has the ability to direct a construction crew and subcontractors. Thus, having control of the “means and methods” of construction is integral to the job of a construction foreman. At the hearing on Petitioner’s application, one of the members, Mr. Boyette, questioned whether Petitioner had authority to hire and fire C.W. Roberts, the prime contractor on the Baseline Road project. A construction foreman may have the authority to hire and fire members of a construction crew, depending on the size of the job. The record reflects that Petitioner’s application was denied because he did not meet the requirements for “active experience” in construction, as defined in the rule, not because he was not empowered to hire and fire members of the construction crew. Second, Petitioner contends that the Board refused to accept an affidavit certifying his construction experience, which is contrary to the rule requirements, thus applied an unadopted rule in reaching its decision to deny his application. Rule 61G4-15.001(1)(a) provides that “[a]ctive experience in the category in which the applicant seeks to qualify shall be verified by affidavits prepared or signed by . . . an architect or engineer . . . who is licensed in good standing . . . listing chronologically the active experience in the trade, including the name and address of employers and dates of employment (which may be corroborated by investigation by the Board). Petitioner did not submit an affidavit with his application. Respondent does not contend Petitioner’s application was denied for failure to include the affidavit with his application. At hearing, Petitioner introduced an affidavit from Anthony Caruso, Petitioner’s supervisor at Jacobs. In the affidavit, Mr. Caruso certified that Petitioner “has more than four years proven experience as a foreman” in the following areas of construction work: [f]oundation/slabs in excess of twenty thousand (20,000) square feet, [s]teel erection, [e]levated slabs, [p]recast concrete structures, [c]olumn erection, and [f]ormwork for structural reinforced concrete (six of the seven criteria listed in rule 61G4-15.001). At hearing, Respondent’s expert, Paul Del Vecchio, a certified general contractor and former 12-year member of the Board, testified that the Board does not rely on affidavits to verify an applicant’s active experience. Mr. Del Vecchio related that the Board had been advised it had no statutory authority to require an affidavit and had discontinued accepting affidavits pursuant to the rule.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Construction Industry Licensing Board, enter a final order denying Petitioner’s application. DONE AND ENTERED this 10th day of March, 2016, in Tallahassee, Leon County, Florida. S SUZANNE VAN WYK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 10th day of March, 2016.
The Issue Whether Petitioner's application for certification as a minority business enterprise should be granted.
Findings Of Fact Based upon the testimony and evidence received at the hearing, the following findings are made: Spivey Utility is an active for-profit Florida corporation headquartered in Odessa, Florida. The company was formed in August 1986. Sandra Spivey (Mrs. Spivey) provided the initial capital for the company in the amount of $500. Since 1986, the company has grown significantly. Its gross revenues for 2001 were over $11 million. At the time Spivey Utility was formed, Mrs. Spivey was a full-time school bus driver and her husband worked for another excavating company. Between 1986 and 1991 (when she retired from school bus driving), Mrs. Spivey devoted several hours each weekday to running Spivey Utility, and on the weekends she worked as "grunt" (e.g., carrying conduit) for her husband on job sites. Since 1991, Mrs. Spivey has devoted all of her time to running Spivey Utility. The company currently employs 170 people, but it is still a "family business." All of the outstanding stock of Spivey Utility is owned by Mrs. Spivey and her five children. Mrs. Spivey is a white female. She owns 51 percent of the company's outstanding stock. Her daughter Collette Lazar (Ms. Lazar) is also a white female, and she owns ten percent of the company's stock. Thus, white females collectively own 61 percent of the outstanding stock of Spivey Utility. These ownership percentages have not changed since the stock was first issued in October, 1986. Mrs. Spivey's sons, all white males, own the remainder of the stock in the following percentages: Jim Spivey (15 percent); Steve Spivey (ten percent); Daniel Spivey (seven percent); and Tim Spivey (seven percent). Mrs. Spivey's husband, Verlyn Spivey, does not own any of the corporation's stock. The Schedule K-1 tax returns of Mrs. Spivey, Ms. Lazar, and Mrs. Spivey's sons demonstrate that their shares of the company's income is commensurate with their ownership percentages. Mrs. Spivey is the president and chief executive officer of Spivey Utility. She is also a member of the board of directors. Ms. Lazar is secretary of the company. She is also a member of the board of directors. Spivey Utility's bylaws provide that "[t]he business affairs of the corporation shall be managed by its board of directors." Bylaws at Article III, Section 1. Accord Section 607.0802. The bylaws further provide that the president shall supervise and control all of the business affairs of the corporation "subject to the control of the directors." Bylaws at Article IV, Section 5. The board of directors has seven members. In addition to Mrs. Spivey and Ms. Lazar, the board consists of Mrs. Spivey's husband and her sons. Thus, five members of the board are white males and only two members are white females. Five (of seven) directors are required for a quorum of the board of directors. As the holder of more than 51 percent of the company's outstanding stock, Mrs. Spivey has the authority under the bylaws to remove any of the directors and replace them with persons of her choosing. See Bylaws at Article II, Section 9 (stockholders entitled to one vote per share and directors elected by plurality vote); id. at Article III, Section 9 (directors may be removed with cause by the board or stockholders and without cause by the stockholders). However, Mrs. Spivey testified at hearing that she had no intention of removing her children as directors because Spivey Utility was a "family business." Over the years there have been disputes among the board members regarding company policy but, in the end, Mrs. Spivey always made the final decision. She testified that her final decision has never been overruled by the board and testified that she could not conceive of it ever happening. She further testified that, if it ever came down to it, she would overrule the board's decision overruling her through her ownership of the majority of the company's stock. Similarly, Ms. Lazar testified that Mrs. Spivey makes the final decisions, despite what the board might want to do because she owns the most stock. Spivey Utility is in the underground excavating business. Its articles of incorporation describe the nature of its business as "engag[ing] in all activities relating to the installation and maintenance of telephone cable and conduit." Articles of Incorporation, at Article II.a. Similarly, paragraph 8 of the MBE application described the nature of the company's business as "[u]nderground utilities, install manholes, place conduit, pull cable, fiber optic, directional boring, trenching & conventional boring." The largest portion of Spivey Utility's business is installing underground cable and conduit for telecommunications companies and utility providers such as Verizon and Tampa Electric Company. The company also has a water and sewer division which installs water and sewer lines, as well as a site preparation division which clears land for development. The water and sewer and site preparation divisions constitute only ten percent of the company's business. The company does not install or hook up "hot" wires, i.e., wires which are electrically charged. It only installs empty conduit and "cold" wires. The underground excavating work conducted by Spivey Utility does not require extensive technical training. At hearing, it was described as "glorified ditch digging." Mrs. Spivey's sons supervise the field operations of the various divisions within the company, and her husband oversees the bidding and contract work done by the company. Ms. Lazar provides administrative support for the corporation. Mrs. Spivey's sons each have more than 20 years of experience in the underground excavation industry. Her husband has almost 50 years of experience in the industry. Despite the delegation of supervisory authority of the field work to her sons, Mrs. Spivey remains actively involved in the day-to-day operations of the company. She is in direct communication with her sons on a daily basis to ensure that they have all of the equipment and resources they need to perform their work. They come to her when they need additional resources. Mrs. Spivey is 67 years old, but she is still comes to the office on a daily basis. She spends most of her time in the office dealing with financial matters and overseeing work in the shop where equipment is serviced and repaired. She generally does not spend time in the field, although she has done so when necessary. Mrs. Spivey has the authority to hire and fire employees and she has done so when necessary. She has also shifted employees, including her sons, from one division of the company to another to enhance the company's operation. Mrs. Spivey controls all of the financial aspects of the corporation. Her signature is required on all contracts to bind the corporation, including bids prepared by her husband or sons. Neither her sons nor her husband has the authority to bind the corporation. No financial decisions are made without Mrs. Spivey. The company's CPA testified that Mrs. Spivey is the only person in the company that has expertise in financial matters. Mrs. Spivey is the sole personal guarantor for Spivey Utility's lines of credit, indemnity agreements, and bonding line. Mrs. Spivey and Ms. Lazar sign nearly all of the checks written by the corporation out of the company's primary account with Sun Trust Bank. The authorized signatories for that account include, in addition to Mrs. Spivey and Ms. Lazar, Mrs. Spivey's sons: Steve Spivey, Daniel Spivey, Jim Spivey, and Tim Spivey. Only one signature is required on that account; no countersignature is required. The purpose of the sons being signatories on the account was for convenience in the event Mrs. Spivey or Ms. Lazar was unavailable. Although there is no formal limitation with the bank on the authority of Mrs. Spivey's sons to write checks in any amount, the evidence shows that the sons "know better" than to write checks for amounts in excess of $1,000 or so. It was apparent from her testimony that Mrs. Spivey has a keen understanding of the business operations of the company. Although she does not, and has never, performed the excavating work done by the company, she has been in the field to watch the work. She was able to explain and distinguish between the various types of excavating done by the company (e.g., jack and bore, directional boring, etc.) as well as the process and purpose of de-watering soil. She was also able to explain and discuss changes in the industry, including the need for specialized equipment and increased liability insurance when laying fiber optic cable. Mrs. Spivey's testimony also demonstrated her understanding of the company's operations. She is intimately familiar with the various divisions of the company and the services they perform and the clients they serve. Similarly, she demonstrated her familiarity with equipment and inventory of the company, such as the type, number, and cost of trucks, backhoes, and boring equipment owned by the company. Mrs. Spivey gained her knowledge of the excavating business from her husband who has been in the business for almost 50 years. As noted above, in the early years of the company, Mrs. Spivey often accompanied her husband on the job- site and assisted him as a "grunt" on the job. Spivey Utility has a certificate of authority from the CILB. The certificate is not a license to perform work. It only allows the company to do business if it has a qualifier. Spivey Utility has two qualifiers, Robert King in the areas of underground excavating and pollutant storage and Robert Burns in electrical. Neither of those individuals is a member of the Spivey family nor are they owners, officers, or directors of Spivey Utility. Spivey Utility obtained the certificate of authority when its water and sewer division was formed three years ago. Prior to that, Spivey Utility did not hold any state licenses or certificates. Neither Mrs. Spivey nor Ms. Lazar is registered or certified as a contractor by the CILB. Mrs. Spivey does have a commercial driver's license which authorizes her to drive vehicles, which weigh up to 26,000 pounds, including some of the company's dump trucks. The Department did not perform an on-site investigation of Spivey Utility in connection with its review of the company's MBE application. The Department's decision to deny the application was based solely on the information presented by Spivey Utility with its application and the supplemental information it provided on August 2, 2001, pursuant to the Department's request. The résumés included with Spivey Utility's MBE application and the supplemental job descriptions provided in the August 2, 2001, letter are not comprehensive and do not fully reflect Mrs. Spivey's understanding of or control over the management and daily operations of the company.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department issue a final order which grants Spivey Utility's application for certification as a minority business enterprise. DONE AND ENTERED this 18th day of March, 2002, in Tallahassee, Leon County, Florida. T. KENT WETHERELL, II Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of March, 2002.
Findings Of Fact On June 21, 1982, DGS issued specifications and contract documents as a basis for competitive bidding on a building construction project entitled "Rough Site Preparation and Grading for a Reception Center and Correctional Institution, Dade Co., Project No. DC-8037/8135," for the State of Florida, Department of Corrections. The specifications and contract documents were prepared by DGS' consulting architect/engineer ("A/E") Paragraph B-10 of the specifications provided that requests for correction or interpretation of the meaning of drawings and specifications or other bidding documents should be in writing, addressed to the A/E, and that all such interpretations and supplemental instructions would be in the form of written addenda to the bidding documents. In addition, subparagraph B-3 of the specifications for the project provided that each ". . . bidder is required to be familiar with all Federal, State and Local laws, ordinances, rules and regulations that in any manner affect the work. Ignorance on the part of the bidder will in no way relieve him from responsibility." Further, subparagraph B- 11 of the specifications provides as follows: Bidders are required, before submitting their proposals, to visit the site of the proposed work and completely familiarize themselves with the nature and extent of the work and any local conditions that may in any manner affect the work to be performed and the equipment, materials and labor required. They are also required to examine carefully the Drawings, Specifications and other Bidding Documents to inform themselves thoroughly regarding any and all conditions and requirements that may in any manner affect the work. By letter of July 6, 1982, Capeletti, as a prospective bidder, called to the attention of the A/E that an existing road near the north boundary of the property on which the project is to be constructed, which was designated on the site location plan drawing as Northwest 41st Street, was not a public road, but was, instead, a private road on private property. In fact, the road depicted as Northwest 41st Street on the plans and specifications is owned by Florida Power and Light Corporation, and has not been dedicated for public use. Capeletti has been granted an exclusive right-of-way by Florida Power and Light Corporation for use of that road. A fence with a gate installed by Capeletti at some time in the past blocks access to the road, and a sign on the gate advises visitors that the roadway is under private ownership. In its letter to the A/E Capeletti inquired whether another access road would be provided to the bidder ultimately awarded the contract. The A/E did not issue a written addendum in response to Capeletti's letter, nor were any prospective bidders notified in writing by the A/E of the absence of a public access road. Both Bergeron and Capeletti submitted bids on the project. Bids were opened on July 14, 1982, and the apparent low bidder was Bergeron, whose bid totaled $1,985,000. The amount of the second lowest bid was $2,390,000, and Capeletti's bid totaled $2,565,000, or $585,000 more than Bergeron's bid. The estimated DGS project budget for this project was established at $2,400,000 prior to the opening of the bids. Bergeron's bid was, therefore, $415,000 below the DGS estimate of the cost to do the project. By letter dated August 19, 1982, DGS gave notice to all bidders of its intent to award the contract to Bergeron. Within 72 hours after receipt of DGS' notice, Capeletti filed a Notice of Protest pursuant to Section 120.53(5), Florida Statutes, and within ten days thereafter filed its Petition for Formal Hearing. Capeletti's petition requested that the contract be awarded to Capeletti, since it was the only bidder having legal access to the project site, or, alternatively, that all bids be rejected and the project rebid. By letter dated September 22, 1982, DGS notified Bergeron and Capeletti that it was rejecting all bids, and further advised them that: We have determined that the specifications contained a mistake of material fact concerning access to the job site. Although there is no public road adjacent to the site and the state did not otherwise have access, the drawings indicated that a public street, Northwest 41st Street, adjoined the site on our north boundary. This was a misleading representation. When access is obtained, it may be at a different location and may affect the amount of the bid. The Department desires to give bidders an equal opportunity to bid on the project with knowledge of the access location after it is obtained. The Department proposes to rebid the project in the near future, combining the rough site preparation and the buildings into a single project, and you will be notified of the date when' specifications will be available. (Emphasis added.) After receipt of the DGS letter of September 22, 1982, Bergeron timely filed a Notice of Protest and its Petition in this cause, protesting the rejection of bids. The Capeletti and Bergeron petitions were consolidated for hearing purposes and for entry of a Recommended Order in this proceeding. Subparagraph B-22 of the specifications, entitled "Rejection of Bids," provides as follows: The Owner reserves the right to reject any and all bids when such rejection is in the interest of the State of Florida, and to reject the proposal of a bidder who the Owner determines is not in a position to perform the Contract. . . At the time bids for the proposed project were invited, opened and rejected, there was no existing public road that contractors could use to gain access to the building site, and there was no private road adjacent to the state-owned property. That situation remained the same at the time of final hearing in this cause on October 25, 1982. DGS apparently knew, however, prior to the filing of Capeletti's protest that there was no public access to the job site. The DGS Chief of Construction for the Bureau of Construction testified that, prior to the filing of the Capeletti protest: . . . it was my understanding that the Department of Corrections had worked with . . . [Dade] county, and the county was going to provide the access and make arrangements for the access along the road designated as the Florida Power and Light private road and the A. J. Capeletti private road and along Northwest 41st Street. As required by the contract documents, Bergeron, prior to submitting its bid, visited the site of the proposed project and observed the aforementioned gate blocking what was delineated on the project drawings as an extension of Northwest 41st Street. Upon further inquiry, Bergeron determined that the roadway depicted on the project drawings as an extension of North West 41st Street adjacent to the north boundary of the project was in fact not publicly dedicated. As a result, Bergeron, in formulating and submitting its bid, contemplated the construction of a temporary haul road of approximately 4,200 feet in order to access the project site. Bergeron apparently factored into its bid amount approximately $155,000 to $160,000 for the cost of building this temporary haul road. The project specifications did not call for the construction of either a temporary or permanent access road into the project area. Bergeron does not have definitive plans for the location of any such temporary haul road, and has indicated only that it would attempt to obtain permission from adjacent private property owners to use their property for that purpose. There is no evidence of record in this proceeding from which it can in any way be concluded that such an arrangement cannot be accomplished. The State of Florida, Department of Corrections, is under a federal court mandate to have the entire facility, of which this contract is merely a part, available for use in the near future. There is, however, no evidence of record from which the exact date of such required availability can be determined, nor any indication that accepting Bergeron's bid would adversely affect that availability. The contract documents provide for delay damages payable to the contractor in case of a delay for reasons other than changes in the work of 10 percent of the contract price per day, divided by the number of days in the contract period. One of the reasons advanced by DGS for rejecting all bids is that failure to do so could result in claims for damages by Bergeron in the event of any delay in obtaining access to the job site. This fear would seem unfounded for two reasons. First, although the contract is a 150-calendar-day contract, the contract time does not begin to run until DGS issues a Notice to Proceed. No contractual provision sets an exact time in which any such notice should issue. Accordingly, it may well be that either DGS or Bergeron can solve any access problem before issuance of the Notice to Proceed. Secondly, Bergeron submitted its bid with full knowledge that there was no public access available, planning instead to furnish its own method of accessing the site. Indeed, Bergeron still contended in this proceeding that it was willing to perform the obligations of this contract at the price it had bid, including providing its own access to the site. Under these circumstances, it would seem improbable that any claim for delay concerning access could be deemed meritorious. The contract drawings show an entrance road running in a north-south direction from the buildings to be constructed on the project site to the northern boundary of the property. The bid drawings show the length of the entrance road to be built on the site as actually 103 feet less than will be necessary to join that access road to any improved roadway which would run east- west to connect with the current termination point of North West 41st Street. There is no showing in the record that this discrepancy in the plans in any way affected the amount of any bid on the project, and, as such, is not considered to be a "material error. DGS has also contended that re-letting the bids on this project may result in a cost-saving by combining with it certain other portions of the overall project. Only one witness was offered by DGS on this point, and his testimony regarding potential cost-savings is not persuasive, primarily because it appears to be based entirely on speculation, and was offered without any record showing of design criteria for any such revised project upon which to base such a conclusion. The testimony in this case reveals that DGS has been involved in siting and designing this project since 1974. DGS has failed to establish that it is in the best interest of the State of Florida, at this late date, to reject a bid that was directly responsive to the bidding documents, in an amount $415,000 below DGS' own project estimate, on the basis of speculation that some apparently hypothetical change in project plans might possibly result in a cost- saving.
Findings Of Fact DOT has been engaged for some years in a program to improve U.S. Highway 1, which runs through the Florida Keys. The program has involved highway paving, and reconstruction of most of the bridges. The roadway and bridge construction projects require large amounts of fill material. DOT has experienced an increase in the cost of obtaining fill material in the Florida Keys. To lessen the cost of the fill material DOT is seeking to open a borrow pit on Dudjoe Key. The pit, and an adjoining roadway would cover approximately fourteen acres. DOT initially filed a permit application with DER, seeking approval to construct the pit. DER ultimately issued a notice of intent to deny the application on the grounds that reasonable assurances had not been given that the short-term and long-term effects of the proposed project would not violate water quality standards set out in DER's rules and regulations. DOT thereafter filed a request for variance from the water quality standards so that the pit could be permitted. This proceeding ensued. Petitioner is a Florida corporation which does business in Monroe County, Florida. Petitioner has engaged in numerous public road and bridge construction projects in the Florida Keys and in the selling of fill material for road and bridge construction projects. Petitioner currently owns and operates a "borrow pit" on Cudjoe Key. Petitioner's pit is located within one- half mile of DOT's proposed pit. The purpose of the DOT pit would be to provide fill material which the Petitioner currently provides from its Cudjoe Key pit. DOT originally asserted that operation of a state borrow pit would result in savings of nine million dollars. This assertion has been scaled down to three million dollars, and more recently to 1.5 million dollars. Basically, DOT asserts that fill from a state-owned pit would be cheaper because the operation costs would be approximately the same, but no royalty would need to be paid for the material. DOT sought to establish the amount of potential savings at the hearing through two kinds of analysis: First, DOT offered the testimony of its former cost estimator as to the costs per cubic yard of fill from a state-owned pit as opposed to fill from a private contractor pit; and second, DOT offered bid submissions that have been made by contractors in recently bid projects in the Keys, and which had alternative bids for state-owned and private contractor supplied fill material. DOT's estimator calculated that the State would save approximately 1.5 million dollars through operation of a state-owned borrow pit. The testimony, however, is not of probative value, and cannot serve as the basis for a finding to that effect. In the first place, many of the estimator's figures were determined through private conversations that he had with various unnamed contractors. This hearsay evidence is not cumulative nor corroborative of other evidence, and cannot therefore serve as the basis for a finding of fact (See discussion at Paragraph 2 of the Conclusions of Law, infra.). Furthermore, the estimator underestimated the heavy equipment that would be required to operate the borrow pit; underestimated the cost of the equipment; did not include insurance, social security, and overtime in labor costs; overestimated by twice the number of swings that a dragline would be able to make; and underestimated the cost of moving equipment to the site. Methodology used by the State's estimator would appear to be the best that is available to the State in making initial estimates as to the cost of proposed road-building projects. The State does not have the detailed cost information available to it that private contractors have. While useful for the purpose of making preliminary estimates of the cost of proposed projects, the methodology is not adequate to support a finding of fact based as it is upon hearsay, and containing numerous miscalculations. The second line of analysis offered by DOT to establish the amount of possible savings was a comparison of recent bids submitted by contractors. Special provisions drafted by DOT for the Park and Bow bridge projects using two alternatives for embankment or fill material. Alternate "A" in the bid called for state-furnished material. The low bidder on the project was Atlantic Foundation Company, Inc. Under Alternate "A", Atlantic bid a price of $9.35 per cubic yard for embankment material, and $12.00 under Alternate "B". This would have resulted in a total of $222,574.00 lest using the Alternate "A" bid on the Park and Bow projects. The second low bidder, MCC of Florida, Inc., bid $11.13 for material under Alternate "A", and $14.02 under Alternate "B". Alternate "A" would have been $247,752.00 cheaper under the MCC bid. Petitioner was the next low bidder, and it bid $10.05 per cubic yard under Alternate "A", and $10.25 under Alternate "B". Hardaway Constructors, Inc., was the only other bidder, and it offered $10.00 under Alternate "A", and $10.25 under Alternate "B". The potential savings in favor of Alternate "A" under all of these bids is reduced somewhat by clearing and grubbing costs which were bid separately by the contractors. Clearing and grubbing costs would actually have made Alternate "B" cheaper under the bids submitted by Petitioner and Hardaway. Clearing and grubbing costs would not, however, continue as a cost item in subsequent projects, because once clearing and grubbing is accomplished, it would not need to be done again. DOT seeks to apply bid differentials submitted for the Park and Bow Channel jobs to determine the potential saving the State could realize by using a state-owned landfill for the remaining road and bridge projects in the Keys. Approximately 402,039 cubic yards of embankment material will be needed to complete the remaining projects. Using the high differential between Alternates "A" and "B" submitted for the Park and Bow Channels (that submitted by MCC), which was $2.89 per cubic yard, the potential saving would be $1,161,892.00. Using the low differential (twenty cents per cubic yard as submitted by Petitioner), savings would be $80,407.00. Subsequent to the hearing, DOT awarded the Park and Bow Channel construction to the low bidder, Atlantic Foundation, Inc. The Alternate "B" proposal was accepted. DOT did not accept that proposal because of a preference to do that, but rather so that the otherwise advantageous bid could be accepted despite the pendance of this proceeding. During the hearing, bids were opened for two new road and bridge projects in the Keys: the Kemp and Torch-Ramrod Channel Projects. The apparent low bidder on these projects was the Petitioner. Petitioner bided a price of $11.00 for embankment material if provided by a private contractor, and $10.80 if provided from a state-owned pit for the Kemp project, and $10.40 and $10.20 respectively for the Torch-Ramrod Project. The differences between the two reflect differences in hauling distance. The price differentials for contractor versus state provided embankment material in projects that have already been let cannot be used to determine with any precision the amount of saving that would inure to the State through opening its own borrow pits. Potential savings depend upon many factors. The primary of these factors is which contractor happens to make the lowest bid for the project, and this in turn depends upon the contractor's cost figures for many items other than embankment material will receive the bid only if the total bid is lower than that submitted by other contractors. It is clear that opening a state-owned borrow pit would result in some savings. It appears that $10.00 per cubic yard is the lowest possible price that could be expected for contractor- provided fill material. It appears that state-furnished material could reach a price as low as $7.00 per cubic yard, although none of the bids submitted up to the time of the hearing reflected such a price. It appears that the highest potential saving would be less than the approximately one million dollars that would have been saved if the price differential reflected in the Atlantic Foundation bid on the Park and Bow Channel projects became the differential in all subsequent projects. It also appears that the saving would be somewhat more than the eighty thousand dollar saving that would inure if the price differential reflected in the Petitioner's bid on the Park and Bow projects remained consistent. Beyond these parameters, the evidence would not support a finding as to the amount of savings. The fourteen-acre site of the proposed borrow pit is presently comprised entirely of tidally inundated wetland areas. Approximately two-thirds of the area has average water depths up to six inches. The southeastern portion of the site is dominated by buttonwood, and red, black and white mangrove. All of these species are wetland indicator species under DER's rules and regulations. A large number of mollusks inhabit the area, and it is a feeding area for birds, and for deer. The area of the proposed borrow pit is within the Key Deer Refuge, which is managed by the Refuse Division of the United States Fish and Wildlife Service. There is now a stable herd from 350 to 400 Key deer, an endangered species, and they feed primarily on mangrove. There are 15 to 20 deer in the Cudjoe Key area. The deer do presently feed in the area of the proposed borrow pit. The proposed pit, including the access roads, would comprise approximately fourteen acres. It would be located landward of a berm so that there would not be a constant exchange of waters between the pit and surrounding areas. There would be an initial two-foot drop form the edge of the pit, and then a slope of five-to-one extending into the pit. A ten-to-one slope would be preferable because ultimately vegetation would be ore easily established in such a slope area. The term "Borrow pit" is actually a euphemism for a mining operation. Material would be extracted from the pit to be used as embankment material on the Keys road and bridge projects. The pit would ultimately reach a depth of more than thirty feet. Construction of the borrow pit would result in obliteration of approximately fourteen acres of a natural wetland environment in the Keys. All the flora and fauna presently on the site would be destroyed. During the time that the pit is being constructed and actively operated, violations of DER's standards for turbidity, lead, oils and greases, and transparency would be likely. Once the mining operation terminates, these short-term impacts would lessen; however, violations of the Department's dissolved oxygen standards would be likely as long as the pit exists. A viable biologic community could be established along the fringes of the pit, but in the deeper areas, low dissolved oxygen levels would be a limiting factor. Other mining operations in the Keys and elsewhere in Florida confirm the likelihood of dissolved oxygen violations. Loss of the fourteen acres of feeding ground for the Florida Key deer would be a significant loss in terms of preservation of that species. The proposed borrow pit is located adjacent to U.S. Highway 1. On the other side of the highway, there is a housing development. Operation of the borrow pit, especially blasting activities would inevitably prove a nuisance to residents of that area. One witness testified that blasting would likely cause damage to the residences, but this was not confirmed by competent, scientific evidence.
The Issue Whether or not Petitioner's response to Respondent's RFP 90 PY is responsive so as to be eligible for an award of "Wagner-Peyser 10% funds."
Findings Of Fact Section 7(b)(2) of the Wagner-Peyser Act, 29 U.S.C. s. 49f. is a federal grant source which permits ten percent of the sums allotted by Congress to each state to be used to provide certain services and functions within the discretion of the governors of the respective states. Included among such services are job placement services for groups determined by the Governor of Florida to have special needs as set forth in Subsection 7(b)(2) of the Wagner- Peyser Act. Petitioner Goal Employment is a private-for-profit Florida corporation engaged in the business of finding gainful employment for offenders, i.e., those persons who have been convicted of a crime but who are now out of prison seeking employment. On January 26, 1990, the Respondent, Division of Labor, Employment and Training (LET) of the Florida Department of Labor and Employment Security (LES), published a request for proposals (RFP) soliciting competitive sealed proposals for job placement programs in accordance with Section 287.057(3) F.S. and the federal grant source, commonly referred to as "Wagner-Peyser 10% funds." The response date and time for this 1990 RFP, a/k/a RFP 90 PY, was 3:00 p.m., March 23, 1990. Petitioner, Goal Employment, filed a timely proposal with Respondent, but the agency found Goal Employment's proposal to be nonresponsive and notified Petitioner of this determination in a letter dated April 4, 1990. That letter set out the grounds of the Respondent agency's determination as follows: This nonresponsiveness is due to failure to have proposed program activities that are legal and allowable, i.e., private for profit entities are not eligible to apply for Wagner-Peyser 7(b) funds. Petitioner had 72 hours from that notification in which to protest. It has been stipulated that Goal Employment's proposal would have been found responsive but for the exclusion of private-for-profit organizations from eligibility. By letter dated April 9, 1990, Petitioner gave written notice of receipt of notification of nonresponsiveness on Saturday, April 7, 1990 "around 10:00 a.m." and of its intent to file formal written protest. Date and time of Respondent's receipt of this letter of intent are not clear, but Respondent has not asserted lack of timeliness. Interim negotiations failed, and on April 17, 1990 Petitioner timely filed a formal written protest, which was "fast-tracked" at the Division of Administrative Hearings, pursuant to Section 120.53(5) F.S. In the immediate past, the Respondent agency had, indeed, permitted contracting with private-for-profit organizations, and Petitioner corporation had been a successful bidder in Respondent's 1988 and 1989 letting of similar contracts. Therefore, Petitioner's principal and president, Ernest S. Urassa, was thoroughly familiar with how these types of contracts had been bid in the past. Mr. Urassa's familiarity with the earlier agency bid policy and procedure was also the result of his prior employment by the agency. The RFP for 1989 did not prohibit private-for- profit organizations from participating. Goal Employment's contract pursuant to that prior RFP had not been completed as of the date of formal hearing, and at all times material to the 1990 RFP which is at issue in this proceeding, Mr. Urassa and Goal Employment coordinated the 1989 contract's compliance through an agency contract manager, Dan Faughn. On November 8, 1989, before the final draft of the 1990 RFP was finalized, Mr. Faughn informed Mr. Urassa by telephone that for the next program year, that is for the 1990 RFP, the agency would no longer permit private-for-profit company participation in Wagner-Peyser contracting. In response to January 11, 1990 oral inquiries from Mr. Urassa, the Chief of Respondent's Bureau of Job Training, Shelton Kemp, sent Mr. Urassa a January 16, 1990 letter as follows: The program year 1990 Request for Proposals prohibits private-for-profit companies from participating in Wagner-Peyser 7(b) contracting. The Wagner-Peyser Act, Section 7(b)(2), allows the governor of each state to provide, "...services for groups with special needs, carried out pursuant to joint agreements between the employment service and the appropriate private industry council, and chief elected official or officials or other public agencies or private nonprofit organizations,..." [Emphasis supplied] Those involved in the agency RFP process had reached the foregoing position after receiving advice from their General Counsel who, in turn, had relied on legal advice from the Governor's legal staff. Roy Chilcote, Labor Employment and Training Specialist Supervisor in Respondent's Contract Section, participated in the draft of the 1990 Project Year Request for Proposal (RFP 90 PY) which is at issue in these proceedings. Prior to drafting the 1990 RFP, Mr. Chilcote was unable to locate any written issue papers or legal opinions interpreting the following language contained in the Wagner-Peyser legislation: ...the Governor of each such State to provide-- (2) services for groups with specific needs, carried out pursuant to joint agreements between the employment service and the appropriate private industry council and chief elected officials or other public agencies or private nonprofit organizations; [Emphasis supplied] Up until that time, the issue of whether private-for-profit organizations could compete had not resulted in any specific opinion from legal personnel, however it is fair to say that lay personnel of the agency, including Mr. Urassa, who had previously been employed there, had based agency policy and earlier RFP requirements on lay interpretations either of the foregoing statutory language or of the Job Training Partnership Act's (JTPA) pre-amendment language, and that the lay interpretations had always permitted private-for- profit organizations to bid for Wagner-Peyser 10% funds just as they had competed for JTPA funds. Upon his own review of the statutory language, Mr. Chilcote, also a layman, did not share his predecessor's opinion, and he requested legal advice from the agency's General Counsel, and, in turn, received the legal interpretation that private-for-profit organizations were ineligible. Mr. Chilcote received this legal advice in the fall of 1989, and he accordingly drafted the 1990 RFP to preclude private-for-profit entities as bidders for Wagner-Peyser funds. The actual language contained in the 1990 RFP published January 26, 1990, as found on page 2 thereof, is as follows: All governmental agencies and nongovernmental organizations (both for profit and not for profit entities) may apply for funds under the JTPA Title I Program. All governmental agencies and not for profit nongovernmental organizations (private for profit entities are not eligible) may apply for funds under the Wagner-Peyser 7(b) program. Documen- tation supporting the legal structure of the proposer must be on file with the Bureau of Job Training before any contract resulting from a response to the RFP can be executed. [Original emphasis] Under the next major heading of the 1990 RFP (page 5 thereof), all potential bidders, including Petitioner, were advised: The Bureau of Job Training conducts a two step proposal review process. The first step is a technical review to determine if a proposal is responsive to the requirements of the RFP and the second step is a programmatic review of the relative merit of that proposal. The following is a description of the specific criteria that the Bureau will use to determine the responsiveness of a proposal. Each of the criteria listed must be satisfactorily addressed for a proposal to be determined responsive. A proposal determined nonresponsive will be given no further consideration. The proposer will be notified in writing of the nonresponsive determination and the reason(s) for the determination. No exception will be made to these requirements. Although the "specific criteria" listed thereafter do not make reference to the ineligibility of for-profit organizations, that contract specification was clearly noted and emphasized under the preceding heading. See, Finding of Fact 14, supra. Before publication of the 1990 RFP, Mr. Chilcote circulated the draft within the agency for comments. It was at this point, November 8, 1989, approximately 10 weeks before the 1990 RFP was published, that Mr. Faughn orally notified Mr. Urassa of its contents, that Mr. Faughn and Mr. Urassa began inquiries concerning the reinterpretation, and that Mr. Faughn and Mr. Urassa commented unfavorably on the new draft RFP because it precluded private-for- profit bidders. See, Finding of Fact 9, supra. The agency's position allowing Wagner-Peyser 7(b) funding for private- for-profit organizations prior to Program Year 1990 was based in part upon its earlier layman's understanding of the Congressional intent underlying the language of Section 7(b)(2). See, Findings of Fact 12-13, supra. In 1990, the agency altered its position so as to begin excluding for-profit organizations from eligibility for Wagner-Peyser money solely due to its reinterpretation of the statute by legal counsel. This reinterpretation was applied to prohibit the agency from contracting for the delivery of services with all private-for-profit organizations and has not been formally adopted as a rule pursuant to Section 120.54 F.S. Petitioner has been aware of this reinterpretation since November 8, 1989 (actual oral notice), was notified of it in writing on January 16, 1990 (Shelton Kemp's letter), and was again notified of it in writing on January 26, 1990 (1990 RFP publication). Petitioner did not file a formal rule challenge directly with the Division of Administrative Hearings. Prior to the March 3, 1990 bid/proposal deadline, the agency held three RFP workshops: February 20, 22, and 23, 1990. At no time during this process was Petitioner led to believe that private-for-profit entities were to compete for the 1990 RFP. Nonetheless, Petitioner, a private-for-profit entity, submitted its proposal timely before the March 23, 1990 bid closing and was rejected as nonresponsive. It thereafter proceeded solely with a bid protest. See, Findings of Fact 3, 4, and 5, supra.
Recommendation Upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Labor and Employment Security enter a final order ratifying its previous decision that the Respondent's 1990 bid/proposal is nonresponsive. DONE and ENTERED this 29th day of June, 1990, at Tallahassee, Florida. ELLA JANE P. DAVIS, 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 29th day of June, 1990. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-2667BID The following constitute specific rulings pursuant to Section 120.59(2) F.S. upon the parties' respective proposed findings of fact (PFOF): Petitioner's PFOF: 1-2, 15 Accepted. Accepted except for what is unnecessary. Accepted except for what is subordinate or cumulative. 5-6 Subordinate and cumulative. 7-10, 19 Accepted. 11-14, 16, 18 Rejected as mere legal argument. 17 Rejected as subordinate. Respondent's PFOF: 1-5 Rejected as mere legal argument. Accepted. COPIES FURNISHED: Thomas W. Brooks, Esquire Meyer and Brooks, P.A. 2544 Blairstone Pines Drive Tallahassee, Florida 32301 David J. Busch, Esquire Department of Labor and Employment Security Suite 131, The Montgomery Building 2562 Executive Center Circle, East Tallahassee, Florida 32399-0657 Hugo Menendez, Secretary Department of Labor and Employment Security Berkeley Building 2590 Executive Center Circle, East Tallahassee, Florida 32399-2152 Stephen Barron, General Counsel Department of Labor and Employment Security The Montgomery Building 2562 Executive Center Circle, East Tallahassee, Florida 32399-0657 =================================================================
