The Issue The issue in the case is whether the Petitioner’s certification as a Minority Business Enterprise (MBE) should be granted.
Findings Of Fact Locker Services, Inc., is a business owned by Kimberly Gates and her husband, James Gates. Kimberly Gates is a Caucasian female. There is no evidence that James Gates is within a protected classification under the minority business enterprise certification program. Kimberly Gates is the president of the corporation and owns 60 percent of the stock. James Gates is the vice-president of the corporation and owns the remaining 40 percent of the stock. The bylaws on record for Locker Service, Inc., establish that the Board of Directors directs the corporation’s business affairs. The Board of Directors consists of Kimberly Gates and James Gates. According to the by-laws, both Mrs. and Mr. Gates manage the business. Both Kimberly Gates and James Gates are authorized to sign checks on the corporate checking account. A General Indemnity Agreement underwrites the corporation’s bonding requirements. James Gates is a signatory on the agreement and is personally liable as an Indemnitor.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Florida Department of Labor and Employment Security enter a final order denying the Petitioner’s application for certification as a minority business enterprise. DONE AND ENTERED this 27th day of March, 2000, in Tallahassee, Leon County, Florida. WILLIAM F. QUATTLEBAUM 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 27th day of March, 2000. COPIES FURNISHED: Kimberly Gates, President Locker Service, Inc. 2303 Bayshore Drive Belleair Beach, Florida 33786 Joseph L. Shields, Esquire Department of Labor and Employment Security 2012 Capital Circle, Southeast Hartman Building, Suite 307 Tallahassee, Florida 32399-2189 Sheri Wilkes-Cape, General Counsel Department of Labor and Employment Security Hartman Building, Suite 307 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152 Mary Hooks, Secretary Department of Labor and Employment Security Hartman Building, Suite 303 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152
The Issue Whether Petitioner should be certified as a minority business enterprise by the Respondent, pursuant to Section 288.703(1) and (2), Florida Statutes and the applicable rules implementing the statute.
Findings Of Fact Petitioner is a Florida corporation, established in 1988 and is owned by Barbara Pedone (Pedone). Pedone is the corporation's president and sole stockholder. Michael Pedone, who is married to Barbara Pedone, of the applicant company, is not a minority under Florida law. Pedone has been involved in the construction business since the early 1960's in a administrative capacity. Pedone has been a part owner of certain construction businesses with her husband that involved residential insulation, as well as the installation of pipe and duct insulation material. Michael Pedone is employed by the applicant company as its Vice President. He runs the field operation. He does the field work for the applicant company, gathering materials, supervising the workers and working on proposals for new jobs. He consults on these matters with his wife. The applicant company is a family-run business with shared responsibilities between Barbara and Michael Pedone. Both Mr. And Mrs. Pedone make decisions concerning which jobs to bid on, what equipment to buy and whom to hire and fire. Hiring and firing duties are also shared with the field lead, Alex Uzaga. Pedone concentrates on the management end of the business, and Michael Pedone concentrates more on the technical and field work of the applicant company. The applicant is required to have a license in most of the jurisdictions in which it does business. Michael Pedone carries all the necessary licenses and is the qualifier for the applicant company. Barbara Pedone does not have a license and cannot qualify the applicant company. Barbara Pedone writes most, if not all, of the business checks for the applicant company, performs bidding functions, and administrative responsibilities, visits the various job sites, and, in recent months, has signed most of the job proposals. Barbara Pedone has never performed any work of installing or applying insulations or fireproofing materials. Barbara Pedone draws a weekly salary of $100. Michael Pedone draws a weekly salary of $1,000. The reason given for the disparity in salaries is that this allows Michael Pedone to accrue certain social security retirement credits. Barbara Pedone accrues her credits through her other employment. Barbara Pedone is employed full-time by Collier County and works no less than 40 hours weekly there. Other income and dividends of the corporation are deposited in a joint account. Barbara Pedone has full authority to sell the company or to change its corporate existence in any manner she may determine. Applicant has not established by competent evidence that Barbara Pedone exercises a real, substantial continuing ownership and control of the applicant corporation. Other than her minimum salary, no evidence was introduced to establish that Barbara Pedone receives income commensurate with the percentage of her ownership in the company. Barbara Pedone failed to establish that she shares in all of the risk through her role in decision-making, negotiations, or execution of documents and risk capital as either an individual or officer of the corporation.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the application for Minority Business Certification filed by Fire Stop Systems, Inc., on July 30, 1996, be DENIED. DONE AND ENTERED this 31st day of July 1997, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 31st day of July, 1997. COPIES FURNISHED: David E. Bryant, Esquire 215 Airport Road South Naples, Florida 34104 Joseph L. Shields Senior Attorney Commission on Minority Economic and Business Development Hartman Building, Suite 307 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2189 Douglas L. Jamerson, Secretary Department of Labor and Employment Security 303 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152 Edward A. Dion, General Counsel Department of Labor and Employment Security 307 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152 Veronica Anderson Executive Administrator Commission on Minority Economic and Business Development Collins Building, Suite 201 107 West Gaines Street Tallahassee, Florida 32399-2000
The Issue Whether Expedient Services, Inc. should be certified as a minority business enterprise by the Respondent, pursuant to Section 288.703(1) and (2), Florida Statutes and the applicable rules implementing the statute.
Findings Of Fact Petitioner is a Florida corporation founded prior to 1978 by five minority owners who purchased all of the stock originally issued. The primary business of the corporation was to provide janitorial services for corporate and governmental clients. In 1978, Harvey Hughes was hired as president and CEO. As part of his compensation package, Hughes purchased a minority interest in the corporation at par value. Hughes continues to serve in that capacity to the present day. Beginning after 1983, the five original stockholders, on separate occasions, sold their shares back to the corporation leaving Hughes as the sole stockholder with 833 shares outstanding. In the late 1980's, Hughes' son, Carl Hughes, joined the company as Vice-President and began the process of changing the type of services the corporation provided. He became a minority shareholder in 1991. Sherry Hughes has served as a member of the Board of Directors and Secretary/Treasurer to the Corporation for many years. In addition, she is employed by the Corporation as its Human Resources Director. In 1992, for past services rendered and no additional consideration, Horace Hughes transferred 450 shares, or 54 percent of the outstanding shares, to Sherry Hughes, his wife. Fifty-Four percent of the Petitioner/applicant is presently owned by Sherry Hughes, a woman. The Petitioner's current business is the repair and sales of computers and peripheral equipment. The majority owner, Sherry Hughes, is not a computer technician. She cannot diagnose a computer which needs repairs. The corporation hires computer technicians. Sherry Hughes does not hire technicians, as that duty has been delegated to the Service Manager, Vincent Schneider. Additionally, Schneider usually does the firing when needed. Payroll for Petitioner is done by an employee, Kathy Levann. Mrs. Hughes purchases office supplies and leaves the purchasing of technical supplies to a buyer. The company presently has three male Directors and two women Directors, including Sherry Hughes. All the Directors are authorized to sign corporate checks. For their work, Sherry Hughes is paid $5.00 hourly; Horace Hughes is paid $12-14 hourly and Carl Hughes is paid $12-15 hourly. All are stockholders. Horace Hughes, as President, signed the lease for the business location. Horace Hughes signed the affidavit for insurance on the business vehicles. Horace Hughes signed for a business loan in the financed amount of $70,302.71, both as President and Guarantor at SunTrust Bank. Horace Hughes is authorized by corporate resolution to borrow money on behalf of the corporation. Carl Hughes entered into the agreements with various computer dealers on behalf of the Petitioner. Sherry Hughes does not handle invitations to bid. Carl Hughes handles all invitations to bid, cost estimating and negotiations. Applicant has not established by competent evidence that Sherry Hughes exercises a real, substantial continuing ownership and control of the applicant corporation. Other than her salary, no evidence was introduced to establish that Sherry Hughes receives income commensurate with the percentage of her ownership in the company. Sherry Hughes failed to establish that she shares in all of the risk through her role in decision-making, negotiations, and execution of documents as either an individual or officer of the corporation.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the application for Minority Business Certification filed by Expedient Services, Inc. on April 7, 1995, be DENIED. DONE and ENTERED this 12th day of June, 1996, in Tallahassee, Florida. DANIEL M. KILBRIDE, 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 12th day of June, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-5067 The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on proposed findings of fact submitted by the parties. Proposed findings of fact submitted by Petitioner. Petitioner did not submit proposed findings of fact. Proposed findings of fact submitted by Respondent. Accepted in substance: paragraphs 1-18. COPIES FURNISHED: Horace Hughes, President Expedient Services, Inc. Post Office Box 5400 Titusville, Florida 32783-5400 Joseph L. Shields General Counsel Commission on Minority Economic and Business Development 107 West Gaines Street 201 Collins Building Tallahassee, Florida 32399-2000 Veronica Anderson Executive Administrator Commission on Minority Economic and Business Development Collins Building, Suite 201 107 West Gaines Street Tallahassee, Florida 32399-2000
The Issue The issue to be considered in this matter is whether Petitioner meets the requisite qualifications for certification as a minority business enterprise (MBE).
Findings Of Fact Otto A. Lawrenz, a Native American, is the sole owner of Petitioner, Mechanical Air Products (MAP), located in Jacksonville, Florida. Petitioner was certified from December 12, 1992, through December 12, 1993, as a minority business enterprise (MBE). Recertification for Petitioner as an MBE for the period December 12, 1993 through December 12, 1994, occurred without incident following application by Petitioner. Petitioner is a business which specializes in provision of heating, ventilation and air conditioning equipment to its customers. Following application in December, 1994, Respondent denied Petitioner's request for recertification as an MBE by letter dated January 6, 1995. Respondent's denial of Petitioner's recertification resulted from amendments to Respondent's definition of "[r]egular dealer" as set forth in Rule 60A-2.001(10), Florida Administrative Code, and Respondent's determination that Petitioner did not meet that definition. Petitioner does not own, operate or maintain a store, warehouse or other establishment. As stated by Otto A. Lawrenz in correspondence to Respondent and reaffirmed by him at the final hearing, Petitioner is: manufacturer representative type of business that buys directly from various suppliers and factories I [Lawrenz] repre- sent. The products are purchased from this company and shipped direct to customers ship to address. I [Lawrenz] do not stock these products for inventory. Petitioner is presently provided some storage space free of charge by another, unaffiliated business, for storage of some products.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered denying the application for certification as an MBE. DONE and ENTERED in Tallahassee, Florida, this 14th day of August, 1995. DON W. 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 14th day of August, 1995. APPENDIX In accordance with provisions of Section 120.59, Florida Statutes, the following rulings are made on the proposed findings of fact submitted on behalf of the parties. Petitioner's Proposed Findings Petitioner's post-hearing submittal consisted of documentation, not provided at the final hearing, dealing with Petitioner's heritage, and his arguments of the law relative to this case. Consequently, those matters are addressed as not relevant and argumentative for purposes of this proceeding. Petitioner may attack the rules applied to his case in a separate rule challenge proceeding. Respondent's Proposed Findings 1.-4. Accepted, but not verbatim. COPIES FURNISHED: Otto A. Lawrenz Mechanical Air Products P O Box 17746 Jacksonville, FL 32245 Joseph L. Shields, Esq. Commission On Minority Economic And Business Development 107 W Gaines St., 201 Collins Bldg. Tallahassee, FL 32399-2005 Crandall Jones Executive Administrator Commission on Minority Economic and Business Development 107 W. Gaines St., 201 Collins Bldg. Tallahassee, FL 32399-2005
The Issue The issue for determination is whether Respondent should certify Petitioner as a minority business enterprise ("MBE").
Findings Of Fact Respondent is the governmental agency responsible for granting or denying applications for MBE certification in accordance with Section 288.703(1), Florida Statutes,1 and Florida Administrative Code Rules 60A-2.001 and 60A-2.005.2 Petitioner is an applicant for MBE certification. Petitioner is engaged in the business of installing traffic signal devices. Petitioner is a closely held Florida corporation that was organized in 1990. Minority Ownership All of Petitioner's stock is owned by Ms. Burita Allen. Ms. Allen is a minority person within the meaning of Section 288.703(3) (the "minority owner" or "minority shareholder"). The minority shareholder is majority shareholder. She owns at least 51 percent of Petitioner's stock within the meaning of Rule 60A-2.005(2)1. Financial Risk And Control The minority ownership of Petitioner is real, substantial, and continuing within the meaning of Rule 60A- 2.005(3)(d)3. The minority owner provided all of the $100,000 used for Petitioner's initial capitalization on April 4, 1995.3 Petitioner was inactive from 1990 until it began its first job on May 11, 1995. Petitioner now has completed or started a total of eight jobs. The minority owner has knowledge and control of Petitioner's financial affairs. She has sole control of the day to day operations of the company and its profit and loss. She contributed all of its initial capital, writes the checks, and contracts with employees, subcontractors, and customers. Operating And Management Control The minority owner has operating control of Petitioner and is technically qualified to manage and operate Petitioner's business. She has generated significant growth for Petitioner. Operating revenues have increased from zero to $170,736.28 in less than two years. Petitioner has another $90,268.08 in work performed but not billed. Petitioner's clients include the Florida Department of Transportation, the United States Navy, and Nassau County, Florida. Petitioner has also performed jobs for private companies such as Georgia Pacific, Target, and Haynes & Sons Inc. Affiliation Petitioner's minority owner gained the knowledge and experience needed to operate Petitioner successfully as an employee of J.W. Buckholz Traffic Engineering, Inc. ("Buckholz Engineering"). Buckholz Engineering is a closely held Florida corporation owned by five individuals. Petitioner's minority owner is the majority shareholder in Buckholz Engineering. She owns 52 percent of the stock of Buckholz Engineering. Petitioner shares office space, equipment, and staff with Buckholz Engineering. Petitioner's minority owner allocates approximately 40 percent of the 70 to 102 hours she works each week to Petitioner. The remainder of her work week is allocated to Buckholz Engineering. The affiliation between Petitioner, its minority owner, and Buckholz Engineering does not impair the minority owner's ownership and control of Petitioner. Petitioner's minority owner is the majority shareholder in Buckholz Engineering. Petitioner's minority owner has an unimpeded legal right to share Petitioner's income, earnings, and other benefits in proportion to her stock ownership within the meaning of Rule 60A-2.005(2)(b). Neither the exercise of discretion by Petitioner's minority owner, her financial risk, nor her equity position in Petitioner is subject to any formal or informal restrictions within the meaning of Rule 60A-2.005(3)(a). There are no provisions in any purchase agreement, employment agreement, voting rights agreement, or the corporate by-laws that vary or usurp the minority owner's discretion. Buckholz Engineering assisted Petitioner in obtaining greater bonding limits than Petitioner could obtain on its own. Petitioner was capable of obtaining bonding on its own but increased the amount of bonding by adding Buckholz Engineering as co-applicant. Petitioner's minority owner is the majority shareholder in Buckholz Engineering. Buckholz Engineering is a professional service corporation that provides design services by licensed professional engineers. Buckholz Engineering utilizes professional liability insurance. It is not a construction company and has no need to be bonded. Petitioner derived its name in part to benefit from the goodwill of Buckholz Engineering. However, the two companies are not engaged in the same business. Buckholz Engineering is a professional engineering firm that performs professional services including the design of traffic control systems. Petitioner installs traffic signal devices. Unlike Buckholz Engineering, Petitioner does not need a professional engineering license to conduct its business. Electrical License Petitioner does not offer a trade or profession to the state which requires a trade or professional license within the meaning Section 287.0943(1)(3)1.4 Unlike the professional engineers in Buckholz Engineering, no state statute requires the minority owner to be licensed in a particular trade or profession in order for Petitioner to install traffic signals. Petitioner's minority owner satisfies all certification requirements that are generally required for Petitioner to conduct its business. The minority owner is certified by the International Municipal Signal Association ("IMSA") and by the American Traffic and Safety Association ("ATSA"). In a particular job, Petitioner's customer may require that a licensed electrician pull the necessary permits for the job or that a licensed electrician approve the job. This customer requirement comprises only a de minimis portion of Petitioner's business. Of the eight jobs contracted by Petitioner, only one customer has required the permit to be pulled by a licensed electrician. Petitioner can satisfy these occasional customer requirements by subcontracting with a licensed electrician at a cost that is a small portion of the job cost.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order and therein GRANT Petitioner's application for MBE certification. RECOMMENDED this 18th day of February, 1997, in Tallahassee, Florida. DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 18th day of February, 1997.
The Issue The central issue in this case is whether the Petitioner is entitled to certification as a minority business enterprise.
Findings Of Fact Iris Reed and her husband, Mark Reed, own and operate a business known as Reed Landscaping, Inc., the Petitioner in this cause. Mrs. Reed is an American woman and owns 60 percent of the subject business. Her husband owns the remaining 40 percent. The Reeds previously owned a lawn maintenance business in New York but moved to Florida several years ago and started doing business as "Landscaping and Lawn Maintenance by Mark." Eventually, approximately 1992, "Landscaping and Lawn Maintenance by Mark" changed its name to Reed Landscaping, Inc. As to Petitioner and all former entities, Mrs. Reed has held an office position with the company while Mr. Reed has operated the field crew or crews. Mr. Reed has the experience and expertise necessary to handle the work at each site for the business. On the other hand, Mrs. Reed has the office and management skills to direct the "paperwork" side of the business. This includes insurance matters and personnel for the office. Mrs. Reed is particularly active in this business since she put up the capital that largely funded the business enterprise. Although her personal financial investment is primarily at risk, creditors and bonding companies require both Reeds to sign for the company and to be individually obligated as well. Mrs. Reed serves as President/Treasurer of the Petitioner and Mr. Reed is Vice-President/Secretary. Both are authorized to sign bank checks for the company. Mr. Reed has formal training and education in landscape architecture and horticulture as well as extensive experience in this field. Mrs. Reed is responsible for many decisions for the company but relies on the opinions of others and delegates, where appropriate, duties to others as well. Among the delegated duties are: all field work for the company (delegated to Mr. Reed, another foreman, or to crews working a job); estimating or preparing bids (an estimator helps with bids); bookkeeping; contract review; and purchasing (some of which she does herself with input from others). As to each delegated area, however, the Reeds stress teamwork; that they are all working together for the common good of the company.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Petitioner's application for certification as a minority business enterprise be denied. DONE AND ENTERED this 16th day of May, 1996, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH, 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 16th day of May, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-5684 Rulings on the proposed findings of fact submitted by Petitioner: None submitted. Iris Reed on behalf of Petitioner submitted a letter summary of her position concerning the hearing which, if intended to be a presentation of fact, is rejected as argument or comment not in a form readily reviewable for either acceptance or rejection as required by rule. Rulings on the proposed findings of fact submitted by Respondent: Paragraphs 1 and 2 are accepted. Paragraph 3 is rejected as contrary to the weight of the credible evidence. Paragraphs 4 and 5 are accepted. COPIES FURNISHED: Joseph L. Shields Senior Attorney Commission on Minority Economic & Business Development 107 West Gaines Street 201 Collins Building Tallahassee, Florida 32399-2005 Iris F. Reed, Pro se 951 Southwest 121st Avenue Fort Lauderdale, Florida 33325 Veronica Anderson Executive Administrator Commission on Minority Economic & Business Development 107 West Gaines Street 201 Collins Building Tallahassee, Florida 32399-2005
The Issue The primary issue for determination is whether Petitioner should be granted certification as a Minority Business Enterprise (MBE). Determination of this issue requires resolution of other issues: Namely, whether Respondent's business qualifies as a Minority Business Enterprise (MBE) as defined by provisions of Section 288.703(2), Florida Statutes; and whether Respondent is a minority person as defined by provisions of Section 288.703 (3)(b), Florida Statutes.
Findings Of Fact Alfredo Ramos is the sole owner of the janitorial business known as "A Cleaning Crew." Ramos was born in Rio Hondo, Texas, on August 9, 1938, to Martin and Ada Salazor Ramos. Ramos' birth certificate, issued at that time denoting his race as white, was amended on May 21, 1992, to reflect that his color or race was Hispanic. Ramos' father was born in Texas. Ramos' mother was born in Oklahoma. There is no independent or verifiable knowledge of where any of Ramos' grandparents were born. All are now deceased. By letter dated June 5, 1992, Respondent denied Ramos' application seeking to have "A Cleaning Crew" certified as a MBE. The basis for denial recited in the letter was that the business did not meet the requirements of Section 288.703(2), Florida Statutes, in that Ramos, as sole proprietor, was unable to establish his status as a minority person within the definitional requirements of applicable Florida Statutes and administrative rules.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered denying Petitioner's application for certification as a Minority Business Enterprise. DONE AND ENTERED this 14th day of October, 1992, in Tallahassee, Leon County, Florida. DON W.DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Fl 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of October, 1992. APPENDIX The following constitutes my specific rulings, in accordance with Section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's Proposed Findings. No findings were submitted. Respondent's Proposed Findings. 1.-5. Accepted. COPIES FURNISHED: Alfredo Ramos d/b/a A Cleaning Crew P.O. Box 10293 Jacksonville, Florida 32207 Augustus D. Aikens, Esquire Deputy General Counsel Department of Management Services Suite 309, Knight Building Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 Larry Strong, Acting Secretary Department of Management Services Suite 307, Knight Building Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 Susan Kirkland, Esquire General Counsel Department of Management Services Suite 110, Knight Building Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950
Findings Of Fact Vedder and Associates Incorporated's (VAI's) application for minority certification dated January 22, 1992 was received by the Department of Management Services on January 27, 1992. Petitioner's application for minority certification was denied by the Department of Management Services in a letter dated May 22, 1992. VAI was established in October of 1991 and offers as its principal service "land surveying." VAI is licensed to do business in Florida and is fifty-one percent (51 percent) owned by Kathleen Vedder, a Caucasian female, and forty-nine percent (49 percent) owned by John Vedder her husband, a Caucasian male. Kathleen A. Vedder and John F. Vedder were the sole directors of the corporation at the time of certification denial, with Kathleen A. Vedder serving as president/secretary and John F. Vedder serving as vice-president/treasurer. On September 16, 1992, after the denial of certification, John Vedder resigned as a director of VAI. No business reason was offered for this decision. Kathleen Vedder, the minority owner, is presently the sole director of the corporation. As sole director, she represents a majority of the board of directors. She continues to serve as president and secretary. John Vedder continues to serve as treasurer. It is not clear if he still serves as vice- president. (See Findings of Fact 5-11 and 28-29). At all times material, Kathleen Vedder has owned 51 percent of the stock through a greater monetary investment than John Vedder, who owns 49 percent of the stock. At all times material, Kathleen Vedder has served as the principal officers, president and secretary. At all times material, Kathleen Vedder has made up at least 50 percent of the board of directors. Since September 16, 1992, she has made up 100 percent of the board of directors. At all times material, John Vedder has served as a principal officer, treasurer. Up until September 16, 1992, John Vedder made up 50 percent of the board of directors. Thereafter, he did not serve on the board. At all times material, Article VII of VAI's Articles of Incorporation have permitted an increase or decrease in the board of directors as permitted by the bylaws, but never less than one director. At all times material, Item III of VAI's bylaws have provided that corporate officers hold office at the "satisfaction" of the board of directors; that the president shall be the chief executive officer; and that subject to any specific assignment of duties by the board of directors, the vice-president, the secretary, and the treasurer act under the direction of the president. VAI was formed by the purchase of assets from the Perry C. McGriff Company, which had employed Kathleen and John Vedder. Kathleen Vedder began her career with the surveying firm of Keith & Schnars, P.A., in Fort Lauderdale in 1976. She was the administrative assistant to the President. In 1981 she and John Vedder moved to Gainesville to manage the Perry C. McGriff Company, a wholly owned subsidiary of Keith & Schnars. John Vedder handled the surveying aspects of the business, and Kathleen Vedder handled most of the management of the company other than the surveying portion, including purchasing, handling business accounts and financial affairs, client relations, insurance, and correspondence. This continued until 1991 when the assets of the Perry C. McGriff Company were sold to VAI. Kathleen Vedder now performs for VAI basically the same functions as she did for the predecessor company with certain additions. John Vedder served as the director of survey for the Perry C. McGriff Company which employed both Mr. and Mrs. Vedder prior to the formation of VAI. In his position as director of survey at Perry C. McGriff Company, he was responsible for all contracts and negotiations and coordination of personnel to ensure timely completion of contracts. His background by education, training, and experience is extensive in the technical applications to perform land surveying. The business of VAI essentially began on December 6, 1991. Prior to that date, husband and wife had discussed the purchase of the McGriff assets. Kathleen Vedder discussed the purchase of the business with her husband and informed him that she wanted to run the business. He accepted this relationship and her role as "boss" because he hated working in the office and wanted nothing to do with running the business. Kathleen Vedder contacted the old Perry C. McGriff clients and facilitated the transition from the old company to the new company. The Perry C. McGriff Company was purchased for $100,000 with a $15,000 down payment and the remainder to be paid over 7 years. Funds for the original purchase price of the assets were obtained by cashing Kathleen Vedder's 401K plan, two IRA's, and by loans against her life insurance policies for an investment of $57,185.62 by Kathleen Vedder and $25,682.25 of marital assets held with her husband, John Vedder. John Vedder participated in the negotiations to buy Perry C. McGriff Company. John Vedder provided input and expertise regarding the assets of Perry C. McGriff Company which were to be purchased, whether survey equipment was acceptable, and the vehicles to be purchased. John Vedder discussed and consulted with Kathleen Vedder regarding the financial aspects of the purchase of Perry C. McGriff Company. He discussed with her the starting salaries of employees to be hired/transferred to VAI, and the leasing and location of business premises for VAI and purchase of furniture. Kathleen Vedder established the corporate policies, the accounting procedures, the job costing, and the standard management practices of the new company. Kathleen Vedder, as VAI president, made all of the final decisions regarding implementation of the new business such as renting the office, moving the assets purchased from the old Perry C. McGriff Company, establishing lines of insurance, determining the manner and location of the survey records purchased, and hiring the staff. Kathleen Vedder and John Vedder made it clear to all of the employees from the beginning of the company that she was the "boss". The takeover of Perry C. McGriff Company by VAI was explained to former employees during a field visit by John Vedder. His explanation was made at Kathleen Vedder's direction and took place while these employees were already in the field, during a time of transition, in a spirit of damage control when Kathleen and John Vedder were concerned that rumors might affect the new company's ability to retain good personnel from the old company and over concern that some might have trouble working for a woman. Kathleen Vedder hired six employees initially from the old Perry C. McGriff Company. Kathleen Vedder set the initial pay scale for the employees of the company and maintained the documentation relevant to this function. The additional four persons hired by the company since it began were Robert Henderson, Tom Crossman, George Gruner, and Doug Zimmerman, each of whom were hired by Kathleen Vedder who interviewed them, who set their wages and benefits, and who described their job functions to them as new employees. VAI has a business license posted on its premises issued by the City of Gainesville, Florida, in the name of John Vedder, authorizing the performance of land survey services. VAI currently employs eight permanent employees and the qualifying agent is John F. Vedder, who serves as a principal officer, treasurer. He holds a land survey license issued by the State of Florida, Department of Professional Regulation, Land Surveying Board. In order to be qualified as a licensed land surveying corporation, a principal officer must be a licensed land surveyor. The participation of John Vedder or another duly-licensed land surveyor is required to satisfy the requirements of Chapter 472 F.S., for a qualifying agent. Under that statute, the qualifying agent must have a license as a land surveyor and hold a position as a principal officer in VAI. If John Vedder were to lose his professional land surveyor license, there would be three licensed land surveyors remaining with the company, and it would be possible for VAI to continue if one of these were designated as a principal officer. Kathleen Vedder holds no license or certification other than a notary public. In terms of any special needs or requests, such as medical needs, all employees are required to report to Kathleen Vedder. Kathleen Vedder earns $14.50 per hour. The survey party chiefs, including John Vedder, now earn $13.00 per hour. These amounts are commensurate with Kathleen Vedder's percentage of VAI ownership of fifty-one percent (51 percent). The evidence is conflicting as to whether another crew chief earned more than John Vedder in one year due to a higher rate of pay or more hours worked in that period. No one in the company draws any bonus, commission or has any particular insurance coverage as a benefit of employment. The company has not posted any dividends or distributed any proceeds from business investments or engaged in any profit sharing. The corporation has, as a risk of doing business, the liability connected with its $85,000.00 promissory note to Keith & Schnars, P.A. It also has the risk associated with premises liability, with motor vehicle liability, with general errors and omissions liability, and with professional liability. Kathleen Vedder has procured insurance to cover all these risks. These premiums are paid by the corporation. There has been no additional ownership interest acquired by anyone since the inception of the corporation. There are no third party agreements. There are no bonding applications. The company has not at any time entered into an agreement, option, scheme, or created any rights of conversion which, when exercised, would result in less than fifty-one percent (51 percent) minority ownership and minority control of the business by Kathleen Vedder. Kathleen Vedder controls the purchase of the goods, equipment, business inventory and services needed in the day-to-day-operation of the business. Kathleen Vedder expressly controls the investments, loans to and from stockholders, bonding, payment of general business loans, and payments and establishment of lines of credit. The corporate business account of VAI contains the signatures of John Vedder and Kathleen Vedder on the bank signature card. Only one signature is required to transact business. Of the 823 checks issued by VAI since it began, John Vedder signed one at Kathleen Vedder's direction when it was not possible for her to be in two places at once, and Kathleen Vedder signed 822 checks. Although he is treasurer, John Vedder professed to know nothing of VAI's finances and deferred to Kathleen Vedder in all matters of financing from the very beginning. Nonetheless, the corporate documents list the treasurer as the chief financial officer in ultimate charge of all funds. Kathleen Vedder has knowledge of only the minimum technical standards required for a survey. In her certification interviews, Mrs. Vedder did not know how to establish true north or how a line survey would establish true north. She lacks basic survey knowledge and could not identify Polaris as the north star or state the standard measurement (length of a chain) for a surveyor. Identifying Polaris is not particularly important in modern surveying. Kathleen Vedder is capable of doing the necessary paper search and telephone call regarding underground utilities for surveyors in the field. Kathleen Vedder has extensive experience in the production of a surveying product and is able to manage the surveyors who perform the technical aspects of the business. Upon acquisition of the assets and formation of the new company, Kathleen Vedder began directing the two field crews newly employed by VAI to the various projects and work which she had scheduled. This direction has primarily been in the timing and coordination of projects and is commensurate with some of the work previously done by John Vedder when he was director of survey for the predecessor company, Perry C. McGriff Company. (See Finding of Fact 14). Technical problems involving a particular site do not arise very often so as to require a discussion among the land surveyors of the company but if they do, the professional land surveyors jointly or singly make all technical surveying decisions. Surveys must be signed by a registered land surveyor pursuant to Chapter 472 F.S. John Vedder provides Kathleen Vedder technical advice, coordinates field crews' work, makes decisions pertaining to technical work which is not within Kathleen Vedder's abilities, consults with Kathleen Vedder once a week concerning the general financial picture of VAI, and does some job estimating and quality control. Kathleen Vedder rarely visits work sites in the field. Employees in the field report to John Vedder whenever they have a problem and report to Kathleen Vedder if the problem is in the nature of project coordination. John Vedder is responsible for training and working with employees and providing technical training required for the performance of land surveys. He does computer aided drafting (CAD) and provides technical assistance to the CAD operator, which Kathleen Vedder cannot do, however she works it afterward on her computer. Kathleen Vedder does not work in the field, and of the two, John Vedder performs the majority of work in the field. Kathleen Vedder defers to John Vedder to handle technical matters because he has more experience. Party Chief John Vedder supervises his crew. Party Chief Louis Crosier supervises his crew. Kathleen Vedder supervises Louis Crosier and John Vedder and a third crew chief when one is used, usually Robert Henderson. Kathleen Vedder established a fee schedule for the company and a method of formulating the estimates and bids which the company would propose to prospective clients. John Vedder is not knowledgeable in this area. When a job comes in, the prospective client initially contacts Kathleen Vedder. If a client calls requesting a survey, Kathleen Vedder does the research and provides the estimate or bid without further input from any surveyor if the survey requested is a standard routine survey. If the job is complex, Kathleen Vedder requires man hour estimates from two land surveyors, one of whom is often John Vedder. She takes these estimates and applies previous histories, experience, and adjustments in order to prepare the final bid or survey estimate. Once she has received the man-hour estimate, Kathleen Vedder reviews it, compares it with previous surveys, applies a job costs analysis to it, applies any other known costs to it, and presents the final estimate or bid. There is a difference between compiling the work hours necessary for the estimate and compiling the estimate itself. Kathleen Vedder has the ultimate responsibility for finalizing complex estimates and bids. Kathleen Vedder makes presentations as a part of her function which involve technical presentations of the survey services rendered by VAI. In the fourteen month period since the business began, Kathleen Vedder has given approximately eight presentations of a technical nature to prospective clients, including the Florida Department of Transportation (DOT). Kathleen Vedder is capable of complying with DOT bid specifications to submit material on a DOS disc. DOT has qualified VAI under its Disadvantaged Business Enterprise program. Petitioner's witnesses skilled in land surveying consistently testified that without Kathleen Vedder's skilled contributions to the firm, technical land surveying could be accomplished but the firm would not show a profit. Rule 13A-2.005(3)(d)(4), requires minority owners to have managerial, technical capability, knowledge, training, education and experience to make decisions regarding the business. In interpreting this rule, the Respondent agency relies on Barton S. Amey v. Department of General Services, DOAH Case No. 86-3954, (RO 3/5/87; FO 4/21/87), aff'd Fla. DCA February 11, 1988, No. 87-235. The agency has no further refinement by way of rule or policy which applies specifically to the land surveying industry. It does not require the minority owner to have a land surveying license per se. It does not require the minority business owner to have an extensive knowledge of surveying.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that a final order be entered certifying Vedder Associates, Incorporated as a Minority Business Enterprise. RECOMMENDED this 7th day of June, 1993, 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 7th day of June, 1993. APPENDIX TO RECOMMENDED ORDER 92-3763 The following constitute specific rulings, pursuant to S120.59(2), F.S., upon the parties' respective proposed findings of fact (PFOF). Petitioner's PFOF: The so-called "stipulated facts" is accepted, as stipulated, but not as to the inserted conclusion of law/argument. 1-19 Accepted except to the degree it is unnecessary, subordinate, or cumulative. 20-21 Accepted, but not dispositive, subordinate. Rejected as a conclusion of law or argument. Accepted, but not dispositive, subordinate. Rejected as a conclusion of law or argument. 25-33 Accepted as modified to more closely conform to the record, and to eliminate mere leal argument, conclusions of law, and unnecessary, subordinate, or cumulative material. Also testimony was to 823 checks. Rejected as stated as not supported by the greater weight of the credible evidence. Accepted, except to the degree it is unnecessary, subordinate or cumulative. Rejected as out of context, a conclusion of law, or argument. 37-46 Accepted, as modified, except to the degree it is unnecessary, subordinate, or cumulative. 47-48 Rejected as out of context, a conclusion of law, or argument. 49-53 Covered to the degree necessary in Finding of Fact 65, otherwise irrelevant and immaterial to a de novo proceeding under Section 120.57(1) F.S. 54-56 Accepted except to the degree unnecessary, subordinate, or cumulative. 57 Rejected as out of context, a conclusion of law, or argument. 58-60 Accepted except to the degree unnecessary, subordinate, or cumulative. Petitioner's "factual conclusions" are rejected as proposed conclusions of law not proposed findings of fact. Respondent's PFOF: 1-10 Accepted except to the degree unnecessary or cumulative. 11 Rejected as subordinate. 12-14 Rejected as stated as argument. Covered in Findings of Fact 27-30, absent argument, conclusions of law, and erroneous statements not supported by the greater weight of the credible competent evidence. Rejected as argument. Mostly accepted except to the degree it is unnecessary, subordinate or cumulative. However, the job estimating as stated is not supported by the record nor the argument of "day-to-day business." 17-19 Accepted as modified to conform to the record evidence, and except to the degree it is unnecessary, subordinate, or cumulative. 20 Rejected as argument. 21-22 Accepted but incomplete, irrelevant and immaterial in a de novo Section 120.57(1) F.S. proceeding. Also, the footnote is rejected as mere argument. 23-24 Rejected as argument. Accepted, but not complete or dispositive; unnecessary and cumulative. Accepted to the degree stated except to the degree unnecessary, subordinate, or cumulative. She also did more. Rejected as partially not supported by the record; other parts are rejected as unnecessary, subordinate, or cumulative. Accepted except to the degree unnecessary, subordinate, or cumulative or not supported by the record. Accepted in part and rejected in part upon the greater weight of the credible, competent record evidence. Rejected as argument. Rejected as stated as not supported by the greater weight of the credible, competent record evidence, also unnecessary, subordinate, or cumulative. Accepted except to the degree it is unnecessary, subordinate, or cumulative. Rejected as argument 34-35 Accepted in part. Remainder rejected as stated as not supported by the greater weight of the credible, competent record evidence, and as a conclusion of law contrary to Mid State Industries, Inc. v. Department of General Services, DOAH Case No. 92-2110 (RO 9/14/92). 36 Rejected as argument. 37-38 Accepted in part, and rejected in part because not proven as stated. Rejected as argument. Rejected as stated because out of context or not supported as stated by the greater weight of the credible, competent record evidence. Rejected as argument. Accepted, except to the degree unnecessary, subordinate or cumulative. Rejected as argument. 44-46 Rejected as subordinate. 47,(No #48),49 Accepted except to the degree unnecessary, subordinate, or cumulative. 50-55 Rejected as subordinate or unnecessary or as conclusions of law or argument. COPIES FURNISHED: Peter C. K. Enwall, Esquire Post Office Box 23879 Gainesville, FL 32602 Terry A. Stepp, Esquire Department of Management Services Koger Executive Center Suite 309, Knight Building 2737 Centerview Drive Tallahassee, FL 32399-0950 William H. Lindner, Secretary Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, FL 32399-0950 Susan B. Kirkland, Esquire Department of Management Services Koger Executive Center Suite 309, Knight Building 2737 Centerview Drive Tallahassee, FL 32399-0950
Findings Of Fact Mill-It Corporation is a Florida Corporation licensed to do business in the State of Florida. Ben Guzman, a stipulated member of a recognized minority group, is the President of the Petitioner Corporation. Additionally, Mr. Guzman owns 26 percent of the stock. The other stockholders are James E. Quinn (24 percent), Myrna Bortell (26 percent), and Edward T. Quinn, Jr., (24 percent). Ms. Bortell is also a member of a qualified minority. The Petitioner Corporation was formed in August, 1983. The first three months of its existence was spent obtaining the necessary licenses, permits, loans, and equipment. Mr. Guzman was primarily responsible for these activities. During this time period, Mr. Guzman was required to return to Chicago, his former home, to undergo surgery on his arm. During his absence, he delegated minimal authority to Edward T. Quinn, Jr., in order that the Corporation could continue to operate. During Mr. Guzman's absence, he maintained control of the Corporation through frequent telephonic communications with Mr. Quinn. Just before Mr. Guzman was required to go to Chicago for the surgery, Mill-It Corporation had taken delivery of its milling machine. The machine had been in the possession of Mill-It Corporation for only one week and Mr. Guzman had not had an opportunity to run the machine prior to his departure. Mr. Guzman relied on Mr. Quinn because they had known each other for approximately 25 years and Mr. Guzman was aware of Mr. Quinn's knowledge of the road building business and the necessary steps to establish Mill-It Corporation as a viable business in Florida. Mr. Guzman returned to Florida for the onsite inspection by an agent of the Respondent, but he was still under a doctor's care and was on various types of medication for pain. Mr. Guzman returned to Chicago for additional medical treatment following the onsite inspection, and he did not return to Florida until January, 1984. In January, 1984, Mr. Guzman began to completely learn the operation and mechanics of running and maintaining the milling machine and he assumed the complete responsibility for overseeing all the projects of the milling operation. Mr. Guzman originally relied upon the expertise of Edward T. Quinn, Jr. in the field of bidding, but Mr. Guzman always supplied the necessary figures and data for the bid. Mr. Guzman hired Edward T. Quinn, Jr., as his sales representative and estimator. After the brief learning period, however, Mr. Guzman began to totally supervise the bidding procedures and began directing Mr. Quinn to attend various bid lettings with the figures supplied by Mr. Guzman. At the time of the onsite inspection, Mill-It Corporation had completed only its organizational phase of becoming a business entity. In fact the milling machine was such a recent acquisition that during the onsite inspection Mr. Guzman had not had time to learn the technical aspects of the operation and mechanics of the machine. After the onsite inspection, Mr. Guzman assumed responsibility for operation of the milling machine and supervising the overall performance of the job. Additionally, James Quinn also operated the machine. Mr. Guzman has the authority to hire and fire employees, sign checks, correspond on behalf of the corporation, enter into contracts, and purchase equipment on behalf of the corporation. Cancelled payroll and vendor's checks, correspondence to and from the company, bonding contracts, insurance contracts, and corporate documents were all signed by Mr. Guzman. All major business decisions are made by Mr. Guzman after considering the advise of the other officers and stockholders. All day-to-day decisions are made by Mr. Guzman.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Mill-It Corporation's application for certification as a Minority Business Enterprise be GRANTED. DONE and ENTERED this 7th day of June, 1984, in Tallahassee, Florida. DIANE K. KIESLING 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 7th day of June, 1984. COPIES FURNISHED: RUSSELL H. CULLEN, JR., ESQUIRE P. O. BOX 1114 ALTAMONTE SPRINGS, FLORIDA 32701 VERNON L. WHITTIER, JR., ESQUIRE DEPARTMENT OF TRANSPORTATION HAYDON BURNS BUILDING, M.S. 58 TALLAHASSEE, FLORIDA 32301 PAUL A. PAPPAS, SECRETARY DEPARTMENT OF TRANSPORTATION HAYDON BURNS BUILDING TALLAHASSEE, FLORIDA 32301
The Issue The issue for consideration in this case was whether Petitioner, F & M Concrete Company, Inc., should be recertified as a disadvantaged business enterprise, pursuant to Chapter 14-78, F.A.C.
Findings Of Fact At all times pertinent to the issues herein, Petitioner, F & M Concrete Company, Inc., was a bridge and culvert construction company doing business in the State of Florida with principal offices in Plant City. Respondent, Department of Transportation, is the state agency responsible for certifying minority and disadvantaged business enterprises for bid award purposes with the Department. Prior to February 3, 1988, the Petitioner had been certified by the Department as a minority business enterprise, (women owned). Petitioner's stock is owned as follows: Jaretha Fletcher,. 43.3% Kathleen Fletcher,. 33.0% Jennifer Fletcher Prado,......21.67%, and Vesta Thomas,. 2.0%. All of the above, with the exception of Ms. Thomas, the retired bookkeeper, are members of the Fletcher family. Kathleen is W. Eddie Fletcher's mother, Jaretha is his wife, and Jennifer Fletcher Prado, is his sister. W. Eddie Fletcher is the President of F & M Concrete Company, Inc., and Chief Operating Officer. Kathleen Fletcher is Chairman of the Board of Directors. For approximately 15 years prior to the last 2 years, the stock owned by Jaretha Fletcher was owned in joint tenancy with W. Eddie Fletcher. Approximately 2 years ago, the ownership was transferred to Jaretha Fletcher alone. There is no evidence as to the consideration for that transfer. Mr. Fletcher claims he is not his wife's heir, and will not inherit her stock should she predecease him. Kathleen Fletcher, Mr. Fletcher's mother, has had tuberculosis for many years, and is incapable of taking a substantial, active part in the business. However, she comes to the office approximately once a week, and speaks with Jaretha by phone periodically. Jaretha is employed in the corporate office in a training capacity. Jennifer Fletcher Prado works for the Hillsborough County Road Department as an inspector, and in the course of her travels about the county, periodically sees Petitioner's crews at work. Though she does not interfere with or become involved in the supervision of those crews, if she sees something that causes her to question the crew's performance, she will phone Mr. Fletcher and demand an explanation. This is the extent of her participation in the operation of the business with the exception of serving as a member of the Board of Directors. When she retires from her position with the county, because of her experience, she will be eligible to work with Petitioner corporation but would have to spend some time gaining experience in the contracting end of the business before she could assume any managerial position. On November 1, 1988, Jaretha Fletcher, as Assistant Secretary of F & M Concrete Company, Inc., submitted the corporation's application for DBE certification. The application indicates that the firm was established in September, 1956, and is engaged in the business of building bridges, concrete pavements, curbs, sea walls, storm drainage systems, and culverts. It has 35 full time employees, of whom 57% are minority, and it serves the geographical areas incorporating numerous counties in the central part of the state. The firm is 100% woman owned in that the four individuals mentioned above own 100% of the 100 shares of stock authorized and issued. The firm is managed by a President, Vice President, Assistant Secretary, and Secretary-Treasurer. W. Eddie Fletcher is President. W. Randall Fletcher is Vice President. Jaretha Fletcher is Assistant Secretary, and Dori M. Keeler is Secretary- Treasurer. The Board of Directors is made up of the three Fletcher women. W. Eddie Fletcher received a salary of $33,800.00 in 1987; W. Randall Fletcher received $28,600.00; Dori Keeler received $20,800.00; Kathleen Fletcher received $13,520.00; Jaretha Fletcher received $7,800.00, and David L. Cox, General Manager, received $28,600.00. Question 18 of the application for recertification reflects that policy making and financial decisions are made by Kathleen Fletcher as Chairman of the Board, Jaretha Fletcher, and Jennifer Prado. Management personnel are hired and fired by the Board. Hourly personnel are hired and fired by Mr. Cox and the four job foremen. At question 19 of the application, Petitioner indicates that any decision to bid on a job is made by W. Eddie Fletcher as President and Jaretha Fletcher as Assistant Secretary. Since Mrs. Fletcher is currently serving the corporation as a trainee, her contribution to the decision making process must be minimal. Job estimating is done by W. Eddie Fletcher and David Cox. Purchases of equipment are approved by the Board upon the recommendation of W. Eddie Fletcher. Supervision of field operations is accomplished by Mr. Cox. Jaretha Fletcher, as Assistant Secretary, along with Randall Fletcher, shop foreman and Vice President; W. Eddie Fletcher, President; and Dori M. Keeler, Secretary-Treasurer, all sign the payroll checks. The application was mailed to the Department by certified package delivery on November 1, 1988 and was received by it on November 2, 1988. This was 94 days before the Petitioner's then current certification expired. On December 2, 1988, the Department mailed a letter to the Petitioner requesting additional information. This was 31 days after the date of receipt of the application, which exceeds the rule period of 30 days or requesting additional information. However, Petitioner responded to the request on December 7, 1988, one day after receipt. The additional information requested by the Department was forwarded to it by Petitioner on December 21, 1988, with the exception of two forms that had to be procured from the Department of State. After all the requested information was submitted, the Department set up an onsite review of the Petitioner's operation. According to Petitioner, though the rule governing MBE certification requires that the Department conduct the on- site review within 60 days of receipt of application, it was not done in this case until the 98th day after the application was submitted. The rule also states that approval or denial must be announced within a 90 day period from application. This was not done here until March 14, 1989, when Mr. Pete Davis, DBE Certification Coordinator for the Department, notified the Petitioner by certified mail that its application had been denied. Since the application was submitted on November 1, 1988 and received on November 2, 1988, March 14, 1989 terminates a period of 132 days from the date of receipt of application. Mr. Donnie Alford, an engineer, works for the Department's construction office and is a member of the DBE Certification Committee which considered Petitioner's application. This committee, which consists of three voting members and one nonvoting member, reviewed Petitioner's file. The application was reviewed by all committee members before a vote was taken and Mr. Alford, as a voting member, considered all the information in the file including such items as gross receipts, ownership, directorship, the officers, their salaries, the ethnic status and span of control of the ownership and other personnel, and all other matters mandated for consideration by Rule 14-78 F.A.C. Mr. Alford noted that Jaretha Fletcher, the majority stockholder, was paid the smallest salary of any salaried employee. This indicates to him that the rule in question, which dictates that salary should be consistent with ownership and job responsibility, was not followed. The committee also examined the resumes of the officers and directors with a view toward minority owners. Mr. Alford noted that prior to 1986, two years before the application in question, Mrs. Jaretha Fletcher had been a housewife, and he was concerned that her background did not qualify her to make business decisions. According to Mr. Fletcher, Jaretha signs all checks issued by the corporation though she does not prepare them. She has worked on the preparation of at least one bid. She has acted as signatory for insurance policies covering the operation of the business. She was a personal guarantor on the last capital loan taken out by the business. In addition, the company has developed a computer program which would enable Jaretha to prepare bids on all curb related projects. This, has not yet been implemented, and absent a showing of how much independent judgement and authority she would exercise, by itself, it is not particularly probative of anything. She is also assuming more responsibility in the bidding process though she is not yet qualified to prepare a bid. She has learned to take company owned equipment charges and the daily reports received from the field foremen to prepare reports for the comptroller. She works with the comptroller in determining who of the various business creditors get paid at any given time, and she has begun to serve as a liaison between the corporation and the various contractors who utilize its services. Further, she is in training to use the computer to prepare the weekly payroll. On the other hand, Jaretha is not qualified to go into the field by herself as a supervisor and by her own admission, is "afraid to drive outside the Plant City area." She works in the office daily from 8:00 AM to 3:00 PM except on those days when she has to be with her children. There is substantial evidence to indicate that the participation in business control and operation by Kathleen Fletcher and Jennifer Fletcher Prado is minimal, other than as members of the Board. The Board of Directors' primary function is to set policy for the operation of the Petitioner's business. The business is operated by W. Eddie Fletcher who is employed by the Board as President. He makes the day to day business decisions and decides what matters should be taken to the Board for ratification and approval. It is quite clear from the evidence as presented and all the permissible inferences and presumptions which may be drawn therefrom, that the operation and control of F & M Concrete Company, Inc., is exercised by W. Eddie Fletcher, and the Board of Directors does what he requests of it and provides what he asks. There is evidence, for example, that though the Board must provide for the purchase of major equipment, it "gives approval for whatever Eddie wants." In fact, two contracts, introduced by Respondent, which were prepared and executed by Petitioner with others in the operation of its business, for substantial sums and major projects, failed to reveal the signature or participation of any of the minority owners. All execution was accomplished by W. Eddie Fletcher on behalf of the corporation. After considering all the available information, the Department's committee voted to deny Petitioner recertification. The vote of the committee is not, however, binding on the Director of Administration who has final discretion to approve or disapprove the application for certification. Here the application for recertification was disapproved primarily because it was evident to the committee members and the Director of Administration, that the minority owners did not exercise the requisite amount of control over the operation of the business required under the intent and language of the rule governing minority business enterprise certification. The Department does not claim that the arrangement between the minority owners of the Petitioner corporation and Mr. Fletcher is in any way inappropriate or improper, nor does it deny that Jaretha Fletcher is now learning to participate in the operate in the operation of the business. However, the degree of control over the day to day operations of the business by the minority ownership, notwithstanding the propriety of the delegation of management to Mr. Fletcher, is not sufficient to qualify Petitioner as a minority owned business enterprise. Rule 14-78, F.A.C., allows management to be contracted out, but it does not allow delegation of the policy making function. Here, the committee and the Director of Administration concluded, and it is so found, that the owners of F & M Concrete Company, Inc. did not exercise sufficient control over the business to qualify it for certification. It is abundantly clear from the evidence adduced at the hearing, that Mr. Fletcher is, in fact, F & M Concrete Company, Inc. This conclusion is drawn from the fact that he is closely related by blood and marriage to the three principal owners; that prior to 1987 he owned 43.3% of the stock in the corporation jointly with Jaretha; that none of the principal owners other than Jaretha participate in the decision making process except as members of the Board; and that the Board does not engage in operating the business. Bids are not approved by the Board and operating decisions are within the exclusive province of the management team headed by Mr. Fletcher. Notwithstanding that the terms of the employment agreement between Mr. Fletcher and the Board provide that it may be terminated by the Board at any time for cause, from a pragmatic standpoint, with the Board's makeup being so closely related to Mr. Fletcher, the likelihood of this happening is remote. Instead, it becomes abundantly clear that the attempt to divest Mr. Fletcher from ownership of the corporation and demonstrate a bona fide minority owned and operated business enterprise is in form only and a sham and while the organization is in no way illegal or improper, it is not, in reality, a minority operated business so as to qualify for certification as such.
Recommendation Based on the foregoing findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that Petitioner, F & M Concrete Company, Inc.'s application for recertification as a disadvantaged business enterprise be denied. RECOMMENDED this 7th day of December, 1989, in Tallahassee, Florida. ARNOLD H. POLLOCK, 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 7th day of December, 1989. APPENDIX TO RECOMMENDED ORDER The following constitutes my specific rulings pursuant to s. 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: None submitted. FOR THE RESPONDENT: 1. - 6. Accepted and incorporated herein. & 8. Accepted and incorporated herein. 11.-13. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. 17.&18. Accepted and incorporated herein. 19.-21. Accepted and incorporated herein. COPIES FURNISHED: W. Eddie Fletcher President F & M Concrete Company, Inc. Post Office Box 938 Plant City, Florida 34289-0938 Thomas H. Bateman, III, Esquire General Counsel DOT 562 Haydon Burns Bldg. Tallahassee, Florida 32399-0450 K.N. Henderson, P.E. Secretary Haydon Burns Building 605 Suwanee Street Tallahassee, Florida 32399-0450 Attn: Eleanor F. Turner, M.S. 58 Ruth B. Dillard, Esquire Department of Transportation 605 Suwanee Street, M.S. 58 Tallahassee, Florida 32399-0458 =================================================================
