The Issue Whether Respondent discriminated against Petitioner based on his race/national origin and retaliated against him for engaging in protected activity in violation of section 760.10, Florida Statutes,1 when his employment was terminated on October 27, 2009, and, if so, the relief to which Petitioner is entitled.
Findings Of Fact Petitioner, an Hispanic male, was hired by WDW as a groundskeeper on March 4, 2002. WDW promoted Petitioner to the position of gardener on July 26, 2006, which was the position he held when WDW terminated his employment on October 27, 2009. Petitioner's employment was subject to the terms and conditions of a collective bargaining agreement. At the time of his hire, Petitioner was provided with a copy of WDW's policy manual that covered all WDW employees. WDW's policy manual was in effect at all times relevant to this proceeding. WDW had a policy that prohibits an employee from engaging in harassing behavior and/or discriminating against someone on the basis of race, national origin, and/or gender. WDW had a policy that prohibits an employee from retaliating against other employees who engaged in protected activity. WDW had a policy that prohibits employees from threatening guests or co-workers with violence. WDW had policy that prohibits employees from creating a hostile work environment. Petitioner's job responsibilities as a gardener pertained to the maintenance of Osprey Ridge. Petitioner's assignments included mowing greens and tees, raking sand bunkers, and repairing areas that had been washed-out by a rainstorm. WDW hired Tami Jones (Ms. Jones) as an assistant superintendent for Osprey Ridge on August 2, 2004. Ms. Jones had supervisory responsibility of a staff of 25 that included Petitioner. On June 25, 2005, Ms. Jones directed Petitioner and a co-worker, Chris Meeks, to repair the lips of a sand bunker that had been damaged by a rainstorm. In response to this direction, Petitioner claimed that Ms. Jones was discriminating against him. Petitioner contended that Ms. Jones assigned him more difficult tasks than the tasks assigned non-Hispanics because he was Hispanic. Ms. Jones contacted Raymond Vazquez (Mr. Vazquez), who spoke fluent Spanish, to come over to where she was talking to Petitioner to make sure that there was no language barrier and to make sure she properly understood Petitioner's allegations. As required by policy, Ms. Jones reported Petitioner's complaint to WDW Human Resources. WDW Human Relations investigated Petitioner's 2005 complaint. At the conclusion of the investigation, Ms. Jones received no discipline. On October 15, 2009, Petitioner got upset with a co- worker, Augusto Baque (Mr. Baque), and told him that he would hit him if he (Mr. Baque) were not so old. Mr. Baque reported the incident to Mr. Vazquez. Mr. Vazquez did not immediately report the incident to anyone. The day after Mr. Baque reported the incident to Mr. Vazquez, Mr. Baque asked Mr. Vazquez who he had told about the incident. It was after that inquiry that Mr. Vazquez decided he needed to report the incident to his superiors. On October 21, 2009, Mr. Vazquez told Mr. Karns, who was then the superintendent of Osprey Ridge, and Ms. Jones about the October 15 incident. Ms. Jones called John Michael Davis (Mr. Davis), Labor Relations Manager for WDW, who advised her to call security. Thereafter, Mr. Karns immediately contacted WDW security. On October 22, Marlene Saloman and Frank Regiacorte (the investigators) from the WDW Security Workplace Violence Unit went to Osprey Ridge to conduct an investigation of the October 15, 2009, incident. The investigators interviewed Mr. Baque, who told them that Petitioner had twice threatened to hit him and then said he would not do so because Mr. Baque was so old. The investigators also interviewed Petitioner, who admitted making the statements described by Mr. Baque. The investigators provided Mr. Karnes with a copy of the statements they had taken. Mr. Karnes suspended Petitioner's employment after he reviewed Petitioner's statement. The investigators provided to Mr. Davis an investigation report that included the statements from Petitioner and from Mr. Baque. On October 27, 2009, Mr. Davis concluded that Petitioner had exhibited threatening and hostile behavior in the workplace by the statements he made to Mr. Baque on October 15, 2009. In accordance with WDW policy and past practice, Mr. Davis recommended to Mr. Karns that Petitioner's employment be terminated. Mr. Davis was not aware of Petitioner's race/national origin at the time he recommended that Petitioner's employment be terminated. Mr. Davis was aware of at least four other WDW employees who engaged in similar behavior during 2009 and were separated from the company. On October 27, 2009, Mr. Davis consulted with Mr. Karnes and gave him his recommendation regarding Petitioner's employment. Mr. Karnes immediately terminated Petitioner's employment. Mr. Karnes told Petitioner that his employment was terminated because he had violated the company policy that prohibits threatening guests and co-workers and creating a hostile work environment.3 Ms. Jones had no input in the decision to terminate Petitioner's employment.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Florida Commission on Human Relations enter a final order that dismisses Petitioner's claims of discrimination. DONE AND ENTERED this 1st day of February, 2011, in Tallahassee, Leon County, Florida. S CLAUDE B. ARRINGTON 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 1st day of February, 2011.
The Issue As the parties have stipulated, the issue in this case is whether Respondent Florida Housing Finance Corporation (the “Corporation”) properly interpreted Rule 67-48.032(2), Florida Administrative Code, and the corresponding provisions on the same subject found in paragraph 2, at page 2, of the Corporation’s 2000 Qualified Allocation Plan (collectively, the "Instructions"), when it applied the Instructions to determine the substantial interests of Petitioners and Intervenors.
Findings Of Fact The evidence presented at final hearing established the facts that follow. The Corporation and Its Duty to Allocate Federal Income Tax Credits The Corporation is a public corporation that administers governmental programs relating to the financing and refinancing of housing and related facilities in Florida. It is governed by a nine-member board composed of eight persons whom the governor appoints plus the Secretary of the Department of Community Affairs, sitting ex-officio. Among other things, the Corporation is the state's designated "housing credit agency" as defined in the Internal Revenue Code. As such, the Corporation has the responsibility and authority to establish procedures necessary for the allocation and distribution of low-income housing federal tax credits, which are created under and governed almost entirely by federal law. These tax credits, which are designed to encourage the development of low-income housing for families, provide a dollar-for-dollar reduction of the holder’s federal income tax liability and can be taken each year, for up to ten years, that the low-income housing project for which the credits were awarded continues to satisfy Internal Revenue Code requirements. Housing tax credits are allotted annually to the states on a per capita basis and then awarded, through state-administered programs, to developers of rental housing for low-income and very low-income families. Once awarded, there is a market for these tax credits; consequently, a developer may sell them at a discount to obtain immediate cash for its project. As a populous state, Florida receives between $18 million and $18.5 million in federal tax credits each year. The Corporation allocates the state's share of tax credits to eligible recipients pursuant to a Qualified Allocation Plan ("QAP") that federal law requires be prepared. The QAP, which must be approved by the governor, is incorporated by reference in Rule 67-48.025, Florida Administrative Code. In accordance with the QAP, the Corporation employs various set-asides and special targeting goals that play a substantial part in determining which applicants will receive tax credits in a particular year. While targeting goals are "aspirational" in nature, set-asides are relatively inflexible. Thus, special targeting goals may be met if credits are available. In contrast, credits that were reserved (or "set- aside") for specific project types will be awarded to applicants whose developments fall within the defined set-aside. The set-asides that have spawned the instant dispute are the Geographic Set-Asides and the Non-Profit Set-Aside. The Geographic Set-Asides require that a pre-determined portion of the available tax credits be awarded to applicants in each of the following county groups: Large County, Medium County, and Small County. In 2000, the allocation percentages for these groups were 64%, 26%, and 10%, respectively. The Non-Profit Set-Aside, which is a function of federal law, requires that at least 12% of the credits be awarded to non-profit applicants. None of the other set-asides is either at issue here or affects the analysis or outcome. The same is true of the special targeting goals. For simplicity's sake, therefore, special targeting goals will be ignored in the discussion that follows, and it will be assumed, unless otherwise stated, that the Geographic and Non-Profit Set-Asides are the only factors (besides merit) that affect the Corporation's award of tax credits. The Petitioners and Intervenors (Collectively, "Petitioners") Lakesmart is a Florida limited partnership which has as one of its general partners a non-profit corporation. In the 2000 application cycle, Lakesmart applied to the Corporation for an award of tax credits from the Medium County allocation. Lakesmart is a "Non-Profit Applicant" for purposes of the Non- Profit Set-Aside. RPK is a Florida limited partnership. In the 2000 application cycle, RPK applied to the Corporation for an award of tax credits from the Large County allocation. For purposes of the Non-Profit Set-Aside, RPK is a "for-profit Applicant." Meadow Glen and Coral Village are Florida limited partnerships. Each has a non-profit corporation as one of its general partners. Both applied to the Corporation in the 2000 application cycle for an award of tax credits from the Medium County allocation. Each is considered a "Non-Profit Applicant" for purposes of the Non-Profit Set-Aside. Evaluation, Ranking, and the Tentative Funding Range To distribute the finite amount of tax credits available each year, the Corporation has designed a competitive process whereby potential recipients file applications that the Corporation grades according to selection criteria set forth in the QAP. Points are assigned based on compliance with these criteria. At the end of the evaluation process, each applicant that met the threshold requirements will have earned a final score that determines its rank in terms of relative merit, with higher-scored projects being "better" than lower-scored projects. Because of the set-asides, however, credits are not awarded simply on the basis of comparative scores. Instead, the Geographic Set-Asides require that the applicants be sorted and ranked, according to their scores, within the Large County, Medium County, and Small County groups to which they belong and from whose credit allocations the successful applicants will be funded. As a result, therefore, if the several applicants with the three highest scores in the entire applicant pool were all in the Large County group and the applicant with the fourth highest score were in the Small County group, for example, then the latter applicant would be ranked first in the Small County group. This means, to continue with the example, that if the first- and second-ranked projects in the Large County group were to exhaust the credits allocated to that group, then the applicant with the third highest score overall would not be funded, while the applicant with the fourth highest score in the applicant pool (but ranked first in a county group) would be funded. 16/ After the Corporation has sorted the applicants by county group and ranked them, within their respective groups, from highest to lowest based on the applicants' final scores, it draws a tentative funding line within each group. Applicants above these lines are within the tentative funding range and thus apparently successful. Conversely, an applicant below the tentative funding line in its county group will not receive tax credits unless, to satisfy a set-aside or fulfill a special targeting goal, it is moved into the funding range. In the 2000 application cycle, a preliminary outcome which had occurred only once before, in 1997, happened again: the aggregate of credits requested by the non-profit applicants within the tentative funding range did not amount to the Non- Profit Set-Aside percentage — 12% in 2000 — of total available credits. Therefore, the Corporation needed to elevate as many apparently unsuccessful non-profit applicants into the funding range — and concomitantly to remove as many apparently successful for-profit applicants from the funding range to make room for the favored non-profit applicant(s) — as necessary to fulfill the 12% quota. An Aside on Categorical Ranking The separation of applicants into three groups according to the Geographic Set-Asides, and the effect that has on determining which applicants will receive credits, was mentioned above. To better understand the parties' dispute regarding the procedure for satisfying the Non-Profit Set-Aside when, as in 2000, it is necessary to award credits to a putatively unsuccessful non-profit applicant at the expense of a putatively successful for-profit applicant, a second, more detailed look at the implications of categorical ranking will be helpful. Because of the Non-Profit Set-Aside, the set of all qualified applicants ("Applicant Pool") is divided into two classes: non-profit and for-profit corporations. As will be seen, the class of non-profit corporations is further separated, for purposes of the Non-Profit Set-Aside, into two subclasses: domestic non-profits and out-of-state, or foreign, non-profits. Finally, to repeat for emphasis, all qualified applicants, regardless of class or subclass (if applicable), fall within one of three groups according to the Geographic Set-Asides: Small County, Medium County, and Large County. The following chart depicts the relevant classification of applicants within the Applicant Pool: Applicant Pool Non-profits For-profits Domestic Foreign Small County Medium County Large County Because, as the chart shows, each applicant fits into several categories, applicants may be ranked in order of their comparative scores in a variety of combinations, depending on how they are sorted, e.g. all applicants, all Large County for- profits, all foreign non-profits, etc. Once the Corporation has drawn the tentative funding lines (which, recall, are county group-specific) and determined preliminarily which applicants will receive funding and which will not, two additional categories exist: applicants within the funding range and applicants below (or outside) the funding range. Owing to the nature of the instant dispute, however, the only non-profits discussed below are those outside the tentative funding range, unless otherwise stated, and the only for-profits considered are those within the tentative funding range, unless otherwise stated. 1/ The above makes clear, it is hoped, that a reference to the "highest scored" applicant, without more, may describe many applicants, such as the highest scored domestic non-profit, the highest scored non-profit in the Small County group, the highest scored foreign non-profit in the Large County group, and so on. More information is needed to pinpoint a particular entity. For ease of reference, and to facilitate the discussion and disposition of the present dispute, the following abbreviations will be used in this Recommended Order as shorthand descriptions of applicants’ defining characteristics: Abbreviation Meaning NP Non-profit applicant FP For-profit applicant High- highest scored Low- lowest scored D domestic entity (i.e. organized under Florida law) F foreign entity (i.e. organized under the law of a state other than Florida) S, M, and L Small, Medium and Large County, respectively ! highest or lowest scored within the indicated category; e.g. High- NP(S!) means highest scored non- profit within the Small County group; Low-FP(S!) means lowest scored for-profit in the Small county group x, y variables Combining these abbreviations provides an increasingly precise description, as more information is added. For example: Combination Description High-NP Highest scored non-profit in some, unknown category High-NP[D!] Highest scored domestic non- profit, unknown group; is not necessarily the highest scored non-profit in the class of non- profits High-NP[F!] Highest scored foreign non-profit, unknown group; is not necessarily the highest scored non-profit in the class of non-profits High-NP[D!](S) Highest scored domestic non- profit, located in the Small County group; not the highest scored non-profit within the Small County group High-NP[D](S!) Highest scored non-profit in the Small County group; is a domestic corporation but is neither the highest scored non-profit nor highest scored domestic non-profit High-NP[D](S) Highest scored domestic non-profit in the Small County group; is neither the highest scored non- profit, the highest scored domestic non-profit, nor the highest scored non-profit in the Small County group Low-FP! Lowest scored for-profit in the class of for-profits Low-FP(M!) Lowest scored for-profit in Medium County group; is not necessarily the lowest scored for- profit in the class of for-profits The Controversy: Gored Oxen and Leapt-Over Frogs The solution to the problem that arose in the 2000 application cycle when an insufficient number of non-profit applicants wound up initially within the tentative funding range is found in two places: Rule 67-48.032, Florida Administrative Code, and the 2000 QAP. Although the language of the two is not identical, the parties agree that the rule and the pertinent QAP provisions have the same meaning, despite their differences in wording. The undersigned has concluded, however, that the differences, though subtle, substantially affect the outcome of this case. It is necessary, therefore, to read them carefully. Rule 67-48.032(2), Florida Administrative Code, provides in pertinent part: To ensure that the minimum 10% is set aside, the Corporation has determined that an initial allocation of 12% to qualified Non- Profits will be met. In order to achieve the initial 12% set aside, Applications from Applicants that qualify or whose General Partner qualifies as a Non-Profit entity pursuant to Rule 67.48.002(71), F.A.C., HUD Regulations, Section 42(h)(5)(c), subsection 501(c)(3) or 501(c)(4) of the Code and organized under Chapter 617, Florida Statutes, or organized under similar state law if organized in a jurisdiction other than Florida and meet scoring threshold requirements shall be moved into the funding range, in order of their comparative scores, with Applicants whose Non-Profit entity is organized under Florida law receiving priority over Non-Profit entities of other jurisdictions, until the set-aside is achieved. The last Non-Profit Development that is moved into the funding range in order to achieve the 12% initial set-aside shall be fully funded even though that may result in a higher Non-Profit set-aside. This will be accomplished by removing the lowest scored Application of a for-profit Applicant from the funding range and replacing it with the highest scored Non- Profit Application below the funding range within the applicable Geographic Set-Aside pursuant to the QAP. This procedure will be used again on or after October 1, if necessary, to ensure that the Agency allocates at least 10% of its Allocation Authority to qualified Non-Profit Applicants. Any for-profit Applicant so removed from the funding range will NOT be entitled to any consideration or priority for the receipt of current or future Housing Credits other than placement on the current ranking and scoring list in accordance with its score. Binding Commitments for Housing Credits from a future year will not be issued for Applicants so displaced. Paragraph 2, at page 2, of the Corporation’s 2000 QAP states: [The Corporation] has determined that an initial allocation of 12% to qualified Non- Profits will ensure that the 10% requirement will be met in the event that all Developments included in the initial 12% do not receive an allocation. In order to achieve the initial 12% set-aside a tentative funding line will be drawn. Then, Applications from Non-Profit Applicants that meet scoring threshold requirements shall be moved into the tentative funding range, in order of their scores with Applicants whose Non-Profit entities are organized under Chapter 617, Florida Statutes, having priority, until the 12% set-aside is achieved. This will be accomplished by moving the lowest scored Application of a for-profit Applicant in the funding range down in ranking so it is ranked below the lowest Non-Profit Applicant within the funding range and moving the highest scored Non-Profit Applicant organized under Chapter 617, Florida Statutes below the funding range within the applicable Geographic Set- Aside pursuant to the QAP up in ranking so it is ranked one ranking space above the for-profit Applicant that was moved down in ranking. If no such Applicant exists, the highest Non-Profit Applicant organized under similar statutes from another state which is below the funding range within the applicable Geographic Set-Aside pursuant to the QAP, will be moved into funding range in the same manner as stated in the previous sentence. This procedure will be used again on or after October 1, 2000, if necessary, to ensure that the [Corporation] allocates at least 10% of its Allocation Authority for 2000 to qualified Non-Profit Applicants. Any for-profit Applicant so removed from the funding range will NOT be entitled to any consideration or priority for the receipt of current or future housing credits other than placement on the current ranking and scoring list in accordance with its score. Binding Commitments for housing credits from a future year will not be issued for Applicants so displaced. The last Non- Profit Applicant moved into the funding range, in order to meet the initial 12% set- aside or in order to meet the minimum 10% set-aside after October 1, 2000, will be fully funded contingent upon successful credit underwriting even though that may result in a higher Non-Profit set-aside. After the full Non-Profit set-aside amount has been allocated, remaining Applications from Non-Profit organizations shall compete with all other Applications in the HC Program for remaining Allocation Authority. The Corporation's interpretation of Rule 67-48.032, Florida Administrative Code, and paragraph 2 of the 2000 QAP (collectively, the "Instructions") to determine the procedure for satisfying the Non-Profit Set-Aside in connection with the 2000 application cycle has caused considerable controversy — and led to this proceeding. The controversial interpretation was publicly manifested on September 15, 2000, when the Corporation published a preliminary ranking sheet on its web site which reflected adjustments that its staff had made to fulfill the Non-Profit Set-Aside. Within days, adversely affected applicants were complaining that the Corporation's staff had misinterpreted the Instructions. The Corporation's staff had construed the Instructions to mean that when it is necessary to displace a for-profit within the tentative funding range to satisfy the Non-Profit Set-Aside, the following procedure must be followed: Remove Low-FP!(x!) and replace it with High- NP[D](x). 2/ If there is no domestic non- profit in county group x, then replace Low- FP!(x!) with High-NP[F](x!). 3/ This construction permits High-NP[D!], if there is one, High- NP![F!] if not, to remain outside the funding range, because it might not be in county group x. In practice, the process that the Corporation’s staff had settled upon operated, in the circumstances presented, to the detriment of Petitioners. Here is how it worked. After the tentative funding range was established, the lowest scored for- profit in the class of for-profits was in the Small County group. 4/ There were no non-profits, domestic or foreign, in that group to elevate, however, and so Low-FP!(S!) could not be removed; the fall-back procedure was followed. See endnote 4. As it happened, RPK was Low-FP(L!) and had a lower score than Low-FP(M!). Thus, under the Corporation's staff's interpretation of the Instructions, as revealed by the rankings posted on September 15, 2000, High-NP[D](L!) was moved into the funding range in the place of RPK, even though High-NP[D](L!)'s final score was lower than that of Lakesmart — which was High- NP. (Coral Village and Meadow Glen were the second- and third-ranked domestic non-profits, respectively, in the Medium County Group. Sorted by class, Lakesmart, Coral Village, and Meadow Glen would be ranked first, second, and sixth in the class of non-profit applicants.) 5/ The second lowest-scored for-profit in the class of for-profits was also in the Large County group. Thus, it became Low-FP!(L!) after RPK was removed. It, too, was replaced by the Large County non-profits that became, in turn, High-NP[D](L!) as the next highest-ranked non-profit in that group was moved up into the funding range to satisfy the 12% Non-Profit Set-Aside. In all, the Corporation's staff proposed to elevate — and hence award tax credits to — four non-profit applicants whose final scores were lower than Lakesmart's and Coral Village's. One of those four putative beneficiaries had a lower final score than Meadow Glen's. Lakesmart and others who disagreed with the Corporation’s staff advanced an alternative interpretation of the Instructions. In their view, to ensure that the Non-Profit Set-Aside is met requires the following maneuver: Remove Low-FP(x!) and replace it with High- NP[D!](x). 6/ If there is no domestic non- profit outside the funding range, then replace Low-FP(x!) with High-NP. 7/ This interpretation admits the possibility that Low-FP! might remain in the funding range, because it might not be in county group x. Under this interpretation, favored by all Petitioners, Lakesmart and Coral Village would be elevated into the funding range, rather than being "leap-frogged" by lower-scored non- profits, and RPK would not be displaced. (Of course, Petitioners' interpretation would require that some other for- profit ox be gored — one having a higher score than RPK's.) These competing interpretations of the Instructions were presented to the Corporation's board for consideration at its public meeting on September 22, 2000. After a discussion of the issues, in which members of the public participated, the board voted unanimously to accept the interpretation that the staff had acted upon in preparing the September 15, 2000, rankings. Later in the same meeting the board adopted final rankings, which were prepared in accordance with the approved interpretation, that resulted in the denial of Petitioners' applications for tax credits. The 1997 Awards: Precedent or Peculiarity? Petitioners maintain that their interpretation of the Instructions is supported by a supposed precedent allegedly set in 1997 that, they say, was binding on the Corporation in 2000. In the 1997 cycle, it so happened that after drawing the tentative funding lines, the sum total of credits sought by non-profits within the preliminary funding range failed to reach the then-required threshold of 10%. Thus, for the first time, the Corporation faced the need to replace higher-scored for- profits (that were apparently in line for funding) with lower- scored non-profits that otherwise would not have received credits. The QAP that governed the 1997 awards provided for the Non-Profit Set-Aside but was silent on the procedure for satisfying it: The Agency will allocate not less than 10% of the state’s allocation authority to projects involving qualified, non-profit Applicants, provided they are non-profits organized under Chapter 617, Florida Statutes, and as set forth in Section 42(h)(5) of the Internal Revenue Code, as amended, and Rule Chapter 9I-48, Florida Administrative Code. Respondent's Exhibit 2, page 8. Rule 9I-48.024(3), Florida Administrative Code (1997), did contain directions for carrying out the required substitution. It prescribed the following procedure for elevating non-profits: If 10% of the total Allocation Authority is not utilized by Projects with Non-Profit Applicants, Applications from Non-Profit Applicants that meet scoring threshold requirements shall be moved into the funding range, in order of their comparative scores, until the 10% set-aside is achieved. This will be accomplished by removing the lowest scored Application of a for-profit Applicant from the funding range and replacing it with the highest scored Non-Profit Application below the funding range within the applicable Geographic Set-Aside pursuant to section (2) above. Petitioners' Exhibit 1. These provisions will be referred to hereafter as the "1997 Directions," to distinguish them from the Instructions. Gwen Lightfoot was the Corporation's Deputy Development Officer in 1997. In that capacity, she was directly responsible for implementing the rules relating to the award of low-income housing tax credits. To satisfy the Non-Profit Set- Aside, Ms. Lightfoot followed the 1997 Directions as she understood them. In so doing, she sorted the eligible non- profits by class (i.e. without regard to their respective county groups) and ranked them in score order, from the highest scoring project to the lowest scoring project. 8/ Then, Ms. Lightfoot moved the highest scoring non-profit in the class of non-profits to a position immediately above the for-profit with the lowest score in the same geographic set-aside as the favored non-profit so that the non-profit project would be fully funded. That is, she replaced Low-FP(x!) with High-NP!(x!). This process was repeated, moving the next highest ranked non-profit to a position immediately above the lowest-ranked for-profit in the same geographic set-aside as the elevated non-profit, until the Non-Profit Set-Aside was met. Although the Corporation presently argues that its board was not fully informed in 1997 as to the procedure that Ms. Lightfoot followed in fulfilling the mandate of the Non- Profit Set-Aside, a preponderance of evidence established that Ms. Lightfoot's actions were within the scope of her authority and taken in furtherance of her official duties; that the board was aware of what she had done; and that the board took no action to change the results that followed from Ms. Lightfoot's interpretation and implementation of the 1997 Directions. Ms. Lightfoot's application of the 1997 Directions, in short, was not the unauthorized act of a rogue employee. Rather, as a matter of fact, her action was the Corporation's action, irrespective of what any individual board member might subjectively have understood at the time. In the years following the 1997 awards, Rule 9I- 48.032, Florida Administrative Code, was re-numbered Rule 67- 48.032 and amended three times, the most recent amendment becoming effective on February 24, 2000. As a result, the 1997 Directions evolved into the language of Rule 67-48.032(2) which, though not identical, retains the essential meaning of its predecessor. During the same period, the QAP was also amended three times, the version controlling the 2000 application cycle having been approved by the governor on December 16, 1999, and adopted by reference in the Florida Administrative Code on February 24, 2000. Unlike the revisions to Rule 9I-48.032(3), however, the changes in the QAP that relate to the issue at hand are significant, because the 2000 QAP sets forth a procedure for fulfilling the Non-Profit Set-Aside when the collective amount of credits sought by non-profits in the tentative funding range falls short of the mandated mark, whereas the 1997 QAP did not.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Corporation enter a final order dismissing the petitions of Petitioner Lakesmart, Petitioner RPK, and Intervenors Meadow Glen and Coral Village. DONE AND ENTERED this 7th day of February, 2001, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM 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 7th day of February, 2001.
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 =================================================================
The Issue Whether the Respondent, Miami-Dade Community College, has adopted a statement of agency policy in violation of Florida law.
Findings Of Fact Prior to August 2, 2002, the Respondent employed the Petitioner, Lonny Ohlfest. At the time of his termination, the Petitioner filed a request for a due process hearing with the Respondent to challenge his termination from employment. The Petitioner challenged the basis for his termination as he wanted to clear his name regarding some unflattering allegations but, equally important, he wanted to keep his job with MDC. The Respondent denied the Petitioner's request for an administrative hearing and found that the Petitioner was not entitled to a hearing. More specifically, the Respondent concluded that since the Petitioner did not have a contract of employment he was not entitled to an administrative hearing. The Petitioner disputed the Respondent's claim and argued that he did have a contract, that he had a reasonable expectation that his employment would continue, and that the Respondent unlawfully refused to afford him regress through the administrative process. When the Petitioner's appeal of his request for an administrative hearing failed, he filed the instant case to challenge the Respondent's policy of not referring administrative cases for formal hearing. The delays in the appeal process explain and support the Petitioner's delay in filing the instant challenge to the agency's alleged rule. To understand the historical perspective of this case, the following findings are made pertinent to the Petitioner's employment with the Respondent: The Petitioner began employment with the MDC on or about April 4, 2001. He was hired as a part-time, hourly worker within the school of allied health technologies. The position he assumed was funded and operated within the "Health Careers Opportunities Program" or HCOP. The HCOP was funded by a federal grant. The monies coming from the grant were renewable each year and ran concurrent with the school's fiscal year (July 1-June 30). All employees paid through the HCOP grant were considered "temporary" as the grant monies were necessary to assure continued employment. In January 2002 the Petitioner was given a full-time position within the HCOP. He was designated "Program Leader/Student Services" for the upcoming summer bridge program. At all times material to this case, all parties knew that absent federal funding the HCOP would not continue to operate. Moreover, the Petitioner knew, or should have known, that his employment with the Respondent would run only until June 30, 2002. Thereafter, it was expected that if and when the federal funding came through, the HCOP employees (including the Petitioner) would continue to work within the scope of the program. At the end of the summer program in 2001, the HCOP employees took leave until the school year started and the funding of the program was assured. Accordingly, after the summer bridge program was completed, the Petitioner expected to be on leave during the summer of 2002 until called back to work. Instead, the Respondent terminated the Petitioner from employment. The 2002 summer bridge program had not finished well for the Petitioner. Amid allegations of sexual harassment (unsubstantiated and not at issue in this proceeding) the Petitioner's working relationship within the HCOP floundered. The Petitioner was aghast that unsubstantiated claims had been reported, he wanted the accusations resolved, he wanted his name cleared, and he was disappointed by the process that failed to timely and fully resolve the issues. When the Petitioner left the campus for what he believed would be the break (similar to the one they had taken the prior year), he was uncertain as to his employment status. In fact, when he left the campus he cleaned out his desk and returned his keys. Nevertheless, on July 26, 2002, Dr. Miller directed the Petitioner to present for work on July 29, 2002. He did not do so. On July 29, 2002, the Petitioner's immediate supervisor directed him to appear for work on July 30, 2002. He did not do so. In fact, the Petitioner did not return to the office until July 31, 2002. The Petitioner did not understand that his attendance was mandatory for the two days that he did not appear for work. When the Petitioner did check in with the HCOP office on the 31st he came to understand the gravity of the situation. As a result of the absences, the Respondent cited the Petitioner with insubordination and terminated his employment with MDC. The Petitioner timely challenged the termination but the Respondent ruled he was not entitled to an administrative review of the decision. The Petitioner filed for, and received, unemployment compensation. The termination was not justified by the standards applicable to that forum. The rules governing unemployment compensation do not, however, govern the administrative process regarding whether or not one's employment constitutes a property interest that is protected by law. Upon receipt of the Petitioner's petition seeking an administrative review, the Respondent declined to afford the Petitioner with a hearing. The Respondent does not forward petitions filed by non- contract employees when such individuals seek to challenge their termination of employment. The Respondent maintains that, as a matter of law, they are not required to forward such petitions for formal review. The Respondent does not have a written rule or policy stating that non-contract employees are not entitled to administrative review when their employment is terminated. Conversely, the Respondent does not have a written rule or policy stating that non-contract employees are entitled to an administrative review when their employment is terminated. The Petitioner was not a full-time, contract employee of the Respondent. The Respondent's policy affords full-time contractual personnel a right to an administrative hearing pursuant to Chapter 120, Florida Statutes.
Findings Of Fact In August 1985, the Department issued a Request for Proposal (RFP), State Project Number RFP-DOT-85-06, for a demonstration bonding assistance program. The program was authorized in 1985 by Congress, using Federal Highway Administration funds, to assist economically and socially disadvantaged business enterprises (DBEs) to meet the bonding requirements mandated on public works projects, and thereby increase their participation in the bid process. Consistent with existent agency policy, and Section 287.057(16), Florida Statutes, the RFP provided: A selection committee of at least three members will be established to review and evaluate each proposer's response to this Request for Pro- posal and subsequently decide the preference order of the proposers. In response to the RFP, the Department received six proposals. The evidence established that it is Department policy to submit the proposals to a "technical review committee," comprised of three members for evaluation of the technical responsiveness of the proposals, and to an employee of the Department's Bureau of Contractual Services to evaluate the cost responsiveness of the proposals. In this case, the proposals were submitted to a "technical review committee" consisting of two members and to an employee of the Department's Bureau of Contractual Services. The "technical review committee" separately evaluated and scored the technical responsiveness of each proposal, and reported their scores to an Operations and Management Consultant, with the Department's Bureau of Minority Programs. 1/ The Consultant did not evaluate the proposals. He merely averaged the scores of the two members of the "technical review committee," added the cost responsiveness of the proposals received from the Department's Bureau of Contractual Services, and prepared a summary evaluation package for the "Selection Committee." The evaluation package ranked the proposals by score. The "Selection Committee" consisted of the Department's Secretary (Thomas E. Drawdy), Deputy Assistant Secretary (Mel Hilliard), and Director of the Division of Administration (Bruce Gordon). Mr. Gordon, based on the scores set forth in the evaluation package, recommended, and the Committee concurred, that Boone's proposal be accepted. Mr. Gordon did not review any of the proposals submitted in response to the RFP. Kenneth L. Sweet, one of the evaluators on the "technical review committee," is an engineer for the Department's Bureau of Construction. While steeped with a broad range of technical and engineering experience, Mr. Sweet lacked knowledge of the requisites to successfully secure a bonding commitment.
Findings Of Fact Respondent, Florida Department of Transportation (DOT), is required by state and federal law to ensure that 10 percent of state and federal funds available for construction, design and consulting service-contracts be provided as an opportunity to small business concerns owned and controlled by socially and economically disadvantaged individuals (DBE). DBE contract goals are established by DOT for each construction contract. Every bidder must submit a form to DOT which either documents compliance with the DBE contract goal or, if compliance is not met, must provide sufficient information to demonstrate that good faith efforts were made by the bidder to meet the goal. Prior to June 1984, DOT's practice allowed contractors ten days after the bid letting to correct their DBE forms or to submit their good faith effort documentation. However, effective May 23, 1984, DOT adopted Rule 14- 78.03(2)(b), F.A.C., which provides in pertinent part: 4. For all contracts for which DBE . . . contract goals have been established, each bidder shall meet or exceed or demonstrate that it could not meet, despite its good faith efforts, the contract goals set by the Department. The DBE . . . participation information shall be submitted with the contractor's bid proposal. Award of the contract shall be conditioned upon submission of the DBE . . . participation information with the bid proposal and upon satisfaction of the contract goals or, if the goals are not met, upon demonstrating that good faith efforts were made to meet the goals. Failure to satisfy these requirements shall result in a contractor's bid being deemed nonresponsive and the bid being rejected. (Emphasis supplied.) In August 1984, subsequent to the adoption of Rule 14.78.03(2)(b)4., F.A.C., DOT sent a "Notice to All Contractors" which advised . . . all submittals for evaluating Good Faith Efforts in meeting DBE/WBE goals must be submitted with the bid proposal in order to be considered for award of the contract. Failure to submit the Good Faith Effort documentation with the bid may result in rejection of the bid. Petitioner, Wiley N. Jackson Company, acknowledges receipt of the "Notice to All Contractors." By notice dated August 30, 1984, contractors were advised that sealed bids would be received until 10:30 a.m., September 26, 1984, on various road projects. The bid documents advised that the DBE goal for Job Number 89095-3411 was 10 percent. The specifications for Job Number 89095-3411 contain extensive provisions with regard to compliance with the DBE contract goals. Among these provisions is the following language contained in Section 2-5.3.2. For all contracts for which DBE and/or WBE contract goals have been established, each contractor shall meet or exceed or demonstrate that it could not meet, despite its good faith efforts, the contract goals set by the Department. The DBE and WBE participation information shall be submitted with the Contractor's bid proposal. Award of the Contract shall be conditioned upon submission of the DBE and WBE participation information with the bid proposal and upon satisfaction of the contract goals, or, if the goals are not met, upon demonstrating that good faith efforts were made to meet the goals. The Contractor's bid submission shall include the following information (Submitted on Form No. 141-12 - DBE/WBE Utilization Form No. 1): The names and addresses of certified DBE and WBE firms that will participate in the contract. Only DBEs and WBEs certified by the Department at the time the bid is submitted may be counted toward DBE and WBE goals. A description of the work each named DBE and WBE firm will perform. The dollar amount of participation by each named DBE and WBE firm. If the DBE or WBE goal is not met, sufficient information to demonstrate that the Contractor made good faith efforts to meet the goals. (Emphasis supplied.) The specifications list, as grounds for disqualification of bidders, failure to satisfy the requirements of Section 2-5.3. Further, Section 2-5.3.3 of the specifications advised bidders that: In evaluating a contractor's good faith efforts, the Department will consider: Whether the Contractor, at least seven days prior to the letting, provided written notice by certified mail, return receipt requested, or hand delivery, with receipt, to all certified DBEs and WBEs which perform the type of work which the Contractor intends to subcontract, advising the DBEs and WBEs (a) of the specific work the Contractor intends to subcontract; (b) that their interest in the contract is being solicited; and (c) how to obtain information about and review and inspect the contract plans and specifications. Whether the Contractor selected economically feasible portions of the work to be performed by DBEs and WBEs, including where appropriate, breaking down contracts or combining elements of work into economically feasible units. The ability of a contractor to perform the work with its own work force will not in itself excuse a contractor's failure to meet contract goals. Whether the Contractor provided interested DBEs or WBEs assistance in reviewing the contract plans and specifications. Whether the DBE or WBE goal was met by other bidders. Whether the Contractor submits all quotations received from DBEs or WBEs, and for those quotations not accepted, an explanation of why the DBE or WBE will not be used during the course of the contract. Receipt of a lower quotation from a non-DBE or non-WBE will not in itself excuse a contractor's failure to meet contract goals; provided however, a contractor's good faith efforts obligation does not require a contractor to accept a quotation from a DBE or WBE which exceeds the lowest quotation received from any subcontractor by more than one percent. Whether the Contractor assisted interested DBEs and WBEs in obtaining any required bonding, lines of credit, or insurance. Whether the Contractor elected to subcontract types of work that match the capabilities of solicited DBEs or WBEs. Whether the Contractor's efforts were merely pro forma and given all relevant circumstances, could not reasonably be expected to produce sufficient DBE and WBE participation to meet the goals. Whether the Contractor has on other contracts within the past six months utilized DBEs and WBEs. The above list is not intended to be exclusive or exhaustive and the Department will look not only at the different kinds of efforts that the Contractor has made but also the quality, quantity and intensity of these efforts. Sections 2-5.3.2 and 2-5.3.3 are drawn directly and literally from Rule 14-78.03(2)(b). Consequently, all bidders were apprised by rule and bid specifications that if the DBE contract goal could not be met, sufficient information had to be submitted with their bid to demonstrate their good faith efforts to meet the goal, and the criteria that would be utilized to evaluate their efforts. On September 26, 1984, Petitioner submitted the low bid in the amount of $7,688,271.91 for Job Number 89095-3411. Attached to the bid was Form 141-12 - DBE/WBE Utilization Form No. 1, indicating that Petitioner's proposed utilization of DBEs was 0.2 percent of the total contract amount; $15,385 on a total bid of $7,688,271.91. Accompanying Petitioner's bid was a handwritten letter which stated: Gentlemen: To demonstrate good faith effort prior to the bid date for this project, we submitted seventy-three registered letters to prospective D.B.E. Subcontractors. On the major items we propose to sublet, comparative D.B.E. and non-D.B.E. quotations were received as follows: Box Culvert - J. E. Hill (D.B.E.) - 505,762.00 Shelton & Son - 369,092.00 Difference - $136,670.00 Fencing - Mikell (D.B.E.) - 55,727.00 Cyclone - 46,833.00 Difference - $ 8,894.00 Grassing - Mikell (D.B.E.) - 91,919.00 Agricultural Land - 63,198.00 Difference - $28.721.00 In view of the above, we are unable to meet the D.B.E. Goal and, at the same time, submit a realistic and competitive bid. Copies of pertinent quotations are attached and copies of D.B.E. solicitations (registered letters) and responses are available for your review. Quotations reflecting one unaccepted DBE proposal, and one accepted non-DBE proposal, in each of three areas--concrete, fencing and grassing--were attached to the letter. In each instance the DBE proposal exceeded the non-DBE proposal by more than one percent. No other documentation was submitted with Petitioner's bid to demonstrate its good faith efforts to meet the DBE contract goal. Respondent, Dickerson Florida, Inc. (Dickerson), was the second low bidder with a bid of $7,926,819.49. Dickerson's bid reflected a DBE participation of 10.8 percent. Upon the closure of bidding, Petitioner's bid was submitted to the Good Faith Effort Committee at DOT to evaluate the information contained in the bid to determine whether Petitioner's documentation evidenced a good faith effort to meet the DBE goal. That committee found Petitioner's bid documentation failed to demonstrate a good faith effort to meet the DBE goal, and recommended that Petitioner's bid be declared non-responsive and be rejected. DOT declared Petitioner's bid non-responsive and rejected its bid. DOT proposed awarding the contract to Dickerson. Petitioner's bid documentation failed to demonstrate a good faith effort to meet the DBE contract goals. The documentation failed to demonstrate that: (1) Petitioner, at least seven days prior to letting, had provided written notice to all certified DBEs, or, of what the DBEs had been informed, (2) Petitioner had selected economically feasible portions of the work to be performed by DBEs, (3) Petitioner had provided interested DBEs with assistance in reviewing the contract plans and specifications, and (4) Petitioner had selected for subcontract types of work that matched the capabilities of the solicited DBEs. Further, Petitioner's documentation did not include all quotations received from DBEs. Job Number 89095-3411 included several categories of work: box culverts, signs, landscaping, guardrail, fencing, traffic striping, trucking, paving, grading and miscellaneous concrete. The bid documentation submitted by Petitioner did not indicate the items it attempted to subcontract, nor what efforts, if any, it had expended to solicit DBE participation beyond "a letter" it had mailed, at an indeterminate date, to some 73 unidentified "prospective DBE subcontractors." Facially, Petitioner's documentation evidenced a pro forma effort. Subsequent to the bid closing, Petitioner forwarded to DOT copies of the 73 letters it had mailed to "prospective DBE subcontractors," together with the certified mail return receipts. Petitioner was in possession of these documents prior to the close of bidding, and could have submitted them with its bid. DOT's Good Faith Effort Committee declined to consider Petitioner's postbid submission. The committee interpreted Rule 14-78.03, F.A.C., to require the DBE participation information be submitted with the bid proposal, and to preclude consideration of postbid submissions. DOT has at all times acted consistently with this interpretation.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a Final Order be entered by the Department of Transportation rejecting the bid submitted by Petitioner, Wiley N. Jackson Company, on State Project No. 89095-3411, Martin County, Florida, and awarding the contract to Respondent, Dickerson Florida, Inc. DONE and ENTERED this 31st day of May, 1985, at Tallahassee, Florida. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 FILED with the Clerk of the Division of Administrative Hearings this 31st day of May, 1985. COPIES FURNISHED: David T. Knight, Esquire Shackleford, Farrior, Stallings and Evans, P.A. Post Office Box 3324 Tampa, Florida 33601 Larry D. Scott; Esquire Department of Transportation Haydon Burns Building, M.S. 58 Tallahassee, Florida 32301-8064 Robert M. Ervin, Esquire Thomas M. Ervin, Jr., Esquire Ervin, Varn, Jacobs, Odom & Kitchen Post Office Drawer 1170 Tallahassee, Florida 32302 Paul A. Pappas, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32301
The Issue The issues in this case concern the question of the entitlement of the Petitioner to certification as a Minority Business Enterprise within the meaning of Chapter 288, Florida Statutes and Rule 13-8.005, Florida Administrative Code. In particular, the issue to be resolved is whether Merrie J. Lee, the majority person within this corporation and owner of more than 51 percent of the stock, controls the management and daily operations of the corporation.
Findings Of Fact On July 28, 1988, the Respondent received an application from Merrie J. Lee Construction Company, Petitioner, requesting certification as a Minority Business Enterprise under the authority of Chapter 288, Florida Statutes and Rule 13-8.005, Florida Administrative Code. Merrie J. Lee is the sole director of that corporation and is the minority person within the corporation, by virtue of the fact that she is a female. She is also the president of the corporation. Lee M. Brown, a non-minority person, is the vice-president. William V. Lee, the brother to Merrie J. Lee is the secretary/treasurer to the corporation. He is a non-minority person. The business of Merrie J. Lee Construction Company is underground utilities. When the corporation was formed Merrie J. Lee contributed $140, Lee M. Brown $100 and William V. Lee $100, as capitalization. Of the 10,000 stock shares, 1,000 have been issued. At the inception of the corporation Merrie J. Lee held 52 percent of the stock. She now holds 68 percent of the stock in that her father Wayne E. Lee bade a gift to his daughter of his 16 percent of the stock shares that had been issued. This arrangement was made following the request for certification. As a result, Merrie J. Lee owns 68 percent of the issued stock shares, her brother owns 16 percent and Lee Brown owns 16 percent. Petitioner is a small business corporation with less than 25 full-time employees. It operates the business at an address of 1136 Nestling Court, Gulf Breeze, Florida 32561. This is the residence address of Ms. Lee and has been provided to her rent-free from her father Wayne E. Lee who owns the property. Merrie J. Lee Construction Company is a Florida corporation having been incorporated on May 3, 1988. Thus far, the work that the company has performed has been in the public right-of-way. The work that has been done by the Petitioner has been conducted in Santa Rosa, Escambia and Okaloosa Counties in Florida. Under the terms of the Articles of Incorporation, Article Nine, the power to adopt, alter or amend or repeal By-Laws is vested in the shareholders. Merrie J. Lee holds the majority position among the shareholders. Article III, Section 1, of the By-Laws points out that the function of the corporation as an entity shall be exercised by or under the authority of and the business affairs of the corporation shall be managed under the direction of the Board of Directors. In this instance, that means Merrie J. Lee, the sole director. Article IV, Section 2, of the By-Laws provides in part that the officers of the corporation shall have the following duties: THE PRESIDENT shall be the chief executive officer of the corporation, shall have general and active management of the business and affairs of the corporation subject to the directions of the Board of Directors, and shall preside at all meetings of the shareholders and Board of Directors. THE SECRETARY shall have custody of, and maintain, all of the corporate records except the financial records; shall record the minutes of all meetings of the shareholders and the Board of Directors, send all notices of meetings out, and perform such other duties as may be prescribed by the Board of Directors or the President. THE TREASURER shall have custody of the corporate funds and financial records, shall keel full and accurate accounts of receipts and disbursements and render accounts thereof at the annual meetings of the shareholders and whenever else required by the Board of Directors or the President, and shall perform such other duties as may be prescribed by the Board of Directors or the President. Article III, Section 10, of the By-Laws provides that a majority of the number of directors fixed by the By-Laws shall constitute a quorum for the transaction of business. The act of the majority of the directors present at the meeting which constitutes the quorum shall be the act of the Board of Directors. This means that in this corporation in which there is only one director by the terms of the legal documentation, Merrie J. Lee controls the corporation. In actuality given the limited experience which Merrie J. Lee has had in the conduct of an underground utilities business; the similarity of this business to that of her father, a company known as Utility Service Company, which specializes in underground utility construction; the familial relationship between Merrie J. Lee and her brother and father, the latter two persons having substantial influence in the business affairs of the Petitioner; the reliance upon her father for financial support; the necessity to trade upon his reputation in the business community to attract jobs and the close relationship between her father's corporation and the Petitioner corporation concerning employees and equipment, meaningful control of Merrie J. Lee Construction Company on the part of Merrie J. Lee, the minority person, cannot be found. Examples of this close affiliation concerns the fact that, at present, Merrie J. Lee is a full-time, salaried employee of the Utility Service Company, which is owned by Wayne Lee and William Lee. Her duties with that company include answering the phone, bookkeeping, paying bills, and handling radio traffic. She has no function as a corporate officer with Utility Service Company or any other company excepting Merrie J. Lee Construction Company. In her position with Utility Service Company she is not called upon to sign checks. Her work with Utility Service Company commenced in 1985. At this time she is training a replacement with the expectation of taking a full-time position with Merrie J. Lee Construction Company. Prior to her affiliation with Utility Service Company Merrie J. Lee had worked for Gulf Isles Utility Company, a water and sewer company, owned and operated by her father. Her duties with Gulf Isles Utility Company included answering the phone, attending customer complaints, reading meters and turning service on and off. Before her time of employment with Gulf Isles Utility Company Ms. Lee had worked part-time with Gulf Island National Seashore on Pensacola Beach, Florida and her duties included registering campers and assisting those campers during their stay at the park. She also collected toll fees from the campers. Ms. Lee has worked in a bait and tackle shop in the past and as a part-time daycare worker. Merrie J. Lee has a high school diploma and attended both Pensacola Junior College and Stephens College in Columbia, Missouri. She did not obtain degrees following her high school education. Having grown up in a family in which the father was actively involved in the underground utility business, Merrie J. Lee had the occasion to make trips to job sites with her father, as a child, and has had that sort of acquaintenanceship with the underground utilities work in her adult life. Ms. Lee has obtained occupational contractor's licenses from Escambia and Santa Rosa Counties or caused that to be done. Ms. Lee is not intimately familiar with the field work aspects of the underground utilities business. She is more familiar with the attempt to gain business, negotiation of contracts, preparation and submission of bids, purchasing of goods, equipment and services, hiring and firing of employees and keeping financial and business records of the corporation and participating in decisions about the progress of work. Her strongest understanding of the underground utilities business relates to the financial and business record aspects. In the bid preparation by Merrie J. Lee Construction Company, this is joint effort involving Ms. Lee, Wayne Lee and Lee Brown. Lee Brown is also employed as an estimator at Utility Service Company in addition to his association with Merrie J. Lee Construction Company. Bid preparation at Utility Service Company is also a joint effort. In that circumstance at Utility Service Company, Ms. Lee checks suppliers by phone, and checks mathematical extensions of prices. Her participation in the bid process at Merrie J. Lee Construction Company, in its short history, having examined her explanation of that arrangement, does not appear to be significantly different than her role at Utility Service Company, with the exception that she is more interested in that process and continues to gain experience in this process with the passage of time. In any event, one could not say that Ms. Lee is a mainstay in the bid process within Merrie J. Lee Construction Company and she has conceded this point. Without the assistance of others Merrie J. Lee does not seem capable of making critical choices about the bidding at this time. In conjunction with the job foreman, Ms. Lee is involved in scheduling the sequence of construction work. Merrie J. Lee does not go to the job sites on a daily basis. She does visit on occasion. Her daily contacts are by phone in discussion with the foreman concerning progress of work and the need for further materials. She and the field supervisor are both involved in arranging delivery of materials to the job site. Wayne Lee is also involved in the ordering of supplies and materials for job sites. Ms. Lee in her testimony made some explanations about the type of equipment necessary to install underground utilities and gave some description of what function an underdrain pipe fulfills. In relying upon her father as a source of guidance, she has as a resource a man who is licensed by the State of Florida, Department of Professional Regulation as a certified plumbing contractor within the meaning of Subsection 48.105(3)(m) and 489.115, Florida Statutes. Mr. Lee also has a degree in civil engineering and is a registered professional engineer, a registered land surveyor in Florida, a certified Class C water treatment operator in Florida and a certified Class C wastewater treatment operator in Florida. All total he has 35 years of experience in underground utility construction. Her brother William Lee has been in the construction business since the time he was a young man and has considerable experience in the underground utility business. He has learned his business with extensive on-the-job training, training which Ms. Merrie J. Lee has not undergone. William Lee is a licensed plumbing contractor with the Florida Construction Industry Licensing Board. William V. Lee is being groomed to take over Utility Service Company from his father, Wayne E. Lee. At the time of the hearing, eight persons were employed by Merrie J. Lee Construction Company, in the sense of those who were on the payroll. These employees had been hired by Merrie J. Lee and her father. Among those persons was Greg Thorsen, the foreman of one of the jobs that the company was involved with. Calvin Talbert a pipe layer on that job and his helper, Clarence Davis. Another person in that crew referred to as a hooker, is Jeffrey Underwood. A further person in that crew, is Willie Smith, who works a compacting machine. Donnie Silcox is a foreman on the same job that Thorsen is associated with. His helper is Louis Schwent. Another helper on the job is Darren Watson. Kevin Dixon worked on this job, but was fired and replaced by Watson. In the firing Silcox had checked with Ms. Lee concerning the fact that Dixon was not performing adequately and Ms. Lee told Silcox that persons who would not work should not be left on the payroll and that Silcox should dismiss Dixon from his employment, which was done. Ms. Lee had hired Willie Smith, Jeffrey Underwood, Kevin Dixon, Gregg Thorsen, and Donnie Silcox among others. Greg Thorsen, Calvin Talbert, Clarence Davis, Willie Smith, Donnie Silcox and Louis Schwent had worked for Utility Service Company in the past. Given that the company has just begun, it does own a great deal of equipment. It has rented most equipment in order to fulfill its obligations under contract. One piece of equipment that is being purchased is a pickup truck, which it bought from Utility Service Company, based upon the agreement to pay the balance of a note owed on this truck which was in the amount of $4,000. This was a favorable arrangement for Petitioner. A considerable amount of the equipment that is being used has been rented at favorable rates from Utility Service Company. This would include a hydraulic excavator, a bulldozer, a rubber-tired backhoe and a front-end loader, whose operators were employees of Utility Service Company. Utility Service Company allows the Petitioner the free use of telephones and radios. Wayne E. Lee has loaned the corporation $1200, which is not an interest bearing loan. In addition the house in which Ms. Lee lives, belonging to Wayne E. Lee, stands as security for a $20,000 loan which Ms. Lee negotiated on behalf of Merrie J. Lee Construction Company. Wayne E. Lee cosigned the note. Ms. Lee is personally accountable for debts outstanding in the corporation and for her company's performance under jobs under contract. At the time this application for recognition as a minority business was made four persons had the ability to sign checks written by the corporation. They included Merrie J. Lee, William V. Lee, Wayne E. Lee and Lee Brown. Because of concerns expressed by the Respondent's employee in the review of this application, all individuals, other than Merrie J. Lee, have been removed as persons who have the authority to write checks on the business account of Merrie J. Lee Construction Company. During the pendency of the time in which persons other than Merrie J. Lee could have written checks, they did not. Merrie J. Lee Construction Company is not registered with the Construction Industry Licensing Board. The time devoted to Merrie J. Lee Construction Company by her brother and father is in the interest of assisting that company without the expectation of compensation. Wayne E. Lee interceded with the Chadbourne Company owner, to arrange for Merrie J. Lee Construction Company to act as a subcontractor in a job in which Merrie J. Lee Construction Company expects to be paid $495,000 under the terms of the contract. This arrangement between the Chadbourne Company and Merrie J. Lee Construction Company as brought about by the efforts of Wayne E. Lee, meant that Merrie J. Lee Construction Company would not have to provide a bond. This was vital to the interest of Merrie J. Lee Construction Company because it was not in a position to bond it in that amount. In addition to the $495,000 contract as a subcontractor to Edward M. Chadbourne, in work at the Pensacola, Florida, airport, Merrie J. Lee Construction Company has had three other jobs at the time of the hearing in this cause. The first job was for approximately $1,200 with Lost Bay Trading Company in which, after consultation with her father, Merrie J. Lee arranged for this work by consultation with the principals in the Lost Bay Trading Company. The second contract was for $24,000 of work at the University of West Florida. The third contract was for $54,800 with Panhandle Paving Company. Bonds were not required in these three contracts either. The application here was reviewed by Raymond Lawrence Bryant, an employee of the Department of General Services in the Minority Business Assistance Office. He concluded that Merrie J. Lee as the minority person within the corporation, did not control the management and daily operations of Merrie J. Lee Construction Company as envisioned by Section 288.703(2), Florida Statutes. He also expressed the opinion that the business was not currently performing a useful business function as defined by Section 287.0943(1), Florida Statutes. That position was modified with the advent of the four contracts which have been discussed. In essence, the idea of denying certification based upon the belief that the-company does not perform a useful business function has been withdrawn. In connection with the idea of lack of control, Bryant identified a number of criteria within Rule 13-8.005(3)(a)-(g), Florida Administrative Code as reasons for denial. This speaks to provisions that were in effect at the time of the submission of the application. A copy of the Bryant report related to this project may be found as Joint Exhibit number 2, admitted into evidence. His summarizing remarks were submitted on October 14, 1988. His suggestion of denial was followed up by correspondence of Carolyn Wilson-Newton, Minority Business Assistance Coordinator for the Department of General Services. This correspondence date is November 2, 1988 and describes the intent to deny the certification. Subsequently, the provisions at Rule 13-8.005(3)(a)-(g), Florida Administrative Code, were amended on November 17, 1988. On November 23, 1988 the Petitioner filed its petition requesting a formal hearing under Section 120.57(1), Florida Statutes to contest the denial of the application for Minority Business Enterprise certification. The case was then sent to the Division of Administrative Hearings and a hearing was conducted on the date set out before. The amendments to Rule 13-8.005(3)(a)-(g), Florida Administrative Code are refinements to the previous rules and are in keeping with incipient agency policy that had been developing before the advent of the changes to the rule.
Recommendation Based upon a consideration of the facts found and the conclusions of law reached, it is, RECOMMENDED: that a final order be entered which denies Petitioner's request for certification as a Minority Business Enterprise. DONE and ENTERED this 5th day of May, 1989, in Tallahassee, Leon County, Florida. CHARLES C. ADAMS 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 5th day of Mat, 1989. APPENDIX The following discussion is made of the proposed facts of the parties. Petitioner's Facts Paragraphs through 5 and the first two sentences to paragraph 6 are subordinate to facts found. The last sentence in paragraph 6 is contrary to facts found. Paragraph 7 is rejected to the extent that it creates the impression that Merrie J. Lee has sufficient understanding of the bidding and technical side of the business to be effectively in control of the management and daily operations of the corporation. Paragraphs 8 through 12 are subordinate to facts found. Paragraph 13 is subordinate to facts found with the exception of the second sentence which is contrary to facts found. Paragraph 14 is subordinate to facts found. Respondent's Facts Paragraphs 1 through 6 are subordinate to facts found as are all sentences in paragraph 7, excepting the last. The last sentence in paragraph 7 is unnecessary to the resolution of the dispute. Paragraphs 8 through 16 are subordinate to facts found. Paragraph 17 is unnecessary to the resolution of the dispute. Paragraphs 18 through 20 are subordinate to facts found. Paragraphs 21 through 23 are not necessary to the resolution of the dispute. COPIES FURNISHED: John C. Pelham, Esquire Pennington, Wilkinson, Dunlap and Camp 30375-A Capital Circle, N.E. Post Office Box 13527 Tallahassee, Florida 32317-3527 Stephen S. Mathues, Esquire Office of General Counsel Department of General Services Room 452, Larson Building Tallahassee, Florida 32399-0955 Ronald W. Thomas, Executive Director Department of General Services 133 Larson Building Tallahassee, Florida 32399-0955
The Issue As set forth by the parties in the Prehearing Stipulation and in their proposed recommended orders, the issue in this case is whether the bid submitted by Pass International, Inc., on the Booker T. Washington Middle School Project No. A-0557 is responsive with respect to compliance with the Minority/Women Business Enterprise Assistance Levels subcontracting requirement contained in the Invitation to Bid.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing, on the contents of the Pre-Hearing Stipulation, and on the entire record of this proceeding, the following findings of fact are made: At all times material to this proceeding, the School Board was a duly-constituted School Board charged with the duty to operate, control, and supervise all free public schools within the School District of Miami-Dade County, Florida, pursuant to Article IX of the Florida Constitution and to Section 230.03, Florida Statutes. Acestarz, Inc., was organized as a Florida for-profit corporation on September 2, 1997. Joseph Akoni, an African American male, owns 100 percent of the stock of Acestarz and acts as its president. In an agreement executed April 19, 1998, Joseph Robert Mijares, a Hispanic, agreed to act as Acestarz' qualifying agent and to apply for Acestarz's certification of authority as a general contractor. At the time, Mr. Mijares was an employee of Pass, and he acted as project manager on a number of Pass construction projects, both large and small. Mr. Mijares notified Pass of his agreement with Acestarz a few days after it was executed. Mr. Mijares held a state general contractor's certification. As qualifying agent, Mr. Mijares submitted the application for certification for Acestarz to the Florida Department of Business and Professional Regulation, Construction Industry Licensing Board, on April 23, 1998. A Temporary Authorization License was issued to Mr. Mijares on August 5, 1998, which authorized Acestarz to practice contracting through Mr. Mijares as its qualifying agent pending the processing and receipt of the permanent certification. By its terms, the temporary license was to expire on October 5, 1998. On or about June 1, 1998, Acestarz submitted a Certification Application to the School Board requesting certification as an African American M/WBE. In a letter dated June 1, 1998, Patricia Freeman, Director of the Division of Business Development and Assistance, notified Mr. Akoni that the application had been received. In the letter, Ms. Freeman stated: In the interim [while the application is pending], you may bid as a prime, or subcontractor, on future Dade County Public Schools contracting opportunities, set aside for, or requiring M/WBE participation. Should you be deemed the apparent low bidder or a subcontractor thereto, your application will be processed before contract award. Prime contractors who utilize subcontractors that are pending, but subsequently are deemed ineligible for certification, will be allowed to make a substitution, within the same racial or gender category as the firm being substituted. The School Board's BTW project is a competitive design- build project involving the conversion of Booker T. Washington Middle School into a high school. In order to submit a bid on the BTW project, prospective bidders were required to submit pre-qualification proposals for evaluation in August 1997. Pass and Danville-Findorff, among others, submitted pre-qualification proposals. After the School Board administrative staff evaluated the proposals, three firms, including Pass and Danville-Findorff, were pre-qualified to bid on the BTW project. On or about June 9, 1998, the School Board issued an Invitation to Bid on the BTW project. The bid specifications instructed the bidders to submit a lump-sum bid for all design and construction services required to complete the BTW project. The bid specifications further provided that the bids were to be submitted on or before July 28, 1998, and that, thereafter, the bids would be opened, read, and tabulated. According to the bid specifications, the "[a]ward of the contract will be made to the lowest responsible bidder for the actual amount bid." The time for submitting bids was extended to August 4, 1998. Included as part of the Invitation to Bid on the BTW project is a Special Provision for Compliance with M/WBE Subcontracting Assistance Levels Participation ("Special Provision"). The purpose of the Special Provision is to "ensure that Minority/Women Business Enterprises are afforded maximum opportunity to participate in School Board work." Section II.A., Special Provision. An M/WBE is defined in Section I.A.12. of the Special Provision as follows: Any legal entity which is organized to engage in commercial transactions and which is at least fifty-one (51) percent owned and controlled by minority persons. Minority person means a person who is a citizen or lawful permanent resident of the United States and who is: An African American, a person having origins in any of the Black racial groups of Africa; An Hispanic, a person of Spanish or Portuguese culture, including, but not limited to persons with origins in Mexico, South America [sic] Central America, or the Caribbean Islands, regardless of race; A Woman. Pursuant to the Special Provision, M/WBE assistance levels for one or more minorities are to be specified for all School Board projects. The assistance level for African American M/WBEs was established at eight percent of the total price bid on the BTW project. Section III.A. of the Special Provision provides in pertinent part: SUBMITTALS As a condition of responsiveness, all bid submittals shall contain the documents and information required below. . . . Sealed bids must contain a completed FORM FM 4828, BREAKDOWN OF PROJECT COST AND SUBCONTRACTORS/ CONSULTANT LIST, stipulating the name, and price for each Subcontractor, including the M/WBE category for those listed to meet the M/WBE subcontracting Assistance Level requirements. Letters of Intent (Attachment C-FM 4829) for listed M/WBEs used to meet the M/WBE subcontracting Assistance Levels must be presented by the apparent low bidder, to the Department of Contract Management, . . . within two (2) days (by no later than 2:00 p.m.) after the date, and time and location specified in the LEGAL ADVERTISEMENT AND THE INSTRUCTIONS COVERING OPENING OF BIDS. Letters of Intent prices must not be less than the amount listed on Form FM 4828, Breakdown of Project Cost and M/WBE Subcontractor/Consultant List. Letters of Intent for M/WBEs not listed on FM-4828, will not be considered in determining Compliance, unless the listed M/WBE becomes Unavailable. M/WBE Certification Applications (FM-3920) must accompany the Letters of Intent for all M/WBEs utilized to meet the Assistance Levels who are not certified nor pending certification as M/WBE's [sic] Dade County Public Schools at the time of bid submission. All bids, will be publicly opened, read, and tabulated in the School Board Auditorium, or other designated area, Dade County School Board Administration Building, by an authorized representative of the School Board. The submittal of the apparent low bidder being considered for award will be presented to the Division of Business Development and Assistance for an M/WBE subcontracting Compliance Review, in accordance with Section IV. of the SPECIAL PROVISION FOR COMPLIANCE WITH M/WBE SUBCONTRACTING ASSISTANCE LEVELS PARTICIPATION. If the apparent low Bidder is found to be nonresponsive or in Noncompliance, the Department of Contract Management shall notify the second low bidder . . . . Failure to submit the completed Form FM 4828 submittals at the bid opening may result in the bid being found nonresponsive. Both Pass and Danville-Findorff submitted sealed bids for the BTW project on August 4, 1998. The bid packages were opened on August 5, 1998. Pass had submitted the lowest lump-sum bid at $13,900,000, and Danville-Findorff had submitted the second lowest bid at $13,979,000. Pass submitted a Form FM 4828 with its bid in which it identified Acestarz and Manny & Lou as the M/WBEs that Pass intended to use to meet the eight-percent African American subcontracting assistance level. The listings on the Form FM 4828 submitted by Pass indicated that Acestarz would perform work in categories 9.01 through 9.06 for a price of $500,000 and that Manny & Lou would perform work in category 15.04 for a price of $700,000. Without Acestarz' $500,000 proposal, Pass's bid would not meet the eight-percent African American M/WBE assistance level. Section III.B.4. of the Special Provision provides as follows: The listing of a M/WBE Subcontractor [on Form FM 4828] by the Bidder shall constitute a representation by the Bidder that the listed Subcontractor is available and qualified, and a commitment by the Bidder that if it is awarded the contract, it will enter into a subcontract with the Subcontractor for the type of work, at a minimum of the price set forth in its submission. "Qualified" is defined in Section I.A.21. of the Special Provision as follows: A subcontractor is potentially Qualified to do specific work if at a minimum it meets all of the following criteria: It has or is able to obtain any and all bonds, insurance and licenses required to do such work and was duly informed by the Bidder that a bond, insurance or license was required and said Subcontractor included the cost associated with same in the bid quotation; It has the necessary experience, financial ability, organization, technical qualifications, skill and facilities to do such work; It is able to reasonably comply with the performance schedule needed for such work; It does not have an unsatisfactory record of integrity, judgment or performance; It is able to meet the applicable equal employment opportunity requirement if stipulated, and It is not otherwise ineligible to perform such work under applicable law and regulations. It is the general contractor's responsibility to determine whether a subcontractor is qualified to do the work or portion thereof. Nothing delineated herein shall be interpreted to waive the requirement that the subcontractor be legally licensed and certified at the time it is scheduled to perform such work. Prior to listing Acestarz on Form FM 4828, Henry Louden, who prepared Pass's bid package on the BTW project, did not ask Mr. Akoni about Acestarz' licensure status, the number of employees on its payroll, its financial capacity, or the type of equipment it had. Prior to submitting Pass's bid package, Mr. Louden mentioned to Mr. Akoni that he needed to look at bonding requirements because, when doing public work, subcontractors sometimes were required to provide bonds. Mr. Louden did not, however, inform Mr. Akoni of any licenses Acestarz might need to do the work proposed or of the insurance that Pass required its subcontractors to carry. The extent of Mr. Louden's knowledge about Acestarz prior to submitting Pass's bid package was described in the following two exchanges: Q. [By Mr. Flaxman] What did you know as it related to his [Joseph Akoni's] construction, his portion of construction, things of that nature prior to your [sic] submitting his name to the School Board? A. [By Mr. Louden] His experience? Q. Everything. Whatever you knew about him. A. About his whole firm, then? Q. Yes. A. Joe Akoni came to our office, inquired about bidding work with us, identified areas that he was familiar with, in construction areas that he is familiar with, and subsequent to that, I guess, he got together with Mr. Mijares in my office, and after that discussion, Mr. Mijares -- * * * THE WITNESS: Okay. Mr. Mijares got involved with Ace Starz [sic]. Ace Starz looked at a couple jobs in our office. Ace Starz submitted some bids to us on other jobs. Ace Starz was interested in submitting prices for the Booker T. Washington job. We provided plans to him. We reviewed the plans together, identifying the scope that we needed them to furnish to us, . . . . Q. . . . . Is there anything else you knew about Ace Starz, Inc. as it related to the construction of the project [prior to submitting Pass's bid package]? A. No.2 And, again, Q. (By Mr. Swimmer) Did you meet or did someone else on behalf of Pass meet with Mr. Akoni prior to Mr. Akoni giving a price on behalf of Ace Starz [sic] to go over the scope of work? A. [By Mr. Louden] Yes. Q. And did you discuss with him scope of work at that time? A. Yes. Q. And did you come away from that meeting with a sense of qualifications and ability of Ace Starz and Mr. Akoni [Objection by Mr. Flaxman.] MR. SWIMMER: Then, let me ask you -- I'll rephrase the question. BY MR. SWIMMER: Q. Did you reach a belief as a result of your interaction with Mr. Akoni regarding his capacity, his ability with regard to construction of the items for which he was pricing? A. Yes. Q. And what was that conclusion? A. His pricing and understanding of what we were requesting, from what I felt was necessary, in order to achieve -- to submit a price to me when we went through the plans, after he submitted the pricing, we reviewed it and it was consistent with what I was looking for, with other sub prices that we received. Q. Did you go through the plans with him, with Mr. -- A. Yes. Q: Did Mr. Akoni mark up the plans to describe the work which would be the scope of his price? A. I'm sure he did. I don't recall what he marked, whether he marked it. I identified specifically which areas he needed to price 3 On August 4, 1998, the date that bid packages on the BTW project were submitted to the School Board, Acestarz was not licensed by the state Construction Industry Licensing Board pursuant to Chapter 489, Florida Statutes, or by Miami-Dade County pursuant to Chapter 10 of the Code of Metropolitan Dade County, Florida. Once Pass was notified by the School Board that it had submitted the low bid, Pass timely submitted Letters of Intent from each of the three subcontractors it intended to use to meet the M/WBE assistance levels for the BTW project, as required by Section III.A.2. of the Special Provision. An application for certification for Acestarz was not submitted with Pass's bid package because Acestarz's certification application had been filed with the Division of Business Development and Assistance on June 1, 1998, and was still pending. Pass was determined to be the lowest responsive bidder and its bid package was forwarded to the Division of Business Development and Assistance for a compliance review to be conducted pursuant to the Special Provision.4 In Section I.A.4. of the Special Provision, "compliance" is defined as "[t]he condition existing when a successful bidder has met and implemented the requirements of this Provision." In Section I.A.6. of the Special Provision, "compliance review" is defined as "[a] review to determine whether the successful Bidder is in Compliance with these Provisions." "Successful Bidder" is defined in Section I.A.24. as "[t]he Bidder to which the contract is awarded." Even though the above-quoted sections of the Special Provision specify that a compliance review is done for the "successful" bidder after the contract for the project is awarded, the M/WBE compliance review is actually done before the contract is awarded in accordance with the procedures set out in Section IV. of the Special Provision. Section IV.A. provides in pertinent part: DETERMINATION OF COMPLIANCE Subsequent to bid opening and prior to award, the M/WBE Compliance Administrator will conduct a review of the bid submittals in order to determine Compliance with the Provision as follows: 1. Fulfillment of Established Assistance Levels If the total price for work to be performed by M/WBE Subcontractors as indicated in either the Breakdown of Project Cost and Subcontractors/Consultant List or Letters of Intent is sufficient to fulfill the established Assistance Levels, in each race/ethnic/gender category, the Compliance Administrator will issue a written Notice of Compliance to the Bidder. Pursuant to these provisions, the compliance review involves consideration of the cost breakdown for each M/WBE subcontractor listed by the lowest responsive bidder on the Form FM 4828; whether each subcontractor listed is a certified M/WBE, has an application for certification pending, or has filed a certification application with its Letter of Intent; and whether the price of the work to be done by each M/WBE subcontractor meets or exceeds the assistance levels specified in the bid documents. Ms. Freeman, in her capacity as Compliance Administrator, was responsible for conducting the compliance review of Pass's bid package. On August 14, 1998, before the compliance review had been completed but after Pass had been identified as the lowest responsive bidder, Danville-Findorff sent a notice of bid protest to Julio Alvarez in the School Board's contract administration section protesting the award of the contract for the BTW project to Pass. The August 14 notice of protest includes virtually the same factual allegations as those set out in the Petition which initiated these proceedings. Danville-Findorff supplemented the allegations contained in its August 14 notice of protest in letters dated August 19, 1998, and September 1, 1998, which included additional information regarding Joseph Mijares, the qualifying agent for Acestarz. On August 18, 1998, Pass sent to the School Board via facsimile an M/WBE Subcontractor/Consultant Letter of Intent executed by G. Family Ent., Inc., a certified M/WBE, in which that company agreed to perform the same scope of work that Acestarz had agreed to perform in its Letter of Intent submitted to the School Board on August 6, 1998.5 G. Family Ent., Inc., agreed to do the work for $500,000, the same price specified by Acestarz. Although the School Board never issued a formal response to Danville-Findorff's August 14 notice of protest, the issues raised were resolved when Ms. Freeman issued a Notice of Noncompliance dated August 26, 1998, in which she stated that, based on her analysis of Acestarz' status, Pass's bid did not meet the eight-percent assistance levels for African American M/WBEs established for the BTW project. Ms. Freeman's conclusion was based on a finding that Acestarz' $500,000 proposal could not be credited toward the African American assistance levels required for the BTW project because "ACESTARZ was neither qualified as a construction company on bid day, nor can it be certified as an M/WBE." Ms. Freeman refused to authorize Pass to substitute another M/WBE subcontractor for Acestarz because "it can only be assumed that Pass was fully aware of ACESTARZ' status." When it received the Notice of Noncompliance, Pass timely requested a meeting with Ms. Freeman, as permitted in Section IV.B.2. of the Special Provision. The meeting was held on August 28, and, on September 4, 1998, Ms. Freeman issued a Final Notice of Noncompliance in which she reiterated her conclusion that Pass's bid was not in compliance with the African American M/WBE assistance levels required for the BTW project. In the final notice, Ms. Freeman stated: ACESTARZ was not qualified to perform construction services of any nature at the time of bid. Not only did it not hold a State license but it was denied a County license without first obtaining the requisite local or state licenses. Therefore, it was not eligible or qualified to bid as a prime or a subcontractor. * * * In conclusion, Pass not only listed an unqualified firm, but one that was not legally organized to conduct business as a construction company. Therefore, Pass cannot be credited for including ACESTARZ to meet the M/WBE requirements, on this project. * * * To your request for immediate authorization to allow Pass to substitute [another M/WBE subcontractor for] ACESTARZ,"[6] please be advised that Pass . . . made" the same request on August 12, 1998, Please be advised that, other than certified M/WBEs, prime contractors are only credited for listing subcontractors, that meet all legal requirements, but fail to be certified for reasons determined by the Division, in accordance with M/WBE Certification requirements. ACESTARZ was not legally qualified to engage in the construction business at the time of bid opening, and withdrew its M/WBE Certification Application."[7] Therefore, a substitution for the firm cannot be allowed. Section IV.C.5. of the Special Provision provides that the Final Notice of Noncompliance "shall be final and conclusive. The Compliance Administrator shall recommend that the Compliance Review procedure be initiated with respect to the next lowest responsive Bidder, or all remaining bids may be rejected and the project readvertised." A compliance review was not initiated for Danville-Findorff because, on September 4, 1998, Pass delivered its Formal Written Protest to the School Board. Pass stated in the protest that "the stated basis for declaring Pass International, Inc. to be not in compliance with the M/WBE subcontracting requirements set forth in the notice of August 26, 1998, is clearly in error." Specifically, Pass challenged Ms. Freeman's conclusion that Acestarz was not qualified to do the work specified in the Form FM 4828 because it was not licensed at the time Pass submitted its bid. The issues raised in Pass's protest were resolved when Ms. Freeman sent Pass a letter dated September 29, 1998, entitled "RESCISSION OF NOTICES OF NONCOMPLIANCE" for the BTW project.8 Ms. Freeman rescinded the Final Notice of Noncompliance because, at the recommendation of the School Board's legal counsel, she reconsidered the definition of the term "qualified" contained in Section I.A.21. of the Special Provision and determined that, under this definition, Acestarz "is considered a qualified subcontractor for purposes of M/WBE Compliance." Specifically, Ms. Freeman concluded that, pursuant to Section I.A.21. of the Special Provision, it was not the responsibility of the Division of Business Development and Assistance to determine whether Acestarz was qualified to do the work included in Pass's bid submittal. Rather, according to Ms. Freeman, it was Pass's responsibility. In addition, Ms. Freeman concluded that, pursuant to Section I.A.21. of the Special Provision, an M/WBE does not need to be licensed or certified at the time the bid is submitted. Rather, it need be licensed to do the work and certified as an M/WBE Subcontractor in the appropriate category at the time it performs the work under the contract. During her re-evaluation of the notices of noncompliance, Ms. Freeman also decided that it was improper to conclude during the compliance review that Acestarz was not certifiable as an African American M/WBE. A compliance review to determine whether M/WBE assistance levels are met by a bidder is done pursuant to the criteria set out in the Special Provision; the decision to grant or deny an application for M/WBE certification is based on an evaluation of the application pursuant to the standards established in School Board Rule 6Gx13- 3G-1.05. As a result, Ms. Freeman advised Pass in the September 29 letter that, as "the next step in the process," the Division of Business Development and Assistance would complete its review of Acestarz' certification application.9 Some of the criteria for certification specified in School Board Rule 6Gx13-3G-1.05 are the same as or similar to the minimum criteria for an M/WBE subcontractor to be qualified pursuant to Section I.A.21. of the Special Provision. In a letter dated October 23, 1998, entitled "DENIAL OF MINORITY/WOMEN BUSINESS ENTERPRISE (M/WBE) CERTIFICATION," Ms. Freeman advised Joseph Akoni that the documents he submitted failed to show that he "has the capability, knowledge, training, education, and experience needed, to independently guide the future and destiny of Acestarz' construction activities." (Emphasis in original.) Ms. Freeman also observed that, as a matter of statutory law, Acestarz' Hispanic qualifying agent, Robert Joseph Mijares, "has the responsibility to supervise, direct, manage and control the contracting and construction activities of Acestarz." Ms. Freeman concluded: "In summary, Acestarz's construction activities appear, at best, to be managed and controlled jointly by an African American and a non-African American. Therefore, the firm failed to establish eligibility for certification as African American-owned and controlled business, as prescribed by School Board rules." A copy of this denial notice was sent to Pass. Acestarz appealed the decision to deny its application for certification as an African American M/WBE. Ms. Freeman's decision was affirmed by the Certification Appeals Committee, and, in a letter dated November 20, 1998, Ms. Freeman sent to Acestarz' attorney the "FINAL MINORITY/WOMEN BUSINESS ENTERPRISE (M/WBE) CERTIFICATION DENIAL NOTICE." Section III.D. of the Special Provision specifies that, if an M/WBE listed on Form FM 4828 is "determined not to be certifiable, [the M/WBE] must be substituted with another certified or certifiable M/WBE before award." Accordingly, on December 11, 1998, Pass proposed to use TCOE Corporation, a certified African American M/WBE, as a substitute for Acestarz, to do the same scope of work for $550,000. The request to substitute TCOE had not been granted or denied at the time of the final hearing. Summary With respect to the first and second factual issues raised in Danville-Findorff's formal bid protest, the evidence presented is sufficient to establish that Acestarz was neither licensed nor certified as an African American M/WBE at the time Pass submitted its bid on the BTW project. This is irrelevant, however, to a determination of whether Pass's bid is in compliance with the bid specifications because, pursuant to Section I.A.21. of the Special Provision, an M/WBE subcontractor need be licensed and certified only "at the time it is scheduled to perform" work under the contract. With respect to the third issue raised in its formal bid protest, Danville-Findorff presented evidence during the hearing regarding the licensing requirements for construction contractors found in Chapter 489, Florida Statutes, and in Chapter 10, Code of Metropolitan Dade County. Its apparent aim in presenting this evidence was to establish that, because Acestarz was not licensed by the state or the county, Acestarz could not submit a proposal to Pass for inclusion in its bid on the BTW project under the definition of "contracting" in the statute and in the code provision. In essence, Danville-Findorff is attempting to challenge the provision in Section I.A.21. of the Special Provision which requires that an M/WBE subcontractor be licensed at the time it is scheduled to perform work on the project. Danville-Findorff may not do so in this proceeding: The notice of protest challenging the specifications contained in an invitation to bid must be filed within seventy-two hours "after the receipt of . . . intended project plans and specifications in an invitation to bid or request for proposals, and the formal written protest shall be filed within 10 days after the date the notice of protest is filed." Section 120.57(3)(b), Florida Statutes (1997). Danville-Findorff protested only the School Board's intention to award the contract to Pass, and the protest was filed after the bids were opened. With respect to the fourth issue raised in Danville- Findorff's formal bid protest, the evidence is uncontroverted that Joseph Mijares, an employee of Pass until October 1998, acted as the qualifying agent for Acestarz, as that term is defined in Section 489.105(4), Florida Statutes. Danville- Findorff's purpose in presenting this evidence is apparently to establish that Mr. Mijares exerts complete control over Acestarz by operation of this statute. According to Danville-Findorff, this level of control by a Hispanic violates School Board Rule 6Gx13-3G-1.05.I. which requires that an African American M/WBE be fifty-one percent "owned and controlled, in form and in substance" by African Americans. The issue of control is, however, not relevant to a determination of whether a bidder is in compliance with the terms of the Special Provision. Rather, the issue of control is relevant only to a determination of whether an application for certification as an African American M/WBE should be granted or denied pursuant to School Board Rule 6Gx13-3G-1.05. With respect to the sixth issue raised in its formal bid protest, Danville-Findorff presented no credible evidence to establish that it was placed at a competitive disadvantage with regard to its bid on the BTW project because an employee of Pass acted as qualifying agent for Acestarz for purposes of Acestarz' application for licensure as a general contractor. With respect to the seventh issue raised in Danville- Findorff's formal bid protest, the evidence is uncontroverted that Acestarz did not submit an application for certification as an African American M/WBE with its Letter of Intent. This was unnecessary pursuant to Section III.A.3. of the Special Provision because Acestarz' application for certification was submitted on or about June 1, 1998, and was pending at the time Pass's bid was submitted. With respect to the fifth and eighth issues raised in its formal bid protest, Danville-Findorff presented sufficient evidence to establish with the requisite degree of certainty that, at the time the bid package was submitted, Pass did not satisfy the eight-percent assistance level for African American M/WBE participation on the BTW project: Pass did not satisfy the responsibility imposed on it in Section I.A.21. of the Special Provision to determine whether Acestarz was "qualified" or "potentially qualified” to do the work it had proposed to do on the BTW project. Mr. Louden, the Pass employee who prepared the Pass's bid package for the BTW project, did not possess adequate information regarding Acestarz or its president, Mr. Akoni, to determine whether Acestarz satisfied the criteria set out in Section I.A.21., which are the minimum criteria that must be met by a subcontractor to be "potentially Qualified to do specific work." In addition, Mr. Louden failed to make any meaningful inquiry into the qualifications of Acestarz. Because Pass lacked adequate information regarding Acestarz' qualifications and failed to make meaningful inquiry to ascertain Acestarz' qualifications at the time Pass submitted its bid package, Pass could not, in good faith, represent to the School Board that Acestarz was "qualified" or “potentially qualified” at the time the bid was submitted, which it did pursuant to Section III.B.A. of the Special Provisions when it listed Acestarz on the Form FM 4828.9 Because Pass did not conform to the requirements of Section I.A.21. and Section III.B.4. of the Special Provision when it listed Acestarz as a "qualified" or “potentially qualified” African American M/WBE subcontractor, it was not entitled to use Acestarz to meet the African American M/WBE assistance levels for the BTW project at the time it submitted its bid. Furthermore, under these circumstances, Pass cannot substitute another subcontractor for Acestarz because that option is available pursuant to Section III.D. of the Special Provision only upon the denial of the application for certification of an M/WBE which was not certified at time the bid was submitted. Because Pass's bid does not meet the assistance levels established for African American M/WBEs set out in the Special Provision for Compliance with M/WBE Subcontracting Assistance Levels Participation, Pass's bid was not in compliance with the Special Provision at the time it was submitted. Therefore, Pass's bid is not responsive to the bid specifications for the BTW project. The award the contract for the BTW project to Pass would be contrary to the bid specifications and would be arbitrary in light of the facts found herein.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Miami-Dade County School Board reject the bid of Pass International, Inc., as non-responsive to the bid specifications and that a compliance review be initiated with respect to the next lowest responsive and responsible bidder. DONE AND ENTERED this 14th day of April, 1999, in Tallahassee, Leon County, Florida. PATRICIA HART MALONO 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 14th day of April, 1999.
The Issue The primary issue in this case is whether the Minority Business Enterprise (MBE) certification issued by the South Florida Water Management District (SFWMD) to the Respondent, Berryman & Henigar, Inc. (BHI) should be revoked. In addition, BHI seeks an award of attorney's fees and costs under Section 120.595(1), Florida Statutes.
Findings Of Fact It is undisputed that Raymond J. Berryman is an "Asian American" under the part of the definition of "Minority" person under Florida Administrative Code Rule 40E-7.621(12)(b). (All rule citations are to the current Florida Administrative Code.) Mr. Berryman owns 77.4 percent of Berryman & Henigar Enterprises, Inc. (BHE), a Nevada corporation formed in March 1994. BHE is the sole owner of Berryman & Henigar, Inc. (BHI), a Florida corporation and the Respondent in this case. BHE also owns holds 100 percent of the stock of Berryman & Henigar, Inc., a California corporation (BHI California), and Employment Systems, Inc., a California corporation (ESI). BHE also holds ten percent of the stock of GovPartner.com, a Nevada company. BHI and BHI California are both engineering firms. BHI's business in Florida is oriented more towards environmental engineering consulting. The business of BHI California in that state is more oriented towards engineering management consulting. BHI California does more building safety and project management work than BHI in Florida. Notwithstanding these differences between the business of the two corporations, they can be said to be in business in the same or an associated field of operation. BHE provides a corporate shield and consolidated tax reporting for the companies it owns. Most of its directors and officers also serve as directors and officers of the subsidiaries. As a result, BHI and BHI California share the following directors: Ray Berryman, Mary Berryman, Jon Rodriguez, and Scott Kvandal. They also share three or four officers, including Mr. Berryman as CEO. BHE also provides accounting, legal, human resource, and marketing services to all the affiliates under the holding company's umbrella. BHE's marketing department refers to both BHI and BHI California as "Berryman and Henigar" in order to imply the size and strength of BHE and all of its affiliates. By holding both businesses out as one large company, the marketing department attempts to make BHI "look as grandiose as possible." BHE has a negative net worth, as reflected in the consolidated statements of its affiliates. BHI itself has approximately 114 permanent, full-time employees; however, altogether, BHI and its affiliates have well over 200 permanent, full-time employees (although the exact number of employees of BHI's affiliates was not clear from the evidence). Candice Boyer, SFWMD's Senior MBE Coordinator, testified that SFWMD consistently interprets its MBE rules to disqualify an entity either: (1) owned by a holding company not certified by SFWMD as an MBE, or at least not able to qualify for such certification (e.g., by not being domiciled in Florida); (2) affiliated with or sharing resources with another business concern in the same or an associated field of operation if the affiliate is not certified by SFWMD as an MBE, or at least is not able to qualify for such certification (e.g., by not being domiciled in Florida); or (3) whose net worth, or number of permanent, full-time employees, together with all affiliates, exceeds the rule's limits. However, the evidence of SFWMD's actual practice (which was limited to its practice with respect to BHI and ESJV) did not support Boyer's testimony in that regard. BHI first sought certification from SFWMD in July 1996 under an MBE-type program in effect at the time and was denied because the gross receipts of BHI, apparently together with its affiliates, were too high under the program's guidelines. SFWMD's MBE rules, as first adopted in Part VI of Florida Administrative Code Rule Chapter 40E-7, entitled "Supplier Diversity and Outreach MBE Contracting Rule," went into effect on October 1, 1996. In April 1997, SFWMD "graduated" BHI under one of the new MBE rules (since repealed) that counted subcontractor participation by a firm exceeding the size standards (at that time, $3 million net worth and $2 million in net income after federal income taxes, excluding carryover losses) towards a prime contractor's MBE participation goal. In December 1997, BHI updated its application for MBE certification and was granted full certification in the fields of civil engineering, surveying, and construction management for a three-year period of time, even though the application revealed BHI's continued affiliations with BHE and the other affiliated companies. In March 2001, BHI was re-certified for another three years notwithstanding that it continued to be affiliated with BHE and the other companies. Boyer's only explanation was that she should have investigated the affiliates in December 1997 and March 2001 but did not. In late 2001 or early 2002, a joint venture called Everglades Survey Joint Venture (ESJV) sought MBE certification in the field of surveying, with BHI as the qualifying member of the joint venture. Certification was denied because Mr. Berryman did not have a required surveyor's license, as required by Rule 40E-7.653(5). Although not necessary to the decision, the Recommended Order entered by Administrative Law Judge Donald R. Alexander found that ESJV otherwise met the requirements for certification. SFWMD entered a Final Order adopting those findings. Confusing evidence presented in the course of the ESJV proceeding as to BHI's net worth and number of employees caused SFWMD to focus on those issues and cause an investigation to be conducted by its Office of the Inspector General, which is defined by Rule 40E-7.621(14) as the SFWMD "office which provides a central point for coordination of and responsibility for activities that promote accountability, integrity, and efficiency in government as referenced in Section 20.055(2), F.S." The investigation, which was conducted by a consulting auditor employed by SFWMD named John Timothy Beirnes, also focused on the rules dealing with those issues and resulted in an investigative report advancing the interpretations of SFWMD's MBE rules ultimately used to support the decertification recommendation of the Inspector General, Allen Vann. Notwithstanding Boyer's testimony as to SFWMD's purported consistent interpretations of its rules, there was no evidence that SFWMD asserted these interpretations prior to issuance of the Inspector General's investigative report. Boyer also testified that other government agencies in Florida uniformly interpret their MBE-type programs in a manner that would disqualify BHI in this case. However, the evidence was clear that BHI is certified under the MBE-type programs of other agencies in Florida, including the State of Florida Department of Management Services, Orange County, the City of Orlando, and the City of Tampa. One of SFWMD's exhibits was the affidavit of an Operation and Management Consultant I for the State of Florida Department of Management Services stating: "If a firm is affiliated with other firms, I count the number of employees as well as the net worth of the firm together with all of its affiliates." SFWMD's PRO contended that this hearsay statement supported Boyer's testimony. Actually, besides being inconsistent with the action of the Department of Management Services in certifying BHI as an MBE, the hearsay statement is ambiguous, and it is not clear whether the affidavit supports Boyer's testimony as to the purported uniform interpretation of all state agencies. SFWMD's PRO cites Petitioner's Exhibit 10, page 265, as evidence that Palm Beach County decertified BHI for exceeding size limitations, contrary to Mr. Berryman's recollection of never having had an MBE-type certification decertified. In fact, the exhibit merely evidences decertification because BHI failed to respond to a request for information needed for re-evaluation of BHI's continued eligibility under recent changes to provisions of the Palm Beach County Code. In addition, while the exhibit reflects the section numbers of the changed provisions, the provisions are not further identified; and it is not clear from the evidence that they related to size limitations. Finally, the evidence was that the requirements of MBE-type programs of different jurisdiction in Florida can vary except, as of October 1, 1998, in certain respects. See Conclusion 31, infra. For that reason, denial of certification or decertification in one jurisdiction does not necessarily require similar action in another jurisdiction--which is one reason why SFWMD has not reciprocated any certifications by other jurisdictions under Rule 40E-7.651(1). No Improper Purpose BHI takes the position that SFWMD's purpose in seeking revocation of BHI's MBE certification after the Final Order in the ESJV case was improper. But the findings in the ESJV case relied upon by BHI were not necessary to the denial of EVSJ's application, which was based on the joint venture's not having the required professional license as a surveyor. It does not appear that the issues presented in this case were fully litigated in the ESJV case. It appears that the confusing evidence presented in the course of the ESJV proceeding as to BHI's net worth and number of employees prompted SFWMD to focus on those issues. In so doing, SFWMD also focused on the rules dealing with those issues and ultimately advanced interpretations of its MBE rules supporting revocation. It is not found that SFWMD fashioned those interpretations for an improper purpose--i.e., "primarily to harass or to cause unnecessary delay or for frivolous purpose or to needlessly increase the cost of licensing or securing the approval of an activity." Section 120.595(1)(e)1, Florida Statutes. Aside from the relative merits of the positions of the parties on the proper interpretation of the pertinent statutes and rules, and the earlier decision in the ESJV case, BHI's evidence of improper purpose essentially involved the timing of SFWMD's decision to initiate decertification proceedings in relation to the letting of contracts for work in which BHI intended to participate as a subcontractor, and the resulting monetary impact on BHI. BHI's evidence was insufficient to prove improper purpose.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that BHI's MBE certification not be revoked. DONE AND ENTERED this 12th day of May, 2003, in Tallahassee, Leon County, Florida. ___________________________________ J. LAWRENCE JOHNSTON 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 12th day of May, 2003. COPIES FURNISHED: R. Dean Cannon, Jr., Esquire Gray, Harris & Robinson, P.A. 301 East Pine Street, Suite 1400 Post Office Box 3068 Orlando, Florida 32802-3068 Catherine M. Linton, Esquire Frank M. Mendez, Esquire South Florida Water Management District 3301 Gun Club Road West Palm Beach, Florida 33406-3007 Henry Dean, Executive Director South Florida Water Management District 3301 Gun Club Road West Palm Beach, Florida 33406-3007
