Findings Of Fact On August 22, 29, and September 5, 1994, Respondent, School Board of Dade County (School Board), advertised for bids for Project No. KS-0004, Roof Repair/Replacement and Asbestos Removal at American Senior High School. The advertisement stated that "The mechanical and electrical trades have been set aside to be performed by a minority-owned and operated firm." The advertisement made no mention of any requirement that the set-asides were to be performed by minority-owned and operated firms certified by Dade County Public School/Division of Business Development and Assistance (DBDA). The bid and contract documents which were delivered to all interested bidders including Petitioner, Murton Roofing Corporation (Murton), contained page 00030-2 providing various definitions, including the definition of "minority owned and operated business participation" as follows: MINORITY OWNED AND OPERATED BUSINESS PARTICIPATION - This bid is limited to those individuals and businesses (51 percent) owned and controlled by African-American, Hispanics, and Women which are so listed by the Dade County Public Schools/Division of Business Development & Assistance prior to bidding, or to provide sufficient data to verify and certify such ownership and control at the time of the bid. Award will be made to the low bidder meeting this and other project specifications and requirements. Page 00030-2 had been included in the project specifications section dealing with legal advertisements. By addendum issued September 8, 1994, the School Board deleted this page from the bid documents. Section I A of the Special Provisions, page 1 defines Minority/Women Business Enterprises as follows: Any legal entity which is organized to engage in commercial transactions and which is at least 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, Central America or the Caribbean Islands regardless of race. A woman. The Project Manual defines a "M/WBE Certification Application" as a "statement signed by an M/WBE contractor, containing certain information with respect to the ownership and control of the firm (See Attachment B-FM 3920)." Page 16 of the Project Manual states that "[a]t any time there is a change in ownership or control of the firm, the M/WBE shall, immediately following the change, submit a new M/WBE Certification Application." Page 2 of Section 1 A of the Special Provisions provides: A subcontractor is qualified to do specific work if 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; It has the necessary experience, financial ability, organization, technical qualifications, skill and facilities to do such work; It is able to comply with the performance schedule reasonably 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. 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. Section III, titled Bid Documents, Section III A, Submittals, states: As a condition of responsiveness, all bid submittals shall contain the documents and information required below. Non-submittals or incomplete submittals shall be cause for finding a Bidder nonresponsive and for the contract not to be awarded to the Bidder. Failure to submit completed forms and other required information, within the time period specified, can neither be cured by supplementary submittals and testimony at hearings, nor shall the nonresponsiveness of the bid be waived, negotiated or compromised. In its bid, Murton listed Goral Enterprises (Goral) as the subcontractor for the mechanical work on the project. Murton indicated on the subcontractor list that Goral was a woman business enterprise. At the time that Murton submitted its bid, Goral was not certified as a M/WBE by DBDA and Murton did not submit with its bid an application from Goral for certification as a M/WBE by DBDA. Goral was certified as a Disadvantaged Business Enterprise (DBE) by Metropolitan Dade County's Department of Business and Economic Development. Murton relied on Goral's DBE certification to met the M/WBE requirements of the project specifications. The DBE program is a separate program from the School Board's M/WBE program. The School Board does not give reciprocity to contractors who are certified as DBE's for acceptance in the School Board M/WBE program. Goral had been denied certification as an MBE by the Commission on Minority Economic and Business Development approximately two weeks prior to Murton submitting its bid for the project. The project specifications do not state that a contractor certified as a DBE will be deemed to meet the criteria of a M/WBE. Intervenor, A-1 Duran Roofing, Inc., also submitted a bid on the project; however, its bid was rejected as nonresponsive. By letter dated October 13, 1994, the School Board advised Murton that it was not in compliance with the special provisions of the project specifications because Goral was neither certified as a M/WBE nor had certification pending; therefore Goral could not be used to meet the M/WBE requirements for the mechanical work on the project. By letter dated October 14, 1994, Murton requested a meeting with the Contract Administrator to discuss the Notice of Noncompliance issued the day before. A meeting was held on October 18, 1994. On October 21, 1994, the School Board issued a Final Notice of Noncompliance. On October 26, 1994, the School Board issued a Revised Final Notice of Noncompliance, wherein it inaccurately stated that the legal advertisement required that the M/WBE's be certified by the DBDA at the time of submittal or that the bid submittal contain sufficient data to verify and certify M/WBE qualification. However, the Revised Final Notice of Noncompliance also stated that the bid document when read as a whole required that the M/WBE be either certified or pending certification at the time of bid submittal or that a certification application be submitted with the bid. The notice stated that Goral did not meet the requirements of the bid documents for a M/WBE. Murton requested an appeals hearing before the Certification Appeals Committee (Committee). The hearing was convened on October 26, 1994, at which time it became apparent to the Committee that the October 21, 1994 letter contained an error in that the paragraph stating that M/WBE's must be certified by the DBDA prior to bidding or provide sufficient data to verify or certify such ownership and control at the time of bid had not in fact appeared in the advertisement and the second page of the advertisement in the project manual which represented that this language had been a part of the advertisement had been removed by addendum. The meeting was recessed in order to review and obtain clarification of documentation presented by Murton. The Committee reconvened on November 15, 1994. At that time, upon reviewing the project manual and other documentation, the Committee determined that the language remaining in the Project Manual, read as a whole, did require DBDA certification and voted to uphold the determination of noncompliance. The School Board has interpreted similar project specifications to require that the proposed M/WBE be certified by DBDA at the time of bid submittal or that the bidder submit sufficient data with the bid to be able to determine whether the entity qualifies as a M/WBE. Such data is to be submitted on the application form contained in the project specifications as Attachment B- FM 3920, which is the form used by DBDA for application for certification as a M/WBE. The School Board has on numerous occasions rejected bidders for failure to submit either currently certified M/WBE's as subcontractors or for failure to submit an application for DBDA certification for the subcontractor with the bid. School Board Rule 6Gx13-3G-1.02 delineates the objectives for its M/WBE program. The rule states that the program's objectives may be accomplished by affirmative actions which include set aside contracts, subcontracting goals, prime contracting and designated scopes of work. In the instant case the School Board had designated certain portions of the work of the project to be performed by M/WBE firms. School Board Rule 6Gx13-3G-1.02 IV. provides: In order to ensure that business firms seeking to participate in the M/WBE Program are at least fifty-one (51) percent legitimately owned, operated and controlled by minorities, each M/WBE firm shall be required to be certified as to its minority ownership at the time of each bid award. Such certification shall be on the basis of a completed M/WBE Certification Application with supporting documentation, submitted by the firm, sworn to by an officer of the firm, invest- igated and verified by the Division of Business Development and Assistance, prior to any contract award. The School Board desires to rebid the project. On January 9, 1995, the School Board placed a new legal advertisement for bid on the project, specifically indicating that it would require and accept only DBDA certified M/WBE's.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered dismissing the Murton Roofing Corporation's Petition and rejecting all bids for the project and rebidding the project. DONE AND ENTERED this 1st day of March, 1995, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND 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 1st day of March, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-6919 To comply with the requirement of Section 120.59(2), Florida Statutes (1993), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. Paragraphs 1-5: Accepted in substance. Paragraph 6: Accepted that Goral was certified as a DBE but rejected that DBE certification meant that Goral was qualified as a M/WBE. Paragraphs 7-11: Accepted in substance. Paragraph 12: Accepted that that portion was deleted, but rejected to the extent that it implies that section was the only portion of the bid documents relied upon by the School Board. Paragraphs 13-15: Rejected as not necessary. Paragraph 16: Accepted in substance. Paragraph 17: Rejected as constituting argument. Paragraph 18: Accepted to the extent that that was his testimony. Paragraphs 19-22: Accepted in substance. Paragraphs 23-24: Rejecting as constituting argument. Paragraphs 25-26: Rejected as subordinate to the facts actually found. Paragraph 27: Rejected as constituting argument. Paragraph 28: There is no paragraph 28. Paragraph 29: Rejected as constituting argument. Paragraphs 30-31: Rejected as not supported by the greater weight of the evidence. Respondent's Proposed Findings of Fact. Paragraphs 1-3: Accepted in substance. Paragraph 4: The first two paragraphs are rejected as unnecessary. The remainder is accepted in substance. Paragraphs 5-10: Accepted in substance. Paragraphs 11-12: Rejected as constituting argument. Paragraph 13: Rejected as subordinate to the facts actually found. Paragraph 14: The first sentence is rejected as constituting argument. The second sentence is accepted in substance. COPIES FURNISHED: Vincent F. Vaccarella, Esquire Elder & Kurzman Grand Bay Plaza, Suite 702 2665 South Bayshore Drive Coconut Grove, Florida 33133 Phillis O. Douglas Board Attorney Dade County Public Schools School Board Administration Building 1450 Northeast Second Avenue Miami, Florida 33132 Steven M. Rosen, Esquire 5601 Building 5601 Biscayne Boulevard Miami, Florida 33137 Octavio J. Visiedo, Superintendent Dade County School Board 1450 Northeast Second Avenue, #403 Mimai, Florida 33132-1308 Frank T. Brogan Commissioner of Education The Capitol Tallahassee, Florida 32399-0400
Findings Of Fact Introduction On March 31, 1983, Respondent, Department of Transportation (Department), gave notice to qualified contractors that it would receive sealed bids on the following project: BROWARD COUNTY: FEDERAL AID PROJECT NO. I-iD-75-4(38)225 (JOB NO. 86075-3417), SR-93, (I-75), from S. of Nova Dr. to S. of S.W. 13th St.. Work consists of Extra Heavy Embankment; Pav't. of Alt. 10" Limerock Base or 9", 7" or 6" Asph. Base Cse. (Type 1, 2 or 3) and Section of Alt. 8" Limerock Base of 7 1/2", 6" or 5" Asph. Base Cse. (Type 1, 2 or 3) all with Type S Structural Cse. and Asph. Conc. Fri-tion Cse. (FC-2), Shoulder Pav't.; Two Bridges (OAL 821') of Conc. Slab Deck and Prestr. Conc. Beams on Conc. Piers and Spread Footings; Conc. Handrail (Barrier and Sidewalk); Conc. Box Culverts; Storm Sewer and Small Drainage Structures; Conc. Curb and Gutter and Shoulder Gutter; Staked Silt Barrier; Guardrail (Rdwy.); Fencing; Roadway Signs; Pav't. Markings (Rer. Pav't. Markers and Thermoplastic Striping); and Incidental Items. Length 1.914 miles. (B. I. 440803) cost $20.00 FEMALE GOAL 1 percent M.B.E. GOAL 5 percent TOTAL M.B.E. GOALS 6 percent NOTE: ON-THE-JOB TRAINING WILL BE REQUIRED FOR THIS PROJECT. (Approx. 550 Cal. Days) The project is also known as the "Nova Drive Project". Such bids were to be received by the Department no later than April 27, 1983. Seven construction firms submitted bids on the project. As is pertinent here these included petitioner, Badgett Resources, Inc. (Badgett), a firm located in Fort Lauderdale, Florida, and respondent, Capeletti Brothers, Inc. (Capeletti), a firm with principal offices located in Miami, Florida. Capeletti submitted a bid for $6,917,515.50, which was the lowest bid on the project Badgett's bid was for $6,922,625.50, or $5,110.00 higher than the Capeletti bid, and was the next lowest bid. On April 27, 1983 the Department opened the sealed bids. Because certain information was not furnished with Capeletti's bid, Capeletti made another submittal on May 9, 1983. After reviewing this information, and having further communications with Capeletti, the Department finally concluded on May 17, 1983, that Capeletti met all applicable requirements. Thereafter, on May 20, 1983 the Department posted the bids and designated Capeletti as the lowest responsive bidder. On May 23, 1983 Badgett filed its notice of protest in which it requested a formal hearing prior to the award of the contract to Capeletti. That same day the Department notified Badgett that because it believed the failure to proceed with the award of the contract "would result in an immediate and serious danger to the public health, safety and welfare", it intended to immediately award the contract to Capeletti pursuant to Subsection 120.53(5)(c), Florida Statutes. It did so since the project was federally funded with Discretionary Interstate Lapse Funds, and if work did not commence prior to June 27, 1983, the State would suffer the loss of those funds. Capeletti began construction on the project prior to June 27 and has actively continued such work since that time. Bid Specifications According to the notice requesting bids, all work related to the project had to comply with the "Plans, Specifications and Special Provisions of the State of Florida Department of Transportation." These bidding requirements are more commonly known as the Bid Specifications. As is pertinent here, the Bid Specifications included a requirement that each bidder comply with the Minority Business Enterprises (MBE) requirements developed by the Department. The Department has a policy that firms owned and controlled by minorities or women shall be given the maximum opportunity to participate in the performance of contracts let by the Department. In this vein it has established overall minority goals in Rule 14-78.03, Florida Administrative Code, for its MBE program. These include contract goals for minority business enterprises (firms owned and controlled by minorities) and contract goals for women business enterprises (firms owned and controlled by women), both of which applied to the project in question. The MBE goals for the Nova drive Project were 5 percent for minority business enterprises and 1 percent for women business enterprises. This meant that 5 percent and 1 percent of the estimated total dollar value of the contract should have been performed by certified minority and women controlled enterprises respectively. However, Rule 14-78.03(1)(c)2. provides that if the successful bidder cannot meet the 5 percent and 1 percent goals, it "must satisfy the Department that the contractor has made good faith efforts to meet the goals." In this regard, the Rule requires that the bidder "actively and aggressively" attempt to comply with the goals, and sets forth nine relevant factors or types of effort that may be considered in determining whether a good faith effort has been made. (Rule 14-78.03(1)(c)2.a.i.-ix). The Rule cautions that "pro forma" good faith efforts are unacceptable. Department rules and the Bid Specifications made it quite clear that in order to be eligible to participate as MBE's the Department must first certify the firm. The specific requirements for certification are set forth in Rule 14- 78.05, Florida Administrative Code. A failure to comply with these requirements can result in the denial of a bid award. The Bid Specifications provided the following requirement pertaining to the submission of information showing compliance with the MBE goals: The Florida Department of Transportation prefers the Minority Business Enterprises Form I to accompany the bid documents. If this is not possible, the form must be received by the Florida Department of Transportation's Office of Minority Programs, attention MBE Liaison Officer, no later than ten (10) calendar days after the bid opening date. (Emphasis added) The term "calendar day" is defined in the Bid Specifications as "every day shown on the calendar, ending and beginning at Midnight". Since the bid opening date was April 27, 1983, a strict interpretation of this standard required that the MBE submissions by the bidders to be filed with and received by the Department's Office of Minority Programs no later than Saturday, May 7, 1983. This is confirmed by a memorandum prepared by the Secretary of the Department on June 4, 1982 which was sent to all prequalified contractors and clarified the requirements relative to MBE's. There he stated that "(i)t must be remembered that all the above information (including MBE Utilization Form No. 1) is to be in the Department's hands within ten (10) days following the bid opening as opposed, for example, to simply being mailed within the ten-day-period." However, it-has been an informal Department policy for many years to require a document to be filed on the next following Monday when the original deadline falls on a Saturday or Sunday. The Minority Business Enterprises Certification Form No.1 to be submitted in conjunction with the bid, or ten days thereafter, is a two-page Department prescribed form that identifies each minority subcontractor to be used on the project by the contractor, the class of work, dollar amount of work, percent of contract, sex, type of minority, and whether the subcontractor has been certified by the Department as an MBE. The Bid Specifications provide not only that "(t)he MBE Utilization Form No.1. . .only include firms which are certified by the Department", but also that they be ". . .certified prior to the submission of the. . .Form". (Emphasis added). MBE Submissions by the parties Badgett submitted its MBE Utilization Form No.1 with its bid on April That form reflected that Community Asphalt, Post Office Box 9179, Pembroke Pines, Florida, would perform the paving portion of the project at a cost of $1,022,853.97, or 15 percent of the total contract. Community is Hispanic owned and controlled, and was represented on the form as being certified by the Department. A female controlled firm identified as Triple J, Post Office Box 6321, Fort Myers, Florida, was listed as the grassing subcontractor, which represented 2 percent of the total contract. These percentages exceeded the 5 percent and 1 percent goals established by the Department. Badgett did not utilize the lowest bid it received for grass work since that was submitted by a non-MBE firm. Had it done so, its bid on the project would have been $7,111.63 lower, or approximately $2,000 less than the overall bid submitted by Capeletti. Capeletti did not submit an MBE Utilization Form No. 1 or its MBE "good faith efforts" submittal with its sealed bid. Neither did it make such submissions by the tenth calendar day, or May 7, 1983. On the following Monday, May 9, Capeletti filed an incomplete MBE Utilization Form No. 1 and a "good faith efforts" submittal. Form No. 1 reflected that Pro Contracting, Inc., 15111 Falkirk Place, Miami Springs, Florida, a Hispanic owned and controlled firm, would perform 5.04 percent of the total contract work. In answer to the question of whether the firm has been certified by the Department, Capeletti answered that such certification had been "applied for". Capeletti also listed three female owned and controlled firms, Len Hazen Painters, Inc., Advance Barricades and Signing, Inc., and C & G Specialties, Inc., as being subcontracted to perform 1 percent of the total contract price. The first two firms were shown as being certified by the Department while Capeletti indicated that, like Pro Contracting, certification for C & G Specialties had been "applied for". The percentage levels (5.04 percent and 1 percent) met the Department established goals. Although Capeletti indicated on its Form No. 1 that MBE certifications had been "applied for", this was incorrect. Neither Pro Contracting or C & G Specialties had in fact filed such an application on that date. Further, C & G Specialties had not applied for certification as of the time of the final hearing in mid-August. Both firms were also conspicuously omitted from the directories published by the Department which listed all MBE firms qualified to participate in Department contracts. On May 10, 1983, the Department Minority Programs Coordinator reviewed the Capeletti filing and found it to be deficient. He then telephoned Capeletti's MBE liaison officer, R. S. Stoddard, and informed him of "possible noncompliance" because of the non-certification of the two firms listed on the Form. He also advised Stoddard that Capeletti would have to submit other "qualified" MBE or WBE firms or provide the Department with evidence of its good faith efforts to meet the contract goals. The next day, May 12, the president of Pro Contracting flew to Tallahassee with an application for certification. Why he waited until after the deadline to seek certification was not disclosed. In any event, by 5:30 p.m. that day, it had been given a "temporary" certification good for ninety days, or until August 12, 1983, subject to a follow-up on-site evaluation of the firm by the Department. The temporary certification was given despite the application being incomplete in several respects and there being an admonition on the form itself that "INCOMPLETE FORMS WILL BE RETURNED." The less than twenty-four hour turnaround time for reviewing the application was by far the quickest time such an application had ever been processed, and a firm issued an MBE certification. In the past, such certifications had taken weeks or months since the Department has up to ninety days to review such applications pursuant to its rules. However, the Coordinator explained that "time was a factor", and justified the expedited approval on this basis. The temporary certificate expired on August 12 without being renewed, but the Coordinator stated it would be changed to a permanent certification on August 22, 1983. There are no Department rules which provide for "temporary" certification. However, the evidence reveals that this type of certificate had been issued to other subcontractors in the past, including Community Asphalt, which was used by Badgett. Because the 1 percent WBE goal was not met, it was necessary that Capeletti satisfy the Department it had made good faith efforts to meet the unmet goals. A "Good Faith Efforts" form specifying the information required to meet this test was sent by the Department on April 28, 1983. The form contained nine questions pertaining to the contractor's effort to meet the contract goal and tracked the criteria enumerated in the Rule. Although the form itself was not returned, Capeletti responded by letter dated May 6 and stated that it had mailed a letter to 85 WBEs and 10 MBEs on April 12 1983 soliciting quotes, and mailed the same letter to various WBE and MBE associations in the State of Florida. It also submitted a list of MBE/WBE firms that had subcontracted on Capeletti jobs in recent years. The reply by Capeletti essentially satisfied four of the nine suggested criteria in Rule 14-78.03(1)(c)2.a.i.-ix. It did not respond to the other five factors. Notwithstanding the failure of Capeletti to fully respond to all of the requested information, the Department recommended that 72 percent of the 1 percent WBE goal be waived since Capeletti had made a good faith effort to meet that goal. In so doing, the Department relied solely upon Capeletti's letter of May 6 as a basis for that determination. This recommendation was concurred in by a representative of the Federal Highway Administration on May 16. This was necessary since federal funds were being used on the project. On May 17, 1983, the Department determined that Capeletti had complied with the Department MBE requirements. This determination was based on the utilization of Pro Contracting to meet the entire 5 percent MBE goal, and the Federal Highway Administration's waiver of 72 percent of the 1 percent WBE goal of the project. On May 20 the Department posted the bids and designated Capeletti as the lowest responsive bidder for the project. The Status of Community Asphalt Respondents have raised the issue of whether Community Asphalt was a certified MBE at the time the bids were submitted on April 27. That subcontractor was used by Badgett to meet the 5 percent MBE goal. Community Asphalt was incorporated on September 22, 1980. Fifty-one percent of the stock is held by two Hispanics while the remaining 49 percent is held by non-Hispanic shareholders, one of whom owns Badgett. The purpose of the business was to qualify as a minority business enterprise for paving work on construction projects. The corporation is structured so that the Hispanic shareholders have ultimate control of the business and can elect the majority of the board of directors. Although Capeletti contended that the 49 percent block of stock can control the corporation's operations, or prevent it from bidding on jobs, sufficient provisions are available in the by-laws, articles of incorporation and statutes to allow effective Hispanic control. Community Asphalt was first certified on a temporary basis by the Department as a minority business enterprise for a 3-month period beginning October 28, 1981. A renewal application for continued certification was filed with the Department around January 7, 1982. That application was never acted upon by the Department despite numerous written and oral inquiries by the applicant and its attorneys over an extended period of time. The lack of action was caused in part by a shortage of personnel in the Department MBE office. Community was orally advised in June, 1982 by a Department MBE representative that its application had been approved and it would be placed on the approved list of MBE subcontractors for participation in Department contracts. Community relied upon this representation and did not pursue the matter further. Thereafter, Community's name appeared in the Department MBE directory provided to contractors for Department projects, including the updated directory used for the April, 1983 letting of projects. Most recently, it was again included in the June, 1983 directory. Badgett relied upon these directories to comply with the MBE goals. Although the Department "routinely" advises MBE contractors in writing whenever their certifications have expired, the Department did not do so in Community's case at the end of its 90-day certification on January 28, 1982, or at any time thereafter. The Department attributed this to an oversight and shortage of personnel. In March, 1983 Badgett submitted a bid on the I-75 and SR 84 Department project in Broward County. On that particular job it had also received a bid quote from Community Asphalt. The Department awarded the contract to Badgett and authorized Community Asphalt to be used to meet the MBE contract goals. It is now performing the contract. Further, Community consistently submitted bids from January, 1982 until the Nova Drive project without any question being raised by the Department and participated in numerous Department jobs over that period of time. Department Practice on MBE Submissions and Waiver of Irregularities The Department views the MBE program as being an opportunity for minority and female owned companies to participate in the road and bridge construction program. According to its Coordinator, the policy in the past has been to "stretch" the rules if necessary to afford MBEs such an opportunity. The MBE Coordinator could not recall ever rejecting a contract for noncompliance by a bidder with the MBE good faith requirements. In situations where a contractor has not submitted its good faith efforts in conjunction with its bid, the Coordinator has allowed contractors to supply such information after the tenth calendar day and even up to twenty-five days thereafter where "continuous communication" occurs, and the contractor is attempting to fulfill the requirements. The Department internally created an awards committee some fourteen years ago which reviews all bids whenever irregularities, discrepancies or unbalancing of bid items occur on a particular job. In determining how to resolve such problems, the committee's primary concerns are to protect the integrity of the competitive bid system and do whatever is in the best interest of the State. The committee did not get involved in the Nova Drive Project, but the director of the division of construction, who sits on the committee, considered the tardiness of Capeletti in complying with the MBE requirements to be a "minor deficiency" and a "waiverable irregularity". He described "major" deficiencies as being a failure to submit a bid bond or not signing the bond, either of which would warrant rejecting an apparent low bidder. Section 3-1 of the Florida Department of Transportation Standard Specifications for Road and Bridge Construction (1982 edition) provides in part as follows: Until the actual award of the contract, however, the right will be reserved to reject any and all proposals and to waive technical errors as may be deemed best for the interest of the State. (Emphasis added) Effects of Cancelling the Contract As noted earlier Capeletti has been performing under the contract since the latter part of June, 1983. Should the contract be cancelled, Capeletti estimates its reimbursable costs from the State to range from $500,000 to $1,000,000. This amount represents expenditures already made for such things as earth-work, drainage structures and pilings and beams ordered or already made. This amount was not considered to be unrealistic by a Department representative. The contract specifications call for the contract to be completed in approximately 550 calendar days. If the work is done at an even pace, around 20 percent of the job will have been completed at the time this recommended order is issued. However, from a construction standpoint, performance of the contract can be terminated at any time and the construction completed by another contractor.
Recommendation Based on foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Transportation enter a final order immediately terminating the contract awarded to Capeletti Brothers, Inc. on the Nova Drive Project, and that the remaining portion of the work under that project be relet for bids. DONE and ENTERED this 10th day of October, 1983, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of October, 1983.
Findings Of Fact Department of Transportation (DOT) Project #02000-3608 is a federal aid highway project requiring the replacement of a bridge on Kings Bay Drive over a canal near the Crystal River in Citrus County, Florida. The bridge is currently closed due to hurricane damage. The bid specifications were published, and a bid submittal deadline of March 28, 1990, was established. The bid specifications included a disadvantaged business enterprise (DBE) goal of 10%, and hiring goals of 6.9% female and 17.1% minority. The bid specifications also included the following special provisions related to DBE: PREPARATION OF PROPOSALS * * * 2-5.3.2 Submittals for Contracts with Goals: For all contracts for which DBE 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 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. The Contractor's bid submission shall include the following information (Submitted on Forms Nos. 275-020-002-DBE Utilization Affirmative Action Certification, 275-020-003-DBE Utilization Summary and 275-020-004-DBE Utilization Form): The names and addresses of certified DBE firms that will participate in the contract. Only DBEs certified by the Department at the time the bid is submitted may be counted toward DBE goals. A description of the work each named DBE firm will perform. The dollar amount of participation by each named DBE firm. If the DBE goal is not met, sufficient information to demonstrate that the contractor made good faith efforts to meet the goals. * * * DISQUALIFICATION OF BIDDERS ARTICLE 2-11 (Page 11) is expanded as follows: (h) Failure to satisfy the requirements of 2-5.3. * * * (Petitioner's exhibit #2, emphasis added) DBE goals for projects to be bid are established at DOT by a committee which includes a representative from the agency's Bureau of Minority Programs. From a list of individual bid items, the committee determines which items are normally subcontracted. Those items are totalled to achieve a percentage of the job. The Bureau of Minority Programs then reviews the list to determine the number of DBEs, from the agency directory, which would be available to perform the subcontracted work in the relevant geographical area. The Bureau of Minority Programs then makes its recommendation to the goals-setting committee. For example, if 40% of the job would normally be subcontracted and DBEs were available to perform 50% of that work, the goal could be set at 20%. In practice, the goals are not set so high, and the most common goal is 10%, as that is the overall goal of the DOT. Goals vary, depending on the type of work, the location and the availability of DBEs. Hiring goals are also established for each project, but in contrast to the DBE goals, they are not considered in the award of a bid. Four firms responded to the bid advertisement for Project Number 02000- 3608. The Cone Corporation was the low bidder at $588,793.45. Cone Constructors, Inc. bid $629,736.85. Piling and Structures, Inc. bid $700,436.53; and Leware Construction Company bid $733,333.33. The Cone Corporation bid included DBE utilization forms indicating that $56,000.00 would be subcontracted to H.S. Thompson Construction Company for concrete and rebar work. This amounts to approximately 9.5% of its bid. The Cone Corporation did not submit any statement with its bid package as to how good faith efforts were made to comply with the DBE goal. A good faith effort committee of the department met to review the bids, and determined that it could not evaluate the Cone Corporation's good faith efforts because no information was provided. Cone Constructor, Inc., the next lowest bidder, provided a $70,000.00 subcontract with a DBE firm, D.A.B. Constructors, Inc., for various work items related to the project. This amounts to approximately 11% of its bid, and meets the specified 10% goal. Piling and Structures, Inc., provided for six DBE subcontractors for a total of $56,000.00, or approximately 8% of its bid; and Leware Construction Company, the highest bidder, provided for four DBE subcontractors, for a total of $76,887.45, or approximately 10.5% of its bid. Thus, two bidders met the specified DBE goal, and two did not. The good faith efforts committee recommended that Cone Corporation's bid be declared nonresponsive because the DBE goal was not achieved and documentation of good faith effort was not submitted. The committee noted that DBE utilization forms submitted by other bidders indicated that there were other DBE subcontractors available for work on the project. Bob Graham is vice-president of the Cone Corporation and has worked for the firm for ten years. He is responsible for the day to day management of the firm, and he prepared the project bid. Bob Graham concedes that the DBE subcontract in his bid does not meet the 10% goal. He solicited and received other DBE subcontract quotations, but rejected them as being higher than non-DBE quotations. Only one DBE subcontractor responded lowest in an area of work and Graham submitted that firm, H.S. Thompson, as part of his bid. Bob Graham also admits that he did not submit any good faith documentation with his bid to demonstrate that an effort was made to meet the DBE goal. Bids are commonly compiled at the last minute, with the bidders assembling various quotations and putting together final numbers to meet the bid deadline. Graham simply did not have time to add the good faith effort documentation. He made a considered business decision to reject all but one DBE subcontractor, in favor of being able to submit a lower bid. He knew at the time that his bid was submitted that the DBE goal was not met. His bid was approximately $41,000.00 lower than the next lowest bid. For an additional $2,800.00 he could have met the 10% goal. This, of course, was apparent only after the bids were opened.
Recommendation Based on the foregoing, it is hereby, RECOMMENDED That a Final Order be entered, dismissing the protest of Petitioner, the Cone Corporation. DONE AND RECOMMENDED this 9th day of July, 1990, in Tallahassee, Leon County, Florida. 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 9th day of July, 1990. COPIES FURNISHED: W. Crit Smith, Esquire SMITH AND THOMPSON, P.A. 1530 Metropolitan Blvd. Tallahassee, FL 32308 John H. Beck, Esquire 1020 East Park Avenue Tallahassee, FL 32301 Paul J. Martin, Esquire and Susan P. Stephens, Esquire Department of Transportation Haydon Burns Building, M.S. #58 605 Suwannee Street Tallahassee, FL 32399-0450 Ben G. Watts, Secretary Attn: Eleanor F. Turner, M.S. #58 Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0450 Thornton J. Williams, General Counsel Department of Transportation 562 Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0450 =================================================================
The Issue Whether Petitioner's bid on State Job No. 86075-3459 was non-responsive and Respondent's award of the bid to the next lowest responsible bidder was arbitrary, illegal or dishonest.
Findings Of Fact Petitioner timely submitted its bid on State Job No. 86075-3459 and this bid was the lowest received by DOT on this project. The DBE requirement on this bid was 11%. This means each bidder had to show on its submittal that at least 11% of the project cost would go to a minority business subcontractor. With its bid submittal, on the Disadvantaged Business Enterprise (DBE) Utilization Summary (Form 275-020-003 Minority Prog. 11/87), Petitioner listed as DBE subcontractors Reliable Trucking, Inc. with $100,000 as the dollar amount for DBE goal and $280,000 for Community Asphalt Corporation. (Exhibit 1.) These two figures exceeded the 11% minimum DBE requirement. Community Asphalt Corporation had been a certified DBE subcontractor in early 1990 but in May 1990 its certification expired and was not renewed. Accordingly, at the time of the bid opening, Community Asphalt was not listed on the list of certified DBE subcontractors DOT provided to bidders with the bid forms to complete for this project. Petitioner had initially shown only Reliable Trucking, Inc. on Exhibit 1 with $400,000 as the dollar amount for the DBE goal. Reliable Trucking is a certified DBE. Petitioner received a late quote from Community Asphalt and just before submitting its bid added Community Asphalt to its DBE Utilization Summary, interlining the $400,000 amount for Reliable Trucking and changed this amount to $100,000. Although Petitioner still intended to use Reliable Trucking for work on this project in excess of $400,000 its policy, which was here followed, is to show on its DBE Utilization Summary submitted with its bid only a small percentage over the required minimum. Therefore, when Community Asphalt was added as a DBE subcontractor, the dollar amount to Reliable Trucking was reduced. Petitioner's employee who added Community Asphalt to the DBE Utilization Summary checked to see that Community Asphalt was a certified DBE but, unfortunately, looked at the list of certified DBE subcontractors furnished by DOT for an earlier bid--not the current list. The current list which had been supplied to Petitioner did not list Community Asphalt as a certified DBE. When the bids received were first checked by the DOT employee who reviews bids to see that DBE requirements are met, she approved the bid but set it aside for further check. Later, after realizing Community Asphalt was not on the approved list of DBE's she disapproved the bid and it proceeded to the Good Faith Efforts Committee for review. Petitioner submitted no documentation of any good faith efforts to comply with the DBE requirements. This is understandable as Petitioner thought when the bid was submitted that Community Asphalt was a certified DBE and its bid complied with the DBE requirements. In reviewing and accepting bids for DOT projects, Respondent relies entirely on the documentation submitted with the bid and does not allow bidders to supplement the bid after opening.
Recommendation It is recommended that the protest of Bergeron Land Development, Inc. to the rejection of its bid submitted on State Job No. 86075-3459 be dismissed with prejudice. DONE and ENTERED this 23rd day of October, 1990, in Tallahassee, Leon County, Florida. KEN N. AYERS 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 23rd day of October, 1990. APPENDIX Respondent's proposed findings are generally accepted, except for: Rejected. The DBE forms submitted by Petitioner, as corrected by Petitioner before submittal, showed Reliable Trucking, Inc., a certified DBE, to receive only $100,000 in subcontracts, far less than the 11% DBE participation required. Rejected. Whether Reliable Trucking had a firm contract with Petitioner to provide in excess of $400,000 subcontracting work on this project is immaterial if the DBE utilization form submitted with the bid fails to show the DBE utilization goal is attained or documentation of good faith efforts are not included. Rejected that the mistake by Petitioner was a non-material mistake. Bids have to be accepted as received. Rejected. Rejected. Rejected. Accepted as an accurate quote of Rule 14-78.003,Florida Administrative Code. The legal conclusion that the ruledoes not require evidence of good faith efforts be included withthe bid submitted is rejected. The conclusion of law that Respondent violated its own rule is rejected. COPIES FURNISHED: John H. Beck, Esquire 1026 East Park Avenue Tallahassee, Florida 32301 Paul J. Martin, Esquire Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0450 John Radey, Esquire Post Office Drawer 11307 Tallahassee, Florida 32302 Ben G. Watts, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0458 Thornton J. Williams, Esquire General Counsel Department of Transportation 605 Suwannee Street, Room 562 Tallahassee, Florida 32399-0458
The Issue Whether the Respondent committed the violations alleged in the Second Amended Order of Penalty Assessment filed February 2, 2006, and, if so, the penalty that should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The Department is the state agency charged with the responsibility of enforcing the requirement of Section 440.107, Florida Statutes, that employers in Florida secure workers' compensation insurance coverage for their employees. § 440.107(3), Fla. Stat. Twin City is a Minnesota corporation that registered to do business in Florida on October 24, 2004. During the times material to this proceeding, Twin City was engaged in the roofing business. On July 8, 2004, an investigator employed by the Department stopped at Twin City's office in Jupiter, Florida, because he had observed vehicles parked around the office that had signs indicating that the company engaged in roofing work. He arrived at the office early, and waited about 15 minutes, when individuals began arriving in the office parking lot. Most of the individuals wore shirts that carried the name "Twin City Roofing." When he consulted the database routinely used by the Department to determine whether businesses operating in Florida had workers' compensation insurance coverage as required by Florida law, the Department's investigator found no record that Twin City had obtained a Florida policy providing workers' compensation insurance coverage for its employees. Twin City did, however, have workers' compensation insurance coverage through the Minnesota Workers' Compensation Assigned Risk Plan, which issued a Standard Workers' Compensation and Employers' Liability Policy covering Twin City only under the Workers' Compensation Law of Minnesota. Pursuant to Section 3.C. of the policy, the policy did not apply in any state other than Minnesota. The Department's investigator issued a Stop Work Order and an Order of Penalty Assessment on July 8, 2004, and personally delivered them to the Twin City office. The Stop Work Order required that Twin City "cease all business operations in this state" and advised that a penalty of $1,000.00 per day would be imposed if Twin City were to conduct any business in violation of the Stop Work Order. Twin City violated the Stop Work Order by continuing to engage in business activities on July 12 and 13, 2005. At the same time he delivered the Stop Work Order and the Order of Penalty Assessment to Twin City's office, the Department's investigator hand-delivered a Request for Production of Business Records for Penalty Assessment Calculation. Identification of Twin City's employees The Department's investigator questioned a number of the individuals he saw in Twin City's parking lot on the morning of July 8, 2005, and asked if they were employed by Twin City. On the basis of a "Turn Around Report" provided later in the day by Twin City, the Department's investigator verified that, except for Aaron Colborn, Jimmy Benegas, and Jaime Andrade, the individuals he questioned in the parking lot were leased employees and that the leasing company provided these employees with workers' compensation insurance coverage, as required by Florida law. Aaron Colborn and Jimmy Benegas were not leased employees, and, based on the admission of Twin City, Aaron Colborn and Jimmy Benegas were employees of Twin City during the period extending from October 24, 2004, through July 8, 2005.3 Jaime Andrade was one of the individuals standing outside the Twin City office on the morning of July 8, 2004. Unlike the other individuals, Mr. Andrade was not wearing a shirt bearing Twin City's name. Mr. Andrade told the investigator that he was a Twin City employee, that he had been employed for only two days, and that he had not yet been paid. His name did not appear on the list of leased employees provided in the Turn Around Report. The Department's investigator included Mr. Andrade as an employee of Twin City based on Mr. Andrade's statements. The evidence presented by the Department is not sufficient, however, to establish that Jaime Andrade was an employee of Twin City during this period. The investigator also spoke with several individuals in the Twin City office during his early-morning visit on July 8, 2004, and during a visit later that morning. The investigator spoke with James Geisen, the president of Twin City, and Jeffrey Willett, Mr. Geisen's stepson, who both identified themselves as Twin City employees. The investigator also observed Karen Geisin, James Geisen's wife, apparently working at a desk in the office, and he assumed that Mrs. Geisen was also an employee of Twin City. Twin City does not dispute that Mr. Geisen and Mr. Willett were employed by Twin City during the time it did business in Florida.4 Mr. Geisen worked in Florida with Twin City for approximately half of the period extending from October 24, 2004, through July 8, 2005, and was paid a salary by Twin City during this period. Mr. Willett worked in Florida with Twin City for approximately half of the period extending from January 1, 2005, through July 8, 2005, and was paid a salary by Twin City during this period. Mr. Geisen and Mr. Willett were, therefore, imputed to be employees of Twin City for the period extending from October 24, 2004, through July 8, 2005. Mrs. Geisen often accompanied her husband to Florida during the period extending from October 24, 2005, through July 8, 2005. She sometimes worked for Twin City in Florida, but she did not receive any salary or other remuneration for her services. Based on the admission of Twin City, however, Mrs. Geisen was an employee of Twin City during the period at issue.5 The employees of Twin City for the period at issue, therefore, were James Geisin, Karen Geisin, Jeffrey Willett, Aaron Colborn, and Jimmy Benegas. Penalty assessment for failure to secure workers' compensation coverage. The penalty for failure to secure the workers' compensation insurance coverage required by Florida law is 1.5 times the premium that would have been charged for such coverage for each employee. The premium is calculated by applying the approved manual rate for workers' compensation insurance coverage for each employee to each $100.00 of the gross payroll for each employee. Twin City failed to provide payroll records on which the Department's investigator could base his calculation of the penalty for Twin City's failure to obtain the workers' compensation insurance coverage required by Florida law within 45 days of the date of the July 8, 2005, request. Based on his observations and because of the lack of payroll records for Twin City, the Department's investigator included as employees in his calculation the six individuals he observed at Twin City on July 8, 2005, who were not identified as leased employees: James Geisen; Karen Geisen; Jeff Willett; Aaron Colborn; Jimmy Benegas, and Jaime Andrade. Because Twin City failed to provide payroll records from which the Department's investigator could determine the gross payroll for these six individuals, the Department's investigator applied Florida's official statewide average weekly wage to determine the gross payroll to be imputed to each of the six individuals. Florida's official statewide average weekly wage was $626.00 per week for the period extending from October 24, 2004, through December 31, 2004, and $651.38 for the period extending from January 1, 2005, through July 8, 2005. The gross payroll imputed to each of the six employees was, therefore, $9,770.70 from October 24, 2004, through December 31, 2004, and $26,380.89 from January 1, 2005, through July 8, 2005. In calculating the premium for workers' compensation insurance coverage, the Department's investigator used the risk classifications and definitions of the National Council of Compensation Insurance, Inc. ("NCCI") SCOPES Manual. Because Twin City provided no payroll records, the Department's investigator classified all six individuals under the highest- rated classification for Twin City's business operations, which was classification code 5551, the classification code assigned to employees of businesses engaged in roofing activities of all kinds. The approved Florida manual rate assigned to Scopes classification code 5551 was $46.17 per $100.00 of payroll for the period extending from October 24, 2004, through December 31, 2004, and $37.58 per $100.00 of payroll for the period extending from January 1, 2005, through July 8, 2005. The Department's investigator used these figures to calculate the workers' compensation insurance coverage premium for each of Twin City's employees as $4,511.13 for the period extending from October 24, 2004, through December 31, 2004, and $9,913.94 for the period extending from January 1, 2005, through July 8, 2005, for a total premium of $86,550.42. The penalty assessment was calculated by multiplying the total premium by 1.5, for a penalty of $129,825.66. Because the evidence establishes that Twin City had five rather than six employees during the period at issue herein, the penalty calculation must be modified as follows: The total penalty must be reduced by $21,637.61 ($6,766.70 + $14,870.91), for a revised total penalty of $108,188.05 ($129,825.66 - $21,637.61).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services, Division of Workers' Compensation, enter a final order: Finding that Twin City Roofing Construction Specialists, Inc., failed to have Florida workers' compensation insurance coverage for five of its employees, in violation of Sections 440.10(1)(a) and 440.38(1), Florida Statutes; Assessing a penalty against Twin City in the amount of $108,188.05, which is equal to 1.5 times premium based on imputed payroll for these five employees and on the approved manual rate for the classification code 5551 for the period extending from October 24, 2004, through December 31, 2004, and from January 1, 2005, through July 8, 2005, as provided in Section 440.107(7)(a), (d), and (e), Florida Statutes; Finding that Twin City engaged in business operations for two days during the pendency of the Stop Work Order issued July 8, 2005, in violation of Section 440.107(7)(a), Florida Statutes, and imposing a penalty of $2,000.00, against Twin City for engaging in business operations on July 12 and 13, 2005, as provided in Section 440.107(7)(a) and (c), Florida Statutes. DONE AND ENTERED this 30th day of August, 2006, in Tallahassee, Leon County, Florida. S PATRICIA M. HART 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 30th day of August, 2006.
Findings Of Fact Petitioner, E. J. Strickland Construction, Inc. (Petitioner), submitted to Respondent, Department of Transportation (Department), a bid on State Project No. 75030- 3518. Petitioner's was the lowest bid received by the Department. Petitioner's bid failed to meet the D.B.E. goals on State Project No. 75030-3518. The D.B.E. goal was 12 percent; under Petitioner's bid, only .04 percent of the contract would be performed by economically disadvantaged business enterprises. The only effort Petitioner made to secure bids of certified D.B.E. contractors to incorporate in its bid to the Department was to run a legal advertisement in the Orlando Sentinel on January 18, 19 and 20, 1986. The Department was scheduled to open all bids on January 22, 1986. Petitioner documented only the advertisements and the fact that it incorporated the only response to the advertisements in its bid in an effort to demonstrate good faith effort to meet the D.B.E. goals. 2/ There is no evidence that Petitioner acted with specific discriminatory intent in preparing its bid on State Project No. 75030-3518. Petitioner proved that it acted in this case precisely as it acted in the only other Department job on which it bid. In that case, Petitioner ordered from the Department plans and specifications and was sent plans, specifications and a bid package and was placed on the Department's list of prospective bidders. In accordance with the custom in the industry, the Florida Transportation Builders Association (FTBA) obtained from the Department the list of prospective bidders as of ten days before the bid letting date and distributed the list to its members. In accordance with the custom in the industry, several DBE and WBE contractors contacted Petitioner, verified that Petitioner was bidding on the project and submitted proposals for inclusion in Petitioner's bid. In that way, Petitioner received enough response from certified DBE and WBE contractors to meet the DBE and WBE goals on the job. In this case, in accordance with the Department's normal practice, the Department only sent Petitioner plans and specifications in response to Petitioner's December 30, 1985 request for plans and specifications. Also, since Petitioner did not specifically request a bid package, the Department did not include Petitioner on its list of prospective bidders. For that reason, no FTBA members, including the certified DBE contractor who bid on Petitioner's previous job with the Department, received notice that Petitioner was a prospective bidder on State Project No. 75030-3518. Had Petitioner been included on the FTBA list, Petitioner probably would have received enough response from certified DBE contractors to meet the DBE goals on this job, too. All four of the other bidders on State Project No. 75030-3518 met the DBE goals. One of them relied entirely on the FTBA list to notify prospective certified DBE contractors. One of them -- including the next lowest bidder, Cone Constructors, Inc. -- also sent a written request for a proposal to Pary, Inc., the same certified DBE contractor who previously had contracted with Petitioner on a Department job that was still ongoing. Another of the bidders on State Project No. 75030-3518 telephoned Pary, Inc., and asked for a proposal. Petitioner is not a member of the FTBA and did not inquire whether it was listed as a prospective bidder on the FTBA list. Petitioner did not make any effort to use the Department's DBE directory to directly contact certified DBE contractors concerning the job. Petitioner did not even contact Pary, Inc., to request a bid although Pary, Inc., was working for Petitioner at the time and had not responded to Petitioner concerning State Project No. 75030-3518. Petitioner's small effort to meet the DBE goals on State Project No. 75030-3518 did not rise to the level of good faith efforts. The evidence that Petitioner acted in this case precisely as it acted in the only other Department job on which it bid does not prove that Petitioner made a good faith effort in this case. To the contrary, it proved only that Petitioner was lucky to meet the DBE goals on the prior contract.
Recommendation Based upon the foregoing Findings Of Fact and Conclusions Of Law, it is RECOMMENDED that Respondent, Department of Transportation, dismiss the bid protest of Petitioner, E. J. Strickland Construction, Inc., and award the contract in State Project No. 75030-3518 to the lowest responsive bidder, Cone Constructors, Inc. RECOMMENDED this 25th day of April, 1986, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 25th day of April, 1986.
The Issue The issues are whether Respondent violated Sections 489.129(1)(i), (l), (m) and (o); 489.119(2); 489.1195(1)(a); and 489.1425(1), Florida Statutes, for the reasons stated in the Administrative Complaint and, if so, what penalty should be imposed.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing, and the entire record of this proceeding, the following findings of fact are made: Petitioner is the state agency responsible for regulating the practice of contracting in the State of Florida. At all times material hereto, Respondent was licensed as a certified general contractor in the state, pursuant to license number CG C008922. Respondent's license is currently inactive. Respondent has been a contractor for nearly 30 years, and has never been subject to disciplinary action against his license until this proceeding. Respondent was licensed as the licensed qualifying agent for ECE from January 1998 through February 2001, for a fee of $400.00 per month. As the qualifying agent, Respondent was responsible for all of ECE's contracting activities, in accordance with Section 489.1195(1)(a), Florida Statutes, which states: "All primary qualifying agents for a business organization are jointly and equally responsible for supervision of all operations of the business organization; for all field work at all sites; and for financial matters, both for the organization in general and for each specific job." Respondent did not obtain a certificate of authority for ECE. On November 16, 1998, ECE entered into a contract in the amount of $15,577.00 with Carl and Darlene Weinzierl to install aluminum siding at their residence in Terra Ceia, Florida. The contract specified that ECE would use Reynolds brand siding in the construction. ECE actually used an inferior grade of aluminum siding. The contract did not contain a notice explaining to the Weinzierls their rights under the Construction Industry Recovery Fund. Such notice is required by Section 489.1425, Florida Statutes. ECE represented to the Weinzierls that they would receive a mortgage to pay for the aluminum siding and to consolidate their other debts at an interest rate of 6.5 percent. The actual interest rate on the mortgage was 18 percent. On December 14, 1998, ECE commenced work on the Weinzierls' house. ECE never completed the work. On January 22, 1999, ECE filed a lien against the Weinzierls' property in the amount of $15,577.00. Respondent had no knowledge of the project on the Weinzierls' house, of the mortgage arrangement made by ECE, or of the lien filed by ECE against the Weinzierls' property. On November 5, 1998, ECE entered into a contract in the amount of $3,624.00 with Barbara Lewis to install soffit and fascia at her residence in Bradenton, Florida. The contract did not contain a notice explaining to Ms. Lewis her rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes. ECE represented to Ms. Lewis that she would receive financing to pay for the soffit and fascia at an interest rate of 11 percent. The actual interest rate of the financing was 18 percent. ECE performed the work on Ms. Lewis' house in one day. Respondent had no knowledge of the project at Ms. Lewis' house or of the financing arrangement made by ECE. On August 16, 1998, ECE entered into a contract in the amount of $13,250.00 with John Maxwell to install aluminum siding at his residence in Bradenton, Florida. The contract did not contain a notice explaining to Mr. Maxwell his rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes. ECE commenced work at Mr. Maxwell's house on August 18, 1998, and completed the project on August 27, 1998. On August 31, 1998, ECE recorded at the Manatee County Circuit Court a mortgage on Mr. Maxwell's property in the amount of $13,427.55 for the installation of aluminum siding. Mr. Maxwell had signed no documents to place a mortgage on his property, and received a satisfaction of mortgage on May 19, 1999. Respondent had no knowledge of the project to be completed at Mr. Maxwell's house or of the mortgage recorded by ECE. On October 10, 1998, ECE entered into a contract in the amount of $3,663.00 with Richard Lanois and Beverly Carroll to install soffit and fascia on their residence in Bradenton, Florida. The contract did not contain a notice explaining to Mr. Lanois and Ms. Carroll their rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes. ECE commenced work at the house on October 13, 1998, and completed the project on October 15, 1998. ECE recorded a financing statement to obtain a lien on the property of Mr. Lanois and Ms. Carroll with the Manatee County Circuit Court on October 22, 1998. Neither Mr. Lanois nor Ms. Carroll had signed the financing statement that ECE filed at the court. Respondent had no knowledge of the project at the residence of Mr. Lanois and Ms. Carroll, or of the financing statement filed by ECE to obtain a lien on their property. On December 2, 1998, ECE entered into a contract in the amount of $5,739.00 with Paul and Linda Porter to install Reynolds brand thermal double pane windows at their residence in Bradenton, Florida. The contract did not contain a notice explaining to the Porters their rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes. ECE commenced work at the Porters' house on December 5, 1998, and completed the project on December 17, 1998. ECE installed BetterBilt brand windows rather than Reynolds windows, without the Porters' approval. On December 17, 1998, ECE recorded at the Manatee County Circuit Court a mortgage on the Porters residence in the amount of $5,775.80. The Porters had signed no documents to allow this mortgage to be placed on their property. Respondent had no knowledge of the project at the Porters' residence or of the mortgage recorded by ECE on the Porters' residence. On November 2, 1998, ECE entered into a contract in the amount of $6,426.00 with William C. Roach to install Reynolds thermal double pane windows on his residence in Bradenton, Florida. The contract did not contain a notice explaining to Mr. Roach his rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes. ECE commenced work at the Roach residence on November 2, 1998, and completed the project on November 3, 1998. ECE installed BetterBilt brand windows instead of Reynolds windows, without Mr. Roach's permission. ECE represented that Mr. Roach would receive financing to consolidate the cost of the windows, his mortgage, and his credit card debt. In fact, Mr. Roach received financing only for the cost of the windows. Respondent had no knowledge of the project at Mr. Roach's residence or of the financing arrangement that ECE entered into with Mr. Roach. On November 28, 1998, ECE entered into a contract in the amount of $3,635.90 with Carol Lipp to install Reynolds brand soffit and fascia on her residence in Bradenton, Florida. The contract did not contain a notice explaining to Ms. Lipp her rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes. ECE commenced work at Ms. Lipp's residence on November 30, 1998, and completed the project on December 7, 1998. ECE recorded a financing statement with the Manatee County Circuit Court in order to obtain a lien against Ms. Lipp's property. Ms. Lipp had not signed the financing statement. Respondent had no knowledge of the project at Ms. Lipp's residence or of the financing statement filed by ECE on Ms. Lipp's residence. On January 22, 1999, ECE entered into a contract in the amount of $13,504.00 with Shirley G. Bradley to install 11 Reynolds thermal double pane windows and to enclose the lanai and front entry of her residence in Englewood, Florida. The contract did not contain a notice explaining to Ms. Bradley her rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes. ECE commenced work at Ms. Bradley's residence on January 25, 1999, and completed the project on February 9, 1999. ECE installed BetterBilt brand windows instead of Reynolds windows, without Ms. Bradley's permission. ECE represented to Ms. Bradley that she would receive financing for the project at an interest rate of 16 percent. In fact, ECE obtained a loan for Ms. Bradley at an interest rate of 21 percent. Respondent had no knowledge of the project to be completed at Ms. Bradley's residence or of the financing arrangement between ECE and Ms. Bradley. On October 13, 1998, ECE entered into a contract in the amount of $6,511.10 with George Haight to install Reynolds thermal double pane windows on his residence in Bradenton, Florida. The contract did not contain a notice explaining to Mr. Haight his rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes. ECE installed BetterBilt brand windows instead of Reynolds windows, without Mr. Haight's permission. Respondent had no knowledge of the project to be completed at Mr. Haight's residence. On December 7, 1998, ECE entered into a contract in the amount of $15,216.00 with Shirley Behen to install Reynolds thermal double pane windows on her residence in Bradenton, Florida. The contract did not contain a notice explaining to Ms. Behen her rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes. ECE represented to Ms. Behen that she would receive financing for the windows that would also consolidate her roof payments and credit card debt. ECE provided none of the promised financing. ECE installed BetterBilt brand windows instead of Reynolds windows, without Ms. Behen's permission. On December 15, 1998, ECE recorded a mortgage on Ms. Behen's residence with the Manatee County Circuit Court in the amount of $10,713.95. Ms. Behen had not signed any document to secure a second mortgage on her property. Respondent had no knowledge of the project to be completed at Ms. Behen's residence or of the mortgage filed on her property by ECE. On November 17, 1998, ECE entered into a contract in the amount of $7,845.00 with Debby and Wally Keefe to install Reynolds thermal double pane windows on their residence in Bradenton, Florida. The contract did not contain a notice explaining to the Keefes their rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes. ECE represented to the Keefes that they would receive a mortgage to pay for the windows and consolidate their credit card debt at a rate of 6.5 percent. In fact, ECE provided a mortgage with an actual interest rate of 18 percent. Respondent had no knowledge of the project to be completed at the Keefes' residence or of the mortgage arrangement between the Keefes and ECE. On September 29, 1998, ECE entered into a contract in the amount of $8,531.00 with Joe and Laura Poulin to install vinyl siding on their three duplexes in Bradenton, Florida. The contract did not contain a notice explaining to the Poulins their rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes. ECE recorded a financing statement with the Manatee County Circuit Court, obtaining a lien against the Poulins' property. The Poulins did not sign the financing statement. Respondent had no knowledge of the project to be completed at the Poulins' residence or of the financing statement filed by ECE. In August 1998, ECE entered into a contract in the amount of $8,307.00 with Darwin and Joyce Wilson to install 17 Reynolds thermal double pane windows on their residence in Sarasota, Florida. The contract did not contain a notice explaining to the Wilsons their rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes. ECE commenced the project on September 5, 1998, and completed the project on September 7, 1998. ECE installed BetterBilt brand windows instead of Reynolds windows, without the Wilsons' permission. Respondent had no knowledge of the project to be completed at the Wilsons' residence. Also in August 1998, ECE entered into another contract with the Wilsons, in the amount of $14,000.00, to install Reynolds vinyl siding on their residence. The contract did not contain a notice explaining to the Wilsons their rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes. ECE began installing the vinyl siding on October 15, 1998, and completed the project on November 15, 1998. ECE represented to the Wilsons that they would receive a new first mortgage that would include the price of the windows, the siding, their house payment, and their credit card debt. In fact, ECE provided no such mortgage. Respondent had no knowledge of the second project to be completed at the Wilsons' residence. On October 7, 1998, ECE entered into a contract in the amount of $5,171.00 with Derek Campagna to install vinyl siding and fascia on his residence in Bradenton, Florida. The contract did not contain a notice explaining to Mr. Campagna his rights under the Construction Industry Recovery Fund, as required by Section 489.1425, Florida Statutes. ECE commenced work on October 8, 1998, and completed the project on October 10, 1998. On or about January 5, 1999, ECE filed a lien against Mr. Campagna's property in the amount of $5,171.40. Respondent had no knowledge of the project to be completed on Mr. Campagna's residence or of the lien filed by ECE. The misrepresentation of the actual interest rate to be charged for financing the above projects was the commission of fraud or deceit in contracting by ECE and its representatives. The installation of BetterBilt windows in those houses the owners of which had contracted for Reynolds windows constituted the commission of fraud or deceit in contracting by ECE and its representatives. Respondent was unaware of ECE's fraudulent activities in the Bradenton/Sarasota area at the time they were occurring. Respondent believed that ECE did business exclusively in Indian River, St. Lucie, and Martin counties on the east coast of Florida. Respondent submitted the proper forms for the relevant permits and actively supervised ECE's construction work on the east coast of Florida. There was no evidence that ECE used Respondent's license to obtain permits for the projects it undertook in the Bradenton/Sarasota area. The evidence established that ECE pulled no permits at all for those projects. From all the evidence presented at the hearing, the inference may fairly be drawn that ECE purposely kept Respondent in the dark concerning its activities in the Bradenton/Sarasota area. Respondent first learned of ECE's activities in Bradenton/Sarasota through a telephone conversation with a friend, Peter Green. Mr. Green was a mortgage broker, and told Respondent that he was trying to secure financing for some of the ECE clients named above. Mr. Green told Respondent that some of these clients were very upset with ECE, and asked Respondent if he was aware of the problems. Respondent told Mr. Green that he was unaware ECE was doing any work on the west coast of Florida. Mr. Green gave Respondent the phone number of Darlene Weinzierl, one of the disgruntled ECE customers. Following her own bad experience with ECE, Ms. Weinzierl had undertaken an investigation of the company. She searched courthouse records for liens filed by ECE and contacted all the individuals whose names she found. Ms. Weinzierl heard "horror stories." A woman who could barely speak English told her that ECE had slapped siding over rotting woodwork, sent her a bill for $20,000, then filed a lien on her house. Another woman told Ms. Weinzierl that when she attempted to cancel her contract, the ECE salesman showed up at her door accompanied by a man ostentatiously wearing a gun in a shoulder holster. Other customers told Ms. Weinzierl that ECE had forged mortgages on their property. Ms. Weinzierl's hearsay testimony is unsupported by other competent substantial evidence and therefore cannot be relied on for the truth of the statements contained therein. However, it is undisputed that Ms. Weinzierl later conveyed this information to Respondent. Respondent telephoned Ms. Weinzierl on January 23, 1999. Ms. Weinzierl conveyed to Respondent everything she had learned about ECE. The next day, Respondent spoke with James Pizzo, Jr., one of the principals of ECE. Mr. Pizzo told Respondent that he had a very aggressive salesman who "had made a lot of promises to people," but that he was in the process of responding to the complaints and correcting the situation. Respondent asked Mr. Pizzo why ECE was doing business on the west coast of Florida. Mr. Pizzo replied that ECE's telemarketing effort had saturated the east coast, and he believed there was a fresh market on the west coast. Because he had worked with Mr. Pizzo for over a year and had a good working relationship with ECE, Respondent took at face value Mr. Pizzo's promise to correct the problems. Respondent took no action on his own, and continued to act as the qualifying agent for ECE. Respondent did not visit any of the west coast job sites or make any independent effort to contact ECE's victims. FDLE commenced a RICO investigation of ECE in the spring of 1999. Special Agent Charles Leonard, the FDLE investigator, first interviewed Respondent on May 10, 1999. Respondent was never a target of the investigation, and cooperated fully. Respondent did not sever his relationship with ECE until February 2001. By this time, 14 complaints had been filed against ECE by customers in the Bradenton/Sarasota area, and ECE had taken no action to address the situation beyond ceasing to do business in the area. In mitigation of his failure to take any action for two years after he became aware of ECE's fraudulent practices, Respondent pointed to the precarious state of his health. In January 2000, Respondent's car was stopped on I-95 when it was rear-ended by a truck traveling at 50 to 60 miles per hour. Respondent received a concussion and suffered excruciating headaches. His neurologist ordered an MRI and found a brain tumor. The tumor could not be removed entirely. Respondent is also a diabetic. Respondent continues to have headaches so severe that he requires trigger point injections of pain medication and epidural injections in his neck and upper spine every few months. He regularly takes Tylenol III with codeine. He requires an MRI every six months to monitor his brain tumor. Prior to his brain surgery, Respondent managed his diabetes through oral medication; however, since the surgery he has needed three injections of insulin daily. At the same time he severed his relationship with ECE, Respondent notified Petitioner that he was transferring his license to inactive status. Respondent no longer actively practices contracting. However, his current position as a construction project manager for the Broward County School Board requires that he hold at least an inactive general contractor's license. Respondent credibly testified that if he were to lose his current job, and the health insurance that goes with it, he could not pay his medical bills.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order finding Respondent guilty of violating Section 489.129(1)(l) and (m), Florida Statutes, suspending Respondent's license for three years from the date that Respondent re-activates his license, imposing an administrative fine in the amount of $3,000.00, and requiring Respondent to pay costs of Petitioner’s investigation. DONE AND ENTERED this 12th day of March, 2002, in Tallahassee, Leon County, Florida. LAWRENCE P. STEVENSON 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 March, 2002. COPIES FURNISHED: Michael Martinez, Esquire Department of Business and Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-1007 E. Cole Fitzgerald, III, Esquire Fitzgerald, Hawkins, Mayans & Cook Post Office Box 3795 West Palm Beach, Florida 33401 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202 Suzanne Lee, Executive Director Construction Industry Licensing Board Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact After the Department of Transportation (DOT) proposed to reject its bid on State Project, Job No. 97860- 3319 as unresponsive, for failure to meet a women's business enterprise (WBE) goal, and failure to document good faith efforts to reach the goal, Capeletti initiated substantial interest proceedings, Capeletti Brothers, Inc. and State Paving Corporation vs. Department of Transportation and John Mahoney Construction Company, Inc., No. 85-3003, contending that it had made good faith efforts to meet the goal and that it had adequately documented the efforts; that the second low bidder had not met the goals; that DOT treated the goals as quotas; and that the DOT committees who evaluated the bids met in violation of the Sunshine Law. At the hearing in the present case, the parties stipulated that Capeletti's "bid was rejected because of noncompliance with Rule 14-78.03 as it relates to women's business enterprises and for noncompliance with the bid specifications which incorporated those provisions. The rule provisions under challenge read, in pertinent part: 14-78.03 General Responsibilities. In furtherance of the purpose of this rule chapter, the Department shall establish overall DBE and WBE goals for its entire DBE one WBE program. In setting the overall goals the Department shall consider the following factors: the number and types of contracts to be awarded by the Department; the number, capacity, and capabilities of certified DBEs and VBEs likely to be available to compete for contracts let by the Department; and the past experience of the Department in meeting its goals and the results and reasons therefore. To implement its DBE and WBE goal program the Department may: . . . (b) establish contract goals on each contract with subcontracting opportunities for certified DBEs and WBEs The Department shall establish separate contract goals for firms owned and controlled by socially and economically disadvantaged individuals and for firms owned and controlled by women. In setting contract goals, the Department shall consider the following factors: the type of work required by the contract to be let; the subcontracting opportunities in the contract to be let; the estimated total dollar amount of the contract to be let; and the number, capacity and capabilities of certified DBEs and WBEs. For contracts with an estimated total dollar amount of $1,000,000 or less, the contract goals shall not exceed 50 percent of the identified potential for DBE and WBE participation. For contracts with an estimated total dollar amount of $1,000,000, the contract goals shall not exceed 75 percent of the identified potential for DBE and WBE participation. For all contracts for which DBE and WBE 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 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. Failure to satisfy these requirements shall result in a contractor's bid being deemed nonresponsive and the bid being rejected. DOT proposes to deem Capeletti's bid nonresponsive forits conceded failure to meet a WBE goal and for the alleged failure to document good faith efforts to meet the goal. Citation Deleted In the course of the adoption of amended Rule 14- 78.03, Florida Administrative Code, Bjarne B. Andersen, Jr., an attorney on the staff of the Joint Administrative Procedures Committee, wrote Ms. Margaret-Ray Kemper, DOT's Deputy General Counsel, on January 22, 1985, with reference to amended Rule 14-78.03, stating: Sections 339.05 and 339.081, F.S., contain no specific rulemaking authority . . . while we do agree that the rule appears in part to implement s.339.05, F.S., as amended by Ch. 84-309, L.O.F.; we do not believe this "assent to Federal aid" is specific rule authority. It is at best implied authority. The day before a DOT employee (who, counsel represented at hearing, is not a lawyer) had written Ms. Elizabeth Cloud, Bureau Chief, Bureau of Administrative Code and Laws, Department of State, as follows: Based upon a telephone conversation with Mr. Bjarne B. Andersen, Jr. of the Legislative Joint Administrative Procedures Committee and further legal review by our office, we request that the . . . "law implemented" be amended to . . . [delete reference to Section 339.05, Florida Statutes (1984 Supp.)] In an internal memorandum dated March 8, 1985, DOT's Deputy General Counsel set out DOT's legal position in these words: Subpart A of 49 CFR, Part 23, defines minority persons . . . The definition of minority does not include women. However, women are encompassed within the definition of minority business enterprise which is defined as a small business concern owned and controlled by one or more minorities or women. 49 CFR, 23.5. 49 CFR, Part 23, Subpart C, sets forth general requirements for all recipients of federal funds. Among those requirements is a policy statement to be included in every financial assistance agreement affirming a commitment to MBE/DBE participation in contracts financed in whole or in part with federal funds. Also required is a MBE/DBE affirmative action program which must be incorporated by reference into financial assistance agreements. The program is made "a legal obligation and failure to carry out its terms shall be treated as a violation of this financial assistance agreement." 49 CFR, S23.43(b). The goal program is one of the required WBE/DBE program components. 49 CFR, S23.45(g). . . . However, although women are included within the definition of MBEs, 49 CFR, Part 23, Subpart C, requires recipients to establish separate overall and contract goals for firms owned and controlled by minorities and firms owned and controlled by women. 49 CFR, 23.45(g)(4). The memorandum relies exclusively on 49 CFR, Part 23, Subpart C, 23.45(g)(4) as authority for Florida's WBE program, citing no federal or state statutes as authority.
The Issue Whether Respondent, Seven Lakes Association, Inc. (the Association), violated section 760.10, Florida Statutes (2018),1 by discriminating against 1 Unless otherwise indicated, all statutory and administrative rule references are to the 2018 codifications of the Florida Statutes and Florida Administrative Code. Petitioner, Donald Chew, based on his race (African American) when it terminated his employment; and, if so, what is the appropriate remedy.
Findings Of Fact Petitioner, Donald Chew, is an African American male who was employed by the Association from January 23, 2017, to September 19, 2018. During the time he was there, Mr. Chew was one of the Association's few non-white employees. Respondent, the Association, is a condominium association governed by chapter 718, Florida Statutes. According to Mr. Chew, a majority, if not all, of the condominium owners are white. The Association has approximately 50 employees. The Association is governed by a Board of Directors (Board), made up of five to seven members. All the Board members who testified at the hearing were white. The Board hires a General Manager, who oversees the day-to-day operations of the Association. This includes oversight over the condominium grounds, recreation, and financial aspects of the Association. The General Manager had check-writing authority for the Association. For the times relevant to Petitioner's claims, Timothy Day served as the General Manager.2 Prior to being hired Mr. Day was involved in an investigation related to his employment with a local government entity. 2 Mr. Chew was hired by the Association's General Manager Judy Grosvenor, but Mr. Day became General Manager in August 2017. Neither the reason for the investigation nor the outcome of that investigation was clear from the evidence. Regardless, Mr. Day was given the opportunity to explain the circumstances related to the investigation to the Board prior to being hired. Relevant to this case, the General Manager oversaw the Accounting Manager, who managed a staff of accountants. June Gibbs served as the Accounting Manager who oversaw Mr. Chew from the date of his hire to May 2018, while he was in the staff accountant role. MR. CHEW'S JOB HISTORY AND DUTIES The Association originally hired Mr. Chew for the position of staff accountant. The hiring process consisted of review of Mr. Chew's resume, an interview, and then a criminal background and reference check. The Association did not check Mr. Chew's litigation history at the time it hired him. In September 2017, Ms. Gibbs gave Mr. Chew a mixed written performance review. Although he was "Above Average" in initiative and working relationships, Ms. Gibbs indicated he was "Below Average" in his basic accounting skills and his tardiness. In her comments, she noted: Don, I really dislike writing a negative evaluation. But, your accounting skills really concern me. This is why I hired you and the core of your position. It's been great that you have done well with the insurance and working with Brown & Brown. Even though we have struggled with the accounting parts of the insurance UMS you have done well assisting everyone setting [ ] this software up. And I believe you are above average in computer technology. But, once again accounting is the core. At this point because I really need someone strong in accounting behind me. I am going to have you stay with what you are good at – working on the insurance and UMS. And I will appoint you some basic accounting jobs. Also work on any tardiness issues. In March 2018, the Association requested that Mr. Chew obtain a Community Association Manager License (CAM License) from the Florida Department of Business and Professional Regulation. Mr. Chew submitted an online application in which he was required to answer a number of questions, including the following: 2. Are you or have you ever been a defendant in civil litigation in this or any other state … in which the basis of the complaint against you was alleged negligence, fraudulent or dishonest dealing, foreclosure, bankruptcy, or breach of fiduciary duty related to the practice or profession for which you are applying, or is there any such case or investigation pending. Mr. Chew answered "No" to this question. On May 2, 2018, the Association promoted Mr. Chew to the Administrative Services Manager (ASM) position, which reported directly to the General Manager, Timothy Day. Along with this promotion, Mr. Chew received a salary increase. In the ASM position, Mr. Chew handled a variety of issues and considered himself the General Manager's "right hand man." Mr. Chew did very well in this position and was well liked by the Board, Mr. Day, and the Association staff. In August 2018, Mr. Day announced that he would be resigning from the Association and recommended Mr. Chew for General Manager position. On August 30, 2018, the Board voted unanimously to appoint Mr. Chew as the Interim General Manager. The credible testimony at the hearing established that at this point the Board believed a final decision would be made for the permanent General Manager position after more extensive background checks were conducted on Mr. Chew. Meanwhile, Mr. Chew would serve in an interim capacity. Later on August 30, Mr. Day informed Mr. Chew that he had received information that there was judgment for embezzlement against Mr. Chew in an action brought by the Attorney General for the State of Illinois. Mr. Chew explained that the suit was not against him personally, but against a corporation. On September 4, 2018, Mr. Day informed Mr. Chew that he was being placed on paid administrative leave pending an investigation into the Illinois litigation. On September 19, 2018, the Association's attorney sent Mr. Chew a letter of termination. DISCRIMINATORY ACTS Mr. Chew testified that his accounting co-workers made racial comments that made him feel uncomfortable while he was working as a staff accountant. As described by Mr. Chew, these remarks were made while he was working under Ms. Gibbs, prior to May 2018. Mr. Chew's co-worker, Joan Farus, confirmed that Ms. Gibbs (Ms. Farus's and Mr. Chew's supervisor) and other employees talked about "black people" in a derogatory way around Mr. Chew.3 The undersigned finds that Petitioner established that he was subject to discriminatory comments by staff prior to Mr. Chew becoming an ASM. Mr. Chew also asserts that he was treated less favorably by the Board than the white employees. Mr. Chew presented little, if any, evidence of how he was treated less favorably by the Board. To the contrary, based on the testimony at the hearing by the Board members and staff, it was clear that Mr. Chew was well liked; the Board promoted him and provided him with bonuses and pay raises. The fact that the Board unanimously approved him for the Interim General Manager position on August 30, 2018, leads to the conclusion that the Board did not have any racial animus toward Mr. Chew. Although the Association has an Equal Opportunity Employer and Non-Harassment Policy, there is nothing in its Employee Handbook 3 Ms. Farus was terminated by the Association in August 2018. specifically prohibiting discriminatory conduct based on race. The Handbook indicates employees "deserve to be treated with respect and courtesy." It also states it is company policy that the "workplace be free of tensions involving matters which do not relate to our business" such as "ethnic, religious, or sexual remarks," but stops short of explicitly prohibiting racism or racist comments. The Handbook does urge an employee who feels harassed to notify a supervisor or the Human Resources department. It also provides that any grievances regarding the job, working conditions, or problems with another employee be submitted to the employee's immediate supervisor in writing. There is no credible evidence Mr. Chew ever submitted a written complaint to his supervisor, Human Resources, or anyone else at the Association regarding the racist comments. MR. CHEW'S BACKGROUND HISTORY After the Board appointed Mr. Chew as the Interim General Manager, Kathy Miske, a white female who lived in an Association condominium, researched Mr. Chew's background.4 Ms. Miske previously performed background checks for a law firm in Chicago before she moved to a condominium in the Association. She researched Mr. Chew because she had a "habit of checking on people," and she had been approached by a condominium resident, Debbie Combs, also a white female, who was suspicious of Mr. Chew. The reason for Ms. Combs's suspicion was not disclosed at the hearing. Ms. Miske discovered that the Attorney General of Illinois had filed a "Verified Complaint for an Injunction, an Accounting, Surcharge, and Other Equitable Relief" (Complaint) against Mr. Chew personally in May 2013. The Complaint essentially described an embezzlement scheme, and specifically accused Mr. Chew of abusing a position of trust while employed at Marcy- 4 Although she later became a Board member, at the time she researched Mr. Chew she was not. Newbury Association, Inc. (MNA). It alleged Mr. Chew had misappropriated funds, in violation of the Illinois Charitable Trust Act. Although not a criminal prosecution, the Illinois Attorney General sought injunctive relief, civil damages, punitive damages, and civil penalties against Mr. Chew. Ms. Miske also discovered an Order of Final Judgment (Final Judgment) had been entered against Mr. Chew in the Illinois case on September 9, 2013. The Final Judgement seems to be a default judgment. As a result, Mr. Chew was enjoined from serving as a charitable trustee, was ordered to pay $205,372 in damages, and was also required to pay interest and investigative costs. Although Mr. Chew had a plausible explanation as to the circumstances surrounding the Illinois case, there was no evidence that the Final Judgment had been appealed, withdrawn, reversed, or nullified in any way. Mr. Chew admitted he did not notify the Association of the Final Judgment and that he did not list MNA on the resume he provided to the Association. Ms. Miske made copies of the Complaint and Final Judgment against Mr. Chew. She distributed the copies to three of the Board members that she knew personally. Eventually, copies were provided to the President of the Board, Mr. Day, and the Board's attorney. The Association was required by law to maintain a bond to cover its employees, including the General Manager.5 The Board members testified they were concerned that the Final Judgment would affect the Association's ability to obtain the proper bond if Mr. Chew became General Manager. The Board members relied on the Association's attorney's advice regarding the Association's ability to obtain a bond and the attorney's recommendation to terminate Petitioner based on the Complaint and Final Judgment. Mr. Chew claims that he was discriminated against because he was not given an opportunity to explain the Final Judgement or underlying facts to the Board. In comparison, he claims Mr. Day was given an opportunity to explain a criminal investigation against him and was hired despite the investigation. Mr. Day had previously been involved in the local government, but the nature of the investigation or the outcome of that investigation was not established at the hearing. Mr. Chew had a Final Judgment against him by the Illinois Attorney General for what essentially amounted to embezzlement. In contrast, Mr. Day was only under investigation; there was no evidence he was found guilty of anything. Moreover, Mr. Chew failed to disclose a former employer, MNA. There is no proof that Mr. Day tried to hide that he had been under investigation or that he hid his employment by a previous employer. 5 Section 718.111(11)(h), Florida Statues, states: (11) INSURANCE. * * * (h) The association shall maintain insurance or fidelity bonding of all persons who control or disburse funds of the association. The insurance policy or fidelity bond must cover the maximum funds that will be in the custody of the association or its management agent at any one time. As used in this paragraph, the term "persons who control or disburse funds of the association" includes, but is not limited to, those individuals authorized to sign checks on behalf of the association, and the president, secretary, and treasurer of the association.
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 dismissing Donald Chew's Petition for Relief. DONE AND ENTERED this 18th day of November, 2020, in Tallahassee, Leon County, Florida. S HETAL DESAI 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 COPIES FURNISHED: Tammy S. Barton, Agency Clerk Filed with the Clerk of the Division of Administrative Hearings this 18th day of November, 2020. Florida Commission on Human Relations Room 110 4075 Esplanade Way Tallahassee, Florida 32399-7020 (eServed) Donald Chew 1262 Northeast 41st Terrace Avenue Cape Coral, Florida 33909 (eServed) Christina Harris Schwinn, Esquire Pavese Law Firm 1833 Hendry Street Post Office Drawer 1507 Fort Myers, Florida 33901 (eServed) Vanessa Fernandez, Esquire Pavese Law Firm 1833 Hendry Street Fort Myers, Florida 33901 (eServed) Cheyanne Costilla, General Counsel Florida Commission on Human Relations 4075 Esplanade Way, Room 110 Tallahassee, Florida 32399 (eServed)
