The Issue Whether Petitioner is entitled to be certified as a minority business enterprise.
Findings Of Fact West Construction, Inc., is a Florida corporation that is engaged in the construction business. The focus of the business is the renovation and new construction of commercial buildings. Petitioner has been certified as a minority business enterprise by several local governmental entities. Petitioner regularly bids on governmental contracts. Petitioner's application to the Respondent for certification as a minority business enterprise was denied. Petitioner is a "small business" as that term is defined by Section 288.703(1), Florida Statutes. 1/ At the time of the formal hearing, Martha A. Morgan owned 51 percent of the issued shares of stock in West Construction, Inc., served as one of two members of the Board of Directors, and was the President, Treasurer, and Assistant Secretary of the corporation. Ms. Morgan is an American woman. 2/ At the time of the formal hearing, Donald West owned the remaining 49 percent of the authorized and issued shares of stock, served as the other member of the Board of Directors, and was Vice-President and Secretary of the corporation. Mr. West is not a "minority person". Ms. Morgan and Donald West have been married to each other since 1985. West Construction, Inc. was incorporated by Donald West and his father in 1977 after they had operated as a partnership for several years. The corporation is authorized to issue 1,000 shares of common stock. When it was incorporated, a total of 200 shares of stock were issued, with Donald West and his father each being issued 100 shares of stock. When Donald West's father retired in 1984, the corporation repurchased his 100 shares of stock and distributed to him an amount equal to 50 percent of the assets of the business. This distribution adversely impacted the corporation's ability to secure performance bonds for projects. After that repurchase, the only issued shares of stock were the 100 shares that had been issued to Donald West in 1977. Prior to her marriage to Mr. West in 1985, Ms. Morgan had her own separate assets. She contributed these assets to the marriage. The marital assets were thereafter used to obtain performance bonds for the corporation and served as security for other obligations of the company. Ms. Morgan is a college graduate with a degree in Business Administration. Her experience includes working as a certified legal assistant for a land development company. In 1985, Ms. Morgan started working for West Construction doing accounting, posting, and general record keeping. In 1989, she began to take a more active role in the affairs of West Construction in that she did more of the day to day bookkeeping, including payroll and accounting. Since December 1992, Ms. Morgan has been licensed by the State of Florida as a certified building contractor. Ms. Morgan became the majority owner of the company on January 1, 1993, when Donald West transferred to her 51 of his 100 shares of stock in the corporation. Donald West remained the only other stockholder with 49 shares of stock. Effective January 1, 1993, Ms. Morgan became the President, Treasurer, and Assistant Secretary of the corporation. Ms. Morgan and Mr. West became the only two members of the board of directors of the corporation. One of the reasons for the transfer of stock was to qualify the corporation for certification as a minority business enterprise. The consideration for the transfer of the stock to Ms. Morgan was the contribution she had made to the marital assets and the work she had done on behalf of the corporation. There was no separate payment of money by Ms. Morgan for this stock. Donald West has been in the construction business all of his adult life. He has a degree from the University of Florida in building construction and has a general contractor's license and a building contractor's licensed from the State of Florida. Mr. West's construction licenses were used to qualify the firm for construction work between 1977 and December 1992, when Ms. Morgan obtained her building contractor's license. Ms. Morgan's license has been used to qualify the corporation since she obtained it. Ms. Morgan is in charge of managing the finances of the company. Ms. Morgan keeps the company books, pays the bills, and invests any profits. She is responsible for payroll, insurance, bonding, accounts receivables, and billings. Both Ms. Morgan and Mr. West have the authority to sign checks, make withdrawals and deposits on company accounts, and execute bank documents. Both have the authority to draw on a line of credit that has been established by the company, but neither has had the need to do so. Mr. West has the authority to sign company checks, but he seldom does so. Ms. Morgan and Mr. West are jointly and severally liable as indemnitors on the company's bond, and their personal assets, including the jointly owned marital assets, act as security for this risk. Both serve as guarantor's on the company's line of credit. At the time of her application for certification, Mr. West and Ms. Morgan were paid the same salary. Between that time and the formal hearing, Ms. Morgan had increased her salary so that she was being paid $3,000 per month and Mr. West was being paid $2,000 per month. Ms. Morgan testified that she determined her own salary without consulting Mr. West. Ms. Morgan arranged for the financing of the latest vehicle purchased by the company, she determined that the building out of which the company operates should be financed. She made the decision as to how the company's idle capital would be invested. In addition to Mr. West and Ms. Morgan, the company has two other full time employees who were employed by Mr. West before Ms. Morgan became an owner, officer and director of the company. One of these employees is a carpenter and the other is a general laborer. Mr. West is the direct supervisor for these two employees. Ms. Morgan reviews submittals from subcontractors and works as the liaison between subcontractors and the project architect. Mr. West supervises the work of subcontractors. Ms. Morgan is also responsible for finding projects for the company to bid upon. The company subscribes to two services that provide information to potential bidders as to public works projects. Ms. Morgan reviews that information and determines the projects upon which the company will bid. Ms. Morgan obtains and reviews the bid packages, secures any other information she deems necessary by communicating with the contract letting agency or architect, and attends the pre-bid meeting. Both Mr. West and Ms. Morgan work on the company's bid. Mr. West's role is to prepare quantitative takeoffs from the bid plans. Ms. Morgan determines the overhead by factoring in the amount of current business undertaken by the company, the complexity of the project, and the difficulty of the project. Both Mr. West and Ms. Morgan attend pre-construction meetings. Ms. Morgan usually signs the company bids and any resulting contracts as its president and uses her license to qualify the company. Both Ms. Morgan and Mr. West develop the company's work schedule. Despite being licensed as a certified building contractor, Ms. Morgan has never supervised a construction project from beginning to conclusion. The actual construction projects undertaken by the company are supervised and managed by Mr. West. Both Ms. Morgan and Mr. West order materials and supplies for construction projects. Ms. Morgan would have to hire someone to manage the construction projects if Mr. West were not available. The management of this family run company is divided between Ms. Morgan and Mr. West. Petitioner established that Ms. Morgan takes a meaningful role in the management of the affairs of the corporation, but it is also clear that Mr. West takes a meaningful role. The managerial functions performed by both stockholders are essential to the operation of the company. One was not established to be more important than the other. It is found that Petitioner failed to establish that Ms. Morgan exercises dominate control of the affairs of the business.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission on Minority Economic and Business Development enter a final order that denies West Construction, Inc.'s application for certification as a minority business enterprise. DONE AND ENTERED this 16th day of June, 1995, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of June, 1995.
Findings Of Fact Respondent is the governmental agency responsible for certifying persons as minority business enterprises. Petitioner applied for certification as a minority business enterprise. Petitioner is a minority business enterprise within the meaning of Section 288.703(2), Florida Statutes. 1/ Petitioner is a small business concern, domiciled in Florida, and organized to engage in commercial transactions. Petitioner is a Florida corporation wholly owned by Ms. Sandra A. Pichney, vice president, and by Mr. D.B. Young, president. Petitioner engages in the roof consulting business. Ms. Pichney owns 51 percent of Petitioner's outstanding stock. Ms. Pichney is a member of a minority group for purposes of Chapter 288. The remaining 49 percent of Petitioner's outstanding stock is owned by Mr. Young. Mr. Young is a licensed architect. No professional license is required for Petitioner to engage in the business of roof consulting. Petitioner has all of the occupational licenses required to engage in the commercial transactions required to conduct its business. Ms. Pichney has 16 years experience in the roof consulting business. Ms. Pichney controls the daily management and operations of Petitioner's business. Ms. Pichney: manages and operates the office; and is responsible for payroll, accounts receivable, and general financial matters. Ms. Pichney conducts field visits, estimates jobs, reviews projects, and rewrites specifications. Ms. Pichney is the person who signs checks for Petitioner in the ordinary course of Petitioner's trade or business. Mr. Young is authorized to sign checks but only signs checks in emergencies. Ms. Pichney hires and fires personnel. Ms. Pichney consults with Mr. Young, but the ultimate responsibility is born by Ms. Pichney. Ms. Pichney reviews specifications and design work for specific projects and makes amendments where appropriate. Original specifications and design work are prepared by Mr. Young and other personnel. Mr. Young, and other personnel, can be terminated by Ms. Pichney without cause. Mr. Young can be terminated as an employee at any time by Ms. Pichney, without cause. Mr. Young has no employment agreement or shareholder agreement with the company. The board of directors are comprised of Ms. Pichney and Mr. Young. Any director may be dismissed by a majority of the shareholders. As the majority shareholder, Ms. Pichney can terminate Mr. Young, as a director, without cause. Ms. Pichney and Mr. Young receive salaries and monthly draws. Although salaries are equal, monthly draws and dividends are distributed in proportion to the stock ownership of each shareholder. Ms. Pichney has exclusive use of the company car. Ms. Pichney's stock ownership has increased over the last two years because Mr. Young has been unable to attend to the demands of Petitioner's business due to Mr. Young's divorce. Ms. Pichney has properly reported the increase in stock ownership, for purposes of the federal income tax, and has, and will, pay the requisite income tax on her increased stock ownership. Ms. Pichney and Mr. Young consult with each other in making significant decisions in the ordinary course of Petitioner's business. However, the ultimate responsibility for those decisions is born by Ms. Pichney.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order granting Petitioner's application for certification as a minority business enterprise. RECOMMENDED this 22nd day of July, 1995, in Tallahassee, Florida. DANIEL MANRY 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 22nd day of July, 1995.
The Issue The issue for consideration in this hearing is whether Petitioner should be certified as a Minority Business Enterprise, (Woman-Owned).
Findings Of Fact At all times pertinent to the allegations herein, the Commission On Minority Economic and Business Development, now the Division of Minority Business Advocacy and Assistance Office of the Department of Labor and Employment Security, was the state agency in Florida charged with the responsibility for certifying minority and women-owned businesses for most state agencies. It is required, by statute, to ensure that the preference for minority business firms obtained by the certification process are awarded only to those firms for which the benefit is intended. Petitioner, Bay Area Window Cleaning, Inc., is a small business corporation registered in Florida on August 7, 1985. At the time of the original incorporation of the corporation, 1,000 shares of corporate stock were issued of the 7,000 shares authorized in the Articles of Incorporation. Of these, 510 were issued to John D. Richeson, the individual who, with his brother in the late 1970's, started the window cleaning business while a student in college as a means of supporting himself and, later, his wife and family. The remaining 490 shares were issued to Hope L. Richeson, his wife. The funds utilized to start the business and ultimately incorporate were jointly owned by Mr. and Mrs. Richeson. The Articles of Incorporation, as filed initially, list John D. Richeson as incorporator and registered agent, and John D. Richeson and Hope L. Richeson as the Initial Board of Directors. On January 1, 1986, an additional 500 shares of corporate stock was issued in her name to give her a total of 990 shares out of a total 1,500 shares issued and outstanding. Mrs. Richeson's percentage of ownership, after the issuance of the additional 500 shares, was 66 percent. Share certificates reflect this fact. No additional funds were contributed to the corporate assets by Mrs. Richeson as consideration for the issuance of those shares. Mrs. Richeson, currently the President of the company, attended Bible College in Kansas for three years, graduating in 1978. She moved to Florida in 1980 where she attended Hillsborough Community College (HCC), taking as many business education courses as she could in pursuit of an Associates Degree in Business. In addition to that, she has taken the Small Business Administration Class offered by the University of South Florida. She married John Richeson in 1982 and they have worked together in the window cleaning business since that time. After graduating from HCC Mrs. Richeson contacted a family friend, an attorney, for the purpose of incorporating the business. It was at this time she began to run the business. Without asking any questions about the division of duties or the responsibility for leadership in the business, the attorney drafted the incorporation papers making Mr. Richeson the president. Ms. Richeson took the position of vice-president. She admits she did not, at the time, understand the ramifications of that action. Had she known the importance of the title, she would not have acquiesced in having her husband made president. Even though Ms. Richeson was the de-facto head of the business from the time of its expansion from a one-man operation, John D. Richeson served as president of the corporation from inception up to January 1, 1996, when Hope L. Richeson was elected president. At the annual meeting of the Board of Directors of the corporation, held on December 20, 1995, attended by Mr. and Mrs. Richeson, the two directors, the Board recognized Mrs. Richeson's control over the operation of the business since its inception and made her president effective January 1, 1996, when Mr. Richeson, the incumbent, became vice- president Mrs. Richeson indicates, and there is no evidence to the contrary, that neither she nor her husband had any specific training in order to operate the business. What was most important was a general business sense and a knowledge, gained by reading trade periodicals and from experience, of specific window cleaning products. Most of the major business contracts obtained by Petitioner come from bids to government entities and corporations. Other than herself, several employees, namely those who were brought into the business because of their experience with large cleaning projects, evaluate prospective jobs and prepare proposals. This proposal is then brought to her for approval before it is submitted to the potential client. These individuals are her husband and the Van Buren brothers. Based on a job costing formula learned in school, Mrs. Richeson then evaluates the bid to determine if it is too low or too high. She determines if the company can do the job for the price quoted. In addition to bidding, Ms. Richeson claims to oversee every aspect of the business. These functions range from buying office supplies to costing jobs. No one but she has the authority to purchase supplies or equipment other than minor items in an emergency. She also supervises the finances of the operation, determining how earnings are to be distributed and how much corporate officers and employees are to receive as compensation. By her recollection, on several occasions, due to a shortage of liquid funds, she has waived her right to be paid for a particular work period. She claims not to have taken a withdrawal from the corporation for a year, but the corporation's payroll documents reflect otherwise. The salary of each employee is set by Mrs. Richeson. Employees are paid on a percentage of job income. Those employees who do the high-rise jobs receive 40 percent of the income from those jobs. From her experience in the business, this arrangement for paying washers works far better than paying a straight salary. On the other hand, office personnel are paid on an hourly basis. In the event the business were to be dissolved due to insolvency, Mrs. Richeson would lose her 66 percent stock interest in the corporation and her husband would lose his 34 percent interest. There are no other owners of the company, and no one other than the Richesons would bear any loss. Not only can no one but Mrs. Richeson make purchases for the company, even Mr. Richeson cannot sign company checks by himself nor can he pay bills or make any major business decisions. Only she has the authority to borrow money in the name of the corporation. This was not always the case, however. In 1994, Mr. Richeson purchased a new vehicle for the corporation, signing the finance arrangement as president of the company, but even then, Mrs. Richeson signed as co-buyer. Also, the 1994 unsigned lease agreement for the company's use of real property owned by the Richesons calls for Mr. Richeson to sign as president of the company. Mrs. Richeson is the only one in the company who has the authority to hire or fire employees. While she believes the company would go out of business if she were not the president, she also believes she would be able easily to hire someone to replace Mr. Richeson if he were to leave the company. These beliefs are confirmed and reiterated by Mr. Richeson who claims that his role in the company from its very beginning has been that of services rather than management. On August 14, 1995, Mrs. Richeson, who at the time owned 990 of 1,500 shares of corporate stock, filed an application for certification as a minority business enterprise. The application reflected Mrs. Richeson as the owner of a 66 percent interest in the corporation, but also reflected Mr. Richeson as president. This was before the change mentioned previously Melissa Leon reviewed this application as a certification office for the Commission in September 1995. She recommended denial of the application on several bases. The Articles of Incorporation submitted with the application reflect the Director of the corporation as John D. and Hope Richeson and list only John Richeson as incorporator in August 1985. The corporate detail record as maintained in the office of the Secretary of State also reflects the resident agent for the corporation is John Richeson. The corporation's 1993 and 1994 federal income tax returns show John Richeson as 100 percent owner. No minority ownership is indicated. Income tax returns are afforded great weight by the Commission staff in determining ownership. Though Mrs. Richeson claims to own the majority interest in the corporation in her application, the tax returns do not reflect this. In addition, the corporation payroll summaries for February 28, 1995, March 31, 1995 and April 30, 1995 all show John Richeson receiving more income from the business than did Hope Richeson. In the opinion of Ms. Leon, Mrs. Richeson's salary was not commensurate with her claimed ownership interest. The same records for the last three months of 1995 and through April 1996 reflect Mrs. Richeson as receiving more than Mr. Richeson, however. Other factors playing a role in Ms. Leon's determination of non- qualification include the fact that the purchase order for the truck reflected Mr. Richeson as president; the lease agreement shows him signing as president; the bank signature card reflects him as president in 1994 and the corporate detail record shows Mrs. Richeson as resident agent by change dated May 14, 1996, after the filing of the application. Upon receipt of the Petitioner's application, Ms. Leon reviewed the documents submitted therewith and did a telephone interview with Mrs. Richeson. Based on this information and consistent with the guidelines set out in the agency's rules governing certification, (60A-2, F.A.C.), she concluded that the application did not qualify for certification. Not only was the required 51 percent minority ownership not clearly established, she could not determine that the minority owner contributed funds toward the establishment of the business. Ms. Leon determined that the payroll records, reflecting that from February through April 1995, Mrs. Richeson drew less than Mr. Richeson, were not consistent with the same records for the period from October 1995 through April 1996, which reflected that Mrs. Richeson was now earning more than her husband. Further, the amount Mrs. Richeson earned constituted only 53.2 percent of the salary while her ownership interest was purportedly 66 percent. A further factor militating toward denial, in Ms. Leon's eyes, was the fact that there were only two directors. Since Mrs. Richeson was one of two, she could not control the Board, and minority directors do not make up a majority of the Board. While the documents played an important part in Ms. Leon's determination, the telephone interview was also important. Here Ms. Leon found what she felt were many inconsistencies between what was stated in the interview and Mrs. Richeson's testimony at hearing. Therefore, Ms. Leon concluded at the time of her review that the business was jointly owned and operated. It was not sufficiently controlled by the minority party, to qualify for certification. Nothing she heard at hearing would cause her to change her opinion.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Labor and Employment Security enter a Final Order denying Minority Business Enterprise status to Bay Area Window Cleaning, Inc. DONE and ENTERED this 22nd day of August, 1996, in Tallahassee, Florida. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of August, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-5913 To comply with the requirements of Section 120.59(2), Florida Statutes (1995), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. 1. Accepted and incorporated herein. 1. - 4. Accepted and incorporated herein. Accepted and incorporated herein except for the last sentence which is rejected as a legal conclusion. Accepted that she ran the operation. Accepted and incorporated herein. Accepted as a restatement of the testimony of Mrs. Richeson and a generalized agreement with the comments made. - 10. Accepted and incorporated herein, 11. - 12. Accepted. 13. - 14. Accepted. 15. - 17. Accepted. 18. - 19. Not proper Finding of Fact, but accepted as a restatement of witness testimony. 20. - 21. Accepted and incorporated herein. 22. - 25. Accepted as a restatement of witness testimony. Respondent's Proposed Findings of Fact. 1. - 8. Accepted and incorporated herein. Rejected as contradicted by the evidence. Accepted and incorporated herein. Accepted that until after the application was filed, Mr. Richeson was paid more than Mrs. Richeson, but the difference was not great. Accepted and incorporated herein. Accepted and incorporated herein. Rejected as not consistent with the evidence of record except for the allegation concerning Mr. Richeson's authority to sign corporate checks, which is accepted and incorporated herein. COPIES FURNISHED: Miriam L. Sumpter, Esquire 2700 North Dale Mabry Avenue, Suite 208 Tampa, Florida 33607 Joseph L. Shields, Esquire Department of Labor and Employment Security 2012 Capital Circle, Southeast Hartman Building, Suite 307 Tallahassee, Florida 32399-2189 Douglas L. Jamerson, Secretary Department of Labor and Employment Security 2012 Capital Circle, Southeast Hartman Building, Suite 303 Tallahassee, Florida 32399-2152 Edward A. Dion, General Counsel Department of Labor and Employment Security 2012 Capital Circle, Southeast Hartman Building, Suite 307 Tallahassee, Florida 32399-2189
Findings Of Fact At all times pertinent to the issues herein, the Respondent, Commission, was the state agency responsible for the certification of Minority Business Enterprises in Florida. Petitioner, Computer Service, was founded by Ronald E. Willett in January, 1987. It is a computer maintenance and repair company of which Brenda Willett is currently President and Chairman of the Board and owner of a 51 percent share of the capital stock issued on December 15, 1993. Ronald E. Willett is the Executive Vice-president, a Director, and owner of a 49 percent share of the capital stock. Mr. Willett was the sole owner and Chairman of the Board until May, 1994, at which time he gave 51 percent of the stock to his wife, Ms. Willett, and the Board elected her Chairman. Ms. Willett has been in the data processing field for 13 years. Before she began working with the Petitioner, she was a computer programmer for the State Attorney's office. She uses computer software to help with managing the affairs of the company, but she is neither a programmer nor a technician. She does not do any repair work for the company because she is not trained to do it. Most of the repair work is done by her husband and two computer engineers employed by the company. A fifth employee works in the warehouse and repairs printers. Of the non-family employees, Ms. Willett interviewed one and hired another. Now she is responsible for all interviewing and hiring. Because of the technical nature of the work, however, she does the initial screening interview after which either Mr. Willett or one of the engineers evaluates the candidates' technical qualifications. She completes the evaluations of her employees' performance by relying on her customers to evaluate the employees' technical performance. In addition, she notes when an employee orders an inordinate amount of parts for a job instead of doing repair work because that generally indicates the employee is not performing properly. Ms. Willett is paid $1,500 every two weeks. Her husband is paid $6,500 per month, and each of the engineers is paid $40,000 per year. Ms. Willett is primarily in charge of the business administration. The inventory of repair parts is maintained at the company warehouse and at the various work sites where the company has contracts to maintain the equipment. Each repairman notifies her of the parts needed. She gets prices and orders the needed parts. The company does not have a line of credit with suppliers. Ms. Willett has, in the past, personally signed for a line of credit which was used for the company. The company presently owes $18,000 to a power supply company under a contract which she negotiated. For the past year, she has been the only company official to sign to commit the company on loans. In addition, Ms. Willett negotiates the company's contracts with customers and she works as a team with the engineers on pricing. The company works on a basis of 35 - 50 percent off IBM prices for similar service. Though her husband helps her decide on what machines the company can buy and repair, she would not need to replace him if he should retire. He is currently working only 18 -20 hours per week. The company submitted its application for minority business enterprise certification on April 18, 1994. Ms. Willett indicated she did not know about the program until it was mentioned to her by an instructor in a course she was taking, and she felt it would help her secure business. As a woman, she was finding it difficult to be taken seriously by the male business officers and managers she dealt with in soliciting business, and she understood that the minority certification would help her qualify for state contracts. The initial review of Petitioner's application was accomplished by Mr. DeLaO, who requested and received from Petitioner matters needed in clarification or amplification of the information contained in the application. Mr. DeLaO also conducted a telephone interview with Ms. Willett to determine how the business was operated and to reaffirm the accuracy of the documentation. Mr. DeLaO did not look elsewhere for information. Based on the information listed above, he recommended denial of the Petitioner's certification. Mr. DeLaO's recommendation was based on several factors, all of which are listed in the recommendation submitted in writing to his supervisor. The problems he found included: The risk of the minority owner, as weighed against the risk of the non-minority owner indicated Ms. Willett, who had received her shares as a gift, had no investment in the corporation to lose. Mr. DeLaO felt the risk of the minority owner should be greater than that of the non-minority owner. Risk was defined as the amount of investment capital put in to start the company or to purchase ownership. The minority owner's wages were not commen- surate with her percentage of ownership. Here, Mr. Willett, the non-minority owner, was making more than she was, as were both engineers. The Board of Governors of the corporation was not controlled by the minority owner. At the time of the review, only Mr. Willett was on the Board. Now that she is on the Board, she still does not control it because she one of only two Directors. Ms. Willett does not appear to have the technical expertise and capability to control the business of the company. She does not appear to have the technical education or experience to do the work of the company herself or to properly evaluate how her employees are performing it - computer repair. Her contribution appeared to be only administrative. Ms. Willett admits her ownership of the 51 percent of the shares of the company was a gift from her husband who felt she deserved it. She claims, however, that the initial cash infusion to the company, when it was first started, came from jointly owned funds utilized to purchase the necessary tools to start Mr. Willett in business. From that initial investment the corporation grew. It should be noted, however, that the actual transfer of stock ownership to Ms. Willett took place just four months prior to the filing of the application for certification, and Ms. Willett's election to the Board came in May, 1994, after the application was filed. The allegation regarding Ms. Willett's salary relative to that of her husband and two of the three other employees is correct. By the same token, the comments regarding her Board membership are also correct. In addition, it is clear her technical competence is insufficient to permit her to accomplish a majority of the computer repair functions completed by her employees. Whether she must be qualified to perform all tasks done by each employee is debatable. She must, however, have a general knowledge of the business which would make her supervision and management meaningful, and it is not at all clear she possesses either those skills or that knowledge. She is quite correct in her claim, however, that if she did not get the contracts, the workmen would have no work to do. Mr. DeLaO's supervisor, to whom his recommendation for denial of certification was addressed, on August 24, 1994 concurred with his recommendation and notified Ms. Willett, on behalf of the Petitioner, that the request for certification as an MBE was denied. The letter of denial contained the Commission's basis for denial.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that Respondent enter a Final Order in this case denying Computer Service Concepts, Inc.'s request for certification as a minority business enterprise. RECOMMENDED this 28th day of February, 1995, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of February, 1995. COPIES FURNISHED: Brenda J. Willett, pro se Computer Service Concepts, Inc. 7616 Industrial Avenue, Suite 3 New Port Richey, Florida 34668 Susan P. Stephens, Esquire Office of the Attorney General The Capitol, Suite PL-01 Tallahassee, Florida 32399-1050 Crandall Jones Executive Administrator Commission on Minority Economic and Business Development Knight Building 2727 Centerview Drive Tallahassee, Florida 32399-0950 General Counsel Commission on Minority Economic and Business Development Knight Building 2727 Centerview Drive Tallahassee, Florida 32399-0950
Findings Of Fact The Petitioner, Parson & Associates, Inc., d/b/a Overhead Door Company of Tampa Bay (Parsons & Associates), is a Florida corporation, having been incorporated under the laws of the State of Florida in March, 1992. The principal place of business for Parsons & Associates is 5134 W. Idlewild, Tampa, Florida. The Petitioner corporation engages in the business of the sale, installation, and repair of overhead doors, both residential and commercial. The corporation has ten (10) full-time employees and one (1) part-time employee. The only stockholders of the Petitioner corporation are: Gail Parsons, the minority owner; and her son-in-law, Robert Briesacher. Gail Parsons owns eighty (80 percent) of the stock of Parsons & Associates. Robert Briesacher, who is not a minority, owns the remaining twenty (20 percent) of the Petitioner corporation. Gail Parsons was the incorporator of Parsons & Associates when it was initially incorporated. She also is its President. Robert Briesacher is the Vice-President. Prior to the incorporation of Parsons & Associates, Gail Parsons, who has a Bachelor of Business Administration degree, worked for the Better Business Bureau. Robert Briesacher had previous experience in the overhead door business, having worked for Overhead Door Company of Clearwater. Briesacher, who at the time was engaged to marry Parsons's daughter, learned from Overhead Door Corporation (the manufacturer) that the manufacturer intended to establish a distributorship in Tampa. Briesacher told Parsons about it. While Briesacher had the knowledge and experience to successfully sell, install, and repair both residential and commercial overhead doors, he had no money to invest in the business opportunity and had no experience running his own business. Thinking that she might be able to help her daughter and future/present son-in-law, and herself, by combining her capital and business and financial skills with his knowledge and technical skill in the automatic door business, Parsons suggested to Briesacher that they go into business together. He readily agreed, and the pursued the opportunity with the manufacturer. Parsons incorporated the business, registered the fictitious name, compiled the business plan, developed the cash flow projections (with Briesacher's help), found the office/warehouse space (which the manufacturer had to approve), and negotiated, executed, and personally guaranteed the lease agreement and negotiated the Distributorship Agreement with the manufacturer. Briesacher provided none of the initial start-up monies for the Petitioner. Gail Parsons is the financial interest holder in the corporation, having made all the initial contributions to capital ($38,000), as well as making all the personal loans to the corporation thereby accepting all the financial risk. Parsons personally guaranteed the promissory note, the credit agreement, contracts required to be personally guaranteed and the warehouse lease. The Distributorship Agreement is a standard Overhead Door Corporation agreement common to all distributors nationwide. It is customary for a manufacturer like Overhead Door Corporation to offer a distributor incentives-- like yellow page advertisement, signage, and telephone numbers--in order to gain market penetration. In the case of Parsons & Associates, Overhead Door supplied a telephone number (the number Overhead Door previously had bought from the prior distributor in Tampa), a year's worth (about $10,000) of yellow page advertising, and some signage. The total fair market value of the incentives to Parsons & Associates was approximately $31,000, but the marginal cost to the manufacturer was less. In the initial months of operation of the business, Gail Parsons had to rely on Briesacher and the first employee they hired, Charles Martin, who worked under Briesacher at Overhead Door of Clearwater, to teach her what she had to know about the technical aspects of the business. She had to learn about the Overhead Door products and the basics of how to install them. This knowledge, which she quickly acquired, soon enabled her to take service orders, schedule the orders, supervise the day-to-day activities, perform trouble-shooting over the telephone and handle all of the sales calls. Meanwhile, Robert Briesacher was in the field with Martin installing and servicing Overhead Doors. Briesacher currently corresponds with the factories on product orders, schedules and supervises the installers, and takes the physical inventory. Commercial bidding is only one portion of the total corporate sales, which includes residential new construction, residential service and residential retrofit. Over ninety-five (95 percent) percent of the business of Parsons and Associates is handled over the telephone from the office where Parsons spends virtually one hundred (100 percent) percent of her time. Parsons is personally responsible for the majority of the residential sales, including negotiating and contracting with contractors, and negotiating and entering into the agreement to provide installation services for Home Depot door sales. Business from negotiating, estimating, and bidding on contracts in the field is a relatively small portion of the company's overall revenues. Gail Parson is involved in the interviewing of prospective employees, including Martin and Charles Jarvis. She confers with Briesacher, but she alone controls hiring and firing. She possesses the knowledge to evaluate employee performance and has demonstrated her supervisory authority and evaluation skills in exercising her authority to fire an employee. Actually, it is not difficult to evaluate the performance of installers: service calls on warranty work and customer complaints generally tell her all she needs to know. The Petitioner/corporation has both commercial and residential outside sales persons who prepare bids for the Petitioner. The minority owner, Gail Parsons, establishes the geographic and profit margin parameters, which ultimately control the bidding process. She inspects all bids prior to executing the contracts, thereby further controlling who, where and under what terms the Petitioner corporation does business. In fact, Parsons recently rejected an accepted bid and cancelled the job because it was too far from Tampa. While both Gail Parsons and Robert Briesacher are authorized to sign checks for Parsons & Associates, Briesacher has signed less than five checks, out of the thousands of checks written. Parsons and Briesacher draw the same salary. However, their salaries are commensurate with the work they perform for the company. Parsons has chosen the salary levels; Briesacher does not even know what Parsons's salary is. Parsons also is entitled to an 80/20 split of any future distributions as a result of the operation of the company. Briesacher has the use of a company truck, while Parsons does not. However, Briesacher is a part-time installer and service man, while Parsons is not. All installers/service technicians at Parsons and Associates have the use of company trucks, not just Briesacher. Currently, in addition to controlling the entire corporation and making all of the business decisions, Gail Parsons sets inventory parameters, purchases the inventory, sells doors in the showroom, knows the purchased products, is responsible for accounts receivable, handles the payroll, and assists in the scheduling and supervising of the installers.
Recommendation On the basis of the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Management Services enter a final order granting Petitioner's application for certification as a minority business enterprise (MBE). RECOMMENDED this 14th day of July, 1994, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of July, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-1268 To comply with the requirements of Section 120.59(2), Fla. Stat. (1991), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. 1.-3. Accepted and incorporated. First sentence, rejected as contrary to facts found; the rest is accepted and incorporated. Second sentence, rejected to the extent that it implies that Briesacher has no financial interest. Otherwise, accepted and incorporated. Accepted and incorporated. Rejected, as contrary to facts found, to the extent that it implies Parsons knew it all from the start and that Parsons "supervised" Briesacher and Martin installing and servicing doors; in fact, there was a learning curve. Otherwise, accepted and incorporated. 8.-11. Accepted and incorporated. Respondent's Proposed Findings of Fact. 1.-2. Accepted and incorporated to the extent not subordinate or unnecessary. 3.-4. Accepted and incorporated to the extent not subordinate or unnecessary. Last sentence, rejected in part as contrary to facts found and as contrary to the greater weight of the evidence. (She makes sales and trouble- shoots, and is no longer just learning those aspects of the business.) Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. Accepted and incorporated to the extent not subordinate or unnecessary. However, except for actually installing and servicing doors, Parsons also does the same jobs as Briesacher to some extent, and some of Briesacher's functions are ministerial in light of Parsons's management decisions. Penultimate sentence, rejected as contrary to facts found and as contrary to the greater weight of the evidence; he proposed "piece-work" but Parsons participated in the final decision. (Since it is standard in Florida, it was not a difficult or controversial decision.) Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. (However, "joint responsibility" should not be construed to mean "equal authority." Parsons has the final say.) Accepted and incorporated to the extent not subordinate or unnecessary. However, while Parsons's knowledge and skill does not exceed the others' in the area of installing and servicing doors, she has enough knowledge to control the business. The characterization "very broad" in the last sentence is rejected as contrary to facts found and as contrary to the greater weight of the evidence. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. However, again, while Parsons's knowledge and skill does not exceed the others' in the area of installing and servicing doors, and while she does not personally install and service doors, she has enough knowledge to control the business. 10.-14. Accepted and incorporated to the extent not subordinate or unnecessary. Again, while Parsons and Briesacher, and other employees, share responsibilities, Parsons has the knowledge necessary to control the business and has dominant control over the business. COPIES FURNISHED: Jonathan D. Kaplan, Esquire 6617 Memorial Highway Tampa, Florida 33615 Wayne H. Mitchell, Esquire Department of Management Services Office of the General Counsel Suite 312, Ninth Building 2737 Centerview Drive Tallahassee, Florida 32399-0950 William H. Lindner, Secretary Department of Management Services Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 Paul A. Rowell, General Counsel Department of Management Services Knight Building, Suite 312 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950
Findings Of Fact Kasper Corporation, a speciality subcontractor, was formed during April 1987, and is engaged in the business of performing concrete gutter work, curb elements, traffic separators, barrier walls, sidewalks, formation of ditch and slope pavement, pipe culverts, and storm sewers. Most of its business activities are conducted in the area of Pasco, Hillsborough, Pinellas, Hernando, Citrus, Manatee and Sarasota counties. Ms. Deneweth purchased 100% of the stock of Kasper Corporation in September, 1988 for the sum of $10.00. Ms. Deneweth contends that she has deposited approximately $9,000.00 into the corporation between September and December, 1988 and has withdrawn approximately $6,000.00 as a withdrawal of capital. No documentation was provided to substantiate either the deposit or the withdrawal of funds by Ms. Deneweth. Prior to Ms. Deneweth's purchase of Kasper Corporation, she had no training or experience in the principal business activities in which Petitioner is engaged, having graduated from high school during June 1981, and having been employed as receptionist/secretary and office manager for a regional medical center, a physician and an engineering firm from 1981 thru 1987. Kasper Corporation's field supervisor is Steven D. Kasper, a nonminority, whose training and experience includes substantial concrete construction work. Steven Kasper is responsible for preparation of job estimates and the submission of bids to prime contractors. Kasper works in cooperation with Michael R. Knox, a civil engineer who is also a nonminority. Knox is employed by Petitioner as a consultant. Ms. Deneweth, the only minority involved in the internal operations of Kasper Corporation, has limited experience in the principal operations of Kasper Corporation. Ms. Deneweth has no training or working knowledge of the requirements and procedures for bid preparations, of the type of equipment or materials required to perform the principal activities of Kasper Corporation. Ms. Deneweth lacked familiarity with all significant details of Petitioner's internal operations, field operations, financial operations and the bidding procedures. All significant bidding, principal construction activities and financial requirements are carried out by the two nonminorities, Messrs. Kasper and Knox.
Recommendation Based on the foregoing findings of fact and conclusions of law it is recommended that Respondent enter a Final Order denying Petitioner's application for recertification as a disadvantaged business enterprise pursuant to Chapter 14-78, Florida Administrative Code. RECOMMENDED this 24th day of April, 1990, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL 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 24th day of April, 1990. COPIES FURNISHED: Vernon L. Whittier, Jr., Esquire Department of Transportation Haydon Burns Building, M.S. 58 605 Suwannee Street Tallahassee, Florida 32399-0458 Marianne Deneweth, President KASPER CORPORATION 5006 Trouble Creek Road Suite 215 New Port Richey, Florida 34652 Robert Scanlan, III, Esquire General Counsel Department of Transportation 562 Haydon Burns Building Tallahassee, Florida 32399-0458 Ben G. Watts, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0458
Findings Of Fact At all times pertinent to the issues herein, the Department had the authority to certify those firms who qualified as MBE's for the purpose of contracting with it under the provisions of Chapter 13-8, F.A.C. When an application for MBE status is received at the Department's certification office in Tallahassee, it is assigned to one of five certifying officers who reviews it and determines whether it is complete as submitted or requires additional documentation. This is called a desk audit review. In the event all required documents have not been submitted with the application, they are requested in writing and the applicant has thirty days to provide them. Failure to do so results in denial of the application. If, on the other hand, all the required documentation is present, a decision is then made as to whether an on-site visit of the applicant's operation is necessary. If so, Department personnel go to the site and look to see if the business can qualify as an MBE. If an on-site visit is appropriate, but for some reason cannot be made, Department personnel try to get the required information by phone. The decision to approve or deny certification is made, based on the reviewing certifying officer's recommendation, by the certification manager who, before making a decision, personally reviews the file and, if appropriate, sends it to the Department's legal staff for additional review. Once the legal staff has made its recommendation, if the decision is made to deny the application, a letter of denial is sent to the applicant who may then appeal that decision. An application must meet all criteria set out in Rule 13-8, F.A.C. to be certified as an MBE. Each application is looked at on a case by case basis to see if those criteria are met. In the instant case, the denial was based on the Department's concern over several factors. These are related to Rule 13- 8.005(3), F.A.C. and included A question as to whether the business was actually controlled by Ms. Hogan. The nature of the corporate structure. The application of Chapter 47, F.A.C., dealing with the construction industry. The ability of both Hogan and Perretta to sign business checks. Whether Ms. Hogan had the technical and mechanical capability, skills and training to run a construction company, and Whether Ms. Hogan could effectively control such areas as financing, purchasing, hiring and firing, and the like. In arriving at its decision to deny Petitioner's application, the Department relied only on those matter submitted with the application. It did not ask for or seek any information about the company and its operation beyond that initially provided. Notwithstanding her recommendation in this case, Ms. Freeman has previously recommended the certification of numerous woman owned businesses as MBEs. On April 6, 1990, Ms. Hogan, as owner of E.C. Construction, Inc., a licensed general contractor qualified under the license of Carmen M. Perretta, applied to the Department for certification as a woman owned MBE. The application form reflected Ms. Hogan as the sole owner of the business, a corporation created under the laws of Florida. Ms. Hogan was listed on both the Articles of Incorporation, (1989), and the application form in issue here as the sole officer and director of the corporation, as well. Mr. Perretta was to be merely an employee of the firm, E.C. Construction, Inc.. In that regard Ms. Hogan claims, and it is so found, that the letters, "E. C." in the corporate name do not stand for Elinor and Carmen. Instead, they stand for Elite and Creative. Ms. Hogan is a 63 year old widow who professes a long-standing interest in building, design and decorating. In 1950, she and her husband started a floor covering business in another state which they operated for nineteen years. In 1969 they moved to Florida where her husband started a lawn maintenance business in Sarasota. She worked full time as a nurse at a local hospital and still found time to assist her husband in every aspect of their business including marketing, bookkeeping, public relations, etc. Her husband took ill in early 1986 and from that time on and after his death in May, 1988, until the business was sold almost a year later, she exercised complete control. She still runs a wedding supply and stationery business from her home. She sold the lawn business because she wanted to break the emotional links with the past and since she had some experience in construction, design and remodeling of her own home, went into the construction business establishing the Petitioner firm. In the few preceding years, she had designed and supervised several construction projects in the area in which she attended to financing, hiring the1 subcontractors, and supervision of the work. She also took some courses in design and has taken other courses and seminars in financing, accounting, marketing, advertising and operating a small business. Ms. Hogan and her husband met Mr. Perretta in 1987 when they put an addition on their house and she was impressed by his talents. When she decided to look into going into the construction business, she turned to him for advice and ultimately recruited him as the corporation's qualifying agent. Notwithstanding the fact that neither the corporate documents nor the application for MBE status so reflect, Ms. Hogan's lawyer now indicates that Perretta was also made a Vice-President of the firm, but his authority was limited to those actions necessary to meet the minimum compliance requirements of Florida law. When confronted with this discrepancy, Ms. Hagan claimed that the corporate papers and the application were in error and that she didn't know what they meant when she signed them. Ms. Hogan claims to be in full and complete control of all corporate activities, and to delegate to Mr. Perretta those responsibilities and functions, relating to the actual construction, that he is best qualified to carry out. She claims she does not share dominant control of the daily business activities of the firm though the evidence indicates both she and Mr. Perretta can individually sign corporate checks. In that regard, she claims he has signed only 19 of more than 500 checks issued by the firm since its inception. They have an understanding he will sign checks only for the purchase of materials, and then only in an emergency situation. He claims to no longer use that authority. The Department introduced no evidence to the contrary. Ms. Hogan admits to not having formal construction training or experience but, based on her other experience, believes she is qualified to run a business. Under her leadership the company has reportedly secured over one million dollars in contracts and for the most part, has performed them successfully. Under oath she claims to negotiate the contracts, prepare the estimates and deal with contracting customers in all the projects in which the company is engaged. She claims to have made those contractual decisions independent of Mr. Perretta to whom she is not accountable. Yet, as was seen, the Articles of Incorporation wrongfully indicate her as the only officer when Mr. Perretta was actually a Vice-President, and she claims not to have known that. This gives rise to some doubt as to her business credentials. In reality, Mr. Perretta actually directs and supervises the actual construction work at all job sites and schedules the subcontractors and materials to insure their presence at the job when needed. When changes are required, Mr. Perretta gives the necessary information to Ms. Hogan who prepares the change orders, including the typing, and forwards them as appropriate. Ms. Hogan has also entered into an agreement, dated June 25, 1989, with Mr. Perretta whereby, in lieu of salary as qualifying agent and field superintendent for the company, he is to receive 40% of the gross profits of each construction project. He gets a periodic draw against that percentage. In addition, in May, 1989, Ms. Hogan, as President, and Mr. Perretta, as Vice- President, entered into an agreement with Raymond Meltzer to retain him as general manager of E.C.'s Designer Structures division. Under the terms of the agreement, Mr. Meltzer was to have "absolute, unlimited and exclusive authority" to conduct all affairs of the division, except to incur debt other than short term debt to subcontractors. Mr. Meltzer was to have the right to draw checks on a separate E.C. account in a bank of his choosing, and was to receive 95% of all monies received as a result of the activities of that division. E.C. was to obtain the required permits or licenses for projects and to provide such supervision as is required by law. Though Petitioner did not incorporate under the name Designer Structures, nor did it register that name under the fictitious name statue, it continues to do business under that name. When it does, business is not conducted out of E.C.'s office, but from Meltzer's office instead. This is not consistent with Petitioner's MBE application which reflects only one office. Petitioner submitted at the hearing a notarized statement dated December 8, 1990, from Mr. Meltzer in which he admits to seeking to originally use Mr. Perretta and E.C. primarily as a qualifying agent for his own construction activities. The terms of the agreement referenced above tend to confirm that arrangement. Nonetheless, he is of the opinion that Ms. Hogan possess excellent business acumen and administrative abilities, and, he claims that, based on his initial meeting with her, he abandoned his plans to set up his own business and went into a business relationship with her. The evidence indicates he develops the work for the division and gets 95% of the fee. Ms. Hogan claims to be considering terminating the arrangement since it has not proven to be a lucrative one. She is apparently not aware the agreement specifically states it is for a three year term and carries options to renew. Though both Petitioner's application for MBE status and its bonding application indicate E.C. has no employees, Ms. Hogan testified that both Mr. Perretta and Mr. Meltzer are employees. She claims to use only subcontractors in the accomplishment of company projects and this appears to be so. She claims to have the strength of character and the will. to manage, hire and fire subcontractors as required. There is other evidence in the record, however, to indicate that Mr. Perretta actually schedules the subcontractors and materials to insure their presence at the job site when needed. It is found that there are no other employees who do direct, hands on contracting work, but while there may be a question of word meaning, it is clear that both Perretta and Meltzer qualify as employees. E.C.'s application for MBE status also indicates that it had not executed any promissory notes, yet there is a note for $3,500.00 from E.C. to Mr. Perretta, dated May 10, 1989, on which no payments have been made. Though Ms. Hogan claims to be fully in charge of running the business side of the operation, she is apparently also unaware of certain basic facts other than those previously mentioned. In addition to the inconsistencies regarding the office structure and her mistake concerning the employee status of Mr. Perretta and Mr. Meltzer, as well as her error regarding the loan, she was also in error as to the company's net worth. Whereas she indicated it was set at about $30,000.00, the company's most current financial statement reflects net worth at just above, $6,000.00, revealing her estimate to be 80% off. She also did not know the character of Mr. Perretta's license, (Class E.C. owns very little construction equipment and Ms. Hogan rents all needed equipment as indicated to her by Mr. Perretta. The lack of ownership is not significant, however. The one piece of equipment the company owns is a transit level which was purchased at Mr. Perretta's insistence. He has also donated to the company some used office equipment from his prior business as a contractor. He was not paid for it. Other equipment, in addition to office space, was furnished by Mr. Meltzer.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that a Final Order be issued in this case denying E.C. Construction, Inc.'s application for certification as a Minority Business Enterprise. RECOMMENDED this 22nd day of January, 1991, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of January, 1991. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 90-5217 The following constituted my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of fact submitted by the parties to this case. FOR THE PETITIONER: None submitted FOR THE RESPONDENT: & 2. Accepted and incorporated herein. Accepted. & 5. Accepted and incorporated herein. Accepted and incorporated herein. & 8. Accepted and incorporated herein. 9. & 10. Accepted 11. - 13. Accepted and incorporated herein. 14. & 15. Accepted and incorporated herein. Rejected as to her prior experience though it was limited. Accepted and incorporated herein. - 20. Accepted and incorporated herein. Accepted. - 24. Accepted. Accepted and incorporated herein. & 27. Accepted and incorporated herein. 28. & 29. Accepted. Not proven. - 33. Accepted and incorporated herein. 34. & 35. Accepted and incorporated herein. Unknown but accepted. Accepted. Accepted and incorporated herein. COPIES FURNISHED: Guy Brisson, Personal Representative E. C. Construction, Inc. 105 Island Circle Sarasota, Florida 34232-1933 Dannie L. Hart, Esquire Joan V. Whelan, Esquire Department of General Services Suite 309, Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-0950 Ronald W. Thomas Executive Director Knight Building Koger Center 2737 Centerview Drive Tallahassee, Florida 3399-0950 Susan Kirkland General Counsel DGS Suite 309, Knight Building Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950
The Issue The Department of Environmental Regulation issued a Reguest for Statement of Qualification for Petroleum Site Cleanup Services, Solicitation #9111C. Attachment F to the solicitation sought information related to utilization of minority business enterprises as subcontractors. Points were available for said utilization. The Department awarded zero points to parties which failed to include the three pages of the attachment in the responses to the solicitation. The issue in this case is whether the Department acted in accordance with law in awarding zero points for failure to submit all three pages of Attachment F.
Findings Of Fact On March 1, 1991, The Department of Environmental Regulation (DER) issued a Request for Statement of Qualifications (RFSOQ) for Petroleum Contamination Site Cleanup Services, Solicitation #9111C. As stated in the RFSOQ, the DER's objective is to enter into approximately ten contracts for petroleum cleanup services with contractors most qualified to perform the services. It is in the best interests of the state and the DER to enter into such contracts with the most qualified contractors available. Selected firms will be placed under contract with the DER to respond to task assignments. There is no work guaranteed to any contractor as a result of being selected and placed under contract. The cover sheet to the DER Solicitation #9111C identifies Attachment B as "General Instructions", Attachment C as "Instructions for Preparation of an SOQ", Attachment F as "Minority Business Certificate" and Attachment N as an "SOQ Checklist." In the RFSOQ, the DER specifically reserved the right to waive minor irregularities. The general instructions set forth at Attachment B provide, that the DER "may waive minor informalities or irregularities in the SOQs received where such are merely a matter of form and not substance, and the corrections of which are not prejudicial to other contractors." The DER is not required to waive all minor irregularities. The ability to waive such defects is within the jurisdiction of the agency. The evidence establishes that the DER applied such discretion consistently. There is no evidence that, at any time prior to the SOQ opening, did the Petitioner or Intervenors seek additional information from the DER regarding the agency's discretion to waive minor irregularities. Attachment C provides that "ANY AND ALL INFORMATION SUBMITTED BY A CONTRACTOR IN VARIANCE WITH THESE INSTRUCTIONS WILL NOT BE REVIEWED OR EVALUATED (e.g. pages beyond the 20-page SOQ limit will not be reviewed) or may result in the response being deemed non-responsive and rejected as noted." The purpose of the statement was to discourage responders from submitting information beyond that required by the RFSOQ, in order to provide a common basis for the evaluation of all SOQs submitted. The provision also provided the DER with the ability to reject an SOQ which failed to substantially comply with the agency's solicitation. Attachment C states that an SOQ shall consist of three parts, a one- page transmittal letter, a 20-page SOQ, and "other required information". According to Attachment C, the SOQ was to contain an introduction, a section on the company's background, a statement of experience and knowledge related to the qualifications required by the RFSOQ, a description of project organization and management appropriate to the tasks assigned, a list of personnel responsible for completion of assigned task, a list of "a minimum of ten separate and verifiable former clients other than the FDER" and related information. Work performed for the DER was to be set forth separately in addition to the ten non-DER clients. "Other required information" included minority business utilization information. Attachment C provides as follows: Contractors submitting SOQs under this solicitation must identify intended minority subcontractors and estimated percentage of total contract amount to be awarded to minority firms on Attachment F of this Request for Statement of Qualifications. Use of any document other that Attachment F shall result in disallowance of any credit for use of minority subcontractors. (emphasis supplied.) Evaluation points were available on a scaled basis to contractors based upon their commitment to utilization of minority businesses enterprises in their SOQs. Attachment B provides that "Minority Business Utilization will be evaluated. provided that the responder complies with the reporting requirements contained in Attachment F...." (emphasis supplied.) Attachment F, page 1 of 3, provides as follows: Directions: Each contractor and/or subcontractor which meets the definition of a certified small minority business, as described below, shall submit an originally signed copy of page 1 of this Attachment in the response package to this solicitation. If more than one minority business is to be used, the prime contractor shall copy this page and have each minority business complete that copy as though it were an original. A prime contractor which intends to utilize subcontractors meeting the definition of small minority business is responsible for completing page 2 of this Attachment. A prime contractor which meets the definition of a small minority business is responsible for completing page 3 of this Attachment. If a particular page of this Attachment is not applicable, the prime contractor shall so indicate on that page and include the page as part of the response package. At a minimum, the entire three page Attachment F shall be submitted in the response package. Failure to submit-- this Attachment in the response package shall result in the responder receiving a score of zero (0) for minority business utilization. (emphasis supplied.) Attachment N, the "SOQ checklist," provides a list of items which are to be "properly completed, signed and enclosed" in order to "ensure that your SOQ is responsive to FDER Solicitation No. 9111C...." Item 3.b. of Attachment N reads: "Minority Business Utilization Form - if applicable (Attachment F)". As stated in Attachment B to the RFSOQ, on March 13, 1991, a mandatory pre-bid meeting was held in Tallahassee, Florida, at the DER's offices for all contractors wishing to submit a Statement of Qualifications (SOQ). Failure to attend the meeting would have resulted in rejection of SOQs submitted by non- attending contractors. The Petitioner and Intervenors were represented at the pre-bid meeting. The meeting provided an opportunity during the solicitation process to have technical, legal or administrative questions answered. Accordingly, potential responders are expected to have read the complete RFSOQ prior to the meeting. At the pre-bid meeting, the DER did not review every part of the solicitation, but invited questions from participants. The DER official conducting the meeting stated that "any and all information submitted by a contractor in variance with these instructions will not be reviewed or evaluated," however, the other directions provided in the RFSOQ were otherwise reviewed only upon request. Although there was a specific discussion of the requirements for reporting proposed minority business utilization, there were no questions asked with regard to the requirements for completion of Attachment F. There were no questions asked regarding the DER's right to waive irregularities, or whether the failure to submit Attachment F in accordance with the directions would be regarded by the agency as a minor irregularity. Potential responders also had an opportunity to submit written questions prior to a time certain. There is no evidence that questions were raised related to the requirements of Attachment F or to the DER's application of it's discretionary authority to waive minor irregularities. On March 22, 1991, the DER issued an addendum, not material to this case, to the Request for SOQs. The addendum was sent by certified mail to each contractor represented at the March 13, 1991 meeting. On March 27, 1991, a second addendum was sent to each contractor. The addendum, among other things, changed the date for submission of an SOQ from April 1, 1991 to April 15, 1991 at 2:00 P.M. On April 15, 1991, SOQs were submitted by the Petitioner and Intervenors in this case. The bids were opened at 2:00 P.M. or shortly thereafter, and subsequently evaluated and scored by DER personnel. In some categories, points were awarded on a weighted basis, which provided a relative ranking of responders. For example, the prime contractor with the highest minority business enterprise subcontractor utilization received 13 points, with lesser ranked contractors receiving fewer points. On June 3, 1991, at 10:05 A.M. bid tabulation results were posted in the DER's contract office. The Petitioner and Intervenors in this case submitted responsive SOQ's to DER solicitation #9111C. The result of the DER's evaluation was the development of a short list of contractors permitted to make oral presentations to agency officials after which the DER will initiate contract discussions with approximately ten contractors. The SOQs were reviewed by DER officials who initially identified information submitted which did not comply with the requirements of the RFSOQ. Irregularities were identified and discussed with DER legal counsel to determine the materiality of the irregularity and to ascertain the appropriate treatment of the defects. The DER officials did not disclose the identity of the responder during the discussions, although the person identifying the defect was aware of the related responder. However, there is no evidence that the three DER officials were aware of an individual non-complying contractor's identity, or that the decision to waive such irregularities was based upon the identity of the participants. The DER determined that, in order to be equitable to all participants, it would not waive irregularities where the directions were clear and the consequences for noncompliance were specifically set forth. If the solicitation were less clear, or the consequence of noncompliance with the requirement was not specifically identified, the Department attempted to be more lenient regarding the waiver of such irregularities. Where the DER waived irregularities, such waivers were awarded on a consistent basis without regard to the individual responders involved. Information which was not to be reviewed or evaluated was concealed by either covering the information with white paper, or stapling excess pages together. The DER waived several types of minor irregularities in the SOQs received for Solicitation #9111C. Some contractors submitted transmittal letters consisting of multiple pages rather than the one page letter specified in the RFSOQ. The transmittal letter received no evaluation points. The DER stapled multiple page letters together and considered only information contained on the first page. Therefore, information submitted at variance with the one- page limit was not reviewed or evaluated. The DER did not waive the failure to attach a transmittal letter. DER waived some irregularities related to subcontractor letters. Multiple page letters were stapled together and only page one information was reviewed. The DER decision to waive such defects was based upon the fact that such subcontractors were less familiar with the DER's submission requirements than were the prime contractors, that such letters were submitted by the subcontractors, that it was unfair to penalize the prime contractors for the minor irregularities of the subcontractor letters, and that the tasks to be performed by subcontractors were generally not critical to the successful completion of the prime contractor's assigned responsibilities. There was sufficient information to permit the DER to conclude that the subcontractor and prime contractor were committed to the project. There is no evidence that the identities of the subcontractors was considered in determining whether such defects should be waived. The DER waived other irregularities related to subcontractor letters, including the failure of a subcontractor to sign the letter. There was no specific requirement that the subcontractor sign the letter. However, the DER did not waive the failure to submit subcontractor letters. In instances where no letters were submitted, the DER awarded zero points and references to the subcontractor in the SOQ were deleted. The DER's actions related to subcontractor letters was reasonable and appropriate. Another irregularity waived by the DER was the failure to supply a minimum of ten separate and verifiable former clients other than the DER, with work performed for the DER set forth separately. The DER did not waive the failure to submit ten references, however, in some cases, not all ten references were acceptable. Attachment C does not state that the failure to submit ten acceptable references shall result in an award of zero points. In such instances, the DER reduced the number of points available to reflect the percentage of acceptable references provided. Therefore, information submitted at variance with the requirements, such as unacceptable references, was not evaluated. The DER acted reasonably and consistently with the provisions set forth in the RFSOQ. The DER requested that responders identify three "deliverables" required through an ongoing contract which had been effective within the past year. The DER did not consider deliverables related to contracts which had not been effective within the past year. The DER checked the references and awarded no points for unacceptable references. Several SOQ's did not appropriately identify key personnel as required. The DER did not consider information which was not reported as required by the RFSOQ. Where minor irregularities were waived, the waiver was applied consistently to all responders. The DER did not waive the failure of any responder to submit the three pages of Attachment F, as clearly required by the directions to the attachment. All parties which failed to submit all three pages of the attachment received a score of zero. There is no evidence that the DER, at any time, indicated that the directions set forth on Attachment F were optional. Approximately 20 of 45 of contractors submitting SOQs failed to include all three pages of the MBE utilization form, Attachment F to the Request for SOQs. Most failed to include page three of the attachment. The Petitioner, as well as Intervenors ERM-South, ITC and Westinghouse, were included in the 20 responders which failed to submit all three pages of Attachment F. As provided in the directions to Attachment F, failure to include all three pages of the attachment resulted in a score of zero points for MBE utilization. The DER could have made certain assumptions about the applicability of Attachment F to specific responders to the solicitation. However, given that the directions were clear and the penalty for not complying with the directions was equally clear, the DER did not waive the failure to submit all three pages of the attachment as part of the SOQs. The evidence is insufficient to establish that the DER's action was outside the agency's discretion or the requirements of law. Extensive testimony was offered in support of the assertion that the directions related to reporting of minority business utilization were confusing and ambiguous. However, the directions to Attachment F are clear and provide that, "[a]t a minimum, the entire three page Attachment F shall be submitted in the response package. Failure to submit this Attachment in the response package shall result in the responder receiving a score of zero (0) for minority business utilization." There is no credible evidence to establish that such directions are confusing or ambiguous. The instructions to the RFSOQ consistently refer to Attachment F as being the only acceptable means of reporting minority business utilization information. Attachment F consists of three pages, with the "Directions" for completing and submitting the attachment set forth at page one, paragraph one. The Petitioner and Intervenors timely filed SOQ's and are substantially affected by the DER's determination that responders failing to submit all three pages of Attachment F were awarded zero points for minority business utilization. There is no evidence that the Petitioner or Intervenors are unable to perform the tasks identified in the RFSOQ.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Department of Environmental Regulation enter a Final Order dismissing the petition of Metcalf & Eddy, Inc., (Case No. 91-4318B1D), as well as Cases No. 91- 43I6BID and 91-4317B1D, as set forth in the preliminary statement to this Recommended Order. DONE and RECOMMENDED this 26th day of September, 1991, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM 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 26th day of September, 1991. APPENDIX CASE NO. 90-4316B1D, 90-4317B1D, and 90-4318B1D The following constitute rulings on proposed findings of facts submitted by the parties. Petitioner Metcalf & Eddy, Inc. The proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 4. Rejected as to the implication that DER had no right to waive minor irregularities, contrary to the evidence. 12, 16, 19. Rejected, unnecessary. 20. Rejected. Such additional points appear to have been awarded to M&E in violation of Section 120.53(5)(c), Florida Statutes. 24-25. Rejected. Although the specific waivers are factually correct, the implication of the proposed finding is contrary to the weight of the evidence which establishes that the DER waives such irregularities, even though the instructions were clear, where the consequences for failing to comply with each specific instruction were unclear. There was no penalty set forth at the requirement that a document be signed or not exceed one page in length. The evidence establishes that the DER's actions were reasonable, logical, and within the authority of the agency. 29-32. Rejected. Contrary to the clear "Directions" of Attachment F, which state that "[a]t a minimum, the entire three page Attachment F shall be submitted in the response package. Failure to submit this Attachment in the response package shall result in the responder receiving a score of zero (0) for minority business utilization." Responders were referred to Attachment F by the instructions cited in the proposed finding. 33-34, 36-38, Rejected, irrelevant. 39. Rejected, immaterial. The fact the DER could have examined the information submitted by M&E and ascertained the information which would have been set forth in the complete attachment is irrelevant. The agency is under no obligation to review the information submitted for the purpose of determining a responders' minority business status. Such information is to be provided in the three pages of the completed attachment. 40-41 Rejected. A logical reading of the checklist reference to Attachment F would be that, if the attachment were applicable, the attachment should be included. The clear and specific directions to Attachment F require the submission of the three page package to receive points. 42-43. Rejected, irrelevant. 44. Rejected. The failure to submit all three pages of Attachment F resulted in zero points, as provided in the directions to the attachment. The DER policy related to waiver of irregularities does not include the waiver of irregularities where the instructions are clear, the penalty for noncompliance is specific, and a responder fails to comply. The policy is reasonable and was applied consistently. 47. Rejected, contrary to the evidence. It appears that M&E's assertion that it would be included in the "short list" requires addition of points awarded by the DER in violation of Section 120.53(5)(c), Florida Statutes. 49-50. Rejected. While "instructions in a competitive bidding solicitation can be rendered ambiguous by their location," in this case, the instructions contained in the RFSOQ referred readers to Attachment F for the reporting of minority business utilization information. Attachment F's directions are not ambiguous or confusing. 51-53. Rejected, immaterial. This proposed finding is also contrary to the suggestion that the instructions were unclear, and indicates, not that the instructions were unclear, but that the M&E representative did not read the RFSOQ. It is not possible to find that a careful and intelligent reader of the directions to Attachment F could misunderstand the meaning of "[a]t a minimum, the entire three page Attachment F shall be submitted in the response package. Failure to submit this Attachment in the response package shall result in the responder receiving a score of zero (0) for minority business utilization." 54-61. Rejected, immaterial. The fact that a substantial number of responders failed to comply with the clear directions of Attachment F does not establish that the directions are confusing. The instructions to the RFSOQ referred readers to Attachment F for the reporting of minority business utilization information. The first paragraph of Attachment F is entitled and contains "Directions" which are clearly set forth. There is nothing at all ambiguous about the requirement that "[a]t a minimum, the entire three page Attachment F shall be submitted in the response package. Failure to submit this Attachment in the response package shall result in the responder receiving a score of zero (0) for minority business utilization." 62-65. Rejected, irrelevant. There is no requirement that the DER waive all irregularities. Such irregularities may be waived at the Department's discretion. The DER chose not to waive irregularities where the requirements, and the penalties for failure to comply with said requirements, were clear. The DER applied this policy appropriately and consistently. There was no appearance of favoritism when the agency's policy is fairly and consistently applied. Rejected, irrelevant. The DER expects potential responders to have read the RFSOQ prior to the pre-bid meeting. The purpose of the meeting is to answer questions and provide clarifying information. The fact that no questions were asked regarding the requirement to submit all three pages of Attachment F indicates that participants either clearly understood the requirement or had not read the RFSOQ prior to the only mandatory opportunity to obtain clarification. In any event, the DER is not obligated to read every sentence of the RFSOQ aloud at a pre-bid meeting in order to make certain that responders who fail to read the document will submit responsive SOQs. Rejected, cumulative. 68-69. Rejected, immaterial, unnecessary. Respondent Department of Environmental Regulation The proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 2. Rejected, unnecessary. 6. Rejected, unnecessary. 20. Rejected, unnecessary. 23. Rejected as to the implication that Attachment C, Page 1, indicated the DER could not waive any irregularities. Cited language states that information submitted in variance with instructions would not be reviewed or evaluated. The evidence establishes that information submitted in variance with the instructions was not reviewed or evaluated, but was disregarded. 28. Rejected. It is not clear what is meant by this proposed finding. 37-39. Rejected, irrelevant, unnecessary. The directions to Attachment F clearly state that all three pages must be submitted or zero points will be awarded. 41. Rejected, unnecessary. The directions to Attachment F clearly state that all three pages must be submitted or zero points will be awarded. Testimony as to the ambiguity of such directions is not credible. 42-43. Rejected, unnecessary. The directions to Attachment F clearly state that all three pages must be submitted or zero points will be awarded. Testimony as to the ambiguity of such directions is not credible, especially given M&E/PIECO's correct submission in response to similar requirements of RFSOQ #9003C. Rejected, unnecessary. The directions to Attachment F clearly state that all three pages must be submitted or zero points will be awarded. Testimony as to the ambiguity of such directions is not credible. The fact that the cited witness understood the directive and failed to comply due to oversight does not suggest that the directive was unclear. Rejected, unnecessary. The directions to Attachment F clearly state that all three pages must be submitted or zero points will be awarded. The reason for the cited witnesses failure to comply is unclear. Rejected, cumulative. 48. Rejected, unnecessary. 50-51. Rejected, immaterial. The issue in this case is not whether to goals of the minority business utilization program are met, but whether the DER acted inappropriately in reviewing SOQs submitted in response to the DER RFSOQ #9111C. 52-53. Rejected, unnecessary. 54-56. Rejected, unnecessary, cumulative. Intervenor ERM-South The proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 2. Rejected, cumulative. 14-19. Rejected, irrelevant, unnecessary. See preliminary statement. 21. Last sentence rejected, contrary to the greater weight of the evidence which establishes that the DER applied the language of the RFSOQ in a reasonable way, and that material information submitted in variance with the instructions was not reviewed or evaluated. 32-39, 41. Rejected, immaterial. The issue is whether the failure to follow the clear directions of Attachment F should result, as the directions provide, in zero points being awarded. The fact the DER could have examined the information submitted by ERM-South and ascertained the information which would have been set forth in the complete attachment is irrelevant. The agency is under no obligation to review the information submitted for the purpose of determining a responders' minority business status. Such information is to be provided in the three pages of the completed attachment. 40. Rejected, contrary to the evidence. There is no evidence that the omission of Attachment F, page three, is the sole basis for exclusion of a contractor from the short list. The short list was determined by ranking scores awarded. As stated in the directions to Attachment F, the result of noncompliance with said directions was an award of zero points for minority business utilization. 42-46. Rejected, cumulative, contrary to the greater weight of the evidence which establishes that the DER's action in reviewing the submitted Attachment F was reasonable, logical, and was applied in a consistent manner. As to whether the DER should have contacted other agencies to determine MBE status, the agency is under no obligation to do so. 47-49. Rejected, contrary to the clear directions of Attachment F, which state that "[a]t a minimum, the entire three page Attachment F shall be submitted in the response package. Failure to submit this Attachment in the response package shall result in the responder receiving a score of zero (0) for minority business utilization." It is simply not possible to find, as suggested in the proposed finding, that such language cannot be relied upon to put contractors on notice that the failure to submit the three pages would result in zero points. Rejected, contrary to the evidence and to the clear directions set forth at Attachment F. Rejected, irrelevant. 52-54. Rejected, contrary to the evidence and to the clear directions set forth at Attachment F. 55-57. Rejected, irrelevant. 59-64. Rejected, irrelevant, unnecessary. See preliminary statement. Intervenor ITC The proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: Proposed findings of fact #7, #10 and #14-16 relate to evidence introduced at hearing by ITC to support it's position that it had been excluded from the "short list" due to DER's clerical error. As stated in the preliminary statement, ITC failed to timely file a notice of protest subsequent to the posting of the bid tabulation results challenging the DER's clerical error. Accordingly, this Recommended Order does not set forth Findings of Fact related to the clerical error due to ITC's failure to timely file a written notice of protest as required by Section 120.53(5)(b), Florida Statutes. 12. Rejected. The M&E formal written protest does not allege that the DER had improperly drawn the line for the "short list." 18-20. Rejected. Although likely correct, the proposed findings are irrelevant to the issue in this case. Rejected. Such additional points awarded to M&E by the DER appear to have been awarded contrary to Section 120.53(5)(c), Florida Statutes. Rejected, cumulative. ITC had an opportunity to timely file a written notice of protest subsequent to the bid tabulation posting, but failed to do so. An intervenor takes the case as it is found. Rejected, cumulative. 25. Rejected, contrary to the evidence. The evidence does not establish that the failure to complete all of Attachment F was based on it's inapplicability. Attachment F clearly states that inapplicable pages should be so marked and submitted with the response package. If such pages were not returned, as suggested, because there did not apply, then it is reasonable to conclude that the responder failed to read the clearly stated directions to Attachment F. 26-29. Rejected, irrelevant. The DER did nothing more than apply the clearly stated direction that "[a]t a minimum, the entire three page Attachment F shall be submitted in the response package" and imposed the clearly stated penalty, stating that "[f]ailure to submit this Attachment in the response package shall result in the responder receiving a score of zero (0) for minority business utilization." 32-33. Rejected, contrary to the greater weight of evidence that the DER did not waive irregularities where the requirements, and the penalties for noncompliance with said requirements, were clearly stated. The DER did waive other irregularities where the instructions were ambiguous or confusing, or where there was not a specific penalty attached for the failure to follow a specific requirement. The evidence establishes that the DER actions were appropriate. 34. Rejected, immaterial. All three pages of Attachment F were clearly required to be submitted or a score of zero would be awarded. Intervenor E&E The proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 2-3. Rejected, cumulative. 12. Rejected, contrary to the cited evidence. Although Attachment F was discussed in terms of reporting requirements, there were no questions asked related to the directions for completing or submitting the attachment. 21. Rejected, cumulative. Intervenors EBASCO, ABB, OHM, Cherokee and Westinghouse jointly filed a proposed recommended order. The proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 13, 16-17, 43-45, 47. Rejected, unnecessary. COPIES FURNISHED: Carol Browner, Secretary Twin Towers Office Building 2600 Blairstone Road Tallahassee, Florida 32399-2400 Daniel H. Thompson, Esq. General Counsel Twin Towers Office Building 2600 Blairstone Road Tallahassee, Florida 32399-2400 Carolyn S. Raepple, Esq. Carlos Alvarez, Esq. 123 S. Calhoun Street Post Office Drawer 6526 Tallahassee, Florida 32314 E. Gary Early, Esq. Assistant General Counsel Twin Towers Office Building 2600 Blairstone Road Tallahassee, Florida 32399-2400 M. Christopher Bryant, Esq. 2700 Blairstone Road, Suite C Post Office Box 6507 Tallahassee, Florida 32301 George N. Meros, Esq. 101 North Monroe Street Tallahassee, Florida 32301 Barrett G. Johnson, Esq. 315 South Calhoun Street, Suite 750 Tallahassee, Florida 32301 Rex D. Ware, Esq. 106 East College Avenue Highpoint Center, Suite 900 Tallahassee, Florida 32301 W. Robert Venzina, III, Esq. Mary M. Piccard, Esq. 1004 DeSoto Park Drive Post Office Box 589 Tallahassee, Florida 32399-0589 Harry R. Detwiler, Jr., Esq. Post Office Drawer 810 Tallahassee, Florida 32302
The Issue Whether the Petitioner should be certified as a minority business enterprise (MBE) by the Minority Business Advocacy and Assistance Office of the Department of Labor and Employment Security (Department).
Findings Of Fact The Petitioner, All Kinds of Blinds, was incorporated in the State of Florida on January 15, 1999, as All Kinds of Blinds of So. Fla., Inc. The President of the Petitioner is Angela Conroy, a female. Mrs. Conroy owns 51 percent of the company. The remaining 49 percent of the company is owned by Phillip Conroy, Angela’s husband. Mr. Conroy also serves as the company’s vice president and secretary. On June 2, 1999, Mrs. Conroy executed a Florida Statewide and Inter-local Minority Business Enterprise Certification Application that was filed with the Department. The application identified Angela Conroy as the person who makes policy, financial decisions, signs payroll, signs surety bonds and insurance, and makes contractual decisions for the Petitioner. The application also identified Phillip Conroy as the person who makes personnel decisions and signs payroll for the Petitioner. Mr. Conroy is authorized to sign checks on behalf of the company. According to the application, the Petitioner performs various functions regarding the sales, consultation, service, and installation of all types of window coverings. Mrs. Conroy sought MBE certification as an American woman with majority ownership of the Petitioner. Mrs. Conroy has ten years of experience in this type of business but was reluctant to let her former employer know that she was opening her own business. Accordingly, Mrs. Conroy authorized Mr. Conroy to execute applications and various papers on behalf of the Petitioner. She relied on his business experience to guide her through the start-up process. An initial loan in the amount of $4,000 from the couple’s joint bank account was the start-up funds for the Petitioner. Mr. Conroy does the installations for the Petitioner. He performs other functions for the company as may be necessary. He also owns and operates an air conditioning filter company that leased a vehicle also used for the Petitioner’s business. Mr. Conroy maintained that his name appears on records pertaining to the Petitioner as a convenience for his wife. Mr. Conroy is a white male.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Labor and Employment Security, Minority Business Advocacy and Assistance Office, enter a final order denying the Petitioner’s application for MBE certification. DONE AND ENTERED this 28th day of April, 2000, in Tallahassee, Leon County, Florida. J. D. PARRISH 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 28th day of April, 2000. COPIES FURNISHED: Angela Conroy All Kinds of Blinds 123 North Congress Avenue Suite 328 Boynton Beach, Florida 33426 Joseph L. Shields, Senior Attorney Department of Labor and Employment Security 2012 Capital Circle, Southeast Suite 307, Hartman Building Tallahassee, Florida 32399-2189 Mary Hooks, Secretary Department of Labor and Employment Security 2012 Capital Circle, Southeast Suite 301, Hartman Building Tallahassee, Florida 32399-2189 Sherri Wilkes-Cape, General Counsel Department of Labor and Employment Security 2012 Capital Circle, Southeast Suite 307, Hartman Building Tallahassee, Florida 32399-2189
Findings Of Fact On May 29, 1985, The Columbus Company submitted a bid to construct a rest area along I-95 in accordance with the specifications for State Job No. 70225-3410. The bid documents required the bidders to have 10 percent subcontractors from DBEs or submit documentation with the bid to show good faith efforts to meet this 10 percent requirement were made if the 10 percent goal is not met. Respondent maintains a list of businesses qualifying as DBEs and periodically publishes a directory of those firms so qualifying. This latest directory published by DOT prior to the bid opening on the contract at issue here was April 15, 1985. Respondent's Bureau of Minority Affairs maintains a current register and will advise any bidder so requesting whether of not a firm qualifies as a DBE or WBE. The invitation to bid provides the contractor's bid submission shall include the following information: The names and addresses of certified DBE and WBE firms that will participate in the contract. Only DBEs and WBEs certified by the Department at the time the bid is submitted may be counted towards DBE and WBE goals. A description of the work each named DBE or WBE firm will perform. The dollar amount of participation by each named DBE and WBE firm. If the DBE or WBE goal is not met, sufficient information to demonstrate that the contractor made good faith efforts to meet the goals. Oscar Pope was Petitioner's estimator on this bid and prepared the bid which was submitted. Pope sent letters to various DBE firms soliciting their participation as subcontractors in the project and put ads in the newspaper. Prior to submitting the bid Pope realized that he did not have the required 10 percent DBE participation and he contacted another company to inquire where he could get additional minority participation from truckers and was referred to UPF Trucking. Pope contacted UPF Trucking and Billy Montgomery of UPF told Pope that UPF could qualify as a MBE. Pope did not check the directory or call DOT to verify UPF Trucking's status as a MBE. In his bid submitted, which included DBE/WBE utilization form No. 1, Pope listed UPF Trucking as being certified by Florida DOT as a MBE. Including the subcontract Petitioner entered into with UPF Trucking brought the MBE participation to the 10 percent goal required by the contract and no documentation was submitted to demonstrate Petitioner had made good faith efforts to reach the required DBE goals but could not do so. Upon the opening of the bids for this project, Petitioner was the low bidder. When the MBE participation listed in the bid was checked, UPF Trucking was found to be not qualified as a MBE firm. UPF Trucking was not listed in the April 15, 1985, directory of qualified minority businesses or on any approved list maintained by DOT. Had Pope called DOT before submitting Petitioner's bid, he could have learned UPF Trucking was not a qualified MBE. Petitioner's bid was forwarded to DOT's technical review committee and good faith efforts committee and both of these committees recommended the bid be found non-responsive because of the failure to meet the DBE goal. The bid was declared non-responsive and the contract was awarded to the next lowest bidder.
