The Issue The primary issue for determination is whether Petitioner should be granted certification as a Minority Business Enterprise (MBE). Determination of this issue requires resolution of other issues: Namely, whether Respondent's business qualifies as a Minority Business Enterprise (MBE) as defined by provisions of Section 288.703(2), Florida Statutes; and whether Respondent is a minority person as defined by provisions of Section 288.703 (3)(b), Florida Statutes.
Findings Of Fact Alfredo Ramos is the sole owner of the janitorial business known as "A Cleaning Crew." Ramos was born in Rio Hondo, Texas, on August 9, 1938, to Martin and Ada Salazor Ramos. Ramos' birth certificate, issued at that time denoting his race as white, was amended on May 21, 1992, to reflect that his color or race was Hispanic. Ramos' father was born in Texas. Ramos' mother was born in Oklahoma. There is no independent or verifiable knowledge of where any of Ramos' grandparents were born. All are now deceased. By letter dated June 5, 1992, Respondent denied Ramos' application seeking to have "A Cleaning Crew" certified as a MBE. The basis for denial recited in the letter was that the business did not meet the requirements of Section 288.703(2), Florida Statutes, in that Ramos, as sole proprietor, was unable to establish his status as a minority person within the definitional requirements of applicable Florida Statutes and administrative rules.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered denying Petitioner's application for certification as a Minority Business Enterprise. DONE AND ENTERED this 14th day of October, 1992, in Tallahassee, Leon County, Florida. DON W.DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Fl 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of October, 1992. APPENDIX The following constitutes my specific rulings, in accordance with Section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's Proposed Findings. No findings were submitted. Respondent's Proposed Findings. 1.-5. Accepted. COPIES FURNISHED: Alfredo Ramos d/b/a A Cleaning Crew P.O. Box 10293 Jacksonville, Florida 32207 Augustus D. Aikens, Esquire Deputy General Counsel Department of Management Services Suite 309, Knight Building Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 Larry Strong, Acting Secretary Department of Management Services Suite 307, Knight Building Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 Susan Kirkland, Esquire General Counsel Department of Management Services Suite 110, Knight Building Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950
The Issue Are Rules 60A-2.001(10) and 60A-2.005(7), Florida Administrative Code, valid exercises of delegated legislative authority?
Findings Of Fact On December 22, 1991, the Respondents made amendments to Rules 60A- 2.001 and 60A-2.005, Florida Administrative Code, related to the certification of a "minority business enterprise" to engage in business with the State of Florida. With the amendments, a definition for the term "regular dealer" was created, which states in pertinent part: 60A-2.001 Definitions. . . . (10) 'Regular dealer' means a firm that owns, operates or maintains a store, warehouse, or other establishment in which the material or supplies required for the performance of the contract are bought, kept in stock, and regularly sold to the public in the usual course of business. To be a regular dealer, the firm must engage in, as its principal business and in its own name, the purchase and sale of products. . . . The amendments included other requirements that a "minority business enterprise", as defined at Section 288.703(2), Florida Statutes, must meet to be certified to participate in the Respondents' Minority Business Program. (The definition of "minority business enterprise" was changed by Section 288.703(2), Florida Statutes (1994 Supp.). The change does not effect the outcome in the case.) As promulgated December 22, 1991, Rule 60A-2.005(7), Florida Administrative Code states in pertinent part: The applicant business shall establish that it is currently performing a useful business function in each specialty area requested by the applicant. For purposes of this rule, "currently" means as of the date of the office's receipt of the application for certification. The applicant business is considered to be per- forming a useful business function when it is responsible for the execution of a distinct element of the work of a contract and carrying out its responsibilities in actually performing, managing, and supervising the work involved. The useful business function of an applicant business shall be determined in reference to the products or services for which the applicant business requested certification on Form PUR 7500. When the applicant business is required by law to hold a license, other than an occupational license in order to undertake its business activity, the applicant business shall not be considered to be performing a useful business function unless it has the required license(s). In determining if an applicant business is acting as a regular dealer and that it is not acting as a conduit to transfer funds to a non- minority business, the Office shall consider the applicant's business role as agent or negotiator between buyer and seller or contractor. Though an applicant business may sell products through a variety of means, the Office shall consider the customary and usual method by which the majority of sales are made in its analysis of the applicability of the regular dealer require- ments. Sales shall be made regularly from stock on a recurring basis constituting the usual operations of the applicant business. The proportions of sales from stock and the amount of stock to be maintained by the applicant business in order to satisfy these rule requirements will depend on the business' gross receipts, the types of commodities sold, and the nature of the business's operations. The stock maintained shall be a true inventory from which sales are made, rather than by a stock of sample, display, or surplus goods remaining from prior orders or by a stock main- tained primarily for the purpose of token compliance with this rule. Consideration shall be given to the applicant's provision of dispensable services or pass-through operations which do not add economic value, except where characterized as common industry practice or customary marketing procedures for a given product. An applicant business acting as broker or packager shall not be regarded as a regular dealer absent a showing that brokering or packaging is the normal practice in the applicant business industry. Manufacturer's representatives, sales representatives and non-stocking distributors shall not be considered regular dealers for purposes of these rules. In passing the rules amendments, the Respondents relied upon authority set forth in Sections 287.0943(5) and 287.0945(3), Florida Statutes. Those statutory sections are now found at Sections 287.0943(7) and 287.0945(6), Florida Statutes (1994 Supp.). Those provisions create the general and specific authority for the Minority Business Advocacy and Assistance Office to effectuate the purposes set forth in Section 287.0943, Florida Statutes, by engaging in rule promulgation. As it relates to this case, the law implemented by the challenged rules is set forth at Section 287.0943(1)(e)3, Florida Statutes (1994 Supp.), which establishes criteria for certification of minority business enterprises who wish to participate in the Minority Business Program contemplated by Chapter 287, Florida Statutes. That provision on certification was formerly Section 287.0943(1), Florida Statutes. In assessing a minority business enterprise application for certification, the Respondents, through that statutory provision: [R]equire that prospective certified minority business enterprises be currently performing a useful business function. A 'useful business function' is defined as a business function which results in the provision of materials, supplies, equipment, or services to customers other than state or local government. Acting as a conduit to transfer funds to a non-minority business does not constitute a useful business function unless it is done so in a normal industry practice. Petitioners, Expertech and Mechanical, had been certified to participate in the Respondents' Minority Business Program, but were denied re- certification through the application of Rules 60A-2.001(10) and 60A-2.005(7), Florida Administrative Code. Marsha Nims is the Director of Certification for the Commission on Minority Economic and Business Development, Minority Business Advocacy and Assistance Office. In her position, she develops policy on minority business enterprise certification. As such, she was principally responsible for developing the subject rules. In particular, as Ms. Nims describes, the purpose in developing the rules was to address the meaning of a "conduit" set forth at Section 287.0943(1), Florida Statutes, in an attempt to insure that improper advantage was not taken by persons using certified minority businesses to enter into contractual opportunities with the State of Florida. In promulgating the rule, the Respondents spoke to representatives who were involved with unrelated minority business enterprise certification programs. One person from whom the Respondents had obtained ideas was Hershel Jackson, who processed certifications for the Small Business Administration in its Jacksonville, Florida office. This individual indicated that the Small Business Administration had developed a "regular dealer rule" that required individuals who sought minority certification from the Small Business Administration to make sales from existing inventory. This conversation led to the utilization of federal law as a guide to establishing the rules in question. At 41 CFR 50-201.101(a)(2), the term "regular dealer" is defined as: A regular dealer is a person who owns, operates, or maintains a store, warehouse, or other estab- lishment in which the materials, supplies, articles, or equipment of the general character described by the specifications and required under the contract are bought, kept in stock, and sold to the public in the usual course of business. It can be seen that the definition of "regular dealer" set forth in Rule 60A-2.001(10), Florida Administrative Code, is very similar to the federal definition. In addition, the Respondents used the Walsh Healey Public Contracts Act Interpretations at 41 CFR 50-206 for guidance. The provision within the Walsh Healey Public Contracts Act that was utilized was 41 CFR 50-206.53(a). It states: Regular Dealer. A bidder may qualify as a regular dealer under 40 CFR, 50-201.101(b), if it owns, operates, or maintains a store, warehouse, or other estab- lishment in which the commodities or goods of the general character described by the specifi- cations and required under the contract are bought, kept in stock, and sold to the public in the usual course of business. . . . The Petitioners presented witnesses who established the manner in which their respective industries carried out normal industry practices involving fund transfers to non-minority businesses from minority and non- minority businesses. Joseph H. Anderson is the President of Suntec Paint, Inc. (Suntec), which does business in Florida. Suntec is a non-minority corporation. It manufactures architectural coatings (house paints). Suntec sells and distributes its paint products through its own stores, through other dealers who have stores, and through sales agents. The sales agents would also be considered as manufacturers' representatives. Suntec's relationship with its manufacturer's representatives is one in which Suntec has an agreement with the representatives to sell the paint products to the representatives at negotiated prices which may be discounted based upon volume of sales. The representatives then sell the products to end users at a price that may be higher than the price between Suntec and the representatives. The representatives are responsible for marketing the product to customers. The products manufactured by Suntec are inventoried for distribution, or in some instances, made to order for distribution. The maintenance of inventory is principally for the benefit of the retail outlets controlled by Suntec. Suntec prefers not to maintain inventory because it ties up raw materials, warehousing space, and requires personnel to be engaged in the management and shipment of those products. If the product is "picked up" more than once in the process, it costs more money. Therefore, Suntec distributes inventory through the representatives by direct shipping from the manufacturer to the end user. Suntec's arrangement with its representatives is one in which the customer pays the representative for the product and the representative then pays Suntec. The representatives for Suntec do not ordinarily maintain inventory of the paint products, because this avoids having the representatives handle the product and then reship the product to the end user. By the representative handling the product, it would add expense to the transaction. Suntec, in selling its products through representatives and shipping directly from the manufacturer to the end user, is pursuing a practice which is normal in its industry. Suntec's arrangement with dealers unaffiliated with Suntec who have stores, provides the independent dealers with inventory. Nonetheless, there are occasions in which the independent dealer will place a large order with Suntec; and Suntec will ship the product directly to the end user. That practice is a frequent practice and one that is standard in the industry. Suntec has two minority businesses who serve as manufacturers' representatives and other manufacturers' representatives who are non-minorities. The minority representatives are Expertech, located in Gainesville, Florida, and All In One Paint and Supply, Inc. (All In One), also located in Gainesville. The two minority representatives for Suntec maintain some stock of paint. The inventory amount which All In One maintains was not identified. Within a few months before the hearing, Expertech had purchased 60 gallons of paint from Suntec. It was not clear what the intended disposition was for the paint. Thomas Rollie Steele, the Branch Manager for Bearings and Drives, serves as Sales Manager for that company in its Florida operations. Bearings and Drives has its corporate offices in Macon, Georgia. The company has thirty locations throughout the southern United States, with five different divisions. It specializes in industrial maintenance products and some services. Bearings and Drives is a non-minority firm. In its business Bearings and Drives has manufacturing arrangements or agreements to represent other manufacturers. As representative for other companies who manufacture the products which Bearings and Drives markets, Bearings and Drives is expected to solicit sales. The agreements with the manufacturers which Bearings and Drives has, establish price structures, terms and conditions, and shipping arrangements. Bearings and Drives serves as representatives for the manufacturers in a distinct service area. Bearings and Drives buys products from the manufacturers and resells the products to Bearings and Drives' customers. Bearings and Drives derives compensation by selling to customers at a price higher than the product was sold to them. The price at which products are resold by Bearings and Drives is controlled by market conditions. Bearings and Drives maintains some product inventory; however, in excess of 50 percent of the products sold are shipped directly from the manufacturer to the customer. The direct shipment improves the profit margin for Bearings and Drives by not maintaining an inventory and saving on additional freight expenses, taxes paid on existing inventory and labor costs to be paid warehouse personnel. Bearings and Drives uses a direct delivery system to its customers that is scheduled around the time at which the customer would need the product sold by Bearings and Drives. This arrangement is a standard industry practice. Aileen Schumacher is the founder, President, and sole owner of Expertech. This Petitioner had been certified through the Minority Business Program prior to the rule amendments in December, 1991. When the Petitioner, Expertech sought to be re-certified, it was denied certification in some business areas for failure to maintain sufficient levels of inventory. Expertech sells and distributes technical supplies, such as pollution- control equipment, laboratory equipment, hand tools, and other technical supplies. It specializes in the sale and distribution of safety equipment. Expertech does not provide services. The areas in which Expertech has been denied re-certification relate to the sale of laboratory supplies, paint, and pollution-control equipment. In marketing products Expertech buys directly from manufacturers, except in the instance where they cannot access the manufacturer directly and must operate through a distributor. Expertech tries to maintain as little inventory as possible and to have the commodities it sells shipped directly from the manufacturer to the end user. In addition to ordinary sales, Expertech takes custom orders for products not maintained in inventory by the manufacturer, which are directly shipped from the manufacturer to the customer. In Expertech's business dealings as a manufacturer's representative, wherein it arranges for direct shipments, it is performing in a manner which is standard in the industries in which it is engaged. Otto Lawrenz is the sole proprietor of Mechanical. Prior to the rules changes in December, 1991, Mechanical had been certified as a minority business enterprise. The attempt to re-certify was denied based upon the fact that Mechanical did not stock products and was serving as a manufacturer's representative in selling heating and ventilation equipment. Mechanical sells to mechanical contractors and sheet-metal contractors as a representative for the manufacturer. Mechanical bids on construction jobs and "takes off" the amount of equipment needed in setting its price quotes. If the submission of the price quotation is successful, Mechanical receives a purchasing order from the contractor, as approved by the project engineer. The equipment is then ordered by Mechanical, and delivered by the manufacturer to the job site or the contractor's home office. Mechanical does not maintain a warehouse or a store. The end user pays Mechanical within 30-60 days from the time that the equipment is delivered to the end user. Mechanical then pays the original manufacturer an agreed upon price. Generally, Mechanical sells special-order equipment. This type of equipment would be difficult to inventory since it is being custom-ordered and the units that are ordered are large in size. In addition, the variety of parts involved in these projects makes it difficult to stock them.
Findings Of Fact Terrell Oil Company (TOC) was incorporated in 1986 with Grady Terrell, Jr., as president; Richard W. Gilliam and J. Anthony Belcher as board director members. As of the time of this application, Grady Terrell owned 60 percent of the stock of the company, Belcher owned 20 percent, Gilliam owned 19 percent, and Anna Alverez, company secretary, owned 1 percent. The company was started with a $6000 loan made by Grady Terrell, Jr., which sum was borrowed from C & S National Bank (Exhibit 16). Grady Terrell, Jr., is a black male and, therefore, designated as a member of a minority and/or disadvantaged class by statute. Neither Belcher nor Gilliam invested capital in TOC, but received their stock in the company for services in kind. The By-Laws of TOC provide that all times at least 51 percent of the stock in TOC shall be owned by "minority individuals" as that term is defined in state and federal statutes applicable to minority business enterprises or disadvantaged business enterprises. Several lines of credit obtained by TOC from C & S Bank were guaranteed by Grady Terrell, Jr. (Exhibits 9-12). No loans to TOC were guaranteed by anyone else. Anthony Belcher resigned from the Board of Directors of Belcher Oil Company in 1982 and thereafter served as a consultant for approximately two years. He has not been affiliated with Belcher Oil Company since that time (Exhibit 15). Grady Terrell, Jr., executed the lease for the property occupied by TOC for an office (Exhibit 6). Grady Terrell, Jr., approves all major purchases, all invoices for payment, and other bills for payment except routine monthly bills for utilities, vehicle payments, etc., at TOC. In connection with the line of credit with C & S Bank, TOC assigns most of its receivables to the bank for collection. TOC is involved with bidding on and supplying various agencies of government (federal, state and local) with petroleum supplies. To make these deliveries, TOC owns two small tank vehicles of 1500 and 2500 gallon capacities, respectively. (The record is unclear whether the 2500 gallon tank vehicle replaced the 1500 gallon truck.) When necessary to deliver larger quantities than can be hauled in TOC's trucks, a commercial carrier is utilized. In all cases, however, TOC takes ownership of the oil at the loading site. TOC entered into a lockbox agreement with Belcher Oil Company in which Belcher extended TOC a line of credit to purchase petroleum products from Belcher. An arrangement was made with the bank to establish a special account into which the customer would remit payment for product delivered and the bank would credit Belcher's account for the invoice price. This lockbox arrangement with Belcher has been inactive for several years. At one time, TOC purchased nearly all of its products from Belcher, but that is no longer true. Richard W. Gilliam is the executive vice-president of Terrell. He receives no salary from TOC, but is reimbursed for out-of-pocket expenses. He has the authority to accept bids for the purchase of fuel from dealers and to execute contracts with purchasers. Gilliam has operated other businesses in the past and has considerably more experience in business matters than does Grady Terrell, Jr. However, no evidence was presented upon which a finding can be made that Gilliam is the person actually running TOC, and Grady Terrell, Jr., is but a figurehead. It is a fact that Grady Terrell, Jr., is legally in charge of, and has the authority to, fully direct the operations of TOC. In addition to the tank truck(s), TOC has leased a service station where three 3000 gallon tanks are located in which TOC can store inventory if desired. Grady Terrell, Jr., also executed this lease. TOC has been certified as a DBE by several governmental agencies, including the Defense Logistics Agency who contracts with TOC to deliver petroleum products to ships in Miami; and certification has been denied by more than two agencies to which applications were made. No evidence was presented that TOC failed to submit all information requested by DOT.
Recommendation It is recommended that Terrell Oil Company, Inc., be certified as a Disadvantaged Business Enterprise. DONE and ENTERED this 17th day of May, 1990, in Tallahassee, Florida. K. N. AYERS Hearing Officer Division of Administrative Hearings The Desoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of May, 1990. COPIES FURNISHED: John L. Chamblee, Jr., Esquire 202 Cardy Street Tampa, FL 33601 Vernon L. Whittier, Jr., Esquire Department of Transportation 605 Suwannee Street Tallahassee, FL 32399-0458 Ben G. Watts Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0458 Attn: Eleanor F. Turner, MS 58 Robert Scanlan Interim General Counsel Department of Transportation 562 Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0458
The Issue The issue in this case is whether the Petitioner, Transport Analysis Professionals, Inc. (hereinafter sometimes referred to as "TAP"), is eligible for certification as a Minority Business Enterprise. TAP contends that its application for such certification should be granted, asserting that it is in compliance with all lawful requirements for such certification. The Department of Transportation contends that the application should be denied on the grounds that the women owners of TAP do not exercise actual control of the affairs of the company.
Findings Of Fact Based on the relevant testimony of the witnesses and on the relevant exhibits admitted into evidence, I make the following findings of fact. 1/ Introduction Transport Analysis Professionals, Inc., is a Florida corporation which was incorporated on September 1, 1983. The moving forces behind TAP are three married couples; Mary J. and Kenneth J. Bynum, Gloria J. and Douglas R. Campion, and Carol L. and David C. Rhinard. All of the 990 authorized shares of stock of TAP have been issued to these three couples and each couple is the holder of 330 shares of TAP stock. The Board of Directors of TAP is composed of six directors who are now, and always have been, the six individuals who make up the three married couples described above. Each of these six individuals is a "founding principal" of TAP. Although TAP will embark upon just about any type of business project its principals feel it has the qualifications to perform, the primary nature of its business, as described in its application form is: "engineering consulting services, including traffic and transportation planning and design, environmental analysis, roadway and mass transit operational analysis and contract administration services." (T.25-27; JNT.EX. 1) Because TAP is a new company, up to this point the majority of its activity has been the preparation of proposals and various marketing activities. In other words, TAP's principal activity has been trying to find work rather than actually doing the type of work for which the company was created. (T.84) The "credentials" of the male principals of TAP Douglas R. Campion has a Master of Science degree in Transportation Planning and Engineering and a Bachelor of Science degree in Civil Engineering, both from the Polytechnic Institute of Brooklyn. He also has certificates from the Highway and Transportation Management Institute, University of Mississippi, and the American Association of State Highway and Transportation Officials. (JNT.Ex. 1, resume) Douglas R. Campion has over sixteen years of progressively responsible and successful executive management, administration, engineering and planning experience in the public sector and private industry. He was formerly the appointed Regional Administrator (six and one-half years) for the Federal Urban Mass Transportation Administration (UMTA). He managed the design, contracting, and engineering services for construction on a new $960 million urban rapid rail system. He has extensive background in mass transit, transportation systems planning, traffic engineering, economic/financial analysis, and procurement management. (JNT.EX. 1, resume) Kenneth J. Bynum has a Bachelor of Science degree in Civil Engineering from the University of Arkansas and has done post graduate work towards a Master of Science degree in Civil Engineering at West Virginia University. He is currently enrolled in a Master of Business Administration program at Florida International University. He has completed continuing education courses on traffic operations and design at the University of Florida and Georgia Institute of Technology and on area and indoor lighting by the Lighting Systems Institute of the General Electric Company. He is registered as a professional engineer in the States of Florida and Michigan. (JNT.EX. 1, resume) Kenneth J. Bynum has over sixteen years of professional experience in progressively more responsible charge of planning, design, implementation, and maintenance of public and private transportation systems, with particular emphasis in roadways, mass transit, traffic operations, and traffic control devices. He has been practicing his profession since 1972 in Florida, working in the public sector and with private consultants. (JNT.EX. 1, resume) David C. Rhinard has a Master of Science degree in Transportation from Purdue University and a Bachelor of Science degree in Civil Engineering from Pennsylvania State University. Since graduation he has participated in numerous technical, management, and professional development seminars and non-credit courses nationwide and abroad, including Certificates in: Highway Engineering and Administration, Advanced Technical Topics in Urban Transportation, Effective Speaking and Human Relations, U.S. Department of Transportation Highway Engineering, Highway Finance, and Professional Program in Urban Transportation (by Carnegie-Mellon University with on-site investigation of urban transportation systems in selected American, Canadian, and European cities). He is registered as a professional engineer in the State of Florida and Michigan. (JNT.EX. 1, resume) David C. Rhinard has been continuously involved in transportation engineering for over fifteen years and has been in responsible charge of numerous public and private sector transportation projects and programs in South Florida for the last thirteen years. His experience ranges from traffic and transit system planning to financing, preliminary engineering, construction, traffic operations and parking. (JNT.Ex. 1, resume) The "credentials" of the female principals of TAP Gloria J. Campion has a Master of Science degree in Mathematics from Montclair State College and a Bachelor's degree in Mathematics and Business from the same college. She has obtained certificates in Computer Literacy from the Florida International University and in Adult Education Teaching Strategies from the University of Georgia. She has participated in special studies in mathematics and statistics at Chicago Circle Campus, University of Illinois. (JNT.EX. 1, resume) Gloria J. Campion has over thirteen years of experience as a teacher of mathematics and computers and as an educational consultant in the field of mathematics. (JNT.Ex. 1, resume) Carol L. Rhinard has a Bachelor of Science degree in Education from Bloomsburg University of Pennsylvania. She has taken courses in mathematics, statistics, and sampling theory at the University of Miami. (JNT.EX. 1, resume) 2/ Carol L. Rhinard has taught high school off and on over the past seventeen years. (JNT.Ex. 1, resume; T. 33) Mary J. Bynum has attended Miami Dade Junior College, but has not earned any academic degrees. (JNT.Ex. 1, resume) Mary J. Bynum has eighteen years experience as an airline stewardess and as an airline stewardess supervisor, or lead flight attendant. (JNT.EX. 1; T. 22) The "blood, sweat, and tears" contributed to TAP by the male principals All three of the male principals of TAP gave up professional positions in the fields of traffic and engineering consulting in order to devote their full-time efforts towards trying to start a new company of their own. All three of the male principals of TAP work full-time for TAP. None of them receive a salary from TAP. Two of them (Messrs. Rhinard and Bynum) have no other regular employment. In order to have at least some income, Mr. Campion also works nights as a hotel manager. (JNT.EX. 1, T. 13, 17, 42) The "blood, sweat, and tears" contributed to TAP by the female principals All three of the female principals of TAP have other full-time or substantially full-time employment. Of the three, Gloria R. Campion does substantially more for TAP than either of the other two. Gloria Campion devotes about thirty hours per week to work for TAP. She spends about an equal amount of time as a teacher at a private school. (T. 69, 102-104) Carol Rhinard started out working full-time for TAP, but that did not last very long. She now teaches school full-time and devotes, at most, about eight hours per week to work for TAP. Of those eight hours per week, often only two of them are hours actually spent at the TAP office. (T. 40-41) 3/ Mary Bynum is employed full-time as an airline stewardess or lead flight attendant. Her work for TAP is probably about the same as or less than that of Carol Rhinard. 4/ Capital contributions to TAP--Who paid how much for what There is no credible, competent, substantial evidence in this record upon which to make a finding as to how TAP was capitalized. The various shortcomings in the evidence on this subject are discussed at length in the comments at the conclusion of these findings of fact. 5/ How things really get decided and done at TAP The individuals who possess the power to direct or cause the direction of the management and policies of TAP in the areas of policy making, financial decisions, and dismissal of management personnel are the six individual principals/owners acting in their capacities as members of the TAP Board of Directors. As a newly formed small business enterprise, wherein each member of the Board of Directors is a principal in the firm, most of the decisions on matters of policy making, financial decisions, and dismissal of management personnel are matters of Board discussion and involvement. Policy making originates with the President and is finalized at a Board meeting or through Board Member consent. Financial decisions, with the exception of small purchases and regular business expenses, rest with the Board of Directors. The Board of Directors, acting as a body, addresses all issues of management of the business and manager accountability. It is expected that in the future the roles of the President, Treasurer, and other officers will be vested with the authority customary to those offices. (JNT.EX. 1, Supplement to Schedule A) The individuals who make the day-to-day decisions on matters of management, policy, and operations of TAP are the same as those who possess the power to handle the matters described immediately above. The day-to-day decisions on matters of management, policy, and operations are made by the President and Board of Directors in the manner described immediately above. Depending on the type of project involved, one or more of the principals of the firm is asked by the President to lead the developmental efforts and to prepare a recommended course of action for review by the President and final decision by the Board of Directors. (JNT.EX. 1, Supplement to Schedule A) The language of the bylaws regarding the powers of the company president notwithstanding, in reality the President does not exercise any managerial authority on any matter of importance. The minutes of the TAP Board of Directors meetings reflect that even the most routine management decisions are submitted to the Board of Directors for final decisions. (See especially the minutes of the meeting of January 22, 1984, under the captions "OFFICE SPACE," "OFFICE RELATED MATTERS," and "WBE STATUS." This is consistent with the provisions of Article III, Section 2, of the TAP bylaws, which provides: The President shall be the chief executive officer of the corporation, shall have general and active management of the business and affairs of the corporation subject to the directions of the Board of Directors, and shall preside at all meetings of the shareholders and Board of Directors. (Emphasis added) Article VIII, of the Articles of Incorporation of TAP provides: 8. The officers of this corporation shall be a Chairman, Vice Chairman, Secretary, Treasurer, President and such other officers, agents, and factors as may be deemed necessary. All officers, agents, and factors shall be chosen in such manner, hold their offices for such terms, and have such powers and duties as may be prescribed by the by-laws or determined by the Board of Directors. Article III, Section 3, of the TAP bylaws provides that the Board of Directors can remove any officer and fill any vacancy in office. Article II, Section 1, of the TAP bylaws provides: All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, the Board of Directors. Article II, Section 8, of the TAP bylaws provides: At a meeting of shareholders called expressly for that purpose, any director or the entire Board of Directors may be removed, with or without cause, by a vote of the holders of 67 percent of the shares then entitled to vote at an election of directors. Article II, Section 9, of the TAP bylaws provides that five directors constitutes a quorum. That section also provides: "The act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors." Article II, Section 10, of the TAP bylaws also provides for certain other actions to be taken by a "majority" of the full Board of Directors. At the Board of Directors meeting of November 11, 1983, all of the principals/owners of TAP, acting in their capacities as Directors, took the following action: By unanimous vote the Board ratified action taken by the President in the proper use of her powers and authority in those business decisions of the Corporation pertaining to representation of the Corporation on engineering consulting services: In fulfillment of her day-to-day decision making duties, the President directed that the Corporation be represented by those Principals of the firm who are engineers on matters which pertain to engineering services of the firm. Further discussion ensued on the matter. By unanimous vote the Board directed that as a policy of the firm, the President should continue to direct engineers who are principals of the firm to represent the firm on engineering and related matters as a general rule; but the President could direct otherwise in specific situations which may arise from time to time that she decides should be treated and the firm represented differently. The duties of the office of Treasurer of TAP, which office is held by Carol Rhinard, are ceremonial rather than substantive; the Treasurer does not independently make any decisions or take any action on any matter of significance relating to the finances of TAP. (See minutes of Board of Directors meeting of November 11, 1983; T. 51-53) In sum, pursuant to the Articles of Incorporation and the bylaws of TAP, the real management power is vested in the Board of Directors and the male principals control 50 percent of the voting power on the Board of Directors. And as a result of the Board of Directors meeting of November 11, 1983, the male principals have, for all practical purposes, full control of all decision-making with regard to the most important decisions in an engineering consulting firm -- i.e., the engineering decisions. 6/ Explication of why certain findings of fact were not made and how conflicts in the evidence were resolved In making these findings of fact I have not made a number of findings of fact proposed by the parties and I have made some findings essentially the opposite of those proposed by the parties. Thus, this explication is required so that the parties will know what I found to be irrelevant, what I found to be insufficient to support a finding of fact, and how I resolved some of the blatant conflicts in the evidence. In making these findings of fact I have not based any findings on the copies of documents reflecting post-hearing changes to Article II, Section 2, and Article II, Section 9 of the TAP bylaws. I am constrained by the provisions of the Administrative Procedure Act to base my findings solely upon testimony and exhibits received in evidence at the formal hearing in this case. Similarly, I have not based any of my findings of fact on the answers to the post-hearing interrogatories which were served on TAP and are referred to at several places in the post-hearing memorandum submitted by DOT. The extent, if any, to which the post-hearing changes in the bylaws of TAP may change the extent of the management control of TAP exercised by the women owners is a matter which will have to wait for another day to be addressed -- perhaps when TAP files a new application for MBE certification based on new facts. But my recommended order in this case must be based on the facts as they existed at the time of the hearing. In the formulation of the foregoing findings of fact I have given little weight to the testimony of Carol L. Rhinard other than those portions of her testimony which constitute admissions against interest. My reason for giving little weight to this testimony is because, on the whole, Ms. Rhinard was not a very credible witness. She was both evasive and hostile on cross- examination. Throughout much of her testimony, particularly on cross- examination, she appeared to be trying to formulate what she thought would be the answer most beneficial to her cause rather than the answer which most nearly corresponded to her recollection of objective fact. Her obvious emotional involvement in the matter at issue appeared to color her testimony on any matter that involved value judgment or comparison of one thing to another. Finally, she displayed either a poor memory of, or limited knowledge of, the business affairs of TAP. I have not based any findings of fact on the testimony of Mr. Frank DeLuca for two reasons. First, it is irrelevant. Nothing in the applicable rules requires the women owners of a Minority Business Enterprise to be good or talented managers --they are just required to be the real managers. Second, even if it were relevant, the level of expertise that Mr. DeLuca purported to measure with his examination was that of ". . . someone who purported to be a traffic or transportation engineer . . . " (T. 196) The quoted standard is higher than the "working knowledge" standard in the U.S.D.O.T. training manual. Finally, I am not convinced of either the accuracy or fairness of the "examination" questions prepared by Mr. DeLuca. While I have no doubts about Mr. DeLuca's sincerity, nor any doubts about his competence as an engineer, there is no showing that Mr. DeLuca has any training or experience in the separate science of testing the knowledge of others. Further, the circumstances under which the "examination" was administered were far from ideal testing circumstances; the "examination" was unannounced, was unexpected, was administered by an adversary, and was administered at a time when the witness' attention was certainly distracted by other matters. With regard to the matter of why each of the individual principals of TAP received different numbers of shares of stock and the related matter of who contributed what in the way of expertise, effort, and cash in exchange for the shares of stock that were issued, I have found none of the evidence worthy of belief; first because too many conflicting versions have been given at different times and, second, because important details have been omitted. The omissions are perhaps more critical than the conflicts when note is taken of the proposition that the failure of a party in possession of material evidence to come forward with that evidence gives rise to an inference that the unproduced evidence would have been adverse to the party who failed to produce it. If one were to give credence to the evidence in the record on this subject, one could only conclude that the allocation of the shares of stock has all of the earmarks of a subterfuge designed to create the appearance of female control of the corporate management, when in fact the real intent of the parties was to divide control of the corporation along family lines, with each family having a voice in corporate affairs equal to that of each other family. This is evidenced by the fact that each family unit was issued 330 shares of stock. Further, the evidence in this case, even when giving the Petitioner the benefit of an abundance of doubts, fails to demonstrate any rational basis for the disparate distribution of the shares of stock. The testimony indicates that Douglas Campion contributed approximately $1,500 to TAP's capitalization and received 30 shares of stock. Thus, he paid approximately $50 per share for his stock. Gloria J. Campion is asserted to have contributed approximately $3,000 to TAP's capitalization and to have received 300 shares of stock. Thus, she paid approximately $10 per share. The Bynum family unit is asserted to have contributed more money to TAP's capitalization than did either of the other two family units, but the Bynum family unit received the same number of shares as the other two family units. These unexplained discrepancies lead only to the conclusion that the share distribution was contrived in an effort to create the appearance of eligibility under the MBE program. The one alternative explanation which was tendered is unpersuasive because, like the foregoing, it is lacking in fundamental logic. There is testimony in the record that the distribution of shares of stock took into consideration the individual talents of the several principals, as well as their contributions of time and effort to the success of TAP. Yet this explanation fails because although all three male principals appear to have substantially similar training, experience, and talent, and although all three of the male members are contributing a full-time effort to TAP, two of the males received 160 shares of stock and one received only 30. Similarly, as valuable as Gloria Campion's talents and experience in mathematics and computers may be to the future success of TAP, it can hardly be argued that her contribution of expertise and effort to TAP is ten times greater than that of Douglas Campion -- yet she received ten times as many shares of stock as he did.
Recommendation For all of the reasons discussed above, it is recommended that the Department of Transportation issue a Final Order denying the application of Transport Analysis Professionals, Inc., for certification as a Minority Business Enterprise. DONE and ORDERED this 10th day of August, 1984, at Tallahassee, Florida. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of August, 1984.
The Issue The issue for determination is whether Respondent should certify Petitioner as a minority business enterprise ("MBE").
Findings Of Fact Respondent is the governmental agency responsible for granting or denying applications for MBE certification in accordance with Section 288.703(1), Florida Statutes,1 and Florida Administrative Code Rules 60A-2.001 and 60A-2.005.2 Petitioner is an applicant for MBE certification. Petitioner is engaged in the business of installing traffic signal devices. Petitioner is a closely held Florida corporation that was organized in 1990. Minority Ownership All of Petitioner's stock is owned by Ms. Burita Allen. Ms. Allen is a minority person within the meaning of Section 288.703(3) (the "minority owner" or "minority shareholder"). The minority shareholder is majority shareholder. She owns at least 51 percent of Petitioner's stock within the meaning of Rule 60A-2.005(2)1. Financial Risk And Control The minority ownership of Petitioner is real, substantial, and continuing within the meaning of Rule 60A- 2.005(3)(d)3. The minority owner provided all of the $100,000 used for Petitioner's initial capitalization on April 4, 1995.3 Petitioner was inactive from 1990 until it began its first job on May 11, 1995. Petitioner now has completed or started a total of eight jobs. The minority owner has knowledge and control of Petitioner's financial affairs. She has sole control of the day to day operations of the company and its profit and loss. She contributed all of its initial capital, writes the checks, and contracts with employees, subcontractors, and customers. Operating And Management Control The minority owner has operating control of Petitioner and is technically qualified to manage and operate Petitioner's business. She has generated significant growth for Petitioner. Operating revenues have increased from zero to $170,736.28 in less than two years. Petitioner has another $90,268.08 in work performed but not billed. Petitioner's clients include the Florida Department of Transportation, the United States Navy, and Nassau County, Florida. Petitioner has also performed jobs for private companies such as Georgia Pacific, Target, and Haynes & Sons Inc. Affiliation Petitioner's minority owner gained the knowledge and experience needed to operate Petitioner successfully as an employee of J.W. Buckholz Traffic Engineering, Inc. ("Buckholz Engineering"). Buckholz Engineering is a closely held Florida corporation owned by five individuals. Petitioner's minority owner is the majority shareholder in Buckholz Engineering. She owns 52 percent of the stock of Buckholz Engineering. Petitioner shares office space, equipment, and staff with Buckholz Engineering. Petitioner's minority owner allocates approximately 40 percent of the 70 to 102 hours she works each week to Petitioner. The remainder of her work week is allocated to Buckholz Engineering. The affiliation between Petitioner, its minority owner, and Buckholz Engineering does not impair the minority owner's ownership and control of Petitioner. Petitioner's minority owner is the majority shareholder in Buckholz Engineering. Petitioner's minority owner has an unimpeded legal right to share Petitioner's income, earnings, and other benefits in proportion to her stock ownership within the meaning of Rule 60A-2.005(2)(b). Neither the exercise of discretion by Petitioner's minority owner, her financial risk, nor her equity position in Petitioner is subject to any formal or informal restrictions within the meaning of Rule 60A-2.005(3)(a). There are no provisions in any purchase agreement, employment agreement, voting rights agreement, or the corporate by-laws that vary or usurp the minority owner's discretion. Buckholz Engineering assisted Petitioner in obtaining greater bonding limits than Petitioner could obtain on its own. Petitioner was capable of obtaining bonding on its own but increased the amount of bonding by adding Buckholz Engineering as co-applicant. Petitioner's minority owner is the majority shareholder in Buckholz Engineering. Buckholz Engineering is a professional service corporation that provides design services by licensed professional engineers. Buckholz Engineering utilizes professional liability insurance. It is not a construction company and has no need to be bonded. Petitioner derived its name in part to benefit from the goodwill of Buckholz Engineering. However, the two companies are not engaged in the same business. Buckholz Engineering is a professional engineering firm that performs professional services including the design of traffic control systems. Petitioner installs traffic signal devices. Unlike Buckholz Engineering, Petitioner does not need a professional engineering license to conduct its business. Electrical License Petitioner does not offer a trade or profession to the state which requires a trade or professional license within the meaning Section 287.0943(1)(3)1.4 Unlike the professional engineers in Buckholz Engineering, no state statute requires the minority owner to be licensed in a particular trade or profession in order for Petitioner to install traffic signals. Petitioner's minority owner satisfies all certification requirements that are generally required for Petitioner to conduct its business. The minority owner is certified by the International Municipal Signal Association ("IMSA") and by the American Traffic and Safety Association ("ATSA"). In a particular job, Petitioner's customer may require that a licensed electrician pull the necessary permits for the job or that a licensed electrician approve the job. This customer requirement comprises only a de minimis portion of Petitioner's business. Of the eight jobs contracted by Petitioner, only one customer has required the permit to be pulled by a licensed electrician. Petitioner can satisfy these occasional customer requirements by subcontracting with a licensed electrician at a cost that is a small portion of the job cost.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order and therein GRANT Petitioner's application for MBE certification. RECOMMENDED this 18th day of February, 1997, in Tallahassee, Florida. DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 18th day of February, 1997.
Recommendation Based on the foregoing, it is RECOMMENDED: That petitioner's application for certification as a Women Business Enterprise be denied. DONE and ORDERED this 29th day of June, 1984, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of June, 1984. COPIES FURNISHED: Diann Criss Atkinson, Qualified Representative Shurly Contracting, Inc. P. O. Box 15267 West Palm Beach, Florida 33406 Vernon L. Whittier, Jr., Esquire Department of Transportation 605 Suwannee Street Tallahassee, Florida 32301 Paul A Pappas, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32301
The Issue Whether Petitioner's application for certification as a minority business enterprise should be granted.
Findings Of Fact Virginia Valletti, an American woman, within the meaning of Section 288.703, Florida Statutes, holds 75 percent of the stock of Petitioner, Commercial Air Tech, Inc., (Commercial Air). Sam Valletti, the husband of Virginia Valletti, owns 15 percent of the stock of Commercial Air, and the two daughters of the Valetti's each owns five percent of the stock of the business. Sam Valletti is not a minority person as defined in Section 288.703, Florida Statutes. Article II, Section 1 of the bylaws of Commercial Air provides that "All Corporate powers shall be exercised by or under the authority of, and the business affairs of the corporation shall be managed under the direction of, the Board of Directors." The bylaws state that the corporation shall have two directors. Those directors are Virginia and Sam Valletti. Article III, Section 2 of the bylaws of Commercial Air sets out the duties of the President of the company as follows: The President shall be the chief executive officer of the corporation, shall have general and active management of the business and affairs of the corporation subject to the directions of the Board of Directors, and shall preside at all meetings of the shareholders and Board of Directors. Commercial Air provides heating, ventilation, and air conditioning (HVAC) services and is required by Florida statutes to be qualified by a licensed contractor. Sam Valletti holds the contractor's license which qualifies Commercial Air. Virginia Valletti testified that she does not believe that she could pass the contractor's test to become the qualifying agent for the company. Sam Valletti is authorized to sign checks on the account of Commercial Air, but Virginia Valletti signs the majority of the checks for the business. Sam Valletti signed the business lease for Commercial Air. Sam Valletti or a male employee, signs the contracts on behalf of the business. According to Virginia Valletti, the two men sign the contracts for appearance sake because the HVAC business is a male-dominated industry. According to the application submitted to the Respondent, Department of Labor and Employment Security, Minority Business Advocacy and Assistance Office (Department), Virginia Valletti's major responsibilities in the business are as follows: Open and close office Monday through Friday Transact all accounts receivables and payables Answer customer calls and inquiry's [sic] all on customers to insure their needs are being met Dispatch technicians to job sites Compose all company forms and form letters and contract forms Track job costs Analyze profit & loss statement, balance sheet and other financial reports Oversee office personnel - hire, review (all personnel) and fire (office only) Shop and purchase all insurance (workman's comp., liability, bond, etc) Figure payroll and all associated taxes Negotiate credit lines and loans Track truck maintenance and inventory Place orders with vendors and track shipments to job sites The application submitted to the Department lists Sam Valletti's major responsibilities as follows: Estimates jobs in construction and service Troubleshoots equipment problems with technicians Recommends and designs new installations with property managers and owners Keeps up to date on So. Florida code changes, labor laws, and union regulations Finds new resources and seeks out leading edge technological advances Customer liaison for technical questions Hires, reviews, and fires service personnel Purchases company vehicles Sam Valletti receives approximately $16,000 per quarter in wages from Commercial Air, and Virginia Valletti receives approximately $3,000 in wages.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered denying Commercial Air, Tech Inc.'s request for certification as a minority business enterprise. DONE AND ENTERED this 28th day of April, 1998, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND 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 Filed with the Clerk of the Division of Administrative Hearings this 28th day of April, 1998. COPIES FURNISHED: Joseph L. Shields, Esquire Florida Department of Labor and Employment Security 2012 Capital Circle, Southeast Suite 307, Hartman Building Tallahassee, Florida 32399-2189 Edmond L. Sugar, Esquire 950 South Federal Highway Hollywood, Florida 33020 Douglas L. Jamerson, Secretary Department of Labor and Employment Security Suite 303, Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2189 Edward A. Dion, General Counsel Department of Labor and Employment Security Suite 307, Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2189
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.
The Issue The issue to be considered in this matter is whether Petitioner meets the requisite qualifications for certification as a minority business enterprise (MBE).
Findings Of Fact Otto A. Lawrenz, a Native American, is the sole owner of Petitioner, Mechanical Air Products (MAP), located in Jacksonville, Florida. Petitioner was certified from December 12, 1992, through December 12, 1993, as a minority business enterprise (MBE). Recertification for Petitioner as an MBE for the period December 12, 1993 through December 12, 1994, occurred without incident following application by Petitioner. Petitioner is a business which specializes in provision of heating, ventilation and air conditioning equipment to its customers. Following application in December, 1994, Respondent denied Petitioner's request for recertification as an MBE by letter dated January 6, 1995. Respondent's denial of Petitioner's recertification resulted from amendments to Respondent's definition of "[r]egular dealer" as set forth in Rule 60A-2.001(10), Florida Administrative Code, and Respondent's determination that Petitioner did not meet that definition. Petitioner does not own, operate or maintain a store, warehouse or other establishment. As stated by Otto A. Lawrenz in correspondence to Respondent and reaffirmed by him at the final hearing, Petitioner is: manufacturer representative type of business that buys directly from various suppliers and factories I [Lawrenz] repre- sent. The products are purchased from this company and shipped direct to customers ship to address. I [Lawrenz] do not stock these products for inventory. Petitioner is presently provided some storage space free of charge by another, unaffiliated business, for storage of some products.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered denying the application for certification as an MBE. DONE and ENTERED in Tallahassee, Florida, this 14th day of August, 1995. DON W. DAVIS, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of August, 1995. APPENDIX In accordance with provisions of Section 120.59, Florida Statutes, the following rulings are made on the proposed findings of fact submitted on behalf of the parties. Petitioner's Proposed Findings Petitioner's post-hearing submittal consisted of documentation, not provided at the final hearing, dealing with Petitioner's heritage, and his arguments of the law relative to this case. Consequently, those matters are addressed as not relevant and argumentative for purposes of this proceeding. Petitioner may attack the rules applied to his case in a separate rule challenge proceeding. Respondent's Proposed Findings 1.-4. Accepted, but not verbatim. COPIES FURNISHED: Otto A. Lawrenz Mechanical Air Products P O Box 17746 Jacksonville, FL 32245 Joseph L. Shields, Esq. Commission On Minority Economic And Business Development 107 W Gaines St., 201 Collins Bldg. Tallahassee, FL 32399-2005 Crandall Jones Executive Administrator Commission on Minority Economic and Business Development 107 W. Gaines St., 201 Collins Bldg. Tallahassee, FL 32399-2005
The Issue The issue presented is whether the Department acted fraudulently, arbitrarily, illegally, or dishonestly in proposing to award to Intervenor, The Weitz Company, Inc., a contract for Project No. DGS-88114000.
Findings Of Fact On February 18, 1992, Respondent Department of General Services issued its Invitation to Bid on Project No. DGS-88114000, the construction of the Fort Pierce Regional Service Center. The bid package contained a copy of the Department's Advertisement for Bids, together with the bid specifications, evaluation criteria, and criteria for award of the contract. The Department's Advertisement for Bids identified the project, advised that sealed bids would be received and opened at 2:00 p.m. on March 12, 1992, stated that the Bid Tabulation and Notice of Award Recommendation would be posted at 4:00 p.m. on that same date, and contained the following language: MINORITY PROGRAM: In accordance with Florida Statute 287.057(6), at least 21 percent of the project contracted amount will be expended with DGS certified minority business enterprises. If 21 percent is not attainable, the Division of Building Construction will recognize Good Faith Efforts by the Bidder. The Bidder is advised to review these requirements in the Section B-13B "Employment of and Reporting of DGS Certified Minority Business Enterprises Participation" immediately, in order to schedule the necessary tasks to accomplish Good Faith Efforts. Page 2 of the bid package was the Invitation to Bid form letter which contained the identical language as that quoted above. Section B-13B found on page 14 of the bid package under Instructions to Bidders provides as follows: B-13B EMPLOYMENT OF AND REPORTING OF DGS CERTIFIED MINORITY BUSINESS ENTERPRISE PARTICIPATION Florida Statute 287.042 and the Department of General Services Rules 13-8 and 13-9, encourages the employment of and requires the reporting of DGS Certified Minority Business Enterprise (MBE) participation in state contracting. The Department has as its goal to spend twenty-one percent (21 percent) of construction contracts with DGS certified minority business enterprises. The overall goal for construction contracts are as follows: 4 percent Black Americans 6 percent Hispanic Americans and 11 percent American Women The Division Director of the Division of Building Construction recognizes the need to take affirmative actions to insure that Minority and Women business enterprises and minority and women employees are given the opportunity to participate in the performance of the Division of Building Constructions' construction programs. This opportunity for full participation in our free enterprise system by traditionally, socially and economically disadvantaged persons is essential to obtain social nd [sic] economic equality and improve the functioning of the State economy. Accordingly, it is the policy of the Division of Building Construction to foster and promote the full participation of such individuals and business firms in the State's building construction program. The Contractor, by bidding on this Contract, acknowledges his understanding and support for the social policy herein stated and pledges to fully cooperate with the State in the implementation of this policy, and further to exert a good faith effort to solicit and obtain the participation of such individuals and firms as subcontractors, suppliers and employees on this Contract. Prior to the execution of a contract, the bidder shall provide the following information on his contract or subcontracts for all DGS certified minority business firms to be utilized on the project: * * * Contractor's Schedules of Values and Requests for Partial Payments shall also reflect the payments made to each MBE subcontractor, using the name, minority vendor code, type of business and amounts. The contractor shall make a good faith effort to use services or commodities of minority business enterprises by: Attending any presolicitation or prebid meetings that were scheduled by the division to inform minority business enterprises of contracting and subcontracting opportunities; Advertising in general circulation, trade association, and/or minority-focus media concerning the subcontracting opportunities; Providing written notice to a reasonable number of specific minority business enterprises that their interest in the contract was being solicited in sufficient time to allow the minority business enterprises to participate effectively; Following up initial solicitations of interest by contacting minority business enterprises or minority persons to determine with certainty whether the minority business enterprises or minority persons were interested; Selecting portions of the work to be performed by minority business enterprises in order to increase the likelihood of meeting the minority business enterprise goals, including, where appropriate, breaking down contracts into economically feasible units to facilitate minority business enterprise participation; Providing interested minority business enterprises or minority persons with adequate information about the plans, specifications, and requirements of the contract or the availability of jobs; Negotiating in good faith with interested minority business enterprises or minority persons, not rejecting minority business enterprises or minority persons as unqualified without sound reasons based on a through [sic] investigation of their capabilities; and Effectively using services of available minority community organizations; minority contractors' groups; local, state, and federal minority business assistance offices; and other organizations that provide assistance in the recruitment and placement of minority business enterprises or minority persons. Prior to the issuance of the Invitation to Bid, the St. Lucie County Democratic Executive Committee directed a letter to Governor Lawton Chiles concerning the high rate of unemployment in the construction industry in the Fort Pierce and St. Lucie County area. That letter requested that language be included in the invitation for bids for the Fort Pierce Regional Service Center specifying that priority be given to the available resident work force, first, from within the city of Fort Pierce and, second, from within St. Lucie County. That correspondence reached the Department of General Services, with the result that the following language was included within the bid specifications on page 14a: B-13C EMPLOYMENT OF LOCAL LABOR, SUBCONTRACTORS AND MATERIAL SUPPLIERS The procurement by General Contractors and Sub- contractors of persons for skilled and unskilled worker positions, the sub-contracting by General Contractors for Sub-contractor services and the purchase by General Contractors and Sub-contractors of materials, equipment, supplies and services is highly encouraged to the maximum extent possible, to be from persons residing within or businesses located within Ft. Pierce and St. Lucie County. A Pre-bid Conference was conducted on February 28, 1992. The Minutes from the Pre-bid Conference reflect that Addendum No. 1 to the bid specifications provided to potential bidders a copy of the Department's Minority Business Enterprise Construction Directory listing DGS-certified minority business enterprises as of December 1991. Those Minutes also contain the following entry: Highlights of front-end of Project Manual * * * Page 14, Paragraph B-13B for reporting minority participation stipulates 21 percent goal: 4 percent Black 6 percent Hispanic 11 percent American Women Contractors must thoroughly document their good effort. Procedure for documenting good effort can be obtained from Susan Hodge. * * * K. Page 89 - Post Bid Qualifications: Form is to be completed and submitted within 7 days after Bid Opening. A few of the lowest Bidders will probably be required to submit this form. At 2:00 p.m. on March 12, 1992, the Department received and opened eleven bids for the construction of the Fort Pierce Regional Service Center. Two of those bids were from Petitioner D. I. C. Commercial Construction Corp. (hereinafter "D.I.C.") and from Intervenor The Weitz Company, Inc., (hereinafter "Weitz"). At 3:00 p.m. on March 12 the Department posted its Bid Tabulation and Notice of Award Recommendation. That Bid Tabulation reflected that The Weitz Company of West Palm Beach submitted the lowest bid, in the amount of $5,545,800, and that D.I.C. Commercial Construction of Fort Pierce submitted the second lowest bid, in the amount of $5,553,600. The Bid Tabulation and Notice of Award Recommendation further provided as follows: This is to advise you that the Division of Building Construction, Department of General Services, State of Florida, Has recommended that the contract for the referenced project be awarded to the firm of: THE WEITZ COMPANY, INC. in the amount of $5,545,800.00, accepting the BASE BID AND ALTERNATE #1 AND #2, determined to be the lowest acceptable qualified bid. Any bidder disputing the contract award recommendation must file . . . . Written notice of protest within seventy-two (72) hours after posting of this notice. A formal written protest by petition in compliance with Rule 13-4.12, Florida Administrative Code, and Section 120.53(5), Florida Statutes, within ten (10) days after the date on which he filed the notice of protest. * * * The Executive Director of the Department of General Services, State of Florida plans to act on the above recommendation after expiration of the seventy-two (72) hour notice period. That proposed bid award took into consideration only the amount bid by each of the eleven bidders. In making its proposed bid award, the Department gave no consideration to its bid specifications that required the inclusion of at least 21 percent participation by subcontractors who were DGS-certified minority business enterprises (hereinafter "MBEs"), and which "highly encouraged to the maximum extent possible" the use of "persons residing within or businesses located within Ft. Pierce and St. Lucie County." On March 16, 1992, D.I.C. timely filed its Notice of Protest to the proposed award of the contract to Weitz. On March 26, 1992, D.I.C. timely filed its Formal Notice of Protest to that proposed bid award. Since the Weitz bid did not achieve the required 21 percent MBE participation, Weitz was required to submit documentation of its "good faith effort" to the Department along with other post-award qualification documentation. Weitz submitted its "good faith effort" documentation on March 16, 1992. Although the Department was aware that a Notice of Protest had been filed on March 16, the Department commenced its "good faith effort" review on March 17, 1992. Weitz's good faith submittal recited that it had achieved a total DGS- certified MBE participation of 13.6 percent in its attempt to reach the goal of at least 21 percent. Of the required classes of 4 percent Black Americans, 6 percent Hispanic Americans, and 11 percent American Women, Weitz reported it had achieved 3.2 percent, 8.9 percent, and 1.5 percent respectively. One of the MBEs included within the percentage of Hispanic Americans was improperly included since that minority subcontractor is an Asian subcontractor, which is a different certification classification and not one of the types of minorities specifically required to be included in this project. That Asian subcontractor represented almost one-half of the Hispanic participation claimed by Weitz. Accordingly, Weitz failed to achieve the required overall percentage and failed to achieve the required percentage in any of the three categories. Weitz's submittal also showed that it had included within its achieved percentages of participation subcontractors who were not yet DGS-certified, by listing three of those subcontractors under the heading of "pending minority certification." Although one of those did become certified by the time of the formal hearing in this cause, the other two have never applied for certification. Although the bid specifications use the language DGS-certified MBE subcontractors for inclusion in the 21 percent participation requirement, it is clear that D.I.C., Weitz, and the Department believed that the bid specifications meant certified or certifiable. The Department's policy is that the MBE must be certified by DGS, not on the date of bid submittal, but by the time that the Department enters into the construction contract with the prime contractor. It is also clear that the Department began tracking the efforts of Weitz's subcontractors to become certified by DGS and became involved in the certification process for Weitz's subcontractors who were not yet DGS-certified. Although Weitz had received 21 bids from DGS-certified MBEs, it chose to use the bids of only five. The bids of the others were rejected because Weitz had made the prior determination that it would use the bid of a DGS- certified MBE only if that subcontractor submitted the low bid for that particular portion of the work. In other words, Weitz's focus was on submitting the lowest possible bid rather than on submitting a bid which included the required MBE participation goal. On the other hand, when D.I.C. received and reviewed its bid package, it made the determination that the Department's requirement of at least 21 percent minority participation was easily achievable. Accordingly, D.I.C. did not prepare any "good faith effort" documentation since the bid specifications clearly stated that the Department would consider good faith efforts only if the 21 percent goal were not attainable. D.I.C. made the decision that it would include the required percentage, both overall and in each individual category, in its bid submittal and that, if it could not, it would simply not submit a bid on this construction project. D.I.C. included in its bid the bids of MBE subcontractors who it believed were either DGS-certified or certifiable for a total participation of 26.5 percent. Included within that overall participation D.I.C. exceeded the required percentage for Black Americans, exceeded the required participation for Hispanic Americans, and fell barely short of meeting the required participation for American Women. After D.I.C. filed its Notice of Protest, although the Department freely communicated with Weitz and Weitz's subcontractors in the Department's efforts to certify those subcontractors to be used by Weitz who were not certified, the Department ceased communication with D.I.C. and D.I.C.'s subcontractors. Further, the Division of Building Construction of the Department commenced and continued in its efforts to review Weitz's "good faith" submittal. The Department further rejected communication from the supervisor in its own Minority Business Enterprise Assistance Office regarding the Department's good faith efforts review. When conducting its good faith review, the Department looked only at the documentation submitted by Weitz. It made no effort to ascertain if there were things that Weitz could have done that Weitz chose not to do. Further, in conducting its good faith effort review, the Department reviewed Weitz's documentation under the belief that there was no specific MBE goal for this project. The Department's belief that there was no required MBE participation for this project, contrary to the bid specifications, was based upon the fact that the Legislature had given the Department a goal of at least 21 percent minority participation with the breakdown for the three categories of MBEs listed in the bid specifications as an overall Department goal. Although not disclosed in the bid specifications, the Department looked to meet its goal through the totality of its construction contracts and not pursuant to any individual contract. By March of 1992, the Department had already exceeded its statutorily-imposed goal by 140 percent for that fiscal year. Further, it was the Department's policy and practice to include in its reports to the Legislature concerning whether the Department had met its own statutorily- imposed MBE participation goal the participation of all minority subcontractors in all of the Department's construction contracts without regard to whether those subcontractors were DGS-certified by the time that the Department entered into those construction contracts with the prime contractors. In reviewing Weitz's good faith efforts, the Department utilized the criteria set forth in the bid specifications. It looked at each of the eight criteria listed in the bid specifications and then looked at the documentation submitted by Weitz to ascertain if there had been an effort to comply. The first criterion considers whether the contractor attended presolicitation meetings scheduled by the agency to inform minority business enterprises of the subcontracting opportunity. Since the Department held no such meeting regarding this construction project, none of the bidders could have met this criterion. The second criterion relates to advertising in general circulation, trade association, and/or minority-focus media. Weitz ran an ad one time only on Sunday, March 1, in the Palm Beach Post and in the Fort Lauderdale News/Sun- Sentinel. Weitz placed no other ads. The third criterion requires providing written notice to a reasonable number of specific minority business enterprises that their interest is being solicited in sufficient time to allow them to participate effectively. Weitz sent 98 letters throughout the state of Florida to MBEs listed in the Department's December 1991 directory. That letter was dated February 25, 1992. The fourth criterion requires following up initial solicitations by contacting MBEs or minority persons to determine with certainty whether they are interested. Weitz sent a follow-up letter dated March 4 to the same 98 addressees as its prior letter. The fifth criterion requires selecting portions of the work to be performed by MBEs to increase the likelihood of meeting the MBE goals, including, where appropriate, breaking down contracts into economically feasible units to facilitate MBE participation. Weitz's documentation reflected that the work of several trades had been broken down into smaller units. The sixth criterion requires providing interested MBEs or minority persons with adequate information about the plans, specifications, and requirements of the contract or the availability of jobs. The advertisement placed by Weitz gave no information other than that it was seeking bids from certified MBEs for construction of the Regional Service Center in Fort Pierce, that the bid deadline was March 12, and that plans were available for review at Weitz's office in West Palm Beach. The first letter sent by Weitz advised the recipient of the square footage of the project, that Weitz might assist subcontractors on their bonding requirement, and that plans were available for review at Weitz's office in West Palm Beach and at local plan rooms, or full sets of plans and specifications could be purchased from Weitz at a price of $300 a set. The letter further gave the names of two persons at Weitz's office who could be contacted. The follow-up letter sent by Weitz contained the same information. The seventh criterion requires negotiating in good faith with interested minority business enterprises or minority persons and not rejecting them as unqualified without sound reasons based upon a thorough investigation of their capabilities. The Weitz documentation contained a statement saying that it had not rejected any minorities as being unqualified. The eighth criterion requires effectively using services of available community organizations; minority contractors' groups; local, state, and federal minority business assistance offices; and other organizations that provide assistance in the recruitment and placement of minority business enterprises or minority persons. Weitz sent letters to six organizations in the state of Florida stating that it was seeking proposals for the Fort Pierce Regional Service Center, that it had contacted those companies listed in the December 1991 directory, that plans were available for review at Weitz's office in West Palm Beach and at local plan rooms, and that the recipients should refer any known interested persons to Weitz. It is clear that Weitz made an effort to obtain minority participation. It did not, however, use its "best ability and effort" to obtain minority participation. Weitz's efforts did result in the receipt of a substantial number of bids from DGS-certified MBEs. It does not, however, appear that Weitz used its best effort to assist interested MBEs to participate in the construction project since it did not use any subcontractor's bid unless it was the low bid. Weitz's documentation contains a copy of each of the letters sent to the 98 businesses in the state of Florida and also contains some notations of telephone contact between Weitz and some MBEs. The documentation does not support the proposition, however, that Weitz used its best efforts to work with individual MBEs to solicit their interest; to ascertain with certainty their level of interest; to make the plans and bid specifications available to them; to organize the scope of work into smaller units, if necessary, to enable MBEs to effectively participate in the bidding process; and, most importantly, to utilize bids received by those MBEs. Although the bid specifications specifically stated that the minority participation was to be at least 21 percent and, if that 21 percent was not attainable, the Department would consider good faith efforts, the Department made no independent determination of whether 21 percent DGS-certified MBE participation on this project was attainable. Contrary to the language of the bid specifications, the Department interpreted the criteria to be a requirement that the bidder either attain 21 percent or submit good faith efforts. Since Weitz was the apparent low bidder by price, and since Weitz did not achieve the 21 percent participation, the Department assumed that such level of participation could not be attained and that Weitz could instead submit its "good faith effort." Although a provision was specifically written into the bid specifications for this project that the bidders were encouraged to use local labor from the Fort Pierce and St. Lucie County areas, the Department developed no criteria by which to judge whether the bidders attempted to comply with that bid specification. Additionally, the Department failed to review the bids received for this construction project to see if efforts had been made to include local labor. In essence, this bid specification was ignored by the Department. Although Weitz included in its "good faith effort" submittal a statement that it would utilize local labor by using its own employees, Weitz is located in West Palm Beach, not in St. Lucie County or in Fort Pierce. Although Weitz further included a statement that it might utilize up to twelve companies located in that area, the Department made no determination as to the number of qualified companies located there. The Department was not aware of the fact that Weitz had solicited only by letter two DGS-certified subcontractors in St. Lucie County and only three DGS-certified subcontractors in surrounding counties. On the other hand, D.I.C. had expended extensive efforts to involve businesses in the Fort Pierce and St. Lucie County area. Although Weitz attached to its Petition to Intervene in this proceeding a list of St. Lucie County firms which were encouraged to submit bids and a list of other firms who employ a majority of St. Lucie County employees on projects located in Fort Pierce which were encouraged to submit bids, those documents were never presented to, or considered by, the Department when it evaluated Weitz's bid. Section B-21 of the bid specifications provides, in essence, that the contract would be awarded to the bidder submitting the lowest bid. Weitz's bid was slightly lower than that of D.I.C.--a difference of $7,800 on bids of over five and a half million dollars. D.I.C.'s bid could have been $60,000 lower if it had not sought to comply with the 21 percent MBE requirement set forth in the bid specifications. Its bid would have been lower if it had, like Weitz, rejected all bids from DGS-certified MBE subcontractors who were not also the lowest bidder in that particular trade. D.I.C.'s belief that the Department would require compliance with all provisions in the bid specifications caused D.I.C.'s bid to be higher than that of Weitz, which placed emphasis on the lowest price rather than the lowest price plus effective effort at meeting the MBE participation specification. By focusing on one bid specification and not on all of the bid specifications, the Department gave Weitz an unfair advantage over other bidders. By allowing Weitz to submit "good faith effort" rather than comply with the 21 percent minimum participation requirement, the Department, in essence, allowed Weitz to make a subjective determination that the 21 percent requirement was not attainable. It was the Department's duty under the bid specifications to make its own objective determination that the 21 percent bid specification was not attainable before the alternative consideration of "good faith effort" became relevant to the bid award recommendation. The Department could have, for example, looked at the other bids submitted to see if the other bidders had attained the 21 percent participation requirement. Under the Department's approach, i.e., relying solely on Weitz's representation and considering only Weitz's bid, it is possible that the other bidders attained the 21 percent requirement and that only Weitz did not comply with that bid specification. The Department's procedure rendered the 21 percent bid specification meaningless, which fact was not known in advance by all of the bidders. By failing to determine whether the goal for MBE participation set forth as a bid specification was attainable, the Department failed to determine whether Weitz had complied with all bid specification requirements. Accordingly, the Department did not in fact make a determination that Weitz was a responsive bidder by meeting all bid specifications. Further, the Department made no determination in fact as to whether any of the other bidders, including D.I.C., were responsive to the Department's own bid specifications. Accordingly, there has been no determination that Weitz, or any other bidder, is the lowest responsive bidder. Similarly, the Department made no determination as to whether Weitz had complied with Section B-13C of the bid specifications which provided that bidders were "highly encouraged to the maximum extent possible" to utilize persons residing within or businesses located within Fort Pierce and St. Lucie County. D.I.C., with offices in Fort Pierce, submitted a bid which included 67 percent local participation. Weitz, with offices in West Palm Beach, submitted a bid representing that it would utilize its own employees for 15 percent of the contract (a different bid specification) and represented that it would probably utilize up to a dozen local companies. Since it is clear that Weitz solicited subcontractors from all over the state of Florida, Weitz made no showing that it had attempted "to the maximum extent possible" to utilize persons and businesses from Fort Pierce and St. Lucie County. Additionally, Weitz's single advertisement in the two newspapers chosen by it does not show an intent to obtain local participation since the Fort Lauderdale News/Sun-Sentinel is not sold in either Fort Pierce or St. Lucie County and the Palm Beach Post is obtainable in Fort Pierce only at 7-11 convenience stores and in newspaper vending machines. The Department made no determination as to whether Weitz, or any other bidder, was responsive to this bid specification. Further, the Department did not advise bidders that it might not enforce this bid specification in the same manner that the Department did not advise all bidders that it might not enforce the 21 percent bid specification. In short, the procedures utilized by the Department in evaluating the bids submitted for this project did not afford fair and equal review of all bids submitted. Further, Weitz was given a competitive advantage by the Department's determination that Weitz should be given the bid award based solely on the Weitz bid being the lowest submitted.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered rejecting all bids on Project No. DGS- 88114000 for the Fort Pierce Regional Service Center. RECOMMENDED this 25th day of June, 1992, at Tallahassee, Florida. LINDA M. RIGOT 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 25th day of June, 1992. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-2370BID Petitioner's proposed findings of fact numbered 1-4, 7-14, 17, 20, 29, 30, 33, 35, 36, 39, 43, 45-48, and 55 have been adopted either verbatim or in substance in this Recommended Order. Petitioner's proposed findings of fact numbered 5, 6, 15, and 18 have been rejected as not being supported by the weight of the competent evidence in this cause. Petitioner's proposed findings of fact numbered 16, 21-28, 34, 37, 38, 40, 42, 49-52, and 54 have been rejected as being unnecessary to the issues involved herein. Petitioner's proposed findings of fact numbered 19 and 53 have been rejected as being irrelevant to the issues under consideration in this cause. Petitioner's proposed findings of fact numbered 31, 32, 41, and 44 have been rejected as not constituting findings of fact but rather as constituting argument of counsel, conclusions of law, or recitation of the testimony. Respondent's proposed findings of fact numbered 1, 2, 4, 7, 8, 11, 17, 19, 21, 22, 24-28, and 37 have been adopted either verbatim or in substance in this Recommended Order. Respondent's proposed findings of fact numbered 3, 5, 6, 20, 29, 31, 33, 35, 36, and 38-41 have been rejected as not being supported by the weight of the competent evidence in this cause. Respondent's proposed findings of fact numbered 9, 10, 12-14, and 34 have been rejected as being unnecessary to the issues involved herein. Respondent's proposed findings of fact numbered 15, 16, 18, 30, and 32 have been rejected as being irrelevant to the issues under consideration in this cause. Respondent's proposed finding of fact numbered 23 has been rejected as not constituting findings of fact but rather as constituting argument of counsel, conclusions of law, or recitation of the testimony. Intervenor's proposed findings of fact numbered 1 and 10 have been adopted either verbatim or in substance in this Recommended Order. Intervenor's proposed findings of fact numbered 2, 3, 7, 12, 15, and 16 have been rejected as not being supported by the weight of the competent evidence in this cause. Intervenor's proposed findings of fact numbered 4-6, 8, 9, 11, 13, and 14 have been rejected as not constituting findings of fact but rather as constituting argument of counsel, conclusions of law, or recitation of the testimony. COPIES FURNISHED: Melinda S. Gentile, Esquire Ruden, Barnett, McClosky, Smith, Schuster & Russell, P.A. 200 East Broward Boulevard Post Office Box 1900 Fort Lauderdale, Florida 33302 Stephen S. Mathues, Esquire Department of General Services Knight Building, Suite 309 2737 Centerview Drive Tallahassee, Florida 32399-0950 Bruce G. Alexander, Esquire Boose Casey Ciklin Lubitz Martens McBane & O'Connell Suite 1900 515 North Flagler Drive Post Office Box 024626 West Palm Beach, Florida 33402 Neil H. Butler, Esquire Butler & Long, P.A. Post Office Box 839 Tallahassee, Florida 32302 Ronald W. Thomas Executive Director Department of General Services Knight Building, Suite 307 2737 Centerview Drive Tallahassee, Florida 32399-0950 Susan Kirkland, General Counsel Department of General Services Knight Building, Suite 309 2737 Centerview Drive Tallahassee, Florida 32399-0950
