92-000896 Charles E Burkett And Associates, Inc. vs. Department Of Transportation Status: Closed Recommended Order on Tuesday, November 17, 1992.

Summary: White female owner of engineering firm denied minority business status because she lacked technical experience and schooling pursuant to Department of Transportation Rule 14-78.005, Florida Administrative Code.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CHARLES E. BURKETT AND ASSOCIATES, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 92-0896

)

DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

__________________________________________)

RECOMMENDED ORDER

The final hearing in the above-styled matter was heard pursuant to notice

by Stephen F. Dean, assigned Hearing Officer of the Division of Administrative

Hearings, on July 15, 1992, in Daytona Beach, Florida.

APPEARANCES

FOR PETITIONER: Theodore E. Mack, Esquire

Cobb, Cole, and Bell

131 North Gadsden Street

Tallahassee, Florida 32301

FOR RESPONDENT: Pamela S. Leslie, Esquire

Pamela A. Arthur, Esquire

Department of Transportation

605 Suwannee Street, MS #58

Tallahassee, Florida 32399-0458

PRELIMINARY STATEMENT

The Petitioner, Charles E. Burkett and Associates, Inc. (hereafter

Burkett), is an applicant for a Disadvantaged Business Enterprise (DBE)

certificate to provide professional engineering services under contract to the

Florida Department of Transportation (DOT). The DOT denied the Petitioner's

application for DBE certification because it asserted that the disadvantaged

owner did not control the day to day operations of the business because she

lacked the expertise in critical areas of operation of the business. This

determination was based upon amendments to Rule 14-78-005,(7),(e),2, 8, and 9,

Florida Administrative Code, adopted in June of 1991.

The Petitioner, having been notified that its application for DBE status

had been denied, filed petitions challenging the Department's rule cited above,

and the Department's decision denying its application. The cases were heard

together, and at the hearing, the Petitioner called no witnesses. The

Respondent presented the testimony of one witness, Ms. Juanita Moore, Manager of

the Department's Contracts Administration Office and former Manager of the

Department's Minority Programs Office. Petitioner presented two exhibits into

evidence, and Respondent presented three exhibits into evidence.

Following the hearing, both parties submitted proposed findings which were

read and considered. The Final Order sustaining the validity of the

Department's rule was issued earlier. Thereafter, the parties were permitted to

supplement their post hearing pleadings in this case. The supplemental findings

were read and considered. Appendix A states which of these findings were

adopted, and which were rejected and why.

FINDINGS OF FACT

1. The DOT, as a state agency, is charged with developing a DBE program

for contractors dealing with the Department.

2. Burkett is a Florida corporation whose sole stockholder is a white

female American. She meets the criteria of a socially and economically

disadvantaged individual. Burkett applied for certification as a DBE on July

12, 1991, and was denied by the Department on October 1, 1991.

3. Burkett submitted additional information and made changes to its

internal organization to better conform to the Department's requirements;

however, the Department has denied Burkett DBE status on the basis of the

owner's alleged lack of expertise in the critical areas of the firm's operation,

to wit; she does not possess education or training in engineering.

4. The DOT interprets "critical areas of operation" to mean the technical

area in which the DBE certification is being sought. Management limited to the

day-to-day normal business operations is not considered to be a "critical area

of operations."

5. Evidence of expertise is dependent upon the nature of the business;

however, the DOT expects to see education or experience on the part of the

disadvantaged owner in the technical area of operations of the business.

6. The DOT denied the Petitioner because the disadvantaged owner did not

possess engineering experience or education.

7. The disadvantaged owner is the widow of the founder of the business who

died of a form of multiple sclerosis. As her husband lost the ability to direct

the operations of the company, the owner assumed more and more responsibility

for the day to day operations of the company. Professional engineers were hired

to handle the technical aspects of the business; however, she clearly directed

the hiring and firing of engineering staff. In this regard, her son and son-in-

law, who are both trained engineers, came into the business. Her son-in-law

left when the owner limited his participation in the business. Her son remains

in the business as head of the engineering operation; however, she actively

participates in the assessment of projects and preparation and presentation of

bids. She is in overall control of the company, and, although she does not make

direct assignments of tasks to engineers and draftsman, she does oversee their

work. She has pointed out to her son draftsmen who are under utilized, and

given directions to assign the men more work and terminate them.

8. The owner does not have any formal engineering training or experience

in technical engineering work.

CONCLUSIONS OF LAW

9. The Division of Administrative Hearings has jurisdiction over the

parties and the subject matter, and this order is entered pursuant to Section

120.57, Florida Statutes.

10. Section 339.0805(1),(c), Florida Statutes, provides:

(c) The department shall certify a socially

and economically disadvantaged business

enterprise[s]. . . .

11. Section 334.044,(2), Florida Statutes, provides that the Department is

authorized to adopted rules for the conduct of its business operations and the

implementation of any provision of law for which the Department is responsible.

Pursuant to that authority the Department enacted Rule 14-78-005,(7),(e),8.,

Florida Administrative Code, which provides:

The minority owners shall have managerial and

technical capability, knowledge, training,

education or experience required to made

decisions in the critical areas of operation.

12. The Department also promulgated Rule 14-78.005, (7),(e),2., supra,

which provides that the minority owner's knowledge of the particular business,

background, involvement in the business on a day-to-day basis, expertise,

involvement by the non-minority owners, employees or non-minority employees,

other full or part-time employment by the minority applicant and the size of the

applicant's business be considered. Rule 14-78.005, (7),(e),9., supra, provides

that minority owners shall display independence and initiative in seeking, and

negotiating contracts, accepting and rejecting bids and in conducting all major

aspects of the business; and in those instances in which the minority owners do

not directly negotiate contracts, but claim to approve or reject bids and

agreement, the minority owners shall demonstrate that they have the knowledge

and expertise to independently make contractual decisions.

13. The Department cites in its brief Whitworth-Borta, Inc. v. Jim

Burnley, No. G87-176CAS, 1988 WL 242625 (W.D. Mich June 28, 1988), in which the

court, faced with facts very similar to those presented and application of a

rule very similar to the Respondent's rule, stated:

The Court's review of the Department's

decision is confined by a limited standard of

review. In the face of the present challenge,

the decision must be sustained unless it is

arbitrary, capricious, an abuse of discretion

or otherwise not in accordance with law.

* * *

At we noted in National Steel Corp. v.

Gorsuch, 700 F.2d 314, 321 (6th Cir. 1983), it

is not necessary that the agency's

construction of the statute be the only

permissible one. Rather, its construction

"must be upheld unless that view is plainly

unreasonable.

* * *

While this Court may well have reached a

different conclusion had it reviewed the

Whitworth-Borta application in the first

instance, it cannot be said that the

Department's decision is arbitrary, capricious

or an abuse of discretion.

Nor does the court believe the Department

exceeded its authority by considering Mr.

Whitworth's lack of engineering expertise

in determining the extent of his business

control. The term "control" is of necessity

indefinite and flexible, enabling the

Department to exercise reasonably broad

discretion in assessing the facts and

circumstances of each application.

* * *

In sum, it appears the department applied the

MBE certification eligibility standards

reasonably in concluding Whitworth-Borta had

not carried its burden of proof that it is

"controlled" by Mr. Whitworth.

13. To summarize the instant facts, the Department of Transportation is

designated to administer the DBE program relating to highway construction within

the state. DOT is authorized to promulgate rules regarding all the programs

which it administers. It has adopted the series of rules which implement the

Florida statute requiring that the disadvantaged owner control the business

seeking DBE certification by explicating "control," as used in the statute, to

mean having the requisite knowledge, experience, and education to understand and

participate in the technical operations of the business.

14. Although it appears that the term "control," as used in the Section

337.139 and 339.0805, Florida Statutes, relates to insuring that the applicant

is really owned by a disadvantaged individual and not a non-disadvantaged

individual hiding behind a wife or daughter to whom a majority share of the

business has been transferred, the Department's rule extending "control" to

include more than administrative/managerial functions is reasonable to implement

the mandate to provide economic assistance to DBE's in harmony with the

Department's interest that qualified businesses and individuals are attracted to

engage in the technically oriented businesses related to building its roads,

bridges and similar structures. Because a reasonable basis exists for the rule,

the rule was determined to be valid in the companion case.

15. Applying that rule to the facts surrounding the owner's activities in

the company, the owner does not have the expertise and technical capability,

knowledge, training, education or experience to in critical areas of operation.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is

recommended that the Department of Transportation deny the Petitioner's request

for Disadvantaged Business Enterprise (DBE) status.

DONE AND ENTERED this 17th day of November, 1992, in Tallahassee, Leon

County, Florida.

___________________________________

STEPHEN F. DEAN

Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 17th day of November, 1992.

Appendix A to Recommended Order 92-896

The parties submitted supplemental proposed findings which were read and

considered. The following states which findings were adopted and which were

rejected and why.

Petitioner' Proposed Findings:

Paragraph ue, but rejected in favor of discussion

of son-in-law's leaving business.

Paragraph 2 Irrelevant.

Paragraph ue; but rejected in favor of Para 5 in

RO.

Respondent's Proposed Findings:

Paragraph 1-3 Rejected as argument, and conclusions of

law.

Paragraph 4,5 Irrelevant.

Paragraph 6 Irrelevant. The Department based its

determination on the owner's lack of

education and experience and not lack of

participation.

Paragraph 7 Irrelevant. She was afforded the

opportunity to present her case at the

hearing.

COPIES FURNISHED:

Theodore E. Mack, Esquire

Cobb, Cole, and Bell

131 North Gadsden Street

Tallahassee, FL 32301

Pamela S. Leslie, Esquire

Pamela A. Arthur, Esquire

Department of Transportation

605 Suwannee Street, MS # 58

Tallahassee, FL 32399-0458

Ben G. Watts, Secretary

Department of Transportation

Haydon Burns Building, M.S.-58

605 Suwannee Street

Tallahassee, FL 32399-0458

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended

Order. All agencies allow each party at least 10 days in which to submit

written exceptions. Some agencies allow a larger period within which to submit

written exceptions. You should contact the agency that will issue the final

order in this case concerning agency rules on the deadline for filing exceptions

to this Recommended Order. Any exceptions to this Recommended Order should be

filed with the agency that will issue the final order in this case.

=================================================================

AGENCY REMAND

=================================================================

STATE OF FLORIDA

DEPARTMENT OF TRANSPORTATION

CHARLES E. BURKETT AND

ASSOCIATES, INC.,

Petitioner, DOAH CASE NO. 92-0896

DOT CASE NO. 92-0679

vs.

DEPARTMENT OF TRANSPORTATION,

Respondent.

_______________________________/

ORDER GRANTING MOTION FOR REMAND TO

DIVISION OF ADMINISTRATIVE HEARINGS

Having reviewed Respondent's Motion for Remand, having considered the

applicable facts and law, and having been fully advised in the premises,

Respondent's Motion for Remand is hereby granted. This matter is returned to

the Division of Administrative Hearings for specific rulings on the proposed

findings of fact submitted to the hearing officer by both Charles E. Burkett and

Associates, Inc., and the Department of Transportation, on September 4, 1992.

DONE AND ORDERED this 6th day of January, 1993.

_______________________________

Ben G. Watts, P.E.

Secretary, Department of Transportation

=================================================================

ORDER ACCEPTING REMAND AND RULING ON PROPOSED FINDINGS

=================================================================

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CHARLES E. BURKETT AND ASSOCIATES, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 92-0896

)

DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

__________________________________________)

ORDER ACCEPTING REMAND AND

RULING ON PROPOSED FINDINGS

On January 8, 1992, the Department filed an Order Granting Motion for

Remand in this case to permit the Hearing Officer to rule on proposed findings

which were overlooked when the Recommended Order was entered. THEREFORE, the

remand is accepted and the following rulings on the proposed findings made:

Petitioner's Findings Recommended Order

Para 1-10 Subsumed in Para 1

Para 11-13 Subsumed in Para 2,3

Para 14-17 Subsumed in Para 4

Para 18 Irrelevant

Para 19,20 Subsumed in Para 4,5

Para 21-37 and 39-65 Subsumed in Para 7

Para 38 Para 8

Respondent's Findings Recommended Order

Para 1-4 Subsumed in Para 1,2

Para 5 Irrelevant

Para 6-8 Subsumed in Para 3

Para 9 Subsumed in Para 8

Para 10-40 Subsumed in Para 7

Para 41-43 Irrelevant

Para 44-49 Argument

DONE AND ORDERED this 14th day of January, 1993, in Tallahassee, Leon

County, Florida.

_________________________________

STEPHEN F. DEAN

Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 14th day of January, 1993.

COPIES FURNISHED:

Ted Mack

Cobb, Cole and Bell

131 North Gadsden Street

Tallahassee, Florida 32301

Pamela S. Leslie

Deputy General Counsel

Department of Transportation

605 Suwannee Street, M.S. 58

Tallahassee, Florida 32399-0458

=================================================================

AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CHARLES E. BURKETT AND

ASSOCIATES, INC.,

Petitioner,

CASE NO. 92-0896

vs. DOT CASE NO. 92-0679

DEPARTMENT OF TRANSPORTATION,

Respondent.

_______________________________/

FINAL ORDER

A hearing was held in the ease in Daytona Beach, Florida on July 15, 1992

before Stephen F. Dean, a Hearing Officer with the Division of Administrative

Hearings. The hearing reconvened in Tallahassee, Florida on July 16,1992.

APPEARANCES

For the Petitioner: Theodore E. Mack

Cobb, Cole, and Bell

131 North (Gadsden Street

Tallahassee, Florida 32301

For the Respondent: Pamela S. Leslie, Deputy General Counsel

Pamela A. Arthur, Assistant General Counsel

Department of Transportation

605 Suwannee Street, MS 58

Tallahassee, Florida 32399-0458

STATEMENT OF THE ISSUE

The issue in this case is whether Petitioner has the technical expertise

necessary to make decisions in the critical areas of operation of the business

as required by Florida Administrative Code Rule 14-78.005 (7)(e).

PRELIMINARY MATTERS

The Petitioner, Charles E. Burkett and Associates, Inc., (Burkett) by

application dated July 12, 1991, applied to Respondent, Department of

Transportation, (Department) for certification as a Disadvantaged Business

Enterprise (DBE). On October 1, 1991 the Department informed Burkett that the

Department intended to deny its application for DBE certification. Burkett

filed a petition challenging Fla. Adm. Code Rule 14-78.005 (7)(e) and a

separate petition requesting an administrative hearing on the denial of its

application for DBE certification. The cases were heard on the same day. At

the formal hearing on denial of Burkett's application for DBE status, Burkett

presented the testimony of Carol Burkett, Chief Executive Officer and sole

shareholder of the firm, Curtis Burkett, president of the firm, and Juanita

Moore, Manager of the Department's Contract Administration Office and former

Manager of the Department's Minority Programs Office. Burkett had admitted into

evidence three exhibits. The Department called two witnesses, Juanita Moore and

Tom Kayser, pre- qualification Engineer and member of the DBE Certification

Review Committee for the Department. The Department had admitted into evidence

two exhibits.

Burkett and the Department filed Proposed Recommended Orders and, at the

request of the Hearing Officer, filed supplemental findings. The Hearing

Officer issued a Recommended Order on November 17, 1992. The Department filed

exceptions to the Hearing Officer's Recommended Order. Burkett filed a response

to the Department's exceptions. On January 8, 1992 the Department remanded this

cause to the Division of Administrative Hearings for specific rulings on the

proposed findings initially filed by Burkett and the Department. On January 14,

1993 the Hearing Officer signed the Order Accepting Remand and Ruling on

Proposed Findings, after which the Department filed additional exceptions and

Burkett filed a response thereto.

The record in this proceeding and the Recommended Order have been reviewed.

The exceptions flied by the Department are addressed below. References to the

hearing transcript will be noted by page and line number. (Tr. P. _____, L.

_____)

The Department filed an exception to Finding of Fact No. 6 stating that

there is a lack of competent substantial evidence to the extent that the Finding

does not indicate that the Petitioner's lack of engineering experience or

education was the basis for denying Burkett certification as a DBE. The Hearing

Officer's Finding of Fact No. 6 is supported by competent substantial evidence.

Consequently, the Department's exception thereto is rejected.

The Department filed an exception to specified parts of Finding of Fact No.

7. With respect to the last part of the third sentence in Finding of Fact No.

7, the record reflects that Carol Burkett is involved in the hiring and firing

of all staff. This would, by implication, include the engineering staff. The

Hearing Officer's Finding of Fact No. 7 is supported by competent substantial

evidence and as such may not be disregarded. Accordingly, the Department's

exception to this portion of Finding of Fact No. 7 is rejected. Manasota 88.

Inc. vemor, 545 So.2d 439 (Fla. 2d DCA 1989).

The Department also filed an exception to the seventh sentence of Finding

of Fact No. 7 which states that Carol Burkett is in overall control of the

company, and although she does not make direct assignments of tasks to engineers

and draftsmen, she does oversee their work. The seventh sentence of Finding of

Fact No. 7 must he read in pari materia with Finding of Fact No. 8. The latter

Finding states that the owner does not have any formal engineering training or

experience in technical engineering work. When these Findings are read

together, it is clear that Carol Burkett's overall control of the company

relates to oversight of the work of engineers and draftsmen in a purely

administrative rather than technical sense. Based on the record evidence in

this case, it is obvious that in Finding of Fact No. 7, the Hearing Officer used

the term overall "control" in a generic rather than regulatory sense. As C.E.O.

and sole shareholder, Carol Burkett exercises administrative control of the

company, but clearly, does not have the technical expertise to exercise

operational control of the business within the meaning of the applicable rule.

When read in this manner, Finding of Fact No. 7 is supported by competent

substantial evidence. (Tr. P. 24, L. 17-23; Tr. P. 31, L. 1-13; Tr, P. 34, L.

1-10; Tr. P. 36, L.-4; Tr. P. 38, L. 13-23; Tr. P. 39, L.-3; Tr. P. 50, L. 19-

22; Tr. P. 54, L. 8-11; Tr. P. 67, L. 15-20; Tr. P. 69, L. 14-25; Tr. P. 70, L.

1-2; Tr. P. 76, L. 3-8 and L. 15-25; Tr. P. 77, L. 1-5) Consequently, the

Department's exception thereto is rejected.

The Department also flied an exception to the Hearing Officer's ruling that

paragraphs 41-43 of Respondent's Proposed Recommended Order were irrelevant.

According to Section 90.401, Florida Statutes (1991), relevant evidence is

evidence tending to prove or disprove a material fact. Section 90.402, Florida

Statutes (1991), further provides that all relevant evidence is admissible. The

issue involved in this case is whether a person with no engineering experience

or education has the technical expertise to control the day-to-day operations of

the business as required by Fla. Adm. Code Rule 14-78.005 (7)(e). The Hearing

Officer and opposing counsel accepted Mr. Kayser as an expert in the field of

civil engineering. (Tr. P. 107, L. 19-23). The Hearing Officer acknowledged

that Mr. Kayser's testimony was relevant and thus allowed him to respond to a

question going to the ultimate issue in this case. (Tr. P. 113, L. 8-25; Tr. P.

114, L. 1-25). Although the Hearing Officer has discretion to reject proposed

findings, if they are deemed to be subordinate, cumulative, immaterial, or

unnecessary, it is improper to reject as irrelevant a finding which tends to

prove a material fact. Thus, the Hearing Officer's subsequent ruling that the

particular findings setting forth Mr. Kayser's testimony as irrelevant is

inappropriate. Notwithstanding the Hearing Officer's erroneous ruling with

respect to paragraphs 41-43 of Respondent's Proposed Recommended Order, a

contrary ruling would not alter the decision in this case. Therefore, the

Department's exception is rejected.

FINDINGS OF FACT

The Findings of Fact by the Hearing Officer set forth in the Recommended

Order are considered correct and are incorporated in this Final Order except as

specifically noted above.

CONCLUSIONS OF LAW

Burkett must prove by a preponderance of the evidence that it is entitled

to certification as a Disadvantaged Business Enterprise (DBE) under the

applicable statutes and rules administered by the Department. See e.g., Florida

Department of Transportation vs. J.W.C. Co. Inc., 396 So.2d 778 (Fla. 1st DCA

1981).

The United States Department of Transportation has promulgated 49 CFR Part

23, to implement Federal Surface Transportation and Uniform Relocation

Assistance Act of 1987 (STURAA) and to provide guidelines for state "recipients"

who receive federal highway funds. STURAA Section 106(c)(4), in defining DBEs,

states: "The Secretary shall establish minimum uniform criteria for State

governments to use in certifying whether a concern qualifies for purposes of

this subsection." 1/ This criteria is contained in 49 C.F.R. Part 23.

The Department is the state agency in Florida charged with developing and

implementing DBE program related to highway construction within the state.

Section 339.0805(c), Florida Statutes, requires that the Department certify

small business concerns owned and controlled by socially and economically

disadvantaged individuals as defined by STURAA. (Pub. Law 1OO- 17), 23 U.S.C.

101, et. seq.. The Department is authorized to adopt rules for the conduct of

its business operations and the implementation of any provision of law for which

the Department is responsible. Section 334.004(2), Florida Statutes. Pursuant

to that authority, the Department enacted Fla. Adm. Code Rule 14-78-005(7)(e)8,

as amended 6-24-91, which provides in pertinent part that:

The minority owners shall have managerial and

technical capability, knowledge, training,

education or experience required to make

decisions in the critical areas of operation.

The Department also promulgated Fla. Adm. Code Rule 14-78.005(7)(e)2, as

amended 6-24-91, which provides the following:

In assessing the power of the minority owner

to direct or cause the direction of the firm,

the Department will look past stock ownership

and consider the minority applicant's

ownership interest, knowledge of the

particular business, background, involvement

in the business on a day-to-day basis,

expertise, involvement by-the non-minority

owners, employees or non-employees, other full

or part-time employment by the minority

applicant and the size of the applicant's

business.

Fla. Adm. Code, Rule 14-78.005 (7)(e)9, provides that minority owners

shall display independence and initiative in seeking, and negotiating contracts,

accepting and rejecting bids and in conducting all major aspects of the

business; and in those instances in which the minority owners do not directly

negotiate contracts, but claim to approve or reject bids and agreement, the

minority owners shall demonstrate that they have the knowledge and expertise to

independently make contractual decisions.

The federal and state statutes and regulations governing the DBE program

use similar language. In such instances, the state statute will take the same

construction in the courts of Florida as its prototype has been given in federal

courts so long as such construction is harmonious with the spirit and policy of

Florida's statutes. Gentele v. Department of Professional Regulation, 513 So.2d

672, 673 (Fla. 1st DCA, 1987).

An examination of applicable federal regulations and state rules reflects

that the language is almost identical. For example, Fla. Adm. Code Rule 14-

78.002(3) defines a DBE exactly as that term is defined in 49 C.F.R.  2 3 . 6 2 ,

i.e., as a small business concern: (a) "[w]hich is at least fifty one percent

(51%) owned by one or more socially and economically disadvantaged individuals;

and, (b) [w]hose management and daily business operations are controlled by one

or more of the socially and economically disadvantaged individuals who own it."

(Emphasis added). Thus, DBE status is not merely a mater of ownership; it is

equally a matter of control, which is a separate and distinct issue. Ownership

without control will disqualify a firm from obtaining DBE certification.

There are other instances of similar language in federal regulations and

state rules. Another such example is 49 CFR s e d i v o r p h c i h w ) 2 ( ) a ( 3 5 . 3 2  i n

pertinent part the following:

An eligible minority business enterprise under

this part shall be an independent business.

The ownership and control by minorities or

women shall be real, substantial, and

continuing and shall go beyond the pro forma

ownership of the firm as reflected in its

ownership documents....

Fla. Adm. Code Rule 14-78.005(7)(c)1 closely tracks this language.

The USDOT has interpreted this language to mean that the owner's control

must be "real, substantial and continuing" as "imputing some technical knowledge

to the owner." Car-Mar Construction Corporation vs. Skinner, 777 F. Supp. 50,

55 (D.D.C 1991).

Furthermore, 49 CFR s i n p e r t i n e n t p a r e t d v  2 3 . 5 3 ( a ) ( 3 ) p r o i :

The minority or women owners shall also

possess the power to direct or cause the

direction of the management and policies of

the firm and to make the day-to-day as well

as major decisions on matters of management,

policy, and operations....

Again, this language closely tracks the language Fla. Admin. Code Rule

1478.005(7)(e).

This provision has been interpreted by the USDOT as requiring the female

owner to "possess the power" to control the firm and "requiring the female owner

to possess the attributes and skills necessary to exercise control over the

business... ." Lane and Clark Mechanical Contractors Inc. v. Burnley, No. 88-

4524, 1990 WL 50509, 6 (E.D. Pa. April 19, 1990). Without some technical

expertise in the delivery of the principle activity of the firm's operations,

the minority owner would be unable to control the day-to-day as well as major

decisions on matters of management, policy and operations, as required by 49 CFR

 23.53(a)(3). Car-Mar citing Whitworth-Borta. Inc. v. Burnley, No. G87-176

slip op. at 7, 1988 WL 242625 (E.D. Mich. June 28, 1988)(Bell, R.,J.). Rather,

without such expertise the minority owner would be "wholly reliant upon the

expertise and judgment of [non-minorities] for the supervision, development and

submission of the firm's product." Whitworth-Borta, Inc., supra at 7. Such an

owner would also be "unable to judge the competence of her employees and would

be unable to gauge the viability of projects." Car-Mar, 777 F. Supp. 50, at 55.

The USDOT has clearly established that administrative and managerial

expertise will not act as a substitute for technical expertise. Whitworth-Borta

Inc., supra. at 7. The USDOT's determination that an owner lacked sufficient

technical expertise to control the day-to-day operations has been upheld. Car-

Mar citing Lane and Clark, 777 F. Supp. at 55. The court further found that the

USDOT interpretation "reflects the realistic assessment that, in a technical

field a qualified manager will necessarily possess certain specialized knowledge

of the field."

In further defining this concept of "control," the USDOT has required the

minority owner to have expertise in the critical operations of the firm's

business and to independently make the basic decisions in daily operations. For

the agency to require some technical knowledge is not inconsistent with the

applicable regulations. Id. at 55. The level of "expertise" required must be

such that the minority owner, although not required to personally perform each

and every function of the firm, be able to critically evaluate and independently

utilize information supplied to her by subordinates. Reflective of this

position, the USDOT has stated that:

... owners can - and often, they must - rely

on the judgments of managers and other staff

members.... What is important, however, is

that the owners have sufficient background and

expertise at the present time with respect to

delegated aspects of the business to be able

to intelligently use and critically evaluate

information prescribed by managers and other

staff members in making decisions concerning

the daily operational activities of the

business.

As in this case even where the qualifying minority is the 100% owner of the

firm, certification will be denied if the necessary technical expertise is held

by a non-minority. Id. at 55 and 56.

It is obvious from the foregoing that the USDOT has differentiated

"control" from "ownership," both of which under 49 CFR  2 3 ( a ) ( 2 ) m u s t b e

"real, substantial, and continuing and go beyond pro forma ownership." Thus, one

can have "real" ownership, as Mrs. Burkett does, without having "real" control,

especially in terms of day-to-day decision making. The USDOT also distinguishes

between the type of overall control that accompanies 100% ownership, such as

replacing personnel at will, setting overall policy for the firm, and having

final veto power on decisions, on the one hand, and making basic decisions

regarding daily operations affecting the output of the primary product, on the

other. The USDOT requires both types of control and the latter can only be

exercised if the owner has enough knowledge to independently make decisions even

where such decisions are reached through critically evaluating and independently

utilizing recommendations from subordinates. Without such knowledge, the owner

would be in the position of "rubber stamping" decisions of subordinates; these

subordinates would be exercising the real day-to-day decision-making control in

the delivery of the firm's primary product.

The USDOT's interpretation that 49 CFR r e n w o e h t s e r i u t q r ) 3 ( ) a ( 3 5 . 3 2  e o

have technical expertise has been held to be reasonable and reflective of a

common sense approach to firms operating in technical fields". Whitworth-Borta,

Inc., supra at 7.

The Department has interpreted Fla. Adm. Code Rule 14-78.005 (7)(e) 2, 8,

and 9 to require that the owner of a business operating in a technical field

have a requisite level of technical expertise to control the day-to-day and

major decisions of the firm. The Department interprets its rules to require the

owner of a business applying for DBE certification to possess the expertise in

the technical operations of the business as well as in the

administrative/managerial function typically associated with ownership. This

interpretation is consistent with the interpretation given to similar federal

regulations by the USDOT.

The United States Supreme Court has stated:

When faced with a problem of statutory

construction, [a] Court shows great deference

to the interpretation given the statute by the

officers or agency charged with its

administration....When the construction of an

administrative regulation rather than a

statute is in issue, deference is even more

clearly in order.... [T]he ultimate criterion

is the administrative interpretation, which

becomes of controlling weight unless it is

plainly erroneous or inconsistent with the

regulation. Bowles v. Seminole Rock Co., 325

U.S. 410, 413-414....

Udall v. Taliman, 380 U.S. 1, 16-17 (1965)(Emphasis added). See also Chevron

U.S.A. v. Natural Res. Def. Council, 467 U.S. 837, 81 L.Fd.2d 694, 104 S.Ct.

2778. Under Udall, the interpretation of the USDOT is controlting.

In this instant case, the Department has interpreted its rules in a manner

that is consistent with the construction given to similar federal regulations by

the USDOT and upheld by federal district courts. Such an interpretation by the

Department is reasonable given the similarity of the federal and state

regulations. Gentele, 513 So.2d at 673. Also, the Department's interpretation

of the applicable DBE rules is supported by Fla. Adm. Rule 14-78.005(9) which

provides that "[d]ecision-making rationale as well as specific U.S. Department

of Transportation denials will be considered by the Department in its

certification and recertification process." As the agency charged with

establishing a DBE program and promulgating rules pursuant to implement the

program, the Department's interpretation of its rules is entitled to great

weight and should not be overturned unless clearly erroneous or unreasonable.

49 Fla. Jur.2d Statutes  1 6 3

Burkett does not have the expertise, technical capability, knowledge,

training, education or experience in the firm's critical area of operation.

Based on the Department's interpretation of the applicable rules, Burkett does

not meet the eligibility requirements for certification as a DBR.

WHEREFORE, based on the foregoing Findings of Fact and Conclusions of Law

and a full review of the record, it is

ORDERED that Burkett's petition for certification as a Disadvantaged

Business Enterprise is hereby denied.

DONE and ORDERED this 15th day of March, 1993.

____________________________________

BEN G. WATTS, P.E.

Secretary

Florida Department of Transportation

605 Suwannee Street

Tallahassee, Florida 32399

ENDNOTE

1/ Section 2 of STURAA defines "Secretary" as the Secretary of Transportation.

Copies furnished:

Pamela S. Leslie

Pamela Arthur

Florida Department of Transportation

605 Suwannee Street, M.S. 58

Tallahassee, Florida 32399-0458

Thcodore E. Mack

Cobb, Cole, and Bell

131 North Gadsden Street

Tallahassee, Florida 32301

Stephen F. Dean

Division of Administrative Hearings

1230 Apa1achee Parkway

The DeSoto Building

Tallahassee, Florida 32399-1550

NOTICE OF RIGHT TO APPEAL

THIS ORDER CONSTITUTES FINAL AGENCY ACTION AND MAY BE APPEALED BY

PETITIONER PURSUANT TO SECTION 120.68, FLORIDA STATUTES, AND RULE 9.110, FLORIDA

RULES OF APPELLATE PROCEDURE, BY FILING A NOTICE OF APPEAL CONFORMING TO THE

REQUIREMENTS OF RULE 9.110(D), FLORIDA RULES OF APPELLATE PROCEDURE, BOTH WITH

THE APPROPRIATE DISTRICT COURT OF APPEAL, ACCOMPANIED BY THE APPROPRIATE FILING

FEE, AND WITH THE DEPARTMENT'S CLERK OF AGENCY PROCEEDINGS, HAYDON BURNS

BUILDING, 605 SUWANNEE STREET, M.S. 58, TALLALLASSEE, FLORIDA 32399-0458, WITHIN

THIRTY (30) DAYS OF RENDITION OF THIS ORDER.

=================================================================

AMENDED AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CHARLES E. BURKETT AND

ASSOCIATES, INC.,

Petitioner,

CASE NO. 92-0896

vs. DOT CASE NO. 92-0679

DEPARTMENT OF TRANSPORTATION,

Respondent.

________________________________/

AMENDED FINAL ORDER

The Final Order in the above referenced matter was filed on March 15, 1993.

Due to a scrivener's error, the Final Order inadvertently stated the Division of

Administrative Hearings was the agency issuing the Final Order. Accordingly,

the Final Order is being amended to correctly identify the Department of

Transportation as the agency issuing the Final Order.

A hearing was held in the case in Daytona Beach, Florida on July 15, 1992

before Stephen F. Dean, a Hearing Officer with the Division of Administrative

Hearings. The hearing reconvened in Tallahassee, Florida on July 16, 1992.

APPEARANCES

For the Petitioner: Theodore E. Mack

Cobb, Cole, and Bell

131 North Gadsden Street

Tallahassee, Florida 32301

For the Respondent: Pamela S. Leslie

Deputy General Counsel

Pamela A. Arthur

Assistant General Counsel

Department of Transportation

605 Suwannee Street, MS 58

Tallahassee, Florida 32399-0458

STATEMENT OF THE ISSUE

The issue in this case is whether Petitioner has the technical expertise

necessary to make decisions in the critical areas of operation of the business

as required by Florida Administrative Code Rule 14-78.005 (7)(e).

PRELIMINARY MATTERS

The Petitioner, Charles E. Burkett and Associates, Inc., (Burkett) by

application dated July 12, 1991, applied to Respondent, Department of

Transportation, (Department) for certification as a Disadvantaged Business

Enterprise (DBE). On October 1, 1991 the Department informed Burkett that the

Department intended to deny its application for DBE certification. Burkett

flied a petition challenging Fla. Adm. Code Rule 14-78.005 (7)(e) and a separate

petition requesting an administrative hearing on the denial of its application

for DBE certification. The cases were heard on the same day. At the formal

hearing on denial of Burkett's application for DBE status, Burkett presented the

testimony of Carol Burkett, Chief Executive Officer and sole shareholder of the

firm, Curtis Burkett, president of the firm, and Juanita Moore, Manager of the

Department's Contract Administration Office and former Manager of the

Department's Minority Programs Office. Burkett had admitted into evidence three

exhibits. The Department called two witnesses, Juanita Moore and Tom Kayser,

prequalification Engineer and member of the DBE Certification Review Committee

for the Department. The Department had admitted into evidence two exhibits.

Burkett and the Department filed Proposed Recommended Orders and, at the

request of the Hearing Officer, filed supplemental findings. The Hearing

Officer issued a Recommended Order on November 17, 1992. The Department filed

exceptions to the Hearing Officer's Recommended Order. Burkett filed a response

to the Department's exceptions. On January 8, 1992 the Department remanded this

cause to the Division of Administrative Hearings for specific rulings on the

proposed findings initially filed by Burkett and the Department. On January 14,

1993 the Hearing Officer signed the Order Accepting Remand and Ruling on

Proposed Findings, after which the Department filed additional exceptions and

Burkett filed a response thereto.

The record in this proceeding and the Recommended Order have been reviewed.

The exceptions filed by the Department are addressed below. References to the

hearing transcript will be noted by page and line number. (Tr. P. _____, L.

_____)

The Department filed an exception to Finding of Fact No. 6 stating that

there is a lack of competent substantial evidence to the extent that the Finding

does not indicate that the Petitioner's lack of engineering experience or

education was the basis for denying Burkett certification as a DBE. The Hearing

Officer's Finding of Fact No. 6 is supported by competent substantial evidence.

Consequently, the Department's exception thereto is rejected.

The Department filed an exception to specified parts of Finding of Fact No.

7. With respect to the last part of the third sentence in Finding of Fact No.

7, the record reflects that Carol Burkett is involved in the hiring and firing

of all staff. This would, by implication, include the engineering staff. The

Hearing Officer's Finding of Fact No. 7 is supported by competent substantial

evidence and as such may not be disregarded. Accordingly, the Department's

exception to this portion of Finding of Fact No. 7 is rejected. Manasota 88.

Inc. vemor, 545 So.2d 439 (Fla. 2d DCA 1989).

The Department also filed an exception to the seventh sentence of Finding

of Fact No. 7 which states that Carol Burkett is in overall control of the

company, and although she does not make direct assignments of tasks to engineers

and draftsmen, she does oversee their work. The seventh sentence of Finding of

Fact No. 7 must be read in pari materia with Finding of Fact No. 8. The latter

Finding states that the owner does not have any formal engineering training or

experience in technical engineering work. When these Findings are read

together, it is clear that Carol Burkett's overall control of the company

relates to oversight of the work of engineers and draftsmen in a purely

administrative rather than technical sense. Based on the record evidence in

this case, it is obvious that in Finding of Fact No. 7, the Hearing Officer used

the term overall "control" in a generic rather than regulatory sense. As C.E.O.

and sole shareholder, Carol Burkett exercises administrative control of the

company, but clearly, does not have the technical expertise to exercise

operational control of the business within the meaning of the applicable rule.

When read in this manner, Finding of Fact No. 7 is supported by competent

substantial evidence. (Tr. P. 24, L. 17-23; Tr. P. 31, L. 1-13; Tr, P. 34, L.

1-10; Tr. P. 36, L.-4; Tr. P. 38, L. 13-23; Tr. P. 39, L.-3; Tr. P. 50, L. 19-

22; Tr. P. 54, L. 8-11; Tr. P. 67, L. 15-20; Tr. P. 69, L. 14-25; Tr. P. 70, L.

1-2; Tr. P. 76, L. 3-8 and L. 15-25; Tr. P. 77, L. 1-5) Consequently, the

Department's exception thereto is rejected.

The Department also filed an exception to the Hearing Officer's ruling that

paragraphs 41-43 of Respondent's Proposed Recommended Order were irrelevant.

According to Section 90.401, Florida Statutes (1991), relevant evidence is

evidence tending to prove or disprove a material fact. Section 90.402, Florida

Statutes (1991), further provides that all relevant evidence is admissible. The

issue involved in this case is whether a person with no engineering experience

or education has the technical expertise to control the day-to-day operations of

the business as required by Fla. Adm. Code Rule 14-78.005 (7)(e). The Hearing

Officer and opposing counsel accepted Mr. Kayser as an expert in the field of

civil engineering. (Tr. P. 107, L. 19-23). The Hearing Officer acknowledged

that Mr. Kayser's testimony was relevant and thus allowed him to respond to a

question going to the ultimate issue in this case. (Tr. P. 113, L. 8-25; Tr. P.

114, L. 1-25). Although the Hearing Officer has discretion to reject proposed

findings, if they are deemed to be subordinate, cumulative, immaterial, or

unnecessary, it is improper to reject as irrelevant a finding which tends to

prove a material fact. Thus, the Hearing Officer's subsequent ruling that the

particular findings setting forth Mr. Kayser's testimony as irrelevant is

inappropriate. Notwithstanding the Hearing Officer's erroneous ruling with

respect to paragraphs 41-43 of Respondent's Proposed Recommended Order, a

contrary ruling would not alter the decision in this case. Therefore, the

Department's exception is rejected.

FINDINGS OF FACT

The Findings of Fact by the Hearing Officer set forth in the Recommended

Order are considered correct and are incorporated in this Final Order except as

specifically noted above.

CONCLUSIONS OF LAW

Burkett must prove by a preponderance of the evidence that it is entitled

to certification as a Disadvantaged Business Enterprise (DBE) under the

applicable statutes and rules administered by the Department. See e.g., Florida

Department of Transportation vs. J.W.C. Co. Inc., 396 So.2d 778 (Fla. 1st DCA

1981).

The United States Department of Transportation has promulgated 49 CFR Part

23, to implement Federal Surface Transportation and Uniform Relocation

Assistance Act of 1987 (STURAA) and to provide guidelines for state "recipients'

who receive federal highway funds. STURAA Section 106(c)(4), in defining DBEs,

states: "The Secretary shall establish minimum uniform criteria for State

governments to use in certifying whether a concern qualifies for purposes of

this subsection. 1/ This criteria is contained in 49 C.F.R. Part 23.

The Department is the state agency in Florida charged with developing and

implementing DBE program related to highway construction within the state.

Section 339.0805(c), Florida Statutes, requires that the Department certify

small business concerns owned and controlled by socially and economically

disadvantaged individuals as defined by STURAA. (Pub. Law 100- 17), 23 U.S.C.

101, et. seq.. The Department is authorized to adopt rules for the conduct of

its business operations and the implementation of any provision of law for which

the Department is responsible. Section 334.004(2), Florida Statutes. Pursuant

to that authority, the Department enacted Fla. Adm. Code Rule 14-78-005(7)(e)8,

as amended 6-24-91, which provides in pertinent part that:

The minority owners shall have managerial and

technical capability, knowledge, training,

education or experience required to make

decisions in the critical areas of operation.

The Department also promulgated Fla. Adm. Code Rule 14-78.005(7)(e)2, as

amended 6-24-91, which provides the following:

In assessing the power of the minority owner

to direct or cause the direction of the firm,

the Department will look past stock ownership

and consider the minority applicant's

ownership interest, knowledge of the

particular business, background, involvement

in the business on a day-to-day basis,

expertise, involvement by the non-minority

owners, employees or non-employees, other full

or part-time employment by the minority

applicant and the size of the applicant's

business.

Fla. Adm. Code, Rule 14-78.005 (7)(e)9, provides that minority owners shall

display independence and initiative in seeking, and negotiating contracts,

accepting and rejecting bids and in conducting all major aspects of the

business; and in those instances in which the minority owners do not directly

negotiate contracts, but claim to approve or reject bids and agreement, the

minority owners shall demonstrate that they have the knowledge and expertise to

independently make contractual decisions.

The federal and state statutes and regulations governing the DBE program

use similar language. In such instances, the state statute will take the same

construction in the courts of Florida as its prototype has been given in federal

courts so long as such construction is harmonious with the spirit and policy of

Florida's statutes. Gentele v. Department of Professional Regulation, 513 So.2d

672, 673 (Fla. 1st DCA, 1987).

An examination of applicable federal regulations and state rules reflects

that the language is almost identical. For example, Fla. Adm. Code Rule 14-

78.002(3) defines a DBE exactly as that term is defined in 49 C.F.R.  2 3 . 6 2 ,

i.e., as a small business concern: (a) [w]hich is at least fifty one percent

(51 percent) owned by one or more socially and economically disadvantaged

individuals; and, (b) [w]hose management and daily business operations are

controlled by one or more of the socially and economically disadvantaged

individuals who own it." (Emphasis added). Thus, DBE status is not merely a

matter of ownership; it is equally a matter of control, which is a separate and

distinct issue. Ownership without control will disqualify a firm from obtaining

DBE certification.

There are other instances of similar language in federal regulations and

state rules. Another such example is 49 CFR s e d i v o r p h c i h w ) 2 ( ) a ( 3 5 . 3 2  i n

pertinent part the following:

An eligible minority business enterprise under

this part shall be an independent business.

The ownership and control by minorities or

women shall be real, substantial, and

continuing and shall go beyond the pro forma

ownership of the firm as reflected in its

ownership documents....

Fla. Adm. Code Rule 14-78.005(7)(c)1 closely tracks this language.

The USDOT has interpreted this language to mean that the owner's control

must be "real, substantial and continuing" as "imputing some technical knowledge

to the owner." Car-Mar Construction Corporation vs. Skinner, 777 F. Supp. 50, 55

(D.D.C 1991).

Furthermore, 49 CFR s i n p e r t i n e n t p a r e t d v  2 3 . 5 3 ( a ) ( 3 ) p r o i :

The minority or women owners shall also

possess the power to direct or cause the

direction of the management and policies of

the firm and to make the day-to-day as well

as major decisions on matters of management,

policy, and operations....

Again, this language closely tracks the language Fla. Admin. Code Rule 14-

78.005(7)(e).

This provision has been interpreted by the USDOT as requiring the female

owner to "possess the power" to control the firm and "requiring the female owner

to possess the attributes and skills necessary to exercise control over the

business... ." Lane and Clark Mechanical Contractors. Inc. v. Burnley, No. 88-

4524, 1990 WL 50509, 6 (E.D. Pa. April 19, 1990). Without some technical

expertise in the delivery of the principle activity of the firm's operations,

the minority owner would be unable to control the day-to-day as well as major

decisions on matters of management, policy and operations, as required by 49 CFR

 23.53(a)(3). Car-Mar citing Whitworth-Borta. Inc. v. Burnley, No. G87-176

slip op. at 7, 1988 WL 242625 (E.D. Mich. June 28, 1988)(Bell, R.,J.). Rather,

without such expertise the minority owner would be "wholly reliant upon the

expertise and judgment of [non-minorities] for the supervision, development and

submission of the firm's product." Whitworth-Borta, Inc., & supra at 7. Such

an owner would also be "unable to judge the competence of her employees and

would be unable to gauge the viability of projects." Car-Mar, 777 F. Supp. 50,

at 55.

The US DOT has clearly established that administrative and managerial

expertise will not act as a substitute for technical expertise. Whitworth-

Borta. Inc., supra. at 7. The USDOT's determination that an owner lacked

sufficient technical expertise to control the day-to-day operations has been

upheld. Car-Mar citing Lane and Clark, 777 F. Supp. at 55. The court further

found that the USDOT interpretation "reflects the realistic assessment that, in

a technical field a qualified manager will necessarily possess certain

specialized knowledge of the field."

In further defining this concept of "control," the USDOT has required the

minority owner to have expertise in the critical operations of the firm's

business and to independently make the basic decisions in daily operations. For

the agency to require some technical knowledge is not inconsistent with the

applicable regulations. Id. at 55. The level of "expertise" required must be

such that the minority owner, although not required to personally perform each

and every function of the firm, be able to critically evaluate and independently

utilize information supplied to her by subordinates. Reflective of this

position, the USDOT has stated that:

...owners can - and often, they must - rely

on the judgments of managers and other staff

members.... What is important, however, is

that the owners have sufficient background

and expertise at the present time with respect

to delegated aspects of the business to be

able to intelligently use and critically

evaluate information prescribed by managers

and other staff members in making decisions

concerning the daily operational activities

of the business.

As in this case even where the qualifying minority is the 100 percent owner of

the firm, certification will be denied if the necessary technical expertise is

held by a non-minority. Id. at 55 and 56.

It is obvious from the foregoing that the USDOT has differentiated

"control" from "ownership," both of which under 49 CFR  2 3 ( a ) ( 2 ) m u s t b e

"real, substantial, and continuing and go beyond pro forma ownership." Thus,

one can have "real" ownership, as Mrs. Burkett does, without having "real"

control, especially in terms of day-to-day decision making. The USDOT also

distinguishes between the type of overall control that accompanies 100 percent

ownership, such as replacing personnel at will, setting overall policy for the

firm, and having final veto power on decisions, on the one hand, and making

basic decisions regarding daily operations affecting the output of the primary

product, on the other. The USDOT requires both types of control and the latter

can only be exercised if the owner has enough knowledge to independently make

decisions even where such decisions are reached through critically evaluating

and independently utilizing recommendations from subordinates. Without such

knowledge, the owner would be in the position of "rubber stamping" decisions of

subordinates; these subordinates would be exercising the real day-to-day

decision-making control in the delivery of the firm's primary product.

The USDOT's interpretation that 49 CFR r e n w o e h t s e r i u t q r ) 3 ( ) a ( 3 5 . 3 2  e o

have technical expertise has been held to be reasonable and reflective of a

"common sense approach to firms operating in technical fields". Whitworth-

Borta. Inc., supra at 7.

The Department has interpreted Fla. Adm. Code Rule 14-78.005 (7)(e)2, 8,

and 9 to require that the owner of a business operating in a technical field

have a requisite level of technical expertise to control the day-to-day and

major decisions of the firm. The Department interprets its rules to require the

owner of a business applying for DBE certification to possess the expertise in

the technical operations of the business as well as in the

administrative/managerial function typically associated with ownership. This

interpretation is consistent with the interpretation given to similar federal

regulations by the USDOT.

The United States Supreme Court has stated:

When faced with a problem of statutory

construction, [a] Court shows great deference

to the interpretation given the statute by

the officers or agency charged with its

administration...When the construction of an

administrative regulation rather than a

statute is in issue, deference is even more

clearly in order... . [T]he ultimate

criterion is the administrative

interpretation, which becomes of controlling

weight unless it is plainly erroneous or

inconsistent with the regulation. Bowles v.

Seminole Rock Co., 325 U.S. 410, 413-414....

Udall v. Tallman, 380 U.S. 1, 16-17 (1965)(Emphasis added). See also Chevron

U.S.A. v. Natural Res. Def. Council, 467 U.S. 837, 81 L.Ed.2d 694, 104 S.Ct.

2778. Under Udall, the interpretation of the USDOT is controlling.

In this instant case, the Department has interpreted its rules in a manner

that is consistent with the construction given to similar federal regulations by

the USDOT and upheld by federal district courts. Such an interpretation by the

Department is reasonable given the similarity of the federal and state

regulations. Gentele, 513 So.2d at 673. Also, the Department's interpretation

of the applicable DBE rules is supported by Fla. Adm. Rule 14-78.005(9) which

provides that "[d]ecision-making rationale as well as specific U.S. Department

of Transportation denials will be considered by the Department in its

certification and recertification process." As the agency charged with

establishing a DBE program and promulgating rules pursuant to implement the

program, the Department's interpretation of its rules is entitled to great

weight and should not be overturned unless clearly erroneous or unreasonable.

49 Fla. Jur.2d Statutes  1 6 3 .

Burkett does not have the expertise, technical capability, knowledge,

training, education or experience in the firm's critical area of operation.

Based on the Department's interpretation of the applicable rules, Burkett does

not meet the eligibility requirements for certification as a DBE.

WHEREFORE, based on the foregoing Findings of Fact and Conclusions of Law

and a full review of the record, it is

ORDERED that Burkett's petition for certification as a Disadvantaged

Business Enterprise is hereby denied.

DONE and ORDERED this 8th day of April, 1993.

____________________________________

BEN G. WATTS, P.E.

Secretary

Florida Department of Transportation

605 Suwannee Street

Tallahassee, Florida 32399

ENDNOTE

1/ Section 2 of STURAA defines "Secretary" as the Secretary of Transportation.

COPIES FURNISHED:

Pamela S. Leslie

Pamela Arthur

Florida Department of Transportation

605 Suwannee Street, M.S. 58

Tallahassee, Florida 32399-0458

Theodore E. Mack

Cobb, Cole, and Bell

131 North Gadsden Street

Tallahassee, Florida 32301

Stephen F. Dean

Division of Administrative Hearings

1230 Apalachee Parkway

The DeSoto Building

Tallahassee, Florida 32399-1550

NOTICE OF RIGHT TO APPEAL

THIS ORDER CONSTITUTES FINAL AGENCY ACTION AND MAY BE APPEALED BY PETITIONER

PURSUANT TO SECTION 120.68, FLORIDA STATUTES, AND RULE 9.110, FLORIDA RULES OF

APPELLATE PROCEDURE, BY FILING A NOTICE OF APPEAL CONFORMING TO THE REQUIREMENTS

OF RULE 9.110(D), FLORIDA RULES OF APPELLATE PROCEDURE, BOTH WITH THE

APPROPRIATE DISTRICT COURT OF APPEAL, ACCOMPANIED BY THE APPROPRIATE FILING FEE,

AND WITH THE DEPARTMENT'S CLERK OF AGENCY PROCEEDINGS, HAYDON BURNS BUILDING,

605 SUWANNEE STREET, M.S. 58, TALLAHASSEE, FLORIDA 32399-0458, WITHIN THIRTY

(30) DAYS OF RENDITION OF THIS ORDER.