943 F.Supp. 1546 (S.D.Fla. 1996), 94-1848, Engineering Contractors Ass'n of South Florida, Inc. v. Metropolitan Dade County

Docket Nº:94-1848-CIV-RYSKAMP.
Citation:943 F.Supp. 1546
Case Date:September 17, 1996
Court:United States District Courts, 11th Circuit, Southern District of Florida

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943 F.Supp. 1546 (S.D.Fla. 1996)




No. 94-1848-CIV-RYSKAMP.

United States District Court, S.D. Florida.

Sept. 17, 1996

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Charles S. Caulkins, Fisher & Phillips, Fort Lauderdale, FL, for Plaintiffs.

Robert A. Cuevas, Dade County Attorney's Office, Miami, FL, for County Defendants.

Don L. Horn, Shutts & Bowen, Miami, FL, Karen L. Stetson, Gallway, Gillman, Curtis, Vento & Horn, Miami, FL, for Intervenor-Defendant Black Business Association.

Thomas F. Pepe, Pepe & Nemire, Coral Gables, FL, for Intervenor-Defendant Allied Contractor's Association.


RYSKAMP, District Judge.


Plaintiffs are six trade associations whose members regularly perform work, either as prime contractors or subcontractors, on construction contracts awarded by Dade County, Florida. Named defendants include Dade County, Florida, its County Commissioners and the County Manager. Three parties have intervened on behalf of the defendants: the Black Business Association; the Allied Minority Contractors' Association; and the Miami branch of the National Association for

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the Advancement of Colored People (NAACP).

Plaintiffs are challenging Dade County's Black, Hispanic, and Women Business Enterprise Programs, 1 which provide for the use of race, ethnicity, 2 and gender-conscious measures in awarding County construction contracts, as unconstitutional under the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution. Plaintiffs do not contest the manner in which the MWBE programs are administered. The Court will therefore limit its review to the programs' facial validity. Further, because plaintiffs attack the programs only with regard to construction contracting, and each program's enabling legislation contains a severability clause, the Order solely addresses the construction aspects of the program. Plaintiffs request a declaratory ruling from this Court that Dade County's MBE and WBE programs are unconstitutional and seek an injunction to prevent the County from continuing to utilize race, ethnic, and gender-conscious measures in awarding County construction contracts. A four day non-jury trial was held in this matter between December 11 and December 28, 1995, with closing arguments heard on April 11, 1996. Based on the evidence admitted at trial, and the Court's findings of fact and conclusions of law as set forth below, the Court finds that Dade County Ordinances 94-94, 94-95, and 94-96 violate the Equal Protection Clause of the U.S. Constitution. Dade County will be permanently enjoined from enforcing the race, ethnicity, and gender-conscious contract measures, as they pertain to construction projects only, contained in the aforementioned Ordinances.


Dade County first adopted a Black Business Program in 1982, by Ordinance 82-67. That program was challenged as unconstitutional by non-minority contractors. See, South Florida Chapter of Associated General Contractors of America, Inc., et al, v. Metropolitan Dade County, 552 F.Supp. 909 (S.D.FlA. 1982). Under a strict scrutiny standard of review, the District Court found the "set-aside" portion of the program unconstitutional, but upheld the "goals" portion of the program. 3 In South Florida Chapter of Associated General Contractors of America, Inc., et al, v. Metropolitan Dade County, 723 F.2d 846 (11th Cir. 1984), cert. denied, 469 U.S. 871, 105 S.Ct. 220, 83 L.Ed.2d 150 (1984), the Eleventh Circuit Court of Appeals upheld the program in its entirety. Though the district court had applied a strict scrutiny standard to review the County's BBE program, the Court of Appeals reviewed the program under an analytical approach it described as "most closely akin to that set out in Chief Justice Burger's opinion in Fullilove. " 4 South Fla. Chap., 723 F.2d at 852.

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Under the " Fullilove " standard, the Court of Appeals found the County's entire BBE program constitutional.

Since 1982, the Dade Board of County Commissioners amended the BBE program in 1984 (Ordinance 84-67), in 1992 (Ordinance 92-45), and most recently in 1994 (Ordinance 94-96). Defs' Ex. U.1. In 1994 the County adopted the Women and Hispanic Business Enterprise programs for the first time. (Ordinances 94-94 and 94-95, respectively). Id., U.2 & U.3. Because of their substantial similarity, the MBE and WBE programs will be described as one. 5

To participate in the MWBE programs, a business must demonstrate that it does not exceed the size limits for "small business concerns" as defined by the Small Business Administration of the U.S. Department of Commerce. 6 To qualify as an MBE or a WBE the business must be owned and controlled by one or more Black individuals, Hispanic individuals, or females and must have an actual place of business in Dade County. To qualify as a joint venture, one member must be a certified MBE or WBE.

The MWBE programs apply to certain classes of County contracts for which "participation goals" have been set. For example, the County has designated Standard Industry Classification (SIC) 15, 16, and 17 for participation goals of 15% for BBEs, 19% for HBEs, and 11% for WBEs. 7 All construction contracts in excess of $25,000 funded in whole or in part by the County are covered. The County must make every reasonable effort to meet the participation goals, and may use any of the following five "contract measures" to award contracts to MWBEs in an effort to meet the participation goals.

1) Set-asides--A particular contract is set aside for competition solely among one or more MWBEs. The County may waive competitive bidding on a contract, thereby "setting it aside," if there are at least three MWBE businesses available to perform the contract requirements. 8

2) Subcontractor goals--A prime contractor is required to subcontract a certain percentage of work to MWBEs. The percentage is determined on a case-by-case basis depending upon the type of subcontracting opportunities available in a particular contract and upon the availability of MWBE subcontractors to perform the work. A waiver is available to prime contractors which can demonstrate that MWBEs are not available to provide the required goods or services at a competitive price. Inability of an MWBE to obtain bonding is not considered grounds for a waiver.

3) Project goals--Similar to subcontractor goals except the County creates a pool of MWBE subcontractors from which the County selects subcontractors for specified types of work under a County contract.

4) Bid preference--An MWBE bid price can be reduced by as much as ten percent when comparing that bid against other

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bids to determine which is the lowest bid. 9 Bid preferences are given to MWBEs, joint ventures between non-minority contractors and MWBEs, and to contractors demonstrating significant utilization of MWBEs in purchasing goods and services in Dade County.

5) Selection factors--Similar to a bid preference except that selection factors are used only in bids where price is one of several selection factors, such as in requests for proposals. A selection factor affords an MWBE an advantage when their proposal is evaluated. 10

Once a contract is identified as being covered by a participation goal, it is submitted to a review committee to determine whether a contract measure should be applied. The County Commission makes the final determination concerning whether a contract measure will be applied to a contract. The decision to apply a contract measure or to award a contract under the MWBE program can be appealed to the County Manager. The County Manager's determination of the appeal is final unless the County Commission elects, at its discretion, to review the County Manager's decision.

Finally, the MWBE programs are reviewed annually by the County Commission for their efficacy. In addition, within one year of publication of the "Survey of Minority-Owned Business Enterprises" ("SMOBE"--published once every five years) by the Census Bureau, the County Commission must determine whether to continue the race, ethnic, and gender-conscious measures authorized by the Ordinances.

Several non-minority contractors filed a second suit against Dade County in 1990. Capeletti Brothers, Inc., et al v. Metropolitan Dade County, 90-0678 (S.D.FlA. 1990). These plaintiffs also challenged the constitutionality of the BBE program, specifically questioning whether defendants had a strong basis in evidence for the conclusion that Black contractors have suffered discrimination in the local construction industry, and whether the program was narrowly tailored. This Court held a three day bench trial in July, 1992. In August, 1992, the parties reached a settlement and stipulated to a dismissal with prejudice, before the Court rendered a final judgment.

The present case was filed in September, 1994. This action challenges the constitutionality of Dade County's MWBE programs, as they apply to the construction industry only, i.e., SIC 15, 16, and 17. Plaintiffs seek a declaratory judgment and an injunction against the enforcement of the construction industry component of the MWBE programs. Plaintiffs assert that Dade County cannot demonstrate a compelling (or, with respect to the WBE program, even an important) governmental interest in using racial, ethnic, or gender classifications as a basis upon which to award County construction contracts. Nor are the programs narrowly tailored to achieve the governmental interests identified, contend plaintiffs.


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