Case Brief: Grady Excavating, Inc., Ref. No.: 12-0240

Case Brief

Grady Excavating, Inc.; Ref No.: 12-0240

August 18, 2014

Brief Synopsis of the Case:

Grady Excavating, Inc. filed an appeal challenging the Washington State Office of Minority and Women’s Business Enterprises (OMWBE) Certification Committee’s (Committee) decision to decertify the firm based on an allegation that the owner was no longer economically disadvantaged. The rationale for this determination focused on the company’s success. Essentially, the agency argued that because the business had been so successful is so short a period of time, the owner could not be economically disadvantaged because “doors open easily for her”.

Holding:

On appeal the DOT reversed the Committee’s decision but remanded the case back on other grounds. On the issue of economic disadvantage the DOT made clear that agency erred when it considered the success of the business when examining the owner’s claim of economic disadvantage. “Imputing the value of the applicant firm to an owner’s personal net worth is not consistent with the intent of our rule”.

Analysis:   

This case is important because it shows it makes clear that the new regulation creating the accumulation of wealth standard doesn’t give agencies the ability to discard other provisions of the regulations such as the exclusion of the owner’s interest in the business in calculating net worth. Although not discussed in this case, it could also be argued that an agency shouldn’t consider a spouses income, joint assets or the value of the primary residence since those too are specifically excluded from the calculation of personal net worth.