Petitioner Baldwin-Lima-Hamilton Corporation, hereafter referred to as Baldwin, seeks a writ of prohibition restraining the respondent superior court from taking further action in a mandamus proceeding pending therein, except such as may be necessary to deny a peremptory writ of mandate, discharge the alternative writ issued, and dissolve an injunction pendente lite.
The following background facts appear to he generally undisputed. On July 6, 1961, the purchasing department of the City and County of San Francisco, acting under the direction
On November 20, 1961, Benas issued, as a new invitation, contract proposal No. 12885 for the same equipment. Such proposal contained the following specification under the heading “ ‘Place of Manufacture’”: “ ‘All materials, supplies and equipment covered by this contract proposal shall be manufactured in the United States, except as otherwise provided in the Government Code of the State of California. In the event that alloy steel castings for the ‘‘solid” type runner required by the specifications are not produced in the United States, such castings produced outside the United States will be acceptable.' ”
In response to the above proposal and prior to the time specified for the closing of bids on December 4, 1961, three bids were submitted: (1) A bid by Allis in the sum of $1,308,555 based on the specification that the equipment, except as noted above, be manufactured in the United States. (2) A bid of Baldwin in the sum of $1,337,036 submitted on
On January 18, 1962, Benas announced his intention to award the contract to Baldwin upon the basis that the additional bid of Baldwin (bid No. 3 above) in the sum of $1,237,-036 was the lowest and best responsible bid received. Benas concedes here that he actually made his official award of the contract to Baldwin on the above date. It appears that such action on his part was taken on the advice of the city attorney of San Francisco, Benas’ counsel before us, upon the theory that the “place of manufacture” specification included in the contract proposal and set forth by us above, was illegal and therefore to be disregarded since it was in conflict with the “supremacy clause” of the Constitution of the United States (art. VI, cl. 2) and certain treaties and trade agreements.
Allis, therefore, on January 24, 1962, and before the awarded contract was certified by Harry D. Ross, the controller of the City and County of San Francisco, in accordance with applicable provisions of the city’s charter, filed in the respondent superior court its “Petition for Writ of Mandate and Injunctive Relief,” the pending proceedings of which we are now asked to restrain.
The petition for writ of mandate is directed against Benas and Ross and contains allegations setting forth in substance the above facts with reference to the two contract proposals, the submission of the two bids on August 7 in response to the first proposal No. 12625, the receipt of notification by Allis from Benas that its bid, although low, was invalid because it contained certain material reservations, conditions and deviations from the invitation for bids and that it was the intention of Benas to award the contract to Baldwin, the subsequent rejection by Benas on October 27 of both bids, the three bids received in response to the second proposal No. 12885 thereafter issued, the above “place of manufacture” clause and the ultimate decision of Benas to award the contract to Baldwin. So far as is pertinent here, the petition contains the following additional allegations: that Allis is a Delaware corporation, with its home office in Milwaukee, Wisconsin, organized and licensed to transact business in California, inelud
On February 6, 1962, Benas and Ross, the respondents below, filed their return and answer to the alternative writ and Baldwin, upon leave of court, filed a complaint in intervention “uniting with the respondents in resisting the claims of petitioner.” 3 On the same day Baldwin filed a demurrer.
Since Baldwin is an intervener on the side of the respondents Benas and Ross, its complaint in intervention is in effect an answer to Allis’ petition. (Cf.
People
v.
Perris Irrigation Dist.
(1901)
Baldwin’s demurrer also specifies in language similar to the complaint in intervention that the petition fails to state sufficient facts and that the court below lacks jurisdiction of the subject matter. 4
The respondent superior court reserving its ruling on the demurrer which had been argued before it, thereupon proceeded to a hearing upon the above-mentioned pleadings.
5
At the conclusion of the hearing, the court overruled the demurrer and denied Baldwin’s motion to strike all of the evidence, oral and documentary. On April 26, 1962, it issued a memorandum opinion holding that the “place of manufacture” provision of contract proposal No. 12885 was in violation of the “supremacy clause” of the United States Constitution and certain trade treaties and that " [t] his illegal provision inserted in the specifications and in the contract proposal defeats the fundamental requirement in awarding public contracts that the call for bids clearly apprise pros
Thereupon, and before any additional proceedings were taken in the court below, the petition for writ of prohibition now before us, was filed with the Supreme Court on May 25, 1962, and thereafter transferred to this court on June 7, 1962. We granted an alternative writ of prohibition on June 21, 1962. A return and answer to the alternative writ has been filed by Allis and a separate answer and return filed by Benas, Ross and the City and County of San Francisco, all of whom have been named respondents in the instant proceedings.
As it is stated in
City of Los Angeles
v.
Superior Court
(1959)
In the foregoing position, Baldwin is joined by Benas, Ross and the City and County of San Francisco who urge that the bid call was and is legal and that the respondent court should be restrained from taking action of any kind which will prevent the awarding of the contract to Baldwin.
Allis, on the other hand, takes the position that the intended action of the court below is not in excess of its jurisdiction and that the peremptory writ of prohibition here sought should be denied.
We therefore proceed to examine the proceedings below and to determine whether the judicial action announced to be taken therein is in excess of the jurisdiction of the respondent superior court.
It is elementary that the remedy of mandamus which was sought below issues only “to compel the performance of an act which the law specially enjoins, as a duty resulting from an office, trust or station” (Code Civ. Proc. § 1085) upon the petition “of the party beneficially interested” (Code Civ. Proc. § 1086) and will not lie to control discretion conferred upon a public officer or agency.
(Lindell
v.
Board of Permit Appeals
(1943)
So far as is pertinent here, the petition for writ of mandate alleges that Benas issued the second contract proposal No. 12885 on November 20, 1961 ; 6 that its specifications included the “place of manufacture’’ provision above-mentioned; that in response to the proposal Allis submitted one bid in the sum of $1,308,555 and Baldwin submitted two bids, one for $1,337,036 and an “alternative proposal” in the sum of $1,237,036 “based upon the furnishing of component parts procured outside the United States”; that Allis’ bid “was the lowest responsible bid submitted in accordance with the Contract Proposal and the specifications ’ ’ • that Baldwin, in submitting its alternative bid “committed a material deviation and variance” from the “place of manufacture” specifications ; that although Allis demanded of Benas that he award the contract to it as the lowest responsible bidder, the latter announced his intention to award the contract to Baldwin on the basis that its alternate bid was the lowest and best responsible bid received.
As already set forth by us in detail, the respondents Benas and Boss filed an answer and return and Baldwin filed a complaint in intervention and demurrer to meet Allis’ petition. Since Baldwin’s complaint was in legal effect an answer
(People
v.
Perris Irrigation Dist., supra,
In determining whether Allis’ petition filed in the respondent superior court shows the two basic ingredients requisite for mandamus and therefore whether said court’s intended action is in excess of its jurisdiction, we are entitled to consider the above pleadings of the opposite parties and the exhibits attached thereto. Any defects in Allis’ petition may be aided or cured by averments in the above pleadings of
We note that Baldwin in its petition for a writ of prohibition filed with this court alleges, and Allis in its return and answer thereto admits, that Baldwin’s demurrer, specifying insufficiency of facts and lack of jurisdiction, was argued prior to the taking of evidence but ruling thereon reserved by the court below, that Baldwin maintained throughout the subsequent hearings that the demurrer should be sustained, and that at the close of the testimony Baldwin’s motion to strike all the evidence, oral and documentary, was denied and its general demurrer thereupon overruled. This is confirmed by the following statement of counsel for Baldwin found in the transcript of the proceedings below which has been lodged with this court: " Before I commence any testimony with this witness of mine, the Court will recall that I have urged and still urge to the Court that the Court has no jurisdiction in this case, based on the pleadings filed with the Court, and I have a demurrer and I am still urging that demurrer and I am not waiving it, it is a jurisdictional question anyway. And I am calling a witness at this time. ’ ’
On oral argument before us, counsel for Baldwin contended that in the light of the foregoing record we should not consider anything beyond Allis’ petition for a writ of mandate. We do not agree. Baldwin did not stand on its demurrer. As we have already shown, it filed simultaneously with its demurrer a complaint in intervention which was in legal effect an answer. By so doing it permitted the doctrine of aider to come into play. As in the case of a complaint, if Allis’ petition is defective or lacks an averment of any essential fact, it may be aided or cured by the averments of the answers filed thereto, even though a demurrer to the sufficiency of the petition, filed by one of the parties, has been erroneously overruled. (Cf.
Daggett
v.
Gray
(1895)
The relief sought by Allis in the respondent court is twofold. In the prayer of its petition Allis seeks a writ of mandate commanding Benas and Ross (1) to award the contract to
Clearly Allis’ petition, even when considered with the other pleadings, does not establish any enforceable duty on the part of Benas and Ross to award the contract to Allis. True, the petition alleges that Allis’ bid was the “lowest responsible bid submitted in accordance with the Contract Proposal and specifications” and that Allis was “in fact the lowest and best responsible bidder.” But these allegations are purely conclusionary, the apparent theory of the pleader being that the alternate low bid of Baldwin based on furnishing foreign components should be disregarded, despite the fact that it was accepted by Benas in the exercise of his discretion, and the acceptance of the next lowest bid—Allis ’ bid—be ordered by the court below quite apart from any discretion in Benas to accept or reject any bid. It is not, and of course could not be, alleged that Benas was under a duty to accept any bid submitted. On the contrary, under the Charter and Administrative Code of San Francisco, he could reject any and all bids.
In
Judson Pacific-Murphy Corp.
v.
Durkee
(1956)
“It is apparent that were the court to order respondent to award the contract to Judson as the next lowest qualified bidder (assuming, contrary to the fact, that United States Steel Corporation was not qualified), it would be substituting the court’s judgment and discretion for those of respondent.
So, in the case before us, the respondent superior court had no power to order Benas to award the contract to Allis, even if it is assumed that Baldwin’s low bid should be disregarded. Benas had the authority to reject any and all bids and in the exercise of his discretion to decide whether to award the contract to the lowest bidder, whoever that might be. He was under no legal compulsion to award it to Allis.
We are mindful of the fact that in the present posture of this case, the respondent superior court has not indicated an intention to compel the award of the contract to Allis and has actually indicated a contrary intention by stating in its memorandum opinion that it has denied or will deny the peremptory writ of mandate and discharge the alternative writ. Baldwin, of course, makes no plea before us to arrest such judicial action obviously favorable to it. However we have considered the foregoing question of the trial court’s power to order an award of the contract to Allis because it has been presented to us by the parties and because we feel it is necessary to a full determination as to whether the proceedings below are in excess of such court’s jurisdiction as that term relates to proceedings in prohibition.
We now turn to the second aspect of the relief sought in the court below and proceed to discuss whether such court, while admittedly having no power to compel an award of the contract to Allis, has the power to restrain Benas and Ross from proceeding to award or certify the contract to Baldwin or any other person.
The resolution of this question turns upon the legality and validity of the city’s contract proposal of November 20, 1961. The pleadings establish that all three bids which generate the instant, controversy were submitted to Benas in response to such proposal and that such proposal included the “place of manufacture” provision set out by us above. This provision
The record shows that all of the three bids involved were presented on the basis that the so-called runners would be manufactured in Switzerland since they were not ordinarily manufactured within the United States. All bids therefore took advantage of the permissible exception created by the “place of manufacture” provision. It is also established by the record that Allis’ bid in the sum of $1,308,555 (bid No. 1 above) and Baldwin’s bid in the sum of $1,337,036 (bid No. 2 above) were both submitted on the basis that all materials and equipment would be manufactured in the United States, except óf course the runners which were to be from Switzerland. Both bids were therefore responsive to the bid call in all respects including the specifications prescribed as to place of manufacture. In comparison, Allis’ bid (bid No. 1) was the lower in amount. The record also establishes that Baldwin’s separate bid (bid No. 3) in the amount of $1,237,036 which Benas accepted, was based on furnishing, in addition to the runners from Switzerland, certain parts such as governors, valve controls and light weldment which would be manufactured either in Japan or Canada. In this respect it is clear that such bid was not responsive to the place of manufacture provision of the bid call.
However, it is also clear, under the authorities relied upon by the city attorney of San Francisco in his opinion rendered to Benas, adopted by the respondent superior court
At Geneva on October 30, 1947, the United States and 22 other nations entered into a “General Agreement on Tariffs and Trade” (61 Stat., part 5) which for brevity we will hereafter refer to as GATT. Canada was an original signatory thereto. Japan became a signatory thereto effective September 10, 1955. 8
Paragraph 2 of article III of part II of GATT (61 Stat., part 5, p. A18) provides: “The products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded treatment no less favourable than that accorded to like products of national origin in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution, or use. ...”
Paragraph 5 of article III of part II (61 Stat., part 5, p. A19) provides: “The provisions of this Article shall not apply to the procurement by governmental agencies of products purchased for governmental purposes and not for resale or use in the production of goods for sale, ...”
Under GATT therefore the products of Canada and Japan imported into the United States must be treated no less favorably than like products of such nation of destination. The exception contained in paragraph 5, which we quote immediately above, is not operative in the instant situation since the turbines and other equipment are for use in the generation of electric power for resale and hence for “use in the production of goods for sale.” Electricity is a commodity which, like other goods, can be manufactured, transported and sold. (See
Terrace Water Co.
v.
San Antonio Light & Tower Co.
(1905)
The United States Constitution provides in article VI thereof that “. . . Treaties made . . . under the Authority
The written opinion of the city attorney of San Francisco to Benas under date of December 29, 1961, which we find attached as an exhibit to Baldwin’s complaint in intervention, follows the above reasoning and authorities to hold that the foreign components proposed to be obtained by Baldwin from Canada and Japan were protected by GATT and that the Japanese components were also accorded “ ‘most-favored-nation treatment’ ” under the “ ‘ Treaty of Friendship, Commerce and Navigation,’ ” signed at Tokyo April 2, 1953. It was in this opinion that the city attorney advised Benas that the California Buy American statute was superseded by the above treaties and that Benas was required to disregard the factor that Baldwin’s low bid (bid No. 3) did not conform to the specifications set forth in the “place of manufacture” provision. 9
We agree that under the foregoing authorities the “place of manufacture” provision contained in the November 20, 1961, bid call has no operative effect in the instant case to restrict or preclude the furnishing of material or equipment produced in Canada or Japan. The result therefore is a nullification of the provision as effectively as if it had not been included in the bid call in the first place. It is superseded, or in other words replaced, by the treaty provisions.
What, if any, effect therefore do the foregoing conclusions have upon the contract proposal or bid call itself which clearly prescribed that bids submitted in response thereto should comply with “place of manufacture” specifications now held to be superseded? Baldwin and the other parties hereto who join with it maintain that the original bid call
It is a long and well-established rule that where municipal contracts are required to be let upon public bidding, the proposals and specifications inviting such bids must be sufficiently detailed, definite and precise so as to provide a basis for full and fair competitive bidding upon a common standard and must be free of any restrictions tending to stifle competition. (43 Am.Jur., Public Works and Contracts, § 36, p. 777; 63 C.J.S., Municipal Corporations, § 998, p. 573; 10 McQuillin, Municipal Corporations, § 29.30, p. 268.) The San Francisco Charter required such full and fair competitive bidding in the instant case.
In conformity with the mandate of section 95 of the charter, the respondent Benas in advertising for bids incorporated in his proposal a specific requirement that (except for the castings for runners) “
[a]ll
materials, supplies and equipment . . . shall be manufactured in the United States, except as otherwise provided in the
Government Code
of the State of California.” (Emphasis added.) The plain meaning of this language is that the bid must be based on goods of American manufacture or it will not be accepted, The bidder is apprised
We are of the opinion that the “place of manufacture” provision in the bid call of November 20, 1961, failed to afford a basis for full and fair competitive bidding upon which the contract in question could be legally awarded. It cannot be reasonably concluded that prospective bidders could infer from the specifications of the bid call that, despite its clear language to the contrary, they could submit acceptable bids covering materials of foreign manufacture. It is a reasonable assumption that the clear and certain language' of the bid call would indeed have the opposite result and would deter persons from submitting bids covering goods of foreign manufacture, thus reducing the number of bidders and defeating the real objectives of competitive bidding. (See generally 43 Am. Jur., Public Works and Contracts, § 26, p. 767.)
We find no merit in Baldwin’s argument that specifications which are insufficient to secure full and fair competitive bidding can be corrected or improved by importing therein by legal implication (“reading' into them”) provisions upon which the specifications are completely silent. While
Calpetro Producers Syndicate
v.
C. M. Woods Co.
(1929)
To insist, as the city and those joining with it do, that the bidder must read the treaty provisions into the bid call is absurd and unrealistic. Properly conducted competitive bidding should not compel a bidder to question the clear language of the proposal and to search out, examine and construe various public documents upon the contingency that they may in some way affect it. This would require the bidder to become to a great extent a lawyer, in some degree a judge and, perhaps, in no small way a clairvoyant.
We therefore hold that the “place of manufacture” provision in contract proposal No. 12885 issued by Benas on November 20, 1961, is, in the instant ease, illegal and invalid as being in conflict with the aforementioned treaties and trade agreements of the United States, that such provision cannot be cured or corrected by importing therein by legal implication the pertinent clauses of such treaties and agreements, and that, as a result, it can be reasonably concluded by the respondent court that such provision is further invalid as being insufficient in the instant case to provide for full and fair competitive bidding upon a common standard.
The awarding of a contract by a public official pursuant to specifications which are illegal and invalid and which fail to provide for full and fair competitive bidding, is, we think an abuse of discretion. It is within the power of the respondent superior court to determine- whether or not an abuse of discretion exists in the instant case. While mandamus will not lie to control the discretion exercised by a public officer or board
(Lindell
v.
Board of Permit Appeals, supra,
We therefore hold that it is within the power of the respondent court to issue a writ of mandate to correct “an abuse of discretion” commanding Benas and Boss according to the prayer of the petition to refrain from proceeding to award or certify said contract to Baldwin or to any other person.
Allis was peculiarly affected by such alleged abuse of discretion. It was the only other bidder. Of the two bids which were responsive to all of the bidding specifications including those referring to place of manufacture, Allis’ bid was the lower. Benas did not reject any of the bids submitted. His decision to disregard the place of manufacture provision therefore had a direct and injurious result on Allis. If relief is granted below, Allis will have the opportunity to bid on a new invitation which presumably will provide full and fair competitive bidding. Thus the granting of the writ will sub-
We wish to make clear that we do not say that the remedy invoked should issue. The propriety of its issuance is not before us. Our holding is that the respondent court has the power to issue the writ and that such action on its part is not without or in excess of its jurisdiction.
Finally, we point out that the record before us is unclear in certain important respects. While the respondent court states in its memorandum opinion that the bid call is illegal and that no contract can be awarded on it, it also states that Allis’ petition for a peremptory writ of mandate compelling Benas “to award a contract to petitioner on its bid ‘A’ [bid No. 1 above] is hereby denied and the alternative writ ... is hereby dissolved.” Since the parties have not brought before us the minutes of the court below, we have no evidence that the foregoing and other language concluding the opinion are actually minute orders of the court. A memorandum opinion is not itself the court’s decision or judgment. (De
Cou
v.
Howell
(1923)
We note that the court orders or will order that the peremptory writ compelling Benas to award the contract to Allis will be denied. This is in conformity with our views previously expressed herein. It is not clear to us whether or not the respondent will issue a peremptory writ restraining Benas
Our foregoing observations are not intended to be and should not be construed as critical of the court below, which was prevented from completing its decision by the instant proceeding in prohibition. It may be that the court contemplated a writ of mandate consonant with our present views. On the other hand, it may be that the court intended permanent relief of an injunctive nature with the injunction pendente lite as auxiliary thereto. There is no indication in the record that the court intends to use a permanent injunction rather than mandate to enforce its ruling that no contract can be awarded on the bid call. We therefore do not feel called upon to determine whether such type of relief would be within the court’s powers. 10 We assume that the court will not exceed its jurisdiction in this respect.
The alternative writ of prohibition is discharged and the petition for a peremptory writ is denied.
Bray, P. J., and Salsman, J., * concurred.
The petitions of the petitioner and the real parties in interest for a hearing by the Supreme Court were denied December 19, 1962.
Notes
Section 95 of said charter dealing, inter alia, with the letting of contracts by bid for the purchase of materials, supplies and equipment provided in relevant part as follows: “ ‘. . . Each such advertisement shall contain the reservation of the right to reject any and all bids. . . ”
“ ‘The purchaser of supplies with the approval of the chief administrative officer . . . may reject any and all bids and readvertise for bids.’ ”
Section 21.9 of the Administrative Code included within chapter 21, entitled “ ‘Purchasing Procedure’ ” provides in relevant part as follows: “ ‘The purchaser, with the approval of the chief administrative officer, may reject any and all bids and readvertise for bids.’ ”
The purchaser of supplies and the controller assert that each of the above bids should be increased by $770,
The record does not disclose whether any answers or demurrers were filed to the complaint in intervention. (Code Civ. Proc., § 387.)
Apparently no objection was made below to the filing by Baldwin of a demurrer as well as a complaint in intervention although the order for intervention granted leave to file only the latter. Since the legal issues raised by the demurrer are also raised by the complaint in intervention, which is actually an answer to the petition, and since such legal issues can be properly raised by an answer to the petition for writ of mandate
In the proceedings for a writ of prohibition now before us, the parties have admitted that the demurrer was argued on February 6, and taken under submission, that further hearings for the taking of testimony were held on February 7, 8, 16, 28 and March 14, 1962, and that on April 18, 1962, in chambers, the court announced its ruling on the demurrer and motion to strike. The record before us does not disclose any minute or written orders in reference to the above.
We do not deem it necessary to consider the first contract proposal of July 6, 1961, since Benas, as authorized by the San Francisco Charter and Administrative Code, rejected all bids submitted in response thereto.
Section 4303 provides: "The governing body of any political subdivision, municipal corporation, or district, and any public officer or person charged with the letting of contracts for (1) the construction, alteration, or repair of public works or (2) for the purchasing of materials for public use, shall let such contracts only to persons who agree to use or supply only such unmanufactured materials as have been produced in the United States, and only such manufactured materials as have been manufactured in the United States, substantially all from materials produced in the United States. ”
Pursuant to Protocol of Terms of Accession of Japan to GATT dated at Geneva June 7, 1955, and “entered into force” September 10, 1955. (See Vol. 6 United States Treaties and Other International Agreements, p. 5833, Publication of U. S. Printing Office, 1956.)
The city attorney also relied upon the opinion found in
As an illustration, in
Cullinan
v.
Superior Court
(1938)
Assigned by Chairman of Judicial Council.