*1 S036526. Dec. [No. 1994.] ELECTRIC, INC.,
DOMAR Plаintiff and Appellant, ANGELES, OF CITY LOS Defendant and Respondent; COMPANY, BAILEY CONTROLS Intervener and Respondent.
Counsel Kamine, Steiner & S. M. Kamine Ungerer, Phyllis Ungerer Bernard Plaintiff and Appellant. Hahn, Echeverría, F.
James K. Pedro B. John City Attorney, Haggerty Westhoff, M. Assistant for Defendant and Attorneys, Christopher Respondent. Rosales, Renne, Francisco), Mara E. S. (San Joseph
Louise H. City Attorney Lee, Avila, and Kevin S. Reed as Amici Curiae Constance L. Rice Bill Lann on behalf of Defendant and Respondent.
Jones, and Patricia W. Davies for Gerald W. Palmer Day, Reavis & Pogue, Intervener and Respondent.
Opinion review in this case to determine whether BAXTER, J. granted We be awarded charter that contracts requirement subject to the “lowest and best bidder” the charter regular prevents responsible contractors to and its from agencies requiring potential comply no bid set-asides subcontractor outreach that involves preferences, Our examination of the relevant charter provisions quotas. leads us to conclude underlying goals competitive bidding purposes the charter. we Accordingly, that the outreach does not violate of the Court of and remand the matter to allow judgment reverse Appeal that court to address other issues not reached. previously *5 Background and
I. Factual Procedural (hereafter a charter of Los the is City governed by Angeles City) which on contracts the ordinarily requires competitive bidding involving $25,000. Charter, 386(b).)1 (L.A. of more than With expenditure City § here, the charter that such contracts “shall exceptions applicable provides 386(f).) (§ be let to the lowest and best bidder.” regular responsible 1-B, 29,1983, Directive No. On March the issued Executive City’s mayor and which declared it was the of the “to utilize City Minority policy in all Women-Owned Business and aspects Enterprise[s] WBE’s] [MBE’s construction, services.”2 to and contracting relating procurement, personal the Council and The directive declared that the “through City explicitly City, indicated, Angeles City Los 1 Unless otherwise all further section references are to the Charter. footnote, (MBE’s) minority-owned enterprises 2 In a the directive defined business business, (WBE’s) enterprises “any women-owned which is as bank or financial institution woman, business, operated by minority group owned a member or or such bank minority partners financial institution of whom 50% or more of it’s or stockholders are [sic] owned, group publicly minority members or If members or women. the business possess stockholders must have at least in business control over 51% interest management capital earnings.” Commissions, that Boards and will ensure
it’s respective Minority [sic] to Business have the maximum in the Enterprises opportunity participate of contracts In and subcontracts. this will take performance regard, all to ensure that and Women-Owned Business Minority responsible steрs have the for and maximum to compete perform Enterprises opportunity contracts and services.” The directive also contained for general guidelines this policy. implementing decided Richmond v. A. United States Court J.
Subsequently, Supreme 706], (1989) 488 U.S. L.Ed.2d S.Ct. which Croson Co. that con- challenge municipality’s program required prime involved least 30 awarded construction contracts subcontract at city percent tractors case, dollar amount of each contract to firms. minority high that the set-aside for subcontractors violated court found mandatory minority the United because there clause of States Constitution equal protection Thereafter, 6, 1989, no direct evidence of on March was discrimination. past 1-C,. of the Executive Directive No. which was Mayor City issued 1-B “intended to Directive clarify light Executive implementation of the Richmond v. Croson decision. . . .” Executive 1-C directive Directive No. declared that
Although previous force,” and in revised the of the as “remains intact it intended policy City, Los “It is the provide Minority follows: policy Angeles (WBEs) (MBEs), Women Business and all Business Enterprises Enterprises in the business an enterprises perfor- other equal opportunity participate assist the mance of all contracts. Bidders and shall proposers city to ensure that all this all reasonable policy taking steps implementing WBEs, local an available business MBEs have enterprises, including (Italics contracts.” equal participate opportunity compete *6 1-C, added.) Executive No. agencies Under Directive contracting by were directed to evaluate the faith efforts made bidders good MBE’s, business entities in their WBE’s and other outreach to proposers nine issued by mayor’s factors. according Subsequent guidelines factor, measure a bidder’s that a which office clarified tenth purported MBE and WBE faith with reference to certain levels good anticipated in evaluating no considered subcontractor should be participation, longer bids. Board) established (hereafter
The Los Board of Public Works Angeles 1-C. Under the an after No. program patterned outreach Executive Directive in faith conducting Board’s of a bidder’s program, adequacy good MBE’s, WBE’s and other business enter- efforts to outreach subcontracting listed in the the factors be determined (OBE’s)3 by utilizing is to prises directive, efforts to identify of the bidder’s evaluations including mayor’s MBE’s, out to subcontracting items in for work specific projects and select work, OBE’s, on selected and to provide conduct advertising WBE’s with interested subcontractors.4 in faith good to and negotiate information WBE level of MBE and/or estimates of the the Board provides Although (1 bid achieved in each situation which be particular might participation which does not other “any “OBE” to mean subcontractor 3 TheBoard’s defines Enterprise.” qualify Minority wise a or Women Business as (1) following in the order: The bidder has made 4 TheBoard’s lists 10 factors “[¶] MBEs, participation by WBEs and OBEs business [other faith effort to obtain sub-bid partici reasonable enterprises] expected by produce could be the Board to level which including percentages set forth pation by enterprises, interested business the MBE and WBE case, paragraph subcontracting policy B outreach by paragraph B herein. this states: ‘The [In MBEs, participation by requires the bidder to make a “Good Faith Effort” to obtain sub-bid expected by produce of Public Works to a level of WBEs and OBEs which can be Board business, (2) by including percent MBE and/or participation interested WBE.’] [¶] of the pre-bid meeting by scheduled the Board to inform all bidders bidder has attended the may requirements project for which the contract will be awarded. The Board waive for writing already informed as to those requirement only this if the bidder certifies in it was (3) requirements pre-bid meeting. The bidder has identified and project prior to the [¶] by specific project performed selected work items in the to be sub-bidder/subcontractors MBEs, making Upon OBEs. provide opportunity participation by order to an for WBEs and determination, requirements into smaller this the bidder subdivided the total contract work MBEs, portions quantities permit participation of WBEs and OBEs. [¶] or maximum active bids, (4) (10) days prior the bidder advertised Not less than ten calendar to the submission daily weekly newspapers, enterprises for sub-bids from interested business in one or more publications, minority publications, journals, trade or other trade association or trade oriented (5) of its interest in specified by provided media the Board. The bidder has written notice [¶] receiving including enterprises, sub-bids on the contract to those MBEs and WBEs business having an interest in in the selected work items. All notices of interest shall (10) days required bids are to be provided prior not less than ten calendar to the date the instances, sub-bid/subcontracting submitted. all bidder can document that invitations MBEs, (6) performed. was sent to available WBEs and OBEs for each item of work to be [¶] follow-up The bidder of sub-bid interest has documented efforts initial solicitations contacting certainty whether said enter enterprises the affected business to determine with (7) prises performing specific portions project were work. The bidder interested [¶] provided enterprises plans, specifications has interested sub-bid with information about the (8) requirements sub-bid/subcontracting requested for the selected work. The bidder [¶] organizations placement оf provide assistance from in the recruitment and assistance MBEs, days WBEs and OBEs not submission of bids. It prior less than calendar to the any legitimate concerning should be noted that association MBE/WBE/OBE activities not on following negotiated may purpose. list also be contacted for this The bidder has [¶] *7 MBEs, unjustifiably reject as faith with interested WBEs and OBEs and did not documentation, unsatisfactory by any bidder can prepared enterprise. the sub-bids As solicited, including submit a list of all sub-bidders for each item of bids were work for which MBEs, (10) potential The bidder has dollar amounts of work for WBEs and OBEs. [¶] MBEs, obtaining documented efforts to assist and OBEs in advise and interested WBEs bonds, credit, by required lines of and insurance the Board or contractor.” clear that the failure to the instant makes project), percent itself any level shall not by disqualify meet the anticipated participation for a contract award nor result in a determination bidder from consideration Thus, no a bidder gains of reasonable MBE/WBE participation. of lack level nor a disadvan- from advantage meeting anticipated participation it. meeting from tage a contract to
In the Board issued a for bids on request October Secondary Sewage control for the provide system Hyperion a computer bid that bidders would required Treatment Plant. The package specified with the outreach submit of their compliance program. documentation “bidder’s checklist” a document called a contained particular, package bid to be of the bid to be submitted which detailed all pages required “ the statement: ‘Good Faith This checklist included considered responsive. checklist, each I used this initialed Documentation Checklist’: have Effort this checklist with along the form. I will submit and have signed step three working days following documentation no later than required at the bids are received.” Additionally, of Board business the day the close statement: “I have checklist was the following bottom of the bidder’s of the Pro- page read and each completed every applicable carefully the appropriate pages I aware that the failure submit am posal. bid non-responsive render signed, may my completed
Proposal, properly This statement was of Public Works.” the Board by and subject rejection a line for the bidder’s signature. followed by Electric, these, Of Domar submitted bids for the project.
Three companies bid of Domar) lowest (hereafter monetary submitted apparent Inc. However, due to Domar’s $3,335,450. declared the bid was nonresponsive effort documentation within faith failure to required good timely provide Controls the contract to Bailey The Board awarded deadline. three-day $3,987,622. next lowest bid monetary which had submitted the Company, in the mandate and/or for a writ of prohibition Domar filed petition from the City entering other things, prevent court seeking, among superior After other than itself. contractor a contract on the subject project issued, Domar’s petition, court denied writ was superior an alternative attach- outreach program of the MBE/WBE that “the finding requirement case authorities. unconstitutional precluded ment is not and/or illegal which policy and significant public an important serves requirement for a writ of Domar’s goals.” petition or improper does not set any quotas denied, for review. as was its petition was mandate in the Court Appeal entered, that: the grounds Domar appealed was After a final judgment charter; violates (2) the program the City’s violates (1) the outreach program *8 with an Contract Code section which permits compliance Public faith in to be on either demonstrating good outreach program predicated MBE WBE and and meeting specific goals require- seeking is unconstitutionally ments for such participation; of the federal clause and the race-conscious violation equal protection Co., 488 U.S. The Court of in Richmond v. J. A. Croson 469. holding decision, court After in a reversed the superior judgment. Appeal, split set authorization for the outreach was not that expressly finding charter, the Board’s rejection forth in the court determined that appellate bid based on the failure to submit outreach documentation of Domar’s 386(f), awarded to violated charter section which that contracts be requires and best bidder.” Because it found a charter the “lowest regular responsible violation, the court did not reach the other two contentions. We granted for review. City’s petition
II. Discussion to the procedures requirements relating competitive bidding contracts are set forth in at section 386 of the municipal large part City’s charter. Those relevant to this case are described below. here, 386(b)
With certain section exceptions pertinent provides be, “shall not and is not bound contract by any involving ($25,000) of more than expenditure thousand dollars unless the twenty-five . . . board . . . authorized to contract shall first have with the complied for procedure established this section.” Notices of competitive bidding by for requests bids must be at least once in published a daily newspaper in the printed and such notices must the amount published City, specify of the bond to be for the faithful of the contract. given performance 386(c).) (§ “Bidders to submit with their detailed may required proposals furnished, item specifications to be as to together guarаntees cost, characteristics!;,] life, efficiency, performance, useful time of operating and other delivery, Such factors. notice shall appropriate specify time such bids (Ibid.) will be received.” Bids must be place accompanied by a cashier’s check for an amount not less than 10 percent aggregate bid, or, thereof, sum of the amount, in lieu bond in like satisfactory surety that the bidder will enter into guaranteeing contract if the proposed contract is awarded to 386(d).) the bidder. The bid (§ must also be supported an (Ibid.) affidavit of noncollusion. contracts,
Section 386(f) to the award of pertains provides pertinent bids, “At the time part: of said ... specified opening contract shall *9 170 satisfactory bidder responsible furnishing the lowest and best regular
be let to be made on the basis This determination may its security performance. use; and where the same of the items in ultimate cost place the lowest consideration may of a or undertaking, constitute a larger project are to part or of such ultimate cost project the effect on the aggregate be given Charter to other of this Notwithstanding any provision undertaking. law, and its various the City the extent permitted by and to contrary inde- authorities, exercise which City those including departments awarding funds, renew into or shall not enter their expenditure control over pendent with, the contract contract, in or . the bidder is compliance . . unless any by adopted anti-apartheid policy from exempted has been excluded or addition, of this of the provision .... irrespective ordinance by City bidder, regular responsible to the lowest and best award subsection requiring California or contracts for in the letting can be allowed a bid preference addition, and, can the bid specifications firms County Los Angeles bid nature of such the extent and content requirement; for a domestic provide standards, definitions and any domestic content requirement preference, ordinance adopted be for by shall provided for their implementation policies delinquent bidder previously The bid of any Council .... City may with the former contract of any unfaithful the performance added.) (Italics rejected.” Board from the charter precludes case is whether
The issue in this faith efforts to undertake projects works public bidders requiring of the competi as part outreach program with its subcontractor compliance no outset, the charter contains observe that At the we bid tive process. to adopt agencies or its contracting allowing provision expressly we shall first Accordingly, outreach program, a subcontractor charter absence of explicit void in the whether consider authorization. represents that the charter with the cardinal principle
We begin in the federal conflicting provisions of the City, subject only law supreme (See Harman v. state law. and to Constitutions preemptive and state 880, 150, 496 161 (1972) Cal.Rptr. Cal.3d Francisco 7 [101 San County of not as a grant power, 1248].) charter operates In this regard, P.2d “[t]he of power on the exercise restriction of limitation and but as an instrument and the is assumed possess; affairs which the municipal over all or limitation. exclusion [Citations.]” an does not constitute enumeration of powers 595, 598-599 (1949) 34 Cal.2d (Ci Grass Valley v. Walkinshaw ty (1992) 4 v. Bradley Johnson also Grass see (City P.2d Valley); 894] [212 990].) The 470, expenditure P.2d 396-397 Cal.4th Cal.Rptr.2d [14 funds on a works is a city’s public (Loop affair. project municipal Lumber Co. v. Van Loben Seis 173 Cal. P. 600] [street *10 346, work]; and sewer see (1981) Vial v. San 122 Diego Cal.App.3d of 647]; 348 Smith v. (1973) Riverside 34 Cal.Rptr. Cal.App.3d [175 of 529, 67].) 534-537 Cal.Rptr. [110 of has all autonomous rule the “[B]y accepting privilege powers affairs, exercised, over to the clear otherwise municipal lawfully subject only limitations and restrictions contained in the charter.” explicit (City of 598; Grass 34 Valley, Cal.2d at see Johnson v. 4 supra, Bradley, supra, p. 396-397.) Cal.4th at Charter are construed in favor of the pp. provisions exercise of the over affairs and power the existence of municipal “agаinst limitation or restriction thereon which is not stated in the expressly 599; charter ....’’ (City Grass 34 Valley, supra, Cal.2d at v. Taylor p. 442, (1979) 695, Crane 24 Cal.3d 129].) 450-451 595 P.2d Cal.Rptr. [155 Thus, on a charter not be city’s power may implied.” (Taylor “[restrictions Crane, v. 451) 24 Cal.3d at p. these we
Applying conclude that the mere failure of the principles, charter to City’s bidders to expressly grant conduct power require However, subcontractor outreach does not render the outreach void. program our does not analysis here. Even the absence of stop though express authorization is not fatal to the it is well settled that a charter program, not act in conflict may with its charter. (City County San Francisco v. (1975) 898, 707, 13 Cooper 403]; Cal.3d 923-924 534 P.2d Cal.Rptr. [120 997, Currieri v. City (1970) Roseville 4 1001 Cal.App.3d Cal.Rptr. [84 615]; 223, Brown (1976) v. City Berkeley 57 230-233 Cal.App.3d [129 1].) Cal.Rptr. act that is violative Any of or not in with the compliance (Ibid.) charter is void. invalid,
In that the holding outreach the Court of Appeal found that the program to establish a noncharter “unquestionably purports to the exception set forth bidding requirements exceptions such, 386(f). in section to, to, As it does not conform is not subordinate with, conflicts and exceeds the charter.” Domar with this essentially agrees that the reasoning, arguing enumerated in the requirements exceptions charter are intended to be exclusive. whether determining of the outreach con- implementation charter,
flicts with the we rules of charter construction. employ following First, we construe the charter in the same manner as we would a statute. (C.J. 215, Kubach Co. v. (1926) 676]; McGuire 199 Cal. 217 P. Currieri [248
172 1001.) is to Roseville, Our sole objective supra, Cal.App.3d v. City of Beach v. Huntington (City intent. and effectuate legislative ascertain 514, 462, 84l Cal.Rptr.2d Cal.4th [14 Administration Board charter, effect to its giving to the 1034].) language We look first P.2d (1992) 2 Cal.4th 562 Cal.Rptr.2d Snowden (Burden meaning. plain clear, we charter are 672].) may the words of the Where 828 P.2d on the face that does not appear a purpose add to or alter them accomplish (Ibid.) history. its legislative of the charter or from the City authorize subsections that specifically Section 386 contains two bid the competitive bidders as part upon certain impose requirements *11 “[bjidders to that 386(c) may required states Section expressly process. to be fur- of item any detailed specifications with their proposals submit characteris- nished, toas efficiency, performance, with guarantees together life, other cost, of and [,] appropriate useful time delivery, tics operating best let to the “lowest and 386(f) bids shall be that factors.” Section requires of this bidder,”5 that irrespective states but explicitly responsible regular and a domestic be allowed may a local bidder preference requiremеnt, if for by provided included in bid specifications bemay content requirement 386(f) that provides section Similarly, the council. city ordinance adopted by and to the the contrary of the charter to other notwithstanding any provision unless law, into contract shall not enter by City extent permitted or with, exempted excluded the contract has been or bidder is compliance ordinance.6 from, by by policy adopted any anti-apartheid authorizes 386(f) 386(c) expressly nor section neither section Since outreach, to subcontractor relating a adopt requirement or forbids 5“ bidder whose mean the lowest has been held to responsible bidder” ‘The term “lowest fitness, of the requirements capacity particular to the quality, and responds best offer ” (1972) Superior Court County Center Auth. v. (City Inglewood-L.A. Civic proposed work.’ of (City Inglewood), citing 689, 861, 867-868, P.2d Cal.Rptr. 601] 500 fn. 5 [103 7 Cal.3d of omitted.) 202], parties The (1916) P. italics Cal.App. 560-561 [159 West v. Oakland 30 the charter’s difference between any significance suggested that there is have not similar terms. above term or other bidder” and the regular responsible best phrase “lowest and 386(f), other charter Domar contends in section 6 In addition to those contained an (1) involves the contract include: when requirement lowest bidder exceptions to the products $25,000 (2) patented 386(b)); is for (§ when the contract than expenditurе of less ap contract authorizing the 386(a)(2)); (3) necessity” “urgent when a declaration of (§ when, national 386(a)(4)); (4) during war or (§ mayor council and the proved competitive part suspends all by a two-thirds vote emergency, council bid check or (5) by a certified 386.1); accompanied (§ when the bid is bidding system by (6) accompanied 386(d)); is not (§ when the percent of the bid bid bond of 10 exceptions are (ibid.). charter that these other so-called We conclude noncollusion affidavit bidding require validly impose particular City may whether to the issue of irrelevant first, second, fourth identified third and by the charter. explicitly ment not authorized bidding is not contracts for which types situations or merely represent items deprive is to purpose their relevance because fifth and sixth items lack required at all. The
173 be ascertained with reference of such a must the validity requirement favoritism, “to which are guard against of competitive bidding, purposes the waste fraud and corruption; prevent improvidence, extravagance, (Graydon funds; for the the best economic result public” obtain public 631, 636 (1980) [164 Agency Cal.App.3d Pasadena Redevelopment ed.) (3d 56], McQuillin, Corporations citing Municipal Cal.Rptr. (Konica market 29.29), competition and to stimulate advantageous place § U.S.A., University Machines Inc. v. Regents Business California statutory compet [interpreting 206 Cal.App.3d Cal.Rptr. 591] bid itive requirements]). statutes, one “The charters
As treatise leading explains: provisions in the con- letting municipal ordinances requiring competitive bidding favorit- against tracts are for the purpose inviting competition, guard ism, and to secure the fraud and extravagance, corruption, improvidence, are enacted for best work or at the lowest supplies price practicable, they and not for the benefit or the benefit of holders and property taxpayers, bidders, enrichment of should be and administered as to so construed *12 such and with sole reference accomplish fairly reasonably purpose courts, will interest. These are construed and public strictly by provisions not be extended their reasonable beyond purpose. Competitive enactment, must be for their or read of the reason provisions light they will be thus where were not intended to applied they operate deny sensible, to deal with in a municipalities way.” authority problems practical 29.29, 375, (10 McQuillin, (3d 1990) rev. ed. Municipal Corporations p. § Thus, omitted.) fns. charters are not to be requiring competitive bidding such a construction as to defeat the given economy object insuring (Los Long favoritism and Co. excluding Angeles Dredging corruption. 348, 839, 161], Harlem (1930) Beach 210 Cal. P. 71 A.L.R. citing 309, 329.) Gaslight (1865) Co. v. etc. New York 33 N.Y. Mayor We no сonflict between the outreach perceive program that purposes It has been competitive bidding. generally recognized competitive bidding requirements “necessarily imply equal opportunities all whose interests or inclinations them to may compete impel Contracts, (64 bidding.” Am.Jur.2d Public Works and § omitted.) fn. This is what the outreach aims to do precisely program MBE’s, contractors WBE’s and OBE’s an requiring prime provide equal for and in the of all opportunity compete participate performance any authority supplied to contract with bidders who have not the charter-mandated check, bid bond or noncollusion affidavit. Moreover, faith outreach to all reasonable mandating
contracts. in effect seeks to guard of subcontractor enterprises, types contractors, and to increase favoritism and improvidence by prime against Con- bidding process. within competitive opportunity with the goals consistent not are the only program’s objectives sequently, those goals seeks to advance but bidding, its out- advantageous marketplace competition. implementing stimulating the program have concluded that the Board could reasonably reach program, the best work at the lowest price practicable. in securing will assist assessment, record instant that thе arguing with this disagrees Domar that the outreach program the conclusion no evidence support contains Moreover, while Domar or reduce prices. will actually promote competition it contract or increases that prices assert that the outreach program does not MBE or Domar suggests that are unreasonable costly,7 efforts requires to lower for public projects do not lead prices and WBE generally programs MBE but more costly bidders to use less competitive encourage because they do not expand Domar contends that such programs WBE firms. market; rather, to shift from cause the market they simply contracts public former and drive the MBE and WBE firms and non-WBE firms to non-MBE share. out of their market existing the lack empirical these arguments. Despite
We are not persuaded by that, in the evidence, to conclude for the Board it is not unreasonable outreach, to seek out contractors will tend absence of mandated prime therefore their and that when bidding projects, familiar subcontractors outreach efforts had reasonable reflect as low a bids may price may *13 that in the record Indeed, is unable to cite anything been made. Domar circumstances, the these a conclusion. Under detract from such might City Union v. (See Social Services entitled to deference. Board’s action is 1093, 1101 [285 Francisco 234 Cal.App.3d San County of Employment v. Public 905]; Mateo School Dist. see also San Cal.Rptr. 523].) 663 P.2d (1983) 33 Cal.3d Cal.Rptr. Relations Bd. assertions, argues “both the dissent that such the 7 Notwithstanding Domar’s failure to make time, effort, expense, all of involve considerable good faith efforts and the documentation may and which bidders” monetary loss for the unsuccessful represents a considerable which post, Arabian, J., 187.) (Dis. p. at opn. of part as of the bidder’s overhead. be added to bids arguments. support record to these cites no evidence surprisingly, Not the dissent $650,000 that, although approximately bid was in mind Domar’s important keep It is no bid, Domar made due to the fact that the differential was not the next lowest lower than Indeed, outreach, did. the other bidders required good faith while attempt to conduct simply program, but comply with the outreach contended that it did argument oral Domar timely in a manner. required documentation failed to submit Moreover, the outreach here none of the evils program poses particular identified Domar. The does not bidders to contract program require nor does it them to set aside subcontractor any particular enterprise, compel of a contract award to MBE’s or WBE’s in order to any percentage qualify And even the Board’s outreach for a contract. municipal though program an level of 1 MBE’s estimate that participation percent by provides efforts, WBE’s be the exercise of faith a bidder gets may anticipated by no from or not advantage disadvantage meeting meeting specified Thus, the no level. incentive to bidder program provides use MBE’s or WBE’s if are inferior in cost or and the market they ability, for contracts subcontractors remains a level field.8 public among playing
Hence, mindful as we must be of the that a charter must not be principle such a construction as to defeat given objectives competitive bidding Beach, 354; (Los Angeles Co. v. 210 Cal. at see Dredging Long supra, p. 29.29,
McQuillin, 375), we conclude that the outreach is § not void under the charter. to ensure that bids for By working municipal reflect the projects lowest is prices practicable, program fully compatible with the charter that requirement contracts be awarded to the lowest and best bidders. regular responsible
Since the and its bidders to conduct the agencies may validly require charter, outreach without specified it follows the Board violating a bid may validly reject based on the bidder’s failure to demonstrate with this If compliance bidders had the requirement. option disregard it, outreach because the Board was requirement without to enforce power Moreover, itself would be undermined. even though awarding instant contract to Controls Bailey save the Company may City money on this the Board could particular project, have concluded that reasonably lead, consistent enforcement of the outreach will in the requirement long term, lower contract prices. the Board’s action Finally, rejecting Domar’s bid due to the absence of the faith effort documen required good tation consistent with the rule that general must bidding requirements adhered to in strictly order to avoid the in the potential abuse *14 invalid, asserting 8 In that the program Board’s is appears the dissent at times to assume that requires bidders to achieve a minimum participation level of MBE’s and WBE’s and that it mandates exclusively solicitation efforts that focus on a narrow field of contractors. (See Arabian, J., 181, 1, post, opn. However, dis. of pp. 184-186.) at fn. as the record makes clear, focus, has a broad requiring outreach to all of types subcontracting enterprises—MBE’s, WBE’s and OBE’s. 176 (Konica U.S.A., Machines v. Regents Business Inc.
bidding process.9 of 206 456 adherence University California, supra, Cal.App.3d [strict of in it is there was is “even where certain bidding applied requirements no adverse and bidding fact effect corruption upon process, deviations would save the money”].) [public] entity assertiоns,
(7) Domar’s the charter’s enumeration of various to Contrary in and best restriction the lowest bidder exceptions regular responsible 386(f) result. the outreach section does not a different Unlike compel 386(f) to be listed in section tend exceptions all virtually program, instance, For suppress in nature.10 restrictions anticompetitive antiapartheid on of their contractors the basis potential competition disqualifying to their for offering with South Africa without regard potential connections bidder preferences generally the lowest local price practicable. Similarly, from compet- inhibit that contractors competition they prohibit potential an discriminate on basis. domestic content ing equal Finally, requirements the use increase of and against foreign products may thereby substantially the cost of a thus the best bargain project, undermining goal securing contract- for the That the charter authorizes and its public. expressly City bid to consider these factors during process ing agencies anticompetitive ordinances) lead to the enacted does logically (pursuant lawfully to stimulate and compe- conclusion that bid intended requirements promote not be considered. tition may reliance Associated General Contractors Domar’s Additionally, (9th 1987) F.2d Cir. 813 County Inc. v. and San Francisсo
California, Co. v. (Associated Contractors) Rolph General and Neal Publishing 922 Those are (1915) factually Cal. P. cases misplaced. 169 190 659] [146 do not Domar’s distinguishable support position. Contractors, ordi with an
Associated 813 F.2d dealt General (1) that: each city nance of the San Francisco County required 2 dollars for MBE’s set aside of its percent purchasing department MBE’s, WBE’s; a 5 (2) gave preference percent percent each (LBE’s); (3) business required WBE’s owned enterprises locally contracting for the yearly percentage to establish city department goal MBE’s, WBE’s prime dollars to and LBE’s go required prospective of its late process it was due on the matter 9 Domar makes that not afforded no contention Service, (See Taylor Diego v. San Bd. Education Bus Inc. submission of documentation. 379].) is not an issue Consequently, it Cal.Rptr. Cal.App.3d case. delinquent rejection previously of a bidder provision allows sole is the exception 10 The contract. former performance or unfaithful *15 contractors to submit bids that met or exceeded such estab goals; lished anas overall that 30 of the dollars shall goal percent city’s contracting case, (813 924.) and 10 to WBE’s. the go MBE’s F.2d at In that percent p. Ninth Circuit concluded that the ordinance violated a charter provision $50,000 that all contracts worth more to the requiring than be awarded “lowest (Id., 924-928.) reliable and bidder.” responsible at pp.
Even if the scheme contained in San Francisco competitive bidding here, charter is the same or similar to the one differ there are significant set-asides, ences between the bid enacted preferences contracting goals in San Francisco and the faith outreach here. As the required United States Court of for the Ninth Circuit Appeals recognized, perhaps most important goal is to “insufficient competitive bidding protect against to assure that the competition government the most work for the least gets (Associated Contractors, money.” 926.) General 813 F.2d supra, at Man p. datory set-asides and bid preferences work this against goal by narrowing bidders range acceptable solely the basis of their In particular class. contrast, stark requiring prime contractors to reach out to all types subcontracting broadens the in enterprises the bid pool participants pro cess, thereby guarding against of insufficient possibility competition. differences, Contractors, of these light Associated General supra, F.2d 922, does not us to find persuade the outreach violative charter.11 City’s
Neal Co. v. Publishing Rolph, 169 Cal. is likewise supra, unhelpful That Domar. case involved a contract for the forms furnishing printed which the refused to mayor sign after the board of had awarded supervisors contended, contract to the as the successful plaintiff bidder. The mayor alia, inter that the contract awarding to the have plaintiff would violated a board resolution requiring all printing jobs awarded to unionized (169 196.) Cal. at printers. p. mayor’s did not arguments prevail. After that the resolution noting the enactment preceded of charter provisions requiring competitive this court held that the bidding, resolution was merely directive nature and that it was not on the board binding itself awarding (Id., 196-197.) contacts. at there pp. in the case to the Although language that, event, effect board of could not addi- supervisors impose tional conditions to those the charter for imposed by
without violating contracts to be provision awarded requiring (id., lowest bidder 197), such dicta must be understood in light course, 11 Of if a bidder were to demonstrate that the Board in fact considered MBE or WBE Contractors, bid, awarding levels in of Associated General legal reasoning might 813 F.2d have more force. *16 claimed there. union That was requirement clearly anticompet- requirement were itive in that contractors rendered for a bid award based ineligible solely on nonunion status. The case does not aid Domar under the instant their facts. the various amici curiae whether our decision
Finally, parties dispute in In that City 7 Cal.3d Domar’s Inglewood, supra, supports position. of case, contract a contractor not authority a civic center awarded a who was bidder, the even former Government Code section monetary though lowest Code, 20128) (now Pub. be Contract contracts required § the bidder.” based the responsible authority awarded to “lowest The had award, not a that the bidder was not but on a responsible, lowest finding in determination that the bidder was higher relatively superior ability award, the we the the work. In set aside reasoned that ruling perform (7 no statute basis for a relative concept. provided applying superiority Rather, 867.) Cal.3d it to award the contract at p. required authority i.e., not bidder the bidder was found not responsible, lowest unless (Ibid.) do the work consideration. under qualified particular 861, makes 7 Cal.3d City our decision Although Inglewood, supra, clear with a lowest bidder bidding responsible that a scheme competitive who a to be to the bidder restriction contract awarded ordinarily requires not the lowest bid and is case does monetary responsible, submits here, i.e., a consis- entity concern the issue whether presented public may, charter, its certain bidders as tently requirements upon part impose case, Ingle- for a Unlike the instant project. City bid specifications wood, a bid to the of particular did involve challenge validity bidder did where the lowest monetary nor it concern situation requirement, had failed to with all advertised bid comply requirements.12 not violate we that the Board’s outreach does hold
Accordingly, forth in the charter.13 set City’s provisions City Inglewood, supra, City concedes holding 12 Consistent with the 7 Cal.3d monetary minimum standards responsible that the lowest bidder that meets Board’s bid over the next lowest demonstrating good faith outreach efforts must awarded a monetary responsible bidder that exceeds the minimum standards. merits, for the argues 13 In that the outreach is void its answer brief on the Domar authority mayoral under mayor reason that the acted excess his additional argument We consider this issuing charter Directive Nos. 1-B and 1-C. need not Executive event, As the relevant charter point it is not well taken. since was not raised below. clear, possessed powers exercise all the duties provisions make the Board “shall have and (a) advertising inviting for and relating under this Charter . . . to: The [¶] ; (b) making any . . . proposals doing any improvement work [¶] or bids for
III. Disposition Court of is is
The of the reversed and matter judgment Appeal court to remanded allow that address whether Domar otherwise be may on the in its notice of entitled relief based alternative identified grounds appeal.
Lucas, Mosk, J., J., J., J., Kennard, C. George, Werdegar, J. and concurred.
ARABIAN, J. respectfully dissent. that a Accepting proposition I home rule charter has broad to conduct its affairs free powers municipal interference, of outside city agencies nonetheless are without to act authority manner that any conflicts charter While I cer express provisions. have no with the and tainly overdue quarrel laudatory undoubtedly long of the and women-owned business outreach goals minority- pro enterprise fact is unvarnished that it is intended to social gram, not promote policy, More and to the competition. importantly point, conditioning of acceptance otherwise contractor of qualified bids documentation faith prime outreach efforts is with the mandate of Los incompatible Angeles City 386(f) Charter section that contracts for work “shall let to the lowest best and regular bidder.” Neither the record before this court nor responsible intuitive logic conclusion that the outreach supports majority’s program favoritism, necessary or does fact and “eliminate fraud corruption; funds; avoid misuse of public stimulate market advantageous place [or] U.S.A., (Konica Business competition.” Regents Machines Inc. v. Univer of 449, (1988) sity 206 591].) 456 Cal.App.3d Cal.Rptr. [253 of California Indeed, documents, as this case it empirically directly runs counter to the of the purpose goals competitive bidding process. of the breadth its of Los
Notwithstanding City plenary powers, Ange through les its agencies various is restricted in the exercise municipal authority by and all any express limitations contained in the city charter. Grass (City Valley Walkinshaw 34 Cal.2d 599 P.2d [212 “ 894].) A necessary corollary this is that ‘an ordinance principle [or to, to, executive with, must conform equivalent] be subordinate not conflict charter, exceed the can no or [city’s] more limit the change examining, bids; considering preparing (c) proposals awarding, of such or letting, [¶] reletting, entering signing doing into and any contracts on behalf of the said work making 233.) Thus, or improvements (§ though said . . . .” even the outreach directives, adopted was response mayor’s issue the Board in validity depend does not mayor on whether charter allows to issue directives of the sort involved here. 180 can than act legislative modify supersede
effect of the charter
(Currieri v. of the state.’
constitution
provision
[Citations.]”
615],
(1970) 4 Cal.App.3d
Cal.Rptr.
quoting
Roseville
Nature,
(3d
rev.)
McQuillin,
ed.
Requisites
Corporations
Municipal
Ordinances,
15.19,
79-80.)
pp.
Operation Municipal
§
Los
Charter section
Angeles City
to enumerated
Subject only
exceptions,
*18
386(f)
be let to the lowest and best regular
that contracts “shall
requires
for its
and
satisfactory security
bidder
responsible
furnishing
performance”
city’s
restriction on the
contract
categorical
thus constitutes an
and
specific
(See
and
City
Associated General Contractors
v.
ing authority.
of California
927;
922,
1987)
Los
(9th
813 F.2d
see also
San Francisco
Cir.
County of
839,
348,
P.
(1930) 210 Cal.
353
Co. v.
Beach
Angeles Dredging
Long
[291
by
municipal
mode
as
the
contracting,
prescribed
of
Any acceptance (San and is therefore void. derogation the charter mandate operates (1977) Francisco Fire San County Francisco Fighters 607].) It that additional follows Cal.Rptr. 902-903 [137 Cal.App.3d charter not contained in the to the competitive bidding process qualifications mate financial and itself relate to a bidder’s directly “experience must v. Jannsen to” the contract. Inc. perform (Steelgard, rial resources necessary Thus, 152].) must while a bid Cal.Rptr. 171 Cal.App.3d i.e., call contained any specifications be comply “responsive,” bids, those must relevant to determination whether the specifications is “responsible.”1 bidder
The majority attempts bring compli- requirement documenting (M/WBE) ance with the women-owned minority- and business enterprise outreach framework it en- by finding within foregoing hances goals sector competition promotes public therefore, bidding; it does not conflict with the best charter’s “lowest and bidder” mandate. After careful consideration regular responsible I am outreach was intended to or does analysis, unpersuaded compliance this accomplish majority’s rationalization is created purpose. essentially fact, out of whole cloth. In with its point extensive faith effort and documentation narrows the field of requirements, program potentially bidders, undermines qualified meaningful competition, can lead to only the city’s fiscal detriment contributing to contractual costs. higher
Most the critically, fails majority to relation- сonspicuously identify any between of documentation faith outreach ship efforts and the question of whether a has prime contractor “the fitness and to quality, ... capacity satisfactorily perform the (City work.” proposed Inglewood-L.A. County Court, Civic Center 867.) Auth. v. Superior 7 Cal.3d at supra, p. Nor would such a demonstration be since possible documentation concerns compliance whether bidder is only “responsive,” (See not whether isit “responsible.” Am. Combustion v. Minority 1982) Business Opportunity 441 A.2d (D.C.App. 660, 671; 843, Gilbert Cent. (D.Kan. 1986) v. Corp. Kemp 637 F.Supp. 848-849; also, ante, Thus, 1.) see fn. as a threshold if the out- proposition, eliminate, here, reach to requirement operates as it did lowest capable bidders, it conflicts with the charter mandate whether or it enhances competitiveness. example, 1 For the Hyperion “General Instructions and Information for Bidders” on the project contained specifications numerous program. addition to the outreach With limited exceptions, they all related to qualifications competent the bidder’s to do work in a the financially insurance, city, sound manner including bonding without risk the construc schedules, Charter, damages. (See 386(c) tion liquidated (d).) also & L.A. Other § than program, the outreach only exceptions the governed by superseding were matters state law, utilization, and federal such prevailing wаge, as apprenticeship and nondiscrimination obligations. The materials also regarding city’s employment contain information training policy, which requires bidders to submit a compliance. declaration of This appears to be job placement youth an effort to disadvantaged facilitate residing and adults city. only obligation in the The the part identify on of a is potential openings bidder for these individuals and consider them for employment they qualified. extent are Unlike program, set, mandated, outreach no minimum level is no outreach is and no further required. Accordingly, documentation is it not appear does inconsistent with the charter’s “lowest best” limitation.
182 rule” is that the
Moreover, public and well-established the “long to stifle competition. restrictions tending be free of “must process (1962) 208 Court v. (Baldwin-Lima-Hamilton Corp. Superior [Citations.]” 798].) To the extent a mandatory good 821 Cal.Rptr. Cal.App.2d [25 effort, extensive documentation requirements, including faith outreach do bidders otherwise “qualified tends to discourage disqualify prime County (City Inglewood-L.A. under consideration” work particular Court, 867), narrows Cal.3d at it supra, p. Civic Center Auth. v. Superior it, “defeating than thus rather expands the field of acceptable proposals v. (Baldwin-Lima-Hamilton Corp. bidding.” real objectives 822; Machines Court, Konica Business at Cal.App.2d p. Superior U.S.A., 206 Cal.App.3d California, supra, University Inc. v. Regents Inc., Electric, was Domar 456.) point: case proves This plainly at all and apparently bid on the Hyperion project prequalified the charter. Of note as mandated by has been considered “responsible” times bid, solely which was rejected the lowest it submitted to the taxpayers, A (Cf. Vending efforts. R & faith outreach document good failure to timely Services, (1985) 172 Angeles Cal.App.3d Los Inc. “ and contained ‘was unrealistic bidder’s proposal Cal.Rptr. 667] [Lowest view, result ”].) provides this anticompetitive my admitted inaccuracies.’ charter’s limitation run afoul of the express has indication strong contracts. of city letting as well. To begin other in many respects outreach suspect *20 including of the with, program, the record any aspect in nothing suggests efforts, the was intended to spur competition of faith documentation good (Nos. directives the executive Neither of mayor’s on contracts.2 city bidding in the level competition 1-C) deficiency identifies any perceived 1-B fact, indicates In the tenor of both business. works or other city for public affirmative action measure as an was formulated solely the outreach program The original of M/WBE’s city projects. wider involvement to generate “to utilize in all the was [M/WBE’s] directive announced that city’s policy construction, and personal relating procurement, of contracting aspects committed to substantially increasefd] services” and was “fully [M/WBE] . . . of the contracting,” in all City’s utilization and phases participation “stimulating advantageous the effect of program outreach has majority 2 The claims that the Public therefore “the Board competition” hypothesizes [of Works] place market securing City the best will assist the reasonably program have concluded that the could ante, fact, 174.) record In the contains (Maj. opn., at price practicable.” lowest work at the specifications its bid for program into incorporated board the outreach no evidence that the any purpose other than it did so for mayor’s directives or that independent of the reasons documents, no reference which contain city forth in those implementation policy of the as set competition. to enhancement of no reference to the broader bidding with improving competitive process. addition, Officers,” others, were “Affirmative Action city’s among assist directed to in “developing, managing, implementing” policy allowed under the Small program; percent preference city’s was “to Program Local Business to be used the maximum extent possible” M/WBE’s; to involve were to city departments report mоnthly including extent “dollar amounts of contracts awarded” implementation M/WBE’s.3
Most in direct to the tellingly, decision United States response by Court in J. A. Richmond v. Croson U.S. Supreme 469 [102 706], L.Ed.2d 109 S.Ct. a race- and invalidating gender-conscious set-aside on “clarified” his equal protection grounds, mayor directive that a original bidder’s “failure to meet explain expected [the levels of M/WBE set shall itself by awarding authority] be the basis . . .” The disqualification bidder . also commis- city Croson, sioned consistent with the study, dictates of to determine the incidence, if of intentional any, discrimination M/WBE’s in against id., (See 884-890]; at contracting. 498-506 L.Ed.2d at generally, pp. pp. Colorado, see also Concrete (10th Works Inc. v. & County Denver 1994) time, 1523-1530.) Cir. 36 F.3d At the same new directive reiterated the earlier statements policy agencies and directed continue to condition of bid from otherwise acceptance proposals qualified contrac- tors documentation of faith outreach efforts measured nine criteria. This specific obvious concern that the outreach not fall to an prey equal efforts to protection challenge, coupled satisfy constitutional restrictions on race- and imposed gender-conscious public Croson, contracting practices under an unmistakable social places policy on the stamp unrelated program, articulated need or intent enhance for the (See benefit general city. generally, Colorado, Concrete City County Denver, supra, Works Inc. & 36 F.3d 1520-1522.) pp. *21 Moreover, the city has essentially admitted its social At policy agenda. this an point, awarding agency’s concern in only bidder’s determining efforts; responsiveness is of good documentation faith outreach actually M/WBE securing is irrelevant if not the accompanied by appropriate For in this case Domar has paperwork. example, although qual- WBE, ified with the California of as a Department Transportation city supplied similarly City 3 information to bidders in case policy this states: “It is the of the of Angeles provide Los equal opportunity to an in of participate performance [M/WBE’s] City all taking contracts. City implementing policy by Bidders shall assist in all this steps qualified reasonable any including to ensure that enterprise available business equal have opportunity compete City an for in participate [M/WBE’s] contracts.” its M/WBE low bid for failure outreach documen- rejected timely provide As Associated tation. General Contractors v. explained of California Francisco, County supra, San considerations into interjecting do the that do a contractor’s bidding process implicate qualifications work in to “the charter’s that contracts mandate question contrary omitted; (813 fn. Konica awarded the lowest bidder.” F.2d at cf. p. U.S.A., v. University supra, Business Machines Inc. Regents California, Court, 456; Corp. at Baldwin-Lima-Hamilton v. Cal.App.3d Superior p. 822.) supra, Cal.App.2d p. the outreach city evidence instituted
Notwithstanding indisputable reasons extrinsic to the “lowest best wholly regular respon- sible bidder” and its the majority injunction underlying goals purpose, valid it finds the faith documentation because requirement promotes on the unex- market this inaccurate rests competition. Implicitly, predicate amined, unsubstantiated, have and on this record that the could premise city better,” i.e., “more is that the number increasing determined reasonably bid will each its final submitting subcontractors considered prime economical, For the results for the highest city. most produce quality follow, I no intuitive for this support assump- reasons that find empirical tion.
First, had that its record concern nothing suggests their intended were not adequately serving standard bidding procedures that befall the might government “to of ills protect against variety purpose: sloth, on the lack of or carelessness part process: imagination procurement bidders; contracts; notice to potential those who award public inadequate or misinforma- to act the basis of ignorance officers on causing contracting tion; and, all, to assure insufficient most important competition perhaps for the least money. the most work government gets [Citation.]” San (Associated County General Contractors of California some Francisco, had in identified 926.) If the fact 813 F.2d at re- with documentation an elaborate outreach replete inadequacy, set would be to expedient seems an ill-suited remedy. logical quirements work for designated a minimum number of subcontractor bids portions Moreover, (See, 4.) though prime even post, fn. any given project. M/WBE’s, solicitation mandating limited to considering contractors are not subcontractors narrow field of efforts that to focus on a tend exclusively *22 the well have opposite enhance competition may cannot reasonably Court, Corp. Superior Baldwin-Lima-Hamilton (Cf. effect.4 822.) at p. Cal.App.2d to record is devoid of evidence from which rationally equally any
conclude that the M/WBE outreach as presently implementing program formulated would as a matter enhance Several factors competition.5 practical itself, the the warrant conclusion. at structure of contrary Looking program is the to evaluate faith efforts if the authorizing agency good by determining bidder’s efforts “could be to ... level of expected producе” specified M/WBE the level is set and varies from contract participation; by agency Here, to contract. the Los set Board Public Works the level of Angeles 1 percent. M/WBE at Even Hyperion project assuming the outreach would in some manner competitiveness, such augment an could no insignificant have more than proportion activity negligible words, on the contractor’s ultimate bid.6 In other financial impact prime to advantage to the was be nil. city likely alone, however, In this case was even reality, consequence worse:
the “benefit” of market “stimulating” documenta- competition by mandating tion of faith outreach efforts to was an increased cost and its $650,000, of more than the amount which taxpayers Controls Bailey bid exceeded Domar’s. The to Company’s majority’s attempt this justify from the charter mandate on the somewhat blithe departure as well as unsustainable that supposition “consistent enforcement of the outreach re- lead, term, will in the quirement to lower contract long prices” (maj. opn., ante, 175) untenable, legally reflects factually quintessential majority mayor’s *23 that “over time” record contains no evidence thinking. in the sky”
“pie and services of less costly goods can or will provide M/WBE subcontractors Charter section Los Angeles City More importantly, quality. acceptable every award each and that the and its 386(f) agencies commands clear, and bidder. This is precise, lowest language contract to the responsible the majority’s accommodate the kind of “averaging” It does not unequivocal. attributable to touted value competitive Any analysis superimposes. documentation compliance is outreach strictly hypothetical; As this with the charter’s mandate. in direct conflict fact reduces competition “ works ‘To a local public than 20 years ago, permit court more agreed the bid of a reject qualified or impliedly contracting agency expressly deemed to be in favor of a bidder higher lowest bidder monetary responsible laws and bidding frustrates the very purpose competitive more qualified works awarded projects in having public violates the interest of the public cost, the lowest favoritism, constructed at without excessive without ” and expectation completion.’ the reasonable quality consistent with price Court, Center Auth. v. Superior Civic County (City Inglewood-L.A. 867.) Cal.3d at p. faith determine addition, good city agencies which by process arbitrariness, cronyism invites the very subjectivity,
outreach efforts Machines (Cf. Konica Business is intended to eliminate. U.S.A., Cal.App.3d California, supra, University Inc. v. Regents of each Here, Works informed Board of Public 457.) the Los Angeles demonstration a “positive adequate bidder that it required prequalified enumer- to 10 according faith efforts of the Board” of good the satisfaction demonstra- this and adequate measure of only “positive criteria. The ated bidder’s of whether the hoc assessment ad apparently tion” was the board’s . . . sub-bid participation sufficient “to obtain [M/WBE] outreach effort was of Public Works produce [1 the Board be expected by which can each . . . .” While interested businesses level percent] totaling number possible points a specific was assigned criterion on which the assign- no rational basis record reveals maximum Moreover, less than precise. themselves criteria are made. many were ments with interested faith have a bidder must “negotiated example, For unsatisfactory as rejected] and ... not unjustifiably [M/W/OBE’s] these quan- but none of provisions by any enterprise”; sub-bids prepared the vague Taken in conjunction terms. tified or defined objective evaluated, entire was faith effort which the overall good standard by of the compet- to the detriment for abuse was rife with potential process affairs. of city public suspicion thereby heightening itive bidding process, 1].) P. 241-242 (1896) 114 Cal. (See Ertle v. Leary
187 faith conclusion documentation outreach good majority’s is also some efforts consistent with goals ignores First, increase in the critical economic realities. associated any bureaucracy (Cf. their cost. bids on contracts will increase submitting city inevitably et burden on small busi- [citing minimizing 44 U.S.C. 3501 seq. part § Act].) as of federal Reduction their Paperwork By nesses cost purpose nature, both faith efforts and the documentation involve consider- good effort, time, all able of which a considerable mon- expense, represents (Cf. loss for the unsuccessful v. bidders. Gilbert Cent. etary Corp. Kemp, 850 letters and 5 calls with F.Supp. telephone generic [14 information about held insufficient to demonstrate project faith city “good effort”].) So much for the encouragement a business climate. healthy Furthermore, those contractors not prime inhibited this possibility may or recoup some all of the additional overhead expense by their increasing bids, which the will have to absorb when it city eventually awards final contract. some outreach criteria also tends to
Satisfying discourage cost-effective practices contractors. For by prime to demonstrate faith example, a bidder must “subdivide the total compliance, contract work requirements into smaller or maximum active portions quantities permit Such subdivision is a likely contractor preclude prime [M/W/OBE’s].” from taking economies advаntage of scale offered by larger suppliers, cost, on its own relying in-house facilities at a lower or otherwise benefiting from the ability Moreover, to maintain a consolidated a operation. prime contractor must have confidence that subcontractors it considers any possess acumen, the technical efficiency, and financial stability perform manner, in a project competent timely as the itself just did this documentation, case when it the bidders. prequalified As with substantiating time, effort, subcontractor’s qualifications takes Whether or expense.7 not this requirement it is promotes reduce the competition, unlikely overall for price pays goods services.
Conclusion While courts generally will consider the motive of or legislative executive (see, officers in construing their actions Los e.g., County of 721, v. Angeles Superior (1975) Court 13 Cal.3d 726-727 Cal.Rptr. 7 Since a subject bidder to disqualification for been having “previously delinquent or performance (L.A. Charter, any unfaithful City” former contract with 386(f)), deficiencies, which would include prime § subcontractor contractors cannot take lightly. this task too 495]), on occasion the purpose goal may 532 P.2d underlying intent of a enactment and thus relevant
highly determining particular (Cf. Village Arlington Heights its assessing validity. proper subject 252, 265-266 U.S. 50 L.Ed.2d Metropolitan Housing Corp. *25 464-465, 97 S.Ct. relevanсe discriminatory purpose [recognizing 555] decision].) terms of the assessing express mayor’s validity rezoning that the of Los Angeles executive directives make it clear indisputably in an effort remedy the M/WBE outreach program perceived promulgated enhance not to contracting, discrimination these against enterprises city While the at liberty the competitive bidding process. generally it is it enact measures finds social appropriate implement policy, whatever own do of its so within limitations nevertheless bound express case, contractors In this requirement prime charter. governing efforts M/WBE outreach document faith projects the field bidders expands capable performing narrows rather than It thus competition. plainly work in question, thereby stifling, increasing, best let to the lowest and mandate that contracts “shall be contravenes the Charter, added.) 386(f), (L.A. italics bidder.''’ regular responsible § stated, of the Court I would affirm the judgment For the reasons Appeal. was denied 1995. February a rehearing
Appellant’s petition Arabian, J., should be granted. that the petition was opinion 4 The notes expanded that the second directive the outreach i.e., ante, enterprises,” (OBE’S), include “other business (Maj. opn., p.at non-M/WBE’s. 8.) fh. This appears addition as an program’s potential much effort distract from the fоllowing constitutional attempt weakness as competitiveness. Croson an further to enhance case, respect particular At least with including this practical effect of “other business enterprises” appears negligible provided by Angeles since the bid material the Los Board of M/WBE’s, emphasize Public Works still particular setting expected continued Moreover, level participation. if city actually sought competition among increase promote subcontractors rather than policy, simply requiring social a minimum number of accomplish sub-bids would purpose compulsion specific mandatory without the outreach only efforts that can the process prime encumber to the add contractor’s overall expense. extent, awaiting 5 Sincethe is still the results of study any, its commissioned on the if against of discrimination public contracting, support M/WBE’s in key there is no for another assumption majority’s analysis: enterprises presently participating that these are not Moreover, process excluded, in adequate they numbers. if even had been record contains no evidence such actually competitive process exclusion has impaired the resulted in prices inflated city. contractual for the terms, put $33,000. 6 To these numbers percent in concrete of Domar’s bid was