Baldwin-Lima-Hamilton Corp. v. Superior Court In and For City and County of San Francisco

• Decision Date: 24 October 1962
• Docket Number: BALDWIN-LIMA-HAMILTON
• Citation: 25 Cal.Rptr. 798,208 Cal.App.2d 803
• Parties: CORPORATION, a corporation, Petitioner, v. The SUPERIOR COURT of the State of California, IN AND FOR the CITY AND COUNTY OF SAN FRANCISCO; Allis-Chalmers Manufacturing Company, a corporation; Ben Benas, as Purchaser of Supplies of the City and County of San Francisco; Harry D. Ross, as Controller of the City and County of San Francisco; and the City and County of San Francisco, a political subdivision, Respondents. Civ. 20694.
• Court: California Court of Appeals Court of Appeals

Page 798

25 Cal.Rptr. 798

208 Cal.App.2d 803

BALDWIN-LIMA-HAMILTON CORPORATION, a corporation, Petitioner, v. The SUPERIOR COURT of the State of California, IN AND FOR the CITY AND COUNTY OF SAN FRANCISCO; Allis-Chalmers Manufacturing Company, a corporation; Ben Benas, as Purchaser of Supplies of the City and County of San Francisco; Harry D. Ross, as Controller of the City and County of San Francisco; and the City and County of San Francisco, a political subdivision, Respondents.

Civ. 20694.

District Court of Appeal, First District, Division 1, California.

Oct. 24, 1962.

Hearing Denied Dec. 19, 1962.

Chickering & Gregory, San Francisco, for petitioner.

Harold C. Brown, Frank M. Brown, Johnson & Stanton, Gardiner Johnson, Marshall A. Staunton, San Francisco, for respondents.

Thomas M. O'Connoe, City Atty., William F. Bourne, Public Utilities Counsel, San Francisco, for respondents Ben Benas, Harry D. Ross and City and County of San Francisco.

SULLIVAN, Justice.

Petitioner Baldwin-Lima-Hamilton Corporation, hereafter referred to as Baldwin, seeks a writ of prohibition restaining 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 pendcnte lite.

The following background facts appear to be generally undisputed. On July 6, 1961, the purchasing department of the City and County of San Francisco, acting under the direction of Ben Benas, purchaser of supplies of said City, issued and published contract proposal No. 12625 inviting and calling for the submission of sealed bids for the furnishing and delivery of certain equipment including trubines, governors, valves and pipes for the Canyon Generating Station at the Canyon-Cherry Power Development. Prior to the time specified for closing of bids on August 7, 1961, both Baldwin and the Allis-Chalmers Manufacturing Company, hereafter referred to as Allis, submitted sealed bids. Baldwin's bid was in the sum of $1,356,386. Allis' bid was in the sum of $1,319,105. Benas first took the position that Allis' bid, although the low bid, was invalid because it deviated from the bid invitation in certain material respects. On October 26, 1961, however, acting pursuant to section 95 of the San Francisco Charter and to section 21.9 of the Administrative Code of the City, Benas formally rejected all bids on the above-mentioned contract proposal No. 12625. ¹

On November 20, 1961, Benas issued, as a new invitation, contract propossal 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 the same basis. (3) An additional bid of Baldwin in the sum of $1,237,036 based on the furnishing of certain component parts manufactured outside the United States. ²

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 (article VI, clause 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 Unjunctive 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, including the City and County of San Francisco; that Benas' action in rejecting Allis' first bid on August 7 'was wrongful, illegal and unlawful' in that such bid was the lowest responsible bid received, was without reservation or deviation from the contract proposal and therefore 'should have resulted in the award of said contract' to Allis; that Baldwin, in submitting on December 4, in connection with the second proposal No. 12885, its additional bid based on furnishing component parts from without the United States, committed a material deviation from the 'place of manufacture' clause and thus the contract proposal; that Baldwin's sole purpose in submitting such a bid was to obtain a competitive advantage over other bidders and as a result Baldwin did obtain such an advantage of not less than $250,000; that the contemplated action by Benas and Ross would be arbitrary and capricious and an abuse of discretion, causing great and irreparable damage to Allis; and that Allis 'is the party beneficially interested herein.' The prayer of such petition was that an alternative writ of mandate issue directed to Benas and Ross, commanding them 'to award the contract * * * to Petitioner as the lowest responsible bidder therefor * * * and to refrain from proceeding to award or certify said contract to Baldwin * * * or to any person other than Petitioner * * * [and] [f]or a temporary restraining order and for an Injunction Pendente Lite enjoining and restraining said respondents * * * [and all persons acting for them] from proceeding with the award or certification of the said contract * * * to Baldwin * * * or to any bidder or person other than Petitioner pending the final determination of this action.' The alternative writ of mandate was issued forthwith on January 24, 1962.

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 ex rel. Fogg v. Perris Irrigation District (1901) 132 Cal. 289, 291, 64 P. 399, 773.) Such complaint admits in general substance the background facts of the invitations for bids, the specifications as to place of manufacture, the bids submitted on each contract proposal, and the proposed awarding of the contract to Baldwin on its bid submitted on proposal No. 12885; alleges that prior to the rejection of Allis' bid opened on August 7, 1961, Benas requested opinions of counsel as to the lawfulness of such bid, copies of which opinions by the Public Utilities Counsel and by the City Attorney of San Francisco are attached to the complaint as exhibits and incorporated therein; denies that Allis' bid on the second contract proposal was the lowest responsible bid; denies that by submitting its additional bid (bid No. 3 above) it committed a material deviation from the specifications; denies that the purpose or effect of such did was to secure for Baldwin a competitive advantage; alleges in substance that Baldwin's above bid of $1,237,036 on the second contract proposal No. 12885 was the lowest and best bid received which the respondents had the right and duty to accept and certify; alleges that prior to determining to award said contract to Baldwin, Benas requested the opinion of counsel as to its lawfulness, a copy of which opinion of the City Attorney of San Francisco is attached to the complaint as an exhibit and incorporated therein; and denies that Allis is a party beneficially interested. The foregoing complaint in intervention also alleges that the petition for writ of mandate does not state facts sufficient to constitute a cause of action or sufficient to constitute cause for the issuance of the writ; that the court below has no jurisdiction over the subject matter of the proceeding; and that the action of the respondents in rejecting Allis' bid on the...