Desilva Gates Constr., LP v. Dep't of Transp.

• Decision Date: 14 December 2015
• Docket Number: C074521
• Court: California Court of Appeals Court of Appeals
• Parties: DESILVA GATES CONSTRUCTION, LP, Plaintiff and Respondent, v. DEPARTMENT OF TRANSPORTATION et al., Defendants and Appellants.

242 Cal.App.4th 1409

195 Cal.Rptr.3d 891

DESILVA GATES CONSTRUCTION, LP, Plaintiff and Respondent,

v.DEPARTMENT OF TRANSPORTATION et al., Defendants and Appellants.

C074521

Court of Appeal, Third District, California.

Filed December 14, 2015

Ronald W. Beals, Jeanne Scherer, Todd Van Santen, Sacramento, Erin E. Holbrook, for Department of Transportation; John F. Hodges for Papich Construction Company, Inc., Defendants and Appellants.

Archer Norris, W. Eric Blumhardt, Erin M. Gallagher, Walnut Creek; Smith & Brockhage, Randall M. Smith and Michael Willcoxon, Dublin, for Plaintiff and Respondent.

HOCH, J.

The California Department of Transportation (CalTrans) and Papich Construction Company, Inc. (Papich) appeal from the trial court's issuance of a writ of mandate to vacate the award of a public works contract to Papich. The trial court granted the writ on grounds CalTrans erroneously rejected a bid by DeSilva Gates Construction LP (DeSilva) as nonresponsive, and erred by awarding the contract to Papich despite Papich's failure to comply with a material requirement of the information for bids. On appeal, CalTrans and Papich argue DeSilva's bid was nonresponsive because DeSilva impermissibly changed its list of subcontractors. Appellants also argue CalTrans had discretion to waive Papich's mistake in failing to acknowledge the addendum to the information for bids.

On our own motion, we requested that the parties address whether this case has become moot. Based on the parties' representations, we conclude this case remains justiciable.

DeSilva has elected not to file a respondent's brief. Nonetheless, we "examine the record on the basis of appellant's brief and ... reverse only if prejudicial error is found. (Baldwin v. Baldwin (1944) 67 Cal.App.2d 175, 153 [P.2d 567] ; Jarvis v. O'Brien (1957) 147 Cal.App.2d 758, 305 P.2d 961.)" (Walker v. Porter (1974) 44 Cal.App.3d 174, 177, 118 Cal.Rptr. 468.) In this case, we conclude the trial court did not err. DeSilva's disclosure of a subcontractor performing work amounting to only one-tenth of one percent of the total value of the contract was not required by the Public Contract Code¹ or CalTrans's information for bids. The additional information was accurate, albeit unnecessary, and did not render DeSilva's bid nonresponsive. By contrast, CalTrans initially declared Papich's bid to be nonresponsive and then waived Papich's mistake and determined the bid to be responsive. We conclude CalTrans abused its discretion by awarding Papich the contract. Accordingly, we affirm the trial court's issuance of the writ of mandate.

FACTUAL AND PROCEDURAL HISTORY

CalTrans's Information for Bids

In July 2012, CalTrans issued an information for bids on a construction project estimated to cost $34 million to widen a section of Highway 99 in Tulare County. The invitation for bids contained a section regarding disclosure of subcontractors that instructed bidders as follows:

"2–1.12C Subcontractor List [¶] In the Subcontractor List, list each contractor to perform work in an amount in excess of 1/2 of 1 percent of the total bid or $10,000, whichever is greater ( ... § 4100 et seq.) [¶] The Subcontractor List must show the name, address, and work portions to be performed by each subcontractor listed. Show work portion by bid item number, description, and percentage of each bid item subcontracted. [¶] On the Subcontractor List you may either submit each subcontracted bid item number and corresponding percentage with your bid or fax these numbers and percentages to (916) 227–6282 within 24 hours after bid opening. Failure to do so results in a nonresponsive bid." (Italics added.)

On September 7, 2012, CalTrans issued an addendum to the information for bids. Specifically, the addendum indicated that (1) bids would be opened on September 14, 2012 instead of September 11, 2012, (2) project plan sheets 142, 143, 145, and 146 were revised, and (3) items 59, 60, and 77 in the bid book's "Bid Item List" were revised as well. The addendum concluded by advising potential bidders to: "Submit bids for this work with the understanding and full consideration of this addendum. The revisions declared in this addendum are an essential part of the contract."

The Submitted Bids

CalTrans received and opened nine bids on September 14, 2012. Security Paving Company, Inc. (Security) submitted the lowest bid for $30,584,331. DeSilva submitted the second-lowest bid by offering to perform the work for $31,677,677. DeSilva's bid included the names and description of work by all subcontractors slated to perform work exceeding one-half of one percent of the bid amount. The same day, DeSilva faxed to CalTrans additional information within 24 hours of bid opening (24–hour subcontract list). DeSilva's 24–hour subcontractor list included All Steel Fence, a subcontractor not listed in DeSilva's bid. All Steel Fence was listed as performing "fences, gates, railing" work—work that constituted all of bid item numbers 139 and 140 as well as one percent of bid item number 143. Cumulatively, All Steel Fence was estimated to perform $15,023 worth of work. Papich submitted the third-lowest bid, proposing to perform the work for $32,611,185. Papich's bid did not acknowledge or accept the addendum to the information for bids.

CalTrans's Assessment of the Bids

CalTrans determined Security's bid to be nonresponsive for revision of its subcontractor list after a protest by DeSilva on September 25, 2012. On September 25, 2012, DeSilva became the apparent low bidder.

On September 26, 2012, CalTrans sent a letter to Papich noting the company "failed to acknowledge Addendum # 1 dated September 7, 2012, ... on the signature page ... of its bid proposal. [CalTrans] considers the addendum to be a material amendment to the contract and is unable to identify in Papich's bid submittal that it considered and agreed to be bound to the terms of said addendum. [¶] A bidder's failure to acknowledge a material amendment to the contract renders its bid nonresponsive. Unless Papich is able to provide documentary evidence that it establishes it considered and agreed to be bound by the requirements of Addendum # 1 its bid may be rejected."

In the same letter, CalTrans noted Papich listed subcontractors Truesdell Corporation and Viking Construction as each performing one hundred percent of several of the same tasks, including removal of unsound concrete, preparing concreted bridge surface, rapid setting concrete patch, and five more tasks. In the letter, CalTrans cured the problem by stating that "[i]f Papich is awarded contract 06–360214, it must perform" these tasks "with its own forces" to comply with section 4106.

On September 27, 2012, Papich sent a response letter stating: "It is the intent of [Papich] to provide, as requested, evidentiary proof of receipt (Attachment 1) and acknowledgement included with the bid book (Attachment 2) of Addendum # 1 for the above mentioned contract. [Papich] also contends that the information provided by [CalTrans] in Addendum # 1 was reviewed, understood and utilized in the preparation of our bid proposal for this contract. [Papich] also agrees to be bound by the requirements of Addendum # 1."

On September 28, 2012, DeSilva sent a letter to CalTrans noting DeSilva had inadvertently supplied CalTrans with additional information on the subcontractor list "above and beyond what was required." DeSilva explained it had not listed All Steel Fence as a subcontractor in its bid because the value of the bid items it would perform was less than one-half of one percent of the bid and the information for All Steel Fence included on the subcontractor list submitted within 24 hours of the bid was additional information that was not required.

On October 3, 2012, Papich challenged DeSilva's bid as having changed the subcontractor list.

On October 9, 2012, CalTrans rejected DeSilva's bid as nonresponsive and explained: "Since [DeSilva] originally decided to self perform Fences, Gates and Railing, but subcontracted those items to All Steel Fence, Inc. on the revised bid list received on September 14, 2012, CalTrans finds your bid is nonresponsive. CalTrans will proceed to award the contract to the lowest responsible bidder provided all requirements are met."

On October 22, 2012, DeSilva protested CalTrans's determination that its bid was nonresponsive and protested Papich's bid. On November 28, 2012, CalTrans agreed with part of the protest and determined Papich's bid to be nonresponsive. CalTrans informed Papich that "its bid is nonresponsive because it failed to properly submit the Subcontractor List." However, on December 4, 2012, CalTrans rescinded its determination based on its conclusion that some of the items separately listed as structure excavation, structure concrete, and structure backfill were parts of what was otherwise described as "bridge work." CalTrans's December 4, 2012 letter to Papich did not address Papich's failure to acknowledge the addendum to the information for bids.

On December 7, 2012, CalTrans rejected DeSilva's protest and explained no unfair advantage was granted to Papich by asking for evidentiary documentation proving it considered and agreed to be bound by the addendum. Also on December 7, 2012, CalTrans sent a letter to DeSilva affirming its determination DeSilva's bid was nonresponsive and awarding the contract to Papich.

Issuance of the Writ of Mandate and Subsequent Appeal

In January 2013, DeSilva filed a petition for writ of mandate in which it requested that the trial court invalidate CalTrans's award of the contract to Papich. CalTrans and Papich opposed the petition. The trial court issued a statement of decision in which it explained CalTrans erred in determining DeSilva's bid to be nonresponsive and in waiving Papich's failure to agree to the addendum to the information for bids. Papich objected to the statement of decision, and the trial court overruled the objections.

In August 2013, Papich and CalTrans timely filed...