Electric Const. Co. v. Flickinger

• Decision Date: 27 May 1971
• Docket Number: No. 10187--PR,10187--PR
• Citation: 107 Ariz. 222,485 P.2d 547
• Parties: ELECTRIC CONSTRUCTION CO., Inc., Appellant, v. Kenneth G. FLICKINGER, Registrar of Contractors of the State of Arizona, Appellee.
• Court: Arizona Supreme Court

Page 547

485 P.2d 547

107 Ariz. 222

ELECTRIC CONSTRUCTION CO., Inc., Appellant, v. Kenneth G. FLICKINGER, Registrar of Contractors of the State of Arizona, Appellee.

No. 10187--PR.

Supreme Court of Arizona, In Banc.

May 27, 1971.

Rehearing Denied June 22, 1971.

Gary K. Nelson, Atty. Gen., Phoenix, Lewis & Roca, by John P. Frank, Special Deputy Attys. Gen., Phoenix, for appellee.

Lawrence K. Bret Harte, Tucson, for appellant.

STRUCKMEYER, Chief Justice.

The question on this appeal is whether a subcontractor who works on a federal job in Arizona is required to obtain a State contractor's license. The trial court answered this question in the affirmative, and enjoined certain subcontractors who were not licensed in Arizona from performing contracts at Davis Monthan Air Force Base in Tucson, Arizona. The injunctions were stayed pending the appeal of the Electric Construction Co., Inc., one of the subcontractors. We granted review. Opinion of the Court of Appeals, 12 Ariz.App. 500, 472 P.2d 111, vacated. Judgment of the Superior Court reversed.

The Electric Construction Company, a California corporation, is unlicensed in Arizona. It engaged in certain construction at the Davis Monthan Base pursuant to subcontracts with the general contractor, Forsberg and Gregory, also a California corporation unlicensed in Arizona. The jobsites at the Davis Monthan Base admittedly do not have federal enclave status. 40 U.S.C. § 255.

The U.S. Supreme Court in Leslie Miller Inc. v. Arkansas, 352 U.S. 187, 77 S.Ct. 257, 1 L.Ed.2d 231, held that a prime contractor, similar to the general contractor in this case, could not be fined because it worked on a federal jobsite in Arkansas and failed to obtain a license from the Arkansas Contractors Licensing Board. The Arkansas licensing law set forth certain factors which the contractors licensing board had to consider in its determination of the qualifications of an applicant for a contractor's license--experience, ability, character, the manner of performance of previous contracts, financial condition, equipment, any fact tending to show ability and willingness to conserve the public health and safety. Arizona has like qualifications and others. A.R.S. § 32--1122.

The Supreme Court was of the opinion that the Arkansas licensing statutes conflicted with the Armed Services Procurement Act of 1947, 10 U.S.C. § 2305(c), providing that awards on advertised bids shall be made to the 'lowest bidder' and the Procurement Regulations adopted pursuant to the Act set forth these guiding considerations defining a responsible contractor:

'(a) Is a manufacturer, construction contractor, or regular dealer * * *

(b) Has adequate financial resources, or ability to secure such resources;

(c) Has the necessary experience, organization, and technical qualifications, and has or can acquire the necessary facilities (including probable subcontractor arrangements) to perform the proposed contract;

(d) Is able to comply with the required delivery or performance schedule (taking into consideration all existing business commitments);

(e) Has a satisfactory record of performance, integrity, judgment, and skills; and

(f) Is otherwise qualified and eligible to receive an award under applicable laws and regulations.' 77 S.Ct. at 258, 1 L.Ed.2d at 232--233.

It has been repeatedly held that regulations such as these have the force of law, See e.g., Public Utilities Commission of State of Cal. v. United States, 355 U.S. 534, 78 S.Ct. 446, 2 L.Ed.2d 470; hence, the Court reasoned that the different requirements would give the state board a virtual power of review over the federal determination of responsibility, thus frustrating the 'expressed federal policy of selecting the lowest responsible bidder.'

Obviously, where the government makes a direct determination of a subcontractor's responsibility, Miller v. Arkansas would be controlling; but where the federal government does not make a direct determination, can the principle of the case extend to a subcontractor to relieve him from complying with the state la...