Equitable Shipyards, Inc. v. State By and Through Dept. of Transp., 46330
| Decision Date | 08 May 1980 |
| Docket Number | No. 46330,46330 |
| Citation | 93 Wn.2d 465,611 P.2d 396 |
| Court | Washington Supreme Court |
| Parties | EQUITABLE SHIPYARDS, INC., Appellant, v. The STATE of Washington, By and Through its DEPARTMENT OF TRANSPORTATION and the Washington State Transportation Commission, Respondent, v. MARINE POWER & EQUIPMENT CO., Intervenor. |
Graham & Dunn, Charles S. Mullen, Seattle, for appellant.
Slade Gorton, Atty. Gen., Thomas R. Garlington, Sr., Atty. Gen., William G. Boland, Asst. Atty. Gen., Olympia, for respondent.
Aiken, St. Louis & Siljed, Wallace Aiken, Gregory L. Bertram, Seattle, for intervenor.
Equitable Shipyards, Inc., of New Orleans (Equitable), complains that the State Transportation Commission (Commission), the directing entity of the Department of Transportation (Department), acted arbitrarily and capriciously in awarding a ferry construction contract to Marine Power & Equipment Co., of Seattle (MP&E). Additionally, Equitable challenges: (1) the constitutionality of a statute limiting review of the Commission's administrative decision; (2) the constitutionality of a bidding preference statute; and (3) the construction of that statute. See RCW 47.60.650-.670. The trial court rejected Equitable's challenges and the case is here upon certification from Division Two of the Court of Appeals. Equitable requests this court to direct that it be awarded the contract; remand to the trial court for further proceedings; or remand to the Commission for further proceedings. We affirm the trial court.
In the course of this opinion, for convenience and when appropriate, the Commission and the Department will be collectively referred to as the "State".
In 1977, the legislature authorized construction of additional ferries through an award of a construction contract to a shipbuilder. Laws of 1977, 1st Ex.Sess., ch. 166, p. 610; RCW 47.60.650. 1 The shipbuilder was to be selected through a competitive design-bidding procedure. Any firm Under RCW 47.60.650(4), a request for proposals (RFP) for construction of six ferry vessels was issued to prequalified firms. The RFP required complete vessel design specifications to be furnished and that the ferries be delivered in 6-month intervals from November 30, 1979 to May 30, 1982. Basic requirements that the ferries must meet to be considered were set forth in the RFP.
desiring to compete for the contract was required to prequalify as prescribed in RCW 47.60.660 before a bid or proposal would be considered. August 1977, the Department issued notice of intent to request proposals for design and construction of ferry vessels. By November 1977, seven shipyards had prequalified, including MP&E and Equitable.
Those to the RFP were authorized to submit a base proposal and two alternates. The RFP included copies of the forms the Commission would use in evaluating proposals.
On or about December 30, 1977, Equitable and MP&E each submitted three proposals. Under RCW 47.60.650(9), all proposals constitute an offer and remain open for 90 days after submission. RCW 47.60.650(5) provides for evaluation of proposals:
The (Commission) shall evaluate all timely proposals . . . for compliance with the requirements specified in the request for proposal, and, in addition, shall estimate the operation and maintenance costs of each firm's vessel design . . .
After evaluation, the Commission was to select the firm presenting the proposals "most advantageous" to the state, taking into consideration the RFP requirements and the in-state preference provided in RCW 47.60.670. RCW 47.60.650(6). RCW 47.60.670 establishes a "preference" for shipbuilding firms located in Washington, "providing such bid or proposed price does not exceed by more than six percent the lowest price proposal for a negotiated contract The Department retained a naval architect to assist in evaluating the proposals. Evaluation meetings were held with each shipbuilder on January 25, 1978. The naval architect estimated the life cycle costs of each proposal and issued a report dated January 30, 1978. Based on this evaluation, recommended ranking of six proposals was:
or the lowest comparable bid of any shipbuilding firm located outside the state of Washington."
(1) MP&E Alternate A
(2) Equitable Alternate A
(3) MP&E Alternate B
(4) Equitable Alternate B
(5) MP&E Base proposal
(6) Equitable Base proposal (not in compliance with RFP)
The rankings incorporated the 6 percent out-of-state "penalty" preference.
The report and recommendation were submitted to the Commission at an "adjourned regular meeting" on February 3, 1978. The Commission was responsible for evaluating and selecting the proposal most advantageous to the state. RCW 47.60.650(6)(a). By February 3rd all proposals satisfied the RFP, except the Equitable base proposal which was subsequently brought into compliance on February 17th.
The commissioners heard from the naval architect and representatives from both shipyards. Both firms were then permitted to submit additional information and provide their own evaluation of the proposals. Equitable introduced a memorandum objecting to the application of the 6 percent in-state preference. It also made repeated requests to review the plans and specifications of MP&E. The requests were denied.
Based on the additional information and the shipyard's evaluations, the naval architect reevaluated the proposals in a report dated February 17, 1978. The proposals were ranked as follows:
The Commission resumed its public meeting on February 20, 1978, hearing additional testimony from both shipyards. February 21, the Commission selected MP&E alternate A as the proposal most advantageous to the state, ranking the remaining proposals in the order recommended in the naval architect's report of February 17th.
February 27, 1978, Equitable filed notice of appeal 2 in Thurston County Superior Court under RCW 47.60.650(6)(b), which provides in part:
The (Commission's) decision shall be conclusive unless appeal therefrom shall be taken by an aggrieved firm to the superior court of Thurston county within five days after receiving notice of the (Commission's) final decision. The appeal shall be heard summarily within ten days after the same is taken and on five days notice By consent of all parties, MP&E intervened in the proceedings. In its original notice of appeal, Equitable alleged that the Commission acted arbitrarily and capriciously by: (1) incorrectly applying the 6 percent preference; (2) violating the Open Public Meetings Act; and (3) violating the public records act.
thereof to the (Commission). The court shall hear any such appeal on the administrative record which was before the (Commission). The court may affirm the decision of the (Commission) or it may reverse the decision if it determines the action of the (Commission) is arbitrary or capricious.
March 3, 1978, in the trial court hearing, it was agreed the State would not enter into a contract with MP&E until motions had been heard. At a March 10th hearing, Equitable moved to obtain: (1) plans and specifications of MP&E (2) prequalification files; and (3) all matters and documents considered by the commissioners.
The plans submitted by both shipyards had previously been placed in escrow. The State and MP&E resisted disclosure, asserting a protected proprietary interest. The trial court ruled that the plans and specifications were part of the record and permitted inspection under court supervision.
Regarding the prequalification files, the trial court ruled that the issue of prequalification was not presently reviewable. Under the prequalification process of RCW 47.60.660, Equitable, MP&E, and five other firms had been deemed prequalified. The trial court noted that the firms were entitled to rely on that determination and to proceed with preparation of proposals. 3
Equitable asserted that the financial ability of MP&E (a prequalification criterion) became an issue at the Commission hearing, thus the file which evaluated such matters was Equitable's "catchall" request for "all matters and documents" was rejected at the March 10th hearing as too general. Although there was a general consensus between the court and the parties that the allotted time for trial preparation might prove inadequate, the court, noting the provision in RCW 47.60.650(6)(b) that "(t)he appeal shall be heard summarily within ten days," set trial for March 23rd (subsequently continued to March 27th). Equitable's motion to present expert testimony to interpret or supplement the administrative record was denied.
relevant. The trial court ruled that financial data filed subsequent to the prequalification determination would be reviewed in camera; however, prequalification was not at issue. Subsequently, on March 21st, the court permitted Equitable to examine MP&E's prequalification file.
The trial court refused to entertain the constitutional challenge because RCW 47.60.650(6)(b) limited the scope of review to a determination of whether the action was arbitrary or capricious. The court noted, however, that the constitutional issue could be raised in a declaratory judgment action. March 27th, the trial began. On that date, the issue of arbitrariness and capriciousness was argued. The statutory interpretation issue regarding proper application of the 6 percent preference was heard the following day, March 28th.
March 30th, the trial court entered the following conclusions of law: (1) the court lacked the power and capacity to hear and determine constitutional questions regarding the application of the statute in the instant proceeding because the court's jurisdiction was predicated solely on RCW 47.60.650(6)(b); (2) the court lacked power in this proceeding to determine if the State violated the Open Public Meetings Act; (3) under RCW 47.60, the court could not receive expert testimony to introduce facts outside the administrative record or to explain the record; (4)...
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