Georgia Branch, Associated General Contractors of America, Inc. v. City of Atlanta

• Decision Date: 11 October 1984
• Docket Number: No. 40937,40937
• Citation: 253 Ga. 397,321 S.E.2d 325
• Parties: GEORGIA BRANCH, ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC. et al. v. CITY OF ATLANTA et al.
• Court: Georgia Supreme Court

Page 325

321 S.E.2d 325

253 Ga. 397

GEORGIA BRANCH, ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC. et al. v. CITY OF ATLANTA et al.

No. 40937.

Supreme Court of Georgia.

Oct. 11, 1984.

J. Ben Shapiro, Jr., Charles V. Choyce, Jr., Stokes, Shapiro, Fussell & Genberg, Overton A. Currie, Robert B. Ansley, Jr., Philip E. Beck, Smith, Currie & Hancock, Atlanta, for Georgia Branch, Associated General Contractors of America, Inc., et al.

Marva Jones Brooks, Gary S. Walker, Alford J. Dempsey, Jr., Flora B. Devine, City of Atlanta Dept. of Law, Atlanta, for City of Atlanta et al.

Ben B. Blackburn, G. Stephen Parker, Robert B. Baker, amicus curiae.

GREGORY, Justice.

This case decides the question of the validity of an affirmative action ordinance of the City of Atlanta. The ordinance provides favored treatment for minority and female owned business enterprises in the award of city contracts. Appellants, associations of largely non-minority and nonfemale contractors, filed two separate suits, later combined in the trial court, seeking declaratory and injunctive relief as well as damages, costs and attorney fees. Grounds alleged for relief were the ordinance violates state and federal constitutional principles, state and federal statutes, and city code requirements. The trial court denied motions for summary judgment filed by the contractors and this court granted an application for interlocutory appeal. We reverse.

We must decide if the city possessed the authority to enact an ordinance for the purpose of correcting the effects of past discrimination, which is race and sex conscious. The corrective action taken was in the form of a requirement that percentages of the dollar value of certain contracts be allocated to special classes of business enterprises: (1) those owned by minorities or (2) females.

The ordinance was enacted by the Atlanta City Council in 1982. It is known as the MFBE Ordinance. (Minority and Female Business Enterprises), Chapter 5, Article M, § 5-516, et seq. of the Code of the Ordinances of the City of Atlanta. Under the ordinance a project is eligible if the city: spends $25,000 or more for construction or repair to real estate; spends funds for professional or consultant services where work by more than one professional is anticipated; or, grants concession rights in excess of $25,000 per annum in value. A minority business enterprise (MBE) is defined as a business entity of which at least 51 per cent of the ownership and control is by minority persons. The same percentage of ownership and control is established for a female business enterprise. (FBE) A minority person is either Asian, Black, Hispanic, or Native American. These several terms are also defined. The Mayor is required to set separate goals annually for MBE and FBE participation. While the Mayor has not set goals as required, it is undisputed that the Office of Contract Compliance of the city has enforced the ordinance by requiring 20 per cent to 35 per cent MBE participation on most projects. See, DiMambro-Northend Associates et al v. Blanck-Alvarez, Inc. et al, 251 Ga. 704, 309 S.E.2d 364 (1983).

1. As indicated above, the appellants have attacked the MFBE ordinance on a

number of grounds including alleged violations of the federal constitution and federal statutes. We decide the case entirely on the issue of the authority of the city under state law to enact the ordinance. This renders unnecessary any analysis of the merits of affirmative action measures under constitutional considerations. See, Regents of the University of California v. Bakke, 438 U.S. 265, 98 S.Ct. 2733, 57 L.Ed.2d 750 (1978); Fullilove v. Klutznick, 448 U.S. 448, 100 S.Ct. 2758, 65 L.Ed.2d 902 (1980). In addressing first the non-constitutional state law grounds we adhere to the established rule of this court. City of Columbus et al v. Stubbs, 223 Ga. 765, 767, 158 S.E.2d 392 (1967); Great Atlantic and Pacific Tea Co. v. City of Columbus, 189 Ga. 458, 465, 6 S.E.2d 320 (1939).

2. In an act reincorporating the City of Atlanta under a new charter, the legislature established certain requirements governing purchasing procedures:

"SECTION 6-402. PURCHASING PROCEDURES. The governing body shall prescribe by ordinance and resolution the procedures for all purchases of real and personal property by the City. Competitive bidding shall be required for purchases and contracts under rules of the governing body, and awards shall be made to the lowest and/or best bidder; provided, the governing body by ordinance may authorize the purchase of goods, materials, supplies, equipment and services without the receipt of formal sealed bids where the price does not exceed a specified dollar amount as defined therein. Prior to the making of purchases and contracts, the availability of adequate funds shall be certified by the Director of Finance as provided by ordinance." Ga.Laws 1973, p. 2188 at 2247.

The charter of the city thus requires the award of contracts to the "lowest and/or best bidder." The quoted phrase is not defined in the charter but it and similar phrases are frequently used. In Hilton Construction Co. v. Rockdale County Board of Education, 245 Ga. 533, 266 S.E.2d 157 (1980), there was a State School Board Regulation which required state funded projects be awarded to "the responsible bidder submitting the lowest acceptable bid." In spite of this requirement the county school board awarded a construction contract to the second lowest bidder on the basis the second lowest bidder was known to the board while the lowest bidder was unknown to the board. We held that...