NORTHWEST LINE CONSTRUCTORS v. PUD

• Court: Washington Court of Appeals
• Writing for the Court: KENNEDY, J.
• Citation: NORTHWEST LINE CONSTRUCTORS v. PUD, 17 P.3d 1251, 104 Wn. App. 842, 104 Wash. App. 842 (Wash. App. 2001)
• Decision Date: 12 February 2001
• Docket Number: No. 45961-9-I.
• Parties: NORTHWEST LINE CONSTRUCTORS CHAPTER OF THE NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION, a foreign corporation; Cascade Chapter of the National Electrical Contractors Association, a Washington corporation; Puget Sound Chapter of the National Electrical Contractors Association, a Washington corporation, Southwest Washington Chapter of the National Electrical Contractors Association, a Washington corporation; Inland Empire Chapter of the National Electrical Contractors Association, a Washington corporation, Appellants, v. SNOHOMISH COUNTY PUBLIC UTILITY DISTRICT NO. 1, Respondent.

17 P.3d 1251

104 Wn. App. 842

104 Wash. App. 842

NORTHWEST LINE CONSTRUCTORS CHAPTER OF THE NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION, a foreign corporation; Cascade Chapter of the National Electrical Contractors Association, a Washington corporation; Puget Sound Chapter of the National Electrical Contractors Association, a Washington corporation, Southwest Washington Chapter of the National Electrical Contractors Association, a Washington corporation; Inland Empire Chapter of the National Electrical Contractors Association, a Washington corporation, Appellants, v. SNOHOMISH COUNTY PUBLIC UTILITY DISTRICT NO. 1, Respondent.

No. 45961-9-I.

Court of Appeals of Washington, Division 1.

February 12, 2001.

H. Lee Cook, Stewart, Sokol & Gray, Llc, Portland, Or., for Appellants.

Henry Scott Holte, Anderson, Hunter, Dewell, Baker & Collins, Ps, Mukilteo; Bardell D. Miller, Public Utility Dist. # 1 of Snohomish County, Everett; J. Robert Leach, Anderson Hunter Law Firm, Everett, for Respondent.

KENNEDY, J.

The National Electrical Contractors Association, Northwest Line Constructors Chapter (NECA) brought this action for declaratory judgment and injunctive relief, alleging in its complaint that Snohomish County Public Utility District No. 1 (the PUD) had in the past and still was "purchasing more than $50,000 worth of individual items of equipment and installing these items using its own forces without public competitive bidding required by RCW 54.04.070[,]"¹ a public utility competitive bidding statute. The complaint also alleged that PUD was "splitting" its contracts in violation of RCW 54.04.070 and other bidding statutes.² The trial court granted the PUD's motion for summary judgment dismissing NECA's complaint, and we affirm.

RCW 54.04.070 allows a public utility district to split electrical substation projects into site preparation work and electrical installation work, and to have its own regularly employed personnel perform the electrical installation work, rather than calling for bids, where such is an accepted industry practice under prudent utility management. That same statute defines "prudent utility management" to mean "performing work with regularly employed personnel utilizing material of a worth not exceeding fifty thousand dollars in value" with the further proviso that "such limit on the value of material being utilized in work being performed by regularly employed personnel shall not include the value of individual items of equipment purchased or acquired and used as one unit of a project."³

NECA failed to allege in its complaint that PUD's conduct fell outside accepted industry practice under prudent utility management, but nevertheless argued at summary judgment that (1) splitting a substation project between site work and electrical work is not an accepted industry practice and that (2) the PUD failed to contract out electrical work in which the value of the material used, exclusive of equipment, exceeded $50,000. The trial court gave NECA leave to amend its complaint to allege that the PUD's practices fell outside accepted industry practice under prudent utility management but NECA failed to do so. The trial court then dismissed the complaint with prejudice because it failed to state a claim under the bidding statute. But the court also ruled that NECA could file a new action properly raising the claim if the facts warranted it, and the PUD agrees for purposes of this appeal that if NECA does so, it will not contend that the action is barred by preclusion doctrine.⁴

DISCUSSION

Summary judgment is available only if the pleadings, depositions, answers to interrogatories, admissions on file, and any affidavits show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. CR 56(c). In reviewing a summary judgment order, this court conducts the same inquiry as the trial court. Mountain Park Homeowners Ass'n, Inc. v. Tydings, 125 Wash.2d 337, 341, 883 P.2d 1383 (1994). We review questions of law de novo. Id.

NECA argues that the PUD's practice of splitting projects between site preparation work and electrical installation work violates RCW 54.04.070 because that statute does not permit contract splitting. This issue involves statutory construction, a question of law reviewed de novo. State v. Ammons, 136 Wash.2d 453, 456, 963 P.2d 812 (1998) (citations omitted). Where a statute is plain, unambiguous, and clear on its face, there is no room for construction. National Elec. Contractors Ass'n v. City of Bellevue, 1 Wash.App. 81, 83, 459 P.2d 420 (1969) (citing King County v. City of Seattle, 70 Wash.2d 988, 425 P.2d 887 (1967)).

The portion of RCW 54.04.070⁵ relevant to this case states:

Any work ordered by a district commission, the estimated cost of which is in excess of ten thousand dollars exclusive of sales tax, shall be by contract, except that a district commission may have its own regularly employed personnel perform work which is an accepted industry practice under prudent utility management without a contract. Prudent utility management means performing work with regularly employed personnel utilizing material of a worth not exceeding fifty thousand dollars in value without a contract: PROVIDED, That such limit on the value of material being utilized in work being performed by regularly employed personnel shall not include the value of individual items of equipment purchased or acquired and used as one unit of a project.

(Emphasis in original). Under the plain terms of this statute, unless an exception applies, work ordered by a public utility district must be by contract if the estimated cost of the work is in excess of $10,000. Under the only relevant exception here, a district may have its own regularly employed personnel perform work without calling for competitive bids where such is an accepted industry practice under prudent utility management. "Prudent utility management means performing work with regularly employed personnel utilizing material of a worth not exceeding fifty thousand dollars in value" but "such limit on the value of material being utilized in work being performed by regularly employed personnel shall not include the value of individual items of equipment purchased or acquired and used as one unit of a project." RCW 54.04.070.

To the extent that NECA argues that RCW 54.04.070 prohibits project splitting of the sort that the PUD practices, it is wrong. Nothing in the plain language of this statute prohibits the PUD from performing the electrical installation portion of a substation project using its own employees, so long as performing the work in this manner is an accepted industry practice and so long as no more than $50,000 of materials, exclusive of equipment used as one unit of the project, is utilized. The fact that the statute uses the word "work" rather than "project" bolsters this conclusion. "Work" is defined as "a specific task, duty, function, or assignment often being a part or phase of some larger activity[.]" Webster's Third New International Dictionary 2634 (1969). By contrast, "project" is defined as "a vast enterprise usually sponsored and financed by a government." Id. at 1813. "Work" is not synonymous with "project." Just as several items of work can comprise one vast project, electrical installation work and site preparation work can make up an electrical substation project.

Specifically relevant to the facts of this case is the definition of "construction or improvement of any electrical facility" found under RCW 54.04.080:

The term "construction or improvement of any electrical facility" as used in this section and in RCW 54.04.085, shall mean the construction, the moving, maintenance, modification, or enlargement of facilities primarily used or to be used for the transmission or distribution of electricity at voltages above seven hundred fifty volts, including structures directly supporting transmission or distribution conductors but not including site preparation, housing, or protective fencing associated with but not included in a contract for such construction[.]

(Emphasis added). This language clearly indicates that the Legislature contemplated the division of an electrical substation project into electrical installation work and site preparation work.

Despite the clear and unambiguous language of the statute, NECA cites National Elec. Contractors Ass'n v. City of Bellevue for the proposition that contract splitting is prohibited in this case. In that case, the issue was whether a third class city could separate work and material in determining whether an improvement exceeds $5,000 in value under the competitive bidding statute there at issue, RCW 35.23.352. While the court held that the statute prohibited contract splitting, this was because the plain meaning of the phrase "improvement, including cost of materials, supplies and equipment" found in the relevant statute "leaves no room for construction."...