RAY BELL CONST. v. School District

• Decision Date: 18 May 1998
• Docket Number: No. 24790.,24790.
• Citation: 501 S.E.2d 725,331 S.C. 19
• Court: South Carolina Supreme Court
• Parties: RAY BELL CONSTRUCTION COMPANY, INC., Petitioner, v. The SCHOOL DISTRICT OF GREENVILLE COUNTY and M.B. Kahn Construction Company, Inc., Respondents.

331 S.C. 19

501 S.E.2d 725

RAY BELL CONSTRUCTION COMPANY, INC., Petitioner, v. The SCHOOL DISTRICT OF GREENVILLE COUNTY and M.B. Kahn Construction Company, Inc., Respondents.

No. 24790.

Supreme Court of South Carolina.

Heard March 5, 1998.

Decided May 18, 1998.

David B. Summer, Jr., and Faye A. Flowers, of Parker Poe Adams & Bernstein, L.L.P., Columbia, for petitioner.

Donald A. Harper and N. Ward Lambert, of The Harper Law Firm, Greenville, for respondent Greenville County School District.

Theodore S. Stern, Jr., and Thomas E. Dudley, III, of Covington, Patrick, Hagins, Stern & Lewis, P.A., Greenville, for respondent M.B. Kahn Construction Company, Inc.

WALLER, Justice:

We granted certiorari to review the Court of Appeals' decision in Ray Bell Const. Co. v. School Dist. of Greenville Cty., 324 S.C. 320, 478 S.E.2d 67 (1996). We reverse and remand.

FACTS/PROCEDURAL POSTURE

In June 1994, Respondent Greenville County School District ("District") issued an Invitation for Construction Bids on a new high school. Three contractors submitted bids for the project: (1) Respondent M.B. Kahn Construction Company, Inc. ("Kahn"); (2) Petitioner Ray Bell Construction Company, Inc. ("Ray Bell"); and (3) Ellis-Don Construction, Inc. When bids were opened, Kahn's was the lowest, some $240,000 lower than Ray Bell's.¹ Ray Bell questioned the responsiveness² of Kahn's bid because Kahn had listed multiple subcontractors in the alternative for the same specialty work on its bid form.

District required contractors to list subcontractors for fifteen separate specialties. Ray Bell's complaint involves Kahn's listings in five areas:

ROOFING: "Piper or Pickens"

STRUCTURAL STEEL: "G.C. [general contractor, i.e. Kahn] and or McAbee or Falcon"

MASONRY: "GC and/or Pettit and/or Brickmaster and/or Marion and/or Byers and/or New Carolina and/or Cherokee and/or Goucher"

TERRAZZO/HARD TILE: "Campbell Tile or Capital/Adams"

HVAC CONTROLS: "Barber Coleman or ACTS."

In response to Ray Bell's questions, District requested an explanation from Kahn for its listings. Kahn made the following representations by letter. For roofing, Kahn stated it listed two subcontractors because it intended to award roofing by type: conventional built-up roofing to Piper and metal roofing to Pickens. For Structural Steel and Masonry, Kahn stated it intended to do the work itself, and would enlist the aid of additional subcontractors should they be needed to complete the work on schedule. For Terrazzo/Hard Tile, Kahn stated it intended to award terrazzo and ceramic tile separately: terrazzo to Campbell "and the ceramic tile to be awarded next in accordance with our proposal." For HVAC Controls, Kahn stated it was necessary to list two subcontractors "due to the proprietary nature of certain aspects of the controls systems depending on equipment selection."

After reviewing Kahn's written explanation, District issued a notice stating it intended to award Kahn the contract. Ray Bell then filed a formal protest with District's purchasing agent. The purchasing agent denied the protest, stating that based on Kahn's written explanation, "`bid shopping' is neither contemplated nor possible." The same day of this denial, District awarded Kahn the contract. Ray Bell appealed the purchasing agent's decision. The matter was subsequently set before a master-in-equity³ for an administrative hearing. At the hearing, held seventeen days after Kahn received the contract award, Kahn gave further information regarding the subcontractor listings. Regarding the roofing, Kahn represented it did not get breakout bids (broken down into built-up and metal) from Piper or Pickens until after it received the contract. Prior to that, it only had bids for the whole project. It used Piper's sub-bid in its bid calculation. After receiving the breakout bids post-award, Kahn decided to award the entire job to Piper.

Regarding structural steel and masonry, Kahn maintained it still intended to do the work itself, and would get District approval (i.e. comply with S.C.Code Ann. § 11-35-3020(2)(b)(ii), quoted below, regarding self-bidding) before resorting to subcontractors. Regarding terrazzo/hard tile, Kahn represented Campbell gave a pre-award bid, broken down into terrazzo and hard tile. Capital gave a pre-award bid for the hard tile only. Adams originally bid for both terrazzo and hard tile, but withdrew its bid at some point (the record is unclear whether this occurred pre- or post-award). Finally, regarding the HVAC controls, Kahn stated in actuality this subcontractor is chosen by the mechanical subcontractor, (i.e. it would be a "sub's sub"). Therefore, Kahn had no control over that award. It received no quotes from either Barber Coleman or ACTS, and its listed mechanical subcontractor did not provide these names. Kahn stated it had ultimately awarded subcontracts to those subcontractors who submitted the lowest pre-award bid. Kahn also denied it ever shopped bids.

After the hearing, the master denied Ray Bell's protest. The circuit court affirmed. The Court of Appeals likewise affirmed. Ray Bell Const. Co. v. School Dist. of Greenville Cty., 324 S.C. 320, 478 S.E.2d 67 (Cureton, J., dissenting).

We granted certiorari.

ISSUES

I. Does state law prohibit the listing of alternate subcontractors in bid forms?

II. If listing alternate subcontractors is improper, can doing so constitute a minor informality such that District could waive it?

DISCUSSION

Standard of Review

Under District's Procurement Code, factual determinations required by competitive sealed bidding "shall be final and conclusive unless they are clearly erroneous, arbitrary, capricious or contrary to law." "No determination by the Review Panel or Board concerning an issue of law shall be final or conclusive."

I. Statutory Construction of S.C.Code Ann. § 11-35-3020

Ray Bell argues S.C.Code Ann. § 11-35-3020(2)(b) prohibits the listing of multiple subcontractors in the alternative on bid forms. Under the circumstances that exist in this case, we agree. In 1994, this section provided, in pertinent part:

(b) Bid Acceptance. ... The using agency's invitation for bids shall set forth all requirements of the bid including, but not limited to:

(i) The using agency ... shall identify by specialty in the invitation for bids all subcontractors ... who are expected to perform work or render service to the prime contractor to or about the construction when those subcontractors' contracts are each expected to exceed three percent of the prime contractor's total base bid. In addition, the using agency ... may identify by specialty in the invitation for bids any subcontractors who are expected to perform work which is vital to the project. The determination of which subcontractors are included in the list provided in the invitation for bids is not protestable under Section 11-35-4210 or any other provision of this code. Any bidder in response to an invitation for bids shall set forth in his bid the name of each subcontractor so identified in the invitation for bids. If the bidder determines to use his own employees to perform any portion of the work for which he would otherwise be required to list a subcontractor and if the bidder is qualified to perform such work under the terms of the invitation for bids, the bidder shall list himself in the appropriate place in his bid and not subcontract any of that work except with the approval of the using agency for good cause shown.

(ii) Failure to complete the list provided in the invitation for bids renders the bidder's bid unresponsive.

(iii) No prime contractor whose bid is accepted shall substitute any person as subcontractor in place of the subcontractor listed in the original bid, except for one or more of the following reasons: [subcontractor (a) is financially irresponsible, (b) did not properly bid to contractor, (c) was inadvertently listed due to clerical error, (d) has not submitted required bond, (e) is not licensed as required by law, (f) fails to perform contract, (g) is doing unsatisfactory work (h) has agreed to substitution, (h) with using agency's consent upon good cause shown]. The request for substitution must be made to the using agency in writing.

(iv) Where substitution is allowed, the prime contractor, before obtaining prices from any other subcontractor, must attempt in good faith to negotiate a subcontract with at least one subcontractor whose bid was received prior to the submission of the prime contractor's bid.

(emphasis supplied).⁴

In disagreeing with Ray Bell's argument, the Court of Appeals stated: "... the express language of section 11-35-3020(2)(b) provides the failure to complete the list in the invitation for bids renders the bidder's bid unresponsive. The clear language of the statute, however, does not state that listing of alternative subcontractors renders the bid unresponsive." Ray Bell Const. Co., 324 S.C. at 326, 478 S.E.2d at 70. In essence, the Court of Appeals reasoned if the legislature did not expressly prohibit such listings, they were permissible. In doing so, it relied on a strict rule of statutory construction:

If a statute's language is plain and unambiguous, and conveys a clear and definite meaning, there is no occasion for employing rules of statutory interpretation and the court has no right to look for or impose another meaning. Where the terms of the statute are clear, the court must apply those terms according to their literal meaning. This Court cannot construe a statute without regard to its plain and ordinary meaning, and may not resort to subtle or forced construction in an attempt to limit or expand a statute's scope.

Paschal v. State Elec. Comm'n, 317 S.C. 434, 436-37, 454 S.E.2d 890, 892 (1995). The Court of Appeals found the language of section 11-35-3020(2)(b) unambiguous, and thus refused to resort to other rules of statutory construction.

The question of whether a statute's language is unambiguous and...