Southwest Washington Chapter, Nat. Elec. Contractors Ass'n v. Pierce County

• Decision Date: 28 July 1983
• Docket Number: No. 48975-1,48975-1
• Citation: 100 Wn.2d 109,667 P.2d 1092
• Parties: SOUTHWEST WASHINGTON CHAPTER, NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION, a Washington nonprofit corporation, and Commercial Electric, Inc., a Washington corporation, and the Associated General Contractors of America Tacoma Branch, a nonprofit corporation, Appellants, v. PIERCE COUNTY, Respondent.
• Court: Washington Supreme Court

Page 109

100 Wn.2d 109

667 P.2d 1092

SOUTHWEST WASHINGTON CHAPTER, NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION, a Washington nonprofit corporation and Commercial Electric, Inc., a Washington corporation, and the Associated General Contractors of America Tacoma Branch a nonprofit corporation, Appellants, v. PIERCE COUNTY, Respondent.

No. 48975-1.

Supreme Court of Washington En Banc.

July 28, 1983.

Bonneville, Viert, Morton & McGoldrick, James V. Handmacher, Tacoma, for appellants.

William H. Griffies, Pierce County Prosecutor, Kathryn B. Gerhardt, Deputy Pros. Atty., Tacoma, for respondent.

UTTER, Justice.

In this case, appellants challenge an affirmative action plan for minority and women's business enterprises in public works contracting, claiming violations of statutory competitive bidding provisions in both the federal and state constitutions. We hold that the challenged plan violates neither constitutional nor statutory provisions and therefore affirm the trial court.

On January 5, 1982, the Pierce County Council passed ordinance 81-121 which adopted an affirmative action plan applicable to county public works contracts. In its preamble, the ordinance recognized the underrepresentation of minorities and women in the county work force and declared an intention to take affirmative action to correct the problem. As one such effort, the accompanying affirmative action plan required all contractors to affirmatively seek minority subcontractors. It concluded that reasonable opportunities exist for minority business enterprise participation, and that "at least 12 percent of the total contract amount is a reasonable goal". Plaintiff's exhibit 4, at 12. No specific goal was set in the plan for women.

In setting the 12 percent goal, the affirmative action plan noted that the goal was based on numerous conferences with government officials, minority businessmen and contractors, as well as a review of requirements in other public works contracts and of applicable federal, state and local law. County officials also met with interested parties on numerous occasions prior to passage of a comparable affirmative action ordinance in 1977, as is evidenced in the record by a letter from appellant Associated General Contractors, a letter from the county contract compliance officer and an affidavit of the county affirmative action officer.

On January 8, 1982, the County solicited bids for construction of a new Detention and Correction Center. Bidders were required to certify in their bids the amount of work they intended to subcontract to minority business enterprises (MBE's) and women's business enterprises (WBE's), respectively. In addition, bidders were required to "make every effort" to meet affirmative action subcontracting goals of $1,685,000 for MBE's and $153,500 for WBE's. These figures were approximately 11 and 1 percent, respectively, of the total budgeted for the project.

Compliance with the MBE and WBE subcontracting goals was incorporated into the selection process by the following provision in the bid specifications.

The successful bidder shall be selected on the basis of his having submitted the lowest responsive bid which has met the MBE and/or WBE goal(s) as established elsewhere in these contract documents. Should the low and otherwise responsive bidder fail to attain the goal(s), responsiveness shall be determined on the basis of good faith efforts taken to attain the goal(s). The County has established the following objective measurement of good faith. Good faith shall be determined in light of the MBE and/or WBE participation attained by all bidders and by comparing the MBE and/or WBE participants of the low bidder with the average MBE and/or WBE participation by all bidders. Should the low bidder's MBE and/or WBE participation be lower than the average(s) in each category, the bid shall be considered unresponsive and shall be rejected. If the lowest bid is rejected, the next lowest bid, or bids, shall be examined under the foregoing criteria until the contract is awarded or all bids rejected.

Plaintiff's exhibit 6, at SC-4, SC-5. "Minority" was defined to include blacks, Hispanics, Asian Americans, native North Americans, and any other group or individual "found to be economically and socially disadvantaged by the Small Business Act, as amended (15 U.S.C. 637(a))." Plaintiff's exhibit 6, at SC-3. MBE or WBE status was defined to require (1) at least 51 percent ownership and (2) full control of management and daily business operations by minorities or women, respectively.

The County opened bids on February 16, 1982 and discovered that only one bidder had met the affirmative action goals or the test for good faith efforts. Since the one bidder in compliance was over budget and it appeared to County officials that the other bidders had misunderstood the affirmative action requirements, all bids were rejected. In addition to correcting some problems it had discovered in the physical specifications, the County clarified the affirmative action requirements. The revised specifications also provided that if all bids within budget satisfied neither the affirmative action goals nor the good faith test and if the State Jail Commission, which was funding the project, consented, the low bidder would be given an opportunity to amend its proposal to include subcontract awards to MBE's and WBE's at least equal to the average of that certified by all bidders.

After making these changes, the County called for new bids, which were opened on March 23, 1982. All bidders in this round satisfied the affirmative action goals, but the low bidder differed. Upon award of the contract to this low bidder, this action was instituted by Commercial Electric, Inc., a subcontractor of the low bidder in the first round of bids, and local chapters of the National Electrical Contractors Association and Associated General Contractors of America, two associations whose members regularly bid for County public works contracts. The plaintiffs originally sought damages and/or injunctive relief regarding the jail project, but they soon dropped those claims and now seek only declaratory relief regarding future County projects. The amended complaint does, however, allege that the affirmative action requirements for the jail project are typical of those used in other projects and the County does not deny this allegation. The present action therefore presents a sufficient justiciable controversy for purposes of the Uniform Declaratory Judgments Act, RCW 7.24. Cf. Clallam Cy. Deputy Sheriff's Guild v. Board of Clallam Cy. Comm'rs, 92 Wash.2d 844, 848-49, 601 P.2d 943 (1979) (ordinance which made legal rights and obligations uncertain created justiciable controversy).

The trial court ruled against appellants and they petitioned for direct review by this court, which we granted. Appellants contend that the County's affirmative action plan (1) violates the state competitive bidding statute; (2) violates the equal protection clause of the Fourteenth Amendment of the federal constitution; and (3) violates the privileges and immunities clause (Const. art. 1, § 12) and equal rights amendment (Const. art. 31) of our state constitution.

I COMPETITIVE BIDDING REQUIREMENTS

With certain exceptions not pertinent here, RCW 36.32.250 requires that all public works contracts be awarded by competitive bidding. Selection among bidders is to be as follows:

The contract for public work, lease or purchase shall be awarded to the lowest responsible bidder; taking into consideration the quality of the articles or equipment to be purchased or leased. Any or all bids may be rejected for good cause.

RCW 36.32.250. Appellants contend that failure to meet affirmative action goals neither permits the County to consider a bidder not "responsible" nor constitutes "good cause" for rejecting a bid. Instead, appellants argue, the scope of these terms must be limited to factors affecting quality or completion of the work.

The exact scope of the terms "responsible" and "good cause" is unclear. The latter term has been generally defined as "reasonable under the law". Butler v. Federal Way Sch. Dist. 210, 17 Wash.App. 288, 295, 562 P.2d 271 (1977). The former has been construed as prohibiting preferences for state residents ( see Reiner v. Clarke Cy., 137 Wash. 194, 201, 241 P. 973 (1926) ¹); however, we view that interest as significantly less compelling than the State's interest in eliminating the effects of past discrimination. Compare Laborers Local 374 v. Felton Constr. Co., 98 Wash.2d 121, 654 P.2d 67 (1982) (state interest in residents' employment did not justify requirement that public works contractors employ 95 percent state residents) with Schmidt v. Oakland Unified Sch. Dist., 662 F.2d 550, 557-58 (9th Cir.1981) (state interest in ameliorating effects of past discrimination justified racial classification), vacated on other grounds, 457 U.S. 594, 102 S.Ct. 2612, 73 L.Ed.2d 245 (1982).

Authorities outside this state are divided in their interpretation of comparable language in the statutes of other states. McQuillin takes the view that an agency may reject a low bid where "in the public interest" and includes within this compliance with affirmative action goals. 10 E. McQuillin, Municipal Corporations § 29.73a (3d ed. 1981). See also M.C. West, Inc. v. Lewis, 522 F.Supp. 338, 341 (M.D.Tenn.1981); Central Ala. Paving, Inc. v. James, 499 F.Supp. 629, 633 (M.D.Ala.1980); S.N. Nielsen Co. v. Public Bldg. Comm'n, 81 Ill.2d 290, 299, 43 Ill.Dec. 40, 410 N.E.2d 40 (1980); Weiner v. Cuyahoga Comm'ty College Dist., 19 Ohio St.2d 35, 39, 249 N.E.2d 907 (1969), cert. denied, 396 U.S. 1004, 90 S.Ct. 554, 24 L.Ed.2d 495 (1970). Other courts have construed terms such as "responsible" and "good cause" as limited to considerations directly connected with quality. See Owen, Inc. v. Shelby Cy., 648 F.2d 1084, 1092 (6th Cir.1981) (applying Tennessee law); ...