Case Title: Prof'l Bldg. Maint. Corp. v. School Bd.

Citation: 

Docket Number: 110410

State: virginia

Court: Virginia Supreme Court

Date: 2012-04-20T00:00:00Z

Document:
Present:  All the Justices 
 
PROFESSIONAL BUILDING  
MAINTENANCE CORPORATION 
 
 
 
 
 
 
 
  
OPINION BY  
v.  Record No. 110410  
 
JUSTICE ELIZABETH A. MCCLANAHAN 
 
 
 
 
 
 
 
   April 20, 2012 
SCHOOL BOARD OF THE COUNTY 
OF SPOTSYLVANIA 
 
FROM THE CIRCUIT COURT OF SPOTSYLVANIA COUNTY 
David H. Beck, Judge 
 
 
Professional Building Maintenance Corporation (PBM) 
appeals from the judgment of the circuit court, which sustained 
the demurrer of the School Board of the County of Spotsylvania 
(the School Board) and dismissed PBM's action.  For the reasons 
that follow, we will reverse the judgment of the circuit court. 
I. 
Facts and Proceedings Below 
PBM, which is in the business of providing janitorial and 
industrial cleaning services, filed an amended complaint 
against the School Board asserting causes of action arising 
under the Virginia Public Procurement Act, Code § 2.2-4300 et 
seq. (the Act).1  In reviewing the circuit court's order 
                     
 
1 Since the circuit court sustained a demurrer to an 
amended complaint that is complete in itself and does not 
incorporate or refer to the allegations in the prior complaint, 
we consider only the allegations in the amended complaint that 
was the subject of the demurrer sustained by the judgment 
appealed from.  Lewis v. Kei, 281 Va. 715, 719, 708 S.E.2d 884, 
888 (2011); McMillion v. Dryvit Sys., Inc., 262 Va. 463, 469, 
552 S.E.2d 364, 367-68 (2001); Yuzefovsky v. St. John's Wood 
Apts., 261 Va. 97, 102, 540 S.E.2d 134, 136 (2001). 
sustaining a demurrer, we "accept as true all facts properly 
pleaded in the [amended] complaint and all reasonable and fair 
inferences that may be drawn from those facts."  Glazebrook v. 
Board of Supervisors, 266 Va. 550, 554, 587 S.E.2d 589, 591 
(2003). 
The School Board published a "Best Value Invitation For 
Bid" and addendum (the Invitation) seeking bids for the 
provision of custodial services in various schools located in 
Spotsylvania County.2  The Invitation stated the School Board 
would utilize the "'Best Value' procurement method" to consider 
factors in addition to price "to select the most advantageous 
offer."  The specific criteria were: expertise and experience 
relative to the scope of services (50 points); experience of 
personnel assigned to the project (5 points); 
supplies/equipment proposed for general cleaning (5 points); 
quality control program (10 points); and price (30 points).  
Although PBM submitted the lowest bid price among all the 
bidders, the School Board issued a notice of intent to award 
the contract to the bidder who had the highest score according 
                     
 
2 The Invitation is an exhibit to the amended complaint.  
Since accompanying exhibits referred to in the pleadings are 
made part of the pleadings, the Court may examine the exhibits 
in determining whether the amended complaint states a cause of 
action.  TC MidAtlantic Dev. v. Commonwealth, 280 Va. 204, 210, 
695 S.E.2d 543, 547 (2010); see also Rule 1:4(i)(mention in 
pleading of accompanying exhibit shall make exhibit part of 
pleading). 
to the points given for each of the specific criteria.  PBM 
sent a letter to the School Board expressing its concern that 
the bid review process was not carried out in a fair and 
objective manner in light of its experience and the fact that 
it submitted the lowest bid.  Representatives from PBM and the 
School Board met to discuss PBM's bid.  During the meeting, the 
School Board provided PBM with a summary of the points awarded 
to each bidder for the criteria set forth in the Invitation.  
Subsequently, PBM submitted a formal protest, and the parties 
met again to discuss PBM's bid.  Thereafter, the School Board 
confirmed, in writing, that PBM would not be awarded the 
contract.  Following the School Board's decision, PBM initiated 
these legal proceedings.3 
In its amended complaint, PBM asserts the School Board 
violated the Act because it did not award the contract to PBM, 
who was the lowest responsive and responsible bidder.  PBM also 
contends the School Board considered criteria that were not 
stated in the Invitation and failed to describe the method for 
awarding points for the bid criteria in violation of the Act.  
Finally, PBM claims the School Board's failure to select PBM as 
                     
 
3 The written correspondence between the parties, including 
PBM's bid protest and the School Board's response, as well as 
the summary of the bidders' scores, are exhibits to the amended 
complaint. 
the successful bidder was not an honest exercise of discretion, 
but was arbitrary or capricious. 
The School Board filed a demurrer to the amended 
complaint, asserting the contract was to be awarded to the best 
value bidder, not the lowest responsible bidder.  The School 
Board further asserted the allegations of the amended complaint 
are not sufficient to support the claim of arbitrary or 
capricious actions. 
The circuit court sustained the School Board's demurrer 
finding that "Best Value" is a method permitted for public 
bodies and the Invitation "sufficiently meets the requirements 
of law for a 'Best Value' procurement solicitation."  The 
circuit court further found the allegations that the School 
Board's actions were arbitrary or capricious "are conclusory 
only and unsupported by allegations of fact and that there are 
no allegations of dishonesty or corrupt actions" on the part of 
the School Board. 
II. School Board's Failure to Follow Requirements of Act 
PBM asserts the circuit court erred in sustaining the 
demurrer because its amended complaint adequately alleges the 
School Board failed to properly follow the requirements of the 
Act.  "A demurrer tests the legal sufficiency of facts alleged 
in pleadings, not the strength of proof."  Glazebrook, 266 Va. 
at 554, 587 S.E.2d at 591.  "Whether a cause of action is 
sufficiently pled is a legal issue which we review de novo."  
TC MidAtlantic Dev., 280 Va. at 210, 695 S.E.2d at 547. 
Pursuant to Code § 2.2-4303, which identifies the 
"[m]ethods of procurement" to be used in awarding public 
contracts, the contract was to be awarded after competitive 
sealed bidding.  Competitive sealed bidding "is a method of 
contractor selection, other than for professional services."  
Code § 2.2-4301.4  Code § 2.2-4303(A) states that "[a]ll public 
contracts with nongovernmental contractors for the purchase or 
lease of goods, or for the purchase of services, insurance, or 
construction, shall be awarded after competitive sealed 
bidding, or competitive negotiation as provided in this 
section, unless otherwise authorized by law." (Emphasis added.)  
This section enumerates certain contracts that may be awarded 
and purchases that may be made using competitive negotiation or 
other methods of procurement.  Code § 2.2-4303(B)-(J).  The 
School Board's contract does not fall within any of these 
                     
 
4 Professional services  "means work performed by an 
independent contractor within the scope of the practice of 
accounting, actuarial services, architecture, land surveying, 
landscape architecture, law, dentistry, medicine, optometry, 
pharmacy or professional engineering. 'Professional services' 
shall also include the services of an economist procured by the 
State Corporation Commission."  Code § 2.2-4301.  The parties 
agree that custodial services are not professional services as 
defined by the Act. 
subsections providing for a procurement method other than 
competitive sealed bidding. 
The process to be followed by the public body in procuring 
a contract under the competitive sealed bidding process is set 
forth in the Act and consists of the following elements: 
1. Issuance of a written Invitation to Bid containing 
or incorporating by reference the specifications and 
contractual terms and conditions applicable to the 
procurement. Unless the public body has provided for 
prequalification of bidders, the Invitation to Bid 
shall include a statement of any requisite 
qualifications of potential contractors. . . . 
 
2. Public notice of the Invitation to Bid at least 10 
days prior to the date set for receipt of bids by 
posting on the Department of General Services' 
central electronic procurement website or other 
appropriate websites. . . . 
 
3. Public opening and announcement of all bids 
received. 
 
4. Evaluation of bids based upon the requirements set 
forth in the invitation, which may include special 
qualifications of potential contractors, life-cycle 
costing, value analysis, and any other criteria such 
as inspection, testing, quality, workmanship, 
delivery, and suitability for a particular purpose, 
which are helpful in determining acceptability.5 
 
                     
 
5 In evaluating the bids under this element, the public 
body "shall determine whether the apparent low bidder is 
responsible."  Code § 2.2-4359(A).  If the public body 
determines the apparent low bidder is not responsible, it must 
notify the bidder who is permitted to inspect the documents 
related to the determination and submit rebuttal information.  
The public body must issue a written determination of 
responsibility taking into account the rebuttal information.  
Code § 2.2-4359(A)(1)-(3).  The School Board did not notify PBM 
 
5. Award to the lowest responsive and responsible 
bidder. . . .6 
 
Code § 2.2-4301 (emphasis added).  Therefore, under the plain 
language of the Act, the School Board was required to award the 
contract to the lowest responsive and responsible bidder. 
 
We reject the School Board's position that its utilization 
of best value concepts permitted it to award the contract to 
the best value bidder instead of the lowest responsive and 
responsible bidder.7  Although the Act permits public bodies to 
"consider best value concepts when procuring goods and 
nonprofessional services," Code § 2.2-4300, it does not provide 
the School Board with a method of procurement in lieu of 
competitive sealed bidding.  See Code § 2.2-4303(C).8  To accept 
                                                                 
 
that it was determined to be not responsible pursuant to the 
provisions set forth in this section. 
6 A responsive bidder is a "person who has submitted a bid 
that conforms in all material respects to the Invitation to 
Bid."  Code § 2.2-4301.  PBM asserts its bid conformed in all 
material respects to the Invitation and was, therefore, 
responsive.  The School Board has not contended otherwise. 
7 " 'Best value,' as predetermined in the solicitation, 
means the overall combination of quality, price, and various 
elements of required services that in total are optimal 
relative to a public body's needs."  Code § 2.2-4301. 
8 The only provision in the Act which expressly permits a 
public body to award the contract to the best value bidder is 
Code § 2.2-4308, which applies to design-build or construction 
management contracts and provides that a fixed price or not-to-
exceed price design-build or construction management contract 
for public bodies other than the Commonwealth "shall be awarded 
to the fully qualified offeror who submits an acceptable 
proposal determined to be the best value" if the public body 
the School Board's position, we would have to add language to 
the fifth element of competitive sealed bidding set forth in 
Code § 2.2-4301 by providing for an award to the best value 
bidder as an alternative to the lowest responsive and 
responsible bidder.  We cannot change or amend legislative 
enactments in this manner.  See, e.g., Coca-Cola Bottling Co. 
of Roanoke, Inc. v. County of Botetourt, 259 Va. 559, 565, 526 
S.E.2d 746, 750 (2000). 
In addition to PBM's claim that the School Board failed to 
award the contract to the lowest responsive and responsible 
bidder, PBM asserts that the School Board's consideration of 
best value criteria did not comply with the Act.  For example, 
PBM alleges that at the second meeting between representatives 
from PBM and the School Board, PBM was informed that two 
reasons it was not the successful bidder were PBM's failure to 
address how a transition from its existing janitorial company 
to PBM would be handled and its failure to explain how 
background checks would be undertaken.  According to PBM, these 
factors were not included in the Invitation criteria.  PBM also 
contends the Invitation did not identify factors that would be 
considered in how points were allocated among the bid criteria 
                                                                 
 
complies with the requirements of this section.  Contracts 
awarded pursuant to this section are specifically identified in 
Code § 2.2-4303(D)(4) as exceptions from the required 
competitive sealed bidding method.     
or how points would be awarded to bidders.  Under the Act, the 
criteria and basis for evaluating bids must be stated in the 
Invitation and the evaluation of the bids must be in accordance 
with such criteria.  See Code § 2.2-4300(C) ("The criteria, 
factors, and basis for consideration of best value and the 
process for the consideration of best value shall be as stated 
in the procurement solicitation."); Code § 2.2-4301 (evaluation 
of the bids must be "based upon the requirements set forth in 
the invitation"). 
In sum, the circuit court erred in finding that PBM does 
not adequately allege the School Board failed to properly 
follow the requirements of the Act.  Since the Act requires the 
School Board to award the contract to the lowest responsive and 
responsible bidder and to describe the criteria used to 
evaluate the bid in its Invitation, PBM's claims that the 
School Board failed to comply with these requirements 
sufficiently plead a cause of action under the Act.  See Code 
§ 2.2-4364(C)(ii)(circuit court may reverse award that is not 
in accordance with law and the terms and conditions of the 
Invitation). 
III. School Board's Arbitrary or Capricious Actions 
PBM also assigns error to the circuit court's ruling that 
its amended complaint alleges insufficient facts of arbitrary 
or capricious conduct.  "We have defined an act as arbitrary 
and capricious when it is willful and unreasonable and taken 
without consideration or in disregard of facts or law or 
without determining principle, or when the deciding body 
departed from the appropriate standard in making its decision."  
James v. City of Falls Church, 280 Va. 31, 42, 694 S.E.2d 568, 
574 (2010) (internal quotation marks and citations omitted). 
PBM contends that during its first meeting with 
representatives from the School Board, it was informed the only 
reason it was not the successful bidder was because it failed 
to adequately describe the supplies and equipment that would be 
used despite the fact that PBM provided its plan to offer a 
unique program for use of "green seal certified" cleaning 
products and "first class equipment" to promote the health and 
safety of children and employees.  During the second meeting, 
the School Board told PBM it was determined to be not 
responsible even though the School Board did not notify PBM of 
this determination or otherwise follow the procedures set forth 
in Code § 2.2-4359(A)(1)-(3).9  In addition, the School Board 
informed PBM, for the first time, that it failed to adequately 
address its transition plan and how background checks would be 
undertaken, factors that were not included in the criteria set 
forth in the Invitation.  During this meeting, the School Board 
                     
 
9 The School Board subsequently retracted its prior 
statement that PBM was not responsible. 
was unable to articulate the factors considered in how the 
points were allocated or how the points were awarded. 
PBM further alleges that the points given to PBM for 
certain criteria specified in the Invitation had no basis in 
fact.  Although PBM provided detail regarding its 36 years of 
experience in the janitorial industry, specifically including 
its prior experience in another public school system, it was 
awarded only 26.63 out of 50 points, ranking PBM 8th out of 9 
bidders, and was not told that lack of experience caused it to 
be an unsuccessful bidder.  In addition, PBM alleges that 
despite its plan for using "green seal certified" cleaning 
products and "first class equipment," it was awarded only 2 out 
of 5 points for cleaning and supplies. 
In sum, PBM alleges the School Board willfully disregarded 
the fact that PBM submitted the lowest bid and failed to either 
award the contract to PBM or determine that it was not 
responsible as required by the Act.  PBM alleges that certain 
scores it was given had no basis in fact and did not bear a 
rational relationship with the information provided in its bid.  
It also alleges the School Board was unable to explain how 
points were awarded for each of the criteria and that the 
explanations given by the School Board as to why PBM was not 
the successful bidder departed from the criteria provided in 
the Invitation.  These allegations are not merely conclusory 
and sufficiently state a cause of action under the Act.  Code 
§ 2.2-4364(C)(i)(circuit court may reverse award that is not an 
honest exercise of discretion, but instead is arbitrary or 
capricious). 
IV. Conclusion 
For the foregoing reasons, we conclude the circuit court 
erred in sustaining the School Board's demurrer to the amended 
complaint.  Accordingly, we will reverse the judgment of the 
circuit court and remand for further proceedings consistent 
with this opinion. 
Reversed and remanded. 
 
JUSTICE MIMS, concurring.
 
 
I concur with the majority that the demurrer of the School 
Board should be overruled.  However, I take a different 
analytical path to reach that conclusion. 
 
The majority correctly recites the competitive sealed 
bidding process by which a public body generally must procure 
goods and services.  The bedrock principle of that process is 
that the award must be to the lowest responsive and responsible 
bidder.  However, in 2000, the General Assembly carved out 
certain contracts that may be awarded using a novel concept 
identified as “best value.”1  Yet because this new concept is 
imperfectly grafted into the time-honored statute and its well-
understood principles of “responsive” and “responsible,” public 
bodies, potential bidders and courts must grapple with what the 
General Assembly intended and how “best value” is to be applied 
in the real world of public contracting. 
 
The statute, by allowing best-value methodology while 
still requiring that the contract be awarded to the lowest 
bidder, is contradictory and ambiguous.  In ascertaining the 
statute’s meaning, we therefore may “resort to rules of 
construction, legislative history, and extrinsic evidence.”  
Doss v. Jamco, Inc., 254 Va. 362, 370, 492 S.E.2d 441, 466 
(1997). 
 
I begin, as courts must, with the proposition that the 
General Assembly, in enacting the best-value legislation, 
intended to make a substantive change in the law.  See Dale v. 
City of Newport News, 243 Va. 48, 51, 412 S.E.2d 701, 702 
(1992) (“there is a presumption that a substantive change in 
law was intended by an amendment to an existing statute”).  
Under the prior law of competitive sealed bidding, the bid with 
                     
 
1 The 2000 amendment states: “ ‘Best value,’ as 
predetermined in the solicitation, means the overall 
combination of quality, price, and various elements of required 
services that in total are optimal relative to a public body’s 
needs.”  2000 Acts ch. 644. 
the lowest price by a responsive and responsible bidder was 
awarded the contract.  See former Code § 11-37 (1999 Repl. 
Vol.).  That statute provided, as does the current one, for 
“[e]valuation of bids based upon the requirements set forth in 
the invitation, which may include special qualifications of 
potential contractors, life-cycle costing, value analysis, and 
any other criteria such as inspection, testing, quality, 
workmanship, delivery, and suitability for a particular 
purpose, which are helpful in determining acceptability.”  Id.  
Thus, the former statute allowed the public body to promulgate 
criteria that would ensure that the lowest bidder met its 
specialized needs. 
 
The amendment to the statute suggests that the legislature 
intended to permit public bodies to go beyond those criteria 
and use a modified competitive sealed bidding process to award 
contracts based upon a variety of bid factors in addition to 
price.  But because the best-value concept was imperfectly 
grafted into the statute, a question remains: are those 
unsuccessful bidders in best-value procurements less responsive 
or are they non-responsible?2  The briefs and argument in this 
case, and the majority opinion, highlight this dilemma. 
                     
 
2 A finding of non-responsibility in one procurement may 
have negative consequences for the bidder in subsequent 
procurements. 
 
We must read the underlying statute and the 2000 amendment 
as an integrated whole.  Alston v. Commonwealth, 274 Va. 759, 
769, 652 S.E.2d 456, 462 (2007) (statutes “should be so 
construed as to harmonize the general tenor or purport of the 
system and make the scheme consistent in all its parts and 
uniform in its operation, unless a different purpose is shown 
plainly or with irresistible clearness”) (quoting Prillaman v. 
Commonwealth, 199 Va. 401, 405, 100 S.E.2d 4, 7 (1957)).  In so 
doing, I would hold that the best-value analysis does not 
implicate the responsibility of a bidder, but rather alters the 
traditional responsiveness prong.  In other words the “most 
responsive” responsible bidder in a best-value procurement is 
not necessarily the one with the lowest-priced bid.  This is 
where I part company with the majority, which holds that the 
plain meaning of the Act, even in a best-value procurement, 
requires the contract to be awarded “to the lowest responsive 
and responsible bidder.”  (Emphasis added.)  If that is so, the 
best-value amendment is stripped of any substantive meaning. 
 
I must conclude that a best-value procurement is 
fundamentally inconsistent with traditional procurement 
principles relying solely on an objective “lowest responsive” 
bidder determination.  That appears to be what the General 
Assembly intended.3 
 
I concur with the conclusion of the majority that the 
School Board’s actions as alleged in the complaint were 
arbitrary and capricious and did not comply with the distinct 
best-value statutory mandate.  Because the best-value concept 
decouples the decision to award from the determination of the 
lowest-priced responsive bid by a responsible bidder – an 
easily determined, objective two-step determination – the 
statute includes certain protections to guard against excessive 
subjectivity:  “The criteria, factors, and basis for 
consideration of best value and the process for the 
                     
 
3 While not authoritative, it is worth noting that the 
Department of Planning & Budget, in its Fiscal Impact Statement 
to a subsequent proposed amendment to the VPPA, described best-
value as  
 
“permit[ting] public bodies to rely on factors 
other than price when procuring goods and 
nonprofessional services.  By relying upon these 
other factors when making their procurement 
decisions, public bodies have the flexibility to 
purchase the product that best suits their 
needs, rather than the cheapest product that 
meets their needs.  Ultimately, such choices 
should improve the quality of government 
purchases and reduce these purchases’ lifetime 
costs.” 
 
Department of Planning and Budget, 2001 Impact Statement for HB 
1931, available at http://leg1.state.va.us/cgi-
bin/legp504.exe?011+oth+HB1931F122+PDF (last visited April 9, 
2012) (emphasis added). 
 
consideration of best value shall be as stated in the 
procurement solicitation.”  Code § 2.2-4300(C). 
 
Professional Building Maintenance Corporation’s Complaint 
sufficiently alleges an arbitrary and capricious process and 
non-compliance with this statutory requirement.  For both of 
these reasons, the Complaint is sufficient and the demurrer 
should be overruled.