______________________________________ 

______________________________________________________________________________ 

OFFICE OF THE ATTORNEY GENERAL
 State of California
 

JOHN K. VAN DE KAMP
 Attorney General
 

OPINION : 

: No. 90-402 

of : 

: DECEMBER 13, 1990 

JOHN K. VAN DE KAMP :
 Attorney General :
 

:
 CLAYTON P. ROCHE :
 Deputy Attorney General :
 

:
 

THE HONORABLE JOHN W. ANDERSON, COUNTY COUNSEL, DEL NORTE 

COUNTY, has requested an opinion on the following questions: 

1. When a county having a population of 500,000 or less rejects all competitive bids

on a public project, and the board of supervisors, after reevaluating the county's cost estimates on

the project, by a four-fifths vote declares that in its opinion the project can be negotiated at a lower

price than any of the bids which were submitted, may the county thereafter negotiate a contract with

a contractor who did not submit a bid on the project? 

2. When a county having a population of 500,000 or less negotiates a contract for

a public project under the circumstances set forth above, may it proceed with the project where (1)

the negotiations with the contractor result in a contract based upon the original plans and

specifications, but (2) during the negotiations the contractor identifies changes which can be made

to the project which will substantially reduce the overall cost of the project, and (3) the county

executes change orders after the contract is entered into in conformity with the identified changes

to substantially reduce the cost of the project? 

CONCLUSIONS 

1. Until January 1, 1991, when a county having a population of 500,000 or less

rejects all competitive bids on a public project, and the board of supervisors, after reevaluating the

county's cost estimates on the project, by a four-fifths vote declares that in its opinion the project

can be negotiated at a lower price than any of the bids which were submitted, the county may

thereafter negotiate a contract with a contractor who did not submit a bid on the project. 

2. When a county having a population of 500,000 or less negotiates a contract for

a public project under the circumstances set forth above, the county may not thereafter proceed with

the project where (1) the negotiations with the contractor result in a contract based upon the original

plans and specifications, but (2) during the negotiations the contractor identifies changes which can

be made which will substantially reduce the overall cost of the project, and (3) the county executes 

1. 90-402
 
 

change orders after the contract is entered into in conformity with the identified changes to

substantially reduce the cost of the project. 

ANALYSIS 

The Local Agency Public Construction Act is found in section 20100 et seq. of the

Public Contract Code.1 The law generally governs the letting of construction contracts through the

competitive bidding process by cities, counties, school districts, and numerous specified special

districts and other local agencies. As to counties, sections 20120-20145 apply, except that special

provisions found in sections 20150-20150.14 are applicable to counties of 500,000 or less

population. (See 64 Ops.Cal.Atty.Gen. 800 (1981); 63 Ops.Cal.Atty.Gen. 744 (1980).) Our focus 

herein is on these latter provisions. 

Section 20150.1 requires counties of 500,000 or less population, whether general law

or charter, to follow the bidding procedures set forth in sections 20150-20150.14 for "public

projects" as defined therein. "Public project" is defined in section 20150.2, subdivision (a), to

mean: "A project for the erection, improvement, and repair of public buildings and works." Section 

20150.4 permits "public projects" between $4000 and $10,000 to be contracted out by either

informal or formal bid. It then requires that contracts for projects of $10,000 or more be let by

formal bidding procedures. 

Sections 20150.9 and 20150.10 set forth provisions regarding a county's rejection of

all bids and the subsequent procedures it may then follow. Section 20150.9 provides: 

"In its discretion, the county may reject any bids presented. If, after the first 

invitation for bids, all bids are rejected, after reevaluating its cost estimates of the

project, the county shall abandon the project or shall readvertise for bids in the

manner prescribed by this article. If after readvertising, the county rejects all bids

presented, the county may proceed with the project by use of county personnel or

may readvertise. If two or more bids are the same and the lowest, the county may

accept the one it chooses. If no bids are received, the county may have the project

done without further complying with this article." 

Section 20150.10 states: 

"Notwithstanding the provisions of section 20150.9, if, after the first

invitation for bids, all bids are rejected, the county may, after reevaluating its cost

estimates of the project, pass a resolution by a four-fifths vote of its board of

supervisors declaring that the project can be performed more economically by county

personnel, or that in its opinion a contract to perform the project can be negotiated

at a lower price than that in any of the bids, or the materials or supplies furnished at

a lower price in the open market. Upon adoption of the resolution, it may have the

project done in the manner stated without further complying with this article." 

Section 20150.11 prohibits the splitting of public projects into separate or smaller

work orders or projects to avoid competitive bidding requirements. Finally sections 20150.12 and

20150.13 require the adoption of plans and specifications for public projects over $10,000 and

require that all bidders be afforded an opportunity to examine such plans and specifications. With 

1

All section references are to the Public Contract Code unless otherwise indicated. 

2. 90-402
 
this statutory background in mind, we examine the basis upon which the questions were posed for

our resolution. 

The facts presented in this request for our opinion involve the renovation of the

courthouse in a county of less than 500,000 population. The board of supervisors adopted plans and

specifications for the project with an architect's estimate of $2.7 million for the entire project's costs.

The county advertised for bids and two were received. The low bid was $4.5 million, or nearly 60% 

more than the estimated cost. 

The county reevaluated its cost estimates, and thereafter the board of supervisors

adopted a resolution rejecting all bids and by a four-fifths vote declared that in its opinion the project

could be negotiated at a lower price than either of the bids which were submitted. The county first

attempted to negotiate with the lowest bidder and such negotiations failed. The county then

attempted to negotiate with the second bidder, but that bidder was not interested in entering into

negotiations. 

The county then found a third contractor and entered into negotiations. These 

negotiations culminated in the county entering into a contract for the courthouse renovation for

$3.91 million based upon the original plans and specifications. During the negotiations, however,

the contractor identified changes which could be made in the plans and specifications that would

reduce the cost of the project to $2.85 million. After the execution of the contract, the county

proposed change orders to conform with the changes previously identified by the contractor to

reduce the contract price to $2.85 million. 

The change orders included both design changes and material changes. For example,

the largest change order was for redesigning the heating system for a savings of $150,000. Another 

major change was redesigning the roof for a savings of $111,000. A third major change was 

redesigning the lighting system for a savings of $108,000. Other design changes included

redesigning skylights for a savings of $65,000, and providing a revised structural system for the

central atrium for a savings of $39,000. 

Material changes included such matters as painting walls instead of using vinyl wall

covering or interior wall panelling for a savings of $50,000, and providing galvanized sheet metal

gutters in lieu of lead gutters for a savings of $20,000. Finally, certain items were eliminated from

the original plans and specifications such as exterior clocks, modular seating, and demolition work

for a total savings of $73,800. The changes made by way of the change orders reduced the contract 

price by approximately 27%. 

1. Negotiations With Contractor Who 

 Did Not Submit Competitive Bid 

The first question presented herein is whether the county was authorized pursuant to

section 20150.10 to negotiate with a contractor who had not submitted a competitive bid. We 

conclude that this was proper. 

It has been suggested that as a matter of policy the county should be prohibited from

negotiating with a contractor who had not submitted a bid since such negotiations would undercut

the policy of the law to foster competitive bidding. 

(See § 3400, subd. (a); San Diego Service Authority for Freeway Emergencies v. 

Superior Court (1988) 198 Cal.App.3d 1466, 1469 ["Competitive bidding guards against favoritism, 

3.	 90-402
 
 

extravagance, fraud, and corruption; it serves the public by preventing waste and securing the best

economic result"].) 

However, section 20150.10 contains no such restriction. To imply such a restriction 

would add words to the section and essentially rewrite it. Such is not permitted under the guise of 

statutory interpretation. (See People v. Williams (1981) 30 Cal.3d 470, 489; People v. Rodriguez

(1990) 219 Cal.App.3d 688, 692-693.) "`It is . . . against all settled rules of statutory construction

that courts should write into [] statute[s] by implication express requirements which the Legislature

has not seen fit to place into the statute[s].'" (League of Women Voters v. Countywide Crim. Justice

Coordination Com. (1988) 203 Cal.App.3d 529, 557.) 

Furthermore, the suggested limitation will in fact be added to section 20150.10 by

Statutes of 1990, chapter 694.2 This is evidence that section 20150.10, as it presently reads, was not 

intended to limit a negotiated contract to the original bidders. "`"[I]t would seem that any essential

change in the phraseology of a statutory provision would indicate an intention on the part of the

legislature to change the meaning of such provision rather than interpret it." (Citations.)' . . ." 

(Judson Steel Corp. v. Workers Comp. Appeals Bd. (1978) 22 Cal.3d 658, 666, fn. 6.) 

In answer to the first question, therefore, we conclude that until January 1, 1991,

when a county having a population of 500,000 or less rejects all competitive bids on a public project,

and the board of supervisors, after reevaluating the county's cost estimates on the project, by a fourfifths vote declares that in its opinion the project can be negotiated at a lower price than any of the

bids which were submitted, the county may thereafter negotiate a contract with a contractor who did

not submit a bid on the project. 

2. Proceeding Under The Change Orders 

The second question presented is whether it was proper for the county to negotiate

the contract for the courthouse renovation according to the original plans and specifications for

$3.91 million and thereafter execute change orders to conform to changes which were identified by

the contractor during negotiations. As noted, the contract price was reduced to $2.85 million, a 

reduction of approximately 27%. As just discussed, these changes were numerous and involved

changes in the plans and specifications as to both design matters and the materials to be used in the

project. 

The legal issue presented by such facts is whether the change in the contract was so

substantial that it should have been again put out to competitive bid pursuant to the governing

provisions of the Local Agency Public Construction Act. 

Before the turn of the century, California case law recognized that to make 

substantial changes in a contract after it has been let constitutes an evasion of competitive bidding 

laws. Thus, in Warren v. Chandos (1896) 115 Cal.382 a contract for street grading had been let

through the competitive bidding process. Under the governing law, the property owners had the

option of permitting the contract to be awarded through competitive bidding, or they could elect to

do the work themselves at the same price. After the contract had been let, the grading to be done 

2

The phrase "with the original bidders" will be added effective January 1, 1991, as follows: 

". . . or that in its opinion a contract to perform the project can be negotiated

with the original bidders at a lower price than that in any of the bids . . . ." 

4. 90-402
 
under the contract was changed so as to lessen both the cost of the contract and the street
 assessment. 

The court, in holding this to be improper and unauthorized, stated in part:
 

". . . Before the contract can be awarded, notice, `with specifications' inviting

proposals for doing the work ordered, must also be posted and published, and the

contract therefor is to be awarded to the lowest responsible bidder. The privilege is

then given to the owners to do the work themselves at the price at which it was

awarded, and thus be relieved from all burden except its actual cost. But if, after the 

contract has been awarded and entered into with the successful bidder, the character 

of the improvement can be changed, or the amount of work necessary for its

completion increased or diminished, they are not only deprived of the benefit of a

competition between bidders before the award, but they are also deprived of an

opportunity to determine whether it would be to their advantage to enter into the

contract themselves. 

In the present case it appears that the amount of work required for grading the street

to the official line, which was fixed after the contract was awarded, was thereby

reduced to such an extent as to materially affect the cost of the improvement.

Whether the amount of the assessment was thereby increased or diminished is

immaterial. . . ." (Id., at p. 385.) 

The other side of the coin is presented by the case of Bent Bros., Inc. v. Campbell

(1929) 101 Cal.App. 456. There the court held with respect to a construction contract let through

competitive bidding that changes could be made in the contract for extra work in an emergency

where such changes were not substantial. The following discussion by the court is pertinent to our 

inquiry: 

"To review all the authorities bearing upon the questions here involved would

extend this opinion to an undue length. Therefore, we will confine our citation of 

authorities to a limited number, which support the following statements of the law:

That where unseen emergencies arise after the letting of a contract and the beginning

of work, further publication and letting of bids are not required: [Citations.] Various 

illustrations are given in the cases just cited as to the changes in the plans

necessitated by emergencies arising after the beginning of the work, and all of the

cases hold that such changes do not invalidate the contract. A distinction, however, 

is made in all of the cases, between amendments or alterations in the plans and

specifications which do not affect the material character of the work and those

admitted changes or alterations which constitute substantial modifications or changes

in the character and quality of the work to be performed. Where changes are only

incidental, the contract is held unaffected; otherwise a different conclusion is 

reached. In the case at bar nothing has been called to our attention which would

indicate any substantial change, either in the character of the work to be done, or, in

view of the extent of the work to be done, any really substantial addition thereto. As 

we have shown, the added work does not reach the percentage degree approved in

the case of Frazer et al. v. City of Ardmore, supra." (Id., at pp. 469-470, emphasis 

added.) 

(See also 11 Ops.Cal.Atty.Gen. 33 (1948); 10A McQuillin, Municipal Corporations (3d ed. 1990)

§ 29.121, p. 153 ["Generally, power to modify does not confer authority to make a new or different

agreement"]; Annot., Evasion of Law Requiring Contract For Public Work To Be Let To Lowest 

5. 90-402
 
 

 

 

Responsible Bidder By Subsequent Changes In Contract After It Has Been Awarded Pursuant To

That Law (1930) 69 A.L.R. 697.) 

Or as cogently stated in the relatively recent case in a sister jurisdiction, Kenai 

Lumber Co., Inc. v. Le Resche (Alaska 1982) 646 P.2d 215, 220: 

"[G]enerally a government contract that was initially competitively bid

cannot be materially amended because that is tantamount to forming a new contract,

which should be accomplished by starting all over again with competitive bidding. 

"This rule has been judicially imposed in order to guard against

circumvention of competitive bidding requirements. Competitive bidding itself is

designed to ensure that government obtains the most favorable terms possible in its

contracts, and to protect the public from the possibility of favoritism, fraud, and

corruption on the part of public officials. . . ." 

In our view change orders are appropriately contemplated where, during the

performances of the contract, unforeseen matters are discovered which require some modification

to complete the contract. They are not intended to cover the situation where the changes were 

already identified before the contract was awarded by the county.3 

In short, the changes with respect to the courthouse renovation at issue herein were

not authorized under section 20150.10. We believe that such substantial changes amounting to a

reduction of 27% from the contract price in effect provided for a new "project." The word "project"

as used in section 20150.10 means the "project" as originally put out to bid without substantial

change.4 

In answer to the second question, therefore, we conclude that when a county having

a population of 500,000 or less negotiates a contract for a public project after rejecting all bids and

making the requisite declaration, it may not proceed with the project where (1) the negotiations with

the contractor result in a contract based upon the original plans and specifications, but (2) during

the negotiations the contractor identifies changes which can be made to the project which will

substantially reduce the overall cost of the project, and (3) the county executes change orders after

the contract is entered into in conformity with the identified changes to substantially reduce the cost

of the project. 

* * * * 

3

This type of legitimate change order is prescribed throughout the Local Agency Public

Construction Act for various entities. (See, e.g., §§ 20118.4, 20128, 20135-20138, 20206.2-

20206.3, 20405, 20447, 20452, 20455, 20659.) In these provisions it is common to find a limit on

the amount of such changes, for example, 10% or a fixed dollar amount. These limits would appear

to be inserted to ensure that substantial changes are not made which would, in effect, constitute the

making of a new contract. 

4

The existence of any general exemptions from competitive bidding requirements (see Graydon 

v. Pasadena Redevelopment Agency (1980) 104 Cal.App.3d 631, 636) is beyond the scope of this 

opinion. 

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