__________________________________ 

___________________________________________________________________________ 

OFFICE OF THE ATTORNEY GENERAL
 State of California
 

JOHN K. VAN DE KAMP
 Attorney General
 

OPINION : 

: No. 88-1101 

of : 

: JUNE 29, 1989 

JOHN K. VAN DE KAMP : 

Attorney General : 

: 

ANTHONY S. DaVIGO : 

Deputy Attorney General : 

: 

THE HONORABLE DEVON L. WORKMAN, COUNTY COUNSEL, COUNTY 

OF GLENN, has requested an opinion on the following question: 

May a general law county adopt a procedure governing the purchase of supplies and

equipment which provides to vendors within the county a five percent preference? 

CONCLUSION 

With respect to the purchase of ordinary supplies for which a county is required by

law to advertise for bids on an annual basis, a general law county which does not employ a

purchasing agent may not adopt a procedure which provides to vendors within the county a five

percent preference. 

With respect to other supplies, or in a general law county which employs a

purchasing agent, the county may, subject to any provisions of law governing the purchase of

particular goods or articles, adopt a procedure which provides to vendors within the county a five

percent preference. 

ANALYSIS 

We are asked whether a general law county, as part of its endeavor to develop

economically, may grant a five percent preference to "vendors within the county," however that term

might be specifically defined. Unless limited by statute, charter or ordinance, a governmental

agency may contract without competitive bidding. (Davis v. City of Santa Ana (1952) 108

Cal.App.2d 669, 677, 678; Swanton v. Corby (1940) 38 Cal.App.2d 227, 229; 38 Ops.Cal.Atty.Gen.

92, 93 (1961).) 

1. 88-1101
 
Section 542021/

 provides for the adoption of policies and procedures for the purchase 

of supplies: 

"Every local agency shall adopt policies and procedures, including bidding

regulations, governing purchases of supplies and equipment by the local agency.

Purchases of supplies and equipment by the local agency shall be in accordance with

said duly adopted policies and in accordance with all provisions of law governing 

same. No policy, procedure, or regulation shall be adopted which is inconsistent or

in conflict with statute."2/ 

It will be assumed for purposes of this discussion that the county has adopted a purchasing policy

which requires competitive bidding in connection with purchases of supplies and materials, and

which incorporates the proposed preference. We first consider the statutory constraints with which 

any such policy may not conflict. Section 25480 provides in part as follows: 

"In any county which does not employ a purchasing agent the board of 

supervisors shall annually or at such lesser intervals as it deems appropriate advertise

for at least 10 days in a newspaper of general circulation in the county for sealed bids

for furnishing the county with stationery, clothing, bedding, groceries, provisions,

drugs, medicines, and all other supplies. If there is no newspaper published in the

county, notices calling for bids shall be posted in three public places in the county."

 (Emphasis added.) 

Section 25481 provides: 

"All bids shall be on a schedule prepared by the clerk of the board showing

all articles needed in the several offices and departments and shall state separately

the price of each article to be furnished. Any person may bid upon any article 

separately." (Emphasis added.) 

Finally, section 25482 provides: 

"In considering the bids, the board may accept or reject all or any of them,

or may accept or reject a part of any bid, preference being given, however, to the 

lowest responsible bidder." (Emphasis added.) 

The latter section requires that preference be given to the lowest responsible bidder. This 

construction gives significance to the italicized words and is consistent with the interpretive precept

that every word, phrase and provision employed in a statute is intended to have meaning and to

perform a useful function. (Cf. White v. County of Sacramento (1982) 31 Cal.3d 676, 681; 68

Ops.Cal.Atty.Gen. 324, 327 (1985).) It is also consistent with the clearly mandatory terminology

of sections 25480 and 25481 immediately preceding. 

Further, the preference does not permit the application of another inconsistent one.

This follows from the nature of a preference, being a choice or estimation above another, and

consisting of a higher valuation or desirability. (Cf. Webster's Third New Internat. Dict. (1961) p. 

1787; and see MacNabb v. Sheridan (1942) 181 Md. 245, 29 A.2d 271, 272.) Accordingly, this 

1. Section references are to the Government Code. 

2. The term "local agency" includes counties. (§ 54201.) 

2. 88-1101 
office has determined that where a preference is required to be given by law to the lowest

responsible bidder, a preference in favor of local vendors is plainly invalid. (64 Ops.Cal.Atty.Gen.

670 (1981); 48 Ops.Cal.Atty.Gen. 11 (1966).) Consequently, in a county which does not employ

a purchasing agent, a preference may not be given to local vendors for the purchase of stationery,

clothing, bedding, groceries, provisions, drugs, medicines, "and all other supplies." 

Where, on the other hand, a purchasing agent has been employed (§ 25501), section

25502 pertains: 

"Whenever the board of supervisors employs a purchasing agent it shall not

be necessary for it to advertise for bids for furnishing county supplies as required in

Section 25480, with the exception of advertising." 

Section 25508 provides: 

"The board of supervisors may by ordinance establish rules and regulations

requiring the purchasing agent to obtain quotations by the use of formal or informal

bids, in connection with the purchase of materials, supplies, furnishings, equipment,

livestock and other personal property which such purchasing agent is authorized to

purchase for the county and its offices. The purchasing agent shall comply with such 

rules and regulations." 

Hence, if a county employs a purchasing agent, the supervisors may require the agent "to obtain

quotations by the use of formal or informal bids." Assuming that the supervisors have so required,

and that such requirement necessarily implies a duty to select the lowest responsible bid, the

question supposes that the supervisors have nevertheless provided, by way of exception or

limitation, for a five percent local vendor preference. Inasmuch as the board is clearly not required

to impose such a duty, we perceive no barrier to its imposition subject to condition or limitation.

In the absence of any other statutory or constitutional constraint, the county may permit such a

limitation.3/ 

Whether or not a purchasing agent has been employed, section 25482 would not

apply to the purchase of properties not designated in section 25480 or encompassed within its

reference to "all other supplies." The latter phrase is limited by the other provisions of the section 

in which it is found. Specifically, it refers to those supplies for which the county is required by that

section to advertise on at least an annual basis; the bid which is accepted as the result of that

advertising comprises the maximum price for which the supplies may be purchased by the county

or any county officer during the ensuing period. (See § 25483; 27 Ops.Cal.Atty.Gen. 325, 326

(1956).) These supplies have been referred to as "ordinary county supplies" as distinguished from

special purchases for particular projects such as the construction of a highway, the furnishing of a

courthouse, or the purchase of buses for use in the operation of a public utility. (H. Cowell Lime & 

Cement Co. v. Williams (1920) 182 Cal. 691, 696.) With regard to articles not falling within the

purview of section 25480, and except as may be otherwise statutorily (e.g., 27 Ops.Cal.Atty.Gen., 

supra -- automobiles) or constitutionally constrained, we find no impediment to the local vendor

preference. It is assumed that any such preference would be adopted pursuant to the procedure

prescribed in section 54202, supra. The reference in that section to the purchase of "supplies and

equipment" is not contextually limited as in the case of section 25480, but is of a much broader

order. (38 Ops.Cal.Atty.Gen. 92, 95-97 (1961).) 

3. Our letter opinion dated May 27, 1968, IL 68-129, is disapproved to the extent of

inconsistency herewith. 

3. 88-1101 
Where a preference is not statutorily proscribed, as set forth in the foregoing analysis,

we must nevertheless examine any constitutional impediment which might impact the validity of the

policy. 

The California Court of Appeal, in Bethlehem Steel Corp. v. Bd. of Com. (1969) 276

Cal.App.2d 221, held unconstitutional the California Buy American Act (§§ 4300-4305) which

requires that contracts for the construction of public works or the purchase of materials for public

use be awarded only to persons who will agree to use or supply materials, which have been

manufactured in the United States, substantially all from materials produced in the United States.

The Act, effectively placing an embargo on foreign products, was perceived by the court as a

usurpation of the inherent, exclusive, and plenary federal power to conduct foreign trade policy. (Id. 

at 224-225.) In such a case, countervailing state policies are wholly irrelevant to judicial inquiry. 

(Id. at 225.) 

The following year, this office concluded that the California Preference Law

(§§ 4330-4334) "affects foreign commerce as much as did the California Buy American Act," and

required a similar result. (53 Ops.Cal.Atty.Gen. 72, 73 (1970).) Specifically, section 4331 provides: 

"Price, fitness and quality being equal, any body, officer, or other person

charged with the purchase, or permitted or authorized to purchase supplies for the

use of the State, or of any of its institutions or offices, or for the use of any county

or city shall always prefer supplies grown, manufactured, or produced in the State,

and shall next prefer supplies partially manufactured, grown, or produced in the

State." 

We have no occasion for purposes of this analysis to reconsider that opinion in light of the more

recent cases discussed below, establishing the prerogative of a government to act as a market

participant. The distinction may be noted, however, that none of those cases involved the regulation

by a state not only of its own purchases but also of those of every city and county within the state.

It has been argued that the distinction is both analytical and quantitative, rendering the state a market

regulator. (Cf. W.C.M. Window Co., Inc. v. Bernardi (1984) 730 F.2d 486, 495-496.) 

The principles underlying the applicability of the Commerce Clause in such cases are 

found in Hughes v. Alexandria Scrap (1976) 426 U.S. 794, concerning a Maryland program

designed to remove abandoned automobiles from the state's roadways. A bounty was offered for

every "hulk" converted into scrap. More exacting documentation requirements were imposed on

out-of-state than in-state processors, making it less remunerative for suppliers to transfer vehicles

outside Maryland. The court held that "Maryland has not sought to prohibit the flow of hulks, or

to regulate the conditions under which it may occur. Instead, it has entered into the market itself to 

bid up their price" (id. at 806), "as a purchaser, in effect, of a potential article of interstate

commerce," and has restricted "its trade to its own citizens or businesses within the state." (Id. at 

808.) As market participant rather than a market regulator, the state required no independent

justification for its action. (Id. at 809.) "Nothing in the purposes animating the Commerce Clause

prohibits a state in the absence of congressional action, from participating in the market and

exercising the right to favor its own citizens over others." (Id. at 810.) 

In Reeves, Inc. v. Stake (1980) 447 U.S. 429, the court held that the policy of the

South Dakota Cement Commission did not violate the Commerce Clause. Due to a shortage of

cement, the Commission had adopted a policy confining the sale of output by a state-owned and

operated plant to the residents of that state, causing an out-of-state distributor of concrete, which had 

4. 88-1101
 
depended upon the purchase of cement from the plant, to cut its production substantially. The court 

concluded that the state had simply acted in a proprietary capacity (id. at 433): 

"[T]he Commerce Clause responds principally to state taxes and regulatory

measures impeding free private trade in the national marketplace . . . There is no 

indication of a constitutional plan to limit the ability of the states themselves to

operate freely in the free market." (Id. at 437.) 

In footnote 9 (id. at 437-438) the court made the following observation: 

". . . In American Yearbook Co. v. Askew, 339 F.Supp. 719 (MD Fla. 1972),

a three-judge District Court upheld a Florida statute requiring the State to obtain

needed printing services from in-state shops. It reasoned that `state proprietary

functions' are exempt from Commerce Clause scrutiny. Id., at 725. This Court 

affirmed summarily. 409 U.S. 904 (1972). . . . 

"One other case merits comment. In Bethlehem Steel Corp. v. Board of 

Commissioners, 276 Cal.App.2d 221, 80 Cal.Rptr. 800 (1969), the court struck down

a California statute requiring the State to contract only with persons who promised

to use or supply materials produced in the United States. In Opinion No. 69-253 Op.

Cal. Atty. Gen. 72 (1970), the State's Attorney General reasoned that Bethlehem Steel 

similarly prohibited, under the `foreign commerce' Clause, statutes giving a

preference to California-produced goods. We have no occasion to explore the limits

imposed on state proprietary actions by the `foreign commerce' Clause or the

constitutionality of `Buy American' legislation. Compare Bethlehem Steel Corp., 

supra, with K.S.B. Technical Sales Corp. v. North Jersey Dist. Water Supply 

Comm'n, 75 N.J. 272, 381 A.2d 774 (1977). We note, however, that Commerce 

Clause scrutiny may well be more rigorous when a restraint on foreign commerce is

alleged. See Japan Line, Ltd. v . County of Los Angeles, 441 U.S. 434 (1979)." 

Finally, in White v. Massachusetts Council of Construction Employers, Inc. (1983)

460 U.S. 204, the executive order of the Mayor of Boston, requiring that at least 50 percent of all

jobs on construction projects funded in whole or in part by city funds be filled by city residents, was

held immune from the Commerce Clause because the city was acting as a market participant rather

than as a market regulator. 

Unlike the participant-regulator distinction pertinent under the Commerce Clause,

the Privileges and Immunities Clause imposes a direct restraint on state action in the interests of

interstate harmony. Article IV, section 2, clause 1, of the United States Constitution provides that

"[t]he Citizens of each state shall be entitled to all Privileges and Immunities of Citizens in the

several States." The application of this clause to a certain claim of discrimination against out-ofstate residents must be based upon an underlying determination that the action or policy complained

of burdens one of those privileges and immunities protected by the clause. In Baldwin v. Montana 

Fish and Game Com. (1978) 436 U.S. 371, 383, the court explained: 

"Some distinctions between residents and nonresidents merely reflect the fact

that this is a Nation composed of individual States, and are permitted; other

distinctions are prohibited because they hinder the formation, the purpose, or the

development of a single Union of those States. Only with respect to those

`privileges' and `immunities' bearing upon the vitality of the Nation as a single entity

must the State treat all citizens, resident and nonresident, equally." 

5. 88-1101
 
Consequently, it must be determined whether an out-of-state vendor's interest in contracting with

the county for the sale of supplies and equipment is sufficiently "fundamental" to the promotion of

interstate harmony so as to "fall within the purview of the Privileges and Immunities Clause." (Id. 

at 388.) 

In United Building & Construction Trades Council etc. v. Mayor etc. of Camden

(1984) 465 U.S. 208, the City of Camden had adopted an ordinance requiring that at least 40 percent

of the employees of contractors working on city construction projects be residents of that city. The 

court observed that the expenditure by the city of its own funds was certainly a factor -- perhaps the

crucial factor -- to be considered in evaluating whether the effort to bias private employment

decisions in favor of its residents violated the Privileges and Immunities Clause, but did not remove

the ordinance completely from its purview. (Id. at 221.) The court held that the opportunity to seek

employment with such private employers is "sufficiently basic to the livelihood of the Nation" as

to fall within the clause. (Ibid.) 

The determination that the city's policy discriminated against a protected privilege

does not, in itself, offend the privileges and immunities clause. Discrimination against citizens of

other states is not precluded where there is a "substantial reason" for the difference in treatment. As 

part of any such justification, nonresidents must be shown to "constitute a peculiar source of the evil

at which the statute is aimed." (Id. at 222.) Finally, every such inquiry must be conducted with due

regard for the principle that a state should have considerable leeway in analyzing local evils and in

prescribing appropriate cures, particularly where it is merely setting conditions on the expenditure

of funds it controls. (Id. at 222-223.) 

We do not reach this second inquiry, nor do we have an adequate factual basis for 

doing so. We do not find, in the first instance, that the policy in question discriminates against a

protected privilege, or, more specifically, that the interests of an out-of-state vendor in contracting

with the county for the sale of supplies is similarly fundamental to interstate harmony, as was the

opportunity at issue in United Building to seek employment with private employers on publicly 

funded construction projects. 

Again, the fact that the county is expending its own funds "is certainly a factor -- perhaps the crucial factor -- to be considered" in evaluating whether the discriminatory preference

violates the clause. More importantly, while the pursuit of a common calling is one of the most

fundamental of those privileges protected by the clause (id. at 219), and while the freedom of

contract is clearly one of the liberties protected by the Fourteenth Amendment (Allgeyer v. 

Louisiana (1896) 165 U.S. 578), the opportunity to be employed by or to contract with the

government is of a different order. Neither is a fundamental interest "explicitly or implicitly 

guaranteed by the Constitution." (Cf. San Antonio School District v. Rodriguez (1973) 411 U.S. 1,

33-34; D'Amico v. Bd. of Med. Examiners (1974) 11 Cal.3d 1, 18.) It has been held, accordingly,

that there is no fundamental right to government employment for purposes of the Equal Protection

Clause. (Massachusetts Bd. of Ret. v. Murgia (1976) 427 U.S. 307, 313; and cf. McCarthy v. 

Philadelphia Civ. Serv. Com. (1976) 424 U.S. 645, rejecting a challenge based on the due process

and equal protection clauses of the Fourteenth Amendment, and the right of interstate travel, to a city

residency requirement for municipal employees.) It has also been held that no one has a vested right

in public employment except insofar as the right is conferred by statute or other valid regulation.

(Butterworth v. Boyd (1938) 12 Cal.2d 140, 150; Payne v. State Personnel Board (1958) 162

Cal.App.2d 679, 681; 72 Ops.Cal.Atty.Gen. 1, 6 (1989); 65 Ops.Cal.Atty.Gen. 475, 480 (1982).)

Consequently, the policy in question does not, in our view, offend the Privileges and Immunities

Clause. 

6. 88-1101
 
Finally, in the absence of a fundamental right or of any suggestion of a suspect

classification which would invite a stricter scrutiny, the equal protection clause of the Fourteenth

Amendment requires only that a classification bear some rational relationship to a legitimate

governmental purpose. (Schwalbe v. Jones (1976) 16 Cal.3d 514, 517-518; Dandridge v. Williams 

(1970) 397 U.S. 471, 485; 62 Ops.Cal.Atty.Gen. 180, 182 (1979).) Here, the classification between 

vendors within and those without the county is rationally related to the legitimate governmental

purpose of economic development. (Compare, e.g., governmental purposes declared in sections

4531 and 7081 with attendant preferred classes established in sections 4533 and 7095, respectively.) 

Accordingly, with respect to supplies not subject to section 25482, or in a general law

county which employs a purchasing agent, the county may, in accordance with section 54202, and

subject to any provisions of law governing the purchase of particular goods or articles, adopt a

procedure which provides to vendors within the county a five percent preference. 

* * * * * 

7. 88-1101