Opinion ID: 1873949
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Heading: Power to Determine and Prescribe Bid Specifications

Text: In addition to the necessary and implied power it claims to possess pursuant to La.R.S. 17:81, the School Board contends it has the right to specify certain prevailing wage rates to be paid on its public works contracts pursuant to its authority under the Public Bid Law to present and advertise the contract, plans and specifications which it determines are appropriate for a given project. Although the Public Bid Law makes no explicit reference as to what, if any, labor specifications may be advertised by a public entity, it expressly regulates the use of specifications as to products and materials. [17] An examination of the legislative restrictions which have been placed on a public entity's ability to prescribe product specifications provides insight into the legislative intent regarding labor specifications. La.R.S. 38:2212(F) provides as follows: (1) Whenever a public entity desires to purchase technical equipment, apparatus, machinery, materials, or supplies of a certain type and such purchases are clearly in the public interest, the public entity may specify a particular brand, make, or manufacturer in the specifications let out for public bid as provided by this Part.       (2) Wherever in specifications the name of a certain brand, make, manufacturer, or definite specification is utilized, the specifications shall state clearly that they are used only to denote the quality standard of product desired and that they do not restrict bidders to the specific brand, make, manufacturer, or specification named; that they are used only to set forth and convey to prospective bidders the general style, type, character, and quality of product desired; and that equivalent products will be acceptable. Additionally, La.R.S. 38:2290, commonly referred to as the Closed Specification Statute, supplements the low bidder statute as follows: A. No architect or engineer, either directly or indirectly, shall submit a closed specification of a product to be used in the construction of a public building or project, unless all products other than the one specified would detract from the utility of the building or except in those cases where a particular material is required to preserve the historical integrity of the building or the uniform appearance of an existing structure. B. Under no circumstances shall a closed specification be submitted, or authorized, where any person or group of persons possess the right to exclusive distribution of the specified product. The above two statutes clearly demonstrate a conscious effort on the part of the legislature to assure uninhibited competitive bidding. The Closed Specification Statute was designed to supplement the Public Bid Law by prohibiting the use of closed specifications which exclude products of equal utility and appearance and consequently prevent or restrict full and free competition. Our jurisprudence has interpreted the Closed Specification Statute on two occasions. In Stevens Concrete Pipe and Products, Inc. v. Burgess, 252 La. 136, 209 So.2d 733 (1968), we held the City-Parish Council's requirement that all concrete pipe used in its public works projects be in minimum lengths of twelve feet violated La.R.S. 38:2290 because it stifled competition by excluding products of equal utility and appearance. The same analysis led to a different result in Tide Equipment Co. v. Pointe Coupee Parish Police Jury, 312 So.2d 154 (La.App. 1st Cir.1975), writ denied, 315 So.2d 38 (La.1975), where the court indirectly upheld a provision in the advertised specifications which called for a tractor manufactured in the United States. The court found the Police Jury was justified in rejecting the plaintiff's bid proposing a tractor manufactured in Japan because of the uncertainty surrounding the relatively newly manufactured Japanese tractor. [18] It is important to note, however, that the American-made specification would have been struck down as violative of the Closed Specification Statute had the plaintiff demonstrated by a preponderance of the evidence that the quality of its product was equal to that of the specified American-made tractor. In the area of product specifications, the emphasis in the statutory language and the case law is on the quality of the product or material. Under the Public Bid Law, a public entity is allowed, subject to certain legislatively imposed restrictions, to specify a particular quality of product desired. A public entity may not impose a product specification which suppresses competition by eliminating products of equal quality. The Public Bid Law does not allow a public entity to specify the price of a given product or material. There are two obvious reasons for this. First, the goal of the Public Bid Law is to insure the lowest price for a specified quality of work. If a public entity were allowed to specify the price of a component of the work, the public bid process would be subject to the very abuse and exploitation it is intended to guard against. Additionally, as a practical matter, specifications as to price do not prove effective because although the price of a given product may suggest a certain quality of product, price is not always indicative of quality. The same principles are applicable by analogy to the quality of a laborer. A mandate of a prevailing wage inhibits bidders who may be able to perform the construction work equally as well but at a lower price. Additionally, there is no guarantee the establishment of a prevailing wage on public works contracts will insure quality workmanship on the projects. Indeed, [t]here is no essential or necessary connection between the hourly wages paid by a contractor and the intrinsic quality and character of the work done. Hillig v. City of St. Louis, 337 Mo. 291, 85 S.W.2d 91, 93 (1935). When faced with the identical issue we address today, the Alabama Supreme Court stated in Wallace v. Board of Education of Montgomery County, 280 Ala. 635, 197 So.2d 428, 434 (1967): We do not think ... the fixing of a minimum wage for employees of the contractor can reasonably or necessarily be expected to tend to insure better quality work under the instant contract. Under a required minimum wage, the unskillful artisan will be guaranteed the same minimum wage as the skillful workman, the indolent the same minimum wage as the industrious craftsman. The power to designate the quality of material to be used does not carry with it the power to require that the contractor must pay a specified minimum price to the seller for each unit of material used, and, by analogy, we do not think the power to designate the quality of workmanship carries with it the power to require that a minimum, hourly, wage shall be paid to all employees of the same class performing the work. Thusly, the highest court of a sister state has treated the issue of power to determine and prescribe the fixing of a minimum wage. The reasons are not without logic and persuasion. Specifications should be drafted so that the goods or services desired are definitively set forth and yet not be so restrictive as to eliminate competition. Great care must be taken to see that specifications are properly tailored so that the ultimate goal of the system (to promote competition) is not lost. While the School Board may have, consistent with the Public Bid Law, included in its bid advertisements certain specifications directly related to the quality of the labor to be employed on its projects, (i.e., all workers must have a minimum of five years experience in their given field) the Board's specification that all laborers be paid a minimum prevailing wage stifles competition while at the same time not adequately insuring quality. Consequently the Board's action defeats the purpose behind the Public Bid Law by wrongfully eliminating a group of bidders who may, in fact, be responsible.