Opinion ID: 1266394
Heading Depth: 1
Heading Rank: 6

Heading: Violations of District Procurement Code

Text: The Plaintiffs allege that the resolution and its attendant agreements violate the School District's procurement code because (A) the agreements create contracts with financial advisors, bond attorneys, a bond insurance company, and a company acting as a trustee, all without competitive bidding; (B) the agreements create contracts with SCAGO and the Corporation without competitive bidding; and (C) the contracts with SCAGO and the Corporation are improper multi-year contracts. We disagree.
The School District's procurement code applies to the expenditure of public funds irrespective of their source. See District Procurement Code § 1-102. Thus, generally speaking, the School District's procurement code would apply to contracts the School District enters into with financial advisors, bond attorneys, and other similar parties, provided that the contracts require the School District to spend public funds. In the instant case, however, the resolution and its attendant agreements provide that the Corporation, not the School District, will enter into several of the challenged contracts with financial advisors, bond attorneys, a bond insurance company, and a company acting as a trustee. Unless the School District is a party to these contracts, we can discern no basis upon which to conclude that the School District's procurement code is applicable in these circumstances. Because the record indicates that the School District is not a party to these contracts, it naturally follows that the School District's procurement code, in these events, is inapplicable. Second, § 2-101 of the School District's procurement code generally provides that all contracts awarded by the School District are to be awarded by competitive sealed bidding. This requirement is not absolute, however, and one exception to this procedure applies to contracts for professional services which are normally obtained on a fee basis. See id. at § 1-103(i) (listing attorneys, accountants, physicians, and dentists as examples of these types of services). The School District argues that any contracts or agreements it has already formed or will form with bond attorneys or financial advisors will clearly fall under the procurement code's professional services exception. The Plaintiffs do not dispute this assertion, but instead argue that the School District's professional services exception is invalid because the South Carolina General Assembly repealed a similar exception from the South Carolina Consolidated Procurement Code in June 2006. [10] We disagree with the Plaintiffs' contention. This argument is unpersuasive. The General Assembly's repeal of the Consolidated Procurement Code's professional services exception has no relevance to the validity of the School District's identical exception. The Plaintiffs do not argue that Act No. 376 directly repealed the School District's exception, nor do they suggest that the act implicitly repealed the School District's exception. Instead, the Plaintiffs suggest that Act No. 376 amounts to a determination that a professional services exception no longer embodies sound principles of appropriately competitive procurement within the meaning of S.C.Code Ann. § 11-35-50 (Supp.2005). We hold that this conclusory statement is insufficient to present any issue to this Court for review. The Plaintiffs' brief presents only this blanket conclusion and provides no authority supporting their argument. Thus, the Plaintiffs have effectively waived this argument. See Solomon v. City Realty Co., 262 S.C. 198, 201, 203 S.E.2d 435, 436 (1974) (an exception was deemed effectively abandoned where the argument relating to the exception consisted solely of an inaccurate bald conclusion). Accordingly, we hold that the School District did not violate its procurement code by entering into contracts with financial advisors or bond attorneys. Furthermore, we hold that the School District's procurement code is irrelevant to contracts the Corporation may enter into with financial advisors, bond attorneys, a bond insurance company, or a company acting as a trustee.
The Plaintiffs claim that the resolution and its attendant agreements improperly create contracts with SCAGO and the Corporation without complying with the competitive bidding requirement in the School District's procurement code. We disagree. As our jurisprudence instructs, an issue that is contingent, hypothetical, or abstract is not ripe for judicial review. Waters, 321 S.C. at 227, 467 S.E.2d at 917-18. Stated differently, [a] justiciable controversy is a real and substantial controversy which is ripe and appropriate for judicial determination, as distinguished from a contingent, hypothetical or abstract dispute. Id. (quoting Pee Dee Elec. Co-Op, Inc. v. Carolina Power & Light Co., 279 S.C. 64, 66, 301 S.E.2d 761, 762 (1983)). The Plaintiffs' claims on this issue can be grouped into challenges to three arrangements: (1) the arrangement under which the School District is to convey the existing school facilities to the Corporation and lease the land on which these facilities sit to the Corporation; (2) the arrangement under which the School District may purchase the renovated or newly constructed facilities by making annual installment payments to the Corporation; and (3) the construction contracts the School District may enter on behalf of the Corporation. [11] As a first matter, neither conveying the existing facilities nor leasing the Corporation the land on which these facilities sit involves the expenditure of public funds. Therefore, the procurement code does not apply to these agreements. Second, an adjudication of the Plaintiffs' claims on the remaining agreements at the present time presumes too much. As yet, no public funds have been appropriated as installment payments under the Installment Purchase and Use Agreement. Thus, this challenge can only be deemed an academic and premature exercise. Furthermore, the Plaintiffs' remaining claim assumes that the School District will award the renovation and construction contracts in a manner other than by competitive sealed bidding. Because this claim involves pure hypothesis and speculation, this claim is not ripe for judicial review. Assuming the Plaintiffs meet the required elements of standing, the proper time to bring this claim would be after the School District awarded a construction contract to a contractor without using the sealed competitive bid process. [12] Accordingly, we dismiss the Plaintiffs' claims that the agreements improperly create contracts with SCAGO and the Corporation without competitive bidding. Most of these claims fail on their merits, and those remaining are not ripe for review.
The Plaintiffs argue that the Installment Purchase and Use Agreement (providing for the buy-back of renovated or newly constructed school facilities) and the Base Lease and Conveyance Agreement (leasing the land on which the renovated school facilities currently sit to the Corporation) violate the procurement code's limit on the term of contracts. We disagree. Section 2-302 of the School District's procurement code generally provides that the School District may not enter into a contract for supplies or services which contains a term agreement extending beyond five years. The procurement code's definitional section defines service as the furnishing of labor, time, or effort. See id. § 1-201(22). The section defines supplies as [a]ll property including ... leases of real property, excluding land or a permanent interest in land. Id. Because the procurement code's plain terms clearly exclude land or a permanent interest in land from the definitional provisions which are subject to the code's limitations on the terms of contracts, concluding that the Base Lease and Conveyance Agreement is excluded from the procurement code's time limit is a rather elementary determination. Turning to the Installment Purchase and Use Agreement, we hold that this contract is also exempt from the procurement code's time limitation, but for a different reason. The agreement expressly provides that it is not an agreement for a multi-year term, but is instead a one-year agreement that may, at the School District's option, be renewed until the School District has completely purchased the renovated and newly constructed school facilities from the Corporation. Because this agreement is not for a multi-year term, the procurement code's time limitation on contracts does not apply. Accordingly, we hold that the School District has not violated the time limit on contracts found in its procurement code.