Opinion ID: 1873949
Heading Depth: 2
Heading Rank: 3

Heading: Power to Determine Bidder Responsibility

Text: The applicants lastly argue the School Board has the power to require all prospective bidders to pay prevailing wages pursuant to its legislative authority to establish standards for determining a contractor's responsibility. Simply stated, the School Board argues a bidder's willingness and ability to pay wages meeting or exceeding the standard prevailing wage rate is one of the factors by which it may find a bidder to be socially responsible. [19] There is nothing to suggest the term responsible as contained in Louisiana's Public Bid Law has reference to anything other than the quality, fitness and capacity of the low bidder to satisfactorily perform the proposed work. Moreover, the broad reading of the term responsible urged by the applicants is inconsistent with the purposes underlying the competitive bid statute as it eliminates an objective standard from the Public Bid Law and substitutes a concept so nebulous that it removes any meaningful constraint on the Board's actions. Associated General Contractors of California, Inc. v. City & County of San Francisco, 813 F.2d 922, 926 n. 7 (9th Cir.1987). See also Associated General Contractors of California v. San Francisco Unified School District, 616 F.2d 1381 (9th Cir.1980), cert. denied, 449 U.S. 1061, 101 S.Ct. 783, 66 L.Ed.2d 603 (1980). Furthermore, the power to set or prescribe a minimum wage is regarded as an exercise of the police power because a minimum wage is generally intended to insure employment at fair and reasonable wages and to stimulate the economy. Parish Council of Parish of East Baton Rouge v. Louisiana Highway & Heavy Branch of Associated General Contractors, Inc., 131 So.2d 272 (La.App. 1st Cir.1961). See also, 7 E. McQuillin, The Law of Municipal Corporations § 24.434 (3d ed. 1989). Were we to allow the School Board to define the term responsible to mean socially responsible we would be allowing it to engage in the exercise of police power. [20] A municipal corporation, such as a school board, has no inherent power to enact police regulations. [21] Municipal corporations are subordinate branches of state government established by the legislature for the purpose of administering local affairs of government, and as such, possess only such powers as are conferred upon or delegated to them by the state. Bradford v. City of Shreveport, 305 So.2d 487 (La. 1974); Simmons v. City of Shreveport, 221 La. 902, 60 So.2d 867 (1952); State v. Jordan, 207 La. 78, 20 So.2d 543 (1944). Thus, in order for a school board to have the authority to prescribe the rate of wages to be paid to employees of those who contract for the construction of public works, the authority to do so must be delegated to the school board from the state. The legislature's requirement of competitive bidding in connection with public works contracts is a valid exercise of the state police power for the protection of the public. In 1968, the Louisiana legislature determined the payment of prevailing wage scales by contractors on public works projects was a matter affecting the health, safety and welfare of residents of the State of Louisiana and adopted what was known as the Prevailing Wage Law (La.R.S. 38:2301) (Act No. 65 of 1968). Accordingly, the legislature modified the definition of responsible bidder as contained in the Public Bid Law. The Prevailing Wage Law specifically stated: no bidder who does not comply with the requirements of this act shall be considered a responsible bidder within the meaning of Louisiana law. La. R.S. 38:2301(A) (repealed 1988). In enacting the Prevailing Wage Law in 1968, the legislature validly exercised its police power and defined a responsible bidder as one who agreed to pay prevailing wages. The fact that the legislature has the requisite authority to prescribe the payment of prevailing wages on public works projects does not mean a parish school board is clothed with a similar grant of power. Absent authority from the state legislature, a parish school board cannot infringe upon the rights of the state and invade the domain of the legislature. After 1968, municipalities, parishes and other local political subdivisions such as school boards were authorized by the state legislature to utilize a prevailing wage scheme in public works contracts as long as the prevailing wage provisions were identical to those provided by the Prevailing Wage Law. La.R.S. 38:2301(M), (repealed 1988). Based on the title of the enacting legislation, Act No. 65 of 1968, [22] as quoted below, the clear intent of the legislature was to authorize local governing bodies and agencies, such as school boards, to require the payment of prevailing wages in the area of public construction projects if they so resolved: To express the public policy of Louisiana relative to the payment of prevailing wages in the particular area on all projects of the State or its agencies; to require that the prevailing wages be ascertained in advance of such projects and that all bidders therein be bound by these determinations and all contractors be required to comply therewith; to define what is included in the term wages and to set forth the method of making the said determinations; and to authorize local governing bodies to make similar requirements in their contracts for public works; to provide civil penalties for the violation of this act. (Emphasis added.) However, by Act No. 90 of 1988, the Louisiana legislature expressly repealed La.R.S. 38:2301 in its entirety. By virtue of this repeal, local governing authorities are no longer provided with the authority to require the payment of prevailing wages on public contracts. Without such authority, the School Board does not possess the police power to require prevailing wage payments on its public works projects. While it may be desirable and beneficial for the local economy for the School Board to require the payment of prevailing wages on its construction projects, without specific legislative authority to do so, the Board is powerless to act. Our conclusion that the school boards of this state do not possess the police power to require prevailing wage rates on public construction projects is supported by the fact that the Louisiana legislature has specifically granted school boards of the state limited police power in the area of public works. The legislature has expressly delegated to school boards the power to set aside a certain amount of funds to be awarded to small businesses, minority-owned businesses, or women-owned businesses. [23] For example, those school boards of parishes which have populations in excess of five hundred thousand are authorized and empowered by the state legislature to set aside a certain percentage of the anticipated total procurement for the construction of public works for awarding to small businesses. [24] Similarly, the legislature has expressly delegated to local political subdivisions the power to impose state residency requirements for laborers performing work on public contracts. [25] Unquestionably, local political subdivisions are not authorized to determine bidder responsibility in terms of social awareness without specific statutory authorization from the legislature.