Opinion ID: 1662051
Heading Depth: 1
Heading Rank: 4

Heading: competitive bid law claims

Text: Plaintiffs assert that Ordinance 77-257, as amended, conflicts with Code 1975, § 41-16-50 (Supp.1980), which provides in part: § 41-16-50. Contracts for which competitive bidding required; manner of awarding contracts generally; award of contracts to resident bidders; negotiation of contracts; joint contracts. (a) All expenditure of funds of whatever nature for labor, services or work, or for the purchase or lease of materials, equipment, supplies or other personal property involving $2,000.00 or more, made by or on behalf of ... the governing bodies of the municipalities of the state and the governing boards of instrumentalities of counties and municipalities, including waterworks boards, sewer boards, gas boards and other like utility boards and commissions ... shall be made under contractual agreement entered into by free and open competitive bidding, on sealed bids, to the lowest responsible bidder. ... Code 1975, § 41-16-50(a) (Supp.1980). Plaintiffs complain that, contrary to the statutory mandate, the ordinance requirements not only inhibit fair and open competitive bidding, but also may result in the award of a city contract to someone other than the lowest responsible bidder. This Court has not had occasion to construe § 41-16-50; however, we have interpreted the statute governing competitive bidding on state contracts, i. e. § 41-16-20. Section 41-16-20, like § 41-16-50, requires that the contract be awarded to the lowest responsible bidder in open competitive bidding, see, Code 1975, § 41-16-20 (Supp. 1980), and we believe cases construing § 41-16-20 are instructive in the instant case. In White v. McDonald Ford Tractor Co., 287 Ala. 77, 248 So.2d 121 (1971), this Court recognized the state authorities' broad discretion in determining whether a bidder is the lowest responsible bidder. The Court indicated, however, that the authorities' discretion is not unbounded. The Court said: [W]e do not mean to imply that this Court or some other court would not have the authority to declare a contract as being void because the specifications were written in such a manner that full and fair competition was excluded. It is fair to say that the legislative intent in passing the Competitive Bid Law was to get the best quality equipment at the lowest possible price, and the executive authorities should carry out this intent of the legislature. 287 Ala. at 86, 248 So.2d at 129. While bid specifications are permissible where their purpose is reasonably related to contract requirements or the quality of the product or service in question, we believe that intrusive specifications wholly unrelated to contract requirements or to product suitability or quality unduly inhibit fair and open competition. Defendant Birmingham contends that the evidence shows the ordinance has never been applied so as to exclude the lowest responsible bidder. The ordinance, however, does not require that the lowest responsible bid be accepted. Indeed, under the ordinance, the lowest bid is not considered at all unless it is accompanied either by a waiver request, or by a list of proposed MBE subcontractors. Additionally, the ordinance deters participation in the bidding process because, as the circuit court found, the ordinance requirements are time consuming and costly to contractors. As a result, we hold that the ordinance frustrates the open competitive bidding process required by Code 1975, § 41-16-50 (Supp. 1980). Of course, it is of no consequence that the ordinance contravenes the competitive bidding statute if the ordinance provisions are required by the United States Constitution. That is, the dispositive issue is whether Birmingham's affirmative action program is constitutionally required or whether the program is merely constitutionally permissible. Our study of recent federal decisions convinces us that the program is not constitutionally required, and, furthermore, even if some affirmative action program were required, we believe that the program here imposed is not constitutionally sound. The case of Associated General Contractors v. San Francisco Unified School District., 616 F.2d 1381 (9th Cir.), cert. denied, ___ U.S. ____, 101 S.Ct. 783, 66 L.Ed.2d 603 (1980), provides guidance for our resolution of the question. In that case, plaintiffs challenged an affirmative action policy adopted by the San Francisco Board of Education. Under the policy, the school district was required to award twenty-five percent of the dollar volume of certain construction contracts to minorities, either by letting the contract to a minority general contractor, or by requiring the general contractor to utilize the specified percentage of minority subcontractors. The twenty-five percent set-aside applied only to projects funded by PWEA funds, although receipt of PWEA funds was conditioned on a minority participation of only ten percent. The district court held the set-aside illegal, except as to the ten percent minority participation requirement for federally funded projects, and the school board appealed. The United States Court of Appeals for the Ninth Circuit found the minority participation requirement in conflict with the California Education Code, which requires that a construction contract be awarded to the lowest responsible bidder. Furthermore, the Court sustained the code provision against constitutional attack on the basis of Washington v. Davis, 426 U.S. 229, 96 S.Ct. 2040, 48 L.Ed.2d 597 (1976), finding the competitive bid law race-neutral on its face and without discriminatory purpose. Finally, the Court found no constitutional duty to institute stacked deck affirmative action programs, that is, programs which deny some nonminorities the relevant benefit by imposing a preference for minorities. Since the affirmative action program was not constitutionally compelled, the competitive bid provision of the California Education Code was a constitutional exercise of state power, and the Court of Appeals affirmed the district court's decision by holding that the set-aside policy violated the California Code provision. We believe the San Francisco Unified School District case is in all material respects factually identical to the case at bar. Although in that case the affirmative action program was imposed by an agency having no legislative powers, rather than, as here, by a city council having limited legislative power, a city council has no more authority than an agency to initiate programs in violation of state law or policy. See, Busch Jewelry Co. v. City of Bessemer, 269 Ala. 180, 112 So.2d 344 (1959), City of Mobile v. Madison, 40 Ala.App. 713, 122 So.2d 540 (1960). Thus, we follow the Ninth Circuit interpretation of relevant case law to conclude that Birmingham Ordinance 77-257, as amended, is invalid because the ordinance contravenes Code 1975, § 41-16-50 (Supp.1980), without constitutional justification.