Court Opinion

ID: 9791602
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:14:26.230313+00
Date Added: 2024-06-11T07:37:37.155699
License: Public Domain

*3OPINION
By the Court,
Rose, C. J.:

FACTS

In March, 1989, the University of Nevada, Las Vegas, (UNLV) formed a design committee to develop a design and plans for an architectural school building (the building) to be constructed at UNLV. Respondent Ray Lucchesi (Lucchesi) was a member of the design committee and a faculty member of the UNLV School of Architecture. The design committee held approximately thirty meetings over a two-year period to discuss the design aspects of the building. Lucchesi attended at least thirteen of these meetings. Many of the design requirements for the building were developed at these meetings. Marnell Corrao, Inc., who was a participant on the committee through one of its principals, Tony Marnell, produced several prospective designs for the building.
Thereafter, the design committee, UNLV representatives, and the State Public Works Board (SPWB) decided to sponsor a design competition for the building. The competition required several architectural firms to submit designs and build scale models in response to the design requirements the committee had developed. A “blind jury” would then judge these entries and would submit its recommendation to the SPWB for a final decision.
In July, 1991, the design committee announced the competition to the public and several architectural firms responded. A committee made up of SPWB staff then selected four firms to compete against each other for the opportunity to design the new building. Two of the four firms selected on this “short list” were JMA/ Lucchesi (JMAL), a joint venture which respondents Lucchesi and Steven Carr (Carr) had formed in June of 1991, and appellant Barton Myers/S wisher Hall (BMSH). At all times relevant to this appeal, Lucchesi and Carr were practicing architects and members of the faculty of UNLV’s School of Architecture.
Following the final vote which resulted in four votes for BMSH and four votes for JMAL, the SPWB awarded the design contract for the building to JMAL. On November 12, 1991, Robert Ferrari, the SPWB Secretary-Manager, wrote a letter to Dr. Robert Maxson, President of UNLV, informing Dr. Maxson that he would recommend that the SPWB select JMAL to design the *4building. The letter was distributed to all members of the SPWB prior to the November 18, 1991, meeting at which the SPWB awarded the design contract for the building to JMAL.
Lucchesi, Assemblyman James W. McGaughey, and BMSH all separately requested an opinion from the Nevada Commission on Ethics (the Commission) regarding Lucchesi and Carr’s participation in the design competition and their ability to contract with UNLV to design the building. On August 7, 1992, the Commission issued Opinion 91-12 finding, inter alia, that Lucchesi could not enter into a contract with UNLV to design the building because of NRS 281.481(3), which prevents public employees from bidding on a contract with the State if they have participated in preparing the designs or specifications for that contract.
On September 11, 1992, JMAL, Lucchesi, and Carr filed a petition for judicial review in the district court. On July 12, 1993, the district court issued a decision and order reversing the Commission’s opinion on the grounds that JMAL had not submitted a “bid” within the meaning of NRS 281.481(3) and that the ethics statutes were directory and not mandatory. Both the Commission and BMSH appealed the district court’s decision.

DISCUSSION

The district court reversed the Commission’s opinion because it found that the Commission erred in applying NRS 281.481(3) to Lucchesi and Carr because the district court concluded that design proposals are not “bids” within the meaning of NRS 281.481(3) and are therefore not covered by the statute. The district court further found that the Nevada Ethics in Government Law was “expressly directory and permissive at all material times herein.” The Commission and BMSH contend that the district court failed to accord proper deference to the Commission’s findings that the design proposals at issue were “bids” within the meaning of NRS 281.481(3) and that the Nevada Ethics in Government Law was mandatory at all times relevant to this appeal. The construction of a statute is a question of law. Therefore, independent appellate review of an administrative ruling, rather than a more deferential standard of review, is appropriate. Maxwell v. SIIS, 109 Nev. 327, 329, 849 P.2d 267, 269 (1993); Nyberg v. Nev. Indus. Comm’n, 100 Nev. 322, 324, 683 P.2d 3, 4 (1984).

Whether the district court gave proper deference to the Commission’s interpretation of NRS 281.481(3)

The Nevada Ethics in Government Law (NRS 281.411-*5281.581) outlines ethical standards to govern the conduct of government employees and officers. It also established the Nevada Commission on Ethics. NRS 281.455. The mandate of the Nevada Commission on Ethics is to “render an opinion interpreting the statutory ethical standards and apply the standards to a given set of facts and circumstances.” NRS 281.511(1). In the instant matter, the Commission held four days of hearings and admitted almost 500 pages of evidence. The Commission deliberated over this voluminous record at three meetings over the course of three months and finally issued an opinion spanning some fifteen single-spaced pages. To say that the Commission considered this matter at length would be an understatement.
NRS 281.481(3) is part of the Nevada Ethics in Government Law and states, in pertinent part:
Unless specifically prohibited by law, a public officer or employee, as such, is not precluded from making a bid on a government contract if the contracting process is controlled by rules of open competitive bidding, the sources of supply are limited, he [or she] has not taken part in developing the contract plans or specifications and he [or she] will not be personally involved in opening, considering or accepting offers.
(Emphasis added.)
Applying this statute to the facts in the case at bar, the Commission found that the “sources of supply” were not limited because numerous architects responded to the design competition. The Commission further found that Lucchesi and Carr were not involved in considering the offers. Most importantly, the Commission found that Lucchesi had “taken part in developing the contract plans or specifications” for the building. Based upon these findings, the Commission concluded that JMAL had gained an unfair advantage over the other competitors in the design competition. Neither party challenged these findings in the district court. Rather JMAL argued, and the district court agreed, that NRS 281.481(3) did not apply to the conduct of Lucchesi and Carr because they submitted “design proposals” and not “bids” as expressly stated in the statute.
BMSH and the Commission assert that the district court failed to accord proper deference to the Commission’s interpretation of NRS 281.481(3). We agree. In State v. State Engineer, 104 Nev. 709, 766 P.2d 263 (1988), this court stated that “‘[a]n agency charged with the duty of administering an act is impliedly clothed with power to construe it as a necessary precedent to administra*6tive action’ and that ‘great deference should be given to the agency’s interpretation when it is within the language of the statute.’” Id. at 713, 766 P.2d at 266 (quoting Clark County School Dist. v. Local Gov’t, 90 Nev. 442, 446, 530 P.2d 114, 117 (1974)). Furthermore, the Commission’s power to construe the Nevada Ethics in Government Law is explicit in the statute rather than implicit. NRS 281.511(1). Accordingly, although this court may conduct a de novo review of the Commission’s construction of the Nevada Ethics in Government Law, the district court was obligated to give deference to the construction afforded by the Commission. We conclude that the district court erred in failing to do so.

Whether the “designproposals” at issue were “bids” within the meaning of NRS 281.481(3)

The district court found that NRS 281.481(3) can only be applied to public employees who make a “bid” on a government contract. The definition of “bid” urged upon this court, and apparently accepted by the district court below, is that the term bid only applies to offers to contract based on a specified price. JMAL relies primarily upon NRS Chapters 332, 333, and 338 to support this interpretation. The cited sections govern purchasing by state and local governments. JMAL points specifically to NRS 333.330(1) which states that “[a]ll bids on more than one item on which bids are called for by the same notice shall be itemized and give a price for each item.” (Emphasis added.) JMAL argues from this that “the term ‘bid’ is a term of art and has a specific meaning when used by our Legislature.” JMAL also relies upon the testimony of two SPWB employees who testified that the design competition was not a bidding process.
In response, BMSH argues that “the key element in a ‘bid’ is not price, but a competitive offer to contract.” To support its position, BMSH properly notes that this court should construe the term in light of the intention of the Legislature. In McKay v. Bd. of Supervisors, 102 Nev. 644, 650-51, 730 P.2d 438, 443 (1986), this court stated that:
The leading rule of statutory construction is to ascertain the intent of the legislature in enacting the statute. This intent will prevail over the literal sense of the words. The meaning of the v/ords used may be determined by examining the context and the spirit of the law or the causes which induced the legislature to enact it. The entire subject matter and policy may be involved as an interpretive aid.
(Citations omitted.)
*7The public policy rationale behind the Nevada Ethics in Government Law is set forth in NRS 281.421(1) which states:
It is hereby declared to be the public policy of this state that:
(a) A public office is a public trust and shall be held for the sole benefit of the people.
(b) A public officer or employee must commit himself [or herself] to avoid conflicts between his [or her] private interests and those of the general public whom he [or she] serves.
We are not persuaded by JMAL’s arguments as the stated policy of the Legislature, to prevent conflicts of interest, militates towards a more expansive reading of the term “bid” than the one which JMAL urges upon this court. A logical reading of the statutes involved reflects a legislative intent to prevent public employees from entering into any contract which would present a conflict between the employee’s private interests and “those of the general public whom he [or she] serves,” not just those contracts involving offers based on price. Further, the Legislature has modified the definition of a bid as it pertains to architects. See NRS 625.530(3); NAC 623.800.
There is additional support in the case law and legal treatises for this position. One such treatise states, for example, that “[a] bid is an offer submitted in response to an invitation for bids.” 1B T. Toughey & B. McBride, Bender’s Government Contracts § 101.10[5] (1984). This suggests that it is not the element of price which is crucial, but the element of competition amongst offers. Similarly, one court noted that “[a] bid is no more than an offer to contract.” A.A.B. Electric, Inc. v. Stevenson Public School Distr., 491 P.2d 684, 686 (Wash.Ct.App. 1971). More importantly, this court has noted that “[t]he purpose of bidding is to secure competition, save public funds, and to guard against favoritism, improvidence and corruption.” Gulf Oil Corp. v. Clark County, 94 Nev. 116, 118, 575 P.2d 1332, 1333 (1978). In light of the stated policy of the Legislature, the district court erred in concluding that design proposals were not “bids” within the meaning of NRS 281.481(3).

Whether NRS 281.481 (3) excludes architects as persons “specifically prohibited by law” from bidding on State contracts

A second argument asserted by JMAL which found support in the court below is that NRS 281.481(3) cannot be applied to architects because architects are specifically prohibited from bidding on government contracts. NRS 281.481(3) states that it applies to any public officer or employee “[u]nless [they are] *8specifically prohibited by law . . . from making a bid on a government contract.” NRS 332.115 states that government contracts for professional services are “by their nature . . . not adapted to award by competitive bidding.” Therefore, JMAL argue that they are exempted from NRS 281.481(3) because architects are “specifically prohibited by law” from bidding on public projects.
JMAL seeks further support from NRS 625.530(3) and NAC 623.800. As previously noted, NRS 625.530(3) provides that the selection of an architect for a public project must be “made on the basis of the competence and qualifications of the . . . architect for the type of services to be performed, and not on the basis of competitive fees.” Once the architect is selected, the architect and the agency must come to an “agreement upon a fair and reasonable fee.” Id. NAC 623.800 contains a similar provision; it prevents an architect from submitting information “which would enable the public agency to evaluate the proposal on any basis other than the competence and qualifications of the registrant.” These provisions, argue JMAL, show that architects may not bid on government projects and that therefore the bidding requirements of NRS 281.481(3) are inapplicable to them.
BMSH argues in rebuttal that these provisions only prevent architects from competing for government projects based on price or fees and not on the best design. Since “price was never a factor considered in the design competition,” BMSH contends that neither provision was violated. BMSH also points to a recent amendment to NRS 281.481 which was passed on July 1, 1993. It reads, in relevant part, as follows:
A full- or part-time faculty member in the University of Nevada System may bid on or enter into a contract with a governmental agency if he [or she] has not taken part in developing the contract plans and specifications and he [or she] will not be personally involved in opening, considering or accepting oifers.
1993 Nev. Stat., ch. 536, § 1(3) at 2241 (emphasis added). BMSH does not argue that this amendment ought to be retroactively applied. Rather, they argue that the amendment evinces a legislative intent to counter the “semantic acrobatics” which JMAL urged upon the district court. We are persuaded that NRS 625.530 and NAC 623.800 are intended to prevent public agencies from awarding contracts for architectural services to the lowest bidder. Where a public facility is involved, public safety requires that factors such as expertise and experience take precedence over cost.1 While architects may compete for government *9projects, they may not do so on the basis of price. Therefore, JMAL would not be “specifically prohibited by law” so as to escape the purview of NRS 281.481(3), unless they submitted bids based on price.
Finally, it is worth noting that the Commission considered these very arguments at length and concluded that “[t]hese statutory and regulatory provisions enjoin architects in Nevada from being awarded a contract with the state based on a lowest price competitive bid. It does not prevent the state from selecting an architect based on other competitive criteria.”
We conclude that NRS 281.481(3) does not exclude architects as persons “specifically prohibited by law” from bidding on state contracts unless the submitted bids were based on price.

Whether the district court erred in reversing the Commission’s finding that the Nevada Ethics in Government Law was mandatory at the time of Lucchesi and Carr’s conduct

The second major finding of the district court was that the Nevada Ethics in Government Law was “expressly directory and permissive at all material times herein.” Appellants challenge this finding asserting that the amended version of NRS 281.481 is mandatory and was in effect when the prohibited acts occurred.
An examination of the language of the 1987 statute compared with the language of the new version of NRS 281.481 which took effect on October 1, 1991, shows a clear legislative intent to make the amended statute mandatory. The 1987 version of the statute contained the following preamble entitled “[e]ffect of code of ethical standards upon criminal law.” “NRS 281.481 to 281.541, inclusive, are intended to be directory and preventive rather than punitive.” NRS 281.551. The amended version now empowers the Commission to impose civil penalties for violation of the Nevada Ethics in Government Law. NRS 281.551 (as amended 1991). Further support for this interpretation is found in other recept amendments to the Nevada Ethics in Government Law. For example, the earlier version of NRS 281.481. began as follows: “A code of ethical standards is hereby established as a guide for the conduct of public officers and employees.” (Emphasis added.) The statute now provides that “[a] code of ethical standards is hereby established to govern the conduct of public officers and employees.” (Emphasis added.) Similarly, each of the subsections which previously began “[n]o public officer or employee may” was amended to read “[a] public officer or employee shall not. ” (Emphasis added.) It is a well-settled principle of statutory construction that statutes using the word “may” are generally directory and permissive in nature, while those that *10employ the term “shall” are presumptively mandatory. See State v. American Bankers Insurance Company, 106 Nev. 880, 882, 802 P.2d 1276, 1278 (1990); Sengbusch v. Fuller, 103 Nev. 580, 582, 747 P.2d 240, 241 (1987). We conclude that the obvious and substantive changes outlined above indicate that the amended version of the statute is clearly mandatory in nature.
Additionally, we are persuaded that JMAL’s “prohibited acts” took place after the amended version of NRS 281.481 was in force. Specifically, although JMAL’s “misconduct” began before the amendments — Lucchesi being on the design committee, deciding to enter the design competition, and forming a joint venture for that purpose one month before the competition was publicly announced — JMAL also committed prohibited acts after October 1, 1991, when the Nevada Ethics in Government Law became mandatory. JMAL submitted its design on November 1, 1991, and the competition was not judged until November 7-8, 1991; therefore, the actual competition did not take place until that time. Although JMAL may have obtained an unfair advantage prior to NRS 281.481 becoming mandatory, it is the use of that advantage, rather than the act of obtaining it, that is forbidden. JMAL clearly used its unfair advantage after the statute became mandatory. We conclude that the submission of the entry combined with the judging process is sufficient post-amendment conduct to sustain the Commission’s decision.
We note that the Commission found that both SPWB and the University of Nevada System told Lucchesi that they were not aware of any problems with JMAL’s entry into the contest. Two witnesses testified that they were unaware that Lucchesi was a full-time faculty member when they gave their permission for him to enter the design competition. We are persuaded that Lucchesi’s error was innocent and made in good faith, and we agree with the findings of the Commission in that regard. However, this guiltlessness does not negate the fact that JMAL committed prohibited acts after October 1, 1991, when the Nevada Ethics in Government Law became mandatory. Public confidence in the integrity of the government contracts bidding process should be maintained at all costs, even at the expense of those whose errors are inadvertent. Innocence cannot deflect the appearance of impropriety. Furthermore, the fact remains that JMAL and Lucchesi obtained an advantage over their fellow competitors by virtue of Lucchesi’s position as a public employee.

CONCLUSION

We conclude that the district court erred in reversing the *11opinion of the Nevada Commission on Ethics for the following reasons: (1) the district court failed to give proper deference to the Commission’s opinion in construing and applying the Nevada Ethics in Government Law; (2) NRS 281.481(3) applies to the design proposal submitted by JMAL; and (3) the Nevada Ethics in Government Law was mandatory when Lucchesi and Carr submitted their design proposal.
Accordingly, we reverse the decision of the district court and reinstate the opinion of the Nevada Commission on Ethics.
Young and Shearing, JJ., concur.

 For example, NRS 625.530(3) provides in relevant part that “selection . . . must be made on the basis of . . . competence and qualifications.”