COLLEGES AND UNIVERSITIES--PUBLIC WORKS AND IMPROVEMENTS--CONTRACTS‑‑APPRENTICESHIPS‑‑Authority of a university to impose a bidding prequalification requirement that contractors must have an apprenticeship program
A prequalification requirement prohibits a contractor from bidding on a public works contract unless the requirement is satisfied. There is no statute that establishes a prequalification requirement that contractors must have an apprenticeship program. In absence of such a statute, a university does not have the authority to establish such a prequalification requirement.
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December 15, 1993
State Senator, District 4
105 Institutions Building, MS 40404
Olympia, WA 98504-0404
Cite as: AGO 1993 No. 19
Dear Senator McCaslin:
By letter previously acknowledged you requested our opinion on a question we paraphrase as follows:
Does an institution of higher education have the authority to require that contractors have an apprenticeship program as a prequalification requirement that the contractor must meet to be eligible to bid on a public works contract?
The answer to this question is no.
We begin by examining the authority of institutions of higher education and the statutes governing public works contracts. The governance of the state's institutions of higher education is vested in a board of regents, or board of trustees. RCW 28B.20.100 (University of Washington); RCW 28B.30.100 (Washington State University); RCW 28B.35.100 (regional universities); RCW 28B.40.100 (The Evergreen State College). The board of regents or trustees of a state university may exercise only those powers expressly granted, or those necessarily implied or incident to those powers expressly granted or essential to its declared objects and purposes. State ex rel. Holcomb v. Armstrong, 39 Wn.2d 860, 865, 239 P.2d 545 (1952).
The statutes governing the board of regents of the University of Washington and Washington State University grant them the power and duty "[t]o have full control of the university and its property of various kinds, except as otherwise provided by law." RCW 28B.20.130(1), 28B.30.150(1). Similar language exists for the regional universities and The Evergreen State College. RCW 28B.35.120(1); 28B.40.120(1). This express language constitutes a broad grant of power. SeeGood v. Associated Students of the Univ. of Washington, 86 Wn.2d 94, 97, 542 P.2d 762 (1975); AGO 59-60 No. 75.
With regard to public works contracts, there is strong public policy in this state that such contracts be awarded only after compliance with competitive bidding procedures, except as permitted by specific legislation. Manson Constr. & Eng'g Co. v. State, 24 Wn. App. 185, 190, 600 P.2d 643 (1979),review denied, 93 Wn.2d 1004 (1980). The purpose of competitive bidding is to prevent fraud, collusion, and favoritism in the administration of public contracts as well as to ensure that the state receives the best work or supplies at the most reasonable price. Edwards v. Renton, 67 Wn.2d 598, 602, 409 P.2d 153 (1965). Institutions of higher education are subject to the competitive bidding process. RCW 28B.10.350 provides that with certain limited exceptions,the public works contract of an institution of higher education "shall be awarded to the lowest responsible bidder if in accordance with the bid specifications".
In addition to requiring that public works contracts be let by competitive bid, the Legislature has set out requirements that apply to most public works contracts. For example, the state's agencies and political subdivisions are usually required to contract with registered or licensed contractors (RCW 39.06.010). Contractors must also post a bond (chapter 39.08 RCW); pay the prevailing rate of wage (RCW 39.12.020); and comply with the requirements established by the Office of Minority and Women's Business Enterprises (RCW 39.04.160; chapter 39.19 RCW).
Your question asks whether an institution of higher education can establish a prequalification requirement that contractors must have an apprenticeship program to be eligible to bid on a public works contract. The essence of a prequalification requirement is that contractors who do not meet the requirement cannot bid on the project. For example, RCW 47.28.070, which governs highway construction projects, requires all contractors interested in bidding to be prequalified by the Department of Transportation. Bidders must complete a questionnaire and financial statement citing financial ability and previous public work experience. The statute also sets forth certain criteria the bidder must meet before the bidder can receive a contract proposal form. Thus, if the contractor is not prequalified, the contractor is effectively precluded from bidding on a project.
In this case there is no statute similar to RCW 47.28.070 that establishes a prequalification requirement that contractors have an apprenticeship program. In the absence of such a statute, an institution of higher education does not have the authority to impose such a prequalification requirement. The Court of Appeals, Division II, spoke directly to this point in Manson Constr., supra. Manson involved an attempt by the Department of Transportation to establish prequalification requirements in addition to those set out in RCW 47.28.070. The court ruled that the department did not have the authority to add additional prequalification requirements. The court said:
We begin our analysis of this appeal by reasserting this jurisdiction's strong public policy that, except as permitted by legislation, public contracts shall be let only after competitive bidding procedures have been complied with. Prequalification standards, as authorized by RCW 47.28.070, tend to limit the extent of competitive bidding. It is the function of the legislature, not the judiciary or an administrative agency, to circumscribe competitive bidding. When, as in the case at bench, the legislature has already defined those limits, courts will be wary of interpreting the legislatively mandated standards so as to further circumscribe the competitive bidding policy. Accordingly, we are not inclined to view favorably an administrative agency's attempt to extend its authority by asserting prequalification standards in excess of those specifically provided by statute.
Manson Constr., 24 Wn. App. at 190 (emphasis added, citations omitted).
In this case there is no statutory authority for a prequalification requirement that contractors have an apprenticeship program. Despite the broad authority of the board of regents or trustees, an institution of higher education does not have the authority to impose such a requirement.
We recognize that RCW 28B.10.350 requires that a public works contract be awarded to the "lowest responsible bidder if in accordance with the bid specifications". This language allows an institution of higher education to reject the low bidder if the contractor is not responsible. This empowers the institution to inquire into the quality of the bid, e.g., the quality of the materials proposed.
In addition to questions of quality, the term "responsible" also allows an inquiry into the "social responsibility" of the contractor. Electrical Contractors v. Pierce Cy., 100 Wn.2d 109, 115, 667 P.2d 1092 (1983). For example, inElectrical Contractors, the court found that Pierce County had the authority to require a contractor to comply with the affirmative action goals adopted by the county.
The ability to inquire whether the contractor is responsible does not authorize a prequalification requirement. A prequalification requirement prohibits a contractor from bidding if the contractor does not meet the requirement. An inquiry into the responsibility of the contractor with the lowest bid only occurs after bids are received. Therefore, we conclude that an institution of higher education does not have the authority to establish a prequalification requirement that contractors have an apprenticeship program.
We trust the foregoing will be of assistance to you.
Very truly yours,
CHRISTINE O. GREGOIRE
MARY JO DIAZ
Assistant Attorney General
There are exemptions from the requirement of competitive bidding, such as, the existence of an emergency, projects costing less than a specified amount, and construction activities for which certain counties and state agencies are authorized to establish small works rosters. RCW 28B.10.355, 39.04.020, .150, .155.
Common elements often cited by courts as significant include quality of materials proposed, quality and quantity of equipment, ability, experience, reputation, judgment, capacity, pecuniary responsibility, past defaults, and present workload. R. L. Hawkins, Comment, Competitive Bidding--Public Construction Contracts in Washington, 39 Wash. L. Rev. 796, 805 (1964); see also RCW 43.19.1911.
In order to judge social responsibility, the agency or institution which is awarding the contract must have the authority to apply the criteria it is using to judge the "social responsibility" of the contractor. In general, it will be the Legislature that determines the public interest by which a contractor's social responsibility is to be judged. Thus, in Electrical Contractors, the legislative authority of Pierce County established affirmative action goals. Similarly, the Legislature requires that contractors comply with the requirements established by the Office of Minority and Women's Business Enterprises. RCW 39.04.160. In this case, the Legislature has not established an apprenticeship program as a social responsibility goal similar to the requirement for compliance with the requirements of the Office of Minority and Women's Business Enterprises. Although RCW 49.04.030(1) provides that the supervisor of apprenticeship shall "[e]ncourage and promote the making of apprenticeship agreements", the program is voluntary. RCW 49.04.070 provides: "The provisions of this chapter shall apply to a person, firm, corporation or craft only after such person, firm, corporation or craft has voluntarily elected to conform with its provisions." Based on this legislative declaration, we conclude that the Legislature did not intend to require as an element of social responsibility that public works contracts only be let to contractors with apprenticeship programs.