AGO 1987 No. 16 - May 7 1987
TRANSPORTATION DEPARTMENT ‑- COMPETITIVE BIDDING ‑- UNFAIR COMPETITION ‑- AUTHORITY TO REQUIRE CONCRETE PRODUCTS BE MANUFACTURED IN UNITED STATES
The Department of Transportation does not have the statutory authority to require precast/prestressed concrete products to be manufactured in the United States for the purpose of protecting local industries from unfair competition by foreign manufacturers.
- - - - - - - - - - - - -
May 7, 1987
Honorable George W. Walk
Chair, House Transportation Committee
House Office Building
Olympia, Washington 98504
Cite as: AGO 1987 No. 16
Dear Representative Walk:
By letter recently acknowledged, you requested our opinion on the following question:
Assuming federal law does permit such restrictions by the State of Washington, does the Department of Transportation have the authority to require precast/prestressed concrete products to be manufactured in the United States for the purpose of protecting local industries from unfair competition by foreign manufacturers?
We answer your question in the negative for the reasons set forth in our analysis.1/
[[Orig. Op. Page 2]] ANALYSIS
The Department of Transportation is a creature of statute, possessing such powers and authority as have been vested in it by the Legislature. State ex rel. Puget Sound Nav. Co. v. Department of Transp., 33 Wn.2d 448, 476, 206 P.2d 456 (1949). The Department is without inherent or common law powers, and may exercise only those powers conferred upon it either expressly or by necessary implication. See State v. Pierce, 11 Wn. App. 577, 581, 523 P.2d 1201 (1974).
The general powers and authority of the Department are contained in chapters 47.01 and 47.04 RCW. The Department is authorized to exercise "all the powers and perform all the duties necessary, convenient, or incidental" to the planning, location, design, construction, improvement, repair, operation, and maintenance of State highways, including bridges and other structures. RCW 47.01.260. The Department also is authorized to act for the State and to enter into agreements with the Federal Government to secure aid for highway construction, and to adapt its procedures as may be necessary to conform with federal funding requirements. RCW 47.04.060, 47.04.070.
In chapter 47.28 RCW, the Legislature has specified the procedure to be followed by the Department for highway construction work. The Department must conduct such work using State forces (Department personnel) or private contractors. RCW 47.28.030. Contracts for highway construction projects must be let by competitive bids except when delay of performance would jeopardize life or property or inconvenience the public. RCW 47.28.030, [[Orig. Op. Page 3]] 47.28.050.2/
The Department also is required to purchase materials and equipment by competitive bids "insofar as practicable." RCW 43.19.1906.3/
The Department does not have express or implied authority under chapters 47.01, 47.04, or 47.28 RCW to restrict the use of foreign manufactured precast/prestressed concrete in its highway projects for protection of local industry. By necessary implication, the Department is authorized by RCW 47.04.070 to comply with the Surface Transportation Assistance Act of 1982,4/ which, as a condition to receiving federal highway funding, generally prohibits the purchase of foreign steel products with federal highway funds.5/
However, that federal act does not impose [[Orig. Op. Page 4]] additional restrictions on the use of imported products; it provides only that the Secretary of Transportation is not to penalize States that impose "more stringent" foreign import restrictions. Pub. L. No. 97-424, § 165(d). Thus, the Department is not authorized by RCW 47.04.070 to impose additional restrictions against the use of foreign products because such additional restrictions are not required to comply with the Surface Transportation Assistance Act.
Administrative action by the Department to restrict the use of foreign manufactured cement products also would be in conflict with the competitive bidding requirements placed upon the Department by RCW 47.28.030, 47.28.050, 47.28.090 and 43.19.1906.6/
Those statutes require the Department to let highway construction contracts and purchase materials based upon competitive bids, except when impracticable or when life or property is jeopardized.7/
A restriction by the [[Orig. Op. Page 5]] Department against the use of the foreign manufactured cement products for the purpose of protecting the economic interests of domestic manufacturers would fall outside those exceptions to the competitive bidding requirements.
The public policy in favor of competitive bidding in State government has been repeatedly acknowledged by the Washington Supreme Court. See, Savage v. State, 75 Wn.2d 618, 621, 453 P.2d 613 (1969); Miller v. State, 73 Wn.2d 790, 793, 440 P.2d 840 (1968). It is the function of the Legislature, not the judiciary or an administrative agency, to circumscribe competitive bidding. Manson Constr. & Eng'r Co. v. State, 24 Wn. App. 185, 190, 600 P.2d 643 (1979). There is no statutory authority authorizing the Department to restrict the use of foreign cement products in its highway construction projects as an exception to the competitive bidding requirements. It is our opinion that such a restriction would be invalid as being in conflict with State competitive bidding statutes. See,American Inst. for Imported Steel, Inc., v. County of Erie, 302 N.Y.S. 2d 61, 64 (1969); Texas Highway Comm'n. v. Texas Ass'n. of Steel Importers, Inc., 372 S.W.2d 525 (Tex. 1963).
It is entirely possible that the Department could restrict or regulate the use of particular foreign-made products based upon considerations of quality or cost of inspection. However, the Department is without authority under current law to restrict the use of foreign-made products purely to favor competing domestic products and, for the reasons discussed above, such a practice would be in conflict with the competitive bidding requirements of chapters 47.28 and 43.19 RCW. Thus we answer your question in the negative.
We trust that the foregoing will be of assistance to you.
Very truly yours,
KENNETH O. EIKENBERRY
GARY L. IKEDA
Assistant Attorney General
*** FOOTNOTES ***
1/You have asked us to assume that the State may enact a restriction against such foreign manufactured concrete products based upon section 165 of the Surface Transportation Assistance Act of 1982, Pub. L. No. 97-424, 96 Stat. 2097, 2136-37 (1983), amended by Act of March 9, 1984, Pub. L. No. 98-229, § 10, 98 Stat. 55, 57 (1984). Subsection (a) of section 165 provides that the Secretary of Transportation shall not obligate funds for federal transportation projects (including federally funded State highway projects) unless "steel and manufactured products used in such project[s] are produced in the United States." Subsection (d) of that section provides that the Secretary of Transportation shall not impose any limitation or condition on federal highway assistance restricting any State from imposing "more stringent requirements than this section on the use of articles, materials, and supplies mined, produced, or manufactured in foreign countries . . ." Whether Congress has delegated to the States its authority under the commerce clause, U.S. Const. art. 1, § 8, cl. 3, to regulate this aspect of foreign commerce is an open question and is not addressed by this opinion.
2/RCW 47.28.030 provides that highway construction work may be done by State forces for projects with a cost of less than $50,000 when a delay would jeopardize a State highway or constitute a danger to the traveling public. RCW 47.28.030 also provides that to enable a larger number of small businesses and minority and women contractors to effectively compete for highway contracts, the Department may adopt rules establishing simplified procedures for the bidding and awarding of contracts with an estimated cost not to exceed $50,000.
3/Pursuant to RCW 43.19.190(4), the Department of General Administration has delegated to the Department of Transportation a limited authority to purchase goods and materials, including materials used in highway construction work by its own personnel. RCW 43.19.1906 provides that the Department's delegated authority to make such purchases is subject to the competitive bidding requirements of that statute.
4/Pub. L. No. 97-424, § 165(a), 96 Stat. 2097, 2136-37 (1983), amended by Act of March 9, 1984, Pub. L. No. 98-229, § 10, 98 Stat. 55, 57 (1984).
5/As originally enacted, section 165(a) of the Surface Transportation Assistance Act generally prohibited the Secretary of Transportation from expending federal highway funds for any project "unless steel, cement, and manufactured products used in such project are produced in the United States." In 1984, Congress amended section 165(a) by striking out the word "cement." Act of March 9, 1984, Pub. L. No. 98-229, § 10, 98 Stat. 55, 57 (1984). However, section 165(b) of the act provides that subsection (a) shall not apply where the Secretary of Transportation finds that its application would be inconsistent with the public interest, that such materials and products are not produced in the United States in sufficient quantities and of a satisfactory quality, or that inclusion of domestic materials will substantially increase the cost of the overall project contract. Federal regulations implementing section 165 impose the restrictions of subsection (a) only on steel materials used in federally funded highway projects. Buy American Requirements, 23 C.F.R. § 635.410 (1986).
6/RCW 47.28.050 is the general competitive bidding statute for the Department requiring a call for bids for the construction of a highway except as provided under RCW 47.28.030.
7/RCW 47.28.030(1) requires the Department to let highway construction contracts, under rules adopted under that section, based upon competitive bidding "to the extent that competitive sources are available except when delay of performance would jeopardize life or property or inconvenience the traveling public." RCW 43.19.1906 requires the Department to purchase materials and equipment based upon competitive bids, to the extent practicable, except for "[e]mergency purchases made pursuant to RCW 43.19.200 if the sealed bidding procedure would prevent or hinder the emergency from being met appropriately."