CONTRACTS FOR ARCHITECTURAL AND ENGINEERING SERVICES

STATE AGENCIES ‑- MUNICIPAL CORPORATIONS ‑- CONTRACTS FOR ARCHITECTURAL AND ENGINEERING SERVICES

 1. A public agency may not, in procuring architectural or engineering services, consider proposed price or cost in determining which firm is most highly qualified to provide services.

 2. When a public agency selects a firm to perform architectural or engineering services, price and cost may be considered only after the most qualified firm has been selected, at which time the law provides for negotiation of a "fair and reasonable" price. 

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                                                                February 18, 1988 

Honorable Gary Nelson
Honorable Lorraine Hine
Legislative Building
Olympia, Washington 98504 

Cite as:  AGO 1988 No. 4                                                                                                                  

 Dear Senator Nelson and Representative Hine:

             By letter previously acknowledged you requested our opinion concerning public agency procurement of architectural and engineering services under RCW 39.80 [chapter 39.80 RCW].  We paraphrase your questions as follows:

            1.         In procuring architectural and engineering services, may a public agency consider proposed price or cost of the services in determining which firm is most highly qualified to provide those services under RCW 39.80.040?

             2.         At what point in the selection process may price or cost be considered by a public agency in procuring architectural and engineering services under RCW 39.80 [chapter 39.80 RCW]?

             We answer question 1 in the negative and question 2 as set forth in our analysis.

              [[Orig. Op. Page 2] ]

                                                                     ANALYSIS

             Though it may seem odd at first impression, the State Legislature has adopted a statutory scheme by which public agencies are precluded from considering price when selecting architects and engineers, except for a final price negotiation after the most qualified architect or engineer has been selected.

             Chapter 39.80 RCW originated with the passage of Substitute House Bill 176 in 1981, enacted as Laws of 1981, ch. 61.  The Legislature's purpose was to establish a state policy that:

             governmental agencies publicly announce requirements for architectural and engineering services, and negotiate contracts for architectural and engineering services on the basis of demonstrated competence and qualification for the type of professional services required and at fair and reasonable prices.

 RCW 39.80.010.

             The chapter establishes a three‑step process for procuring such services: (1) publication of the agency's requirement for professional services, RCW 39.80.030; (2) selection of the firm deemed to be the most highly qualified to provide the required services based upon criteria established by the agency, RCW 39.80.040; and (3) negotiation of a contract with the most qualified firm at a price which the agency determines is fair and reasonable to the agency, RCW 39.80.050(1).  If negotiations with that firm fail, the agency determines the next most qualified firm and similarly negotiates, RCW 39.80.050(2).

             The term "qualified" is not defined in RCW 39.80 [chapter 39.80 RCW]; thus, we must give it its ordinary meaning.  Webster's Third New International Dictionary 1858 (1981) defines "qualified" as "fitted (as by endowments or accomplishments) for a given purpose: COMPETENT, FIT . . . ."

             Your first question is whether under RCW 39.80.040 price or cost may be one of the requirements or criteria that the agency may consider in determining the most highly qualified firm.  A thorough reading of the statute and an examination of its legislative history indicate that price is not a permissible criterion for choosing the most highly qualified firm.

              [[Orig. Op. Page 3] ]

             The three‑step process set forth by the statute provides for negotiation of price only after the agency has selected the most qualified firm.  If price were one of the criteria for selecting the most qualified firm, the language of RCW 39.80.050 regarding negotiation of price would be surplusage.

             This interpretation is consistent with the legislative history of the statute.  Extrinsic aids may be used to construe a statute even in the absence of ambiguous statutory language.  Garrison v. State Nursing Bd., 87 Wn.2d 195, 550 P.2d 7 (1976).  Documents from state legislative archives may be examined to glean evidence of legislative intent.  See, e.g.,Seattle Times Co. v. County of Benton, 99 Wn.2d 251, 661 P.2d 964 (1983);State v. Turner, 98 Wn.2d 731, 658 P.2d 658 (1983).

             Files from both the House and Senate State Government Committees contain documents reflecting that under Substitute House Bill 176 price would not be a factor in the initial selection of a qualified firm to provide architectural and engineering services.  Eq., Memorandum from D. Karras, Staff Analyst, Office of Program Research, to Members, House State Government Committee, February 18, 1981; Memorandum from B. Lynch, Legal Intern, Office of Program Research, to Members, House State Government Committee, February 18, 1981; Senate Committee on State Government, 47th Legislature,Committee Analysis of SHB 176 as Enacted (1981).  The bill passed out of the House Committee without amendment in that regard.  When the bill was considered in the Senate Committee, an amendment was proposed which would have reworded what was to become RCW 39.80.040, directing the agency to choose

             the most qualified firm for the project based on criteria established by the agency which may include:  professional competence for the type of services to be performed; technical merits of the offered services; financial capability of the applicant to perform the specified work;the cost, price, compensation, or consideration to be paid by the agency for such services; and the affirmative action/equal employment opportunity record of the consultant.

 Proposed Committee Amendment to SHB 176 by Senate Committee on State Government, 47th Legislature (1981) (emphasis added).  The committee rejected the amendment.  Thus, the legislative history indicates consideration and rejection of price as an initial consideration in selecting a firm to provide architectural and engineering services.

             [[Orig. Op. Page 4] ]

             RCW 39.80 [chapter 39.80 RCW] was modeled, in part, after 40 U.S.C. §§ 541-544, the Brooks Act.  The Brooks Act also contains the three‑step process of publication, selection of the "most highly qualified firm," and negotiation of the contract at a price deemed to be "fair and reasonable" to the agency.  No case involving the Brooks Act has specifically decided whether price or cost may be a factor considered by the agency in choosing the most qualified firm.1/

             However, inNational Soc'y of Professional Eng'rs v. United States, 435 U.S. 679, 55 L. Ed. 2d 637, 98 S. Ct. 1355 (1978), the Supreme Court compared the Brooks Act to the Engineers' Society Code of Ethics, which forbade competitive bidding among engineers.  The Society's traditional recommended method of engineer selection began with initial competition based on competence and experience.  Price negotiations were to take place only after selection of the most qualified firm.  The Court stated:  "Congress has decided not to require competitive bidding for Government purchases of engineering services.  The Brooks Act requires the Government to use a method of selecting engineers similar to the Society's 'traditional method.'" 435 U.S. 694 n. 21 (citation omitted).

             A previous opinion issued by this office reached the same conclusion.  It described the newly enacted RCW 39.80 [chapter 39.80 RCW] as follows:

             Simply stated, chapter 61, Laws of 1981  . . . does not establish a competitive bidding procedure for the letting of architectural and engineering service contracts by governmental agencies.  Rather, it provides for negotiated contracts  . . . after a preliminary determination as to the "most qualified" firm.  While there most certainly is a competitive aspect to the law in terms of how a particular architectural or engineering firm is determined to be "most qualified," the competition is at that preliminary level and not, as under competitive bidding, at the critical level of "offer" and "acceptance" in the context of formation of a particular contract.

 AGO 1981 No. 19, at 7.

              [[Orig. Op. Page 5] ]

             Thus, in answer to your second question, the point in the selection process at which price or cost may be considered by the public agency is after the selection of the most highly qualified firm, during the negotiations with that firm.  The agency may then contract for the services at a price which the agency determines is fair and reasonable to the agency.

             We trust the foregoing will be of assistance to you.

 Very truly yours,
KENNETH O. EIKENBERRY
Attorney General 

NANCY THYGESEN DAY
Assistant Attorney General