AGO 1956 No. 279 - May 28 1956
SCHOOL DISTRICTS ‑- PURCHASE OF SUPPLIES ‑- NECESSITY OF ADVERTISING FOR BIDS ‑- SPECIFICATIONS
A first class school district calling for bids for supplies in the sum of $1000 or more may not specify an item by brand name with a "no substitution" provision.
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May 28, 1956
Honorable Pearl A. Wanamaker
Superintendent of Public Instruction
Old Capitol Building
Olympia, Washington Cite as: AGO 55-57 No. 279
Attention: Mr. G. W. Van Horn
Dear Mrs. Wanamaker:
You have requested our opinion on whether or not it is legal for a school district when calling for bids for supplies to specify an item by brand name with a "no substitution" provision when:
(1) the item is handled by only one distributor supplying the area; and
(2) the item is handled by two or more distributors supplying the area.
It is our opinion that with respect to first class school districts such a call for bids is illegal, and with respect to second and third class districts, while not specifically proscribed by statute, that it is a practice which should be discouraged.
RCW 28.62.170 provides as follows:
[[Orig. Op. Page 2]]
"When, in the opinion of the board, the cost of any furniture, supplies, building, improvements, or repairs will equal or exceed the sum of one thousand dollars, the board shall give due notice by publication, in at least one legal newspaper published within the district, in three regular consecutive weekly issues, of the intention to receive bids therefor; and the board shall determine the specifications for such bids which shall be public: Provided, That the board may, without giving such notice, make improvements or repairs to the property of the district through their shop and repair department."
This law has been in effect since 1909 with no significant change except raising the amount from $200 to $1,000 and adding the proviso. As we pointed out in an opinion to the prosecuting attorney of Walla Walla County on June 11, 1936, the statute is only applicable to school districts of the first class. There is no corresponding law pertaining to second and third class districts.
InCriswell v. Directors School District No. 24, 34 Wash. 420, the court observed at page 429:
"While this statute does not require the contract for such supplies, buildings, or repairs to be let to the lowest bidder, yet it is the evident purpose to require a notice and an opportunity for competitive bidding, so that the contract may be let to the best advantage of the municipality. * * *"
The rule is stated in 10 McQuillin on Municipal Corporations (3rd Ed.), § 29.30 as follows:
"The requirement of competitive bidding in the letting of municipal contracts is uniformly construed as mandatory and jurisdictional and nonobservance will render the contract void and unenforceable. * * *"
See, also Dillon on Municipal Corporations (5th Ed.) § 807.
[[Orig. Op. Page 3]]
InRandolph McNutt v. Eckert, N.Y., 177 N.E. 386, the court, after observing that if the board of education had violated the statute by awarding a contract for school furniture in excess of $1,000 without advertising for bids, the contract would be illegal, stated at page 387:
"If it had accomplished the same result by indirection, that is, had so fixed or manipulated the specifications as to shut out competitive bidding or permit unfair advantage or favoritism, the contract likewise would be illegal."
It seems clear that when a school district calls for bids on an item specified by brand name with a "no substitution" provision that it is thwarting the purpose and intent of the competitive bid statute. Where there is only one distributor of the product supplying the area the school district would be in a less favorable bargaining position than if the call for bids were omitted. In effect, the district is advising the lone supplier that his is the only product being considered.
To specify by brand name strikes us as both unnecessary and undesirable. It deprives the district of the possibility of contracting for the purchase of merchandise of equal or better quality at a more favorable price.
If however, with respect to a particular item, it is deemed impractical to define the specifications, we urge that the "no substitution" provision be eliminated. A more acceptable call for bids would be "x brand, or merchandise of like quality."
To demonstrate the legislative will on the general subject of public contracts, we direct your attention to RCW 9.18.120 through 9.18.140 which provide that suppression of competitive bidding carries the penalty of gross misdemeanor. While we do not suggest that school directors may be charged under these criminal statutes, it does show that the legislature is more than casually concerned with the judicious expenditure of public funds.
As we pointed out in our previous opinion, the law does not require second and third class school districts to purchase supplies by letting contracts pursuant to notice of competitive bids. There is nothing which would prevent them from so doing. We can think of no more effective method for school directors to demonstrate to the electors that they are discharging their duties in a manner calculated to provide the district with the most prudent investment of their tax dollars.
[[Orig. Op. Page 4]]
We conclude that school districts of the first class who advertise for bids for supplies in excess of $1,000 by specifying a brand name with a "no substitution" provision are proceeding contrary to public policy. We reach this result irrespective of whether or not there is more than one supplier handling the brand in the area.
While second and third class school districts need not advertise for bids at all, the practice is desirable. If they purchase supplies in this manner the conclusions expressed above would have equal application to them.
We hope the foregoing analysis will prove helpful.
Very truly yours,
ANDY G. ENGEBRETSEN
Assistant Attorney General