Opinion
Review Granted Feb. 18, 1998.
Previously published at 59 Cal.App.4th 1503
Sheppard, Mullin, Richter & Hampton, Douglas R. Hart, Los Angeles and Carole M. Ross, San Diego, for Plaintiff and Appellant.
Morgan, Lewis & Bockius, Andrew C. Peterson, Los Angeles, for Defendant and Respondent.
WOODS, Associate Justice.
Appellant sought a writ of mandate to require respondent to eliminate a term from its bid specifications requiring successful bidders and their subcontractors to agree to be bound by a Project Labor Agreement (PLA). The trial court denied the petition and entered judgment for respondent. We affirm.
FACTUAL BACKGROUND
The trial court's statement of decision usefully recounts the procedural and factual background of the case. We restate much of it.
The Metropolitan Water District (MWD or respondent) builds and maintains water supply systems. Currently, it provides approximately 60 percent of the water for the over 16 million people residing in Southern California. The Eastside Reservoir Project (Project) is a multi-billion dollar expansion of water storage capacity for the market served by the MWD.
The PLA is a collective bargaining agreement between SCA (a joint venture of Parsons Constructors Inc. and the Harza Corporation), the Construction Manager for the MWD, and the labor unions representing construction workers in the local area. The PLA provides, inter alia, dispute resolution procedures for labor-management and/or employee management disputes which could arise on the Project (which at its peak is expected to employ more than 1,500 workers and is anticipated to last more than five years), and provides an Alternate Dispute Resolution (ADR) system to handle workers' compensation claims and managed care for workers' compensation injury and illnesses made possible by section 3201.5 of the California Labor Code.
The PLA permits all otherwise qualified contractors to bid for work on the project, requiring only that they agree to be bound and work under the PLA while on the Project. Successful bidders are not required to work under a collective bargaining agreement at any other location. Contractors are eligible to employ their own core workforce as a percentage of their work force on the Project, and consistent with Federal law, no employee is obligated to become a union member. Additional employees must be requested through the signatory unions' hiring halls, which by law, must be non-disciminatory and permit non-union members to register for referral.
The PLA concept was initially considered by MWD's staff in 1993, some six to eight months prior to the commencement of construction. It was viewed as a vehicle to avoid labor disruption or disharmony on the site during the lengthy construction program; assure the supply of qualified employees; assure the supply and opportunity for apprentices and training programs; provide the legal basis for the institution of a Project-wide workers compensation ADR program; and, generally, to increase the potential for MWD requested its Project Contractor and consultant on labor relations matters, ARB Macco, Incorporated (ARB), to consider the value of a PLA for this Project. ARB concurred with the staff's conclusions and was authorized by MWD to negotiate a PLA for possible inclusion as part of the bid specification. ARB negotiated the agreement and submitted it to MWD with its recommendation that it be applied to the Project. MWD's Board considered the appropriateness of the PLA to the Project and approved its utilization as a bid specification. The obligation to become bound by the PLA became part of the general specifications for the Project and such specifications have been in place since September 15, 1994.
Associated Builders and Contractors, Inc. (ABC or appellant) is a trade association whose members are non-union and who prefer not to work under collective bargaining agreements. It objects to the inclusion of the PLA in the bid specifications, asserting that (1) it violates the statutory requirement that the MWD award a bid to the lowest "responsible" bidder, (2) it violates the competitive bid statute, (3) it infringes on its members constitutional right of free association, (4) it denies ABC members the equal protection of the laws, and (5) it violates several provisions of the California Labor Code.
On October 28, 1996, ABC petitioned the trial court for a writ of mandate to stay the opening of a construction bid for work to be performed on the Project and to eliminate a term of its bid specifications requiring successful bidders and their subcontractors to agree to be bound by the PLA. The trial court denied a stay and issued an order to show cause.
The hearing was held on November 27, 1996. The parties agreed that there were four matters to be decided by the Court: (1) the motion of the MWD to strike on evidentiary grounds portions of the petition and declarations submitted by the ABC, (2) the motion of the ABC to strike on evidentiary grounds the declarations of the MWD, (3) MWD's demurrer to the petition, and (4) the merits of ABC's petition for writ of mandate.
The court denied the motions to strike, and overruled MWD's demurrer to the petition. The demurrer having been overruled, the court gave MWD an opportunity to file an answer prior to a ruling on the petition for a writ of mandate.
All declarations and exhibits were admitted into evidence. Thereafter the trial court denied the petition and entered judgment for respondent, MWD.
This appeal followed.
DISCUSSION
Appellant principally contends the PLA requirement violates California and federal law by breaching the requirement that a contract shall be let "to the lowest responsible bidder." (Pub. Contracts Code, § 21565. ) The trial court found no violation or breach. Appellant claims error by the trial court. We find none and affirm the judgment.
The section reads: "Whenever any work is not to be done by the district itself by force account, and the amount involved shall be twenty-five thousand dollars ($25,000) or more, the board shall provide for the letting of contracts to the lowest responsible bidder, after publication of notices inviting bids, but subject to the right of the board to reject any and all proposals."
An award of a competitively bid contract is within the sound discretion of the contracting authority. (Rubino v. Lolli (1970) 10 Cal.App.3d 1059, 1062, 89 Cal.Rptr. 320.) The public entity's decision will only be overturned where the evidence shows that the entity's actions "were arbitrary, capricious, entirely lacking in evidentiary support, or inconsistent with proper procedure." (Ghilotti Construction Co. v. City of Richmond (1996) 45 Cal.App.4th 897, 903, 53 Cal.Rptr.2d 389.) To prevail, appellant must establish that MWD acted arbitrarily or capriciously or that its decision totally lacked any evidentiary support.
Appellant argues that by including the PLA in its bid specifications, MWD violated the California requirement that MWD award its construction contracts to the lowest responsible bidder. Appellant claims the PLA It is undisputed that MWD is required to award its contract to the "lowest responsible bidder." (Pub. Contract Code, § 21565.) However, "lowest responsible bidder" does not mean "lowest cost bidder."
In Domar Electric, Inc. v. City of Los Angeles (1994) 9 Cal.4th 161, 176, 36 Cal.Rptr.2d 521, 885 P.2d 934, a disqualified bidder argued that its failure to comply with a Los Angeles City subcontractor outreach program should not have precluded its bid because the requirement conflicted with City Charter provisions requiring contracts be awarded to the "lowest and best regular responsible bidder." The outreach program required that bidders take reasonable steps to ensure that minority business enterprises and women business enterprises had an equal opportunity to compete for city contracts.
The Supreme Court held that "ordinarily" a requirement that a bid be let to the "lowest responsible bidder" means the bidder who submits the lowest monetary bid and is qualified to do the job. (Id. at p. 178, 36 Cal.Rptr.2d 521, 885 P.2d 934.) However, the court acknowledged that there are situations where a public entity may impose additional requirements on a successful bidder. (Ibid.)
That a successful bidder is required to adhere to the PLA is such an additional requirement. ABC identifies no statutory prohibition for its adoption. Rather it equates the PLA with the pre-bid requirement that bidders have collective bargaining agreements with specified unions, found unlawful in Neal Publishing Co. v. Rolph (1915) 169 Cal. 190, 146 P. 659. However, the instant PLA poses none of the evils found invalid in Neal.
In Neal, the ability to qualify to bid was beyond individual control. Here, an unwillingness, if any, to bid by any ABC member is a case of self-imposed exclusion. More importantly, there is no provision in the PLA that places any qualification on potential bidders, and there is no practice or condition on the Project that does so. Any contractor who is willing to abide by its contractual terms is free to bid.
By October 28, 1996, when ABC filed its petition, 78 "non-union" contractors had bid on and been awarded work as prime or subcontractors. This constitutes 75 percent of all contractors working on the project.
Substantial evidence supports the trial court's finding that compliance with the PLA does not conflict with the statutory requirement that a contract shall be let "to the lowest responsible bidder." (Pub. Contracts Code, § 21565.)
As we have explained, the PLA does not exclude non-union bidders, does not impinge on a bidder's right to free association, and does not violate equal protection. Appellant's contentions to the contrary are without merit.
DISPOSITION
The judgment is affirmed. Costs on appeal are awarded to respondent.
LILLIE, P.J., and NEAL, J., concur.