Airport Construction & Materials, Inc. v. Bivens

31 Cont. Cas. Fed. 71,467, 649 S.W.2d 830, 279 Ark. 161, 1983 Ark. LEXIS 1379
CourtSupreme Court of Arkansas
DecidedMay 2, 1983
Docket83-78
StatusPublished
Cited by8 cases

This text of 31 Cont. Cas. Fed. 71,467 (Airport Construction & Materials, Inc. v. Bivens) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Airport Construction & Materials, Inc. v. Bivens, 31 Cont. Cas. Fed. 71,467, 649 S.W.2d 830, 279 Ark. 161, 1983 Ark. LEXIS 1379 (Ark. 1983).

Opinion

Steele Hays, Justice.

On September 5, 1978, Airport Construction and Materials, Inc. entered into a contract with the United States for the repair of streets at the Little Rock Air Force Base. On April 11,1979, ACM subcontracted with Bivens for part of the work. A dispute arose as to the amount ACM was to pay Bivens, and this suit was brought by Bivens against ACM and its bonding company, National Bonding and Accident Insurance Company.

ACM defended on the ground that Bivens was not a licensed contractor under Ark. Stat. Ann. § 71-701 1 and therefore under § 71-713 2 Bivens was not permitted to bring any action in law or equity to enforce a contract entered into in violation of § 71-701. ACM also disputes the amount awarded Bivens. National Bonding made a motion to dismiss the complaint, on the grounds that the state court was without jurisdiction, that under the Miller Act (40 U.S.C. § 270a-270e), the suit must be brought in federal court. The motion was denied. The trial court found § 71-701 and § 71-713 inapplicable to the case and awarded $19,479.25 to Bivens. ACM and National Bonding have appealed.

I

ACM argues that the trial court erred in refusing to dismiss the case for appellee Bivens’ failure to comply with the licensing statute which would preclude him from bringing suit under § 71-713. Bivens relies on Leslie Miller Inc. v. State of Arkansas, 352 U.S. 187 (1956). In that case the U.S. contracted with Miller for construction work on an Air Force base in Arkansas. Miller was not licensed under § 71-701 and the state filed an information accusing him of violating § 71-713, which makes such an activity a misdemeanor. Miller was found guilty, this court affirmed, 225 Ark. 285, 281 S.W.2d 946 (1955), and the U.S. Supreme Court reversed. ACM’s basic contention is that while that case involved a contractor in a direct relationship with the federal government, the contract here is a private matter and the federal government is only coincidentally involved. ACM points out that the subcontract was made seven months after its contract with the U.S. and consequently the prime contract was in no way influenced by ACM’s subcontract with Bivens.

A reading of Miller, however, supports the trial court’s finding that the statutes in question are inapplicable to this case, and the stated rationale of that case would extend to the subcontractor here. This is not simply a private contract with the federal government coincidentally involved. The Miller court reviewed and compared federal and state requirements for licensing contractors and found conflict with the action each would take to ensure reliability of persons and companies contracting with the federal government. “Subjecting a federal contractor to the Arkansas contractor license requirements would give the state’s licensing board a virtual power of review over the federal determination of [the best candidate] and would thus frustrate the expressed federal policy of selecting the lowest responsible bidder.” Miller at 258.

Amplification of this policy makes it clear that were even the subcontractor subject to state regulations, the federal policy would be frustrated. Miller goes on to quote from Johnson v. State of Maryland, 254 U.S. 51, 41 S.Ct. 16 (1920):

“It seems to us that the immunity of the instruments of the United States from state control in the performance of their duties extends to a requirement that they desist from performance until they satisfy a state officer upon examination that they are competent for a necessary part of them and pay a fee for permission to go on. Such a requirement does not merely touch the Government servants remotely by a general rule of conduct; it lays hold of them in their specific attempt to obey orders and requires qualifications in addition to those that the Government has pronounced sufficient. Miller at 259.

As Miller points out, when the government determines whom it will choose as the “responsible bidder” (pursuant to the Armed Services Procurement Act) a number of factors are considered. “[I]t involves an evaluation of the bidder’s experience, facilities, technical organization, reputation, financial resources and other factors.” The Court notes that the Armed Services Procurement Regulations defining a responsible contractor include:

(c) Has the necessary experience, organization, and technical qualifications and has or can acquire the necessary facilities (including probable subcontractor arrangements) to perform the proposed contract. 32 CFR § 2-406-3, Miller at 258. (our emphasis)

The government has chosen a specific bidder because it has determined that bidder can adequately fulfill the above stated requirements, including the choice of a competent subcontractor. Whether the federal government had relied specifically on a certain subcontractor, does not change the reasons for the policy. Were a government contract subject to interruption because of varying state requirements, when the federal government has already determined that the contractor has the capability to fulfill its requirements and control the project to its satisfaction, the supremacy policy would be largely undermined.

ACM also notes that the State of Arkansas has a legitimate interest in the standards of [bidder] responsibility, but such a point is without merit where the contract, as here, is made by the federal government, for work to be performed on federal property for federal use.

II

National Bonding argues that the trial court erred in its refusal to dismiss the complaint as to National for lack of jurisdiction. The bond furnished by National was a Miller Act Bond (required for specified federal construction projects under 40 U.S.C. § 270a-270e), which National argues gives federal courts exclusive jurisdiction. The requirement of a performance bond and payment bond is found in 40 U.S.C. § 270a. Section 270b (b) dictates the proper U.S. District Court in which any suit on a Miller Act Bond must be brought. Bivens argues that § 270b (b) is only a venue statute, and such a suit may be brought in state court as well as federal. We agree that this section indicates venue, but only in the context of venue within the federal system. It appears well settled that federal jurisdiction is exclusive on any Miller Bond suit. See 40 U.S.C. § 270b, n.7; 100 ALR 2d 456.

Bivens argues further that his suit was not based on the Miller Act, but rather on National’s liability under its payment bond under state law.

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Bluebook (online)
31 Cont. Cas. Fed. 71,467, 649 S.W.2d 830, 279 Ark. 161, 1983 Ark. LEXIS 1379, Counsel Stack Legal Research, https://law.counselstack.com/opinion/airport-construction-materials-inc-v-bivens-ark-1983.