Community Services Project, Inc. v. Bawac Cleaning Services, Inc.

226 S.W.3d 852, 2007 Ky. App. LEXIS 162, 2007 WL 1519006
CourtCourt of Appeals of Kentucky
DecidedMay 25, 2007
DocketNos. 2005-CA-002320-MR, 2005-CA-002545-MR
StatusPublished

This text of 226 S.W.3d 852 (Community Services Project, Inc. v. Bawac Cleaning Services, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Community Services Project, Inc. v. Bawac Cleaning Services, Inc., 226 S.W.3d 852, 2007 Ky. App. LEXIS 162, 2007 WL 1519006 (Ky. Ct. App. 2007).

Opinion

OPINION

VANMETER, Judge.

KRS 45A.470 expresses a policy that in procuring commodities and services, governmental bodies are to give preference to certain agencies serving disabled persons. The Boone Circuit Court held that the Commonwealth of Kentucky, Finance and Administration Cabinet (Cabinet), in applying the requirements of the statute, failed to conduct negotiations with the qualified nonprofit agencies bidding on a contract for janitorial and maintenance services. It ordered the Cabinet to resoli-cit bids for the contract. We hold that such negotiations were not required under the facts presented, and we therefore reverse.

In July 2004, the Cabinet issued a solicitation to bid for a contract to perform facilities and grounds maintenance as well as janitorial operations at the northbound and southbound rest areas along 1-75 in [854]*854Boone County. The solicitation included a preference for organizations providing services to persons with disabilities, similar to that expressed in KRS 45A.470(1).2 Within the following month, the Cabinet received four bids. Two bids were from “for-profit” companies, AMA Services and Walter A. Smith. Two bids were from qualified, nonprofit organizations that employ individuals with disabilities: Community Services Project, Inc. (CSP), and BA-WAC Cleaning Services, Inc. (BAWAC), which had provided the services for some eleven years preceding. AMA Services submitted the lowest bid, $769,106.10, and was assigned 97.5 “best value points” based on its contract bid price, months in business, and number of similarly-sized contracts. CSP submitted the next-lowest bid, $849,000.95, and was assigned 88.53 best value points. Walter A. Smith bid $1,021,270, and was assigned 77.78 best value points. BAWAC submitted the highest bid, $1,192,000, and was correspondingly assigned the lowest number of best value points, 63.32.

Based on the preference for awarding contracts to organizations which provide services to persons with disabilities, the Cabinet awarded the contract to CSP. BA-WAC filed a timely protest with the Cabinet, based on the failure of the Cabinet to “conduct negotiations with the parties to determine which shall be awarded the contract” as required by KRS 45A.470(5). The Cabinet denied the protest and BA-WAC filed a declaration of rights action in the Boone Circuit Court.

The Cabinet and CSP contested venue, and argued that the Cabinet had properly awarded the contract. The trial court denied motions to dismiss based on lack of venue and, on the merits, granted BA-WAC’s motion for summary judgment that the Cabinet had improperly awarded the contract. In doing so, the trial court agreed with the Cabinet and CSP that generally KRS 45A.470 does not apply to competitive bidding, as authorized by KRS 45A.080. However, it ruled that once the Cabinet invoked the dictates of KRS 45A.470(1) to award the contract to an agency providing services to persons with disabilities, it was then required to follow the requirements of the entire statute, including the negotiation requirements of KRS 45A.470(5), before awarding the contract. The trial court ordered the Cabinet to “reissue its bids,” which we understand to mean that the Cabinet should restart the process of soliciting bids for the contract. This appeal and cross-appeal followed.

The Cabinet and CSP argue that the trial court erred in ruling that the Cabinet failed to conduct negotiations as required by statute. The Cabinet additionally argues that venue was improper. BAWAC cross-appeals the trial court’s ruling that KRS 45A.470 does not apply to competitive bids.

The first issue for resolution is that of venue. The parties agree that venue is determined by KRS 452.405, which states in part that “actions shall be brought in the county where the cause of action, or some part thereof, arose ... [ajgainst a public officer for an act done by him in virtue or under color of his office, or for a neglect of official duty.” The Cabinet argues that all its actions in soliciting, evaluating and awarding the contract occurred in Franklin County, and that venue therefore is situated in that county.

[855]*855If we were deciding this as a matter of first impression, we might be inclined to agree with the Cabinet. However, in Fischer v. State Bd. of Elections, 847 S.W.2d 718, 721 (Ky.1993), abrogated on other grounds, Hoskins v. Maricle, 150 S.W.3d 1 (Ky.2004), the Kentucky Supreme Court held that a challenge to the constitutionality of a statute could be brought in the county in which the plaintiff resided, since that was the county in which the plaintiff was harmed. The court noted that those actions of state government which occur in Franklin County “may not affect or ‘injure’ any person. Appreciable harm arises only when the [action] directly affects the individual by denying him a right or imposing upon him an obligation.” 847 S.W.2d at 721. In this case, while the Cabinet took actions in Franklin County, any harm to BAWAC, i.e., the alleged failure of the Cabinet to follow statutory requirements, occurred at BAWAC’s principal place of business in Boone County. Thus, Boone County was a proper venue for the action.

As to the merits of this appeal, purchases of goods and services by state agencies are governed by the Kentucky Model Procurement Code, as set out in KRS Chapter 45A. A review of that chapter, however, reveals that it is divided into distinct subparts which were enacted at different times. For example, the main portion of the chapter, KRS 45A.005 to 45A.290, governs purchases made by the Finance and Administration Cabinet. Another portion, KRS 45A.343 to 45A.460, governs the parameters of a local public agency’s ability to enact a local procurement act. Interspersed throughout the chapter are sections which promote other policies approved by the General Assembly. For example, KRS 45A.500 to 45A.540 sets forth a preference for using products containing recycled materials. The sections implicated in the Cabinet’s solicitations for bids here, KRS 45A.465

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Related

Hoskins v. Maricle
150 S.W.3d 1 (Kentucky Supreme Court, 2004)
Fischer v. State Board of Elections
847 S.W.2d 718 (Kentucky Supreme Court, 1993)
Head v. Commonwealth
177 S.W. 731 (Court of Appeals of Kentucky, 1915)

Cite This Page — Counsel Stack

Bluebook (online)
226 S.W.3d 852, 2007 Ky. App. LEXIS 162, 2007 WL 1519006, Counsel Stack Legal Research, https://law.counselstack.com/opinion/community-services-project-inc-v-bawac-cleaning-services-inc-kyctapp-2007.