San Diego Service Authority for Freeway Emergencies v. Superior Court

198 Cal. App. 3d 1466, 244 Cal. Rptr. 440, 1988 Cal. App. LEXIS 137

• Court: California Court of Appeal
• Decided: February 26, 1988
• Docket: D006719
• Status: Published

Opinions

Opinion

WIENER, Acting P. J.

San Diego Service Authority for Freeway Emergencies (San Diego SAFE) and Comarco Inc. (Comarco) seek a writ of mandate and/or prohibition after Cubic Inc. (Cubic) obtained a preliminary injunction and writ of mandate restraining implementation of a contract between San Diego SAFE and Comarco and requiring San Diego SAFE to engage in competitive bidding. At the direction of the Supreme Court we issued an alternative writ. We discharge the alternative writ and grant the petition.

Factual and Procedural Background

Section 2550 of the Streets and Highway Code¹ provides that a county and certain cities may by resolution establish a local Service Authority for Freeway Emergencies (service authority or SAFE). Pursuant to section 2550, San Diego County and the required cities established San Diego SAFE to implement an emergency call box system on San Diego County freeways. San Diego SAFE solicited bids for an emergency call box system (the project) and subsequently contracted with Comarco, purportedly the second lowest bidder. The project is to be financed by a lease/purchase agreement requiring payments from revenues generated by a special registration fee assessed, pursuant to Vehicle Code section 9250.10, on San Diego County vehicles.

San Diego SAFE filed a complaint for validation of the lease/purchase agreement and the source of payments. Cubic, purportedly the low bidder on the project, answered, petitioned for a writ of mandate, and cross-complained for injunctive relief. The court issued a writ of mandate commanding San Diego SAFE to apply competitive bidding to the call box contract, to award the contract to the lowest qualified bidder, and to set aside the Comarco Contract. The court also issued a preliminary injunction restraining San Diego SAFE from going forward with the awarded contract. These proceedings ensued.

Discussion

I

The sole issue in this case is whether San Diego SAFE is required to apply competitive bidding principles in awarding the Comarco contract for the emergency call box system.²

Cubic acknowledges that absent a statutory requirement, a public entity is not bound to engage in competitive bidding. (See e.g., Smith v. City of Riverside (1973) 34 Cal.App.3d 529, 535-536 [110 Cal.Rptr. 67]; County of Riverside v. Whitlock (1972) 22 Cal.App.3d 863, 877-878 [99 Cal.Rptr. 710]; 62 Ops. Cal. Atty. Gen. 643, 647 (1979).) Thus, to prevail Cubic must establish a legislative restraint on San Diego SAFE’S ability to contract. The statutory scheme providing for the establishment of service authorities, sections 2550 et seq. (enabling legislation), does not contain a specific statutory requirement that service authorities engage in competitive bidding in awarding contracts. Nevertheless, Cubic contends both statute and public policy indirectly require San Diego SAFE to do so.

II

We look first to whether public policy requires San Diego SAFE to engage in competitive bidding. Competitive bidding guards against favoritism, extravagance, fraud, and corruption; it serves the public by preventing waste and securing the best economic result. (See Graydon v. Pasadena Redevelopment Agency (1980) 104 Cal.App.3d 631, 636, [164 Cal.Rptr. 56] cert. den. (1980) 449 U.S. 983 [66 L.Ed.2d 246, 101 S.Ct. 400]; City of Inglewood-L.A. County Civic Center Auth. v. Superior Court (1972) 7 Cal.3d 861, 866-867 [103 Cal.Rptr. 689, 500 P.2d 601].) Notwithstanding the powerful purposes served by competitive bidding, there is no all-pervasive public policy that requires all public entities to engage in that practice. Rather, the Legislature imposes competitive bidding requirements on public entities within its purview when the Legislature determines it is in the public interest to do so.

The legislative determination to require competitive bidding necessarily requires the Legislature to evaluate an entity’s function and to examine the particular type of contract involved.

In at least two instances, the Legislature has exempted public agencies from competitive bidding requirements for the purchase of telecommunications equipment and systems. Under Public Utilities Code section 130238, county transportation commissions purchase specialized equipment, including telecommunications equipment, through competitive negotiations rather than competitive bidding. Likewise, Public Contract Code sections 12100 and 12102 excepts state agencies from competitive bidding requirements in purchasing electronic data processing and telecommunications goods and services. In these areas of specialized equipment and rapid technological changes, the Legislature has recognized that competitive bidding may not ultimately be cost effective or in the public interest. The enabling legislation’s failure to impose competitive bidding requirements on a SAFE’S contracting for emergency call box systems is thus consistent with the Legislature’s past treatment of contracts for the purchase and implementation of telecommunications equipment and systems.

Obviously, it is conceptually difficult to interpret the enabling legislation as requiring competitive bidding when the legislation does not so provide. Cubic, however, argues the Legislature’s failure to specifically exempt service authorities from competitive bidding requirements indicates a legislative intent to subject service authorities to such requirements. Cubic relies on Public Utilities Code section 130238 as an exdinple of a legislatively created exception to competitive bidding requirements. As we have discussed, section 130238 does except county transportation commissions from competitive bidding on certain contracts. However, Public Utilities Code section 130232 first imposes a general competitive bidding requirement. Here, where the enabling legislation does not impose a competitive bidding requirement, an exception would be meaningless.

Cubic directs us to Public Contract Code section 102 to argue public policy requires San Diego SAFE to engage in competitive bidding. Public Contract Code section 102 states that, to the maximum extent possible, California public contract law should be uniform “for similar work performed for similar agencies.” Section 102 represents a statement of the laudable goal that public contract law should be uniform to the extent possible; it does not impose any requirements on any agencies. In practice, there are numerous situations where similar agencies performing similar work are not subject to the same competitive bidding requirements. Even the same agency may be subjected to different requirements at different times. It is well established that charter cities and general law cities are not subject to the same competitive bidding requirements for similar projects. (See e.g., Smith v. City of Riverside, supra, 34 Cal.App.3d at p. 529; R & A Vending Services, Inc. v. City of Los Angeles (1985) 172 Cal.App.3d 1188 [218 Cal.Rptr. 667].) Irrigation districts are required to follow competitive bidding for construction projects only where the contract is financed by proceeds of the sale of bonds or a limited assessment. (See Pub. Contract Code, §§ 20561, 20566; Andrews v. Bd. of Dir. Modesto Irr. Dist. (1952) 113 Cal.App.2d 780 [248 P.2d 971].) Until 1987 public fire districts were not subject to any competitive bidding requirements. (See Pub. Contract Code, § 20810 et seq.) Transit districts have different monetary minimums on contracts before competitive bidding is required. (See e.g., Pub. Contract Code, § 20271 [San Diego County Transit District, $5,000]; § 20281 [Santa Barbara Metropolitan Transit District, $3,000 or $10,000 depending on the type of contract].)

Stressing the significance of California public policy as set forth in Public Contract Code section 102, Cubic argues that San Diego SAFE is required to engage in competitive bidding because the county and the cities that established the entity would be required to engage in competitive bidding if they individually let the contract. (See Pub. Contract Code, 20128 [counties], § 20162 [general law cities]; Charter of San Diego § 94).) Even if we were to accept Cubic’s argument on this point (i.e. that the whole is limited by the powers of the parts), Cubic overlooks the legal reality that San Diego SAFE is not simply an entity that the county and cities have established in order to carry out a public works project. It is a separate entity provided for by the Legislature pursuant to section 2550 et seq. As a separate entity, SAFE is not subject to statutory provisions requiring competitive bidding of San Diego County or the participating cities.³

Ill

Cubic also asserts we must require San Diego SAFE to engage in competitive bidding because SAFEs could finance the implementation and maintenance of an emergency call box system by issuing revenue bonds pursuant to either the Revenue Bond Law of 1941, Government Code section 54300 et seq., or the sewer bond provisions of the Health and Safety Code section 4950 et seq. (the bonding provisions). (§ 2555, subd. (a).) Both the Revenue Bond Law of 1941 and the sewer bond provisions contain competitive bidding provisions. (Gov. Code § 54516.2; Health & Saf. Code §§ 5010, 5015.)

It is Cubic’s position that because the revenue bond statutes require competitive bidding, competitive bidding must be required even where, as here, financing is accomplished solely through imposition of a vehicle registration fee pursuant to section 2553 and section 2554, subdivision (a). That is, competitive bidding must be required in all instances to encourage competitive efficiency and uniformity in public contracting. (See Pub. Contract Code, § 102.)

Cubic’s position overlooks two important considerations: 1) SAFEs may fail to issue revenue bonds thereby never giving rise to competitive bidding requirements in any instance, and 2) imposing competitive bidding requirements in all instances would require this court to find the Legislature intended to impose a competitive bidding requirement by implication.⁴

A court should not presume the Legislature intended to legislate by implication. (People v. Welch (1971) 20 Cal.App.3d 997, 1002 [98 Cal.Rptr. 113].) Although in years past it may have been necessary for courts to read into a statute provisions not specifically expressed by the Legislature, the modern rule of construction disfavors such practice. (See Educational & Recreational Services, Inc. v. Pasadena Unified Sch. Dist. (1977) 65 Cal.App.3d 775, 782 [135 Cal.Rptr. 594].)

The enabling legislation does not set forth any limitations on a service authority’s ability to contract. We must presume that if the Legislature had wanted to require competitive bidding in all instances it would have done so specifically. Cubic has failed to cite any example where the Legislature imposed a competitive bidding requirement by other than a specific statutory provision. We therefore conclude that where a service authority uses fees collected pursuant to Vehicle Code section 9250.10 as its sole source of financing a contract for an emergency call box system, no competitive bidding requirement is imposed either directly in the enabling legislation or indirectly through the revenue bond provisions.⁵

Disposition

The alternative writ is discharged. Let the writ issue directing the trial court to vacate the peremptory writ and the order that a writ of mandate and preliminary injunction issue and directing the trial court to enter a new and different order consistent with this opinion. San Diego SAFE and Comarco to recover cost for this proceeding.

Benke, J., concurred.

1 All statutory references are to the Streets and Highway Code unless otherwise specified.

2 Where, as here, the Supreme Court orders the Court of Appeal to issue an alternative writ, the procedural appropriateness of extraordinary relief is conclusively determined. (E.g., City of Oakland v. Superior Court (1983) 150 Cal.App.3d 267, 272 [197 Cal.Rptr. 729]; Mehr v. Superior Court (1983) 139 Cal.App.3d 1044, 1049 [189 Cal.Rptr. 138].) Further, the pendency of a direct appeal does not alter this determination. (City of Oakland v. Superior Court, supra; see also Lee v. Superior Court (1961) 196 Cal.App.2d 161, 164 [16 Cal.Rptr. 268].) We therefore reject Cubic’s argument the petition should be denied because there is an adequate legal remedy.

We requested letter briefs from the parties on the issue of mootness. After reviewing the submitted letters, we are satisfied the proceedings are not moot.

3 Inherent in our conclusion is our rejection of Cubic’s argument that City of Inglewood-L.A. County Civic Center Auth. v. Superior Court, supra, 1 Cal.3d 861, requires an agency created by local entities to comply with competitive bidding, even when creation of that agency is authorized by state statute. City of Inglewood addressed whether competitive bidding requirements normally imposed on a joint powers entity applied to a management contract. (Id. at p. 864.) Joint exercise of powers agreements by two or more public agencies are provided for under Government Code section 6500 et seq. Under Government Code section 6503, the joint powers agreement must set forth the power to be exercised and the manner in which the power will be exercised. Under Government Code section 6509 the joint “power is subject to the restrictions upon the manner of exercising the power of one of the contracting parties, which party shall be designated by the agreement.”

The joint powers agreement between the City of Inglewood and Los Angeles County provided that the powers of the joint power entity would be subject to the restrictions imposed upon the county in exercising its powers. (Id. at p. 864, fn. 2.) The court therefore used the competitive bidding requirements imposed on a county in discussing the competitive bidding requirements imposed upon the joint powers entity.

4 Solely for purposes of analysis, we assume a SAFE must engage in competitive bidding if it chooses to issue revenue bonds.

5 Cubic’s allegations of administrative bias and preselection are irrelevant to the issue before us. We therefore do not address them.