Silver Bow Construction v. State, Department of Administration, Division of General Services , 330 P.3d 922 ( 2014 )

Notice: This opinion is subject to correction before publication in the P ACIFIC R EPORTER .
Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,
303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email
corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
SILVER BOW CONSTRUCTION, )
) Supreme Court No. S-15087
Appellant, )
) Superior Court No. 1JU-11-01010 CI
v. )
) OPINION
STATE OF ALASKA, )
DEPARTMENT OF ) No. 6928 – July 25, 2014
ADMINISTRATION, DIVISION )
OF GENERAL SERVICES, )
)
Appellee. )
)
Appeal from the Superior Court of the State of Alaska, First
Judicial District, Juneau, Louis J. Menendez, Judge.
Appearances: Jack B. McGee, Law Office of Jack B.
McGee, Juneau, for Appellant. Jessica M. Alloway,
Assistant Attorney General, Anchorage, and Michael C.
Geraghty, Attorney General, Juneau, for Appellee.
Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, and
Bolger, Justices.
BOLGER, Justice.
I. INTRODUCTION
The Department of Administration, Division of General Services (Division)
accepted a 15-page response to a request for proposals for renovations to the Governor’s
House. The request stated that responses should not exceed 10 pages. Silver Bow
Construction, a competing bidder, argues that this variance from the request obligated
the Division to reject the 15-page response. Because the Division reasonably concluded
that this variance did not give the 15-page response any substantial advantage, we affirm
the superior court’s decision to uphold the Division’s decision to accept this response.
II. FACTS AND PROCEEDINGS
In November 2010 the Division issued a request for proposals to perform
exterior renovations to the Governor’s House in Juneau. The request imposed specific
submission requirements and guidelines. Paragraph 8 of the request included the
instructions relevant to this appeal, and required the companies to
[a]ttach criteria Responses (EXCEPT PRICE PROPOSAL)
to the Contractor’s Technical Proposal (Section 00313). The
maximum number of attached pages (each printed side equals
one page) for criteria Responses shall not exceed: 10 pages.[1]
Paragraph 8 warned that “Criteria Responses which exceed the maximum page limit or
otherwise do not meet requirements stated herein, may result in disqualification.”
Four companies submitted proposals: Alaska Commercial Contractors,
Inc., Silver Bow Construction Co., North Pacific Erectors, and JKM General Contractors
LLC. Alaska Commercial submitted a 15-page proposal, JKM submitted an 11-page
proposal, Silver Bow submitted a 10-page proposal, and North Pacific submitted a 7­
page proposal.
The procurement officer for the Division accepted and reviewed all four
proposals. The procurement officer concluded that Alaska Commercial’s proposal did
not contain more substance than the others, that it was not in the State’s best interest to
“needlessly reduce competition” by disqualifying acceptable proposals “strictly on
form,” and that all four proposals had technical deficiencies. When the Division
1
Emphasis in original.
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subsequently performed a word count, it found that Silver Bow’s proposal had 6,226
words, while Alaska Commercial’s proposal had 5,773 words.2
A six-person evaluation committee then reviewed the proposals on four
technical criteria (Project Understanding and Methodology, Management Plan for the
Project, Experience and Qualifications, and Schedule) and two price criteria (Alaska
Offeror Preference and Price Proposal). Each committee member rated Alaska
Commercial’s as the best proposal in each technical criterion, and their combined scores
also rated that proposal as the best overall under the technical criteria.
After this round of independent scoring and some group discussion, the
committee members again independently re-scored the proposals. Alaska Commercial’s
proposal still scored the highest overall under the technical criteria, receiving 1,960
points out of 2,100. In comparison, North Pacific received 1,025 points, Silver Bow
received 995, and JKM received 800. The Division awarded the contract to Alaska
Commercial.
Silver Bow filed a protest under AS 36.30.560, arguing that Alaska
Commercial’s 15-page proposal was nonresponsive and should be disqualified. The
Division denied Silver Bow’s protest, explaining that the page count was a matter of
form.
Silver Bow appealed the denial of its protest to the Commissioner of the
Department of Administration, and the case was referred to the Office of Administrative
Hearings. An administrative law judge denied Silver Bow’s appeal, noting that Silver
Bow’s proposal contained more words than Alaska Commercial’s, that Alaska
Commercial’s additional pages were based on larger font size and margins, and that the
2
JKM’s proposal had 5,606 words and North Pacific’s proposal had 3,411
words.
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greater number of pages had no effect on the evaluation. The judge rejected Silver
Bow’s contention that the greater number of pages in Alaska Commercial’s proposal
made it a more persuasive or effective document. The judge also rejected Silver Bow’s
similar argument that the length of Alaska Commercial’s proposal explained the higher
ratings.
Silver Bow appealed the administrative decision to the superior court. The
superior court found that the Division did not abuse its discretion, and the court rejected
Silver Bow’s claim that the Division’s decision violated equal protection. Silver Bow
now appeals to this court.
III. STANDARD OF REVIEW
“When the superior court acts as an intermediate court of appeal in an
administrative matter, we independently review the merits of the agency’s decision.”3
“When an agency interprets and applies its own regulations, we review its determination
to ensure it is not arbitrary, unreasonable, or an abuse of discretion.”4 In particular, we
“review an agency’s determination of responsiveness under the reasonable basis
standard.”5 We substitute our judgment for that of the agency when interpreting the
Alaska Constitution.6
3
Powercorp Alaska, LLC v. State, Alaska Indus. Dev. & Exp. Auth., 171 P.3d
159, 163 (Alaska 2007) (citing Williams v. Abood, 53 P.3d 134, 139 (Alaska 2002)).
4
Id. (citing J.L. Hodges v. Alaska Constructors, Inc., 957 P.2d 957, 960
(Alaska 1998)).
5
Laidlaw Transit, Inc. v. Anchorage Sch. Dist., 118 P.3d 1018, 1032 (Alaska
2005) (citing Gunderson v. Univ. of Alaska, Fairbanks, 922 P.2d 229, 233 (Alaska
1996); State, Dep’t of Admin. v. Bowers Office Prods., 621 P.2d 11, 13 (Alaska 1980);
Kelly v. Zamarello, 486 P.2d 906, 917 (Alaska 1971)).
6
Koyukuk River Basin Moose Co-Mgmt. Team v. Bd. of Game, 76 P.3d 383,
(continued...)
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IV. DISCUSSION
A. The Division Did Not Abuse Its Discretion When It Concluded That
Alaska Commercial’s Proposal Was Responsive.
Alaska Statute 36.30.250(a) provides that
[t]he procurement officer shall award a contract under
competitive sealed proposals to the responsible and
responsive offeror whose proposal is determined in writing
to be the most advantageous to the state taking into
consideration price and the evaluation factors set out in the
request for proposals.
A bid or proposal is considered nonresponsive if it “does not conform in all material
respects to the solicitation.”7 A variance is “material if it gives one bidder a substantial
advantage over other bidders and thereby restricts or stifles competition.”8
Silver Bow argues that Alaska Commercial’s bid did not conform to the
request for proposals because the bid exceeded the 10-page limit, giving it a substantial
advantage. Silver Bow contends that one bidder has a substantial advantage over another
bidder if the other bidder could have made a “better proposal” if it had been granted the
same variance — in this case, extra pages in the proposal. According to Silver Bow,
Alaska Commercial gained “a substantial advantage” that the other offerors did not have
because Alaska Commercial used extra pages in its bid.
6
(...continued)
386 (Alaska 2003) (citing Native Vill. of Elim v. State, 990 P.2d 1, 5 (Alaska 1999)).
7
2 Alaska Administrative Code (AAC) 12.990(a)(9) (2013); Laidlaw
Transit, 118 P.3d at 1032.
8
Laidlaw Transit, 118 P.3d at 1032 (internal quotation marks omitted)
(citing McBirney & Assocs. v. State, 753 P.2d 1132, 1136 (Alaska 1988)).
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Silver Bow relies on Toyo Menka Kaisha, Ltd. v. United States (Toyo).9
In that case, the solicitation required bidders to purchase surplus rice from the United
States government “as is.”10 Toyo’s bid was nonresponsive because it required the
government to guarantee that the rice was fit for human consumption, a warranty that the
solicitation had specifically disclaimed.11
Unlike Toyo, Silver Bow does not argue that Alaska Commercial inserted
terms that changed the substantive requirements of the request for proposals. Rather,
Silver Bow argues that the extra pages allowed Alaska Commercial to submit a better
proposal. But the word count revealed that the most content was actually submitted by
Silver Bow. In other words, the page limit did not put Silver Bow at any substantial
disadvantage. Under these circumstances, the Division could reasonably conclude that
the variance in the number of pages was not material.
Silver Bow also argues that Alaska Commercial’s proposal should have
been rejected because the request for proposals cautioned that proposals that did not
adhere to the page limit could be disqualified. But Paragraph 8 of the request states:
“Responses which exceed the maximum page limit or otherwise do not meet
requirements stated herein, may result in disqualification.”12 The use of the word “may”
indicates that the Division had the discretion to decide whether a failure to comply with
this requirement could be a basis for disqualification.13 As noted above, when the
9
597 F.2d 1371 (Ct. Cl. 1979).
10
Id. at 1374.
11
Id. at 1378.
12
Emphasis added.
13
See State, Dep’t of Transp. & Pub. Facilities v. Sanders, 944 P.2d 453, 457
(continued...)
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Division exercised this discretion, it had a reasonable basis to conclude that Alaska
Commercial’s proposal was responsive.
B. The Division Did Not Violate Silver Bow’s Right To Equal Protection.
Article I, section 1 of the Alaska Constitution provides in part “that all
persons are equal and entitled to equal rights, opportunities, and protection under the
law[.]” A threshold question in an equal protection challenge “is whether similarly
situated groups are being treated differently.”14 So “[w]here there is no unequal
treatment, there can be no violation of the right to equal protection of law. In the absence
of any evidence of disparate treatment, there is no basis for an equal protection claim.”15
Silver Bow argues that the Division treated Silver Bow differently when it
accepted Alaska Commercial’s 15-page proposal. But each bidder had some deficiency
in its proposal — such as excess pages or unqualified subcontractors — which could
have been grounds for disqualification. The Division considered all of these deficiencies
and reasonably decided to accept all of the proposals.
The Division treated Silver Bow’s proposal the same as Alaska
Commercial’s proposal; in both cases the Division reasonably decided to accept a
deficient proposal. The superior court properly concluded that there was no equal
protection violation because the record lacks any evidence of disparate treatment.
13
(...continued)
(Alaska 1997).
14
Black v. Municipality of Anchorage, Bd. of Equalization, 187 P.3d 1096,
1102 (Alaska 2008) (citations omitted); State v. Schmidt, 323 P.3d 647, 660 (Alaska
2014).
15
Black, 187 P.3d at 1102 (alteration in original) (quoting Matanuska–Susitna
Borough Sch. Dist. v. State, 931 P.2d 391, 397 (Alaska 1997)) (internal quotation marks
omitted); Schmidt, 323 P.3d at 660.
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V. CONCLUSION
We AFFIRM the superior court’s decision upholding the decision of the
Department of Administration.
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