Consulting Engineers & Land Surveyors of California v. Department of Transportation

Opinion

Article VII of California’s Constitution (hereafter Article VII) defines “civil service” as the workforce of state government hired and promoted “under a general system based on merit ascertained by competitive examination.” (Art. VII, § 1.) It applies to every officer and employee of state government, other than the positions listed in section 4 of Article VII.

Courts have held, with certain exceptions, that Article VII impliedly forbids the state from contracting for private companies to perform the kind of services that persons selected through the civil service system could perform “adequately and competently.” (State Compensation Ins. Fund. v. Riley (1937) 9 Cal.2d 126 , 135 [ 69 P.2d 985 ]; see also Professional Engineers v. Department of Transportation (1997) 15 Cal.4th 543 , 549-550. [ 63 Cal.Rptr.2d 467 , 936 P.2d 473 ]; California State Employees’ Assn. v. State of California (1988) 199 Cal.App.3d 840 , 844-846 [ 245 Cal.Rptr. 232 ].)

In response to one such holding, California voters adopted Proposition 35 in November 2000. Entitled the “Fair Competition and Taxpayer Savings Act,” Proposition 35 added Article XXII to the California Constitution (hereafter Article XXII) to provide that the State of California and all other governmental entities “shall be allowed to contract with qualified private entities for architectural and engineering services for all public works of improvement.” (Art. XXII, § 1.) To leave no doubt about it, Article XXII states that “[n]othing contained in Article VII of this Constitution shall be

The Legislature “cannot take action, whether by statute or MOU [memorandum of understanding], that contravenes a constitutional provision.” (Consulting Engineers & Land Surveyors of California, Inc. v. Professional Engineers in California Government (2007) 42 Cal.4th 578 , 588 [ 67 Cal.Rptr.3d 485 , 169 P.3d 903 ] (hereafter CELSOC v. PECG).)

The Constitution of the State of California unequivocally authorizes governmental entities to contract with qualified private entities for architectural and engineering services for all public works of improvement. This authorization extends to all phases of project development, including permitting and environmental studies, rights-of-way services, design phase services, and construction phase services. (Art. XXII, §§ 1, 2.)

Nevertheless, the Legislature enacted statutes compelling the use of civil service employees to perform such services for a public works project of the Los Angeles County Metropolitan Transportation Authority (the authority), i.e., the construction of a high-occupancy vehicle lane (the project) using a design-build process, in which both the design and construction of a project are performed by a single entity. This differs from the traditional design-bid-build process, in which the best qualified entity is selected to design the project, and competitive bids are taken from other entities for the performance of construction services. (Legis. Analyst, Design-Build: An Alternative Construction System (Feb. 3, 2005) pp. 3, 6.)

Section 20209.26 states in pertinent part: “Bidding for the project shall progress as follows: [][] (a)(1) The authority, with the approval of [Caltrans], shall prepare or cause to be prepared, a set of documents setting forth the scope of the project, as set forth in this subdivision, [f] (2) [Caltrans] shall prepare documents that may include, but need not be limited to, the size, type, and desired design character of the project, performance specifications covering the quality of materials, equipment, and workmanship, preliminary plans, and any other information deemed necessary to describe adequately the authority’s needs. The performance specifications and any plans, preliminary engineering, environmental documents, prebid services, and project reports shall be performed by employees of [Caltrans]. The preliminary engineering and project reports shall be performed by professional engineers employed by [Caltrans].”

Section 20209.32 states: “(a) A deviation from the performance criteria and standards established under subdivision (a) of Section 20209.26 may not be authorized except by written consent of the authority and [Caltrans]. [][] (b) The employees of [Caltrans] shall perform the construction inspection for

Section 20209.34 states: “Quality control inspection for the construction of the project utilizing the design-build approach authorized by this article shall be performed by employees of [Caltrans].”

PECG does not dispute CELSOC’s contention, and Caltrans’s concession, that to the extent those statutes require the use of Caltrans civil service employees to perform certain work on the authority’s project, they conflict with the constitutional directive that any governmental entity “shall be allowed to contract with qualified private entities for architectural and engineering services for all public works of improvement.” (Art. XXII, § 1.)

In PECG’s view, however, the conflict is permitted by Proposition 35 because it expressly authorizes the Legislature to use a different procurement method for design-build projects, like the one in this case.

PECG relies on Government Code section 4529.13 (added by initiative measure, Prop. 35, § 4, eff. Nov. 8, 2000), which states: “Nothing contained in this act shall be construed to change project design standards, seismic safety standards or project construction standards established by state, regional or local governmental entities. Nor shall any provision of this act be construed to prohibit or restrict the authority of the Legislature to statutorily provide different procurement methods for design-build projects or design-build-and-operate projects.” (Italics added.)

PECG reasons that because Senate Bill No. 1026 (2005-2006 Reg. Sess.) addresses a design-build project, the Legislature had the authority to use a different procurement method, which encompasses dictating that state employees be used for certain architectural and engineering services. This is a tortured interpretation of the statutory language.

When interpreting a voter initiative, courts give the words their ordinary meaning, viewed in light of the context of the overall statutory scheme and purpose. (Robert L. v. Superior Court (2003) 30 Cal.4th 894 , 900-901 [ 135 Cal.Rptr.2d 30 , 69 P.3d 951 ].) If the terms are unambiguous, we presume the voters meant what they said, and the plain meaning of the language governs. (Day v. City of Fontana (2001) 25 Cal.4th 268 , 272 [ 105 Cal.Rptr.2d 457 , 19 P.3d 1196 ].) “When the language is ambiguous, ‘we refer to other indicia of the voters’ intent, particularly the analyses and arguments contained in the official ballot pamphlet.’ [Citation.]” (People v. Rizo (2000) 22 Cal.4th 681 , 685 [ 94 Cal.Rptr.2d 375 , 996 P.2d 27 ].)

The intention of Proposition 35 to promote fair competition is codified in Government Code section 4529.12, which provides: “All architectural and engineering services shall be procured pursuant to a fair, competitive selection process which prohibits governmental agency employees from participating in the selection process when they have a financial or business relationship with any private entity seeking the contract, and the procedure shall require compliance with all laws regarding political contributions, conflicts of interest or unlawful activities.” ■

Immediately thereafter, Government Code section 4529.13 says that no provision of Proposition 35 shall “be construed to prohibit or restrict the authority of the Legislature to statutorily provide different procurement methods for design-build projects or design-build-and-operate projects.”

Government Code section 4529.13 does not state or suggest in any way that Proposition 35’s grant of freedom to contract with private architects and engineers in all phases of a project does not apply to design-build projects. Surely, such an expansive exclusion from the purpose of Proposition 35 would have been set forth plainly in the initiative if that had been its intention.

Government Code section 4529.13 merely says the Legislature is not limited in providing for “different procurement methods for design-build projects . . . .” As is evident from the preceding statute, Government Code section 4529.12, “procurement method” simply refers to the manner in which private architects and engineers are selected for public works projects. Accordingly, the electorate meant that the statutory directive to use a fair, competitive process is not intended to limit the Legislature’s ability to use whatever procurement method it deems necessary for design-build projects. For example, it would not be limited to, or precluded from, using a

Even the materials we judicially noticed at the request of PECG reflect that a “procurement method” refers to the method of selecting the private contractor responsible for the design and construction services. For example, PECG submitted the Design-Build Effectiveness Study prepared for the United States Department of Transportation—Federal Highway Administration (Jan. 2006). According to the study, the “predominant procurement method” for design-build projects completed in 2002 was the low-bid method. Other procurement methods included best value, multiparameter bidding, and alternative bids/designs. Contracting agencies that were most satisfied with using a design-build method of project delivery used a best-value procurement method, and agencies that were least satisfied used a low-bid procurement method. The report concluded that state statutes should be changed to permit use of the best-value procurement approach for design-build projects.

PECG argues that the challenged statutes may not be declared unconstitutional unless they clearly conflict with Proposition 35; if a statute is susceptible of two reasonable constructions, one of which is constitutional and one which is not, we must adopt the constitutional construction. According to PECG, sections 20209.26(a)(2), 20209.32(b), and 20209.34 are not unconstitutional because Government Code section 4529.13’s reference to “procurement method[]” may reasonably be interpreted as referring to the method of procuring the project (e.g., design-build, design-bid-build or some other method), not the method of procuring the design-build contract for the project (e.g., lowest bid, best qualified, or some other selection process). In PECG’s view, Government Code section 4529.13 provides that the Legislature is free to adopt alternative types of design-build projects in which one entity provides the majority of the design and construction services, but civil service employees prepare the reports and perform the inspections.

The plain language of Government Code section 4529.13 does not lend itself to PECG’s proposed interpretation, i.e., that nothing in Proposition 35 shall be construed as limiting the Legislature’s ability to devise or use a modified design-build process. It says only that the Legislature is not limited in providing for “different procurement methods for design-build” projects.

Interpreting Government Code section 4529.13 as PECG suggests would eviscerate the purpose of Proposition 35, which is to give government entities

The judgment is modified to invalidate as unconstitutional the second and third sentences of section 20209.26(a)(2), the first sentence of section 20209.32(b), and section 20209.34. As modified, the judgment is affirmed. This court’s prior order staying the trial court’s “order re plaintiffs’ motion for judgment on the pleadings” is vacated upon the finality of this opinion. PECO shall reimburse CELSOC for its costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)

Davis, J., and Cantil-Sakauye, J., concurred.

A petition for a rehearing was denied November 25, 2008.