CITIES AND TOWNS ‑- OPTIONAL MUNICIPAL CODE ‑- CONTRACTS ‑- PUBLIC WORKS AND IMPROVEMENTS ‑- PURCHASES ‑- COMPETATIVE BIDS

CITIES AND TOWNS ‑- OPTIONAL MUNICIPAL CODE ‑- CONTRACTS ‑- PUBLIC WORKS AND IMPROVEMENTS ‑- PURCHASES ‑- COMPETATIVE BIDS

(1) A code city is not required to call for competitive bids when contracting for the purchase of supplies, materials and equipment which are not being procured in connection with a public work or improvement project.   

(2) A code city is required to call for competitive bids when contracting for the purchase of equipment which is being procured in connection with a public work or improvement having an estimated cost in excess of five thousand dollars.

(3) The provisions of chapter 56, Laws of 1975, 1st Ex. Sess., (now codified as RCW 35.22.620 ‑ 35.22.650) do not apply so as to permit a code city, when contracting for a public work or improvement, to refrain from calling for competitive bids if the estimated cost of such work or improvement, including the cost of materials, supplies and equipment, although in excess of five thousand dollars, does not exceed ten thousand dollars (or fifteen thousand dollars if the public work or improvement is for the construction of water mains).

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                                                                 January 13, 1977

Municipal Research Council
4719 Brooklyn Avenue N.E.
Seattle, Washington 98105

                                                                                                                   Cite as:  AGO 1977 No. 4

Attention:  !tt Ernest H. Campbell

            Agent

Dear Sir:

            By letter previously acknowledged you have requested an opinion of this office on certain questions pertaining to competitive bidding requirements in connection with the execution of contracts by code cities.  We paraphrase your questions as follows:

             [[Orig. Op. Page 2]]

            (1) Is a code city required to call for competitive bids when contracting for the purchase of supplies, materials and equipment which are not being procured in connection with a public work or improvement project?

            (2) Is a code city required to call for competitive bids when contracting for the purchase of equipment which is being procured in connection with a public work or improvement project having an estimated cost in excess of five thousand dollars?

            (3) In view of the enactment of chapter 56, Laws of 1975, 1st Ex. Sess. (now codified as RCW 35.22.620 ‑ 35.22.650), may a code city, when contracting for a public work or improvement, now refrain from calling for competitive bids if the estimated cost of such work or improvement, including the cost of materials, supplies and equipment, does not exceed ten thousand dollars (or fifteen thousand dollars if the public work or improvement is for the construction of water mains)?

            We answer your first and third questions in the negative and your second question in the affirmative for the reasons appearing in our analysis below.

                                                                     ANALYSIS

            At the outset it is important to note the limited scope of the questions which you have posed.  None of those questions involve the purchase, by a code city (i.e., a city which is operating under the optional municipal code as contained in Title 35A RCW), of services (such as garbage collection) which do not involve either a public work or a public improvement.  Under a recent decision by the state court of appeals in the case of Shaw Disposal v. Auburn, 15 Wn.App. 65,P.2d (1976), such contracts are not subject to any statutory competitive bidding requirements when entered into by such a city.  Accord, the established principle that a municipality is not required to call for bids before entering into a given contract in the absence of some specific statutory requirement to the contrary.  Reiter v. Chapman, 177 Wash. 393, 31 P.2d 1005 (1934), and authorities cited therein.  Bearing that principle in mind we turn to your questions.

            Question (1):

            RCW 35A.40.200, applicable to cities operating under the optional municipal code reads, in pertinent part, as follows:

             [[Orig. Op. Page 3]]

            "Every code city shall have the authority to make public improvements and to perform public works under authority provided by general law for any class of city and to make contracts in accordance with procedure and subject to the conditions provided therefor, including but not limited to the provisions of:  (1) Chapter 39.04 RCW, relating to public works; (2) RCW 35.23.352 relating to competitive bidding for public works, materials and supplies; . . ."

            RCW 35.23.352, in turn, provides that:

            "Any city or town of the second, third or fourth class may construct any public work or improvement by contract or day labor without calling for bids therefor whenever the estimated cost of such work or improvement, including cost of materials, supplies and equipment will not exceed the sum of five thousand dollars.  Whenever the cost of such public work or improvement, including materials, supplies and equipment, will exceed five thousand dollars, the same shall be done by contract.  [Pursuant to public, competitive bidding] . . ."

            This statute, however, then goes on to deal, separately, with "[a]ny purchase of supplies, material, equipment or services other than professional services,except for public work or improvement. . . ."  What it says, in that regard, is that:

            "Any purchase of supplies, material, equipment or services other than professional services, except for public work or improvement, where the cost thereof exceeds two thousand dollars shall be made upon call for bids in the same method and under the same conditions as required herein on a call for bids for public work or improvement."

            Based upon these statutes, among others, we earlier concluded in AGO 1972 No. 24 [[to Municipal Research Council, on October 25, 1972]](copy enclosed) that a code city is not required to call for competitive bids in connection  [[Orig. Op. Page 4]] with contracts for "services."1/   In so concluding we first theorized that RCW 35A.40.200, supra, is not a grant of power to code cities but, instead, is only alimitation upon those powers conferred in extremely broad terms by other sections of the code; notably RCW 35A.01.010, RCW 35A.11.020, and RCW 35A.21.160 which provide, respectively, as follows:

            RCW 35A.01.010:

            "The purpose and policy of this title to confer upon two optional classes of cities created herebythe broadest powers of local self-government consistent with the Constitution of this state.  Any specific enumeration of municipal powers contained in this title or in any other general law shall not be construed in any way to limit the general description of power contained in this title, and any such specifically enumerated powers shall be construed as in addition and supplementary to the powers conferred in general terms by this title.  All grants of municipal power to municipalities electing to be governed under the provisions of this title, whether the grant is in specific terms or in general terms, shall be liberally construed in favor of the municipality."  (Emphasis supplied.)

            RCW 35A.11.020:

            ". . .  The legislative body of each code city shall have all powers possible for a city or town to have under the Constitution of this state, and not specifically denied to code cities by law. . . .  In addition and not in limitation, the legislative body of each code city shall have any authority ever given to any class of municipality or to all municipalities of this state before or after the enactment of this title, such authority to be exercised in the manner provided, if any, by the granting statute, when not in conflict with this title. . . ."

             [[Orig. Op. Page 5]]

            RCW 35A.21.160:

            "A code city organized or reorganized under this title shall have all of the powers which any city of any class may have and shall be governed in matters of state concern by statutes applicable to such cities in connection with such powersto the extent to which such laws are appropriate and are not in conflict with the provisions specifically applicable to code cities."  (Emphasis supplied.)

            Then, with those statutes in mind, we reasoned that by omitting any reference to contracts for "services" in RCW 35A.40.200, the legislature, in effect, exempted code cities from the competitive bidding requirements of RCW 35.23.352 with respect to contracts for such "services."  Because of that omission we said the provisions of this statute (RCW 35.23.352)

            ". . . simply do not reach and limit the authority of a code city to execute such contracts, even though the powers of second through fourth class citiesare so limited. . . ."  (AGO 1972 No. 24 at p. 8.)

            Much the same reasoning process is applicable to your present first question as well.  Again, as earlier noted, RCW 35.23.352 draws a distinction between purchases madein connection with "any public work or improvement" and "[a]ny purchase of supplies, material, equipment or services other than professional services, except for public work or improvement. . . ."  Your question, in essence, inquires as to the extent to which this distinction is carried over into the optional municipal code by so much of RCW 35A.40.200 as provides that:

            "Every code city shall have the authority to make public improvements and to perform public works under authority provided by general law for any class of city and to make contracts in accordance with procedure and subject to the conditions provided therefor, including but not limited to the provisions of:  (1) Chapter 39.04 RCW, relating to public works; (2) RCW 35.23.352 relating to competitive bidding for public works, materials and supplies; . . ."

            We may quickly dispose of any difficulties presented by the failure of RCW 35A.40.200(2) to include the phrase "or  [[Orig. Op. Page 6]] improvement" following the words "public works" by observing that the phrase "public work" is defined in RCW 39.04.010 so as to include "improvements," as follows:

            "The term public work shall include all work, construction, alteration, repair or improvement other than ordinary maintenance, executed at the cost of the state or of any municipality, or which is by law a lien or charge on any property therein, but nothing herein shall apply to the construction, alteration, repair or improvement of any municipal street railway system."  (Emphasis supplied.)

            Accordingly, we may read RCW 35A.40.200 as if subsection (2) thereof said "RCW 35.23.352 relating to public works or improvements, materials and supplies. . . ."  Nonetheless (as we actually went on to say by way of dicta in AGO 1972 No. 24), the statute still only operates as a limitation upon the authority of a code city ". . . to make public improvements and to perform public works . . ."2/   And therefore, just as it does not apply to the purchase of services by a code city it similarly does not apply to the purchase of supplies, material or equipment when not being procured in connection with a public work or improvement project.

            In so concluding we have not overlooked the phrase "and to make contracts" in RCW 35A.40.200, supra.3/   As we read that phrase in the context in which it there appears, however, it only refers to contracts for public works or improvements.  Conversely, when the legislature speaks of contracts for the unrelated purchase of materials, supplies or equipment we note that it generally uses the word "purchase" ‑ as, for example, in RCW 36.32.240 which requires county purchasing departments to ". . . contract on a competitive basis for all public works andpurchase or lease on a competitive basis allsupplies, materials, and equipment."  (Emphasis supplied.)

             [[Orig. Op. Page 7]]

            Also of note is the proposition that while bid laws such as RCW 35A.40.200,supra, are not subject to a rule of strict construction in this state,4/ neither are they to be extended by construction beyond their reasonable purpose. 10 McQuillin, Municipal Corporations, § 29.29 (p.323).  In this case an extension of RCW 35A.40.200 to encompass the purchase of materials, supplies and equipment unrelated to a public work or improvement would, at least arguably, be in violation of that principle.

            And finally, there is the basic philosophy of the optional municipal code to be considered.  As evidenced by RCW 35A.01.010, RCW 35A.11.020 and 35A.21.160, supra, code cities are to have ". . . the broadest powers of local self-government consistent with the Constitution of this state. . . ."  Thus, while the legislature has, at the same time, also imposed certainstatutory restrictions on such cities (as in the case of RCW 35A.40.200) it would seem to us that, in the spirit of the code, those kinds of restrictions should similarly (as in the case of bid laws, generally) not be extended by construction to cases not clearly encompassed by their provisions.  Accord, again, the approach which is also represented by AGO 1972 No. 24,supra.

            Question (2):

            We thus answer your first question in the negative and turn to your second inquiry which, in effect, asks whether this same reasoning would also mean that a code city is not required to call for competitive bids when contracting for the purchase of equipment even when such is being procured in connection with a public work or improvement.

             [[Orig. Op. Page 8]]

            At first blush such a conclusion might also seem to follow.  This is so because, like the word "services" which was the subject of AGO 1972 No. 24,supra, the word "equipment" is also not to be found in the second paragraph of RCW 35.23.352,supra.  It is, however, to be found in the first paragraph and therefore, in our opinion, a code city, when purchasing equipment in connection with a public work or improvementis required to call for bids.  Repeated for ease of reference the critical language of this portion of the statute reads as follows:

            "Any city or town of the second, third or fourth class may construct any public work or improvement by contract or day labor without calling for bids therefor whenever the estimated cost of such work or improvement, including cost of materials, suppliesand equipment will not exceed the sum of five thousand dollars.  Whenever the cost of such public work or improvement, including materials, suppliesand equipment, will exceed five thousand dollars, the same shall be done by contract. . . ."  (Emphasis supplied.)

            In other words RCW 35.23.352, in speaking of a "public work or improvement" includes whatever materials, supplies and equipment are a part of such work or improvement.  A more restricted reading which would exclude the cost of equipment from the term "public work or improvement" for purposes of this question would thus constitute a limitation on the statute not clearly intended by the legislature.

            Question (3):

            Finally you have asked a somewhat unrelated question regarding mandatory competitive bidding in connection with contracts for public works or improvements by a code city.  Unlike the situation which existed in the case of second, third and fourth class cities (RCW 35.23.352) and code cities (RCW 35A.40.200) there was, prior to 1975, no statutory competitive bidding requirement in effect at all with regard to cities of the first class.  By chapter 56, supra, however, the legislature imposed such a requirement, as follows:

            "Any public work or improvement of a first class city shall be done by contract pursuant to public notice and call for competitive bids, whenever the estimated cost of such work or improvement, including the cost of materials, supplies, and equipment  [[Orig. Op. Page 9]] will exceed the sum of ten thousand dollars:  Provided, That whenever this public work or improvement is for construction of water mains, such sum shall be fifteen thousand dollars.  When any emergency shall require the immediate execution of such public work, upon the finding of the existence of such emergency by the authority having power to direct such public work to be done and duly entered of record, publication of description and estimate may be made within seven days after the commencement of the work."5/

             Your question is whether, in view of this enactment, a code city, when contracting for a public work or improvement, may now disregard the five thousand dollar ceiling in RCW 35.52.352,supra, and refrain from calling for competitive bids if the estimated cost of such work or improvement, including the cost of materials, supplies and equipment, does not exceed ten thousand dollars (or fifteen thousand dollars if the public work or improvement is for the construction of water mains).

            In responding to this question reference must, once again, be made to RCW 35A.01.010, RCW 35A.11.020 and 35A.21.160, supra, the several statutes from which the broad powers of a code city are derived.  Speaking of those statutes in another recent opinion, AGO 1974 No. 2 [[to Municipal Research Council, on January 18, 1974]](a copy of which is also enclosed for your immediate reference) we said, at page 4 thereof:

            "Based upon these provisions there can be no doubt that whenever the legislature affirmatively grants a power to any particular, numerically designated, class of cities in this state (i.e., first, second, third or fourth class), the power thus granted runs to all cities organized and operating under the optional municipal code as well ‑ unless, of course, such cities are specifically excluded by the terms of the legislative enactment itself. . . ."

             [[Orig. Op. Page 10]]

            The problem, however, is that even if this new law is characterized as a grant of power rather than a limitation thereon,6/ it fails to meet another standard which is to be found in the concluding portion of the third of the statutes above listed, RCW 35A.21.160.  Repeated for ease of reference, that statute reads as follows:

            "A code city organized or reorganized under this title shall have all of the powers which any city of any class may have and shall be governed in matters of state concern by statutes applicable to such cities in connection with such powersto the extent to which such laws are appropriate and are not in conflict with the provisions specifically applicable to code cities."  (Emphasis supplied.)

            RCW 35A.40.200,supra, contains just such provisions; i.e., statutory provisions which are "specifically applicable to code cities."  And that statute, by reference, makes RCW 35.23.352, supra, applicable to code cities insofar as contracts for public works or improvements are concerned.  RCW 35.23.352, in turn, establishes a five thousand dollar limit on the ability of those cities to which it pertains to contract for public works or improvements without calling for bids.  Thus, that statute is in conflict with § 1, chapter 56, supra, to that significant extent.  And therefore, under RCW 35A.21.160, supra, it prevails over this more recent bid law for first class cities.

            Consequently, in our opinion, your third question is also answerable in the negative.  However this time (unlike the case of your first question) that answer means that competitive bidding is required in those circumstances to which the question applies; i.e., contracts for public works or improvements by a code city having an estimated cost of more than five thousand dollars even though less than ten thousand dollars.