Judge: Mitchell L. Beckloff, Case: 22STCP03723, Date: 2023-10-04 Tentative Ruling

Case Number: 22STCP03723    Hearing Date: October 4, 2023    Dept: 86

BASHBOY ENTERPRISES, INC. v. COUNTY OF LOS ANGELES

Case Number: 22STCP03723

Hearing Date: October 4, 2023

[Tentative]      ORDER DENYING PETITION FOR WRIT OF MANDATE

On October 12, 2022, Petitioner, Bashboy Enterprises, Inc., filed its verified petition for writ of mandate seeking an order setting aside the decision of Respondent, the County of Los Angeles, to award a contract for janitorial paper supplies to a vendor other than Petitioner. Petitioner also requests an order requiring Respondent to award it the contract and to “set[] aside any contracts signed with other vendors with respect to the goods and services . . . .” (Pet., Prayer.)

The petition is DENIED.

Petitioner’s request for judicial notice of the Los Angeles County Purchasing Policy & Procedure Manual (the Manual) (AR 44-200), Los Angeles County Code (LACC)[1] sections 2.81.810 and 2.204.060 is granted pursuant to Evidence Code section 452, subdivision (c) (“official ats of the legislative, executive, and judicial departments of the United States and of any state of the United States”). 

Petitioner’s evidentiary objections to the Declaration of Gerald R. Plummer are overruled except as to the second sentence of the objection to paragraph 27 which is sustained on relevance grounds, paragraph 32 on secondary evidence grounds, and paragraph 33 on relevance grounds. The court notes Plummer has acted as the Division Manager for the purchasing division of Respondent’s Internal Services Department (ISD) since 2009. (Plummer Decl., ¶ 1.) Plummer provides a supervisorial role in ISD. (Plummer Decl., ¶¶ 15, 16.) According to Plummer, ISD “provides a range of support services to other County departments in areas such as purchasing, contracting, facilities, information technology, and other support services. It is [also] responsible for overseeing the procurement of purchase contracts for vital goods and supplies on behalf of the County.” (Plummer Decl., ¶ 2.)[2] Plummer was also involved in the award process at issue herein. (See, e.g. AR 299-300.)

Respondent’s evidentiary objections to the Declaration of Sebastian Juarez are overruled in their entirety.

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FACTUAL BACKGROUND

Petitioner is a certified Local Small Business Enterprise (LSBE).[3]

On June 27, 2022, Respondent (through its ISD) issued a Request For Bid (RFB) for a brand-specific janitorial paper supplies contract (Contract).[4] (AR 2.)

Eight vendors, including Petitioner, submitted a response to the solicitation. (Plummer Decl., ¶ 17.)

On July 30, 2022, Respondent provided its notice of intent to award the contract to two companies, Brady Industries of California LLC (Brady) and American Sanitary Supply Inc., awarding each of the 26 line items in the RFB separately. (See AR 292-293, AR 295-AR296; Opening Brief 1:7-8.) Petitioner immediately questioned the award. On August 1, 2022, ISD advised Petitioner it would “look into the intent to award to Brady and American . . . .” (Juarez Dec., ¶ 9; AR 309-312.) 

Shortly thereafter, on August 2, 2022, Respondent issued a second notice of intent to award each line item in the RFB (that is, the eContract) to Aramsco, Inc., the incumbent vendor (AR 314-315; Opening Brief 1:9.)

In response to Respondent’s second notice of intent to award, Petitioner notified Respondent based on Petitioner’s LSBE bidding preference under the LACC, Petitioner’s bid was lower than that of Aramsco on all but three items. (Juarez Decl., ¶  12; AR 302-303.) Petitioner wrote:

“The County, per Ms. Zhang’s email to me below, is inappropriately seizing on the fact that I proposed an exception to one item (line 19), due to the fact that such line item is an Aramsco private label product that cannot be purchased by other vendors except at exorbitant cost. Although she has not said so, I am assuming from her email that this exception is being used to somehow disqualify my company. Yet I have included only brand-specific products, just substituting a product of the same brand for [line item] 19 instead of the private label product. Further, the fact that the product I included for line item 19 is a somewhat different size is of no consequence, as my company is including dispensers and installation free of charge (unlike Aramsco; for example, see lines 13-18).

But even if the County had a valid basis not to award line item 19 to my company (which it doesn’t), the County has already shown its willingness to award line items independently to multiple vendors, as it first intended to do with American and Brady and as it is authorized to do in the RFB (see p. 19 of RFB, stating the County may “make one award or a combination of awards, whichever is in the best interests of the County”).

If line items have specifications for private label products made by a manufacturer for one specific vendor, and the County rejects alternatives from other vendors (without awarding line items to multiple vendors), then the vendor with private label products would have an unfair advantage. This would also encourage vendors and manufacturers to collude to make private label products for purposes of gaining such an advantage.

If we are not allowed to offer an alternate for the Aramsco products, then this is a closed bid that only favors Aramsco. At that point it is no longer an open/public bid. The only viable and fair solution, in the best interests of the County, is to either accept the Brand Specific alternatives to private label products and award the entire contract to my company, as the overall lowest bidder, or split the award, awarding the line items for which I was low bidder to my company and awarding to Amarsco the private label line items and the items for which it was low bidder.” (AR 303.)

On August 5, 2022, Petitioner formally protested Respondent’s award of the Contract to Aramsco. (AR 364-368.)

Based on Petitioner’s protest, ISD “conducted a detailed review of the solicitation, evaluation process and the operational needs of the Department of Health Services . . . .” (AR 407.) “After reviewing all the relevant information to [the] solicitation, [Respondent] made the decision to award to multiple vendors.” (AR 407.) Respondent awarded agreements to three vendors—Petitioner, Aramsco and Brady. (AR 407.)

Shortly thereafter, on September 14, 2022, ISD advised Petitioner RFB line items 1 through 26 had been awarded to Aramso while line items 1 through 18, 21 through 24 and 26 had been awarded to both Petitioner and Brady. (AR 422.) Thus, Respondent made an award to Petitioner of all line items except line items 19, 20 and 25—the private label products. (Pet.,

¶ 9.)

On September 15, 2022, Petitioner raised further issues with Respondent’s award. Specifically, Petitioner noted “Brady’s purported price for brand-specific items is below [Petitioner’s] supplier’s cost” suggesting “prices by Brady that are not in line with industry standard” and surmising Brady “had included products that were not brand-specific[].” (AR 420.) Petitioner believed Brady and Aramsco had not demonstrated they were authorized distributors for products manufactured by Georgia Pacific and Tork thereby making their bids “non-responsive.” (AR 420.) Petitioner argued it was “the only vendor who [] provided certification that it [could] provide the requested products.” (AR 420.) Petitioner asserted manufacturer/distributor certifications were “an important requirement of the solicitation.” (AR 420.) Finally, Petitioner advised Aramsco “was more expensive” than it on all products other than its private label products. (AR 420.)

ISD responded to Petitioner’s six positions in its further protest on September 26, 2022. (AR 456.) Respondent rejected all of Petitioner’s claims. Respondent noted both Brady and

Aramsco were authorized distributors of Georgia Pacific products, the Contract requires the items specified in the RFB—not substitutes—be provided, disputed Petitioner’s position on Aramsco products as more expensive, and found Aramsco “met all the requirements of the solicitation . . . .” (AR 456-457.) Respondent did not expressly address Petitioner’s claim Aramsco “was more expensive” than it for all products except Aramsco’s private label products. (AR 457.)

STANDARD OF REVIEW

Ordinary mandate under Code of Civil Procedure section 1085 is generally used to review an agency’s ministerial acts, quasi-legislative acts, and quasi-judicial decisions which do not meet the requirements for review under Code of Civil Procedure section 1094.5. (Carrancho v. California Air Resources Board (2003) 111 Cal.App.4th 1255, 1264-1265; Bunnett v. Regents of University of California (1995) 35 Cal.App.4th 843, 848.)

Under Code of Civil Procedure section 1085, a writ:

“may be issued by any court to any . . . board . . . to compel the performance of an act which the law specially enjoins, as a duty resulting from an office, trust, or station, or to compel the admission of a party to the use and enjoyment of a right or office to which the party is entitled, and from which the party is unlawfully precluded by such inferior . . . board, . . . .” (Code Civ. Proc., § 1085, subd. (a).)

“To obtain a writ of mandate under Code of Civil Procedure section 1085, the petitioner has the burden of proving a clear, present, and usually ministerial duty on the part of the respondent, and a clear, present, and beneficial right in the petitioner for the performance of that duty.” (Marquez v. State Dept. of Health Care Services (2015) 240 Cal.App.4th 87, 103.)

“A ministerial duty is one that a public functionary is required to perform in a prescribed manner in obedience to the mandate of legal authority, without regard to his or her own judgment or opinion concerning the propriety of such act.” (Association of Deputy District Attorneys for Los Angeles County v. Gascon (2022) 79 Cal.App.5th 503, 528 [cleaned up].)

“ ‘Mandamus does not lie to compel a public agency to exercise discretionary powers in a particular manner, only to compel it to exercise its discretion in some manner.’ ” (California Public Records Research, Inc. v. County of Yolo (2016) 4 Cal.App.5th 150, 177.)

For quasi-legislative decisions, the appropriate standard of judicial review is whether the agency's action was arbitrary, capricious, entirely lacking in evidentiary support, or failed to follow the procedure required by law. (Citizens for Improved Sorrento Access, Inc. v. City of San Diego (2004) 118 Cal.App.4th 808, 814; Heist v. County of Colusa (1984) 163 Cal.App.3d 841, 846.) Such issues “are essentially questions of law.“ (Mike Moore’s 24-Hour Towing v. City of San Diego (1996) 45 Cal.App.4^th 1294, 1303.) “[U]nless otherwise provided by law, ‘the petitioner always bears the burden of proof in a mandate proceeding brought under . . . section 1085.” [Citation.] Thus, it is petitioner's burden to establish that [the agency's] decision was arbitrary, capricious, entirely lacking in evidentiary support, unlawful, or procedurally unfair.’ [Citation.]” (American Coatings Assn. v. South Coast Air Quality Management Dist. (2012) 54 Cal.4th 446, 460.)

Entry into a public contract is a quasi-legislative act properly challenged through traditional mandamus. (The SherwinWilliams Co. v. South Coast Air Quality Management District (2001) 86 Cal.App.4th 1258, 1267.) In reviewing the award of a public contract, the court must “decide whether the public entity’s decision is supported by substantial evidence.” (Ghilotti Construction Co. v. City of Richmond (1996) 45 Cal.App.4th 897, 903; Konica v. Business Machines U.S.A. Inc. v. Regents of University of California (1988) 206 Cal.App.3d 449, 453.) The entity’s decision is presumed to be supported by substantial evidence and petitioner has the burden of proving otherwise. (Ghilotti Construction Co. v. City of Richmond, supra, 45 Cal.App.4th at 903.) The court may not reweigh evidence and it must view the evidence in the light most favorable to the respondent, “indulging all reasonable inferences in support of those actions.” (Ibid.) The court’s review is “limited to an examination of the proceedings to determine whether the [respondent’s] actions were arbitrary, capricious, entirely lacking evidentiary support, or inconsistent with proper procedure.”  (Ibid.)

GOVERNING LAW—COMPETITIVE BIDDING ON PUBLIC CONTRACTS

“The amount of leeway a public entity has in awarding a contract is governed by the statutory or municipal law framework applying to that contract . . . . [¶] Thus, where a statute requires a public entity to award a contract to the lowest responsible bidder, the courts have been vigilant in not excusing attempts by public entities to circumvent that requirement. [¶] By contrast, where a statute or city charter specifically contemplated discretion on the part of the public entity to look at factors in addition to the monetary benefit of the bid, awards to other than the best monetary bidders have been upheld.” (Great West Contractors, Inc. v. Irvine Unified School Dist. (2010) 187 Cal.App.4th 1425, 1447-1448.)

“The purpose of requiring governmental entities to open the contracts process to public bidding is to eliminate favoritism, fraud and corruption; avoid misuse of public funds; and stimulate advantageous market place competition. Because of the potential for abuse arising from deviations from strict adherence to standards which promote these public benefits, the letting of public contracts universally receives close judicial scrutiny and contracts awarded without strict compliance with bidding requirements will be set aside. This preventative approach is applied even where it is certain there was in fact no corruption or adverse effect upon the bidding process, and the deviations would save the entity money. The importance of maintaining integrity in government and the ease with which policy goals underlying the requirement for open competitive bidding may be surreptitiously undercut, mandate strict compliance with bidding requirements.” (Konica Business Machines U.S.A. Inc. v. Regents of University of California, supra, 206 Cal.App.3d at 456-457.) “The request for public bids must be sufficiently detailed, definite and precise so as to provide a basis for full and fair competitive bidding upon a common standard and must be free of any restrictions tending to stifle competition.” (Id. at 456.)

“ ‘A basic rule of competitive bidding is that bids must conform to specifications, and that if a bid does not so conform, it may not be accepted. [Citations.] However, it is further well established that a bid which substantially conforms to a call for bids may, though it is not strictly responsive, be accepted if the variance cannot have affected the amount of the bid or given a bidder an advantage or benefit not allowed other bidders or, in other words, if the variance is inconsequential.’ ” (Id. at 454 [emphasis in original and quoting opinion of Attorney General].) “Whether in any given case a bid varies substantially or only inconsequentially from the call for bids is a question of fact.”  (Ghilotti Construction Co. v. City of Richmond, supra, 45 Cal.App.4th at 906.) 

“In determining whether a bid is responsive to a solicitation for bids, and whether a deviation from contract specifications may be disregarded as insubstantial, the contracting entity must provide the bidder with notice and allow it to submit materials concerning the issue of responsiveness.” (Id. at 904.) “A bid is responsive if it promises to do what the bidding instructions require. Thus, a responsive bid must conform to the public agency's specifications for the contract.” (DeSilva Gates Construction, LP v. Department of Transportation (2015) 242 Cal.App.4th 1409, 1417.)

GOVERNING LAW—GOVERNMENT CODE AND LACC

Government Code section 25501 provides in part:

“The purchasing agent may:  (a) Purchase for the county and its offices all material, supplies, furnishings, equipment, livestock and other property.”

LACC section 2.81.810 provides in part:

“Pursuant to Section 54202 of the Government Code, the director shall prepare or cause to be prepared a manual of procedures, for submission to and approval of the board of supervisors. Said manual shall contain detailed procedures concerning the conduct of all purchasing and stores business, including, but not limited to, procedures and other matters pertinent to:

1. Handling requests for quotations, including their custody and safeguarding, opening and tabulation, rejection and readvertising, and the procedure for determining the lowest responsible bidder;

2. Securing from vendors and prospective vendors the data necessary to determine whether or not they are responsible[.]”

LACC section 2.204.060 provides in part:

“A.  To facilitate the participation of LSBEs in County concession contracts and purchases of goods and services, County departments shall provide for LSBE preference in their concession contracts and purchase of goods and services where responsibility and quality are equal.

B.  In solicitations where an award is to be made to the lowest responsible bidder meeting specifications, subject to subsections E and G through I, the preference to the LSBE shall be fifteen percent (15%) of the lowest responsible bidder meeting specifications, determined according to the instructions issued by DCBA.”

RELEVANT PROVISIONS OF THE MANUAL

Section 6.3: “Formal Bids (RFB)” provides:

“The County of Los Angeles utilizes the formal bid process, Request for Bid (RFB), for nonagreement purchases exceeding $10,000 and for all applicable agreement purchases[].[5] The formal bid is the preferred method of bidding for materials, supplies, equipment, and some services. It is a sealed bid process, utilizing standardized bid lists, public reading, and total public disclosure of competition, awards and rejections. The formal bid is publicly posted and listed on the County bid webpage. Any vendor may receive a copy of the bid. The formal bid process promotes the highest level of public confidence in the integrity of the purchasing organization and its ability to treat all bidders fairly and to provide a level playing field for all participants.”  (AR 80.)

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Section 14.1.4.1: “Soliciting and Receiving Quotes from Vendors” provides in part:

“The resultant award must be made to the low bid vendor or [Preference Program Enterprise] that meets the department’s specifications or statement of work.” (AR 121.)

Section 14.5.1: “Factors When Evaluating Price” provides in part:

“In addition to determination of lowest bidder, the bid response(s) must be reviewed for responsiveness to the solicitation instructions to bidders, terms and conditions, and compliance with the bid specifications.”  (AR 130.)

Section 14.7.1: “Basic Procedures” provides in part:

“Award must be made to the overall lowest, responsive, and responsible bidder.”  (AR 132.)

Section 14.13: “Bid/Vendor Protest” provides in part:

“With limited exceptions, solicitations conduct under the statutory authority of the Purchasing Agent are price-based with the resultant award being made to the lowest, responsible bidder that fully meets and complies with all of the specifications and requirements of the solicitation.” (AR 137.)

ANALYSIS

Petitioner challenges Respondent’s Contract award through Code of Civil Procedure section 1085. Petitioner seeks an order setting aside Respondent’s decision to award the Contract to Brady and Aramsco as well as an order requiring Respondent to award the Contract solely to Petitioner. (Pet., Prayer.) Petitioner also requests an order “setting aside any contracts signed with other vendors with respect to the goods and services sought by the RFB.” (Pet., Prayer.)

Petitioner makes two main arguments in support of its request for a writ of mandate. First, Petitioner contends Respondent had no discretion to award the Contract to anyone other than Petitioner. Petitioner posits it was the lowest responsive, responsible bidder and it has preferential status as an LSBE.[6] Second, Petitioner asserts Respondent acted arbitrarily and capriciously when it awarded the Contract to multiple bidders. Petitioner supports its second argument with claims Respondent did not substantiate its multiple vendor award decision, discriminated against Petitioner as an LSBE, overlooked Brady and Aramasco’s failure to provide supplier authorization forms and generally acted unfairly with its Contract award.[7]

Respondent asserts Petitioner is entitled to no relief in this proceeding. First, Respondent contends Petitioner failed to join Brady and Aramsco as indispensable parties and the proceeding must therefore be dismissed. Respondent also argues it acted in its best interests when it solicited bids for brand specific and private label goods, evaluated bid responses and selected awardees for the public contract for goods. Respondent advises its RFB expressly did not guarantee a minimum order quota to any awardee bidder. Respondent disputes Petitioner’s claim it abused its discretion with its Contract award. Finally, Respondent argues it would be prejudicial to void its agreements with Brady and Aramsco as well as harmful to it; Petitioner’s proposed alternative goods do not fit the paper dispensers currently in use, and it would be too disruptive and burdensome to remove and replace hundreds of paper dispensers solely to accommodate Petitioner’s alternative product. 

The court addresses the parties’ arguments in turn.

Brady and Aramsco Need Not Be Joined as Necessary and Indispensable Parties

Respondent contends Petitioner is not entitled to relief because it failed to join Brady and Aramsco who are indispensable parties in this proceeding. Petitioner asserts any interests of Brady and Aramsco are fully protected and aligned with Respondent such that Brady and Aramsco are not indispensable parties to this proceeding.

Subdivision (a) of Code of Civil Procedure section 389 defines persons who should, if possible, be joined in a lawsuit and are thus deemed necessary to the action. (County of San Joaquin v. State Water Resources Control Bd. (1997) 54 Cal.App.4th 1144, 1149.) Specifically, a person subject to service of process whose joinder will not deprive the court of subject matter jurisdiction:

“shall be joined as a party in the action if (1) in his absence complete relief cannot be accorded among those already parties or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest.” (Civ. Pro. Code § 389, subd. (a).)

“If a person [or entity] is determined to qualify as a ‘necessary’ party under one of the standards outlined above [under Code of Civil Procedure section 389, subd. (a)], courts then determine if the party is also ‘indispensable.’ ” (City of San Diego v. San Diego City Employees' Retirement System (2010) 186 Cal.App.4th 69, 83–84 (City of San Diego ).)

As relevant here, a necessary party is regarded as indispensable to the proceeding if the court determines “the plaintiff seeks some type of affirmative relief which, if granted, would injure or affect the interest of a third person not joined.”  (Save Our Bay v. San Diego United Port District (1996) 42 Cal.App.4th 686, 692.)

If a necessary person cannot be joined as a party, the trial court considers specific factors to “determine whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed without prejudice, the absent person being thus regarded as indispensable.” (Code Civ. Proc., § 389, subd. (b).) Those factors are: “(1) to what extent a judgment rendered in the person's absence might be prejudicial to him or those already parties; (2) the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; (3) whether a judgment rendered in the person's absence will be adequate; (4) whether the plaintiff or cross-complainant will have an adequate remedy if the action is dismissed for nonjoinder.” (Ibid.)

Failure to join an indispensable party, however, is not a jurisdictional defect in the fundamental sense of jurisdiction. (Id. at 693.)  “Although the court has no jurisdiction of the absent party, and its judgment cannot bind him, the court does have jurisdiction of the existing parties and it has the power to make a judgment affecting their interests. It is for discretionary and equitable reasons, not for any want of jurisdiction, that the court may decline to proceed without the absent party.” (People ex rel. Lungren v. Community Redevelopment Agency (1997) 56 Cal.App.4th 868, 875-876.)

Petitioner seeks an order setting aside Respondent’s agreements with non-parties Brady and Aramsco. Thus, Brady and Aramsco “claim[] an interest relating to the subject of the action and [are] so situated that the disposition of the action in [their] absence may [] as a practical matter impair or impede [their] ability to protect that interest . . . .” (Code Civ. Proc., § 389, subd. (a).) Brady and Aramsco are therefore necessary parties to this proceeding.

The issue here, however, is whether Brady and Aramsco are indispensable such that Petitioner’s failure to join them requires “in equity and good conscience the action should proceed among the parties before it, or should be dismissed without prejudice, . . . .” (Id. at subd. (b).)

While there is authority providing that a party to contract is always “an indispensable party to a suit to set aside that contract” (People ex rel. Lungren v. Community Redevelopment Agency, supra, 56 Cal.App.4th at 877), “if a party to a contract were always indispensable in a suit to set aside the contract, it would eliminate the exercise of discretion accorded to the trial court under [Code of Civil Procedure] section 389, subdivision (b).” (Deltakeeper v. Oakdale Irrigation Dist. (2001) 94 Cal.App.4th 1092, 1106.)

The court must weigh “factors of practical realities and other considerations” when determining whether a party is indispensable. (City of San Diego v. San Diego City Employees' Retirement System (2010) 186 Cal.App.4th 69, 84.) None of the factors in Code of Civil Procedure section 389, subdivision (b) are “determinative or necessarily more important than another.” (Ibid.) The “facts and circumstances of each case” drives consideration of a party’s status as indispensable. (Ibid.)

In the court’s view, the most significant factor here in the indispensable party analysis is the interest alignment between Respondent, Brady and Aramsco. There is a “strong unity of interest between” Respondent, Brady and Aramsco. (Save Berkeley’s Neighborhoods v. Regents of University of California (2021) 70 Cal.App.5th 705, 722.) That is, the interests of Brady and Aramsco are sufficiently protected here through Respondent’s zealous advocacy of its own interests. “The test for determining the ability to protect an absent party’s interest is whether the existing and absent parties’ interests are sufficiently aligned that the absent party’s rights will not necessarily be affected or impaired by the judgment or proceeding.” (County of Imperial v. Superior Court (2007) 152 Cal.App.4th 13, 28.) Given the practical realities and circumstances of this proceeding, Brady and Aramsco are not indispensable parties.

City of San Diego v. San Diego City Employees' Retirement System, supra, 186 Cal.App.4th at 84-85 explains the notion of party and non-party alignment and indispensable party status in litigation:

“Thus, in People ex rel. Lungren v. Community Redevelopment Agency (1997) 56 Cal.App.4th 868  . . . the California Attorney General brought an action against a community redevelopment agency seeking to set aside that agency's contract with a Native American tribe that would have transferred city-owned property to the tribe. The Attorney General challenged the legality of the contract, but did not name the tribe as a party. [Citation.] The agency sought dismissal of the action, arguing the tribe was an indispensable party, and the trial court agreed, dismissing the complaint. [Citation.]

The Court of Appeal reversed. In doing so, the court held that the tribe's interests were adequately represented by the agency because the only issue was the legality of the contract: ‘It cannot be doubted that the Tribe can claim an interest relating to the subject of the action. The project in which the Tribe has a substantial interest will either proceed or not proceed depending on the outcome of the suit. It is less clear, however, that the absence of the Tribe in the present action will, as a practical matter, impair or impede the Tribe's ability to protect its interests. The issue raised in the present case is the legality of the Agency's actions in agreeing to relinquish City-owned property and placing it beyond the reach of the civil and criminal jurisdiction of the state. The actions of the Tribe in entering into the [contract] are not challenged. The Tribe's ability to look after its own interests in this setting would be limited to the opportunity to argue that the Agency's actions were permitted by California law. It would thus appear that, although the Tribe and the Agency have interests under the [contract] that are not identical, the Tribe's object in the present litigation—establishing that the Agency acted lawfully in entering into the [contract]—would duplicate that of the Agency and would be adequately represented by the Agency in the present litigation.’ [Citation.]

The Court of Appeal then determined that it could not ‘ “in equity and in good conscience,” affirm the trial court's dismissal of this action for failure to join the Tribe.’ [Citation.]”

Finally, as to Petitioner’s claims Respondent abused its discretion, the issue at stake is the validity of Respondent’s exercise of power. Neither Brady nor Aramsco are required for a

“a complete determination of [that] controversy,” and their absence does not affect the court’s ability to enter an effective judgment directing Respondent to award the Contract to Petitioner alone. Given the strong public interest in holding a public agency accountable for contracting abuses, equity and good conscience weigh against dismissing this proceeding based on Petitioner’s failure to join Brady and Aramsco.

Accordingly, the court finds Respondent did not meet its burden of establishing this proceeding must be dismissed because Brady and Aramsco are indispensable parties.

Respondent’s Decision to Issue a Brand Specific RFB Was Not Arbitrary or Capricious           

A brand-specific solicitation seeks specific products made by specific manufacturers” (Opening Brief 2:17) instead of identifying types of products for bid allowing bidders to select the brand of product conforming to ISD’s specifications. (See Juarez Decl., ¶¶ 3-4.)

Petitioner argues Respondent failed to adhere to its own internal procedures in choosing to issue a brand specific RFB. (Opening Brief 3:1.) Petitioner claims Respondent “used an older ‘Request to Bid Brand Only’ form, which required much less information supporting the ‘justification’ for the brand-specific solicitation.” (Opening Brief 3:2-3; AR 202-203.) Petitioner contends the information provided through the older form does not satisfy the justification requirements of the form currently in use. (Opening Brief 3:16-17.)

ISD employee Linda Zhang explained the brand specific solicitation resulted from Respondent’s Department of Health Services using “proprietory [sic] dispensors [sic] that use KC and GP towels with a standardization program built around the products from these manufacturers.” (AR 202.) Zhang further explained Respondent’s Department of Health Services “had tried papers supplies on ISD Countywide [Master Agreement] but the quality of the paper supplies does not reach the level for their healthcare requirements.” (AR 203.) She also noted

“the products on the existing paper supply [Master Agreement] do not fit many of the [Department of Health Services’] existing dispensers.” (AR 203.) Zhang’s representations are supported by email exchanges between Zhang and other employees with Respondent’s Department of Health Services. (AR 573-574.) The email communications evidence Respondent’s Department of Health Services “proprietary dispensers that use [Kimberly Clarke] and [Georgia Pacific] towels” based on a “standardization program build around the products from these manufacturers.” (AR 574.)

While Petitioner raises a series of questions to illustrate its view the older internal form used by ISD is insufficient to justify a brand specific RFB (see Opening Brief 3:21-4:2), Petitioner does not address why the justification provided by Zhang did not provide “sufficient detail to explain the basis for suspending the usual competitive bidding process.” (AR 191 [Manual].) Zhang explained Respondent’s need for brand-specific products based on a request from the Department of Health Services—proprietary dispensers and quality meeting healthcare requirements of Respondent’s Department of Health Services.

Accordingly, Petitioner has not demonstrated Respondent’s decision to proceed with a brand-specific solicitation was arbitrary, capricious or entirely lacking in evidentiary support. While Zhang’s explanation might have been more expansive, she provided relevant information concerning the need for a brand-specific solicitation. While Petitioner correctly notes ISD used an older brand request bid, the claim is not otherwise tethered to a legal error by Respondent. The issue is whether the Department of Health Services’ brand specific goods request sufficiently explained the need for suspending the usual competitive bidding process. That certain paper products fit the dispensers used by the Department of Health Services is evidence of the need for a brand specific RFB. Petitioner’s complaint Respondent should have required additional inquiry on the need issue does not demonstrate how the information before ISD resulted in a decision approving a brand specific RFB that was arbitrary, capricious or entirely lacking in evidentiary support.[8]

No Mandatory Duty to Award Contract to Petitioner as Lowest Responsive, Responsible Bidder

Petitioner argues pursuant to the Manual, Respondent had a mandatory duty to award the Contract to it, because it was the “lowest responsible bidder in full compliance with the RFB’s requirements.” (Opening Brief, 12:4-6.) Petitioner contends neither Brady nor Aramsco fully complied with the RFB specifications because neither provided the required supplier authorization with their bids. (Opening Brief 12:5-8; But see AR 487-489 [Respondent and Brady email exchange], 524 [Aramsco certification].)[9] Finally, Petitioner asserts Aramsco’s bid was higher cost than that of Petitioner after application of Petitioner’s 15 percent bid reduction (up to $150,000) LSBE preference. (AR 527.)[10] 

Respondent reports none of the bidders qualified as the lowest, responsible and responsive bidder and that each bid, “including Petitioner’s, either failed to meet all the solicited line items as specified, failed to provide an acceptable alternative product to the solicited good, or failed to provide all the requested documents in their bid response.” (Plummer Decl., ¶ 21.) Respondent notes Petitioner’s bid set forth an exception to line item 19 that did not meet the required specifications, “i.e., the product would not physically fit into the currently used dispenser at the [Department of Health Services’] facilities based on the measurements provided.” (Plummer Decl., ¶¶ 26, 28.) 

Pursuant to the Manual, the “resultant award must be made to the low bid vendor . . . that meets the department’s specifications or statement of work.” (AR 121 [Manual, § 14.1.4.1].) In awarding a contract, “[i]n addition to determination of the lowest bidder, the bid response(s) must be reviewed for responsiveness to the solicitation instructions to bidders, terms and conditions, and compliance with bid specifications.” (AR 87 [Manual, § 14.5.1].) 

While the Manual requires any award be made to the “low bid vendor . . . that meets the department’s specifications” (AR 121 [Manual, § 14.1.4.1]), Respondent exercises sole discretion in reviewing the responsiveness of a bid as noted in the RFB. (AR 5. [“County reserves the right to select the bidder which County determines in its sole discretion, to be the most responsive and responsible bidder.”]) Thus, Respondent had discretion to “deem incomplete bid submissions as non-responsive,” “waive any formalities in the bidding or evaluation process, accommodate minor error, or respond to unforeseen circumstances,” and “select the bidder it believes is most responsive and responsible bidder.” (AR 4, 5, 19.)

Petitioner is correct Respondent has a mandatory duty to award the Contract to the “lowest responsible bidder.” (Opening Brief 12:5.) Respondent, however, has sole discretion to determine the lowest responsive responsible bidder. “[W]here a statute or city charter specifically contemplated discretion on the part of the public entity to look at factors in addition to the monetary benefit of the bid, awards to other than the best monetary bidders have been upheld.” (Great West Contractors, Inc. v. Irvine Unified School Dist., supra, 187 Cal.App.4th at 1447-1448.)

A bid is responsive “if it promises to do what the bidding instructions required.” (MCM Const. Inc. v. City & County of San Francisco (1998) 66 Cal. App.4th 359, 368.) Whether a party’s bid was “responsive is a question of fact.” (West Coast Air Conditioning Co. Inc. v. Department of Corrections & Rehabilitation (2018) 21 Cal.App.5th 453, 462.) 

To undermine Respondent’s decision Petitioner was not the lowest responsive, responsible bidder and its award of the Contract, Petitioner must demonstrate Respondent’s decision was “arbitrary, capricious, entirely lacking in evidentiary support, unlawful, or procedurally unfair.” (American Coatings Assn. v. South Coast Air Quality Management Dist., supra, 54 Cal.4th at 460.) Moreover, “[t]here is a presumption that [Respondent’s] actions were supported by substantial evidence, and [Petitioner] has the burden of proving otherwise.” (Ghilotti Construction Co. v. City of Richmond, supra, 45 Cal.App.4th at 903.) 

Respondent’s determination that all bidders failed to adhere to the requirements of the RFB is supported by substantial evidence. As to Petitioner, it is undisputed its bid failed to comply with the product specifications of the RFB. (AR 283, 289.) Petitioner did not provide a bid for the specific product requested at line item 19. Instead, Petitioner offered an exception (different product from the identified manufacturer) requiring removal of existing paper dispensers and installation of new paper dispensers to accommodate the alternate (unspecified) product. (AR 283, 289; Juarez Dec., ¶8.) The substitute product was larger than that specified in the RFB.

There can also be no dispute—as conceded by Petitioner (Juarez Decl., ¶ 8)—accepting the alternative product would have required a paper dispenser change at “all” hospitals and health facilities operated by Respondent’s Department of Health Services. (Plummer Decl., ¶13.)[11] Respondent’s employees discussed at length the need for the private label product for line item 19 given the facilities’ existing paper dispensers. (Plummer Decl., ¶ 13; AR 202-203.) According to Respondent:

“[i]t would have been burdensome, inconvenient, and laborious to change out all currently used paper dispensers across all of [the Department of Health Services’] hospitals and health facilities just to accommodate alternative goods because the changeover process would require extensive coordination between different departments within the hospitals and health facilities—such as security, facility maintenance, management, nursing, and custodial services—to replace hundreds of dispensers located in bathrooms, break rooms, sinks, kitchens, and patient rooms.” (Plummer Decl., ¶ 13.)

Respondent reasonably sought to avoid the proposed extensive overhaul of the Department of Health Services’ paper dispensers and the basis for the brand-specific bid request. (Plummer Decl., ¶13.) While Petitioner argues its bid provided for the new dispensers and their installation free of charge (Juarez Decl., ¶ 8), Petitioner’s argument does not address the required “extensive coordination between different departments” and Respondent’s labor for such coordination of many different departments. (Plummer Decl., ¶ 13.)

Further, even though the RFB could be read to permit alternative bidding, the RFB expressly states:

“[a]lternative offers must meet functional requirements and be adequately supported by documentation and include information where specifications differ.” (AR 3 [§§ 1.3, 1.5].)  The RFB also specified: “Requirement is for Georgia Pacific Professional (GP) and a few other brand items. All of them have been requested by Department users as needed and approved by the County. No alternate products will be accepted.” (AR 287.)[12] 

Petitioner also argues its LSBE status required Respondent to afford it bidding preference.

First, LACC section 2.204.060.A states an LSBE should be given preference “where responsibility and quality are equal.” (See AR 529.) Petitioner’s alternate product for line item 19 did not provide equivalent quality—Petitioner’s alternate product would have required a wholesale changeover of paper dispensers in all Department of Health Services’ facilities to accommodate that alternate product.[13] Second, Respondent provided Petitioner with preference under LACC section 2.204.060.B when it evaluated bids; it applied the required 15 percent reduction. (Plummer Decl., ¶ 20; AR 527 [illegible].) Of the bids submitted by Brady, Aramsco and Petitioner, Brady’s was the lowest cost, followed by Petitioner and then Aramsco. (Plummer Decl., ¶ 20; AR 527 [illegible].)

Finally, Respondent had ultimate discretion to “waive any formalities in the bidding or evaluation to expedite the process, accommodate minor error, or respond to unforeseen circumstances.” (AR 5 [§ 1.31].)  “The rule of strict compliance with bidding requirements does not preclude the contracting entity from waiving inconsequential deviations.” (Ghilotti Construction Co. v. City of Richmond, supra, 45 Cal.App.4th at 908.) “The test for measuring whether a deviation in a bid is sufficiently material to destroy its competitive character is whether the variation affects the amount of the bid by giving bidder an unfair advantage or benefit not enjoyed by other bidders.” (Id. at 906.) The determination of whether a bid varies substantially or inconsequentially is a question of fact. (Id. at 906.)

Respondent exercised its discretion and found unforeseen circumstances warranted waiving the irregularities present in the bids presented by Aramsco, Brady and Petitioner. Each bid failed to comply with the RFB’s specifications in different ways. By waiving the requirements as to all the bids, none of the parties were given an unfair advantage. That is, Respondent considered all three non-compliant bids.

Petitioner fails to establish Respondent had a mandatory duty under section 14.1.4 of the Manual to award it the Contract as the lowest responsive, responsible bidder. Substantial evidence supports Respondent’s decision Petitioner was not the lowest responsive, responsible bidder.

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Respondent’s Decision to Award the Contract to Multiple Bidders

Petitioner argues that, even if it did not have a mandatory duty to award it the Contract as the lowest responsive, responsible bidder, Respondent’s exercise of discretion in awarding the Contract to multiple parties rather than Petitioner was a sham, arbitrary and capricious.  Petitioner argues Respondent (1) failed to adequately substantiate its decision to award the contract to multiple vendors; (2) discriminated against petitioner as an LSBE; (3) unfairly awarded the contract to Aramsco and Brady when they failed to submit certain supplier authorization forms; (4) unfairly awarded all line items in the RFB to Aramsco, even though it was not the lowest bidder on all items sought in the RFB; (5) failed to list petitioner as an awardee on Respondent’s solicitation portal; and (6) unfairly awarded the Contracts to Brady and Aramsco when they failed to provide the DIR Registration form required by RFB and Labor Code section 1725.5. 

[At argument, the court requests Respondent address Petitioner’s argument Respondent made an award to Aramsco on all 26 line items when Petitioner’s bid was lower on all but three of those items—the private label products at line item 19, 20 and 25. Respondent failed to respond to this issue in Petitioner’s protest. As noted, AR 527 is illegible and the court cannot compare the pricing. The court questions Respondent’s vague statement from Plummer suggesting Respondent’s award accounted for bid deficiencies. Plummer states: “It was in [the Department of Health Services’] best interest for ISD to also invoke its right to a non-exclusive agreement with vendors and right to make a combination of awards to multiple bidders in order to compensate for each bidder’s limitations.” (Plummer Decl., ¶ 23.) It is not clear to the court how ISD’s award to multiple vendors compensated for “each bidder’s limitations.” If Petitioner’s bid was lower on all line items except the private label products, in a multiple vendor award, what is the basis for the award of all except line items 19, 20 and 25 to Aramsco?]

              Failure to Substantiate Decision to Award Contract to Multiple Bidders

Petitioner argues: “The County woefully failed to substantiate or document its decision to award contracts to multiple vendors.” (Opening Brief 14:25-26.) Petitioner reports the only document substantiating its multiple-bidder award decision is an email from Ted Lo, a Zhang’s section manager, to Zhang. (AR 412, 415, 416.) 

Petitioner fails to cite any legal authority addressing documentation of multiple bidder awards. From the court’s perspective, the issue is whether the decision is arbitrary, capricious or entirely lacking in evidentiary support, not whether documentation exists to support ISD’s decision to award the Contract to multiple vendors. Therefore, Petitioner’s argument is unpersuasive because it is unsupported by legal authority.

As advised in the RFB, Respondent retained the right to enter into a non-exclusive contract with the single bidder or multiple bidders based on Respondent’s best interest.  (AR 9, 20.)  Respondent explains the reasons it selected the three vendors ultimately awarded the contract to compensate for each awarded bidders deficiencies: (1)  Aramsco’s bid met “all of the required specifications in the solicitation” without exception (Plummer Decl., ¶¶ 23, 29);[14]

(2) Brady had the lowest total bid price for the brand-specific products, even after application of the 15 percent LSBE preference provided to Petitioner (Plummer Decl., ¶¶ 23, 29); and

(3) Petitioner submitted all documentation required by the RFB. (Plummer Decl., ¶23, 29.) 

              Respondent Did Not Discriminate Against Petitioner as an LSBE

Nothing required Respondent to award the Contract to an LSBE. The LACC entitled Petitioner to a 15 percent cost discount LSBE preference. (LACC, § 2.204.060.B.) The preference is warranted, however, only where the goods and services are otherwise equivalent. (See LACC, § 2.204.060.A.)

Petitioner complains the multi-vendor award “discriminated against” it. (Opening Brief 15:23.) Petitioner explains:

“With an award solely to Petitioner, the County purchasers would have had no choice but to buy from Petitioner (absent a compelling reason to go outside of the awarded contract). But with the multi-vendor award, County purchasers had a choice, and since the County did nothing to fairly divvy up ordering between the three awardees, Petitioner was at the mercy of purchasers, who had just ordered for years from Aramasco, the non-LSBE incumbent.” (Opening Brief 15:23-28.)

To illustrate its complaint, Petitioner reports Respondent has purchased goods valued at $652,974 from Aramsco while Petitioner has merely sold goods worth $1,559 to Respondent. (AR 478-481.)[15]

The LSBE preference applies to the bid process, not fulfillment of orders after award of the contract—Petitioner does not demonstrate otherwise. Further, the RFB also specifies Respondent makes no “guarantee of minimum quantity.” (AR 19.)

              Respondent Did Not Unfairly Award the Contract to Aramsco and Brady

Respondent’s award to Aramsco and Brady was “unfair” according to Petitioner because

(1) Aramsco and Brady failed to submit a supplier authorization form; (2) Aramsco was not the lowest bidder on all items sought in the RFB; and (3) Brady and Aramsco failed to provide the DIR Registration form required by the RFB and Labor Code section 1725.5. 

Petitioner’s arguments are merely variations on its others that have been rejected. To be clear, “none of the bids received met the qualifications to be deemed as the lowest, responsible, and responsive bid, [and] ISD had to waive some of the formalities in the bidding evaluation process and make multiple awards to several vendors to compensate for each bidder’s deficiencies.” (Plummer Decl., ¶ 29.)

Respondent’s Failure to List Petitioner as an Awardee on Respondent’s Solicitation Portal Does Not Establish the Multi-Bidder Award Was Arbitrary and Capricious

Petitioner argues Respondent unfairly and arbitrarily omitted listing it as an awardee from Respondent’s solicitation portal. (Opening Brief 19:20-25 [“failing to publicize”].) Petitioner fails to tie any omission to a legal theory supporting its request to set aside Respondent’s award to Aramsco and Brady. Moreover, any failure by Respondent occurred after it awarded the Contract. Finally, Petitioner fails to present any evidence Respondent’s omission was intentionally discriminatory, as opposed to mere error. 

CONCLUSION

Based on the foregoing, the petition is denied.

IT IS SO ORDERED.

October 4, 2023                                                          ________________________________

                                                                                                                   Hon. Mitchell Beckloff

                                                                                                                   Judge of the Superior Court