VAITHESWARAN, P.J.
A mother appeals the termination of her parental rights to her child, born in 2009. She contends: (1) the State failed to prove the grounds for termination cited by the juvenile court, (2) termination was not in the child's best interests, and (3) termination was detrimental to the child based on the parent-child relationship.
The Iowa Supreme Court recently articulated the framework for our analysis as follows:
[T]he proper analysis under section 232 is first for the court to determine if a ground for termination exists under section 232.116(1). If a ground exists, the court may terminate a parent's parental rights. Iowa Code § 232.116(1). In considering whether to terminate, "the court shall give primary consideration to the child's safety, to the best placement for furthering the long-term nurturing and growth of the child, and to the physical, mental, and emotional condition and needs of the child."
Id. § 232.116(2). Any findings in this regard should be contained in the judge's decision. Finally, before terminating a parent's parental rights, the court must consider if any of the exceptions contained in section 232.116(3) allow the court not to terminate.
Id. § 232.116(3)
In re P.L., 778 N.W.2d 33, 39 (Iowa 2010). We begin and end with the first question: whether a ground for termination exists.
Following a termination hearing that took place over two days, the juvenile court terminated the mother's parental rights pursuant to Iowa Code section 232.116(1)(d) (2009) (requiring proof of several elements, including proof the child was abused or neglected and the circumstances leading to the adjudication still exist despite the offer or receipt of services) and section 232.116(1)(h) (requiring proof of several elements including proof the child cannot be returned to the parent's custody). We cannot find clear and convincing evidence to support either of these grounds. See In re C.B., 611 N.W.2d 489, 492 (Iowa 2000) (stating that appellate courts review termination proceedings de novo and that the grounds for termination under section 232.116 must be established by clear and convincing evidence).
The child was removed from the mother's home in July 2009 based on the mother's use of marijuana, as well as her explosive temper. The mother underwent outpatient substance abuse treatment for several months. She also participated in parenting classes, domestic violence classes, couples counseling, and individual and group therapy. She was successfully discharged from the outpatient treatment program in November 2009 with a notation that she had "[m]inimal relapse potential with some vulnerability" and "fair to good coping skills." A counselor from the treatment center testified that the mother "consistently attended treatment groups," was "able to address the severity of her addiction," and was "able to accept the consequences of her substance use."
Following her discharge, the mother continued to attend couples counseling and individual therapy sessions. The mother also attended substance abuse and relationship counseling. Initially, she attended as a "significant other" of the child's father. Later, she asked to attend as a client. She participated with one substance abuse counselor for two months. When the mother's work schedule changed, she switched to another counselor.
The mother also engaged in in-home services and supervised visitation with her child. A service provider noted an improved home environment and increased organization. He also commented on the close bond between mother and child. Based on these favorable comments, the Department of Human Services was poised to recommend unsupervised visitation and eventual reunification of the family.
The department's goal changed following an incident on Christmas Eve in 2009. The department had agreed to let the mother spend Christmas with her child, as long as the visit was supervised by the child's grandfather in his home. On Christmas Eve, the grandfather's wife said she would be unable to accommodate mother and child in their home, given the arrival of last-minute guests. Accordingly, the grandfather booked a room at the hotel where he worked. The family spent Christmas Eve together, then went to the hotel room to sleep. During the night, the grandfather was called away to perform work around the hotel, leaving the mother unsupervised with her child. When the department learned of this fact, it recommended termination of the mother's parental rights.
At the termination hearing, the grandfather blamed himself for the change in plans, stating, "I actually probably persuaded them to go the way the way we did, and I — I'm sorry." The mother also acknowledged "[i]t was probably not the best decision in retrospect." She noted, however, that the child "wasn't unsupervised," as her dad was with them "most of the time except for at night" because he "kept getting called off to work because he works there, and they knew he was on the location."
After this incident, the mother continued to participate in in-home services and supervised visits with the child, continued to undergo individual therapy and couples counseling, and continued to attend after-care sessions for substance abuse treatment and relationship building. The mother made so much progress in couples counseling that the counselor discontinued those sessions in January 2010. The mother also cooperated with an order to obtain psychological testing and underwent that testing when it was ultimately scheduled by the department.
The mother testified she had not used marijuana since June 30, 2009, the date she entered outpatient treatment. This date preceded the child's removal from her custody. Although the State presented evidence of four missed drug tests between August and October 2009 and a missed drug test on Christmas Eve 2009, ten drug tests between July 30, 2009, and February 18, 2010, were negative for the presence of specified drugs, including marijuana.
The mother additionally made efforts to keep the father of the child on his course toward sobriety, with mixed success. She eventually heeded the department's suggestion to separate from the father.
Finally, the mother readied her apartment for the child and made it clear that she was in a position to have the child returned to her care.
We are not convinced the State met its high burden of proving the circumstances that led to the adjudication continued to exist despite the offer and receipt of services or the child could not be returned to the mother's custody. See Iowa Code § 232.116(1)(d), (h). Based on our de novo review of the record created on or before the March 2010 termination hearings, we conclude the grounds for termination cited by the juvenile court do not exist.
In reaching this conclusion, we have considered the arguments in support of termination raised by the State. We find them unpersuasive.
1. Truthfulness. The State asserts the mother was not truthful with the department. There is no question the mother did not contact the department on Christmas Eve 2009 to obtain permission for the changed location of the overnight visit. However, we find scant evidence to support the State's broad assertion with respect to the mother that, "so much lying had taken place during the course of the case that it was difficult to discern the truth from the various stories that were presented." Much of the evidence of lying pertained to the father of the child who, according to a service provider, had "a strong penchant for not telling the truth" about his after-care and therapy attendance and his compliance with drug testing. The service provider characterized the mother as having "a much stronger investment than [the father] in regards to accomplishing DHS expectations." The service provider's main criticism of the mother was her failure to separate from the father. On this point, the service provider stated the mother was unwilling "to make the crucial decision between maintaining her allegiance to her boyfriend or ensuring that the well being of her son and his best interests are met as it pertains to his safety." He continued, "[the mother] has, throughout this case, made the conscious decision to stand by [the father's] side, even as he continued to lie about his level of participation in treatment and failed to provide clean UA's." As noted, the mother addressed this criticism by separating from the boyfriend prior to the conclusion of the termination hearings.
2. Mental Health. The State contends the mother failed "to cooperate with the recommendations made about her mental health issues". The record fails to support this assertion. Less than six weeks before the first termination hearing, the mother's mental health counselor reported that the mother's "coping skills have vastly improved since I began working with her in August 2009." She continued, While she is still prone to emotional responses to her current situation, which is realistically to be expected, she has proven to be less reactive and explosive. She seems to have applied what she has learned about healthy communication, anger management and stress reduction through counseling and classes and while she has not perfected these skills, she has improved in such a way that leads me to believe she is less volatile and unpredictable. By this I mean she does not seem likely to react to a situation in such a way that would put herself or anyone else in danger.
The counselor also noted that the mother intended to continue with counseling sessions through the same service provider despite that counselor's recent resignation.
The service provider who supervised visits similarly testified that the mother was "much more positive," and had made progress in "maintaining her anger and temper." At the first termination hearing, he stated he regretted having recommended termination of her parental rights, given her significant progress. He said he based the recommendation on the mother's association with her boyfriend. While he equivocated at the second termination, he confirmed on cross-examination that he had been against the termination of the mother's parental rights.
The mother also underwent a psychological evaluation, which the State concedes was not scheduled until shortly before the first termination hearing. The evaluator noted that the mother was "willing to participate in the intake process" and was "motivated and excited to start therapy."
3. Domestic Violence. The State contends the mother had not resolved domestic violence issues, as reflected by her friendship and cohabitation with a male that she and her boyfriend knew. The record reveals the domestic violence issues of concern were precipitated by the mother. As noted, the mother made significant strides in addressing the anger that led to the domestic violence. As for the mother's friendship and cohabitation with the male, the record reflects that the mother and her boyfriend allowed him to stay with them in their apartment. The department furnished no evidence that this male was anything more than a friend of the couple or was abusive towards the mother. Indeed, a service provider testified, "I don't think he's a direct safety concern."
4. Alcohol Usage. The State asserts there were proper concerns about "the mother's alcohol usage." While there is evidence the mother abused alcohol in the past, the State's evidence of recent alcohol consumption was limited to a sighting of alcohol at the apartment the mother shared with the child's father, and a reference in the mother's psychological evaluation that she reported consuming "1 wine" on January 5, 2010, and drank "1 time a month." This evidence is too speculative to support termination of the mother's parental rights, given her favorable discharge evaluation from outpatient treatment, her participation in substance-abuse counseling and individual therapy, the positive testimony of the substance-abuse counselor and her individual therapist, and the ten negative drug tests from July 30, 2009, through February 18, 2010.
We reverse the order terminating the mother's parental rights to this child based on the absence of clear and convincing evidence to support the cited grounds for termination. We find it unnecessary to reach the remaining two issues raised by the mother.
REVERSED.
y are supported by substantial evidence. (See
MCM, supra, 66 Cal.App.4th at p. 374.) To the extent our analysis requires us to decide questions of statutory interpretation or determine whether the University's actions violate applicable law, we exercise our independent judgment.
(
Valley Crest Landscape, Inc. v. City Council (1996)
41 Cal.App.4th 1432, 1437 [
49 Cal.Rptr.2d 184];
Associated Builders, supra, 21 Cal.4th at p. 361.)
SCI urges us not to afford any deference to the hearing officer's decision because he was appointed by the University and was not a neutral third party. SCI did not object on this ground at the protest hearing and asserted the alleged bias for the first time in its reply brief in the trial court. SCI therefore has waived its challenge to the independence of the hearing officer. ( Broden v. Marin Humane Society (1999) 70 Cal.App.4th 1212, 1220 fn. 7 ( 83 Cal.Rptr.2d 235].) In any event, in asserting these allegations of bias, SCI fails to recognize that the hearing officer issued what represents the final decision of the University, which we review on appeal.
"Because of the potential for abuse arising from deviations from strict adherence to [competitive bidding] standards . . ., the letting of public contracts universally receives close judicial scrutiny. . . ." ( Konica Business Machines U.S.A., Inc. v. Regents of University of California (1988) 206 Cal.App.3d 449, 456 [ 253 Cal.Rptr. 591] ( Konica).)
II. Did the University Violate Competitive Bidding Requirements?
A. Controlling Legal Principles
We begin our analysis with the statutory requirements that govern the University's award of a public contract. The University must award any contract for a "project" to the lowest responsible bidder or else reject all bids. (§§ 10501, 10506.4, subd. (b).) Under a pilot program that took effect January 1, 2007, the University may identify the lowest responsible bidder "on the basis of the best value to the university" (best value method). (§ 10506.4, subds. (a), (c); see Stats. 2006, ch. 367, § 2, eff. Jan. 1, 2007, repealed Jan. 1, 2012.) The best value method requires that the contract be awarded to the bidder offering the best combination of price and qualifications, based upon objective criteria. (§ 10506.4, subd. (c); see § 10506.5, subd. (g) ["qualifications" include financial condition, relevant experience, demonstrated management competency, labor compliance, and safety record].)
It is undisputed that the University's construction of the hospital in this case constitutes a project within the meaning of sections 10501 and 10506.4. (See § 10500 ["project" includes the construction of any University of California structure or building that will exceed fifty thousand dollars ($50,000) in cost].)
Article 1.5 of the competitive bidding statutes applicable to the University of California "provides for a pilot program for the University of California when awarding construction contracts, applicable only to a single University of California campus located in the City and County of San Francisco." (§ 10506.4, subd. (a).)
When the University relies on the best value method, as it did in this case, it must "adopt and publish procedures and required criteria that ensure that all selections are conducted in a fair and impartial manner." (§ 10506.4, subd. (c).) These procedures must comply with statutory provisions requiring:
— a bid solicitation that notifies prospective bidders of the "[c]riteria [the University] will consider in evaluating bids," the methodology it will use "in evaluating bids," and the relative importance of each of these criteria (§ 10506.6, subd. (c)(2)(A)-(C);
— the evaluation of bidder qualifications based solely on these criteria and the assignment of a qualifications score to each bid (§ 10506.7, subd. (a)); and
— identification of the bidder determined to be the best value to the University (best value contractor) by dividing each bidder's price by its qualifications score in order to determine the bid that provides "[t]he lowest resulting cost per quality point" (best value ratio) (§ 10506.7, subds. (a) (b)). (§ 10506.4, subd. (c).) The selection procedure used by the University also must preclude the disclosure of cost or price information to the committee evaluating bidder qualifications before completion and announcement of its decision. (§§ 10506.6, subd. (d), 10506.4, subd. (c).) The procedure the University adopts in accordance with these provisions "shall be mandatory for [the University]." (§ 10506.4, subd. (c).)
SCI contends the University violated section 10506.4, subdivision (c) (1) by failing to award the contract for the mechanical and plumbing work on the Energy Center (BP1) and Outpatient Building (BP2) to the "best value contractor" (§ 10506.7, subd. (b)), and (2) by failing to adopt and publish procedures and required criteria that ensure its bid selections were fair and impartial (§ 10506.4, subd. (c)). In evaluating these contentions, we interpret and apply the competitive bidding statutes "from a practical rather than a hypothetical standpoint, with reference to the factual circumstances of the case." ( Ghilotti, supra, 45 Cal.App.4th at p. 908; accord, MCM, supra, 66 Cal.App.4th at p. 370.) We consider them in light of the purpose for which they were enacted: "`"[to] invit[e] competition, to guard against favoritism, improvidence, extravagance, fraud and corruption, and to secure the best work or supplies at the lowest price practicable. . . ."`" ( Ghilotti, supra, 45 Cal.App.4th at p. 909, quoting Domar Electric, Inc. v. City of Los Angeles (1994) 9 Cal.4th 161, 173 [ 36 Cal.Rptr.2d 521, 885 P.2d 934] ( Domar); see Konica, supra, 206 Cal.App.3d at p. 456 ["to eliminate favoritism, fraud and corruption; avoid misuse of public funds; and stimulate advantageous market place competition"].) They "`"should be so construed and administered as to accomplish such purpose fairly and reasonably with sole reference to the public interest."'" ( Ghilotti, supra, 45 Cal.App.4th at p. 909, quoting Domar, supra, 9 Cal.4th at p. 173.) "`"These provisions are strictly construed by the courts, and will not be extended beyond their reasonable purpose."'" ( Ghilotti, supra, 45 Cal.App.4th at p. 909, quoting Domar, supra, 9 Cal.4th at p. 173.)
B.
Did the University Violate Section 10506.7, Subdivision (b)?
SCI maintains that Southland was not the "best value contractor" (§ 10506.7, subd. (b)) for the mechanical and plumbing work on the Energy Center and Outpatient Building because SCI's bids and BVQ scores for BP1 and BP2, when considered together, offered the lowest cost per quality point for this scope of work. We find no merit in this contention. Section 10506.7, subdivision (b) requires only that "[t]he award of the contract shall be made to the [best value contractor]." The University decided to award a contract on BP ALT-1, 2, and it is undisputed that Southland was the best value contractor for this package. Although the scope of work was the same for BP ALT-1, 2 and the combined individual packages (BP1 BP2), the University's distinction between these packages was not arbitrary. Only BP ALT-1, 2 ensured that a single subcontractor would perform the mechanical and plumbing work on both the Energy Center and the Outpatient Building, as the University desired. Even if SCI prevailed on both BP1 and BP2 individually, the University could not have ascertained that both packages would be awarded to the same subcontractor without improperly identifying the bidders and the amounts of their bids. The University had discretion to set the project specifications, including the scope of work for each bid package. (See Associated Builders, supra, 21 Cal.4th at pp. 366, 374 [public agency is afforded considerable latitude in setting bid specifications, and these will be upheld if substantial evidence shows they are in furtherance of legitimate government interests].) SCI provides no authority that nullifies this policy decision based on its conclusion that a different packaging offered a better value.
According to Schram's calculations, SCI scored $32,429 per BVQ point on BP1 (based on a BVQ score of 730) and $36,725 per BVQ point on BP2 (based on a team BVQ score of 792), for a total of $69,154 per quality point, less than Southland's best value ratio on BP ALT-1, 2 of $76,844 per quality point (based on a BVQ score of 985).
SCI has not shown its combined scores offered the best value to the University in any case. Schram based his calculations on SCI's BVQ scores for BP1 and BP2. Pfeffer testified that a bidder on BP1 and BP2 would not necessarily have the same BVQ score on BP ALT-1, 2 because the. BVQ evaluation factored in the size of the project and the bidder's ability to handle a larger project. We note that although the BVQ scores of Southland and ACCO on BP1 and BP2 were the same for BP ALT-1, 2, the scores of the bidders on the other combination packages were different for the corresponding individual packages.
Having concluded that the University did not violate section 10506.7 in awarding a contract on BP ALT-1, 2 to Southland, we turn to SCI's remaining assertions of error.
C.
Did the University Violate Section 10506.4, Subdivision (c)?
SCI also contends the University failed to "adopt and publish procedures and required criteria that ensure that all selections are conducted in a fair and impartial manner." (§ 10506.4, subd. (c).) By its plain meaning, section 10506.4, subdivision (c) requires fairness in both the procedure for selecting the best value bid and the substantive basis for the bid selection. In addition, this provision requires the University to disclose to prospective bidders how the best value bid will be selected, including the bid selection procedure and the determinative factors in that decision. ( Ibid.) SCI contends the University violated this provision by selecting the bid packages to be awarded (1) based on undisclosed criteria; and (2) in a manner that allowed it to predetermine the outcome of the bid selection. We agree.
1.
Section 10506.4 Required Publication of the Bid Package Selection Criteria.
Section 10506.4, subdivision (c) provides for a fair and impartial bid selection by requiring the University to act in accordance with established procedures and criteria. The publication requirement serves this objective, not only by informing prospective bidders of how the bid selection will be made, but also by establishing a clear, public selection standard that prevents manipulation of the outcome and after-the-fact justifications. In this case, the University did not inform prospective bidders of the primary criterion on which it relied in selecting the bid package — the purported advantage of using fewer contractors to perform the MEP work — and it did not disclose the importance this factor would play in the bid package selection. The University also failed to provide any explanation of how the alternative and individual bid packages would be compared, even after SCI requested this information. The question before us is whether this information, which relates to the selection of bid packages, falls within the "procedures and required criteria" that must be published to prospective bidders under section 10506.4, subdivision (c). We conclude that it does.
On its face, the statute mandates publication of the procedures and criteria necessary to "ensure that all selections are conducted in a fair and impartial manner." (§ 10506.4, subd. (c).) It follows that information regarding the procedure and criteria for selecting bid packages (bid package selection information) must be disclosed to the extent the bid selection would otherwise be unfair or its integrity would be compromised by nondisclosure. We conclude publication of the bid package selection information was necessary to a fair and impartial bid selection in this case. First, the bid selection turned on a criterion that was not disclosed to bidders. The record demonstrates that the University's desire to award as much of the work as possible to a single subcontractor was a threshold criterion it applied in evaluating bids and that this factor was largely determinative of the best value bid. Although the concerns driving the selection of a specific bid package do not directly determine whether a particular bid will prevail, the University's desire for "less contractors . . . coordinating [with] each other" was the decisive factor in determining whether the bids on the individual packages would be considered at all. The failure to disclose this information "[left] bidders in the unfair position of having to guess what [would] satisfy the University's needs." (See Konica, supra, 206 Cal.App.3d at p. 457 [acceptance of a bid deviating from precise bid specifications].) Second, this information was material to the decision of prospective bidders contemplating a bid on BP ALT-1, 2. SCI knew it could be bound by its bids on both BP1 and BP2. But SCI did not bid on an alternative package with the same scope of work, claiming it believed it could be awarded BP1 and BP2, if its combined best value ratios on these packages were less than those on BP ALT-1, 2. Although the University did not prevent or discourage SCI from bidding on the alternative package, SCI lacked material information in deciding which packages to bid: the University's intent to award the work in the fewest packages possible. A contractor is placed at a competitive disadvantage, not only when undisclosed information undermines its ability to bid on a common basis, but also when the nondisclosure is material in deciding whether to submit a bid in the first instance. (See MCM, supra, 66 Cal.App.4th at p. 370 [noting that a bid's deviation from specifications "`must be capable of facilitating corruption or extravagance, or likely to affect the amount of bids or the response of potential bidders'"].) Schram testified that SCI would have bid on the alternative package if it had known how the University would evaluate the packages. For the same reasons, the University's failure to disclose material information about the bid package selection procedure and criteria negatively impacted competition on BP ALT-1, 2. Indeed, SCI's scores on BP1 and BP2 suggest that the University's failure to disclose the procedures and criteria for selecting a bid package may have resulted in a higher cost to the public. (See Domar, supra, 9 Cal.4th at p. 177 ["[P]erhaps the most important goal of competitive bidding is to protect against `insufficient competition to assure that the government gets the most work for the least money.'"].)
At the hearing, Schram's attorney asked him: "Sitting here today[,] is there any doubt in your mind that had you known the way the University was going to evaluate the Combo Bid Package 1 and 2[,] that you would have submitted a bid for Combo Bid Package 1 and 2?" Schram answered: "Yes." Southland construes this testimony as an admission by Schram that he had doubts as to whether he would have bid on BP ALT-1, 2 if he had known how the University was going to evaluate the bid packages. We disagree. In context, Schram's response indicates that he would have bid on the combination package if this information had been disclosed.
The University challenges this construction of section 10506.4, subdivision (c), contending for the first time at oral argument that the phrase "required criteria" refers exclusively to the factors considered in evaluating the qualifications of bidders. (See § 10506.5, subd. (g) [defining "qualifications"].) The University maintains, accordingly, that its intent to award the work to the fewest subcontractors possible, a decisive factor in the bid selection, was not one of the "criteria" required to be disclosed to bidders. Assuming the University has not waived this argument by failing to assert it in the trial court and in the briefing on appeal, we reject the University's interpretation of the statute on its merits. (See Baugh v. Garl (2006) 137 Cal.App.4th 737, 746 [ 40 Cal.Rptr.3d 539] ["Points not raised in the trial court may not be raised for the first time on appeal."]; Lyons v. Chinese Hospital Assn. (2006) 136 Cal.App.4th 1331, 1336, fn. 2 [ 39 Cal.Rptr.3d 550] [waiver of right to raise issue that was not presented until oral argument on appeal].) (8) Nothing in section 10506.4, subdivision (c) limits "required criteria" to the criteria to be used in evaluating bidder qualifications, and the statutory scheme supports a broader reading. First, section 10506.6, subdivision (c)(2)(A) requires the University to "identify[] and describ[e]" in its bid solicitation the "[c]riteria that [it] will consider in evaluating bids." The Legislature could have required identification and description of the "qualifications" to be considered in evaluating "bidders," as it did elsewhere in the statutory scheme, but it did not. (9) (See § 10506.7, subd. (a) [requiring the University to "evaluate the qualifications of the bidders based solely upon the criteria set forth in the solicitation documents"]; City of Port Hueneme v. City of Oxnard (1959) 52 Cal.2d 385, 395 [ 341 P.2d 318], quoting People v. Town of Corte Madera (1950) 97 Cal.App.2d 726, 729 [ 218 P.2d 810] ["`Where a statute, with reference to one subject contains a given provision, the omission of such provision from a similar statute concerning a related subject is significant to show that a different intention existed.'"].) Moreover, in enacting section 10506.4, subdivision (c), the Legislature could have required the University, "[i]n order to implement this method of selection," to simply follow the procedures specified in the statutes and identify the statutory qualification criteria on which it intended to rely. Instead, the Legislature imposed a higher obligation: the adoption and publication of procedures and required criteria "that ensure that all selections are conducted in a fair and impartial manner." (§ 10506.4, subd. (c).)
The University also speculates that SCI decided not to bid on the alternative package because it preferred a contract on BP3 instead of BP2, and having lost this gamble, may not now be relieved of its tactical mistake. Our holding turns, however, on the impact of the University's procedure on the public interest, not the loss to SCI. ( Ghilotti, supra, 45 Cal.App.4th at pp. 908-909 [competitive bidding laws must be viewed in light of the public interest, rather than the private interest of a disappointed bidder].) Moreover, the information the University failed to disclose would have impacted the analysis of any reasonable subcontractor deciding whether to bid on BP ALT-1, 2. SCI was not provided the information necessary to accurately assess the risk that it would not be awarded either BP1 or BP2 and weigh this risk against its alleged preference for BP3.
When a bidder prevailed on more packages than it had guaranteed to perform, the bid solicitation provided that the packages with the least number of bids would be awarded first and the packages with the most bids awarded last. In the event of a tie in the number of bids for a particular package, the packages would be awarded in the following order: BP3, BP5, BP4, BP1, BP2, BP6.
2.
The Procedure Permitted the University to Influence the Bid Selection.
The University's selection procedure also does not satisfy section 10506.4, subdivision (c) because it permitted the University to manipulate the bid selection in favor of or against particular bidders. As Pfeffer of DPR conceded, at the time the Committee selected BP ALT-1, 2, it knew the identity of the bidders on each package and specifically, that if selected, this package would be awarded to either Southland or ACCO. With this information, the Committee could purposefully exclude certain bidders and favor others by simply selecting a bid package. Indeed, in selecting the combination package, the Committee eliminated SCI without considering the best value ratios on the individual packages and effectively insured that Southland or ACCO would be awarded the contract. While Southland and ACCO were two of four bidders on each of the individual packages (BP1, BP2), they were the only two bidders on BP ALT-1, 2. The Committee selecting the bid packages did not need to know bidder identities. The University contends that the bid instructions provide for the announcement of bidder identities on each package to ensure the timeliness of the bids and that this information is necessarily revealed in the prequalification process and BVQ evaluations. Even if these contentions are true, however, there is no requirement that the bid package be selected by the same decision makers that prequalified subcontractors or evaluated the BVQ's.
At the time of its decision, the Committee also had a spreadsheet setting out the figures making up each bid, including each bidder's hourly labor rates for various employees. SCI contends that this information enabled the Committee to determine specifically which bid was Southland's. Substantial evidence does not show the Committee knew what Southland's labor rates were. There is no evidence any Committee member knew which bidder submitted each bid in the initial bidding. Although the record demonstrates that each Committee member received a spreadsheet after the initial bidding that sets out each bidder's hourly rates, the bidders are identified only by letter. Nonetheless, selection of a bid package with knowledge of both the identities of bidders on that package and the bid figures creates at least the appearance of unfairness and a lack of impartiality, particularly since this was a rebid on the project. In any case, disclosure of price information to the Committee selecting the bid packages was not necessary. Pfeffer testified that the Committee selected BP ALT-1, 2 once it determined that it had two responsive bids on that package. Again, this determination could have been made by other agents of DPR and the University.
We recognize that the hearing officer found no evidence of favoritism or bias. But regardless of whether the University acted with an improper motive, in our view, the Committee's knowledge of bidder identities permitted the University to control the results by its selection of the bid packages to be awarded. In requiring the University to adopt procedures that "ensure" that the selection will be impartial, section 10506.4, subdivision (c) suggests it is not enough to simply refrain from favoritism; the University must put affirmative safeguards in place to prevent bias and other arbitrary factors from influencing the bid selection. We also conclude that the University's procedure here created an appearance of favoritism and undermined the integrity of the public bidding process, particularly since DPR had done a substantial amount of work with both Southland and ACCO in the previous five years.
3.
Was the Bid Package Selection a Permissible Use of "Alternates"?
The University contends the bid solicitation expressly allows it to select "alternates," including alternative bid packages, and establishes procedures for alternate selection that ensure a fair and impartial decision. This contention does not alter our conclusion. Section 8.3.2 of the instructions to bidders provides the University "the right to accept Alternates in any order or combination. . . ." as follows: "The opening of Bids and evaluation of Alternates will be conducted in accordance with a procedure that, at University's option, either (i) prescribes, prior to the time of Bid opening, the order in which Alternates will be selected or (ii) prevents, before the determination of the apparent low Bidder has been made, information that would identify any of the Bidders from being revealed to the representative of DPR selecting the Alternates to be used in determining the low Bidder. . . ." Assuming, without deciding, that BP ALT-1, 2 constitutes an "alternate" within the meaning of this provision and that these procedural options are sufficient to ensure a fair and impartial selection, the University did not follow them in this case. The bid instructions did not set out any predetermined criteria for selecting the alternate bid packages, and, as discussed above, the Committee had within its knowledge "information that would identify . . . the [b]idders" at the time it selected the alternative bid package. (See Pozar v. Department of Transportation (1983) 145 Cal.App.3d 269, 272 [ 193 Cal.Rptr. 202] [a public agency must comply with the requirements in its bid solicitation concerning how bid amount is to be calculated].)
SCI contends BP ALT-1, 2 does not constitute an "alternate" within the meaning of section 8.3.2 of the instructions to bidders, as that term is commonly understood to refer to alternate bids within a package, on work to be added or deleted from the scope of a contract. (See 1 Acret et al., Cal. Construction Contracts, Defects, and Litigation (Cont.Ed.Bar 2008) Public Works Contracts: Disputes and Remedies, § 6.20, p. 481 ["An alternate is an alternative process, material, or design for accomplishing a portion of the work. . . ."]; Atkinson v. State Dept. of Engineering (1913) 165 Cal. 699, 703-704 [deductions from the total bid if work is omitted]; Landsborough v. Kelly (1934) 1 Cal.2d 739, 744-745 [ 37 P.2d 93] [alternate materials]; § 10126 ["alternates contemplating additions to, or deletions from, the base bid. . . ."].) SCI maintains further that any ambiguity in the bid instructions must be construed against the University. (See Civ. Code, § 1654 [contract construed against party causing the uncertainty]; Weeshoff Constr. Co. v. Los Angeles County Flood Control Dist. (1979) 88 Cal.App.3d 579, 587-588 [ 152 Cal.Rptr. 19] [written contract construed against the drafter].) No uncertainty or ambiguity existed here. The bid solicitation defines "Alternate" as "a University-proposed or DPR-proposed alternative, as described in the Bidding Documents" and refers to BP ALT-1, 2 as a "new bid package alternate." Schram referred to "single entity versus alternate bids" in his October 2008 e-mail protest. We note, however, that section 8.3.2's first procedural option applies only to alternate bids within a package.
We have found no California decision that addresses alternative bid packages, and we are not aware of any law specifically precluding their use. The use of alternative bid packages is not necessarily at odds with competitive bidding law or its purposes, but we recognize that, like other alternative bid procedures, it offers an easy means of circumventing these requirements and must be closely scrutinized. The California Legislature has determined in a similar context that the selective use of alternative bid procedures may violate public policy, specifically, the purposes of competitive bidding "[t]o eliminate favoritism, fraud, and corruption in the awarding of public contracts" and "[t]o provide all qualified bidders with a fair opportunity to enter the bidding process, thereby stimulating competition in a manner conducive to sound fiscal practices." (§ 100, subds. (d), (c); see Stats. 2000, ch. 292, § 1(b) ["[s]elective use of additive or deductive bid items to determine the lowest responsible bidder"].) To address this concern, the Legislature enacted provisions requiring certain state and local agencies using alternate bids to either specify in the bid solicitation how the lowest bidder will be selected, determine the lowest bidder without considering the alternates, or use a blind selection process. (See §§ 10126 [addressing "alternates contemplating additions to, or deletions from, the base bid. . . ."], 10780.5 [addressing "additive or deductive items"], 20103.8 [same].) Significantly, we find similar measures absent here, namely, either predetermined, published criteria for the bid package selection or a selection process in which price information and bidder identities were not revealed to the Committee before the bid package selection — measures designed to preserve the integrity of the bid selection and assure that "any contract [is let] . . . to the lowest responsible bidder. . . ." (§ 10506.4, subd. (b).)
It is not clear whether SCI contends sections 10126, 10780.5 and 20103.8 impose obligations upon the University. We need not consider this question, in any case, as SCI conceded this point in the protest proceedings. We observe, however, that section 10780.5 applies specifically to California State University, section 20103.8 applies only to local agencies, and section 10126 does not apply in this case, as it addresses "additions to, or deletions from, the base bid. . . ."
We conclude the contract with Southland must be set aside, as the University's violations of the competitive bidding statutes were not merely "technical or nonsubstantive." (§ 10520.) (sect 10520; see ( Ghilotti Construction Co. v. City of Richmond (1996) 45 Cal.App.4th 897, 908 [setting aside a contract, not on minor technicalities, but when the deviation is capable of facilitating corruption or extravagance, or is likely to affect the amount of bids or the response of potential bidders]; see also Konica Business Machines U.S.A., Inc. v. Regents of University of California (1988) 206 Cal.App.3d 449, 456-457 [contract set aside for failure to strictly comply with bidding requirements]; Charles L. Harney, Inc. v. Durkee (1951) 107 Cal.App.2d 570, 578 [statute requiring the letting of contracts by competitive bidding is mandatory, and a contract made without compliance is void and unenforceable as in excess of the agency's power].) They undermined the goal of "stimulating competition in a manner conducive to sound fiscal practices" (§ 100, subd. (c)), and compromised the integrity of the selection process by failing to ensure procedural and substantive fairness.
Neither Southland nor the University contends otherwise. Each confines its arguments to whether the violations occurred in the first instance.
DISPOSITION
Following oral argument and submission of the cause for decision, the parties advised the court that they had reached a settlement, "conditioned upon (1) this court granting a stay of this matter; (2) the nonissuance of a decision on the appeal to allow the settlement to move forward; and (3) approval by the Regents [of the University] on September 15, 2010." Because this case presents issues of continuing public interest that are likely to recur, we decline to order a stay of this matter and, in our discretion, decide the appeal on the merits. (Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2009) § 6:125.1; Cadence Design Systems, Inc. v. Avant! Corp. (2002) 29 Cal.4th 215, 218, fn. 2; Baluyut v. Superior Court (1996) 12 Cal.4th 826, 829, fn. 3.)
The judgment is reversed. The matter is remanded to the trial court with directions to enter a new and different judgment granting the petition, issue a writ of mandate setting aside the subcontract between Southland and DPR, and conduct such further proceedings in this matter as it may deem advisable and within its jurisdiction, in a manner consistent with the views expressed in this opinion. Costs are awarded to SCI.
The court expresses no opinion as to what extent the University may be required to conduct a rebid for the mechanical and plumbing work on the Energy Center and Outpatient Building.
Needham, J., and Bruiniers, J., concurred.
Petitions for a rehearing were denied September 22, 2010, and the opinion was modified to read as printed above. The petition of defendants and respondents for review by the Supreme Court was denied December 15, 2010. S187843.