Filed 2/15/24 Lunday-Thagard Co. v. City of Los Angeles CA2/3
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on
opinions not certified for publication or ordered published, except as specified by rule
8.1115(b). This opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
LUNDAY-THAGARD COMPANY dba B307777
WORLD OIL REFINING,
(Los Angeles County
Plaintiff and Appellant, Super. Ct. No. 19STCP01684)
v.
CITY OF LOS ANGELES,
Defendant and Appellant.
APPEAL from a judgment and order of the Superior Court
of Los Angeles County, James Chalfant, Judge. Affirmed in part
and reversed in part with directions.
Michael N. Feuer and Hydee Feldstein Soto,
City Attorneys, Denise C. Mills, Chief Deputy City Attorney,
Scott Marcus, Chief Assistant City Attorney, Blithe S. Bock,
Managing Assistant City Attorney, and Michael M. Walsh,
Deputy City Attorney, for Defendant and Appellant.
Jeffer, Mangels, Butler & Mitchell, Benjamin M. Reznik
and Mark Riera for Plaintiff and Appellant.
‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗
The City of Los Angeles (City) owns and operates asphalt
plants that manufacture asphalt concrete to pave and repair the
City’s streets. In 2018, the City sought bids on a contract to
supply it with asphalt binder, an ingredient of asphalt concrete.
The City received two bids—from San Joaquin Refining Co., Inc.
(SJR) and Lunday-Thagard Company dba World Oil Refining
(LTC). The City awarded the contract to SJR after concluding
that LTC’s asphalt binder did not conform to the City’s
specifications.
LTC filed a petition for writ of mandate to compel the City
to vacate the contract award to SJR and award the contract to
LTC. LTC urged that it was the lowest monetary bidder, its
asphalt binder substantially complied with the bid specifications,
and SJR’s bid did not comply with the specifications. LTC
further urged that the City showed repeated and transparent
favoritism to SJR, which had supplied asphalt binder to the City
for the previous 25 years.
The trial court found that LTC’s binder did not
substantially comply with the bid specifications and the City did
not favor SJR. It therefore concluded that LTC was not entitled
to the contract award. The court further concluded, however,
that the City erred in awarding the contract to SJR because
SJR’s bid also materially failed to comply with the bid
specifications. The court therefore issued a judgment directing
the issuance of a writ of mandate requiring the City to vacate its
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award of the contract to SJR, and it subsequently denied LTC’s
motion for attorney fees. Both the City and LTC appealed from
the judgment granting the writ, and LTC appealed from the
order denying its motion for attorney fees.
We conclude that the trial court erred by ordering the City
to vacate the contract award to SJR. SJR’s asphalt binder fully
complied with the bid specifications, and although there were
some errors in its bid submission, those errors were not material.
In contrast, LTC’s binder did not comply with the bid
specifications, and substantial evidence supported the City’s
conclusion that the deviation was material. Accordingly, we
reverse the judgment insofar as it directed issuance of a writ of
mandate requiring the City to vacate the contract award to SJR,
and otherwise affirm. We further affirm the order denying LTC’s
motion for attorney fees.
FACTUAL AND PROCEDURAL BACKGROUND
I. Background.
The City owns and operates asphalt plants in Los Angeles
and North Hollywood that manufacture asphalt concrete to pave
and repair the City’s approximately 28,000 lane miles of paved
streets. To supply these plants, the City purchases asphalt
binder, a petroleum-based material that holds aggregate together
to create asphalt concrete. Asphalt binder is viscous at high
temperatures but is an elastic solid at lower temperatures.
The Supply Chain Services Division (Supply Division) of
the City’s Department of General Services fulfills the City’s
procurement needs. The Roads and Highways Section of the
City’s Standards Division develops standards for City-purchased
paving materials and for testing construction and engineering
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materials. It also operates materials testing labs certified by the
American Association of State Transportation and Highway
Officials (AASTHO) with regularly calibrated equipment. Those
labs perform approximately 148,000 tests per year in support of
the City’s Pavement Preservation Program, which maintains City
roads and highways. Specifically, the City’s Asphalt Concrete
Lab analyzes asphalt concrete manufactured by the City
internally or purchased from third parties by verifying the
amount of asphalt binder mixed with the aggregate, testing the
asphalt concrete to ensure it meets the City’s standards, and
conducting field tests of paved streets. Separately, the City’s
Asphalt Binder Lab analyzes asphalt binder and conducts tests to
ensure that the asphalt binder meets the City’s performance
standards and specifications. The lab conducts numerous tests to
determine the rheological characteristics of the binder at high
and low temperatures and the binder’s resistance to
deformation.1
Since about the early 1990’s, the City has purchased
asphalt binder from SJR. Before the present dispute, SJR
provided asphalt binder to the City under a contract executed in
2011 that expired in January 2019.
1 Rheology is the branch of science that deals with the
deformation and flow of matter, especially the flow of liquids and
the plastic flow of solids. ( [as of Feb. 15, 2024],
archived at .)
4
II. The 2018 request for quotation.
In November 2018, the City issued a request for quotation
(RFQ)2 for two kinds of asphalt binder: one for use on roads with
light traffic volume such as residential streets (light binder), and
the other for use on roads with higher traffic volume, including
bus and truck traffic (medium binder).3 The initial bid
submission date was December 18, 2018. The relevant portions
of the RFQ are as follows:
Contract period: Bids were requested for furnishing “the
annual requirements of the City” from January 1, 2019 (or the
contract award date) through December 31, 2020. The City
reserved the right to renew the contract for five additional one-
year periods on the same terms and conditions as the original
contract and to terminate the contract “for [the City’s]
convenience.”
Bids accepted only from manufacturers: “[T]o ensure that
[the City] receives a uniform quality and an uninterrupted supply
of the delivered product, bids will be considered only from those
firms who are actual producers, or manufactur[ers] of [asphalt
binder] of the grades specified.”
Technical specifications: Bids “shall meet the . . .
technological and performance requirements” specified in an
attachment to the RFQ. The attachment specified the values
2 The RFQ is sometimes referred to as a request for bid
(RFB).
3 The RFQ contained seven line items. The first five
requested specific light and medium asphalt binders to be
delivered to the City’s two asphalt plants, and the last two line
items addressed an oil spill recovery fee and hauling charges.
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within which the binder was required to perform on nine tests,
including of rotational viscosity, stiffness, flash point, and
dynamic shear.
Product samples: “Prior to bid close date bidders will be
required to submit 1 gallon container sample of product(s) quoted
for evaluation . . . . [¶] Failure to submit sample 14 days
(excluding holidays and weekends) prior to bid opening . . . will
cause your Quotation to be deemed non-responsive.”
Selection criteria: The City was permitted to make a
combined award of all items completely to one bidder or may
award separate items or groups of items to various bidders. The
award “will be to the bidder(s) deemed to offer the material
and/or service at the lowest bid price, lowest ultimate cost, or best
overall value to the City based on responsive quotation(s)
meeting the specifications set forth in the RFQ.”
Deviations from City’s specifications: “Quotations will be
considered for . . . materials deviating from the specifications if
such products comply substantially with the specifications,” but
each deviation “must be stated in a letter attached to your
quotation.” Failure to submit or disclose deviations from the
specifications “will make your Quotation non-responsive.”
City discretion to determine compliance and to waive
administrative irregularities: The City reserved the right, at its
sole discretion, “to waive minor administrative irregularities
contained in any Quotation,” “to reject any or all Quotations,” and
“to reject unapproved alternate Quotations.” The City “shall be
the sole determiner of substantial compliance with the
specifications.”
Business Inclusion Program (BIP) mandatory outreach: “It
is the policy of the City of Los Angeles to provide [businesses
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owned by underrepresented groups (BIP contractors)] an equal
opportunity to participate in the performance of City contracts.
Bidders shall assist the City in implementing this policy by
taking all reasonable steps to ensure that all available business
enterprises, including [BIP contractors] have an equal
opportunity to compete for and participate in City contracts. . . .
[F]ailure to complete the Outreach as directed in the BIP
Requirements will render the bid non-responsive and will result
in its rejection.”
Mandatory pre-bid meeting: “A Mandatory Pre-Bid
meeting will be held to receive questions from prospective bidders
regarding the RFQ/RFB, and for prospective bidders to obtain
additional information regarding the City’s contracting and
legislated compliance requirements.” An employee of the bidder’s
company “must attend the pre-bid meeting scheduled for this
project.”4
III. Pre-bid meeting, RFQ amendments, and bid
submissions.
Two potential bidders, LTC and Horizons Construction
Company, attended the pre-bid meeting on November 27, 2018.
SJR’s asphalt marketing manager, Steve Hollis, contacted the
City to ask whether the meeting could be postponed because he
had injured his back and would not be able to attend. A city
representative told Hollis the meeting could not be postponed,
and thus no SJR representative was at the meeting.
4 The City contends, and LTC does not dispute, that the only
reason the pre-bid meeting was mandatory was to satisfy the BIP
requirements.
7
At the November 27 meeting, LTC’s representative,
Austin Miller, asked why BIP outreach was required when the
RFQ required bidders to manufacture the asphalt binder
themselves, not to purchase it from subcontractors. City
Procurement Analyst Daisy Curaming communicated this
question to her supervisors, who agreed that BIP outreach was
not appropriate for this contract. The City therefore asked the
mayor’s officer to waive the BIP outreach requirement, and the
mayor’s office agreed to do so on December 5, 2018.
The City issued two addenda to the RFQ. On December 3,
2018, it issued Addendum No. 1, which extended the bid closing
date nine days, from December 18, 2018 to December 27, 2018.
The extension of the bid closing date also extended the deadlines
for submitting product samples. On December 6, 2018, after
receiving approval from the mayor’s office, the City issued
Addendum No. 2, which waived mandatory BIP outreach,
including attendance at the pre-bid meeting.
Only SJR and LTC submitted bids and product samples to
the City. SJR bid on all seven contract line items but submitted
its samples six days late, on December 12, 2018. LTC submitted
its sample on time, but it bid only on line items 2, 4, 6, and 7
(medium binder, oil spill recovery fee, and hauling charges). LTC
bid $7,956,000 on line items 2, 4, 6, and 7, and SJR bid
$7,331,894 on line items 1 through 7.
SJR’s samples passed all required tests and met the City’s
specifications and performance requirements. LTC’s sample
failed the dynamic shear rheometer (DSR) test, which measured
the sample’s ability to withstand rutting and other pavement
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deterioration.5 Specifically, the City’s specifications required that
the medium binder have a rutting resistance parameter between
1.50 and 3.00 kilopascals (kPa), and LTC’s binder tested below
that range at 1.47 kPa. LTC did not disclose this deviation from
the specifications or request a modification of the specifications,
and the City deemed the failure a material deviation after twice
retesting the sample to verify the DSR values. In comparison,
SJR’s sample measured 2.00 kPa on the DSR test.
LTC’s and SJR’s bids both contained administrative errors
the City deemed inconsequential. Specifically, neither party
provided the correct corporate signatures; LTC priced its bid
based on a December 2018 price index, rather than a January
2019 index; and SJR submitted two incomplete forms.
IV. Contract award; LTC’s protest and request for
appeal.
On December 28, 2018, the Supply Division emailed a
summary of the submitted bids to the Roads and Highways
Section and the Bureau of Street Services. The summary noted
that LTC bid only on the medium binder and its sample did not
pass the performance standards test, while SJR bid on all line
items and its sample passed all required tests. The Supply
Division therefore recommended that SJR be awarded the
contract. On February 1, 2019, the City awarded SJR the
contract.
LTC protested the award and requested an appeal hearing.
The City denied LTC’s request for an appeal but met with LTC’s
5 A dynamic shear rheometer, or DSR, is a machine that
tests asphalt binders’ resistance to deformation by placing the
binders under repeated stress at various temperatures.
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attorneys to discuss the City’s analysis of the bid pricing. LTC
contended the City’s pricing calculations were incorrect because
LTC’s bid was based on a December 2018 index and SJR’s bid
was based on a January 2019 index; if the City applied the
January 2019 index to LTC’s bid, its bid was lower than SJR’s.
LTC also contended the City’s specifications for the medium
binder were too restrictive, and SJR’s bid was noncompliant
because it had not attended the pre-bid meeting or timely
submitted binder samples.
The Supply Division determined that LTC’s claims had
sufficient merit to reopen the bidding. LTC rejected the rebid
and requested that it be awarded the contract.
The City conducted further internal meetings and
ultimately concluded that the price difference between LTC’s and
SJR’s bids was irrelevant because LTC’s product did not comply
with the City’s specifications. It advised LTC that several of its
contentions had merit—namely, SJR submitted its samples late,
and LTC’s bid price was lower when calculated using the proper
index. However, the City disagreed that its specifications were
unduly restrictive, noting that they were “based on the City’s
needs and [have] been the basis for the City’s minimum [asphalt
binder requirements] for the last twenty-five years.” Further, the
City said Addendum No. 2 eliminated the pre-bid meeting
requirement, and the City deemed SJR’s late sample submission
a minor administrative deviation that it waived for the City’s
benefit. In short, although LTC “may have offered the lowest
monetary price” on medium binder, LTC’s bid “did not meet the
minimum specifications set forth in the solicitation and is still
deemed non-responsive.” Therefore, “upon reconsideration of all
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the information that has been brought to light, the City will not
take any additional recourse.”
V. LTC’s writ petition.
LTC filed a petition for writ of mandate to have the award
to SJR set aside and the contract awarded to LTC. LTC also
asserted causes of action for promissory estoppel, ultra vires acts,
and declaratory relief.
LTC’s opening brief contended that its product sample
materially complied with the bid specifications because it passed
all performance tests except the DSR test, which it failed only
trivially. Further, the City was required to reject SJR’s bid
because SJR failed to attend the mandatory pre-bid meeting,
submitted its samples after the deadline, and submitted two
incomplete forms. LTC therefore requested that the court vacate
the award to SJR and direct award of the contract to LTC.
In support of its petition, LTC submitted the declaration of
Dr. Gary Hicks, who opined that LTC’s product sample
substantially complied with the City’s requirements because the
difference between 1.47 and 1.50 kPa on the DSR test was
negligible and would not impact the binder’s performance.
LTC also submitted the declaration of the owner of an
independent testing laboratory who opined: “[DSR] test results
by a single operator using the same equipment within 6.4% of one
another are not considered suspect. . . . [¶] . . . Accordingly the
estimated precision of any two DSR tests performed . . . is at best
6.4%. Here, [LTC’s] product sample testing l.47/1.50 G*/SIN0
(kPa) is well within the expected variation of precision built into
the [applicable] test.”
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VI. City’s opposition to writ petition.
The City and SJR opposed LTC’s writ petition. The City
contended that LTC’s bid was nonresponsive because its sample
did not meet the City’s specifications and its bid did not disclose
the deviation. Further, while SJR’s bid contained minor
irregularities and administrative errors—namely, SJR submitted
its product samples late, and its bid packet was missing two
corporate signatures and included two incomplete forms—these
were minor administrative errors that the City waived for its
benefit. The City urged the trial court to deny the writ petition
because substantial evidence supported the City’s determination
that LTC’s bid was nonresponsive, and the award of the contract
to SJR complied with the City’s charter and administrative code.
In opposition to the writ petition, the City submitted the
declaration of Ricardo Villacorta, head of the Roads and
Highways Section, who said that the City deemed LTC’s failure
to meet the DSR requirement a material deviation from the
specifications. Villacorta explained: “RHS [Roads and Highways
Section] developed the Specification based on extensive testing,
research, data, experience with local materials, and knowledge of
what the City needs to manufacture durable and long-lasting
asphalt concrete that can withstand the City’s particular loads
and traffic conditions. . . . [¶] The difference of G*/Sin (δ) [the
rutting resistance parameter] between 1.47 kPa and 1.50 kPa
may seem small numerically, but the deviation is significant for
determining the material’s resistance to permanent deformation,
rutting and other forms of deterioration. RHS established
specified ranges in the Specification to allow test results to
deviate a certain amount above and below a target value. The
target DSR value for . . . medium binder is not 1.50 kPa, which is
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the minimum value at which a binder will be considered. The
edges of the range (1.50kPa and 3.00kPa) represent the
maximum distance away from the target value, beyond which the
City can no longer accept test results. [¶] Based on RHS’s
extensive research, testing and experience, the use of LTC’s
asphalt binder would result in rutting and increased incidents of
pavement deformation leading to overall shorter pavement
lifespan. This deviation would result in more frequent pavement
repairs and construction, and the use of the binder would reduce
public safety because rutting and deformations can cause an
increase in traffic accidents.”
Villacorta further declared that the City did not consider
SJR’s late delivery of its binder sample to be a material deviation
from the specifications. He explained that the RFQ required
bidders to provide product samples at least fourteen days
(excluding weekends and holidays) before the bid closing date to
give the City enough time to complete tests even if many
companies submitted bids and samples. Because the City
received samples from only LTC and SJR, it was able to test all
samples well prior to the bid closing date.
Villacorta recommended that the contract be awarded to
SJR because LTC bid on only the medium binder and its sample
did not meet the specifications, while SJR bid on both the light
and medium binder, its samples passed all performance tests,
and SJR had been a reliable supplier of binders meeting the
City’s specifications.
Melissa Yusilon, Director of the Supply Chain Division,
stated in a declaration that City contracts are awarded to the
lowest responsive and responsible bidder. A “responsive” bidder
is one whose bid fully conforms in all material aspects to all bid
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requirements, and a “responsible” bidder is one who is fully
capable of meeting all the requirements of the bid and
subsequent award. Bids are analyzed using the methods set
forth in the City Charter—namely, price analysis, cost analysis,
and/or product life-cycle analysis. The City reserves the right to
award a contract to the lowest responsive and responsible bidder
either as a whole or by line item if a split award will result in a
significant cost savings. Typically, the City will split a contract
between two bidders only if the cost savings is at least 15 percent
or $15,000, whichever is greater.
VII. Trial court’s order.
The trial court granted the petition in part on June 23,
2020. Its written decision concluded as follows:
Substantial evidence supported the City’s assertion that
LTC’s bid was non-responsive because its sample did not pass the
DSR test. LTC’s sample was tested three times on equipment
that was calibrated less than a few weeks before the tests
occurred, and each time LTC’s sample failed to meet the
specifications. Based on testing and experience, LTC’s asphalt
binder would result in rutting and increased incidents of
pavement deformation leading to overall shorter pavement
lifespan. The City deemed LTC’s failure to pass the performance
standard a material deviation from the specifications.
LTC’s attempt to challenge the reliability of the City’s tests
was not persuasive. Evidence Code section 664 creates a
presumption that an official duty has been regularly performed.
Once official test records are submitted, the burden shifts to the
opposing party to demonstrate that the test was not properly
performed. LTC presented no evidence that the employee who
performed the DSR test did not do so properly or that the
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rheometer was improperly calibrated. Further, LTC had an
opportunity to perform tests on its own sample but admitted that
it did not do so, and LTC’s chief operating officer admitted that
he did not know if LTC was capable of manufacturing medium
asphalt binder that would meet the City’s specifications.
LTC also had the opportunity to request a modification of
the specifications before the bid closed, but it did not do so. It
further failed to disclose its product’s deviation from the
specifications through a letter attached to its bid proposal, which
the RFQ required it to do. And, the City had the discretion to
reject LTC’s product sample for failing to meet the specifications,
regardless of how small the deviation was. The City was not
required to accept LTC’s assertion that its deviation was
inconsequential, which was controverted by the City’s research.
The City’s decision that the DSR result is a material failure
rendering LTC’s bid nonresponsive is dispositive.
However, SJR’s bid was also nonresponsive because SJR
failed to attend the pre-bid meeting. Because the RFQ said the
pre-bid meeting was mandatory, the City did not have the power
to waive it. The City also could not waive SJR’s late submission
of its binder sample because the RFQ stated that a bid would be
“ ‘deemed nonresponsive’ ” if a sample was not timely submitted.
Moreover, “SJR’s failure to attend the mandatory meeting at
least arguably gave it a competitive advantage because LTC
wasted time and effort in attending, and SJR’s failure to timely
submit a sample plainly gave it a competitive advantage over
LTC. Nor did the waiver of these obligations benefit the City.”
Finally, the court rejected LTC’s claim of improper
favoritism. The court found: “The City gave SJR no special
treatment in the pre-bid meeting process. When SJR Manager
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Hollis asked for a postponement of the pre-bid BIP meeting
because he had injured his back and could not attend, his request
was denied and SJR was told it would not be able to bid. SJR
never lobbied for or was consulted with respect to the waiver of
the mandatory BIP outreach. [¶] Nor did SJR receive favoritism
in the post-award and appeal process. The Supply Division met
with LTC’s attorneys . . . on March 11, 2019. SJR did not
participate. At the end of the meeting, the Supply Division
agreed to follow-up with RHS regarding the Specification and the
timing of SJR’s binder sample, as well as to assess LTC’s
contention that the use of pricing indexes from different months
would reduce LTC’s total bid. After the meeting, the City
admitted that [the Department of General Services] erroneously
tabulated the bids and that LTC was the lowest monetary bidder,
albeit not the lowest responsive bidder. On March 14, 2019, the
Purchasing Agent and Supply Chain Director Yusilon ruled that
LTC’s appeal [was] valid and had merit. The City subsequently
reported that it would cancel and re-bid the Contract. Only when
LTC’s counsel objected to the rebid did the City re-evaluate the
award. [¶] . . . [¶] In sum, there is no evidence of favoritism
toward SJR or corruption in the bid process.”
Based on the foregoing, the trial court found that the City
“had a mandatory duty to reject SJR’s bid as nonresponsive.”
However, “the City did not have a mandatory duty to award the
Contract to LTC, as LTC’s bid also was non-responsive.”
On August 12, 2020, the trial court entered judgment
granting a writ of mandate and denying or dismissing LTC’s
remaining causes of action. On August 20, 2020, the court issued
a writ of mandate directing the City to vacate its contract award
16
to SJR. The writ did not direct the award of the contract to LTC,
and the City was permitted to rebid the contract at its discretion.
VIII. LTC’s motion for attorney fees; notices of appeal.
LTC moved for an award of attorney fees of $1,008,992
pursuant to Code of Civil Procedure section 1021.5. The trial
court denied the motion, concluding that while LTC was a
successful party, it did not vindicate an important right affecting
the public interest.
The City and LTC appealed from the judgment, and LTC
appealed from the order denying the motion for attorney fees.6
STANDARD OF REVIEW
Judicial review of a public agency decision is obtained
through a petition for writ of ordinary or administrative
mandate. (Code Civ. Proc., §§ 1085, 1094.5.) Quasi-legislative
6 On October 12, 2022, LTC filed in this court a request for
judicial notice of documents relating to a new RFQ issued by the
City after the trial court directed it to vacate the contract award
to SJR. The motion is denied. “ ‘Reviewing courts generally do
not take judicial notice of evidence not presented to the trial
court’ absent exceptional circumstances. [Citation.] ‘It is an
elementary rule of appellate procedure that, when reviewing the
correctness of a trial court’s judgment, an appellate court will
consider only matters which were part of the record at the time
the judgment was entered.’ ” (Haworth v. Superior Court (2010)
50 Cal.4th 372, 379, fn. 2; see also Vons Companies, Inc. v.
Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444, fn. 3 [same].) The
documents of which LTC seeks judicial notice all post-date the
judgment, and LTC has not identified any exceptional
circumstances that would justify their consideration.
Accordingly, we decline to judicially notice the documents.
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acts are reviewed by ordinary mandate, and quasi-judicial acts
are reviewed by administrative mandate. (McGill v. Regents of
University of California (1996) 44 Cal.App.4th 1776, 1785
(McGill); Western States Petroleum Assn. v. Superior Court (1995)
9 Cal.4th 559, 566–567.)
The award of a public contract is challenged by a petition
for writ of ordinary mandate. (See Konica Business Machines
U.S.A., Inc. v. Regents of University of California (1988)
206 Cal.App.3d 449, 451 (Konica).) In such an action, the
petitioner has the burden to show that the public entity abused
its discretion by awarding the contract to the challenged bidder.
(Ibid.) “ ‘ “Mandamus is an appropriate remedy to compel the
exercise of discretion by a government agency, but does not lie to
control the exercise of discretion unless under the facts,
discretion can only be exercised in one way. [Citations.]”
[Citation.]’ (MCM Construction, Inc. v. City and County of San
Francisco (1998) 66 Cal.App.4th 359, 368 (MCM); see Ghilotti
Construction Co. v. City of Richmond (1996) 45 Cal.App.4th 897,
900 (Ghilotti).)” (Bay Cities Paving & Grading, Inc. v. City of San
Leandro (2014) 223 Cal.App.4th 1181, 1187 (Bay Cities).)
Well-established principles govern an appeal from a writ
arising out of the award of a public contract. (Cypress Security,
LLC v. City and County of San Francisco (2010) 184 Cal.App.4th
1003, 1010.) “ ‘ “Our review is limited to an examination of the
proceedings to determine whether the [public entity’s] actions
were arbitrary, capricious, entirely lacking in evidentiary support
or inconsistent with proper procedure.” ’ ” (Ibid.) “ ‘In
determining these issues, we defer to the [public entity’s] factual
findings when they are supported by substantial evidence.
[Citation.] To the extent our analysis requires us to decide
18
questions of statutory interpretation or determine whether the
[public entity’s] actions violate applicable law, we exercise our
independent judgment. [Citations]’ (Schram Construction, Inc.
v. Regents of University of California (2010) 187 Cal.App.4th
1040, 1051–1052, fn. omitted [Schram].)” (Eel River Disposal &
Resource Recovery, Inc. v. County of Humboldt (2013)
221 Cal.App.4th 209, 224 (Eel River).)
“ ‘With respect to these questions the trial and appellate
courts perform essentially the same function, and the conclusions
of the trial court are not conclusive on appeal. [Citations.]’
[Citation.] The only exception is where there are foundational
matters of fact as to which the trial court’s findings could be
conclusive on appeal, where supported by substantial evidence.”
(Mike Moore’s 24-Hour Towing v. City of San Diego (1996)
45 Cal.App.4th 1294, 1303.)
LTC urges that this court should review for substantial
evidence the findings of the trial court—not those of the City—
but the cases LTC cites do not support this proposition. Only two
cases LTC cites concern public contracts; both hold, as we do,
that we generally review for substantial evidence the findings of
the public entity, not those of the trial court. (See Ghilotti, supra,
45 Cal.App.4th at pp. 903–904 [“In reviewing the award of a
public contract, our function is the same as the trial court’s—to
decide whether the public entity’s decision is supported by
substantial evidence”]; DeSilva Gates Construction, LP v.
Department of Transportation (2015) 242 Cal.App.4th 1409,
1417–1418 (DeSilva) [same].)7 The remaining cases LTC cites
7 Contrary to LTC’s contention, DeSilva does not hold that
appellate courts defer to a public entity’s findings only if the
19
are not public contract cases and thus do not guide our review
here.
We note, moreover, that LTC selectively quotes the
standard of review articulated by some of the cases it cites. For
example, LTC quotes Taylor Bus Service, Inc. v. San Diego Bd. of
Education (1987) 195 Cal.App.3d 1331, 1340 for the proposition
that on appeal from the denial of a writ petition, the trial court’s
findings on foundational matters of fact are conclusive. The full
statement, in context, is as follows: “In an appeal from the denial
of a petition for a traditional writ of mandate, the trial court’s
findings on foundational matters of fact are conclusive. However,
with regard to the ultimate question of whether the District or
agencies’ decision was supported by substantial evidence, the
function of the appellate court is the same as that of the trial
court, that is, to review the administrative decision to determine
whether it is supported by substantial evidence. This court then
reviews the findings and actions of the District or agencies and
not the findings of the trial court.” (Ibid., italics added.) The
court continues: “In a mandamus action arising under Code of
Civil Procedure section 1085, judicial review is limited to an
examination of the proceedings before the agency to determine
whether its actions have been arbitrary or capricious, entirely
lacking in evidentiary support, or whether it failed to follow
proper procedures or failed to give notice as required by law.
public entity held a hearing at which the petitioner had the
opportunity to present evidence. At the relevant pages, DeSilva
held only that the court would not defer to the agency’s findings
because they were based on an interpretation of a statute—that
is, on an interpretation of law—not on the resolution of disputed
facts. (DeSilva, supra, 242 Cal.App.4th at pp. 1420–1421.)
20
[Citations.] [¶] In determining whether evidentiary support is
present in a traditional mandamus action, the applicable
standard of review is the substantial evidence test. [Citations.]
The court may not reweigh the evidence and must view the
evidence in the light most favorable to the District’s actions and
indulge all reasonable inferences in support thereof.” (Ibid.)
CITY’S APPEAL
In its appeal, the City contends the trial court erred by
ordering it to set aside the contract award to SJR because the
City had discretion to eliminate the BIP outreach requirements,
including mandatory attendance at the pre-bid meeting, and to
waive SJR’s late submission of its binder samples. As we discuss,
the City is correct.
I. Governing law.
A. City Charter and Administrative Code.
The City is a charter city, and thus the Los Angeles City
Charter (Charter) and Los Angeles Administrative Code (LAAC)
govern its power to award City contracts. (Michael Leslie
Productions, Inc. v. City of Los Angeles (2012) 207 Cal.App.4th
1011, 1021; R & A Vending Services, Inc. v. City of Los Angeles
(1985) 172 Cal.App.3d 1188, 1191.) Under the LAAC, all
purchases of materials and supplies are made by a City
purchasing agent, who “shall . . . prepare and adopt written
standards and standard specifications” and “prescribe the
procedure for preparation and approval of specifications upon
which bids are asked.” (Id., §§ 9.1, 9.2, 9.19.) Such specifications
“shall be definite and certain and shall permit competition” (id.,
§ 9.21(c)), and every notice of bid request shall be publicly
available (id., § 10.15(c)). The notice “shall specify the time and
21
place such bids or proposals will be received,” and bidders “may
be required to submit with their bids or proposals detailed
specifications of any item to be furnished.” (Id., § 10.15(c).)
Under the Charter, competitively bid contracts shall be
awarded “to the lowest responsive and responsible bidder.”
(Charter, § 371(a).) This determination “may be made on the
basis of the lowest ultimate cost,” and “[w]here the items are to
constitute a part of a larger project or undertaking, consideration
may be given to the effect on the aggregate ultimate cost of the
project or undertaking.” (Ibid.; see also LAAC, § 10.15(f))
[same].) In offering contracts for bid, the City “shall reserve the
right to reject any and all bids or proposals and to waive any
informality in the bid or proposal when to do so would be to the
advantage of the City.” (Id., § 371(c); see also LAAC, § 10.15(c)
[same].)
B. Scope of City’s discretion to waive deviations
from contract specifications.
A public contract bid is “responsive” if it fully conforms to
the public agency’s specifications. (DeSilva, supra,
242 Cal.App.4th at p. 1422; Bay Cities, supra, 223 Cal.App.4th at
pp. 1188–1189; see also D.H. Williams Construction, Inc. v. Clovis
Unified School Dist. (2007) 146 Cal.App.4th 757, 764 [bid is
responsive if it “ ‘promises to do what the bidding instructions
demand’ ”].) A public entity has discretion to accept a bid that,
while not strictly responsive, “ ‘ “ ‘substantially conforms’ ” ’ ” to
the bid request so long as the variance “ ‘ “cannot have affected
the amount of the bid or given the bidder an advantage or benefit
not allowed other bidders or, in other words, if the variance is
inconsequential. [Citations.]’ ” ’ (Valley Crest [Landscape, Inc. v.
City Council (1996)] 41 Cal.App.4th [1432,] 1440–1441 [(Valley
22
Crest)], quoting Konica[, supra,] 206 Cal.App.3d [at p.] 454.)”
(DeSilva, at pp. 1422–1423.) Stated differently, a public entity
may waive a deviation from the specifications that is
“inconsequential”—that is, it “ ‘neither give[s] the bidder an
unfair competitive advantage nor otherwise defeat[s] the goals of
insuring economy and preventing corruption in the public
contracting process.’ ” (Bay Cities, supra, 223 Cal.App.4th at
p. 1189.) These considerations “ ‘must be evaluated from a
practical rather than a hypothetical standpoint, with reference to
the factual circumstances of the case. They must also be viewed
in light of the public interest, rather than the private interest of a
disappointed bidder. “It certainly would amount to a disservice
to the public if a losing bidder were to be permitted to comb
through the bid proposal or license application of the low bidder
after the fact, [and] cancel the low bid on minor technicalities,
with the hope of securing acceptance of his, a higher bid. . . .” ’
(Ghilotti, supra, 45 Cal.App.4th pp. 908–909.)” (Bay Cities, at
p. 1189.) Whether a bid varies substantially from the
specifications “ ‘ “is a question of fact.” ’ ” (Ibid., quoting Ghilotti,
at p. 906; see also MCM, supra, 66 Cal.App.4th at p. 375.)
II. The City did not abuse its discretion by eliminating
the mandatory BIP outreach requirements from the
RFQ, including mandatory attendance at the pre-bid
BIP meeting.
LTC contended below, and the trial court agreed, that the
City lacked discretion to excuse SJR’s failure to attend the pre-
bid meeting because the RFQ said attendance was “mandatory.”
The City urges this finding was erroneous because it was
permitted to, and did, remove the entirety of the BIP requirement
through Addendum No. 2.
23
The City’s authority to eliminate the BIP requirement
through an addendum, as well as the legal effect of Addendum
No. 2, are questions of law that we review de novo. (Eel River,
supra, 221 Cal.App.4th at p. 224.) For the reasons that follow,
we conclude that the City had discretion to eliminate the
mandatory BIP requirements from the RFQ, including
mandatory attendance at the pre-bid meeting. Thus, as a matter
of law, SJR’s failure to attend the pre-bid meeting did not render
its bid nonresponsive.
A. Background.
By executive action, the mayor created the Business
Inclusion Program, or BIP, which requires general contractors
bidding on City contracts to do outreach to subcontractors owned
by underrepresented groups. (See generally Domar Electric, Inc.
v. City of Los Angeles (1994) 9 Cal.4th 161, 165–168.) There are
seven BIP compliance requirements (or “indicators”) which
include attending a pre-bid meeting to learn about the BIP
program, sending bidding invitations to potential BIP
subcontractors, providing interested potential subcontractors
with plans and specifications, and evaluating in good faith all
bids or proposals submitted by interested BIP subcontractors.
A City Procurement Analyst may request a waiver of BIP
compliance requirements if no subcontracting opportunities are
available under a contract. If an RFQ has not yet been issued, a
BIP waiver request may be granted by a Supply Division
Director; after an RFQ has been issued, a BIP waiver request
may be approved only by the mayor’s office.
Here, the City did not determine until after the RFQ was
issued that no subcontracting opportunities were available, and
thus the BIP waiver request was made to, and approved by, the
24
mayor’s office. Thereafter, the City amended the RFQ through
Addendum No. 2, which stated: “The Business Inclusion
Program (BIP) Mandatory Outreach has been waived. . . .
Attendance to the BIP Meeting is no longer a requirement.”
~(9CT 2437)~ The effect of this addendum was to remove the BIP
outreach requirements, including attendance at the pre-bid
meeting, from the RFQ.
B. Analysis.
LTC contended below, and urges on appeal, that the City
could not “waive” attendance at the pre-bid meeting because the
RFQ characterized such attendance as “ ‘mandatory.’ ” According
to LTC, “[where a bid includes admonitions that it will be deemed
‘non-responsive’ if specific requirements are not met, those
requirements are always deemed material and thus unwaivable.”
Thus, LTC contends, because the RFQ “warned that the meeting
was ‘mandatory’ and that bidders would ‘not be allowed to put in
their bid’ if they [did] not attend the ‘Mandatory Pre-
Bid/Business Inclusion Program,’ ” the City lacked discretion to
waive SJR’s failure to attend the pre-bid meeting.
LTC’s contention erroneously equates the distinct concepts
of waiving and modifying bid requirements. As discussed above,
a public entity may “waive” (or “disregard”) inconsequential
deviations from contract specifications, but may not waive
“substantial” deviations from such specifications. (See, e.g.,
Bay Cities, supra, 223 Cal.App.4th at p. 1189 [“the rule that
requires ‘ “strict compliance with bidding requirements does not
preclude the contracting entity from waiving inconsequential
deviations” ’ ”]; Ghilotti, supra, 45 Cal.App.4th at p. 900 [public
entity may waive “inconsequential deviations from contract
specifications”]; see also Procurement Manual, p. G-18 [defining
25
“waiver” as “the act of disregarding minor informalities, errors, or
technical nonconformities”].) Thus, a public entity may excuse a
bidder’s failure to comply with bid specifications only if the
failure to comply is not substantial.
A different rule applies, however, to a public entity’s ability
to modify bid specifications prior to the bid submission date.
Significantly, the Procurement Manual provides that the City
may “modify, change, or delete any material condition of [an]
RFQ” through an addendum to an RFQ. (Italics added.) The
Procurement Manual thus expressly permits the City to
eliminate even material conditions of an RFQ after its release, so
long as the City does so through a formal contract addendum.8
Here, the City formally modified the BIP outreach
requirement—which both LTC and the City agree was a material
term of the RFQ—by issuing Addendum No. 2. Addendum No. 2
changed the terms of the RFQ by removing the mandatory BIP
outreach requirements. Having done so, the City had no occasion
to “waive” SJR’s noncompliance with BIP outreach requirements
8 LTC suggests that if the City is correct that it can change
mandatory or material elements of an RFQ through an
addendum, then it “could change any feature of its RFQ at any
time throughout the bidding process and render all mandatory
requirements and admonitions that failure to comply would
render a bidder nonresponsive meaningless.” But the express
purpose of an RFQ addendum is to allow the City to alter its
specifications—even material ones—as appropriate to the City’s
needs. Although the City theoretically could “change any feature
of its RFQ at any time throughout the bidding process,” it
manifestly would not do so if the change would result in
procuring a product or service that would not meet the City’s
needs.
26
because those requirements were no longer mandatory bid
elements.9
Citing the City’s Procurement Manual, LTC contends that
the City can excuse BIP compliance only if it does so before
issuing an RFQ; it thus urges that Addendum No. 2, which was
issued after the RFQ’s release, did not excuse SJR’s failure to
attend the pre-bid meeting. In support, LTC relies on section
5.1.3 of the Procurement Manual, which describes the procedure
for waiving the BIP requirement prior to releasing an RFQ.
Specifically, section 5.1.3 provides: “When no subcontracting
opportunity can be identified, the [procurement analysist] must
include a written justification with a request to waive the
Business Inclusion Program Outreach Process. . . . The Director
of Supply Chain Services, or the Director’s designee, shall
determine the applicability or validity of any submitted waiver
request and approve the waiver prior to the RFQ release.” But as
the City correctly notes, this provision governs only BIP waivers
that are sought before an RFQ is issued, and nothing in the
provision precludes the City from eliminating the BIP
requirement through an addendum after an RFQ has been
released. Indeed, as we have discussed, section 7.3.2 of the
Procurement Manual specifically permits the City to issue an
9 As the City notes, the trial court’s error may have stemmed
from the language of Addendum No. 2, which says that the
mandatory BIP requirement “has been waived.” This referred to
the Mayor’s “waiver” of compliance with Executive Directive
No. 14, which requires BIP outreach—not to the City’s waiver of
a material term of the RFQ. To the contrary, once the City issued
Addendum No. 2, BIP outreach was no longer required, and thus
the City would have had no occasion to waive SJR’s failure to
comply.
27
addendum “to modify, change, or delete any material condition of
[an] RFQ.” (Italics added.) LTC cites no authority for the
proposition that “any material condition” does not include the
BIP outreach requirement, nor are we aware of any.
LTC also contends that even if the City could waive BIP
compliance generally, it could waive a potential bidder’s pre-bid
meeting attendance only if it did so “before the pre-bid meeting.
In support, it cites the City’s BIP program guidelines, which state
that a bidder may seek a waiver of the pre-bid meeting
requirement “prior to the meeting.” This contention again
confuses two analytically separate concepts—namely, the City’s
ability to seek a waiver of the BIP requirement entirely because a
particular contract has no subcontracting opportunities, and the
City’s ability to grant a waiver of the pre-bid meeting attendance
requirement to a particular bidder who has recently attended
such a meeting. With regard to the latter waiver, the BIP
program guidelines state that if an RFQ requires BIP
compliance, the City may “waive” a potential bidder’s attendance
at the pre-bid meeting “if the [bidder] both certifies in writing
that it is informed as to the BIP outreach requirements and has
participated in a City-sponsored . . . event in the prior 12 months
as is evidenced by the event attendance documents” and the RFQ
does not say that the pre-bid meeting is mandatory. This waiver
provision is irrelevant to the present case, which does not concern
the City’s ability to waive SJR’s attendance at the pre-bid
meeting under the BIP program guidelines, but instead
addresses its discretion to eliminate BIP compliance from the
RFQ entirely.
LTC next contends that even if the City generally may
excuse a contractor’s attendance at a pre-bid meeting, it could not
28
waive SJR’s failure to attend the pre-bid meeting because that
waiver was intended to give SJR a competitive advantage. LTC
made the same contention below, and the trial court rejected it,
finding that “[t]he City gave SJR no special treatment in the pre-
bid meeting process. . . . SJR never lobbied for or was consulted
with respect to the waiver of the mandatory BIP outreach.” This
was a factual finding by the trial court, and thus we must uphold
it if it was supported by substantial evidence. (San Diegans for
Open Government v. City of San Diego (2018) 31 Cal.App.5th 349,
363.) Substantial evidence unquestionably supported the trial
court’s finding: Curaming testified that the City eliminated the
BIP requirement after LTC’s representative, Miller, asked at the
pre-bid meeting why BIP outreach was required when the RFQ
did not permit the use of subcontractors; and SJR’s manager,
Hollis, said in his declaration that he “did [not] have any
communication whatsoever with any City personnel requesting a
waiver of the BIP Mandatory Outreach or requesting that the
outreach be converted from mandatory outreach to voluntary
outreach.” Taken together, the deposition testimony and
declaration are substantial evidence to support the trial court’s
finding that the City did not waive the BIP requirements,
including attendance at the pre-bid meeting, to advantage SJR.
Next, LTC urges that even if the City had authority to
eliminate the BIP requirement from the RFQ, the City excused
only BIP outreach, not attendance at the pre-bid meeting. Not
so. As the City correctly notes, BIP outreach is one of seven BIP
compliance indicators, and thus waiver of the BIP requirement
necessarily waived BIP outreach. Further, Addendum No. 2
expressly stated that “[a]ttendance [at] the BIP Meeting is no
longer a requirement.” Addendum No. 2 thus necessarily excused
29
all requirements of the BIP program, including attending the pre-
bid meeting.10
Finally, LTC contends that had it known that attendance
at the pre-bid meeting would be eliminated as a requirement for
bidding on the contract, it “would not have spent the time, money
and resources to prepare for and attend the meeting.” We agree
with the general principle (although LTC cites no authority for it)
that amending an RFQ after its release may raise fairness/due
process concerns if it is done to advantage a prospective bidder,
but as we have said, the trial court found that the City did not
eliminate the BIP requirement to advantage SJR, and
substantial evidence supports that conclusion.11
10 LTC suggests that a City witness testified that Addendum
No. 2 did not waive the pre-bid meeting, but we do not agree.
The testimony on which LTC relies is as follows:
“Q: Your testimony is that Daisy [Curaming] pursued a
BIP meeting waiver because of a concern that [LTC
representative] Austin Miller raised at the meeting?
“A [Melissa Yusilon]: So it’s not a waiver of a BIP meeting.
It’s a waiver of the outreach of the Business Inclusion Program.”
Read in context, we understand Yusilon’s testimony to
mean that Curaming pursued a waiver not of the pre-bid meeting
specifically, but of the BIP program generally, of which
attendance at the pre-bid meeting was just one part.
11 Although not directly relevant to our analysis, we note that
there is no evidence that eliminating the BIP requirement
materially disadvantaged LTC. Specifically, there is no evidence
that LTC failed to comply with the specifications because the City
eliminated the BIP requirements; to the contrary, but for
Addendum No. 2, LTC’s bid would have been nonresponsive for
30
For all the foregoing reasons, we conclude that the City had
discretion to eliminate the BIP requirements, including
attendance at the pre-bid meeting, and it properly did so through
Addendum No. 2. The City thus properly determined that SJR’s
bid was responsive notwithstanding its failure to attend the pre-
bid meeting. The trial court erred in concluding otherwise.
III. The City did not abuse its discretion by waiving
SJR’s late sample submission.
It is undisputed that SJR did not timely submit its product
samples. The City urges, however, that it had discretion to waive
SJR’s late sample submission because the noncompliance was
inconsequential and did not competitively disadvantage LTC. We
agree.
As noted above, in the absence of evidence of corruption, a
public entity has discretion to accept a bid that “substantially
conforms” to its specifications so long as the variance cannot have
affected the amount of the bid or given a bidder a competitive
advantage not allowed other bidders. (DeSilva, supra,
242 Cal.App.4th at pp. 1422–1423; Valley Crest, supra,
41 Cal.App.4th at pp. 1440–1441; Konica, supra, 206 Cal.App.3d
at p. 454; Ghilotti, supra, 45 Cal.App.4th at p. 908.) Thus, for
example, in Bay Cities, supra, 223 Cal.App.4th 1181, the Court of
Appeal held that a city did not abuse its discretion by awarding a
construction project to a bidder that omitted the first page of its
failure to fully comply with the BIP outreach requirement.
Further, while LTC invested some resources to comply with the
pre-bid meeting requirement, those resources were trivial: The
meeting lasted just an hour, and LTC’s representative, Miller,
admitted that he did not do any preparation for it.
31
bid bond from its submission. The city deemed the omission
inconsequential because it was apparent that the bidder had
complied with the bond requirement. The court agreed, noting
that substantial evidence supported the city’s determination that
the deviation was inconsequential because the bidder submitted
sufficient information to demonstrate that it had complied with
the bond requirement. (Id. at pp. 1189–1190, 1193–1198.)
In contrast, the Court of Appeal in Konica, supra,
206 Cal.App.3d 449, held that a public entity abused its
discretion by waiving deviations from bid specifications that
allowed a bidder to make a lower bid than would have been
possible without the deviations. There, the public entity
requested bids on copy machines that would produce at least
55 copies per minute, had zoom magnification and reduction, and
were capable of fully automatic double-sided copying; the
successful bidder offered machines that made only 50 copies per
minute, did not have a zoom feature, and performed double-sided
copying semi-automatically. The court held these deviations
were substantial, and therefore unwaivable, because it was
undisputed that adherence to the specifications would have
resulted in an increased bid. (Id. at pp. 453, 455.) Similarly, in
DeSilva, the court held that a bidder’s failure to acknowledge a
significant change to the specifications was material because
under applicable provisions of the Public Contract Code, the
bidder could have withdrawn its bid without forfeiting its bid
bond. (DeSilva, supra, 242 Cal.App.4th at pp. 1423–1424.)
LTC contended below, and urges on appeal, that SJR’s
failure to timely submit product samples was a material
deviation because “[w]here a bid includes admonitions that it will
be deemed ‘non-responsive’ if specific requirements are not met,
32
those requirements are always deemed material and thus
unwaivable.” In other words, LTC suggests, the RFQ rendered
the late sample submission unwaivable as a matter of law. But
DeSilva, the only case LTC cites for this proposition, does not
support it. There, the court held that a public entity abused its
discretion by allowing a bidder to correct a mistake “that the
[agency] itself deemed a ‘material’ deviation.” (DeSilva, supra,
242 Cal.App.4th at pp. 1423–1424.) While DeSilva thus holds
that a deviation from an RFQ cannot be waived if it is
“material”—a proposition of law that the City does not dispute—
the case does not suggest that a deviation that causes a bid to be
“nonresponsive” is necessarily “material.” (See generally id. at
pp. 1422–1425.)
LTC also suggests that SJR’s late sample submission could
not be waived because it gave SJR an unfair competitive
advantage. The trial court agreed, noting that “LTC had to
comply strictly with product specifications, while SJR was
excused for its compliance,” and “[SJR’s] untimely sample
submission disadvantaged the City by limiting its time to”
conduct performance tests. To the extent this conclusion was
based on a factual finding, the finding is not supported by
substantial evidence. LTC urges that “[i]f LTC had known its
sample could have been submitted nearly two weeks later than
originally required, LTC would have had the opportunity to test
its sample independently and decide whether to seek a departure
from the specifications.” But LTC introduced no evidence below,
and identifies none on appeal, that it was unable to test its
product sample due to the sample submission deadline, or that it
would have conducted such tests had the sample submission
deadline been extended. Nor is there evidence that LTC sought
33
to or was denied the right to submit its own product samples
after the December 6 deadline.
The trial court’s conclusion that the City’s waiver gave SJR
a competitive advantage because it held LTC, but not SJR, to
strict compliance with performance specifications
misunderstands what “competitive advantage” means in the
present context. Indisputably, any waiver “advantages” the party
whose noncompliance is waived because but for the waiver, that
party could not be awarded the contract. But defining
“competitive advantage” in this way would prohibit the City from
waiving any deviations, even immaterial ones. The Charter says
otherwise, expressly permitting the City to waive a bid
“informality” if doing so “would be to the advantage of the City.”
(Charter, § 371(c); see also LAAC, § 10.15(c) [same].)
Instead, the cases discussed above prohibit a public entity
from waiving a deviation that gives a party “an unfair
competitive advantage by allowing it to make a lower bid than it
would have been able to make without the deviations” (Konica,
supra, 206 Cal.App.3d at p. 454, italics added), or giving it the
opportunity to withdraw its bid without forfeiting its bid bond
(DeSilva, supra, 242 Cal.App.4th at pp. 1423–1424). There is no
suggestion in the present case that SJR’s late sample submission
either affected its bid price or would have allowed it to withdraw
its bid bond without penalty, and thus the City’s waiver did not
give SJR a competitive advantage as a matter of law.
There is, finally, no substantial evidence to suggest that the
City did not benefit from waiving SJR’s late sample submission.
The trial court said the waiver was not to the City’s advantage
because “[SJR’s] untimely sample submission disadvantaged the
City by limiting its time to” conduct performance tests. But the
34
relevant question was not whether the City would have preferred
a timely submission to a late one; it is, instead, whether given
SJR’s late submission, the City was better served by rejecting
SJR’s bid or by waiving the late submission and considering
SJR’s bid on the merits. As to that issue, the City concluded that
it benefited from waiving SJR’s late submission because the only
other bid it received did not satisfy the performance standards
and the City’s lab was able to test the sample well in advance of
the bid submission date. In the absence of evidence of improper
favoritism, which the trial court found not present here, we may
not second-guess the City’s determination of its own best
interests. (See, e.g., Mike Moore’s 24-Hour Towing v. City of San
Diego, supra, 45 Cal.App.4th at p. 1312 [“It is a legislative
function [of a public entity] to consider data, opinion, and
arguments, and then to exercise discretion guided by
considerations of the public welfare”; thus, court will not disturb
public entity’s decision where its reasonableness “is fairly
debatable”].)
For all the foregoing reasons, the trial court erred in
concluding that the City lacked discretion to waive SJR’s late
sample submission.
LTC’S APPEAL
In its appeal, LTC contends that the trial court erred by
(1) finding LTC’s sample failed to meet the RFQ’s specifications,
(2) finding LTC was not the lowest bidder, and (3) denying LTC’s
motion for attorney fees. As we discuss, these claims lack merit.
35
I. The City did not abuse its discretion by concluding
that LTC’s product sample did not meet the RFQ’s
specifications.
A. The trial court properly admitted the City’s
report of LTC’s test results.
LTC contends the City abused its discretion by concluding
LTC’s product sample did not meet the RFQ’s specifications
because there was no competent evidence that the sample was
tested properly. We disagree.
LTC urges that the trial court erred by admitting the City’s
report of LTC’s test results—which LTC contends was “without
foundation”—on the court’s “own motion” and “over LTC’s
objection.” In fact, LTC did not object below to the admission of
the City’s report of LTC’s test results. To the contrary, LTC
stipulated that that the report was “a true and correct copy of
[LTC’s] Test Results,” thus establishing the report’s authenticity.
(See Evid. Code, §§ 1400 [authenticating a writing means
introducing evidence “sufficient to sustain a finding that it is the
writing that the proponent of the evidence claims it is”],
1414, subd. (a) [writing may be authenticated by evidence that
the party against whom it is offered has admitted its
authenticity].)
LTC’s real objection appears to be not that an insufficient
foundation was laid to admit the report, but rather that the City
did not establish that the underlying tests were reliable. The
trial court rejected this contention, concluding that LTC failed to
rebut the statutory presumption that an official duty has been
regularly performed. We agree. Evidence Code section 664
(section 664) creates a rebuttable presumption that an official
duty has been regularly performed. (See also Baker v. Gourley
36
(2000) 81 Cal.App.4th 1167, 1172–1173; Roelfsema v. Department
of Motor Vehicles (1995) 41 Cal.App.4th 871, 879.) Once a public
entity meets this initial burden to establish a prima facie case, a
challenger may rebut the presumption with “ ‘affirmative
evidence of the nonexistence of the presumed facts sufficient to
shift the burden of proof back to the [public entity].’ ” (Delgado v.
California Department of Motor Vehicles (2020) 50 Cal.App.5th
572, 577 (Delgado); Manriquez v. Gourley (2003) 105 Cal.App.4th
1227, 1233.) The challenger’s showing “ ‘cannot rest on
speculation, but must demonstrate a reasonable basis for an
inference that the procedures were not properly followed.’
(Petricka v. Department of Motor Vehicles (2001) 89 Cal.App.4th
1341, 1348.) If the [challenger] meets that burden, the burden
shifts back to the [agency] to prove the test was reliable despite
the violation.” (Delgado, at p. 577.)
Here, it is undisputed that the City’s Asphalt Binder Lab
has been fully accredited by AASTHO and routinely tests the
City’s asphalt binder. It further is undisputed that on
December 5, 2018, the lab prepared a report stating that LTC’s
sample “was tested for determination of Rheological Properties
and compliance to Performance Grade Classification (AASHTO
M320-17),” and the sample tested “out of specification” on the
DSR test because the reference range was 1.50 to 3.00 kPa, and
LTC’s sample tested at 1.47 kPa. The report was signed by
director Ray Solomon and stamped by Solomon and engineer-in-
charge Leon Vainer.
Under section 664, the signed and stamped report issued by
the lab, which was prepared in the ordinary course of its duty to
test and report on the quality of asphalt binder, gave rise to a
presumption that the testing of LTC’s sample was regularly
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performed. The burden therefore shifted to LTC to produce
affirmative evidence to the contrary—that is, evidence that the
machines were not properly calibrated or that the tests were not
properly performed. LTC provided no such evidence. To the
contrary, LTC stipulated that it did not test its sample before
submitting it to the City, and its chief operating officer admitted
he did not know if LTC’s binder could meet the City’s
specifications.
LTC urges that the City was not entitled to the section 664
presumption unless it made a “foundational” showing regarding
its licensing and procedures, but the case LTC cites for this
proposition does not support it. Instead, Shannon v. Gourley
(2002) 103 Cal.App.4th 60, which addressed a plaintiff’s
challenge to blood-alcohol test results produced by a county crime
lab, states as follows: “Generally, the foundational showing
necessary for the admission of blood-alcohol test results consists
of evidence demonstrating the testing device was working
properly and a qualified operator correctly administered the test.
[Citation.] . . . . [¶] Procedurally, it is a fairly simple matter for
the DMV to introduce the necessary foundational evidence.
[Section 664] creates a rebuttable presumption that blood-alcohol
test results recorded on official forms were obtained by following
the regulations and guidelines of title 17. [Citations.] Test
results from authorized laboratories, performed by public
employees within the scope of their duties . . . are presumptively
valid and the DMV is not required to present additional
foundational evidence.” (Id. at pp. 64–65, italics added.) Read in
context, therefore, Shannon suggests that the foundation for
admitting the test results in the present case was laid by
38
evidence that the test was performed by Asphalt Binder Lab
employees in the scope of their duties.
Citing Molenda v. Department of Motor Vehicles (2009)
172 Cal.App.4th 974, LTC further contends that to rebut the
section 664 presumption, LTC did not have to show that the
City’s test results were inaccurate, only that the records were not
“trustworthy.” But that is not what Molenda says. The principle
of law articulated in Molenda is that “ ‘the presumption of official
duty regularly performed (Evid. Code, § 664) supplies sufficient
indicia of the trustworthiness of [the] test results to justify
reliance upon such results . . . subject to a showing by the
licensee that the test was not performed in compliance with
statutory requirements.’ ” (Molenda, at p. 1003.) In that case,
however, the court found that the facts did not give rise to a
section 664 presumption because the results of a preliminary
alcohol screening breath test had not been recorded on an official
form or signed by the arresting officer. Instead, the officer “made
a notation on the . . . form indicating that Molenda had submitted
to a blood test.” (Molenda, at p. 1004.) The court concluded that
a reasonable inference from this evidence was that “the officer
intended to rely on the results of the blood test, not the [breath]
test,” and thus the agency could not rely on the section 664
presumption to establish the foundation necessary to admit the
preliminary alcohol screening test. (Molenda, at p. 1004.)
The present case is distinguishable from Molenda. As
described, the asphalt binder test results were recorded by a test
operator and reviewed by a supervisor, and the resulting report
was signed and stamped. An engineer calibrated and certified
the rheometer on October 9, 2018, just a few weeks before the
39
City tested LTC’s binder sample. Thus, the trial court properly
applied the section 664 presumption.
Finally, LTC urges that the declaration of Villacorta, the
Roads and Highways Section head, did not reliably establish that
the tests of LTC’s sample were properly performed because
Villacorta “was not involved in testing LTC’s product sample in
any way and took it on faith the tests were performed correctly.”
Not so. Villacorta did not purport to testify about how LTC’s
sample was tested; instead, he testified generally about the
purposes of the various asphalt binder tests performed by the
Asphalt Binder Lab, which he was responsible for overseeing,
and how LTC’s binder performed on the lab’s tests as reflected on
the lab’s official report. This testimony was sufficient to give rise
to the presumption of regularity under section 664, shifting the
burden to LTC to rebut the presumption by introducing contrary
evidence. Because LTC failed to do so, the trial court properly
concluded that the City had established that LTC’s sample did
not meet the product specifications.
B. The City did not abuse its discretion by
concluding that LTC’s sample did not
substantially comply with the specifications.
Alternatively, LTC contends that its sample “substantially
compl[ied] with the DSR specification[s]” because its “reported
score was 1.47 kPa or 98% of the specification[,] which exceeded
the expected test precision of 6.4%.” LTC urges that the trial
court “should have held that LTC’s binder sample met the City’s
specifications.”
This contention is inconsistent with LTC’s suggestion that
the City’s test results are unreliable or inaccurate. If, as LTC’s
suggests, there was no reliable evidence that the City’s rheometer
40
was properly calibrated or the tests properly performed—and in
light of LTC’s admission that it did not conduct its own tests and
did not know if its binder sample met the City’s specifications—
the trial court manifestly could not conclude that LTC’s sample
met the City’s specifications. To the contrary, were we to adopt
LTC’s suggested view of the facts, we would have to find that
there was no evidence before the City or trial court concerning
LTC’s compliance with the specifications.
In any event, we cannot conclude, as LTC would have us
do, that its sample substantially complied with the specifications
because the deviation from the reference range on the DSR test
was, in LTC’s view, inconsequential. The RFQ said the City
would consider bids that contained disclosed deviations from the
specifications if the products “comply substantially with the
specifications,” but it also said that the City “shall be the sole
determiner of substantial compliance with the specifications.”
(Italics added.) Under the RFQ’s express terms, therefore, LTC’s
view of the significance of its deviation from the specifications is
immaterial.
Moreover, as we have said, on questions of fact on which a
public entity’s exercise of discretion is based, we defer to the
agency’s findings if they are supported by substantial evidence.
(MCM, supra, 66 Cal.App.4th at pp. 374–375.) Here, substantial
evidence supported the City’s determination that LTC’s product
did not substantially comply with the specifications with regard
to dynamic shear. Specifically, Villacorta declared as follows:
—The City developed asphalt binder specifications “based
on extensive testing, research, data, experience with local
materials, and knowledge of what the City needs to manufacture
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durable and long-lasting asphalt concrete that can withstand the
City’s particular loads and traffic conditions.”
—“The difference of G*/Sin (δ) between 1.47 kPa and
1.50 kPa may seem small numerically, but the deviation is
significant for determining the material’s resistance to
permanent deformation, rutting and other forms of deterioration.
[The Roads and Highways Section] established specified ranges
in the Specification to allow test results to deviate a certain
amount above and below a target value. The target DSR value
for Original medium binder is not 1.50 kPa, which is the
minimum value at which a binder will be considered. The edges
of the range (1.50kPa and 3.00kPa) represent the maximum
distance away from the target value, beyond which the City can
no longer accept test results.”
—“Based on [the City’s] extensive research, testing and
experience, the use of LTC’s asphalt binder would result in
rutting and increased incidents of pavement deformation leading
to overall shorter pavement lifespan. This deviation would result
in more frequent pavement repairs and construction, and the use
of the binder would reduce public safety because rutting and
deformations can cause an increase in traffic accidents.”
We note finally, as the court did in MCM, supra,
66 Cal.App.4th at pages 373–374, that LTC’s contention is based
on the assumption that if the City may waive deviations from bid
specifications, it necessarily abuses its discretion by refusing to
do so. As MCM explained, the cases that address whether and
under what circumstances an agency may waive a deviation from
bid specifications “use permissive language to describe the
agency’s power to waive immaterial deviations: ‘[A] bid which
substantially conforms to a call for bids may, though it is not
42
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 . . . .’ [¶] . . . An agency has
discretion to waive immaterial deviations from bid specifications
and may accept the bid under certain conditions. The point of
discretion is that the agency may properly act in either direction.
It may waive or refuse to waive such deviations.” (Ibid., italics
added and deleted.) We thus conclude that the City was not
required to exercise its discretion to waive LTC’s deviation from
the contract specifications.
II. LTC’s additional contentions.
LTC contends finally that the trial court erred by failing to
declare LTC the low bidder and to award LTC attorney fees. Our
conclusion that LTC’s bid did not substantially comply with the
specifications effectively resolves both issues. With regard to the
first issue, the City agrees LTC was the low bidder, but urges
LTC was not a responsive bidder because its sample did not
conform to the product specifications. We agree. The City is
required under the Charter to award competitively bid contracts
“to the lowest responsive . . . bidder.” (Charter, § 371(a), italics
added.) Because LTC’s sample did not satisfy the bid
specifications, its bid was not responsive (see DeSilva, supra,
242 Cal.App.4th at p. 1422; Bay Cities, supra, 223 Cal.App.4th at
pp. 1188–1189), and the amount of LTC’s bid therefore was
irrelevant.
With regard to the second issue, Code of Civil Procedure
section 1021.5 provides that “[u]pon motion, a court may award
attorneys’ fees to a successful party . . . in any action which has
resulted in the enforcement of an important right affecting the
public interest.” (Italics added.) Because we have reversed the
43
portion of the judgment directing issuance of the writ, LTC is not
a “successful party,” and thus it is not entitled to attorney fees
under this section.
DISPOSITION
The judgment is reversed insofar as it directs the issuance
of a writ of mandate requiring the City to set aside the contract
award to SJR, and is otherwise affirmed. The cause is remanded
with directions to enter a new judgment denying the petition for
writ of mandate. The order denying LTC’s motion for attorney
fees is affirmed. The City is awarded its appellate costs.
NOT TO BE PUBLISHED IN THE OFFICIAL
REPORTS
EDMON, P. J.
We concur:
LAVIN, J. EGERTON, J.
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Lunday-Thagard Co. v. City of Los Angeles CA2/3
Combined Opinion