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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Silver Bow Construction v. State, Dept. of Administration, Division of General Services (7/25/2014) sp-6928

Silver Bow Construction v. State, Dept. of Administration, Division of General Services (7/25/2014) sp-6928

         Notice:  This opinion is subject to correction before publication in the PACIFIC  REPORTER .  

         Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,  

         303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email  

                                                                                   

         corrections@appellate.courts.state.ak.us.  



                   THE SUPREME COURT OF THE STATE OF ALASKA  



SILVER BOW CONSTRUCTION,                             )  

                                                     )        Supreme Court No. S-15087  

                           Appellant,                )  

                                                     )        Superior Court No. 1JU-11-01010 CI  

         v.                                          )  

                                                     )        O P I N I O N  

STATE OF ALASKA,                                     )  

DEPARTMENT OF                                        )        No. 6928 - July 25, 2014  

ADMINISTRATION, DIVISION                             )  

OF GENERAL SERVICES,                                 )  

                                                     )  

                           Appellee.                 )  

                                                     )  



                  Appeal from the Superior Court of the State of Alaska, First  

                                                                  

                  Judicial District, Juneau, Louis J. Menendez, Judge.  



                  Appearances:    Jack  B.  McGee,  Law  Office  of  Jack  B.  

                                                                

                  McGee,   Juneau,   for   Appellant.      Jessica   M.   Alloway,  

                  Assistant  Attorney  General,  Anchorage,  and  Michael  C.  

                                                                                  

                  Geraghty, Attorney General, Juneau, for Appellee.  



                  Before:  Fabe, Chief Justice, Winfree, Stowers, Maassen, and  

                              

                  Bolger, Justices.  



                  BOLGER, Justice.  



I.       INTRODUCTION  



                  The Department of Administration, Division of General Services (Division)  



accepted a 15-page response to a request for proposals for renovations to the Governor's  

                                             



House.  The request stated that responses should not exceed 10 pages.  Silver Bow  


----------------------- Page 2-----------------------

Construction, a competing bidder, argues that this variance from the request obligated  



                                 

the Division to reject the 15-page response.  Because the Division reasonably concluded  



                                                                             

that this variance did not give the 15-page response any substantial advantage, we affirm  



                                                                                  

the superior court's decision to uphold the Division's decision to accept this response.  



II.       FACTS AND PROCEEDINGS  



                                                                                              

                    In November 2010 the Division issued a request for proposals to perform  



                                                                                             

exterior renovations to the Governor's House in Juneau.  The request imposed specific  



submission  requirements  and  guidelines.    Paragraph  8  of  the  request  included  the  



instructions relevant to this appeal, and required the companies to  



                                 

                    [a]ttach criteria Responses (EXCEPT PRICE PROPOSAL)  

                                                 

                    to the Contractor's Technical Proposal (Section 00313).  The  

                                                 

                    maximum number of attached pages (each printed side equals  

                                                                                                           [1] 

                    one page) for criteria Responses shall not exceed: 10 pages.  

                                    



Paragraph 8 warned that "Criteria Responses which exceed the maximum page limit or  

                                                                     



otherwise do not meet requirements stated herein, may result in disqualification."    



                    Four companies submitted proposals:  Alaska Commercial Contractors,  



                                              

Inc., Silver Bow Construction Co., North Pacific Erectors, and JKM General Contractors  



LLC.  Alaska Commercial submitted a 15-page proposal, JKM submitted an 11-page  



                                                                                       

proposal, Silver Bow submitted a 10-page proposal, and North Pacific submitted a 7- 



page proposal.   



                                                                                                                       

                    The procurement officer for the Division accepted and reviewed all four  



                                                                                                               

proposals.  The procurement officer concluded that Alaska Commercial's proposal did  



                                                                                   

not contain more substance than the others, that it was not in the State's best interest to  



"needlessly  reduce  competition"  by  disqualifying  acceptable  proposals  "strictly  on  



                                                                                                    

form,"  and  that  all  four  proposals  had  technical  deficiencies.                             When  the  Division  



          1         Emphasis in original.  



                                                              -2-                                                            6928  


----------------------- Page 3-----------------------

subsequently performed a word count, it found that Silver Bow's proposal had 6,226                           

words, while Alaska Commercial's proposal had 5,773 words.2  



                   A six-person evaluation committee then reviewed the proposals on four  



                          

technical criteria (Project Understanding and Methodology, Management Plan for the  



Project, Experience and Qualifications, and Schedule) and two price criteria (Alaska  



Offeror  Preference  and  Price  Proposal).    Each  committee  member  rated  Alaska  



                                                  

Commercial's as the best proposal in each technical criterion, and their combined scores  



also rated that proposal as the best overall under the technical criteria.  



                   After this round of independent scoring and some group discussion, the  



                                                                                             

committee members again independently re-scored the proposals.  Alaska Commercial's  



proposal still scored the highest overall under the technical criteria, receiving 1,960  



points out of 2,100.  In comparison, North Pacific received 1,025 points, Silver Bow  



                                                  

received 995, and JKM received 800.  The Division awarded the contract to Alaska  



Commercial.  



                                      

                   Silver  Bow  filed  a  protest  under  AS  36.30.560,  arguing  that  Alaska  



Commercial's 15-page proposal was nonresponsive and should be disqualified.  The  



                                                                         

Division denied Silver Bow's protest, explaining that the page count was a matter of  



form.  



                   Silver Bow appealed the denial of its protest to the Commissioner of the  



                                                                     

Department of Administration, and the case was referred to the Office of Administrative  



                 

Hearings.  An administrative law judge denied Silver Bow's appeal, noting that Silver  



Bow's  proposal  contained  more  words  than  Alaska  Commercial's,  that  Alaska  



Commercial's additional pages were based on larger font size and margins, and that the  



          2        JKM's proposal had 5,606 words and North Pacific's proposal had 3,411  



words.  



                                                            -3-                                                        6928  


----------------------- Page 4-----------------------

greater number of pages had no effect on the evaluation.  The judge rejected Silver  



Bow's contention that the greater number of pages in Alaska Commercial's proposal  



                                                                            

made it a more persuasive or effective document.  The judge also rejected Silver Bow's  



                                                                                                     

similar argument that the length of Alaska Commercial's proposal explained the higher  



ratings.  



                                                                                

                    Silver Bow appealed the administrative decision to the superior court.  The  



                                                                                                   

superior court found that the Division did not abuse its discretion, and the court rejected  



Silver Bow's claim that the Division's decision violated equal protection.  Silver Bow  



now appeals to this court.  



III.      STANDARD OF REVIEW  



                    "When the superior court acts as an intermediate court of appeal in an  



                                                                                                                                 3  

                        

administrative matter, we independently review the merits of the agency's decision." 



                                                                 

"When an agency interprets and applies its own regulations, we review its determination  



                                                                                                       4  

to ensure it is not arbitrary, unreasonable, or an abuse of discretion."   In particular, we  



"review  an  agency's  determination  of  responsiveness  under  the  reasonable  basis  



                5  

standard."   We substitute our judgment for that of the agency when interpreting the  

Alaska Constitution.6  



          3         Powercorp Alaska, LLC v. State, Alaska Indus. Dev. & Exp. Auth.                                 , 171 P.3d  



 159, 163 (Alaska 2007) (citing Williams v. Abood, 53 P.3d 134, 139 (Alaska 2002)).  



          4         Id. (citing J.L. Hodges v. Alaska Constructors, Inc., 957 P.2d 957, 960  



(Alaska 1998)).  



          5         Laidlaw Transit, Inc. v. Anchorage Sch. Dist. , 118 P.3d 1018, 1032 (Alaska  

                                                                                         

2005) (citing   Gunderson v. Univ. of Alaska, Fairbanks, 922 P.2d 229, 233 (Alaska  

                                                       

 1996); State, Dep't of Admin. v. Bowers Office Prods., 621 P.2d 11, 13 (Alaska 1980);  

Kelly v. Zamarello , 486 P.2d 906, 917 (Alaska 1971)).  



          6  

                                                                

                    Koyukuk River Basin Moose Co-Mgmt. Team v. Bd. of Game , 76 P.3d 383,  

                                                                                                              (continued...)  



                                                               -4-                                                         6928
  


----------------------- Page 5-----------------------

                                  

IV.       DISCUSSION
  



          A.	      The Division Did Not Abuse Its Discretion When It Concluded That  

                   Alaska Commercial's Proposal Was Responsive.  



                   Alaska Statute 36.30.250(a) provides that  



                   [t]he  procurement  officer  shall  award  a  contract  under  

                   competitive         sealed      proposals        to   the     responsible        and  

                                                  

                   responsive offeror whose proposal is determined in writing  

                   to   be   the   most   advantageous   to   the   state   taking   into  

                   consideration price and the evaluation factors set out in the  

                   request for proposals.  



A bid or proposal is considered nonresponsive if it "does not conform in all material  



                                        7  

respects to the solicitation."                                                     

                                          A variance is "material if it gives one bidder a substantial  

advantage over other bidders and thereby restricts or stifles competition."8  



                   Silver Bow argues that Alaska Commercial's bid did not conform to the  



request for proposals because the bid exceeded the 10-page limit, giving it a substantial  



                  

advantage. Silver Bow contends that one bidder has a substantial advantage over another  



                   

bidder if the other bidder could have made a "better proposal" if it had been granted the  



                                     

same variance - in this case, extra pages in the proposal.  According to Silver Bow,  



                                                                                                            

Alaska Commercial gained "a substantial advantage" that the other offerors did not have  



because Alaska Commercial used extra pages in its bid.     



          6(...continued)  



386 (Alaska 2003) (citing Native Vill. of Elim v. State , 990 P.2d 1, 5 (Alaska 1999)).  



          7        2  Alaska  Administrative  Code  (AAC)  12.990(a)(9)  (2013);  Laidlaw  



Transit, 118 P.3d at 1032.  

                                        



          8  

                                                     

                   Laidlaw  Transit ,  118  P.3d  at  1032  (internal  quotation  marks  omitted)  

(citing McBirney & Assocs. v. State , 753 P.2d 1132, 1136 (Alaska 1988)).  



                                                            -5-	                                                     6928
  


----------------------- Page 6-----------------------

                    Silver Bow relies on Toyo Menka Kaisha, Ltd. v. United States (Toyo).9  

                                                                                                                                 



In that case, the solicitation required bidders to purchase surplus rice from the United  



                                        10  

                                                                                                              

States government "as is."                  Toyo's bid was nonresponsive because  it required the  



                                                                                                          

government to guarantee that the rice was fit for human consumption, a warranty that the  

solicitation had specifically disclaimed.11  



                                                                  

                    Unlike Toyo, Silver Bow does not argue that Alaska Commercial inserted  



                              

terms that changed the substantive requirements of the request for proposals.  Rather,  



Silver Bow argues that the extra pages allowed Alaska Commercial to submit a better  



                                                                  

proposal.  But the word count revealed that the most content was actually submitted by  



Silver Bow.  In other words, the page limit did not put Silver Bow at any substantial  



                       

disadvantage.  Under these circumstances, the Division could reasonably conclude that  



the variance in the number of pages was not material.    



                    Silver Bow also argues that Alaska Commercial's proposal should have  



                                                                                                                      

been rejected because the request for proposals cautioned that proposals that did not  



                              

adhere to the page limit could be disqualified.  But Paragraph 8 of the request states:  



"Responses   which   exceed   the   maximum   page   limit   or   otherwise   do   not   meet  

requirements stated herein, may result in disqualification."12  The use of the word "may"  



                                                                                 

indicates that the Division had the discretion to decide whether a failure to comply with  



                                                                                   13  

this  requirement  could  be  a  basis  for  disqualification.                           As  noted  above,  when  the  



          9         597 F.2d 1371 (Ct. Cl. 1979).
  



          10        Id. at 1374.
  



          11
       Id. at 1378.  



          12        Emphasis added.  



          13        See State, Dep't of Transp. & Pub. Facilities v. Sanders                        , 944 P.2d 453, 457  



                                                                                                            (continued...)  



                                                              -6-                                                        6928
  


----------------------- Page 7-----------------------

                               

Division exercised this discretion, it had a reasonable basis to conclude  that Alaska  



Commercial's proposal was responsive.  



                                                                                          

          B.        The Division Did Not Violate Silver Bow's Right To Equal Protection.  



                                                                                                                 

                    Article I, section 1 of the Alaska Constitution provides in  part "that all  



                             

persons are equal and entitled to equal rights, opportunities, and protection under the  



                                                         

law[.]"  A threshold question in an  equal protection challenge "is whether similarly  



                                                                          14  

situated  groups  are  being  treated  differently."                            So  "[w]here  there  is  no  unequal  



                                                                                                                

treatment, there can be no violation of the right to equal protection of law. In the absence  



                                                                                                                                  15  

                          

of any evidence of disparate treatment, there is no basis for an equal protection claim." 



                     Silver Bow argues that the Division treated Silver Bow differently when it  

                                                                                                         



accepted Alaska Commercial's 15-page proposal.  But each bidder had some deficiency  

                                                                                                      



in its proposal - such as excess pages or unqualified subcontractors - which could  



                                                                                 

have been grounds for disqualification. The Division considered all of these deficiencies  



and reasonably decided to accept all of the proposals.  



                    The   Division   treated   Silver   Bow's   proposal   the   same   as   Alaska  



                                                                                                     

Commercial's  proposal;  in  both  cases  the  Division  reasonably  decided  to  accept  a  



                                                                                                      

deficient  proposal.            The  superior  court  properly  concluded  that  there  was  no  equal  



protection violation because the record lacks any evidence of disparate treatment.   



          13(...continued)  



(Alaska 1997).  



          14        Black v. Municipality of Anchorage, Bd. of Equalization                                , 187 P.3d 1096,  



 1102 (Alaska 2008) (citations omitted); State v. Schmidt, 323 P.3d 647, 660 (Alaska   

2014).  



          15  

                                                         

                    Black , 187 P.3d at 1102 (alteration in original) (quoting Matanuska-Susitna  

Borough Sch. Dist. v. State , 931 P.2d 391, 397 (Alaska 1997)) (internal quotation marks  

omitted); Schmidt, 323 P.3d at 660.  



                                                                -7-                                                         6928
  


----------------------- Page 8-----------------------

V.     CONCLUSION  



             We AFFIRM the superior court's decision upholding the decision of the  



Department of Administration.  



                                        -8-                                    6928
  

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