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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Davis Wright Tremaine LLP v. State, Dept. of Administration (5/9/2014) sp-6908
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
DAVIS WRIGHT TREMAINE LLP, )
) Supreme Court No. S-15004
Appellant, )
) Superior Court No. 3AN-12-04933 CI
v. )
) O P I N I O N
STATE OF ALASKA, DEPARTMENT )
OF ADMINISTRATION, ) No. 6908 - May 9, 2014
)
Appellee. )
)
Appeal from the Superior Court of the State of Alaska, Third
Judicial District, Anchorage, Michael Spaan, Judge.
Appearances: Robert K. Stewart Jr., Davis Wright Tremaine
LLP, Anchorage, and John Parnass, Pacifica Law Group,
Seattle, Washington, for Appellant. Rachel L. Witty,
Assistant Attorney General, Anchorage, and Michael C.
Geraghty, Attorney General, Juneau, for Appellee. Susan
Orlansky and Jeffrey M. Feldman, Feldman Orlansky &
Sanders, Anchorage, for Amicus Curiae Van Ness Feldman,
A Professional Corporation.
Before: Fabe, Chief Justice, Winfree, Stowers, and Bolger,
Justices. [Maassen, Justice, not participating.]
WINFREE, Justice.
I. INTRODUCTION
A state agency issued a request for proposals for legal services. A law firm
delivered its proposal after the submission deadline, but the procurement officer accepted
----------------------- Page 2-----------------------
the proposal and forwarded it to the evaluation committee. After the agency issued a
notice of intent to award that law firm the contract, a second law firm protested, alleging
that the evaluation committee made scoring errors and that consideration of the late-filed
proposal was barred by a relevant regulation and the request for proposals. The
procurement officer sustained the protest, rescinded the original award, and awarded the
second law firm the contract. The first law firm then protested, claiming: (1) the second
law firm's protest should not have been considered because it was filed after the protest
deadline; (2) the first law firm's proposal was properly accepted because the delay in
submission was immaterial; and (3) the second law firm's proposal was nonresponsive
because that firm lacked a certificate of authority to transact business in Alaska. The
procurement officer rejected that protest and the first law firm filed an administrative
appeal. The administrative agency denied the appeal, and the first law firm appealed the
agency decision to the superior court, which affirmed the administrative agency ruling.
We conclude that the administrative agency acted reasonably in accepting
the second law firm's late-filed protest and deeming that firm's proposal responsive
notwithstanding its lack of a certificate of authority. We also conclude that the agency's
interpretation that its regulation barred acceptance of the first firm's late-filed proposal
is reasonable and consistent with statute. We therefore affirm the superior court's
decision upholding the final agency decision.
II. FACTS AND PROCEEDINGS
A. Facts
In early 2011 the State of Alaska, Department of Law, issued a Request for
Proposals (RFP) for legal counsel to assist the Alaska Energy Authority in obtaining a
federal license for construction and operation of a hydroelectric project. The RFP
required that, to receive consideration, a proposal must be received at the Department of
Law in Juneau by 3:00 p.m. on June 17, 2011. The RFP warned: "It is your
-2- 6908
----------------------- Page 3-----------------------
responsibility to ensure that the proposal arrives at the address indicated above before
the deadline for receipt. Proposals received after 3:00 pm, on June 17, 2011, will be
rejected and returned to the sender." The RFP reserved the State's right to "[r]eject any
or all proposals received and to waive deviations from the terms of the RFP if the State
determines the deviations are not material." The RFP also required that "all offerors hold
a valid Alaska business license and any necessary applicable professional licenses
required by Alaska Statute." The Department of Law notified prospective offerors on
June 14 that the deadline for receipt of proposals had been changed to 3:00 p.m. on
June 29.
Van Ness Feldman and six other law firms delivered proposals before the
June 29 deadline. Davis Wright Tremaine, in partnership with another law firm,
prepared to mail its proposal on June 27, but discovered an error in the cover letter and
recalled its office services messenger before the proposal actually was mailed. Davis
Wright Tremaine delivered the corrected proposal to the U.S. Postal Service in San
Francisco the next day - June 28 - for Express Mail delivery to the Department of
Law in Juneau. The Postal Service guaranteed delivery by 3:00 p.m. on June 30, the day
after submissions were due. After the package mistakenly was routed through
Wenatchee, Washington, the Postal Service attempted delivery at the Department of Law
on June 30, but found no one available to accept delivery. The Postal Service delivered
the package to the Department of Law on July 1.
The Department of Law's procurement officer initially believed she had
discretion to waive Davis Wright Tremaine's failure to deliver its proposal before the
deadline. Because she believed Davis Wright Tremaine "tried in good faith to make
[the] deadline and the delays caused by the [Postal Service] were out-of-[Davis Wright
Tremaine's] control," the procurement officer forwarded Davis Wright Tremaine's
proposal to the evaluation committee for consideration.
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----------------------- Page 4-----------------------
The reviewers determined that Davis Wright Tremaine's proposal was the
"most advantageous" to the State, and on July 22 the Department of Law issued a Notice
of Intent to award Davis Wright Tremaine the legal services contract. On August 5 Van
Ness Feldman - which had the third-ranked proposal - asked the procurement officer
to provide the scoring breakdown, comments from the reviewers, and the two top-
scoring proposals. On August 16 Van Ness Feldman filed a protest of the Notice of
Intent - 11 days after it received the requested documents and 25 days after the Notice
of Intent's issuance.
Van Ness Feldman asserted three deficiencies in the Department of Law's
evaluation and processing of proposals: (1) the weighting of categories in the scoring
was inconsistent with the RFP's terms; (2) the reviewers inappropriately considered an
evaluation factor not specified in the RFP; and (3) the procurement officer erred by
accepting Davis Wright Tremaine's late-filed proposal in violation of 2 Alaska
1
Administrative Code (AAC) 12.250. Van Ness Feldman also stated that, although its
2
protest was filed after the ten-day deadline for protests, it should be considered under
the "good cause" exception to the deadline.3
1 2 AAC 12.250 (2013) provides: "Unless otherwise provided in the request
for proposals, a proposal, correction, modification, or withdrawal received after the date
and time set for receipt of proposals is late, and may not be accepted unless the delay is
due to an error of the contracting agency."
2
AS 36.30.565(a) provides, in relevant part: "A protest based upon alleged
improprieties in an award of a contract or a proposed award of a contract must be filed
within 10 days after a notice of intent to award the contract is issued by the procurement
officer."
3 AS 36.30.565(b) provides: "If the protester shows good cause, the
procurement officer of the contracting agency may consider a filed protest that is not
timely."
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----------------------- Page 5-----------------------
The procurement officer determined Van Ness Feldman had shown good
cause under AS 36.30.565(b) and responded to the merits of Van Ness Feldman's
protest. The procurement officer, acting on the advice of the Department of
Administration's Chief Procurement Officer, concluded that 2 AAC 12.250 prohibited
consideration of Davis Wright Tremaine's late-filed proposal and that correction of the
scoring errors Van Ness Feldman noted resulted in a determination that Van Ness
Feldman's proposal was the most advantageous to the State. The Department of Law
issued a second Notice of Intent, declaring Davis Wright Tremaine's proposal
nonresponsive for lateness and awarding Van Ness Feldman the legal services contract.
Davis Wright Tremaine timely protested the Notice of Intent awarding Van
Ness Feldman the contract, arguing that Van Ness Feldman had failed to show good
cause for the late-filed protest and that Van Ness Feldman was not a qualified offeror
because Van Ness Feldman did not have a certificate of authority to transact business in
Alaska. Davis Wright Tremaine also asserted that the procurement officer should not
have rescinded the acceptance of Davis Wright Tremaine's late proposal because (1) the
Alaska Administrative Code provides discretion to accept late proposals and (2) the State
should follow the federal government's practice of allowing its procurement officers to
accept late proposals.
The procurement officer denied Davis Wright Tremaine's protest,
explaining that the procurement code did not give her authority to accept late proposals.
She also reiterated that Van Ness Feldman's protest was properly considered for good
cause and deemed all other grounds of Davis Wright Tremaine's protest moot. The State
awarded Van Ness Feldman the legal services contract.
-5- 6908
----------------------- Page 6-----------------------
B. Proceedings
Davis Wright Tremaine appealed the procurement officer's denial of its
4 The Commissioner
protest to the Commissioner of the Department of Administration.
referred the matter to the Office of Administrative Hearings.5 A hearing officer reviewed
briefs from the Department of Law, Davis Wright Tremaine, and Van Ness Feldman, and
ultimately recommended that the Commissioner reject the appeal and confirm the
contract award to Van Ness Feldman.
The hearing officer rejected Davis Wright Tremaine's argument that the
procurement officer erred in considering Van Ness Feldman's late-filed protest,
concluding that the procurement officer properly exercised her discretion in finding good
cause to consider the protest. The hearing officer found that, although Van Ness
Feldman did not show sufficient reason for the delay in filing, Van Ness Feldman raised
serious and substantial claims that the procurement code had been violated - the
assertions that proposals were not evaluated consistently with the RFP criteria and that
a late proposal was wrongly accepted provided good cause to consider the late protest.
The hearing officer also rejected Davis Wright Tremaine's argument that
the procurement code and RFP did not prohibit the procurement officer from accepting
Davis Wright Tremaine's late proposal. The hearing officer interpreted 2 AAC 12.250
to mean that "absent an explicit provision in the RFP, a late proposal may not be
accepted unless the delay is due to an error of the contracting agency." After finding that
the RFP did not contain such an explicit provision, the hearing officer concluded that
4 We refer to the Department of Administration as the "Department," and to
the Commissioner of the Department of Administration as the "Commissioner."
5 See AS 36.30.670; AS 44.64.030(a)(25).
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----------------------- Page 7-----------------------
"the procurement officer ought not to have accepted [Davis Wright Tremaine's] late
proposal."
Finally, the hearing officer rejected the argument that Van Ness Feldman
could not be awarded the contract because it lacked a certificate of authority. The
hearing officer noted that the RFP did not require offerors to possess a certificate and that
"the lack of a certificate does not prevent [Van Ness Feldman] from being legally
qualified to enter into a contract."
The Department, through the Commissioner, adopted the hearing officer's
6
decision and order. Davis Wright Tremaine appealed the Department's decision to the
superior court.7
The superior court held the Department acted reasonably when it
interpreted the RFP and 2 AAC 12.250 to prohibit consideration of any late-filed
proposal. It also held the Department's determination of good cause to accept Van Ness
Feldman's late-filed protest was reasonable, applying the same three factors used by the
hearing officer. Finally, it held the Department reasonably considered Van Ness
Feldman's initial proposal to be responsive despite Van Ness Feldman's lack of a
certificate of authority to conduct business in Alaska. Accordingly, the superior court
affirmed the Department's final decision.
Davis Wright Tremaine appeals.
III. STANDARD OF REVIEW
"When the superior court is acting as an intermediate court of appeal in an
administrative matter, we independently review the merits of the agency or
6 Because the Commissioner adopted the hearing officer's decision, the
rationale and interpretations contained in the decision are attributed to the Department
through the Commissioner. See AS 36.30.675, .680.
7 See AS 36.30.685(a).
-7- 6908
----------------------- Page 8-----------------------
8
administrative board's decision." We apply different standards of review to agency
decisions depending on the subject of review.
We apply the reasonable basis standard to questions of law involving
"agency expertise or the determination of fundamental policies within the scope of the
9
agency's statutory functions." When applying the reasonable basis test, we "seek to
determine whether the agency's decision is supported by the facts and has a reasonable
10
We
basis in law, even if we may not agree with the agency's ultimate determination."
apply the substitution of judgment standard to questions of law where no agency
11
expertise is involved. Under the substitution of judgment standard, we may "substitute
[our] own judgment for that of the agency even if the agency's decision had a reasonable
basis in law."12
8 Shea v. State, Dep't of Admin., Div. of Ret. & Benefits , 267 P.3d 624, 630
(Alaska 2011) (citing Hester v. State, Pub. Emps.' Ret. Bd. , 817 P.2d 472, 474 (Alaska
1991)).
9 Marathon Oil Co. v. State, Dep't of Natural Res. , 254 P.3d 1078, 1082
(Alaska 2011) (citing Matanuska-Susitna Borough v. Hammond , 726 P.2d 166, 175
(Alaska 1986)); see also May v. State, Commercial Fisheries Entry Comm'n , 175 P.3d
1211, 1215 (Alaska 2007) (citing Handley v. State, Dep't of Revenue , 838 P.2d 1231,
1233 (Alaska 1992)).
10
Tesoro Alaska Petroleum Co. v. Kenai Pipe Line Co., 746 P.2d 896, 903
(Alaska 1987) (citing Kelly v. Zamarello , 486 P.2d 906, 918 (Alaska 1971)).
11 Marathon Oil , 254 P.3d at 1082 (quoting Hammond , 726 P.2d at 175);
May , 175 P.3d at 1215 (citing Handley , 838 P.2d at 1233)).
12
Tesoro Alaska, 746 P.2d at 903 (citing Earth Res. v. State, Dep't of
Revenue , 665 P.2d 960, 965 (Alaska 1983)).
-8- 6908
----------------------- Page 9-----------------------
We apply the "reasonable and not arbitrary" test to review the validity of
administrative regulations.13 We review an agency's interpretation and application of its
14 "We will defer to the
own regulations using the reasonable basis standard of review.
agency unless its 'interpretation is plainly erroneous and inconsistent with the
regulation.' "15 "We give more deference to agency interpretations that are 'longstanding
and continuous.' "16
We also "will evaluate an agency's interpretation of regulations for
17 This is a question of law to which
consistency with the statute on which it is based."
we apply the appropriate standard of review based on the level of agency expertise
involved. "Even under the independent judgment standard we '[give] some weight to
what the agency has done, especially where the agency interpretation is
18
longstanding.' " When interpreting statutes and regulations, seemingly conflicting
13 May , 175 P.3d at 1215 (citing Handley , 838 P.2d at 1233).
14 Kuzmin v. State, Commercial Fisheries Entry Comm'n , 223 P.3d 86, 89
(Alaska 2009) (citing Copeland v. State, Commercial Fisheries Entry Comm'n, 167 P.3d
682, 683 (Alaska 2007)).
15 Id. (quoting Copeland, 167 P.3d at 683).
16 Marathon Oil , 254 P.3d at 1082 (quoting Premera Blue Cross v. State,
Dep't of Commerce, Cmty. & Econ. Dev., Div. of Ins. , 171 P.3d 1110, 1119 (Alaska
2007)).
17 Forquer v. State, Commercial Fisheries Entry Comm'n , 677 P.2d 1236,
1241 (Alaska 1984) (citing State, Commercial Fisheries Entry Comm'n v. Templeton,
598 P.2d 77, 81 (Alaska 1979)).
18 Palmer v. Municipality of Anchorage, Police & Fire Ret. Bd. , 65 P.3d 832,
837 n.7 (Alaska 2003) (alteration in original) (quoting Usibelli Coal Mine, Inc. v. State,
Dep't of Natural Res. , 921 P.2d 1134, 1142-43 (Alaska 1996)).
-9- 6908
----------------------- Page 10-----------------------
provisions must be harmonized unless such an interpretation would be at odds with
19
statutory purpose.
IV. DISCUSSION
A. The Department's Decision To Accept Van Ness Feldman's Late-Filed
Protest For "Good Cause" Was Reasonable.
Alaska Statute 36.30.565(a) requires a protest based on alleged
improprieties in a contract award to be filed within ten days after the notice of intent to
award the contract is issued. The statute allows consideration of a late-filed protest "[i]f
the protestor shows good cause."20 "Good cause" in this context is not defined by statute
or regulation.
Davis Wright Tremaine argues that the Department erred in considering
Van Ness Feldman's protest because it was filed after the statutory deadline for protests
and Van Ness Feldman failed to show "good cause." The implication of this argument
is that the procurement officer could not have rescinded the contract award to Davis
Wright Tremaine absent Van Ness Feldman's protest. Although we are skeptical of the
proposition that a procurement officer cannot sua sponte rescind a contract award after
discovering a material error in the procurement process, we do not need to address it
because the procurement officer's determination that there was good cause to accept Van
Ness Feldman's late-filed protest is reasonable.
The parties do not disagree that the protest was filed after the statutory
deadline. They instead dispute whether the Department erred in concluding Van Ness
Feldman demonstrated good cause. The Department relied on factors established in prior
administrative adjudications, considering the timing of the protest, the nature of the
19 Progressive Ins. Co. v. Simmons , 953 P.2d 510, 516-17 (Alaska 1998).
20 AS 36.30.565(b).
-10- 6908
----------------------- Page 11-----------------------
21
objections raised, and the strength of the evidence presented. Although the Department
found that Van Ness Feldman did not show "sufficient reason for filing its protest late,"
it found that the claims raised in the protest were "serious and substantial" and the
proffered evidence "undisputed" for at least two of the issues, including Davis Wright
Tremaine's late proposal submission. The Department therefore concluded that there
was good cause to consider Van Ness Feldman's protest despite its untimeliness.22
We review the Department's application of its "good cause" factors to the
23
facts for reasonableness. An assertion that a proposal was unlawfully accepted after
the deadline raises a serious concern about the procurement process. And the evidence
21 See Payroll City v. Dep't of Envtl. Conservation , OAH No. 05-0583-PRO,
at 5 (Jan. 30, 2006); see also Scientific Fishery Sys., Inc., Dep't of Admin. No. 98-08
(July 26, 1999) ("[T]he term 'good cause' in AS 36.30.565(b) includes not only 'good
cause' for a delay in filing the protest, but also 'good cause' for considering the merits
of the protest, even though it is untimely.").
22 Davis Wright Tremaine contends on appeal that use of the merit-based
factors - the nature of the objections and the strength of the evidence - "extends the
'good cause' standard beyond its statutory language and should be rejected." Davis
Wright Tremaine waived this argument by accepting the propriety of the merit-based
factors' use in its arguments at the administrative and superior court levels. See Trs. for
Alaska v. State, Dep't of Natural Res. , 865 P.2d 745, 748 (Alaska 1993) ("[A] party must
raise an issue during the administrative proceedings to preserve the issue for appeal.");
Zeman v. Lufthansa German Airlines, 699 P.2d 1274, 1280 (Alaska 1985) ("As a general
rule, a party may not present new issues or advance new theories [on appeal] to secure
a reversal of a lower court decision." (citing O'Neill Investigations, Inc. v. Ill. Emp'rs
Ins. , 636 P.2d 1170, 1175 n.7 (Alaska 1981))).
We nonetheless note that AS 36.30.565(b) does not restrict the definition
of "good cause," and it is not readily apparent that it is unreasonable for the Department
to interpret "good cause" to encompass the merits of a protest to promote a policy of
correcting serious errors in the procurement process.
23 See Kelly v. Zamarello, 486 P.2d 906, 917 (Alaska 1971).
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----------------------- Page 12-----------------------
that Davis Wright Tremaine's proposal was filed late is uncontested. We thus hold that
the Department's conclusion that there was good cause to consider Van Ness Feldman's
late-filed protest was reasonable.
B. The Department's Interpretation That It Was Not Permitted To
Accept Davis Wright Tremaine's Late-Filed Proposal Is Reasonable
And Not Inconsistent With Statute.
The Department relied on 2 AAC 12.250 in determining that Davis Wright
Tremaine's proposal should have been rejected as untimely. The Department interpreted
the regulation's "unless otherwise provided" phrase to mean that no exception to the bar
on late proposals is available unless a proposal request contains an explicit provision
"stating under what conditions a late proposal would be accepted." And the Department
determined the RFP did not contain a sufficiently specific waiver to overcome the
regulation's general prohibition on acceptance of late proposals. Evaluating whether the
Department's determination is lawful involves four inquiries: (1) whether 2 AAC 12.250
is valid; (2) whether the Department's interpretation of that regulation is reasonable;
(3) whether the Department's interpretation of that regulation is consistent with statute;
and (4) whether the Department's determination that the RFP lacked the necessary
waiver is reasonable. Davis Wright Tremaine does not contest that 2 AAC 12.250 is
consistent with statute and is reasonable and not arbitrary, and therefore is valid. It
instead argues that the Department's strict interpretation of 2 AAC 12.250 is not
reasonable and is inconsistent with statute because the regulation must be interpreted to
give effect to a "common law materiality standard" the procurement code preserved for
24 Davis Wright Tremaine also contends that it is unreasonable for
late-filed proposals.
24 Under the common law materiality standard, "a variance from the
requirements of an RFP will render a proposal nonresponsive only if that variance is
material." Laidlaw Transit, Inc. v. Anchorage Sch. Dist. , 118 P.3d 1018, 1032 (Alaska
(continued...)
-12- 6908
----------------------- Page 13-----------------------
the Department to conclude that the RFP's general waiver provision does not satisfy
2 AAC 12.250's "unless otherwise provided" clause.
Assuming a regulation is valid, we review whether an agency's
interpretation of its regulation is " 'plainly erroneous and inconsistent with the
25
regulation' " - i.e., whether it has a reasonable basis. Davis Wright Tremaine does
not argue that the Department's interpretation is plainly erroneous or inconsistent with
the regulation itself, only that Davis Wright Tremaine's interpretation is better. Davis
Wright Tremaine essentially asks us to apply a substitution of judgment standard to
review whether the Department's interpretation is consistent with the regulation. But it
is well established that an agency's interpretation of its own regulations is reviewed
under the reasonable basis standard; this standard "recognizes that the agency is best able
26
And the Department's
to discern its intent in promulgating the regulation at issue."
interpretation of 2 AAC 12.250 is a reasonable one. Requiring an RFP to specifically
provide an exception to the lateness rule is not inconsistent with 2 AAC 12.250's
provision that an RFP must "otherwise provide" an exception for the Department to
accept late-filed proposals. Moreover, requiring a specific exception promotes a policy
24 (...continued)
2005). "A variance is material if it gives the bidder a substantial advantage over other
bidders and thereby restricts or stifles competition." Chris Berg, Inc. v. State, Dep't of
Transp. & Pub. Facilities, 680 P.2d 93, 94 (Alaska 1984).
25
Kuzmin v. State, Commercial Fisheries Entry Comm'n , 223 P.3d 86, 89
(Alaska 2009) (quoting Copeland v. State, Commercial Fisheries Entry Comm'n, 167
P.3d 682, 683 (Alaska 2007)).
26
Rose v. Commercial Fisheries Entry Comm'n , 647 P.2d 154, 161 (Alaska
1982) (citing 2 KENNETH CULP DAVIS , ADMINISTRATIVE LAW TREATISE § 7.22, at 105-
08 (2d ed. 1979)); see also May v. State, Commercial Fisheries Entry Comm'n , 175 P.3d
1211, 1215-16 (Alaska 2007); Lauth v. State, Dep't of Health & Soc. Servs., Div. of Pub.
Assistance , 12 P.3d 181, 184 (Alaska 2000).
-13- 6908
----------------------- Page 14-----------------------
of giving offerors, as well as procurement officers, clear guidance as to when and under
27
what circumstances a lateness waiver is available. The Department's interpretation is
28 29
longstanding and is entitled to particular deference. Therefore, the Department's
interpretation that 2 AAC 12.250 bars acceptance of late proposals absent a specific
exception in the RFP is reasonable.
We also review whether the agency's interpretation is inconsistent with or
30
An agency's interpretation is
contrary to the statute on which the regulation is based.
27 The Department contends that its interpretation is necessary to protect the
integrity of the process and treat all offerors equally. See Geo-Seis Helicopters, Inc. v.
United States, 77 Fed. Cl. 633, 646 (2007) (recognizing that the federal strict lateness
rule " 'alleviates confusion, ensures equal treatment of all offerors, and prevents an
offeror from obtaining a competitive advantage that may accrue where an offeror is
permitted to submit a proposal later than the deadline set for all competitors' " (quoting
Argencord Mach. & Equip., Inc. v. United States , 68 Fed. Cl. 167, 173 (2005))). And
the Department's Chief Procurement Officer testified:
Creating a new rule that would vest procurement officers
with the discretion to determine on a case-by-case basis
whether to accept a late proposal would impose significant
administrative burdens on our division and other procurement
units and introduce uncertainty into what has been a well-
understood tenet of state procurement law.
28 See, e.g., Kalen & Assocs. v. Dep't of Natural Res. , OAH No. 08-0123-PRO
(May 13, 2008) (affirming agency's rejection of late proposal even though offeror was
not at fault). The Department's Chief Procurement Officer asserted that in his 28 years
in state procurement, neither he nor his staff has ever allowed a late proposal or bid to
be considered for an award.
29 Marathon Oil Co. v. State, Dep't of Natural Res. , 254 P.3d 1078, 1082
(Alaska 2011) (quoting Premera Blue Cross v. State, Dep't of Commerce, Cmty. & Econ
Dev., Div. of Ins. , 171 P.3d 1110, 1119 (Alaska 2007)).
30
See Trs. for Alaska v. Gorsuch, 835 P.2d 1239, 1245 (Alaska 1992)
(continued...)
-14- 6908
----------------------- Page 15-----------------------
consistent with statute unless the statute's text and purpose prohibit such an
31
interpretation. Davis Wright Tremaine contends that the procurement code -
AS 36.30.005-.995 - preserves the common law materiality standard for proposals. It
argues that interpreting 2 AAC 12.250 to prohibit accepting late proposals absent an
express exception in the RFP nullifies the common law materiality exception and is thus
inconsistent with the procurement code.
Davis Wright Tremaine can prevail on its argument only if the procurement
code requires the Department to apply the common law materiality standard to late-filed
proposals. This is a question of law not involving agency expertise, to which we apply
our own judgment.32
30 (...continued)
(explaining that because an agency's interpretation of its own regulations was "neither
plainly erroneous nor inconsistent with the regulations[,] it should be given effect unless
it is contrary to [the applicable statute]"); Forquer v. State, Commercial Fisheries Entry
Comm'n, 677 P.2d 1236, 1241 (Alaska 1984) (noting "this court will evaluate an
agency's interpretation of regulations for consistency with the statute on which [the
regulation] is based" (citing State, Commercial Fisheries Entry Comm'n v. Templeton,
598 P.2d 77, 81 (Alaska 1979))).
31 Compare Natural Res. Def. Council, Inc. v. U.S. Envtl. Prot. Agency, 25
F.3d 1063, 1070 (D.C. Cir. 1994) (holding agency's interpretation of its regulation not
inconsistent with statute when nothing in statute's language prohibited such
interpretation or required a different interpretation), with Cont'l Training Servs., Inc. v.
Cavazos, 893 F.2d 877, 892 (7th Cir. 1990) (holding regulation could not be interpreted
to exclude hearing on the record that was required by statute's text), and United Transp.
Union v. Dole, 797 F.2d 823, 829 (10th Cir. 1986) (holding regulation could not be
interpreted to permit specific construction project where statute's text prohibited "any"
construction).
32 See, e.g., Harrod v. State, Dep't of Revenue , 255 P.3d 991, 995 (Alaska
2011) (citing Temple v. Denali Princess Lodge, 21 P.3d 813, 815 (Alaska 2001)). Even
under the independent judgment standard of review, we recognize "that an agency's
(continued...)
-15- 6908
----------------------- Page 16-----------------------
The procurement code's text does not expressly adopt the common law
33
materiality standard. And the procurement code directs the Department to adopt
regulations pertaining to "the opening or rejection of bids and offers, and waiver of
informalities in bids and offers," without any reference to the common law materiality
standard.34
Davis Wright Tremaine asserts, however, that the specific structure of
AS 36.30.100 through AS 36.30.290 evidences a legislative intent to preserve the
common law materiality standard for the proposal submission process. These statutes
35
The statute
provide different frameworks for procurement by bids and by proposals.
governing bids expressly prohibits acceptance of bids received after the due date and
36
The statute
time unless the delay was due to an error of the contracting agency.
32 (...continued)
interpretation of a law within its area of jurisdiction can help resolve lingering ambiguity,
particularly when the agency's interpretation is longstanding." Bartley v. State, Dep't
of Admin., Teacher's Ret. Bd., 110 P.3d 1254, 1261 (Alaska 2005) (citing Union Oil Co.
v. State, Dep't of Revenue, 560 P.2d 21, 23, 25 (Alaska 1977)). In such cases, we "look
for 'weighty reasons' before substituting our judgment for the agency's." Id. (quoting
Kelly v. Zamarello , 486 P.2d 906, 910-11 (Alaska 1971)).
33
The statute's general savings clause is insufficient to impose specific extra-
statutory common law restrictions on the discretion the statute confers on the
Department. See AS 36.30.860 ("Unless displaced by the particular provisions of this
chapter, the principles of law and equity . . . shall supplement the provisions of this
chapter.").
34 AS 36.30.040(b)(5) (emphasis added).
35 Compare AS 36.30.100-.190 (competitive sealed bids), with AS 36.30.200-
.250 (competitive sealed proposals).
36 AS 36.30.160(a).
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governing proposals contains no provision relating to timeliness of submission, other
than that an RFP "must contain the date, time, and place for delivering proposals."37
We do not agree that this structure demonstrates legislative intent to require
the Department to adopt and apply the common law materiality standard for late
proposals. Nor has Davis Wright Tremaine cited any legislative history in support of this
assertion. Although a provision's omission in a statute typically is interpreted to be
intentional when the provision is present in a similar statute,38 it does not follow that the
statute's rule for bid submissions necessarily prohibits the Department from adopting a
similar rule for proposal submissions. The difference instead can be read to mean that
the Department is not required to adopt a policy rejecting all late proposals, as it must
do for bids. But nothing in the statute's structure requires the Department to adopt and
apply the common law materiality standard to proposals, and nothing in the statute
prohibits the Department from interpreting 2 AAC 12.250 to bar acceptance of late
proposals absent a specific exception in the RFP. Had the legislature intended to require
the Department to apply the common law materiality standard to late proposals, it could
39
The Department's interpretation of
have done so explicitly, but it did not.
2 AAC 12.250 is not inconsistent with the procurement statute.
The final inquiry relates to the reasonableness of the Department's
determination that the RFP did not contain the specific waiver necessary to overcome the
37 AS 36.30.210(a).
38 See 2B NORMAN J. SINGER & J.D. SHAMBIE SINGER , SUTHERLAND ON
STATUTES AND STATUTORY CONSTRUCTION § 51:2, at 213-14 (7th ed. 2007).
39 As the U.S. Supreme Court has stated, "Congress . . . does not alter the
fundamental details of a regulatory scheme in vague terms or ancillary provisions - it
does not, one might say, hide elephants in mouseholes." Whitman v. Am. Trucking
Ass'ns , 531 U.S. 457, 468 (2001).
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general prohibition on acceptance of late proposals in 2 AAC 12.250. The original RFP
stated: "Proposals received after 3:00 pm on June 17, 2011, will be rejected and returned
40
to the sender." The RFP also contained a general waiver provision: "The State
reserves the right to . . . waive deviations from the terms of the RFP if the State
determines the deviations are not material." The Department determined "[t]his general
clause allowing a waiver of non-material deviations from the RFP does not allow waiver
of a deviation from a regulation" - that is, the general waiver clause was not sufficiently
specific to "demonstrate the purchasing agency's intent" to render the prohibition in
2 AAC 12.250 inapplicable.
The Department's determination that the RFP did not contain a specific
exception is a question of law involving the Department's expertise and is thus reviewed
41
The RFP contained no provision expressly
under the reasonable basis standard.
indicating that 2 AAC 12.250's prohibition on accepting late-filed proposals did not
apply. And the clause cautioning that all late proposals would be rejected reaffirmed the
regulation's prohibition. We therefore hold that the Department's conclusion that the
RFP did not contain an explicit provision permitting acceptance of late proposals is
reasonable.42
40 The RFP later was amended to change the deadline date to June 29.
41 See Burke v. Houston NANA, L.L.C., 222 P.3d 851, 858 (Alaska 2010); May
v. State, Commercial Fisheries Entry Comm'n, 175 P.3d 1211, 1215 (Alaska 2007).
42 Davis Wright Tremaine's contention that it is unreasonable to conclude the
RFP's general waiver clause is insufficient to overcome 2 AAC 12.250's prohibition on
acceptance of late proposals is based on the assumption that the Department cannot
lawfully interpret the regulation's "unless otherwise provided" clause as requiring an
RFP exception to be specific. But the Department's interpretation is lawful, so Davis
Wright Tremaine's argument fails. Davis Wright Tremaine does not argue that it is
(continued...)
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C. The Department's Decision That Van Ness Feldman's Lack Of A
Certificate Of Authority Did Not Render Van Ness Feldman's
Proposal Nonresponsive Is Reasonable.
Davis Wright Tremaine argues that the Department erred in concluding that
Van Ness Feldman's failure to obtain a certificate of authority before submitting its
43 We review the
proposal did not render Van Ness Feldman's proposal nonresponsive.
Department's responsiveness determination under the reasonable basis standard.44
Responsiveness requires that a proposal respond to the terms and conditions
set forth in the RFP.45 The RFP did not expressly require offerors to possess a certificate
of authority. Davis Wright Tremaine argues that such a requirement is implied in all
46 But
RFPs because "general principles of law . . . are applicable to all procurements."
compliance with a statutory certification requirement is not necessary for a proposal to
be responsive when the request for proposals does not require such compliance.47 In
addition, the Department provides good reason for not requiring that offerors hold a
certificate of authority prior to proposal submission: imposing such a requirement
42 (...continued)
otherwise unreasonable for the Department to conclude the RFP lacked a specific waiver.
43 AS 10.06.705 provides: "A foreign corporation may not transact business
in this state until it has been issued a certificate of authority . . . ."
44 Laidlaw Transit, Inc. v. Anchorage Sch. Dist., 118 P.3d 1018, 1032 (Alaska
2005).
45 See Gunderson v. Univ. of Alaska, Fairbanks, 922 P.2d 229, 235 (Alaska
1996).
46 See AS 36.30.860 ("[T]he principles of law and equity, including . . . law
relative to capacity to contract . . . shall supplement the provisions of this chapter.").
47 See State, Dep't of Educ. v. Nickerson, 711 P.2d 1165, 1167-68 (Alaska
1985).
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"could limit competition as some corporations may not wish to complete the required
[certificate] application if they are not awarded the contract." Accordingly, we hold the
Department reasonably concluded a certificate of authority was not required for Van
Ness Feldman's proposal to be responsive.48
V. CONCLUSION
We AFFIRM the superior court's decision upholding the Department of
Administration's denial of Davis Wright Tremaine's protest and the award of the legal
services contract to Van Ness Feldman.
48 Davis Wright Tremaine also argues that Van Ness Feldman does not qualify
for the interstate commerce exception to the certificate requirement. See
AS 10.06.718(9). The superior court held, without explanation, that Van Ness Feldman
"is a foreign corporation involved in interstate commerce." Because we have determined
that the Department reasonably concluded that Van Ness Feldman was not required to
hold a certificate of authority for its proposal to be responsive, we do not need to reach
the issue whether its proposal submission constituted "transacting business in interstate
commerce" under AS 10.06.718(9).
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