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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Bachner Company Incorporated v. State, Dept. of Administration (12/9/2016) sp-7138

Bachner Company Incorporated v. State, Dept. of Administration (12/9/2016) sp-7138

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

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                       THE SUPREME COURT OF THE STATE OF ALASKA                                      

BACHNER  COMPANY                                                )  

INCORPORATED,                                                   )          Supreme  Court  No.  S-15860  



                                                                )          Superior Court No. 4FA-14-02538 CI  



                                                                )          O P I N I O N  



STATE OF ALASKA,                                                                                                    

                                                                )          No. 7138 - December 9, 2016  


DEPARTMENT OF                                                   )  

ADMINISTRATION,                                                 )  


                                Appellee.                       )  



                        ppeal  from  the  Superior  Court  of  the  State  of  Alaska,  


                     Fourth Judicial District, Fairbanks, Jane F. Kauvar, Judge.  


                     Appearances:  Michael C. Kramer, Kramer and Associates,  


                     Fairbanks, for Appellant.   Elizabeth M. Bakalar, Assistant  


                     Attorney General, and Craig W. Richards, Attorney General,  


                     Juneau, for Appellee.  


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


                     Bolger, Justices.  [Fabe, Justice, not participating.]  


                     MAASSEN, Justice.  




                     This case involves a breach of contract claim brought by a contractor that  


leased office space to the State of Alaska.  After a ten-year lease term and a one-year  


renewal, the contractor alleged that the State was in default on its rent payments, and it  

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filed suit in superior court.  The State moved to dismiss the complaint, arguing that the  


claim was governed by the Alaska State Procurement Code and that the contractor had  


failed to exhaust its remedies under the code before filing suit. The superior court agreed  


and granted the State's motion to dismiss.  The contractor appealed.  


                    We conclude that the procurement code covers a rent dispute over an  


ongoing lease, that the contractor's claim falls under the procurement code, and that the  


contractor must exhaust its administrative remedies before filing suit in superior court.  


We therefore affirm the superior court's dismissal of the contractor's complaint.  




          A.        Facts  


                    In September 2003 Bachner Company Inc. entered into a contract with the  


State of Alaska, Department of Administration, to lease portions of the Denali Building  


in Fairbanks.  Under the contract Bachner leased 15,730 square feet of office space and  


40 parking spaces to the State for use by the Department of Natural Resources. The lease  


was issued through the State's Request for Proposal (RFP) process, and the terms of the  


RFP were incorporated into the lease.  


                    The lease had a "firm term" of ten years beginning September 26, 2003 and  


ending September 30, 2013.  The lease gave the State the option at the end of the firm  


term "to renew this lease for Ten (10) additional one (1) year periods to be exercised by  


giving [Bachner] written notice prior to the expiration of each term."   The lease set  


monthly rent on most of the occupied space, but it also provided that 1,400 square feet  


was rent-free for the duration of the ten-year firm term; upon renewal the State was  


required to either pay rent on this space or vacate it.  Although the full lease is not in the  


record before us, Bachner asserts that it also provided that "[a]ny dispute arising out of  


the lease shall be resolved under the laws of Alaska" and contained a forum selection  


                                                               -2-                                                         7138

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

clause providing that "[a]ny appeal of an administrative order and any original action to                                                                                                                                                                                                                                                                                                                                                                   

 enforce any provision of this lease or to obtain any relief from or remedy in connection                                                                                                                                                                                                                                                                                                                   

with this lease may be brought only in the Superior Court for the Third Judicial District                                                                                                                                                                                                                                                                                                                                     

of Alaska."   

                                                                      In   May   2013,   four   months   before   the   end   of   the   firm term,                                                                                                                                                                                                                                                                    the   State  

 exercised its first one-year renewal option by signing an amendment to the original lease.                                                                                                                                                                                                                                                                                                                                                                                 

The amendment provided that "[a]ll other terms and conditions of the lease remain[ed]                                                                                                                                                                                                                                                                                                                       

the same."                                                  The State signed another lease amendment in September 2013, this one                                                                                                                                                                                                                                                                                                                 

 adjusting the monthly rent for inflation as of October 1, 2013.                                                                                                                                                                                                                                                                     The amendment did not                                                                                           

mention rent for the 1,400 square feet that was being provided rent-free.                                                                                                                                                                                                                                                                                                                       

                                                                       Oncethefirst renewal                                                                                             period began on October 1, 2013, theStatecontinued                                                                                                                                                                         

occupying the property but did not pay rent on the previously rent-free portion. Bachner                                                                                                                                                                                                                                                                                                                                 

brought this issue to the State's attention, and the State agreed to hire a third party to                                                                                                                                                                                                                                                                                                                                                                 

determine the appropriate rental rate for the space, as provided in the lease.  The State                                                                                                                                                                                                                                                                                      

 also confirmed that "[t]he rate adjustment for the 1,400 square feet of space [would] be                                                                                                                                                                                                                                                                                                                                                                

retroactive to the start of this first renewal option as indicated in the lease (October 1,                                                                                                                                                                                                                                                                                                                                                                 


                                                                      Following a real estate broker's independent evaluation, the parties agreed                                                                                                                                                                                                                                                                                  

to value the previously rent-free space at $2.35 per square foot per month.  According  

to Bachner, however, the State failed to include this amount in its rent payments.                                                                                                                                                                                                                                                                                                                                                                    In  


April 2014 Bachner sent a letter notifying the State that it was in default on its rent.                                                                                                                                                                                                                                                                                                                                                        The  


 State subsequently signed a lease amendment - referred to as Amendment No. 13 -  

                                    1                                 Bachner's letter read in its entirety:                                                                                                                                                   "Lessee (State of Alaska) is in default                                                                                                                            

in their payment of rent on Lease #2532 and Lease #2530 [the Denali Building lease].                                                                                                                                                                                                                                                                                                                                                                                        

Please consider this your official notification."                                                                                                                                                                                                       

                                                                                                                                                                                                                             -3-                                                                                                                                                                                                             7138

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on August 5, 2014, which adopted the $2.35 per-square-foot valuation of the additional  


1,400 square feet and added this amount to the rent owed under the lease.  


                    Bachner contendedthatAmendment No. 13 wasinvalid becauseit had been  


signed on the State's behalf by a contracting officer who lacked the requisite authority.  


Bachner therefore notified the State that it had failed to cure its default within 60 days  


of receiving notice and that it remained in breach of the lease.  The State denied that it  


was in breach, rejecting Bachner's contention that Amendment No. 13 had not been  


properly signed.  The State also informed Bachner of the right, if Bachner disagreed, to  


"file a contract claim in accordance with [AS] 36.30.620" under the procurement code.  


          B.        Proceedings  


                    In September 2014, rather than filing a claim under the procurement code,  


Bachner  filed  a  breach  of  contract  claim  in  Fairbanks  superior  court.                                     Bachner's  


complaint gave a partial factual history of the lease agreement and amendments but did  


not include the lease as an attachment.  Bachner alleged that "[o]n August 4, 2014, [the  


State] may have amended [the lease] to pay for 1,400 . . . square feet of occupied space  


retroactive to October 1, 2013, but has yet to pay any rent for any of this space."  It  


further alleged that the State's "[f]ailure to pay rent on the 1,400 square feet of formerly  


free space since October 1, 2013 constitute[d] a material breach" of the lease agreement,  


that Bachner had notified the State of the breach, and that the State had failed to cure the  


breach within 60 days of notice.  Bachner asserted that "[a]ccording to the lease terms,  


if a breach is not cured within 60 days, the lease is terminated."  Therefore, Bachner  


contended, the State had lost any right it had under the lease to exercise another renewal  


option and instead "must vacate the premises, negotiate another long-term lease by  


October 1, 2014, [and] agree to pay market rate o[f] [$]2.35 [per] square foot on the  


18,194 square feet they occupy or they will be in trespass on the property."  Bachner  


                                                                -4-                                                         7138

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asked the court for an order evicting the State, "[a]ll available contract damages," and its  


costs and attorney's fees.  


                    The State moved to dismiss the case under Alaska Civil Rule 12(b)(6) on  


the ground that the face of the complaint showed that Bachner was not entitled to relief  


in court. The State argued that the lease plainly fell under the Alaska procurement code,  


that the code "provides the exclusive remedy for claims arising out of contracts awarded  


under  the  code,"  and  that  Bachner  "ha[d]  not  exhausted  the  statutorily  required  


administrative process" before filing suit.   The State argued that Bachner's suit was  


therefore barred by the code's exclusive remedy provision.  


                    In  opposition,  Bachner  characterized  the  case  as  "a  simple  breach  of  


contract case between a landlord and tenant for failure to pay rent."  It argued that the  


case was a "payment dispute" within the meaning of AS 37.05.285 and thus was exempt  


from the exclusive remedy provision of the procurement code.  Implicit in Bachner's  


argument was that the relevant "procurement" ended when the initial lease was signed  


more than ten years before; it argued that "the procurement code does not control a  


subsequent lease dispute."  Bachner also asserted that the only available remedy for a  


claim under the procurement code was the recovery of bid preparation costs - an  


anomalous result in a rent dispute occurring years after the lease had been bid on and  




                    The superior court held a status hearing on the State's motion to dismiss.  


The court preliminarily explained that it had not yet ruled on the motion because the  


terms of the lease were difficult to understand based only on its description in the  


complaint.  After hearing the parties' arguments, however, the court adopted the State's  


view of the case, concluding that it could decide the motion to dismiss based solely on  


the allegations of Bachner's complaint.   The court reasoned that, even taking all the  


                                                               -5-                                                         7138

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

allegations in the complaint as true, "the basis for [Bachner's] recovery . . . was found                                                                                          

in the statute under the procurement code."                                                                         The court later issued a written order                                              

confirming its grant of the State's motion to dismiss.                                                                              


                                 Bachner appeals the superior court's dismissal order.                                                                                  




                                 "A grant of a motion to dismiss a complaint for failure to state a claim  


under Alaska Civil Rule 12(b)(6) is reviewed de novo.  In reviewing a Rule 12(b)(6)  


dismissal, we liberally construe the complaint and treat all factual allegations in the  



                                                 "Because motions to dismiss are disfavored, 'a complaint should not  

complaint as true." 


be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff  



can prove no set of facts that would entitle him or her to relief.' "                                                                                             "In other words, 'the  


complaint  need  only  allege  a  set  of  facts  consistent  with  and  appropriate  to  some  



enforceable cause of action.' " 

                 2               Bachner also appeals the superior court's award of attorney's fees to the                                                                                                    

State, but it did not brief the issue, which is therefore waived.                                                                                      See Harris v. Ahtna, Inc.                                    ,  

 193 P.3d 300, 305 n.4 (Alaska 2008) (holding that although certain points were included                                                                                                         

in the appellant's points on appeal, "he did not substantively brief them and they are                                                                                                                        

therefore deemed waived").                                             

                3                Clemensen v. Providence Alaska Med. Ctr., 203 P.3d 1148, 1151 (Alaska  


2009) (citing Jacob v. State, Dep't of Health & Soc. Servs., Office of Children's Servs.,  


 177 P.3d 1181, 1184 (Alaska 2008)).  


                 4               Roberson v. Southwood Manor Assoc., LLC, 249 P.3d 1059, 1060 (Alaska  


2011) (alteration omitted) (quoting Adkins v. Stansel , 204 P.3d 1031, 1033 (Alaska  



                 5               Clemensen, 203 P.3d at 1151 (quoting Odom v. Fairbanks Mem'l Hosp.,  


999 P.2d 123, 128 (Alaska 2000)).  


                                                                                                       -6-                                                                                               7138

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                       "Issues   of   statutory   interpretation   present   questions   of   law warranting   


independent review."                                                                                                                          

                                        In reviewing these questions de novo, we "adopt the rule of law  



that is most persuasive in light of precedent, reason, and policy." 



                       The grant or denial of a motion to dismiss under Rule 12(b)(6) depends on  


whether the complaint "allege[s] a set of facts consistent with and appropriate to some  



enforceable cause of action."                                                                                                                 

                                                   Bachner contends that the allegations of its complaint met  


this standard.   The State argues that Bachner failed to state a valid claim for relief  


because, under the procurement code's exclusive remedy provision, a contract claim on  


a State procurement - including a rent dispute over a long-term lease - cannot be  


brought  in  superior  court  before  the  prescribed  administrative  remedies  have  been  


exhausted.  Bachner does not dispute that it failed to exhaust administrative remedies;  


it contends only that it was not required to.  But because we conclude that Bachner's  


claim is subject to the procurement code's exclusive remedy provision, we hold that the  


superior court did not err in dismissing Bachner's complaint.  


           A.	         Bachner's Suit In Superior Court Is Barred By The Exclusive Remedy  


                       Provision Of The Procurement Code.  


                       Bachner argues that the procurement code's proceduresgoverning contract  


claims cannot apply to a rent dispute over a lease that was signed years ago.  It argues  


alternatively that its claim is a "payment dispute" that is expressly exempted from the  

           6           Roberson, 249 P.3d at 1060 (citing                          W. Star Trucks, Inc. v. Big Iron Equip.               

Serv., Inc.       , 101 P.3d 1047, 1048 (Alaska 2004)).                

           7           Id. (alteration omitted) (quoting W. Star Trucks, Inc., 101 P.3d at 1048).  


           8           Clemensen, 203 P.3d at 1151 (quoting Odom, 999 P.2d at 128).  


                                                                       -7-	                                                                7138

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

code's exclusive remedy provision. We find neither argument supported by the relevant                                                                               

statutory language.                       

                            1.	           The   procurement   code's   exclusive   remedy   provision   bars a  

                                          direct action in superior court for claims covered by the code.                                                               

                            The state procurement code, found in Title 36, Chapter 30 of the Alaska                                                                   


Statutes,   generally   applies   to   contracts   entered   into   by   the   State.                                                                                

                                                                                                                                                     Alaska  Statute  


36.30.850(b) provides that the procurement code "applies to every expenditure of state  


money by the state, acting through an agency, under a contract," with listed exceptions  



not relevant here.                           State leases of real property are explicitly made subject to the  


procurement   code:                               AS   36.30.080(a)   provides   that   "[t]he                                                [D]epartment   [of  


Administration] shall lease space for the use of the state or an agency wherever it is  


necessary and feasible, subject to compliance with therequirements ofthis chapter." The  


code's  definitions  explain  that  "  'procurement'  means  buying,  purchasing,  renting,  



leasing, or otherwise acquiring supplies"                                                 and that " 'supplies' . . . includes privately  



owned real property leased for the use of agencies, such as office space."                                                                                   The code's  


definitions also explain that " 'procurement' . . . includes functions that pertain to . . . all  



phases of contract administration,"                                           not just the initial signing of a lease or purchase  

              9	            See  AS 36.30.850.   



                            AS 36.30.850(b)(5) excepts "acquisitions or disposals of real property or  


interest in real property," but the exception itself contains an exception:   "except as  

provided in AS 36.30.080 and 36.30.085."                                                  The cited statutes apply to leases and lease-                                  


purchase agreements.  

              11            AS 36.30.990(19).  


              12            AS 36.30.990(26).  


              13            AS 36.30.990(19).  


                                                                                       -8-	                                                                               7138

----------------------- Page 9-----------------------

contract.   The lease at issue here necessarily falls within the procurement code because                                           

                            14                                                           15                                            16  

it is a State lease                                                                                                          

                               of "privately owned real property"                            "for the use of the state." 


                      For contracts subject to its terms, the procurement code sets out specific  



claim and appeal  procedures governing claims against the State.                                                      Alaska Statutes  


36.30.560-.615 provide the procedure for protesting and appealing contract solicitations  



and contract awards,                  while AS 36.30.620 provides the procedure for disputes arising  


under ongoing contracts.  The latter procedure is initiated when the contractor "file[s] a  



claim concerning a contract awarded under this chapter with the procurement officer." 


The claim must be filed "within 90 days after the contractor becomes aware of the basis  



of  the  claim  or  should  have  known  the  basis  of  the  claim."                                           Subsection  .620(a)  


specifically refers to "lease rate adjustment[s]," confirming that this statutory process  



governs disputes that arise in ongoing leases. 


                      If a claim under AS 36.30.620 "cannot be resolved by agreement," the  


statute further provides that, at the claimant's request, a procurement officer will issue  

           14         See  AS  36.30.990(19).  

           15         AS  36.30.990(26).  

           16         AS  36.30.080(a).  

           17         AS  36.30.550-.699.   

           18         See  AS  36.30.550(a).  

           19         AS  36.30.620(a).  

           20         Id.  

           21         AS   36.30.620(a)  provides  that   "a   lease  rate   adjustment   called   for   in  the  

lease"  is  exempt  from  the  90-day  filing  deadline  and  instead  "must  be  filed  prior  to  the  

expiration  date  of  the  lease."  

                                                                      -9-                                                               7138

----------------------- Page 10-----------------------


a written decision on the claim.                               The written decision must include, in addition to its                                        

rationale, a statement that it constitutes "the final decision of the procurement officer"     


and "may be appealed to the [applicable] commissioner,"                                                                                                   

                                                                                                                 which may be either the  


Commissioner of Administration or the Commissioner of Transportation and Public  



Facilities, depending on subject matter.                                    The code specifies the procedures for hearings  



before  the  commissioner  or  decisions  without  a  hearing.                                                                And  importantly,  


AS 36.30.690 provides that "AS 36.30.560 -.36.30.699 and regulations adopted under  


those sections provide the exclusive procedure for asserting a claim against an agency  



arising in relation to a procurement under this chapter." 


                         The code also specifies the process for appealing a procurement claim to  


the superior court:  A commissioner's final decision "may be appealed to the superior  



court for a trial de novo."                         Claims falling under the procurement code cannot be filed  


in superior court except through this appeal mechanism. This is a matter of jurisdiction:  


The State has generally waived its sovereign immunity with respect to contract claims,  


but the waiver contains an express exception for claims covered by the procurement  

            22           AS  36.30.620(b).  

            23           AS  36.30.620(d).  

            24           AS  36.30.625.   

            25           AS  36.30.630.  

            26           Emphasis  added.   The  "payment  disputes"  exception  to  these  procedures,  

AS  36.30.620(g),  states  that  "[t]his  section  does  not  apply  to  payment  disputes  governed  

by  AS  37.05.285."   We  discuss  below,  in  section  IV.A.3,  why  this  case  is  not  governed  

by  that  exception.  

            27           AS 36.30.685(b).  


                                                                            -10-                                                                      7138

----------------------- Page 11-----------------------


code.                  For such claims, thus, the State has waived its immunity from suit only to the                                                                                                                       

extent that the claim has first proceeded through the procurement code's administrative                                                                                                                                        


                                         We explained the jurisdictional nature of the exclusive remedy provision                                                                                                                             

in   J & S Services, Inc. v. Tomter                                                                         , in which we noted that "Alaska's Code of Civil                                                                                               

Procedure confirms and reinforces the procurement code's exclusive remedy provisions                                                                                                                                                       

by preserving the state's sovereign immunity from liability in any civil action arising                                                                                                                                                               


from a procurement dispute."                                                                                                                                                                                                                              

                                                                                                       In J & S Services, an unsuccessful bidder on a state  


request for proposals sued the State and a state procurement officer in contract and tort  

                                                      30                                                                                                                                               31 

in superior court.                                                                                                                                                                                                                                                

                                                            The superior court dismissed the complaint,                                                                                                     and we affirmed the  



dismissal as to the State.                                                      Weconcludedthat thecomplaint "unquestionably amount[ed]  


to 'a claim against an agency arising in relation to a procurement' " within the meaning  


of the exclusive remedy provision, AS 36.30.690, and that the plaintiff "indisputably  


qualifie[d] as '[a] person who may bring an action under AS 36.30.560-36.30.695' "  

                     28                  AS 09.50.250 provides that "[a] person who may bring an action under                                                                                                                                            

AS 36.30.560-36.30.695 [the procurement code remedy procedures] may not bring an                                                                                                                                                                                    

action under this section except as set out in AS 36.30.685 [the procurement code appeal                                                                                                                                                                


                     29                   139 P.3d 544, 547 (Alaska 2006).  


                     30                  Id. at 546.  


                     31                  Id.  

                     32                  Id. at 547-48.  For reasons not relevant here, we reversed with respect to  


the claim against the state procurement officer.  Id. at 548-49.  


                                                                                                                                -11-                                                                                                                        7138

----------------------- Page 12-----------------------


within the meaning of the sovereign immunity provision.                                                              We therefore held that "the                    

exclusive remedy provision barred the claims."                                                34  


                          Here, too, AS36.30.620 and theprocedures set out in theprocurement code  


- including an eventual right of appeal to the superior court from an adverse decision  


of the relevant commissioner - constitute Bachner's exclusive remedy for its claim.  


The lease falls under the procurement code because it is a contract for the lease of private  



property to the State for use by a state agency.                                              And because "procurement" covers "all  



phases of contract administration,"                                         this dispute arising during the life of the lease  


remains subject to the code.  As someone with a claim under AS 36.30.620, Bachner  


qualifies as "[a] person who may bring an action under AS 36.30.560-36.30.695" within  



the meaning of the sovereign immunity provision.                                                           Bachner is thus limited to those  


statutory remedies and is barred from filing an original action on the same matter in  



superior court. 

             33           Id . at 547-48.

             34           Id.  at 548.

          See AS 36.30.080(a); AS 36.30.850(b).  


             36           AS 36.30.990(19).  


             37           J & S Servs.             , 139 P.3d at 547.         

             38           Id. at 547-48.  


                                                                                  -12-                                                                           7138

----------------------- Page 13-----------------------

                            2.            The exclusive remedy provision applies to ongoing contracts.                                                       

                            Bachner argues that a rent payment dispute is not subject to the exclusive                                                            

remedy provision of the procurement code because that provision applies only to claims                                                                                   

regarding the solicitation and award of contracts.  But the exclusive remedy provision   

explicitly applies to "AS 36.30.560 - 36.30.699," a range including section .620, which                                                                                  


governs Bachner's claim.                                                                                                                                                      

                                                           Bachner points out that under "Applicability of protest and  


appeal procedures," AS 36.30.550, "the provisions of AS 36.30.550 - 36.30.615 apply  


to a solicitation, a proposed contract award, and an award of a contract." Bachner argues  


that this list omits contract claims because the legislature intended to exclude them from  


the exclusive remedy provision.   But AS 36.30.620 falls outside the range cited in  


section .550, so any limitations in section .550 are irrelevant.  And there is nothing in  


section .620 that would limit contract claims to the solicitation and award phase of a  



                            Bachner also contends that the procurement code's remedy provisions do  


not  apply  to  existing  contracts  because  "procurement,"  as  the  term  is  commonly  


understood,  ends  at  the  time  the  contract  is  signed.                                                                  But  as  explained  above,  


"procurement" by statutory definition covers more than just the acquisition phase of a  



contract; it covers "all phases of contract administration."                                                                         In a related argument,  


Bachner contends that its claim cannot be covered by the procurement code because  


procurement claims may only be filed with a procurement officer, "an official who does  


not exist after the procurement ends with the execution of a contract."  But again, the  


code defines a "procurement officer" as "a person authorized toenter into and administer  

              39            AS 36.30.690.   

              40            AS 36.30.990(19).  


                                                                                       -13-                                                                                       7138  

----------------------- Page 14-----------------------


                                                           under this definition, ongoing contracts may indeed have                                                             

contracts for an agency"; 

procurement officers authorized to review claims.                                                             

                             Bachner also argues that its claim cannot be covered by the code because                                                                    

the remedy for procurement claims is limited to bid preparation costs, an obviously                                                                                  

inadequate   and   anomalous   remedy   in   a   later   dispute   over  rent.     Bachner   points   to  

AS 36.30.585, titled "Protest remedies," which provides that "if a protest is sustained in                                                                                            

whole   or   part,   the   protester's   damages   are   limited   to   reasonable   bid  or   proposal  

preparation costs."42                                                                                              

                                              But AS 36.30.585 applies only to protests of a contract award or  


other elements of the bidding process; it does not apply to claims on an ongoing contract  


brought under the separate remedy provision of AS 36.30.620.  Like the title, the text of  


AS 36.30.585 refers only to "protests," which is the term used in the procurement code  



for claims regarding contract solicitation and award.                                                                     By contrast, claims regarding  


ongoing contracts under AS 36.30.620 are consistently referred to as "contract claims"  



or "claims."                    And again, AS 36.30.585 falls within the range of statutes pertaining to  



contract solicitation and award, whereas AS 36.30.620 falls outside of it.                                                                                   In short, there  

              41             AS  36.30.990(20)  (emphasis  added).  

              42             AS  36.30.585(c).  

              43             See  AS  36.30.560  ("An  interested  party  may  protest  the  award  of  a  contract,  

the  proposed  award  of  a  contract,  or  a   solicitation  for   supplies,   services,  professional  

services,  or  construction  by  an  agency.").  

              44             See AS 36.30.620 ("A contractor shall file a claim concerning a contract  


awarded under this chapter with the procurement officer."); AS 36.30.625 ("An appeal  


from a decision of the procurement  officer  on a contract claim may be  filed by the  


contractor . . . .").  


              45             See AS 36.30.550.  


                                                                                         -14-                                                                                  7138

----------------------- Page 15-----------------------

is nothing in the statutes that can reasonably be read as limiting the damages on a                                                                                                                            

contract claim brought under AS 36.30.620 to bid preparation costs.                                                                                      

                                 Relatedly,   Bachner   argues   that   the   procurement   code   does   not   cover  

ongoing contracts because under AS 36.30.560 only "interested parties" are allowed to                                                                                                                         

file administrative protests, and "interested parties" are defined to include only persons                                                                                                      


involved at the contract's outset - bidders and prospective bidders.                                                                                                                                      

                                                                                                                                                                               But again, this  



provision falls withintherangeofprovisions specificto contractsolicitation and award; 


it does not purport to limit or define those who may bring other types of claims. Contract  


claims under AS 36.30.620 may be brought by a "contractor," and the ordinary meaning  


of that term is not narrowed by statute.  


                                 In sum, the statutes' language and structure compel the conclusion that  


claims involving ongoing contracts - such as the lease at issue in this case - fall under  


AS  36.30.620  and  are  therefore  subject  to  the  exclusive  remedy  provision  of  the  


procurement code.  


                                 3.	             A lease  dispute  does  not  fall within the "payment disputes"  


                                                 exemption of AS 36.30.620(g).  


                                 The  contract  claims  procedure  of  AS  36.30.620  contains  an  explicit  



exemption for "payment disputes governed by AS 37.05.285."                                                                                                  According to Bachner,  


the rent dispute at issue here is an exempted "payment dispute" because "Bachner is  


seeking payment under the terms of a contract for services."  But this argument, too, is  


contrary to the language of the statutes.  

                46              See  AS 36.30.699.   

                47              See  AS 36.30.550.   

                48              AS 36.30.620(g).   

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                         Alaska Statute 37.05.285 falls outside the procurement code and provides                                                   

timelines for the State's payment to sellers for "goods and services."                                                             The procurement   


code defines "services" as "the furnishing of labor, time, or effort by a contractor";                                                                      this  


provision does not include providing property for lease. But the definition of "supplies,"  


on the other hand, does include the specific product at issue in this case - "privately  



owned real property leased for the use of agencies, such as office space."                                                                   Under these  


definitions, Bachner, by leasing office space to the State, is providing "supplies," not  



"services," and AS 37.05.285 - the "payment disputes" provision - does not apply. 


             B.	         Bachner'sOtherClaims To ReliefOutsideTheProcurement Code Are  



                         In its reply brief on this appeal Bachner raises two additional theories that  


it argues take its claim outside the procurement code and permit a direct suit in superior  


court: First, that the lease was terminated by the State's failure to pay rent, and contracts  


that have been "cancelled or terminated" are not subject to the procurement code; and  


second, that "even if AS 36.30.620 and AS 36.30.690 would normally apply, the State  


opted out of the procurement code by inserting a forum selection clause in the contract"  


that effectively invited the parties to file suits in superior court rather than invoke the  

             49          AS  36.30.990(23).  

             50          AS  36.30.990(26).  

             51          This    conclusion    is    also                      supported    by    the    regulation    interpreting  

AS  37.05.285,  which  defines  a  "seller  of  goods  and  services"  as  an  entity  "that  offers  or  

transfers  property  or   services  to  a   state  agency  under  a  contract  of  a   sale  or  purchase  

order,"  2  Alaska  Administrative  Code  (AAC)  15.115(e)(4)(2012);  again,  this  definition  

of  "seller"  does  not  include  a  "lessor"  like  Bachner.    

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administrative process.                         But Bachner raised neither of these arguments before making                                                    


them in its reply brief, and we therefore consider them waived.                                                                      


              C.	          The Superior Court Did Not Err By Failing To Consider Matters  


                           OutsideThePleadingsWhenGranting TheState'sMotionToDismiss.  


                           Finally, Bachner argues that the superior court erred by granting the State's  


motion  to  dismiss  the  suit  without  first  considering  the  terms  of  the  lease.                                                                            Civil  


Rule 12(b)(6) provides that a defendant may make a motion to dismiss "for failure to  


state a claim on which relief can be granted."  Grant or denial of a motion to dismiss is  


based only on whether the complaint itself "allege[s] a set of facts consistent with and  



appropriate to some enforceable cause of action."                                                         If the court does consider matters  


outside the pleadings, Rule 12(b) requires that the motion to dismiss be treated as a  


motion for summary judgment under Alaska Civil Rule 56, in which case "all parties  


shall be given reasonable opportunity to present all material made pertinent to such a  


motion by Rule 56."  


                           Bachner  faults the superior court for its "refus[al] to take evidence or  


convert the motion [to dismiss] to a motion for summary judgment."  Bachner contends  


that the court was required to look at the lease because "a lease prepared by the state  


might possibly  establish  remedies that are different from, or  even in conflict with,  


statutory law."  But although Rule 12(b) permits a court to convert a motion to dismiss  


into a motion for summary judgment, a court is required to do so only if it considers  


matters outside the pleadings.  

              52           Maines v. Kenworth Alaska, Inc.                                  , 155 P.3d 318, 326 (Alaska 2007) ("[A]n                              

issue raised for the first time in a reply brief is deemed to have been waived." (citing                                                                         

Crittell v. Bingo                , 83 P.3d 532, 536 n.19 (Alaska 2004))).                          

              53           Clemensen v. Providence Alaska Med. Ctr., 203 P.3d 1148, 1151 (Alaska  


2009) (quoting Odom v. Fairbanks Mem'l Hosp., 999 P.2d 123, 128 (Alaska 2000)).  


                                                                                   -17-	                                                                            7138

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                                             Bachner's complaint alleged that it had entered into a contract with the                                                                                                                                                                    

 State in 2003 to lease the Denali Building for the use of the Department of Natural                                                                                                                                                                                     

Resources; that the firmtermexpired in September 2013 and was followed by a one-year                                                                                                                                                                                

renewal; that the State continued to occupy space for which it had failed to pay rent; and                                                                                                                                                                                              

that accordingly the State was in material breach of the lease and "must vacate the                                                                                                                                                                                                     

premises, negotiate another long-term lease," and pay past-due rent, "or they will be in                                                                                                                                                                                                     

trespass on the property."                                                                 The face of the complaint thus alleged the existence of a                                                                                                                                           

contract   claim subject                                                       to   the   procurement   code   and   its   exhaustion   requirement,  as  

explained above.                                               The face of the complaint contained no suggestion that the lease's                                                                                                                                           

remedy provisions conflicted with or superseded the procurement code, nor did Bachner                                                                                                                                                                                   


make this argument before the superior court.                                                                                                                                                                                                                                        

                                                                                                                                                                 The court was therefore presented with  


a legal issue: whether a dispute over an ongoing state office lease was a "contract claim"  


subject to the procurement code.  


                                             We conclude that the superior court did not err when it ruled on the motion  


to dismiss on the basis of the allegations of the complaint alone.  Because Bachner's  


complaint failed to allege any facts that would support a theory of relief not barred by  


the procurement code's exclusive remedy provision, the superior court did not err in  


granting the State's motion.  

V.                     CONCLUSION  


                                             We AFFIRM the judgment of the superior court.  

                       54                    Bachner argued in the superior court that the procurement code did not                                                                                                                                                                     

apply to the lease for other reasons, but not that the procurement code could not apply                                                                                                                                      

because it might conflict with the lease's terms, or even that the lease's terms had any               

bearing on the application of the procurement code.                                                                                                          

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