Construct! (ABA) Spring 2001 – Russel W. Wray
Louisiana statutes prohibit closing the specification for any product for a public works project unless all other products would detract from the utility of the building or to preserve the historical integrity of the building or uniform appearance of an existing structure. La. R.S. 38:2290. A closed specification is defined as a product specified to the exclusion of all other products of apparent equal quality and utility. La. R.S. 38:2296. The Louisiana Closed Specification Statutes supplement the Louisiana Public Bid Law and were enacted to assure uninhibited competitive bidding for public works projects.
In Diamond B Construction Company, Inc. v. Louisiana Department of Transportation and Development, 00 1323 and 00 1583 (La.App. 1 Cir.12/21/00) 2000 WL 1864458 and 2000 WL 1864459, writ denied, plaintiff alleged that specifying Portland cement concrete pavement for a rural four lane highway was a closed specification because asphaltic concrete pavement which was of equal quality and utility for the project was excluded. The First Circuit affirming summary judgment dismissal (though for different reasons than the trial court) interpreted the word product as it is used in 2296 to exempt highway pavements and materials used in highway pavements from the scope of the Closed Specification Statutes.
The ruling means that even if Portland cement concrete pavement and asphaltic concrete pavement, the two types of pavement used for highways, are equal in quality and utility as alleged, the Closed Specification Statutes do not apply so as to require pavement types be bid competitively.
This is the first and only case in Louisiana in which a thing of any kind was held to be exempt from the Closed Specification Statutes. The statute does not define product, but competitive bidding of pavements is not a new idea and Louisiana cases predating the Closed Specification Statutes held competitive bidding of equal alternate paving materials was required so as not to circumvent the Public Bid Law by stifling competition for public works. Redersheimer v. Flower, 52 La.Ann. 2089, 28 So. 299 (La. 1900) and Saxon v. City of New Orleans, 124 La. 717, 50 So. 663 (La. 1909). Louisiana cases interpreting the Closed Specification Statutes have found that construction equipment (State Machinery & Equipment Sales, Inc. v. Livingston Parish Gravity Drainage District #5, 98-1207 (La.App. 1 Cir. 6/25/99), 742 So.2d 26) and construction materials, such as concrete pipe (Stevens Concrete Pipe & Products, Inc. v. Burgess, 252 La. 136, 209 So.2d 733) to be products and the Louisiana DOTD standard specifications refer to pavement as a product. But in Diamond B, the court, based on testimony from Louisiana DOTD officials, found that pavement is a “design” or “system,” but not a “product.”
For instance, the court, citing testimony from the Chief Engineer of the Department, said: “[P]avement, whether it be asphaltic concrete or Portland cement concrete, constitutes a design, not a product. He explained that Portland cement concrete is not a product, but instead is comprised of many individual things that are products, such as cement, additives, flash, water, reducer sand, and gravel. Asphaltic concrete, as well, is not a product in and of itself.”
In Stevens, the Louisiana Supreme Court said that “unquestionably concrete pipe is a product and, when it is specified that all pipe to be used be in minimum lengths, this is a closed specification in that it excludes all pipe of less than twelve feet in length even though the pipe of lesser length may be of equal quality and utility.” If concrete pipe is a product, why isn’t concrete pavement a product?
The First Circuit distinguished Stevens for two reasons. First, the court found that Portland cement concrete and asphaltic concrete are different substances comprised of different materials. Secondly, in Stevens the court found that the competitive bidding process was stifled by excluding all but one bidder, but the court in Diamond B found competition was adequate though only one industry could bid.
Neither the statute nor the court defines product, and the court did not offer any rationale for deviating from the plain meaning of that term. When a law is clear and unambiguous and its application does not lead to absurd consequences, the law shall be applied as written and no further interpretation may be made in search of the intent of the legislature. La. C.C. art. 9.
Furthermore, when the language of the law may have more than one meaning, it must be interpreted as having the meaning that best conforms to its purpose. La. C.C. art.10. Where the law was intended to assure uninhibited competitive bidding, this ruling forecloses competition between asphalt pavers and Portland cement concrete pavers by allowing public entities to select their preference between competing pavement types without considering other choices of equal quality and utility for the project. This opens the door to politics and favoritism in pavement type selection and higher prices for public work. The best price for public work is obtained through open competitive bidding between products that do the same job equally well. Restricting competition for pavements is not in the taxpayers’ interest.