Opinion
November 29, 1999
90-A-1(c) PUBLIC FUNDS CONTRACTS — Purchases of Materials Supplies R.S. 38:2253, 38:2251H
Public entity has choice whether to invoke provisions of R.S. 38:2251H and give preference to bidder who offers Louisiana products. If it does not invoke those provisions, it may choose either of two bidders who have offered the same price since both vendors were foreign corporations doing business in Louisiana.
Mr. David P. Doughty Assistant District Attorney, Civil Fifth Judicial District P.O. Box 857 Rayville, LA 71269
Dear Mr. Doughty:
On behalf of the Richland Parish Police Jury (Police Jury) you have requested the opinion of this office on the following situation:
In early 1999 the Police Jury received identical bids for providing asphalt materials from Koch Materials Company (Koch) and Asphalt Products Unlimited (Asphalt). Both companies claimed the Louisiana preference. The Police Jury accepted the bid of Koch, with whom they had been doing business for the last few years. Was the Koch bid properly accepted?
You indicate that Koch is a foreign corporation doing business in Louisiana. In the past, much of the product which Koch provided was manufactured in Donaldsonville and shipped from there to the Police Jury. However, at present, the product is made in Texas and shipped from Port Neches, Texas. Asphalt Products Unlimited is a foreign corporation doing business in Louisiana and the product which they offer is manufactured in Louisiana.
Although it only became effective on August 15, 1999, Act 742 of 1999, pertinently provides: "Whoever, directly or indirectly, by agent or otherwise, intentionally and falsely claims any preference to which he is not entitled under the provisions of this Part shall be subject to penalties of double the dollar amount of the percentage granted through the preference or five hundred dollars, whichever is greater."
R.S. 38:2253 provides:
§ 2253. Preference to firms doing business in state
In making any purchase it shall be the duty of the officer, purchasing agent, board, district or commission, all things being equal, to give preference to firms doing business in the State of Louisiana. However, this preference shall be inferior to and superseded in instances of conflict with that preference granted by R.S. 38:2251.
Your request indicates that both Koch and Asphalt are corporations doing business in Louisiana, so the two bidders are on the same footing on that criterion. This brings us to consideration of the "preferences" provided by R.S. 38:2251. This statute has been recently interpreted by this office in Opinion Number 98-291, a copy of which is enclosed for your reference. The holding of Opinion Number 98-291, when applied to the situation at hand, would mean that the Police Jury, may, if it chooses, apply the 5% conditional preference to a procurement, and if it does so, the vendor offering the Louisiana product must meet all of the following conditions:
(1) The cost of the Louisiana products does not exceed the cost of other materials, supplies or equipment which are manufactured, processed, produced, or assembled outside the state by more than five percent.
(2) the vendor of Louisiana products agrees to sell the products at the same price as the lowest bid offered on such products.
(3) In cases where more than one bidder offers Louisiana products which are within five percent of the lowest bid, the bidder offering the lowest bid on Louisiana products is entitled to accept the price of the lowest bid made on such products.
In this case, the prices bid are identical so the bidder offering the Louisiana product, Asphalt Products Unlimited, would be preferred if the Police Jury chooses to avail itself of the provisions of R.S. 38:2251H. The statute is silent as to when this choice must be made by the Police Jury, so it would appear that the election could be made at any time prior to contract award. In the interest of full disclosure and fairness, it would be helpful for the Police Jury to make this choice before a solicitation is distributed to potential bidders and to make the decision known in the bid documents.
There is no mandatory preference for Louisiana products other than foodstuffs and paper. It is discretionary with the Police Jury whether to invoke the provisions of R.S. 38:2251H. If it has not done so or does not do so prior to contract award, there is no reason that the Police Jury could not select either bidder since prices were the same. Although not required by law, such tie bids are generally resolved by some random process such as the flip of a coin, with the bidders allowed to be present for that event.
I trust that this answers your inquiry. Please let me know if we may be of any further assistance to you in this matter.
Very truly yours,
RICHARD P. IEYOUB ATTORNEY GENERAL
BY: GLENN R. DUCOTE Assistant Attorney General
RPI:GRD:jv
Enclosure — 98-291
OPINION NUMBER 98-291
December 11, 1998
61-Laws — General 62-B Legislature — Acts and Bills 90-A-1-(c) Public Funds and Contracts — Purchase of materials and supplies R.S. 1:3 R.S. 38:2251 R.S. 39:1595
Under R.S. 38:2251(B)(3) and (H) a Honorable Glenn B. Ansardi conditional five percent purchasing House of Representatives preference may be applied to the 1940 I-10 Service Rd., purchase of computers. The seven Suite 125 percent preference granted by Kenner, LA 70065 Paragraphs (B) and (C) apply only to food and paper products.
Dear Representative Ansardi:
You have requested an opinion of the Attorney General regarding the applicability of R.S. 38:2251 (Section 2251) to the purchase of computers assembled in Louisiana. You specifically ask whether computers assembled in Louisiana are eligible for the seven percent preference provided under Section 2251(B)(3). In resolving your question, we believe a preliminary discussion of the legislative history of Section 2251 would be beneficial.
Section 2251 was enacted by Act 318 of the 1958 Regular Session of the Louisiana Legislature. Act 318 required purchasing agents of state and local public entities to purchase products produced, grown or manufactured in Louisiana in preference to products produced, grown or manufactured in other states, if the price of the Louisiana products does not exceed those produced in other states by more than three percent.
Act 211 of 1980 increased the preference from three to five percent. Companion Acts 157 and 851 of 1981 retained the five percent preference and specified the requirements for each food product to qualify, including meat and meat products, produce, eggs and seafood harvested in Louisiana waters. The Acts also imposed the same preference for the same food products under the same requirements for purchases made pursuant to R.S. 39:1595 (Section 1595) of the Louisiana Procurement Code. The Code applies, exclusively, to the expenditure of public funds by the Executive Branch of state government, with certain exceptions. Further, pursuant to R.S. 39:1554(E), political subdivisions are authorized to adopt all or any part of the Code, and it's accompanying regulations, for the purchase of supplies, services, major repairs and construction.
Act 778 of 1987 increased the preference from five to seven percent, and further defined the products eligible for said preference. It provides, in pertinent part, the following:
§ 2251. Preference for products produced or manufactured in Louisiana; exceptions
A. As used in this Section, the following terms shall have the following meanings ascribed to them:
(1) "Meat" and "meat product" means beef, veal, pork, mutton, poultry, and other meats, and products made from those meats.
(2) "Other products" includes "other meat", "other meat products", "other seafood", and "other seafood products" and means products which are produced, manufactured, grown, processed, and harvested outside the state.
(3) "Seafood" and "seafood product" means fish, shrimp, oysters, crabs, underutilized species, and other seafood.
B. Each procurement officer, purchasing agent, or similar official who procures or purchases products under the provisions of this Chapter shall procure or purchase Louisiana products which are equal in quality to other products, provided the cost of Louisiana products does not exceed the cost of other products by more than seven percent.
C. In order to qualify as Louisiana products for the purpose of this Section, the following products shall meet the following requirements:
(1) Produce shall be grown, canned, or frozen in Louisiana.
(2) Eggs shall be laid in Louisiana.
(3) Meat and meat products shall be processed in Louisiana from animals which are alive at the time they enter the processing plant.
(4) Seafood and seafood products shall be produced from seafood which is:
(a) Harvested in Louisiana seas or other Louisiana waters; or
(b) Harvested by a person who holds a valid appropriate commercial fishing license issued under R.S. 56:1 et seq.
(5) Domesticated catfish shall be processed in Louisiana from animals which were grown in Louisiana.
(6) All other products shall be produced, manufactured, or assembled in Louisiana. (Emphasis added.)
Act 778 also enacted Section 2251(D) and (E) which authorize a four percent preference for pre-processed meats and catfish grown outside of Louisiana, respectively. It further amended Section 1595 to include the same language quoted above, and the four percent exceptions.
Section 2251 was again amended in 1990 by Act 449. This amendment added a definition for "Processed", as it relates to Louisiana produce, and another exception for a four percent preference for produce processed in Louisiana, but grown outside the State. It further implemented this same language in Section 1595. The Act made no change whatsoever in the remaining language contained in Section 2251, as amended by Act 778, quoted hereinabove.
In the case of Ferrara Fire Apparatus v. Morgan City, 600 So.2d 1387 (La.App. 1 Cir. 1992) writ denied, the First Circuit addressed the issue of whether the seven percent preference in Section 2251(B) applied to fire trucks assembled in Louisiana. The Court concluded that the statutory language clearly refers to food products. It further held that Paragraph (C)(6), denoting "all other products produced, manufactured or assembled in Louisiana", likewise referenced food products. The language did not, the Court concluded, apply to fire trucks assembled in Louisiana.
During the 1993 Regular Session of the Louisiana Legislature, House Bill 135 (HB 135) was introduced for the specific purpose of amending Section 2251(C)(6), quoted supra, to include "all other types of materials, supplies, equipment, provisions, and products produced, manufactured, or assembled in Louisiana", for applicability of the seven percent preference. The Bill further sought to amend Section 1595(C)(6) for the same purpose. Senate Bill 290 was also introduced to accomplish the same result, but only insofar as Section 2251 was concerned. It became Act 577.
A review of the bill history of HB 135 reveals that it went to Conference Committee and became Act 1032. The Act amended Section 1595(C)(6) to apply the seven percent preference to "all other types of materials, supplies, equipment, provisions, and products produced, manufactured, or assembled in Louisiana". Such was not the case with Section 2251. Both Acts 1032 and 577 amended Section 2251 to include additional definitions. Further, Paragraphs (B) and (C)(6) were amended as follows:
B. Each procurement officer, purchasing agent, or similar official who procures or purchases products under the provisions of this Chapter shall procure or purchase Louisiana products provided the following conditions are met:
(1) The bidder shall indicate in the bid submitted that the product has met the criteria of Louisiana product.
(2) The product is equal or better than equal in quality to the other products.
(3) The cost of the product shall not exceed the cost of other products by more than seven percent except as otherwise provided in this Chapter as a specific exception.
C. In addition to the requirements listed in Subsection B of this Section, the following products shall meet the following specific requirements:
* * *
(6) Paper and paper products shall be manufactured and converted in Louisiana. (Emphasis added.)
Thus Section 2251(B) and (C) continued to limit the seven percent preference to the food products previously designated, and added "paper and paper products manufactured and converted in Louisiana." With regard to the purchase of materials, supplies and equipment, both Acts added Paragraph (H):
H. Notwithstanding any other provision of this Section to the contrary, each procurement officer, purchasing agent, or similar official who procures or purchases materials, supplies, or equipment under the provisions of this Chapter may purchase materials, supplies, or equipment which are Louisiana products, as defined in R.S. 38:2251(A)(8), and which are equal in quality to other materials, supplies, or equipment, provided that all of the following conditions are met:
(1) The cost of the Louisiana products does not exceed the cost of other materials, supplies, or equipment which are manufactured, processed, produced, or assembled outside the state by more than five percent.
(2) The vendor of Louisiana products agrees to sell the products at the same price as the lowest bid offered on such products.
(3) In cases where more than one bidder offers Louisiana products which are within five percent of the lowest bid, the bidder offering the lowest bid on Louisiana products is entitled to accept the price of the lowest bid made on such products.
As can be seen from the above, the Legislature created an exception for the preference on the purchase of materials, supplies and equipment. This specific exception is expressly acknowledged in Paragraph (B)(3) with the language "except as otherwise provided in this Chapter as a specific exception". This language clearly refers to Paragraph (H)(1)-(3).
A review of Paragraph (H) reveals that the preference is established at five percent, with the added condition that the Louisiana vendor with the lowest bid must agree to sell the product at the same price as the lowest bid offered by the out-of-state vendor.
Act 1255 of the 1995 Regular Session of the Louisiana Legislature constitutes the last amendment to Section 2251 and amends Paragraph (H) by removing the phrase "Notwithstanding any other provision of this Section to the contrary". Act 1255 does not change the language of Paragraphs (B) and (C) which have heretofor been interpreted by our jurisprudence to limit the seven percent preference to food products and, more recently, paper products. Further, it does not delete the "exception language" contained in Paragraph (B)(3) which clearly applies to the five percent preference for purchases of materials, supplies or equipment.
Given this historical background, we now turn to the following rules of statutory interpretation and construction which we believe are applicable to the issue presented.
LSA-C.C. Art. 9. Clear and unambiguous law
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.
LSA-C.C. Art. 10. Language susceptible of different meanings
When the language of the law is susceptible of different meanings, it must be interpreted as having a meaning that best conforms to the purpose of the law.
LSA-C.C. Art. 12. Ambiguous words
When the words of a law are ambiguous, their meaning must be sought by examining the context in which they occur and the text of the law as a whole.
R.S. 1 § 3. Words and phrases; how construed
Words and phrases shall be read with their context and according to the common and approved usage of the language. Technical words and phrases, and such others as may have acquired a peculiar and appropriate meaning in the law, shall be construed and understood according to such peculiar and appropriate meaning.
The word "shall" is mandatory and the word "may" is permissive.
As previously noted, Section 2251(B) and (C) have consistently been interpreted to grant a seven percent preference to food and paper products. In 1993, HB 135 and SB 290 attempted to apply the seven percent preference to all other types of materials, supplies and equipment (e.g., computers). While the Legislature approved this measure for purposes of the State's Procurement Code, it did not approve it for procurements under Section 2251.
Acts 1032 and 577 amended Section 2251 in two respects. First, it established a new five percent conditional preference for Louisiana materials, supplies and equipment, and attached thereto the restrictions in Paragraph (H)(1)-(3). It alsoexpressly recognized that this five percent preference constitutes an exception to the seven percent preference for food and paper products, as per the "exception language" in Paragraph (B)(3), quoted supra.
Act 1255 of 1995, representing the most recent amendment to Section 2251, does not, in our opinion, change this status quo. Paragraphs (B) and (C) remain completely intact, granting the seven percent preference to food and paper products, while expressly acknowledging the "specific exception" that can only refer to the five percent preference afforded materials, supplies and equipment in Paragraph (H).
Guided by the rules of statutory interpretation and construction noted above, we find the provisions of Section 2251, as amended, to be clear and unambiguous. Assuming, arguendo, the provisions are ambiguous, we are required to examine the text of the law in its entirety. Our jurisprudence has consistently held that, in construing a statute, one is bound to consider all parts together, giving effect to all parts, if possible, and not construing as surplusage any sentence, clause or word, if the construction can be legitimately found which will give meaning to and preserve all words of the statute. Ritchie v. Louisiana Department of Public Safety and Corrections, 595 So.2d 1158 (La.App. 1 Cir. 1991) writ denied.
Accordingly, it is the opinion of this office that the purchasing preference for computers is governed by the five percent preference in R.S. 38:2251(H)(1)-(3), and not the seven percent preference granted food and paper products in R.S. 38:2251(B)(1)-(3).
Trusting this adequately responds to your inquiry, I am
Very truly yours,
RICHARD P. IEYOUB ATTORNEY GENERAL
By: ROBERT E. HARROUN, III Assistant Attorney General
RPI/Rob3/sfj