This article was published in the May 2019 issue of AGC Law in Brief (Volume 5, Issue 3), Practical Construction Law & Risk Issues. It is reprinted here with permission.
In recent years, California has experienced the worst wildfires in its history, devastating the state and setting record-breaking highs. In just 2018 alone, the wildfires across California took 106 lives and burned more than 1.5 million acres of land. Thousands of residents were forced to evacuate as fire blazed through houses, businesses and public sites. Local agencies must now undertake the enormous task of recovery, including hiring contractors to perform repairs, rebuild infrastructure from ashes, and replace the state’s resources. Under these conditions, are public agencies free to bypass California’s competitive bidding laws?
Emergency Exception to Competitive Bidding
Ordinarily, the selection of contractors on public projects is regulated by state and federal procurement laws. In California, state agencies must comply with Public Contract Code section 10340 to secure at least three competitive bids or proposals for each contract. Pub. Contract Code § 10340(b). The Code seeks to promote competition and prevent bias, fraud, corruption and the misuse of public funds. The drawback to the requirements is that the bidding process is lengthy and bid awards are further subject to delays from bid protests and taxpayer challenges. Yet, when an agency fails to fully comply with competitive bidding, the contract is void and the contractor might not be able to recover the value of the goods and services provided.
One exception to the competitive bidding requirement exists in emergency situations. In situations where time is of the essence, the Code will allow public agencies to immediately procure goods and services without a formal bidding process.
What Constitutes an Emergency?
Public Contract Code section 1102 defines “emergency” as “a sudden, unexpected occurrence that poses a clear and imminent danger, requiring immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential public services.” Pub. Contract Code § 1102. This definition is strictly construed due to California’s strong public policy favoring competitive bidding.
In order to warrant the narrow exception, the emergency must be a genuine one. Natural disasters qualify as emergencies, including fire, flood, earthquake, drought, tidal wave or storm. In other situations, factors such as...
