State and Local Procurement

272546436_4edcb4b3e0_bPresident Trump has signed Executive Order 13767 that directs a wall to be built on the Mexico-United States border.  The Department of Homeland Security has sought proposals to design and build a prototype of the border wall, and many contractors have submitted offers.  At the same time, several state and local governments (such as New York City, San Francisco, Berkeley, Oakland, New York, Illinois, and California) are considering or proposing legislation to prohibit contractors working on the border wall from contracting with that state/local government. These contractor “sanctions” are a complex, untested issue, and contractors bidding, or considering working, on the border wall project need to know that the issue is now in play. Such legislation, if adopted by a state/local government, will raise constitutional issues.  Aside from due process and equal protection issues, there are at least two relevant U.S. Constitution clauses both of which may ultimately doom any proposed state/local legislation to sanction border wall contractors: the Supremacy Clause and the Dormant Commerce Clause. Continue Reading Possible Constitutional Issues with Proposed State/Local Sanctions Against Contractors Working on President Trump’s Border Wall

6582407861_6fb05b1a07_bIn Roy Allen Slurry Seal, Inc. v. American Asphalt South, Inc., (2017) 2 Cal.5th 505, the California Supreme Court recently ruled that disappointed bidders could not state a claim for the tort of intentional interference with prospective economic advantage against companies that obtain public contracts based on business practices that allegedly violate employment laws.

In this case, Roy Allen and another general contractor, Doug Martin Contracting, Inc., asserted the tort of intentional interference with prospective economic advantage in their lawsuit against American Asphalt, in which they alleged that they had lost a large number of public contracts to American Asphalt based on American Asphalt’s ability to submit deflated bids due to lower labor costs derived from not paying prevailing wages or overtime compensation to its workers.  The trial court sustained American Asphalt’s demurrer without leave to amend, but the court of appeal reversed, holding that plaintiffs had stated a claim for intentional interference with prospective economic advantage.  The California Supreme Court said no, plaintiffs did not state a claim.  Continue Reading California Supreme Court Says No to Tortious Interference in Public Bidding