Mira Consulting, Inc. v. Board of Educ.

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New Mexico Compilation
Commission, Santa Fe, NM
'00'05- 11:59:40 2017.01.25
IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number: 2017-NMCA-009
Filing Date: September 27, 2016
Docket No. 34,486
MIRA CONSULTING, INC., a
New Mexico Corporation,
Plaintiff-Appellant,
v.
BOARD OF EDUCATION,
ALBUQUERQUE PUBLIC SCHOOLS,
Defendant-Appellee.
APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY
Nancy J. Franchini, District Judge
Bingham, Hurst & Apodaca, P.C.
Wayne E. Bingham
Albuquerque, NM
for Appellant
Modrall, Sperling, Roehl, Harris & Sisk, P.A.
Arthur D. Melendres
Zachary L. McCormick
Albuquerque, NM
for Appellee
OPINION
BUSTAMANTE, Judge.
{1} Mira Consulting, Inc. appeals the dismissal of its complaint for declaratory judgment.
We agree with the district court that New Mexico’s Procurement Code does not apply here
and that dismissal under Rule 1-012(B)(6) NMRA was appropriate. We therefore affirm.
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BACKGROUND
{2} Mira Consulting, Inc. (Mira) is a for-profit New Mexico corporation providing dental
services primarily in Albuquerque. Albuquerque Public Schools (APS) issued a “Request
for Information” (RFI) soliciting information about “dental health providers who are
interested [in] delivering direct services in APS for the 2014-2015 [s]chool [y]ear.” Through
the program, successful applicants would be permitted to provide dental services in APS
schools. The RFI stated that “[a]ll services performed per an award for this RFI must be
performed at no cost to APS. Successful applicants will be directed to bill Medicaid, other
third party payers or provide services pro[]bono.”
{3} Mira responded to the RFI. Three other dental service providers also submitted
information. After four reviewers scored each response, Mira and Smiles for New Mexico
Kids were selected as providers. Although Mira was “awarded” sixty-eight schools and
Smiles for New Mexico Kids was awarded thirty schools, Mira filed a bid protest with
APS’s procurement division pursuant to Section 13-1-172 of New Mexico’s Procurement
Code, NMSA 1978, §§ 13-1-28 to -199 (1984, as amended through 2015). The bid protest
was based in part on the distribution of elementary schools and high schools between Mira
and Smiles for New Mexico Kids, as well as proximity of the schools to each company’s
“dental home.” APS responded to the bid protest by stating that the protest procedures in the
Procurement Code were inapplicable because the Procurement Code does not apply to
transactions in which APS does not expend any funds.
{4} Mira then filed a complaint for declaratory judgment requesting an order declaring
that the RFI was subject to the Procurement Code. After a hearing on a motion to dismiss,
the district court agreed with APS that the Procurement Code did not apply and dismissed
the complaint for failure to state a claim under Rule 1-012(B)(6). Mira appeals.
DISCUSSION
{5} Our review of statutory construction questions is de novo. See Pub. Serv. Co. of N.M.
v. N.M. Pub. Util. Comm’n, 1999-NMSC-040, ¶ 14, 128 N.M. 309, 992 P.2d 860. In
construing a statute, we seek to “determine and give effect to the intent of the [L]egislature.”
Id. ¶ 18 (internal quotation marks and citation omitted). We are guided by common
principles of statutory construction, including the following:
[(1)] The plain language of a statute is the primary indicator of legislative
intent.
[(2)] Courts are to give the words used in the statute their ordinary meaning
unless the [L]egislature indicates a different intent.
[(3)] The court will not read into a statute or ordinance language which is not
there, particularly if it makes sense as written.
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Id. (alteration, internal quotation marks, and citations omitted).
{6} Although the “plain meaning rule” is a guiding principle, “[i]ts beguiling simplicity
may mask a host of reasons why a statute, apparently clear and unambiguous on its face, may
for one reason or another give rise to legitimate (i.e., nonfrivolous) differences of opinion
concerning the statute’s meaning.” State v. Smith, 2004-NMSC-032, ¶ 9, 136 N.M. 372, 98
P.3d 1022 (internal quotation marks and citation omitted). Therefore, “[t]he plain meaning
rule must yield on occasion to an intention otherwise discerned in terms of equity, legislative
history, or other sources.” Id. (internal quotation marks and citation omitted).
{7} Section 13-1-30(A) addresses the applicability of the Procurement Code. It provides
that “[e]xcept as otherwise provided in the Procurement Code, that code shall apply to every
expenditure by state agencies and local public bodies for the procurement of items of
tangible personal property, services[,] and construction.” An “expenditure” is “[t]he act or
process of spending or using money, time, energy, etc.; esp., the disbursement of funds . .
. [or a] sum paid out.” Black’s Law Dictionary 698 (10th ed. 2014). Mira argues that,
although the Procurement Code clearly applies to “every expenditure,” nothing in Section
13-1-30 indicates that it applies only when there is an expenditure. But this argument ignores
the second sentence of Section 13-1-30(A), which states that the Procurement Code “also
applies to concession contracts at the New Mexico state fair in excess of twenty thousand
dollars ($20,000), whether those concession contracts generate revenue and earnings or
expand [sic] funds.” (Emphasis added.) A “concession” contract is “[a] government grant
for specific privileges.” Black’s Law Dictionary 350; see 19.5.1.7(J) NMAC (“ ‘Concession
contract’ means an agreement between the department and a person, or business entity,
which allows the concessionaire to provide services, merchandise, accommodations[,] or
facilities within a park.”). Although the parties do not describe it this way, the arrangement
at issue here falls within this definition.
{8} We conclude that the Procurement Code does not apply here for two reasons. First,
concession contracts typically do not involve expenditures by the public entity. See John
Ziegler, The Dangers of Municipal Concession Contracts: A New Vehicle to Improve
Accountability and Transparency, 40 Pub. Cont. L.J. 571, 575 (2011) (discussing basic
concession contracts); see also Kayak Ctr. at Wickford Cove, LLC v. Town of Narragansett,
116 A.3d 250, 255 (R.I. 2015) (describing concession contracts as “contracts that produce
revenue and not purchases”). Second, we interpret the second sentence of Section 13-1-
30(A) as a narrow exception to the expenditure requirement in the first sentence. Phrased
another way, this provision means that the only time a transaction not involving an
expenditure is covered by the Procurement Code is when it is a concession contract at the
New Mexico state fair for over $20,000. Furthermore, under the principle of inclusio unius
est exclusio alterius, the inclusion of state fair concession contracts over $20,000 in the
statute also acts as an exclusion of omitted alternatives—being concession contracts of other
kinds. City of Santa Rosa v. Jaramillo, 1973-NMSC-119, ¶ 11, 85 N.M. 747, 517 P.2d 69
(stating that inclusio unius est exclusio alterius “means the inclusion of one thing is the
exclusion of the other”). When the first sentence is read in the context of the second, there
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is a clear implication that non-state fair concession contracts are not covered by the
Procurement Code. We conclude that the Procurement Code does not apply to APS’s RFI
or Mira’s response to it.
{9} Other courts have held under similar circumstances that concession contracts are
excluded from the ambit of their states’ procurement codes. In Kayak Centre, the Rhode
Island Supreme Court considered a request for declaratory judgment similar to that here. 116
A.3d at 252-53. The plaintiff argued that the defendant had violated a procurement statute
when it did not award a concession contract to the plaintiff, who proposed a higher payment
to the defendant than its competitors. Id. In addition to requiring competitive sealed bidding,
the statute at issue provided that “[t]he contract shall be awarded with reasonable promptness
by written notice to the responsive and responsible bidder whose bid is either the lowest bid
price, or lowest evaluated or responsive bid price.” R.I. Gen. Laws § 45-55-5(e) (1998).
Relying on this language and references to “purchases” and “procurement” in the statute, the
Kayak Centre court held that “[t]he language of the statute is clear and unambiguous. As a
result, we need not delve into the intent of the [g]eneral [a]ssembly, except to say that in our
opinion, in enacting [Section] 45-55-5 the [l]egislature sought to regulate contracts that
require the expenditure of public funds.” Kayak Ctr., 116 A.3d at 254. The court held that
the procurement statute did not apply, stating, “We cannot rewrite the statute by essentially
exchanging the word lowest for the word highest, as [the] plaintiff would have us do,
because we will not insert words into an unambiguous statute.” Id.; see Indep. Taxicab Ass’n
of Columbus v. Columbus Green Cabs, Inc., 616 N.E.2d 1144, 1149 (Ohio Ct. App. 1992)
(holding that, where the plaintiff sought to provide taxi management services at the airport,
because “the [defendant-]city is not purchasing services from [the winning contractor, it] was
not required to comply with the competitive bidding procedures set forth in [the defendant-
city’s procurement code]”); see also 10 McQuillin Mun. Corp., Contracts in General § 29:38
(3d ed.) (“Where a city is not purchasing services but granting a license or franchise to do
business, it is not required to comply with a competitive bidding ordinance.”).
{10} We briefly address Mira’s arguments that the plain language of Section 13-1-30 is
not dispositive. To the extent Mira argues that because APS’s RFI resembled and functioned
like a Request for Proposals (RFP), it should be treated like an RFP under the Procurement
Code, we disagree for two reasons. See § 13-1-112 (governing requests for proposals). First,
APS’s decision to use methods for soliciting and evaluating dental service providers that
resembled those for RFPs does not transform a non-covered transaction into a covered one,
or vice versa. If the methods chosen determined whether the Procurement Code applied, then
Section 13-1-30(A) would be superfluous. Moreover, public entities could avoid the
Procurement Code’s requirements simply by not following its RFP procedures. Second, the
RFI made clear that APS was not offering to buy services from respondents to the RFI.
Instead, it stated several times that the selected vendors must bill third parties for payment.
Cf. Lowe v. City of Hot Springs, 2015 SD 3, ¶ 19, 859 N.W.2d 612 (rejecting an argument
that, because the defendant “utilized the RFP process,” the solicitation was for procurement
of services on the ground that “the RFP itself indicated that the [defendant] was not seeking
to procure services” (internal quotation marks omitted)).
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{11} Mira also relies on Memorial Medical Center, Inc. v. Tatsch Construction, Inc., to
argue that the Procurement Code applies. 2000-NMSC-030, 129 N.M. 677, 12 P.3d 431. In
Memorial Medical Center, the issue was whether a private entity (MMCI) could be
considered a “political subdivision” or “local public body” by virtue of its relationship with
the public entities (the City of Las Cruces and County of Doña Ana) that leased MMCI the
hospital facility. Id. ¶¶ 1-2 (internal quotation marks omitted). The issue in Memorial
Medical Center was not whether the Procurement Code would apply to a new construction
project entered into by the City or the County, as public entities. Id. ¶ 1. It was fully
understood that the Procurement Code would apply to the new hospital construction project
if the City or County had continued to own and operate the hospital. Id. ¶¶ 4, 20-36. More
specifically, the question was whether the Procurement Code and related statutes should also
apply to MMCI, a private entity, “because the private entity has so many public attributes,
is so controlled and conducted, or otherwise is so affiliated with a public entity that as a
matter of fairness it must be considered as the same entity.” Id. ¶ 34.
{12} In the present case, we understand Mira’s argument to be that, because it was so
intertwined with a public entity (APS) in offering to provide dental services to APS schools,
the Procurement Code must apply to the RFI selection process for providing these services.
We are not persuaded by Mira’s argument. Mira is not stepping in as a private entity to pay
for dental services on behalf of APS, as its alter ego or otherwise. Id. ¶ 35. Mira does not
dispute that these dental services will be paid by Medicaid, other third party payers, or
provided pro bono to students. Mira did not assert that the third party payers and Medicaid
are acting as an alter ego for APS. Unlike the new hospital construction project in Memorial
Medical Center, Mira is not acting to procure and pay a third party for providing dental
services. Neither APS nor Mira pay third parties to provide dental services to APS students.
Mira is simply applying to be one of the third party providers of the dental service. No
private entity acting as the “alter ego” for APS has been established. The alter ego theory
offered under Memorial Medical Center is inapplicable to Mira, and the Procurement Code
will not be altered or expanded to apply to the RFI under these factual circumstances.
{13} Finally, although Mira makes several policy arguments for why concession contracts
should be subject to the Procurement Code, such issues call for “legislative therapy and not
judicial surgery.” State v. Gardner, 1991-NMCA-058, ¶ 9, 112 N.M. 280, 814 P.2d 458
(internal quotation marks and citation omitted). “Unless a statute violates the Constitution,
we will not question the wisdom, policy, or justness of legislation enacted by our
Legislature.” Aeda v. Aeda, 2013-NMCA-095, ¶ 11, 310 P.3d 646 (alteration, internal
quotation marks, and citation omitted). The Legislature could have made all concession
contracts subject to the Procurement Code. See State v. Greenwood, 2012-NMCA-017, ¶ 38,
271 P.3d 753 (“The Legislature knows how to include language in a statute if it so desires.”
(alteration, internal quotation marks, and citation omitted)); cf. Albuquerque, N.M., Code
of Ordinances § 5-5-28(A) (2011) (distinguishing between “purchases” and “concession
contracts” and stating that “[a]ll purchases of goods, services, and construction in excess of
$25,000, and the establishment of concession contracts expected to exceed $75,000 in
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revenues to the contractor shall be made by competitive sealed bid except as otherwise
authorized by this article.”). Our Legislature chose not to do so, and we must honor that
choice. Jones v. Holiday Inn Express, 2014-NMCA-082, ¶ 19, 331 P.3d 992 (“Courts must
construe statutes as they find them and may not amend or change them under the guise of
construction.” (internal quotation marks and citation omitted)).
CONCLUSION
{14} We conclude that the Procurement Code does not apply to contracts such as that
contemplated by APS’s RFI. Hence, we affirm the district court’s dismissal of Mira’s
complaint for declaratory judgment.
{15} IT IS SO ORDERED.
____________________________________
MICHAEL D. BUSTAMANTE, Judge
WE CONCUR:
____________________________________
JONATHAN B. SUTIN, Judge
____________________________________
TIMOTHY L. GARCIA, Judge
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