Opinion No. Oag 91-79, (1979)

KENNETH LINDNER, Secretary Department of Administration

You have asked for my opinion on the following questions:

1. Are cities, counties, county community mental health, mental retardation, alcoholism and drug abuse program boards (51.42 Boards) and other local governmental entities contracting agencies of the state under s. 16.765, Wis. Stats., and, therefore, required to include in their contract documents the provisions of s. 16.765 (2)(a). i.e., the non-discrimination clause?

2. Does the Council on Small and Minority Business, pursuant to 16.755 (1), Wis. Stats., have authority to review the extent of small business participation in purchasing by cities, counties and other local governmental entities?

In my opinion the answer to your first question is no. The phrase "contracting agencies of the state" refers to the Department of Administration and all other state agencies authorized to sign contracts pursuant to sec. 16.76, Stats.

Section 16.76, Stats., provides in part:

CONTRACTS, CONTENTS, ARBITRATION CLAUSE. (1) All contracts for materials, supplies, equipment and contractual services shall run to the state of Wisconsin, and shall be signed by the secretary or persons authorized by the department.

Section 16.765, Stats., provides in part:

NONDISCRIMINATORY CONTRACTS. (1) Contracting agencies of the state shall include in all contracts executed by them a provision obligating the contractor not to discriminate against any employe or applicant for employment because of age, race, religion, color, handicap, sex, physical condition, developmental disability as defined in s. 51.01 (5) or national origin, and obligating the contractor to take affirmative action to ensure equal employment opportunities.

. . . .

(8) If further violations of this section are committed during the term of the contract, the contracting agency involved may permit the violating party to complete the contract, after complying with this section, but thereafter the contracting agency shall request the department to place the name of the party on the ineligible list for state contracts, or the contracting agency may terminate the contract without liability for the uncompleted portion or any materials or services purchased or paid for by the contracting party for use in completing the contract.

(9) The names of parties who have had contracts terminated under this section shall be placed on an ineligible list for state contracts, maintained by the department. No state contract may be approved and let to any party on such list of ineligible contractors.

Section 16.77, Stats., provides in part:

AUDIT OF BILLS; ILLEGAL CONTRACTS; ACTIONS TO RECOVER. No bill or statement for work or labor performed under purchase orders or contracts issued by the secretary or his designated agents, and no bill or statement for supplies, materials, equipment or contractual services purchased for and delivered to any office shall be paid until such bill or statement shall have been approved by the secretary or his designated agents.

In interpreting statutes, it is important to note their position relative to other statutes. See State v. ConsolidatedFreightways Corp., 72 Wis. 2d 727, 737, 242 N.W.2d 192 (1976). The entire section is to be considered. Omernik v. State,64 Wis. 2d 6, 12, 218 N.W.2d 734 (1974). A term must be read "in its context within the statutory section as a whole." Falkner v. Northern States Power Co.,75 Wis. 2d 116, 124, 248 N.W.2d 885 (1977). And the meaning of a particular section must be derived from consideration of the act or statute as a whole. State v. Wachsmuth, 73 Wis. 2d 318, 323,243 N.W.2d 410 (1976).

The Department of Administration is created by sec. 15.10, Stats., and pursuant to sec. 15.101, Stats., has the program responsibilities specified for it under ch. 16, Stats. Chapter 16, Stats., is entitled "Department of Administration" and is divided into eight subchapters which define the Department's responsibilities in several broad areas, e.g., finance, purchasing, engineering, and state planning and energy. Section16.765, Stats., is part of subch. IV which is entitled "Purchasing" and which contains statute sections numbered 16.70 through 16.845. Section 16.71, Stats., states in part that "[t]he department shall purchase and may delegate to special designatedagents the authority to purchase all necessary materials, supplies, equipment, all other permanent personal property and miscellaneous capital, and contractual services and all other expense of a consumable nature for all offices." Section 16.70 (1), Stats., defines "office" to include "both houses of the legislature and any department, board, commission or body connected with the state government, including all educational, charitable, correctional, penal and other institutions." Section16.76, Stats., states in part that "[a]ll contracts for materials, supplies, equipment and contractual services shall run to the state of Wisconsin, and shall be signed by the secretary or persons authorized by the department." To assure that purchasing takes place at the proper level, the Department of Administration, through the State Bureau of Procurement, delegates the authority to sign purchasing contracts under sec.16.76, Stats., to purchasing agents of the various state agencies which the Bureau has determined are ready to manage and operate under the established procurement guidelines. All such delegations are in writing and must be accepted by each state agency in writing. Manual on Organization Policies for theState Bureau of Procurement, February 10, 1978. Moreover, subsecs. (8) and (9) of sec. 16.765, Stats., refer to eligibility for state contracts, and sec. 16.77, Stats., provides for auditing of contracts through the Department of Administration. Finally, ch. 16, Stats., is part of tit. 111 of the statutes which is titled "General Organization of the State, Except the Judicial Department" and relates to the legislative and executive branches of state government.

It is evident, then, that the statute as a whole deals with state contracts, i.e., contracts in which the state is one of the contracting parties. It follows that the entities you mention, not being part of the legislative or executive branches of state government, are not included as "contracting agencies of the state" within the meaning of sec. 16.765, Stats.

In my opinion the answer to your second question also is no.

Section 16.755, Stats., provides:

COUNCIL ON SMALL AND MINORITY BUSINESS OPPORTUNITIES. The council on small and minority business opportunities shall:

(1) Review the extent of small business participation in purchasing by this state and its subdivisions.

(2) Advise the department's purchasing agent with respect to methods of increasing such participation.

(3) Advise the department's purchasing agent with respect to methods of simplifying or easing compliance with the forms and procedures used or to be used for obtaining contracts with the state for providing materials, supplies, equipment and contractual services.

(4) Advise the department concerning methods of improved compliance with any aspect of its duties under s. 16.75 (4) (a).

(5) Annually, submit in its report under s. 15.09 (7) any recommendations regarding the matters described in subs. (1) to (4) to the governor and the legislature.

Section 16.75 (4)(a), Stats., provides:

The department shall encourage the participation of small businesses in the statewide purchasing program by ensuring that there are no undue impediments to such participation and by actively encouraging small businesses to play an active role in the solicitation of public purchasing business. To that end the department shall:

1. Maintain a comprehensive bidders list of small state businesses which have demonstrated the capacity of providing materials, supplies, equipment or contractual services to the state;

2. Develop ways of simplifying specifications and terms so that they will not impose unnecessary administrative burdens on small state businesses which submit bids to the state;

3. Assist small state businesses in complying with state bidding procedures;

4. Notify businesses on the list maintained under subd. I of office purchasing requests for which the businesses may wish to submit a bid; and

5. By May 1 of each year, submit a report to the council on small and minority business opportunities which evaluates the performance of small Wisconsin businesses submitting bids to the state and makes recommendations for increased involvement of such businesses in bidding under this section.

I am aware, of course, that the phrase "subdivisions" often is used to refer to political subdivisions such as cities and counties, and standing alone the same referent could have been intended in sec. 16.755 (1), Stats. Considering this term in the context of the section, the chapter and the title of which it is a part, it is clear that "subdivisions" refers to those agencies of the state government which have been delegated power to contract for the state. Had the Legislature intended that the Council deal with local units of government on methods, it could have said so expressly. Instead, sec. 16.755 (3), Stats., for example, requires the Council to advise "the department's purchasing agent" in respect to methods for obtaining contracts "with the state." Further, sec. 16.755 (4), Stats., requires the Council to advise the Department on improving compliance with sec. 16.75 (4)(a), Stats., which refers to the Department's responsibility toward small businesses which deal with the state.See also, ch. 419, sec. I, Laws of 1977 ("to offer assistance to small and minority businesses in the competition for state purchasing contracts").

Accordingly, in as much as the entire focus of the statutory material as a whole is placed on the state's own program for contracting for services and materials, it is clear that "subdivisions" in sec. 16.755 (1), Stats., refers to the Department of Administration and other state agencies and not to political subdivisions such as cities and counties.

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