Chesapeake Charter, Inc. v. Anne Arundel County Board of Education

WILNER, Judge. Before us is a procurement dispute between three school bus contractors, appellants here, and the Anne Arundel County Board of Education, appellee. The precise issue is whether the Maryland State Board of Contract Appeals (MSBCA), created to resolve disputes arising under the State General Procurement Law, has jurisdiction over that dispute. The larger question, which the parties agree governs that issue, is whether the procurement of services by a county board of education is subject to the General Procurement Law.

We shall answer that question in the negative and thus affirm the judgment of the Circuit Court for Anne Arundel County which, in turn, affirmed MSBCA’s dismissal of the procurement protest by the bus contractors. ¹³² PROCEDURAL BACKGROUND For many years, appellee obtained much of its student transportation services through contracts negotiated and entered into with individual bus contractors, each contract covering one or more routes. In 1997, the board decided to use a different approach, involving sealed competitive bids for longer-term, multi-route contracts. On November 3, 1997, it formally solicited bids for four groups of bus routes, each group containing five routes. Two pre-bid conferences were held, and, as a result of questions and concerns raised by prospective bidders, five amendments and clarifications were issued and an initially scheduled bid opening was postponed.

On February 2, 1998—one day before the rescheduled bid opening—18 prospective bidders, still dissatisfied, sent a protest letter to the board’s purchasing officer complaining (1) about certain substantive specifications, including a minimum wage requirement for bus operators and aides, and (2) that the board’s bidding procedures did not comply with the requirements of the General Procurement Law. Joined by some other bus contractors, they also filed suit in the Circuit Court for Anne Arundel County to restrain the board from opening the bids. That suit was voluntarily dismissed, without prejudice, after the court denied their request for a preliminary injunction. The board opened the bids as scheduled, and, on February 18, it formally awarded contracts for three of the four route groups.

The bids for one route group were rejected because they were too high. Treating the opening of the bids as an implicit denial of their protest, and without waiting for either an award of the contracts or a formal denial of their protest, appellants, on February 12, filed a Notice of Appeal with MSBCA. On February 27, the purchasing officer formally rejected each aspect of the protest, including the contention that the board was subject to the General Procurement Law. She advised that county school boards were authorized to enter into procurement contracts pursuant to their own procedures, subject to administrative review by the State Board of Education, and ¹³³ that they were not under the General Procurement Law or subject to the jurisdiction of MSBCA.

Unpersuaded, appellants pressed their appeal to MSBCA. Appellee, joined by the State Board of Education, which intervened as an interested party, moved to dismiss the appeal on the ground that, as appellee was not subject to the General Procurement Law, MSBCA had no jurisdiction to consider the protest and that any administrative review of appellee’s decision must come from the State Board of Education. On April 10, 1998, MSBCA filed a memorandum opinion in which it adopted that view and dismissed the appeal. MSBCA concluded that, although county boards of education may be State agencies for some purposes, they are not units in the Executive Branch of the State Government for purposes of the General Procurement Law and are therefore not subject to that law.

Although acknowledging some gaps in the law, MSBCA determined that procurement by the county boards was provided for in the Education Article of the Code and that some of the provisions in that Article were inconsistent with the General Procurement Law. Noting the extensive supervisory control possessed by the State Board of Education over matters relating to educational policy and the administration of the public school system, MSBCA held that the authority to review procurement practices and decisions of the county school boards was vested in the State Board of Education and not in MSBCA. The Circuit Court for Anne Arundel County, on appellants’ petition for judicial review, affirmed MSBCA’s decision, for the reasons cited by MSBCA. It concluded that “the Education Article, and not the General Procurement Law, governs the procurement of school bus transportation contracts, and that MSBCA is, therefore, not the appropriate forum to which disputes of this nature should be brought.” Instead, citing the extensive authority vested in the State Board of Education, the court held that that board was “the appropriate forum” for resolving controversies involving a county board, “including a protest to a solicitation for bids.” We granted certiorari in ¹³⁴ appellants’ appeal on our own initiative, prior to any proceedings in the Court of Special Appeals, to review that judgment.

DISCUSSION The General Procurement Law is codified in the Maryland Code as Division II (titles 11 through 17) of the State Finance and Procurement Article (SFP). Section 11-202 provides, in relevant part, that, unless otherwise expressly provided by law, the General Procurement Law applies to “each expenditure by a unit under a procurement contract.” (Emphasis added). MSBCA is created by SFP § 15-205 and is vested with jurisdiction to hear and decide, subject to judicial review, all appeals from the final action of “a unit” on a protest relating to the formation of a procurement contract or, except for a contract claim relating to a lease of real property, on a contract claim concerning breach, performance, modification, or termination. See § 15-211.

There is no dispute that the award of a contract by a county school board for bus transportation service constitutes an “expénditure” under a “procurement contract.” Thus, whether appellee is subject to the General Procurement Law and, as a result, MSBCA has any jurisdiction in this matter, hinges on whether a county school board is “a unit” within the meaning of that law. The term “unit” is defined in SFP § ll-101(x): “(1) ‘Unit’ means an officer or other entity that is in the Executive Branch of the State government and is authorized by law to enter into a procurement contract. (2) ‘Unit’ does not include: (i) a bistate, multistate, bicounty, or multicounty governmental agency; or (ii) a special tax district, sanitary district, drainage district, soil conservation district, water supply district, or other political subdivision of the State.” Relying on a number of decisions of this Court holding that county school boards are State, rather than county, agencies, appellants assume that those boards are therefore part of the ¹³⁵ Executive Branch of the State government. They thus maintain that, as the boards are authorized by law to enter into procurement contracts but are not within any of the exclusions listed in § ll-101(x)(2), they fall within the definition of “unit.” Appellants urge as well that inclusion of county school boards under the General Procurement Law is consistent with and supportive of the purposes of that law, as articulated in § 11-201.

Nothing in the Education Article dealing with procurement by county school boards, they contend, is sufficiently inconsistent with the General Procurement Law to suggest an intent by the Legislature to exclude those boards from that law or from the jurisdiction of MSBCA. That agency, they insist, is far more competent to resolve procurement disputes than is the State Board of Education. The issue raised is purely one of statutory construction. As we have said so often, in construing a statute, our objective is to ascertain and give effect to the intent of the Legislature.

Melgar v. State, 355 Md. 339, 347 , 734 A.2d 712, 716 (1999). If the language of the statute is clear and unambiguous and expresses a meaning consistent with the statute’s goals and apparent purpose, our inquiry normally ends with that language. Id. If, on the other hand, the language is susceptible to more than one meaning and is therefore ambiguous, we consider “not only the literal or usual meaning of the words, but their meaning and effect in light of the setting, the objectives and purpose of the enactment,” and, in those circumstances, in seeking to ascertain legislative intent, we consider “the consequences resulting from one meaning rather than another, and adopt that construction which avoids an illogical or unreasonable result, or one which is inconsistent with common sense.” Tucker v. Fireman’s Fund Ins.

Co., 308 Md. 69, 75 , 517 A.2d 730, 732 (1986); Board of License Commissioners for Charles County v. Toye, 354 Md. 116, 123 , 729 A.2d 407, 410 (1999). County school boards are creatures of the General Assembly. Section 3-103 of the Education Article (ED) creates such a board for each county, with limited authority to control ¹³⁶ educational matters that affect the county. See ED § 4-101.

In 13 counties, the members of the board are elected by the voters of the county (§ 3-114); in Baltimore City, the members of the board, other than a student member, are appointed jointly by the Governor and the Mayor of Baltimore (§ 3-108.1); in the other counties, the members are appointed by the Governor from among the residents of the county (§ 3-108). The county school systems are funded in part by the State and in part by the counties. Hornbeck v. Somerset Co. Bd. of Educ., 295 Md. 597 , 458 A.2d 758 (1983). 1 Although in terms of their composition, jurisdiction, funding, and focus, they clearly have a local flavor, the county school boards have consistently been regarded as State, rather than county, agencies. See Bd. of Ed. v. Montgomery County, 237 Md. 191, 197 , 205 A.2d 202, 205 (1964); McCarthy v. Bd. of Education of A.A. Co., 280 Md. 634 , 374 A.2d 1135 (1977); Bd. of Educ. v. P.G. Co. Educators’ Ass’n, 309 Md. 85 , 95 n. 3, 522 A.2d 931, 936 (1987); Montgomery Co. Ed. Ass’n v. Bd. of Educ., 311 Md. 303, 317 , 534 A.2d 980, 987 (1987); Board v. Secretary of Personnel, 317 Md. 34 , 44 n. 5, 562 A.2d 700, 705 (1989); Board v. Town of Riverdale, 320 Md. 384 , 387 n. 3, 578 A.2d 207, 209 (1990); State v. Board of Education, 346 Md. 633, 640 , 697 A.2d 1334, 1338 (1997).

County school boards are considered generally to be State agencies because (1) the public school system in Maryland is a comprehensive State-wide system, created by the General Assembly in conformance with the mandate in Article VIII, § 1 of the Maryland Constitution to establish throughout the State a thorough and efficient system of free public schools, (2) the county boards were created by the General Assembly as an integral part of that State system, (3) their mission is ¹³⁷ therefore to carry out a State, not a county, function, and (4) they are subject to extensive supervision by the State Board of Education in virtually every aspect of their operations that affects educational policy or the administration of the public schools in the county. Although legally State agencies for those reasons, they are not normally regarded, for structural or budgetary purposes, as units within the Executive Branch of the State government. This becomes evident when we examine the place of county school boards in the structure and governance of public education in Maryland. In carrying out the mandate of Article VIII, § 1, the Legislature created a deliberate and well-defined balance between State government structures and State-based but predominantly local structures.

The State government structure for primary and secondary education is the State Department of Education, created by ED § 2-101 “as a principal department of the State government.” The Department consists of (1) the State Board of Education, which is the head of the Department (§ 2-102) and is vested with ultimate supervisory authority for determining educational policy in Maryland and administering the public school system, (2) the State Superintendent of Schools, who is a member of the Governor’s Executive Council (§ 2—303(d)) and serves, in essence, as the chief executive officer of the Department, and (3) the other professional, administrative, and clerical employees employed by the Department, who are State government employees for budgetary and personnel purposes. See FY 2000 Maryland State Budget, Part II at 283, showing 1,344 authorized positions for the State Department of Education and an appropriation of nearly $67 million to pay those employees. The authority of the State Board of Education, codified in part in ED § 2-205, has been described as “a visitatorial power of the most comprehensive character,” one that is “in its nature, summary and exclusive.” Wiley v. Allegany County School Comm’rs, 51 Md. 401, 405-06 (1879); Zantzinger v. Manning, 123 Md. 169, 178 , 90 A. 839, 842 (1914); Wilson v. ¹³⁸ Board of Education, 234 Md. 561, 565 , 200 A.2d 67, 69 (1964). It includes (1) determining the primary and secondary educational policies of the State, (2) explaining the true intent and meaning, causing to be carried out, and deciding all controversies and disputes arising under the provisions of the Education Article that are within its jurisdiction, 2 (3) adopting by-laws, having the force of law, for the administration of the public schools, (4) through the State Superintendent of Schools, exercising general control and supervision over the public schools and educational interests of the State, (5) preparing the annual State public school budget, including appropriations for State aid to the counties for current expenses, student transportation, and public school construction, and (6) specifying the information each county board is required to record and the form in which it is to be recorded.

For each county, the Legislature has created a county department of education that, in structure, generally mirrors that of the State Department of Education. The county school board is the head of the county department and is responsible for administering, in the county, the supervening State policy determined by the State Board of Education, in accordance with State Board’s directives. 3 See ED § 4-108. There is, as well, a county superintendent, who is the executive officer of the county board and, in essence, the chief executive officer of the county department. Finally, there are the teachers, principals, and other professional, administrative, clerical, security, transportation, and maintenance staff hired by the county school board to work in or service the schools in the county.

Unlike the situation at the State level, the county superintendent and the employees of the county department of education are appointed and their salaries are set by the county school board upon recommendation of the county su ¹³⁹ perintendent, § 4-103(a), in accordance with a personnel system established by the county board. As we indicated, the State currently provides approximately 42% of the current operating revenues of the county boards. Most of those funds are appropriated by the General Assembly to the State Department of Education for pass-through to the county boards, either in conformance with the basic current expense sharing formula set forth in ED § 5-202 or pursuant to other State aid provisions in title 5 of that article. 4 See Fiscal Year 2000 Maryland State Budget, Part II, at 283-334. None of the major appropriations for operating expenses are made directly by the General Assembly to the county boards.

The county boards prepare and submit their annual budgets to the respective county governments which, subject to certain