BHP PETROLEUM SOUTH
PACIFIC, INC., Petitioner,
v.
AMERICAN SAMOA
GOVERNMENT, OFFICE OF PROCUREMENT, a duly organized agency of the
Governor of
____________________________________
MOBIL OIL AUSTRALIA,
LTD., Intervenor/Real Party in Interest.
High Court of
Appellate Division
[1]
Under A.S.C.A. §§ 3.0208(c), 4.1040-.1044 and 10.0282, the court has authority
to review administrative decisions in the procurement process; the review is
confined to the record, and to questions of law, not fact.
[2]
It is a violation of both constitutional and statutory provisions for the
Governor to act as chief procurement officer.
[3]
The object of the tripartite system of government of
[4]
The governor has the powers, duties and responsibilities as delegated under
A.S.C.A. § 4.0111 in addition to those powers conferred by article IV of the Revised Constitution of American
Samoa, and the laws for which the governor is responsible for faithful
execution of are established by the legislative branch.
[5]
Under A.S.C.A. §§ 12.0205 and 12.0206 the Legislature created the office of procurement
and the position of chief procurement officer, and specified certain
credentials for such officer, who is appointed by the governor and confirmed by
the Legislature.
[6]
The governor does not possess the power to make appointments to public office
unless it is expressly conferred by the constitution or statutes, and neither
allows him to appoint himself as chief procurement officer. [2ASR3d11]
[7]
The general supervisory power over the executive department given to the
governor by Article IV, section 7 of the Revised Constitution of American Samoa
does not include the power of appointment.
[8]
Article IV, section 11 of the Revised Constitution of American Samoa gives the
governor specifically limited power to appoint officials who are not otherwise
provided for, and the chief procurement officer is otherwise provided for.
[9]
Under A.S.C.A. § 12.0213, the Governor has the power to make procurements
himself only in an emergency as defined under A.S.C.A. 26.0105(d), and such
procurement must be as competitive as possible and be accompanied by a written
determination of the basis for the emergency.
[10]
Under
[11]
The American Samoa Procurement Act of 1983, A.S.C.A. §§ 12.0201-.0219, carefully
proscribes a system of government purchasing so as to ensure predictability and
fairness, and the integrity of this system is disturbed when the Governor acts
as chief procurement officer.
[12]
Where the Governor commingles the powers of separate offices, he exceeds the
scope of his constitutional and legislatively granted powers, to the prejudice
of substantial rights of an affected party, and a decision by the Governor
acting as chief procurement officer to award a contract must be reversed.
[13] An administrative rule adopted under the
Administrative Procedures Act, A.S.C.A. §§ 4.1001-.1044 has the full force and
effect of law.
Before KRUSE, Chief
Justice,
Counsel: For Petitioner, Brian M.
For Respondents, Henry W.
For
Intervenor/Real Party in Interest, Marshall L.
ORDER REVERSING AND
REMANDING AWARD OF PROCUREMENT CONTRACT REQUEST FOR PROPOSALS 001-97
[2ASR3d12] Petitioner
BHP Petroleum South Pacific, Inc. (“BHP”) brought this action for judicial review
of the administrative decision by respondents American Samoa Government
(“ASG”), Office of Procurement, a duly organized agency of ASG (“ASGOP”), and
Tauese P.F. Sunia, Governor of American Samoa (“the Governor”) to award the
contract under the Request for Proposals 001-97 (“RFP 001-97”), Qualified
Companies to Operate Fuel Storage Facilities (“the contract”) to intervenor/real party in interest Mobil Oil
Australia, Ltd. (“Mobil”). BHP seeks a
permanent injunction preventing ASG from entering the contract with Mobil and
requiring ASG to enter the contract with BHP.
Background
ASG
issued RFP 001-97 on
The
Governor (acting as chief procurement officer) appointed a source evaluation
board (“SEB”) to evaluate the proposals.
The SEB did not reach a consensus on recommending a single prospect, so
it recommended both BHP and Mobil to the Governor (acting as chief procurement
officer). The SEB requested that “the Governor of the
On
(b) Requirements. All such
disputes shall be submitted in writing to the procurement officer making the
decision. The procurement officer shall
acknowledge receipt of the dispute within 5 working days of receipt and shall
render a final decision within 30 working days after receipt of the dispute.
On
August 7 and 8, 1997, the Governor (acting as chief procurement officer) issued
his final decision in response to Global’s and BHP’s notices of dispute. BHP then filed an appeal with the Governor
(acting as governor) on either August 22 or 26, 1997 and Global did so on
(c) Appeals. Appeals of a
procurement officer’s final decision in a dispute may be made within 60 days of
the date of the decision, provided such appeal is submitted in writing to the
Governor. The Governor shall appoint a
board of at least three responsible persons knowledgeable of procurement to
review such appeals and recommend appropriate action to the Governor. None of the board members shall have
participated in the action under appeal.
At least one of the board members shall be a qualified attorney. Hearing procedures and documentation shall be
set forth in the Administrative Procedures Act, 4.1025 A.S.C.A. et seq., and the rules.
On
October 14, 1997, stating that it was doing so because the Governor (acting as
governor) had not yet appointed an appeal board as required by A.S.A.C. §
10.0282(c), BHP petitioned this court for judicial review, and for a temporary
restraining order, and preliminary and permanent injunctions preventing ASG
from entering the contract with Mobil and requiring ASG to enter the contract
with BHP. ASG, ASGOP and the Governor
responded to this petition on
On
The
appeal board forwarded its recommendation to the Governor (acting as governor),
who objected to the findings but agreed that it would be in the best interest
of all the parties to concur with the panel’s recommendation. The Governor (acting as governor) then
remanded the matter to the Governor (acting as chief procurement officer) and
the SEB. [2ASR3d14]
The
Governor (acting as chief procurement officer) reconfigured the SEB by making a
new appointment to the board. The SEB
reviewed the original proposals, conducted discussions with the three offerors,
and solicited best and final offers. The
SEB then reviewed the best and final offers and forwarded its findings and
recommendations to the Governor (acting as chief procurement officer) on
BHP
filed a notice of dispute with the chief procurement officer on
On
March 9, 1998, after the original appeal board issued its Findings of Fact,
Conclusions of Law, and Recommendations but before the Governor (acting as
governor) took any action on the recommendations, BHP filed the motion to enter
“permanent orders” that is currently before this court. We held a hearing on this motion on
Standard
of Review
[1] The court’s
authority to review administrative decisions in the procurement process is
found in A.S.C.A. §§ 3.0208(c), 4.1040-.1044 and A.S.C.A. § 10.0282. We do not substitute our judgment for that of
the agency on questions of fact, but it is our place to determine questions of
law. A.S.C.A. § 4.1043(b). Our review is confined to the record. A.S.C.A. § 4.1043. Under A.S.C.A. § 4.1044, we may:
. . . reverse or modify the decision of the agency, or remand the case
for further proceedings, if substantial rights of the petitioner have been
prejudiced because the decision of the agency is:
(1) in violation of applicable constitutional or statutory provisions; [2ASR3d15]
(2) in excess of the statutory authority of the agency;
(3) made upon unlawful procedure;
(4) affected by other error of law;
(5) clearly erroneous in view of the reliable, probative, and
substantial evidence in the whole record;
(6) arbitrary, capricious or characterized by abuse of discretion.
Discussion
[2] BHP posits that it
was the lowest reasonable, responsive, responsible bidder meeting the
requirements of the invitation for bids, that Mobil’s proposal failed to meet a
number of the bid specifications, and that the procurement process was replete
with errors. Most importantly, BHP
argues that the Governor may not act as chief procurement officer. This issue is a question of law, and thus is
subject to our review. It is also
preliminary to the other issues raised by BHP.
The appeal board found that the Governor has the authority to act as
chief procurement officer. We
disagree. We find that under the facts
of the procurement process for RFP 001-97, the Governor violated both
constitutional and statutory provisions by acting as chief procurement
officer. We therefore do not need to
consider the remainder of BHP’s claims.
[3]
[4] The executive
branch, as defined by the Revised Constitution of American Samoa, art. IV,
includes the offices of governor, lieutenant governor, and secretary of Samoan
Affairs. Some of the powers of the
governor are conferred in article IV; the source of other powers are found in
various sections of the statutory code.
When taking office, the governor swears to “well and faithfully uphold
the laws of the
The
laws for which the governor is responsible for “faithful execution of” are established
by a separate branch of the government, the legislative branch. Article II of the Revised Constitution of
American Samoa establishes the Senate and the House of Representatives as
comprising the legislative branch and confers authority to this branch to
establish laws of local application.
[5] The system of
appointment of certain officers of ASG highlights the importance of the
separation of the branches of government, and the checks and balances that this
separation should provide. Under this
system, the office and the credentials required by the office are created by
the Legislature. The Legislature grants
to the executive the power to appoint the officer, but conditions this power
upon confirmation of the appointment by the Legislature. Under A.S.C.A. § 12.0205, for example, the
Legislature created the office of procurement and the position of chief
procurement officer. The Legislature
enumerated the method of appointment for this office in A.S.C.A. §
12.0206. “The Governor shall appoint and
the Legislature shall confirm, a chief procurement officer.”
[6] By appointing
himself as chief procurement officer, the Governor has violated both the
statutes and the Revised Constitution of American Samoa. “The power to make
appointments to public office does not necessarily and inherently belong to the
governor. It must be derived from the
constitution or statutes; otherwise, he may not possess it. More specifically, appointing power exists
only in so far as it has been expressly conferred by the constitution and laws
of the state.” 38 Am. Jur. 2d, Governor § 5 (1968
& 1993 Supp.); Leek v. Theis, 539 P.2d 304, 314-21 (
[7-8]
Article IV, section 7 of the Revised Constitution of American Samoa states that
“[t]he Governor shall have general supervision and control of all executive
departments, agencies and instrumentalities of the Government of American
Samoa.” This is a general supervisory
power and gives the governor no power of appointment. Article IV, section 11 is the provision that
gives the governor the power to appoint officials. Article IV, section 11 also indicates
specific limitations of that power. The
governor may freely appoint only those officials who are not elected, are not
appointed by the Secretary of the Interior, or whose appointments are not
otherwise provided for. The chief
procurement officer is clearly an official whose appointment is “otherwise
provided for.” The Governor must
therefore [2ASR3d17] follow the
requirements established by the Legislature when appointing the chief
procurement officer. A.S.C.A. § 4.0112
also discusses the governor’s appointment power. Markedly, it emphasizes that for particular
positions, the governor’s power of appointment is subject to the confirmation
of the Legislature.
[9] The Governor
cannot expand his specifically limited power of appointment to a degree where
he can appoint himself as chief procurement officer. By statute, the Governor only has the power
to make procurements himself in an emergency, “when there exists a threat to
public health, welfare, or safety under emergency conditions as defined under
26.0105(d) ASCA.” A.S.C.A. §
12.0213. Even in an emergency situation,
the procurement must be as competitive as possible, and must be accompanied by
a written determination of the basis for the emergency.
Although
we indicated in Haleck’s West, Inc. v. Coleman, AP No. 29-84, slip op.
at 3 (Appellate Div. 1984), that the governor may in certain circumstances be
empowered to award a contract, we did not indicate that the governor could
appoint himself as chief procurement officer or that he could assume the duties
of the chief procurement officer. In Haleck’s
West, the governor had submitted an appointment of chief procurement
officer to the Legislature, but the Legislature had not yet confirmed that
appointment. In the present case, on the other hand, the Governor has submitted
no name to the Legislature for confirmation.
The Governor states that he has appointed himself as chief procurement
officer.
Even
if the Governor could appoint himself as chief procurement officer, he would
need to do so within the limits specifically established by the
Legislature. The Governor would need to
show that he meets the qualifications required of the chief procurement
officer. A.S.C.A. § 12.0206. And the Governor would need to submit his
appointment of himself for confirmation by the Legislature.
[10] The Governor thus
may not unilaterally expand the power of appointment granted to him by these
constitutional and statutory provisions. The Governor also is not at liberty to
ignore or suspend the operation of these statutes.
The
Governor presents his general constitutional supervisory power set forth in
article IV, section 7 of the Revised Constitution of American Samoa as
justification for assuming the role of chief procurement officer. This supervisory power, however, does not
allow the Governor to ignore operation of the statutes. The Governor must exercise his constitutional
powers within the laws established by the Legislature, not in an attempt to
avoid them. Cf. Vaela`a v.
Sunia, 1 A.S.R.3d 88, 93-95 (Trial Div. 1997) (holding that the
Governor, even if he were properly applying his constitutional pardon power to
undocumented aliens, would still be bounded by the immigration laws and
administrative rules.)
[11] When the
Legislature enacted the American Samoa Procurement Act of 1983, A.S.C.A. §
12.0201-.0219, it carefully proscribed a system of government purchasing which
would ensure predictability and fairness to all participants. By acting as chief procurement officer, the
Governor disturbs the integrity of this system.
In the current case, for example, the Governor (acting as chief
procurement officer) did not appoint an administrative appeal board until after
BHP filed its first petition in this case with the court. Similarly, the Governor (acting as governor)
did not take action on the appeal board’s February 20, 1998 Findings of Fact,
Conclusions of Law and Recommendations until after BHP filed the current motion
for “permanent orders”. The sequence of
these events appears to be a result not of coincidence, but of one person
performing two different legislated functions.
[12-13]
Similarly, by acting as chief procurement officer, the Governor disturbs the
dispute process legislated within the procurement act. Under the Governor’s system, offerors or
other participants disputing a procurement decision are faced with making an
appeal first to the Governor acting as chief procurement officer, and then to
the Governor acting as governor. The
administrative rules clearly envisioned the procurement appeal process to
include two different individuals carrying out the responsibilities of two
separate offices.[1] The rules did not envision the procurement
appeal process to include one individual commingling the powers of two separate
offices.
We
find, therefore, that the actions of the Governor in appointing himself as and
acting as chief procurement officer in the procurement process for RFP 001-97,
has exceeded the scope of his constitutional and legislatively granted powers,
and has violated the Revised Constitution of American [2ASR3d19] Samoa and the procurement provisions of the American
Samoa Code Annotated and the American Samoa Administrative Code. It follows that substantial rights of BHP
have been prejudiced. Under A.S.C.A. §
4.1043(b), then, we reverse the decision of the Governor to award the contract
under RFP 001-97 to Mobil.
In
its motion for “permanent orders”, BHP not only seeks to permanently preclude
ASG from entering the contract under RFP 001-97 with Mobil, but also seeks to
have the court award the contract to BHP.
We find that due to the constitutional and statutory errors in the
procurement process for this contract, awarding the contract to BHP is not an
appropriate remedy. Instead, if the ASG,
ASGOP and the Governor intend at this time to procure a terminal operator for
ASG’s petroleum products storage facilities and fuel dock and a principal
supplier of petroleum products, they must do so by lawfully following the
constitutional, statutorily, and administratively proscribed procurement
procedures.
Order
The
Governor’s award of the contract under RFP 001-97, Qualified Companies to
Operate Fuel Storage Facilities, to Mobil is reversed. In order for ASG and ASGOP to lawfully engage
in future procurements, the Governor must appoint an individual other than
himself as chief procurement officer and submit his or her name to the
Legislature for confirmation.
BHP’s
petition for the court to grant award of the contract under RFP 001-97, Qualified
Companies to Operate Fuel Storage Facilities, to BHP is denied.
We
remand the procurement of the terminal operator for ASG’s petroleum products
storage facilities and fuel dock, and for a principal supplier of petroleum
products to ASG, ASGOP, and the Governor to initiate new procurement
proceedings conducted in compliance with the constitutional, statutory and
administrative procurement requirements.
It
is so Ordered.
**********
[1] An administrative rule, adopted under the
Administrative Procedures Act, A.S.C.A. §§ 4.1001-.1044, has the full force and
effect of law. A.S.C.A. § 4.1009(c).