By William W. Abbott

As with most things in life, one person’s gain is another person’s loss, and public-private partnerships are not exempt from these types of tradeoffs. To the state engineers and their representative union, the contracting out to private engineering firms of engineering services traditionally performed by Caltrans engineering staff represents one of those zero-sum games. This becomes the backdrop to a challenge to the Phase II improvement work on Doyle Drive, the highway approach to the southern terminus of the Golden Gate Bridge, an existing roadway project worthy of improvement.

At the heart of the litigation is Streets and Highways code section 143, a section permitting public private partnerships, one feature of which was the performance of engineering services by outside engineering companies for work traditionally performed by Caltrans engineering staff. The history of the proposed improvement dates back to 1998, when through a series of cooperative agreements between Caltrans and San Francisco County Transportation Authority (SFCTA), SFCTA undertook a number of feasibility studies for improving Doyle Drive. In 2009, the Legislature significantly expanded potential opportunities for public private partnerships, also known as P3s. Caltrans ultimately awarded a P3 contract to a private contractor, and a separate cooperative agreement with SFCTA. The agreements called for a supervisorial role for Caltrans, but project construction would be the responsibility of the private contractor.

The state Professional Engineers filed suit, seeking to set aside the contract and enjoin the action. The trial court denied relief which was affirmed on appeal.

The plaintiff’s primary attack was the project did not qualify as a P3, as Caltrans had not been acting as a responsible agency, as the initial engineering work had been performed by private consultants working for SFCTA. Responding to an argument over legislative interpretation, the appellate court ultimately concluded that responsible agency status required Caltrans to be responsible for the performance of the work, not that it was required to perform the work, and that under the terms of the various agreements, this element was satisfied.

Given the current state budget pressures in Sacramento, it will be worth watching to see whether or not the less-government-rather-than-more movement will make further inroads into contracting out services traditionally performed by agency employees. (Professional Engineers in California Government v. Department of Transportation (August 8, 2011, A131449) ___ Cal.App.4th ___.)

William W. Abbott is a partner at Abbott & Kindermann, LLP. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.