Mr. Leonard W. Sandridge
Executive Vice President
University of Virginia
Post Office Box 400228
Charlottesville, Virginia 22904-4228

March 21, 2006

Dear Mr. Sandridge:

The Chief Deputy Attorney General has forwarded to me your letter of March 3, 2006. regarding the stipulation of a minimum wage requirement for private contractors and vendors. I appreciate the opportunity to offer advice and guidance regarding this issue.

You ask whether the Rector and Visitors of the University of Virginia "may stipulate a minimum or living wage requirement (other than the wage levels already required by federal and State law) that must be paid by private contractors and vendors to their employees who are working at the University providing ... goods and services, either as a condition of being awarded a University procurement contract or pursuant to (the) governing board's general regulatory authority." In addition, you ask if localities have "greater or exceptional authority" to adopt such policies.

It is the advice of this Office that the authority granted to the Board of Visitors of the University of Virginia does not include the authority to require a minimum or living; wage requirement that must be paid by private contractors and vendors. Such authority can be exercised only by an explicit grant of authority from the General Assembly. Additionally, even if it were presumed that the University could act without such explicit grant of authority. it is the advice of this Office that the Public Procurement Act does not allow for the requirement of a living wage in the procurement process.

As to your second question, in 2002 this Office issued an opinion regarding the authority of localities to require a "living wage." That opinion remains the advice of' this Office. The extent to which localities have acted contrary to that opinion does not set a precedent under which universities may act likewise. Virginia's public colleges and universities are agencies of the Commonwealth; counties, cities, and towns are subordinate political subdivisions of the Commonwealth. It is the view of this Office that any locality requiring a "living wage" as a condition of being awarded a procurement contract is in violation of the Public Procurement Act.

It is well established that a university, through its governing Board, "has the powers expressly conferred upon it and implied power to do whatever is reasonably necessary to effectuate them." This broad authority does not, however, supersede statutory or case law, public policy. or explicit statements of the General Assembly regarding specific topics. The Board of Visitors of the University of Virginia is granted the authority to "make such regulations as they may deem expedient, not being contrary to law. By enacting the Virginia Public Procurement Act. the General Assembly has set clown explicit statutory provisions governing procurernent.

The purpose of the Virginia Public Procurement Act "is to enunciate the public policies pertaining to governmental procurement from nongovernmental sources." The Act provides that "(a)ll public contracts with nongovernmental contractors for the purchase or lease of goods, or for the purchase of services, insurance, or construction, shall be awarded after competitive sealed bidding, or competitive negotiation as provided in this section, unless otherwise authorized by law. The Act further seeks to ensure that solicitations by governmental units are presented and awarded in a fair manner in order to promote competition.'' The clear intent of the Act is to provide a sure procedure under which the tax dollars of the. Commonwealth are spent in an efficient and reasonable manner to obtain the highest quality of goods and services. The Act additionally is a safeguard to prevent myriad factors deemed relevant by the procuring body from being considered in the procurement process.

This Office has been asked on several occasions to advise on such factors that may be considered in the procurement process. This Office has stated that it is inconsistent with the policy of the Procurement Act to condition award of a contract on factors that are unrelated to the goods or services being Procured. This Office has concluded that a county seeking to impose an affordable housing requirement on the selection of a depository for county funds is imperrnissible. That a city may not adopt an ordinance prohibiting discrimination on the basis of sexual orientation in the award of government contracts, and that a locality may not adopt a policy granting preference to local bidders. In each of these instances, this Office maintained that specifications reflect the procurement needs of the public body and that those needs relate to the products or services being procured. The fact that some of these actions are now permissible under the Act due to legislative changes made subsequent to our opinions underscores the fact that the General Assembly holds sole authority to authorize procedural alterations of the Act.

It has been asserted that the "best value" provision of the Act provides authority for an entity to require a "living wage." The Act states that "(p)ublic bodies may consider best value concepts when procuring goods and nonprofessional services, but not construction or professional services. The criteria, factors, and basis for consideration of best value and the process for the consideration of best value shall be as stated in the procurement solicitation." The "best value" must be predetermined in. the solicitation and is defined as "the overall combination of quality. price, and various elements of required services that in total are optimal relative to a public body's needs.'''

The purpose of "best value" considerations is to allow a governmental unit in a competitive negotiation process to consider factors other than price related to the goods or services being solicited. Any such factor, however, must tall within the statutory definition of the overall combination of quality, price, and various elements of required services that in total are optimal relative to a public body's needs. There must exist a link between the factors asserted under `best value" considerations and the need of the public body. The amount of wages paid by a private contractor to its employees does not affect the needs of a public body or the quality of the product or services. The rationale supporting "living wage" ordinances or contractual provisions is that public bodies should not contract with employers who pay what are perceived as inadequate wages. In addition, many living wage policies address issues such as health insurance, paid vacation, labor relations, and hiring practices. As such. the "living wage" issue clearly is a matter of social, political, or economic policy. it .is not related to the goods or services sought to be procured and therefore may not be a factor considered pursuant to "best value" provisions.

Additionally, there is no evidence that the General Assembly intended by inserting "best value" considerations to depart from the long-standing interpretation of the Virginia Public Procurement Act as discussed in the previous opinions of the Attorney General. There is nothing in § 2.2-4300(C) or § 2.2-4301 to suggest that the General Assembly intended any change in the basic policy of the Act that specifications reflect the procurement needs of the public body, and not the policy dictates of a social, economic, or political agenda. Therefore, it is the view of this Office that a public body does not have authority to require contractors to provide a 'living wage" to their employees as a requirement of receiving public contracts.

Accordingly, it is the advice of this Office that the authority granted to the Board of Visitors of the University of Virginia does not include the authority to stipulate a minimum or living wage requirement that must be paid by private contractors and vendors. Such authority can be exercised only by an explicit grant of authority from the General Assembly. Additionally, even if it were presumed the University could act without such explicit grant of authority. it is the advice of this Office that the Public Procurement Act does not allow for the requirement of a living wage in the procurement process.

I appreciate the opportunity to be of service to you. Please feel free to contact me if you have any questions.

Sincerely;

[signed]
David E Johnson
Deputy Attorney General
Health. Education & Social Services