Georgia Johnson, Esq.
[email protected]
2801 Townsgate Road, Suite 212
Westlake Village, CA 91361
File No. 2588.038
GIBBS GIDEN LOCHER TURNER SENET & WITTBRODT LLP
California | Nevada | Arizona
www.gibbsgiden.com
3437271.2
October 20, 2025
VIA E-MAIL ONLY
Office of the City Clerk
City of Camarillo
601 Carmen Drive
Camarillo, CA 93010
Email: [email protected]
Re: City of Camarillo –Pleasant Valley Road Bike Lanes Project, Project No.: ST-5006
CML-5393 (036)
Toro Enterprises, Inc. Supplemental Bid Protest of Award to Bosco Constructions, Inc.
Dear City Clerk:
Our office represents Toro Enterprises, Inc. (“Toro”), a responsive and responsible bidder for the City of Camarillo (“City”) Pleasant Valley Road Bike Lanes Project (“Project”). Project bids were due and opened July 30, 2025. On August 5, 2025, Toro filed a bid protest letter with respect to the bid submitted by Bosco Constructors, Inc.(“Bosco”).
Toro supplements its August 5, 2025 bid protest on the grounds that, due to a recent change in the U.S. Department of Transportation’s (“DOT”) Disadvantaged Business Enterprise Program (“DBE”) and the California Department of Transportation’s (“Caltrans”) recent written policies implementing DOT’s changes, it is improper for the City to accept Bosco’s bid and award the contract to Bosco while, at the same time , eliminating the DBE goals and Bosco’s obligation to subcontract with DBE firms. Were the City to do so, Bosco could substitute its 17.2 % DBE subcontractor commitment with non -DBE subcontractors , which would: (i) violate California competitive bidding laws; (ii) give Bosco a financial advantage over other bidders; (iii) result in a financial windfall to Bosco, without any financial benefit to the City, and (iv) would thereby render the contract void and subject to a taxpayer challenge.
1. Executive Summary.
On September 30, 2025, DOT issued an Interim Final Rule (“IFR”), published in the Federal Register, which became effective October 3, 2025. On October 7, 2025, Caltrans’ Office of Civil Rights sent a letter to all DBE Program Stakeholders (see attached Exhibit 1) setting forth key changes which include: (i) elimination of race and gender-based presumptions of economic disadvantage with individualized evidence and financial documentation now required;
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(ii) reevaluation of all currently certified DBEs; and (iii) temporary suspension of goals and counting and similar changes.
Because the City’s Project bids were opened before the IFR and the contract has not been awarded, the DBE goal must now be removed according to Caltrans . See Exhibit 1, stating “Contracts currently advertised or pending award with DBE goals must have their DBE goals removed[.]” The removal of the DBE goal, however, would result in a material change in the bid, which is prohibited by California law, as detailed below. Bidder utilization of DBE firms is more expensive than non-DBE firms due to factors that include: (i) prime contractors are required to mentor and partner with DBE firms including making work items normally performed by the bidder with its own forces available to DBEs; (ii) prime contractors must assist DBEs in areas of bonding, lines of credit, obtaining necessary equipment, supplies and materials ; and (iii) prime contractors must oversee DBE scheduling, performance and project documentation requirements, all of which increase direct costs of the work and overhead costs to the prime. Given that Bosco’s pricing for DBE participations is 17.2%, if the City awards the contract based on bid prices that cannot be changed even though such work will be performed by non -DBEs at lower prices, the result will be a windfall to Bosco, which is unfair to other bidders like Toro. Further, it is not in the City’s best interest to award such a bid because it misuses public funds to the sole benefit of Bosco and otherwise violates the public policies that are foundational to California competitive bidding law, thereby rendering any resulting contract void and unenforceable.
Toro submits that t he only way to uphold the policies underlying California competitive bidding law is to reject all bids and rebid the Project, in whole or in part, without DBE goals.
Given that the contract award is not contemplated until at least December 2025, and the anticipated Project start date is not set to occur until at least March 2026, the City will benefit from expedited rebidding and thereby eliminate the potential for both a void contract and a legal challenge for failing to award the contract in accordance with California competitive bidding law.
2. Factual Background.
On October 13, 2025, more than 75 days after bid submission, the City responded to Toro’s August 5, 2025 bid protest with a letter enclosing, for the first time, Bosco’s September 10, 2025 reply to Toro’s protest . Such reply included documentation of Bosco’s commitment to award
17.2% of its bid amount to certified DBE firms . The City’s letter indicated that it intended to (i) waive what it characterized as “minor irregularities ” in Bosco’s bid, and (ii) recommend that the City Council award the Contract to Bosco at the December 10, 2025 City Council meeting.
The City’s October 13, 2025 letter made no mention of the October 7, 2025 letter from Caltrans’ Office of Civil Rights sent to all DBE Program Stakeholders (see attached Exhibit 1), which set forth changes, effective immediately, to implement the September 30, 2025 U.S. DOT’s
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October 20, 2025
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IFR, despite the fact that Caltrans’ letter ma de significant changes to the DBE program requirements included in the City’s bidding documents for the Project. Caltrans ’ Policy Update #27-07, issued in October 2025 provided guidance similar to its October 7, 2025 letter (see attached Exhibit 2),
Additionally, as of October 17, 2025, Caltrans’ website https://dot.ca.gov/programs/local- assistance/local-civil-compliance/disadvantaged-business-enterprise-dbe (see attached Exhibit 3) specifically provides the following guidance:
“• Contracts at Bid Evaluation and Selection
• Projects at the bid selection stage are the most difficult.
Re-advertisement is an option. Another option is selecting the lowest most qualified bidder without regard to DBE commitment. • Caltrans recommends all agencies consult with their legal team to determine how to proceed in these situations.” (Emphasis added).
3. California Competitive Bidding Rules Will be Violated if the City Changes the Bidding Rules after Bid Opening and Will Invalidate Any Contract So Awarded.
a. Unfair Advantage and Misuse of Public Funds.
The goals of competitive bidding are to : (i) guard against favoritism, improvidence, extravagance, fraud and corruption; (ii) prevent the waste of public funds; and (iii) obtain the best economic result for the public. Miller v. McKinnon, 20 Cal. 2d 83, 88 (1942); Graydon v. Pasadena Redevelopment Agency, (1980) 104 Cal.App.3d 631, cert. denied, 449 U.S. 983 (1981), reh’g denied, 449 U.S. 1104 (1981); Domar Elec., Inc. v. City of Los Angeles, 9 Cal. 4th 161, 173 (1994).
In consolidating the majority of competitive bidding statutes in the Public Contract Code (“P.C.C.”), the legislature identified the following additional objectives to clarify the law with respect to competitive bidding requirements in P.C.C. Section 100:
The Legislature finds and declares that placing all public contract law in one code will make that law clearer and easier to find. Further, it is the intent of the Legislature in enacting this code to achieve the following objectives:
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(a) To clarify the law with respect to competitive bidding requirements. (b) To ensure full compliance with competitive bidding statutes as a means of protecting the public from misuse of public funds.
(c) To provide all qualified bidders with a fair opportunity to enter the bidding process, thereby stimulating competition in a manner conducive to sound fiscal practices.
(d) To eliminate favoritism, fraud and corruption in the awarding of public contracts. (Emphasis added)
To implement the foregoing goals and objectives, the legislature mandated specific procedures for solicitation, submission, and evaluation of bids. For general law cities, including the City of Camarillo, competitive bidding is required for public works contracts over $5,000. Cal.
Pub. Cont. Code § 20162. Such contracts must be awarded to the lowest responsible bidder. Pub.
Cont. Code § 20162.
b. Bids Cannot Be Changed and the Basis for Contract Award Cannot be Changed after Bids Are Opened.
Once a bid is submitted, the bidder has made a binding offer for the contract work, which the City can accept upon bid opening. M.F. Kemper Constr. Co. v. City of Los Angeles (1951) 37 Cal. 2d 696; City of Susanville v. Lee C. Hess Co . (1955) 45 Cal. 2d 684, 694. The duty to sign the contract is purely ministerial, and the contract is formed when the award is made and cannot be impaired at the option of the public entity or the bidder. Transdyn/Cresci v. City and County of San Francisco (1999) 72 CA 4th 746.
Pursuant to P.C.C . Section 5010, et seq., a public agency cannot permit the bidder to increase its bid by the amount of the mistake, or any other amount, and award the contract on the basis of the revised amount once the bid deadline has passed. This is the case even if the “adjusted” bid proposal is lower than other bidders’ proposals and prohibits changes to a bid due to mistakes.
Greer v. Hitchcock (1969) 271 Cal.App.2d 334. Similarly, a bidder cannot decrease its bid price after the fact. See M.F. Kemper Constr. Co., 37 Cal. 2d 696. Once submitted, the bid price used to award the contract cannot be changed.
A bid fails to comply materially with the bid package if it gives the bidder a substantial economic advantage or benefit not enjoyed by other bidders or if the bidder could have withdrawn its bid without forfeiting its bid security. Menefee v. County of Fresno (1985) 163 Cal.App.3d 1175. A substantially conforming bid, although not strictly responsive, may be accepted if the variance cannot have affected the amount of the bid or given a bidder an advantage or benefit not
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allowed to other bidders. Universal By-Products, Inc. v. City of Modesto (1974) 43 Cal.App.3d 145.
Further, under California law all that is required is the theoretical possibility that a bidder will obtain an unfair advantage. It need not be shown that a bidder possessed any intention of seeking a competitive advantage for a public agency to be requir ed to reject such a bid as non - responsive. See Konica Bus. Machs. U.S.A., Inc. v. Regents of Univ. of Cal. (1988) 206 Cal.App.3d 449.
California courts have held that an awarding body cannot reject a bid on the basis of arbitrary or unwritten policies. Monterey Mechanical co. v. Sacramento Reg’l County Sanitation District (1996) 44 Cal.App.4th 1391. If the City proceeds with recommending contract award to Bosco, the City would be changing the rules for award after bids have been opened. Doing so would be patently unfair to Toro and other bidders.
c. Removing DBE Goals and Counting After Bid Submission Will Result in Violation of the Subletting and Subcontracting Fair Practices Act.
P.C.C. Sections 4100-4114 are devoted to addressing issues related to the listing of subcontractors and are designated as the “Subletting and Subcontracting Fair Practices Act” (more commonly referred to as the “Subcontractor Listing Law”). The provisions of the Subcontractor Listing Law affect the rights and obligations of public agencies and prime contractors during the bidding process, as well as during performance of the contract.
A primary focus of the bidder engaged in competitive bidding is the ability to propose the lowest price. Except for extraordinary circumstances, it is not likely that the bidder will perform all of the work of the contract. The bidder must solicit sub -bids from subcontractors to perform portions of the work. Assuming that the prime bidder submits the low bid proposal, the prime bidder may then attempt to increase the profit margin by “shopping” the sub -bids. Since the bid proposal price to the public ag ency is not subject to adjustment, every dollar “squeezed” by the prime bidder in shopping the sub-bids results in pure profit to the prime bidder to the detriment of the public. The Subcontractor Listing Law is intended to prevent such “bid shopping .” It is also intended to prevent subcontractors from peddling their bids after the bid deadline, in the hopes of undercutting the prices of listed subcontractors.
The potential evils attendant to bid shopping and bid peddling are addressed in the Subcontractor Listing Law. P.C.C. Section 4101 provides:
“[t]he Legislature finds that the practices of bid shopping and bid peddling in connection with the construction, alteration, and repair of public improvements
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often result in poor quality of material and workmanship to the detriment of the public, deprive the public of the full benefits of fair competition among prime contractors and subcontractors, and lead to insolvencies, loss of wages to employees, and other evils.”
If Bosco’s bid is accepted and DBE goals and participation are removed , Bosco will be engaging in bid shopping and peddling, which is expressly prohibited by California law. d. Changing the DBE Requirements After Bid Submission Violates California Competitive Bidding Rules , Which Would Result in a Void Contract Subject to a Taxpayer Challenge.
The penalties for ignoring or purposefully evading competitive bidding procedures can be severe. To guard against corruption and favoritism , as well as protect taxpayer funds from unauthorized or improper expenditures, courts have declared contracts void where there was a complete failure to follow competitive bidding requirements and the legal requirements for contracting with the agency were clear. A contractor is charged with knowledge of the limits of an agency’s contracting authority and, thus, may be precluded from recovering the cost of work performed in violation of competitive bidding rules or may be ordered by an individual with no authority to bind the agency in which case taxpayers may file suit to recover payment. See, e.g., Zottman v. San Francisco , 20 Cal. 96 (1862); Reams v. Cooley , 171 Cal. 150 (1915); Miller v.
McKinnon, 20 Cal. 2d 83 (1942); Lundeen Coatings Corp. v. Department of Water & Power, 232 Cal.App.3d 816 (1991).
4. Conclusion.
In closing, Toro submits that the only way to uphold the policies underlying California competitive bidding law is to reject all bids and rebid the Project, in whole or in part. Given that the contract award is not contemplated until December 2025, and the construction start date will not take place until at least March 1, 2026, the City will benefit from expedited rebidding and thereby eliminate the potential for a legal challenge for failing to award the contract in accordance with California competitive bidding law.
Should you have any questions please do not hesitate to contact us at our email addresses, [email protected] or [email protected] or by phone at (310) 552-3400.
Office of the City Clerk
City of Camarillo
October 20, 2025
3437271.2
Very truly yours,
Georgia Johnson
Barbara R. Gadbois
of GIBBS GIDEN LOCHER TURNER
SENET & WITTBRODT LLP
BRG:hs
Encls.: Exhibits 1- 3
cc:
Andrew Grubb, PE, Principal Civil Engineer, [email protected] Thang Tran, Senior Associate Engineer, [email protected] Rachel Richman, City Attorney, [email protected] Sean Castillo, President, Toro Enterprises, Inc., [email protected]
EXHIBIT 1
“Improving lives and communities through transportation.”
OFFICE OF CIVIL RIGHTS
1500 5th Street, MS–79 | SACRAMENTO, CA 95814
(916) 324-1700 | TTY 711
www.dot.ca.gov
October 7, 2025
To: All Disadvantaged Business Enterprise Program Stakeholders:
On September 30, 2025, the U.S. Department of Transportation (DOT) issued an Interim Final Rule (IFR) making significant changes to the Disadvantaged Business Enterprise (DBE) and Airport Concession DBE (ACDBE) Programs. The IFR was published in the Federal Register on October 3, 2025, and is effective immediately. Caltrans and all subrecipients of federal transportation funding subject to the DBE Program are required to comply.
While we continue to evaluate the new IFR, we want to share the information below to keep you apprised of this development and new requirements. We will share additional information when available.
However, as an interim action and to ensure compliance with federal direction, here are DBE program changes effective immediately:
Key Changes
• Elimination of Presumptions: Race-and gender-based presumptions of social and economic disadvantage are removed. All applicants must now demonstrate social and economic disadvantage through individualized evidence, including a personal narrative and financial documentation. • Reevaluation of All Firms: Every currently certified DBE/ACDBE will undergo reevaluation. Firms meeting the new standards will be recertified; those that do not will be decertified.
• Temporary Suspension of Goals and Counting: Until reevaluations are complete, Caltrans and all subrecipients must not:
o Set DBE/ACDBE contract goals.
o Count DBE/ACDBE participation toward overall program goals. • Existing Contracts: Contracts already awarded remain valid; however, DBE/ACDBE commitments and participation under those contracts cannot be DBE Program Stakeholders
October 7, 2025
“Improving lives and communities through transportation.” counted toward goal attainment during the reevaluation period. Primes may self-perform or subcontract work as necessary, without DBE credit, if a DBE is terminated. Those DBEs that are actual subcontractors (not just material suppliers), primes still need to follow subcontracting rules (i.e., termination, substitution, etc.) even if the DBE subcontractors are no longer “DBEs.” • Goal Setting: All DBE goal requirements are suspended effective October 3, 2025. Do not set DBE goals on contracts. Contracts currently advertised or pending award with DBE goals must have their DBE goals removed. Statewide DBE goal setting will resume once reevaluations of all DBEs are complete. • Reporting Requirements: DOT has eliminated the collection of race-and sex- specific ownership data; reporting will instead focus on certification status and individualized eligibility. We await DOT guidance on the collection of data for future reporting.
Next Steps
• Caltrans Staff: Will apply the new certification standards immediately and will work with the Unified Certification (UCP) Partners to reevaluate all certified firms. • CUCP Partners: Update the UCP Standard Operating Procedures, approve the new Personal Narrative requirement, begin applying the new certification standards immediately, and reevaluate all certified firms. • Prime Contractors: Do not submit utilization plans or commitments tied to DBE credit during this transition. Ensure solicitations to your subcontractors on advertised projects pending award are amended to reflect zero DBE goals until further notice.
• Certified DBEs: Be prepared to submit individualized documentation of disadvantage as part of the reevaluation process. Templates and technical assistance will be provided by your certifying agency, including Caltrans. • Local Agencies: Pause inclusion of DBE goals in all federally assisted solicitations.
Work with your Legal to implement addenda where solicitations are already advertised. Caltrans Civil Rights staff are available to provide technical assistance or suggest language.
Again, Caltrans will issue further detailed instructions, host training sessions, and provide outreach to ensure all partners understand and comply with the new requirements.
DBE Program Stakeholders
October 7, 2025
“Improving lives and communities through transportation.” We recognize the burden these immediate changes create for firms, contractors, and local agencies. Our Office of Civil Rights is committed to supporting you through this transition.
Please direct questions to 916-324-0990 or [email protected].
Thank you for your partnership.
Sincerely,
DAVID B. DELUZ, M.A., M.P.P.A.
Deputy Director
Office of Civil Rights , Civil Rights and DBE Liaison Officer
EXHIBIT 2
Office Bulletin | Division of Local Assistance
Policy Update
DIVISION OF LOCAL ASSISTANCE 1
CALIFORNIA DEPARTMENT OF TRANSPORTATION
#25-07: Suspension of Disadvantaged Business Enterprise (DBE) Program
Purpose
In response to the Disadvantaged Business Enterprise Program (DBE) Interim Final Rule (IFR) published on October 3, 2025, the Caltrans Division of Local Assistance is issuing this Office Bulletin.
The IFR, which addresses amendments to 49 CFR Parts 23 and 26 concerning the Airport Concessions DBE and DBE Program, was published in the Federal Register and became effective immediately upon posting on October 3, 2025.
The IFR is available at: Federal Register : Disadvantaged Business Enterprise Program and Disadvantaged Business Enterprise in Airport Concessions Program Implementation Modifications
Policy Update
Effective immediately, DBE Contract Goal Setting, Counting, along with DBE monitoring and compliance, is suspended.
During the suspension, there will be:
• No contract goals
• No Good Faith Effort Evaluation
• No counting of DBE participation
• No monitoring of DBE program compliance
• No DBE forms submission
Please contact your District Local Assistance Engineer or District DBE Coordinator for questions regarding your specific project in its current phase. For the current contact list visit:
https://dot.ca.gov/-/media/dot-media/programs/local-assistance/documents/risk-assessment/dlae- dbe-coordinators-current-list.pdf
This Office Bulletin will be updated as more information becomes available.
Issued October 2025 by the Office of Local Civil Compliance
EXHIBIT 3
Home Programs Local Assistance Local Civil Compliance
Disadvantaged Business Enterprise (DBE)
Disadvantaged Business Enterprise
(DBE)
In response to the Interim Final Rule (IFR) regarding 49 CFR Parts 23 and 26, the Disadvantaged Business Program (DBE) is suspended until Californiaʼs disadvantaged businesses can be recertified under the IFRʼs new DBE certification requirements. For more information, contact your District Local Assistance Engineer or DBE Coordinator .
During the temporary suspension, there will be:
Regarding Contracts:
No contract goals
No Good Faith Effort Documentation
No counting of DBE participation
No monitoring of DBE program compliance
No DBE forms submission
Executed Contracts signed on or before October 3:
Existing contracts remain valid but should be amended to remove the DBE contract language.
No compliance monitoring is required.
DBE commitments and participation under existing contracts cannot be counted toward goal attainment during suspension period.
Good faith effort documentation is no longer required for termination and replacement.
Contracts at Bid Solicitation and Procurement
Bid solicitation and procurement must not include a DBE goal, and contracts will not follow DBE program requirements. Subsequently, Good Faith Efforts are no longer required.
Currently advertised projects require an addendum removing the DBE goal and requirements from the bid package. The addendum may extend the bid opening period, if necessary, for bid adjustments.
Contracts at Bid Evaluation and Selection
Projects at the bid selection stage are the most difficult. Re- advertisement is an option. Another option is selecting the lowest most qualified bidder without regard to DBE commitment.
Caltrans recommends all agencies consult with their legal team to determine how to proceed in these situations.
Prevailing wage, certified payroll, or prompt payment,
termination/replacement continue as they are upheld by other subcontractor regulations.
About Caltrans Contact Us ADA Certification Request ADA Compliant Documents Settings Translate
Contact your District Local Assistance Engineer or District DBE Coordinator for specific questions regarding your project.
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