Request By:
Honorable Philip P. Ardery
Attorney at Law
Sixteenth Floor, Citizens Plaza
Louisville, Kentucky 40202
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Walter C. Herdman, Assistant Deputy Attorney General
This is in answer to your letter of April 15 in which you relate that the city of Vanceburg owns an electric utility and has been issued a license by the United States Federal Power Commission to construct, operate, and maintain a hydroelectric plant on the Ohio River at the government's existing Greenup Locks and Dam. You further relate that the city is hoping to open bids for construction on May 1 and needs an opinion as to whether the bid specifications meet legal standards. With respect to your question, you relate the following:
". . . The basic legal question has to do with whether it is permissible under Kentucky bidding statutes applicable to the City of Vanceburg to accept alternate bids which may be submitted in response to the request for bids in specifications given to bidders on the Vanceburg projects.
"The specifications given to bidders by the Vanceburg Utility Commission are somewhat detailed but invite bids which specify alternative methods of construction and equipment. The specifications request bids not only on the construction work but also on the engineering work in designing the projects, both of these to be done by the same contractor. Although the specifications ask for alternate bids on the work, the bids must include bulb type turbines as the basic units."
Our response to your question as to whether or not the city can invite bids which specify alternate methods of construction and equipment would be in the affirmative. Referring initially to McQuillin, Mun. Corp., Vol. 10, § 29.55, we quote the following:
"Unless it is otherwise provided in the laws applicable, an advertisement may permit or require the submission of bids on alternative kinds or qualities of work or materials, in appropriate circumstances. The fact that the authorities specify different kinds of material -- putting the materials, in a sense, in competition with each other -- does not constitute hindrance to completion, even though the authorities cannot decide which material to use until after all the bids are presented. . . ."
As you know, the city of Vanceburg must seek bids for any material, supplies, equipment or contractional services other than professional where the expenditure involves more than $2,500 pursuant to KRS 424.260. There is nothing under this statute that prohibits a city from requiring and accepting alternate bids. As a matter of fact, there are a number of Kentucky cases recognizing the principle of bidding in the alternate which have been cited in McQuillin. See Trapp v. Newport, 115 Ky. 840, 74 S.W. 1109 (1903); and Campbell v. Southern Bitulithic Co., 32 KLR 799, 106 S.W. 1189 (1908).
It should also be noted that the courts have declared that the legislative body is vested with a large measure of discretion in accepting a bid and, under ordinary circumstances, such discretion will not be controlled by the courts as it is presumed that the legislative body will act in the discharge of matters under its care in such a manner as to best conserve the interest of the city or county, as the case may be. See Grover v. City or Irvine, 222 Ky. 366, 300 S.W. 904 (1927); Keith v. Johnson, 109 Ky. 421, 59 S.W. 487 (1900); Fosson v. Fiscal Court of Body County, Ky., 369 S.W.2d 108 (1963); and A. & W. Equipment Company v. Carroll, Ky., 377 S.W.2d 895 (1964).
Particularly, after referring to the detailed letter you attached from the Superintendent of Utilities of the city of Vanceburg outlining the complicated problem faced by the city in acquiring the best type of equipment to produce power at the lowest cost to the city and in view of the law cited above, we are of the opinion that the city may, in its legislative discretion, request alternate bids in its specifications and accept an alternate bid that it believes will produce power at the lowest cost to the city.