Request By:
Mr. Roger Wm. Perry
Marshall County Attorney
P.O. Box 352
Benton, Kentucky
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
Around four years ago your fiscal court advertised for bids on the supplying of all petroleum products to your county road department. A low bid was submitted based on a formula, a percentage of the prevailing general price. The fiscal court has not since relet bids on petroleum products. The fiscal court believes that if they relet bids, the county will not be able to obtain as low a price as you now have. The current contract permits the fiscal court to cancel out anytime. Your question: Must fiscal court readvertise for bids on petroleum products?
KRS 424.260 requires advertisement for bids where the required supplies exceed $2,500. The statute does not expressly deal with just how long an awarded bid contract can be applied.
The statute requiring competitive bidding is mandatory. Where applicable it must be observed in good faith by the local governmental authorities [members of fiscal court, here].
Board of Education of Floyd County v. Hall, Ky., 353 S.W.2d 194 (1962) 195. The Floyd County case holds that the legislative body responsible for letting bids cannot circumvent the statute by buying needed supplies in "dribbles and dabs." Thus the fiscal court cannot divide the purchases so as to get each purchase under the required level for bidding. But the case sets no precedent in the area of the longevity of a particular awarded contract under public bidding.
Competitive bidding statutes are primarily to "protect the public against waste of public funds and with sole reference to the public good . . ." 72 C.J.S.Supp. § 9, p. 184. In practical terms this means competitive bidding to get the lowest cost. The court, in
R.G. Wilmott Coal Co. v. State Purchasing Commission, 246 Ky. 115, 54 S.W.2d 634 (1932) 635, wrote that the underlying purpose of such bidding statutes is to encourage competitive bidding to the end that supplies for government may be secured at the most favorable prices. See also 43 Am.Jur.2d, Public Works and Contracts (1st ed.) § 26, p. 767, stressing lowest cost to taxpayers.
Under the general statute, KRS 424.260, the fiscal court has discretion in applying the statute time-wise [duration of awarded bid contract], however, it cannot, in considering the purpose of the bidding statute, act arbitrarily, capriciously or unreasonably. 72 C.J.S. Supp., Public Contracts, § 6, p. 180. Thus it would be up to the courts to determine, if the fiscal court continues under the present petroleum contract, whether or not they are acting arbitrarily or capriciously in failing to relet the bids on petroleum products.
We are of the opinion, however, that a readvertising for such bids on an annual basis would be in the public interest. How do you know whether you could get a lower price right now except through advertisement for bids?
Next you ask, is there a requirement that fiscal court accept the maintenance responsibility of roads in the county. "County roads" are public roads which have been accepted by the fiscal court as the part of the county road system, generally. See KRS 178.010(1)(b). Generally the acceptance of a road for county maintenance, as a part of the county road system, is left to the sound discretion of the fiscal court. See KRS 178.115. However, the action of a fiscal court, in exercising such discretion, could be reviewed in a circuit court action under an alleged arbitrary or capricious exercise of the discretion. See § 2, Kentucky Constitution. The fiscal court, under KRS 178.115, is left to its sound discretion in determining whether or not the establishing of a county road is deemed to be in the best interest of the county. Where it is so deemed, the fiscal court must declare it a public necessity as required by the statute.