Request By:
Mr. Gary C. Johnson
County Attorney
Pike County Courthouse
Pikeville, Kentucky 41501
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Robert L. Chenoweth, Assistant Deputy Attorney General and Chief Counsel
You have asked the Office of the Attorney General to consider the law applicable to a matter involving the procurement of bridge materials, namely, bridge lumber and posts, by the Pike County Fiscal Court. You stated the Fiscal Court has continued to operate under the local Model Procurement Code even though remaining under the Code is now optional. KRS 45A.343. See also OAG 80-279, copy attached.
As a brief background to your concerns, you informed us that the Pike County Fiscal Court in February, 1981, advertised for sealed bids "for treated bridge lumber" which bids were to be opened February 17, 1981, at 2:00 p.m. This information is contained in the "Advertisement for Bid" document signed by former Pike County Judge/Executive Wayne T. Rutherford. You also provided us with a copy of the "Invitation to Bid" form regarding this matter which is indicated to be Invitation No. 34 and dated February 7, 1981. Attached to the Invitation to Bid form was a list of "Special Conditions." Item No. 10 of these "Special Conditions" reads:
"10. Bidder must bid to the exact specifications set forth by the County, failure to do so will result in the bid being labeled nonresponsive. " (Underscoring in original.)
Also of importance, we believe, which will be noted below is Item No. 4 of these special conditions which reads:
"4. This Contract shall be for the period beginning March 1, 1981, up to and including June 30, 1981."
It is our understanding the specification sheet for treated bridge lumber and posts which you provided a copy of was also a part of the invitation to bid package.
You have further brought to our attention that only one bid was received by the Fiscal Court regarding this matter. In view of the fact this sole bid was not in full compliance with the bid specifications, this bid was rejected as being "nonresponsive. " See Item No. 10 noted above from the special conditions placed upon the invitation to bid and also the definition of a "responsive bidder" at KRS 45A.345(18) which provides that such is a "person who has submitted a bid under KRS 45A.365 which conforms in all material respects to the invitation for bid. . . ." Following this rejection, the Pike County Fiscal Court entered an Order dated March 12, 1981, which reads as follows:
"The Pike County Fiscal Court hereby authorizes that the county be allowed to purchase treated bridge lumber by a non-competitive negotiations based upon the fact that no bids were received pursuant to the county's advertisement for bids as to treated bridge lumber possibly due to the limited number of suppliers. Therefore, the purchase of treated bridge lumber shall be done by non-competitive negotiations. "
On September 1, 1981, the Fiscal Court, by motion, agreed to advertise for bids for a bridge, made of either pre-stressed concrete or wood, to be constructed on Road Fork of Island Creek, and on November 7, November 11 and November 14, 1981, an invitation to bid was advertised for pre-stressed concrete bridge materials, with the bids to be opened on November 20, 1981. However, on November 17, 1981, Mr. Wayne T. Rutherford, then Pike County Judge-Executive, without action on the part of the Fiscal Court, requested a purchase order for a twenty-two (22) foot wooden bridge to be located on the site at the Road Ford of Island Creek: On this same day a purchase order was issued to Timber Bridge of Kentucky for a $22,000 bridge to be located at the Road Fork of Island Creek. The purchase order, which was issued three days prior to the opening of the competitive sealed bids for the concrete bridge, stated that it was issued "per Fiscal Court Order of September 1, 1981."
Based upon this fact situation, you request our opinion as to whether the Pike County Fiscal Court has a legal obligation to Timber Bridge of Kentucky for $22,000 in connection with said purchase order. The first point to be considered is that relating to the March 12, 1981, Fiscal Court Order directing that the "purchase of treated bridge lumber shall be done by non-competitive negotiations. " KRS 45A.380 governs non-competitive negotiation. The availability of this mode of procurement is limited by the specific language of this statute. Such non-competitive negotiation may be used "only when a written determination is made that competition is not feasible . . ." and at least one or more of the conditions enumerated in the section exists. From the documents we have been provided, we are unconvinced a written determination was made that competition was not feasible or that any one of the other conditions described in KRS 45A.380 was prevalent. There is nothing to indicate an emergency existed or that there is only a single source for bridge lumber and posts. None of the other conditions set out in KRS 45A.380 subsections (1) through (11) would seem to be even remotely applicable. Thus, in view of the requirement set out in KRS 45A.380, it does not appear the situation relative to the bridge lumber and posts was subject to being handled by non-competitive negotiation.
Even aside from the above, we believe there are further reasons that support a conclusion that a procurement of the $22,000 wooden bridge now is impermissible. We point out again that in accordance with the special conditions attached to the invitation to bid for bridge lumber and posts, any resulting contract was to be "for the period beginning March 1, 1981, up to and including June 30, 1981." See Item No. 4, supra. We do not see how, even pursuant to valid non-competitive negotiation action, procurement of these types of materials can occur past the June 30, 1981, date originally established. This is to say nothing of the fact that new fiscal year money is now involved, as we understand it, not monies which were obligated before the end of June, 1981.
Also, we note that the "Request for Purchase Order" form for the $22,000 worth of bridge lumber indicates it is per Fiscal Court Order dated September 1, 1981. However, as pointed out above, the advertisement for bids pursuant to the motion passed at the September 1, 1981, meeting of the Fiscal Court is for "pre-stressed concrete bridges. " The $22,000 worth of bridge lumber cannot be responsive to this advertisement. (Indeed, we understand that it is not being argued that this bridge lumber was purchased pursuant to the September 1, 1981, motion.)
Therefore, based upon the above fact situation, it is our belief the Pike County Fiscal Court is not in a position to legally procure the $22,000 worth of bridge lumber based upon their actions to date.
We do wish to acknowledge the predicament a business can get itself into in dealing with a public agency. The Court of Appeals considered this matter in
Hacker Bros. Const. v. Bd. of Ed. of Whitley, Ky.App., 590 S.W.2d 897 (1979). The Court stated at page 899 that, "A party deals with a public agency at its peril if it contracts with one and fails to inquire into the power of the agency to execute it." The Court determine" that when a government agency fails to follow the required law, any resulting contract is unenforceable. As unfair as it may seem to the bridge lumber supplier, it appears to us the law in the Hacker case fits the facts you have described to us.
If you have further questions concerning this matter, please contact us.