Request By:
Mr. Larry J. Crigler
Boone County Attorney
2995 Washington Street
P.O. Box 114
Burlington, Kentucky 41005
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
You have read OAG 83-125 relative to county roads. However, you have a question arising out of your reading of that opinion. Your letter reads in part:
"When a county desires, through action of its Fiscal Court, to reconstruct and/or re-pave existing separate county roads during the course of a fiscal year and they view each of the county roads as a separate road reconstruction or paving project and none of said roads or paving projects in and of themselves would exceed $7,500.00 and where one contractor may do the work for the reconstruction or paving of more than one road and the cost of reconstruction or paving on more than one road or project would exceed more than $7,500.00 is it necessary for the county to go to bidding for the reconstruction or paving of said roadways? Since each road is itself a separate road and separate project by the county may the county reconstruct or re-pave said roadway without going to bid if said roadway or project reconstruction work stays under $7,500.00 if those multiple projects may be done by the same contractor. "
We assume from your letter that your refer to the reconstructing or re-paving of two or more county road segments which are physically separate from each other and thus do not connect with each other in any way. We also assume from your letter that none of the separate road segment projects would exceed $7,500 in cost. Further, we assume that one contractor may do the work on two or more of those projects, the cost of two or more exceeding $7,500.00.
Your question, under those assumed facts, is this: "Is it necessary for the county to go to bidding for the reconstruction or re-paving of said roadways? "
Miss Elizabeth Blincoe, Assistant County Attorney of your office, indicated to us that the fiscal court of your county has adopted certain provisions of the Model Procurement Code, i.e., KRS 45A.345 through 45A.460. See KRS 45A.343.
Pursuant to KRS 45A.385, the fiscal court may use small purchase procedures for any contract for which a determination is made that the aggregate amount of the contract does not exceed five thousand dollars ($5,000), provided such small purchase procedures are in writing and available to the public. This would in effect permit county contracts without bidding where the total contract amount does not exceed $5,000.00.
If your county has not adopted the Model Procurement Code, then KRS 424.260 would govern. That statute requires formal bidding by advertising where the total expenditure exceeds seven thousand five hundred dollars ($7,500.00).
The single fact that one contractor may agree to do all the work on all of the road segments is not dispositive of the question, standing alone. The central question is whether or not the fiscal court can so construe each road project to be a separate and independent project so as to permit the circumvention of the applicable bidding law. This is true, since the bidding requirement hinges on whether the contract amount exceeds $7,500.00, as relates to KRS 424.260, or exceeds $5,000.00, as relates to the Model Procurement Code.
Yours is a crucial question, since Judge Palmore, in Board of Education of Floyd County v. Hall, Ky., 353 S.W.2d 194 (1962), pointed out that "A statutory requirement of competitive bidding in the letting of public contracts is mandatory, and nonobservance renders the contract void." The court in that case went on to say that acceptance of benefits under a public contract that is void for failure to advertise does not effect a ratification nor does acceptance of benefits raise an implied contract so as to permit recovery on a quantum meuit basis.
The court, in Board of Education of Floyd County v. Hall, at page 196, wrote this:
"Public contracts must be reasonably adapted to the customs and channels of trade, and reason would not demand, nor good faitn normally permit, that toilet bowls and pick handles be lumped with paint and brushes under the same procurement contract."
Ordinarily a local government cannot divide the public work to be done and let it under several contracts, "the amount for each falling below the amount required for competitive bidding. " McQuillan, Municipal Corporations, § 29.33 (Vol. 10, p. 318). But the authority (McQuillan) goes on to state: "However, legally separable and factually separate transactions, each of which is below the amount required for competitive bidding, but in the aggregate exceeding such amount, do not require such bidding merely because they were ratified by a single act." The case of Board of Education of Floyd County v. Hall, above, is cited in support of that premise.
CONCLUSIONS
(1) Assuming that the fiscal court determines, upon checking with the trade (road contractors) , that the reconstructing or paving of such county road segments could involve unified specifications and work performance of such nature that bids on the total number of projects as a total package could be obtained, we suggest that such total work be let under advertisement for bids, pursuant to KRS 424.260 or KRS Chapter 45A, whichever is applicable to your county.
(2) If the fiscal court determines upon investigation that lump sum bids upon the total projects cannot be obtained from the road construction trade, then it has a basis for reasoning that the various road segments will have to be treated legally and factually separate. In such case, bidding would be necessary for any of the projects if they exceed for a single project the sum of $5,000 (if the Model Procurement Code applies in your county) or exceeds $7,500 (if KRS 424.260 applies in your county).