Request By:
Mr. Richard D. Cole
Commissioner
Department of Local Government
Capital Plaza Tower
Frankfort, Kentucky 40601
Opinion
Opinion By: David L. Armstrong, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
In September, 1980, the Commonwealth of Kentucky approved and paid a $16,000 direct grant (Area Development Funds) to Estill County for construction of two additional ambulance bays onto its existing facility.
Your letter reads in part:
"Estill County did not advertise for bids. Much work on the facility was completed during November and December, 1980, and in January, 1981. Other construction took place periodically over calendar year 1981. The project seems to have been completed in December, 1981.
"It appears, based on invoices and a Resolution adopted in November, 1983, Estill County served as its own prime contractor, but employed additional labor and purchased supplies and materials throughout the construction period from a variety of sources. Concrete, block and cement were purchased from at least two sources at separate times. The same was true of lumber. Roofing, flooring and doors were purchased from still other suppliers. Overall materials were purchased from at least nine vendors and outside labor came from five businesses. There is little, if any, distinction between the types of vendors you would normally expect to see, i.e., electricians, plumbers, and carpenters."
Your specific questions were stated as follows:
"This Department requests your opinion concerning whether or not Estill County complied with Kentucky Revised Statutes, Chapter 424.260 and Chapter 42.355(4), relating to newspaper advertisement for bids in construction of ambulance facilities financed with Area Development Funds. Further, we ask for your opinion on the Commonwealth's recourse in light of 200 Kentucky Administrative Regulations 9:010, Section 5 (2), if in fact you determine Estill County has not complied with statutes."
We assume from your letter that Estill County is under KRS 424.260 and has not adopted the Model Procurement Code. See KRS 45A.343. Under these assumptions, KRS 424.260 provides that for contractual services, other than professional, involving an expenditure of more than seven thousand five hundred dollars ($7,500), the county must first make newspaper advertisement for bids.
Although the county served as its own prime contractor, the fiscal court employed labor (in addition to regular county employee labor) and purchased supplies and materials throughout the construction period from a variety of outside sources. This included purchases of concrete, block and cement, and lumber, roofing, flooring and doors.
There is one central exception to KRS 424.260. It is an emergency duly certified by the county judge executive, as directed by that statute. We are not aware of any such emergency procedure taken in this situation. You indicated that the total money expended by the fiscal court on the project was $17,819.41.
A resolution of the Estill Fiscal Court of November 21, 1983, indicates that the subcontract on the construction costs were kept at a level not to exceed five thousand dollars ($5,000). However, the resolution indicates that the construction was maintained in phases to keep the construction costs under five thousand dollars ($5,000).
In
Board of Education of Floyd County v. Hall, Ky., 353 S.W.2d 194 (1962), the court made it clear that a unit of government, in connection with the demands of a bidding statute, cannot divide the work and let it under several contracts so as to circumvent the bidding requirement. The court observed in that case that the merchandise was bought in "dribbles and dabs." Thus where the transactions are not legally and factually severable, they cannot be manipulated to circumvent the declared bidding policy of the statute.
Under the facts given, it is our view that the determination of whether or not the fiscal court's phasing the construction work was legal under KRS 424.260 would be for the courts. This office is not organized to make such precise determinations.
In addition, you ask whether or not the fiscal court complied with KRS 42.355(4). Under that subsection, when a direct grant in aid has been made to a beneficiary agency, all contracts awarded for the purchase of materials, supplies, equipment or services, except professional or technical services, required for the construction of the project shall be awarded to the lowest and best bidder in the discretion of the beneficiary agency after public advertisement as required by KRS Chapter 424 or other applicable law.
It is our opinion that KRS 42.355(4), in mentioning the bidding law of KRS Chapter 424, specifically adopts KRS 424.260 to the extent that such latter statute requires formal bidding. Since we are unable to determine, as pointed out above, whether the fiscal court validly omitted formally advertising for bids, we are unable to answer the implications of the interlocking provisions of KRS 42.355(4).
Under the above analysis, we are also unable to come to any conclusion as to whether the fiscal court should repay to the Area Development Fund the granted funds expended by the county in alleged violation of KRS 42.355(4). See 200 KAR 9:010, Section 5(2).
The case of