Commonwealth of Kentucky
Office of the Attorney General
Daniel Cameron
Attorney General
Capitol Building, Suite 118
700 Capital Avenue
Frankfort, Kentucky 40601
(502) 696-5300
Fax: (502) 564-2894
September 25, 2023
OAG 23-07
Subject:
1. Whether the Finance and Administration Cabinet (“FAC”) may
require the Department of Fish and Wildlife Resources
(“Department”) to provide multiple vendor quotes before the
Department may utilize the statewide master procurement
agreements.
2. Whether the Department’s contracts for architectural,
engineering, or engineering-related services count toward the
Department or FAC’s $300,000 price contract limit.
Requested by:
Rich Storm, Commissioner
Department of Fish and Wildlife Resources
Written by:
Aaron J. Silletto, Assistant Attorney General
Office of Civil and Environmental Law
Syllabus:
1. FAC may not require the Department to provide multiple
vendor quotes as a condition of using the statewide master
procurement agreements.
2. The Department has its own $300,000 price contract limit.Opinion of the Attorney General 23-07
September 25, 2023
Page 2
2
Opinion of the Attorney General
The Department’s two questions relate to its procurement authority and its
relationship with FAC.1 In 2022, the General Assembly granted greater independence
and procurement authority to the Department. See 2022 Senate Bill 217 (“SB 217”).2
The General Assembly clarified the extent of that authority earlier this year. See 2023
Senate Bill 241 or (“SB 241”).3 The language of SB 217 and SB 241, as well as the
legislature’s intent in passing them, are critical to the questions presented here.
I.
Statewide Master Procurement Agreements
FAC negotiates master agreements in order to provide certain goods and
services to all state agencies at a set price. See KRS 45A.045(3); KRS 45A.300. FAC
recently began requiring state agencies to obtain quotes from a minimum of three
approved vendors before FAC will permit an agency to purchase under a master
agreement.4 FAC has imposed this three-quote requirement on the Department.
With SB 217 and SB 241, the General Assembly empowered the Department
to “conduct all procurements necessary for the performance of its duties in accordance
with the procurement procedures outlined in KRS Chapter 45A, [KRS Chapter 150],
and the administrative regulations promulgated under [KRS Chapter 150].” KRS
150.0242(1). In fact, KRS 150.0242(1) now states that “the department shall not be
subject to any provision of KRS Chapter 45A that requires the approval of any
Finance and Administration Cabinet official for the [D]epartment to proceed with any
aspect of the procurement process.” Id. And KRS Chapter 45A now says that FAC
“shall not exclude the Department . . . from, or interfere with the [D]epartment’s
participation in contracts available to multiple state agencies for the procurement of
goods or services.” KRS 45A.300(7).
FAC’s three-quote requirement subjects one aspect of the Department’s
procurement process—i.e., the use of statewide master procurement agreements—to
FAC approval. For example, if the Department determines that it requires a specific
1
The history of the Department’s relationship with FAC, which led the General Assembly to grant
the Department greater procurement autonomy, is recounted in fuller detail in OAG 23-05.
2
2022 Ky. Acts ch. 197.
3
2023 Ky. Acts ch. 139.
4
A typical example of such a contract provision states, “It will be the responsibility of the agencies
utilizing this Master Agreement to obtain quotes from a minimum of three (3) awarded dealers. The
agencies [sic] approved quote and approved SPR1 shall be submitted to OPS.Reporting@ky.gov. The
Commonwealth Buyer or OPS Representative will amend the Master Agreement to add a Commodity
Line for the model/quantity based upon the approved quote/SPR1. Once the contract modification is
completed the Commonwealth Buyer or OPS Representative will identify the appropriate Commodity
Line for the agency to issue the Delivery Order (DO).” Master Agmt. No. MA 758 2300000795, Section
III.Opinion of the Attorney General 23-07
September 25, 2023
Page 3
3
make and model of pickup truck, FAC will not allow the Department to purchase that
truck under a master agreement unless the Department first provides at least three
bids. This three-quote requirement “interfere[s]” with the Department’s use or
participation in “contracts available to multiple state agencies for the procurement of
goods or services.” KRS 45A.300(7). It also conflicts with KRS 150.0242(1), which
affirms that FAC approval is not required for the Department “to proceed with any
aspect of the procurement process.”
Perhaps the three-quote requirement serves as a gatekeeping function for the
use of master agreements. But no matter. In SB 217 and SB 241, the General
Assembly deprived FAC of this sort of function when it comes to the Department’s
use of those agreements. In short, the Cabinet may not do indirectly what the law
specifically prohibits the Cabinet from doing. See also KRS 45A.060 (stating that the
Cabinet Secretary must “maintain a close and cooperative relationship with” the
Department).
II.
Architectural, Engineering, and Engineering-Related Services
The Department wishes to negotiate price contracts for architectural,
engineering,
and
engineering-related
services
under
KRS
45A.837.
KRS
45A.837(2)(c)5 provides:
The commissioner of the Department for Facilities Management, the
commissioner of the Department of Fish and Wildlife Resources, or the
commissioner of the Department of Highways may select firms to
perform work under price contract for small projects for which the
architectural, engineering, or engineering-related fees do not exceed one
hundred fifty thousand dollars ($150,000). However, no firm that has
received more than three hundred thousand dollars ($300,000) in price
contract fees in any one (1) fiscal year in the contract discipline being
awarded shall be selected to work under a price contract unless the
secretary of the Finance and Administration Cabinet, the secretary of
the Transportation Cabinet, or the commissioner of the Department of
Fish and Wildlife Resources makes a written determination that the
selection is in the best interest of the Commonwealth and the
determination is confirmed by the appropriate cabinet’s or department’s
selection committee established by KRS 45A.810.
5
KRS 45A.837(2)(c) was amended by two different bills enacted in 2023. SB 241 gave the
Department the same contracting authority as the Department of Highways, and House Bill 360
doubled the dollar amounts of contracting authority provided to the three agencies covered by the
statute.Opinion of the Attorney General 23-07
September 25, 2023
Page 4
4
Under this statute, three departments of state government may select firms to
perform construction or engineering work under a price contract—the Department of
Fish and Wildlife Resources; the Department for Facilities Management,6 an agency
within FAC; and the Department of Highways, an agency within the Transportation
Cabinet. Each of the three departments is authorized to use such contracts “for small
projects for which the architectural, engineering, or engineering-related fees do not
exceed one hundred fifty thousand dollars ($150,000).”
The question then becomes how to construe the statutory requirement that “no
firm that has received more than three hundred thousand dollars ($300,000) in price
contract fees in any one (1) fiscal year in the contract discipline being awarded shall
be selected to work under a price contract.” Specifically, the Department asks
whether it may award price contracts up to $300,000 per firm per fiscal year without
the Commissioner making the required determination, or instead, whether its price
contracts are aggregated with FAC’s contracts for purposes of the statutory cap.
“When dealing with a question of statutory construction, we begin with the
plain text.” Commonwealth v. Shirley, 653 S.W.3d 571, 577 (Ky. 2022). “All statutes
of this state shall be liberally construed with a view to promote their objects and carry
out the intent of the legislature.” KRS 446.080(1). “The cardinal rule of statutory
construction is that the intention of the legislature should be ascertained and given
effect.” Jefferson Cnty. Bd. of Educ. v. Fell, 391 S.W.3d 713, 718 (Ky. 2012) (quoting
MPM Financial Group, Inc. v. Morton, 289 S.W.3d 193, 197 (Ky. 2009)). Legislative
intent is derived “from the language the General Assembly chose, either as defined
by the General Assembly or as generally understood in the context of the matter
under consideration.” Commonwealth v. Wright, 415 S.W.3d 606, 609 (Ky. 2013).
When a statute is plain and unambiguous on its face, we are not at liberty to construe
the language otherwise. Whittaker v. McClure, 891 S.W.2d 80, 83 (Ky. 1995). “The
statute must be read as a whole and in context with other parts of the law. All parts
of the statute must be given equal effect so that no part of the statute will become
meaningless or ineffectual.” Lewis v. Jackson Energy Co-op. Corp., 189 S.W.3d 87, 92
(Ky. 2005). It must be presumed that the General Assembly did not intend an absurd
result. Commonwealth, Cent. State Hosp. v. Gray, 880 S.W.2d 557, 559 (Ky. 1994).
The $300,000 cap on price contracts appears ambiguous. KRS 45A.837 does
not state expressly whether the cap applies to all price contracts across all three
departments, or if each of the three departments has a separate $300,000 cap. Given
the lack of clarity in the text, this Office turns to legislative intent. The intent of the
6
KRS 45A.837(2)(c) refers to the “Department for Facilities Management.” However, a 2005 law
changed the name of the Department for Facilities Management to the Department for Facilities and
Support Services. See 2005 Ky. Acts ch. 85 §§ 1, 5 (amending KRS 12.020 and KRS 42.014). The pre-
2005 name is used here because that is how KRS 45A.837 refers to that department.Opinion of the Attorney General 23-07
September 25, 2023
Page 5
5
General Assembly in enacting KRS 45A.837 was to provide a more expeditious route
to awarding architectural, engineering, and engineering-related services contracts for
“small projects” than would otherwise be the case under KRS 45A.800 to 45A.835.
See KRS 45A.810(2) (exempting contracts under KRS 45A.837 from certain
requirements regarding architectural services selection committees and engineering
and engineering-related services selection committees); KRS 45A.825(12) (exempting
contracts under KRS 45A.837 from contractor prequalification requirements). And
SB 241 amended KRS 45A.800 to 45A.838 to give the Department greater autonomy
from FAC when contracting for architectural, engineering, and engineering-related
services, just as the Transportation Cabinet already had. See SB 241 §§ 5–11
(amending KRS 45A.800 to 45A.838).
Thus, the legislature’s intent is clear: to remove the Department from FAC’s
purview and allow the Department to make its own procurement decisions. If the
Department for Facilities Management and the Department of Highways could, by
each awarding $150,000 price contracts to the same firm, exhaust the $300,000 cap,
it would require the Department of Fish and Wildlife Resources to engage in the
slightly more cumbersome process of submitting its contract with that firm to the
Department’s engineering and engineering-related services selection committee. See
KRS 45A.837(2)(c) (requiring contracts above the $300,000 cap to be approved by the
Commissioner’s determination that the contract is in the Commonwealth’s best
interest “and the determination is confirmed by the . . . department’s selection
committee established by KRS 45A.810”). Such a construction of KRS 45A.837 would
not further the General Assembly’s manifest purpose.
The better construction of KRS 45A.837, which furthers the legislative intent,
is that the three departments each have a $300,000 cap. In other words, there is not
a single cap per contractor per fiscal year. Rather, each department may award price
contracts for small projects totaling $300,000 per contractor per fiscal year, without
the Commissioner of the Department or the Secretary of the Finance and
Administration Cabinet or the Transportation Cabinet having to make any additional
determination and submit the contract to a selection committee.
Daniel Cameron
Attorney General
Aaron J. Silletto
Assistant Attorney General