Request By:
Ms. Barbara M. Williams
State Librarian
Department of Library and Archives
P.O. Box 537
Frankfort, Kentucky 40601
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: James S. Goldberg, Assistant Attorney General
This letter is in response to your correspondence of May 27, 1977, in which you state that the Kenton County Public Library District received bids for construction of a branch library at Erlanger, Kentucky. Specifically, bids were requested for general construction with six additive alternates; plumbing with no alternates; heating, ventilation and air conditioning with one additive alternate; and electric with three additive alternates.
The low qualified bidders on the first three bids (general construction; plumbing; and heating, ventilation and air conditioning) were clear cut with any combination of alternates. However, on the electric bid, by accepting all the alternates or rejecting certain ones and accepting others, the second low bidder becomes lower in dollars bid. All alternates are not to be accepted as they are associated with ones rejected under the general construction or heating, ventilation and air conditioning bids.
You also indicate that in approving bid awards, you have been following two procedures:
(1) Award on base bids only, then accept any alternates (of that particular bidder) desired and within the budget.
(2) Award on base bid plus alternates with the alternates listed and accepted in "priority order." Notice must be made in both the "invitation" and "bid documents" that this procedure is to be followed.
Therefore, you have asked this Office to ascertain the proper bidding procedure to follow on this and future construction projects.
We first observe that under KRS 424.260, it is stated:
"Except where a statute specifically fixes a larger sum as the minimum for a requirement of advertisement for bids, no city, county or district, or board or commission of a city or county, may make a contract, lease, or other agreement for materials, supplies or equipment, or for contractual services other than professional, involving an expenditure of more than two thousand five hundred dollars ($2,500) without first making newspaper advertisement for bids. Provided, however, that this requirement shall not apply in an emergency if the chief executive officer of such city, county or district has duly certified that an emergency exists, and has filed a copy of such certificate with the chief financial officer of such city, county, or district."
Pursuant to this statute, a newspaper advertisement or invitation to bid was published, stating that separate sealed bids for general construction; plumbing; heating, ventilating and air conditioning; electric; or any combination of these would be received in triplicate by the Kenton County Public Library District Board of Trustees in the Kenton County Public Library, Fifth and Scott Streets, Covington, Kentucky until 2:00 P.M., E.D.S.T. on Tuesday, May 17, 1977. The invitation also stated when and where copies of the bidding documents could be obtained by prospective bidders. The bidding documents are defined to include "the Advertisement or Invitation to Bid, Instructions to Bidders, the bid form, other sample bidding and contract forms and the proposed Contract Documents including any Addenda issued prior to receipt of bids. " Instructions To Bidders, Article 1, Section 1.1
The bidding documents also provide that "Each Bidder by making his bid represents that: He has read and understands the Bidding Documents and his Bid is made in accordance therewith." Instructions To Bidders, Article 2, Section 2.1. See also electrical bid form in the bidding documents. A "Base Bid is the sum stated in the Bid for which the Bidder offers to perform the Work described as the base, to which Work may be added or deducted for sums stated in Alternate Bids. An Alternate Bid (or Alternate) is an amount stated in the Bid to be added to or deducted from the amount of the Base Bid if the corresponding change in project scope or materials or methods of construction described in the Bidding Documents is accepted." Instructions To Bidders, Article 1, Sections 1.5 and 1.6.
Finally, as regarded the awarding or acceptance of bids, the bidding documents state:
"It is the intent of the Owner, if he accepts any Alternates, to accept them in the order in which they are listed in the bid form, but the Owner shall have the right to accept alternates in any order or combination and to determine the low Bidder on the basis of the sum of the Base Bid and the Alternates accepted." Instructions To Bidders, Article 5, Section 5.3.2. (Emphasis added)
In analyzing the two procedures your department has followed in awarding bids, it is our considered opinion that to award these contracts on the basis of the base bids only and then automatically accept the alternates desired at the prices submitted by the chosen low base bidder would violate the provisions of KRS 424.260. In essence, to follow this specific bid awards procedure is to fail to award these alternates on the basis of the bids actually submitted on them, as KRS 424.260 requires.
It is the position of this Office that the more appropriate procedure to follow would be to award the specific contracts on the basis of the sum of the base bid plus the desired alternates. Indeed, all potential bidders are put on notice that the owner has the right "to determine the low bidder on the basis of the sum of the base bid and the alternates accepted." Instructions To Bidders, Article 5, Section 5.3.2. Also, although the owner may accept the desired alternates in "priority order," he also has the right "to accept alternates in any order or combination." Instructions To Bidders, Article 5, Section 5.3.2.
Additionally, in view of the fact that the bidding documents put all potential bidders on notice that their bids must be made and submitted in accordance with the provisions of those documents, we third it is legally sufficient to only publish the notice of the specific procedure to be followed in awarding bids in the bidding documents. However, as a precautionary measure, we would suggest that this notice also be put in the advertisement or invitation to bid.
Finally, we note that in the advertisement or invitation to bid, it is stated that the "[c]ontract will be awarded on the basis of the lowest and/or best bid as determined by the owner." This statement is in accordance with the language of 725 KAR 2:010, Section 7 which, in pertinent part, provides:
"(6) The contract will be awarded to the 'lowest and best' bidder, as mutually determined by the library board, the architect, and the Construction Officer of the Department of Library and Archives.
(7) In case of serious disagreement as to which bid is 'lowest and best,' the final decision is to be made by the State Librarian."
In awarding a contract to the lowest and best bidder, not only is price to be considered, but the library board, the architect and the construction officer may, in their discretion, also take into consideration such other things as the terms of each proposed bid, the needs of the board and the responsibility and reliability of each individual bidder. See
Trapp v. City of Newport, 115 Ky. 840, 74 S.W. 1109 (1903) and
Louisville Steam Forge Co. v. Gast, Ky., 115 S.W. 761 (1909).
We hope that this opinion will satisfactorily answer all your questions. If we can be of any further service, please do not hesitate to call upon us.