Request By:
Mr. John R. Cox
Rowan County Attorney
P.O. Box 9
Morehead, Kentucky 40351
Opinion
Opinion By: Steven L. Beshear, Attorney General; BY: Charles W. Runyan, Assistant Deputy Attorney General
The Rowan Fiscal Court has requested that you seek our opinion on questions relating to the renovation of a building to be used as the Rowan County Court Facility. The project cost will run in excess of $1,000,000.00, funded out of some county, state and federal revenue sharing monies, the balance being funded from private sources. We assume this is to be a county building. See KRS 67.080 and 67.083.
You first ask whether or not the fiscal court can let the project under advertisement for competitive bids, but by invitation only to general contractors with home offices in Rowan County, Kentucky. We think the answer is "no".
Of course, the Kentucky Model Procurement Code applies to fiscal courts, since it is a local public agency as defined in KRS 45A.345(8). See KRS 45A.350. Thus KRS 45A.345 to 45A.460 apply to every local public agency. Especially see KRS 45A.365, relating to competitive bidding.
In the absence of an express statutory provision to that effect, it is our opinion that the fiscal court has no authority to restrict and apply the Invitation to Bid to only Rowan County General Contractors. We find nothing in the applicable sections of KRS Chapter 45A that would suggest such restriction. In fact, KRS 45A.365(5) provides that "A contract shall be awarded with reasonable promptness by written notice to the responsive and responsible bidder whose bid is either the lowest bid price or the lowest evaluated bid price" (involving price adjustments). While KRS 45A.400 provides that under the local public agencies regulations, suppliers may be prequalified as responsible prospective contractors for particular types of supplies, services and construction, we do not construe that to authorize the restriction to Rowan General Contractors. KRS 45A.415(1) provides that the specifications must be so used as to assure the maximum practicable competition to meet the agency's needs. The fiscal court is charged with the responsibility of facilitating the development of fair and competitive access to county purchasing by responsible contractors.
It should be kept in mind that the bidding statutes are designed to prevent a waste of public money and abuses such as fraud, favoritism, improvidence and extravagance; and thus the bidding statutes must be strictly construed. 72 C.J.S. Supp., Public Contracts, Secs. 8 and 9, p.p. 182-184. In strictly construing KRS Chapter 45A, we arrive at the premise that in the absence of an explicit provision to the contrary, the restricting of bidders to Rowan County is not permitted. The statutes are designed to procure competitve bidding. Any action narrowing the number of potential qualified bidders would be in derogation of the statutory purpose. Thus specifications must be freely accessible to all competitors receiving notice of the bidding through the newspaper advertising for bids, as set out in KRS 45A.365(3). In Handy v. Warren County Fiscal Court, Ky., App., 570 S.W.2d 663 (1978), 664, 665, the court observed that "It has been noted that the advertisement requirement and the bidding process itself involves three important benefits: (a) an offering to the public, (b) an opportunity for competition and (c) a basis for exact comparison for bids. " Further, as we said in OAG 74-420, copy enclosed, a local government cannot do indirectly [here, restrict the bidders to general contractors of Rowan County] what it is prohibited from doing directly, i.e., avoiding competitive bidding.
You ask whether the Davis-Bacon Act, as to prevailing wage scales, applies. See 40 U.S.C.A. Sec. 276a, which does not per se apply to local governments. We find in the Federal Revenue Sharing Act a provision that the Secretary of the Treasury of the United States may promulgate regulations governing the use by local governments of revenue sharing funds. 31 U.S.C.A. Sec. 1243. 31 C.F.R. Sec. 51.42 provides that "A recipient government which receives entitlement funds under the act shall require that all laborers and mechanics employed by contractors in the performance of work on any construction project costing in excess of $2,000 and of which 25 percent or more of the cost is paid out of its entitlement funds: (1) will be paid wages at rates not less than those prevailing on similar construction in the locality as determined by the Secretary of Labor in accordance with the Davis-Bacon Act as amended (40 U.S.C. 276a-276a-5)," etc. (Emphasis added).
Thus if the federal revenue sharing money of the county on this project is less than 25 percent of the total cost, the prevailing wage provisions of Davis-Bacon would not apply.
Also see KRS 337.010(3)(e), 337.010(4) and 337.505, et seq., as to Kentucky law on the prevailing wage.