North Carolina Department of Justice
North Carolina Department of Justice
North Carolina Department of Justice
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[465] May 31, 2000

Mr. Len Hill, P.E. Deputy Highway Administrator - Preconstruction North Carolina Department of Transportation

P.O. Box 25201 Raleigh, NC 27611

Re: Advisory Opinion: Competitive Bidding of Professional Services Contracts

Dear Mr. Hill:

You have requested, on behalf of the Board of Transportation, an Advisory Opinion on the legality of the North Carolina Department of Transportation (NCDOT) implementing competitive or “low bid” bidding of professional services contracts on both federal and state funded projects. The question has specifically arisen with regard to engineering and surveying work by private firms on NCDOT construction projects. Based upon our review, we believe that professional services on federal-aid projects may not be awarded under a competitive bid situation but must be awarded based upon a qualifications review. For state-funded projects, we believe that in limited circumstances these professional services contracts may be awarded on a competitive basis; however, if proposed amendments to the professional responsibility rules for surveyors and engineers become effective, these rules may prohibit bidding on such contracts.

ANALYSIS

I. Federal-Aid Projects.

The provisions of the United States Code sometimes referred to as the “Brooks Architect-Engineers Act” provide in part that:

The Congress hereby declares it to be the policy of the Federal Government to publicly announce all requirements for architectural and engineering services, and to negotiate contracts for architectural and engineering services on the basis of demonstrated competence and qualification for the type of professional services required and at fair and reasonable prices.

40 U.S.C. § 542. The Act applies to services such as architecture or engineering and includes surveying. 40 U.S.C. § 541(3)(C). Similar statutes apply to work done for State transportation departments on federal-aid highway projects:

(A) General rule. Each contract for program management, construction management, feasibility studies, preliminary engineering, design, engineering, surveying, mapping, or architectural related services with respect to a project subject to the provisions of subsection (a) of this section shall be awarded in the same manner as a contract for architectural and engineering services is negotiated under title IX of the Federal Property and Administrative Services Act of 1949 [40 USCS §§ 541 et seq.] or equivalent State qualifications-based requirements.

23 U.S.C. § 112(b)(2)(A). Under these provisions, for federal-aid projects, engineering and surveying contracts must be awarded on a “qualifications” basis rather than on a “low-bid” basis.

II. State-Funded Projects.

For state-funded projects, the General Assembly has enacted what is sometimes referred to as the “State Brooks Act” or the “Mini Brooks Act”. That Act provides:

It is the public policy of this State and all public subdivisions and Local Governmental Units thereof, except in cases of special emergency involving the health and safety of the people or their property, to announce all requirements for architectural, engineering, and surveying services, to select firms qualified to provide such services on the basis of demonstrated competence and qualification for the type of professional services required without regard to fee other than unit price information at this stage, and thereafter to negotiate a contract for architectural, engineering, or surveying services at a fair and reasonable fee with the best qualified firm. If a contract cannot be negotiated with the best qualified firm, negotiations with that firm shall be terminated and initiated with the next best qualified firm.

N.C. Gen. Stat. § 143-64.31. In other words, this provision sets forth a “qualifications” based method of award of engineering and surveying contracts. An exception to the statute provides:

Units of local government or the North Carolina Department of Transportation may in writing exempt particular projects from the provisions of this Article in the case of:

(a)
Proposed projects where an estimated professional fee is in an amount less than thirty thousand dollars ($30,000), or
(b)
Other particular projects exempted in the sole discretion of the Department of Transportation or the unit of local government, stating the reasons therefor and the circumstances attendant thereto.

N.C. Gen. Stat. § 143-64.32. It is our belief that this exception should be used sparingly to assure that the exception is not invoked so frequently as to give the appearance that the exception is used to avoid the general rule. Under this section, NCDOT could award a limited number of projects on a “low bid” basis with sufficient reason stated. (Please note that "low bid" contracts awarded under this exception would be awarded contrary to the requirements set forth in the October, 1996 North Carolina Department of Transportation Policies and Procedures for Major Professional or Specialized Services Contracts.)

The General Assembly has also provided that:

(f) Notwithstanding any other provision of law, the Department of Transportation may solicit proposals under rules and regulations adopted by the Department of Transportation for all contracts for professional engineering services and other kinds of professional or specialized services necessary in connection with highway construction, maintenance, or repair. In order to promote engineering and design quality and ensure maximum competition by professional firms of all sizes, the Department may establish fiscal guidelines and limitations necessary to promote cost-efficiencies in overhead, salary, and expense reimbursement rates. The right to reject any and all proposals is reserved to the Board of Transportation.

N.C. Gen. Stat. § 136-28.1(f). Under this section, notwithstanding the provisions of the Mini Brooks Act in Chapter 143, NCDOT may let contracts on a competitive basis for professional engineering services in accordance with rules and regulations adopted by NCDOT; it is not required to do so. At this time, NCDOT has not adopted rules and regulations governing solicitation and award of engineering and surveying contracts on a low bid basis. If the Board of Transportation should determine that award on a “low bid” or “competitive” basis is appropriate as a general policy, it should first adopt rules and regulations to govern the solicitation and award.

One matter that may be of interest to you as the Board and NCDOT consider whether such contracts are appropriate is a proposed revision of the Standards of Professional Conduct for Engineers and Surveyors. Expected to become effective this summer unless the General Assembly specifically rejects the proposed amendment, this new rule will provide that a licensee “shall solicit or accept work only on the basis of qualifications and . . . [s]hall, with regard to fee bidding on public projects, comply with the provisions of G.S. 143-64.31, and shall not knowingly cooperate in a violation of any provision of G.S. 143-64.31.” Proposed 21 N.C.A.C. 56.0701(f)(3). It appears from this provision that the licensing board for engineers and surveyors will take the position that its licensed engineers and surveyors may not bid on a competitive basis but only on a qualifications basis. In that case, no licensed engineers or surveyors would submit bids for a competitively bid project.

CONCLUSION

We are of the opinion that professional services on federal-aid projects may not be awarded under a competitive bid situation but must be awarded based upon a qualifications review. With respect to state-funded projects, we are of the opinion that in limited circumstances these professional services contracts may be awarded on a competitive basis at the present time. However, before these contracts are awarded as a routine matter, the Department should adopt rules and regulations governing their award.

Please advise if we can be of any further assistance.

Signed by:

Reginald L. Watkins Senior Deputy Attorney General Civil Division

Robert O. Crawford, III Special Deputy Attorney General Transportation Section

Elizabeth Leonard McKay Special Deputy Attorney General Transportation Section