On an Arkansas county construction project, can the construction manager also serve as the general contractor without competitive bidding?

Plain-English summary

Representative Bob Ballinger asked, on behalf of a county judge, two related questions about a county construction project:

1. Under Ark. Code Ann. § 19-11-801, may the construction manager also serve as the general contractor for the underlying project?
2. Is competitive bidding required?

Attorney General Leslie Rutledge answered the first question "no" on the assumption that construction work would not be competitively bid, and distinguished the bidding rules for the two services. Section 19-11-801 says competitive bidding "shall not be used" for procurement of certain professional services, including construction management. So the construction manager is selected through qualifications-based negotiation, not through competitive bidding. But the public works law at Ark. Code Ann. § 22-9-203 and Article 19, section 16 of the Arkansas Constitution require competitive bidding for the construction work itself when project costs exceed $35,000. The county must procure a construction manager separately from a general contractor on a project subject to those bidding requirements. The opinion does not decide whether the manager could also win a separate bid for the construction work.

There is one narrow exception. Section 19-11-801(d)(2)(C) recognizes a "general contractor construction management" delivery method in which the construction manager serves as the general contractor. But, citing Ops. Att'y Gen. 2013-051, 2009-038, and 2009-033, the AG flagged that this provision applies only to school districts, not to counties.

Currency note

This opinion was issued in 2019. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The opinion applies a $35,000 statutory threshold as the law stood in 2019. Anyone preparing a county construction procurement today should check the current versions of §§ 19-11-801 and 22-9-203.

Historical context

What the county wanted to do (as of 2019)

The request came from a state representative on behalf of a county judge. The AG inferred that the county contemplated giving a construction manager general-contractor work without competitively bidding the construction work.

Why "no" follows from the procurement rules

The construction-manager rule. Ark. Code Ann. § 19-11-801(b) prohibits competitive bidding for "construction management" services:

It is the policy of the State of Arkansas and its political subdivisions that political subdivisions shall follow the procedures stated in this section, except that competitive bidding shall not be used for the procurement of legal, financial advisory, architectural, engineering, construction management, and land surveying professional consultant services.

The procurement procedure for construction management uses a qualifications evaluation and a negotiated contract. §§ 19-11-803 through 19-11-805. "Construction management" is defined in § 19-11-801(d)(1) as a project delivery method in which the political subdivision acquires a series of services including design review, scheduling, cost control, value engineering, constructability evaluation, preparation and coordination of bid packages, and construction administration. The opinion treats construction management services and construction work as separate procurement subjects.

The public-works rule. When the construction work itself starts, a different rule kicks in. Ark. Code Ann. § 22-9-203(a) requires counties to use competitive bidding for "the making of major repairs or alterations, for the erection of buildings or other structures, or for making other permanent improvements ... in instances in which all estimated costs of the work exceed the sum of thirty five thousand dollars ($35,000)." Article 19, section 16 of the Arkansas Constitution reinforces this for "[a]ll contracts for erecting or repairing public buildings or bridges in any county, or for materials therefor ... under such regulations as may be provided by law."

The Supreme Court has applied Article 19, section 16 to county construction contracts. See Gatzke v. Weiss, 375 Ark. 207, 289 S.W.3d 455 (2008).

Why the assumed arrangement fails

The AG understood the question to assume the construction work would not be competitively bid if the manager also served as general contractor. On that assumption, the answer was no for a covered project above $35,000. The AG knew of no authority to waive the competitive bidding requirements; the county must procure the two services separately.

The narrow school-district exception

Section 19-11-801(d)(2)(C) describes "general contractor construction management" as a delivery method in which the construction manager "serves as the general contractor." That language might suggest competitive bidding can be skipped for the construction work in this single-entity model. But the AG, citing Ops. Att'y Gen. 2013-051, 2009-038, and 2009-033, concluded the (d)(2)(C) provision applies only to school districts. Counties do not get the school-district exception.

Practical takeaway for counties (at the time)

A county construction project subject to the public works law had to be procured in two tracks:

• Track 1: Construction manager. Negotiated and qualifications-based. Section 19-11-801 prohibits competitive bidding here.
• Track 2: General contractor / construction work. Competitively bid. Ark. Code Ann. § 22-9-203 and Article 19, section 16 require it when costs exceed $35,000.

The opinion rejects giving the construction manager unbid construction work on a covered county project. It does not decide whether the manager could also win a separately conducted construction bid.

Common questions

Q: Why did the AG answer no to the proposed arrangement?
A: The AG assumed the county would not bid the construction work if it gave that work to its construction manager. For a covered project above $35,000, the construction work must be competitively bid even though construction management services may not be.

Q: When does competitive bidding kick in for county construction?
A: The opinion states that § 22-9-203 requires bidding for covered county construction work when estimated costs exceed $35,000. It says whether the provision applies depends on the circumstances.

Q: Is the school-district exception available to counties?
A: No. The AG read § 19-11-801(d)(2)(C), the "general contractor construction management" provision, as applying only to school districts.

Q: How is a construction manager selected if not through bidding?
A: Through a qualifications-based selection and contract negotiation under §§ 19-11-803 through 19-11-805. The county evaluates the qualifications of interested firms and negotiates a contract with the most qualified.

Q: What if the county gives its construction manager unbid construction work?
A: The opinion says the county must bid covered construction work above $35,000 and identifies no authority to waive that requirement. It does not discuss a remedy for an award made without bidding.

Background and statutory framework

Arkansas's procurement law uses a two-track structure for county construction. Track 1 covers professional services (legal, financial advisory, architectural, engineering, construction management, land surveying), all of which are exempt from competitive bidding under § 19-11-801(b). Track 2 covers the construction work itself, which is governed by the public works law at §§ 22-9-201 through 22-9-204 and reinforced by the constitutional bidding requirement at Article 19, section 16.

The opinion distinguishes the qualifications review and contract negotiation used for construction management from the competitive bidding required for covered construction work.

The opinion says the general-contractor construction-management provision in § 19-11-801(d)(2)(C) applies only to school districts.

Citations and references

Constitutional and statutory provisions:

• Ark. Const. art. 19, § 16 (competitive bidding for county public construction)
• Ark. Code Ann. § 19-11-801 (procurement of professional services)
• Ark. Code Ann. § 19-11-801(b) (competitive bidding excluded for listed services)
• Ark. Code Ann. § 19-11-801(d)(1) (definition of "construction management")
• Ark. Code Ann. § 19-11-801(d)(2)(C) (general contractor construction management; school districts only)
• Ark. Code Ann. §§ 19-11-803 to 19-11-805 (CM procurement procedures)
• Ark. Code Ann. §§ 22-9-201 to 22-9-204 (public works law)
• Ark. Code Ann. § 22-9-203(a) ($35,000 threshold for competitive bidding)

Cases:

• Gatzke v. Weiss, 375 Ark. 207, 289 S.W.3d 455 (2008), Ark. Supreme Court, Article 19, section 16 applies to county construction contracts

Related AG opinions:

• Op. Att'y Gen. 2013-051 (school-district CM/GC rule)
• Op. Att'y Gen. 2009-038 (school-district CM/GC rule)
• Op. Att'y Gen. 2009-033 (school-district CM/GC rule)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2019-001
April 2, 2019

The Honorable Bob Ballinger
State Representative
508 Dr. Spurlin Circle
Berryville, AR 72616-3825

Dear Representative Ballinger:

This is in response to your request for an opinion on the following questions concerning Ark. Code Ann. § 19-11-801, which addresses the procurement of professional services by state agencies and political subdivisions:

1) Under this statute, may the construction manager also serve as general contractor of the underlying project?

2) Pursuant to this statute and as it relates to the underlying situation, is competitive bidding required?

You state that these questions are asked on behalf of a county judge, so I presume they relate to a county construction project.

RESPONSE

I gather you are aware that pursuant to section 19-11-801, competitive bidding may not be used when selecting a construction manager for a county construction project. So when you ask whether "the construction manager" may "also serve as general contractor," I surmise that the county would not use competitive bidding for the construction work on the project. With that understanding, the answer to your first question is "no," if the estimated cost of the project exceeds $35,000. Competitive bidding is required, pursuant to Ark. Code Ann. § 22-9-203 (the so-called "public works law") and Ark. Const. article 19, section 16, for the construction work on such a project.

In response to your second question, therefore, competitive bidding is prohibited when selecting a construction manager for a county construction project, but it is required for the construction work when the estimated cost of the project exceeds $35,000.

DISCUSSION

Question 1: Under this statute, may the construction manager also serve as general contractor of the underlying project?

The statute you have asked about, Ark. Code Ann. § 19-11-801, prohibits counties (along with other political subdivisions and the State) from using competitive bidding in the procurement of "construction management" services:

> It is the policy of the State of Arkansas and its political subdivisions that political subdivisions shall follow the procedures stated in this section, except that competitive bidding shall not be used for the procurement of legal, financial advisory, architectural, engineering, construction management, and land surveying professional consultant services.

Ark. Code Ann. § 19-11-801(b) (Repl. 2016) (emphasis added). The procedures for securing the services of a construction manager involve evaluating the entity's qualifications and negotiating a contract. Ark. Code Ann. §§ 19-11-803 through 19-11-805 (Repl. 2016). "Construction management" is defined in relevant part as "a project delivery method based on an agreement in which a ... political subdivision ... acquires from a construction entity a series of services that include, but are not limited to, design review, scheduling, cost control, value engineering, constructability evaluation, preparation and coordination of bid packages, and construction administration." Id. at § 19-11-801(d)(1).

At the same time, the so-called "public works law" requires counties to use competitive bidding to select a contractor when the estimated costs exceed $35,000. Ark. Code Ann. §§ 22-9-201 through 22-9-204 (Repl. 2016 and Supp. 2017). The competitive bidding requirements under the public works law apply to county contracts "for the making of major repairs or alterations, for the erection of buildings or other structures, or for making other permanent improvements ... in instances in which all estimated costs of the work exceed the sum of thirty five thousand dollars ($35,000) ...." Ark. Code Ann. § 22-9-203(a) (Supp. 2017). Whether that provision applies depends on the underlying circumstances.

The Arkansas Constitution similarly requires the use of competitive bidding on "[a]ll contracts for erecting or repairing public buildings or bridges in any county, or for materials therefor ... under such regulations as may be provided by law." Ark. Const. art. 19, § 16. See Gatzke v. Weiss, 375 Ark. 207, 289 S.W.3d 455 (2008) (confirming art. 19, § 16's application to county construction contracts). I am unaware of any authority for waiving the competitive bidding requirements on a county construction project that is subject to the public works law.

Section 19-11-801 authorizes a project delivery method called "general contractor construction management" in which the construction manager "serves as the general contractor," suggesting competitive bidding would not be required to procure the construction contract. Ark. Code Ann. § 19-11-801(d)(2)(C). This provision only applies to school districts. See Ops. Att'y Gen. 2013-051, 2009-038, 2009-033.

With regard to your particular question, I gather you are aware that construction management services must be negotiated rather than competitively bid. So when you ask whether "the construction manager" may "also serve as general contractor," I surmise that competitive bidding would not be used to secure a contractor for the project. With that understanding, the answer to your question is "no," if the project's estimated cost exceeds $35,000 as required by the public works law.

Question 2: Pursuant to this statute and as it relates to the underlying situation, is competitive bidding required?

As you can see from my response to Question 1, different requirements come into play in connection with a county's procurement of construction-related services. Competitive bidding is prohibited when selecting a construction manager, but it is required for the construction work when the estimated costs of the project exceed $35,000. Accordingly, a county must procure a construction manager separately from a general contractor on such a county construction project.

Sincerely,

Leslie Rutledge
Attorney General