Ezel / AG Opinions / KY
KY OAG 21-03 2021-04-15

Does Kentucky require competitive bidding when a city hires an engineer to manage construction?

Short answer: Yes, for construction management. The Attorney General concluded that under KRS 45A.380(3), the City of Ashland had to competitively bid to hire an engineer who would also provide construction management services. A city may use noncompetitive negotiation to obtain ordinary professional engineering services, but the statute carves out architects and engineers providing construction management services, and the template agreement at issue gave the engineer broad authority to act for the city and direct the contractor during construction, which crossed into construction management.
Disclaimer: This is an official Kentucky Attorney General opinion. AG opinions are persuasive authority in Kentucky courts but are not binding precedent like a court ruling. This summary is for informational purposes only and is not legal advice. Consult a licensed Kentucky attorney for advice on your specific situation.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official AG opinion. The original opinion (linked at the bottom of this page, or PDF in the sidebar) is the authoritative source for any reliance.
View original AG opinion (PDF)

Plain-English summary

The City of Ashland had adopted an ordinance incorporating parts of the Kentucky Model Procurement Code. Under that code, a city can hire certain licensed professionals (including engineers) through noncompetitive negotiation, skipping the usual competitive-bidding process, when it makes a written finding that competition is not feasible. But the statute, KRS 45A.380(3), contains an exception: it does not apply to architects or engineers who provide "construction management services" instead of, or in addition to, ordinary professional engineering services. Ashland asked whether an engineer who would administer the construction phase of a project under a particular template contract fell into that exception.

The Attorney General concluded the engineer was providing construction management services, so the city had to competitively bid for them. The opinion acknowledged that many duties in the template agreement (consultation, investigation, evaluation, planning, certification, design, and reviewing construction for compliance with drawings and specifications) are within an engineer's normal scope of practice. But the template went further: it made the engineer the owner's representative, routed all of the owner's instructions to the contractor through the engineer, and gave the engineer authority to act on the owner's behalf in dealings with the contractor. Those administrative and management duties went beyond professional engineering services and amounted to construction management. Because of that, KRS 45A.380(3)'s noncompetitive-negotiation route was unavailable, and competitive bidding was required.

Currency note

This opinion was issued in 2021. 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.

Background and statutory framework

KRS 45A.380(3) allowed a local agency to contract through noncompetitive negotiation when it determined in writing that competition was not feasible and that the contract was for the services of a listed licensed professional (such as an engineer), but it expressly excluded "architects or engineers providing construction management services rather than professional architect or engineer services." The opinion compared the engineer's scope of practice under KRS 322.010(4) and (5) with the definitions of "construction manager-general contractor" in KRS 45A.030(7) and "construction manager" in KRS 65.025(1)(c). Ashland had incorporated portions of the Model Procurement Code through Ashland Ordinance Sec. 37.046. The template at issue was the standard "Agreement Between Owner and Engineer For Professional Services" published by national engineering and contractor organizations. The opinion concluded that the agreement's "General Administration of the Construction Contract" provisions, which made the engineer the owner's representative and channeled owner-to-contractor instructions through the engineer, constituted construction management services, so KRS 45A.380(3) required competitive bidding.

Citations and references

Statutes:
- KRS 45A.380(3); KRS 322.010(4), (5)
- KRS 45A.030(7); KRS 65.025(1)(c)

Source

Original opinion text

The full opinion as issued by the Office of the Kentucky Attorney General:

Commonwealth of Kentucky
Office of the Attorney General
Daniel Cameron, Attorney General
Capitol Building, Suite 118, 700 Capital Avenue, Frankfort, Kentucky 40601
April 15, 2021
OAG 21-03
Subject: Whether, under KRS 45A.380(3), the City of Ashland must competitively bid to procure the services of an engineer that would be granted broad authority over the construction phase of the contract pursuant to a specific template agreement.
Requested by: James H. Moore, III, Counsel for the City of Ashland
Written by: J. Michael West, Assistant Attorney General
Syllabus: KRS 45A.380(3) requires that the City competitively bid for the services of an engineer providing construction management services.

Opinion of the Attorney General

The City of Ashland asks whether an engineer who administers the construction phase of a contract is providing "construction management services" rather than professional engineering services. This distinction is important because procurement rules allow engineers not providing construction management services to avoid competitive bidding.

The City of Ashland has adopted an ordinance that incorporates portions of the Kentucky Model Procurement Code. See Ashland Ordinance Sec. 37.046.[1] Under one provision relevant here, a "local agency may contract or purchase through noncompetitive negotiation only when a written determination is made that competition is not feasible and it is further determined in writing by a designee of the local public agency that [t]he contract is for the services of a licensed professional, such as attorney, physician, psychiatrist, psychologist, certified public accountant, registered nurse, or educational specialist; a technician such as a plumber, electrician, carpenter, or mechanic; or an artist such as a sculptor, aesthetic painter, or musician, provided, however, that this provision shall not apply to architects or engineers providing construction management services rather than professional architect or engineer services[.]" KRS 45A.380(3). Thus, under KRS 45A.380, Ashland may engage in noncompetitive negotiation to obtain the services of an engineer but must engage in competitive bidding to procure the services of an engineer providing construction management services.

Ashland provides the template agreement that prompts this inquiry. But this Office need reference only limited portions of that document for this analysis.[2] Many of the engineer's specific duties under the template agreement fall within the scope of practice of an engineer, including the "consultation, investigation, evaluation, planning, certification, and design of engineering works and systems[,]" and providing for "the review of construction for the purpose of assuring compliance with drawings and specifications." See KRS 322.010(4). But the template agreement goes further:

[T]he Engineer shall consult with Owner and act as Owner's representative as provided in the Construction Contract. The extent and limitation of the duties, responsibilities, and authority of the Engineer as assigned in the Construction Contract shall not be modified, except as Engineer may otherwise agree in writing. All of Owner's instructions to Contractor will be issued through Engineer which shall have the authority to act on behalf of Owner in dealings with Contractor to the extent provided in this Agreement and the Construction Contract except as otherwise provided in writing.[3]

In this way, the agreement charges the engineer with duties, other than professional engineering services, that would constitute "construction management services". Compare KRS 322.010(4), (5) (defining the scope of practice of an "engineer") with KRS 45A.030(7) (defining "construction manager-general contractor") and KRS 65.025(1)(c) (defining a "construction manager").

KRS 45A.380(3) authorizes noncompetitive negotiation to procure the services of a professional engineer providing services. By its terms, however, the City must engage in competitive bidding if it seeks the services of a professional engineer who would also render construction management services, as in the template agreement.

Daniel Cameron
ATTORNEY GENERAL
J. Michael West
Assistant Attorney General

[1] https://codelibrary.amlegal.com/codes/ashlandky/latest/ashland_ky/0-0-0-62973#JD_37.046 (last accessed April 15, 2021).
[2] The agreement is the standard contract published by the National Society of Professional Engineers, the American Society of Civil Engineers, the American Council of Engineering Companies, the Associated General Contractors of America, and others and is entitled, "Agreement Between Owner and Engineer For Professional Services."
[3] These provisions appear in a section entitled, "General Administration of the Construction Contract."