Could Louisville professional service contracts be voided for missing no-bid findings?

Plain-English summary

In 1994, Kentucky's Attorney General answered questions about Louisville's no-bid professional service contracts. On the ordinance excerpts supplied, it found no duty for the finance director to make a detailed written determination that competition was infeasible. It said the ordinance required written documentation submitted to the director noting infeasibility, which was different from a director-authored finding.

The AG likewise found no duty for the Board of Aldermen to write a separate finding on each of nine factors before approving a no-bid contract by resolution. It therefore saw no basis to void a contract for the alleged missing findings. The opinion expressly limited its answer to the excerpts provided and said other applicable ordinances might change it.

Currency note

This opinion was issued in 1994. 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.

Historical summary

Finance director documentation

The AG read section 37.27 of the Louisville Code as requiring written documentation submitted to the director saying competition was not feasible. It did not read the provision as requiring the director personally to make and preserve a detailed written determination for each contract. That difference resolved the first two questions about bidding and voidability.

Board of Aldermen approval

The opinion said section 37.76 required approval of no-bid professional contracts by board resolution and supplied nine factors for aldermen to consider. It found no requirement for a written finding on each factor, and no ground to void a contract merely because those individual written findings were absent.

Limits of the conclusion

The AG distinguished cases about failure to obey mandatory bidding rules from the alleged failure to follow internal procedures for contracts not required to be bid. It also cautioned that its interpretation depended on the particular ordinance excerpts received and could change if other applicable provisions were produced.

Common questions

Did the finance director need a detailed written finding for each no-bid professional contract?

The AG said no under the ordinance excerpts it reviewed. Written documentation that competition was infeasible had to be submitted to the director, but the director did not have to write a separate detailed determination.

Did aldermen have to write findings on all nine review factors?

The AG said no. The factors guided their vote on the approval resolution, while the ordinance excerpt did not require factor-by-factor written findings.

Could those missing findings alone void the contracts?

The AG found no such basis, because it found no requirement for the particular findings described in the questions. Its answer remained conditional on the ordinance materials provided.

Background and ordinance framework

The request asked three related questions about sections 37.27 and 37.76 of the Louisville Code of Ordinances. The AG explained that it generally could not construe all city ordinances without having their text and was relying on excerpts. It contrasted a required written infeasibility notation with a nonexistent requirement for a detailed director finding, and a board's required resolution and consideration of factors with nonexistent written findings on each. It cited Board of Education of Floyd County v. Hall to distinguish mandatory bid violations from the procedural omissions alleged here.

Citations and references

• Louisville Code of Ordinances section 37.27: written documentation of infeasible competition, as described in the opinion.
• Louisville Code of Ordinances section 37.76: board resolution and nine review factors, as described in the opinion.
• Board of Education of Floyd County v. Hall, Ky., 353 S.W.2d 194 (1962): mandatory bid requirements distinguished by the AG.

Source

• Landing page: https://www.ag.ky.gov/Resources/Opinions/Opinions/OAG94-053.htm

Original opinion text

OAG 94-53

August 2, 1994

Thomas J. Burch

State Representative

4012 Lambert Avenue

Louisville, Kentucky 40218

Re: City of Louisville Contracts

Dear Representative Burch:

This opinion responds to your questions regarding the procurement of professional services by the City of Louisville. You have asked the following three questions:

1. Is the city of Louisville required by its own ordinances to seek competitive bids for personal service contracts it awards unless the city's Director of Finance makes a detailed determination that competitive bidding is not feasible as to a particular contract?

2. If so, if the city's Director of Finance fails to make and keep record[s] of such detailed determination, does his failure to comply with [the] ordinance render such personal service contracts awarded void or voidable?

3. If the city's Board of Aldermen fails to conduct the detailed review of such contracts set out by ordinance as a condition precedent to their approval, are such contracts void or voidable?

We must begin by noting that our role in the interpretation of city ordinances is necessarily limited. As a general rule we cannot construe city ordinances because we do not have copies of the various ordinances in effect in Kentucky cities. We have undertaken to answer your questions based on the excerpts from the Louisville Code of Ordinances that have been provided to us. Our response might be subject to change if other applicable ordinances are brought to our attention.

Our review of the ordinances reveals no requirement that the city make the “detailed determination” which is the subject of your inquiry. Therefore the general answer to all three of your questions is no.

Your first question suggests that the Director of Finance must make “a detailed determination that competitive bidding is not feasible as to a particular contract.” We find no such requirement. Section 37.27 of the Code merely states that written documentation must be submitted to the Director noting that competition is not feasible. The ordinance does not state that the Director must make any kind of written determination. As long as the Director is presented with any kind of written notation that competition is not feasible, we believe that 37.27 is satisfied.

Your second question asks whether a contract is voidable for failure to make and record the Director's detailed determination. Because we find that no such written determination is necessary, the answer to this question is no.

Your third question asks whether a contract is voidable if the Board of Aldermen “fails to conduct the detailed review” set out in 37.76. That section states that no-bid professional contracts must be approved by resolution of the Board of Aldermen, and sets out a list of nine factors that the Board is to consider. We do not read the ordinance to require that the Board make a specific written determination regarding every factor. The list of factors merely supplies the criteria for the aldermen to consider when deciding whether to vote for the resolution. Therefore we find no grounds to void a contract because the Board failed to make a written finding on each of the nine factors.

Our review of cases upholding the voiding of contracts indicates that contracts may be void for failure to follow mandatory bid requirements. Board of Education of Floyd County v. Hall, Ky., 353 S.W.2d 194 (1962). Those cases do not support a finding that a contract is void for failure to follow internal procedures regarding contracts that need not be bid. And, as we have stated, we find no failure on the part of the City of Louisville to comply with its ordinances. Therefore we do not believe that an action may be maintained to void a contract with the city.

Sincerely,

Chris Gorman

Attorney General

Ross T. Carter

Assistant Attorney General