Could Louisiana's Secretary of State negotiate a public-works project under the 2004 bid limit?

Plain-English summary

The Louisiana Secretary of State asked whether it could negotiate a public-works contract below the formal bidding threshold. The AG said projects costing no more than $100,000 could be done with agency employees, negotiated with one or more contractors, or put out for bids. Projects exceeding that 2004 threshold had to be advertised and awarded to the lowest responsible and responsive bidder.

The AG explained that the project cost included materials, employee wages and benefits, supervision and administrative overhead up to fifteen percent, and the rental value of agency equipment used. It also cautioned that a public-works contract over $50,000 required a duly licensed contractor and that state budget provisions still applied. Those dollar amounts describe the 2004 law, not current procurement thresholds.

Currency note

This opinion was issued in 2004. 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.

Common questions

Could the Secretary of State negotiate a $100,000 public-works contract?

Under the opinion's 2004 rule, a project that did not exceed $100,000 was outside formal advertising and bidding requirements and could be negotiated.

Did avoiding formal bidding also avoid contractor licensing?

No. The AG said any public-works contract exceeding $50,000 had to be performed by a licensed contractor.

What costs counted toward the bid threshold?

The AG included materials, wages and benefits, supervision and administrative overhead within its stated cap, and equipment rental value in the project total.

Background and statutory framework

The Secretary of State was a public entity under LSA-R.S. 38:2211(10). The AG applied the Public Bid Law's public-works definition and 2004 contract limit, plus the separate contractor-licensing law. The opinion also noted that state expenditures remained subject to budget rules.

Citations

• LSA-R.S. 38:2211(10) (public entity).
• LSA R.S. 38:2212A(1)(d) (project cost and bid limit).
• LSA R.S. 37:2150-2163 (contractor licensing).

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/04-0030

Original opinion text

March 12, 2004
Opinion Number 04-0030

90-A-1 Public Funds & Public Contracts
R.S. 38: 2211(9) and (11);
R.S. 38:2212(A)(1)(a) and (d);
R.S. 37:2150-2163

Mr. Al Ater, Chief of Staff
Public works contracts that do not exceed the statutory contract
Secretary of State
limit of $100,000 as set forth in LSA R.S. 38:2211A(1)(d) are not
subject to the advertising and bidding requirements of the Louisiana
P.O. Box 94125
Public Bid Law and may be undertaken by the public entity using its
Baton Rouge, LA 70804-9125
own employees, may be negotiated with one or more contractors,
or may be let out for public bids. Public works contracts are subject to the contractor licensing requirements of LSA R.S.
Dear Mr. Ater: 37:2150-2163 including the requirement that any contract that
exceeds the sum of $50,000.00 be performed by a duly licensed

On behalf of the State of Louisiana, Secretary of State, you have requested the opinion of this office on whether LSA R.S. 38:2211(A)(9), (11) and (12) and 38:2212(d) of the Public Bid Law allows the Secretary of State to “negotiate” a “public work” contract up to the “contract limit” without the necessity of going through the formal bid process.

The Louisiana Secretary of State is a public entity within the meaning of LSA-R.S. 38:2211(10) and is therefore subject to the provisions of the Louisiana Public Bid Law in contracting for public works. LSA R.S. 38:2211-2296. The purpose of the Public Bid Law is to secure free and unrestricted competition among bidders, to eliminate fraud and favoritism, and to avoid undue or excessive costs. Apolinar v. Professional Services, 663 So. 2d 17 (La. 1995); Louisiana Associated General Contractors, Inc., et al v. Calcasieu Parish School Board, 586 So. 2d 1354 (La.1991).

Under the Public Bid Law, contracts for public works projects exceeding $100,000 must be advertised and let to the lowest responsible and responsive bidder. Public works means the erection, construction, alteration, improvement, or repair of any public facility or immovable property owned, used, or leased by a public entity. LSA-R.S. 38:2212A(1)(a) & (d) and 38:2211(9) & (11). Public works contracts that do not exceed the contract limit of $100,000 are not subject to the advertisement and bidding requirements of the Public Bid Law and may be negotiated by the public entity.

To determine if the public works contract exceeds the $100,000 contract limit, the public entity must add together the total cost of materials that will go into the project, the wages and benefits which will be paid to the employees used in the project, the cost of supervision and administrative overhead not to exceed fifteen percent, and the rental value of the owned equipment which will be used as per the rates in the latest edition of the Association Equipment Dealers Rental Book.

Page 2

Opinion Number 04-0030
Mr. Al Ater, Chief of Staff
Louisiana Secretary of State
Page -2-

It is therefore the opinion of this office that a public works contract undertaken by the Louisiana Secretary of State that does not exceed the sum of $100,000, including labor, materials, and equipment as set forth in R.S. 38:2212A(1)(d) may either be undertaken by the Secretary of State using its own employees, may be negotiated with one or more contractors, or may be let out for public bids. Please note that any expenditure by the Secretary of State is subject to the State budget provisions of LSA R.S. 39:56 and that any public works contract is subject to the contractor licensing requirements of LSA R.S. 37:2150-2163 including the requirement that any contract that exceeds the sum of
$50,000.00 must be performed by a duly licensed contractor.

We trust that this answers your inquiry.

Yours very truly,

CHARLES C. FOTI, JR.
Attorney General

BY: _________
RICHARD L. MCGIMSEY
Assistant Attorney General

RPI/RLM/dam

Page 3

Opinion Number 04-0030
Syllabus

90-A-1 Public Funds & Public Contracts
R.S. 38: 2211(9) and (11);
R.S. 38:2212(A)(1)(a) and (d);
R.S. 37:2150-2163

Public works contracts that do not exceed the statutory contract limit of $100,000 as set forth in LSA R.S. 38:2211A(1)(d) are not subject to the advertising and bidding requirements of the Louisiana Public Bid Law and may be undertaken by the public entity using its own employees, may be negotiated with one or more contractors, or may be let out for public bids. Public works contracts are subject to the contractor licensing requirements of LSA R.S. 37:2150-2163 including the requirement that any contract that exceeds the sum of $50,000.00 be performed by a duly licensed contractor.

Mr. Al Ater, Chief of Staff
Louisiana Secretary of State
P.O. Box 94125
Baton Rouge, LA 70804-9125

Date Released:

Date Received: March 12, 2004

Richard L. McGimsey
Assistant Attorney General