Could the Houma-Terrebonne Airport Commission use a design-build contract for a capital improvement?

Plain-English summary

In November 2013, the Louisiana Attorney General concluded that the Houma-Terrebonne Airport Commission could not use design-build for a proposed capital improvement. The AG treated the commission as a public entity subject to Louisiana's Public Bid Law and said that a public entity needed specific legal authorization to depart from the prescribed public-works procurement method. Its conclusion rested on the office's stated understanding that the commission lacked special statutory authority.

The opinion described the public-works bidding rule then applicable to projects over $150,000 and distinguished smaller projects. It relied on La. R.S. 38:2212 and the statute addressing design-build contracts. Its answer was specific to the commission's authority and proposed project at the time.

Currency note

This opinion was issued in 2013. 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 airport commission combine design and construction in one contract?

The AG said the commission could not use design-build for the proposed project on its understanding that the commission lacked special statutory authority.

Did the AG say no Louisiana public entity could ever use design-build?

No. The opinion's rule expressly allowed for specific legal authorization. Its conclusion relied on the office's understanding that the commission lacked such authority for the project described.

Did the opinion apply ordinary public-works bidding rules?

Yes. The AG said the commission was a public entity covered by the Public Bid Law and described the then-applicable rule for public-works contracts above $150,000.

Background and statutory framework

Counsel for the commission asked about design-build procurement for a possible capital project. The AG read the ordinary public-works method in La. R.S. 38:2212 together with La. R.S. 38:2225.2, which it cited on design-build agreements, and stated its understanding that the commission had no special statutory authority to proceed as proposed.

Citations

• La. R.S. 38:2212 (public-works procurement method discussed in the opinion).
• La. R.S. 38:2225.2 (design-build provision quoted in the opinion).

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/13-0182

Original opinion text

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DEPARTMENT OF JUSTICE
P.O. BOX 94005
BATON ROUGE
70804-9005
JAMES D. "BUDDY" CALDWEll
ATTORNEY GENERAL

November 26,2013
OPINION 13-0182

90-A-1 PUBLIC FUNDS & CONTRACTS
Mr. David J. Norman, III
La. R.S. 38:2212, La. R.S. 38:2225.2
Allen & Norman, LLC
303 Verret Street
The Houma-Terrebonne Airport Commission may not employ the
design-build construction method for a potential capital improvements
Houma, LA 70360
project.

Dear Mr. Norman:

Your request for an Attorney General's Opinion has been assigned to me for research and reply. On behalf of the Houma-Terrebonne Airport Commission (II H-TAC"), you have asked for our opinion as to whether the H-TAC may employ the design-build construction method for a potential capital improvements project.

As a public entity, as defined in La. R.S. 38:2211 (A)(11), the H-TAC is subject to the provisions of the Louisiana Public Bid Law. Under Louisiana's Public Bid Law, contracts for public works projects exceeding $150,000 must be advertised and let to the lowest responsible and responsive bidder. This is commonly referred to as the design-bid-build method. A public works project means the erection, construction, alteration, improvement, or repair of any public facility or immovable property owned, used, or leased by a public entity. La. R.S. 38:2211. Public works projects that are estimated to cost less than $150,000 are not subject to the advertising and bidding requirements of the Public Bid Law and may be undertaken by the public entity with its own employees or may be negotiated with one or more contractors.

Louisiana courts have recognized that Louisiana's Public Bid Law is a prohibitory law founded on public policy. Broadmoor, L.L.C. v. Ernest N. Morial New Orleans Exhibition Hall Auth., 04-0211 (La. 3/18/04), 867 So.2d 651,656. The statute was enacted in the interest of the taxpaying citizens for the purpose of protecting them against contracts of public officials entered into because of favoritism and involving exorbitant and extortionate prices. Furthermore, a political entity has no authority to take any action which is inconsistent with the Public Bid Law. Id.; Louisiana Associated Gen.
Contractors, Inc. v. Louisiana Dep't of Agric. & Forestry, 05-0131 (La.2/22/06), 924 So.2d 90, 95.

Page 2

Opinion 13-0182
Mr. David J. Norman, III
Page 2

Further, we note that La. R.S. 38:2225.2 provides the following with respect to design­ build contracts:

§ 2225.2. Design-build contracts

Neither the state nor any local entity, unless specifically authorized by law, may execute any agreement for the purchase of unimproved property which contains provisions related to the successful design and construction of a construction project prior to the transfer of title to the state or local entity.

Pursuant to the plain language of La. R.S. 38:2212, which prescribes the specific method by which public entities must undertake public works projects,and the express language of La. R.S. 38:2225.2, it is the opinion of this office that, unless specifically authorized by law, a public entity has no authority to enter into a design-build contract. It is our understanding that the H-TAC does not have special statutory authority to execute a design-build contract. As such, it is the opinion of this office that the H-TAC may not use the design-build construction method for its proposed capital improvements
project.
.

We trust this adequately responds to your request. If you should have any questions about the response contained herein, please feel free to contact our office.

Yours very truly,

. "BUDDY" CALDWELL
YGENERAL

BY:
MI AE~ J. VALLAN
Assistar Attorney General

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