Does Louisiana's Public Bid Law apply when a tenant pays part of a public building project?

Plain-English summary

The North Webster Parish Industrial District planned work on a building it owned. The project was expected to cost about $300,000, with the tenant paying an unspecified share. The district asked whether Louisiana's Public Bid Law would apply if its own contribution stayed below $250,000, or if it spent less than $60,000 on materials and supplies.

The attorney general said yes. For work on the district's building, the opinion treated the total project cost as the measure, regardless of the share contributed by the tenant. The district was a public entity, the proposed work was a public work, and some public funds would be used. At the time of the opinion, the public-work contract limit was $250,000, including labor, materials, and equipment.

The opinion drew a distinction between a separate purchase of materials and materials used as part of the building work. A separate purchase could fall under the materials-and-supplies rules. The district could not carve its share of the materials out of the building project to evade the public-work bidding threshold.

What this means for you

Public districts planning work on their buildings

The opinion measured the proposed work against the full project cost, not the district's contribution alone. Its answer covered a roughly $300,000 project on a district-owned building that would use public funds in some amount.

Tenants contributing to a public project

The tenant's proposed contribution did not remove this project from the Public Bid Law in the attorney general's analysis. The opinion relied on the district's ownership of the building, the character of the work, the total project cost, and the use of public funds. The opinion did not specify either party's share.

Procurement staff and contractors

The opinion said the materials-and-supplies purchase rules apply to purchases strictly separate from a public-work contract. Materials supplied for the building alteration or repair remained part of the public work. The opinion cited La. R.S. 38:2212(V)'s ban on dividing a public-work project to avoid advertised bidding.

Common questions

Q: Does a public district have to bid a building project when a tenant pays part of the bill?
A: In this opinion, yes. The attorney general said a public-work project over the contract limit was covered when public funds paid any part, regardless of the district's share.

Q: Could the district buy less than $60,000 of materials outside the project bid?
A: The opinion said no if those materials were the district's contribution to the building work. That contribution remained under the public-work rules, rather than becoming a separate materials purchase.

Q: How did the opinion distinguish a materials purchase from a public work?
A: It reserved the separate purchase rules for materials and supplies bought strictly apart from a public-work contract. The proposed erection, alteration, improvement, or repair of the district building was a public work.

Q: What amount triggered public-work bidding in the opinion?
A: The opinion quoted a $250,000 contract limit per project, including labor, materials, and equipment. It measured the anticipated $300,000 project against that limit, not against the district's smaller contribution. That figure reflects the law discussed in the February 2025 opinion.

Background and statutory framework

The district was a political subdivision under La. R.S. 39:551.5 and therefore a public entity for the bid-law analysis. The opinion quoted the Public Bid Law's definition of public work as construction, alteration, improvement, or repair of a public facility or immovable property owned, used, or leased by a public entity. It said public works above the contract limit must be advertised and let to the lowest responsible and responsive bidder.

For separate materials and supplies purchases, the opinion quoted La. R.S. 38:2212.1(A)(1)(a)'s $60,000 advertised-bid threshold and discussed a quotation process for purchases from $30,000 to below $60,000. It found those purchase rules did not change the treatment of materials used for the district's proposed building work. La. R.S. 38:2212(V) barred dividing that public work to avoid the bidding requirement.

Citations and references

• La. R.S. 38:2211 (public entity and public-work definitions)
• La. R.S. 38:2212 (public-work bidding and division of projects)
• La. R.S. 38:2212.1(A)(1)(a) (separate materials and supplies purchases)
• La. R.S. 39:551.5 (North Webster Parish Industrial District)
• Airline Construction Company, Inc. v. Ascension Parish School Board, 568 So.2d 1029, 1032 (La. 1990) (purpose of the Public Bid Law)

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/24-0101

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.

STATE OF LOUISIANA
DEPARTMENT OF JUSTICE
OFFICE OF THE ATTORNEY GENERAL
P.O. Box 94005
BATON ROUGE, LA
70804-9005

Liz MURRILL
ATTORNEY GENERAL

February2l, 2025
OPINION 24-0101

90-A-i Public Funds & Public Contracts
Mr. Jason Wade
A++
La. R.S. 38:2211
I-LLorney
La. R.S. 38:2212
North Webster Parish Industrial District La. R.S. 39:551.5 . ox
..
The Louisiana Public Bid Law applies regardless of the proportion
Springhill, LA 71 075-0887
of funds contributed by a public entity as long as the project is in
excess of the contract limit and public funds were used in some manner, way, or form. Additionally, La. R.S. 38:2212(V) prohibits the separation of a project in such a way as to avoid the contract threshold limits for the application of the Public Bid Law to a public Dear Mr Wade
. . work contract.

You have requested an opinion from our office on behalf of the North Webster Parish Industrial District (“District”) regarding the Louisiana Public Bid Law, La. R.S. 38:221 1 et
,

seq. The District is considering a project involving work on a building it currently owns and is anticipating the total project cost to be approximately $300,000.00. The District will cover an undetermined portion of the project cost, with the current tenant of the building proposing to cover the remaining portion. Specifically, you have asked us to opine on the following question:

Does the Public Bid Law apply when work on a building owned by the District is anticipated to cost approximately $300,000 for the total project, if the district spends or contributes less than $250,000 on the project and/or less than $60,000 on materials and supplies?

Conclusion: Yes, Louisiana Public Bid Law applies regardless of the proportion of funds contributed by a public entity as long as the project is in excess of the contract limit and public funds were used in some manner, way, or form.
Additionally, La. R.S. 38:2212(V) prohibits the separation ofa project in such a way as to avoid the contract threshold limits for the application of the Public Bid Law to a public work contract.

The North Webster Parish Industrial District was created as a political subdivision pursuant to La. R.S. 39:551 .5. As such, the District is considered a “public entity” under

La. R.S. 38:2211(A)(12) and must adhere to the Public Bid Law for certain public works and certain purchases of materials and supplies. Under the Public Bid Law, contracts for public works exceeding the current contract threshold must be advertised and let to the lowest responsible and responsive bidder. La. R.S. 38:2212(A)(1)(a). A public work is defined as “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.

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OPINION 24-0101
Jason Wade
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38:221 1(A)(1 3). Public works that are estimated to cost less than the contract limit may be undertaken by the public entity with its own employees. La. R.S. 38:2212(N).

Louisiana courts have long recognized thatthe Public Bid Law is a prohibitory law founded on public policy. Broadmoor, L. L. C. v. Ernest N. Mona! New Orleans Exhibition Hall Auth., 2004-021 1 (La. 3/1 8/04), 867 So.2d 651 656. The Public Bid Law was enacted in the ,

interest of the taxpaying citizens for the purpose of protecting them against contracts of public officials entered into because offavoritism and involving exorbitant and extortionate prices. Airline Construction Company, Inc. v. Ascension Parish School Board, 568 So.2d 1029, 1032 (La. 1990). Furthermore, Louisiana courts have recognized that a political entity lacks the authority to take any action inconsistent with the Public Bid Law. Broadmoor, 867 So.2d 651 656; Louisiana Associated General Contractors, Inc. v.
,

Louisiana Dep’t ofAgriculture & Forestry, 2005-01 31 (La. 2/22/06), 924 So.2d 90, 95.

As stated above, the District is currently unaware of the total cost of the proposed project but anticipates the cost being approximately $300,000.00. The current contract threshold for public works under the Public Bid Law is found in La. R.S. 2212(C)(1) and provides that “the term contract limit. shall be equal to the sum of two hundred fifty thousand . .

dollars per project, including labor, materials, and equipment. . .(Emphasis added).
.“

We note that this statutory language establishing the threshold amount of a contract, which triggers the provisions of the Public Bid Law, does not distinguish the proportion of funds used nor the types or quantity of entities and parties involved. Additionally, in La. Atty. Gen. Op. No. 04-0197, it was determined that the Public Bid Law applies to public work contracts let by public entities, even when only part of the funding comes from state- appropriated funds. Similarly, La. Atty. Gen. Op. No. 08-0067, clarified that the applicability of the Public Bid Law is determined based on the entire renovation project. Lastly, in accord with this situation, La. Atty. Gen. Op. No. I 5-01 51 wherein the ,

renovation and construction will be mostly assumed by a private entity with the public entity contributing funds, our office stated that “[ajlthough the proposed renovations and construction are being undertaken by a private entity, it is the opinion of this office that the [P]ublic [B}id [L]aw would still apply. Public funds will be used in some form or fashion to either renovate existing publicly owned facilities or construct a new facility on publicly owned property.”

It remains the opinion of our office that the Public Bid Law applies when work on a public property exceeds the contract limit of $250,000 for the total project regardless of the contribution of the public entity.

In contrast, the language ofthe provisions governing purchases ofmaterials and supplies refers specifically to the amount to be paid out of public funds. Under La. R.S. 38:2212.1(A)(1)(a), “[a]ll purchases of any materials or supplies exceeding the sum of sixty thousand dollars to be paid out of public funds shall be advertised and let by contract to the lowest responsible bidder who has bid according to the specifications as advertised, and no such purchase shall be made except as provided in this Part.” Contracts for the purchase of materials and supplies costing $30,000 or more, but less than $60,000, must

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be made by obtaining no fewer than three telephone, facsimile, email, or any printable electronic quotations. La. R.S. 38:2212.1(A)(1)(b). For purchases of less than $30,000, there is no prescribed procurement method.

However, for the purposes of your request, the provisions of the Public Bid Law governing the purchase of materials and supplies are only applicable to those purchases made strictly separate from a public works contract. La. R.S. 38:2212(V) provides that “[u]nder no circumstances shall there be a division or separation of any public work project into small projects which division or separation would have the effect of avoiding the requirement that public work be advertised and let by contract to the lowest responsible and responsive bidder as provided in this Section.” There does not exist a scenario in which the District could provide a certain amount of “materials and supplies” through the regular procurement method in an attempt to drop the total project cost under the contract limit threshold to avoid the requirements of the Public Bid Law for public works contracts.

Hence, even if the District contributes an amount less than $60,000.00 strictly for materials and supplies, if it is for the contribution for the work (the erection, construction, alteration, improvement, or repair) of the building owned by the District, then it is under the umbrella of a public work instead of a purchase of materials or supplies.

Considering the foregoing, it is the opinion of this office that the Louisiana Public Bid Law applies regardless of the proportion of funds contributed by a public entity as long as the project is in excess of the contract limit and public funds were used in some manner, way, or form. Additionally, La. R.S. 38:22 12(V) prohibits the separation of a project in such a way as to avoid the contract threshold limits for the application of the Public Bid Law to a public work contract.

We hope that this opinion has adequately addressed the legal issues you have raised. If our office can be of any further assistance, please do not hesitate to contact us.

Yours very truly,

LIZ MURRILL
ATTORNEY GENERAL

BY:

Ch lseaZac ry
Assistant Attorney General

LM/CZ