Can the NC Department of Transportation award engineering and surveying contracts to the lowest bidder instead of selecting based on qualifications?
Plain-English summary
Len Hill, on behalf of the Board of Transportation, asked whether NCDOT could simply pick the cheapest engineering or surveying firm on a road project, rather than going through the longer qualifications-based selection process the General Assembly had codified in the Mini Brooks Act. The Board was apparently feeling pressure to save money on professional fees on both federal and state-funded highway work.
Senior Deputy AG Reginald Watkins and Special Deputies Robert Crawford and Elizabeth McKay split the answer along the federal/state line.
Federal-aid projects. The federal Brooks Architect-Engineers Act, 40 U.S.C. § 542, declared it the policy of the federal government that architecture and engineering contracts be publicly announced, negotiated on the basis of demonstrated competence, and priced at fair and reasonable rates. The Act covered surveying by definition under 40 U.S.C. § 541(3)(C). For federal-aid highway projects specifically, 23 U.S.C. § 112(b)(2)(A) required state DOTs to use the same QBS framework (or equivalent state qualifications-based procedures) for program management, construction management, feasibility studies, preliminary engineering, design, engineering, surveying, mapping, and architectural-related services. Together, these federal statutes left no room for low-bid procurement on federal-aid projects. NCDOT had to use QBS.
State-funded projects. North Carolina had its own Mini Brooks Act at G.S. § 143-64.31, which declared the State's policy to be QBS for architectural, engineering, and surveying services, and laid out the negotiate-with-the-best-qualified-firm-first procedure. The statute had a built-in exception at § 143-64.32 letting units of local government or NCDOT exempt particular projects in writing when the estimated professional fee was under $30,000, or for other particular projects where the agency stated reasons. The AG signaled that this exception was narrow and risky to overuse: "this exception should be used sparingly to assure that the exception is not invoked so frequently as to give the appearance that the exception is used to avoid the general rule."
NCDOT's standalone authority. Section 136-28.1(f) was a separate path. It allowed NCDOT, notwithstanding other procurement law, to solicit proposals "under rules and regulations adopted by the Department of Transportation" for highway engineering services and other specialized work. The Board could thus, in theory, switch some highway contracting to a low-bid framework, but only after adopting formal rules and regulations governing the solicitation and award. As of the date of the opinion, NCDOT had not adopted any such rules. Until it did, the practical answer remained QBS.
The licensing-board curveball. The AG flagged a proposed revision to the Standards of Professional Conduct for Engineers and Surveyors (21 N.C.A.C. 56.0701(f)(3)) that was expected to take effect in the summer of 2000. The new rule would forbid a licensed engineer or surveyor from soliciting or accepting work on anything other than a qualifications basis, and would require licensees to comply with G.S. § 143-64.31. The practical effect: even if NCDOT adopted rules under § 136-28.1(f) authorizing competitive bidding, no licensed engineer or surveyor would be able to submit a competitive bid without violating professional conduct standards. The licensing board was, in effect, closing the back door.
The conclusion paired all of these strands. Federal-aid work was QBS only. State-funded work was QBS by default, with limited project-by-project exemptions, and any broader switch to competitive bidding required new NCDOT rules. The licensing-board rule, once effective, would likely make competitive bidding a non-starter regardless.
Currency note
This opinion was issued in 2000. 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. The federal Brooks Act has been recodified at 40 U.S.C. §§ 1101 to 1104 (the post-2002 codification); 23 U.S.C. § 112 has been amended multiple times since 2000; and the Mini Brooks Act and NCDOT's rule under § 136-28.1(f) have evolved. The Board of Engineers and Surveyors' professional conduct rules have also been revised. Anyone preparing a current procurement plan or bid should check the present text of those statutes, regulations, and rules of professional conduct.
Background and statutory framework
Why QBS exists. Qualifications-based selection grew out of mid-20th-century concerns that low-bid competition for professional services led to underdesign, accidents, and litigation. Congress codified the QBS approach for federal procurement in the 1972 Brooks Act, and most states followed with mini-Brooks statutes. The idea: pick the best-qualified firm based on demonstrated competence, then negotiate price, with a fallback to the next firm if negotiations failed. The framework was meant to keep the architecture, engineering, and surveying professions accountable to design quality rather than to the lowest underbid.
Federal Brooks Act coverage. 40 U.S.C. § 542 stated the federal QBS policy in policy-declaratory form, and 40 U.S.C. § 541(3)(C) defined the covered services to include surveying alongside architecture and engineering. The QBS framework applied to direct federal procurement.
Federal-aid highway QBS. When federal dollars flowed to a state for highway work, 23 U.S.C. § 112(b)(2)(A) extended the QBS requirement to state contracting. The list of covered services was broader than the bare Brooks Act list and explicitly included program management, construction management, feasibility studies, preliminary engineering, design, surveying, mapping, and architectural-related services. The state had to follow the federal QBS framework or "equivalent State qualifications-based requirements." North Carolina's Mini Brooks Act qualified as the equivalent.
The Mini Brooks Act. G.S. § 143-64.31 announced North Carolina's QBS policy for state and political-subdivision contracting. Agencies had to publicly announce service requirements, select firms based on demonstrated competence "without regard to fee other than unit price information at this stage," negotiate fee with the best-qualified firm, and if negotiations failed, move to the next-best firm. The "exempt particular projects" carveout in § 143-64.32 gave local governments and NCDOT a narrow written-exemption path for fees under $30,000 or for stated-reason exemptions.
NCDOT's § 136-28.1(f) authority. This separate transportation-only provision let NCDOT, "notwithstanding any other provision of law," solicit proposals under its own adopted rules and regulations for highway engineering services. The provision explicitly said the goal was to "promote engineering and design quality and ensure maximum competition by professional firms of all sizes." NCDOT could set fiscal guidelines and limits. But the legislative grant was conditioned on rules and regulations being in place. Without those rules, the underlying QBS framework still controlled.
Proposed licensing-board rule. The Board of Examiners for Engineers and Surveyors had proposed adding 21 N.C.A.C. 56.0701(f)(3), a professional-conduct rule that barred fee-bidding on public projects and required compliance with the Mini Brooks Act. The rule was on track to take effect that summer unless the General Assembly disapproved it. The AG noted that, in practice, the rule would make competitive bidding impossible because no licensed professional could submit a bid without violating the conduct standard.
Common questions
Q: Could NCDOT split a federal-aid project into pieces under $30,000 to dodge the Mini Brooks Act?
A: The opinion did not address project splitting, but the under-$30,000 exemption was in the state statute, not the federal one. Federal-aid projects were governed by federal QBS regardless of fee size, and splitting a federal-aid project to evade the federal requirement would not work.
Q: What was the difference between competitive bidding and competitive solicitation under § 136-28.1(f)?
A: The AG read § 136-28.1(f) as permitting a competitive solicitation framework if NCDOT adopted rules for it. The statute spoke of "soliciting proposals" rather than receiving sealed low bids. NCDOT had room to design something other than pure low-bid procurement under that authority, but it still needed rules first.
Q: What if a local government adopted its own QBS exemption framework?
A: The Mini Brooks Act's exemption procedure in § 143-64.32 was the statutory path. Local governments could exempt particular projects in writing under either the under-$30,000 trigger or the other-particular-projects trigger, but had to state reasons. They could not adopt a wholesale local rule replacing QBS with competitive bidding.
Q: Did the AG conclude that competitive bidding for engineering was bad policy?
A: The opinion stayed neutral on policy. The AG observed the statutory and regulatory landscape and made clear that, until the General Assembly changed the law or NCDOT adopted rules under § 136-28.1(f), QBS was the required default for state-funded work, and QBS was mandatory for federal-aid work.
Citations from the opinion
- 40 U.S.C. § 541(3)(C)
- 40 U.S.C. § 542
- 23 U.S.C. § 112(b)(2)(A)
- N.C. Gen. Stat. § 143-64.31
- N.C. Gen. Stat. § 143-64.32
- N.C. Gen. Stat. § 136-28.1(f)
- 21 N.C.A.C. 56.0701(f)(3) (proposed)
- October 1996 NCDOT Policies and Procedures for Major Professional or Specialized Services Contracts
Source
Original opinion text
Re: Advisory Opinion: Competitive Bidding of Professional Services Contracts
Dear Mr. Hill:
You have requested, on behalf of the Board of Transportation, an Advisory Opinion on the legality of the North Carolina Department of Transportation (NCDOT) implementing competitive or "low bid" bidding of professional services contracts on both federal and state funded projects. The question has specifically arisen with regard to engineering and surveying work by private firms on NCDOT construction projects. Based upon our review, we believe that professional services on federal-aid projects may not be awarded under a competitive bid situation but must be awarded based upon a qualifications review. For state-funded projects, we believe that in limited circumstances these professional services contracts may be awarded on a competitive basis; however, if proposed amendments to the professional responsibility rules for surveyors and engineers become effective, these rules may prohibit bidding on such contracts.
ANALYSIS
I. Federal-Aid Projects.
The provisions of the United States Code sometimes referred to as the "Brooks Architect-Engineers Act" provide in part that:
The Congress hereby declares it to be the policy of the Federal Government to publicly announce all requirements for architectural and engineering services, and to negotiate contracts for architectural and engineering services on the basis of demonstrated competence and qualification for the type of professional services required and at fair and reasonable prices.
40 U.S.C. § 542. The Act applies to services such as architecture or engineering and includes surveying. 40 U.S.C. § 541(3)(C). Similar statutes apply to work done for State transportation departments on federal-aid highway projects:
(A) General rule. Each contract for program management, construction management, feasibility studies, preliminary engineering, design, engineering, surveying, mapping, or architectural related services with respect to a project subject to the provisions of subsection (a) of this section shall be awarded in the same manner as a contract for architectural and engineering services is negotiated under title IX of the Federal Property and Administrative Services Act of 1949 [40 USCS §§ 541 et seq.] or equivalent State qualifications-based requirements.
23 U.S.C. § 112(b)(2)(A). Under these provisions, for federal-aid projects, engineering and surveying contracts must be awarded on a "qualifications" basis rather than on a "low-bid" basis.
II. State-Funded Projects.
For state-funded projects, the General Assembly has enacted what is sometimes referred to as the "State Brooks Act" or the "Mini Brooks Act". That Act provides:
It is the public policy of this State and all public subdivisions and Local Governmental Units thereof, except in cases of special emergency involving the health and safety of the people or their property, to announce all requirements for architectural, engineering, and surveying services, to select firms qualified to provide such services on the basis of demonstrated competence and qualification for the type of professional services required without regard to fee other than unit price information at this stage, and thereafter to negotiate a contract for architectural, engineering, or surveying services at a fair and reasonable fee with the best qualified firm. If a contract cannot be negotiated with the best qualified firm, negotiations with that firm shall be terminated and initiated with the next best qualified firm.
N.C. Gen. Stat. § 143-64.31. In other words, this provision sets forth a "qualifications" based method of award of engineering and surveying contracts. An exception to the statute provides:
Units of local government or the North Carolina Department of Transportation may in writing exempt particular projects from the provisions of this Article in the case of:
(a) Proposed projects where an estimated professional fee is in an amount less than thirty thousand dollars ($30,000), or
(b) Other particular projects exempted in the sole discretion of the Department of Transportation or the unit of local government, stating the reasons therefor and the circumstances attendant thereto.
N.C. Gen. Stat. § 143-64.32. It is our belief that this exception should be used sparingly to assure that the exception is not invoked so frequently as to give the appearance that the exception is used to avoid the general rule. Under this section, NCDOT could award a limited number of projects on a "low bid" basis with sufficient reason stated. (Please note that "low bid" contracts awarded under this exception would be awarded contrary to the requirements set forth in the October, 1996 North Carolina Department of Transportation Policies and Procedures for Major Professional or Specialized Services Contracts.)
The General Assembly has also provided that:
(f) Notwithstanding any other provision of law, the Department of Transportation may solicit proposals under rules and regulations adopted by the Department of Transportation for all contracts for professional engineering services and other kinds of professional or specialized services necessary in connection with highway construction, maintenance, or repair. In order to promote engineering and design quality and ensure maximum competition by professional firms of all sizes, the Department may establish fiscal guidelines and limitations necessary to promote cost-efficiencies in overhead, salary, and expense reimbursement rates. The right to reject any and all proposals is reserved to the Board of Transportation.
N.C. Gen. Stat. § 136-28.1(f). Under this section, notwithstanding the provisions of the Mini Brooks Act in Chapter 143, NCDOT may let contracts on a competitive basis for professional engineering services in accordance with rules and regulations adopted by NCDOT; it is not required to do so. At this time, NCDOT has not adopted rules and regulations governing solicitation and award of engineering and surveying contracts on a low bid basis. If the Board of Transportation should determine that award on a "low bid" or "competitive" basis is appropriate as a general policy, it should first adopt rules and regulations to govern the solicitation and award.
One matter that may be of interest to you as the Board and NCDOT consider whether such contracts are appropriate is a proposed revision of the Standards of Professional Conduct for Engineers and Surveyors. Expected to become effective this summer unless the General Assembly specifically rejects the proposed amendment, this new rule will provide that a licensee "shall solicit or accept work only on the basis of qualifications and . . . [s]hall, with regard to fee bidding on public projects, comply with the provisions of G.S. 143-64.31, and shall not knowingly cooperate in a violation of any provision of G.S. 143-64.31." Proposed 21 N.C.A.C. 56.0701(f)(3). It appears from this provision that the licensing board for engineers and surveyors will take the position that its licensed engineers and surveyors may not bid on a competitive basis but only on a qualifications basis. In that case, no licensed engineers or surveyors would submit bids for a competitively bid project.
CONCLUSION
We are of the opinion that professional services on federal-aid projects may not be awarded under a competitive bid situation but must be awarded based upon a qualifications review. With respect to state-funded projects, we are of the opinion that in limited circumstances these professional services contracts may be awarded on a competitive basis at the present time. However, before these contracts are awarded as a routine matter, the Department should adopt rules and regulations governing their award.
Please advise if we can be of any further assistance.
Signed by:
Reginald L. Watkins, Senior Deputy Attorney General, Civil Division
Robert O. Crawford, III, Special Deputy Attorney General, Transportation Section
Elizabeth Leonard McKay, Special Deputy Attorney General, Transportation Section