Can the NC Department of Transportation award engineering and surveying contracts to the lowest bidder instead of selecting based on qualifications?

Plain-English summary

The Board of Transportation asked whether the North Carolina Department of Transportation could award engineering and surveying contracts through competitive or low-bid procurement on federal and state-funded projects. The Attorney General gave different answers for the two funding sources.

For federal-aid projects, the opinion says engineering and surveying contracts must be awarded on qualifications rather than low bids. It cites the federal Brooks Architect-Engineers Act and 23 U.S.C. § 112(b)(2)(A), which requires the federal or equivalent state qualifications-based approach for covered federal-aid highway services.

For state-funded projects, G.S. § 143-64.31 made qualifications-based selection the general policy. G.S. § 143-64.32 let NCDOT or a local government exempt a particular project in writing if the estimated professional fee was under $30,000, or exempt another particular project while stating its reasons and circumstances. The Attorney General said NCDOT could award a limited number of projects by low bid with sufficient reasons, but should use that exception sparingly so it did not appear to evade the general rule.

NCDOT had another possible route for highway engineering work. G.S. § 136-28.1(f) allowed it to solicit proposals on a competitive basis under rules and regulations it adopted. As of the opinion, NCDOT had adopted no rules for low-bid solicitation and award of engineering and surveying contracts. The opinion said it should adopt governing rules first if it wanted competitive awards as a general policy.

The opinion also discussed a proposed professional-conduct rule for licensed engineers and surveyors. It expected the licensing board to read that rule as barring competitive fee bidding if the proposal took effect. It did not say the proposed rule was already in force. For current procurement, check both the project funding and the current statutes and professional rules.

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.

Check the present federal and state procurement rules before structuring a contract.

Common questions

Q: Could NCDOT use low bids for engineering on a federal-aid highway project?
A: The opinion says no. It concluded those engineering and surveying contracts required selection based on qualifications rather than low bids.

Q: Could NCDOT competitively award a state-funded engineering contract?
A: The opinion says yes in limited circumstances. G.S. § 143-64.32 allowed written exemptions for particular projects under the stated conditions, and the Attorney General said the exception should be used sparingly.

Q: Could NCDOT make competitive awards its regular approach without new rules?
A: The opinion says it should first adopt rules and regulations under G.S. § 136-28.1(f) to govern solicitation and award before using competitive awards as a general policy.

Q: Did the professional-conduct rule already prohibit bids?
A: The opinion discussed a proposed rule expected to take effect unless rejected. It predicted how the licensing board might apply that rule; it did not treat the proposal as a rule already in force.

Background and statutory framework

The opinion compares a federal qualifications requirement for federal-aid highway services with North Carolina's general qualifications policy for state-funded professional services. It then identifies two state-law paths for limited competitive awards: a written exemption for a particular project under G.S. § 143-64.32 and NCDOT solicitation under adopted rules pursuant to G.S. § 136-28.1(f). The proposed professional-conduct rule was a further possible limit at the time of the request.

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

• Landing page: https://ncdoj.gov/opinions/competitive-bidding-of-professional-services-contracts/

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