Attorney General of Louisiana — Opinion
June 8, 2010.
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90 — A — 1 PUBLIC FUNDS CONTRACTS
La.R.S. 33:2212, et. seq.
Slidell Memorial Hospital’s proposed renovation of an existing room to accommodate Positron Emission Tomography-Computed Tomography (PET-CT) equipment is properly classified as a public works project and thus must comply with the Louisiana Public Bid Law.
Mr. Donald N. Kearns Slidell Memorial Hospital
1001 Gause Boulevard Slidell, LA 70458-2987
JAMES D. “BUDDY” CALDWELL, Attorney General.
Dear Mr. Kearns:
Your request for an Attorney General’s Opinion has been assigned to me for research and reply. On behalf of the St. Tammany Parish Hospital Service District No. 2 doing business as Slidell Memorial Hospital (“Slidell”), you have asked for our opinion on matters related to Louisiana’s Public Bid Law, La.Rev.Stat. 38:2211, et. seq.
According to your request, Slidell owns and operates a diagnostic imaging center known as “MD Imaging.” Slidell proposes to expand the center with the construction of a new wing to accommodate mammography and ultrasound equipment. This new wing will be constructed via the public bid process. Your request goes on to indicate that the existing mammography and ultrasound equipment will be relocated to the new wing, while the room which currently houses the mammography and ultrasound services will be renovated and refitted to accommodate Positron Emission Tomography-Computed Tomography (PET-CT) equipment. Renovations costs are estimated to be $425,000, exclusive of equipment.
According to your request, complex and unique specifications and engineering will be required to renovate and refit the room. Further, specialized shielding must be incorporated into the floor, walls, and ceiling to contain the electromagnetic field generated by the PET-CT equipment. Due to the complexity of the specifications, and the use of proprietary systems and criteria, among other things, Slidell would like to engage a singe contractor capable of completing the project properly and safely. To that end, you ask for our opinion as to whether Slidell may directly engage a contractor to design, renovate, and refit the PET-CT room and install PET-CT equipment without engaging in the public bid process.
In general terms, public entities are prohibited from directly engaging a contractor to design and renovate a building. Commonly referred to as the design-build method, such a practice is prohibited by La.Rev.Stat. 38:2225.2 which provides the following:
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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 transfer of title to the state or local entity.
As a public entity, as defined in La.R.S. 38:2211(A)(11), Slidell is subject to the provisions of the Louisiana Public Bid Law See La.R.S. 38:2211 et seq. 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. 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.Rev.Stat. 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.
Based upon the plain language of La.Rev.Stat. 38:2211, it is our opinion that the proposed renovation of the PET-CT room falls under the purview of Louisiana’s Public Bid Law. As such, the project must be competitively bid. Louisiana’s public bid law mandates that Slidell develop the plans and specifications for the project and then advertise the project and accept sealed bids. Slidell is free to require whatever licenses and/or industry certifications it deems are necessary to ensure the project is completed properly and safely. Further, Slidell has the ability to develop its plans and specifications in such a manner to ensure the building is constructed to fit its needs. Still further, all bids submitted must be evaluated to determine bidder responsiveness and responsibility, thereby giving Slidell another opportunity to ensure that the low bidder on the project is capable of completing the project to the Slidell’s specifications.
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,
JAMES D. “BUDDY” CALDWELL ATTORNEY GENERAL
BY:__________________________ MICHAEL J. VALLAN Assistant Attorney General
JDC/MJV/crt