How to Hire a Township Contractor/Consultant

Large or small, rural or urban, every township needs the services of professional consultants at one time or another. For example, all townships are required to have audits and most townships will likely need legal counsel at some time. Townships involved in planning and zoning often contract with a professional planner, and townships may need architectural or engineering services for planning, building or repairing community improvements and structures. Although elected township officials have the ultimate responsibility for determining their township’s programs and services, it is often appropriate for them to consult with professionals whose specialized knowledge will best serve the community’s interests.

Independent contractor or employee?
When a township hires an independent contractor, the arrangement should be documented in a written contract or letter of agreement—a contract. In some cases, even if it is an employee position, an employment contract may be used.

The contract should specify the term of the agreement, a description of services, whether the contract is for employment or contracted services, the method and schedule of payment, documentation of services provided, a method of resolving disputes, and which township officials are authorized to direct the work or assign tasks to the consultant. The contract should also specify periodic performance reviews of the consultant’s service. It should also define procedures for amending the contract and identify what would negate the contract or allow the township to withdraw.

Contracts With "Public Officers"
The township should limit the term of the agreement to the current board’s four-year term of office. Although Michigan statutes do not specify this, case law has established the principle that a township board cannot create a personal services or employment contract that binds a future board with respect to hiring “public officers,” such as an assessor, attorney, township manager, building inspector, zoning administrator, or fire and police chiefs. (See City of Hazel Park v Potter, 169 Mich. App. 714, 1988) Michigan case law has developed a three-part test to determine who is a “public officer” for contractual purposes.

To be considered a public officer, a position must have:

Competitive Bids Not Required
Attorney General Opinion 5599 of 1979 states that, in the absence of a statutory requirement, a municipality is not required to seek competitive bids before awarding a construction contract. However, municipal ordinances may require the use of competitive bidding procedures.

If it uses competitive bidding, a township board is not required to select the lowest bidder. Township boards may use a "qualifications based selection" (QBS) approach to selecting consultants, including architects and engineers. QBS is a proven process in which a design professional is selected based on experience in an ability, not price, although price is an important factor in the process. The QBS Coalition was formed in response to Michigan House Concurrent Resolution No. 206 of June 1987, which urges state and local governments to select services of design professionals based on qualifications. The federal government has been selecting consultants this way since the 1972 enactment of Public Law 92-582, better known as the Brooks Selection Bill.

Statutory Requirements

Public Act 170 of 1933, the Bidders on Public Works Act, MCL 123.501, et seq., authorizes a township to require any person proposing to bid on the construction, maintenance and/or repair of public works other than public buildings to submit a sworn statement at least 10 days before bids are opened setting forth his or her qualifications to satisfactorily carry out the work to be performed within the time specified for the project. The act allows the township to judge the bidder's qualifications based on his or her past performance on work of a similar nature, financial resources, and the construction equipment and facilities proposed for use on the project. Any person determined not to be a suitable person to bid on the proposed work must be notified of that determination in writing five days before bids are opened.

Under MCL 339.2011, a township may not engage in a public works project costing $15,000 or more, unless the plans and specifications for the project are prepared by a licensed architect or licensed professional engineer, the land is surveyed by a licensed professional surveyor and the work is supervised by either a licensed professional architect or engineer.

Under MCL 129.201, if the public works project exceeds $50,000, the principal contractor is required to furnish both a performance bond and a payment bond to the township for the completion of the project in accordance with the plans and specifications and for the payment of all subcontractors, laborers and material suppliers.