Contracting for Public Works

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.