Louisiana Public Bid Law – Main Highlights

 

2211. Definitions

 

A. As used in this Chapter unless the context clearly indicates otherwise, the following
terms shall mean:

 

(1) “Bidding documents” means the bid notice, plans and specifications, bidding form,
bidding instructions, addenda, special provisions, and all other written instruments
prepared by or on behalf of a public entity for use by prospective bidders on a public
contract.

(2) “Change order” means an alteration, deviation, addition, or omission as to a preexisting
public work contract.

(3) “Change order outside the scope of the contract” means a change order which alters
the nature of the thing to be constructed or which is not an integral part of the
project objective.

(4) “Change order within the scope of the contract” means a change order which does
not alter the nature of the thing to be constructed and which is an integral part
of the project objective.

(5) “Contractor” means any person or other legal entity who enters into a public contract.

(6) An “emergency” means an unforeseen mischance bringing with it destruction or injury
of life or property or the imminent threat of such destruction or injury or as the
result of an order from any judicial body to take any immediate action which requires
construction or repairs absent compliance with the formalities of this Part, where
the mischance or court order will not admit of the delay incident to advertising as
provided in this Part. In regard to a municipally owned public utility, an emergency
shall be deemed to exist and the public entity may negotiate as provided by R.S. 38:2212(D)
for the purchase of fuel for the generation of its electric power where the public
entity has first advertised for bids as provided by this Part but has failed to receive
more than one bid.

(8) “Negotiate” means the process of making purchases and entering into contracts
without formal advertising and public bidding with the intention of obtaining the
best price and terms possible under the circumstances.

(9) “Public contract” or “contract” means any contract awarded by any public entity
for the making of any public works or for the purchase of any materials or supplies.

(10) “Public entity” means and includes the state of Louisiana, or any agency, board,
commission, department, or public corporation of the state, created by the constitution
or statute or pursuant thereto, or any political subdivision of the state, including
but not limited to any political subdivision as defined in Article VI Section 44 of
the Constitution of Louisiana, and any public housing authority, public school board,
or any public officer whether or not an officer of a public corporation or political
subdivision. “Public entity” shall not include a public body or officer where the
particular transaction of the public body or officer is governed by the provisions
of the model procurement code.

(11) “Public work” means the erection, construction, alteration, improvement, or repair
of any public facility or immovable property owned, used, or leased by a public entity.

(12) “Licensed design professional” means the architect, landscape architect, or engineer
who shall have the primary responsibility for the total design services performed
in connection with a public works project. Such professional shall be licensed as
appropriate and shall be registered under the laws of the state of Louisiana.

 

§2212. Advertisement and letting to lowest responsible bidder; public work; participation
in mentor-protégé program

 

A.(1)(a) All public work exceeding the contract limit as defined in this Section,
including labor and materials, to be done by a public entity shall be advertised and
let by contract to the lowest responsible bidder who had bid according to the contract,
plans, and specifications as advertised, and no such public work shall be done except
as provided in this Part.

(b) The provisions and requirements of this Section, those stated in the advertisement
for bids, and those required on the bid form shall not be waived by any public entity.

(ii) Except as provided in Subparagraph (f) of this Paragraph, each bid shall be either
hand delivered by the bidder or his agent in which instance the deliverer shall be
handed a written receipt, or such bid shall be sent by registered or certified mail
with a return receipt requested. However, the requirement that all bids be sent by
registered or certified mail shall not apply to bids received by municipal and parochial
governing authorities. No public entity shall accept or take any bids, including receiving
any hand delivered bids, on days which are recognized as holidays by the United States
Postal Service. The Department of Transportation and Development and facility planning
and control section under the division of administration shall keep on file a list
of all states which have passed a bid preference law.

(d) The term “contract limit” as used herein shall be equal to the sum of one hundred
fifty thousand dollars per project, including labor, materials, and equipment as per
the rates in the latest edition of the Associated Equipment Dealers Rental Rate Book
and administrative overhead not to exceed fifteen percent; however:

e) Each public entity advertising and letting for bid a public works contract under
the provisions of this Section shall furnish all prime bidders who request bid documents
and who are properly licensed by the Louisiana State Licensing Board for Contractors
with at least one set of complete bid documents. The public entity may require a deposit
on the bid documents; however, the total cost of the deposit, including handling fees
and other costs shall not exceed twice the actual cost of reproduction. Deposits on
the first set of documents furnished bona fide prime bidders will be fully refunded
upon return of the documents no later than ten days after receipt of bids. On other
sets of documents furnished to bidders the deposit less actual cost of reproduction,
will be refunded upon return of the documents no later than ten days after receipt
of bids. Where the public entity, itself, prepares and distributes the contract documents,
the public entity may, in lieu of a deposit, charge a fee for the documents, which
shall not exceed the actual cost of reproduction.

 

(3)(a) The advertisement required by this Section for any contract for public works
shall be published once a week for three different weeks in a newspaper in the locality,
and the first advertisement shall appear at least twenty-five days before the opening
of bids. In addition to the newspaper advertisement, a public entity may also publish
an advertisement by electronic media available to the general public.

c) The first publication of the advertisement shall not occur on a Saturday, Sunday,
or legal holiday. Plans and specifications shall be available to bidders on the day
of the first advertisement and shall be available until twenty-four hours before the
bid opening date.

(d) When a design professional or public entity mandates attendance by bidders at
pre-bid conferences as a prerequisite to bid, the date, place, and time of the pre-bid
conference shall be stated in the first advertisement notice.

(e) Any proposal shall include no more than three alternates. An alternate bid by
any name is still an alternate. Alternates, if accepted, shall be accepted in the
order in which they are listed on the bid form. Determination of the low bidder shall
be on the basis of the sum of the base bid and any alternates accepted. However, the
public entity shall reserve the right to accept alternates in any order which does
not affect determination of the low bidder.

 

(4) All public work contracts shall contain provisions authorizing the issuance of
change orders within the scope of the contract.

(5) All change orders shall be in writing.

(6) Any change order outside the scope of the contract in excess of the contract limit
as defined herein shall be let out for public bid as provided by this Part.

(7) Any change order pertaining to public work, not required by this Part to be put
out for public bid, shall either be negotiated in the best interest of the public
entity or let out for public bid as provided by this Part. Where the change order
is negotiated, the public entity shall require that said change order be fully documented
and itemized as to costs, including material quantities, material costs, taxes, insurance,
employee benefits, other related costs, profit and overhead. Where certain unit prices
are contained in the initial contract, no deviations shall be allowed in computing
negotiated change order costs.

 

B. Those contracts let by any public entity for public works estimated to cost in
excess of the contract limit shall be advertised and let by contract to the lowest
responsible bidder. Public works which are estimated to cost less than the contract
limit may be undertaken by the public entity with its own employees. Nothing contained
herein shall be construed as reducing those powers established by law in Chapter 3-B
of Title 3 of the Louisiana Revised Statutes of 1950.

 

C.(1) Except as provided by Paragraph (2) of Subsection C of this Section, the public
entity may, through the issuance of an addendum, extend the bid period for up to thirty
days, without the requirement of readvertising as provided by Subsection A of this
Section.

(2) No public entity shall issue or cause to be issued any addenda modifying plans
and specifications within a period of seventy-two hours prior to the advertised time
for the opening of bids, excluding Saturdays, Sundays, and any other legal holidays;
however, if the necessity arises to issue an addendum modifying plans and specifications
within the seventy-two-hour period prior to the advertised time for the opening of
bids, then the opening of bids shall be extended for at least seven days, but not
to exceed twenty-one days, without the requirement of readvertising as provided by
Subsection A of this Section. The addendum shall state the revised time and date for
the opening of bids.

 

D.(1) This Section shall not apply in cases of extreme public emergency where such
emergency has been certified to by the public entity and notice of such public emergency
shall, within ten days thereof, be published in the official journal of the public
entity proposing or declaring such public emergency.

 

(2) Limitations. (a) Every contract negotiated by a public entity under the authority
of this Subsection shall be supported by a written determination and findings by the
public entity justifying use of the authority. (b) When contract action under this
authority is taken pursuant to telephone or other oral offers, a written confirmation
of the accepted offer shall be obtained and made a part of the contract case file.
In addition, whenever contract action is taken as authorized by this Subsection, a
record shall be established by the public entity which shall contain, as a minimum,
the following information with respect to each offer: a description of the work to
be performed, the name and address of each offeror quoting, and the performance time
and terms of each offer. If quotations lower than the accepted quotation are received,
the reasons for their rejection shall be recorded and made a part of the contract
case file. Such records shall be retained for a minimum of six years following the
purchase or completion of the public work.

 

H. Under no circumstances shall there be a division or separation of any public work
project into smaller projects which division or separation would have the effect of
avoiding the requirement that public work be advertised and let by contract to the
lowest responsible bidder as provided in this Section.

 

J. If the public entity letting the contract proposes to disqualify any bidder, on
grounds that such bidder is not a “responsible bidder” such public entity shall:

 

(1) Give written notice of the proposed disqualification to such bidder and include
in the written notice all reasons for the proposed disqualification; and

(2) Give such bidder, who is proposed to be disqualified the opportunity to be heard
at an informal hearing at which such bidder is afforded the opportunity to refute
the reasons for the disqualification.

 

2214. Designation of time and place for opening bids; right to reject bids

 

A. The public entity desiring to let a public contract shall, in its resolution providing
for the contract or purchase and for the advertisement for bids, designate the time
and place that the bids will be received and shall at that time and place publicly
open the bids and read them aloud. However, no public entity shall accept or take
any bids, including receiving any hand delivered bids, on days which are recognized
as holidays by the United States Postal Service.

 

B. The public entity may reject any and all bids for just cause. Just cause for the
purpose of the construction of public works is defined, but is not limited to the
following circumstances:

 

(1) The public entity’s unavailability of funds sufficient for the construction of
the proposed public work.

(2) The failure of any bidder to submit a bid within an established threshold of the
preconstruction estimates for that public work, as part of the bid specifications.

(3) A substantial change by the public entity prior to the award in the scope or design
of the proposed public work.

(4) A determination by the public entity not to build the proposed public work within
twelve months of the date for the public opening and reading of bids.

(5) The disqualification by the public entity of all bidders.

 

C. Bids containing patently obvious, unintentional, and substantial mechanical, clerical,
or mathematical errors, or errors of unintentional omission of a substantial quantity
of work, labor, material, or services made directly in the compilation of the bid,
may be withdrawn by the contractor if clear and convincing sworn, written evidence
of such errors is furnished to the public entity within forty-eight hours of the bid
opening excluding Saturdays, Sundays, and legal holidays. Such errors must be clearly
shown by objective evidence drawn from inspection of the original work papers, documents,
or materials used in the preparation of the bid sought to be withdrawn. If the public
entity determines that the error is a patently obvious mechanical, clerical, or mathematical
error, or unintentional omission of a substantial quantity of work, labor, material,
or services, as opposed to a judgment error, and that the bid was submitted in good
faith it shall accept the withdrawal and return the bid security to the contractor.

 

D.(1) A contractor who attempts to withdraw a bid under the provisions of this Section
shall not be allowed to resubmit a bid on the project. If the bid withdrawn is the
lowest bid, the next lowest bid may be accepted. If all bids are rejected no withdrawal
of the bid which would result in the award of the contract on another bid of the same
bidder, his partner, or to a corporation or business venture owned by or in which
he has an interest shall be permitted. No bidder who is permitted to withdraw a bid
shall supply any material or labor to, or perform any subcontract work agreement for,
any person to whom a contract or subcontract is awarded in the performance of the
contract for which the withdrawn bid was submitted.

 

(2) Whoever violates the provisions of the foregoing sentence shall be imprisoned
for not more than six months, or fined not more than two thousand dollars, or both.

 

2215. Time period for holding bids; issuance of work orders to commence work; exceptions

 

A. The state or any state agency upon receipt of bids for the undertaking of any public
works contract shall act within thirty calendar days of such receipt to award said
contract to the lowest responsible bidder or reject all bids. A political subdivision
upon receipt of bids for the undertaking of any public works contract shall act within
forty-five calendar days of such receipt to award said contract to the lowest responsible
bidder or reject all bids. However, the public entity and the lowest responsible bidder,
by mutually written consent, may agree to extend the deadline for award by one or
more extensions of thirty calendar days.

 

B. The provisions of this Section shall not be applicable when the contract is to
be financed by bonds which are required to be sold after receipt of bids on the contract,
or when the contract is to be financed in whole or in part by federal or other funds
which will not be readily available at the time bids are received, or on contracts
which require a poll of the legislature of Louisiana before funds are available to
fund the contract. In the event the time limit stipulated herein is not applicable
because of one of the exceptions outlined above, this fact shall be mentioned in the
specifications for the project and in the official advertisement for bids required
in accordance with R.S. 38:2212.

 

C. Upon the execution of the contract, the public entity, within thirty days thereafter,
shall issue to the contractor a notice to proceed with the project. However, upon
mutual consent by both parties, the notice to proceed may be extended.

 

D. These provisions shall not be subject to waiver.

 

2216. Written contract and bond

 

A.(1) When any bid is accepted for the construction or doing of any public works,
a written contract shall be entered into by the successful bidder and the public entity
letting the contract, and the party to whom the contract is awarded shall furnish
good and solvent bond in an amount not less than one- half of the amount of the contract,
for the faithful performance of his duties.

 

2218. Evidence of good faith; countersigning

 

A. The public entity advertising for bids for work shall require the bidders to attach
a certified check, cashier’s check, or bid bond for not more than five percent of
the contract price of work to be done, as an evidence of good faith of the bidder.

 

C. If bid bond is used, it shall be written by a surety or insurance company currently
on the U.S. Department of the Treasury Financial Management Service list of approved
bonding companies which is published annually in the Federal Register, or by a Louisiana
domiciled insurance company with at least an A- rating in the latest printing of the
A.M. Best’s Key Rating Guide to write individual bonds up to ten percent of policyholders’
surplus as shown in the A.M. Best’s Key Rating Guide or by an insurance company in
good standing licensed to write bid bonds which is either domiciled in Louisiana or
owned by Louisiana residents.

 

2224. Affidavit attesting that public contract was not secured through employment
or payment of solicitor

 

A. All architects, landscape architects, engineers, contractors, subcontractors, or
any person, corporation, firm, association, or other organization receiving value
for services rendered in connection with a contract for the construction, alteration
or demolition of a public building or project shall execute an affidavit attesting:

 

(1) That affiant employed no person, corporation, firm, association, or other organization,
either directly or indirectly, to secure the public contract under which he received
payment, other than persons regularly employed by the affiant whose services in connection
with the construction, alteration or demolition of the public building or project
or in securing the public contract were in the regular course of their duties for
affiant; and

(2) That no part of the contract price received by affiant was paid or will be paid
to any person, corporation, firm, association, or other organization for soliciting
the contract, other than the payment of their normal compensation to persons regularly
employed by the affiant whose services in connection with the construction, alteration
or demolition of the public building or project were in the regular course of their
duties for affiant.

 

B. No public contract shall be granted to any person, corporation, firm, association,
or other organization refusing to execute the affidavit required by Subsection A above.

 

2241. Written contract and bond

 

A.(1) Whenever a public entity enters into a contract in excess of five thousand dollars
for the construction, alteration, or repair of any public works, the official representative
of the public entity shall reduce the contract to writing and have it signed by the
parties. When an emergency as provided in R.S. 38:2212(D) is deemed to exist for the
construction, alteration, or repair of any public works and the contract for such
emergency work is less than fifty thousand dollars, there shall be no requirement
to reduce the contract to writing.

 

(2) For each contract in excess of twenty-five thousand dollars per project, the public
entity shall require of the contractor a bond with good, solvent, and sufficient surety
in a sum of not less than fifty percent of the contract price for the payment by the
contractor or subcontractor to claimants as defined in R.S. 38:2242. The bond furnished
shall be a statutory bond and no modification, omissions, additions in or to the terms
of the contract, in the plans or specifications, or in the manner and mode of payment
shall in any manner diminish, enlarge, or otherwise modify the obligations of the
bond. The bond shall be executed by the contractor with surety or sureties approved
by the public entity and shall be recorded with the contract in the office of the
recorder of mortgages in the parish where the work is to be done not later than thirty
days after the work has begun.

 

B. All requirements and obligations of this Section, except the requirement to furnish
a bond, shall be applicable to any contractor or subcontractor for whom bond requirements
are waived under the provisions of R.S. 38:2216(C) or (D).

 

C. The payment provisions of all bonds furnished for public work contracts described
in this Part, regardless of form or content, shall be construed as and deemed statutory
bond provisions. Any such bond which fails to contain any of the requirements set
forth in this Part shall be deemed to incorporate all of the requirements set forth
in this Section. Language in any such bond containing any obligations beyond the requirements
set forth in this Part shall be deemed surplusage and read out of such bond. Sureties
and contractors executing payment bonds for public works contracts under this Part
shall be immune from liability for or payment of any claims not required by this Part.

 

D. A bond issued pursuant to this Section shall not create, nor shall such bond be
construed to create, any cause of action in favor of the public entity, or any third
party, for personal injury or property damages sustained by any third party during
the effective period of the bond. Nothing contained herein shall in any way limit
the liability on the bond for the performance of the work pursuant to the contract
in question; however, to the extent that the public contract in question should contain
any provisions for a hold harmless or indemnity agreement, or both, by the contractor,
in favor of the public entity, for personal injury or property damages sustained by
third parties, the hold harmless or indemnity agreement, or both, shall not be deemed
or construed to be secured by the bond, conditioned upon the concurrence of the contractor
and the surety.

 

E. Any provisions of a bond issued pursuant to this Section which are contrary to
Subsection D hereof are hereby declared to be contrary to the public policy of the
state of Louisiana and are null and void.

 

F. The provisions of this Section shall not be subject to waiver by contract.

 

2241.1. Acceptance of governing authority

 

Whenever the public entity enters into a contract for the construction, alteration,
or repair of any public works, in accordance with the provisions of R.S. 38:2241,
the official representative of the public entity shall have recorded in the office
of the recorder of mortgages, in the parish where the work has been done, an acceptance
of said work or of any specified area thereof upon substantial completion of the work.
Those public entities which do not file said recordation, shall require the contractor
to have recorded in the office of the recorder of mortgages, in the parish where the
work has been done, an acceptance of said work or of any specified area thereof upon
substantial completion of the work. This acceptance shall not be executed except upon
the recommendation of the architect or engineer of the public entity whose recommendation
may be made upon completion or substantial completion of said public works within
thirty days of completion of the project. “Substantial completion” is defined for
the purpose of this Chapter, as the finishing of construction, in accordance with
the contract documents as modified by any change orders agreed to by the parties,
to the extent that the public entity can use or occupy the public works or use or
occupy the specified area of the public works for the use for which it was intended.
The recordation of an acceptance in accordance with the provisions of this Section
upon substantial completion shall be effective as an acceptance for all purposes under
this Chapter.

 

2242. Claimant defined; filing of sworn statements of amounts due; payment by contracting
authority

 

A.(1) “Claimant”, as used in this Chapter, means any person to whom money is due pursuant
to a contract with the owner or a contractor or subcontractor for doing work, performing
labor, or furnishing materials or supplies for the construction, alteration, or repair
of any public works, or for transporting and delivering such materials or supplies
to the site of the job by a for-hire carrier, or for furnishing oil, gas, electricity,
or other materials or supplies for use in machines used in the construction, alteration,
or repair of any public works, including persons to whom money is due for the lease
or rental of movable property, used at the site of the immovable and leased to the
owner by written contract, and including registered or certified surveyors or engineers,
or licensed architects, or their professional subconsultants, employed by the owner,
or by the contractor or subcontractor in connection with the building of any public
work.

 

(2) “Claimant”, as used in this Chapter, means any person to whom money is due pursuant
to a contract with a contractor or subcontractor for doing work, performing labor,
or furnishing materials or supplies for the construction, alteration, or repair of
any public works, or for transporting and delivering such materials or supplies to
the site of the job by a for-hire carrier, or for furnishing oil, gas, electricity,
or other materials or supplies for use in machines used in the construction, alteration,
or repair of any public works, including persons to whom money is due for the lease
or rental of movable property, used at the site of the immovable and leased to the
owner by written contract, and including any architect or consulting engineer engaged
by the contractor or subcontractor in connection with the building of any public work.

 

B. Any claimant may after the maturity of his claim and within forty-five days after
the recordation of acceptance of the work by the governing authority or of notice
of default of the contractor or subcontractor, file a sworn statement of the amount
due him with the governing authority having the work done and record it in the office
of the recorder of mortgages for the parish in which the work is done.

 

C.(1) To be entitled to assert the claim given by Subsection B of this Section the
lessor of the movables shall deliver a copy of the lease to the owner not more than
ten days after the movables are first placed at the site of the immovable for use
in the work.

(2) The claim or privilege granted the lessor of the movables by Subsection B of this
Section is limited to and secures only the part of the rentals accruing during the
time the movable is located at the site of the immovable for use in a work. A movable
shall be deemed not located at the site of the immovable for use in a work after:

(a) The work is substantially completed or abandoned; or

(b) The notice of termination of the work is filed; or

(c) The lessee has abandoned the movable, or use of the movable in a work is completed
or no longer necessary, and the owner or contractor gives written notice to the lessor
of abandonment or completion of use.

 

D. When an awarding authority makes final payment to the contractor without deducting
the total amount of all outstanding claims so served on it or without obtaining a
bond from the contractor to cover the total amount of all outstanding claims, the
awarding authority shall become liable for the amount of these claims.

 

E. If an architect or engineer has not been employed by the contractor or subcontractor,
he shall have no claim to or privilege on the funds due the contractor or subcontractor,
nor shall such architect or engineer be within the coverage of the payment and performance
bond required of the contractor by R.S. 38:2241.

 

F. In addition to the other provisions of this Section, if the materialman has not
been paid by the subcontractor and has not sent notice of nonpayment to the general
contractor and the owner, then the materialman shall lose his right to file a privilege
or lien on the immovable property. The return receipt indicating that certified mail
was properly addressed to the last known address of the general contractor and the
owner and deposited in the U.S. mail on or before seventy-five days from the last
day of the month in which the material was delivered, regardless of whether the certified
mail was actually delivered, refused, or unclaimed satisfies the notice provision
hereof or no later than the statutory lien period, whichever comes first. The provisions
of this Subsection shall apply only to disputes arising out of recorded contracts.

 

2248. Provisions for withholding payment; effect on liability of contractor or agency;
punch list

 

A. No contracts for the construction, alteration, or repair of any public works executed
in conformity with this Part shall provide that the state or any of its agencies,
boards, or subdivisions or any other public entity letting such a contract may withhold
payment of more than ten percent of the contract price on projects of less than five
hundred thousand dollars, and five percent of the contract price on projects of five
hundred thousand dollars or more until the expiration of forty-five days after the
recordation of formal acceptance of such work, or notice of default by the contractor
or subcontractor. Such provision for withholding of payment shall in no way change
or affect the liability of the letting agency or of the contractor, subcontractor,
or their sureties.

 

B. All public works contracts shall contain a clause stating that any punch list generated
during a construction project shall include the cost estimates for the particular
items of work the design professional has developed based on the mobilization, labor,
material, and equipment costs of correcting each punch list item. The design professional
shall retain his working papers used to determine the punch list items cost estimates
should the matter be disputed later. The contracting agency shall not withhold from
payment more than the value of the punch list. Punch list items completed shall be
paid upon the expiration of the forty-five day lien period. The provisions of this
Section shall not be subject to waiver, nor shall these provisions apply to the Department
of Transportation and Development.