Opinion No. 2017-026

March 29, 2017

Competitive Bid Law – Exemptions – Professional Services – Municipalities

A contract for a Supervisory Control and Data Acquisition System is a public work under section 39-2-1(6) of the Code of Alabama.

The contract is not exempt from the Public Works Law.

There is no term limitation on a public works contract.


Dear Mr. Bryant:

This opinion of the Attorney General is issued in response to your request on behalf of the City of Talladega.

QUESTIONS

(1) Does the procurement and implementation of a Supervisory Control and Data Acquisition (“SCADA”) system constitute a “public works project” as defined by section 39-2-1 of the Code of Alabama?

(2) May this project be negotiated with Revere Control Systems due to the amount of instrumentation, panels, and software that currently exists within the system as the set standard and continue with the current setup and system or must the project be competitively bid?

(3) May this project be awarded without bid to a company specializing in SCADA on qualifications-based selection as a professional service under section 39-2-2(d) of the Code of Alabama?

(4) If the second and third questions above are answered in the negative and the project must be bid, what is the allowable length of the contract term?

FACTS AND ANALYSIS

Your request states that a Supervisory Control and Data Acquisition system manages data for water treatment plants, pumping stations, booster stations, water tanks, and water wells. You further state that the system involves the installation of monitoring tools and data collection equipment (sensors, radios, modems, hardware, software, and programmable logic controllers) at these sites. Data is collected on site and will be transmitted to a base station or home computer.

This Office understands that engineers, technicians, and computer programmers design the system and its layout and programming. This Office additionally understands that engineers then review and approve these designs. Engineers also train other individuals to install, maintain, and operate the system. Revere Control Systems installs and implements SCADA systems and supplies SCADA equipment. You state that the anticipated cost of the project is $2,000,000, including $840,000 – $960,000 for installation and equipment.

The Public Works Law, codified at section 39-2-1, et seq., of the Code of Alabama, controls all public works contracts that exceed $50,000 and requires that such contracts be competitively bid. Ala. Code § 39-2-1 to 39-2-14 (2012 & Supp. 2016). Section 39-2-1(6) defines “public works” as follows:

(6) PUBLIC WORKS. The construction, installation, repair, renovation, or maintenance of public buildings, structures, sewers, waterworks, roads, curbs, gutters, side walls, bridges, docks, underpasses, and viaducts as well as any other improvement to be constructed, installed, repaired, renovated, or maintained on public property and to be paid, in whole or in part, with public funds or with financing to be retired with public funds in the form of lease payments or otherwise.

Ala. Code § 39-2-1(6) (2012) (emphasis added). This law specifically includes the installation of improvements.

This Office has explained that “improvement” under the Public Works Law is defined as “‘[a]n addition to real property, whether permanent or not; esp., one that increases its value or utility or that enhances its appearance.’” Opinion to Honorable J. Kevin Moulton, Circuit Judge, Place 2, 20th Judicial Circuit, dated December 20, 2013, A.G. No. 2014-031 at 2, quoting Black’s Law Dictionary 826 (9th ed. 2009). That opinion concluded that security cameras, lighting, and security fencing for a courthouse were improvements. Consistent with the Moulton opinion, the installation of computer monitoring tools and data collection equipment on waterworks is an improvement.

The Public Works Law lists several exemptions from its requirements in section 39-2-2. The only relevant exemption here is the one you specifically reference, section 39-2-2(d), which provides as follows:

Excluded from the operation of this title shall be contracts with persons who shall perform only architectural, engineering, construction management, program management, or project management services in support of the public works and who shall not engage in actual construction, repair, renovation, or maintenance of the public works with their own forces, by contract, subcontract, purchase order, lease, or otherwise.

Ala. Code § 39-2-2(d) (Supp. 2016) (emphasis added).

This Office has explained that this section is limited to “[a]rchitectural design services, engineering services, and project management services.” Opinion to Honorable Timothy D. Littrell, Attorney, Town of Courtland, dated December 8, 1998, A.G. No. 99-00056 at 3. The proposed contract is for engineers, but it is also for computer programmers and others not covered by the exemption working under the supervision of engineers.

It is noted that this Office has recognized that computer engineers performing complex services fall under the companion professional-services exception in section 41-16-21(a) of the Competitive Bid Law. Opinion to Honorable G. Robin Swift, Jr., Director of Finance, State Department of Finance, dated January 26, 1990, A.G. No. 90-00121. That conclusion, however, was based on the broader language of the bid law’s exception for “individuals possessing a high degree of professional skill where the personality of the individual plays a decisive part.” Ala. Code § 41-16-21(a) (Supp. 2016). This language is not contained in, and this Office has never recognized, computer engineers in the professional services exception in the Public Works Law.

This Office has stated that a contract for engineering, as well as non-professional, services is still exempt from the bid law if the non-professional services are incidental to and integrated with the professional services. Opinion to Honorable Guy F. Gunter, III, Attorney, City of Opelika, dated September 9, 2005, A.G. No. 2005-192. Unlike the professional-services exception in the bid law, the more restrictive provisions of the Public Works Law exception additionally limit the exemption to support services. In fact, they expressly exclude from the exemption’s operation the actual performance constituting the public work. The proposed contract calls for non-professional workers other than engineers or even computer engineers who will physically install the SCADA system. Accordingly, the contract is not exempt from the Public Works Law.

Finally, “[u]nlike the Competitive Bid Law for local agencies, which imposes a three-year limit on contracts [Ala. Code § 41-16-57(f) (2013)], ‘[a] public works contract is not subject to a limitation on the length of the contract term.’” Opinion to Honorable James A. Patton, Attorney, Colbert County Commission, dated November 3, 2014, A.G. No. 2015-008 at 3, quoting opinion to Honorable Craig L. Williams, Attorney, Parrish Water and Sewer Board, dated November 29, 2001, A.G. No. 2002-072 at 5.

CONCLUSION

A contract for a Supervisory Control and Data Acquisition System is a public work under section 39-2-1(6) of the Code of Alabama.

The contract is not exempt from the Public Works Law.

There is no term limitation on a public works contract.

I hope this opinion answers your questions. If this Office can be of further assistance, please contact me.

Sincerely,

 

STEVEN T. MARSHALL

Attorney General

By:

WARD BEESON, III

Chief, Opinions Section

STM/APM/GWB

2311221/190337

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