HOSPITAL DISTRICTS: CONTRACTS: Hospital Districts created under Minn. Stat. 

§§ 447.31, et. seq., are subject to the bidding requirements of Minn. Stat. § 471.345 (2000). Op. 

Atty. Gen. 1001K, April 18, 1962 superceded. 

1001 K 

May 8, 2002 

Ronald R. Frauenshuh, Sr. 

FRAUENSHUH & SPOONER, P.A. 

113 Washburne Avenue 

Paynesville, MN 56362 

Dear Mr. Frauenshuh : 

 Thank you for your letter of April 1, 2002. In that letter, you present substantially the 

following facts. 

FACTS 

 The Paynesville Area Hospital District (“the District”) has undertaken a project involving 

an addition to its hospital and remodeling of the associated nursing home. Due to a “freeze” in 

nursing home rooms, an earlier plan to also construct an addition to the nursing home was not 

implemented. The original plan would have replaced two-person shared rooms with private 

rooms. Recently the State has authorized the District to go ahead with the planned additions. 

The District would like to have the added work done by the contractors now on site in order to 

minimize disruption of the elderly patients who have already been displaced once to 

accommodate the remodeling. You note that in Op. Atty. Gen. 1001K, April 18, 1962, the 

Attorney General concluded that hospital districts such as the Paynesville District, created 

pursuant to Minn. Stat. §§ 447.31, et seq., were not statutorily required to advertise for bids on 

construction contracts. 

QUESTION 

 Is the Paynesville Area Hospital District subject to the bidding requirements contained in 

Minn. Stat. §§ 471.345, et seq. in contracting for construction work? 

OPINION 

 As qualified below, we answer your question in the affirmative. 
Ronald R. Frauenshuh, Sr. 

May 8, 2002 

Page 2 

 First Minn. Stat. § 471.345 (2000) (the Uniform Municipal Contracting Law) requires a 

contract for over $50,0001

 entered into by a “municipality” for “construction, alteration, repair or 

maintenance of real property to be let upon public solicitation of sealed bids.” 

 Second, a “municipality” for purposes of this requirement is defined as. 

“a county, town, city, school district or other municipal corporation or political 

subdivision of the state authorized by law to enter into contracts.” 

(Emphasis added). According to Minn. Stat. § 447.31, subd. 6, a hospital district “created or 

reorganized under sections 447.31 to 447.37 is a municipal corporation and a political 

subdivision of the state. . .” Therefore, a hospital district such as the Paynesville Area District is 

plainly subject to the requirements of section 471.345. 

 Third, section 471.345 was first enacted in 1969. See Act of June 4, 1969, Ch. 934, § 1, 

1969 Minn. Laws 1803. Therefore, it was not in existence when Op. Atty. Gen. 1001K, April 

18, 1962 was issued. Nor does there appear to have been any other statutory bidding 

requirement applicable to hospital districts at that time. Thus, while the 1962 opinion appears to 

be a correct application of 1962 law, it is no longer applicable in light of Minn. Stat. § 471.345. 

Finally, while some alteration of work to be performed under an existing government 

construction contract may be made without advertising for bids, it is not generally permissible to 

make changes that substantially change the nature of the project without soliciting bids for a new 

contract. See, e.g., Griswold v. Ramsey County, 242 Minn. 529 (1954), Hanna v. Board of 

Education of Wicomico Co. 200 Md. 49, 87 A.2d 846, Ops. Atty. Gen. 161a-8 January 5, 1965, 

May 9, 1956 and March 7, 1950. Whether a particular proposal would constitute a change of 

sufficient magnitude to necessitate letting a new contract is, for the most part, a fact issue beyond 

the scope of opinions of the Attorney General. See, e.g., Op. Atty. Gen. 629a, May 9, 1975. 

Very truly yours, 

MIKE HATCH 

Attorney General 

KENNETH E. RASCHKE, JR. 

Assistant Attorney General 

 

1

 For municipalities under 2,500 in population, the threshhold amount is $35,000.