Source: https://www.gmanet.com/Advice-Knowledge/Handbook-for-Georgia-Mayors-and-Councilmembers/Part-Three-MANAGEMENT-of-MUNICIPAL-GOVERNMENT/Contracting,-Purchasing,-and-Sale-of-Municipal-Pro.aspx
Timestamp: 2018-10-24 01:40:07
Document Index: 168722927

Matched Legal Cases: ['§ 6', '§ 5', '§ 36', '§ 13', '§ 36', '§ 45', '§ 36', '§ 16', '§ 16', '§ 32', '§ 32', '§ 32', '§ 32', '§ 32', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 3', '§ 2', '§ 32', '§ 36', '§ 52', '§ 50', '§ 36', '§ 36', '§ 50', '§ 32', '§ 32', '§ 32', '§ 50', '§ 50', '§ 50', '§ 50', '§ 50', '§ 50', '§ 13', '§ 36', '§ 36', '§ 36']

A city’s authority to contract comes primarily from its charter and from state laws. The municipal charter generally grants to the mayor and council, acting as the governing body, the power to enter into contracts for the transaction of municipal business. Usually neither the mayor nor the council acting alone has the authority to bind a municipality to a contract except in the case of a veto override. Some charters vest in a city manager the power to enter into certain types of contracts or contracts up to a certain dollar amount.
A city may enter a contract or incur a liability only if its charter or some other law of the state authorizes it to do so. A contract beyond the scope of a city’s corporate powers is void. However, if a city had jurisdiction over a subject matter, it has implied power to contract in regard to the subject matter. For instance, if a city can provide solid waste collection within the city, it can also contract with a private company to perform that service on behalf of the city. In like manner, a city cannot do by contract that which it otherwise lacks the authority to do.
Not only is a municipality restricted from contracting except where it has authority, its power to contract is also limited. If the city ignores one of these limitations, the contract may be deemed unlawful, illegal, or unauthorized. Examples of illegal contracts are:
contracts tending to lessen competition or to encourage a monopoly (Ga. Const. Art. III, § 6, ¶5(c))
contracts that, if carried out, would increase the municipality’s debt beyond constitutional debt limitations (Ga. Const. Art. IX, § 5, ¶1; Fairgreen Capital, LLC v. City of Canton, 335 Ga. App. 719, 782 S.E.2d 46 (2016); Bauerban v. Jackson County Board of Commissioners, 598 S.E.2d (2004); Barkley v. City of Rome, 381 S.E.2d 34 (1989))
contracts binding the governing authority or its successors so as to prevent free legislation regarding “governmental” functions (O.C.G.A. § 36-30-3; Unified Gov’t. of Athens-Clarke County v. Stiles Apts., 295 Ga. 829, 764 S.E.2d 403 (2014); City of McDonough v. Campbell, 289 Ga. 216, 710 S.E.2d 537 (2011); Greene County School District v. Circle Y Construction, Inc., 291 Ga. 111, 728 S.E.2d 184 (2012); Barr v. City Council of Augusta, 206 Ga. 750, 58 S.E.2d 820 (1950); City of Fayetteville v. Fayette County, 171 Ga. App. 13, 318 S. E.2d 757 (1984); City of Power Springs v. WMM Properties, 253 Ga. 753, 325 S.E.2d 155 (1985); City of Atlanta v. Brinderson Corporation, 799 F.2d 1541 (11th Cir. 1986))
contracts in violation of “public policy” although there may be no statute prohibiting them (O.C.G.A. § 13-8-2; Trainer v. City of Covington, 183 Ga. 759, 189 S.E. 842 (1937); Frazer v. City of Albany, 245 Ga. 399, 265 S.E.2d 581 (1980)), and
contracts promoting “self-interest” (O.C.G.A. § 36-30-6; Story v. City of Macon, 205 Ga. 590, 54 S.E.2d 396 (1949)).
An illegal contract with a municipality is considered void forever; it does not bind the municipality even if there has been complete performance on the part of the other party (City of Baldwin v. Woodard & Curran, Inc., 293 Ga. 19, 743 S.E.2d 381 (2013); City of Hogansville v. Farrell Heating Co., 161 Ga. 780, 132 S.E. 436 (1925); City of Warm Springs v. Bulloch, 212 Ga. 149, 91 S. E. 2d 13 (1956)). A contract that is void because it is illegal cannot be ratified. Acceptance or use by the municipality of any benefits furnished under the void contract will not make it valid (H.G. Brown Family L.P. v. City of Villa Rica, 278 Ga. 819, 607 S.E.2d 883 (2005); Town of Wadley v. Lancaster, 124 Ga. 354, 52 S.E. 335 (1905); Mayor and Council of Hogansville v. Planters Bank, 27 Ga. App. 384, 108 S. E. 480 (1921); Hardy v. Mayor and Council of Gainesville, 121 Ga. 327, 48 S.E. 921 (1904)). This rule is based on the principle that it is the duty of any person contracting with a municipality to see that the contract strictly complies with provisions of the law limiting and prescribing the municipality’s powers (O.C.G.A. § 45-6-5; Wiley v. City of Columbus, 109 Ga. 295, 34 S.E. 575 (1899); Ingalls Iron Works Co. v. City of Forest Park, 99 Ga. App. 706, 109 S. E.2d 835 (1959); City of Jonesboro v. Shaw-Lightcap, Inc., 112 Ga. App. 890, 147 S.E.2d 65 (1966)).
One exception to the above rule relates to a void contract that could have been but was not properly authorized. If the representative officials who have the right to contract make such a contract, and if they have knowledge of the work being done, and thereafter accept the benefits on behalf of the municipality, an implied ratification will result which will render the municipality liable for the reasonable value of the goods or services received (City of Gainesville v. Edwards, 112 Ga. App. 672, 145 S.E.2d 715 (1965); City of Dallas v. White, 182 Ga. App. 782, 357 S.E.2d 125, cert. denied (1987)).
Generally contracts for professional services involving particular knowledge, such as those engaging the services of attorneys, auditors, or architects, are not subject to bidding requirements. If no charter provision, ordinance, or state law prevents it, a municipality is generally free to negotiate such contracts as it sees fit.
Municipal officials may not use their office for private gain. Georgia law provides that “it is improper for a member of a city council to vote upon any question brought before the council, in which he is personally interested” (O.C.G.A § 36-30-6). The Georgia courts have applied this statute to municipal contracts, and they have relied on it to void contracts:
between a mayor and council and a private corporation in which one of the councilmen owned stock (Hardy v. Mayor and Council of Gainesville, 121 Ga. 327, 48 S.E. 921 (1904); Mayor and Council of Hogansville v. Planters Bank, 27 Ga. App. 384, 108 S.E. 480 (1921))
between a municipality and a company that was represented by the law firm of which one of the councilmen was a member (Cochran v. City of Thomasville, 167 Ga. 579, 146 S.E. 462 (1928)), and
between the city and the mayor even though the mayor neither voted nor attempted to influence members of the council (Trainer v. City of Covington, 183 Ga. 759, 189 S.E. 842 (1937); Montgomery v. City of Atlanta, 162 Ga. 534, 134 S.E. 152 (1962)).
In addition to being a violation of public policy and thus voidable, such contracts tainted by “personal interest” may also be criminal violations. Municipal officials commit the offense of bribery by directly or indirectly soliciting, receiving, or accepting anything of value by inducing the reasonable belief that the giving of the thing will influence his or her official action (O.C.G.A. § 16-10-22). The Georgia Code contains the following provision:
Any employee, appointive officer or elective officer of a political subdivision…or agency thereof who for himself or in behalf of any business entity sells any real or personal property to
the employing political subdivision
an agency of the employing political subdivision
a political subdivision for which local taxes for education are levied by the employing subdivision, or
a political subdivision which levies local taxes for education for the employing political subdivision
shall, upon conviction, be punished by imprisonment for not less than one or more than five years (O.C.G.A. § 16-10-6).
The above provision does not apply to sales of personal property totaling less than $800 per calendar quarter or sales of personal property made pursuant to sealed competitive bids. The exception for quarterly sales of less than $800 in personal property exists to ensure that cities do not waste time, money, and manpower driving to another jurisdiction for routine purchases just because the mayor or a member of the city council owns the local hardware store or gas station. Sales of real property are permitted when a disclosure of the personal interest has been made to the grand jury or probate judge at least 15 days prior to the date of the agreement. Additionally, sales made in accordance with the restrictions of the statute and otherwise valid are enforceable and do not subject the parties to civil liability. However, any municipal official who sells real or personal property to his or her municipality outside the limitations of this statute could have the contract invalidated and may face criminal charges.
To foster public trust in government, city officials must avoid all situations in which their public actions may be affected by or come into conflict with their personal interests. In instances when this is impossible, they should disqualify themselves from acting on such matters.
Among the various types of contracts that cities enter into are (1) municipal road contracts, (2) public works contracts, (3) intergovernmental contracts, (4) energy savings performance contracts, and (5) public-private partnerships for water reservoirs, facilities, and systems. The following is a discussion of these five specific types of contracts and some information on what the law requires regarding a successful bidder.
Municipal Road Contracts
A municipality is authorized to contract with any person, the federal government, the state, or any state agency, municipality, or county for the construction, maintenance, administration, and operation of municipal roads and related activities. A municipality may perform roadwork with its own forces or with prison labor (O.C.G.A. § 32-4-91 et seq.). Any contract for work on the municipal road system must be in writing and approved by resolution of the municipal governing authority and entered on its minutes (O.C.G.A. § 32-4-111).
Limitations on Authority to Negotiate Contracts
Municipalities are prohibited from negotiating road contracts except those:
involving the expenditure of less than $200,000
with a state agency or political subdivision with which it is authorized to contract
with a railroad or railway company or publicly or privately owned utility as authorized by applicable law
for engineering or other kinds of professional or specialized services
for emergency maintenance requiring immediate repairs to a public road, including but not limited to bridge repairs, snow and ice removal, and repairs due to flood conditions, or
as otherwise expressly authorized by law.
Additionally, a road contract of more than $20,000 but less than $200,000 cannot be awarded unless at least two estimates have been submitted (O.C.G.A. § 32-4-113).
Generally, municipal road contracts are let by public bid. The city is required to advertise for competitive sealed bids in a local publication (usually the newspaper in which sheriff’s sales are advertised) once a week for two weeks. The first advertisement appears two weeks prior to the opening of the sealed bids and the second follows one week later (O.C.G.A. § 32-4-114 et seq.). The advertisement must include information specified by law.
The city may require each bidder to pay a reasonable sum to cover the cost of the bid proposal form, the contract, and it specifications. The city may also mandate that no bid will be considered unless accompanied by a proposal guaranty payable to the municipality to ensure that the successful bidder will execute the contract on which he or she bids (O.C.G.A. § 32-4-116 et seq.).
The Georgia Local Government Public Works Construction Law establishes uniform requirements for local government public works construction projects (O.C.G.A. § 36-91-1 et seq.). The law requires contracts for such projects to be awarded in an open and competitive manner while authorizing the use of current construction industry practices to provide increased flexibility to local governments that are constructing public facilities. The law defines public works construction as “the building, altering, repairing, improving, or demolishing of any public structure or building or other public improvements of any kind to any public real property other than those projects covered by Chapter 4 of Title 32 or by Chapter 37 of Title 50. Such term does not include the routine operation, repair, or maintenance of existing structures, buildings, or real property or any improvements or installations performed as part of an energy savings performance contract” (O.C.G.A. § 36-91-2(12)).
Not all construction contracts are subject to the public works construction law. With certain exceptions, the requirements of the law do not apply to contracts for the following projects:
Public works construction contracts costing less than $100,000
Projects performed using inmate labor
Projects involving the expenditure of federal funds and requiring compliance with federal laws or regulations regarding procedures for entering into public works construction contracts
Projects necessitated by emergencies or natural disasters
Projects self-performed by the governmental entity
Sole source procurement, or
Professional services (O.C.G.A. § 36-91-22).
The public works construction law establishes minimum requirements for advertising public works construction opportunities. The contract opportunity notice must be posted conspicuously in the governing authority’s office, and it must be advertised in either the legal organ of the county or by electronic means on an Internet website of the governmental entity or on a website identified by the governmental entity. The contract opportunity must be advertised at least two times with the first advertisement published at least four weeks prior to bid/proposal opening date and the second advertisement at least two weeks after the first ad. The advertisement must include enough details to enable the public to know the extent and character of the work to be done. All notices must advise potential bidders/offerors of any mandatory prequalification requirements, any pre-bid conferences, and/or any federal requirements (O.C.G.A. § 36-91-20(b)).
Prequalification of Bidders and Offerors
The public works construction law allows cities to adopt, in their discretion, a process for mandatory prequalification of prospective bidders or offerors (O.C.G.A. § 36-91-20(f)). A prequalification process allows a city to establish minimum criteria that potential bidders or offerors must meet in order to become eligible to submit a bid or proposal on a public works construction project. While local governments are not required to use a pre-qualification process, those who choose to do so must adhere to the following requirements contained in the public works construction law:
Criteria for prequalification must be reasonably related to the project or the quality of work. The criteria should not be designed to eliminate all prospective bidders/offerors but one.
The criteria for prequalification must be available to any prospective bidder or offeror requesting such information.
The process must include a method of notifying prospective bidders or offerors of the criteria for prequalification. All required notices of advertisement must advise potential bidders/offerors of the mandatory prequalification process (O.C.G.A. § 36-91-20(b)).
The prequalification process must include a procedure for a disqualified bidder to respond to his or her disqualification to a representative of the city, although this provision does not require the city to provide a formal appeal procedure (O.C.G.A. § 36-91-20(f)(4)).
Competitive Sealed Bids and Proposals
Cities must utilize one of two methods when soliciting public works construction contracts: competitive sealed bids or competitive sealed proposals.
Competitive Sealed Bids. Under this method, the city issues an Invitation to Bid, and prospective bidders must submit bids in accordance with the bid invitation. All submitted bids must contain a final price or fee for project completion. The city must select the bid from the responsible and responsive bidder who submits the lowest price and meets all of the requirements included in the bid invitation. Under this method, bids are valid for only 60 days, unless otherwise agreed upon by the city and the bidder.
Competitive Sealed Proposals. Under this method, the city issues a Request for Proposal (RFP), which contains a description of the project and the factors that will be used to evaluate submitted proposals. The RFP may or may not require a final price or fee to be included with the proposal. Price may be one of the factors considered by the city when making its final decision, but it will not be the only factor. All submitted proposals are evaluated in accordance with the criteria provided in the RFP, and the city must make its final selection based on such criteria. Under this method, proposals are valid for as long as specified in the RFP, but offerors that have not been “short-listed” by the city must be released after 60 days (O.C.G.A. § 36-91-50(b) et seq.).
Note that state law prohibits disqualifying a responsible bidder based upon lack of previous experience with a job of the size for which the bid or proposal is being sought if the bidder has experience performing the work, the bid or proposal is not more than 30% greater in scope or cost from the bidder’s previous experience in jobs, and the bidder can procure the required bid, performance, and payment bonds (O.C.G.A. § 36-91-23).
Project Delivery Methods and Construction Management
The public works construction law allows any construction delivery method to be utilized. However, any public works construction project that places the bidder or offeror at risk for construction and requires labor or building materials in the execution of the contract must be awarded on the basis of competitive sealed bids or competitive sealed proposals (O.C.G.A. § 36-91-20(c)).
The city should consider its own internal capabilities when selecting the appropriate construction delivery method and management approach. Before selecting a construction project delivery method and management approach, city officials should determine whether or not the city has the in-house resources available to:
manage the design phase of the project
manage the construction phase of the project, and
supervise and inspect construction.
Several construction delivery methods are briefly described below. These methods are conceptual, and variations of each method may exist.
Traditional Method (Design-Bid-Build). In this method, the city hires a professional architect or engineer to design the project. After completion of the design phase, the city solicits bids for the construction portion of the project. The city typically awards the contract to the bidder who submits the lowest responsive, responsible bid. The selected contractor then retains necessary trade contractors.
Design-Build. In this method, the city requests proposals and then hires a single firm who provides all design and construction services. Several different firms (design professionals and trade contractors) may provide the actual services, yet the city has only one contract with the entity responsible for both types of services.
Construction Management (CM) At-Risk. In this method, the construction manager assumes the financial risks and liabilities of constructing the project, thus placing the manager “at risk.” This method eliminates the duplication of services caused by employing both a construction manager and general contractor. The model also allows the city to avoid entering into contracts with numerous trade contractors.
Unlike the project delivery methods listed above, which are based on the assignment of “delivery” risk for design and construction, the following methods are referred to as “management” methods. These methods can be used in conjunction with any of the project delivery methods listed above.
Program/Project Management. In this method, the city employs a project manager to act on the city’s behalf during all phases of the project. The primary distinction between the project manager and the construction manager depends upon the scope of the project being performed. Typically, the project manager will fill the role of the city’s staff should the city not have adequate or experienced personnel to oversee the project.
Agency Construction Management. In this method, the city hires a construction manager who serves as a professional adviser and who manages and coordinates the activities of the design and construction teams. However, the general contractor and the design team still have contracts directly with the city. The selected construction manager has little liability or responsibility and serves only in an advisory role. Therefore, the construction manager is at no financial risk.
Bid, payment, and performance bonds are required on all projects costing more than $100,000 that are subject to the public works construction law. These bonds protect the city in the event that a contractor fails to meet his or her responsibilities regarding the project. A city may, in its discretion, require such bonds for any project, regardless of its cost.
Bid Bonds. Bid bonds protect the city in the event that the selected bidder or offeror fails to enter into a contract with the city.
Performance Bonds. Performance bonds provide reimbursement to the city in the event that the contractor fails to complete the project in accordance with the contract.
Payment Bonds. Payment bonds protect the subcontractors and suppliers who work for the city’s contractor by ensuring that they are compensated by the contractor. If a city fails to obtain a payment bond on a contract costing more than $100,000, the city may be held liable to pay the subcontractors or suppliers (O.C.G.A. § 36-91-91).
Any bid bond, performance bond or payment bond required under the Georgia Public Works Construction Law must be approved as to form and as to the solvency of the surety by an officer of the governmental entity negotiating the contract (O.C.G.A. § 36-91-40). In the case of a bid bond, such approval must be obtained prior to acceptance of the bid or proposal, and in the case of a performance or payment bond, such approval must be obtained prior to execution of the contract. The local government may choose not to accept a bond unless the surety is on the United States Department of Treasury’s list of approved bond sureties and unless the surety is licensed to do business in Georgia by the Insurance Commissioner.
Contractor’s Oath
Prior to beginning work on the public works construction project, the contractor must provide a written oath stating that he or she has not attempted to prevent competition with regard to the procurement of a contract for the project (O.C.G.A. § 36-91-21(e)). If the contractor’s oath is false, the contract is void, and the city can attempt to recover any monies paid to the contractor.
Any public works construction contract that is subject to the law and executed without properly utilizing either the competitive sealed bid method or the competitive sealed proposal method is invalid (O.C.G.A. § 36-91-21(a) and (h)). Additionally, a municipal elected official who receives or agrees to receive any pay or profit from a local government public works construction contract, shall be guilty of a misdemeanor (O.C.G.A. § 36-91-21(g)). Also, if a contractor knows that the city failed to properly advertise the contract opportunity or use either the competitive sealed bid method or the competitive sealed proposal method, the contractor is not entitled to payment for any of the work performed under the contract (O.C.G.A. § 36-91-21(a)).
A constitutional provision authorizes municipalities to contract, for a period not exceeding 50 years, with the state or other local units of government in Georgia with respect to facilities or services (Ga. Const. Art. IX, § 3, ¶1). Under this provision, municipalities are specifically authorized to convey existing facilities to the state and to any public agency, corporation, or authority. Cities may contract with any public agency, corporation, or authority for the care, maintenance, and hospitalization of its indigent sick. Under this power, the municipality may not enter into any contract it might deem advisable. The state and its agencies and subdivisions may contract with each other only with reference to facilities and services they are otherwise authorized to provide.
Another constitutional provision authorizes counties and municipalities to contract with one another for certain services, such as police and fire protection, garbage and sewage disposal, street and road maintenance, parks, and treatment and distribution of water (Ga. Const. Art. IX, § 2, ¶3).
Intergovernmental contracts are also authorized by a variety of general state laws, including those authorizing a municipality to contract with:
the state, a state agency, another municipality or county, or with any combination thereof for public road work (O.C.G.A. § 32-4-111)
other municipalities, counties and private persons, firms, associations, or corporations, for any period of time not to exceed 50 years, to provide industrial wastewater treatment services to such private entities in order to comply with applicable state and federal water pollution control standards and to be eligible for grants-in-aid or other allotments (O.C.G.A. § 36-60-2), and
the Georgia Ports Authority for the leasing, operation, or management of real or personal property in or adjacent to any seaport (O.C.G.A. § 52-2-9(15)).
This list provides only a sample of the range of contracts that a city is authorized to enter into with other political bodies.
A municipality is authorized to contract with “qualified energy services providers” who are persons or businesses with a record of documented guaranteed energy savings performance contract projects and who are experienced in the design, implementation, and installation of energy conservation measures. Additionally, such providers have the technical capabilities to verify that such measures generate guaranteed energy and operational cost savings or enhanced revenues, have the ability to secure or arrange the financing necessary to support energy savings guarantees, and are approved by the Georgia Environmental Finance Authority for inclusion on a pre-qualifications list (O.C.G.A. § 50-37-3).
The Georgia Environmental Finance Authority establishes a list of qualified energy service providers that have prequalified to be utilized in contracts for energy savings performance contracts. Municipalities may issue requests for proposals from at least three providers on the list and may issue a contract based upon the request for proposal. The law has a number of specific requirements a municipality must follow in order to correctly utilize and implement an energy savings performance contract.
Public-Private Partnerships for Water Reservoirs, Facilities, and Systems
Municipalities are allowed to contract with private parties, including, but not limited to, corporations and individuals, to obtain any and all permits, licenses, and permissions that are required to complete a water reservoir or water supply system project. The contractual authority granting these powers to municipalities is limited but does allow for cities to obtain funding and make payments for projects in many methods (O.C.G.A. § 36-91-101).
Public-private partnerships for water reservoirs, facilities, and systems are not limited to one local government per project. Instead, the law allows for multiple local governments to work together on a project, but in such cases the local governments must designate one local government to be the lead local authority. The lead local authority, once selected, has a number of powers and duties under the law. There are a number of procedures which must be followed by participating municipalities. For instance, a contract entered into for public-private partnerships for water reservoirs, facilities, and systems cannot exceed 50 years (O.C.G.A. § 36-91-102).
The Water Supply Division of the Georgia Environmental Finance Authority also has the ability to undertake public-private partnerships for water reservoirs, facilities, and systems and must seek the advice and input of affected local governments. Local governing authorities are allowed to request in writing that the Water Supply Division participate in a project in any capacity, including as lead local authority. The Water Supply Division also has specific conditions and limitations placed upon it should it choose to participate in a project (O.C.G.A. § 50-23-28.2(b) et seq.).
A road contract let for public bid is to be awarded to the lowest responsive and responsible bidder. However, the municipality has the right to reject all bids and may re-advertise, perform the work itself, or abandon the project (O.C.G.A. § 32-4-118).
Before beginning work, the successful contractor must sign a written oath that he or she has not prevented, or attempted to prevent, competition in the bidding (O.C.G.A. § 32-4-122). In addition, where the contract price is $5,000 or more, the contractor must file
payment and performance bonds for the protection of subcontractors and other furnishing materials or labor, and
any other bonds required by the municipality in its advertisements for bids, such as public liability and property damage insurance bonds or policies and bonds to maintain in good condition such completed construction for a period of not less than five years.
Failure to take payment bond renders the city liable for losses to subcontractors, laborers, material men, and other persons furnishing materials and labor (O.C.G.A. § 32-4-119 et seq.).
A number of statutory provisions authorize municipalities to enter into purchasing agreements. For example, municipalities can contract with the federal government or the state for the purchase, lease, or acquisition of equipment, supplies, and property and appoint an officer or employee to bid and make necessary down payments for these things (O.C.G.A. § 50-16-81). Cities may also purchase various supplies and surplus property through the Georgia Department of Administrative Services (O.C.G.A. § 50-5-100 et seq.; § 50-5-143). Municipalities must purchase goods from the Georgia Correctional Industries Administration where the availability of such goods has been certified with the Department of Administrative Services and such goods are competitive in quality and price (O.C.G.A. § 50-5-73).
Individual cities may also possess the power to purchase various goods and services, and be restricted in such purchases, by virtue of the city’s charter. For example, the city’s charter may require that bids be obtained for purchases over a certain specified amount, that a minimum number of bids be obtained, that the bids be sealed and in writing, or that the lowest and best bid be accepted. Most municipalities, however, merely have provisions in their charters providing that the council may by ordinance prescribe the rules and procedures for municipal purchasing.
Miscellaneous Statutes Concerning Purchasing
When making purchases, municipalities should be aware of two additional statutes. The first provides that, in the purchasing of and contracting for supplies, materials, equipment, and agricultural products, state and local authorities must give preference “as far as may be reasonable and practicable” to items manufactured or produced in Georgia, unless giving such a preference will sacrifice price or quality (O.C.G.A. § 50-5-61). The second act makes it a misdemeanor for any municipal officer to purchase or authorize the purchase of any beef other than beef raised and produced in the United States when the purchase is to be made with governmental funds. Canned meats not available from a source within the United States and not processed in this country may be purchased without penalty (O.C.G.A. § 50-5-81).
No general law requires competitive bidding in the purchase of office supplies and similar items. Local statutes may provide that purchases of items be preceded by legal advertisement and competitive bidding.
The “Georgia Security and Immigration Compliance Act” requires every political subdivision, instrumentality or agency of the state to register for and use the federal program to verify employment eligibility of all newly hired employees (E-Verify). Municipalities must also include in all bids, contracts, and subcontracts for the physical performance of services for $2,500 or more provisions requiring all contractors and subcontractors to use E-Verify and to submit an affidavit that they are using and will continue to use the E-Verify program (O.C.G.A. § 13-10-91). Before a bid on a contract for the physical performance of services is considered by the city, the bid must include a signed, notarized affidavit from the contractor attesting to the contractor’s registration with and use of E-Verify, that the contractor will continue using E-Verify throughout the contract period, and listing the contractor’s E-Verify user identification number and date of initial authorization to use E-Verify. Each year every public employer must provide to the Department of Audits and Accounts proof of compliance with this law.
All sales by a municipal corporation of real property or personal property that has an estimated value of more than $500 must be made either by sealed bids or by auction to the highest bidder. A municipal corporation may reject any and all bids or cancel any proposed sale. Notice of a sale must be published once in the official newspaper of the county in which the municipality is located or in a newspaper of general circulation in the municipality. The legal notice must appear not less than 15 days nor more than 60 days prior to the date of the sale. If the sale is by sealed bid, the bids shall be opened in public at the time and place stated in the legal notice. The bids shall be kept available for public inspection for not less than 60 days.
Personal property with an estimated value of $500 or less may be sold without regard to any of the above provisions. Such sales may be made in the open market without advertisement and without the acceptance of bids. The municipality has the power to estimate the value of the property to be sold (O.C.G.A. § 36-37-6).
Sale of City-Owned Utilities
A municipality may sell, lease, or otherwise dispose of the property of any electric, water, gas, or other municipally owned public utility plants or properties. The city may decide the terms and conditions of such transactions. Prior to the sale, a notice setting out the price and other general terms of the sale must be placed for three consecutive weeks in a newspaper published in or having general circulation in the municipality. The sale or lease may take place ten days after publication of the final notice unless 20 percent of the qualified voters sign a petition objecting to it. If such a petition is filed, the sale or lease cannot take place unless it is approved at a special election by two-thirds of those voting. Such election shall be held at least 50 days after the objecting petition is filed with the city (O.C.G.A. § 36-37-7 et seq.).
Cities can enter into a lease for the use, operation, or management of real or personal property for longer than 30 days if it is done by sealed bid or auction in the same manner as for a sale and the lessee agrees to maintain insurance coverage of at least $1 million and to assume all responsibility for any injury to person or property and to indemnify and hold harmless the city. The lessee cannot pledge or mortgage the property or their interest in the property. The lease term can be no longer than five years with one five-year renewal. After that time, leasing of the property must again be subject to public bid or auction (O.C.G.A. § 36-37-6). Where real property is leased for the erection of a telecommunications tower, the initial term of the lease can be no longer than ten years, and there may be one renewal period no longer than ten years.