Mississippi Administrative Code › Title 12 - Finance and Administration › Part 6 - Office of Purchasing, Travel and Fleet Management › Chapter 10 - Special Procedures › Sec2 12-6-10.109 - Information Applicable to Construction › Section 12-6-10.109.01 - Construction Defined

Current through June 25, 2024
The Office of Purchasing, Travel and Fleet Management, i n
					 cooperation with the Office of the State Auditor, has developed the following
					 guidelines to assist agencies and governing authorities in the interpretation
					 of the purchasing requirements.
As per Section
					 31-7-1,
					 Mississippi Code of 1972, Annotated, "construction" shall mean the process of
					 building, altering, improving, renovating or demolishing a public structure,
					 public building, or other public real property. It does not include routine
					 operation, routine repair or regularly scheduled maintenance of existing public
					 structures, public buildings or other public real property. As per Section
					 31-7-13,
					 Mississippi Code of 1972, Annotated, "construction" falls under the public bid
					 laws. The question is, where does "routine repair" end and "construction"
					 begin? In general, it is considered construction if it would add to, restore,
					 or reduce the value of a property.
"Add to" would indicate an addition to or an improvement to
					 the property. This would include such projects as the construction of a new
					 building or road, the construction of an additional office to an existing
					 building, or the installation of a new air conditioning system into an existing
					 building. "Restore" would indicate a situation where a building or road had
					 depreciated significantly, and the project was intended to bring the property
					 back to its original value. "Reduce" would indicate demolition of the
					 property.
In addition, there are other "projects" which would fall
					 under the term "construction" which would not necessarily follow the definition
					 shown above. Routine maintenance to retain value and/or function would not be
					 considered construction, and, therefore, would not require compliance with the
					 public purchasing laws. However, non-routine maintenance to restore value as
					 opposed to retain value would be considered "construction" and would fall under
					 the public bid laws. Therefore, it is important to establish and maintain
					 maintenance schedules on all property in an effort to retain the value and not
					 allow property to depreciate.
Please remember that repairs made to a building, road, or
					 bridge in an emergency are exempt from the bidding requirements. Part of the
					 definition of an emergency is "...when the immediate restoration of a condition
					 of usefulness of any public building, equipment, road or bridge appears
					 advisable...." Since "emergency" repairs are exempt from the bidding
					 requirements, this would indicate that repairs which are not an emergency would
					 not be considered exempt.
Another "rule of thumb" is that if the funding source is
					 from a budget line "Capital Outlay" then the project is considered
					 construction. Please do not construe this statement to imply that purchases
					 made from other funds would be exempt from the bidding requirements.
Please note that the lack of a requirement to obtain
					 competitive bids should not preclude the purchasing agent from attempting to
					 obtain the best possible price for the entity. If in doubt, follow the
					 statutory bid laws set forth in Section
					 31-7-13,
					 Mississippi Code of 1972, Annotated. A few examples will help to give some
					 guidelines to follow in determining if bids are required.
(1) Pouring of concrete to add a parking area
				  would be considered construction since value is being added to the property.
				  Resealing of an existing parking area, on a routine basis, would not
				  necessarily be considered construction since this would be considered routine
				  maintenance, and the value of the property is being retained at its original
				  value and not increased.
(2) Adding
				  new pipe to an existing structure so as to provide water to a new part of the
				  building would be considered construction. Replacing existing pipe would not be
				  considered routine maintenance and would be considered construction.
(3) Painting of a building on a routine basis
				  would not necessarily be considered construction since you would be retaining
				  the value of the building. This may be considered a contractual service and
				  would not necessarily require bidding. If, however, you purchased paint and
				  hired a painter, you would need to follow the statutory procedures for
				  purchasing of the paint. If there was not a maintenance schedule, this project
				  would appear to be an effort to restore the value and should be considered as a
				  construction project and compliance with the bid laws would be
				  required.
(4)Demolition of existing
				  walls and replacement with new walls would not be considered routine
				  maintenance. The "renovations" would have an impact upon the value of the
				  building; this would be considered construction. Since it is not routine
				  maintenance, it must be construction. In this case, it may be better to be safe
				  than sorry; put it out for bids.