Opinion No. ( 1986 )

The Honorable Doug Brandon Senator, 23rd District 12th and University Little Rock, AR 72204

Dear Senator Brandon:

This letter is in response to your request for an opinion as to which of Arkansas' preference laws, Ark. Stat. Ann. 14-293 (Suppl. 1985) pertaining to commodities or Ark. Stat. Ann. 14-614.2 (Repl. 1979) pertaining to construction would apply to a particular contract for the installation of pumps and appurtenant equipment for a municipal water works.

Ark. Stat. Ann. 14-614.2 states that the bids of contractors who have satisfactorily performed prior contracts and who have paid various taxes for not less than two successive years immediately prior to submitting a bid . . . shall be deemed a better bid than the bid of a competing contractor who has not paid such taxes, whenever the bid of the competing contractor is less than three percent lower, and the contractor making a bid as provided by this Act which is deemed the better bid, shall be awarded the contract.

Ark. Stat. Ann. 14-293(b) describes preference of Arkansas firms over non-resident firms in purchases of commodities. The public agency shall accept the lowest qualified bid from a firm resident in Arkansas, provided that said bid does not exceed the lowest qualified bid from a non-resident firm by more than five percent and provided that one or more firms resident in Arkansas made written claim for a preference at the time the bids were submitted. Public agencies as used in this section includes municipalities. Ark. Stat. Ann. 14-293(1). Commodities means supplies, goods, materials and equipment of every kind and equipment including Amendment 54 items. Ark. Stat. Ann. 14-293(4).

Review of the Specifications and Contract Documents for the project reveals that this project includes not merely delivery of equipment but also site preparation and construction as well as installation (mechanical and electrical) of the equipment sufficient to classify the project as a capital improvement project under Ark. Stat. Ann. 12-611 et seq. The municipality treated this as a capital improvement project in the bidding documents. Accordingly, as a capital improvement project, the applicable preference statute would be Ark. Stat. Ann. 14-614.2.

The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Thomas S. Gay.