Opinion No. ( 2004 )

The Honorable Barbara Horn State Senator Post Office Box 64 Foreman, AR 71836-0064

Dear Senator Horn:

You have presented the following question for my opinion:

Is it legal for a Construction Manager to execute an At Risk Construction Management Agreement for a public entity, such as a school district?

RESPONSE

I am unable to respond to this question at this time, because the answer will depend largely on numerous factual matters about the situation that I am not in a position to evaluate.

You have referred to an "At Risk Construction Management Agreement." Although such agreements generally involve an arrangement under which the Construction Manager assumes some legal and financial risks in addition to the consulting fee, I am not certain that this is indeed the arrangement that is the subject of your question. In addition, it is unclear whether you are describing a situation in which the Construction Manager would be acting as an agent on behalf of the public entity in "executing" such an agreement with another party, or whether, in contrast, the Construction Manager would be the party with whom the public entity would be entering into the agreement.

I would be happy to address the legal aspects of this question if you are in a position to provide me with further factual information. In the meantime, I refer you generally to the provisions of A.C.A. § 19-11-801, which govern the negotiation of construction management contracts for public entities, including school districts, as recently discussed in Opinion No. 2004-169. These provisions may address some aspects of the scenario that has given rise to your question.

Assistant Attorney General Suzanne Antley prepared the foregoing opinion, which I hereby approve.

Sincerely,

MIKE BEEBE Attorney General