12 Miss. Code. R. 6-10.109.01

Current through December 10, 2024

Section 12-6-10.109.01 - Construction Defined

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.

12 Miss. Code. R. 6-10.109.01

Adopted 1/1/2018