Wisconsin law requires certain public entities to engage in competitive bidding when the estimated cost of a “public works” project or “public construction” exceeds a specified dollar amount. The competitive bidding requirements were enacted to “prevent fraud, collusion, favoritism and improvidence in the administration of public business, as well as to insure that the public receives the best work or supplies at the most reasonable price practicable.” Aqua-Tech, Inc. v. Como Lake Protection & Rehabilitation District, 71 Wis. 2d 541, 550 (1976).
Depending on whether the contracting agency is the State, county, city, village, town or school district, Wisconsin law provides for different requirements on public works projects. For example, State of Wisconsin contracts are governed by Sec. 16.855, Wis. Stats., and require that contracts be let to the lowest responsible bidder for all projects on which the estimated costs of the public construction exceeds $50,000, with some limited exceptions. Other public contracts must follow the bidding requirements of Sec. 66.0901, Wis. Stats. In addition to the procedural requirements in Section 66.0901, which mandates bids be sealed and projects awarded to the lowest responsible bidder, cities, towns, counties and villages may also be subject to other requirements. Specifically, Wisconsin state law requires government entities to competitively bid all “public construction” projects when the estimated cost of the project exceeds $25,000. Wis. Stat. secs. 61.54 (villages), 62.15 (cities), 59.52 (29) (counties), 60.47 (towns). If the estimated cost exceeds $5,000 but is not greater than $25,000, the governmental entity must give a Class I notice, under Chapter 985, Stats., of the proposed construction before the contract is executed. If the project receives Local Road Improvement Program (LRIP) funding it must be competitively bid regardless of the project cost with a limited exception allowing for towns to contract with a county to perform the work if certain criteria are met. Cities and Villages with populations of 5,000 or more are precluded from utilizing County workforces to construct their road projects. School districts are subject to the procedural requirements of Sec. 66.0901, but are not required by law to competitively bid projects or award contracts to the lowest responsible bidder.
There are limited exceptions to these bid law requirements in cases of emergency, situations where cities and villages vote to authorize the performance of public works directly by their own employees, situations where labor and/or material are donated by volunteers, certain highway or bridge projects involving state or federal aid, and for towns that contract other municipalities to perform public works on their behalf. Municipalities may not avoid bid law requirements by serving as a general contractor and negotiating with subcontractors, public or private, to perform the public work. Additionally, municipalities cannot evade statutory bid requirements by dividing a project into small segments that fall under the statutory thresholds.
To find out more about Wisconsin’s bid laws or to make a complaint, please contact us.