Ohio School Bidding Statute Update: Does your project require bidding?

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The bidding statute applicable to school boards in the state of Ohio is R.C. 3313.46. It requires public bidding in accordance with the statutory procedure when the school board “determines to build, repair, enlarge, improve, or demolish any school building, the cost of which will exceed fifty thousand dollars…”. The Ohio Supreme Court has stated that a public entity is not required to engage in competitive bidding in the absence of legislation expressly requiring it (73 Ohio St. 3d 590, 601). Thus, the school board bidding statute only applies to projects involving school buildings.

This, of course, begs the question: What is a “school building”?     

The term is not expressly defined in R.C. 3313.46, itself, and there are differing definitions in other statutes, in the Building Code, and in case law. The Office of the Auditor of State has also recently considered the issue.

Building Code Definition of “School Building

The definition that has commonly been applied to the bidding statute is the definition contained in the Building Code, based on the relationship between bidding and building (R.C. 1.42).Specifically, the Building Code defines a “school building” as “a structure used for the instruction of students,” (B.C. 201, Adm. Code 4101:1-2-01, R.C. 3781.16). The term “instruction” is interpreted to pertain specifically to “curricular subjects;” not extracurricular activities, where pupils are “directed, supervised, or coached,(R.C. 3313.53(B)). As a result, the Building Code definition limits the applicability of the bidding statute to the four walls of a classroom facility, which has left other improvementssuch as bus garages, board offices, parking lots, and athletic facilitiesoutside the purview of the bidding statute; allowing these other improvements to be procured under a more flexible proposal-type approach governed by Board policy.  

Other Statutory Definitions

By contrast, in two other statutes, the term “school building” is defined as “any building in which any of the instruction, extracurricular activities, or training provided by a school is conducted,” (R.C. 3313.375(A)(3)); addressing cell phone usage) and (R.C. 2925.01(S)); addressing drug offenses). Thus, if this alternative definition is applied, the applicability of the bidding statute to school board projects is significantly expanded. Historically, however, this alternative definition has not been applied to the bidding statute, as the subject matter of these statutes is unrelated to construction.  

Case Law Interpretations  

The definition of “school building” has not been squarely addressed by any court, though one court has commented on the issue in a passing statement, referred to as dicta. The project in that case involved the construction of a press box at a football stadium. The project was not bid out. In opining that the project should have been bid, the court stated that “[w]hile student activities may not occur within the press box, it is located on school grounds and is intertwined with and accessory to the football field where extracurricular activities unquestionably occur. Had the press box not been a school building, [the school board] would not have been authorized to spend public, school funds on its replacement,” (2022-Ohio-927). While the case does not reach a conclusion on the applicable definition of school building in the context of the bidding statute, the court did conclude that it should be construed more broadly than the definition contained in the Building Code.  

Auditor of State Interpretation

Recently, the Auditor of State’s Office considered this issue in the context of a concession stand and locker room project, and concluded that the definition of a “school building” should not be limited to buildings where student instruction takes place. In reaching this conclusion, the Auditor of State effectively determined that the definition contained in the Building Code is not relevant to the school bidding statute (R.C. 3313.46).  

Where does that leave us?

While there are certainly alternative legal arguments, the conservative approach, in line with the Auditor of State approach, is to interpret the school bidding statute to be applicable to any improvement related to a building or structure owned by a school board. Understandably, this approach will likely have the effect of increasing the costs of procurement for smaller installation and repair projects, as the bidding statute calls for the procurement of a design professional to put together plans and specifications for the project in most instances. In addition, there are requirements for a surety bond and liquidated damages provisions.

There is, however, a bit of a reprieve for such projects offered by the Office of the Attorney General (AG).  Specifically, the AG has recently published an opinion that purchasing consortiums, operating under R.C. 9.48, can be used as an exception to the bidding statute for “installation, maintenance, and repair” projects (OAG 2024-003).

For more information on the recent Ohio Attorney General (OAG) guidance clarifying the kinds of services that may be procured under R.C. 9.48, check out a recent article published by Bricker Graydon’s Construction Team, New Guidance for Joint Purchasing Programs Under R.C. 9.48 Sets New Allowances.

As you navigate these procurement processes, your board will want to work with legal counsel to determine the most appropriate and cost-effective strategy for your district. 

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