February 25, 1983

Mr. Roger A. Schiager 
City Attorney 
610 Security Building 
101 South Main Avenue 
Sioux Falls, South Dakota 57102

Official Opinion No. 83-11

Park board member's ability to bid on park project

Dear Mr. Schiager:

You have requested an Official Opinion based on the following factual situation:

FACTS: 

The City of Sioux Falls has a Park Board established pursuant to SDCL 9-38-10.  Two of the present Park Board members are contractors.  This year there potentially will be a large contract let for bid for construction of a building by the Park Board.  Conceivably, one of these members may bid and may be low bidder.

Based upon the above factual situation, you have asked the following question:

QUESTION: 

May a member of a City Park Board be a bidder on one of the Board's construction projects?

The general rule is that a local officer cannot be interested in a contract entered into by the local governmental entity.  See SDCL 6-1-1.  There are, however, exceptions to that general rule. Those exceptions are set forth in SDCL 6-1-2 which provides in part that: 

The provisions of § 6-1-1 shall not be applicable when the contract is made pursuant to any one of the conditions set forth in the following  subdivisions hereof, without fraud or deceit; but, such contract shall nevertheless be voidable if the provisions of the applicable subdivision were not fully satisfied or present at the time such contract was entered into: 

     . . . 

(4)  Any contract with any firm, association, corporation, or cooperative association for which competitive bidding is required by law, and where more than one such competitive bid is submitted.

Assuming your building will cost in excess of $3,500.00, competitive bidding for the contract would be required.  See SDCL 5-18-3.  Consequently, the exception enumerated above in SDCL 6-1-2(4) is applicable.  The other requirements that must be met pursuant to SDCL 6-1-2 before a Park Board member may win the bid for your building project are that the contract be free from fraud or deceit and that there be more than one competitive bid submitted.

The answer to your question, therefore, is YES subject to the provisos listed above.  Further support for this conclusion can be found in 1963-1964 A.G.R. 292 and 1967-1968 A.G.R. 81.

Respectfully submitted,

Mark V. Meierhenry
Attorney General