Attorney General's Opinion on Force Account Estimating Procedures

Attorney General Marc Dann issued an opinion on March 5, 2008 that clarifies a number of issues relating to force account work performed by public entities in the State of Ohio. The primary issues addressed are how the costs of materials and equipment acquired under a contract and the costs of work performed by subcontractors are to be addressed when preparing project estimates.

The Attorney General interprets the law as follows:

"Because R.C. 5543.19(C) thus incorporates contracts with outside vendors – whether for materials and equipment or as subcontractors – into the force account project as a whole, the costs of materials and equipment acquired under a contract, and the costs of work performed by subcontractors, must be included in the engineer’s estimate of the project’s total cost. If the total exceeds the force account limit, then the whole project must be competitively bid."

The Attorney General's opinion appears to be contrary to the policy following by the County Engineers’ Association of Ohio. Many county engineers have been operating under the premise that:

"In preparing an estimate or reporting the cost of a force account project, a public office is only required to report force account work and not the costs of an entire project that may include work that is undertaken by private contract."

In addressing the view that had been adopted by the Crawford County Engineer, the Attorney General concluded

"Under the county’s position, however, the method of performing the work would dictate which costs would be included in the engineer’s estimate – by choosing to acquire materials or equipment by contract or to subcontract a part of the work, and excluding the costs thereof from the total cost of the project, the county could manipulate the estimate and avoid being required to competitively bid the entire project in direct circumvention of the statutory force account limits. During execution of the engineer’s cost estimate the method that will be used to perform the work has not yet been legally determined. Not only would it be premature for the engineer to try and exclude from the total cost of the project the cost of the materials, equipment and labor he deems will be acquired under contract, such exclusion of contract costs clearly misrepresents the total cost of the project."

The Attorney General’s opinion should guide the State Auditor’s office in conducting force account audits for the purpose of determining violations to the legally prescribed force account limits.

To view the entire opinion, go the Ohio Attorney General’s website at http://www.ag.state.oh.us/legal/opinions/2008/2008-007.pdf.

Posted by: John S. Higgins