North Carolina

Key Agency(ies): The North Carolina Department of Administration (DOA) houses the Division of Purchase and Contract, which is the central procurement authority for most state agencies. The Secretary of Administration possesses the authority to purchase or contract for goods and services needed by executive agencies. The State Purchasing Officer (SPO) in the Division of Purchase and Contract must review and approve high value contracts.

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Key Statute: North Carolina’s procurement laws are primarily codified in Article 3, Chapter 143 of the North Carolina General Statutes (N.C. Gen. Stat.) (“Purchases and Contracts”).

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Key Regulations: North Carolina’s procurement regulations are largely contained in Title 01, Chapter 5 of the North Carolina Administrative Code (N.C. Admin. Code) (“Purchase & Contract Rules”).

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Procurement Types/Highlights: Pursuant to N.C. Gen. Stat. § 143-53.1, most contracts exceeding $100,000 must be procured using formal competitive methods.

Invitation for Bids: Sealed bidding is the default method for most purchases of goods and services. Bids are solicited via public advertisement for at least 10 days before a public opening at a designated time. North Carolina is unique, as their sealed bidding processes allow for award to be made to a bidder other than the lowest responsive, responsible bidder, under N.C. Gen. Stat. § 143-52. Agencies may use “Best-Value bidding” to allow for consideration of criteria beyond price, provided the criteria are recorded and justified.

Competitive Negotiation: North Carolina uses competitive negotiation procedures for procurements of complex services and other projects where factors other than price are essential. Agencies may issue an RFP with evaluation criteria, vendors may submit proposals, and the agency may conduct discussions/negotiations and request best and final offers. Award is made to the proposal offering the best value to the state

Small Purchases: For purchases below the formal bidding threshold ($100,000 for most agencies) informal procedures may be used. Agencies are still expected to seek competition for small purchases, typically agencies must obtain quotes from more than one vendor and document the procurement.

Bid Protests:

Regs Governing Bid Protests:

• Most bid protests in North Carolina are governed by 01 N.C. Admin. Code § 05B .1519 (“Protest Procedures”).

Timeliness Rules:

• Disappointed vendors must file a protest within 30 calendar days after receiving notice of award.

Protest Process:

• If the value of the contract is below the formal bidding benchmark (typically $100,000), the protest is handled internally by the purchasing agency. If the value exceeds the benchmark, the protest is referred to the State Purchasing Officer within DOA.
• In either case, a protest meeting will be held where the disappointed vendor and agency may present their case, and in most cases must be scheduled within 30 days after the protest is filed. After the protest meeting, a written decision is issued and must be provided to the protester within 10 calendar days after the meeting.

Appeals:

• If a protester receives an adverse decision, they may further appeal by filing a contested case at the NC Office of Administrative Hearings (OAH) under the North Carolina Administrative Procedure Act, as established in Chapter 150B of the N.C. Gen. Stat.
• OAH will assign an ALJ to conduct a de novo hearing and issue a decision.
• OAH is the final administrative remedy for protesters.

Claims: North Carolina has a specific claims process governing construction contracts as established in N.C. Gen. Stat. § 143-135.3. If a dispute arises during a construction contract while work is still in progress, the contractor may submit a verified written claim to the Director of the Office of State Construction for review. Once the contract has been performed, contractors have 60 days from the receipt of final payment to submit a formal claim for any additional payment believed to be owed. The OSC director is required to hold an in-person meeting with the contractor and issue a written decision.

Claims for non-construction contracts have a less formal process. There is no statutory or administrative claims processes for non-construction claims. However, North Carolina has waived sovereign immunity when it enters into contracts, so contractors may bring a breach of contract claim against the state in court. Lawsuits are typically filed in Wake County or in the county where performance occurred.

Suspension & Debarment: North Carolina’s suspension and debarment procedures are governed by 01 N.C. Admin. Code § 05B .1520 (“Debarment”). Causes for debarment include convictions or civil judgments for fraud, embezzlement, theft, forgery, bribery, falsification of records, or other offenses indicating a lack of business integrity.

A vendor must be provided with a written notice of the debarment, after a decision has been made. The notice must include the reasons for the debarment. If a vendor is debarred, they must be informed of their right to appeal by filing a contested case with OAH to challenge the decision.

Interesting/Distinctions: Under N.C. Gen. Stat. § 143-49(3a), service contracts exceeding $5,000,000 must be reviewed and approved by representatives from the North Carolina Attorney General’s office. A representative from the office must interpret proposed contract terms, assist in negotiation for the award of the contract, and provide advice regarding liability to the state.