State Departments, Institutions and Agencies; Purchase and Contracts; Consultant Contracts

May 17, 1979

Subject:

Requested By:

Thomas E. Todd State Purchasing Officer Department of Administration

Questions:

Are State agencies required to obtain the approval of the Governor before contracting for consultant services with the Research Triangle Institute?
Can State agencies contract for consultant services with the Research Triangle Institute without complying with the general purchase and contract law and rules of the Advisory Budget Commission adopted pursuant thereto?

Conclusions:

Article 3C of Chapter 143 of the General Statutes places certain restrictions on State agencies desiring to obtain consultant or advisory services from outside contractors. Prior to contracting for such services, the proposed contract is required to be approved in writing by the Governor —

G.S.: 143-64.20(b). Under G.S. 143-64.22, all consultant contracts made by State agencies must be made with other State agencies if there is an agency available to perform such services. Where no State agency can provide the necessary services, the Department of Administration is required to assure that competition, if available, is sought with the contract being awarded to the State’s best advantage. G.S. 143-64.22.
G.S.: 143-64.24 makes certain exemptions from the provisions of Article 3C. Included among these exemptions is the Research Triangle Institute. The question which has arisen is whether or not State agencies and institutions proposing to contract with the Research Triangle Institute for consultant services are required to comply with Article 3C and obtain the approval of the Governor.

The Research Triangle Institute is a private, non-stock, non-profit, charitable and educational corporation organized by the Chairmen of the Boards of Trustees and the Presidents of the Consolidated University of North Carolina and Duke University to conduct research and operate in close proximity with the consolidated University of North Carolina and Duke University. Nothing in the General Statutes, nor in the Articles of Incorporation of the Research Triangle Institute, supports the proposition that the Research Triangle Institute should be considered a State agency as defined by G.S. 143-64.20

The primary thrust of Article 3C is to require approval of the Governor before State agencies contract with non-State sources for consultant services. G.S. 143-64.24, as originally enacted in 1975, exempted from this requirement the General Assembly, special study commissions, the Institute of Government, and attorneys and physicians performing contractual services for the State. A 1977 amendment added the Research Triangle Institute to this list of exemptions. As the Research Triangle Institute is a private corporation, the General Assembly could not have required it to obtain the Governor’s approval before it contracted for consultant services. Therefore, the only reason for the inclusion of the Research Triangle Institute among the list of exemptions would have been to exempt State agencies from complying with Article 3C when such agencies contract with the Research Triangle Institute for consultant services.

The second question is whether or not State agencies are required to comply with Article 3 of Chapter 143 (the general Purchaes and Contract law) when they desire to contract directly with the Research Triangle Institute.

Although G.S. 143-64.24 exempts State agencies dealing with the Research Triangle Institute from the requirements of Article 3C, such agencies are still required to comply with Article 3 and the rules of the Division of Purchase and Contract as approved by the Advisory Budget Commission. Under this construction, State agencies proposing to contract with the Research Triangle Institute are required to comply with regulations approved by the Advisory Budget Commission pertaining to the procurement of contractual services.

We note in conclusion that the exemption raises questions regarding the applicability of Article I, § 32, Constitution of North Carolina, prohibiting private emoluments. Constitutionality will be presumed until the contrary clearly appears. In Re Truitt, 269 N.C. 249 (1966).

Rufus L. Edmisten Attorney General

T. Buie Costen Special Deputy Attorney General