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RELEVANT LINKS: <br />League of Minnesota Cities Handbook for Minnesota Cities 10/15/2018 <br />Expenditures, Purchasing, and Contracts Chapter 22 | Page 21 <br /> • Contracts for the construction, alteration, repair, or maintenance of real <br />or personal property. <br />Buffalo Bituminous, Inc. v. <br />Maple Hill Estates, Inc 311 <br />Minn. 468, 250 N.W.2d 182 <br />(1977). Kotschevar v. N. <br />Fork Township, 229 Minn. <br />234, 39 N.W.2d 107 (1949). <br />Cities that fail to follow the statutory requirements may face <br />consequences. If a council fails to advertise for bids when the law requires <br />competitive bidding, the contract generally is void. Courts also have <br />ordered cities to pay for any benefits they already had received to avoid <br />injustice to the party who performed work and to prevent unjust <br />enrichment of a city by its own failure to advertise for bids. <br />Fargo Foundry Co. v. <br />Village of Calloway, 148 <br />Minn. 273, 181 N.W. 584 <br />(1921). Williams v. Nat’l <br />Contracting Co., 160 Minn. <br />293, 199 N.W. 919 (1924). <br />Minn. Stat. § 471.345, subd. <br />14. <br />Councilmembers probably would not have personal liability to a contractor <br />if they acted in good faith. Unsuccessful bidders may sue to recover the <br />costs of preparing their bids if the competitive bidding process is not <br />followed properly, but may not recover damages or attorney’s fees. <br /> A. General requirements <br />Minn. Stat. § 471.345, subd. <br />3. For contracts less than the $175,000 threshold, the city council has choices <br />regarding what procedure to use. <br />Minn. Stat. § 471.345, subd. <br />4. <br /> <br />If the contract cost is expected to exceed $25,000 but not to exceed <br />$175,000, the city can choose either to use the competitive bidding process <br />or to directly negotiate the contract. If using direct negotiation, the city <br />must get at least two quotations when possible and keep them on file for at <br />least one year. <br />Minn. Stat. § 471.345, subd. <br />5. If the contract likely will not exceed $25,000, the council has discretion to <br />make the contract by either obtaining bids, quotes or simply buying or <br />selling the item on the open market. If the council chooses to obtain <br />quotes, it must, as far as practicable, obtain at least two quotes and keep <br />them on file for at least one year. If the city council decides to solicit <br />sealed bids, it must follow all the requirements of the bidding process and <br />cannot change the process midway through. <br /> B. Local improvements <br />Minn. Stat. § 429.041, subd. <br />1. <br /> <br /> <br />LMC information memo, <br />Special Assessment Toolkit. <br />For local improvement projects funded by special assessments, cities <br />generally must use the competitive bidding process if the estimated cost of <br />the contract will exceed $175,000. The process for competitively bidding a <br />local improvement project differs somewhat from other contracts, so the <br />city should consult with its city attorney to review the law before the <br />bidding process begins.