How to sell to Tennessee counties

Tennessee has 95 counties. Unlike most states, counties buy under different laws: the County Purchasing Law of 1957, the County Purchasing Law of 1983, the County Financial Management System of 1981, private acts, or a metro or charter government. Davidson, Moore and Trousdale have metro charters, and Knox and Shelby use private acts. The highway department and schools follow their own laws (CTAS, Legal Framework for Purchasing). The rules below come from the University of Tennessee's County Technical Assistance Service (CTAS), the state's county advisory service. Ask the county which law it follows.

At a glance

Who buys

Each county's legislative body is the elected county commission. Who buys depends on the purchasing law the county has adopted (CTAS):

• 1957 Law: adopted by referendum or a two-thirds vote of the commission. It creates a purchasing agent and a county purchasing commission (TCA 5-14-102).
• 1983 Law: covers the general fund of counties not under a charter, private act, the 1981 system or the 1957 Law. It names no purchasing agent.
• 1981 Financial Management System: a finance committee sets purchasing limits (TCA 5-21-120).

Without a centralized law, purchasing is split among several officials. The highway department and school system often buy separately. Find the county purchasing agent if there is one.

Goods and services

Sources: CTAS threshold pages. Like items must be added together, and purchases may not be split to avoid bidding (TCA 5-14-108(d)(2) under the 1957 Law). Counties over 150,000 people may keep earlier limits or set them by private act or charter (TCA 12-3-1204). The default threshold for a county that has not adopted a resolution was not confirmed. The highway rule does not apply in Shelby, Davidson, Knox or Hamilton.

Construction and public works

No separate county construction threshold was confirmed; ask the county which limit applies. Bids must show the contractor's license information, and for certain subcontractors too (masonry over $100,000; electrical, plumbing, HVAC and geothermal of $25,000 or more), or the bid is void (TCA 62-6-119 and 62-6-120). Public works over $50,000 need plans from a registered architect or engineer (TCA 62-2-107).

Bid security. Counties commonly ask for a 5% bid bond as a matter of practice, not statute. Construction manager services require a 10% bid bond or payment and performance bonds (TCA 62-6-129). See bid bond.

Bonds. Public works over $100,000 require a bond of at least 25% of the contract price (TCA 12-4-201). Counties often require 100% performance and payment bonds by local policy; check the bid documents.

Notice and award

Under the 1957 Law (TCA 5-14-108, per CTAS):

• Notice runs at least once in a newspaper of countywide circulation five days before bids are due, or on the courthouse public bulletin board.
• Sealed bids are opened in public.
• The contract goes to the lowest and best bidder, considering quality, conformity with specifications, suitability and delivery terms. Any or all bids may be rejected for good cause.

Advertising rules under the 1983 Law and the 1981 system, and website notice rules, were not confirmed. Check the county's notice. Professional services such as legal, fiscal agent and financial advisory work are awarded on competence and integrity, not bids (TCA 12-3-1209).

Prevailing wage

State prevailing wage applies to public highway projects paid wholly or partly with state or federal highway funds (TCA 12-4-403). Counties may not require wages above the state highway prevailing wage or state building occupational wages, or use wages and benefits as bid factors, except to keep federal funds (TCA 50-2-112 and 7-51-1802). A state prevailing wage rule for other county construction was not confirmed.

Getting paid

• Retainage: no more than 5% of the contract. It must be released within 90 days after completion or substantial completion, whichever comes first. The prime pays subcontractors' retainage within 10 days. On prime contracts of $500,000 or more, retainage goes into a separate interest-bearing third-party account. These rules can't be waived (TCA 66-34-103 and 66-34-104).
• Prompt payment: Tennessee has a Prompt Pay Act of 1985 (TCA 12-4-701 et seq.), but its terms for counties were not confirmed. Check the contract.

Cooperative purchasing and state contracts

Counties have several ways to buy without their own bid (CTAS):

• State contracts: buy from Central Procurement Office contracts without advertising or bids (TCA 12-3-1201).
• Other Tennessee local governments: piggyback on their contracts, except new motor vehicles (other than special-purpose vehicles) and transportation infrastructure (TCA 12-3-1203).
• Cooperatives: in-state cooperatives for supplies, services and construction; out-of-state cooperatives when the commission approves the master agreement, but not for motor vehicles, construction, architecture and engineering, construction materials or fuel (TCA 12-3-1205).
• Federal GSA goods, other than motor vehicles, where federal law allows (Attorney General Opinion 04-121).

See cooperative purchasing.

Preferences and required certifications

• No residency discrimination: counties may not discriminate against Tennessee-licensed contractors based on residence (TCA 62-6-111) or require local-resident hiring (TCA 12-4-117).
• Iran: bids on competitively bid purchases over $1,000 must include a sworn certification that the bidder is not on the state Iran list (TCA 12-12-111). See Iran certification.
• Israel: contracts of $250,000 or more with companies of 10 or more employees must certify no boycott of Israel (TCA 12-4-119).
• Drug-free workplace: bidders with 5 or more employees submit an affidavit (TCA 50-9-113 and 50-9-114).
• E-Verify and veteran preferences: not confirmed for counties; check the solicitation.

Architects and engineers

Counties select architects and engineers through a request for qualifications. The county picks a qualified firm, then negotiates a fair and reasonable price, moving to the next firm if they can't agree (TCA 12-4-107, formerly 12-4-106). See qualifications-based selection.

Practical tips for Tennessee

• Ask which purchasing law the county uses. It decides who buys and which rules apply.
• Have Iran and drug-free workplace forms ready. The Iran certification applies to bids over just $1,000 (TCA 12-12-111).
• Get on the purchasing agent's vendor list. Purchases under the threshold use quotes.
• Watch county commission agendas, and highway and school board agendas, which buy separately.
• Check Tennessee counties for each county's bid platform, contacts and agendas.