Is it possible for a municipality
to avoid the competitive bid law by agreeing to purchase or
lease-purchase property which a private developer proposes to develop or
renovate on behalf of the municipality?
No. This is known as "turnkey financing,"
and it may not be used to circumvent the competitive bid laws. In a
typical "turnkey" project, a private developer proposes to construct or
renovate a building according to the needs and specifications of a
municipality and the municipality agrees to subsequently purchase the
building. Such a project would be subject to the bid laws at the time
that an agreement, whether formal or informal, is consummated which
obligates the municipality to purchase or lease the completed structure.
56 Op. Att'y Gen. 181 (1967); Contracts # 358 & # 316.