If a city's existing service contract has run its only built-in extension, can the city renew it without putting it back out for bids?

Plain-English summary

Senator Larry Teague described a familiar municipal-contracting scenario. A city had competitively bid a five-year service contract. The contract permitted one extension, which the city had already exercised. There was no second extension provision, but there was a clause letting the parties amend the contract by mutual written agreement. The city wanted to keep the contractor in place. Could it do that without going back out to bid?

AG Leslie Rutledge said yes, on a pure-statutory-text reading. Ark. Code Ann. § 14-58-104(b) provides:

The municipal governing body of a city of the first class, city of the second class, or an incorporated town may renew or extend the term of an existing contract without soliciting bids.

The statute uses the word "may," distinguishes between "renew" and "extend," and ties the authority to the contract being "existing." Nothing in the statute conditions that authority on whether the contract itself has a renewal clause. Under Arkansas's statutory-interpretation rules, when text is plain and unambiguous, the meaning is taken from the words used and additional terms are not implied. The AG cited Brock v. Townsell, 2009 Ark. 224, 309 S.W.3d 179, Thompson v. Younts, 282 Ark. 524, 669 S.W.2d 471 (1984), MacSteel v. Arkansas Oklahoma Gas, 363 Ark. 22, 210 S.W.3d 878 (2005), and Friar v. Erwin, 2014 Ark. 487, 450 S.W.3d 666, for the standard rules.

So the city could either renew the existing contract under the statute or amend the contract by mutual agreement to extend its term. The AG declined to address the second route as a contract-law question, noting her office does not opine on the terms of particular contracts.

The opinion is short because it is essentially a single-issue statutory-interpretation question, and the text was clear on its face. The practical takeaway: an Arkansas municipality's authority to renew or extend without rebidding came from the statute, not from contract drafting, and the statutory grant overrode any silence in the original agreement.

Currency note

This opinion was issued in 2020. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Did the city need to find a renewal clause in the existing contract to use § 14-58-104(b)?
No. The statute did not condition the renew-or-extend authority on the contract containing a renewal provision. The grant of authority came directly from the statute and was independent of the contract's drafting.

What is the difference between "renew" and "extend" under § 14-58-104(b)?
The statute used both verbs. Reading them as the AG did (giving each its plain meaning), an "extension" continues an existing contract for an additional term, while a "renewal" creates a new term on the same contract. Both routes were available and both could be done without rebidding.

Could the city have used the contract's mutual-amendment provision instead?
The AG declined to address that question on the grounds that her office does not opine on the terms of particular contracts. As a practical matter, where the statute itself permits renewal or extension without bidding, the easier path was usually to invoke the statute directly rather than negotiate an amendment.

Did the AG address whether the contractor was getting a free pass on quality or cost-effectiveness?
No. The opinion addressed only the procedural question of whether bids were required. The substantive question of whether renewing was a good deal for the city, and whether the original competitive bid was still a fair market benchmark, is a question for the city and its constituents.

What types of municipalities did this apply to?
Cities of the first class, cities of the second class, and incorporated towns. The statute applied uniformly across the three categories of Arkansas municipal governments.

Background and statutory framework

Ark. Code Ann. § 14-58-104 governed municipal purchasing and contracting. Subsection (b), which Senator Teague's question targeted, stood as a narrow but explicit exception to whatever bidding rules a city would otherwise apply: when there was already an "existing contract," the governing body could extend or renew it without going back out for bids.

The Arkansas Supreme Court's statutory-interpretation rules required the AG to read § 14-58-104(b) as it was written. Under Brock v. Townsell and Thompson v. Younts, courts construe a statute "just as it reads" without restricting or expanding the plain meaning. Under MacSteel v. Arkansas Oklahoma Gas, when the language is plain and unambiguous, no resort to interpretive canons is needed. Under Friar v. Erwin, statutory interpretation should not include "implying provisions that simply are not present in the statutory language." On those rules, reading a contract-clause prerequisite into the statute would be improper.

The contract-law side of the question (whether the city could use the mutual-amendment clause to extend) sat in a different lane. AG opinions on contract terms are typically declined under the longstanding policy reflected in Op. Att'y Gen. 2018-080.

Citations

Statutes:

• Ark. Code Ann. § 14-58-104 (municipal purchasing)
• Ark. Code Ann. § 14-58-104(b) (Supp. 2019) (renewal/extension without bidding)

Cases:

• Brock v. Townsell, 2009 Ark. 224, 309 S.W.3d 179 (statute construed "just as it reads")
• Thompson v. Younts, 282 Ark. 524, 669 S.W.2d 471 (1984) (no strained construction)
• MacSteel Div. of Quanex v. Ark. Okla. Gas Corp., 363 Ark. 22, 210 S.W.3d 878 (2005) (plain language controls)
• Friar v. Erwin, 2014 Ark. 487, 450 S.W.3d 666 (no implied provisions)

Prior opinion referenced:

• Op. Att'y Gen. 2018-080 (office's policy not to opine on specific contract terms)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2020-026
September 2, 2020
STATE OF ARKANSAS
THE ATTORNEY GENERAL
LESLIE RUTLEDGE
The Honorable Larry R. Teague
State Senator
P. O. Box 903
Nashville, AR 71852

Dear Senator Teague:

This is in response to your request for an opinion concerning Ark. Code Ann. § 14-58-104(b), which addresses the renewal or extension of municipal contracts without soliciting bids. As background for your questions, you provide the following information regarding an existing contract between a city and a service provider:

The contract at issue is an existing contract with an initial term of five years that was competitively bid. The contract expressly provided for an extension of the five-year term, which was exercised by the City; however, the contract does not have a specific provision for another extension and the contract will end at the conclusion of the existing term. The contract neither provides for, nor does it prohibit renewal of the contract or another extension of the contract term. However, the contract expressly allows the parties to modify or amend the contract by written mutual agreement.

You have posed the following questions against this background:

1) Because Ark. Code Ann. § 14-58-104(b) allows not only for the extension of an existing contract, but also for the "renewal" of an existing contract without soliciting bids, may the city renew the existing contract without soliciting bids, even though the existing contract does not expressly provide for another extension?

2) Under Ark. Code Ann. § 14-58-104(b), pursuant to the contract provision that allows the parties to modify or amend the contract, may the city modify or amend the contract to extend the term of the existing contract without soliciting bids?

RESPONSE

It is my opinion based on established rules of statutory interpretation that the answer to your first question is "yes." I believe Ark. Code Ann. § 14-58-104 authorizes a city to renew (or extend) an existing contract without soliciting bids, regardless of whether the contract contains a provision for renewal or extension. A response to your second question appears unnecessary in light of this response, other than to note that this office ordinarily does not opine on the terms of particular contracts. Matters of contract law must be addressed by the parties in consultation with individual counsel.

DISCUSSION

Question 1: Because Ark. Code Ann. § 14-58-104(b) allows not only for the extension of an existing contract, but also for the "renewal" of an existing contract without soliciting bids, may the city renew the existing contract without soliciting bids, even though the existing contract does not expressly provide for another extension?

Section 14-58-104 addresses municipal purchasing. The subsection you ask about specifically allows cities and towns to renew or extend existing contracts without soliciting bids:

The municipal governing body of a city of the first class, city of the second class, or an incorporated town may renew or extend the term of an existing contract without soliciting bids.

Your question is one of statutory interpretation not of Arkansas contract law. This opinion does not address the terms of the contract or any other matter of contract law.

A statute must be construed "just as it reads," without restricting or expanding the plain meaning of its text. When the language of the statute is plain and unambiguous, there is no need to resort to the rules of statutory interpretation. Statutory interpretation, therefore, should not include implying provisions that simply are not present in the statutory language.

Section 14-58-104 plainly authorizes a city to renew or extend an existing contract without soliciting bids. There is no indication in the statute that this authority depends upon the terms of the contract. Based on its plain meaning, section 14-58-104 authorizes a city to renew or extend an existing contract without soliciting bids, regardless of whether the contract contains a provision for renewal or extension. The answer to your question is, therefore, "yes."

Question 2: Under Ark. Code Ann. § 14-58-104(b), pursuant to the contract provision that allows the parties to modify or amend the contract, may the city modify or amend the contract to extend the term of the existing contract without soliciting bids?

A response to this question appears unnecessary in light of my response to your first question.

Sincerely,

LESLIE RUTLEDGE
Attorney General