Generally, North Carolina procurement law requires a three-bid minimum for formal construction projects. Effective July 7, 2026, the General Assembly created a temporary exception to the three-bid minimum for certain formally bid construction projects. Under the new G.S. 143-132(a1), which was enacted through Section 22.6.(a) of the 2026 Appropriations Act, public entities may award construction contracts for qualifying water systems and sewage disposal systems after receiving only two bids, rather than three. This two-bid minimum is scheduled to expire on January 1, 2031.
This blog post explains the scope and operation of the new law, places the amendment in the broader context of North Carolina's longstanding three-bid requirement, and briefly examines how North Carolina's bid minimum requirements compare to other states.
North Carolina’s Three-Bid Minimum and the Authorization of a Temporary Two-Bid Minimum for Water and Sewer Construction Contracts
One unique feature of North Carolina procurement law is the three-bid minimum for formal construction contracts, found in G.S. 143-132. This requirement applies to construction or repair projects subject to the formal bidding statute, G.S.143-129.[1] The three-bid minimum does not apply to formal contracts for the purchase of goods or informal construction or repair contracts.
G.S. 143-132 also explains necessary procedures if three bids are not received. If fewer than three competitive bids are received after the first advertisement for bids, the contract cannot be awarded. Instead, the statute requires the project be advertised a second time. Upon readvertisement, if fewer than three bids are received, the contract can be awarded to the lowest responsive, responsible bidder.
Section 22.6.(a) of the 2026 Appropriations Act authorizes the State and local governments to use a two-bid minimum for construction contracts awarded under the formal bidding statute for water systems or facilities or sewage disposal systems or facilities. This limited two-bid minimum is codified at G.S. 143-132(a1) and is effective from July 7, 2026 through December 31, 2030. Unless extended by the General Assembly, the traditional three-bid minimum will again apply to all projects subject to G.S. 143-132, starting January 1, 2031.
The statute adopts broad definitions of "water systems or facilities" and "sewage disposal systems or facilities." “Sewage disposal systems or facilities” means sewage disposal systems or facilities, including all plants, works, instrumentalities, and properties used or useful in the collection, treatment, purification, or disposal of sewage. “Water systems or facilities” means water systems or facilities, including all plants, works, instrumentalities, and properties used or useful in obtaining, conserving, treating, and distributing water for domestic or industrial use, irrigation, sanitation, fire protection, or any other public or private use. These definitions encompass the infrastructure traditionally operated by public water and wastewater utilities, including treatment facilities, collection systems, and distribution infrastructure.
The new two-bid minimum operates much like the existing three-bid minimum; if a bidding entity does not receive two bids, the entity must readvertise the solicitation. Upon the second advertisement, if the bidding entity does not receive two bids, it can award the contract even if only one bid is received.
The History of North Carolina’s Three-Bid Minimum and its Comparison with Other States’ Minimums
North Carolina’s three-bid minimum has been law for nearly 100 years, since the enactment of Session Law 1931-291. (In fact, there was originally a five-bid minimum for construction or repair contracts above $5,000.) Since then, the bid minimum was recodified at its current location in G.S. 143-132 when Article 8 of Chapter 143 of the General Statutes was rewritten in 1967 by Session Law 1967-860. Briefly, from 1977 to 1979, public entities were allowed to award construction or repair contracts after receiving only two bids without readvertising if they determined “it would not be in the public interest to readvertise.” This allowance was enacted by Session Law 1977-644, but repealed less than two years later by Session Law 1979-182.
In subsequent years, legislation has been introduced or passed to modify the three-bid minimum. In 1999, a local act authorized several counties (including municipalities and school administrative units within those counties) to apply a two-bid minimum to projects where the entire cost of construction or repairs was less than $500,000. (At the time, the formal bidding threshold for construction or repair—and therefore the threshold at which the three-bid minimum applied—was $100,000.) More recently, in 2025, House Bill 352 initially proposed to exempt public infrastructure projects for the Towns of Holly Springs and Fuquay-Varina from competitive bidding requirements. A later committee substitute to the bill proposed to allow a two-bid minimum—rather than the three-bid minimum—for construction contracts under $10 million for water systems or facilities or sewage disposal systems or facilities. House Bill 352 eventually stalled in a Senate committee in June of 2025.
North Carolina is one of the few states to require receipt of a specified number of bids for formal construction and require readvertisement if the specified number is not received. In Ohio, for capital improvement projects awarded by the state horseracing commission, Ohio’s administrative code states "no contract will be awarded to a bidder unless a minimum of three bids have been received before the deadline." OAC 3769-2-33. If three bids have not been received, the notice must be reissued, the deadline extended, and the process repeated until at least three bids are submitted. Id. In Montana, public construction contracts above $300,000 can be awarded only after two formal bids have been received, if such bids are “reasonably available.” Mont. Code Ann. 18-2-103 (3). The statute does not specify procedures if fewer than two bids are received and the clause about availability seems to suggest flexibility for the requirement. Interestingly, this same statute imposes a three-bid minimum (if bids are reasonably available) for informal construction contracts costing between $50,000 and $150,000. Id. at (4)(a). Vermont’s statute governing public construction for state projects above $50,000 requires inviting three or more bids. 29 V.S.A. § 161. Then, the contract can be awarded to one of the three lowest responsible bidders. This language implies a three-bid minimum, but it is not as explicit as North Carolina law. It is unclear whether the State of Vermont could award a contract if fewer than three bids are received.
Most other states’ laws require competition for public procurements, but procedural requirements vary widely, including the number of bids that must be solicited or received. Some states require public entities to obtain three quotes for low dollar contracts. For example, small purchases and emergency purchases by the Alabama Department of Transportation require the solicitation of at least three quotes, but this minimum does not extend to formal competitive bidding. Ala. Admin. Code r. 450-12-1-.05. Otherwise, Alabama law allows for award of a contract where only one responsive bid was received and time does not allow for readvertisement, among other conditions. Ala. Admin. Code r. 355-4-3-.01(2)(c).
In other states, receipt of a small number of bids for a public contract authorizes—but does not require—an entity to readvertise. In Connecticut, state law provides options to the Commissioner of Administrative Services when fewer than three bids are received for State public works projects under $1.5 million; the Commissioner can negotiate a contract with any of the contractors submitting a bid, or reject the bids received and rebid the project. C.G.S.A. § 4b-91(a)(5)(C). In several states, if an entity chooses not to readvertise, it typically must document some or all of the following: the numbers of bidders solicited, that vendors had a reasonable opportunity to respond, the entity’s efforts to comply with the law, and that costs are reasonable and fair. As an example, Idaho law requires solicitation of three bids for public works projects in the state’s informal range (below $250,000). I.C. § 67-2805. When fewer than three bids are considered, a description of the efforts undertaken to procure at least three bids must be documented by the political subdivision. Id. In Maryland, certain categories of “small procurements” under $100,000 require state agencies to obtain offers from at least two vendors, but if a single offer or bid is received, an award can be made if the procurement officer determines the price is fair and reasonable and other vendors had an opportunity to respond. COMAR 21.05.07.06. For Mississippi state agencies procuring professional or personal services, an award can be made when only one responsive bid is received if the agency procurement officer finds that the price is fair and reasonable, that other prospective bidders had reasonable opportunity to respond, or there is not adequate time for re-solicitation. 27 Miss. Code. R. 1-3-102.
Although North Carolina law does not provide such flexibility for formal construction contracts, G.S. 143-132(a1) may provide some temporary relief and reduce the likelihood that water and sewer construction projects will require a second advertisement before award. If you have questions about North Carolina’s bid minimums or construction contracting, drop me a line at cuccaro@sog.unc.edu.
[1] However, contracts for dredging services in the State's coastal waters are exempt from the three-bid minimum pursuant to Session Law 2021-92.
