Do Local Governments Have to Bid Computer Software Contracts?

This article analyzes how a court might apply the bidding statutes to local government contracts for purchase of computer software, drawing analogies to similar inquiries under the sales tax law and the Uniform Commercial Code (UCC) and to cases from other states. It concludes that a North Carolina court probably would rule that prewritten computer software delivered on a tangible medium is within the scope of North Carolina’s competitive bidding statutes but a contract to design custom software is not. The article goes on to discuss several statutory exceptions to the bidding requirements that may apply to certain computer software contracts. Finally it describes some approaches to obtaining bids on computer software within the statutory framework. The article concludes that, although it is possible to purchase computer software using a competitive process that complies with North Carolina’s legal requirements, that process may lack the flexibility required to obtain the best value at the best price to meet local governments’ growing needs for information technology.