The University of Tennessee, Knoxville

Tennessee County Municipal Advisory Service

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Contracts for Professional Services

Reference Number: MTAS-2007
Tennessee Code Annotated
Reviewed Date: October 09, 2015
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Professional services include legal services; fiscal agent, financial advisor, or advisory services; educational consultant services; engineering services; architectural services; and similar services by professional people or groups with “high ethical standards.” Only contracts for services performed within the professional’s field of expertise are to be considered professional service contracts. For example, leasing office space from an attorney or purchasing computer services from an accountant are not professional services and will require competitive bids.

According to the legislation, a contract is to be awarded on the basis of recognized competence and integrity, rather than on competitive solicitations. This does not stop a municipality from requesting proposals from eligible service providers and deciding the capabilities of each. Although cost must be considered in choosing the service provider, it must not be the sole factor.

When the service provider is chosen, the municipality and the provider must enter into a written contract specifying 1) the service and 2) the cost and expenses covered under the contract.

Any fiscal agent, financial advisor or advisory service that serves a municipality must meet the requirements of the Comptroller’s Office of State and Local Finance regarding conflict of interest in purchasing municipal debt.

The T.C.A. citations for this topic are T.C.A. § 12-3-1209 and § 12-4-107.