(1) Upon request of local officials, the department may agree and is fully empowered to act as agent for the local agency to carry out any phase of work authorized on the state-aid highway system;
(2) All preconstruction activities may be performed by the local agency if accomplished in compliance with reasonable standards, which shall be established by the department; or
(3) The construction of highways and roads provided for by this part shall be done in one (1) of the following methods:
(A) By award of a construction contract by a local agency in accordance with procedures approved by the department, which shall include advertisement in a newspaper having circulation in the county in which the work is to be done for at least two (2) weekly issues prior to the date of accepting bids and compliance with a competitive bid procedure consistent with existing laws for the awarding of highway or road construction contracts; or
(B) In accordance with a negotiated contract between the department and a local agency based upon unit prices to be established by the department; provided, that the department may prescribe rules and regulations necessary to ensure that counties with whom contracts are executed are equipped and qualified to do the work.
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