Untitled Texas Attorney General Opinion ( 1989 )

March 16, 1989
Honorable James W. Smith, Jr. Opinion No. JM-1027
Frio County Attorney
P. 0. BOX v Re: Whether certain county
Pearsall, Texas 78061-1138 road contracts must be com-
petitively bid under court/
engineer system, section
3.201 of article 6702-1,
V.T.C.S. (RQ-1460)
Dear Mr. Smith:
You ask five questions which appear to have arisen in
connection with the following factual circumstances as de-
scribed in your request:
Frio County, Texas, for the last 2 years has
been operating under the Court/Engineer Sys-
tem as to the maintenance of its roads as set
out in V.A.C.S., art. 6702-1, Sec. 3.201 et
seq. And for the same length of time Frio
County has employed a licensed professional
engineer.
. . . .
The Frio County Engineer ordered emulsion for
a paving project - the ordering was done
April 7 through April 22, 1988.
The Engineer had planned the project well in
advance of the start up date of the project.
He had knowledge of the approximate amount of
this product he would need and the price of
the product.
Invoices were received by the County Auditor
on May 5, 1988, in the amount of $9,128.04
for payment on the emulsion. The Engineer
has stated that additional emulsion is needed
to complete the road paving project.
p. 5300
Honorable James W. Smith. Jr. - Page 2 (JM-1027)
The County Auditor after receiving the in-
voices questioned the Engineer as to why the
project wasnIt let out for bids. The Engi-
neer stated that the company from which the
emulsion was provided was the 'sole source'
for the product. The Auditor has refused to
pay for the emulsion received so far, con-
tending that it does not meet the require-
ments of Section 262.024, 'Exemptions,'
quoted in part supra. Furthermore in accor-
dance with Local Government Code, Section
113.901 a requisitions [sic] for the materi-
als was not attached to the account presented
to the County Auditor by the Engineer nor was
the requisition approved by the County Judge.
The County Auditor therefore in accordance
with Sections 113.064 and 113.065 of the Code
has refused to approve the claims for the
emulsion.
The first of your questions we address is:
Is there a conflict between V.A.C.S.,
art. 6702-1, sec. 3.211 and the competi-
tive bidding and proposal requirements
of V.T.C.A., Local Government Code, Sets.
262.023 and 262.024?
Your letter indicates that the focus of your concern
is an apparent conflict between article 6702-1, section
3.211, V.T.C.S., and sections 262.023 and 262.024 of the
Local Government Code, with respect to the competitive
bidding requirements applicable to a purchase of emulsion
such as you describe in your statement of facts.1 Sections
3.201 through 3.213 of article 6702-l provide for the
adoption by a county of the "court/engineer system" for the
1. In the absence of any contrary indication in your
statement of facts, we assume for purposes of this opinion
that the $9,128.04 emulsion purchase constituted a single
purchase contract. Both section 3.211 of article 6702-l and
subsection (c) of section 262.023 of the Local Government
Code provide that such a purchase, even if made in separate,
sequential, or component transactions, should be considered
a single purchase for purposes of the competitive bidding
requirements of those provisions.
P. 5301
Honorable James W. Smith. Jr. - page 3 (JM-1027)
construction and maintenance of county roads. Section 3.211
of article 6702-l provides in part:
All equipment, materials, and supplies for
the construction and maintenance of county
roads and for the county road department
shall be purchased by the commissioners court
on competitive bids in conformity with esti-
mates and specifications prepared by the
county road engineer. However, on recommen-
dation of the county road engineer and when
in the judgment of the commissioners court it
is considered in the best interest of the
county, purchases in an amount not to exceed
$5,000 may be made through negotiation by the
commissioners court or the commissioners
court's authorized representative on requisi-
tion to be approved by the commissioners
court or the county auditor without adver-
tising for competitive bids.
The Local Government Code, section 262.023, a part of the
County Purchasing Act, provides in subsection (a):
Before a county may purchase one or more
items under a contract that will require an
expenditure exceeding $5,000, the commis-
sioners court of the county must comply with
the competitive bidding or competitive
proposal procedures prescribed by this
subchapter. All bids or proposals must be
sealed.
Section 262.024 of the Local Government Code provides
exemptions to the competitive bidding requirements of
section 262.023. As your request focuses specifically on
the exception to the competitive bidding requirement for an
item that can only be obtained from one source, we will
consider only that aspect of the section 262.024 exemptions.
Section 262.024 provides in relevant part:
(a) A contract for the purchase of any of
the following items is exempt from the re-
quirement established by Section 262.023 if
the commissioners court by order grants the
exemption.
. . . .
Pm 5302
Honorable James W. Smith. Jr. - Page 4 (JM-1027)
(7) an item that can be obtained
from only one source, including:
(A) items for which competition
is precluded because of the existence
of patents, copyrights, secret pro-
cesses, or natural monopolies:
(B) films, manuscripts, or
books;
(C) electric power, gas, water,
and other utility services; and
(D) captive replacement parts
or components for equipment.
(b) If an item exempted under Subsection
(a)(7) is purchased, the commissioners court,
after accepting a signed statement from the
county official who makes purchases for the
county as to the existence of only one
source, must enter in its minutes a statement
to that effect.
Section 262.024 on its face provides exemptions only
from the section 262.023 competitive bidding requirement and
not from the competitive bidding requirement of section
3.211 of article 6702-l. The question then is whether the
provisions of sections 262.023 and 262.024 implicitly repeal
the separate competitive bidding requirement of section
3.211.
Section 311.026 of the Government Code provides the
rule of statutory construction that we believe resolves this
question:
(a) If a general provision conflicts with
a special or local provision, the provisions
shall be construed, if possible, so that ef-
fect is given to both.
(b) If the conflict between the general
provision and the special or local provision
is irreconcilable, the special or local pro-
vision prevails as an exception to the gener-
al provision, unless the general provision is
the later enactment and the manifest intent
is that the general provision prevail.
P. 5303
Honorable James W. Smith. Jr. - Page 5 (JM-1027)
Section 3.211 is a special provision applicable to the
purchase of materials for county roads under the court/
engineer system. Sections 262.023 and 262.024 a.re general
provisions applicable to most county purchases. Though the
provisions of sections 262.023 and 262.024, enacted in 1985
as part of the County Purchasing Act (then article 2368a.5,
V.T.C.S.), appear to be more recently enacted, we find no
"manifest intent" of the legislature that the provisions of
sections 262.023 and 262.024 prevail over those of section
3.211. Acts 1985, 69th Leg., ch. 641, § 1, at 2377.
Article 6702-1, including section 3.211 thereof, was first
enacted in 1983, Acts 1983, 68th Leg., ch. 288, at 1431, but
section 3.211 was amended by the legislature in the same
bill that enacted the County Purchasing Act. Acts 1985,
69th Leg., ch. 641, 5 10, at 2384. The 1985 amendment to
section 3.211 raised the limit on purchases under section
3.211 that could be made through negotiation from $1,000 to
$5,000 but left the other provisions of that section,
including those regarding competitive bidding, intact -- an
indication that the legislature intended that the provisions
of section 3.211 still apply to county purchases of "[a]11
equipment, materials, and supplies for the construction and
maintenance of county roads" under the court/engineer sys-
tem.
Thus, we conclude that the competitive biddinq re-
quirement of section 3.211 applies to a purchase, under the
court/engineer system of road materials in the amount of
over $5,000, such as the $9,128.04 emulsion purchase you
describe in your statement of facts. There being no
provision of law exempting sole source items from the
competitive bidding requirement of section 3.211 for pur-
chases of over $5,000 under that section,2 an emulsion
purchase such as the one you describe must be made on com-
petitive bids.
However, though we find that the requirement of section
3.211 (that all road material purchases under the court/en-
gineer system in excess of $5,000 be made on competitive
2. We note that section 262.003 of the Local Govern-
ment Code provides for a sole source purchase exemption from
"[a]ny law that requires a county to follow a competitive
bidding procedure in making a purchase requiring the expen-
diture of $5,000 or less." That exemption does not apply to
the emulsion purchase in question which was for $9,128.04.
P. 5304
Honorable James W. Smith. Jr. - Page 6 (JM-1027)
bids) prevails over the conflicting provisions of sections
262.023 and 263.024 (which would allow purchase of such ma-
terials, if only available from a sole source, without com-
petitive bids), we believe that otherwise the provisions of
section 3.211 and sections 262.023 and 262.024 can be con-
strued "so that effect is given to both," pursuant to sub-
section (a) of section 311.026 of the Government Code. That
is, if a court/engineer system road material purchase ex-
ceeds $5,000, it must be made on competitive bids, under
section 3.211, but it also "must comply with the competitive
bidding . . . procedures prescribed by [subchapter C, chap-
ter 262 of the Local Government Code]," pursuant to subsec-
tion (a) of section 262.023. See 35 262.025-.028 (providing
for competitive bidding notice, opening of bids, awarding of
contract, use of lump sum or unit price method).3
The second of your questions, which we now turn to, is:
The County Engineer has never been officially
authorized by the Commissioners Court in
accordance with Local Government Code,
Section 262.001 to be an agent to make
contracts on behalf of the County for 'any
3. A brief submitted in connection with your request
argues that the ruling in Attorney General Opinion JM-505
(1986) indicates that chapter 262 of the Local Government
Code does not apply to "public works contracts," which that
opinion ruled were covered instead by the provisions now
codified as chapter 271, subchapter B, of the Local Govern-
ment Code. The brief argued that we should now overrule
Attorney General Opinion JM-505. That opinion dealt with
bid, performance and payment bond requirements for public
works contracts. Since we believe, contrary to the position
taken in the brief, that the emulsion purchase contract here
is not a "public works contract," that is, a "contract for
the construction, repair, or renovation of a structure,
road, highway or other improvement or addition to real
property" under chapter 271, see 5 271.024, we do not
consider chapter 271 in connection with this opinion or
reconsider the ruling of Attorney General Opinion JM-505
with respect to its applicability. See, e.g., City of
Houston v. Glover, 89 S.W. 425 (Tex. Civ. App. 1905, writ
ref'd) (city charter provision for competitive bidding on
"public works" not applicable to contract with architect to
prepare plans for public building).
P. 5305
Honorable James W. Smith. Jr. - Page 7 (JM-1027)
other purpose authorized by law.' Would this
invalidate any and all contracts that the
County had with a supplier of road emulsion
without regard to whether the supplier was a
'sole source,' and, therefore whether or not
the competitive bidding and proposal re-
quirements of the statute are met would be
immaterial? [Thus in original.]
Section 262.001 of the Local Government Code provides:
(a) The commissioners court of a county
may appoint an agent to make a contract on
behalf of the county for:
(1) erecting or repairing a county
building:
(2) supervising the erecting or
repairing of a county building: or
(3) any other purpose authorized by
law.
(b) A contract or other act of an agent
appointed under this section that is properly
executed on behalf of the county and is
within the agent's authority binds the county
to the contract for all purposes.
It is an elementary rule of the law of agency that the
acts of an unauthorized agent do not generally bind a
purported principal. You argue in your request that the
commissioners court "has in effect ratified this contract by
subsequently accepting the benefits of the contract.1V As
regards the emulsion purchase contract, we will not address
whether or how the defective agency relationship YOU
describe could be cured so as to validate it, since we have
concluded in response to the first question addressed above
that the contract was inherently defective because it was
not made on competitive bids as section 3.211 of article
6702-l requires.
County officials' authority is limited to that
expressly conferred or necessarily implied by the constitu-
tion and statutes. Wilson v. County of Calhoun, 489 S.W.2d
393 (Tex. Civ. APP. - Corpus Christi 1972, writ ref'd
n.r.e.). Here, we have concluded that the commissioners,
whether or not acting 'through the agency of the road
P. 5306
Honorable James W. Smith. Jr. - Page 8 (JM-1027)
engineer, had no authority to contract for the purchase of
the emulsion except through the taking of competitive bids.
The contract is thus void. It cannot be lVratified" by the
commissioners court since the commissioners court cannot
bind the county by ratification of a contract the court
itself had no authority to make in the first place.
Limestone Countv v. Knox, 234 S.W. 131 (Tex. Civ. App. -
Dallas 1921, no writ).4
We also note that the establishment of apparent
authority would likely be precluded on the facts you
present, since a person dealing with the engineer would be
deemed to be on notice that the $9,128.04 emulsion purchase
was required to be made on competitive bids and that neither
the engineer nor the commissioners court had authority to
make the purchase in any other manner. See, e.o., Limestone
Countv v. Knox, suvra.
Finally, in regard to your second question we note that
you ask whether the engineer's not having been approved as
agent under section 262.001 would "invalidate any and all
contracts that the county had with a supplier of road
emulsion." Since your statement of facts does not refer to
any emulsion purchase contracts other than the one for
$9,128.04, we do not here address the validity or possible
validation of any other emulsion purchase contracts. See
footnote 1, suvra.
Two of your other questions deal with the construction
of and manner of applying the sole source exemption in Local
Government Code section 262.024. We need not reach these
questions inasmuch as we have concluded in response to the
first question that section 262.024 does not exempt the
$9,128.04 emulsion purchase contract from the requirement of
section 3.211, article 6702-1, that it be made on competi-
tive bids.
4. It would appear, however, as you suggest, that if
the county has received the benefits of the contract, even
though the contract is void for irregularities, the county
could be held liable in quantum meruit for the reasonable
value of the benefits received. Harris Countv v. Emmite,
554 S.W.2d 203 (Tex. Civ. APP. - Houston [lst Dist.] 1977,
writ dism'd); Womack v. Carson, 38 S.W.2d 184 (Tex. Civ.
APP. - Beaumont 1931), aff'd, 65 S.W.2d 485 (Tex. 1933),
aff'd on rehearing, 70 S.W.2d 416 (Tex.‘1934).
P. 5307
Honorable James W. Smith. Jr. - Page 9 (JM-1027)
You also ask:
[I]s there any civil and/or criminal liabi-
lity on anyone's part if it is determined
that this is an invalid expenditure of the
public's money?
Whether the circumstances of the emulsion purchase con-
tract may be grounds for civil or criminal liability is
ultimately a question of fact, which cannot be resolved in
the opinion process.
Various provisions of Texas law could possibly give
rise to liability. They include section 262.034 of the
Local Government Code (providing that a county officer or
employee commits an offense if he knowingly makes or autho-
rizes separate, sequential, or component purchases to avoid
the competitive bidding requirements of section 262.023 or
if he knowingly or intentionally violates subchapter C,
chapter 262 of the Local Government Code), section 39.01 of
the Penal Code (intentional or knowing violation by a public
servant of a law~relating to duties of office or employment,
or misappropriation of public property, coupled with the in-
tent to obtain a benefit or harm another), and perhaps sec-
tions 15.05 et seq of the Business and Commerce Code
(contract, combinati&, or conspiracy in restraint of trade
or commerce unlawful). See also Bus. & Corn. Code, 55 15.20
et seq., (providing for offenses, penalties and suits). Al-
at common law unauthorized agent may be personally
%ble to a perso; %,th whom he makes an unauthorized con-
tract for the damages arising therefrom. See 3 Tex. Jur. 3d
Asency 5 162. We decline to speculate, however, as to what
factual circumstances in connection with the emulsion pur-
chase might give rise to liability under these or other
laws.
Finally, we note that though you refer in your state-
ment of facts to the county auditor's refusal "to approve
the claims for the emulsion,l, citing Local Government Code
sections 113.064, 113.065, and 113.091, your request poses
no questions with respect to the auditor's action or the
construction or application of those provisions. According-
ly, we offer no opinion on these matters.
SUMMARY
Under article 6702-1, section 3.211,
V.T.C.S., a contract for a $9,128.04 purchase
of emulsion for a county road under the
p. 5308
Honorable James W. Smith. Jr. - Page 10 (JM-1027)
court/engineer system must be made on
competitive bids. There is no sole source
exemption from the section 3.211 competitive
bidding requirement, which is applicable to
such contract. Such a contract must also
comply with the competitive bidding pro-
cedures prescribed by chapter 262, subchapter
C, of the Local Government Code.
JIM MATTOX
Attorney General of Texas
MARY KELLER
First Assistant Attorney General
MU MCCREARY
Executive Assistant Attorney General
JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by William Walker
Assistant Attorney General
P. 5309