Untitled Texas Attorney General Opinion ( 1981 )

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The Attorney General of Texas
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March 9, 1981
Honorable Mike Driscoll Opinion No. MW-299 ’
Harris County Attorney
1001 Preston, Suite 634 Re: Authority of a county to teke
Houston, Texas 77002 a bid which provides for escalation
in costs
Dear Mr. Driscoll:
The Commissioners Court of Harris County is required by law to award
certain contracts after taking competitive bids. See, c.c., V.TE.S. arts.
1658, 1659, 1659a, 2358-6L 2368a. Contracts must generally be awarded to
the lowest and best bidder. You advise that instead of stating a lump sum
bid in the bid form furnished by the county, some bidders insert an amcunt
but also include an escalation clause which provides for price, increeses
based upon increases in their costs. We understand that the bid form which
Harris County uses does not invite the use of escalation clauses. You have
asked the following questions:
L Is Harris County authorized to accept a bid which
the bidder has qualified to provide for escalation
in costs during the period of the contract, if the
total bid can be caloulatedt
2. Is Harris County authorized to accept a bid which
the bidder has qualified to provide for escalation
in costs during tha period of the contract, if the
total bid can not be calculated?
3. Is Harris County authorized to accept an alternate
bid not based on the specifications?
In Texas Highway Commission v. Texas Association of Steel Importers.
Inc., 372 S.W. 26 525, 527 (Tex. L863), the Texas Supreme Court, quotmg
% Sterrett v. BelL 240 S.W.2d 516, 520 (Tex. Civ. App. - Dallas 1951. no
writ), observed thet competitive bidding requires:
due advertisement, giving opportunity to bid, and
contemplates a bidding on the seme undertaking upon
each of the same material items covered by the
contract; upon the sB.me thing. It requires that all
Honorable hIike Driscoll - Page Two
bidders be placed upon the same plane of equality end that they
each bid upon the same terms and conditions involved in all the
items and parts of the contract, and that the proposal specify as
to all bids the same, or subs’tantially similar specifications. Its
purpose is to stimulate competition, prevent favoritism and
secure the best work and materials at the lowest practicable
price. . . . There can be no competitive bidding in a legal sense
where the terms of the letting of the contract prevent or
restrict competition, favor a contrector or materialman, or
increese the cost of the work or of the meteriek or other items
going in to the project.
See ako Attorney General Opinion H-24 (1973).
In light of the views expressed in the foregoing quotation, we think it is readily
apparent that the commissioners court may not accept a bid which is not based upon
advertised specifications. To do so would be to violate a fundamental tenet of the
competitive bidding process, which is that bidders must have an opportunity to bid cn
equai terms and to have their bids judged according to the same’standards. Further.
the requirement that bids be evaluated in accordance with the same criteria must be
observed if the commissioners court is to fulfill its statutory mandate to award
contracts to the lowest and best bidder. This requirement cannot be satisfied when a
bid is qualified in a manner not contemplated by the bid invitation and specifications,
i&,. when it is not based upon the criteria by which all bidders are given to understand
their bids will be judged.
We therefore conclude that Harris County may not accept a bid which contains
an escalation clause when such clauses are not mentioned in the advertised
specifications. We do not address the question of whether the invited use of any
particular escalation clause would be permissible, Accordingly, based upon the facts
you have submitted, we anewer your questions in the negative.
SUMMARY
The Commissioners Court of Harris County is not authorized
to accept a bid which is not based upon advertised specifica-
tions. Because the bid form which Harris Camty uses does not
mention escalation clauses, the commissioners court may not
accept a bid which contains an escalation clause, regardless of
’whether the total bid can be calculated.
(rMARK WHITE
Attorney General of Texas
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Itonornble Mike Driscoll - Page Three
JOHS W. FAINTER. JR.
First Asslstent Attorney General
RICHARD E. GRAY III .
Executive Assistant Attorney General
Prepared by Jon Bible
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Susan L. Garrison, Chairman
James Allison
Jon Bible
Rick Gilpin
Bruce Youngblood
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P. 956