Untitled Texas Attorney General Opinion ( 1969 )

Honorable Wm. J. Burke Opinion No. M-366
Executive Director
Board of Control Re: Acceptance of Bid by
P. 0. Drawer GG Board of Control under
Capitol Station Art. 664-3, V.C.S.,
Austin, Texas 78711 and related questions.
Dear Mr. Burke:
In response to your opinion request concerning
the above subject, you advised that the State Board of
Control sent out bid invitations relative to cell block
equipment to be installed in the Department of Corrections.
Included in.the invitations were lists of drawings and an
extensive set of construction specifications, which in-
cluded the following statement, to wit:
"All bidders are required to submit,
as a legal prerequisite to a qualified pro-
posal, certain models and samples, as herein
required, for examination by the owner and
the architect."
Decatur Iron and Steel Company submitted a bid
of $552,000 and Southern Steel Company submitted a bid
of $724,700. Decatur failed to submit the models and
samples in accordance with the above quoted specifica-
tions, but~did submit them shortly after the bids were
received. The models and samples were acceptable to the
owner and the architect and you advised us that Decatur
met all oftthe other requirements of the bid invitations.
you have requested our opinion as to whether the
contract may be awarded to Decatur under these facts.
Certain provisions of the specifications are ambiguous
and conflicting, as mentioned in your request for this
opinion, but it is not deemed necessary to discuss these
provisions in view of the ruling we make herein.
Article 664-3, Section 5, Vernon's Civil Statutes,
authorizes the State Board of Control to purchase equipment
for the State Prison System. Section 8(e) provides that,
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Hon. Wm. J. Burke, page 2 (M-366)
"The Board shall have the authority to reject all bids,
or parts of bids, when the interest of the state will be
served thereby." Section 8(f) sets forth the matters
and facts to be considered by the Board of Control in
awarding contracts to the bidder submitting the lowest
and best bid. The.statutes, however, do not require the
Board of Control necessarily to accept the low bid as in
a true competitive
. bidding situation. Section 8(f) con-
tains no provision requiring that models and samples be
furnished as a prerequisite to submitting a bid.
The requirement that bidders submit the models
and samples for examination is thus an extra-statutory
condition, in the sense that it is not required by any
statute. You state that this was required merely for
"purposes of verification, rather than the determination
of whether or not the bid was qualified." While the true
purpose of the requirement, or the essentiality thereof,
may raise a fact question which this office is without
power'to resolve, nevertheless the ultimate facts that
~a11 parties have acted in good faith and that no fraud
or overreaching is involved appear to ,be established
without dispute. Where the requirement is found to be
truly of the essence of the contract for the bidders,
under statutes requiring the acceptance of the lowest
and best bid, a public'body cannot waive the require-
ments. Case v. Inhabitants of Trenton, 74 A 672 (N.J.
1909L If the models or samples were, in fact, not such
a material requirement of the contract but, looking
through form to substance, were mere1.y,forthe purpose
of verification, as you advise, then it is the opinion
of this office that the irregularity above-mentioned
may be waived by the Board,of Control, upon a showing
that all parties acted in good faith and no fraud was
involved, particularly since the models were furnished
and examined prior to the awarding of a contract.
In 13 Tex.Jur.Zd 592, Contracts, Sec. 329, it
is stated that a party to a contract may waive performance
of the agreement; or a breach of any of the provisions that
are for his benefit; thus, he may waive the performance of
a condition precedent, or a failure to perform within the
'timeprescribed. In the case of Gaynor Construction Company
v. Board of Trustees, 233 S.W.Zd 472 (Tex.Civ.App. 1950
error ref.) the Board of Trustees,a,ccepteda late bid and
awarded a c&tract to the late bidder. The court held that
the Board of Trustees could waive the irregularity in the
time for submission of the low bid, if it acted in good
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Hon. Wm. J. Burke, page 3 (~-366)
faith, and there was no fraud involved, since the general
powers of the Board prescribed by Article 2752 authorized
it to enter into a contract with Gaynor.
If the Board of Control finds that the model re-
quirement above discussed was not essential or material
for the bidders to be on equal footing in submitting their
bids, and that it w,as required only for purposes of verifica-
tion! and if the equipment of Decatur meets all the other
requirements of the bid invitations, it is our opinion that
the mere fact that thenmodels and samples were submitted
shortly af~terthe bids were opened will not prevent award-
ing the contract to Decatur.on the basis of its substantial.
compliance with the bid requirements. The Board of Control
is vested with some discretion in the area of bidding re-
quirements under Article 664-3, Sec. 8(f), such as the
determination of the "quality, availability, and adapt-
ability" of the item as well as the "number and scope of
conditions attached to the bid." The court will not
interfere.in its exercise of that discretion except for
some cause which the law recognizes as sufficient to in-
validate a contract. 49 Am.Jur. 277, States, Territories,
and Dependencies, Sec. 63. In Attorney General's Opinion
No. C-676 (1966), we held that under Article 664-3 the
Board of Control could in the exercise of its discretion
acceat for verification ourooses additional data after
bid opening without jeopardizing the status of the bid.
See also: Overstreet v. Houston County, 36,5S.W.Zd 409
(Tex.Civ.App. 1963, error ref., n.r.e.) and Headlee v.
Fryer, 208 S.W. 213 (Tex.Civ.App. 1919, error dism.).
SUMMARY
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The Board of Control has the authority
to waive any extra-statutory bid requirements,
'which are'found not to be material to the
proper determination of the lowest and best
bid as required by the statute. If the Board
of Control is satisfied that the submitted bid
of Decatur Iron and Steel Company meets all of
the other requirements of the bid invitation,
itbeing established without dispute that no
fraud or overreaching was involved, and that
'all parties acted in good faith, the mere fact
that models and samples were submitted after
the bids were opened will not otherwise prevent
the awarding of the contract to.Decatur if such
irregularity is found not to be of essential
materiality.
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Hon. Wm. J. Burke, page 4 (M-366)
Prepared by Jack Sparks
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Kerns Taylor, Chairman
George Xelton, Vice-Chairman
James McCoy
2. T. Fortescue
Scott Garrison
James Broardhurst
John Banks
W. V. GEPPERT
Staff Legal Assistant
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