Untitled Texas Attorney General Opinion ( 1988 )

THE ATTORNEY GENERAI.
Oti TEXL-LS
April 1, 1988
Honorable Mike Driscoll Opinion No. JM-881
Harris County Attorney
1001 Preston, Suite 634 Re: Whether Harris County
Houston, Texas 77702 may require in its bid
specifications for con-
struction contracts that a
minimum of 25 percent of
the work be performed by
the contractor8s employees
(RQ-1230)
Dear Mr. Driscoll:
Your ask our opinion about the following question:
May Harris County include a provision in
its bid specifications for county
construction contracts which requires that a
minimum of twenty-five percent of the work
be performed by the contractor's employees?
We conclude that the county is not permitted to include
such a provision in bid specifications for construction
contracts.
Construction contracts entered into by the county
requiring an expenditure exceeding $5,000 must comply with
the County Building Authority Act, the County Certificate
of Obligations Act, and the County Purchasing Act,
chapters 293, 271, and 262 of the Local Government Code,
see also Acts 198.7, 70th beg., ch. 722, 55; Acts 1987,
70th Leg., ch. 785, 91; and Acts 1987, 70th Leg., ch. 802,
51 (amending article 2368a.5, V.T.C.S., the County
Purchasing Act, subsequent to the repeal and codification
of the article in the Local Government Code).
Section 262.025 of the Local Government Code provides
that a "competitive bidding notice" must be published in
the public press prior to the deadline for the acceptance
of bids. The notice must contain:
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Honorable Mike Driscoll - Page 2 (JM-881)
(1) the snecifications describing the
item to be purchased or a statement of where
the specifications may be obtained;
(2) the time and place for receiving and
opening bids and the name and position of
the county official or employee to whom the
bids are to be sent:
(3) whether the bidder should use lump-
sum or unit pricing:
(4) the method of payment by the county:
and
(5) the type of bond required by the
bidder. (Emphasis added.)
Local Gov't Code 5262.025. Nothing in this section
authorizes the inclusion of a provision in specifications
limiting the amount of work which may be performed by a
subcontractor of a successful bidder. -,
The Local Government Code requires a county to either
award a contract "to the resnonsible bidder who submits
the lowest and best bid" or to "reject all bids" and
solicit for new ones. Local Gov't Code 5262.027.
However,
[a] contract may not be awarded to a bidder
who is not the lowest dollar bidder meeting
specifications unless, before the award,
each lower bidder is given notice of the
proposed award and is given an opportunity
to appear before the commissioners Court and
present evidence concerning the lower
bidder's responsibility.
Local Gov't Code 5262.027. As one appeals court has
noted, the statute has one paramount objective:
[T]o stimulate competition, prevent favorit-
ism and secure the best work and materials
at the lowest practicable price, for the
best interests and benefit of the taxpayers
p. 4305
c
Honorable Mike Driscoll - Page 3 (JM-881)
and property owners. 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
contractor or material man, or increase the
cost of the work or of the materials or
other items going into the project.
Sterrett v. Bell, 240 S.W.2d 516, 520 (Tex. Civ. App. -
Dallas 1951, no writ). The Supreme Court quoted this
language with approval in Texas Hiahwav Commission v.
Texa Association of Steel Imnorters. Inc., 372 S.W.2d 525
(Texs 1963). In this case, the court considered a highway
department rule that restricted bids to those bids from
contractors furnishing construction materials manufactured
only in the United States. The court rejected that rule
as a violation of a competitive bidding statute (V.T.C.S.
art. 6674h), similar to the statute under consideration
here. The court stated that an administrative body
subject to a competitive bidding statute must act only to
promote the unmistakable legislative policy favoring
unrestricted competition for public contracts. 372 S.W.Zd
at 529. See Attorney General Opinions MW-439 (1982):
MW-344, MW-296 (1981), MW-139 (1980): H-1219 (1978);
H-1086, H-972 (1977). a Attorney General Opinion JM-712
(1987) (legislature may vary policy of Strict Competition
by providing exceptions to key principle of competitive
bidding statute.)
The county thus has no power to limit the competition
generated by bidding. Nor may it reject a bid by imposing
a condition for the selection of the lowest responsible
bidder when the condition could not be used to limit the
solicitation of the bid. Attorney General Opinions
H-1219; H-1086.
of course, the county is not required to accept a bid
merely because it is the lowest. The statute only
requires that the county accept the lowest and best bid
proffered. The county may make an informed, non-arbitrary
decision based on the facts that a particular bid is not a
responsible one. Corbin v. Collin Countv commissioner's
Court, 651 S.W.2d 55 (Tex. APP. - Dallas 1983, no writ).
This does not mean that the county may determine that
contractors who intend to subcontract some of the work due
under a contract cannot submit responsible bids. Such a
determination would be flatly illegal, either as an
advance disqualification for bids or as a rationale for
rejecting a lower bid in favor of a higher one. But if
p. 4306
Honorable Mike Driscoll - Page 4 (JM-881)
.
the commissioners have an objective reason, supportable by
facts fairly known to them, that a particular bidder -
cannot perform responsibly because of some objective
impediment, they may consider rejecting that bid, and the
rejection would not be an abuse of discretion. Corbin,
sunra.
SUMMARY
The County Building Authority,
Certificate of Obligation, and County
Purchasing Acts, chapters 293, 271, and 262
of the Local Government Code, require that a
county award certain construction contracts
by a process of competitive bidding.
Solicitations for bids may not be limited by
requiring that bidders promise to perform
work using their own employees. The county
may make an informed, non-arbitrary decision
that a particular bid is not a responsible
one.
JIM MATTOX
Attorney General of Texas
MARY KELLER
First Assistant Attorney General
LOU MCCREARY
Executive Assistant Attorney General
JUDGE ZOLLIE STEAKLKY
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Don Bustion
Assistant Attorney General
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