Judges: JIM MATTOX, Attorney General of Texas
Filed Date: 9/13/1990
Status: Precedential
Modified Date: 7/6/2016
Honorable Charles W. Chapman Criminal District Attorney Hays County Courthouse Suite 208 San Marcos, Texas 78666
Re: Competitive bidding for a county vehicle maintenance building (RQ-1746)
Dear Mr. Chapman:
You inform us that in the fall of 1988, a county vehicle maintenance building was constructed at the direction of a county commissioner who made verbal contracts with vendors on the project. You add that the vendors were paid by the county auditor with funds from the maintenance line item of the commissioner's precinct budget following the commissioner's approval of the claims. The cost of construction was in excess of $10,000.
You ask whether a county must award a contract for the construction of a vehicle maintenance building on the basis of competitive bids when no statute other than section
I. Does Local Government Code section 271.024 require counties to award contracts for the construction of public works on the basis of competitive bidding?
Chapter 271 of the Local Government Code is a revision and compilation of several former civil statutes that prescribe the purchasing and contracting authority of municipalities, counties, and certain other local governments. Subchapter A of chapter 271 is the Public Property Finance Act, formerly article 2368a.2, V.T.C.S. The subchapter is by its terms applicable only to acquisitions of personal property. See Local Gov't Code §§
A. Local Government Code section 271.024 and its relationship to competitive bidding
Section 271.024, the provision that prompts your question, provides the following:
If a governmental entity is required by statute to award a contract for the construction, repair, or renovation of a structure, road, highway, or other improvement or addition to real property on the basis of competitive bids, and if the contract requires the expenditure of more than $10,000 from the funds of the entity, the bidding on the contract must be accomplished in the manner provided by this subchapter [subchapter B of chapter 271].
"Governmental entity" is defined to include a county, a municipality, a common or independent school district, a special district or authority created under article III, section 52, or article XVI, section 59, of the constitution, a hospital district or authority, a housing authority, or an agency of the aforementioned entities. Local Gov't Code §
Subchapter B, entitled "Competitive Bidding on Certain Public Works Contracts," is the descendant of former V.T.C.S. article 2368a.3. Originally enacted in 1979, that statute also provided that the competitive bidding procedures described in the act were applicable to contracts for the enumerated public works if the governmental entity awarding the contract was required by another statute to award the contract on the basis of competitive bids. Acts 1979, 66th Leg., ch. 770, at 1901. Subchapter B prescribes procedures for the advertisement for bids, the opening of bids, and the award of the resulting contract. See Local Gov't Code §§
You conclude that the competitive bidding procedures prescribed by subchapter B of chapter 271 are triggered only when a statute other than section 271.024 requires the governmental entity to award a contract for projects described in section 271.024 on the basis of competitive bidding, and the contract involves the expenditure of more than $10,000 of the entity's funds. The language of the section provides clear support to your conclusion. An opinion of this office, however, suggests that section 271.024 may itself be sufficient to require competitive bidding on a construction contract. A review of that opinion is necessary.
B. Attorney General Opinion
JM-505 and public works construction contracts
Attorney General Opinion
Your reading of section 271.024 is buttressed by a recently enacted provision of the Local Government Code, section 271.029, which states that an officer or employee of a governmental entity commits an offense if he intentionally or knowingly makes or authorizes separate purchases "to avoid the competitive bidding requirements of the statute that requires a contract described by Section 271.024 to be awarded on the basis of competitive bids." Accordingly, the threshold question, i.e., whether section 271.024 alone requires a county to award a contract for the construction of a county vehicle maintenance building on the basis of competitive bids, may be answered in the negative. To the extent Attorney General Opinion
II. Does a separate statute require public works construction contracts to be awarded by counties on the basis of competitive bidding?
Our answer to your preliminary question does not end our inquiry. Under section 271.024 a separate statute must impose a competitive bidding requirement on the awarding of a contract for the construction of public works by a county. Otherwise the procedures outlined in subchapter B of chapter 271 are not triggered. You contend that no statute imposes a competitive bidding requirement on county public works construction contracts in general. However, as the remainder of this opinion will explain, we believe, contrary to Attorney General Opinion
A. The absence of a general statutory competitive bidding requirement expressly applicable to county public works construction contracts
You argue that no statute other than the Certificate of Obligation Act of 1971 currently requires a county to award a contract for the construction of public works on the basis of competitive bids, and that statute requires competitive bidding only in the event certificates of obligation are issued to fund contracts of more than $5000. See Local Gov't Code §§
You attribute this deficiency to an amendment to former V.T.C.S. article 2368a, relevant portions of which are now codified as chapter 252 of the Local Government Code. Prior to 1985, section 2 of article 2368a, also known as the Bond and Warrant Law of 1931, provided that no county was authorized to make any contract calling for the expenditure of more than $5000 in county funds without first submitting the proposed contract to competitive bids. This requirement was deleted in 1985. Acts 1985, 69th Leg., ch. 505, § 2, at 2091-92 (Senate Bill 802). The contracting provisions of the statute thereafter were applicable only to cities. You conclude that this action resulted in the repeal of the only general statutory provision that requires county construction contracts to be awarded on the basis of competitive bids. Our research has revealed no other statute that, prior to 1985, would have generally required competitive bidding on county construction contracts.
B. The enactment of the County Purchasing Act and its effect on the award of construction contracts
During the same legislative session in which article 2368a was amended, the County Purchasing Act was enacted as article 2368a.5, V.T.C.S. Acts 1985, 69th Leg., ch. 641, at 2377 (Senate Bill 807). It is now codified as subchapter C of chapter 262 of the Local Government Code, sections 262.021 through 262.035. Senate Bill 802, the bill amending the Bond and Warrant Law to make its contracting provisions applicable only to cities, contained a separate section tentatively restoring coverage of its competitive bidding provisions to counties. Acts 1985, 69th Leg., ch. 505, § 4, at 2094. This provision was expressly made contingent upon Senate Bill 807, the County Purchasing Act, not becoming law. Id. Because Senate Bill 807 was ultimately enacted, section 4 of Senate Bill 802 never took effect, and counties were therefore not made subject to the competitive bidding requirements imposed by section 2 of the Bond and Warrant Law.
Senate Bill 807, meanwhile, contained a provision tentatively removing counties from the scope of section 2 of the Bond and Warrant Law. Acts 1987, 69th Leg., ch. 641, § 2, at 2379. The amendment to the Bond and Warrant Law was expressly made contingent upon the failure of the legislature to enact Senate Bill 802. Id. § 12, at 2384. The continuing applicability of the competitive bidding requirement of the Bond and Warrant Law to counties hinged upon the success or failure of Senate Bill 807. The two bills thus were carefully and deliberately tied to one another, and it therefore clearly appears that the legislature intended the provisions of the County Purchasing Act to replace the repealed portions of the Bond and Warrant Law.
The legislative history of the County Purchasing Act indicates that the overriding goal of the legislature was to provide uniformity and certainty in the laws governing the acquisition of supplies, materials, equipment, and stationery by counties. There apparently was no intention to make changes in the laws governing the award of public works construction contracts. However, by the amendment of the Bond and Warrant Law the legislature inadvertently removed the only general competitive bidding requirement for county public works construction contracts. This action by default presented the unlikely prospect that construction contracts could be awarded without resort to competitive bidding.2
As we will explain shortly, we think the language of the County Purchasing Act supports the conclusion that its provisions were intended to replace the repealed portions of article 2368a. Attorney General Opinion
III. Attorney General Opinion
JM-505 and its construction of the County Purchasing Act
Attorney General Opinion
The apparent conflict between the two statutes was resolved by concluding that the County Purchasing Act did not apply to public works contracts generally, the language of section 12 notwithstanding. Two grounds were offered in support of this conclusion. We have already examined one of the arguments in support of the conclusion, i.e., that article 2368a.3 governs competitive bidding for public works construction contracts. Apparently, this conclusion was based on the assumption that article 2368a.3 alone was sufficient to require competitive bidding on such contracts. A review of the language of the statute as it existed at the time Attorney General Opinion
The other argument offered in support of the conclusion was that the term "item," employed throughout the statute, did not encompass construction contracts. "Item" was defined as "any service, equipment, good, or other tangible or intangible personal property," including insurance and "high technology items." V.T.C.S. art. 2368a.5, § 2(3) (now see Local Gov't Code §
In order for the bid bond language of section 12 of the County Purchasing Act to have complete effect, it was necessary to give meaning to the phrase "contract . . . for the construction of public works." Attorney General Opinion
V.T.C.S. art. 2368a.5, § 2(4) (now see Local Gov't Code §
Attorney General Opinion
Once again, however, this reading of the County Purchasing Act depended heavily on the incorrect assumption that article 2368a.3 (now subchapter B of Local Government Code chapter 271) imposed an independent public works competitive bidding requirement on counties and all other governmental entities subject to the statute.
The interpretation given the County Purchasing Act in Attorney General Opinion
A. Applicability of the County Purchasing Act to construction contracts
Upon further inspection, we believe it was erroneous to place so much reliance on the definition of "item" in Attorney General Opinion
1. Section
Section 262.024 provides, in part, that a "contract for the purchase of any of the following items" is exempted from the competitive bidding requirement established by section 262.023 if the commissioners court grants the exemption:
(1) an item that must be purchased in a case of public calamity if it is necessary to make the purchase promptly to relieve the necessity of the citizens or to preserve the property of the county;(2) an item necessary to preserve or protect the public health or safety of the residents of the county;
(3) an item necessary because of unforeseen damage to public property;
(4) a personal or professional service;
(5) any work performed and paid for by the day, as the work progresses;
(6) any land or right-of-way;
(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 processes, or monopolies;
(B) films, manuscripts, or books;
(C) electric power, gas, water, and other utility services; and
(D) captive replacement parts or components for equipment.
In the absence of an exemption granted by the commissioners court, the acquisition of each of the enumerated articles or services would be subject to the competitive bidding procedures of the County Purchasing Act, despite the fact that they do not fall neatly within the definition of "item" provided in section 262.022.
2. Section
Further proof is found in section
An act relating to safety standards for construction projects and consideration of safety records when awarding bids on construction projects.
Acts 1987, 70th Leg., ch. 722, at 2597.
Significantly, the amendment was accomplished without changing the definition of "item." This indicates that the legislature believed both that the definition was broad enough to include construction services and that the act applied generally to construction contracts. If it had not held these beliefs, we doubt it would have amended the act to allow consideration of a contractor's safety record. The addition of section 262.0275 therefore should not be viewed as an expansion of the County Purchasing Act, but merely a clarification of its scope.
Accordingly, we believe construction work may reasonably be characterized as a "service" for purposes of the County Purchasing Act, thereby bringing such work within the definition of "item" and preserving a general competitive bidding requirement for construction contracts.4 We also conclude that Attorney General Opinion
In answer to your specific question, we conclude that the County Purchasing Act requires a county to award a contract for the construction of a vehicle maintenance building on the basis of competitive bids. This answer, however, raises an additional issue. Because both the County Purchasing Act and subchapter B prescribe competitive bidding procedures, it becomes necessary to determine whether a county must award a public works contract in accordance with the terms of either the County Purchasing Act or subchapter B, or whether the County Purchasing Act simply triggers the procedures set forth in subchapter B.
V. Does the County Purchasing Act or subchapter B of chapter 271 govern competitive bidding for public works construction contracts?
Two provisions of the Code Construction Act resolve this issue. Section
The County Purchasing Act and subchapter B both apply to contracts exceeding $10,000, subchapter B applying specifically to public works contracts. The two acts differ, however, in several important respects, such as in terms of the timing and content of competitive bidding notices. Compare Local Gov't Code §
The County Purchasing Act was enacted in 1985; V.T.C.S. article 2368a.3 was enacted in 1979. The County Purchasing Act is also the more general provision. However, with our previous discussion of the legislative history and subsequent amendment of the act in mind, we believe that the manifest intent of the legislature is that the County Purchasing Act govern the award of construction contracts by a county to the exclusion of subchapter B. Accordingly, we believe the competitive bidding procedures prescribed by the County Purchasing Act in sections
Recent legislation amended subchapter B to allow a county with a population of 2.2 million or more to require a successful bidder to perform at least 25 percent of the work under a contract and to establish financial criteria for surety companies that provide payment and performance bonds. Local Gov't Code §
We would also note that our conclusion also applies to conflicts between the County Purchasing Act and V.T.C.S. article 5160. Since the County Purchasing Act contains provisions relating to bid and performance bonds, see Local Gov't Code §
Very truly yours,
Jim Mattox Attorney General of TexasMary Keller First Assistant Attorney General
Lou McCreary Executive Assistant Attorney General
Judge Zollie Steakley Special Assistant Attorney General
Renea Hicks Special Assistant Attorney General
Rick Gilpin Chairman, Opinion Committee
Prepared by Steve Aragon Assistant Attorney General
The first modern competitive bidding statute, enacted in 1917, was amended in 1931 to apply only to public works projects; this limitation was dropped in 1947. A 1979 statute [former V.T.C.S. art. 2368a.3, now subch. B of Local Gov't Code ch. 271], specifically applicable to public works contracts, requires that counties . . . follow specified bidding procedures in connection with the construction or repair of any ``structure,' roadway, or any ``other improvement or addition to real property.' (Footnotes omitted.)
35 D. Brooks, County and Special District Law § 18.24 (Texas Practice 1989). In isolation, this passage might lead the reader to erroneously conclude that section 271.024 is the sole authority to consult when considering not merely what competitive bidding procedures are to be followed, but whether competitive bidding for a particular public works contract is required at all. As this opinion demonstrates, the express language of section 271.024 precludes this result.