Daniels Building & Construction, Inc. v. Silsbee Independent School District

OPINION

DAVID FARRIS, Justice (Assigned).

The issue in this case is whether or not a school district that chooses to use the construction manager-at-risk method to build a school must comply with the publication of notice requirements of Tex. Educ.Code Ann. § 44.031(g) (Vernon Supp.1999). We hold that it must and find that the Silsbee Independent School District did not. We find the trial court erred in denying the relief requested by the appellants and reverse and remand this cause for entry of an injunction and a hearing on attorney fees.

The district elected to build a new school using the construction manager-at-risk (CMAR) method under Tex. Educ.Code Ann. § 44.038 (Vernon Supp.1999). The CMAR method is one of the alternatives a school district may use to construct a building. These alternatives allow a district to award a contract to the offeror offering the best value rather than merely the lowest price. See Tex. Educ.Code. Ann. § 44.038(h)(Vernon Supp.1999). The CMAR alternative pennits a district to provide for prequalified offerors before proposals are submitted. But prequalification neither conclusively determines that a prequalified offeror offers the best value nor bars a district from determining an offeror, who failed to prequalify, offers the best value. See Tex. Educ.Code ANN. § 44.038(f)(Vernon Supp.1999).

After selecting an architect to prepare the construction documents and oversee compliance, the district published a notice announcing a deadline for applicants interested in being the CMAR to submit “Requests for Qualifications.” The notice explained that the CMAR would serve as the general contractor for the construction of a new high school with an estimated project budget of approximately $19,000,000.00. The notice listed the qualifications that should be included in a “Request for Qualifications” and listed the selection criteria the district would consider in determining the most qualified applicants from whom the district would request formal Competitive Sealed Proposals. The notice was published in two newspapers on March 26 and April 2,1998.

On April 15 the district sent letters to two prequalified offerors chosen from those who responded to the published notice. The letters requested sealed proposals by April 20. The letter included a form to be used in submitting a proposal. It is evident that one could not submit a proposal without knowing the information requested by the form. One of the two prequalifiers was Daniels Building and Construction Inc., (Daniels). Terry Daniels is Daniels’s president. Daniels was not selected as the CMAR; instead, the district chose Allco, Inc., the other prequa-lifier.

Daniels and Terry Daniels sued, asking the trial court to enjoin the district from performing its CMAR contract with Allco and seeking attorney fees. Both sides moved for summary judgment and the trial court granted the district’s motion while overruling Daniels’s motion.

The appellants assert that the district was required to publish the time by and place where competitive sealed proposals were to be received. Appellants contend that the publication must comply with the requirements of § 44.031(g). Appellants argue that if the § 44.03Í(g) requirements are not applied there is no requirement that a district give public notice before entering into a CMAR contract and, consequently, a district could abuse the process by excluding offerors who did not prequalify, thereby contradicting § 44.038(f). In support of this argument appellants point out that the letters requesting Daniels and Allco to submit competitive sealed proposals were sent only five days before the deadline and there was no way that offer-ors who did not prequalify could have learned of the deadline for submitting proposals or of the details a proposal should include.

The district contends that it did not have to advertise to obtain competitive sealed proposals for a CMAR because the only applicable notice provisions are provided by § 44.038. If § 44.031(g) applies to a CMAR, the district contends that appellants are not entitled to injunctive relief because they had notice and thus cannot show that they will suffer irreparable harm under Tex. Civ. Prao. & Rem.Code ANN. § 65.011 (Vernon 1997).

We hold that § 44.031(g) applies to CMAR contracts and the district was required by that statute to publish notice of the deadline for submitting sealed competitive proposals. We further hold that the published notice advertising the district’s intent to employ a CMAR did not serve as notice of the deadline for submitting sealed competitive proposals. The CMAR statute does not provide an alternative means of notifying offerors who do not prequalify; consequently, the district effectively excluded offerors who did not prequalify despite the stated intent of § 44.038(f).

The district argues Tex. Educ.Code Ann. § 44.032(f) (Vernon 1996) does not apply because its actions did not violate Tex. Educ.Code Ann. § 44.031(a) or (b) (Vernon Supp.1999). We disagree. Section 44.031(a) is a laundry list of methods whereby school districts enter into purchasing contracts. School districts are required to select the method that provides the best value to the district. Section 44.031(a) may be violated only by failing to comply with the requirements of underlying statutes, in this case § 44.038 and § 44.031(g). Having chosen the CMAR method from the laundry list, the school district must comply with the requirements of § 44.038 and the notice requirements of § 44.031(g). If it does not, the school district violates § 44.031(a) and is subject to injunction under § 44.032(f). The trial court erred in failing to grant the injunction requested by Daniels. We reverse the judgment of the trial court and remand the cause for entry of an injunction and for a hearing on attorney fees for the appellants.

REVERSED AND REMANDED.