Opinion No.

Texas Attorney General Reports·Decided September 13, 1990·Published

Opinion

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 271.024 of the Local Government Code appears to require competitive bidding. You also ask as a preliminary question whether section 271.024 itself requires competitive bidding on the contract. You do not ask, and we therefore do not consider, whether under the facts you describe the county commissioner, acting alone, was authorized to execute the contract or contracts in question. See generally Attorney General Opinion JM-892 (1988) and authorities cited therein. Neither do you question the payment of the vendors on the apparent approval of only the commissioner who ordered that the construction take place, rather than on the approval of the entire commissioners court. This opinion accordingly will address only your specific questions concerning section 271.024 of the Local Government Code.

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 §§271.004, 271.005. Subchapter B, of which section 271.024 is a part, governs competitive bidding on certain public works contracts. Subchapter C was formerly V.T.C.S. article 2368a.1 and is known as the Certificate of Obligation Act of 1971. Local Gov't Code § 271.041. Subchapter D authorizes local governments to purchase items through the State Purchasing and General Services Commission. Id. § 271.082. Subchapter Z contains miscellaneous provisions relating to purchasing and the awarding of contracts by local governments that are not pertinent to this opinion.

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 § 271.021.

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 §§271.025-271.027. It also stipulates that its provisions do not affect a contract awarded pursuant to the Professional Services Procurement Act, V.T.C.S. art. 664-4. Id. § 271.022. A home rule charter in conflict with the terms of the subchapter prevails over subchapter B, and contracts awarded in violation of the subchapter are void. Id. §§ 271.023, 271.028.

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 JM-505 (1986) concluded in part that the competitive bidding requirements of the County Purchasing Act, then codified as article 2368a.5, V.T.C.S., did not apply to contracts for public works construction. In reaching this conclusion, it was said that article 2368a.3, the predecessor to subchapter B of chapter 271, "expressly governs competitive bidding on public works contracts." Attorney General OpinionJM-505, at 2. This statement, though technically correct, was made without elaboration and without specific reference to the language of section 271.024. More importantly, the opinion mistakenly suggests that section 271.024 itself mandates competitive bidding on public works contracts. To avoid further confusion, we should here emphasize that the procedures described in subchapter B are, by its plain terms, applicable only when a separate statute requires the contracts for the enumerated projects to be awarded on the basis of competitive bids.1

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 JM-505 suggests otherwise, it should be disregarded. Attorney General Opinion JM-505

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