Untitled Texas Attorney General Opinion ( 2000 )

January 24,200O
Mr. Charles W. Heald, P.E. Opinion No. JC-0171
Executive Director
Texas Department of Transportation Re: Whether counties may bid on state highway
125 East 11 th Street maintenance contracts (RQ-OlOO-JC)
Austin, Texas 78701-2483
Dear Mr. Heald:
You ask whether counties may bid on state highway maintenance contracts. Counties have
neither express nor implied statutory authority to bid on state highway maintenance contracts;
accordingly, they may not do so.
The Texas Transportation Commission (the “Commission”) is required to submit for
competitive bids any contract to improve a highway that is part of the state highway system. See
TEX. TRANSP.CODE ANN. 5 223.001(l) (V emon 1999). The “improvement” of a state highway
includes construction, reconstruction, maintenance, and making a necessary plan or survey before
beginning construction, reconstruction, or maintenance. Id. 5 221.001(2). Improvements ofthe state
highway system may be made with or without federal aid, id. 5 221.003, but a highway project that
receives federal aid is subject to a federal regulation that bars public agencies from bidding in
competition with private contractors. See 23 C.F.R. § 635.112(e) (1999). Accordingly, a county
may not submit a bid for a state highway maintenance contract funded by federal aid.
We next consider the authority of a commissioners court to bid on a state highway
maintenance contract that receives no federal funding. The commissioners court’s authority is
limited to exercising “such powers and jurisdiction over all county business” as is conferred by the
constitution and statutes. TEX. CONST. art. V, 5 18(b). Unless the legislature expressly vests
contractual authority in another county agent, the commissioners court is the contracting agent of
the county. Anderson v. Wood, 152 S.W.2d 1084 (Tex. 1941). It is well settled that the authority
of the commissioners court to contract in behalf of the county is limited to that conferred either
expressly or by necessary implication by the constitution and laws of this state. Jack Y. Rate, 694
S.W.2d 391,397 (Tex. App.-San Antonio 1985, writ refd n.r.e.) (citing Childress County Y. State,
92 S.W.2d 1011, 1016 (Tex. 1936); Wilson v. Calhoun County, 489 S.W.2d 393,397 (Tex. Civ.
App.-Corpus Cbristi 1972, writ ref d n.r.e.)). Section25 1.014 ofthe Transportation Code authorizes
a commissioners court to “enter into an agreement with the commission for the county to carry out
a project or activity for the improvement of a segment of the state highway system.” TEX. TRANSP.
CODE ANN. 5 251.014(a) (Vernon 1999). This section provides an exception to the general
Mr. Charles W. Heald, P.E. - Page 2 UC-0171)
requirement in section 223.001( 1) of the Transportation Code that all contracts for improvement of
state highways be submitted for competitive bids. See TEX. GOV’T CODE ANN. 5 3 11.026 (Vernon
1998) (where general and special provisions cannot be harmonized, special provision prevails as an
exception to general provision); Tex. Att’y Gen. Op. No. JC-0037 (1999) at 6 (interlocal contract
entered into by school district need not be competitively bid); Tex. Att’y Gen. Op. No. JM-444
(1986) at 2 (general statutes requiring political subdivisions to purchase goods and services through
competitive bidding do not apply to purchases from disabled persons made under statutorily-
authorized program). Thus, a county has express authority to enter into an agreement with the Texas
Transportation Commission to perform highway maintenance on a non-competitive basis.
A county has no express authority to enter into a contract on the basis of competitive bidding,
nor do we find any such authority implied from the constitution or laws. This office has held that
a county has no authority to submit a bid to a municipality, in competition with private contractors,
for the job ofpaving or maintaining a city street. Tex. Att’y Gen. Op. No. WW-1401 (1962) at 3.
The proposal suggested that the county would be “engaging in the road construction business,” an
activity not authorized by law. Id.; see also Tex. Att’y Gen. LO-90-022, at 2 (questioning whether
a county’s purchase of culverts solely to resell them to private persons to generate a profit would
constitute county business). TheTransportationCode itselfreflects the assumption that “competitive
bidding” is used to enter into contracts with private entities. Section 223.042 of the Transportation
Code provides in part:
(a) Of the amount spent in a fiscal year by the department for
maintenance projects, the department shall spend not less than 50
percent through contracts awarded by competitive bids.
(d) Subsection (a) does not apply unless the department
determines that a function of comparable quality and quantity can be
purchased or performed at a savings by usingprivate sector contracts.
TEX. TRANSP. CODE ANN. 5 223.042 (Vernon 1999). This provision equates “contracts awarded by
competitive bids” with “private sector contracts.”
This offtce moreover has recognized in decisions of this office construing the “competitive
bidding” provision of the Texas Public Information Act, TEX. GOV’T CODE ANN. ch. 552 (Vernon
1994 & Supp. 2000), that governmental entities as a general rule do not engage in competition with
private entities. Section 552.104 of the Government Code, which excepts from public disclosure
“information that, if released, would give advantage to a competitor or bidder,” id. 5 552.104
(Vernon 1994), helps assure that the competitive bidding process will be truly competitive. Tex.
Att’y Gen. ORD-463 (1987) at 2. In Open Records Decision No. 463, this office stated that section
552.104 of the Government Code “may not be claimed to protect a governmental body’s
‘competitive advantage’ because they cannot be regarded as being in competition with private
Mr. Charles W. Heald, P.E. - Page 3 (X-0171)
enterprise.” Id.; see also id. ORD-231 (1979); ORD-153 (1977). While this statement is
inapplicable to a governmental body with express statutory or constitutional authority to engage in
competition, Tex. Att’y Gen. ORD-593 (1991) at 4, it does apply to governmental entities, such as
counties, that lack express authority to compete with private entities.
We conclude on the basis ofprior decisions ofthis office that a county’s general contracting
authority does not include, by necessary implication from the constitution or laws, the authority to
submit a bid on a contract for state highway maintenance. In view of our conclusion, we need not
address your question concerning the application to a county of the commission’s requirements
regarding construction experience, liability insurance, bonding, and indemnification. But see Tex.
Att’y Gen. Op. No. DM-467 (1998) (addressing questions raised by a county agreement to indemnify
a third party).
S U’M M A R Y
A county may not submit a bid on a state highway
maintenance contract that the Texas Transportation Commission has
put out for competitive bidding, because counties have neither
express or implied statutory authority to bid on a state highway
maintenance contract. Moreover, a highway project that receives
federal aid is subject to a federal regulation codified at 23 C.F.R.
3 635.112(e) (1999), which bars public agencies from bidding in
competition with private contractors.
JO A N CO>NYN
Attorney General of Texas
ANDY TAYLOR
First Assistant Attorney General
CLARK RENT ERVIN
Deputy Attorney General - General Counsel
ELIZABETH ROBINSON
Chair, Opinion Committee
Susan L. Garrison
Assistant Attorney General - Opinion Committee