Case Information
*1 The Attorney General of Texas April 24, 1986 JIM MATTOX
Attorney General Opinion No..JM-484 Mr. Mark G. Goode
Supreme Court Building P. 0. BOX 12548 Engineer-Director Austin. TX. 70711. 2548 State Department of Highways KS: Whether House Bill No. 620, 512/47&2501 Acts 1985, 69th Leg., supersedes and Public Transportation Telex 9101874.1367 11th and Brazos Streets articles 6674h and 66741, V.T.C.S., Telecopier 51Z4750266 Austin, Texas 78701 which requires competitive bidding 714 Jackson. Suite 700 Dear Mr. Goode: Dallas. TX. 75202.4506 214/742a3944
On behalf of the State Department of Highways and Public Trans-
portation, you ask how Uouse Bill No. 620, see Acts 1985, 69th Leg., [91545333464] 4824 Albena Ave., Suite 160 El Paso. TX. 799052793 bidding for certain highway construction and improvement contracts. ch. 83, at 330 (codified at V.T.C.S. art. 6=), affects competitive Article 601g provides, in pertinent part: The state or a governmental agency of the state 1001 Texas. Suite 700 may not award a contract for general construction, HOUS,O”. TX. 77002-3111 713n255888 improvements, services, or public works projects or puxhases of supplies, materials, or equipment to a nonresident bidder unless the nonresident's 606 Broadway. Suite 312 bid is lower than the lowest bid submitted by a Lubbock, TX. 79401.3479 SOS”47-5238 responsible Texas resident bidder by the same
amount that a Texas resident bidder would be 4309 N. Tenth, Suite S [51216824547] McAllen, TX. 78501-1885 required to underbid a nonresident bidder to obtain a comparable contract in the state in which the nonresident's principal place of business is locatec,.
200 Main Plaza. Suite 400 Sec. l(b). San Antonio. TX. 78205-2797 5121225-4191 Section l(c) of this act specifies that this provision "does not apply to a contrxt involving federal funds." Accordingly, we address An Equal OpportunityI your questions only in the context of state and locally funded Affirmative Action EmplOyW projects. See gonerally 23 U.S.C. 1101 et seq.; 23 C.F.R. 10635.107,
635.108 (may not ,restrict competition on federally aided projects on the basis of state residency). Moreover, you do not ask nor do we address the cons,t:ltutionality of the statute. See generally White v. Massachusetts Council of Construction Employers, Inc,, 460 U.S. 204 (1983)Tpheld r; city's requirement that 50% of the workforce on public works projects be city residents).
Your specific question;5 are as follows:
1. Does Douse Bill No. 620 override and thus take precedence over the department's specific competitive biddkag statutes, namely articles 6674h. 66741, and related statutes?
2. We have long conformed with the legal principle that parties submitting bids in connec- tion with public contracts generally do so upon the same or aqus.1 basis. We could hardly have done otherwise pa view of the holding in Texas Flighway Comaissian v. Texas Association of Srcal Importers. 372S.'r.2d 525 (Tex. 1963). We, never- theless, tender t'ce following scenario in order to pose our second question in the event that you should answer our first question in the affirma- tive. [Scenario ftnvolving negotiations to allow nonresidents to lower bids by the appropriate differential.I
You suggest that article 601g is in conflict with articles 6674h and 66741, V.T.C.S. ArticLe 6674h deals primarily with advertising the opening of competitiv,e bidding -- not with the awarding of contracts. Consequently, you focus primarily on article 66741.
Article 66741 authorizes the rejection of any and all bids but requires that the contract ba awarded to the "lowest bidder." Article 601g includes the word "responsible" in describing low bidders. Since there is no qualification in article 66741 other than "lowest bidder," you submit that the two statutes cannot both be applied. Further, you contend that, because article 66741 applies specifically to highway contracts whereas article 601g is "general," article 66741 should control. We disagree.
Article 66741 and article 601g are not in conflict. In the first place, you suggest that the unqualified term "lowest bidder" in article 66741 allows the department no discretion in awarding contracts. This is not nec:essarily the case. The statutory grant of discretion in article 6674,L to reject any and all bids must be read together with the reauiramnt that the contract be awarded to the l&est bidder. See C&bin:. Collin County Commissioners' Court, 651 S.W.2d 55, 56, r(Tex. Cpv. App. - Dallas 1983, no writ); A 6 A Construction Co., Inc. v. City of Corpus Christi, 527 S.W.2d 833, 835 (Tex. Civ. App. - Corpus rhristi 1975, no writ); see also Gwen of Georgia, Inc. V. Shelby Cogtt, 648 F.2d 1084, 1094 n. 11 (6th Cir.
1981) (and cases cited therein); cf. - Attorney General Opinion H-1086 (1977).
Moreover, two statuteli on the ssme subject should both be given effect if possible. Gordor. v. Lake, 356 S.W.2d 138, 139 (Tex. 1962). -- Although article 66741 applies specifically to highway contracts, it
refers in general to competitive bidding on all such contracts. In contrast, althcugh article 6Olg applies to a broader range of public works contracts, it refers; only to one specific aspect of awarding such contracts. Consequem::iy, we believe that article 601g could be considered more specific than article 66741 and should therefore be construed as an exception to article 66741. See Flowers v. Pecos River Railroad Company, 1515 S.W.2d 260, 263-64 (Tex. 1941); Attorney General Opinion JM-356 (19ti5,). In any event, it is a later enactment and will prevail to the extent of conflict.
Your second question relates to the holding in Texas Eighway Commission v. Texas Associ.ition of Steel Importers, Inc., 372 S.W.2d 525 (Tex. 1963). In this'-case, the Texas Supreme Court determined that the Highway Conrmission lacked authority to require that its construction contracts specify that materials used or furr!ished under the contracts bu manufactured in the United States. The court reasoned that the commissi~:n lacked the implied authority to include this provision because its jaclusion would defeat the primary purpose of the competitive bidding statutes. 372 S.W.2d at 529-30 see also Attorney General Opinions 11-1086 (1977); O-1831 (1940). As stated z Attorney General Opinion O-1831:
[tlhe State Highway Department is a creature cf the Legislature, snd therefore has.no more power than that granted by its .creator.
Attorney General Opinion O.-l.831 followed reasoning similar to that in Texas Highway to conclude that the highway department lacked authority to include a provision in its construction contracts for a price differential in favor of dcmestic cement.
The decisions in Te'u~s Highway and Attorney General Opinion O-1831 were founded on sG%ory construction. In Texas Highway, the Supreme Court emphasized that it was not dealing with legislative restrictions but with an administrative order. 372 S.W.2d at 527.
The court stated that ":hlad the Legislature proscribed foreign materials, we would have an entirely different question." Id. In the instant case a statute rather than a highway department policy or rule is at issue. Consequently, the allusion in your second question that House Bill No. 620 is in conflict with Texas Highway is inapposite.
As part of your second question, you present a scenario in which nonresident bidders who submit the actual lowest bid, i.e. prior to consideration of the differantial, would he allowed toadjust their bids. We do not believe that article 66741 or article 601g authorizes this type of "negotiation." Rouse Bill No. 620 creates a limited exception to the "lowesr bidder" requirement in article 66741 by providing for a different.ial agsicst nonresident bidders that is equivalent tc the Ciiftze.. ~ia.1 against Texas bidders in that non- rtsident bidder's state. '11~ is based on the concept cf reciprocity.
It does not impliedly repeal article 66741. It does not waive the *4 I Hr. Mark G. Goode - Page 4 (~~-484) requirement that bidding be competitive. We believe that entering into negotiations to allow nonresident bidders to "adjust" their bids would defeat the purpose D:E both article 66741 and article 6Clg.
See Attorney General Opinion MN-296 (1981). As indicated, the highway dcpartnent holds only the powers granted expressly or by necessary implication by the Texas Legislature. Neither article 66741 or article 601g authorizes the department to enter into the negotiatiors in question. Of course, the department may, if it chooses to do so, reject all the bids and rc-&ertisr.
SUMMARY
Article 6674i, V.T.C.S., and House Bill No. 620, Acts 1985, 69th Leg., ch. 83, at 330 (codi- fied at V.T.C.S. art. 6Olg) are not in cocflict.
Article 6Olg crez,t.os a limited exception to the "lowest bidder" xquirement ir article 66741 by providing for a differential against conresident bidders that is equivalent to the differential against Texas biddars in that nonresident bidder's state. The Sta,ce Department of Highways and Public Transportat:Lon may not enter into negocia- tions to allow xnresident bidders to "adjust" their bids after the bids have been opened. The department may, wf course, reject all bids and ye-advertise.
. LJ+-Nh Very truly yours - JIM MATTOX Attorney General of Texas JACXHIGHTOWRR
First Assistant Attorney General
MARY KELLER
Executive Assistant Attorney General
ROBERT GRAY
Special Assistant Attorney kneral
RICK GILPIN
Chairman, Opinion Committee
Prepared by Jennifer Siggs
Assistant Attorney General