Honorable William J. Burke OpinionNo. 

### WW-646

Executive Director State Board of Control Re: Questions relating Austin, Texas to Engineering Fee for Design of Filter Systems for Swimming Pools in three State Parksfor the State Dear Mr. Burke: Parka Board.

You have requested an opinion of this office in regard to questionsyou have predicated upon the following facts:
On or about October 1, 1957, the State Parks Board requested the Board of Control to select an architect and/or engineer to design swimmingpool filter systems for the Abilene, Bastrop and Lockhart State Parks.

Roger L. Erickson, consulting engineer and architect, was selected and a contract entered Into whereby he was to prepare plans and specificationsfor the filter systems. Upon completion of plans and specificationsfor the filter systems,Mr.,Erickson receivedpartial payment for his servicesat the rate provided for in his contract. Payment was based upon vouchers which showed on their face an estimated cost of $30,200 for the three filter systems.

Bids were called for by the Board of Control and were opened and tabulated on August 20, 1958. The low bids received for the filter systems,based on Mr. Erickson'splans and specifications,totaled $70,471.00. The appropriation available to the State Parks Board was $32,194.00, therefore, the bids were rejectedby the Board of Control.

After the bids were rejected,Mr. Erickson forwarded to the Board of Control,at the request of the Board, his final pencil estimateswhich totaled $77,035.00 for the three filter systems.Honorable William J. Burke, page 2 (~~-646)

After rejection of the bids, Mr. Eriokson received warrants from the Comptrollerof Public Accounts for additional engineering fees calculatedon the basis of the lowest bona fide bid received. The vouchers upon which these warrants were Issuedwere approvedby the State Parka Board, but were not approvedby the Board of Control. Mr. Erickson stillholds thesewarrants at this time.

The questionsyou submit are as follows:
"1. In view of the fact that the lowestbona fide bid receivedwould overrun the available funds and, therefore, no award couldbe made, la an engineering fee based on the lowestbona fide bid received a legal obligation accruing to an engineer and payable on that basis?
"2. In view of the fact that Mr. Erickson now has in his possessionwarrants issuedpayable to him that were based upon the lowestbona fide bida received, shouldMr. Erickson now return thosewarrants to the Comptrollerfor cancellation?"

In consideringyour first question,we look to the appropriationbill by whioh the expenditures for filter systemswere authorized. In the General and Special Laws, 55th Legislature,Regular Seaaion, 1957, House Bill No. 133, we quote from the appropriations to the State Parks Board line itemsNos. 25, 29, and 57:

"25.Abilene State Park For the years ending Aug. 31,1g58 Aug.31,1959 b. Improvements, including 15 concrete Picnic units, and filter eysternfor swimmingpool

......$9.894 $1,000
"29. Bastrop State Park b, Improvements, including filter system for swimmingpool, repair of 11 cabins, rest rooma, tables and grill8 q.................... $9,800 $3,765Honorable William J. Burke, page 3 (~~-646)

“57. Lockhart State Park For the years ending Aug.31,1958 Aug. 31,1959
b. Improvementa, Including construction of filter and circulating system for pool, garage and storeroom, fencing of swimming pool area, 10 picnic tables and grills, and the construction and equipping of playground area. ........ $12,500 $5,625”

It is well settled in Texas, that the contract of an agent or agency of the Statemade In excess of an amount appropriatedby the Legislature is void and no subsequent action of the Legislaturemay validate a claim arising thereunder. Such a claim, not having been provided for by pre-existing law, is prohibitedby Section 44 of Article III of the Constitutionof Texas. Ft. Worth Calvary Club, Inc. v. Sheppard, Comptroller, 125 Tex. 339, 83 S.W.2d bb0 (1935);Nichols v. State, 32 S.W. 452 (Tex. Civ. App. 1895, error ref.) The bids, based upon the plans and specificationsof Mr. &.ckson, were called for, received, opened and tabulatedprior to the time the 1959 appropriationbecame available. Therefore, the total sum available under pre-existing law at all times here in question was $32,1'#.00,and a contract for the expenditure of a sum in excess of this amount would be invalid,

Mr. Erickson's contract, called an "Engineering Agreement"by the parties thereto,provided in part as follows:

“4. Paym~~",sheeP~~~~~t~et~a~~ea~~~:~oe~~,

on account of subject to the provisions of Article 3 hereof:
"Upon completion and approvalby the Owner of preliminar studies, a sum equal to twenty per cent (20%

T of the basic rate computed upon, a reasonable estimated cost;HonorableWilliam J. Burke, page 

### 4 (ww-646)

"Upon completionand approvalby the Owner of specificationsand generalworking, drawings, a sum sufficientto increase the payments to fifty per cent 

### (50s)of the basic rate based on a reasonable estimated cost; "Upon awarding of the contract, or if no contract is awarded within ten (10)days of opening of bids, a sum sufficientto inpayments to seventy-fiveper cent crease the 

### (75%)of the basic fee, based on the lowest bona fide bid. (Emphasisours)

"It is understood that the above-mentioned estimated cost shall, in no event, exceed the amount of the appropriation (fromwhatever source) for the work."

Mr. Ericksonbases his claim for compensation on the above underlined clause of his contract in spite of the fact that the lowest bona fide bid exceeded the appropriationavailable and no contract for the filter systems could be entered into.

In considering the legal consequences of the contract and the facts presented,we must of necessity be governedby the basic fact that Mr. Ericksonwas not dealing with an individualbut with an agency of the State which was limited in its authority to make expenditures.

In Volume 6, Corpus Juris Secundum, Architects, Section 

### 14,page 310, it is stated as a general rule:

"Whereplans are required for a building not to aostmore than a certain SW, or are accepted on condition that it can be erected for a given amount, there can be no recoveryby the architect unless the building can be erected for the sum named, or at least for a sum substantiallywithin the limit, unless the increased cost is due to special circumstances, or to change of p;ans by the owner's directions. (Rnphasisours) E2nmerson

v. Kneezell,

### '66S.W. 

### 551 (Tex.Civ. Dudley v. Strain, 

### 130 S.W. 

### 778 tF%.%?&p. 1910); CapitolHotel Co., Inc... ,

Honorable William J. Burke, page 

### 5 (~-646)

et al v. Rittenberry, 41 S.W.2d 697 (Tex. c A 

### 1931 W it dismissed); Strattonv C:E; %*Detroit,r246 Mich. 139, 224 N.W. b49 (1929). Quoting further from the same source and page, we find:
"Wherethe architect knows or should

know of the authorized 11 it the rule applies, althoughhe is dtal;ngwith a legislative committee or with a municipars (Emphasisours) Clas v. State, 

### 196 Wis. 430, 220 N.W. 

### 185 (1928) Brickle v. England, 25 Del. 

### 16,78 Atl. i38 (1910)

. The Wisconsin Supreme Court, in Clas v. State, 220 y;, 

### ;85 (19281,a case where the bids based on the archi13 plans exceeded the appropriatedamount, denied that the architectwas entitled to any compensation and, on page 185, had this to say about the limitingnature of an appropriated sum on a state agency and those dealing therewith:

II

. . . the expenditureof the public moneys
. . . is strictly limited to the sums appropriatedby the Legislature for a given purpose.
. . . it is incumbent not only upon the department to take cognizance thereof and to act in accordance therewith,but every individual or corporation transactingbusiness with the department is legally governed thereby, whether a contractprovides for it or not." (Emphasisours) Regardlessof whether or not Mr. Erickqonhad actual knowledge of the amount of the appropriation for the filter systems involved, such appropriation8are a matter of public record and the authority OE the agencieswith which he was dealing was limited thereby, therefore,he was bound to know or shouldhave ascertained the amount of such appropriation. Cooper v. City of Derby 

### 83 Conn. 40, 75 Atl. 140 (1910); Xorgan & Slatteryv. Ciiy of New York, 114 App.Div. 555, 100 N.Y S btl(190b) Pierce v. Board of Education, 125 Misc. 5&-% N Y Su p; 

### 787, 214 N.Y. supp: 90E 

### 788 ffi d 1 21b A [1926j;'Cla?t. pp.Div.

Gate, 196 Wis. 430, 220 N.W. 185 (1928);See Bernstein et al v. City ofHonorable William J. Burke, page 

### 6 (~~-646)

New ?%%i?- York, Dickey, 

### 143App.Div. 

### 74 Tex. 

### 543, 61, 127 11 N.Y.Sup S.W. 10t9 987

(1889). (1911);

Indeed the lastparagraph of that portion of Mr. Erickson's contract quoted above appriseshim of the fact that there is some appropriatedamount limiting the project. The burden was on him to find out what it was.

In view of the foregoing authorities, it Is our opinion that where an architect contractswith an agency of the State to furnishplans and specificationsfor some objective for which the amount to be expended Is governed by .aLegislativeappropriation,the architect shallbe deemed to have knowledge of the amount of the appropriation and the law will imply, as a condition in his contract, that the objectivebe capable of accomplishment within the appropriatedamount by use of the plans and specificationsfurnished or else he is not entitled to compensation for his work. We do not mean to say that therewould not be Instanceswhere the architectwould be allowed to make minor revisions to bring the plans and specificationswithin the appropriated amount and thus fulfill his contract,but where this can not be done, the architecthas not compliedwith the contract. Such is the situation in the case at hand.

Mr. Erickson furnishedplans and specifications upon which the lowestbids received totaled $70,471.00. The amount appropriatedwas less than one-half this amount, to-wit* Mr Ericke3;'194.00. Indeed the pencil estimatesmade by

at some date unknown, but which were not given to-the Board'of Controluntil after bids were received, came to a total of $77,035.00. The bids were well within the pencil estimates of Mr. Erickson,but were far in excess of the appropriation to the State Parks Board for the filter systems; so far in excess thatminor revisions could not bring the plans and specificationswithin the appropriated funds. Therefore, it is our opinion, that since the lowest bona fide bid receivedwas greatly in excess of the appropriation available and no legal contract couldbe let, Mr. Erickson did not fulfillhis contract and no legal obligation based on the lowestbona fide bid accrued to him. Consequently,your first question is respectfully answered in the negative.

The answer to your second question follows as a matter of course from our answer to your first question. Since Mr. Erickson did not fulfill the condition in hisHonorableWilliam J. Burke, page 

### 7 (~~-646)

contract impliedby law, no legal obligation arose thereunder. Therefore, in our opinion, the warrants now,in the possession of Mr. Erickson shouldbe returned to the Comptrollerfor cancellation since they were not issued in payment of a legal claim or obligation. Your second question is, therefore, answered in the affirmative.

SUMMARY

Where an architect is employed to prepareplans and specifications for filter systems for swimming pools located in three State parks, he Is requiredby law to know or ascertain the amount appropriated to the State ParksBoard for that purpose. Where the lowest bona fide bid, based upon the plans and specificationssubmitted,was $70,471.00and the amount of the appropriation to the State Parks Board was $32,19&.00,no legal contract for the filter systems could be entered into and the architect Is not entitled to a fee based on the lowest bona fide bid under these circumstances. Warrants now in the possession of the architect for an engineering fee based on a low bona fide bid which exceeded the appropriationare not in payment of a legal obligation and shouldbe returned to the Comptrollerfor cancellation.

Yours very truly,

WILL WILSON Attorney General of Texas

wos:zt:rmHonorableWilliam J. Burke, page 

### 8 (~~-646)

APPROVED:
OPINION COMMITTEE Geo. P. Blackburn, Chalrman
Robert T. Lewis C. DeanDavis J,.ArthurSandlln Henry Go.

draswell

RFXIEWED FOR THE ATTORNEY GENERAL BY: W, V. Geppert