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## THEA~TORNEYGENERAL

OF -XAS

AUSTIN xx. TEXAS

October 10, 1960

Honorable D. C. Greer State Highway Engineer State Highway Department Austin 14, Texas Opinion No. 'M-946

Re: Whether Highway Department may provide in its bridge improvement conDear Pl- Greer: , tracts that the contractor may keep the portions of a dismantledbridge not needed by the Department, or whether such materialsmust be disposed of under Article 666 pertaining to the Soard of Control.

Your opinion request reads as follows:

"Much of the work we do on the State Highway System involves the replacementof existingbridges which are too narrow or too weak to meet today's traffic demands. On these jobswe have an item in
our contractwhich requires the contractor to dismantle the old bridge. In the past, we have retained any of the materials in the bridge which were suitable for use on the State Highway System and have allowed the contractorto retain any othermaterials,
even though theymay have had some value. Itwas felt that due to the great amount of competition in the bidding on these jobs the value of thematerial would be reflected in the bids on the other items and that we had the authority to do this under Article 6674k, which states as follows:

'The State Highway Commission shallprescribe the form of such contracts andmay include therein suchmatters as theymay deem advantageous to the State. Such forms shall be uniform, as near as may be.'

"Some time ago we had Attorney General Opinion O-6798 called to our attentionwherein it was stated that the Health Department cauld not trade unneeded laboratory equipment for repair work on one of their. .‘?

Honorable D. C. Greer, Page 2 W-946)

buildingsbut that the equipmentwould have to be sold under the provisions of Article 666.

"Wouldyou please advise us whether the reasoning in that opinion applies to a contract for the improvementof the highway system or whether we have the authority to so dispose of such sur lus perty under the provisions of Article 6iz pro7&k."

You have correctly quotedArticle 6674k. This article is under Chapter 1, Title 116, settingup the State Highway Commission,providing for the awarding of contracts, the maintenance of highways, and alliedmatters. The broad language of Article 6674k concerningthe contents of contractswas never designed nor intended to give the State Highway Commissionthe authority to override positive statutes on the alienationof the title to State's property. It dealswith an entirelydifferent subject.

In Attorney General Opinion 0-6798, aboutwhich you inquire, this office held that the Health Department could not trade unneeded laboratory equipment for repair work
on oneoftheir buildings, the basis of the opinion being that samewould have to be sold under Article 666. We quote from the opinion.

"The questionhere presented is whether public personalpropertywhich is no longer needed may be exchanged for work or servicesnecessary in the repair of a public building. No authority for such an exchangehas been found but to the contrary it appears that the disposition of the public personalpropertymentioned in your letter should be governed by Article 666, Vernon's Annotated Civil Statutes of Texas."
That opinion is very much applicable and would bs our holding herein except for a recent statute latermentioned.
Article 666 provides for the disposition of either Article provides disposition surplus property salvageproperty direction surplus property or salvagepropertyunder the direction of the Board of Control. Surplus property is defined to

personalproperty be "any personalpropertywhich is in excess of the needs of any State agency and which is not required for its required foreseeableneeds." Salvage property defined foreseeableneeds." Salvage property is defined to be r'any personal propertywhich throughuse, time, or accident personal property through accident is so depleted,worn out, damaged,used or consumed that it has no value for the purpose for which it was originally intended." is so depleted,worn out, damaged,used or consumed that it has no value for the purpose for which it was originally intended.".. . .

Honorable D. C. Greer, Page 3 (W-946)

It seems very clear that if the componentparts of this dismantledbridge are useful and usable but are simply not needed by the State that they would be surplusproperty. This is the way you describe them. On the other hand, if (dueto any of the things enumerated in the definition) they have no value for the purpose for which originally intended, clearly theywould be salvageproperty. Thus, it is inescapable that this property falls in one category or the other; it is either surplusproperty or it is salvageproperty.

Our Supreme Court in Chas. Scribner's Sons v. Xarrs, 262 s..WO622 held: "If state authorizesa certain officer
or legal body to contract for it in regard to a certain subject,no other officer or governmentalagency can exercise the authority."

However, Article 666 has been amended and revamped by the Salvage and Surplus Act of 1957, which became effective September 1, 1957. While the Board of Control, in the main, is still chargedwith the duty of disposing of surplus and salva e property,

5 a notable exception is provided by Section We quote:

"Any state agencymay offer surplus or salvage propertywhich has become unfit for use as a trade-in
on new property of the same general type when such exchange is in the best interests of the state." Article 666, Sec. 6.
This authorityof "trade-inis is unlimited except as to the requirement that the new propertybe of the same general type as the surplus or salvage and that the exchange be in the best interests of the State. It is not restricted to typewriters, automobiles,or any specific kind of property; itwould applywith equal force to the materials used in the constructionof a bridge. Inquiry and inspectionof your bridge contract forms reveal that the contractsare let upon unit bid price on many items. 3esides the various items of labor and construction there are items such as removing old bridge, structural steel beams, railing, piling, concrete and the many other things necessary to build the bridge0 Thus the contractornot only agrees to constructthe bridge but also agrees to furnish themanifoldmaterials requisite for the construction, The Highway Department, therefore, literally "buysItfrom the contractorthese items. To say that a trade-in is not permitted for thesematerials is to engraft
an exceptionon the statuteswhich the legislaturedid not
see fit to put there.Honorable D. C. Greer, Page 4 (W-946 

## 1

You state in your opinion request the bidding the value of thematerial

## ‘( be reflected in the bids on the other iit is felt that in the surplus)would terns. This is likely true in some instances,but is not necessarily SO*

Unless the contractorhas some definite idea as to what he may expect in the way of thesematerials his bid would likely reflect nothingby way of an allowance. Such indefinite and unknownmaterials as he might eventuallyreceive might turn out to be a complete"give-away"by the State.

Ve have examined a bridge contract on a past construction job. A standardprintedprovision gives the contractor such dismantledmaterials as are left after the State has takenwhat it wants. However, in this instrumentthere is another sheet amendatory of the first one,wherein the materials to be taken by the contractorare specified. This should be done in every contract, and a slight addition to the bid sheets shouldbe made, wherein the bidder shall specifyhow much allowance or trade-in creditwill be given for the salvage and surplusmaterials. 3y doing these things you can make the deal a bona fide "trade-in,"itwill clearly come within the quotedpart of Sec. 6 of Art. 666, andyou will el.iminate

the question as to whether "such exchange is in the best interests of the State." Shouldyou not want to dispose of thesematerials as suggested then the services of the 3oard of Control are open to you. said Sec. 6 says: The concludingportion of

"And furtherprovided that when re uested by such agency or institutionto do so, an8 under the terms and conditions set forth in Sections 4 and 5 above, the 3oard of Controlwill dispose of said property as provided for in this acts"

It is therefore our opinion and we so hold that the State Iii

hway Departmentmay when applicableproceedunder Section % of Article 666 independentlyof the Board of Control. Thismeans that you may offer any surplus or salvageproperty taken from an old bridge,which has become unfit for use for your purposes, as a trade-in on the materials of the same general type which will go into the constructionof the new bridge, when the highway Department determines that suck exchange is in the best interests of the State; we therefore
see no objection to your making provision in your bridge contracts,under these circumstances,that the contractor may have such surplus or salvageproperty as a trade-in, but the contract should reflect the materialswhich the contractorwill get and the amount of the allowance or trade-in credit.Honorable D. C. Greer, Page 5 (W-946 1

Under Article 666, Section 6, the Highway Departmentmay, independentlyof the Board of Control,provide in its bridge contracts for the trade-in of surplusor salvageproperty which has becomeunfit for use9 the contract providingwhat materials the successfulbidder will get and reflecting the amount of the trade-in credit on the new materials to go in the bridge,when, in the opinion of the Department, such exchange is in the best interests of the State.

Yours very truly,

WILL WILSON Attorney General of Texas

WRS:ncs

APPROVED:

OPINION COIJKITTEE W. V. Geppert, Chairman

Bill Allen Ben Harrison H. Grady Chandler

REVIE‘WED

POR'THE ATTORNEY GENERAL

BY: Leonard Passmore