# The Attorney General of Texas May29. 1981

**MARK WHITE**  AttorneyGeneral

Honorable Gibson D.(Gib)Lewis Chairman Committee onIntergovernmental Affairs House ofRepresentatives John H.Reagan Bldg., No. 114 Austin, Texas 787ll Opinion No. MU-344 Re: Competitive bidding requirement

Dear Representative Lewis: You have requested our opinion asto whether the Soard ofTrustees of Galveston Wharves isrequired to receive competitive bids in order to award a contract for the services ofa container terminal operator. The Board of Trustees of Galveston Wharves Is a public body which operates the port facilities of the city of Galveston, pursuant to article ll87f, V.T.C.S. The board presently operates a container terminal at the port, consisting of, inter alia, lrtwo ships’berths, two high-speed specialized 40-ton container cranes, and upland area of approximately 32 acres for the storage and placement of containers varying in size from 20foot to 40 foot lengths.” Theboard proposes to contract with a container terminal operator for the purpose of operating these facilities. You ask .whether the board must engage incompetitive bidding inorder to award **such a** contract. We note initially that the board of trustees may not &legate any governmental function to a private business. In City of Galveston v. Hill, 519S.W.2d103(Tex. 19’751, the supreme court held that, although the board was authorized to lease a grain elevator facility at the Port ofGalveston to aprivate concern %oas to secure special expertise necessary to operate it,” it was not “empowered to delegate its governmental or legislative functions%

. .. The management and control of the facility.

. .

is to be limited to proprietary affairs and must not involve the redelegation of governmental or legislative functions of the board of trustees. The manage ment of income and revenue from the Galveston Wharves, the setting of rates and the determination Ofpolicies, being governmental functions, have been explicitly vested in the discretion of the board of trustees by the city charter, and such cannot be surrendered, delegated orbartered away.

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519S.W. 2d at 106. For purposes ofthis opinion, weassume that a contract to operate the container terminal facilities would not require the delegation of governmental functions. Article 2368a, V.T.C.S., provides, inpertinent part:

Sec. 2. (a) No county, acting through its Commissioners Court, and no city in this state shall hereafter make any contract calling for or requiring the expenditure ofpayment of Three Thousand Dollars ($3,000.00) or more out of any fund or funds of any city or county orsubdivision ofany county creating orimposing an obligation or liability of any nature or character upon such county orany subdivision ofsuch county, or upon such city, without first submitting such proposed contract to competitive bids. Notice ofthe time and place when and where such contracts shall be let shall be published in such county (if concerning a county contract or contracts for such subdivision ofsuch county) and insuch city, (if concerning a city contract), once a week for two (2)consecutive weeks prior to the time set for letting such contract, the date of the first publication to be at least fourteen (14)days prior to the date set for letting said contract; and said contract shall belet to the lowest responsible bidder. The court and/ or governing body shall have the right to reject any and all bids, and if the contract is for the construction of public works, then the successful bidder shall be required to give agood and sufficient bond Inthe full amount of the contract price, for the faithful performance of such contract, executed by some surety company authorized to do business in thii state in accordance with the provisions of Article 5160, Revised Statutes of 1925, and the amendments thereto. However, the city or county in making any contract calling for or requiring the expenditure of payment of Three Thousand Dollars ($3,000.00) or more and less than Fifty Thousand Dollars ($50,000.00) may, in lieu of the bond requirement, provide the contract that no money will be paid to the contractor until completion and acceptance of the work by the city or county. If there is no newspaper published in such county, the notice of the letting of such contract by such county shall be given by causing notice thereof to be posted at the County Court House door for fourteen (14)days prior to the time of letting such contract. If there is no newspaper published in such city, then the notice of letting such contract shall be given bycausing notice thereof to beposted at the City Hall for fourteen U4)days prior to the time of letting such contract. Provided, that in case of public calamity, where it becomes necessary to act at once to appropriate money to relieve the necessity ofthe citizens, or to preserve the property

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of such county, subdivision, or city, or when it is necessary to preserve or protect the public health of the citizens of such county or city, or in case of unforeseen damage to public property, machinery or equipment, this provision shall not apply; and provided further, as to contracts for personal or rofessional services; work done bysuch county or city and paid or bv the dav. as such work orouresses: and the ourchase of land &d righi:of-way for authorLed needs and purposes, the provisions hereof requiring competitive bids shall not apply and in such cases the notice herein provided shall be given but only with respect to an intention to issue time warrants with right of referendum as contemplated in Sections 3 and 4 hereof respectively. (Emphasis added). You suggest that any contract to operate container terminal facilities wouldconstitute a contract for “personal or professional services” and thus be excepted from the bidding provisions ofarticle 2368a. The statutory exception in section 2of article 2368a for %ontracts for personal or professional services” was added in 1931. Acts 1931,42d Leg., ch. 163,at 269. In Attorney General Opinion H-660 (l975), thii office, in holding that a commissioners court was authorized to contract for law enforcement consultant services without receiving competitive bids therefor, said that the exception for “personal or professional services”:

appears to be a codification of a case law exception concerning contracts for services requiring special shills. In support of this proposition, Opinion H-660 cites Stephens 52 S.W.2d53(Tex. 1932),which upheld the execution & a contract for the services of an architect without *competitive bids. Two other cases brought under the pre-1931 statute involved architectural services, one related to acontract with a civil engineer, and one uoheld a contract with a oavina comoanv for suoervision of countv road construction wor Attorney Gene&l O$nion‘C-267 (1964). The latter ca&, Gulf Bitulithic Co. v. ltueces Counts ll S.W.2d305, 309-10(Tex. Comm’n App. 1926),isthe only instance ofaTexas court’s upholding acontract in which the contractor wasnot a member ofa clearly recognized profession. Whatever the state of the case law in 1931,the exception enacted that year did not establish a “special skillr? standard, but one of “personal or professional services.” To the extent that Attorney General Opinion H-680 (l975) suggests otherwise, we believe it isincorrect. Inour view, it is necessary to examine the particular meanings of “personal services” and “professional services” to determine whether a contract for the services ofacontainer terminal operator falls within either category. In Van Zandt v. Fort Worth Press, 359 SW. 2d 893 (Tex. 1962), a newspaper

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brought an action to recover amounts due for advertising services. The ne,wspaper contended **that** advertising services were “personal services,” and, as a result, article 2226, V.T.C.S., authorized the recovery ofattorneys fees therefor. The supreme court quoted with approval the Supreme Court of Utah:

The term ‘personal service’ indicates that the **‘ act** **’ done**  for the benefit of another is done personally by aparticular individual. (Emphasis in original). 359 S.W. 2d at 895. The court held that, although the labor of the newspaper’s employees might qualify as “personal services, ”the cause of action was for something more inclusive - “advertising services ” - which embraced not merely personal services, but profit, taxes, insurance and other items. In Radio KOKE, Inc. v. Tiemann, 378S.W. 2d 952 (Tex. Civ. App.- Austin 1964, writ reM n.r.e.). olaintiff soueht attornevs fees under article 2226in a suit to recover **the Cost**  of mo&g householzgoods. The court said that attorneys fees might have been recoverable on that portion of the contract attributable to employees’ wages, if the wages had been separately itemized. But when noitemization ismade and the use of-machinery and equipment ispart ofthe cost ofthe contract, the contract Isone for

“personal services” only if the contribution of the machinery to total cost is substantially less than the contribution of employee wages. As an example of a contract that could not **be** considered one for personal services, the court suggested the operation of a loo-car freight train by a crew of three or four men. The employment of a laborer to dig a ditch using his own pick and shovel, on the other hand, isclearly acontract for personal services. In our opinion, these two cases indicate clearly that a contract to operate container terminal facilities, which operation you have described as complex and {technical, cannot reasonably be described as one for “personal services.” Even if a large portion ofthe contract price isassigned to labor costs, the total contract amount will certainly include costs ascribable to taxes and insurance as well as the operator’s anticipated profit. Accordingly, the contract may not be excepted from the competitive bidding requirement ofarticle 236aa asa“contract for personal services.” The meaning of “professional services” is less clear, but court decisions in this area are sufficiently similar to persuade usthat a container terminal operator does not perform them. In Maryland Casualty Co. v. Crazy Water Co., 160S.W. 2d 102(Tex. Civ. App.- Eastland 1942,no writ), the court determined that operating abath house is a business rather than aprofession. Ina profession, the court said, the labor and skill required are “predominantly mental or intellectual, rather than physical or manual.” 160S.W.2d at 105. See also, Horn v. Burns and Roe, 536F;2d251,255(8th Cir., 1976). A Louisiana court, in Transportation Displays, Inc. v. City of New Orleans, 346 So. 2d 359 (La. App. 1977), held that public bidding was required on a contract to conduct the sale of advertising space and facilities at an airport, since the sale of

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advertising services did not constitute the rendering of “professional services.” A

“professional,” the court observed :

denotes a person in a profession which requires years of education and service for one to attain competence and which calls for ahigh order ofintelligence, skill and learning.

**346 So.** 2d at 363, fn. 5. The most useful standard for judging the scope of “profession” was furnished by the Supreme Court of West Virginia in Wooddell v. Dailey, 230 S.E. 2d 466 (W.Va. 19’76).Inthat case, the court, while holding that **the**activities of an interior decorator were not “professional services,” acknowledged that the term included more than

“theology, law or medicine.” Neither wasthe term limited to the pursuit ofoccupations specifically recognized as professions by statute. 230 S.E. 2d at 469-70. But a “profession” must be established es such. While ”most occupations, trades, business or callings require a diversity of knowledge and skill,” it is only the

“professional” who:

is a member of [a] discipline with widely accepted standards of required study or specified attainments in special knowledge as distinguished from mere skill. Id. at 470. - Likewise, in Glushak v. City of New York, 178N.Y.S. 2d 33(App. Div. 19581,the court emphasized the factor of recognition in holding that a renderer, **who**prepared pictorial representations of proposed buildings from plans submitted **by** professional architects and builders, didnot perform “professional services”:

The status of a professional.

. . does not include persons who, while working in fields related to recognized professions, have not yet achieved that recognition themselves. 178N.Y.S. 2d at 36. For the same reasons, we donot believe that a container terminal operator may fairly be said to be a member ofarecognized profession. As a result, a contract for the services of such an individual or company is not excepted from the competitive bidding requirement of article 2368a as a “contract for professional services.” We conclude that the Board of Trustees of Galveston Wharves is required to receive competitive **bids** pursuant to article 2368a in order to award a contract for the services ofa container terminal operator. SUMMARY The Board of Trustees of Galveston Wharves is required to receive competitive bids pursuant to article 2368a, V.T.C.S., in

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order to award a contract for the services of a container terminal operator. 

# WWF&g

Attorney General ofTexas JOHN W.FAINTER, JR. First Assistant Attorney General RICHARD E.GRAY, HI Executive Assistant Attorney General Prepared byRick Gilpin Assistant Attorney General APPROVED: OPINION COMMlTTEE Susan L.Garrison, Chairman Mahon B.Gary, Jr. Rick Gilpin Jim Moellinger

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