The Attorney General of Texas 

May 29. 1981 

MARK WHITE 

Attorney General 

Honorable Gibson D. (Gib) Lewis 

Chairman 

Committee on Intergovernmental 

Affairs 

House of Representatives 

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 as to whether the Soard of Trustees of 

Galveston Wharves is required to receive competitive bids in order to award 

a contract for the services of a 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 20 foot to 40 foot 

lengths.” The board proposes to contract with a container terminal operator 

for the purpose of operating these facilities. You ask .whether the board 

must engage in competitive bidding in order 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, 

519 S.W. 2d 103 (Tex. 19’751, the supreme court held that, although the board 

was authorized to lease a grain elevator facility at the Port of Galveston to 

a private concern %o as 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 

Of policies, 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 or bartered away. 

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Honorable Gibson D. (Gib) Lewis - Page Two (hW-344) 

519 S.W. 2d at 106. For purposes of this opinion, we assume that a contract to operate 

the container terminal facilities would not require the delegation of governmental 

functions. 

Article 2368a, V.T.C.S., provides, in pertinent 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 of payment of 

Three Thousand Dollars ($3,000.00) or more out of any fund or 

funds of any city or county or subdivision of any county creating 

or imposing an obligation or liability of any nature or character 

upon such county or any subdivision of such county, or upon such 

city, without first submitting such proposed contract to 

competitive bids. Notice of the 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 

of such county) and in such 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 be let 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 a good and sufficient bond In the 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 by causing notice thereof to be posted 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 of the citizens, or to preserve the property 

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Honorable Gibson D. (Gib) Lewis - Page Three (~~-344) 

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 by such 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 would constitute 

a contract for “personal or professional services” and thus be excepted from the 

bidding provisions of article 2368a. 

The statutory exception in section 2 of 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. 2d 53 (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 a contract 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. lt ueces Counts ll S.W. 2d 305, 309-10 (Tex. Comm’n App. 1926), isthe 

only instance of a Texas court’s upholding a contract in which the contractor was not a 

member of a 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 is incorrect. In our view, it is necessary to examine the particular meanings 

of “personal services” and “professional services” to determine whether a contract for 

the services of a container 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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Honorable Gibson D. (Gib) Lewis - Page Four (~~-344) 

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 of attorneys 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 a particular 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 2226 in 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 no itemization is made and the use 

of -machinery and equipment is part of the cost of the contract, the contract Is one 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, is clearly a contract 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 of the contract price is assigned 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 of article 236aa as a “contract for personal services.” 

The meaning of “professional services” is less clear, but court decisions in this 

area are sufficiently similar to persuade us that a container terminal operator does not 

perform them. In Maryland Casualty Co. v. Crazy Water Co., 160 S.W. 2d 102 (Tex. 

Civ. App. - Eastland 1942, no writ), the court determined that operating a bath house is 

a business rather than a profession. In a profession, the court said, the labor and skill 

required are “predominantly mental or intellectual, rather than physical or manual.” 

160 S.W. 2d at 105. See also, Horn v. Burns and Roe, 536 F; 2d 251, 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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Honorable Gibson D. (Gib) Lewis - Page Five (MW-344) 

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 a high order of intelligence, 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). In that 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 was the term limited to the pursuit of occupations 

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, 178 N.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, did not 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. 

178 N.Y.S. 2d at 36. 

For the same reasons, we do not believe that a container terminal operator may 

fairly be said to be a member of a recognized 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 of a 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 

p. 1138 
Honorable Gibson D. (Gib) Lewis - Page Six (~~-344) 

order to award a contract for the services of a container 

terminal operator. 

WWF&g 

Attorney General of Texas 

JOHN W. FAINTER, JR. 

First Assistant Attorney General 

RICHARD E. GRAY, HI 

Executive Assistant Attorney General 

Prepared by Rick Gilpin 

Assistant Attorney General 

APPROVED: 

OPINION COMMlTTEE 

Susan L. Garrison, Chairman 

Mahon B. Gary, Jr. 

Rick Gilpin 

Jim Moellinger 

p. 1139