### THE ATTORNEY GENERAI. OtiTEXL-LS

April1,1988

Honorable Mike Driscoll Harris County Attorney 1001 Preston, Suite 634 Houston, Texas 77702 Opinion No. JM-881
Re: Whether Harris County may require in its bid specifications for construction contracts that a minimum of 25 percent of thework be performed by the contractor8s employees (RQ-1230) **Dear** Mr. Driscoll:
Your ask our opinion about the following question: May Harris County include aprovision in its bid specifications for county construction contracts which requires that **a** minimum of twenty-five percent of the work beperformed by the contractor's employees?
We conclude that the county is not permitted to include such aprovision inbid specifications for construction contracts. Construction contracts entered into by the county requiring anexpenditure exceeding $5,000 must comply with the County Building Authority Act, the County Certificate of Obligations Act, and the County Purchasing Act, chapters 293, 271, and 262 ofthe Local Government Code, see also Acts 198.7,70th beg., ch. 722, 55;Acts 1987, 70th Leg., ch. 785, 91; andActs 1987, 70th Leg., ch. 802, 51 (amending article 2368a.5, V.T.C.S., the County Purchasing Act, subsequent tothe repeal and codification of the article inthe Local Government Code). Section 262.025 ofthe **Local** Government Code provides that a "competitive bidding notice" must be published in the public press prior tothe deadline for the acceptance ofbids. The notice must contain:

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(1)the snecifications describing the item tobepurchased orastatement ofwhere the specifications may be obtained; (2)the time and place for receiving and opening bids and the name and position of the county official oremployee towhom the bids are tobe sent: (3)whether the bidder should use lumpsum orunit pricing: (4)themethod ofpayment by the county: and(5)the type ofbond required by the bidder. (Emphasis added.)

Local Gov't Code 5262.025. Nothing in this section authorizes the inclusion ofaprovision in specifications limiting the amount of work which may be performed by a subcontractor of asuccessful bidder. -, The Local Government 

### Coderequires acounty to either award acontract "to the resnonsible bidder who submits the lowest and best bid" orto "reject all bids" and solicit for new ones. Local Gov't Code 5262.027. However,[a]contract may not beawarded to a bidder

who isnot the lowest dollar bidder meeting specifications unless, before the award, each lower bidder is given notice of the proposed award and isgiven an opportunity to appear before the commissioners Court and present evidence concerning the 

### lower bidder's responsibility.
Local Gov't Code 5262.027. As one appeals court has noted, the statute has one paramount objective:

[T]o stimulate competition, prevent favoritism and secure the best work and materials atthe lowest practicable price, for the best interests and benefit of the taxpayers

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and property owners. There can be no competitive bidding in alegal sense where the terms ofthe letting of the contract prevent or restrict competition, favor a contractor ormaterial man, or increase the cost of thework or ofthe materials or other items going into the project.
Sterrett v. Bell, 240 S.W.2d 516, 520 (Tex. Civ. App. - Dallas 1951, nowrit). The Supreme Court quoted this language with approval inTexas Hiahwav Commission v. Texa Association of Steel Imnorters. Inc., 372 S.W.2d 525 (Texs 1963). Inthis case, the court considered ahighway department rule that restricted bids to those bids from contractors furnishing construction materials manufactured only inthe United States. The court rejected that rule asaviolation ofacompetitive bidding statute (V.T.C.S. art. 6674h), similar to the statute under consideration here. The court stated that an administrative body subject toacompetitive bidding statute must act only to promote the unmistakable legislative policy favoring unrestricted competition forpublic contracts. 372 S.W.Zd at 529. See Attorney General Opinions MW-439 (1982): MW-344, MW-296 (1981), MW-139 (1980): H-1219 (1978); H-1086, H-972 (1977). a Attorney General Opinion JM-712 (1987) (legislature may vary **policy** of **Strict Competition**  byproviding exceptions to key principle of competitive bidding statute.) The county thus has nopower to limit the competition generated bybidding. Nor **may** itreject abid by imposing acondition for the selection of the lowest responsible bidder when the condition could not be used to limit the solicitation of the bid. Attorney General Opinions H-1219; H-1086. of course, the county isnot required to accept abid merely because it is the lowest. The statute only requires that the county accept the lowest and best bid proffered. The county may make an informed, non-arbitrary decision based onthe facts that aparticular bid isnot a responsible one. Corbin v. Collin Countv commissioner's Court, 651 S.W.2d 55 (Tex. APP. -Dallas 1983, no writ). This does not mean that the county may determine that contractors who intend to subcontract **some** ofthe work due under acontract cannot submit responsible bids. Such a determination would be flatly illegal, either as an advance disqualification for bids or as arationale for rejecting alower bid in favor ofa higher one. But if

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.

the commissioners have anobjective reason, supportable by facts fairly known to them, that a particular bidder cannot perform responsibly because of some objective impediment, they may consider rejecting that bid, and the rejection would not be anabuse ofdiscretion. Corbin, sunra. -



### SUMMARY
The County Building Authority, Certificate of Obligation, and County Purchasing Acts, chapters 293, 271, and 262 of the Local Government Code, require that a county award certain construction contracts by a process of competitive bidding. Solicitations for bids may not be limited by requiring that bidders promise to perform work using their own employees. The county may make an informed, non-arbitrary decision that aparticular bid isnot a responsible one.

JIM MATTOX Attorney General of Texas
MARY KELLER First Assistant Attorney General
LOU MCCREARY Executive Assistant Attorney General
JUDGE ZOLLIE STEAKLKY Special Assistant Attorney General
RICK GILPIN Chairman, Opinion Committee Prepared by Don Bustion Assistant Attorney General

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