August 30, 1990 

Honorable Hugh Parmer Opinion No. JM-1213 

Chairman 

Intergovernmental Relations Re: Authority of a municipalCommittee ity to require health benefit 

Texas State Senate provisions to be included in 

P. 0. Box 12068 specifications for contract 

Austin, Texas 78711 security guards (RQ-1991) 

Dear Senator Parmer: 

You ask whether the City of Houston can authorize 

specifications requiring that the city's independent 

contractors provide their employees with basic health 

insurance benefits. We understand that the question relates 

specifically to independent contractors providing security 

guard services under contracts with the city. We also 

understand that the city formerly employed its own security 

guards and has ceased the practice. The city attorney's 

office has rendered its opinion on the matter and concluded 

that such a requirement would contravene competitive bidding 

requirements. We agree. 

Chapter 252 of the Local Government Code is the law 

that governs city purchases. With certain exceptions that 

do not appear to be relevant here, that chapter requires 

that cities with 50,000 or more inhabitants let contracts 

for amounts over $10,000 by means of competitive bidding. 

Local Gov't Code 3 252.021(a). We are advised that the 

Houston city charter contains a complementary provision. 

Competitive bidding laws are designed to ensure that 

the public receives "the best work and materials at the 

lowest practicable price." v, 240 S.W.2d 

516, 520 (Tex. Civ. App. - Dallas 1951, no writ); see also, 

Texas a Hi hwa omm'n-v. Imnorters 

Inc.. 372 S.W.2d 525, 527 ITex. 19631. This end is achieved 

bydisallowance of specifications that are unrelated to the 

quality or quantity of the goods or services or that 

otherwise restrict competition. In Texas Hishwav 

Commission, suvra, the court determined that a highway 

commission minute order requiring that construction material 

P. 6418 
, 

Honorable Hugh Parmer - Page 2 (JM-1213) 

used by the commission be domestically manufactured violated 

the competitive bidding statute. The court said "Matters of 

quality should be fixed by quality specifications and not by 

proscriptions as to localities of manufacture or fabrication." Id. at 529. 

By the same token, we believe that matters of quality 

in the provision of security guard services should not be 

fixed by requiring that contractors provide their employees 

with health insurance benefits. Such a requirement may 

result in a work force that is less dependent on publicly 

supported health care, but it has no direct relation to the 

quality of security guard services. 

This office has noted that the legislature may alter 

the general competitive bidding rules by adopting exceptions 

or authorization that would otherwise contravene the mandate 

that goods and services be purchased through unrestricted 

competition. Attorney General Opinion JM-712 (1987) (statutory exception for out-of-state bidders found in article 

601g, V.T.C.S.); see also Local Gov't Code 5 262.025(d) 

(authority for certain political subdivisions to require 

that 25% of work be performed by bidder): Attorney General 

Opinion JM-881 (1988) (requirement that 25% of work be 

performed by bidder's employees violates statute). We have 

found no similar exception for a requirement of health 

insurance benefits. 

It has been suggested that the city is a public health 

agency, and in that capacity, it has the authority to enact 

such an exception to the competitive bidding statute. As 

this office noted in Attorney General Opinion JM-712 (1987), 

the state law may only be overcome by an exception defined 

by the state legislature. 

SUMMARY 

The City of Houston may not require, 

either through an ordinance or through job 

specifications, that its contractors provide 

their security guards with basic health 

insurance benefits,. 

JIM MATTOX 

Attorney General of Texas 

p. 6419 
Honorable Hugh Parmer - Page 3 (JM-1213) 

MARY KELLER 

First Assistant Attorney General 

LOU MCCREARY 

Executive Assistant Attorney General 

JUDGE ZOLLIE STEAKLEY 

Special Assistant Attorney General 

RENEA HICKS 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Karen C. Gladney 

Assistant Attorney General 

p. 6420