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# The Attorney General ofTexas

. March 9, 1981

Honorable Mike Driscoll Harris County Attorney 1001Preston, Suite 634 Houston, Texas 77002 Opinion No.MW-299 ’ Re: Authority of acounty to teke a bid which provides for escalation incosts Dear Mr.Driscoll: The Commissioners Court of Harris County isrequired bylaw to award certain contracts after taking competitive bids. See, c.c., V.TE.S. arts. 1658, 1659, 1659a, 2358-6L 2368a. Contracts must generally be awarded to the lowest and best bidder. You advise that instead of stating alump sum bid in the bid form furnished by the county, some bidders insert an amcunt but also include an escalation clause which provides for price, increeses based upon increases in their costs. Weunderstand that the bid form which Harris County uses does not invite the use ofescalation clauses. You have asked the following questions:

L IsHarris County authorized to accept a bid which the bidder has qualified to provide for escalation in costs during the period ofthe contract, if the total bidcan becaloulatedt 2.

3. IsHarris County authorized to accept abid which the bidder has qualified to provide for escalation in costs during tha period of the contract, if the total bidcan not becalculated? IsHarris County authorized to accept an alternate bid not based onthe specifications? InTexas Highway Commission v.Texas Association ofSteel Importers. Inc., 372 S.W. 26 525, 527 (Tex. L863),the Texas Supreme Court, quotmg % Sterrett v. BelL 240 S.W. 2d 516,520 (Tex. Civ. App.-Dallas 1951.no writ), observed thet competitive bidding requires:

due advertisement, giving opportunity to bid, and contemplates abidding on the seme undertaking upon each of the same material items covered by the contract; upon the sB.me thing. It requires that allHonorable hIike Driscoll - Page Two

bidders beplaced upon the same plane ofequality end that they each bid upon the same terms and conditions involved inall the items andparts ofthe contract, and that the proposal specify as to all bids the same, or subs’tantially similar specifications. Its purpose is to stimulate competition, prevent favoritism and secure the best work and materials at the lowest practicable price.

... There can be no competitive bidding inalegal sense where the terms of the letting of the contract prevent or restrict competition, favor a contrector or materialman, or increese the cost of the work orofthe meteriek orother items going intothe project. See ako Attorney General Opinion H-24 (1973). In light of the views expressed in the foregoing quotation, we think it isreadily apparent that the commissioners court may not accept a bid which is not based upon advertised specifications. To do so would be to violate a fundamental tenet of the competitive bidding process, which is that bidders must have an opportunity to bid cn equai terms and to have their bids judged according to the same’standards. Further. the requirement that bids be evaluated in accordance with the same criteria must be observed if the commissioners court is to fulfill its statutory mandate to award contracts to the lowest and best bidder. This requirement cannot be satisfied when a bid is qualified in a manner not contemplated by the bid invitation and specifications, i&,. when it isnot based upon the criteria by which allbidders are given to understand their bids willbejudged. Wetherefore conclude that Harris County may not accept a bid which contains an escalation clause when such clauses are not mentioned in the advertised specifications. We do not address the question of whether the invited use of any particular escalation clause would be permissible, Accordingly, based upon the facts youhave submitted, weaneweryour questions inthe negative. SUMMARY The Commissioners Court of Harris County isnot authorized to accept a bid which is not based upon advertised specifications. Because the bid form which Harris Camty uses does not mention escalation clauses, the commissioners court may not accept abid which contains an escalation clause, regardless of ’whether the total bid can becalculated.

(rMARK WHITE Attorney General ofTexas.,

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JOHS W.FAINTER. JR. First Asslstent Attorney General RICHARD E.GRAY III Executive Assistant Attorney General Prepared byJon Bible Assistant Attorney General APPROVED: OPINION COMMITTEE Susan L.Garrison, Chairman James Allison Jon Bible Rick Gilpin Bruce Youngblood .

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