cm. 1. ,.: 

-? 

. 

f 

The Attorney General of Texas 

. 

March 9, 1981 

Honorable Mike Driscoll 

Harris County Attorney 

1001 Preston, Suite 634 

Houston, Texas 77002 

Opinion No. MW-299 ’ 

Re: Authority of a county to teke 

a bid which provides for escalation 

in costs 

Dear Mr. Driscoll: 

The Commissioners Court of Harris County is required by law 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 a lump 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. We understand that the bid form which 

Harris County uses does not invite the use of escalation clauses. You have 

asked the following questions: 

L Is Harris County authorized to accept a bid which 

the bidder has qualified to provide for escalation 

in costs during the period of the contract, if the 

total bid can be caloulatedt 

2. 

3. 

Is Harris County authorized to accept a bid which 

the bidder has qualified to provide for escalation 

in costs during tha period of the contract, if the 

total bid can not be calculated? 

Is Harris County authorized to accept an alternate 

bid not based on the specifications? 

In Texas Highway Commission v. Texas Association of Steel 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 a bidding on the seme undertaking upon 

each of the same material items covered by the 

contract; upon the sB.me thing. It requires that all 
Honorable hIike Driscoll - Page Two 

bidders be placed upon the same plane of equality end that they 

each bid upon the same terms and conditions involved in all the 

items and parts of the 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 in a legal 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 or of the meteriek or other items 

going in to the project. 

See ako Attorney General Opinion H-24 (1973). 

In light of the views expressed in the foregoing quotation, we think it is readily 

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 is not based upon the criteria by which all bidders are given to understand 

their bids will be judged. 

We therefore 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 

you have submitted, we anewer your questions in the negative. 

SUMMARY 

The Commissioners Court of Harris County is not 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 a bid which contains an escalation clause, regardless of 

’ whether the total bid can be calculated. 

(rMARK WHITE 

Attorney General of Texas 
., 

. 

’ --; . 

Itonornble Mike Driscoll - Page Three 

JOHS W. FAINTER. JR. 

First Asslstent Attorney General 

RICHARD E. GRAY III 

Executive Assistant Attorney General 

Prepared by Jon Bible 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Susan L. Garrison, Chairman 

James Allison 

Jon Bible 

Rick Gilpin 

Bruce Youngblood 

. 

- -. 

P. 956