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### THE ATTOWXEY GENERAL OF TEXAS

June 24, 1987

P Mr. Marvin 3. Titaman

ExecutiveDirector Texas SurplusPropertyAgency P. 0. Box 8120 SanAntonio, Texas 78208 OpinionNo. m-726

Re: Whether competitivebidding statutes apply to property obtainedby a county through the Texas SurplusPropertyAgency

DearMr. Titzman:

On behalf of the Texas Surplus Property Agency, you seek advice about the distribution of surplus federal property to counties. The Texas Surplus Property Agency was established by article 6252-6b, V.T.C.S. Its purpose is explained in Attorney General Opinion JM-417 (1985):
The FederalProperty andAdministrativeService

Act of 1949, as amended, provides that surplus personal property under the control of an executive agency of the federal governmentmay be transferred to a state agency which is designated by state law as the agency responsible for the fair and equitabledistributionof theproperty in accordancewith theprovisionsof the act. see 40 U.S.C. $484(j). Section 484(j)(4)(D) allowsthe state agency to assess and collect service charges from participating recipients to cover costs of the state agency's activities. The federal act requires such charges to be based on services performedby the state agency.
The Texas Legislature created and designated the Texas Surplus Property Agency as the state agency for thepurpose of the Federal Property and AdministrativeServicesAct of 1949. SeeV.T.C.S. art. 6252-6b, 94. Its primary funczn is the acquisitiou, warehousing. and distribution of surplus federalpersonal property to entities that qualifyunder the federalact.
AttorneyGeneral Opinion JM-417 (1985).

p. 3377Mr. Marvin J. Titman - Page 2 (JM-726)

The Texas SurplusPropertyAgencymay distribute surplusproperty to political subdivisions.40 U.S.C. 5484(j)(4)(B), (j)(5).The agency may assess a service and handling charge or fee for the acquisition, warehousing, distribution, or transferby the agency and, in the case of real property, such charges and fees shall be limited to the reasonable administrative costs of the agency incurred in effecting transfer. V.T.C.S. art. 6252-6b, 54(l). The statute authorizes no charge to the recipient for thevalue of the property itself,but only for the service and handling charges. The federal government retains conditional title to the property. If the donee does not use it in accordance with the conditions attached to the transactions, it must be returned to the agency. 40 U.S.C. $484(j)(4)(C)(ii).

You ask whether distributions of surplus property to county governmentsare subject to the competitivebidding laws.
Article 2368a.5. V.T.C.S.. the County Purchasing Act, includes the competitive bidding provisions applicable to counties. It was enacted in 1985 as the major part of a bill which also repealed articles 1658, 1659, 1659a.and 1659b.V.T.C.S.. among other statutes. Acts 1985, 69th Leg., ch. 641, 511, at 2377, 2384; 888 Attorney General Opinion IN-535 (1982). The same session of the legislature amended articles 1659 and 1659b,V.T.C.S., which also state competitive bid requirements for counties. Acts 1985, 69th Leg., ch. 806, $2, at 2850. 2851. The amendments to articles 1659 and 1659b were adopted first, followed by the repealer a few days later. See Acts 1985, 69th Leg., ch. 641, at 2377, 2385; ch. 806, at 2850, 2851.
When conflicting statutes are enactedby the same session of the legislature, the latest expression of legislative intent prevails. Statev. Easley, 404 S.W.2d 296, 300 (Tex. 1966);Ex parte de Jesus de la O., 227 S.W.2d 212 (Tex.Grim. App. 1950);Attorney General Opinion Nos. MW-139 (1980);B-1107 (1977). Articles 1659 and 1659b,V.T.C.S., were first amended to require competitivebidding for countypurchases in excess of $5,000; they were then repealed by the bill enacting article 2368a.5,V.T.C.S.,which also requires competitivebidding for purchasing in excess of $5,000. V.T.C.S. art. 2368a.5, 03(a). Therefore, article 2368a.5,V.T.C.S., is the only competitivebidding statutewe need to address.
Article 2368a.5.V.T.C.S., states as follows:

Before a countymay purchase one or more items under a contract that will require an expenditure exceeding $5,000, the commissioners court of the countymust complywith the competitivebidding or competitiveproposalproceduresprescribedby this Act.

V.T.C.S. art. 2368a.5, 53(a). -.

p. 3378Mr. Marvin J. Titzmau - Page 3 (JM-726)

You state in your letter that the "service and handling" charges allowed by article 6252-6b.V.T.C.S., are not to be construed as the purchase price of the surplus property. Federal law allows your agency to "collect service charges from participating recipients to cover direct and reasonable indirect costs.

. . ." 40 U.S.C. 5484(j)(4)(D) (emphasisadded).
The Texas Surplus Property Agency does not sell personal property, since it is required by law to distribute it to public entitieswithout requiringpayment for its value. You ask whether the competitivebid provisions apply to the service and handling charges assessedby theTexas SurplusPropertyAgency pursuant to section 4(l) of article 6252-6b.V.T.C.S.
Article 2368a.5, V.T.C.S., applies to the purchase of "one or more itemsunder a contract thatwill require an expenditureexceeding $5,000." V.T.C.S. art. 2368a.5. §(3)(a). An "item" includes "any service." Id. 92(3). Thus, if the purchase of "service and handling charges" required an expenditure in excess of $5,000, the commissioners court would ordinarily have to comply with the competitive bidding or competitive proposal procedures of article 2368a.5, V.T.C.S. We believe, however, that service and handling chargeswhich the countypays to the Texas Surplus PropertyAgency incidentalto its receipt of surplus personal property, are subject to the following exemption to the competitivebidding requirement:

(a) A contract for the purchase of any of the following items is exempt from the requirement established by Section 3 of this Act if the commissionerscourtby order grants the exemption:

. . . . (7) an item that canbe obtained from only one source, including: items forwhich competition is precluded because of the existence of patents, copyrights, secret processes, or natural monopolies; films, manuscripts, or books; electric power, gas,water, and otherutility services;and captivereplacementparts or components for equipment

. (b) If an item exempted under Subdivision (7) of Subsection (a) of this section is purchased, the commissionerscourt, after accepting a signed statement from the county official who makes purchases for the county as to the existence of only one source, must enter in its minutes a statement to that effect. (Emphasisadded).

p. 3379Mr. Marvin J. Titzman - Page 4 (JM-726)

V.T.C.S. art. 2368a.5, 14(a)(7), (b).

A county may acquire surplus property through the Texas Surplus PropertyAgency only if that agencyprovides the servicesnecessary to transfer the property. Article 6252-6b. V.T.C.S., gives the county no opportunity to negotiate with other providers for acquisition, warehousing, or transportation services. Therefore, when the county acquires surplusproperty from the Texas Surplus Property Agency, the agency is by law the sole source for services necessary to transfer property to the county. The county may invoke the "one source" exemption from the competitivebidding requirement.

SUMMARY
Articles 1659 and 1659b, V.T.C.S., were repealed in 1985 by the legislation enacting article 2368a.5, V.T.C.S., the County Purchasing Act. The county government may accept transfers of surplus personal property by the Texas Surplus PropertyAgency and pay the authorized service and handling charges incidental to such transfer without complying with the competitive bidding requirements of article 2368a.5, V.T.C.S. The payment of service and handling charges is within the section 4(a)(7) exemption to article 2368a.5, V.T.C.S.
Very trulyyou

J /L=x

A;r JIM MATTOX Attorney General of Texas

JACK HIGHTOWER First AssistantAttorney General

MARY KELLER ExecutiveAssistantAttorney General

JUDGE ZOLLIE STEAKLEY SpecialAssistantAttorney General

RICK GILPIN Chairman,Opinion Committee Prepared by SusanL. Garrison AssistantAttorney General

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