! 

THE ATTOWXEY GENERAL 

OF TEXAS 

June 24, 1987 

P 

Mr. Marvin 3. Titaman 

Executive Director 

Texas Surplus Property Agency 

P. 0. Box 8120 

San Antonio, Texas 78208 

Opinion No. m-726 

Re: Whether competitive bidding 

statutes apply to property 

obtained by a county through the 

Texas Surplus Property Agency 

Dear Mr. 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 Federal Property and Administrative Service 

Act of 1949, as amended, provides that surplus 

personal property under the control of an 

executive agency of the federal government may be 

transferred to a state agency which is designated 

by state law as the agency responsible for the 

fair and equitable distribution of the property in 

accordance with the provisions of 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 

performed by the state agency. 

The Texas Legislature created and designated 

the Texas Surplus Property Agency as the state 

agency for the purpose of the Federal Property and 

Administrative Services Act of 1949. See V.T.C.S. 

art. 6252-6b, 94. Its primary funczn is the 

acquisitiou, warehousing. and distribution of 

surplus federal personal property to entities that 

qualify under the federal act. 

Attorney General Opinion JM-417 (1985). 

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

The Texas Surplus Property Agency may distribute surplus property 

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 transfer by 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 the value 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 

governments are subject to the competitive bidding 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 enacted by the same session of the 

legislature, the latest expression of legislative intent prevails. 

State v. 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 competitive bidding for county purchases 

in excess of $5,000; they were then repealed by the bill enacting 

article 2368a.5, V.T.C.S., which also requires competitive bidding 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 competitive bidding 

statute we need to address. 

Article 2368a.5. V.T.C.S., states as follows: 

Before a county may purchase one or more items 

under a contract that will require an expenditure 

exceeding $5,000, the commissioners court of the 

county must comply with the competitive bidding or 

competitive proposal procedures prescribed by this 

Act. 

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

-. 

p. 3378 
Mr. 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) (emphasis added). 

The Texas Surplus Property Agency does not sell personal 

property, since it is required by law to distribute it to public 

entities without requiring payment for its value. You ask whether the 

competitive bid provisions apply to the service and handling charges 

assessed by the Texas Surplus Property Agency 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 items under a contract that will require an expenditure exceeding 

$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 charges which 

the county pays to the Texas Surplus Property Agency incidental to its 

receipt of surplus personal property, are subject to the following 

exemption to the competitive bidding 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 

commissioners court by order grants the exemption: 

. . . . 

(7) an item that can be obtained from only one 

source, including: items for which competition is 

precluded because of the existence of patents, 

copyrights, secret processes, or natural monopolies; films, manuscripts, or books; electric 

power, gas, water, and other utility services; and 

captive replacement parts or components for equipment . 

(b) If an item exempted under Subdivision (7) 

of Subsection (a) of this section is purchased, 

the commissioners court, 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. (Emphasis added). 

p. 3379 
Mr. 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 

Property Agency only if that agency provides the services necessary 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 surplus property 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 competitive bidding 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 

Property Agency 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 truly you 

J A;r /L=x 

JIM MATTOX 

Attorney General of Texas 

JACK HIGHTOWER 

First Assistant Attorney General 

MARY KELLER 

Executive Assistant Attorney General 

JUDGE ZOLLIE STEAKLEY 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Susan L. Garrison 

Assistant Attorney General 

p. 3380