DAN MORALES 

Al-rORNEY GENERAI. 

@ffice of tfp ZTlttornep QBeneral 

&date of Ill;exae 

September 23.1996 

Mr. Mike Moses 

commissioner of Education 

Texas Education Agency 

1701 North Congress Avenue 

Austin, Texas 78701-1494 

Opiion No. DM-4 18 

Re: Whether section 44.031 of the 

Education Code, enacted by Act of 

May 27, 1995, 74th Leg., RS., ch. 260, 

5 1, 1995 Tex. Sess. Law Sew. 2207, 

2425-26, changes the conclusion reached 

in Attorney General Qpiion DM-347 

(1995) and related questions (RQ-836) 

You request this office to reconsider Attorney General Qpiion DM-347 (1995) in 

light of newly enacted section 44.031 of the Education Code, see Act of May 27. 1995. 

74th Leg., RS., ch. 260, 5 1, 1995 Tex. Sess. Law Sew. 2207, 2425-26. You also ask 

several questions regardmg the competitive biddmg process as it applies to public schools. 

In Attorney General Opinion DM-347. issued May 4.1995, this office considered 

whether section 21.901 of the Education Code, repealed by Act of May 27, 1995, 74th 

Leg., RS., ch. 260, § 58(a)(l), 1995 Tex. Sess. Laws 2207, 2498, requires a school 

district to competitively bid a contract for the purchase of insurance. Attorney General 

Opiion DM-347 (1995) at 1. Overruhng Attorney General Opinion MW-342 (1981). 

Attorney General Opiion DM-347 concluded that the purcha.w of imwance does not 

constitute the purchase of professional services exempt from competitive bidding 

requirements. Attorney General Opinion DM-347 (1995) at 5. Rather, the opinion 

determined that a contract to purchase insurance constitutes a contract to purchase 

personal property; accordingly, section 21.901 of the Education Code required a school 

district to competitively bid the purchase unless the value of the contract for one year is 

less than S25.000. Id. The opinion did not limit its conclusion to the purchase of a 

particular kind of insurance, e.g., property and casualty insurance. 

At the time this office issued Attorney General Qpiion DM-347. section 21.901 

of the Education Code provided in pertinent part as follows: 

(a) Except as provided in this section, all contracts proposed to 

be made by any Texas public school board for the purchase of any 

personal property, except produce or vehicle t%el, shah be submitted 

to competitive bidding for each 12-month period when said property 

is vahmd at $25,000 or more, in the aggregate for each 12-month 

period. 
Commissioner MikeMoses - Page 2 (DM-418) 

(b) Except as provided in Subsection (e) of this section, all 

wntracts proposed to be. made by any Texas public school board for 

the wnstructiot~ maintm repair or renovation of soy building 

shall be submitted to competitive bidding when said contracts are 

valued at more than Sl5,OOO. . _ . 

(c) Nothing in this section shall apply to fees received for 

professional services rendered, including but not limited to 

architect[‘]s fees, attorney’s fees, and f= for fiscal agents. 

Subsequent to the issuanw of Attorney General Opiion DM-347. the Seventyfburrh Legihme repealed section 21.901, transferring its subject matkr to section 

44.031 of the Education Code and amending the substance. Section 44.031 provides in 

pertinent part as follows: 

(a) Except as provided by this section, all school district 

wntracts, except wntracts for the purchase of produce or vehicle 

ibe& valued at S25,OOO or more in the aggregate for each 12-month 

paiod shall be made by the method. of the following me-k& that 

provides the best value to the district: 

(1) wmpetitive bidding 

(2) wmpetitke sealed proposals; 

(3) a request for proposals; 

(4) a catalogue purchase as provided by Subhpter B. 

Chapter 2157, Govemment Code;1 

(5) an interlocal wntracc2 or 
Commissioner Mike Moses - Page 3 (DM-418) 

(6) a design/build contract.3 

(b) IndetexmiGngtowhomtoawardacontract,thedistrict 

may wnsidw, 

(1) the purchase pri=; 

(2) the reputation of the vendor and of the vendor’s goods 

or services; 

(3) the quality of the vendor’s goods or services; 

(4) the extent to which the goods or services meet the 

district’s need& 

(5) the vendor’s past relationship with the district; 

(6) the impact on the abii of the district to comply with 

laws and rules relathg to historically underutilized busimsses; 

(7) the total long-m wst to the district to acquire the 

vendor’s goods or services; and 

P. 2318 
Commissioner MikeMoses - Page 4 (DM-418) 

(8) any other relevant factor that a private business entity 

would consider in selecting a vendor. 

(c) The state auditor may audit purchses of goods or services 

bythedistrict. 

(d) The district may adopt rules and procedures for the 

acquisition of goods or services. 

(e) To the extent of any wnflict, this section prevails over any 

other law relating to the purchasing of goods and services except a 

law reiating to wntracthg with historically underutilized businesses. 

(i) This section does not apply to fees received for professional 

services rendered, includmg ar+itect’s fees, attorney’s fees, and fees 

for iiscal agents. Footnotes added.] 

Thtq section 44.031 “[s]ets forth methods by which all school district contracts shall be 

madq except contracts for the purchase of produce or vehicle fine& valued at S25.000 or 

more in the aggregate for each 12-month period.” Senate Research Center, Bii Analysis 

176. SB. 1,74th Leg., RS. (1995). Also, f&es received for professional services rendered 

are not subject to section 44.031. Educ. ye 8 44031(f). 

We found nothing in the kgisMve history explaining the kgislature’s motivation 

for al&ring schools’ purchasing procedures.4 We believe the revision is consist- with 

P. 2319 
Chnmkioner MikeMoses - Page 5 (DM-418) 

oneofthcprimaryplrposesofSenatcBilll,~~,~which~to~owmorelocal 

control over schools. See Education for Tomorrow: The Public Schools Reform Act of 

1995 at 1 (explaining that S.B. 1 proposes to rein in powers of State Board of Education), 

2 (explaining that S.B. 1 proposes to eatabliah regional education service writers), 6 

(explaining that S.B. 1 would allow local school districts, rather than State Board of 

Education to adopt textbooks) (available in bii tile). We d&c+ the&ore+ that the 

~wMtcdeadllocal~ldistriUto~~mOrecontrolOVerthcmeMsby~~ 

the adtool district awards contracts. Although section 44.031 now allows a school district 

‘flao~~~to~clectthcmeaasitwillusctoawardaparticularwntract~mtheListin 

subswtion (a), the school district always must have as its goal obtaining the beat value for 

the school district. See Educ. Code 8 44.03 l(a). 

Section 44.03 1 prevails over Attorney General Opiion DM-347 to the extent the 

opinion is inwnsistent with the statute. Nevertheless, section 44.031 does not a&t our 

conclusion in Attorney General Opiion DM-347 that a wntract for the purchax of 

insurmw is not a contract for professional services. Ser Attorney General Opinion 

DM-347 (1995) at 5. 

Whether a contract for the purchase of hsumnce isaumtracttopumhasepasonal 

property no longer matters in the context of section 44.03 1. Under section 44.03 1 of the 

EducatioaCode,aachoolboardmuatawardaUwnhacts not for profk3sional aervicq 

produce, or vehicle t&l in accordance with subsection (a), ao long as the value of the 

w&act exceeds S24.999.99 in the aggregate for a tklve-month paiod. 

P. 2320 
Commissioner Mike Moses - Page 6 (DM-418) 

You 6rst ask whether Attorney General Opiion DM-347 precludes a school 

dishict from using any of the purchasing methods listed in section 44.031(a). Clearly, it 

does not. To the extent Attorney General Opiion DM-347 wncludes that a school 

district must wmpetitively bii a contract for the purchase of kunmce+ aeuion 44.031 of 

tk Education Code super&es the opinion. A school district must award a wntract to 

purcbse kuance, provided the value of the contract exceeds S24.999.99 in the. 

aggmgate for a twelve-month petiod, using one of the methods listed in section 44.031(a). 

The board of trustees of the school district must select the method %at provides the best 

value to the district.” Educ. Code $44.031(a). 

You next ask whether Attorney General Opiion DM-347 precludes a school 

district from executing an insurance wntract for a period longer than twelve months. It 

does not. Neither section 44.031 of the Education Code nor Attorney General Opiion 

DM-347 limits the length of wntract the board of a school district may a&r. Buf see 

Local Gov’t Code 8 271.009 (limiting term of contract to twenty-five years). The board 

of trustees of a school district must award a w&act in accordance with section 44.031(a) 

ifthevalueofthewlltnctisSZ5.000ormoreintheaggregateforeachtwJvamonth 

period covered in the contract. 

A multi-year wntrac~ must, however, wntainaclausc8etai@tothescbool 

boprd”thewntiFnringrighttotamiaateattheacpirationof~budg~paiodoftbc 

[school district] during the term of the contract.:. .” Id. g271903(a); see id. 

5 271903(b) (deiXng “local go-” toincludeschooldistrict). Intberltanative, 

tbe~lboardmayw~onthew~on’abesteffortsattanptby[theschool 

board] to obtain and appropriate iimds for payment of the wntract . . . .” Id. 

5271903(a). The school board also may include both provisions in the wntmct, 

providing the school district a wntinuing right to terminate and conditioning the contract 

on the school board’s b&t efforts to appropriate fimding. Id. 

Third, you ask whether a school district may, under section 44.033 of the 

Education Code, execute an &urance wntractfora@eriodlongerthantwehemonths. 

Section 44.033 provides an altemative method for the purchase of pasonal property 

valued between S10,000 and S25,OOO.’ As this office determined in Attorney General 

Opiion DM-347. a contract to pm&se insuranccisawntracttopurchascpasonal 

m=m. 

P. 2321 
Commissioner MikeMoses - Page 7 (DM-4 18) 

Section 44.033 providea in per&rem part as follows: 

(a) A school district shall pmchase personal property as 

provided by this section if the value of the items is at least SlO,OOO 

but less than s25.000, in the aggregate, for a 12-month +riod. ht 

the- akmativ~ the school district may pmchase those items in 

acwrdancc with Sections [sic] 44.03 1 (a) and (b). 

0) For each 12-month period, the district shall publish a notice 

in two sucwssive issues of any newspaper of general cbudation in 

thecountyinwhichtheschoolislocated. Ifthereisnonewspapain 

tbewtmtyinwhichtheschoolislocated,theadvatisingshallbe 

publishedinanewspaperinthew~nearestthecountyseatoftht 

wtmty in which the school is located, specifyins the categories of 

personal property to be purchased under this section and soliciting 

thenames . . . of vendors that are interested in supplying any of the 

categories to the district. For each category, the district shall create 

avmdorlistw~gofeachvardorthatrespondstothepublished 

notice and any additional vendors the district elects to include. 

(c) Before the district makes a pumhase from a category of 

personalproperty,thedistrictmustobtainwtittenortelephoneprice 

quotations hm at least three vendors from the list for that 

catesory.... Thepurchaseshallbemade&omthelowest 

reqmsibie bidder. 

We 6nd nothing in section 44.033 prohibiting a school district fi-om unering a 

contmctforthepur&aseofktrance with a duration longer than twelve. months. But see 

Local Gov’t Code 5 271.009 (bmhing term of contract to twenty-five years). Subsection 

(b)doesnotlimitthelengthofaconeact;Rtha,itrequirrsa~ldistridtopublish 

notioe~vadorsiataestedin~pplyingth~ldi~~withthosegoodstht 

school district will be pmchasmg in the upccvning twehwmonthperiod I$ thadq a 

school district executes a multi-year insurancewntnct,itneednotadvertiseibr&urance 

vadorsuntilthetwelvamonthpaiodduring~cbtheschooldistriUwillbeex~a 

newinsllranwwntract. 

~theschwldistrict~asamulti-yearcontnqitmustw~~with~on 

271.903(a) of the Local Govemment Code. See snpru at 6. Thus, the wntract must 

~~adause~gtothcrchooldistrictthewntinuingrighttotaminatethe 

~ontr~dittheardoftheschooldistrict’sbudgetpaiod,aclauseooaditioniagthe 

wntkation of the contract on the school board’s best efforts to appropriate Curds for the 

payment of the ww or both. 

Your fourth question causes us to consider the value requk~~ articulated in 

sections 44.031(a) and 44.033(a). You ash whether a school district must aggre@e 

di.Eerenttypesof insuranq eg., workers’ wmpensuion insurance and health ittsmmq 

P. 2322 
Commissbner MikeMoses - Page 8 (Dll-4 18) 

to determine the value, for purposes of working the methods the schoo! distr!ct may 

use to purchase the insuranw. You ah ask whether a school d!str!ct may assume that it 

need not aggregate coverage in dEerent “hnes” of insurance, as defbted by rule of the 

wmmkssioner of insmanw for purposes of section 44.031(a) and sect!on 44.033(a). You 

askwhetheraachoold!strictmustaggregatekuranw coverage tinder differwt type3 of 

insumnw ifthe wvuage is avahable under a shtgle wntract in the low! market. 

You do not !nd!cate any pa&&r rule of t!re wmnnssr . ‘otter of iwlranwtllat 

defhIes%es~of’ msurance. We note that the Department of Insurance has, in hs rules, 

attegorized the various types of kurance as fo!lows: Life, accident, and health htsurance, 

see 28 T.A.C. ch. 3; property and casualty insurance, see id. ch. 5; title krrance, see id. 

ch. 9; surplus lines insurance, see id. ch. IS; and prepaid legal servke, see id. ch. 23. We 

tmderstand you to inquire whether, for purposes of determ!n!ng the value of a contract, a 

school dktrict may consider, for example, the value of its health hmurawe coverage 

separately corn the value of its property insuranw wverage, its workers’ compensation 

wveragq or its life insurance wverage. We be-lieve the answer to your question !ies in the 

phrase “io the aggregate” in sections 44.03 l(a) and 44.033(a). 

The- Education Code does not define ehher the phrase “in the aggregate” or the 

tam “aggegate”; nor do we 6nd a det!nhion elsewhere. in atate law. In wmmon usage, 

see Gov’t Code 8 3 11 .Ol 1, the phrase “in the aggregate” means “wns!dered as a whole.” 

WEBSER’S NINTH NEW CXJLU~IATIZ DICTIONARY 64 (1990). The term “aggmgate” 

denotes the ‘[e]nt!re number, sum, mass, or quantity of something; tota! amount complete 

whole.” BLACK’S LAW DICTIONARY 60 (5th ed. 1979); see a&o BRYAN A. GONER, A 

DICTIONARY OF MODERN LEGAL USAGE 30 (1987). In exam!n@ the definitions of 

‘kggqate,” we. note that the word appears to connote a wllect!on of associated items.6 

See 1 OXFORD ENGLDEIDICTIONARY 252-53 (2d ed. 1989). 

Section 44.031(a) provides that, in general, a school d!str!ct must use one of the 

apeSed purchasmg methods to w&act for anyth& except profesrdonal services, 

vehicle tire!, or produce, %hmd at S25.000 or more in the aggmgate for each 12-month 

period. . . .” Clearly, the school d!str!ct need not add together the value of a!! of the 

wntmcts it proposes to execute during a 12-month petiod. Ifit did, a school dkttict 

always wotdd cross the S25.000 line and have to award a!! of its wntracts in acwrdance 

with section 44.031(a). On the other hand we beke the phrase “ia the aggmgak” .in 

section 44.031 of the Education Code limbs a school d!str!ct’s authorhy to wns!der the 

value of each purchase separately. 

Se&on 44.032(b) of the Education Code forbids, in cutabt w an 

officer, employee, or agent of a school dktrkt to make or aut!mr!ze “separate, aequenthxl, 

6~or~4ia19wthetcrm-~~~-‘[c]omporeddmanyindividualsonitcdinto 

ODC awciation” 1 OXFORD Euousn DICIWNARY 252 @i al. 1989). In ?mlo&y, tbc tam means 

‘[c~ofdiclind~unitcdintoaamunon organ&.” Id. Iaphysics,lbclummfasto’[a] 

msafollncdbytbcllalonof~ partick” Id. at 253. 

P. 2323 
Gmmissioner MikeMoses - Page 9 (DM-4 18) 

or wmponatt ptidwes” of items that “in normal pur&sing practices would be 

pumbawd in one purchase,” see Educ. Code 8 44.032(a)(l), (2). (3). Without 

detemGq that “in the aggregate” is duplicative of the restriction on separate, sequential, 

orw~n~purchasesasamanaoflaw,webelimwemustwnstnrethephrase 

wnaistedy with the restriction, as well as the. wmmon usage of the word “aggmgate.” 

Acwrdingly, we conclude that the phrase %I the aggregate” requires a school district 

cumulativdytovaluewn~forliLeproductsthatarcboo!districtnormallywould 

purchwe together, but only for purposes of datemtiniq when a fotmal prowmmwt 

process is required by law.7 

As you suggest, whethu a school district may aggmgate different hksuranw 

wverages may depend upon the local market; the question also may depend upon the 

types of coverage involved the size or location of the schwl district, and other factors 

that we are unable to predict. Possii!y, one school district would wrtnally wntract to 

pumhase certain products together, while another s&w! district normally would not 

contract to purchase the same products together. 

Agaia,tbestatutcarpresslyrcquinsa~idistricttow~dathe~e 

vrlueofcataiawntractstobeacecutedina~~~paiodontyiarefamceto 

~whahatheschooldistrictmustuseoneofthemethodslistedin~on 

44.031(a) of tha Education Code to make tha wntract. We do not mad sac&m 44.031(a) 

to require a school district to make the wntracts for like products %I the aggmgate.” 

Thus,onccaschwldistricthasaggregatadthtvalueofwntractsitdesirestoenta~ 

the twelva-month period to determine whether it must make the contract using one of the 

methods listed in aaction 44.03 l(a). it may enter each contract saparately. 

Inyourfinalquestionyou~whethathe~~ofathird-partyldministrator 

who is licensed under Insurance Code article 21.07-d are profassional sakes that a 

school district wed not bid under section 44.031(f). Article 21.07-6, section l(1) defines 

” . . admmMrato? as “a parson* who wllects premiums or wntributions from or who adjusts 

or settles claims in wnncction with life. health, and accident ban&s or annuities for 

residents of this state.” (Footnote added.) See ULTO 28 T.AC. 8 7.1601. The definitiw 

excludea certain persons, such as an employer on behalf of its emplqeea, a health 

maintenance organization, or a person who adjusts or settles claims in the notmal wurse 

of his or bar practice as a iicenscd attorney. Ins. Code art. 21.07-6, 5 l(l)(A), (D), (IQ 

Incidentally, the dethrition of “administrator” also excludes -a cdf-inatrance pool 

P. 2324 
Commissioner MikeMoses - Page 10 (DM-4 18) 

composed of political subdivisions of this state that participate in a tbnd or pool through 

interlocalagreementsand... any nonprofit entity that acts solely on behalf of a w 

pool, agency, or body. . . .” Id. 8 l(l)(O). 

To become a licensed third-party admi&mtor. a person must obtain a cuiiflcate 

of authority from the wmmissioner of htsmanw. Id. 8 3(a). In its application for a 

wrtiticate of authority, an appkant must provide the wmmissioner with copies of 

~~I$u+I documents, such as the articles of incorporation and bylaws; a description 

admmmator, tf the appkant is not domiciled in this state, a power of attorney 

appointing the wmmtsst * ‘otter as the administrator’s attorney; financial audits; and any 

other information the wmmissioner requires. Id. Q 4; see oh 28 T.AC. 84 7.1603, 

.1605. The wmmissioner of insurance must approve the application if he or she is 

satistied that the application meets the following criteria: 

(1) the granting of the application would not violate a federal or 

state law; 

(2) the finawid wndition of an admi&mtor applicant or those 

persons who would operate or wntrol an -or applicant are 

suchthatthegrantingofacatificateofauthoritywouldnotbe 

adverse to the public interest; 

(3) the applicant has not attempted through fraud, or bad faith 

to obtain the cut&ate of authority; 

(4) the applicant has wmplied with this article and rules 

adopted by the board under this article; and 

(5) the name tmdu which the applicant will wnduct business in 

thisatateisnotsosimilartothatofanotheradmG%mtororhSurer 

that it is likely to mislead the public. 

Ins. Code art. 21.076, 5 5(a). 

Once the wmmissioner of insurance has approved an application for a certificate 

of authority, the third-party administrator must obtain and ma&in a fidelity bond. Id. 

5 6(a); see a&w 28 T.AC. 5 7.1613. The third-party administrator also must submit to 

examidons by the wmmissioner of insurance or the wmmissioner’~ designee, which 

examir&on will include a review of all of the administrator’s written agreemaas* 

various irtsumd and plana*O as well as a review of the. administrator’s financial 

statements. Ins.Codeti.21.07-6,~8(c);see~28T.AC.~7.1610. 

P. 2325 
Commissioner Mike Moses - Page 11 (DM-418) 

In Attorney General opinion JM-1038 this office considered whether the thirdpartyadministratorofaninsumnw wntract provides prof~onal services, the pumhase 

of which need not be wmpetitively bid under chapter 252 of the Local Govemment Code. 

Attorney General Opiion IM-1038 (1989) at 1. (Like section 44.031 of the Education 

Code, Local Government Code section 252.022(a)(4) excepts from the mpkment that a 

municipality wmpetitively bid certain expenditures “a proamnmt for. . . profkonal 

services.“) Using the definition of “administrator” or “third party admktmtor” in 

Insumnw Code article 21.07-5, reZxuZed by Act of May 29. 1989. 71st Leg., RS., ch. 

1094,s 4, 1989 Tex. Gen. Laws 4477,4491, the opinion stated that an administrator is a 

pason who receives a fee or compensation Tar performing or providing any serviw 

fUndio~orduty,oractivity~insurancc...in~administrativcormanaganent 

capacity.” Attorney General opinion m-1038 (1989) at 1-2. Because of the breadth of 

the defkition, the opinion stated, a third-party administrator may “include services ranging 

from simple clerical ones to wmplex ones requiring high levels of expert&.” Id. at 2. 

The opinion then considered the nature of professional services. As the opinion 

noted, this office previously defined professional setvices to include any member of a 

discipline kquiring special knowledge or attainment and a high order of leam& ski& 

and intelligence.” Id. (quoting Attom General Opiion DA-940 (1988)). This office 

~however,fiomdetermikngwhetherthe. serviwsoffaedbyathird-patty 

rdmtolstrator are professional services because the spechic aetvicxs a third-party 

. . admmshdor performs will depend upon a particular wntract. Id. at 3-4. 

We believe the wnchtaion reached in Attom General Opinion JM-1038 is 

subject to mexamidon because the leg&ture repealed article 21.07-S of the Insumnw 

Code. the statute on which the opinion relied. As wmpared to the detinhion of 

” . . 

-or” in the now-repealed article 21.07-S. the detlnition in article 21.07-6 is 

explicit: a third-party admktmtor wlkcts life, health, and accident insumnw premiums 

or wntriitions and adjusts or settles life, heal& and accident insur~~claims. SeeIns. 

Code art. 21.076, 5 l(1). The application procedures and approval criteria in article 

21.07-6 are similar to those in article 21.07-5, although not identical. Compcln Ins. Code 

art. 21.07-6.88 4,5 wit% id. art. 21.07-5, 45 4.6, npeakdby Act ofMay 29, 1989.71st 

Leg.. RS., dL 1094.8 4,1989 Tex. Gen. Laws 4477,449l. 

In Attorney General Opiion DM-347 this office dkussed the. nature of 

professional services more fblly than in Attorney General Opiion JM-1038: 

Accdii to Attorney General Opiion m-344, a professional 

service is one requiring “‘predominantiy mental or intell~ rather 

than physical or manual,“’ akills. Attorney General Dpbtion MW-344 

(1981) at 4 (quoting Ma@arni Ckma& co. v. Fiat’ wk@r a.. 

p. 2326 
CommissionerMikeMoses - Page 12 (DM-418) 

160 s.w.2d 105 105 (Tea. cii. App.-EastbUd 1942, no writ)). 

Furthermore, a “professional” works in a profession that “kquircs 

years of education and service for one to attain wmpe-tence and 

[that] calls for a high order of intelligence, skill and learning.‘” Id. 

(quoting Tr~ion Dhplqs, Inc. v. City of New Orleans, 346 

So. 2d 359,363 n5 (La. Ct. App. 1977)). 

Fiiy, [Attorney Generd Opiion MW-3441 discussed “[t]he 

most u&id standard for judging the scope of ‘profession’” from 

Woadakll v. Lkziley, 230 S.W.2d 466 (W. Va 1976). Id. at 5. The 

Wc.xx&N wurt concluded that the services of an interior decorator 

were not professional services. The WoaaMl court did not, 

however, limit the term “professional services” to the professions of 

theology, law, or medicine, nor to professions spe-cificaUy recognized 

as such by statute. Id, (citing WornSIll, 230 S.ESd at 469-70). 

Rather, while “‘most occupations, trades. business or call&s require 

a diversity of knowledge and skill,‘” not all such occupations, tmdes, 

business or dings could be called “professions.” Id. (quoting 

Wrn.wWl, 230 S.E.2d at 470). A profkonal is only one who “‘is a 

member of [a] discipline with widely accepted standards of required 

study or specified attainments in special knowledge as disti@&ed 

.fiom mere skill.‘” Id. (quoting Wooddell, 230 S.E.2d at 470). 

Attorn& General Opiion DM-347 (1995) at 3-4 (footnote omitted). 

rdrmrustrator require pre4iominan@ mental or intellectual skills, the aqukitiw of which 

entail years of education and scnkc. See id. at 3. Additionally, we find little evidemx 

that a third-party administrator belongs to a “discipline with widely accepted @ndards of 

requirrdstudyorspecifiedattainmtntsinspecial~~~geasdistinguished~mmae 

skill.” See id. at 3-4 (quoting Attorney General Opinion MW-344 (1981) at 5 [quo@ 

Wooddell v. D&q, 230 S.E.Zd 466 (197611). We cannot say as a matter of kw. 

however, that a third-party administrator does not provide professional savices; such a 

decision depends, in part, on the actual fimctions a third-party admb&ator perfbrms. 

We do not know, for example, whether the duty of the third-party -or to pay 

claimsisminist~thatis,whahathethird-partyadministraorpaysclaimsonthe 

orders of the school district, or whethex the third-party administrator must intapret the 

law to determine whether to pay a particular claim.*’ 

P. 2327 
Commiaaioner hGke Moses - Page 13 (DM-418) 

Fmthermore, this office generaUy abataina Tom determbdng whether a particular 

service ia a professional service for purposes of a statute other than the Professional 

!Services Procurement Act, V.T.C.S. art. 664-4. because of the fact-baaed nature of such a 

detesmmation. See, e.g., Attorney General Opiiona DM-106 (1992) at 2; IM-1136 

(1990) at 2-3; JM-1038 (1989) at 3. Bursee Attorney General Opiion JM-940 (1988) at 

4. In our opinion, the a&w! board is the proper authority to determine the actual 

ilmctions of a particular third-party administrator for purposes of section 44.031 of the 

Education Code. 

Of course, except for the professional aervicea hated in the ProfesSional Services 

Pmauuwnt Act, V.T.C.S. art. 6644, a school district may wntract for proftional 

aenks using any appropriate method hated in section 44.031(a) of the Education Code. 

Cf: Attorney General Opinion DM-106 (1992) at 2. Comae E&c. Code 3 44.0310 

wifh Local Gov’t Code 3 252.022(a)(4). 

You ask whether “reinsuranw ptwuemem duties” included in a claims 

. . 

-on wntract with a licensed third-party admi&mtor are professional services 

for purposes of section 44.0310 of the Education Code. You do not indicate what 

“ninsurance prowrement duties” are. From the phrase itae& we guess that such duties 

conaiatofpricingandaquhing,wbehalfofaachooldiatrict, ninsurancefortheachool 

district’s self. -UISUWICC iimd. As this office stated in Attorney General Opiion DM-347, 

thepmchaaeofmsmawe, even through an agent, is not a pumhase of profeaaional 

S&WS. TO the adent “~&LW~WW procurawnt dMk$’ id& o&f &&s h~ we 

cannot guess, we do not determine whether such duties are profaaaional services. 

Ywaslrwhethaaschoolboardnnut~~ia~~withsectiw44.031 or 

44.033 of the Education Code, a wntract for professional aetvicea aa well as 

nonproftional services. To the extent that a contract, vahmd at S25,OOO or more in the 

aggregate for a twelve-month period, ia for lIlythins other than profeaaional aervicea, 

~u~orvehiciefUel,a~ldistrictmustawarditusingtheonemahodamongthe 

aix listed in section 44.03 1 that provides the. beat value to the school district. See Educ. 

Code 8 44.031(a), (r). Likewise, to the extent a contract, valued at behveen SlO,OOO and 

S24J99.99, inclusive, in the aggmgate for a twelve-month paiod. ia for the pmchase of 

~~property,aschooldistrictmustaunrdtbew~eithabyw~ 

biddhtg the wntract or in accordance with section 44.03 l(a) and (b). See id. 8 44.033(a). 

The school board may, but need not, award any profeaaional aervicea inch&d in the 

wntract that are not wvesed by the Profeaaional sesvices Prowrement Act, V.T.C.S. art. 

66-W, in accordance with section 44.031 or section 44.033, depending on the value of the 

contract. See WaIlace v. Commissioners[] Court of Mdison Couth@, 281 S.W. 593,595 

(Tex. Civ. App.-Waco 1926). rev’d on orher groundr. 15 S.W.2d 535 (Tex. 1929) 

(stating that where contract included some aervicea requiring technical Lmowkdge and 

some services or products that do not, those that do not muat be wmpetitively bid); see 

aho Guy Bitulithic Co. v. Nueces Coma& 297 S.W. 747, 753 (Tcx. Ci. App-SM 

Antonio 1927), rev’d on other groumf~, 11 S.W.2d 305 (Tex. 1928); Attorney General 

Opiion M-890 (1988) at 4 (quoting Wdkzce v. Cornmissioners Co@‘J of Madison co., 

P. 2328 
Commissioner Mike Moses - Page 14 (DM-418) 

280 S.W. 593 (Tex. Cii. App.-Waco 1926, rev’davothergroun&, 15 S.W.2d 535 (Tex. 

1929)). 

SUMMARY 

Newly enacted section 44.031 of the Education Code prevails 

over Attorney General Opiion DM-347 to the extent the opinion is 

inwnsistent with the statute. Section 44.031 does not wnflict with 

the conclusion in Attorney General Opiion DM-347 that a contract 

for the purchase of insurance is not a contract for professiona 

aemiccs. Additionally, whether a wntract for the purchaw of 

insurance is a wntract to purchase personal property no longer 

matters in the context of section 44.03 1. 

To the extent Attorney General Opiion DM-347 concludes that 

a s&w! district must wmpetitively bid a wntract, vahted at more 

than S24.999.99 in the aggregate for a twelve-month period, for the 

purchase of insurance, don 44.031 of the Education Code 

supersedes the opinion. A school district must award such a wntract 

using one of the methods listed in section 44.031(a). The board of 

trusteesoftheschooldistrictmustselectthemethod”thatpwvides 

the best value to the district.” 

Neither section 44.031 of the. Education Code nor Attomey 

Generd Opiion DM-347 precludes a school district from execu&g 

an insuranw contract for a period longer than twelve months. A 

multi-year wntract must, however, comply with section 271903(a) 

of the Local Government Code. 

Nothing in section 44.033 of the Education Code prohiii a 

school district fkom entering a wntract for the purchaw of &trance 

with a duration longer than twelve months. Section 44.033(b) of the 

Education Code does not limit the length of a contract; it merely 

requires a schwl district to publish notice seeking vendors interested 

in supplying the schwl district with those goods the schwl district 

will be pmchasing in the upcoming twehwmnlh period. If the 

s&w! district enters a multi-year wntract, it must comply with 

section 271.903(a) of the Local Government Code. 

The requirement in sections 44.031 and 44.033 of the Education 

Code, refe to the value of purchases “in the aggmgak,, indicates 

that a school district cumulatively must value contracts for like 

products that a school district normally would purchase together, but 

only for purposes of determiniq when a formal prowremem process 

is required by law. 

P. 2329 
Commissioner Mike Moses - Page 15 (DM-418) 

Wheher a third-party -or, licensed under article 

21.076 of the hwrance Code, provides a professional sexvice 

depends upon whether the service requires predominantly mental or 

intellectual,ratherthanphysicalormanual,sk&whetheryearsof 

education and tice are wxssary for a practitioti to attain 

wmpetence m a third-party administrator, and whether a third-party 

administrator belongs to a discipline with widely accepted standards 

of required study or specified attainments in special knowledge as 

didnguished tiom mere skill. 

To the extent “minsumnce proaxement duties” wnsist of 

pricingMdacquirin&onbehalfofaschooldistrict,rcinsurancefor 

the school district’s self-insurance limd, such duties are not 

professional services. 

To the extent that a contract, valued at S25.000 or more in the 

aggregate for a twelve-month period, is for anythiq other than 

professional services, produce, or vehicle fieJ, a school district must 

award it using the one mahod among the six listed in section 44.03 1 

of the Education Code that provides the best value to the school 

district. Likewisej to the extent a wntnq valued at between 

S10,000 and S24.999.99, inclusivq in the aggregate for a twelvemonth period is for the purchase of personal property, a school 

district must award the wntract either by wmpetitidy bidding the 

wntractorinacwrdanc+withsectiw44.O3l(a)and(b). Thea&x11 

board may, but need not, award any professional services included in 

the w&act that are not covered by the Professional Services 

Procurement Act, V.T.C.S. art. 664-4. in accordance with section 

44.03 1 or section 44.033, depending on the value of the wntract. 

DAN MORALES 

Attorney General of Texas 

JORGE VEGA 

Fii Assistant Attorney General 

SARAH J. SHIRLEY 

Chair, Gpiion Committee 

p. 2330