DAN MORALES

Al-rORNEY GENERAI. 

## @ffice of tfp ZTlttornep QBeneral &date of Ill;exae September23.1996
Mr. Mike Moses commissioner ofEducation Texas Education Agency 1701North CongressAvenue 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, changesthe conclusionreached in Attorney General Qpiion DM-347 (1995) and related questions (RQ-836)

You request this officeto reconsiderAttorney 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 regardmgthe competitivebiddmgprocess as it appliesto public schools.

In Attorney General OpinionDM-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 issued May 4.1995, this office considered whether section 21.901 of the Education Code, repealed by Act of May 27, 1995, 74th Leg., RS., ch. 260, § 58(a)(l), 1995 Tex.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.wof 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 competitivelybid 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 particularkind of insurance,e.g., property and casualty insurance.
At the time this office issued Attorney General Qpiion DM-347. section 21.901 ofthe Education Code provided in pertinentpart 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,shahbe submitted to competitivebiddingfor each 12-monthperiod when said property is vahmd at $25,000 or more, in the aggregate for each 12-month period.CommissionerMikeMoses - Page 2 (DM-418)

(b) Except as provided in Subsection (e) of this section, all wntracts proposed to be.

made by any Texas public schoolboard 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[‘]sfees, attorney’ s fees, and f= for fiscalagents. 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 amendingthe 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 shallbe made by the method. of the followingme-k& that providesthe best valueto the district: (1) wmpetitive bidding (2) wmpetitke sealedproposals; (3) a request for proposals; (4) a cataloguepurchaseas providedby Subhpter B. Chapter 2157, Govemment Code;1
(5) an interlocalwntracc2 orCommissioner MikeMoses - Page 3 (DM-418)

(6) a design/buildcontract.3 (b) IndetexmiGngtowhomtoawardacontract,thedistrict may wnsidw, (1) the purchasepri=; (2) the reputation of the vendor and of the vendor’ s goods
or services; (3) the quality ofthe vendor’ sgoods or services; (4) the extent to which the goods or services meet the district’ s need& (5) the vendor’ s past relationshipwith the district; (6) the impact on the abii of the district to comply with laws and rules relathg to historicallyunderutilizedbusimsses; (7) the total long-m wst to the district to acquire the vendor’ sgoods or services;and

P. 2318CommissionerMikeMoses - Page 4 (DM-418)

(8) any other relevant factor that a private business entity would considerin selectinga vendor. (c) The state auditor may audit purchses of goods or services bythedistrict. (d) The district may adopt rules and procedures for the acquisitionofgoods 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 reiatingto wntracthg with historicallyunderutilizedbusinesses. (i) This section does not applyto fees received for professional servicesrendered, includmgar+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-monthperiod.” Senate Research Center, Bii Analysis 176. SB. 1,74th Leg., RS. (1995). Also, f&es receivedfor professionalservicesrendered
are not subjectto section44.031. Educ. ye 8 44031(f).
We found nothing in the kgisMve history explainingthe kgislature’ s motivation for al&ring schools’ purchasing procedures.4 We believe the revision is consist- with

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oneofthcprimaryplrposesofSenatcBilll,~~,~which~to~owmorelocal control overschools. See Education for Tomorrow: The Public Schools Reform Act of 1995at 1 (explaining

that S.B. 1proposes to rein in powers of State Board ofEducation), 2 (explaining that S.B. 1 proposes to eatabliahregional 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 section44.031 now allows a school district

‘flao~~~to~clectthcmeaasitwillusctoawardaparticularwntract~mtheListin subswtion (a), the school district always must have as its goal obtainingthe beat value for the schooldistrict. See Educ. Code 844.03l(a).
Section44.03 1prevails 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 ofhsumnce isaumtracttopumhasepasonal property no longer matters in the context of section44.03 1. Under section44.03 1 of the EducatioaCode,aachoolboardmuatawardaUwnhacts not for profk3sionalaervicq **produce,** or vehicle t&l in accordance with subsection (a), ao long as the value of the w&act exceeds S24.999.99inthe aggregate for a tklve-month paiod.

P. 2320Commissioner MikeMoses - Page 6 (DM-418)

You 6rst ask whether Attorney General Opiion DM-347 precludes a school dishict from using any of the purchasingmethods listed in section 44.031(a). Clearly, it doesnot. 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-monthpetiod, using one ofthe methods listed in section44.031(a). The board of trustees ofthe 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 insurancewntract 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 (limitingterm of contract to twenty-five years). The board oftrustees of a school district must award a w&act in accordancewith section44.031(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, providingthe school district a wntinuing right to terminate and conditioningthe contract on the schoolboard’ s b&t effortsto appropriatefimding. 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.

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Section 44.033 provideain per&rempart 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 butless 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] 44.031(a) and (b). 0) For each 12-monthperiod, the district shall publisha 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 additionalvendorsthe 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-omunering a contmctforthepur&aseofktrance with a duration longer than twelve. months. But see Local Gov’t Code 5 271.009 (bmhingterm 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-yearinsurancewntnct,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 ofthe contract on the schoolboard’ sbest efforts to appropriate Curdsfor the payment ofthe 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

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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!ctmay assumethat it need not aggregate coverage in dEerent “hnes” of insurance, as defbted by rule of the wmmkssionerof insmanw for purposes of section44.031(a) and sect!on44.033(a). You askwhetheraachoold!strictmustaggregatekuranw coverage tinder differwt type3 of insumnw ifthe wvuage is avahableunder a shtglewntract inthe 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 ofkurance 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 tmderstandyou to inquirewhether, 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 lifeinsurancewverage. Webe-lieve the answerto your question !iesinthe phrase “io the aggregate” in sections44.03l(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

.Ol1, 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

OFMODERN

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 1OXFORD

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 OXFORDEuousn DICIWNARY 252 @i al. 1989). In ?mlo&y, tbc tam means

‘ [c~ofdiclind~unitcdintoaamunon organ&.” Id. Iaphysics,lbclummfasto ’ [a] msafollncdbytbcllalonof~ partick” Id. at 253.

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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 duplicativeof 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 purchasethe sameproducts together. Agaia,tbestatutcarpresslyrcquinsa~idistricttow~dathe~e vrlueofcataiawntractstobeacecutedina~~~paiodontyiarefamceto ~whahatheschooldistrictmustuseoneofthemethodslistedin~on 44.031(a) oftha 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 determinewhether it must make the contract using one of the methods listed in aaction44.03l(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 premiumsor 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 maintenanceorganization, 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

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composed of political subdivisionsof 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 licensedthird-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. Q4; see oh 28 T.AC. 84 7.1603, .1605. The wmmissioner of insurance must approve the application if he or she is satistiedthat the applicationmeets the followingcriteria:

(1) the granting ofthe applicationwould not violate a federal or state law; (2) the finawid wndition of an admi&mtor applicantor those persons who would operate or wntrol an -or applicant are suchthatthegrantingofacatificateofauthoritywouldnotbe adverse to the publicinterest; (3) the applicant has not attempted through fraud,or bad faith to obtainthe cut&ate of authority; (4) the applicant has wmplied with this article and rules adopted by the board under this article;and (5) the nametmdu whichthe applicantwill wnduct business in thisatateisnotsosimilartothatofanotheradmG%mtororhSurer that it is likelyto misleadthe 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&w28 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*Oas well as a review of the. administrator’ s financial statements. Ins.Codeti.21.07-6,~8(c);see~28T.AC.~7.1610.

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In Attorney General opinion JM-1038 this office considered whether the thirdpartyadministratorofaninsumnw wntract provides prof~onal services, the pumhase of whichneed 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 GovernmentCode 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, 1989Tex. Gen. Laws 4477,4491, the opinion stated that an administratoris 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 administratormay “include servicesranging from simpleclericalones to wmplex ones requiringhighlevelsof 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 disciplinekquiring 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 willdependupon a particularwntract. 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 similarto 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, 454.6, npeakdby Act ofMay 29, 1989.71st Leg.. RS., dL 1094.8 4,1989 Tex. Gen.Laws4477,449l.
In Attorney General Opiion DM-347 this office dkussed the. nature of professionalservices more fbllythan in Attorney GeneralOpiion JM-1038:

Accdii to Attorney GeneralOpiion m-344, a professional service is one requiring “‘predominantiymental or intell~ rather than physicalor manual,“’akills.Attorney General DpbtionMW-344 (1981) at 4 (quoting Ma@arni Ckma& co. v. Fiat’ wk@r a..

p. 2326CommissionerMikeMoses - 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 ofNew 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.2d466 (W. Va 1976). Id. at 5. The Wc.xx&N wurt concludedthat the services of an interior decorator
were not professional services. The WoaaMl court did not, however, limitthe term “professionalservices”to the professions of theology, law, or medicine,nor to professionsspe-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 knowledgeand 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] disciplinewith widely accepted standards of required study or specifiedattainments in specialknowledge as disti@&ed .fiom mere skill. ‘” Id. (quoting Wooddell, 230 S.E.2d at 470).
Attorn& GeneralOpiion DM-347 (1995) at 3-4 (footnote omitted).

rdrmrustratorrequire 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 administratorbelongsto a “disciplinewith 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 whethexthe third-party administrator must intapret the lawto determinewhetherto pay a particularclaim.*’

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Fmthermore, this office generaUyabatainaTom determbdng whether a particular service ia a professional service for purposes of a statute other than the Professional !Services ProcurementAct, V.T.C.S. art. 664-4. because ofthe fact-baaednature 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 aerviceahated in the ProfesSionalServices 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 wifhLocal Gov’t Code 3 252.022(a)(4).
You ask whether “reinsuranw ptwuemem duties” included in a claims

. . -on wntract with a licensedthird-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 determinewhether such duties are profaaaionalservices.
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~ biddhtgthe wntract or in accordancewith section44.03l(a) and (b). See id. 844.033(a). The school board may, but need not, award any profeaaional aervicea inch&d in the wntract that are not wvesed by the Profeaaionalsesvices Prowrement Act, V.T.C.S. art. 66-W, in accordancewith section44.031 or section44.033, depending on the value ofthe 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 Lmowkdgeand
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. CornmissionersCo@ ‘J ofMadison co.,

P. 2328Commissioner MikeMoses - 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 conclusionin Attorney GeneralOpiion 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 section44.031.
To the extent Attorney GeneralOpiion DM-347 concludesthat
a s&w! district must wmpetitively bid a wntract, vahted at more than S24.999.99in the aggregate for a twelve-month period, for the purchase of insurance, don 44.031 of the Education Code supersedesthe opinion. A schooldistrict 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 GovernmentCode. Nothing in section 44.033 of the Education Code prohiii a school district fkomentering a wntract for the purchaw of &trance with a duration longer than twelve months. Section44.033(b) of the Education Code does not limit the length of a contract; it merely requires a schwl district to publishnotice seekingvendors interested in supplyingthe 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) ofthe Local GovernmentCode.
The requirementin sections44.031 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 districtnormallywould purchasetogether, but only for purposes of determiniq when a formal prowremem process is requiredby law.

P. 2329Commissioner 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 predominantlymental 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 administratorbelongs to a disciplinewith 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 professionalservices.

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 usingthe one mahod amongthe 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 professionalservices includedin 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 1or section44.033, dependingon the value ofthe wntract.

DAN MORALES Attorney Generalof Texas

JORGEVEGA Fii Assistant Attorney General
SARAHJ. SHIRLEY Chair, Gpiion Committee

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