The Honorable Homer A. Foerster Opinion No. H- 921 

Executive Director- _.,., 

State'Hoard'of'Control .?Re,: '. Whether sheltered 

P. ~0. Box::l3047, Capito?Station. worksho$brganised by 

Austin,'Texas '.70711-;"- the Department of Mental 

H'ealth and Mental Retarda- 

~tion may bid on state 

contracts. 

bear 'Mr."',Fo'erstert,: 

Several unsheltered $orkshops'organized"by-.the.-'Texas 

Department of,,Mental Health and Mental Retardation under 

article 5547~202; section 2.17(b), V.T.C.S., haves asked to 

be placed on the bid list maintained by the~Board.,of Control 

so that:they,willtbe::jnvited to bid on',statecontracts; YOU 

wish to'know,whether 'such sheltered workshops may.;bid'on 

state contracts'under:the State Purchasing Act-of.1957, 

article 664-3,;V.T.C.S.; and if they may, whether~~the'goods 

they.produce are entitled to the preference' set:out in 

section 13 of article 664-3. 

~~.. 

Articles 5547-202, section 2.17(b),..read.s‘in pertinent 

part: 

(1) From funds available to it the 

Department [of Mental Health and Mental 

Retardation] is authorized to provide 

mental'health and mental retardation. 

services through the operation of sheltered 

workshops and to contract with individuals 

or public or private entities for all or 

any part of such services. 
The Honorable Homer A. Foerster - page 2 (H-921) 

(2) The Department is authorized to 

contractwith individuas or public E 

private entities for the sxe of @ and 

servrces oroducedor made=iEble by the 

sheltered workshop programs. The goods and 

services may be sold on a cash or credit 

basis. 

'(3) An operating fund may be established 

for each sheltered workshop operated by the 

Department . . . and all proceeds from the 

sale of sheltered workshop goods and services 

shall be~deposited in the operating fund ., . . . 

Money in the operating funds may only~be 

expended ,in the operation of sheltered'workshops 

for the purchase of supplies, materials, 

services, and equipment . . . . (Emphasis added). 

These provisions authorize the Department of Mental Health 

and Mental Retardation to establish sheltered workshops and 

make bindina contracts to sell the coeds they produce to 

public entities. 

_ _ 

See Stauffer v. San Antonio, 344 S.W.2d -- 

158 (Tex. Sup. 1961); State v. Ra land Clinic-Hospital, 159 

S.W.2d 105 (Tex. Sup. m. -"Xi&-entity" has been defined 

to include the state and its political and administrative 

subdivisions. Wade v. New Jersey Turn ike Authorit - -~ 

A.2d 232 (N.J. Sup. 19m See An + erson v. di %2d 

227 (Tex..Civ. App. -- Austin953, mandssdenied). 

We find nothing in the State Purchasing Act of 1957 that 

orevents the Department from contractinq through the Board 

of-Control to sell products of the sheltered 

public entities. Article 664-3, subsections 

provide standards for evaluating bidders for 

the bidders list and for awarding contracts. 

do not distinguish between private firms and 

workshops to 

8(b) and (c), 

inclusion on 

These standards 

state agencies. 

Section 12 of article 664-3 forbids members, employees, or 

appointees of the Board from being interested in a contract 

or bid, but there is no comparable statute limiting state 

agencies from having an interest in contracts or bids with 

the Board. See also Attorney General Opinion M-743 (1970). 

We take noteof thePrison-Made Goods Act of 1963, which 

does not merely permit the Board of Control to contract with 

a state agency, but actually requires it to purchase goods 

from the Texas Department of Corrections. V.T.C.S. art. 

6203c, § 9. - See Attorney General Opinion M-126 (1967). 

P- 3861 
The Honorable Homer A. Foerster - page 3 (H-921) 

Other states have enacted laws requiring state agencies to 

purchase goods produced by state owned and operated workshops 

for the handicapped. See Ga. Code Ann. § 99-801 et seq.; 

Md. Code Ann. art. 30.X 4-6A; Mass. Ann. Laws cr 6, 99 

134, 143. 

In Attorney General Opinion M-743 (1970) this office 

decided that the Board of Control could award the Department 

of Corrections a contract to refurbish and rebind textbooks 

for the State, provided that the competitive bid provisions of 

article 664-3 were complied with. The opinion discussed 

article 16, section 21 of the Texas Constitution, which 

requires that certain articles be purchased under competitive 

bids, and stated~that- "[slection 21 contains no statement 

nor implication of distinction between bids by private 

enterprise and a state agency." Nor do we note any such 

distinction in article 664-3. The Department of Mental 

Health and Mental Retardation may contract through the Board 

of Control to sell goods produced by sheltered workshops, 

and it may bid on state contracts under article 664-3 as a 

step in contract formation. 

Section 13 of article 664-3 reads as follows: 

The following manufactured products, if 

they meet the state specifications as to 

quantity, quality, and price, shall have 

preference in purchases made of those types 

of items by the Board: Products of workshops, 

organizations, or corporations whose primary 

purpose is training and employing mentally 

retarded persons or physically handicapped 

persons. 

We believe that this preference is valid. See Attorney - 

General Opinions O-3312 (1941) and O-1678 (1939). It embodies 

the legislative intent to prefer goods produced by "workshops . . . whose primary purpose is training and employing 

mentally retarded persons . . . " if the goods meet state 

specifications. See also V.T.C.S. arts. 664-5, 664-6. -- 

Sheltered workshops are organized'under article 5547-202, 

section 2.17(b) to "provide mental health and mental retardation services." The money they earn must go back into 

operating and maintenance expenses. The primary purpose of 

the workshop is not to make profits, but to benefit the 

participants. We conclude that the sheltered workshops 

established for mentally retarded people by the Department 

qualify for the preference givenby section 13 of article 

664-3. 

P. 3862 
The Honorable Homer A. Foerster - page 4 (H-921) 

SUMMARY 

The Department of Mental Health and 

Mental Retardation may contract to 

sell the products of its sheltered 

workshops to the State under article 

664-3, V.T.C.S. The goods produced by 

such sheltered workshops for mentally 

retarded persons are entitled to the 

preference set out in section 13 of 

article 664-3. 

APPROVED: 

Very truly. yo,urs, 

8f 

JOLL<@ . 

Attorney General of Texas 

DAVID M. KENDALL, First Assistant 

Opinion Committee 

jwb 

p. 3863