OFFICE OF THE ATTORNEY GENERAL. STATE OF TEXAS JOHN CORNYN

January 5,200l

The Honorable Jeff Wentworth Chair, Nominations Committee Texas State Senate P.O. Box 12068 Austin, Texas 7871 l-2068 Opinion No. JC-0326

Re: Legality of contract award by the City of San Antonio (RQ-0268-JC)

Dear Senator Wentworth:

You ask a number of questions about the legality of a contract award by the City of San Antonio. As this office cannot make findings offact,’ we cannot determine whether the city violated the law in awarding the contract. For this reason, we answer your questions only in the most general terms. We do conclude that section 252.042 of the Local Government Code, which requires acity to treat offerors fairly and equally with respect to any opportunity for discussion and revision of proposals, applies only to requests for proposals made under section 252.021 of the Local Government Code.

You inform us that the city council approved aprocess for awarding an advertising contract for the San Antonio Convention and Visitors Bureau (“SACVB”) by arequest for proposals and solicited proposals for the contract from advertising and marketing agencies in February 2000. The deadline for proposals was April 21, 2000. The letter soliciting proposals informed potential proposers that proposals should include aGood Faith Effort Plan regarding the manner inwhich the proposers would use minority and women owned business enterprises. The city received three proposals as of April 21. Your request asserts that only one provided a detailed Good Faith Effort Plan; the other two proposals included plans of amore general nature. In July 2000, the city invited the three proposers to clarify or revise their Good Faith Effort Plans. In August 2000, the city awarded the contract to one of the companies that had not submitted a detailed Good Faith Effort Plan in April. The proposer that did submit a detailed plan in April challenges the legality of the city’s decision to allow the other proposers to revise or clarify their plans after the April 21deadline and to award the contract to the other proposer.z

‘See,e.g.,Tex. Att’y Gen.Op. Nos. JC-0020(1999) at2 (stating thatinvestigation

andresolution

offact questions

cannot bedoneinopinion

process);

M- 187(1968)at3(“[TJhis officeiswithout

authority

tomake, fachlal determinations.“);

O-291 1(1940) at2 (“[T]his presents afactquestion

which weare unable toanswer.“).

%-e Letter

fromHonorable

JeffWenhvorth,

Chair, Nominations

Committee,

TexasState

Senate, toHonorable John Comyn,TexasAttorney General at2-6 (Aug. 14,200O) (onfilewithOpinion Committee)

[hereinafter

Request Letter].The Honorable Jeff Wentworth - Page 2 (X-0326)

The city informs us that the contract at issue is “budgeted at over $4.6 million dollars ammally.“3 We gather that the city council approved a document called “SACVB RFP Process, Schedule, Selection Criteria, and Review Committee.” City Brief, note 3, at 2. We have not received a copy of this document. Chapter 252 ofthe Local Government Code generally requires amunicipality to comply with competitive bidding requirements when making purchases exceeding $15,000. See TEX. Lot. GOV’T CODEANN.5252.02 1(a) (Vernon Supp. 2000) (“Before amunicipality may enter into acontract that requires an expenditure of more than $15,000 from one or more municipal funds, the municipality must comply with the procedure prescribed by this chapter for competitive sealed bidding or competitive sealed proposals.“). Chapter 252 allows competitive sealed proposals for certain kinds ofpurchases, namely high technology procurements and those made with municipal funds “derived from an appropriation, loan, or grant received from the federal or state government for conducting a community development program” established under chapter 373 of the Local Government Code, the Texas Community Development Act of 1975. See id. 55 252.021(c), (d) (Vernon Supp. 2000); ,042 (Vernon 1999); see also id. $5 373.001.,007 (Vernon 1999) (Texas Community Development Act of 1975). In addition, other state and federal standards may govern purchases made with state or federal grant money. See TEX. GOV’T CODEANN. $5 783.001-,009 (Vernon 1994 & Supp. 2000) (Uniform Grant and Contract Management Act); see also UNITED STATES OFFICE OF MANAGEMENT & BUDGET, CIRCULAR A-87 (1995), amended (1997); id. CIRCULARA-102 (1994), amended (1997):

Section 252.022 of the Local Government Code provides that chapter 252 “does not apply to an expenditure” for anumber of different types of items, including “aprocurement for personal, professional, or planning services.” TEX. Lot. GOV’T CODEANN. 5252.022(a)(4) (Vernon Supp. 2000). Furthermore, section 252.002 provides that “[alny provision in the charter of a home-rule municipality that relates to the notice ofcontracts, advertisement ofthe notice, requirements for the taking of sealed bids based on specifications for public improvements or purchases, the manner of publicly opening bids orreading them aloud, orthe manner ofletting contracts and that isin conflict with this chapter controls over this chapter unless the governing body of the municipality elects to have this chapter supersede the charter.” Id. 5 252.002 (Vernon 1999).

You ask whether “a proposer who fails to comply with the City’s Request for Proposal requirements

. [is] qualified to receive a contract award” and whether “a city violate[s] its own Request for Proposal” by allowing proposers to form new business relationships and submit new information after the deadline for submissions. See Request Letter, supra note 2, at 6-7. We are not able to definitively resolve these questions.

‘BrieffromDavidJ.LaBrec,Stiasbwger & Price,L.L.P., toSusanD. Gusky,Chair,OpinionCommittee, OfticeoftheAttorney General at2 (Sept.28,200O) (onfilewithOpinion Committee)

[hereinafter

CityBriefJ.

“Availabk ofhttp:Nwww.whitehouse.goviOMBigrants/index.h~l.The Honorable Jeff Wentworth - Page 3 (X-0326)

First, the legal tiamework under which the city awarded the contract is not clear either from your request or the materials we have received from the city. Apparently, the city used arequest for proposals procedure to award the advertising contract. As we have seen, chapter 252 generally
reserves requests for proposals to certain kinds of contracts. Although section 252.002 authorizes
a home-rule city to modify the requirements of chapter 252 in its city charter, we have no information about whether the City of San Antonio has done so. Furthermore, we have received a brief corn the City of San Antonio insisting that it awarded the contract at issue as aprofessional services contract, which would be exempt from chapter 252. See City Brief, supra note 3, at 5-7. Whether a contract is one for professional services exempt from chapter 252 is generally a fact question within the province of acity’s governing body: “[A] municipality has discretion inthe first instance to determine whether particular services, other than those covered by [chapter 2254 ofthe Government Code] are professional services for purposes of exemption from competitive bidding requirements under Local Government Code section 252.022.” Tex. Att’y Gen. Op. No. DM-106 (1992) at2. This office cannot review the city’s determination to the extent itdepends upon findings of fact. See id. (“determinations as to whether particular services, other than those covered by [chapter 2254 ofthe Government Code] are professional services for competitive bidding purposes, frequently involve fact questions that the opinion process cannot address”); see also Tex. Att’y Gen. Op. Nos. JC-0020 (1999) at 2, M-187 (1968) at 3,0-2911 (1940) at 2, supra note 1.
Second, even ifwe were able to establish the correct legal framework under which to analyze the contract award, we would still not be able to resolve your questions about the legality of the city’s conduct because their resolution would also involve questions offact. For example, assuming that the contract was competitively bid under chapter 252, whether ornot the city acted appropriately in permitting two ofthe three proposers to amend their Good Faith Effort Plans could depend upon whether asufficiently detailed Good Faith Effort Plan constituted amandatory bid specification and, if so, whether itwas awaivable or nonwaivable bid condition. The city suggests that detailed Good Faith Effort Plans were not required, that each ofthe three proposers submitted complete Good Faith Effort Plans, and that no bid condition was waived.’ The complaining advertiser believes, however, that a detailed Good Faith Effort Plan was a mandatory bid specification with which the other proposers failed to comply. This office cannot resolve that factual dispute. Moreover, this office cannot resolve whether the defect in the bid specifications, if there was one, was waivable or nonwaivable. Case law suggests that a nonwaivable defect in abid is one “that would allow the bidder to avoid the binding nature of his bid” and “if it gives abidder a substantial advantage or benefit not enjoyedbyotherbidders.” Spawglass Cons@. Corp. v. CityofHouston, 974 S.W.2d 876, 885 (Tex. Civ. App.-Houston [14th Dist.] 1998, pet. denied). This office cannot engage in the factual inquiry necessary to make those determinations. See Tex. Att’y Gen. Op. Nos. JC-0020 (1999) at 2, M-187 (1968) at 3,0-2911 (1940) at 2,sups note 1.

You also ask whether “a city violate[s] the [Local] Government Code requiring that all proposers be treated fairly when it discloses one proposer’s minority and women’s plan and grants

‘SeeLena fromFrank J.Garza,

SanAntonio

CityAttorney,

toSeagal

V.Wheatley,

Jenkens &Gilchrist,

P.C. (Aug. 11,200O) (onfilewithOpinion Committee);

seealsoCityBrief,supranote3, at7.The Honorable Jeff Wentworth - Page 4 (X-0326)

an extension beyond the deadline to let two (2) other proposers change their proposals to add such
a required plan,” Request Letter, supru note 2, at 6, and if a city “violates the fair treatment requirements of the [Local] Government Code by permitting two proposers to ‘team up’ after the deadline,” id. at 7. The questions appear to refer to section 252.042 ofthe Local Government Code, which provides as follows:

(a) Requests for proposals made under Section 252.021 must solicit quotations and must specify the relative importance of price and other evaluation factors.
(b) Discussions in accordance with the terms of a request for proposals and with regulations adopted by the governing body ofthe municipality may be conducted with offerors who submit proposals and who are determined to be reasonably qualified for the award of the contract. Offerors shall be treatedfairly and equally with respect to any opportunity for discussion and revision ofproposals. To obtain the best final offers, revisions may be permitted after submissions and before the award of the contract.

TEX.Lot. GOV’T CODEANN. $252.042 (Vernon 1999) (emphasis added).

Section 252.042 does not appear to apply to the contract at issue. As noted above, section 252.042 on its terms applies only to requests for proposals under section 252.021. That section provides in subsection (c) that “[a] municipality may use the competitive sealed proposal procedure only for high technology procurements or, in amunicipality with apopulation of 75,000 or more, the purchase ofinsurance.” Id. 5252.021(c) (Vernon Supp. 2000). The advertising contract atissue does not appear to be a contract for a high technology item. See id. 5 252.001(4) (Vernon 1999) (“‘High technology procurement’ means the procurement of equipment, goods, or services of a highly technical nature, including: (A) data processing equipment and software and firmware used in conjunction with data processing equipment; (B) telecommunications equipment and radio and microwave systems; (C) electronic distributed control systems, including building energy management systems; and (D) technical services related to those items.“). In addition, arequest for proposal process may be used to make expenditures with certain municipal funds. Subsection (d) of section 252.021 provides that:

[t]his chapter does not apply to the expenditure of municipal funds that are derived from an appropriation, loan, or grant received by a municipality from the federal or state government for conducting a community development program established under Chapter 373 [the Texas Community Development Act of 19751 ifunder the programThe Honorable Jeff Wentworth - Page 5 (X-0326)

items arepurchased under the request-for-proposal process described by Section 252.042.

Id. 5252.021(d) (Vernon Supp. 2000). We have not been provided any information suggesting that the expenditure atissue was made with municipal funds derived from an appropriation, loan, orgrant received by the city from the federal or state government for conducting acommunity development program under the Texas Community Development Act of 1975.

In sum, given the factual nature ofthe inquiry, we cannot determine whether the successful proposer was qualified to receive the contract or whether the city violated its request for proposals. Section 252.042 of the Local Government Code, which requires a city to treat offerors fairly and equally with respect to any opportunity for discussion and revision of proposals, applies only to requests for proposals made under section 252.021 of the Local Government Code.The Honorable Jeff Wentworth - Page 6 (X-0326)

SUMMARY

Section 252.042 of the Local Government Code, which requires acity to treat offerors fairly and equally with respect to any opportunity for discussion and revision ofproposals, applies only to requests for proposals made under section 252.021 of the Local Government Code.

Attorney General of Texas

ANDY TAYLOR First Assistant Attorney General

CLARK KENT ERVIN Deputy Attorney General - General Counsel

SUSAN D. GUSKY Chair, Opinion Committee
Mary R. Grouter Assistant Attorney General - Opinion Committee