Court Opinion

ID: 4131717
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:18:52.332198+00
Date Added: 2024-06-11T14:32:53.288348
License: Public Domain

The Attorney                General of Texas
                                          May 29. 1981

MARK WHITE
Attorney General

                   Honorable Gibson D. (Gib) Lewis            Opinion No. MU-344
                   Chairman
                   Committee on Intergovernmental             Re: Competitive     bidding require-
                     Affairs                                  ment
                   House of Representatives
                   John H. Reagan Bldg., No. 114
                   Austin, Texas 787ll

                   Dear Representative   Lewis:

                         You have requested our opinion as to whether the Soard of Trustees of
                   Galveston Wharves is required to receive competitive bids in order to award
                   a contract for the services of a container terminal operator.

                          The Board of Trustees of Galveston Wharves Is a public body which
                   operates the port facilities of the city of Galveston, pursuant to article
                   ll87f, V.T.C.S. The board presently operates a container terminal at the
                   port, consisting of, inter alia, lrtwo ships’ berths, two high-speed specialized
                   40-ton container cranes, and upland area of approximately 32 acres for the
                   storage and placement of containers varying in size from 20 foot to 40 foot
                   lengths.” The board proposes to contract with a container terminal operator
                   for the purpose of operating these facilities.       You ask .whether the board
                   must engage in competitive bidding in order to award such a contract.

                          We note initially that the board of trustees may not &legate any
                   governmental function to a private business. In City of Galveston v. Hill,
                   519 S.W.2d 103 (Tex. 19’751,the supreme court held that, although the board
                   was authorized to lease a grain elevator facility at the Port of Galveston to
                   a private concern %o as to secure special expertise necessary to operate it,”
                   it was not “empowered to delegate          its governmental    or legislative
                   functions%

                               . . . The management and control of the facility. . .
                               is to be limited to proprietary affairs and must not
                               involve the redelegation of governmental or legisla-
                               tive functions of the board of trustees. The manage
                               ment of income and revenue from the Galveston
                               Wharves, the setting of rates and the determination
                               Of policies, being governmental functions, have been
                               explicitly vested in the discretion of the board of
                               trustees by the city charter, and such cannot be
                               surrendered, delegated or bartered away.

                                                  p. 1134
Honorable Gibson D. (Gib) Lewis - Page Two        (hW-344)
519 S.W.2d at 106. For purposes of this opinion, we assume that a contract to operate
the container terminal facilities would not require the delegation of governmental
functions.

     Article 2368a, V.T.C.S., provides, in pertinent   part:

                Sec. 2. (a) No county, acting through its Commissioners
            Court, and no city in this state shall hereafter        make any
           contract calling for or requiring the expenditure of payment of
            Three Thousand Dollars ($3,000.00) or more out of any fund or
           funds of any city or county or subdivision of any county creating
           or imposing an obligation or liability of any nature or character
           upon such county or any subdivision of such county, or upon such
           city, without first submitting        such proposed contract     to
           competitive bids. Notice of the time and place when and where
           such contracts shall be let shall be published in such county (if
           concerning a county contract or contracts for such subdivision
           of such county) and in such city, (if concerning a city contract),
           once a week for two (2) consecutive weeks prior to the time set
           for letting such contract, the date of the first publication to be
           at least fourteen (14) days prior to the date set for letting said
           contract; and said contract shall be let to the lowest responsible
           bidder. The court and/ or governing body shall have the right to
           reject any and all bids, and if the contract           is for the
           construction of public works, then the successful bidder shall be
           required to give a good and sufficient bond In the full amount of
           the contract     price, for the faithful performance       of such
           contract, executed by some surety company authorized to do
           business in thii state in accordance with the provisions of
           Article 5160, Revised Statutes of 1925, and the amendments
           thereto.    However, the city or county in making any contract
           calling for or requiring the expenditure of payment of Three
           Thousand Dollars ($3,000.00) or more and less than Fifty
           Thousand Dollars ($50,000.00) may, in lieu of the bond require-
           ment, provide the contract that no money will be paid to the
           contractor until completion and acceptance of the work by the
           city or county.      If there is no newspaper published in such
           county, the notice of the letting of such contract by such
           county shall be given by causing notice thereof to be posted at
           the County Court House door for fourteen (14) days prior to the
           time of letting such contract.          If there is no newspaper
           published in such city, then the notice of letting such contract
           shall be given by causing notice thereof to be posted at the City
           Hall for fourteen U4) days prior to the time of letting such
           contract.    Provided, that in case of public calamity, where it
           becomes necessary to act at once to appropriate money to
           relieve the necessity of the citizens, or to preserve the property

                                       p. 1135
Honorable Gibson D. (Gib) Lewis - Page Three      (~~-344)

           of such county, subdivision, or city, or when it is necessary to
           preserve or protect the public health of the citizens of such
           county or city, or in case of unforeseen damage to public
           property, machinery or equipment, this provision shall not
           apply; and provided further, as to contracts for personal or
             rofessional services; work done by such county or city and paid
            or bv the dav. as such work orouresses: and the ourchase of
           land &d righi:of-way for authorLed needs and purposes, the
           provisions hereof requiring competitive bids shall not apply and
           in such cases the notice herein provided shall be given but only
           with respect to an intention to issue time warrants with right of
           referendum as contemplated        in Sections 3 and 4 hereof
           respectively. (Emphasis added).

You suggest that any contract to operate container terminal facilities would constitute
a contract for “personal or professional services” and thus be excepted from the
bidding provisions of article 2368a.

       The statutory exception in section 2 of article 2368a for %ontracts for personal
or professional services” was added in 1931. Acts 1931, 42d Leg., ch. 163, at 269. In
Attorney General Opinion H-660 (l975), thii office, in holding that a commissioners
court was authorized to contract for law enforcement consultant services without
receiving competitive    bids therefor,   said that the exception for “personal or
professional services”:

           appears to be a codification of a case law exception concerning
           contracts for services requiring special shills.

In support of this proposition, Opinion H-660 cites Stephens                           52
S.W.2d 53 (Tex. 1932), which upheld the execution & a contract for the services of an
architect    without *competitive bids. Two other cases brought under the pre-1931
statute involved architectural services, one related to a contract with a civil engineer,
and one uoheld a contract with a oavina comoanv for suoervision of countv road
construction    wor     Attorney Gene&l O$nion‘C-267      (1964). The latter ca&, Gulf
Bitulithic Co. v. lt ueces Counts ll S.W. 2d 305, 309-10 (Tex. Comm’n App. 1926), isthe
only instance of a Texas court’s upholding a contract in which the contractor was not a
member of a clearly recognized profession.

       Whatever the state of the case law in 1931, the exception enacted that year did
not establish a “special skillr? standard, but one of “personal or professional services.”
To the extent that Attorney General Opinion H-680 (l975) suggests otherwise, we
believe it is incorrect. In our view, it is necessary to examine the particular meanings
of “personal services” and “professional services” to determine whether a contract for
the services of a container terminal operator falls within either category.

     In Van Zandt v. Fort Worth Press, 359 SW. 2d 893 (Tex. 1962), a newspaper

                                       p. 1136
Honorable Gibson D.   (Gib)   Lewis - Page Four   (~~-344)

brought an action to recover amounts due for advertising services. The ne,wspaper
contended that advertising services were “personal services,” and, as a result, article
2226, V.T.C.S., authorized the recovery of attorneys fees therefor. The supreme court
quoted with approval the Supreme Court of Utah:

            The term ‘personal service’ indicates that the ‘act’ done for the
            benefit of another is done personally by a particular individual.
            (Emphasis in original).
359 S.W.2d at 895. The court held that, although the labor of the newspaper’s
employees might qualify as “personal services, ” the cause of action was for something
more inclusive - “advertising services ” - which embraced not merely personal
services, but profit, taxes, insurance and other items.

      In Radio KOKE, Inc. v. Tiemann, 378S.W. 2d 952 (Tex. Civ. App. - Austin 1964,
writ reM n.r.e.). olaintiff soueht attornevs fees under article 2226 in a suit to recover
the Cost of mo&g householzgoods.          The court said that attorneys fees might have
been recoverable on that portion of the contract attributable to employees’ wages, if
the wages had been separately itemized. But when no itemization is made and the use
of -machinery and equipment is part of the cost of the contract, the contract Is one for
“personal services” only if the contribution       of the machinery to total cost is
substantially less than the contribution of employee wages. As an example of a
contract that could not be considered one for personal services, the court suggested
the operation of a loo-car freight train by a crew of three or four men.              The
employment of a laborer to dig a ditch using his own pick and shovel, on the other
hand, is clearly a contract for personal services.

        In our opinion, these two cases indicate clearly that a contract to operate
 container terminal facilities, which operation you have described as complex and
{technical, cannot reasonably be described as one for “personal services.” Even if a
 large portion of the contract price is assigned to labor costs, the total contract amount
 will certainly include costs ascribable to taxes and insurance as well as the operator’s
 anticipated   profit.  Accordingly, the contract       may not be excepted from the
 competitive bidding requirement of article 236aa as a “contract for personal services.”

      The meaning of “professional services” is less clear, but court decisions in this
area are sufficiently similar to persuade us that a container terminal operator does not
perform them. In Maryland Casualty Co. v. Crazy Water Co., 160 S.W.2d 102 (Tex.
Civ. App. - Eastland 1942, no writ), the court determined that operating a bath house is
a business rather than a profession. In a profession, the court said, the labor and skill
required are “predominantly mental or intellectual, rather than physical or manual.”
160 S.W.2d at 105. See also, Horn v. Burns and Roe, 536 F; 2d 251, 255 (8th Cir., 1976).

      A Louisiana court, in Transportation Displays, Inc. v. City of New Orleans, 346
So. 2d 359 (La. App. 1977), held that public bidding was required on a contract to
conduct the sale of advertising space and facilities at an airport, since the sale of

                                        p. 1137
 Honorable Gibson D. (Gib) Lewis - Page Five       (MW-344)

advertising services did not constitute     the rendering   of “professional   services.”   A
“professional,” the court observed :

              denotes a person in a profession which requires years of
              education and service for one to attain competence and which
              calls for a high order of intelligence, skill and learning.

 346 So. 2d at 363, fn. 5.

        The most useful standard for judging the scope of “profession” was furnished by
 the Supreme Court of West Virginia in Wooddell v. Dailey, 230 S.E.2d 466 (W.Va.
 19’76). In that case, the court, while holding that the activities of an interior decorator
 were not “professional services,” acknowledged that the term included more than
“theology, law or medicine.” Neither was the term limited to the pursuit of occupations
 specifically recognized as professions by statute. 230 S.E.2d at 469-70. But a
 “profession” must be established es such.          While       ” most occupations, trades,
 business or callings require a diversity of knowledge and skill,” it is only the
 “professional” who:

              is a member of [a] discipline with widely accepted standards of
              required study or specified attainments in special knowledge as
              distinguished from mere skill.

 -Id. at 470.
        Likewise, in Glushak v. City of New York, 178 N.Y.S.2d 33 (App. Div. 19581, the
  court emphasized the factor of recognition in holding that a renderer, who prepared
  pictorial representations  of proposed buildings from plans submitted by professional
  architects and builders, did not perform “professional services”:

              The status of a professional. . . does not include persons who,
              while working in fields related to recognized professions, have
              not yet achieved that recognition themselves.
178 N.Y.S.2d at 36.

       For the same reasons, we do not believe that a container terminal operator may
fairly be said to be a member of a recognized profession. As a result, a contract for
the services of such an individual or company is not excepted from the competitive
bidding requirement of article 2368a as a “contract for professional services.” We
conclude that the Board of Trustees of Galveston Wharves is required to receive
competitive bids pursuant to article 2368a in order to award a contract for the
services of a container terminal operator.

                                      SUMMARY

                  The Board of Trustees of Galveston Wharves is required to
              receive competitive bids pursuant to article 2368a, V.T.C.S., in

                                         p. 1138
Honorable Gibson D. (Gib) Lewis - Page Six (~~-344)

           order to award a contract    for the services   of a container
           terminal operator.

                                       WWF&g

                                        Attorney General of Texas

JOHN W. FAINTER, JR.
First Assistant Attorney General

RICHARD E. GRAY, HI
Executive Assistant Attorney General

Prepared by Rick Gilpin
Assistant Attorney General

APPROVED:
OPINION COMMlTTEE

Susan L. Garrison, Chairman
Mahon B. Gary, Jr.
Rick Gilpin
Jim Moellinger

                                       p. 1139