Court Opinion

ID: 4131185
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:12:56.195832+00
Date Added: 2024-06-11T14:33:23.055677
License: Public Domain

The Attorney                   General                     of Texas
 M MAlTOX                                               December           28,       1984
.-dorney   General

                               Eonotable    Lloyd     Ctira                                     Opinion        No.   JM-282
  >prsma coufl sulldlw
P. 0. aor 12545                Cheirun
Austin. TX. 7671%2646          Comittce    on Labor and                                         Re:    Usa of construction               manage-
   2f475-2601                      Employment Relatioos                                         ment contracts    by stata               univor-
  .,.I 61oi67&1347
                               Texas Eouae of Representatives                                   sities
Teluophr 512147w266
                               P. 0. Box 2910
                                                                                 &
                               Au6tin.   Texas    7876~9
 .4 Jackwn. Suit6 700                                                            <
Dallas, TX. 762624608          Deer   Representetive          Cris6:
5wl42-6644

                                     You    beve requested               our opinion     about    the legality   of a bidding
4624Albarta Ave., Sull6 166    procedure     used by one or              more atate   tinivcr6ities     to award construction
Cl Pm& 7x. -2762               contract6.      You descxibe              the procedure     aa follour:
 tzssx64
                                             f
                                                (a)   B:r formel advertiaiae,,       general  contracting
-901 Taxer. SUN6760
                                            flms    ara   invited    to bid on the fee 6od other
 o~s~o~.
     TX.77002-m                             rate6 tbe:r vould     charge   to build    the project   based
,1Y2ZMKl5                                   w a generrl      project    description.      They are asked
                                            to bid on:

 29 sro*cJw~y.Suit. 312
Lubbock.TX. 79401-3479
                                                       (1)      A        percentage            fee      ba6ed        oo     project
6ow747.6236                                      CO6t6;
                                                       (2)      A bood       rste;
                                                       (3)      A        6avlng6            ratio       for      dividing      any
 409 N. TonuZ SW6 S
                                                 6avingr            in     job        co6t6         under      the    guar6nteed
 MCAIIUI.7x. 76661.1666
 ‘12i662.4!547                                   maA.mu~ price;
                                                     (4)   A             vorkmen’       6      compen6atlon               inrurance
                                                 rate;   and
 200 M&l Plus, suns 400                                (5)      An hourly             rate    for     conrultfng          services.
 -an ~ntonlo. TX. 76266.2767
   122254191
                                                 (b)         The fee       aod       rate    bids     are     evaluated       In   tvo
                                             6tep6:

                                                    (1)    A 6et of predctenninad                           units of measure
                                                 and a preset      total    cost are                     used to arrive    at
                                                 the total   dollar     cost of the                      fee and commitment
                                                 of eac:h bidder;

                                                     (21    A final      evaluation      i6  made based      on
                                                 total    ,dollar    amount of      the bid,    contractors’
                                                 financial        rCLIOUICe6,     surety     and    insurance
Honor6ble   Lloyd   Cri66   -   Page 2     (J’H-282)

                experience.      con6t~uctioo      axperience,     completion
                lbflfty,     persome:,     available.      rquipxent   avail-
                able,    vork load,     md client      relationship.

                (c)  A    contract    i6    avarded   ba6ed    ou    the
            proposal   most advanttq:eou6    to the univerrity    after
            ao evaluation    of the bid6.      A contracti6 exacuted
            and bonds aod insurance      certificates   are provided.

                (d)   The   coutracl:or    begin6   doing  preltrirurg
            cowulting     vork vith     the de6igUe?6   of the project
            and prepare6      co6t   ~!otim6ter   a6 the dcrign      vork
            progre6ae6.

                (c)    As   variou6          phase6 i ‘of     the     plan6     are
            completed.      the      cout,ractor      \ obtain6     competitive
            rubcontract     bid6.       l’lle contr6ctor      i6 Dot required
            to rubcontract        all     of the vork.          The contractor
            may declignete     the portion6         of the vork to be done
            by~the contractor,          rod provide6       detailed     l6tixates
            of   the propccled         CsJIst of     tho6e     pOrtiOn6.        The
            univer6ity/may        accc:Flt the       estimate      or    elect    to
            take    6UbCoUtr6Ct       bid6.      Alro.    the univerrity        may
            require     the    contractor         to    perform      prelimiomy
            conrtructiou      vork      c.el -be paid     for   on a time and
            wteriel be6i6.

                (f)   The contractor        then 6ubmit6    a guaranteed
            winurn      price    to t’neuaiver6ity.       Thi6 price    f6
            baaed on the 6ubcou:l:act         bid6 and the estimates    of
            the portion6      of tL!     vork   to be performed   by the
            contractor.       If    th$c guaranteed   uaximum price      is
            not acceptable,        the contractor     16 paid   ouly   for
            it6 con6ulting       vork.

                (g)    If the 6ax!.mm price      ir accepted,   a vork
            order    is   irsued     for   the  construction   of. the
            project.      The    project    i6  then   built  and    the
            contractor     is  paid    l11 co6t it incurs,    pLu6 the
            percentage    fee and rate6 ba6ed on it6 original        bid
            up to the auount of the guaranteed         vaximuu price.

      You have        posed  a nualber    of specific       questions    about     this
procedure,     all   of which deal   vith   the compatibility      of the procedure
with   section     51.907 of the ‘fexas Education     Code.     In order    better    to
address     you?    specific  conc4!?*6,   “e  vi11   first    discuss    the   matter
generally.

                                             p.   1247
Ronorable     Lloyd   Cri66    -   page   3    (JH-282)

       Section  31.907  of the lexas  Education                 Code va6 enacted          in 1977.
Act6   1977, 65th Leg.,   ch. 191, 6t 562. It                  6tatC6 in P-tine-            Part:

              All  contract6     for the      con6truction      or erection      of
              pe-uent      irprG!rts           at an institution       of higher
              educetiou     . . . a?(!       void      UUh66       m6de      lf ter
              ldverti6ing        for     bidatheraou            in    a    manner
              pre6crlbed      by     it6     governinS      board.      ?ecaiviuS
              sealed     coopetitivtr       bid6.     and    awarding     of    the
              cootract     to the l&vest         re6pou6ible     bfdder    by the
              gpvemlag      body.    . ,I .    (poPha6is     added).

       It     i6   important     to     di6tingui6h         between      contracts       for the
construction       or lrectiou     of a building         and contrsctsfor planning             the
construction       and erection      of it.      Only’the       former    are vithln      6ectioa
51.907.        Architectural      6ew:Lce6,       enSinee?ing        service6.        con6ultant
service6,       and the manner 01 procuring                them are controlled          by other
6tatute6.         See   V.T.C.S.     ll’t.    664-4      (prof lssional      service6)    ; art.
6252-11~      (prxte      conaultantr).        In our opinion,          the vork     to be done
prior     to the    time a decirios        i6 to be made about vho vi11                engage    In
actual      con6tructiou      vork    (as    coutamplated         by   the   procedure      under
reviev)      COUSi6t6    o’p rofe66:;onal       or consultant        service6      not governed
by election 51.907 o          the Education      Code.       Cf. Attorney General Opinion
MU-530 (1982) (“construction             manager”).          -

       Article      664-4.     V.T.C.S.,      provides      that   oo 6tate      agency    “rhall
make any contract           for, or tmgage the profeclsional                6ervice6    of ,” any
licensed     architect or regi6tered              lo g ineer   “6elected      ou the basis        of
competitive       bid6    . . . , but 6hell         select   and award ruch contracts           and
engage     6uch service6          on tllc! ba6i6        of   dexonstrated       competence      and
quelificatioss         for   the type of professional,           service6     to be performed”
at    fair     6ud     reasouable        lwfce6.        Any   contracts,       agreements,        or
arrangement6         for   6uch servLce6         made directly        or   indirectly     by any
state     lgewy       in    any w6y       in   violation      of   the    6tatute     are    void.
V.T.C.S.      art.     664-4, I4. Cf. State V. Steck. 236 S.W.Zd 836 (Tex.
Civ. Ape. - Au6tln           1951, k&?ef’d).

        Profemional         6ervlce6.       trithln   the ueaning        of the above        statute,
 include    all   those vlthin         the scope of law6 defining               such professional
 practices      or tho6e       perforswtl       by any such licensed             practitioner       “in
 counection~ith         his     profewional          lmploynant or practice.”                V.T.C.S.
 art.   664-4. 52. The praccQ:e                  of architecture         is defined       at article
 209a. section       IO(a),      V.T.C.!;..      The practice      of engineering          is defined
 at article      3271a.     section      2((i).   V.T.C.S.       Section     19 of article        32718
 specifically       makes       it    unlrvful       for    the    state      to   engage      in    the
 con6tructioa      of any public          wc,rk estinated       to co6t more than $3.000 and
 involving       professional          engineering         (where     public       health,      public
 welfare.     or public        safety       11s involved)     unless      the engineering         plans
 and rpecificatlons          and lsti~a;~res are prepared             by. and the engineering
Hooorable      Lloyd   Crisr        -   Page    4   (JH--282)

construction       16 executed            under,.   the dlrecc   rupervi6ioo         of    a registered
proferrional       engineer.               *

        Ibe    caployment      of       other   ,p?iv6te   eon6ult6ntr        by   rtate    6gencie6     16
governed      by    article      6252-11,~.     V.T.C.S.        The     rtatute      defioer       6
consultlog      rervice     a6  “the    human    6ervice    of    6tudying     o  r ldvi6inS     an
agency under an independent              cwntract.”      Jd& 11(l).        The act exprecrrly
does not apply to the employueat               of regi6tered        profe66iouaL       engineer6
or reglatered       architect6      (1)   for architectural         or engineering        6tUdia6
or (2) for the derign            or con6truction        of 6tete      faCilitie6.        Id.    12.
But the act        i6 applicable,          in our opinioo,          to other6 empla              a6
management       cwn6ultaflt6       on    t'he  de6ign      or     COUltrUCtiOII      of     6tate
facilitier.        Cf.    V.T.C.S.      art.   601b.     93.01(b)     (“6ewice6”        include6
6killed     or unskilled      labor    or profe66iooal       work).
                                                     2
       The criteria     for the UIC and 6elCction         of such a conmltant         by a
state    agency    is  act out io the third         section     of article     6252-11~.
 Sub6ection    (3) of the fiY6t    6c,CtiOn include6      four-yea?    iU6titutiOn6       Of
higher    education   vithin   the i.cfinitiou     of “6tate     agency.”     Selection6
 of private    consultauts    are not to be made on the ba6i6 of competitive
bide,    but  if the coutract      may be valued        in exce66     of $lO.OGO,       the
 agency   16 required     p invite   offers publicly        for eonaulting      6erviceo.
-Id.  96(a).    _See Attorney   General    Opinion   N-1173 (1978).

       With chore preliminary    ob6ervatiooo   made,                    ue    can proceed       to    your
rpecific   quecltiow.  the fir6t   of which follcw6:

                    1.  hay  the   u6iverrity      6olicit       and   receive
                competitive   bide   for    construction        of   permanent
                improvement6   ba6ed   on 8 general        project    dercrip-
                tlon before  plans r.od specifications          are complete?

       Pirrt     -king       a di6tinction      betveen     bide   for the cm6truction            of
permanent       improvcmcntr       and csffe?a     to act a6 6 m66gem6nt cousultanc
regarding      6uch con6truction.           aa above dircusred,        our anaver       16 in the
negative.          A general       projef:t    de6Cription       of incomplete         plan6    and
rpecification6            vi11    not     :k?ni6h      a    eufflcient      barls       on   vhich
competitive         bid6    for  the can6truction         of a project       e6n be received
purruanr       to     section     51.907     of the      Education     Code.       As    noted    in
Attorney      General      Opinion    R-24 (1973).       a procedure     does not re6ult          in
competitive        bids where bid document6 leave               to conjecture       requirement6
soverninn        the bids       and onlv      by   haDDanStanCe       would    all     interested
biddera     irrive       at a common ;:onfluri&            regarding    their     awaning.       See
also   Attorney General Opiniolr W-299                (1981).      In Starrett      v. Bell.    210
m2d        516. 520 (Tex.          Civ.    App. - Dallas       1951. (LO vrit).       cited    vich
approval      in Texas        Highvay     Conmission     v.   Texas    Association        of Steel
ImDorters.        372 S.U.Zd     525 (T'Gc. 1963).       it was said:

                                                    p.   1249
Honorable       Lloyd    Cries       -   Psgc   5   (J*2g2)

                ‘Cmpetitiva     biddiql”      requires   due l dvertiremant,
                giving   opportunity       to   bid.   and   contemplatas     a
                bidding   00 tha same undertaking          upon each of the
                same material     item    (covered by the contract;       upon
                the same thing.        It requirea     that all bidders      be
                placed    upon the saw       plane     of equality       and that
                they each bid upon the aame terms and conditions
                Involved     In   all    the    items     and    parts     of    the
                contract,    and that t’he propoaal          specify    as to all
                bids   the same, or aut~ataatially          similar    speciflca-
                tions.    . . .    There caa ba no competitive             bidding
                in a legal     sensa whwe     the terms of the letting            of
                the    contract     ptcwut      or    restrict       competition,
                favor   a contractor     or materialman.        or increase      the
                coat of the work DC of thi’msterlals                     or other
                items going Into the: project.’

         Your   second       questioo      aekr:

                    (2)  Ma? the university      award contracts      on ~tha
                basis    of  lpplica’c:Lon    of    the  bid     itams      to
                predetermipd   units    ,of me.aaure not fully    disclosed
                in the bid documents?

       This   question     refers     to the avarb       of a consulting      contract      and
not a cbnstruetion         contract       wnder the postulated       procadure.      since    it
is lntmdad        to establish       a Frlce     to be paid .for     consulting      services
whether      or    not   the     eontrwtor’s         “guaranteed     maximm       price”      to
construct      the facility       is   later   accepted.      Awards   of such contracts
are   goverued      by artlclas       66’i.A   and 6252-11~.     V.T.C.S..      rather     than
section     51.907 of the Education           Code.    Those statutes      do not prohibit
the incidantal       use of such criteria          In awarding   such contracts.

         Your    third   and         llxth qtu:stions    involve   the   “guaranteed     maximum
price”      aspect    of the         procedure  and will    ba consldarad    together:

                    (3)   Ma9 the unlvereity               award a contract   on the
                basis    of  cost    plue    a            percentage   fee   with    a
                guaranteed   maximum price?                Does it mattar   that the
                maximum price     is    agreed             to without    competitive
                bidding?

                     .   .   .   .

                     (6)    Are    the   c,ompetitive    bidding             statutes
                satisfied      by the wtting      of a guaranteed             maximum
                price    for the constmction        of the project.             rather
                than a fixed      price!

                                                    p.   1250
Honorable      Lloyd   Crisa     -   Page 6   (JH-282)

         The   usual   bidding       proceduc,c        is   one   where   a   general   contractor,
having     already       msde   iudepeodant      arran~ementa      vith    any   npecialty
contrsctora       (“subcoutractors”)       be intends      to use.    offers   to build     a
coutemplated        facility    for a fixed price.          The owuer.     in that    case,
looka    to    the    general    contrscmr      alone    and usually      has   no direct
control    over the choice        of subcoatmctors       to be used on the project         or
the price      paid    them, sod no cmtrol          over  the luouut     of profit    built
into the bid for the general            cantractor.

       In   contrast,     the procedwo        at Issue    results      in an arrangemant
similar     to one where the ovner’ of a projact             acts     as his own ganaral
contractor.       farmlng     out   various      phases   of    the    uork    directly    to
specialty      contractors     of his     selection.      Hare,     the “consultant”        is
expected     to act 6oMYhSt as though he were the uafversity’s                     agent  for
that    purpose,     and    the profit      or   “fig’   of the      “consultant/general
contractor”      remains    in the control       of the university       unless    It allows
the consultant       to do part of the sctual          cnnstructfon,      thus becoming       a
specialty     contractor     as veil.

       gotwithstanding          the control       this   procedure      gives     the university,
in    his    legal      relatloaahip        ,rlth     other     epecialty       contractors        the
consultant/general           cpntractor remains          the only contractor           to whom the
university       is under         contractual       obligation.         In    our    opinion,      the
consultant/general           contractor      is the prima contrector             to whom all       the
subcontractors         are    contractually        bound and is        not the agent          of   the
university        in    dealing       with     aubtootractors.            Indicative       of     that
relationship        is the fact that the “consultant’s”                   bond in favor       of the
university      covers      the subcontractors’           work as well         as his     own.     See
Lytle     P. McAlpln.       220 S.U.2d      216 (Tax.       Civ.   App. - San Antonio            19x
writ   diam’d).

       In such a setting,            the “guaranteed        maximum price”           ia   substan-
tially    the sama thing         as a f:.a:ed price      (from     the university’s         stand-
point)    because     it fixes     the maximum amount the university                Is obligated
to pay for the co+eted                project,      and if    project     cost     exceeds     that
amount,     the lxeesa       is absorbwl      by the consultaot/genaral               contractor.
The fact       that     occurrence     of   certain    contingencies        will      reduce     the
actual     a-t        the unlvernity       is required       to pay does not change               its
character.       See Black      v. Phil+        Miller   Co.,     14 P.2d 11 (Wash. 1932).
Cf. Gay v. SGtton,             559 S.U.2,d     131 (Tex.     Civ.    App. - Texarksna         1977,
xt     ref’d    n.r.e.).       Bowever, the price contemplated             by the particular-
arrangement       here     is a eated            price    for   construction         work --     not
one determined         by competiclvcYbids         as section      51.907 of the Education
Code requires        for construction       vork -- and is therefore             fmpenafssible.

       In ansuer   to your questions,      then,   in our opinion.   a university
nay award a negotiated        “consultant    services”     contract that provides
ior   compensatjon    to the Gsultant         based    upon a percentage    of   the
total    cost for   a project    vi,th   a guaranteed     maximum, assumfng    that

                                                  p.    1251
Honorable     Lloyd   Criss   -   Page   7   (JM-282)

other   requirements     of article      6252-11~.  V.T.C.S..   are        met.
                                                                            And      may it
award a construction          contract:    on the basis     of a guaranteed     maximum
price   vith    automatic     reductit~m~a based    upon specified      and advertised
contingencies.       in our opinion,       if the award is based upon competitive
bids   as required     by section .51.907       of the Education      Code.  See Texas
                                                                             --
goofing CO. v. Whiteside,            38!i S.Y.Zd   699 (Tex.   Civ.    App. - Amarillo
1964, writ     ref’d   n.r.e.);    cf. .kttorney General      Opinion   MU-299 (1981).
But it      cannot     avard   a “c~ltant          sewices”      contract     on competitive
bids     In     the    section     51.90’1     lenee.sad        it    cannot negotiate           a
“constroctfoa”          contract     in c:be article        6252-11~      or   article      664-4
sense.       Nor    can the      requfrevmts       of these      statutes     be avoided       by
soliciting        both    “consultant      services”     proposals      and “constNction”
bids    at the same time for fnc:l.usion             in a single      contract.       Cf. Kelly
v.   Cochran       Counte.     82 S.W.Zd       641 (Tax.     1935)     (separ*te      cOntract6
executed       by county       to   avoid    statutotg     requirements       held     void   and
subject      to cancellation).                         \

       Contracts     based    upon bid:6 made by subcontractors               to e -general
contractor      for   incorporation       In the price       submitted     by the general
contractor     to the ovnar (whether           it be designated      a “fixed    price”     or a
“guaranteed      msximum price”)        xce not contracts on “competitive                 bids”
within    the maanlng )rf secticro         51.907     of the Education        Code,   because
they are not contracts           made “s.fter     . . . receiving      sealed    competitive
bids   . . . by the governing           ‘k9.l’      The acceptance       of a subcontract
bid by the genetal         contractor,     acting    not as agenr      for the university
but on his own behalf          (even though he allova        the university       a right     of
prior   approval),      crease     a contract     between   the general      contractor      and
the subcontractor         -     to which      the university      is   a stranger       or,   at
best,    merely     a beneficiary.          Sat    Texas   goofing     Co.   v.   Whiteside.
s;       Lytle    v. McAlpin.      -L,,     -

       0019 a competitive          bid   wcepted     by the governing         board   of    the
educational      institution      can 1~; the basis       of a construction         contract
suthoriaed     by section       51.907,,    For that    reason.    also.    a construction
contract    based     on a general       contractor’s      “guaranteed     maximum price”
cm    be awarded      only   upon a ccnpetitive        bid    submitted     in competition
with    other    ganeral     contractors      .vying   for    the   “guaranteed       maximum
price”    contmct.        It is    s md,snomer, however.        to refer     to a contract
for   construction      with    a “guaranteed      maximum price”        as a “cost      plus”
contract,     because     the “guarant:eed     maximum” creates        a risk    of loss      to
the contractor        that   is absen,t     in a true     “cost    plus”    contract.       Cf
                                                                                            -2
Sterrett    v. Bell,     supra.

       Your   other    cvo questioniwe:

                  (4) Hay the untversity    have  some early                    con-
              struction vork done on 8 project   and pay for                  it on
              s time and materials bas3sl
Houorabla    Lloyd        Cries      -    Psge     II (~~-2132)

                    (5)        gay    the       university         negotiate          some of      the
             work         on     a   project         with        the   general           contractor
             without           taking      bids     cm    that    portfon        of   the work?

      Both these queatioua    muat be lnauered              the negative    in
                                                                            if a “time
and   materials basis”    means   m   open-ended          arrangement     for  pricing
uterlala        and labor,   see L.aVeXe
                            ---            v. DeLuca.    180 W.Y.Zd 710 (Wls.     1970)
(defining        “time and materials      baaia”).    and if the work      is  for the
conetruction or erection            of ~wmaoent llprovementa       at an institution
of higher        education.     Sectloc. 51.907    of the Education    Code specifies
that     all    contracts for such ,uork are void unless            they   are  let    ln
reaponai       to sealed          competitive
                                          bids. “Ilandyman” work is a different
matter,      of course.

       Beyond     that,   in our ophion,                         l~k mtr a eto r
                                                                     who has      acted     as a
consultant       for    a   university      in    the   design      of    a  facility.        the
latlmstion      of    its  costs.     or  the    prepar*tlon      of    the  specificatious
therefor.     is disqualified        frcu. bidding     on the resulting         construction
contract.       The Texas      Suprem     Court.     in Texas      Riglway    Cotiasion        v.
Texas     Association       of    Steel   Importers,        Inc.,    B,         adopted       the
eaplanation      of Texas cohpati&e          bfddlng     statutes    given   in Sterrett       v.
gel15   lupra,     saying/he      purpo:545 and intent       of such statutes       were veil
stated    chars.       In part. the Sterrett          court    said    competitive     bidding
“requires    that    all bidders      be placed    upon the same plaoe        of     quality.”             l
240 S.U.Zd at 520. XC also said the purpose of such a statute;             song
other  thingi,    was to “prevent favoritism,”  and “[t]hat   there  eon be no
competitive    bidding  in a legal. aenae where thi terme   of the letting     of
the contract        prevent          or   raatrlct        coopetition.            [or]     favor      a contractor
or rterlalmsn.             . . .”         fd.

       A poteuttal     bidder    is un~ioubtedly       put in a favored       position     over
other potmtlal        bidders    if he ~drafta the specifications             of the job to
be let or participates          In the design       and cost-estimating         decisions     of
the owner.       All  bidders     are nwt placed       on the same plane of equality.
In our oploion.       such dual lctl.vitias        create   a conflict      of lnteraats      as
well.      It   is unnecessary ta determine               vhether    one employed         by   a
university      as an independent,          consultant     is within       the    meaning     of
“employee”     as used lo article        6’252-9b. V.T.C.S.       (setting     out standards
of conduct      for  state     employcurl    and officers but exacting no penalty
for ooucompllaoce        in most     c8*~5~5), for If the consultaut          is not vlthin
the   letter,     he is at least       vlthin    the spirit     of that      statute,     which
announces     a policy    that

              no state     officer      or rscate employee      shall    have                      any
              interest,        financial        or   othervise,       direct                          or
              indirect,     or engage        ia any business    transaction                           or
              profcssioual        SCtiVi’:]r    or incur    8ny obligetfon                            of
              any nature       vhich      is in substantial      conflict                       with

                                                     p.   1253
S

    Aonorable   Lloyd    Cries     -   Page   9    (Jn-ze?)

                 the proper       discharge       of     his   duties       in     the    public
                 interest.

    V.T.C.S.    art. 6252-9b.51;            sea! also
                                            ---           552(7),       2(8)(B),         8.

                                              ~~tlill4hRY

                     Although        offers for consultant              services      vith
                 respect     to COnStNCtiOII projects               ma9 be solicited
                 by   a university           t~asad    upon     a general        project
                 description         before plans        and specifications             are
                 emplate,       bids    for mnattuction           of the’project        ma9
                 not     be       so     solkited.           Consultant         setvices
                 contrscts        ma9 be        awarded      upon     negotiated        fee
                 proposals      made with rafarenti             to a percentage          of
                 projected         or     lst;imated       &aats.       but     building
                 contracts       for    conatructlon       of a facility         must he
                 let    by     the     unlv~s:ralty     upon       coopetitlve        bids
                 received     by its       gcverning      body.      Contracts      for    a
                 guaranteed        maxim        price    can be the         subject      of
                 such competitive          bids    so long as the cootfngiacies
                 upoo whicfrthe          maximum price         vi11 be reduced          sre
                 properly       speclf iei,      and   advertised        to    potential
                 bidders.          But     thR! constNction             of permanent
                 improvements           at      an    lnatitution           of     higher
                 education,        or a plxtion        of such work, cannot be
                 undertaken       on a “ttne       and utari8la”         or negotiated
                 basis,     and a comultant             for     the university          who
                 participates         in the design,          estimation       of costs).
                 or preparation         of Che plans        and specification         of a
                 project is           dlsqualifled         from bidding          on     the
                 resulting      conatructiou        contrmt       tharefor.

                                                               JIM          HATTOX
                                                               Attorney      General          of   Texas

    TOMGREEN
    First Assistant      Attorney       Gewxal

    DAVID R.    RICHARDS
    Executive    Assistant       Attorney      General

    RICK CILPIN
    Chairman,  Opinion       Committee
Honorable     Lloyd      Ctirn   -   Pas8   10   (311-282)

Prepared     by      Bruce   Youngblood
Amistant          Attorney    Gener81

APPROVED:
OPINIOtiCmMITTEE

Rick    Gilpin,      Chairmau
Colin    Car&
Suw      Garrium
Tony Guillory
Jim Hoellinger
Jennifer   Riggs
Bruce Youn8blood

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