                                     ATTORNEY            GENERAL                    EXAS
                                                  GREG         ABBOTT




                                                     January 12,2007



    The Honorable Rodney Ellis                                     Opinion No. GA-0500
    Chair, Committee on Government             Organization
    Texas. State Senate                                            Re: A school district’s authority to delegate
    Post Office Box 12068                                          food products and supplies purchases to a food
    Austin, Texas 7871 l-2068                                      service management company (RQ-0509.GA)

    Dear Senator Ellis:

            You ask about a school district’s authority to delegate food products and supplies purchases
    to a food service management company.’

             The federal government invites entities that qualify as “school food authoritieZ2 to
    participate in national school nutrition programs, including the National School Lunch Program,
    the School Breakfast Program, and the Summer Food Program.                See generally 42 U.S.C.A.
    §§ 1751-1769i, 1773 (West 2006); 7 C.F.R. @ 210.1-.32,220.1-.21,         and 225.1-.20 (2006). These
    programs offer school food authorities grants-in-aid to help the authorities better provide reduced
    or no-cost and nutritious meals to the nation’s students. See, e.g., 42 U.S.C.A. § 1751 (West 2006)
    (Congressional declaration of policy for the School Lunch Program). Relevant to your question,
    federal rules permit school food authorities to contract with food service management companies,3
    which manage an authority’s food service operations in one or more of the authority’s schools, so
    long as the authority adheres to federal and state regulations controlling such contracts. See, e.g.,
    7 C.F.R. $210.16 (2006). Your question pertains to an opinion this office issued that discussed the



              ‘See Letter from Honorable Rodney Ellis, Chair, Committee on Government Organization, Texas State Senate,
    to Honorable Greg Abbott, Attorney General of Texas (July 10, 2006) (on file with the Opinion Committee, also
    available at http://www.oag.statetx.us) [hereinafter Request Letter].

              2A school food authority is defined by relevant federal regulations as “the governing body which is responsible
    for the administration of one or more schools; and has the legal authority to operate the Program therein or be otherwise
I
    approved by [the Food and Nutrition Service, U.S. Department of Agriculture] to operate the Program.” 7 C.F.R. 5 2 10.2
    (2006). In Texas, an independent school district is, for example, a school food authority as the district is charged with
    the “duty to govern and oversee the management of the public schools of the district.” TEX. EDUC. CODE ANN. 5
     11.15 1(b) (Vernon 2006). See ah id. 3 33 $901 (certain school districts required to participate in breakfast program).

              3“Food service management company” is defined as “a commercial enterprise or a nonprofit organization which
    is or may be contracted with by the school food authority to manage any aspect of the food school service.” 7 C.F.R.
    fj 210.2 (2006).
    The Honorable Rodney Ellis - Page 2                   (GA-0500)




    state procedures a Texas school district must follow when contracting with a food service
    management company. See Request Letter, supra note 1, at 1; Tex. Att’y Gen. Op. No. DM-14
    (1991).

              In 1991, this office considered whether it was permissible for a school district to delegate to
    a food service management company the authority to purchase food and supplies required under a
    food service management contract. See Tex. Att’y Gen. Op. No. DM-14 (1991) at 1. Specifically,
    DM-14 considered the lawfulness of “a procedure whereby the food service management company
    supervises the bidding process for the school district in conformity with section 21.90 1, but vests
    final decision-making authority in the board of trustees, ‘either by review and approval of the
    process, or by a direct decision.“’ Id. at 3-4. Examining then-applicable Education Code section
    21.901 ,4 which governed such a bidding process and vested authority over the process solely in a
    school district, this office determined that this procedure would constitute a delegation of the
    district’s authority. Id. at 4? Ultimately, the opinion concluded, such a “delegation” was not
    permitted:      .

                             In the absence of statutory authorization, a public body may
                     not delegate, surrender, or barter away statutory duties that involve
                     the exercise of judgment and discretion.         The power to make
                     purchases for a public body has been included among such
                     nondelegable powers.

    Id at 4 (citations omitted).     You question this conclusion.         See Request Letter, supra note 1, at 2.

             You note that, relying on Attorney General Opinion DM-14, the Texas Department of
    Agriculture -which    oversees Texas’s participation in the federal school nutrition programs-has
    prohibited school districts from “contracting with the food service management company to purchase
    food and supplies used in the performance of its obligations under a food service management
    agreement. ” Request Letter, supra note 1, at 1. You understand “that the statute [former Education
    Code section 21.9011 governing purchasing by school districts at the time DM-14 was issued has
    been deleted from the Education Code.” Id. at 2. You also understand “that subsequent to issuance
    of DM-14, the Texas Supreme Court in 1997 clarified the standards that courts should apply in order


              4See Act of June 2,1969,61st Leg., R.S., ch. 889,§ 1, sec. 21.901,1969 Tex. Gen. Laws 2735,2936, amended
    by Act of May 18, 1977,65th Leg., R.S., ch. 472, tj 1, 1977 Tex. Gen. Laws 1224, 1224-25, amended by Act of May
    15, 198 1, 67th Leg., R.S., ch. 259, tj 1, 1981 Tex. Gen. Laws 668,668, amended by Act of May 24, 1985,69th Leg.,
.
    R.S., ch.456,§ 1,1985 Tex. Gen. Laws 1613,1613, amendedbyActofApr.24,1989,71stLeg.,             R.S., ch. 54,§ 1,1989
    Tex. Gen. Laws 368,368-69,      amended by Act of May 23, 1989,71st Leg., R.S., ch. 814, $j 5, 1989 Tex. Gen. Laws
    3722,3725-26,     amended by Act of Aug. 25, 1991,72d Leg., 2d C.S., ch. 8, $ 3.04, 1991 Tex. Gen. Laws 137, 158,
    amended by Act of May 21, 1993,73d Leg., R.S., ch. 750, 9 1, 1993 Tex. Gen. Laws 2945,2945, amended by Act of
    May 29, 1993,73d Leg., R.S., ch. 757, 5 1, 1993 Tex. Gen. Laws 2953,2953, repealed by Act of May 27, 1995,74th
    Leg., R.S., ch. 260, $5 1,58, 1995 Tex. Gen. Laws 2207,2425-26,2498.

              ?n 1995 the Legislature reenacted and revised titles 1 and 2 of the Education Code, repealing section 29.90 1
    and replacing it with section 44.03 1. See Act of May 27, 1995,74th Leg., R.S., ch. 260, @j 1,58, 1995 Tex. Gen. Laws
    2207,2425-26,2498.
The Honorable Rodney Ellis - Page 3                   (GA-0500)




to determine whether a delegation is permissible.” Id (citing Tex. Boll Weevil Eradication Found.,
Inc. v. Lewellen, 952 S.W.2d 454 (Tex. 1997)). Thus, you ask “whether the opinion expressed in
DM-14 effectively prohibiting a food service management company from purchasing food and
supplies under a food service management contract is the proper interpretation of applicable state
law.” Id. 6

         Before addressing your precise question, we make two preliminary observations. First, we
understand your question to concern a situation in which a school district contracts with a food
service management company for that company to provide the district with food and supplies as a
part of its services. See id. at 1 (describing “fixed meal rate” contracts). The situation you describe
differs from the one in DM-14 in which a school district attempted to contract with a food service
management company for the company to use the district’s food and supplies and to supervise the
purchase of those food and supplies on the school district’s behalf. See Tex. Att’y Gen. Op. No.
DM-14 (199 1) at 3-4; see also Request Letter, supra note 1, at 1 (describing “cost reimbursement
plus fee” contracts).

         Second, DM-14 predates the line of cases represented by Boll Weevil---where the Supreme
Court expounded the delegation doctrine for delegations to private entities. The essence of the
delegation case law on which DM- 14 relied was discretion. That line of cases held that discretionary
duties statutorily entrusted to an officer or entity may not be subdelegated to another (whether public                    .
or private) in the absence of legislative authorization. See Guerra v. Rodriguez, 239 S. W.2d 9 15,
920 (Tex. Civ. App.- San Antonio 195 I, no writ). However, DM- 14 did not have the benefit of the
delegation clarifications under Boll Weevil and its progeny.           Under Boll Weevil, there is no
government delegation to a private entity unless the government is delegating the authority to set
public policy or the like. See FMProps. Operating Co. v. City ofAustin, 22 S.W.3.d 868,880 (Tex.
2000); Boll Weevil, 952 S.W.2d at 466-75.

         We begin with the issue of whether. there is a statutory prohibition on a school district
contracting with a food service management company for that company to provide food and supplies
as part of its services. In this respect, the requirements governing a district’s purchasing contract that
were formerly located at Education Code section 2 1.90 1 are now found, with certain modifications,
at Education Code. section 44.03 1. See TEX. EDUC.CODEANN. 5 44.03 1 (Vernon 2006).7 Section
44.03 1 governs all school district purchasing contracts, except for “contracts for the purchase of
produce’ or vehicle fuel, valued at $25,000 or more in the aggregate for each 12-month period.” Id.
5 44.03 1(a) (footnote added). This section provides that such contracts must provide the best value
for the district, and they must be made by either competitive bidding, competitive sealed proposal,
request for proposals, a catalogue purchase, an interlocal contract, or a design-build contract. See


        6You do not ask and we do not address whether the food service management        contracts   contemplated   here
comport with federal statutory and regulatory requirements.

        7See supra note 4.

        ‘For this opinion’s purposes, we will assume that a contract for “produce” is not identical to the purchase of
goods and services procured by means of a food service management contract.
The Honorable Rodney Ellis - Page 4             (GA-0500)




id. There is, however, nothing in this section that requires a school district to contract separately for
the underlying goods used by vendors from which the district purchases services.

         As the Legislature has not chosen by statute to require a school district to contract separately
for the underlying goods, we must next consider whether the delegation doctrine forbids such an
arrangement. The delegation doctrine, as modified by Boll weevil and its progeny after DM-14,
holds that a constitutional delegation question arises only if the state or a political subdivision
purports to grant a private entity “a public duty and the discretion to set public policy, promulgate
rules to achieve that policy, or ascertain conditions upon which existing laws will apply.” FMProps.
Operating Co., 22 S.W.3d at 880. Assuming that the district is not attempting to contract away its
authority to choose to participate in the federal programs, a school district’s contract with a food L
service management company does not confer on the company “a public duty and the discretion to
set public policy, promulgate rules to achieve that policy, or ascertain conditions upon which existing
laws will apply.” Id. Therefore, a school district’s food service management contract like you have
described does not implicate the delegation doctrine as modified by BoZZweevil and its progeny, and
the question of its constitutionality does not arise.

        We must note however, that a school district’s ability to contract with a food service
management company is still subject to the competitiveness requirement of Education Code section
44.03 1. That section still requires that a school district award such a contract in the competitive
method listed in subsection 44.03 1(a) that “provides the best value for the district.” TEX. EDUC.
CODEANN. 8 44.03 l(a) (Vernon 2006). The fact that Boll Weevil and its progeny do not require a
school district to contract separately for underlying goods does not alleviate a school district’s
responsibility under section 44.03 1 to award its contracts in a competitive manner.
The Honorab le Rodney Ellis - Page 5         (GA-0500)




                                      SUMMARY

                       School districts participating in federal school nutrition
              programs may contract with food service management companies,
              which manage the district’s food service operations in one or more of
              the district’s schools, so long as the district adheres to federal and
              state regulations controlling such contracts. School district contract
              purchases, whether for goods or services, are governed by Education
              Code section 44.031, which does not require a school district
              contracting with a company for the company’s services to contract
              separately for the underlying goods a company may use in providing            r
              its services. Further, the delegation doctrine as modified in BoZZ
               Weevil and its progeny does not require a school district to contract
              separately for underlying goods.        Thus, when a school district
              contracts competitively with a food service management company            .
              that merely permits or requires the company to provide food as &part
              of its services, a school district is not violating a statutory duty or
              delegating a governmental function under state law.




                                                         eneral of Texas



KENT C. SULLIVAN
First Assistant Attorney General

NANCY S. FULLER
Chair, Opinion Committee

Daniel C. Bradford
Assistant Attorney General, Opinion Committee
