                        August 30, 1990



Honorable Hugh Parmer         Opinion No.   JM-1213
Chairman
Intergovernmental Relations   Re: Authority of a municipal-
   Committee                  ity to require health benefit
Texas State Senate            provisions to be included    in
P. 0. Box 12068               specifications  for    contract
Austin, Texas    78711        security guards    (RQ-1991)

Dear Senator Parmer:

     You ask whether    the City of Houston     can authorize
specifications   requiring   that the    city's    independent
contractors   provide  their employees with basic       health
insurance benefits.   We understand that the question relates
specifically to independent   contractors providing   security
guard services under contracts with the city.         We also
understand that the city formerly employed its own security
guards and has ceased the practice.      The city attorney's
office has rendered its opinion on the matter and concluded
that such a requirement would contravene competitive bidding
requirements.   We agree.

     Chapter 252 of the Local Government Code is the law
that governs city purchases.   With certain exceptions   that
do not appear to be relevant here, that chapter     requires
that cities with 50,000 or more inhabitants let contracts
for amounts over $10,000 by means of competitive    bidding.
Local Gov't Code 3 252.021(a).    We are advised   that the
Houston city charter contains a complementary provision.

     Competitive bidding laws are designed    to ensure that
the public   receives  "the  best work and materials   at the
lowest practicable    price." v,                   240 S.W.2d
516, 520 (Tex. Civ. App. - Dallas 1951, no writ);    see also,
a
Texas Hi hwa     omm'n-v.                           Imnorters
Inc.. 372 S.W.2d 525, 527 ITex. 19631. This end is achieved
bydisallowance   of specifications that are unrelated to the
quality or quantity of the goods or services          or that
otherwise    restrict    competition.   In   Texas     Hishwav
Commission, suvra, the court determined      that a highway
commission minute order requiring that construction material




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Honorable Hugh Parmer - Page 2     (JM-1213)




used by the commission be domestically manufactured violated
the competitive bidding statute. The court said "Matters of
quality should be fixed by quality specifications and not by
proscriptions as to localities of manufacture or fabrica-
tion." Id. at 529.

     By the same token, we believe that matters  of quality
in the provision  of security guard services should not be
fixed by requiring that contractors provide their employees
with health  insurance benefits.    Such a requirement     may
result in a work force that is less dependent on publicly
supported health care, but it has no direct relation to the
quality of security guard services.

     This office has noted that the legislature may alter
the general competitive bidding rules by adopting exceptions
or authorization that would otherwise contravene the mandate
that goods and services be purchased through unrestricted
competition.   Attorney General Opinion JM-712 (1987) (statu-
tory exception   for out-of-state   bidders found in article
601g, V.T.C.S.);   see also   Local Gov't Code 5 262.025(d)
(authority for certain political subdivisions     to require
that 25% of work be performed by bidder): Attorney    General
Opinion JM-881   (1988) (requirement that 25% of work be
performed by bidder's employees violates statute). We have
found no similar exception      for a requirement  of health
insurance benefits.

     It has been suggested that the city is a public health
agency, and in that capacity, it has the authority to enact
such an exception  to the competitive  bidding statute.   As
this office noted in Attorney General Opinion JM-712 (1987),
the state law may only be overcome by an exception   defined
by the state legislature.

                        SUMMARY

           The City of Houston may not require,
        either through an ordinance   or through  job
        specifications, that its contractors  provide
        their security guards with basic       health
        insurance benefits,.




                                      JIM     MATTOX
                                      Attorney General of Texas




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Honorable Hugh Parmer - Page 3     (JM-1213)




MARY KELLER
First Assistant Attorney General

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RENEA HICKS
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Karen C. Gladney
Assistant Attorney General




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