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                       The Attorney                   General of Texas
                                                                     .
                                              March    9,   1981



                    Honorable Mike Driscoll                        Opinion No. MW-299      ’
                    Harris County Attorney
                    1001 Preston, Suite 634                        Re: Authority of a county to teke
                    Houston, Texas 77002                           a bid which provides for escalation
                                                                   in costs

                    Dear Mr. Driscoll:

                           The Commissioners Court of Harris County is required by law to award
                    certain contracts  after taking competitive bids. See, c.c., V.TE.S. arts.
                    1658, 1659, 1659a, 2358-6L 2368a. Contracts must generally be awarded to
                    the lowest and best bidder. You advise that instead of stating a lump sum
                    bid in the bid form furnished by the county, some bidders insert an amcunt
                    but also include an escalation clause which provides for price, increeses
                    based upon increases in their costs. We understand that the bid form which
                    Harris County uses does not invite the use of escalation clauses. You have
                    asked the following questions:

                                 L   Is Harris County authorized to accept a bid which
                                     the bidder has qualified to provide for escalation
                                     in costs during the period of the contract, if the
                                     total bid can be caloulatedt

                                 2. Is Harris County authorized to accept a bid which
                                    the bidder has qualified to provide for escalation
                                    in costs during tha period of the contract, if the
                                    total bid can not be calculated?

                                 3. Is Harris County authorized to accept an alternate
                                    bid not based on the specifications?

                            In Texas Highway Commission v. Texas Association of Steel Importers.
                     Inc., 372 S.W. 26 525, 527 (Tex. L863), the Texas Supreme Court, quotmg
                     %      Sterrett v. BelL 240 S.W. 2d 516, 520 (Tex. Civ. App. - Dallas 1951. no
                     writ), observed thet competitive bidding requires:

                                  due advertisement,     giving opportunity  to bid, and
                                  contemplates   a bidding on the seme undertaking upon
                                  each of the same material items covered by the
                                  contract;   upon the sB.me thing. It requires that all
Honorable   hIike Driscoll   - Page Two




            bidders be placed upon the same plane of equality end that they
            each bid upon the same terms and conditions involved in all the
            items and parts of the contract, and that the proposal specify as
            to all bids the same, or subs’tantially similar specifications.  Its
            purpose is to stimulate      competition,  prevent favoritism   and
            secure the best work and materials at the lowest practicable
            price. . . . There can be no competitive bidding in a legal sense
            where the terms of the letting of the contract prevent or
            restrict   competition,  favor a contrector    or materialman,    or
             increese the cost of the work or of the meteriek or other items
            going in to the project.

See ako Attorney     General Opinion H-24 (1973).

       In light of the views expressed in the foregoing quotation, we think it is readily
apparent that the commissioners court may not accept a bid which is not based upon
advertised specifications.     To do so would be to violate a fundamental tenet of the
competitive    bidding process, which is that bidders must have an opportunity to bid cn
equai terms and to have their bids judged according to the same’standards.          Further.
the requirement     that bids be evaluated in accordance with the same criteria must be
observed if the commissioners        court is to fulfill its statutory  mandate to award
contracts to the lowest and best bidder. This requirement cannot be satisfied when a
bid is qualified in a manner not contemplated     by the bid invitation and specifications,
i&,. when it is not based upon the criteria by which all bidders are given to understand
 their bids will be judged.

        We therefore conclude that Harris County may not accept a bid which contains
 an escalation     clause when such clauses are not mentioned        in the advertised
 specifications.    We do not address the question of whether the invited use of any
 particular escalation clause would be permissible,  Accordingly, based upon the facts
 you have submitted, we anewer your questions in the negative.

                                          SUMMARY

                  The Commissioners Court of Harris County is not authorized
              to accept a bid which is not based upon advertised specifica-
              tions. Because the bid form which Harris Camty uses does not
              mention escalation clauses, the commissioners court may not
              accept a bid which contains an escalation clause, regardless of
             ’whether the total bid can be calculated.




                                              (rMARK       WHITE
                                                 Attorney General of Texas
                   .,
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                   Itonornble Mike Driscoll   - Page Three




                   JOHS   W. FAINTER. JR.
                   First Asslstent Attorney General

                    RICHARD E. GRAY III                                 .
                    Executive Assistant Attorney   General

                    Prepared by Jon Bible
                    Assistant Attorney General

                    APPROVED:
                    OPINION COMMITTEE

                    Susan L. Garrison, Chairman
                    James Allison
                    Jon Bible
                    Rick Gilpin
                    Bruce Youngblood




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