Honorable Wm. J. Burke                   Opinion   No. ~~-158
Executive   Director
State Board of Control                   RE:   In building    projects
Austin,   Texas                                which are designed        by
                                               the Board for Texas
                                               State Hospitals      and
                                               Special   Schools,     is
                                               the exclusive      autho-
                                               rity and duty to enter
                                               into the building        con-
                                               tract   on behalf    of the
                                               State vested in the
                                               Hospital   Board or in
                                               the Board of Control?
Dear Mr. Burke:                                And related    questions.

         You have requested     an opinion     on the   following
questions:

              1.   In building   projects    which are designed     by
        the Board for Texas State Hospitals          and Special
        Schools,   is the exclusive     authority    and duty to
        enter into the building      contract     on behalf  of the
        State vested   in the Hospital      Board or in the Board
        of Control?

               2. In building     projects    which are designed
        by the Board for Texas State Hospitals          and Special
        Schools,  is   the exclusive     authority  and  duty to
        prescribe   (a) the forms and (b) the conditions
        upon which bids are submitted         to the State vested
        in the Hospital    Board or in the Board of Control?

                3. In the event that the answer ~to either
        of the above questions        is that such authority       and
        duty are vested       in the Hospital     Board, does the
        Board of Control       have the authority      to disapprove
        and reject     the contracts     entered   into by the Hos-
        pital    Board in the event it is made to appear to
        the Board of Control        that the bid forms and con-
        ditions    prescribed    and used by the Hospital       Board
        in arriving     at the contract      price result    in a
        substantial     unnecessary     expense to the State?
Hon. Wm. J . Burke,     page   2    (~~-158)


               4. Do documents,      such as the invitation  to
         bid,  the instructions    to bidders  and the bid pro-
         posal form, constitute     a part of the contract   or
         agreement,   or do they constitute    a part of the
         plans and specifications?

         These    questions   are propounded in view of Article
7047c-1 Sec.      3(d) V.A.C.S.   a part of Chapter 1, Acts of
First    Called   Session   51st Legislature (195a) reading   as
follows:

                 “Sec.   3. (d)    All founds credited     to the
         State Hospitals       and Special     Schools  Building
         Fund under this Act are hereby a
         the Board for Texas State
         Schools     for the purpose of constructing,          repair-
          ing and equipping       such buildings     as in the opinion
         of the Board are necessary           to the proper care of
         those committed or to be committed to such hospi-
         tals and special        schools   according   to the law.
          Provided,     however,    the fees paid to an architect
         shall not exceed six per cent (68) for the plans,
         soecifications       and suoervision      of said buildinn
         and all contracts        made fork and the final      accepiance
          in connection     with such construction        other than the
         plans
         review and approval         of the Board of Control.”
         -(Emphasis supplied)

        The Hospital  Board was created    by House Bill   No.
1 page 588, Acts 1949 Regular Session      (Article   3174b V.A.C.S.)
and Section  2 of said Act, with reference       to the powers
of the Hospital   Board, provides  as foilows:

         “Sec.    2. * * * * * * Effective      September i, 1949,
         the contr 01 and management of, and all rights ,
         privileges,      powers, and duties     incioent     thereto
         including     building,   design and construction          of
         the Texas State Hospitals         and Special     Schools
         which are now vested in and exercised             by the
         State Board of Control        shall  be transferred        to,
         vested    in, and exercised     by the Board for Texas
         State Hospitals       and Special   Schools.      Pr ov ided,
         however,     that the Board of Control        shall   contfnue
         to handle purchases       for such institutions         In the
         same manner as they do for other State agencies.”

        Attention   is also called   to the fact that the above
Act creating    the State Hospital   Board was approved by the
Governor and became effective      on June 4, 1949.   At the
..-   h.




           Hon. Wm. J.      Burke,     page 3     (w-158)

           same    Legislature       there   was passed    Senate     Bill   97, Chapter
           323,    Acts of the       5lst Legislature,      Regular      Sesslom,   ,page
           606,    an amendment       to Articlewhich specifically
                                                   681,            pro-
           vided that the Board of Control    should design all public
           buildings   except those of the Prison System and the
           Hospital  Board.   This was approved by the Governor and
           became effective   June 7, 1949.

                     It is clear that          under the two statutes   above men-
           tioned,     the Legislature         intended  to deprive the Board of
           Control     of all power or         duty with reference   to the con-
           struction      of buildings       for hospitals.

                    At the outset,   attention    is called    to the fact that
           this statute     (7047c-1) was originally      only a very small
           portion    of a tax statute,   to-wit,   Acts 1950,     51st Legis-
           lature,    1st Called Session,    Chapter 1, page 1, which was
           an amendment to a previous       tax statute    originally    enacted
           in 1935 and amended practically        at each session      of the
           Legislature    .

                   This 1950 statute,  which contains  Article   7047c-1
           amended Section  3 of the 1935 act and incidentally     pro-
           vides that it is amended “so as to hereafter      and until
           August  31, 1957, reads as follows”.    It then divides
           Section  3 into seven paragraphs.
                  We do not believe   that the Board of Control  has
           any authority  other than to review and pass upon the con-
           tracts  after they have been completely  entered  into by
           the Hospital  Board.

                      Itis our opinion      that   the Legislature        in enacting
           the    above Act (V.A.C.S.      Art. 3174b) creating         the Board
           for State Hospitals        and Special     Schools    transferred      from
           the Board of Control        to the Texas Board for State Hospi-
           tals and Special       Schools   (hereinafter      referred      to as
           Hospital    Board),    the responsibility       land power to negotiate,
           prescribe    the form of bids and make contracts               for the
           buildin     and construction       of State Hospitals        and Special
           3Z7iGZE      Section     2 of the Act expressly         states    that
           buildin      desi n and construction          of Texas State Hospitals
           and Spefiadols             are included     in the rights,I~;;i~;~s
           and duties     transferred     to the Hospital      Board.
           opinion   that the Legislature        having expressly         transferred
           to the Hospital       Board the responsibility          and duty of build-
           ing, designing      and constructing       State Hospitals         and Special
           Schools,    also trans,ferred      to and ,invested in the Hospital
           Board the power necessary          to carry out such responsibilities
           and duties.

                      Section   2 of     the Act also     expressly      provides   that
                                                                            .     -.   .“.




Hon. Wm. J.     Burke,   page   4     (WW-158)


the Board of Control        shall    continue    to "handle     purchases"
for the State Hospitals         and Special       Schools.    It is our
opinion    that the word 'purchasing"           as used in the section
and read in context        with the other words and phrases of the
section,    does not include       the responsibility        and power to
                                                     of Siate Hospitals
                                                    scribe   the form of
bids or the manner of bidding            for smuilding           contracts.
The Legislature      in Section      2 spells     out building,     design
and construction      as rights,      privileges     and duties     separate
from purchasing,      and it transfers         the building,     design,    and
construction    rights,     privileges      and duties     to the Hospital
Board and retains       the "handling       of purchases"     in the Board
of Control.      It is our opinion        that the power to make con-
tracts   necessarily     follows     the responsibility       of building
and constructing      the State Hospitals          and Special    Schools.

          Therefore,    in answer to questions     1 and 2, it is
our  opinion    that in building    projects    which are designed
by the Board of Texas State Hospitals           and Special   Schools,
the exclusive      duty and authority    to enter into building
contracts    on behalf    of the State is vested in the Texas
Board for State Hospitals        and Special    Schools,   and the
exclusive    duty and authority     to prescribe     the forms and
conditions     upon which bids for such building         and construc-
tion contracts       are to be submitted     to the State are vested
in the Board for Texas State Hospitals           and Special    Schools.

          With reference     to building     construction     contracts
made by the Hospital        Board before     August   31, 1957, it is
our opinion     that subsection     (d) of Section       3 of Article
7047c-1 as amended, vests         in the Board of Control         the
authority     to review and approve such contracts.              Upon a
fact finding     by the Board of Control         that such contract
results    in a substantial      unnecessary     or unreasonable~ex-
pense to the State, the Board of Control              has the authority
to disapprove      such contract.      However, the Board of Control
cannot arbitrarily       disapprove    the contract.        (Attorney
General's     Opinion V-1462,     1952).     It is our opinion       that
the Board of Control        must review each contract,          and before
it can disapprove       the contract,     it must make a finding
that the contract       results   in an unreasonable        or a sub-
stantial     unnecessary    expense to the State,         or base its
disapproval     on some other legal       gr,ound.

        Therefore,   in answer to question       3, it is our
opinion  that the Board of Control       has the authority     to
review and disapprove    a building     contract   made before
August  31, 1957 by the Hospital      Board, if the Board of
Control  on review of such contract       makes a finding    as
above set out.     However, after    August   31, 1957,  the
Board of Control    has no authority     to review and disapprove
Hon. Wm. J.        Burke,   page   5,     (~~-158)



building        contracts   entered     into   by the Hospital   Board.

        We answer question    number 4 by saying that                  in our
opinion   such documents as the invitation         to bid,           bid pro-
posals,   instructions  to bidders , 8re independent                 docu-
ments and do not constitute      a part of the contract
agreement unless expressly      incorporated      into the           contract
agreement.     The documents although     closely     related           to
the plans and specifications       do not constitute        a        part
of the plans and specifications.         Such documents              are
independent.

           We again call attention           to the provision       of the
 1950 Act (V.A.C.S.         7047c-1)    and Section       2 thereof    which
 states    that the cigarette         tax revenue allocation         to the
Hospital     Board Building        Fund shall     terminate     August 31,
1957.      The  55th   Legislature       of  1957   did  not   reenact   the
 cigarette     tax revenue allocation          to the Hospital       Board,
not did it reenact          the provisions       giving the Board of
 Control    authority     to review and approve building             construc-
 tion contracts       made by the Hospital          Board.     It is, there-
 fore,   our opinion      that all building         construction     contracts
made before      August 31, 1957 by the Hospital               Board, pursuant
to Article      7047c-1,     as amended, are subject           to review and
approval     by the Board of Control.             However, after       August 31,  _
 1957, the authority         of the Board of Control           to review and
approve building         contracts     of the State Hospital         Board
terminates      and building       contracts    made by the Hospital         Board
are not subject        to revie*l and approval          by the Board of Control.
                                      SUMMARY
           1.     In building    projects   which are designed
                  for Texas State Hospitals       and Special
                  Schools,   the exclusive    authority  and
                  duty to enter into the building       con-
                  tracts   is vested    in the Hospital  Board.

           2.     In building     projects    which are designed
                  for Texas State Hospitals         and Special
                  Schools,    the exclusive     authority  and
                  duty to prescribe        the forma and condi-
                  tions    upon which bids are submitted        is
                  vested    in the Hospital     Board.

           3.     The Board of Control      cannot arbitrarily
                  disapprove     a contract  made by the Hos-
                  pital   Board, and before    disapproving     the
                  contract,    it must make'a finding      that the
                  contract   results    in an unreasonable     or a
Hon. Wm. J.     Burke,   page 6,     (WW-158)


               substantial  unnecessary  expense to the
               State or base its disapproval    on some
               other legal grounds.

          4.   Documents such as the invitation     to bid,
               bid proposal,   instructions  to bidders   do
               not constitute   a part of the contract    agree-
               ment and do not constitute    a part of the
               plans and specifications.

          5.   After August 31, 1957, the authority          of
               the Board of Control        to review and approve
               building    contracts    under Article    7C47C-1
               Sec. 3(d) terminates,        and building   con-
               tracts   with the Hospital      Board thereafter
               are not subject       to review and approval     by
               the Board of Control.

                                      Yours   very     truly,

                                      WILL WILSON
                                      Attorney General          of   Texas


                                      BY

APPROVED:                                  Assistant
OPINION COMMITTEE:
James N. Ludlum, Chairman
Arthur Sandlin
E. M. DeGeurin
Richard B. Stone
B. H. Timmins, Jr.

REVIEWEDFOR THE
ATTORNEYGENERAL
By Geo.    P. Blackburn

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