                                   The Attorney         General of Texas

JIM MAlTOX                     ,                      llarch24, 1986
AttorneyGeneral


Supreme Cowl Building              Mr. James Ken Newman                   Opinion   No. ~~-457
P. 0. BOX 12548
                                   Chairman
Austin. TX. 78711. 2548
5121475-2501
                                   Texas State Board of Registration      Re: Validity of proposed dis-
Telex 91olB74.1387                    for Professioni: Engineers          ciplinary rule of the Board of
Telecopier   512I475-0266          P. 0. Drawer 1832')                    Registration for Professional
                                   Austin, Texas   7:3760                 Engineers
714 Jackson. Suite 700
Dallas. TX. 75202-4506             Dear Mr. Newman:
214il428944
                                        You wish to !mow whether a proposed amendment to the Board of
                                   Registration for Professional Engineers Rule 131.151, revising
4B24 Alberta Ave.. Suite 180
El Paso, TX. 799052793
                                   Disciplinary Rule 5.4, is within the authority of the board to
9154533.3484                       promulgate. We conclude that it is not.

                                        Disciplinary :Rule5.4 presently reads as follows:
1001 Texas, Suite 700
Houston, TX. 77002-3111
                                                (iv) DR 5.4.. It shall be a violation of the
713/223-5888
                                             Texas Engineering Practice Act for a registrant to
                                             submit or request a competitive bid to perform
806 Broadway, Suite 312                      engineering services for any state agency, poli-
Lubbock. TX. 79401.3479                      tical stibdivision,county, municipality, district,
806/747-5238                                 authority, or publicly owned utility of the State
                                             of Texas, or for any agency of dther entity of the
4309 N. Tenth. Suite B                       federal government, when the procurement of such
McAllan, TX. 78501-1685                      professional services is in violation of the
5121882.4547                                 state's Professional Services Procurement -Act or
                                             the Federal Property and Administrative Services
200 Main Plaza. Suite 400
                                             Act of 1949, as amended, respectively.
San Antonio. TX. 78205-2797
51212254191                                     (I) For purposes of this disciplinary rule,
                                             the board has adopted the Supreme Court of Texas'
                                             definition of competitive bidding, which in part
An Equal Opportunity/
Affirmative Action Employer
                                             is as follows:

                                                Compe,titive bidding . . .    contemplates   a
                                                bidiiing on the same undertaking upon each of
                                                the same material items covered by the con-
                                                tract.;upon the same thing. It requires that
                                                all bidders be placed upon the same plane of
                                                equality and that they each bid upon the same
                                                terns and conditions involved in all the items
                                                and parts of the contract, and that the



                                                                p. 2082
Mr. James Ken Nwman   - Pa&   2   (J&457)'* )




             proposal specify as to all bids the same, or
             substantially s.imilarspecifications.

          (Texas Eighway C~~wission v. Texas Association of
          Steel Importers: Inc., 372 S.W.2D 525, Texas
          1963); however,                                *

             (II) the engineer shall not be considered in
          violation of the Act       in cases where his
          engineering serr:lces may legally be offered,
          furnished, or plxformed as an integral part of
          research and development programs, construction
          projects, manuflxtured products, processes, or
          devices, which are to be offered, performed,
          supplied, or obts:Lnedon the basis of competitive
          bids.

The proposed amendment reads as follows:

             (iv) DR 5.4. As public policy, competitive
          bidding for professional engineering services for
          public works is ,prohibited by state and federal
          law, and particip~ationin such bidding activities
          by any engineer registered in this state shall be
          considered a.vi~~:lationof the Texas Engineering
          Practice Act.

             I. Where there is a competitive situation in
          the procurement of      professional engineering
          services by aqy state agency. political sub-
          division,    coulty,    municipality,    district,
          authority, or publicly owned utility of the State
          of Texas, or by any agency or other entity of the
          federal govermect,     all registered engineers
          involved will sseure that such professional
          contracts are awarded in conformance with the
         .approprlate procurement laws; that selection of
          the best engineer for the contract is sought and
          made on the bas.ls of demonstrated competence and
          overall qualifications, subject to negotiation of
          a fair and reescoable fee; that only after selec-
          tion by the pub:.icagency on the basis of demon-
          strated compete& and overall qualifications will
          the engineer pr&de    proposed or estimnted costs
          for that project-and enter into negotiations with
          the public agene; concerning a fair and reasonable
          fee for the eng$eering services to be rendered;
          and that if an zpeement cannot be reached on the
          amount of a fair and reasonable fee, the engineer
          shall terminate-negotiations and withdraw from
          consideration, ;Ild the next best engineer max



                                  p. 2083
Mr. James Ken Newman - Page :3 (JM-457)




          iwarded.   (Emphasis added).

     Essentially the proposed amendment to Disciplinary Rule 5.4 would
require a bifurcated process whenever a professional engineer is to be
selected to work on a publLc project. The first stage of the process
involves selection of an er.gineerby the public agency on the.basis of
"demonstrated skill and overall qualifications"; only after selection
may the engineer provide ir.formationas to proposed or estimated costs
and then enter into negotlr.tionswith the public agency.

     The process set forth in the proposed amendment substantially
tracks the process set f#orth in the federal statutes governing
selection by federal agemies    of architects and engineers. See 40
U.S.C. 55541 et seq. IO 1:h.e first stage of the federal processeach
agency head requests data from architectural and engineering firms
and, for each proposed pro:e:ct,evaluates such data, together with any
such information submitted by other firms. After discussions with no
less than three firms, ani, on the basis of established and published
criteria, the agency selecta no less than three firms deemed to be the
most highly qualified to provide the services required. In the second
stage of the process, the agency head then enters into negotiation
with the firm selected a3 the most qualified. If the agency head
cannot negotiate a satisfactory contract with the first firm selected,
he shall enter into negotj.ationswith the second firm chosen, and so
on with the third.

      Generally, the power:3 of an administrative agency are derived
entirely from legislative enactment.    Corzelius v. Railroad Commis-
sion, 182 S.W.2d 412, 415 (Tax. Civ. App. - Austin 1944, no writ);
broad      Commission v. Fact Worth & Denver City Railway Co., 161
S.W.2d 560. 561 (Tex. Civ. App. - Austin 1942, writ ref'd w.o.m.). An
agency has only such powers as are expressly conferred on it by
statute, Stauffer v. City Iof San Antonio, 344 S.W.2d 158. 160 (Tex.
1961); Railroad Commissior~v. Fort Worth h Denver City Railway Co.,
s,      together with those powers necessarily implied from powers and
duties expressly given or imposed. City of Sherman V. Public Utility
Commission~of Texas, 643 S.W.2d 681, 686 (Tex. 1983); Brown v. Humble
Oil & Refining Co., 83 S.W.2d 935, 941 (Tex. 1935). If the statutes
do not grant an agency thtspower fo do a thing, then it has no such
power. Nueces County Water Control and Improvement District v. Texas
Water Rights Commission, 4gl S.W.2d 924, 929 (Tex. Civ. App. -Austin
1972. writ ref'd n.r.e.). You contend that the board is conferred
authority to promulgate. the rule you propose by section 8(b) of
article 3271a. V.T.C.S.. the Texas Engineering Practice Act, which
contains the     following in pertinent part:       "The [bloard may



                                  p. 2084
Mr.   James Ken N-n   - Page 4 (m-457)                                   ,




promulgate rules restricting competitive bidding." We conclude for
two reasons that the above sentence confers no such authority.

     First, without specif>%ng the contours which eny rule promulgated
by the board to restrict c,ompetitivebidding may take, we conclude
that any rule so promnlgllted cannot reach a situation in which a
political subdivision of the state seeks to procure the profrssional
services of an engineer.

     The procedure by which political subdivisions of this state are
governed with respect to l:heprocurement of professional services is
article 664-4, V.T.C.S., which provides the following:

               Section 1. Th!isAct shall be known and may be
            cited as the 'Irofessioaal Services Procurement
            Act.'

               Sec. 2. For 'purposes of this Act the term
            'professional services' shall mean those within
            the scope of the practice of accounting, architec-
            ture , optometry, medicine or professional engi-
            neering as defined by the laws of the State of
            Texas or those performed by any licensed archi-
            tect, optometrist, physician, surgeon, certified
            public accountant or professional engineer in
            connection with his professional employment or
            practice.

                       No state agence, political subdivision,
               Sec. 3. --
            county,  municipality, district, authority or
            publicly-owned utility of the State of Texas shall
            make any contract for, or engage the profess-
            services of.~any-licensed physician, optometrist,
            surgeon, archite&, certified public accountsnt z
            registered engio&,    or any group or association
            thereof, selectezx   the basis of competitive bids
            submitted for su+ contract or for such services
            to be performed!-but shall select and award such
            contracts and enE:agesuch services on the basis of
            demonstrated competence and qualifications for the
            type of professIona services to be performed and
            at fair and rearznable prices, as long as profes-
            sional fees are-consistent with and ndt higher
            than the publi&:d recommended practices and fees
            of the various ~%pplicable professional associa-.
            tions and do nc; exceed the maximum provided by
            any state law.

               Sec. 4. Any and all such contracts, agreements
            or arrangements for professional services nego-
            tiated, made or entered into, directly or


                                  p. 2085
Mr. James Ken N-n   - Page 5   (JM-457)




          indirectly, by any agency or department of the
          State of Texas, county, municipality, political
          subdivision, district, authority or publicly-owned
          utility in any wily in violation of the provisions
          of this Act or any part thereof are hereby
          declared to be void as contrary to the public
          policy of this State and shall not be given effect
          or enforced by any Court of this State or by any
          of its public of:ficers or employees. (Emphasis
          added).

Section 8 of Acts 1971, Sixty-second Legislature, chapter 38. page 73,
the emergency provision of the Act, contains the following language
detailing the public policy considerations prompting the passage of
the Act:

             The fact thatf:he selection of certified public
          accountants, architects, physicians, optometrists,
          surgeons and professional engineers on the basis
          of the lowest bitiplaces a premium on incompetence
          and is the most l&sly procedure for selecting the
          least able or qt;lified and the most incompetent
          practitioner fo:; the performance of services
          vitally affecting the health, welfare and safety
          of the public .uld that; in spite of repeated
          expressions of the legislature excepting such
          professional serrices from statutes providing for
          competitive bii,ding procedures, some public
          officers contints to apply competitive bidding
          procedures to the selection of such professional
          personnel, creates an emergency of the greatest
          public importan~x to the health, safety and
          welfare of the people of Texas. . . . (Emphasis
          added)..

     BY whatever phrase the means by which political subdivisions
procure professional serxlces is called, it        is manifestly not
..
"competitive bidding." The legislature has unequivocally declared its
intent that political subdivisions of this state not procure profes-
sional services through the process commonly known as "competitive
bidding."   Any statute which confers to a licensing agency the
authority to restrict the competitive btdding practices of its
licensees could not reach itsituation in which a political subdivision
seeks the professional se,rvlces of an engineer because political
subdivisions cannot procure professional services by competitive
bidding. Section 8(b) can logically only reach those situations in
which the practice of competitive bidding is not otherwise forbidden
by law or is affirmatively permitted or required; such a rule could
z   reach a situation in which competitive bldding is affirmatively
prohibited.



                               p. 2086
Ur. James Ken Newman - Page 6   m-4571




      There is a second, ev~1 mar+ compelling, reason. Even if we were
to assume arguendo that se:lclon8(b) somehow provides authority 'for
the board to promulgate the amendment whfch you propose, we would have
to declare that the rule is in violation of Texas statutory law,
specifically article 664-4, V.T.C.S. The rulemaking power of adminis-
trative agencies does not permit the promulgation of rules which are
inconsistent with the expression of the legislature's intent ic
statutes other than those under which the rules are promulgated.
Thus, when the legtslature acts with respect to a particular matter,
the administrative agency myy not so act with respect to the marter as
to nullify the legislature's actions, even though the matter is within
the agency's regulatory f:Leld. State v. Jackson, 376 S.W.2d 341,
344-45 (Tex. 1964); -- Hartjnez v. Texas Employment Commission, 570
S.W.2d 28, 31 (Tex. Civ. QI. - Corpus Christ1 1978, no writ). In a
brief submitted to this ofMce in support of your proposed amendment,
It   is suggested that thaz proposed rule governs the conduct of
registrants of your board only, that it in no way regulates the
procedures to be employed by the political subdivisions themselves.
This suggestion is disingaluous at best. The amendment which you
propose would effectively tislpose  on state and local governments the
same procedures which the United States Congress has imposed on the
 federal government.

     The proposed rule vio:latasthe Professional Services Procurement
Act in at least two ways. First,    article 664-4, V.T.C.S.. does not
contemplate a bifurcated Iprocess; rather, the act requires that
political subdivisions musl: award contracts for professional services
in a one-step process to a professional who is selected

          on the basis of demonstrated competence and quali-
          fications for thlrtype of professional services to
          be performed and at fair and reasonable prices, as
          long 8s professiolaalfees are consistent with and
          not higher than t,h,e published recommended practices
          and fees of th<! various applicable professional
          associations and d,onot exceed the maximum provided
          by any state law.

V.T.C.S. art. 664-4, 53.   If the Texas Legislature had intended that
state agencies and local governments amploy a two-step procedure
similar to that set forth in the federal act when procuring profes-
sional services, it could have done so. But it clearly did not.
Second, the proposed ruk, would effectively eviscerate the clear
statutory requirement tha: fees be considered as a factor in the
awarding of such contracts for professional services. As we stated in
Attorney General Opinion JN-155 (1984).

             The clear terns of the Act itself do not merely
          p+rmit the consideration by the agency of the fees
          charged for certain professional services, but
          require it. Whi:lethe Act expressly prohibits the



                                p. 2087
Hr. James Ken Newman - Page 7    (Jl'f-452)




          awarding of contracts for certain     professional
          services on the ‘basis of competitive bids, it
          clearly requires an agency to award such contracts
          'on the basis oE demonstrated competence and
          quallflcatlons for the type of professional
          services to be plarformed and at fair and reason-
          able prices.' V.T.C.S. art. 664-4, 03 (emphasis
          added). Section 3 goes on to require that such
          professional fees be 'consistent with and not
          higher than the 'published recommended practices
          and fees for the various applicable professional
          associations ani. do not exceed, the maximum
          provided by any state law.'        Therefore, the
          imposition of fees must be one factor considered
          by any agency in awardingacontract        for such
          professional services;  however, it cannot be the
          a    factor to be cousidered.

     Accordingly, we conclude that the proposed amendment to
Disciplinary Rule 5.4 by the board is not authorized by the Texas
Engineering Practice Act.

                                S U-M M ARY

             The Board of Registration for Professional
          Engineers is not (conferredauthority by the Texas
          Engineering Pra,:tices Act to promulgate its
          proposed amendment to board Rule 131.151 revising
          Disciplinary Rule 5.4.




                                          JIM     HATTOX
                                          Attorney General of Texas

JACK HIGETOWFR
First Assistant Attorney Goneral

MART KZLLBR
Executive Assistant Attormy     General

 ROBERT GRAY
 Special Assistant Attorney General

 RICK GILPIN
 Chairman. Opinion Committe~z

 Prepared by Jim Moellinger
 Assistant Attorney General



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