                   Txm     ATTORNEY    GENERAL
                              OF TEXAS
                            Ausniw.T~x~u       78711
CxtAWF”RD   c. MARTXN
 *x-l-ORNEY GENEXXAL
                           February 6, 1968


      Hon. Robert S, Calvert       Opinion NO.    M-198
      Comptroller of Public
        Accounts                   Re:     Construction of Sec-
      Austin, Texas                        tion 8(C) of Article
                                           678f, Vernon's Civil
                                           Statutes, relating to
                                           the certification by
                                           the Comptroller that
                                           a contract awarded by
                                           the State is not in
                                           excess of the amount
                                           available for such
      Dear Mr. Calvert:                    project.

                  Your request for an opinion reads as follows:

                 "The Comptroller of Public Accounts
            re,spectfully requests your official opinion
            in regard to the question stated hereinbelow.

                 "Section 8(C) Article 678f of the State
            Building Constructjon Administration Act pro-
            vides pertinently as follows:

                       "'Subject to the applicable
                  provisions of other law respect-
                  ing the award of State contracts,
                  the contract or contracts shall
                  be awarded to the qualified bid-
                  der making the lowest and best
                  bid: but no contract shall be
                  awarded for a sum in excess of
                  the amount which the Comptroller
                  shall certify to be available
                  for such project . . .'

                 "Under normal administrative proce-
            dures a proposed contract award for a pub-
            lic works project is forwarded to the Comp-
            troller for certification of funds available
            therefor from State appropriations.  In the
            instance in which adequate 5tate funds have

                                   -952-
Hon. Robert S. Calvert, page 2, (M-198)



     been appropriated for the complete per-
     formance of the project the Comptroller
     certifies on the proposed contract award
     that sufficient funds are available for
     the contract, whereas in the event State
     appropriations are less than the proposed
     contract price the certification states
     the exact amount available for the project.

          "The Comptroller has received requests
     for payment of claims under construction
     contracts which were awarded:

               1) Without requesting the
          Comptroller's certifications but
          for which there were sufficient
          funds available to pay the face
          amount of the contract: and

               2)  Without requesting the
          Comptroller's certifications, but
          for which the funds available were
          insufficient to pay the face amount
          of the contract; and

               3) For an amount in excess of
          the funds which were certified to be
          available for the contract.

         "In view of the foregoing, your official
    opinion is requested whether the Comptroller
    may make progress payments or pay other claims
    pursuant to an awarded public works contract
    under each of the circumstances listed above."

          The provisions of Section 8(C) of Article
678f, Vernon's Civil Statutes, quoted in your request,
were construed in Attorney General's Opinion No. M-177
to authorize the Comptroller to execute certifications
provided therein when the amount of State funds appro-
priated by the Legislature, together with the amount of
Federal funds approved and obligated for such project,
is equal to or exceeds the amount of the awarded con-
tract.  It was further held that State funds may be ex-
pended by progress payments until the appropriation has
been exhausted.

          Under the facts stated in your first question,


                           -953-
Hon. Robert S. Calvert, page 3, (M-198)



there were sufficient funds available to pay the amount
of the award, therefore, such award created an obliga-
tion binding on the State and you are authorized to make
payment of claims under such contract.  However, as good
business practice, the Comptroller's certificate that
sufficient funds are available, should be secured before
the contract is awarded.

           Under the facts stated in your second and third
questions, funds available for such projects were insuf-
ficient to pay the amount of the award. Section 8(C) of
Article 678f, Vernon's Civil Statutes, specifically pro-
vides, ". . . no contract shall be awarded for a sum in
excess of the amount which the Comptroller shall certify
to be available for such project, . . . .(I Thus, where
an award is made in excess of the amount available to
pay the award, such award is made in violation of Sec-
tion 8(C) of Article 678f and does not create an Obliga-
tion binding on the State. Fort Worth Cavalry Club v.
Sheppard, 125 Tex. 339, 83 S.W.Zd 660 (1935); State v.
$.$G$n:vRo;",l;;~L3;3;          y;,;"Le:";i;.;,;     y&
                               . .          .    . .
error ref.); State v. Peilstein, 79 S.W.2d 143 (Tex.Civ.'
App. 1935, error dism.); State v. Steck Co., 236 S.W.2d
866 (Tex.Civ.App. 1951, error ref.).

          Therefore, in making a contract governed by
the provisions of Section 8(C) of Article 678f, Vernon's
Civil Statutes, the officers of the State can exercise
only those powers conferred on them by law; and if the
award is made in excess of the amount available for such
project, no legal liability exists against the State.
See authorities cited above. Under such circumstances,
the Comptroller is not authorized to make progress pay-
ments by reason of the unenforceable contract.

                    SUMMARY
                    -------
          When an award for construction projects
     is made pursuant to the provisions of Section
     8(C) of Article 678f, Vernon's Civil Statutes,
     and such award is not in excess of the amount
     available for such project, progress payments
     for payment of claims under such construction
     contracts may be paid. Whenever an award for
     construction projects governed by the provi-
     sions of Section 8(C) of Article 678f, Vernon's
     Civil Statutes, is made for a sum in excess of

                              -954-
                                                       .   .




Hon. Robert S. Calvert, page 4, (M-198)



     the amount available for such project, such
     award does not create a legal obligation
     against the State and the Comptroller is not
     authorized to issue warrants in payment of
     claims under such unenforceable contract.

                                truly yours,


                                   2-h   ZZZ
                                ORD C. MARTIN
                                ney General of Texas

Prepared by John Reeves
Assistant Attorney General

APPROVED:
OPINION COMMITTEE

Hawthorne Phillips, Chairman
Kerns Taylor, Co-Chairman
W. V. Geppert
W. 0. Shultz
Neil Williams
James McCoy

EXECUTIVE ASSISTANT
A. J. Carubbi, Jr.




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