             E     ATI-QIKNEY            GENERAL
                      UDFTEXAS




Hon. Harry B. Keltbn, Director             Opinion No.    M-890
Texas National Guard Armory Board
West Austin Station                        Ret Questions Concerning an
Austin, Texas~ 78703                           award for the construc-
                                               tion of an armory.
Dear Mr. Kelton:

     Your request for an opinion reads as follows:

          "Bids for the construction of a National
     Guard armory in El Paso were opened on 14 June
     1971. Contractors were required to include in
     their bids an alternate to build at a location
     other than or in addition to the present site.

          "As a consequence of this procedure, the
     results of the two low bids are as follows:

          "Ponsford Construction Company
            Base bid and all alternates,
            except the new site          $299,810

            Alternate to construct at
            the new site                         1,700
                                              $301,510

          "Croom Construction Company
            Base bid and all alternates,
            except the new site                $298,780

            Alternate to construct at the
            new site                              4,750
                                               $303,530




                                -4338-
Hon. Harry B. Kelton, page 2     (M-890)

          "Since armories are constructed under the pro-
     visions of PL 783 on a'75% Federal, 25% State fund-
     ing basis, invitations to bids were advertised at
     this time to preclude the loss of Federal partici-
     pating funds for this project or other possible
     disadvantages if the Federal money is not obligated
     by the end of the Federal FY 1971, or on 30 June 1971.

          "The matter of a base and an alternate site
     as a part of the bidding consideration has been
     occasioned by a possible exchange of properties
     between the State of Texas and the Federal Govern-
     ment, the authority for which is now pending in
     the U. S. Congress.  In the event the legislation
     is effected, the new or alternate site, which is
     much more suitable, would be the one designated
     for construction of the armory. Should the legis-
     lation fail to pass, construction on the present
     site would result.

          "Your opinion is requested as follows:

           "Under the competitive bid law, does the
     Armory Board have authority to award the contract
     to the Croom Construction Company, which is lowest
     with regard to the present site and to issue a
     change order when and if Congress enacts legis-
     lation to effect an exchange of sites?

          "In the event your opinion pertaining to the
     above question is negative, can the Armory Board
     contract with the Ponsford Construction Company
     for construction of the armory at the alternate
     location when that site is not owned by the State,
     for the reason stated above, and delay issuance
     of a work order pending favorable Congressional
     action with regard to the exchange of properties?




                               -4339-
Hon. Harry B. Kelton, page 3     (M-890)


          "Since the above two questions and the bidding
     involve the unknown factors of the element of time,
     as related to a fixed bid, price, and Congressional
     action, can a valid contract be entered into with
     either of the above construction companies?
          t,....13

     In Texas Highway Commission v. Texas Association of Steel
Importers, 372 S.W.Zd 525 (Tex.Sup. 1963), the Supreme Court of
Texas cited with approval a statement in Sterrett v. Bell, 240
S.W.Zd 516, 520 (Tex.Civ.App. 19511, setting forth the require-
ments and,purposes of competitive bidding as follows:

          "'Competitive bidding' requires due advertise-
     merit, giving opportunity to bid, and contemplates
     a bidding . . . 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
     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 substantially
     similar specifications.   Its purpose is to stimu-
     late competition, prevent favoritism and secure
     the best work and materials at the lowest practicable
     price, for the best interests and benefit of the
     taxpayers and the property owners. 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 contractor or
     material man, or increase the cost of the work
     or of the materials or other items going into
     the project."

     In the instant case all bidders were placed upon the
same plane of equality and each bid upon the same terms and con-
ditions involved in all items and p,arts of the construction pro-
ject. In the invitation for bids Alternate No. 5 stated:




                               -4340-
Hon. Harry B. Kelton, page 4     (M-890)


          "Bidder must show the amount to be added to
     his total bid price for construction of the armory
     and all facilities on the alternate site as shown
     on sheets No. 2-A, 3-A and 4-A of the plans. Site
     work, utility lines extension, access roads and
     curbs only are affected. All other work remains
     unchanged."

      In determining the lowest responsible bidder the award-
ing agency is not performing a mere ministerial duty but is exer-
cising a duty which is deliberative and discretionary.   Attorney
General's Opinion V-1536 (1952). The awarding agency may take
into consideration among other things the ability, capacity,
experience, efficiency and integrity of the bidders as well as
their financial responsibility.   Attorney General's Opinion V-1565
 (1952). In exercising honest judgment the awarding agency's
determination of the lowest and best bid will not be interfered
with in the absence of fraud or an abuse of discretion.   Attorney
General's Opinion V-1565, supra.

     In view of the foregoing, your questions are answered as
follows:

     If, in the opinion of the Armory Board, it is for the best
interest and benefit of the State under the facts submitted, it
may award the contract to the Croom Construction Company, which is
lowest with regard to the present site and issue a change order
when and if Congress enacts legislation to effect an exchange of
sites.

     If. in the opinion of the Armory Board, it is for the best
interest and benefit of the State under the facts submitted, it
may award the contract to Ponsford Construction Company for
construction of the armory at the alternate location when that
site is not owned by the State and delay issuance of a work order
pending favorable Congressional action with regard to the
exchange of properties.




                               -4341-
.   .




        Hon. Harry B. Kelton, page 5    (M-890)

             In other words, it is our opinion that either contract may
        be awarded by the Armory Board in the exercise of its sound
        judgment and neither award would in our opinion constitute an
        abuse of discretion under the facts submitted.

                                   SUMMARY

                       Where the cost of construction of an
                  armory varies as to alternate sites to be
                  named by the Armory Board, which involve
                  unknown factors of the element of time as
                  related to fixed bid, price and Congressional
                  action, it is within the sound discretion of the
                  Armory Board to determine the lowest and best
                  bid as will be for ,the best interest and
                  benefit of the State.

                                         Ve   truly yours,
                                          #



                                                  General of Texas

        Prepared by John Reeves
        Assistant Attorney General

        APPROVED:
        OPINION COMMITTEE

        Kerns Taylor, Chairman
        W. E. Allen, Co-Chairman
        Pat Bailey
        Mike Stork
        R. D. Green
        Roger Tyler

        MEADE F. GRIFFIN
        Staff Legal Assistant

        ALFRED WALKER
        Executive Assistant

        NOLA WHITE'
        First Assistant
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