                      May 12, 1969


Honorable William J. Burke   Opinion No. M-392
Executive Director
State Board of Control       Re:   Is the Board of Control
Sam Houston State Office           required to make an award
  Building                         based on a bid which is
Capitol Station                    low only because of a
P. 0. Drawer GG                    cash discount, which the
Austin, Texas 78711                Board finds cannot be
                                   legally earned under the
Dear Mr. Burke:                    terms of the bid proposed?
          you have requested our opinion on the following
question, to wit:
          "Is the Board of Control required to
     make an award based on a bid that is low
     only by virtue of a cash discount, when
     it has been determined by the Board of
     Control, on the basis of facts and in-
     formation available to it, that the cash
     discount may not be legally earned under
     the terms of the bid proposal?"
          The Board of Control put out bid invitations
on letterpress printing, as authorized by the State Pur-
chasing Act of 1957 (Article 664-3, V.C.S.). You state
that the Mouton Printing Company of Houston, Texas, sub-
mitted a bid containing a 5% cash discount. The Board
of Control found as a matter of fact that said cash dis-
count cannot be legally earned by the State under the bid
proposal. Since we have not been furnished all of the
facts, we are not in a position to pass upon any law ques-
tion, which might be posed therefrom, such as whether the
Board's decision amounted to an abuse of discretion.
          The Board of Control has the authority to reject
all bids, or parts of bids, when the interest of the State
will be served thereby. Article XVI, Section 21, Constitu-
tion of Texas; Article 664-3, Section 8(e), V.C.S. In
determining the lowest, responsible and best bid the Board
is required to consider those factors set out in Section
8(f) of said Article 664-3. After considering the stat-
utory and consititutional requirements, the Board of Control
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Honorable William J. Burke, page 2         (M-392)



has the discretionary right to determine the lowest, re-
sponsible and best bid.
          The Board of Control has determined that, under
the facts, the State is unable to pay for the letterpress
printing in time to earn the cash discount. Assuming
that the cash discount cannot be legally earned, the Board
shall award the contract to the bidder which it considers
to have submitted the lowest, responsible and best bid
without regard to the cash discount provision.
                            SUMMARY
                            -------
                In determining the lowest and best bid
           the Board of Control must consider the stat-
           utory requirements contained in Section 8(f)
           of Article 664-3, V.C.S. Where a cash dis-
           count is authorized in a bid proposal which
           the Board of Control determines, as a matter
           of fact, cannot be earned by the State, and
           assuming that the cash discount cannot be
           legally earned, the Board of Control shall
           award the contract to the bidder it finds
           to have submitted the lowest, responsible
           and best bid without regard to the cash dis-
           count.
                                   Ver&&uly          yours,


                                                      6?ivczzzz
                                               C. MARTIN
                                               General of     Texas
    Prepared by Jack Sparks
    Assistant Attorney General
    APPROVED:
    OPINION COMMITTEE
    Kerns Taylor, Chairman
    George Kelton, Vice-Chairman
    Z. T. Forteecue III
    Scott Garrison
    Bill Allen
    John Banks
    W. V. Geppert
    Staff Legal Assistant
                                 -1944..
