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               THE      ATTOWXEY        GENERAL
                           OF   TEXAS


                            June 24, 1987




    Mr. Marvin 3. Titaman                Opinion No. m-726
    Executive Director
    Texas Surplus Property Agency        Re: Whether competitive bidding
    P. 0. Box 8120                       statutes   apply   to   property
    San Antonio, Texas   78208           obtained by a county through the
                                         Texas Surplus Property Agency

    Dear Mr. Titzman:

         On behalf of the Texas Surplus Property Agency, you seek advice
    about the distribution of surplus federal property to counties. The
    Texas Surplus Property Agency was established by article 6252-6b,
    V.T.C.S. Its purpose is explained in Attorney General Opinion JM-417
    (1985):

P                The Federal Property and Administrative Service
              Act of 1949, as amended, provides that surplus
              personal property under the control of an
              executive agency of the federal government may be
              transferred to a state agency which is designated
              by state law as the agency responsible for the
              fair and equitable distribution of the property in
              accordance with the provisions of the act. see 40
              U.S.C. $484(j). Section 484(j)(4)(D) allowsthe
              state agency to assess and collect service charges
              from participating recipients to cover costs of
              the state agency's activities. The federal act
              requires such charges to be based on services
              performed by the state agency.

                 The Texas Legislature created and designated
              the Texas Surplus Property Agency as the state
              agency for the purpose of the Federal Property and
              Administrative Services Act of 1949. See V.T.C.S.
              art. 6252-6b, 94. Its primary funczn       is the
              acquisitiou, warehousing. and distribution of
              surplus federal personal property to entities that
              qualify under the federal act.

    Attorney General Opinion JM-417 (1985).




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Mr. Marvin J. Titman   - Page 2   (JM-726)




     The Texas Surplus Property Agency may distribute surplus property
to political subdivisions. 40 U.S.C. 5484(j)(4)(B), (j)(5). The agency
may assess a service and handling charge or fee for the acquisition,
warehousing, distribution, or transfer by the agency and, in the case
of real property, such charges and fees shall be limited to the
reasonable administrative costs of the agency incurred in effecting
transfer. V.T.C.S. art. 6252-6b, 54(l). The statute authorizes no
charge to the recipient for the value of the property itself, but only
for the service and handling charges. The federal government retains
conditional title to the property. If the donee does not use it in
accordance with the conditions attached to the transactions, it must
be returned to the agency. 40 U.S.C. $484(j)(4)(C)(ii).

     You ask whether distributions of surplus property to county
governments are subject to the competitive bidding laws.

     Article 2368a.5. V.T.C.S.. the County Purchasing Act, includes
the competitive bidding provisions applicable to counties. It was
enacted in 1985 as the major part of a bill which also repealed
articles 1658, 1659, 1659a. and 1659b. V.T.C.S.. among other statutes.
Acts 1985, 69th Leg., ch. 641, 511, at 2377, 2384; 888 Attorney
General Opinion IN-535 (1982). The same session of the legislature
amended articles 1659 and 1659b, V.T.C.S., which also state competi-
tive bid requirements for counties. Acts 1985, 69th Leg., ch. 806,       -.
$2, at 2850. 2851. The amendments to articles 1659 and 1659b were
adopted first, followed by the repealer a few days later. See Acts
1985, 69th Leg., ch. 641, at 2377, 2385; ch. 806, at 2850, 2851.

     When conflicting statutes are enacted by the same session of the
legislature, the latest expression of legislative intent prevails.
State v. Easley, 404 S.W.2d 296, 300 (Tex. 1966); Ex parte de Jesus de
la O., 227 S.W.2d 212 (Tex. Grim. App. 1950); Attorney General Opinion
Nos. MW-139 (1980); B-1107 (1977). Articles 1659 and 1659b, V.T.C.S.,
were first amended to require competitive bidding for county purchases
in excess of $5,000; they were then repealed by the bill enacting
article 2368a.5, V.T.C.S., which also requires competitive bidding for
purchasing in excess of $5,000.       V.T.C.S. art. 2368a.5, 03(a).
Therefore, article 2368a.5, V.T.C.S., is the only competitive bidding
statute we need to address.

     Article 2368a.5. V.T.C.S., states as follows:

             Before a county may purchase one or more items
          under a contract that will require an expenditure
          exceeding $5,000, the commissioners court of the
          county must comply with the competitive bidding or
          competitive proposal procedures prescribed by this
          Act.

V.T.C.S. art. 2368a.5, 53(a).




                             p. 3378
Mr. Marvin J. Titzmau - Page 3    (JM-726)




     You state in your letter that the "service and handling" charges
allowed by article 6252-6b. V.T.C.S., are not to be construed as the
purchase price of the surplus property. Federal law allows your
agency to "collect service charges from participating recipients to
cover direct and reasonable indirect costs. . . ."         40 U.S.C.
5484(j)(4)(D) (emphasis added).

     The Texas Surplus Property Agency does not sell personal
property, since it is required by law to distribute it to public
entities without requiring payment for its value. You ask whether the
competitive bid provisions apply to the service and handling charges
assessed by the Texas Surplus Property Agency pursuant to section 4(l)
of article 6252-6b. V.T.C.S.

     Article 2368a.5, V.T.C.S., applies to the purchase of "one or
more items under a contract that will require an expenditure exceeding
$5,000." V.T.C.S. art. 2368a.5. §(3)(a). An "item" includes "any
service." Id. 92(3). Thus, if the purchase of "service and handling
charges" required an expenditure in excess of $5,000, the commis-
sioners court would ordinarily have to comply with the competitive
bidding or competitive proposal procedures of article 2368a.5,
V.T.C.S. We believe, however, that service and handling charges which
the county pays to the Texas Surplus Property Agency incidental to its
receipt of surplus personal property, are subject to the following
exemption to the competitive bidding requirement:

             (a) A contract for the purchase of any of the
          following items is exempt from the requirement
          established by Section 3 of this Act if the
          commissioners court by order grants the exemption:

             . . . .

             (7) an item that can be obtained from only one
          source, including: items for which competition is
          precluded because of the existence of patents,
          copyrights, secret processes, or natural mono-
          polies; films, manuscripts, or books; electric
          power, gas, water, and other utility services; and
          captive replacement parts or components for equip-
          ment .

             (b) If an item exempted under Subdivision (7)
          of Subsection (a) of this section is purchased,
          the commissioners court, after accepting a signed
          statement from the county official who makes
          purchases for the county as to the existence of
          only one source, must enter in its minutes a
          statement to that effect. (Emphasis added).




                                 p. 3379
Mr. Marvin J. Titzman - Page 4 (JM-726)




V.T.C.S. art. 2368a.5, 14(a)(7), (b).

     A county may acquire surplus property through the Texas Surplus
Property Agency only if that agency provides the services necessary to
transfer the property. Article 6252-6b. V.T.C.S., gives the county
no opportunity to negotiate with other providers for acquisition,
warehousing, or transportation services. Therefore, when the county
acquires surplus property from the Texas Surplus Property Agency, the
agency is by law the sole source for services necessary to transfer
property to the county. The county may invoke the "one source"
exemption from the competitive bidding requirement.

                                  SUMMARY

                     Articles 1659 and 1659b, V.T.C.S., were
                repealed in 1985 by the legislation enacting
                article 2368a.5, V.T.C.S., the County Purchasing
                Act. The county government may accept transfers
                of surplus personal property by the Texas Surplus
                Property Agency and pay the authorized service and
                handling charges incidental to such transfer
                without complying with the competitive bidding
                requirements of article 2368a.5, V.T.C.S. The
                payment of service and handling charges is within
                the section 4(a)(7) exemption to article 2368a.5,
                V.T.C.S.

                                             Very truly you


                                        J        A;r     /L=x
                                             JIM     MATTOX
                                             Attorney General of Texas

JACK HIGHTOWER
First Assistant Attorney General

MARY KELLER
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK   GILPIN
Chairman, Opinion Committee

Prepared by Susan L. Garrison
Assistant Attorney General




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