                   ,.




             THE        ATTORNEY      GENERAL
                           OF TEXAS


                           July 24, 1990



Honorable D. C. (Jim) Dozier          Opinion No.   JM-1189
Montgomery County Attorney
Montgomery County Courthouse          Re:   Authority of a com-
Conroe, Texas 77301                   missioners court to award
                                      l'desiqn/buildU1 contracts
Mr. Charles E. Nemir, P.E.            for construction of pub-
Executive Director                    lic   buildings   on   the
Texas State Board of                  basis of competitive bids
  Registration for Professional       and related questions
  Engineers                           (RQ-1895)
P. 0. Drawer 18329
Austin, Texas 78760

Gentlemen:

     Mr. Dozier advises us that the commissioners court of
Montgomery County is considering the construction of certain
public works through the award of so-called    '@design/build"
contracts.  His description of the design/build concept     is
"the award of a single contract     for both architectural
design and construction  to a single contractor for a lump
sum fee."

     Mr. Dozier asks the following questions:

        1. Does the proposed design/build procedure
        comply with the requirements  of applicable
        competitive bidding laws?

        2. In light of article 664-4, V.T.C.S.    the
        Professional Services Procurement Act, does
        the   inclusion   of   architectural   design
        services as a component of the design/build
        contract violate the prohibition on award of
        professional services through a competitive
        bidding process?

        3. Assuming the application of article 249a,
        section 16, V.T.C.S. must the preparation  of
        the required architectural plans and specifi-
        cations precede competitive bidding to serve
        as a foundation for bid specifications or may




                                P. 6267
Honorable D.C. (Jim) Dozier
Mr. Charles E. Nemir
Page 2   (JM-1189)



        they be produced     following award      of   a
        design/build construction contract?

      Following receipt of Mr. Dozier's  request, Mr. Nemir
asked that our opinion consider these issues as they relate
to professional   engineering services governed  by article
664-4, section 3A, V.T.C.S., and article 3271a, section
19 (4 , V.T.C.S.
     The answer to these questions lies in an examination of
the commissioners  court8s capacity to make the kind of
contract you describe.   Before we can ascertain the court's
authority,  however,   it is appropriate    to examine   de-
sign/build construction contracts in closer detail.

     The traditional design and construction services model
has been described as a linear relationship         between  the
architect, the owner of the project,       and the contractor.
Block, As the      Walls Came Tumblina       Down : Architects'
Exnanded     Liabilitv    Under       Desian-Build/Construction
Contractinq   17 John    Marshall    L.Rev. 1     (1984).   This
also describes    the contractual relationship      between  the
parties.   In the traditional tripartite      arrangement,   the
owner occupies   the middle position, contracting      with the
architect and the contractor      on  either  side.    Id.   The
relationship is represented schematically as follows:

          Architect -         Owner -Contractor

Under this arrangement, no privity of contract     developed
between the architect   and contractor.   The architect    is
described as having a fiduciary relationship with the owner
and acting as a channel of communication with the contractor
and arbitrator of any disputes. Id.

     The design/build   concept is a significant   departure
from the traditional arrangement.    Under the design/build
concept, the owner contracts with a single party for both
the design and construction of the entire project.  Id. The
single party may be either the architect/engineering   firm,
the contractor, or both acting in tandem as a joint venture.
Id.; Canterbury,   Texas Construction   Law Manual    5 6.09
(1981); Practicing    Law Institute, Construction  Contracts
m,    33-36 (1985). Viewed schematically, this is how the
relationship appears:




                                D. 6268
Honorable D.C. (Jim)   Dozier
Mr. Charles E. Nemir
Page 3   (JM-1189)




                                 wrier
                                "r

                        Design/Build Team
          Architect/Engineering firm and/or Contractor

&g Practicing Law Institute, sunra. The entity contracting
with the owner undertakes either to design and build the
entire project using the owner's financial    resources  and
present the owner with a finished product or to present  the
owner with the finished product on a l'turn-key'U basis.1
Block, suvra, at 8; see, e.a., Seaview HOSD..       Inc. v.
Medicenters of America, Inc., 570 S.W.2d 35 (Tex. Civ. APP.
- Corpus Christi 1978, no writ).

     The design/build approach to construction       contracting
offers   the  distinct   advantages    of   reducing the     time
necessary to negotiate    a contract for the entire project,
reducing the time required to complete the project,           and
affording the owner considerable flexibility in the ultimate
design of the project.       m    Grant, A New Look at De-
Sian/Build,   7 The Construction      Lawyer 3 (April 1987).
However, the design/build method also has its disadvantages.
For example, the arms-length relationship between the design
professional   and the builder      is eliminated.     Id.    The
traditional contracting method delegates various       functions
to different contractors,    creating what has been called a
"healthy tension"      and installing     a    check-and-balance
mechanism into the process. Id. By combining the design
and construction   functions, the design/build      contract   is
said to make the architect less of an agent for the owner
since he is essentially      acting in partnership     with the
builder.   Practicing Law Institute, suora.



      1. A "turn-key" project is one in which the contractor
agrees to complete the construction process to the point of
readiness for occupancy, assuming responsibility for design
of the project and for all risks, unless such responsibility
is waived or limited by contract. See Mobile Hous. Env'ts
v. Barton & Barton, 432 F.Supp. 1343, 1346 (D. Colo.  1977)  ;
Gantt v. Van der Hoek, 162 S.E.2d 267, 270 (S.C. 1968).     At
the time of occupancy, all that is required of the buyer    is
that he simply "turn the key" to open the door.            See
Glassman Const. Co. v. Marvland     CitY~ Plaza. Inc., 371
F.Supp. 1154, 1159 (D. Md. 1974).




                                     P. 6269
Honorable D.C. (Jim) Dozier
Mr. Charles E. Nemir
Page 4   (JM-1189)



     The threshhold issue underlying   each of the questions
is whether   a commissioners court may, on behalf     of the
county, enter into a construction contract that      includes
architectural services on the basis of competitive   bidding.
Because the Professional Services Procurement Act, V.T.C.S.
article 664-4, prohibits the procurement of architectural or
engineering   services   through competitive    bidding,
conclude that a commissioners    court does not possess   tFZ
authority   to award    a design/build    contract  for   the
construction of a public work on the basis of competitive
bids where architectural or engineering services comprise   a
component of the contract.

     The authority   of the commissioners    court to make
contracts on behalf of the county is subject to well
established rules. It is axiomatic that the commissioners
court's authority   is limited to that conferred      either
expressly or by necessary implication by the constitution
and laws of the state. Childress Countv v. State, 92 S.W.Zd
1011, 1016 (Tex. 1936); Jack v. State, 694 S.W.Zd 391, 397
(Tex. App. - San Antonio   1985, writ ref'd n.r.e.).    Con-
tracts made in violation of statute are void and not subject
to ratification by the commissioners court. Jack v. State,
m.

     Section 3 of the Professional Services Procurement    Act
provides the following:

        No state     agency, political     subdivision,
        county, municipality, district, authority     or
        publicly-owned utility of the State of Texas
        shall make any contract for, or engage the
        professional   services    of,   any   licensed
        physician, optometrist,    surgeon, architect,
        certified public accountant, land surveyor,
        or registered    engineer,   or any group or
        association thereof, selected on the basis of
        competitive bids submitted for such contract
        or for such services to be performed,       but
        shall select and award such contracts       and
        engage such     services on     the basis     of
        demonstrated   competence   and qualifications
        for the type of professional services to be
        performed and at fair and reasonable    prices,
        as long as professional fees are consistent
        with and not higher than the          published
       ~recommended practices and fees of the various
        applicable professional    associations and do
        not exceed the maximum provided by any state
        law.




                              P. 6270
    Honorable D.C. (Jim)   Dozier
    Mr. Charles E. Nemir
    Page 5 (JM-1189)



    Parsing this provision to its essential elements, section   3
    reads:   "No . . . county . . . shall make any contract  for,
    or engage the professional   services of, any licensed . . .
    architect . . . or registered engineer . . . selected on the
    basis of competitive bids . . . , but shall select and award
    such contracts   and engage such services on the basis of
    demonstrated competence and qualifications   for the type of
    professional services to be performed      and at fair and
    reasonable prices.".

         "Professional services" are declared by the act to   be,
    among other things,

            those within the scope of the practice     of
                . architecture    . .   or  professional
            engineering as defined b; the laws of the
            State of Texas or those performed    by any
            licensed architect    . . . or  professional
            engineer in connection with his professional
            employment or practice.

    V.T.C.S. art. 664-4, S 2.     The act thus prohibits      the
    procurement through competitive bids of services within   the
    scope of the practice  of architecture or engineering,   even
    though the contract may not call for the services       of a
    licensed architect or registered engineer.2   Contracts   for
    such services must be made in accordance with the procedures
    described in section   3A of the act. Contracts     made   in
    violation of any of the provisions of the act are declared
    void. Id. 5 4.

         A commissioners court, or for that matter any entity
    subject to article 664-4, is thus prohibited from awarding a
    contract for architectural  services, engineering  services,
    or any other service specified in the act, on the basis of
    competitive bidding.   Cf. Attorney General Opinion JM-282
    (1984) (distinguishing contracts for the construction of a
    building and contracts for the planninq of the construction
    of a building; the former are subject to competitive bidding



         2. Architectural and engineering plans and specifica-
    tions for certain public works of a specified cost must be
    prepared only by architects and engineers registered      with
    the state.   See V.T.C.S.  arts.  249a,  5 16   (architectural
    plans for public buildings   whose construction costs exceed
    $100,000): 3271a, 5 19 (engineering plans for public works
    whose cost is more than $8,000).
r




                                    P- 6271
Honorable D.C. (Jim) Dozier
Mr. Charles E. Nemir
Page 6   (JM-1189)



while the latter, which call for professional or consultant
services, are not). It follows that a commissioners    court
lacks the authority to make a contract for the construction
of public works under the "desiqn/build01 concept when the
resulting  contract  is awarded pursuant     to  competitive
bidding and includes architectural or engineering   services
as a component of the contract.   The proposed  design/build
procedure described  in Mr. Dozier's   letter is therefore
incompatible with competitive bidding laws.3

     One argument marshalled in support of the design/build
procedure is that it can result in significant savings to a
county.    Savings   is, of   course, one of the       primary
objectives   of the competitive    bidding  apparatus.     The
courts, however, have recognized that when the acquisition
of professional    services is involved, competitive   bidding
may actually be detrimental to the public interest:

        To hold that the    [competitive bidding]   act
        would require that the services of a man
        belonging to a profession such as that of the
        law, of medicine, of teaching, civil enqi-
        neerinq, or architecture   should be obtained
              only through competitive bidding would
        qi;e'a ridiculous meaning to the act    . . . .
        Such a    construction   would   require    the
        selection of attorneys, physicians,      school
        teachers, and civil engineers by competitive
        bids, the only test being the lowest bid for
        the services of such men. Such a test would
        probably be the best that could be conceived
        for obtaining the services of the least com-
        petent man . . . .



     3. You do not ask and we therefore      do not consider
whether design/build contracts may be awarded without resort
to competitive bidding because they include architectural or
other professional services as a component of the contract.
This opinion should not be read as tacit approval of such
arrangements.   s.!s suoerior  Incinerator Co. of Texas v.
Tomnkins, 37 S.W.2d 391 (Tex. Civ. App. - Dallas        1931),
aff'd,  59 S.W.2d    102 (Tex. Comm'n App.      1933, holding
approved).   Neither have you asked whether a design/build
firm which prepares   architectural or engineering plans or
specifications for a public works project may submit a bid
    the resulting    construction  contract.   See    Attorney
zzneral Opinions JM-940 (1988) ; JM-282 (1984).




                              FJ. 6272
    Honorable D.C. (Jim) Dozier
    Mr. Charles E. Nemir
    Page 7   (JM-1189)


    Hunter v. Whiteaker & Washinaton, 230 S.W. 1096, 1098  (Tex.
    Civ. App. - San Antonio     1921, writ ref'd)  (involving a
    contract for engineering services);   see also SteDhenS v.
    J.N. McCammon. Inc., 52 S.W.2d 53 (Tex. 1932) (architectural
    services): Attorney General Opinion JM-940 (1988) (services
    of a construction management consultant).

         The legislature   has incorporated this thinking    into
    competitive bidding statutes by enacting exemptions       for
    professional   services.    ee.    a     Local    Gov't  Code
    S 262.024(a)(4).   As for t:e &-&es      covered by article
    664-4, the legislature has gone a step further by expressly
    prohibiting their procurement   on the basis of competitive
    bidding. Thus, while it might be argued that competitive
    bidding statutes do not require, but at the same time do not
    forbid, contracts for architectural and engineering services
    to be     awarded   by competitive    bids,    article  664-4
    affirmatively bars counties from awarding such contracts   on
    that basis.

         Taking into account Mr. Nemir's    request, the third
    question becomes whether   section 16 of article 249a or
    section 19 of article 3271a requires the preparation      of
-   architectural or engineering   plans and specifications   in
    advance of competitive bidding to serve as a foundation  for
    bid specifications, or whether such plans may be prepared
    following the award of a design/build construction contract.

         Section 16 of article 2~49a, effective January 1,   1990,
    provides the following:

            To protect the public health, safety, and
            welfare of the citizens of the State of
            Texas, an architect registered in accordance
            with this Act must prepare the architectural
            plans and specifications   for a new building
            intended for education,   assembly, or office
            occupancy whose construction costs exceed One
            Hundred Thousand Dollars ($lOO,OOO.OO) which
            is to be constructed    by a State agency, a
            political subdivision of this State, or any
            other public entity in this State.

    Acts 1989, 71st Leg., ch. 858, at 3839.   A county  is a
    political subdivision of the state. Childress  Countv v.
    State, suora.

         Section 19 of the Texas Engineering      Practice   Act,
    V.T.C.S. article 3271a, provides the following:




                                  P. 6273
Honorable D.C. (Jim) Dozier
Mr. Charles E. Nemir
Page 8   (JM-1189)



            (a) It is unlawful   for this State or any
        of its political subdivisions, including     any
        county, city, or town, to engage         in the
        construction of any public work        involving
        professional    engineering,    where     public
        health, public welfare or public safety       is
        involved, unless the engineering      plans and
        specifications and estimates have been pre-
        pared by, and the engineering construction is
        to be executed under the direct     supervision
        of a     registered    professional    engineer.
        However nothing in this Act shall be held to
        apply to any public work wherein the con-
        templated   expenditure    for the     completed
        project   does not     exceed Eight     Thousand
        ($8,000.00) Dollars.

            (b) This Act shall not apply to any road
        maintenance or betterment work undertaken by
        the County Commissioners' Court.

     Neither section 16 of article 249a nor section 19 of
article 3271a by its terms requires the preparation       of
architectural or engineering plans and specifications for a
construction project by a licensed architect or registered
engineer prior to competitive      bidding.   It has    been
suggested that requests for proposals    can be drawn with
sufficient detail to meet the requirements of competitive
bidding  even in    the absence of     detailed   plans  and
specifications.   Alternatively,  it is argued that this
question requires the resolution of fact issues that cannot
be accomplished in an opinion of the attorney general.

     It is quite true that determination     of the adequacy
of bid specifications   in a given case will require      the
resolution  of fact issues.      Indeed, a noted authority
cautions that since it is sometimes difficult to know the
detail to which drawings and specifications must be carried,
competitive bidding requirements should be interpreted in a
manner that secures the object  for which they were intended.
10 E. McQuillen, The Law of Municipal Corporations    5 29.53
(1990 rev.).     According   to this authority,   it is not
necessary that plans and specifications show every minor
part or component of the structure to be built or product to
be purchased, only that enough detail appear as to make    it
clear what   is intended and what result    is to be accom-
plished.   Id.    Another authority,   on the other     hand,
suggests that detailed design specifications      are better
suited to construction projects than to product acquisition.
The Council of State Governments, State and Local Government




                               P-   6274
Honorable D.C. (Jim) Dozier
Mr. Charles E. Nemir
Page 9   (JM-1189)



Purchasinq 45 (3rd ed. 1989).     There are numerous  Texas
authorities which suggest that competitive bidding requires
the preparation  of detailed architectural and engineering
plans prior to the invitation of bids for a construction
project.

     In his letter Mr. Dozier cites Headlee v. Frver,    208
S.W. 213 (Tex. Civ. App. - Dallas 1918, writ dism'd), a case
involving the award of a contract for the construction of a
county courthouse based only upon *Iatentative synopsis   of
specifications and pencil sketches of floor plans and a
drawing of the building."  He quotes language from the case
describing the role of the commissioners court prior to
inviting bids for construction:

        [I]t occurs to us that they are put to the
        necessity of being prepared to present     to
        those who may appear to bid upon the contract
        some intelligent and concrete statement    of
        the work required to be done or the structure
        tom be erected as would tend to        induce
        competition, depending in every instance upon
        the character of the undertaking.

208 S.W. at 216.     The court emphasized   that without   a
precise  description  of what    the county required,     no
responsible contractor acting in good faith could bid on the
project, and thus competition would be stifled. See also 35
D. Brooks, County and Special District Law § 18.7     (Texas
Practice 1989).

     In another case, a court upheld the action of a city
board of commissioners that rescinded a contract for the
construction of an incinerator that the board concluded   had
been awarded in violation of the city's competitive   bidding
ordinance.  The specifications    for the project contained
several material   omissions,  including the size of the
building to house the incinerator, number and dimensions   of
furnaces, size of flues, chimney dimensions, and number of
stairways and doors.4    Sunerior   Incinerator Co. of Texas



     4. In fact,     the specifications    called  for   the
prospective bidder to design the incinerator and to submit
complete working drawings covering the design with the bid.
The court, responding to this provision and citing numerous
authorities, adopted a broad rule: "A competitive    bidding
                                        (Footnote Continued)




                              P. 6275
Honorable D.C. (Jim) Dozier
Mr. Charles E. Nemir
Page 10 (JM-1189)



v. Tomnkins, 37 S.W.2d 391, 396 (Tex. Civ. APP- - Dallas
1931), aff'd 59 S.W.Zd 102 (Tex. Comm'n App. 1933, holding
approved).   The court defined "specifications" as "not only
the dimensions and mode of construction, but a description
of every piece of material -- its kind, length, breadth, and
thickness -- and the manner of joining the separate parts
together." L     at 395-396.   It concluded that under these
circumstances no complete specifications   were drawn up and
adopted prior to the advertisement for bids.    Consequently,
no two prospective bidders could bid on the same character
of improvement, making competitive bidding impossible.    Id.
at 396.

     Mr. Nemir cites Attorney General Opinion JM-282 (1984),
where we were asked, among other things, whether a state
university could solicit and receive competitive bids for
the construction of permanent improvements before plans and
specifications were completed, with only a general project
description serving as a guide to potential bidders.   After
observing  a distinction    between   bids for the    actual
construction of the improvements    and offers to serve as
construction  management   consultant  for the project,   we
answered the question    in the negative.   Our answer was
followed by these remarks:

        A general project description of incomplete
        plans and specifications   will not furnish a
        sufficient basis on which competitive     bids
        for the construction    of a project can be
        received            As    noted in    Attorney
        General Opinion H-24 (1973) a procedure does
        not result in comoetitive' bids where bid
        documents leave to conjecture     requirements
        governing the bids and only by happenstance
        would all interested bidders arrive at a
        common conclusion  regarding   their meaning.
        See also Attorney    General Opinion MW-299
        (1981). (Emphasis in original.)




(Footnote Continued)
statute is fundamentally violated where the bidder is asked
to furnish plans and specifications, and an award made under
such circumstances is -void."  Sunerior  Incinerator Co. of
Texas v. Tomokins, 37 S.W.2d 391, 397 (Tex. Civ. App. -
Dallas 1931), aff'd 59 S.W.Zd 102 (Tex. Comm'n App.    1933,
holding approved).




                              P. 6276
    Honorable D.C. (Jim) Dozier
    Mr. Charles E. Nemir
    Page 11 (JM-1189)



    The opinion then quoted the following language from Sterrett
    v. Bell, 240 S.W.2d 516, 520 (Tex. Civ. App. - Dallas  1951,
    no writ), cited with approval   in Texas  Hiahwav Comm'n  v.
    Texas AssIn of Steel Imoorters, 372 S.W.Zd 525 (Tex. 1963):

            *Competitive bidding' requires due advertise-
            ment, giving opportunity to bid, and contem-
            plates a bidding on the same undertaking upon
            each of the same material   items covered by
            the contract; 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 specifica-
            tions. . . . 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
            materialman, or increase the cost of the work
            or of the materials or other items going into
            the project.
P        Admittedly, these authorities   do not hold that    final
    architectural and engineering plans and specifications     must
    be drawn in advance of competitive    bidding in every case,
    but they make it clear that a particular bidding procedure
    may be faulted for being non-competitive if detailed     plans
    and specifications are not prepared    in advance.    Further-
    more, the award of a contract on the basis of nothing more
    than a general project description     might also alter the
    duties and liabilities    of the public entity and          the
    construction contractor.  Cf. Board of Reaents of the Univ.
    of Texas v. S & G Constr. Co., 529 S.W.2d 90 (Tex. Civ. App.
    - Austin 1975, writ ref'd n.r.e.) (builder held not liable
    for delays   in completion of construction    resulting    from
    owner's failure to provide builder with "correct plans and
    specifications"   and additional   instructions  and    detail
    drawings necessary to carry out work under contract; rather,
    owner found in breach of contract, entitling       builder   to
    damages).

         Accordingly, neither section 16 of article      249a nor
    section 19 of     article   3271a    expressly  requires  the
    preparation   of architectural    and engineering   plans and
    specifications prior to the invitation of bids by a county
    for a construction contract.   But absent a provision to the
    contrary, such a requirement is implicit       in competitive
P   bidding statutes.




                                  P- 6277
Honorable D.C. (Jim) Dozier
Mr. Charles E. Nemir
Page 12 (JM-1189)



                       SUMMARY
           A commissioners    court is prohibited   by
        article   664-4,   V.T.C.S., from awarding   a
        ndesiqn/buildl' contract for the construction
        of a public work on the basis of competitive
        bidding where architectural    or engineering
        services comprise a component of the con-
        tract. Neither article 249a, section 16, nor
        article 3271a, section 19, requires        the
        preparation of architectural and engineering
        plans and specifications prior to the invita-
        tion of bids by a county for a construction
        contract.     But absent a provision  to the
        contrary, such a requirement is implicit    in
        competitive bidding statutes.    .




                                         JIM     MATTOX
                                         Attorney General of Texas

MARY KELLER
First Assistant Attorney General

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RENEA HICKS
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Steve Araqon
Assistant Attorney General




                                 P-   6278
