                              The Attorney         General of Texas

JIM MATTOX                                      April 24, 1986
Attorney General



Supreme Court Building        Mr. Mark G. Goode                   Opinion No..JM-484
P. 0. BOX 12548               Engineer-Director
Austin. TX. 70711. 2548
512/47&2501
                              State Department of Highways        KS: Whether House Bill No. 620,
Telex 9101874.1367               and Public Transportation        Acts 1985, 69th Leg., supersedes
Telecopier  51Z4750266        11th and Brazos Streets             articles 6674h and 66741, V.T.C.S.,
                              Austin, Texas   78701               which requires competitive bidding
714 Jackson. Suite 700
Dallas. TX. 75202.4506
                              Dear Mr. Goode:
214/742a3944
                                   On behalf of the State Department of Highways and Public Trans-
                              portation, you ask how Uouse Bill No. 620, see Acts 1985, 69th Leg.,
4824 Albena Ave., Suite 160
                              ch. 83, at 330 (codified at V.T.C.S. art. 6=),   affects competitive
El Paso. TX. 799052793
91545333464
                              bidding for certain highway construction and improvement contracts.
                              Article 601g provides, in pertinent part:

1001 Texas. Suite 700                      The state or a governmental agency of the state
HOUS,O”. TX. 77002-3111                 may not award a contract for general construction,
713n255888
                                        improvements, services, or public works projects
                                        or puxhases of supplies, materials, or equipment
606 Broadway. Suite 312                 to a nonresident bidder unless the nonresident's
Lubbock, TX. 79401.3479                 bid is lower than the lowest bid submitted by a
SOS”47-5238                             responsible Texas resident bidder by the same
                                        amount that a Texas resident bidder would be
4309 N. Tenth, Suite S                  required to underbid a nonresident bidder to
McAllen, TX. 78501-1885                 obtain a comparable contract in the state in which
51216824547                             the nonresident's principal place of business is
                                        locatec,.
200 Main Plaza. Suite 400
San Antonio. TX. 78205-2797   Sec. l(b).
5121225-4191
                                   Section l(c) of this act specifies that this provision "does not
                              apply to a contrxt involving federal funds." Accordingly, we address
An Equal OpportunityI
Affirmative Action EmplOyW
                              your questions only in the context of state and locally funded
                              projects. See gonerally 23 U.S.C. 1101 et seq.;  23 C.F.R. 10635.107,
                              635.108 (may not ,restrictcompetition on federally aided projects on
                              the basis of state residency). Moreover,    you do not ask nor do we
                              address the cons,t:ltutionalityof the statute. See generally White v.
                              Massachusetts Council of Construction Employers, Inc,, 460 U.S. 204
                              (1983)Tpheld    r; city's requirement that 50% of the workforce on
                              public works projects be city residents).




                                                        p. 2219
Mr. Mark G. Goode - Page 2   (JM-484)




     Your specific question;5are as follows:

             1. Does Douse Bill No. 620 override and thus
          take precedence over the department's specific
          competitive biddkag statutes, namely articles
          6674h. 66741, and related statutes?

               2. We have long conformed with the legal
          principle that parties submitting bids in connec-
          tion with public contracts generally do so upon
          the same or aqus.1 basis. We could hardly have
          done otherwise pa view of the holding in Texas
          Flighway Comaissian v. Texas Association of Srcal
          Importers. 372S.'r.2d 525 (Tex. 1963). We, never-
          theless, tender t'cefollowing scenario in order to
          pose our second question in the event that you
          should answer our first question in the affirma-
          tive. [Scenario ftnvolvingnegotiations to allow
          nonresidents to lower bids by the appropriate
          differential.I

     You suggest that article 601g is in conflict with articles 6674h
and 66741, V.T.C.S. ArticLe 6674h deals primarily with advertising
the opening of competitiv,e bidding -- not with the awarding of
contracts.   Consequently, you focus primarily on article 66741.
Article 66741 authorizes the rejection of any and all bids but
requires that the contract ba awarded to the "lowest bidder." Article
601g includes the word "responsible" in describing low bidders. Since
there is no qualification in article 66741 other than "lowest bidder,"
you submit that the two statutes cannot both be applied. Further, you
contend that, because article 66741 applies specifically to highway
contracts whereas article 601g is "general," article 66741 should
control. We disagree.

     Article 66741 and article 601g are not in conflict. In the first
place, you suggest that the unqualified term "lowest bidder" in
article 66741 allows the department no discretion in awarding
contracts. This is not nec:essarilythe case. The statutory grant of
discretion in article 6674,L to reject any and all bids must be read
together with the reauiramnt that the contract be awarded to the
l&est bidder. See C&bin:.      Collin County Commissioners' Court, 651
S.W.2d 55, 56, r(Tex.     Cpv. App. - Dallas 1983, no writ); A 6 A
Construction Co., Inc. v. City  of Corpus Christi, 527 S.W.2d 833, 835
(Tex. Civ. App. - Corpus rhristi 1975, no writ); see also Gwen of
Georgia, Inc. V. Shelby Cogtt, 648 F.2d 1084, 1094 n. 11 (6th Cir.
1981) (and cases cited therein); -cf. Attorney General Opinion H-1086
(1977).

     Moreover, two statutelion the ssme subject should both be given
                     Gordor.v. Lake, 356 S.W.2d 138, 139 (Tex. 1962).
effect if possible. --
Although article 66741 applies specifically to highway contracts, it



                               p. 2220
Mr. Mark G. Goode - Page 3   (JM-484)




refers in general to competitive bidding on all such contracts. In
contrast, althcugh article 6Olg applies to a broader range of public
works contracts, it refers; only to one specific aspect of awarding
such contracts.  Consequem::iy,we believe that article 601g could be
considered more specific than article 66741 and should therefore be
construed as an exception to article 66741. See Flowers v. Pecos
River Railroad Company, 1515S.W.2d 260, 263-64 (Tex. 1941); Attorney
General Opinion JM-356 (19ti5,).In any event, it is a later enactment
and will prevail to the extent of conflict.

     Your second question relates to the holding in Texas Eighway
Commission v. Texas Associ.itionof Steel Importers, Inc., 372 S.W.2d
525 (Tex. 1963). In this'-case, the Texas Supreme Court determined
that the Highway Conrmission lacked authority to require that its
construction contracts specify that materials used or furr!ishedunder
the contracts bu manufactured in the United States. The court
reasoned that the commissi~:nlacked the implied authority to include
this provision because its jaclusion would defeat the primary purpose
of the competitive bidding statutes. 372 S.W.2d at 529-30 see also
Attorney General Opinions 11-1086 (1977); O-1831 (1940). As stated z
Attorney General Opinion O-1831:

          [tlhe State Highway Department is a creature cf
          the Legislature, snd therefore has.no more power
          than that granted by its .creator.

Attorney General Opinion O.-l.831
                                followed reasoning similar to that in
Texas Highway to conclude that the highway department lacked authority
to include a provision in its construction contracts for a price
differential in favor of dcmestic cement.

     The decisions in Te'u~s Highway and Attorney General Opinion
O-1831 were founded on sG%ory     construction. In Texas Highway, the
Supreme Court emphasized that it was not dealing with legislative
restrictions but with an administrative order. 372 S.W.2d at 527.
The court stated that ":hlad the Legislature proscribed foreign
materials, we would have an entirely different question." Id. In the
instant case a statute rather than a highway department policy or rule
is at issue. Consequently, the allusion in your second question that
House Bill No. 620 is in conflict with Texas Highway is inapposite.

     As part of your second question, you present a scenario in which
nonresident bidders who submit the actual lowest bid, i.e. prior to
consideration of the differantial, would he allowed toadjust their
bids. We do not believe that article 66741 or article 601g authorizes
this type of "negotiation." Rouse Bill No. 620 creates a limited
exception to the "lowesr bidder" requirement in article 66741 by
providing for a different.ial agsicst nonresident bidders that is
equivalent tc the Ciiftze..
                          ~ia.1 against Texas bidders in that non-
rtsident bidder's state. '11~is based on the concept cf reciprocity.
It does not impliedly repeal article 66741. It does not waive the



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                                                                         I

Hr. Mark G. Goode - Page 4    (~~-484)




requirement that bidding be competitive. We believe that entering
into negotiations to allow nonresident bidders to "adjust" their bids
would defeat the purpose D:E both article 66741 and article 6Clg.
See Attorney General Opinion MN-296 (1981). As indicated, the highway
dcpartnent holds only the powers granted expressly or by necessary
implication by the Texas Legislature. Neither article 66741 or
article 601g authorizes the department to enter into the negotiatiors
in question. Of course, the department may, if it chooses to do so,
reject all the bids and rc-&ertisr.

                              SUMMARY

             Article 6674i, V.T.C.S., and House Bill No.
          620, Acts 1985, 69th Leg., ch. 83, at 330 (codi-
          fied at V.T.C.S. art. 6Olg) are not in cocflict.
          Article 6Olg crez,t.osa limited exception to the
          "lowest bidder" xquirement ir article 66741 by
          providing for a differential against conresident
          bidders that is equivalent to the differential
          against Texas biddars in that nonresident bidder's
          state.   The Sta,ce Department of Highways and
          Public Transportat:Lonmay not enter into negocia-
          tions to allow xnresident bidders to "adjust"
          their bids after the bids have been opened. The
          department may, wf course, reject all bids and
          ye-advertise.




                                         LJ+-Nh
                                             Very truly yours
                                                     .

                                         -
                                             JIM     MATTOX
                                             Attorney General of Texas

JACXHIGHTOWRR
First Assistant Attorney General

MARY KELLER
Executive Assistant Attorney General

ROBERT GRAY
Special Assistant Attorney kneral

RICK GILPIN
Chairman, Opinion Committee

Prepared by Jennifer Siggs
Assistant Attorney General




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