                           @ffice of tfp ZTlttornepQBeneral
                                        &date of Ill;exae
DAN MORALES
 Al-rORNEY
        GENERAI.                         September 23.1996

      Mr. Mike Moses                                   Opiion No. DM-4 18
      commissioner of Education
      Texas Education Agency                           Re: Whether section 44.031 of the
      1701 North Congress Avenue                       Education Code, enacted by Act of
      Austin, Texas 78701-1494                         May 27, 1995, 74th Leg., RS., ch. 260,
                                                       5 1, 1995 Tex. Sess. Law Sew. 2207,
                                                       2425-26, changes the conclusion reached
                                                       in Attorney General Qpiion DM-347
                                                       (1995) and related questions (RQ-836)



              You request this office to reconsider Attorney General Qpiion DM-347 (1995) in
      light of newly enacted section 44.031 of the Education Code, see Act of May 27. 1995.
      74th Leg., RS., ch. 260, 5 1, 1995 Tex. Sess. Law Sew. 2207, 2425-26. You also ask
      several questions regardmg the competitive biddmg process as it applies to public schools.

               In Attorney General Opinion DM-347. issued May 4.1995, this office considered
      whether section 21.901 of the Education Code, repealed by Act of May 27, 1995, 74th
      Leg., RS., ch. 260, § 58(a)(l), 1995 Tex. Sess. Laws 2207, 2498, requires a school
      district to competitively bid a contract for the purchase of insurance. Attorney General
      Opiion DM-347 (1995) at 1. Overruhng Attorney General Opinion MW-342 (1981).
      Attorney General Opiion DM-347 concluded that the purcha.w of imwance does not
      constitute the purchase of professional services exempt from competitive bidding
      requirements. Attorney General Opinion DM-347 (1995) at 5. Rather, the opinion
      determined that a contract to purchase insurance constitutes a contract to purchase
      personal property; accordingly, section 21.901 of the Education Code required a school
      district to competitively bid the purchase unless the value of the contract for one year is
      less than S25.000. Id. The opinion did not limit its conclusion to the purchase of a
      particular kind of insurance, e.g., property and casualty insurance.

              At the time this office issued Attorney General Qpiion DM-347. section 21.901
      of the Education Code provided in pertinent part as follows:
                     (a) Except as provided in this section, all contracts proposed to
                be made by any Texas public school board for the purchase of any
                personal property, except produce or vehicle t%el,shah be submitted
                to competitive bidding for each 12-month period when said property
                is vahmd at $25,000 or more, in the aggregate for each 12-month
                period.
CommissionerMikeMoses - Page 2            (DM-418)




              (b) Except as provided in Subsection (e) of this section, all
         wntracts proposed to be.made by any Texas public school board for
         the wnstructiot~ maintm        repair or renovation of soy building
         shall be submitted to competitive bidding when said contracts are
         valued at more than Sl5,OOO.. _.
             (c) Nothing in this section shall apply to fees received for
         professional services rendered, including but not limited to
         architect[‘]s fees, attorney’s fees, and f= for fiscal agents.
        Subsequent to the issuanw of Attorney General Opiion DM-347. the Seventy-
fburrh Legihme repealed section 21.901, transferring its subject matkr to section
44.031 of the Education Code and amending the substance. Section 44.031 provides in
pertinent part as follows:
             (a) Except as provided by this section, all school district
         wntracts, except wntracts for the purchase of produce or vehicle
         ibe& valued at S25,OOOor more in the aggregate for each 12-month
         paiod shall be made by the method. of the following me-k& that
         provides the best value to the district:
                 (1) wmpetitive bidding
                 (2) wmpetitke sealed proposals;

                 (3) a request for proposals;

                 (4) a catalogue purchase as provided by Subhpter B.
              Chapter 2157, Govemment Code;1

                 (5) an interlocal wntracc2 or
CommissionerMike Moses - Page 3          (DM-418)




               (6) a design/buildcontract.3

            (b) IndetexmiGngtowhomtoawardacontract,thedistrict
        may wnsidw,

               (1) the purchase pri=;
               (2) the reputation of the vendor and of the vendor’s goods
           or services;
               (3) the quality of the vendor’s goods or services;

               (4) the extent to which the goods or services meet the
           district’s need&
               (5) the vendor’s past relationship with the district;

               (6) the impact on the abii     of the district to comply with
           laws and rules relathg to historically underutilized busimsses;

              (7) the total long-m wst to the district to acquire the
           vendor’s goods or services; and




                                        P. 2318
Commissioner MikeMoses      - Page 4      (DM-418)




                (8) any other relevant factor that a private business entity
              would consider in selecting a vendor.

              (c) The state auditor may audit purchses of goods or services
          bythedistrict.
              (d) The district may adopt rules and procedures for the
          acquisition of goods or services.
              (e) To the extent of any wnflict, this section prevails over any
          other law relating to the purchasing of goods and services except a
          law reiating to wntracthg with historicallyunderutilized businesses.
               (i) This section does not apply to fees received for professional
          services rendered, includmg ar+itect’s fees, attorney’s fees, and fees
          for iiscal agents. Footnotes added.]
Thtq section 44.031 “[s]ets forth methods by which all school district contracts shall be
madq except contracts for the purchase of produce or vehicle fine&valued at S25.000 or
more in the aggregate for each 12-month period.” Senate Research Center, Bii Analysis
176. SB. 1,74th Leg., RS. (1995). Also, f&esreceived for professional services rendered
are not subject to section 44.031. Educ. ye 8 44031(f).

       We found nothing in the kgisMve history explaining the kgislature’s motivation
for al&ring schools’purchasing procedures.4 We believe the revision is consist- with




                                           P. 2319
Chnmkioner MikeMoses - Page 5               (DM-418)




oneofthcprimaryplrposesofSenatcBilll,~~,~which~to~owmorelocal
control over schools. See Education for Tomorrow: The Public Schools Reform Act of
1995 at 1 (explainingthat S.B. 1 proposes to rein in powers of State Board of Education),
2 (explaining that S.B. 1 proposes to eatabliah regional education service writers), 6
(explaining that S.B. 1 would allow local school districts, rather than State Board of
Education to adopt textbooks) (available in bii tile). We d&c+ the&ore+ that the
~wMtcdeadllocal~ldistriUto~~mOrecontrolOVerthcmeMsby~~
the adtool district awards contracts. Although section 44.031 now allows a school district
‘flao~~~to~clectthcmeaasitwillusctoawardaparticularwntract~mtheListin
 subswtion (a), the school district always must have as its goal obtaining the beat value for
 the school district. See Educ. Code 8 44.03 l(a).

       Section 44.03 1 prevails over Attorney General Opiion DM-347 to the extent the
opinion is inwnsistent with the statute. Nevertheless, section 44.031 does not a&t our
conclusion in Attorney General Opiion DM-347 that a wntract for the purchax of
insurmw is not a contract for professional services. Ser Attorney General Opinion
DM-347 (1995) at 5.

       Whether a contract for the purchase of hsumnce isaumtracttopumhasepasonal
property no longer matters in the context of section 44.03 1. Under section 44.03 1 of the
EducatioaCode,aachoolboardmuatawardaUwnhacts                 not for profk3sional aervicq
produce,or vehicle t&l in accordance with subsection (a), ao long as the value of the
w&act exceeds S24.999.99 in the aggregate for a tklve-month paiod.




                                             P. 2320
CommissionerMike Moses - Page 6            (DM-418)




         You 6rst ask whether Attorney General Opiion DM-347 precludes a school
dishict from using any   of the purchasing methods listed in section 44.031(a). Clearly, it
does not. To the extent Attorney General Opiion DM-347 wncludes that a school
district must wmpetitively bii a contract for the purchase of kunmce+ aeuion 44.031 of
tk Education Code super&es the opinion. A school district must award a wntract to
purcbse kuance, provided the value of the contract exceeds S24.999.99 in the.
aggmgate for a twelve-month petiod, using one of the methods listed in section 44.031(a).
The board of trustees of the school district must select the method %at provides the best
value to the district.” Educ. Code $44.031(a).

         You next ask whether Attorney General Opiion DM-347 precludes a school
district from executing an insurance wntract for a period longer than twelve months. It
does not. Neither section 44.031 of the Education Code nor Attorney General Opiion
DM-347 limits the length of wntract the board of a school district may a&r. Buf see
Local Gov’t Code 8 271.009 (limitingterm of contract to twenty-five years). The board
of trustees of a school district must award a w&act in accordance with section 44.031(a)
ifthevalueofthewlltnctisSZ5.000ormoreintheaggregateforeachtwJvamonth
period covered in the contract.

       A multi-year wntrac~ must, however, wntainaclausc8etai@tothescbool
boprd”thewntiFnringrighttotamiaateattheacpirationof~budg~paiodoftbc
[school district] during the term of the contract.:. .” Id. g271903(a); see id.
5 271903(b) (deiXng “local go-”             toincludeschooldistrict). Intberltanative,
tbe~lboardmayw~onthew~on’abesteffortsattanptby[theschool
board] to obtain and appropriate iimds for payment of the wntract . . . .” Id.
5271903(a). The school board also may include both provisions in the wntmct,
providing the school district a wntinuing right to terminate and conditioning the contract
on the school board’s b&t efforts to appropriate fimding. Id.

       Third, you ask whether a school district may, under section 44.033 of the
Education Code, execute an &urance wntractfora@eriodlongerthantwehemonths.
Section 44.033 provides an altemative method for the purchase of pasonal property
valued between S10,000 and S25,OOO.’As this office determined in Attorney General
Opiion DM-347. a contract to pm&se insuranccisawntracttopurchascpasonal
m=m.




                                           P. 2321
CommissionerMikeMoses - Page 7              (DM-4 18)




       Section 44.033 providea in per&rem part as follows:
               (a) A school district shall pmchase personal property as
          provided by this section if the value of the items is at least SlO,OOO
          butlessthans25.000, in the aggregate, for a 12-month +riod. ht
          the- akmativ~ the school district may pmchase those items in
          acwrdancc with Sections [sic] 44.03 1 (a) and (b).
               0) For each 12-month period, the district shall publish a notice
          in two sucwssive issues of any newspaper of general cbudation in
          thecountyinwhichtheschoolislocated.         Ifthereisnonewspapain
          tbewtmtyinwhichtheschoolislocated,theadvatisingshallbe
          publishedinanewspaperinthew~nearestthecountyseatoftht
          wtmty in which the school is located, specifyins the categories of
          personal property to be purchased under this section and soliciting
          thenames . . . of vendors that are interested in supplying any of the
          categories to the district. For each category, the district shall create
          avmdorlistw~gofeachvardorthatrespondstothepublished
          notice and any additional vendors the district elects to include.
               (c) Before the district makes a pumhase from a category of
          personalproperty,thedistrictmustobtainwtittenortelephoneprice
          quotations hm at least three vendors from the list for that
          catesory....  Thepurchaseshallbemade&omthelowest
          reqmsibie bidder.
       We 6nd nothing in section 44.033 prohibiting a school district fi-om unering a
contmctforthepur&aseofktrance           with a duration longer than twelve.months. But see
Local Gov’t Code 5 271.009 (bmhing term of contract to twenty-five years). Subsection
(b)doesnotlimitthelengthofaconeact;Rtha,itrequirrsa~ldistridtopublish
notioe~vadorsiataestedin~pplyingth~ldi~~withthosegoodstht
school district will be pmchasmg in the upccvning twehwmonthperiod          I$ thadq     a
school district executes a multi-year insurancewntnct,itneednotadvertiseibr&urance
vadorsuntilthetwelvamonthpaiodduring~cbtheschooldistriUwillbeex~a
newinsllranwwntract.

       ~theschwldistrict~asamulti-yearcontnqitmustw~~with~on
271.903(a) of the Local Govemment Code. See snpru at 6. Thus, the wntract must
~~adause~gtothcrchooldistrictthewntinuingrighttotaminatethe
~ontr~dittheardoftheschooldistrict’sbudgetpaiod,aclauseooaditioniagthe
wntkation of the contract on the school board’s best efforts to appropriate Curdsfor the
payment of the ww       or both.

       Your fourth question causes us to consider the value requk~~  articulated in
sections 44.031(a) and 44.033(a). You ash whether a school district must aggre@e
di.Eerenttypesof insuranq eg., workers’ wmpensuion insurance and health ittsmmq

                                           P. 2322
Commissbner MikeMoses - Page 8              (Dll-418)




to determine the value, for purposes of working  the methods the schoo! distr!ct may
use to purchase the insuranw. You ah ask whether a school d!str!ct may assume that it
need not aggregate coverage in dEerent “hnes” of insurance, as defbted by rule of the
wmmkssionerof insmanw for purposes of section 44.031(a) and sect!on 44.033(a). You
askwhetheraachoold!strictmustaggregatekuranw        coverage tinder differwt type3 of
insumnw ifthe wvuage is avahableunder a shtgle wntract in the low! market.

        You do not !nd!cate any pa&&r rule of t!re wmnnssr         . ‘otter of iwlranwtllat
defhIes%es~of’ msurance. We note that the Department of Insurance has, in hs rules,
attegorized the various types of kurance as fo!lows: Life,accident, and health htsurance,
see 28 T.A.C. ch. 3; property and casualty insurance, see id. ch. 5; title krrance, see id.
ch. 9; surplus lines insurance, see id. ch. IS; and prepaid legal servke, see id. ch. 23. We
tmderstand you to inquire whether, for purposes of determ!n!ngthe value of a contract, a
school dktrict may consider, for example, the value of its health hmurawe coverage
separately corn the value of its property insuranw wverage, its workers’ compensation
wveragq or its life insurance wverage. We be-lievethe answer to your question !ies in the
phrase “io the aggregate” in sections 44.03 l(a) and 44.033(a).

       The-Education Code does not define ehher the phrase “in the aggregate” or the
tam “aggegate”; nor do we 6nd a det!nhion elsewhere.in atate law. In wmmon usage,
see Gov’t Code 8 3 11.Ol 1, the phrase “in the aggregate” means “wns!dered as a whole.”
WEBSER’SNINTHNEW CXJLU~IATIZ            DICTIONARY    64 (1990). The term “aggmgate”
denotes the ‘[e]nt!re number, sum, mass, or quantity of something; tota! amount complete
whole.” BLACK’S     LAWDICTIONARY 60 (5th ed. 1979); see a&o BRYAN A. GONER, A
DICTIONARY    OF MODERNLEGALUSAGE 30 (1987). In exam!n@ the definitions of
‘kggqate,” we.note that the word appears to connote a wllect!on of associated items.6
See 1 OXFORD   ENGLDEIDICTIONARY     252-53 (2d ed. 1989).

        Section 44.031(a) provides that, in general, a school d!str!ct must use one of the
apeSed purchasmg methods to w&act for anyth& except profesrdonal services,
vehicle tire!, or produce, %hmd at S25.000 or more in the aggmgate for each 12-month
period. . . .” Clearly, the school d!str!ct need not add together the value of a!! of the
wntmcts it proposes to execute during a 12-month petiod. Ifit did, a school dkttict
always wotdd cross the S25.000 line and have to award a!! of its wntracts in acwrdance
with section 44.031(a). On the other hand we beke the phrase “ia the aggmgak” .in
section 44.031 of the Education Code limbs a school d!str!ct’s authorhy to wns!der the
value of each purchase separately.

        Se&on 44.032(b) of the Education Code forbids, in cutabt w                    an
officer, employee, or agent of a school dktrkt to make or aut!mr!ze “separate, aequenthxl,

        6~or~4ia19wthetcrm-~~~-‘[c]omporeddmanyindividualsonitcdinto
ODCawciation” 1 OXFORD Euousn DICIWNARY252 @i al. 1989). In ?mlo&y,tbc tam means
‘[c~ofdiclind~unitcdintoaamunon              organ&.” Id. Iaphysics,lbclummfasto’[a]
msafollncdbytbcllalonof~          partick” Id. at 253.


                                            P. 2323
Gmmissioner MikeMoses - Page 9             (DM-4 18)




or wmponatt ptidwes” of items that “in normal pur&sing practices would be
pumbawd in one purchase,” see Educ. Code 8 44.032(a)(l), (2). (3). Without
detemGq that “in the aggregate” is duplicative of the restriction on separate, sequential,
orw~n~purchasesasamanaoflaw,webelimwemustwnstnrethephrase
wnaistedy with the restriction, as well as the. wmmon usage of the word “aggmgate.”
Acwrdingly, we conclude that the phrase %I the aggregate” requires a school district
cumulativdytovaluewn~forliLeproductsthatarcboo!districtnormallywould
purchwe together, but only for purposes of datemtiniq when a fotmal prowmmwt
process is required by law.7

       As you suggest, whethu a school district may aggmgate different hksuranw
wverages may depend upon the local market; the question also may depend upon the
types of coverage involved the size or location of the schwl district, and other factors
that we are unable to predict. Possii!y, one school district would wrtnally wntract to
pumhase certain products together, while another s&w! district normally would not
contract to purchase the same products together.

       Agaia,tbestatutcarpresslyrcquinsa~idistricttow~dathe~e
vrlueofcataiawntractstobeacecutedina~~~paiodontyiarefamceto
~whahatheschooldistrictmustuseoneofthemethodslistedin~on
44.031(a) of tha Education Code to make tha wntract. We do not mad sac&m 44.031(a)
to require a school district to make the wntracts for like products %I the aggmgate.”
Thus,onccaschwldistricthasaggregatadthtvalueofwntractsitdesirestoenta~
the twelva-month period to determine whether it must make the contract using one of the
methods listed in aaction 44.03 l(a). it may enter each contract saparately.

        Inyourfinalquestionyou~whethathe~~ofathird-partyldministrator
who is licensed under Insurance Code article 21.07-d are profassional sakes that a
school district wed not bid under section 44.031(f). Article 21.07-6, section l(1) defines
     . .
”admmMrato?      as “a parson* who wllects premiums or wntributions from or who adjusts
or settles claims in wnncction with life. health, and accident ban&s or annuities for
residents of this state.” (Footnote added.) See ULTO  28 T.AC. 8 7.1601. The definitiw
excludea certain persons, such as an employer on behalf of its emplqeea, a health
maintenance organization, or a person who adjusts or settles claims in the notmal wurse
of his or bar practice as a iicenscd attorney. Ins. Code art. 21.07-6, 5 l(l)(A), (D), (IQ
Incidentally, the dethrition of “administrator” also excludes -a cdf-inatrance pool




                                           P. 2324
CommissionerMikeMoses - Page 10            (DM-4 18)




composed of political subdivisionsof this state that participate in a tbnd or pool through
interlocalagreementsand... any nonprofit entity that acts solely on behalf of a w
pool, agency, or body. . . .” Id. 8 l(l)(O).

        To become a licensed third-party admi&mtor. a person must obtain a cuiiflcate
of authority from the wmmissioner of htsmanw. Id. 8 3(a). In its application for a
wrtiticate of authority, an appkant must provide the wmmissioner with copies of
~~I$u+I          documents, such as the articles of incorporation and bylaws; a description
        admmmator, tf the appkant is not domiciled in this state, a power of attorney
appointing the wmmtsst  * ‘otter as the administrator’s attorney; financial audits; and any
other information the wmmissioner requires. Id. Q4; see oh 28 T.AC. 84 7.1603,
.1605. The wmmissioner of insurance must approve the application if he or she is
satistied that the application meets the following criteria:
               (1) the granting of the applicationwould not violate a federal or
          state law;
              (2) the finawid wndition of an admi&mtor applicant or those
          persons who would operate or wntrol an -or            applicant are
          suchthatthegrantingofacatificateofauthoritywouldnotbe
          adverse to the public interest;
                (3) the applicant has not attempted through fraud, or bad faith
          to   obtain the cut&ate of authority;
              (4) the applicant has wmplied with this article and rules
          adopted by the board under this article; and
               (5) the name tmdu which the applicant will wnduct business in
          thisatateisnotsosimilartothatofanotheradmG%mtororhSurer
          that it is likely to mislead the public.
Ins. Code art. 21.076, 5 5(a).

        Once the wmmissioner of insurance has approved an application for a certificate
of authority, the third-party administrator must obtain and ma&in a fidelity bond. Id.
5 6(a); see a&w 28 T.AC. 5 7.1613. The third-party administrator also must submit to
examidons by the wmmissioner of insurance or the wmmissioner’~ designee, which
examir&on will include a review of all of the administrator’s written agreemaas*
various irtsumd and plana*O as well as a review of the. administrator’s financial
statements. Ins.Codeti.21.07-6,~8(c);see~28T.AC.~7.1610.




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CommissionerMike Moses - Page 11            (DM-418)




       In Attorney General opinion JM-1038 this office considered whether the third-
partyadministratorofaninsumnw          wntract provides prof~onal services, the pumhase
of which need not be wmpetitively bid under chapter 252 of the Local Govemment Code.
Attorney General Opiion IM-1038 (1989) at 1. (Like section 44.031 of the Education
Code, Local Government Code section 252.022(a)(4) excepts from the mpkment that a
municipality wmpetitively bid certain expenditures “a proamnmt for. . . profkonal
services.“) Using the definition of “administrator” or “third party admktmtor” in
Insumnw Code article 21.07-5, reZxuZed by Act of May 29. 1989. 71st Leg., RS., ch.
1094,s 4, 1989 Tex. Gen. Laws 4477,4491, the opinion stated that an administrator is a
pason who receives a fee or compensation Tar performing or providing any serviw
fUndio~orduty,oractivity~insurancc...in~administrativcormanaganent
capacity.” Attorney General opinion m-1038 (1989) at 1-2. Because of the breadth of
the defkition, the opinion stated, a third-party administrator may “include services ranging
from simple clerical ones to wmplex ones requiring high levels of expert&.” Id. at 2.

        The opinion then considered the nature of professional services. As the opinion
noted, this office previously defined professional setvices to include any member of a
discipline kquiring special knowledge or attainment and a high order of leam& ski&
and intelligence.” Id. (quoting Attom     General Opiion DA-940 (1988)). This office
~however,fiomdetermikngwhetherthe.                    serviwsoffaedbyathird-patty
rdmtolstrator are professional services because the spechic aetvicxs a third-party
    . .
admmshdor performs will depend upon a particular wntract. Id. at 3-4.

        We believe the wnchtaion reached in Attom General Opinion JM-1038 is
subject to mexamidon because the leg&ture repealed article 21.07-S of the Insumnw
Code. the statute on which the opinion relied. As wmpared to the detinhion of
”-or”. .          in the now-repealed article 21.07-S. the detlnition in article 21.07-6 is
explicit: a third-party admktmtor wlkcts life, health, and accident insumnw premiums
or wntriitions and adjusts or settles life, heal& and accident insur~~claims. SeeIns.
Code art. 21.076, 5 l(1). The application procedures and approval criteria in article
21.07-6 are similar to those in article 21.07-5, although not identical. Compcln Ins. Code
art. 21.07-6.88 4,5 wit%id. art. 21.07-5, 45 4.6, npeakdby Act ofMay 29, 1989.71st
Leg.. RS., dL 1094.8 4,1989 Tex. Gen. Laws 4477,449l.

       In Attorney General Opiion DM-347 this office dkussed the. nature of
professional services more fblly than in Attorney General Opiion JM-1038:
              Accdii      to Attorney General Opiion m-344, a professional
          service is one requiring “‘predominantiymental or intell~   rather
          than physical or manual,“’akills. Attorney General Dpbtion MW-344
          (1981) at 4 (quoting Ma@arni Ckma& co. v. Fiat’ wk@r a..




                                            p. 2326
CommissionerMikeMoses - Page 12            (DM-418)




          160 s.w.2d 105 105 (Tea. cii. App.-EastbUd 1942, no writ)).
          Furthermore, a “professional”works in a profession that “kquircs
          years of education and service for one to attain wmpe-tence and
          [that] calls for a high order of intelligence, skill and learning.‘” Id.
          (quoting Tr~ion           Dhplqs, Inc. v. City of New Orleans,346
          So. 2d 359,363 n5 (La. Ct. App. 1977)).


               Fiiy, [Attorney Generd Opiion MW-3441 discussed “[t]he
          most u&id standard for judging the scope of ‘profession’”from
          Woadakll v. Lkziley, 230 S.W.2d 466 (W. Va 1976). Id. at 5. The
          Wc.xx&N wurt concluded that the services of an interior decorator
          were not professional services. The WoaaMl court did not,
          however, limit the term “professional services”to the professions of
          theology, law, or medicine, nor to professions spe-cificaUy
                                                                    recognized
          as such by statute. Id, (citing WornSIll, 230 S.ESd at 469-70).
          Rather, while “‘most occupations, trades. business or call&s require
          a diversity of knowledge and skill,‘”not all such occupations, tmdes,
          business or dings could be called “professions.” Id. (quoting
          Wrn.wWl, 230 S.E.2d at 470). A profkonal is only one who “‘is a
          member of [a] discipline with widely accepted standards of required
          study or specified attainments in special knowledge as disti@&ed
         .fiom mere skill.‘” Id. (quoting Wooddell, 230 S.E.2d at 470).

Attorn& General Opiion DM-347 (1995) at 3-4 (footnote omitted).


rdrmrustrator require pre4iominan@mental or intellectual skills, the aqukitiw of which
entail years of education and scnkc. See id. at 3. Additionally, we find little evidemx
that a third-party administrator belongs to a “discipline with widely accepted @ndards of
requirrdstudyorspecifiedattainmtntsinspecial~~~geasdistinguished~mmae
skill.” See id. at 3-4 (quoting Attorney General Opinion MW-344 (1981) at 5 [quo@
Wooddell v. D&q,       230 S.E.Zd 466 (197611). We cannot say as a matter of kw.
however, that a third-party administrator does not provide professional savices; such a
decision depends, in part, on the actual fimctions a third-party admb&ator perfbrms.
We do not know, for example, whether the duty of the third-party -or               to pay
claimsisminist~thatis,whahathethird-partyadministraorpaysclaimsonthe
orders of the school district, or whethex the third-party administrator must intapret the
law to determine whether to pay a particular claim.*’




                                                        P.   2327
CommiaaionerhGke Moses - Page 13            (DM-418)




       Fmthermore, this office generaUyabataina Tom determbdng whether a particular
service ia a professional service for purposes of a statute other than the Professional
!ServicesProcurement Act, V.T.C.S. art. 664-4. because of the fact-baaed nature of such a
detesmmation. See, e.g., Attorney General Opiiona DM-106 (1992) at 2; IM-1136
(1990) at 2-3; JM-1038 (1989) at 3. Bursee Attorney General Opiion JM-940 (1988) at
4. In our opinion, the a&w! board is the proper authority to determine the actual
ilmctions of a particular third-party administrator for purposes of section 44.031 of the
Education Code.

       Of course, except for the professional aervicea hated in the ProfesSional Services
Pmauuwnt Act, V.T.C.S. art. 6644, a school district may wntract for proftional
aenks using any appropriate method hated in section 44.031(a) of the Education Code.
Cf: Attorney General Opinion DM-106 (1992) at 2. Comae E&c. Code 3 44.0310
wifh Local Gov’t Code 3 252.022(a)(4).

     . . You ask whether “reinsuranw ptwuemem duties” included in a claims
-on               wntract with a licensed third-party admi&mtor are professional services
for purposes of section 44.0310 of the Education Code. You do not indicate what
“ninsurance prowrement duties” are. From the phrase itae& we guess that such duties
conaiatofpricingandaquhing,wbehalfofaachooldiatrict,              ninsurancefortheachool
district’s self.-UISUWICC iimd. As this office stated in Attorney General Opiion DM-347,
thepmchaaeofmsmawe,            even through an agent, is not a pumhase of profeaaional
S&WS. TO the adent “~&LW~WW              procurawnt dMk$’ id&          o&f &&s h~ we
cannot guess, we do not determine whether such duties are profaaaionalservices.

         Ywaslrwhethaaschoolboardnnut~~ia~~withsectiw44.031                                or
44.033    of the Education Code, a wntract for professional aetvicea aa well as
nonproftional services. To the extent that a contract, vahmd at S25,OOOor more in the
aggregate for a twelve-month period, ia for lIlythins other than profeaaional aervicea,
~u~orvehiciefUel,a~ldistrictmustawarditusingtheonemahodamongthe
aix listed in section 44.03 1 that provides the. beat value to the school district. See Educ.
Code 8 44.031(a), (r). Likewise, to the extent a contract, valued at behveen SlO,OOO      and
S24J99.99, inclusive, in the aggmgate for a twelve-month paiod. ia for the pmchase of
~~property,aschooldistrictmustaunrdtbew~eithabyw~
biddhtg the wntract or in accordance with section 44.03 l(a) and (b). See id. 8 44.033(a).
The school board may, but need not, award any profeaaional aervicea inch&d in the
wntract that are not wvesed by the Profeaaionalsesvices Prowrement Act, V.T.C.S. art.
66-W, in accordance with section 44.031 or section 44.033, depending on the value of the
contract. See WaIlace v. Commissioners[] Court ofMdison           Couth@,281 S.W. 593,595
(Tex. Civ. App.-Waco 1926). rev’d on orher groundr. 15 S.W.2d 535 (Tex. 1929)
(stating that where contract included some aervicea requiring technical Lmowkdge and
some services or products that do not, those that do not muat be wmpetitively bid); see
aho Guy Bitulithic Co. v. Nueces Coma& 297 S.W. 747, 753 (Tcx. Ci. App-SM
Antonio 1927), rev’d on other groumf~, 11 S.W.2d 305 (Tex. 1928); Attorney General
Opiion M-890 (1988) at 4 (quoting Wdkzce v. CornmissionersCo@‘J of Madisonco.,

                                            P. 2328
CommissionerMike Moses - Page 14          (DM-418)




280 S.W. 593 (Tex. Cii. App.-Waco 1926, rev’davothergroun&,          15 S.W.2d 535 (Tex.
1929)).

                                 SUMMARY

               Newly enacted section 44.031 of the Education Code prevails
          over Attorney General Opiion DM-347 to the extent the opinion is
          inwnsistent with the statute. Section 44.031 does not wnflict with
          the conclusion in Attorney General Opiion DM-347 that a contract
          for the purchase of insurance is not a contract for professiona
          aemiccs. Additionally, whether a wntract for the purchaw of
          insurance is a wntract to purchase personal property no longer
          matters in the context of section 44.03 1.

               To the extent Attorney General Opiion DM-347 concludes that
          a s&w! district must wmpetitively bid a wntract, vahted at more
          than S24.999.99 in the aggregate for a twelve-month period, for the
          purchase of insurance, don        44.031 of the Education Code
          supersedes the opinion. A school district must award such a wntract
          using one of the methods listed in section 44.031(a). The board of
          trusteesoftheschooldistrictmustselectthemethod”thatpwvides
          the best value to the district.”

               Neither section 44.031 of the. Education Code nor Attomey
          Generd Opiion DM-347 precludes a school district from execu&g
          an insuranw contract for a period longer than twelve months. A
          multi-year wntract must, however, comply with section 271903(a)
          of the Local Government Code.

              Nothing in section 44.033 of the Education Code prohiii a
          school district fkom entering a wntract for the purchaw of &trance
          with a duration longer than twelve months. Section 44.033(b) of the
          Education Code does not limit the length of a contract; it merely
          requires a schwl district to publish notice seeking vendors interested
          in supplying the schwl district with those goods the schwl district
          will be pmchasing in the upcoming twehwmnlh period. If the
          s&w! district enters a multi-year wntract, it must comply with
          section 271.903(a) of the Local Government Code.

               The requirement in sections 44.031 and 44.033 of the Education
          Code, refe       to the value of purchases “in the aggmgak,, indicates
          that a school district cumulatively must value contracts for like
          products that a school district normally would purchase together, but
          only for purposes of determiniq when a formal prowremem process
          is required by law.

                                           P. 2329
CommissionerMike Moses - Page 15          (DM-418)




              Wheher a third-party -or,              licensed under article
         21.076 of the hwrance Code, provides a professional sexvice
         depends upon whether the service requires predominantly mental or
         intellectual,ratherthanphysicalormanual,sk&whetheryearsof
         education and tice       are wxssary for a practitioti to attain
         wmpetence m a third-party administrator, and whether a third-party
         administrator belongs to a disciplinewith widely accepted standards
         of required study or specified attainments in special knowledge as
         didnguished tiom mere skill.

              To the extent “minsumnce proaxement duties” wnsist of
         pricingMdacquirin&onbehalfofaschooldistrict,rcinsurancefor
         the school district’s self-insurance limd, such duties are not
         professional services.

              To the extent that a contract, valued at S25.000 or more in the
         aggregate for a twelve-month period, is for anythiq other than
         professional services, produce, or vehicle fieJ, a school district must
         award it using the one mahod among the six listed in section 44.03 1
         of the Education Code that provides the best value to the school
         district. Likewisej to the extent a wntnq valued at between
         S10,000 and S24.999.99, inclusivq in the aggregate for a twelve-
         month period is for the purchase of personal property, a school
         district must award the wntract either by wmpetitidy bidding the
         wntractorinacwrdanc+withsectiw44.O3l(a)and(b).             Thea&x11
         board may, but need not, award any professional services included in
         the w&act that are not covered by the Professional Services
         Procurement Act, V.T.C.S. art. 664-4. in accordance with section
         44.03 1 or section 44.033, dependingon the value of the wntract.




                                                    DAN MORALES
                                                    Attorney General of Texas

JORGE VEGA
Fii Assistant Attorney General

SARAH J. SHIRLEY
Chair, Gpiion Committee




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