     OFFICE OF THE ATTORNEY   GENERAL.   STATE OF TEXAS

    JOHN     CORNYN




                                                   January 5,200l



The Honorable Jeff Wentworth                              Opinion No. JC-0326
Chair, Nominations Committee
Texas State Senate                                        Re: Legality of contract award by the City of
P.O. Box 12068                                            San Antonio (RQ-0268-JC)
Austin, Texas 7871 l-2068


Dear Senator Wentworth:

         You ask a number of questions about the legality of a contract award by the City of San
Antonio. As this office cannot make findings of fact,’ we cannot determine whether the city violated
the law in awarding the contract. For this reason, we answer your questions only in the most general
terms. We do conclude that section 252.042 of the Local Government Code, which requires a city
to treat offerors fairly and equally with respect to any opportunity for discussion and revision of
proposals, applies only to requests for proposals made under section 252.021 of the Local
Government Code.

         You inform us that the city council approved a process for awarding an advertising contract
for the San Antonio Convention and Visitors Bureau (“SACVB”) by a request for proposals and
solicited proposals for the contract from advertising and marketing agencies in February 2000. The
deadline for proposals was April 21, 2000. The letter soliciting proposals informed potential
proposers that proposals should include a Good Faith Effort Plan regarding the manner in which the
proposers would use minority and women owned business enterprises. The city received three
proposals as of April 21. Your request asserts that only one provided a detailed Good Faith Effort
Plan; the other two proposals included plans of a more general nature. In July 2000, the city invited
the three proposers to clarify or revise their Good Faith Effort Plans. In August 2000, the city
awarded the contract to one of the companies that had not submitted a detailed Good Faith Effort
Plan in April. The proposer that did submit a detailed plan in April challenges the legality of the
city’s decision to allow the other proposers to revise or clarify their plans after the April 2 1 deadline
and to award the contract to the other proposer.z




        ‘See, e.g., Tex. Att’y Gen. Op. Nos. JC-0020 (1999) at 2 (statingthatinvestigationand resolutionof fact
questionscannotbe donein opinionprocess);M- 187 (1968) at3 (“[TJhisofficeis withoutauthority to make, fachlal
determinations.“); O-291 1 (1940) at 2 (“[T]his presentsa fact questionwhichwe areunableto answer.“).

         %-e LetterfromHonorableJeffWenhvorth,Chair,NominationsCommittee,TexasStateSenate,to Honorable
JohnComyn, TexasAttorneyGeneralat 2-6 (Aug. 14,200O) (on file withOpinionCommittee)[hereinafterRequest
Letter].
The Honorable      Jeff Wentworth   - Page 2       (X-0326)




        The city informs us that the contract at issue is “budgeted at over $4.6 million dollars
ammally.“3 We gather that the city council approved a document called “SACVB RFP Process,
Schedule, Selection Criteria, and Review Committee.”      City Brief, note 3, at 2. We have not
received a copy of this document.

        Chapter 252 ofthe Local Government Code generally requires a municipality to comply with
competitive bidding requirements when making purchases exceeding $15,000. See TEX. Lot. GOV’T
CODE ANN. 5 252.02 1(a) (Vernon Supp. 2000) (“Before a municipality may enter into a contract that
requires an expenditure of more than $15,000 from one or more municipal funds, the municipality
must comply with the procedure prescribed by this chapter for competitive sealed bidding or
competitive sealed proposals.“). Chapter 252 allows competitive sealed proposals for certain kinds
ofpurchases, namely high technology procurements and those made with municipal funds “derived
from an appropriation,    loan, or grant received     from the federal or state government for
conducting a community development program” established under chapter 373 of the Local
Government Code, the Texas Community Development Act of 1975. See id. 55 252.021(c), (d)
(Vernon Supp. 2000); ,042 (Vernon 1999); see also id. $5 373.001.,007 (Vernon 1999) (Texas
Community Development Act of 1975). In addition, other state and federal standards may govern
purchases made with state or federal grant money. See TEX. GOV’T CODE ANN. $5 783.001-,009
(Vernon 1994 & Supp. 2000) (Uniform Grant and Contract Management Act); see also UNITED
STATES OFFICE OF MANAGEMENT & BUDGET, CIRCULAR A-87 (1995), amended (1997); id.
CIRCULAR A-102 (1994), amended (1997):


         Section 252.022 of the Local Government Code provides that chapter 252 “does not apply
to an expenditure” for a number of different types of items, including “a procurement for personal,
professional, or planning services.” TEX. Lot. GOV’T CODE ANN. 5 252.022(a)(4) (Vernon Supp.
2000). Furthermore, section 252.002 provides that “[alny provision in the charter of a home-rule
municipality that relates to the notice ofcontracts, advertisement of the notice, requirements for the
taking of sealed bids based on specifications for public improvements or purchases, the manner of
publicly opening bids or reading them aloud, or the manner of letting contracts and that is in conflict
with this chapter controls over this chapter unless the governing body of the municipality elects to
have this chapter supersede the charter.” Id. 5 252.002 (Vernon 1999).

        You ask whether “a proposer who fails to comply with the City’s Request for Proposal
requirements      . [is] qualified to receive a contract award” and whether “a city violate[s] its own
Request for Proposal” by allowing proposers to form new business relationships and submit new
information after the deadline for submissions. See Request Letter, supra note 2, at 6-7. We are not
able to definitively resolve these questions.




         ‘Brief from David J. LaBrec, Stiasbwger& Price,L.L.P., to SusanD. Gusky, Chair,OpinionCommittee,
Oftice of theAttorneyGeneralat 2 (Sept. 28,200O) (on file withOpinionCommittee)[hereinafter
                                                                                          City BriefJ.

       “Availabk   of http:Nwww.whitehouse.goviOMBigrants/index.h~l.
The Honorable   Jeff Wentworth    - Page 3        (X-0326)




         First, the legal tiamework under which the city awarded the contract is not clear either from
your request or the materials we have received from the city. Apparently, the city used a request for
proposals procedure to award the advertising contract. As we have seen, chapter 252 generally
reserves requests for proposals to certain kinds of contracts. Although section 252.002 authorizes
a home-rule city to modify the requirements of chapter 252 in its city charter, we have no
information about whether the City of San Antonio has done so. Furthermore, we have received a
brief corn the City of San Antonio insisting that it awarded the contract at issue as a professional
services contract, which would be exempt from chapter 252. See City Brief, supra note 3, at 5-7.
Whether a contract is one for professional services exempt from chapter 252 is generally a fact
question within the province of a city’s governing body: “[A] municipality has discretion in the first
instance to determine whether particular services, other than those covered by [chapter 2254 of the
Government Code] are professional services for purposes of exemption from competitive bidding
requirements under Local Government Code section 252.022.” Tex. Att’y Gen. Op. No. DM-106
(1992) at 2. This office cannot review the city’s determination to the extent it depends upon findings
of fact. See id. (“determinations    as to whether particular services, other than those covered by
[chapter 2254 of the Government Code] are professional services for competitive bidding purposes,
frequently involve fact questions that the opinion process cannot address”); see also Tex. Att’y Gen.
Op. Nos. JC-0020 (1999) at 2, M-187 (1968) at 3,0-2911 (1940) at 2, supra note 1.

         Second, even ifwe were able to establish the correct legal framework under which to analyze
the contract award, we would still not be able to resolve your questions about the legality of the
city’s conduct because their resolution would also involve questions of fact. For example, assuming
that the contract was competitively bid under chapter 252, whether or not the city acted appropriately
in permitting two of the three proposers to amend their Good Faith Effort Plans could depend upon
whether a sufficiently detailed Good Faith Effort Plan constituted a mandatory bid specification and,
if so, whether it was a waivable or nonwaivable bid condition. The city suggests that detailed Good
Faith Effort Plans were not required, that each ofthe three proposers submitted complete Good Faith
Effort Plans, and that no bid condition was waived.’ The complaining advertiser believes, however,
that a detailed Good Faith Effort Plan was a mandatory bid specification with which the other
proposers failed to comply. This office cannot resolve that factual dispute. Moreover, this office
cannot resolve whether the defect in the bid specifications, if there was one, was waivable or
nonwaivable.     Case law suggests that a nonwaivable defect in a bid is one “that would allow the
bidder to avoid the binding nature of his bid” and “if it gives a bidder a substantial advantage or
benefit not enjoyedbyotherbidders.”     Spawglass Cons@. Corp. v. CityofHouston, 974 S.W.2d 876,
885 (Tex. Civ. App.-Houston       [14th Dist.] 1998, pet. denied). This office cannot engage in the
factual inquiry necessary to make those determinations.       See Tex. Att’y Gen. Op. Nos. JC-0020
(1999) at 2, M-187 (1968) at 3,0-2911 (1940) at 2, sups note 1.

        You also ask whether “a city violate[s] the [Local] Government Code requiring that all
proposers be treated fairly when it discloses one proposer’s minority and women’s plan and grants


        ‘See Lena fromFrankJ. Garza,SanAntonioCityAttorney,to SeagalV. Wheatley,Jenkens& Gilchrist,P.C.
(Aug. 11,200O) (on file withOpinionCommittee);see also CityBrief,supranote 3, at 7.
The Honorable Jeff Wentworth     - Page 4        (X-0326)




an extension beyond the deadline to let two (2) other proposers change their proposals to add such
a required plan,” Request Letter, supru note 2, at 6, and if a city “violates the fair treatment
requirements of the [Local] Government Code by permitting two proposers to ‘team up’ after the
deadline,” id. at 7. The questions appear to refer to section 252.042 ofthe Local Government Code,
which provides as follows:

                    (a) Requests for proposals made under Section 252.021 must
               solicit quotations and must specify the relative importance of price
               and other evaluation factors.

                   (b) Discussions in accordance with the terms of a request for
               proposals and with regulations adopted by the governing body of the
               municipality may be conducted with offerors who submit proposals
               and who are determined to be reasonably qualified for the award of
               the contract. Offerors shall be treatedfairly and equally with respect
               to any opportunity for discussion and revision of proposals.        To
               obtain the best final offers, revisions may be permitted after
               submissions and before the award of the contract.

TEX. Lot.   GOV’T CODE ANN. $252.042      (Vernon 1999) (emphasis added).

         Section 252.042 does not appear to apply to the contract at issue. As noted above, section
252.042 on its terms applies only to requests for proposals under section 252.021. That section
provides in subsection (c) that “[a] municipality may use the competitive sealed proposal procedure
only for high technology procurements or, in a municipality with a population of 75,000 or more,
the purchase of insurance.” Id. 5 252.021(c) (Vernon Supp. 2000). The advertising contract at issue
does not appear to be a contract for a high technology item. See id. 5 252.001(4) (Vernon 1999)
(“‘High technology procurement’ means the procurement of equipment, goods, or services of a
highly technical nature, including: (A) data processing equipment and software and firmware used
in conjunction with data processing equipment; (B) telecommunications       equipment and radio and
microwave systems; (C) electronic distributed control systems, including building energy
management systems; and (D) technical services related to those items.“). In addition, a request for
proposal process may be used to make expenditures with certain municipal funds. Subsection (d)
of section 252.021 provides that:

               [t]his chapter does not apply to the expenditure of municipal funds
               that are derived from an appropriation, loan, or grant received by a
               municipality from the federal or state government for conducting a
               community development program established under Chapter 373 [the
               Texas Community Development Act of 19751 if under the program
The Honorable Jeff Wentworth         - Page 5        (X-0326)




                   items are purchased under the request-for-proposal   process described
                   by Section 252.042.

Id. 5 252.021(d)    (Vernon Supp. 2000). We have not been provided any information suggesting that
the expenditure    at issue was made with municipal funds derived from an appropriation, loan, or grant
received by the    city from the federal or state government for conducting a community development
program under      the Texas Community Development Act of 1975.

        In sum, given the factual nature of the inquiry, we cannot determine whether the successful
proposer was qualified to receive the contract or whether the city violated its request for proposals.
Section 252.042 of the Local Government Code, which requires a city to treat offerors fairly and
equally with respect to any opportunity for discussion and revision of proposals, applies only to
requests for proposals made under section 252.021 of the Local Government Code.
The Honorable   Jeff Wentworth     - Page 6        (X-0326)




                                         SUMMARY

                        Section 252.042 of the Local Government Code, which
                requires a city to treat offerors fairly and equally with respect to any
                opportunity for discussion and revision of proposals, applies only to
                requests for proposals made under section 252.021 of the Local
                Government Code.




                                                Attorney General of Texas



ANDY TAYLOR
First Assistant Attorney General

CLARK KENT ERVIN
Deputy Attorney General - General Counsel

SUSAN D. GUSKY
Chair, Opinion Committee

Mary R. Grouter
Assistant Attorney General - Opinion Committee
