When does a Texas school district have to use formal competitive bidding for construction?

Plain-English summary

Texas school districts buy goods and services and award construction contracts under specific purchasing laws. The Texas Education Agency commissioner asked the Attorney General how two of those laws fit together. Education Code section 44.031, enacted in 1995, says that, with a few exceptions, all school district contracts worth $25,000 or more in the aggregate over a twelve-month period must be made by whichever of six listed methods gives the district the "best value." The six methods are competitive bidding, competitive sealed proposals, a request for proposals, a catalogue purchase, an interlocal contract, and a design/build contract. Local Government Code chapter 271, subchapter B sets out detailed competitive bidding procedures for certain public works contracts.

The office explained how the two interact. Under section 271.024, chapter 271, subchapter B applies only when the entity is required by statute to award a contract on the basis of competitive bids (and the contract requires the entity to spend more than $15,000 of its own funds). As the office had held in Attorney General Opinion JM-1220, if no separate statute requires competitive bidding, the entity does not have to follow chapter 271, subchapter B. Section 44.031 does not itself force a district to bid; it lets the board choose the best-value method. But when a school board determines that competitive bidding will provide the best value for a construction contract over $25,000, section 44.031 then requires the district to bid it, and at that point section 271.024 requires the district to follow the chapter 271, subchapter B procedures. To the extent any of those procedures conflict with section 44.031, section 44.031 prevails (section 44.031(e)).

On the second question, the office concluded that chapter 44, subchapter B of the Education Code, which covers school-district purchases and contracts, also applies to community college, junior college, and regional college districts. A junior college district is constituted as a school district for purposes of article VII, section 3 of the Texas Constitution; "community college" and "junior college" are synonymous (section 130.005(a)); and although the regional college district subchapter was repealed in 1985, section 130.122(f) still treats a regional college district as a school district for that constitutional purpose. Because a junior college district's board is governed by the general law for independent school districts (section 130.084), and purchasing and contracting are part of managing the district, the school-district purchasing rules apply to all three kinds of college districts.

Currency note

This opinion was issued in 1996. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

This opinion construes Education Code section 44.031, the chapter 130 college-district provisions, and Local Government Code chapter 271 as they stood in 1996, shortly after section 44.031 was enacted. School-district and college-district purchasing law has been amended since, including the dollar thresholds, the list of permitted methods, and the cross-references. Read this page for the office's 1996 reasoning about how the best-value purchasing statute and the competitive-bidding procedures interact, and verify the current Education Code and Local Government Code before relying on any specific section number or threshold here.

What the opinion meant at the time

For school districts and their boards: The opinion meant section 44.031 let the board choose among six purchasing methods by best value, so competitive bidding was not automatic. But once the board chose competitive bidding for a qualifying construction contract, the district had to follow the chapter 271, subchapter B procedures, except where section 44.031 conflicted and controlled.

For community, junior, and regional college districts: The opinion meant the Education Code chapter 44, subchapter B purchasing and contracting rules applied to them, the same as to public school districts.

For vendors and contractors bidding on school and college contracts: The opinion described which procedures governed when a district chose to competitively bid, namely the chapter 271, subchapter B process as limited by section 44.031.

For lawyers: The opinion reconciles section 44.031's best-value purchasing menu with the trigger in Local Government Code section 271.024, following Attorney General Opinion JM-1220, and reads the chapter 130 college-district provisions to extend chapter 44, subchapter B to junior, community, and regional college districts.

Common questions

Does a Texas school district always have to use competitive bidding?
No. Under section 44.031, the district picks among six purchasing methods, the one that gives the best value. Competitive bidding is one option, not a default.

When do the chapter 271 bidding procedures apply?
When a separate statute requires competitive bidding. The office explained, following Attorney General Opinion JM-1220, that chapter 271, subchapter B applies only when another statute requires the contract to be awarded on competitive bids. So if a school board decides bidding is the best-value method for a construction contract over $25,000, section 44.031 requires bidding, and then chapter 271, subchapter B applies.

What happens if the two laws conflict?
Section 44.031 prevails. Section 44.031(e) says it controls over any other law relating to purchasing goods and services, except laws on contracting with historically underutilized businesses.

Do these rules apply to community and junior colleges?
Yes. The office concluded chapter 44, subchapter B of the Education Code applies to junior, community, and regional college districts, because those districts are treated as school districts and their boards are governed by the general law for independent school districts.

Background and statutory framework

Education Code section 44.031, enacted by Act of May 27, 1995, 74th Leg., R.S., ch. 260, § 1, requires that school district contracts worth $25,000 or more in the aggregate over a twelve-month period (with exceptions for produce, vehicle fuel, and professional services) be made by whichever of six methods provides the best value: competitive bidding, competitive sealed proposals, a request for proposals, a catalogue purchase, an interlocal contract, or a design/build contract. Section 44.031(b) lists factors a district may weigh in awarding a contract, and section 44.031(e) makes the section prevail over other purchasing laws except those on historically underutilized businesses.

Local Government Code chapter 271, subchapter B provides competitive bidding procedures for certain public works contracts. By section 271.024, it applies only when the entity is required by statute to award the contract on competitive bids and the contract exceeds $15,000 of the entity's own funds; a common or independent school district is a covered governmental entity (section 271.021(2)(C)). In Attorney General Opinion JM-1220 (1990), the office concluded these procedures apply only when a separate statute requires competitive bidding.

On college districts, "community college" and "junior college" are synonymous (section 130.005(a)); a junior college district is constituted as a school district for article VII, section 3 of the Texas Constitution (section 130.122(f)); the regional college district subchapter (chapter 130, subchapter F) was repealed in 1985 (Act of May 16, 1985, 69th Leg., R.S., ch. 302, § 3), but section 130.122(f) still treats a regional college district as a school district for that purpose; and a junior college district's board is governed by the general law for independent school districts (section 130.084).

Citations

Statutory provisions discussed:

• Education Code section 44.031 (best-value purchasing for school district contracts of $25,000 or more; subsection (a) the six methods, subsection (b) award factors, subsection (e) prevailing-law clause, subsection (f) professional-services exception), enacted by Act of May 27, 1995, 74th Leg., R.S., ch. 260, § 1
• Education Code chapter 44, subchapter B (purchases and contracts of a school district)
• Local Government Code chapter 271, subchapter B (competitive bidding procedures for public works); section 271.024 (trigger and $15,000 threshold); section 271.021(2)(C) (school district is a covered governmental entity)
• Education Code sections 130.005(a) ("community college" and "junior college" synonymous), 130.084 (junior college board governed by independent-school-district law), and 130.122(f) (junior/regional college district is a school district for article VII, section 3)
• Act of May 16, 1985, 69th Leg., R.S., ch. 302, § 3 (repeal of Education Code chapter 130, subchapter F)

Cases discussed:

• Attorney General Opinion JM-1220 (1990)

No cases were cited in this opinion.

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0387
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1996/dm0387.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain (including footnote numbering) — the linked PDF is authoritative.

Office of the Attorney General
State of Texas

DAN MORALES
ATTORNEY GENERAL

April 30, 1996

Mr. Mike Moses
Commissioner
Texas Education Agency
1701 North Congress Avenue
Austin, Texas 78701-1494

Opinion No. DM-387

Re: Whether a school district must comply with the competitive bidding procedures specified in Local Government Code chapter 271, subchapter B when seeking to bid a construction contract valued at $25,000 or more in the aggregate for a twelve-month period and related question (RQ-861)

Dear Commissioner Moses:

You ask whether a school district must comply with the competitive bidding procedures specified in Local Government Code chapter 271, subchapter B when seeking to bid a construction contract valued at $25,000 or more in the aggregate for a twelve-month period. Your question requires that we consider the interplay between Local Government Code chapter 271, subchapter B and section 44.031 of the Education Code. You also ask whether a community college district, junior college district, and regional college district must comply with the purchasing and contracting procedures articulated in chapter 44, subchapter B of the Education Code.

Section 44.031 of the Education Code, which the Seventy-fourth Legislature enacted,[1] pertains to school district contracts. Educ. Code § 44.031(a). The section provides in pertinent part as follows:

(a) Except as provided by this section, all school district contracts,[2] except contracts for the purchase of produce or vehicle fuel, valued at $25,000 or more in the aggregate for each 12-month period shall be made by the method, of the following methods, that provides the best value to the district:

(1) competitive bidding;
(2) competitive sealed proposals;
(3) a request for proposals;
(4) a catalogue purchase . . . ;
(5) an interlocal contract; or
(6) a design/build contract.

(b) In determining to whom to award a contract, the district may consider:

(1) the purchase price;
(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 needs;
(5) the vendor's past relationship with the district;
(6) the impact on the ability of the district to comply with laws and rules relating to historically underutilized businesses;
(7) the total long-term cost to the district to acquire the vendor's goods or services; and
(8) any other relevant factor that a private business entity would consider in selecting a vendor.

(e) To the extent of any conflict, this section prevails over any other law relating to the purchasing of goods and services except a law relating to contracting with historically underutilized businesses.

Chapter 271, subchapter B of the Local Government Code provides competitive bidding procedures a governmental entity must use, if applicable, for certain public works contracts. A governmental entity must comply with chapter 271, subchapter B only if the entity "is required by statute to award a contract for the construction, repair or renovation of a structure, road, highway, or other improvement or addition to real property on the basis of competitive bids" and if the contract requires the entity to expend more than $15,000 of its own funds. Local Gov't Code § 271.024. A common or independent school district is a governmental entity to which chapter 271, subchapter B may apply. See id. § 271.021(2)(C).

In Attorney General Opinion JM-1220 this office concluded, in accordance with section 271.024 of the Local Government Code, that the competitive bidding procedures described in chapter 271, subchapter B apply "only when a separate statute requires the contracts for the enumerated projects to be awarded on the basis of competitive bids." Attorney General Opinion JM-1220 (1990) at 3-4. If a separate statute does not require a government entity to competitively bid a contract for the enumerated projects, the entity need not comply with chapter 271, subchapter B. Id. at 5.

We must consider, therefore, whether Education Code section 44.031 requires a school district to competitively bid a contract for the construction, repair, or renovation of a structure, road, or other improvement or addition to real property, see Local Gov't Code § 271.024, assuming that the value of the contract exceeds $25,000 in the aggregate over a twelve-month period. By its terms, section 44.031(a) requires a school district to utilize the purchasing method, of the six listed methods, that will provide the best value to the school district. Thus, when a school board determines that competitively bidding a contract will provide the best value to the school district, section 44.031 requires the school to competitively bid it. In that circumstance, section 271.024 of the Local Government Code plainly requires a school district to comply with the competitive bidding procedures articulated in chapter 271, subchapter B of the Local Government Code. Of course, to the extent that any of the procedures mandated by chapter 271, subchapter B conflict with section 44.031 of the Education Code, section 44.031 prevails. See Educ. Code § 44.031(e).

We turn to your second question, regarding the applicability of chapter 44, subchapter B of the Education Code to community college districts, junior college districts, or regional college districts. Chapter 44, titled "Fiscal Management," and subchapter B, which applies to purchases and contracts, expressly apply to public school districts. Section 130.005(a) of the Education Code indicates that the terms "community college" and "junior college" are synonymous. A junior college district is constituted as a school district for purposes of article VII, section 3 of the Texas Constitution. Educ. Code § 130.122(f).

Additionally, the legislature repealed chapter 130, subchapter F of the Education Code, providing for the creation of regional college districts, in 1985. See Act of May 16, 1985, 69th Leg., R.S., ch. 302, § 3, 1985 Tex. Gen. Laws 1353, 1355. Nevertheless, section 130.122(f), which is located in subchapter G of the Education Code, states that a regional college district is constituted as a school district for purposes of article VII, section 3 of the Texas Constitution.

With respect to the management and control of a junior college district, the board of trustees is to be governed by the general law governing the management and control of an independent school district. Id. § 130.084. Because of the virtual equivalence of a junior college district, a community college district, and a regional college district,[3] we believe section 130.084 of the Education Code pertains to the management and control of all three types of districts. Furthermore, we believe a junior college district's purchasing and contracting duties are part of the management or control of the district. We accordingly conclude that chapter 44, subchapter B of the Education Code, which provides for purchases and contracts of a school district, also applies to a junior college district.

SUMMARY

Where a school board determines that competitive bidding on a contract for an improvement to real property will provide the best value to the school district, section 44.031(a) of the Education Code requires the school to competitively bid the contract. In that circumstance, the school district must comply with the competitive bidding procedures articulated in chapter 271, subchapter B of the Local Government Code, to the extent the procedures do not conflict with section 44.031 of the Education Code.

Chapter 44, subchapter B of the Education Code, which provides for purchases and contracts of a school district, also applies to a junior college district, community college district, and regional college district.

DAN MORALES
Attorney General of Texas

JORGE VEGA
First Assistant Attorney General

SARAH J. SHIRLEY
Chair, Opinion Committee

Prepared by Kymberly K. Oltrogge
Assistant Attorney General

[1] See Act of May 27, 1995, 74th Leg., R.S., ch. 260, § 1, 1995 Tex. Sess. Law Serv. 2207, 2425-26.

[2] Fees charged for professional services rendered are not subject to section 44.031. Educ. Code § 44.031(f).

[3] For the sake of brevity, we will use the term "junior college district" to refer to junior college districts, community college districts, and regional college districts.