Does a Texas county have to take competitive bids before signing a contract to run its municipal airport?

Plain-English summary

Presidio County had an offer on the table: a company would run the county's two municipal airports in exchange for $108,000, paid in three installments of $36,000. The county attorney worried that signing that deal without first taking competitive bids might violate the County Purchasing Act, which generally requires a county to use a competitive process before spending more than $50,000 under a contract. He sent the proposed contract to the AG and asked whether accepting it without other bids would break the law.

The AG started by drawing a line it always draws: it does not construe particular contracts in the opinion process, so it could not tell the county whether this specific deal complied with the law. What it could do was lay out the general legal framework. Because the question involved running an airport, the AG looked first at chapter 22 of the Transportation Code, which lets a local government authorize a qualified person to operate a government-owned airport "by contract, lease, or other arrangement," for consideration the government sets, for up to 40 years. An earlier AG opinion (GA-0190) had concluded that a lease of county airport land under that chapter does not have to go to auction, because the airport-specific authority is more particular than the county's general property-leasing rules. A Texas appellate court agreed in Skypark Aviation, LLC v. Lind, holding the County Purchasing Act does not apply to leasing a county airport for operational purposes.

The AG noted the Presidio situation was a contract rather than a lease, for an airport manager rather than a fixed base operator, and involved the county paying the operator rather than the reverse. But section 22.020 covers a "contract, lease, or other arrangement," only requires the consideration to be "fixed by the local government," and does not rule out the county paying. So, depending on the facts, a court could conclude the contract meets section 22.020 and, consistent with Skypark, is not subject to competitive bidding under Local Government Code section 262.023(a). If instead the contract falls outside section 22.020, the County Purchasing Act would generally apply to an airport-services contract above $50,000 (counting installment payments together). Even then, the commissioners court can exempt a "personal service" contract from competitive bidding if the contract requires a particular, named individual to perform the services, as opposed to anonymous, fungible workers. Whether any of these conditions are met is a factual determination the AG cannot make in an opinion.

Currency note

This opinion was issued in 2019. 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.

What the opinion meant for those who asked

County officials and commissioners courts: At the time of the opinion, the AG read Transportation Code section 22.020 and Skypark to mean an airport operations arrangement could fall outside the County Purchasing Act's competitive-bidding rule, and noted the separate "personal service" exemption a commissioners court can grant by order. The opinion stressed these turn on the specific facts, which the AG would not resolve.

Companies seeking airport management or operation contracts: The opinion explained that an arrangement to operate a county airport may be governed by chapter 22 rather than the County Purchasing Act, but did not bless any particular contract.

The requesting county attorney: The opinion declined to construe the specific Presidio County contract, giving general guidance only and pointing out that whether the contract qualified under section 22.020 or for the personal-service exemption was a fact question outside an AG opinion.

Common questions

Does a Texas county always have to take competitive bids to contract out airport operations?
The AG concluded not necessarily. Transportation Code section 22.020 authorizes a contract, lease, or other arrangement for a qualified person to operate a government airport, and a court could find such a contract is not subject to the County Purchasing Act's bidding requirement.

What did the AG decline to decide?
The AG declined to construe the specific contract Presidio County received. It does not interpret particular contracts in the opinion process, and whether the contract met section 22.020 or qualified for an exemption was a factual question.

What is the "personal service" exemption?
The AG explained that a commissioners court may by order exempt a personal-service contract from competitive bidding under section 262.024(a)(4). The AG reads "personal services" to mean services performed by a particular, named individual chosen by the commissioners court, not by anonymous, fungible workers.

Does it matter that the county would pay the operator rather than be paid?
The AG concluded it did not change the section 22.020 analysis. That statute only requires the consideration to be "fixed by the local government" and does not rule out the local government paying the operator.

What is the threshold that triggers competitive bidding?
Under section 262.023(a), a county generally cannot purchase items under a contract requiring an expenditure exceeding $50,000 without a competitive procedure, and installment or sequential purchases meant to dodge that rule are treated as a single contract.

Background and statutory framework

Presidio County received a contract offer to operate its two municipal airports for $108,000 in three $36,000 installments, and asked whether accepting it without other bids would violate the County Purchasing Act (Local Government Code § 262.023(a), barring purchases over $50,000 without a competitive procedure). The AG explained it does not construe particular contracts in the opinion process (Tex. Att'y Gen. Op. No. KP-0178 (2018)) and gave general guidance.

Chapter 22 of the Transportation Code (§§ 22.001-.901) governs county and municipal airports. Section 22.020(a) lets a local government, by contract, lease, or other arrangement on consideration it fixes and for a term up to 40 years, authorize a qualified person to operate a government airport, with section 22.021 authorizing similar use arrangements. An earlier opinion concluded that a lease of county airport land under section 22.020 or 22.021 need not be made at auction, reasoning the airport-specific authority is more particular than the county's general property-leasing rules in chapter 263 of the Local Government Code, and that section 22.024(a)'s express incorporation of certain chapter 263 requirements for disposing of airport property suggested chapter 22 otherwise prevails (Tex. Att'y Gen. Op. No. GA-0190 (2004); Tex. Loc. Gov't Code §§ 263.001(a), 263.007). A Texas appellate court agreed and applied that reasoning to the County Purchasing Act, holding it inapplicable to leasing a county airport for operational purposes (Skypark Aviation, LLC v. Lind).

The AG noted the Presidio arrangement was a contract for an airport manager with the county paying consideration, but found those distinctions insignificant because section 22.020(a) covers a "contract, lease, or other arrangement" and only requires the consideration to be fixed by the local government, citing TxDOT's model airport manager's contract providing for compensation paid by a city or county. So, depending on the facts, a court could find the contract meets section 22.020 and is not subject to section 262.023(a). If the contract fell outside chapter 22, the AG explained the County Purchasing Act would generally apply to airport operation services exceeding $50,000 in the aggregate, including separate, sequential, or component purchases treated as a single contract (Tex. Loc. Gov't Code §§ 262.022(2), (5), (7), (8), 262.023(c), 262.034(a); Tex. Att'y Gen. LO-94-087), with "professional services" defined narrowly (Tex. Gov't Code § 2254.002(2)(A)-(B)). Finally, the commissioners court may exempt a "personal service" contract under section 262.024(a)(4) if it requires a particular, named individual (Tex. Att'y Gen. Op. No. JM-890 (1988); Tex. Att'y Gen. LO-98-023), a factual determination the AG cannot make in an opinion (Tex. Att'y Gen. Op. No. KP-0220 (2018)).

Citations

Statutory provisions:

• Tex. Transp. Code § 22.001-.901; § 22.020; § 22.020(a); § 22.020(c); § 22.021; § 22.024(a)
• Tex. Loc. Gov't Code § 262.022; § 262.022(2), (5), (7), (8); § 262.023; § 262.023(a); § 262.023(c); § 262.024(a)(4); § 262.034(a); § 263.001(a); § 263.007
• Tex. Gov't Code § 2254.002(2)(A)-(B)

Cases and Attorney General opinions:

• Skypark Aviation, LLC v. Lind, 523 S.W.3d 869, 875 (Tex. App.-Eastland 2017, no pet.)
• Tex. Att'y Gen. Op. No. KP-0178 (2018)
• Tex. Att'y Gen. Op. No. GA-0190 (2004)
• Tex. Att'y Gen. Op. No. JM-890 (1988)
• Tex. Att'y Gen. Op. No. KP-0220 (2018)
• Tex. Att'y Gen. LO-94-087
• Tex. Att'y Gen. LO-98-023

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0246
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2019/kp0246.pdf

Original opinion text

KEN PAXTON
ATTORNEY GENERAL OF TEXAS

April 10, 2019

The Honorable Rod Ponton Opinion No. KP-0246
Presidio County Attorney
Post Office Drawer M Re: Competitive bidding requirements applied
Marfa, Texas 79843 to municipal airport operation (RQ-0253-KP)

Dear Mr. Ponton:

    You tell us Presidio County (the "County") received a contract offer for the operation of

the county's two municipal airports that "requires the payment of $108,000 by Presidio County to
[the company] in three equal installments of $36,000." [1] You explain your concern that if the
County accepts the offer without first receiving other bids, it could run afoul of the competitive
bidding requirement in the County Purchasing Act, specifically section 262.023 of the Local
Government Code. [2] Request Letter at 1-2. You provide a copy of the proposed contract and ask
whether its acceptance without the receipt of other bids would violate the law. Id. Because this
office does not construe contracts in the opinion process, we cannot advise you regarding a
particular contract's adherence with competitive bidding or any other legal requirement. See Tex.
Att'y Gen. Op. No. KP-0178 (2018) at 2. However, we can advise you generally on the issues you
raise.

    Because the context of your question involves the operation of municipal airports, we first

consider chapter 22 of the Transportation Code. See generally TEX. TRANSP. CODE §§ 22.001-
.901 (County and Municipal Airports). Subsection 22.020 of that chapter provides that a local
government, "by contract, lease, or other arrangement, on a consideration fixed by the local
government and for a term not to exceed 40 years, may authorize a qualified person to operate, as
the agent of the local government or otherwise, an airport owned or controlled by the local
government." Id. § 22.020(a); see also id. § 22.021 (authorizing a similar arrangement for the use
of the airport by another). In an opinion concerning the lease of county airport land, this office
addressed the relationship between sections 22.020 and 22.021 of the Transportation Code and the
competitive bidding requirement applicable to the sale or lease of county real property in chapter
263 of the Local Government Code. See Tex. Att'y Gen. Op. No. GA-0190 (2004); TEX. LOC.
GOV'T CODE §§ 263.001(a) (requiring such a sale or lease to be made by public auction unless
otherwise authorized by chapter 263), .007 (authorizing sale and lease of county real property
through sealed bids or sealed proposals). At issue was whether Kerr County could lease airport
hangar space to a company conducting an aviation business without competitive bidding. See Tex.
Att'y Gen. Op. No. GA-0190 (2004) at 1. Noting that the county's express leasing authority
regarding airports is more specific than the county's general leasing authority under the Local
Government Code and finding "no indication that the Legislature intended Local Government
Code chapter 263 to prevail over Transportation Code chapter 22," the opinion concluded that a
"lease of county airport land under section 22.020 or 22.021 does not have to be made at an
auction." Id. at 6. This conclusion was bolstered by the fact that subsection 22.024(a), governing
the disposal of airport property, expressly incorporates certain requirements of chapter 263 of the
Local Government Code, suggesting that the Legislature intended chapter 22 to prevail
otherwise. Id.

    A Texas appellate court recently agreed with the reasoning and conclusion of GA-0190 on

this point and applied its analysis to the County Purchasing Act. See Skypark Aviation, LLC v.
Lind, 523 S.W.3d 869, 875 (Tex. App.-Eastland 2017, no pet.). In Skypark, Ector County sought
a new fixed base operator for one of its airport facilities and issued a request for proposals. Id. at

872. An unsuccessful bidder brought suit, arguing in part that the county was subject to the
     competitive bidding requirement of the County Purchasing Act in chapter 262 of the Local
     Government Code, which would have triggered a waiver of immunity from suit for his claim. See
     id. at 873-74. The court disagreed, pointing to GA-0190 and concluding that "the County
     Purchasing Act is not applicable to Ector County's request for proposal" despite the fact that the
     county had chosen to utilize a procedure similar to what the County Purchasing Act required. Id.
     at 875. The court noted that Ector County sought "an entity to serve as the fixed base operator of
     the airport based upon an acceptable sum paid by the operator to the county," likening the
     arrangement to an airport lease. Id. The court thus determined that the arrangement was governed
     by sections 22.020 and 22.021 of the Transportation Code, referring again to GA-0190 and
     concluding that the County Purchasing Act does not apply to "the leasing of a county airport for
     operational purposes." Id.

     The situation you describe is a contract, not a lease as in Skypark, and it involves an airport
     

     manager position rather than a fixed base operator position. However, because Transportation
     Code subsection 22.020(a) authorizes a "contract, lease, or other arrangement" for a qualified
     person to operate a local government airport, the distinction is insignificant here. TEX. TRANSP.
     CODE § 22.020(a). In addition, the contract calls for the County to pay consideration to the
     potential airport operator. While this may be factually different from Skypark, section 22.020
     requires simply that the consideration for a qualified person to operate the airport be "fixed by the
     local government" and does not rule out the possibility that monetary consideration could come
     from the local government if so chosen by that entity. [3] Id. Depending on the facts, a court could
     conclude based on this broad language that the airport operations contract meets the requirements
     of Transportation Code section 22.020 and is therefore-consistent with Skypark-not subject to
     the competitive bidding requirement of Local Government Code section 262.023(a). [4]

     Should the contract in question not fall within the purview of Transportation Code section
     

     22.020, we consider the competitive bidding requirements of section 262.023 of the Local
     Government Code. That provision prohibits a county from purchasing "one or more items under
     a contract that will require an expenditure exceeding $50,000" without using a competitive
     procedure as described therein. TEX. LOC. GOV'T CODE § 262.023(a). The provision specifies that
     "all separate, sequential, or component purchases of items ordered or purchased, with the intent of
     avoiding the requirements of this subchapter, from the same supplier by the same county officer,
     department, or institution are treated as if they are part of a single purchase and of a single
     contract." [5] Id. § 262.023(c). Section 262.022 defines "separate," "sequential," and "component"
     purchases respectively as purchases "made separately," "made over a period," or "of the
     component parts" of an item or items "that in normal purchasing practices would be purchased in
     one purchase." Id. § 262.022(2), (7), (8); Tex. Att'y Gen. LO-94-087, at 2. The term "item"
     includes services other than professional services as defined by the Professional Services Act and
     thus would likely encompass airport operations services. [6] TEX. LOC. GOV'T CODE § 262.022(5).
     Based on subsection 262.023(c), a contract for airport operation services that does not fall under
     Transportation Code chapter 22 and that is based on installment payments exceeding $50,000 in
     the aggregate would generally be subject to competitive bidding.

     However, a county may exempt a contract for the purchase of certain items, including "a
     

     personal or professional service," from the competitive bidding requirement of section 262.023 "if
     the commissioners court by order grants the exemption." Id. § 262.024(a)(4). This office has
     interpreted the phrase "personal services" in subsection 262.024(a)(4) to refer to services
     "rendered by a person or persons chosen specifically by the commissioners court," as opposed to
     those performed generally by personnel unknown to the commissioners. See Tex. Att'y Gen. Op.
     No. JM-890 (1988) at 5; see also Tex. Att'y Gen. LO-98-023, at 2 ("A personal services contract
     is a contract for the services of a particular individual. Unless the service to be provided is to be
     done by a unique, particular, named individual, rather than by anonymous and fungible workers,
     the contract is not for personal services."). Thus, depending on the facts, an airport operations
     contract could be eligible for exemption from competitive bidding by the commissioners court if
     the contract requires a particular, named individual to perform the services. Such a factual
     determination cannot be made in an attorney general opinion. Tex. Att'y Gen. Op. No. KP-0220
     (2018) at 4.

                                   SUMMARY
     
                   Depending on the facts, a court could conclude that an
           airport operations contract meets the requirements of Transportation
           Code section 22.020 and is therefore not subject to the competitive
           bidding requirement of Local Government Code section 262.023(a).
           Even if an airport operations contract does not fall within
           Transportation Code section 22.020, it could be eligible for
           exemption by the commissioners court from competitive bidding
           pursuant to section 262.024(a)(4) as a purchase for a personal
           service if the contract requires a particular, named individual to
           perform the services.
     
                                         Very truly yours,
     
                                         KEN PAXTON
                                         Attorney General of Texas
     

JEFFREY C. MATEER
First Assistant Attorney General

RYAN L. BANGERT
Deputy Attorney General for Legal Counsel

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

BECKY P. CASARES
Assistant Attorney General, Opinion Committee

[1] See Letter from Honorable Rod Ponton, Presidio Cty. Att'y, to Honorable Ken Paxton, Tex. Att'y Gen. at 1 (Oct. 12, 2018), https://www2.texasattorneygeneral.gov/opinion/requests-for-opinion-rqs ("Request Letter").

[2] Section 262.023(a) prohibits a county from purchasing "one or more items under a contract that will require an expenditure exceeding $50,000" without using a competitive procedure as described therein. TEX. LOC. GOV'T CODE § 262.023(a).

[3] See also Tex. Dep't of Transp., Aviation Div., Model Airport Manager's Contract Agreement, https://www.txdot.gov/inside-txdot/division/aviation/airport-rules.html (providing for compensation paid by a city or county to an airport manager).

[4] Subsection 22.020(a) requires that the arrangement "authorize a qualified person to operate, as the agent of the local government or otherwise, an airport owned or controlled by the local government" and that the term not exceed 40 years. TEX. TRANSP. CODE § 22.020(a). Additionally, an arrangement made under section 22.020 must be made subject to the terms of any state or federal aid grant or loan. See id. § 22.020(c).

[5] See also TEX. LOC. GOV'T CODE § 262.034(a) (providing that a county officer or employee who "intentionally or knowingly makes or authorizes separate, sequential, or component purchases to avoid the competitive bidding requirements of Section 262.023" commits an offense).

[6] See TEX. GOV'T CODE § 2254.002(2)(A)-(B) (defining "professional services" as services within the scope of the practice of accounting, architecture, landscape architecture, land surveying, medicine, optometry, professional engineering, real estate appraising, or professional nursing; or services provided in connection with a person licensed or registered in one of those fields).