Attorney General Opinion DM-387 provides that Chapter 44 of the Texas Education Code, which provides for purchases and contracts of a school district, also applies to a junior college district, and regional college District.
According to Section 271.003(9), “school district” means an independent school district, common school district, community college district, junior college district or regional college district organized under the laws of this state.
Texas Education Code 44.031 (a);(b), states that all contracts, except for the purchase of produce or vehicle fuel, valued at $50,000 or more, for each 12-month period are to be made by the method or methods that provide the best value to the district. The law enumerates several options for competitive procurement that are available to school districts. These options include:
1. Competitive bidding,
2. Competitive sealed proposals,
3. Request for proposals for services other than construction services,
4. An interlocal contract,
5. The reverse auction procedure as defined by Government Code 2155.062(d), and
6. The formation of a political subdivision corporation under Local Government Code 304.001.
Professional and nonprofessional service contracts involving federal funds are required to be let on a competitive basis (competitive proposals or bidding), under 34 CFR Section 80.36 (Code of Federal Regulations).
A district’s local policy concerning competitive bidding requirements may be more restrictive than corresponding statutorily defined requirements, according to the local Board’s exercise of discretion regarding fiscal management.
Competitive bidding is a formal process that may also be referred to as competitive sealed bidding, sealed bidding or formal bidding. The competitive bidding process required that bids be evaluated and awards made based solely upon bid specifications, terms and conditions contained in the request for bids document, and according to the bid prices offered by vendors and pertinent factors that may affect contract performance.
The competitive sealed proposal process is an alternative to competitive bidding. The terms and conditions of competitive sealed proposals are identical to those for competitive bidding except that an important difference between competitive sealed proposals and competitive sealed bidding relates to the finality of initial offers. Under competitive sealed proposals, changes in the nature of a proposal, and in prices, may be negotiated after proposals are opened. In contrast, changes in the price of goods and services are not negotiable in the competitive bidding process.
The College District may contract or agree with another local government, the state or a state agency, including the State Purchasing and General Services Commission, to perform governmental functions and services. Requirements for interlocal contracts include:
1. Authorization by the governing body of each party to the contract,
2. Statement of the purpose, terms, rights and duties of the Contracting parties, and
3. Specifications that each party paying for the performance of governmental functions or services must make those payments from current revenues available to the paying party. Design/build is a method of project delivery in which the school district contracts with a single entity to take responsibility for both the design and construction of a project. The use of a design/build contract must be through a request for proposals or similar competitive methodology for selection of the vendor to provide the facility and/or financing.
Except as specifically noted within the Board approved purchasing policy, the following guidelines apply to all rentals, leases, purchases, lease-purchases and contracts:
1. Purchases costing from $0 to $2,999 shall require no verbal or written quotes. However, all purchases should be made from the lowest responsible vendor. Purchasers are encouraged to obtain a minimum of three comparable quotes.
2. Purchases costing from $3,000 to $14,999 shall require competitive written quotes solicited from at least three vendors.
3. Purchases costing from $15,000 to $24,999 shall require either one of the methods described in Texas Education Code 44.031 or three written quotations. Vice President of Business Services may determine that it is in the best interest of the college to conduct a sealed competitive bid process.
4. Purchases costing $25,000 or more must use either formal sealed request for quotation (RFQ), formal sealed request for proposal (RFP), Interlocal Agreement or Sole Source. At least three vendors must be solicited, a formal bid opening conducted, and statutorily required advertising performed.
5. All purchases costing $25,000 or more require approval by the Board.
6. If originally bid, change orders greater than 25 percent of the total cost must be bid. Change orders greater than $25,000 require subsequent Board action.
In case of emergency purchases where the cost is $25,000 or more, the Vice President of Business Services must be notified, in writing, immediately so the proposed purchase can be approved by the College President and the Board finance committee before any funds are obligated. Such approval will be granted if the purchase is necessary to conduct classes or other essential school activities.
College District officials and employees cannot accept anything of value from a vendor, such as personal gifts or gratuities, which may be construed to have been given to influence the purchasing process.
If a Board member or member of their immediate family has a financial interest in a business entity(s), they are required to disclose this relationship through the execution of an affidavit. Board members should abstain from voting on award of contracts to businesses in which they or their immediate family members have a financial interest.
An employee may not participate directly or indirectly in a procurement when the employee knows that:
1. The employee or any member of the employee’s immediate family has a financial interest pertaining to the procurement;
2. A business or organization in which the employee, or any member of the employee’s immediate family, has a financial interest pertaining to the procurement; or
3. Any other person, business or organization with whom the employee or any member of the employee’s immediate family is negotiating or has an arrangement concerning prospective employment is involved in the procurement.
If not provided for in the original bid contract, subsequent purchases of $25,000 or more are to be treated as separate contracts and must also be bid. Such purchases cannot be made from the same vendor, even at the same bid price(s), without competitive bids.
EXEMPTIONS FROM COMPETITIVE BIDDING
The following purchases are exempted from competitive bidding requirements.
1. Purchases of produce and motor fuel.
2. Purchases from the State Bid Contract of the General Services Commission.
3. Purchases from the Texas Department of Corrections.
4. Purchases from the Texas Industries for the Blind and Handicapped.
5. Purchases through cooperative bidding pools under inter-local agreements, wherein the administrator for the cooperative is responsible for complying with competitive bidding statutes.
6. Emergency purchases necessary to repair or replace damaged equipment that is destroyed or severely damaged, because the time delay imposed by the competitive bidding process would prevent or substantially impair the conduct of classes or other essential school activities.
7. Items available from only one source, in compliance with sole source purchasing guidelines contained within this policy.
8. Services of any licensed architect, physician, certified public accountant, land surveyor, professional engineer, fiscal agent, attorney, or construction management consultant. However, Government Code, Chapter 2254, requires a two-step negotiation process for the acquisition of architectural or engineering services. The two-step process only allows negotiation of price after an initial selection based upon demonstrated competence and qualifications of the person/firm.
SOLE SOURCE PURCHASES
Selected purchases may be exempt from competitive procurement if they meet established criteria for a sole source purchase. Documentation must be obtained from the vendor which identifies the item or product to be purchased, and confirms that competition in providing the item or product is precluded by the existence of a patent, copyright, secret process, or monopoly.
REJECTION OF BIDS
The Board may reject any and all bids, reject all bids and readvertise for any reason, or reject all bids and decide not to rebid.
Purchases that would be considered one project under normal purchasing practices, such as paving contiguous parking lots surrounding buildings at a campus, may not be split. The competitive bidding law applies to the aggregate purchase. Bidding requirements may not be circumvented by purchasing related items, or equivalent items from separate vendors, under separate purchase orders (component parts) that cannot serve in and of themselves the purpose and function for which the purchase is being made. Separate, sequential and component purchases are illegal.
AWARDING A CONTRACT TO OTHER THAN THE LOW BIDDER
There is no requirement in state law that a contract for personal property be awarded to the lowest bidder; however, a decision to award a contract to a bidder other than the lowest bidder should reflect the exercise of sound discretion by the district. Texas Education Code 44.031 states that in determining contract awards to vendors, the College District may consider:
1. Purchase price.
2. The reputation of the vendor and of the vendor’s goods and services.
3. The quality of the vendor’s goods and services.
4. The extent to which the goods or services meet the college district’s needs.
5. The vendor’s past relationship with the college district.
6. The impact on the ability of the college district to comply with laws relating to historically underutilized businesses.
7. The total long-term cost to the college district to acquire the goods or services.
8. Any other relevant factor specifically listed in the request for bids or proposals.
The College District may contract with certain individuals to perform services, including non-credit instructional services, on an “as needed” basis. The College District provides no training to these individuals to enable them to perform their function in a particular method or manner. Their services are not an integral part of the College District’s operations. Work is performed on a part time, nonrecurring basis. Independent contractors are paid by the job, although disbursements may be split at the convenience of the College District. Contractors do not perform services exclusively for the College District. Contractors are not subject to dismissal for reasons other than nonperformance of contract Specifications.
Termination of their relationship with the College District prior to completion of contract requirements may subject independent contractors to a penalty.
The College District’s relationship with an independent contractor is governed by the contract signed by both parties. Disbursements exceeding $600 in any calendar year shall be reported to the contractor and the Internal Revenue Service according to information provided by the contractor on the W-9 form.
All contracts must be approved in advance by the College District President or Vice President of Business Services, or the appropriate dean as applicable.
Circumstances not specifically addressed in the policy shall be governed by the applicable statutory authority as found in the Texas Education Code, Local Government Code, Texas Revised Civil Statutes, Texas Attorney General Opinions, federal regulations, and other sources.