Texas County Progress

The Official Publication of the County Judges and Commissioners Association of Texas

Key Concept: Competitive Bidding

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KEY QUESTION: 

What are the statutory regulations regarding competitive bidding?

 

MAIN REFERENCE POINT: 

Texas Local Government Code Chapter 262–The County Purchasing Act

 

ADDITIONAL REFERENCE POINTS: 

  • Local Government Code Chapter 271, Subchapters B and D, which includes laws related to competitive bidding on public works contracts and authorization to participate in awarded state cooperative bids;
  • Local Government Code Chapter 791 relating to cooperative bids, authorizing county purchases through properly established cooperatives; and
  • Texas Government Code Chapter 2267, a newly established section of the law which became effective Sept. 1, 2011. This chapter includes alternative methods of acquiring construction services.  The law related to counties was previously included in Local Government Code Chapter 271. When 2267 was established, the wording was also changed.

Editor’s Note: The Texas Government Code now contains two sections titled “Chapter 2267.” See “Purchasing Changes” for a discussion of the first Chapter 2267.

TALKING POINTS:

  1. State law requires that public entities:
    • have specific legal authority to make county purchases;
    • meet the requirements of specialized purchasing statutes;
    • engage in competitive bidding; and
    • meet certain budget and finance restrictions.
  2. Counties cannot spend money unless it is budgeted and cannot pay for a purchase if it was not made according to law. In addition, the county auditor must verify availability of funds for a contract to be enforceable in counties with a population over 225,000.
  3. The County Purchasing Act allows a county to appoint a purchasing agent under different scenarios depending on its size and preference. The agent is responsible for procuring all goods and services needed by the county to perform its essential functions and ensuring that those goods and services are procured in compliance with the County Purchasing Act. The agent is also responsible for accounting for all county property and maintaining an accurate inventory of that property.
  4. Sealed bids or proposals are required for purchases over $50,000. This applies to the purchase of one or more items. Separate, sequential, or component purchases to avoid the law are not allowed. Certain exemptions exist per Chapter 262. Payment by certificates of obligation are governed by a separate law, and special rules also apply for anticipation notes.
  5. *A notice of a proposed purchase must be published at least once a week for two consecutive weeks in a newspaper of general circulation in the county, with the first day of publication occurring at least 14 days before the date of the bid opening.  If there is no newspaper of general circulation in the county, the notice must be posted in a prominent place in the courthouse for 14 days before the date of the bid opening.  The notice published in a newspaper must include:
    • a general statement of the proposed purchase;
    • the name and telephone number of the purchasing agent; and
    • the county website address, if any.The statute does not require more than two notices in one newspaper or limit the county from providing additional notice for longer periods or in more locations. *
      (House Bill 1694, passed by the 82nd Legislature, altered the original wording of the statute.)
    • All bidders must have the opportunity to:
      • bid on the same item;
      • bid on equal terms; and
      • have their bids judged by the same standards as set forth in the specifications.
    • Bids or proposals may be submitted in hard-copy format or through electronic transmission and must be received in a fair and confidential manner.
    • If a county official or employee intentionally or knowingly violates purchasing statutes, criminal penalties apply.
    • House Bill 1694 also added Section 262.037 to the County Purchasing Act, which reads as follows. “QUALIFICATION.  An officer authorized to make a purchase on behalf of a county or a county department or office may not make any purchase until providing to the county judge a signed acknowledgment that the officer has read and understands this chapter.  This section does not apply in a county that has appointed a purchasing agent under Subchapter B.”