KEY QUESTION: What are the statutory requirements regarding competitive bidding?
MAIN REFERENCE POINT:
Texas Local Government Code Chapter 262 – The County Purchasing Act
KEY ADDITIONAL REFERENCE POINTS (Note: There are many more laws that impact County purchasing.):
- Local Government Code Chapter 271, subchapters B, C, D, and J, relating to competitive bidding on certain public works contracts, certificates of obligation, authorization to participate in awarded state cooperative bids and design-build procedures for certain civil works projects.
- Local Government Code Chapter 791 relating to cooperative bids, authorizing county purchases through properly established cooperatives.
- Texas Government Code Chapter 2269. Includes alternative methods of acquiring construction services.
- Local Government Code Chapter 176, conflict of interest chapter requiring local government officials and vendors to disclose employment, gifts, and business relationships. The requirements also apply to certain family members.
- Texas Government Code Chapter 2252 requiring disclosure of interested parties to contracts of a governmental entity that require a vote of the governing body of the entity or have a value of at least $1 million; prohibits contracts with terrorist organizations or a company working with them; includes many other requirements related to county procurement.
- 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; meet certain budget and finance restrictions; and meet certain disclosure requirements about relationships with vendors.
- 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.
- 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.
- 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.
- For purchases over $50,000, 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. The statute also specifies information that must be included in the notice.
- 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. New legislation in 2021 allows a county to require electronic transmission if the county provides the bidders the technology needed for submittal.
- If a county official or employee intentionally or knowingly violates purchasing statutes, criminal penalties may apply.
- Section 262.037 of the County Purchasing Act defines purchasing authority for counties where there is no appointed purchasing agent: “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.”
Narita Holmes, MBA, CPA, CIA, Government Procurement and Compliance Consultant, Former Ector County Purchasing Agent, contributed to this article.