August 30, 1990
Honorable Hugh Parmer Opinion No. JM-1213
Chairman
Intergovernmental Relations Re: Authority of a municipal-
Committee ity to require health benefit
Texas State Senate provisions to be included in
P. 0. Box 12068 specifications for contract
Austin, Texas 78711 security guards (RQ-1991)
Dear Senator Parmer:
You ask whether the City of Houston can authorize
specifications requiring that the city's independent
contractors provide their employees with basic health
insurance benefits. We understand that the question relates
specifically to independent contractors providing security
guard services under contracts with the city. We also
understand that the city formerly employed its own security
guards and has ceased the practice. The city attorney's
office has rendered its opinion on the matter and concluded
that such a requirement would contravene competitive bidding
requirements. We agree.
Chapter 252 of the Local Government Code is the law
that governs city purchases. With certain exceptions that
do not appear to be relevant here, that chapter requires
that cities with 50,000 or more inhabitants let contracts
for amounts over $10,000 by means of competitive bidding.
Local Gov't Code 3 252.021(a). We are advised that the
Houston city charter contains a complementary provision.
Competitive bidding laws are designed to ensure that
the public receives "the best work and materials at the
lowest practicable price." v, 240 S.W.2d
516, 520 (Tex. Civ. App. - Dallas 1951, no writ); see also,
a
Texas Hi hwa omm'n-v. Imnorters
Inc.. 372 S.W.2d 525, 527 ITex. 19631. This end is achieved
bydisallowance of specifications that are unrelated to the
quality or quantity of the goods or services or that
otherwise restrict competition. In Texas Hishwav
Commission, suvra, the court determined that a highway
commission minute order requiring that construction material
P. 6418
,
Honorable Hugh Parmer - Page 2 (JM-1213)
used by the commission be domestically manufactured violated
the competitive bidding statute. The court said "Matters of
quality should be fixed by quality specifications and not by
proscriptions as to localities of manufacture or fabrica-
tion." Id. at 529.
By the same token, we believe that matters of quality
in the provision of security guard services should not be
fixed by requiring that contractors provide their employees
with health insurance benefits. Such a requirement may
result in a work force that is less dependent on publicly
supported health care, but it has no direct relation to the
quality of security guard services.
This office has noted that the legislature may alter
the general competitive bidding rules by adopting exceptions
or authorization that would otherwise contravene the mandate
that goods and services be purchased through unrestricted
competition. Attorney General Opinion JM-712 (1987) (statu-
tory exception for out-of-state bidders found in article
601g, V.T.C.S.); see also Local Gov't Code 5 262.025(d)
(authority for certain political subdivisions to require
that 25% of work be performed by bidder): Attorney General
Opinion JM-881 (1988) (requirement that 25% of work be
performed by bidder's employees violates statute). We have
found no similar exception for a requirement of health
insurance benefits.
It has been suggested that the city is a public health
agency, and in that capacity, it has the authority to enact
such an exception to the competitive bidding statute. As
this office noted in Attorney General Opinion JM-712 (1987),
the state law may only be overcome by an exception defined
by the state legislature.
SUMMARY
The City of Houston may not require,
either through an ordinance or through job
specifications, that its contractors provide
their security guards with basic health
insurance benefits,.
JIM MATTOX
Attorney General of Texas
p. 6419
Honorable Hugh Parmer - Page 3 (JM-1213)
MARY KELLER
First Assistant Attorney General
LOU MCCREARY
Executive Assistant Attorney General
JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General
RENEA HICKS
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Karen C. Gladney
Assistant Attorney General
p. 6420