Untitled Texas Attorney General Opinion

The Honorable Homer A. Foerster Opinion No. H- 921 Executive Director- _.,., State'Hoard'of'Control .?Re,: '.Whether sheltered P. ~0. Box::l3047, Capito?Station. worksho$brganised by Austin,'Texas '.70711-;"- the Department of Mental H'ealth and Mental Retarda- ~tion may bid on state contracts. bear 'Mr."',Fo'erstert,: Several unsheltered$orkshops'organized"by-.the.-'Texas Department of,,Mental Health and Mental Retardation under article 5547~202; section 2.17(b), V.T.C.S., haves asked to be placed on the bid list maintained by the~Board.,of Control so that:they,willtbe::jnvited to bid on',statecontracts; YOU wish to'know,whether 'such sheltered workshops may.;bid'on state contracts'under:the State Purchasing Act-of.1957, article 664-3,;V.T.C.S.; and if they may, whether~~the'goods they.produce are entitled to the preference' set:out in section 13 of article 664-3. ~~.. Articles 5547-202, section 2.17(b),..read.s‘inpertinent part: (1) From funds available to it the Department [of Mental Health and Mental Retardation] is authorized to provide mental'health and mental retardation. services through the operation of sheltered workshops and to contract with individuals or public or private entities for all or any part of such services. The Honorable Homer A. Foerster - page 2 (H-921) (2) The Department is authorized to contractwith individuas or public E private entities for the sxe of @ and servrces oroducedor made=iEble by the sheltered workshop programs. The goods and services may be sold on a cash or credit basis. '(3) An operating fund may be established for each sheltered workshop operated by the Department . . . and all proceeds from the sale of sheltered workshop goods and services shall be~deposited in the operating fund .,. . . Money in the operating funds may only~be expended ,in the operation of sheltered'workshops for the purchase of supplies, materials, services, and equipment . . . . (Emphasis added). These provisions authorize the Department of Mental Health and Mental Retardation to establish sheltered workshops and make bindina contracts to sell the coeds they _ produce _ to public entities. See Stauffer v.-- San Antonio, 344 S.W.2d 158 (Tex. Sup. 1961); State v. Ra land Clinic-Hospital, 159 S.W.2d 105 (Tex. Sup. m. -"Xi&-entity" has been defined to include the state and its political and administrative subdivisions. Wade - v. -~ New Jersey Turn ike Authorit A.2d 232 (N.J. Sup. 19m See An + erson v. di %2d 227 (Tex..Civ. App. -- Austin953, mandssdenied). We find nothing in the State Purchasing Act of 1957 that orevents the Department from contractinq through the Board of-Control to sell products of the sheltered workshops to public entities. Article 664-3, subsections 8(b) and (c), provide standards for evaluating bidders for inclusion on the bidders list and for awarding contracts. These standards do not distinguish between private firms and state agencies. Section 12 of article 664-3 forbids members, employees, or appointees of the Board from being interested in a contract or bid, but there is no comparable statute limiting state agencies from having an interest in contracts or bids with the Board. See also Attorney General Opinion M-743 (1970). We take noteof thePrison-Made Goods Act of 1963, which does not merely permit the Board of Control to contract with a state agency, but actually requires it to purchase goods from the Texas Department of Corrections. V.T.C.S. art. 6203c, § 9. - See Attorney General Opinion M-126 (1967). P- 3861 The Honorable Homer A. Foerster - page 3 (H-921) Other states have enacted laws requiring state agencies to purchase goods produced by state owned and operated workshops for the handicapped. See Ga. Code Ann. § 99-801 et seq.; Md. Code Ann. art. 30.X 4-6A; Mass. Ann. Laws cr 6, 99 134, 143. In Attorney General Opinion M-743 (1970) this office decided that the Board of Control could award the Department of Corrections a contract to refurbish and rebind textbooks for the State, provided that the competitive bid provisions of article 664-3 were complied with. The opinion discussed article 16, section 21 of the Texas Constitution, which requires that certain articles be purchased under competitive bids, and stated~that- "[slection 21 contains no statement nor implication of distinction between bids by private enterprise and a state agency." Nor do we note any such distinction in article 664-3. The Department of Mental Health and Mental Retardation may contract through the Board of Control to sell goods produced by sheltered workshops, and it may bid on state contracts under article 664-3 as a step in contract formation. Section 13 of article 664-3 reads as follows: The following manufactured products, if they meet the state specifications as to quantity, quality, and price, shall have preference in purchases made of those types of items by the Board: Products of workshops, organizations, or corporations whose primary purpose is training and employing mentally retarded persons or physically handicapped persons. We believe that this preference is valid. - See Attorney General Opinions O-3312 (1941) and O-1678 (1939). It embodies the legislative intent to prefer goods produced by "work- shops . . . whose primary purpose is training and employing mentally retarded persons . . . " if the goods meet state See also V.T.C.S. arts. 664-5, 664-6. specifications. -- Sheltered workshops are organized'under article 5547-202, section 2.17(b) to "provide mental health and mental retarda- tion services." The money they earn must go back into operating and maintenance expenses. The primary purpose of the workshop is not to make profits, but to benefit the participants. We conclude that the sheltered workshops established for mentally retarded people by the Department qualify for the preference givenby section 13 of article 664-3. P. 3862 The Honorable Homer A. Foerster - page 4 (H-921) SUMMARY The Department of Mental Health and Mental Retardation may contract to sell the products of its sheltered workshops to the State under article 664-3, V.T.C.S. The goods produced by such sheltered workshops for mentally retarded persons are entitled to the preference set out in section 13 of article 664-3. Very truly. yo,urs, JOLL<@ . Attorney General of Texas 8f APPROVED: DAVID M. KENDALL, First Assistant Opinion Committee jwb p. 3863