May 12, 1969
Honorable William J. Burke Opinion No. M-392
Executive Director
State Board of Control Re: Is the Board of Control
Sam Houston State Office required to make an award
Building based on a bid which is
Capitol Station low only because of a
P. 0. Drawer GG cash discount, which the
Austin, Texas 78711 Board finds cannot be
legally earned under the
Dear Mr. Burke: terms of the bid proposed?
you have requested our opinion on the following
question, to wit:
"Is the Board of Control required to
make an award based on a bid that is low
only by virtue of a cash discount, when
it has been determined by the Board of
Control, on the basis of facts and in-
formation available to it, that the cash
discount may not be legally earned under
the terms of the bid proposal?"
The Board of Control put out bid invitations
on letterpress printing, as authorized by the State Pur-
chasing Act of 1957 (Article 664-3, V.C.S.). You state
that the Mouton Printing Company of Houston, Texas, sub-
mitted a bid containing a 5% cash discount. The Board
of Control found as a matter of fact that said cash dis-
count cannot be legally earned by the State under the bid
proposal. Since we have not been furnished all of the
facts, we are not in a position to pass upon any law ques-
tion, which might be posed therefrom, such as whether the
Board's decision amounted to an abuse of discretion.
The Board of Control has the authority to reject
all bids, or parts of bids, when the interest of the State
will be served thereby. Article XVI, Section 21, Constitu-
tion of Texas; Article 664-3, Section 8(e), V.C.S. In
determining the lowest, responsible and best bid the Board
is required to consider those factors set out in Section
8(f) of said Article 664-3. After considering the stat-
utory and consititutional requirements, the Board of Control
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Honorable William J. Burke, page 2 (M-392)
has the discretionary right to determine the lowest, re-
sponsible and best bid.
The Board of Control has determined that, under
the facts, the State is unable to pay for the letterpress
printing in time to earn the cash discount. Assuming
that the cash discount cannot be legally earned, the Board
shall award the contract to the bidder which it considers
to have submitted the lowest, responsible and best bid
without regard to the cash discount provision.
SUMMARY
-------
In determining the lowest and best bid
the Board of Control must consider the stat-
utory requirements contained in Section 8(f)
of Article 664-3, V.C.S. Where a cash dis-
count is authorized in a bid proposal which
the Board of Control determines, as a matter
of fact, cannot be earned by the State, and
assuming that the cash discount cannot be
legally earned, the Board of Control shall
award the contract to the bidder it finds
to have submitted the lowest, responsible
and best bid without regard to the cash dis-
count.
Ver&&uly yours,
6?ivczzzz
C. MARTIN
General of Texas
Prepared by Jack Sparks
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Kerns Taylor, Chairman
George Kelton, Vice-Chairman
Z. T. Forteecue III
Scott Garrison
Bill Allen
John Banks
W. V. Geppert
Staff Legal Assistant
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