THE AYTOIZ~'EY GENE&IL
2
March23, 1959‘.~-pmiffg&~-~~~
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.~'~
Honorable D&&'Q&ch .' ': :"~:~',. ~l~~on'.)lo.~:~-~~~.~~.,~.-: ~:
Mstr$ct At,ttiTniy~ .. ,,..i..:. : _. ~. .
Tarrant ,County.Coqrthouse Ii?:. ,Mai'th& ConitiiMlonersI~
Fort Worth, .Texas CoLrt.of Tarrant County
. ln:.:bubmitting $6, compe-
: tlt;ve blddi-ng'.a pro-
poeid:cont.raCt.calllng
f6r ah expenditure of,
$i?,OOO:~or'inorq .foi- the
.
purchase of.eQulpment
oc mabhlnery.:apecify
the. manufagtuper br
brandof'the &tiipment
'or.inachlpe*~ btiugfit'tb
,. .~. be ~.bid'.U@5~;:"bi‘eniljbdy
.: in' the'epecifi‘cat~lans
l~l~lt~~lon~ .whLih iioiiid
re?tric%i':'thk tjrimber.of
Dear EMMYCrouch: bid@qrs:.to one.' '.
. :.
In.a.recent letter~from your predeieisoti'the f6i-
.lowlng questlix+wetie propoundOd~..to't~s'Qffioe .for,'gn
~opinlon:
"'May th6,Commls~lon'&s G5u6t of ,Tarratit >..
County, in &jbrnltti:ng ;to compefltlve :b@ling
a proposed.contiact callihg~for.~the'~expen.dl+
ture of $2jOOO'or mdre~.fdPz4ie pUrchase.'of.
equlpment.Qr mach$h&y, sp$dify the mknufat$urer
"or brand of th6 equipnletit o.r mac.hlne,~~~s&ht
,to. be bld,,uRon. tn. ?
In a subsequent letter from your offlce"t.he follow-
ing additional facts were secured. We'quote from your let’ter
In part, as follows: '.
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."We have. requested additional facts, froF .
the ~requestlng agency, In cotifotiity with‘your'
tiequest to: the purchaslng.ag~6nt cis~~:-. ;.'
L. :
"qne 1959,~~C,heirrdlBt,:.gtation'dagon,.
,elght'.pasSdnger oapaclty; with.e$&i '.
.wheeli'spkre t+e,~ .w&th oustbmary
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Honorable Doug Crouch, pager 2 (w-579)
.
warranty and service g’uarant~ee.
‘In this case,. there would be three. or
four firms in the local area which could supply
the vehicle and enter a bid. Needless’ to .say,
there would be many other’dealers who,could and
wouid bid on .such a request were. it not ~.for ~the
specirloatlon of the manufaoturer, to w1.t: ,.
IChevrolet. .‘Xt Is probably common knowledge that
Ford, Plymouth,’ and ‘other vehicles -would be. almost
lddnflcal~~wlth the Chevrolet In’ oonstructlon;‘,
quality, and .performance; ‘.
vThe second type of equipment sought to be
purchased ls’not descrlbed.by manufacturer’s name
or trade~name, however the.llmltatlons embodied,
In the spec.lfication,s. effectively-limit then prospec-
tive biddersto a @.$ngla .du@ller; as ~fo.llowb!
nl ~Motor ‘Grader with ..ali~ ,wheel drive,
all wheei steer, ,6’. 6yI .’ Diesel. engine, .
at least- 8Y H. P., Hydraulic :controis
throughout 6 speeds:: forward and 2 ‘re-
verse, electric’starter hlgh’li ft. .
full reverslbie~, 12’ x ,5/s. blade. with
HH .and LH straight. ~6”.end boots, .hydrauilc’
braked, ‘muffler, horn;: .,thermos,fjat;. 1200
ox 24-8 .pSy tires, Iow pressure jvlth regular
tubes, sure grip, tread, -enclosed cab, .~il ,
tooth scarlfler:
“We are advised that. the& Is but one manu-
facturer of a motor grader ,wfth all wheel drlvet
\ as descr~lbed, and there could only be one bidder ‘,
on the above equipment.. we are told,, also that
, . the hapabilities ‘of this equlpment*couldbe
dupllcated’ln~~all respe’cts by a number oft other
motor graders, on the ~market., ,but which .do ‘.not.:
possess the ,‘a11 .,*heei ‘.drlve .feature’. .:Thus, ‘it
appears ,that the ‘Artifl~sal ~reitrlctlon in .the
above~ speclffcation ‘3fmlts~~~rosp~atlvB .bldders
to the single dealer *ho distributes the equlp-
ment described.”
It Is noted that competitive bidding Is re ulred
by the provisions or Section 2 and 2b of Article 2368 a of
Vernon’s Ci,viJ Statutes,. sv,hl.ch le’.as follows.:
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Honorable Doug Crcuch, Page 3 (w-579)
%ectlon ~2, No county, acting through
its Commlssloner6 Court', and 'no'.cl,ty lnthls
S,tate shall thereafter make any contract'calllng
for or rdaulrlng-the.ex .endlture orpaymen~t 'Of '~;
Two Thousand~,($2,.000.00. P Dollars or ~more:out:Of.
any fund, o,r funds of any clty:o>'county 0~~ sub-
division of.any county creating or Imposing a'n
~obllgatlon or~l~lablllty of atiy, nature orchar-
acter~ upon such county ar..any:subdlvl~slon of
such county, or upon such city, without tlrst
submitting such proposed contract to competitive
bids. . . :'
"Section 2b. Contracts for the 'purchase of
ma'c.hlnery for the oonstructlob and/or.malntenance
of'roads and/or streets, .may'be made.by.the govern-
ing bodies of ail counties and cStles wlthln .the
State In accordanoe'wlth'the provisions of.thls
Section. ~The' order for purchase.and notlce for
bids shall provide f.ull~~speclflcatlon of the.
.machlnery desired and contracts for the ~pu,rcha8,e
thereof. shall be!le,t to theslowest and best bidi
der.".
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' Therefore, the~que&on is vihether'.the "competl-
tlve .blddSng" requirement 1s sat,lsfled In a situation where
the.terms of the spe&lflcatlonS of the machinery or eQulpm&t
sought, ,.call for ~a.partlcular brand or manufacturer,. or have
the effect of'llmltlng 'the number'of..bldders .to one.
Sterrett .v;Bell, 24O.,S.W.,2d 516C..;contalns a. g6od definition
of the te~."competi~tlve bl:ddlng :
'b . .
"!Compstltlve bidding' reciulres due .adver-
tlsemebt,.glvlng'~opportunlty' to bid, and eontem-
plates a bidding onthe same undertaking upon
each of the same'mater.lal..ltems~cov.ered b$ the '.
contract.;upon 'the same thing: It requires. that
al&.bldders be.plaaed upon the'same.plane 'of *
equality, and thatthey each.'bld ~upon the same :
terms and condltloni3'Lnvolv&d Jn:all~tIie'~ittms'
and parts of 'the contract., and that the proposal'.
specify as to all blds'the same; or substantially. .'
slmll,ar speciflcatlons. Its purpose la to stlmu-
late competltlon,, preventfavorltlsm and secure
the best-'wo~zk..and -Materials, at Ahe lowest practi-
cable,,prlce, for the best Interests and'~beneflt'
of.the taxpayers and property owners. There can.
be no competltlve bidding in'a ,$egai sense *h&e,
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Honbrable Doug Crduch, pa~@e4 (W-579) i. .
the.terma of .the letting of the contract pre-'
v+~or.reatrict ~~competl~lon,~favor a contractor
or material man,'br Xncrease.'the'dost.6f'th&
work or.of'the mat;ez?itils ,qr o.tiier3te~s going
Into'. the ,~project." :.
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Another .iticid definition ana explanatlon~ of "com-
petltlve~blddlng" IB fdtind~ln 10' McQuillin, Municipal
Corporatlonci, 3rd Edition, Sectloti,,29;30: *
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. 1, . . No scheme or device prdmotive of
favoritism or tinfairness or which imposes'
llmltatlons, not.appilc%ble to bldders,aiike,
will be tol~erated .~ : .
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We shall begln~wlth a +sidera'tioi of~.your first
question; 1.e~. whe'ther the-Con@selone~s~~Court~ m& specl'fy
the particular &and or.mhnufacturer of.the equipment or
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machinery sought.
Two.llnes df.au.thoPlty,ha~e-beeu '&eloped on thls-
point--the l$lchlgan.~rule,and'the Wlscpqs~ti'riiie. Hobart v.
city of Detroit., 17 l4ich. 246, ~97'Am'.pec.: 185;announces
the llbe.ral Michigan rule;.'Here:; the City 'of Detroit, under
Ei‘cfty or.dinance.whfch reiulced c~~&3%l~e.&idding, adver-
tised-for bids for a paving c&tract; &peci~f$ing the patented
pr&&ss to be used--Nlcholsofi. The. right ‘to I&> this type of
. pavement ,ln-Detrolt;v?as .owned exglyslyely~ bg one firm, who
submitted a bid and.to -whonit~he I aontract was $st. l A~taxpayer
sued the City to enjoin the collectioti ~of &~pa+lng assessment
levied upon his property as a .Testilt~ of ~thls -cohtract, 'upon
the theory that the %ont.ract~.was'vold for lack of competltlye
bidding. The Supreme'Coure of,Ml'chig&n 'In ~1868'.hQd against
him In a well-reasoded opJnlon;~~ The Cqurt &Id that.ln many
cases the nature cif.the work ls~so'coinpll~ated'or expensive
that there would be'only 'one‘or two In a posi,tl.oti to submit a
'bid; atid In' the event'that onlk'one such peeson did submit a
bid, the City could.accefit It and let,the 'contraqt. In th%s.
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situation the Courts could n*& declare sQch.'a. contract void
simply because no benefits accrued'by the' a@pllcatlon of the
rule reqtilring competitive bidding, and nelther,,i,does the fa.ct
that.such a ,result Is ln&vltable from,the beginning--only;one
possible bld'der and no posslblIlty of the aticrual of benefits
from competitive bidding-- render the contract'~capable of being
declared vold.by'the Courts. The court also said that a
strict .appllcatlon of the compet1tiv.e bldd~ng~.P~qulrement
would result .ln allowlng:a monopoly,ln regard .t? any necessary
article to suspend necessary',,and ur&en,t public:works.. .It was
further stated that' just because there 1s a'monopoly of a
certain article, that does not preclude competitive bidding,
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Hoborabli D&Crouch, page 5 '(WW-579)
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because othe,r&,m&y bid and take the rlsks'oS securing the
right of using the lnventl6ti-,-the right being 8~marketable
item Itself, I.e., that mbre than done bid 1s~:posslble. The
Court wou1.d not'~construs~,t.he ordlntince so as~$o preclude the
use of new: lnventionsl,or procss?es,., ,;~.
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'. .The~.followlng~‘Zear~'the &prime .CoUrt-'of Wl&bnsin
adopted,the. a'ppb~lt'~':.~Se~..~:in~a~'cnd~,'wher~:Mi~:facts',werer
~slrnll&~.to~ the w.chlgan .cari@:;~::.@eai! ..v. Xtirltbh;' 23,.Wi?.
590 and.$g,.?.peFi 2!5),:' !'~';:.;.j : :
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',.Thls..pr6b$im, hae'b,&n~pfesent6d to' tithe Courts of
T&as on& oilce.~ Ini~tha~t'das;e, Vllblg Bros..v: Cltxof
Dallas, '91..B...ti.t..2d'336,~'.the- C.lty of :pallas, purpuant to 'a
clty~ord~nande'vihlcki~req~l~red;~compet~tlve bidding, adver-
‘. tised for'bids: In vhl'bh lt..w& specified that' bids .may be'
si.$rn~.tt~d .lnl:.a'o~ordand'a.:wi'th~~~:,8ny,,bne ~'of' flyi alternate .'~
: ~.. methpds of gaving; ~. '~.The ..X.lst :IixQuded ,t@?ee;patented prop- .:
cesses'&nd w~...non~patented,',p~oc.~saes.. In +n. :?pl~nlon .wrlt.-
ten by the Co~rnl~~~~n.~~~.'Appsa~s~ and ado,~tad.,bJr,'th,e..Suprems
Cau.rt,lt wa$,,'heId FFat .thg?e ,&&~~f$batlc+ jy,,ep&‘Lnot .vlo-
lativ~..of.t~~,,"chm?eti'ti~~ ;bidd~~gl,requlrement;,:,iThe Csurt :
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,clt&d.Hobai;t'rcrr; .City of'Detti61t,:,su~tia,-w.l%h-apparent~,apT : :
prdval, and quoted .3~~~nl~lpal-'CorDol'atlons; 2d
Edlt.lon, S&tiori, 1299,. as fpU.ow.s.:~- i::' z. :. ..
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~'"f.: ..' ', Although the poker to .s.&ci$y
.& p.a$en'ted ar!icYe:or process.Under laws
reqirirl.qs:.'competltive bldd$ng,ls denied, a8
ti gerieral pr~~po~.~tl~n;:~~~.a~nu~~er,~of.,jurls-~
dic~tljotis; the broad ~pti.opdsi.tlon that 'a ',*,.:~ "
patented articles or~.ijro,qe.gs may be ~spe.clf$ed
under the.reqti~rement;:o~.'competltlve bidding'
Is g+erally'sustained'~~hd.thls tipfietirs,to,be
the. b&t+ rule.: Therefore, It is%&nerallz.
~helti'that.lf all~the.competltlon l;S permitted
of'whlch the..sltuation alloti&,, a patented
artlcle'or grocess..may'be specified.! ~'(Fmgtisi's
oul's I: ':. : :
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"'The l&?& r&a&n',.' It. i~'&bmlt%.ed, for.,
iihe iGl&u&iolding~ municipal..authorlties'in
speclfyi,ng:~.pate~ted~~'mat'6~lal~~~r :a.rtlcles .is
that to~hcild otlierwlse'would defeat the',very ' ~
:pticptisecof the 'le&isiative proviilons.requlring~
contraqt&.to be'let to -the lowest responsible
bldd&after..advertlsemen't.~ The~purpose,bfl
these provls,$on.s Is to prot,ect the public
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Honorable Doug Crouch, page 6 '(WW-579)
Interests. They do this by requiring bids to
be advertised forand the contract'to be let ~to
.- the lowest and best, or lowest.responslble, bid-.
der. But this specificrequirement isonly
Incidental to the main purposes of ~protectlng the
public Interests by securlng.the b%st::advantages
In the way of material ,atid. supplies at the lowest
practical price. ,The authoritles'may; ,however,
protect the interests~of the munlclpallty by.re+
fusing to contract for the..thlng patented if the .*
price 'asked therefor'is unreasonable orprohibitive,
and If there Isany fraud practiced it will v,ltiate
the contract the,same as It will a contract for an
unpatented article. Consequently, In promoting and
protecting the b,est lnterestsz'of the municipality,
It Is necessary that the corporate authdrit$es'be
permltted~to apeclfy pat&ted materials or artic~les
when it 1s~.clearly to the.publlc Interest to .do so,
after carefully.considerlng:the servicablllSiy and
cost.of the materlal.'or article for which the con-
tract Is made. The,n, too, 1,t cannot be presumed
that a provision to secures competltive'blddlng was
intended to apply where'competitive 'bidding on the
-thing required Is impossible; 1"
'Subsequently, &on a Motion for ~Behearing, 96 S.W.
2d 229, the>Supreme Courtwrote another opinion holding
. that competition was'not destroyed under theefacts' of that
case, but affirmatively withheld any complete discussions
of the right of the city to specify patented articles.
It should be noted at this point that the Supreme
Court In its final effort with respect to th1.s case, diluted
and "watered down" the scope and effect of the ~origlnal
opinion of the Commission of Appeals which they had adopted
at first, and restricted the application of the holding only'
to the facts of that case. We.clte and discuss 'this case
not as authority that 'the Comm'l~sslonersl Courtmay specify
a patented article, but only to show that the Supreme'Court,
in Its original oplnion,'.deflnitely declared the Texas law
as regards this propositlon;,to 'be:in line with the Michigan
rule, and that even though the last'expresslon of the Court
on the case does not ~lend~much support to the proposition,
but'reaches its conclusion in another manner;~both'op~l,nlons,
at the very least, .mani,fest the:Cdurt,rs tendency ~t0ward.a
more relaxed rule as 'opposed to a, strict appl;catlon of the
WlsconsLn rule.
Even those Courts which have ~favored the narrow' and
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: Honorable Doug Crouch, page 7 (W-579)
strict Wisconsin rule have seen fit to.make.exceptlons and
broaden .it.consi,dey~bly. 'The :Kentiicky~Cdurt,, in City of ~
SDrlngf.ield v. liaydon;~ 288.9.~:.337; allowed %he specific&-
tlon of a:patented paving procese.where t$e dontract as .a~
whole called for'labor and materials to be used'in addition
to that.whlch was patented.: AnotheP l&ad was, made where
it was shown that ~the 0wne.r of a' patent..wotild'~se$J the
-right to'-tise the,patented.:@rticle to .othersi.
~The~most~~pertinent'.au~h'exceptionia;lile"'by.~those
Courts which have professed.to &here to,the :Wiscb~~l.n rule
is most adequately expressed by'quotlng a paragraph of ,such
Sec'tion 1299 ~0.f McQulLlan, Municipal Corpo+aticins, which iris-
mediateljr ,followti 3hat part: of_Sec$lon J299.wh$ch the Commis-
sion ~bf Appeals'quoted.in~.t,he Vllblg.c$se.
%n'those ~ju&dl&~i&.tihere the:ri& ~~..
to specify 8 patentdd.&yt$.cie.'ls prohfbited,..lt..
Is generally,he'ld th@t'the,,rule $+~.b,6$'ap@y :'.
to.cont#cts..other'%han.:.those.f?r public.improve-,
meats,, and hence does not apply to,such c,ontracts
.aWthose .Sor.,llghtlrjg..;e,~reets,~ pu,rc&~s+,,of :a,.fire
',.ei3gine; .oP a~.'contraCt ~for .thc ,&s$ruct%,on: c&Bar-..
bagb: "i;e.~ yher6 the expepse o~f:the~l~~rovem6tit:'is.
_.. not ~&ssessed.on ~the pro'perty benefited thereby::..
that:+ payable out'of;~the tiunl,clpal funds ...~..n
.,
, the.las$-mentioned excep'tlon.woul.~ .be.tiade,;which r&o;yes :I
- ou~question~and$&iilts, the.ipec!+flcation .bf::'a brand-name
or patented 'article .regardlng~ a county &utomdbiJfi.. .. .
..; I,. .:. ;,,.
Und&r.'.the facWof'your'fi'& question cpri&rt&g
the $pecification'of,a'~959 CheVroIet St&t&n ;Wagon,.it~%.s
the opinion. of.:thl& offlce~ that:.~~he."compeititrCa~bidding"'
requirement will 'not h&q& been violatbd; either 'under,'.the.
Michigan rule dr the. Wip.oonsln rule withy Its ~!exceptl?n. "
Further: credence Is, given’ thls~: result In .thzLs oase became
.there,.,%s the'.actual preeence-of~~o~petitt;ion.~y.'reaeon ‘of, .'
.the fact,~ abco+rig to ‘.jroUb.la& >etteF; that::t@.e& are.:-+4
least four pPoepectlve. bS~ders.~-l,f::not'more;', for;' .St' le.;~,..
not incoticeiiab$i thCit.dea,~eri).of,~hev~olet':prc)du.~ts.ln: .' '.
the surrgu$ding area mlght':be~'X@rested in ,aubmi,tting bids,
on this' proposal:,, ,, .. ..~~.~
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19 McQuil$an, 'Munlcigal Corporation:'.; 3rd Edition,
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Honorable Doug Crouch, page 8 (WW-579)
Section 29.42.1s substantially the same as 3 McQuillan,
Municipal Corooratlon, 2d Editlon,Sectionl299 which the
Commission of Appeals quoted~in it's opPni&, (supra).
However, another phrase is added to the last ,sentence of
the first paragraph (the underlined'-portlpn of the.,quota-
tion, supra) so asto cause the last.sentence to read,as
follows:
"Therefore., It is generally.held that " .d
if all the competition ls.,permltted:of which
the situation allows, a patented artlcle.or
proc~ess may be specified, and In the absenbe
' of bad. faith, the motive of a:clty counselnln
so doing will not be 1nquire.d into. .. : .
We must therefore hasten to add; however, that our conclu-
sion presupposes that the Commisslo,nerslCourt acts In
good faith, has sufflcient~ justlflcati'on and does not abuse
its discretioni in any way,,ln its~sp,eclficatloq~ of the
brand or manufacturer of~.the :vehlble,deslre,~.,.. .:
...
With irespect to-yoursecond .ques&li'~regarding the
terms of the~speclflca~tlons:for a'motor,,graderi :the, Vllbi
case along with the case, Hayden v.iDafllas Coun~ty, ~1 T-6.
3
2d 990, holds~ that competitive'bidding Is-present even
., though only one bid is submitted to,the. pro&al., or.~even
though there is.only.one.
'C company.whiciils ln~ a position to
submlt..a bid to thatproposal..
Therefore, Inline with. the&e cases,#~ ~3.t is our
opinion that the speclflcations%hich you have-related to
us regarding the motor grader, ,which.have the effectof
excluding~all b~idders sxcept one dealer; meet. the require,;
ments of competitlve~blldding:. Certainly::lt seems proper
that the Commissioners' Court shouldbe.allowed:td do in:
directly which they may‘do dSrect~ly>~'%.e./to'in effect
specify a particularmanufacturer 'or,,brandj.,without, so..,doing
by name. _,
'Again, however,. w.e,~
reach~thls co$clusion, pre-
suppo.slng that the Commissioners "I Court d1d.nd.t. abuse Its
discretion In any manner and.,thatthere was's,ufflcient justl-
ficatlon in their ~lncluslon 'in-the speciflcatlons o.f the
partlcul~ar attribute of the piece 'of..equlp~ent.whlch causes
the result that only 'one dealer 'has~the product to fulfill
the specifications.-. ~.
~Honorablc Doug 'Crouch, page'9 (w-579~)
:
: It..is~p.ermissibIe .for the Commissioners! "
~' .~.~C.ourtof~?l!arra.nt .Caunty in submittl-ng tb ' .
competitive ~bidding;a proposed. con'tract
Calling for expenditure :of.$2,000...or more ~'
. for. the pur,cha;se~o.f ap~,autbmobiIe.~to : .~
specify -thenmanufac,tu eror brand .ofthe~ :,. ‘!
ParticuIar gqhlpment~.-2 r ~machine~rysought ..
t.9 b-e'-bid: upon "r embody l,n .the~ spec~ifi-~
”, ~ations~~prov.~sion.s rhlch,.'limlt~ Ethel'numb'er
'o~r..prospec~i~~..bidders on! a roa'd ~grf;der
tO-'one,;.~where. the ~Commlssioners~. Court has
.not' abused its-'disc'retlon.. In ~ahy' manner and
where,the~re~'is~s~ufPlcient justificationto .
prefer one brand.,bver~the,other,.
Ye&v truly,yours,
: :. ..
.WILL WILSON.:
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;, Oeq.~..P; 'Blackburn.;.:Chaiiiaari:: '~ 1;~.
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Leonard.Passmore.
C. Dean Davis
Henry G. Braswell
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