. _. --
June 20, 1957
Wr. William J. Burke Opinion No. WW-168.
Executive Director
Board of Control Re: Shall the Boar-d of~~Contro1
Austin, Texas fbllow”the‘satlie policy in
awarding Contiacts~‘for -
Armory constructU.in as ‘is
followed in making -awards
for other construction
handled by the’ Board of
Control and/or purchases -
making award to the over-all
Dear Mr. Burke: low bidder?
you have requested an opinion on the following ques-
tion:
“Shall the Board of Control follow the s’ae
policy in awarding contracts for Brmory’construc-
tion as is followed in making awards forother ~-
construction handled~~bp the Board’of Control ‘and/or
purchases - making award to the over-all low bid-
der?”
The facts upon which this question is based, as stated
In your request, are as follows:
“Bids were received for the construction of a
National Guard Armory at Luling, Texas, under file
#NC-41-292-57-32. Copy of tabulation of bids is
attached. Two bids have been considered, namely
that of Horace C. Howard and Zunker Construction
Company. On the basis of the tabulations it has
been determined by the 4rmory and the Board of Con-
trol that the bid of ‘Zunker Construction Company is
the over-all low bid, while the bid of Mr. Howard
is the second low over-all bid.
“The question is raised because the Federal
Government at the present time agrees only to
participati to the extent of 754 of the low base
bid. Under the base bid formula, the Howard bid
is the low w bid, while the Zunker bid is the
-- -. - .
Mr. William J. Burke, page 2 (WW-168)
second low &g& bid. Certain necessary alter-
nates in construction contract, ‘asp per copies
of the alternate schedule attached, reveal that
the alternate costs, which are of necessity in-
cluded in the total costs submitted by Mr. Row-
ard, are considerably in excess of those submit-
ted by Zunker Construction Company. Therefore,
the low base bid submitted by Howard plus the
alternates, produced a higher over-a I 1 or total
cost than the base bid of Zunker Construction
Company, plus alternates. The net result is
that the apparent second high base bid when com-
bined with necessary alternate items in which
the State participates lOO$, produces the lowest
total bid and results in a saving to the State
of Texas.
“I am also attaching a copy of H.R. 2107 of
the 84th Congress, First Session, and call your
attention to Page 4, lines 3 through 8 inclusive,
which relates to this transaction and the atti-
tude of the Federal agency involved.
“The Armory Board has advised that funds for
this construction project will expire as of June
30, 1957, hence it is necessary to expedite this
transaction in order to make the award in ade-
quate time to clear for approval prior to the ex-
piration of the allocated funds.”
In 1952 the United States government proposed to the
Texas National Guard Armory Board alternative contracts covering
construction of Armory facilities to be erected in the State of
Texas. The Texas National Guard Armory Board accepted the op-
tion, which provided that the State of Texas would contract for
all work, materials and/or services required for construction of
facilities for armories and in October 1952 entered into such an
agreement. See Attorney General’s Opinion MS-179 (19551, copy
of which is attached hereto. Section 3 of the National Defense
Facilities Act of 1950 (Ch. 945, P.L. 783) provides:
“Subject to the provisions of section 4 of
this Act, the Secretary of Defense may, in an
amount not to exceed $25O,OOO,OOOover a period of
the next five fiscal years, after consultation
with the respective Armed Services Committees of
the Congress- . . .
. .,
Mr. William J. Burke, page 3 (W-168)
‘l(b) contribute to any State such funds as
he shall determine to be necessary to expand, re-
habilitate, or convert facilities owned by such
State to the extent required for the joint ntlli-
zation of such facilities; and
“(cl contribute to any State such funds for
the acquisition, construction, expansion, rehabili-
tation, or conversion by such State of such addi-
tional facilities as he shall determine to have
been made essential by any increase in strength of
the National Guard of the United States or the Air
National Guard of the United States.”
The first session of the 84th Congress amended the
provisions of the National Defense Facilities Act of 1950 by
enacting Ch. 662, P.L. 302, by adding Section 6(b), which pro-
vides:
“All construction, expansion, rehabilitation
or conversion of facilities in each State pursuan 4
to sections 3 (b) or 3 (c) of this Act shall be
done in accordance with the laws of such State and
under the supervision of officials of such State,
subject to the inspection and approval of the Sec-
retary of Defense .”
Paragraph 3 of Article I of the agreement entered into
by the United States Government and the State of Texas in 1952,
provides:
“ARTICLE I. The State agrees:
"3* To execute construction or supply con-
tracts under regulations, procedures, and policies
in current use by the Government insofar as these
do not conflict with the requirements of State law.
All such contracts, subcontracts, and change orders
shall be subject to prior approval of the Govern-
ment . I1
Article II of the agreement provides:
“The GOVERNMENT
agrees:
“1. To reserve funds for the purpose of pay-
ments directly to the construction contractor or to
Mr. William J. Burke, page 4 (WW-168)
the State for its shares of the cost of construc-
tion of buildings and appurtenances thereto
during the life of the contract for said con-
struction.
“2 0 To pay the construction contractor or
the State as the work progresses for the Govern-
merit’s share of said cost on the basis of the
percentage which its portion bears to the total
cost, PROVIDED,the total amount paid to the con-
struction contractor or to the State or to both,
by the Government shall at no time exceed 75 per
centum of the cost of each facility constructed
under this agreement.”
Paragraph 3 of Article III of the agreement provides:
“3. The Government shall determine what
costs incurred by the State are allowable under
the terms and conditions of this agreement.”
Similar provisions are contained in individual agree-
ments for the construction of various armories in the State of
Texas, including the Armory involved in your request, entered
into in May, 1956.
In view of the foregoing it is noted that pursuant to
the agreements between the United States Government and the State
of Texas, and pursuant to the provisions of the National Defense
Facilities Act, 1950, as amended, by the first session of the
84th Congress, the letting of construction contracts for the con-
struction of armories are to be let pursuant to State Law. See
Attorney General’s Opinions MS-179 (1955) and S-183 (1956).
Therefore, you are advised that it is the duty of the
Board of Control to follow the same policy in awarding contracts
for armory construction as is followed in making awards for
other construction handled by the Board of Control.
According to your letter bids were received for the
construction of the National Guard Armory at Luling, Texas. On
the basis of the tabulation it has been determined by the Texas
National Guard Armory Board and the Board of Control that. the
bid of Zunker Construction Company is the low bid. Zherefore,
you are advised that the contract should be awarded to such bid-
der if it is a responsible bidder and under the agreement the
United States Government’s share is 75% of the base bid of Zunker
Mr. William J. Burke, page 5 (W-168)
Construction Company, and the State's share is 25% of the~'base
bid of Zunker Construction Company plus 100% of the remainder
of the contract.
It is the duty of the Board of Control to
follow the same policy in awarding contracts
for armory construction as is followed in making
awards for other construction handled by the
Board of Control.
Yours very truly,
WILL WILSON
Attorney General of Texas
JR:st:wb
APPROVED:
OPINION COMMITTEE:
II. Grady Chandler, Chairman
Jas. H. Rogers
Jack Goodman
John H. Minton, Jr.
REVIEWEDFOR THE ATTORMEY
GENERAL
BY: Geo. P. Blackburn