The opinion
Honorable Wm. J. Burke Opinion No. ~~-158
Executive Director
State Board of Control RE: In building projects
Austin, Texas which are designed by
the Board for Texas
State Hospitals and
Special Schools, is
the exclusive autho-
rity and duty to enter
into the building con-
tract on behalf of the
State vested in the
Hospital Board or in
the Board of Control?
Dear Mr. Burke: And related questions.
You have requested an opinion on the following
questions:
1. In building projects which are designed by
the Board for Texas State Hospitals and Special
Schools, is the exclusive authority and duty to
enter into the building contract on behalf of the
State vested in the Hospital Board or in the Board
of Control?
2. In building projects which are designed
by the Board for Texas State Hospitals and Special
Schools, is the exclusive authority and duty to
prescribe (a) the forms and (b) the conditions
upon which bids are submitted to the State vested
in the Hospital Board or in the Board of Control?
3. In the event that the answer ~to either
of the above questions is that such authority and
duty are vested in the Hospital Board, does the
Board of Control have the authority to disapprove
and reject the contracts entered into by the Hos-
pital Board in the event it is made to appear to
the Board of Control that the bid forms and con-
ditions prescribed and used by the Hospital Board
in arriving at the contract price result in a
substantial unnecessary expense to the State?
Hon. Wm. J . Burke, page 2 (~~-158)
4. Do documents, such as the invitation to
bid, the instructions to bidders and the bid pro-
posal form, constitute a part of the contract or
agreement, or do they constitute a part of the
plans and specifications?
These questions are propounded in view of Article
7047c-1 Sec. 3(d) V.A.C.S. a part of Chapter 1, Acts of
First Called Session 51st Legislature (195a) reading as
follows:
“Sec. 3. (d) All founds credited to the
State Hospitals and Special Schools Building
Fund under this Act are hereby a
the Board for Texas State
Schools for the purpose of constructing, repair-
ing and equipping such buildings as in the opinion
of the Board are necessary to the proper care of
those committed or to be committed to such hospi-
tals and special schools according to the law.
Provided, however, the fees paid to an architect
shall not exceed six per cent (68) for the plans,
soecifications and suoervision of said buildinn
and all contracts made fork and the final accepiance
in connection with such construction other than the
plans
review and approval of the Board of Control.”
-(Emphasis supplied)
The Hospital Board was created by House Bill No.
1 page 588, Acts 1949 Regular Session (Article 3174b V.A.C.S.)
and Section 2 of said Act, with reference to the powers
of the Hospital Board, provides as foilows:
“Sec. 2. * * * * * * Effective September i, 1949,
the contr 01 and management of, and all rights ,
privileges, powers, and duties incioent thereto
including building, design and construction of
the Texas State Hospitals and Special Schools
which are now vested in and exercised by the
State Board of Control shall be transferred to,
vested in, and exercised by the Board for Texas
State Hospitals and Special Schools. Pr ov ided,
however, that the Board of Control shall contfnue
to handle purchases for such institutions In the
same manner as they do for other State agencies.”
Attention is also called to the fact that the above
Act creating the State Hospital Board was approved by the
Governor and became effective on June 4, 1949. At the
..- h.
Hon. Wm. J. Burke, page 3 (w-158)
same Legislature there was passed Senate Bill 97, Chapter
323, Acts of the 5lst Legislature, Regular Sesslom, ,page
606, an amendment to Articlewhich specifically
681, pro-
vided that the Board of Control should design all public
buildings except those of the Prison System and the
Hospital Board. This was approved by the Governor and
became effective June 7, 1949.
It is clear that under the two statutes above men-
tioned, the Legislature intended to deprive the Board of
Control of all power or duty with reference to the con-
struction of buildings for hospitals.
At the outset, attention is called to the fact that
this statute (7047c-1) was originally only a very small
portion of a tax statute, to-wit, Acts 1950, 51st Legis-
lature, 1st Called Session, Chapter 1, page 1, which was
an amendment to a previous tax statute originally enacted
in 1935 and amended practically at each session of the
Legislature .
This 1950 statute, which contains Article 7047c-1
amended Section 3 of the 1935 act and incidentally pro-
vides that it is amended “so as to hereafter and until
August 31, 1957, reads as follows”. It then divides
Section 3 into seven paragraphs.
We do not believe that the Board of Control has
any authority other than to review and pass upon the con-
tracts after they have been completely entered into by
the Hospital Board.
Itis our opinion that the Legislature in enacting
the above Act (V.A.C.S. Art. 3174b) creating the Board
for State Hospitals and Special Schools transferred from
the Board of Control to the Texas Board for State Hospi-
tals and Special Schools (hereinafter referred to as
Hospital Board), the responsibility land power to negotiate,
prescribe the form of bids and make contracts for the
buildin and construction of State Hospitals and Special
3Z7iGZE Section 2 of the Act expressly states that
buildin desi n and construction of Texas State Hospitals
and Spefiadols are included in the rights,I~;;i~;~s
and duties transferred to the Hospital Board.
opinion that the Legislature having expressly transferred
to the Hospital Board the responsibility and duty of build-
ing, designing and constructing State Hospitals and Special
Schools, also trans,ferred to and ,invested in the Hospital
Board the power necessary to carry out such responsibilities
and duties.
Section 2 of the Act also expressly provides that
. -. .“.
Hon. Wm. J. Burke, page 4 (WW-158)
the Board of Control shall continue to "handle purchases"
for the State Hospitals and Special Schools. It is our
opinion that the word 'purchasing" as used in the section
and read in context with the other words and phrases of the
section, does not include the responsibility and power to
of Siate Hospitals
scribe the form of
bids or the manner of bidding for smuilding contracts.
The Legislature in Section 2 spells out building, design
and construction as rights, privileges and duties separate
from purchasing, and it transfers the building, design, and
construction rights, privileges and duties to the Hospital
Board and retains the "handling of purchases" in the Board
of Control. It is our opinion that the power to make con-
tracts necessarily follows the responsibility of building
and constructing the State Hospitals and Special Schools.
Therefore, in answer to questions 1 and 2, it is
our opinion that in building projects which are designed
by the Board of Texas State Hospitals and Special Schools,
the exclusive duty and authority to enter into building
contracts on behalf of the State is vested in the Texas
Board for State Hospitals and Special Schools, and the
exclusive duty and authority to prescribe the forms and
conditions upon which bids for such building and construc-
tion contracts are to be submitted to the State are vested
in the Board for Texas State Hospitals and Special Schools.
With reference to building construction contracts
made by the Hospital Board before August 31, 1957, it is
our opinion that subsection (d) of Section 3 of Article
7047c-1 as amended, vests in the Board of Control the
authority to review and approve such contracts. Upon a
fact finding by the Board of Control that such contract
results in a substantial unnecessary or unreasonable~ex-
pense to the State, the Board of Control has the authority
to disapprove such contract. However, the Board of Control
cannot arbitrarily disapprove the contract. (Attorney
General's Opinion V-1462, 1952). It is our opinion that
the Board of Control must review each contract, and before
it can disapprove the contract, it must make a finding
that the contract results in an unreasonable or a sub-
stantial unnecessary expense to the State, or base its
disapproval on some other legal gr,ound.
Therefore, in answer to question 3, it is our
opinion that the Board of Control has the authority to
review and disapprove a building contract made before
August 31, 1957 by the Hospital Board, if the Board of
Control on review of such contract makes a finding as
above set out. However, after August 31, 1957, the
Board of Control has no authority to review and disapprove
Hon. Wm. J. Burke, page 5, (~~-158)
building contracts entered into by the Hospital Board.
We answer question number 4 by saying that in our
opinion such documents as the invitation to bid, bid pro-
posals, instructions to bidders , 8re independent docu-
ments and do not constitute a part of the contract
agreement unless expressly incorporated into the contract
agreement. The documents although closely related to
the plans and specifications do not constitute a part
of the plans and specifications. Such documents are
independent.
We again call attention to the provision of the
1950 Act (V.A.C.S. 7047c-1) and Section 2 thereof which
states that the cigarette tax revenue allocation to the
Hospital Board Building Fund shall terminate August 31,
1957. The 55th Legislature of 1957 did not reenact the
cigarette tax revenue allocation to the Hospital Board,
not did it reenact the provisions giving the Board of
Control authority to review and approve building construc-
tion contracts made by the Hospital Board. It is, there-
fore, our opinion that all building construction contracts
made before August 31, 1957 by the Hospital Board, pursuant
to Article 7047c-1, as amended, are subject to review and
approval by the Board of Control. However, after August 31, _
1957, the authority of the Board of Control to review and
approve building contracts of the State Hospital Board
terminates and building contracts made by the Hospital Board
are not subject to revie*l and approval by the Board of Control.
SUMMARY
1. In building projects which are designed
for Texas State Hospitals and Special
Schools, the exclusive authority and
duty to enter into the building con-
tracts is vested in the Hospital Board.
2. In building projects which are designed
for Texas State Hospitals and Special
Schools, the exclusive authority and
duty to prescribe the forma and condi-
tions upon which bids are submitted is
vested in the Hospital Board.
3. The Board of Control cannot arbitrarily
disapprove a contract made by the Hos-
pital Board, and before disapproving the
contract, it must make'a finding that the
contract results in an unreasonable or a
Hon. Wm. J. Burke, page 6, (WW-158)
substantial unnecessary expense to the
State or base its disapproval on some
other legal grounds.
4. Documents such as the invitation to bid,
bid proposal, instructions to bidders do
not constitute a part of the contract agree-
ment and do not constitute a part of the
plans and specifications.
5. After August 31, 1957, the authority of
the Board of Control to review and approve
building contracts under Article 7C47C-1
Sec. 3(d) terminates, and building con-
tracts with the Hospital Board thereafter
are not subject to review and approval by
the Board of Control.
Yours very truly,
WILL WILSON
Attorney General of Texas
BY
APPROVED: Assistant
OPINION COMMITTEE:
James N. Ludlum, Chairman
Arthur Sandlin
E. M. DeGeurin
Richard B. Stone
B. H. Timmins, Jr.
REVIEWEDFOR THE
ATTORNEYGENERAL
By Geo. P. Blackburn
HGC:jas