Guide to County Purchasing: Competitive Bidding for Purchases Exceeding the Statutory Limit

Competitive bidding means letting available vendors compete with each other in order to provide goods and/or services. The Texas Supreme Court described it as: "Competitive bidding requires due advertisement, giving opportunity to bid, and contemplates a bidding on the same undertaking upon each of the same material item and services covered by the contract; upon the same thing. It requires that all bidders be placed upon the same plane of equality and that they each bid upon the same terms and conditions involved in all the item and services and parts of the contract, and that the proposal specify as to all bids the same, or substantially similar specifications". The Court further states, "It's (competitive bidding) purpose is to stimulate competition, prevent favoritism, and secure the best work and materials at the lowest practicable price for the best interest of the taxpayers and property owners."

Invitation for Bid

The term "Formal Competitive Bidding" is generally used in public purchasing, when the bidding process is in compliance with TEX. LOC. GOV'T CODE ANN., § 262.023 and requires approval by a governing board, such as Commissioners Court.

"Sealed" bids (Invitation for Bid) are used for contracts exceeding the statutory limit. The Invitation for Bid (IFB) will solicit bids from vendors in response to the county's specifications and contractual terms and conditions. The returned, signed, and awarded IFB usually forms the contract between the county and the vendor.

The first purpose of competitive bidding is to ensure that public monies are spent properly, legally, and for public projects only, and that the best possible value is received for the money. (This is, in fact, always the main purpose of public procurement, even when purchases do not require the formal approval of a governing board).

The second purpose is to give those qualified and responsible vendors who desire to do business with the county a fair and equitable opportunity to do so. The use of a standard and consistent procurement process, provides the public with an assurance that their tax dollars are being spent properly.

Public Notice

After development of specifications and preparation of the IFB, a notice of the proposed purchase is published by the Purchasing office. The notice of a proposed purchase must be published at least once a week in a newspaper of general circulation in the county, with the first day of publication occurring before the 14th day before the date of the bid opening. Less than 15 days would be a violation of the Purchasing Act.

The notice must include:

1. The specifications describing the goods and services to be purchased, or a statement of where the specifications may be obtained;

2. The time and place for receiving and opening bids and the name and position of the employee to whom the bids are sent;

3. Whether the bidder should use lump-sum or unit pricing;

4. The type of bond required of the bidder; and

5. The method of payment by the county.

If unit pricing is required, county must specify approximate quantities estimated on the best available information. The purchasing agent shall explain how the lowest price will be calculated in the bid specification.

Public Bid Opening

The commissioners court can authorize the purchasing agent, by adoption of an order to delegate such authority, to extend the bid opening date on the notice of an Invitation For Bids if it is determined it is in the best interest of the county. The purchasing agent may amend an IFB to clarify their original intent or to correct clerical errors if inquiries about the meaning of the IFB indicate the need for an amendment; if the changes are so insignificant that they are not likely to matter to the vendor in determining price or ability to respond, if there is no change to the quantity, or delivery requirements; and if the amendment does not change the scope of the IFB.

All bids should be stamped with the time and date received. The official receiving office should serve as the OFFICIAL time clock for the purpose of identifying the date and time bids were received in the purchasing office.

No bids should be accepted after the opening time on the day of bid opening. All bids received after the opening time should be returned unopened to the bidder notifying the bidder that the submitted bid was received subsequent to the due date and time.

After bids are received, a secure place should be provided by the receiving office for the holding of the bids until the bid opening date. The bids are to be received sealed and shall remain sealed until opened on the advertised date and time by the purchasing office in a public forum.

Bid Evalution and Contract Award

The purchasing office will evaluate all bids, with assistance from the user department, and a recommendation about the lowest responsible bid will be made to commissioners court. The purchasing office will evaluate bids based on the relative price of the bids, including the cost of repair and maintenance if heavy equipment is the subject of the bid and the cost of delivery and hauling if road materials are involved; the compliance of goods and services with specifications; and the responsibility of the vendor, including the vendor's financial and practical ability to perform the contract, the vendor's safety record if stated in the invitation for bids, and the past performance of the vendor.

The purchasing agent shall recommend contract award to Commissioners Court in session. The Commissioners Court shall:

1. Award the contract to the responsible bidder who submits the lowest and best bid; or

2. Reject all bids and publish a new notice.

If two responsible bidders submit the lowest and best bid, the Commissioners Court shall decide between the two by drawing lots in a manner prescribed by the County Judge.

A contract may not be awarded to a bidder who is not the lowest priced bidder meeting specifications unless, before the award, each lower bidder is given notice of the proposed award and is given an opportunity to appear before the Commissioners Court and present evidence concerning the lower bidder's responsibility.

Contract Administration

The user department usually is responsible for monitoring and documenting contractor performance/compliance. All documentation of non-compliance must be shared with purchasing. If poor performance or non-compliance with the contract is evidenced, purchasing will be responsible to initiate corrective action with the vendor.

The purchasing agent will take all steps related to obtaining compliance with the contract but will consult with legal counsel (if available) before taking any steps toward suspension or termination of the contract. All correspondence between county and contractor should be sent from the purchasing agent.

Most importantly, user departments do not have authority to change any contractual terms or conditions of the contract. User departments must request any changes be made by the purchasing agent who will process according to the Purchasing Act and county policy.

This aspect of the procurement process is often overlooked and is perhaps one of the most important. To enforce contractual terms, documentation of specific non-compliance must be available. Specific dates, locations, examples, etc. must be documented.