Can a Texas school district act as its own general contractor on a renovation instead of hiring one out for competitive bids?

Plain-English summary

A school district had a stack of summer renovation projects, most costing more than $10,000, and a maintenance staff capable of doing most of the work. The district wanted to handle those projects itself, acting as its own general contractor, and bid out only the specialized pieces like plumbing and electrical. The county attorney asked the Attorney General whether doing that would run afoul of the competitive-bidding laws that govern school spending.

The Attorney General said it would not. The competitive-bidding statutes kick in when a district hands a construction, repair, or renovation job over $10,000 to an outside contractor. They are about how the district buys work from others. They do not force a district to go out for bids when it simply does the work with its own employees. So a district can act as its own general contractor on a renovation.

There is a limit worth remembering. Even when the district runs the project itself, anything it buys from outside, the materials, or specialized trades like plumbing and electrical, can still trigger the bidding rules if those purchases cross the dollar threshold. The opinion stressed the district's own statement that it was not trying to dodge the bidding laws, and the answer matches that: doing your own work in-house is allowed, but you cannot use the in-house label to buy outside goods and services without bidding them.

Currency note

This opinion was issued in 1993. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. The Education Code has been recodified since 1993 (former section 21.901 has been renumbered), and the competitive-bidding dollar thresholds and procedures have changed; confirm the current Education Code and Local Government Code chapter 271 provisions before relying on anything described here.

Background and statutory framework

Education Code section 21.901 required competitive bidding for a public school board's contracts: subsection (a) for purchases of personal property valued at $10,000 or more, and subsection (b) for contracts for the construction, maintenance, repair, or renovation of any building, or for materials used in that work, valued at $10,000 or more. Section 21.9011 made an intentional or knowing violation a Class B misdemeanor and grounds for removal. Local Government Code chapter 271, subchapter B applies to governmental entities generally, including a common or independent school district (§ 271.021(2)(C)). Section 271.024 imposes the chapter's bidding procedures when a governmental entity is required by statute to award a contract for the construction, repair, or renovation of a structure on the basis of competitive bids and the contract requires expenditure of more than $10,000.

The Attorney General read both statutes as setting out the procedure a district must follow if it proposes to award a contract to an outside party for covered work over $10,000. Neither applies when the district does not propose to award a contract but instead performs the work using its own employees. The opinion relied on Attorney General Opinion V-506 (1948) and authorities from other jurisdictions and Texas: Montana Chapter, Nat'l Elec. Contractors Ass'n v. State Bd. of Educ.; Davis v. Carbon County; Home Building & Conveyance Co. v. City of Roanoke; and the Texas decision in Gulf Bitulithic Co. v. Nueces County, 11 S.W.2d 305. From that line of authority, the AG concluded an independent school district may act as its own general contractor in letting bids for renovation and remodeling projects, but may still be required to competitively bid contracts for materials or services used in those projects under Education Code section 21.901(b).

Citations

• Education Code § 21.901(a) (competitive bidding for personal-property purchases of $10,000 or more); § 21.901(b) (competitive bidding for construction, maintenance, repair, or renovation contracts, or materials, of $10,000 or more); § 21.9011 (penalties for violations)
• Local Gov't Code § 271.021(2)(C) (school district is a governmental entity under subchapter B); § 271.024 (bidding procedures when a governmental entity must award a covered contract over $10,000 on competitive bids); §§ 271.025, 271.027(b) (advertising and award procedures)
• Montana Chapter, Nat'l Elec. Contractors Ass'n v. State Bd. of Educ., 352 P.2d 258, 259-60 (Mont. 1960)
• Davis v. Carbon County, 85 A.2d 862, 868 (Pa. 1952)
• Home Building & Conveyance Co. v. City of Roanoke, 20 S.E. 895, 899 (Va. 1895)
• Gulf Bitulithic Co. v. Nueces County, 11 S.W.2d 305, 309 (Tex. Comm'n App. 1928, judgm't adopted)

Common questions

Can a school district do its own renovation work instead of hiring a general contractor?
Under this opinion, yes. The Attorney General concluded the competitive-bidding statutes do not apply when a district performs the work with its own employees, so an independent school district may act as its own general contractor on renovation and remodeling projects.

Does the district still have to bid anything?
Yes, potentially. The opinion noted the district may still be required to competitively bid contracts for materials or specialized services it buys from outside for the project, if those purchases meet the statutory threshold.

When do the bidding statutes apply?
When a district proposes to award a contract to an outside party for the construction, repair, or renovation of a structure requiring more than $10,000 of the district's funds. The statutes govern how the district buys that work, not whether it can do the work itself.

What is the penalty for skipping required bidding?
Under Education Code section 21.9011, an intentional or knowing violation of the bidding requirement was a Class B misdemeanor and could result in removal from office or employment.

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0242
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1993/dm0242.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

Office of the Attorney General
State of Texas

DAN MORALES
ATTORNEY GENERAL

August 12, 1993

Honorable Tracey Bright
County Attorney
Ector County Courthouse
Room 201
Odessa, Texas 79761

Opinion No. DM-242

Re: Whether an independent school district may, without violating the competitive bidding statutes, "act as its own general contractor" in letting bids for renovation and remodeling projects (RQ-530)

Dear Mr. Bright:

On behalf of the Ector County Independent School District ("ECISD"), you have asked us to interpret the competitive bidding statutes that apply to independent school districts. You specifically cite section 21.901 of the Texas Education Code and chapter 271, subchapter B of the Local Government Code.

You state as follows:

ECISD has several remodeling or renovation projects that need to be completed prior to the 1993-94 school year. The aggregate cost of each renovation or remodeling project will vary depending on the nature and extent of the required remodeling or renovation. In almost all instances, the total aggregate cost of each project will exceed $10,000.00. ECISD [has] numerous employees on its staff who [can] adequately and competently perform the majority of tasks required on each remodeling or renovation project. Therefore, ECISD desires to act as its own general contractor on several of these remodeling or renovation projects. ECISD would only submit for competitive bids those tasks [within] the project that require specialized training or expertise which would require the expenditures of more than $10,000.00 (e.g. plumbing, electrical, cabinetry, etc.).

You further state that ECISD does not believe that this procedure will violate sections 21.901 and 21.9011 of the Education Code nor sections 271.021 through 271.025 of the Local Government Code. Finally, you assure us that ECISD "does not desire to act as its own general contractor to avoid the competitive bidding statutes."

Section 21.901 of the Education Code states in pertinent part as follows:

(a) Except as provided in this section, all contracts proposed to be made by any Texas public school board for the purchase of any personal property shall be submitted to competitive bidding when said property is valued at $10,000 or more.

(b) Except as provided in Subsection (e) of this section, all contracts proposed to be made by any Texas public school board for the construction, maintenance, repair or renovation of any building or for materials used in said construction, maintenance, repair, or renovation, shall be submitted to competitive bidding when said contracts are valued at $10,000 or more. [Footnote added.]

See also Attorney General Opinion DM-14 (1991) at 3. The remainder of section 21.901 also provides exceptions to the competitive bidding requirement and for notice of the bid opening. Section 21.9011(c), (e) of the Education Code provides that the intentional or knowing violation of section 21.901(a) or (b) constitutes a Class B misdemeanor and may result in immediate removal from office or employment.

The Local Government Code provisions about which you ask apply to governmental entities generally, which include a common or independent school district. See Local Gov't Code § 271.021(2)(C). Section 271.024 provides as follows:

If a governmental entity is required by statute to award a contract for the construction, repair, or renovation of a structure . . . on the basis of competitive bids, and if the contract requires the expenditure of more than $10,000 from the funds of the entity, the bidding on the contract must be accomplished in the manner provided by this subchapter.

Other sections of chapter 271, subchapter B of the Local Government Code articulate requirements for advertising for bids, Local Gov't Code § 271.025; opening bids, id. § 271.026; and awarding the contract, id. § 271.027. Section 271.029 of the Local Government Code, like section 29.011 of the Education Code, prescribes penalties for violations of the competitive bidding requirements. See generally Cooper & Horton, Competitive Bid Requirements for School District Contracts, 34 Tex. B.J. 1154 (1983).

Both section 21.901 of the Education Code and section 271.024 of the Local Government Code articulate the procedure for competitive bidding to which an independent school district must adhere if the district proposes to award a contract for the construction, repair, or renovation of a structure that will require the expenditure of more than $10,000 of the district's funds. Thus, section 21.901 of the Education Code and section 271.024 of the Local Government Code merely require that if an independent school district is to award a contract to have an outside party perform the work the independent school district must competitively bid the contract and award the contract to the lowest responsible bidder. See Local Gov't Code §§ 271.027(b), 271.0275; 64 Am. Jur. 2d Public Works and Contracts § 40, at 893 (1972). Neither section 21.901 of the Education Code nor section 271.024 of the Local Government Code apply, however, if the independent school district does not propose to award a contract but rather proposes to perform the work using its own employees. See Attorney General Opinion V-506 (1948) at 4; Montana Chapter, Nat'l Elec. Contractors Ass'n v. State Bd. of Educ., 352 P.2d 258, 259-60 (Mont. 1960) (and cases cited therein); Davis v. Carbon County, 85 A.2d 862, 868 (Pa. 1952); Home Building & Conveyance Co. v. City of Roanoke, 20 S.E. 895, 899 (Va. 1895); 64 Am. Jur. 2d, supra; see also Gulf Bitulithic Co. v. Nueces County, 11 S.W.2d 305, 309 (Tex. Comm'n App. 1928, judgm't adopted).

We conclude, therefore, that an independent school district may, without violating section 21.901 of the Education Code and section 271.024 of the Local Government Code, "act as its own general contractor" in letting bids for renovation and remodeling projects. Of course, the independent school district may be required to competitively bid contracts for materials or services used in the renovation and remodeling projects. See Educ. Code § 21.901(b); see also Texas Education Agency, Handbook on Competitive Bidding for Texas Public Schools 4.1, question 2 (1992).

SUMMARY

Neither section 21.901 of the Education Code nor section 271.024 of the Local Government Code, which pertain to competitive bidding situations, apply to an independent school district that desires to perform certain work using its own employees. Accordingly, an independent school district may, without violating section 21.901 of the Education Code and section 271.024 of the Local Government Code, "act as its own general contractor" in letting bids for renovation and remodeling projects.

DAN MORALES
Attorney General of Texas

WILL PRYOR
First Assistant Attorney General

MARY KELLER
Deputy Attorney General for Litigation

RENEA HICKS
State Solicitor

MADELEINE B. JOHNSON
Chair, Opinion Committee