Can vendors sell phone or pager service to Texas agencies through the catalogue purchase method?

Plain-English summary

Texas state agencies buy goods and services through set procedures. One of the streamlined ones in 1996 was the "catalogue purchase method" in Government Code chapter 2157, subchapter B. It let an agency buy or lease an "automated information system" directly from a vendor that the General Services Commission had pre-qualified, picking off a published catalogue, instead of running a full competitive bid. The Commission's executive director asked the Attorney General whether vendors of telephone, long-distance, cellular, mobile-radio, and pager service could use that catalogue method to sell their services to agencies.

The answer was no, and it came down to a definition. The catalogue method only reaches an "automated information system." The statutory definition of that term (Government Code section 2157.001(1)) had three parts: the computers; a service related to automating the system, including software; and a "telecommunications apparatus or device" that is a component of a voice, data, or video network. Notice the asymmetry: the definition expressly includes telecommunications hardware (the apparatus or device) and software services, but it does not include telecommunications service. The office read that omission as deliberate. The Legislature could have written "services related to a telecommunications apparatus or device" into the definition and did not, and courts do not add words to a statute unless it is necessary to carry out the Legislature's clear intent. So a vendor of telecommunications service could not sell that service through the catalogue method, even if the same vendor could sell the phone or pager hardware that way.

The office acknowledged the practical awkwardness. A phone, cell phone, radio, or pager is useless without service, and the equipment vendor is often the only one who can supply the matching service. Splitting the device (catalogue-eligible) from the service (not catalogue-eligible) can be illogical. But the office said the fix had to come from the Legislature, not from the Attorney General rewriting the definition.

The opinion then mapped out where the services did belong. Chapter 2170 of the Government Code governs telecommunications services and made the Commission responsible for managing them; the Commission ran the TEX-AN long-distance network and the Capitol Complex Telephone System, providing local exchange service to capitol-complex agencies and interexchange (long-distance) service to all state agencies. For services not covered by chapter 2170, including cellular, mobile-radio, and pager service, the Commission could use the competitive sealed proposal method in chapter 2157, subchapter C, but only if it first determined by rule that competitive sealed bidding and informal competitive bidding were impractical or disadvantageous to the state (Government Code section 2157.121). Where subchapter C and chapter 2170 conflicted, the more specific chapter 2170 controlled. And none of chapter 2157 applied to services provided by a public utility.

Currency note

This opinion was issued in 1996. 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.

State procurement law has been reorganized substantially since 1996. The General Services Commission that requested this opinion was later abolished and its purchasing and telecommunications functions transferred to successor agencies, and the Government Code chapters governing information-systems and telecommunications purchasing have been amended and renumbered. Read this page for the office's 1996 reasoning about why telecommunications service fell outside the catalogue purchase method, and verify the current procurement statutes and the current agency structure before relying on any specific rule here.

What the opinion meant at the time

For the General Services Commission and state agencies: The opinion meant agencies could use the catalogue purchase method to buy telephones, cell phones, mobile radios, and pagers (the hardware), but not to buy the service that makes them work. Telecommunications service had to be acquired through chapter 2170 (for covered agencies) or, for services outside chapter 2170, through the competitive sealed proposal method in chapter 2157, subchapter C, after the required rule determination.

For telecommunications vendors: The opinion meant a vendor could not sell local, long-distance, cellular, mobile-radio, or pager service to state agencies by listing it in a catalogue under subchapter B. The catalogue route was closed to telecommunications service, however convenient bundling the service with the device might have been.

For procurement lawyers: The opinion is a statutory-construction holding built on the canon that a court will not insert words into a statute unless necessary to effectuate legislative intent, plus the rule that a specific provision (chapter 2170) controls over a general one (chapter 2157, subchapter C) when they conflict. The office expressly left the policy fix to the Legislature.

Common questions

Could a Texas agency buy phone or pager service through the catalogue purchase method?
No, under this opinion. The catalogue method in Government Code chapter 2157, subchapter B applied only to an "automated information system," and the office concluded the statutory definition of that term deliberately did not include telecommunications service.

But agencies could buy the phones and pagers themselves that way?
Yes. The definition of "automated information system" expressly included a "telecommunications apparatus or device," so the hardware was catalogue-eligible. The office recognized that separating the device from the service could be illogical but said the remedy was for the Legislature.

Where were telecommunications services supposed to be acquired instead?
Chapter 2170 of the Government Code governed telecommunications services and made the Commission responsible for managing them for covered agencies (through systems like TEX-AN and the Capitol Complex Telephone System). Services outside chapter 2170, such as cellular, mobile-radio, and pager service, could be acquired under chapter 2157, subchapter C's competitive sealed proposal method.

Were there any conditions on using the competitive sealed proposal method?
Yes. The Commission could use it only if it determined by rule that competitive sealed bidding and informal competitive bidding were not practical or were disadvantageous to the state (Government Code section 2157.121). The office also noted chapter 2157 did not apply to services provided by a public utility.

Background and statutory framework

Title 10, subtitle D of the Government Code, the State Purchasing and General Services Act, created the General Services Commission and set out its purchasing duties. The Legislature had codified the former article 601b, V.T.C.S., into that subtitle (chapters 2151 through 2176) in a 1995 nonsubstantive codification. The catalogue purchase method in chapter 2157, subchapter B, added in 1993, let an agency covered by the Information Resources Management Act (Government Code chapter 2054) buy or lease an automated information system directly from a "qualified information systems vendor."

The whole question turned on the definition of "automated information system" in Government Code section 2157.001(1): computers, services related to automating the system (including software), and a "telecommunications apparatus or device" that is a component of a voice, data, or video network. The office stressed that the definition included telecommunications devices but not telecommunications services, and treated that as a purposeful legislative choice. Because a court will not insert words into a statute absent necessity to carry out manifest legislative intent, the office declined to read "services related to a telecommunications apparatus or device" into the definition.

Chapter 2170 governed telecommunications services (defined for that chapter as "intercity communications facilities or services") and tasked the Commission with managing them for state agencies. For services outside chapter 2170, chapter 2157, subchapter C provided a competitive sealed proposal method for "a telecommunications device, system, or service," available only after a rule-based finding that competitive sealed bidding and informal competitive bidding were impractical or disadvantageous (Government Code section 2157.121). The office applied the specific-controls-general canon (citing Attorney General Opinion JM-1137 (1990) and Government Code section 311.026(b)) to hold that chapter 2170 prevails over subchapter C where they conflict, and noted the public-utility exclusion in Government Code section 2155.001(2)(D).

Citations

Statutes and authorities discussed:

• Government Code chapter 2157, subchapter B (catalogue purchase method); section 2157.001 (definition of "automated information system" and "qualified information systems vendor"); sections 2157.061, 2157.062, 2157.063
• Government Code chapter 2157, subchapter C; section 2157.121 (competitive sealed proposal method)
• Government Code chapter 2170 (telecommunications services); sections 2170.001, 2170.002, 2170.003, 2170.005, 2170.051, 2170.054, 2170.059
• Government Code chapter 2054 (Information Resources Management Act); section 2054.003(9)
• Government Code chapter 2151 (State Purchasing and General Services Act); sections 2151.001, 2152.001, 2155.001, 2155.061
• Government Code section 311.026(b) (specific provision prevails over general)
• Attorney General Opinion JM-1137 (1990)

No cases were cited in this opinion.

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0375
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1996/dm0375.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain (including footnote numbering) — the linked PDF is authoritative.

Office of the Attorney General
State of Texas

DAN MORALES
ATTORNEY GENERAL

February 6, 1996

Mr. Tom Treadway
Executive Director
General Services Commission
P.O. Box 13047
Austin, Texas 78711-3047

Opinion No. DM-375

Re: Whether a vendor that offers to sell local exchange, interexchange, cellular telephone, mobile radio, or pager services may offer such services for sale through the catalogue purchase method set forth in Government Code chapter 2157, subchapter B (RQ-705)

Dear Mr. Treadway:

You have asked whether a vendor may offer for purchase or lease local exchange services (that is, local telephone services), interexchange services (that is, long-distance telephone services), cellular telephone services, mobile radio services, or pager services through the catalogue purchase method set forth in chapter 2157, subchapter B of the Government Code.[1] We understand that you are particularly concerned with how Government Code chapter 2157, subchapter B interacts with Government Code chapter 2170.

Title 10, subtitle D of the Government Code, the State Purchasing and General Services Act (the "act"), see Gov't Code § 2151.001, creates the General Services Commission (the "commission"), see id. § 2152.001, and sets out the commission's various functions. Section 2155.061(a) generally requires the commission to purchase, lease, rent, or otherwise acquire all supplies, materials, services,[2] and equipment state agencies need. Section 2170.002 makes the commission responsible for obtaining certain telecommunications services.

Government Code chapter 2157, subchapter B establishes a catalogue purchase method by which a state agency covered by the Information Resources Management Act,[3] Gov't Code ch. 2054,[4] may purchase or lease directly from a qualified information systems vendor an automated information system. Chapter 2157, subchapter B provides in pertinent part as follows:

Sec. 2157.061. USE OF CATALOGUE PURCHASE METHOD REQUIRED UNLESS BEST VALUE AVAILABLE ELSEWHERE. The commission or a state agency shall purchase an automated information system through the catalogue procedure provided by this subchapter unless the commission or state agency determines that the best value may be obtained from another purchase method authorized by this subtitle.

Sec. 2157.062. APPLICATION PROCESS FOR QUALIFICATION AS VENDOR. (a) To sell or lease an automated information system under this subchapter to a state agency, a vendor must apply to the commission for designation as a qualified information systems vendor.

Sec. 2157.063. DIRECT PURCHASE OR LEASE BY STATE AGENCY; NEGOTIATION OF ADDITIONAL TERMS. (a) If a purchase or lease is the best value available and is in the state's best interest, a state agency may under this subchapter purchase or lease an automated information system directly from a qualified information systems vendor and may negotiate additional terms and conditions to be included in a contract relating to the purchase or lease.

See also 1 T.A.C. § 113.19 (providing for catalogue purchase method for automated information systems) (footnote omitted).

A qualified information systems vendor is a manufacturer or reseller of an automated information system whom the commission has authorized to publish a catalogue of products and services that a state agency to which chapter 2054 applies may purchase directly from the vendor. Gov't Code § 2157.001(2). For the purposes of chapter 2157 of the Government Code, an automated information system includes:

(A) the computers on which the information system is automated;

(B) a service related to the automation of the system, including computer software, or the computers; and

(C) a telecommunications apparatus or device that serves as a component of a voice, data, or video communications network for transmitting, switching, routing, multiplexing, modulating, amplifying, or receiving signals on the network.

See id. § 2157.001(1). The legislature added the statutory predecessor to chapter 2157, subchapter B of the Government Code, as well as the definitions of "qualified information systems vendor" and "automated information systems" to the act in 1993.[5]

Chapter 2170 of the Government Code, the other provision about which you ask, pertains expressly to telecommunications services, which section 2170.001(a)(1)[6] defines as "intercity communications facilities or services." Section 2170.051(a) requires the commission to "manage the operation of a system of telecommunications services for all state agencies." See also id. § 2170.002 (designating commission as state agency responsible for obtaining telecommunications services). Each state agency is to notify the commission of the telecommunications services it requires, and the commission is to fulfill those requirements to the extent possible and to the extent that funds are available or appropriated for the purpose. Id. § 2170.051.

Together with the Department of Information Resources and the comptroller of public accounts, the commission "shall negotiate rates and execute contracts with telecommunications service providers for services." Id. § 2170.054(c). The three entities together may acquire transmission facilities and develop, establish, and maintain carrier systems necessary to the operation of the telecommunications system. Id. The commission may own, lease, or lease-purchase any or all of the facilities or equipment necessary to provide telecommunications services. Id. § 2170.003. Furthermore, section 2170.005(a) requires the commission to "adopt and disseminate to all agencies appropriate guidelines, operating procedures, and telephone directories," and an agency must comply with the policies, guidelines, and operating procedures that the commission has promulgated, see id. § 2170.005(b). Finally, the commission is required to provide centralized telephone service to state agencies, the houses of the legislature, and legislative agencies located in the capitol complex. Id. § 2170.059(a).

We understand that, pursuant to chapter 2170, the commission has established the Texas Agency Network (commonly referred to as TEX-AN), "a state-leased, private, long distance telecommunications network providing" cost-effective long-distance telephone service for state government and other political subdivisions that receive the service through contract with the commission. See General Services Commission, State of Texas Telephone Directory 1992-93 at vii. The commission also has established the Capitol Complex Telephone System for state agencies and other state governmental bodies located in the capitol complex. We understand that the commission has interpreted chapter 2170 to authorize it to provide only local exchange services to agencies in the capitol complex and interexchange services to all state agencies. The commission has not interpreted chapter 2170 to authorize it to make available to state agencies cellular telephone, mobile radio, and pager services, but the commission apparently has made such services available under other provisions.[7]

You have informed us that vendors of local exchange, interexchange, cellular telephone, mobile radio, and pager services seek to offer their services directly to state agencies pursuant to the catalogue purchase method chapter 2157, subchapter B establishes. You believe, however, that the vendors may not do so because the catalogue purchase method is available only to purchase or lease an automated information system, which is defined expressly to include a "telecommunications apparatus or device," but which is not defined to include "telecommunications service." Additionally, you believe that to permit vendors of local exchange service and interexchange services to offer their services directly to state agencies pursuant to the catalogue purchase method would infringe upon the commission's authority under section 2170.059 to provide local exchange service to state agencies located in the capitol complex and interexchange service to all state agencies.

Section 2157.001(1)(B) defines "automated information system" to include "a service related to the automation of the [information] system including computer software, or the computers," as well as the information systems or computers themselves. On the other hand, the definition does not include services related to telecommunications apparatus or devices, even though it expressly includes such apparatus or devices. In our opinion, the legislature purposely omitted telecommunications services from the definition of "automated information system[s]," and we therefore conclude that a vendor offering to sell or lease telecommunications services may not offer such services through the catalogue purchase method.[8]

You state that, because telephones, cellular telephones, mobile radios, and pagers are telecommunications apparatus or devices and therefore included within the definition of "automated information system," a qualified information systems vendor may sell them using the catalogue purchase method. We understand that telephones, cellular telephones, mobile radios, and pagers function only with the appropriate services. Additionally, the equipment vendor may be the sole vendor of the specific service necessary to make the equipment operable. We also are informed that cellular telephone service vendors, mobile radio service vendors, and pager service vendors often provide the necessary equipment with the purchase of the service.

We admit that separating telecommunications services from the particular kinds of telecommunications apparatus or devices at issue here, so that a state agency may purchase or lease the apparatus or device directly from the vendor using the catalogue purchase method but must acquire the requisite service through another means, may be illogical. To avoid this result, however, we would have to insert into the definition of "automated information system[s]" the phrase "services related to a telecommunications apparatus or device" or something similar. Generally, a court will not insert a word or phrase into a statute unless it is necessary to carry out the legislature's manifest intent. 67 TEX. JUR. 3D Statutes § 115, at 697-99 (1989) (and sources cited therein). We do not believe inserting "services related to a telecommunications apparatus or device" into the definition of automated information systems in section 2157.001(1) would effectuate the legislative intent; indeed, we believe that it would be contrary to the legislative intent.[9]

We believe that the commission may acquire for state agencies telecommunications services using the competitive sealed proposal method set out in chapter 2157, subchapter C, but only if the commission "determines by rule that competitive sealed bidding and[10] informal competitive bidding are not practical or are disadvantageous to the state." Gov't Code § 2157.121 (footnote added). Of course, to the extent that chapter 2157, subchapter C, which provides generally for the acquisition of telecommunications services, conflicts with chapter 2170, which provides specifically for intercity communications facilities or services and the Capitol Complex Telephone System, chapter 2170 prevails. See Attorney General Opinion JM-1137 (1990) at 3 (stating "familiar and well-established rule of statutory construction" that when general statutory provision and specific statutory provision conflict, specific provision prevails); see also Gov't Code § 311.026(b) (stating that, if general and special code provisions irreconcilably conflict, special provision prevails as exception to general provision, unless general provision is later enactment and legislature's manifest intent is that general provision prevail). Additionally, we note chapter 2157 does not apply to services provided by a public utility. See Gov't Code § 2155.001(2)(D).

[1] The Seventy-fourth Legislature codified former article 601b, V.T.C.S., at title 10, subtitle D of the Government Code (chapters 2151 through 2176). See Act of Apr. 21, 1995, 74th Leg., R.S., ch. 41, 1995 Tex. Sess. Law Serv. 324. The codification is nonsubstantive. Id. § 6, 1995 Tex. Sess. Law Serv. at 420.

[2] In the context of the act, "service" is the furnishing of skilled or unskilled labor or professional work, excluding:

(1) professional service subject to Subchapter A, Chapter 2254 [of the Government Code];
(2) service of a state agency employee;
(3) consulting service or service of a private consultant as defined by Subchapter B, Chapter 2254; or
(4) service of a public utility.
Gov't Code § 2155.001.

[3] The Information Resources Management Act defines "state agency" as "a department, commission, board, office, council, or other agency in the executive or judicial branch of state government that is created by the constitution or a statute of this state, including a university system or institution of higher education as defined by Section 61.003, Education Code." Gov't Code § 2054.003(9).

[4] See Gov't Code § 2157.002 (limiting applicability of subchapter B to state agency to which Gov't Code ch. 2054 applies).

[5] The bills proposing to amend the act by adding the statutory predecessor to chapter 2157, subchapter B of the Government Code and its accompanying definitions, see Gov't Code § 2157.001, were introduced largely in response to a report from the Texas Performance Review, see 2 TEXAS PERFORMANCE REVIEW, AGAINST THE GRAIN: HIGH-QUALITY, LOW-COST GOVERNMENT FOR TEXAS (1993), in which the comptroller of public accounts proposed numerous cost-saving measures for state government. See House Research Organization, Bill Analysis, C.S.S.B. 381, 73d Leg. (1993). As introduced, the bills did not propose to establish the catalogue purchase method now set forth in section 3.081; indeed, the comptroller had not suggested that such a procedure be implemented. The bills were amended to add the catalogue purchase method when they were in committee. See Hearings on S.B. 381 Before the Senate Comm. on State Affairs, 73d Leg. (Mar. 3, 1993) (statement of Senator Haley, author) (tape available from Senate Staff Services Office); Hearings on H.B. 2626 Before the House Comm. on State Affairs, 73d Leg. (Apr. 5, 1993) (statement of Representative Eckels) (tape available from House Video/Audio Services Office). Senator Haley explained that the amendment would enable state agency personnel directly to purchase computer systems, software, and telecommunications hardware. Hearings on S.B. 381 Before the Senate Comm. on State Affairs (statement of Senator Haley, author). He further explained that the proposed catalogue purchase method would allow state agencies to avoid the competitive bidding process and instead find the best buys on "computers and all material that goes with computers," such as "software and other telecommunications hardware" in catalogues. Id.

[6] Section 2170.001(a)(1) of the Government Code defines "telecommunications services" only for purposes of chapter 2170.

[7] You do not ask, and thus we do not consider, whether telecommunications services, as the term is defined for purposes of chapter 2170, includes cellular telephone, mobile radio, or pager services.

[8] We understand that the commission has construed the definition of automated information system, Gov't Code § 2157.001(1), and chapter 2157, subchapter B of the Government Code to authorize the sale, using the catalogue purchase method, of services such as maintenance, technical assistance, and other services related to telecommunications equipment. We do not here consider the propriety of offering such telecommunication services directly to state agencies using the catalogue purchase method.

[9] In our opinion, the solution to any problems that the definition of "automated information system[s]" creates must come from the legislature.

[10] The statutory predecessor to section 2157.121 of the Government Code, V.T.C.S. article 601b, section 3.022(a), required the commission, prior to implementing the competitive sealed proposal method, to determine that competitive sealed bidding or informal competitive bidding is impractical or disadvantageous to the state. See V.T.C.S. art. 601b, § 3.022(a), repealed by Act of Apr. 21, 1995, 74th Leg., R.S., ch. 41, § 5, 1995 Tex. Sess. Law Serv. 324, 420. As we stated in note 1, supra, the legislature intended the codification of the act to be nonsubstantive.

[11] Section 2157.121 of the Government Code also provides that telecommunications devices and systems may be acquired using the competitive sealed proposal procedure. Conceivably, the commission or a state agency might determine that the best value available for the purchase of telecommunications apparatus or devices, in accordance with chapter 2157, subchapter C, accrues from purchasing the apparatus or devices together with the telecommunications services. See Gov't Code § 2157.061.

SUMMARY

A vendor that offers to sell local exchange, interexchange, cellular telephone, mobile radio, or pager services may not offer such services for purchase or lease through the catalogue purchase method set forth in chapter 2157, subchapter B of the Government Code. Chapter 2170 of the Government Code governs the sale of local exchange and interexchange service for certain state agencies. The General Services Commission may acquire cellular telephone, mobile radio, or pager services pursuant to chapter 2157, subchapter C, which establishes a competitive sealed proposal method for the acquisition of "a telecommunications device, system, or service," but only if the commission "determines by rule that competitive sealed bidding and informal competitive bidding are not practical or are disadvantageous to the state." The acquisition of telecommunications services that is not governed by chapter 2170 also may occur in accordance with chapter 2157, subchapter C. Chapter 2157 of the Government Code does not apply to services provided by a public utility.

DAN MORALES
Attorney General of Texas

JORGE VEGA
First Assistant Attorney General

SARAH J. SHIRLEY
Chair, Opinion Committee

Prepared by Kymberly K. Oltrogge
Assistant Attorney General