When must a Texas county combine separate purchases to reach the $50,000 competitive bidding threshold?

Plain-English summary

Gonzales County Auditor Becky Weston asked the Attorney General how to figure out when the County Purchasing Act's competitive-bidding rules kick in. The trigger is set by Local Government Code section 262.023(a): before a county buys items under a contract that will require spending more than $50,000, the commissioners court must use competitive bidding or one of the statutory alternatives. The concrete dispute was small, a $1,500 laptop the county attorney bought from an online vendor, but the county's overall computer budget topped $100,000 and its laptop spending already exceeded $50,000. The auditor wanted to know whether she had to add up all the county's like-item purchases to decide whether the threshold was crossed, and ultimately whether she had to disapprove the laptop purchase.

The AG focused on the anti-splitting provision, subsection 262.023(c). That subsection says separate, sequential, or component purchases must be treated as a single purchase under a single contract, but only "with the intent of avoiding the requirements of this subchapter" and only when made "from the same supplier by the same county officer, department, or institution." The Act defines those terms: an "item" is broad (any service, equipment, good, or personal property), and separate, sequential, and component purchases are all defined as items that "in normal purchasing practices would be purchased in one purchase."

Putting the pieces together, the AG explained that subsection 262.023(c) applies only when two conditions are both present: the purchases are from the same supplier by the same county officer, department, or institution; and they were made to evade the Act. So a county does not have to consolidate every purchase of like items made by different officers, departments, or institutions in order to test the $50,000 threshold. It must combine only those purchases that satisfy both conditions. Whether the laptop at issue was the kind of purchase that normally would have been part of a larger order by the same officer from the same supplier, and was split off to avoid the Act, presents fact questions that an AG opinion cannot answer. The AG also noted that the county attorney disputed several of the auditor's factual assertions, which reinforced that the ultimate answer turned on facts outside the opinion process.

What this means for you

This describes what the 2021 opinion holds about how the County Purchasing Act's threshold works. The opinion does not decide whether the Gonzales County purchase was lawful, and procurement statutes can change, so confirm current law and get specific advice before acting.

County auditors and purchasing agents

The opinion holds that the $50,000 threshold is tested by consolidating only separate, sequential, or component purchases that are both from the same supplier by the same officer, department, or institution and made to avoid the Act. Total county spending on a category, spread across different offices, does not automatically aggregate.

Commissioners courts

The opinion confirms that the competitive-bidding duty attaches to contracts expected to exceed $50,000, and that the anti-splitting rule is aimed at deliberate evasion, not at ordinary decentralized purchasing.

County officers making purchases

The opinion is a reminder that splitting a purchase to stay under $50,000, when the items would normally be bought together from the same supplier, can trigger the Act, while a genuine standalone purchase by one office does not automatically combine with another office's spending.

Common questions

Q: Does a county have to add up all its spending on similar items to hit the $50,000 bidding threshold?
A: No. Under this opinion, a county aggregates only purchases that are both from the same supplier by the same officer, department, or institution and made to avoid the Act. Spending spread across different offices does not automatically combine.

Q: What makes purchases count as one under the anti-splitting rule?
A: Two things together: the purchases are from the same supplier by the same county officer, department, or institution, and they were made with the intent of avoiding the County Purchasing Act.

Q: Did the AG decide whether the laptop purchase broke the law?
A: No. Whether the purchase was split to dodge the Act, or normally would have been part of a larger order, is a fact question the AG opinion process cannot resolve.

Q: What is the dollar trigger for competitive bidding?
A: Section 262.023(a) requires competitive bidding or a statutory alternative before a county purchases items under a contract that will require spending more than $50,000.

Background and statutory framework

The County Purchasing Act appears in Local Government Code sections 262.021 through 262.037. Section 262.023(a) sets the $50,000 contract threshold above which competitive bidding or a statutory alternative is required. Section 262.023(c) is the anti-splitting provision: it consolidates separate, sequential, or component purchases into a single purchase, but only when made from the same supplier by the same county officer, department, or institution and with the intent of avoiding the subchapter, and it carves out routine office-supply purchases by an individual department absent that intent. The defined terms come from section 262.022, which defines "item" (subsection (5)) and the separate, sequential, and component purchase categories (subsections (7), (8), and (2)) as items that in normal purchasing practices would be bought in one purchase.

Citations and references

Statutes:

• Tex. Loc. Gov't Code § 262.023 (competitive bidding threshold; treatment of separate, sequential, and component purchases)
• Tex. Loc. Gov't Code § 262.022 (definitions); §§ 262.021–.037 (County Purchasing Act)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0358
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2021/kp-0358.pdf

Original opinion text

KEN PAXTON
ATTORNEY GENERAL OF TEXAS

March 3, 2021

Ms. Becky Weston
Gonzales County Auditor
427 Saint George Street, Suite 302
Gonzales, Texas 78629

Opinion No. KP-0358

Re: Applicability of the County Purchasing Act in specific circumstances (RQ-0377-KP)

Dear Ms. Weston:

You ask about the potential application of the competitive bidding requirements of the County Purchasing Act (the "Act") to the Gonzales County Attorney's purchase of a laptop computer for $1,500.¹ See generally TEX. LOC. GOV'T CODE §§ 262.021–.037. Section 262.023 of the Act requires certain purchases "under a contract that will require an expenditure exceeding $50,000" to follow competitive purchasing procedures or specified statutory alternatives. Id. § 262.023(a). Your questions all concern how a county auditor should determine the $50,000 threshold point that triggers the competitive purchasing requirements of the Act.

In some circumstances, "all separate, sequential, or component purchases of items ordered or purchased" must be treated as a single purchase under a single contract for purposes of applying the Act's requirements. Id. § 262.023(c). You inform us that the Gonzales County (the "County") budget for computer equipment totals more than $100,000 and that current expenditures in the laptop category exceed $50,000.² You state that the county attorney purchased the laptop from an online vendor that is not part of a state or other governmental cooperative purchasing program. Request Letter at 1. You assert the purchase is not included in the county attorney's office budget.³ Id. at 3. You ask several questions that focus on the relevance of the sequential purchasing provision to the County's current spending for like items in the aggregate. Id. We address these concerns together with your ultimate question, which is whether section 262.023 requires you to disapprove the purchase. Id. at 4.

Subsection 262.023(a) provides that "[b]efore a county may purchase one or more items under a contract⁴ that will require an expenditure exceeding $50,000, the commissioners court of the county must . . . comply with the competitive bidding or competitive proposal procedures," among other statutory procedures not pertinent here. TEX. LOC. GOV'T CODE § 262.023(a). Subsection (c) further explains how to treat certain purchases:

(c) In applying the requirements established by Subsection (a), all separate, sequential, or component purchases of items ordered or purchased, with the intent of avoiding the requirements of this subchapter, from the same supplier by the same county officer, department, or institution are treated as if they are part of a single purchase and of a single contract. In applying this provision to the purchase of office supplies, separate purchases of supplies by an individual department are not considered to be part of a single purchase and single contract by the county if a specific intent to avoid the requirements of this subchapter is not present.

Id. § 262.023(c). Subchapter C of the Act defines an "item" as "any service, equipment, good, or other tangible or intangible personal property, including insurance and high technology items." Id. § 262.022(5). "Separate purchases" are "purchases, made separately, of items that in normal purchasing practices would be purchased in one purchase." Id. § 262.022(7). "Sequential purchases" are "purchases, made over a period, of items that in normal purchasing practices would be purchased in one purchase." Id. § 262.022(8). "Component purchases" are "purchases of the component parts of an item that in normal purchasing practices would be purchased in one purchase." Id. § 262.022(2).

Thus, for subsection 262.023(c) to apply, a purchase must meet two conditions. First, separate, sequential, or component purchases or orders must be treated as one only when the orders or purchaser are "from the same supplier by the same county officer, department, or institution." Id. § 262.023(c). Second, section 262.023 requires treating separate, sequential, or component purchases as one only if made with the intent of avoiding the Act's requirements. Id. § 262.023(c). Therefore, subsection 262.023(c) does not necessarily require a county to consolidate all orders and purchases of like items from different county officers, departments, or institutions and treat them as a single purchase and contract to determine the $50,000 competitive procedures threshold. Id. Instead, a county must consolidate only those purchases and orders that meet the conditions of subsection 262.023(c) to determine whether they collectively meet the $50,000 threshold. Id.

Ultimately, whether a separate, sequential, or component purchase has taken place under 262.023(c) will depend on the particular facts. See Tex. Att'y Gen. Op. Nos. GA-0604 (2008) at 5, JC-0124 (1999) at 4. Accordingly, whether the purchase of this laptop computer is one that normally would be a part of a larger purchase by the same county officer from the same supplier and was made separately in order to avoid the application of the Act presents questions of fact that cannot be answered in an attorney general opinion. See Tex. Att'y Gen. Op. No. GA-0604 (2008) at 5.

¹ See Letter and Attachments from Ms. Becky Weston, Gonzales Cnty. Auditor, to Honorable Ken Paxton, Tex. Att'y Gen. at 1–9 (Sept. 4, 2020), https://www2.texasattorneygeneral.gov/opinions/opinions/51paxton/rq/2020/pdf/RQ0377KP.pdf ("Request Letter" and "Attachments") (Attachments on file with the Op. Comm.).

² See Email from Becky Weston, Gonzales Cnty. Auditor, to Op. Comm. (Oct. 6, 2020) (on file with the Op. Comm.); see also Request Letter at 1.

³ The county attorney disputes several of the county auditor's assertions of fact about the transaction, county purchasing practices, and the county budget. See Letter from Honorable Paul S. Watkins, Gonzales Cnty. Att'y, to Honorable Ken Paxton, Tex. Att'y Gen. at 1 (Oct. 5, 2020) (on file with the Op. Comm.). An attorney general opinion advises about questions of law and cannot resolve disputed questions of fact. See Tex. Att'y Gen. Op. No. KP-0240 (2019) at 1 (stating that "[t]he attorney general opinion process does not resolve disputed fact questions").

⁴ With regard to one of your subsidiary questions, section 262.023 does not distinguish on the basis of a purchase contract's formalities. See Request Letter at 3; TEX. LOC. GOV'T CODE § 262.023.

S U M M A R Y

Subsection 262.023(c) of the Local Government Code requires "separate, sequential, or component purchases of items ordered or purchased" to be treated as a single purchase only when the purchases or orders would in normal purchasing practices be purchased in one purchase from the same supplier by the same county officer, department, or institution, and the purchases were made with the intent of avoiding the requirements of the County Purchasing Act. Whether a purchase was made in violation of the Act presents questions of fact that cannot be determined in an attorney general opinion.

Very truly yours,

KEN PAXTON
Attorney General of Texas

BRENT E. WEBSTER
First Assistant Attorney General

LESLEY FRENCH
Chief of Staff

MURTAZA F. SUTARWALLA
Deputy Attorney General for Legal Counsel

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

WILLIAM A. HILL
Assistant Attorney General, Opinion Committee