Procuring Professional Services for Multi-Component Municipal Projects
When taking on large-scale public improvement projects, Texas cities face a litany of complicated legal and practical challenges long before the first stake is ever placed in the ground. Such challenges involve essential questions of who will perform the necessary work, how will the city go about procuring the services, how much will it all cost, and who will be paying the bill.
The general rule under Texas law provides that cities contracting for services that require an expenditure of more than $50,000 from one or more municipal funds must follow procedures for competitive sealed bidding or competitive sealed proposals. See Tex. Loc. Gov’t Code § 252.021. However, state law allows for exceptions to these requirements depending on the nature of project and work involved.
For example, many public improvement projects will require the services of professional engineers, architects, and land surveyors. Under the Professional Services Act, a city is actually prohibited by state law from awarding a contract to an architect, engineer, land surveyor or other statutorily defined “professional service” provider through the sealed competitive bidding or proposal process. Instead, Texas Government Code Sec. 2254.003 provides that a governmental entity shall make the selection and award the contract for a provider of professional services or a group or association of providers: (1) on the basis of demonstrated competence and qualifications to perform the services; and 2) for a fair and reasonable price.
Following these guidelines, when a city, for example, requires the services of a professional architect or engineer for a specific project, it must first select the most highly qualified provider and then attempt to negotiate a fair and reasonable price. Texas Government Code Sec. 2254.004. If the city is unable to negotiate a contract with the most highly qualified provider, the city must then formally end negotiations with that provider and then select the next most highly qualified provider and attempt to negotiate a contract with that provider. The city must continue this process of formally ending negotiations with one provider and selecting another until a contract is obtained.
However, how does this process work when a single project requires the work of multiple professional service providers? For example, if a project involves two separate phases each requiring the work of an architect, an engineer and a land surveyor, can the city procure such services in a single contract? Or will the city need to select and negotiate potentially six separate agreements for each provider and each project phase?
The answer to this question will depend on the specific needs of each project phase and the qualifications of prospective providers or associations of providers of said professional services. Other important variables include what type of municipal project, or municipal construction will occur and what type of construction manager will be utilized. Strictly considering the Professional Services Act requires an examination of how professional services are defined.
The Occupations Code defines many of the professional services listed under the Professional Services Act and specifically excludes, as part of the definition, practices that may be encompassed by other professional services. For example, the Occupations Codes specifically states that the “practice of engineering does not include, and engineers may not engage in or offer to engage in, the practice of architecture as defined in Section 1041.001.” Occupations Code § 1001.0031(a).
If a project requires both engineering and architectural services, a city would likely need two separate contracts: one for the engineer and one for the architect.
However, because the Professional Services Act specifically considers the possibility of awarding a contract to a “group or association of providers,” a city may be able to enter into one contract for a project that includes architectural, engineering, and land surveying services so long as the city ultimately procures a group or association that legally includes providers of these three professional services.
While this may be theoretically possible, it will be extremely unlikely in practice, and again dependent on the project. Because the Professional Services Act also requires a city to select the most highly qualified provider to perform each service, it is doubtful that any single group or association of providers could adequately meet this standard for all phases and aspects of a multi-component project.
The key is to look at the specific requirements for each component of a project and make a separate determination of the most highly qualified provider for each such component. Cities should also always consult with legal counsel prior to entering professional service contracts.
Please do not rely on this article as legal advice. We can tell you what the law is, but until we know the facts of your given situation, we cannot provide legal guidance. This website is for informational purposes and not for the purposes of providing legal advice.
