Texas Attorney General Opinion: GA-0705 Page: 2 of 4
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Mr. Robert Scott - Page 2
In contracting with the third party auctioneer, you explain that there "is no direct charge to
the school district for participating in the reverse auction." Id. at 2. Instead, suppliers enter into an
agreement with the auctioneer, whereby each supplier agrees "to pay a fee to the auctioneer in the
event that the [supplier] is successful in obtaining a contract with the school district by using the
reverse auction procedure." Id. at 1-2. You also explain that at the end of each auction, the school
district has the authority to "reject all offers, using its own judgment and discretion." Id. at 2.
Based on these procedures, you ask whether a school district's use of a third party to conduct
a reverse auction improperly delegates authority to a private entity. Id. at 2.3 Your question is based
on the long-held general rule that in the absence of statutory authorization, a governmental body
"may not delegate unlimited legislative powers and functions" or powers "involving the exercise of
judgment and discretion." Moody v. City of Univ. Park, 278 S.W.2d 912, 922 (Tex. Civ.
App.-Dallas 1955, writ ref'd n.r.e.) (upholding city's authority to delegate decisions to approve
land use variances to board of adjustment). The Texas Supreme Court has recognized that "in a
complex society like ours, delegation . .. is both necessary and proper in certain circumstances."
FMProps. Operating Co. v. City ofAustin, 22 S.W.3d 868, 873 (Tex. 2000) (addressing whether
the Legislature unconstitutionally delegated power to private landowners). However, it has
repeatedly cautioned "against 'allowing delegation of power to exercise unguided discretion.'" Tex.
Boll Weevil Eradication Found., Inc. v. Lewellen, 952 S.W.2d 454, 466 (Tex. 1997) (quoting
KENNETH CULP DAVIS, 1 ADMIN. LAW TREATISE 3.1, at 150 (2d ed. 1978)) (emphasis added); see
also Bd. ofAdjustment of the City of Dallas v. Patel, 887 S.W.2d 90, 93 (Tex. App.-Texarkana
1994, writ denied) (emphasizing that "[a]rbitrary, uncontrolled, and unreviewable discretion may not
be delegated," and upholding, over delegation doctrine arguments, an ordinance allowing citizens
to complain of nonconforming uses).
The statute authorizing school districts to use the reverse auction procedure is silent as to
whether they may use a third party to host the auction. See TEX. EDUC. CODE ANN. 44.031
(Vernon Supp. 2008). However, under the delegation doctrine, as explained by the Texas Supreme
Court in Boll Weevil and its progeny, a constitutional delegation question arises only if the state or
a political subdivision purports to grant a private entity "a public duty and the discretion to set public
policy, promulgate rules to achieve that policy, or ascertain conditions upon which existing laws will
apply." FMProps. Operating Co., 22 S.W.3d at 880. As you explain the reverse auction process
using a third party, a school district retains the discretion to decide which contracts to enter into and
at what price. The school district simply relies on the private reverse auction company to obtain
"specifications for any offer to purchase from the school district," "publish[] the offer" to purchase,
and provide the technology and resources to host the auction. District Brief at 1-2. In doing so, a
2(...continued)
including its reverse auction program, if those entities follow certain requirements. See TEX. Loc. GOV'T CODE ANN.
271.083 (Vernon 2005). While the School District is aware of section 271.083, it inquires only about its authority to
contract individually with a third party to host a reverse auction. See District Brief at 2.
3you do not ask and we do not address any statutory provisions that may be applicable to the school district's
selection of a third party to host the reverse auction.(GA-0705)
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Texas. Attorney-General's Office. Texas Attorney General Opinion: GA-0705, text, April 8, 2009; (https://texashistory.unt.edu/ark:/67531/metapth275601/m1/2/: accessed April 28, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.