7’.   .




                    THEA~TORNEYGENERAL
                                OF      -XAS

                               AUSTIN     xx. TEXAS


                                 October 10, 1960

          Honorable D. C. Greer             Opinion No. 'M-946
          State Highway Engineer
          State Highway Department         Re:     Whether Highway Depart-
          Austin 14, Texas                         ment may provide in its
                                                   bridge improvement con-
                                                 , tracts that the contrac-
                                                   tor may keep the portions
                                                   of a dismantled bridge
                                                   not needed by the Depart-
                                                   ment, or whether such
                                                   materials must be disposed
                                                   of under Article 666 per-
                                                   taining to the Soard of
          Dear Pl- Greer:                          Control.
              Your opinion request reads as follows:
                   "Much of the work we do on the State Highway
              System involves the replacement of existing bridges
              which are too narrow or too weak to meet today's
              traffic demands. On these jobs we have an item in
              our contract which requires the contractor to dis-
              mantle the old bridge. In the past,we have retained
              any of the materials in the bridge which were suit-
              able for use on the State Highway System and have
              allowed the contractor to retain any other materials,
              even though they may have had some value. It was
              felt that due to the great amount of competition in
              the bidding on these jobs the value of the material
              would be reflected in the bids on the other items
              and that we had the authority to do this under Article
              6674k, which states as follows:
                        'The State Highway Commission shall prescribe
                   the form of such contracts and may include therein
                   such matters as they may deem advantageous to the
                   State. Such forms shall be uniform, as near as
                   may be.'
                   "Some time ago we had Attorney General Opinion
              O-6798 called to our attention wherein it was stated
              that the Health Department cauld not trade unneeded
              laboratory equipment for repair work on one of their
                                                                .   .‘?




Honorable D. C. Greer, Page 2   W-946)



     buildings but that the equipment would have to be
     sold under the provisions of Article 666.
          "Would you please advise us whether the reason-
     ing in that opinion applies to a contract for the
     improvement of the highway system or whether we have
     the authority to so dispose of such sur lus pro-
     perty under the provisions of Article 6 iz
                                              7&k."
     You have correctly quoted Article 6674k.  This article
is under Chapter 1, Title 116, setting up the State Highway
Commission, providing for the awarding of contracts, the
maintenance of highways, and allied matters. The broad
language of Article 6674k concerning the contents of con-
tracts was never designed nor intended to give the State
Highway Commission the authority to override positive stat-
utes on the alienation of the title to State's property.
It deals with an entirely different subject.
     In Attorney General Opinion 0-6798, about which you
inquire, this office held that the Health Department could
not trade unneeded laboratory equipment for repair work
on one of their buildings, the basis of the opinion being
that same would have to be sold under Article 666.   We quote
from the opinion.
          "The question here presented is whether
     public personal property which is no longer needed
     may be exchanged for work or services necessary
     in the repair of a public building. No authority
     for such an exchange has been found but to the
     contrary it appears that the disposition of the
     public personal property mentioned in your letter
     should be governed by Article 666, Vernon's Anno-
     tated Civil Statutes of Texas."
     That opinion is very much applicable and would bs our
holding herein except for a recent statute later mentioned.
     Article 666 provides for the disposition of either
surplus property or salvage property under the direction
of the Board of Control. Surplus property is defined to
be "any personal property which is in excess of the needs
of any State agency and which is not required for its
foreseeable needs." Salvage property is defined to be
r'anypersonal property which through use, time, or accident
is so depleted, worn out, damaged, used or consumed that
it has no value for the purpose for which it was originally
intended."
.. .   .




           Honorable D. C. Greer, Page 3   (W-946)



                It seems very clear that if the component parts of
           this dismantled bridge are useful and usable but are simply
           not needed by the State that they would be surplus property.
           This is the way you describe them. On the other hand, if
           (due to any of the things enumerated in the definition) they
           have no value for the purpose for which originally intended,
           clearly they would be salvage property. Thus, it is inescap-
           able that this property falls in one category or the other;
           it is either surplus property or it is salvage property.
                Our Supreme Court in Chas. Scribner's Sons v. Xarrs,
           262 s..WO622 held: "If state authorizes a certain officer
           or legal body to contract for it in regard to a certain
           subject, no other officer or governmental agency can exer-
           cise the authority."
                However, Article 666 has been amended and revamped
           by the Salvage and Surplus Act of 1957, which became effec-
           tive September 1, 1957. While the Board of Control, in
           the main, is still charged with the duty of disposing of
           surplus and salva e property, a notable exception is pro-
           vided by Section 5   We quote:
                      "Any state agency may offer surplus or salvage
                 property which has become unfit for use as a trade-in
                 on new property of the same general type when such
                 exchange is in the best interests of the state."
                 Article 666, Sec. 6.
                This authority of "trade-inisis unlimited except as
           to the requirement that the new property be of the same
           general type as the surplus or salvage and that the exchange
           be in the best interests of the State. It is not restricted
           to typewriters, automobiles, or any specific kind of prop-
           erty; it would apply with equal force to the materials used
           in the construction of a bridge.
                Inquiry and inspection of your bridge contract forms
           reveal that the contracts are let upon unit bid price on
           many items. 3esides the various items of labor and con-
           struction there are items such as removing old bridge,
           structural steel beams, railing, piling, concrete and the
           many other things necessary to build the bridge0 Thus the
           contractor not only agrees to construct the bridge but also
           agrees to furnish the manifold materials requisite for the
           construction, The Highway Department, therefore, literally
           "buysItfrom the contractor these items. To say that a
           trade-in is not permitted for these materials is to engraft
           an exception on the statutes which the legislature did not
           see fit to put there.
Honorable D. C. Greer, Page 4   (W-946   1

     You state in your opinion request it is felt that in
the bidding the value of the material ‘(the surplus) would
be reflected in the bids on the other iterns. This is likely
true in some instances, but is not necessarily SO*
     Unless the contractor has some definite idea as to what
he may expect in the way of these materials his bid would
likely reflect nothing by way of an allowance. Such indef-
inite and unknown materials as he might eventually receive
might turn out to be a complete"give-away" by the State.
     Ve have examined a bridge contract on a past construc-
tion job. A standard printed provision gives the contractor
such dismantled materials as are left after the State has
taken what it wants. However, in this instrument there is
another sheet amendatory of the first one, wherein the mater-
ials to be taken by the contractor are specified. This should
be done in every contract, and a slight addition to the bid
sheets should be made, wherein the bidder shall specify how
much allowance or trade-in credit will be given for the sal-
vage and surplus materials. 3y doing these things you can
make the deal a bona fide "trade-in," it will clearly come
within the quoted part of Sec. 6 of Art. 666, and you will
el.iminatethe question as to whether "such exchange is in the
best interests of the State." Should you not want to dispose
of these materials as suggested then the services of the
3oard of Control are open to you. The concluding portion of
said Sec. 6 says:
          "And further provided that when re uested by
     such agency or institution to do so, an8 under the
     terms and conditions set forth in Sections 4 and 5
     above, the 3oard of Control will dispose of said
     property as provided for in this acts"
     It is therefore our opinion and we so hold that the
State Iiihway Department may when applicable proceed under
Section % of Article 666 independently of the Board of Control.
This means that you may offer any surplus or salvage property
taken from an old bridge, which has become unfit for use for
your purposes, as a trade-in on the materials of the same
general type which will go into the construction of the new
bridge, when the highway Department determines that suck ex-
change is in the best interests of the State; we therefore
see no objection to your making provision in your bridge
contracts, under these circumstances, that the contractor
may have such surplus or salvage property as a trade-in,
but the contract should reflect the materials which the
contractor will get and the amount of the allowance or
trade-in credit.
Honorable D. C. Greer, Page 5   (W-946   1




           Under Article 666, Section 6, the Highway
      Department may, independently of the Board of
      Control, provide in its bridge contracts for
      the trade-in of surplus or salvage property
      which has become unfit for use9 the contract
      providing what materials the successful bidder
      will get and reflecting the amount of the
      trade-in credit on the new materials to go in
      the bridge, when, in the opinion of the Depart-
      ment, such exchange is in the best interests of
      the State.
                                Yours very truly,
                                WILL WILSON
                                Attorney General of Texas




WRS:ncs
APPROVED:
OPINION COIJKITTEE
W. V. Geppert, Chairman
Bill Allen
Ben Harrison
H. Grady Chandler
REVIE‘WEDPOR'THE ATTORNEY GENERAL
BY:   Leonard Passmore