To all those of you who know everything there is to know about civil law as it relates to counties, I need help!
I live in a small county but we have a County owned hospital, park with ballfields and concession stands and a coliseum. A major soft drink company has offered us a deal with up-front money for the exclusive right to place their product at these and other county facilities. They are also going to give us a rebate for each case purchased etc.Expected income of about $35,000 per year. Expeditures are unknown, depends on the amount of product purchased and, of course, we cannot sell competitors products.
I cannot decide if this situation requires competitive bids or not. I don't think it specifically fits the statute. I don't think it fits as a food purchase. It seems to be more akin to a license or franchise.

I have not been able to find any law on point.
Any help or thoughts would be greatly appreciated.
thanks,
Mike Hartman, Scurry County Attorney

[This message was edited by mhartman on 01-13-03 at .]

Mike:
First, the disclaimer I am not a Civil Smartie. I agree with you it does appear to be a license or lease. At our coliseum pepsi wanted exclusive pourage rights. We went out for rfps and had pepsi and coke compete. This way no there is no inside deal halo. The rfp was for three years and one year option, separated the value of the pouring rights at the coliseum. There also was a distinction made as to the advertising rights and described the advertising areas? Are you going to give them an exclusive as to advertising and what areas? What happens if a competitor wants to advertise and not sell? What if a competitor wants to give away samples? There should be a yearly amount paid. These are just some issues to think about? Call 210-335-2925 or email me if you need more dialogue. Les

An instructive case, with somewhat analogous facts to your situation, on federal antitrust and state monopolistic practices issues is Apani S.W., Inc. v. Coca-Cola Enters., Inc., 300 F.3d 620 (5th Cir. 2002). It involves a contract between Coca-Cola and the City of Lubbock for Dasani (Coca-Cola's bottled water brand) to be the exclusive bottled water brand sold at any city-owned facility (e.g., Municipal Coliseum, parks concessions, etc.). The court's analysis of the antitrust issues is thorough and, as it would appear germane to your perspective, helpful.

From a state law point of view, section 262.022(6) of the Local Government Code defines "purchase," for purposes of the general $25,000-triggered competitive bidding requirement, as "any kind of acquisition, including lease, of an item." From your description, the county would not be acquiring beverages or beverage products. Instead, it would be granting an exclusive opportunity to the vendor to sell the vendor's beverage products at county-owned facilities. Thus, unless the county is leasing or conveying any property within the scope of chapter 263, I am unaware of any other applicable competitive bidding requirement.

The remaining question is whether the county is receiving an adequate quid pro quo, so as to satisfy article 3, section 52(a) of the constitution, for whatever use of county property is entailed in the transaction. Since the county is being paid for the deal, and since the commissioners court is the body responsible in the first instance for making the determination of whether the county will receive adequate compensation, you're probably on solid ground there, as well. This all presumes that none of your commissioners court members has a substantial interest in the beverage company at issue, as contemplated by chapter 171 of the Local Government Code.

As I re-read your post, however, I noted some uncertainty as to the amount to be "purchased." If you think the county will be buying ANY of the product, I must agree with Les that the safest course is to bid it, so as to avoid the appearance of insider- and self-dealing. Given the speculative nature of this deal, a unit-pricing arrangement would seem to be appropriate.

[This message was edited by Scott Brumley on 01-13-03 at .]

as a small town persecutor - er - prosecutor - with no more time than money, ah tends ter be cautious.

My "Golden Rule" is - if I have to think about it, we bid it.

When Ah has to play with the "Big Boys", Ah' druther be safe then sorry / / / !!!

As always, thanks for the imput. We are in a unique position in that we act as our own drink vendor at the coliseum and the hospital cafeteria, i.e. we buy the drinks and retail them and keep the profits. That is the concern I have as it relates to the bid process. We will probably purchase more than $25,000 worth of drinks per year. Does that help or hurt?
Thanks
Mike

I would still bid. It is next to impossible to go wrong with bidding it (at least in the eyes of the tax paying and voting public), and failure to do so can really backfire - - before you know what is happening.

I'm not convinced that you HAVE to, just firmly believe it to be the wisest course.