Your school district approves a $5 million construction project to build a new science wing. Three months into construction, the contractor discovers unexpected soil conditions requiring expensive foundation modifications. Meanwhile, your district is negotiating a shared services agreement with a neighboring district for special education resources. These scenarios represent the complex world of educational institution contracting in Texas, where legal requirements protect taxpayer dollars while ensuring students receive quality facilities and services.
Texas education contracting operates under strict statutory requirements that govern everything from major construction projects to inter-district partnerships. Whether you’re a school administrator managing a building project or negotiating agreements between educational institutions, the legal landscape requires careful navigation to avoid costly mistakes.
Construction Contracts for Educational Institutions
Under Texas Government Code Chapter 2269, school districts must follow specific procedures for construction services. Unlike general procurement, construction contracts require districts to evaluate available contracting methods and select the one that provides the best value for the project.
Available Construction Methods
Texas law recognizes several construction delivery methods for educational facilities:
Competitive Bidding – Traditional method where the lowest responsible bidder wins the contract after architectural plans are complete.
Competitive Sealed Proposals – Allows evaluation of qualifications, experience, and technical approach alongside price considerations.
Construction Manager-Agent – District retains a construction manager to oversee the project while maintaining separate contracts with trade contractors.
Construction Manager-at-Risk – Single entity provides both construction management services and guarantees the maximum project price.
Design-Build – One contract covers both architectural design and construction, allowing faster project delivery.
Job Order Contracts – Pre-established contracts for recurring maintenance and minor construction work.
For most construction methods, districts must have an architect or engineer prepare construction documents before selecting contractors. This requirement ensures proper planning and helps prevent costly changes during construction.
Best Value Selection for Construction
Construction projects must be awarded based on “best value” rather than lowest price alone. Districts must consider factors including:
- Contractor Experience – Track record with similar educational facility projects
- Project Team Qualifications – Expertise of key personnel assigned to the project
- Technical Approach – Quality of proposed construction methods and materials
- Schedule Performance – Ability to complete work within required timeframes
- Safety Record – Historical safety performance on construction sites
- Financial Capacity – Bonding capability and financial stability
- Local Economic Impact – Employment of local workers and subcontractors
This evaluation process protects districts from contractors who might compromise quality or safety to submit artificially low bids.
Contracts Between Educational Institutions
Inter-District Service Agreements
School districts frequently enter shared services agreements to provide specialized programs cost-effectively. Common arrangements include:
Special Education Cooperatives – Multiple districts pool resources to provide specialized services for students with disabilities.
Career and Technical Education Centers – Regional facilities serving students from multiple districts for vocational training.
Transportation Partnerships – Shared bus routes and maintenance facilities between neighboring districts.
Professional Development Consortiums – Joint teacher training programs and educational conferences.
These agreements must clearly define each party’s responsibilities, funding obligations, and student enrollment procedures to avoid disputes.
Higher Education Partnerships
Community colleges and universities often contract with K-12 districts for dual credit programs, facility sharing, and research partnerships. Key considerations include:
- Student Eligibility Requirements – Academic standards for program participation
- Credit Transfer Policies – How courses apply toward high school and college graduation
- Facility Usage Terms – Scheduling, maintenance, and liability for shared spaces
- Instructor Qualifications – Credentialing requirements for teachers in dual programs
Charter School Agreements
Traditional districts may contract with charter schools for facility leases, transportation services, or specialized programs. These agreements require careful attention to:
- Funding Flow-Through – How state and local funding transfers between institutions
- Academic Accountability – Performance standards and monitoring procedures
- Asset Ownership – Rights to equipment, materials, and facility improvements
- Termination Procedures – Wind-down processes if agreements end
Construction Project Management
Change Orders and Cost Control
Texas Education Code Section 44.0411 governs change orders for construction contracts, limiting increases to 25% of the original contract price for projects worth $1 million or more. Districts should establish clear procedures for:
Change Authorization – Written approval processes before additional work begins
Cost Documentation – Detailed records of labor, materials, and overhead for all changes
Funding Verification – Confirmation that district has budget authority for additional costs
Timeline Impact – Assessment of how changes affect project completion dates
Progress Monitoring and Quality Control
Effective construction oversight requires regular monitoring of:
Schedule Compliance – Milestone achievement and critical path management
Quality Standards – Material testing and workmanship inspections
Safety Protocols – Compliance with OSHA requirements and district safety policies
Budget Tracking – Monthly cost reports and cash flow projections
Emergency Construction Procedures
When disasters damage educational facilities, normal procurement requirements can delay critical repairs. Texas Education Code Section 44.031(h) provides an emergency exception when:
- School equipment or facilities are destroyed or severely damaged
- Major operational failures occur
- Normal procurement delays would prevent or substantially impair essential school activities
Districts must document why the emergency exception applies and ensure proper oversight even under expedited procedures.
Risk Management and Contract Terms
Insurance and Bonding Requirements
Construction contracts for educational facilities typically require:
Performance Bonds – Guarantee that contractors will complete work according to specifications
Payment Bonds – Protection for subcontractors and material suppliers
General Liability Insurance – Coverage for property damage and personal injury claims
Professional Liability – Protection against design errors and omissions
Workers’ Compensation – Required coverage for all construction workers on site
Warranty and Maintenance Provisions
Educational facility contracts should include:
Workmanship Warranties – Typically one year for general construction work
Equipment Warranties – Extended coverage for HVAC, technology, and specialized systems
Preventive Maintenance Training – Instruction for district maintenance staff
Spare Parts Inventory – Critical components for ongoing system operation
Common Contract Disputes and Resolution
Construction-Related Issues
Schedule Delays – Weather, permit delays, or unforeseen site conditions affecting completion dates
Quality Defects – Workmanship issues requiring correction or replacement
Cost Overruns – Change orders or disputed work pushing projects over budget
Safety Violations – Accidents or regulatory compliance failures on construction sites
Inter-Institutional Disputes
Funding Disagreements – Disputes over cost allocation between partnering districts
Student Enrollment Issues – Capacity limits or eligibility conflicts in shared programs
Performance Standards – Disagreements about service quality or academic outcomes
Termination Procedures – Disputes over contract ending and asset disposition
Resolution Strategies
Successful dispute resolution requires:
Documentation – Detailed records of all project communications and decisions
Early Intervention – Addressing problems promptly before they escalate
Alternative Dispute Resolution – Mediation or arbitration to avoid costly litigation
Professional Consultation – Engineering experts, educational consultants, or legal counsel as needed
Compliance and Legal Protections
Criminal Penalties for Procurement Violations
Texas takes construction procurement violations seriously. Under Section 44.032, school district officers who knowingly violate competitive bidding requirements face criminal charges and immediate removal from office.
Internal Controls and Best Practices
Districts should implement:
Procurement Training – Regular education for administrators on legal requirements
Approval Hierarchies – Clear authorization levels for contract decisions
Documentation Standards – Consistent record-keeping for all contract activities
Conflict of Interest Policies – Procedures to identify and manage potential conflicts
Technology and Specialized Systems
Modern educational facilities require complex technology infrastructure. Construction contracts should address:
Network Infrastructure – Cabling, wireless systems, and internet connectivity
Security Systems – Access control, surveillance, and emergency communication
Classroom Technology – Interactive boards, projection systems, and device charging
Maintenance Access – Training and documentation for ongoing system support
Long-Term Planning Considerations
Facility Master Planning
Successful construction projects align with long-term educational goals:
Enrollment Projections – Demographic analysis and capacity planning
Educational Program Changes – Facility flexibility for evolving curriculum needs
Technology Evolution – Infrastructure that accommodates future upgrades
Sustainability Goals – Energy efficiency and environmental impact considerations
Budget Planning and Financing
Major construction projects require careful financial planning:
Bond Election Requirements – Voter approval for significant debt issuance
State Funding Programs – Available grants and assistance programs
Multi-Year Budget Impact – Operating cost implications of new facilities
Reserve Fund Management – Contingency planning for unexpected costs
When to Seek Legal Assistance
Contact legal counsel immediately when:
- Construction disputes arise affecting project completion
- Change orders exceed statutory limits or available funding
- Safety incidents occur on construction sites
- Inter-district agreements face termination or modification
- Compliance violations are discovered or alleged
- Emergency procurement decisions require documentation
Frequently Asked Questions
Q: Can districts use design-build for all construction projects? A: No. Districts must evaluate available delivery methods and select the one providing best value. Some projects may benefit from traditional competitive bidding or other approaches.
Q: What constitutes an emergency allowing expedited construction procedures? A: Emergencies include facility destruction, severe damage, or major operational failures where normal procurement delays would prevent or substantially impair essential school activities. The board must document this determination.
Q: How are construction change orders limited under Texas law? A: For contracts worth $1 million or more, change orders cannot increase the original contract price by more than 25% unless additional competitive procedures are followed.
Q: Can districts negotiate construction contracts after bids are opened? A: For competitive sealed proposals, districts may negotiate with the selected contractor regarding scope modifications and associated price changes. If negotiations fail, the district must proceed to the next-ranked proposer.
Q: What documentation is required for inter-district agreements? A: All agreements should include clear definitions of services, funding responsibilities, performance standards, and termination procedures. Agreements valued at $25,000 or more require additional reporting to the board of trustees.
Q: Are there special bonding requirements for educational construction? A: Yes. Most construction contracts require performance and payment bonds. The specific bonding requirements depend on project value and delivery method selected.
Professional Legal Assistance for Educational Construction
When construction and institutional contracting issues arise, prompt legal action protects both educational programs and taxpayer resources. At Vestige Law PLLC, we represent Texas school districts and educational institutions in all aspects of construction and institutional contract law.
Our experience with Texas Education Code requirements and Government Code Chapter 2269 construction procedures helps clients navigate complex projects successfully. We assist with contract drafting, delivery method selection, emergency construction situations, and inter-institutional agreement negotiations.
Don’t let contract problems disrupt student learning or expose your organization to legal liability. Contact Vestige Law PLLC today to schedule a consultation about your educational construction and contracting needs. Our team stands ready to help you manage the legal complexities while keeping your focus where it belongs—on educating students.
