Texas School District Construction: Delivery Methods, Bonds, Retainage and District Rules

Chapter 2269 names school districts among the governmental entities it covers (2269.002(2)(C)), and under 2269.056(a) the district must decide, before advertising, which method gives it best value. That choice shapes the bond, the insurance and the subcontract terms, so the method in the solicitation is the first thing a bidder typically checks.

Competitive sealed proposals (2269.151 through 2269.154) use construction documents prepared by an architect or engineer, and the district ranks offers within 45 days after opening. The rule that price carries at least 50 percent of the weight applies to civil works projects (2269.153(c)), not to school buildings in general.

Construction manager-at-risk (2269.251 and following) uses a one-step or two-step selection. The CMAR "shall publicly advertise for bids or proposals" from trade contractors (2269.255(a)), so trade contractors usually compete for school packages through the CMAR rather than the district. When a CMAR's performance and payment bonds are given without a fixed price, they "must each be in an amount equal to the construction budget" (2269.258(a)) and are due by the 10th day after execution (2269.258(b)). For a surety, a budget-sized bond issued before final pricing can be a meaningful capacity commitment.

Design-build under 2269.301 and following applies only to a building or an associated structure, requires an independent architect or engineer (2269.305) and states that the bond "may not provide coverage for the design portion" of the contract (2269.311(a)). The design-builder's design exposure therefore typically rests on professional liability insurance, not on the bond. The subchapter sets no dollar threshold for buildings.

Job order contracting (2269.401 through 2269.411) is also limited to buildings. The governing body must approve each job, task or purchase order over $500,000 (2269.403(c)), the base term may not exceed two years (2269.409(a)) and the contract can be renewed for not more than three additional years (2269.409(b)). Bonds are tied to the amount or estimated amount of each order (2269.411).

Government Code chapter 2253 lists "a school district or a subdivision of a school district" among the governmental entities it covers (2253.001(1)(C)). A district must require a performance bond when the contract is in excess of $100,000 (2253.021(a)(1)) and a payment bond when the contract is in excess of $25,000 (2253.021(a)(2)(A)). The $50,000 payment bond trigger in the same section applies to municipalities and joint boards, not school districts.

Each bond is written in the amount of the contract (2253.021(b)(2)) and must be executed by a corporate surety (2253.021(d)). Surety support for a school job is a separate underwriting decision: capacity, backlog and indemnity terms are set by the surety, subject to underwriting and the terms of the bonds issued. A district's documents can ask for more than the statute, such as a surety rating floor, so the solicitation controls.

Government Code 2252.031 through 2252.033 apply to school districts. Under 2252.032(b)(1), a district "may not withhold retainage in an amount that exceeds 10 percent of the contract price." Section 2252.032(b)(2) sets a lower cap of 5 percent of the contract price for larger contracts; the statute ties that tier to contracts of $5 million or more, but the exact threshold wording should be confirmed in the current statute text and the contract before a firm prices retention.

The subchapter does not apply when "the total contract price estimate at the time of execution of the contract is less than $400,000" (2252.033). On smaller school jobs, the contract's own retainage clause governs, and subcontract retention terms should be lined up with whatever the prime contract allows.

Texas Insurance Code chapter 151, added in 2011 and effective January 1, 2012, limits additional insured requirements in construction contracts. Under 151.104(a), a provision requiring additional insured status is "void and unenforceable to the extent that it requires or provides coverage" for the indemnitee's own fault, with exceptions that include claims for "bodily injury or death of an employee of the indemnitor" (151.103).

Section 151.104(b) excepts consolidated insurance programs, the owner-controlled and contractor-controlled wrap-ups in which one program insures the owner, the contractor and enrolled subcontractors. The chapter's exclusion in 151.105(10)(B) refers to municipal public works rather than school districts. The text we read does not expressly exclude districts. Whether chapter 151 reaches a particular school district contract is a question for the contractor's counsel, and the policy's additional insured endorsement can vary by carrier guidelines and programs.

The Texas Education Agency's Financial Accountability System Resource Guide, Update 20, Module 5 on purchasing (2026), states that "the district must utilize the Texas Government Code, Chapter 2269, for all construction related procurements." The module lists seven methods: competitive bidding, competitive sealed proposals, construction manager-agent, construction manager-at-risk, design-build, job order contracting and reverse auction.

The module also addresses construction bought through a purchasing cooperative: a purchase over $50,000 needs a written certification, by a person the district designates, on the plans and specifications. Contractors that sell construction through cooperative contracts should expect districts to ask for that step before an order is issued.

Houston ISD's November 5, 2024, bond election, Proposition A for $3.96 billion in facilities and Proposition B for $440 million in technology, a total of $4.4 billion, is shown as defeated on the district's debt page, and the district's elections page says "There currently are no scheduled upcoming bond elections." The last approved bond shown is $1.89 billion from November 6, 2012.

Vendors "must register in the IonWave E-Bidding platform" to respond. The district's Standard Terms and Conditions (Rev. 9/30/2025) apply to all solicitations and are not construction-specific. They call for carriers rated A or better by A.M. Best and for 30 days' notice. Houston ISD is to be named as an additional insured on the auto and general liability policies, a waiver of subrogation is issued in its favor on workers' compensation, auto and general liability. The district is also named as alternate employer. The terms set performance bond and payment bond thresholds of $100,000 and $25,000, with sureties rated A- or better, require prevailing wage under Government Code chapter 2258 and set a 10-day subcontractor payment term. A construction solicitation's own documents control, and those may differ.

• Workers' compensation: Texas statutory
• Employer's liability: $100,000 per accident
• Automobile liability: $1,000,000 combined single limit, owned, non-owned and hired
• Commercial general liability: $1,000,000 per occurrence

Dallas ISD's bond site describes a 2026 bond program of $6.2 billion. The same site shows conflicting election dates, so confirm the election date and the program's status with the district before relying on it. Dallas ISD posts solicitations on Beacon Bid, and its bond vendor opportunities page also publishes a restricted-contact list for open procurements.

Dallas ISD's Small Business Office compliance packets show the district uses both CMAR and competitive sealed proposals. The CMAR packet (last updated August 14, 2026) says the small business forms "are valued at up to 20 percentage points of the overall score" and that, for bond-funded contracts, the aspirational SBE goal is 30 percent for construction and 35 percent for professional services. Certifications it accepts include NCTRCA, SCTRCA, TxDOT, the Texas Comptroller's HUB program, SBA, the City of Houston, the City of Austin, WBCS, WBENC and NMSDC.

The CSP construction packet (last updated October 29, 2025) carries the same 30 percent goal. Its scoring credits early release of retainage to assist SBEs and offering help with financing, bonding, insurance, certification or mentoring. A shortfall in good faith efforts can cost points. Insurance minimums and contract terms for a Dallas ISD project come from that solicitation's documents.

"On Nov. 8, 2022, voters approved Austin ISD's $2.44 billion bond," made up of Proposition A for general purposes ($2,316,025,000), Proposition B for technology ($75,541,000) and Proposition C for stadiums ($47,434,000). The district's bond tracker read on October 26, 2026, showed 10 of 32 projects completed, and no newer bond is shown.

Austin ISD posts bids on Bonfire, and its procurement page notes that "Registration does not automatically make you an approved vendor." The page says construction manager-at-risk and job order contracts are advertised under chapter 2269, which is part of the Government Code. The district's Small Business Program, formerly its HUB program, "sets a 20% annual participation goal for eligible construction contracts" and 30 percent for professional services, and the district's construction management page says a national background check is required before beginning work. Insurance minimums and contract terms for an Austin ISD project come from that solicitation's documents.