74R11360 JRD-D
          By Romo                                               H.B. No. 2769
          Substitute the following for H.B. No. 2769:
          By Jones of Lubbock                               C.S.H.B. No. 2769
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the purchase of goods and services by the state and to
    1-3  purchasing services provided by the state to local governments.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  Section 1.02(5), State Purchasing and General
    1-6  Services Act (Article 601b, Vernon's Texas Civil Statutes), is
    1-7  amended to read as follows:
    1-8              (5)  "Best value" for purposes of Section 3.081 of this
    1-9  Act means lowest overall cost of information systems based on the
   1-10  following factors, including, but not limited to:
   1-11                    (A)  purchase price;
   1-12                    (B)  compatibility to facilitate exchange of
   1-13  existing data;
   1-14                    (C)  capacity for expansion and upgrading to more
   1-15  advanced levels of technology;
   1-16                    (D)  quantitative reliability factors;
   1-17                    (E)  the level of training required to bring
   1-18  end-users to a stated level of proficiency;
   1-19                    (F)  the technical support requirements for
   1-20  maintenance of data across a network platform and management of the
   1-21  network's hardware and software; and
   1-22                    (G)  compliance with applicable statewide
   1-23  standards adopted by the Department of Information Resources or a
   1-24  subsequent entity as validated by criteria established by the
    2-1  department or a subsequent entity in administrative rule.
    2-2        SECTION 2.  Article 3, State Purchasing and General Services
    2-3  Act (Article 601b, Vernon's Texas Civil Statutes), is amended by
    2-4  adding Section 3.011 to read as follows:
    2-5        Sec. 3.011.  PROVIDING CERTAIN PURCHASING SERVICES ON
    2-6  FEE-FOR-SERVICE BASIS.  (a)  The commission may provide open market
    2-7  purchasing services on a fee-for-service basis for state agency
    2-8  purchases that are delegated to an agency under Section 3.06 or
    2-9  3.08 of this Act.  The commission shall set the fees in an amount
   2-10  that recovers the commission's costs in providing the services.
   2-11        (b)  The commission shall publish a schedule of its fees for
   2-12  services that are subject to this section.  The schedule must
   2-13  include the commission's fees for:
   2-14              (1)  reviewing bid and contract documents for clarity,
   2-15  completeness, and compliance with laws and rules;
   2-16              (2)  developing and transmitting invitations to bid;
   2-17              (3)  receiving and tabulating bids;
   2-18              (4)  determining which bidder offers the best value to
   2-19  the state and awarding the contract to that bidder; and
   2-20              (5)  creating and transmitting purchase orders.
   2-21        SECTION 3.  Section 3.022, State Purchasing and General
   2-22  Services Act (Article 601b, Vernon's Texas Civil Statutes), is
   2-23  amended to read as follows:
   2-24        Sec. 3.022.  COMPETITIVE SEALED PROPOSALS.  (a)  The
   2-25  commission may acquire supplies, materials, services, or equipment
   2-26  <telecommunications devices, systems, or services or any automated
   2-27  information systems, the computers on which they are automated, or
    3-1  a service related to the automation of information systems or the
    3-2  computers on which they are automated, including computer
    3-3  software,> by following a procedure using competitive sealed
    3-4  proposals <if the commission determines by rule that competitive
    3-5  sealed bidding or informal competitive bidding is not practical or
    3-6  is disadvantageous to the state.  Items to be purchased from higher
    3-7  education research funds may be acquired by following a procedure
    3-8  using competitive sealed proposals>.  The commission, or a state
    3-9  agency or <an> institution of higher education if the agency or
   3-10  institution is making the acquisition <if research purchasing
   3-11  authority has been delegated to that institution> under Section
   3-12  3.06 or 3.08 of this article, must first determine that competitive
   3-13  sealed bidding or informal competitive bidding is not practical or
   3-14  is disadvantageous to the state.  If the competitive sealed
   3-15  proposal procedure is to be handled by the state agency or
   3-16  institution of higher education, the agency or institution shall
   3-17  follow the procedures outlined by this section for the commission.
   3-18        (b)  The commission shall consult with appropriate personnel
   3-19  of a requisitioning agency to develop specifications for a request
   3-20  for competitive sealed proposals under this section.
   3-21        (c)  The commission shall solicit proposals by a request for
   3-22  proposals.  The commission shall give public notice of a request
   3-23  for proposals in the manner provided for requests for bids under
   3-24  Section 3.12 of this article.
   3-25        (d) <(c)>  The commission shall open each proposal in a
   3-26  manner that does not disclose the contents of the proposal during
   3-27  the process of negotiating with competing offerors.  The commission
    4-1  shall file each proposal in a register of proposals, which shall be
    4-2  open for public inspection after a contract is awarded unless the
    4-3  register contains information that is excepted from disclosure <as
    4-4  an open record> under Subchapter C, Chapter 552, Government Code
    4-5  <Section 3, Chapter 424, Acts of the 63rd Legislature, Regular
    4-6  Session, 1973 (Article 6252-17a, Vernon's Texas Civil Statutes)>.
    4-7        (e) <(d)>  As provided in a request for proposals and under
    4-8  the rules adopted by the commission, the commission may discuss
    4-9  acceptable or potentially acceptable proposals with offerors in
   4-10  order to assess an offeror's ability to meet the solicitation
   4-11  requirements.  After the submission of a proposal but before making
   4-12  an award, the commission may permit the offeror to revise the
   4-13  proposal in order to obtain the best final offer.  The commission
   4-14  may not disclose any information derived from proposals submitted
   4-15  from competing offerors in conducting discussions under this
   4-16  subsection.  The commission shall provide each offeror with an
   4-17  equal opportunity for discussion and revision of proposals.
   4-18        (f) <(e)>  The commission shall invite a requisitioning
   4-19  agency to participate in discussions conducted under Subsection (e)
   4-20  <(d)> of this section.
   4-21        (g) <(f)>  The commission shall make a written award of a
   4-22  purchase or lease to the offeror whose proposal offers <is> the
   4-23  best value <most advantageous> to the state,  considering price,
   4-24  past vendor performance, vendor reputation, and the evaluation
   4-25  factors in the request for proposals, except that if the commission
   4-26  finds that none of the offers is acceptable, it shall refuse all
   4-27  offers.  In determining which proposal offers the best value <is
    5-1  most advantageous> to the state, the commission shall, subject to
    5-2  Section 3.104 of this article, consider the factors listed in this
    5-3  subsection and in Section 3.103 of this article or, when
    5-4  applicable, the factors listed in this subsection and in Section
    5-5  1.02(5) of this Act. <such as installation costs, the overall life
    5-6  of the system or equipment, the cost of acquisition, operation, and
    5-7  maintenance of hardware included with, associated with, or required
    5-8  for the system or equipment during the state's ownership or lease,
    5-9  the cost of acquisition, operation, and maintenance of software
   5-10  included with, associated with, or required for the system or
   5-11  equipment during the state's ownership or lease, the estimated cost
   5-12  of supplies, the estimated costs of employee training, the
   5-13  estimated cost of additional long-term staff needed, and the
   5-14  estimated increase in employee productivity.  The contract file
   5-15  must state in writing the basis on which the award is made.>
   5-16        (h) <(g)>  The commission shall adopt rules necessary or
   5-17  convenient to perform its responsibilities under this section and
   5-18  shall request assistance from other state agencies as needed.
   5-19        <(h)  A medical or dental unit as that term is defined in
   5-20  Section 61.003, Education Code, may purchase the following types of
   5-21  medical equipment by the use of competitive sealed proposals if it
   5-22  follows commission rules and procedures provided by this section
   5-23  regarding the use of competitive sealed proposals and submits to
   5-24  the commission a written finding that competitive sealed bidding or
   5-25  informal competitive bidding is not practical or is disadvantageous
   5-26  to the state for the proposed acquisition:>
   5-27              <(1)  prototypical medical equipment not yet available
    6-1  on the market;>
    6-2              <(2)  medical equipment so new to the market that its
    6-3  benefits are not fully known; or>
    6-4              <(3)  major medical equipment that is so technically
    6-5  complex that development of specifications for competitive bidding
    6-6  is not feasible.>
    6-7        SECTION 4.  Article 3, State Purchasing and General Services
    6-8  Act (Article 601b, Vernon's Texas Civil Statutes), is amended by
    6-9  adding Section 3.045 to read as follows:
   6-10        Sec. 3.045.  COOPERATION WITH FEDERAL GOVERNMENT PURCHASING.
   6-11  (a)  In accordance with procedures prescribed by rules of the
   6-12  commission, agencies of the federal government may purchase goods
   6-13  and services through commission contracts that are established
   6-14  under Section 3.11 of this Act.
   6-15        (b)  To the extent permitted by federal law, the commission
   6-16  and other state agencies that are subject to this Act and local
   6-17  governments that are eligible to participate in the commission's
   6-18  purchasing program under Subchapter D, Chapter 271, Local
   6-19  Government Code, may purchase goods and services through federal
   6-20  government contracts that are established through competitive
   6-21  bidding.
   6-22        SECTION 5.  Section 3.061(b), State Purchasing and General
   6-23  Services Act (Article 601b, Vernon's Texas Civil Statutes), is
   6-24  amended to read as follows:
   6-25        (b)  The commission shall promulgate rules allowing purchases
   6-26  through group purchasing programs unless the commission determines
   6-27  within a reasonable period of time after receiving notification of
    7-1  a particular purchase that a better value <lower price> is
    7-2  available through the commission.
    7-3        SECTION 6.  Article 3, State Purchasing and General Services
    7-4  Act (Article 601b, Vernon's Texas Civil Statutes), is amended by
    7-5  adding Sections 3.062-3.064 to read as follows:
    7-6        Sec. 3.062.  TRAINING AND CERTIFICATION OF STATE AGENCY
    7-7  PURCHASING PERSONNEL.  (a)  The commission shall establish and
    7-8  administer a system of training, continuing education, and
    7-9  certification for state agency purchasing personnel.  The
   7-10  commission may adopt rules to administer this section, including
   7-11  rules relating to monitoring certified purchasers' compliance with
   7-12  the continuing education requirements of this section.
   7-13        (b)  All state agency purchasing personnel must receive the
   7-14  training and continuing education to the extent required by
   7-15  commission rule.  A state agency employee who is required by
   7-16  commission rule to receive the training or continuing education may
   7-17  participate in purchasing activities in accordance with the level
   7-18  of training the employee has achieved.
   7-19        (c)  The commission shall set and collect a fee from state
   7-20  agencies that employ purchasing personnel who are trained,
   7-21  educated, or certified under this section.  The commission shall
   7-22  set the fee in an amount that recovers the commission's costs under
   7-23  this section.
   7-24        (d)  The commission may provide training, continuing
   7-25  education, and certification under this section to purchasing
   7-26  personnel employed by a political subdivision or other public
   7-27  entity of the state.  Political subdivision purchasing personnel
    8-1  may receive, but are not required  to receive, the training,
    8-2  continuing education, or certification provided under this section.
    8-3  The commission shall collect the fee described by Subsection (c)
    8-4  for training, education, or certification under this subsection.
    8-5        (e)  The commission may provide training and continuing
    8-6  education under this section using its own personnel and through
    8-7  contracts with private or public entities.
    8-8        (f)  The commission shall provide at least three levels of
    8-9  training under this section.
   8-10        (g)  The basic training level must include an introduction to
   8-11  contract purchasing methods and processes and informal bidding
   8-12  processes, practical instruction in the use of automated
   8-13  information tools used in the purchasing process, instruction in
   8-14  receipting and payment processes and requirements, an introduction
   8-15  to historically underutilized business programs and issues,
   8-16  instruction in documenting a purchasing file, an introduction to
   8-17  relevant ethical issues that includes an introduction to relevant
   8-18  provisions of Chapter 572, Government Code, and Chapters 36 and 39,
   8-19  Penal Code, and instruction in any other processes and issues that
   8-20  the commission considers appropriate for introductory purchasing
   8-21  training.
   8-22        (h)  The second training level must include advanced
   8-23  instruction in formal and informal bidding methods, an introduction
   8-24  to negotiation methods and to when negotiation is allowed,
   8-25  instruction in writing specifications, instruction in the criteria
   8-26  for determining which product or service offers the best value for
   8-27  the state, more advanced instruction in documenting a purchasing
    9-1  file, instruction in the use of electronic bulletin boards in
    9-2  public purchasing, an introduction to evaluating vendors, more
    9-3  advanced instruction in historically underutilized business
    9-4  programs and issues, a review and more advanced instruction in
    9-5  relevant ethical issues, and instruction in any other processes and
    9-6  issues that the commission considers appropriate for the second
    9-7  level of purchasing training.
    9-8        (i)  The third training level must include instruction in
    9-9  complex negotiations, instruction in purchasing through the use of
   9-10  requests for proposals, and instruction in any other processes and
   9-11  issues that the commission considers appropriate for advanced
   9-12  purchasing training.
   9-13        (j)  The commission may prescribe the circumstances under
   9-14  which a state agency may delegate authority to approve purchases.
   9-15        (k)  The commission shall provide at least two levels of
   9-16  certification under this section.
   9-17        (l)  The commission shall require 24 hours of continuing
   9-18  education each year to maintain a certification level.  The
   9-19  commission may allow attendance at training classes offered under
   9-20  this section to count toward the continuing education requirement.
   9-21        (m)  The commission's prerequisites for receiving a level one
   9-22  purchaser certification must include completion of the second
   9-23  training level, passage of a written examination, and a minimum
   9-24  number of years of purchasing experience prescribed by the
   9-25  commission.  Level one certified purchasers must be able to:
   9-26              (1)  manage formal and informal bidding procedures;
   9-27              (2)  prepare complex specifications that include the
   10-1  criteria the agency will use to determine the best value for the
   10-2  state;
   10-3              (3)  negotiate, when negotiation is allowed, price,
   10-4  delivery terms, and service or maintenance requirements for all
   10-5  types of products, including automated information systems
   10-6  purchased through the catalogue purchasing procedure; and
   10-7              (4)  establish contracts.
   10-8        (n)  The commission's prerequisites for receiving a level two
   10-9  purchaser certification must include completion of the third
  10-10  training level, passage of a written and an oral examination, and a
  10-11  minimum of three years of purchasing experience.
  10-12        Sec. 3.063.  PURCHASING PARTNERSHIPS BETWEEN AGENCIES.  (a)
  10-13  The commission shall manage a program that provides for
  10-14  establishing purchasing partnerships between state agencies under
  10-15  which one agency will make certain purchases for another agency.
  10-16  An agency is not required to enter into a purchasing partnership
  10-17  under this section.
  10-18        (b)  The commission shall identify agencies that are willing
  10-19  to enter into purchasing partnerships with another agency and
  10-20  attempt to appropriately match agencies for a purchasing
  10-21  partnership based on factors such as whether an agency employs a
  10-22  certified purchaser, the number and expertise of an agency's
  10-23  certified purchasers, the strategic mission of an agency, the
  10-24  existence or nature of an agency's automated purchasing tools, and
  10-25  the types of goods and services typically purchased by an agency.
  10-26        Sec. 3.064.  BUYING UNDER CONTRACT ESTABLISHED BY AGENCY
  10-27  OTHER THAN COMMISSION.  (a)  The commission shall adopt rules
   11-1  specifying the circumstances under which it is advantageous for the
   11-2  state to allow an agency to purchase goods or services under a
   11-3  contract made by another agency other than the commission.
   11-4        (b)  A state agency that is a party to a contract with a
   11-5  vendor who is able to supply goods or services to other agencies
   11-6  under the contract shall, if commission rules allow other agencies
   11-7  to make purchases under the contract:
   11-8              (1)  inform the commission of the terms of the contract
   11-9  and the capabilities of the vendor; and
  11-10              (2)  post notice of the existence and terms of the
  11-11  contract on the procurement marketplace.
  11-12        SECTION 7.  Section 3.08, State Purchasing and General
  11-13  Services Act (Article 601b, Vernon's Texas Civil Statutes), is
  11-14  amended to read as follows:
  11-15        Sec. 3.08.  PURCHASES LESS THAN A SPECIFIED MONETARY AMOUNT.
  11-16  (a)  State agencies are delegated the authority to purchase
  11-17  supplies, materials, and equipment if the purchase does not exceed
  11-18  $25,000 <$5,000, although an agency may continue to use the
  11-19  commission's services for those purchases>.  The commission by rule
  11-20  shall prescribe procedures for these purchases.
  11-21        (b)  The commission<, and> by rule may delegate to state
  11-22  agencies the authority to purchase supplies, materials, or
  11-23  equipment if the purchase exceeds $25,000 <$5,000>.  In delegating
  11-24  purchasing authority under this subsection or Section 3.06(b) of
  11-25  this article, the commission shall consider factors relevant to a
  11-26  state agency's ability to perform purchasing functions, including:
  11-27              (1)  the capabilities of the agency's purchasing staff;
   12-1              (2)  the certification levels held by the agency's
   12-2  purchasing personnel;
   12-3              (3)  the existence of recent satisfactory audits of the
   12-4  agency's purchasing practices; and
   12-5              (4)  the agency's compliance with the state's
   12-6  purchasing programs for historically underutilized businesses and
   12-7  the agency's good faith efforts to meet the state's purchasing
   12-8  goals for historically underutilized businesses.
   12-9        (c)  The commission shall monitor the purchasing practices of
  12-10  state agencies that are making delegated purchases under Subsection
  12-11  (b) of this section or Section 3.06(b) of this article to ensure
  12-12  that the certification levels of the agency's purchasing personnel
  12-13  and the quality of the agency's purchasing practices continue to
  12-14  warrant the extent to which the commission has delegated purchasing
  12-15  authority to the agency.  The commission may revoke for cause all
  12-16  or part of the purchasing authority that the commission delegated
  12-17  to a state agency.  The commission shall adopt rules to administer
  12-18  this subsection.
  12-19        (d) <(b)>  The commission by rule may delegate to the
  12-20  comptroller the commission's authority under Section 3.15 to audit
  12-21  purchases and purchase data when the purchases do not exceed $500
  12-22  or a greater amount prescribed by the commission.
  12-23        (e) <(c)>  Competitive bidding, whether formal or informal,
  12-24  is not required for a purchase by a state agency if the purchase
  12-25  does not exceed $2,500 <$1,000>, or a greater amount prescribed by
  12-26  rule of the commission.
  12-27        (f) <(d)>  Supplies or materials purchased under this section
   13-1  may not include:
   13-2              (1)  items for which contracts have been awarded under
   13-3  the contract purchase procedure, unless the quantity purchased is
   13-4  less than the minimum quantity specified in the contract;
   13-5              (2)  any item required by statute to be purchased from
   13-6  a particular source; or
   13-7              (3)  scheduled items that have been designated for
   13-8  purchase by the commission.
   13-9        (g) <(e)>  Large purchases may not be divided into small lot
  13-10  purchases in order to meet the specified dollar limits.  The
  13-11  commission may not require that unrelated purchases be combined
  13-12  into one purchase order in order to exceed the specified dollar
  13-13  limits.
  13-14        (h) <(f)>  Agencies making purchases under this section for
  13-15  which competitive bidding is required must attempt to obtain at
  13-16  least three competitive bids from sources which normally offer for
  13-17  sale the merchandise being purchased and must comply with Section
  13-18  3.101 of this article.
  13-19        SECTION 8.  Section 3.101, State Purchasing and General
  13-20  Services Act (Article 601b, Vernon's Texas Civil Statutes), is
  13-21  amended by adding Subsections (k) and (l) to read as follows:
  13-22        (k)  The commission shall require information about an
  13-23  applicant's past history as a vendor with the state in the
  13-24  commission's uniform registration form, including information about
  13-25  the persons who own or control the applicant and information about
  13-26  any vendor history the applicant or the persons who own or control
  13-27  the applicant may have from doing business with the state under
   14-1  other names.
   14-2        (l)  The commission shall include in the commission's uniform
   14-3  registration form a statement about the applicability of relevant
   14-4  criminal law, including Section 37.10, Penal Code, to entering
   14-5  information on the form and to presenting documentation in
   14-6  connection with the form.  The commission shall refer any suspected
   14-7  violations of relevant criminal law, including Section 37.10, Penal
   14-8  Code, related to entering information on the form or presenting
   14-9  documentation in connection with the form to the appropriate legal
  14-10  authorities for investigation or prosecution.
  14-11        SECTION 9.  Article 3, State Purchasing and General Services
  14-12  Act (Article 601b, Vernon's Texas Civil Statutes), is amended by
  14-13  adding Sections 3.103-3.106 to read as follows:
  14-14        Sec. 3.103.  BEST VALUE STANDARD FOR PURCHASE OF GOODS OR
  14-15  SERVICES.  (a)  Each state agency, including the commission, shall
  14-16  purchase goods and services that provide the best value for the
  14-17  state.
  14-18        (b)  In determining the best value for the state, the
  14-19  commission or other state agency making a purchase is not
  14-20  restricted to considering the purchase price alone, but subject to
  14-21  Section 3.104 of this Act may also consider any other factor
  14-22  relevant to evaluating the value to the state of a good or service,
  14-23  including:
  14-24              (1)  installation costs;
  14-25              (2)  life-cycle costs;
  14-26              (3)  the quality, availability, adaptability, and
  14-27  reliability of the good or service;
   15-1              (4)  the delivery terms;
   15-2              (5)  indicators of probable vendor performance under
   15-3  the contract such as past vendor performance, the vendor's
   15-4  financial resources, skill, and ability to perform, the vendor's
   15-5  experience, responsibility, and reputation, the vendor's previous
   15-6  and existing compliance with laws that relate to providing the good
   15-7  or service, and the vendor's ability to provide reliable
   15-8  maintenance and support;
   15-9              (6)  the number and scope of conditions attached to a
  15-10  vendor's bid or proposal;
  15-11              (7)  the cost of any employee training associated with
  15-12  a purchase;
  15-13              (8)  the effect of a purchase on agency productivity;
  15-14  and
  15-15              (9)  factors relevant to determining the best value for
  15-16  the state in the context of a particular purchase.
  15-17        Sec. 3.104.  REQUIREMENT TO SPECIFY VALUE FACTORS IN REQUEST
  15-18  FOR BIDS OR PROPOSALS.  (a)  For a purchase made through
  15-19  competitive bidding, the commission or other state agency making
  15-20  the purchase must specify in the request for bids the factors other
  15-21  than price,  past vendor performance, or vendor reputation that the
  15-22  commission or agency will consider in determining which bid offers
  15-23  the best value for the state.
  15-24        (b)  For a purchase made through competitive sealed
  15-25  proposals, the commission or other state agency making the
  15-26  purchase:
  15-27              (1)  must specify in the request for proposals the
   16-1  known  factors other than price, past vendor performance, or vendor
   16-2  reputation that the commission or agency will consider in
   16-3  determining which proposal offers the best value for the state; and
   16-4              (2)  may concurrently inform each vendor that made a
   16-5  proposal on the contract of any additional factors the commission
   16-6  or agency will consider in determining which proposal offers the
   16-7  best value for the state if the commission or other agency
   16-8  determines after opening the proposals that additional factors not
   16-9  covered under Subdivision (1) of this subsection are relevant in
  16-10  determining which proposal offers the best value for the state.
  16-11        Sec. 3.105.  PROTEST PROCEDURES.  (a)  The commission shall
  16-12  develop and adopt by rule protest procedures for resolving vendor
  16-13  protests relating to purchases made by the commission. The rules
  16-14  must include standards for maintaining necessary documentation for
  16-15  a purchase so that purchasing decisions can be supported in the
  16-16  event of a protest.
  16-17        (b)  Each state agency by rule shall adopt protest procedures
  16-18  for resolving vendor protests relating to purchases made by the
  16-19  agency. The procedures must be consistent with the commission's
  16-20  protest procedures.  Agencies that are not subject to the
  16-21  administrative procedure law, Chapter 2001, Government Code, shall
  16-22  provide public notice of the text of the proposed and adopted rules
  16-23  and provide a procedure for meaningful public comment on the
  16-24  proposed rules.
  16-25        Sec. 3.106.  BARRING VENDOR FROM PARTICIPATION IN STATE
  16-26  CONTRACTS.  (a)  The commission may bar a vendor from participating
  16-27  in state contracts that are subject to this Act, including
   17-1  contracts for which purchasing authority is delegated to a state
   17-2  agency under this Act, for:
   17-3              (1)  substandard performance under a contract with the
   17-4  state or a state agency that is significantly detrimental to the
   17-5  interests of the state;
   17-6              (2)  material misrepresentations in a bid or proposal
   17-7  for  the state or a state agency or during the course of performing
   17-8  a contract with the state or a state agency;
   17-9              (3)  fraud; or
  17-10              (4)  breaching a contract with the state or a state
  17-11  agency in a manner that is significantly detrimental to the
  17-12  interests of the state.
  17-13        (b)  The commission shall bar a vendor from participating in
  17-14  state and state agency contracts under this section for a period
  17-15  that is commensurate with the seriousness of the vendor's action
  17-16  and the extent to which the state's interests were damaged.
  17-17        (c)  The commission shall adopt rules to administer this
  17-18  section, including rules that:
  17-19              (1)  state generally the reasons for which a vendor may
  17-20  be barred from participating in state and state agency contracts
  17-21  under this section and the periods for which the vendor may be
  17-22  barred; and
  17-23              (2)  prescribe the procedures under which the
  17-24  commission will determine whether and for how long a vendor is
  17-25  barred from participating in state and state agency contracts under
  17-26  this section.
  17-27        SECTION 10.  Sections 3.11(b) and (d)-(h), State Purchasing
   18-1  and General Services Act (Article 601b, Vernon's Texas Civil
   18-2  Statutes), are amended to read as follows:
   18-3        (b)  Centralized Master Bidders List.  The commission shall
   18-4  maintain a centralized master bidders list and shall add or delete
   18-5  names from the list in accordance with Section 3.101 of this Act
   18-6  <by the application and utilization of applicable standards set
   18-7  forth in Subsection (e) of this section>.  Bid invitations under
   18-8  this section shall be sent only to those who have expressed a
   18-9  desire to bid on the particular types of items which are the
  18-10  subject of the bid invitation.  Use of the centralized master
  18-11  bidders list shall not be confined to contract purchases but it may
  18-12  be used by the commission in making any purchase.
  18-13        (d)  Bid Opening Procedure.  Bids shall be submitted to the
  18-14  commission, sealed, and identified as bids on the envelope, except
  18-15  that when the commission considers that the electronic information
  18-16  capabilities of the state and of the vendor community are
  18-17  sufficient, the commission may also allow facsimile or on-line
  18-18  transmission of bids.  Bids shall be opened at the time and place
  18-19  stated in the public notices and the invitation to bid.  The state
  18-20  auditor or a member of his staff may be present at any bid opening.
  18-21  A tabulation of all bids received shall be available for public
  18-22  inspection under regulations to be established by the commission.
  18-23        (e)  Award of Contract.  The commission shall award contracts
  18-24  to the bidder offering the best value for the state while
  18-25  <submitting the lowest and best bid> conforming to the
  18-26  specifications required.  Complying with the specified time limit
  18-27  for submission of written data, samples, or models on or before bid
   19-1  opening time is essential to the materiality of a bid, provided,
   19-2  however, that the commission shall have the authority to waive this
   19-3  provision if the failure to comply is beyond control of the bidder.
   19-4  In determining which <who is the lowest and best> bidder offers the
   19-5  best value for the state, the commission may take into account the
   19-6  safety record of the bidder, or the firm, corporation, partnership,
   19-7  or institution represented by the bidder, or anyone acting for such
   19-8  firm, corporation, partnership, or institution, provided, however,
   19-9  that the commission has adopted a written definition and criteria
  19-10  for accurately determining the safety record of a bidder and has
  19-11  given notice to prospective bidders, in the bid specifications,
  19-12  that the safety record of a bidder may be considered in determining
  19-13  the <lowest and best> bidder offering the best value for the state
  19-14  and, provided further, that such determinations are not arbitrary
  19-15  and capricious.  The <In determining who is the lowest and best
  19-16  bidder, in addition to price, the> commission shall determine which
  19-17  bidder offers the best value for the state in accordance with
  19-18  Sections 3.103 and 3.104 of this Act.  <consider:>
  19-19              <(1)  the quality, availability, and adaptability of
  19-20  the supplies, materials, equipment, or contractual services, to the
  19-21  particular use required;>
  19-22              <(2)  the number and scope of conditions attached to
  19-23  the bid;>
  19-24              <(3)  the ability, capacity, and skill of the bidder to
  19-25  perform the contract or provide the service required;>
  19-26              <(4)  whether the bidder can perform the contract or
  19-27  provide the service promptly, or within the time required, without
   20-1  delay or interference;>
   20-2              <(5)  the character, responsibility, integrity,
   20-3  reputation, and experience of the bidder;>
   20-4              <(6)  the quality of performance of previous contracts
   20-5  or services;>
   20-6              <(7)  the previous and existing compliance by the
   20-7  bidder with laws relating to the contract or service;>
   20-8              <(8)  any previous or existing noncompliance by the
   20-9  bidder with specification requirements relating to time of
  20-10  submission of specified data such as samples, models, drawings,
  20-11  certificates, or other information;>
  20-12              <(9)  the sufficiency of the financial resources and
  20-13  ability of the bidder to perform the contract or provide the
  20-14  service; and>
  20-15              <(10)  the ability of the bidder to provide future
  20-16  maintenance, repair parts, and service for the use of the subject
  20-17  of the contract.>
  20-18        (f)  Rejection of Bids.  If a bid is submitted in which there
  20-19  is a material failure to comply with the specification
  20-20  requirements, such bid shall be rejected and the contract awarded
  20-21  to the bidder offering the best value for the state and <submitting
  20-22  the lowest and best bid> conforming to the specifications,
  20-23  provided, however, the commission shall in any event have the
  20-24  authority to reject all bids or parts of bids when the interest of
  20-25  the state will be served thereby.
  20-26        (g)  Bid Record.  When an award is made, a statement of the
  20-27  basis for placing the order with the successful bidder and the
   21-1  factors considered in determining which bidder offered the best
   21-2  value for the state <the lowest and best bid> shall be prepared by
   21-3  the purchasing division and filed with other papers relating to the
   21-4  transaction.
   21-5        (h)  Tie Bids.  In case of tie bids, the value to the state
   21-6  <quality and service> being equal, the contract shall be awarded
   21-7  under rules and regulations to be adopted by the commission.
   21-8        SECTION 11.  Sections 3.12(b), (c), (e), and (f), State
   21-9  Purchasing and General Services Act (Article 601b, Vernon's Texas
  21-10  Civil Statutes), are amended to read as follows:
  21-11        (b)  Minimum Number of Bids.  All open market purchases
  21-12  shall, whenever possible, be based on at least three competitive
  21-13  bids, and shall be awarded to the <lowest and best> bidder offering
  21-14  the best value for the state in accordance with the standards set
  21-15  forth under this article.
  21-16        (c)  Notice Inviting Bids.  The commission shall solicit bids
  21-17  by:
  21-18              (1)  direct mail request to prospective vendors; <or>
  21-19              (2)  telephone or telegraph;
  21-20              (3)  facsimile transmission;
  21-21              (4)  on-line electronic transmission; or
  21-22              (5)  posting on an electronic bulletin board.
  21-23        (e)  Agency Review.  If a state agency requests that it be
  21-24  allowed to review the bids on a purchase request, the commission
  21-25  shall forward copies of the bids received or make the same
  21-26  available to the requesting agency along with the commission's
  21-27  recommended award.  If, after review of the bids and evaluation of
   22-1  the quality of products offered in the bids, the state agency
   22-2  determines that the bid selected by the commission does <is> not in
   22-3  its opinion offer the best value for the state <the lowest and best
   22-4  bid>, it may file with the commission a written recommendation,
   22-5  complete with justification, that the award be made to the bidder
   22-6  determined to offer the best value for the state <be the lowest and
   22-7  best bid>.  The commission shall give consideration to, but is not
   22-8  bound by, the agency recommendation in making the award.
   22-9        (f)  Statement of Award.  A statement of the basis for
  22-10  placing the order with the successful bidder and the factors
  22-11  considered in determining the <lowest and best> bid offering the
  22-12  best value for the state shall be prepared by the purchasing
  22-13  division and filed with other papers relating to the transaction.
  22-14        SECTION 12.  Section 3.16, State Purchasing and General
  22-15  Services Act (Article 601b, Vernon's Texas Civil Statutes), is
  22-16  amended by amending Subsection (a) and adding Subsections (c) and
  22-17  (d) to read as follows:
  22-18        (a)  After the comptroller and the commission have approved
  22-19  financial data and purchase data, when such advance approval is
  22-20  required by the rules of the commission, the comptroller shall draw
  22-21  a warrant upon the state treasury for the amount due on the invoice
  22-22  or for so much thereof as has been allowed.  The comptroller may
  22-23  distribute the warrant directly to the vendor.  The comptroller,
  22-24  when appropriate, may combine into a single warrant payments that
  22-25  the state owes to a vendor under more than one invoice, including
  22-26  payments to the vendor made on behalf of more than one state
  22-27  agency.
   23-1        (c)  The comptroller may allow a state agency to schedule
   23-2  payments that the comptroller will make to a vendor.  The
   23-3  comptroller shall prescribe the circumstances under which advance
   23-4  scheduling of payments is appropriate.
   23-5        (d)  The comptroller may require vendors to provide payment
   23-6  addresses, vendor identification numbers, social security numbers
   23-7  to the extent allowed by federal law, federal employer
   23-8  identification numbers, and other account information directly to
   23-9  the comptroller.
  23-10        SECTION 13.  Section 3.17(a), State Purchasing and General
  23-11  Services Act (Article 601b, Vernon's Texas Civil Statutes), is
  23-12  amended to read as follows:
  23-13        (a)  The commission shall have the authority to establish and
  23-14  maintain a specifications and standards program to coordinate the
  23-15  establishment and maintenance of uniform standards and
  23-16  specifications for materials, supplies, and equipment purchased by
  23-17  the commission.  The commission shall enlist the cooperation of
  23-18  other state agencies, the advisory committee on procurement, and
  23-19  the vendor advisory committee in the establishment, maintenance,
  23-20  and revision of uniform standards and specifications and shall
  23-21  encourage and foster the use of standard specifications in order
  23-22  that the most efficient purchase of materials, supplies, and
  23-23  equipment may be continuously accomplished.
  23-24        SECTION 14.  Section 3.20, State Purchasing and General
  23-25  Services Act (Article 601b, Vernon's Texas Civil Statutes), is
  23-26  amended to read as follows:
  23-27        Sec. 3.20.  PREFERENCE FOR PRODUCTS OF RETARDED OR
   24-1  HANDICAPPED PERSONS.  The products of workshops, organizations, or
   24-2  corporations whose primary purpose is training and employing
   24-3  mentally retarded or physically handicapped persons shall be given
   24-4  preference if they meet state specifications as to quantity,
   24-5  quality, delivery, and price.  The commission shall test the
   24-6  products in accordance with Section 3.17 of this Act to the extent
   24-7  necessary to ensure quality.  The commission shall consider product
   24-8  quality and delivery performance in agreeing to the price for
   24-9  products purchased under this section.
  24-10        SECTION 15.  Section 3.22, State Purchasing and General
  24-11  Services Act (Article 601b, Vernon's Texas Civil Statutes), is
  24-12  amended to read as follows:
  24-13        Sec. 3.22.  EXEMPTION OF GOODS OR SERVICES OF BLIND PERSONS.
  24-14  The provisions of this article with respect to competitive bids are
  24-15  not applicable to state purchases of blind-made goods or services
  24-16  offered for sale to state agencies as a result of efforts made by
  24-17  the Texas Committee on Purchases of Blind-Made Goods and Services
  24-18  acting in accordance with legislation applicable to the committee
  24-19  if the goods or services meet state specifications as to delivery,
  24-20  quantity, and quality and the cost is not in excess of the fair
  24-21  market price of like items.  The commission shall test the goods or
  24-22  services in accordance with Section 3.17 of this Act to the extent
  24-23  necessary to ensure quality.  The commission shall consider product
  24-24  or service quality and delivery performance in agreeing to the
  24-25  price for goods or services purchased under this section.
  24-26        SECTION 16.  Section 3.23, State Purchasing and General
  24-27  Services Act (Article 601b, Vernon's Texas Civil Statutes), is
   25-1  amended to read as follows:
   25-2        Sec. 3.23.  CONTRACTS WITH DEPARTMENT OF CRIMINAL JUSTICE.
   25-3  The commission is authorized to make contracts with the Texas
   25-4  Department of Criminal Justice for the purchase of supplies,
   25-5  equipment, services, and materials for use by other state agencies.
   25-6  The commission shall test the supplies, equipment, services, and
   25-7  materials in accordance with Section 3.17 of this Act to the extent
   25-8  necessary to ensure quality.  The commission shall consider product
   25-9  or service quality and delivery performance in agreeing to the
  25-10  price for supplies, equipment, services, and materials purchased
  25-11  under this section.
  25-12        SECTION 17.  Article 3, State Purchasing and General Services
  25-13  Act (Article 601b, Vernon's Texas Civil Statutes), is amended by
  25-14  adding Sections 3.34 and 3.35 to read as follows:
  25-15        Sec. 3.34.  ADVISORY COMMITTEE ON PROCUREMENT.  (a)  The
  25-16  commission shall establish an advisory committee on procurement.
  25-17  The purpose of the committee is to represent before the commission
  25-18  the state agency purchasing community and the political
  25-19  subdivisions that use the commission's purchasing services.
  25-20        (b)  The committee is composed of officers or employees of
  25-21  state agencies, including institutions of higher education, and
  25-22  political subdivisions who are invited by the commission to serve
  25-23  on the committee.  The commission shall invite officers and
  25-24  employees who are experienced in public purchasing or in public
  25-25  finance or who possess other appropriate expertise to serve on the
  25-26  committee.  Service on the committee is an additional duty of the
  25-27  member's public office or employment.  A member's employer shall
   26-1  pay the member's travel expenses incurred because of the member's
   26-2  service on the committee.  Article 6252-33, Revised Statutes, does
   26-3  not apply to the size or composition of the committee.  The
   26-4  commission shall set staggered terms for the members of the
   26-5  committee.
   26-6        (c)  The committee may establish its own rules of operation.
   26-7        (d)  The committee shall recommend to the commission
   26-8  improvements in commission or state agency purchasing practices.
   26-9  The committee shall review and comment on findings and
  26-10  recommendations related to purchasing that are made by state agency
  26-11  internal auditors or by the state auditor.
  26-12        Sec. 3.35.  VENDOR ADVISORY COMMITTEE.  (a)  The commission
  26-13  shall establish a vendor advisory committee.  The purpose of the
  26-14  committee is to represent before the commission the vendor
  26-15  community, to provide information to vendors, and to obtain vendor
  26-16  input on state procurement practices.
  26-17        (b)  The committee is composed of vendors who have done
  26-18  business with the state who are invited by the commission to serve
  26-19  on the committee.  The commission shall invite a cross-section of
  26-20  the vendor community to serve on the committee, inviting both large
  26-21  and small businesses, both historically underutilized businesses
  26-22  and businesses that are not historically underutilized businesses,
  26-23  and vendors who provide a variety of different goods and services
  26-24  to the state.  Article 6252-33, Revised Statutes, does not apply to
  26-25  the size or composition of the committee.  The commission shall set
  26-26  staggered terms for the members of the committee.
  26-27        (c)  The committee may establish its own rules of operation,
   27-1  but shall post notice of and hold its meetings in accordance with
   27-2  the open meetings law, Chapter 551, Government Code.
   27-3        SECTION 18.  Article 11, State Purchasing and General
   27-4  Services Act (Article 601b, Vernon's Texas Civil Statutes), is
   27-5  amended by adding Sections 11.08-11.11 to read as follows:
   27-6        Sec. 11.08.  ELECTRONIC BULLETIN BOARD POSTING OF NOTICE FOR
   27-7  PROCUREMENTS EXCEEDING $25,000.  (a)  This section applies to each
   27-8  state agency making a procurement that will exceed $25,000 in
   27-9  value:
  27-10              (1)  without regard to the source of funds the agency
  27-11  will use for the procurement; and
  27-12              (2)  including a procurement that:
  27-13                    (A)  is a procurement by a state agency but is
  27-14  otherwise exempt from the commission's purchasing authority or the
  27-15  application of this Act;
  27-16                    (B)  is made under delegated purchasing
  27-17  authority;
  27-18                    (C)  is related to a construction project; or
  27-19                    (D)  is a procurement of  professional or
  27-20  consulting services.
  27-21        (b)  The commission shall send to the comptroller for posting
  27-22  on the comptroller's Windows on State Government electronic
  27-23  bulletin board information as prescribed by this section about
  27-24  commission or other state agency procurements that will exceed
  27-25  $25,000 in value.  The commission may also send to the comptroller
  27-26  for posting on the electronic bulletin board other information
  27-27  relating to the business activity of the state that the commission
   28-1  considers to be of interest to the public.  The commission shall
   28-2  send the information in a format agreed to by the comptroller.
   28-3        (c)  The commission shall include in the information sent to
   28-4  the comptroller, to the extent it is feasible and cost-effective,
   28-5  the following information for each procurement that the commission
   28-6  or another state agency will make that is estimated to exceed
   28-7  $25,000 in value:
   28-8              (1)  a description of the goods or services to be
   28-9  procured;
  28-10              (2)  the estimated quantity of goods or services to be
  28-11  procured;
  28-12              (3)  the bid or proposal opening date; and
  28-13              (4)  the name, business mailing address, and business
  28-14  telephone number of the commission employee or other state agency
  28-15  employee a person can contact to obtain all necessary information
  28-16  related to making a bid or proposal or other applicable expression
  28-17  of interest for the procurement contract.
  28-18        (d)  Each state agency that will award a procurement contract
  28-19  estimated to exceed $25,000 in value shall send to the commission:
  28-20              (1)  the information the commission requires for
  28-21  posting on the comptroller's electronic bulletin board under this
  28-22  section; and
  28-23              (2)  a notice when the procurement contract has been
  28-24  awarded.
  28-25        (e)  The commission may adopt rules, prescribe forms, and
  28-26  require information to administer this section.  The commission's
  28-27  rules, forms, and requirements must be consistent with the
   29-1  comptroller's requirements relating to the comptroller's electronic
   29-2  bulletin board.
   29-3        (f)  The requirements of this section are in addition to the
   29-4  requirements of other law relating to the solicitation of bids,
   29-5  proposals, or expressions of interest for a procurement by the
   29-6  commission or another state agency.  This section does not affect
   29-7  whether the commission or other state agency is required to award a
   29-8  procurement contract through competitive bidding, competitive
   29-9  sealed proposals, or another method.
  29-10        Sec. 11.09.  ELECTRONIC PROCUREMENT DATABASE.  (a) The
  29-11  commission shall establish and manage an electronic procurement
  29-12  database.  The commission may enter into contracts with private or
  29-13  public entities to establish or maintain all or part of the
  29-14  database.  The commission shall base its decision to enter into a
  29-15  contract under this subsection on an analysis that uses the State
  29-16  Council on Competitive Government's cost methodology.
  29-17        (b)  The commission may maintain in the database information
  29-18  related to state procurement that the commission considers to be
  29-19  useful.  The database must contain:
  29-20              (1)  information about vendors, including information
  29-21  from the centralized master bidders list and vendor performance
  29-22  information;
  29-23              (2)  information about products, including product
  29-24  testing results; and
  29-25              (3)  information that relates to commission and other
  29-26  state agency purchasing contracts and that can be entered into the
  29-27  database electronically without the need for duplicate data entry.
   30-1        (c)  The commission may require information from a state
   30-2  agency for inclusion in the database.
   30-3        (d)  The commission shall make the database available to
   30-4  state agencies and political subdivisions through the procurement
   30-5  marketplace.
   30-6        Sec. 11.10.  ELECTRONIC PROCUREMENT MARKETPLACE.  (a) The
   30-7  commission shall establish and manage an electronic procurement
   30-8  marketplace through which the commission and state agencies may:
   30-9              (1)  communicate information relevant to the state's
  30-10  procurement of goods and services; and
  30-11              (2)  conduct elements of purchasing transactions within
  30-12  state government electronically to the extent that it is feasible
  30-13  and cost-effective to do so.
  30-14        (b)  The commission shall design the procurement marketplace
  30-15  as an interactive gateway between all state databases that relate
  30-16  to procurement, including databases that contain information about
  30-17  the availability of surplus property.  The commission shall define
  30-18  standards, including keyword and product code standards, for the
  30-19  procurement marketplace.
  30-20        (c)  The commission may adopt rules relating to the design
  30-21  and use of the procurement marketplace, including rules that
  30-22  require state agencies to provide information for or receive
  30-23  information from the procurement marketplace.
  30-24        (d)  The commission shall make state procurement information
  30-25  available to political subdivisions through the procurement
  30-26  marketplace on a fee-for-service basis.  The commission shall set
  30-27  the fees in an amount that recovers the state's costs in providing
   31-1  the access to a political subdivision.
   31-2        Sec. 11.11.  ELECTRONIC COMMERCE NETWORK USING ELECTRONIC
   31-3  DATA INTERCHANGE.  (a)  The commission shall establish and manage
   31-4  an  electronic commerce network under which the state's purchasing
   31-5  transactions with vendors can be accomplished electronically by
   31-6  means of facsimile transmissions and on-line transmission of
   31-7  necessary information.  The commission shall base the network on
   31-8  the standard data protocol developed by the American National
   31-9  Standards Institute known as electronic data interchange.  The
  31-10  commission is the electronic data interchange coordinator for state
  31-11  government.
  31-12        (b)  The commission may enter into contracts with one or more
  31-13  public or private entities to establish or support various elements
  31-14  of the network.  The commission may provide for a gateway between
  31-15  the procurement marketplace and the electronic commerce network so
  31-16  that the elements of a procurement transaction that are within
  31-17  state government and the elements of a procurement transaction that
  31-18  involve communication with a vendor may all be accomplished
  31-19  electronically.
  31-20        (c)  Each state agency that is capable of participating in
  31-21  the electronic commerce network must participate in the network and
  31-22  participate in contracts entered into by the commission for the
  31-23  establishment or support of the network.  The commission shall
  31-24  charge an agency a fee for network services provided to the agency
  31-25  by the commission and require an agency to pay a fee to a
  31-26  contractor for network services provided to the agency by the
  31-27  contractor, so that the cost of providing network services to an
   32-1  agency is paid by the agency.
   32-2        (d)  The commission may allow political subdivisions and
   32-3  other public entities to participate in the electronic commerce
   32-4  network.  The commission shall provide that a participating
   32-5  political subdivision is charged fees for network services provided
   32-6  to the political subdivision in the same manner that participating
   32-7  state agencies are charged fees under Subsection (c) of this
   32-8  section.
   32-9        (e)  The commission may:
  32-10              (1)  adopt rules to administer this section;
  32-11              (2)  promote and enhance the use of electronic
  32-12  commerce; and
  32-13              (3)  require participating state agencies, political
  32-14  subdivisions, and other public entities to designate a network
  32-15  coordinator.
  32-16        SECTION 19.  Article 15, State Purchasing and General
  32-17  Services Act (Article 601b, Vernon's Texas Civil Statutes), is
  32-18  amended by adding Section 15.11 to read as follows:
  32-19        Sec. 15.11.  CONSOLIDATING OR CONTRACTING FOR MATERIALS
  32-20  MANAGEMENT FUNCTIONS.  (a)  The council shall study the materials
  32-21  management functions of state agencies and examine opportunities to
  32-22  consolidate materials management functions.  When the council
  32-23  determines a course of action that will more effectively or
  32-24  efficiently accomplish an agency's materials management functions,
  32-25  the council may:
  32-26              (1)  order two or more state agencies to consolidate
  32-27  between them warehousing, inventory control, or other materials
   33-1  management functions;
   33-2              (2)  order a state agency to obtain under a contract
   33-3  with another state agency or a private commercial source the
   33-4  agency's warehousing, inventory control, or other materials
   33-5  management functions; or
   33-6              (3)  order one or more state agencies to take a
   33-7  combination of actions described under Subdivisions (1) and (2) of
   33-8  this subsection.
   33-9        (b)  State agencies shall consolidate or contract for
  33-10  materials management functions, or both consolidate and contract
  33-11  for materials management functions, in the manner directed by the
  33-12  council.
  33-13        SECTION 20.  Section 321.013, Government Code, is amended by
  33-14  adding Subsection (k) to read as follows:
  33-15        (k)  The State Auditor shall periodically conduct a
  33-16  compliance audit and other appropriate audits of the purchasing
  33-17  practices of each state agency, including each institution of
  33-18  higher education.  The audits must include an audit of the state
  33-19  agency's compliance with applicable provisions of the state's
  33-20  program to assist historically underutilized businesses to
  33-21  participate in state contracting opportunities.  In planning an
  33-22  audit under this subsection, the State Auditor shall consider
  33-23  issues raised by the General Services Commission or the comptroller
  33-24  relating to the state agency's purchasing practices together with
  33-25  the agency's response to the commission or the comptroller.
  33-26        SECTION 21.  Chapter 2102, Government Code, is amended by
  33-27  adding Section 2102.013 to read as follows:
   34-1        Sec. 2102.013.  AUDITING OF AGENCY PURCHASING PRACTICES.  (a)
   34-2  The internal auditor shall frequently audit the purchasing
   34-3  practices of the state agency.  The audits must include an audit of
   34-4  the state agency's compliance with applicable provisions of the
   34-5  state's program to assist historically underutilized businesses to
   34-6  participate in state contracting opportunities.
   34-7        (b)  The internal auditor shall investigate any exceptions or
   34-8  issues raised by the General Services Commission or the comptroller
   34-9  relating to the state agency's purchasing practices and, if
  34-10  possible, report the findings of the investigation to the
  34-11  administrator before the administrator responds to the commission
  34-12  or the comptroller.
  34-13        (c)  The administrator shall report the results of the audits
  34-14  and investigations performed by the internal auditor under this
  34-15  section, together with the administrator's response to any
  34-16  exceptions or issues raised by the General Services Commission or
  34-17  the comptroller relating to the state agency's purchasing
  34-18  practices, to the state auditor, the comptroller, and the General
  34-19  Services Commission.
  34-20        SECTION 22.  (a) Section 2251.026, Government Code, is
  34-21  amended to read as follows:
  34-22        Sec. 2251.026.  PAYMENT OF INTEREST BY STATE AGENCY.  (a)  If
  34-23  the warrant for a payment the originating state agency owes is not
  34-24  mailed or electronically transmitted before the payment is overdue,
  34-25  the agency is liable for an interest payment that accrues under
  34-26  this chapter.
  34-27        (b)  The comptroller shall compute interest imposed on the
   35-1  state agency under this chapter.
   35-2        (c)  The comptroller shall pay the interest at the time
   35-3  payment is made on the principal.
   35-4        (d)  The comptroller shall submit the interest payment with
   35-5  the net amount due for goods and services.
   35-6        (e)  The comptroller and the state agency may not require a
   35-7  vendor to petition, bill, or wait an additional day to receive the
   35-8  interest due.
   35-9        (f)  The comptroller may require necessary and timely
  35-10  information and adopt rules to administer this section.
  35-11        (g)  Any system changes that are necessary for the
  35-12  comptroller's implementation of this section must be compatible
  35-13  with the uniform statewide accounting system.
  35-14        (b)  This section takes effect September 1, 1997.  The change
  35-15  in law made by this section applies only to interest on a payment
  35-16  by a state agency that becomes overdue under Chapter 2251,
  35-17  Government Code, on or after that date.  Interest on a payment by a
  35-18  state agency that becomes overdue under Chapter 2251, Government
  35-19  Code, before that date is governed by Section 2251.026, Government
  35-20  Code, as it exists on the date the payment becomes overdue, and the
  35-21  prior law is continued in effect for this purpose.
  35-22        SECTION 23.  Section 271.083(a), Local Government Code, is
  35-23  amended to read as follows:
  35-24        (a)  A local government may participate in the purchasing
  35-25  program of the commission by filing with the commission a
  35-26  resolution adopted by the governing body of the local government
  35-27  requesting that the local government be allowed to participate on a
   36-1  voluntary basis, and to the extent the commission deems feasible,
   36-2  and stating that the local government will:
   36-3              (1)  designate an official to act for the local
   36-4  government in all matters relating to the program, including the
   36-5  purchase of items from the vendor under any contract, and that the
   36-6  governing body will direct the decisions of the representative;
   36-7              (2)  be responsible for:
   36-8                    (A)  submitting requisitions to the commission
   36-9  under any contract; or
  36-10                    (B)  electronically sending purchase orders
  36-11  directly to vendors and electronically sending to the commission
  36-12  reports on actual purchases made under this paragraph that provide
  36-13  the information and are sent at the times required by the
  36-14  commission;
  36-15              (3)  be responsible <and> for making payment directly
  36-16  to the vendor; and
  36-17              (4) <(3)>  be responsible for the vendor's compliance
  36-18  with all conditions of delivery and quality of the purchased item.
  36-19        SECTION 24.  (a)  The state auditor and the advisory
  36-20  committee on procurement established by this Act shall study how
  36-21  the classification levels of state agency purchasing personnel
  36-22  should be revised to reflect the increased levels of responsibility
  36-23  and accountability given to state agency purchasing personnel under
  36-24  the changes in law made by this Act.  The state auditor and the
  36-25  committee should consider how best to provide purchasing personnel
  36-26  with a pay scale and a career path, including goals, incentives,
  36-27  and initiatives, commensurate with a purchaser's knowledge,
   37-1  authority, and responsibility.
   37-2        (b)  The state auditor and the committee shall present their
   37-3  written recommendations and the results of their study to the
   37-4  legislature not later than January 1, 1997.
   37-5        SECTION 25.  The commission may conduct pilot studies of
   37-6  regional contracts and no-stock contracts.
   37-7        SECTION 26.  The Legislative Budget Board and the division of
   37-8  the governor's office that works with budget and planning issues
   37-9  shall study and consider:
  37-10              (1)  ways to obtain information about planned state
  37-11  procurements as part of the reporting and information gathering
  37-12  functions of the state's appropriations process; and
  37-13              (2)  ways to use that information to increase the
  37-14  state's buying power.
  37-15        SECTION 27.  The General Services Commission shall gradually
  37-16  phase in, in the most cost-effective manner and in accordance with
  37-17  available appropriations, the changes in law made by this Act that
  37-18  require the establishment of electronic or automated marketplaces,
  37-19  networks, or databases.
  37-20        SECTION 28.  (a)  Sections 3.0221 and 3.09(d), State
  37-21  Purchasing and General Services Act (Article 601b, Vernon's Texas
  37-22  Civil Statutes), are repealed.
  37-23        (b)  Section 18A, Information Resources Management Act
  37-24  (Article 4413(32j), Revised Statutes), as added by Section 1.26,
  37-25  Chapter 906, Acts of the 73rd Legislature, Regular Session, 1993,
  37-26  is repealed.  The change in law made by this subsection prevails
  37-27  over an Act passed by the 74th Legislature, Regular Session, 1995,
   38-1  relating to nonsubstantive additions to and corrections in enacted
   38-2  codes, including the nonsubstantive codification of various laws
   38-3  omitted from enacted codes, and to conforming codifications enacted
   38-4  by the 73rd Legislature to other Acts of that legislature.
   38-5        SECTION 29.  (a) Section 2251.041, Government Code, is
   38-6  repealed.
   38-7        (b)  This section takes effect September 1, 1997.  The change
   38-8  in law made by this section applies only to interest on a payment
   38-9  by a state agency that becomes overdue under Chapter 2251,
  38-10  Government Code, on or after that date.  Interest on a payment by a
  38-11  state agency that becomes overdue under Chapter 2251, Government
  38-12  Code, before that date is governed by Section 2251.041, Government
  38-13  Code, as it exists on the date the payment becomes overdue, and the
  38-14  prior law is continued in effect for this purpose.
  38-15        SECTION 30.  Except as otherwise provided by this Act, this
  38-16  Act takes effect September 1, 1995.
  38-17        SECTION 31.  The importance of this legislation and the
  38-18  crowded condition of the calendars in both houses create an
  38-19  emergency and an imperative public necessity that the
  38-20  constitutional rule requiring bills to be read on three several
  38-21  days in each house be suspended, and this rule is hereby suspended.