By Farrar H.B. No. 3103
74R8035 PAM-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to procurement of public improvements at the least cost;
1-3 providing penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. (a) This Act creates a least cost review program
1-6 to assist governmental entities in determining the least cost of
1-7 public improvements performed by a governmental entity within the
1-8 state.
1-9 (b) This subchapter is adopted to ensure that public
1-10 improvements are procured at the least cost.
1-11 SECTION 2. Chapter 271, Local Government Code, is amended by
1-12 adding Subchapter F to read as follows:
1-13 SUBCHAPTER F. LEAST COST REVIEW PROGRAM
1-14 Sec. 271.101. DEFINITIONS. In this subchapter:
1-15 (1) "Component purchases" means purchases of the
1-16 component parts of an item that in normal purchasing practices
1-17 would be purchased in one purchase.
1-18 (2) "Cost comparison statement" means a statement by a
1-19 governmental entity that compares the cost of purchasing a public
1-20 improvement with the cost of providing the improvement by the
1-21 governmental entity.
1-22 (3) "Governmental entity" means:
1-23 (A) a county with a population of 50,000 or
1-24 more;
2-1 (B) a municipality;
2-2 (C) a common or independent school district;
2-3 (D) a hospital district or authority;
2-4 (E) a housing authority;
2-5 (F) a water district or authority;
2-6 (G) a utility district or authority;
2-7 (H) a road utility district; or
2-8 (I) an agency or instrumentality of a
2-9 governmental entity described by this subdivision.
2-10 (4) "In-house cost estimate" means a report by a
2-11 governmental entity that contains the computations of probable cost
2-12 to the governmental entity of providing a public improvement using
2-13 the personnel, equipment, or facilities of the governmental entity.
2-14 (5) "Public improvement" means the construction,
2-15 alteration, repair, or renovation, including the materials,
2-16 machinery, fixtures, tools, or labor incorporated into or consumed
2-17 in the prosecution of the work, of a facility, including a
2-18 building, structure, site improvement, road, street, highway,
2-19 bridge, drainage structure, storm sewer, sanitary sewer, wastewater
2-20 treatment or pumping facility, water main, and water storage
2-21 facility, owned and operated by a governmental entity.
2-22 (6) "Separate purchases" means purchases, made
2-23 separately, of items that in normal purchasing practices would be
2-24 purchased in one purchase.
2-25 (7) "Sequential purchases" means periodic purchases of
2-26 items that in normal purchasing practices would be purchased in one
2-27 purchase.
3-1 Sec. 271.102. LEAST COST REVIEW REQUIRED. A governmental
3-2 entity that performs public improvements subject to this subchapter
3-3 shall participate in a least cost review program and shall apply
3-4 the policies and requirements established under this subchapter.
3-5 Sec. 271.103. EXEMPT PURCHASES. This subchapter does not
3-6 apply to a purchase by a governmental entity, if the purchase is:
3-7 (1) exempt from competitive bidding under Subchapter
3-8 A, Chapter 2254, Government Code;
3-9 (2) for an amount less than $10,000 including all
3-10 other component purchases, separate purchases, and sequential
3-11 purchases by the governmental entity;
3-12 (3) for a public improvement necessitated by public
3-13 calamity in which the use of personnel, equipment, or facilities of
3-14 the governmental entity will more expediently relieve the needs or
3-15 preserve the property of its citizens; or
3-16 (4) a public improvement purchased under the
3-17 competitive bidding requirements of Subchapter B.
3-18 Sec. 271.104. LEAST COST REVIEW. (a) If a governmental
3-19 entity proposes to construct nonexempt public improvements by use
3-20 of personnel, equipment, or facilities of the governmental entity,
3-21 the governmental entity shall submit, before the 30th day before
3-22 the date of the adoption of its annual budget, a least cost review
3-23 for consideration and approval at a public meeting of the governing
3-24 body of the governmental entity.
3-25 (b) Before the 14th day before the public meeting, the
3-26 governmental entity shall furnish to any citizen in the
3-27 jurisdictional limits of the governmental entity a copy of the
4-1 least cost review if the citizen pays a reasonable fee to reimburse
4-2 the governmental entity for copying costs.
4-3 (c) The least cost review shall contain the following
4-4 elements:
4-5 (1) a list of every nonexempt public improvement to be
4-6 provided during the budget year by the use of the personnel,
4-7 equipment, or facilities of the governmental entity;
4-8 (2) an estimate of the quantities for each
4-9 classification of the work in each nonexempt public improvement,
4-10 according to the classifications normally used on competitively bid
4-11 public improvements;
4-12 (3) a cost estimate of probable costs for providing
4-13 each nonexempt public improvement by competitive bid, as determined
4-14 by multiplying the quantities of each classification of the work by
4-15 unit costs established by comparable bid data in the locale of the
4-16 governmental entity;
4-17 (4) an in-house cost estimate of probable costs of
4-18 providing each nonexempt public improvement using the personnel,
4-19 equipment, or facilities of the governmental entity, including all
4-20 direct and indirect costs of labor, materials, administration,
4-21 investment, and maintenance of equipment, under the cost accounting
4-22 procedures and instructions relating to in-house cost estimates as
4-23 provided by the State Council on Competitive Government under
4-24 Article 15, State Purchasing and General Services Act (Article
4-25 601b, Vernon's Texas Civil Statutes);
4-26 (5) a cost comparison statement for each nonexempt
4-27 public improvement listed in the least cost review; and
5-1 (6) a determination as to whether the standard of
5-2 quality of the public improvement using personnel, equipment, or
5-3 facilities of the governmental entity will be the same as if the
5-4 public improvement were purchased pursuant to competitive bidding
5-5 requirements of Subchapter B.
5-6 Sec. 271.105. REDUCTION OF COSTS. (a) Except as provided
5-7 by Subsection (b), a governmental entity shall purchase a public
5-8 improvement by competitive bid if the least cost review for the
5-9 public improvement by the governmental entity indicates that the
5-10 least cost to the entity would be by purchase under the competitive
5-11 bidding requirements of Subchapter B.
5-12 (b) A governmental entity may purchase a public improvement
5-13 without complying with the competitive bid requirements of
5-14 Subchapter B if:
5-15 (1) the additional cost is less than 10 percent; and
5-16 (2) the governing body of the governmental entity
5-17 passes a resolution specifically describing:
5-18 (A) the non-cost advantages of providing the
5-19 public improvement using personnel, equipment, or facilities of the
5-20 governmental entity; and
5-21 (B) a proposal for reducing costs of the
5-22 personnel, equipment, or facilities used in the public improvement
5-23 so that the total costs are reduced to the costs of a competitively
5-24 bid public improvement.
5-25 Sec. 271.106. MAINTENANCE OF COST RECORDS. For each public
5-26 improvement purchased using the personnel, equipment, or facilities
5-27 of a governmental entity, the governmental entity shall maintain
6-1 and preserve as a public record a true and accurate account of all
6-2 direct and indirect actual costs of labor, materials,
6-3 administration, investment, and maintenance of equipment under the
6-4 accounting procedures and instructions as provided by the State
6-5 Council on Competitive Government under Article 15, State
6-6 Purchasing and General Services Act (Article 601b, Vernon's Texas
6-7 Civil Statutes).
6-8 Sec. 271.107. CRIMINAL PENALTIES. (a) An officer or
6-9 employee of a governmental entity commits an offense if the officer
6-10 or employee intentionally or knowingly:
6-11 (1) makes or authorizes separate, sequential, or
6-12 component purchases to avoid requirements of a least cost review
6-13 described by Section 271.104; or
6-14 (2) violates the least cost review requirements of
6-15 Section 271.104.
6-16 (b) An offense under Subsection (a) is a Class B
6-17 misdemeanor.
6-18 (c) An officer or employee of a governmental entity who
6-19 intentionally or knowingly violates this subchapter, other than by
6-20 conduct described in Subsection (a) or (b) commits an offense that
6-21 is a Class C misdemeanor.
6-22 Sec. 271.108. REMOVAL; INELIGIBILITY. (a) The final
6-23 conviction of an officer or employee of a governmental entity for
6-24 an offense under Section 271.107(a) results in the immediate
6-25 removal from office or employment of that person.
6-26 (b) For four years after the date of the final conviction,
6-27 the removed officer or employee is ineligible:
7-1 (1) to be a candidate for or to be appointed or
7-2 elected to a public office in this state;
7-3 (2) to be employed by the governmental entity the
7-4 person served when the offense occurred; and
7-5 (3) to receive any compensation through a contract
7-6 with that governmental entity.
7-7 (c) This section does not prohibit the payment of retirement
7-8 or workers' compensation benefits to the removed officer or
7-9 employee.
7-10 Sec. 271.109. INJUNCTIVE RELIEF. A citizen in the
7-11 jurisdictional limits of a governmental entity may enjoin the
7-12 governmental entity from acting in violation of this subchapter.
7-13 SECTION 3. The importance of this legislation and the
7-14 crowded condition of the calendars in both houses create an
7-15 emergency and an imperative public necessity that the
7-16 constitutional rule requiring bills to be read on three several
7-17 days in each house be suspended, and this rule is hereby suspended.