By Ellis S.B. No. 463
74R3778 JRD-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the use of historically underutilized businesses as
1-3 subcontractors on state purchasing contracts.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Article 1, State Purchasing and General Services
1-6 Act (Article 601b, Vernon's Texas Civil Statutes), is amended by
1-7 adding Section 1.05 to read as follows:
1-8 Sec. 1.05. FAILURE TO USE HISTORICALLY UNDERUTILIZED
1-9 BUSINESS SUBCONTRACTOR LISTED IN CONTRACTOR'S BID. (a) Except as
1-10 provided by Subsection (c) of this section, a contractor who has
1-11 been awarded a state contract is considered to have materially
1-12 breached the contract if:
1-13 (1) in the contractor's bid or proposal for the
1-14 contract, the contractor listed a certified historically
1-15 underutilized business as the intended subcontractor, consultant,
1-16 or supplier to perform specified work or functions under the
1-17 contract; and
1-18 (2) the contractor does not in fact use the listed
1-19 certified historically underutilized business as the subcontractor,
1-20 consultant, or supplier to perform the specified work or functions
1-21 or substantially similar work or functions under the contract in
1-22 the dollar amount contemplated in the bid or proposal.
1-23 (b) In addition to any other sanctions that may apply to the
1-24 contractor's conduct under other law, the state may pursue any
2-1 legal or equitable remedy available for a material breach of
2-2 contract if the contractor is considered to have materially
2-3 breached the contract under this section.
2-4 (c) A contractor is not considered to have materially
2-5 breached the contract under this section if:
2-6 (1) the contractor used another certified historically
2-7 underutilized business as the subcontractor, consultant, or
2-8 supplier to perform the specified work or functions under the
2-9 contract in the dollar amount contemplated in the bid or proposal;
2-10 (2) changed circumstances that were not under the
2-11 control of the contractor made the performance of the specified
2-12 work or functions:
2-13 (A) unnecessary; or
2-14 (B) unnecessary in the dollar amount
2-15 contemplated in the bid or proposal, if the amount of the work or
2-16 functions actually performed by the listed subcontractor,
2-17 consultant, or supplier or by another certified historically
2-18 underutilized business as the subcontractor, consultant, or
2-19 supplier was a reduced amount; or
2-20 (3) the contractor:
2-21 (A) had good cause for not using the listed
2-22 certified historically underutilized business as the subcontractor,
2-23 consultant, or supplier to perform the specified work or functions
2-24 under the contract; and
2-25 (B) could not find, after making a demonstrable
2-26 good faith effort to find, another certified historically
2-27 underutilized business willing and able to be the subcontractor,
3-1 consultant, or supplier to perform the specified work or functions
3-2 under the contract.
3-3 (d) A contractor shall send to the commission or other
3-4 agency administering the contract documentation that identifies all
3-5 subcontractors, consultants, or suppliers who are not employees of
3-6 the contractor who are performing work or functions under the
3-7 contract and that identifies the amount of money paid or to be paid
3-8 to the subcontractors, consultants, or suppliers. The
3-9 documentation must contain information that allows the commission
3-10 or other agency to compare the identity of subcontractors,
3-11 consultants, or suppliers who are not employees of the contractor
3-12 who are performing work or functions under the contract with the
3-13 intended subcontractors, consultants, or suppliers listed in the
3-14 contractor's bid or proposal. The commission shall adopt rules
3-15 applicable to contracts administered by the commission or any other
3-16 agency that prescribe the form and content of the documentation
3-17 required under this subsection for different types of contracts.
3-18 Any other agency may adopt rules that are consistent with the
3-19 commission's rules that contain supplemental documentation
3-20 requirements that are necessary given the nature of the contracts
3-21 entered into by the agency.
3-22 (e) Notwithstanding other law, this section applies to all
3-23 state contract awards for purchasing supplies, materials,
3-24 equipment, professional services, services under construction
3-25 contracts, and other services without regard to:
3-26 (1) the source of funds for a contract;
3-27 (2) whether a contract is made by an agency acting
4-1 under delegated purchasing authority or under an exception to the
4-2 commission's purchasing authority; or
4-3 (3) whether the contract is made under the authority
4-4 of this Act or other law.
4-5 SECTION 2. This Act takes effect September 1, 1995. The
4-6 change in law made by this Act applies only to a contract entered
4-7 into by the state on or after that date.
4-8 SECTION 3. The importance of this legislation and the
4-9 crowded condition of the calendars in both houses create an
4-10 emergency and an imperative public necessity that the
4-11 constitutional rule requiring bills to be read on three several
4-12 days in each house be suspended, and this rule is hereby suspended.