By West                                                S.B. No. 878
       74R4270 JRD-D
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the provisions of state agency strategic plans that
    1-3  address contracting with historically underutilized businesses and
    1-4  to auditing and enforcing agency compliance with those provisions.
    1-5        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-6        SECTION 1.  Section 1.03, State Purchasing and General
    1-7  Services Act (Article 601b, Vernon's Texas Civil Statutes), is
    1-8  amended by amending Subsections (l) and (m) and adding Subsections
    1-9  (q)-(s) to read as follows:
   1-10        (l)  The commission and each state agency shall prepare as
   1-11  part of its strategic plan under Chapter 2056, Government Code
   1-12  <Article 6252-31, Revised Statutes, as added by Chapter 384, Acts
   1-13  of the 72nd Legislature, Regular Session, 1991>, a written plan for
   1-14  increasing the commission's or the agency's use of historically
   1-15  underutilized businesses in purchasing and in construction <public
   1-16  works> contracting.  On request, the commission shall provide
   1-17  technical assistance to an agency that is preparing its plan under
   1-18  this subsection.  The plan must include:
   1-19              (1)  a policy or mission statement relating to
   1-20  increasing use of historically underutilized businesses by the
   1-21  commission or agency;
   1-22              (2)  goals to be met by the commission or agency in
   1-23  carrying out the policy or mission; <and>
   1-24              (3)  specific programs to be conducted by the
    2-1  commission or agency to meet the goals stated in the plan,
    2-2  including a specific program to encourage contractors to use
    2-3  historically underutilized businesses as partners and
    2-4  subcontractors;
    2-5              (4)  a plan to meet the goal of assisting historically
    2-6  underutilized businesses to receive at least 30 percent of the
    2-7  total value of all contract awards for purchases the commission or
    2-8  agency expects to make during the next fiscal year in the
    2-9  purchasing categories of commodities, professional services, other
   2-10  services, and construction contracts;
   2-11              (5)  a list of employees responsible for implementing
   2-12  the historically underutilized businesses provisions of the
   2-13  strategic plan that includes for each employee the employee's title
   2-14  and job description and the percentage of the employee's time
   2-15  allocated to implementing the historically underutilized businesses
   2-16  provisions of the strategic plan;
   2-17              (6)  a plan to:
   2-18                    (A)  identify historically underutilized
   2-19  businesses that can and are available to meet agency needs in each
   2-20  purchasing category listed in Subdivision (4) of this subsection;
   2-21                    (B)  classify the identified historically
   2-22  underutilized businesses based on the race, ethnicity, and gender
   2-23  of the socially disadvantaged controlling ownership of the
   2-24  business; and
   2-25                    (C)  assist historically underutilized businesses
   2-26  of each racial, ethnic, and gender classification to receive a
   2-27  percentage of the total value of all contract awards the agency
    3-1  expects to make in the purchasing category that is proportionate to
    3-2  the percentage of businesses that can and are available to meet
    3-3  agency needs in the category and that are historically
    3-4  underutilized businesses of that racial, ethnic, or gender
    3-5  classification;
    3-6              (7)  goals for encouraging historically underutilized
    3-7  businesses to participate as subcontractors on agency contracts,
    3-8  including construction contracts, and methods to achieve those
    3-9  goals;
   3-10              (8)  a plan to divide construction contract work or
   3-11  purchases in the other purchasing categories listed in Subdivision
   3-12  (4) of this subsection into the smallest reasonable units,
   3-13  consistent with applicable industry standards and Section 3.08(e)
   3-14  of this Act, to increase the possibility of participation by
   3-15  historically underutilized businesses in the contracting
   3-16  opportunity;
   3-17              (9)  a plan to ensure that the agency establishes
   3-18  realistic delivery schedules that are consistent with the agency's
   3-19  actual requirements;
   3-20              (10)  a plan to ensure that the agency's requisitions
   3-21  contain terms, conditions, and specifications that reflect the
   3-22  agency's actual needs, and do not contain elevated requirements in
   3-23  matters such as insurance, bonding, and experience that exceed the
   3-24  agency's needs;
   3-25              (11)  a plan to:
   3-26                    (A)  advertise contracting opportunities in
   3-27  general circulation media, trade association media, and media that
    4-1  focus on serving one or more kinds of historically underutilized
    4-2  businesses;
    4-3                    (B)  effectively use the services of local,
    4-4  state, and federal business assistance offices that provide
    4-5  assistance in identifying historically underutilized businesses
    4-6  that have the ability to perform agency contracts; and
    4-7                    (C)  inform appropriate other persons and
    4-8  organizations who can help widely disseminate information about
    4-9  contracting opportunities to increase the likelihood that
   4-10  interested historically underutilized businesses will learn of the
   4-11  opportunity, including various minority and women chambers of
   4-12  commerce, trade associations, building trade associations, and
   4-13  contractor associations;
   4-14              (12)  a plan to provide interested historically
   4-15  underutilized businesses with adequate information about bonding
   4-16  and insurance requirements, the plans, specifications, and scope of
   4-17  the work, and other requirements for agency contracts; and
   4-18              (13)  a plan to negotiate in good faith with interested
   4-19  historically underutilized businesses whenever negotiation is
   4-20  allowed.
   4-21        (m)  The commission and each state agency shall prepare an
   4-22  annual report for each fiscal year documenting progress under its
   4-23  plan for increasing use of historically underutilized businesses.
   4-24  The report must describe the agency's achievements during the
   4-25  fiscal year in preparing and implementing the historically
   4-26  underutilized businesses provisions of the agency's strategic plan
   4-27  as required by Subsection (l) of this section.  The commission or
    5-1  agency shall file the report with the <governor,> lieutenant
    5-2  governor<,> and speaker of the house of representatives not later
    5-3  than December 9th <31> of each year and shall include the report in
    5-4  the financial report the agency submits under Section 2101.011,
    5-5  Government Code.
    5-6        (q)  The state auditor shall audit a state agency's
    5-7  compliance with the historically underutilized businesses
    5-8  provisions of the agency's strategic plan in accordance with
    5-9  Chapter 321, Government Code.
   5-10        (r)  The state auditor shall report to the commission a state
   5-11  agency that is not complying with the requirements of Subsection
   5-12  (l) of this section or with the historically underutilized
   5-13  businesses provisions of the agency's strategic plan that the
   5-14  agency prepares under Subsection (l).  The state auditor shall also
   5-15  report to the commission a state agency that is not in the state
   5-16  auditor's opinion making a good faith effort to comply with the
   5-17  requirements of Subsection (l) of this section or with the
   5-18  historically underutilized businesses provisions of the agency's
   5-19  strategic plan that the agency prepares under Subsection (l).  In
   5-20  determining whether a state agency is making a good faith effort to
   5-21  comply, the state auditor and the commission shall also consider
   5-22  whether the agency has:
   5-23              (1)  adopted rules and procedures governing the
   5-24  agency's contract awards in the purchasing categories of
   5-25  commodities, professional services, other services, and
   5-26  construction contracts that are designed to help the agency achieve
   5-27  historically underutilized businesses procurement goals in each
    6-1  purchasing category;
    6-2              (2)  sent agency representatives to attend or
    6-3  participate in trade fairs, conferences, matchmaker programs, or
    6-4  workshops that focus on serving one or more kinds of historically
    6-5  underutilized businesses;
    6-6              (3)  established a procedure to waive bonding
    6-7  requirements for historically underutilized businesses, to the
    6-8  extent allowed by law;
    6-9              (4)  negotiated in good faith with interested
   6-10  historically underutilized businesses whenever negotiation was
   6-11  allowed, investigated the interested historically underutilized
   6-12  businesses' capabilities, and documented the reasons for not
   6-13  contracting with a historically underutilized business when
   6-14  negotiations with the business did not result in a contract;
   6-15              (5)  established a list of commodities, professional
   6-16  services, other services, and construction contracts that could be
   6-17  provided by historically underutilized businesses;
   6-18              (6)  implemented a specific initiative to encourage
   6-19  historically underutilized businesses to participate in agency
   6-20  procurement opportunities; and
   6-21              (7)  designated a senior employee with appropriate
   6-22  experience and authority to serve as the agency's coordinator for
   6-23  agency attempts to utilize historically underutilized businesses.
   6-24        (s)  The commission may also require a state agency to send
   6-25  information to the commission that demonstrates whether the agency
   6-26  is complying with the requirements of Subsection (l) of this
   6-27  section and is, whenever appropriate, taking the actions required
    7-1  under the historically underutilized businesses provisions of the
    7-2  agency's strategic plan prepared under Subsection (l).  If the
    7-3  commission, after considering the state auditor's report together
    7-4  with any additional information the commission acquires, determines
    7-5  that a state agency is not making a good faith effort to comply
    7-6  with the requirements of Subsection (l) of this section or with the
    7-7  historically underutilized businesses provisions of the agency's
    7-8  strategic plan that the agency prepares under Subsection (l), the
    7-9  commission may revoke purchasing authority that the commission
   7-10  delegated to the agency under Section 3.06 of this Act or that the
   7-11  commission delegated to the agency by rule under Section 3.08(a) of
   7-12  this Act.  If the commission revokes an agency's delegated
   7-13  purchasing authority under this subsection, the governor and the
   7-14  Legislative Budget Board may consider that fact an emergency
   7-15  requiring a transfer from the agency's appropriated funds to the
   7-16  commission's appropriated funds of an amount equal to the cost the
   7-17  commission will incur in performing the purchasing functions
   7-18  formerly delegated to the agency.
   7-19        SECTION 2.  This Act takes effect September 1, 1995.
   7-20        SECTION 3.  The importance of this legislation and the
   7-21  crowded condition of the calendars in both houses create an
   7-22  emergency and an imperative public necessity that the
   7-23  constitutional rule requiring bills to be read on three several
   7-24  days in each house be suspended, and this rule is hereby suspended.