IMF S.B. 820 75(R)BILL ANALYSIS STATE AFFAIRS S.B. 820 By: West, Truan 5-2-97 Committee Report (Amended) BACKGROUND Currently, electronic commerce is the conduct of business transactions using electronic communication means. These means may include electronic mail, electronic bulletin boards, websites, computer-to-computer facsimiles, or electronic funds transfer from a payer to a financial institution, among other similar methods. Information concerning state procurement information can be accessed by the mail or telephone. This bill establishes an electronic commerce network, an electronic procurement database, and an electronic procurement marketplace. PURPOSE As proposed, HB 2645 would direct the GSC to establish and maintain an electronic commerce network, an electronic procurement database, and an electronic procurement marketplace. These tools would allow GSC to centralize all state agency procurement and contracting on the internet, thus allowing businesses and state agencies to more quickly meet their purchasing needs. This legislation will maintain the agency's ability to purchase goods and services on behalf of other state agencies and boards. RULEMAKING AUTHORITY Rulemaking authority is granted to the General Services Commission in SECTIONS 1 and 3 (Sections 2177.001(c) and (f), 2177.003(g), and 2156.005(b), Government Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subtitle D, Title 10, of the Government Code by adding Chapter 2177 as follows: Section 2177.001(a) requires the General Services Commission to establish and manage an electronic procurement marketplace and allows GSC to competitive bid contract with private or public entities to establish or support various elements of the network. Section 2177.001(b) requires GSC to set standards for the electronic marketplace. Section 2177.001(c) allows GSC to adopt rules relating to the development and management of the electronic procurement marketplace. Section 2177.001(d) allows GSC to make state procurement information available to political subdivisions through the electronic procurement marketplace for a fee. Section 2177.001(e) requires state agencies to use the electronic procurement marketplace to determine the best method for acquiring goods and services. Section 2177.001(f) allows GSC to adopt rules, prescribe forms, and require information to administer this section. Section 2177.002 allows GSC to maintain, in an electronic database, information on state procurement that it considers useful. GSC may require information from state agencies for inclusion in the electronic procurement database. Section 2177.003(a) requires GSC to establish and manage an electronic commerce network that will allow the state to purchase goods and services from and contract with vendors electronically. The electronic commerce network must be based on the standard protocol developed by the American National standards Institute. Section 2177.003(b) allows GSC to competitively bid contracts to establish components of the network. Section 2177.003(c) allows GSC to link the electronic commerce network and the electronic procurement marketplace to allow state agencies to complete transaction electronically and efficiently. Section 2177.003(d) requires each state agency with the capability to participate in the network to participate in the network. GSC is required to set a fee for each agency to cover the costs of providing network services. Section 2177.003(e) allows GSC to include political subdivisions of the state and other member's of the GSC cooperative purchasing program to participate in the electronic commerce network. All participating political subdivisions and purchasing program members must pay a fee for the network services. Section 2177.003(f) allows GSC to charge private business a fee for accessing the system. Section 2177.003(g) allows GSC to adopt rules and require participating agencies to designate a network coordinator. Section 2177.003(h) provides that the current competitive bidding process is not changed. Sec. 2177.004(a) requires state agencies to send GSC information on each procurement contract exceeding the agency's delegated purchasing authority including construction projects, professional or consulting services, and a procurement that is otherwise exempt from the commission's purchasing authority. Section 2177.004(b) requires GSC and state agencies to include information concerning the goods and services being procured, on the electronic commerce network. Section 2177.004(c) requires GSC to post on the electronic commerce network information relating to the business activity of the state that it considers to be of public interest. State agencies are required to provide information to the commission to assist the commission in posting information on the electronic commerce network. Section 2177.004(d) requires state agencies to post the awarding of a contract on the electronic commerce network. SECTION 2. Amends Section 2155.264 of the Government Code by adding that state agencies may solicit bids or proposals through the use of electronic means. SECTION 3. Amends Section 2156.005 of the Government Code by adding subsection (b) stating the sealed bid requirement of the commission does not apply to bids submitted through the electronic commerce network. And allows GSC to adopt rules to ensure the security and confidentiality of bids submitted through electronic means. SECTION 4. Amends Section 2156.063 of the Government Code by adding that the commission shall solicit bids through electronic means. SECTION 5. Requires GSC to gradually phase in these changes in a cost-effective manner. SECTION 6. Effective date: September 1, 1997. SECTION 7. Emergency clause. EXPLANATION OF AMENDMENT Committee amendment no. 1: (1) On page 1, line 11 adds "to the extent feasible" to allow a determination to be made as to the benefits of the establishment of an electronic procurement marketplace. (2) On page 2, line 8, substitutes "may" for "shall" to make the use of the marketplace optional as to determining the most appropriate procurement method. (3) On page 1, strikes lines 19-20 and substitutes language intended to consolidate information which may be included in the databases related to an electronic commerce system. (4) On page 2, strikes lines 11-16 to remove language made extraneous by the previous change. (5)-(8) Make conforming changes.