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.