By Wolens                                       H.B. No. 2336

      75R8553 T                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the purchase of goods and services by the state and to

 1-3     purchasing services provided by the state to local governments.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Section 2155.006, Government Code, is added to

 1-6     read as follows:

 1-7           Sec. 2155.006.  AUTHORITY TO PROMULGATE RULES.  The

 1-8     commission may promulgate rules to efficiently and effectively

 1-9     administer the provisions of Subtitle D, Title 10, Government Code.

1-10           SECTION 2.  Section 2155.065, Government Code, is amended to

1-11     read as follows:

1-12           Sec. 2155.065.  Contracts With Department of Criminal

1-13     Justice.  The commission is authorized to make contracts with the

1-14     Texas Department of Criminal Justice for the purchase of goods and

1-15     services for use by another state agency.  The Texas Department of

1-16     Criminal Justice shall test the goods and services in accordance

1-17     with Section 2155.069, Government Code, to the extent necessary to

1-18     ensure quality, based on considerations of the product, purchase

1-19     price, performance, delivery, and life cycle cost before entering

1-20     into a contract.  The commission shall make awards based on best

1-21     value for products under this section.

1-22           SECTION 3.  Section 2155.068, Government Code, is amended to

1-23     read as follows:

1-24           Sec. 2155.068.  Uniform Standards and Specifications.

 2-1     (a)  The commission may coordinate uniform standards and

 2-2     specifications for goods purchased by the commission.  The

 2-3     commission may adopt, by rule, appropriate standards developed by

 2-4     nationally recognized entities as part of its specifications and

 2-5     standards program.

 2-6           (b)  The commission shall enlist the cooperation of other

 2-7     state agencies in the establishment, maintenance, and revision of

 2-8     uniform standards and specifications. [and shall foster their use

 2-9     to accomplish continuously the most efficient purchase of goods.]

2-10           (c)  The commission shall review contracts [and procedures]

2-11     administered by the commission to ensure that all goods and

2-12     services meet contract specifications.

2-13           (d)  As part of the standards and specifications program, the

2-14     commission shall review contracts for opportunities to include

2-15     recycling waste produced at state buildings.

2-16           SECTION 4.  Section 2155.069, Government Code, is amended to

2-17     read as follows:

2-18           Sec. 2155.069.  Testing and Inspection.  (a)  The commission

2-19     may [shall] test and inspect goods and services purchased from

2-20     contracts administered by the commission [under a program] to

2-21     ensure compliance with specifications.

2-22           (b)  The commission may contract for testing under this

2-23     section.

2-24           (c)  The commission may [shall provide for] test[ing] and

2-25     inspect[ion of] purchases exempted from the commission on a cost

2-26     recovery basis, [all costly purchases] and may adopt rules

2-27     necessary to carry out [this duty] such testing and inspection.

 3-1           (d)  The commission may also test and inspect products before

 3-2     they are purchased.  Other state agencies may test products before

 3-3     purchase under standard industry testing methods, or may contract

 3-4     for testing.  The commission may also disseminate information to

 3-5     agencies about available private testing facilities.

 3-6           SECTION 5.  Section 2155.070, Government Code, is amended to

 3-7     read as follows:

 3-8           Sec. 2155.070.  Failure to Meet Specifications.  (a)  A state

 3-9     agency that determines that goods or services received from

3-10     contracts administered by the commission do not meet specifications

3-11     shall promptly notify the commission in writing of the reasons for

3-12     the determination.  The commission shall immediately make its own

3-13     determination of whether the goods and services meet

3-14     specifications.

3-15           (b)  The commission has the sole power to determine that

3-16     goods and services meet or fail to meet specifications.

3-17           (c)  On determining that contract specifications or

3-18     conditions have not been met, the commission shall act against the

3-19     defaulting contractor, with the assistance of the Attorney General

3-20     as necessary.

3-21           (d)  If the commission receives repeated complaints against a

3-22     vendor, the commission shall remove the vendor's name and related

3-23     class and item from the commission's bidders list for not longer

3-24     than one year. In the event complaints continue after one year, the

3-25     commission may bar the vendor from participating in state contracts

3-26     for a period under Section 2155.077, Government Code.

3-27           SECTION 6.  Chapter 2155, Government Code, is amended by

 4-1     adding Sections 2155.074-2155.077 to read as follows:

 4-2           Sec. 2155.074.  BEST VALUE STANDARD FOR PURCHASE OF GOODS OR

 4-3     SERVICES.  (a)  Each state agency, including the commission, shall

 4-4     purchase goods and services that provide the best value for the

 4-5     state.

 4-6           (b)  In determining the best value for the state, the

 4-7     commission or other state agency making a purchase is not

 4-8     restricted to considering lowest price meeting specifications

 4-9     alone, but subject to Section 2155.075, Government Code, may

4-10     consider other relevant factors, including:

4-11                 (1)  installation costs;

4-12                 (2)  life cycle costs;

4-13                 (3)  the quality and reliability of the good or

4-14     service;

4-15                 (4)  the delivery terms;

4-16                 (5)  indicators of probable vendor performance under

4-17     the contract such as past vendor performance, the vendor's

4-18     financial resources and ability to perform, the vendor's experience

4-19     and responsibility, and the vendor's ability to provide reliable

4-20     maintenance agreements and support;

4-21                 (6)  the cost of any employee training associated with

4-22     a purchase;

4-23                 (7)  the effect of a purchase on agency productivity;

4-24     and

4-25                 (8)  other factors relevant to determining the best

4-26     value for the state in the context of a particular purchase.

4-27           (c)  When using factors other than price, during an

 5-1     invitation for bid or request for proposal process, purchase price

 5-2     is to be the dominant factor in each purchase decision; therefore,

 5-3     the value assigned to every other individual evaluation factor

 5-4     shall not exceed the value assigned to purchase price.

 5-5           (d)  When using factors other than price, during a

 5-6     competitive bidding process for goods or services with a value in

 5-7     excess of $100,000, the state agency shall consult with and receive

 5-8     approval from the commission to use the additional factors listed

 5-9     in subsection (b) above as a part of the evaluation criteria for

5-10     the purchase.  The commission may, by rule, establish a higher

5-11     threshold level for the exercise of its review and approval

5-12     authority hereunder based on the criteria set forth in Section

5-13     2155.132(b).

5-14           Sec. 2155.075.  REQUIREMENT TO SPECIFY VALUE FACTORS IN

5-15     REQUEST FOR BID OR PROPOSALS.  (a)  For a purchase made through

5-16     competitive bidding or competitive sealed proposal process, the

5-17     commission or other state agency must specify in the advertisement

5-18     the factors, other than price, that the commission or agency will

5-19     consider in determining which bid or proposal offers the best value

5-20     for the state, in accordance with Section 2155.074.

5-21           (b)  For a purchase made through the competitive sealed

5-22     proposal process, the commission or other state agency may, after

5-23     opening the proposals and as a part of vendor's best and final

5-24     offer, the agency shall inform each vendor submitting a proposal of

5-25     any additional factors which will be considered in determining

5-26     which proposal offers the best value for the state.  Such

5-27     notification must be made simultaneously to all vendors having

 6-1     submitted responses.

 6-2           Sec. 2155.076.  PROTEST PROCEDURES.  (a)  Each state agency

 6-3     shall develop and adopt, by rule, protest procedures for resolving

 6-4     vendor protests relating to purchasing issues. Agency rules shall

 6-5     be consistent with the commission protest procedures rules. The

 6-6     rules must include standards for maintaining purchasing process

 6-7     documentation to be used in the event of a protest.

 6-8           (b)  Agencies not subject to the administrative procedure

 6-9     law, Chapter 2001, Government Code, shall provide public notice of

6-10     the proposed and adopted rules and provide a procedure for public

6-11     comment on the proposed rules.

6-12           Sec. 2155.077.  BARRING VENDOR FROM PARTICIPATION IN STATE

6-13     CONTRACTS.  (a)  The commission may bar a vendor from participating

6-14     in state contracts that are subject to this Subtitle, including

6-15     contracts for which purchasing authority is delegated to a state

6-16     agency, for:

6-17                 (1)  substandard performance under a contract with the

6-18     state;

6-19                 (2)  material misrepresentations in a  bid or proposal

6-20     for the state or a state agency or during the course of performing

6-21     a contract with the state or a state agency;

6-22                 (3)  fraud; or

6-23                 (4)  an act of breach under a state contract.

6-24           (b)  The commission shall bar a vendor from participating in

6-25     state contracts under this section for a period that is

6-26     commensurate with the seriousness of the vendor's action and the

6-27     damage to the state's interests; and

 7-1                 (1)  state generally the reasons for which a vendor may

 7-2     be barred from participating in state contracts and the periods for

 7-3     which the vendor may be barred; and

 7-4                 (2)  prescribe the procedures under which the

 7-5     commission will determine whether and for how long a vendor is

 7-6     barred.

 7-7           SECTION 7.  Section 2155.132, Government Code, is amended to

 7-8     read as follows:

 7-9           Sec. 2155.132.  Purchases Less Than Specified Monetary

7-10     Amount.  (a)  A state agency is delegated the authority to purchase

7-11     goods and services if the purchase does not exceed $15,000

7-12     [$5,000]. A state agency found through an audit by GSC to have not

7-13     followed the commission's rules or other laws related to the

7-14     procurements of goods and services under this delegated authority

7-15     shall be reported to the governor, lieutenant governor; speaker of

7-16     the house of representatives and Legislative Budget Board.  [The

7-17     agency may, however, use the commission's services for those

7-18     purchases.]

7-19           (b)  The commission, by rule, may delegate to a state agency

7-20     the authority to purchase goods and services if the purchase

7-21     exceeds $15,000 [$5,000]. In delegating purchasing authority under

7-22     this subsection or Section 2155.133, Government Code, the

7-23     commission shall require state agencies to perform or complete

7-24     certain purchasing functions, including:

7-25                 (1)  evaluating capabilities of the agency's purchasing

7-26     staff and the existence of automated purchasing tools at the

7-27     agency;

 8-1                 (2)  ensuring appropriate certification levels are held

 8-2     by the agency's purchasing personnel;

 8-3                 (3)  requiring compliance with the commission's

 8-4     procurement review audits of an agency's purchasing practices; and

 8-5                 (4)  considering whether the agency has adopted and

 8-6     published protest procedures consistent with those of the

 8-7     commission as part of its purchasing rules.

 8-8           (c)  The commission shall monitor the purchasing practices of

 8-9     state agencies that are making delegated purchases under Subsection

8-10     (b) of this Section or Section 2155.133, Government Code, to ensure

8-11     that the certification levels of the agency's purchasing personnel

8-12     and the quality of the agency's purchasing practices continue to

8-13     warrant the amount of delegated authority provided by the

8-14     commission to the agency.  The commission may revoke for cause all

8-15     or part of the purchasing authority that the commission delegated

8-16     to a stage agency.  The commission shall adopt rules to administer

8-17     this subsection.

8-18           (d) [(c)]  The commission by rule:

8-19                 (1)  shall prescribe procedures for a delegated

8-20     purchase; and

8-21                 (2)  shall prescribe rules by which agencies may use

8-22     the commission's services for delegated purchases, in accordance

8-23     with Section 2155.205, Government Code. [may delegate to the

8-24     comptroller the commission's authority under Subchapter F to audit

8-25     purchases and purchase information if the purchases do not exceed

8-26     $500 or a greater amount prescribed by the commission.]

8-27           (e) [(d)]  Competitive bidding, whether formal or informal,

 9-1     is not required for a purchase by a state agency if the purchase

 9-2     does not exceed $2,000 [$1,000], or a greater amount prescribed by

 9-3     commission rule.

 9-4           (f) [(e)]  Goods purchased under this section may not

 9-5     include:

 9-6                 (1)  an item for which a contract has been awarded

 9-7     under the contract purchase procedure, unless the quantity

 9-8     purchased is less than the minimum quantity specified in the

 9-9     contract;

9-10                 (2)  an item required by statute to be purchased from a

9-11     particular source; or

9-12                 (3)  a scheduled item that has been designated for

9-13     purchase by the commission.

9-14           (g) [(f)]  A large purchase may not be divided into small lot

9-15     purchases to meet the dollar limits prescribed by this section.

9-16     The commission may not require that unrelated purchases be combined

9-17     into one purchase order to exceed the dollar limits prescribed by

9-18     this section.

9-19           (h) [(g)]  A state agency making a purchase under this

9-20     section for which competitive bidding is required must:

9-21                 (1)  attempt to obtain at least three competitive bids

9-22     from sources listed on the master bidders list that normally offer

9-23     for sale the goods being purchased; and

9-24                 (2)  comply with Subchapter E.

9-25           SECTION 8.  Section 2155.134, Government Code, is amended to

9-26     read as follows:

9-27           Sec. 2155.134.  Group Purchasing Programs.  (a)  An

 10-1    institution of higher education, as defined by Section 61.003,

 10-2    Education Code, may purchase goods through a group purchasing

 10-3    program that offers discount prices to institutions of higher

 10-4    education.

 10-5          (b)  The commission shall adopt rules that allow institutions

 10-6    of higher education or state agencies to make purchases [purchases

 10-7    to be made] through group purchasing programs except when the

 10-8    commission determines within a reasonable time after receiving

 10-9    notice of a particular purchase that a better value [lower price]

10-10    is available through the commission.

10-11          (c)  The rules must provide for commission determination of

10-12    compliance with state laws and commission rules on purchasing from

10-13    a historically underutilized business.

10-14          (d)  This section does not affect other authority granted to

10-15    an institution of higher education under this subtitle.

10-16          SECTION 9.  Section 2155.138, Government Code, is amended to

10-17    read as follows:

10-18          Sec. 2155.138.  Exemption of Goods or Services of Blind or

10-19    Visually Impaired Persons.  (a)  The competitive bidding provisions

10-20    of this chapter do not apply to a state purchase of goods or

10-21    services that:

10-22                (1)  are made or provided by blind or visually impaired

10-23    persons;

10-24                (2)  are offered for sale to a state agency through

10-25    efforts made under law by the Texas Council on Purchasing from

10-26    People with Disabilities [Committee on Purchases of Products and

10-27    Services of Blind and Severely Disabled Persons];

 11-1                (3)  meet state specifications as to [for] quantity,

 11-2    [and] quality, delivery and life cycle costs; and

 11-3                (4)  cost not more than the fair market price of

 11-4    similar items.

 11-5          (b)  The council shall test the goods and services in

 11-6    accordance with Section 2155.069, Government Code, to the extent

 11-7    necessary to ensure quality, based on considerations of product,

 11-8    purchase price, life cycle cost and delivery performance.  The

 11-9    council may enter into a contract with a private or public entity

11-10    to assist with testing.  The commission shall consider best value

11-11    for goods and services purchased under this section.

11-12          SECTION 10.  Chapter 2155, Government Code, is amended by

11-13    adding Sections 2155.144-2155.148, to read as follows:

11-14          Sec. 2155.144.  TRAINING AND CERTIFICATION OF STATE AGENCY

11-15    PURCHASING PERSONNEL.  (a)  The commission shall establish and

11-16    administer a system of training, continuing education, and

11-17    certification for state agency purchasing personnel.   The

11-18    commission may adopt rules to administer this section, including

11-19    rules relating to monitoring certified purchaser's compliance with

11-20    the continuing education requirements of this section.

11-21          (b)  All state agency purchasing personnel, including

11-22    agencies with exempted purchasing authority from the commission,

11-23    must receive the training and continuing education to the extent

11-24    required by rule of the commission.  A state agency employee who is

11-25    required to receive the training or continuing education may not

11-26    participate in purchases by the employing agency unless the

11-27    employee has received the required training.

 12-1          (c)  The commission shall set and collect a fee from state

 12-2    agencies that employ purchasing personnel.  The commission shall

 12-3    set the fee in an amount that recovers the commission's costs under

 12-4    this section.

 12-5          (d)  The commission may provide training, continuing

 12-6    education, and certification under this section to purchasing

 12-7    personnel employed by a political subdivision or other public

 12-8    entity of the state.  Political subdivision purchasing personnel

 12-9    may receive, but are not required to receive, the training,

12-10    continuing education, or certification provided under this section.

12-11    The commission shall collect the fees described by Subsection (c)

12-12    for training, education, or certification under this subsection.

12-13          (e)  The commission may provide training and continuing

12-14    education under this section using its own personnel or through

12-15    contracts with private entities.  The commission may also, by

12-16    agreement with a public entity, use the services of persons

12-17    employed by the public entity to provide training and continuing

12-18    education under this section.

12-19          (f)  The commission shall provide at least three levels of

12-20    training under this section.

12-21          (g)  The basic training level must include an introduction to

12-22    contract purchasing methods, ethical issues impacting purchasing

12-23    decisions, and instruction in any other processes and issues that

12-24    the commission considers appropriate for introductory purchasing

12-25    training.

12-26          (h)  The second training level must include advanced

12-27    instruction in formal and informal bidding methods, introduction to

 13-1    negotiation methods, instruction in writing specifications and

 13-2    instruction in any other processes and issues that the commission

 13-3    considers appropriate for the second level of purchasing training.

 13-4          (i)  The third training level must include an introduction to

 13-5    complex negotiations, instruction in the criteria for determining

 13-6    which product or service offers the best value for the state, and

 13-7    instruction in any other processes and issues that the commission

 13-8    considers appropriate for advanced purchasing training.

 13-9          (j)  The commission may prescribe the circumstances under

13-10    which a state agency may delegate to a certified purchaser

13-11    signature purchasing authority to approve purchase orders.

13-12          (k)  The commission shall require 24 hours of continuing

13-13    education each year to maintain a certification level.  The

13-14    commission may allow attendance at training classes created as a

13-15    result of this section to count toward the continuing education

13-16    requirement.

13-17          (l)  The commission's prerequisites for receiving a level two

13-18    purchaser certification must include completion of the basic

13-19    training level, passage of a written examination, and a minimum

13-20    number of years of purchasing experience prescribed by the

13-21    commission.

13-22          (m)  The commission's prerequisites for receiving a level

13-23    three purchaser certification must include completion of the second

13-24    training level, passage of a written and an oral examination, and a

13-25    minimum of three years of purchasing experience.

13-26          Sec. 2155.145.  BUYING UNDER CONTRACT ESTABLISHED BY AGENCY

13-27    OTHER THAN COMMISSION.  (a)  The commission shall adopt rules

 14-1    specifying the circumstances under which it is advantageous for the

 14-2    state to allow a state agency to purchase goods or services under a

 14-3    contract made by another state agency other than the commission.

 14-4          (b)  If commission rules allow other agencies to make

 14-5    purchases under a contract entered into by an agency using

 14-6    delegated authority, the agency exercising delegated authority may

 14-7    only offer the goods or services available under the contract if it

 14-8    first:

 14-9                (1)  establishes that the goods and services being

14-10    offered under its contract are not available on a contract entered

14-11    into by the commission;

14-12                (2)  informs the commission of the terms of the

14-13    contract and the capabilities of the vendor; and

14-14                (3)  posts notice of the existence and terms of the

14-15    contract on the procurement marketplace.

14-16          Sec. 2155.146.  ADVISORY COMMITTEE ON PROCUREMENT.  (a)  The

14-17    commission may establish an advisory committee on procurement.  The

14-18    purpose of the committee is to represent before the commission the

14-19    state agency purchasing community and the political subdivisions

14-20    that use the commission's purchasing services.

14-21          (b)  The committee is composed of employees from the

14-22    commission, state agencies, including institutions of higher

14-23    education, and political subdivisions who are invited by the

14-24    commission to serve on the committee.  The commission shall invite

14-25    officers and employees who are experienced in public purchasing, in

14-26    public finance, or who possess other appropriate expertise to serve

14-27    on the committee.  Service on the committee is an additional duty

 15-1    of the member's public office or employment.  Article 6252-33,

 15-2    Revised Statutes, does not apply to the size or composition of the

 15-3    committee.  The commission shall set staggered terms for the

 15-4    members of the committee.

 15-5          (c)  The committee may establish its own rules of operation.

 15-6          (d)  The committee shall recommend improvements in commission

 15-7    or state agency purchasing practices to the commission.  The

 15-8    committee shall review and comment on findings and recommendations

 15-9    related to purchasing that are made by state agency internal

15-10    auditors or by the state auditor.

15-11          Sec. 2155.147.  VENDOR ADVISORY COMMITTEE.  (a)  The

15-12    commission may establish a vendor advisory committee.  The purpose

15-13    of the committee is to represent before the commission the vendor

15-14    community, to provide information to vendors, and to obtain vendor

15-15    input on state procurement practices.

15-16          (b)  The committee is composed of employees from the

15-17    commission and vendors who have done business with the state who

15-18    are invited by the commission to serve on the committee.  The

15-19    commission shall invite a cross-section of the vendor community to

15-20    serve on the committee, inviting both large and small businesses,

15-21    and vendors who provide a variety of different goods and services

15-22    to the state.  Article 6252-33, Revised Statutes, does not apply to

15-23    the size or composition of the committee.  The commission shall set

15-24    staggered terms for the members of the committee.

15-25          (c)  The committee may establish its own rules of operation,

15-26    but shall post notice of and hold its meetings in accordance with

15-27    the open meetings law, Chapter 551, Government Code.

 16-1          SECTION 11.  Section 2155.205, Government Code, is added to

 16-2    read as follows:

 16-3          Sec. 2155.205.  PROVIDING CERTAIN PURCHASING SERVICES ON

 16-4    FEE-FOR-SERVICE BASIS.  (a)  The commission using the best value

 16-5    analysis or competitive seal proposal process, may provide open

 16-6    market purchasing services on a fee-for-service basis for state

 16-7    agency purchases that are exempted from the commission or delegated

 16-8    to an agency under Sections 2155.132, 2155.133 and 2157.121,

 16-9    Government Code.  The commission shall set the fees in an amount

16-10    that recovers the commission's costs in providing the services.

16-11          (b)  The commission shall publish a schedule of its fees for

16-12    services that are subject to this section.  The schedule must

16-13    include the commission's fees for:

16-14                (1)  reviewing bid and contract documents for clarity,

16-15    completeness, and compliance with laws and rules;

16-16                (2)  developing and transmitting invitations to bid;

16-17                (3)  receiving and tabulating bids;

16-18                (4)  evaluating and determining which bidder offers the

16-19    best value to the state;

16-20                (5)  creating and transmitting purchase orders; and

16-21                (6)  participating in agencies' request for proposal

16-22    processes.

16-23          SECTION 12.  Section 2155.263, Government Code, is amended to

16-24    read as follows:

16-25          Sec. 2155.263.  Commission to Maintain Master Bidders List.

16-26    (a)  The commission shall maintain a centralized master bidders

16-27    list and annually register on the list the name and address of each

 17-1    vendor that applies for registration under rules adopted under this

 17-2    subchapter.  The commission may include other relevant vendor

 17-3    information on the list.

 17-4          (b)  The commission shall maintain the master bidders list in

 17-5    a manner that facilitates a state agency's solicitation of vendors

 17-6    that serve the agency's geographic area.

 17-7          (c)  The master bidders list shall be used for all available

 17-8    procurement processes authorized by this Subtitle and shall be used

 17-9    by state agencies that are otherwise exempt from the commission's

17-10    purchasing authority.

17-11          SECTION 13.  Section 2155.441, Government Code, is amended to

17-12    read as follows:

17-13          Sec. 2155.441.  Preference for Products of Persons With

17-14    Mental Retardation and Physical Disabilities.  The products of

17-15    workshops, organizations, or corporations whose primary purpose is

17-16    training and employing individuals having mental retardation or a

17-17    physical disability shall be given preference if they meet state

17-18    specifications regarding quantity, quality, delivery, life cycle

17-19    cost and price.  The workshops, organizations or corporations shall

17-20    test the products in accordance with Section 2155.069, Government

17-21    Code, to ensure quality based on considerations of the product,

17-22    purchase price, its life cycle cost and delivery performance, and

17-23    may enter into contracts with a private or public entity to assist

17-24    with testing.  The commission shall consider best value for

17-25    products purchased under this section.

17-26          SECTION 14.  Section 2156.005, Government Code, is amended to

17-27    read as follows:

 18-1          Sec. 2156.005.  Bid Submission and Opening; Public

 18-2    Inspection.  (a)  A bidder must submit a sealed bid to the

 18-3    commission or state agency making a purchase.  The bid must be

 18-4    identified on the envelope.

 18-5          (b)  The commission or state agency making a purchase shall

 18-6    open bids at the time and place stated in the invitation to bid.

 18-7          [(c)  The state auditor or a member of the state auditor's

 18-8    staff may be present at a bid opening.]

 18-9          (c) [(d)]  The commission shall keep a tabulation of all bids

18-10    received and administered by the commission available for public

18-11    inspection under rules adopted by the commission.  State agencies

18-12    making purchases shall adopt the commission's regulations related

18-13    to bid opening and tabulation.

18-14          SECTION 15.  Section 2156.007, Government Code, is amended to

18-15    read as follows:

18-16          Sec. 2156.007.  Contract Award.  (a)  The commission or state

18-17    agency making a purchase shall award a contract to the bidder

18-18    offering the best value to the state while [submitting the lowest

18-19    and best bid] conforming to the specifications required.

18-20          (b)  In determining the [lowest and best] bidder offering the

18-21    best value and meeting specifications, the commission or state

18-22    agency may consider the safety record of the bidder, the entity

18-23    represented by the bidder, and any person acting for the

18-24    represented entity only if:

18-25                (1)  the commission or state agency has adopted a

18-26    written definition and criteria for accurately determining the

18-27    safety record of a bidder; and

 19-1                (2)  the commission or state agency provided [gave]

 19-2    notice in the bid specifications to prospective bidders that a

 19-3    bidder's safety record may be considered in determining the [lowest

 19-4    and best] bidder offering the best value to the state.

 19-5          (c)  A determination of a bidder's safety record may not be

 19-6    arbitrary and capricious.

 19-7          (d)  In determining the [lowest] bidder offering the best

 19-8    value and meeting specifications [and best bidder], in addition to

 19-9    price, the commission or state agency shall consider:

19-10                (1)  the quality and availability of the goods or

19-11    contractual services and their adaptability to the use required;

19-12                (2)  the [number and] scope of conditions attached to

19-13    the bid;

19-14                (3)  the bidder's ability, capacity, and skill to

19-15    perform the contract or provide the service required;

19-16                (4)  the bidder's ability to perform the contract or

19-17    provide the service promptly, or in the time required, without

19-18    delay or interference;

19-19                (5)  the bidder's character, responsibility, integrity,

19-20    [reputation,] and experience;

19-21                (6)  the quality of performance of previous contracts

19-22    or services;

19-23                (7)  the bidder's previous and existing compliance with

19-24    laws relating to the contract or service;

19-25                (8)  the bidder's previous or existing noncompliance

19-26    with specification requirements relating to the time of submission

19-27    of specified information, including samples, models, drawings, or

 20-1    certificates;

 20-2                (9)  the sufficiency of the bidder's financial

 20-3    resources and ability to perform the contract or provide the

 20-4    service; and

 20-5                (10)  the bidder's ability to provide future

 20-6    maintenance, repair parts, and service for the use of the

 20-7    contract's subject.

 20-8          SECTION 16.  Sections 2156.008-2156.010, Government Code, are

 20-9    amended to read as follows:

20-10          Sec. 2156.008.  Rejection of Bids.  (a)  The commission or

20-11    state agency making the purchase shall reject a bid in which there

20-12    is a material failure to comply with specification requirements.

20-13          (b)  The commission or state agency making the purchase may

20-14    reject all bids or parts of bids if the rejection serves the

20-15    state's interest.

20-16          Sec. 2156.009.  Reasons for Award.  On award of a contract,

20-17    the division of the commission responsible for purchasing or the

20-18    state agency making the purchase shall prepare and file with other

20-19    records relating to the transaction a statement of the reasons for

20-20    making the award to the successful bidder and the factors

20-21    considered in determining which bidder offered the best value for

20-22    the state [the lowest and best bid].

20-23          Sec. 2156.010.  Tie Bids.  In the case of tie bids, the value

20-24    and cost to the state [quality and service] being equal, a contract

20-25    shall be awarded under commission rules.

20-26          SECTION 17.  Sections 2156.062-2156.063, Government Code, are

20-27    amended to read as follows:

 21-1          Sec. 2156.062.  Minimum Number and Evaluation of Bids.  All

 21-2    purchases using a competitive bidding process [An open market

 21-3    purchase] shall, to the extent possible, be:

 21-4                (1)  based on at least three competitive bids; and

 21-5                (2)  awarded to the [lowest and best] bidder offering

 21-6    the best value to the state in accordance with standards set forth

 21-7    in Chapters 2155, 2156, 2157, and 2158.

 21-8          Sec. 2156.063.  Solicitation of Bids.  The commission and

 21-9    each agency making a purchase shall solicit bids under this

21-10    subchapter by direct mail, telephone, or telegraph.

21-11          SECTION 18.  Section 2156.065, Government Code, is amended to

21-12    read as follows:

21-13          Sec. 2156.065.  Agency Review of Bids.  (a)  Upon [On] the

21-14    request of a state agency to review the bids on a purchase

21-15    administered by the commission, the commission shall send or make

21-16    available to the requesting agency copies of each bid received and

21-17    the commission's recommended award.

21-18          (b)  If, after review of the bids and evaluation of the

21-19    quality of goods or services offered in the bids, the state agency

21-20    determines that the bid selected by the commission does [is] not

21-21    offer the best value for the state [the lowest and best bid], the

21-22    agency may file with the commission a written recommendation that

21-23    the award be made to the bidder who, according to the agency's

21-24    determination, offers the best value for the state [made the lowest

21-25    and best bid].  The agency recommendation must include a

21-26    justification of the agency's determination.

21-27          (c)  The commission shall consider, but is not bound by, the

 22-1    agency recommendation in making the award.

 22-2          SECTION 19.  Section 2156.066, Government Code, is amended to

 22-3    read as follows:

 22-4          Sec. 2156.066.  Statement of Reasons for Award.  The division

 22-5    of the commission responsible for purchasing or the state agency

 22-6    making a purchase shall prepare and file with other records

 22-7    relating to a transaction under this subchapter a statement of the

 22-8    reasons for placing an order with a successful bidder for the

 22-9    transaction and the factors considered in determining the [lowest

22-10    and best] bid offering the best value for the state [for the

22-11    transaction].

22-12          SECTION 20.  Section 2157.003, Government Code, is amended to

22-13    read as follows:

22-14          Sec. 2157.003.  DETERMINING BEST VALUE FOR PURCHASES OF

22-15    AUTOMATED INFORMATION SYSTEMS.  (a)  "Best value," for purposes of

22-16    this chapter, means the lowest overall cost of an automated

22-17    information system.  In determining the lowest overall cost for a

22-18    purchase or lease of an automated information system under this

22-19    chapter, the commission or a state agency shall consider factors

22-20    including:

22-21                (1)  the purchase price;

22-22                (2)  the compatibility to facilitate the exchange of

22-23    existing data;

22-24                (3)  the capacity for expanding and upgrading to more

22-25    advanced levels of technology;

22-26                (4)  quantitative reliability factors;

22-27                (5)  the level of training required to bring persons

 23-1    using the system to a stated level of proficiency;

 23-2                (6)  the technical support requirements for the

 23-3    maintenance of data across a network platform and the management of

 23-4    the network's hardware and software; and

 23-5                (7)  the compliance with applicable Department of

 23-6    Information Resources statewide standards validated by criteria

 23-7    adopted by the department by rule.

 23-8          (b)  In using "best value" as defined in this Section, the

 23-9    commission or state agency making a purchase shall also comply with

23-10    Section 2155.074(c) and 2155.075, Government Code.

23-11          SECTION 21.  Section 2157.0611, Government Code, is added to

23-12    read as follows:

23-13          Sec. 2157.0611.  MINIMUM NUMBER OF AUTOMATED INFORMATION

23-14    SYSTEMS TO BE CONSIDERED.  A catalogue purchase shall, to the

23-15    extent possible, be:

23-16                (1)  based on at least three catalogue proposals

23-17    provided by qualified information system vendors; and

23-18                (2)  when three catalogue proposals are not available

23-19    for consideration, the commission or state agency making the

23-20    purchase must document why three catalogue entries are not

23-21    available prior to proceeding under Section 2157.063, Government

23-22    Code.

23-23          SECTION 22.  Section 2157.121, Government Code, is amended to

23-24    read as follows:

23-25          Sec. 2157.121.  Acquisition Through Competitive Sealed

23-26    Proposals.  (a)  The commission or state agency making a purchase

23-27    may acquire goods and services [a telecommunications device,

 24-1    system, or service or automated information system] by using

 24-2    competitive sealed proposals if the commission determines [by rule]

 24-3    that competitive sealed bidding and informal competitive bidding

 24-4    are not practical or are disadvantageous to the state.

 24-5          (b)  The requesting agency shall consult and receive approval

 24-6    from the commission to develop specifications for a competitive

 24-7    sealed proposal process and review criteria for a request for

 24-8    competitive sealed proposals under this chapter.

 24-9          SECTION 23.  Sections 2157.122-2157.125, Government Code, are

24-10    amended to read as follows:

24-11          Sec. 2157.122.  Solicitation of Proposals; Public Notice.

24-12    The commission or state agency making a purchase shall:

24-13                (1)  solicit proposals under this subchapter by a

24-14    request for proposals; and

24-15                (2)  give public notice of the request in the manner

24-16    provided for requests for bids under Subchapter B, Chapter 2156.

24-17          Sec. 2157.123.  Opening and Filing Proposals; Public

24-18    Inspection.  (a)  The commission or state agency making a purchase

24-19    shall avoid disclosing the contents of each proposal on opening the

24-20    proposal and during negotiations with competing offerors.

24-21          (b)  The commission or state agency shall file each proposal

24-22    in a register of proposals, which, after a contract is awarded, is

24-23    open for public inspection unless the register contains information

24-24    that is excepted from disclosure [as an open record] under

24-25    Subchapter C, Chapter 552.

24-26          Sec. 2157.124.  Discussion and Revision of Proposal.  (a)  As

24-27    provided by a request for proposals and under commission rules, the

 25-1    commission or state agency making a purchase may discuss an

 25-2    acceptable or potentially acceptable proposal with an offer or to

 25-3    assess the offeror's ability to meet the solicitation requirements.

 25-4    When the commission is managing the request for proposal process,

 25-5    it [and] shall invite a requisitioning agency to participate in

 25-6    discussions conducted under this section.

 25-7          (b)  After receiving a proposal but before making an award,

 25-8    the commission or state agency may permit an offeror to revise a

 25-9    proposal to obtain the best final offer.

25-10          (c)  The commission or state agency may not disclose

25-11    information derived from a proposal submitted by a competing

25-12    offeror in conducting discussions under this section.

25-13          (d)  The commission or state agency shall provide each

25-14    offeror an equal opportunity to discuss and revise proposals.

25-15          Sec. 2157.125.  Contract Award; Factors Considered.  (a)  The

25-16    commission or state agency making a purchase shall make a written

25-17    award of a purchase or lease to the offeror whose proposal under

25-18    this subchapter offers [is] the best value for [most advantageous

25-19    to] the state, considering price, past vendor performance, vendor

25-20    experience, and the evaluation factors in the request for

25-21    proposals.

25-22          (b)  The commission or state agency shall refuse all offers

25-23    if no offer submitted is acceptable.

25-24          (c)  In determining which [whether a] proposal under this

25-25    subchapter offers the best value for [is most advantageous to] the

25-26    state, the commission or state agency shall consider factors

25-27    including:

 26-1                (1)  the [installation] cost;

 26-2                (2)  the overall life of the goods [system or

 26-3    equipment];

 26-4                (3)  the cost of acquisition, operation, and

 26-5    maintenance [of hardware included with,] associated with[, or

 26-6    required for] the goods [system or equipment] during the state's

 26-7    ownership or lease;

 26-8                (4)  the cost of acquisition, operation, and

 26-9    maintenance of software included with, associated with, or required

26-10    for a proposed automated information [the] system or item of

26-11    equipment during the state's ownership or lease;

26-12                (5)  the estimated cost of other supplies needed

26-13    because of the acquisition;

26-14                (6)  the estimated cost of employee training needed

26-15    because of the acquisition;

26-16                (7)  the estimated cost of necessary additional

26-17    permanent employees because of the acquisition; and

26-18                (8)  the estimated increase in employee productivity

26-19    because of the acquisition.

26-20          (d)  The commission or state agency shall state in writing in

26-21    the contract file the reasons for making an award.

26-22          SECTION 24.  Section 2162.106, Government Code, is amended to

26-23    read as follows:

26-24          Sec. 2162.106.  PERSONNEL DEVELOPMENT STUDY.  (a)  The state

26-25    auditor and the advisory committee on procurement established by

26-26    this Title shall study how the classification levels of state

26-27    agency purchasing personnel should be revised to reflect the

 27-1    increased levels of responsibility and accountability given to

 27-2    state agency purchasing personnel under the changes in law made by

 27-3    this Act.  The state auditor and the committee should consider how

 27-4    best to provide purchasing personnel with a pay scale and a career

 27-5    path, including goals, incentives, and initiatives, commensurate

 27-6    with the purchaser's knowledge, authority, and responsibility.

 27-7          (b)  The state auditor and the committee shall present their

 27-8    written recommendations and the results of their study to the

 27-9    legislature not later than January 1, 1999.

27-10          SECTION 25.  Section 2101.038, Government Code, is amended to

27-11    read as follows:

27-12          Sec. 2101.038.  Duties of the State Auditor.  The state

27-13    auditor, when reviewing the operation of a state agency, shall

27-14    audit for compliance with the uniform statewide accounting system,

27-15    the comptroller's rules, [and] the Legislative Budget Board's

27-16    performance and workload measures, and compliance with the

27-17    practices of Subtitle D of this Title for those agencies with

27-18    purchasing authority exempted from direct commission jurisdiction.

27-19    The state auditor shall notify the project advisory committee, the

27-20    controller, the governor, the Lieutenant Governor, Speaker of the

27-21    House and the Legislative Budget Board as soon as practicable when

27-22    a state agency is not in compliance.

27-23          SECTION 26.  Section 496.051, Government Code, is amended to

27-24    read as follows:

27-25          Sec. 496.051.  Purchasing Procedures.  (a)  The department

27-26    shall comply with any special purchasing procedures requiring

27-27    competitive review under the State Purchasing and General Services

 28-1    Act (Article 601b, Vernon's Texas Civil Statutes).  The department

 28-2    shall test the goods and services that it purchases in accordance

 28-3    with Section 2155.069, Government Code, and may enter into a

 28-4    contract with a private or public entity to assist with testing.

 28-5          (b)  The board may authorize the executive director to adopt

 28-6    policies allowing the institutional division to purchase directly

 28-7    or at public auction livestock, agricultural commodities,

 28-8    agricultural or industrial equipment, supplies, and raw materials

 28-9    for agricultural or industrial production, breeding, consumption,

28-10    or resale, if the division determines that the purchase is

28-11    economically advantageous to the division.  The State Purchasing

28-12    and General Services Act (Article 601b, Vernon's Texas Civil

28-13    Statutes) does not apply to purchases made under this subsection.

28-14    The institutional division shall notify the General Services

28-15    Commission as soon as practicable of a purchase made under this

28-16    subsection and the purchase price.

28-17          (c)  To carry out Subsection (b), the industrial and

28-18    agricultural fund is created.  The fund must be deposited in a

28-19    local bank.  The fund may be expended only for purchases under

28-20    Subsection (b). Unexpended balances of the fund must be carried

28-21    forward from fiscal year to fiscal year.

28-22          SECTION 27.  Section 122.007, Human Resources Code, is

28-23    amended to read as follows:

28-24          Sec. 122.007.  Fair Market Price; Purchasing Procedure.  (a)

28-25    The council shall ensure best value according to Section 2155.077,

28-26    Government Code, and determine the fair market price of all

28-27    products and services manufactured or provided by persons with

 29-1    disabilities and offered for sale to the various agencies and

 29-2    departments of the state and its political subdivisions by a

 29-3    community rehabilitation program.

 29-4          (b)  A subcommittee composed of three council members

 29-5    appointed by the presiding officer shall ensure best value

 29-6    according to Section 2155.077, Government Code, and review the data

 29-7    used to determine fair market price and shall make recommendations

 29-8    to the council concerning fair market price for products and

 29-9    services.

29-10          (c)  The council shall revise the prices periodically to

29-11    reflect changing market conditions.

29-12          (d)  Prior to offering for sale to the various state agencies

29-13    products and services manufactured or provided by persons with

29-14    disabilities, the council shall test the goods and services in

29-15    accordance with Section 2155.069, Government Code, to the extent

29-16    necessary to ensure quality.  The council may enter into a contract

29-17    with a private or public entity to assist with testing.  The

29-18    commission shall consider best value and the price for goods and

29-19    services purchased under this section.

29-20          (e)  Requisitions for products and services required by state

29-21    agencies are processed by the commission according to rules

29-22    established by the commission.

29-23          SECTION 28.  Depending on the results of the feasibility

29-24    study authorized in Section 2177.103, Government Code, the General

29-25    Services Commission shall phase in, subject to available

29-26    appropriations, the changed in law make by this Act relating to the

29-27    establishment of an electronic marketplace and network systems.

 30-1          SECTION 29.  Sections 2155.067(e), 2156.121-2156.130,

 30-2    Government Code, are repealed.

 30-3          SECTION 30.  This Act shall take effect on September 1, 1997.

 30-4          SECTION 31.  The importance of this legislation and the

 30-5    crowded condition of the calendars in both houses create an

 30-6    emergency and an imperative public necessity that the

 30-7    constitutional rule requiring bills to be read on three several

 30-8    days in each house be suspended, and this rule is hereby suspended.