AN ACT
1-1 relating to procurement practices by health and human services
1-2 agencies, by certain other agencies with programs related to health
1-3 or human services, and by certain public and private local
1-4 providers of health or human services.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Subchapter C, Chapter 2155, Government Code, is
1-7 amended by adding Section 2155.144 to read as follows:
1-8 Sec. 2155.144. PROCUREMENTS BY HEALTH AND HUMAN SERVICES
1-9 AGENCIES. (a) This section applies only to the Health and Human
1-10 Services Commission and to each health and human services agency.
1-11 (b) An agency to which this section applies is delegated the
1-12 authority to procure its goods and services, except as provided by
1-13 this section.
1-14 (c) An agency to which this section applies shall acquire
1-15 goods or services by any procurement method approved by the Health
1-16 and Human Services Commission that provides the best value to the
1-17 agency. The agency shall document that it considered all relevant
1-18 factors under Subsection (d) in making the acquisition.
1-19 (d) Subject to Subsection (e), the agency may consider all
1-20 relevant factors in determining the best value, including:
1-21 (1) any installation costs;
1-22 (2) the delivery terms;
1-23 (3) the quality and reliability of the vendor's goods
2-1 or services;
2-2 (4) the extent to which the goods or services meet the
2-3 agency's needs;
2-4 (5) indicators of probable vendor performance under
2-5 the contract such as past vendor performance, the vendor's
2-6 financial resources and ability to perform, the vendor's experience
2-7 and responsibility, and the vendor's ability to provide reliable
2-8 maintenance agreements;
2-9 (6) the impact on the ability of the agency to comply
2-10 with laws and rules relating to historically underutilized
2-11 businesses or relating to the procurement of goods and services
2-12 from persons with disabilities;
2-13 (7) the total long-term cost to the agency of
2-14 acquiring the vendor's goods or services;
2-15 (8) the cost of any employee training associated with
2-16 the acquisition;
2-17 (9) the effect of an acquisition on agency
2-18 productivity;
2-19 (10) the acquisition price; and
2-20 (11) any other factor relevant to determining the best
2-21 value for the agency in the context of a particular acquisition.
2-22 (e) If an agency to which this section applies acquires
2-23 goods or services with a value that exceeds $100,000, the agency
2-24 shall notify the state auditor and shall consult with and receive
2-25 approval from the Health and Human Services Commission before
3-1 considering factors other than price and meeting specifications.
3-2 (f) The state auditor may audit the agency's acquisitions of
3-3 goods and services before or after a warrant is issued to pay for
3-4 an acquisition.
3-5 (g) The agency may adopt rules and procedures for the
3-6 acquisition of goods and services under this section.
3-7 (h) The Health and Human Services Commission shall adopt
3-8 rules and procedures for the acquisition of goods and services
3-9 under this section that apply to all health and human services
3-10 agencies, including rules adopted with the commission's assistance
3-11 that allow an agency to make purchases through a group purchasing
3-12 program except when a better value is available through another
3-13 procurement method. The rules of the health and human services
3-14 agencies must be consistent with the rules of the Health and Human
3-15 Services Commission.
3-16 (i) The Health and Human Services Commission shall
3-17 coordinate the procurement practices of all health and human
3-18 services agencies and encourage those agencies to use efficient
3-19 procurement practices such as the use of a group purchasing
3-20 program, combining maintenance contracts into one contract, and
3-21 obtaining prompt payment discounts. The Health and Human Services
3-22 Commission may transfer the procurement functions of a health and
3-23 human services agency to another appropriate state agency if it
3-24 determines that transferring those functions would be advantageous
3-25 to the state. Other state agencies and institutions with
4-1 experience in acquiring goods and services using the procedures
4-2 allowed under Subsections (c) and (d) shall on request assist the
4-3 Health and Human Services Commission to perform its functions under
4-4 this section.
4-5 (j) To the extent of any conflict, this section prevails
4-6 over any other state law relating to the procurement of goods and
4-7 services except a law relating to contracting with historically
4-8 underutilized businesses or relating to the procurement of goods
4-9 and services from persons with disabilities.
4-10 (k) In this section, "health and human services agency" has
4-11 the meaning assigned by Section 531.001.
4-12 SECTION 2. Subchapter B, Chapter 32, Human Resources Code,
4-13 is amended by adding Sections 32.043 and 32.044 to read as follows:
4-14 Sec. 32.043. PROCUREMENT RULES FOR PUBLIC DISPROPORTIONATE
4-15 SHARE HOSPITALS. (a) A public hospital that is designated as a
4-16 disproportionate share hospital during a fiscal year may acquire
4-17 goods and services in accordance with this section during the
4-18 succeeding fiscal year. A procurement of goods or services made in
4-19 accordance with this section is considered to satisfy any state law
4-20 requiring purchases by competitive bidding or competitive
4-21 proposals.
4-22 (b) The public hospital shall acquire goods or services by
4-23 any procurement method approved by the Health and Human Services
4-24 Commission that provides the best value to the public hospital.
4-25 The public hospital shall document that it considered all relevant
5-1 factors under Subsection (c) in making the acquisition.
5-2 (c) The public hospital may consider all relevant factors in
5-3 determining the best value, including:
5-4 (1) any installation costs;
5-5 (2) the delivery terms;
5-6 (3) the quality and reliability of the vendor's goods
5-7 or services;
5-8 (4) the extent to which the goods or services meet the
5-9 public hospital's needs;
5-10 (5) indicators of probable vendor performance under
5-11 the contract such as past vendor performance, the vendor's
5-12 financial resources and ability to perform, the vendor's experience
5-13 and responsibility, and the vendor's ability to provide reliable
5-14 maintenance agreements;
5-15 (6) the impact on the ability of the public hospital
5-16 to comply with laws and rules relating to historically
5-17 underutilized businesses or relating to the procurement of goods
5-18 and services from persons with disabilities;
5-19 (7) the total long-term cost to the public hospital of
5-20 acquiring the vendor's goods or services;
5-21 (8) the cost of any employee training associated with
5-22 the acquisition;
5-23 (9) the effect of an acquisition on the public
5-24 hospital's productivity;
5-25 (10) the acquisition price; and
6-1 (11) any other factor relevant to determining the best
6-2 value for the public hospital in the context of a particular
6-3 acquisition.
6-4 (d) The state auditor or the department may audit the public
6-5 hospital's acquisitions of goods and services to the extent that
6-6 state money or federal money appropriated by the state is used to
6-7 acquire the goods and services.
6-8 (e) The public hospital may adopt rules and procedures for
6-9 the acquisition of goods and services under this section.
6-10 Sec. 32.044. GROUP PURCHASING FOR DISPROPORTIONATE SHARE
6-11 HOSPITALS. (a) A public or private hospital that is designated as
6-12 a disproportionate share hospital during a fiscal year may purchase
6-13 goods and services in accordance with this section during the
6-14 succeeding fiscal year. A purchase of goods or services made in
6-15 accordance with this section is considered to satisfy any state law
6-16 requiring purchases by competitive bidding or competitive
6-17 proposals.
6-18 (b) A state or local governmental entity may allow the
6-19 public or private hospital to purchase goods or services by
6-20 participating in one or more of the entity's contracts for the
6-21 purchase of goods or services.
6-22 (c) The public or private hospital may purchase goods or
6-23 services in accordance with this section through a group purchasing
6-24 program that offers discount prices to hospitals or other providers
6-25 of health care services.
7-1 (d) The department with the assistance of the Health and
7-2 Human Services Commission and the General Services Commission shall
7-3 adopt rules under this section that allow the public or private
7-4 hospital to make purchases through group purchasing programs except
7-5 when the department has reason to believe that a better value is
7-6 available through another procurement method.
7-7 (e) This section applies to private hospitals only to the
7-8 extent it authorizes private hospitals to participate in purchasing
7-9 contracts with governmental entities or to satisfy any state law
7-10 that may require goods and services the hospital purchases to be
7-11 competitively procured. This section does not impose new
7-12 purchasing requirements on a private hospital, except to the extent
7-13 that the private hospital agrees to be bound by the terms of a
7-14 contract that is authorized by this section and that it chooses to
7-15 enter. This section does not affect any explicit or implicit
7-16 authority that a private hospital has under other law to
7-17 participate in a group purchasing program or to participate in a
7-18 purchasing contract with a public entity.
7-19 SECTION 3. Subsections (a) and (b), Section 12.052, Health
7-20 and Safety Code, are amended to read as follows:
7-21 (a) The expenditure of funds received by local units of
7-22 government from the department is governed by Chapter 783,
7-23 Government Code, [the Uniform Grant and Contract Management Act of
7-24 1981 (Article 4413(32g), Vernon's Texas Civil Statutes)] and the
7-25 rules adopted under that law, except as provided by Section 12.055
8-1 [Act].
8-2 (b) The expenditure of funds received by other state
8-3 agencies from the department is governed by Subtitle D, Title 10,
8-4 Government Code, [the State Purchasing and General Services Act
8-5 (Article 601b, Vernon's Texas Civil Statutes)] and the rules
8-6 adopted under that law, except as provided by Section 12.055 [Act].
8-7 SECTION 4. Subchapter E, Chapter 12, Health and Safety Code,
8-8 is amended by adding Sections 12.055 and 12.056 to read as follows:
8-9 Sec. 12.055. CERTAIN PROCUREMENTS MADE WITH DEPARTMENT
8-10 FUNDS. (a) A state agency or local unit of government that
8-11 expends funds received from the department for the acquisition of
8-12 goods and services may satisfy the requirements of Section 12.052
8-13 or of another state law requiring procurements by competitive
8-14 bidding or competitive sealed proposals by procuring goods or
8-15 services with those funds in accordance with Section 12.056 or in
8-16 accordance with:
8-17 (1) Section 2155.144, Government Code, if the entity
8-18 is a state agency subject to that law;
8-19 (2) Section 32.043 or 32.044, Human Resources Code, if
8-20 the entity is a public hospital subject to those laws; or
8-21 (3) this section, if the entity is not covered by
8-22 Subdivision (1) or (2).
8-23 (b) A state agency or local unit of government under
8-24 Subsection (a)(3) shall acquire goods or services by any
8-25 procurement method approved by the Health and Human Services
9-1 Commission that provides the best value to the state agency or
9-2 local unit of government. The state agency or local unit of
9-3 government shall document that the state agency or local unit of
9-4 government considered all relevant factors under Subsection (c) in
9-5 making the acquisition.
9-6 (c) Subject to Subsection (d), the state agency or local
9-7 unit of government may consider all relevant factors in determining
9-8 the best value, including:
9-9 (1) any installation costs;
9-10 (2) the delivery terms;
9-11 (3) the quality and reliability of the vendor's goods
9-12 or services;
9-13 (4) the extent to which the goods or services meet the
9-14 state agency's or local unit of government's needs;
9-15 (5) indicators of probable vendor performance under
9-16 the contract such as past vendor performance, the vendor's
9-17 financial resources and ability to perform, the vendor's experience
9-18 and responsibility, and the vendor's ability to provide reliable
9-19 maintenance agreements;
9-20 (6) the impact on the ability of the state agency or
9-21 local unit of government to comply with laws and rules relating to
9-22 historically underutilized businesses or relating to the
9-23 procurement of goods and services from persons with disabilities;
9-24 (7) the total long-term cost to the state agency or
9-25 local unit of government of acquiring the vendor's goods or
10-1 services;
10-2 (8) the cost of any employee training associated with
10-3 the acquisition;
10-4 (9) the effect of an acquisition on the state agency's
10-5 or local unit of government's productivity;
10-6 (10) the acquisition price; and
10-7 (11) any other factor relevant to determining the best
10-8 value for the state agency or local unit of government in the
10-9 context of a particular acquisition.
10-10 (d) If a state agency to which this section applies acquires
10-11 goods or services with a value that exceeds $100,000, the state
10-12 agency shall consult with and receive approval from the Health and
10-13 Human Services Commission before considering factors other than
10-14 price and meeting specifications.
10-15 (e) The state auditor or the department may audit the state
10-16 agency's or local unit of government's acquisitions of goods and
10-17 services under this section.
10-18 (f) The state agency or local unit of government may adopt
10-19 rules and procedures for the acquisition of goods and services
10-20 under this section.
10-21 Sec. 12.056. PARTICIPATION IN DEPARTMENT PURCHASING
10-22 CONTRACTS OR GROUP PURCHASING PROGRAM. The department may allow a
10-23 state agency, local unit of government, or private entity that
10-24 expends funds received by the department to purchase goods or
10-25 services using those funds by participating in:
11-1 (1) a contract the department has made to purchase
11-2 goods or services; or
11-3 (2) a group purchasing program established or
11-4 designated by the department that offers discounts to providers of
11-5 health services.
11-6 SECTION 5. Subchapter A, Chapter 533, Health and Safety
11-7 Code, is amended by adding Sections 533.016 and 533.017 to read as
11-8 follows:
11-9 Sec. 533.016. CERTAIN PROCUREMENTS OF GOODS AND SERVICES BY
11-10 SERVICE PROVIDERS. (a) A state agency, local agency, local mental
11-11 health authority, or local mental retardation authority that
11-12 expends public money to acquire goods or services in connection
11-13 with providing or coordinating the provision of mental health or
11-14 mental retardation services may satisfy the requirements of any
11-15 state law requiring procurements by competitive bidding or
11-16 competitive sealed proposals by procuring goods or services with
11-17 the public money in accordance with Section 533.017 or in
11-18 accordance with:
11-19 (1) Section 2155.144, Government Code, if the entity
11-20 is a state agency subject to that law;
11-21 (2) Section 32.043 or 32.044, Human Resources Code, if
11-22 the entity is a public hospital subject to those laws; or
11-23 (3) this section, if the entity is not covered by
11-24 Subdivision (1) or (2).
11-25 (b) An agency or authority under Subsection (a)(3) may
12-1 acquire goods or services by any procurement method that provides
12-2 the best value to the agency or authority. The agency or authority
12-3 shall document that the agency or authority considered all relevant
12-4 factors under Subsection (c) in making the acquisition.
12-5 (c) Subject to Subsection (d), the agency or authority may
12-6 consider all relevant factors in determining the best value,
12-7 including:
12-8 (1) any installation costs;
12-9 (2) the delivery terms;
12-10 (3) the quality and reliability of the vendor's goods
12-11 or services;
12-12 (4) the extent to which the goods or services meet the
12-13 agency's or authority's needs;
12-14 (5) indicators of probable vendor performance under
12-15 the contract such as past vendor performance, the vendor's
12-16 financial resources and ability to perform, the vendor's experience
12-17 and responsibility, and the vendor's ability to provide reliable
12-18 maintenance agreements;
12-19 (6) the impact on the ability of the agency or
12-20 authority to comply with laws and rules relating to historically
12-21 underutilized businesses or relating to the procurement of goods
12-22 and services from persons with disabilities;
12-23 (7) the total long-term cost to the agency or
12-24 authority of acquiring the vendor's goods or services;
12-25 (8) the cost of any employee training associated with
13-1 the acquisition;
13-2 (9) the effect of an acquisition on the agency's or
13-3 authority's productivity;
13-4 (10) the acquisition price; and
13-5 (11) any other factor relevant to determining the best
13-6 value for the agency or authority in the context of a particular
13-7 acquisition.
13-8 (d) If a state agency to which this section applies acquires
13-9 goods or services with a value that exceeds $100,000, the state
13-10 agency shall consult with and receive approval from the Health and
13-11 Human Services Commission before considering factors other than
13-12 price and meeting specifications.
13-13 (e) The state auditor or the department may audit the
13-14 agency's or authority's acquisitions of goods and services under
13-15 this section to the extent state money or federal money
13-16 appropriated by the state is used to make the acquisitions.
13-17 (f) The agency or authority may adopt rules and procedures
13-18 for the acquisition of goods and services under this section.
13-19 Sec. 533.017. PARTICIPATION IN DEPARTMENT PURCHASING
13-20 CONTRACTS OR GROUP PURCHASING PROGRAM. The department may allow a
13-21 state agency, local agency, local mental health authority, or local
13-22 mental retardation authority that expends public money to purchase
13-23 goods or services in connection with providing or coordinating the
13-24 provision of mental health or mental retardation services to
13-25 purchase goods or services with the public money by participating
14-1 in:
14-2 (1) a contract the department has made to purchase
14-3 goods or services; or
14-4 (2) a group purchasing program established or
14-5 designated by the department that offers discounts to providers of
14-6 mental health or mental retardation services.
14-7 SECTION 6. This Act takes effect September 1, 1997.
14-8 SECTION 7. The importance of this legislation and the
14-9 crowded condition of the calendars in both houses create an
14-10 emergency and an imperative public necessity that the
14-11 constitutional rule requiring bills to be read on three several
14-12 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1066 passed the Senate on
May 5, 1997, by a viva-voce vote; and that the Senate concurred in
House amendments on May 29, 1997, by a viva-voce vote.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1066 passed the House, with
amendments, on May 28, 1997, by a non-record vote.
_______________________________
Chief Clerk of the House
Approved:
_______________________________
Date
_______________________________
Governor