76R12266 JRD-F
By Oliveira, Dukes H.B. No. 3032
Substitute the following for H.B. No. 3032:
By Wolens C.S.H.B. No. 3032
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to historically underutilized businesses; providing a
1-3 penalty.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 2155.074(g), Government Code, as added by
1-6 Chapter 508, Acts of the 75th Legislature, Regular Session, 1997,
1-7 is amended to read as follows:
1-8 (g) A state agency shall post in the business daily either
1-9 the entire bid or proposal solicitation package or a notice that
1-10 includes all information necessary to make a successful bid,
1-11 proposal, or other applicable expression of interest for the
1-12 procurement contract, including at a minimum the following
1-13 information for each procurement that the state agency will make
1-14 that is estimated to exceed $25,000 in value:
1-15 (1) a clear and complete [brief] description of the
1-16 goods or services to be procured and any applicable state product
1-17 or service codes for the goods and services;
1-18 (2) the last date on which bids, proposals, or other
1-19 applicable expressions of interest will be accepted;
1-20 (3) the estimated quantity of goods or services to be
1-21 procured;
1-22 (4) if applicable, the previous price paid by the
1-23 state agency for the same or similar goods or services;
1-24 (5) the estimated date on which the goods or services
2-1 to be procured will be needed; and
2-2 (6) the name, business mailing address, and business
2-3 telephone number of the state agency employee a person may contact
2-4 to inquire about [obtain] all necessary information related to
2-5 making a bid or proposal or other applicable expression of
2-6 interest for the procurement contract.
2-7 SECTION 2. Subchapter A, Chapter 2161, Government Code, is
2-8 amended by adding Section 2161.0015 to read as follows:
2-9 Sec. 2161.0015. DETERMINING SIZE STANDARDS FOR HISTORICALLY
2-10 UNDERUTILIZED BUSINESSES. The commission may establish size
2-11 standards that a business may not exceed if it is to be considered
2-12 a historically underutilized business under this chapter. In
2-13 determining the size standards, the commission shall determine the
2-14 size at which a business should be considered sufficiently large
2-15 that the business probably does not significantly suffer from the
2-16 effects of past discriminatory practices.
2-17 SECTION 3. Subchapter A, Chapter 2161, Government Code, is
2-18 amended by adding Section 2161.003 to read as follows:
2-19 Sec. 2161.003. REVOCATION OR TRANSFER OF PURCHASING
2-20 AUTHORITY. In preparing the consolidated yearly report under
2-21 Section 2161.121 regarding the historically underutilized business
2-22 program during the preceding state fiscal year, the commission
2-23 shall include information for each state agency to reflect whether
2-24 the agency substantially failed to meet during the preceding fiscal
2-25 year the applicable historically underutilized business contracting
2-26 goals established by this chapter and by rules of the commission.
2-27 The legislature shall consider this information in determining
3-1 whether to revoke by law any purchasing authority that the
3-2 commission has delegated to a state agency or to appropriate to
3-3 another agency the funds used for an agency's purchases.
3-4 SECTION 4. Sections 2161.061(b) and (c), Government Code,
3-5 are amended to read as follows:
3-6 (b) As one [part] of its certification procedures, the
3-7 commission may:
3-8 (1) approve the [another] certification program of one
3-9 or more local governments in this state that certify [certifies]
3-10 historically underutilized businesses, minority business
3-11 enterprises, women's business enterprises, or disadvantaged
3-12 business enterprises under substantially the same definition, to
3-13 the extent applicable, used by Section 2161.001; and
3-14 (2) certify a business certified under the local
3-15 government program as a historically underutilized business under
3-16 this chapter.
3-17 (c) To maximize the number of certified historically
3-18 underutilized businesses, the commission shall enter into
3-19 agreements with local governments in this state that conduct
3-20 certification programs described by Subsection (b). The agreements
3-21 must take effect immediately and:
3-22 (1) allow for automatic certification of businesses
3-23 certified under the local government program;
3-24 (2) provide for the efficient updating of the
3-25 commission database containing information about historically
3-26 underutilized businesses and potential historically underutilized
3-27 businesses; and
4-1 (3) provide for a method by which the commission may
4-2 efficiently communicate with businesses certified under the local
4-3 government program and provide those businesses with information
4-4 about the state historically underutilized business program. [A
4-5 municipality, in certifying historically underutilized businesses,
4-6 may adopt the certification program of the commission, of the
4-7 federal Small Business Administration, or of another political
4-8 subdivision or other governmental entity.]
4-9 SECTION 5. Section 2161.062, Government Code, is amended by
4-10 adding Subsections (d) and (e) to read as follows:
4-11 (d) The commission shall send historically underutilized
4-12 businesses an orientation package on certification or
4-13 recertification. The package shall include:
4-14 (1) a certificate issued in the historically
4-15 underutilized business's name;
4-16 (2) a description of the significance and value of
4-17 certification;
4-18 (3) a list of state purchasing personnel;
4-19 (4) information regarding electronic commerce
4-20 opportunities;
4-21 (5) information regarding the Texas Marketplace
4-22 website; and
4-23 (6) additional information about the state procurement
4-24 process.
4-25 (e) A state agency with a budget that exceeds $5 million
4-26 during a state fiscal year shall designate a staff member to serve
4-27 as the historically underutilized businesses coordinator for the
5-1 agency during the fiscal year. The procurement director may serve
5-2 as the coordinator. In agencies that employ a historically
5-3 underutilized businesses coordinator, the position of coordinator,
5-4 within the agency's structure, must be at least equal to the
5-5 position of procurement director. The coordinator shall:
5-6 (1) coordinate training programs for the recruitment
5-7 and retention of historically underutilized businesses;
5-8 (2) report required information to the commission; and
5-9 (3) match historically underutilized businesses with
5-10 key staff within the agency.
5-11 SECTION 6. Section 2161.063(b), Government Code, is amended
5-12 to read as follows:
5-13 (b) The commission shall assist the Texas Department of
5-14 Economic Development [Commerce] in performing the department's
5-15 duties under Section 481.0068 [481.103].
5-16 SECTION 7. Section 2161.064(b), Government Code, is amended
5-17 to read as follows:
5-18 (b) The commission at least semiannually shall update the
5-19 directory and provide access to the directory electronically or in
5-20 another form [a copy of the directory] to each state agency.
5-21 SECTION 8. Sections 2161.121(a) and (e), Government Code,
5-22 are amended to read as follows:
5-23 (a) The commission shall prepare a consolidated report that:
5-24 (1) includes the number and dollar amount of contracts
5-25 awarded and paid to historically underutilized businesses certified
5-26 by the commission; [and]
5-27 (2) analyzes the relative level of opportunity for
6-1 historically underutilized businesses for various categories of
6-2 acquired goods and services; and
6-3 (3) tracks, by vendor identification number and, to
6-4 the extent allowed by federal law, by social security number, the
6-5 graduation rates for historically underutilized businesses that
6-6 grew to exceed the size standards determined by the commission.
6-7 (e) The commission shall send on October 15 of each year a
6-8 report on the preceding fiscal year to the presiding officer of
6-9 each house of the legislature[, the members of the legislature,]
6-10 and the joint committee.
6-11 SECTION 9. Subchapter B, Chapter 2161, Government Code, is
6-12 amended by adding Sections 2161.065 and 2161.066 to read as
6-13 follows:
6-14 Sec. 2161.065. MENTOR-PROTEGE PROGRAM. (a) The commission
6-15 shall design a mentor-protege program to foster long-term
6-16 relationships between prime contractors and historically
6-17 underutilized businesses and to increase the ability of
6-18 historically underutilized businesses to contract with the state or
6-19 to receive subcontracts under a state contract. Each state agency
6-20 shall implement the program designed by the commission.
6-21 (b) The program must be designed so that each state agency
6-22 is directed to offer appropriate points or other incentives to its
6-23 contractors in connection with any agency contract that offers
6-24 subcontracting opportunities if the contractor agrees to and is
6-25 successful in:
6-26 (1) subcontracting with a historically underutilized
6-27 business in performing the contract; and
7-1 (2) providing business and developmental assistance to
7-2 the historically underutilized business subcontractor that is
7-3 designed to increase the historically underutilized business's
7-4 technical and business capabilities to perform more complex work.
7-5 (c) Participation in the program must be voluntary for both
7-6 the contractor and the historically underutilized business
7-7 subcontractor.
7-8 Sec. 2161.066. HISTORICALLY UNDERUTILIZED BUSINESS FORUMS.
7-9 (a) The commission shall design a program of forums in which
7-10 historically underutilized businesses are invited by state agencies
7-11 to deliver technical and business presentations that demonstrate
7-12 their capability to do business with the agency:
7-13 (1) to senior managers and procurement personnel at
7-14 state agencies that acquire goods and services of a type supplied
7-15 by the historically underutilized businesses; and
7-16 (2) to contractors with the state who may be
7-17 subcontracting for goods and services of a type supplied by the
7-18 historically underutilized businesses.
7-19 (b) The forums shall be held at state agency offices.
7-20 (c) Each state agency shall participate in the program by
7-21 sending senior managers and procurement personnel to attend
7-22 relevant presentations and by informing the agency's contractors
7-23 about presentations that may be relevant to anticipated
7-24 subcontracting opportunities.
7-25 (d) Each state agency that has a historically underutilized
7-26 businesses coordinator shall:
7-27 (1) design its own program and model the program to
8-1 the extent appropriate on the program developed by the commission
8-2 under this section; and
8-3 (2) sponsor presentations by historically
8-4 underutilized businesses at the agency.
8-5 (e) The commission shall sponsor presentations given at
8-6 locations that can easily be attended by representatives of and
8-7 contractors with state agencies that do not have a historically
8-8 underutilized businesses coordinator.
8-9 (f) The commission and each state agency that has a
8-10 historically underutilized businesses coordinator shall
8-11 aggressively identify and notify individual historically
8-12 underutilized businesses regarding opportunities to make a
8-13 presentation regarding the types of goods and services supplied by
8-14 the historically underutilized business and shall advertise in
8-15 appropriate trade publications that target historically
8-16 underutilized businesses regarding opportunities to make a
8-17 presentation.
8-18 SECTION 10. Section 2161.122(c), Government Code, is amended
8-19 to read as follows:
8-20 (c) A state agency participating in a group purchasing
8-21 program [described under Section 2155.139(b)] shall send to the
8-22 commission in the agency's report under Section 2161.121 a separate
8-23 list of purchases from historically underutilized businesses that
8-24 are made through the group purchasing program, including the dollar
8-25 amount of each purchase allocated to the reporting agency.
8-26 SECTION 11. Subchapter C, Chapter 2161, Government Code, is
8-27 amended by adding Sections 2161.126 and 2161.127 to read as
9-1 follows:
9-2 Sec. 2161.126. EDUCATION AND OUTREACH BY COMMISSION. Before
9-3 September 1 of each year, the commission shall report to the
9-4 governor, the lieutenant governor, and the speaker of the house of
9-5 representatives on the education and training efforts that the
9-6 commission has made toward historically underutilized businesses.
9-7 The report must include the following as related to historically
9-8 underutilized businesses:
9-9 (1) the commission's vision, mission, and philosophy;
9-10 (2) marketing materials and other educational
9-11 materials distributed by the commission;
9-12 (3) the commission's policy regarding education,
9-13 outreach, and dissemination of information;
9-14 (4) goals that the commission has attained during the
9-15 fiscal year;
9-16 (5) the commission's goals, objectives, and expected
9-17 outcome measures for each outreach and education event; and
9-18 (6) the commission's planned future initiatives on
9-19 education and outreach.
9-20 Sec. 2161.127. LEGISLATIVE APPROPRIATIONS REQUESTS. Each
9-21 state agency must include as part of its legislative appropriations
9-22 request a detailed report for consideration by the budget
9-23 committees of the legislature that shows the extent to which the
9-24 agency met the applicable historically underutilized business
9-25 contracting goals established by this chapter and by rules of the
9-26 commission during the two calendar years preceding the calendar
9-27 year in which the request is submitted. If a state agency did not
10-1 meet an applicable goal, the report must demonstrate the reasons
10-2 for that fact. The extent to which a state agency meets applicable
10-3 goals is considered a performance measure for purposes of the
10-4 appropriations process.
10-5 SECTION 12. Chapter 2161, Government Code, is amended by
10-6 adding Subchapter F to read as follows:
10-7 SUBCHAPTER F. SUBCONTRACTING
10-8 Sec. 2161.251. APPLICABILITY. (a) This subchapter applies
10-9 to all contracts entered into by a state agency with an expected
10-10 value of $100,000 or more, including:
10-11 (1) contracts for the acquisition of a good or
10-12 service; and
10-13 (2) contracts for or related to the construction of a
10-14 public building, road, or other public work.
10-15 (b) This subchapter applies to the contract without regard
10-16 to:
10-17 (1) whether the contract is otherwise subject to this
10-18 subtitle; or
10-19 (2) the source of funds for the contract, except that
10-20 to the extent federal funds are used to pay for the contract, this
10-21 subchapter does not apply if federal law prohibits the application
10-22 of this subchapter in relation to the expenditure of federal funds.
10-23 Sec. 2161.252. AGENCY DETERMINATION REGARDING SUBCONTRACTING
10-24 OPPORTUNITIES; BUSINESS SUBCONTRACTING PLAN. (a) Each state
10-25 agency that considers entering into a contract with an expected
10-26 value of $100,000 or more shall, before the agency solicits bids,
10-27 proposals, offers, or other applicable expressions of interest from
11-1 prospective contractors, determine whether it is probable that
11-2 there will be subcontracting opportunities under the contract. If
11-3 the state agency determines that there is that probability, the
11-4 agency in its request for bids, proposals, offers, or other
11-5 applicable expressions of interest regarding the contract shall
11-6 require that each bid, proposal, offer, or other applicable
11-7 expression of interest include a historically underutilized
11-8 business subcontracting plan.
11-9 (b) If the state agency determines that there is the
11-10 probability for subcontracting opportunities under the contract,
11-11 the agency also shall determine the extent to which historically
11-12 underutilized businesses will be available to enter into the
11-13 subcontracts. The state agency shall make this determination based
11-14 on the types of subcontracting opportunities available under the
11-15 contract together with the agency's knowledge of the relevant
11-16 market, any relevant disparity study conducted by or for a
11-17 governmental entity that contains information on the availability
11-18 of historically underutilized businesses to perform the types of
11-19 subcontracted work in the relevant locality, and other relevant
11-20 information the agency considers to be reliable. Given the
11-21 expected value of the subcontracting opportunities and its
11-22 determination regarding the availability of historically
11-23 underutilized businesses to perform the subcontracted work, the
11-24 state agency shall state the historically underutilized business
11-25 subcontracting participation level for the contract expressed as a
11-26 percentage of the expected dollar value of the contract. The state
11-27 agency shall include the participation level in its request for
12-1 bids, proposals, offers, or other applicable expressions of
12-2 interest.
12-3 (c) When a state agency requires a historically
12-4 underutilized business subcontracting plan under Subsection (a), a
12-5 bid, proposal, offer, or other applicable expression of interest
12-6 from a prospective contractor must contain a plan that meets the
12-7 requirements of this section to be considered responsive.
12-8 (d) The historically underutilized business subcontracting
12-9 plan is considered to be part of the bid, proposal, offer, or other
12-10 applicable expression of interest. The plan must include:
12-11 (1) the historically underutilized business
12-12 subcontracting participation level that the prospective contractor
12-13 expects to meet, expressed as a percentage of the expected dollar
12-14 amount of the contract;
12-15 (2) the name of each historically underutilized
12-16 business with which the prospective contractor expects to
12-17 subcontract;
12-18 (3) the part of the work that each of those expected
12-19 subcontractors would perform;
12-20 (4) the expected dollar value of each of those
12-21 subcontracts; and
12-22 (5) information about the methods used in the past and
12-23 currently used by the prospective contractor to identify, contact,
12-24 and evaluate available historically underutilized businesses with
12-25 which to subcontract.
12-26 (e) If the historically underutilized business
12-27 subcontracting participation level stated in the prospective
13-1 contractor's plan is less than the state agency's stated
13-2 participation level for the contract, the plan must account for
13-3 that fact. The plan must demonstrate the reason, in the prospective
13-4 contractor's opinion, that there is an insufficient number of
13-5 historically underutilized businesses available in the locality at
13-6 that time to allow the state agency's stated participation level to
13-7 be met.
13-8 Sec. 2161.253. AGENCY EVALUATION OF BUSINESS SUBCONTRACTING
13-9 PLAN. (a) A state agency that has required each bid, proposal,
13-10 offer, or other applicable expression of interest for the contract
13-11 to include a historically underutilized business subcontracting
13-12 plan may not award the contract to a prospective contractor who did
13-13 not include a plan that complies with Section 2161.252.
13-14 (b) In determining which bid, proposal, offer, or other
13-15 applicable expression of interest offers the best value to the
13-16 state or is the lowest and best responsible bid or proposal, the
13-17 state agency shall evaluate and consider the merits of each
13-18 prospective contractor's historically underutilized business
13-19 subcontracting plan.
13-20 Sec. 2161.254. REQUIRED CONTRACT CLAUSES. (a) A contract
13-21 awarded by a state agency that has required each bid, proposal,
13-22 offer, or other applicable expression of interest for the contract
13-23 to include a historically underutilized business subcontracting
13-24 plan must include the contract clauses described by this section.
13-25 (b) The historically underutilized business subcontracting
13-26 plan submitted by the prospective contractor receiving the contract
13-27 is considered to be part of the contract. The historically
14-1 underutilized business subcontracting participation level expressed
14-2 in the plan as a percentage of the expected dollar amount of the
14-3 contract is considered to be part of the contract, except that if
14-4 negotiations were allowed under other law and the prospective
14-5 contractor and the state agency agreed on a different percentage
14-6 subcontracting participation level during negotiations before the
14-7 contract was awarded, the negotiated participation level is
14-8 considered to be part of the contract.
14-9 (c) The contract must require quarterly reports on the
14-10 progress the contractor is making in meeting the overall
14-11 participation level of the historically underutilized business
14-12 subcontracting plan. The quarterly reports must generally describe,
14-13 in the manner prescribed by the state agency, the progress being
14-14 made in meeting the participation level. The quarterly reports
14-15 must also specifically report:
14-16 (1) whether the historically underutilized businesses
14-17 named in the subcontracting plan as businesses with which the
14-18 contractor expected to subcontract actually received the expected
14-19 subcontracts, and if not:
14-20 (A) the reasons for that fact; and
14-21 (B) the efforts that the contractor made to find
14-22 another historically underutilized business that was available and
14-23 would be interested in the subcontract;
14-24 (2) the cumulative dollar value of subcontracts
14-25 awarded to historically underutilized businesses under the contract
14-26 to date; and
14-27 (3) the percentage of the cumulative amount the
15-1 contractor has spent under the contract to date as payments to
15-2 historically underutilized business subcontractors under the
15-3 contract.
15-4 (d) The contract must include a clause that outlines and
15-5 describes the requirements of the state's historically
15-6 underutilized business subcontracting program.
15-7 (e) The contract must include a penalties clause that
15-8 requires the contractor to pay penalties to the state after the
15-9 contract is completed if:
15-10 (1) the value of subcontracts awarded under the
15-11 contract to historically underutilized businesses did not meet or
15-12 exceed the historically underutilized business subcontracting
15-13 participation level that is part of the contract; and
15-14 (2) the participation level was not met at least in
15-15 part because the contractor did not make a good faith effort to
15-16 meet the participation level.
15-17 (f) The amount of the penalties is computed by subtracting
15-18 the value of subcontracts awarded under the contract to
15-19 historically underutilized businesses from the historically
15-20 underutilized business subcontracting participation level that is
15-21 part of the contract.
15-22 Sec. 2161.255. DETERMINING WHETHER TO ASSESS PENALTIES.
15-23 (a) After the contract is completed, the purchasing personnel of
15-24 the state agency shall determine whether the value of subcontracts
15-25 awarded under the contract to historically underutilized businesses
15-26 met or exceeded the historically underutilized business
15-27 subcontracting participation level that was part of the contract.
16-1 If it is determined that the contractor failed to meet or exceed
16-2 the participation level, the state agency shall notify the
16-3 contractor of that determination.
16-4 (b) The state agency shall give the contractor ample
16-5 opportunity to submit documentation and to explain in discussions
16-6 with state agency purchasing personnel that the failure to meet or
16-7 exceed the participation level is not attributable to a lack of
16-8 good faith effort on the part of the contractor to meet the
16-9 participation level.
16-10 (c) In determining the extent to which the contractor made a
16-11 good faith effort to meet the participation level, the state
16-12 agency's purchasing personnel shall consider factors indicating
16-13 good faith, such as whether the contractor:
16-14 (1) provided timely notice of a subcontracting
16-15 opportunity to historically underutilized businesses that have the
16-16 ability to perform the subcontract and that may be interested in
16-17 receiving the subcontract;
16-18 (2) advertised the subcontracting opportunity in all
16-19 media that focus on serving one or more kinds of historically
16-20 underutilized businesses;
16-21 (3) effectively used the services of minority, women,
16-22 and community organization contractor groups, local, state, and
16-23 federal business assistance offices, and other organizations that
16-24 provide assistance in identifying historically underutilized
16-25 businesses that have the ability to perform the subcontract;
16-26 (4) divided subcontract work or purchases into the
16-27 smallest reasonable units to enhance the possibility of
17-1 historically underutilized business participation in the
17-2 subcontracting opportunity; and
17-3 (5) awarded a subcontract to the historically
17-4 underutilized business that qualified as the lowest responsible
17-5 bidder or offeror or, for negotiated subcontracts, negotiated in
17-6 good faith with interested historically underutilized businesses.
17-7 (d) If, after considering the documentation and explanations
17-8 submitted by the contractor, the state agency's officer or employee
17-9 in charge of procurement finds that the contractor did not meet the
17-10 participation level because of a lack of good faith effort on the
17-11 part of the contractor, that officer or employee shall report that
17-12 finding to the administrative head of the agency. The
17-13 administrative head may then initiate a contested case proceeding
17-14 to assess the penalty under Chapter 2001. If the agency's final
17-15 order in the contested case assesses the penalty, the contractor is
17-16 entitled to judicial review of the final order.
17-17 (e) The enforcement of the penalty may be stayed during the
17-18 time the order is under judicial review if the person pays the
17-19 penalty to the clerk of the court or files a supersedeas bond with
17-20 the court in the amount of the penalty. A person who cannot afford
17-21 to pay the penalty or file the bond may stay the enforcement by
17-22 filing an affidavit in the manner required by the Texas Rules of
17-23 Civil Procedure for a party who cannot afford to file security for
17-24 costs, subject to the right of the agency to contest the affidavit
17-25 as provided by those rules.
17-26 (f) Penalties under this section are payable to the state
17-27 agency, which shall send the money to the comptroller for deposit
18-1 in the unobligated and undedicated portion of the general revenue
18-2 fund.
18-3 SECTION 13. Section 2161.231, Government Code, is amended to
18-4 read as follows:
18-5 Sec. 2161.231. PENALTY. (a) A person commits an offense if
18-6 the person:
18-7 (1) intentionally applies as a historically
18-8 underutilized business for an award of a purchasing contract or
18-9 public works contract under this subtitle; and
18-10 (2) knows the person is not a historically
18-11 underutilized business.
18-12 (b) A person commits an offense if the person:
18-13 (1) intentionally applies as a historically
18-14 underutilized business for an award of a subcontract under a
18-15 purchasing contract or public works contract with a state agency
18-16 under this subtitle or other law; and
18-17 (2) knows the person is not a historically
18-18 underutilized business.
18-19 (c) An offense under this section is a third degree felony.
18-20 SECTION 14. (a) This Act takes effect September 1, 1999,
18-21 except that Section 2161.003, Government Code, as added by this
18-22 Act, takes effect September 1, 2000.
18-23 (b) Subchapter F, Chapter 2161, Government Code, as added by
18-24 this Act, applies only to subcontracting under a contract entered
18-25 into by a state agency for which the request for bids, proposals,
18-26 offers, or other applicable expressions of interest is published or
18-27 otherwise disseminated on or after that date.
19-1 SECTION 15. The importance of this legislation and the
19-2 crowded condition of the calendars in both houses create an
19-3 emergency and an imperative public necessity that the
19-4 constitutional rule requiring bills to be read on three several
19-5 days in each house be suspended, and this rule is hereby suspended.