HBA-KDB H.B. 2528 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2528
By: Junell
State Affairs
3/21/2001
Introduced



BACKGROUND AND PURPOSE 

 The state's purchasing methods and procedures are still largely
paper-based, which is time consuming and does not take full advantage of
the state's purchasing power.  Because of this,  local governments,
institutions of higher education, and school districts may be unable to
realize the purchasing benefits the state could offer.  Currently, there is
a web-based electronic procurement system at the General Services
Commission (GSC) to help alleviate the potential problems caused by a
paper-based system.  However, there is concern that it needs more
flexibility, direction, and focus.  House Bill 2528  requires the
Department of Information Resources, rather than GSC, to establish and
manage the electronic infrastructure of an electronic procurement
marketplace and requires GSC to adopt rules specifying the circumstances
under which it is advantageous for the state to allow a local government to
purchase goods or services under a contract made by another local
government or a state agency other than GSC. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Department of Information Resources
in SECTION 1 (Sections 2177.003 and 2177.004, Government Code) and the
General Services Commission in SECTION 1 (Sections 2177.003 and 2177.004,
Government Code), in SECTION 2 (Section 2155.079, Government Code), in
SECTION 3 (Section 271.084, Local Government Code) and SECTION 4 of this
bill. 

ANALYSIS

House Bill 2528 amends the Government Code to modify provisions relating to
electronic commerce.  The bill authorizes an institution of higher
education to participate in the electronic procurement system (Sec.
2177.002).  The bill requires the Department of Information Resources
(DIR), rather than the General Services Commission (GSC), to establish and
manage the electronic infrastructure of an electronic procurement
marketplace (marketplace).  The bill requires GSC to manage and administer
the content of the marketplace and provides that the marketplace must
comply with requirements of the electronic computing and data processing
center and Texas online.   
The bill authorizes DIR, in addition to GSC, as appropriate, to enter into
contracts with private or public entities to establish or maintain all or
part of the databases comprising the marketplace, to the extent feasible,
including contracts to procure hardware or software.  The bill requires
DIR, in addition to GSC, to procure all goods and services related to the
marketplace through a competitive selection process appropriate for the
good or service being acquired.  The bill authorizes DIR, rather than GSC,
to adopt rules relating to the design and use of the marketplace that
concern the technical requirements of the marketplace.  The bill authorizes
GSC to adopt rules relating to the use of the marketplace for its intended
purpose and requires DIR and GSC to consult in adopting rules relating to
the marketplace.  The bill authorizes DIR, in addition to GSC, to require
information from a state agency for inclusion in the marketplace (Sec.
2177.003). 

The bill requires DIR to establish and GSC to manage an electronic commerce
network (network), to the extent feasible, under which the state's
purchasing transactions with vendors can be accomplished electronically by
means of facsimile transmissions and on-line transmission of necessary
information.   
 
The bill authorizes DIR, in addition to GSC, to enter into contracts with
one or more public or private entities to establish or support various
elements of the network, and requires DIR, in addition to GSC, to procure
all goods and services related to the network through the competitive
selection process appropriate for the good or service being acquired.  The
bill authorizes DIR to adopt rules to administer provisions that concern
the technical requirements of the network and authorizes GSC to adopt rules
to administer provisions relating to the use of the network for its
intended purpose.  The bill requires DIR and GSC to consult in adopting
rules relating to the network (Sec. 2177.004). 

The bill authorizes a local government or participating  institution of
higher education to send to GSC for posting on the network information on
each procurement contract the value of which will exceed the amount of the
agency's delegated purchasing authority.  The bill requires a local
government and a participating institution of higher education, in addition
to GSC and each state agency, to include in the information placed on the
network, to the extent it is feasible, information  relating to goods and
services for each procurement contact information, and bid or proposal
information (Section 2177.005).   

The bill requires GSC to adopt rules not later than January 1, 2002,
specifying the circumstances under which it is advantageous for the state
to allow a state agency or local government to purchase goods or services
under a contract made by a local government, a school district, or a
participating institution of higher education.  If GSC rules allow other
agencies to make purchases under a contract entered into by an agency using
delegated purchasing authority, the agency purchasing under delegated
authority is authorized to offer the goods or services available under the
contract to local governments, school districts, or participating
institutions of higher education.  The bill removes provisions that a state
agency first establish that the goods or services being offered under its
contract are not available under a contract administered by GSC and inform
GSC of the terms of the contract and capabilities of the vendor (Sec.
2155.079, Government Code and Sec. 271.084, Local Government Code). 

EFFECTIVE DATE

September 1, 2001.