77R11324 PAM-F                           
         By Clark                                              H.B. No. 2486
         Substitute the following for H.B. No. 2486:
         By Carter                                         C.S.H.B. No. 2486
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the purchasing and contracting authority of
 1-3     municipalities; providing penalties.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Chapter 252, Local Government Code, is reorganized
 1-6     and amended to read as follows:
 1-7            CHAPTER 252.  PURCHASING AND CONTRACTING AUTHORITY OF
 1-8                               MUNICIPALITIES
 1-9                      SUBCHAPTER A.  GENERAL PROVISIONS
1-10           Sec. 252.001.  DEFINITIONS. In this chapter:
1-11                 (1)  "Bond funds" includes money in the treasury
1-12     received from the sale of bonds and includes the proceeds of bonds
1-13     that have been voted but have not been issued and delivered.
1-14                 (2)  "Component purchases" means purchases of the
1-15     component parts of an item that in normal purchasing practices
1-16     would be purchased in one purchase.
1-17                 (3)  "Current funds" includes money in the treasury,
1-18     taxes in the process of being collected in the current fiscal [tax]
1-19     year, and all other revenue that may be anticipated with reasonable
1-20     certainty to be deposited in the treasury in the current fiscal
1-21     [tax] year, including revenue derived from bond funds, certificates
1-22     of obligation, or other debt instruments or other general municipal
1-23     funds.
1-24                 (4)  "Custom manufactured goods" means goods made to
 2-1     the specifications of the municipality that are unique to and
 2-2     generally usable only for a stated purpose connected with a
 2-3     particular specialized industrial or technological operation.
 2-4                 (5)  "Goods" means tangible personal property,
 2-5     including machinery, equipment, and supplies.
 2-6                 (6)  "High technology procurement" means the
 2-7     procurement of equipment, goods, or services of a highly technical
 2-8     nature, including:
 2-9                       (A)  data processing equipment and software and
2-10     firmware used in conjunction with data processing equipment;
2-11                       (B)  telecommunications equipment and radio and
2-12     microwave systems;
2-13                       (C)  electronic distributed control systems,
2-14     including building energy management systems; [and]
2-15                       (D)  a subscription to an Internet service
2-16     provider, a computerized database subscription service, or any
2-17     other Internet-based or computer system-based information storage,
2-18     processing, acquisition, or subscription service; and
2-19                       (E)  maintenance, training, support, and other
2-20     technical services related to the [those] items described by
2-21     Paragraphs (A)-(D).
2-22                 (7)  "Normal purchasing practice" means the accepted
2-23     custom, practice, and standard among political subdivisions or
2-24     government agencies in the United States regarding the methods of
2-25     purchasing a particular good or service.
2-26                 (8) [(5)]  "Planning services" means services primarily
2-27     intended to guide governmental policy to ensure the orderly and
 3-1     coordinated development of the state or of municipal, county,
 3-2     metropolitan, or regional land areas.
 3-3                 (9)  "Professional services" means:
 3-4                       (A)  the services defined as professional
 3-5     services by Section 2254.002, Government Code; and
 3-6                       (B)  the services provided in connection with a
 3-7     person employed or trained in a field or occupation that consists
 3-8     predominantly of mental or intellectual labor and requiring:
 3-9                             (i)  a high order of intelligence, skill,
3-10     and learning; and
3-11                             (ii)  the number of years of education and
3-12     practice commonly regarded as necessary in the field or occupation
3-13     to attain competence.
3-14                 (10) [(6)]  "Separate purchases" means purchases, made
3-15     separately, of items that in normal purchasing practices would be
3-16     purchased in one purchase.
3-17                 (11) [(7)]  "Sequential purchases" means purchases,
3-18     made over a period, of items that in normal purchasing practices
3-19     would be purchased in one purchase.
3-20                 (12)  "Specialized industrial or technological
3-21     operation" means:
3-22                       (A)  an operation of a municipal:
3-23                             (i)  solid waste or sludge landfill;
3-24                             (ii)  water or wastewater treatment,
3-25     collection, purification, or distribution plant or process;
3-26                             (iii)  reservoir;
3-27                             (iv)  dam;
 4-1                             (v)  electric power plant; or
 4-2                             (vi)  energy recovery facility; or
 4-3                       (B)  any other similar industrial or
 4-4     technological process or operation owned by a municipality.
 4-5                 (13)  "Special services contract" means a contract
 4-6     requiring an expenditure greater than $25,000 for the purchase of
 4-7     any of the following items:
 4-8                       (A)  a high technology item;
 4-9                       (B)  insurance, insurance consulting, or other
4-10     insurance related services;
4-11                       (C)  management consulting, training, or
4-12     recruiting services;
4-13                       (D)  administrative services of a third party
4-14     relating to the administration of legal claims, workers'
4-15     compensation benefits, or employee health, life, or dental
4-16     benefits;
4-17                       (E)  management services provided for a municipal
4-18     vehicle fleet or a municipal building, facility, or utility,
4-19     including management services provided by a nonprofit organization;
4-20                       (F)  surveillance, robotic, or other highly
4-21     technical equipment for use by a municipal police department for
4-22     law enforcement purposes or by a municipal fire department to fight
4-23     fires more safely and effectively;
4-24                       (G)  solid waste collection, disposal, or
4-25     management services;
4-26                       (H)  books, including rare books, and
4-27     manuscripts, papers, magazines, and other library materials for a
 5-1     public library;
 5-2                       (I)  films or electronic audio-visual media;
 5-3                       (J)  services performed in connection with a
 5-4     community development program established under Chapter 373, if the
 5-5     contract funding is derived exclusively from an appropriation,
 5-6     loan, or grant received from this state or the federal government
 5-7     to conduct the program;
 5-8                       (K)  custom-manufactured goods necessary for a
 5-9     specialized industrial or technological operation;
5-10                       (L)  construction management services;
5-11                       (M)  municipal code publication services;
5-12                       (N)  travel services;
5-13                       (O)  marketing or advertising services for
5-14     municipal facilities, goods, or services;
5-15                       (P)  an agreement for the temporary use or
5-16     occupancy of hotel, conference, or other business center facilities
5-17     for a municipal conference or seminar,  employee training or
5-18     testing, or other municipal events; or
5-19                       (Q)  any purchase of goods or services for which
5-20     the preparation of detailed specifications to support the award of
5-21     a contract is determined by the governing body to be impractical or
5-22     impossible [(8) "Time warrant" includes any warrant issued by a
5-23     municipality that is not payable from current funds].
5-24           Sec. 252.002.  MUNICIPAL CHARTER SUPERSEDED [CONTROLS] IN
5-25     CASE OF CONFLICT. (a)  Except as provided by Subsection (b), any
5-26     [Any] provision in the charter of a home-rule municipality that
5-27     [relates to the notice of contracts, advertisement of the notice,
 6-1     requirements for the taking of sealed bids based on specifications
 6-2     for public improvements or purchases, the manner of publicly
 6-3     opening bids or reading them aloud, or the manner of letting
 6-4     contracts and that] is in conflict with this chapter is superseded
 6-5     by [controls over] this chapter.
 6-6           (b)  The [unless the] governing body of a [the] municipality
 6-7     may elect [elects] to have its charter supersede the provisions of
 6-8     this chapter if the charter provisions are more restrictive than
 6-9     the provisions of this chapter [supersede the charter].
6-10           Sec. 252.003.  APPLICATION OF OTHER LAW. (a)  The purchasing
6-11     requirements of Section 361.426, Health and Safety Code, apply to
6-12     municipal purchases made under this chapter.
6-13           (b)  The purchasing requirements of this chapter do not apply
6-14     if another law provides specific procedures for acquiring goods or
6-15     services.
6-16           Sec. 252.004 [252.0215].  COMPETITIVE BIDDING IN RELATION TO
6-17     HISTORICALLY UNDERUTILIZED BUSINESS. A municipality, in making an
6-18     expenditure of more than $5,000 [$3,000] but less than $25,000
6-19     [$15,000], shall contact at least two historically underutilized
6-20     businesses on a rotating basis, based on information provided by
6-21     the General Services Commission pursuant to Chapter 2161,
6-22     Government Code.  If the list fails to identify a historically
6-23     underutilized business in the county in which the municipality is
6-24     situated, the municipality is exempt from this section.
6-25           Sec. 252.005 [252.046].  CIRCUMSTANCES IN WHICH CURRENT FUNDS
6-26     TO BE SET ASIDE. An [If an] expenditure under a [the] contract
6-27     subject to this chapter shall be [is] payable from [by warrants on]
 7-1     current funds.  The[, the] governing body of the municipality by
 7-2     order or resolution shall set aside an amount of current funds that
 7-3     will discharge the contract obligation [principal and interest of
 7-4     the warrants].  Those funds may not be used for any other purpose
 7-5     unless the contract is properly completed or terminated and the
 7-6     remaining funds are released[, and the warrants must be discharged
 7-7     from those funds and may not be refunded].
 7-8           Sec. 252.006.  CONTRACTS PERMITTED UNDER COMMON LAW.
 7-9     Regardless of Section 252.102(d), a municipality is not prohibited
7-10     from procuring goods or services under contracts that would be
7-11     considered severable under common law.
7-12              (Sections 252.007-252.020 reserved for expansion
7-13                SUBCHAPTER B.  COMPETITIVE BIDDING PROCEDURES
7-14                     [OR COMPETITIVE PROPOSALS REQUIRED]
7-15           Sec. 252.021.  COMPETITIVE BIDDING REQUIREMENTS; ALTERNATE
7-16     [AND COMPETITIVE PROPOSAL] REQUIREMENTS. (a)  Before a municipality
7-17     may enter into a contract that requires an expenditure of more than
7-18     $25,000 [$15,000] from one or more municipal funds, the
7-19     municipality must comply with the procedure prescribed by this
7-20     subchapter [chapter] for competitive sealed bidding [or competitive
7-21     sealed proposals].
7-22           (b)  Before a municipality with a population of less than
7-23     75,000 may enter into a contract for insurance that requires an
7-24     expenditure of more than $5,000 from one or more municipal funds,
7-25     the municipality must comply with the procedure prescribed by this
7-26     subchapter [chapter] for competitive sealed bidding.
7-27           (c)  This subchapter does not exempt a municipality from
 8-1     complying with the procedures prescribed by Subchapter A, Chapter
 8-2     2254, Government Code, to procure professional services subject to
 8-3     that subchapter [A municipality may use the competitive sealed
 8-4     proposal procedure only for high technology procurements or, in a
 8-5     municipality with a population of 75,000 or more, the purchase of
 8-6     insurance].
 8-7           [(d)  This chapter does not apply to the expenditure of
 8-8     municipal funds that are derived from an appropriation, loan, or
 8-9     grant received by a municipality from the federal or state
8-10     government for conducting a community development program
8-11     established under Chapter 373 if under the program items are
8-12     purchased under the request-for-proposal process described by
8-13     Section 252.042.  A municipality using a request-for-proposal
8-14     process under this subsection shall also comply with the
8-15     requirements of Section 252.0215.]
8-16           Sec. 252.022.  GENERAL EXEMPTIONS. (a)  This subchapter does
8-17     not apply to the following contracts:
8-18                 (1)  an interlocal or intergovernmental agreement; or
8-19                 (2)  a special services contract, unless the
8-20     competitive bidding option is chosen under Subchapter E.
8-21           (b)  This subchapter [chapter] does not apply to an
8-22     expenditure for:
8-23                 (1)  a procurement made because of a public calamity
8-24     that requires the immediate expenditure [appropriation] of money to
8-25     relieve the necessity of the municipality's residents or to
8-26     preserve the property of the municipality;
8-27                 (2)  a procurement that the governing body finds is
 9-1     necessary to preserve or protect the public health or safety of the
 9-2     municipality's residents;
 9-3                 (3)  a procurement necessary because of unforeseen
 9-4     damage to real property, public machinery, equipment, or other
 9-5     tangible personal property;
 9-6                 (4)  a procurement for personal, professional, or
 9-7     planning services;
 9-8                 (5)  a procurement for work that is performed and paid
 9-9     for by the day as the work progresses;
9-10                 (6)  a purchase or lease of land or any other purchase
9-11     of a temporary right to use or occupy land or a purchase of a
9-12     right-of-way;
9-13                 (7)  a procurement of items that are available from
9-14     only one source, including:
9-15                       (A)  items that are available from only one
9-16     source because of patents, copyrights, secret processes, [or]
9-17     natural monopolies, or exclusive distribution rights;
9-18                       (B)  films, manuscripts, [or books;]
9-19                       [(C)  gas, water, and other utility services;]
9-20                       [(D)  captive replacement parts or components for
9-21     equipment;]
9-22                       [(E)]  books, papers, software, and other similar
9-23     audio and visual [library] materials [for a public library] that
9-24     are owned by or available only from a person [the persons] holding
9-25     exclusive distribution rights to the materials; and
9-26                       (C)  captive replacement parts or components for
9-27     equipment;
 10-1                      [(F) management services provided by a nonprofit
 10-2    organization to a municipal museum, park, zoo, or other facility to
 10-3    which the organization has provided significant financial or other
 10-4    benefits;]
 10-5                (8)  [a purchase of rare books, papers, and other
 10-6    library materials for a public library;]
 10-7                [(9)  paving drainage, street widening, and other
 10-8    public improvements, or related matters, if at least one-third of
 10-9    the cost is to be paid by or through special assessments levied on
10-10    property that will benefit from the improvements;]
10-11                [(10)]  a public improvement project, already in
10-12    progress, authorized by the voters of the municipality, for which
10-13    there is a deficiency of funds for completing the project in
10-14    accordance with the plans and purposes authorized by the voters;
10-15                (9) [(11)]  a payment under a contract by which a
10-16    developer participates in the construction of a public improvement
10-17    as provided by Subchapter C, Chapter 212;
10-18                (10)  a purchase of [(12)] personal property sold:
10-19                      (A)  at an auction by a state licensed
10-20    auctioneer;
10-21                      (B)  at a going out of business sale held in
10-22    compliance with Subchapter F, Chapter 17, Business & Commerce Code;
10-23                      (C)  by a political subdivision of this state, a
10-24    state agency of this state, or an entity of the federal government;
10-25    or
10-26                      (D)  under an interlocal contract for cooperative
10-27    purchasing administered by a regional planning commission
 11-1    established under Chapter 391;
 11-2                (11)  a purchase of goods or [(13)] services produced
 11-3    or furnished [performed] by blind or severely disabled persons;
 11-4                (12) [(14)]  goods purchased by a municipality for
 11-5    subsequent retail sale by the municipality;  [or]
 11-6                (13) a purchase of natural gas, water, wastewater, or
 11-7    other utility services;
 11-8                (14)  a purchase of food;
 11-9                (15)  a purchase of retail electrical power and service
11-10    related to providing retail electrical power to the municipality;
11-11    or
11-12                (16)  a purchase [electricity.]
11-13          [(b)  This chapter does not apply to bonds or warrants issued
11-14    under Title 118, Revised Statutes, relating to seawalls.]
11-15          [(c)  This chapter does not apply to expenditures] by a
11-16    municipally owned electric or gas utility, including a division of
11-17    the utility, or an unbundled division [divisions] of a municipally
11-18    owned electric or gas utility if the purchase is [in connection
11-19    with any purchases by the municipally owned utility or divisions of
11-20    a municipally owned utility] made in accordance with procurement
11-21    procedures adopted by a resolution of the body vested with
11-22    authority for management and operation of the municipally owned
11-23    electric or gas utility or its divisions that sets out the public
11-24    purpose to be achieved by those procedures.
11-25          (c)  The exemption provided by Subsection (b)(16) does [This
11-26    subsection may] not [be deemed to] exempt a municipally owned
11-27    utility from any other applicable statute, charter provision, or
 12-1    ordinance.
 12-2          (d)  Contracts exempted under Subsection (b) may be procured
 12-3    under rules prescribed by the governing body of a municipality to
 12-4    meet the needs of the municipality at the most reasonable price,
 12-5    subject to the requirements of other applicable law or municipal
 12-6    charter provisions.
 12-7          Sec. 252.023.  [EXEMPTIONS FROM REFERENDUM PROVISIONS. The
 12-8    referendum provisions prescribed by Section 252.045 do not apply to
 12-9    expenditures that are payable:]
12-10                [(1)  from current funds;]
12-11                [(2)  from bond funds; or]
12-12                [(3)  by time warrants unless the amount of the time
12-13    warrants issued by the municipality for all purposes during the
12-14    current calendar year exceeds:]
12-15                      [(A)  $7,500 if the municipality's population is
12-16    5,000 or less;]
12-17                      [(B)  $10,000 if the municipality's population is
12-18    5,001 to 24,999;]
12-19                      [(C)  $25,000 if the municipality's population is
12-20    25,001 to 49,999; or]
12-21                      [(D)  $100,000 if the municipality's population
12-22    is more than 50,000.]
12-23          [Sec. 252.041.]  NOTICE REQUIREMENT. (a)  Notice [If the
12-24    competitive sealed bidding requirement applies to the contract,
12-25    notice] of the time and place at which the bids are scheduled to
12-26    [will] be publicly opened and read aloud:
12-27                (1)  must be:
 13-1                      (A)  published at least once a week for two
 13-2    consecutive weeks in a newspaper of general circulation published
 13-3    in the municipality, with the[. The] date of the first publication
 13-4    to [must] be before the 14th day before the date set to publicly
 13-5    open the bids and read them aloud; or
 13-6                      (B)  continuously [. If no newspaper is published
 13-7    in the municipality, the notice must be] posted in a conspicuous
 13-8    place at the city hall for 14 days before the date set to publicly
 13-9    open the bids and read them aloud, if a newspaper of general
13-10    circulation is not published in the municipality; and
13-11                (2)  must be continuously posted on the municipality's
13-12    Internet website, if the municipality has an Internet website, for
13-13    14 days before the date set to publicly open the bids and read them
13-14    aloud.
13-15          (b)  The [If the competitive sealed proposals requirement
13-16    applies to the contract, notice of the request for proposals must
13-17    be given in the same manner as that prescribed by Subsection (a)
13-18    for the notice for competitive sealed bids.]
13-19          [(c)  If the contract is for the purchase of machinery for
13-20    the construction or maintenance of roads or streets, the] notice
13-21    for bids [and the order for purchase] must include a general
13-22    specification of the goods or services [machinery] desired.  The
13-23    general specifications are sufficient if a reasonable bidder is
13-24    able to:
13-25                (1)  understand the requirements of the bid request;
13-26    and
13-27                (2)  bid on the same terms and conditions as other
 14-1    reasonable bidders.
 14-2          (c)  The municipality may not write specifications in a
 14-3    manner that unreasonably prevents or restricts competition, favors
 14-4    a particular bidder, or unreasonably increases the cost of work or
 14-5    other items that are part of the goods or services requested.  This
 14-6    subsection does not prevent a municipality from:
 14-7                (1)  specifying patented or copyrighted items as part
 14-8    of the bid; or
 14-9                (2)  waiving minor irregularities or defects in the bid
14-10    as provided by Section 252.024.
14-11          [(d)  If the governing body of the municipality intends to
14-12    issue time warrants for the payment of any part of the contract,
14-13    the notice must include a statement of:]
14-14                [(1)  the governing body's intention;]
14-15                [(2)  the maximum amount of the proposed time warrant
14-16    indebtedness;]
14-17                [(3)  the rate of interest the time warrants will bear;
14-18    and]
14-19                [(4)  the maximum maturity date of the time warrants.]
14-20          Sec. 252.024.  BID CONFORMITY. (a)  A bid that materially
14-21    varies from the requirements of the municipality's specifications
14-22    is a nonresponsive bid and may not be considered by the
14-23    municipality for any purpose.
14-24          (b)  The municipality may waive minor irregularities or
14-25    defects in a bid. [SELECTION OF INSURANCE BROKER. This chapter does
14-26    not prevent a municipality from selecting a licensed insurance
14-27    broker as the sole broker of record to obtain proposals and
 15-1    coverages for excess or surplus insurance that provides necessary
 15-2    coverage and adequate limits of coverage in structuring layered
 15-3    excess coverages in all areas of risk requiring special
 15-4    consideration, including public official liability, police
 15-5    professional liability, and airport liability.  The broker may be
 15-6    retained only on a fee basis and may not receive any other
 15-7    remuneration from any other source.]
 15-8          Sec. 252.025 [252.043].  AWARD OF CONTRACT. (a)  After
 15-9    opening and evaluating the bids received [If the competitive sealed
15-10    bidding requirement applies to the contract], the contract must be
15-11    awarded to the lowest responsible bidder.  The governing body of
15-12    the municipality may reject any and all bids.
15-13          (b)  A bid that has been opened may not be changed for the
15-14    purpose of correcting an error in the bid price.  This subsection
15-15    [chapter] does not change the common law right of a bidder to
15-16    withdraw a bid due to a material mistake in the bid.
15-17          [(b)  If the competitive sealed proposals requirement applies
15-18    to the contract, the contract must be awarded to the responsible
15-19    offeror whose proposal is determined to be the most advantageous to
15-20    the municipality considering the relative importance of price and
15-21    the other evaluation factors included in the request for
15-22    proposals.]
15-23          Sec. 252.026 [252.0435].  CONSIDERATION OF BIDDER
15-24    RESPONSIBILITY [SAFETY RECORD OF BIDDER CONSIDERED]. (a)  In
15-25    determining which bidder is the lowest responsible bidder, the
15-26    governing body of the municipality may consider the bidder's:
15-27                (1)  performance on previous or ongoing contracts with
 16-1    the municipality, another political subdivision, a state agency, or
 16-2    a private business entity for similar goods or services, including
 16-3    issues relating to:
 16-4                      (A)  nonconformity of goods or services to
 16-5    standard specifications;
 16-6                      (B)  inability or refusal to honor warranties;
 16-7                      (C)  timeliness of contract completion;
 16-8                      (D)  poor workmanship;
 16-9                      (E)  filing of fraudulent or meritless claims; or
16-10                      (F)  incompetence or dishonesty in the
16-11    administration or performance of a contract;
16-12                (2)  financial resources;
16-13                (3)  competence;
16-14                (4)  experience;
16-15                (5)  ability; or
16-16                (6)  integrity.
16-17          (b)  In determining who is a responsible bidder on a project
16-18    for the construction of public improvements, the governing body of
16-19    the municipality may take into account the safety record of the
16-20    bidder or any officer, partner, associate, permanent or temporary
16-21    employee, agent, or other representative of [the firm, corporation,
16-22    partnership, or institution represented by] the bidder[, or of
16-23    anyone acting for such a firm, corporation, partnership, or
16-24    institution] if:
16-25                (1)  the governing body has adopted a written
16-26    definition and criteria for accurately determining the safety
16-27    record of a bidder;
 17-1                (2)  the governing body has given notice to prospective
 17-2    bidders in the bid specifications that the safety record of a
 17-3    bidder may be considered in determining the responsibility of the
 17-4    bidder; and
 17-5                (3) the determinations are not arbitrary and
 17-6    capricious.
 17-7          (c)  The municipality is not required to award a contract to
 17-8    the lowest bidder if the municipality determines that the bidder:
 17-9                (1)  does not meet the criteria for responsibility
17-10    established by the municipality under this section; or
17-11                (2)  has been disqualified from bidding under the
17-12    procedures established under Section 252.027.
17-13          (d)  The municipality may require a bidder to submit any
17-14    information relevant and necessary to make a determination of
17-15    responsibility under this section.
17-16          Sec. 252.027.  DISQUALIFICATION PROCEDURES. (a) The governing
17-17    body of the municipality may establish procedures for disqualifying
17-18    a person from bidding on a contract under this subchapter if the
17-19    person in the previous five years has:
17-20                (1)  defaulted on a contract with the municipality;
17-21                (2)  demonstrated a history of poor or untimely
17-22    performance; or
17-23                (3)  persistently violated the safety record standards
17-24    established under Section 252.026(b).
17-25          (b)  The governing body of the municipality may provide that
17-26    the person disqualified may not submit a bid to the municipality
17-27    for a period of:
 18-1                (1)  not more than one year for the first
 18-2    disqualification; and
 18-3                (2)  not more than three years for each subsequent
 18-4    disqualification.
 18-5          (c)  The procedures adopted by the governing body of the
 18-6    municipality must provide reasonable notice and an opportunity for
 18-7    a hearing for a person who is disqualified and for a person who
 18-8    seeks reinstatement from disqualification.
 18-9          Sec. 252.028.  PERSONS PROHIBITED FROM BIDDING. (a)  A person
18-10    may not submit a bid in response to a bid request if the person
18-11    volunteers or is hired by the municipality to:
18-12                (1)  draft the municipality's bid specifications for
18-13    the bid request;
18-14                (2)  evaluate the specifications for the bid request;
18-15    or
18-16                (3)  evaluate the bids received in response to the bid
18-17    request.
18-18          (b)  In this subsection, "bidder" includes an officer,
18-19    partner, associate, permanent or temporary employee, agent, or
18-20    other representative of the bidder.  A municipality may refuse to
18-21    award a contract to a bidder who during the previous five years has
18-22    violated a state or federal law applicable to the bidder in the
18-23    course of the bidder's performance under a contract with a
18-24    political subdivision or state agency as determined by:
18-25                (1)  the judgment of a court; or
18-26                (2)  a formal decision of a state or federal agency
18-27    after notice and hearing.
 19-1          Sec. 252.029 [252.044].  CONTRACTOR'S BOND. [(a)]  If the
 19-2    contract is for the construction of public improvements [works],
 19-3    the bidder to whom the contract is awarded must execute a payment
 19-4    bond and, if necessary, a performance [good and sufficient] bond[.
 19-5    The bond must be:]
 19-6                [(1)  in the full amount of the contract price;]
 19-7                [(2)  conditioned that the contractor will faithfully
 19-8    perform the contract; and]
 19-9                [(3)  executed,] in accordance with Chapter 2253,
19-10    Government Code, executed by a surety company authorized to do
19-11    business in the state.
19-12          [(c)  The governing body of a home-rule municipality by
19-13    ordinance may adopt the provisions of this section and Chapter
19-14    2253, Government Code, relating to contractors' surety bonds,
19-15    regardless of a conflicting provision in the municipality's
19-16    charter.]
19-17          Sec. 252.030 [252.047].  PAYMENT METHOD FOR CERTAIN
19-18    CONTRACTS. The [If the contract is for the construction of public
19-19    works or for the purchase of materials, equipment, and supplies,
19-20    the] municipality may award a [let] the contract under this
19-21    subchapter on a lump-sum basis or unit price basis as the governing
19-22    body of the municipality determines.  If the contract is awarded
19-23    [let] on a unit price basis, the information furnished in the
19-24    notice to bidders must specify the approximate quantity needed,
19-25    based on the best available information, but payment to the
19-26    contractor must be based on the actual quantity constructed or
19-27    supplied.
 20-1          Sec. 252.031 [252.048].  CHANGE ORDERS. (a)  If changes in
 20-2    plans or specifications are necessary after the performance of the
 20-3    contract is begun or if it is necessary to decrease or increase the
 20-4    quantity of work to be performed or of materials, equipment, or
 20-5    supplies to be furnished, the governing body of the municipality
 20-6    may approve change orders making the changes.
 20-7          (b)  The total contract price may not be increased because of
 20-8    the changes unless additional money for increased costs is
 20-9    appropriated for that purpose from available current funds [or is
20-10    provided for by the authorization of the issuance of time
20-11    warrants].
20-12          (c)  If a change order involves a decrease or an increase of
20-13    $25,000 or less, the governing body may grant general authority to
20-14    an administrative official of the municipality to approve the
20-15    change orders.
20-16          (d)  The original contract price may not be increased under
20-17    this section by more than 25 percent.  [The original contract price
20-18    may not be decreased under this section by more than 25 percent
20-19    without the consent of the contractor.]
20-20          Sec. 252.032 [252.049].  CONFIDENTIALITY OF INFORMATION IN
20-21    BIDS [OR PROPOSALS]. [(a)]  Trade secrets and confidential
20-22    information in competitive sealed bids are not open for public
20-23    inspection.  All other contents of a bid received, including the
20-24    bid specifications, are considered public records available for
20-25    public inspection after the bids are publically opened and read
20-26    aloud
20-27          [(b)  If provided in a request for proposals, proposals shall
 21-1    be opened in a manner that avoids disclosure of the contents to
 21-2    competing offerors and keeps the proposals secret during
 21-3    negotiations.  All proposals are open for public inspection after
 21-4    the contract is awarded, but trade secrets and confidential
 21-5    information in the proposals are not open for public inspection].
 21-6             (Sections 252.033-252.040 reserved for expansion
 21-7      SUBCHAPTER C.  ELECTRONIC ONLINE COMPETITIVE BIDDING PROCEDURES
 21-8          Sec. 252.041.  PURPOSE. The purpose of this subchapter is to:
 21-9                (1)  provide an alternative medium for conducting
21-10    competitive sealed bidding; and
21-11                (2)  optimize the efficient technology offered by
21-12    Internet-based resources.
21-13          Sec. 252.042. APPLICABILITY. (a)  This subchapter applies to
21-14    contracts and expenditures described by Subchapter B.
21-15          (b)  Except as provided by this subchapter, the procedures of
21-16    this subchapter may be used in place of the procedures provided by
21-17    Subchapter B for competitive sealed bidding.
21-18          Sec. 252.043.  APPLICABILITY OF GENERAL COMPETITIVE BIDDING
21-19    PROCEDURES. Sections 252.024-252.031 apply to the procedures for
21-20    awarding a contract under this subchapter.
21-21          Sec. 252.044.  AUTHORITY TO CONDUCT OR CONTRACT FOR ONLINE
21-22    BIDDING. (a)  If the competitive sealed bidding requirements of
21-23    Subchapter B apply to the contract, a municipality may:
21-24                (1)  conduct the bidding process online on its Internet
21-25    website, if the municipality has an Internet website; or
21-26                (2)  enter into an agreement with an online bidding or
21-27    auction service to conduct the bidding process online on behalf of
 22-1    the municipality.
 22-2          (b)  An agreement with an online bidding or auction service:
 22-3                (1)  must include a provision that requires the service
 22-4    to strictly comply with this subchapter; and
 22-5                (2)  may not include a provision that requires the
 22-6    municipality to indemnify or release the online bidding or auction
 22-7    service for or from any type of liability.
 22-8          Sec. 252.045.  NOTICE REQUIREMENTS. (a)  The notice
 22-9    requirements of this subchapter apply to a contract awarded using
22-10    the online bidding process provided by this subchapter.
22-11          (b)  Notice of the request for online bids must be published:
22-12                (1)  on the municipality's Internet website, if the
22-13    municipality has an Internet website, or on the Internet website of
22-14    the online bidding or auction service contracted by the
22-15    municipality to conduct the online bidding process; and
22-16                (2)  in a newspaper of general circulation published in
22-17    the municipality.
22-18          (c)  The notice required by Subsection (b) must be published
22-19    not later than the 14th day before the date scheduled for the
22-20    online bidding to conclude.  The notice published in a newspaper
22-21    must be published once within the period prescribed by this
22-22    subsection.  The notice published on an Internet website must
22-23    remain continuously posted until the online bidding concludes.
22-24          (d)  The notice required by this section must contain the
22-25    following information:
22-26                (1)  a statement informing the bidders that the bidding
22-27    will be conducted online as provided by this subchapter;
 23-1                (2)  a specific description of the goods or services to
 23-2    be procured;
 23-3                (3)  the date and time of any pre-bid conference
 23-4    scheduled by the municipality;
 23-5                (4)  the date and time that online bidding is scheduled
 23-6    to begin and conclude;
 23-7                (5)  the universal resource locator address of the
 23-8    municipality's Internet website, if the municipality has an
 23-9    Internet website, or the Internet website of the online bidding or
23-10    auction service contracted by the municipality where:
23-11                      (A)  the online bidding is scheduled to occur;
23-12    and
23-13                      (B)  a complete copy of the bid specifications
23-14    and any details and drawings required to prepare a bid are provided
23-15    in a downloadable read-only format that is accessible on any system
23-16    software platform;
23-17                (6)  the business address of the municipality where
23-18    potential bidders may obtain a paper copy of the specifications or
23-19    requirements for the request for bids; and
23-20                (7)  a sample copy of the proposed online bid form that
23-21    will be used for online bidding and instructions for filling out
23-22    the form during the online bidding process.
23-23          (e)  The municipality is not required to comply with
23-24    Subsection (d)(5)(B) if the specifications, details, or drawings
23-25    are of a nature, size, quantity, or format that they cannot be
23-26    provided online in a downloadable read-only format. [REFERENDUM ON
23-27    ISSUANCE OF TIME WARRANTS. (a)  If, by the time set for letting a
 24-1    contract under this chapter, a written petition with the required
 24-2    signatures is filed with the municipal secretary or clerk
 24-3    requesting the governing body of the municipality to order a
 24-4    referendum on the question of whether time warrants should be
 24-5    issued for an expenditure under the contract, the governing body
 24-6    may not authorize the expenditure or finally award the contract
 24-7    unless the question is approved by a majority of the votes received
 24-8    in the referendum.  The petition must be signed by at least 10
 24-9    percent of the qualified voters of the municipality whose names
24-10    appear as property taxpayers on the municipality's most recently
24-11    approved tax rolls.]
24-12          [(b)  If a petition is not filed, the governing body may
24-13    finally award the contract and issue the time warrants.  In the
24-14    absence of a petition, the governing body may, at its discretion,
24-15    order the referendum.]
24-16          [(c)  The provisions of Subtitles A and C, Title 9,
24-17    Government Code, relating to elections for the issuance of
24-18    municipal bonds and to the issuance, approval, registration, and
24-19    sale of bonds govern the referendum and the time warrants to the
24-20    extent those provisions are consistent with this chapter. However,
24-21    the time warrants may mature over a term exceeding 40 years only if
24-22    the governing body finds that the financial condition of the
24-23    municipality will not permit payment of warrants issued for a term
24-24    of 40 years or less from taxes that are imposed substantially
24-25    uniformly during the term of the warrants.]
24-26          [(d)  This section does not supersede any additional rights
24-27    provided by the charter of a special-law municipality and relating
 25-1    to a referendum.]
 25-2          Sec. 252.046.  CONFIDENTIALITY OF ONLINE BIDDING. (a)  The
 25-3    municipality may not disclose the contents of an online bid to
 25-4    other bidders during the online bidding process.
 25-5          (b)  The contents of an online bid, excluding confidential
 25-6    information protected by law, becomes a public record and is
 25-7    available for public inspection at the completion of the online
 25-8    bidding process. [Sec. 252.050.  LEASE-PURCHASE OR INSTALLMENT
 25-9    PURCHASE OF REAL PROPERTY. (a)  This section applies only to a
25-10    lease-purchase or installment purchase of real property financed by
25-11    the issuance of certificates of participation.]
25-12          [(b)  The governing body of a municipality may not make an
25-13    agreement under which the municipality is a lessee in a
25-14    lease-purchase of real property or is a purchaser in an installment
25-15    purchase of real property unless the governing body first obtains
25-16    an appraisal by a qualified appraiser who is not an employee of the
25-17    municipality.  The purchase price may not exceed the fair market
25-18    value of the real property, as shown by the appraisal.]
25-19             (Sections 252.047-252.060 reserved for expansion
25-20                 SUBCHAPTER D.  REVERSE AUCTION PROCEDURES
25-21          Sec. 252.061.  APPLICABILITY. (a)  This subchapter applies to
25-22    contracts and expenditures described by Subchapter B.
25-23          (b)  Except as provided by this subchapter, the procedures of
25-24    this subchapter may be used in place of the procedures provided by
25-25    Subchapter B for competitive sealed bidding.
25-26          Sec. 252.062.  APPLICABILITY OF ONLINE BIDDING PROCEDURES.
25-27    (a)  A municipality may conduct a reverse auction or contract with
 26-1    an online bidding or auction service to conduct a reverse auction
 26-2    in the same manner as provided for electronic online bidding under
 26-3    Section 252.044.
 26-4          (b)  A municipality that intends to use a reverse auction
 26-5    process to award a contract must provide notice as prescribed by
 26-6    Section 252.045.
 26-7          Sec. 252.063.  CONFIDENTIALITY. (a)  The municipality may
 26-8    disclose to other bidders during the reverse auction process the
 26-9    contents of an online bid, excluding confidential information
26-10    protected by law.  The municipality may not disclose to other
26-11    bidders during the reverse auction process the name of the bidder
26-12    who has submitted a specific bid.
26-13          (b)  At the completion of the reverse auction process, the
26-14    contents of all online bids, excluding confidential information
26-15    protected by law, become public records and are available for
26-16    public inspection.
26-17          Sec. 252.064.  APPLICABILITY OF COMPETITIVE BIDDING
26-18    PROCEDURES. (a)  Sections 252.024-252.031 apply to the procedures
26-19    for awarding a contract under this subchapter.
26-20          (b)  The following do not apply to the procedures for
26-21    awarding a contract under this subchapter:
26-22                (1)  Section 271.905; and
26-23                (2)  Subchapter A, Chapter 2252, Government Code.
26-24             (Sections 252.065-252.080 reserved for expansion
26-25            SUBCHAPTER E.  SPECIAL SERVICES CONTRACT PROCEDURES
26-26          Sec. 252.081.  APPLICABILITY. (a)  This subchapter applies
26-27    only to special services contracts.
 27-1          (b)  This subchapter does not apply to a contract for
 27-2    professional services.
 27-3          Sec. 252.082.  APPLICABILITY OF COMPETITIVE BIDDING
 27-4    PROCEDURES. Unless a municipality uses the competitive bidding
 27-5    procedures prescribed by Subchapter B or C, the following do not
 27-6    apply to the procedures for awarding a contract under this
 27-7    subchapter:
 27-8                (1)  Section 271.905; and
 27-9                (2)  Subchapter A, Chapter 2252, Government Code.
27-10          Sec. 252.083.  PURCHASING PROCEDURE OPTIONS; BEST VALUE
27-11    STANDARD. (a)  In entering into a special services contract, a
27-12    municipality may use any of the following methods that provides the
27-13    best value for the municipality:
27-14                (1)  request for proposal under this subchapter using
27-15    the procedures for:
27-16                      (A)  competitive sealed proposals by public
27-17    notice under Section 252.084; or
27-18                      (B)  proposals by direct solicitation under
27-19    Section 252.085;
27-20                (2)  competitive bidding under Subchapter B or C;
27-21                (3)  reverse auction under Subchapter D;
27-22                (4)  a cooperative purchasing agreement under
27-23    Subchapter D, Chapter 271;
27-24                (5)  an interlocal agreement authorized by Chapter 791,
27-25    Government Code, or any other intergovernmental agreement
27-26    authorized by law; or
27-27                (6)  a catalog purchase under Subchapter B, Chapter
 28-1    2157, Government Code, if authorized by Section 2157.067,
 28-2    Government Code.
 28-3          (b)  In determining the best value for the municipality under
 28-4    the request for proposal procedures of this subchapter, the
 28-5    municipality may consider:
 28-6                (1)  the purchase price;
 28-7                (2)  the reputation of the vendor and of the vendor's
 28-8    goods or services;
 28-9                (3)  the quality of the vendor's goods or services;
28-10                (4)  the extent to which the goods or services meet the
28-11    municipality's needs;
28-12                (5)  the vendor's past history of performance on
28-13    similar contracts and the vendor's past relationship with the
28-14    municipality, including consideration of the responsibility
28-15    standards described by Section 252.026 and the disqualification
28-16    criteria prescribed by Section 252.027;
28-17                (6)  the impact on the ability of the municipality to
28-18    comply with laws, rules, and policies relating to historically
28-19    underutilized or disadvantaged businesses;
28-20                (7)  the total long-term cost to the municipality to
28-21    acquire the vendor's goods or services, including life cycle costs
28-22    if applicable;
28-23                (8)  the reasonableness of the contract terms and
28-24    conditions proposed by the vendor; and
28-25                (9)  any other relevant factor that a private business
28-26    entity would consider in selecting a vendor.
28-27          (c)  The governing body of the municipality, or an officer or
 29-1    employee designated by the governing body, may adopt rules,
 29-2    procedures, and guidelines consistent with this chapter and other
 29-3    law for acquiring goods or services under this subchapter that
 29-4    provide a reasonable and fair opportunity for competitiveness under
 29-5    the purchasing methods described by Sections 252.084 and 252.085.
 29-6          (d)  A municipality may prequalify potential vendors to
 29-7    determine the vendors' eligibility to submit proposals under
 29-8    Section 252.084 or 252.085 based upon the criteria described by
 29-9    Subsection (b).  If more than one reasonably qualified entity is
29-10    willing and available to perform a contract, the municipality may
29-11    not purposefully set prequalification criteria that cause only one
29-12    vendor to be considered eligible to participate in the process.
29-13          (e)  The municipality shall encourage maximum participation
29-14    by historically underutilized or disadvantaged businesses.
29-15          Sec. 252.084 [252.042].  PROCEDURE FOR COMPETITIVE SEALED
29-16    PROPOSAL BY PUBLIC NOTICE [REQUESTS FOR PROPOSALS FOR CERTAIN
29-17    PROCUREMENTS]. (a)  Before a municipality may enter into a special
29-18    services contract to acquire goods or services through competitive
29-19    sealed proposal by public notice, the municipality must comply with
29-20    the procedures prescribed by this section [Requests for proposals
29-21    made under Section 252.021 must solicit quotations and must specify
29-22    the relative importance of price and other evaluation factors].
29-23          (b)  The municipality shall comply with the rules,
29-24    procedures, and guidelines adopted under Section 252.083(c).
29-25    Notice of the request for proposal must be given in the same manner
29-26    as prescribed for competitive sealed bids under Section 252.023(a).
29-27          (c)  Requests for proposals under this subchapter must
 30-1    solicit quotations and must specify the relative importance of
 30-2    price and the other evaluation factors described by Section
 30-3    252.083(b).
 30-4          (d)  A person is restricted from submitting a proposal under
 30-5    this section in the same manner as a person is restricted from
 30-6    submitting a bid under Section 252.028(a).
 30-7          (e)  Discussions in accordance with the terms of a request
 30-8    for proposals and with regulations adopted by the governing body of
 30-9    the municipality may be conducted with offerors who submit
30-10    proposals and who are determined to be reasonably qualified for the
30-11    award of the contract.  Reasonably qualified offerors [Offerors]
30-12    shall be treated fairly and equally with respect to any opportunity
30-13    for discussion and revision of proposals.  To obtain the best final
30-14    offers, revisions may be permitted after submissions and before the
30-15    award of the contract.
30-16          (f)  A municipality may not disclose the contents of
30-17    competing offerors' proposals during negotiations.  All contents of
30-18    a proposal, excluding information protected by law, are considered
30-19    public records available for public inspection after the contract
30-20    is awarded.
30-21          Sec. 252.085.  PROCEDURE FOR REQUEST FOR PROPOSAL BY DIRECT
30-22    SOLICITATION. (a)  Before a municipality may enter into a special
30-23    services contract to acquire goods or services through competitive
30-24    sealed proposal by direct solicitation, the municipality must
30-25    comply with the procedures prescribed by this section.
30-26          (b)  The municipality shall comply with the rules,
30-27    procedures, and guidelines adopted under Section 252.083(c).
 31-1          (c)  Notice of the request for proposal by direct
 31-2    solicitation is sufficient if the notice informs the offerors
 31-3    identified by the municipality of:
 31-4                (1)  the goods or services required; and
 31-5                (2)  the municipality's expectations under the
 31-6    contract.
 31-7          (d)  The municipality may negotiate for the award of the
 31-8    contract with any of the offerors who submit proposals and who are
 31-9    determined by the municipality to be reasonably qualified.
31-10          (e)  A person is restricted from submitting a proposal under
31-11    this section in the same manner as a person is restricted from
31-12    submitting a bid under Section 252.028(a).
31-13          (f)  The municipality must award the contract to the most
31-14    responsible, most qualified offeror whose proposal is determined to
31-15    be the most advantageous to the municipality.
31-16             (Sections 252.086-252.100 reserved for expansion
31-17                      SUBCHAPTER F [D].  ENFORCEMENT
31-18          Sec. 252.101 [252.061].  INJUNCTION. If a [the] contract is
31-19    made without compliance with this chapter, the contract [it] is
31-20    void and the performance of the contract, including the payment of
31-21    any money under the contract, may be enjoined by any property tax
31-22    paying resident of the municipality.
31-23          Sec. 252.102 [252.062].  CRIMINAL PENALTIES. (a)  A person
31-24    commits an offense if the person intentionally or knowingly:
31-25                (1)  damages, tampers or interferes with, transmits a
31-26    computer software virus into, prevents the effective operation of,
31-27    or otherwise harms a municipality's online bidding document or
 32-1    online bidding process under Subchapter C or D; or
 32-2                (2)  enters into or participates in a municipal online
 32-3    bidding process under Subchapter C or D with the intent to damage,
 32-4    tamper or interfere with, transmit a computer software virus into,
 32-5    prevent the effective operation of, or otherwise harm any portion
 32-6    of a municipality's computer hardware or software or the
 32-7    municipality's computer system.
 32-8          (b)  An offense under Subsection (a) is a third degree
 32-9    felony.
32-10          (c)  A person commits an offense if the person intentionally
32-11    or knowingly violates Section 252.028(a).  An offense under this
32-12    subsection is a Class B misdemeanor.
32-13          (d)  A municipal officer or employee commits an offense if
32-14    the officer or employee intentionally or knowingly makes or
32-15    authorizes separate, sequential, or component purchases to avoid
32-16    the procurement [competitive bidding] requirements of this chapter
32-17    [Section 252.021].  An offense under this subsection is a Class B
32-18    misdemeanor.
32-19          (e) [(b)]  A municipal officer or employee commits an offense
32-20    if the officer or employee intentionally or knowingly violates
32-21    Section 252.021, other than by conduct described by Subsection (d)
32-22    [(a)].  An offense under this subsection is a Class B misdemeanor.
32-23          (f) [(c)]  A municipal officer or employee commits an offense
32-24    if the officer or employee intentionally or knowingly violates this
32-25    chapter, other than by conduct described by another subsection of
32-26    this section [Subsection (a) or (b)].  An offense under this
32-27    subsection is a Class C misdemeanor.
 33-1          Sec. 252.103 [252.063].  REMOVAL; INELIGIBILITY. (a)  The
 33-2    final conviction of a municipal officer or employee for an offense
 33-3    under Section 252.102(d) or (e) [252.062(a) or (b)] results in the
 33-4    immediate removal from office or employment of that person.
 33-5          (b)  For four years after the date of the final conviction,
 33-6    the removed officer or employee is ineligible:
 33-7                (1)  to be a candidate for or to be appointed or
 33-8    elected to a public office in this state;
 33-9                (2)  to be employed by the municipality with which the
33-10    person served when the offense occurred; and
33-11                (3)  to receive any compensation through a contract
33-12    with that municipality.
33-13          (c)  This section does not prohibit the payment of retirement
33-14    or workers' compensation benefits to the removed officer or
33-15    employee.
33-16          SECTION 2. The changes in law made by Chapter 252, Local
33-17    Government Code, as reorganized and amended by this Act, apply only
33-18    to a contract for which the notice soliciting bids or proposals is
33-19    first published or posted on or after September 1, 2001.  A
33-20    contract for which the notice soliciting bids or proposals is first
33-21    published or posted before September 1, 2001, is subject to the law
33-22    as it existed at the time the notice was first published or posted,
33-23    and the former law is continued in effect for that purpose.
33-24          SECTION 3. This Act takes effect September 1, 2001.