79R2453 MTB-D

By:  Isett                                                        H.B. No. 3274


A BILL TO BE ENTITLED
AN ACT
relating to the award of state contracts for commercially available services. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Subchapter C, Chapter 2155, Government Code, is amended by adding Section 2155.1445 to read as follows: Sec. 2155.1445. ANALYSIS OF SERVICES AND FUNCTIONS. (a) In this section, "inherently governmental in nature" means a function or service that involves the exercise or use of governmental authority or discretion. (b) This section applies only to the Health and Human Services Commission and to each health and human services agency. (c) If the Health and Human Services Commission determines that a proposed contract or proposed contract amendment would lead to the loss of at least 50 current state employee positions, then before the commission may issue a competitive solicitation for the contract or amend the contract the State Council on Competitive Government shall perform an analysis to determine if any of the services or functions to be performed under the contract or contract amendment are inherently governmental in nature. (d) If the State Council on Competitive Government determines that a service or function to be performed under the contract or contract amendment is inherently governmental in nature, the Health and Human Services Commission may not: (1) contract with a private entity to perform the service or function; or (2) amend the contract, if a private entity is to perform the service or function under the contract amendment. (e) The analysis required under this section must use the standards and policies contained in the Office of Federal Procurement Policy, Policy Letter 92-1, or comparable guidelines developed by the State Council on Competitive Government. SECTION 2. Section 2162.102, Government Code, is amended by amending Subsection (c) and adding Subsections (e), (f), and (g) to read as follows: (c) In performing its duties under this chapter, the council may: (1) require a state agency to conduct a hearing, study, review, or cost estimate, including an agency in-house cost estimate or a management study, concerning any aspect of a service identified under Subsection (a); (2) develop and require state agencies to use methods to accurately and fairly estimate and account for the cost of providing a service identified under Subsection (a); (3) require that a service identified under Subsection (a) be submitted to competitive bidding or another process that creates competition with private commercial sources; (4) prescribe, after consulting affected state agencies, the specifications and conditions of purchase procedures that must be followed by the commission and a state agency or a private commercial source engaged in competitive bidding to provide a service identified under Subsection (a); (5) award a contract to a state agency providing the service, another state agency, a private commercial source, or a combination of those entities [, if the bidder presents the best and most reasonable bid, which is not necessarily the lowest bid]; and (6) determine the terms of a contract for service or interagency contract to provide a service identified under Subsection (a). (e) In performing its duties under this section, the council shall create a confidential model for each commercially available service identified to determine how and at what cost a state agency could most efficiently provide the service. (f) The council may not award a contract under this section to a private commercial contractor unless the contractor can perform the service with a comparable or better level of quality at a cost that is at least 10 percent lower than the model cost created under Subsection (e). If the council determines that the contract involves excessive financial risk, the council may require that the contractor provide greater cost savings to compensate for that risk. (g) When filling employee positions under a contract awarded under this section, a contractor shall give first consideration to an applicant formerly employed with a state agency whose employee position was terminated as a result of the award of the contract. SECTION 3. Section 2162.103, Government Code, is amended to read as follows: Sec. 2162.103. COST COMPARISON AND CONTRACT CONSIDERATIONS. (a) In comparing the cost of providing a service, the council shall consider the: (1) cost of supervising the work of a private contractor; [and] (2) cost of a state agency's performance of the service, including: (A) the costs of the comptroller, attorney general, and other support agencies; and (B) other indirect costs related to the agency's performance of the service; and (3) cost of state unemployment claims for state employee positions that would be terminated if a private contractor was awarded the contract. (b) A bid or contract must include an analysis of [health care benefits,] retirement [,] and workers' compensation insurance for a contractor's employees that are reasonably comparable to the [health care benefits,] retirement[,] and workers' compensation insurance benefits of the state. (c) In comparing the cost of providing a service, the council shall: (1) require a bid of a private contractor, including any subcontractors, to include health care benefits for the employees performing the services under the contract; or (2) add to a bid amount of a private contractor that does not include health care benefits for the contractor's employees, including subcontractor's employees, the cost of health care benefits for employees performing the services under the contract based on individual premium costs for employees covered by the Employees Retirement System of Texas. SECTION 4. Section 2163.001, Government Code, is amended by adding Subsection (e) to read as follows: (e) In performing its duties under this section, the commission shall create a confidential model for each commercially available service identified to determine how and at what cost the commission could most efficiently provide the service. SECTION 5. Section 2163.002, Government Code, is amended by amending Subsection (b) and by adding Subsection (c) to read as follows: (b) In comparing the cost of providing a service, the commission must include the: (1) cost of supervising the work of a private contractor; [and] (2) cost to the state of the commission's performance of the service, including: (A) the costs of the office of the attorney general and other support agencies; and (B) other indirect costs related to the commission's performance of the service; and (3) cost of state unemployment claims for state employee positions that would be terminated if a private contractor were awarded the contract. (c) In comparing the cost of providing a service, the commission shall: (1) require a bid of a private contractor, including any subcontractors, to include health care benefits for the employees performing services under the contract; or (2) add to a bid amount of a private contractor that does not include health care benefits for the contractor's employees, including subcontractor's employees, the cost of health care benefits for employees performing services under the contract based on individual premium costs for employees covered by the Employees Retirement System of Texas. SECTION 6. Section 2163.003, Government Code, is amended by adding Subsections (c) and (d) to read as follows: (c) The commission may not award a contract under this section to a private commercial contractor unless the contractor can perform the service at a cost that is at least 10 percent lower than the model cost created under Section 2163.001(e). If the commission determines that the contract involves excessive financial risk, the commission may require that the contractor provide greater cost savings to compensate for that risk. (d) When filling employee positions under a contract awarded under this section, a contractor shall give first consideration to an applicant formerly employed with a state agency whose employee position was terminated as a result of the award of the contract. SECTION 7. The changes in law made by Section 1 of this Act apply only to a contract or contract amendment for which a state agency first advertises or otherwise solicits bids, proposals, offers, or qualifications on or after the effective date of this Act. A contract or contract amendment for which a state agency first advertised or otherwise solicited bids, proposals, offers, or qualifications before that date is governed by the law in effect when the first advertisement or solicitation was given and the former law is continued in effect for that purpose. SECTION 8. This Act takes effect September 1, 2005.