By:  West                                                         S.B. No. 1544

A BILL TO BE ENTITLED
AN ACT
relating to purchasing practices of public junior college and community college districts. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. SHORT TITLE. This Act may be cited as the Public Junior College and Community College District Purchasing Act. SECTION 2. Title 2, Subchapter B, Education Code is amended by changing Section 44.0311 to read: APPLICABILITY TO JUNIOR COLLEGE DISTRICTS. (a) This subchapter does not apply [applies] to junior college districts. SECTION 3. LOCAL GOVERNMENT CODE TITLE 8. ACQUISITION, SALE, OR LEASE OF PROPERTY, Section 271.023. CONFLICT OF LAWS. is amended as follows: To the extent of any conflict: (a) the provisions of Education Code Subchapter B, Chapter 44, relating to the purchase of goods and services under contract by a school district prevail over this subchapter; and (b) the provisions of Education Code Title 3, Higher Education, Subchapter K, Chapter 130, relating to the purchase of goods and services under contract by a junior college prevail over this subchapter. SECTION 4. Education Code Title 3, HIGHER EDUCATION, CHAPTER 51. JUNIOR COLLEGE DISTRICTS, Subchapter T, CONSTRUCTION AND REPAIR OF PERMANENT IMPROVEMENTS Chapter 51.776 (2) definitions is amended as follows: "Board" means the governing body of an institution other than a junior college. SECTION 5. Education Code Title 3, HIGHER EDUCATION, CHAPTER 130. JUNIOR COLLEGE DISTRICTS, Subchapter G, Chapter 130. is amended by deleting Section 130.010 and Section 130.0101. SECTION 6. Education Code Title 3, HIGHER EDUCATION, CHAPTER 130. JUNIOR COLLEGE DISTRICTS, is amended by adding Subchapter K, Chapter 130.3, PURCHASING CONTRACTS OTHER THAN CONSTRUCTION 130.301. Definitions: (a) "district" means a public junior college or community college district. (b) "board of trustees" means the governing board of a junior college or community college district. (c) purchase of goods includes: (1) contracting for the rights to use rather than own goods, (2) materials and labor incidental to the delivery and installation of personal property. (3) The definition of goods does not include real property. (d) "bidder" or "vendor" may be used interchangeably to identify an entity that responds to a competitive bid, proposal or qualification. Additionally, the word "bid" may be used to identify the solicitation of, or response to a competitive bid, proposal or qualification. (e) "Services" does not include construction services and does not apply to a contract for professional services rendered, including services of an architect, engineer, auditor, accountant, attorney, or fiscal agent. For other professional services including those rendered by a financial consultant, auctioneer, personnel services contractor, travel agent, a technology or educational consultant, or a business engaged to teach approved courses, a district may contract for such professional services in the manner provided by Section 2254.003, Government Code, in lieu of the methods provided by this section. 130.302. To the extent of any conflict, this subchapter prevails over any other law relating to the purchasing of goods and services except a law relating to contracting with historically underutilized businesses. 130.303. PURCHASING CONTRACTS METHODS (a) Except as provided by this subchapter, all contracts for the purchase of goods or services valued at $25,000 or more in the aggregate for each twelve (12) month fiscal year or other permitted period shall be made by the method, of the following methods, that provides the best value for the district: (1) competitive sealed bids; (2) competitive sealed proposals; (3) a catalogue purchase as provided by Subchapter B, Chapter 2157, Government Code; (4) an interlocal contract as provided under Chapter 791 Government Code; (5) the reverse auction procedure as defined by Section 2155.062(d), Government Code; (6) the formation of a political subdivision corporation under Section 304.001, Local Government Code; (b) Only one of the methods listed in section 130.303(a) may be used for any individual contract and prior to advertising as required in Section 130.306, the district must determine which method provides the best value for the district. (c) When the method of contracting uses the competitive sealed proposal method, when the proposals are opened, the district shall reveal the names of the companies submitting proposals, but may at its sole option, keep the contents of the proposals confidential until concluding negotiations and award of a contract. (d) Contracts for goods or services that will result in an income of $25,000 or more during the term of the contract, shall be solicited and awarded in the same manner as a purchase contract. Such contracts include the sale of personal property. (e) A district may acquire insurance using a two step request for proposal process. The first step shall be to determine which insurance companies are represented by agents interested in providing insurance for the district. In the second step, the district shall notify the agents as to which insurance companies the agents represent and submit offers for providing insurance. In the first step, should more than one agent indicate a desire to represent the same company, the agent with the longest and largest relationship with the insurance company shall be authorized to submit a proposal for the designated insurance company. When the notice of the request for proposal for insurance is published as required under Section 130.306, notice of the second step is not required to be advertised. However, the interested parties shall be given notice of the date, time and place where their proposals are to be submitted. Proposal received after the date and time stated in the request for proposals shall not be considered. (f) Without complying with Section 130.303(a), a district may purchase an item or service that is available from only one source, including: (1) an item for which competition is precluded because of the existence of a patent, copyright, secret process, or monopoly; (2) a film, recording, periodical, manuscript, book or computer software; (3) a utility service, including gas, or water; (4) a captive replacement part or component for equipment; (5) a product needed to match or work with like products; (6) technical or specialized services including advertising, audio/video production, and the repair and maintenance of specialized equipment. (g) Without complying with Section 103.303(a), a district may purchase advertising services, meeting and catering services, and travel services including airfare, ground transportation and lodging. A district shall exercise reasonable and prudent efforts to determine whether a contract with a company will provide the best value to the district. The district shall document the process for selecting the provider of said services including a list of companies contacted and the basis for selecting the provider. Any company that has provided written notice to the district that it is interested in being considered as a supplier of the subject services shall be given the opportunity to make an offer to provide the services. After rating and ranking the offers, the district shall attempt to negotiate a contract with the highest ranked company. If a contract cannot be negotiated with the highest ranked company, the next highest company shall be contacted. (h) Without complying with Section 103.303(a), a district may purchase an item or service under: (1) an interlocal contract; (2) a contract established by the Texas Building and Procurement Commission or Department of Information Resources in accordance with Chapter 2157, Government Code, including travel services, telephone service, computers and computer-related equipment and software; (i) Where the Texas Building and Procurement Commission, an Institution of higher education, as defined by Education Code 61.003(8), or a Texas political subdivision, county, or municipality has entered into a contract with a company to provide goods or services other than construction services, during the term of the contract a district may purchase such goods or services, directly from the company if the company agrees to sell such goods or services to the district at the same or lower costs stated in the contract. Provided that the original contract was awarded in compliance with the statutory requirements applicable to the governmental entity that awarded the contract, purchases made under such contracts shall satisfy the competitive bid requirements of this subchapter, provided the district's purchase order references the original contract and identifies the parties thereto. 130.304. EVALUATION AND AWARDING CONTRACTS: (a) Except as provided by this subchapter, a contract awarded by a district shall be to the lowest responsible vendor offering the best value to the district according to the selection criteria that were established by the district. The district shall publish in the request for bids, proposals, or qualifications the criteria that will be used to evaluate the offer's and the relative weights given to the criteria that are known at the time of the publication. (b) In determining the lowest responsible vendor to whom to award a contract, the district may consider: (1) the purchase price; (2) the reputation of the vendor and of the vendor's goods or services; (3) the quality of the vendor's goods or services; (4) the extent to which the offered goods or services meet the district's needs; (5) the vendor's past relationship with the district; (6) the total long-term cost to the district to acquire the vendor's goods or services; (7) the extent to which the offers comply with the requirements of the request for bid, proposal or qualifications. (8) the sufficiency of the bidder's financial resources and ability to perform the contract or provide the service; (9) the bidder's ability to provide future maintenance, repair parts, and service for the use of the contract's subject. (10) the installation cost; (11) the cost of operation and maintenance of the contract's subject; (12) any other relevant factor specifically listed in the request for bids or proposals; (13) the impact on the ability of the district to comply with laws and rules relating to historically underutilized businesses; (14) compliance with a requirement for attendance at a mandatory site visit or pre-bid conference. (15) the bidders safety record, if the district: (a) has adopted a written definition and criteria for accurately determining the safety record of a bidder; (b) has given notice to prospective bidders in the bid specifications that the safety record of a bidder may be considered in determining the responsibility of the bidder; and (c) the determinations are not arbitrary and capricious. (c) A district may reject all bids, proposals or parts thereof if the rejection serves the district's interest. (d) In the method used under 130.303 (a), the district shall provide all bidders with the opportunity to bid on the same items on equal terms and have bids judged according to the same standards as set forth in the specifications. (e) A district shall receive bids under this subchapter in a fair and confidential manner. (f) Bids may be opened only by the district at a public meeting in a district owned or controlled facility. At the time a competitive bid is opened, the name of the bidder and the total bid amount shall be read out loud if a member of the public is present. At least two district employees or trustees must be present at the bid opening. When proposals or qualifications are opened, only the name of the respondents shall be read and the district shall avoid disclosing the contents of each proposal on opening the proposal and during negotiations with competing offerors. (g) A bid that has been opened may not be changed for the purpose of correcting an error in the bid price. (h) This subchapter does not change the common law right of a bidder to withdraw a bid due to a material mistake in the bid. (i) The district shall document the basis of its selection and shall make the evaluations public not later than the seventh day after the date the contract is awarded. The district shall state in writing in the contract file the reasons for making an award. (j) A contract awarded in violation of this subchapter is void. (k) The state auditor may audit purchases of goods or services by the district. (l) If a purchase is made at the campus level in a community college district with independently accredited colleges, and the district delegates purchasing decisions to the campus level, this section applies only to the campus and does not require the district to aggregate and jointly award purchasing contracts. A district that adopts site-based purchasing under this subsection shall adopt a policy to ensure that campus purchases achieve the best value to the district and are not intended or used to avoid the requirement that a district aggregate purchases under Subsection (a). (m) If district property is destroyed, stolen or severely damaged or a building or equipment, undergoes major operational or structural failure, or a contractor is unable to fulfill its obligations in providing goods or services, and the board of trustees determines that the delay posed by the methods provided for in this section would pose material threat to personal safety or potential damage to other property, prevent or substantially impair the conduct of classes or other essential district activities, then contracts for the replacement or repair of the property may be made by methods other than those required by section 103.303(a). 130.305. RULES AND PROCEDURES ADOPTED BY A DISTRICT (a) The board of trustees of the district may adopt rules and procedures for the acquisition of goods or services. (b) Except as provided in this subchapter, to increase efficiency of operations, the rules and procedures must include a requirement for the district to purchase like goods or services on a scheduled basis. (c) To achieve efficiencies of operations, contracts for the purchase of goods may cover a period of up to three years and contracts for the purchase of services may cover a term of up to five years. Such multi-year contracts must include a provision that permits termination at the end on each fiscal year. 130.306. NOTICES (a) Except as provided in this subchapter, for the method of contracting selected under section 130.303(a), notice of the time by when and place where the bids, proposals or the responses to a request for qualifications will be received and opened shall be published in the county in which the district's central administrative office is located, in at least two successive issues of any newspaper of general circulation in the county in which the district is located. The deadline for receiving bids, proposals, or responses to a request for qualifications shall not be less than ten (10) business days after the date of the last newspaper notice. If there is not a newspaper in that county, the advertising shall be published in a newspaper in the county nearest the county seat of the county in which the district's central administrative office is located. In a two-step procurement process, the time and place where the second-step bids, proposals, or responses will be received are not required to be published separately. (b) As an alternative to publishing individual notices in a newspaper, provided at least one time per week the district publishes in a newspaper of general circulation, the internet address where notices may be found, the district may publish on a public accessible Internet site, notice of bids, proposals, or responses to a request for qualifications. Such publication shall be posted every day for at least ten (10) business days prior to the deadline. (c) The notice must include the date, time and place for receiving bids, proposals or request for qualifications, a description of the goods or services, any mandatory site inspections or pre-bid meetings, where bid, proposal or qualification documents may be obtained or examined, and any required bid bond, payment bond or performance bond. 130.307. DISCUSSION AND REVISION OF PROPOSALS. (a) As provided in a request for proposals and under rules adopted by a district, the district may discuss acceptable or potentially acceptable proposals with offerors to assess an offeror's ability to meet the solicitation requirements. (b) After receiving a proposal but before making an award, the district may permit the offeror to revise the proposal to obtain the best final offer. (c) The district may not disclose information derived from proposals submitted from competing offerors in conducting discussions under this section. (d) The district shall provide each offeror an equal opportunity to discuss and revise proposals. 130.308. PRE-BID CONFERENCE (a) The district may require a principal, officer, or employee of each prospective bidder to attend a mandatory pre-bid conference conducted for the purpose of discussing contract requirements and answering questions of prospective bidders. Notice under this subsection must be included in the notice published under Section 130.306 (b) After a mandatory pre-bid conference is conducted, any additional required notice for the proposed contract may be sent only to prospective bidders who attended the conference. 130.309. TIE BIDS (a) In the case of tie bids with all factors being equal, a contract shall be awarded under rules established by the board of trustees. 130.310. BID DEPOSIT. (a) The district, as considered necessary, may require a bid deposit in an amount determined by the district. The amount of the deposit, if any, must be stated in the public notice and the invitation to bid. (b) On the award of a bid or the rejection of all bids, the district shall refund the bid deposit of an unsuccessful bidder. (c) For public work contracts, the bid deposit required by the district, if any, may only be in the in the form of a bid bond written by a surety authorized to conduct business in this state. 130.310. PERFORMANCE BOND FOR CONTRACTS OTHER THAN CONSTRUCTION. (a) A district may require a contractor to provide a performance bond in the amount of the contract before executing a contract for the purchase goods or services with a value of $100,000 or more. The bond must be written by a surety authorized to conduct business in this state. 130.311. DELEGATION. (a) The board of trustees of a district may, as appropriate, delegate its authority under this subchapter regarding an action authorized or required by this subchapter to be taken by a district to a designated person, representative, or committee. The district shall provide notice of the delegation and the limits of the delegation in the request for bids, proposals, or qualifications or in an addendum to the request. If the district fails to provide that notice, a ranking, selection, or evaluation of bids, proposals, or qualifications other than by the board of trustees in an open public meeting is advisory only. (b) The board may not delegate the authority to act regarding an action authorized or required by this subchapter to be taken by the board of trustees of a district. 130.312. ENFORCEMENT OF PURCHASE PROCEDURES: CRIMINAL PENALTIES; REMOVAL; INELIGIBILITY. (a) In this section: (1) "Component purchases" means purchases of the component parts of an item that in normal purchasing practices would be purchased in one purchase. (2) "Separate purchases" means purchases, made separately, of items that in normal purchasing practices would be purchased in one purchase. (3) "Sequential purchases" means purchases, made over a period, of items that in normal purchasing practices would be purchased in one purchase. (b) An officer, employee, or agent of a district commits an offense if the person with criminal negligence makes or authorizes separate, sequential, or component purchases to avoid the requirements of Sections 130.303 or 130.304. An offense under this subsection is a Class B misdemeanor and is an offense involving moral turpitude. (c) An officer, employee, or agent of a district commits an offense if the person with criminal negligence violates Sections 130.303 or 130.304 other than by conduct described by Subsection (b). An offense under this subsection is a Class B misdemeanor and is an offense involving moral turpitude. (d) An officer or employee of a district commits an offense if the officer or employee knowingly violates Section 130.010, other than by conduct described by Subsection (b) or (c). An offense under this subsection is a Class C misdemeanor. (e) The final conviction of a person other than a trustee of a district for an offense under Subsection (b) or (c) results in the immediate removal from office or employment of that person. A trustee who is convicted of an offense under this section is considered to have committed official misconduct for purposes of Chapter 87, Local Government Code, and is subject to removal as provided by that chapter and Section 24, Article V, Texas Constitution. For four years after the date of the final conviction, the removed person is ineligible to be a candidate for or to be appointed or elected to a public office in this state, is ineligible to be employed by or act as an agent for the state or a political subdivision of the state, and is ineligible to receive any compensation through a contract with the state or a political subdivision of the state. This subsection does not prohibit the payment of retirement benefits to the removed person or the payment of workers' compensation benefits to the removed person for an injury that occurred before the commission of the offense for which the person was removed. This subsection does not make a person ineligible for an office for which the federal or state constitution prescribes exclusive eligibility requirements. (f) A court may enjoin performance of a contract made in violation of this subchapter. A county attorney, a district attorney, a criminal district attorney, a citizen of the county in which the district is located, or any interested party may bring an action for an injunction. A party who prevails in an action brought under this subsection is entitled to reasonable attorney's fees as approved by the court. 130.313. MISCELLANEOUS COMMODITY PURCHASES. (a) This section shall apply to the purchase of tangible personal property, including produce, gasoline and fuel oil where the price of the commodity must be determined at the time the need arises. This section shall also apply to services other than construction services job order contracts. (b) The notice requirements under section 130.306 shall apply to this section. The notices shall specify the categories of personal property or services to be purchased under this section and soliciting the names, addresses, and telephone numbers of vendors that are interested in supplying any of the categories to the district. For each category, the district shall create a vendor list consisting of each qualified vendor that responds to the published notice and any additional vendors the district elects to include. (c) Before the district makes a purchase from a category of personal property or service, the district must obtain written or telephone price quotations from at least three vendors from the list for that category. If fewer than three vendors are on the list, the district shall contact each vendor on the list. Whenever possible, telephone quotes should be confirmed in writing, including email or facsimile. The bidding records must be retained with the district's competitive bidding records and are subject to audit. In determining from whom to purchase the products or services, the district may consider the provisions of section 130.304. 130.314. NOTIFICATION OF CRIMINAL HISTORY OF CONTRACTOR. (a) A person or business entity that enters into a contract with a district must give advance notice to the district if the person or an owner or operator of the business entity has been convicted of a felony. The notice must include a general description of the conduct resulting in the conviction of a felony. (b) A district may terminate a contract with a person or business entity if the district determines that the person or business entity failed to give notice as required by Subsection (a) or misrepresented the conduct resulting in the conviction. The district must compensate the person or business entity for services performed before the termination of the contract. (c) This section does not apply to a publicly held corporation. SECTION 7. Education Code Title 3, HIGHER EDUCATION, CHAPTER 130. JUNIOR COLLEGE DISTRICTS, is amended by adding Subchapter L, Chapter 130.4, CONSTRUCTION CONTRACTS. 130.401. Definitions in this Subchapter L: (a) "district" means a public junior college or community college district. (b) "board of trustees" means the governing board of a junior college or community college district. (c) "Construction" means the construction, rehabilitation, alteration, or repair of a facility, including all goods and labor incidental to the construction. (d) "Architect" means an individual registered as an architect under Chapter 478, Acts of the 45th Legislature, Regular Session, 1937 (Article 249a, Vernon's Texas Civil Statutes). (e) "Engineer" means an individual registered as a professional engineer under The Texas Engineering Practice Act (Article 3271a, Vernon's Texas Civil Statutes). (f) "bidder" or "vendor" may be used interchangeably to identify an entity that responds to a competitive bid, proposal or qualification. Additionally, the word "bid" may be used to identify the solicitation of, or response to a competitive bid, proposal or qualification. (g) "Contractor" in the context of a contract for the construction, rehabilitation, alteration, or repair of a facility means a sole proprietorship, partnership, corporation, or other legal entity that assumes the risk for constructing, rehabilitating, altering, or repairing all or part of the facility at the contracted price. (h) "Facility" means real property or public work, including buildings and associated systems, structures and components, and improved or unimproved land. (i) "Fee" in the context of a contract for the construction, rehabilitation, alteration, or repair of a facility means the payment a construction manager receives for its overhead and profit in performing its services. (j) "General conditions" in the context of a contract for the construction, rehabilitation, alteration, or repair of a facility means on-site management, administrative personnel, insurance, bonds, equipment, utilities, and incidental work, including minor field labor and materials. 130.402. METHODS OF CONSTRUCTION CONTRACTING (a) Except as provided by this subchapter, all contracts for construction valued at $25,000 or more in the aggregate shall be made by the method, of the following methods, that provides the best value for the district: (1) competitive sealed bids; (2) competitive sealed proposals; (3) a design/build contract; (4) a contract to construct, rehabilitate, alter, or repair facilities that involves using a construction manager agent; (5) a contract to construct, rehabilitate, alter, or repair facilities that involves using a construction manager at risk ; or (6) a job order contract for the minor construction, repair, rehabilitation, or alteration of a facility; (b) Only one of the methods listed in section 130.402(a) may be used for any individual contract and prior to advertising as required in Section 130.306, a district must determine which method provides the best value for the district. (c) When the method of contracting uses the competitive sealed proposal method, when the proposals are opened, the district shall reveal the names of the companies submitting proposals, but may at its sole option, keep the contents of the proposals confidential until concluding negotiations and award of a contract. (d) Job order contracts that will or may result in spending $25,000 or more with a contractor or to the district during the term of the contract, shall be solicited and awarded in the same manner as a purchase contract. (e) This section does not apply to a contract for consultants or professional services rendered, including services of an architect, engineer, auditor, accountant, attorney, or fiscal agent. For other professional services and consultants, a district may contract for such professional services in the manner provided by Section 2254.003, Government Code. or Education Code chapter 130, Subchapter K, 130.3. (f) In the method used under 130.402 (a), the district shall provide all bidders with the opportunity to bid on the same items on equal terms and have bids judged according to the same standards as set forth in the specifications. (g) A district shall receive bids under this subchapter in a fair and confidential manner. (h) Bids may be opened only by the district at a public meeting in a district owned or controlled facility. At the time a competitive bid is opened, the name of the bidder and the total bid amount shall be read out loud if a member of the public is present. At least two district employees or trustees must be present at the bid opening. When proposals or qualifications are opened, only the name of the respondents shall be read and the district shall avoid disclosing the contents of each proposal on opening the proposal and during negotiations with competing offerors. (i) A bid that has been opened may not be changed for the purpose of correcting an error in the bid price. (j) This subchapter does not change the common law right of a bidder to withdraw a bid due to a material mistake in the bid. (k) The state auditor may audit purchases of goods or services by the district. 130.403. EVALUATION AND AWARDING CONTRACTS: (a) Except as provided by this subchapter, a contract awarded by a district shall be to the lowest responsible vendor offering the best value to the district according to the selection criteria that were established by the district. The district shall publish in the request for bids, proposals, or qualifications the criteria that will be used to evaluate the offer's and the relative weights given to the criteria that are known at the time of the publication. (b) In determining the lowest responsible bidder to whom to award a contract, the district may consider: (1) the immediate and long term cost of the service; (2) the reputation of the bidder; (3) the quality of the bidder's services; (4) the extent to which the offered services meet the district's needs; (5) the bidder's past relationship with the district; (6) the extent to which the offer complies with the requirements of the request for bid, proposal or qualifications. (7) the sufficiency of the bidder's financial resources and ability to perform the contract or provide the service; (8) the bidder's ability to provide future maintenance, repair parts, and service for the use of the contract's subject. (9) the installation cost; (10) the cost of operation and maintenance of the contract's subject; (11) any other relevant factor specifically listed in the request for bids or proposals; (12) the impact on the ability of the district to comply with laws and rules relating to historically underutilized businesses; (13) compliance with a requirement for attendance at a mandatory site visit or pre-bid conference. (14) the bidders safety record, if the district: (a) has adopted a written definition and criteria for accurately determining the safety record of a bidder; (b) has given notice to prospective bidders in the bid specifications that the safety record of a bidder may be considered in determining the responsibility of the bidder; and (c) the determinations are not arbitrary and capricious. (c) A district may reject all bids, proposals, qualifications or parts thereof if the rejection serves the district's interest. (d) The district shall document the basis of its selection and shall make the evaluations public not later than the seventh day after the date the contract is awarded. The district shall state in writing in the contract file the reasons for making an award. (e) A contract awarded in violation of this subchapter is void. (f) If district property is destroyed, stolen or severely damaged or a building or equipment, undergoes major operational or structural failure, or a contractor is unable to fulfill its obligations in providing goods or services, and the board of trustees determines that the delay posed by the methods provided for in Section 103.402(a) would pose material threat to personal safety or potential damage to other property, prevent or substantially impair the conduct of classes or other essential district activities, then contracts for the replacement or repair of the property may be made by methods other than those required by Section 103.402(a). 130.404. RULES AND PROCEDURES ADOPTED BY A DISTRICT (a) The board of trustees of the district may adopt rules and procedures for the acquisition of construction services. 130.405. NOTICES (a) Except as provided in this subchapter, for the method of contracting selected under section 130.402(a), notice of the time by when and place where the bids, proposals or the responses to a request for qualifications will be received and opened shall be published in the county in which the district's central administrative office is located, in at least two successive issues of any newspaper of general circulation in the county in which the district is located. The deadline for receiving bids, proposals, or responses to a request for qualifications shall not be less than ten (10) business days after the date of the last newspaper notice. If there is not a newspaper in that county, the advertising shall be published in a newspaper in the county nearest the county seat of the county in which the district's central administrative office is located. In a two-step procurement process, the time and place where the second-step bids, proposals, or responses will be received are not required to be published separately. (b) As an alternative to publishing individual notices in a newspaper, provided at least one time per week the district publishes in a newspaper of general circulation, the internet address where notices may be found, the district may publish on a public accessible Internet site, notice of bids, proposals, or responses to a request for qualifications. Such publication shall be posted every day for at least ten (10) business days prior to the deadline. (c) The notice must include the date, time and place for receiving bids, proposals or request for qualifications, a description of the goods or services, any mandatory site inspections or pre-bid meetings, where bid, proposal or qualification documents may be obtained or examined, and any required bid bond, payment bond or performance bond. 130.406. DISCUSSION AND REVISION OF PROPOSALS. (a) As provided in a request for proposals and under rules adopted by a district, the district may discuss acceptable or potentially acceptable proposals with offerors to assess an offeror's ability to meet the solicitation requirements. (b) After receiving a proposal but before making an award, the district may permit the offeror to revise the proposal to obtain the best final offer. (c) The district may not disclose information derived from proposals submitted from competing offerors in conducting discussions under this section. (d) The district shall provide each offeror an equal opportunity to discuss and revise proposals. 130.407. PRE-BID CONFERENCE (a) The district may require a principal, officer, or employee of each prospective bidder to attend a mandatory pre-bid conference conducted for the purpose of discussing contract requirements and answering questions of prospective bidders. Notice under this subsection must be included in the notice published under Section 130.405 (b) After a mandatory pre-bid conference is conducted, any additional required notice for the proposed contract may be sent only to prospective bidders who attended the conference. 130.408. TIE BIDS (a) In the case of tie bids with all factors being equal, a contract shall be awarded under rules established by the board of trustees. 130.309. BID DEPOSIT. (a) The district, as considered necessary, may require a bid deposit in an amount determined by the district. The amount of the deposit, if any, must be stated in the public notice and the invitation to bid. (b) On the award of a bid or the rejection of all bids, the district shall refund the bid deposit of an unsuccessful bidder. (c) For public work contracts, the bid deposit required by the district, if any, may only be in the in the form of a bid bond written by a surety authorized to conduct business in this state. 130.410. PERFORMANCE AND PAYMENT BONDS FOR CONSTRUCTION (a) For a contract for construction, the contractor must execute a good and sufficient payment bond if the contract is for $25,000 or greater and a performance bond if the contract is $100,000 or greater. The bonds must each be executed, in accordance with Chapter 2253, Government Code, with a surety company authorized to conduct business in this state. 130.411. DELEGATION. (a) The board of trustees of a district may, as appropriate, delegate its authority under this subchapter regarding an action authorized or required by this subchapter to be taken by a district to a designated person, representative, or committee. In procuring construction services, the district shall provide notice of the delegation and the limits of the delegation in the request for bids, proposals, or qualifications or in an addendum to the request. If the district fails to provide that notice, a ranking, selection, or evaluation of bids, proposals, or qualifications for construction services other than by the board of trustees in an open public meeting is advisory only. (b) The board may not delegate the authority to act regarding an action authorized or required by this subchapter to be taken by the board of trustees of a district. 130.412. ENFORCEMENT OF PURCHASE PROCEDURES: CRIMINAL PENALTIES; REMOVAL; INELIGIBILITY. (a) In this section: (1) "Component purchases" means purchases of the component parts of an item or service that in normal purchasing practices would be purchased in one purchase. (2) "Separate purchases" means purchases, made separately, of items or services that in normal purchasing practices would be purchased in one purchase. (3) "Sequential purchases" means purchases, made over a period, of items that in normal purchasing practices would be purchased in one purchase. (b) An officer, employee, or agent of a district commits an offense if the person with criminal negligence makes or authorizes separate, sequential, or component purchases to avoid the requirements of Section 130.011(a) or (b). An offense under this subsection is a Class B misdemeanor and is an offense involving moral turpitude. (c) An officer, employee, or agent of a district commits an offense if the person with criminal negligence violates Section 130.011(a) or (b) other than by conduct described by Subsection (b). An offense under this subsection is a Class B misdemeanor and is an offense involving moral turpitude. (d) An officer or employee of a district commits an offense if the officer or employee knowingly violates Section 130.010, other than by conduct described by Subsection (b) or (c). An offense under this subsection is a Class C misdemeanor. (e) The final conviction of a person other than a trustee of a district for an offense under Subsection (b) or (c) results in the immediate removal from office or employment of that person. A trustee who is convicted of an offense under this section is considered to have committed official misconduct for purposes of Chapter 87, Local Government Code, and is subject to removal as provided by that chapter and Section 24, Article V, Texas Constitution. For four years after the date of the final conviction, the removed person is ineligible to be a candidate for or to be appointed or elected to a public office in this state, is ineligible to be employed by or act as an agent for the state or a political subdivision of the state, and is ineligible to receive any compensation through a contract with the state or a political subdivision of the state. This subsection does not prohibit the payment of retirement benefits to the removed person or the payment of workers' compensation benefits to the removed person for an injury that occurred before the commission of the offense for which the person was removed. This subsection does not make a person ineligible for an office for which the federal or state constitution prescribes exclusive eligibility requirements. (f) A court may enjoin performance of a contract made in violation of this subchapter. A county attorney, a district attorney, a criminal district attorney, a citizen of the county in which the district is located, or any interested party may bring an action for an injunction. A party who prevails in an action brought under this subsection is entitled to reasonable attorney's fees as approved by the court. 130.413. NOTIFICATION OF CRIMINAL HISTORY OF CONTRACTOR. (a) A person or business entity that enters into a contract with a district must give advance notice to the district if the person or an owner or operator of the business entity has been convicted of a felony. The notice must include a general description of the conduct resulting in the conviction of a felony. (b) A district may terminate a contract with a person or business entity if the district determines that the person or business entity failed to give notice as required by Subsection (a) or misrepresented the conduct resulting in the conviction. The district must compensate the person or business entity for services performed before the termination of the contract. (c) This section does not apply to a publicly held corporation. 130.414. CHANGE ORDERS. (a) After performance of a construction contract begins, a district may approve change orders if necessary to: (1) make changes in plans or specifications; or (2) decrease or increase the quantity of work to be performed or materials, equipment, or supplies to be furnished. (b) The total price of a contract may not be increased by a change order unless provision has been made for the payment of the added cost by the appropriation of current funds or bond funds for that purpose, by the authorization of the issuance of certificates, or by a combination of those procedures. The original contract price may not be increased by more than 25 percent. The original price may not be decreased by more than 25 percent without the consent of the contractor. 130.415. ERRORS & OMISSION INSURANCE (a) For any public work contract awarded under this subchapter, to protect the interest of the district, the architect or engineer that prepared the plans and specification for the public work, shall, at its expense, carry errors and omissions insurance in an amount not less than the amount of the public work contract. 130.416. DESIGN-BUILD CONTRACTS FOR FACILITIES. (a) In this section: (1) "Design-build contract" means a single contract with a design-build firm for the design and construction of a facility. (2) "Design-build firm" means a partnership, corporation, or other legal entity or team that includes an engineer or architect and builder qualified to engage in building construction in Texas. (3) "Design criteria package" means a set of documents that provides sufficient information to permit a design-build firm to prepare a response to a district's request for qualifications and any additional information requested, including criteria for selection. The design criteria package must specify criteria the district considers necessary to describe the project and may include, as appropriate, the legal description of the site, survey information concerning the site, interior space requirements, special material requirements, material quality standards, conceptual criteria for the project, special equipment requirements, cost or budget estimates, time schedules, quality assurance and quality control requirements, site development requirements, applicable codes and ordinances, provisions for utilities, parking requirements, or any other requirement, as applicable. (b) A district may use the design-build method for the construction, rehabilitation, alteration, or repair of a facility. In using that method and in entering into a contract for the services of a design-build firm, the contracting district and the design-build firm shall follow the procedures provided by Subsections (c)-(j). (c) The district may designate an engineer or architect to act as its representative. If the district's engineer or architect is not a full-time employee of the district, any engineer or architect designated shall be selected on the basis of demonstrated competence and qualifications in accordance with Subchapter A, Chapter 2254, Government Code. (d) The district shall prepare a request for qualifications that includes general information on the project site, project scope, budget, special systems, selection criteria, and other information that may assist potential design-build firms in submitting proposals for the project. The district shall also prepare the design criteria package that includes more detailed information on the project. If the preparation of the design criteria package requires engineering or architectural services that constitute the practice of engineering within the meaning of The Texas Engineering Practice Act (Article 3271a, Vernon's Texas Civil Statutes) or the practice of architecture within the meaning of Chapter 478, Acts of the 45th Legislature, Regular Session, 1937 (Article 249a, Vernon's Texas Civil Statutes), those services shall be provided in accordance with the applicable law. (e) The district shall evaluate statements of qualifications and select a design-build firm in two phases: (1) In phase one, the district shall prepare a request for qualifications and evaluate each offeror's experience, technical competence, and capability to perform, the past performance of the offeror's team and members of the team, and other appropriate factors submitted by the team or firm in response to the request for qualifications, except that cost-related or price-related evaluation factors are not permitted. Each offeror must certify to the district that each engineer or architect that is a member of its team was selected based on demonstrated competence and qualifications. The district shall qualify a maximum of five offerors to submit additional information and, if the district chooses, to interview for final selection. (2) In phase two, the district shall evaluate the information submitted by the offerors on the basis of the selection criteria stated in the request for qualifications and the results of any interview. The district may request additional information regarding demonstrated competence and qualifications, considerations of the safety and long-term durability of the project, the feasibility of implementing the project as proposed, the ability of the offeror to meet schedules, costing methodology, or other factors as appropriate. The district may not require offerors to submit detailed engineering or architectural designs as part of the proposal. The district shall rank each proposal submitted on the basis of the criteria set forth in the request for qualifications. The district shall select the design-build firm that submits the proposal offering the best value for the district on the basis of the published selection criteria and on its ranking evaluations. The district shall first attempt to negotiate with the selected offeror a contract. If the district is unable to negotiate a satisfactory contract with the selected offeror, the district shall, formally and in writing, end negotiations with that offeror and proceed to negotiate with the next offeror in the order of the selection ranking until a contract is reached or negotiations with all ranked offerors end. (f) Following selection of a design-build firm under Subsection (e), that firm's engineers or architects shall complete the design, submitting all design elements for review and determination of scope compliance to the district or district's engineer or architect before or concurrently with construction. (g) An engineer shall have responsibility for compliance with the engineering design requirements and all other applicable requirements of The Texas Engineering Practice Act (Article 3271a, Vernon's Texas Civil Statutes). An architect shall have responsibility for compliance with the requirements of Chapter 478, Acts of the 45th Legislature, Regular Session, 1937 (Article 249a, Vernon's Texas Civil Statutes). (h) The district shall provide or contract for, independently of the design-build firm, the inspection services, the testing of construction materials engineering, and the verification testing services necessary for acceptance of the facility by the district. The district shall select those services for which it contracts in accordance with Section 2254.004, Government Code. (i) The design-build firm shall supply a signed and sealed set of construction documents for the project to the district at the conclusion of construction. (j) A payment or performance bond is not required for, and may not provide coverage for, the portion of a design-build contract under this section that includes design services only. If a fixed contract amount or guaranteed maximum price has not been determined at the time a design-build contract is awarded, the penal sums of the performance and payment bonds delivered to the district must each be in an amount equal to the project budget, as specified in the design criteria package. The design-build firm shall deliver the bonds not later than the 10th day after the date the design-build firm executes the contract unless the design-build firm furnishes a bid bond or other financial security acceptable to the district to ensure that the design-build firm will furnish the required performance and payment bonds when a guaranteed maximum price is established. 130.417. CONTRACTS FOR FACILITIES: CONSTRUCTION MANAGER-AGENT. (a) A district may use the construction manager-agent method for the construction, rehabilitation, alteration, or repair of a facility. In using that method and in entering into a contract for the services of a construction manager-agent, a district shall follow the procedures prescribed by this section. (b) A construction manager-agent is a sole proprietorship, partnership, corporation, or other legal entity that provides consultation to the district regarding construction, rehabilitation, alteration, or repair of the facility. A district using the construction manager-agent method may, under the contract between the district and the construction manager-agent, require the construction manager-agent to provide administrative personnel, equipment necessary to perform duties under this section, and on-site management and other services specified in the contract. A construction manager-agent represents the district in a fiduciary capacity. (c) Before or concurrently with selecting a construction manager-agent, the district shall select or designate an engineer or architect who shall prepare the construction documents for the project and who has full responsibility for complying with The Texas Engineering Practice Act (Article 3271a, Vernon's Texas Civil Statutes) or Chapter 478, Acts of the 45th Legislature, Regular Session, 1937 (Article 249a, Vernon's Texas Civil Statutes), as applicable. If the engineer or architect is not a full-time employee of the district, the district shall select the engineer or architect on the basis of demonstrated competence and qualifications as provided by Section 2254.004, Government Code. The district's engineer or architect may not serve, alone or in combination with another person, as the construction manager-agent unless the engineer or architect is hired to serve as the construction manager-agent under a separate or concurrent procurement conducted in accordance with this subchapter. This subsection does not prohibit the district's engineer or architect from providing customary construction phase services under the engineer's or architect's original professional service agreement in accordance with applicable licensing laws. (d) A district shall select a construction manager-agent on the basis of demonstrated competence and qualifications in the same manner as provided for the selection of engineers or architects under Section 2254.004, Government Code. (e) A district using the construction manager-agent method shall procure, in accordance with applicable law and in any manner authorized by this chapter, a general contractor, trade contractors, or subcontractors who will serve as the prime contractor for their specific portion of the work. (f) The district or the construction manager-agent shall procure in accordance with Section 2254.004, Government Code, all of the testing of construction materials engineering, the inspection services, and the verification testing services necessary for acceptance of the facility by the district. 130.418. CONTRACTS FOR FACILITIES: CONSTRUCTION MANAGER-AT-RISK. (a) A district may use the construction manager-at-risk method for the construction, rehabilitation, alteration, or repair of a facility. In using that method and in entering into a contract for the services of a construction manager-at-risk, a district shall follow the procedures prescribed by this section. (b) A construction manager-at-risk is a sole proprietorship, partnership, corporation, or other legal entity that assumes the risk for construction, rehabilitation, alteration, or repair of a facility at the contracted price as a general contractor and provides consultation to the district regarding construction during and after the design of the facility. (c) Before or concurrently with selecting a construction manager-at-risk, the district shall select or designate an engineer or architect who shall prepare the construction documents for the project and who has full responsibility for complying with The Texas Engineering Practice Act (Article 3271a, Vernon's Texas Civil Statutes) or Chapter 478, Acts of the 45th Legislature, Regular Session, 1937 (Article 249a, Vernon's Texas Civil Statutes), as applicable. If the engineer or architect is not a full-time employee of the district, the district shall select the engineer or architect on the basis of demonstrated competence and qualifications as provided by Section 2254.004, Government Code. The district's engineer, architect, or construction manager-agent for a project may not serve, alone or in combination with another, as the construction manager-at-risk. (d) The district shall provide or contract for, independently of the construction manager-at-risk, the inspection services, the testing of construction materials engineering, and the verification testing services necessary for acceptance of the facility by the district. The district shall select those services for which it contracts in accordance with Section 2254.004, Government Code. (e) The district shall select the construction manager-at-risk in either a one-step or two-step process. The district shall prepare a request for proposals, in the case of a one-step process, or a request for qualifications, in the case of a two-step process, that includes general information on the project site, project scope, schedule, selection criteria, estimated budget, and the time and place for receipt of proposals or qualifications, as applicable, a statement as to whether the selection process is a one-step or two-step process, and other information that may assist the district in its selection of a construction manager-at-risk. The district shall state the selection criteria in the request for proposals or qualifications, as applicable. The selection criteria may include the offeror's experience, past performance, safety record, proposed personnel and methodology, and other appropriate factors that demonstrate the capability of the construction manager-at-risk. If a one-step process is used, the district may request, as part of the offeror's proposal, proposed fees and prices for fulfilling the general conditions. If a two-step process is used, the district may not request fees or prices in step one. In step two, the district may request that five or fewer offerors, selected solely on the basis of qualifications, provide additional information, including the construction manager-at-risk's proposed fee and its price for fulfilling the general conditions. (f) At each step, the district shall receive, publicly open, and read aloud the names of the offerors. At the appropriate step, the district shall also read aloud the fees and prices, if any, stated in each proposal as the proposal is opened. Within 45 days after the date of opening the proposals, the district shall evaluate and rank each proposal submitted in relation to the criteria set forth in the request for proposals. (g) The district shall select the offeror that submits the proposal that offers the best value for the district based on the published selection criteria and on its ranking evaluation. The district shall first attempt to negotiate with the selected offeror a contract. If the district is unable to negotiate a satisfactory contract with the selected offeror, the district shall, formally and in writing, end negotiations with that offeror and proceed to negotiate with the next offeror in the order of the selection ranking until a contract is reached or negotiations with all ranked offerors end. (h) A construction manager-at-risk shall publicly advertise, in accordance with Section 130.405, and receive bids or proposals from trade contractors or subcontractors for the performance of all major elements of the work other than the minor work that may be included in the general conditions. A construction manager-at-risk may seek to perform portions of the work itself if the construction manager-at-risk submits its bid or proposal for those portions of the work in the same manner as all other trade contractors or subcontractors and if the district determines that the construction manager-at-risk's bid or proposal provides the best value for the district. (i) The construction manager-at-risk and the district or its representative shall review all trade contractor or subcontractor bids or proposals in a manner that does not disclose the contents of the bid or proposal during the selection process to a person not employed by the construction manager-at-risk, engineer, architect, or district. All bids or proposals shall be made public after the award of the contract or within seven days after the date of final selection of bids or proposals, whichever is later. (j) If the construction manager-at-risk reviews, evaluates, and recommends to the district a bid or proposal from a trade contractor or subcontractor but the district requires another bid or proposal to be accepted, the district shall compensate the construction manager-at-risk by a change in price, time, or guaranteed maximum cost for any additional cost and risk that the construction manager-at-risk may incur because of the district's requirement that another bid or proposal be accepted. (k) If a selected trade contractor or subcontractor defaults in the performance of its work or fails to execute a subcontract after being selected in accordance with this section, the construction manager-at-risk may, without advertising, itself fulfill the contract requirements or select a replacement trade contractor or subcontractor to fulfill the contract requirements. (l) If a fixed contract amount or guaranteed maximum price has not been determined at the time the contract is awarded, the penal sums of the performance and payment bonds delivered to the district must each be in an amount equal to the project budget, as specified in the request for qualifications. The construction manager shall deliver the bonds not later than the 10th day after the date the construction manager executes the contract unless the construction manager furnishes a bid bond or other financial security acceptable to the district to ensure that the construction manager will furnish the required performance and payment bonds when a guaranteed maximum price is established. 130.419. SELECTING CONTRACTOR FOR CONSTRUCTION PURPOSES THROUGH COMPETITIVE SEALED PROPOSALS. (a) In selecting a contractor for construction, rehabilitation, alteration, or repair services for a facility through competitive sealed proposals, a district shall follow the procedures prescribed by this section. (b) The district shall select or designate an engineer or architect to prepare construction documents for the project. The selected or designated engineer or architect has full responsibility for complying with The Texas Engineering Practice Act (Article 3271a, Vernon's Texas Civil Statutes) or Chapter 478, Acts of the 45th Legislature, Regular Session, 1937 (Article 249a, Vernon's Texas Civil Statutes), as applicable. If the engineer or architect is not a full-time employee of the district, the district shall select the engineer or architect on the basis of demonstrated competence and qualifications as provided by Section 2254.004, Government Code. (c) The district shall provide or contract for, independently of the contractor, the inspection services, the testing of construction materials engineering, and the verification testing services necessary for acceptance of the facility by the district. The district shall select those services for which it contracts in accordance with Section 2254.004, Government Code, and shall identify them in the request for proposals. (d) The district shall prepare a request for competitive sealed proposals that includes construction documents, selection criteria, estimated budget, project scope, schedule, and other information that contractors may require to respond to the request. (e) The district shall receive, publicly open, and read aloud the names of the offerors and if any are required to be stated, all prices stated in each proposal. Within 45 days after the date of opening the proposals, the district shall evaluate and rank each proposal submitted in relation to the published selection criteria. (f) The district shall first attempt to negotiate with the selected offeror a contract. The district and its engineer or architect may discuss with the selected offeror options for a scope or time modification and any price change associated with the modification. If the district is unable to negotiate a contract with the selected offeror, the district shall, formally and in writing, end negotiations with that offeror and proceed to the next offeror in the order of the selection ranking until a contract is reached or all proposals are rejected. 130.420. SELECTING CONTRACTOR FOR CONSTRUCTION SERVICES THROUGH COMPETITIVE BIDDING. (a) Except to the extent prohibited by other law and to the extent consistent with this subchapter, a district may use competitive bidding to select a contractor to perform construction, rehabilitation, alteration, or repair services for a facility. 130.421. JOB ORDER CONTRACTS FOR CONSTRUCTION SERVICES. (a) A district may award job order contracts for the minor construction, repair, rehabilitation, or alteration of a facility if the work is of a recurring nature but the delivery times are indefinite and indefinite quantities and orders are awarded substantially on the basis of pre-described and pre-priced tasks. (b) The district may establish contractual unit prices for a job order contract by: (1) specifying one or more published construction unit price books and the applicable divisions or line items; or (2) providing a list of work items and requiring the offerors to bid or propose one or more coefficients or multipliers to be applied to the price book or work items as the price proposal. (c) The district shall advertise for, receive, and publicly open sealed proposals for job order contracts. (d) The district may require offerors to submit additional information besides rates, including experience, past performance, and proposed personnel and methodology. (e) The district may award job order contracts to one or more job order contractors in connection with each solicitation of bids or proposals. (f) An order for a job or project under the job order contract must be signed by the district's representative and the contractor. The order may be a fixed price, lump-sum contract based substantially on contractual unit pricing applied to estimated quantities or may be a unit price order based on the quantities and line items delivered. (g) The contractor shall provide payment and performance bonds, if required by law, based on the amount or estimated amount of any order. (h) The base term of a job order contract is for the period and with any renewal option that the district sets forth in the request for proposals. If the district fails to advertise that term, the base term may not exceed two years and is not renewable without further advertisement and solicitation of proposals. (i) If a job order contract or an order issued under the contract requires engineering or architectural services that constitute the practice of engineering within the meaning of The Texas Engineering Practice Act (Article 3271a, Vernon's Texas Civil Statutes) or the practice of architecture within the meaning of Chapter 478, Acts of the 45th Legislature, Regular Session, 1937 (Article 249a, Vernon's Texas Civil Statutes), those services shall be provided in accordance with applicable law. SECTION 8. Education Code Title 3, HIGHER EDUCATION, CHAPTER 130. JUNIOR COLLEGE DISTRICTS, is amended by adding Subchapter M, Chapter 130.5, HISTORICALLY UNDERUTILIZED BUSINESSES. 130.501. On an annual basis, a district located in a county with a population of one million or more shall prepare a plan stating their objectives and methods to be used to achieve their objectives regarding purchases to be made from historically underutilized businesses as defined under the Texas Government Code. 130.502. On an annual basis the district shall publish a report that shows the extent to which contracts awarded to historically underutilized businesses compare to the total contracts awarded. The report shall be published in a newspaper of general circulation in the county where the district is located within sixty days following the end of the district's fiscal year. SECTION 9. This Act takes effect September 1, 2005