By: Gattis H.B. No. 2733

A BILL TO BE ENTITLED

AN ACT

relating to the creation of an office of state contract management by the attorney general.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 2262.002(b), Government Code, is amended to read as follows:

(b) Except as otherwise provided by this chapter, this [This] chapter does not apply to contracts of the Texas Department of Transportation that:

(1) relate to highway construction or highway engineering; or

(2) are subject to Section 201.112, Transportation Code.

SECTION 2. Section 2262.101, Government Code, is amended to read as follows:

Sec. 2262.101. CREATION; DUTIES. The Contract Advisory Team is created to assist state agencies in improving contract management practices by:

(1) [reviewing the solicitation of major contracts by state agencies;

[(2)] reviewing any findings or recommendations made by the state auditor, including those made under Section 2262.052(b), regarding a state agency's compliance with the contract management guide; and

(2) [(3)] providing recommendations to the commission regarding:

(A) the development of the contract management guide; and

(B) the training under Section 2262.053.

SECTION 3. Chapter 2262, Government Code, is amended by adding Subchapter D to read as follows:

SUBCHAPTER D. STATE OFFICE OF CONTRACT MANAGEMENT

Sec. 2262.151. DEFINITIONS. In this subchapter:

(1) "High-risk contract" means a state agency contract that:

(A) has a value of at least $10 million;

(B) has a value of less than $10 million, but has high-risk factors as identified by the office;

(C) is entered into with an entity that is incorporated outside the United States; or

(D) is entered into with an entity that, during the five-year period preceding the date of the award of the high-risk contract, has had a contract with a state agency or the federal government terminated or canceled for:

(i) a violation of, or noncompliance with, the terms of the contract;

(ii) delivery of an ineffective product or system;

(iii) significant delays or cost overruns;

(iv) fraud;

(v) misconduct; or

(vi) any other event that resulted in the termination or cancellation of the contract.

(2) "Major information resources project" has the meaning assigned by Section 2054.003(10).

(3) "Office" means the state office of contract management.

(4) "Quality assurance team" means the quality assurance team established under Section 2054.158.

(5) "Solicitation" means a solicitation for bids, offers, qualifications, proposals, or similar expressions of interest for a high-risk contract.

Sec. 2262.152. TEXAS DEPARTMENT OF TRANSPORTATION. Notwithstanding any other law, this subchapter applies to contracts of the Texas Department of Transportation that:

(1) relate to highway construction or highway engineering; or

(2) are subject to Section 201.112, Transportation Code.

Sec. 2262.153. ESTABLISHMENT; GENERAL DUTIES. The attorney general shall establish a state office of contract management to:

(1) develop criteria for identifying high-risk factors in contracts;

(2) review and approve an action related to a high-risk contract as provided by Section 2262.154;

(3) provide recommendations and assistance to state agency personnel throughout the contract management process; and

(4) coordinate and consult with the quality assurance team on all high-risk contracts relating to a major information resources project.

Sec. 2262.154. REVIEW AND APPROVAL; WAIVER. (a) Each state agency must receive approval from the office before taking the following actions in relation to a high-risk contract:

(1) publicly releasing solicitation documents;

(2) executing a final contract; and

(3) making a payment or a series of payments that equal half of the contract value.

(b) In determining whether to approve an action described by Subsection (a), the office shall review related documentation to ensure that potential risks related to the high-risk contract have been identified and mitigated.

(c) The attorney general by rule may adopt criteria for waiving the review and approval requirements under Subsections (a) and (b).

Sec. 2262.155. SOLICITATION AND CONTRACT CANCELLATION. After review of and comment on the matter by the Legislative Budget Board and the governor, the office may recommend the cancellation of a solicitation or a contract during the review process under Section 2262.154 if:

(1) a proposed solicitation is not in the best interest of the state;

(2) a proposed contract would place the state at an unacceptable risk if executed; or

(3) an executed contract is experiencing performance failure or payment irregularities.

SECTION 4. Section 2262.051(f), Government Code, is repealed.

SECTION 5. Subchapter D, Chapter 2262, Government Code, as added by this Act, applies only in relation to a contract:

(1) for which the solicitation of bids, offers, qualifications, proposals, or similar expressions of interest is published on or after September 1, 2007;

(2) that is extended or modified on or after September 1, 2007; or

(3) for which a change order is submitted on or after September 1, 2007.

SECTION 6. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2007.