BILL ANALYSIS |
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C.S.H.B. 15 |
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By: Otto |
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Government Transparency & Operation |
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Committee Report (Substituted) |
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BACKGROUND AND PURPOSE
Recent reports have indicated that there may be widespread abuse in certain state government contracting and interested parties assert that legislative action to provide increased oversight and management over state contracts would be beneficial. C.S.H.B. 15 seeks to address this concern by increasing oversight of certain high-risk state contracts.
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CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
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RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
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ANALYSIS
C.S.H.B. 15 amends the Government Code to require the Legislative Budget Board (LBB) to establish a Contract Management and Oversight Team to develop criteria for identifying high-risk factors in contracts, consult with state agencies on and approve an action related to a high-risk contract, provide recommendations and assistance to state agency personnel throughout the contract management process, and coordinate and consult with the quality assurance team created by the state auditor, the LBB, and the Department of Information Resources (DIR) on all high-risk contracts relating to a major information resources project, as defined under the Information Resources Management Act. The bill defines "high-risk contract" as a state agency contract or purchase order that has a value of at least $10 million; has a value of less than $10 million, but has high-risk factors as identified by the Contract Management and Oversight Team; is entered into with an entity that is incorporated outside of the United States; is entered into with an entity that, during the five-year period preceding the date of the purchase or award of the contract, has had a contract with a state agency or federal governmental entity terminated or canceled for specified reasons; or meets other criteria that may be established by the team.
C.S.H.B. 15 requires each state agency to provide written notice to the team not later than the 30th day before the date the agency publicly releases solicitation documents for a high-risk contract. The bill requires each state agency to receive a separate prior approval from the team before spending money under an executed high-risk contract and to make a payment or a series of payments that exceeds half of the high-risk contract value. The bill authorizes the team, in determining whether to approve such expenditures, to review related documentation to ensure that potential risks related to the high-risk contract have been identified and mitigated and requires the team to disapprove the action if the potential risks cannot be sufficiently mitigated. The bill authorizes the team to adopt criteria for waiving these consultation and approval requirements.
C.S.H.B. 15 authorizes the team, after review of and comment on the matter by the LBB, to recommend that a state agency cancel a solicitation or a contract during the review process if a proposed contract would place the state at an unacceptable risk if executed or if an executed contract is experiencing performance failure or payment irregularities. The bill requires the team, if a state agency does not implement a recommendation, to provide notice of that failure to the comptroller of public accounts and prohibits the comptroller from authorizing the expenditure of funds for the contract. The bill applies its provisions relating to the establishment of the team to contracts of the Texas Department of Transportation that do not relate to highway construction or highway engineering or that are not subject to a Transportation Code provision relating to the informal resolution of certain contract claims.
C.S.H.B. 15 repeals provisions regarding the Contract Advisory Team created under statutory provisions regarding statewide contract management and abolishes the advisory team. The bill establishes that the validity of an action taken by the advisory team before the abolishment is not affected by the abolition. The bill transfers all powers and duties of the advisory team to the Contract Management and Oversight Team and specifies that a rule, form, policy, procedure, or decision of the advisory team continues in effect as a rule, form, policy, procedure, or decision of the management and oversight team until superseded by an act of the management and oversight team. The bill transfers without change in status any action or proceeding involving the advisory team to the management and oversight team and establishes that the management and oversight team assumes, without a change in status, the position of the advisory team in a negotiation or proceeding to which the advisory team is a party. The bill establishes that a reference in law to the Contract Advisory Team means the Contract Management and Oversight Team.
C.S.H.B. 15 prohibits a state agency from entering into a contract to purchase an information technology commodity item if the value of the contract exceeds $1 million and requires a state agency that enters into such a contract to obtain at least three competitive offers from vendors selected by DIR if at least three vendors selected by DIR offer the item. The bill requires a state agency, for a contract with a value of more than $50,000 for the purchase of information technology commodity items that is awarded by DIR and that requires the state agency to develop and execute a statement of work to initiate services under the contract, to consult with DIR before submission of the statement of work to a vendor and to post each statement of work entered into by the agency on the agency's website in a manner required by DIR rule. The bill establishes that a statement of work executed by a state agency under a contract awarded by DIR for the purchase of an information technology commodity item is not valid and prohibits money from being paid to the vendor under the terms of the statement of work unless DIR first signs the statement of work. The bill defines "statement of work" as a document stating the requirements for a contract that are specific to the vendor under contract and that are not specified in a contract awarded by DIR for the purchase of information technology commodity items. The bill increases from $14,000 to $50,000 the minimum threshold amount of certain construction projects, professional services, and consulting services contracts that triggers the requirement that a certain written notification be provided to the LBB.
C.S.H.B. 15 repeals Subchapter C, Chapter 2262, Government Code.
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EFFECTIVE DATE
September 1, 2015.
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COMPARISON OF ORIGINAL AND SUBSTITUTE
While C.S.H.B. 15 may differ from the original in minor or nonsubstantive ways, the following comparison is organized and formatted in a manner that indicates the substantial differences between the introduced and committee substitute versions of the bill.
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