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A BILL TO BE ENTITLED
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AN ACT
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relating to oversight of and requirements applicable to state |
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contracts and other state financial and accounting issues; |
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providing a civil penalty. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 322, Government Code, is amended by |
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adding Section 322.025 to read as follows: |
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Sec. 322.025. REPORT ON CONTRACT SPENDING. (a) In this |
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section, "state agency" has the meaning assigned by Section |
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2056.001. |
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(b) Not later than September 15 of each year, the board |
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shall issue a report detailing the amount of each state agency's |
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budget for the previous state fiscal year that was spent on |
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contracts. |
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SECTION 2. Section 441.1855, Government Code, is amended to |
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read as follows: |
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Sec. 441.1855. RETENTION OF CONTRACT AND RELATED DOCUMENTS |
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BY STATE AGENCIES. Notwithstanding Section 441.185 or 441.187, a |
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state agency: |
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(1) for each contract entered into by the agency, |
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shall retain in its records, to the extent the documents exist, |
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[each contract entered into by the state agency and] all contract |
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planning, solicitation, evaluation, monitoring, modification, and |
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closeout documents related to the contract, including at a minimum: |
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(A) a copy of all general and internal |
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correspondence related to the contract; |
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(B) the records or minutes of all internal or |
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external meetings related to the contract, including sign-in sheets |
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or agendas; |
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(C) a copy of all contractor invoices provided |
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under the contract; |
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(D) any information relating to discount |
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provisions for prompt payment under the contract and any letters |
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related to contract price deductions or fee adjustments; |
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(E) a copy of all supporting documentation for |
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contractor payments or progress payments under the contract; |
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(F) a copy of any audits performed involving the |
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contract; and |
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(G) a copy of all conflict of interest |
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documentation and forms required by law related to the contract; |
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and |
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(2) shall retain [may destroy] the contract and |
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documents described by Subdivision (1) until: |
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(A) [only after the seventh anniversary of] the |
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date[:
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[(A)] the contract is completed or expires; and |
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[or] |
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(B) if [all] issues [that] arise from any |
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litigation, claim, negotiation, audit, open records request, |
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administrative review, or other action involving the contract or |
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documents, the seventh anniversary of the date the issues are |
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resolved. |
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SECTION 3. Section 531.102, Government Code, is amended by |
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adding Subsection (a-9) to read as follows: |
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(a-9) The inspector general shall appoint oversight |
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personnel to audit, review, and investigate high-risk contracts and |
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procurement and contracting processes of the commission, as |
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identified by the office of inspector general, and provide |
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quarterly reports on the monitoring to the inspector general, |
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attorney general, and governor. The quarterly reports must be |
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posted on the commission's publicly accessible Internet website. |
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The oversight personnel may work with the state auditor's office, |
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governor's office, Legislative Budget Board, attorney general's |
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office, quality assurance team established under Section 2054.158, |
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and contract advisory team established under Subchapter C, Chapter |
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2262, in performing the oversight personnel's duties under this |
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subsection. |
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SECTION 4. Section 2102.0091(c), Government Code, is |
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amended to read as follows: |
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(c) In addition to the requirements of Subsection (a), a |
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state agency shall file with the Governor's Office of Budget, |
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Planning, and Policy, the state auditor, and the Legislative Budget |
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Board an [any] action plan or other response issued by the state |
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agency's governing board or the administrator of the state agency |
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if the state agency does not have a governing board in response to |
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every issue identified in the report of the state agency's internal |
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auditor. |
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SECTION 5. Chapter 2115, Government Code, is amended by |
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adding Section 2115.006 to read as follows: |
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Sec. 2115.006. OVERPAYMENTS BY STATE AGENCY. (a) If a |
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state agency makes an overpayment to a vendor, the vendor must |
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return the amount overpaid by the agency before the 91st calendar |
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day after the date either party discovers the overpayment. If the |
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amount overpaid by the state agency is not returned before the 91st |
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calendar day, the vendor is subject to a civil penalty in an amount |
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equal to three times the amount of the overpayment and the agency |
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shall refer the matter to the attorney general for action. |
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(b) The attorney general may institute an action in district |
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court to recover a civil penalty under this section. A civil |
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penalty recovered in an action brought by the attorney general |
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shall be deposited in the state treasury. |
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SECTION 6. Section 2155.074(c), Government Code, is amended |
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to read as follows: |
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(c) A state agency shall consult with and receive approval |
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from the comptroller in an open meeting [commission] before |
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considering factors other than price and meeting specifications |
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when the agency procures through competitive bidding goods or |
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services with a value that exceeds $100 million [$100,000]. The |
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state agency shall retain in the agency's records a copy of the |
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meeting minutes with the final executed contract. |
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SECTION 7. Section 2155.077(a-2), Government Code, is |
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amended to read as follows: |
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(a-2) The comptroller shall [may] bar a vendor from |
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participating in state contracts that are subject to this subtitle, |
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including contracts for which purchasing authority is delegated to |
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a state agency, if more than two contracts between the vendor and |
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the state have been terminated by the state for cause based on |
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unsatisfactory vendor performance during the preceding three |
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years. |
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SECTION 8. Subchapter B, Chapter 2155, Government Code, is |
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amended by adding Section 2155.092 to read as follows: |
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Sec. 2155.092. REPORT ON PERFORMANCE BY AGENCY FOR CERTAIN |
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PROCUREMENTS. (a) This section applies only to a procurement for |
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services with a value of at least $1 million but not more than $5 |
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million. |
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(b) Before a purchase of services under this chapter, each |
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state agency, including the comptroller, must: |
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(1) create a written report evaluating the feasibility |
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of the agency performing the service that is the subject of the |
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proposed purchase; and |
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(2) if the agency determines from the evaluation that |
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it is not feasible for the agency to perform the service, provide an |
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explanation of the reasons for the agency's determination. |
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(c) A report created under this section must be included in |
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the procurement analysis for the purchase. |
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SECTION 9. Subchapter B, Chapter 2251, Government Code, is |
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amended by adding Section 2251.031 to read as follows: |
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Sec. 2251.031. PAYMENT TO VENDOR. (a) A state agency may |
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not: |
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(1) pay an invoice from a vendor unless the invoice |
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directly correlates to a corresponding contract with the vendor; or |
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(2) make a payment to a vendor more than once per |
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month. |
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(b) A payment by a state agency to a vendor under a contract |
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must receive: |
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(1) the approval and signature of two employees of the |
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state agency; or |
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(2) if a contract manager, as defined by Section |
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2262.001, has been assigned to the contract by the state agency, the |
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approval and signature of the contract manager and one other |
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employee of the state agency. |
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(c) If a finding is made that a payment was made without the |
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signatures required under Subsection (b), the state agency may |
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revoke the payment at any time. |
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SECTION 10. Subchapter C, Chapter 2261, Government Code, is |
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amended by adding Section 2261.103 to read as follows: |
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Sec. 2261.103. REQUIRED CONTRACT PROVISIONS. (a) An |
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attorney representing a state agency shall assist in drafting a |
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contract to be entered into by the agency and include in the |
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contract at a minimum the provisions listed in Subsection (b) and |
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other applicable provisions recommended in the contract management |
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guide developed under Section 2262.051. |
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(b) The following are required provisions in each contract |
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to which the provisions are applicable: |
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(1) amendments; |
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(2) antitrust; |
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(3) applicable law and venue; |
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(4) applicable law and conforming amendments; |
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(5) assignments; |
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(6) confidentiality and public information act; |
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(7) equal opportunity; |
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(8) federal, state, and local law requirements; |
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(9) felony criminal convictions; |
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(10) financial interests and gifts; |
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(11) immigration; |
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(12) no conflicts; and |
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(13) right to audit. |
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SECTION 11. Subchapter D, Chapter 2261, Government Code, is |
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amended by adding Section 2261.152 to read as follows: |
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Sec. 2261.152. DOCUMENTATION REQUIRED FOR PAYMENT. (a) A |
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state agency may not make a payment to a vendor without a contract, |
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invoice, or other documentation that clearly demonstrates the |
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agency's obligation to make a payment. |
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(b) This section does not apply to the return of any amount |
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overpaid by a state agency to a vendor because of an incorrect |
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contract, invoice, or other documentation. |
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SECTION 12. Subchapter F, Chapter 2261, Government Code, is |
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amended by adding Section 2261.258 to read as follows: |
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Sec. 2261.258. REPORTING OF CONTRACT VIOLATION. (a) A |
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state employee or member of the public may report to the comptroller |
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a state contracting violation. The comptroller shall investigate a |
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report made under this subsection. |
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(b) A state agency may not suspend or terminate the |
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employment of, or take other adverse personnel action against, a |
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state employee who in good faith reports a violation to the |
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comptroller under this section. |
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(c) If, as a result of an investigation under this section |
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of a state contracting violation that occurred before March 8, |
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2017, savings to the state are realized, the comptroller shall |
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verify the amount of savings and an amount equal to 30 percent of |
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the savings may be appropriated to the comptroller only for |
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distribution to the state employee or member of the public who |
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reported the violation that initiated the investigation. |
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SECTION 13. Section 2262.051, Government Code, is amended |
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by amending Subsections (a), (b), (c), (d), and (g) and adding |
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Subsections (i) and (j) to read as follows: |
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(a) In consultation with the attorney general, the |
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Department of Information Resources, the [comptroller, and the] |
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state auditor, and state agencies that award major contracts, the |
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comptroller [commission] shall develop and [or] periodically |
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update a contract management guide for use by state |
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agencies. Participation by the state auditor under this |
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subsection is subject to approval by the legislative audit |
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committee for inclusion in the audit plan under Section 321.013(c). |
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(b) The comptroller [commission] may adopt rules necessary |
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to develop or update the guide. |
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(c) The guide must provide information regarding the |
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primary duties of a contract manager, including how to: |
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(1) develop and negotiate a contract; |
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(2) select a contractor; [and] |
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(3) monitor contractor and subcontractor performance |
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under a contract; and |
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(4) encourage competition for goods and services |
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purchased by this state. |
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(d) The guide must include model provisions for state agency |
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contracts. The guide must: |
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(1) distinguish between essential provisions that a |
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state agency must include in a contract to protect the interests of |
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this state and recommended provisions that a state agency may |
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include in a contract; |
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(2) recognize the unique contracting needs of an |
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individual state agency or program based on the size, nature, and |
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type of goods or services purchased by the state agency or program |
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and provide sufficient flexibility to accommodate those needs, |
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consistent with protecting the interests of this state; |
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(3) include maximum contract periods under which a new |
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competitive solicitation is not necessary; and |
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(4) include the model contract management process |
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developed under Section 2262.104 and recommendations on the |
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appropriate use of the model. |
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(g) The guide must establish procedures under which a state |
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agency is required to: |
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(1) solicit explanations from qualified potential |
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respondents who did not respond to a competitive solicitation for a |
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contract on which fewer than two qualified bids were received by the |
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agency; and |
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(2) develop and implement improved procurement |
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practices. |
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(i) The guide must suggest best practices related to |
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procurement metrics used by a state agency to measure and monitor |
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the effectiveness of the state agency's procurement methods, |
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including the: |
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(1) number and value of procurements made by the state |
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agency; |
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(2) number of canceled procurements by the state |
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agency; |
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(3) reasons for canceled procurements; |
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(4) common exceptions to the state agency's terms and |
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conditions by a respondent; |
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(5) number of responses per competitive solicitation; |
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and |
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(6) average length of time for each phase of the state |
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agency's procurement processes, including the length of time: |
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(A) between the date the state agency issues the |
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competitive solicitation and the date the state agency begins |
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receiving responses to the solicitation; |
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(B) for the evaluation of responses to a |
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competitive solicitation; |
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(C) of the negotiation between the state agency |
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and a vendor; and |
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(D) between the date the state agency issues the |
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competitive solicitation and the date the state agency awards a |
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contract to a vendor. |
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(j) The guide may include references to procurement |
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maturity models and procurement readiness assessments used by other |
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large public and private enterprises. |
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SECTION 14. Subchapter B, Chapter 2262, Government Code, is |
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amended by adding Section 2262.056 to read as follows: |
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Sec. 2262.056. CONTRACT MANAGERS REQUIRED FOR MAJOR |
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CONTRACTS. A state agency, at a minimum, shall assign a contract |
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manager for each major contract of the agency to manage the |
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oversight of the contract. |
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SECTION 15. Chapter 2262, Government Code, is amended by |
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adding Subchapter E to read as follows: |
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SUBCHAPTER E. CONTRACT OUTSIDE TACTICAL TEAM |
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Sec. 2262.201. DEFINITIONS. In this subchapter: |
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(1) "Information resources" has the meaning assigned |
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by Section 2054.003. |
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(2) "Team" means a contract outside tactical team |
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established under authority provided by this subchapter. |
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Sec. 2262.202. CONTRACT OUTSIDE TACTICAL TEAM. (a) From |
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appropriated funds, a state agency shall enter into a contract with |
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a team for assistance in improving information resources contract |
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management practices for contracts with a value of at least $100 |
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million. The team shall review and make recommendations on the |
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solicitation documents, contract documents, scope of work, project |
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timeline and management, documentation requirements, audit |
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schedule and audit scope, and technical issues for the contract. |
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(b) A team consists of the following members selected by the |
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state agency: |
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(1) outside legal counsel; or |
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(2) providers of professional consulting services |
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with expertise in the subject matter of the contract. |
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(c) A state agency may not select a provider of professional |
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consulting services or a group or association of providers or award |
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a contract for the services on the basis of competitive bids |
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submitted for the contract or for the services but shall make the |
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selection and award: |
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(1) on the basis of demonstrated competence and |
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qualifications to perform the services; and |
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(2) for a fair and reasonable price. |
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(d) A state agency shall: |
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(1) comply with a recommendation made under Subsection |
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(a); or |
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(2) submit a written explanation regarding the reasons |
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the recommendation is not applicable to the contract under review. |
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SECTION 16. This Act applies only in relation to a contract |
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for which a state agency first advertises or otherwise solicits |
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bids, proposals, offers, or qualifications on or after the |
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effective date of this Act and to a payment made under a contract |
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described by this section. |
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SECTION 17. This Act takes effect December 1, 2017. |