86R1983 TSR-D
 
  By: Nelson S.B. No. 127
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to oversight of and requirements applicable to state
  agency contracting and procurement.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 441.1855, Government Code, is amended to
  read as follows:
         Sec. 441.1855.  RETENTION OF CONTRACT AND RELATED DOCUMENTS
  BY STATE AGENCIES. (a) Notwithstanding Section 441.185 or 441.187,
  a state agency:
               (1)  shall retain in its records each contract entered
  into by the state agency and all contract solicitation documents
  related to the contract; and
               (2)  may destroy the contract and documents only after
  the seventh anniversary of the date:
                     (A)  the contract is completed or expires; or
                     (B)  all issues that arise from any litigation,
  claim, negotiation, audit, open records request, administrative
  review, or other action involving the contract or documents are
  resolved.
         (b)  A contract solicitation document that is an electronic
  document must be retained under Subsection (a) in the document's
  electronic form. A state agency may print and retain the document
  in paper form only if the agency provides for the preservation,
  examination, and use of the electronic form of the document in
  accordance with Subsection (a), including any formatting or
  formulas that are part of the electronic format of the document.
         (c)  In this section:
               (1)  "Contract solicitation document" includes any
  document, whether in paper form or electronic form, that is used by
  a state agency to evaluate responses to a competitive solicitation
  for a contract issued by the agency.
               (2)  "Electronic document" means:
                     (A)  information that is created, generated,
  sent, communicated, received, or stored by electronic means; or
                     (B)  the output of a word processing, spreadsheet,
  presentation, or business productivity application.
         SECTION 2.  Section 2102.005, Government Code, is amended to
  read as follows:
         Sec. 2102.005.  INTERNAL AUDITING REQUIRED. (a)  A state
  agency shall conduct a program of internal auditing that includes:
               (1)  an annual audit plan that is prepared using risk
  assessment techniques and that identifies the individual audits to
  be conducted during the year; and
               (2)  periodic audits of the agency's major systems and
  controls, including:
                     (A)  accounting systems and controls;
                     (B)  administrative systems and controls; and
                     (C)  electronic data processing systems and
  controls.
         (b)  In conducting the internal auditing program under
  Subsection (a), a state agency shall consider methods for ensuring
  compliance with contract processes and controls and for monitoring
  agency contracts.
         SECTION 3.  Section 2155.089, Government Code, is amended by
  amending Subsections (a) and (b) and adding Subsection (b-1) to
  read as follows:
         (a)  Each [After a contract is completed or otherwise
  terminated, each] state agency shall review a [the] vendor's
  performance under a [the] contract:
               (1)  at least once each year during the term of the
  contract;
               (2)  at each key milestone identified for the contract;
  and
               (3)  after the contract is completed or otherwise
  terminated.
         (b)  The state agency shall report to the comptroller, using
  the tracking system established by Section 2262.055, on the results
  of each [the] review conducted under Subsection (a) regarding a
  vendor's performance under a contract.
         (b-1)  A state agency may not extend a vendor's contract
  until after the agency reports the results of each review of the
  vendor conducted under Subsection (a)(1) or (2), as applicable, in
  the manner prescribed by Subsection (b).
         SECTION 4.  Subchapter B, Chapter 2261, Government Code, is
  amended by adding Sections 2261.0525 and 2261.054 to read as
  follows:
         Sec. 2261.0525.  CERTIFICATION OF VENDOR ASSESSMENT
  PROCESS. (a) Before a state agency may accept a bid from, or award
  a contract to, a vendor, the agency's contract manager or
  procurement director must review the process and all documents used
  by the agency to assess each vendor who responded to the contract
  solicitation. The contract manager or procurement director must
  certify in writing that:
               (1)  the agency accurately assessed each vendor's
  response to the solicitation using the evaluation criteria
  published in the solicitation or, if applicable, the written
  evaluation criteria established by the agency; and
               (2)  the final scoring of responses was accurate.
         (b)  A state agency shall justify in writing any change in
  the scoring of a vendor that occurs following the initial
  assessment and scoring of responses. The written justification
  must be reviewed by the agency's contract manager or procurement
  director. The contract manager or procurement director shall
  certify in writing that the change in scoring was appropriate.
         (c)  A state agency's contract manager or procurement
  director may delegate to a person in the agency's contract
  management office the certification authority under this section,
  provided that the person's position at the agency is at least equal
  to the position of contract manager or procurement director.
         (d)  A written certification or justification required by
  this section must be placed in the contract file.
         Sec. 2261.054.  STATEMENT REGARDING VENDOR SELECTION
  REQUIRED FOR CERTAIN CONTRACT AWARDS. If a state agency accepts a
  bid from, or awards a contract to, a vendor who did not receive the
  highest score in an assessment process certified under Section
  2261.0525, the agency shall state in writing in the contract file
  the reasons for accepting the bid or making the award.
         SECTION 5.  The heading to Subchapter E, Chapter 2261,
  Government Code, is amended to read as follows:
  SUBCHAPTER E. CONTRACTOR OVERSIGHT AND LIABILITY
         SECTION 6.  Subchapter E, Chapter 2261, Government Code, is
  amended by adding Section 2261.204 to read as follows:
         Sec. 2261.204.  LIABILITY PROVISIONS. (a) Each state
  agency shall include in the contract file for each of its contracts
  for goods or services subject to this chapter a written explanation
  of the agency's decision to include or not include in the contract a
  provision for liquidated damages or another form of liability for
  breach of the contract by the contractor.
         (b)  A contract file must also include, if applicable, a
  written justification for any provision in the contract that limits
  the liability of a contractor for breach of the contract.
         (c)  If an extension of a state agency's contract described
  by Subsection (a) modifies a provision for liquidated damages or
  another provision relating to a contractor's liability for breach
  of the contract, the agency must amend the written explanation or
  justification required by this section to include a justification
  for the modification.
         SECTION 7.  Subchapter F, Chapter 2261, Government Code, is
  amended by adding Section 2261.258 to read as follows:
         Sec. 2261.258.  MONITORING ASSESSMENT BY STATE AUDITOR. (a)
  Before July 1 of each year, the state auditor shall assign one of
  the following ratings to each of the 25 largest state agencies as
  determined by the total appropriations made to the agencies in the
  General Appropriations Act for that state fiscal year:
               (1)  additional monitoring warranted;
               (2)  no additional monitoring warranted; or
               (3)  reduced monitoring warranted.
         (b)  In assigning a rating to a state agency as required
  under Subsection (a), the state auditor shall consider the
  following information, as applicable:
               (1)  results of an audit of:
                     (A)  the agency conducted by the state auditor
  under Chapter 321; or
                     (B)  the agency's contracts and contract
  processes and controls conducted by the agency's internal auditors
  or by the state auditor;
               (2)  results of a purchase audit conducted by the
  comptroller under Section 2155.325;
               (3)  information reported by the quality assurance team
  established under Section 2054.158 relating to the agency's major
  information resources projects;
               (4)  information from the Contract Advisory Team
  established under Subchapter C, Chapter 2262, relating to reviews
  of the agency's contracts and contract solicitation documents;
               (5)  information relating to agency findings from a
  review of the agency conducted by:
                     (A)  the Legislative Budget Board; and
                     (B)  the Sunset Advisory Commission under Chapter
  325 (Texas Sunset Act);
               (6)  the agency's self-reported improvements to the
  agency's contracting processes; and
               (7)  any additional internal analysis provided by the
  agency. 
         (c)  On or before September 1 of each year, the state auditor
  shall submit to the comptroller a report that:
               (1)  lists each state agency that was assigned a rating
  under Subsection (a); and
               (2)  for a state agency that was assigned a rating under
  Subsection (a)(1) or (3), specifies that additional or reduced
  monitoring, as applicable, is required during one or more of the
  following periods:
                     (A)  contract solicitation development;
                     (B)  contract formation and award; or
                     (C)  contract management and termination.
         (d)  The comptroller shall develop guidelines for the
  additional or reduced monitoring of a state agency during the
  periods described by Subsections (c)(2)(A), (B), and (C) for a
  contract that falls under the monetary thresholds for review or
  monitoring by the Contract Advisory Team or the quality assurance
  team.
         (e)  The state auditor may request any information necessary
  from a state agency, the Contract Advisory Team, or the quality
  assurance team to comply with the requirements of this section, and
  the agency or team, as applicable, shall provide the requested
  information.
         (f)  The state auditor and the comptroller shall share
  information as necessary to fulfill their respective duties under
  this section.
         (g)  The state auditor's duties under this section must be
  included in the audit plan and approved by the legislative audit
  committee under Section 321.013.
         SECTION 8.  Subchapter B, Chapter 2262, Government Code, is
  amended by adding Section 2262.053 to read as follows:
         Sec. 2262.053.  CONTRACT FILE CHECKLIST; CERTIFICATION OF
  AGENCY COMPLIANCE. (a) Each state agency shall include in the
  contract file for each of its contracts a checklist to ensure the
  agency's compliance with state laws and rules relating to the
  acquisition of goods and services by the agency.
         (b)  The comptroller shall develop and periodically update a
  model contract file checklist and make the checklist available for
  use by state agencies. The comptroller shall periodically update
  the checklist.
         (c)  The comptroller may adopt rules necessary to develop or
  update the model contract file checklist.
         (d)  The model contract file checklist must address each
  stage of the procurement process and must include, at a minimum, a
  description of:
               (1)  the documents that are required to be maintained
  during each stage of the procurement process in accordance with
  applicable state laws and comptroller rules; and
               (2)  the procedures and documents that are required to
  be completed during the following stages of the procurement
  process:
                     (A)  contract solicitation development;
                     (B)  contract formation and award; and 
                     (C)  contract management.
         (e)  A state agency may develop its own contract file
  checklist based on the procurement and contracting needs of that
  agency, provided that the checklist developed by the agency is
  consistent with the comptroller's model contract file checklist and
  meets any requirements established by comptroller rule under
  Subsection (c).
         (f)  Before a state agency accepts a bid from, or awards a
  contract to, a vendor for the purchase of goods or services, the
  agency's contract manager or procurement director must:
               (1)  review the contents of the contract file for the
  contract, including the checklist, to ensure that all documents
  required by state law or applicable agency rules are complete and
  present in the file; and
               (2)  certify in a written document to be included in the
  contract file that the review required under Subdivision (1) was
  completed.
         (g)  The comptroller by rule shall prescribe the time at
  which a state agency's contract manager or procurement director
  must make the certification required by Subsection (f).
         SECTION 9.  As soon as practicable after the effective date
  of this Act, the comptroller of public accounts, and each affected
  state agency as necessary, shall adopt the rules, processes, and
  procedures and take the actions necessary to implement the changes
  in law made by this Act.
         SECTION 10.  This Act applies only in relation to a contract:
               (1)  for which a state agency first advertises or
  otherwise solicits bids, proposals, offers, or qualifications on or
  after the effective date of this Act;
               (2)  that is extended or modified on or after the
  effective date of this Act; or
               (3)  for which a change order is submitted on or after
  the effective date of this Act.
         SECTION 11.  Notwithstanding Section 2261.258, Government
  Code, as added by this Act, the first report required under that
  section is due on or before September 1, 2020.
         SECTION 12.  This Act takes effect September 1, 2019.