Texas 2009 - 81st Regular

Texas Senate Bill SB953 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	81R1396 YDB-D
2	2	By: Shapleigh S.B. No. 953
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to contracting issues of state agencies.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Section 2155.004(a), Government Code, is amended
10	10	to read as follows:
11	11	(a) A state agency may not accept a bid or award a contract
12	12	that includes proposed financial participation by a person who
13	13	participated, to any extent, [received compensation from the agency
14	14	to participate] in preparing the specifications or request for
15	15	proposals on which the bid or contract is based.
16	16	SECTION 2. Section 2155.077(b), Government Code, is amended
17	17	to read as follows:
18	18	(b) Except as provided by Subsection (d) and subject to
19	19	Chapter 2262, the commission shall bar a vendor from participating
20	20	in state contracts under Subsection (a) for a period that is
21	21	commensurate with the seriousness of the vendor's action and the
22	22	damage to the state's interests.
23	23	SECTION 3. Section 2155.144(d), Government Code, is amended
24	24	to read as follows:
25	25	(d) The [Subject to Subsection (e), the] agency shall [may]
26	26	consider all relevant factors in determining the best value,
27	27	including:
28	28	(1) all start-up, [any] installation, transition,
29	29	monitoring, and administrative costs;
30	30	(2) the delivery terms;
31	31	(3) the quality and reliability of the vendor's goods
32	32	or services;
33	33	(4) the extent to which the goods or services meet the
34	34	agency's needs;
35	35	(5) indicators of probable vendor performance under
36	36	the contract such as past vendor performance, the vendor's
37	37	financial resources and ability to perform, the vendor's experience
38	38	and responsibility, and the vendor's ability to provide reliable
39	39	maintenance agreements;
40	40	(6) the impact on the ability of the agency to comply
41	41	with laws and rules relating to historically underutilized
42	42	businesses or relating to the procurement of goods and services
43	43	from persons with disabilities;
44	44	(7) the total long-term cost to the agency of
45	45	acquiring the vendor's goods or services, including the cost of
46	46	replacing the vendor's goods or services if the vendor fails to
47	47	fulfill its obligations under the contract and the local economic
48	48	impact of any state employee job loss associated with the
49	49	procurement;
50	50	(8) the cost of any employee training associated with
51	51	the acquisition;
52	52	(9) the effect of an acquisition on agency
53	53	productivity;
54	54	(10) the acquisition price; and
55	55	(11) any other factor relevant to determining the best
56	56	value for the agency in the context of a particular acquisition.
57	57	SECTION 4. Section 2262.001, Government Code, is amended by
58	58	amending Subdivisions (3) and (4) and adding Subdivision (3-a) to
59	59	read as follows:
60	60	(3) "Contract manager" means a person who:
61	61	(A) is employed by a state agency; and
62	62	(B) has significant contract management duties
63	63	for the state agency[, as determined by the agency in consultation
64	64	with the state auditor].
65	65	(3-a) "Executive director" means the administrative
66	66	head of a state agency.
67	67	(4) "Major contract" means a contract, including a
68	68	renewal of a contract, that has a value of at least $1 million.
69	69	SECTION 5. Section 2262.002, Government Code, is amended by
70	70	adding Subsection (c) to read as follows:
71	71	(c) The comptroller on a case-by-case basis may exempt a
72	72	state agency from the requirements of this chapter.
73	73	SECTION 6. Sections 2262.051(a) and (b), Government Code,
74	74	are amended to read as follows:
75	75	(a) In consultation with the attorney general, the
76	76	Department of Information Resources, [the comptroller,] and the
77	77	state auditor, the comptroller [commission] shall develop or
78	78	periodically update a contract management guide for use by state
79	79	agencies. Participation by the state auditor under this
80	80	subsection is subject to approval by the legislative audit
81	81	committee for inclusion in the audit plan under Section 321.013(c).
82	82	(b) The comptroller [commission] may adopt rules necessary
83	83	to develop or update the guide.
84	84	SECTION 7. Section 2262.052, Government Code, as amended by
85	85	Chapters 309 (H.B. 3042) and 785 (S.B. 19), Acts of the 78th
86	86	Legislature, Regular Session, 2003, is reenacted and amended to
87	87	read as follows:
88	88	Sec. 2262.052. COMPLIANCE WITH GUIDE. (a) Each state
89	89	agency shall review, adopt, and comply with the contract management
90	90	guide.
91	91	(b) Subject to the legislative audit committee's approval
92	92	of including the work described by this subsection in the audit plan
93	93	under Section 321.013(c), the state auditor shall:
94	94	(1) periodically monitor compliance with this
95	95	section;
96	96	(2) report any noncompliance to:
97	97	(A) the governor;
98	98	(B) the lieutenant governor;
99	99	(C) the speaker of the house of representatives;
100	100	and
101	101	(D) the team; and
102	102	(3) assist, in coordination with the attorney general
103	103	and the comptroller, a noncomplying state agency to comply with
104	104	this section.
105	105	(c) The comptroller may on a case-by-case basis exempt a
106	106	state agency from complying with the contract management guide.
107	107	SECTION 8. The heading to Section 2262.053, Government
108	108	Code, is amended to read as follows:
109	109	Sec. 2262.053. TRAINING FOR CONTRACT MANAGERS.
110	110	SECTION 9. Section 2262.053, Government Code, is amended by
111	111	amending Subsections (a), (b), and (d) and adding Subsections (e),
112	112	(f), and (g) to read as follows:
113	113	(a) In coordination with the [comptroller,] Department of
114	114	Information Resources, [and] state auditor, and Health and Human
115	115	Services Commission, the comptroller or a private vendor selected
116	116	by the comptroller [commission] shall develop [or administer] a
117	117	training program for contract managers.
118	118	(b) The training must provide the contract manager with
119	119	information regarding how to:
120	120	(1) fairly and objectively select and negotiate with
121	121	the most qualified contractor;
122	122	(2) establish rates and prices that are cost-effective
123	123	and that reflect the cost of providing the service;
124	124	(3) include provisions in a contract that hold the
125	125	contractor accountable for results;
126	126	(4) form, monitor, oversee, and enforce a contract;
127	127	(5) make payments consistent with the contract;
128	128	(6) comply with any requirements or goals contained in
129	129	the contract management guide; and
130	130	(7) use and apply contract planning and procurement
131	131	skills and advanced sourcing strategies, techniques, and tools.
132	132	(d) The comptroller [Texas Building and Procurement
133	133	Commission] shall administer the training program under this
134	134	section.
135	135	(e) The comptroller shall certify contract managers who
136	136	have completed the contract management training required under this
137	137	section and keep a list of those contract managers.
138	138	(f) The program developed under this section must include a
139	139	separate class on ethics and contracting.
140	140	(g) A state agency or educational entity may develop
141	141	qualified contract manager training to supplement the training
142	142	required under this section. The comptroller may incorporate the
143	143	training developed by the agency or entity into the training
144	144	program under this section.
145	145	SECTION 10. Subchapter B, Chapter 2262, Government Code, is
146	146	amended by adding Section 2262.0535 to read as follows:
147	147	Sec. 2262.0535. TRAINING FOR GOVERNING BODIES. (a) The
148	148	comptroller or a private vendor selected by the comptroller shall
149	149	adapt the program developed under Section 2262.053 to develop an
150	150	abbreviated contract management and oversight program for training
151	151	the members of the governing bodies of state agencies. The training
152	152	may be provided together with other required training for members
153	153	of state agency governing bodies.
154	154	(b) All members of the governing body of a state agency
155	155	shall complete at least one course of the training developed under
156	156	this section. This subsection does not apply to a state agency that
157	157	does not enter into any contracts.
158	158	SECTION 11. Section 2262.054, Government Code, is amended
159	159	to read as follows:
160	160	Sec. 2262.054. PUBLIC COMMENT. The comptroller
161	161	[commission] by rule may establish procedures by which each state
162	162	agency is required to invite public comment by publishing the
163	163	proposed technical specifications for major contracts on the
164	164	Internet through the information service known as the Texas
165	165	Marketplace or through a suitable successor information service.
166	166	The guide must define "technical specifications."
167	167	SECTION 12. Subchapter B, Chapter 2262, Government Code, is
168	168	amended by adding Sections 2262.055 through 2262.068 to read as
169	169	follows:
170	170	Sec. 2262.055. FEES FOR TRAINING. The comptroller shall
171	171	set and collect a fee from state agencies that receive training
172	172	under this subchapter in an amount that recovers the comptroller's
173	173	costs for the training.
174	174	Sec. 2262.056. CONTRACT MANAGEMENT STAFF; WORKLOAD
175	175	MEASURES. Each state agency shall:
176	176	(1) identify appropriate staffing levels necessary to
177	177	perform the contract management duties and activities required
178	178	under this chapter; and
179	179	(2) develop workload measures and standards for the
180	180	contract management staff.
181	181	Sec. 2262.057. STATE AGENCY REPOSITORY. Each state agency
182	182	shall maintain in a central location all contracts for that agency.
183	183	Sec. 2262.058. REPORTING CONTRACTOR PERFORMANCE. (a)
184	184	After a contract is completed or otherwise terminated, each state
185	185	agency shall review the contractor's performance under the
186	186	contract.
187	187	(b) Using the forms developed by the team under Sections
188	188	2262.104 and 2262.105, the state agency shall report to the
189	189	comptroller on the results of the review regarding the contractor's
190	190	performance under the contract.
191	191	Sec. 2262.059. CONTRACTOR PERFORMANCE DATABASE. (a) The
192	192	comptroller shall store in a database contractor performance
193	193	reviews as provided by this section.
194	194	(b) The comptroller shall evaluate the contractor's
195	195	performance based on the information reported under Section
196	196	2262.058 and criteria established by the comptroller by rule.
197	197	Based on the results of the evaluation, the comptroller shall
198	198	determine whether the contractor is approved or not approved under
199	199	this subsection or barred under Section 2155.077. The comptroller
200	200	by rule shall state generally the reasons for which a contractor
201	201	will be determined to be approved or not approved under this
202	202	subsection.
203	203	(c) The comptroller shall establish an evaluation process
204	204	that allows vendors who receive an unfavorable contractor
205	205	performance review or who are the subject of an unfavorable
206	206	determination made by the comptroller under Subsection (b) to
207	207	protest the unfavorable review or unfavorable determination by the
208	208	comptroller.
209	209	(d) The comptroller shall develop a database that
210	210	incorporates the performance reviews and aggregates the reviews for
211	211	each contractor. The database must also include the determination
212	212	made by the comptroller under Subsection (b) for each contractor.
213	213	(e) A state agency may use the performance review database
214	214	to determine whether to award a contract to a contractor included in
215	215	the database.
216	216	Sec. 2262.060. EXCLUDING CONTRACTOR FROM SOLICITATION
217	217	PROCESS. Based on its own contractor performance reviews and on
218	218	information in the database developed under Section 2262.059, a
219	219	state agency may exclude a contractor from the solicitation process
220	220	for a contract if the agency determines the contractor has
221	221	performed poorly on a previous state contract without regard to
222	222	whether the contractor has been barred under Section 2155.077.
223	223	Sec. 2262.061. PERFORMANCE MEASURES; REPORTS. (a) Each
224	224	state agency shall develop a plan and timeline for incorporating
225	225	process-oriented and outcome-based performance measures into all
226	226	contracts entered into by the agency. This includes ensuring that
227	227	performance measures are written into each contract before
228	228	execution.
229	229	(b) Before including the performance measures in a state
230	230	agency contract, a state agency shall make available to the public a
231	231	draft of the proposed performance measures and allow adequate time
232	232	for review, comment, and incorporation of comments into the
233	233	performance measures.
234	234	(c) Not later than March 1 of each year, each state agency
235	235	shall report to the team, governor, lieutenant governor, and
236	236	speaker of the house of representatives regarding performance
237	237	measures in the agency's contracts. The report must describe the
238	238	agency's efforts to include performance-based provisions in the
239	239	agency's contracts.
240	240	(d) Each state agency shall make the report accessible to
241	241	the public on the agency's website.
242	242	Sec. 2262.062. ANNUAL EVALUATION OF CERTAIN CONTRACTS. A
243	243	state agency that enters into a contract with a monetary value that
244	244	exceeds the monetary threshold provided by comptroller rule shall
245	245	have an independent evaluator annually review the contract and the
246	246	contractor's performance under the contract to determine whether
247	247	the contractor is complying with the contract terms.
248	248	Sec. 2262.063. CONTRACT MANAGERS. (a) Each state agency
249	249	that enters into contracts other than interagency contracts shall
250	250	establish a career ladder program for contract management in the
251	251	agency.
252	252	(b) An employee hired as a contract manager may engage in
253	253	procurement planning, contract solicitation, contract formation,
254	254	price establishment, and other contract activities.
255	255	(c) Each state agency shall determine, in consultation with
256	256	the state auditor, the amount and significance of contract
257	257	management duties sufficient for an employee to be considered a
258	258	contract manager under this chapter.
259	259	(d) A contract manager shall complete the training program
260	260	and become certified under Section 2262.053.
261	261	Sec. 2262.064. APPROVAL OF CONTRACTS. (a) Each state
262	262	agency shall establish formal guidelines regarding who may approve
263	263	a contract for the agency.
264	264	(b) Each state agency shall adopt administrative rules to
265	265	establish:
266	266	(1) a monetary threshold above which agency contracts
267	267	and amendments to or extensions of agency contracts require written
268	268	authorization by the agency executive director; and
269	269	(2) a monetary threshold above which a draft contract
270	270	may not be entered into unless the agency complies with public
271	271	notice, public comment, and governing body approval procedures
272	272	strictly analogous to rulemaking procedures under Chapter 2001
273	273	before the contract is entered into.
274	274	(c) A state agency may not enter into a contract unless the
275	275	contract is:
276	276	(1) approved and signed by at least two persons
277	277	authorized to approve contracts for the agency; or
278	278	(2) approved by the agency's governing body in an open
279	279	meeting.
280	280	(d) A person authorized to approve contracts for a state
281	281	agency must sign a conflict-of-interest statement agreeing to
282	282	disclose any potential conflict of interest before approving a
283	283	contract.
284	284	(e) A state agency contract must include a provision
285	285	designating who may authorize amendments to the contract for the
286	286	state agency. For state agency contracts valued in excess of $1
287	287	million, the agency executive director must authorize a contract
288	288	amendment in writing.
289	289	(f) Each state agency shall annually report to the
290	290	comptroller a list of persons authorized to approve contracts at
291	291	the agency. The list must include each person's name, position, and
292	292	supervisory responsibility, if any.
293	293	Sec. 2262.065. NEGOTIATION OF CONTRACT BY SINGLE EMPLOYEE
294	294	PROHIBITED. A state agency may not negotiate a contract with only
295	295	one employee engaging in the negotiation.
296	296	Sec. 2262.066. DEVELOPMENT OF OPTIMIZED MODEL FOR CERTAIN
297	297	CONTRACTS. (a) If a state agency determines that a proposed
298	298	contract or proposed contract extension or amendment would
299	299	outsource existing services or functions performed by the agency
300	300	that have a value of $10 million or more, the agency shall create an
301	301	optimized model for the identified functions or services to
302	302	determine how and at what cost the agency could most efficiently
303	303	provide the functions or services.
304	304	(b) The model must show consideration of all relevant
305	305	factors, including:
306	306	(1) best practices in Texas and other states;
307	307	(2) available technology;
308	308	(3) access to benefits and services for clients;
309	309	(4) program integrity; and
310	310	(5) assessment of state agency skills available
311	311	throughout the life of the project.
312	312	(c) An agency that develops an optimized model under this
313	313	section shall use it as the basis for cost comparison when deciding
314	314	whether to outsource the identified functions or services.
315	315	(d) A model developed under this section is confidential and
316	316	is not subject to disclosure under Chapter 552 until a final
317	317	determination has been made to award the contract for which the
318	318	model was developed.
319	319	Sec. 2262.067. ANALYSIS OF SERVICES AND FUNCTIONS. (a) In
320	320	this section, "inherently governmental in nature" means a function
321	321	or service that involves the exercise or use of governmental
322	322	authority or discretion.
323	323	(b) If a state agency determines that a proposed contract or
324	324	proposed contract extension or amendment would outsource existing
325	325	services or functions performed by the agency that have a value of
326	326	$10 million or more, then before the agency may issue a competitive
327	327	solicitation for the contract or amend or extend the contract, the
328	328	agency shall contract with the State Council on Competitive
329	329	Government for its staff to perform an analysis to determine if any
330	330	of the services or functions to be performed under the contract or
331	331	contract extension or amendment are inherently governmental in
332	332	nature.
333	333	(c) Except as provided by Subsection (e), if the State
334	334	Council on Competitive Government determines that a service or
335	335	function to be performed under the contract or contract extension
336	336	or amendment is inherently governmental in nature, the state agency
337	337	may not:
338	338	(1) contract with a private entity to perform the
339	339	service or function; or
340	340	(2) amend or extend the contract, if a private entity
341	341	is to perform the service or function under the contract extension
342	342	or amendment.
343	343	(d) The analysis required under this section must use the
344	344	guidelines developed by the State Council on Competitive
345	345	Government.
346	346	(e) A state agency may contract with a private entity to
347	347	perform a service or function or amend or extend an existing
348	348	contract to allow a private entity to perform a service or function
349	349	that the State Council on Competitive Government determines to be
350	350	inherently governmental in nature if the chief administrative
351	351	officer of the agency issues a report stating that there is a
352	352	compelling state interest in outsourcing the service or function.
353	353	Sec. 2262.068. FULL AND FAIR COST COMPARISON. (a) If a
354	354	state agency determines that a proposed contract or proposed
355	355	contract extension or amendment would outsource existing services
356	356	or functions performed by the agency that have a value greater than
357	357	$10 million or another amount provided by comptroller rule, the
358	358	agency shall:
359	359	(1) conduct a full and fair cost comparison to
360	360	determine whether a private entity could perform the service or
361	361	function with a comparable or better level of quality at a cost
362	362	savings to the state; and
363	363	(2) prepare a business case providing the initial
364	364	justification for the proposed contract or proposed contract
365	365	extension or amendment that includes:
366	366	(A) the results of the comparison required under
367	367	Subdivision (1); and
368	368	(B) the anticipated return on investment in terms
369	369	of cost savings and efficiency for the proposed contract or
370	370	proposed contract extension or amendment.
371	371	(b) To perform the comparison required by Subsection
372	372	(a)(1), the state agency may:
373	373	(1) contract with the State Council on Competitive
374	374	Government to have its staff perform the comparison; or
375	375	(2) use the methodology provided in Section 2162.103.
376	376	(c) A state agency shall submit the business case required
377	377	under Subsection (a)(2) to the governor, lieutenant governor,
378	378	speaker of the house of representatives, Legislative Budget Board,
379	379	and standing committees of the legislature that have primary
380	380	jurisdiction over the agency, over state appropriations, and over
381	381	state purchasing.
382	382	SECTION 13. Section 2262.101, Government Code, is amended
383	383	to read as follows:
384	384	Sec. 2262.101. CREATION; DUTIES. (a) The Contract
385	385	Advisory Team is created to assist state agencies in improving
386	386	contract management practices by:
387	387	(1) reviewing the solicitation of major contracts by
388	388	state agencies;
389	389	(2) reviewing any findings or recommendations made by
390	390	the state auditor, including those made under Section 2262.052(b),
391	391	regarding a state agency's compliance with the contract management
392	392	guide; [and]
393	393	(3) providing recommendations to the comptroller
394	394	[commission] regarding:
395	395	(A) the development of the contract management
396	396	guide; [and]
397	397	(B) the training under Section 2262.053; and
398	398	(C) any state agency that should be exempt under
399	399	Section 2262.002(c) or 2262.052(c) from complying with the contract
400	400	management guide;
401	401	(4) certifying that state agencies have complied with
402	402	Sections 2262.066 and 2262.068; and
403	403	(5) setting standards for outsourcing state services
404	404	and prescribing methods for monitoring those services.
405	405	(b) The team shall consult with state agencies in developing
406	406	forms, contract terms, guidelines, and criteria required under this
407	407	chapter.
408	408	SECTION 14. Section 2262.102(a), Government Code, is
409	409	amended to read as follows:
410	410	(a) The team consists of the following five members:
411	411	(1) one member from the attorney general's office;
412	412	(2) two members [one member] from the comptroller's
413	413	office;
414	414	(3) one member from the Department of Information
415	415	Resources; and
416	416	(4) [one member from the Texas Building and
417	417	Procurement Commission; and
418	418	[(5)] one member from the governor's office.
419	419	SECTION 15. Subchapter C, Chapter 2262, Government Code, is
420	420	amended by adding Sections 2262.104 and 2262.105 to read as
421	421	follows:
422	422	Sec. 2262.104. UNIFORM DEFINITIONS AND FORMS. (a) The team
423	423	established under Section 2262.101 shall develop and publish a
424	424	uniform set of definitions for use as applicable in state
425	425	contracts. Each state agency shall use the terminology as
426	426	applicable in the contracts entered into by the agency.
427	427	(b) The team shall develop and publish a uniform and
428	428	automated set of forms that a state agency must use in the different
429	429	stages of the contracting process.
430	430	Sec. 2262.105. FORMS FOR REPORTING CONTRACTOR PERFORMANCE.
431	431	As part of the uniform forms published under Section 2262.104, the
432	432	team shall develop forms for use by state agencies in reporting a
433	433	contractor's performance under Section 2262.058.
434	434	SECTION 16. Chapter 2262, Government Code, is amended by
435	435	adding Subchapters D, E, F, and G to read as follows:
436	436	SUBCHAPTER D. CONTRACT PROVISIONS
437	437	Sec. 2262.151. USE OF UNIFORM FORMS. A state agency shall
438	438	use the forms developed under Section 2262.104 as templates,
439	439	guides, or samples for contracts entered into by the agency.
440	440	Sec. 2262.152. CONTRACT TERMS RELATING TO NONCOMPLIANCE.
441	441	(a) A state agency contract shall include provisions authorizing
442	442	the agency to impose clearly defined penalties for noncompliance
443	443	with contract terms. The provisions must include mechanisms for
444	444	identifying when a contractor fails to comply with the contract
445	445	terms, remedies to compel compliance, and remedies available for
446	446	persons affected by the noncompliance.
447	447	(b) The team shall develop recommendations for contract
448	448	terms regarding penalties for contractors who do not comply with a
449	449	contract, including penalties for contractors who do not disclose
450	450	conflicts of interest under Section 2262.201. The team may develop
451	451	recommended contract terms that are generally applicable to state
452	452	contracts and terms that are applicable to important types of state
453	453	contracts.
454	454	(c) A state agency may include applicable recommended terms
455	455	in a contract entered into by the agency.
456	456	Sec. 2262.153. REQUIRED PROVISION RELATING TO
457	457	SUBCONTRACTOR COMPLIANCE. Each state agency contract must require
458	458	that each contractor provide a list of all subcontractors for the
459	459	contract and include a provision that:
460	460	(1) holds the contractor responsible for the conduct
461	461	of all subcontractors in complying with the contractor's contract
462	462	with the state agency; and
463	463	(2) requires each subcontractor to disclose all
464	464	potential conflicts of interest to the state agency, according to
465	465	guidelines developed under Section 2262.201(b), when the
466	466	subcontractor contracts with or is otherwise hired by the
467	467	contractor.
468	468	Sec. 2262.154. LANGUAGE CONTAINED IN REQUEST FOR PROPOSALS.
469	469	Each state agency contract must incorporate the language used in
470	470	the request for proposals for that contract.
471	471	Sec. 2262.155. PROVISION RELATED TO POLITICAL
472	472	CONTRIBUTIONS. Each contract entered into by a state agency must
473	473	include a provision that prohibits the contractor from making a
474	474	campaign contribution to an elected official during the term of the
475	475	contract.
476	476	Sec. 2262.156. REQUIRED CONTRACTOR DISCLOSURE STATEMENT;
477	477	OUTSOURCING. (a) Each contract entered into by a state agency must
478	478	include a provision requiring disclosure of any services materially
479	479	necessary to fulfill the contract, including services performed by
480	480	a subcontractor, that will be or are performed in a country other
481	481	than the United States. This section does not apply to services
482	482	that are occasional, minor, or incidental to fulfilling the
483	483	contract.
484	484	(b) The contract must include a provision allowing the state
485	485	agency to terminate the contract and solicit a new contract, except
486	486	when a contractor takes prompt corrective action described by
487	487	Subsection (c), if:
488	488	(1) the contractor or a subcontractor of the
489	489	contractor performs a service materially necessary to fulfill the
490	490	contract in a country other than the United States; and
491	491	(2) the contractor does not disclose in the contract
492	492	that the service will be performed in a country other than the
493	493	United States.
494	494	(c) A contractor may replace a subcontractor without
495	495	termination of a contract under this section if the contractor
496	496	determines that the subcontractor is performing a service
497	497	materially necessary to fulfill the contract in a country other
498	498	than the United States and did not disclose that fact to the
499	499	contractor.
500	500	SUBCHAPTER E. ETHICS; CONFLICT OF INTEREST; PROHIBITIONS
501	501	Sec. 2262.201. CONTRACTOR CONFLICTS OF INTEREST. (a) Each
502	502	contractor who responds to a state agency's contract solicitation
503	503	shall disclose in its response all potential conflicts of interest
504	504	to the agency.
505	505	(b) The team shall develop guidelines to aid contractors and
506	506	state agencies in identifying potential conflicts of interest.
507	507	Sec. 2262.202. EXECUTIVE DIRECTORS; ETHICS IN CONTRACTING
508	508	CLASS. Each executive director of a state agency shall annually
509	509	complete the ethics and contracting class developed under Section
510	510	2262.053(f). This section does not apply to a state agency that
511	511	does not enter into any contracts.
512	512	Sec. 2262.203. PROHIBITIONS RELATED TO STATE CONTRACTS.
513	513	(a) A state agency may not enter into or renew a contract with a
514	514	person who has as an employee a former state agency employee who was
515	515	involved in contracting for the agency in the preceding six months.
516	516	(b) A state agency may not employ an individual who was
517	517	employed by a person that conducts business with the state agency
518	518	before the last day of the sixth month after the date the individual
519	519	was last employed by the person.
520	520	(c) The team may exempt a state agency from a prohibition
521	521	provided by Subsection (a) or (b).
522	522	SUBCHAPTER F. CHANGES TO CONTRACTS
523	523	Sec. 2262.251. CONTRACT AMENDMENTS, EXTENSIONS, AND CHANGE
524	524	ORDERS. (a) An extension of or amendment to a contract, including
525	525	a change order, is subject to the same rules and approval processes
526	526	as the original contract.
527	527	(b) A state agency may not extend or amend a contract
528	528	unless:
529	529	(1) the agency complies with the same rules and
530	530	approval processes for the extension or amendment as required for
531	531	the original contract; and
532	532	(2) a contract manager for the agency states in
533	533	writing why the extension or amendment is necessary.
534	534	(c) This section does not affect whether a state agency is
535	535	required to undertake a new solicitation process in the manner
536	536	required for a new contract in order to extend or amend a contract.
537	537	Sec. 2262.252. AMENDMENT REQUIRING SIGNIFICANT ALTERATION.
538	538	A state agency may not amend a contract to significantly alter the
539	539	original terms or monetary value of the contract awarded through a
540	540	competitive bidding process unless the state agency conducts
541	541	another competitive bidding process for the goods or services under
542	542	the new terms.
543	543	Sec. 2262.253. CERTAIN CONTRACT EXTENSIONS. This
544	544	subchapter does not apply to contract extensions that are
545	545	specifically established as a component of the original
546	546	procurement.
547	547	SUBCHAPTER G. OFFICE OF CONTRACT MANAGEMENT; HIGH-RISK CONTRACTS
548	548	Sec. 2262.301. DEFINITIONS. In this subchapter:
549	549	(1) "High-risk contract" means a state agency contract
550	550	that:
551	551	(A) has a value of at least $10 million; or
552	552	(B) has a value of less than $10 million, but has
553	553	high-risk factors as identified by a state agency's office of
554	554	contract management.
555	555	(2) "Major information resources project" has the
556	556	meaning assigned by Section 2054.003(10).
557	557	(3) "Quality assurance team" means the quality
558	558	assurance team established under Section 2054.158.
559	559	(4) "Solicitation" means a solicitation for bids,
560	560	offers, qualifications, proposals, or similar expressions of
561	561	interest for a high-risk contract.
562	562	Sec. 2262.302. ESTABLISHMENT; GENERAL DUTIES. Each state
563	563	agency subject to this chapter shall establish an office of
564	564	contract management to:
565	565	(1) develop criteria for identifying high-risk
566	566	factors in contracts;
567	567	(2) review and approve an action related to a
568	568	high-risk contract as provided by Section 2262.303;
569	569	(3) provide recommendations and assistance to agency
570	570	personnel throughout the contract management process; and
571	571	(4) coordinate and consult with the quality assurance
572	572	team on all high-risk contracts relating to a major information
573	573	resources project.
574	574	Sec. 2262.303. REVIEW AND APPROVAL; WAIVER. (a) A state
575	575	agency must receive approval from the agency's office of contract
576	576	management before taking the following actions in relation to a
577	577	high-risk contract:
578	578	(1) publicly releasing solicitation documents;
579	579	(2) executing a final contract; and
580	580	(3) making a payment or a series of payments that equal
581	581	half of the contract value.
582	582	(b) In determining whether to approve an action described by
583	583	Subsection (a), the agency's office of contract management shall
584	584	review related documentation to ensure that potential risks related
585	585	to the high-risk contract have been identified and mitigated.
586	586	(c) The comptroller by rule may adopt criteria for waiving
587	587	the review and approval requirements under Subsections (a) and (b).
588	588	Sec. 2262.304. SOLICITATION AND CONTRACT CANCELLATION.
589	589	After review of and comment on the matter by the Legislative Budget
590	590	Board and the governor, a state agency's office of contract
591	591	management may recommend the cancellation of a solicitation or a
592	592	contract during the review process under Section 2262.303 if:
593	593	(1) a proposed solicitation is not in the best
594	594	interest of the state;
595	595	(2) a proposed contract would place the state at an
596	596	unacceptable risk if executed; or
597	597	(3) an executed contract is experiencing performance
598	598	failure or payment irregularities.
599	599	Sec. 2262.305. AUDIT OF HIGH-RISK CONTRACT. The state
600	600	auditor shall conduct an audit of a state agency contract
601	601	identified as high risk by a state agency or the team.
602	602	SECTION 17. Sections 2155.004(e), 2262.001(1-a), and
603	603	2262.0011, Government Code, are repealed.
604	604	SECTION 18. (a) Sections 2262.065 through 2262.068,
605	605	Government Code, and Subchapter G, Chapter 2262, Government Code,
606	606	as added by this Act, apply only to a contract for which a state
607	607	agency first advertises or otherwise solicits bids, proposals,
608	608	offers, or qualifications on or after the effective date of this
609	609	Act.
610	610	(b) Section 2262.201(a), Government Code, as added by this
611	611	Act, applies only in relation to a contract for which a state agency
612	612	first solicits bids, proposals, offers, or qualifications on or
613	613	after the date that the Contract Advisory Team's guidelines
614	614	regarding potential conflicts of interest take effect.
615	615	SECTION 19. Not later than May 1, 2010, the comptroller of
616	616	public accounts shall develop the training program, including the
617	617	ethics and contracting class, required by Section 2262.053,
618	618	Government Code, as amended by this Act, and Section 2262.0535,
619	619	Government Code, as added by this Act.
620	620	SECTION 20. A member of a governing body of a state agency
621	621	is not required to complete the training developed under Section
622	622	2262.0535, Government Code, as added by this Act, until September
623	623	1, 2011.
624	624	SECTION 21. An executive director of a state agency is not
625	625	required to comply with Section 2262.202, Government Code, as added
626	626	by this Act, until September 1, 2011.
627	627	SECTION 22. A contract manager is not required to be
628	628	certified under Chapter 2262, Government Code, as amended by this
629	629	Act, until September 1, 2011.
630	630	SECTION 23. (a) As soon as practicable, and not later than
631	631	May 1, 2010, the Contract Advisory Team shall develop the forms,
632	632	criteria, recommendations, and provisions required by this Act,
633	633	including Sections 2262.104, 2262.105, 2262.152, and 2262.201(b),
634	634	Government Code, as added by this Act.
635	635	(b) A state agency is not required to comply with Sections
636	636	2262.057 through 2262.064 and Sections 2262.151, 2262.152,
637	637	2262.153, and 2262.156, Government Code, as added by this Act,
638	638	until September 1, 2011. A state agency may comply earlier if the
639	639	forms, electronic requirements, database, or other items are
640	640	available before that date.
641	641	SECTION 24. This Act takes effect November 1, 2009.