82R8559 YDB-D
By: Reynolds H.B. No. 1851
A BILL TO BE ENTITLED
AN ACT
relating to historically underutilized businesses and the
preference given for goods and services purchased by state
agencies; providing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2155.074(b), Government Code, is amended
to read as follows:
(b) In determining the best value for the state, the
purchase price and whether the goods or services meet
specifications are the most important considerations. However, the
commission or other state agency may, subject to Subsection (c) and
Section 2155.075, consider other relevant factors, including:
(1) installation costs;
(2) life cycle costs;
(3) the quality and reliability of the goods and
services;
(4) the delivery terms;
(5) indicators of probable vendor performance under
the contract such as past vendor performance, the vendor's
financial resources and ability to perform, the vendor's experience
or demonstrated capability and responsibility, and the vendor's
ability to provide reliable maintenance agreements and support;
(6) the cost of any employee training associated with
a purchase;
(7) the effect of a purchase on agency productivity;
(8) the vendor's anticipated economic impact to the
state or a subdivision of the state, including potential tax
revenue and employment; [and]
(9) whether the business is a historically
underutilized business as defined by Section 2161.001; and
(10) other factors relevant to determining the best
value for the state in the context of a particular purchase.
SECTION 2. Sections 2155.444(a), (b), (c), and (e),
Government Code, are amended to read as follows:
(a) The commission and all state agencies making purchases
of goods, including agricultural products, shall give preference to
those produced or grown in this state or offered by Texas bidders as
follows:
(1) goods produced or offered by a Texas bidder that is
a historically underutilized business [owned by a service-disabled
veteran who is a Texas resident] shall be given a first preference
and goods produced in this state or offered by other Texas bidders
shall be given second preference, if the cost to the state and
quality are equal; and
(2) agricultural products grown in this state shall be
given first preference and agricultural products offered by Texas
bidders shall be given second preference, if the cost to the state
and quality are equal.
(b) If goods, including agricultural products, produced or
grown in this state or offered by Texas bidders exceed 105 percent
of the cost of other goods or are not equal in [cost and] quality to
other products, then goods, including agricultural products,
produced or grown in other states of the United States shall be
given preference over foreign products if the cost to the state and
quality are equal.
(c) In this section:
(1) "Agricultural products" includes textiles and
other similar products.
(2) "Historically underutilized business" has the
meaning assigned by Section 2161.001.
[(1-a) "Service-disabled veteran" means a person who
is a veteran as defined by 38 U.S.C. Section 101(2) and who has a
service-connected disability as defined by 38 U.S.C. Section
101(16).]
(3) [(2)] "Texas bidder" means a business:
(A) incorporated in this state;
(B) that has its principal place of business in
this state; or
(C) that has an established physical presence in
this state.
(e) The commission and all state agencies procuring
services shall give first preference to services offered by a Texas
bidder that is a historically underutilized business [owned by a
service-disabled veteran who is a Texas resident] and shall give
second preference to services offered by other Texas bidders if:
(1) the services meet state requirements regarding the
service to be performed and expected quality; and
(2) the cost of the service does not exceed the cost of
other similar services of similar expected quality that are offered
by a bidder that is not entitled to a preference under this
subsection.
SECTION 3. Section 2161.001, Government Code, is amended by
amending Subdivision (3) and adding Subdivision (5) to read as
follows:
(3) "Economically disadvantaged person" means a
person who is economically disadvantaged because of the person's
identification as a member of a certain group, including Black
Americans, Hispanic Americans, women, Asian Pacific Americans,
[and] Native Americans, and veterans as defined by 38 U.S.C.
Section 101(2) who have a service-connected disability as defined
by 38 U.S.C. Section 101(16), and who has suffered the effects of
discriminatory practices or other similar insidious circumstances
over which the person has no control.
(5) "Professional services" has the meaning assigned
by Section 2254.002.
SECTION 4. Section 2161.064, Government Code, is amended by
adding Subsection (f) to read as follows:
(f) A state agency may use the directory compiled under this
section to create a mailing list for soliciting bids from
historically underutilized businesses. The state agency may rotate
the businesses included on the mailing list by using different
portions of the directory for separate acquisitions of goods or
services if the agency determines that the size of the acquisition
justifies the rotation. If the state agency rotates the businesses
included on a solicitation mailing list, bids must be solicited
from:
(1) a bidder who was previously awarded the bid for the
goods or services;
(2) businesses that have been added to the directory
since the last solicitation; and
(3) businesses included in the portion of the
directory selected to be included in the solicitation mailing
list.
SECTION 5. Subchapter B, Chapter 2161, Government Code, is
amended by adding Section 2161.067 to read as follows:
Sec. 2161.067. JOINT VENTURES. (a) In this section:
(1) "Eligible purchase" means a purchase of goods or
services that:
(A) the comptroller determines is eligible for a
joint venture based on work and market availability; and
(B) exceeds the minimum dollar value provided by
comptroller rule.
(2) "Joint venture" means an association of two or
more individuals or businesses, at least one of which is a
historically underutilized business, that is:
(A) established to carry on a single business
activity;
(B) certified as a joint venture by the
comptroller; and
(C) limited in scope and duration.
(b) The comptroller shall determine whether a purchase of
goods or services is an eligible purchase for which a state agency
is required to make a good faith effort to award the contract to a
joint venture. The state agency may not accept a contract bid
submitted by any bidder other than a joint venture unless the
comptroller determines, after reviewing relevant facts, documents,
and circumstances, that the agency has demonstrated its good faith
efforts to award the contract to a joint venture.
(c) A contract for a joint venture must be in writing and
must:
(1) be based on the sharing of real economic interest
in the venture that includes proportionate control over management,
interest in capital acquired by the joint venture, and interest in
earnings;
(2) be completed by all parties to the joint venture;
(3) be executed before a notary public;
(4) clearly delineate the rights and responsibilities
of each member or partner;
(5) comply with any requirements of the comptroller as
provided in bid documents or otherwise; and
(6) provide that the joint venture continue for, at a
minimum, the duration of the eligible purchase.
(d) The comptroller shall review and approve all
contractual agreements regarding the terms of each joint venture
relationship before a contract is awarded for an eligible purchase,
including agreements related to:
(1) the initial capital investment of each venture
partner;
(2) the proportional allocation of profits and losses
to each venture partner;
(3) prohibitions on each venture partner's liability
exceeding the partner's percentage of revenue earned while a
participant in the joint venture;
(4) the sharing of the right to control the ownership
and management of the joint venture;
(5) actual participation of the venture partners with
regard to the purchase;
(6) the method of and responsibility for accounting;
(7) the method by which disputes are resolved; and
(8) any additional information required by the
comptroller as provided in bid documents or otherwise.
(e) A joint venture may submit an agreement required under
Subsection (d) for preapproval not later than the 14th day before
the date set for receipt of bids on an eligible purchase.
(f) An agreement required under Subsection (d) must be
submitted on or before the date set for receipt of bids on an
eligible purchase. A bid submitted by a joint venture that does not
include a satisfactory written joint venture agreement in
accordance with the requirements of this section is considered
nonresponsive and rejected.
(g) The joint venture, and each member of the joint venture,
shall provide the comptroller access to review all records
pertaining to joint venture agreements before and after the award
of a contract in order to reasonably assess compliance with this
section.
(h) After the award of a contract to a joint venture, any
member of the joint venture who believes that the terms of the
agreement as approved by the comptroller have not been complied
with may seek review and mediation of the agreement before the
comptroller. The request for review must be made in writing.
(i) If, after the award of a contract, a dispute arises
between the prime contractor and a subcontractor regarding
performance of work on or provision of services or supplies for the
eligible purchase, the prime contractor or subcontractor may seek
review and mediation of the issue before the comptroller. The
request for review must be made in writing.
(j) Not later than the 20th day after the date the
comptroller receives a request for review and if the dispute has not
been resolved informally among the parties, the comptroller shall
set a mediation date and provide written notice of the mediation
date to each interested party. The comptroller may make
recommendations in an attempt to resolve the dispute.
(k) If the mediation with the comptroller does not resolve
all disputes, the comptroller may refer the mediation proceedings
to a qualified outside mediator on consent of the interested
parties.
(l) A member of a joint venture who fails to comply with any
portion of this section, and whose failure to comply continues for a
period of at least 30 days after receiving written notice of the
noncompliance from the comptroller, is subject to any or all of the
following penalties:
(1) withholding of 10 percent of all future payments
for the eligible purchase until the comptroller determines the
member of the joint venture is in compliance with this section;
(2) withholding of all future payments under the
eligible purchase until the comptroller determines the member of
the joint venture is in compliance with this section;
(3) cancellation of the eligible purchase; and
(4) ineligibility for future contracts or
subcontracts with this state for one to five years from the date on
which the penalty is imposed.
SECTION 6. Section 2161.252, Government Code, is amended by
adding Subsection (c) to read as follows:
(c) A subcontracting plan must require the contractor to
accept bids, proposals, offers, or other applicable expressions
from historically underutilized businesses for not less than 10
working days after the date the contractor notifies the business of
the subcontracting opportunity. This subsection does not apply to
a professional services contract.
SECTION 7. Section 2254.002(2), Government Code, is amended
to read as follows:
(2) "Professional services" means services:
(A) within the scope of the practice, as defined
by state law, of:
(i) accounting;
(ii) architecture;
(iii) landscape architecture;
(iv) land surveying;
(v) medicine;
(vi) optometry;
(vii) professional engineering;
(viii) real estate appraising; or
(ix) professional nursing; or
(B) provided in connection with the professional
employment or practice of a person who is licensed or registered as:
(i) a certified public accountant;
(ii) an architect;
(iii) a landscape architect;
(iv) a land surveyor;
(v) a physician, including a surgeon;
(vi) an optometrist;
(vii) a professional engineer;
(viii) a state certified or state licensed
real estate appraiser; [or]
(ix) a registered nurse; or
(x) an attorney.
SECTION 8. (a) Not later than December 1, 2011, the
comptroller of public accounts shall adopt the rules required to
implement the changes in law made by this Act.
(b) Chapters 2155 and 2161, Government Code, as amended by
this Act, apply only to a purchase for goods or services or a
contract entered into on or after January 1, 2012.
SECTION 9. This Act takes effect September 1, 2011.