82R20794 MTB-F
By: Parker, Callegari, Harper-Brown, Darby, H.B. No. 198
Carter, et al.
Substitute the following for H.B. No. 198:
By: Callegari C.S.H.B. No. 198
A BILL TO BE ENTITLED
AN ACT
relating to the use of private procurement specialists for certain
state agency contracts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2262.002(b), Government Code, is amended
to read as follows:
(b) Except as provided by Section 2262.152, this [This]
chapter does not apply to contracts of the Texas Department of
Transportation that:
(1) relate to highway construction or highway
engineering; or
(2) are subject to Section 201.112, Transportation
Code.
SECTION 2. Section 2262.101, Government Code, is amended to
read as follows:
Sec. 2262.101. CREATION; DUTIES. The Contract Advisory
Team is created to assist state agencies in improving contract
management practices by:
(1) [reviewing the solicitation of major contracts by
state agencies;
[(2)] reviewing any findings or recommendations made
by the state auditor, including those made under Section
2262.052(b), regarding a state agency's compliance with the
contract management guide; and
(2) [(3)] providing recommendations to the commission
regarding:
(A) the development of the contract management
guide; and
(B) the training under Section 2262.053.
SECTION 3. Chapter 2262, Government Code, is amended by
adding Subchapter D to read as follows:
SUBCHAPTER D. PRIVATE PROCUREMENT SPECIALISTS
Sec. 2262.151. DEFINITIONS. In this subchapter:
(1) "High-cost contract" means a state agency contract
that has a value of at least $10 million.
(2) "Major information resources project" has the
meaning assigned by Section 2054.003.
(3) "Solicitation" means a solicitation for bids,
offers, qualifications, proposals, or similar expressions of
interest for a high-cost contract.
Sec. 2262.152. APPLICABILITY TO CERTAIN CONTRACTS. (a)
This subchapter applies to a Texas Department of Transportation
contract only if the contract:
(1) is a high-cost contract; and
(2) is for a major information resources project.
(b) This subchapter does not apply to a contract entered
into under Chapter 2166.
Sec. 2262.153. PRIVATE PROCUREMENT SPECIALISTS. (a) A
state agency shall, when appropriate, select a private procurement
specialist as provided by this subchapter.
(b) A private procurement specialist must be a person from
the private sector who is:
(1) an expert in the subject matter of the contract for
which the private procurement specialist is selected; and
(2) proficient in the procurement laws applicable to
the contract for which the private procurement specialist is
selected.
(c) A private procurement specialist shall:
(1) review and approve actions under Section
2262.154(d); and
(2) throughout the contract formation and contract
management process, provide recommendations and assistance to the
state agency regarding the contract for which the private
procurement specialist is selected.
(d) Before the comptroller or, if applicable, the
Department of Information Resources approves the use of a private
procurement specialist under Section 2262.154, the comptroller or,
if applicable, the Department of Information Resources and the
state agency seeking to enter into the contract shall consider:
(1) potential private procurement specialists'
relative experience and knowledge on the subject matter of the
contract; and
(2) probable fees or costs associated with securing
the services of a private procurement specialist.
(e) A private procurement specialist or a business entity in
which the specialist has a substantial interest may not bid on or
otherwise make a proposal to receive a contract for which the
specialist was selected. A selected private procurement specialist
or a business entity in which the specialist has a substantial
interest may not provide services for or to a client, other than
services provided to the state agency under this subchapter, if the
provision of services:
(1) involves a matter directly related to the contract
for which the specialist was selected by the agency; or
(2) creates a conflict of interest that may directly
affect the state's interest.
(f) The prohibitions in Subsection (e) also apply to:
(1) a person that is an agent, subsidiary, or parent
company of the private procurement specialist; or
(2) a person related within the second degree by
consanguinity or affinity to the private procurement specialist.
(g) For purposes of this section, a private procurement
specialist has a substantial interest in a business entity if:
(1) the specialist or the specialist's spouse, if
applicable, owns the business entity, or the combined ownership of
the specialist and the specialist's spouse, if applicable, is at
least 10 percent of the voting stock or shares of the business
entity; or
(2) the specialist or the specialist's spouse, if
applicable, is a partner, limited partner, or officer of the
business entity.
(h) In this section, "business entity" means a sole
proprietorship, partnership, firm, corporation, holding company,
joint-stock company, receivership, trust, or other entity
recognized by law.
Sec. 2262.154. USE OF PRIVATE PROCUREMENT SPECIALIST. (a)
With the approval of the comptroller or, if applicable, the
Department of Information Resources, a state agency shall use a
private procurement specialist for a high-cost contract if the
agency determines that given the cost and nature of the proposed
contract there will probably be a net savings to the state over the
life of the contract if a specialist is selected.
(b) The approval of the Department of Information Resources
is required, rather than the comptroller's approval, in order to
use a private procurement specialist under Subsection (a) for a
high-cost contract that is for a major information resources
project.
(c) A state agency seeking to enter into a high-cost
contract must send to the comptroller or, if applicable, to the
Department of Information Resources the information necessary to
approve the use of a private procurement specialist under this
section. At a minimum, the information must include the state
agency's draft solicitation for the contract.
(d) During the contract formation and contract management
process with respect to a high-cost contract for which a private
procurement specialist is approved, a state agency shall
collaborate with and, except as provided by Subsection (f), obtain
the approval of the private procurement specialist before taking
any of the following actions in relation to the contract:
(1) publicly releasing solicitation documents;
(2) executing a final contract; and
(3) making a payment or a series of payments that equal
half of the contract value.
(e) In determining whether to approve an action described by
Subsection (d), the selected private procurement specialist shall
review related documentation to ensure that potential risks related
to the high-cost contract have been identified and mitigated.
(f) If a state agency disagrees with a determination of a
private procurement specialist regarding an action described by
Subsection (d), the agency may take the action without the approval
of the specialist if the administrative head of the agency and the
comptroller or, if applicable, the Department of Information
Resources approve the action.
Sec. 2262.155. SOLICITATION AND CONTRACT CANCELLATION. (a)
After review of and comment on the matter by the Legislative Budget
Board and the governor, the selected private procurement specialist
may recommend the cancellation of a solicitation or a contract
under Section 2262.154(d) if:
(1) a proposed solicitation is not in the best
interest of the state;
(2) a proposed contract would place the state at an
unacceptable risk if executed; or
(3) with regard to an executed contract, an agency is
experiencing performance failure or payment irregularities.
(b) Each high-cost contract is subject to cancellation in
accordance with this section and Section 2262.154(d).
(c) A state agency shall include in each of its high-cost
contracts a term that provides that the state agency may
immediately terminate the contract without further obligation to
the contractor if there is performance failure or there are payment
irregularities with regard to the contract.
Sec. 2262.156. PAYMENT OF PRIVATE PROCUREMENT SPECIALIST
SERVICES. (a) In this section, "ordinary procurement procedures"
means procedures related to the contract formation and contract
management process ordinarily performed by state agency
procurement personnel, including planning, determination of the
procurement method, solicitation, evaluation and award, inspection
and acceptance, contract administration, and payment.
(b) The state agency seeking to enter into a contract for
which a private procurement specialist is selected shall enter into
an agreement with the specialist to compensate the specialist using
either:
(1) a flat fee agreement; or
(2) a pay-for-performance agreement described by
Subsection (c).
(c) If a pay-for-performance agreement is used, the state
agency shall develop a projected budget for the contract based on
the agency's expected cost of entering into and managing the
contract if the agency were to enter into and manage the contract
using ordinary procurement procedures but without using the
services of a private procurement specialist. The
pay-for-performance agreement must provide that the private
procurement specialist will be paid a percentage of the savings
realized by the agency as a result of using the private procurement
specialist, compared with the agency's projected budget for the
contract.
Sec. 2262.157. REPORT. Not later than January 1 of each
year, each state agency that has used the services of a private
procurement specialist during the preceding year shall report to
the comptroller the savings realized by the agency as a result of
using the private procurement specialist's services. A state
agency shall base the determination of savings realized on the
agency's projected costs or budget for the contract compared to the
actual costs for the contract.
Sec. 2262.158. RULES; WAIVER. The comptroller and the
Department of Information Resources shall adopt rules to implement
and administer this subchapter, including rules for waiving
approval of the use of a private procurement specialist under
Section 2262.154.
SECTION 4. Section 2262.051(f), Government Code, is
repealed.
SECTION 5. Subchapter D, Chapter 2262, Government Code, as
added by this Act, applies only to a contract for which the
solicitation of bids, offers, qualifications, proposals, or
similar expressions of interest is published on or after September
1, 2011.
SECTION 6. This Act takes effect September 1, 2011.