By: West S.B. No. 1488
(In the Senate - Filed March 10, 2011; March 22, 2011, read
first time and referred to Committee on Higher Education;
April 26, 2011, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 6, Nays 0; April 26, 2011,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 1488 By: Watson
A BILL TO BE ENTITLED
AN ACT
relating to the purchasing and contracting practices of junior
college districts; providing criminal penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subsection (a), Section 44.0311, Education Code,
is amended to read as follows:
(a) Except as provided by Subchapter K, Chapter 130
[Subsection (c)], this subchapter applies to junior college
districts.
SECTION 2. Subchapter A, Chapter 130, Education Code, is
amended by adding Section 130.0104 to read as follows:
Sec. 130.0104. POLICY AND REPORT REGARDING HISTORICALLY
UNDERUTILIZED BUSINESSES. (a) In this section, "historically
underutilized business" has the meaning assigned by Section
2161.001, Government Code.
(b) This section applies only to a junior college district
that:
(1) is located wholly or partly in a county with a
population of one million or more; and
(2) had an annual enrollment of 30,000 or more
full-time equivalent students in one or more of the most recent five
academic years.
(c) Each junior college district shall adopt a policy
stating its commitment to developing, maintaining, and enhancing
participation by historically underutilized businesses in all
phases of the district's procurement processes in order to support,
to the greatest extent feasible, the efforts of historically
underutilized businesses to compete for purchases of equipment,
supplies, services, including professional services, and
construction contracts.
(d) Annually, each junior college district shall publish a
report of the total number and total value of contracts awarded by
the district in the preceding fiscal year and the number and total
value of those contracts awarded to historically underutilized
businesses. The report must be published in a newspaper of general
circulation in the county in which the majority of the territory or
population of the district is located not later than the 60th day
following the last day of the district's fiscal year.
SECTION 3. Chapter 130, Education Code, is amended by
adding Subchapters K, L, and M to read as follows:
SUBCHAPTER K. PURCHASING CONTRACTS FOR GOODS AND SERVICES OTHER
THAN CONSTRUCTION OR PROFESSIONAL SERVICES
Sec. 130.251. DEFINITIONS. In this subchapter:
(1) "Board of trustees" means the governing board of a
district.
(2) "District" means a junior college district.
(3) "Purchase of goods or services":
(A) includes:
(i) contracting for the rights to use
rather than own goods;
(ii) the purchase of the materials and
labor incidental to the delivery and installation of personal
property; and
(iii) the purchase of services to repair or
replace equipment; and
(B) does not include the purchase or lease of
real property.
(4) "Services" does not include:
(A) construction services; or
(B) professional services, including services of
a consultant, to which Subchapter M applies.
Sec. 130.2511. USE OF TERMS "BIDDER," "VENDOR," AND "BID."
(a) In this subchapter, the terms "bidder" and "vendor" are used
interchangeably to identify an entity that responds to a request
for competitive bids, proposals, or qualifications.
(b) In this subchapter, the term "bid" is used to refer to a
competitive bid, proposal, or statement of qualifications.
Sec. 130.252. CONFLICT WITH OTHER LAW. To the extent of any
conflict, this subchapter prevails over any other law relating to
the purchase of goods or services by a district other than a law
relating to:
(1) contracting with historically underutilized
businesses; or
(2) the procurement of goods and services from persons
with disabilities.
Sec. 130.253. PURCHASE METHODS. (a) Except as otherwise
provided by this subchapter and subject to Section 130.264, each
contract for the purchase of goods or services by a district with a
value of $50,000 or more that covers one or more fiscal years shall
be made by the method, of the following methods, that provides the
best value for the district:
(1) competitive sealed bids;
(2) competitive sealed proposals;
(3) the reverse auction procedure defined by Section
2155.062(d), Government Code; or
(4) the formation of a political subdivision
corporation under Section 304.001, Local Government Code.
(b) Only one of the methods listed in Subsection (a) may be
used for any individual contract. The district must determine
which method provides the best value for the district before
publishing the notice required by Section 130.258.
(c) If the district uses the competitive sealed proposal
method, the district shall:
(1) reveal when the proposals are opened the names of
the companies submitting proposals; and
(2) keep the contents of the proposals confidential
until the district concludes negotiations and awards a contract.
(d) Without complying with Subsection (a), a district may
purchase a good or service that is available from only one source,
including:
(1) an item for which competition is precluded because
of the existence of a patent, copyright, secret process, or
monopoly;
(2) a film, recording, periodical, manuscript, book,
or computer software;
(3) a utility service, including gas or water;
(4) a captive replacement part or component for
equipment;
(5) a product needed to match or work with like
products;
(6) technical or specialized services, including
advertising, audio/video production, and the repair and
maintenance of specialized equipment; and
(7) perishable goods, vehicle fuel, advertising
services, meeting and catering services, and travel services,
including airfare, ground transportation, and lodging.
(e) Without complying with Subsection (a), a district may
purchase a good or service under:
(1) an interlocal contract under Chapter 791,
Government Code;
(2) a contract established by the comptroller or
Department of Information Resources, including a contract for the
purchase of travel services, telephone service, computers, and
computer-related equipment and service, cabling, and software; or
(3) a purchase made under Subchapter D, F, or G,
Chapter 271, Local Government Code.
(f) A contract for services that results in no cost to the
district or that provides income greater than $50,000 to the
district must be based on bids, proposals, or qualifications that
are solicited and awarded in the same manner as a contract for the
purchase of goods or services. Such contracts include contracts
for bookstore services, food services, and vending services.
(g) If district property is destroyed, stolen, severely
damaged, or unusable, or a contractor is unable to fulfill its
obligations in providing goods and services, and the board of
trustees, or its designee, determines that the delay posed by using
the methods required by Subsection (a) would pose a material threat
to personal safety or of potential damage to other property or would
prevent or substantially impair the conduct of classes or other
essential district activities, then contracts for the replacement
or repair of the property may be made by methods other than those
required by Subsection (a).
(h) Without complying with Subsection (a), a district may
purchase, license, or otherwise acquire library goods and services,
including in any manner authorized by law for the purchase,
license, or acquisition of library goods and services by a public
senior college or university, as defined by Section 61.003. In this
subsection, "library goods and services" means:
(1) serial and journal subscriptions, including
electronic databases, digital content, and information products;
(2) other library materials and resources, including
books, e-books, and media not available under a statewide contract
and papers;
(3) library services, including periodical jobber and
binding services not available under a statewide contract;
(4) equipment and supplies specific to the storage and
access of library content; and
(5) library or resource-sharing programs operated by
the Texas State Library and Archives Commission.
Sec. 130.254. PURCHASE OF INSURANCE. (a) A district may
acquire insurance using a two-step process to obtain competitive
sealed proposals. In the first step, the district shall determine
which insurance providers are represented by agents interested in
providing insurance for the district. If more than one agent
indicates a desire to represent the same provider, the agent with
the longest and most substantial relationship with the insurance
provider shall be authorized to submit a proposal for the
designated insurance provider. In the second step, the district
shall notify the interested agents in writing as to which insurance
providers the agents represent and request the agents to submit
proposals for providing insurance.
(b) In notifying the interested agents to begin the second
step, the district is not required to comply with Section 130.258.
However, the district in the request for proposals shall give the
interested agents notice of the date, time, and place where
proposals are to be submitted. Proposals received after the date
and time stated in the request for proposals may not be considered.
Sec. 130.255. MULTIYEAR CONTRACT. A contract for the
purchase of goods or services that extends past the end of a
district's fiscal year must include a provision that permits
termination at the end of each fiscal year. Contracts solely for
the purchase of goods may not exceed five years in duration.
Sec. 130.256. EVALUATION AND AWARD OF CONTRACT.
(a) Except as otherwise provided by this subchapter, a district
shall award a contract for the purchase of goods or services to the
lowest responsible bidder offering the best value to the district
according to the selection criteria established by the district.
The district shall publish in the request for bids, proposals, or
qualifications the criteria the district will use to evaluate the
offers.
(b) In determining the lowest responsible bidder, the
district shall consider:
(1) the purchase price, including delivery and
installation charges;
(2) the reputation of the bidder and of the bidder's
goods or services;
(3) the quality of the bidder's goods or services;
(4) the extent to which the offered goods or services
meet the district's needs;
(5) the bidder's past relationship with the district;
(6) the total long-term cost to the district to
acquire the bidder's goods or services;
(7) the extent to which the offers comply with the
requirements of the request for bids, proposals, or qualifications;
(8) any other relevant factor specifically listed in
the request for bids or proposals; and
(9) the impact on the ability of the district to comply
with laws and rules relating to historically underutilized
businesses.
(c) A district may reject any or all bids, proposals, or
qualifications, or parts of bids, proposals, or qualifications, if
the rejection serves the district's interest.
(d) The district shall provide all bidders with the
opportunity to bid to provide the same goods or services on equal
terms and to have bids judged according to the same standards as
those set forth in the request for bids.
(e) Bids may be opened only by the district in a
district-owned or district-controlled facility. The meeting or
other occasion at which bids are opened shall be open to the public.
At the time the district opens a bid, if one or more members of the
public are present, the appropriate employee or officer of the
district shall read aloud the name of the bidder and the total bid
amount, if the bid is of a type that should contain a single bid
amount. When opening proposals or qualifications, the appropriate
employee or officer shall read aloud only the name of the
respondents and may not disclose the contents of a proposal or
qualification on opening or during negotiations with competing
bidders. At least two district employees or members of the
district's board of trustees must be present at the bid, proposal,
or qualification opening.
(f) A bid that has been opened may not be changed for the
purpose of correcting an error in the bid price. If there is a
discrepancy between the total price and the unit price of a bid, the
unit price prevails. If there is a discrepancy between the written
price and the numerical price of a bid, the written price prevails.
(g) This subchapter does not change the common law right of
a bidder to withdraw a bid due to a material mistake in the bid.
(h) The district shall document the basis of its selection
and shall make its evaluations public not later than the seventh day
after the date the contract is awarded. The district shall state in
writing the reasons for making an award.
(i) A contract awarded in violation of this subchapter is
void.
(j) In awarding a contract by competitive sealed bid under
this section, a district that has its central administrative office
located in a municipality with a population of less than 250,000 may
consider a bidder's principal place of business in the manner
provided by Section 271.9051, Local Government Code. This
subsection does not apply to the purchase of telecommunications
services or information services, as those terms are defined by 47
U.S.C. Section 153.
Sec. 130.257. RULES AND PROCEDURES; AUDITS BY STATE
AUDITOR. (a) The board of trustees may adopt rules and procedures
for the acquisition of goods or services by the district.
(b) District purchases of goods or services are subject to
audit by the state auditor in accordance with Chapter 321,
Government Code.
Sec. 130.258. NOTICE. (a) Except as otherwise provided by
this subchapter, for any method of contracting selected under
Section 130.253(a), the district shall, within a seven-day period,
publish the notice required by this section in at least two issues
of any newspaper of general circulation in the county in which the
district's central administrative office is located. The deadline
for receiving bids or proposals may not be less than 10 business
days after the date of the publication of the first newspaper
notice. The deadline for receiving responses to a request for
qualifications may not be less than five business days after the
date of the publication of the last newspaper notice. If there is
not a newspaper of general circulation in the county in which the
district's central administrative office is located, the notice
shall be published in a newspaper of general circulation in a
location nearest the district's central administrative office. In
a two-step procurement process, the time and place where the
second-step bids, proposals, or responses will be received are not
required to be included in the notice.
(b) The district may, as an alternative to publishing notice
in a newspaper exclusively under Subsection (a), publish on a
publicly accessible Internet website the notice required by this
section. Before or at the same time the district first publishes
the Internet notice, the district shall publish a notice in a
newspaper of general circulation, as described by Subsection (a),
that includes the name of the goods or services to be purchased, the
date, time, and place for receiving and opening bids, proposals, or
statements of qualifications, and the Internet address of the
Internet website where detailed requirements may be found. The
notice posted on the Internet under this subsection must be posted
every day for at least five business days before the deadline for
receiving the bids or proposals or statements of qualifications.
(c) Except as otherwise provided by Subsection (b) for the
newspaper notice required by that subsection, the notice required
by this section must include:
(1) the location where the request for bid, proposal,
or qualification documents may be obtained or examined;
(2) the date, time, and place for receiving and
opening bids, proposals, or statements of qualifications;
(3) a general description of the goods or services;
(4) the location and time of any mandatory site
inspections or pre-bid meetings; and
(5) the amount of any required bid bond, payment bond,
or performance bond.
Sec. 130.259. DISCUSSION AND REVISION OF PROPOSALS.
(a) As provided in a request for proposals and under rules adopted
by the district, the district may discuss acceptable or potentially
acceptable proposals with bidders to assess a bidder's ability to
meet the solicitation requirements.
(b) After receiving a proposal but before making an award,
the district may permit the three highest-ranking bidders to revise
their proposals, within the scope of the published specifications,
to obtain the best final offer.
Sec. 130.260. PRE-BID CONFERENCE OR SITE VISIT. (a) The
district may require a principal, officer, or employee of each
prospective bidder to attend a mandatory pre-bid conference or site
visit, or both, as a condition of a request for bid or proposal.
Notice of a requirement under this subsection must be included in
the notice published under Section 130.258.
(b) After the district conducts a mandatory pre-bid
conference or site visit, the district may send any additional
required notice for the proposed contract only to prospective
bidders who attended or were represented at the conference or who
are documented as having visited the site.
Sec. 130.261. IDENTICAL BIDS. If, after considering the
factors described by Section 130.256, the district determines that
the district has received identical bids, the district shall cast
lots to determine which bidder will be awarded the contract. The
district shall invite the bidders to witness the selection process
under this section. The selection process must be conducted by at
least two district employees or members of the district's board of
trustees.
Sec. 130.262. BID DEPOSIT. (a) The district may, as the
district determines necessary, require a bid deposit in an amount
determined by the district. The amount of the deposit, if any, must
be stated in the notice required by Section 130.258 of the
invitation to bid.
(b) On the award of a contract or the rejection of all bids,
the district shall return the bid deposit of an unsuccessful
bidder. The bid deposit of the successful bidder may be retained
until the contract is signed by the district. A bid deposit may not
be held longer than 90 days.
(c) The bid deposit required by the district, if any, must
be in the form of a cashier's check, certified check, or bid bond
written by a surety authorized to conduct business in this state. A
district may elect to require a bid deposit to be in the form of a
bid bond.
Sec. 130.263. PERFORMANCE BOND. A district may require a
contractor to provide a performance bond in the amount of the
contract before executing a contract for the use or purchase of
goods or services with a value of $100,000 or more. The bond must be
written by a surety authorized to conduct business in this state and
generally comply with the performance bond requirements of Chapter
2253, Government Code.
Sec. 130.264. ENFORCEMENT OF PURCHASING PROCEDURES:
CRIMINAL PENALTIES; REMOVAL; INELIGIBILITY; INJUNCTION. (a) In
this section:
(1) "Component purchases" means purchases of the
component parts of an item that in normal purchasing practices
would be purchased in one purchase.
(2) "Separate purchases" means purchases, made
separately, of goods or services that in normal purchasing
practices would be purchased in one purchase.
(3) "Sequential purchases" means purchases, made over
a period, of goods or services that in normal purchasing practices
would be purchased in one purchase.
(b) An officer, employee, or agent of a district commits an
offense if the person with criminal negligence makes or authorizes
separate, sequential, or component purchases for the purpose of
avoiding the requirements of Section 130.253, 130.256, or 130.266.
An offense under this subsection is a Class B misdemeanor and is an
offense involving moral turpitude that results in a forfeiture of
an officer's public office.
(c) An officer, employee, or agent of a district commits an
offense if the person with criminal negligence violates Section
130.253, 130.256, or 130.266 other than by conduct described by
Subsection (b). An offense under this subsection is a Class B
misdemeanor and is an offense involving moral turpitude that
results in a forfeiture of an officer's public office.
(d) An officer or employee of a district commits an offense
if the officer or employee knowingly violates Section 130.253,
130.256, or 130.266 other than by conduct described by Subsection
(b) or (c). An offense under this subsection is a Class C
misdemeanor.
(e) The final conviction of a person other than a member of
the board of trustees for an offense under Subsection (b) or (c)
results in the immediate removal from office or employment of that
person. A trustee who is convicted of an offense under this section
is subject to removal as provided by Chapter 66, Civil Practice and
Remedies Code. For four years after the date of the final
conviction, the removed person is ineligible to be a candidate for
or to be appointed or elected to a public office in this state, is
ineligible to be employed by or act as an agent for this state or a
political subdivision of this state, and is ineligible to receive
any compensation through a contract with this state or a political
subdivision of this state. This subsection does not prohibit the
payment of retirement benefits to the removed person or the payment
of workers' compensation benefits to the removed person for an
injury that occurred before the commission of the offense for which
the person was removed. This subsection does not make a person
ineligible for an office for which the federal or state
constitution prescribes exclusive eligibility requirements.
(f) A court may enjoin performance of a contract made in
violation of this subchapter. A county attorney, district
attorney, criminal district attorney, citizen of the county in
which the district is located, or an interested party may bring an
action for an injunction. A party who prevails in an action brought
under this subsection is entitled to reasonable attorney's fees as
approved by the court.
Sec. 130.265. NOTIFICATION OF CRIMINAL HISTORY OF
CONTRACTOR. (a) A person or business entity that enters into a
contract with a district must give advance notice to the district if
the person or an owner or operator of the business entity has been
convicted of a felony. The notice must include a general
description of the conduct resulting in the conviction of a felony.
(b) A district may refuse to enter into a contract or other
transaction with a person who has been convicted of a felony or with
a business entity if an owner or operator of the entity has been
convicted of a felony.
(c) A district may terminate a contract with a person or
business entity if the district determines that the person or
business entity failed to give notice as required by Subsection (a)
or misrepresented the conduct resulting in the conviction. The
district must compensate the person or business entity for goods
delivered or services performed before the termination of the
contract.
(d) This section does not apply to a publicly held
corporation.
Sec. 130.266. EFFICIENCY AND SAVINGS. In order to increase
efficiency of operations and to achieve savings through volume
purchases, on an annual basis a district shall identify common
types of goods and services to be purchased from the district's
budget and, to the extent the district determines practicable,
consolidate the purchase of those goods or services under contracts
entered into under this subchapter.
Sec. 130.267. DELEGATION. (a) Except as provided by
Subsection (b), the board of trustees may, as appropriate, delegate
its authority under this subchapter to a designated person,
representative, or committee. In procuring goods or services, the
district shall provide notice of the delegation and the limits of
the delegation in the request for bids, proposals, or
qualifications or in an addendum to the request. If the district
fails to provide that notice, a ranking, selection, or evaluation
of bids, proposals, or qualifications other than by the board of
trustees in an open public meeting is advisory only.
(b) The board of trustees may not delegate the authority to
act regarding an action specifically authorized or required by this
subchapter to be taken by the board of trustees.
SUBCHAPTER L. DISPOSAL OF SURPLUS PERSONAL PROPERTY
Sec. 130.301. SALE OF PERSONAL PROPERTY. A junior college
district shall dispose of surplus personal property in an
accountable manner that best serves the interest of the district. A
sale or transfer of personal property that is not covered by Chapter
791, Government Code, must be solicited and awarded in the same
manner as a contract for the purchase of goods or services under
Subchapter K.
Sec. 130.302. METHODS OF DISPOSAL. (a) A junior college
district may use any of the following methods to dispose of surplus
personal property:
(1) the use of a licensed auctioneer to conduct live or
Internet-based auctions;
(2) a direct sale by the district to a person
submitting the highest and best bid through a competitive process,
including an Internet-based bidding system;
(3) the trade-in of items when purchasing new items;
(4) a sale or transfer to another governmental entity
at a mutually agreed price; or
(5) a donation to a governmental entity in this state.
(b) If the junior college district is unable to find a buyer
or governmental entity who wants the surplus property, the property
may be:
(1) discarded in accordance with applicable federal,
state, and local laws, ordinances, and rules; or
(2) removed by an interested party at no charge or for
a nominal charge.
(c) Except as provided by this section, a junior college
district may not give, donate, loan, or transfer surplus property
to any person or entity.
SUBCHAPTER M. PROFESSIONAL SERVICES AND CONSULTANT SERVICES
Sec. 130.351. PROFESSIONAL SERVICES. (a) For purposes of
this section, "professional service provider" means a person who
provides services of a predominantly mental or intellectual matter
and who is a member of a discipline requiring special knowledge or
the attainment of a high order of learning, skill, or intelligence.
The term includes a person who provides professional services, as
defined by Section 2254.002, Government Code.
(b) A junior college district shall select and enter into
contracts for professional services in accordance with Subchapter
A, Chapter 2254, Government Code. If the estimated value of a
contract for professional services is $50,000 or more during a
fiscal year, or during the contract's term if the contract is a
multiple-year contract, the district shall publish notice of the
request for qualifications as provided by Section 130.258.
(c) A professional service provider selected by the junior
college district may be selected for a specific project or for
various projects that arise during the term of the provider's
contract. The term of a contract with a professional service
provider may not exceed five years, except that the professional
service provider shall complete services for projects started
before the end of the contract term.
Sec. 130.352. CONSULTANTS. (a) For purposes of this
section, "consultant" includes a financial advisor, fiscal agent,
auctioneer, personnel services provider, travel agent, technology
or educational services provider or advisor, and business engaged
to teach approved courses.
(b) A junior college district shall select and enter into
contracts with consultants in accordance with Section 130.253 or
Subchapter B, Chapter 2254, Government Code. If the estimated
value of a contract for consulting services is $50,000 or more
during a fiscal year, or during the contract's term if the contract
is a multiple-year contract, the district shall publish notice of
the request for qualifications, bids, or proposals as provided by
Section 130.258.
(c) A consultant selected by the junior college district may
be selected for a specific project or for various projects that
arise during the term of the consultant's contract. The term of a
contract with a consultant may not exceed five years, except that
the consultant shall complete services for projects started before
the end of the contract term.
Sec. 130.353. RULES AND PROCEDURES; AUDITS BY STATE
AUDITOR. (a) The board of trustees of a junior college district
may adopt rules and procedures in accordance with Chapter 2254,
Government Code, for the acquisition of professional services and
consultants by the district.
(b) Junior college district contracts for professional
services or consultants are subject to audit by the state auditor in
accordance with Chapter 321, Government Code.
SECTION 4. Section 271.023, Local Government Code, is
amended to read as follows:
Sec. 271.023. CONFLICT OF LAWS. To the extent of any
conflict, the provisions of Subchapter B, Chapter 44, Education
Code, relating to the purchase of goods and services under contract
by a school district and the provisions of Subchapter K, Chapter
130, Education Code, relating to the purchase of goods or services
under contract by a junior college prevail over this subchapter.
SECTION 5. Subsection (c), Section 44.0311, and Sections
130.010 and 130.0101, Education Code, are repealed.
SECTION 6. The change in law made by this Act applies only
to a contract for which requests for bids, requests for proposals,
or requests for qualifications are published or distributed on or
after the effective date of this Act. A contract for which requests
for bids, requests for proposals, or requests for qualifications
are published or distributed before the effective date of this Act
is covered by the law in effect when the requests were published or
distributed, and the former law is continued in effect for that
purpose.
SECTION 7. This Act does not make an appropriation. A
provision in this Act that creates a new governmental program,
creates a new entitlement, or imposes a new duty on a governmental
entity is not mandatory during a fiscal period for which the
legislature has not made a specific appropriation to implement the
provision.
SECTION 8. This Act takes effect September 1, 2011.
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