Texas 2015 - 84th Regular

Texas House Bill HB3241 Compare Versions

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Version 2 (New)

Old	New	Differences
1	1	84R20253 YDB-D
2	2	By: Price, Cook, Raymond, Hunter, Kuempel H.B. No. 3241
3	3	Substitute the following for H.B. No. 3241:
4	4	By: Cook C.S.H.B. No. 3241
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to state agency contracting; creating an offense.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 321.013, Government Code, is amended by
12	12	adding Subsections (k) and (l) to read as follows:
13	13	(k) In devising the audit plan under Subsection (c), the
14	14	State Auditor shall consider the performance of audits on contracts
15	15	entered into by the Health and Human Services Commission that
16	16	exceed $100 million in annual value, including a contract between
17	17	the commission and a managed care organization. The State Auditor
18	18	shall collaborate with the financial managers in the Medicaid/CHIP
19	19	Division of the commission in performing an audit described by this
20	20	subsection. An audit described by this subsection:
21	21	(1) may be limited in scope to target an area of the
22	22	contract that the State Auditor determines poses the highest
23	23	financial risk to this state; and
24	24	(2) must determine whether the entity contracting with
25	25	the commission has spent state money in accordance with the
26	26	purposes authorized in the contract.
27	27	(l) The State Auditor may contract with a private auditor to
28	28	audit a contract under Subsection (k).
29	29	SECTION 2. Subchapter B, Chapter 403, Government Code, is
30	30	amended by adding Section 403.03057 to read as follows:
31	31	Sec. 403.03057. CENTRALIZED STATE PURCHASING STUDY.
32	32	(a) The comptroller, in cooperation with the governor's budget and
33	33	policy staff, shall conduct a study examining the feasibility and
34	34	practicality of consolidating state purchasing functions into
35	35	fewer state agencies or one state agency. The study must examine
36	36	the cost savings to this state that may be achieved through:
37	37	(1) abolishing offices or departments of state
38	38	agencies that have a dedicated office or department for purchasing;
39	39	and
40	40	(2) consolidating or reducing the number of vendors
41	41	authorized to contract with this state to allow this state to better
42	42	leverage its purchasing power.
43	43	(b) The comptroller shall prepare and deliver to the
44	44	governor, the lieutenant governor, and each member of the
45	45	legislature a report on the findings of the study conducted under
46	46	Subsection (a), including:
47	47	(1) a detailed projection of expected savings or costs
48	48	to this state in consolidating state purchasing;
49	49	(2) a report on the process for the legislature or the
50	50	executive branch to implement the consolidation of state
51	51	purchasing;
52	52	(3) a list of state agencies, including dedicated
53	53	offices or departments in those agencies, with purchasing
54	54	responsibilities; and
55	55	(4) the total cost to this state of the purchasing
56	56	responsibilities for each state agency, including the dedicated
57	57	office or department in the agency with purchasing responsibility.
58	58	(c) The comptroller shall prepare, deliver, and post on the
59	59	comptroller's Internet website the report required by this section
60	60	not later than December 31, 2016.
61	61	(d) This section expires January 1, 2018.
62	62	SECTION 3. Subchapter L, Chapter 441, Government Code, is
63	63	amended by adding Section 441.1855 to read as follows:
64	64	Sec. 441.1855. RETENTION OF CONTRACT AND RELATED DOCUMENTS
65	65	BY STATE AGENCIES. Notwithstanding Section 441.185 or 441.187, a
66	66	state agency:
67	67	(1) shall retain in its records each contract entered
68	68	into by the state agency and all contract solicitation documents
69	69	related to the contract; and
70	70	(2) may destroy the contract and documents only after
71	71	the fourth anniversary of the date the contract is completed or
72	72	expires.
73	73	SECTION 4. Subchapter C, Chapter 572, Government Code, is
74	74	amended by adding Section 572.069 to read as follows:
75	75	Sec. 572.069. CERTAIN EMPLOYMENT FOR FORMER STATE OFFICER
76	76	OR EMPLOYEE RESTRICTED; CRIMINAL PENALTY. (a) A former state
77	77	officer or employee of a state agency who during the period of state
78	78	service or employment participated on behalf of a state agency in a
79	79	procurement or contract negotiation involving a person may not
80	80	accept employment from that person before the second anniversary of
81	81	the date the officer's or employee's service or employment with the
82	82	state agency ceased.
83	83	(b) An individual commits an offense if the individual
84	84	violates this section. An offense under this subsection is a Class
85	85	A misdemeanor.
86	86	SECTION 5. Section 2101.001(1), Government Code, is amended
87	87	to read as follows:
88	88	(1) "Enterprise resource planning" includes the
89	89	administration of a state agency's:
90	90	(A) general ledger;
91	91	(B) accounts payable;
92	92	(C) accounts receivable;
93	93	(D) budgeting;
94	94	(E) inventory;
95	95	(F) asset management;
96	96	(G) billing;
97	97	(H) payroll;
98	98	(I) projects;
99	99	(J) grants;
100	100	(K) human resources, including administration of
101	101	performance measures, time spent on tasks, and other personnel and
102	102	labor issues; and
103	103	(L) purchasing, including solicitations and
104	104	contracting.
105	105	SECTION 6. Section 2101.035, Government Code, is amended by
106	106	adding Subsection (i) to read as follows:
107	107	(i) State agencies shall report contract and purchasing
108	108	information in the uniform manner required by the comptroller.
109	109	SECTION 7. Section 2101.036, Government Code, is amended by
110	110	adding Subsection (e) to read as follows:
111	111	(e) Notwithstanding Subsection (d), a state agency in the
112	112	legislative branch may elect to participate in the enterprise
113	113	resource planning system developed under this section.
114	114	SECTION 8. Section 2155.078, Government Code, is amended by
115	115	amending Subsections (a) and (b) and adding Subsection (a-1) to
116	116	read as follows:
117	117	(a) The commission shall establish and administer a system
118	118	of training, continuing education, and certification for state
119	119	agency purchasing personnel. The training and continuing education
120	120	for state agency purchasing personnel must include ethics training.
121	121	The commission may establish and offer appropriate training to
122	122	vendors on a cost recovery basis. The commission may adopt rules to
123	123	administer this section, including rules relating to monitoring a
124	124	certified purchaser's compliance with the continuing education
125	125	requirements of this section.
126	126	(a-1) The training, continuing education, and certification
127	127	required under Subsection (a) must include:
128	128	(1) training on the selection of an appropriate
129	129	procurement method by project type; and
130	130	(2) training conducted by the Department of
131	131	Information Resources on purchasing technologies.
132	132	(b) Notwithstanding [Except as provided by] Subsection (n),
133	133	all state agency purchasing personnel, including agencies exempted
134	134	from the purchasing authority of the commission, must receive the
135	135	training and continuing education to the extent required by rule of
136	136	the commission. The training and continuing education must include
137	137	ethics training. A state agency employee who is required to receive
138	138	the training may not participate in purchases by the employing
139	139	agency unless the employee has received the required training or
140	140	received equivalent training from a national association
141	141	recognized by the commission. The equivalent training may count,
142	142	as provided by Subsection (k), toward the continuing education
143	143	requirements.
144	144	SECTION 9. Subchapter B, Chapter 2155, Government Code, is
145	145	amended by adding Sections 2155.089 and 2155.090 to read as
146	146	follows:
147	147	Sec. 2155.089. REPORTING VENDOR PERFORMANCE. (a) After a
148	148	contract is completed or otherwise terminated, each state agency
149	149	shall review the vendor's performance under the contract.
150	150	(b) The state agency shall report to the comptroller, using
151	151	the tracking system described by Section 2155.090, on the results
152	152	of the review regarding a vendor's performance under a contract.
153	153	(c) This section does not apply to an enrollment contract
154	154	described by 1 T.A.C. Section 391.183 as that section existed on
155	155	September 1, 2015.
156	156	Sec. 2155.090. VENDOR PERFORMANCE TRACKING SYSTEM.
157	157	(a) The comptroller shall evaluate a vendor's performance based on
158	158	the information reported under Section 2155.089 and criteria
159	159	established by the comptroller.
160	160	(b) The comptroller shall establish an evaluation process
161	161	that allows vendors who receive an unfavorable performance review
162	162	to protest any classification given by the comptroller.
163	163	(c) The comptroller shall include the performance reviews
164	164	in a vendor performance tracking system.
165	165	(d) A state agency may use the vendor performance tracking
166	166	system to determine whether to award a contract to a vendor reviewed
167	167	in the database.
168	168	(e) The comptroller shall make the vendor performance
169	169	tracking system accessible to the public on the comptroller's
170	170	Internet website.
171	171	SECTION 10. Subchapter I, Chapter 2155, Government Code, is
172	172	amended by adding Section 2155.5035 to read as follows:
173	173	Sec. 2155.5035. USE OF SCHEDULE BY STATE AGENCY. (a) A
174	174	state agency purchasing goods or services under a contract listed
175	175	on the schedule:
176	176	(1) for a purchase with a value of $50,000 or less, may
177	177	directly award a contract to a vendor included on the schedule
178	178	without submission of a request for pricing to other vendors on the
179	179	list;
180	180	(2) for a purchase with a value of more than $50,000
181	181	but not more than $150,000, shall submit a request for pricing to at
182	182	least three vendors included on the schedule in the category to
183	183	which the purchase relates;
184	184	(3) for a purchase with a value of more than $150,000
185	185	but not more than $1 million, shall submit a request for pricing to
186	186	at least six vendors included on the schedule in the category to
187	187	which the purchase relates or all vendors on the schedule if the
188	188	category has fewer than six vendors; and
189	189	(4) may not purchase under the contract goods or
190	190	services that have a total value exceeding $1 million.
191	191	(b) The price listed for a good or service under a multiple
192	192	award contract is a maximum price. A state agency may negotiate a
193	193	lower price for goods or services under a contract listed on a
194	194	schedule developed under this chapter.
195	195	SECTION 11. Section 2155.504, Government Code, is amended
196	196	to read as follows:
197	197	Sec. 2155.504. USE OF SCHEDULE BY GOVERNMENTAL ENTITIES.
198	198	(a) A [state agency or] local government may purchase goods or
199	199	services directly from a vendor under a contract listed on a
200	200	schedule developed under this subchapter. A purchase authorized by
201	201	this section satisfies any requirement of state law relating to
202	202	competitive bids or proposals and satisfies any applicable
203	203	requirements of Chapter 2157.
204	204	(b) The price listed for a good or service under a multiple
205	205	award contract is a maximum price. A [An agency or] local
206	206	government may negotiate a lower price for goods or services under a
207	207	contract listed on a schedule developed under this subchapter.
208	208	SECTION 12. Section 2157.068, Government Code, is amended
209	209	by adding Subsections (e-1) and (e-2) to read as follows:
210	210	(e-1) A state agency contracting to purchase a commodity
211	211	item shall use the list maintained as required by Subsection (e) as
212	212	follows:
213	213	(1) for a contract with a value of $50,000 or less, the
214	214	agency may directly award the contract to a vendor included on the
215	215	list without submission of a request for pricing to other vendors on
216	216	the list;
217	217	(2) for a contract with a value of more than $50,000
218	218	but not more than $150,000, the agency must submit a request for
219	219	pricing to at least three vendors included on the list in the
220	220	category to which the contract relates; and
221	221	(3) for a contract with a value of more than $150,000
222	222	but not more than $1 million, the agency must submit a request for
223	223	pricing to at least six vendors included on the list in the category
224	224	to which the contract relates or all vendors on the schedule if the
225	225	category has fewer than six vendors.
226	226	(e-2) A state agency may not enter into a contract to
227	227	purchase a commodity item if the value of the contract exceeds $1
228	228	million.
229	229	SECTION 13. Subchapter B, Chapter 2157, Government Code, is
230	230	amended by adding Section 2157.0685 to read as follows:
231	231	Sec. 2157.0685. CONTRACT REQUIREMENTS FOR CERTAIN
232	232	SERVICES. (a) In this section, "statement of work" means a
233	233	document that states the requirements for a contract, including
234	234	deliverables, performance specifications, and other requirements,
235	235	specific to the vendor under that contract that are not specified in
236	236	a contract awarded by the department under Section 2157.068 for
237	237	contracts more than $50,000.
238	238	(b) For a contract awarded by the department under Section
239	239	2157.068 that requires a state agency to develop and execute a
240	240	statement of work to initiate services under the contract, the
241	241	state agency must:
242	242	(1) consult with the department before submission of
243	243	the statement of work to a vendor; and
244	244	(2) post each statement of work entered into by the
245	245	agency on the agency's Internet website in the manner required by
246	246	department rule.
247	247	(c) A statement of work executed by a state agency under a
248	248	contract awarded by the department under Section 2157.068 is not
249	249	valid and money may not be paid to the vendor under the terms of the
250	250	statement of work unless the department first signs the statement
251	251	of work.
252	252	SECTION 14. Subchapter Z, Chapter 2252, Government Code, is
253	253	amended by adding Section 2252.9011 to read as follows:
254	254	Sec. 2252.9011. EMPLOYMENT OF OR CONTRACTS WITH FORMER OR
255	255	RETIRED PRIVATE VENDOR EMPLOYEES. A state agency may not hire, or
256	256	enter into an employment contract, a professional services contract
257	257	under Chapter 2254, or a consulting services contract under Chapter
258	258	2254 with, an individual who is a former or retired employee of a
259	259	private vendor under which the individual will perform services for
260	260	the agency related to the individual's former duties for the vendor
261	261	for which the vendor contracted with the agency before the second
262	262	anniversary of the last date on which the individual was employed by
263	263	the private vendor.
264	264	SECTION 15. Section 2261.001(a), Government Code, is
265	265	amended to read as follows:
266	266	(a) This chapter, other than Subchapter F, applies only to
267	267	each procurement of goods or services made by a state agency that is
268	268	neither made by the comptroller nor made under purchasing authority
269	269	delegated to the agency by or under Section 51.9335 or 73.115,
270	270	Education Code, or Section 2155.131 or 2155.132.
271	271	SECTION 16. Chapter 2261, Government Code, is amended by
272	272	adding Subchapter F to read as follows:
273	273	SUBCHAPTER F. ETHICS, REPORTING, AND APPROVAL REQUIREMENTS FOR
274	274	CERTAIN CONTRACTS
275	275	Sec. 2261.251. APPLICABILITY OF SUBCHAPTER.
276	276	Notwithstanding Section 2261.001, this subchapter applies to the
277	277	Texas Department of Transportation and to an institution of higher
278	278	education acquiring goods or services under Section 51.9335 or
279	279	73.115, Education Code.
280	280	Sec. 2261.252. DISCLOSURE OF POTENTIAL CONFLICTS OF
281	281	INTEREST; CERTAIN CONTRACTS PROHIBITED. (a) Each state agency
282	282	employee or official who is involved in procurement or in contract
283	283	management for a state agency shall disclose to the agency any
284	284	potential conflict of interest specified by state law or agency
285	285	policy that is known by the employee or official with respect to any
286	286	contract with a private vendor or bid for the purchase of goods or
287	287	services from a private vendor by the agency.
288	288	(b) A state agency may not enter into a contract for the
289	289	purchase of goods or services with a private vendor with whom any of
290	290	the following agency employees or officials have a financial
291	291	interest:
292	292	(1) a member of the agency's governing body;
293	293	(2) the governing official, executive director,
294	294	general counsel, chief procurement officer, or procurement
295	295	director of the agency; or
296	296	(3) a family member related to an employee or official
297	297	described by Subdivision (1) or (2) within the second degree by
298	298	affinity or consanguinity.
299	299	(c) A state agency employee or official has a financial
300	300	interest in a person if the employee or official:
301	301	(1) owns or controls, directly or indirectly, an
302	302	ownership interest of at least one percent in the person, including
303	303	the right to share in profits, proceeds, or capital gains; or
304	304	(2) could reasonably foresee that a contract with the
305	305	person could result in a financial benefit to the employee or
306	306	official.
307	307	(d) A financial interest prohibited by this section does not
308	308	include a retirement plan, a blind trust, insurance coverage, or an
309	309	ownership interest of less than one percent in a corporation.
310	310	Sec. 2261.253. REQUIRED POSTING OF CERTAIN CONTRACTS;
311	311	ENHANCED CONTRACT AND PERFORMANCE MONITORING. (a) For each
312	312	contract for the purchase of goods or services from a private
313	313	vendor, each state agency shall post on its Internet website:
314	314	(1) each contract the agency enters into, including
315	315	contracts entered into without inviting, advertising for, or
316	316	otherwise requiring competitive bidding before selection of the
317	317	contractor, until the contract expires or is completed;
318	318	(2) the statutory or other authority under which a
319	319	contract that is not competitively bid under Subdivision (1) is
320	320	entered into without compliance with competitive bidding
321	321	procedures; and
322	322	(3) the request for proposals related to a
323	323	competitively bid contract included under Subdivision (1) until the
324	324	contract expires or is completed.
325	325	(b) A state agency monthly may post contracts described by
326	326	Subsection (a) that are valued at less than $15,000.
327	327	(c) Each state agency by rule shall establish a procedure to
328	328	identify each contract that requires enhanced contract or
329	329	performance monitoring and submit information on the contract to
330	330	the agency's governing body or, if the agency is not governed by a
331	331	multimember governing body, the officer who governs the agency.
332	332	The agency's contract management office or procurement director
333	333	shall immediately notify the agency's governing body or governing
334	334	official, as appropriate, of any serious issue or risk that is
335	335	identified with respect to a contract monitored under this
336	336	subsection.
337	337	(d) This section does not apply to a memoranda of
338	338	understanding, interagency contract, interlocal agreement, or
339	339	contract for which there is not a cost.
340	340	Sec. 2261.254. CONTRACTS WITH VALUE EXCEEDING $1 MILLION.
341	341	(a) For each contract for the purchase of goods or services that
342	342	has a value exceeding $1 million, a state agency shall develop and
343	343	implement contract reporting requirements that provide information
344	344	on:
345	345	(1) compliance with financial provisions and delivery
346	346	schedules under the contract;
347	347	(2) corrective action plans required under the
348	348	contract and the status of any active corrective action plan; and
349	349	(3) any liquidated damages assessed or collected under
350	350	the contract.
351	351	(b) Each state agency shall verify:
352	352	(1) the accuracy of any information reported under
353	353	Subsection (a) that is based on information provided by a
354	354	contractor; and
355	355	(2) the delivery time of goods or services scheduled
356	356	for delivery under the contract.
357	357	(c) Except as provided by Subsection (d), a state agency may
358	358	enter into a contract for the purchase of goods or services that has
359	359	a value exceeding $1 million only if:
360	360	(1) the governing body of the state agency approves
361	361	the contract and the approved contract is signed by the presiding
362	362	officer of the governing body; or
363	363	(2) for a state agency that is not governed by a
364	364	multimember governing body, the officer who governs the agency
365	365	approves and signs the contract.
366	366	(d) The governing body or governing official of a state
367	367	agency, as appropriate, may delegate to the executive director of
368	368	the agency the approval and signature authority under Subsection
369	369	(c).
370	370	(e) A highway construction or maintenance contract that is
371	371	awarded by the Texas Department of Transportation under Subchapter
372	372	A, Chapter 223, Transportation Code, is not required to be signed by
373	373	a member of the Texas Transportation Commission or the executive
374	374	director of the department. This exception does not apply to
375	375	expedited highway improvement contracts under Subchapter C,
376	376	Chapter 223, Transportation Code, a comprehensive development
377	377	agreement entered into under Subchapter E, Chapter 223,
378	378	Transportation Code, a design-build contract entered into under
379	379	Subchapter F, Chapter 223, Transportation Code, or any other
380	380	contract entered into by the Texas Department of Transportation.
381	381	Sec. 2261.255. CONTRACTS WITH VALUE EXCEEDING $5 MILLION.
382	382	For each state agency contract for the purchase of goods or services
383	383	that has a value exceeding $5 million, the contract management
384	384	office or procurement director of the agency must:
385	385	(1) verify in writing that the solicitation and
386	386	purchasing methods and contractor selection process comply with
387	387	state law and agency policy; and
388	388	(2) submit to the governing body of the agency, or
389	389	governing official of the agency if the agency is not governed by a
390	390	multimember governing body, information on any potential issue that
391	391	may arise in the solicitation, purchasing, or contractor selection
392	392	process.
393	393	Sec. 2261.256. RISK ANALYSIS PROCEDURE; CONTRACT
394	394	MANAGEMENT HANDBOOK. (a) Each state agency shall develop and
395	395	comply with a risk analysis procedure. The procedure must provide
396	396	for:
397	397	(1) assessing the risk of fraud, abuse, or waste in the
398	398	contractor selection process, contract provisions, and payment and
399	399	reimbursement rates and methods for the different types of goods
400	400	and services for which the agency contracts; and
401	401	(2) identifying contracts that require enhanced
402	402	contract monitoring.
403	403	(b) Each state agency shall publish a contract management
404	404	handbook that establishes consistent contracting policies and
405	405	practices to be followed by the agency and that is consistent with
406	406	the comptroller's contract management guide. The agency handbook
407	407	may include standard contract provisions and formats for the agency
408	408	to incorporate in contracts.
409	409	Sec. 2261.257. CONTRACT DATABASE. (a) Each state agency
410	410	that becomes a participant in the centralized accounting and
411	411	payroll systems as authorized by Sections 2101.035 and 2101.036
412	412	shall use the system to identify and record each contract entered
413	413	into by the agency as specified by the rules, policies, or
414	414	procedures developed by the comptroller.
415	415	(b) The comptroller shall provide as necessary information
416	416	and state agency contract data contained in the centralized
417	417	accounting and payroll systems to other state agencies with
418	418	oversight duties, including the Legislative Budget Board, the state
419	419	auditor's office, and the Department of Information Resources.
420	420	SECTION 17. Section 2262.101, Government Code, as amended
421	421	by Chapters 676 (H.B. 1965) and 1227 (S.B. 1681), Acts of the 83rd
422	422	Legislature, Regular Session, 2013, is reenacted and amended to
423	423	read as follows:
424	424	Sec. 2262.101. CREATION; DUTIES. (a) The Contract
425	425	Advisory Team is created to assist state agencies in improving
426	426	contract management practices by:
427	427	(1) reviewing and making recommendations on the
428	428	solicitation documents and contract documents for contracts of
429	429	state agencies that have a value of at least $10 million;
430	430	(2) reviewing any findings or recommendations made by
431	431	the state auditor, including those made under Section 2262.052(b),
432	432	regarding a state agency's compliance with the contract management
433	433	guide;
434	434	(3) providing recommendations to the comptroller
435	435	regarding:
436	436	(A) the development of the contract management
437	437	guide; and
438	438	(B) the training under Section 2262.053;
439	439	(4) providing recommendations and assistance to state
440	440	agency personnel throughout the contract management process;
441	441	(5) coordinating and consulting with the quality
442	442	assurance team established under Section 2054.158 on all contracts
443	443	relating to a major information resources project; [and]
444	444	(6) [(4)] developing and recommending policies and
445	445	procedures to improve state agency contract management practices;
446	446	(7) [(5)] developing and recommending procedures to
447	447	improve state agency contracting practices by including
448	448	consideration for best value; [and]
449	449	(8) [(6)] creating and periodically performing a risk
450	450	assessment to determine the appropriate level of management and
451	451	oversight of contracts by state agencies; and
452	452	(9) after being notified by a state agency of a change
453	453	order, contract amendment, contract renewal or extension, or other
454	454	proposed action that would result in a change to the monetary value
455	455	of a contract reviewed under Subdivision (1) by more than 20
456	456	percent, reviewing the justification for the change order, contract
457	457	amendment, contract renewal or extension, or other proposed action,
458	458	as applicable, to:
459	459	(A) determine whether the justification is
460	460	reasonable considering the circumstances; and
461	461	(B) if the team determines the justification is
462	462	not reasonable, contact the state agency for additional
463	463	justification, and if not satisfactory, forward the contract to the
464	464	comptroller for notification under Subsection (h).
465	465	(b) The risk assessment created and performed [reviewed]
466	466	under Subsection (a)(8) [(a)(6)] must include[, but is not limited
467	467	to] the following criteria:
468	468	(1) the amount of appropriations to the agency;
469	469	(2) total contract value as a percentage of
470	470	appropriations to the agency; and [or]
471	471	(3) the impact of the functions and duties of the state
472	472	agency on the health, safety, and well-being of residents
473	473	[citizens].
474	474	(c) The comptroller shall oversee the activities of the
475	475	team, including ensuring that the team carries out its duties under
476	476	Subsections (a)(1), [Subsection] (a)(5), and (a)(7).
477	477	(d) A state agency shall:
478	478	(1) comply with a recommendation made under Subsection
479	479	(a)(1); or
480	480	(2) submit a written explanation regarding why the
481	481	recommendation is not applicable to the contract under review.
482	482	(e) The team may review documents under Subsection (a)(1)
483	483	only for compliance with contract management and best practices
484	484	principles and may not make a recommendation regarding the purpose
485	485	or subject of the contract.
486	486	(f) The team may develop an expedited process for reviewing
487	487	solicitations under Subsection (a)(1) for contracts:
488	488	(1) that the team identifies as posing a low risk of
489	489	loss to the state; or
490	490	(2) for which templates will be used more than once by
491	491	a state agency.
492	492	(g) A state agency that notifies the team of a change order,
493	493	contract amendment, contract renewal or extension, or other
494	494	proposed action under Subsection (a)(9) must include with the
495	495	notification a justification for the proposed action in the form
496	496	and containing the information specified by the team.
497	497	(h) The comptroller shall, for each contract of a state
498	498	agency forwarded under Subsection (a)(9), notify:
499	499	(1) the governing body of the agency or the single
500	500	state officer who governs the agency;
501	501	(2) the Legislative Budget Board; and
502	502	(3) each member of the senate and house of
503	503	representatives.
504	504	SECTION 18. Section 2262.102(a), Government Code, is
505	505	amended to read as follows:
506	506	(a) The team consists of the following nine [six] members:
507	507	(1) one member from the Health and Human Services
508	508	Commission;
509	509	(2) one member from the comptroller's office;
510	510	(3) one member from the Department of Information
511	511	Resources;
512	512	(4) one member from the Texas Facilities Commission;
513	513	(5) one member from the governor's office; [and]
514	514	(6) one member from a small state agency;
515	515	(7) one member from the Texas Department of
516	516	Transportation;
517	517	(8) one member from the Texas Education Agency; and
518	518	(9) one member from the Texas Commission on
519	519	Environmental Quality.
520	520	SECTION 19. Subchapter C, Chapter 2262, Government Code, is
521	521	amended by adding Section 2262.105 to read as follows:
522	522	Sec. 2262.105. QUARTERLY REPORT TO LEGISLATIVE BUDGET
523	523	BOARD. The contract advisory team shall submit a quarterly report
524	524	to the Legislative Budget Board on:
525	525	(1) the number of solicitation documents and contracts
526	526	reviewed by the team in the preceding quarter; and
527	527	(2) whether state agencies accepted or rejected the
528	528	team's recommendations and any reasons provided by the state
529	529	agencies for rejecting the recommendations.
530	530	SECTION 20. Section 51.9335(d), Education Code, is amended
531	531	to read as follows:
532	532	(d) Subject to Section 51.9337, Subtitle D, Title 10,
533	533	Government Code, and Subchapter B, Chapter 2254, Government Code,
534	534	do not apply to the acquisition of goods and services under this
535	535	section, except that an institution of higher education must comply
536	536	with any provision of those laws, or a rule adopted under a
537	537	provision of those laws, relating to contracting with historically
538	538	underutilized businesses or relating to the procurement of goods
539	539	and services from persons with disabilities. An institution of
540	540	higher education may, but is not required to, acquire goods or
541	541	services as provided by Subtitle D, Title 10, Government Code.
542	542	SECTION 21. Subchapter Z, Chapter 51, Education Code, is
543	543	amended by adding Section 51.9337 to read as follows:
544	544	Sec. 51.9337. PURCHASING AUTHORITY CONDITIONAL; REQUIRED
545	545	STANDARDS. (a) An institution of higher education may not
546	546	exercise the acquisition authority granted by Section 51.9335 or
547	547	73.115 unless the institution complies with this section. An
548	548	institution that is determined under Subsection (j) to not be in
549	549	compliance with this section is subject to the laws governing
550	550	acquisition of goods and services by state agencies, including
551	551	Subtitle D, Title 10, Government Code, and Chapter 2254, Government
552	552	Code.
553	553	(b) The board of regents of an institution of higher
554	554	education by rule shall establish for each institution under the
555	555	management and control of the board:
556	556	(1) a code of ethics for the institution's officers and
557	557	employees, including provisions governing officers and employees
558	558	authorized to execute contracts for the institution or to exercise
559	559	discretion in awarding contracts, subject to Subsection (c);
560	560	(2) policies for the internal investigation of
561	561	suspected defalcation, misappropriation, and other fiscal
562	562	irregularities and an institutional or systemwide compliance
563	563	program designed to promote ethical behavior and ensure compliance
564	564	with all applicable policies, laws, and rules governing higher
565	565	education, including research and health care to the extent
566	566	applicable;
567	567	(3) a contract management handbook that provides
568	568	consistent contracting policies and practices and contract review
569	569	procedures, including a risk analysis procedure, subject to
570	570	Subsection (d);
571	571	(4) contracting delegation guidelines, subject to
572	572	Subsections (e) and (f);
573	573	(5) training for officers and employees authorized to
574	574	execute contracts for the institution or to exercise discretion in
575	575	awarding contracts, including training in ethics, selection of
576	576	appropriate procurement methods, and information resources
577	577	purchasing technologies; and
578	578	(6) internal audit protocols, subject to Subsection
579	579	(g).
580	580	(c) The code of ethics governing an institution of higher
581	581	education must include:
582	582	(1) general standards of conduct and a statement that
583	583	each officer or employee is expected to obey all federal, state, and
584	584	local laws and is subject to disciplinary action for a violation of
585	585	those laws;
586	586	(2) policies governing conflicts of interest,
587	587	conflicts of commitment, and outside activities, ensuring that the
588	588	primary responsibility of officers and employees is to accomplish
589	589	the duties and responsibilities assigned to that position;
590	590	(3) a conflict of interest policy that prohibits
591	591	employees from having a direct or indirect financial or other
592	592	interest, engaging in a business transaction or professional
593	593	activity, or incurring any obligation that is in substantial
594	594	conflict with the proper discharge of the employee's duties related
595	595	to the public interest;
596	596	(4) a conflict of commitment policy that prohibits an
597	597	employee's activities outside the institution from interfering
598	598	with the employee's duties and responsibilities to the institution;
599	599	(5) a policy governing an officer's or employee's
600	600	outside activities, including compensated employment and board
601	601	service, that clearly delineates the nature and amount of
602	602	permissible outside activities and that includes processes for
603	603	disclosing the outside activities and for obtaining and documenting
604	604	institutional approval to perform the activities;
605	605	(6) a policy that prohibits an officer or employee
606	606	from acting as an agent for another person in the negotiation of the
607	607	terms of an agreement relating to the provision of money, services,
608	608	or property to the institution;
609	609	(7) a policy governing the use of institutional
610	610	resources; and
611	611	(8) a policy providing for the regular training of
612	612	officers and employees on the policies described by this
613	613	subsection.
614	614	(d) An institution of higher education shall establish
615	615	contract review procedures and a contract review checklist that
616	616	must be reviewed and approved by the institution's legal counsel
617	617	before implementation. The review procedures and checklist must
618	618	include:
619	619	(1) a description of each step of the procedure that an
620	620	institution must use to evaluate and process contracts;
621	621	(2) a checklist that describes each process that must
622	622	be completed before contract execution; and
623	623	(3) a value threshold that initiates the required
624	624	review by the institution's legal counsel unless the contract is a
625	625	standard contract previously approved by the counsel.
626	626	(e) An institution of higher education's policies governing
627	627	contracting authority must clearly specify the types and values of
628	628	contracts that must be approved by the board of regents and the
629	629	types and values of contracts for which contracting authority is
630	630	delegated by the board to the chief executive officer and by the
631	631	chief executive officer to other officers and employees of the
632	632	institution. An officer or employee may not execute a document for
633	633	the board unless the officer or employee has authority to act for
634	634	the board and the authority is exercised in compliance with
635	635	applicable conditions and restrictions.
636	636	(f) An institution of higher education may not enter into a
637	637	contract with a value of more than $1 million, including any
638	638	amendment, extension, or renewal of the contract that increases the
639	639	value of the original contract to more than $1 million, unless the
640	640	institution's board of regents approves the contract, expressly
641	641	delegates authority to exceed that amount, or expressly adopts an
642	642	exception for that contract. The board must approve any amendment,
643	643	extension, or renewal of a contract with a value that exceeds 25
644	644	percent of the value of the original contract approved by the board
645	645	unless the authority to exceed the approved amount is expressly
646	646	delegated by the board or an exception is expressly adopted by the
647	647	board for that contract.
648	648	(g) The board of regents of an institution of higher
649	649	education shall adopt standards for internal audits conducted by
650	650	the institution to provide a systematic, disciplined approach to
651	651	evaluate and improve the effectiveness of the institution's risk
652	652	management, control, and governance processes related to contracts
653	653	and to require risk-based testing of contract administration. The
654	654	internal auditor must have full and unrestricted access to all
655	655	institutional property, personnel, and records. An internal
656	656	auditor must report directly to the board of regents in accordance
657	657	with Chapter 2102, Government Code.
658	658	(h) The chief auditor of an institution of higher education
659	659	shall annually assess whether the institution has adopted the rules
660	660	and policies required by this section and shall submit a report of
661	661	findings to the state auditor. In auditing the purchase of goods
662	662	and services by the institution, the state auditor shall determine
663	663	whether an institution has adopted the required rules and policies.
664	664	(i) If the state auditor determines that an institution of
665	665	higher education has failed to adopt the required rules and
666	666	policies, the auditor shall report that failure to the legislature
667	667	and to the institution's board of regents and shall, in
668	668	consultation with the institution, adopt a remediation plan to
669	669	bring the institution into compliance. If the institution fails to
670	670	comply within the time established by the state auditor, the
671	671	auditor shall find the institution to be in noncompliance and
672	672	report that finding to the legislature and comptroller.
673	673	(j) In accordance with a schedule adopted by the state
674	674	auditor in consultation with the comptroller, the authority of an
675	675	institution of higher education to acquire goods and services as
676	676	provided by Section 51.9335 or 73.115 is suspended if the
677	677	institution fails to comply with the remediation plan under
678	678	Subsection (i) within the time established by the state auditor. As
679	679	a result of the suspension, the laws, including Subtitle D, Title
680	680	10, Government Code, and Chapter 2254, Government Code, governing
681	681	acquisition of goods and services by state agencies from which the
682	682	institution is otherwise exempt, shall apply to the institution's
683	683	acquisition of goods and services.
684	684	SECTION 22. Sections 73.115(e) and (f), Education Code, are
685	685	amended to read as follows:
686	686	(e) To the extent of any conflict, this section prevails
687	687	over any other law relating to the purchasing of goods and services
688	688	other than Section 51.9337 and [except] a law relating to
689	689	contracting with historically underutilized businesses.
690	690	(f) Except as otherwise provided by this section and Section
691	691	51.9337, Subtitle D, Title 10, Government Code, and Chapter 2254,
692	692	Government Code, do not apply to purchases of goods and services
693	693	made under this section.
694	694	SECTION 23. Section 2155.502(d), Government Code, is
695	695	repealed.
696	696	SECTION 24. (a) As soon as is practicable after the
697	697	effective date of this Act, the executive directors of the Texas
698	698	Department of Transportation, the Texas Education Agency, and the
699	699	Texas Commission on Environmental Quality shall each appoint a
700	700	member to the contract advisory team as required by Section
701	701	2262.102, Government Code, as amended by this Act.
702	702	(b) As soon as is practicable after the effective date of
703	703	this Act, the comptroller of public accounts, and each affected
704	704	state agency as necessary, shall adopt the rules and procedures and
705	705	take the actions necessary to implement the changes in law made by
706	706	this Act.
707	707	SECTION 25. To the extent of any conflict, this Act prevails
708	708	over another Act of the 84th Legislature, Regular Session, 2015,
709	709	relating to nonsubstantive additions to and corrections in enacted
710	710	codes.
711	711	SECTION 26. Section 572.069, Government Code, as added by
712	712	this Act, applies only to a state officer or employee whose service
713	713	or employment with a state agency ceases on or after the effective
714	714	date of this Act.
715	715	SECTION 27. The changes in law made by this Act apply only
716	716	to a contract entered into on or after the effective date of this
717	717	Act. A contract entered into before that date is governed by the
718	718	law in effect immediately before the effective date of this Act, and
719	719	the former law is continued in effect for that purpose.
720	720	SECTION 28. This Act takes effect September 1, 2015.