By: Zaffirini S.B. No. 1053
A BILL TO BE ENTITLED
AN ACT
relating to the management of state contracts, including the
establishment of the contract management division of the
Legislative Budget Board.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2262.002(a), Government Code, is amended
to read as follows:
(a) Except as provided by Section 2262.206, this [This]
chapter does not apply to an institution of higher education as
defined by Section 61.003, Education Code.
SECTION 2. Chapter 2262, Government Code, is amended by
adding Subchapter E to read as follows:
SUBCHAPTER E. CONTRACT MANAGEMENT DIVISION
Sec. 2262.201. DEFINITIONS. In this subchapter:
(1) "Division" means the contract management division
established by the Legislative Budget Board under this subchapter.
(2) "Major information resources project" has the
meaning assigned by Section 2054.003(10).
(3) "Quality assurance team" means the quality
assurance team established under Section 2054.158.
(4) "Contract Advisory Team" means the contract
advisory team established under Section 2262.101.
(5) "Contract" means an original contract or grant; a
contract or grant amendment; a contract or grant extension; a
purchase order; an interagency grant or agreement; or an interlocal
agreement.
(6) "High-risk contract" means a state agency contract
that:
(A) has a value of at least $10 million;
(B) has a value of less than $10 million, but has
high-risk factors as identified by the division;
(C) is entered into with an entity that is
incorporated outside of the United States;
(D) is entered into with an entity that, during
the five-year period preceding the date of the award of the
contract, has had a contract with a state agency or federal
governmental entity terminated or canceled for:
(i) a violation of, or noncompliance with,
the terms of the contract;
(ii) delivery of an ineffective product,
service, or system;
(iii) significant delays or cost overruns;
(iv) fraud;
(v) misconduct; or
(vi) any other event that resulted in the
termination or cancellation of the contract for cause; or
(E) is entered into with an entity that, at any
time during the five-year period preceding the date of the award of
the contract, has had a monetary judgment entered against the
entity as a result of litigation initiated by the state, a state
official, or a state agency.
Sec. 2262.202. ESTABLISHMENT; GENERAL DUTIES. The
Legislative Budget Board shall establish a contract management
division to:
(1) develop criteria for identifying high-risk
factors in contracts;
(2) define the information that must be included in
the required report and notice;
(3) coordinate and consult with the Contract Advisory
Team on all high-risk contracts; and
(4) coordinate and consult with the quality assurance
team on all high-risk contracts relating to a major information
resources project.
Sec. 2262.203. REVIEW AND REPORTING. (a) The division
shall:
(1) review high-risk contracts and identify certain
high-risk contracts for further monitoring and reporting; and
(2) report annually on the status of high-risk
contracts to the:
(A) governor;
(B) lieutenant governor;
(C) speaker of the house of representatives;
(D) presiding officer of the committee in the
house of representatives with primary responsibility for
appropriations; and
(E) presiding officer of the committee in the
senate with primary responsibility for appropriations.
(b) For contracts identified under Subsection (a)(1), the
division shall require the state agency that executed the contract
to report on the status of the contract monthly or quarterly, as
determined by the division.
(c) Based on reports received under Subsection (b), the
division shall notify the Legislative Budget Board as soon as
practicable of any high-risk contracts experiencing cost overruns
or performance failure or otherwise demonstrating poor management.
(d) A state agency shall provide the division any
information necessary for the division to perform the division's
duties under this section.
Sec. 2262.204. OUTSIDE SERVICES. (a) The division may
retain the services of private counsel or of private consultants
who have expertise in a technical matter that is the subject of a
high-risk contract or proposed high-risk contract.
(b) A state agency with a high-risk contract or proposed
high-risk contract for which private counsel or consultants are
retained by the division shall pay the costs and fees of the counsel
or consultants.
Sec. 2262.205. RECOMMENDATION OF CONTRACT CANCELLATION.
The division may recommend the cancellation of a contract of a state
agency to the agency and the Legislative Budget Board during the
review process under this subchapter if an executed contract is
experiencing performance failure or payment irregularities.
Sec. 2262.206. NOTIFICATION OF CERTAIN PURCHASES OR
CONTRACTS. (a) In this section, "institution of higher education"
has the meaning assigned by Section 61.003, Education Code.
(b) A state agency or institution of higher education may
not enter into a contract or make a purchase with an expected value
that exceeds or may reasonably be expected to exceed $10 million
unless the agency or institution, at least 30 business days before
the date of the contract or purchase, provides written notice of the
contract or purchase to:
(1) the division;
(2) the governor;
(3) the state auditor;
(4) the presiding officer of the committee in the
house of representatives with primary responsibility for
appropriations; and
(5) the presiding officer of the committee in the
senate with primary responsibility for appropriations.
(c) Subsection (d) applies only to a contract or purchase
with an expected value that exceeds or may reasonably be expected to
exceed $1 million and that is awarded or made:
(1) as a result of an emergency or following an
emergency procurement procedure authorized by law; or
(2) without advertising or otherwise soliciting bids,
proposals, offers, or qualifications relating to competitive
bidding processes required by state statutes, policies, or
procedures.
(d) A state agency or institution of higher education may
not enter into a contract or make a purchase described by Subsection
(c) unless, at least 24 hours before awarding the contract or making
the purchase, the agency or institution provides to the entities
described by Subsection (b) written notice and a clear statement of
the emergency and the necessity for the contract or purchase.
Sec. 2262.207. RULES. The Legislative Budget Board may
adopt rules to implement this subchapter.
Sec. 2262.208. NO CAUSE OF ACTION CREATED. This subchapter
does not create a cause of action.
SECTION 3. Subchapter E, Chapter 2262, Government Code, as
added by this Act, applies only to a contract or purchase for which
a state agency first advertises or otherwise solicits bids,
proposals, offers, or qualifications on or after the effective date
of this Act.
SECTION 4. On the effective date of this Act, a state agency
shall report to the contract management division of the Legislative
Budget Board all high-risk contracts, as defined by Section
2262.201, Government Code, as added by this Act, the agency
anticipates entering into during the state fiscal biennium
beginning September 1, 2015.
SECTION 5. This Act takes effect September 1, 2015.