85S12007 MTB-F
By: Capriglione H.B. No. 31
A BILL TO BE ENTITLED
AN ACT
relating to oversight of and requirements applicable to state
contracts and other state financial and accounting issues;
providing a civil penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 322, Government Code, is amended by
adding Section 322.025 to read as follows:
Sec. 322.025. REPORT ON CONTRACT SPENDING. (a) In this
section, "state agency" has the meaning assigned by Section
2056.001.
(b) Not later than September 15 of each year, the board
shall issue a report detailing the amount of each state agency's
budget for the previous state fiscal year that was spent on
contracts.
SECTION 2. Section 441.1855, Government Code, is amended to
read as follows:
Sec. 441.1855. RETENTION OF CONTRACT AND RELATED DOCUMENTS
BY STATE AGENCIES. Notwithstanding Section 441.185 or 441.187, a
state agency:
(1) for each contract entered into by the agency,
shall retain in its records, to the extent the documents exist,
[each contract entered into by the state agency and] all contract
planning, solicitation, evaluation, monitoring, modification, and
closeout documents related to the contract, including at a minimum:
(A) a copy of all general and internal
correspondence related to the contract;
(B) the records or minutes of all internal or
external meetings related to the contract, including sign-in sheets
or agendas;
(C) a copy of all contractor invoices provided
under the contract;
(D) any information relating to discount
provisions for prompt payment under the contract and any letters
related to contract price deductions or fee adjustments;
(E) a copy of all supporting documentation for
contractor payments or progress payments under the contract;
(F) a copy of any audits performed involving the
contract; and
(G) a copy of all conflict of interest
documentation and forms required by law related to the contract;
and
(2) shall retain [may destroy] the contract and
documents described by Subdivision (1) until:
(A) [only after the seventh anniversary of] the
date[:
[(A)] the contract is completed or expires; and
[or]
(B) if [all] issues [that] arise from any
litigation, claim, negotiation, audit, open records request,
administrative review, or other action involving the contract or
documents, the seventh anniversary of the date the issues are
resolved.
SECTION 3. Section 531.102, Government Code, is amended by
adding Subsection (a-9) to read as follows:
(a-9) The inspector general shall appoint oversight
personnel to audit, review, and investigate high-risk contracts and
procurement and contracting processes of the commission, as
identified by the office of inspector general, and provide
quarterly reports on the monitoring to the inspector general,
attorney general, and governor. The quarterly reports must be
posted on the commission's publicly accessible Internet website.
The oversight personnel may work with the state auditor's office,
governor's office, Legislative Budget Board, attorney general's
office, quality assurance team established under Section 2054.158,
and contract advisory team established under Subchapter C, Chapter
2262, in performing the oversight personnel's duties under this
subsection.
SECTION 4. Section 2102.0091(c), Government Code, is
amended to read as follows:
(c) In addition to the requirements of Subsection (a), a
state agency shall file with the Governor's Office of Budget,
Planning, and Policy, the state auditor, and the Legislative Budget
Board an [any] action plan or other response issued by the state
agency's governing board or the administrator of the state agency
if the state agency does not have a governing board in response to
every issue identified in the report of the state agency's internal
auditor.
SECTION 5. Chapter 2115, Government Code, is amended by
adding Section 2115.006 to read as follows:
Sec. 2115.006. OVERPAYMENTS BY STATE AGENCY. (a) If a
state agency makes an overpayment to a vendor, the vendor must
return the amount overpaid by the agency before the 91st calendar
day after the date either party discovers the overpayment. If the
amount overpaid by the state agency is not returned before the 91st
calendar day, the vendor is subject to a civil penalty in an amount
equal to three times the amount of the overpayment and the agency
shall refer the matter to the attorney general for action.
(b) The attorney general may institute an action in district
court to recover a civil penalty under this section. A civil
penalty recovered in an action brought by the attorney general
shall be deposited in the state treasury.
SECTION 6. Section 2155.074(c), Government Code, is amended
to read as follows:
(c) A state agency shall consult with and receive approval
from the comptroller in an open meeting [commission] before
considering factors other than price and meeting specifications
when the agency procures through competitive bidding goods or
services with a value that exceeds $100 million [$100,000]. The
state agency shall retain in the agency's records a copy of the
meeting minutes with the final executed contract.
SECTION 7. Section 2155.077(a-2), Government Code, is
amended to read as follows:
(a-2) The comptroller shall [may] bar a vendor from
participating in state contracts that are subject to this subtitle,
including contracts for which purchasing authority is delegated to
a state agency, if more than two contracts between the vendor and
the state have been terminated by the state for cause based on
unsatisfactory vendor performance during the preceding three
years.
SECTION 8. Subchapter B, Chapter 2155, Government Code, is
amended by adding Section 2155.092 to read as follows:
Sec. 2155.092. REPORT ON PERFORMANCE BY AGENCY FOR CERTAIN
PROCUREMENTS. (a) This section applies only to a procurement for
services with a value of at least $1 million but not more than $5
million.
(b) Before a purchase of services under this chapter, each
state agency, including the comptroller, must:
(1) create a written report evaluating the feasibility
of the agency performing the service that is the subject of the
proposed purchase; and
(2) if the agency determines from the evaluation that
it is not feasible for the agency to perform the service, provide an
explanation of the reasons for the agency's determination.
(c) A report created under this section must be included in
the procurement analysis for the purchase.
SECTION 9. Subchapter B, Chapter 2251, Government Code, is
amended by adding Section 2251.031 to read as follows:
Sec. 2251.031. PAYMENT TO VENDOR. (a) A state agency may
not:
(1) pay an invoice from a vendor unless the invoice
directly correlates to a corresponding contract with the vendor; or
(2) make a payment to a vendor more than once per
month.
(b) A payment by a state agency to a vendor under a contract
must receive:
(1) the approval and signature of two employees of the
state agency; or
(2) if a contract manager, as defined by Section
2262.001, has been assigned to the contract by the state agency, the
approval and signature of the contract manager and one other
employee of the state agency.
(c) If a finding is made that a payment was made without the
signatures required under Subsection (b), the state agency may
revoke the payment at any time.
SECTION 10. Subchapter C, Chapter 2261, Government Code, is
amended by adding Section 2261.103 to read as follows:
Sec. 2261.103. REQUIRED CONTRACT PROVISIONS. (a) An
attorney representing a state agency shall assist in drafting a
contract to be entered into by the agency and include in the
contract at a minimum the provisions listed in Subsection (b) and
other applicable provisions recommended in the contract management
guide developed under Section 2262.051.
(b) The following are required provisions in each contract
to which the provisions are applicable:
(1) amendments;
(2) antitrust;
(3) applicable law and venue;
(4) applicable law and conforming amendments;
(5) assignments;
(6) confidentiality and public information act;
(7) equal opportunity;
(8) federal, state, and local law requirements;
(9) felony criminal convictions;
(10) financial interests and gifts;
(11) immigration;
(12) no conflicts; and
(13) right to audit.
SECTION 11. Subchapter D, Chapter 2261, Government Code, is
amended by adding Section 2261.152 to read as follows:
Sec. 2261.152. DOCUMENTATION REQUIRED FOR PAYMENT. (a) A
state agency may not make a payment to a vendor without a contract,
invoice, or other documentation that clearly demonstrates the
agency's obligation to make a payment.
(b) This section does not apply to the return of any amount
overpaid by a state agency to a vendor because of an incorrect
contract, invoice, or other documentation.
SECTION 12. Subchapter F, Chapter 2261, Government Code, is
amended by adding Section 2261.258 to read as follows:
Sec. 2261.258. REPORTING OF CONTRACT VIOLATION. (a) A
state employee or member of the public may report to the comptroller
a state contracting violation. The comptroller shall investigate a
report made under this subsection.
(b) A state agency may not suspend or terminate the
employment of, or take other adverse personnel action against, a
state employee who in good faith reports a violation to the
comptroller under this section.
(c) If, as a result of an investigation under this section
of a state contracting violation that occurred before March 8,
2017, savings to the state are realized, the comptroller shall
verify the amount of savings and an amount equal to 30 percent of
the savings may be appropriated to the comptroller only for
distribution to the state employee or member of the public who
reported the violation that initiated the investigation.
SECTION 13. Section 2262.051, Government Code, is amended
by amending Subsections (a), (b), (c), (d), and (g) and adding
Subsections (i) and (j) to read as follows:
(a) In consultation with the attorney general, the
Department of Information Resources, the [comptroller, and the]
state auditor, and state agencies that award major contracts, the
comptroller [commission] shall develop and [or] periodically
update a contract management guide for use by state
agencies. Participation by the state auditor under this
subsection is subject to approval by the legislative audit
committee for inclusion in the audit plan under Section 321.013(c).
(b) The comptroller [commission] may adopt rules necessary
to develop or update the guide.
(c) The guide must provide information regarding the
primary duties of a contract manager, including how to:
(1) develop and negotiate a contract;
(2) select a contractor; [and]
(3) monitor contractor and subcontractor performance
under a contract; and
(4) encourage competition for goods and services
purchased by this state.
(d) The guide must include model provisions for state agency
contracts. The guide must:
(1) distinguish between essential provisions that a
state agency must include in a contract to protect the interests of
this state and recommended provisions that a state agency may
include in a contract;
(2) recognize the unique contracting needs of an
individual state agency or program based on the size, nature, and
type of goods or services purchased by the state agency or program
and provide sufficient flexibility to accommodate those needs,
consistent with protecting the interests of this state;
(3) include maximum contract periods under which a new
competitive solicitation is not necessary; and
(4) include the model contract management process
developed under Section 2262.104 and recommendations on the
appropriate use of the model.
(g) The guide must establish procedures under which a state
agency is required to:
(1) solicit explanations from qualified potential
respondents who did not respond to a competitive solicitation for a
contract on which fewer than two qualified bids were received by the
agency; and
(2) develop and implement improved procurement
practices.
(i) The guide must suggest best practices related to
procurement metrics used by a state agency to measure and monitor
the effectiveness of the state agency's procurement methods,
including the:
(1) number and value of procurements made by the state
agency;
(2) number of canceled procurements by the state
agency;
(3) reasons for canceled procurements;
(4) common exceptions to the state agency's terms and
conditions by a respondent;
(5) number of responses per competitive solicitation;
and
(6) average length of time for each phase of the state
agency's procurement processes, including the length of time:
(A) between the date the state agency issues the
competitive solicitation and the date the state agency begins
receiving responses to the solicitation;
(B) for the evaluation of responses to a
competitive solicitation;
(C) of the negotiation between the state agency
and a vendor; and
(D) between the date the state agency issues the
competitive solicitation and the date the state agency awards a
contract to a vendor.
(j) The guide may include references to procurement
maturity models and procurement readiness assessments used by other
large public and private enterprises.
SECTION 14. Subchapter B, Chapter 2262, Government Code, is
amended by adding Section 2262.056 to read as follows:
Sec. 2262.056. CONTRACT MANAGERS REQUIRED FOR MAJOR
CONTRACTS. A state agency, at a minimum, shall assign a contract
manager for each major contract of the agency to manage the
oversight of the contract.
SECTION 15. Chapter 2262, Government Code, is amended by
adding Subchapter E to read as follows:
SUBCHAPTER E. CONTRACT OUTSIDE TACTICAL TEAM
Sec. 2262.201. DEFINITIONS. In this subchapter:
(1) "Information resources" has the meaning assigned
by Section 2054.003.
(2) "Team" means a contract outside tactical team
established under authority provided by this subchapter.
Sec. 2262.202. CONTRACT OUTSIDE TACTICAL TEAM. (a) From
appropriated funds, a state agency shall enter into a contract with
a team for assistance in improving information resources contract
management practices for contracts with a value of at least $100
million. The team shall review and make recommendations on the
solicitation documents, contract documents, scope of work, project
timeline and management, documentation requirements, audit
schedule and audit scope, and technical issues for the contract.
(b) A team consists of the following members selected by the
state agency:
(1) outside legal counsel; or
(2) providers of professional consulting services
with expertise in the subject matter of the contract.
(c) A state agency may not select a provider of professional
consulting services or a group or association of providers or award
a contract for the services on the basis of competitive bids
submitted for the contract or for the services but shall make the
selection and award:
(1) on the basis of demonstrated competence and
qualifications to perform the services; and
(2) for a fair and reasonable price.
(d) A state agency shall:
(1) comply with a recommendation made under Subsection
(a); or
(2) submit a written explanation regarding the reasons
the recommendation is not applicable to the contract under review.
SECTION 16. This Act applies only in relation to a contract
for which a state agency first advertises or otherwise solicits
bids, proposals, offers, or qualifications on or after the
effective date of this Act and to a payment made under a contract
described by this section.
SECTION 17. This Act takes effect December 1, 2017.