Bill Text: TX SB20 | 2015-2016 | 84th Legislature | Enrolled

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Bill Title: Relating to state agency contracting.

Spectrum: Bipartisan Bill

Status: (Passed) 2015-06-04 - Effective on 9/1/15 [SB20 Detail]

Download: Texas-2015-SB20-Enrolled.html

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S.B. No. 20

AN ACT
relating to state agency contracting.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 321.013, Government Code, is amended by
adding Subsections (k) and (l) to read as follows:
(k) In devising the audit plan under Subsection (c), the
State Auditor shall consider the performance of audits on contracts
entered into by the Health and Human Services Commission that
exceed $100 million in annual value, including a contract between
the commission and a managed care organization. The State Auditor
shall collaborate with the financial managers in the Medicaid/CHIP
Division of the commission in performing an audit described by this
subsection. An audit described by this subsection:
(1) may be limited in scope to target an area of the
contract that the State Auditor determines poses the highest
financial risk to this state; and
(2) must determine whether the entity contracting with
the commission has spent state money in accordance with the
purposes authorized in the contract.
(l) The State Auditor may contract with a private auditor to
audit a contract under Subsection (k).
SECTION 2. Subchapter B, Chapter 403, Government Code, is
amended by adding Section 403.03057 to read as follows:
Sec. 403.03057. CENTRALIZED STATE PURCHASING STUDY.
(a) The comptroller, in cooperation with the governor's budget and
policy staff, shall conduct a study examining the feasibility and
practicality of consolidating state purchasing functions into
fewer state agencies or one state agency. The study must examine
the cost savings to this state that may be achieved through:
(1) abolishing offices or departments of state
agencies that have a dedicated office or department for purchasing;
and
(2) consolidating or reducing the number of vendors
authorized to contract with this state to allow this state to better
leverage its purchasing power.
(b) The comptroller shall prepare and deliver to the
governor, the lieutenant governor, and each member of the
legislature a report on the findings of the study conducted under
Subsection (a), including:
(1) a detailed projection of expected savings or costs
to this state in consolidating state purchasing;
(2) a report on the process for the legislature or the
executive branch to implement the consolidation of state
purchasing;
(3) a list of state agencies, including dedicated
offices or departments in those agencies, with purchasing
responsibilities; and
(4) the total cost to this state of the purchasing
responsibilities for each state agency, including the dedicated
office or department in the agency with purchasing responsibility.
(c) The comptroller shall prepare, deliver, and post on the
comptroller's Internet website the report required by this section
not later than December 31, 2016.
(d) The comptroller may contract with a public or private
entity to conduct the study required by this section.
(e) This section expires January 1, 2018.
SECTION 3. Subchapter L, Chapter 441, Government Code, is
amended by adding Section 441.1855 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) shall retain in its records each contract entered
into by the state agency and all contract solicitation documents
related to the contract; and
(2) may destroy the contract and documents only after
the seventh anniversary of the date:
(A) the contract is completed or expires; or
(B) all issues that arise from any litigation,
claim, negotiation, audit, open records request, administrative
review, or other action involving the contract or documents are
resolved.
SECTION 4. Subchapter C, Chapter 572, Government Code, is
amended by adding Section 572.069 to read as follows:
Sec. 572.069. CERTAIN EMPLOYMENT FOR FORMER STATE OFFICER
OR EMPLOYEE RESTRICTED. A former state officer or employee of a
state agency who during the period of state service or employment
participated on behalf of a state agency in a procurement or
contract negotiation involving a person may not accept employment
from that person before the second anniversary of the date the
officer's or employee's service or employment with the state agency
ceased.
SECTION 5. Subchapter C, Chapter 2054, Government Code, is
amended by adding Section 2054.067 to read as follows:
Sec. 2054.067. POSTING OF CERTAIN DOCUMENTS RELATING TO
CONTRACT SOLICITATIONS. (a) The department shall post all
solicitation documents related to a contract of the department,
including contracts under Chapter 2157, to the centralized
accounting and payroll system authorized under Sections 2101.035
and 2101.036, or any successor system used to implement the
enterprise resource planning component of the uniform statewide
accounting project.
(b) The documents posted under Subsection (a) must include
documents showing the criteria by which the department evaluated
each vendor responding to the contract solicitation and, if
applicable, an explanation of why the vendor was selected by the
department under Section 2157.068(b).
SECTION 6. Section 2101.001(1), Government Code, is amended
to read as follows:
(1) "Enterprise resource planning" includes the
administration of a state agency's:
(A) general ledger;
(B) accounts payable;
(C) accounts receivable;
(D) budgeting;
(E) inventory;
(F) asset management;
(G) billing;
(H) payroll;
(I) projects;
(J) grants;
(K) human resources, including administration of
performance measures, time spent on tasks, and other personnel and
labor issues; and
(L) purchasing, including solicitations and
contracting.
SECTION 7. Section 2101.035, Government Code, is amended by
adding Subsection (i) to read as follows:
(i) State agencies shall report contract and purchasing
information in the uniform manner required by the comptroller.
SECTION 8. Section 2101.036, Government Code, is amended by
adding Subsection (e) to read as follows:
(e) Notwithstanding Subsection (d), a state agency in the
legislative branch may elect to participate in the enterprise
resource planning system developed under this section.
SECTION 9. Subchapter C, Chapter 2101, Government Code, is
amended by adding Section 2101.041 to read as follows:
Sec. 2101.041. STATE AGENCY REPORTING OF CONTRACTING
INFORMATION. (a) The comptroller by rule shall determine the
contracting information that state agencies must report or provide
using the centralized accounting and payroll system, or any
successor system used to implement the enterprise resource planning
component of the uniform statewide accounting project, developed
under Sections 2101.035 and 2101.036.
(b) In making the determination required by this section,
the comptroller shall consider requiring a state agency to report
or provide:
(1) a brief summary of each contract that is quickly
and easily searchable, including the contract's purpose, timeline,
and deliverables;
(2) contract planning and solicitation documents;
(3) the criteria used to determine the vendor awarded
the contract;
(4) if the contract was awarded based on best value to
the state:
(A) a list of the factors considered in
determining best value with the weight given each factor; and
(B) a statement regarding how the vendor awarded
the contract provides the best value to the state in relation to
other vendors who bid or otherwise responded to the contract
solicitation;
(5) any statements of work and work orders prepared
for or under the contract;
(6) the proposed budget for the contract;
(7) any conflict of interest documents signed by state
agency purchasing personnel participating in the planning,
soliciting, or monitoring of the contract;
(8) criteria used or to be used by the state agency in
monitoring the contract and vendor performance under the contract;
(9) a justification for each change order, contract
amendment, contract renewal or extension, or other proposed action
that would result in an increase in the monetary value of a contract
with an initial value exceeding $10 million; and
(10) additional supporting documentation and
justification for a change order, contract amendment, contract
renewal or extension, or other proposed action of a contract
described by Subdivision (9) that would result in an increase in the
contract's monetary value by more than 20 percent.
SECTION 10. Subchapter B, Chapter 2155, Government Code, is
amended by adding Section 2155.0755 to read as follows:
Sec. 2155.0755. VERIFICATION OF USE OF BEST VALUE STANDARD.
(a) The contract manager or procurement director of each state
agency shall:
(1) approve each state agency contract for which the
agency is required to purchase goods or services using the best
value standard;
(2) ensure that, for each contract, the agency
documents the best value standard used for the contract; and
(3) acknowledge in writing that the agency complied
with the agency's and comptroller's contract management guide in
the purchase.
(b) For each purchase of goods or services for which a state
agency is required to use the best value standard, the comptroller
shall ensure that the agency includes in the vendor performance
tracking system established under Section 2262.055 information on
whether the vendor satisfied that standard.
SECTION 11. Section 2155.077, Government Code, is amended
by amending Subsections (a) and (b) and adding Subsection (a-2) to
read as follows:
(a) The commission 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, for:
(1) substandard performance under a contract with the
state or a state agency;
(2) material misrepresentations in a bid or proposal
to the state or a state agency or during the course of performing a
contract with the state or a state agency;
(3) fraud; [or]
(4) breaching a contract with the state or a state
agency; or
(5) repeated unfavorable performance reviews under
Section 2155.089 or repeated unfavorable classifications received
by the vendor under Section 2262.055 after considering the
following factors:
(A) the severity of the substandard performance
by the vendor;
(B) the impact to the state of the substandard
performance;
(C) any recommendations by a contracting state
agency that provides an unfavorable performance review;
(D) whether debarment of the vendor is in the
best interest of the state; and
(E) any other factor that the comptroller
considers relevant, as specified by comptroller rule.
(a-2) The comptroller 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 unsatisfactory vendor
performance during the preceding three years.
(b) Except as provided by Subsection (d), the commission
shall bar a vendor from participating in state contracts under
Subsection (a) or (a-2) for a period that is commensurate with the
seriousness of the vendor's action and the damage to the state's
interests.
SECTION 12. Section 2155.078, Government Code, is amended
by amending Subsections (a) and (b) and adding Subsection (a-1) to
read as follows:
(a) The commission shall establish and administer a system
of training, continuing education, and certification for state
agency purchasing personnel. The training and continuing education
for state agency purchasing personnel must include ethics training.
The commission may establish and offer appropriate training to
vendors on a cost recovery basis. The commission may adopt rules to
administer this section, including rules relating to monitoring a
certified purchaser's compliance with the continuing education
requirements of this section.
(a-1) The training, continuing education, and certification
required under Subsection (a) must include:
(1) training on the selection of an appropriate
procurement method by project type; and
(2) training conducted by the Department of
Information Resources on purchasing technologies.
(b) Notwithstanding [Except as provided by] Subsection (n),
all state agency purchasing personnel, including agencies exempted
from the purchasing authority of the commission, must receive the
training and continuing education to the extent required by rule of
the commission. The training and continuing education must include
ethics training. A state agency employee who is required to receive
the training may not participate in purchases by the employing
agency unless the employee has received the required training or
received equivalent training from a national association
recognized by the commission. The equivalent training may count,
as provided by Subsection (k), toward the continuing education
requirements.
SECTION 13. Subchapter B, Chapter 2155, Government Code, is
amended by adding Section 2155.089 to read as follows:
Sec. 2155.089. REPORTING VENDOR PERFORMANCE. (a) After a
contract is completed or otherwise terminated, each state agency
shall review the vendor's performance under the contract.
(b) The state agency shall report to the comptroller, using
the tracking system established by Section 2262.055, on the results
of the review regarding a vendor's performance under a contract.
(c) This section does not apply to:
(1) an enrollment contract described by 1 T.A.C.
Section 391.183 as that section existed on September 1, 2015; or
(2) a contract of the Employees Retirement System of
Texas or the Teacher Retirement System of Texas except for a
contract with a nongovernmental entity for claims administration of
a group health benefit plan under Subtitle H, Title 8, Insurance
Code.
SECTION 14. Section 2156.181(a), Government Code, is
amended to read as follows:
(a) The commission may enter into one or more compacts,
interagency agreements, or cooperative purchasing agreements
directly with one or more state governments, agencies of other
states, or other governmental entities or may participate in,
sponsor, or administer a cooperative purchasing agreement through
an entity that facilitates those agreements for the purchase of
goods or services if the commission determines that the [entering
into an] agreement would be in the best interest of the state.
SECTION 15. Section 2157.068, Government Code, is amended
by adding Subsections (e-1) and (e-2) to read as follows:
(e-1) A state agency contracting to purchase a commodity
item shall use the list maintained as required by Subsection (e) as
follows:
(1) for a contract with a value of $50,000 or less, the
agency may directly award the contract to a vendor included on the
list without submission of a request for pricing to other vendors on
the list;
(2) for a contract with a value of more than $50,000
but not more than $150,000, the agency must submit a request for
pricing to at least three vendors included on the list in the
category to which the contract relates; and
(3) for a contract with a value of more than $150,000
but not more than $1 million, the agency must submit a request for
pricing to at least six vendors included on the list in the category
to which the contract relates or all vendors on the schedule if the
category has fewer than six vendors.
(e-2) A state agency may not enter into a contract to
purchase a commodity item if the value of the contract exceeds $1
million.
SECTION 16. Subchapter B, Chapter 2157, Government Code, is
amended by adding Section 2157.0685 to read as follows:
Sec. 2157.0685. CONTRACT REQUIREMENTS FOR CERTAIN
SERVICES. (a) In this section, "statement of work" means a
document that states the requirements for a contract, including
deliverables, performance specifications, and other requirements,
specific to the vendor under that contract that are not specified in
a contract awarded by the department under Section 2157.068 for
contracts more than $50,000.
(b) For a contract awarded by the department under Section
2157.068 that requires a state agency to develop and execute a
statement of work to initiate services under the contract, the
state agency must:
(1) consult with the department before submission of
the statement of work to a vendor; and
(2) post each statement of work entered into by the
agency on the agency's Internet website in the manner required by
department rule.
(c) A statement of work executed by a state agency under a
contract awarded by the department under Section 2157.068 is not
valid and money may not be paid to the vendor under the terms of the
statement of work unless the department first signs the statement
of work.
SECTION 17. Section 2261.001(a), Government Code, is
amended to read as follows:
(a) This chapter, other than Subchapter F, applies only to
each procurement of goods or services made by a state agency that is
neither made by the comptroller nor made under purchasing authority
delegated to the agency by or under Section 51.9335 or 73.115,
Education Code, or Section 2155.131 or 2155.132.
SECTION 18. Chapter 2261, Government Code, is amended by
adding Subchapter F to read as follows:
SUBCHAPTER F. ETHICS, REPORTING, AND APPROVAL REQUIREMENTS FOR
CERTAIN CONTRACTS
Sec. 2261.251. APPLICABILITY OF SUBCHAPTER.
(a) Notwithstanding Section 2261.001, this subchapter applies to
the Texas Department of Transportation and to an institution of
higher education acquiring goods or services under Section 51.9335
or 73.115, Education Code.
(b) This subchapter does not apply to a contract of the
Employees Retirement System of Texas or the Teacher Retirement
System of Texas except for a contract with a nongovernmental entity
for claims administration of a group health benefit plan under
Subtitle H, Title 8, Insurance Code.
Sec. 2261.252. DISCLOSURE OF POTENTIAL CONFLICTS OF
INTEREST; CERTAIN CONTRACTS PROHIBITED. (a) Each state agency
employee or official who is involved in procurement or in contract
management for a state agency shall disclose to the agency any
potential conflict of interest specified by state law or agency
policy that is known by the employee or official with respect to any
contract with a private vendor or bid for the purchase of goods or
services from a private vendor by the agency.
(b) A state agency may not enter into a contract for the
purchase of goods or services with a private vendor with whom any of
the following agency employees or officials have a financial
interest:
(1) a member of the agency's governing body;
(2) the governing official, executive director,
general counsel, chief procurement officer, or procurement
director of the agency; or
(3) a family member related to an employee or official
described by Subdivision (1) or (2) within the second degree by
affinity or consanguinity.
(c) A state agency employee or official has a financial
interest in a person if the employee or official:
(1) owns or controls, directly or indirectly, an
ownership interest of at least one percent in the person, including
the right to share in profits, proceeds, or capital gains; or
(2) could reasonably foresee that a contract with the
person could result in a financial benefit to the employee or
official.
(d) A financial interest prohibited by this section does not
include a retirement plan, a blind trust, insurance coverage, or an
ownership interest of less than one percent in a corporation.
Sec. 2261.253. REQUIRED POSTING OF CERTAIN CONTRACTS;
ENHANCED CONTRACT AND PERFORMANCE MONITORING. (a) For each
contract for the purchase of goods or services from a private
vendor, each state agency shall post on its Internet website:
(1) each contract the agency enters into, including
contracts entered into without inviting, advertising for, or
otherwise requiring competitive bidding before selection of the
contractor, until the contract expires or is completed;
(2) the statutory or other authority under which a
contract that is not competitively bid under Subdivision (1) is
entered into without compliance with competitive bidding
procedures; and
(3) the request for proposals related to a
competitively bid contract included under Subdivision (1) until the
contract expires or is completed.
(b) A state agency monthly may post contracts described by
Subsection (a) that are valued at less than $15,000.
(c) Each state agency by rule shall establish a procedure to
identify each contract that requires enhanced contract or
performance monitoring and submit information on the contract to
the agency's governing body or, if the agency is not governed by a
multimember governing body, the officer who governs the agency.
The agency's contract management office or procurement director
shall immediately notify the agency's governing body or governing
official, as appropriate, of any serious issue or risk that is
identified with respect to a contract monitored under this
subsection.
(d) This section does not apply to a memorandum of
understanding, interagency contract, interlocal agreement, or
contract for which there is not a cost.
Sec. 2261.254. CONTRACTS WITH VALUE EXCEEDING $1 MILLION.
(a) For each contract for the purchase of goods or services that
has a value exceeding $1 million, a state agency shall develop and
implement contract reporting requirements that provide information
on:
(1) compliance with financial provisions and delivery
schedules under the contract;
(2) corrective action plans required under the
contract and the status of any active corrective action plan; and
(3) any liquidated damages assessed or collected under
the contract.
(b) Each state agency shall verify:
(1) the accuracy of any information reported under
Subsection (a) that is based on information provided by a
contractor; and
(2) the delivery time of goods or services scheduled
for delivery under the contract.
(c) Except as provided by Subsection (d), a state agency may
enter into a contract for the purchase of goods or services that has
a value exceeding $1 million only if:
(1) the governing body of the state agency approves
the contract and the approved contract is signed by the presiding
officer of the governing body; or
(2) for a state agency that is not governed by a
multimember governing body, the officer who governs the agency
approves and signs the contract.
(d) The governing body or governing official of a state
agency, as appropriate, may delegate to the executive director of
the agency the approval and signature authority under Subsection
(c).
(e) A highway construction, engineering services, or
maintenance contract that is in compliance with all applicable laws
related to procuring engineering services or construction bidding
and that is awarded by the Texas Department of Transportation under
Subchapter A, Chapter 223, Transportation Code, is not required to
be signed by a member of the Texas Transportation Commission or the
executive director of the department. This exception does not
apply to expedited highway improvement contracts under Subchapter
C, Chapter 223, Transportation Code, a comprehensive development
agreement entered into under Subchapter E, Chapter 223,
Transportation Code, a design-build contract entered into under
Subchapter F, Chapter 223, Transportation Code, or any other
contract entered into by the Texas Department of Transportation.
Sec. 2261.255. CONTRACTS WITH VALUE EXCEEDING $5 MILLION.
For each state agency contract for the purchase of goods or services
that has a value exceeding $5 million, the contract management
office or procurement director of the agency must:
(1) verify in writing that the solicitation and
purchasing methods and contractor selection process comply with
state law and agency policy; and
(2) submit to the governing body of the agency, or
governing official of the agency if the agency is not governed by a
multimember governing body, information on any potential issue that
may arise in the solicitation, purchasing, or contractor selection
process.
Sec. 2261.256. ACCOUNTABILITY AND RISK ANALYSIS PROCEDURE;
CONTRACT MANAGEMENT HANDBOOK. (a) Each state agency shall develop
and comply with a purchasing accountability and risk analysis
procedure. The procedure must provide for:
(1) assessing the risk of fraud, abuse, or waste in the
contractor selection process, contract provisions, and payment and
reimbursement rates and methods for the different types of goods
and services for which the agency contracts;
(2) identifying contracts that require enhanced
contract monitoring or the immediate attention of contract
management staff; and
(3) establishing clear levels of purchasing
accountability and staff responsibilities related to purchasing.
(b) Each state agency shall publish a contract management
handbook that establishes consistent contracting policies and
practices to be followed by the agency and that is consistent with
the comptroller's contract management guide. The agency's handbook
may include standard contract provisions and formats for the agency
to incorporate in contracts.
(c) Each state agency shall post on the agency's Internet
website the procedures described by Subsections (a)(2) and (3) and
submit to the comptroller a link to the web page that includes the
procedures. The comptroller shall post on the comptroller's
Internet website the web page link submitted by each state agency.
Sec. 2261.257. CONTRACT DATABASE. (a) Each state agency
that becomes a participant in the centralized accounting and
payroll systems as authorized by Sections 2101.035 and 2101.036
shall use the system to identify and record each contract entered
into by the agency as specified by the rules, policies, or
procedures developed by the comptroller.
(b) The comptroller shall provide as necessary information
and state agency contract data contained in the centralized
accounting and payroll systems to other state agencies with
oversight duties, including the Legislative Budget Board, the state
auditor's office, and the Department of Information Resources.
SECTION 19. Section 2262.053(d), Government Code, is
amended to read as follows:
(d) The comptroller shall administer training under this
section and may assess a fee for the training in an amount
sufficient to recover the comptroller's costs under this section.
SECTION 20. Section 2262.0535, Government Code, is amended
by adding Subsection (c) to read as follows:
(c) The comptroller may assess a fee for the training
provided under this section in an amount sufficient to recover the
comptroller's costs under this section.
SECTION 21. Section 2262.055, Government Code, is amended
by amending Subsections (a) and (b) and adding Subsections (d) and
(e) to read as follows:
(a) The comptroller shall evaluate the vendor's performance
based on information reported by state agencies under Section
2155.089 and criteria established by the comptroller.
(b) The comptroller by rule shall establish an evaluation
process that:
(1) rates vendors on an A through F scale, with A being
the highest grade; and
(2) allows vendors who receive a grade lower than a C
[an unfavorable performance review] to protest any classification
given by the comptroller.
(d) A state agency shall use the vendor performance tracking
system to determine whether to award a contract to a vendor reviewed
in the tracking system. The comptroller by rule shall establish the
manner in which the rating scale established under Subsection (b)
affects a vendor's eligibility for state contracts and the grades
on the scale that disqualify a vendor from state contracting.
(e) The comptroller shall make the vendor performance
tracking system accessible to the public on the comptroller's
Internet website.
SECTION 22. Section 51.9335(d), Education Code, is amended
to read as follows:
(d) Subject to Section 51.9337, Subtitle D, Title 10,
Government Code, and Subchapter B, Chapter 2254, Government Code,
do not apply to the acquisition of goods and services under this
section, except that an institution of higher education must comply
with any provision of those laws, or a rule adopted under a
provision of those laws, relating to contracting with historically
underutilized businesses or relating to the procurement of goods
and services from persons with disabilities. An institution of
higher education may, but is not required to, acquire goods or
services as provided by Subtitle D, Title 10, Government Code.
SECTION 23. Subchapter Z, Chapter 51, Education Code, is
amended by adding Section 51.9337 to read as follows:
Sec. 51.9337. PURCHASING AUTHORITY CONDITIONAL; REQUIRED
STANDARDS. (a) An institution of higher education may not
exercise the acquisition authority granted by Section 51.9335 or
73.115 unless the institution complies with this section. An
institution that is determined under Subsection (j) to not be in
compliance with this section is subject to the laws governing
acquisition of goods and services by state agencies, including
Subtitle D, Title 10, Government Code, and Chapter 2254, Government
Code.
(b) The board of regents of an institution of higher
education by rule shall establish for each institution under the
management and control of the board:
(1) a code of ethics for the institution's officers and
employees, including provisions governing officers and employees
authorized to execute contracts for the institution or to exercise
discretion in awarding contracts, subject to Subsection (c);
(2) policies for the internal investigation of
suspected defalcation, misappropriation, and other fiscal
irregularities and an institutional or systemwide compliance
program designed to promote ethical behavior and ensure compliance
with all applicable policies, laws, and rules governing higher
education, including research and health care to the extent
applicable;
(3) a contract management handbook that provides
consistent contracting policies and practices and contract review
procedures, including a risk analysis procedure, subject to
Subsection (d);
(4) contracting delegation guidelines, subject to
Subsections (e) and (f);
(5) training for officers and employees authorized to
execute contracts for the institution or to exercise discretion in
awarding contracts, including training in ethics, selection of
appropriate procurement methods, and information resources
purchasing technologies; and
(6) internal audit protocols, subject to Subsection
(g).
(c) The code of ethics governing an institution of higher
education must include:
(1) general standards of conduct and a statement that
each officer or employee is expected to obey all federal, state, and
local laws and is subject to disciplinary action for a violation of
those laws;
(2) policies governing conflicts of interest,
conflicts of commitment, and outside activities, ensuring that the
primary responsibility of officers and employees is to accomplish
the duties and responsibilities assigned to that position;
(3) a conflict of interest policy that prohibits
employees from having a direct or indirect financial or other
interest, engaging in a business transaction or professional
activity, or incurring any obligation that is in substantial
conflict with the proper discharge of the employee's duties related
to the public interest;
(4) a conflict of commitment policy that prohibits an
employee's activities outside the institution from interfering
with the employee's duties and responsibilities to the institution;
(5) a policy governing an officer's or employee's
outside activities, including compensated employment and board
service, that clearly delineates the nature and amount of
permissible outside activities and that includes processes for
disclosing the outside activities and for obtaining and documenting
institutional approval to perform the activities;
(6) a policy that prohibits an officer or employee
from acting as an agent for another person in the negotiation of the
terms of an agreement relating to the provision of money, services,
or property to the institution;
(7) a policy governing the use of institutional
resources; and
(8) a policy providing for the regular training of
officers and employees on the policies described by this
subsection.
(d) An institution of higher education shall establish
contract review procedures and a contract review checklist that
must be reviewed and approved by the institution's legal counsel
before implementation. The review procedures and checklist must
include:
(1) a description of each step of the procedure that an
institution must use to evaluate and process contracts;
(2) a checklist that describes each process that must
be completed before contract execution; and
(3) a value threshold that initiates the required
review by the institution's legal counsel unless the contract is a
standard contract previously approved by the counsel.
(e) An institution of higher education's policies governing
contracting authority must clearly specify the types and values of
contracts that must be approved by the board of regents and the
types and values of contracts for which contracting authority is
delegated by the board to the chief executive officer and by the
chief executive officer to other officers and employees of the
institution. An officer or employee may not execute a document for
the board unless the officer or employee has authority to act for
the board and the authority is exercised in compliance with
applicable conditions and restrictions.
(f) An institution of higher education may not enter into a
contract with a value of more than $1 million, including any
amendment, extension, or renewal of the contract that increases the
value of the original contract to more than $1 million, unless the
institution's board of regents approves the contract, expressly
delegates authority to exceed that amount, or expressly adopts an
exception for that contract. The board must approve any amendment,
extension, or renewal of a contract with a value that exceeds 25
percent of the value of the original contract approved by the board
unless the authority to exceed the approved amount is expressly
delegated by the board or an exception is expressly adopted by the
board for that contract.
(g) The board of regents of an institution of higher
education shall adopt standards for internal audits conducted by
the institution to provide a systematic, disciplined approach to
evaluate and improve the effectiveness of the institution's risk
management, control, and governance processes related to contracts
and to require risk-based testing of contract administration. The
internal auditor must have full and unrestricted access to all
institutional property, personnel, and records. An internal
auditor must report directly to the board of regents in accordance
with Chapter 2102, Government Code.
(h) The chief auditor of an institution of higher education
shall annually assess whether the institution has adopted the rules
and policies required by this section and shall submit a report of
findings to the state auditor. In auditing the purchase of goods
and services by the institution, the state auditor shall determine
whether an institution has adopted the required rules and policies.
(i) If the state auditor determines that an institution of
higher education has failed to adopt the required rules and
policies, the auditor shall report that failure to the legislature
and to the institution's board of regents and shall, in
consultation with the institution, adopt a remediation plan to
bring the institution into compliance. If the institution fails to
comply within the time established by the state auditor, the
auditor shall find the institution to be in noncompliance and
report that finding to the legislature and comptroller.
(j) In accordance with a schedule adopted by the state
auditor in consultation with the comptroller, the authority of an
institution of higher education to acquire goods and services as
provided by Section 51.9335 or 73.115 is suspended if the
institution fails to comply with the remediation plan under
Subsection (i) within the time established by the state auditor. As
a result of the suspension, the laws, including Subtitle D, Title
10, Government Code, and Chapter 2254, Government Code, governing
acquisition of goods and services by state agencies from which the
institution is otherwise exempt, shall apply to the institution's
acquisition of goods and services.
SECTION 24. Subchapter Z, Chapter 51, Education Code, is
amended by adding Section 51.954 to read as follows:
Sec. 51.954. DISCLOSURE OF SPONSORS OF CONTRACTED RESEARCH
IN PUBLIC COMMUNICATIONS. (a) In any public communication the
content of which is based on the results of sponsored research, a
faculty member or other employee or appointee of an institution of
higher education who conducted or participated in conducting the
research shall conspicuously disclose the identity of each sponsor
of the research.
(b) In this section:
(1) "Institution of higher education" has the meaning
assigned by Section 61.003.
(2) "Public communication" means oral or written
communication intended for public consumption or distribution,
including:
(A) testimony in a public administrative,
legislative, regulatory, or judicial proceeding;
(B) printed matter including a magazine,
journal, newsletter, newspaper, pamphlet, or report; or
(C) posting of information on a website or
similar Internet host for information.
(3) "Sponsor" means an entity that contracts for or
provides money or materials for research.
(4) "Sponsored research" means research:
(A) that is conducted under a contract with, or
that is conducted under a grant awarded by and pursuant to a written
agreement with, an individual or entity other than the institution
conducting the research; and
(B) in which payments received or the value of
materials received under that contract or grant, or under a
combination of more than one such contract or grant, constitutes at
least 50 percent of the cost of conducting the research.
SECTION 25. Sections 73.115(e) and (f), Education Code, are
amended to read as follows:
(e) To the extent of any conflict, this section prevails
over any other law relating to the purchasing of goods and services
other than Section 51.9337 and [except] a law relating to
contracting with historically underutilized businesses.
(f) Except as otherwise provided by this section and Section
51.9337, Subtitle D, Title 10, Government Code, and Chapter 2254,
Government Code, do not apply to purchases of goods and services
made under this section.
SECTION 26. Section 2155.502(d), Government Code, is
repealed.
SECTION 27. Section 572.069, Government Code, as added by
this Act, applies only to a state officer or employee whose service
or employment with a state agency ceases on or after the effective
date of this Act.
SECTION 28. As soon as is practicable after the effective
date of this Act, the comptroller of public accounts, and each
affected state agency as necessary, shall adopt the rules,
processes, and procedures and take the actions necessary to
implement the changes in law made by this Act.
SECTION 29. Section 2262.055(d), Government Code, as added
by this Act, applies only in relation to a contract for which the
request for bids or proposals or other applicable expression of
interest is made public on or after October 1, 2015.
SECTION 30. The changes in law made by this Act apply only
to a contract entered into on or after the effective date of this
Act. A contract entered into before that date is governed by the
law in effect immediately before the effective date of this Act, and
the former law is continued in effect for that purpose.
SECTION 31. This Act takes effect September 1, 2015.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 20 passed the Senate on
March 31, 2015, by the following vote: Yeas 30, Nays 0;
May 20, 2015, Senate refused to concur in House amendments and
requested appointment of Conference Committee; May 24, 2015, House
granted request of the Senate; May 30, 2015, Senate adopted
Conference Committee Report by the following vote: Yeas 31,
Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 20 passed the House, with
amendments, on May 19, 2015, by the following vote: Yeas 143,
Nays 0, one present not voting; May 24, 2015, House granted request
of the Senate for appointment of Conference Committee;
May 31, 2015, House adopted Conference Committee Report by the
following vote: Yeas 140, Nays 2, two present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor