Legislative Update – 83 rd Leg. Session Items of Interest to State Purchasers David Duncan, Deputy Gen’l Counsel Texas Comptroller of Public Accounts

A lively session A regular and THREE SPECIALS. Oh boy. Regular session had 5868 bills introduced in the House and Senate, with 1437 passed (~24.5%). Similar numbers from past sessions. Governor vetoed 28 (also about typical #). Big issues were funding (water and transportation), education, and of course the end-of-session abortion debate.

Purchasing bills – a few got through HOUSE HB 194 (Farias) - “Veteran with a 20% service-connected disability” = HUB. HB 535 (Davis, Yvonne) –created preference for goods and agricultural products “manufactured” in Texas. VETOED HB 586 (Workman) – waiver of sovereign immunity for architecture, engineering and construction contracts. HB 1965 (Harper-Brown) – CAT changes. HB 1726 (Bohac) – “shipping coordination” bill. HB 2472 (Cook) – DIR and TPASS Sunset bill. HB 2873 (Harper-Brown) – low-risk contract management model. HB 3116 (Cook) – Includes TSB in definition of ERP, authorizes movement of funding from DIR. HB 3648 (Harper-Brown) – “Material changes to contracts” must go to board. SENATE SB 1 (Williams) – CPA Budget riders 17 and 18 require HUB assessments and “compliance” demonstrations. SB 59 (Nelson) – Repeals report for recycled products, repeals report outcome for HUB report. SB 1368 (Davis) – PIA changes for “contracts involving the exchange or creation of public information.” Requires new contract clause. SB 1681 (Zaffirini) – More CAT changes.

HB 194 (Farias) Adds “veterans who have suffered a 20-percent service-connected disability” to the definition of “economically disadvantaged person”, thus making them eligible for HUB status. Requires Comptroller to adopt rules to incorporate the SDVs into the HUB program, and adopt goals that are separate from the traditional HUB groups’ goals. Effective 9/1/13.

HB 535 (Davis, Yvonne) Added to the standard preference in the word “manufactured” in addition to “produced” and “grown” in Texas. Governor vetoed the bill. Veto statement said it was unnecessary and “did not change current law.”

HB 586 (Workman) Waives the state’s sovereign immunity for contracts involving engineering, architectural, or construction services or for materials related to those, where amount in dispute is $250K or more. Limits damage awards (somewhat). Allows for attorneys fees, BUT only if those fees are available to either party under the contract. Venue in the county “where the claim occurred” or the county where the state agency is headquartered.

HB 1965 (Harper-Brown) CAT review threshold changed to $10MM, versus 1. CAT to develop “risk assessment matrix” for use by state agencies. New requirement that “state agency shall... comply with a recommendation made” by CAT or “submit a written explanation regarding why the recommendation is not applicable to the contract under review.” Adds three new CAT members – HHSC, TFC and “a small state agency” (<100 employees). Makes the AG’s office the “legal advisor” to the CAT.

HB 1726 (Bohac) Odd bill relating to “shipping coordination services.” Originally required CPA to do a contract, final amendment was “may” contract for such services. Amended version also written as a “realized savings” contract.

HB 2472 (Cook) The DIR and TPASS Sunset bills. We passed – so we still exist/stay at CPA. Next review at New subchapter O of DIR statute on “Major Outsourced Contracts” – require Board approval/oversight, management plans and customer involvement. Additional new subchapter on contracting conflict of interest standards at DIR, and contract management. Requires DIR and CPA “procurement coordination committee” to work out issues between the two. New dates for submission of HUB reports.*

HB 2873 (Harper-Brown) Requires CAT to include the model contract management process” into the CMG. Also requires CAT to “identify the types of procurements that pose a low risk of loss to the state and develop a model contract management process for use with those procurements.” Latter concept could be coordinated with the “risk matrix” concept from HB 1965.

HB 3116 (Cook) Very little bill, but major effect. Makes the TXSmartBuy system a part of the “Enterprise Resource Planning” system definition in Gov’t Code Chapter Has the effect of giving CPA control over the collection and expenditure of the SmartBuy fee, thus allowing us to fund and procure our own system (not go through DIR’s TexasOnline/Texas.Gov contracts).

HB 3648 (Harper-Brown) Governs “material changes to contracts” – defined as extending contract performance by six months or more, or increasing amount paid under the contract by 10% or more. Requires that all material changes must be decided by the “governing body” of the agency in a “meeting.” Requires that performance of contracts “must substantially comply with the terms contained in the written solicitation for the contract and the terms considered in awarding the contract” (??)

SB 1 (Williams) You’ve heard of this one, it’s called... THE BUDGET Everyone gets a 1% raise, then 2% next year ( and there was much rejoicing... Yay!!! ) The budget also contains a couple of riders in the CPA budget (17 and 18) that require state agencies to perform specific assessments of their HUB programs and “compliance” demonstrations. Look at this language!!

SB 59 (Nelson) The biennial standard “report cleanup bill.” Repeals the “recycled products report” in Gov’t Code (c). Also repeals the “destination” of the HUB annual and semi-annual reports (Governor, Lt. Governor, certain committees). Note – this differs from HB 2472, which just changed the dates!

SB 1368 (Davis) Amends the Public Information Act (PIA), including adding some contracting language. All contracts must be drafted “in consideration of” the PIA. Also must have a clause that specifies that all information created pursuant to the contract must be “available in a specific format that is... agreed upon in the contract; and accessible by the public.” Cannot be waived by contract. All PIA requests for contracts must go to agency PIA officer. Also amends PIA to clarify that all public info is subject to the Act regardless of what (or whose) device it is on.

SB 1681 (Zaffirini) Another CAT bill. Requires CPA to come up with rules to exclude “small or routine” contracts from CAT. Requires training for certified contract managers. (9/1/15) Mandatory contract management training for agency governing bodies. (CPA - 5/1/14, agencies – 9/1/15) CPA must come up with standard language for agencies to use for contractor performance and conflict of interest, and forms for “contract process” and VPTS. (5/1/14) CPA “may” develop standard contract terms that will apply to “important types of state contracts.”