Fiscal Notes
Estimated Two-year Net Impact to General Revenue Related Funds for HB3241, Committee Report 1st House, Substituted: a negative impact of ($4,950,000) through the biennium ending August 31, 2017.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Bill Analysis
HB 3241 would amend the Government Code to require the State Auditor's Office to consider auditing contracts entered by the Health and Human Services Commission that exceed $100 million in annual value.
The bill would require the Comptroller of Public Accounts (CPA), in cooperation with the Governor's budget and policy staff, to conduct a study examining the feasibility and practicality of consolidating state purchasing functions and reducing the number of vendors authorized to contract with the state.
The bill would amend the Government Code to specify that purchasing information reported by state agencies in the statewide uniform accounting system should include solicitation and contracting information, as defined by CPA.
The bill would require agencies to submit a certain number of requests for pricing on purchases made through multiple award contract schedules at CPA and the Department of Information Resources (DIR) depending on the value of the goods, services, and contracts. Agencies would also be required to receive approval for statements of work on DIR information technology commodity contracts worth more than $50,000.
The bill would require agencies and institutions of higher education to comply with certain reporting requirements for each contract with a value exceeding $1 million, and to comply with certain additional requirements for each contract with a value exceeding $5 million. Agencies and institutions of higher education would be required to develop a risk analysis procedure and identify certain types of contracts for enhanced contract or performance monitoring. The bill would also require agencies and institutions of higher education, including the Texas Department of Transportation (TxDOT), to post online a list of the contracts the entities have entered along with the statutory authorities and request for proposals associated with the procurements.
The bill would require institutions of higher education to participate in the training and certification process offered by CPA to state agencies.
The bill would expand the membership of the Contract Advisory Team (CAT) from six members to nine, with one additional member each from the Texas Department of Transportation, the Texas Education Agency, and the Texas Commission on Environmental Quality; and require the team to submit a quarterly report to the Legislative Budget Board on the number of solicitation documents and contracts reviewed in the previous quarter. Agencies would be required to submit contract changes that result in a change in value of 20 percent or more for review by the CAT on contracts that were previously reviewed by CAT.
The bill would amend the Education Code to make the procurement authority of institution of higher education contingent on implementation of policies and procedures described in the bill. If the state auditor determines that an institution of higher education has failed to adopt the required rules and policies, the auditor will adopt a remediation plan in consultation with the institution. If the auditor finds that the institution fails to comply with the remediation plan, the purchasing authority of the institution would subject to standard agency procurement oversight and procedures.
The bill would create a Class A misdemeanor for the employment of former state employees and officers within the first two years after state employment if those employees participated in a procurement related to the hiring entity.
Vote Recommendation Notes
HB 3241 makes an effort to create more accountability and transparency in state agency contracting by requiring a more competitive bidding process, more transparency, and different procedures to identify contracts with risks, during and after the completion of a contract.
These measures have the potential to restrain government growth and government waste by requiring state agencies to be more careful in the way they handle contracts, to prevent conflicts of interest, and to more systematically look for the less costly option for taxpayers.
The provision barring state employees from taking employment with a state and vendor and vice versa for two years following the departure from their position is a healthy, commonsense provision. This helps to secure against potential for corruption and sweetheart deal-making in the contract award process. Still, setting the offense at Class A misdemeanor (which may land a person in jail for up to a year) may not be the right starting point for this offense. The bill would be better if amended to either lower the offense to a Class C or Class B misdemeanor or add language to elevate the threshold for prosecution so that to secure a conviction the prosecutor would have to demonstrate that the defendant knowingly violated the statute.
Ultimately, the measures this bill would implement to protect taxpayers from overpaying for services and to prevent corruption in government are strongly in alignment with the principle of limited government. We support HB 3241.
