84(R) - 2015
Vote Yes; Amend
Relating to state agency contracting; creating an offense.
A fiscal note dated March 25, 2015 estimates a negative two-year net impact to General Revenue Related Funds of $2,350,000 for Senate Bill 20, Committee Report 1st House, Substituted.
The fiscal note indicates that out of the $2,350,000 negative impact, $1.6 million would come from the additional administrative costs from the CPA to hire 8 FTEs during the 2016-17 biennium for legal support for new procurements, ensuring compliance with procurement requirements,and conducting additional reviews of contract amendments for contracts subject to CAT review.
Senate Bill 20 would amend the Government and the Education codes to establish several new procedures and rules governing state agency contracting.
It would add several purchasing rules to look for the lower-cost options, asking pricing from more vendors on a schedule developed by the Department of Information Resources or the Comptroller of Public Accounts with the increase in value of a multiple award contract and depending on the object of the contract. It would set a limit in the value of a contract, limit above which a traditional RFP process would be necessary. It would also add audit and risk analysis procedures, and require that all contracts and solicitations linked to contracts be retained, as well as contracts be posted online. It would also create a vendor review and performance tracking system that could be used by agencies to help them decide whether to award a contract to a particular vendor.
Senate Bill 20 would establish procedures aimed at avoiding conflicts of interest or commitment. State agencies would not be able to hire former or retired employees of private vendors for functions related to contracts between the agency and their former employer before two years after the end of their contract with their former employer. Senate Bill 20 would also prevent former state officers or employees from accepting employment with a private vendor before 2 years after the last date of employment with the state agency if they participated on behalf of the state agency in procurement or contract negotiation involving this private vendor. Violating this provision would constitute a Class A misdemeanor offense.
Senate Bill 20 would also add 3 members to the Contract Advisory Team (CAT). Agencies would be required to submit to CAT and give justifications for contracts with a change equal to more than 20 percent of the value of the initial contract. The Contract Advisory Team would have to submit a quarterly report to the Legislative Budget Board.
Senate Bill 20 would amend Government code to require that the State Auditor consider the performance of contracts entered into by the Health and Human Services Commission and that exceed $100 million in annual value.
Additionally, it would would require that the Comptroller, in coordination with the governor's budget and policy staff conduct a study on the feasibility and practicality of consolidating the state purchasing functions into fewer if not a single agency.
Vote Recommendation Notes
Senate Bill 20 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 SB 20.