Senate Passes Contracting Reform Legislation

March 31, 2015

The Texas Senate today unanimously passed SB 20 by Senator Jane Nelson to reform state contracting practices to ensure it is transparent, accountable and competitive.

"We have a responsibility to the Texans who rely on state services to ensure contracts that deliver those services are awarded fairly and transparently to the organization that can best meet our needs," said Senator Nelson. "Ethical contracting is a critical component to producing a responsible budget, and to ensuring taxpayer money is spent in accordance with the high standards our citizens deserve."

SB 20:

  • Reforms cooperative contracting by: prohibiting cooperative contracts for purchases over $1 million, requiring agencies to submit price requests to a minimum number of vendors, and requiring agencies to develop written statements of work to ensure that a cooperative contract is appropriate for a particular project;
  • Requires an agency board, for any contract over $1 million, to approve the  contract, the agency head to sign it, and the agency to develop reporting requirements to provide information on compliance with financial provisions, corrective action plans, and any liquidated damages; 
  • Requires the procurement officer, for any contract over $5 million, to verify in writing that the solicitation and purchasing methods and contractor selection process comply with state law and agency policy and submit to the board any potential issue that may arise in the solicitation or procurement;
  • Prohibits conflicts of interest and freezes the revolving door between agencies and vendors;
  • Requires agencies to develop risk based analysis to identify potential waste, fraud, or abuse in contracting;
  • Requires agencies to report their contracts to a central database and evaluate vendor performance though the Comptroller's Office;
  • Requires agencies to post on their websites any contract non-competitively bid along with statutory justification;
  • Requires agencies to retain contract related documents for 4 years after the contract is completed;
  • Adds the Texas Department of Transportation, Texas Commission on Environmental Quality, and Texas Education Agency to the Contract Advisory Team and requires the team to issue quarterly reports to the Legislative Budget Board; and
  • Creates a new oversight mechanism for contracting at our institutions of higher education.

The bill now moves to the Texas House of Representatives for further consideration.