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Purchasing Statutes of Special Interest to Counties

December 1, 2018 by County Progress

By Narita Holmes
Government Procurement and Compliance Consultant
Former Ector County Purchasing Agent

With the next legislative session only a few months away, we can expect to see further changes in laws impacting procurement which will require careful attention to detail.

During the 85th Legislative Session in 2017, several laws passed that require special wording be included in specifications to keep the county in compliance with purchasing statutes.

  • B. 9 – established the Texas Cybercrime Act and created a third degree felony for a person who intentionally interrupts or suspends access to a computer system or network without consent of the entity or intentionally alters data, introduces ransomware, or decrypts encrypted private data.
  • B. 89 – prohibits contracts with a company for goods or services unless the contract contains written verification from the company that it (1) does not boycott Israel, and (2) will not boycott Israel during the term of the contract. The Office of the Texas Comptroller (comptroller) has published a list of companies that boycott Israel, and this list should be checked before the awarding of a contract to a vendor.
  • B. 1571 – requires governments to include the estimated amount of avoided expected future operating and maintenance costs when evaluating energy savings, along with all other pertinent costs when entering into an energy savings contract.
  • B. 3223 – makes a political entity liable for damages caused by use of a vehicle used during a crime and requires a $1,000 penalty payment to the state if the entity violates the requirement to remove any equipment and insignia from the vehicle before selling or transferring the marked law enforcement vehicle.
  • B. 252 – Provides that governmental entities may not enter into a contract with a company that does business with Iran, Sudan, or a foreign terrorist organization, as indicated on a list prepared by the comptroller. See the statute, Chapter 2252, Government Code, for exceptions.
  • B. 255 – changes the Vendor Disclosure Form 1295. See related story for specifics.
  • SB 622 – provides that the proposed budget of a political subdivision for a fiscal year beginning on or after Jan. 1, 2018, must include a line item indicating expenditures for required newspaper notices that allows comparison between budgeted and actual expenditures.
  • B. 1289 – Requires that construction projects in which iron or steel must be used must include a requirement that any iron or steel product used in the project must be produced in the United States, unless the total cost of the project will increase by more than 20 percent or complying with the requirement is not in the public interest. A number of other requirements are included in the law. Purchasing professionals are reporting rising bid costs as a result of this law. Any variance from the law should be made only after consulting with legal counsel and careful documentation. *

Filed Under: County Purchasing, Feature Story Tagged With: commissioners court, Compliance Consultant, County Purchasing Act, Disclosure of Interested Parties, Do’s and Don’ts, Government Procurement, governmental entities, Legislative Session, Procurement, Purchasing, Texas Ethics Commission

Disclosure of Interested Parties by Persons Contracting with Governmental Entities

November 13, 2017 by County Progress

Government Code 2252, 84th and 85th Legislative Sessions

 

By Narita Holmes

Government Procurement and Compliance Consultant

Former Ector County Purchasing Agent

During the 84th Legislative Session (2015), despite concerns expressed by local government officials and procurement professionals, House Bill 1295 was passed and signed into law. The bill added Section 2252.908 to the Government Code.

  • A governmental entity may not enter into a contract that requires a vote by the governing body of the entity before the contract may be signed or that has a value of at least $1 million with a business entity unless the business entity submits a disclosure of interested parties to the governmental entity at the time the entity submits the signed contract to the governmental entity.
  • The disclosure must be submitted on a form prescribed by the Texas Ethics Commission. The form must include a list of each interested party for the contract of which the contracting entity is aware and the signature of the authorized agent of the contracting business entity, acknowledging that the disclosure is made under oath and under penalty of perjury.
  • Not later than the 30th day after the governmental entity receives a disclosure of interested parties, the entity shall submit a copy of the disclosure to the Texas Ethics Commission.
  • The Texas Ethics Commission was required to adopt rules to implement the law, determine the form, and post a copy of the form on the commission’s website.

Because most contracts that counties sign require Commissioners Court approval prior to execution, this law applies to most contracts entered into by the county. The Texas Ethics Commission implemented rules and designed an online form to be used for compliance with this statute.

“Interested parties” is defined as a person who has a controlling interest in a business entity with whom the county contracts, or who actively participates in facilitating the contract or negotiating the terms of the contract. This includes a broker, intermediary, adviser or attorney for the business entity who receives compensation from the business entity, communicates directly with the governmental entity on behalf of the business regarding the contract, and is not an employee of the business.

In order to comply with this law, counties started including instructions for their vendors in bid and RFP specifications that require the vendors to go to the Texas Ethics Commission website to complete Form 1295 electronically and print, sign, notarize and submit the form with their submittals, even if no interested parties exist. The governmental entity must acknowledge receipt of the filed Form 1295 by notifying the Texas Ethics Commission of the receipt. The Texas Ethics Commission posts the completed Form 1295 on its website within seven business days after receiving notification from the county.

In the 85th Legislative Session (2017), in Senate Bill 255, changes in Vendor Disclosure Form 1295 were made as follows:

  • Contracts with a publicly traded business entity and electric and gas utilities are exempted.
  • Form 1295 must include a written, unsworn declaration by the authorized agent of the contracting business entity. (Removes the requirement for the document to be notarized.)
  • These changes apply to a contract entered into or amended on or after 1/1/18.

In order to ensure compliance with this disclosure requirement, elected officials should check to be sure that bid and RFP specifications have been updated for these requirements and that the proper disclosures are being made and submitted to the State of Texas.

Filed Under: Feature Story, Funding Tagged With: Feature, featured, Purchasing

Procurement and the 85th Texas Legislative Session

November 6, 2017 by County Progress

By Narita Holmes

Government Procurement and Compliance Consultant

Former Ector County Purchasing Agent

As we review the actions completed by the 85th Texas Legislature, there are several bills of note for Texas counties. Some of these will impact the specifications for related products or services.

(H.B. = House Bill; S.B.= Senate Bill) 

H.B. 89 – Prohibits contracts with a company for goods or services unless the contract contains written verification from the company that it (1) does not boycott Israel and (2) will not boycott Israel during the term on the contract. 

H.B. 1571 – Requires governments to include the estimated amount of avoided expected future operating and maintenance costs in evaluation of energy savings, along with all other pertinent costs, for energy-saving contracts. 

H.B. 3021 – Provides that, in relation to indemnification of duties of architects and engineers, nothing prohibits a governmental entity in a contract for engineering and architectural services from including and enforcing conditions that relate to the scope, fees and schedule of a project in that contract. 

H.B. 3223 – Makes a political entity liable for damages caused by use of a vehicle, previously owned by the entity, during a crime and requires payment of a $1,000 penalty to the state if the entity violates the requirement to remove any equipment and insignia from the vehicle before selling or transferring the marked law enforcement vehicle. 

S.B. 252 – Provides that governmental entities may not enter into a contract with a company that does business with Iran, Sudan, or a foreign terrorist organization, as indicated on a list prepared by the comptroller. See the statute, Chapter 2252, Government Code, for exceptions. 

S.B. 255 – Amends vendor Form 1295 disclosure requirements by exempting contracts with publicly traded business entities and electric and gas utilities, and removes the requirement that Form 1295 must be notarized. 

S.B. 533 – Changes the Design Build section of Construction Statutes to define the time frame for proposed responses. This applies to contracts on or after 9/1/17 for which a solicitation response was submitted after 6/21/17. 

S.B. 807 – Adds construction contracts to the types of contracts where venue and choice of law would be restricted to Texas in the case of conflict resolution and/or litigation. 

S.B. 622 – Provides that the proposed budget of a political subdivision for a fiscal year beginning on or after 1/1/18 must include a line item indicating expenditures for required newspaper notices that allows comparison between budgeted and actual expenditures.

– Narita Holmes served many years as purchasing agent for Ector County. Currently she is associated with N&C Consulting Services, which provides government procurement and compliance consulting services. She is also a lecturer in accountancy at The University of Texas of the Permian Basin. She stays current on the purchasing laws for counties and provides training for county officials.

 

Filed Under: Feature Story, Funding Tagged With: Feature, featured, Purchasing

Am I Seeing Double? Part Two of a Two-Part Series

June 1, 2013 by Christi Stark

Texas Government Code Chapter 2267… and 2267

By Narita Holmes

Former Ector County Purchasing Agent

No!  There really are two Chapter 2267 sections in the Texas Government Code that have an impact on counties.  During the Regular Session of the 82nd Legislature in 2011, two separate bills were passed with the same chapter number in the Government Code.  Both sections deal with construction, and both apply to counties.  The first section governs construction methods for counties that were previously located in the Local Government Code, Chapter 271.  The new law, which was summarized in the May issue of County Progress, is located in the Government Code, the first Chapter 2267.  The second Chapter 2267 deals with public/private partnerships for qualifying facilities and infrastructure.

The focus of this article is on the second Government Code, Chapter 2267, public/private partnerships.  In the past, Texas and other states have enacted legislation to address public/private transactions in areas such as transportation and corrections projects.  In 2011, the Texas Legislature introduced legislation to provide structure and clear authority for public projects in conjunction with private investment that could decrease the financial burden of repairing existing infrastructure and could satisfy the demand for new infrastructure as the state’s population continues to grow.  In fact, the Texas Capitol building (1882) and Dallas Cowboys Stadium (2009) utilized such methods.

This section of the law, which went into effect on Sept. 1, 2011, amended the Government Code to create the authority and processes for public/private agreements for development of qualifying public works projects.  Specifically, the method was established to satisfy a public need which may not be wholly satisfied by existing methods of procurement and available resources.  The intent was to make qualifying projects available in a more timely and less costly fashion.

Qualifying Public Works Projects are defined in the Definitions section {Government Code Chapter 2267.001 (10)}.  Some of the qualifying projects include: mass transit facilities, port facilities, water supply facilities, public works, recreational facilities, public buildings, and other similar facilities currently available or to be made available to a governmental entity for public use.  These projects include any structure, parking area, appurtenance, and other property required to operate the structure, including technology infrastructure that is essential to the project’s purpose.  Qualifying projects also include improvements necessary or desirable to unimproved real estate owned by a governmental entity.  The provisions do NOT apply to state highway system projects or telecommunications infrastructure other than technology installed as part of a qualifying project.

Specific Implementation Requirements:  If your county believes that it may implement a public-private qualifying public works project in the future, you will want to plan ahead in order to have a smooth implementation process.

Approval Required.  This chapter describes the approval process for a qualifying project.  The process may be initiated by a person submitting a proposal or by the responsible governmental entity requesting proposals or bids following very specific procedures established in the law.

Guidelines MUST be adopted by the governmental entity to enable compliance with this law.   The guidelines must be reasonable, encourage competition, and guide the selection of projects.  Very specific procedures are described that MUST and MAY be included in the guidelines.

Specific Items MUST be included with a proposal.  The law describes 10 requirements including a topographic map, description of the project, method of financing, and schedule for initiation and completion.

Proposal Evaluation Factors that SHALL and MAY be considered when evaluating the proposals received are described in the law.

Before negotiation of an interim or comprehensive agreement, the responsible governmental entity MUST submit copies of the proposals to the Partnership Advisory Commission which is established in Government Code Chapter 2268.

Affected Jurisdictions (any county or municipality in which all or a portion of a qualifying project is located) must be notified following specific guidelines.  A comment period is required.

Posting Requirements.  Very specific public notice requirements are listed, and a public hearing is required.

Other Provisions of the law cover topics such as dedication and conveyance of public property; powers and duties of contracting persons; specific provisions that SHALL be included in a comprehensive agreement for the project; interim agreements that may be implemented; bond requirements; and other issues.

 

Procurement Guidelines are set forth in the law.  However, they refer to many sections of the law that were repealed by the first Government Code 2267.  It is anticipated that some of the conflicts between the two sections of the code will be corrected in the current legislative session.  Stay tuned for additional changes that may occur as the dust settles from this legislative session.

Narita Holmes served many years as purchasing agent for Ector County.  She is currently associated with N&C Consulting Services, which provides government procurement and compliance consulting services.  She is also a lecturer in accountancy at The University of Texas of the Permian Basin.  Holmes stays current on the purchasing laws for counties and provides training for county officials. H

Filed Under: Legislature Tagged With: 2267, Government Code, legislature, Purchasing

Am I Seeing Double?? Texas Government Code Chapter 2267… and 2267

April 26, 2013 by Christi Stark

By Narita Holmes,Former Ector County Purchasing Agent

Are you seeing double? No! There really are two Chapter 2267 sections in the Texas Government Code that have an impact on counties.  During the Regular Session of the 82nd Texas Legislature in 2011, two separate bills were passed with the same chapter number in the Government Code.  Both sections deal with construction, and both apply to counties.

The first section repealed the law that previously governed construction methods for counties that was located in the Local Government Code, Chapter 271.  The new law is located in the Government Code, the first Chapter 2267.  When the move of the law was made, previous county law was combined with laws that applied to other governmental entities, and wording and order were changed from what we were accustomed to finding in our old law.  For construction projects started after Sept. 1, 2011, the new wording applies.  Counties should be careful on any new projects bid after that date to ensure that your specifications comply with the new (first) Government Code, Chapter 2267.  Use of wording in old specifications developed prior to the change could leave you out of compliance with the new law. The second Chapter 2267 deals with public/private partnerships for qualifying facilities and infrastructure.

Next month, we’ll examine the second Government Code, Chapter 2267. The focus of this article is on the first Government Code, Chapter 2267.This new law repealed Subchapters H and J, Chapter 271 in the Local Government Code, which provided counties options for various methods of acquiring construction services.  At first glance, it appears that the law was just moved to a new location.  However, a careful comparison reveals changes that will impact specifications for construction projects started after Sept. 1, 2011.  A few of these changes are summarized below (CAPS added for emphasis).  This is not a complete list of changes.

Purchasing_05-13_1

 

Purchasing_05-13_2

Filed Under: Legislature Tagged With: Purchasing, Texas Government Code

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