TITLE 37.PUBLIC SAFETY AND CORRECTIONS

Part 3. TEXAS YOUTH COMMISSION

Chapter 81. INTERACTION WITH THE PUBLIC

37 TAC §81.79

(Editor's note: The text of the following section proposed for repeal will not be published. The section may be examined in the offices of the Texas Youth Commission or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The Texas Youth Commission (TYC) proposes the repeal of §81.79, concerning Historically Underutilized Business Participation. The repeal of the section will allow the agency to publish one specific chapter relating to contracts.

Don McCullough, Assistant Deputy Executive Director for Financial Support, has determined that for the first five-year period the repeal is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the repeal.

Mr. McCullough also has determined that for each year of the first five years the proposed repeal is in effect the public will benefit by being able to access all agency rules relating to the purchase of goods and services in one chapter. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the repeal as proposed. No private real property rights are affected by adoption of this repeal.

Comments on the proposal may be submitted within 30 days of the publication of this notice to DeAnna Lloyd, Policy Coordinator, Texas Youth Commission, 4900 North Lamar, P.O. Box 4260, Austin, Texas 78765, or e-mail to deanna.lloyd@tyc.state.tx.us.

The repeal is proposed under the Human Resources Code, §61.034, which provides the Texas Youth Commission with the authority to develop rules appropriate to the proper accomplishment of its functions.

The proposed repeal implements the Human Resources Code, §61.034.

§81.79.Historically Underutilized Business Participation.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 7, 2004.

TRD-200403136

Dwight Harris

Executive Director

Texas Youth Commission

Earliest possible date of adoption: June 20, 2004

For further information, please call: (512) 424-6301


Chapter 83. PURCHASING YOUTH SERVICES

37 TAC §§83.1, 83.3, 83.21, 83.23, 83.25, 83.27, 83.35, 83.37, 83.39, 83.47, 83.49

(Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Youth Commission or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The Texas Youth Commission (TYC) proposes the repeal of §§83.1, 83.3, 83.21, 83.23, 83.25, 83.27, 83.35, 83.37, 83.39, 83.47, and 83.49, regarding purchasing youth services. The repeal of the sections will allow the agency to publish one specific chapter relating to contracts.

Don McCullough, Assistant Deputy Executive Director for Financial Support, has determined that for the first five-year period the repeal is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the repeal.

Mr. McCullough also has determined that for each year of the first five years the proposed repeal is in effect the public will benefit by being able to access all agency rules relating to the purchase of goods and services in one chapter. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the repeal as proposed. No private real property rights are affected by adoption of this repeal.

Comments on the proposal may be submitted within 30 days of the publication of this notice to DeAnna Lloyd, Policy Coordinator, Texas Youth Commission, 4900 North Lamar, P.O. Box 4260, Austin, Texas 78765, or e-mail to deanna.lloyd@tyc.state.tx.us.

The repeal is proposed under the Human Resources Code, §61.034, which provides the Texas Youth Commission with the authority to develop rules appropriate to the proper accomplishment of its functions.

The proposed repeal implements the Human Resources Code, §61.034.

§83.1.Contracts for Parole Supervision Service.

§83.3.Contracts for Airport Assistance Service.

§83.21.Purchasing Youth Services.

§83.23.Rate Setting for Youth Service Contracts.

§83.25.Request for Proposal.

§83.27.Start-Up Funds.

§83.35.Quality Assurance of Contract Programs.

§83.37.Variance/Waiver Requests.

§83.39.Problem Solving Mechanism.

§83.47.Private Sector Involvement.

§83.49.Admission and Referral to Residential Contract Programs.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 12, 2004.

TRD-200403219

Dwight Harris

Executive Director

Texas Youth Commission

Earliest possible date of adoption: June 20, 2004

For further information, please call: (512) 424-6301


Chapter 95. YOUTH DISCIPLINE

Subchapter B. DUE PROCESS HEARINGS PROCEDURES

37 TAC §95.55

The Texas Youth Commission (TYC) proposes an amendment to §95.55, concerning Level II Hearing Procedure. The amendment to the section will allow the youth the opportunity to choose an advocate. The youth's choice shall be honored unless there is a showing of unavailability for any reason. If the youth makes no choice, or their first choice is unavailable for any reason, the hearing manager shall appoint the advocate. If the youth is excluded from the hearing for behavioral reasons, the advocate shall be present during the testimony and shall have the opportunity to question the witness. Witness may testify by telephone or videoconference if in-person testimony is impractical or unfeasible. If testimony is provided by phone, person required to be present at the hearing must be able to simultaneously hear the testimony. Youth will also be given the hearing packet at least 24 hours in advance of the hearing. Other amendments to this rule are clarification changes or updating policy to accurately reflect agency current practice.

Don McCullough, Assistant Deputy Executive Director for Financial Support, has determined that for the first five-year period the section is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the section.

Mr. McCullough also has determined that for each year of the first five years the section is in effect the public benefit anticipated as a result of enforcing the section will provide a youth the opportunity to request a specific person to assistance them in preparing a defense due to complexity of issues and the availability of accurate, clear, and updated TYC policies. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the section as proposed. No private real property rights are affected by adoption of this rule.

Comments on the proposal may be submitted within 30 days of the publication of this notice to DeAnna Lloyd, Policy Coordinator, Texas Youth Commission, 4900 North Lamar, P.O. Box 4260, Austin, Texas 78765, or email to deanna.lloyd@tyc.state.tx.us.

The amendment is proposed under the Human Resources Code, §61.075, which provides the Texas Youth Commission with the authority to best serve the youth's welfare and the protection of the public.

The proposed rule affects the Human Resources Code, §61.034.

§95.55.Level II Hearing Procedures.

(a) Purpose. The purpose of this rule is to establish a procedure to be followed when the second highest level of due process is afforded a youth. The level II hearing procedure is appropriate due process in the following instances:

(1) disciplinary transfer;

(2) disciplinary extension in length of stay;

(3) demotion of one or more phases in the behavior area;

(4) [ (3) ] admission to a behavior management program (BMP);

(5) [ (4) ] admission to the aggression management program (AMP);

(6) [ (5) ] with a few exceptions in procedure:

(A) admission to the Corsicana Stabilization Unit, Corsicana Residential Treatment Center; and

(B) extension of time to treat a psychiatric disorder in connection with a Corsicana Stabilization Unit placement at the Corsicana Residential Treatment Center (as appropriate).

(b)-(c) (No change.)

(d) Procedure.

(1) The designated primary service worker (PSW) or the administrative duty officer (ADO) shall request permission to schedule a hearing from the appropriate supervisor, institutional superintendent, halfway house superintendent, parole supervisor, or quality assurance administrator. The hearing must be scheduled as soon as practical but not later than seven (7) days, excluding weekends and holidays, after the alleged violation. A delay of more than seven (7) days in scheduling the hearing must be justified by documentation of circumstances[ , ] which made it impossible, impractical, or inappropriate to schedule the hearing.

(2) Failure to document circumstances making it impossible, impractical, or inappropriate to schedule the hearing may result in a dismissal or reversal of the decision of the hearing manager.

(3) If the youth is admitted to Institution Detention Program (IDP) pending a Level II hearing [ level II ], the hearing shall be conducted within ten (10) days from date of admission to detention. A delay of more than ten (10) days in conducting the hearing must be justified by documentation of circumstances[ , ] which made it impossible, impractical, or inappropriate to conduct the hearing earlier.

(4) The appropriate supervisor, institutional superintendent, halfway house superintendent, parole supervisor, or quality assurance administrator will appoint an impartial staff member to act as hearing manager.

(5) The hearing manager shall be a Texas Youth Commission (TYC) staff member who is trained to function as a hearing manager.

(A) If the youth is currently assigned to an institution, the hearing manager shall be someone not directly responsible for supervising the youth

(B) If the youth is currently assigned to a halfway house, the hearing manager shall not be a member of the halfway house staff.

(C) If the youth is currently assigned to a contract program, the hearing manager shall not be the TYC quality assurance specialist assigned to that youth.

(D) If the youth is currently assigned to his/her home, the hearing manager shall not be the parole officer assigned to the youth's case or the quality assurance specialist who works directly with the youth's supervising officer .

(6)-(8) (No change.)

(9) All youth in TYC facilities and secure contract placements shall be given the hearing packet (all written materials relied upon and a list of witnesses) at least 24 hours in advance of the hearing. The paperwork may be taken away from youth in institutional detention program if the youth is misusing the papers in any way.

(10) [ (9) ] Reasonable efforts shall be made to inform the youth's parent(s) of the time and place of the hearing not less than 24 hours prior to the hearing.

(11) [ (10) ] The hearing shall consist of two parts: fact-finding and disposition, and shall be held where the youth resides unless the hearing manager determines that some other site is more appropriate. During the fact-finding portion of the hearing, only evidence concerning the alleged misconduct may be considered; the youth's prior behavior shall not be considered unless disposition is reached.

(12) [ (11) ] The youth shall be assisted by an informed and responsible advocate . The youth shall be given the opportunity to choose an advocate. The youth's choice shall be honored unless there is a showing of unavailability for any reason. If the youth makes no choice, or their first choice is unavailable for any reason, the hearing manager shall appoint the advocate [ appointed by the hearing manager ]. In cases where the youth is not proficient in the English language, the appointed advocate shall be proficient in English as well as the primary language of the youth or an interpreter shall be used.

(13) [ (12) ] The hearing shall be tape-recorded and the recording shall be the official record of the hearing. The tape-recording and the hearing packet shall be preserved for six (6) months following the hearing.

(14) [ (13) ] The youth shall be present during the hearing unless he waives his presence or his behavior prevents the hearing from proceeding in an orderly and expeditious fashion.

(A) A waiver of the youth's presence shall be in writing and signed by the youth and his advocate. If the youth does not sign the waiver for any reason, his presence is not waived.

(B) If the youth waives his presence, the hearing may be conducted by teleconference.

(C) If a youth is excluded for behavioral reasons, or to secure the testimony of a witness, those reasons shall be documented in the hearing record. The advocate shall be present during the testimony and shall have the opportunity to question the witness.

(D) A true plea cannot be entered on behalf of a youth who has waived his presence at the hearing.

(15) [ (14) ] A victim who appears as a witness should be provided a waiting area where he is not likely to come in contact with the youth except during the hearing.

(16) [ (15) ] Witnesses shall take an oath prior to testifying. Witnesses may testify by telephone or videoconference if in-person testimony is impractical or unfeasible. If testimony is provided by phone, persons required to be present at the hearing must be able to simultaneously hear the testimony.

(17) [ (16) ] The hearing manager, PSW, and advocate may question each witness in turn. The PSW and advocate may offer summation statements.

(18) [ (17) ] To protect the confidential nature of the hearing, persons other than the youth, the youth's advocate, staff representative, and the youth's parent(s) may be excluded from the hearing room at the discretion of the hearings manager ; [ , ] however , any person except the youth's advocate may be excluded from the hearing room if his/her [ their ] presence causes undue disruption or delay of the hearing. The reason(s) for the exclusions are stated on the record.

(19) [ (18) ] With the exception of the youth, any person designated as a witness may be excluded from the hearing room during the testimony of other witnesses and may be instructed to refrain from discussing his/her testimony with anyone until all the witnesses have been dismissed.

(20) [ (19) ] The hearings manager may permit a witness to testify outside the presence of the youth if such appears reasonable and necessary to secure the testimony of the witness. If the youth is excluded from the hearing room during testimony, the advocate for the youth shall be present during the testimony and shall have the opportunity to review the testimony with the youth before questioning the witness.

(21) [ (20) ] The youth shall not be called as a witness unless, after consulting with the advocate, he/she waives his right to remain silent on the record. Neither the hearing manager nor [ or ] the PSW may question the youth unless he/she waives the right to remain silent.

(A) The youth's failure to testify shall not create a presumption against him.

(B) A youth who waives his right to remain silent may only be questioned concerning those issues addressed by his testimony.

(22) [ (21) ] All credible evidence may be considered, irrespective of its form.

(23) [ (22) ] The standard of proof for all disputed issues is a preponderance of the evidence.

(24) [ (23) ] The hearings manager may[ , for good cause, ]recess or continue the hearing for such period(s) of time as may be necessary to insure an informed and accurate fact-finding or to secure evidence the hearing manger determines may be relevant .

(25) [ (24) ] The hearing manager will announce his findings of fact.

(26) [ (25) ] If there is a finding of true, the hearing manager shall proceed to disposition and provide the youth an opportunity to present extenuating circumstances. If no extenuation is found, the hearing manager shall order the disposition recommended by the staff representative unless the hearing manager finds extenuating circumstances.

[ (A) A hearing manager's decision that a youth be transferred is final. ]

(A) [ (B) ] A hearing manager's decision to assign a disciplinary minimum length of stay (with or without a transfer) is final subject to approval by the appropriate director of juvenile corrections or designee. [ If, subsequent to the assignment of a disciplinary minimum length of stay, the appropriate director of juvenile corrections disapproves the assignment, neither the assignment nor a transfer may then occur. ]

(B) [ (C) ] A hearing manager's decision that a youth will be transferred , demoted one or more phases, and/or admitted to [ and/or an assigned a length of stay in ]a disciplinary segregation program is final subject to an appeal by the youth.

(C) If extenuation circumstances are found incident to the violation(s) proved at a Level II hearing, the youth shall not be assigned a disciplinary length of stay. However, if more than one disposition option was requested (with appropriate and specific notice to the youth), such dispositions may be assessed if the hearing manager determine that such dispositions are appropriate despite the finding of extenuation.

(27) [ (26) ] The hearing manager shall prepare the Hearing Manager's Report of a Level II Hearing form, CCF-170, of his findings which includes grounds for the hearing , [ and ] evidence relied upon , and the decision.

(28) [ (27) ] The youth is informed of his/her right to appeal to the executive director at the close of the hearing. The pendency of an appeal shall not preclude implementation of the hearing manager's dispositional decision.

(29) [ (28) ] A copy of the report (CCF-170) is given to the youth immediately following the close of the hearing.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 10, 2004.

TRD-200403140

Dwight Harris

Executive Director

Texas Youth Commission

Earliest possible date of adoption: June 20, 2004

For further information, please call: (512) 424-6301


Chapter 111. CONTRACTING FOR SERVICES OTHER THAN YOUTH SERVICES

37 TAC §§111.1, 111.7, 111.9, 111.11, 111.13, 111.15, 111.17, 111.21, 111.25, 111.35, 111.45

(Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Youth Commission or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The Texas Youth Commission (TYC) proposes the repeal of §§111.1, 111.7, 111.9, 111.11, 111.13, 111.15, 111.17, 111.21, 111.25, 111.35, and 111.45, regarding contracting for services other than youth services. The repeal of the sections will allow the agency to publish one specific chapter relating to contracts.

Don McCullough, Assistant Deputy Executive Director for Financial Support, has determined that for the first five-year period the repeal is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the repeal.

Mr. McCullough also has determined that for each year of the first five years the proposed repeal is in effect the public will benefit by being able to access all agency rules relating to the purchase of goods and services in one chapter. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the repeal as proposed. No private real property rights are affected by adoption of this repeal.

Comments on the proposal may be submitted within 30 days of the publication of this notice to DeAnna Lloyd, Policy Coordinator, Texas Youth Commission, 4900 North Lamar, P.O. Box 4260, Austin, Texas 78765, or e-mail to deanna.lloyd@tyc.state.tx.us.

The repeal is proposed under the Human Resources Code, §61.034, which provides the Texas Youth Commission with the authority to develop rules appropriate to the proper accomplishment of its functions.

The proposed repeal implements the Human Resources Code, §61.034.

§111.1.Contracting for Services.

§111.7.Professional and Consultant Contracts.

§111.9.Architect and Engineer Contracts.

§111.11.Construction Contracts.

§111.13.Construction Contract Change Order Approval.

§111.15.Construction Project Operation Management Process and Resolution Forum.

§111.17.Historically Underutilized Business (HUBs).

§111.21.Training and Education Contracts.

§111.25.Student Intern Contracts.

§111.35.Contract Disputes and Protests.

§111.45.1st Choice--Recycled Content Products.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 12, 2004.

TRD-200403218

Dwight Harris

Executive Director

Texas Youth Commission

Earliest possible date of adoption: June 20, 2004

For further information, please call: (512) 424-6301


Chapter 111. CONTRACTS

The Texas Youth Commission (TYC) proposes new §§111.1, 111.7, 111.9, 111.11, 111.13, 111.15, 111.17, 111.31, 111.37, 111.39, 111.45, 111.49, 111.51, 111.57, 111.61, 111.73, 111.77, 111.81, and 111.87, relating to contracts. The agency's contract rules relating to purchasing youth services are being proposed as new rules under Chapter 111. Chapter 111 rules are also proposed as new rules due to the reorganization and consolidation of these rules. The reorganization and consolidation of Chapter 83 and Chapter 111 will allow the agency to have one designated Chapter for all rules relating to contracts.

Don McCullough, Assistant Deputy Executive Director for Financial Support, has determined that for the first five-year period the new sections are in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the sections.

Mr. McCullough also has determined that for each year of the first five years the new sections are in effect the public benefit anticipated as a result of enforcing the sections will allow access of all agency rules relating to the purchasing of goods and services in one Chapter. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the new sections as proposed. No private real property rights are affected by adoption of the new sections.

Comments on the proposal may be submitted within 30 days of the publication of this notice to DeAnna Lloyd, Policy Coordinator, Texas Youth Commission, 4900 North Lamar, P.O. Box 4260, Austin, Texas 78765, or e-mail to deanna.lloyd@tyc.state.tx.us.

Subchapter A. CONTRACTS FOR YOUTH SERVICES

37 TAC §§111.1, 111.7, 111.9, 111.11, 111.13, 111.15, 111.17

The new sections are proposed under the Human Resources Code, §61.034 and §61.037, which provides the Texas Youth Commission with the authority to develop rules appropriate to the proper accomplishment of its functions. The commission also has the authority to make reasonable efforts to ensure that the expenditure of appropriations for the purchase of contract residential care for youth be allocated to providers on a fixed monthly basis if it is cost-effective and the number, type, needs, and conditions of the youth to be served are reasonably constant.

The proposed new sections affect the Human Resources Code, §61.034.

§111.1.Purchasing Youth Services.

(a) Purpose. The purpose of this rule is to establish the basic requirements for purchasing youth services from residential and non-residential services providers. Texas Youth Commission (TYC) may purchase residential and non-residential care and treatment services to meet the needs of TYC youth.

(b) Applicability. This rule applies to all youth services that TYC purchases from public or private entities.

(c) Criteria for Purchasing Youth Services.

(1) Potential service providers will be identified through assessments or accordance to §111.9 of this title (relating to Request for Proposal). Criteria for determining the acceptability of providers include:

(A) agency needs and budget;

(B) service provider qualifications;

(C) past experience (if any) with the service provider;

(D) proposed cost;

(E) accessibility of services to TYC youth; and

(F) specific requirements for the desired services.

(2) The director of juvenile corrections will use the following criteria when determining which purchases of youth services require a contact:

(A) TYC's specifications for the services;

(B) professional qualifications;

(C) the use of the service; and

(D) other criteria as appropriate for the particular purchase.

(3) Each purchase of youth services must have at least the following documentation:

(A) description of services;

(B) payment terms and conditions;

(C) approvals or authorizations;

(D) invoice from service provider; and

(E) certification that services have been received.

(d) Contracting for Residential Services.

(1) Residential service providers must be licensed or certified under:

(A) TYC's Core Standards; or

(B) Texas Department of Family and Protective Services (DFPS) Standards; or

(C) Texas Department of Mental Health and Mental Retardation (MHMR) Community Standards; or

(D) Texas Commission on Alcohol and Drug Abuse (CADA) Standards; or

(E) Texas Department of Health (TDH) Standards; or

(F) Texas Rehabilitation Commission (TRC) Standards; or

(G) Texas Juvenile Probation Commission (JPC) Standards; or

(H) other standards as determined by the appropriate juvenile corrections director.

(2) Residential service providers must agree to provide services as set forth in their response to the statement of work or accordance to §111.9 of this title.

(3) Residential service providers must agree to all terms and conditions in the contract for services.

(4) Contracts will not be automatically renewed:

(A) Recommendations for renewing contracts will be based on evaluations of performance and service delivery according to the Residential Contract Monitoring criteria.

(B) TYC will negotiate with service providers whose contracts are recommended for renewal concerning the:

(i) types and quality of services to be provided during the renewal period;

(ii) terms and conditions for providing these services;

(iii) rates TYC will pay for the requested service.

(C) TYC will not renew a contract if negotiations do not result in the desired types and quality of services or the rate is not agreed upon.

(e) Contracting for Non-Residential Services.

(1) The following non-residential services must have a written contract:

(A) parole services;

(B) chemical dependency follow-up services;

(C) emotionally disturbed follow-up services;

(D) sex offender follow-up services;

(E) MHMR services;

(F) youth advisor;

(G) speech therapist;

(H) diagnostician;

(I) GED services;

(J) youth job training or employment;

(K) interpreter services;

(L) psychological evaluations for youth at designated residential placements;

(M) airport assistance services for youth in transit; or

(N) other services as determined by the appropriate juvenile corrections director.

(2) Non-residential service providers must meet the basic qualifications for providing the requested services.

(3) Non-residential service providers must agree to all terms and conditions in the contract for services.

(4) Contracts for non-residential services will not be automatically renewed:

(A) Recommendations for renewing contracts will be based on evaluations of performance and service delivery according to contract expectations.

(B) TYC will negotiate with the service providers whose contracts are recommended for renewal concerning the:

(i) types and quality of services to be provided during the renewal period;

(ii) terms and conditions for providing the requested services; and

(iii) rates TYC will pay for the requested services.

(C) TYC will not renew a contract if negotiations do not result in the desired types and quality of services or the rate is not agreed upon.

(f) Contracts may be for a term up to two (2) years unless otherwise specified in §111.9 of this title.

(g) Contracts may be amended for good cause:

(1) TYC or the service provider may request amendments;

(2) amendments requested by service providers will not be automatically approved. Designated TYC staff will evaluate proposed amendments and make a recommendation to the appropriate juvenile corrections director. Criteria for evaluating proposed amendments include:

(A) agency needs and budget;

(B) quality of current services received from service provider;

(C) significance of proposed amendment to overall level of service; and

(D) other criteria appropriate for the circumstances.

(3) TYC may negotiate with the service provider about the terms and conditions of the proposed amendment.

(h) A contract must be executed prior to the funds being obligated or services received, except in an emergency. In an emergency, the approval must be obtained from the appropriate juvenile corrections director as soon as possible.

(i) Purchasing Youth Services Not Requiring a Contract.

(1) The following purchases of youth services will not require a contract:

(A) medical services for youth in TYC's residential contract programs (e.g., physicians, hospitals, dentists, pharmacies, etc.);

(B) independent living subsidies as outlined in §87.23 of this title (relating to Subsidized Independent Living);

(C) financial assistance as outlined in §91.49 of this title (relating to College/Technical Institute Financial Assistance);

(D) transportation as outlined in the Human Resource Code §61.082 and bus tokens or passes for local transportation; and

(E) individual purchases (not define above) under $500.00.

(2) The chief local administrator (CLA) is responsible for developing and implementing a control system for facilities and offices purchasing youth services not requiring contract. The control system must include:

(A) procedures for approval process for obligating funds or receiving services;

(B) procedures for training TYC staff and service providers;

(C) procedures for documentation process on purchases of youth services;

(D) procedures for authorizing medical services;

(E) procedures for payment of medical services; and

(F) other procedures that the CLA deems appropriate.

(3) The CLA assigns an appropriate staff responsible for authorizing purchasing youth services not requiring a contract.

§111.7.Rate Setting for Youth Service Contracts.

(a) Purpose. The purpose of this rule is to establish the basis on which Texas Youth Commission (TYC) will set rates of payment for contracted youth services.

(b) All rates will be established either through negotiations between TYC and the service provider; or through an appropriate competitive process; or if hourly fees, based on fair, reasonable and consistent rates which are the usual and customary fees for such services and by providers with demonstrated competence and qualifications.

(c) Except where payment is fixed, rates and payments for residential services are made on a per day per youth basis for all contract services for each contract cycle.

(d) Fixed monthly payments are not made for non-residential services.

§111.9.Request for Proposal.

(a) Purpose. The purpose of this rule is to establish a procurement process for residential programs, parole supervision and services, or non-residential services through the request for proposal (RFP) process.

(b) RFP Process.

(1) The appropriate juvenile corrections director or designee will be the contracting officer and will initiate the RFP process.

(2) The contracting officer:

(A) develops the RFP and criteria for screening and evaluating proposals with input form TYC staff with expertise in the components of the RFP;

(B) establishes the RFP timetable;

(C) selects a Review Committee for each RFP;

(D) ensures the Review Committee are aware of their responsibilities; and

(E) coordinates the evaluating and awarding process.

(3) The Review Committee will document their evaluations of RFPs and include explanations that are clear, concise, and pertinent.

(c) Notification of Requests for Proposal.

(1) All RFPs will be published in the Texas Register and will be listed in the Texas Marketplace.

(2) RFP information packets will be provided to all vendors responding to the notification.

(d) Screening and Approving Proposals.

(1) Information regarding a RFP must be submitted to TYC by the due date.

(2) Proposals are screened and evaluated according to the timetable and criteria established for each RFP.

(3) The TYC executive director shall make the final selection decision.

(e) Appeal Process. Unsuccessful applicants may appeal the award of the contract.

(1) An unsuccessful applicant has five (5) working days after being notified of the contracting decision to submit an initial appeal to TYC's contracting officer. This appeal will be in writing and include a concise statement of the facts relied upon by the unsuccessful applicant and the type of remedy sought.

(2) The contracting officer will review the initial appeal and submit a decision in writing within five (5) working days of receipt.

§111.11.Start-Up Funds.

(a) Purpose. The purpose of this rule is to provide an established method for the awarding of funds to private interests in order to ensure the development of additional private programs designed to meet the demand for services for youth in the Texas Youth Commission (TYC) care.

(b) Explanation of Terms Used.

(1) Start-up funds--funds which are authorized to be paid by TYC to assist in establishing programs owned and operated by private organizations which agree to provide services to delinquent youth committed to the agency.

(2) Request for Proposal (RFP)--a document and a process for requesting bids for providing specified services to TYC. It is used in a competitive procurement process for selecting a qualified and competent service provider.

(3) Funding agreement--a contractual agreement between TYC and a selected party which establishes the need for and conditions under which start-up funds will be awarded and may be expended.

(4) Advance payments--payments to service providers prior to the completion of the monthly services having been rendered.

(5) Fixed payments--fixed monthly payments to service providers based on a daily rate per bed and a predetermined number of youth, even though fewer youth may actually be in the program.

(6) Contract for services--an agreement between TYC and a service provider which provides for payment at a specified daily rate for services for TYC youth.

(7) Letter of credit--a guarantee by a service provider's bank that in the event of default on a contract for services, payment will be made when the proper documents are tendered to the service provider's bank by TYC.

(8) Default--failure to perform a legal obligation required by contract.

(c) Start-up Funds Requirements.

(1) All start-up funds paid to service providers over and above payments for services must be awarded through a RFP process.

(2) Start-up funds shall be requested through a proposed budget with narrative justifications. Requests for funds are restricted to those funds necessary to make the program operational. Unjustified amounts will not be awarded.

(3) Start-up funds will be competitively evaluated and awarded based on the total cost of services including the per diem rate, fixed number of beds and all related financial conditions and obligations.

(4) Start-up funds may not exceed a reasonable value per new bed. The start-up funds are awarded in consideration of the contract for services and the new beds made available for TYC youth.

(d) Start-up Fund Payments.

(1) All start-up funds must be expended and request for reimbursement made within the first 12 months of the contract for services.

(2) Start-up funds will be paid monthly based on the expenditures reflected in the service provider's monthly expenditure report and in accordance with the approved start-up budget.

(3) Invoices or appropriate documentation must be submitted to TYC with all requests for payment. No expenditures will be reimbursed unless within the approved budget.

(e) Allowable and Unallowable Costs. TYC has determined that certain expenses are allowable and others are not.

(1) Allowable costs.

(A) Salaries necessary to start-up of program;

(B) travel expense, not to exceed state limits;

(C) training;

(D) purchase of equipment;

(E) TYC approved renovations to program sites;

(F) rental of buildings, vehicles or equipment; and

(G) other appropriate reasonable and necessary direct costs.

(2) Unallowable costs.

(A) Entertainment expense;

(B) purchase of real property, i.e. land, buildings;

(C) any cost relating to preparation of proposal, including letter of credit;

(D) overhead or indirect costs;

(E) items not described in proposed budget and narrative; and

(F) operating capital or cash reserves.

(f) Monitoring.

(1) TYC staff shall monitor the start-up progress in accordance with the terms of the start-up funding agreement, the contract for services, and the bidder's final proposal as approved by the agency.

(2) TYC staff will begin monitoring the use of start-up funds on the date the funding agreement commences.

(3) The TYC staff responsible for start-up monitoring must approve and sign all purchase vouchers for start-up funds and ensure that appropriate goods and services have been received.

(4) TYC shall conduct a financial audit of all start-up funding contracts prior to close out and release of the letter of credit.

(g) Security.

(1) Start-up funds shall be secured through a letter of credit and a lien on property and equipment, when applicable.

(2) The letter of credit may have a decreasing monthly balance based on the contracted months of service beginning with the first operational month.

(h) Default.

(1) In the event of default, the amount of start-up funds which should be repaid will be based on the total start-up funds paid, less the amount of start-up funds earned up to the date of default.

(2) Start-up funds considered to have been earned will be based on the number of months of service for the contracted number of beds actually rendered up to the point of default.

(i) Payment for Contracted Services.

(1) Contracts for services shall not provide for advance payments. Service providers are expected to have a minimum of one month's operating capital available from other sources in order to secure the financial stability of the program. Additional funds necessary to operationalize a program should be requested in the start-up funding budget.

(2) Contracts for services shall not have fixed payments for more than ninety percent (90%) of the contracted average daily population (ADP).

(3) The start-up funding agreement shall establish a maximum time frame allowed within which a program must become operational.

(4) The start-up funding agreement and the contract for services shall establish a service period after the program becomes operational.

§111.13.Quality Assurance of Contract Programs.

(a) Purpose. The purpose of this rule is to establish a Quality Assurance Program, including sanctions, whereby the Texas Youth Commission (TYC) ensures compliance with contract and service delivery requirements by service providers.

(b) Applicability. This rule applies to all public or private entities with which TYC has a contract for youth services.

(c) Explanation of Terms Used.

(1) On-Site Visit--a visit by TYC staff to a service provider. The visit may or may not be announced.

(2) Technical Assistance--the assistance, advice or training that TYC staff offer in areas of contract implementation, performance standards, clarification, problem analysis, staff training, financial procedures, and program implementation.

(3) Monitoring--a formal review of the service provider's compliance with contract terms quality of service delivery.

(4) Sanctions--actions taken by TYC to address a service provider's non-compliance with TYC contract requirements or deficient service delivery.

(5) Corrective Action Plan--corrective action plans are used to communicate recommendations by TYC staff to remedy non-compliance with contract requirements or improve service delivery.

(6) Evaluation--a process used to measure the quality and effectiveness of service delivery.

(7) Performance Measure Rating--a residential service provider's performance on the four most recent quarterly Performance Measure Reports.

(8) Below Standards Performance Measure Rating

(A) For emergency shelters, two or more performance measures below standard on at least two of the four most recent quarterly Performance Measure Reports.

(B) For other residential service providers, three or more performance measures below standard on at least two of the four most recent quarterly Performance Measure Reports.

(9) Risk Assessment--a process by which service providers are ranked by specific factors that present the greatest risk to TYC's resources and responsibility.

(d) TYC will periodically monitor all public and private entities it has contracted with to place TYC youth by using a risk assessment methodology.

(e) TYC shall establish a monitoring schedule based on risk. Higher risk programs shall be monitored more frequently than lower risk programs. The schedule may be shared with service providers.

(f) TYC will use four response levels to address non-compliance with contract terms or deficient service delivery detected through the quality assurance program. The four response levels are:

(1) Level 1--Technical Assistance. Informal efforts to resolve issues that have not been resolved through the routine discussions between TYC staff and the service provider.

(2) Level 2--Corrective Action Plan. Corrective action plans are used to communicate recommendations by TYC staff to remedy non-compliance with contract requirements or improve service delivery.

(3) Level 3--Minor Sanctions. TYC may use the following minor sanctions:

(A) letter to the service provider's management, or other appropriate persons in the service provider's chain of command, documenting recommendations to remedy non-compliance with contract requirement or improve service delivery with due dates for implementation; or

(B) conference between TYC and the service provider's management.

(4) Level 4--Major Sanctions. TYC may use one or more of the following major sanctions:

(A) moratorium on placements;

(B) limited contract period on renewals;

(C) removal of youth;

(D) withhold payments;

(E) assess liquidated damages;

(F) draw on a performance bond;

(G) contract termination; or

(H) other sanctions as appropriate for the circumstances.

(g) Combination of Response Levels.

(1) TYC may develop the appropriate response by using components from the different response levels.

(2) The quality assurance (QA) administrator must approve any combination of components from Levels 1 - 3.

(3) The appropriate juvenile corrections director must approve any combination of levels which includes Level 4 sanctions.

(h) TYC will use one or more of the following criteria to select the appropriate response level, or combination of components from different levels, to address instances of non-compliance or deficient service delivery:

(1) extent of progress toward implementing a corrective action plan;

(2) timely implementation of recommendations in a corrective action plan;

(3) significance of non-compliance to service delivery;

(4) level of performance on one or more measures in the current quarter's Performance Measure Report;

(5) performance measure rating for the current quarter;

(6) potential impact on health, safety, or welfare of TYC youth;

(7) potential impact on the safety of the community;

(8) length of time that deficiencies have existed;

(9) potential for fraud, waste or abuse of financial resources; or

(10) other criteria appropriate for the circumstances.

§111.15.Variance/Waiver Requests.

(a) Purpose. The purpose of this rule is to allow for variances and waivers of the terms or conditions in contract agreements between the Texas Youth Commission (TYC) and a service provider when conditions warrant such changes and is in the best interest of the agency.

(b) Explanation of Terms Used.

(1) Variance--permission for the service provider to meet the intent of a standard or contractual agreement through some means other than that stated in the standard or the contract.

(2) Waiver--permission for the service provider not to comply with the stated standard.

(c) The appropriate juvenile corrections director determines whether or not to grant a variance or waiver request.

(d) TYC may permit variances and waivers at the discretion of the agency.

(e) Variance and waivers shall be time limited and may be considered for renewal through a new request.

(f) A service provider may request a variance or waiver by submission of the Service Provider Variance/Waiver Request form. TYC staff will provide the request form to the service provider. The request must include the specific standard or contract requirement, the time period, and justification for the request. The provider may be asked to provide additional information.

(g) The service provider shall receive in writing a response to the request. The service provider may be asked to agree to other stipulations as a condition of approval. Administrative appeals will not be available for disapprovals.

§111.17.Private Sector Involvement.

(a) Purpose. The purpose of this rule is to provide for private sector involvement in the development of the Texas Youth Commission (TYC) contract program administration operations by encouraging comments and opinions from interested segments of the private sector.

(b) TYC quality assurance administrators shall regularly schedule service provider meetings to:

(1) obtain input regarding implementing new operations relating to contract services;

(2) encourage the private sector to communicate suggestions for improved efficiency and effectiveness of contract operations.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 12, 2004.

TRD-200403213

Dwight Harris

Executive Director

Texas Youth Commission

Earliest possible date of adoption: June 20, 2004

For further information, please call: (512) 424-6301


Subchapter B. CONTRACTS FOR OTHER THAN YOUTH SERVICES

37 TAC §§111.31, 111.37, 111.39, 111.45, 111.49, 111.51, 111.57, 111.61

The new sections are proposed under the Human Resources Code, §61.034 and §61.037, which provides the Texas Youth Commission with the authority to develop rules appropriate to the proper accomplishment of its functions. The commission also has the authority to make reasonable efforts to ensure that the expenditure of appropriations for the purchase of contract residential care for youth be allocated to providers on a fixed monthly basis if it is cost-effective and the number, type, needs, and conditions of the youth to be served are reasonably constant.

The proposed new sections affect the Human Resources Code, §61.034.

§111.31.Contracting for Services.

(a) Purpose. The purpose of this rule is to establish the authority and responsibility for utilizing and managing contracts between the private sector or other government entities and the Texas Youth Commission (TYC), an agency of the state, for the delivery of services required by TYC. Information in this rule is cumulative and should be considered in its entirety.

(b) Explanation of Terms Used.

(1) Contracts--Legal documents including Letters of Agreement, Memoranda of Understanding (MOU), Interagency/Interlocal Agreements (IAC) with other government entities, and other documents in which state funds or services are exchanged for the delivery of other goods or services. For purposes herein, contracts also includes MOUs in which an agreement is made between the Commission and another entity to share information or to jointly cooperate to obtain some common goal.

(2) Temporary worker--An individual who is employed by a private temporary placement company and assigned, usually for a specified period of time, to particular and various clients.

(3) Contract worker--independent or contract company worker--An independent contractor is an individual who directly contracts with a state agency. A contract company worker is an individual who works for a contract company and who, like a temporary worker (temp), is assigned to particular and various clients.

(4) Outsourced function(s)--The strategic use of outside resources rather than state employees to perform an entire ongoing function or set of functions for an organizational or geographical work unit. The contract is generally based on the provision of defined deliverables and not hours worked.

(5) Non-outsourced function(s)--The occasional use of outside resources to support or supplement an agency's existing workforce in special work situations, e.g. employee absences, temporary skill shortages, periods of peak workload, and services that are customarily performed by state employees.

(6) Full-Time Equivalent (FTE)--A fractional measurement of the number of employees or workers providing 2080 hours of paid work per year. Certain temporary and contract workers will count against the agency's FTE cap as established by the legislature. However, counting against the FTE cap does not imply that contractor or temporary worker is an employee of TYC.

(c) Applicability.

(1) Listed are types of contracts to which this rule applies and references to sections where specific information regarding those types of contracts may be found.

(A) Professional and Consultant Contracts, see §111.37 of this title (relating to Professional and Consultant Contracts).

(B) Architect and Engineer Contracts, see §111.39 of this title (relating to Architect and Engineer Contracts).

(C) Construction Contracts, see §111.45 of this title (relating to Construction Contracts).

(D) Training and Education Contracts, see §111.57 of this title (relating to Training and Education Contracts).

(E) Student Intern Contracts, see §111.61 of this title (relating to Student Intern Contracts).

(F) Interagency or Interlocal governmental cooperation contracts.

(G) Vending and canteen contracts.

(H) Memoranda of Understanding and Letters of Agreement.

(I) Grant, or gifts, involving the purchase of property, goods, or services.

(J) Lease (rental) of lands or facilities, either as lessee or lessor.

(K) Agreements to purchase services of temporary or contract workers even when formal contract documents are not executed.

(L) Outsourcing contracts.

(2) This rule does not apply to contracts for residential, non-residential, supplemental, parole, or mental health care for youth committed to TYC except where appropriate because certain youth services may count against the agency FTE cap and will be included in the annual Contract Workforce Report required by the legislature.

(3) This rule does not apply to contracts or purchase orders established under the authority delegated to TYC by the Texas Building and Procurement Commission (TBPC), Title 10 Government Code, §2151.001, et seq.

(4) This rule applies to the use of all agency funding sources including grant funds. Contract services that are anticipated to be purchased under a grant should be approved in accordance with this policy prior to the submission of the grant application.

(d) Utilization of Contract Services. The agency may contract for services of firms or individuals to meet particular program needs when it is in the best interest of the agency and in accordance with procedures established by statutes and TYC policy.

(1) TYC may contract to meet legitimate business needs of the agency such as:

(A) the providing of a service that can be done more economically than if provided by TYC staff personnel;

(B) the completing of a short-term project which can be more easily done through outside sources;

(C) the relieving of a temporary peak in ordinary TYC business;

(D) the undertaking of a task for which available TYC staff are not technically or professionally qualified or experienced, or for which available TYC resources are inadequate;

(E) the handling of a matter for which objectivity and/or credibility would be impaired by having agency employees perform the services.

(2) TYC makes contract workforce decisions after careful analysis and documentation of:

(A) why and how the use of contract workers fit into agency staffing strategies, including consideration of the agency mission, goals, and objectives;

(B) why the proposed services cannot be performed within current staffing levels;

(C) existing and future employee skills needed;

(D) benefits, compensation costs, productivity, nature of services to be provided, workload, efficiency, and cost effectiveness of available options; and

(E) legal and personnel issues relating to the use of a contract workforce.

(3) TYC shall evaluate the results achieved through contract services provided and shall report on the agency's use of a contract workforce to the following entities:

(A) Legislative Budget Board;

(B) State Auditor's Office;

(C) Office of the Governor; and

(D) TYC's Executive Management Team.

(4) TYC incorporates workforce strategies into the agency's human resource planning process and annual operating budget.

(5) TYC shall include in the FTE reports to the legislature and state auditor the actual hours paid for positions filled only by those temporary or contract workers who both filled specific positions customarily filled by state employees and did so for more than half of the work days in the year preceding the final day of the reporting period.

(6) TYC manages and monitors service contracts to ensure that:

(A) contractors comply with the terms and conditions of the contract;

(B) the agency receives the benefits and results intended;

(C) managerial direction and control are consistent throughout the agency; and

(D) contractor performance is evaluated and considered in future contractor selection decisions.

(e) Approval Authority. Contracts for the delivery of services to the commission, including renewals and amendments, must be approved by agency personnel consistent with total annual costs to the commission.

(1) All temporary or contract worker services and all outsourcing contracts must be approved by the assistant deputy executive director for human resources and the assistant deputy executive director for financial support.

(2) Contracts of $5,000 or more or for longer than a 12-month duration require prior approval of the deputy executive director.

(3) All consultant contracts require approval of the deputy executive director and the executive director.

(4) Consultant contracts over $15,000 require the approval of the executive director and the TYC Board.

(f) The executive director is responsible for executing all contracts on behalf of the TYC Board and the agency. Such authority is hereby delegated to the deputy executive director and the assistant deputy executive director for financial support.

(g) The services to be received, the responsibilities of the vendor, any deliverables (such as interim or final reports), and the method by which TYC will determine when the contract terms have been fulfilled by the contractor will be described by the agency in a statement of work.

(h) Payment shall not be made unless the TYC staff responsible for the contract certifies the receipt of services including: that the services have been delivered, are acceptable in quantity and quality, and are in compliance with all contract terms, conditions, specifications and statement of work.

§111.37.Professional and Consultant Contracts.

(a) Purpose. The purpose of this rule is to establish the authorities and responsibilities for the contracting of professional and consultant services by the Texas Youth Commission (TYC).

(b) Explanation of Terms Used.

(1) Consultant Services--those as defined in Government Code, §2254.021, and include the practice of studying and advising a state agency on agency operations in a manner not involving the traditional employer/employee relationship.

(2) Professional Services--those as defined in Government Code, §2254.002(2)(A) within the scope of the practice of accounting; architecture; land surveying; medicine; optometry; or professional engineering; or provided in connection with the professional employment or practice of a person who is licensed as a certified public accountant; an architect; a land surveyor; a physician, including a surgeon; an optometrist; or a professional engineer.

(c) Applicability. This rule applies to all contracts between TYC and non-government entities for the delivery of the types of services defined in this section.

(d) Required Approvals.

(1) Requests for professional services under $5,000 must be approved by the facility administrator or division director and the respective assistant deputy executive director.

(2) Requests for professional services over $5,000 require the approval of the deputy executive director in addition to those specified in paragraph (1) of this subsection.

(3) All requests for consultant services require the approval of the deputy executive director and the executive director.

(4) Requests for consultant services over $15,000 require the approval of the executive director and the TYC Board.

(5) Consultant services must also comply with 34 TAC §5.54 Consulting Services Contracts.

(6) All contracts involving the expenditure of funds must be approved by the assistant deputy executive director for financial support.

(7) All contracts involving the expenditure of funds for outside audit services require approval of the State Auditor's Office.

(8) All contracts involving the expenditure of funds for outside legal services require approval of the Attorney General's Office.

(e) The executive director has the responsibility to execute all contracts on behalf of the TYC Board and the agency. This authority is delegated to the deputy executive director and the assistant deputy executive director for financial support.

§111.39.Architect and Engineer Contracts.

(a) Purpose. The purpose of this rule is to establish the responsibility and authority for the selection of architects, engineer, or other design professionals for construction contracts undertaken by the Texas Youth Commission (TYC).

(b) Explanation of Terms Used.

(1) Professional Services--services within the scope of the practice, as defined by state law, of accounting; architecture; land surveying; medicine; optometry; or professional engineering; or provided in connection with the professional employment or practice of a person who is licensed as a certified public accountant; an architect; a land surveyor; a physician, including a surgeon; an optometrist; or a professional engineer. This rule addresses professionals involved in the design and completion of TYC construction projects and includes architects, engineers and land surveyors.

(2) Architect--one who provides or may offer any service or creative work, either public or private, applying the art and science of developing design concepts, planning for functional relationships and intended uses, and establishing the form, appearance, aesthetics, and construction details, for any buildings, or environs, to be constructed, enlarged, or altered, the proper application of which requires architectural education, training, and experience.

(3) Engineer--a person who has been duly licensed and registered by the State Board of Registration for Professional Engineers to engage in the practice of engineering in this state. Practice of engineering shall mean any service or creative work, either public or private, the performance of which requires engineering education, training and experience in the application of special knowledge of the mathematical, physical, engineering sciences to such services or creative work.

(c) Applicability.

(1) This rule applies to all construction design services procured by TYC for new construction or for renovation of existing facilities for which such design capabilities are beyond the scope of the staff's ability.

(2) This rule does not apply to construction projects for which the staff has the ability to meet the legal and functional requirements for design or for those projects that do not require working plans or drawings.

(d) The TYC Board retains the authority and responsibility for the final selection of any architect or engineer contracted for the design, specifying, or oversight of construction projects undertaken by the agency.

(e) The Board may contract for construction management services of a private or government entity for the purpose of managing construction projects undertaken by the agency.

§111.45.Construction Contracts.

(a) Purpose. The purpose of this rule is to establish the responsibility and authority of the Texas Youth Commission (TYC) in the procurement of construction services for the renovation of existing facilities or for the construction of new facilities.

(b) Explanation of Terms Used.

(1) Construction Contract--the agreement between the owner and contractor to commence and complete certain public works for use and benefit of TYC as shown in the plans and described in the specifications for such public works project.

(2) General Contractor--the individual corporation, company, partnership, firm, or other organization that has contracted to perform the work, under the contract with the State of Texas acting through TYC, its agents and representatives.

(3) Working plans or drawings--one copy of all drawings, specifications, addenda, approved shop drawings and contract modifications maintained by general contractor at the site in good order and marked to record all changes made during construction.

(c) Applicability.

(1) This rule applies to all construction services procured by TYC for new construction or for renovation of existing facilities.

(2) This rule does not apply to construction projects for which the staff has the ability to meet the legal and functional requirements for design and completion of the project or for those projects that do not require working plans or drawings.

(d) TYC Board retains the authority and responsibility for the final selection of any general contractor for the construction or oversight of projects undertaken by the agency where the value of the contract exceeds $100,000.

(e) The Board may contract for construction management services of a private or government entity for the purpose of managing construction projects undertaken by the agency.

(f) Construction projects may be undertaken by the agency without complying with this rule if the total cost of the project to the agency is less than $100,000 and if the labor and materials are procured through competitive bidding or if the labor is done with existing staff, or if the project is of such a scope that it does not require the preparation of working plans or drawing, and the project is approved by the executive director.

§111.49.Construction Contract Change Order Approval.

All construction contract change orders shall be reviewed and approved by the central office Construction Management Committee.

§111.51.Construction Project Operation Management Process and Resolution Forum.

(a) Purpose. The purpose of this rule is to establish a process for the daily management of a construction project and provide a forum to address operational issues or problems arising from construction projects involving both the Texas Youth Commission (TYC) and the Texas Department of Criminal Justice (TDCJ).

(b) Partnering Sessions.

(1) For projects with a moderate level of complexity as defined by the project budget or the number of subcontractors who will need to coordinate, schedule, and perform work, a partnering session will be held before the project construction begins. At a minimum, sessions shall be attended by the:

(A) TDCJ construction management;

(B) TDCJ design group;

(C) TDCJ quality control group;

(D) TYC facility administrator or superintendent;

(E) TYC business manager;

(F) TYC plant manager;

(G) architect/engineer; and

(H) contractor and subcontractors.

(2) TYC and TDCJ will hold regularly scheduled meetings as listed below. Issues or problems relating to ongoing daily construction management may be identified by contractors, architects, TDCJ project managers, or by TYC staff at construction projects including the superintendent, business manager, plant manager, or otherwise interested stakeholders. TDCJ and TYC staff will resolve issues or problems during participation in these regularly scheduled meetings.

(A) partnering sessions (required in certain cases);

(B) on-site weekly construction meetings;

(C) on-site monthly construction meetings; and

(D) weekly construction management meetings.

(c) Informal Process for Problem Resolutions.

(1) On-site weekly construction meetings shall be conducted in the spirit of mutual trust and cooperation. Routine problems or issues may be addressed at this time.

(A) The contractor, subcontractors, and TDCJ project manager must attend.

(B) Routine problems or issues are discussed and resolved on-site.

(C) Problems or issues not solved at the weekly meeting are presented at the monthly on-site meeting.

(2) On-site monthly construction meetings shall be conducted. These meetings may discuss more complex problems or issues requiring user input and problems not resolved at the weekly meetings.

(A) Attendance is required of the facility superintendent, business manager, plant manager, TDCJ project manager, TDCJ area manager, the architect/engineer, the contractor, and subcontractors.

(B) Problems or issues not resolved at the weekly meeting are discussed and resolved with input and acknowledgment of the facility management.

(C) Problems or issues not resolved at the monthly meeting are presented to the Central Office Construction Management Committee for resolution.

(D) All problems or issues shall be documented in the minutes of the meeting.

(E) Minutes of the monthly meetings shall be forwarded to the director of maintenance and operations for dissemination.

(3) A weekly construction management meeting will be conducted. Problems or issues may be discussed and resolved.

(A) Problems or issues that are unresolved at the monthly construction meeting shall be put in writing and sent to the TDCJ Construction Program Manger for TYC with a copy to the director of maintenance and operations for dissemination. A copy of the meeting minutes shall be attached for a complete record of the discussion. Refer to TYC's Institutional Operations Manual (INS) §01.51 (relating to Staff Meetings).

(B) After review, the issue shall be prepared for presentation to the Construction Management Committee. Should the resolution involve a change to the contract, the procedures outlined in §111.49 of this title (relating to Construction Contract Change Order Approval) shall be followed.

(C) If appropriate, all formal complaints to TDCJ management shall be originated and issued by the TYC Central Office Construction Management Committee.

(d) Formal Process for Dispute Resolution. Matters to be resolved through the TYC contract dispute resolution process will comply with the procedures contained in individual construction contracts pursuant to §111.73 of this title (relating to Problem Solving Mechanism) or §111.77 of this title (relating to Negotiation and Mediation of Contract Disputes), if a written claim has been filed.

§111.57.Training and Education Contracts.

(a) Purpose. The purpose of this rule is to establish the authority and responsibilities for contracting for:

(1) training and educational assistance authorized under the Employees Training Act, Chapter 656, Government Code for the Texas Youth Commission (TYC) employees.

(2) training and education services to TYC youth authorized under §2155.143, Government Code.

(b) Explanation of Terms Used.

(1) Training--an organized, planned, and evaluated activity designed to achieve specific learning objectives.

(2) Education--instructional programs that provide Texas Education Agency (TEA) credits, or college credits, meet federal and state guidelines for special populations and result in age appropriate classes for TYC youth.

(c) Applicability.

(1) This rule applies to all staff development training which is contracted by the agency, and all contracts for the delivery of educational programs, curricula, or services to TYC youth.

(2) It does not apply to registration fees for seminars or conferences for staff development.

(d) Contracts for the training and development of TYC employees do not require competitive bidding as permitted by the Employees Training Act, if TYC has on file with the Governor's office an approved plan for training and educational assistance.

(e) Contracts for the procurement of educational services, programs or curricula for delivery to TYC youth are not required to be subjected to competitive bidding. However, TYC shall use a competitive proposal process to contract for educational programs when the services will be delivered in a residential program. These services will be acquired by the method described for the delivery of contracted youth services in Subchapter A of this chapter.

(f) All contracts for training and education services including employee training and TYC youth education services, excluding residential youth services, are to be processed in accordance with §111.31 of this title (relating to Contracting for Services), through the business services department.

§111.61.Student Intern Contracts.

(a) Purpose. The purpose of this rule is to establish a process for contracting with institutions of higher learning for the services of interns.

(b) Explanation of Terms Used. Intern--an advanced student or recent graduate who is working to gain supervised practical experience. Usually the work arrangement or agreement must meet the requirements of an educational institution or professional association through which the intern is to receive certification.

(c) Applicability.

(1) This rule applies to agreements with individuals working to fulfill certification requirements of an educational institution or professional organization.

(2) This rule does not apply to individuals voluntarily providing a service.

(d) When in the best interest of youth programs, the services of interns may be acquired through cooperation with the Texas Statewide Corrections Internship Program or other internship programs approved by the executive director. When written agreements stipulate compensation to defray education costs, payments may be made for the services of interns. If the agreement stipulates, the intern is not charged for meals or lodging at the facility. Certain travel and other expenses may be reimbursed when stipulated in the agreement (Authority Attorney General's Opinion H1227 dated 8-10-78).

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 12, 2004.

TRD-200403214

Dwight Harris

Executive Director

Texas Youth Commission

Earliest possible date of adoption: June 20, 2004

For further information, please call: (512) 424-6301


Subchapter C. MISCELLANEOUS

37 TAC §§111.73, 111.77, 111.81, 111.87

The new sections are proposed under the Human Resources Code, §61.034 and §61.037, which provides the Texas Youth Commission with the authority to develop rules appropriate to the proper accomplishment of its functions. The commission also has the authority to make reasonable efforts to ensure that the expenditure of appropriations for the purchase of contract residential care for youth be allocated to providers on a fixed monthly basis if it is cost-effective and the number, type, needs, and conditions of the youth to be served are reasonably constant.

The proposed new sections affect the Human Resources Code, §61.034.

§111.73.Problem Solving Mechanism.

(a) Purpose. The purpose of this rule is to establish a problem solving mechanism whereby contractors, service providers and Texas Youth Commission (TYC) staff may communicate and resolve any problems related to the provisions of a contract.

(b) Informal Resolution. Contractors, service providers and TYC staff will communicate regularly and engage in informal problem solving efforts as a routine measure, thus preventing differences from becoming major problems.

(c) Formal Resolution. When informal measures have been exhausted, contractors, service providers and TYC staff are encouraged to utilize the formal resolution mechanism.

(1) Contractors, service providers or TYC staff who wish to submit problems for resolution shall do so in writing, including relevant information and a recommended resolution.

(2) The statement of problem will be submitted to the assigned TYC staff unless the problem specifically involves the assigned TYC staff, in which case it will be submitted to the assigned TYC staff supervisor.

(3) Problems shall be resolved within ten (10) working days. Written responses will be sent to the contractor or service provider submitting the problem.

(d) Appeal.

(1) The contractor or service provider desiring to appeal the resolution may do so within ten (10) working days by submitting, in writing, information relevant to the appeal to the:

(A) chief of purchasing if the problem relates to a contract for other than youth services; or

(B) appropriate juvenile corrections director for youth service contracts.

(2) Appeals will be resolved within 14 working days. Response will be sent to the contractor or service provider submitting the appeal and the assigned TYC staff or supervisor as appropriate.

§111.77.Negotiation and Mediation of Contract Disputes.

(a) Purpose. The purpose of this rule is to establish procedures for the Texas Youth Commission (TYC) under Texas Government Code Chapter 2260 whereby the agency may conduct proceedings to resolve certain disputes involving only written contracts entered pursuant to Subchapters A and B of this chapter.

(b) Applicability.

(1) This rule does not apply to a claim for personal injury or wrongful death arising from a breach of contract.

(2) This rule does not apply to an action of TYC for which a contractor is entitled to a specific remedy pursuant to state or federal constitution or statute.

(3) This rule does not apply to a contract action proposed or taken by TYC for which a contractor receiving Medicaid funds under that contract is entitled by state statute or rule to a hearing conducted in accordance with Chapter 2001 of the Texas Government Code.

(4) This rule does not apply to a contract that is solely and entirely funded by federal grant monies other than for a project defined in Texas Government Code §2166.01.

(5) This rule does not apply to a contract between TYC and the federal government or its agencies, another state, or another nation.

(6) This rule does not apply to a contract between TYC and another unit of state government.

(7) This rule does not apply to a contract between TYC and a local governmental body or a political subdivision of another state.

(8) This rule does not apply to a claim from a contractor's subcontractor, officer, employee, agent, or other persons furnishing goods or services to a contractor.

(9) This rule does not apply to a contract within the exclusive jurisdiction of state or local regulatory bodies.

(10) This rule does not apply to a contract within the exclusive jurisdiction of federal courts or regulatory bodies.

(c) Sovereign Immunity.

(1) This rule does not waive TYC's sovereign immunity to suit or liability.

(2) The procedures contained in this rule are exclusive and required prerequisites to suit under Texas Civil Practices and Remedies Code, Chapter 107, and the Texas Government Code, Chapter 2260.

(d) Contract Claims.

(1) Notice of Claim of Breach of Contract

(A) A contractor asserting a claim shall file notice of the claim as provided by this section.

(B) The notice of claim shall:

(i) no later than 180 days after the date of the event that the contractor asserts as the basis of the claim;

(ii) provide written notification to the executive director of TYC;

(iii) be delivered by hand, certified mail return receipt requested, or other verifiable delivery service to the executive director of TYC. Fax or electronic transmissions shall not be used; and

(iv) state in reasonable detail:

(I) the nature of the alleged breach of contract, including the date of the event that the contractor asserts as the basis of the claim and each contractual provision allegedly breached;

(II) a description of damages that resulted from the alleged breach, including the amount and method used to calculate those damages; and

(III) the legal theory of recovery, i.e., breach of contract, including the causal relationship between the alleged breach and the damages claimed.

(v) provide supporting documentation or other tangible evidence to facilitate TYC's evaluation of the claim; and

(vi) be signed by the contractor or the contractor's authorized representative.

(2) Counterclaim by the Commission.

(A) In order to assert a counterclaim TYC shall file notice of the counterclaim not later than 90 days after the date of the contractor's notice of claim.

(B) Nothing herein precludes TYC from initiating a lawsuit for damages against the contractor in a court of competent jurisdiction.

(e) Negotiation.

(1) The parties may conduct negotiations of claims and counterclaims within a reasonable period of time as long as the negotiations start prior to the 60th day following the later of:

(A) the date of termination of the contract;

(B) the completion date, or substantial completion date in the case of construction projects, in the original contract; or

(C) the date TYC receives the contractor's notice of claim.

(2) TYC may delay negotiations until after the 180th day after the date of the event giving rise to the claim of breach of contract by giving written notice to the contractor:

(3) The parties shall complete the negotiations as provided by this rule as a prerequisite to a contractor's request for contested case hearing no later than 270 days after TYC receives the contractor's notice of claim unless the parties agree in writing to extend the time for negotiations.

(4) The parties may conduct negotiations with the assistance of one or more neutral third parties. If the parties choose to mediate their dispute, the parties shall select representatives who are knowledgeable about the subject matter of the dispute, who are in a position to reach agreement, and who can credibly recommend approval of an agreement.

(5) To facilitate the meaningful evaluation and negotiation of the claim(s) and any counterclaim(s), the parties may exchange relevant documents that support their respective claims, defenses, counterclaims, or positions.

(6) Material submitted pursuant to this subsection and claimed to be confidential by the contractor shall be handled pursuant to the requirements of the Public Information Act.

(7) The agreement may resolve an entire claim or counterclaim or any designated and severable portion of a claim.

(8) The agreement must be in writing and signed by representatives of the contractor and TYC who have authority to bind each respective party.

(9) A partial settlement does not waive a party's rights to proceed on the parts of the claims or counterclaims that are not resolved.

(10) Unless the parties agree otherwise, each party shall be responsible for its own costs incurred in connection with a negotiation, including, without limitation, the costs of attorney's fees, consultant's fees, and expert's fees.

(f) Mediation

(1) The parties may agree to mediate the dispute at any time before the 270th day after TYC receives the contractor's notice of claim or before the expiration of any written extension agreed to by the parties.

(2) The mediation is subject to the provisions of the Governmental Dispute Resolution Act, Texas Government Code, Chapter 2009. For purposes of this subrule, "mediation" is assigned the meaning set forth in the Texas Civil Practice and Remedies Code §154.023.

(3) Sources of mediators shall include governmental officers or employees who are qualified as mediators under §154.052, Texas Civil Practice and Remedies Code, private mediators, State Office of Administrative Hearings (SOAH), the Center for Public Policy Dispute Resolution at the University of Texas School of Law, an alternative dispute resolution system created under Chapter 152, Texas Civil Practice and Remedies Code, or another state or federal agency or though a pooling agreement with several state agencies.

(4) The confidentiality of a final settlement agreement to which TYC is a signatory that is reached as a result of the mediation is governed by Texas Government Code, Chapter 552.

(5) Each party shall be responsible for its own costs incurred in connection with the mediation, including costs of document reproduction for documents requested by such party, attorney's fees, and consultant or expert fees. The costs of the mediation process itself shall be divided equally between the parties.

(g) Settlement Agreement.

(1) A settlement agreement reached as a result of negotiation or mediation that resolves an entire claim or counterclaim or any designated and severable portion of a claim or counterclaim shall be in writing and signed by the representatives of the contractor and TYC who have authority to bind each respective party.

(2) If the settlement agreement does not resolve all issues raised by the claim and counterclaim, the agreement shall identify the issues that are not resolved.

(3) A partial settlement does not waive a contractor's rights under the Government Code, Chapter 2260, as to the parts of the claim that are not resolved.

(h) Referral to the State Office of Administrative Hearings.

(1) The contractor may request a contested case hearing before the SOAH after the 270th day after TYC receives the contractor's notice of claim, or the expiration of any written extension.

(2) If a claim for breach of contract is not resolved in its entirety through negotiation or mediation in accordance with this rule on or before the 270th day after TYC receives notice of claim, or after the expiration of any written extension agreed to by the parties, the contractor may file a request with TYC for a contested case hearing before SOAH.

(3) A request for a contested case hearing shall state the legal and factual basis for the claim, and shall be delivered to the executive director of TYC or other officer designated in the contract to receive notice within a reasonable time after the 270th day or the expiration of any written extension agreed to by the parties.

(4) TYC shall forward the contractor's request for contested case hearing to SOAH within a reasonable period of time, not to exceed thirty days after receipt of the request.

(5) The parties may agree to submit the case to SOAH before the 270th day after the notice of claim is received by TYC if they have achieved a partial resolution of the claim or if an impasse has been reached in the negotiations and proceeding to a contested case hearing would serve the interests of justice.

§111.81.Historically Underutilized Businesses (HUBs).

(a) Purpose. The purpose of this rule is to establish the procedures used by the Texas Youth Commission (TYC) to comply with the Historically Underutilized Business (HUB) Program. TYC's goal is a good faith effort to promote through race, ethnic, and gender-neutral means full and equal business opportunities for all businesses that are qualified to participate in the HUB program.

(b) Applicability.

(1) This rule applies to construction projects and purchases of goods and services that are paid for with appropriated money and authorize by law including all contracts and purchase orders delegated to it by the Texas Building and Procurement Commission (TBPC) and under this chapter.

(2) This policy does not apply to contracts for purchases of youth services with a political subdivision or a non-profit organization. Refer to §111.1 of this title (relating to Purchasing Youth Services).

(c) Pursuant to §2161.003, TYC adopts the Texas Building and Procurement Commission's published rules dealing with HUB programs. Refer to the Texas Administrative Code, Title 1, Part 5, Chapter 111, Subchapter B.

(d) Good Faith Effort.

(1) TYC makes a good faith effort to meet and increase the utilization goals established by TBPC to assist certified HUBs in receiving a portion of the total contract value of all contracts that TYC expects to award each fiscal year.

(2) TYC shall provide the HUB coordinator with necessary and sufficient resources from its current operations and budget to effectively promote the achievement of all the responsibilities of the HUB coordinator.

(e) HUB Credit.

(1) TYC receives HUB credit for the total value of contracts awarded directly to certified HUBs. When the prime contractor or vendor is a certified HUB, it must perform at least 25% of the total value of the contract with its own or leased employees, as defined by the Internal Revenue Service (IRS), in order for the agency to receive HUB credit for the entire contract amount.

(2) If a prime HUB contractor's or vendor's HUB subcontracting plan identifies that it is planning to perform less than 25% of the total value of contract with its employees, the agency receives HUB credit for the value of the contract that was actually performed by the prime HUB contractor or vendor and its HUB subcontractors.

(3) To obtain HUB credit, the agency must report its HUB subcontracting expenditures to the TBPC as set out in subsection (f)(7) of this section.

(f) HUB Coordinator's Responsibilities.

(1) TYC shall designate a staff member to serve as the HUB coordinator for the agency. The HUB coordinator applies the policies adopted by the TBPC with regard to the state's HUB program.

(2) The HUB coordinator advises and assists the agency's executive director and procurement personnel in complying with the statutory requirements relating to HUB programs and annual procurement utilization goals.

(3) The HUB coordinator assists in the development of the agency's procurement specifications and the evaluation of agency contracts for compliance The HUB coordinator facilitates compliance with the agency's good faith effort criteria and HUB reporting and assists contract administration with HUB related information and criteria. The HUB coordinator provides marketing and outreach efforts for HUB participation and assists prime contractors and vendors with the implementation and refinement of HUB subcontracting plans.

(4) Mentor-Protégé Program. Based upon the agency's unique mission and available resources and compliance with the TBPC regulations, the HUB coordinator is responsible for establishing, implementing, monitoring and reporting the agency's Mentor-Protégé Program. Participation by the prime or subcontractor must be voluntary.

(5) HUB Forums. Using TBPC's model, the HUB coordinator will design the agency's HUB forum program to include presentations of relevant anticipated contracting and subcontracting opportunities, notifications for required attendance at the HUB forums to appropriate senior managers and procurement personnel, and notification to contractors who may be subcontracting for goods and service of a type supplied by HUBs of said forums.

(6) Texas HUB Certification Directory. The HUB coordinator accesses the HUB Certification Directory electronically to determine if a bidder is a certified HUB and uses the Directory in conjunction with the TBPC's bidder list to solicit bids form certified HUBs for agency contracts.

(7) Information Required for Reporting

(A) The HUB coordinator reports to TBPC, no later than March 15 of each year regarding the previous six (6) month period and on September 15 of each year regarding the preceding fiscal year the following information:

(i) the total dollar amount of HUB subcontracting participation in all of TYC's contracts for the purchase of goods, services and public works payments paid from Treasury and Non-Treasury funds;

(ii) such information as requested by TBPC in a form prescribed by the TBPC with purchases from state term contracts paid from non-treasury funds identified in the report as such;

(iii) with cooperation from the state comptroller's office categorization of each HUB included in the report by sex, race, and ethnicity; and

(iv) if TYC participates in a group purchasing program, the HUB coordinator shall include a separate report to TBPC of purchases that are made through the group purchasing program and shall report the dollar amount of each purchase that is allocated to TYC.

(B) In order to provide the required information for reports to TBPC, the HUB coordinator shall maintain and compile monthly the following information including information regarding subcontractors and suppliers relating to each of TYC's operating division's use of HUBs:

(i) the volume of work performed under the contract;

(ii) the portion of the work that was performed with contractors/vendors' employees, non-HUB contractors/vendors and other HUB contractors/vendors; and

(iii) the identity of each HUB and amount paid by any prime contractor or vendor to each certified HUB each month in which such payment is made.

(C) TYC may request payment documentation and the HUB subcontracting plan that confirms the performance of the HUB contractor or vendor.

(D) The HUB coordinator shall discuss the performance of the contractor or vendor and document the contractor or vendor's HUB performance in the contract file. Any deficiencies will be identified by the HUB coordinator and must be rectified prior to the next reporting period by the contractor/vendor.

(8) Contracts of $100,000 or More

(A) When TYC enters into a contract with an expected value of $100,000 or more and before the agency solicits bids, proposals, offers, or other applicable expressions of interest for the contract, the HUB coordinator will determine whether there will be subcontracting opportunities under the contract. If the HUB coordinator determines that there is a probability of subcontracting opportunities, the HUB coordinator shall require that each bid, proposal, offer, or other applicable expression of interest for the contract to include a HUB subcontracting plan.

(B) When a HUB subcontracting plan is required:

(i) a bid, proposal, offer, or other applicable expression of interest for the contract must contain an HUB subcontracting plan to be considered responsive;

(ii) the awarded contract shall contain the plan that the contractor submitted in their bid, proposal, offer, or other applicable expression of interest that must be fulfilled by the contractor or vendor;

(iii) the contractor or vendor shall make good faith efforts to implement the plan; and

(iv) a contractor's or vendor's participation in a mentor-protégé program and submission of a protégé as a subcontractor in the contractor's historically underutilized business subcontracting plan constitutes a good faith effort under this section for the particular area of the subcontracting plan involving the protégé.

(C) To the extent that subcontracts are not contracted for as originally submitted in the HUB subcontracting plan, the prime contractor or vendor shall report to HUB coordinator all the circumstances that explain that fact and describe the good faith efforts made to find and subcontract with another HUB.

(D) The HUB coordinator shall audit the prime contractor or vendor's compliance with the HUBs' subcontracting plan. In determining whether the contractor or vendor made the required good faith effort, the HUB coordinator may not consider the success or failure of the contractor or vendor to subcontract with HUBS in any specific quantity. The HUB coordinator's determination is restricted to considering factors indicating good faith.

(E) If the HUB coordinator determines that the prime contractor or vendor failed to implement the plan in good faith, the HUB coordinator, in addition to any other remedies, may recommend that the executive director bar the contractor or vendor from further contracting opportunities with TYC.

(g) TYC Strategic Planning--HUB. TYC shall include in its strategic plan a written plan for increasing the agency's use of HUBs in purchasing and public works contracting. The plan must include:

(1) a policy or mission statement relating to increasing the use of HUBs by the state agency;

(2) goals to be met by the agency in carrying out the policy or mission; and

(3) specific programs to be conducted by the agency to meet the goals stated in the plan, including a specific program to encourage contractors to use HUBs as partners and subcontractors.

(h) Legislative Appropriations Requests--HUB.

(1) As part of TYC's legislative appropriations requests, a detailed report shall be submitted that shows the extent to which TYC complies with the state's HUB program as a performance measure.

(2) The detailed report will show the extent to which TYC complied with the HUB program during the two (2) calendar years preceding the calendar year in which the request is submitted and to the extent that TYC did not comply the reasons for that fact.

§111.87.1st Choice-Recycled Content Product.

(a) Purpose. The purpose of this rule is to establish the authority and responsibility to target designated recycled-content products defined as "1st Choice" as the default purchase commodities for the Texas Youth Commission (TYC) per Texas Government Code §2155.448 and Texas Administrative Code, Title 1, §113.156 and §113.137.

(b) Explanation of Terms Used.

(1) Recycling Market Development Board (RMDB)--the RMBD is charged with pursuing an economic development strategy that focuses on the state's waste management priorities including development of recycling industries and markets. The RMDB consists of the agency heads of the Texas Building and Procurement Commission (TBPC), the Texas Commission on Environmental Quality (TCEQ), the Texas Department of Transportation (TDOT), the Texas General Land Office (TGLO), and the Texas Department of Economic Development (TDED).

(2) 1st Choice Recycled-Content Products--designated by the RMDB as the default and preferred recycled purchase items for state agencies. The RMDB will add to the list of 1st Choice recycled-content products on an annual basis.

(3) Virgin Counterpart--products defined in 1st Choice recycled-content products which are not recycled, remanufactured, or environmentally sensitive commodities or services.

(4) Justification Letter--deviations from 1st Choice products require a letter to TBPC justifying the purchase of the virgin equivalent product(s) prior to acquiring the item(s). Factors for deviations are cost, quality, not available, and other reasons. A 1st Choice justification letter is not required when the combined total purchase on a single purchase order is equal to or less than $150.00.

(c) Applicability. This rule applies to all contracts and purchases orders established under the authority delegated to TYC by the TBPC, Government Code, Chapter 2155; TYC General Administrative Policy Manual §10.17 (relating to Purchase of Goods and Services); and §111.31 of this title (relating to Contracting for Services).

(d) Acquisition. In accordance with Texas Government Code, §2155.448 and Title 1, TAC, §113.136 and §113.137, TYC shall procure 1st Choice recycled-content products and services versus virgin counterparts. The TYC recycling coordinator will advise and assist the agency executive director and staff in complying with requirements of the recycled content products program. It is the policy of the State of Texas and TYC to identify and procure recycled, remanufactured, or environmentally sensitive commodities or services where required under the 1st Choice program.

(e) Exemptions.

(1) Current contracts are exempted from this requirement until expiration. Upon contract renewal, the new contract will contain provisions for 1st Choice recycled-content products or services.

(2) Oil changes and vehicle lubrication services acquired through vehicle service cards are exempted.

(f) New Contracts. New contracts will contain the 1st Choice recycle-content products or services requirement as a term and condition of the contract.

(g) Deviations. Deviations require a justification letter signed by the agency's executive director or designee prior to execution of the contract.

(h) Printing Services. Printing services will require specifying 1st Choice recycled-content paper and a breakdown of the cost of the paper and the printing service. The cost of the paper will be captured and reported on the monthly report.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 12, 2004.

TRD-200403217

Dwight Harris

Executive Director

Texas Youth Commission

Earliest possible date of adoption: June 20, 2004

For further information, please call: (512) 424-6301