TITLE administration

Part V. General Services Commission

Chapter 111. Executive Administration Division

Subchapter B. Historically Underutilized Business Certification Program

1 TAC §111.13, §111.14

The General Services Commission proposes amendments to §111.13 and §111.14 concerning the Historically Underutilized Business ("HUB") Certification Program. The amendments are being proposed to clarify terminology within the current rules; eliminate the predetermined time deadlines for submission of required information; require that the General Services Commission HUB directory be utilized when locating potential HUB subcontractors; change the minimum number of required notices from five to three to align with the recommended minimum number of bids that should be obtained; and require that all data collected relating to HUB Good Faith Effort Requirements be maintained in the project file for audit purposes.

David Gragan, Director of Central Procurement Services, has determined that for the first five year period the proposed amendments are in effect there will be no effect to state or local government as a result of implementing these amendments.

David Gragan, Director of Central Procurement Services, has also determined that for each year of the first five year period that the amended sections are in effect the public benefit anticipated as a result of implementing these rules is a streamlined method for securing more goods and services from HUB vendors. There will be no effect on small business. There is no anticipated economic cost to persons who are required to comply with the rules as proposed.

Comments on the proposals may be submitted to Judy Ponder, General Counsel, General Services Commission, P.O. Box 13047, Austin, TX 78711-3047. Comments must be received no later than thirty days from the date of publication of the proposal to the Texas Register .

The amendments are proposed under the Texas Government Code, Title 10, Subtitle D, Chapter 2161, Section 2161.002 which provides the General Services Commission with the authority to promulgate rules under this Code.

The following statute is affected by these rules: Government Code, Title 10, Subtitle D, Chapter 2161.

§111.13.Annual Procurement Utilization Goals.

(a)-(b)

(No change.)

(c)

Each agency shall make a good faith effort to meet or exceed the goals outlined in subsection (b) of this section. The percentage goals established in subsection (b) are overall annual program goals for each state agency applicable to the total annual dollar amount of an agency's contracts for each of the specific types of contracts. It may not be practicable to apply these goals to each contract. For each contract, state agencies may set higher or lower program goals than those outlined in this subsection. Agencies may consider HUB availability, HUB utilization, geographical location of the project, the contractual scope of work or other relevant factors. By implementing the following procedures, an agency shall be presumed to have made a good faith effort:

(1)-(5)

(No change.)

(6)

provide potential bidders [ contractors ] with referenced list of certified HUBs for subcontracting;

(7)

(No change.)

(d)

(No change.)

§111.14.Subcontracts.

(a)

(No change.)

(b)

A state agency shall require a potential contractor to state whether it is a Texas certified HUB and whether [ one or more ] subcontractors will be used to perform the contract. After the bid opening and prior to award of the contract, bidders may be required to [ The contractor shall ] submit a copy of the notice described in subsection (c)(2) of this section and shall provide [ with its offer, and shall submit a statement within seven working days following its offer that specifies ] the expected percentage of work, if any, to be subcontracted.

(c)

If the contractor plans to subcontract and is not using a HUB, the contractor [ By implementing the following procedures, a contractor ] shall be presumed to have made a good faith effort by having implemented the following procedure: [ . ]

(1)

(No change.)

(2)

Notify HUBs of the work that the contractor intends to subcontract. The preferable method of notice shall be in writing. The notice shall , in all instances, include a quantitative description of the subcontracting opportunities and identify the location to review contract specifications. The notice shall be made [ provided ] to potential subcontractors prior to submission of the contractor's bid. The contractor shall provide potential subcontractors reasonable time to respond to the contractor's notice. "Reasonable time" in this context is no less than five working days from receipt to respond unless circumstances require a different time period which is accepted by the agency , and documented in the project file.

(3)

The contractor shall utilize the Commission's Centralized Master Bidders List and HUB Directory when searching for HUB subcontractors. In this effort, [ The ] the contractor shall provide [ send ] the notice described in paragraph (2) of this subsection to at least three certified HUBs [ five businesses in the current commission directory of certified HUBs ] that perform the type of work required in the area in which the work will be performed. Upon request, the contractor shall provide an official form of written documentation (i.e. phone logs, fax transmittals, etc.) to substantiate the notice described in paragraph (2) of this subsection. This information shall be retained as part of the project file.

(4)-(6)

(No change.)

(d)-(e)

(No change.)

(f)

In making a determination whether [ that ] a good faith effort has been made in cases where a bidder is planning to subcontract and not utilize a HUB , a state agency shall require the contractor to complete a checklist, and submit supporting documentation explaining in what ways the contractor has made a good faith effort according to each requirement, in a time frame [ within 14 days ] following selection but prior to award of the contract. The checklist shall include at least the following.

(1)

Whether the contractor provided [ written ] notices to at least three [ five ] qualified HUBs or the contractor advertised in general circulation, trade association, and/or minority/women focus media concerning subcontracting opportunities.

(2)

Whether the contractor provided [ written ] notice to at least three [ five ] qualified HUBs allowing sufficient time for HUBs to participate effectively.

(3)-(6)

(No change.)

(g)

(No change.)

(h)

State agencies shall review the checklist and the attached documentation submitted by the contractor to determine if a good faith effort has been made in accordance with this section or the contract specifications. If determined that a good faith effort has not been made in accordance with this section and the contract specifications, the bid will be rejected. The reasons for non-compliance shall be recorded in the project file [ and issue a written notice of acceptance or deficiency of a good faith effort within 14 days of the agency's receipt. The notice of deficiency shall state the reasons for deficiency ].

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 January 21, 1999.

TRD-9900389

Judy Ponder

General Counsel

General Services Commission

Earliest possible date of adoption: March 7, 1999

For further information, please call: (512) 463-3960

Chapter 113. Central Purchasing Division

Subchapter A. Purchasing

1 TAC §113.20

The General Services Commission proposes amendments to §113.20 relating to group purchasing programs. By Act of the 75th Legislature, Chapter 1206, §8, 1997 Tex. Gen. Laws, 4632 (S. B. 1752) Section 2155.134, Texas Government Code, was amended to add state agencies to the list of institutions which may participate in group purchasing programs. The statute stipulates that for purchases in excess of $100,000 the purchasing entity must notify the commission of its intent to make the purchase. The entity may proceed with the purchase in 10 working days of the notice if the commission does not identify a better value available through the Commission. The proposed action adds state agencies to the existing §113.20 that governs group purchasing programs.

David P. Gragan, Director of Central Procurement Services, General Services Commission, has determined that for the first five year period these rules are in effect there will be no fiscal implications for state or local government as a result of implementing these amendments.

David P. Gragan further determines that for each year of the first five-year period the amendments are in effect, the public benefit anticipated as a result of enforcing the rules is that state agencies are permitted to use group purchasing processes in an attempt to obtain lower pricing when securing goods or services. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the rule as proposed.

Comments on the proposed amendment may be submitted to Judy Ponder, General Counsel, General Services Commission, P.O. Box 13047, Austin, TX 78711-3047. Comments must be received no later than thirty days from the date of publication of the proposal to the Texas Register .

The amendment is proposed under the Texas Government Code, Title 10, Subtitle D, Subchapter C, Chapter 2155, Section 2155.134, which provides the commission with the authority to promulgate rules to allow institutions of higher education or state agencies to make purchases through the group purchasing programs.

The following statute is affected by this rule: Texas Government Code, Title 10, Subtitle D, Chapter 2155, Section 2155.134.

§113.20.Group Purchasing Programs.

(a)

An institution of higher education, as defined by Education Code, §61.003, or a state agency may purchase materials, supplies, or equipment through group purchasing programs in accordance with this section.

(b)

Before making a particular purchase through a group purchasing program that costs more than $100,000, an [ , a requesting ] institution or state agency must notify the commission in writing that the purchase is being considered. The notification must be signed by the chief purchasing officer for the institution or state agency . The notification must include a complete description of the purchase, the vendor's name, quantity and price information, the terms and conditions of the contract, and any other information required by the commission.

(c)

If the commission determines that a better value [ lower price ] is available through the commission, it will so inform the requesting institution or state agency within ten working days after receipt of the notification. Upon receipt of information that a better value [ lower price ] is available, the institution or state agency shall utilize established purchasing procedures for the purchase. If the institution or state agency does not receive such notification within ten working days, it may proceed with the purchase.

(d)

An institution or state agency that participates in a group purchasing program must maintain, and compile monthly, information relating to the institution's or state agency's use, and the use by each operating division of the institution or state agency , of historically underutilized businesses, including information regarding subcontractors and suppliers. Institutions or state agencies shall require a contractor or supplier to whom [ the institution has awarded ] a contract has been awarded to report to the institution or state agency the identity and the amount paid to each historically underutilized business to whom the contractor or supplier has awarded a subcontract for the purchase of supplies, materials, or equipment.

(e)

An institution or state agency that participates in group purchasing programs must submit a report to the commission, not later than March 15 of each year regarding the previous six-month period and September 15 of each year regarding the preceding fiscal year, of purchases from historically underutilized businesses that are made through the group purchasing programs.

(f)

An institution or state agency participating in group purchasing programs shall adhere to the same ethical standards required of commission employees as set forth in §111.4 of this title (relating to Ethical Standards).

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 January 21, 1999.

TRD-9900397

Judy Ponder

General Counsel

General Services Commission

Earliest possible date of adoption: March 7, 1999

For further information, please call: (512) 463-3960

Subchapter F. Vendor Performance and Debarment Program

1 TAC §113.100, §113.102

The General Services Commission proposes amendments to §113.100 and §113.102 concerning the Vendor Management and Debarment Program. The amendments to §113.100 add a definition for the term "responsible vendor". Amendments to §113.102 are proposed to eliminate predetermined debarment time periods; add flexible time periods to be determined administratively depending upon the seriousness of the vendor's action; establish the Director of Central Procurement as the primary agency official for implementation of the rule; and clarify various parts of the current rule. The recommended changes will render the rule more effective administratively for both the Commission, state agencies, cooperative purchasing members, the vendor community, and the public.

David P. Gragan, Director of Central Procurement, has determined that for the first five-year period these rules are in effect there will be no fiscal implications for state or local government as a result of enforcing these amendments.

David P. Gragan, Director of Central Procurement, has also determined that for each year of the first five-year period the amendments are in effect, the public benefit anticipated as a result of enforcing the rules is that it provides a mechanism for disqualifying non-responsible vendors from doing business with the state. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with rules as proposed.

Comments on the proposals may be submitted to Judy Ponder, General Counsel, General Services Commission, P.O. Box 13047, Austin, TX 78711-3047. Comments must be received no later than thirty days from the date of publication of the proposal to the Texas Register .

The amendments are proposed under the authority of the Texas Government Code, Title 10, Subtitle D, Chapter 2155.077 which provides the Commission with the authority to promulgate rules for the Vendor Performance and Debarment Program.

The following statute is affected by these rules: Government Code, Title 10, Subtitle D, Chapter 2155.007.

§113.100.Definitions.

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1)

Debarment -- An exclusion from contracting or subcontracting with state agencies on the basis of any cause set forth in this chapter, commensurate with the seriousness of the offense, performance failure, or inadequacy of performance.

(2)

Responsible Vendor -- A vendor who has the capability to perform all contract requirements in full compliance with applicable state law, ethical standards, and applicable commission rules.

(3)

Successor-in-interest -- Any business entity that is substantially similar to a business entity that was previously debarred. For purposes of this chapter, it shall be presumed that a business entity that employs, or is associated with, any partner, member, officer, director, responsible managing officer, or responsible managing employee, of [ or ] a business entity that was previously debarred is a successor-in-interest.

§113.102.Vendor Performance and Debarment.

(a)

The commission may debar a vendor for a period that is commensurate with the seriousness of the vendor's action and the damage to the state's interest and may [ shall ] remove a vendor's name from the commission's Centralized Master Bidders List for the same period [ no less than three months and not longer than one year for repeated complaints against the vendor ]. If complaints resume after the vendor is reinstated on the bidders list, the Director of Central Procurement Services will re-evaluate the vendor's current performance and make a determination of the vendor's standing at that time [ commission may bar the vendor from participating in state contracts for a period that is commensurate with the seriousness of the vendor's action and the damage to the state's interests ].

(b)

The Director of Central Procurement Services [ commission ] shall adopt a measurement system to evaluate a vendor's past performance as an indicator of a vendor's ability to perform under a state contract for purchases or other acquisitions under Government Code, Chapters 2155-2158:

(1)

As a minimum, [ the commission shall consider ] the number and severity of a vendor's [ an offeror's ] performance problems in relation with volume of goods or services provided, the effectiveness of corrective actions taken by the vendor, and the age and relevance of past performance information at the time it is used shall be considered ;

(2)

Firms lacking relevant past performance history shall receive a neutral evaluation for past performance in state contracting except as provided for in subsection (d) of this section .

(c)

The Director of [ , ] Central Procurement Services shall establish standard policies and procedures for vendor performance criteria used in the evaluation of delegated and non-delegated purchases. In the evaluation process for delegated purchases, agencies must accurately document the vendor performance criteria used in determining the successful bidder or offeror.

(d)

When in the best interest of the State, [ the commission may debar ] a business entity or a successor-in-interest may be debarred for any of the following:

(1)-(7)

(No change.)

(8)

Notice of debarment activities from other governmental entities.

(9)

Any cause indicating that the individual or firm is not a responsible vendor.

(e)

[ The commission may debar a vendor for no less than one year and no longer than three years. ] A proposed debarment may include all known successors-in-interest of a business entity. Each proposed decision to debar a vendor and/or successors-in-interest shall be made on a case-by-case basis after consideration of relevant facts and circumstances. A proposal to debar a vendor shall be delivered in writing to the vendor , stating the reason therefore. Vendor shall be given 10 working days to respond. Debarment does not relieve the vendor of responsibility for existing contractual obligations with the state. The commission shall establish procedures to ensure due process to vendors in the debarment process.

(1)

Vendors subject to a proposed debarment may submit a written appeal to the Director of [ , ] Central Procurement Services within 10 days following notification of the proposed debarred status.

(2)

No person who has a direct interest in the outcome of the appeal may communicate directly or indirectly upon the merits of debarment with any commission employees without notice and approval of the Director of Central Procurement Services.

(f)

(No change.)

(g)

State agencies shall report a vendor's performance on any purchases of $25,000 or more from contracts administered by the commission and other purchases made through an agency's delegated authority in accordance with the policy guidance contained in the Commission's Procurement Manual. [ Agencies may report a vendor's performance on delegated purchases costing less than $25,000. ]

[ (h)

The commission may consider other debarment activities from other entities as possible indicators of vendor responsibility.]

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 January 22, 1999.

TRD-9900398

Judy Ponder

General Counsel

General Services Commission

Earliest possible date of adoption: March 7, 1999

For further information, please call: (512) 463-3960