STATE OF TEXAS

PROCUREMENT AND CONTRACT

MANAGEMENT GUIDE
STATEWIDE PROCUREMENT DIVISION

Glenn Hegar
Texas Comptroller of Public Accounts
 Statewide Procurement Division

TABLE OF CONTENTS
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

PROFESSIONAL CERTIFICATION AND TRAINING PROGRAM . . . . . . . . . . . . . . . . . . . . . . . 2

ETHICS LAWS AND PROFESSIONAL STANDARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
State Ethics Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
State Standards of Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Bribery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Gift to Public Servant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Misuse of Official Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Misuse of Government Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Suspected Fraud, Waste, or Abuse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

VENDOR COMMUNICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

SPD, DIR, OVERSIGHT TEAMS, AND PLANNING DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . 8

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SPD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
DIR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Contract Advisory Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Quality Assurance Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Agency Procurement Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Historically Underutilized Business Program Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Agency Contract Management Handbook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Agency Contract Management Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

THE PROCUREMENT CYCLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

PROCUREMENT PLANNING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Needs Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Cost Estimate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Acquisition Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

PROCUREMENT METHOD DETERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Procurement Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

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Procurement Method Identification Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Procurement Method – SPD Non-Delegated Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Texas Correctional Industries Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
The State Use Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Term Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Managed Term Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Travel Services Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SPD-Administered Agency-Specific Procurements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Proprietary Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Mail and Messenger Services Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Printing Services and In-House Copy Centers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Used Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Purchase of Used Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Trade-In of Used Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Contract Established by Another State Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Federal Government Purchases and Interstate Compacts & Cooperative Agreements . . . . . . . . . . . . . . . 25
Procurement Method – SPD Delegated Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Determining Contract Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Summary of Minimum Requirements for Delegated Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SPD Delegation by Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Purchases of $5,000 or less (“Spot” Purchases) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
One-Time Purchases of Goods of $50,000 or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Purchases of Services of $100,000 or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Direct Publications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Perishable Goods Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Distributor Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Fuel, Oil, and Grease Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Internal Repair Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Emergency Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SPD Review and Delegation Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Delegation Request for Goods Exceeding $50,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Delegation Request for Services Exceeding $100,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Competitive Bidding (IFBs, Informal Bidding) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Competitive Sealed Proposals (RFPs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Procurement Method – SPD Texas Multiple Award Schedule (TXMAS) Contracts . . . . . . . . . . . . . . . . . . . . 31
Procurement Method – Reverse Auction Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

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Procurement Method – Information Technology Procurements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Automated Information Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
DIR Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
DIR Cooperative Contracts Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
DIR Texas Multiple Award Schedule (TXMAS) Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Texas.gov Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
DIR Data Center Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Telecommunication Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
RFO Procurement Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Procurement Method – Professional Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
Procurement Method – Consulting Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
Procurement Method – Legal Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Procurement Method – Interagency Cooperation Contracts (IACs) . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
Procurement Method – Interlocal Cooperation Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
Procurement Method – State and Federal Surplus Property Programs . . . . . . . . . . . . . . . . . . . . . . . . . 43
Procurement Method – Request for Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Procurement Method – Texas Disaster Act of 1975 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Solicitation Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Solicitation ­­– IFB, RFP, RFO, RFQ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Comparison of Competitive Procurement Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Request for Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Solicitation – Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Procurement Lead Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Internal Calendar of Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Drafting Tips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Minimum Vendor Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Scope of Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Specifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Deliverables and Milestones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Professional Licenses and Certifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Established Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Monitoring Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Additional Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Payment and Pricing Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Reimbursement Methodologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

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Advance Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Early Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Retainage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Invoice Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
State and Federal Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Contract Term and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Terms and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Change Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Risk Mitigation Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Financial Capability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Surety Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Extended Warranty; Maintenance Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Limitations of Liability Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Response Submission Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Response Content, Format, and Delivery Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Execution of Bid/Offer/Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
HUB Subcontracting Plan Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Evaluation Criteria for Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Solicitation – Reviews and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
CAT – Review of Solicitations With a Value of $5 Million or More . . . . . . . . . . . . . . . . . . . . . . . . . . 64
QAT – Review of Major Information Resources Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
QAT and LBB – Review of Non-Cloud Computing Service Option . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Solicitation – Advertisement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Electronic State Business Daily (ESBD) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Texas Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Centralized Master Bidders List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Solicitation – Agency Communications With Potential Respondents . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Pre-Bid/Offer/Proposal Conferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Question and Answer Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Solicitation Addenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Communication with Agency Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Solicitation – Receipt and Control of Responses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Receipt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Late Responses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Withdrawal of Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Cancellation of Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Public Opening Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Internal Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

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VENDOR SELECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
TCI Program, State Use Program, and Term Contract Purchases . . . . . . . . . . . . . . . . . . . . . . . . . 72
Administrative Review of Responses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Evaluation – Bid Tabulation Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Evaluation – Evaluation Committee Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Evaluation Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73
Non-Disclosure Agreements and Conflict of Interest Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Evaluation of Responses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Scoring Matrix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Technical Advisors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Price Component . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Reference Check . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Vendor Performance Tracking System Check . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Clarification of Responses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Competitive Range Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Oral Presentations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Best and Final Offers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Evaluation Committee Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Preferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Reciprocal Preference Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Resolving Tie Bids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78

CONTRACT FORMATION AND AWARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79
Negotiation Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79
Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Technical Leveling, Technical Transfusion, and Other Improper Activities . . . . . . . . . . . . . . . . . . . . . . . 80
Performance Focused Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Contract Formation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Approach to Contract Formation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Legal Elements of a Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Contract Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82
Authority to Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Form of the Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

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Statewide Procurement Division

Contract Award & Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84
Pre-Award Contract and Contract Amendment Notifications, Reviews & Approvals by Oversight Agencies . . . . . .84
Major Information Resources Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
DIR – Statements of Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Notification of Proposed Assignment of Services Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Notification of Contract Extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Pre-Award Contract and Contract Amendment Compliance Checks . . . . . . . . . . . . . . . . . . . . . . . . . . .85
Agency Reviews and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Agency Verification of Use of Best Value Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Agency Verification of Complete Procurement File . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Agency Verification of Vendor Assessment Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Agency Verification of VPTS Reporting Complaince . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Agency Verification of Contract Extension Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Agency Signature - Contracts With A Value Exceeding $1 Million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Agency Verification - Contracts With A Value Exceeding $5 Million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Agency Review of Required Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SAO Nepotism Disclosure Statement for Purchasing Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
TEC Disclosure of Interested Parties (Form 1295) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Procurement and Contract Management Conflict of Interest Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Vendor Compliance Verifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Debarment Check . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
SAM Check . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Iran, Sudan, & Foreign Terrorist Organization Check . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Boycott Israel Check . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Warrant/Payment Hold Check . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Franchise Tax Check . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Preparation of Access to Agency Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Contract & Amendment Notifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .89
ESBD Notice of Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Texas Register Notice of Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Major Information Resources Project Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .89
LBB Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .89
Agency Website Postings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Certain Agency Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
DIR Statements of Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Contracts Exceeding $100,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Debriefings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Protest of Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91

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CONTRACT MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Transition from Contract Developer to Contract Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Contract Manager Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Planning and Risk Assessment Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Post Award Contractor Conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Monitoring Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Desk Reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Site Visits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97
Monitoring by Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97
Enhanced Contract and Performance Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97
Inspection, Testing, and Acceptance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .98
Testing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .98
Shipping and Receiving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .98
Carrier Shipping Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Invoice Review and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Invoice Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Withholding Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Purchase Order (PO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Payment Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Interagency Transaction Voucher (ITV) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Change Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Types of Contract Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .103
Administrative Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Substantive Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .103
Constructive Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Contract Amendment Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .103
Assignment by Contractor and Contractor Name Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104
Payment Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104
Name Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Buyout or Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Replacement Contractor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Extensions and Renewals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

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Statewide Procurement Division

Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Termination by Mutual Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Termination for Convenience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Termination for Cause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Cure Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .107
Corrective Action Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .107
Termination For Non-Appropriation, Excess Obligations Prohibited . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Agency Reporting of Contracting Information in CAPPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .107
Contract Close-Out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Vendor Performance Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .108
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Scoring a Vendor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Interpreting Existing Vendor Scores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
How Vendor Score is Calculated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Barring Vendors From Participating In State Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Records Retention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Post-Payment Audits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

VERSION HISTORY OF THE GUIDE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113

APPENDICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

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 Statewide Procurement Division

INTRODUCTION
The Texas Comptroller of Public Accounts’ (CPA) Statewide whereas procurement is, essentially, the overarching or umbrella
Procurement Division (SPD) is the central authority for state agency activity within which purchasing can be found.
procurement guidance, education, and statewide contract develop-
When using this Guide, care should be taken to gain an understanding
ment services. The SPD director serves as the Chief Procurement
of the referenced terms. The term “state agency,” for example, has
Officer (CPO) for the State of Texas.1
different meanings depending upon statutory context. As used in
The CPO has authority over state agency procurement. Authorized this Guide, the terms “state agency” and “agency” are synonymous.
to provide leadership on procurement issues, the CPO may ana- Legal citations are included throughout the Guide to provide
lyze state purchasing data to leverage state purchasing power, assistance to the reader. Also, a glossary of procurement terms
provide functional support to agencies, and provide training on and a list of selected acronyms and abbreviations are provided in
state purchasing and contract management. The CPO may also Appendix 1 and Appendix 2, respectively.
review solicitations for major contracts for information technology
Although this Guide serves as a reference manual for implementing
projects monitored by the Quality Assurance Team (QAT), review
the requirements of the State of Texas procurement laws included
solicitations for major contracts reviewed by the Contract Advisory
within it,4 this Guide is not an exhaustive compilation of every stat-
Team (CAT) and delegate certain purchasing authority to agencies.2
ute, rule, and standard that may pertain to a particular transaction.
Agencies are required to comply with any request for information
Furthermore, this Guide is not intended to be a manual on the law
from the CPO that is necessary to conduct an analysis of state
of contracts or constitute legal advice. Agencies are expected to
purchasing data to leverage state purchasing power.3
be knowledgeable about legal requirements within their enabling
SPD publishes this State of Texas Procurement and Contract statutes and any federal law associated with their operations.
Management Guide (Guide) to aid public procurement professionals Public procurement professionals are advised to seek assistance
in the execution of their duties and to provide step-by-step from their agency legal counsel to ensure that procurements com-
guidance and a framework for the continued development of public ply with state law and, if applicable, federal law as well as the best
procurement processes and best practices. practices implemented by their agency.

The procedures in this Guide primarily focus on the implementation This Guide supersedes the State of Texas Procurement Manual
of Title 10, Subtitle D of the Texas Government Code as well as Chap- and the Contract Management Guide issued by the former Texas
ters 2261 and 2262 of the Texas Government Code. Other procure- Procurement and Support Services (TPASS) division. SPD is the
ment authority is addressed in the Guide to provide a broad working successor to TPASS. Consequently, any reference to the TPASS
knowledge of commonly utilized procurement methods. division in forms, templates, or other publications held by an agency
is now a reference to SPD. All published materials referencing the
The content of this Guide is generally organized to align with the TPASS division are no longer current and agencies are directed to
procurement activities specified in the Procurement Cycle. To update and, as applicable, replace the outdated materials with the
facilitate a better understanding of the roles performed by state current SPD documents.
agency employees during the various procurement activities, this
Guide differentiates between procurement and purchasing. The term In June 2018, the Guide was first published as Version 1.0. When
procurement refers to all aspects of the sourcing activities, including modifications are made to this Guide, the version number of the
drafting and issuing the solicitation, evaluation of responses, Guide will be updated and the Version History will be revised to
selection of successful respondents, the negotiation of contracts, include a summary of the revisions. SPD may post a notification
and the actual purchasing of goods or services. By contrast, the on the CPA website of any occurrence (e.g., change in law) which
term purchasing refers to the mechanical or administrative process effects the Guide prior to a formal update to the Guide. A current
of how goods and services are ordered. Purchasing can usually be version of this Guide is maintained by SPD and is available on the
described as the transactional function of the procurement process, CPA website.5

4
Agencies making grant awards to other entities, in contrast to the procurement
1
TEX. GOV’T CODE § 2155.091. of goods or services, must follow Uniform Grant Management Standards (UGMS)
2
TEX. GOV’T CODE §§ 2155.091(b), (d), (e). published by SPD under Chapter 783 of the Texas Government Code.
3
TEX. GOV’T CODE § 2155.091(c). 5
The CPA website is located at Comptroller.Texas.Gov.

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Statewide Procurement Division

PROFESSIONAL CERTIFICATION AND TRAINING PROGRAM

SPD administers a training, continuing education, and certification program for Texas public procurement professionals. For members of the
governing bodies of agencies, SPD also provides an abbreviated training program to provide an understanding of the ethical and professional
responsibilities of public procurement professionals.6

The term “public procurement professional” refers to any agency employee that conducts Purchasing, Contract Development, or Contract
Management activities. A description of the three procurement roles is summarized in the table below.

Procurement Roles
The receipt and processing of requisitions, development of specifications, development of
statement of work, the issuance of purchase orders against existing statewide, cooperative or
Purchasing agency contracts, and the verification of the inspection of merchandise or receipt of services by
the agency. The term does not include the development of solicitations and contract awards that
must be posted to the Electronic State Business Daily (ESBD) or in the Texas Register.
The term applies to actions taken prior to contract execution, including the receipt and processing
of requisitions, assessment of need, development and review of specifications, development and
review of scopes of work, identification and selection of procurement methods, identification
Contract Development and preparation of evaluation criteria, preparation and advertising of solicitation documents,
tabulation of respondent bids, evaluation of respondent proposals, negotiation of proposals, and
the preparation and completion of contract award documents. The term does not include invoice
or audit functions.
The term applies to actions taken following contract execution, including the assessment of risk,
verification of contractor performance, monitoring compliance with deliverable and reporting
Contract Management requirements, enforcement of contract terms, monitoring and reporting of vendor performance,
and ensuring that contract performance and practices are consistent with applicable rules, laws
and the State of Texas Procurement and Contract Management Guide.

All public procurement professionals, including those from agencies exempted from the purchasing authority of SPD, must receive training
and continuing education to the extent required by SPD.7 An agency employee who is required to receive the training may not participate in
purchases by the employing agency unless the employee has received the required training.8

SPD offers two levels of certification: Certified Texas Contract Developer (CTCD) and Certified Texas Contract Manager (CTCM). Contract
Developers and Contract Managers working in Texas state government must attend mandatory courses and pass an exam to become certified
as either CTCD or CTCM. SPD also provides the continuing education required for public procurement professionals to maintain certification.
A licensed attorney employed by an agency is not required to be certified as a CTCD or CTCM.9 An overview of the training and certification
requirements for public procurement professionals is located the CPA website.10

Information regarding the course schedules is available on the CPA website.11 In addition to state agencies, employees of political subdivi-
sions, other governmental entities, and entities participating in the Texas SmartBuy Membership program may attend the training courses
hosted by SPD.

The SPD training program provides public procurement professionals with a clear understanding of statewide procurement rules and best prac-
tices. Agencies may also make specific requests for training in areas of interest. The SPD training program encourages an open dialogue with
agencies regarding the State’s procurement training to ensure that public procurement professionals are receiving the best possible education.

6
TEX. GOV’T CODE § 656.053.
7
TEX. GOV’T CODE § 656.051(c).
8
TEX. GOV’T CODE § 656.051(c).
9
34 TEX. ADMIN. CODE § 20.133(c)(5).
10
The CPA website is located at Comptroller.Texas.Gov.
11
The CPA website is located at Comptroller.Texas.Gov.

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 Statewide Procurement Division

ETHICS LAWS AND PROFESSIONAL STANDARDS

Overview
Public procurement professionals are the gatekeepers for the proper expenditure of the government’s limited financial resources. They are
entrusted to uphold the highest ethical standards and be good stewards of public funds with every purchasing decision they make. Ethical
behavior and integrity are fundamental tenets of the public procurement profession that derive from values like “fairness,” “honesty,” and
“accountability.” When an individual’s official duties clash with the individual’s personal interests, a “conflict of interest” may occur; this conflict
may impair one’s judgement when trying to determine the proper course of action. Any erosion of public trust or perception of impropriety is
detrimental to the integrity of the procurement process; therefore, all state employees involved in procurement activities must act in an ethi-
cal, impartial, transparent, and professional manner.

Nepotism. Nepotism is a form of conflict of interest that involves an explicit act of using one’s position to favor a relative. Relationships
between family members are classified by consanguinity or affinity.

• A relationship by consanguinity is one established through bloodlines. The consanguinity relationship may be either lineal (persons in a
direct line of descent) or collateral (persons not in a common line of descent but with a common ancestor).
• A relationship by affinity arises by virtue of marriage. A relationship by affinity exists between an individual and either the blood
relatives of the individual’s spouse or the spouses of the individual’s blood relatives. Stated simply, if at least two marriages are required
to establish a link between two persons, they are not related by affinity.12
There are different ways of computing degrees of relationship. Texas law computes degrees of relationship by the civil law method.13 The
table below provides descriptions of the consanguinity and affinity relationships14 that may be referenced in the various nepotism laws which
prohibit certain types of activities based on an employee’s job responsibilities, employment within a particular branch of government, or
employment by a particular agency.

Consanguinity and Affinity Relationship Chart From Public Official or Employee

Consanguinity Affinity
(Includes individuals related by blood (Includes an officials’ or employee’s spouse
to the official or employee)1 and individuals related to the spouse )2

First Degree Second Degree Third Degree3 First Degree Second Degree

Grandparents Great-grandparents Spouse Spouse’s Grandparents

Parents
Grandchildren Great-grandchildren Spouse’s Parents Spouse’s Grandchildren

Nephews & Nieces Children’s Spouses Spouse’s Brothers & Sisters

Children Brothers & Sisters
Uncles & Aunts Spouse’s Children Brothers & Sisters’ Spouses

TABLE NOTES
1
An adopted child is considered a child of the adoptive parent for this purpose.
2
Divorce or death ends relationships by affinity created by that marriage unless a child of that marriage is living, in which case the marriage is considered to continue until the
death of that child.
3
An aunt related in the third degree by consanguinity includes only aunts who are sisters of a parent of the official or employee. An uncle includes only uncles who are brothers
of a parent of the official or employee. A nephew includes only nephews who are children of a brother or sister of the official or employee. A niece includes only nieces who are
children of a brother or sister of the official or employee.

12
See Johnson v. State, 332 S.W.2d 321, 322 (Tex. Crim. App 1960).
13
TEX. GOV’T CODE § 573.021.
14
Degrees of relationships may be even more complicated and nuanced if there are any divorces and/or remarriages in either the consanguinity or affinity trees. This Guide will not
attempt to explain the various combinations and permutations that may arise under those circumstances.

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Statewide Procurement Division

Appearance of Impropriety. The root of ethical behavior in To accomplish this policy objective, the Legislature has enacted
public procurement is the commitment of public procurement statutes that detail the ethical responsibilities and disclosure
professionals to ensure they neither gain personally from, nor obligations of state officers and employees; it also authorized the
unduly favor anyone, in the execution of their official duties. They are Texas Ethics Commission to oversee and enforce many of these
guided by a duty to serve the public for whom they are employed. laws and provided civil and criminal penalties for certain violations
Accordingly, public procurement professionals must not only comply of these provisions.
with the minimum legal standards of ethical conduct established by
statutes, agency rules and policies, and professional certifications, State Standards of Conduct
but they should also conduct themselves in a manner that avoids
even the appearance of impropriety. The Legislature has established standards of conduct for state
officers and employees. A state officer or employee should not:
Resolving Ethical Dilemmas. Ethical dilemmas may arise in a
variety of situations. This Guide does not contain a comprehensive • accept or solicit any gift, favor, or service that might reasonably
tend to influence the officer or employee in the discharge of
list of every statute, agency rule, agency policy, or professional
official duties, or that the officer or employee knows or should
code of conduct that may apply to procurement activities; it does
know is being offered with the intent to influence the officer or
provide guidance on the most commonly applicable ethics laws employee’s official conduct;
and professional standards. SPD expects each public procurement
• accept other employment or engage in a business or profes-
professional to comply with all applicable legal requirements and
sional activity that the officer or employee might reasonably
use sound reasoning and best judgment to act ethically and with expect would require or induce the officer or employee to
integrity. A public procurement professional’s ethical dilemma may disclose confidential information acquired by reason of the
often be resolved by following this simple rule of thumb: If it feels official position;
wrong, it probably is wrong. When faced with an ethical dilemma, • accept other employment or compensation that could
public procurement professionals should seek assistance from a reasonably be expected to impair the officer or employee’s
supervisor, legal counsel, or agency ethics officer. independence of judgment in the performance of the officer or
employee’s official duties;
Certain Employment Restrictions and Disclosure State-
• make personal investments that could reasonably be expected
ments. Selected statutory state employment restrictions, post-
to create a substantial conflict between the officer or
employment restrictions, and required disclosures applicable to employee’s private interest and the public interest; or
public procurement personnel are located in Appendix 3. Purchas-
• intentionally or knowingly solicit, accept, or agree to accept
ers certify their compliance with Section 2155.003 of the Texas
any benefit for having exercised the officer or employee’s
Government Code by completing the Non-Disclosure and Conflict of official powers or performed the officer or employee’s official
Interest Certification located in Appendix 4. duties in favor of another.18

State Ethics Policy A state employee who violates the state standards of conduct or
the agency’s ethics policy is subject to termination of employment
It is the policy of the State of Texas that a state officer15 or state or another employment-related sanction, and any applicable civil or
employee16 may not have a direct or indirect interest, including criminal penalty if the violation also constitutes a violation of another
financial and other interests, or engage in a business transaction statute or rule.19 Additionally, agencies may not use appropriated
or professional activity, or incur an obligation of any nature that is funds to compensate a state employee who violates the state
in substantial conflict with the proper discharge of the officer or standards of conduct.20
employee’s duties in the public interest.17
Bribery
15
A “state officer” is defined as an elected officer, an appointed officer, a salaried
appointed officer, an appointed officer of a major state agency, or the executive Bribery is a criminal offense. Bribery occurs if a person intention-
head of a state agency. TEX. GOV’T CODE §572.002(12).
ally or knowingly offers, confers, or agrees to confer on another, or
16
A “state employee” is defined as an individual, other than a state officer, who is
employed by a state agency, Texas appellate courts or the Texas Judicial Council, solicits, accepts, or agrees to accept any benefit as consideration
either house of the Texas legislature or a legislative agency, council, or committee,
including the Legislative Budget Board, Texas Legislative Council, State Auditor’s 18
TEX. GOV’T CODE § 572.051(a).
Office, and Legislative Reference Library. TEX. GOV’T CODE §572.002(11). 19
TEX. GOV’T CODE § 572.051(b).
17
TEX. GOV’T CODE §572.001(a). 20
TEX. GOV’T CODE § 2113.014(a).

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 Statewide Procurement Division

for a violation of a public servant’s legal duty or a public servant’s Not all gifts are prohibited.31 Under this statute, some state employ-
decision, opinion, recommendation, vote, or any other exercise of ees may accept non-cash items of less than $50 in value.32 For exam-
discretion.21 A salary is a benefit.22 A state employee, therefore, is ple, promotional or commemorative items of minimal value such as
subject to criminal prosecution if the employee accepts employ- caps, coffee mugs, t-shirts, key rings, and discount coupons, do not
ment as consideration for an official act.23 A bribery offense occurs constitute an improper benefit if such items are not solicited and not
even if the benefit is offered after the employee has acted in a offered or accepted in exchange for any action or inaction on the
manner desired or after the employee has ceased working for the part of public servants.33 It is also permissible to accept a gift from a
State.24 However, bribery does not occur if the benefit is a political friend, relative, or business associate with whom a state employee
contribution defined by Title 15 of the Election Code or an expendi- has a relationship independent of the person’s official status, pro-
ture made and reported in accordance with the lobby statute.25 vided that the gift is given on account of the personal relationship
and not on account of the official status.34
Gift to Public Servant
Misuse of Official Information
It is a criminal offense for a public servant to accept a benefit from
a person subject to his jurisdiction.26 This statute prohibits seven As a result of employment with the State of Texas, a state
(7) types of conduct by state employees and these prohibitions employee may have access to information the public does not.
apply regardless whether the donor seeks or expects anything in A state employee faces criminal liability if the person uses informa-
consideration for the benefit.27 A regulatory agency employee, for tion that has not been made public and was obtained during the
example, may not solicit, accept, or agree to accept any benefit from course of official duties for a private purpose. The term “information
a person the employee knows is subject to regulation, inspection, or that has not been made public” means any information to which
investigation by the agency.28 the public does not generally have access, and that is prohibited
from disclosure under the Texas Public Information Act, Chapter 552
It is also an offense for a public servant who exercises discretion of the Government Code.35 A public servant commits an offense if,
in connection with contracts, purchases, payments, claims, or by relying on nonpublic information, the person (1) acquires or aids
other pecuniary transactions of government to solicit, accept, or another to acquire a pecuniary interest in any property, transaction,
agree to accept any benefit from a person who the public servant or enterprise that may be affected by the information, (2) specu-
knows is interested in or likely to become interested in any contract, lates or aids another to speculate on the basis of the information, or
purchase, payment, claim, or transaction involving the exercise of (3) as a public servant, coerces another into suppressing or failing
the public servant’s discretion.29 Acceptance of a gift may also be to report that information to a law enforcement agency.36 A public
prohibited if the donor of the gift is a registered lobbyist.30 servant also commits an offense if, with intent to obtain a benefit
21
TEX. PENAL CODE § 36.02(a). or with intent to harm or defraud another, the person discloses or
22
Tex. Ethics Comm’n Op. No. 155 (1993). uses information for a non-governmental purpose that the person
23
Tex. Ethics Comm’n Op. No. 205 (1994) (although the laws subject to interpretation
has access to by means of office or employment and that informa-
by the Ethics Commission do not specifically address negotiations for future
employment, the bribery law would prohibit a legislator from accepting or soliciting tion has not been made public.37
future employment in exchange for some official action on the part of the legislator
during the remainder of the term of office and statutory standards of conduct
prohibit a state officer or employee from accepting employment or compensation
that might impair his or her independence of judgment in performing official
duties).
24
TEX. PENAL CODE § 36.02(c).
25
TEX. PENAL CODE § 36.02(d).
26
TEX. PENAL CODE § 36.08; Tex. Ethics Comm’n Op. No. 139 (1993) (the purpose
of the prohibition on gifts is to prevent even the appearance that government
decisions are influenced by personal gifts to government officers and employees). 31
TEX. PENAL CODE § 36.10. Whether a state employee may accept a gift, even one
27
Id.; Tex. Ethics Comm’n Op. No. 425 (2000); c.f. TEX. PENAL CODE § 36.02 of de minimis value, depends on the status of the donor as well as the nature of the
(providing that bribery occurs when a benefit is in consideration for a discretionary gift. Tex. Ethics Comm’n Op. No. 130 (1993).
act or duty). 32
TEX. PENAL CODE § 36.10(a)(6); but see general discussion of ethics laws including
28
TEX. PENAL CODE § 36.08(a). TEX. GOV’T CODE § 2155.003.
29
TEX. PENAL CODE § 36.08(d). 33
Tex. Ethics Comm’n Op. Nos. 61, 66 (1992).
30
TEX. GOV’T CODE §§ 305.024, 305.025 (provisions relating to lobby activities); 34
TEX. PENAL CODE § 36.10(a)(2).
Tex. Ethics Comm’n Op. No. 118 (1993) (explaining that for a state employee to 35
TEX. PENAL CODE § 39.06(d).
accept a gift or other expenditure, it must be permissible under both the lobby 36
TEX. PENAL CODE § 39.06(a).
statute and the Texas Penal Code). 37
TEX. PENAL CODE § 39.06(b).

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Statewide Procurement Division

Misuse of Government Property reasonable and prudent person to believe that an offense may have
been committed.45 Employees and vendors who become aware of
State law prohibits the misuse of governmental resources.38 Gov- a situation that involves suspicious activities or fraudulent acts may
ernmental resources include computers, copiers, supplies, and staff also report the allegations to SAO.
time.39 A public servant commits an offense if, with intent to obtain a
benefit or with intent to harm or defraud another, the person inten- The SAO coordinates investigatory work with internal auditors, fed-
tionally or knowingly misuses anything of value belonging to the eral and state prosecutors, and law enforcement agencies at the
government that has come into the person’s custody or possession city, county, state, and federal levels. Criminal offenses investigated
by virtue of the person’s office or employment.40 A public servant, by SAO include, but are not limited to, the following:
for example, may face criminal prosecution for use of a state-issued • theft,
credit card for a personal expenditure that is not an agency-autho-
• forgery,
rized state business expense.41
• tampering with a governmental record,

Suspected Fraud, Waste, or Abuse • securing execution of document by deception,

• misapplication of fiduciary property,
Each agency must develop and comply with a purchasing account-
• conversion of funds,
ability and risk analysis procedure that includes an assessment of
the risk of fraud, abuse, or waste in the contracting process, contract • abuse of official capacity,
provisions, and payment and reimbursement rates and methods • gift to a public servant by a person subject to his or her jurisdic-
for the different types of goods and services for which the agency tion, and
contracts.42 The State Auditor’s Office (SAO) investigates allegations • bribery.
of fraud, waste, or abuse.43 Administrative heads of agencies who
Reports of fraud, waste, or abuse involving state resources may be
have reasonable cause to believe that money was lost, misappro-
submitted through the SAO website,46 by phone at 1-800-TX-AUDIT
priated, or misused, or that other fraudulent or unlawful conduct
(892-8348), or by mail to State Auditor’s Office, Attn: IAS, P.O. Box
has occurred are required to report this information to the SAO.44 A
12067, Austin, TX 78711-2067. Someone who reports fraud may
reasonable cause to believe exists when a set of facts would lead a
choose to remain anonymous.47

38
TEX. PENAL CODE § 39.02(a)(2).
39
See e.g., Tex. Ethics Comm’n Op. No 134 (1992).
40
TEX. PENAL CODE § 39.02(a)(2).
41
Tex. Ethics Comm’n Op. No. 147 (1993).
42
TEX. GOV’T CODE § 2261.256. 45
FAQ posted to SAO website at www.sao.texas.gov.
43
TEX. GOV’T CODE § 321.013, et seq. 46
The SAO website is located at www.sao.texas.gov.
44
TEX. GOV’T CODE § 321.022(a). 47
https://sao.fraud.texas.gov/.

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 Statewide Procurement Division

VENDOR COMMUNICATION
Communication between public procurement professionals and include designating specific agency points of contact for receipt of
vendors is imperative and encouraged. If used effectively, com- vendor inquiries, a public question and answer process (Q&A process),
munication with industry representatives is a vital resource for and pre-bid/offer/proposal conferences. When issuing a solicitation,
public procurement professionals. Steps must be taken, however, it is always encouraged that an agency should include a Q&A process,
to maintain a fair opportunity to compete for all vendors and avoid as that will be the only time where an agency can benefit from
any appearance of favoritism. Agency personnel must be mindful vendors’ input on the solicitation and make any necessary corrections
that one-on-one communications with vendors occurring prior to to the solicitation through the addendum process. Failure to allow
contract award are subject to enhanced scrutiny due to the impor- for vendor input during a Q&A process may result in higher costs
tance of maintaining a “level playing field” among all eligible ven- to the agency if the specifications are unclear prompting vendors
dors during competitive procurements. If there is any doubt about to bid high to cover unforeseen costs, or a non-award requires a
appropriate communications with vendors, consult with agency supplemental solicitation.
legal counsel.
If any information relevant to the procurement such as evaluation
Fact Gathering. Texas law authorizes the exchange of information methods or projected ordering volumes is provided to any vendor,
between an agency and a vendor related to future solicitations.48 that information should be released to the public without delay. This
Vendors are often experts in their respective fields and can offer includes information shared at conferences attended by some but
insight on potential purchases, such as current trends, industry not all potential vendors.
practices, and available products or solutions. The procurement
If an agency offers assistance with HUB subcontracting plans, such
team should develop a plan to obtain any needed vendor input,
assistance should be made available from a designated person,
which may include issuance of a Request for Information (RFI),
preferably the agency’s HUB coordinator, who will not be an
attendance at industry days, or directly contacting industry leaders
evaluation committee member, and it should be offered and provided
or vendors listed under the applicable code on the CMBL. The result
to all vendors equally. Agency policy may allow assistance with HUB
of these interactions may lead to increased competition, a more
plans during the entire posting period. To ensure a level playing field,
detailed and up-to-date description of technical requirements or
any contact between vendors and end users or evaluators should be
scope of work, and ultimately better value for the State. However,
avoided during the solicitation posting period, and if a vendor fails
Contract Developers must never tailor specifications to benefit a
to obey by the guidelines regarding vendor communication posted
particular vendor, as this limits competition. Care should be taken
in the agency solicitation, the vendor’s proposal may be subject
to avoid the appearance of favoritism toward certain vendors in the
to disqualification.
fact-gathering process and when possible, agencies should avoid
consulting exclusively with the incumbents or a small number of Evaluation and Negotiation. Allowable vendor-public procure-
vendors, which could give the appearance of favoritism. ment professional interactions between the response due date and
contract award include:
Drafting the Solicitation. When all fact gathering is completed
and the actual solicitation-drafting process has begun, vendor com- • clarification of a respondent’s ability to meet the solicitation
munication must cease to ensure the integrity of the procurement. requirements;
Contract Developers may use relevant information gathered from • negotiations, as appropriate based on the procurement
the vendor community when drafting specifications. Finally, if a ven- method, including request for best and final offer (BAFO); and
dor is compensated by an agency for its assistance in drafting speci-
• the exchange of information as necessary to facilitate a
fications or scope of work for a solicitation, the vendor will not be potential contract award.
eligible to bid on the resulting contract.49
Evaluation and vendor selection should be based on response doc-
During the Solicitation. Once the solicitation is issued, uments formally submitted by each vendor, not other communica-
communications between procurement professionals and vendors tions. If one vendor is provided an opportunity to clarify its response,
should follow the procedure outlined in the solicitation. This could similarly situated vendors should receive the same opportunity.
48
TEX. GOV’T CODE § 2155.090(b).
49
TEX. GOV’T CODE §§ 2155.004, 2155.090(b).

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Statewide Procurement Division

SPD, DIR, OVERSIGHT TEAMS, AND PLANNING DOCUMENTS

Overview SPD provides procurement support services to agencies, entities
participating in SPD’s cooperative purchasing program, and the
SPD and DIR each operate independent statewide centralized vendor community. SPD publishes and maintains this Guide and
purchasing programs. Both agencies leverage the State’s buying administers the State’s professional procurement certification and
power in order to maximize competition to provide cost-effective training program. In addition, SPD manages the following programs
products and services to agencies and other eligible public-sector that are utilized for both for IT and non-IT procurements:
customers. SPD and DIR serve on two interagency oversight teams
— the Contract Advisory Team (CAT) and Quality Assurance Team • Centralized Master Bidders List (CMBL),
(QAT) — which seek to improve agency procurement and contract • Historically Underutilized Business Program (HUB),
management practices, as well as the Procurement Coordination • Electronic State Business Daily (ESBD), and
Committee. The Procurement Coordination Committee was created • Vendor Performance Tracking System (VPTS).
by the Legislature in 2013 and is charged with reviewing DIR and
A summary of SPD programs and online systems is located in
SPD procurement functions to identify areas of overlap, mutually
Appendix 5.
beneficial contracting methodologies, data management, customer
relations, and consolidation opportunities; developing standard
data collection and cost savings methodologies; and reporting DIR
findings to the Sunset Advisory Committee.50
DIR is the State’s information technology and telecommunications
agency. By leveraging the buying power of the State for technology
SPD purchases, DIR provides a range of IT and telecommunications
products and services to agencies and eligible voluntary customers,
SPD is the State’s central authority for the procurement of non-IT
including local governments and universities.
goods and services.51 SPD’s primary functions include managing
statewide contracts, exercising procurement authority delegation of DIR coordinates and supports the IT and telecommunications needs
specific purchases to individual agencies, and providing guidance of the State by carrying out the following key functions:
on procurement practices which foster effective competition and
ensure the quality and integrity of state purchases. • provides statewide IT strategic planning, reporting, and
standards setting;
SPD leverages the State’s buying power by developing statewide • provides guidance and oversight of state information security
Term Contracts and establishing TXMAS contracts for large-volume which includes operation of the Network Security Operations
non-IT goods and services. These contracts are available on Texas Center, creation of the State Information Security Advisory
SmartBuy. Texas SmartBuy, managed by SPD, is the State’s central Committee and Texas Cybersecurity Council, and education
e-procurement system for non-IT goods and services. Almost 2 and outreach for Information Resources Managers;
million items are available through Texas SmartBuy for agencies as • oversees three major statewide programs: (1) TEX-AN, the
well as local governments and state-funded non-profit organizations State’s telecommunications system, (2) Texas.gov, the official
through SPD’s Texas SmartBuy Membership program.52 website of Texas, and (3) consolidated data center services for
agencies;
• procures and manages statewide cooperative contracts for IT
products and services; and
50
TEX. GOV’T CODE § 2155.007.
51
In 2007, the functions of the Texas Building and Procurement Commission were • operates the Capitol Complex Telephone System (CCTS).
divided between the TFC, its successor agency, and CPA. House Bill 3560 of the
80th Legislature transferred to CPA the statewide procurement function, fleet
management, historically underutilized business program, and support services
of the Texas Building and Procurement Commission. At that time, CPA became
the State’s purchasing manager, awarding and managing hundreds of statewide
contracts on behalf of more than 200 state agencies and 1,600 cooperative
purchasing members.
52
TEX. GOV’T CODE §§ 2155.061, 2155.204.

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 Statewide Procurement Division

DIR also provides technology policy, planning, and standards that Quality Assurance Team
help shape consistent and effective use of technology across
the state, addressing areas such as statewide project planning, The Quality Assurance Team (QAT) is an interagency working group
electronic information resources (EIR) accessibility, and best prac- established in 1993 to provide on-going oversight to reduce risk
tice guidance in new technologies. Furthermore, as the State’s of project overruns and failures of major information resources
technology agency, DIR provides state leadership with updates on projects that receive appropriations from the Legislature. Risk, for
technology issues relevant to agencies. purposes of the QAT, is defined as the likelihood that a project will
not deliver a quality solution based on the timeline, budget and
Contract Advisory Team scope commitments made to state leadership.

The Contract Advisory Team (CAT) was created in 2001 to assist The QAT fulfills its purpose primarily by executing the following
agencies in improving contract management practices. In addition strategies:
to reviewing and making recommendations on the solicitation docu- • reviews and provides recommendations on contracts for
ments for contracts by agencies that have an estimated value of at the development or implementation of a major information
least $5 million, the CAT also resources project with a value of at least $10 million;

• reviews any findings or recommendations made by the • implements a standard, repeatable, predictable, and transpar-
state auditor, including those made regarding an agency’s ent quality assurance process;
compliance with this Guide; • reviews deliverables produced by projects, including proactive
• provides recommendations to SPD regarding the development monitoring of project outcomes;
of this Guide and training; • requires development of a corrective action plan for projects
• provides recommendations and assistance to agency person- based on identification of project risks;
nel throughout the contract management process; • reports to stakeholders (state leadership, agency leadership,
• coordinates and consults with the QAT on all contracts relating agency project team) the QAT assessment of the health and
to a major information resources project; overall status of projects; and

• develops and recommends policies and procedures to improve • elevates significant issues to state leadership and advises on
agency contract management practices; alternative methods for correction.

• develops and recommends procedures to improve agency All agencies are subject to QAT oversight, with the exception of
contracting practices by including consideration for best value; institutions of higher education and self-directed, semi-independent
and state agencies. The QAT is composed of representatives of the LBB,
• creates and periodically performs a risk assessment to DIR, and CPA, with SAO participating as an advisor.56
determine the appropriate level of management and oversight
of contracts by agencies.53 Agency Procurement Plan
As of May 1, 2018, the CAT consists of six members, one from
Each agency must complete an agency procurement plan that
each of the following agencies: CPA, DIR, Health and Human
identifies its management controls and purchasing oversight authority
Services Commission, Office of the Governor, TFC, and DPS.
in accordance with the policy guidance contained in this Guide.57
Agency membership on the CAT is either designated by statute or
Agencies must submit a current procurement plan to SPD annually
appointment by the CPO.54 SAO and LBB serve as technical advisors
by November 30. The Agency Procurement Plan Template and
to the CAT and the OAG provides legal assistance to the CAT. 55
submission information are located on the CPA website.58 SPD uses
information submitted in the procurement plans to analyze state
spend and opportunities for contract consolidation at the state-
wide level, and as a reference for agency personnel’s authority to
submit procurement requests, such as open market requisitions or
delegation requests.

53
TEX. GOV’T CODE § 2262.101(a). 56
TEX. GOV’T CODE § 2054.158.
54
TEX. GOV’T CODE § 2262.102(a-1). 57
TEX. GOV’T CODE § 2155.132(c); 34 TEX. ADMIN. CODE § 20.132(b).
55
TEX. GOV’T CODE § 2262.102(b)-(c). 58
The CPA website is located at Comptroller.Texas.Gov.

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Statewide Procurement Division

Historically Underutilized Business Agency Contract Management Handbook

Program Reports Each agency must publish a contract management handbook that
Each agency must maintain, and compile monthly, information establishes consistent contracting policies and practices to be fol-
relating to the agency's and each of its operating divisions’ use of lowed by the agency and that is consistent with this Guide.67 The
Historically Underutilized Businesses (HUBs), including information agency’s handbook may include standard contract provisions and
regarding subcontractors and suppliers.59 On a monthly basis, each formats for the agency to incorporate in contracts.68
agency must require its prime contractors to report to the agency
the identity and amount paid to each HUB and non-HUB subcontrac- Agency Contract Management Procedures
tor to whom the prime contractor has awarded a subcontract for the
Each agency must develop and comply with a purchasing
purchase of supplies, materials and equipment.60 Prime contractors
accountability and risk analysis procedure. The procedure must
must report to the applicable agency the progress payments made
provide for
to subcontractors and suppliers each month in which such payment
is made.61 1. assessing the risk of fraud, abuse, or waste in the vendor
selection process, contract provisions, and payment and
On a form prescribed by SPD, each agency must report to SPD, not
reimbursement rates and methods for the different types of
later than March 15 of each year regarding the previous six-month goods and services for which the agency contracts;
period and on September 15 of each year regarding the preceding
2. identifying contracts that require enhanced contract moni-
fiscal year, the total dollar amount of HUB and non-HUB contracting
toring or the immediate attention of contract management
and subcontracting participation in all of the agency’s contracts for staff; and
the purchase of goods, services and public works payments.62 Agen-
3. establishing clear levels of purchasing accountability and
cies must include contracting and subcontracting participation paid
staff responsibilities related to purchasing. 69
from treasury and non-treasury funds.63
The agency shall post on the agency’s website the procedures
SPD will prepare a consolidated report based on a compilation and
described in paragraphs (2) and (3) above and submit to SPD a link
analysis of the reports submitted by each state agency and other
to the web page that includes the procedures.70 The link to each
information available to SPD.64 These reports of HUB purchasing and
agency’s contract management procedures is located on the CPA
contracts shall form a record of each agency's purchases in which
website.71
the agency selected the contractor.65 On May 15 of each year, SPD
will submit the consolidated report regarding the previous six-month
period and on November 15 of each year regarding the preceding
fiscal year to the presiding officer of each house of the Legislature.66

59
TEX. GOV’T CODE § 2161.122(a).
60
TEX. GOV’T CODE § 2161.122(a).
61
TEX. GOV’T CODE § 2161.122(b).
62
TEX. GOV’T CODE § 2161.121(b). 67
TEX. GOV’T CODE § 2261.256(b).
63
TEX. GOV’T CODE § 2161.121(c). 68
TEX. GOV’T CODE § 2261.256(b).
64
TEX. GOV’T CODE § 2161.121(a). 69
TEX. GOV’T CODE § 2261.256(a).
65
TEX. GOV’T CODE § 2161.122(e). 70
TEX. GOV’T CODE § 2261.256(c).
66
TEX. GOV’T CODE § 2161.121(d). 71
The CPA website is located at Comptroller.Texas.Gov.

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 Statewide Procurement Division

THE PROCUREMENT CYCLE

Before engaging in any public procurement activities, it is important to understand that there are common characteristics between all procure-
ments and following each of the processes outlined below ensures that the procurement is conducted in a transparent and efficient manner.

The Procurement Cycle identifies the five steps performed by public procurement professionals for every procurement.

The steps of the Procurement Cycle are summarized as follows:

1. Procurement Planning: Define the business need and establish the procurement objectives;
2. Procurement Method Determination: Identify the appropriate Procurement Method and, if applicable, issue a solicitation;
3. Vendor Selection: Fairly and objectively select the vendor that provides best value to the State;
4. Contract Formation & Award: Ensure that the awarded contract complies with applicable procurement law and contains provisions that
achieve the procurement objectives; and
5. Contract Management: Administer and enforce the terms of the contract.

The remainder of the Guide is organized to provide practical suggestions as well as best practices for the procurement activities associated
with each step of the Procurement Cycle.

Procurement
Planning Procurement
Method
Determination

Contract
Management
Vendor
Selection

Contract
Formation &
Award

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Statewide Procurement Division

PROCUREMENT PLANNING
Overview at trade shows, discussions with other customers, and consultations
with industry representatives.
The procurement process begins with procurement planning. This
is a crucial step to the successful outcome of any procurement Historical Spend Analysis. Historical spend analysis is a tool
because, with proper planning, an agency is likely to achieve its used to optimize an agency’s buying power. By studying an agency’s
procurement objectives in an efficient and timely manner. Planning purchasing data, public procurement professionals seek, among
activities, at a minimum, include developing a needs assessment, a other things, to identify cost savings, which may be available by
cost estimate and an Acquisition Plan. The most common procure- consolidating purchases or diversity, and areas for improvement
ment planning document is the purchase requisition. of administrative efficiencies.74 For instance, a study of an agency’s
spending pattern may reveal that the agency is missing a volume
Vendors also need time to plan for solicitations. To achieve a strong discount opportunity when it makes multiple single purchases
pool of responses, agencies are encouraged to develop a six-month rather than consolidating the individual purchases together as a
calendar of upcoming solicitations and post it on their agency web- bulk purchase.
site.  This will allow interested vendors time to allocate sufficient
staffing resources for a response and foster greater competition for Benchmarking. Benchmarking is used by public procurement
goods and services. Solicitations calendars are tentative and non- professionals to compare a particular item, service, or process with
binding and remain subject to change at the agency’s discretion.  other entities or an established industry standard. The objective of
benchmarking is to obtain a “measure” that can then be used to
identify opportunities for improvement. For example, for a product
Needs Assessment that an agency is using under an expiring contract, benchmarking
The success of the procurement is often dependent upon how well for the subsequent procurement would include an analysis of
the business requirements are documented during the Procurement the product capabilities currently available in the market and the
Planning phase. The needs assessment, therefore, must contain suf- associated price per standard unit. This practice helps to ensure
ficient detail to identify the key business requirements. As part of that the agency is not procuring an outmoded replacement product
the needs assessment, the agency may conduct market research, for the same or similar price as a product with far more advanced
study historical spend, use benchmarking, and issue a Request for capabilities.
Information (RFI) to the vendor community.
Request for Information (RFI). An RFI  is a formal research
When conducting the needs assessment, public procurement profes- method used by an agency to gather information directly from the
sionals must be mindful that an agency may not accept a response industry about a particular type of product or service. One of the
or award a contract to a vendor that received compensation from benefits of the RFI process is that information, pertinent to an agen-
the agency to participate in the preparation of the specifications or cy’s business need, is obtained in real-time directly from the vendor
solicitation on which the proposal or contract is based.72 A respon- community regarding applicable industry standards, best practices,
dent or contract participant, however, may provide free technical potential performance measures, cost structures or pricing method-
assistance to an agency.73 ologies, and feedback on innovative items.

Market Research. Market research is routinely used by public A common practice is to publish the RFI on the ESBD or submit
procurement professionals to obtain information relating to the size the RFI to an appropriate professional or trade organization. This
of the potential vendor pool, pricing, applicable industry standards, practice has the benefit of not only utilizing a venue that optimizes
market trends, and determine if the item or service to be purchased access by the vendor community, but also serves to control vendor
is readily available in the commercial marketplace. Market research communications so that they only occur with designated agency
may include online research, review of industry periodicals and contacts. By establishing a prescribed communication protocol at
information obtained from professional organizations, attendance the beginning of the RFI process, the agency is ensuring that a “level

See General Appropriations Act, House Bill 1, 86th R.S. at Article IX, Section
74

72
TEX. GOV’T CODE § 2155.004(a). 17.10(c) (directing agencies to make a good faith effort to identify and execute
73
TEX. GOV’T CODE § 2155.004(e). savings and efficiencies in their use of contracted goods and services).

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 Statewide Procurement Division

playing field” is maintained within the vendor community if there is a Informal Budget Quotes. When preparing a cost estimate, the
subsequent procurement initiative. agency may choose to contact several vendors to obtain pricing
information by means of an “informal budget quote.” The agency
It is important to note that an RFI is  not a procurement  opportu-
must clearly explain to all contacted vendors that the price estimate
nity; a contract cannot be developed from a response to an RFI.75
is sought for informational purposes only and that the agency’s
Responses to an RFI are strictly voluntary and there is no downside
request for an estimate is not a formal solicitation. When obtaining
for vendors who choose not to participate; consequently, an RFI
price estimates from vendors, care must be taken to avoid giving a
cannot be used to establish a pre-qualified vendor list as voluntary
vendor any competitive advantage in a future procurement initiative.
participation in the RFI process cannot disadvantage vendors that
choose not to participate. Vendors may choose not to participate Funding Source. As part of the procurement planning activities,
in RFIs for a variety of reasons. For instance, a vendor may have a the agency should determine the funding source that will be used
company policy of not responding to RFIs. Vendors may also decide, to pay the vendor. Sources of funding include: General Revenue,
on a case-by-case basis, not to respond to RFIs seeking information General Revenue-Dedicated accounts, Federal Funds, and Other
readily available on the internet.  The number of responses to an Funds. The agency must ensure that the procurement complies with
RFI, therefore, should not be used to gauge industry interest in any any laws, special regulations, restrictions or limitations applicable
subsequent procurement initiative. to the source of funding. Information regarding funds and accounts
may be found in the Texas Comptroller Manual of Accounts posted
An agency may choose to use information received from RFI
on the CPA website.76 In addition, agencies planning to use grant
responses to develop specifications for a solicitation. Responses to
funds must also comply with any applicable grant requirements or
RFIs, therefore, are public information. Public procurement profes-
special conditions imposed by the underlying grant award that will
sionals must be mindful not to provide any information during the
fund the procurement.
RFI process that would give a vendor an advantage in a later pro-
curement or could be construed as preliminary negotiations. If RFI Allowable Use of Appropriated Funds. The agency must
respondents are requested to deliver oral presentations, the same ensure that the procurement is not prohibited by law, including the
agency staff should attend all presentations and the respondents General Appropriations Act. For example, agencies may not use
should be offered the same amount of time to conduct their presen- appropriated funds for the following goods and services unless the
tations. It is best practice for RFI activities to conclude prior com- procurement falls within a statutorily authorized exemption:
mencement of specifications drafting.
• alcoholic beverages; 77

Cost Estimate • an audit of the financial records or accounts of the agency;78

• postage or a post office box from an entity other than the U.S.
The agency must develop a cost estimate as well as make an ini- postal service;79
tial determination of the funding source that will be used for the • membership in or dues for professional organizations;80
procurement during the Procurement Planning phase. Depending
• live or artificial indoor plants;81
on the procurement, a cost estimate may be developed from a ven-
dor’s advertised price list, developed through online research, or
may be prepared using standardized estimation methods and based
on historical spend. The purchaser may contact someone within the 76
The CPA website is located at Comptroller.Texas.Gov.
agency who has knowledge in the subject area to assist with the 77
TEX. GOV’T CODE §§ 2113.001(2), 2113.101 (exception for public junior colleges
and authorized law enforcement purposes).
cost estimate. The cost estimate must be developed in good faith as 78
TEX. GOV’T CODE §§ 2113.001(2), 2113.102 (exception for public junior colleges,
it will be used not only in the selection of the appropriate procure- the Texas lottery, the Texas Department of Housing and Community Affairs, the
Texas Turnpike Authority division of the Texas Department of Transportation,
ment method, but also for compliance with statutory requirements
certain audits of payments received from the federal government, audits for certain
that may be applicable to the purchase based on contract value, grants, loans, or other money to an entity other than a state agency, and certain
funding source or expenditure restrictions and prohibitions. internal auditors or to a contract with the state auditor).
79
TEX. GOV’T CODE §§ 2113.001(2), 2113.103 (multiple exceptions).
80
TEX. GOV’T CODE §§ 2113.001(2), 2113.104 (exception for prior review and
approval of the expenditure by the administrative head, or designee, of the state
75
There is no prescribed format for an RFI. For RFIs issued in the form of a draft agency, institution of higher education, or university system, public junior colleges,
solicitation-style document published on the ESBD, the document must be and the state library).
conspicuously identified as an RFI i.e., a document issued for the purpose of 81
TEX. GOV’T CODE §§ 2113.001(2), 2113.105 (exception for public junior colleges
seeking vendor community feedback that will be considered by the agency in the and plants purchased by institutions of higher education for education or research
development of the actual solicitation. purposes).

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Statewide Procurement Division

• private facilities for meetings, conferences or exams;82 and The objective of the Acquisition Plan is to ensure that the procure-
• generally informational, promotional, or educational periodi- ment is solicited, negotiated, executed, and managed in a way that
cals and publications issued by the agency intended for use delivers best value to the State. Accordingly, the Acquisition Plan
by the general public and not essential for achievement of a tracks all of the procurement activities that take place throughout
statutory objective of the agency.83 the Procurement Cycle. The Acquisition Plan identifies the procure-
Information regarding how to properly carry out purchase transactions ment team (including the Contract Developer, Contract Manager,
while complying with certain provisions of the constitution, and end user), the team’s roles and responsibilities, the schedule
statutes, and rules related to expenditures may be found on of events, as well as the activities necessary to ensure that the
eXpendit State Purchase Policies located on the CPA website.84 contract requirements are satisfied, the goods and services are
Public procurement professionals should seek guidance from delivered in a timely manner, and the financial interests of the
agency legal counsel to determine if an exception exists when there agency are protected.
is a need to purchase a generally prohibited item.
To aid public procurement professionals in the development of
an Acquisition Plan, a procurement value threshold chart is located
Acquisition Plan in Appendix 7. Also, a sample procurement file checklist is located
in Appendix 8. A procurement file checklist is a tool used for docu-
The Contract Developer, using the needs assessment and the cost
menting compliance with applicable procurement laws, rules, and
estimate, will determine the procurement strategy or approach for
agency practices.
obtaining the requisite goods or services. For relatively simple and
routine procurements, like purchases using the set aside programs Prior to contract award, the Acquisition Plan should be updated
(State Use program and TCI program), Texas SmartBuy, or informal to address significant changes to the overall procurement effort,
bidding, the Acquisition Plan may be documented as an agency including changes to any identified assumptions that may impact
procedure. For other procurements, the Contract Developer will the procurement scope or constraints to the procurement process.
develop a unique Acquisition Plan for each purchase. Factors After contract award, the Acquisition Plan is used during the transi-
to be considered by the agency in determining which procure- tion from Contract Developer to Contract Manager. A well-drafted
ments require individual Acquisition Plans include the following: Acquisition Plan will assist the Contract Manager in managing the
procurement type (e.g., furniture, software maintenance, consulting contract throughout its term.
services), contract complexity, dollar value, and whether the pro-
curement is part of a larger organizational project.

An agency may develop its own internal version of an Acquisition

Plan. A sample Acquisition Plan is located in Appendix 6. DIR has
also developed an Acquisition Plan template, which is available on
the DIR website,85 for technology procurements as part of the Texas
Project Delivery Framework.

82
TEX. GOV’T CODE §§ 2113.001(2), 2113.106 (exception for public junior
colleges or if state facilities are not available when needed, are not adequate to
accommodate the meeting, conference, or examination, or are not an economically
favorable alternative to other facilities).
83
TEX. GOV’T CODE §§ 2113.001(2), 2113.107(b) (multiple exceptions).
84
The CPA website is located at Comptroller.Texas.Gov.
85
The DIR website is located at www.dir.texas.gov.

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 Statewide Procurement Division

PROCUREMENT METHOD DETERMINATION

Overview The importance of selecting the proper procurement method cannot
be overstated. Particular care must be taken to ensure that the correct
The second step of the procurement process is to determine which procurement method is identified early in the procurement process. If
procurement method would best achieve the identified business the incorrect procurement method is selected, the purchase will not
requirements and procurement objectives. SPD and DIR are charged result in best value to the State and will most likely be more expensive
with the responsibility of establishing and overseeing statewide and less efficient than if the correct method was used, and, in the
contracts for use by agencies. Agencies must use SPD and DIR des- worst case, may result in a void contract that must be re-solicited.
ignated procurement methods unless the procurement is subject to
a statutorily specified exclusion or authorized exemption. The process for selecting the appropriate Procurement Method is
outlined below.
This Guide primarily focuses on procurement methods that are within
SPD and DIR’s procurement authority. Public procurement profes- Step 1: Is the purchase subject to a Declaration of Disaster by the
sionals are expected to be knowledgeable about any exclusions or Governor?
exemptions from SPD or DIR statewide procurement authority that If yes, follow acquisition procedures for the Texas Disaster
pertain to their agencies. An exclusion or exemption occurs when Act of 1975.

1. the procurement is not within the general grant of statutory If no, proceed to Step 2.
authority to SPD or DIR, or
Step 2: Can the purchase be completed using State or Federal
2. a particular agency, procurement type, or contract value is surplus property?
designated to be outside of SPD or DIR’s authority.
If yes, follow acquisition procedures for the State and Fed-
Upon written request, SPD shall determine the source of purchasing eral Surplus Property Programs, as applicable.
authority for a particular procurement.86 If no, proceed to Step 3.
Best Value to the State. Texas law mandates that contract Step 3: Is the purchase for professional services, consulting
awards may only be made to responsive vendors providing best services, or legal services?
value to the State. The best value standard may vary depending on
If yes, follow the acquisition procedures for Professional
the procurement method,87 therefore, public procurement person-
Services, Consulting Services, or Legal Services, as
nel must ensure that the appropriate best value standard is used as
applicable.
the basis for the contract award.
If no, proceed to Step 4.

Procurement Methods Step 4: Can the purchase be completed using the TCI Program?

Procurement Method Identification Process If yes, follow the acquisition procedures for TCI Purchases.
If no, proceed to Step 5.
When identifying the appropriate procurement method, including
relevant exclusions and exemptions, public procurement person- Step 5: Can the purchase be completed using the State Use Program?
nel will need to know the following for each purchase: procurement
If yes, follow the acquisition procedures for the State Use
type, cost estimate, and purchasing entity. For certain procure-
Program.
ments, SPD and DIR may delegate specific procurement authority
to an agency. A delegation of authority may be provided for a pre- If no, proceed to Step 6.
approved class of procurements, such as particular procurement Step 6: Is the purchase for information technology (NIGP Class/
type or contract value, or obtained on a case-by-case basis upon Item with an *)?
request by the agency.
If yes, follow the acquisition procedures for Information
Technology Purchases.
86
TEX. GOV’T CODE § 2261.001(c).
87
Best value standards include, but are not limited to, the following: Sections 2155.074, If no, proceed to Step 7.
2156.007, 2157.003, 2254.003, and 2254.027 of the Texas Government Code.

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Statewide Procurement Division

Step 7: Can the purchase be completed by contracting with Procurement Method – SPD Non-Delegated
another state agency or local government?
Purchases
If yes, follow the acquisition procedures for Interagency
Cooperation Contracts (IAC) or Interlocal Cooperation Overview
Contracts, as applicable. Chapters 2155 and 2156 of the Texas Government Code are the pri-
If no, proceed to Step 8. mary sources of SPD’s procurement authority. SPD Non-Delegated
Purchases include set aside programs and Term Contracts as well
Step 8: Can the purchase be completed using SPD Term Contracts? as procurements for which SPD’s purchasing authority has not been
If yes, follow the acquisition procedures for Term Contracts. delegated to agencies by rule. For procurements and procurement
methods within SPD’s purview, agencies must comply with SPD’s
If no, proceed to Step 9.
rules and procedures.
Step 9: Is the purchase for printing services or equipment, or mail
and messenger services? Texas SmartBuy. Texas SmartBuy, maintained by SPD, is the State
of Texas online marketplace for non-IT goods and services. As
If yes, follow the acquisition procedures for Printing
the State’s central e-procurement system, agencies and local
Services and In-House Copy Centers or Mail and Messenger
governments utilize the web-based ordering system to access
Services, as applicable.
hundreds of competitively bid and awarded state contracts with
If no, proceed to Step 10. almost 2 million items available.

Step 10: Does the purchase involve used equipment or supplies? Set Aside Programs. For purposes of this Guide, set aside
If yes, follow the acquisition procedures for Used Equipment. programs refer to
If no, proceed to Step 11. 1. Prison Made Goods governed by Chapter 497 of the Texas
Government Code, and
Step 11: Can the purchase be completed using one of the following:
2. the State Use Program authorized by Chapter 122 of the
SPD Delegated Purchases, Texas Human Resources Code.
SPD TXMAS Contracts,
These set aside programs do not require competitive procurement.
Contract Established by Another State Agency,
Federal Government Purchases, or Texas Correctional Industries Purchases
Interstate Compacts & Cooperative Agreements? Texas Correctional Industries (TCI) is a division of the Texas Depart-
If yes, follow the applicable acquisition procedure. ment of Criminal Justice (TDCJ) that manufactures goods and
services using primarily offender labor for purchase by Texas
If no, proceed to Step 12.
governmental entities.88 The Prison Made Goods Act requires that
Step 12: Is the purchase for goods valued at over $50,000 or ser- agencies purchase goods made by and services offered by TCI.
vices valued at over $100,000? Competitive bidding is not required for items purchased from TCI
If yes, follow the acquisition procedures for SPD under the Prison Made Goods Act.
Administered Agency-Specific Procurements.
TCI offers most goods through Texas SmartBuy. For goods not
If no, consult SPD or agency legal counsel for the appro- available through Texas SmartBuy, the agency may find them
priate procurement method. in the TCI Catalog published on the TCI website.89 For TCI
Catalog products, the PO must be issued directly to TDCJ via email
to tci@tdcj.texas.gov with the following notation: “The award was
made under the Prison Made Goods Act and is non-competitive.”

TEX. GOV’T CODE Chapter 497.

88

The TCI website is located at www.tci.tdcj.texas.gov.

89

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 Statewide Procurement Division

An agency may decline to procure a good or service from TCI if priate bid documents. If the certification is approved, SPD will
provide a written certification to the agency in a form similar to the
• TCI grants a waiver,90
following: “SPD has reviewed the agency’s documentation and
• SPD determines that the good or service produced by TCI does certifies that the goods or services can be purchased elsewhere at
not meet the requirements of the agency,91 or a lower price.”
• SPD certifies that the good or service can be purchased else-
where at a lower price after the agency gives TCI final opportu- The State Use Program
nity to negotiate on price.92
The Texas Workforce Commission (TWC) oversees the Purchasing
Printing. Procurements for printing must comply with the Printing from People with Disabilities Program, commonly referred to as
Services and In-House Copy Centers procedures. For competitively the State Use Program.96 TWC contracts with a Central Nonprofit
procured printing purchases, including those solicited using CPA’s Agency, currently WorkQuest (formerly TIBH Industries), to adminis-
State Print Shop Request Form, TCI must be given the final opportu- ter the day-to-day operations of the program. WorkQuest partners
nity to meet or beat the lowest price.93 Bids for printing must include with Community Rehabilitation Programs (CRP), which employ dis-
a bid or no bid response (in lieu of the waiver) from TCI. abled workers to develop products or provide services for the State
Use Program. WorkQuest is the management link between the CRP
TCI Waiver Process. A waiver must be obtained from TCI if an work centers (e.g., Lighthouse for the Blind), agencies, and TWC.
agency desires to procure a product or service offered in the TCI Only products and services approved by TWC qualify as a set aside
catalog from a source other than TCI. The TCI waiver request form purchase available for agencies to purchase on Texas SmartBuy.
can be found in the Procurement Forms Library located on the CPA
website.94 The waiver request can be based on substantial differ- Agencies must purchase products and services offered through
ences in specifications, which may include the inability for TCI to WorkQuest that meet the applicable specifications of the agency and
provide deliverables on the requested delivery date, price differ- that are available within the time specified.97 Competitive bidding is
ences, or precise specifications required by the agency that cannot not required for purchases from WorkQuest. Any time the quality of
be met by TCI. An agency may not evade the intent of Prison Made a WorkQuest product or service is deemed unacceptable or failed to
Goods Act by requesting a product that varies slightly from stan- meet agency specifications, this information should be reported to
dards for products established under Section 497.027 of the Texas WorkQuest and a vendor performance report must be filed with SPD.
Government Code, if TCI produces a similar product that is in com-
pliance with established standards and is reasonably suited to the State Use Program Exceptions. Agencies are not required to
purchase products and services using the State Use Program under
actual needs of the agency.95
the following circumstances:
The waiver request must be submitted by fax or email to TCI, as
1. under the rules of SPD, a WorkQuest-provided or -produced
indicated on the form. TCI will evaluate waiver requests on a case-
product or service does not meet the reasonable require-
by-case basis and reply with a written approval or a denial of each
ments of the agency; or
request. As a best practice, the procurement file must include the
2. the requisitions made cannot be reasonably complied
TCI waiver request and waiver response.
with using products or services produced by persons with
If TCI denies an agency’s waiver request, the agency may send disabilities.98
an appeal letter to SPD. To expedite processing, the agency must
Agency purchases from other sources of products and services
provide the waiver identification number from the TCI waiver denial
generally offered through the State Use Program are subject
letter as well as any supporting documentation. SPD will provide a
to enhanced scrutiny. Accordingly, specifications must satisfy a
written notice of the approval or denial of the agency’s appeal.
reasonable requirement by the agency and not be used to avoid the
SPD Certification Process. For requests to certify a lower avail- State Use Program. For example, if the purchase is for a pen with
able price, the purchasing agency must send to SPD the appro- orange ink and WorkQuest only offers pens in black, blue, or red ink,
the agency should document why black, blue, or red ink pens would
not satisfy the agency’s business need. To determine whether a
90
TEX. GOV’T CODE § 497.024(b).
91
TEX. GOV’T CODE § 497.024(b). WorkQuest-offered product or service meets the reasonable
92
TEX. GOV’T CODE § 497.024(b).
93
TEX. GOV’T CODE § 497.025(c). 96
TEX. HUM. RES. CODE Chapter 122.
94
The CPA website is located at Comptroller.Texas.Gov. 97
TEX. HUM. RES. CODE § 122.008.
95
TEX. GOV’T CODE § 497.024(c). 98
TEX. HUM. RES. CODE § 122.016(a); 34 TEX. ADMIN. CODE § 20.306(b).

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Statewide Procurement Division

requirements of the agency, the agency must not consider price. An that delivery time is the reason for the decision to purchase
exemption is not needed to document the purchase of a product or from a source other than WorkQuest. The procurement file
service that is unavailable through the State Use Program. must be documented with a justification explaining why the
10-day delivery will prevent the end user from conducting its
For products and services offered through the State Use Program, normal business or will present a hazard to life, health, safety,
agencies are not required to use WorkQuest provided products or welfare, or property.
services if they do not meet the agency’s specifications as to quan- • Exception for Life Cycle Costs. Life cycle cost exceptions
tity, quality, delivery time, or life cycle costs.99 If a WorkQuest-offered can be made when the purchaser determines the WorkQuest
product or service is obtained from another source, the agency must product or service is not the most cost-effective option to meet
document which of the four (4) authorized exceptions to the State the business requirements of the agency. For example, when
an agency needs to procure a large number of folding tables
Use Program is being utilized for the purchase. Price is not a fac-
and chairs for an agency hosted meeting that occurs once
tor used in the comparison of other sources to WorkQuest-provided
every two years, the agency may decide to rent, rather than
products or services. purchase, the tables and chairs after considering the life cycle
costs (e.g., costs associated with purchasing, owning, oper-
• Exception for Quantity. Quantity exceptions can be made
ating, maintaining, storing, and disposing of an item). On the
when WorkQuest has a minimum order requirement that is
exception report, the agency must state that life cycle cost is
more than is needed by the agency, or when an agency has a
the reason for the decision to procure from a source other than
need for a quantity greater than WorkQuest is able to fill. For
WorkQuest.
example, if an agency requires 3 toner cartridges and the Work-
Quest minimum order quantity for toner cartridges is 10, on the
The State Use Program Exception Reporting. Each agency
exception report, the agency must state that quantity is the
that purchases products or services through WorkQuest must:
reason for procuring from another source because the agency
need is less than the minimum order quantity specified in Texas 1. designate an agency employee to ensure that the agency
SmartBuy by WorkQuest. As a best practice, quantity should not complies with the requirements of the State Use Program; and
be used as an exception when the WorkQuest minimum order
requirement could be met by combining the business need of 2. report through SPD’s State Use Program exception reporting
several teams or divisions within the agency. Nor should orders tool each month100 the reason that products or services that
be split to avoid a minimum quantity requirement. could have been purchased from WorkQuest on behalf of a
CRP, were purchased from another source.101 TWC receives
• Exception for Quality. Quality exceptions can be made when a the exception report.102
WorkQuest good or service does not meet specific performance
standards (e.g., the WorkQuest item is not functionally equiva- The purpose of exception reporting is to provide SPD and TWC
lent to commercial sources). This exception cannot be based with the data to identify and address deficiencies and to evaluate
on opinion or preference. The determination must be based whether additional commercially sourced products should be added
on an identical and/or similar comparison of specifications and
to SPD statewide contracts for situations where WorkQuest products
performance. For example, when purchasing self-adhesive
do not meet agency needs.
note pads, the agency’s determination, based on employee
feedback after prior WorkQuest self-adhesive note pad pur-
chases, is that the WorkQuest product does not adhere as well Term Contracts
as other brands. On the exception report, the agency must
OVERVIEW
state that quality is the reason for the decision to procure from
another source. The procurement file must be documented SPD establishes Term Contracts for the purchase or lease of goods
with a justification as to why the WorkQuest product does not and services used in large quantities by several agencies.103 Best
meet the specifications or performance criteria of the agency. value is achieved by using SPD established Term Contracts, there-
• Exception for Delivery Time. Exceptions based on delivery fore, competitive bidding by agencies is not required for items
time may only be made after WorkQuest has been contacted purchased from Term Contracts.
and WorkQuest has confirmed its inability to meet an essential
schedule or delivery date requirement. For example, if an The Term Contracts are categorized according to the NIGP Class/
agency is purchasing 50 boxes of name tag labels and the Item codes which are located in the NIGP Commodity Book main-
WorkQuest delivery for the goods is 10 days from the date
the PO is received, but the name tags are needed within 5 100
TEX. HUM. RES. CODE § 122.016(b).
calendar days, the agency must state on the exception report 101
TEX. HUM. RES. CODE § 122.0095(a).
102
TEX. HUM. RES. CODE § 122.0095.
34 TEX. ADMIN. CODE § 20.306(b).
99 103
34 TEX. ADMIN. CODE § 20.220.

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 Statewide Procurement Division

tained on the CPA website. With the exception of Managed Term Agencies108 may not enter into a contract for travel services without
Contracts, agencies must order goods or services on Term Contracts prior approval from SPD. As part of the review process, SPD
through the Texas SmartBuy online ordering system. Blanket POs considers whether the proposed contract offers the best value for
and Confirmation Orders are not permitted in Texas SmartBuy. the State and the impact of the proposed contract on existing travel
service contracts. Reimbursement of certain travel expenses and
All agencies are encouraged to use Term Contracts whenever purchase requests by agencies for commercial airline or rental car
possible. Agencies are not allowed to use delegated authority to transportation at an amount that exceeds SPD’s contracted fares
purchase goods or services that are available through a statewide or rates or certain limitations as prescribed by Chapter 660 of the
Term Contract unless the quantity required is less than the minimum Texas Government Code, the General Appropriations Act and rules
order quantity specified in the relevant Term Contract.104 adopted by CPA will not be granted unless the agency has a valid
exception.
MANAGED TERM CONTRACTS
A “Managed” Term Contract is a type of Term Contract that requires Exceptions to the Use of SPD Travel Services Contracts.
manual processing by the ordering entity. These contracts typically The following are exceptions to the use of the Travel Services Contracts:
have different pricing structures or require a quote that is based
• Lower cost to the State. Agencies may use any travel
on a discount percentage due to the agency’s business need or for services obtained at a price lower than SPD’s travel services
regular scheduled deliveries or flexible delivery dates.105 General contract price. Agencies are encouraged to obtain lower priced
Contract Information (GCI) listings for Managed Term Contracts travel services through the use of 14-day or other advanced
are located on Texas SmartBuy, however, the purchase cannot be reservations programs, promotional price reductions, or any
made through the online ordering system. Instead, the agency method that provides a lower overall cost of travel.109
issues a PO directly to the awarded vendor. A purchaser may • Unavailability of contract travel services. SPD’s travel
contact SPD’s Contract Management Office for questions relating services contracts are not available during the time or at the
to a purchase from a Managed Term Contract. Blanket POs can location necessary for the business purpose; or the travel
be issued to the vendors of Managed Term Contracts; however, service contract does not provide the service required; or
Blanket PO terms, including date range, must not exceed the because the contractor is unable to provide the contract
services due to a force majeure event.110
Managed Term Contract term. When the Managed Term Contract
expires, orders cannot be placed against any Blanket PO issued by • Special needs. The traveler’s health, safety, physical condi-
the agency for that contract. tion, or disability requires accommodations, including medical
emergency or other necessary services, not available from
SPD’s travel service contracts.111
TRAVEL SERVICES CONTRACTS
• Custodians of persons. The traveler has custody of a person
As part of the State Travel Management Program (STMP), SPD
pursuant to statute or court order and the traveler is required
negotiates contracts with private travel agents, travel and to provide a degree of security and safety that is not available
transportation providers, and credit card companies that provide from SPD’s travel services contract.112
travel services and other benefits to the State. SPD monitors travel
• In travel status. The traveler is in the course of travel and
reservations and other travel arrangements required for business changes in scheduling render the use of SPD’s travel services
travel by state employees and provides travel-related services.106 contracts impractical or the appropriate travel services are not
By establishing contracted rates with commercial lodging available. The traveler must make reasonable efforts to secure
establishments, motels, inns, and bed & breakfasts, SPD obtains rates equal to or lower than SPD’s travel service contract rates.113
cost-effective lodging for state employees traveling on official • Group program. The traveler is using a group program wherein
government business.107 reservations were made through a required source to obtain a
particular rate or service.114
108
State agencies in the executive branch of state government shall participate under
104
TEX. GOV’T CODE § 2155.132(f); 34 TEX. ADMIN. CODE § 20.82(b)(3). CPA rules in SPD contracts for travel services, provided that all travel agents
105
TEX. GOV’T CODE § 2155.084. approved by SPD are permitted to contract with the State and provide travel
106
TEX. GOV’T CODE § 2171.051. See also TEX. GOV’T CODE Chapter 660. services to all state agencies. TEX. GOV’T CODE § 2171.055(a).
107
For more information on rates, allowances, exceptions, and further resources, 109
34 TEX. ADMIN. CODE §§ 20.408(a)-(b).
please see the State Travel Management Program at https://comptroller.texas. 110
34 TEX. ADMIN. CODE § 20.408(c).
gov/purchasing/programs/travel-management/#skip-scroll. On October 1, 2018, 111
34 TEX. ADMIN. CODE § 20.408(d).
the individual Hotel Rate Agreements were replaced with a 24/7 online hotel 112
34 TEX. ADMIN. CODE § 20.408(e).
reservation platform for lodgings located in Texas as well as other states and 113
34 TEX. ADMIN. CODE § 20.408(f).
certain countries. 114
34 TEX. ADMIN. CODE § 20.408(g).

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Statewide Procurement Division

• Emergency response. The traveler is responding to a public the Contract Developer must ensure that the estimated quantity
health or safety emergency situation.115 per region is provided to SPD. Also, the Contract Developer must
• Legally required attendance. The traveler is required by a indicate on the delegation request if all or any part of the purchase
court, administrative tribunal, or other entity to appear at a is considered to be proprietary.
particular time and place without sufficient notice to obtain ser-
vices under an SPD travel services contract.116 SPD will communicate with the ordering agency point of contact
throughout solicitation development, posting, evaluation, and
In its written request seeking SPD approval of a requested excep- award. For SPD administered agency-specific contracts, the agency
tion, an agency may request that SPD consider additional excep- PO(s) submitted to the contractor must reference the SPD contract
tions.117 The request must include a reasonable justification for the number. The ordering agency must notify the assigned SPD Contract
need for the exception. SPD will not grant exceptions for longer than Manager of any contractor performance matters. In addition,
the term of existing state travel services contracts.118 the agency should enter vendor performance reports to Vendor
Performance Tracking System (VPTS).
Travel Coordinators. Each agency shall designate an employee
as its travel coordinator; this person will serve as the single point
of contact between STMP and the agency for disseminating and
Proprietary Purchases
collecting travel data and information. The following information A proprietary purchase is one where the specifications or conditions
must be provided to STMP about the travel coordinator: of the proposed purchase are proprietary to one vendor and do not
permit an equivalent product or service to be supplied.119 The term
• name, “proprietary” refers to a product or service that has a distinctive fea-
• business telephone number, ture or characteristic which is not shared or provided by compet-
• email address, ing or similar products or services.120 Proprietary purchases include
products or services manufactured or offered under exclusive rights
• business mobile telephone number, and
of ownership, including rights under patent, copyright, or trade
• other requested and relevant contact information. secret law.121
It is recommended that agency travel coordinators participate Proprietary purchases, by definition, preclude competition because
in travel advisory, proposal evaluation, education, and any other an attribute of the purchase limits consideration to only one prod-
groups needed to assist SPD in contracting for the most economical, uct or supplier. In today’s robust marketplace, it is unusual for only
efficient, and useful travel services. CPA may conduct audits of travel one product or one vendor to be capable of addressing an agency’s
reimbursement requests for compliance with rules and to enforce business need. Because Texas procurement law promotes the use
travel requirements. of competitive bidding for purchases,122 proprietary purchases are
subject to enhanced scrutiny.
SPD-Administered Agency-Specific
Procurements Proprietary purchases may be either sole source or competitive.
For procurements not delegated to the agencies under the SPD • Sole Source: The specified product or service is only avail-
Review and Delegation Process, SPD will establish and adminis- able for purchase through a single vendor e.g., manufacturer,
ter an agency-specific procurement. The ordering agency initiates publisher, service provider. Examples of sole source propri-
the process by submitting delegation request to SPD either as an etary purchases include a back issue of a magazine available
Open Market Requisition (OMR) or via the Procurement Oversight & from only the publisher and an educational conference avail-
Delegation portal. able from only the conference sponsor.
• Competitive: The specified product or service is available
The Contract Developer is responsible for providing current and for purchase through more than one vendor e.g., dealers,
complete specifications to SPD — providing out-of-date or incom- distributors, resellers, authorized service providers. Examples
plete specifications may prolong the procurement timeline. If the of competitive proprietary purchases include brand-specific
request includes items distributed to various geographic regions, 119
TEX. GOV’T CODE § 2155.067(a).
120
34 TEX. ADMIN. CODE § 20.25(44).
115
34 TEX. ADMIN. CODE § 20.408(h). 121
34 TEX. ADMIN. CODE § 20.25(44).
116
34 TEX. ADMIN. CODE § 20.408(i). 122
TEX. GOV’T CODE § 2155.063 (Except as otherwise provided by Subtitle D of Title
117
34 TEX. ADMIN. CODE § 20.409(b). 10 of the Texas Government Code, a purchase of or contract for goods or services
118
34 TEX. ADMIN. CODE § 20.409(b). shall, whenever possible, be accomplished through competitive bidding.).

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replacement parts for equipment available through multiple • “Our agency has performed research [on these products]. The
OEM-authorized dealers and software that a software publisher manufacturer can provide [a range of products] that will enable
makes available to the public through several resellers. [our agency] to [meet our statutory requirement].”
When a specification for a proposed purchase is drafted so narrowly • “Our staff tested [these products] against others, and only
that there is only one viable product or one vendor eligible for [the identified products] that passed our rigorous qualification
contract award, the agency must document the rationale for the process were placed on the agency’s approved products
list. We can only buy products on our approved products list;
restrictive specification by placing a written Proprietary Purchase
therefore, these products are proprietary.”
Justification in the procurement file.123 The Proprietary Purchase
Justification must include the following information in order to • This is the only vendor the feds will let us spend this money
with.
document best value to the State:
• This vendor is our incumbent and only their products will work
1. describe the product or service the agency proposes to with the equipment we already have.
purchase, and provide a statement regarding the agency’s
business need and planned use; • “The [brand] furniture purchased will be used to provide a
comfortable and aesthetically pleasing work environment for
2. explain why the agency specifications for the product or employees’ working in the office so they may provide custom-
service are written as they are, and why those specifica- ers frequenting the building excellent customer service in a
tions are necessary to accomplish the agency’s goal for the welcoming atmosphere.”
procurement;
3. state the reason that no other competing products or services Proprietary Sole Source Procurements ≤ $25,000. No
will satisfy the need of the agency and provide examples of competitive bidding is required if the total value of the proprietary
the technical, practical, or operational risks that would occur sole source contract is $25,000 or less.
if competing products or services are selected; and
Proprietary Purchases under SPD Delegation by Rule.
4. specify whether the purchase is sole source or competitive.
For purchases made under SPD’s delegated authority by rule,
The Proprietary Purchase Justification must be signed by the agencies are required to maintain the Proprietary Purchase Jus-
agency head, the chairman of its governing body, or a person to tification in the agency procurement file and to provide it to SPD
whom such signature authority has been properly delegated in the upon request. A Proprietary Purchase Justification is not required for
Agency Procurement Plan, or in the case of an institution of higher procurements valued at $5,000 or less.
education, by a person properly designated as a purchasing officer
For proprietary purchases exceeding $5,000, the solicitation must
for the institution.124 A Proprietary Purchase Justification template is
include the following statement:
located in Appendix 9.
“These specifications are being advertised under Section
Proprietary purchases, regardless of whether they are 2155.067 of the Texas Government Code. Only bids on items
sole source or competitive, are subject to ESBD posting conforming exactly to these specifications, which include
requirements as well as requirements applicable to SPD del- proposing only the brand name(s), make and model number(s)
egation, CAT reviews, and QAT reviews. specified, will be considered in determining an award.”

Examples of Non-Compliant Proposed Proprietary Proprietary Purchases under the SPD Review and
Purchase Justifications. Delegation Process. For procurements made under the SPD
Review and Delegation Process, additional information must be
• “Our professionals have identified [vendor’s product] as the
most durable, safe, and efficient system of its kind.” submitted with the agency’s delegation request. For goods valued
at more than $50,000, the Proprietary Purchase Justification must
• “[The vendor] has claimed their technology is proprietary and
be submitted to SPD along with the OMR at open.market@cpa.texas.
we agree.”
gov. For services valued at more than $100,000, the agency must
• “[Vendor] is the exclusive patent holder of US Patents [X, Y, and submit the Proprietary Purchase Justification on agency letterhead
Z]. No other manufacturer can legally produce [the product]
along with its delegation request submission to the Procurement
with the same properties.”
Oversight & Delegation portal.

123
TEX. GOV’T CODE §§ 2155.067(a), (c).
124
34 TEX. ADMIN. CODE §20.209(b)(4).

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SPD will notify the agency in writing if the proprietary procurement When utilizing the metered mail service, a monthly report showing
is authorized by SPD. For proprietary purchases exceeding $5,000, the amounts of postage used and volume of mail metered will be
the solicitation must include the following statement: provided to the agencies. Mail may not be metered for an agency in
“These specifications are being advertised under Section excess of funds provided by the agency, unless approved by SPD as
2155.067 of the Texas Government Code. Only bids on items to avoid undue delays in processing mail. Any deficit in an agency’s
conforming exactly to these specifications, which include pro- postage account must to be promptly reimbursed to SPD.128
posing only the brand name(s), make and model number(s) Agencies located in Travis County are required to consult with SPD
specified, will be considered in determining an award.” before renting, purchasing, upgrading, or selling mail processing
If a review of the agency’s proposed specifications and Proprietary equipment, contracting with a private entity for mail processing ser-
Purchase Justification does not show that the procurement is pro- vices, or taking any action that will significantly affect the agency’s
prietary, then SPD will inform the agency that the proprietary pro- first-class mail practices.129 The agency must submit the following:
curement, as currently drafted, is not authorized. If SPD does not 1. For mail equipment or private entity service contracts under
authorize the proprietary purchase, the agency may choose either $10,000, an agency must submit a written justification to SPD
to submit a revised Proprietary Purchase Justification and specifica- stating why the equipment or service is needed and what
tions for SPD review and approval or proceed with a non-proprietary benefits are expected to be received.130
procurement. 2. For mail equipment or private service contracts over
$10,000, an agency must submit a detailed life cycle cost
Proprietary Purchases using the RFO Procurement benefit analysis to SPD that includes all expected costs and
Method. For proprietary purchases made using the RFO procure- benefits over the life of the equipment or service. The analy-
ment method, agencies are required to maintain the Proprietary Pur- sis must be in a format prescribed by SPD.131
chase Justification in the agency procurement file and to provide it 3. For any action that will significantly affect its first-class mail
to SPD upon request. In addition, for proprietary purchases exceed- practices, an agency must provide a written statement of the
ing $5,000, the RFO must include the following statement in bold need for the action and anticipated benefits.132
and prominent type at the beginning of the solicitation:
SPD will provide a written response to the agency indicat-
“The issuing office believes that the requested items in ing whether or not it agrees with the intended action and any
this request for offers may be proprietary to one vendor suggested alternatives.133
under Section 2155.067 of the Government Code; how-
ever, the issuing office strongly encourages offers from all Printing Services and In-House Copy
qualified respondents that may be able to provide the Centers
requested items.”
Agencies are authorized to provide for their own incidental copying
Mail and Messenger Services Contracts needs by using available local and networked printers and office
copy machines either purchased or leased. DIR establishes and
SPD’s Statewide Mail Operations provides and operates an manages statewide contracts for these purposes. Incidental copying
interagency mail and messenger service to deliver unstamped or is day-to-day production and copying of documents within a quantity
non-metered written communications and packages between the limit and job specification that does not reasonably require high-
Legislature, state agencies, and legislative agencies located in Travis volume duplication equipment or services.
County.125 Mail may also be delivered to and from the United States
Postal Service by agreement of the agency and SPD.126 In addition, the Agencies are not authorized to establish full service print shops
mail and messenger service may process and meter outgoing mail for without the approval of SPD.134 Some agencies’ production volumes
agencies upon agreement of the agency and the CPA. Each agency may require centralized in-house copy centers with multiple pieces
must furnish funds to cover amounts of postage to be metered.127
128
34 TEX. ADMIN. CODE § 20.381(e)(1).
129
TEX. GOV’T CODE § 2176.104.
130
34 TEX. ADMIN. CODE § 20.381(f)(1).
131
34 TEX. ADMIN. CODE § 20.381(f)(2).
125
TEX. GOV’T CODE §2176.051; 34 TEX. ADMIN. CODE § 20.381(a). 132
34 TEX. ADMIN. CODE § 20.381(f)(3).
126
34 TEX. ADMIN. CODE § 20.381(d). 133
34 TEX. ADMIN. CODE § 20.381(f)(4).
127
34 TEX. ADMIN. CODE § 20.381(e). 134
34 TEX. ADMIN. CODE § 20.381(f)(4).

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of printing and reproduction equipment, typically with dedicated staff assigned to the locations and operating order fulfillment process to
support the agencies’ functions. Staffing and equipment located within a copy center should be appropriate to the size, scope and mission
of the agency. The purchase or lease of equipment is subject to review by SPD, not only in regard to the merit of the individual purchase, but
also in the context of the copy center’s entire equipment inventory. Equipment typically associated with print shop operations (e.g., printing
presses, folding machines, cutting machines, etc.) should not be deployed in agency copy centers.

Agencies must utilize SPD approved State Print Shops135 to competitively procure print services for printing procurements estimated to be
$2,500 dollars or more. State Print Shops provide services through interagency contracts with SPD. The State Print Shops provide design,
digital, and traditional offset printing, binding, fulfillment, mailing, and other print-related services to agencies.

SPD Approved State Print Shops

Agency Name Interagency Contract No.

Texas Correctional Industries (TCI) PSIAC-06-2017

Texas Department of Public Safety (DPS) PSIAC-01-2017

Texas Department of Transportation (TxDOT) PSIAC-03-2017

Texas Department of State Health Services (DSHS) PSIAC-02-2017

Texas Workforce Commission (TWC) PSIAC-05-2017

The University of Texas at Austin (UT) PSIAC-04-2017

University of North Texas (UNT) PSIAC-07-2017

To submit specifications to the State Print Shops, the agency must complete the Print Shop Job Request Form located on the CPA website.136
The Print Shop Job Request Form provides the agency with an opportunity to enter the “Project Due Date,” the “Estimate Needed by,” and the
“Time Needed by” fields for the job. If no required date is submitted, the State Print Shops that are able to perform the work should respond
to the request within three business days of the job request. Once the Print Job Request is submitted, the agency must print or save a copy
of the results page for the procurement file.

If an agency has a print job that it needs fulfilled on a more-or-less regular schedule and is identical or substantially the same job each
time, the agency should complete only one Print Shop Job Request Form. The agency will provide the estimated print schedule for the
Fiscal Year and the estimated quantity. Estimates should be based on historical information, where available, to assist the State Print Shops
in their bid efforts.

Examples of scheduled print jobs include, but are not limited to, the following:

• newsletters;
• forms, brochures, and other similar jobs that need to be printed on a regular basis or as stock levels are depleted;
• reports; and
• business cards, letterhead, and other agency specific stationery.

Agencies will need to resubmit the job request each Fiscal Year. Agencies are also encouraged to submit a new Print Shop Job Request Form
should the job change dramatically at any point in the Fiscal Year.

135
Beginning in 2017, SPD took over management of the State Print Shop Program (Contract No. 966-M2) from the Council for Competitive Government which was dissolved by the
85th Legislature.
136
The CPA website is located at Comptroller.Texas.Gov.

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Statewide Procurement Division

Print Services of less than $2,500. For print and print-related • the lack of adequate funds for new equipment, or
service requests of less than $2,500, agencies are encouraged to • used equipment that will satisfy the agency’s need is available
establish internal procurement procedures; these requests may be at a substantial savings.
sourced directly from any of the contracted state print shops or by
soliciting bids through the web form. To acquire used or demonstrator equipment, the agency must utilize
the procurement method applicable to the estimated amount for the
Best Value Determination. An agency intending to purchase procurement.
print services must conduct a best value determination before issu-
ing a PO. State Print Shops should respond with a bid within the For procurements not delegated to the agency under the SPD
requested time frame and the purchasing agency is required to Review and Delegation Process, the procurement file must contain
tabulate these bids using the SPD Print Bid Tabulation Template to the following:
identify the lowest bid that meets the specifications. 1. a statement from an authorized person of the agency that
the equipment or supplies have been personally examined,
For print purchases, TCI must be given the final opportunity to meet
or beat the lowest price.137 If TCI submitted a bid and TCI is not the 2. a description of the condition and value of the equipment or
supplies, and
lowest bid, the purchasing agency is required to request a final bid
from TCI. The purchasing agency should not disclose the other bids 3. the reasons for inability to secure new equipment and/or
to TCI during this stage of the competitive bid process. Upon award, that the used equipment or supplies would provide a sub-
stantial savings.
the completed bid tabulation noting the successful bidder should
be sent to all State Print Shops and SPD with the email subject line: If the value of the procurement exceeds the agency’s delegated
“Print Bid Tabulation for Requisition No. XXX.” authority, the agency must comply with the SPD Review and
Delegation Process. The OMR submitted to SPD must include the
No Bids Received From State Print Shops. If none of the
following information:
State Print Shops respond to the Print Job Request, agencies may
solicit competitive bids from commercial vendors and TCI. ESBD 1. a statement from an authorized person of the agency that
posting requirements apply to printing services contracts. the equipment or supplies have been personally examined,
2. a description of the condition and value of the equipment or
Agencies Hosting State Print Shops. An agency hosting a
supplies, and
State Print Shop is not required to follow the competitive bidding
procedures if the print job is performed at the agency’s print shop. 3. the reasons for inability to secure new equipment and/or
that the used equipment or supplies would provide a sub-
If there is a need to outsource the work, the agency must follow the
stantial savings.
competitive bidding procedures by submitting its specifications to
the State Print Shops using the Print Shop Job Request Form. TRADE-IN OF USED EQUIPMENT
State Data Center Printing. DIR has entered into a private vendor An agency may trade in agency-owned equipment for new equip-
contract to manage Data Center Services (DSC) for participating agen- ment of the same or similar type if it is in the best interest of the State.
cies. Any agency receiving DSC services may opt to leverage those An agency may not trade in property that has been declared either
high-speed production print output and presort/barcode mail services surplus or salvage; such property must be disposed of through the
instead of the services available through the State Print Shops. State Surplus Property Program. Trade-ins are not allowed through
orders placed against Term Contracts.
Used Equipment
The agency must have documentation supporting the equipment’s
PURCHASE OF USED EQUIPMENT value in order to make a decision whether to process as surplus or
As a general rule, an agency should procure new equipment. Some- trade-in the equipment for new equipment utilizing a solicitation.
times, however, it is necessary or advantageous to purchase used or
Trade-In Surplus. If the State could reasonably realize greater
demonstrator equipment and supplies. The most common reasons are:
cost savings by declaring the equipment as surplus or salvage, the
• the inability to secure new equipment, equipment should be disposed of under the State Surplus Property
Program.
TEX. GOV’T CODE § 497.025(c).
137

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Trade-In Through Solicitation. If an agency determines that a Federal Government Purchases and
trade-in will provide the greater cost savings, the procurement file Interstate Compacts & Cooperative
must contain an estimated approximate value for that determination Agreements
and the solicitation must include the following:
SPD or the governing body of an institution of higher education may
1. Requirements and Clauses: negotiate purchases of goods of any kind needed by a state agency
• The acceptance of the trade-in amount is at the State’s or the institution of higher education with the appropriate agency
option, of the federal government as long as the price of goods that are
purchased from the federal government does not exceed the fair
• Release of trade-in equipment will not be allowed until
final delivery and acceptance of the new equipment, market value of the goods.142 In addition, SPD may enter into one or
more compacts, interagency agreements, or cooperative purchasing
• Deadline for pickup of the equipment by awarded
agreements directly with one or more state governments, agencies
respondent “where is, as is”
of other states, or other governmental entities or may participate in,
2. Equipment Description: sponsor, or administer a cooperative purchasing agreement through
• Age of equipment, an entity that facilitates those agreements for the purchase of goods
or services if SPD determines that the agreement would be in the
• Condition of equipment,
best interest of the State.143
• Make (Manufacturer/Brand),
• Model Number, and A compact or agreement may not be used to purchase services that
are defined as part of the practice of engineering under Section
• Serial Number (if applicable).
1001.003 of the Texas Occupations Code or architecture under
Section 1051.001 of the Texas Occupations Code.144 For assistance
Contract Established by Another State
with federal government purchases and procurements utilizing
Agency
interstate compacts and cooperative agreements, agencies should
When a contract created by another state agency fulfills an unmet contact SPD at spd.policy@cpa.texas.gov.
need, the SPD director may either (1) endorse the contract of the
other agency as an SPD contract and make it generally available Procurement Method – SPD Delegated
for agency use or (2) authorize the use of the contract of the other Purchases
agency on a case-by-case basis.138 For case-by-case reviews, the
requesting agency must provide written notification to SPD that the Overview
purchase is being considered. The notification must be signed by the SPD is authorized to delegate its purchasing functions to agencies.145
agency’s purchasing director and include a confirmation that an SPD A delegation of authority may be
contract does not exist for similar goods or services.139 The agency
notification should also disclose the terms of the other agency 1. provided by SPD rule for a pre-approved class of procure-
ments, such as a particular procurement type (e.g., emer-
contract, capabilities of the vendor, and a justification that addresses
gency purchases) or contract value (e.g., one-time purchases
how using the other agency contract will be more advantageous
of goods that do not exceed $50,000), or
than creating a new contract.140 SPD will inform the requesting
2. obtained on a case-by-case basis by the agency through the
agency of its determination. If SPD approves the use of the other
SPD Review and Delegation Process.
contract, the requesting agency may proceed with the procurement
utilizing established purchasing procedures.141 A delegated purchase is made by an agency under the authority
of SPD and subject to SPD’s rules and procedures. Delegated pur-
chases shall, whenever possible, be accomplished through compet-
itive bidding.146 Delegated purchases exempt from the competitive
142
TEX. GOV’T CODE § 2155.084(a)-(b).
143
TEX. GOV’T CODE § 2156.181(a), 34 TEX. ADMIN. CODE § 20.237. See also
TEX. GOV’T CODE § 2158.241 (SPD may enter into compacts and cooperative
agreements with other states and government entities for procuring products made
138
34 TEX. ADMIN. CODE § 20.236(b), (d). of recycled materials when SPD determines it is in the best interest of the State.).
139
34 TEX. ADMIN. CODE § 20.236(b). 144
TEX. GOV’T CODE § 2156.181(a-1).
140
34 TEX. ADMIN. CODE § 20.236(b). 145
TEX. GOV’T CODE § 2155.131.
141
34 TEX. ADMIN. CODE § 20.236(c). 146
TEX. GOV’T CODE § 2155.063; 34 TEX. ADMIN. CODE § 20.206(c).

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Statewide Procurement Division

bidding requirement are expressly identified on the Summary of Minimum Requirements for Delegated Purchases chart. An agency may not
divide a purchase into small lot purchases to match the delegation dollar thresholds. If an agency does not comply with procurement rules
or laws under delegated purchasing authority, SPD may revoke that agency’s purchasing authority and report the violations to the Governor,
Lieutenant Governor, Speaker of the House of Representatives, and the LBB.147

Procurements made under SPD’s delegation authority are subject to ESBD posting requirements as well as requirements
applicable to CAT and QAT reviews.

Determining Contract Value

For SPD reporting, review, and delegation requirements, contract value is defined as “the estimated dollar amount that an agency may be
obligated to pay pursuant to the contract and all executed and proposed amendments, extensions and renewals of the contract.”148 Contract
value, therefore, is not limited to just the cost for the initial term, it is determined by the total value of the contract over a contract’s term as
well as any modifications, renewals, or extensions of the contract.149

EXAMPLE: A contract with a one-year initial term and three optional one-year renewal periods, costing $4 million annually, would
have a contract value of $16 million and would be subject to CAT review.

Public procurement professionals must be mindful that other oversight agencies may not use the same standard for determining contract
value. For example, the value of a contract is calculated differently for IT commodity purchases under DIR contracts.

Summary of Minimum Requirements for Delegated Purchases

The following chart provides a summary of the delegated purchases, each of which will be discussed in further detail in the Guide.

MINIMUM REQUIREMENTS FOR SPD DELEGATED PURCHASES*

Direct Perishable Fuel, Oil
Purchases Purchases Distributor Internal Emergency
Contract Value Publication Goods and Grease
of Goods** of Services** Purchases Repair Purchases**
Purchases Purchases Purchases
$0.00 Competitive Competitive Competitive Competitive Competitive Competitive Competitive Competitive
Process Not Process Process Not Process Not Process Not Process Not Process Not Process Not
to
Required Not Required Required Required Required Required Required Required
$5,000.00 PCC E PCC E PCC K PCC L PCC M PCC P PCC E PCC E
$5,000.01 Informal Informal Competitive Informal Informal Informal Informal Informal
Competitive Competitive Process Not Competitive Competitive Competitive Competitive Competitive
to
Solicitation Solicitation Required Solicitation Solicitation Solicitation Solicitation Solicitation
$25,000.00 PCC F PCC Q PCC K PCC L PCC M PCC P PCC Q PCC Q
Formal
$25,000.01 Formal Formal Formal Formal Formal Formal Formal
Competitive
Competitive Competitive Competitive Competitive Competitive Competitive Competitive
to Solicitation
Solicitation Solicitation Solicitation Solicitation Solicitation Solicitation Solicitation
$50,000.00 When Possible
PCC S PCC S PCC K PCC L PCC M PCC P PCC S
PCC T
Formal
$50,000.01 Formal Formal Formal Formal Formal Formal
Non- Competitive
Competitive Competitive Competitive Competitive Competitive Competitive
to delegated Solicitation
Solicitation Solicitation Solicitation Solicitation Solicitation Solicitation
$100,000.00 PCC S When Possible
PCC S PCC K PCC L PCC M PCC P PCC S
PCC T
Formal
Formal Formal Formal Formal Formal
Over Non- Non- Competitive
Competitive Competitive Competitive Competitive Competitive
delegated delegated Solicitation
$100,000.00 Solicitation Solicitation Solicitation Solicitation Solicitation
PCC S PCC S When Possible
PCC K PCC L PCC M PCC P PCC S
PCC T

* Procurements made under SPD’s delegation authority are subject to ESBD posting requirements as well as requirements applicable to CAT and QAT reviews.
** Purchases for printing must comply with the Printing Services and In-House Copy Centers procedures.

147
TEX. GOV’T CODE § 2155.132(a); 34 TEX. ADMIN. CODE § 20.82(c).
148
34 TEX. ADMIN. CODE § 20.25(b)(13).
149
TEX. GOV’T CODE §§ 322.020(a), 2254.006, 2254.0301; 34 TEX. ADMIN. CODE 20.25(b)(13).

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SPD Delegation by Rule include the following:

• Professional or consulting services as defined by Chapter 2254
OVERVIEW of the Texas Government Code,
SPD has by rule delegated its purchasing authority to agencies for • Services of an employee of an agency, or
the following types of procurements:
• Services of public utilities.153
• one-time purchases of goods that do not exceed $50,000;
• purchases of services that do not exceed $100,000; DIRECT PUBLICATIONS
• direct publications; An agency may purchase publications directly from the publisher
• purchases of perishable goods; only when such publications are not available through statewide
contract (e.g., TCI Purchases, State Use Program purchases, Term
• distributor purchases;
Contracts) or through competitive bidding, including proprietary
• fuel, oil, and grease purchases; competitive purchases. Direct publication orders shall be made by
• internal repair purchases; and following guidelines established by SPD. Examples of direct publica-
• emergency purchases. tions include, but are not limited to, the following:
• foreign publications;
For procedures applicable to proprietary purchases, refer to
Proprietary Purchases. • out-of-print or rare publications;
• back issues of magazines, journals, and newspapers;
Request for SPD-Administered Agency-Specific Pro-
• publications produced by professional societies;
curement. Although SPD has by rule delegated its purchasing
authority to agencies for certain procurements, agencies may • audio, visual, or audiovisual materials (films, audio
presentations, etc.);
request assistance from SPD for procurements under the delegated
threshold. Agencies must submit their procurement assistance • computer software;
requests to SPD using the SPD Review and Delegation Process. • collections of any of the foregoing items, and microfilm or
microfiche copies of any of the foregoing items; and
PURCHASES OF $5,000 OR LESS • Library of Congress cards.
(“SPOT” PURCHASES)
With the exception of printing services,150 competitive bidding is not In order for computer software to be purchased as a direct
required if the total value of the contract is $5,000 or less.151 For publication, the procurement must satisfy the requirements of direct
Spot Purchases, an agency may supplement the CMBL with non- publication and be subject to an exemption or exclusion from state
CMBL vendors. Dividing purchases to avoid the competitive bidding set aside programs and DIR procurement authority. Refer to the
requirement is explicitly prohibited.152 Procurement Method Identification Process and the RFO Procure-
ment Method. Hardware and IT services may not be purchased as
ONE-TIME PURCHASES OF GOODS OF $50,000 a direct publication. Procurements made under SPD’s delegation
OR LESS authority are subject to ESBD posting requirements as well as the
requirements applicable to CAT reviews and QAT reviews.
SPD delegates the purchasing functions of one-time purchases of
goods, including goods for the resale, which do not exceed $50,000. Direct Publication Declaration. The following statement should
Goods refer to supplies, materials, and equipment. be placed on POs for the Direct Publication purchases: “Direct Publi-
cation - Not available from any other source.”
PURCHASES OF SERVICES OF $100,000 OR LESS
SPD delegates the purchasing functions of services, including Direct Publication Purchases ≤ $25,000. No competitive bid-
services for resale, the estimated cost of which does not exceed ding is required if the total value of the direct publication contract is
$100,000. A service is defined as the furnishing of skilled or unskilled $25,000 or less.
labor or professional work. Delegated purchases of services do not
PERISHABLE GOODS PURCHASES
150
TEX. CONST. art. XVI, § 20; purchases for printing must comply with the Printing Perishable goods are items that are subject to spoilage within a rela-
Services and In-House Copy Centers procedures. tively short time. Perishable goods include, but are not limited to, the
151
TEX. GOV’T CODE § 2155.132(e); 34 TEX. ADMIN. CODE § 20.82(b)(1).
152
TEX. GOV’T CODE § 2155.132(g). TEX. GOV’T CODE § 2155.001.
153

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following: fresh fruit, fresh vegetables, and meat. The NIGP Class Indexed Fuel Pricing. Because fuel prices fluctuate, agencies
390 perishable goods category, NIGP Class 375 (bakery products, should construct bulk fuel solicitations using indexed pricing based
fresh), and NIGP Class 380 (dairy products, fresh) qualify for this del- on the contractor’s terminal price. The posted terminal price is the
egation using competitive bidding processes. contractor’s cost per gallon for the fuel from the refiner’s depot. The
posted terminal price for a contract may be either:
DISTRIBUTOR PURCHASES
• The contractor’s actual cost, as shown on fuel receipts.
The purchase of repair parts for a unit of major equipment that is
• A standard industry quote such as Oil Price Information Service
needed immediately, or a maintenance contract for laboratory/ (OPIS).
medical equipment may qualify as a distributor purchase. Complete
• Data Transmission Network (DTNrgy).
components, such as engines, transmissions and compressors do not
qualify as repair parts under this description. A distributor purchase • A current index price from The Federal Department of Energy,
Energy Information Administration.
must be made from a dealer or distributor of the equipment being
repaired; a major component that is built by another manufacturer, The contractor’s constant is the difference between the posted
such as an engine in a vehicle, the distributor purchase can be made terminal price per gallon and the selling price per gallon. The
from the component manufacturer. constant includes applicable taxes, environmental fees, freight
Examples of major equipment include, but are not limited to, the charges, load fees, operational overhead and contractor’s profit
following: margin. It is recommended that the agency, in the agency terms and
conditions, prohibit contractors from changing the constant during
• motor vehicles, aircraft, boats,
the term of the contract. To determine the actual cost of the fuel, add
• farm tractors and equipment,
the contractor’s constant price to the terminal price:
• road building machinery and equipment,
EXAMPLE: $1.10/gallon Posted Terminal Price
• heavy construction machinery and equipment,
+ $0.24/gallon Contractor’s Constant
• traffic signal lights or traffic signal controller equipment,
$1.34/gallon Selling price
• Intelligent Transportation Systems (ITS),
• laboratory or medical equipment, and Fuel, Oil, and Grease Purchase Procedure. If the specification
• industrial manufacturing machinery. and requirement is for:

Purchasers must verify that the installation of distributor parts will 1. Service station point of sale transactions (amounts of fuel,
oil or grease required for continued operation of a motor
not void the equipment’s warranty before proceeding with this type
vehicle such as pump-delivered gasoline, pump-delivered
of procurement. An agency may not purchase any of the following diesel fuel, and less than case lots of oil or other fluids), may
on a distributor purchase basis: consumable items, labor of any be purchased using a State of Texas Retail Fuel Card issued
kind, “will fit” parts (non-OEM), parts for stock, contract items, through SPD 946-M3 contract.
electrical parts for electric motors, electrical switch panel boards,
2. For bulk fuel, the contract should include the following
and electrical accessories. information:

FUEL, OIL, AND GREASE PURCHASES • The term of the contract, including beginning and
ending dates.
The following goods may be purchased by an agency in either bulk or
• Estimated total quantities to be purchased during the
packaged form: fuel, oil, and lubricants/grease purchases including contract term.
gasoline, diesel fuel, kerosene, aviation fuels, transmission fluids,
• Estimated frequency and quantity for each delivery.
motor oil and other lubricants, liquefied petroleum gas (LPG), and
compressed natural gas (CNG). • The delivery destination or destinations.
• Storage capacity of the agency’s tank or tanks.
Lubricants. The solicitation and award of lubricants should be
• Any requirements for contractor-provided storage tanks.
based on firm-fixed prices or a discount from a manufacturer’s
published list price. • A statement that the state is exempt from federal fuels
excise tax.

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INTERNAL REPAIR PURCHASES

An internal repair is a repair to state-owned equipment where the extent of the work cannot be determined until the equipment is
disassembled. An internal repair must contain labor and may also include parts. Internal repairs are usually the result of an unexpected, basic
service outage. If an internal repair qualifies as an emergency, it must be processed as an emergency purchase.

EMERGENCY PURCHASES
For purposes of an emergency purchase under SPD’s delegated authority,154 an emergency purchase occurs when the agency must make the
procurement quickly to prevent a hazard to life, health, safety, welfare, or property or to avoid undue additional cost to the state. Proper procure-
ment planning for anticipated business need is expected. Pending expiration of funds does not constitute an emergency. Emergencies occur as
the result of unforeseeable circumstances and may require an immediate response to avert an actual or potential public threat or to avoid undue
additional cost to the state.

Note: Emergency purchases discussed in this section are different from agency purchases conducted under a Declaration of Disaster by the
Governor. SPD authority does not extend to purchases made under the Texas Disaster Act of 1975. Refer to Procurement Method – Texas
Disaster Act of 1975.

SPD has delegated to all agencies the authority to make emergency procurements. Notwithstanding this delegation, emergency procure-
ments are subject to SPD’s rules and procedures. Upon request, SPD will assist in advising agencies on the proper procedures for emergency
purchases, but SPD will not certify the existence of an emergency.

The decision to declare an emergency purchase is the sole responsibility of the agency. If an emergency exists, a written determination of the
basis for the emergency and for the selection of a particular vendor shall be included in the procurement file. For an emergency purchase of
goods or services exceeding $25,000, an agency must send to SPD a full written explanation of the emergency along with other documenta-
tion required by SPD. The notification to SPD must be provided via email to spd.policy@cpa.texas.gov as soon as reasonably practical given
the nature of the emergency.

Notwithstanding the immediate nature of an emergency, all procurements conducted as emergencies should be made as competitive as pos-
sible under the circumstances. The agency should make a reasonable attempt to obtain at least three informal bids. Emergency procurements
over $25,000 must be posted to the ESBD; however, the minimum time for posting of the solicitation does not apply to the extent necessary
to address the emergency. In addition, emergency procurements are subject to CAT and QAT reviews; expedited reviews are available upon
request to these oversight teams. Emergency purchases of goods or services should not exceed the scope or duration of the emergency.

SPD Review and Delegation Process

OVERVIEW
Agencies seeking a delegation of SPD’s purchase authority for a procurement that is not addressed by SPD rule must submit a procurement-
specific delegation request to SPD as either an Open Market Requisition (OMR) for goods via email or through the Procurement Oversight &
Delegation portal for services, as applicable.

Procurement
Open Market DELEGATION Oversight
Requisition Goods Services
(OMR) > $50K REQUEST TO > $100K
&
Email Delegation
SPD Portal

When determining whether to grant a delegation request, SPD considers factors relevant to an agency’s ability to perform purchasing
functions, including:
• the capabilities of the agency’s purchasing staff and the availability of automated purchasing tools at the agency;
• the certification levels held by the agency’s purchasing personnel;
154
TEX. GOV’T CODE § 2155.137; 34 TEX. ADMIN. CODE § 20.210. Compare TEX. GOV’T CODE § 2254.025(e).

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• the results of SPD’s procurement review audits of an agency’s denied, SPD will procure the services on behalf of the agency. Refer
purchasing practices; and to SPD-Administered Agency-Specific Procurements.
• whether the agency has adopted and published protest proce-
dures as part of its purchasing rules that are consistent with SPD’s Competitive Bidding (IFBs, Informal
procedures.155 Bidding)
SPD’s delegation to an agency may be conditioned on the agency’s Procurements for goods and services must, whenever possible, be
compliance with certain recommendations identified in the delega- accomplished through competitive bidding.157 A competitive bidding
tion letter. SPD may provide recommendations regarding mitigation procurement method is used when the requirements are so clearly
of identified risk and best contracting practices. Prior to proceed- defined that they may be described by detailed specifications listed
ing with the procurement (e.g., posting the solicitation to the ESBD), in a PO.
the agency must provide a written explanation to SPD if it does not
implement SPD’s recommendations. Competitive bidding may be accomplished either by a formal solici-
tation or informal bidding.
A delegation request will be reviewed, processed, and priori-
tized in the order received. Delegation reviews may take up to 30 • Invitation for Bids (IFB). An Invitation for Bid (IFB) is a for-
mal written competitive sealed bid method158 used to obtain
days to complete. Even if the review period exceeds 30 days, the
written bids. An IFB must be used for procurements exceeding
agency does not have the authority to issue the solicitation until it $25,000 and may be used for procurements of $25,000 or less.
receives a letter of delegation from SPD. If the agency proceeds If the total value of a solicitation is greater than $25,000,159 an
with the procurement without receiving a letter of delegation from IFB must be posted on the ESBD and all eligible vendors within
SPD, the resulting contract is voidable. For procurements not del- the NIGP Class and/or Class/Items designated for the procure-
egated to the agencies, refer to SPD-Administered Agency-Specific ment that are active on the CMBL must be solicited for formal
Procurements. bids. Guidance on how to draft a solicitation can be found in the
Solicitation – Preparation section of this Guide.
Lease transactions are “services” for purposes of the SPD delega- • Informal Bidding (Purchases $25,000 or Less). If the
tion and review process. For procedures applicable to proprietary total value of a contract is over $5,000160 but not more than
purchases, refer to Proprietary Purchases. $25,000, a Contract Developer must provide bid opportunities
to vendors active on the CMBL within the NIGP Class and/or
DELEGATION REQUEST FOR GOODS EXCEEDING Class/Item designated for the solicitation.161 These vendors may
$50,000 be chosen in the geographic region that serves the agency.
The Contract Developer must solicit bids from a minimum
For the non-delegated purchase of goods with an estimated contract
of three active vendors on the CMBL, two of which must be
value of more than $50,000, the agency must submit its delegation current Texas-certified HUBs. The acceptable methods for
request as an OMR to SPD. The procuring agency is responsible for receiving informal responses for purchases greater than $5,000
downloading the most current OMR form posted on the CPA web- but not greater than $25,000 are in person, via direct mail,
site.156 The OMR with all applicable attachments must be submitted via facsimile transmission, over the telephone, or via email.162
to open.market@cpa.texas.gov. If the delegation request is denied, Negotiations are not permitted by the competitive bidding procure-
SPD will procure the goods on behalf of the agency. Refer to SPD- ment method. However, if there is only one qualified bidder then the
Administered Agency-Specific Procurements. Contract Developer may negotiate with the sole bidder, including
price, provided the negotiation does not result in a material change
DELEGATION REQUEST FOR SERVICES EXCEEDING
to the advertised specifications.163 Proprietary procurements must
$100,000
follow the procedures set forth in Proprietary Purchases.
For the non-delegated purchase of services with an estimated
contract value of more than $100,000, the agency must submit its
delegation request and its solicitation through the Procurement
Oversight & Delegation portal. Once an agency has submitted a
157
TEX. GOV’T CODE § 2155.063; 34 TEX. ADMIN. CODE § 20.206(c).
158
34 TEX. ADMIN. CODE § 20.206(a)(1).
solicitation for review, the procurement is analyzed from a contract 159
TEX. GOV’T CODE § 2155.083(a); 34 TEX. ADMIN. CODE § 20.209.
management and business perspective. If the delegation request is 160
TEX. GOV’T CODE § 2155.132(e).
161
TEX. GOV’T CODE § 2155.132(h).
TEX. GOV’T CODE § 2155.132(b).
155 162
TEX. GOV’T CODE § 2156.063.
The CPA website is located at Comptroller.Texas.Gov.
156 163
34 TEX. ADMIN. CODE § 20.206(d)(5).

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 Statewide Procurement Division

Best Value Standard. Each agency shall purchase goods and sight of the use of the competitive sealed proposal procurement
services that provide the best value for the State. For a purchase
164 method or retain oversight of the procurement.169 For purchases
made through competitive bidding, the agency must specify in the made under SPD’s delegation authority, SPD delegates to the
solicitation the factors other than price that will be considered in agency the assessment whether to use the competitive sealed pro-
determining which bid offers the best value for the State. 165 In deter- posals procurement method. Agencies must follow the SPD Review
mining the best value for the state, the purchase price and whether and Delegation Process to submit delegation requests to SPD pro-
the goods or services meet specifications are the most important curements of goods with a value of more than $50,000 and services
considerations.166 The agency may, however, consider other relevant with a value of more than $100,000. Proprietary procurements must
factors, including: follow the procedures set forth in Proprietary Purchases. Guidance
on how to draft a solicitation can be found in the Solicitation – Prep-
1. installation costs;
aration section of this Guide.
2. life cycle costs;
3. the quality and reliability of the goods and services;
Best Value Standard. Each agency shall purchase goods and
services that provide the best value for the State.170 For a purchase
4. the delivery terms;
made through competitive sealed proposals, the agency must
5. indicators of probable vendor performance under the con- specify in the solicitation the known factors other than price that the
tract such as past vendor performance, the vendor’s financial agency will consider in determining which proposal offers the best
resources and ability to perform, the vendor’s experience
value for the State.171 The agency shall make a written award of a
or demonstrated capability and responsibility, and the
contract to the respondent whose proposal offers the best value
vendor’s ability to provide reliable maintenance agreements
and support; for the state, considering price, past vendor performance, vendor
experience or demonstrated capability, and any other evaluation
6. the cost of any employee training associated with a purchase;
factors in the RFP.172
7. the effect of a purchase on agency productivity;
8. the vendor’s anticipated economic impact to the state or a Procurement Method – SPD Texas Multiple
subdivision of the State, including potential tax revenue and Award Schedule (TXMAS) Contracts
employment; and
SPD establishes Texas Multiple Award Schedule (TXMAS) contracts
9. other factors relevant to determining the best value for the to supplement the Term Contracts. The TXMAS Program adapts
State in the context of a particular purchase.167
existing competitively awarded government contracts to service
the procurement needs of state agencies and Texas SmartBuy
Competitive Sealed Proposals (RFPs) members.173 A contract award through the TXMAS Program must be
A Request for Proposals (RFP) is a written solicitation document for based on an existing contract that was previously awarded by the
purchases acquired by means of the competitive sealed proposals federal government or any other governmental entity in any state
procurement method. Generally, an RFP is recommended when using a competitive process that is adaptable to the laws of the
factors other than price are to be considered, negotiations are State of Texas. Neither consulting services nor certain professional
desired, requirements cannot be described by detailed specifica- services (such as engineering and architecture) are offered as part
tions included in a PO, or the vendor is expected to provide innova- of the TXMAS program.174
tive ideas. This solicitation type must be used when an IFB is not
practicable or advantageous.168 One of the key differences between Unlike some other procurement methods, agencies may utilize
an IFB and an RFP is that negotiations are allowed in an RFP and not TXMAS contracts developed by SPD without obtaining delegated
allowed in an IFB. authority from SPD to make purchases that exceed $50,000 for
goods and exceed $100,000 for services. Prior to purchasing from a
For goods and services acquired under SPD’s purchasing authority, TXMAS contract, however, the Contract Developer must follow appli-
SPD shall determine whether to delegate to the agency sole over- cable procedures to purchase first from TCI, the State Use Program,

164
TEX. GOV’T CODE § 2155.074(a). 169
TEX. GOV’T CODE § 2156.121.
165
TEX. GOV’T CODE § 2155.075(a). 170
TEX. GOV’T CODE § 2155.074(a).
166
TEX. GOV’T CODE § 2155.074(b). 171
TEX. GOV’T CODE § 2155.075(b)(1).
167
TEX. GOV’T CODE § 2155.074(b). 172
34 TEX. ADMIN. CODE § 20.208(e)(1).
168
TEX. GOV’T CODE §§ 2156.121(a), 2156.122, 2157.121(a); 34 TEX. ADMIN. CODE 173
TEX. GOV’T CODE § 2155.502.
§ 20.208. 174
TEX. GOV’T CODE §§ 2155.001(2), 2155.502(c)(4).

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Statewide Procurement Division

and the Term Contracts. For purchases that exceed $25,000, the must enter at least 20 items into the Texas SmartBuy shop-
agency must post the award notice on the ESBD.175 ping cart before utilizing the quote line option. Texas Smart-
Buy Members are encouraged to add items to the Texas
DIR has developed TXMAS contracts for IT procurements. SmartBuy cart before utilizing the quote line option.
For AIS procurements designated with an asterisk (*) on the 2. All POs containing a quote line item must include an uploaded
NIGP Commodity Book maintained on the CPA website,176 Contract attachment of the vendor’s quote containing the core items
Developers must follow the procurement procedures associated with a detailed breakdown of the price. The ordering entity
with DIR TXMAS Contracts. is responsible for validating the quoted price in its best value
determination.
Best Value Determination. An agency intending to purchase 3. The ordering entity may request SPD assistance to validate
from a TXMAS contract must conduct a best value determination prices before the order is entered into Texas SmartBuy by
before issuing a PO. For purchases with a value of no more than submitting a request to: txmasquote@cpa.texas.gov.
$50,000, the agency may directly award a PO to an SPD TXMAS
contractor without submitting a price request to other contractors in Offline Sales. Offline sales are TXMAS contract sales issued
the same category. SPD recommends that for contracts that exceed outside of Texas SmartBuy and directly with the vendor. All orders
$50,000 the agency submit a pricing request to at least three against TXMAS contracts must be entered on Texas SmartBuy unless
TXMAS vendors included in the TXMAS category to which the con- the contract details page expressly states that offline sales are
tract relates or all TXMAS vendors included in the applicable TXMAS authorized. SPD encourages all TXMAS orders to be issued in Texas
category if the category has fewer than three vendors. SmartBuy in lieu of placing the order through a vendor authorized to
accept offline sales.
Negotiation Permitted. Orders placed between the minimum
and maximum dollar limits listed on the contract details page are Incidental, Off-Schedule Items. Only products or services
subject to TXMAS catalog pricing. Although certain negotiations are listed in the underlying contract may be purchased from the TXMAS
permitted, a TXMAS vendor is not required to accept orders or honor contract, with one exception. Incidental, off-schedule items may be
contract prices below the minimum and above the maximum dollar purchased as “best value, open market” items provided that they
limits shown on its contract details page. are necessary for product integration or product completeness. The
purchasing entity is responsible for ensuring that the quoted price
The price listed on the TXMAS contract is the maximum price allow- for such incidental items is fair and reasonable. These incidental
able. The agency may negotiate lower prices when purchasing from items may be added to the TXMAS purchase order if they are clearly
a TXMAS contract; however, the TXMAS vendor may not charge labeled as “open market (OM), best value” items.
a price higher than the price published in the TXMAS contract. A
TXMAS vendor may provide a lower price than the price listed in Incidental items may not exceed $5,000 or 50 percent of the pur-
its Texas SmartBuy catalog. For orders above the maximum PO dol- chase order total, whichever is less. If the pending order includes
lar limit and offers through a promotional program, the agency may incidental items that exceed the stated limits, a request may be sub-
negotiate lower prices than those listed in the Texas SmartBuy cata- mitted to SPD for review and consideration of an exception. Excep-
log. Lower prices must be noted in the file by the agency along with tion requests shall be submitted to txmasquote@cpa.texas.gov. The
the vendor representative’s name. The agency must document the request must include a copy of the complete vendor quote listing all
description of the good(s) or service(s) for TXMAS purchases and core items and a detailed incidental charge breakdown.
include pricing documentation in the agency’s procurement file.
Procurement Method – Reverse Auction
Orders Entered on Texas SmartBuy. POs for TXMAS contracts Procedure
must be entered through the Texas SmartBuy online ordering sys-
Agencies may purchase goods or services using the reverse auction
tem. The guidelines below are to be used when submitting a TXMAS
procedure. This procedure, which is not commonly used in Texas
PO entry into Texas SmartBuy.
state agency procurement, may be conducted in either of two ways:
1. Review the order. The Texas SmartBuy shopping cart allows
1. Multiple vendors submit bids (anonymously to other vendors)
up to 45 line items. Once 45 line items are added to the
at a previously scheduled time and Internet location (last-
shopping cart, the additional order items must be totaled and
ing usually less than an hour) to provide solicited goods or
entered using the quote order line on line 46. State agencies
services;177 or
TEX. GOV’T CODE § 2155.509.
175

The CPA website is located at Comptroller.Texas.Gov.

176
TEX. GOV’T CODE §§ 2155.062(d)(1), 2155.085.
177

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 Statewide Procurement Division

2. Multiple vendors submit bids (anonymously to other vendors) As an aid in determining the appropriate procurement method, clas-
during a specific time period (usually two weeks or less) and sification codes with an AIS component are noted with an asterisk
at a previously scheduled Internet location, to provide solic- (*) on the NIGP Commodity Book maintained on the CPA website.181
ited goods or services.178
DIR Contracts
Procurement Method – Information
Technology Procurements Under DIR’s statewide procurement authority, DIR establishes and
manages the following types of master contracts for use by eligible
Automated Information Systems customers:182 (1) Cooperative Contracts for IT commodity items, (2)
Agencies are required to use contracts established by DIR to obtain Texas Multiple Award Schedule contracts for IT commodity items, (3)
Automated Information Systems (AIS) unless the procurement the Texas.gov contract, (4) Data Center Services contracts, and (5)
is subject to an exclusion or exemption.179 AIS type products and ser- Telecommunication Services contracts.
vices are associated with computers (automation) or telecommuni- Note: This section of the Guide provides a summary of the five mas-
cations systems. ter contracts established by DIR. Agencies are directed to DIR for
The term AIS is defined to include the following: guidance on applicable procedures and best practices to be utilized
in procuring IT commodity items under DIR contracts.
1. computers and computer devices on which an information
system is automated, including computers and computer IT Commodity Items. IT commodity items are a subset of AIS.
devices that SPD identifies in guidelines developed by SPD IT commodity items refer to commercial software, hardware, or
in consultation with DIR and in accordance with Chapter technology services, other than telecommunications services, that
2054 and rules adopted under that chapter;services related are generally available to businesses or the public and for which
to the automation of an information system, including com- DIR determines that a reasonable demand exists in two or more
puter software or computers;
agencies.183  The term includes End-User IT Outsourcing (managed
2. telecommunications apparatus or device that serves as a services), through which an agency transfers its personal computer
component of a voice, data, or video communications net- equipment and service responsibilities to a private vendor to man-
work for transmitting, switching, routing, multiplexing, modu-
age the personal computing needs for each desktop in the agency,
lating, amplifying, or receiving signals on the network, and
services related to telecommunications that are not covered including all necessary hardware, software, and support services.184
under paragraph (4); and
The correlation between AIS and DIR IT commodity items is
3. for DIR, as telecommunications provider for the state, the illustrated below:
term includes any service provided by a telecommunications
provider, as that term is defined by Section 51.002 of the
Texas Utilities Code.180

Automated Information Systems

DIR
IT Commodity Items

181
The CPA website is located at Comptroller.Texas.Gov.
182
DIR contracts cover a wide variety of information technology products and
178
TEX. GOV’T CODE §§ 2155.062(d)(2), 2155.085. services. Customer eligibility varies with each program.
179
TEX. GOV’T CODE § 2157.006. 183
TEX. GOV’T CODE § 2157.068(a).
180
TEX. GOV’T CODE § 2157.001(1). 184
TEX. GOV’T CODE § 2157.068(a).

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Statewide Procurement Division

Determining Contract Value of IT Commodity Item Pro- 3. For a contract with a value of more than $1 million but not
curements. An agency must use its best judgement to determine more than $5 million, the agency must submit a request for
the monetary value of the anticipated contract. The dollar value of a pricing to at least six vendors included in the category to
which the contract relates or all vendors in the category if
contract does not include the following for purposes of determining
the category has fewer than six vendors.187
the monetary threshold applicable to an IT commodity item procure-
ment under a DIR contract: An agency may not enter into a contract to purchase a commodity
item through the DIR Cooperative Contracts Program if the value of
1. optional extensions or renewals;
the contract exceeds $5 million unless it is a DIR coordinated bulk
2. documents executed for purposes of encumbering funds but
purchase.188
not constituting a binding transaction; or
3. any related document without an accompanying purchase Coordinated Bulk Purchases of Commodity Items. DIR
order, including but not limited to statements of work, periodically schedules “bulk” purchase events to support informa-
license agreements, maintenance agreements, or service tion technology replacement. The coordinated bulk purchase effort
agreements.185 focuses on productivity software, seat management services, and
personal computers, laptops, and tablets.189 DIR facilitates this
DIR COOPERATIVE CONTRACTS PROGRAM
streamlined procurement process, which is not subject to the con-
DIR develops master contracts for the procurement of IT commodity tract value cap of $5 million,190 by serving as the sole point of con-
items. All master contracts established by DIR within the Coopera- tact between the agencies and vendors. DIR works with agencies
tive Contracts Program are awarded through an open and com- to develop standardized configurations suited to the participating
petitive procurement process, beginning with a formal and public agencies’ business needs. DIR also uses its technology contracting
Request for Offers. DIR offers the following categories of contracts experience to conduct the negotiations for all of the participating
through DIR’s Cooperative Contracts Program: hardware, software, agencies. During a coordinated bulk purchase initiative, agencies
technology-based training, managed services, IT Staff Augmenta- leverage their combined purchasing power to purchase a large
tion Contracts (ITSAC), and Deliverables-Based IT Services (DBITS). quantity of like items during a designated timeframe. Agencies
participating in the coordinated bulk purchase initiatives obtain
DIR establishes and maintains a catalog of active contracts on the
competitive pricing beyond the discounts already available to DIR
DIR website that contain IT commodity items available for purchase
customers through DIR cooperative contracts.
by state agencies.186 The DIR Cooperative Contracts Program lever-
ages the volume buying power of the State to negotiate competitive DIR Review and Signature Approval of Certain DIR SOWs.
pricing, which translates into savings for agencies. The DIR mas- Agencies are required to prepare and submit to DIR certain Depart-
ter contracts offer negotiated minimum discounts on hundreds of ment of Information Resources Statements of Work (DIR SOW) for
products and services. DIR customers may negotiate even deeper contracts that exceed $50,000. A DIR SOW executed by an agency
discounts based on individual purchase volumes by issuing pricing under a contract for an IT commodity item is not valid and money
requests to multiple DIR vendors in order to drive price competition may not be paid to the contractor under the terms of the DIR SOW
for the final purchase award. unless DIR first signs the DIR SOW.191

Monetary Thresholds for Competitive Action. An agency DIR contracts that require DIR SOWs include, but are not limited to,
purchasing an IT commodity item under a DIR contract must follow the following:
the following procedure:
• DBITS;
1. For a contract with a value of no more than $50,000, the
• Managed Services for IT;
agency may directly award the contract to a vendor included
in the category to which the contract relates without submit- • IT Security Services;
ting a price request to other vendors in the same category; • Web Development; and
2. For a contract with a value of more than $50,000 but not • Cloud Services.
more than $1 million, the agency must submit a request for 187
TEX. GOV’T CODE § 2157.068(e-1).
pricing to at least three vendors or resellers included in the 188
TEX. GOV’T CODE § 2157.068(e-2).
category to which the contract relates; and 189
General Appropriations Act, House Bill 1, 86th R.S. at Article IX, Section 9.04(b)-
(c).
1 TEX. ADMIN. CODE § 212.1(2)(B).
185 190
TEX. GOV’T CODE § 2157.068(e-3).
The DIR website is located at www.dir.texas.gov.
186 191
TEX. GOV’T CODE § 2157.0685.

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 Statewide Procurement Division

A DIR SOW is not applicable to: work is within the scope of the DIR contract being utilized. The DIR
• IT staffing services; signature does not make DIR a party to the agreement, and DIR will
not be responsible for any other agency obligations in connection
• contracts exclusively for hardware or software and not includ-
ing services; or with the purchase. The DIR signature does not verify or assure any
other relevant fact including, but not limited to, the following:
• the vendors’ standard commercially available support, mainte-
nance, and warranties as documented in the DIR cooperative 1. that funding is appropriate or sufficiently available;
contract or modified in accordance with the DIR cooperative
2. that the appropriate procurement method was chosen by
contract provision addressing modification of contract terms
the agency;
and/or amendments.192
3. that the appropriate vendor was selected; or
If a DIR contract for IT commodity items requires an agency to
4. that the statement of work documented by the agency will
develop and execute a DIR SOW to initiate services under the
successfully achieve a goal or projected outcome.195
contract, before submitting a DIR SOW to a vendor, the agency must
consult with DIR as follows: If an agency experiences an unforeseeable circumstance that
requires immediate attention but is not considered an Emergency
1. The agency must submit a completed draft DIR SOW to DIR
for review at least 30 business days before anticipated sub- Procurement as defined in 34 TAC §20.25(b)(20), the agency may
mission of the DIR SOW to vendors. The DIR submission must submit an expedited request for signature. The expedited request
include: for signature must include a statement from the head of the request-
a. the completed DIR SOW which at a minimum includes: ing agency, or his/her designee, describing the circumstances and
the scope of the project, milestones, deliverables justification for expedited signature by DIR.196
description, schedule, acceptance criteria, and any
other items DIR may require; and Upon execution of the DIR SOW, each DIR SOW entered into by an
agency must be posted on the agency’s internet website as follows:
b. a list of DIR cooperative contracts to which the DIR
SOW will be advertised. 1. post the DIR SOW in its entirety, subject to the exceptions in
2. DIR may accept or reject the submitted DIR SOW. An agency the Texas Public Information Act and opinions of the Office
may not submit the DIR SOW to vendors until DIR has issued of Attorney General;
written approval. If rejected, the agency may resubmit with 2. maintain the posting, at a minimum, throughout the term of
required modifications. DIR will not issue retroactive or back- the DIR SOW, including any renewals or extensions;
dated reviews.193
3. maintain a listing of the DIR SOWs in alphabetical order by
If an agency experiences an unforeseeable circumstance that vendor name or numerical order by contract number in a
central location; and
requires immediate attention but is not considered an Emergency
Procurement as defined in 34 TAC §20.25(b)(20), the agency may 4. maintain a current agency contact person with related
submit an expedited request for review. The expedited request for email address and phone number to contact for information
regarding the DIR SOW.197
review must include a statement from the head of the requesting
agency, or his/her designee, describing the circumstances and Exemptions and Exclusions. An agency may obtain an exemp-
justification for expedited review by DIR.194 tion or waiver from the requirement to use a DIR Contract to pur-
chase an IT commodity item in one of three ways: DIR exemption,
Following execution of the final DIR SOW by the agency and vendor,
LBB approval, or DIR certification.
the agency must submit the signed DIR SOW to DIR for its signature.
DIR will review the signed DIR SOW and determine whether it will 1. DIR Exemption.198
be signed or rejected by DIR. If DIR rejects the DIR SOW, DIR will a. Blanket Exemption. DIR may determine that under
notify the agency of the reason(s) for rejection. DIR must sign the certain circumstances it is reasonable to grant a blanket
DIR SOW before it becomes valid and any money is paid to a ven- exemption to all agencies. Procurements utilizing blanket
dor. DIR will not issue retroactive or backdated signatures. The DIR exemptions must be made in accordance with the exact
signature affixed to the DIR SOW verifies only that the statement of scope, terms, and requirements specified in the blanket

195
1 TEX. ADMIN. CODE § 212.41(b).
192
1 TEX. ADMIN. CODE § 212.1(10). 196
1 TEX. ADMIN. CODE § 212.43.
193
1 TEX. ADMIN. CODE § 212.41(a). 197
1 TEX. ADMIN. CODE § 212.41(c).
194
1 TEX. ADMIN. CODE § 212.42. 198
TEX. GOV’T CODE § 2157.068(f); 1 TEX. ADMIN. CODE § 212.22.

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Statewide Procurement Division

exemption. A current list of blanket exemptions is located 3. DIR Certification of Unavailability. An agency may pro-
on the DIR website.199 cure an IT commodity item though an avenue other than a
b. One-Time Exemption Request. DIR contract if DIR certifies in writing that the commodity
item is not available for purchase under an existing contract
• If a blanket exemption is unavailable, an agency must developed by DIR.206
submit an exemption request on a prescribed form
through the DIR portal.200 DIR will review each exemp- Certain agency purchases are not within DIR’s procurement author-
tion request on a case-by-case basis to determine if ity for IT commodity items. These include procurements that are
the proposed purchase is in the best interest of the
State. DIR will notify the requesting agency of its 1. over the $5 million monetary threshold for IT commodity
decision to approve or deny the exemption request. items established by statute,207
If DIR has not issued a written denial of the exemp- 2. procurements for commercial software, hardware, or tech-
tion request within 15 business days following the date nology services for which DIR determines that a reasonable
of its receipt of the request, or the date of receipt of demand does not exist in two or more agencies,208 and
requested additional information, the request for the
exemption is deemed to have been approved for 3. exclusions expressly authorized by statute.209
an amount equal to the total value of the proposed
purchase or for the period of time described in the DIR TEXAS MULTIPLE AWARD SCHEDULE (TXMAS)
exemption request.201 CONTRACTS
• If an agency experiences an unforeseeable circum- The Texas Multiple Award Schedule (TXMAS) Program adapts
stance that requires immediate attention but is not existing competitively awarded government contracts to the pro-
considered an Emergency Procurement as defined curement needs of the State of Texas. Agencies may utilize TXMAS
in 34 TAC §20.25(b)(20), the agency may submit an contracts developed by DIR for the purchase of IT commodity
expedited exemption request.202 DIR must issue a
items.210 For orders that exceed $25,000, the agency must post the
written approval or denial of an exemption request
award notice on the ESBD.211
within three business days of receipt of the expe-
dited exemption request. The expedited exemption The monetary thresholds associated with the DIR Cooperative Con-
request must include a statement from the head of the
tracts Program apply to procurements under DIR TXMAS contracts.
requesting agency, or his/her designee, describing the
circumstances and justification for expedited review. • For a contract with a value of $50,000 or less, the agency may
If DIR has not issued a written denial of the expedited directly award the contract to a vendor on the DIR TXMAS con-
exemption request within three business days follow- tract without submission of a request for pricing to other ven-
ing the date of its receipt of the request, or the date of dors on DIR TXMAS contracts.212
receipt of requested additional information, the expe-
dited request for the exemption must be deemed to • For a contract with a value of more than $50,000 but not more
than $1 million, the agency must submit a request for pricing
have been approved for an amount equal to the total
to at least three vendors included on DIR’s TXMAS contract
value of the proposed purchase or for the period of
Schedule in the category to which the contract relates.213
time described in the expedited exemption request.
2. LBB Approval. With express prior approval from the LBB • For a contract with a value of more than $1 million but not more
than $5 million, the agency must submit a request for pricing
for the expenditure necessary for the purchase, an agency
to at least six vendors included on DIR TXMAS contracts on the
may procure an IT commodity item without using a contract
Schedule in the category to which the contract relates or all
established by DIR.203 The agency must request an exemp-
vendors on the DIR TXMAS contract Schedule if the category
tion from DIR before seeking LBB approval.204 The LBB’s
has fewer than six vendors.214
approval of a biennial operating plan is not an express prior
approval for the purpose of obtaining an exemption from the
use of DIR contracts.205
206
TEX. GOV’T CODE § 2157.068(f).
207
TEX. GOV’T CODE § 2157.068(e-2).
199
The DIR website is located at www.dir.texas.gov. 208
TEX. GOV’T CODE § 2157.068(a).
200
1 TEX. ADMIN. CODE §§ 212.20, 212.23. 209
TEX. GOV’T CODE §§ 2157.002, 2157.068(i).
201
1 TEX. ADMIN. CODE § 212.1(10), 212.23. 210
TEX. GOV’T CODE § 2155.502(e).
202
1 TEX. ADMIN. CODE § 212.21. 211
TEX. GOV’T CODE § 2155.509.
203
TEX. GOV’T CODE §§ 2157.068(f), 2157.068(g). 212
TEX. GOV’T CODE § 2155.504(a).
204
TEX. GOV’T CODE § 2157.068(g). 213
TEX. GOV’T CODE § 2155.504(a).
205
TEX. GOV’T CODE § 2157.068(g). 214
TEX. GOV’T CODE § 2155.504(a).

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TEXAS.GOV SERVICES the service through DIR or must request and be granted a waiver
before procuring the service through an avenue other than DIR.216
Texas.gov is the official e-government web portal for the State of
Texas providing seamless “one-stop shopping” access to many
state, county and city government services, and allowing citizens
RFO Procurement Method
to access government services online. Texas.gov is a public/private The Request for Offers (RFO) procurement method is intended
partnership between DIR and DIR’s service provider. Texas.gov as the designated, primary purchasing method for procuring AIS
Services include payment processing, custom application devel- other than under DIR’s IT commodity program.217 However, agen-
opment, operational and infrastructure support, customer service, cies may choose to use the RFO procurement method or any other
marketing, and analytic reporting. Additionally, the Texas Veterans procurement method authorized by Title 10, Subtitle D of the Texas
Portal and Texas Open Data Portal are operated through the Texas. Government Code that will obtain the best value.218 When using
gov program. To participate as a customer and use Texas.gov Ser- these other methods to procure such AIS, the procuring entity must
vices, three party customer agreements are executed between follow the guidelines published by SPD.219
the customer, DIR’s service provider, and DIR. Only Texas agencies
The RFO method is available for use by agencies to procure AIS
and other entities defined as customers in the master agreement
items in the following circumstances:
between DIR and the contractor are eligible to participate.
• The agency has obtained an exemption from DIR;
DIR DATA CENTER SERVICES
• The agency has obtained express prior approval from LBB for
DIR may directly operate, or contract with another entity to operate, the expenditure necessary for the purchase;
statewide technology centers to provide governmental entities, on • DIR has certified in writing that the IT commodity item is not
a cost-sharing basis, services related to: available for purchase under an existing DIR contract; or

• information resources and information resources technology; • The agency is otherwise exempt from the requirements of
and Section 2157.068 of the Texas Government Code.

• the deployment, development, and maintenance of software The RFO method is a direct purchase or lease method used after the
applications.215 procuring entity’s evaluation of written offers received in response
The Data Center Services project is part of the State of Texas’ long- to an open and competitive solicitation in accordance with the
term strategy to improve government, reduce costs, and increase solicitation to result in best value. Under the RFO method, agencies
return on investment in information technology. DIR’s Data Center must solicit, evaluate, select, negotiate as appropriate, and contract
Services contract provides participating agencies data center (main- directly with one or more qualified vendors in accordance with the
frame and server operations), disaster recovery, and bulk print and open and competitive solicitation.
mail services. The monetary threshold requirements and SOW review To initiate an RFO, the agency must issue a written, open and com-
and signature process associated with the DIR Cooperative Contracts petitive request for offers. In procuring under the RFO method, the
Program apply to all procurements made as a pass-through expense procuring entity must also comply with the RFO guidelines published
in the Data Center Services Program; however, these requirements by SPD. If the agency believes that the procurement is proprietary,
do not apply to contracts procured through the Data Center Services then the agency must follow the Proprietary Purchases procedures.
Program that are signed by the contracted vendors. The procuring entity’s use of an RFO does not require or involve del-
egation of authority or prior approval by SPD. Procurements using
TELECOMMUNICATION SERVICES
the RFO method are subject to ESBD posting requirements as well
DIR provides a variety of telecommunications services to eligible as requirements applicable to CAT and QAT reviews.
customers throughout the State, through the operation of major and
secondary networks and numerous contracts for communications- Best Value Standard. The term “best value” means the lowest
related services. Agencies in the Capitol Complex are required overall cost of an automated information system.220 In determining
to use the Capitol Complex Telephone System (CCTS) for landline
services. All agencies are required to use the Texas Agency Network 216
TEX. GOV’T CODE § 2170.051.
(TEX-AN) for telephone, internet, data, and video services. If a tele- 217
TEX. GOV’T CODE § 2157.006(a)(2); 34 TEX. ADMIN. CODE § 20.391.
communications service is offered by DIR, an agency must purchase
218
34 TEX. ADMIN. CODE § 20.391.
219
34 TEX. ADMIN. CODE § 20.391.
215
TEX. GOV’T CODE § 2054.378; 1 TEX. ADMIN. CODE § 215.1. 220
TEX. GOV’T CODE § 2157.003.

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Statewide Procurement Division

the lowest overall cost for a purchase or lease of an AIS, the agency form the services, and (2) a fair and reasonable price.224 The pro-
shall consider factors including: fessional fees under the contract may not exceed any maximum
provided by law.225
1. the purchase price;
2. the compatibility to facilitate the exchange of existing data; To procure architectural, engineering, or land surveying services,
3. the capacity for expanding and upgrading to more advanced the governmental entity226 must first select the most highly quali-
levels of technology; fied provider based on demonstrated competence and qualifica-
tions, and then attempt to negotiate a fair and reasonable price for
4. quantitative reliability factors;
the services.227 If a satisfactory contract cannot be negotiated with
5. the level of training required to bring persons using the sys- the most highly qualified respondent, the agency must formally end
tem to a stated level of proficiency;
negotiations with the respondent and then must attempt to negoti-
6. the technical support requirements for the maintenance of ate a fair and reasonable price with the next most highly qualified
data across a network platform and the management of the respondent. This process may continue until a contract is executed
network’s hardware and software;
for the service solicited by the governmental entity.228 Although the
7. the compliance with applicable department statewide stan- described process applies to the services of an architect, engineer
dards validated by criteria adopted by DIR rule; and or land surveyor, this selection process can be used for all profes-
8. applicable factors listed in Sections 2155.074 and 2155.075 sional services.
of the Texas Government Code.221
An agency shall provide written notice, on a prescribed form, to the
Procurement Method – Professional Services LBB not later than the 10th day after the date the agency enters into
Agencies are authorized to procure professional services under a contract for professional services, other than a contract for physi-
Chapter 2254, Subchapter A, of the Texas Government Code.222 cian or optometric services, if the amount of the contract, including
Acquisition of professional services is delegated to agencies by an amendment, modification, renewal, or extension of the contract,
statute and does not require a delegation of authority from SPD. exceeds $14,000.229 A contract entered into or an arrangement
The procurement of professional services is subject to ESBD posting made in violation of Chapter 2254, Subchapter A, of the Texas Gov-
requirements as well as requirements applicable to CAT reviews. ernment Code is void as against public policy.230

Professional services refer to services that are SAO Delegation of Authority for Audit Services. Section
321.020 of the Texas Government Code specifies that a state agency
1. within the scope of the practice, as defined by state law, of or corporation that is dedicated to the benefit of a state agency may
accounting, architecture, landscape architecture, land sur- enter into a contract for audit services only if
veying, medicine, optometry, professional engineering, real
estate appraising, or professional nursing; 1. the agency or corporation is authorized to contract with a
2. provided in connection with the professional employment or private auditor through a delegation of authority from SAO;
practice of a person who is licensed or registered as one of 2. the scope of the proposed audit has been submitted to SAO
the following: a certified public accountant, an architect, a for review and comment; and
landscape architect, a land surveyor, a physician, including
3. the services of the private auditor are procured through a
a surgeon, an optometrist, a professional engineer, a state
competitive selection process in a manner allowed by law.
certified or state licensed real estate appraiser, or a regis-
tered nurse; or In addition, Article IX, Section 6.20 of the General Appropriations
3. provided by a person lawfully engaged in interior design, Act (86th Legislature), provides requirements for state agencies and
regardless of whether the person is registered as an interior
designer under Chapter 1053 of the Occupations Code.223 224
TEX. GOV’T CODE § 2254.003(a).
225
TEX. GOV’T CODE § 2254.003(b).
Professional services procurements are usually advertised as either 226
TEX. GOV’T CODE § 2254.002(1) (defining “governmental entity” to be (a) a state
an RFQ or RFP. The award of a professional services contract is agency or department, (b) a district, authority, county, municipality, or other
political subdivision of the State, (c) a local government corporation or another
based on (1) demonstrated competence and qualifications to per- entity created by or acting on behalf of a political subdivision in the planning and
design of a construction project, or (d) a publicly owned utility).
227
TEX. GOV’T CODE § 2254.004(a).
221
TEX. GOV’T CODE § 2157.003. 228
TEX. GOV’T CODE § 2254.004(b)-(c).
222
TEX. GOV’T CODE § 2254.003. 229
TEX. GOV’T CODE § 2254.006.
223
TEX. GOV’T CODE § 2254.002(2). 230
TEX. GOV’T CODE § 2254.005.

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 Statewide Procurement Division

institutions of higher education that use appropriated funds to con- A consulting services contract cannot be divided into more than one
tract for audit services. contract to avoid the procurement requirements pertaining to major
consulting services contracts.237 In selecting a consultant, the agency
Procurement Method – Consulting Services must base its choice on demonstrated competence, knowledge,
Agencies are authorized to procure consulting services pursuant qualifications, and on the reasonableness of the proposed fee for
to Chapter 2254, Subchapter B, of the Texas Government Code.231 the services.238 If other considerations are equal, the agency must
Acquisition of consulting services is delegated to agencies by statute give preference to a consultant whose principal place of business
and do not require a delegation of authority from SPD. The procure- is located in the State or who will manage the consulting services
ment of consulting services is subject to ESBD posting requirements contract wholly from an office in the State.239
as well as requirements applicable to CAT reviews.
A consulting services contract with an agency must include
Consulting service refers to the service of studying or advising provisions that allow the agency and any other agency and the
an agency under a contract that does not involve the traditional Legislature, at the contracting agency’s discretion, to distribute any
relationship of employer and employee.232 An agency233 may consultant reports and post the report on the agency’s website
contract with a consultant only if there is a substantial need for the or the website of a standing committee of the Legislature.240 The
consulting services and the agency cannot adequately perform the distribution of the report will not affect the application of Chapter
services with its own personnel or obtain the consulting services 552 of the Texas Government Code.241
through a contract with a state governmental entity.234 Consulting
Particular care must be taken to closely follow all statutory require-
services procurements are usually advertised as an RFP.
ments for procuring consulting services. A consulting services
If a contract involves both consulting and other services, the contract, or renewal, amendment, or extension, is void under the
services will be procured as consulting services if the primary following circumstances:
objective of the contract is the acquisition of consulting services.235
1. the contract is entered into without complying with the ESBD
Consider for instance a solicitation for an analysis of an agency’s posting requirements and notification requirements to the
information systems needs and the development and implementa- LBB and Governor’s Budget and Planning Office. (Refer to
tion of a computer system. The primary objective of this contract is the “Pre-Award Notification and Publication Requirements
the delivery of a system and not the analysis provided. This contract for Major Consulting Services Contracts,” “Post-Award
is not a consulting services contract; therefore, the requirements Notification and Publication Requirements for Consulting
for consulting services contracts would not apply. The agency, Services Contracts,” and “Notification and Publication
however, must comply with the applicable procurement method for Requirements for Renewals, Amendments, and Extensions to
Consulting Services Contracts” described in this Section of
acquiring AIS.
the Guide); and
A “major consulting services contract” means a consulting services 2. the contract is entered into with a private consultant who has
contract for which it is reasonably foreseeable that the value of the been employed by that agency or by another agency at any
contract will exceed $15,000 for a state agency or $25,000 for an time during the two years preceding the making of the offer
institution of higher education other than a public junior college.236 and failed to disclose in the offer:
a. the nature of the previous employment with the agen-
231
TEX. GOV’T CODE § 2254.023. cy or the other agency;
232
TEX. GOV’T CODE § 2254.021(1).
b. the date the employment was terminated; and
233
TEX. GOV’T CODE § 2254.026; TEX. GOV’T CODE § 2254.021(5) (defining “state
agency” to be (1) a department, commission, board, office, or other agency in the c. the annual rate of compensation for the employment
executive branch of state government created by the state constitution or a state at the time of its termination.242
statute, (2) the supreme court, the court of criminal appeals, a court of appeals,
or the Texas Judicial Council, or (3) a university system or an institution of higher
education as defined by Section 61.003 of the Texas Education Code, except a
public junior college).
234
TEX. GOV’T CODE § 2254.021(6) (defining “state governmental entity” to be a 237
TEX. GOV’T CODE § 2254.035(a). The value of the contract for purposes of
state department, commission, board, office, institution, facility, or other agency determining division includes all renewals, amendments, and extensions of the
the jurisdiction of which is not limited to a geographical portion of the state. The contract. TEX. GOV’T CODE § 2254.035(b).
term includes a university system and an institution of higher education, other than 238
TEX. GOV’T CODE § 2254.027.
a public junior college, as defined by Section 61.003 of the Texas Education Code. 239
TEX. GOV’T CODE § 2254.027.
The term does not include a political subdivision.). 240
TEX. GOV’T CODE § 2254.041(a).
235
TEX. GOV’T CODE § 2254.038. 241
TEX. GOV’T CODE § 2254.041(b).
236
TEX. GOV’T CODE § 2254.021(2). 242
TEX. GOV’T CODE § 2254.034(a)-(b), (d).

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Statewide Procurement Division

If the contract is void, CPA may not draw a warrant or transmit money Post-Award Notification and Publication Requirements
to satisfy an obligation under the contract and an agency may not for Consulting Services Contracts. An agency must provide
make any payment under the contract with state or federal money written notice in a prescribed format to the LBB not later than the
or money held in or outside the state treasury.243 10th day after the date the entity enters into a contract for consulting
services if the amount of the contract, including an amendment,
Pre-Award Notification and Publication Requirements for
modification, renewal, or extension of the contract, exceeds
Major Consulting Services Contracts. Before entering into a
$14,000.248 
major consulting services contract, an agency must
After the contract is awarded, a notification of award must be posted
1. notify the LBB and the Governor’s Budget and Planning
to the ESBD if the contract is expected to exceed $25,000.249 For a
Office that the agency intends to contract with a consultant;
consulting services contract with a political subdivision, disclosure
2. give information to the LBB and the Governor’s Budget and
and itemization of certain expenditures related to lobbying activi-
Planning Office to demonstrate that the agency has complied
ties are also required by Section 2254.030 of the Texas Government
or will comply with Sections 2254.026 and 2254.027 of the
Texas Government Code; and Code.250

3. obtain a finding of fact from the Governor’s Budget and Plan- Notification and Publication Requirements for Renewals,
ning Office that the consulting services are necessary.244 Amendments, and Extensions to Consulting Services
The Consultant Contract Finding of Fact Request is located on the Contracts.
Governor’s Budget and Planning Office website.245 Notification to
An agency that intends to renew, amend, or extend a major consulting
the LBB should be sent to contract manager@lbb.texas.gov. A major
services contract must comply with “Pre-Award Notification and
consulting services contract that an agency enters into without first
Publication Requirements for Major Consulting Services Contracts”
obtaining a finding of fact from the Governor’s Budget and Planning
described in this Section of the Guide if the contract after the
Office is void. 246
renewal, amendment, or extension is a major consulting services
Not later than the 30th day before the date it enters into a major contract.251
consulting services contract, an agency must post to the ESBD the
An agency that intends to renew a contract that is not a major
following:
consulting services contract must comply with the “Pre-Award
• an invitation for consultants to provide offers of consulting Notification and Publication Requirements for Major Consulting
services; Services Contracts” described in this Section of the Guide if the
• the name of the individual who should be contacted by a original contract and the renewal contract have a reasonably
consultant that intends to respond to the solicitation; foreseeable value totaling more than $15,000, or $25,000 for an
• the closing date for the receipt of proposals; institution of higher education other than a public junior college.252

• the procedure by which the agency will award the contract; An agency that intends to amend or extend a contract that is not a
• information on whether the consulting services sought by the major consulting services contract shall comply with the “Pre-Award
agency relate to services previously provided by a consultant; Notification and Posting Requirements for Major Consulting Services
and Contracts” described in this Section of the Guide if the original
• information on any intention to award the contract for the contract and the amendment or extension have a reasonably
consulting services to a consultant that previously provided the foreseeable value totaling more than $15,000, or $25,000 for an
services, unless a better offer is received.247 institution of higher education other than a public junior college.253

243
TEX. GOV’T CODE § 2254.034(c).
244
TEX. GOV’T CODE § 2254.028(a). This requirement does not apply to a major 248
TEX. GOV’T CODE § 2254.0301(a). Section 2254.301 of the Texas Government
consulting services contract to be entered into by an institution of higher education Code does not apply to a university system or institution of higher education
other than a public junior college if the institution includes in the invitation as defined by Section 61.003 of the Education Code. TEX. GOV’T CODE §
published under Section 2254.029 of the Texas Government Code a finding by the 2254.0301(b).
chief executive officer of the institution that the consulting services are necessary 249
TEX. GOV’T CODE § 2155.083(k).
and an explanation of that finding. TEX. GOV’T CODE § 2254.028(c). 250
TEX. GOV’T CODE § 2254.030.
245
The Office of the Governor website is located at www.gov.texas.gov. 251
TEX. GOV’T CODE § 2254.031(a).
246
TEX. GOV’T CODE § 2254.028(b). 252
TEX. GOV’T CODE § 2254.031(b).
247
TEX. GOV’T CODE § 2254.029. 253
TEX. GOV’T CODE § 2254.031(d).

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Emergency Waiver of Compliance for Consulting ing outside counsel, regardless of the anticipated maximum liability
Services Contracts. The Governor, after receipt of a request from of the anticipated Outside Counsel Contract (OCC).261
an agency, may grant a limited waiver of compliance with the statu-
To obtain OAG approval for the use of services provided by outside
tory provisions governing consulting services for an agency that
counsel, the agency must electronically submit a Request to Retain
requires consulting services before compliance can be completed
Outside Counsel (RtR) and the proposed OCC to the OAG.262 Devia-
because of an unforeseen emergency.254 The waiver request must
tions from the prescribed OCC template are not permitted without
include information required by the Governor, including:
the OAG’s prior approval. An amendment to an OCC also must be
• information about the nature of the emergency; approved by the OAG.263 Questions regarding the electronic submis-
• the reason that the agency did not foresee the emergency; sion process may be sent to general.counsel@oag.texas.gov.

• the name of the consultant with whom the agency intends to If the legal services contract is also a contingent fee contract, the
contract; and
agency must comply with the requirements set forth in Subchapter
• the amount of the intended contract.255 C, Chapter 2254 of the Texas Government Code. The term “contin-
gent fee contract” means a contract for legal services under which
The agency must include a detailed description of the emergency,
the amount or the payment of the fee for the services is contingent
on which the request for waiver was predicated, with the informa-
in whole or in part on the outcome of the matter for which the ser-
tion filed with the Secretary of State for publication in the Texas
vices were obtained.264
Register.256 As soon as possible after the Governor grants a limited
waiver, the agency must comply with the statutory provisions to the A state governmental entity that has authority to enter into a con-
extent that the requirements of the provisions are not superfluous or tract for legal services in its own name may enter into a contingent
ineffective because of the waiver.257 fee contract for legal services only if:

Procurement Method – Legal Services 1. the governing body of the state governmental entity
approves the contract and the approved contract is signed
The OAG provides legal services to state agencies.258 Except as
by the presiding officer of the governing body, or
authorized by other law, a contract for legal services between an
2. for an entity that is not governed by a multimember govern-
attorney, other than a full-time employee of the OAG, and a state
ing body, the elected or appointed officer who governs the
agency in the executive department, other than an agency estab-
entity approves and signs the contract.265
lished by the Texas Constitution, must be approved by the OAG to
be valid.259 Before approving the contract, the governing body, elected or
appointed officer, or governor, as appropriate, must find that:
The OAG may require agencies to obtain outside legal services
through a competitive procurement process, under conditions pre- 1. there is a substantial need for the legal services,
scribed by the OAG.260 Unless an exemption is obtained from the 2. the legal services cannot be adequately performed by the
OAG, an agency is required to publish a Request for Qualifications attorneys and supporting personnel of the state governmen-
(RFQ) on the ESBD for a minimum of 30 calendar days before select- tal entity or by the attorneys and supporting personnel of
another state governmental entity, and
254
TEX. GOV’T CODE § 2254.025(a). “Unforeseen emergency” means a situation 3. the legal services cannot reasonably be obtained from attor-
that suddenly and unexpectedly causes a state agency to need the services of a
consultant. The term includes the issuance of a court order, an actual or imminent neys in private practice under a contract providing only for
natural disaster, and new state or federal legislation. An emergency is not unforeseen the payment of hourly fees, without regard to the outcome of
if a state agency was negligent in foreseeing the occurrence of the emergency. TEX. the matter, because of the nature of the matter for which the
GOV’T CODE § 2254.025(e). services will be obtained or because the state governmental
255
TEX. GOV’T CODE § 2254.025(b).
256
TEX. GOV’T CODE § 2254.025(c). entity does not have appropriated funds available to pay the
257
TEX. GOV’T CODE § 2254.025(c). estimated amounts required under a contract providing only
258
TEX. GOV’T CODE §§ 402.021, 402.0212(a). for the payment of hourly fees.266
259
TEX. GOV’T CODE § 402.0212(a). Invoice processing standards also apply to these
contracts. TEX. GOV’T CODE § 402.0212(b)-(b-3). 261
1 TEX. ADMIN. CODE § 57.4.
260
TEX. GOV’T CODE § 2254.154. Cf. TEX. GOV’T CODE § 2151.005 (The State 262
1 TEX. ADMIN. CODE § 57.3.
Purchasing and General Services Act, Subtitle D of Title 10 of the Texas Government 263
1 TEX. ADMIN. CODE § 57.5(a).
Code does not apply to (1) obtaining outside legal counsel services, (2) obtaining 264
TEX. GOV’T CODE § 2254.101(2).
expert witnesses, or (3) procuring litigation-related goods and services for which 265
TEX. GOV’T CODE § 2254.103(a).
competitive procurement is not feasible under the circumstances.). 266
TEX. GOV’T CODE § 2254.103(d).

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Statewide Procurement Division

Certain contingent fee contracts also require that the agency A written IAC between two agencies is not required in the following
obtain a finding from the LBB that the agency does not have appro- circumstances:
priated funds available to pay the estimated amounts required
1. an emergency for the defense or safety of the civil population
under a contract providing only for the payment of hourly fees.267
or in the planning and preparation for those emergencies;
A contingent fee contract for legal services is void if the agency fails
2. cooperative efforts, proposed by the governor, for the eco-
to obtain the required LBB finding.268 Moreover, a contract entered
nomic development of the state; or
into or an arrangement made in violation of Subchapter C, Chapter
2254 of the Texas Government Code is void as against public policy, 3. a situation in which the amount involved is less than $50,000.
and no fees may be paid to any person under the contract or under
When an interagency exchange is exempt from the requirements
any theory of recovery for work performed in connection with a void
of a written contract, the agencies involved must document the
contract.269
exchange through informal letters of agreement or memoranda. As
with other contractual agreements, it is best practice for a fixed term
Procurement Method – Interagency
to be included in the contract. The inclusion of a termination date
Cooperation Contracts (IACs) obligates the agencies to review and assess whether the contract
An interagency contract is a written understanding between two or is needed and if any changes in contract scope or pricing will be
more agencies270 as authorized by Chapter 771 of the Texas Govern- required before entering into a subsequent agreement.
ment Code. An agency may agree or contract with another agency
for the provision of necessary and authorized services (including Procurement Method – Interlocal
technical services) and materials and equipment. Competitive bid- Cooperation Contracts
ding requirements do not apply to Interagency Contracts.
An interlocal contract is a written understanding authorized by the
Before an agency may provide or receive a service or resource under Interlocal Cooperation Act, Chapter 791 of the Texas Government
the Interagency Cooperation Act, the agency must have entered into Code. The purpose of the Interlocal Cooperation Act is to increase
a written agreement signed by authorized representatives of both the efficiency and effectiveness of local governments by authorizing
agencies and the contract (IAC) must specify the kind and amount of them to contract, to the greatest possible extent, with one another
services or resources to be provided, the basis for computing reim- and with agencies of the State.272
bursable costs, and the maximum cost during the contract term. To
A local government may contract with another local government,
ensure that an IAC is statutorily compliant, the contracting agencies
an agency of the State, an agency of another state, and a federally
must also certify that:
recognized Indian tribe located within the boundaries of Texas.273
1. the services specified are necessary and essential and are
The term “local government” refers to a
properly within the statutory functions and programs of the
affected agencies of state government; 1. county, municipality, special district, junior college district, or
2. the proposed arrangements serve the interest of efficient other political subdivision of this State or another state;
and economical administration of those agencies; 2. local government corporation created under Subchapter D,
3. the services, supplies or materials contracted for are not Chapter 431 of the Transportation Code;
required to be supplied under contract to the lowest respon- 3. political subdivision corporation created under Chapter 304
sible bidder;271 and of the Local Government Code;
4. the contract neither requires, nor permits, either party to 4. local workforce development board created under Section
exceed its duties and responsibilities or the limitations of its 2308.253 of the Texas Government Code; or
appropriated funds.
5. combination of two or more entities described by Para-
graphs 1, 2, 3, or 4.274
267
TEX. GOV’T CODE § 2254.103(e).
268
TEX. GOV’T CODE § 2254.103(f).
269
TEX. GOV’T CODE § 2254.110.
270
TEX. GOV’T CODE § 771.002(1) (defining “agency” to be a department, board,
bureau, commission, court, office, authority, council, or institution of state
government; an institution of higher education or service or part of an institution;
a local workforce development board; and certain statewide job or employment 272
TEX. GOV’T CODE § 791.001.
training programs for disadvantaged youth). 273
TEX. GOV’T CODE § 791.011(a)-(b).
271
TEX, CONST. Art. XVI, § 21; TEX. GOV’T CODE § 771.003. 274
TEX. GOV’T CODE § 791.003(4).

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An interlocal contract must Vendors must respond to an RFQ by submitting their qualifications
to perform specified work. The submissions are reviewed to deter-
1. be authorized by the governing body of each party to the
mine the qualified respondent(s) who are requested to prepare a
contract unless a party to the contract is a municipally owned
electric utility, in which event the governing body may estab- proposal, including cost, to perform the specific work as may be
lish procedures for entering into interlocal contracts that do embodied in an RFQ. Price is not a factor until after the vendor
not exceed $100,000 without requiring the approval of the is selected.
governing body;
2. state the purpose, terms, rights, and duties of the contract-
Procurement Method –
ing parties; and Texas Disaster Act of 1975
3. specify that each party paying for the performance of gov- Under Chapter 418 of the Texas Government Code, the Governor
ernmental functions or services must make those payments may by executive order or proclamation declare a state of disaster278
from current revenues available to the paying party.275 if a disaster has occurred or that the occurrence or threat of disas-
An interlocal contractual payment must be in an amount that fairly ter is imminent. The Governor may suspend the provisions of any
compensates the performing party for the services or functions per- regulatory statute279 prescribing the procedures for conduct of state
formed under the contract.276 In addition, a governmental entity of this business or the orders or rules of an agency if strict compliance with
State or another state that makes purchases or provides purchasing the provisions, orders, or rules would in any way prevent, hinder, or
services under an interlocal contract for a state agency, as that term delay necessary action in coping with a disaster. For example, the
is defined by Section 771.002 of the Texas Government Code, must Governor may suspend enforcement of statutes and administrative
comply with Chapter 2161 of the Texas Government Code in making rules regarding contracting or procurement that would impede any
the purchases or providing the services.277 Depending on the specific agency’s emergency response that is necessary to protect life or
contracting authority and type of services provided, additional statu- property threatened by a declared disaster.
tory requirements may apply to the interlocal contract.
A purchase made under a disaster must clearly relate to the disas-
Procurement Method – State and Federal ter, conform to the directives of the disaster declaration, and occur
within the timeframe specified in the disaster declaration. The pro-
Surplus Property Programs curement file, at a minimum, must contain a copy of the disaster
The Federal and State Surplus Property programs are administered declaration, documentation to support the purchase, receipt of
by the Texas Facilities Commission (TFC). The programs have dif- goods or services, and approval of the payment. An example of a
ferent laws, rules, and procedures. Specific procedures for use of disaster declaration is located in Appendix 11.
these two programs are located in Appendix 10.
Emergency Procurement. If a purchase does not fall within the
Procurement Method – Request for parameters of a Governor-declared disaster, agencies should check
Qualifications whether the purchase qualifies as an emergency purchase under
the applicable procurement method.
A Request for Qualifications (RFQ) is generally used for professional
services wherein the respondents are evaluated based solely on
their qualifications and skills. This solicitation method is more like
an application process, where it is very clear what is expected from
the vendor. Price is negotiated after the agency selects its preferred
respondent based on how well the respondents met the published
qualifications.

278
The term “disaster” means the occurrence or imminent threat of widespread or
severe damage, injury, or loss of life or property resulting from any natural or man-
made cause, including fire, flood, earthquake, wind, storm, wave action, oil spill or
other water contamination, volcanic activity, epidemic, air contamination, blight,
drought, infestation, explosion, riot, hostile military or paramilitary action, extreme
heat, cybersecurity event, other public calamity requiring emergency action, or
275
TEX. GOV’T CODE § 791.011(d). energy emergency. TEX. GOV’T CODE § 418.004(1).
276
TEX. GOV’T CODE § 791.011(e). 279
The Governor's Office maintains a list of regulatory statutes and rules that may
277
TEX. GOV’T CODE § 791.011(g). require suspension during a disaster. TEX. GOV’T CODE § 418.0155.

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Statewide Procurement Division

Solicitation Process
Solicitation ­­– IFB, RFP, RFO, RFQ
Overview
Depending on the procurement method selected, a solicitation may
be required. If the selected procurement method does not require
issuance of a solicitation (e.g., Term Contracts), then the Contract
Developer will proceed to the Vendor Selection step of the Procure-
ment Cycle. For purchases made using informal bidding, refer to
Competitive Bidding (IFBs, Informal Bidding) for the applicable solici-
tation process.

There are certain advantages and disadvantages to every procure-

ment method and it is necessary to consider them in the context
of what is being procured. An Invitation for Bids (IFB), for example,
would not usually be an appropriate procurement method for pro-
curing technical services, as the primary characteristics of an IFB
are lowest price and meeting specifications with no opportunity
for negotiation. Likewise, a Request for Qualifications (RFQ) would
not be a suitable procurement method for procuring goods, as the
essential feature of an RFQ is that price is not a factor until after
vendor selection. When drafting the solicitation, the Contract Devel-
oper must be careful to ensure that the solicitation aligns with the
applicable procurement method.

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 Statewide Procurement Division

Comparison of Competitive Procurement Methods

The table below provides a summary of the distinguishing characteristics for the most commonly used competitive procurement methods.

Comparison of Competitive Procurement Methods

Procurement Method Use When Advantages Disadvantages

Defined specifications may

Award process is simpler. be difficult to develop.

Products and services In determining best value, Does not encourage

Invitation for Bids (IFB) are standardized or price and whether the innovative solutions.
uniform. goods or services meet
specifications are the most Negotiations are not allowed
important considerations. if there is more than one
responsive bidder.

Allows for customized

proposals suggesting
When negotiations are different approaches to the
Request for Proposals (RFP) Lead time for procurement
desired. same business need.
is much greater.

Request for Offers Vendor is expected to Allows for negotiations.

Evaluations tend to be more
provide innovative ideas
(RFO) complex.
or solutions. Considerations in addition to
price are used to determine
best value.

Request for Qualifications Selection is made solely on

(RFQ) [This method is the skills and qualifications Vendor is selected before
Emphasizes the competency
of the vendor. price is negotiated.
usually required by and experience of the
statute, e.g., Professional vendors.
Price is not a factor until Two step process.
Services 1] after a vendor is selected.

TABLE NOTES
1
Texas Government Code, Chapter 2254, Subchapter A.

Request for Applications

In contrast to the procurement methods, a Request for Applications (RFA) is not a sanctioned method for procuring goods and services from
a vendor. An agency issues an RFA when it, as the grantor, is responsible for awarding grant funds to other entities such as other state
agencies, local governments, non-profit organizations or private entities.

An RFA is used to invite grant applications, in which the grants are tied to designated funds and for a specific purpose. An RFA must include
the grant objective, guidelines, and any limitations on spending or eligibility. It is recommended that agencies include the Essential Provisions
in grant agreements. An RFA must also specify evaluation criteria that will determine which applications are funded and any other information
that is needed to submit an application.

When issuing an RFA, an agency should consider the Uniform Grant Management Standards (UGMS) to the extent they are applicable. UGMS
were established to promote the efficient use of public funds by providing awarding (grantor) agencies and grantees a standardized set of
financial management procedures and definitions by requiring consistency among grantor agencies in their dealings with grantees.

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Statewide Procurement Division

Solicitation – Preparation Procurement Lead Time

One of the first steps in the solicitation process is to consider
Overview
the procurement lead time. Procurement lead time is the interval
Once the Contract Developer has conducted a needs assessment, between a decision to purchase a product or service to when the con-
obtained a cost estimate, developed an Acquisition Plan, chosen the tract is awarded. The suggested lead time is 180 days from start to
proper procurement method, and determined that a solicitation is completion, but this time frame will vary depending on the specific
required, the next step is to begin drafting the solicitation. For some requirements of the agency and the complexity of the procurement.
procurements, like spot purchases or purchases using a set aside
program or Term Contract, the solicitation development activities Examples of tasks that may impact the lead-time include, but are not
by the Contract Developer may be comprised of an administrative limited to, the following:
due diligence review of the requirements listed on the requisition
• The actual preparation of the solicitation document can affect
for compliance with applicable procurement law and agency best
lead-time. Coordination and collaboration between members
practice before initiating the purchase. of the various agency teams, as well as structured planning and
thorough research can shorten this period. On the other hand,
For other procurements, the solicitation drafting phase of the
inadequate planning and research along with lack of communi-
Procurement Cycle involves a collaborative multi-departmental cation among team members, each with subject matter exper-
approach. For these procurements, it is common for there to be a tise, may cause the preparation of the solicitation document to
kick-off meeting with the key stakeholders (such as the Contract be prolonged.
Developer, end-user, subject-matter experts, Contract Manager,
• The time required for the Contract Developer to finalize the
legal personnel, and informational technology representatives, solicitation document can vary depending on how well the
if applicable) to discuss the requirements for administering the scope of work or specifications are written by the end users.
contract from solicitation issuance to contract closeout. The number The Contract Developer is responsible for ensuring the solici-
of key stakeholders involved in the solicitation drafting activities tation documents are complete, allow for competition, and
increases relative to the complexity of the procurement. follow all applicable statutes, rules, and procedures.
• A 30-day solicitation period is recommended for RFPs, while
Each solicitation is unique, so for the solicitation to be successful, the RFOs may necessitate a longer posting time. Individual agen-
Contract Developer must not only be familiar with the requirements of cies are encouraged to consider the solicitation posting times
the agency’s needs, in terms of what is being procured, but also the on a case-by-case basis, keeping the statutorily mandated
applicable industry standards as well as the statutory requirements minimum time periods in consideration. A particularly complex
and procurement practices associated with the selected procurement or unusual scope of work may result in many vendor questions,
method. For example, if an agency is procuring medical staff, the in which case, an extended solicitation period would be recom-
mended.  Evaluation of the proposals may take more or less
Contract Developer must be knowledgeable that
time, depending on the size of the evaluation committee and
• an IFB, which does not permit negotiation, would not be a suit- the complexity of the procurement. Likewise, the number of
able procurement method to acquire these services, and proposals to be evaluated impacts the evaluation time frame.
The evaluation period could also be extended if there are pre-
• the solicitation and any resulting contract must include a sentations, discussions, or best and final offers.
requirement for the medical staff to hold and maintain proper
professional licenses and certifications, a means for the Con- • Contract negotiation and contract formation timeframes may
tract Manager to monitor the requirement during the contract vary depending on the complexity of the procurement and
term, and a remedy for vendor noncompliance. the skillset of the agency’s negotiation team. Also, personnel
unavailability may also be a factor as delays may occur due to
inclement weather events, national and local holidays, illness,
scheduled vacation, and the like.
• The actual process of award may be quick in smaller agencies
but lengthier in larger agencies with more detailed approval
processes, or where board approval is required. This time-
frame may also differ significantly between a PO and a formal
executed contract. Depending on the signature requirements
of the agency and the contractor, the contract execution lead-
time may need to be adjusted.

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 Statewide Procurement Division

As part of the solicitation planning process, it is best practice to use the table below or similar tool to document the procurement lead time.
The chart below is a guideline for documenting procurement lead time in simple procurements with minimal vendor negotiation required.

Procurement Lead Time

(Template)

Task Number of Days to Complete Due Date

Decision Made to Procure — April 10th

Drafting Solicitation 45 days May 25th

CAT Review ≥ $5M

SPD Delegation Review:
Services > $100K 30 days June 24th
SPD Delegation Review:
Goods > $50K

Finalize Solicitation for Issuance 15 days July 9th

Solicitation Advertised — July 9th

Submission of Questions 4-5 days July 13th

Release of Official Response to Questions 2-3 days July 15th

Response Deadline 14 days July 23rd

HSP Evaluation 3 days July 26th

Evaluation of Responses 14 days August 9th

Contract Negotiation
10 days August 19th
(if allowed) and Formation

Contract Execution
12 days August 31st
(all signatures obtained)

Performance Begins Contract Effective Date September 1st

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Statewide Procurement Division

Internal Calendar of Events The internal calendar of events must be included in the Acquisition
Plan or other procurement monitoring tool that is used as a gauge
It is prudent for an agency to develop an internal calendar of events
to keep the procurement on schedule. In developing the internal
for the procurement. The internal calendar of events should include
calendar of events, Contract Developers should be mindful of the
not only the dates detailed in the external calendar of events, but
amount of the time scheduled for document review. Contract Devel-
also the milestone dates of activities or events occurring pre- and
opers must allow sufficient time for oversight reviews, such as SPD
post- solicitation identified by the agency to be critical to the suc-
Delegation, CAT review, and QAT review (if necessary), and mean-
cess of the procurement.
ingful evaluation and negotiations. A procurement value threshold
Critical path events to be addressed in the internal calendar of events chart is located in Appendix 7.
may include routine activities such as the agency’s standard inter-
Below is an example of an internal calendar of events, beginning with
departmental workflow timelines and fiscal year end deadlines and
pre-solicitation milestones, continuing to encompass the solicitation
procurement-specific events such as statutorily mandated project
calendar of events, and ending with post-solicitation milestones.
commencement dates and the onboarding of a successor contractor
prior to cessation of services by the incumbent contractor.

Internal Calendar of Events

1 Budget (approval/questions)

2 Kick Off Meeting (CD, CM, End User)

3 Draft Solicitation

4 Agency Approvals for Issuance

CAT Review ≥ $5M
5 SPD Delegation Review: Services > $100K
SPD Delegation Review: Goods > $50K

6 Solicitation Issued

7 Pre-Bid/Offer/Proposal Conference

8 Due Date for Written Questions

9 Date of Issuance of Agency’s Written Answers

10 Due Date for Responses

11 Internal Post Award Meeting

Vendor Selection
12
Evaluation Committee (RFP, RFO, RFQ) or Bid Tabulation (IFB)

13 Negotiation (if permitted) and Contract Formation

14 Contract Award

15 Transition Meeting Between Contract Developer and Contract Manager

16 Post Award Meeting with Contractor

17 Project Start Date

18 Project Completion

19 Contract End Date

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 Statewide Procurement Division

Drafting Tips inappropriate use could result in a restrictive specification

or disqualification of a response.
A solicitation is effective when the agency’s requirements are clearly
articulated to the vendor community. In contrast, a solicitation May and Should. The words “may” and “should” are used
is ineffective if it is awkwardly worded, disorganized, or contains to describe an advisory or permissible action. These
errors or visual distractions. A poorly drafted solicitation may prompt words do not represent a mandatory condition for which
responses that are not aligned with the agency’s actual require- the vendor must comply.
ments or include unnecessary costs due to vendor confusion. It is
5. Use Terms Consistently. The use of consistent terminology
imperative that the solicitation be written in a manner that attracts
throughout the solicitation helps the reader understand the
responses that meet the agency’s business need.
scope of work as well as the terms and conditions of the
The following are techniques which are commonly used in effective procurement. In contrast, using multiple terms to describe
a particular person, function, activity, item, or entity is likely
solicitation drafting.
to cause confusion. For example, it is not advisable to use
1. Organize Content for Readability. Present the information the following terms interchangeably within the solicitation
in a logical manner. Include relevant documents (e.g., orga- to indicate the same entity: successful respondent, selected
nizational charts, site plans, work flow diagrams) as attach- vendor, awarded vendor, vendor, selected contractor,
ments to the solicitation to facilitate readability and ease of awarded contractor, and contractor.
reference. 6. Avoid Ambiguity. Do not use terms that have the potential
2. Use Short, Precise Sentences. The information contained for more than one interpretation. Define terms, even indus-
in the solicitation should be presented in a direct manner. try terms, to ensure there is no misunderstanding as to the
For example, the text should plainly state who is to do what: meaning of the term.

In its Response, Respondent must include…. 7. Avoid Repetition. State the requirement one time.
Stating a requirement more than once does not empha-
The Awarded Vendor shall provide…. size its importance, but it does increase the likelihood
of confusion especially if there are slightly different
The Solution delivered by the Awarded Vendor shall variations of the requirement stated in different parts
include the following…. of the solicitation.
8. Proofread. The solicitation should be proofread to ensure
Within five (5) business days of receipt of the Project that the requirements are clearly and accurately described,
Plan, the Agency shall…. extraneous statements that have no practical value are
removed, and there are no spelling errors. The final version
3. Use Active Voice. Active verbs assign responsibility to a
particular entity more clearly than passive verbs. of the document should have a professional look and feel.

Example of Active Voice: Contractor shall develop Use of Hyperlinks in Solicitations. Agencies may use hyperlinks
the Solution to be scalable within solicitations as a convenient means to deliver electronic con-
to X standard. tent to potential respondents. However, the incorporation of informa-
tion through the use of hyperlinks should be carefully considered.
Example of Passive Voice: The Solution shall be
While hyperlinks may provide an efficient means by which to transmit
scalable to X standard.
information, they also give rise to issues which include, but are not
In the passive voice example, it is not apparent whether limited to, the following:
the contractor, the agency, or both parties are responsible • Inaccurate or Extraneous Information. Templates are
for the referenced standard. The preferred writing style often used as a starting point when solicitations are drafted
for solicitations is to use active rather than passive verbs. and, while hard copy content may be reviewed by the drafter,
hyperlinks are sometimes overlooked and not verified for accu-
4. Use “Shall,” “Must,” “May,” and “Should” racy. Consequently, the issued solicitation may contain errors
Appropriately. or otherwise convey information that is not consistent with the
Shall and Must. The words “must” and “shall” are used drafter’s intent.
to describe a command or mandatory condition. Care • Inadvertent Amendment to Solicitation or Contract.
should be taken when stating mandatory conditions as Information on web pages may change over time. The terms

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Statewide Procurement Division

of a solicitation or resulting contract may be inadvertently INTRODUCTION

amended depending upon the nature of the information
provided by way of hyperlink in the solicitation. The introduction section of the solicitation provides the vendor com-
munity with a high-level summary of the procurement. This portion
• No Record of Hyperlink Content. Hyperlinks may become
of the solicitation may contain a brief narrative description of the
inactive because web pages are moved or no longer exist.
This is of particular concern after contract award as uncertainty historical events relevant to the agency’s business need and, if
of contract terms may lead to service delays, disputes, and appropriate, the agency’s future intentions that may have bearing
possibly litigation. on the products or services to be procured. Care must be taken that
contractual requirements are not included in the informational text.
The best practice for most solicitations may well be to avoid the use of
hyperlinks altogether. If hyperlinks are used, the electronically linked Solicitation Calendar of Events. It is best practice to incorporate
information should be downloaded, included in the procurement file, a calendar of events in the solicitation. Ideally, the calendar of events
and properly retained in accordance with applicable records reten- should be located near the front of the document so vendors can
tion schedule. Guidance regarding the use of hyperlinks within solici- quickly determine how long they have to submit questions, prepare
tations should be sought from agency legal counsel. responses, and plan for the anticipated date of award.

Content The Contract Developer must ensure that the timeframes

provided in the solicitation calendar of events are appropriate to
OVERVIEW the complexity and cost of the solicitation. The solicitation period
The solicitation must contain all information required for vendors should allow a reasonable time for interested eligible vendors to
to respond to the agency’s procurement opportunity. The content respond. The Contract Developer should be mindful that shorter
of a solicitation will vary depending on what is being procured, the response deadlines may limit the number of vendor responses or
complexity of the transaction, and the identified risks associated with even discourage participation by vendors.
the procurement. Care must be taken to identify all of the agency’s
requirements in the solicitation, because the agency will not be able The following example lists the events that are typically included in
to hold a vendor accountable for performance of a requirement that the solicitation calendar of events.
is not specified in the solicitation or resulting contract.
Solicitation Calendar of Events
Contract Developers must not only ensure that the solicitation
1 Date of Solicitation Issuance
contains all of the agency’s requirements but also that those
requirements are presented in an organized manner. Because there 2 Pre-Bid/Offer/Proposal Conference
is not a statewide solicitation template that is mandated for agency
3 Due Date for Written Questions
use, agencies have developed their own agency-specific solicitation
templates. For reference, examples of CPA solicitation templates 4 Date of Issuance of Agency’s Written Answers
are available in the Procurement Forms Library located on the CPA
website.280 5 Due Date for Responses

Solicitations, regardless of organizational structure, usually include 6 Anticipated Date for Commencement of Services
the following components:

• Introduction MINIMUM VENDOR QUALIFICATIONS

• Minimum Vendor Qualifications Vendor qualifications relate to the characteristics of the vendor. Care
• Scope of Work must be taken to ensure that the minimum vendor qualifications
are tailored to the business need. Examples of minimum vendor
• Payment and Pricing Terms
qualifications include the following:
• Contract Term
• Terms and Conditions • specified technical skill, certification, or licensing requirement;

• Response Submission Requirements • minimum number of years’ experience (business and/or

personnel);
• Evaluation Criteria for Award
• production facility requirements;
The CPA website is located at Comptroller.Texas.Gov.
280

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 Statewide Procurement Division

• projects of similar size and scope; • Permit reasonable access to agency personnel
• not presently debarred from participation in state contracts, and • Grant suitable access to agency facilities (including storage
space for vendor materials and supplies), equipment, and
• demonstration of adequate financial capability based on stan-
dards that are defined within the solicitation. computer systems
• Evaluation of vendor performance (e.g., standards of perfor-
Prequalification Criteria. If the agency determines that certain mance, inspection, testing, and deliverable acceptance and
vendor qualifications must be met for the response to be eligible rejection process)
for consideration, these qualifications must be clearly stated in the • Communication protocol (e.g., designated points of contact,
solicitation. These criteria are reviewed by the agency on a “pass/ routine communications, and escalation plan for problem
fail” basis. The solicitation must provide notice to interested vendors resolution)
of the threshold condition(s) which, if not satisfied, will result in the
agency’s rejection of the response. If these criteria are not clearly When drafting the scope of work, the Contract Developer should
evident from the context of the solicitation, it is recommended that select the appropriate specification type, consider utilizing deliver-
prequalification criteria be identified by a statement similar to the ables and milestones, and include applicable professional license
following: “Failure to meet this mandatory qualification shall result and certification requirements and established standards. The
in disqualification of the response and the response shall receive no Contract Developer should also incorporate into the scope of work
further consideration.” the strategy for monitoring vendor performance and all applicable
transaction-specific requirements. As appropriate, the Contract
SCOPE OF WORK Developer should seek the assistance of agency information secu-
rity personnel and legal counsel regarding the suitability of internal,
Overview possibly confidential, agency information being included as part of
The scope of work is a description of the products and services to the solicitation.
be provided by the vendor who is awarded the contract. The Con-
tract Developer should use the business requirements identified in Specifications
the Needs Assessment as the starting point for drafting the scope A specification is a description of a product or service the agency
of work. The success or failure of a contract can usually be linked seeks to procure and is also what the vendor must offer to be con-
to the adequacy of the planning, analysis, and thoroughness of the sidered for contract award. The most common types of specifica-
scope of work. Time spent planning, analyzing, and drafting the tions used in government procurements are
scope of work will result in savings of time, resources and money,
and will improve the quality of products and service provided. • performance-based,
• design-based, or
The scope of work should be written in a manner which provides
• mixed (i.e., a comingling of both performance- and design-
a clear and thorough description of the products and services to
based specifications).
be provided while at the same time fostering competition. A scope
of work should be logically organized and tailored to the agency’s Performance-Based Specifications. Performance-based
business need. Matters customarily addressed in a scope of work specifications focus on outcomes or results rather than the process
include the following: by which the products and services are produced. Respondents
bear the burden of choosing the approach that will be utilized to
• Vendor responsibilities
accomplish the agency requirement. Performance based specifica-
• Provide compliant deliverables by the due date tions allow respondents to bring their own expertise, creativity, and
• Furnish services using qualified personnel resources to satisfy the agency requirement. Agencies must ensure
• Perform tasks at a specified location that performance specifications are reasonable and measurable.
• Constraints on the vendor
• Limited availability of agency resources (e.g., Mon.-Fri.
8 a.m. to 1 p.m. CT access only)
• Agency security policies (e.g., state building admittance
procedures, email encryption protocols)
• Agency responsibilities

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Statewide Procurement Division

Design-Based Specifications. Design-based specifications focus on how the vendor must perform the service or how the product is
made rather than what the product or service does. Respondents have very little discretion as to the methods or detailed processes to be
used. Agencies must ensure that processes are in place to properly inspect and test for compliance with the specifications.

Examples of Performance-Based, Design-Based, and Mixed Specifications

Contractor shall provide media services for Texas Tourism which shall increase the tourist
dollars by a minimum of 3 percent in the next fiscal year. Visits by out-of-state tourists shall
increase by a minimum of 10 percent. These figures will be measured as reported by the Texas
Performance-based Chamber of Commerce.
specification
Contractor shall provide a pen that precisely writes with no skipping or smearing. Ink shall not
penetrate through paper. Minimum writing distance of ink shall be 500 miles.

Contractor shall conduct at least seven media campaigns for Texas Tourism during the fiscal
year. Three of these campaigns must be directed to out-of-state tourists.

Design-based specification
Contractor shall provide a pen that has a white round plastic barrel of ¼-inch-diameter.
Length of pen, including cap, shall not exceed 5-¾ inches. Ink cartridge shall have a tungsten
carbide ball in stainless steel tip. Point shall not exceed 0.3 mm fine point. Ink shall be black.

Contractor shall provide media services for Texas Tourism which shall include a minimum of
seven media campaigns during the fiscal year. Media services shall provide for a minimum
increase in tourist dollars of 3 percent in the next fiscal year as measured and reported by the
Mixed specification Texas Chamber of Commerce.

Contractor shall provide a 0.3 mm fine point, black ink pen. The pen shall precisely write with
no skipping or smearing.

Descriptive Specifications – Referenced Brand or Equal. submittal requirements for evaluation. For example, a solicitation
Descriptive specifications for products must provide those principal clause for a referenced brand is as follows:
physical, functional or other characteristics that are essential to the Catalogs, brand names, or manufacturer’s references are
minimum business needs while providing open and competitive bid- descriptive only and indicate type and quality desired. Bids on
ding. The specifications should not include minimum or maximum brands of like nature and quality will be considered. If propos-
restrictive dimensions, weights, materials or other characteristics ing other than the referenced brands/model number, Bidder
that are unique to one brand name or would eliminate competi- must provide the manufacturer, brand, or trade name, product
tion of other products. As a best practice, a minimum of two known number and provide complete descriptive information of prod-
acceptable manufacturer/brand names and model numbers that are uct offered and include it with the bid.
currently being manufactured should be referenced as “or equal.”
Restrictive descriptive characteristics which are essential to the The evaluation of “or equal” offers shall be given full consideration
intended use may be included only if all the manufacturer/brands and offers meeting the specification shall not be rejected for minor
referenced in the solicitation can qualify. differences in design, construction or features from the reference
models that do not affect the suitability of the product for its
An example of a referenced brand or equal is as follows: Referenced intended use.
Manufacturer/Brand, Product/Model Number or Equal: ABC Mfg No.
1234 or XYZ Mfg. Co. No. 556677. The solicitation should include a
clause citing the purpose for the references as “or equal” and the

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 Statewide Procurement Division

Restrictive Specifications. Restrictive specifications have accepted standards. The solicitation must require the contrac-
the potential to limit competition. Agencies must be careful not tor to maintain the license and certification during the term of the
to inadvertently customize a product or service when drafting contract, notify the agency if there is a change in status, and specify
specifications. As an example, consider an agency purchase of the remedies available to the agency for contractor non-compliance.
4-inch resealable bags when the agency’s business need could be
satisfied with the industry standard of a 5-inch resealable bag. In Established Standards
this scenario, the agency requirement of a non-standard bag size Depending on the procurement, using an established standard (e.g.,
will reduce the eligible vendor pool to only those vendors capable international, national, state, local, industry) is an effective means
of providing the customization as well as result in increased cost of defining performance requirements. Examples of national and
to the State due to the customization. Regardless of whether the international standards include American National Standards Insti-
specification is performance-based, design-based, or mixed, tute (ANSI), American Society for Testing and Materials (ASTM), Inter-
restrictive specifications which result in proprietary procurements national Organization for Standardization (ISO), Occupational Safety
are not permitted unless the procedures for Proprietary Purchases and Health Organization (OSHA), and National Institute of Standards
are followed. and Technology (NIST).

Deliverables and Milestones Agencies may also reference published standards maintained
by entities representing particular industries such as Generally
Deliverables and milestones are often used in projects to assess
Accepted Accounting Principles (GAAP), Institute of Electrical and
whether required tasks are being provided in accordance with
Electronic Engineers (IEEE), National Electrical Manufacturers
an agreed timeline. Depending on the procurement, the Contract
Association (NEMA), and Payment Card Industry (PCI). If a standard
Developer may decide to utilize deliverables and milestones for
is incorporated by reference, the scope of work must identify any
certain contractor activities described in the scope of work. One
industry, state or agency standards of performance that relate to
of the benefits to specifying key deliverables and milestones in the
each activity, task, work product or deliverable. Merely referring to
solicitation is that it establishes the agency’s expectations regard-
“industry standards” is usually inadequate. If an industry standard
ing timeline and payment (e.g., major deliverables should be tied
is used, the scope of work should specifically identify the industry
to a milestone payment schedule) and ensures that all respondents
standard by name and number.
will submit responses using the same agency-designated service
parameters.
Monitoring Activities
Deliverable. A deliverable is a measurable task or outcome (e.g., When developing the scope of work, the agency should consider
product, service). A report is one of the most common contractor- the strategy it will utilize to monitor the quality of the contractor’s
provided deliverables. There are various types of agency-requested performance. The methods used to monitor contractor performance
reports. For example, a status report is used by the agency to assess should be clearly stated in the solicitation. Requiring a contractor,
whether products and services are being provided by the contractor without prior notice, to produce time-consuming reports or maintain
on schedule; a time sheet, however, is used by the agency to track stringent testing standards outside normal industry parameters is
time spent by contractor personnel in performance of the contract. grounds for legal challenge.
Milestone. A milestone is a scheduled event associated with
The monitoring activities chosen by the agency should be balanced
a deliverable. Milestones are a means to gauge progress. For
in type, scope, and frequency to achieve the desired result for the
instance, a milestone may be the date when a specified percentage
particular procurement. Overly restrictive oversight may interfere
(e.g., 10 percent) of work is complete or mark the occurrence of the
with the contractor’s ability to accomplish the work and may unnec-
installation of a critical piece of equipment.
essarily and inadvertently increase costs. Examples of monitoring
activities which may be included in the scope of work include an
Professional Licenses and Certifications
established timeline for completion of major tasks, scheduled meet-
If the type of service to be procured requires a professional license ings, and submission of status reports. To the extent that particular
or certification, the solicitation must describe the applicable licens- vendor performance monitoring activities are mandated by an appli-
ing and certification standard. Failure to include the appropriate cable funding source, such as federal funds, these must be specified
license and certification in the solicitation places the agency at in the scope of work.
risk of receiving a deliverable that does not conform to generally

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Statewide Procurement Division

Additional Considerations For an effective solicitation, the scope of work and pricing terms
must be aligned and the agency’s pricing terms must be consistent
Agencies should be mindful of any requirements that may have
with industry standards. It is common practice for solicitations to
aspects which are unique to public sector transactions. If applicable
include a price sheet or other agency-created form which describes
to the procurement, issues such as the following must be addressed
the products and services to be procured and the unit of measure
in the scope of work as they may affect pricing:
that will be the basis for payment (e.g., job, lot, month). The pricing
• Use of agency equipment; terms selected by the agency will vary depending on what is being
• Storage space for contractor materials and supplies; procured. For example, in an equipment purchase, the agency will
determine whether its pricing terms are (1) a lump sum price that
• Required permits;
includes the cost for the equipment, shipping, and installation, or (2)
• Subcontractor responsibilities; a separate line item price for each individual component.
• Texas Public Information Act obligations;
An essential component to the payment terms is the timing of the
• Conflict of interest disclosures and/or organizational restric-
tions; payment. When and how the agency will make payments must be
clear in the solicitation. For example, will the entire amount be paid
• Criminal background investigation requirements;
at the end of the project or will the contractor be permitted to bill for
• Agency security policies (e.g., state building admittance proce- work performed monthly or quarterly in arrears?
dures, email encryption protocols);
• Intellectual property/copyright issues; Best practice suggests that each payment should reflect the value
of the work performed. For projects with a long-term implementa-
• Accessibility standards;
tion schedule, an agency may control the payment process by divid-
• Lease (operating/finance) conditions; ing the overall contract payments into smaller amounts that each
• Trade-in equipment option; reflects an increment of work or deliverable. This is an effective
• Records retention period; technique for managing financial risk. The scope of any dispute
• Disposal of property requirements; and between agency and contractor can be contained to a discrete
deliverable rather than the entire contract.
• Special conditions imposed by funding source (e.g., federal
funds). Disclosure of Budget. The State does not typically disclose its
budget in the solicitation because it may either (1) result in all ven-
PAYMENT AND PRICING TERMS
dors bidding to the agency’s identified budget rather than offering
Overview competitive pricing or (2) discourage vendor participation if the
Payment and pricing terms are included in the solicitation to provide established (initial) budget is not commercially reasonable. How-
all competing respondents with the same information detailing how ever, there are certain procurements, such as marketing services, in
payment will be remitted or costs reimbursed under the contract. which it is customary for the budget to be disclosed.
In order to develop the appropriate payment and pricing terms, the
Reimbursement Methodologies
Contract Developer must have a thorough understanding of the
business requirements as well as the applicable industry standards. Payments should be structured to fairly compensate the contractor
and encourage timely and complete performance of work. The fol-
lowing table provides a summary of the three most common reim-
bursement methodologies.

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 Statewide Procurement Division

REIMBURSEMENT METHODOLOGIES
Fixed Price Time & Materials Cost Reimbursement

Payment Payment to vendor is Payment to vendor of a

Payment to vendor of direct and indirect
total price for well-defined pre-determined amount per
Terms costs actually incurred
product or service unit (e.g., service or item)

Project scope cannot be

precisely defined
Requirements are precisely Project Scope cannot be precisely defined
When to Use defined Off-the-shelf products or and costs cannot be accurately determined
standard services are required
but quantity is uncertain

Vendor assumes most of Payment based on quantity of Allows forward movement when the scope
the risk because vendor work actually completed of work details are uncertain
Benefits will be paid the same Large quantities may lead to Purchaser obtains full cost information from
regardless of actual cost volume price discounts vendor

Purchaser bears burden of cost overruns

Requires significant monitoring (e.g., market fluctuations)
Vendor is motivated to look effort by purchaser
Drawbacks Vendor does not have an incentive to
for “out of scope” items Payment not linked to vendor’s control costs
achievement of a goal
Administrative burden of validating all costs

Advance Payment It is best practice to request the respondent to indicate in the

response whether any early payment discount (also referred to as
An agency may not pay for goods or services before their delivery
a cash discount) is offered to the agency for early payment. For
to the agency unless the advance payment is necessary and serves
example, if a respondent offers 2/10 Net 30, an agency can take the
a public purpose. A list of exceptions to the advance payment pro-
2 percent discount if it pays before or by the 10th day.
hibition is located on eXpendit State Purchase Policies on the CPA
website.281 Exceptions include, but are not limited to, lease costs, Note that an early payment discount and the terms of the offer
subscriptions, and maintenance contracts. An agency that makes an presented in a solicitation response must not be considered in the
advance payment to a contractor is responsible for pursuing appro- evaluation.
priate legal remedies to recover the payment if the contractor fails
to provide the good or service. Retainage
If permitted by the contract, an agency may withhold an amount or
Early Payment
percentage of each payment due as retainage. The entire retain-
When it is possible, an agency shall negotiate a prompt payment age amount will be payable upon successful completion of the proj-
discount with a vendor.282 The State’s policy on payment scheduling ect. Upon completion of the project, the contractor will invoice the
prohibits agencies from making payments earlier than the payment agency for any outstanding work and for the retainage.
due date unless it is required by law, contract, or other obligation
to the contractor to process the payment before the payment due Invoice Requirements
date. A contractor’s request on an invoice that the invoice is paid The solicitation must specify any invoice procedures that apply to
immediately upon receipt is not an obligation to make an early pay- the procurement. The Contract Manager will monitor these proce-
ment to the contractor. Accordingly, the contract must specify any dures to ensure that payment for authorized products and services
early payment discounts available to the agency.283 is remitted only in accordance with the contract terms. Although rec-
281
The CPA website is located at Comptroller.Texas.Gov. ommended for all procurements, for certain procurements, agen-
282
TEX. GOV’T CODE § 2251.030(a). cies must design and implement procedures to detect and report
283
TEX. GOV’T CODE § 2251.030(a).

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Statewide Procurement Division

double-billing by vendors284 and review their payment and reim- and a specific expiration date. A reasonable contract term compliant
bursement methods and rates biennially.285 with applicable law must be included in the solicitation. Indefinite
contracts are generally prohibited.
State and Federal Taxes
As a general policy, it is recommended that the maximum duration
Purchases made for the State are exempt from the imposition of
for a contract without reissuing a competitive solicitation is four to
certain taxes. The following clause is recommended for solicitations:
five years.289 This includes any renewal or extension periods. Indi-
“Purchases made for state use are exempt from the Texas vidual business needs may dictate a different period and agencies
state sales tax, and certain purchases are exempt from should consult their legal counsel for advice on this matter early in
federal excise tax.” the planning process.

In addition, it is recommended that a tax exemption statement The solicitation must include a termination for non-appropriations
appear on the front of each PO. State and Federal Tax Exemption clause if the term of the contract will cross a fiscal year. A termi-
Certificate forms are available in the Procurement Forms Library nation for non-appropriations clause is an Essential Provision for
located on the CPA website.286 agency contracts. Refer to the Termination section of this Guide for a
discussion of the following termination provisions: (1) termination by
In situations where solicitations require both labor and materials, mutual agreement, (2) termination for convenience, (3) termination
the State is exempt from the tax paid by contractors on behalf of for cause, and (4) termination for non-appropriations.
the State for the incorporated materials they supply. The contractor
must always pay the tax unless the materials will be used entirely for TERMS AND CONDITIONS
the State’s project. When fulfilling a state contract, contractors must
Overview
pay any applicable tax on the purchase and rental of equipment,
accessories, and repair or replacement parts for equipment.287 Clearly stated terms and conditions are the most effective means of
protecting the agency from unintended risk. It is a common practice
State and Local Sales Tax. The State is exempt from paying for contracts to include standard terms and conditions that are often
state sales tax and local sales tax (city, transit authority, etc.).288 referred to as “boilerplate.” Refer to the Contract Terms section of
Taxes of other states are not applicable to the purchase if a free on this Guide for information about the Essential and Recommended
board (FOB) destination in Texas is specified.
See General Appropriations Act, House Bill 1, 86th R.S. at Article IX, Section 17.10(c)
289

(providing that an agency or institution of higher education may not use funds
Federal Excise Taxes. The State is exempt from paying federal appropriated elsewhere in the GAA to pay for a contract for goods or services unless it:
excise taxes for specified commodities. (1) Seeks competitive bids before renewing or extending a contract that has been
in effect more than five fiscal years as of August 31, 2019 and is valued at the
State Motor Fuels Tax. Agencies are required to pay the state lesser of $10,000,000 or 10 percent of the agency’s All Funds budget for the
motor fuels tax on gasoline and diesel fuel. However, agencies hold- 2020-21 biennium. The following contracts are exempt from the requirements
of Subsection (c)(1) of this § 17.10:
ing either a Dyed Diesel Fuel Bonded User permit or Dyed Diesel
(A) Texas SmartBuy, Term Contracts, and cooperative contracts administered
Fuel Signed Statement registration are not required to pay the state by the CPA or DIR;
motor fuel tax on dyed diesel fuel bought to use in off-highway (B) grants;
equipment. Agencies may request a refund of state motor fuels (C) interagency contracts;
taxes paid on gasoline and diesel fuel used in off-highway equip- (D) contracts that relate to a construction project as defined by Section
ment. Agencies should contact SPD for information on obtaining a 2166.001 of the Texas Government Code;
diesel fuel permit or requesting a refund. (E) contracts that relate to highway construction or highway engineering;
(F) contracts that relate to developing information resource applications or
CONTRACT TERM AND TERMINATION information resource technologies;
(G) contracts not required by law to be competitively bid; and
The term of a contract is a definite period of time that the contract
(H) managed care contracts in the Medicaid and CHIP program.
will remain in effect. All contracts must have a commencement date
(2) Conducts a cost-benefit analysis to compare canceling or continuing any major
information resource project and related contracts subject to QAT monitoring
284
TEX. GOV’T CODE § 2261.201.
that is more than 50 percent over budget or over schedule. QAT must approve
285
TEX. GOV’T CODE § 2261.151.
the cost-benefit analysis for the project to continue. If this requirement is not
286
The CPA website is located at Comptroller.Texas.Gov.
met, corrective actions in Article IX, Section 9.02, of the GAA apply.
287
TEX. TAX CODE § 151.311.
288
TEX. TAX CODE § 151.309(4).

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 Statewide Procurement Division

Provisions of a State contract. It is recommended that public for the safeguarding of confidential information should be included
procurement professionals work closely with agency legal counsel in the transition plans. Service providers should also perform the
when developing boilerplate for the agency’s solicitation and contract transition activities in good faith and in a cooperative and expedi-
templates. In addition to the agency’s boilerplate terms, the solicitation tious manner.
should include terms tailored to the specific procurement which
Because ambiguity may lead to service delays, the solicitation must
address change control, risk mitigation measures, and remedies.
identify which entity will bear the burden of the transition costs. The
Change Control payment and pricing terms selected by the agency should facilitate
the efficient and effective transition of services with minimal or no
It is best practice for an agency to designate a process in the solici-
disruption to agency operations. Depending on the service and
tation that will be used to manage any anticipated and unanticipated
whether the vendor is performing outgoing or incoming activities,
changes to scope, schedule and pricing that may occur during the
the transition activities may be provided to the agency at no addi-
contract term. This change control process should describe the com-
tional cost, for a fixed fee, or on a cost-recovery basis.
munication protocol and documentation required to make agreed
changes (e.g., amendment, change order). Price Adjustment Based on an Index. For certain contracts,
pricing adjustments (upward or downward) may be correlated to
Change during the contract term may be managed several ways.
a published price index such as the Consumer Price Index (CPI) or
For a non-complex procurement, the change control process may
Producer Price Index (PPI). The CPI and PPI, both published by the
be to simply designate the agency’s purchasing division as the point
Bureau of Labor Statistics, measure price change over time for dif-
of contact for proposed changes and those changes may be exclu-
ferent sets of goods and services. They may be used to account
sively handled by issuing Purchase Order Change Notice (POCN) or
for inflation in long term contracts without the necessity of frequent
signed contract amendment.
re-solicitation.
For more complex procurements, the change control process may
The price adjustment section of the solicitation must identify the
involve a formal routing procedure with prescribed forms, minimum
applicable index such as the following:
review periods, and named individuals with approval authority.
Other change control processes may be documented as plans (e.g., • Producer Price Index: number/description – Pertains to
transition plans) to be implemented if a specific event occurs. commodities
• Consumer Price Index: number/description – Pertains to labor
The benefit of a well-defined change control process is that of
and services
uninterrupted performance while the parties investigate proposed
changes to the contract. Regardless of the change control process • Other Price Index or Market: number/description
selected, the process should expressly state the circumstances In addition, the solicitation must designate the formula to be used.
under which the change is approved. For instance, many service The Bureau of Labor Statistics recommends this formula when using
contracts provide that a change will not be implemented until both the most recent monthly information from the index, where:
parties agree to the change in writing. In contrast, contracts with
A = Index from the month of the due date for the response;
pricing formulas may authorize changes to take effect immediately
OR the effective date/month of the most recent approved
upon the occurrence of a particular external event, or within a des-
price increase
ignated time period following a price index change.
B = Current or latest baseline index
Transition Plans. It is best practice for transition plans to be
included in a solicitation when there is a business requirement of The allowable percent change must be calculated as follows:
uninterrupted service during the transfer between the outgoing B-A ÷ A x 100% = Percent of allowable price increase
and incoming service providers. The transition-in and transition-out
plans describe the coordination activities for both service providers The solicitation must specify how frequently price adjustments may
and the agency. occur during the term of a contract — quarterly, annually or other
time period that best fits the commodity or service.
The transition plans identify the tasks to be completed, the roles and
responsibilities of each entity, resource requirements, dependen- If a price adjustment is allowed only at the time of contract renewal,
cies, and the timelines for key activities. As applicable, provisions then the agency will conduct a review of the current index pricing to

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Statewide Procurement Division

determine whether there will be a price increase or decrease since at least an “A-” rating from A.M. Best Co. to reduce the likelihood
the last baseline. This review will be conducted within the 30-day of a vendor being represented by a financially unsound insurance
period prior to the renewal date because the most recent index carrier.
pricing must be used for the calculation. It is best practice for the
There are many types of insurance policies. Contract Developers
solicitation to require the respondent to specify the maximum
must be knowledgeable about which insurance policies are suitable
amount of the price increase. The respondent may offer price
for the purchase and ensure that dollar values are consistent with
decreases in excess of the allowable percent change at any time
the risk of non-performance by the contractor.290 Care must be taken
during the term of the contract.
not to inadvertently require unnecessary coverage as it may add
Risk Mitigation Measures cost to the contract.

Financial Capability A list of common insurance policies is below:

For high-risk or high dollar procurements, it is best practice to • Commercial General Liability – A policy that protects
require each respondent to provide evidence of financial capabil- business organizations against liability claims for bodily injury
ity to perform all the services required by the solicitation as well as and property damage arising out of premises, operations,
all services offered in the response. For capital-intensive projects, products, and completed operations; and advertising and per-
the solicitation should also require disclosure of the source of any sonal injury liability.
outside financial resources the respondent will utilize to enable it to The standard general liability policy excludes coverage
perform under the awarded contact. for damage to the work performed by the insured or to per-
sonal property in the care, custody, and control of the insured.
For high risk procurements, it is recommended that agencies It is intended to address damage incurred by a third-party. An
reserve the right to determine the financial integrity and responsi- agency can be sued for vicarious liability for these damages.
bility of a respondent and to reject a response on the grounds of • Professional Liability – A policy designed to protect pro-
respondent’s lack of financial soundness. The agency may require fessionals against liability in performing their professional
submission of the following information in the response to assess services. Most professional liability policies only cover
the financial viability of a respondent: economic or financial losses suffered by third parties and
exclude bodily injury and property damage, which is intended
• A copy of the most recent audited financial statements, includ- to be covered by the general liability policy.
ing financial statements with all sub-schedules and footnotes,
• Workers’ Compensation – An insurance program that helps
to include balance sheets, profit and loss statements, change
people with work-related injuries and illnesses. Employ-
in financial position and management letters, with findings and
ees covered by workers’ compensation obtain medical care
responses to findings; or
necessary to treat their injuries and illnesses. It may also
• If audited financial statements are unavailable, unaudited provide payments to replace some of an injured employee’s
financial statements compiled, reviewed and attested by an lost income, up to time and dollar limits set by law, compensa-
independent certified public accountant or certified public tion for burial expenses for employees killed on the job, and
accounting firm. death benefits for dependents of employees killed on the job.
As a best practice, agencies should always ask contractors to
Depending on the procurement, the agency may determine that the carry workers’ compensation. This coverage does not apply to
financial statements certified as accurate by the firm’s chief financial sole proprietors.
officer are acceptable.
• Commercial Umbrella Excess Liability Coverage –
A policy designed to provide protection against cata-
Insurance strophic losses. It generally is written over various primary
Insurance is a common risk mitigation measure. Insurance coverage liability policies, such as the business auto policy, general
should be sufficient to cover all claims against the contractor as well liability policy, watercraft and aircraft liability policies, and
as any costs the agency might incur. The insurance coverage must employer’s liability coverage. The umbrella policy serves three
purposes:
be effective from the commencement of the contract and remain in
place with no lapse at any time during the life of the contract. It is
recommended that the solicitation specify that all insurance policies See General Appropriations Act, House Bill 1, 86th R.S. at Article IX, Section
290

must be obtained from insurance companies licensed in Texas with 17.10(b)(c) (directing agencies to ensure dollar values of insurance are consistent
with risk of nonperformance).

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 Statewide Procurement Division

1. it provides excess limits when the limits of underly- Warranties

ing liability policies are exhausted by the payment of
A warranty is an assurance that specific facts or conditions are true
claims,
or will happen. A warranty may be either express or implied and is
2. it drops down and picks up where the underlying policy legally binding.294 Warranties, among other things, may protect a
leaves off when the aggregate limit of the underly-
buyer against poor workmanship, intellectual property violations of
ing policy in question is exhausted by the payment of
claims, and third parties, malfunctioning products and debts. Warranties become
effective once the buyer has accepted the product or service and
3. it provides protection against some claims not covered
generally require the vendor to either repair or replace a product, or
by the underlying policies, subject to the assumption by
the named insured of a self-insured retention. re-perform a service, for no cost during the warranty period.

• Automobile – A policy that protects the insured against Unless excluded or modified by the language in the contract, war-
financial loss because of legal liability for automobile-related ranties or standards may be implied or imposed into a contract by a
injuries to others or damage to their property by an auto- statute or case law. For example, in the sale or lease of some types
mobile. Automobile coverage may include liability coverage of personal property or goods there may be statutory warranties
of bodily injury, property damage, medical payments, and implied into a contract, such as: a warranty of title,295 a warranty
physical damage. that the goods shall be merchantable,296 or a warranty that goods
Depending on the procurement, the agency may require that are fit for a particular purpose.297 Agency legal counsel should be
the contractor provide specialized insurance policies such as the consulted before drafting or negotiating warranty provisions.
following:
Extended Warranty; Maintenance Agreement
• Cyber liability An extended warranty, sometimes referred to as maintenance
• Medical malpractice agreement or service contract, is a repair and replacement service
• Builder’s risk offering that is available to the buyer by a manufacturer or dealer
for an additional cost. It is typically available for products such as
• Business interruption
machinery, appliances, and electronics. Care should be taken
If guidance is needed on selecting the appropriate level of insur- in reviewing an extended warranty as the terms may differ from
ance, consult with agency legal counsel or the State Office of Risk the warranty provided by the manufacturer for the new item. For
Management (SORM).291 example, the coverage may not extend to specified parts or damage
caused by certain events.
Surety Bonds
The three most common forms of surety bonds used in the procure-
ment process are bid bonds (deposits), performance bonds, and
payment bonds. The solicitation must provide notice if a bond is
required and what forms are acceptable (e.g., irrevocable letter of 294
Generally, a warranty describes then “character, quality or title” of that which
credit or cashier’s check). SPD discourages the use of performance is being sold and “by which seller promises or undertakes to ensure that certain
facts are or shall be as he then represents them.” Black’s Law Dictionary 1586
bonds unless there is a compelling need or statutory requirement.292 (6th ed. 1990). An express warranty is a definitive affirmation of fact or promise
The use of a bond should be carefully considered as a bond require- which becomes part of the basis for the bargain and upon which the parties rely.
ment may restrict competition, delay the award and raise the cost of See Morris v. Adolph Coors Co., 735 S.W.2d 578, 587 (Tex. App.-Fort Worth
1987, writ ref’d n.r.e.). Implied warranties are based in tort law and are judicially
the contract as the cost of the bond is typically passed to the agency interjected into agreements whenever necessitated by public policy to ensure that
by the vendor. 293 Questions regarding bonding requirements should parties receive that for which they bargained. See Melody Home Mfg. Co. v. Barnes,
741 S.W.2d 349, 353 (Tex. 1987); see also Parkway Co. v. Woodruff, 901 S.W.2d 434,
be directed to agency legal counsel. 438 (Tex. 1995). A contract term identifies what is being sold; warranties described
the attributes, suitability for a particular purpose and ownership of what is sold.
Cf. Donnelley Mktg. v. Lionel Sosa, Inc. 716 S.W.2d 598, 604 (Tex. App. – Corpus
Christi 1986, no writ) (court held supplier’s provision of wrong mailing list to
advertiser was tantamount to no delivery at all and amounted to breach of
291
The SORM website is located at www.sorm.state.tx.us. contract). See Chilton Insurance Company v. Pate & Pate Enterprises, Inc. 930
292
TEX. GOV’T CODE §§ 2156.004, 2156.011. S.W.2d 877 (Tex. App.-San Antonio 1996, rehearing overruled).
293
See General Appropriations Act, House Bill 1, 86th R.S. at Article IX, Section 295
TEX. BUS & COM. CODE § 2.312.
17.10(b)(9) (directing agencies to ensure dollar values of performance bonds are 296
TEX. BUS. & COM. CODE §§ 2.314, 2A.212.
consistent with risk of nonperformance). 297
TEX. BUS. & COM. CODE §§ 2.315, 2A.213.

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Statewide Procurement Division

Limitations of Liability Clauses Remedies

Limitations of liability (LOL) clauses are used to limit potential Remedies provide protection to an agency if there is a contract
breach-of-contract damages. Under common law, parties are only breach. The agency will invest a significant amount of time and
liable for damages that are reasonably foreseeable at the time of resources to develop and award a contract, so each key deliver-
contracting.298 Often, an LOL clause is a simple restatement of the able within the contract should have a corresponding remedy for
common law principle that neither party would be liable for unfore- contractor non-performance. Although contract termination is an
seeable losses suffered by the other. More robust LOL clauses can effective remedy, it may not be an appropriate remedy for every
go further, to limit even foreseeable losses, either losses arising out contract breach. For example, an agency may determine that the
of certain kinds of claims, such as infringement or disclosure of con- most suitable remedy for late delivery is to impose liquidated dam-
fidential information, or putting a dollar cap on the total losses for ages that require the contractor to compensate the agency for the
which the party can be liable. contract breach by paying a pre-determined amount for each hour/
day/week beyond the scheduled due date.
LOL clauses are used to alter the extent of liability otherwise recover-
able at common law. Such clauses generally establish the maximum Examples of remedies are as follows:
liability or exposure of one party for damages that may be recovered
against a contracting party if there is a valid claim. In the absence of • Liquidated Damages entitle the agency to demand a set mon-
etary amount determined to be a fair and equitable repayment
controlling public policy, Texas courts, which have a long history of
to the agency for loss of service due to contractor’s failure to
supporting freedom of contract, consistently recognize that parties meet contract requirements. Liquidated damages are useful
to a contract should be permitted to draft legally enforceable agree- when compensatory (or “actual”) damages are difficult to cal-
ments with minimal judicial intervention299 and that LOL clauses are culate. The terms of the liquidated damages must be clearly
generally not considered to violate public policy.300 LOL provisions specified, identifying a deliverable, monetary amount, duration
are generally enforceable in Texas if they meet a conspicuousness and any other necessary information.
requirement301 and there is nothing otherwise unconscionable about Including liquidated damages in the solicitation will focus the
the contract.302 The Texas Business and Commerce Code expressly vendor’s attention on the deliverables that have been identi-
provides that an agreement for the sale of goods may limit or alter fied as most important to the agency. Care should be taken to
the measure of damages recoverable, provide exclusive remedies ensure that liquidated damages are associated with the cor-
for breaches, and, absent unconscionability, limit or exclude the rect deliverable. For example, consider a contract for a 24/7 call
center where it is imperative that calls are answered in a timely
recovery of consequential damages .303
manner. The solicitation only includes a liquidated damages
provision tied to the due dates for the contractor’s submission
298
Hadley v. Baxendale, 156 Eng. Rep. 145 (Exch. Ct. 1854).
of quarterly reports detailing average time calls are in queue
299
Barbara J. Slotnick, 10-A Tex. Jur. 204, CONTRACTS, § 103 (Texas law permits and average call abandonment rate, but not metrics for the
the utmost freedom of contract between parties of full age and competent timeliness of the call center responses, which is the agency’s
understanding and requires that their contracts, when freely and voluntarily primary concern. A more appropriate remedy would be for liq-
entered into, shall be held sacred and enforced by the courts). See also TEX. BUS.
& COM. CODE § 2.303.
uidated damages to accrue for a specified percentage of calls
300
See e.g., Martin v. Lou Poliquin Ents., Inc., 696 S.W.2d 180, 186 (Tex. App.— not answered within a set time frame.
Houston [14th Dist.] 1985, writ ref’d n.r.e.) (a LOL “may waive a party’s right to
recover under the common law theory of breach of contract”). When determining
Public procurement professionals are advised to seek assis-
whether a limitations of liability provision violates public policy, courts will tance from their agency legal counsel when developing liq-
generally consider whether there was a disparity in bargaining power between the uidated damages provisions. Courts will enforce a liquidated
parties. Fox Elec. Co. v. Tone Guard Security, 861 S.W.2d 79, 82-83 (Tex. App. – Ft. damage provision only if it is not a penalty, meaning the clause
Worth 1993, no writ) (upholding the LOL clause stating “liability shall be limited to a
attempts to estimate actual damages rather than penalize a
sum of [$250]; and … the provisions of this section shall apply if loss or damage …
results from … negligence, active or otherwise…”). Some courts have also applied breaching party by awarding damages far greater than those
an unconscionability analysis. Head v. U.S. Inspect DFW, Inc., 159 S.W.3d 731, 748- actually suffered.304
749 (Tex. App.—Fort Worth 2005, no pet.). However, a party cannot insulate itself
from tort or contractual liability for its own deliberate wrongful conduct because
that is against public policy. Zachry Constr. Corp. v. Port of Houston Auth. of Harris
Cty., 449 S.W.3d 98, 116 (Tex. 2014).
301
TEX. BUS. & COM. CODE § 1.201(b)(10). TEX. BUS. & COM. CODE § 2.718 (providing that liquidated damages clause will be
304

302
See Mickens v. Longhorn DFW Moving, Inc., 264 S.W.3d 875 (Tex. App. 2008). Note enforced only at an amount which is reasonable in light of the anticipated or actual
that certain professionals such as physicians and attorneys cannot completely limit harm caused by the breach, the difficulties of proof of loss, and the inconvenience
liability. or non-feasibility of otherwise obtaining an adequate remedy. A term fixing
303
TEX. BUS. & COM. CODE § 2.719. unreasonably large liquidated damages is void as a penalty).

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• Compensatory Damages are the monetary amount neces- • Restitution Damages are the value to the defendant of
sary to compensate the injured party for the loss. Examples of the plaintiff’s performance and are utilized to prevent unjust
compensatory damages include the following: enrichment. Restitution damages may be awarded if the inno-
cent party incurred a loss that benefited the other party. The
• Expectation damages are intended to cover what the
injured party expected to receive from the contract, also recovery is based on the market value rendered to the defen-
called the “benefit of the bargain.” This is the typical mea- dant and are not limited by the contract price
sure of damages in contract. Expectation damages are equal • Equitable Remedies such as injunctions, declaratory relief and
to the value of the defendant’s promised performance, gen- specific performance can be exercised even when they are not
erally the contract price, minus any benefit received from specified in the contract. Types of Equitable Remedies include:
not having to complete the defendant’s own performance.
• Injunctions are utilized when the agency needs the con-
In the case of defective performance by vendor, the buyer tractor to stop doing something or continue working. The
can recover the cost of remedying or completing the per- court may issue injunctive relief to require the contractor to
formance. However, diminution of value will be awarded continue working, or to stop until the case is resolved. For
where the cost of completion is clearly disproportionate to example, in the case of a contractor burning tires in viola-
the value of the performance to avoid economic waste. tion of EPA regulations rather than recycling them in accor-
• Reliance damages cover the loss that the non-breaching dance with the contract, the court would issue an injunction
party incurred in reliance on performance of the contract requiring the contractor to stop burning the tires until the
and are designed to put the injured party back where they issue with the EPA was resolved.
were before they entered into the contract. Reliance dam-
• Specific performance is a remedy in which the promisor is
ages are usually used when expectation damages cannot ordered to render the promised performance. There is a gen-
be accurately calculated, including without limitation when eral hostility and reluctance to award specific performance
profits are too speculative or where no contract exists, but due to a number of factors, including without limitation the
some relief is justifiable. concern that specific performance may overcompensate the
• Consequential damages, also called “special damages,” injured party.
are intended to cover any loss incurred by a breach that
is not directly related to the contract, but arose naturally, Limits on Equitable Remedies include:
was reasonably foreseeable or had been specially commu-
nicated and should have been included in the scope of what • Inadequate Damages. Damages must be inadequate to
protect the injured party for an equitable remedy to be
would be reasonably be expected to arise.305
awarded. This usually occurs if the damages cannot be cal-
A contractor can monetarily compensate the agency while con- culated with sufficient certainty or if money cannot substi-
tute for the performance.
tinuing to fulfill the contract; examples of such compensatory
damages include: • Definiteness. The contract terms must be definite enough
to allow a court order to be framed.
• Discounts on products and services within the scope of the
• Difficulty of Enforcement. Courts must be able to enforce
contract can be provided to the agency when certain per-
and supervise the court order.
formance measures are not met.
• Credits can be provided to the agency when performance • Punitive Damages are a rare type of damage and used
measures are not met. Credits can be applied as a dollar in breach of contract cases when the sole point is to punish
amount deducted from the contractor’s subsequent invoice, the wrongdoer. These damages are typically discouraged in
or additional products or services within the scope of the breach of contract cases.
contract. • Nominal Damages are utilized when the injured party has not
• Refunds or reimbursement of previous payments by the suffered a financial loss but the injured party wants to show
agency. they were in the right.

• Waiver of fees the agency was due to pay for products and
services that are either within scope of the contract or for
substitute products and services.

305
Hadley v. Baxendale, 156 Eng. Rep. 145 (Exch. Ct. 1854).

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If an agency is not able to resolve the contractual dispute with the Execution of Bid/Offer/Proposal
contractor, the agency’s legal counsel must contact the Office of the
An execution of bid/offer/proposal document must be included in
Attorney General (OAG) for assistance if the agency wants to pursue
the solicitation as it holds the respondent accountable for perform-
legal action for breach of contract. The most common recovery in
ing any duties submitted in the response. Although it is not required
a breach of contract case is compensatory damages that are the
to be part of the execution of bid/offer/proposal, it is common for
“actual damages” designed to cover the loss of the agency as a
agencies to include the list of statutory preferences.
result of the breach. The amount awarded is intended to “make the
injured party — the agency — whole again,” and it is not meant to HUB Subcontracting Plan Requirements
give the injured party a windfall.
Agencies are required to make a good faith effort to assist Histori-
RESPONSE SUBMISSION REQUIREMENTS cally Underutilized Businesses (HUBs) to receive a portion of the
total contract value that the agency expects to award in a fiscal year
Response Content, Format, and Delivery in accordance with the following statewide goals:
Instructions
The solicitation must clearly indicate the submission requirements • 11.2 percent for heavy construction other than building con-
tracts;
such as the response content, format, and delivery instructions that
include the following: • 21.1 percent for all building construction, including general con-
tractors and operative builders’ contracts;
• the due date and time, • 32.9 percent for all special trade construction contracts;
• delivery address, • 23.7 percent for professional services contracts;
• acceptable delivery method (e.g., email, fax, USPS), • 26.0 percent for all other services contracts; and
• container labeling (e.g., name and address of respondent,
• 21.1 percent for commodities contracts.306
solicitation number),
• required number copies of the response, and These goals can be achieved through contracting directly with HUBs
• format of response (e.g., electronic file type, bound, tabbed, or indirectly through subcontracting.
paginated, size of paper, page number limitations).
For any procurement with an estimated contract value of $100,000
If the solicitation requires the vendors to utilize agency-specific or more, including all renewals and amendments, the agency must
templates in their responses, the templates must be appropriately determine whether subcontracting opportunities are probable under
referenced and, as applicable, attached as exhibits or appendices the contract.307 Subcontracting opportunities can be realized through
to the solicitation. All costs associated with the preparation of the expenditures on materials, supplies, equipment and services. If sub-
response must be borne by the respondent. contracting opportunities are probable, the agency must state this
determination in the solicitation and require a HUB Subcontracting
If electronic submission of responses is permitted, the solicitation Plan (HSP) to be submitted with the response. If an HSP is required
should contain instructions that state how the agency will treat an by the solicitation, the completed HSP must be submitted by the
email or fax submission that is not timely received. For example, response due date and time in order for the response to be consid-
the agency may state that if all or any portion of a response submit- ered responsive. A response containing an incomplete or missing
ted by email or fax is received late, is illegible, or is otherwise non- HSP must be disqualified. Once accepted by the agency, the HSP
responsive due to equipment failure or operator error, the response will become a part of the contract. Vendors must amend their HSPs if
or the applicable portion of the response will not be considered. there is any change in their planned subcontracting during the perfor-
In addition, the agency must not be liable for equipment failure mance of the contract.
or operator error. If email submission of responses is permitted, it
is best practice for the agency to establish a generic email box to Agencies are not permitted to make HUB subcontracting or HUB
receive responses; this provides consistency for respondents and certification status of a vendor a scoring criteria that is assigned
minimizes the impacts from employee turnover. weight in the agency solicitation.

34 TEX. ADMIN. CODE § 20.284(b).

306

TEX. GOV’T CODE § 2161.252.

307

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EVALUATION CRITERIA FOR AWARD

The primary objective for every acquisition is to obtain best value for the State. To ensure fairness in the agency’s evaluation of the responses,
the solicitation must notify the potential respondents of the basis for contract award. The solicitation must identify the evaluation crite-
ria and the relative weight assigned to each criterion. If the evaluation criteria and associated weights are not thoughtfully designed, then the
procurement will fail because the basis of the award will not correctly identify the response that offers best value to the State.

The evaluation criteria must reflect the essential qualities or performance requirements necessary to achieve the objectives of the contract.
The weight assigned to each evaluation criterion must correlate to its importance. The Contract Developer must ensure not only that the
evaluation criteria and the associated weights are clearly stated, but also that information submitted in the response directly relates to the
criteria. The Contract Developer should be careful to ensure that the respondents and the evaluation committee have no opportunity to be
confused about which portion of the response applies to each criterion.

Evaluation Criteria Solicitation Requirement Submission Requirement

Copy of current license or certificate

Respondent Qualifications Specified professional license or certification.
applicable to specified profession or trade.

Detailed information regarding project

size, dollar amount and scope of project for
Specified number of projects of similar size
Respondent Experience each individual project and any additional
and scope.
information necessary to evaluate vendor
experience.

Copy of latest financial statements, including

Financially capable of handling a project of
Financial Capability balance sheets, Dunn and Bradstreet report,
this size and scope.
etc.

Purchase price and evidence that the goods or services meet specifications are the most important considerations when goods and services
are procured through competitive bidding.308 As a matter of practice, SPD encourages the use of other evaluation factors in addition to price
and meeting specifications. It is common for there to be at least three evaluation criteria which broadly address the following:

1. the respondent’s proposed scope of work;

2. the respondent’s past performance and experience; and
3. the respondent’s proposed price.

Examples of additional and more detailed evaluation criteria may be found in the best value standards found in statute.309

It is best practice for agencies to include a general description of the evaluation process in the solicitation. The agency should also finalize,
prior to solicitation issuance, the evaluation scoring matrix, including any objective criteria, and the composition of the evaluation committee.

The scoring method used to assess the price criterion should be carefully considered. Typically, the price criterion is evaluated based on either
“reasonableness” or objective criteria. A reasonableness assessment of a proposed price considers various factors such as the appropriateness
of the cost metric chosen by the respondent and the impact of any identified assumptions or constraints on the proposed price. In contrast, an
assessment of proposed price based on objective criteria relies on a mathematical formula, rather than independent judgement, to calculate
the score.

308
TEX. GOV’T CODE § 2155.074(b).
309
Best value standards include, but are not limited to, the following: Sections 2155.074, 2156.007, 2157.003, 2254.003, and 2254.027 of the Texas Government Code.

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Statewide Procurement Division

The scoring method used for the price criterion should be reviewed Solicitation – Reviews and Approvals
for each solicitation to ensure it is appropriate for the products
and services to be procured. For instance, objective criteria are CAT – Review of Solicitations With a Value
not suitable for consulting services procurements because state of $5 Million or More
law requires that price is evaluated on the reasonableness of the Prior to posting to the ESBD or publishing in the Texas Register, an
proposed fee for the services.310 Exclusive reliance on objective agency311 must submit solicitation documents for contracts that have
criteria for pricing may also not be suitable for highly complex a value of $5 million or greater to the Contract Advisory Team (CAT)
procurements. for review regardless of procurement method.312 For CAT submis-
sions, the contract value means the estimated dollar amount that an
There are several mathematical formulas that may be considered for
agency may be obligated to pay over the life of the contract includ-
the evaluation process and the Contract Developer must ensure that
ing all executed and proposed amendments, extensions and renew-
any formula used is appropriate for the procurement. A commonly
als.313 Agencies should not artificially split the procurement to avoid
used formula for simple purchases is as follows:
the $5 million threshold for CAT review.
Price Score = (Lowest Price / Price of Response Being Evaluated)
x Maximum No. of Available Points Solicitation documents include the solicitation (e.g., IFB, RFP, RFO,
RFA) as well as any other documents that supplement the solicita-
There are several schools of thought about how much information tion (e.g., Proprietary Purchase Justification) or are incorporated by
is to be provided to the respondents regarding the evaluation crite- reference. The solicitation documents and a completed form are
ria. At a minimum, the solicitation must identify the criteria and their submitted to CAT through the Procurement Oversight & Delega-
corresponding weight. Some agencies prefer to provide detailed tion portal maintained by SPD and located on the CPA website.314
information in the solicitation as to how each base criterion is bro- Requests for assistance relating to the Procurement Oversight &
ken down into smaller units or subcriteria or they include a copy of Delegation web application may be submitted to spd.oversight@
the evaluation scoring sheets as an attachment to the solicitation. cpa.texas.gov.
Either approach is acceptable. Sample evaluation criteria and scor-
ing strategies are located in Appendix 12. As a general guideline, grant agreements where the recipients eligi-
ble for award are governmental entities or non-profit business enti-
Failure to adhere to the published evaluation criteria during the evalu- ties are not subject to a CAT review. CAT will review grants when the
ation process may result in a protest. Evaluation criteria that were recipients eligible for award are for-profit business entities because
not included in the solicitation may not be used to rank or select these contracts provide public funds to entities that could profit from
responses. For example, if respondents are to receive additional the award. RFAs based solely on federal funding are not subject to
points for possessing a national accreditation, this criterion must be CAT review.
stated in the solicitation so that all the respondents are notified there
is an opportunity to achieve a higher score by submitting the appropri- When Procurement Oversight & Delegation receives the solicitation
ate documentation in its response. Likewise, if the national accredi- documents, the agency will receive an acknowledgement e-mail
tation information was not requested in the solicitation, respondents that provides a web link to monitor status. Requests for CAT reviews
who fail to demonstrate this accreditation cannot be penalized. will be processed in the order received. CAT reviews may take up

311
The term “state agency” means a department, board, commission, or other entity
of state government, other than a university system or an institution of higher
education as defined by Section 61.003 of the Education Code, that (1) has
authority that is not limited to a geographical portion of the state; (2) was created
by the constitution or a state statute with an ongoing mission and responsibilities;
(3) is not the office of the governor or lieutenant governor; (4) is not within the
judicial or legislative branch of government; and (5) is not a committee created
under state law whose primary function is to advise an agency. TEX. GOV’T CODE
§ 2056.001(a). Chapter 2262 of the Texas Government Code does not apply to (1)
an institution of higher education as defined by Section 61.003 of the Education
Code or (2) contracts of the Texas Department of Transportation that either relate
to highway construction or highway engineering or are subject to Section 201.112
of the Transportation Code. TEX. GOV’T CODE § 2262.002.
312
TEX. GOV’T CODE § 2262.101(a)(1).
313
34 TEX. ADMIN. CODE § 20.25(b)(13).
TEX. GOV’T CODE § 2254.027.
310 314
The CPA website is located at Comptroller.Texas.Gov.

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 Statewide Procurement Division

to 30 days to complete. Requests for expedited CAT reviews must • involves more than one state agency; or
be sent to spd.oversight@cpa.texas.gov. Even if the review period • substantially alters the work methods of state agency per-
exceeds 30 days, the agency does not have the authority to issue the sonnel or the delivery of services to clients.315
solicitation until it receives a letter from CAT. Publishing a solicitation
without receiving a letter from CAT may result in an audit finding. An agency is required to notify QAT when it advertises any solicitation
of a major information resources project regardless of the solicitation
CAT’s review period begins when it receives all information needed method (e.g., RFP, IFB, RFO).316 This notification is required to include
to conduct its review. It is recommended that agencies submit their the requisition number for each solicitation advertised.
solicitation documents after internal agency approvals have been
obtained. In addition, CAT recommends that agencies incorporate Before issuing a solicitation for a major information resources
a 30-day period for CAT review into the procurement schedule to project with a contract value of at least $10 million, the agency must
avoid potential delays to the agency’s solicitation, evaluation, and develop, consistent with any Acquisition Plan provided in the Guide,
award process. a procurement plan with anticipated service levels and performance
standards for each contractor and a method to monitor changes to
Prior to posting or publishing the solicitation following CAT review, the scope of each contract.317 Samples of an Acquisition Plan and
an agency is required to either Quality Assessment Plan (QAP) Tools are located in Appendix 6 and
Appendix 24, respectively. Information regarding the steps involved
• comply with CAT recommendation(s); or
in initiating, monitoring, completing, and submitting reports and
• submit to CAT a written explanation regarding why the recom- other deliverables to the QAT for a major information resources
mendation is not applicable to the procurement under review. project is available on the Project Delivery Framework page located
The agency’s responses to the CAT recommendation must be kept on the DIR website318 and in the QAT Assurance Team Policy and
within the procurement file. Procedures Manual located on the QAT website.319

Substantial Changes to CAT Submission. If the initial solicitation QAT and LBB – Review of Non-Cloud
documents submitted for CAT review change substantially, the Computing Service Option
agency is required to resubmit the solicitation documents for An agency must ensure when making purchases for an AIS or a major
additional CAT review. Changes to the solicitation documents for a
information resources project, that the system or project is capable
major contract are considered substantial when
of being deployed and run on cloud computing services.320 When
• the solicitation change caused the estimated value for the making a purchase for an AIS or a major information resources proj-
original term of the contract, not including renewal periods, to ect, the agency may determine that, due to integration limitations
increase by 25 percent or more; or with legacy systems, security risks, or costs, the agency is unable
• there are significant revisions, deletions and/or additions to the to purchase a system or project capable of being deployed and run
specifications, scope of work, set(s) of deliverables, perfor- on cloud computing services.321 If an agency determines that it is
mance measures, payment methodology, or other elements unable to purchase a system or project capable of being deployed
of the solicitation. and run on cloud computing services, then at least 14 days prior
to solicitation issuance, the agency must submit to the LBB for the
QAT – Review of Major Information purchase of an AIS or to the QAT for the purchase of a major informa-
Resources Projects tion resources project a report that describes the purchase and the
Procurements, regardless of the procurement method chosen by the agency's reasoning for making the purchase.322
agency, associated with a major information resources project are 315
TEX. GOV’T CODE § 2054.003(10).
subject to QAT oversight. A “major information resources project” is 316
General Appropriations Act, House Bill 1, 86th R.S. at Article IX, Section 9.02(c)(2).
any information resources technology project which is: 317
TEX. GOV’T CODE §2054.305.
318
The DIR website is located at www.dir.texas.gov. The Statewide Project Automated
Reporting (SPAR) system is the official system of record for QAT projects.
• specifically designated as such by the Legislature in the Gen- 319
The QAT website is located at www.qat.dir.texas.gov.
eral Appropriations Act; or 320
TEX. GOV’T CODE § 2157.007(b). The term "cloud computing service" has the
• identified in an agency‘s biennial operating plan whose devel- meaning assigned by Special Publication 800-145 issued by the United States
Department of Commerce National Institute of Standards and Technology, as the
opment costs exceed $5 million and that definition existed on January 1, 2015. TEX. GOV’T CODE § 2157.007(a).
• requires one or more years to reach operation status; TEX. GOV’T CODE § 2157.007(b-1).
321

322
TEX. GOV’T CODE § 2157.007(b-2).

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Solicitation – Advertisement
Electronic State Business Daily (ESBD)
The Electronic State Business Daily (ESBD), managed by SPD, is the State’s online directory listing procurement opportunities. Agencies are
required to post procurements with a contract value of more than $25,000 to the ESBD, regardless of the source of funds to be used for the
contract.323

The contract value for posting to the ESBD means “the estimated dollar amount that an agency may be obligated to pay during the life of the
contract and all executed and proposed amendments, extensions and renewals.”324 Vendors may browse agency procurement opportunities
and find recent awards by searching for solicitations using various criteria including agency name, NIGP Class/Item code, posting date, and
solicitation closing date.

ESBD Posting Timelines1

Minimum Posting Time
Contract value estimated to be greater than $25,000
for Advertisement
Entire solicitation package (including all parts, exhibits and attachments posted 14 calendar days
to the ESBD.

If not posting the entire solicitation package to the ESBD, then notice must be 21 calendar days
posted that includes all information necessary to make a successful bid, proposal,
or other applicable expression of interest for the procurement contract, including
at a minimum the following information:
(1) a brief description of the goods or services to be procured and any applicable
state product or service codes for the goods and services;
(2) the last date on which bids, proposals, or other applicable expressions of
interest will be accepted;
(3) the estimated quantity of goods or services to be procured;
(4) if applicable, the previous price paid by the agency for the same or similar
goods or services;
(5) the estimated date on which the goods or services to be procured will be
needed; and
(6) the name, business mailing address, and business telephone number of
the agency employee a person may contact to inquire about all necessary
information related to making a bid or proposal or other applicable
expression of interest for the procurement contract.

TABLE NOTES
1
TEX. GOV’T CODE § 2155.083(h)-(i); 34 TEX. ADMIN. CODE § 20.215.

While a 14-day posting may satisfy the statutory minimum period for posting on the ESBD, it is best practice to advertise a solicitation for 30
days or longer. When determining the appropriate solicitation posting period, the Contract Developer should consider what timeframe affords
interested eligible vendors the opportunity to submit quality proposals. Publishing solicitations for time periods that are not commercially
reasonable may have the effect of artificially limiting the vendor pool.

It is best practice for Contract Developers to schedule realistic procurement timelines that take into account holidays, the complexity of the
procurement, and the fulfillment of any statutory requirements. For example, Contract Developers should consider advertising the solici-
tation where subcontracting opportunities are probable for longer than the statutorily mandated minimum ESBD posting period to allow
323
TEX. GOV’T CODE § 2155.083(a); 34 TEX. ADMIN. CODE §§ 20.109, 20.214. There are certain exceptions to this requirement for institutions of higher education, the University
of Houston, and certain agreements between state agencies, local governments and other governmental entities. TEX. GOV’T CODE § 2155.083(n); 34 TEX. ADMIN. CODE §
20.109(d).
324
34 TEX. ADMIN. CODE § 20.25(b)(13).

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 Statewide Procurement Division

sufficient time for all interested eligible vendors to comply with the Agencies must use the CMBL to select bidders for competitive
HUB Subcontracting Plan requirements. One of the Good Faith Effort bids or proposals and to the fullest extent possible for purchases
requirements is for the respondent to allow at least seven working exempt from SPD’s purchasing authority.329 For purchases between
days for HUBs to respond. Weekends, holidays, agency closures, $5,000 and $25,000, the agency must solicit from a minimum of
and the date the respondent routed the solicitation to the HUBs are three active vendors on the CMBL including two current Texas-
excluded from the seven working day computation. certified HUBs. For procurements exceeding $25,000, an agency
must use the CMBL to solicit from each eligible vendor on the list
For solicitations requiring delegated authority, a letter of delegation that serves the agency’s geographic region.330 A copy of the bid list
must be obtained from SPD prior to posting to the ESBD. The Con- (with date) must be placed in the procurement file.
tract Developer must include proof of the ESBD posting and docu-
mentation from SPD authorizing the delegated purchasing authority If agencies are required to use the CMBL, they must send a copy of
in the procurement file. A contract award is void if an agency vio- the solicitation to all vendors on the CMBL bid list for the advertised
lates the applicable statutorily required minimum time for posting commodity code(s). There may be several hundred vendors associ-
on the ESBD.325 ated with a particular commodity code. Accordingly, announcements
are an efficient way to reduce mailing costs when publishing large
Computation of Time. In computing the period of days, the first solicitations. A solicitation announcement is a one-page document
day is excluded and the last day is included. In addition, if the last sent, usually by email, to all vendors on the CMBL for the adver-
day of any period is a Saturday, Sunday, or legal holiday, the period tised commodity code(s) which provides notice of the upcoming
must be extended to include the next day that is not a Saturday, procurement opportunity and ESBD posting information. The vendor
Sunday or legal holiday.326 is requested to return a completed form to the agency via email or
fax if the vendor desires to receive a hard copy of the solicitation. A
Texas Register sample solicitation announcement is located in Appendix 13. When
The Texas Register, maintained by the Secretary of State (SOS), the solicitation is mailed by the agency, it is only mailed to the ven-
records agency rulemakings, governor’s appointments, attorney dors who responded to the announcement with a request for a hard
general opinions, and requests for proposals. The Texas Register copy of the solicitation.
is published every Friday and is available to the public online on As part of the registration process, vendors provide their contact
the SOS website.327 Solicitations using certain procurement methods information and identify the goods and services they offer by NIGP
must be advertised in the Texas Register.328 For procurement meth- Class/Item codes. The annual registration fee for the CMBL is cur-
ods not addressed in this Guide, it is recommended that agencies rently $70. For more information regarding CMBL registration, visit
refer to their enabling legislation to determine if publication in the the CMBL Program located on the CPA website.331 A vendor is not
Texas Register is required. A copy of the Texas Register notice must required to be registered on the CMBL to conduct business with the
be placed in the procurement file. Texas Register posting require- state agencies.
ments are in addition to ESBD posting requirements.
Supplementing the CMBL. An agency may supplement the
Centralized Master Bidders List CMBL with State of Texas certified HUBs at any time if the agency
determines that it may enhance competition or increase the number
The Centralized Master Bidders List (CMBL), maintained by SPD, is
of HUBs that submit bids. In addition, an agency may solicit from
an online directory of vendors registered to receive bidding oppor-
vendors that are not on the CMBL by obtaining approval from its
tunities from State of Texas purchasing entities. Agencies, colleges,
agency head or designee to add non-CMBL vendors to the final
universities and local governments use the CMBL to find vendors for
bid list to increase competition.332 The non-CMBL vendors may be
products and services. The CMBL may also be used to gather infor-
added to the final bid list for specific solicitations to increase com-
mation for noncompetitive procurement processes and for vendor
petition where the requirement to solicit only CMBL vendors is not
performance data. SPD does not endorse, recommend, or attest to
the capabilities of any business or individual listed on the CMBL. 329
This requirement does not apply to the Texas Department of Transportation or to an
institution of higher education as defined by Section 61.003 of the Education Code,
but an institution of higher education should use the CMBL when possible. 34 TEX.
325
TEX. GOV’T CODE § 2155.083(j); 34 TEX. ADMIN. CODE § 20.215(e). ADMIN. CODE § 20.107(g).
326
TEX. GOV’T CODE § 311.014(a)-(b). 330
TEX. GOV’T CODE § 2155.264.
327
The SOS website is located at www.sos.state.tx.us. 331
The CPA website is located at Comptroller.Texas.Gov.
328
See e.g., TEX. GOV’T CODE § 2166.253. 332
TEX. GOV’T CODE § 2155.269; 34 TEX. ADMIN. CODE §20.107(h).

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Statewide Procurement Division

adequate.333 Documentation regarding the additions to the CMBL the agency determines that disqualification is appropriate for any
bid list, including the written approval from the agency head or des- response from a vendor that did not receive certain information per-
ignee of the supplemented CMBL bid list, must be maintained in the taining to the solicitation at an agency-designated time and location.
procurement file.
If a pre-bid/offer/proposal conference is held, the solicitation must
Removal from the CMBL. A vendor may be removed or indicate the date, time, and location of the conference and whether
temporarily suspended from the CMBL for one or more of the respondents’ attendance is mandatory or voluntary. If the confer-
following reasons: ence is mandatory, the following statement must be included in the
solicitation: “Failure to attend the pre-bid/offer/proposal conference
• failure to pay or unnecessarily delaying payment of damages
will result in disqualification of the response.”
assessed by SPD;
• failure to remit the annual CMBL registration fee; or A pre-bid/offer/proposal conference is usually held no earlier than
• any factor set forth in Sections 2155.070 or 2155.077 of the 10 days after the solicitation issuance to allow sufficient time for
Texas Government Code. respondents to receive and review the solicitation prior to the con-
ference. If a mandatory conference is required, the Contract Devel-
Solicitation – Agency Communications With oper should consider multiple conference dates if it is expected that
Potential Respondents there will be a high number of conference attendees. All confer-
ences attendees must be documented on a sign-in sheet which is
Pre-Bid/Offer/Proposal Conferences the official record used by the agency to verify respondent atten-
An agency may choose to hold a pre-bid/offer/proposal confer- dance. For mandatory conferences, the sign-in sheet will be col-
ence. A pre-bid/offer/proposal conference occurs after solicitation lected at the beginning of the conference.
issuance and before the solicitation closing deadline. A conference
The Contract Developer should conduct the conference in coordi-
provides a forum for potential respondents to pose questions about
nation with the program staff. Pre-Bid/Offer/Proposal Conference
the solicitation in a face-to-face setting or by conference call or web
Guidelines are located in Appendix 14. Conference attendees should
conference. It also provides an opportunity for vendors to develop
be advised that the verbal responses provided by the agency dur-
subcontracting relationships and lets the agency gauge industry
ing the conference are not binding until confirmed by the agency
interest in the procurement.
in writing. All changes to the solicitation must be in writing and
Agencies may conduct pre-bid/offer/proposal conferences that are published through an addendum to the solicitation. ESBD posting
mandatory or non-mandatory for prospective respondents. Agen- requirements apply.
cies should carefully consider the use of a mandatory conference
and confer with legal counsel as this may limit competition. Depend- Question and Answer Period
ing on the location of vendor candidates, out-of-town or out-of-state It is best practice for all solicitations to include a formal process for
vendors may be discouraged from participating in the procurement potential respondents to submit questions to the agency to clarify
because of the travel time and expense associated with the confer- their understanding of the solicitation. If questions are permitted by
ence. Alternatively, eligible vendors that wish to participate in the the agency, the solicitation must specify the due date when ques-
procurement may be administratively eliminated from the vendor tions must be submitted to the agency as well as the anticipated
pool simply because their companies’ representatives arrived late release date of the agency’s answers.
or were otherwise unable to attend. In either event, the agency’s
goal of encouraging competition among all eligible candidates in The benefit of a Question and Answer (Q&A) period is that it provides
the vendor pool is thwarted. the first indication to an agency of possible ambiguities, errors, or
lack of critical information in the solicitation. If there are major defi-
Conferences should be mandatory only if an on-site visit is required ciencies to the solicitation discovered at this stage, it is advisable to
to have a full understanding of the procurement or if the solicitation is cancel the solicitation and issue a revised solicitation at a future date.
so complex that agency staff believes attendance is critical for poten-
tial respondents to fully understand the procurement. Accordingly,
mandatory pre-bid/offer/proposal conferences are required when

TEX. GOV’T CODE § 2155.269; 34 TEX. ADMIN. CODE §20.107(h).

333

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Written questions submitted to the agency as directed in the solicita- Each addendum is numbered. If more than one addendum is issued,
tion must be compiled, verbatim (with any spelling and grammatical each subsequent addendum is sequentially numbered. Each adden-
errors) into a Q&A document. Every question received, even simi- dum to the original solicitation must be posted to the ESBD no later
lar questions submitted by different vendors, must be accounted than the next business day following its release to the public.334 A
for in the Q&A document. The name of the entity submitting the sample solicitation addendum is located in Appendix 16.
question and identifying information should be omitted from the
agency’s published answers. The Contract Developer has discretion Communication with Agency Personnel
for organization of the questions (e.g., chronological by receipt, by All communication with potential respondents should be made only
topic). A sample Q&A document is located in Appendix 15. through the agency’s Purchasing Department or other designated
staff. To maintain a level playing field among all potential respon-
The Q&A document is published with each question being listed with
dents, program staff or other non-purchasing personnel should not
its corresponding response. The Contract Developer will compose
have contact with potential respondents outside of pre-bid/offer/
answers to each question and consult with agency subject matter
proposal conferences. Refer to the Vendor Communications section
experts as needed. If two or more similar questions are submitted
of this Guide. The solicitation should provide the agency’s desig-
(i.e., redundant questions), the Contract Developer should be mind-
nated point of contact and identify the acceptable forms of com-
ful to not provide two inconsistent answers. In this situation, it is best
practice to either provide the exact same answer to both questions munication to the agency such as telephone, or email. If a potential
or answer the first question and then include a cross reference to respondent contacts program staff or other non-purchasing person-
the first answer when responding to the second question. nel, staff should politely decline to discuss the procurement and for-
ward the inquiry to the assigned Contract Developer.
Once the Q&A document is finalized, the agency will publish it with
the solicitation documents on the ESBD and/or in the Texas Register Solicitation – Receipt and Control
as applicable. Any answer that would result in a material change to of Responses
the solicitation must be identified in a solicitation addendum.
Receipt
Solicitation Addenda Reponses must be received on or before the due date and time des-
ignated in the solicitation. The terms “response opening date” and
A written addendum identifying the addition or correction to a solici-
“solicitation closing date” both describe the deadline for receipt of
tation must be issued by the agency in the same manner as the
responses. A response will be considered timely only if it is received
solicitation (e.g., ESBD, Texas Register) if a change to the solicita-
on or before the published due date and time and in conformance
tion occurs before the response due date. A solicitation addendum
with the delivery instructions specified in the solicitation.
is used to clarify an ambiguous provision, correct an error or over-
sight, extend the response due date, or alter a public opening date. To ensure fairness to all respondents, no submitted responses
Rather than using a Q&A document, a solicitation addendum may should be opened or reviewed before the due date and time has
also be used to answer questions by respondents even though the passed; an agency may confirm that a sealed submission, faxed
answers do not result in a modification or change to the solicitation. document or email(s) have been received.
For addenda other than just an extension to the response due date,
it is best practice to require that the responses include an acknowl- Upon receipt by the agency, the sealed response must be marked
edgement of each addendum to the solicitation. with a date and time stamp directly on the envelope, when possible,
or on the express delivery label, and the response must remain
Respondents must be given a reasonable time to respond to a solici- sealed and kept in a secure place to prevent misplacement, loss,
tation addendum. The Contract Developer, therefore, must consider or tampering, until after the published response due date and time.
the period of time remaining until the solicitation closing date prior to
issuing an addendum. Depending on the content of the addendum, Delivery by Email, Fax, or Other Electronic System. When
the Contract Developer may determine that the response due date allowed by the solicitation, responses received by email, fax, or any
should be extended. If an addendum results in substantial changes other electronic system must be treated as sealed response docu-
to the original solicitation, it is recommended that the response due ments and kept secure until after the response due date and time.
date be extended and the revised solicitation to be issued for at A copy of the email received with the response documents attached
least 14 calendar days following the addendum date.
34 TEX. ADMIN. CODE § 20.214(b)(3).
334

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must reflect the date and time of receipt. If multiple emails are sent respondent’s request to withdraw the response is submitted by mail,
by the respondent, a copy of each email must be included in the email, or fax, then a determination must be made by the agency as
procurement file. The faxed documents must be accompanied by a to whether additional documentation is necessary in order to com-
fax receipt notice. If the faxed document(s) do not have a date/time ply with the request.
stamp, one must be affixed manually immediately upon receipt.
Cancellation of Solicitation
Responses Opened in Error or to Confirm Identification.
The agency may cancel a solicitation at any time. If a solicitation
Despite instructions contained in the solicitation, a respondent
is cancelled, the agency must provide notice of the cancellation in
will occasionally submit a sealed response without properly
the same manner as the issuance of the solicitation. For example,
identifying the solicitation on the packet. Agency staff may open
the agency will post a notice of the cancellation to the ESBD if the
a sealed response solely for the purpose of identification so that
original solicitation was posted to the ESBD.335 Cancellation notices
the response can be properly marked as received. If agency staff
must contain, at a minimum, the following information:
open a sealed packet for the purpose of identification or a response
was inadvertently opened, the packet must be resealed, dated, and • agency name, business address, and contact name,
signed by the person who opened the packet. Packets inadvertently
• purchase requisition number or solicitation number, and
opened by agency staff should be marked with “Open in Error” or
“Opened to Determine Content.” • reason for the cancellation.336

Unless other delivery or disposition arrangements are specified in

Late Responses the solicitation, all responses should be returned unopened with a
The responses must be received by the due date and time estab- notification letter from the agency of the solicitation cancellation.
lished in the solicitation. If a response is received after this published
date and time, it is considered a late response. Late responses will Public Opening Option
not be opened and the respondent will be notified that the response Each agency has discretion whether to conduct a public opening on
was rejected because it was not timely received. The agency will the closing date of the solicitation. Public openings do not usually
either return the unopened response to the respondent at the occur for purchases of $25,000 or less. If an agency elects to open
respondent’s expense or dispose of the response according to the responses received in public, the solicitation must clearly state the
arrangements specified in the solicitation. time and place of the public opening. A change to the public open-
The only exception to the prohibition against accepting a late response ing date and time must be published through an addendum to the
is if an agency’s written internal policy permits the acceptance of a solicitation. ESBD posting requirements apply.
late response due to extenuating circumstances. For example, if an A public opening gives members of the public an opportunity to
agency has a practice of accepting responses received for up to two hear, at a minimum, the verbal recitation of the following:
business days following the solicitation closing date whenever the
agency’s main office is closed due to inclement weather events, then • the solicitation number; and
this practice must be documented as written policy. • the name of each respondent.

Withdrawal of Response If bids received in response to an IFB are to be evaluated solely

on objective criteria, then the public opening will normally include
A respondent may withdraw its response at any time prior to the
the following additional information: price or amount for each item
closing date and time for the solicitation. The respondent’s request
number and model number (if different from the specified model).
to withdraw its response must be made in writing on company let-
Agency staff will not discuss whether a product or model meets the
terhead or by completing a form prescribed by the agency. The
written specifications.
preferred practice is for the respondent to submit the withdrawal
of response in person and provide appropriate identification (e.g., The sealed responses may be opened and read in any order such
corporate identification card, photo identification card to match as alphabetical by respondent name, in order of receipt, or by lot.
the authorized contact person listed in the response) so that the
agency can verify that the withdrawal request is legitimate. If the 34 TEX. ADMIN. CODE § 20.214(b)(3).
335

34 TEX. ADMIN. CODE § 20.219(c).

336

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The procurement file must contain the attendance log with each
attendee’s name, signature, and if representing an organization or
entity, the name of the entity and attendee’s title.

Internal Procedures
The agency must have documented internal procedures outlining the
responsibilities and steps for the receipt and control of responses.
Such procedures include, but are not limited to, the following:

• identifying the official timepiece that will be used for determin-

ing timely receipt of responses, such as mail room clock, time
stamp machine, or email server time stamp;
• specifying the marking process that will be used to document
the date and time each response was received by mail, hand
delivery service, fax, or email;
• maintaining a log of responses received which contains the
following information: solicitation number, due date and time,
respondent name, date and time response received, and deliv-
ery method and, if applicable, tracking number (i.e., email, fax,
hand delivery, USPS or other delivery service);
• securing responses until published response due date and
time;
• outlining the processes to be followed after inadvertent open-
ing of responses received hard copy, email, or fax; and
• designating agency staff responsible for each task.

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VENDOR SELECTION
Overview Unsigned Response. A response without a signature is not
responsive to the solicitation and will be disqualified. Unsigned
The third step of the procurement process is to select the vendor responses will not be evaluated; these responses will be kept with
that provides best value to the State. Agencies must conduct evalu- the procurement file and not be returned to the respondent.
ations in a fair and impartial manner consistent with Texas law and
in accordance with either the evaluation procedure published in “Responsive” Response. A response is “responsive” if it conforms
the solicitation or, for informal bidding situations, established by in all material respects to the solicitation requirements (e.g., timely
the agency’s written procedure. Agency legal counsel should be submitted, signed response, completed forms). The Contract Devel-
consulted to ensure the use of the proper evaluation process for oper will make the initial determination as to whether a response is
each procurement. responsive to the solicitation. The initial determination of responsive-
ness is subject to change during the course of the evaluation process.

TCI Program, State Use Program, and Technical Assistance in Specification Preparation. A
Term Contract Purchases respondent or contract participant may provide free technical
assistance to an agency.337 However, an agency may not accept a
Agency purchases using the following procurement methods have response or award a contract to a vendor that received compensa-
been determined to be best value to the State by statute or SPD tion from the agency to participate in the preparation of the specifi-
rule: the TCI Program, the State Use Program and Term Contracts. cations or solicitation on which the proposal or contract is based.338
Accordingly, an agency does not conduct an evaluation process
when selecting a vendor for these purchases. Single Response. Before evaluation begins, the Contract Devel-
oper may investigate why the agency received only one response to
Administrative Review of Responses a competitive solicitation by:

After the responses are opened and recorded, the Contract Devel- • Reviewing the solicitation for any restrictive specifications, and
oper must determine whether the submitted responses are respon- • Contacting several potential respondents to inquire why they
sive to the solicitation. Only responses that are responsive to the chose not to submit a response.
solicitation are evaluated. If it is determined that there were unduly restrictive specifications
At a minimum, this administrative review includes an examination in the solicitation such that the specified product or service is only
of each response to verify that the minimum vendor qualifications available for purchase through a single vendor, the agency should
are satisfied and all required forms and documents were submitted, either re-advertise the solicitation or prepare a Proprietary Purchase
such as the signed execution of bid/offer/proposal or similar docu- Justification for the proprietary sole source purchase. Otherwise,
ment, price sheet, bid bond, signed HUB Subcontracting Plan, and the agency should consider the reasons that potential eligible
signed non-disclosure agreement. respondents did not participate in the agency’s competitive solicita-
tion in order to assess whether it is in the best interest of the State to
The administrative review is conducted on a “pass/fail” basis. proceed with the evaluation process or re-advertise with a revised
Consultation with legal counsel may be necessary to determine solicitation. If the agency decides to proceed with the procurement,
whether a response is responsive to the solicitation requirements. the Contract Developer will either tabulate the bid, only if objective
It is recommended that the Contract Developer use a checklist criteria are used for informal bidding or an IFB, or direct the evalua-
to document the results of the administrative review. A sample tion committee to evaluate the response.
Administrative Review Checklist is provided in Appendix 17.

TEX. GOV’T CODE § 2155.004(e).

337

TEX. GOV’T CODE § 2155.004(a).

338

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Evaluation – Bid Tabulation Process policy.340 For procurements with an expected value of $1 million or
more, the SAO Nepotism Disclosure Statement for Purchasing Per-
If the responses to an IFB are to be evaluated solely on objective cri- sonnel must also be utilized. Any actual or potential conflicts of inter-
teria, the evaluation may be conducted by the Contract Developer. est must be reported promptly to agency legal counsel.
As a general rule, bids must be tabulated when opened, but there
are times when this is not practical. It is recommended that the bid Evaluation – Evaluation Committee
tabulation be prepared within a maximum of three business days
from the bid due date.
Process
The following, as applicable, must be included on the bid Evaluation Committee
tabulation: The evaluation committee is composed of subject matter experts and
stakeholders. The committee should have a diverse relevant disciplin-
• NIGP Class/Item;
ary expertise and knowledge of the product or service being procured.
• Confidential or Proprietary declarations by respondent; Because service on an evaluation committee involves a significant
• Vendor (Payee) Identification Number; time commitment, care should be taken to ensure that each member
• Respondent name; selected as a scoring member is able to attend the committee meet-
ings, oral presentations, and site visits to respondent premises.
• HUB Status;
• Price Sheet Line Item Descriptions; Evaluation committee selection should occur prior to receipt of the
• Manufacturer/Brand; responses. It is common for the evaluation committee members to have
been involved in the procurement planning activities. The Contract
• Product Number;
Developer is usually designated as the committee chair, serving as
• Package Quantity Information; a non-scoring member of the evaluation committee. Depending on
• Unit Price; the procurement, the Contract Manager may participate as either
• Delivery Days After Receipt of Order; a scoring or non-scoring member. The scoring and non-scoring
• Warranty; members of the committee must be noted in the procurement file.

• Comments/Remarks – Include indicators for disqualification The recommended size of an evaluation committee is three to five
and non-responsive; and scoring members. To avoid potential individual bias, the committee
• Award Column to indicate the bidder receiving the award for should not have fewer than three scoring members. Depending on
any given item. the procurement, the agency may determine that a larger commit-
tee is necessary. There is no restriction as to how many individuals
It is best practice for the bid tabulation to be reviewed by a second
the agency may include on an evaluation committee; however, good
Contract Developer prior to finalization to ensure that the evalua-
judgement dictates that the number of individuals on the committee
tion was conducted in conformance with applicable purchasing pro-
be limited to the minimum required to accomplish its purpose.
cedures.339 Particular care should be taken to ensure that the raw
data is accurately transcribed into the mathematical formulas and Each evaluation committee member will independently assess the
that the mathematical formulas are properly loaded into electronic content of each response using only the evaluation criteria and
spreadsheets/workbooks when such electronic aids are used. After weights published in the solicitation and, if applicable, unpublished
contract award, the bid tabulation is subject to public disclosure subcriteria (i.e., a smaller component of the published base criterion).
under the Texas Public Information Act.
TEX. GOV’T CODE § 2261.252(a) (Each state agency employee or official who is
340
The Contract Developer must conduct a due diligence inquiry as involved in procurement or in contract management for a state agency shall disclose
to actual and potential conflicts of interest related to the submitted to the agency any potential conflict of interest specified by state law or agency
policy that is known by the employee or official with respect to any contract with
bids. As an agency internal policy, the agency may utilize an agency
a private vendor or bid for the purchase of goods or services from a private vendor
specific conflict of interest statement for compliance with conflict by the agency); TEX. GOV’T CODE § 2261.252(a-1) (A state agency employee or
of interest disclosure requirements specified by law or agency official is required to disclose any potential conflict of interest specified by state
law or agency policy that is known by the employee or official at any time during: (1)
the procurement process, from the initial request for bids for the purchase of goods
339
For procurements subject to Chapter 2261 of the Texas Government Code, refer to or services from a private vendor until the completed final delivery of the goods or
Sections 2261.0525 and 2261.054 of the Texas Government Code. services; or (2) the term of a contract with a private vendor.).

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Accordingly, the evaluation committee members must fully understand Evaluation of Responses
the solicitation, be able to critically read and evaluate the responses,
and document their decisions in a clear and concise manner. Overview
Prior to evaluating the responses, the Contract Developer will sched-
Each committee member will be expected to score each response
ule a meeting with the evaluation committee and any authorized
on how it meets, exceeds or fails to meet the standards established
technical advisors to provide guidance on the evaluation process
in the solicitation. If the agency plans to use individuals during the
and the scoring matrix. If the agency utilizes a numbering system to
evaluation process (e.g., evaluation committee members, technical
identify evaluation committee members and/or track the responses,
advisors) who are not agency employees, it is recommended that
this system should also be explained. This meeting may be held as
agency legal counsel be consulted to ensure that appropriate pro-
a separate meeting before the first committee meeting or at the
cedures are implemented to protect the interests of the State.
beginning of the first committee meeting.
Non-Disclosure Agreements and Conflict of The committee members should be instructed as to their responsi-
Interest Disclosures bilities including the critical nature of confidentiality and the integ-
To safeguard the integrity of the evaluation process, individuals serv- rity of the evaluation process. Care must be taken not to engage in
ing on an evaluation committee or as technical advisors must sign a technical leveling, technical transfusion, or other improper activities.
non-disclosure agreement prior to receiving the responses or partici- The evaluation committee may not commence any discussions until
pating in evaluation committee activities. Committee members may each committee member has signed a non-disclosure statement
not communicate with respondents or anyone else outside the com- and a preliminary assessment regarding actual and potential con-
mittee regarding the responses received or the evaluation process flicts of interest has been conducted. Evaluation Committee Guide-
without prior approval of the Contract Developer or the agency legal lines are located in Appendix 18.
counsel, as appropriate. Examples of permitted communications may
The evaluation committee members must be provided with the fol-
include the Contract Developer’s coordination of the committee’s
lowing documents, as applicable to the specific procurement:
consultation with authorized technical advisors and the committee’s
attendance at oral presentations. • the entire solicitation, including all issued addenda and Q&A
documents;
The agency must also conduct a due diligence inquiry as to the
evaluation committee members and technical advisors’ actual and • a list of responses submitted; and
potential conflicts of interest related to the submitted responses. It is • a copy of each response determined to be responsive by the
best practice for the Contract Developer to provide the names of the Contract Developer following the Administrative Review (clearly
marked with the assigned reviewer’s number, if a numbering
respondents and proposed subcontractors to the committee mem-
system is used by the agency).
bers and any assigned technical advisors prior to providing access
to the responses. As an agency internal policy, the agency may uti- Each response must be evaluated independently against the evalu-
lize an agency specific conflict of interest statement for compliance ation criteria published in the solicitation and not compared to any
with conflict of interest disclosure requirements specified by law or other submitted response. The evaluation committee members must
agency policy. 341 For procurements with an expected value of $1 mil- not conduct independent research; each member’s evaluation must
lion or more, the SAO Nepotism Disclosure Statement for Purchasing be based solely on his or her personal review of the response and
Personnel must also be utilized. Any actual or potential conflicts of other information specifically authorized by the Contract Developer
interest must be reported promptly to agency legal counsel. or assigned legal counsel that is consistent with the solicitation (e.g.,
TEX. GOV’T CODE § 2261.252(a) (Each state agency employee or official who
341 written clarifications received from the respondents, oral presenta-
is involved in procurement or in contract management for a state agency shall tion material, and reference check information).
disclose to the agency any potential conflict of interest specified by state law
or agency policy that is known by the employee or official with respect to any
contract with a private vendor or bid for the purchase of goods or services from
If assistance is requested from authorized technical advisors, the
a private vendor by the agency); TEX. GOV’T CODE § 2261.252(a-1) (A state evaluation committee’s inquiry should be limited to areas related
agency employee or official is required to disclose any potential conflict of interest to the evaluation criteria. Evaluators and technical advisors must
specified by state law or agency policy that is known by the employee or official
at any time during: (1) the procurement process, from the initial request for bids never attempt to communicate with or reply to a communication
for the purchase of goods or services from a private vendor until the completed from a respondent during the evaluation process. In the event one
final delivery of the goods or services; or (2) the term of a contract with a private
vendor.).
of the respondents is a current service provider, it is recommended

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that the evaluator consult with the Contract Developer on the appro- Scoring Matrix
priate practices to be utilized to ensure that there is no appearance
The scoring matrix is a standardized form used by all of the evalua-
of impropriety. To protect the integrity of the evaluation process,
tion committee members to record the scores for each the response
only the Contract Developer or an assigned attorney may communi-
based on the evaluation criteria and weights published in the solici-
cate with respondents.
tation and, if applicable, unpublished subcriteria. It is best practice
Discussion of the responses must only occur at an evaluation com- for the scoring matrix to be finalized prior to publishing the solicita-
mittee meeting with all scoring members present. It is common for tion. However, if time does not permit the scoring matrix to be final-
the evaluators to conduct their evaluations at the same time in the ized prior to publication of the solicitation, the scoring matrix must
same room; this can facilitate questions by committee members be completed prior to the receipt of responses. A sample Evaluation
with each other as well as to the Contract Developer and technical Committee Member Scoring Matrix is located in Appendix 19.
advisors. However, it is an acceptable practice for the evaluators
to review the responses from their respective workspaces and to Technical Advisors
engage in group discussions only at scheduled meeting times. Depending on the procurement, the evaluation committee may seek
assistance from technical experts within the agency to gain a better
Communication between two or more committee members related
understanding of certain aspects of the responses. Technical advi-
to evaluating responses or the content of responses is not permitted
sors are generally used when a particular area of subject matter
outside the presence of the entire committee. Committee members
expertise is not within the skill set of the evaluation committee mem-
must attend all scheduled evaluation meetings and participate as
bers. For instance, an employee from the agency’s budget division
required by completing all committee responsibilities in the time
may serve as a technical advisor during the evaluation committee’s
allotted. Absence from meetings or failing to meet deadlines to
review of the financial capability documentation submitted by the
complete evaluations may result in the removal of a member from
respondents. Similarly, for an IT procurement, an employee from the
the evaluation committee or removal of the evaluator’s scoring from
agency’s information security division may serve as a technical advi-
consideration.
sor during the evaluation committee’s review of the various data
The evaluators will record their individual scores for each response safeguard standards proposed by the respondents.
on the scoring matrix provided by the Contract Developer. If permit-
Technical advisors to the evaluation committee comply with the
ted by the solicitation, the agency may waive minor technicalities
same non-disclosure and conflict of interest restrictions applicable
of submitted responses. If an evaluator determines that a waiver of
to the evaluation committee. Accordingly, the technical advisors
minor technicalities is appropriate during evaluation, this approach
should not discuss the solicitation with anyone, even evaluation
should be brought to the attention of the entire committee to ensure
committee members, outside the committee meetings. The Contract
that all the evaluators are using the same evaluation standards.
Developer must coordinate all communication between the evalu-
Some procurements may involve multiple scoring rounds to nar- ation committee and authorized technical advisors to ensure the
row the competitive field (e.g., second scoring round following oral integrity of the evaluation process.
presentations). Evaluators must record their scores on the scoring
matrix following each scoring round. It is best practice to label each Price Component
scoring matrix with the applicable scoring round number or date. The price component of the response is usually assessed by using
either a “reasonableness” standard or objective criteria. For a price
Under no circumstances must any committee member attempt to
criterion assessed using a reasonableness standard, the evaluation
pressure other members to change evaluation scores. However, if
committee conducts the evaluation. If the price criterion is to be
it is apparent that one or more committee members’ evaluations
evaluated using only a mathematical formula, such as for an IFB,
differ significantly from the majority, the committee chair should
then it may be scored by the Contract Developer. Unless prohibited
schedule a meeting with the entire committee to discuss the outliers
by statute or agency policy, it is recommended that the evaluation
to ensure the evaluation criteria were clear to all scoring members
committee review and score the entire response, including the price
and that information was not overlooked or misunderstood. If after
component, to facilitate a more comprehensive evaluation of the
this discussion, a committee member determines that there was a
response (e.g., ensure that the proposed pricing aligns with the pro-
misunderstanding of the criteria, the requirement, or information
posed products and services).
overlooked that was included in the response, the evaluator may
provide a revised scoring matrix.

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Reference Check received by the respondent. A respondent’s clarification must be in

writing and signed by an authorized representative.
If required by the solicitation, respondents may submit customer ref-
erences with their responses. The Contract Developer may conduct The evaluation committee should be mindful that a respondent’s
the reference checks or authorize a subcommittee of the evalua- clarifications may not be used to “cure” deficiencies in the response
tion committee to conduct reference check activities. All information or to revise the response. The clarifications may only be used to
obtained during the reference checks must be documented in writing. understand the information provided in the response. It is important
to note that a request for a respondent to clarify its response is not
The same script or format of questions must be used when con-
the same as negotiations of the specifications or terms and condi-
ducting reference checks so that the results are consistent and fair
tions because the request to clarify does not provide one respon-
to all respondents. The list of reference check questions must be
dent an advantage over another. Therefore, care must be taken not
prepared prior to the solicitation closing date. When developing
to inadvertently engage in negotiations.
the questionnaire, the Contract Developer should keep in mind the
types of questions to which its agency would respond. For example,
Competitive Range Determination
many entities will not participate in business reference activities that
involve a lengthy questionnaire or questions that appear to ask for After the initial scoring, the Contract Developer will determine the
an endorsement. A sample Reference Check Form is provided in competitive range. The competitive range refers to those responses
Appendix 20. determined to be reasonably considered for award selection and
is an objective means of narrowing the field of respondents that
An agency should not request submission of customer references will participate in subsequent evaluation activities such as oral
that the agency does not intend to verify. However, events follow- presentations.
ing solicitation issuance may shorten the procurement timeline such
that reference check activities cannot be conducted by the agency Agencies should look for a “natural break” in the scores that will
in a timely manner. When the solicitation requires the submission of determine the competitive range. An example of how to determine
references or references are considered as part of the evaluation competitive range from maximum score of 100 is illustrated below.
criteria, the agency must decide whether or not it will verify cus-
tomer references before the solicitation closing date. If reference Evaluation Evaluation Evaluation
checks will not be conducted by the agency, this determination Scores Scores Scores
should be documented and placed in the procurement file. Scenario 1 Scenario 2 Scenario 3

97 97 97
Vendor Performance Tracking System Check
Contractor performance information is located in the Vendor 93 93 96
Performance Tracking System (VPTS) on the CPA website.342 VPTS 90 82 90
is maintained by SPD. Agencies are required to use the VPTS to
determine whether to award a contract to a vendor reviewed in the 89 81 89
tracking system.343 88 79 88

Clarification of Responses 65 68 86

As part of the initial evaluation, the evaluation committee may

determine that clarification of a response is necessary prior to scor- • In scenario 1, the top five respondents are in the competitive
ing. Accordingly, the evaluation committee may pose clarifying range.
questions to a respondent in order to resolve conflicting information, • In scenario 2, the competitive range could include the top two
apparent ambiguities, or minor clerical errors within the response. respondents or the top five respondents.
If a clarification to the response is necessary, the Contract Devel- • In scenario 3, there is a six-point difference between the 2nd
oper or agency legal counsel will contact the applicable respondent and 3rd score, with the remaining scores close behind. There-
and distribute to the evaluation committee the written clarifications fore, the best option is to include all six respondents.

The rationale for the competitive range determination should be

The CPA website is located at Comptroller.Texas.Gov.
342

TEX. GOV’T CODE § 2262.055(d).

343 documented in the procurement file.

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 Statewide Procurement Division

Oral Presentations Evaluation Committee Recommendation

If expressly permitted by the solicitation, an agency may elect, Once the evaluation process is completed, the committee chair will
after reviewing the responses, to conduct oral presentations. prepare, sign and date the master scoring matrix, and proceed with
Oral presentations provide an opportunity for respondents to highlight a recommendation to either award the contract the highest ranked
the strengths and unique aspects of their responses and to provide respondent without discussion, tentatively award the contract to
answers to clarification questions the agency may have regarding the the highest ranked respondent subject to successful completion
responses. Presentations which include demonstrations of product of negotiations or cancel the solicitation. It is recommended that
functionality are recommended when appropriate, such as informa- each committee member review the master score sheet to verify the
tion technology procurements or solution-based procurements. accuracy of the scoring. Particular care should be taken to ensure
that the raw data is accurately transcribed into the mathematical for-
Oral presentations may be scheduled for all respondents or limited
mulas and that the mathematical formulas are properly loaded into
to the top ranked vendors in the competitive range. The agency
electronic spreadsheets/workbooks when such electronic aids are
shall follow the process outlined in the solicitation to notify the
used. If the solicitation allows, the evaluation committee may rec-
respondents of the time and place for the oral presentations. Before
ommend a contract award to more than one respondent; provided,
the oral presentation, the evaluation committee should prepare its
however, that the awarded respondents are the highest ranked in
list of clarification questions for the presenting respondents.
the evaluation.344
Oral presentations and demonstrations must be fair to all parties. The
time allowed and the agenda format should be the same for all pre- Preferences
senters. Because some presenters may believe there is an advantage
to the order in which they present, it is best practice to draw names Overview
for the presentation order to ensure impartiality of the process. Preferences are established by statute. With the exception of
the reciprocal preference, a vendor must claim the applicable
Following the oral presentation, it is best practice for the agency
preference(s) in its response by marking the appropriate preference
to submit written questions to the respondent to document in writ-
on the preference form included in the solicitation. If the appropri-
ing the verbal clarifications provided by the respondent during the
ate box is not marked on the preference form, a preference will not
presentation. The answers to these clarification questions should be
be granted unless other documents included in the response suf-
signed by an authorized representative of the respondent. Follow-
ficiently demonstrate that the bidder may receive the preference
ing all oral presentations, the evaluation committee will complete a
and is requesting the preference. Upon the agency’s request, the
scoring matrix using the evaluation criteria and weights published
vendor must provide adequate documentation to support a claimed
in the solicitation. To protect the integrity of the evaluation process,
preference.
the evaluation committee which evaluated the written responses
should also evaluate the clarifying information obtained from the Any price adjustment that results from application of a preference
respondents during the oral presentations and site visits. occurs only during the evaluation process. The application of a pref-
erence does not alter the price to be paid by the agency under an
Best and Final Offers awarded contract. A non-exhaustive List of Preferences is located
After any oral presentations or demonstrations are completed, dis- in Appendix 21.
cussions may be held. If discussions are held, respondents must be
given equal opportunity to discuss and submit revisions to propos- Reciprocal Preference Law
als. Revisions of proposals are normally accomplished by formally Texas law requires that responses from nonresidents from a state that
requesting Best and Final Offers (BAFOs) at the conclusion of dis- grants resident bidder preferences for that state’s purchases must be
cussions with a deadline set for receipt of BAFOs and including reciprocated in the same manner when competing against a bidder
instructions as to exactly what should be submitted in response to residing in Texas. In other words, the State of Texas will respond in
the BAFO. After consideration of all BAFO responses, agencies may kind to resident bidder preferences made by other states.
choose to down select to a smaller number of respondents with
which to commence negotiations.
For procurements subject to Chapter 2261 of the Texas Government Code, refer to
344

Sections 2261.0525 and 2261.054 of the Texas Government Code.

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Under the Texas reciprocal preference law, a governmental entity Same Price – Same Preferences
may not award a governmental contract to a nonresident bidder
The award for any tied item is determined by drawing lots, tossing
unless the nonresident underbids the lowest bid submitted by a
a coin, or drawing names with two witnesses to oversee the tie-
responsible resident bidder by an amount that is not less than the
breaking activity.
greater of the following:

1. the amount by which a resident bidder would be required Same Price – Different Preferences
to underbid the nonresident bidder to obtain a comparable
If two bidders propose the same price, but the preferences checked
contract in the state in which the nonresident’s principal
place of business is located; or are different, the award is based on the priority for goods and/or for
services.
2. the amount by which a resident bidder would be required
to underbid the nonresident bidder to obtain a comparable Examples of Using Preferences to Break a Tie for Goods
contract in the state in which a majority of the manufacturing
and Services.
relating to the contract will be performed.345

For purposes of the reciprocal preference law, “resident bidder” EXAMPLE 1: The award is made to Bidder A. Priority is given to the
refers to a person whose principal place of business is in Texas, Texas-produced product over the U.S.-produced product.
including a contractor whose ultimate parent company or majority
Bidder
owner has its principal place of business in Texas.346 Product Bidder B
A
If another state grants a preference to its resident bidders, a corre- Texas Agricultural Product
sponding percentage increase is added to the nonresident bidder’s Texas Product X
response when bidding in Texas. For example, State A grants its in-
Texas Bidder
state bidders a 10 percent preference when bidding on agricultural
products. By granting a 10 percent advantage to in-state bidders, U.S. Product X
State A is essentially penalizing Texas bidders 10 percent for not being
residents. Texas reciprocates by adding a 10 percent non-residency EXAMPLE 2: The award is made to Bidder B. Because both bidders
penalty to the response from the bidder from State A, which essen- show preference to Texas agricultural and Texas products, priority is
tially gives a 10 percent preference to bidders residing in Texas. given to the Texas bidder.

Reciprocity and resident bidder preferences do not apply when Bidder

Product Bidder B
evaluating responses that involve the use of federal funds.347 The A
reciprocity preference is only applied during the evaluation process Texas Agricultural Product X X
and only in situations where the out-of-state bidder is from a state
Texas Product X X
that has a residency preference. SPD maintains a Summary of Other
State Bidder Preference Laws on the CPA website.348 Texas Bidder X
U.S. Product
Resolving Tie Bids
A tie occurs when two or more responses receive the same score
EXAMPLE 3: The award is made by drawing lots, tossing a coin, or
after evaluation. Priority of the claimed preference is given in the
drawing a name.
sequence listed below:

• Texas Agricultural Product Bidder

Product Bidder B
A
• Texas Product
Texas Agricultural Product
• Texas Bidder
Texas Product
• U.S. Product
Texas Bidder X X
345
TEX. GOV’T CODE § 2252.002. U.S. Product
346
TEX. GOV’T CODE § 2252.001(3).
347
TEX. GOV’T CODE § 2252.004.
348
The CPA website is located at Comptroller.Texas.Gov.

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 Statewide Procurement Division

CONTRACT FORMATION AND AWARD

Overview Negotiation is not permitted under the IFB procurement method
except when only one qualified bid is received. This exception is the
The fourth step of the procurement process is to enter into a legally only circumstance for an agency to negotiate contract terms, includ-
enforceable contract that not only meets the agency’s business ing price; the negotiation may not result in a material change to the
need but is also compliant with Texas procurement law. The contract advertised specifications.
between the agency and the selected vendor may be in the form of
either a PO or formal signed agreement. If a formal signed agree- Public procurement professionals should be mindful that nego-
ment is used, the PO documents the encumbrance of funds by the tiations involving public sector entities (e.g., state government) are
agency for the transaction. different than between private sector entities. For example, negotia-
tions with an agency must not materially alter requirements of the
For many procurements, the Contract Formation and Award phase published solicitation. Care must be taken by the agency to avoid
is a relatively quick process. For example, a contract to acquire a inadvertently changing the advertised procurement objectives. If the
good or service from SPD Term Contracts may be awarded by PO procurement objectives are changed through the negotiation pro-
immediately following the selection of the vendor. In contrast, the cess, an unlevel playing field occurs when respondents could have
Contract Formation and Award phase may take longer for procure- bid differently had they been aware of the changed procurement
ments where the parties desire to enter into a formal written agree- objectives. An unlevel playing field also results when the composi-
ment following the negotiation of terms and conditions. tion of the eligible vendor pool would have been different (e.g., the
vendor pool may have been larger) if the changed objectives had
Negotiations been incorporated into the original solicitation. Whenever it appears
that the procurement objectives may have been changed, agency
Overview legal counsel should be consulted before proceeding further.
An agency may negotiate terms and conditions during the pro-
curement process. Not all procurement methods, however, allow
Negotiation Team
for negotiation.349 Prior to commencing negotiations, the Contract The agency should strive to place employees with effective negotia-
Developer must verify that negotiations are permitted under the tion and communication skills on negotiation teams. For complex
applicable procurement method. procurements involving high-dollar or high-risk projects, it is recom-
mended that the negotiations also be conducted by an experienced
Negotiations are permitted for the following: team of agency employees.
• purchases using competitive sealed proposals, A lead negotiator should be designated to establish an organized
• purchases using requests for offers, and controlled negotiating environment to support an efficient,
• purchases under DIR cooperative contracts, coordinated, and unified team effort. Rarely will the lead negotia-
tor also be the Contract Developer in a complex procurement. For
• purchases of consulting services,
example, it is not recommended that a Contract Developer single-
• purchases of professional services,
handedly negotiate a procurement of a major information technol-
• TXMAS purchases, ogy system. Instead, this type of negotiation should be undertaken
• State Use Program purchases (when procuring services not by a team that includes representatives from the end-user depart-
goods), ment with subject matter expertise, the agency’s technology and
• sole source and competitive proprietary purchases, and information security departments, and legal counsel.
• emergency purchases when there is insufficient time to solicit Team members should be chosen, or excluded, based on their leader-
bids.
ship style, negotiation skills and subject matter expertise. Too often
agencies are at a disadvantage during contract negotiations simply
349
34 TEX. ADMIN. CODE § 20.206(d). because the right people are not present during negotiations. It is

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Statewide Procurement Division

important that the negotiation team includes agency personnel who Performance Focused Negotiations
have decision-making authority appropriate for the procurement.
When negotiating a contract, it is recommended to focus on per-
Preparation formance results as opposed to focusing exclusively on purchas-
ing goods and services. If the agency is aiming to reduce the cost,
The key to successful contract negotiations is preparedness by
examine the various methods of reducing cost and do not just focus
agency personnel. Preparedness represents the degree to which
on respondent’s profit reduction. If the agency negotiator is willing
the Contract Developer, prior to the commencement of negotiations,
to be creative during the negotiations process, within the bounds of
has obtained negotiation-relevant information and has engaged in
the published solicitation, the successful respondent is much more
formal planning activities with the negotiation team. Depending
likely to collaborate in finding ways to reduce costs to the agency.
on the particular transaction, negotiation-relevant information may
The end goal in a negotiation focused on performance results is
include data on prevailing prices, supply conditions, and production
a mutually beneficial agreement where the successful respondent
costs.
makes a reasonable profit but also delivers the products/services on
To develop an effective negotiation strategy, the negotiation time with the highest possible quality.
team must be familiar with the documentation submitted by the
Negotiation is based on the willingness of each party to compro-
vendor and be well-versed in the respective division’s business
mise. From time to time, however, negotiations may be highly
requirements, constraints, and any applicable overarching agency
stressful, time sensitive, and take an unexpected turn. The agency’s
objectives. The negotiation strategy should be tailored to suit the
negotiation team should remain professional and cordial at all times.
particular facts and circumstances of each procurement. Formal
Effective listening, establishing goodwill, and the ability to leverage
planning activities include:
negotiations are important components to creating value and bar-
• identifying contract terms which are crucial to the agreement gaining power.
(i.e., terms upon which the agency is either unable or unwilling
to compromise, as well as contract terms that the agency is
willing to compromise or relinquish);
Contract Formation
• understanding and prioritizing the acceptable trade-offs Overview
between the various negotiation goals;
When negotiations are complete, a contract documenting the par-
• establishing the agency’s settlement range on the items to be ties’ negotiation and the terms and conditions of the performance
negotiated; and
must be finalized. Texas courts define a contract as a promise or a
• anticipating the positions that will be taken by the vendor dur- set of promises to which the law attaches legal obligation.351 The law
ing negotiations. regards the performance of these promises as a duty and provides
a remedy for the breach of this duty. Contracts that deviate substan-
Technical Leveling, Technical Transfusion, tially from requirements defined in the solicitation are open to chal-
and Other Improper Activities lenge from unsuccessful respondents. Awarding a different project
Care must be taken not to engage in technical leveling and/or tech- from the one solicited undercuts competition and the contract could
nical transfusion activities. Technical leveling is helping a respon- be considered void due to a violation of ESBD posting requirements.
dent to bring its response up to the level of other responses through For example, if a solicitation was for bicycles, but the award was
successive rounds of discussion, usually by pointing out weak- given for scooters, that award would undermine the specifications
nesses in the response. Technical transfusion, which is prohibited by of the solicitation and would be considered a substantial deviation
statute,350 is the disclosure of technical information or approaches from requirements.
by one respondent to other competitors in the course of discussion.
Prohibited auctioneering techniques include: Approach to Contract Formation
Fundamentally, the purpose of a written contract is to serve as a
• disclosure of competing respondents’ cost/prices (even if the
disclosure is made without identifying the vendor by name); and reference document that records the terms of an agreement to pre-
vent misunderstanding or conflict, and creates a legal, binding and
• advising a respondent of its price standing relative to other
enforceable obligation. Most often, conflicts over contracts arise
respondents.
C & H Transportation Company v. Wright, 396 S.W.2d 443, 446 (Civ App.-Tyler
351

TEX. GOV’T CODE § 2156.123(a).

350
1965, ref. n.r.e.).

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 Statewide Procurement Division

well into a contract period when memories may be unreliable and Offer – An offer is defined as the manifestation of the willingness to
representatives of the agency or vendor may have changed. With enter into a bargain so made as to justify another person in under-
this in mind, clarity of the terms and completeness of the issues standing that his assent to the bargain is invited and will conclude it.
addressed are of primary importance. The individual drafting the
contract must know the subject matter and concerns of the parties Acceptance – Acceptance of an offer is a manifestation of assent
thoroughly enough to anticipate potential areas of disagreement to the terms thereof made by the offeree in a manner invited or
and specifically address them in the contract. required by the offer. An acceptance must not change the terms of
an offer. If it does, there is no “meeting of the minds” and the offer
Thoroughness and precision are necessary to determine the scope is rejected. A material change in a proposed contract constitutes a
of a contract because contract law does not allow parties to add counteroffer, which must be accepted by the other party for there
terms not part of the original contract without the consent of both to be a binding contract between the parties. Generally, agencies
parties. This rigidity in contract law is mostly seen as an advantage structure their contract process so that they have the last look at the
to both parties. However, this advantage may become a liability if document and the last opportunity to accept or reject.
the agency does not include all necessary language in the contract
when executed. Legal Purpose – The objective of the contract must be for a legal
purpose. For example, a contract for illegal distribution of drugs is
Creating contracts for the State is an exercise in balancing poten- not a binding contract because the purpose for which it exists is
tial conflicting interests. These interests include the State’s not legal. A contract for which the agency does not have statutory
requirements, fiscal constraints, statutory requirements, and the authority may be considered void.
contractor’s requirements. The primary concern must always be the
benefit of the contract to the State as a whole, or more specifically, Consideration – Consideration is present when each party
the taxpayers of the State. receives something under the contract. The same concept can be
described as “mutuality of obligation.” Mutuality of obligation refers
When negotiating in the best interest of the State, care should be to the idea that both parties make binding promises under the con-
taken not to include unnecessarily harsh provisions in the contract; tract. If one person says to another, “For your birthday tomorrow,
while such provisions may be legal, they usually have negative I will bring you a cupcake,” that is a promise. However, because
future consequences that outweigh the initial gains. Contractors only one party has made a promise, it cannot be considered as a
who feel they have been aggrieved by the State are less likely to contract. There is no consideration. If the parties agree that one will
provide good service and are more apt to engage in legal action. sell the other a cupcake for $2, each party has made a promise.
In addition, these contractors may decide to not pursue future State The promises depend on each other, and each party will receive
contracts, thus limiting future competition. Contractors that hear of something of value as consideration. This is a mutual obligation and
bad experiences with State contracts from incumbent or previous could be a contract. Consideration can take many forms other than
contractors may demand more money on future contracts to do the money. For example, the promise not to do something can be a valid
same work to offset the perceived risk. and valuable consideration.352

Legal Elements of a Contract Certainty of Subject Matter – To be enforceable, the parties

must have agreed on the essential terms of the contract. A contract
The essential elements necessary to form a binding contract are
is legally binding only if the essential terms are sufficiently defined
usually described as follows:
to enable a court to understand the parties’ obligations. For exam-
• Offer ple, in an agreement to lease office space, the location of the offices
is an essential term. The lack of non-essential terms will not typically
• Acceptance
• Legal Purpose
• Consideration It should be noted that there are limited circumstances where consideration
352

• Certainty of Subject Matter may not be required in order to have a binding contract. For example, promises
to pay past debts are usually enforced without consideration, although most
• Competent Parties states required signed writing. Additional examples, among others, are promises
to pay for benefits or services previously received (especially requested services
or emergency) and promises which foreseeably induce reliance. Promises which
foreseeably induce reliance will be enforceable without consideration under
promissory estoppel doctrine if injustice can only be voiding by doing so.

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Statewide Procurement Division

void a contract.353 For example, if an office lease fails to specify how • Identification of the contracting parties.
rent will be paid, a court would likely say that the rent can be paid By their nature, these terms are transaction-specific; there-
by cash or check or other generally accepted methods. Historically, fore, the text will vary for each contract.
Texas courts prefer to validate transactions rather than void them, 2. Texas Required Contract Clauses. The most common statu-
but courts may not create a contract where none exists and they torily required contract clauses are compiled on the list of
generally may not insert or eliminate essential terms. Texas Required Contract Clauses located in Appendix 22.
For each required contract clause, the compendium pro-
A contract that includes an agreement to reach an agreement on vides both standard and alternate text that serves as a
an essential term will not be upheld. For example, the amount of safe harbor for compliance with the applicable statute. It is
monthly rent could be an essential term in a lease agreement. If the recommended that public procurement professionals seek
contract merely says that the parties will agree on that amount, the assistance from agency legal counsel prior to modifying the
court cannot order them to agree. The court cannot supply an essen- standard or alternate text specified for the Texas Required
tial term. Because an essential term is missing, there is no contract. Contract Clauses as slight variations may result in the agen-
cy’s non-compliance with applicable statutes and rules.
If the contract says, instead, that the rent will be calculated from a
certain benchmark, or determined by a third-party expert, that is not Provisions that are recommended for inclusion in agency contracts
merely an agreement to agree. The contract references an objective are located in Appendix 23. While the Recommended Clauses are
method for determining the rent, and thus it could be enforced. not mandated by statute to be included in every contract, they
should not be treated as “optional.” Rather, the Recommended
Competent Parties – Parties to a contract must be competent
Clauses are provisions that are typically included in most contracts.
and authorized to enter into a contract.
Recommended Clauses include, but are not limited to, the following:
Contract Terms • Administrative provisions,
As directed by Section 2262.051(d)(1) of the Texas Government • Provisions that allocate risk and specify remedies,
Code, this Guide must provide model contract provisions which dis-
• Provisions that relate to the identification and safeguarding of
tinguish between essential provisions that an agency must include confidential information, and
in a contract to protect the interests of the State and recommended
• Provisions that relate to rights and ownership of work product
provisions that an agency may include in a contract. This Guide must
and intellectual property.
also recognize the unique contracting needs of the individual agen-
cies and provide sufficient flexibility to accommodate those needs, Agencies, therefore, are strongly encouraged to include the appro-
consistent with protecting the interests of the State.354 priate Recommended Clauses in each contract. The determination
as to the appropriateness of a particular contract term is depen-
The Essential Provisions that must be included in every contract are
dent on the characteristics of the transaction. By way of example,
as follows:
agencies must include provisions in the contract that address risk
1. Terms Necessary for the Formation of a Legally Binding Con- mitigation and remedies that are appropriate for the risks identi-
tract. The necessary elements of a contract are offer, accep- fied for the procurement. Refer to the Terms and Conditions and the
tance, legal purpose, consideration, certainty of subject Planning and Risk Assessment Tools sections of this Guide for
matter, and competent parties. Accordingly, each contract general information regarding risk mitigation strategies and sample
must include terms which address the following: tools for documenting potential risk.355
• Scope of work,
Agencies should document in the procurement file the basis for the risk mitigation
355

• Financial provisions (e.g., price and payment terms), and remedies included in the contract and any amendments, renewals, or
extensions. For procurements subject to Chapter 2261 of the Texas Government
• Contract term and termination provisions, and
Code, an agency must include in the procurement file for each of its contracts
a written explanation of the agency's decision to include or not include in the
353
TEX. BUS. & COM. Code § 2.204 (providing (a) contract for sale of goods may be contract a provision for liquidated damages or another form of liability for damages
made in any manner sufficient to show agreement, including conduct by both caused by the contractor. The procurement file must also include, if applicable,
parties which recognizes the existence of such a contract, (b) an agreement a written justification for any provision in the contract that limits the liability of a
sufficient to constitute a contract for sale may be found even though the moment of contractor for damages. If an extension of an agency's contract modifies a provision
its making is undetermined, and (c) even though one or more terms are left open a for liquidated damages or another provision relating to a contractor's liability for
contract for sale does not fail for indefiniteness if the parties have intended to make damages, the agency must amend the written explanation or justification required
a contract and there is a reasonably certain basis for giving an appropriate remedy). by this section to include a justification for the modification. TEX. GOV’T CODE §
354
TEX. GOV’T CODE § 2262.051(d)(2). 2261.204.

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The list of Recommended Contract Clauses located in Appendix interpretation. The contract delivers an offer in a form requested by
23 includes “sample” text for terms commonly found in agency the agency and the agency indicates acceptance of the offer. The
contracts. The list of Recommended Contract clauses does not documents that comprise the offer and acceptance are the evidence
include “sample” text for terms that by their nature are highly of the agreement.
negotiable, unique to a particular type of transaction, or descriptive
In a “four-corner” contract, all the provisions are contained within
of an individual agency’s business practice because it is expected
the four-corners of a single document. This type of contract must be
that the wording of those clauses in each contract will vary due to
signed by an authorized representative of the parties. Contract man-
the specific contracting needs of the individual agencies.
agement is sometimes easier when all of the provisions regarding
It is common practice for each contracting entity to want to utilize the duties, obligations and responsibilities of each party is logically
its respective standard terms and conditions, often referred to organized within one document. On the other hand, “four-corner”
as “boilerplate,” in order to provide uniformity across the entity’s contracts require more time to plan and prepare.
transactions. When drafting a contract, care should be taken not to
An alternative to the “four-corner” contract is a layered approach in
automatically adopt terms and conditions, even boilerplate, from
which the solicitation, response, and other documents are incorpo-
another contract without a thorough and independent review of how
rated by reference into or attached to a top level document such as
those terms and conditions relate to the current purchase.
a formally signed agreement or PO. The top level document should
Each agency must ensure that the contract terms suit the particu- be carefully drafted to incorporate all documents that are part of the
lar purchase and are enforceable.356 Purchases made with federal agreement and address any conflicts between them. All final terms
funds, for instance, may have specific contract requirements. Agen- and conditions that vary from either the solicitation or the vendor’s
cies are encouraged to ask federal agencies administering the offer should be specifically identified.
particular grant programs to designate the contract terms required
Depending on the transaction, the PO will be either the contract or
to be included in the State’s subrecipient agreements. Except for
an associated contract document issued to encumber funds for a
contract terms that are contrary to public policy or that may be void,
“four-corner” contract. The PO will generally refer to or incorporate
voidable or severable from a contract, the types of contract terms
either an existing contract or an offer made by a vendor. For exam-
that may be included in a contract are only limited by the creativity
ple, an agency may issue a PO against an existing DIR schedule
of the drafter.
contract to purchase laptop computers. A PO can also be used to
Authority to Contract accept or counter a vendor’s quote for a purchase made under del-
egated authority. The agency should carefully review the terms and
A threshold issue in government contracting is whether an agency
conditions of the incorporated contract or offer to make sure they
has statutory authority to contract. One should not presume or
meet the agency’s needs. The agency may include its own terms
rely on the implied authority of an officer or agency of the state to
and conditions on a PO to supplement the existing contract or to
contract. Only persons having actual authority to act on behalf of the
address unacceptable terms proposed by the vendor.
State can bind the State in a contract. The powers of all state officers
are set by law. All persons dealing with state officers must know the A PO should contain at a minimum the following:
limits of their authority and determine if the contemplated contract
is within their statutory authority. • Agency name and address
• Agency contract or Purchase Order number
Form of the Contract • Date of the order
Evidence of an agreement or contract can be documented in • Term of contract (delivery period after receipt of order or begin-
different formats including, but not limited to, a “four-corner ning and ending dates of service)
contract” and a PO. Each of these forms of contract has advantages
• Contractor’s name, payee/vendor identification number, and
and disadvantages. Determining the most appropriate format should address, including zip code
follow an assessment of the risks involving contract construction or
• NIGP Class/Item code for each item
356
See e.g., TEX. GOV’T CODE § 552.104(c) (providing that a contract provision is
void if it prohibits or otherwise prevents the disclosure of information relating to
• Purchase Category Code
the receipt or expenditure of public or other funds by a governmental body for a • List of contract documents and their order of precedence:
parade, concert, or other entertainment event paid for in whole or part with public
funds).

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Statewide Procurement Division

• The “four-corner” contract or PO with listing of awarded 1. comply with the recommendation; or
items 2. submit to the QAT a written explanation regarding why the
• The original solicitation documents, as modified by addenda recommendation is not applicable to the contract under
review.359
• The proposal submitted by the contractor as modified by
any best and final offer
An agency may not amend a contract for a major information
• The assumptions and exceptions as agreed upon by the resources project with a value of at least 10 million if the contract is
agency and the contractor at least 10 percent over budget or the associated major information
• Listing of awarded items with quantity, unit of measure, and resources project is at least 10 percent behind schedule unless the
unit price with extended totals agency (1) conducts a cost-benefit analysis with respect to canceling
• Signature of authorized/certified purchasing representative or continuing the project and (2) submits the cost-benefit analysis
to QAT.360
Contract Award & Amendment Prior to amending a contract related to a major information
resources project, an agency must notify the governor, lieutenant
Overview governor, speaker of the house of representatives, presiding officer
Once the contract or contract amendment has been finalized, the of the standing committee of each house of the legislature with pri-
agency must determine whether review by an oversight agency is mary jurisdiction over appropriations, and the QAT if:
required and, if applicable, obtain the requisite approval(s) prior
to execution of the contract or amendment. To ensure compli- 1. the total value of the amended contract exceeds or will
ance with applicable procurement law, pre-award due diligence exceed the initial contract value by 10 percent or more; or
checks should also be conducted. Pre-award contract and amend- 2. the amendment requires the contractor to provide consul-
ment compliance checks include confirmation that certain internal tative services, technical expertise, or other assistance in
reviews and approvals have been performed, required disclosure defining project scope or deliverables.361
statements have been completed, and verification that the award to An agency will also provide to the QAT a justification for an amend-
the selected vendor or an amendment to an existing contract is not ment to a contract related to a major information resources project if:
prohibited by law.
1. the total value of the amended contract exceeds or will
Pre-Award Contract and Contract exceed the initial contract value by 10 percent or more; or
Amendment Notifications, Reviews 2. the amendment requires the contractor to provide consul-
& Approvals by Oversight Agencies tative services, technical expertise, or other assistance in
defining project scope or deliverables.362
Major Information Resources Projects
Information regarding the steps involved in initiating, monitoring,
An agency is required to file a Project Plan with the QAT before the completing, and submitting deliverables and contract documents to
agency spends more than 10 percent of allocated funds for a major the QAT for a major information resources project is available on
information resources project.357 the Project Delivery Framework page located on the DIR website363
For each contract for the development or implementation of a major and in the Quality Assurance Team Policies and Procedures Manual
information resources project with a value of at least $10 million, the located on the QAT website.364
agency will

1. submit the proposed terms of the contract to the QAT before 359
TEX. GOV’T CODE § 2054.160(b).
the start of negotiations; and
360
TEX. GOV’T CODE § 2054.1181(j).
361
TEX. GOV’T CODE § 2054.160(c). See also General Appropriations Act, House Bill
2. submit the final negotiated unsigned contract to the QAT for 1, 86th R.S. at Article IX, Section 9.01(f)-(g).
review.358
362
TEX. GOV’T CODE § 2054.160(d). See also General Appropriations Act, House Bill
1, 86th R.S. at Article IX, Section 9.01(h) (providing that if a state agency cancels
a contract for development of a major information resources project, which if
If the QAT makes a recommendation pertaining to the proposed amended would be subject to the requirements of Subsection (f), and issues a
terms of the contract, the agency must either solicitation for identical or similar goods and/or services for development of the
same project, then the contract must be submitted to QAT prior to execution).
TEX. GOV’T CODE § 2054.304.
357 363
The DIR website is located at www.dir.texas.gov.
TEX. GOV’T CODE § 2054.160(a).
358 364
The QAT website is located at www.qat.dir.texas.gov.

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DIR – Statements of Work 3. acknowledge in writing that the agency complied with the
agency’s contract management guide and this Guide in the
Agencies are required to prepare and submit to DIR certain DIR purchase; and
SOW for contracts that exceed $50,000. A DIR SOW executed by an
4. ensure that the agency shall evaluate the contractor’s
agency under a contract for an IT commodity item is not valid and performance based on:
money may not be paid to the contractor under the terms of the DIR
• information prepared by the agency in planning the
SOW unless DIR first signs the DIR SOW.365
procurement that assessed the need for the purchase
together with the specifications for the good or service
Notification of Proposed Assignment of and the criteria to evaluate the responses resulting in
Services Contract an award and contract;
At least 14 days before an agency rejects or approves a contractor's • compliance with the material terms of the contract;
proposed assignment of rights under a services contract, the agency • ability to correct instances of contractual non-compli-
must notify the LBB of the proposed assignment if the contract ance; and
subject to the assignment
• other evaluation criteria presented in the on-line
1. is for a major information resources project; or vendor performance tracking system.369

2. involves storing, receiving, processing, transmitting, dispos- AGENCY VERIFICATION OF COMPLETE

ing of, or accessing sensitive personal information366 in a PROCUREMENT FILE
foreign country.367
Prior to contract award, the agency's contract manager or procure-
ment director370 must:
Notification of Contract Extension
At least 30 days prior to the execution of an extension to a contract 1. review the contents of the contract file for the contract,
including the checklist, to ensure that all documents required
beyond the base term and any optional extensions provided in the
by state law or applicable agency rules are complete and
contract, the agency must notify the LBB by uploading required
present in the file; and
information to the LBB contracts database on a form prescribed by
2. certify in a written document to be included in the contract
the LBB.368
file that the review required under Subdivision (1) was
completed.371
Pre-Award Contract and Contract
Amendment Compliance Checks AGENCY VERIFICATION OF VENDOR ASSESSMENT
Agency Reviews and Approvals PROCESS
For procurements subject to Chapter 2261 of the Texas Government
AGENCY VERIFICATION OF USE OF BEST VALUE Code, the agency's procurement director, prior to contract award,
STANDARDS
must review the process and all documents used by the agency
The Contract Manager or Procurement Director of the agency must to assess each vendor who responded to the solicitation. The
procurement director must certify in writing that:
1. approve each agency contract for which the agency is
required to purchase goods or services using the best value 1. the agency assessed each vendor's response to the
standard; solicitation using the evaluation criteria published in the
2. ensure that, for each contract, the agency documents the solicitation or, if applicable, the written evaluation criteria
best value standard used for the contract; established by the agency; and

365
TEX. GOV’T CODE § 2157.0685; 1 TEX. ADMIN. CODE § 212.41.
366
The term "sensitive personal information" has the meaning assigned by Section
521.002 of the Business & Commerce Code. TEX. GOV’T CODE § 2262.056(a).
367
TEX. GOV’T CODE § 2262.056(c).
368
General Appropriations Act, House Bill 1, 86th R.S. at Article IX, Section 17.10(e).
Required information for the contract extension includes, but is not limited to,
the following: the cost of the contract; the duration of the contract; the reason 369
34 TEX. ADMIN. CODE § 20.217(a).
for the extension of the contract; and a plan to ensure that the contract can be 370
For the required certification, an agency's contract manager or procurement
completed within the extension period, signed by the executive director or other director may delegate to a person in the agency's procurement office. TEX. GOV’T
similar agency or institution administrator, or designee of the agency or institution. CODE § 2262.053(g).
Additional reporting requirements may also apply. 371
TEX. GOV’T CODE § 2262.053(f).

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2. the final calculation of scoring of responses was accurate.372 AGENCY SIGNATURE - CONTRACTS WITH A VALUE
EXCEEDING $1 MILLION
In addition, an agency must justify in writing any change in the
scoring of a vendor that occurs following the initial assessment and An agency may enter into a contract for the purchase of goods or
scoring of responses. The written justification must be reviewed by services that has a value exceeding $1 million only if the governing
the agency's procurement director. The procurement director must body of the agency approves the contract and the approved
certify in writing that the change in scoring was appropriate.373 The contract is signed by the presiding officer of the governing body. 378 If
required written certification or justification must be placed in the the agency is not governed by a multi-member governing body, the
procurement file.374 officer who governs the agency is required to approve and sign the
contract.379 The approval and signature authority for contracts with
If an agency awards a contract to a vendor who did not receive the a value exceeding $1 million may be delegated by the governing
highest score in the assessment process certified by the procure- body or governing official of the agency to the executive director or
ment director, the agency must state in writing in the contract file the a deputy executive director of the agency.380
reasons for making the award.375
AGENCY VERIFICATION - CONTRACTS WITH A
AGENCY VERIFICATION OF VTPS REPORTING VALUE EXCEEDING $5 MILLION
COMPLIANCE An agency that develops a contract for the purchase of goods or
If the value of the contract exceeds $5 million, an agency may not services that has a value exceeding $5 million is required to have
extend the contract until the agency reports to the VPTS the results its contract management office or procurement director verify in
of each review of the vendor's performance conducted at least once writing that the solicitation and purchasing methods and contractor
each year during the term of the contract and at each key milestone selection process comply with state law and agency policy.381
identified for the contract, as applicable.376 Furthermore, information on any potential issue that may arise in
the solicitation, purchasing, or contractor selection process must be
AGENCY VERIFICATION OF CONTRACT EXTENSION submitted to the governing body of the agency or the governing
COMPLIANCE official of the agency if the agency is not governed by a multimember
Agencies must minimize the use of extensions that extend a contract governing body.382
beyond the base term and any optional extensions provided in a
contract. An agency may not use funds appropriated elsewhere in Agency Review of Required Disclosures
the General Appropriations Act to pay for an extension to an existing
SAO NEPOTISM DISCLOSURE STATEMENT FOR
agency contract beyond the base term and optional extensions pro-
PURCHASING PERSONNEL
vided for in that contract unless all of the following conditions are met:
For contracts that are valued at $1 million or more, all purchasing
1. The extension is limited in duration and cost to not more than personnel working on the contract must disclose the relationship
one additional option period, as defined in the contract, to (if any) with the selected vendor (or any employee, stockholder,
address the immediate operational or service delivery needs.
contractor, etc.) to the administrative head of the agency on a form
If a contract does not contain a defined option period, the
prescribed by SAO.383 The SAO Disclosure Statement for Purchasing
extension is limited to one year.
Personnel is located on the SAO website.384
2. The agency provides notice of the extension, at least 30
days prior to execution of the extension, by uploading
required information to the LBB contracts database on a
form prescribed by the LBB.377

372
TEX. GOV’T CODE § 2261.0525(a). A state agency's procurement director may
delegate to a person whose position in the agency's procurement office is at
least equal to the position of contract manager the certification authority under
this section if the agency has met the conditions prescribed by the comptroller
under Section 2262.053(h) of the Texas Government Code. TEX. GOV’T CODE § 378
TEX. GOV’T CODE § 2261.254(c).
2261.0525(c). 379
TEX. GOV’T CODE § 2261.254(c).
373
TEX. GOV’T CODE § 2261.0525(b). 380
TEX. GOV’T CODE § 2261.254(d).
374
TEX. GOV’T CODE § 2261.0525(d). 381
TEX. GOV’T CODE § 2261.255.
375
TEX. GOV’T CODE § 2261.054. 382
TEX. GOV’T CODE § 2261.255.
376
TEX. GOV’T CODE § 2155.089(b-1). 383
TEX. GOV’T CODE § 2262.004.
377
General Appropriations Act, House Bill 1, 86th R.S. at Article IX, Section 17.10(e). 384
The SAO website is located at www.sao.texas.gov.

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TEC DISCLOSURE OF INTERESTED PARTIES SAM CHECK

(FORM 1295) The Contract Developer (purchaser) must check the SAM (System
Vendors are required to complete the Form 1295 Certificate of Inter- for Award Management) database to verify that the vendor is not
ested Parties which is located on the TEC website for certain con- excluded from grant or contract participation at the federal level.
tracts with a value of $1 million or more, that require an action or A contract cannot be awarded to a vendor named on the U.S.
vote by a governing body, or are for services that would require a Treasury Department, Office of Foreign Assets Control’s master list
person to register as a lobbyist under Chapter 305 of the Texas Gov- of Specially Designated Nationals & Blocked Persons (with limited
ernment Code.385 Before contract award, the vendor must submit exceptions set forth in the Order).391
to the agency a completed and signed form with the certificate of
filing number and date.386 The Contract Developer then acknowl- IRAN, SUDAN, & FOREIGN TERRORIST
edges the Form 1295 at the TEC website. It is best practice to ORGANIZATION CHECK
include a reference to Form 1295 in the solicitation in order to allow Governmental entities392 may not contract with a company doing
the vendor to gather the pertinent information early in the process. business with Iran, Sudan, or a foreign terrorist organization.393
Prior to award, the Contract Developer (purchaser) must check
PROCUREMENT AND CONTRACT MANAGEMENT the divestment lists394 to determine if the potential awardee is in
CONFLICT OF INTEREST DISCLOSURE violation of this requirement. The divestment lists are maintained
Each state agency employee or official who is involved in by the Texas Safekeeping Trust Company and posted to the CPA
procurement or in contract management for a state agency shall website.395 If the business is in violation, the contract may not be
disclose to the agency any potential conflict of interest specified awarded to that vendor.
by state law or agency policy that is known by the employee or
official with respect to any contract with a private vendor or bid BOYCOTT ISRAEL CHECK
for the purchase of goods or services from a private vendor by the If the contract is (1) between a governmental entity396 and a com-
agency.387 A state agency employee or official is required to disclose pany397 with 10 or more full-time employees and (2) has a value
any potential conflict of interest specified by state law or agency of $100,000 or more that is to be paid wholly or partly from
policy that is known by the employee or official at any time during public funds of the governmental entity, then the governmen-
(1) the procurement process, from the initial request for bids for tal entity may not contract with a company for goods or ser-
the purchase of goods or services from a private vendor until the vices unless the contract contains a written verification from
completed final delivery of the goods or services, or (2) the term of the company that it does not boycott Israel and will not boycott
a contract with a private vendor.388

Vendor Compliance Verifications 391

Executive Order 13224 – Blocking Property and Prohibiting Transactions with
Persons Who Commit, Threaten to Commit, or Support Terrorism prohibits U.S.
DEBARMENT CHECK individuals or entities from making any contribution of funds to, or for the benefit
of, entities or persons named on the U.S. Treasury Department, Office of Foreign
The Contract Developer (purchaser) must check the debarred ven- Assets Control’s master list of Specially Designated Nationals & Blocked Persons
dor list posted on the CPA website389 to establish that the vendor has (with limited exceptions set forth in the Order).
392
TEX. GOV’T CODE § 2252.001(2) (defining the term “governmental entity” to
not been debarred by SPD. An agency may not award a contract to include the state; a municipality, county, public school district, or special-purpose
a debarred vendor.390 district or authority; a district, county, or justice of the peace court; a board,
commission, department, office, or other agency in the executive branch of state
government, including an institution of higher education; the Legislature or a
legislative agency; and the Supreme Court of Texas, the Texas Court of Criminal
Appeals, a court of appeals, or the State Bar of Texas or another judicial agency
having statewide jurisdiction.).
393
TEX. GOV’T CODE § 2252.152.
394
These lists are maintained by the Texas Safekeeping and Trust Company in
accordance with TEX. GOV’T CODE § 2252.153.
385
The Texas Ethics Commission website is located at www.ethics.state.tx.us. See 395
The CPA website is located at Comptroller.Texas.Gov.
Appendix 3 for additional information. 396
TEX. GOV’T CODE § 2271.001(3) (refers to TEX. GOV’T CODE § 2251.001 which
386
TEX. GOV’T CODE § 2252.908. defines “governmental entity” to mean a state agency or political subdivision of
387
TEX. GOV’T CODE § 2261.252(a). this State).
388
TEX. GOV’T CODE § 2261.252(a-1). 397
The term "company" has the meaning assigned by Section 808.001 of the Texas
389
The CPA website is located at Comptroller.Texas.Gov. Government Code, except that the term does not include a sole proprietorship. TEX.
390
TEX. GOV’T CODE § 2155.077. GOV’T CODE § 2271.001(2).

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Israel during the term of the contract.398 Prior to award, the Contract FRANCHISE TAX CHECK
Developer (purchaser) must check the divestment lists399 to deter-
It is recommended that the Contract Developer (purchaser) search
mine if the potential awardee is in violation of this requirement.
the vendor’s franchise tax account status using the online Certificates
The divestment lists are maintained by the Texas Safekeeping Trust
of Account Status Directory located on the CPA website.404 Not all
Company and posted to the CPA website.400 If the potential awardee
vendors are required to pay franchise tax. The Texas franchise tax is
is on the list, the contract may not be awarded to that vendor.
a privilege tax imposed on each taxable entity formed or organized
in Texas or doing business in Texas. CPA is required by law to forfeit
WARRANT/PAYMENT HOLD CHECK
a company’s right to transact business in Texas if the company has
The Contract Developer (purchaser) must check warrant hold status not filed a franchise tax report or paid a franchise tax required under
of the vendor in the following circumstances: (1) transaction involves Chapter 171 of the Tax Code.405 If the corporate privileges are forfeited,
a written contract, (2) payment is made with local funds, or (3) pay- the entity will be denied the right to sue or defend itself in a Texas
ment card purchase is over $500.401 The agency cannot proceed court and each director or officer will be liable for the debt of the
with a purchase made with local funds or a payment card purchase entity.406 It is recommended that the Contract Developer (purchaser)
over $500 until the warrant hold has been released. seek assistance from agency counsel prior to proceeding with an
For transactions involving a written contract,402 the warrant hold award to a vendor that does not have the right to transact business
check must be performed not earlier than the seventh day before in Texas.
and not later than the date of contract execution. If the vendor is on
warrant hold, the agency may not enter into a written contract with
Preparation of Access to Agency Premises
the person unless: Prior to contract award, the Contract Manager may initiate certain
activities to facilitate both parties’ timely performance under
1. the contract requires the agency’s payments under the con-
the contract. For instance, the Contract Manager may notify
tract to be applied directly toward eliminating the person’s
internal personnel of the pending contract award so that end user
debt or delinquency, and
personnel and, if assigned, the project manager may prepare for the
2. the requirement described in paragraph (1) specifically applies
commencement of the contract. In addition, the Contract Manager
to any debt or delinquency, regardless of when it arises.403
may coordinate communications between the contractor and the
Payments made through the Uniform Statewide Accounting agency that are necessary for the contractor’s performance under
System (USAS) are automatically checked for holds and the the contract. For instance, before gaining access to the agency’s
system identifies payments issued to persons with outstanding premises, the contract may require that contractor personnel sign
state debt. non-disclosure agreements and provide certain information that
will be used by the agency to issue building identification badges,
assign agency equipment and onsite workspace, or conduct criminal
background investigations.

398
TEX. GOV’T CODE § 2271.002.
399
TEX. GOV’T CODE § 808.051.
400
The CPA website is located at Comptroller.Texas.Gov.
401
Restricted Expenditures – Persons Indebted to State policy located in eXpendit
State Purchase Policies posted on the CPA website.
402
A "written contract" does not include a contract the payments for which must be
made through CPA's issuance of warrants or initiation of electronic funds transfers
under Sections 404.046, 404.069, or 2103.003 of the Texas Government Code. 404
The CPA website is located at Comptroller.Texas.Gov.
TEX. GOV’T CODE § 2252.903(e). 405
TEX. TAX CODE § 171.251.
403
TEX. GOV’T CODE § 2252.903. 406
TEX. TAX CODE § 171.255.

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Contract & Amendment Notifications Texas Register Notice of Award

Solicitations using certain procurement methods must be advertised
Overview in the Texas Register.408 For procurement methods not addressed in
Depending on the transaction, the agency may be required to this Guide, it is recommended that agencies refer to their enabling
provide one or more notifications of the contract award. These legislation to determine if publication in the Texas Register is
notifications may be in the form of a notice of award published to required. A copy of the Texas Register notice must be placed in the
the ESBD or Texas Register, a report to an oversight agency, or a procurement file. Texas Register posting requirements are in addi-
website posting. Agencies must timely comply with all required tion to ESBD posting requirements.
notifications.
Major Information Resources Project
ESBD Notice of Award Notification
After the contract is awarded, a notification of award must be posted An agency must notify QAT within 10 business days when the agency
to the ESBD if the contract is expected to exceed $25,000.00.407 The awards a contract for a major information resources project that is
ESBD notice of award includes the following information: equal to or greater than $10 million.409
• Requisition Number (as it was listed on the ESBD solicitation
posting) LBB Reporting
• Class/Item Code Contracts that have a value that exceeds certain thresholds must
be reported to the LBB. The submission must include any required
• Agency Name
documentation such as the solicitation documents, contract
• Response Title (as it was listed on the ESBD solicitation posting) documents, and attestation letters.410 These reporting requirements
• Dollar Amount Awarded are fulfilled through the LBB Contracts Database located on the
• Response Status (e.g., full award, partial award, multiple award, LBB website.411 The database is the single point of data entry for all
canceled) contract information that state entities are required to report to the
• HUB Certification Status LBB either by statute or the General Appropriations Act. The LBB
Contract Reporting Guide412 provides details on the types of contracts
• Vendor Name
that must be reported to the LBB via the contracts database.
• Vendor Address

Depending on the procurement, an agency may also notify choose

to notify each respondent in writing of the non-selection. The
Contract Developer must maintain proof of the ESBD posting in the
procurement file.

408
See e.g., TEX. GOV’T CODE § 2166.253.
409
General Appropriations Act, House Bill 1, 86th R.S. at Article IX, Section 9.02(c)
(3).
410
TEX. GOV’T CODE § 322.020 (The requirement to provide contract and solicitation
attachments does not apply to a university system, an institution of higher
education, the Texas Department of Transportation, or the Health and Human
Services agencies.).
411
The LBB website is located at www.lbb.state.tx.us.
407
TEX. GOV’T CODE § 2155.083(k)(2); 34 TEX. ADMIN. CODE § 20.214. See also 34 412
http://www.lbb.state.tx.us/Documents/Instructions/Contracts/Major_Contract_
TEX. ADMIN. CODE § 20.114. Reporting2015.pdf.

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The chart below shows the reporting requirements for contracts that exceed certain dollar thresholds.

LBB Reporting Requirements

Dollar
>$14,000 >$50,000 >$100,000 >$1M >$10M
Threshold
• Construction1 Major • Non-Competitive/
All Contract All Contract
Type • Professional Services2 Information Sole Source6
Types4 Types8
• Consulting Services3 Systems 5 • Emergency7

Due prior to first

Due prior to
payment but no later
Within 30 Days first payment
Within 10 days than 30 days after
Within 10 days of award or of contract but no later
Deadline of award or contract execution
modification execution or than 30 days
modification Due 48 hours
modification after contract
after first payment
execution
(Emergency)

TABLE NOTES
1
TEX. GOV’T CODE § 2166.2551. 5
TEX. GOV’T CODE § 2054.008.
2
TEX. GOV’T CODE § 2254.006. 6
General Appropriations Act, House Bill 1, 86th R.S. at Article IX, Section 7.12(b)(2)(B).
3
TEX. GOV’T CODE § 2254.0301. 7
General Appropriations Act, House Bill 1, 86th R.S. at Article IX, Section 7. 12(b)(2)(A).
4
General Appropriations Act, House Bill 1, 86th R.S. at Article IX, Section 7.04. 8
General Appropriations Act, House Bill 1, 86th R.S. at Article IX, Section 7. 12(b)(1).

Additional information on exemptions, reporting requirements, and For agency contracts for the purchase of goods or services from
attestation letters required under the General Appropriations Act is a private vendor that are valued at less than $15,000, the agency
posted on the LBB website.413 may post the required information monthly instead of upon award
of contract.416 Expressly excepted from the agency website posting
Agency Website Postings requirement are contracts posted to the LBB contracts database,
memoranda of understanding, interagency contracts, interlocal
Certain Agency Contracts
agreements, contracts for which there is not a cost, and institution
For contracts not posted to the LBB contracts database, an agency of higher education contracts valued at $15,000 or less and paid
must post the following information about each private vendor con- with money other than funds appropriated to the institution.417
tract to the agency’s website:

1. the contract until the contract expires or is completed;

DIR Statements of Work
2. the statutory or other authority under which a contract that Upon execution of the DIR SOW, each DIR SOW entered into by the
is not competitively bid under is entered into without compli- agency must be posted on the agency’s internet website as follows:
ance with competitive bidding procedures; and
1. post the DIR SOW in its entirety, subject to the exceptions in
3. the request for proposals related to a competitively bid con- the Texas Public Information Act and opinions of the Office
tract until the contract expires or is completed.414 of Attorney General;

The agency must redact the following from the posted contract: 2. maintain the posting, at a minimum, throughout the term of
the DIR SOW, including any renewals or extensions;
1. information that is confidential under law, 3. maintain a listing of the DIR SOWs in alphabetical order by
2. information that the OAG has determined can be excepted vendor name or numerical order by contract number in a
from public disclosure under exceptions to Chapter 552 of central location; and
the Texas Government Code, commonly known as the Texas 4. maintain a current agency contact person with related
Public Information Act, and email address and phone number to contact for information
3. the social security numbers of any individuals.415 regarding the DIR SOW.418

413
The LBB website is located at www.lbb.state.tx.us. 416
TEX. GOV’T CODE § 2261.253(b).
414
TEX. GOV’T CODE § 2261.253. 417
TEX. GOV’T CODE § 2261.253(d) and (g).
415
TEX. GOV’T CODE § 2261.253 (e) and (f). 418
1 TEX. ADMIN. CODE § 212.41(c).

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 Statewide Procurement Division

Contracts Exceeding $100,000 Protest of Award

Each agency, other than an institution of higher education, that
Each agency must adopt rules that provide an unsuccessful ven-
receives an aggregate of $175 million or more in the General Appro-
dor with the opportunity to protest procurement actions. 420 When a
priations Act for a state fiscal biennium shall post on a generally
protest is received, the agency must follow its rules to assess the
accessible website maintained by or for the agency a listing and
merits of the vendor’s protest and correct any unlawful procurement
description of all contracts with vendors that have a value exceed-
actions.  Agencies should never assume that protests are frivolous;
ing $100,000 that the agency has entered into and that are currently
it is expected that most vendors would be reluctant to file a protest
being performed or for which performance has not yet begun.419
against an agency with which it wants to conduct business unless they
believe that egregious errors occurred during the solicitation process.
Debriefings Even if the protest is not sustainable under the agency’s protest rules,
an agency should proactively make appropriate improvements to
The Contract Developer, in accordance with agency procedures,
its procurement practices if any shortcomings are uncovered during
may conduct a “debriefing” meeting at the request of an unsuccess-
the protest.
ful vendor. In preparation for the meeting, the Contract Developer
must be prepared to discuss the strengths and weaknesses of the
vendor’s response relative to the advertised evaluation criteria as
well as how the agency’s decision complied with applicable pro-
curement law and the published solicitation.

It is not uncommon for several vendor representatives to attend the

meeting, which may be conducted by phone conference. A list of the
vendor attendees should be requested in advance of the scheduled
meeting. If the vendor’s legal representative will attend the meeting,
the Contract Developer should promptly notify agency legal counsel.

Debriefing meetings are limited to a discussion of the vendor’s

response — the Contract Developer must not engage in discussions
about how the vendor’s response compared to other responses.
Care must be taken not to divulge confidential information regard-
ing a competitor’s response.

Debriefing meetings are beneficial to both the vendor and the

agency. During the debriefing meeting, the vendor may obtain
information as to why its response was unsuccessful so that it may
apply “lessons learned” in future procurement initiatives with the
State. Similarly, a debriefing meeting provides an opportunity for the
agency to obtain valuable insight, from the vendor’s perspective, of
the procurement process.

419
TEX. GOV’T CODE § 2054.126(d)(4). TEX. GOV’T CODE § 2155.076.
420

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Statewide Procurement Division

CONTRACT MANAGEMENT
Overview agency are protected. The Contract Manager must have a thorough
understanding of all components of the solicitation and contract.
The final step in the procurement process is contract management. The Contract Manager should also be experienced with the type and
The objective of contract management is to ensure the contract is size of the procurement. The extent of contract administration will
performed satisfactorily and the responsibilities of both parties — not be the same for all contracts. The level of contract administra-
the agency and the contractor — are properly discharged. Effective tion should be consistent with the complexity and level of risk of the
contract management prevents, minimizes and resolves problems contract, the contract term, and dollar value.
and potential claims and disputes. For contract management to be
successful, the Contract Manager must be involved throughout the All guidance provided to a contractor must be within the scope
Procurement Cycle. of the contract. Agencies must be careful to not impose additional
requirements upon the contractor or manage the contractor’s oper-
ations to the extent that the contractor is relieved of its responsibility
Transition from Contract Developer to to perform.
Contract Manager
The primary responsibilities of the Contract Manager include the
One of the first post-contract award activities is for the Contract following:
Developer to transition the procurement to the Contract Manager.
For relatively simple and routine procurements, like purchases using • Participating with the procurement team in solicitation devel-
the set aside programs, Texas SmartBuy, or informal bidding, the opment and the review of contract documents;
transition activities may be documented as an agency procedure. • Serving as the primary point of contact for agency communica-
tion with the contractor regarding all matters pertaining to the
For high-risk and/or high-dollar procurements, it is best practice for contract;
internal staff to hold a post-contract award meeting. At a minimum, • Managing any state property used in contract performance,
the meeting attendees should include the Contract Developer, the (e.g., computers, telephones, identification badges);
Contract Manager, end-users, and, if assigned, the project manager.
• Implementing a quality control and contract monitoring process;
During this meeting, the Contract Developer must ensure that the
• Monitoring the contractor’s progress and performance to
Contract Manager, as well as other stakeholders, have an under-
ensure goods and services procured conform to the contract
standing of the key procurement activities that have occurred prior requirements and keep timely records of findings;
to contract execution.
• Consulting with agency legal counsel in a timely manner to
To the extent that the Contract Manager did not participate in pre- address any legal concerns and/or issues;
contract award procurement activities, the Contract Developer • Managing, approving, and documenting any changes to the
should facilitate the transition of documents and foundational contract through the amendment process authorized by the
knowledge of the solicitation and contract. Specifically, the Contract terms of the contract;
Developer must provide a thorough review of the scope of work • Inspecting and approving the products and/or services by sub-
and relay the contract terms and conditions, agreed-upon inspec- mitting a written document accepting the deliverables or obtain
tions and acceptance criteria, extension and renewal potential, and documentation from the end users responsible for receipt that
articulated remedies. After the agency team has been briefed on the inspection and approval have been completed;
events preceding the contract award, it is incumbent on the Contract • Verifying accuracy of invoices and authorizing payments con-
Manager to begin the administration of the contract. sistent with the contract terms;
• Monitoring the contract budget to ensure sufficient funds are
Contract Manager Responsibilities available throughout the term of the contract;
• Identifying and resolving disputes with the contractor in a
The Contract Manager is responsible for ensuring that the con- timely manner;
tract requirements are satisfied, that the goods and services are
• Exercising state remedies, as appropriate, when a contractor’s
delivered in a timely manner, and that the financial interests of the performance is deficient;

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 Statewide Procurement Division

• Maintaining appropriate records in accordance with the records assessment are components of successful contract management. To
retention schedule; aid agencies in the development of a procurement planning tool and
• Confirming all products and/or services have been delivered risk assessment model, SPD has implemented two National Associa-
and delivery is completed prior to the expiration date of the tion of State Procurement Officials (NASPO) concepts: the Contract
contract; and Administration Plan,423 also known as an Acquisition Plan, and the
• Performing contract closeout processes by ensuring the con- Quality Assessment Plan (QAP).424
tract file contains all necessary contract documentation, vendor
performance reported to VPTS, and document lessons learned. The Acquisition Plan is essentially a roadmap for achievement of the
agency’s business needs. The Acquisition Plan must be utilized early
Contract Managers are not authorized to in the procurement process and will be provided by the Contract
Developer to the Contract Manager during the post-award meeting
• Allow the contractor to commence work before the contract is
fully executed; to ensure a smooth transition from contract development to contract
management. A sample Acquisition Plan is located in Appendix 6.
• Change the scope or extend the term of the contract without
complying with the formal amendment process prescribed by The QAP, on the other hand, is a tool that assists the Contract
the contract; Manager in the assessment of risk and the monitoring of deliver-
• Authorize the contractor to perform work that is not specifically ables following contract execution. QAP tools include contract moni-
described in and funded by the express terms of the contract; or toring schedules and findings reports. Sample QAP tools are located
• Allow the contractor to recover costs incurred prior to the effec- in Appendix 24.
tive date of the contract or recover costs above the budget limit
set by the contract. The analysis in risk assessment requires the following two
estimates:
The number of participants in the contract administration process will
1. The likelihood of the event is estimated (e.g., rare to almost
vary from one to many depending on the size, level of risk and com- certain).
plexity of the contract. Early in the procurement process, the agency
2. The consequence of the event is estimated (e.g., negligible
should identify staff, in addition to the assigned Contract Manager,
impact to extreme).425
who will participate in contract management. The assignment of roles
and responsibilities should be documented in the contract file. Various methodologies may be used by agencies to assess risk.

An agency must include in the procurement file for each of its con-
Certain
5

tracts a checklist to ensure the agency's compliance with state

laws and rules relating to the acquisition of goods and services Medium High
by the agency.421 The Contract Manager is responsible for main-
LIKELIHOOD
4

taining a master contract file of records produced throughout

the life of the contract. In the event the contract documents are
not maintained in a central repository, the Contract Manager will
3

maintain a list identifying the location of the contract documents.

A sample Master Contract File Checklist is located in Appendix 26. Low Medium
2

Planning and Risk Assessment Tools

Rare
1

Risk is the possibility that an event will occur and adversely affect 1 2 3 4 5
the achievement of objectives.422 Risks are inherent in all the stages
Negligible

Extreme

of the procurement process. Appropriate planning and effective risk CONSEQUENCE

421
TEX. GOV’T CODE § 2262.053(a). An agency may develop its own contract file
checklist based on the procurement and contracting needs of that agency, 423
National Association of State Procurement Officials, State and Local Government: A
provided that the checklist developed by the agency is consistent with CPA's model Practical Guide 222 (Lexington 2nd ed. 2015).
contract file checklist and meets any requirements established by CPA rule. TEX. 424
National Association of State Procurement Officials, State and Local Government: A
GOV’T CODE § 2262.053(e). Practical Guide 222 (Lexington 2nd ed. 2015).
422
National Association of State Procurement Officials, State and Local Government: A 425
National Association of State Procurement Officials, State and Local Government: A
Practical Guide 71 (Lexington 2nd ed. 2015). Practical Guide 72 (Lexington 2nd ed. 2015).

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Statewide Procurement Division

Risk models may assess risk associated with each contract that is a weights may also be designed to ensure statutory or policy require-
part of the Contract Manager’s workload as well as risk associated ments. For example, if the statute requires a site visit every three
with each deliverable that is to be received from the contractor. An years, the assigned weight would be indicative of the period since
effective risk assessment model will focus monitoring resources on the last site visit.
contracts with the highest risk of noncompliance.
Next, the Contract Manager will rate each contractor on the risk ele-
The first step in risk assessment is to identify the risk factors. Risk ments. Consider using either a five point scale, where 5 is the high-
factors are indicators that the contract or project objectives will not est risk and 1 is the lowest risk, or a three point scale, where 3 is high
be achieved. risk, 2 is medium risk and 1 is low risk.

General risk factors include, but are not limited to, the following: It is important to note that the risk assessment is a dynamic process
that should be updated regularly to reflect the results of monitoring
• The contractor’s previous experience with the type of work to
visits, reviews of payment vouchers, desk reviews, etc. For example,
be performed;
if a contractor has fallen significantly behind schedule in delivering
• The contractor’s past performance (and past performance of services to the targeted population, the risk assessment should
similar contractors);
be updated to indicate the elevated risk and this impacts how the
• The dollar value of the contract; contract is monitored in the future. Likewise, if a contractor is well
• Reimbursement methodology (e.g., fixed price, time and mate- ahead of schedule in delivering services to the targeted population,
rials, cost reimbursement); the risk assessment should be updated to indicate the lower level
• Acquisition complexity (e.g., office supplies, temporary staff, of risk.
design/build/implementation project, outsourcing project);
Sample Risk Assessment. The agency has contracts with many
• Acquisition involves (agency and/or contractor) confidential
contractors for providing the same service. Only three contractors
and/or propriety information;
are rated in this example. Typically, there will be many different risk
• Acquisition involves products or services that are relatively new elements. For this example, only the following three risk elements
in the marketplace;
are used: dollars, past performance, and experience.
• Acquisition involves the use of technology or implementation of
processes that are new to the agency; 1. Dollars:
• Acquisition has an interdependency with other contracts; • 40 percent of the contractors receive less than
$100,000 from the agency per year.
• Acquisition has statewide impact (e.g., involves large number
of constituents, a vulnerable client population); • 50 percent receive between $100,000 and $250,000.
• Findings from monitoring efforts, such as the variance between • 10 percent receive more than $250,000.
expected and actual performance; 2. Experience:
• Turnover in key personnel of the agency and/or contractor; • High Risk – the contractor has never done this type of
• Significant problems with payment requests; work before.
• Results of monitoring visits with the same contractor that are • Medium Risk – the contractor has contracted with the
completed by other divisions within the same agency or other State before but not for this type of work.
agencies; • Low Risk – the contractor has previously contracted
• The length of time since the last monitoring activity; with the State for the same type of work.
• The agency personnel experience with the product provided or 3. Past Performance: For this particular assessment, the agency
the type of work to be performed; and has determined that the contractor is considered high risk if
the contractor has at least one significant finding from a prior
• Available level of effort to support the monitoring activities
monitoring or three less significant findings.
(e.g., Contract Manager workload).

After the risk factors are identified, the Contract Manager will assign
weights to each factor. Weights describe how significant each factor
is in identifying the contracts that should be monitored. However,

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Example
Risk Assessment Analysis

Dollars Experience Past Performance

Contractor Risk x Risk x Risk x Total Risk

Amount Risk Weight Results Risk Weight Results Risk Weight
(0.2) (0.5) (0.3)

Held .6 +
previous 3 minor .5 +
#1 $300K 3 .6 1 .5 2 .6
contract findings .6 =
with state 1.7

.2 +
New –
New to type 1.5 +
#2 $75K 1 .2 3 1.5 no 1 .3
of work .3 =
findings
2.0

Previous
Used before .4 +
year
– but not for 1.0 +
#3 $125K 2 .4 2 1.0 finding 3 .9
this type of .9 =
regarding
work 2.3
safety

The contractors with the highest risk level must be monitored more performance requirements and administrative procedures agreed in
closely. In this example, Contractor #3 has the highest risk, followed the contract. Care should be taken to ensure that discussions that
by Contractor #2 and #1, respectively. Contractor #3 has been used occur during the post award conference do not result in performance
before and there was only one finding in regard to safety. This is expectations that do not align with the terms of the contract. A
the key area that requires close monitoring during the contract. The sample post award conference agenda is located in Appendix 25.
example can also be used for single contractors to focus on specific
The Contract Manager should decide if a post award conference
areas of risk within a contract and to assist agencies in determining
is necessary. For less complex, low risk, low-dollar value contracts,
which areas to monitor.
a telephone call with the contractor may be sufficient. During the
telephone conversation, the agency should review the major points
Post Award Contractor Conference of the contract with the contractor, such as the value of the contract,
A post award conference is a meeting scheduled by the Contract major performance milestones, deliverables, reports, meetings) and
Manager which includes the contractor and agency stakeholders. time and place of delivery. Factors used to determine whether a
Conducted soon after the contract is awarded, the conference is post award conference is appropriate include:
an orientation for the contractor to ensure a clear and mutual
• Type of contract;
understanding of all contract terms and conditions, and the respec-
• Level of risk associated with the contract;
tive responsibilities of all parties. Although the contractor and the
agency personnel should already be fully aware of the contract • Value and complexity;
requirements, the post award conference ensures that anyone • Length of contract, period of performance and/or delivery
involved directly in the contract administration process understands requirements;
all contract performance requirements. • Procurement history of the products or services required and
expertise of the contractor;
Not every contract requires a formal post award conference, but
• Urgency of delivery schedule;
there should be some form of discussion between the contracting
parties after award to ensure that all parties are aware of the • Agency’s prior experience with the contractor;

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Statewide Procurement Division

• Any special or unusual contract requirements; and activity reports and financial reports. A Contract Manager should
• Any special or unusual payment requirements. also review VPTS reports filed by other agencies for the contractor.

Progress Reports. Progress reports describe what has been

Monitoring Methods accomplished over time. Progress reports assist the contractor in
correcting or reevaluating the work being performed. These types
Overview of reports work best when they are tracking deliverables tied to spe-
Monitoring the contractor’s performance is a key function of proper cific milestones, so that progress can be documented as contract
contract administration. The purpose is to ensure that the contractor deliverables are completed.
is performing all contract obligations and for the agency to be aware
of and address any developing problems or issues. Status Reports. Status reports describe achievement or current
standing. A status report should be consistent with the organizational
The Contract Manager will use QAP tools as an aid in determin- structure of the scope of work (i.e. phases, segments, deliverables
ing which monitoring method is appropriate. Small dollar value or and products). It should clearly identify what work is completed and
less complex contracts normally require little, if any, monitoring. what remains pending and how the status of those deliverables
However, that does not preclude more detailed monitoring if it is compares to the contract schedule. Only work that has been verified
deemed necessary by the agency. Large dollar contracts may need as completed or accepted should be categorized as complete.
little monitoring if the items or services purchased are not complex,
and the agency is comfortable with the contractor’s performance If there are any unresolved issues that the agency is contractually
and the level of risk associated with the contract. obligated to resolve, those issues should be included in the status
report and a resolution should be requested. If the scope of work
Agencies should implement a monitoring program that has well- has changed during the contract (by written contract amendment),
defined follow-up actions. Follow-up is essential as a problem will care should be taken that status reports track the original contract
not correct itself simply by identifying it in a monitoring report. The schedule, not a revised contract schedule, unless the amendments
results for the monitoring efforts should be periodically reviewed by provides for a revised contract schedule. If status is tracked against
the Contract Manager to a revised schedule, there is a risk that the schedule will continually
change and the status report will be rendered meaningless.
• ensure corrective actions have been taken,
• identify common problem areas that might require training, and Activity Reports. Activity reports describe any activity on the
• improve contract requirements for future contracts. project; project activity is not the same as a status report. A project
may have a great deal of activity without making substantive prog-
Agencies may select from different monitoring methods includ- ress. On the other hand, activity reporting can be a core feature
ing desk reviews, site visits, and third-party monitoring, which are of contract management. For example, a contractor payment in an
discussed in more detail in this section. Other monitoring methods outsourcing contract may be based on the number of completed
include status telephone calls, expenditure document review, spot transactions. In this example, activity reporting is critical to contract
audits, and scheduled audits. administration.

Telephone calls and meetings must be substantiated in writing and Financial Reports. Financial reports include financial statements,
maintained as part of the contract file. Such documentation must timesheets, and similar data, that substantiates the contractor’s
include the date and time that phone calls or meetings occurred financial resources and ability to perform.
as well as a summary of topics discussed (e.g., meeting minutes)
including pending action items and decisions that were made. Vendor Performance Reports. Agencies are required to report
vendor performance using the Vendor Performance Tracking System
Desk Reviews (VPTS) maintained by SPD. Accurately reporting contractor perfor-
Typically, desk reviews are agency examinations of reports submit- mance allows agencies to share vendor information and facilitates
ted by the contractor to the agency. Various types of reports may better oversight of state contracts (e.g., aid in identifying vendors
be required by the contract; however, to be an effective monitoring that have exceptional performance, protect the State from vendors
tool, the “type” of report should be tailored to the contract require- with unethical business practices).
ments. Examples of reports include progress reports, status reports,

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Considerations During Review. Agencies should review the Site Monitoring Report. Upon completion of a site visit, the Con-
vendor performance reports for the following factors: tract Manager or designated site monitor must complete a stand-
alone document that serves as a record of the site monitoring work.
• Compare the actual performance against the contract require-
A copy of the site monitoring report should be sent to the contractor
ments. Is the contractor performing in accordance with the
contract requirements? and any others who may benefit from the report.

• Compare actual expenditures to the approved budget. Is the Monitoring by Third Parties
contractor following its approved budget plan?
In some instances, the obligation of monitoring the progress of a
• Compare the current period to prior periods. Are there any
contract is assigned to another contractor. This is also known as
unexplained trends? Is the contractor performing work signifi-
cantly different from the last period or the last year? independent oversight. For example, in the case of a construction
contract, the task of ensuring progress in accordance with the con-
• Compare what the current contractor is doing in comparison
tract may be performed by the architectural firm that provided the
with other contractors performing similar work.
construction plans. For highly technical work, consultant subject
• Compare the relationships between key components of the matter experts may perform monitoring services independently or
report such as:
in conjunction with agency staff.
• the cost per unit of service or the percentage of the fees
charged to the program; Enhanced Contract and Performance
• the change in variable costs compared to the units of ser- Monitoring
vice provided; and
Agencies are required to utilize an enhanced monitoring method
• reported salaries with the submitted staffing plan. for high dollar and high-risk contracts. Enhanced monitoring is
Compare the report with what is known about the contractor’s oper- an increased level of monitoring, beyond the regular monitoring
ating environment. Did a weather emergency in the area recently normally used. Such increased monitoring may include, but is not
increase the cost of construction supplies or is the cause of a tem- limited to, the following: frequency of site visits, contractor meet-
porary reduction in services provided? ings, and documentation requirements deemed necessary by the
agency to assess progress of the contractor toward meeting the
Site Visits identified goals and outcomes established in response to assess-
More complex contracts and any contracts that the agency perceives ments of unsatisfactory performance.
as having a higher degree of risk may require both reviews and visits
Agencies are required to establish by rule a procedure to identify
to the contractor’s facilities to ensure progress is in accordance with
each contract that requires enhanced contract or performance
the contract schedule. Site visits may be used to verify actual perfor-
monitoring.426 This information must be submitted to the agency’s
mance against scheduled or reported performance. These visits can
governing body or, if the agency is not governed by a multimem-
be an opportunity to verify that the contractor is dedicating sufficient
ber governing body, the officer who governs the agency.427 The
resources and appropriate personnel to the contract. Although site
agency’s contract management office or procurement director shall
visits are an efficient tool for monitoring, it is possible for a site visit
immediately notify the agency’s governing body or governing offi-
to interfere with the contractor’s ability to accomplish the work if
cial, as appropriate, of any serious issue or risk that is identified with
monitoring is excessive or includes unnecessary checks; the Con-
respect to a contract monitored under this process.428
tract Manager should consider this when arranging visits.
For contracts that have a value exceeding $1 million, agencies must
Site Monitoring Checklist. To perform a site visit, the agency
develop and implement contract reporting requirements that pro-
must develop a comprehensive site monitoring checklist that outlines
vide information on (1) compliance with financial provisions and
the contract compliance requirements. The site monitoring checklist
delivery schedules under the contract, (2) corrective action plans
should be tailored for each contract. While there may be standard
required under the contract and the status of any active corrective
items that the agency will review for all contractors, each contract
action plan, and (3) any liquidated damages assessed or collected
should be reviewed for specific site monitoring requirements that are
unique to the contract and the Contract Manager should document
findings from the site visit in a site monitoring report. 426
TEX. GOV’T CODE § 2261.253(c).
427
TEX. GOV’T CODE § 2261.253(c).
428
TEX. GOV’T CODE § 2261.253(c).

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Statewide Procurement Division

under the contract.429 In addition, each agency must verify (1) the at contractor’s risk for a reasonable period of time for later disposi-
accuracy of any information reported that is based on information tion at the contractor’s expense.
provided by a contractor, and (2) the delivery time of goods or ser-
For assistance in resolving issues for orders processed through
vices scheduled for delivery under the contract.430
Texas SmartBuy, Managed Term Contracts, or SPD Adminis-
tered Contracts, contact the SPD Contract Management Office at
Inspection, Testing, and Acceptance spd_cmo@cpa.texas.gov.
Overview Shipment Acceptance. Acceptance of a shipment must only
Agencies are required to (1) inspect and evaluate at the time of occur when goods delivered match the items on the PO and cor-
receipt all goods or services that the agency receives to determine responding receiving report meet the quantities ordered and the
whether the goods or services comply with the contract under which specifications required. Agencies must immediately inspect all ship-
they were purchased, and (2) certify, if true, that the goods or ser- ments received as fulfillment of POs and report any discrepancies to
vices comply with contract requirements and that the invoice for the contractor. A contractor must be notified immediately or within
them is correct.431 If the goods or services are not compliant with the timeline outlined in the contract.
the contract, agency personnel must notify the Contract Manager.
Inside Delivery and Pallets. If the PO specified “Inside Delivery,”
For statewide contracts administered by SPD, the agency must pro-
it is the sole responsibility of the contractor to deliver to the exact
vide prompt written notice to SPD of the deficiencies.432 A defaulting
floor and room number on the PO. Inspection must include verifica-
contractor can be referred to the Office of the Attorney General for
tion of the requirements for inside delivery and if the shipment was
action against the contractor and repeated failures may make the
to be on pallets. If the shipment is not on pallets as required, the
contractor subject to statewide debarment if SPD determines it is
agency may either
appropriate.
1. request the contractor to palletize the shipment at the
Testing agency location for no additional charge or
All goods are subject to inspection and testing by the State. 2. accept the shipment with a notation on the receiving report
Authorized agency personnel shall have access to a contractor’s and notify the purchasing department to process a Purchase
place of business for the purpose of inspecting contracted merchan- Order Change Notice (POCN) to remove any additional
dise. Latent defects may result in revocation of acceptance of any charges for pallets.
product. Agency legal counsel should be consulted if latent defects
Shipments Delivered in Error. When a shipment includes an
are discovered.
item not ordered by the agency, the agency may refuse the ship-
Tests may be performed on samples obtained by request of the ment when the error has been confirmed by checking the PO and/
agency or taken from regular shipments. SPD may also arrange or receiving documents.
for testing and inspection of goods and services before they are
Package/Container Count Discrepancy. The end user or
purchased. Other agencies may test and inspect goods and ser-
purchaser must inspect the shipment for the number of containers
vices before purchase under standard industry testing methods, or
listed on the Bill of Lading. If the number does not match, note the
they may contract for testing. When products tested fail to meet or
discrepancy on the Bill of Lading prior to the driver leaving. Docu-
exceed all applicable specifications, the costs of the sample used
ment the same information on the agency receiving documents.
and any testing performed shall be borne by the contractor.
Documentation is necessary to validate the receipt of the containers
Shipping and Receiving received by the transportation company.

At the State’s option, goods that have been delivered and rejected Non-Conforming or Incorrect Items Received. The end user
in whole or in part may be returned to the contractor at contractor’s or purchaser must compare the items received with the PO for brand
risk and expense or disposed of in accordance with SPD rules or name and product number. If the items on the Bill of Lading and in
applicable statutes. The contractor may request that goods be held the delivery do not match the items on the PO, the shipment may
be refused. If the shipment is signed for before it is inspected and
429
TEX. GOV’T CODE § 2261.254(a).
430
TEX. GOV’T CODE § 2261.254(b). the error is discovered after the driver departs, contact the contrac-
431
TEX. GOV’T CODE § 2155.322. tor for replacement and pick up immediately upon discovery. Goods
432
TEX. GOV’T CODE § 2155.070.

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found to be non-conforming to specifications during inspection must Pickup and Return of Shipments. The contractor may be
be documented on all receiving reports and the contractor must be required to pick up the damaged goods and those not conforming
contacted by telephone and with an email confirmation of the tele- to specifications and provide replacement in the timeline outlined by
phone notice. It is recommended that the agency takes pictures of the agency or in the original terms of the PO/contract. This must be
the incorrect or non-conforming goods for documentation. provided at no additional cost to the agency.

Minor Visible Damage. Minor damage visible on the outside of Internal Receiving Report. The shipment must be compared to
the containers must be noted on the Bill of Lading prior to signing the PO or receiving document. Locate the PO number on the shipping
and prior to the departure of the driver. Recording the damage pro- documents and after immediate inspections of the shipment when the
vides documentation if there is concealed damage. The contractor containers are opened, check the following against the PO:
will be aware of the minor visible damage by the information pro-
vided on the Bill of Lading. • order quantity per item;
• number of items per package or container; and
Severe Visible Damage to Container or Contents. The
• unit of measure for each line item.
agency may refuse the entire shipment or refuse only the damaged
containers upon discovery of severe damage to container and con- Quantity Overages. An agency is not obligated to pay for
tents; however, SPD recommends that the agency either accept the amounts over the stated quantity on the order unless allowed in
entire shipment or a partial shipment, rejecting only the damaged the terms and conditions of the contract. If overages are accepted
containers, to prevent unnecessary delay of required goods. If the by the agency, a POCN must be processed. It is important to notate
entire shipment is refused, record the reason for refusal on the Bill overages as well as shortages.
of Lading and notify the contractor that the shipment was refused
and reshipment is required due to severe damage. It is recom- Partial Shipment Considered Complete. The contractor must
mended that the receiving agency takes pictures of the incorrect or be contacted to confirm the partial shipment; this step must be taken
non-conforming goods for documentation. prior to processing a POCN. After confirmation that no other goods
will be received, and by mutual agreement the partial order is con-
For FOB Origin, if the shipping containers are damaged enough that sidered complete, a POCN and/or contract amendment must be
it is probable that the contents are also damaged, accept the ship- processed and an accurate payment must be based on the goods
ment and then record the damage on the carrier’s freight bill. The received at the time of shipment.
agency is responsible for filing freight claims with the carrier.
Partial Shipment. For partial shipments, the agency must request
Concealed Damage to Contents. Damages to the contents a timeline, in writing, from the contractor for the balance to be deliv-
found during inspection and unpacking of a container must be ered. Free on Board (FOB) Destination, freight included, and the
immediately documented and reported to the contractor by tele- delivery for the balance must be at no additional cost to the agency.
phone and with an email confirmation of the telephone notice. It The remainder of the partial delivery must be received by the agency
is recommended that the agency takes pictures of the incorrect or within the contracted delivery days after receipt of order for each item
non-conforming goods for documentation. If the end user is not or the delivery will be considered late.
the Contract Manager, then the end-user must contact the Contract
Manager as well as the agency accounting department so that pay-
ment is not made on the damaged goods.

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Carrier Shipping Methods

A summary of common carrier shipping methods is listed in the following chart.

Carrier Shipping Methods

Title Held in
Shipping Method Carrier Paid By Freight Listed on PO Claims Filed By
Transit By
FOB Origin Freight Collect Agency Yes Agency Purchasing

FOB Origin Freight Allowed Vendor No Agency Purchasing

FOB Origin Freight Prepaid &

Vendor Yes Agency Purchasing
Charged Back
FOB Destination Freight Collect Agency No Vendor Vendor
FOB Destination Freight Collect
Vendor No Vendor Vendor
& Allowed
FOB Destination Freight Collect
Agency No* Vendor Vendor
& Allowed
* Freight charged to vendor by deducting freight charges from invoice

Invoice Review and Payment

Invoice Review
After goods and services have been inspected and accepted, invoices must be reviewed to verify that (1) the description of goods and
services is in sufficient detail to identify the order relating to the invoice and that the quantities and unit measures correspond with the
referenced PO and (2) the invoice conforms to CPA invoicing standards.433

Invoicing
The contractor is billing only for goods or services received
The goods or services have been inspected and accepted.
by the agency.

The invoice is correct and complies with the pricing, terms,

The total payments do not exceed the contract limits.
and conditions of the contract.

Red flags that may indicate fraud include

Frequent undocumented or unapproved adjustments, credits,
Invoices with no physical address for the vendor.
and write-offs.

Invoices for services/goods not rendered. Multiple remittance addresses for the same vendor.

Payments to the vendor that have increased dramatically for

Inconsistent invoicing time periods.
no apparent reason.

34 TEX. ADMIN. CODE § 20.487.

433

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Contract Managers must be familiar with the payment and pricing • notify the contractor of invoice issues as soon as possible;
terms applicable to each contract. Contract Managers must also • request assistance, if needed, from the agency legal counsel to
monitor performance under the contract to verify that comparable timely send a disputed invoice letter; and
costs are being charged for comparable goods and services.434
• maintain documentation for inclusion in VPTS regarding the
When an agency purchases through SPD contracts, the contractor incident resolution.
must submit an invoice to the ordering agency at the address shown
on the PO.435 Agencies or other governmental entities purchasing Payment
through SPD contracts may only pay restocking or cancellation fees
if the agency or governmental entity determines the charge is justifi- Purchase Order (PO)
able; the extent of these fees should be anticipated when drafting A Purchase Order (PO) is the document most frequently used
the contract.436 by agencies to authorize the purchase of goods and services. A
requisition is entered with the good or service description. The
A payment is considered overdue on the 31st day after later of the requisition is then sourced to a purchaser who will write the PO that
date of: will be submitted to the contractor. Once the services are performed
• the receipt of the goods; and/or goods are received, the contractor will request payment by
submitting an invoice to the agency along with the PO.
• performance of the services; or
• receipt of the invoice for the goods or services.437 Payment Card
In some cases, a vendor may suspend performance under a contract An agency may only use payment cards issued under the SPD
for nonpayment.438 To avoid a possible suspension, the Contract contracts. SPD has established several types of payment cards as
Manager must promptly review invoices and, following the agency’s follows: (1) Commercial Charge Cards used for general purchasing
internal procedures, notify the contractor of a disputed invoice if the or specifically for travel-related expenditures and (2) State of Texas
invoice is determined to be inaccurate. Retail Fuel Cards used for fuel, authorized maintenance, and
roadside assistance purchases.
Withholding Payment
Each agency must ensure that the authorized cardholder adheres
Although an agency must pay its contractor promptly, the agency
to all purchasing statutes, rules, policies, and procedures when the
also has the responsibility to protect the interest of the agency.
payment card or travel card is used. For instance, transactions that
Despite best efforts to resolve an invoice issue, some circumstances
do not qualify as spot purchases must comply with requirements
may require that payment approval be withheld.
applicable to the requisite procurement method. The agency must
Circumstances where it may be necessary to withhold payment adopt procedures that govern the issuance and use of payment
include, but are not limited to, the following: cards by the agency’s officers and employees. The agency must also
include procurement policy guidelines in its internal procedures for
• invoice errors; payment card use and include documentation of these procedures
• undocumented and/or unsupported costs; in its Procurement Plan submitted annually to SPD. SPD requires
• remediating overpayments to the vendor; and these procedures as a part of the procurement audit review. The
use of a payment card does not exempt an agency, its officers, or
• contractor’s performance is non-conforming or unacceptable.
its employees from any purchasing requirement of state law or SPD.
If an invoice issue cannot be resolved, the Contract Manager should
take the following steps to escalate the issue: The payment card may be used as a payment method for goods and
services purchased for dollar amounts within an agency’s purchas-
• notify the agency accounts payable division; ing authority and the cardholder’s authorized charging limit. The
• notify division management and the agency’s Contract Admin- following processes must be adhered to:
istration Office (CAO);
• Procurement File or Log: A procurement file or log must be
434
TEX. GOV’T CODE § 2261.203.
maintained for each card transaction and must include the
435
TEX. GOV’T CODE § 2155.381. NIGP Class/Item code(s) and best value determination.
436
TEX. GOV’T CODE § 2155.384.
437
TEX. GOV’T CODE § 2251.021.
438
TEX. GOV’T CODE § 2251.051.

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• Receipts for Credit Card Transactions: Keep each payment Change Control
card transaction receipt in the procurement file. Each receipt
must contain a description of the good or service sufficient Overview
to support the comptroller expenditure object code used for
the type of items being purchased. All receipts must be kept Throughout the term of the contract changes may become
according to the commercial card guidelines and the agency’s necessary. These changes may be minor, administrative changes
records retention schedule. Upon request, credit card receipts such as a change of address, or they can be substantial changes that
must be made available to CPA. affect the price and delivery. Depending on the transaction, a
• Capital or Controlled Assets: The payment card may be formal change control process may be included within the contract.
used to pay for capital or controlled assets, utilizing the Regardless whether expressly stated in the contract, an agency
expenditure object code established for the type of assets should have an effective change control process in place. Failure
being purchased. The Texas Identification Number (TIN), Payee to manage and control changes may result in an unintentional
Identification Number (PIN), or Vendor Identification Number
modification to the scope of work, extension of the schedule,
(VIN) of the selling vendor must be entered into USAS, rather
increase in the contract cost, circumvention of management controls
than the TIN/PIN/VIN of the state credit card issuer. (Note the
PIN entered into USAS is not a personal identification number and diminished contractor accountability. When modifying any part
that a cardholder may have selected to conduct transactions of the contract, the Contract Manager should coordinate with the
with chipped payment cards; these card specific security codes Contract Developer, end-user and project manager.
must be kept confidential by the cardholder.)
An effective change management process includes, but is not
A participating agency may not use a payment card nor reimburse limited to, the following:
an officer or employee who has uses a payment card for personal
use, consulting services, cash advances, a purchase that SPD audits • Formal, written approval of all changes prior to the change
before payment, payments to certain defaulting debtors or debtors taking place. Do not verbally authorize the vendor to begin
with certain delinquent debts, or any service or good not within working on a change before the change is fully analyzed,
documented and approved in writing in conformance with
statutory purchasing guidelines.439 Agencies are liable for late pay-
contract requirements.
ment fees.
• Evaluation of the impact of each change to the contracting
objective, the corresponding product and/or service, the
Interagency Transaction Voucher (ITV)
schedule, cost, and increase in agency overhead resulting from
An agency may process a payment between agencies for procured the change, impact to work in progress or completed work,
goods and services through an Interagency Transaction Voucher standards, and acceptance criteria.
(ITV), which is used to transfer funds held in the State Treasury • If the contract contains a contingency allowance, develop a
between two agencies. The interagency payment must be accom- plan for how any draws against this allowance will be requested
panied by a Recurring Transaction Index (RTI).440 The transaction and approved.
agency (the agency initiating the transfer of funds) must know the • Documentation of all changes, no matter how small; avoid any
receiving agency’s RTI Number to process the ITV. This is a common informal undocumented change process.
payment method when agencies have entered into an IAC for the • Establish a single point of contact to recommend or authorize
exchange of goods and/or services between agencies. any change. Document the change as approved or disapproved.
If a change is approved, document the change and the impact
to the scope of work through a contract amendment or
purchase order change notice, whichever is applicable.

34 TEX. ADMIN. CODE § 5.57.

439

https://fmx.cpa.texas.gov/fmx/pubs/afrrptreq/interfund/index.
440

php?section=rti&page=rti12.

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Types of Contract Amendments Constructive changes may occur when agency personnel:

Overview • accelerate the delivery schedule;

• direct the work to be performed differently;
There are two ways to change a contract. One is a bilateral
amendment where all parties to the contract agree that a modification • change the sequencing of the work;
is necessary because the scope of work, the term of the contract, • postpone the acceptance or rejection of deliverables;
or some other provision must be altered. The second is the right to • delay reviewing invoices and approving payment; or
unilaterally modify the contract — the terms and conditions in the
• interfere with or hinder performance.
contract determine how the agency may exercise a right to modify the
contract without the contractor’s consent. An amendment will either
be administrative, substantive, or constructive in nature. Care should Contract Amendment Analysis
be taken not to inadvertently change contract terms through course Whether or not a contract may be changed, depends upon certain
of performance. All contract amendments should be appropriately principles. State law requires a competitive process in most situa-
documented and conform to the contract and agency processes. tions. The specific method of competition depends upon the type of
goods or services needed. If a competitive process was used, the
Administrative Changes resulting contract must be consistent with what was solicited during
Administrative changes occur within the scope of the contract and the competition. Inconsistencies between the solicitation and con-
do not affect or alter the rights of the parties. These changes are tract can violate the competitive process requirements.
typically executed via a unilateral amendment. Examples of admin- If a change is needed to a contract, the change has to be within the
istrative changes include: scope, or parameters of the solicitation. A significant difference in
• changes in billing instructions or address; the scope of work would be a material or substantial change and
would not be allowed because it was not originally subject to fair
• corrections of typographical errors not affecting the substance
of the contract; competition. To permit such a change would go against the ideas of
competition and a fair playing field for all of the vendors. Transpar-
• changes as permitted by the specific contract language; and
ency in government procurement is a key government responsibility.
• changes in agency personnel assigned to the contract.
For example, if a contract to buy 10 desks is amended to include
Substantive Changes 300 file cabinets, the change is outside the scope of the contract
because vendors did not have the opportunity to compete for the
Substantive Changes are contractual changes that affect the rights
sale of 300 file cabinets. Additional vendors may have competed
of both parties. Such changes generally require bilateral amend-
had they known that file cabinets were being solicited. Such a large
ments (agreement by both parties). Examples of substantive
quantity of file cabinets could also have had an impact upon the pool
changes include:
of vendors that competed for the original solicitation. Other vendors
• a change in the price of the contract; may have been interested in bidding on file cabinets that were not
• a change in the delivery schedule; interested in bidding on desks.
• a change in the quantity; When determining what constitutes scope changes to advertised
• a change of deliverables (e.g., the specifications); specifications, the crucial question is whether the changes are
• a change of key personnel: or material or substantial. Material or substantial changes are
not measured by the number of changes made to the original
• a change of any terms and conditions.
specifications, they are measured by determining if the extent of
Constructive Changes the changes so substantially alters the original specifications that
not re-advertising the revised specifications would deny a potential
If a contractor perceives that work beyond the scope of the
vendor an opportunity to respond to the revised specifications.
contract was ordered by the agency, the contractor may claim that
If a revision is substantial, a new solicitation is needed to ensure
the contract was “constructively” changed, and the contractor
compliance with the bidding statutes.441
may be entitled to additional compensation for the changes. Gen-
erally, a constructive change will require a bilateral amendment.
See Roark v. Stallworth Oil and Gas Inc., 813 S.W.2d 492, 496 (Tex. 1991).
441

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Assignment by Contractor and Contractor For additional information refer to Setup Special Circumstances-
Assignments in the TexPayment Resource Guide posted on the CPA
Name Change
website.443
Overview
Delegated Purchases. When a payment assignment is requested
Assignment occurs when one party to a contract (assignor) transfers on a delegated purchase, the agency must receive a letter from
its rights under a contract to another party (assignee). Contract law the original awarded contractor assigning the order to the new
generally permits assignments.442 It is recommended that agencies contractor and a letter from the new assignee noting acceptance
draft their contracts to require the submission of a written request of the assignment. Any reference to an SPD order number should
from the contractor to the Contract Manager to change the contrac- be deleted. A copy of the notice must be maintained in the agen-
tor’s name or to recognize a successor in interest to the contract. cy’s procurement file. The agency is responsible for setting up the
Agency legal counsel should be consulted if after the proposed assignment mail code for the VIN number of the original contractor
assignment, the contractor will not be responsible for any perfor- in TINS so that the payment may be processed.
mance under the contract.
Authority to Assign. Generally, a person may assign the right to
Term Contracts, SPD TXMAS Contracts, and SPD-Admin- receive a payment from the State in the same way that the person
istered Contracts. The SPD Contract Management Office is may assign the right to receive a payment from a private person or
responsible for processing assignments for Term Contracts, SPD entity. Additional information may be found in the eXpendit State
TXMAS Contracts, and SPD-Administered Contracts. Accordingly, Purchase Policies located on the CPA website444 by selecting the
agencies are directed to inform contractors to contact the SPD Con- “Miscellaneous Expenditures” tab, clicking on “Payment and Fees,”
tract Management Office. and then choosing “Assignments of Payment from the State.”

Payment Assignment Questions regarding assignments should be directed to the CPA

Claims Division at (512) 463-4850.
It is a common business practice for a party to transfer the right to
receive payment. The assignor is the party transferring the right to
receive payment. The assignee is the party receiving the right to
Name Change
receive payment. Any name change requires documentation from the original con-
tractor on company letterhead stating the circumstance of the
Once an agency receives a notice of a financial assignment, it is name change and the new name. The letter should be signed by
legally bound to make payment to the assignee. Assignments may an authorized representative, showing the change and the effective
be requested by the contractor to show changes in the payee on an date. A copy of the assumed name certificate filed with the Sec-
order. retary of State or a sales tax permit may be obtained as proof of
name change. The purchaser will issue a letter amending the PO to
The following steps must be taken:
change the contractor‘s name and advise the contractor to contact
1. Requests for assignments must be in writing from the con- CPA to set up a new VIN in order to secure payment, if applicable.
tractor receiving the order on the company letterhead with The purchaser should change the name on the PO file copy and
the signature of an authorized representative. acknowledge the name change.
2. The agency must issue an assignment letter acknowledging
the assignment. The vendor identification number (VIN) will Buyout or Sale
remain that of the original awarded contractor, but the con-
tractor name and payments will be mailed to the assignee. A buyout or sale occurs when one company is purchased by another.
The contractor of record must have the purchase order and, if appli-
cable, formal contract amended to receive payment when the order
The general rule: all contract rights are assignable unless the assignment materially
442
is delivered. The contractor of record must send the agency a let-
alters the obligor’s duties (especially personal services contracts where there is a
ter stating the circumstances of the buyout or sale. If the contractor
relationship of trust/confidence between parties), the assignment materially varies
the risk (e.g., insurance contracts), or the assignment impairs the obligor’s ability has already ceased operating as a separate business, the agency
to perform. For sales contracts under the TEX. BUS. & COM. CODE, Chapter 2, a should obtain a letter indicating the sale of the company to the new
party may assign or delegate a contract unless otherwise agreed upon or if the
other party has a substantial interest in having the original promisor perform. TEX. The CPA website is located at Comptroller.Texas.Gov.
443

BUS. & COM. CODE § 2.210. The CPA website is located at Comptroller.Texas.Gov.
444

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 Statewide Procurement Division

contractor. To change the company name, the agency should then, cause will not be excusable if the supplies or services to be provided
as applicable, either issue a letter amending the PO or obtain an by the subcontractor could have been obtained from other sources
amendment to the contract. The new contractor should be directed in time to meet the contract delivery schedule.
to contact the CPA Tax Policy Division to obtain a new VIN, if appli-
cable, in order to secure payment. Dispute Resolution
Replacement Contractor Each agency that enters into a contract must include as a term of
the contract a provision stating that the dispute resolution process
If the contractor is requesting to recognize a successor, it is the
provided for in Chapter 2260 of the Texas Government Code must be
Contract Manager’s responsibility to keep the State’s interest
used to attempt to resolve any dispute arising under the contract.445
in mind. The contractor’s successor must be responsible and
The objective of any dispute resolution process is to resolve
adequately able to perform the contract requirements. The Contract
problems before they escalate. To avoid escalation of problems to
Manager must perform all due diligence to evaluate the proposed
the next level and ensure the agency has not exacerbated potential
new contractor’s eligibility and ability to perform. It is also advisable
problems, it is imperative that agency personnel respond promptly
to request and review the documents executed by the contractors
to all contractor inquiries.
that constitute the transaction underlying the proposed assignment.
If the replacement contractor is acceptable, the old and new Initial steps to be taken are:
contractors must sign a novation agreement transferring all rights
and responsibilities under the contract to the assignee. A sample • Identify the problem - many times what may appear to be
a problem can be resolved by providing the contractor with
Novation Assignment Agreement is located in Appendix 27.
information or clarification. The agency must follow internal
Extensions and Renewals escalation points and the OAG must be included if a legal
dispute arises.
If the contract has an option to extend or renew, the Contract
• Research facts - the agency must obtain all the information
Manager must assess whether the option will be exercised by the regarding the potential problem from all relevant sources,
agency prior to the expiration of the current contract term. The including the project manager and the contractor.
number, length, and process for exercising renewals and extensions
• Evaluation - the agency must review all of the facts in
should be specified in the contract. conjunction with the requirements and terms and conditions of
the contract. The agency must then determine the appropriate
Force Majeure course of action.
Performance may be suspended when the failure to perform is
Proper dispute resolution is a core skill of successful contract
due to excusable causes. An excusable cause must be beyond the
management. It is essential to identify problems early in the
contractor’s control, and without the fault or negligence of the con-
performance period and effectively communicate and formalize the
tractor. Such excusable causes, often referred to as force majeure,
process in writing via a cure notice procedure or less formal written
include, but are not limited to, Acts of God or of the public enemy,
procedure. Termination is the last resort; it is a failure by both parties
fires, floods, epidemics, strikes freight embargos, or unusually
to a contract.
severe weather.

Severe weather, although beyond the contractor’s control, will Termination

not generally constitute an excusable delay if it is not considered
“unusually severe weather.” For example, a snowstorm in Amarillo in Most contracts expire by their terms without any affirmative action
February would not be considered unusual, but it would be consid- on the part of the agency. There are times, however, where an
ered unusual in Austin. On the other hand, a snowstorm in Amarillo agency may want to terminate a contract early. Termination of a
in June would indeed be unusual. contact may be accomplished by

If the contractor’s performance failure is due to a subcontractor, to • termination by mutual agreement,

qualify as an excusable cause, the default must arise out of a cause • termination for convenience,
beyond the control and without the fault or negligence of either the
contractor and the subcontractor. Even if this requirement is met, the TEX. GOV’T CODE § 2260.004.
445

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• termination for cause, or Termination for Cause

• termination for non-appropriations.
Overview
When a contract is terminated, the parties are relieved from further
A termination for cause occurs when the agency concludes that the
unperformed obligations in accordance with the agreed terms and
contractor has failed to perform or make progress, or in any way
conditions.
has breached the contract. An agency is not required to terminate
a contract even though the circumstances permit such action. An
Termination by Mutual Agreement
agency may determine that it is in its best interest to pursue other
A termination by mutual agreement occurs when both parties con- alternatives and work with the contractor in getting the contract back
sent to the termination of the contract before the expiration date. on track.
This type of termination may be documented by the exchange of
formal written correspondence or as a contract amendment. Examples of such alternatives include extending the delivery or
completion date, allowing the contractor to continue performance
Termination for Convenience under the contract, or working with the contractor’s surety to com-
A termination for convenience, also known as no-fault termination, plete the outstanding work.
allows the agency to terminate any contract, in whole or in part, at
Factors to consider prior to making a termination for cause decision
any time in its sole discretion, if it is determined that such termi-
include:
nation is in the best interest of the agency. This option should be
provided in every contract. • Has the agency assisted the contractor in curing a default, if
applicable?
A Contract Developer should seek guidance from agency legal coun-
• The provisions of the contract and applicable regulations.
sel if vendors seek to negotiate out termination for convenience to
determine whether the omission of this clause is in the best interest • The specific contractual failures and the explanation provided
for the failures.
of the agency. The consideration whether to waive the clause will
be highly fact specific. For example, in long-term contracts involv- • The urgency of the need for the contracted supplies or services.
ing extensive capital investment by a vendor, a 30 day termination The agency may need to weigh the respective benefits and
disadvantages of allowing a delinquent contractor to continue
for convenience by the agency may not be a realistic contract term.
performance or re-soliciting for a new contractor.
The agency must provide the contractor with written notice specify- • The availability of the supplies or services from other sources
ing whether the agency is terminating all or part of the contract. The and the time required to obtain them (compared to the additional
notice of termination must give the date of termination. If portions time the current contractor requests to complete the work).
of the contract are being selectively terminated, the agency must • Availability of funds and resources to re-purchase if such costs
specify which parts of the contract are being terminated. cannot be recovered from the delinquent contractor. Under
a termination for default, the agency is within its rights to
The contract must specify the basis for settlement with the contrac- demand re-procurement costs from the defaulting contractor.
tor upon a termination for convenience, and the agency must follow Nevertheless, the contractor may not be financially capable
the contract terms. The contractor will generally be paid for allow- to finance the re-purchase, or such demand may result in
able costs incurred up to the date of termination. The agency will protracted legal action.
not be liable for payment to the contractor related to the terminated
If a contract is terminated for cause, the contractor is liable for actual
portion of the work or any work performed or costs incurred after
damages and costs incurred by the State unless otherwise stated in
the effective date of termination. Upon receipt of any invoice from
the contract. The contractor may be liable for cost associated with
the contractor for work performed prior to the notice of termina-
re-procuring the goods or services by the agency. The termination
tion, the agency must thoroughly review the invoice to ensure that
notice must be carefully drafted to state the facts pertinent to the
no excessive costs are included. A sample Notice of Termination for
cause for termination. Prior to issuing a termination notice, the
Convenience is located in Appendix 28.
agency should carefully review the contract and applicable law446

See e.g., TEX. GOV’T CODE § 552.374 (stating the grounds for terminating
446

a contract due to a contractor’s failure to timely provide certain contracting

information to a governmental body in connection with a Texas Public Information
Act request).

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to ensure compliance with any prerequisites to termination (e.g., Plan (including any amendments) on file with the LBB, and the plan
adequate notice, opportunity to cure). A sample Notice of Termina- has been approved by the LBB.
tion for Cause is located in Appendix 28.
Requests for Certifications should be directed to SPD. For CPA to
Cure Notices make a certification as required by the General Appropriations Act,
the following information must be provided with the purchase req-
Prior to terminating a contractor for default, depending on the type uisition and be signed by the agency’s purchasing director or other
of breach, a cure notice may be sent to the contractor if the contract proper authority of the submitting agency:
requires it. A cure notice is a letter provided to the contractor that
specifies a period of time, such as 30 days, to correct or “cure” the • A statement comparing the anticipated cost savings to be real-
deficiency or violation. Not all defaults can be cured. If the contrac- ized through the present acquisition of the equipment versus
tor fails to cure the situation or provide satisfactory explanation as the outright purchase of the equipment at a later time when
adequate funds become available;
requested, the contract may be terminated for cause. A sample Cure
Notice is located in Appendix 28. • A statement affirming that the ordering entity expects to be
able to make payments beyond the current biennium without
having to rely on an increased level of general revenue appro-
Corrective Action Plan
priations;
If there is a contract breach, the parties may implement a formal
• An estimate of the total anticipated interest charges over term
corrective action plan. A corrective action plan is a written document of the installment contract; and
that identifies specific activities that must be performed by the
• A statement indicating that the lease (or installment) purchase
contractor to restore compliance with the contract. The plan must
is the most cost-effective means of obtaining the needed
be tailored to address the identified deficiency, clearly state the equipment despite the additional interest cost to the State.
desired outcome, and establish a time frame for the contractor to
demonstrate improved performance. In addition to the above requirements, any purchase agreement
subject to this section must contain a clause that enables the
Termination For Non-Appropriation, Excess agency to cancel the agreement if the Legislature curtails or fails
Obligations Prohibited to appropriate money to cover the term of the agreement; this is
A termination for non-appropriations clause, or “funding out” clause, necessary to prevent any unconstitutional excess obligation. An
is an Essential Provision that must be included in a contract if the example of a contract clause is as follows: “Any contract resulting
contract term will cross a fiscal year. Agencies are prohibited from from this solicitation is contingent upon the continued availability of
incurring obligations in excess of amounts lawfully appropriated by lawful appropriations by the Texas Legislature.”
the Legislature over the course of a biennium. Penalty for Requisitioning Officer or Employee. If General
The Texas Constitution and the General Appropriations Act prohibit Appropriations Act, Article IX, Section 6.03 (2017) is violated, the
an agency from incurring obligations in excess of amounts lawfully State Auditor shall certify the fact of the violation and the amount
appropriated by the Legislature over the course of a biennium.447 of the over-obligation to CPA, and CPA shall deduct an amount
Therefore, any installment purchase, lease or any other type of pur- equivalent to the over-obligation from the salary or other compen-
chase which incurs an obligation beyond the current appropriation sation due to the responsible disbursing or requisitioning officer or
is strictly prohibited, unless the obligation is expressly conditioned employee and apply the amount to the payment obligation.
upon continued legislative appropriation. There is one exception
to the prohibition against incurring excess obligations. SPD may Agency Reporting of Contracting
determine that a proposed installment purchase arrangement is cost Information in CAPPS
effective and certify this finding in response to an agency request.
As stewards of public funds, all agencies are required to manage
Any certification by SPD related to obligations incurred for the pur- their finances and human resources in a way that supports sound
chase or lease of automated information systems (AIS) equipment business principles. Since 1989, state law has required agencies to
may only be made if the requesting agency has a Biennial Operating report their expenditures using a computerized and uniform state-
wide accounting system created and implemented by CPA. In 2007,
447
TEX. CONST. art. III, § 49a; TEX. CONST. art. VIII, § 6; General Appropriations Act, to further financial and reporting uniformity, the Legislature required
House Bill 1, 86th R.S. at Article IX, Section 6.03.

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CPA to develop, maintain and support Enterprise Resource Plan- Vendor Performance Reporting
ning (ERP) to ensure that the uniform statewide accounting system
includes the administration of general ledger, accounts payable, Overview
accounts receivable, budgeting, inventory, asset management,
A contractor’s performance must be reported to VPTS once a con-
billing, payroll, projects, purchasing, grants and human resources.
tract with a value of over $25,000 is completed or otherwise termi-
Since then, CPA has been integrating ERP in the uniform statewide
nated.449 If the value of the contract exceeds $5 million, the agency
accounting system through the Centralized Accounting and Payroll/
must review the contractor's performance at least once each year
Personnel System (CAPPS). In 2015, the Legislature included “solici-
during the term of the contract and at each key milestone identified
tations and contracting” as part of the “purchasing” element in ERP.
for the contract.450 Interagency contracts, interlocal agreements, and
Agencies using CAPPS are required to provide information related to
memoranda of understanding are not subject to the VPTS reporting
solicitations and contracting according to the requirements that are
requirements.
adopted in rule by CPA.448
For information on how to use the VPTS, refer to the VPTS User
Contract Close-Out Guide located on the CPA website.451 The system provides many
common instances of positive and negative performance for the
The contract close-out process is usually a simple but detailed reporter to choose from and a blank field is provided to report other
administrative procedure. The purpose of the process is to verify that performance positives or negatives, resolution codes, and general
both parties to the contract have fulfilled their contractual obliga- comments.
tions. Accordingly, contract close-out must be conducted in a timely
manner. Best value criteria considerations are required when determin-
ing and reporting vendor performance grades452 and are deter-
As part of contract close-out, the Contract Manager must compare mined during the contract management phase of the Procurement
actual performance against performance measures, goals and Cycle.453 The Contract Manager must request best value criteria from
objectives, to determine whether all required work has been com- the purchaser and review contract documents.
pleted. A contract is completed when:
In assessing contractor performance, the Contract Manager should
• all goods or services have been received and accepted; consider the following:
• all reports have been delivered and accepted;
• Did the contractor meet the requirements in the contract?
• all administrative actions have been accomplished;
• Were there any other criteria besides meeting specifications in
• all agency-furnished equipment and materials have been the contract and price?
returned;
• If so, the Contract Manager must consider those criteria in the
• all property inventory and ownership issues are resolved includ- vendor performance evaluation.
ing disposition of any equipment or licenses purchased under
the contract; The Contract Manager must consult all agency personnel involved in
• final acceptance from the project manager has been received; the contract, including the Contract Developer and the end user, to
and determine the fulfillment of best value criteria. Ideally, the Contract
Manager or end user would be providing the report.
• final payment has been made to the contractor.

The Contract Manager must also ensure that vendor performance is Scoring a Vendor
reported to VTPS and that the contractor is aware of and is in com- Vendor performance reporting is important as it can affect the con-
pliance with records retention requirements. tractor significantly on current and future procurement initiatives, so
the Contract Manager must consider all information collected when
scoring a contractor.

449
TEX. GOV’T CODE § 2155.089; 34 TEX. ADMIN. CODE § 20.115.
450
TEX. GOV’T CODE § 2155.089(a).
451
The CPA website is located at Comptroller.Texas.Gov.
452
TEX. GOV’T CODE § 2155.0755(b); 34 TEX. ADMIN. CODE § 20.509.
TEX. GOV’T CODE § 2101.041(a).
448 453
TEX. GOV’T CODE § 2155.075.

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If a contractor does not score lower than a “B,” comments will not be posted publicly. All comments must be reviewed by agency staff and are
typically used to explain low scoring vendors. Comments entered will be retained internally, and can always be requested from the program.

Contractors who do not fulfill the requirements of the contract or that are on corrective action plans must not be a given a grade higher than
a “C.”

General guidelines for scoring contractor’s performance are illustrated in the following scenario.

Scenario: The agency purchases 25 chairs for a classroom setting. The contract specifications detail that the chairs must be red, at least
25 inches in height, have wheels, and adjustable arms. The delivery date is June 1, 2017. The agency has purchased these particular chairs
because they both meet the best value criteria and the vendor can supply the chairs that meet the criteria requested.

Vendor Scoring Guide

Letter Grade 1
Example

A – Must be given to vendors who met best value criteria

The chairs are delivered on the delivery date and meet the
and fully complied with all contract material terms with
specifications detailed in the contract.
complete or substantial customer satisfaction.

Twenty-five chairs are delivered on the delivery date;

B – Must be given to vendors who met best value criteria
however, only 24 meet the contract specifications. The
and fully complied with all material terms – or promptly
contractor has delivered one blue chair. The blue chair is
remedied any minor instance of non-compliance with those
promptly replaced within 24 hours after notification and
terms — with substantial or adequate customer satisfaction.
correspondence with the vendor.

Twenty blue chairs and five red chairs are delivered on

C – Must be given to vendors who met best value criteria
the delivery date. Within 48 hours of notification and
and substantially remedied a majority of the instances of
correspondence with the vendor, all of the blue chairs
non-compliance with the material terms of the contract with
are replaced with red. All chairs meet other contract
adequate customer satisfaction.
specifications.

D – Must be given to vendors who did not meet best value Five red and twenty blue chairs are delivered a day after the
criteria or were in substantial non-compliance with material delivery date. After correspondence with the vendor, the
contract terms with the requirements of the contract and agency was notified that due to a manufacturing delay, the
failed to remedy a majority of those instances of that non- red chairs would not be available for delivery for another two
compliance. weeks.

F – Must be given to vendors who did not meet best value

Twenty-five blue chairs are delivered after the delivery date.
criteria were in substantial non-compliance with the
Upon delivery, the agency is notified that the red chairs had
material contract terms and failed to remedy a majority of
been discontinued months ago (prior to the establishment
those instances of non-compliance or displayed conduct
of the contract) and the agency was not made aware of this
that would be cause for debarment such as fraud, material
issue.
misrepresentation, or contract breach.

TABLE NOTES
1
34 TEX. ADMIN. CODE § 20.509. See also TEX. GOV’T CODE § 2262.055.

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Interpreting Existing Vendor Scores added together, plus the historic vendor score when applicable, and
then are divided by the total number of report scores (including the
Contract Developers and evaluation committees use vendor perfor-
historic score). Then, to provide the vendor’s overall grade on an A-F
mance scores during the evaluation of responses. Contract Devel-
scale, the number is converted back to a letter grade according to
opers should read the reports in order to make their determination
the following scale:
based on the notes left by reporting agencies utilizing the vendor
being evaluated, not just not limit the review to the evaluation 90-100 = A
scores from the current solicitation. Vendor performance scores are 80-89 = B
available on VPTS.
70-79 = C
It is important to note that there is a difference between the report 60-69 = D
score and the vendor score.
59 or below = F
The report score is the score the agency assigns for one particular
EXAMPLE: Vendor X has a historic score of 88. Vendor X then gets
report. Historic reports (prior to February 2017) were graded on a
assessed a report score of “A” by one purchaser and another report
satisfactory/unsatisfactory scale. The score is displayed as “Legacy
score of “C” by another purchaser. The formula should work as fol-
Satisfactory” or “Legacy Unsatisfactory.” New reports are graded by
lows: 88+100+70/3= 86. The vendor has a numeric score of 86, so
the agency on an A-F scale.
the displayed grade would a “B”.
The vendor score is the score calculated by averaging all of a
vendor’s report scores to provide an overall vendor score. Vendors
Barring Vendors From Participating In State
receive an overall grade that considers both historic reports (Historic Contracts
Vendor Score) and new reports. SPD may bar a vendor from participating in state contracts, includ-
ing any contracts where the purchasing authority is delegated to
How Vendor Score is Calculated an agency, for substandard performance under a contract with the
All reports submitted for a vendor prior to February 6, 2017 have State or an agency. If there are material misrepresentations by a
been averaged, creating a historic vendor score. The historic vendor vendor in a bid or proposal to the State or an agency or during the
score counts as one report score in the scoring formula within the course of performing a contract with the State or an agency, SPD
vendor performance reporting system. may bar the vendor from participation in state contracts. In addition,
a vendor may be barred due to fraud or breach of a contract with the
The scoring formula is H+R1+R2+R3…/n=S, where H= historic vendor State or a specific agency.
score, R= new report score, n= [1 + (total number of new reports)],
and S= Vendor Score. Other reasons CPA may bar a vendor from participating in state
contracts would be repeated unfavorable performance reviews
Vendor performance grades range from A – F when entered into the under Section 2155.089 of the Texas Government Code or repeated
system by an agency user. After the agency assigns a letter grade unfavorable classifications received by the vendor under Section
(report score), the system converts the letter grade to a number 2262.055 of the Texas Government Code after considering the fol-
according to the scale below: lowing factors:
A = Excellent performance (score equivalent of 100) • the severity of the substandard performance by the vendor;

B = Good performance (score equivalent of 85) • the impact to the state of the substandard performance; any
recommendations by a contracting agency that provides an
C = Satisfactory performance (score equivalent of 70) unfavorable performance review;
• whether debarment of the vendor is in the best interest of the
D = Unsatisfactory performance (score equivalent of 65) State; and
F = Extremely unsatisfactory performance (score equivalent of 50) • any other factor the SPD considers relevant, as specified by
CPA rule.
The system uses the report scores given by state agencies to deter-
mine a vendor’s overall score. All of a vendor’s report scores are SPD may also bar a vendor from participating in state contracts
if more than two contracts between the vendor and the State

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 Statewide Procurement Division

have been terminated by the State for unsatisfactory vendor which requires an agency to retain its contract records until the
performance during the preceding three years. If a vendor is seventh anniversary of the later date of (1) the contract completion
barred from participating in state contracts, SPD shall determine or expiration, or (2) the resolution of all issues that arose from
the period of debarment. The period for debarment must be any litigation, claim, negotiation, audit, open records request,
commensurate with the seriousness of the vendor’s action and administrative review, or other action involving the contract or
the damage to the State’s interests.454 documents.459

• If the contract was executed on or after September 1, 2015,

Records Retention most documents in the contract file will have a minimum
retention period of AC460 +7 years (after close of contract plus
Aside from the responsibility of maintaining the contract file, the seven years).
Contract Manager, or designated responsible agency employee, is
• If the contract was executed before September 1, 2015, then
also responsible for ensuring that contract documents are retained
the minimum records retention period is AC+4 years (after
by the agency in the required format for the appropriate amount close of contract plus four years) or as otherwise indicated in
of time as determined by applicable law and the agency’s records the agency’s approved records retention schedule.
retention schedule.
A state record must not be destroyed if any litigation, claim,
A contract solicitation document that is an electronic document negotiation, audit, public information request, administration review,
must be retained in the document's electronic form.455 For purposes or other action involving the record is initiated; all action involving
of records retention, the term "contract solicitation document" the record must be completed and all issues arising from the action
includes any document, whether in paper form or electronic form, resolved before a state record may be destroyed. Although the RRS
that is used by an agency to evaluate responses to a competitive for contract files is AC + 7 years, a particular agency may opt to
solicitation for a contract issued by the agency.456 An agency may print maintain contract files longer if there is a business justification for
and retain the document in paper form only if the agency provides the retention. The reason for retention of records beyond the official
for the preservation, examination, and use of the electronic form retention schedule must be documented in writing.
of the document during the records retention period, including any
formatting or formulas that are part of the electronic format of the
document.457
Post-Payment Audits
CPA performs audits on documents submitted to the Uniform State-
The Texas State Library and Archives Commission publishes the
wide Accounting System (USAS).461 CPA’s Expenditure Audit Section
Texas State Records Retention Schedule (RRS) to help agencies
plans audits on an annual basis and performs a risk assessment each
determine the minimum length of time that records must be retained
year before initiating audit plans. Agencies are audited for compli-
by an agency before destruction. Each agency is also required to
ance with certain state laws and rules concerning payroll, travel,
prepare its own records retention schedule.458 The RRS does not take
purchase and procurement and with the processing requirements of
the place of an agency’s retention schedule but is to be used as
the Centralized Accounting and Payroll/Personnel System (CAPPS),
a guide by the agency in creating and updating its schedule. The
USAS, the Uniform Statewide Payroll/Personnel System (USPS), and
retention periods given in the RRS are required minimums; agencies
the Standardized Payroll/Personnel Reporting System (SPRS).
may retain records for a longer period.
The Expenditure Audit Section may utilize generally recognized
The RRS must be read in conjunction with statute enacted in 2015
sampling procedures to select a sample of transactions to be tested.
454
TEX. GOV’T CODE § 2155.077. The agency will supply the complete purchasing package applicable
455
TEX. GOV’T CODE § 441.1855(b). See also General Appropriations Act, House to each Purchase Category Code. The Purchase Category Code List
Bill 1, 86th R.S. at Article IX, Section 7.13 (directing agencies to review their
document production protocols and apply best practices to produce documents in and Post-Payment & Procurement Review Agency Document Check-
the most practicable, efficient, and cost effective manner possible that would lead list are located in Appendix 29 and Appendix 30, respectively.
to reduction in the total volume of paper used for general office administration,
publications and reproduction and printing services e.g., changing the format of
transmitting or receiving documents, such as through electronic rather than hard
copy). 459
TEX. GOV’T CODE § 441.1855.
456
TEX. GOV’T CODE § 441.1855(c). 460
The term “AC” means after completion, expiration, or termination of the instrument
457
TEX. GOV’T CODE § 441.1855(b). according to its terms.
458
TEX. GOV’T CODE § 441.185. 461
TEX. GOV’T CODE §§ 403.071, 2155.325; 34 TEX. ADMIN. CODE § 20.488.

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Items determined to be exempt from competitive bidding must 12. SAO Nepotism Disclosure Statement for Purchasing
include the legal citation exempting the purchase. An Exemptions Personnel;
List (Document Type 9) is located in Appendix 31. Documents are 13. TEC Disclosure of Interested Parties Form 1295;
audited for compliance with purchasing procedures to ensure 14. Evidence of Pre-Contract and Contract Amendment Agency
continued delegation to agencies. Reviews and Approvals (e.g., agency verification of best
value standards, agency verification of complete procure-
Each purchase is audited for items which include, but are not limited
ment file);
to, the following:
15. SPD-administered agency-specific procurement require-
1. The invoice matches the PO/contract terms and conditions ments;
as well as the documentation showing the receipt of goods 16. NIGP Class/Item number are listed on purchase order;
delivered or services rendered i.e., the requirement is known
as the “Three-Way Match” rule; 17. The Purchase Category Code (PCC) is correctly selected;

2. Final Bidder List (dated CMBL Listing – extracted from CMBL 18. The correct legal citation is noted on exempt purchases;
using NIGP Class/Item Codes and, if applicable, agency head 19. Verification of proprietary sole source status, authorized
or designee approval of supplements to Bidder List); signature on Proprietary Purchase Justification, Direct
3. Printouts for the following vendor compliance checks: Publication Declaration Statement;
20. Signed Emergency Justification letter;
• Debarment
21. Authorized signatures on all documents;
• SAM
22. Purchase Order Change Notice (POCN) or contract amend-
• Iran, Sudan, and Foreign Terrorist Organization
ment for extending/renewing a contract;
• Boycott Israel
23. Verification that sales tax (and any other tax from which the
• Warrant/Payment Hold; State may be exempt) has not been paid by the agency;
4. Dated ESBD posting printouts for the solicitation, includ- 24. Contracts crossing the biennium contain an Excess Obliga-
ing addenda, and the Notice of Award, if purchase is over tions Prohibited contract clause;
$25,000.00;
25. The itemized sales receipt that supports the applicable point
5. State Use Program and /or TCI Program waivers; of sale purchase using a payment card;
6. Acquisition Plan; 26. PO/contract includes the Essential Provisions (including
7. Complete HUB Subcontracting Plan (HSP); Texas Required Contract Clauses);
8. Vendor responses to solicitation; 27. Most recent version of the agency’s annual Procurement
Plan;
9. Documentation associated with vendor responses evaluated
by committee or bid tabulation; 28. Evidence of LBB reporting; and
10. DIR Exemption printout; 29. Evidence of VPTS reporting.
11. Dated request for SPD Delegation of Authority and SPD
response printout;

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 Statewide Procurement Division

VERSION HISTORY OF THE GUIDE

Release/Revision Date Version Summary of Revisions
June 1, 2018 1.0 Publication Date of the Guide

Non-substantive modifications (e.g., format adjustments, inclusion of

hyperlinks, correction of typographical errors) throughout the Guide.

Non-substantive clarifications to the following sections: RFO

Procurement Method, Procurement Method – Consulting Services,
Evaluation – Evaluation Committee Process, and Appendix Nos. 1, 18,
August 1, 2018 1.1
22, 23, 24.

Substantive revisions to the following sections: Proprietary Purchases,

Fuel, Oil, and Grease Purchases, Emergency Purchases, Commercial
Charge Card/Payment Card, Post-Payment Audits, and Appendix Nos.
5, 6, 12, 29, 30.

Non-substantive modifications (e.g., format adjustments, inclusion of

hyperlinks, correction of typographical errors) throughout the Guide.

Non-substantive clarifications to the following sections: Introduction,

Professional Certification and Training Program, The State Use Program,
and Term Contracts – Overview, Appendix Nos. 21 and 31.

Substantive revisions to the following sections: Quality Assurance Team,

Needs Assessment, Travel Services Contracts, Federal Government
Purchases and Interstate Compacts & Cooperative Agreements,
Direct Publications, Emergency Purchases, DIR Cooperative Contracts
September 5, 2019 1.2
Program, Procurement Method – Professional Services, Procurement
Method – Consulting Services, Procurement Method – Legal Services,
Procurement Method – Texas Disaster Act of 1975, Scope of Work,
Contract Term and Termination, Risk Mitigation Measures, QAT – Review
of Major Information Resources Projects, Texas Register, Evaluation –
Bid Process, Evaluation Committee Recommendation, Contract Terms,
Contract Award & Amendment, Contract and Amendment Notifications,
Contract Manager Responsibilities, Termination for Cause, Termination
for Non-Appropriation Excess Obligations Prohibited, Vendor
Performance Reporting, Records Retention, Post-Payment Audits, and
Appendix Nos. 3, 4, 7, 8, 22, 23, 26, 29, and 30.

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APPENDICES
Appendix 1: Glossary

Appendix 2: Acronyms and Abbreviations

Appendix 3: Selected Statutory State Employment Restrictions and Required Disclosures

Appendix 4: Non-Disclosure and Conflict of Interest Certification for Contract Developers and Purchasers

Appendix 5: SPD Programs and Online Systems

Appendix 6: Sample Acquisition Plan

Appendix 7: Procurement Value Threshold Chart

Appendix 8: Sample Procurement File Checklist

Appendix 9: Proprietary Purchase Justification Template

Appendix 10: Federal and State Surplus Property Programs Procedures

Appendix 11: Sample State of Texas Disaster Declaration

Appendix 12: Sample Evaluation Criteria and Scoring Strategies

Appendix 13: Solicitation Announcement Example

Appendix 14: Pre-Bid/Offer/Proposal Conference Guidelines

Appendix 15: Sample Q&A document

Appendix 16: Sample Solicitation Addendum

Appendix 17: Sample Administrative Review Checklist

Appendix 18: Evaluation Committee Guidelines

Appendix 19: Sample Evaluation Committee Member Scoring Matrix

Appendix 20: Sample Reference Check Form

Appendix 21: List of Preferences

Appendix 22: List of Texas Required Contract Clauses

Appendix 23: List of Recommended Contract Clauses

Appendix 24: Sample Quality Assessment Plan (QAP) Tools

Appendix 25: Sample Post Award Conference Agenda

Appendix 26: Sample Master Contract File Checklist

Appendix 27: Sample Novation Assignment Agreement

Appendix 28: Sample Notices of Termination and Cure Notice

Appendix 29: Purchase Category Code List

Appendix 30: Post-Payment & Procurement Review Agency Document Checklist

Appendix 31: Exemptions List (Document Type 9)

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APPENDIX 1
Glossary

Addendum Bid Tabulation

A written addition, change, or supplement to a solicitation issued The recording of bids and bid data submitted in response to an
prior to the opening date. IFB. The bid tabulation is used for comparison, analysis, and record
keeping.
Advance Payment
The payment for goods or services before their delivery to the Bidder
agency. See Early Payment. An individual or entity that submits a bid. The term includes anyone
acting on behalf of the individual or entity that submits a bid, such as
Automated Information System (AIS) an agent, employee and representative. See Respondent.
Products and services that are associated with computers
(automation) or telecommunications systems as defined in Section Bidders List
2157.001(1) of the Texas Government Code. A list of vendors that have expressed an interest in doing business
with the State. See Centralized Master Bidders List.
Amendment
Written addition or change to a contract. Bid Sample
A sample required to be furnished as part of a bid, for evaluating the
Appropriation quality of the product offered.
Legislative authorization to expend public funds for a specific
purpose. Biennium (State of Texas)
A period of 24 consecutive months, beginning on September 1 of
Assignment each odd-numbered year. Example: September 1, 2017 through
Transfer of contractual rights from one party to another party. August 31, 2019.

Award Bill of Lading

The act of accepting an offer, thereby forming a contract between Document issued by a carrier identifying merchandise and
the State and a vendor. transportation details.

Best Interests of the State Blanket Bond

Most advantageous to the State in light of all relevant circumstances. A performance bond that insures a respondent’s performance on
two or more contracts in lieu of separate bonds for each contract.
Bid
An offer to contract with the State, submitted in response to an IFB. Blanket Order
A purchase order to a contractor for a specified time period, specific
Bid Bond
product and an estimated minimum quantity; with actual delivery
See Bid Deposit.
to only occur in conformance with subsequent authorization(s) by
Bid Deposit the ordering entity. Use of minimum estimated call out quantities is
A deposit required of bidders to protect the State in the event a low advised for this type of order. See Standing Order.
bidder attempts to withdraw its bid or otherwise fails to enter into a
Brand Name
contract with the State.
A trade name or product name which identifies a product as having
been made by a particular manufacturer.

Breach of Contract
Failure to perform a contractual obligation.

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Centralized Master Bidders List (CMBL) Confirmation Order

An online directory, maintained by SPD, containing contact A purchase order issued to a contractor, listing the commodities and
information and product categories of vendors registered to receive terms of an order placed verbally or otherwise, in advance of the
procurement opportunities from public entities. issuance of the purchase order. The original date and contractor’s
representative’s name should be included on the order. It is
Change Order recommended the purchase order include the following statement:
An amendment, clarification, change, or deletion to the original “Confirmation Order – Do Not Double Ship.”
scope of work to a contract.
Consultant
Class and Item A person who provides or proposes to provide the service of
The classification system found in the NIGP Commodity Book. studying or advising a state agency under a contract that does not
involve the traditional relationship of employer and employee. The
Closing Date
term includes a political subdivision but does not include the federal
The date and time that offers or proposals are due in response to
government, a state agency, or a state governmental entity.
a solicitation. Used interchangeably with the term “Opening Date.”
Consulting Services
Commodity
The service of studying or advising a state agency under contract
Generally, the term means supplies, materials or equipment. See IT
that does not involve the traditional relationship of employer and
Commodity Item.
employee. See Major Consulting Services Contract.
Commodity Book
Consumable Procurement Budget
List of NIGP class and item numbers maintained on the CPA website.
That portion of an agency’s budget as identified by comptroller
Competitive Sealed Bidding expenditure codes attributable to consumable supplies, materials
Process of advertising an Invitation for Bids (IFB), the evaluation and equipment.
of the submitted bids, and awarding of the contract in accordance
Contract
with state law.
A legally enforceable agreement between two or more parties.
Competitive Sealed Proposals
Contractor
Process of advertising a Request for Proposal (RFP), the evaluation
A business entity or individual that has a contract to provide goods
of submitted proposals, and awarding of the contract in accordance
or services to the State.
with state law.
Cooperative Purchasing
Competitive Solicitation
A program for qualified entities to use the SPD or DIR contract
The process of inviting and obtaining responses from competing
resources.
vendors in response to advertised competitive specifications,
by which an award is made based on best value. The process Debarment
contemplates giving potential vendors a reasonable opportunity An exclusion from contracting or subcontracting with state agencies
to compete, and requires that all vendors be placed on a level on the basis of any cause set forth in statute or SPD rules,
playing field. Each respondent must respond to the same advertised commensurate with the seriousness of the offense, performance
specifications, terms, and conditions. failure, or inadequacy to perform.
Competitive Specifications Delegated Purchase
A specification stated in such a manner that two or more vendors A purchase made by an agency under the authority of SPD and
can meet the specifications on a level playing field. subject to SPD rules and procedures.

Discount-From-List
Unit prices that are based on a discount from a manufacturer’s
published price list. Ordering entity can validate the discount price
by reviewing the price list or catalog from which the price reduction
is figured.

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 Statewide Procurement Division

Early Payment Historically Underutilized Business (HUB)

The payment for goods or services after receipt but earlier than A business as defined by Chapter 2161 of the Texas Government
the payment due date set forth in Section 2251.021 of the Texas Code and 34 TAC § 20.282.
Government Code. See Advance Payment.
Informal Solicitation
Early Payment Discount An unsealed, competitive solicitation used to obtain offers submitted
A discount from the purchase price allowed to the agency if verbally or in writing for purchases with a value of $25,000 or less.
payment is made within a specified period.
Inspection
Electronic State Business Daily (ESBD) Examination and/or testing of merchandise to determine whether it
An online directory, administered by SPD, that publishes solicitations has been received in the proper quantity and condition and to verify
for the purpose of informing vendors of procurement opportunities that it conforms to the applicable specifications.
and provides public notice of contract awards.
Inspection Report
Equivalent Product A report made as a result of the agency’s inspection, informing the
buyer of a product’s compliance with advertised specifications.
A product that is comparable in performance and quality to the
specified product. Interagency Contract (IAC)
Written understanding between two or more agencies as authorized
Escalation Clause by Chapter 771 of the Texas Government Code.
A clause in a contract providing for a price increase or decrease
under certain specified circumstances. Interlocal Contract
Written understanding between local government entities, a local
Executive Sponsor government entity and a federally recognized Indian tribe, or a local
A high level individual with primary responsibility for implementation government entity and a state agency of Texas or another state as
and operation of the project. In some instances, the executive authorized by Chapter 791 of the Texas Government Code.
sponsor may be the executive head of the entity. In other instances,
the executive sponsor may be the division or program director with Invitation for Bids (IFB)
overall project responsibility. A written solicitation requesting the submission of bids; also
referred to as a bid invitation.
Fiscal Year (State of Texas)
A period of 12 consecutive months, beginning September 1 of each Invoice
year and ending August 31 of the next year. Document from a contractor requesting payment for goods delivered
and/or services rendered.
Goods
The term means supplies, materials, or equipment. IT Commodity Item
Commercial software, hardware, or technology services, other
Grant than telecommunications services, that are generally available
An award of financial assistance, including cooperative agreements, to businesses or the public and for which DIR determines that
in the form of money, property in lieu of money, or other financial a reasonable demand exists in two or more agencies.  The term
assistance paid or furnished by the state or federal government includes seat management, through which an agency transfers
to carry out a program in accordance with rules, regulations its personal computer equipment and service responsibilities to a
and guidance provided by the grantor agency. The term does private vendor to manage the personal computing needs for each
not include technical assistance that provides services instead desktop in the agency, including all necessary hardware, software,
of money, or other assistance in the form of revenue sharing, and support services.
loans, loan guarantees, interest subsidies, insurance, or direct
appropriations. Also, the term does not include assistance, such as Late Response
a fellowship or other lump sum award, for which the grantee is not A response that is received after the date and time established for
required to account. See Uniform Grant Management Standards. receipt of responses to a solicitation.

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Statewide Procurement Division

Lease Purchase Multiple Award Contract Procedure

An installment sale which gives the lessee the right to purchase A purchasing procedure by which SPD establishes one or more
equipment or other fixed assets at an agreed upon price under levels of quality and performance and makes more than one award
certain conditions. Title passes from seller to agency if and at the at each level.
time the option to purchase is exercised. See Operating Lease.
Negotiations
Life-Cycle Costing A consensual bargaining process in which the parties attempt to
A procurement cost analysis technique which considers operating, reach agreement on a disputed or potentially disputed matter. In
maintenance, acquisition price, and other costs of ownership in the a contractual sense, negotiation means the “dealings conducted
award of contracts to ensure that the item acquired will result in between two or more parties for the purpose of reaching an
the lowest total ownership cost during the time the item’s function understanding.”
is required.
Nonresident Bidder
Liquidated Damages For purposes of the reciprocal preference law, a person whose
A specified contract provision that entitles the State to demand a set principal place of business is not in Texas.
monetary amount determined to be a fair and equitable repayment
to the State for loss of service due to contractor’s failure to meet Notice of Award
contract requirements. An official announcement of an executed contract. For SPD, the term
also refers to a letter signed by the Deputy Comptroller or designee
Local Government which creates a contract.
A county, municipality, school district, special district, junior college
district, or other legally constituted political subdivision of the State. Offer
A proposal to contract with the State submitted in response to an
Major Consulting Services Contract RFO.
A consulting services contract for which it is reasonably
foreseeable that the value of the contract will exceed $15,000, Opening Date
or $25,000 for an institution of higher education other than a The date and time that bids are due in response to an IFB. Used
public junior college. interchangeably with the term “Closing Date.”

Managed Contract Operating Lease

A SPD Term Contract that cannot be processed through Texas A contract granting the lessee the use of equipment or other fixed
SmartBuy. The purchase order is prepared by the agency, referencing assets for a specified time in exchange for payment. Title remains
the contract number and pricing, and sent directly to the contractor. with the contractor. See Lease Purchase.

Manufacturer’s Price List Payment Bond

A price list published in some form by the manufacturer and A deposit, pledge, or contract of guaranty supplied by a contractor
available to and recognized by the trade. The term does not include to protect the State against loss due to the contractor’s failure to
a price list prepared especially for a particular solicitation. pay subcontractors and material suppliers.

Minor Technicality Payment Card

A requirement in a solicitation which, if waived or modified by the A commercial charge card that is predominately used for transactions
agency when evaluating responses, would not give a respondent that require payment upfront. Agencies may only use commercial
an unfair advantage over other respondents or result in a material charge cards obtained under SPD established contract(s).
change in the contract.
Performance Bond
A deposit, pledge, or contract of guaranty supplied by a contractor
to protect the State against loss due to the contractor’s inability to
complete the contract as agreed.

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 Statewide Procurement Division

Post-Consumer Materials Recycled Product

Finished products, packages, or materials generated by a business A product that meets the requirements for recycled material content
entity or consumer that have served their intended end uses, and as prescribed by the rules established by the Texas Commission on
that have been recovered or otherwise diverted from the waste Environmental Quality in consultation with CPA.
stream for the purpose of recycling.
Remanufactured Product
Posted Date A product that has been repaired, rebuilt, or otherwise restored
The date a document is made available online to the public. to meet or exceed the OEM performance specifications; provided,
however, the warranty period for a remanufactured product may
Pre-Consumer Materials differ from the OEM warranty period.
Materials or by-products that have not reached a business entity
or consumer for an intended end use, including industrial scrap Rent
material, and overstock or obsolete inventories from distributors Payment for the use of property.
wholesalers, and other companies. The term does not include
materials and by-products generated from, and commonly reused Request for Information (RFI)
within, an original manufacturing process or separate operation A general invitation to the vendor community requesting information
within the same or a parent company. that may be used in a potential future solicitation.

Professional Services Request for Offers (RFO)

Services directly related to the professional practices specified A written solicitation requesting the submission of offers for AIS
by the Professional Services Procurement Act, Chapter 2254, which include hardware, software and other information technology
Subchapter A, of the Texas Government Code. goods and services.

Proposal Request for Proposals (RFP)

A written solicitation requesting the submission of proposals.
An offer to contract with the State, submitted in response to an RFP.
Request for Qualifications (RFQ)
Protest Procedures
A written solicitation requesting the submission of qualifications
Procedures for resolving vendor protests relating to purchasing
or specialized services. Typically used for the procurement of
issues.
professional services.
Public Opening
Responsive
The public opening of bids, offers, or proposals, in which the names
The bid, offer, or proposal complies with all material aspects of
of the respondents to a solicitation are publicly read and recorded.
the solicitation document, including submission of all required
No prices are divulged at an offer or proposal opening as these
documents.
types of solicitations are subject to negotiation.
Respondent
Purchase Order An individual or entity that submits an offer or proposal. The term
A document issued by a customer to a seller, indicating types, includes anyone acting on behalf of the individual or entity that
quantities, and agreed prices for products or services the seller will submits an offer or proposal, such as an agent, employee, and
provide to the customer. representative. See Bidder.
Recycled Material Content Responsible
The portion of a product made with recycled materials consisting of For purposes of the reciprocal preference law, a governmental entity
pre-consumer materials (waste), post-consumer materials (waste), may not award a governmental contract to a nonresident bidder
or both. unless the nonresident bidder underbids the lowest bid submitted by
a responsible resident bidder by the amount authorized by statute.
Recycled Materials
Materials, goods, or products that contain recyclable material,
industrial waste, or hazardous waste that may be used in place of
raw or virgin materials in manufacturing a new product.

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Statewide Procurement Division

Salvage Value Texas Bidder

The estimated value of a property when the user completes its use For the preference to resolve tie bids, “Texas bidder” means a
of the property. business (1) incorporated in Texas, (2) that has its principal place of
business in Texas, or (3) that has an established physical presence
Sealed Bids or Proposals in Texas. See Texas Resident Bidder.
A response which is kept secure and unopened until after the due
date and time specified in the solicitation. Texas Resident Bidder
For purposes of reciprocal preference law, “resident bidder” refers
Service to a person whose principal place of business is in Texas, including
The furnishing of skilled or unskilled labor or professional work. a contractor whose ultimate parent company or majority owner has
its principal place of business in Texas. See Texas Bidder.
Set Aside Contract
Term used to refer to the State Use Program and the Texas Texas SmartBuy
Correctional Industries (TCI) purchasing program. The State’s central e-procurement system for non-IT goods and
services.
Solicitation
A document such as an IFB, RFO, RFP or RFQ requesting responses Texas Specification
from vendors to provide specified goods and services. The term A specification adopted by SPD and used whenever possible in the
also refers to the process of obtaining responses from vendors to purchase of the item involved. Established standard of minimum
provide specified goods and services. quality for products or services purchased in volume by the State.

Standard Uniform Grant Management Standards (UGMS)

The established and fixed measure used in assessing quality or Uniform grant and contract administration procedures, developed
performance. under the authority of Chapter 783 of the Texas Government Code,
to promote the efficient use of public funds in local government and
Standing Order
in programs requiring cooperation among local, state and federal
A purchase order to a contractor for a specified time period during
agencies.
which a specific quantity of product will be delivered on specified
delivery dates. See Blanket Order. Unit Price
The price for a good or service in accordance with the unit of
State
The State of Texas. measure provided in the solicitation.

Statute Vendor
A law enacted by the state or federal government. A potential provider of goods or services to the State.

Successor-in-Interest
Any business entity that acquires or otherwise obtains the controlling
ownership of a business entity.

Surplus
Federal and State surplus property programs administered by TFC.
Each program has its own laws, rules, and procedures.

Term Contract
A contract established by SPD for the purchase or lease of goods
and services used in large quantities by several agencies.

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 Statewide Procurement Division

APPENDIX 2
Acronyms and Abbreviations

AIS Automated Information System DSC Data Center Services (DIR)

ARO After Receipt of Order EIR Electronic Information Resources

BAFO Best and Final Offer ESBD Electronic State Business Daily

BI Bodily Injury (insurance) FOB Free On Board

BLS Bureau of Labor Statistics (federal agency) FOIA Freedom of Information Act (federal)

BOM Bill of Materials FSPP Federal Surplus Property Program

CAO Contract Administration Office General Contract Information

GCI
(Texas SmartBuy Contracts)
Centralized Accounting and Payroll/
CAPPS General Services Administration
Personnel System GSA
(federal agency)
CAT Contract Advisory Team
HSP HUB Subcontracting Plan
CCTS Capitol Complex Telephone System
HUB Historically Underutilized Business
CFR Code of Federal Regulations
IAC Interagency Cooperation Agreement
CMBL Centralized Master Bidders List
ICT Information Communication Technology
CNA Central Nonprofit Administration
IFB Invitation for Bids
COI Conflict of Interest or Certificate of Insurance
IT Information Technology
CO-OP Cooperative Purchasing Program
ITV Interagency Transaction Voucher
COTS Commercial Off the Shelf
LAR Legislative Appropriations Request
CPA Comptroller of Public Accounts
LBB Legislative Budget Board
CPI Consumer Price Index
MIRP Major Information Resources Project
CPO Chief Procurement Officer
MOLA Master Operating Lease Agreement
CRP Community Rehabilitation Program
MOU Memorandum of Understanding
CTCD Certified Texas Contract Developer
National Association of State
NASPO
CTCM Certified Texas Contract Manager Procurement Officials

Deliverable Based Information NDA Non-Disclosure Agreement

DBITS
Technology Services
NIGP National Institute of Governmental Purchasing
DIR Department of Information Resources

DPS Department of Public Safety NOA Notice of Award

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Statewide Procurement Division

OAG Office of the Attorney General SOW Scope of Work or Statement of Work

OCC Outside Counsel Contract SPD Statewide Procurement Division

OEM Original Equipment Manufacturer STMP State Travel Management Program

OMB Office of Management and Budget (federal) T&Cs Terms and Conditions

OMR Open Market Requisition (Request) T&M Time and Materials

OVFM Office of Vehicle Fleet Management TAC Texas Administrative Code

PAR Progress Assessment Report (HSP) TCI Texas Correctional Industries

PCC Purchase Category Code TCO Total Cost of Ownership

PD Property Damage (insurance) TDCJ Texas Department of Criminal Justice

PI Personal Injury (insurance) TEC Texas Ethics Commission

PIN Payee Identification Number TEX-AN Texas Agency Network (DIR)

PM Project Manager TFC Texas Facilities Commission

PO Purchase Order TIBH TIBH Industries (State Use Program)

POCN Purchase Order Change Notice TIN Texas Identification Number

PPI Producer Price Index TPIA Texas Public Information Act

PR Price Request TWC Texas Workforce Commission

QAT Quality Assurance Team TXFS Texas Fleet System

QAP Quality Assessment Plan TXMAS Texas Multiple Award Schedule

REQ Requisition UCC Uniform Commercial Code (federal)

RFA Request for Applications UGMS Uniform Grants Management Standards

RFI Request for Information UOM Unit of Measurement

RFO Request for Offers USAS Uniform Statewide Accounting System

RFP Request for Proposals USC United States Code

RFQ Request for Qualifications USPS United States Postal Service

RTI Recurring Transaction Index VIN Vendor Identification Number

Request to Retain (OAG Outside VPTS Vendor Performance Tracking System

RtR
Counsel Contracts)
VPR Vendor Performance Report
SAM System for Award Management (federal)

SAO State Auditor’s Office

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 Statewide Procurement Division

APPENDIX 3
Selected Statutory State Employment Restrictions and Required Disclosures

TABLE OF CONTENTS

Restrictions During State Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Dealings with Public Servants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Prohibited Financial Interest in Certain Private Vendor Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Contracting with Current Executive Head of State Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Contracts by State Officers with Governmental Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Certain Leases Prohibited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Elected or Appointed Officer’s Private Interest in Measure or Decision . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Prohibition of Economic Benefit Related to Publications and Other Printed Matter . . . . . . . . . . . . . . . . . . . 3

Legislator’s Interest in Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Post-Employment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Certain Employment for Former State Officer or Employee Restricted . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Contracting with Former Executive Head of State Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Contracting with Certain Former Agency Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Representation by Former Officer or Employee of Regulatory Agency Restricted . . . . . . . . . . . . . . . . . . . . 3

Required Disclosure Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Non-Disclosure and Conflict of Interest Certification for Contract Developers and Purchasers . . . . . . . . . . . . . 4

Conflict of Interest Disclosure Statement for Procurement and Contract Management Employees . . . . . . . . . . . 4

State Auditor’s Office Disclosure Statement for Purchasing Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Disclosure of Interested Parties – Texas Ethics Commission Form 1295 . . . . . . . . . . . . . . . . . . . . . . . . . 5

Disclosure of Financial Interest in Consulting Services Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Disclosure of Consulting Services Contract with a Former State Employee . . . . . . . . . . . . . . . . . . . . . . . 6

Disclosure by Outside Financial Advisor or Service Provider . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

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Statewide Procurement Division

Restrictions During State Employment An agency employee or official has a financial interest in a vendor
if the employee or official
Dealings with Public Servants • owns or controls, directly or indirectly, an ownership interest of
Employees of agencies who perform purchasing functions at least 1 percent in the person, including the right to share in
under SPD’s delegated authority shall adhere to the same profits, proceeds, or capital gains or
ethical standards required of CPA employees, and shall avoid • could reasonably foresee that a contract with the person could
all conflicts of interest in their purchasing activities.1 The Deputy result in a financial benefit to the employee or official.7
Comptroller and an employee who exercises discretion in
connection with a contract, payment, claim, or other pecuniary Contracting with Current Executive Head of State
transaction under SPD’s purchasing authority may not have an Agency
interest in, or in any manner be connected with, a contract or bid
for a purchase of goods or services by an agency of the State; A state agency may not enter into a contract with the executive
or in any manner, including by rebate or gift, accept or receive head of the state agency or with a person who employs a current
from a person to whom a contract may be awarded, directly or executive head of a state agency, unless the governing body
indirectly, anything of value or a promise, obligation, or contract
• votes in an open meeting to approve the contract, and
for future reward or compensation.2 For purposes of this statute,
the terms “value,” “reward,” and “compensation” include anything • notifies the Legislative Budget Board, not later than the fifth
with a monetary value of $5 or more.3 This prohibition includes day before the date of the vote, of the terms of the proposed
contract.8
the spouse and dependent children of the Deputy Comptroller
or agency employee.4
Contracts by State Officers with Governmental Entities
Prohibited Financial Interest in Certain Private Vendor A state officer9 may not solicit or accept from a governmental entity
Contracts a commission fee, bonus, retainer, or rebate that is compensation
for the officer’s personal solicitation for the award of a contract for
A state agency5 may not enter into a contract with a private vendor
services or sale of goods to a government entity.10 This prohibition
for the purchase of goods or services solicited through a PO if the
does not apply to a court appointment or a contract that is awarded
amount of the PO exceeds $25,000 and any of the following agency
to the state officer by competitive bid as provided by law and that is
officers or employees have a financial interest in the vendor:
not otherwise prohibited by law.11
• a member of a state agency’s governing body,
• the governing official, executive director, general counsel, chief
Certain Leases Prohibited
procurement officer, or procurement director; or A member of the Legislature, an executive or judicial officer elected
• a family member related to one of the persons described in in a statewide election, or a business entity in which the legislator
items (1) or (2) within the second degree of kinship by affinity or officer has a substantial interest may not lease any office space
or consanguinity.6 or other real property to the State, a state agency, the Legislature
or legislative agency, the Supreme Court of Texas, the Court of
Criminal Appeals, or a state judicial agency.12 However, a member
of the Legislature or a business entity in which the legislator has
a substantial interest may donate the use of office space that the
1
34 TEX. ADMIN. CODE § 20.157. member or entity owns and that is located in the member’s district
2
TEX. GOV’T CODE § 2155.003.
to the house of the Legislature in which the member serves to be
3
1 TEX. ADMIN. CODE § 45.3(b)(3).
4
1 TEX. ADMIN. CODE § 45.3(b)(1).
5
“State agency” includes the Texas Department of Transportation and an institution
of higher education acquiring goods or services under Section 51.9335 or
7
TEX. GOV’T CODE § 2261.252(c); 34 TEX. ADMIN. CODE § 20.158(c). A financial
73.115, Education Code; however, the prohibition discussed does not apply interest does not include a retirement plan, a blind trust, insurance coverage, or an
to the Employees Retirement System of Texas, except for a contract with a ownership interest of less than one percent in a corporation. TEX. GOV’T CODE §
nongovernmental entity for claims administration of a group health benefit plan. 2261.252(d).
TEX. GOV’T CODE § 2261.251. Additionally, Texas Education Code § 51.923 8
TEX. GOV’T CODE § 669.003.
governs the conflicts of interest of the members of the governing board of an 9
A “state officer” is defined as an elected officer, an appointed officer, a salaried
institution of higher education. TEX. GOV’T CODE § 2261.252(f). appointed officer, an appointed officer of a major state agency, or the executive
6
TEX. GOV’T CODE §§ 2261.252(b); 2261.252(e). See also Tex. Att'y Gen. Op. No. head of a state agency. TEX. GOV’T CODE § 572.002(12).
KP-0259 (2019) (determining that Section 2261.252(e) of the Texas Government 10
TEX. GOV’T CODE § 572.056(a).
Code does not abrogate the common-law conflict of interest doctrine for state 11
TEX. GOV’T CODE § 572.057(b).
agency purchase orders of $25,000 or less). 12
TEX. GOV’T CODE § 572.057(a).

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 Statewide Procurement Division

used for the member’s official business.13 A lease made in violation Contracting with Former Executive Head of State Agency
of this prohibition is void.14
A state agency may not enter into a contract with a person who
at any time during the four years before the date of the contract
Elected or Appointed Officer’s Private Interest in was the executive head of the state agency, or with a person
Measure or Decision who employs a former executive head of a state agency, unless
An elected or appointed officer,15 who is a member of a board or the governing body (1) votes, in an open meeting, to approve the
commission having policy direction over a state agency and who contract, and (2) notifies the Legislative Budget Board, not later
has a personal or private interest in a measure, proposal, or decision than the fifth day before the date of the vote, of the terms of the
pending before the board or commission, shall publicly disclose the proposed contract.22
fact to the board or commission in an open meeting and may not
vote or otherwise participate in the decision.16 An individual who Contracting with Certain Former Agency Employees
violates this prohibition may be removed from office.17 A state agency23 may not enter into an employment contract, a
professional services contract under Chapter 2254 of the Texas
Prohibition of Economic Benefit Related to Publications Government Code, or a consulting services contract under Chapter
and Other Printed Matter 2254 of the Texas Government Code with a former or retired
In accordance with Article XVI, Section 21, of the Texas Constitution, employee of the agency before the first anniversary of the last
an officer or employee of the State may not, directly or indirectly, date on which the individual was employed by the agency, if
profit by or have a pecuniary interest in the preparation, printing, appropriated money will be used to make payments under the
duplication, or sale of a publication or other printed matter issued contract.24 This restriction does not prohibit an agency from entering
by a department or agency of the executive branch.18 A person who into a professional services contract with a corporation, firm, or
violates this prohibition shall be dismissed from state employment.19 other business entity that employs a former or retired employee of
the agency within one year of the employee’s leaving the agency,
Legislator’s Interest in Contracts provided that the former or retired employee does not perform
services on projects for the corporation, firm, or other business
A member of the Legislature is prohibited from having an interest in entity that the employee worked on while employed by the agency.25
a contract with the State or county if the contract was authorized by
any law passed during the term for which the legislator was elected.20
Representation by Former Officer or Employee of
Regulatory Agency Restricted
Post-Employment Restrictions
There are two general “revolving door” provisions in Section
Certain Employment for Former State Officer or 572.054 of the Texas Government Code. For purposes of Section
Employee Restricted 572.054 of the Texas Government Code, CPA, the Secretary of
State, and DIR are included within the definition of “regulatory
A former state officer or employee of a state agency who during
agency.”26 Employees of certain agencies may be governed by post-
the period of state service or employment participated on behalf of
employment provisions stricter than those in Section 572.054 of the
a state agency in a procurement or contract negotiation involving
Texas Government Code.
a person may not accept employment from that person before
the second anniversary of the date the contract was signed or the
procurement was terminated or withdrawn.21

13
TEX. GOV’T CODE §572.057(d).
14
TEX. GOV’T CODE § 572.057(b).
15
TEX. GOV’T CODE § 572.002(1), (4) (defining appointed officer and elected officer,
respectively). 22
TEX. GOV’T CODE § 669.003.
16
TEX. GOV’T CODE § 572.058(a). 23
For purposes of this section, “state agency” includes a “public senior college or
17
TEX. GOV’T CODE § 572.058(b). university,” as that term is defined by Section 61.003 of the Education Code.
18
TEX. GOV’T CODE § 2052.302. TEX. GOV’T CODE § 2252.901(d).
19
TEX. GOV’T CODE § 2052.302. 24
TEX. GOV’T CODE § 2252.901(a).
20
TEX. CONST. art. III, § 18. 25
TEX. GOV’T CODE § 2252.901(a).
21
TEX. GOV’T CODE § 572.069. 26
TEX. GOV’T CODE §§ 572.002(8), Tex. Gov’t Code 572.054(g), (g-1).

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Statewide Procurement Division

Former Board Members and Executive Directors. A former Required Disclosure Statements
member of the governing body or a former executive head of
a regulatory agency may not make any communication to or Non-Disclosure and Conflict of Interest Certification for
appearance before an officer or employee of the agency in Contract Developers and Purchasers
which the member or executive head served before the second
Employees of agencies performing purchasing functions under
anniversary of the date the member or executive head ceased to
SPD’s delegated authority are required to adhere to the same
be a member of the governing body or the executive head of the
ethical standards required of CPA employees.33 Contract Developers
agency if the communication or appearance is made (1) with the
and purchasers certify their compliance with the conflict of interest
intent to influence and (2) on behalf of any person in connection
prohibition described in Section 2155.003 of the Texas Government
with any matter on which the person seeks official action.27
Code by completing the Non-Disclosure and Conflict of Interest
Former State Officers and Employees. A former state officer Certification for Contract Developers and Purchasers located in
or employee of a regulatory agency who ceases service or Appendix 4. Contract Developers and Purchasers must sign the
employment with that agency on or after January 1, 1992, and is certification prior to engaging in any purchasing activity. In addition,
compensated at or above a certain salary level, may not represent state employees have a responsibility to promptly disclose any
any person or receive compensation for services rendered on actual or potential conflict of interest that occurs at any time during
behalf of any person regarding a particular matter in which the the procurement process. It is best practice for the Non-Disclosure
former officer or employee participated during the period of state and Conflict of Interest Certification for Contract Developers and
service or employment, either through personal involvement or Purchasers to be signed on a regular basis. The timing of when
because the case or proceeding was a matter within the officer’s or the certification must be signed on a periodic basis (e.g., every
employee’s official responsibility.28 This restriction does not apply to fiscal year, calendar year, employment date anniversary) may vary
a rulemaking proceeding that was concluded before the officer’s or according to each agency’s policy.
employee’s service or employment ceased.29
Conflict of Interest Disclosure Statement for
A former state officer or employee covered by this provision Procurement and Contract Management Employees
is prohibited from ever representing any person or receiving
Each state agency employee or official who is involved in
any compensation for services rendered on behalf of any
procurement or in contract management for a state agency shall
person regarding a particular matter in which the individual
disclose to the agency any potential conflict of interest specified
“participated” while serving with the agency. A “particular matter”
by state law or agency policy that is known by the employee or
means a specific investigation, application, request for a ruling or
official with respect to any contract with a private vendor or bid
determination, rulemaking proceeding, contract, claim, charge,
for the purchase of goods or services from a private vendor by the
accusation, arrest, or judicial or other proceeding.30 “Participated”
agency.34 This disclosure requirement applies only to a contract for
means to have taken action as an officer or employee through
the purchase of goods or services solicited through a purchase
decision, approval, disapproval, recommendation, giving advice,
order if the amount of the purchase order exceeds $25,000.35 For
investigation, or similar action.31 The determination of whether an
contracts subject to the disclosure requirement, a state agency
individual participated in a matter is not limited to those of personal
employee or official is required to disclose any potential conflict of
involvement. Participation can mean having supervisory authority
interest specified by state law or agency policy that is known by the
over others who have personal involvement with a particular matter,
employee or official at any time during
even if such authority was never exercised.32
• the procurement process, from the initial request for bids for
the purchase of goods or services from a private vendor until
the completed final delivery of the goods or services or
• the term of a contract with a private vendor.36

27
TEX. GOV’T CODE § 572.054(a).
28
TEX. GOV’T CODE § 572.054(b)-(c).
29
TEX. GOV’T CODE § 572.054(d). 33
1 TEX. ADMIN. CODE § 20.157.
30
TEX. GOV’T CODE § 572.054(h)(2). 34
TEX. GOV’T CODE § 2261.252(a).
31
TEX. GOV’T CODE § 572.054(h)(1). 35
TEX. GOV’T CODE § 2261.252(e).
32
Tex. Ethics Comm. Op. No. 285 (1995). 36
TEX. GOV’T CODE § 2261.252(a-1).

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 Statewide Procurement Division

State Auditor’s Office Disclosure Statement for execute the contract, and
Purchasing Personnel • the governing body does not participate in the selection of the
Before a state agency37 may award a major contract, defined as business entity with which the contract is entered into.47
a contract with a value of at least $1 million,38 for the purchase
A disclosure of interested parties statement is not required for
of goods or services to a business entity, each of the agency’s
the following contracts if entered into or amended on or after
purchasing personnel39 working on the contract must submit a
January 1, 2018:
completed disclosure statement to the administrative head of the
state agency.40 The purchasing personnel must disclose, on the form • sponsored research contract of an institution of higher education;
prescribed by the State Auditor’s Office, any relationship about
• an interagency contract of a state agency or an institution of
which the purchasing personnel is aware with an employee, a higher education;
partner, a major stockholder, a paid consultant with a contract with
the business entity the value of which exceeds $25,000, or other • a contract related to health and human services if
owner of the business entity that is within the degree of kinship 1. the value of the contract cannot be determined at the time
described by Section 573.002 of the Texas Government Code.41 The the contract is executed and
SAO Disclosure Statement for Purchasing Personnel is located on 2. any qualified vendor is eligible for the contract;
the SAO website.42
• a contract with a publicly traded business entity, including a
Disclosure of Interested Parties – Texas Ethics wholly owned subsidiary of the business entity;
Commission Form 1295 • a contract with an electric utility, as that term is defined by Sec-
tion 31.002 of the Utilities Code; or
A governmental entity43 or state agency44 may not enter into a
contract with a business entity45 that requires an action or vote by • a contract with a gas utility, as that term is defined by Section
the governing body of the entity or agency before the contract may 121.001 of the Utilities Code.48
be signed, has a value of at least $1 million, or is for services that
For purposes of this disclosure requirement, an “interested party”
would require a person to register as a lobbyist under Chapter 305
means a person who has a controlling interest in a business entity
of the Texas Government Code unless the business entity submits
with whom a governmental entity or state agency contracts or who
a disclosure of interested parties statement to the governmental
actively participates in facilitating the contract or negotiating the
entity or state agency.46 A contract does not require an action or vote
terms of the contract, including a broker, intermediary, adviser, or
by the governing body of a governmental entity or state agency if
attorney for the business entity.49
• the governing body has legal authority to delegate to its staff
the authority to execute the contract, For contracts subject to this disclosure requirement, the business
entity must submit the disclosure of interested parties on the form
• the governing body has delegated to its staff the authority to prescribed by the Texas Ethics Commission to the governmental
37
For purposes of this statute “state agency” includes an institution of higher entity or state agency at the time the business entity submits the
education as defined by Section 61.003 of the Education Code and contracts of the signed contract to the governmental entity or state agency.50 The
Texas Department of Transportation that relate to highway construction or highway
engineering. TEX. GOV’T CODE § 2262.004(d).
Form 1295 Certificate of Interested Parties is located on the Texas
38
TEX. GOV’T CODE § 2262.001(4). Ethics Commission website.51 Not later than the 30th day after the
39
The term “purchasing personnel” means an employee of a state agency who makes date the governmental entity or state agency receives a disclosure
decisions on behalf of the state agency or recommendations regarding (1) contract
of interested parties from the business entity, the governmental
terms or conditions on a major contract, (2) who is to be awarded a major contract,
(3) preparation of a solicitation for a major contract, or (4) evaluation of a bid or entity or state agency must log into the Texas Ethics Commission
proposal. TEX. GOV’T CODE § 2262.004(a)(2). website to acknowledge receipt of the applicable business entity’s
40
TEX. GOV’T CODE § 2262.004(b). disclosure statement.52
41
TEX. GOV’T CODE § 2262.004(b).
42
The SAO website is located at www.sao.texas.gov.
43
The term “governmental entity” means a municipality, county, public school district,
or special-purpose district or authority. TEX. GOV’T CODE § 2252.908(a)(2).
44
The term “state agency” means a board, commission, office, department, or
other agency in the executive, judicial, or legislative branch of state government
including an institution of higher education as defined by Section 61.003, 47
1 TEX. ADMIN. CODE § 46.1(c).
Education Code. TEX. GOV’T CODE § 2252.908(a)(4). 48
TEX. GOV’T CODE § 2252.908(c).
45
The term “business entity” means any entity recognized by law through which 49
TEX. GOV’T CODE § 2252.908(a)(3).
business is conducted, including a sole proprietorship, partnership, or corporation. 50
TEX. GOV’T CODE § 2252.908(d)-(e).
TEX. GOV’T CODE § 2252.908(a)(1). 51
The Texas Ethics Commission website is located at www.ethics.state.tx.us.
46
TEX. GOV’T CODE § 2252.908(d). 52
TEX. GOV’T CODE § 2252.908(f).

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Statewide Procurement Division

Disclosure of Financial Interest in Consulting Services Disclosure by Outside Financial Advisor or Service
Contract Provider
An officer or employee of a state agency shall report to the chief Not later than April 15th of each year, a financial advisor or service
executive of the agency, not later than the 10th day after the date provider described by Section 2263.004 of the Texas Government
on which a private consultant submits an offer to provide consulting Code shall disclose certain relationships and direct or indirect
services to the agency, any financial interest that pecuniary interests in writing, on a prescribed form, to the
administrative head of the applicable state governmental entity and
• the officer or employee has in the private consultant who to the state auditor. The financial advisor or service provider shall
submitted the offer or disclose a relationship without regard to whether the relationship
• an individual who is related to the officer or employee within is a direct, indirect, personal, private, commercial, or business
the second degree by consanguinity or affinity, as determined relationship.56 The financial advisor or service provider shall promptly
under Chapter 573 of the Texas Government Code, has in the file a new or amended statement with the administrative head of
private consultant who submitted the offer.53 the applicable state governmental entity and with the state auditor
whenever there is new information to report.57
This reporting requirement applies to all consulting services
contracts and renewals, amendments, and extensions of consulting
services contracts.54

Disclosure of Consulting Services Contract with a

Former State Employee
An individual who offers to provide consulting services to a state
agency and who has been employed by that agency or by another
agency at any time during the two years preceding the making of
the offer shall disclose in the offer

• the nature of the previous employment with the agency or the

other agency,
• the date the employment was terminated, and
• the annual rate of compensation for the employment at the
time of its termination.55

53
TEX. GOV’T CODE § 2254.032(a).
54
TEX. GOV’T CODE § 2254.032(b). TEX. GOV’T CODE § 2263.005(b).
56

55
TEX. GOV’T CODE § 2254.033(a). TEX. GOV’T CODE § 2263.005(e).
57

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 Statewide Procurement Division

APPENDIX 4
Non-Disclosure and Conflict of Interest Certification for Contract Developers and Purchasers

[COMPTROLLER STATEWIDE PROCUREMENT EMPLOYEE] NON-DISCLOSURE AND

CONFLICT OF INTEREST CERTIFICATION
Fiscal Year [2020] Certification

A special responsibility is imposed on all people who are entrusted with the disposition of the state’s funds. The fiduciary nature of
the purchasing function, particularly when expending public funds, makes it critical that all persons involved in the process remain
independent, free of obligation or suspicion, and free from the perception of impropriety. Premature or unauthorized disclosure
of information regarding a proposed solicitation irreparably harms the State’s interests and may constitute a violation of Section
39.02 of the Texas Penal Code, the antitrust laws of the United States and the State of Texas, and/or the Texas Public Information
Act (Chapter 552, Texas Government Code). Credibility and public confidence are vital throughout the purchasing and contracting
system. The appearance of impropriety can be as harmful as the conduct itself It is with this in mind that the following certification
is set forth.

I,______________________________, the undersigned hereby certify that I understand and agree to be bound by the commitments
contained herein.

I participate in procurement processes for the [Agency Name].

I agree that I will disclose any information about which I am aware regarding my involvement in any agency decision-making
or recommendations on a procurement that could constitute a conflict of interest or create the appearance of impropriety. I
understand my relationship with an employee of a business entity that is or may be a respondent or subcontractor may constitute
a conflict of interest when that employee is my spouse, child, spouse’s child, parent, spouse’s parent, child’s spouse, brother,
sister, grandparent, spouse’s grandparent, grandchild, spouse’s grandchild, spouse’s sibling, sibling’s spouse, nephew, niece,
uncle, aunt, great-grandparent, or great-grandchild. For purposes of this disclosure, a step-relationship or adoptive relationship
is considered the same degree as a natural relationship. If, during any procurement process, I become aware of any actual,
potential, or perceived conflict, I will immediately notify my manager and [the assigned legal counsel or my agency’s ethics office].

I agree that I will not participate in any procurement process if I have, or if I am aware that any member of my immediate family
has, an actual, potential, or perceived financial interest in a procurement, including, but not limited to, employment or prospective
employment, in a business or organization that may be a respondent (a respondent may be called a proposer, an offeror, a bidder
or other like term) or a subcontractor to a respondent. The term “immediate family,” as used in this Certification means: One’s
parents, spouse, children, brothers, and sisters, whether residing together or not.

I agree that I will not solicit or accept anything of value from an actual or potential respondent. Should I receive a gift, whether
solicited or unsolicited, from an actual or potential respondent or a current, potential, or previous vendor, I agree to follow my
agency’s policies regarding disposal of the gift.

When participating in procurement processes, I will act on my own accord and not act under duress. I will not participate in a
procurement process if I am currently employed by, or if I am receiving any compensation from, or if I will be the recipient of any

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Statewide Procurement Division

present or future economic opportunity, employment, gift, loan, gratuity, special discount, trip, favor, or service in return for
favorable consideration of a respondent(s) during a procurement process.

I will not let any preconceived position I may have regarding the relative merits impact the fair and impartial performance of my
responsibilities, nor will I perform my responsibilities based on a personal preference or position regarding the worth or standing
of any respondents participating in any procurement. Further, I will, to the utmost of my ability, ensure that the solicitation and
the specifications provide all potential respondents an equal and fair opportunity to submit a proposal for evaluation, taking
care to ensure that specifications and evaluations are not intended to favor any particular respondent, performing any and all
tasks related to the solicitation in an unbiased manner, to the best of my ability, and with the best interest of the State of Texas
paramount in all decisions.

I agree not to disclose or otherwise divulge any information pertaining to a procurement including, but not limited to, the
following: the development of the solicitation, the content of any response received, the ranking of any response, or the status
of the procurement, to anyone other than authorized agency personnel (e.g., approved evaluators, management) assigned
to the procurement unless such communication is lawful and in the ordinary course of business consistent with my agency’s
purchasing policy. I understand the terms “disclose or otherwise divulge” to include but are not limited to, reproduction of any
part or portion of any response, or removal of same from designated areas without prior authorization from my manager. If I
receive a request for information regarding a procurement from a vendor or other member of the public, I will follow my agency’s
procedures for responding to such requests which may include providing notification to personnel designated by my agency to
manage public information requests.

I agree to perform any and all duties relating to the award process in an unbiased manner, to the best of my ability, and with the
best interest of the State of Texas paramount in all decisions.

[Agency-specific additional certifications:

Agency may insert additional text here.
Add this section only if the agency desires to include additional agency-specific certifications on this form.]

I will immediately inform both my management and [the legal counsel assigned to my division or my agency’s ethics office] if, at
any time during the procurement process, any of these statements are no longer true and correct.

I have been given the opportunity to review this statement prior to signing. If I have questions or concerns about this statement,
I am to contact my management or [assigned legal counsel or my agency’s ethics office]. I have not made any changes or
deletions on this form without informing my manager or [assigned legal counsel or my agency’s ethics office].

Should I violate any of the conditions of this agreement, I understand that I may be subject to the agency’s disciplinary policies
as well as possible actions relating to any professional certifications or licenses that I may hold.

___________________________________ __________________________

(Signature) (Date)

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 Statewide Procurement Division

APPENDIX 5
SPD Programs and Online Systems

Programs
Statewide Procurement Policy and Outreach
The Statewide Procurement Policy and Outreach program consists of the Outreach team, the Training and Policy Development team, and the
Procurement Oversight & Delegation team. This program conducts policy research, performs solicitation reviews, and approves delegation
of purchasing authority for services. The Outreach team provides customer support for procurement inquiries including, but not limited to,
questions regarding the Texas SmartBuy support and memberships, the Centralized Master Bidder’s List, and Vendor Performance reporting.
To contact the Outreach team, please call 512-463-3034, option #1, or email spd.outreach@cpa.texas.gov.

The Training and Policy Development team develops and administers the contract development and contract management training for
certification of public procurement professionals. The team also provides continuing education courses required for maintenance of
certifications. To contact the Training and Policy Development team, please call (512) 463-5355, or email ctp@cpa.texas.gov.

Statewide Contract Development

The Statewide Contract Development team develops statewide contracts for use by state agencies, institutions of higher education, and
Texas SmartBuy Members for a broad range of goods and services. The Statewide Contract Development team is responsible for issuing
and overseeing solicitations that will establish Term Contracts and contracts for non-delegated goods and services through competitive
solicitation processes. In addition, TXMAS contracts are developed by the Statewide Contract Development team from contracts awarded by
the federal government or another governmental entity of another state. To contact the Statewide Contract Development team, please call
(512) 463-7985, or email open.market@cpa.texas.gov.

Statewide Contract Management Office

The Statewide Contract Management Office assists state agencies, institutions of higher education, Texas SmartBuy Members, contractors,
and internal customers with day-to-day contract management, contract administration, reporting requirements, and vendor performance
issues related to statewide contracts. To contact the SPD Contract Management Office, please call (512) 463-3034, or email spd.cmo@cpa.
texas.gov.

Historically Underutilized Business Program

The Statewide Historically Underutilized Business (HUB) Program promotes full and equal business opportunities in an effort to remedy
disparity in state procurement and contracting. The Statewide HUB Program collaborates with various minority and women business trade
organizations and development centers to circulate information pertaining to the initiatives of the Statewide HUB Program. To contact the
Statewide HUB Program, please call (512) 463-3377, or email StatewideHUBProgram@cpa.texas.gov.

Office of Vehicle Fleet Management

The Office of Vehicle Fleet Management (OVFM) is charged with the establishment and management of the state vehicle reporting system,
a computerized database known as the Texas Fleet System (TXFS), to assist state agencies and institutions of higher education with the
management of their fleet vehicles. The OVFM is also charged with the creation, publication and distribution of the biennial State of the Fleet
Report. To contact the OVFM, please call (512) 936-8458, or email ovfm@cpa.texas.gov.

State Travel Management Program

The State Travel Management Program (STMP) provides contract travel services to state agencies, institutions of higher education, and
travel-eligible Texas SmartBuy members including local governments, public school districts, charter schools and community colleges. These
contracts help the State manage travel expenditures, monitor travel activity, and provide discounted travel services resulting in a more
efficient use of taxpayer dollars. To contact the STMP, please call (512) 463-3435, or email STMP@cpa.texas.gov.

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Statewide Procurement Division

Statewide Mail Operations

Statewide Mail Operations provides state agencies and institutions of higher education a variety of mail operations services including
delivery, collection and metering of United States Postal Service (USPS) domestic and international mail as well as delivery and collection of
state warrants. The interagency mail service transports more than one million pieces of mail between state agencies annually, eliminating
the need to pay postage for items delivered between state agency locations using this service. To contact Statewide Mail Operations, please
call (512) 463-9520 or (512) 463-3440, or email spd.mailroom@cpa.texas.gov.

Online Systems
Electronic State Business Daily
The Electronic State Business Daily (ESBD) is an online application. The application is used for posting solicitations for the purpose
of informing vendors of procurement opportunities and providing public notice of contract awards. Information on access to and use of
the ESBD is found in the ESBD Guide. To contact the SPD Outreach team regarding issues or questions related to the ESBD, please call
(512) 463-3034, or email esbdsupport@cpa.texas.gov.

Centralized Master Bidder’s List

The Centralized Master Bidder’s List (CMBL) is an online directory that provides public procurement professionals the ability to foster
competition between vendors. The CMBL provides the ability to develop a mailing list of vendors, which may be tailored based on the
products or services provided by the vendors and the specific district(s) the vendors serve. For assistance in registration or general questions
regarding the CMBL, please contact the CMBL Help Desk at (512) 463-3459, or email e.cmbl@cpa.texas.gov.

Texas SmartBuy Online Ordering System

Texas SmartBuy is the State’s central eProcurement system for non-IT goods and services. State agencies and other Texas SmartBuy
members can search SPD contracts and place purchase orders through Texas SmartBuy. Local governments that wish to purchase from SPD
contracts must first join the Texas SmartBuy Membership program. Information regarding Texas SmartBuy is located in the Texas SmartBuy
Public User Guide. To contact the SPD Outreach team regarding questions related to Texas SmartBuy, please call (512) 936-2764, or email
txsmartbuy@cpa.texas.gov.

Procurement Oversight & Delegation Portal

The Procurement Oversight & Delegation web portal is used by state agencies to submit

1. requests for SPD delegation authority for service contracts with an anticipated value of more than $100,000,
2. solicitations that have an anticipated value of $5 million or greater for CAT review, and
3. solicitations for major information resources projects that require QAT review.

To contact the Procurement Oversight & Delegation team, please call (512) 463-2410, or email spd.oversight@cpa.texas.gov.

Vendor Performance Tracking System

The Vendor Performance Tracking System (VPTS) provides the state procurement community with a comprehensive online tool for
evaluating vendor performance to reduce risk in the contract award process. For information on vendor performance reporting, please
see the VPTS User Guide. To contact the SPD Outreach team regarding questions related to the VPTS, please call (512) 463-3913, or email
vendor.performance@cpa.texas.gov.

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 Statewide Procurement Division

APPENDIX 6
Sample Acquisition Plan

ACQUISITION PLAN

Agency Name
[Solicitation Name]

Document Version: Revision Date:

Requested Contract Start Date:

Projected Award and Start Date:

Projected Contract Completion Date:

Projected Contract Closeout Date:

Contract Developer
Name Title/Division

Signature Date

Executive Sponsor (if designated)

Name Title/Division

Signature Date

Contract Manager
Name Title/Division

Signature Date

End-User Division Director/Manager

Name Title/Division

Signature Date

Project Manager
Name Title/Division

Signature Date

Budget & Internal Accounting

Name Title

Signature Date

(This is agency specific based on who the agency wants approving the Acquisition Plan)

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Statewide Procurement Division

Section 1. Solicitation Overview

1.1 Needs Assessment

(Describe the business reason(s) for initiating the solicitation, specifically stating the business problem.)

1.2 Justification of Solicitation Procurement Method

(Describe the reason for choosing IFB/RFP/RFO/RFQ/RFA.)

1.3 Contract Goals and Objectives

(Describe the business goals and objectives of the contract.)

1.4 Solicitation/Contract Scope of Work

(Describe the contract scope. The scope defines contract limits and identifies the products and/or services
delivered under the contract. The scope establishes the boundaries of the contract and should describe
products and/or services that are outside of the contract scope.)

Contract Includes:

Contract Excludes:

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 Statewide Procurement Division

1.5 Critical Success Factors

(Describe the factors or characteristics that are deemed critical to the success of the contract, such that, in
their absence the contract will fail.)

Critical Success Factors:

1.6 Assumptions

Assumptions:

1.7 Constraints

Constraints:

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Statewide Procurement Division

1.8 Potential Risks

(Identify potential risks related to the procurement/contract. Consider all major contract risks, including
information security risks.)

Risk Risk Details

1.9 Insurance and Bonds

(Check the box if proof of insurance or bond is to be provided, and then designate minimum amount of
coverage.)

Type of Insurance and/or Bond(s)

Required Minimum Amount of Coverage
To Be Provided

 Commercial General Liability

 EO/Professional Liability

 Workers Comp/Employer Liability

 Umbrella/Excess Insurance

 Auto Insurance Liability

 Crime/Employee Dishonesty

 Cyber Liability

 Performance Bond

 Other Insurance/Bond

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 Statewide Procurement Division

Section 2. Internal Calendar of Events

(Examples of activities for an internal calendar of events are listed in the table below. The activities in the
Internal Calendar of Events should be tailored to the specific procurement.)

Internal Calendar of Events

Activity Planned Start Date Estimated Completion

Budget (approval/questions)

Kick Off Meeting (Contract Developer, Contract

Manager, End User

Draft Solicitation

Agency Approvals for Solicitation Issuance

CAT Review ≥ $5M

SPD Delegation Review: Services > $100K
SPD Delegation Review: Goods > $50K

Solicitation Issued

Pre-Bid/Offer/Proposal Conference

Due Date for Written Questions

Date of Issuance of Agency’s Written Answers

Due Date for Responses

Internal Post Award Meeting

Vendor Selection
Evaluation Committee (RFP, RFO, RFQ) or Bid
Tabulation (IFB)

Negotiation (if permitted) and Contract

Formation

Contract Award

Transition Meeting Between Contract Developer

and Contract Manager

Post Award Meeting with Contractor

Project Schedule

Contract End Date

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Statewide Procurement Division

Section 3. Contract Organization Structure
3.1 Contract Administration Team
(Identify Contract Developer, Contract Manager, end-user, project manager, legal counsel, and any other
person representing the agency contract team structure.)

Role Resource Name

Contract Developer

Contract Manager

End-user

Project Manager

Legal Counsel

3.2 Roles and Responsibilities Detail

(Examples of responsibilities for each role are listed in the table below. The responsibilities for each role
should be tailored to the specific procurement.)

Role Responsibility
Contract Developer Perform the following activities, prior to contract execution:
• receive and process requisitions,
• assess need,
• develop and review specifications,
• develop and review scopes of work,
• identify and select procurement method,
• identify and prepare evaluation criteria,
• prepare and advertise solicitation,
• provide guidance to evaluation committee,
• negotiate terms and conditions, and
• prepare and complete contract award documents.

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 Statewide Procurement Division

Role Responsibility
Contract Manager Participate with the procurement team in solicitation development and the review of
contract documents.

Serve as the primary point of contact for agency communication with the contractor
regarding all matters pertaining to the contract.

Manage any state property used in contract performance, e.g., computers, telephones,
identification badges.

Implement a quality control and contract monitoring process.

Monitor the contractor’s progress and performance to ensure products and services
procured conform to the contract requirements and keep timely records of findings.

Consult with agency legal counsel in a timely manner to address any legal concerns and/or
issues.

Manage, approve, and document any changes to the contract through the amendment
process authorized by the terms of the contract.

Inspect and approve the products and/or services by submitting a written document
accepting the deliverables or obtain documentation from end users responsible for receipt
that inspection and approval have been completed.

Verify accuracy of invoices and authorizing payments consistent with the contract terms.

Monitor the contract budget to ensure sufficient funds are available throughout the terms
of the contract.

Identify and resolve disputes with the contractor in a timely manner.

Exercise state remedies, as appropriate, when a contractor’s performance is deficient.

Maintain appropriate records in accordance with records retention policy.

Confirm all products and/or services have been delivered and delivery is completed prior to
the expiration date of the contract.

Perform contract closeout processes by ensuring the contract file contains all necessary
contract documentation, formal acceptance documented, vendor performance reported to
VPTS, and document lessons learned.

End-user Gather requirements and provide end-user support working closely with the Contract
Developer and Contract Manager, as appropriate.

Provide feedback to Contract Developer and Contract Manager and other procurement
team members on process change suggestions.

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Statewide Procurement Division

Role Responsibility
Project Manager Manages the project following project management methodology as prescribed by the
agency Project Management Office.

Leads the planning and development of all project deliverables; actively monitors progress
and quality of project tasks and deliverables.

Identifies and resolves project problems and conflicts, escalating to the Contract Manager
when necessary.

Communicates project status, issues and risks to chain of command and the Contract
Manager and recommends corrective action when necessary.

Manages and coordinates project activities of all project team members.

Legal Counsel Provide legal advice on solicitations, including an appropriate procurement method, and
contract terms and conditions.
Draft or assist Contract Developer in drafting the solicitation.
Prepare other contract instruments to support or comprise part of a contract (e.g.,
solicitation templates, other specialized t&cs).
Negotiate terms and conditions and contract language, as needed.
Draft and review contracts including the following:
• Leases,
• Licenses,
• Loan agreements,
• Grants,
• Interagency agreements (IACs and MOUs),
• Interlocal agreements,
• Non-disclosure agreements (NDAs),
• Consulting services agreements,
• Legal services agreements (e.g., outside counsel contracts, expert witness
agreements), and
• Professional services agreements.

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 Statewide Procurement Division

Section 4. Specification Requirements

Deliverables
(Ask the end user what is being purchased, and break requirements up into functional categories in order to
explore granular detail of each requirement. Add topics and rows as appropriate.)

(Topic #1)

1.0

1.1

1.2

1.3

(Topic #2)

2.0

2.1

2.2

2.3

(Topic #3)

3.0

3.1

3.2

3.3

Section 5. Special Terms and Conditions

(Define any special terms and conditions to be included in the contract that will influence the risk factor.)

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Statewide Procurement Division

Section 6. Payment Structure

(Describe the payment conditions (terms and schedule) that will fulfill the contract.)

6.1 Payment Terms

(Payment considerations include whether the pricing terms align with applicable industry standards and whether
consideration for all possible costs associated with the purchase been taken into account.)

6.2 Payment Schedule

(The payment schedule specifies the period allowed an agency to pay the contractor, i.e., monthly payment schedule,
or other similar provisions.)

Section 7. Documenting Files

(Provide the documenting techniques that will be used for the contract.)

Section 8. Change Control

(Describe the process to be used to modify the contract.)

Section 9. Contract Close-out

(List all contract close-out activities. To ensure a contract is completed every duty should be marked when
complete.)

All goods or services have been received and accepted.

All reports have been delivered and accepted.

All administrative actions have been accomplished.

All agency furnished equipment and materials have been returned.

All property inventory and ownership issues are resolved including disposition of any
equipment or licenses purchased under the contract.

Final acceptance from the Project Manager has been received.

Final payment has been made to the contractor.
 Contractor’s performance reported to the Vendor Performance Tracking System (VPTS).

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 Statewide Procurement Division

APPENDIX 7
Procurement Value Threshold Chart

To download full document, visit:

https://comptroller.texas.gov/purchasing/docs/procurement-requirements.pdf

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 Statewide Procurement Division

APPENDIX 8
Sample Procurement File Checklist

SOLICITATION NO. ___________________  Contract Developer (CTCD)

__________________________________
 Purchaser (non-CTCD) ______

SOLICITATION DOCUMENTATION N/A Included

Draft/Initial solicitation documentation – All Parts/Attachments/Exhibits 
Stakeholder Meeting Documentation (e.g., Needs Assessment, Cost Estimate, Acquisition Plan)  
Requisition  
HUB Coordinator Review of Subcontracting Opportunities  
Proprietary Purchase Justification  
Emergency Justification  
External Reviews/Approvals Obtained (including evidence of agency request and receipt of approval)
CAT review for contract ≥ $5M, QAT review for MIRP contract ≥ $10M
SPD Review/Delegation Letter, DIR approval of SOW PR with value > $50,000,
DIR Exemption from use of DIR Cooperative Contracts for IT commodity items,  
DIR/LBB approval not to use DCS services, Governor Finding of Fact,
SAO delegation to obtain audit services, OAG approval to retain outside counsel services,
Other: ____________________________
If CAT or QAT review received, either (1) comply with recommendations or (2) submit written explanation
regarding why the recommendation is not applicable to the procurement  
Final Solicitation (including all parts/attachments/exhibits)  
Final Bidder List (dated CMBL Listing – Extracted from CMBL using NIGP Class/Item Codes and, if applicable,
agency head or designee approval of supplements to Bidder List)  
Internal Approval to Issue Solicitation  
ESBD Posting (including dated ESBD printout of posting and/or ESBD Generated E-mail Notification of
Confirmation of Posting)  
Solicitation Announcement issued to all vendors on Final Bid List. (Email printout)  
Texas Register Publication (including dated Texas Register printout and/or Texas Register Email Notification of
Confirmation of Publication)  
Solicitation Issuance via email (e.g., informal bidding) (including evidence of issuance to Bidder List)  
Pre-Proposal Conference Agenda and Sign-in Sheet (including dated ESBD printout of posting and/or ESBD
Generated E-mail Notification of Confirmation of Posting)  
Voluntary, Mandatory
Copies of Questions from Potential Respondents (including proof of timely receipt)  
Question and Answer Document Issued (including evidence of issuance e.g., ESBD printout of posting and/or
ESBD Generated E-mail Notification of Confirmation of ESBD Posting)  
Solicitation Addenda Issued (all parts/attachments/exhibits including evidence of issuance e.g., ESBD printout
of each posting and/or each ESBD Generated E-mail Notification of Confirmation of Posting)  
Addenda: 1, 2, 3, 4, 5
Scoring Matrix finalized 
Evaluation Committee Members selected  
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Statewide Procurement Division
EVALUATION DOCUMENTATION N/A Included
Copies of Responses (including proof of timely receipt) 
Administrative Review Documentation for each Response (i.e., responsiveness screening tracking sheet for
each response) 
HUB Coordinator Review of HSP for each Response (including evidence of approval/disapproval)  
Vendor Performance Report or dated printout showing “no results found” or “none” for each Respondent 
Signed Non-Disclosure and Conflict of Interest Statement from each Evaluation Committee Member and, if
applicable, Technical Advisor  
Evaluation Committee Meeting Documentation (including agenda, guidelines)  
Copy of Clarification Questions Issued to Respondent(s) (including evidence of issuance)  
Copy of Answers Received from Respondent(s) to Agency’s Clarification Questions (including evidence of receipt)  
Copy of Oral Presentation Agenda and Sign-in Sheet  
Copy of each Presenter’s Oral Presentation Documents  
All Completed Evaluation Committee Member Score Sheets (score sheets from all scoring committee members
for all scoring rounds) Scoring Round: 1, 2, 3  
Bid Tabulation or Master Evaluation Score Sheet (completed) 
Quality control review performed on Bid Tabulation or Master Evaluation Score Sheet 
Internal Approval for Tentative Contract Award, Cancellation of Solicitation 
CONTRACT AWARD AND CONTRACT AMENDMENT DOCUMENTATION N/A Included
Updated/Revised Solicitation Documents following negotiations
BAFO, HSP, Insurance, Other: _____________________  
External Reviews/Approvals Obtained (including evidence of agency request and receipt of approval)
QAT (MIRP contract ≥ $10M), DIR (SOW > $50,000),  
OAG approval of outside counsel services contract; Other: ________________
Required Agency Verifications: Agency Verification of Best Value Standards (refer to 34 TAC § 20.217(a)),
Agency Verification of Compete Procurement File (refer to TEX GOV’T CODE § 2262.053),
Compliance of Procurement with State Law and Agency Policy and Notification of Potential Issues for  
Contract > $5M (refer to TEX GOV’T CODE § 2261.255), Other: ________________
Required Agency Approval and Signature of Contract > $1M (refer to TEX GOV’T CODE § 2261.254(c)-(d))  
Required Agency Verification of Compliance of Procurement with State Law and Agency Policy and Notification
of Potential Issues for Contract > $5M (refer to TEX GOV’T CODE § 2261.255)  
Signed SAO Nepotism Disclosure Form for Agency Personnel for Contract ≥ $1M  
Vendor signed Texas Ethics Commission Form 1295 for Contract  
CPA Debarred Vendor List Check 
SAM Check of Vendor 
Iran, Sudan & Foreign Terrorist Organization Check of the TTSTC Divestment Statutes Lists 
Boycott Israel Check of the TTSTC Divestment Statutes Lists 
Warrant Hold Status Check 
Franchise Tax Status Check 
Signed Contract  
Purchase Order 
Notice of Award (including evidence of issuance)
ESBD, Texas Register, Email Notification to Bidder List (e.g., informal bidding)  
QAT (MIRP contract ≥ $10M), LBB contract reporting, Other: __________
Notice of Cancellation of Solicitation (including evidence of issuance)
ESBD, Texas Register, Email Notification to Bidder List (e.g., informal bidding)  
QAT, Other: _____________________
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 Statewide Procurement Division

APPENDIX 9
Proprietary Purchase Justification Template

PROPRIETARY PURCHASE JUSTIFICATION

(TEX. GOV’T CODE § 2155.067)

Texas Comptroller of Public Accounts

Attn: Statewide Procurement Division
P.O. Box 13186
Austin, Texas 78711-3186

Re: Proprietary Purchase Justification for insert: NIGP commodity code/general item description

The Propriety Purchase Justification must include the following information in order to document best value to the
State:

(1) describe the product or service the agency proposes to purchase, and provide a statement regarding the
agency’s business need and planned use;
(2) explain why the agency specifications for the product or service are written as they are, and why those
specifications are necessary to accomplish the agency’s goal for the procurement;
(3) state the reason that no other competing products or services will satisfy the need of the agency and provide
examples of the technical, practical, or operational risks that would occur if competing products or services
are selected; and
(4) specify whether the purchase is sole source or competitive.

NOTE: The signature of the Executive Head or Presiding Officer of a state agency (or designee) is required. If anyone
other than the Executive Director or Presiding Officer of the agency will sign the submission, the agency must have
the appropriate signed delegation available, and must promptly provide that delegation letter upon request to SPD.

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 Statewide Procurement Division

APPENDIX 10
Federal and State Surplus Property Programs Procedures

Acquisition and Disposal of Surplus Property

Before making a procurement of any kind, an agency should ensure that it cannot first fulfill the business need by using the State and Fed-
eral Surplus Property Programs. The Texas Facilities Commission (TFC) is charged with administering the State and Federal Surplus Property
Programs. TFC’s Surplus Property Program has three locations in Texas – Austin, Fort Worth, and San Antonio. TFC’s State surplus property is
located at its Austin location, whereas the Federal property is located at the Fort Worth and San Antonio warehouses.

Both the state and federal programs serve the purpose of transferring surplus government property to state agencies. However, the federal
and state programs differ in their relationship with state agencies. The State Surplus Property Program offers state agencies assistance with
the acquisition and disposal of state agency surplus property, while the Federal Surplus Property Program offers state agencies the opportu-
nity to acquire federal agency surplus property. State agencies must use TFC for the disposal of surplus and salvage state agency property
unless exempted.1 Participation in the Federal Program is encouraged to ensure best value to the state, but is not specifically mandated by
law. For more information, please visit http://tfc.state.tx.us/surplus.

The best way to avoid wasteful spending is to transfer surplus or unwanted property to another organization. Acquisitions from the surplus
property program are exempt from competitive bidding requirements.2 If an item is available in Surplus Property, then it may be possible to
fulfill the need of the end user without the need to purchase an item from a third party. During the property disposal process, state agency
purchasers, asset managers, and contract managers should be aware of potential waste, fraud and theft. Due to improper disposal, an agency
could miss out on significant revenue from the sale of surplus and salvage property. The following section will cover the acquisition process
and also some key factors in disposal process.

State Surplus Property Program

There are two methods to acquire State Surplus Property – via transfer directly from the surplus agency, or from public sales at the Austin
storefront. State agencies are highly encouraged to take advantage of the Transfer Process (method #1), particularly for vehicles and other
high dollar items.

(1) Transfer from State Agency

• State agencies are required to post all surplus and salvage property on TFC’s website3 for 10 business days. During the posting
period, state property is available for transfer to state agencies, political subdivisions, and TFC-approved assistance organizations.4
• Using this method, the requesting agency picks up the property from the surplus agency. TFC does not need to approve inter-
agency transfers; however, TFC must approve the price for all transfers to political subdivisions.
• Keep in mind that property is available for a limited amount of time. Requests for property must be received within the 10 business
day posting period to take advantage of this method.
• Examples of items commonly available for transfer include office furniture and equipment, vehicles, heavy equipment, trailers, and
computer equipment.
(2) From the TFC Storefront (Public Sales)
• After the transfer period ends, the property is then offered for sale to the public through the TFC Storefront in Austin, or through
online auction. The price will be closer to fair market value, therefore state agencies are encouraged to utilize the transfer method
described above in the interest of conserving state resources.

1
TEX. GOV’T CODE § 2175.
2
TEX. GOV’T CODE § 771.003.
3
http://tfc.state.tx.us/divisions/supportserv/prog/statesurplus/political-subdivisions-and-non-profits/property-available-for-transfer.html.
4
TEX. GOV’T CODE § 2175.001.

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Statewide Procurement Division

• The property available at TFC’s State Surplus Storefront comes from two sources: State agencies and the Transportation Security
Administration (TSA). The TSA turns over abandoned and willfully surrendered property collected at Texas airports to TFC, and in turn,
TFC sells it to the public from their storefront in east Austin. The airport property, however, is not available for transfer, only for sale.
• The general public, including state agencies may purchase items from the Austin Storefront. TFC’s Austin Storefront offers a
variety of items, including cars, trucks, SUVs, office equipment, supplies, and furniture.
• State agency property (priced at $200 or less) is available to state agencies for transfer at no cost. This does not apply to TSA
property, or property for personal use.
• Online auctions are conducted as-needed for specialty items and property located outside of the Austin area. TFC does not
recommend agencies use this method to purchase property.

How to Dispose of State Surplus and Salvage Property

TFC is responsible for overseeing the advertisement and disposal of all state agency surplus and salvage personal property (regardless of
initial or current value), including:

• Scrap metal, recycling (except paper),

• Vehicles, including wrecked/salvage,
• Modular furniture (cubicles),
• Office furniture and equipment,
• Computer peripherals and other electronics, and
• Computers.
This policy applies to capitalized, controlled, and non-capitalized assets. If an agency thinks an item may not have significant value, it does
not exempt the agency from statutory requirement to go through TFC.5 Unless a state agency has specific legal authority or written delegated
authority from TFC, then the agency may not dispose of surplus or salvage property without

• advertising it for transfer, and

• contacting TFC to determine the final disposal or sale method. TFC monitors state property disposal records and may report
violations to the Legislative Budget Board.
To initiate the disposal process, state agencies are required to post all surplus and salvage property on TFC’s website6 for 10 business days
(also called the “advertisement period”). During the advertisement period, state property is available for transfer to state agencies, political
subdivisions, and TFC-approved assistance organizations.7 Requests from state agencies have priority over all other organizations; however, if
no state agency requests the property, the first organization requesting the property and agreeing to the price is entitled to it.

For transfers to political subdivisions and TFC-approved assistance organizations during the 10 business day-advertisement period:

• TFC, in conjunction with the owning agency, determines the price, if any, for each item;
• agencies are responsible for verifying an assistance organization’s eligibility by obtaining a copy of the organizations TFC-issued
approval letter which includes a list of property that the organization has been approved to request; and
• for transfers to political subdivisions and assistance organizations, a TFC Certificate of Acquisition form must also be completed,
signed, and forwarded to TFC.
If the property has not been transferred during the advertisement period, an agency may contact TFC for final disposal instructions once the
item falls off TFC’s advertisement website. At this point, there are three options:

• Sell from TFC warehouse;

• Auction in place; or

5
TEX. GOV’T CODE § 2175, SubCh. F.
6
http://tfc.state.tx.us/divisions/supportserv/prog/statesurplus/political-subdivisions-and-non-profits/property-available-for-transfer.html.
7
TEX. GOV’T CODE § 2175.001.

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 Statewide Procurement Division

• TFC-authorized donation in lieu of abandonment.

If TFC cannot otherwise sell or dispose of the property, or has determined that the property has no resale value, then the property may be
destroyed as worthless salvage.

Contact TFC’s State Surplus Property Program to dispose of property:

• For items to be dropped off at Austin Warehouse, complete a TFC Bill of Lading, and submit to storefront.surplus@tfc.state.tx.us.
• NOTE: San Antonio and Fort Worth Warehouses will not accept State property.
• For items to be auctioned in place, complete a TFC Auction Request Form, and submit to auctions@tfc.state.tx.us.
• State agencies and political subdivisions (i.e., cities, counties, school districts, and state institutions of higher education) that are
interested in sending data processing equipment to a TCI computer recovery facility can contact the nearest computer recovery facility.
TFC will accept peripherals (monitors, mice, keyboards, printers), but cannot accept CPUs, tablets or laptops.

For more information, including all State Agency Forms, please visit the TFC website: http://tfc.state.tx.us/SSP. The State Surplus Property
Program can be reached at (512) 463-1990 or storefront.surplus@tfc.state.tx.us.

Federal Surplus Property Program

The Federal Surplus Property Program offers state agencies the opportunity to obtain surplus federal government property at pennies on the
dollar (when comparing TFC’s fees to the original value of the property). TFC has a standing inventory of thousands of items at its San Antonio
and Fort Worth Warehouses. If an agency cannot find what it needs in TFC’s inventory, then TFC’s Federal Program will accept a request, and
notify the agency if/when that item is available. Purchasing from this program is exempt from the typical requirements to obtain bids and post
solicitations.8

TFC’s Federal Surplus Property Program manages the disposition of surplus property donated to the state by federal programs. TFC’s Federal
Surplus Property Program requests, warehouses, and transfers surplus federal government equipment to eligible organizations in Texas.
TFC certifies organizations as eligible under federal management regulations to receive and use the property. All state agencies are eligible,
however, agencies must have an active account to be able to obtain property. Private citizens and the general public may not participate in
this program.

The program is not funded by the Legislature, but is supported by the revenues generated from handling fees. This means that the cost of
maintaining the staff and facilities are passed on to the program participants in the form of the handling fee. Handling fees will vary according
to condition of the item and demand, but are usually significantly lower than the cost of comparable items on the open market. The difference
in value is considered a “donation” from the federal government; hence, participants in the program are referred to as “donee.” As a recipi-
ent of surplus property under the Federal Surplus Property Program, the agency is considered a sub-recipient of federal financial assistance.
The fair market value of property received must be reported as part of the Schedule of Expenditures of Federal Awards in an agency’s Annual
Financial Report. Property received through this program are subject to federal handling and use restrictions including the requirement that
the recipient organization keep and use the property for a certain amount of time (usually 12-18 months) before disposing of it. Payment for
handling fees may be made by an Interagency Transfer Voucher (ITV).

For questions about the Federal Surplus Property Program, please contact TFC at 512-463-2688 or federal.surplus@tfc.state.tx.us.

TFCs Federal Surplus Warehouses are located in San Antonio and Fort Worth. For complete details, including a link to complete inventory,
warehouse contact information, and forms, please visit: http://tfc.state.tx.us/FSP.

8
TEX. GOV’T CODE § 771.003.

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 Statewide Procurement Division

APPENDIX 11
Sample State of Texas Disaster Declaration

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 Statewide Procurement Division

APPENDIX 12
Sample Evaluation Criteria and Scoring Strategies
Example 1: Weighted Scores, Scoring Scale, and Price Formula

RFP Solicitation
Evaluation Criteria Weight
Respondent’s Past Performance, Qualifications, and Experience 20%

Respondent’s Proposed Plan for Providing Services 40%

Price 40%

Total: 100%

Possible Scoring Strategy

Use a mathematical formula to determine
PRICE EVALUATION CRITERION
the weighted price score.

Price of Lowest Response

Price of Response Being Evaluated x Maximum No. of Available Points* = Weighted Price Score**
*Number of Points Assigned corresponds to the numerical percentage assigned to the criterion.
**Do not round.

Evaluators assign a raw score for each criterion using a 100

NON-PRICE point scoring scale. The cumulative score is determined by
EVALUATION CRITERIA converting the raw score for each criterion into a weighted
score using the using the applicable weighted percentage.

RAW SCORE
DESCRIPTION OF CRITERIA WEIGHT WEIGHTED SCORE
(0-100 PTS)

Respondent’s Past Performance, Qualifications, and

20%
Experience

Respondent’s Proposed Plan for Providing Services 40%

Total Weighted Points:

SCORING SCALE – Past Performance, Qualifications, and Experience

Score Rating Definition

Respondent demonstrates a broad range of relevant experience and completed projects within the
90-100 Excellent last three (3) years of similar scale and complexity with at least one (1) completed contract of larger
scale and complexity.

Respondent demonstrates a broad range of relevant experience and completed projects of similar
80-89 Good
scale and complexity within the last 3 years.

Respondent demonstrates relevant experience and completed projects of similar scale and
70-79 Satisfactory
complexity within the last 3 years.

Respondent demonstrates marginal experience and completed projects of similar or smaller scale
50-69 Marginal
and complexity within the last 3 years.

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Statewide Procurement Division

Respondent demonstrates limited experience. Bidder has either not completed any relevant
1-49 Unsatisfactory
projects within the last 3 years or completed projects were of smaller scale and complexity.

0 Unacceptable Response does not address requirement.

SCORING SCALE – Proposed Plan for Providing Services

Score Rating Definition

Response demonstrates excellent understanding of the requirements. Response clearly details
90-100 Excellent
how provided services will significantly exceed all specified requirements.

Response clearly demonstrates an understanding of the requirements. Response exceeds, to

80-89 Good
varying degrees, one or more specified requirements.

Response demonstrates an understanding of the requirements. Response satisfies the identified

70-79 Satisfactory
requirements in an adequate manner.

Response demonstrates only a limited understanding of the requirements. Response has

50-69 Marginal
deficiencies, to varying degrees, of one or more specified requirements.

Response does not demonstrate an understanding of the requirements. Response contains

1-49 Unsatisfactory
significant deviations from one or more key requirements.

0 Unacceptable Response does not address the requirements or response does not meet the minimum requirements.

Example Score Sheet

Bidder 1 Bidder 2
Evaluation Criteria Weight Weighted Weighted
Raw Data Raw Data
Score Score
Respondent’s Past Performance, Qualifications, and
20% 80 16 100 20
Experience

Respondent’s Proposed Plan for Providing Services 40% 80 32 50 20

Price 40% $75 26 $50 40

Total: 100% 74 80

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 Statewide Procurement Division

Example 2: Subcriteria, Maximum Available Points Allocation, Reasonableness of Price

RFO Solicitation
Evaluation Criteria Weight

Respondent’s Past Performance, Qualifications, and Experience 35%

Respondent’s Proposed Plan for Providing Services 35%

Reasonableness of Price 30%

Total: 100%

Possible Scoring Strategy

Points are assigned to each criterion equal to the weight percentage
Evaluation Criteria advertised in the solicitation. Evaluators assign a score within maximum
range of points allocated for the criterion.
Maximum Possible Assigned
Description of Criteria Weight
Points Points
Respondent’s Past Performance, Qualifications,
35 35
and Experience
1. Respondent’s Past Performance (10) (10)
Subcriteria

2. Respondent’s Overall Experience &

(10) (10)
Qualifications

3. Qualifications & Experience of Respondent’s

(15) (15)
Proposed Personnel

Respondent’s Proposed Plan for Providing Services 35 35

Reasonableness of Price 30 30

Total: 100 100

Example Score Sheet

Assigned Points
Maximum
Evaluation Criteria Weight
Possible Points Respondent 1 Respondent 2
Respondent’s Past Performance, Qualifications,
35 35 29 29
and Experience
1. Respondent’s Past Performance (10) (10) 8 8
Subcriteria

2. Respondent’s Overall Experience &

(10) (10) 9 8
Qualifications

3. Qualifications & Experience of

(15) (15) 12 13
Respondent’s Proposed Personnel

Respondent’s Proposed Plan for Providing Services 35 35 32 30

Reasonableness of Price 30 30 20 27

Total: 100 100 81 86

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 Statewide Procurement Division

APPENDIX 13
Solicitation Announcement Example

SOLICITATION ANNOUNCEMENT

TO: Interested Parties

FROM: Contract Developer Name, Agency Name

RE: Title of Solicitation and Solicitation No.

DATE:

This is an official notification that [Agency Name], an agency of the State of Texas, has issued a Request for Proposals No. ____ (“RFP”) for
[Title of Solicitation]. Please promptly review the RFP posted on the Electronic State Business Daily (“ESBD”) for general information regarding
the solicitation and key deadlines applicable to respondents and responses.

To reduce costs, [Agency Name] will mail a hard copy of the solicitation only to those requesting a copy. To request a copy, an authorized
representative must complete, sign below, and return via email to:

Contract Developer Name

Re: RFP No. _________________

Email: _____________________

Telephone requests will not be accepted. [Agency Name] will not mail copies to parties that do not complete, sign, and return this form as
instructed in this notice. [Agency Name] is not responsible for solicitations lost in the mail or delivered after the closing date and time for
submission. This notice does not obligate [Agency Name] to award any contracts as a result of the solicitation.

_________________________________________________________________________________________________________ _____________


_ X I understand that the complete solicitation is available electronically on the following website: http://www.txsmartbuy.com/sp.


_ X I request that [Agency Name] mail a copy of RFP No. ________, as follows:

Name of Individual or Entity

Address
(include city, state, zip)

Point of Contact:
Telephone Number:
Email Address:

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 Statewide Procurement Division

APPENDIX 14
Pre-Bid/Offer/Proposal Conference Guidelines
Solicitation Content. If a pre-bid/offer/proposal is conducted by the agency, the solicitation must include the following:
• Date and time of the conference. The date must allow sufficient time for respondents to receive and review the solicitation prior to
the conference. Typically, this is at least 10 days after the solicitation is published.
• Exact physical location (address and room number) of the conference.
• If attendance at the conference is mandatory, then the following statement must be included in the solicitation: “Failure to attend
the pre-bid/offer/proposal conference will result in disqualification of the response.”
• Agency point of contact information for scheduling site visit appointments, if applicable.

Pre-Conference Activities. Prior to the conference, the Contract Developer typically

• finalizes the conference agenda;
• prepares the conference sign-in sheet; and
• schedules a meeting with the agency staff that will attend the conference so the team may review, at a high level, the published
solicitation documents, the conference agenda, and the conference protocol.

Conference Activities. A typical agenda for a pre-bid/offer/proposal conference is as follows:

• Opening – The Contract Developer provides opening remarks which include the Solicitation Title and Number and the purpose for
the conference. The Contract Developer’s administrative announcements may also include the following:
• Provide notification if the conference is being recorded.
• Advise attendees to turn cell phone alerts off or to vibrate.
• Remind attendees to sign the sign-in sheet at commencement of the conference, especially if conference is mandatory.
• Inform attendees that answers will be given to questions raised at the conference whenever possible; however, any answer that
changes or affects the solicitation will be reviewed and published in an addendum. Vendors may not rely on verbal answers that
differ from solicitation requirements.

• Introduction – Contract Developer introduces agency representatives and explains their roles in the procurement. Depending on
number of vendors attending the conference, the Contract Developer may ask that attendees introduce themselves and identify
the company they are representing. If the conference is mandatory, the Contract Developer will collect sign-in sheets prior to the
solicitation overview/review phase of the conference and, if applicable, site visit.
• Solicitation Overview/Review – The solicitation is reviewed page by page or section by section. It is not necessary or
recommended to read the entire document, but the entire document should be addressed. Questions should be answered as
the pages or sections are discussed. Site inspections may be conducted prior to or after the solicitation review, depending on the
circumstances, but prior to close of the conference. If site inspections are conducted, all attendees should return to conference
room and be permitted to ask any questions that relate to the site inspection. The Contract Developer will take notes of any
addendum items and significant discussions.
• Closing Summary – The Contract Developer confirms the changes, if any, that are being considered by the agency and summarizes
any unanswered questions to be addressed by the agency at a later date. Attendees should be reminded that no verbal changes
to the solicitation are binding on the agency; all changes to the solicitation must be in the form of a written addendum to the
solicitation.

Post-Conference Activities. After the conference, the Contract Developer typically performs the following tasks:
• Prior to the end of the conference, if practical, make copies of the sign-in sheet for the attendees;
• Determine whether the response due date should be extended based on questions raised during the conference;
• Prepare the question and answer document and, if applicable, the solicitation addendum with input from the program staff; and
• Maintain any conference minutes (may or may not be transcribed) or notes in the procurement file.

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 Statewide Procurement Division

APPENDIX 15
Sample Q&A

Title of Solicitation
Solicitation Number
Official Responses to Questions From Potential Respondents
[Date posted/issued]

1. Is this a follow-on contract? Is there an incumbent company providing these services? If so, could you tell us their name?
Response: An incumbent company is not currently providing the requested services.

2. I was wondering if a pre-bid meeting has been arranged for this opportunity? If so, could you give me some details on it, so
we could try and attend.
Response: A pre-proposal conference will not be held for this RFP. Refer to the Anticipated Schedule of Events on page 1 of the
RFP.

3. The numbering of requirements on page 25 goes from D.4.5.3 to D.4.5.5. Is it the State’s intent to skip D.4.5.4 or is there a
requirement missing?
Response: There was a formatting error on page 25 of the RFP; no requirements are missing.

4. What is the name of the current vendor?

Response: Refer to the response to Question No. 1.

5. Is there a page limit for the vendor’s offer?

Response: No; there is not a designated maximum page limit for a proposal submitted in response to this RFP. However,
Section III, Part 3.1 (Introduction) of the RFP states that conciseness and clarity of content in proposals are required;
vague and general proposals may be considered non-responsive, and may result in disqualification.

6. My company, [Company Name], is a Texas HUB certified vendor. Do I have to submit the HSP?
Response: Yes.

7. Will the State consider an extension of the due date to provide greater participation by more vendors?
Response: Refer to Addendum No. 1.

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 Statewide Procurement Division

APPENDIX 16
Sample Solicitation Addendum

Title of Solicitation
Solicitation Number
Addendum No. 1
[Date posted/issued]

The solicitation is amended as follows:

1. Section I, Item Number 7 (Deadline for Offers) is deleted and replaced with the following:
7. Deadline for Offers: In Issuing Office No Later Than: Month/Day/Year; 2:00 p.m., Central Time.

2. Section II, Part D (Key Personnel) is amended by adding the following as new Paragraph 5.

(5) Successful Respondent, at the request of the Agency Project Manager, shall cooperate in all reasonable respects with contrac-
tors retained by Agency in connection with the Services, and any other Agency-designated entities which are associated with the
Services provided under the contract.

3. The last sentence in the first paragraph of Part P (Timeline) of Section II is deleted in its entirety.

Acknowledgement of Receipt of Addendum No. 1:

Respondent/Entity Name: ______________________________________________________

Signature of Authorized Representative: _________________________________________

Printed Name, Title: ___________________________________________________________

Date:

Respondent should sign and return this acknowledgement with its response or otherwise acknowledge Addendum Number 1 in
its response.

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 Statewide Procurement Division

APPENDIX 17
Sample Administrative Review Checklist

Respondent Name

Respondent Name

Respondent Name

Respondent Name

Respondent Name

Respondent Name
Administrative Review Checklist

Response Received by Deadline Y Y Y Y Y N

Required Original and No. of Hard Copies Provided Y Y Y Y Y N/A*

Execution of Offer Signed Y Y Y Y N N/A*

HSP Completed and Signed Y Y Y Y N N/A*

HSP approved by HUB Coordinator Y Y Y Y N N/A*

Response Valid for 90 Days Y Y Y Y Y N/A*

Respondent Questionnaire (description of

Y Y Y Y Y N/A*
offered goods/services, etc.) Completed

Three References Provided Y Y Y Y Y N/A*

Mandatory Price Sheet Completed Y Y Y Y N N/A*

Conflict of Interest Form Completed and Signed Y Y Y Y N N/A*

Conflict of Interest Noted N N N N unkn N/A*

Nondisclosure Agreement Signed Y Y Y Y N N/A*

Response Responsive to Solicitation Y Y Y Y N N

* Late response is not opened. Respondent will be notified that the response was rejected because it was not timely received.

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 Statewide Procurement Division

APPENDIX 18
Evaluation Committee Guidelines
Note: This procedure is provided as a general guideline for agencies to use and may be customized to meet individual agency needs.

 The Contract Developer collects a signed Evaluation Committee Member Non-Disclosure and Conflict of Interest Disclosure Statement
from each committee member. The Contract Developer will check each statement to ensure that it is signed and has not been modified.
For any committee member not in attendance at the scheduled meeting, responses will not be provided until the Non-Disclosure and
Conflict of Interest Disclosure Statement is signed and participation in an evaluation committee briefing has occurred.

 The Contract Developer will hand out evaluation packages to each committee member. Each package should include:
 Copy of the Non-Disclosure and Conflict of Interest Disclosure Statement. Committee members should each have a copy of
the Non-Disclosure and Conflict of Interest Disclosure Statement as a reminder of their responsibilities.

 Copy of the Evaluation Committee Briefing document (see attached).

 Complete copy of the solicitation and any addenda and Q&A documents. (Members should already be familiar with these
documents prior to the meeting).

 Copy of each responsive response received.

 Evaluation
received).
Committee Member Scoring Matrix. (If hard copy, provide appropriate number of copies for the number of responses

 The Contract Developer will go over the briefing document (see attached) with the committee.
 The Contract Developer will explain the scoring process and walk through the evaluation scoring matrix to ensure each scoring
committee member understands how the matrix works and how the responses will be evaluated.

 Generally, the Contract Developer remains during the meeting to answer any questions which may arise and to ensure proper
procedures are followed. The preferred practice is for the evaluation committee to conduct their evaluations at the same time
in the same room. Sometimes, due to time constraints, remote location of committee members, or other circumstances, it
is not possible for all members to be together for the evaluation. If the evaluation committee conducts their evaluation from
their respective workspaces, the Contract Developer will provide a deadline for when the evaluation scoring matrices are to
be completed.

 After the evaluation is completed, the evaluation scoring matrices are submitted to the Contract Developer and maintained in the
procurement file.

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Statewide Procurement Division

Evaluation Committee Briefing

Committee Members
• Committee members must be independent and objective, without any conflict of interest.
• Each committee member’s participation should not create even the appearance of impropriety.
• Each committee member must comply with the agency and State’s conflict of interest disclosure policies.
• Each committee member must sign the Evaluation Committee Member Non-Disclosure and Conflict of Interest Disclosure Statement.
• Each committee member must be knowledgeable about the matter under evaluation and add value to the process.
• All committee members must attend every evaluation meeting, each oral presentation, and all site visits to respondent premises.

Evaluation/Scoring
• Each scoring committee member will independently and impartially score each response using only the evaluation factors and
weights identified in the solicitation.
• Scores are not divulged between committee members. Members may ask questions if they are unable to find information, do not
understand information in a response, or require the technical assistance of other members.
• Evaluations by the committee are based solely on the written responses, oral presentations or other factors as instructed by the
Contract Developer and assigned attorney for that particular solicitation and consistent with the solicitation.
• Committee members may not conduct their own independent research on respondents (such as online research) and may not
consider any independent research or other extraneous information in their scoring.
• With approval of the Contract Developer or assigned attorney as applicable, the chair may appoint one or more committee mem-
bers to assist with specific administrative tasks (such as checking references) which are allowable under the solicitation.
• The committee may determine that clarification of the response is necessary prior to scoring. The Contract Developer or the
assigned attorney, as appropriate, will submit written clarification questions to the respondents.
• Each committee member will record the scores for each response on the scoring matrix provided by the chair.
• Some solicitations may involve multiple scoring rounds to narrow the competitive field. The Contract Developer will brief the com-
mittee if the particular solicitation involves that possibility.
• The committee may determine that requests for oral presentations by all or only the top rated respondents are desirable and con-
sistent with the particular solicitation. The Contract Developer or the assigned attorney, as appropriate, will notify the respondents
about oral presentations.
• The chair will tally the individual committee member’s evaluation scores and provide the committee with a master score sheet
showing the total scores.
• Each committee member will review the master score sheet to verify the accuracy of the scoring.
• Committee members will not lobby each other to change scores; however, the chair may discuss the portions of the responses
from which the scores were derived to ensure that each member understood that portion of the solicitation and the response.
• The Contract Developer with assistance from the assigned attorney, if needed, will verify that the appropriate method of scoring
was used by each committee member.
• The chair will prepare, sign and date the evaluation committee’s master score sheet.
• The chair will prepare the appropriate internal approval memo (e.g., recommendation of tentative contract award memo, recom-
mendation to narrow the competitive field memo, recommendation to cancel procurement).

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 Statewide Procurement Division

Confidentiality
• All evaluations and responses are highly confidential and may not be disclosed. The responses must be safeguarded by the com-
mittee members.
• Evaluations, including comments made on score sheets, are subject to the Texas Public Information Act. Written comments on
score sheets are not discouraged. Evaluation committee members’ written comments may aid the reviewer in circumstances
where the score is unusually low or high. Evaluation committee member comments are also helpful in the event of a debriefing as
they may assist a respondent in identifying strengths and weaknesses of the response.
• Committee members may not communicate with respondents or anyone else outside the committee regarding the responses
received or the evaluation process without prior approval of the Contract Developer or the assigned attorney, as appropriate.
Examples of permitted communications are those facilitated by the Contract Developer such as consultations with technical advi-
sors assigned to the committee and attendance at an oral presentation.

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Statewide Procurement Division

Evaluation Committee Member

Non-Disclosure and Conflict of Interest Disclosure Statement

I, ____________________________, the undersigned, hereby certify that the following statements are true and correct
and that I understand and agree to be bound by the commitments contained herein. I am acting at the request of the
[Agency Name] as a participant in the [Name of Procurement].

I am acting of my own accord and am not acting under duress. I am not currently employed by, nor am I receiving any
compensation from, nor have I been the recipient of any present or future economic opportunity, employment, gift,
loan, gratuity, special discount, trip, favor, or service in connection with any responses or involved respondent in return
for favorable consideration. I have no preconceived position on the relative merits of any of the submitted responses
nor have I established a personal preference or position on the worth or standing of any respondent participating in
this action.

I agree not to disclose or otherwise divulge any information pertaining to the contents, status, or ranking of any
submitted responses to anyone other than the evaluation committee chair or other evaluation committee members.
I understand the terms “disclose or otherwise divulge” to include, but are not limited to, reproduction of any part or
portion of any responses, or removal of same from designated areas without prior authorization from the Contract
Developer. I agree to consult with the assigned Contract Developer or legal counsel, as appropriate, if I have any ques-
tions regarding the guidance provided to the evaluation committee. I agree to perform any and all evaluations of said
submitted responses in an unbiased manner, to the best of my ability, and with the best interest of the State of Texas
paramount in all decisions.

___________________________________
Signature

___________________________________
Printed Name

___________________
Date

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 Evaluation Committee
Master Score Sheet
for
[Title and No. of Solicitation]

Committee Score
Weight
Criteria (Maximum Respondent Respondent Respondent
Respondent Name
Points Permitted) Name Name Name

T exas P rocurement
1. List criterion from solicitation

and
2. List criterion from solicitation

3. List criterion from solicitation

4. List criterion from solicitation

5. List criterion from solicitation

Total [100 points]

Signature of Evaluation Committee Chair: _______________________________________

Printed Name of Evaluation Committee Chair: ____________________________________
Date: _____________________

C ontract M anagement G uide - V ersion 1.2 | APPENDIX 18 - PAGE 5

Statewide Procurement Division
 Evaluator No. _____
Date: _____________________

Score
Weight
Criteria (Maximum Respondent Respondent Respondent
Respondent Name
Points Permitted) Name Name Name

T exas P rocurement
1. List criterion from solicitation

and
2. List criterion from solicitation

3. List criterion from solicitation

4. List criterion from solicitation

APPENDIX 19

5. List criterion from solicitation

Total [100 points]

Sample Evaluation Committee Member Scoring Matrix

C ontract M anagement G uide - V ersion 1.2 | APPENDIX 19 - PAGE 1

Statewide Procurement Division
 Statewide Procurement Division

APPENDIX 20
Sample Reference Check Form
Telephone Interview Reference Check
For
[Title of Solicitation]

Respondent Name:

Company to be contacted as a Reference:

Name and Title of Designated Reference:

Contact Number for Designated Reference:

Point of Contact Information for Individual Responding

to Reference Check if Different than Point of Contact Designated in
the Response:

Introduction: Hello, my name is [caller’s name] with [agency name]. We are currently evaluating vendor proposals for
[solicitation title] and checking vendor references. Your name and number were provided to us as a reference for [vendor
name]. Do you have a few minutes to answer some questions?

Questions:
1. Has the vendor provided [description of products/services] to your organization in the past 3 years? Yes  No 

2. How long has the vendor provided [description of products/services] to your organization?

___________________________________________________________________________________

3. What is the approximate annual value of the vendor’s contract?

___________________________________________________________________________________

4. Did the vendor stay within budget? Yes  No 

5. On a rating scale of 0 to 3 – where (0) Unsatisfactory, (1) Marginally Satisfactory, (2) Satisfactory, (3) Exceeds
Expectations, and (N/A) Not Applicable – please provide answers to the following questions:
a. How satisfied was your organization with the timeliness of the vendor’s delivery of products or performance
of services under the contract?
0 , 1 , 2 , 3 , N/A , Declined to Respond 
b. How satisfied was your organization with the skill, knowledge, cooperativeness, and professional manner of the
personnel assigned by the vendor?
0 , 1 , 2 , 3 , N/A , Declined to Respond 
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Statewide Procurement Division

c. How satisfied was your organization with the vendor’s ability to resolve problems?
0 , 1 , 2 , 3 , N/A , Declined to Respond 
d. How satisfied was your organization with the vendor’s customer service?
0 , 1 , 2 , 3 , N/A , Declined to Respond 
e. Overall, how satisfied was your organization with the vendor’s performance?
0 , 1 , 2 , 3 , N/A , Declined to Respond 

6. Do you have any comments? Yes  No 

_____________________________________________________________________________________________

_____________________________________________________________________________________________

_____________________________________________________________________________________________

_____________________________________________________________________________________________

_____________________________________________________________________________________________

Reference Check Conducted By:

Printed Name:
Date & Time:

Signature:

Reference check activities were unsuccessful for the following reason(s):

Designated point of contact declined to answer any questions.
 
Designated point of contact information provided in response was incorrect.
 
Designated point of contact was determined to be “unavailable” after _____ unsuccessful attempts on the following
 
dates and times: ______________________________________
Other: _____________________________________________________________________________________________
 
______________________________________________________________________________________________

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 Statewide Procurement Division

APPENDIX 21
List of Preferences

PREFERENCE FOR PRODUCTS OF PERSONS WITH MENTAL RETARDATION OR PHYSICAL DISABILITIES.

TEXAS GOVERNMENT CODE § 2155.441.
(a) The products of workshops, organizations, or corporations whose primary purpose is training and employing individuals having mental
retardation or a physical disability shall be given preference if they meet state specifications regarding quantity, quality, delivery, life
cycle costs, and price.
(b) The workshops, organizations, or corporations shall test the products to the extent necessary to ensure quality in accordance with Sec-
tion 2155.069 and may enter into contracts with a private or public entity to assist with testing.
(c) The comptroller is not required to purchase products under this section that do not meet formal state specifications developed by the
comptroller or meet commercial specifications approved by the comptroller.

PREFERENCE FOR ENERGY EFFICIENT PRODUCTS.

TEXAS GOVERNMENT CODE § 2155.442.
The comptroller shall give preference to energy efficient products in purchases made under this subtitle if:

(1) the products meet state specifications regarding quantity and quality; and
(2) the cost of the product is equal to or less than the cost of other similar products that are not energy efficient.

PREFERENCE FOR RUBBERIZED ASPHALT PAVING.

TEXAS GOVERNMENT CODE § 2155.443. 
The comptroller may give preference to rubberized asphalt paving made from scrap tires by a facility in this state in purchases of rubberized
asphalt paving material if the cost as determined by a life-cycle cost benefit analysis does not exceed by more than 15 percent the bid cost
of alternative paving materials.

PREFERENCE TO TEXAS AND UNITED STATES PRODUCTS AND TEXAS SERVICES.

TEXAS GOVERNMENT CODE § 2155.444.
(a) The comptroller and all state agencies making purchases of goods, including agricultural products, shall give preference to those pro-
duced or grown in this state or offered by Texas bidders as follows:
(1) goods produced or offered by a Texas bidder that is owned by a service-disabled veteran who is a Texas resident shall be given a
first preference and goods produced in this state or offered by other Texas bidders shall be given second preference, if the cost to
the state and quality are equal; and
(2) agricultural products grown in this state shall be given first preference and agricultural products offered by Texas bidders shall be
given second preference, if the cost to the state and quality are equal.
(b) If goods, including agricultural products, produced or grown in this state or offered by Texas bidders are not equal in cost and quality
to other products, then goods, including agricultural products, produced or grown in other states of the United States shall be given
preference over foreign products if the cost to the state and quality are equal.
(c) In this section:
(1) “Agricultural products” includes textiles and other similar products.
(1-a) “Service-disabled veteran” means a person who is a veteran as defined by 38 U.S.C. Section 101(2) and who has a service-
connected disability as defined by 38 U.S.C. Section 101(16).
(2) “Texas bidder” means a business:
(A) incorporated in this state;

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Statewide Procurement Division

(B) that has its principal place of business in this state; or

(C) that has an established physical presence in this state.
(d) The comptroller and all state agencies making purchase of vegetation for landscaping purposes, including plants, shall give preference
to Texas vegetation native to the region if the cost to the state is not greater and the quality is not inferior.
(e) The comptroller and all state agencies procuring services shall give first preference to services offered by a Texas bidder that is owned
by a service-disabled veteran who is a Texas resident and shall give second preference to services offered by other Texas bidders if:
(1) the services meet state requirements regarding the service to be performed and expected quality; and
(2) the cost of the service does not exceed the cost of other similar services of similar expected quality that are offered by a bidder
that is not entitled to a preference under this subsection.
(f) The comptroller and each state agency conducting an advertising campaign that involves the creation or production of a commercial
shall give preference to a commercial production company and advertising agency located in this state if:
(1) the services meet state requirements regarding the service to be performed and regarding expected quality; and
(2) the cost of the service does not exceed the cost of other similar services of similar expected quality that are offered by a bidder
that is not entitled to a preference under this subsection.
(g) For purposes of Subsection (f), “commercial production company” means a corporation, limited liability company, partnership, or
other private entity that includes as one of its purposes the production of one or more television, film, radio, or other media-related
commercials.
(h) The Music, Film, Television, and Multimedia Office within the office of the governor has exclusive rulemaking authority for purposes of:
(1) determining whether an advertising campaign is subject to the requirements of this section;
(2) establishing a bid process for purposes of the services described by Subsection (f); and
(3) establishing criteria to determine whether a commercial production company or advertising agency is located in this state for the
purposes of this section.

PREFERENCE UNDER SERVICE CONTRACTS.

TEXAS GOVERNMENT CODE § 2155.4441.
A state agency that contracts for services shall require the contractor, in performing the contract, to purchase products and materials
produced in this state when they are available at a price and time comparable to products and materials produced outside this state.

PREFERENCE FOR RECYCLED, REMANUFACTURED, OR ENVIRONMENTALLY SENSITIVE PRODUCTS.

TEXAS GOVERNMENT CODE § 2155.445.
(a) The comptroller and state agencies shall give preference to recycled, remanufactured, or environmentally sensitive products, as those
terms are defined by rule of the comptroller, in purchases made under this subtitle if:
(1) the product meets state specifications regarding quantity and quality; and
(2) the average price of the product is not more than 10 percent greater than the price of comparable nonrecycled products.
(b) The comptroller regularly shall review and revise its procurement procedures and specifications for the purchase of goods to:
(1) eliminate procedures and specifications that explicitly discriminate against recycled, remanufactured, or environmentally sensitive
products, as those terms are defined by rule of the comptroller; and
(2) encourage the use of recycled, remanufactured, or environmentally sensitive products.
(c) In developing new procedures and specifications, the comptroller shall encourage the use of recycled products and products that may
be recycled or reused or that are remanufactured or environmentally sensitive.
(d) In addition to the products covered by the definition adopted by rule under this section, in this section “recycled product” includes
recycled steel products. The preference for recycled steel products under this section applies also to products purchased in connection
with projects described by Section 2166.003.

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 Statewide Procurement Division

PURCHASE OF RECYCLED OIL.

TEXAS GOVERNMENT CODE § 2155.447.
The comptroller, all state agencies, and all state agency employees who purchase motor oil and other automotive lubricants for state-owned
vehicles shall give preference to motor oils and lubricants that contain at least 25 percent recycled oil if the cost to the state and the quality
are comparable to those of new oil and lubricants.

PREFERENCE TO PRODUCTS AND SERVICES FROM ECONOMICALLY DEPRESSED OR BLIGHTED AREA.

TEXAS GOVERNMENT CODE § 2155.449.
(a) In this section, “economically depressed or blighted area” means an area that:
(1) is an economically depressed or blighted area as defined by Section 2306.004; or
(2) meets the definition of a historically underutilized business zone as defined by 15 U.S.C. Section 632(p).
(b) The comptroller and all state agencies procuring goods or services shall give preference to goods or services produced in an economi-
cally depressed or blighted area if:
(1) the goods or services meet state specifications regarding quantity and quality; and
(2) the cost of the good or service does not exceed the cost of other similar products or services that are not produced in an economi-
cally depressed or blighted area.

PREFERENCE FOR PRODUCTS OF FACILITIES ON FORMERLY CONTAMINATED PROPERTY.

TEXAS GOVERNMENT CODE § 2155.450.
The comptroller and state agencies shall give preference to goods produced at a facility located on property for which the owner has
received a certificate of completion under Section 361.609, Health and Safety Code, if the goods meet state specifications regarding quantity,
quality, delivery, life cycle costs, and price.

VENDORS THAT MEET OR EXCEED AIR QUALITY STANDARDS.

TEXAS GOVERNMENT CODE § 2155.451.
(a) This section applies only to a contract to be performed, wholly or partly, in a nonattainment area or in an affected county, as those terms
are defined by Section 386.001, Health and Safety Code.
(b) The comptroller and state agencies procuring goods or services may:
(1) give preference to goods or services of a vendor that demonstrates that the vendor meets or exceeds any state or federal environ-
mental standards, including voluntary standards, relating to air quality; or
(2) require that a vendor demonstrate that the vendor meets or exceeds any state or federal environmental standards, including vol-
untary standards, relating to air quality.
(c) The preference may be given only if the cost to the state for the goods or services would not exceed 105 percent of the cost of the goods
or services provided by a vendor who does not meet the standards.

PREFERENCE FOR CONTRACTORS PROVIDING FOODS OF HIGHER NUTRITIONAL VALUE.

TEXAS GOVERNMENT CODE § 2155.452.
(a) The comptroller and state agencies making purchases of food for consumption in a public cafeteria may give preference to contractors
who provide foods of higher nutritional value and who do not provide foods containing trans fatty acids for consumption in the cafeteria.
(b) In complying with this section, the comptroller and state agencies shall review the Department of Agriculture’s nutrition standards.

T exas P rocurement and C ontract M anagement G uide - V ersion 1.2 | APPENDIX 21 - PAGE 3
 APPENDIX 22
Texas Required Contract Clauses
In accordance with Section 2262.051(d)(1) of the Texas Government Code, this document identifies the model contract clauses for the essential provisions that an agency must include in a
contract to protect the interests of the State. Except as otherwise specifically noted as an “EXCEPTION” in this document, the Texas Required Contract Clauses are required to be included
in both solicitations and contracts.

The wording of the Texas Required Contract Clauses must substantially conform to the Standard Text or Alternate Text. For instance, it is an acceptable practice to remove the reference
to the solicitation for the clause appearing in a contract. Also, the following terms may be revised by the agency as appropriate for conformity with the applicable solicitation and contract
documents: Agency, Respondent, Response, and Solicitation. Examples of conforming terms include, but are not limited to, the following:
• “Agency” to agency name, Customer, or Client
• “Respondent” to Bidder, Proposer, Applicant, Contractor, or Vendor
• “Response” to Bid, Proposal, Offer, or Application

T exas P rocurement
• “Solicitation” to Invitation for Bids, Request for Proposals, Request for Offers, Request for Applications, Pricing Request, or Request for Qualifications

and
General guidance is provided along with examples of supplemental text that routinely accompany the required clause. Any additional text included by the agency must not conflict with
or weaken a Texas Required Contract Clause. It is recommended that public procurement professionals seek assistance from agency legal counsel prior to modifying the Standard Text
or Alternate Text as slight variations may result in the agency’s non-compliance with applicable statutes and rules.

Note: The Essential Provisions which must be included in every contract are comprised of (1) the terms necessary for the formation of a legally binding contract and (2) the Texas Required
Contract Terms. For a discussion of the terms necessary for the formation of a legally binding contract, refer to the Texas Procurement and Contract Management Guide.

Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
Antitrust The undersigned affirms under penalty of perjury of the Respondent represents and warrants that, in accordance TEX GOVT CODE § As directed by Section 2155.005(b) of the Texas
Affirmation laws of the State of Texas that (1) in connection with this with Section 2155.005 of the Texas Government 2155.005 Government Code, the OAG prepared the Antitrust
Response, neither I nor any representative of the Respondent Code, neither Respondent nor the firm, corporation, Certification which is published at www.oag.texas.gov.
have violated any provision of the Texas Free Enterprise and partnership, or institution represented by Respondent,
The OAG is charged with investigating and prosecuting
Antitrust Act, Tex. Bus. & Comm. Code Chapter 15; (2) in or anyone acting for such a firm, corporation or
violations of the Texas Free Enterprise & Antitrust Act
connection with this Response, neither I nor any representative institution has (1) violated any provision of the Texas
and the federal antitrust statutes which prohibit anti-
of the Respondent have violated any federal antitrust law; and Free Enterprise and Antitrust Act of 1983, Chapter 15 of
competitive conduct.
(3) neither I nor any representative of the Respondent have the Texas Business and Commerce Code, or the federal
directly or indirectly communicated any of the contents of this antitrust laws, or (2) communicated directly or indirectly Supplemental text to the required clause may include the
Response to a competitor of the Respondent or any other the contents of this Response to any competitor or any following:
company, corporation, firm, partnership or individual engaged other person engaged in the same line of business as Respondent assigns to the Agency all of Respondent’s
in the same line of business as the Respondent. Respondent. rights, title and interest in and to all claims and causes
of action Respondent may have under the antitrust
laws of Texas or the United States for overcharges
associated with this Solicitation or any resulting
contract.

C ontract M anagement G uide - V ersion 1.2 | APPENDIX 22 - PAGE 1

Statewide Procurement Division
 Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
Assignment Respondent shall not assign its rights under the contract or Respondent may not assign the contract or assign, TEX GOVT CODE § EXCEPTION: Clause only applies to solicitations and
delegate the performance of its duties under the contract transfer or delegate, in whole or in part, any of its interest 2262.056(b) contracts for services
Statewide Procurement Division

without prior written approval from the Agency. Any in, or rights or obligations under, the contract without the
Section 2262.056 of the Texas Government Code states
attempted assignment in violation of this provision is void and prior written consent of the Agency, and any attempted
the following:
without effect. or purported assignment, transfer or delegation thereof
without such consent shall be null and void. (a) In this section:
(1) “Major information resources project” has
the meaning assigned by Section 2054.003.
(2) “Sensitive personal information” has the

APPENDIX 22 - PAGE 2 | T exas P rocurement

meaning assigned by Section 521.002,
Business & Commerce Code.

and
(b) A vendor awarded a services contract by a
state agency may not assign the vendor's rights
under the contract to a third party unless the
assignment is approved by the state agency.
(c) At least 14 days before a state agency rejects
or approves a vendor's proposed assignment
under Subsection (b), the state agency shall
notify the Legislative Budget Board of the
proposed assignment if the contract subject to
the assignment:
(1) is for a major information resources project; or
(2) involves storing, receiving, processing,
transmitting, disposing of, or accessing
sensitive personal information in a foreign
country.
Buy Texas In accordance with Section 2155.4441 of the Texas Respondent agrees to comply with Section 2155.4441 TEX GOVT CODE § EXCEPTION: On a case-by-case basis, and with the
Affirmation Government Code, Respondent agrees that during the of the Texas Government Code, relating to use of service 2155.4441 advice of legal counsel, the preface “to the extent
performance of a contract for services it shall purchase contracts and the purchase of products and materials applicable” may be added to the clause in contracts when

C ontract M anagement G uide - V ersion 1.2

products and materials produced in Texas when they are produced in the State of Texas. circumstances indicate that Section 2155.4441 of the
available at a price and time comparable to products and Texas Government Code does not apply to the transaction;
Or
materials produced outside this state. for example, to contracts that are solely for goods.
Respondent agrees to comply with Section 2155.4441
of the Texas Government Code, requiring the purchase of
products and materials produced in the State of Texas in
performing service contracts.
 Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
Child Support Under Section 231.006 of the Family Code, the vendor or Under Section 231.006(d) of the Texas Family Code, TEX FAM CODE §§ Section 231.006(d) of the Texas Family Code mandates
Obligation applicant certifies that the individual or business entity named regarding child support, Respondent certifies that the 231.006, 231.302 the use of statutorily specified text.
in this contract, bid or application is not ineligible to receive individual or business entity named in this Response
Affirmation Section 231.006(a) of the Texas Family Code provides
the specified grant, loan, or payment and acknowledges that is not ineligible to receive the specified payment and
that a child support obligor who is more than 30 days
this contract may be terminated and payment may be withheld acknowledges that the contract may be terminated and
delinquent in paying child support and a business entity in
if this certification is inaccurate. payment may be withheld if this certification is inaccurate.
which the obligor is a sole proprietor, partner, shareholder,
Furthermore, any Respondent subject to Section 231.006
or owner with an ownership interest of at least 25 percent
of the Texas Family Code, must include in the Response
is not eligible to: (1)  receive payments from state funds
the names and social security numbers of each person
under a contract to provide property, materials, or
with at least 25% ownership of the business entity
services; or (2) receive a state-funded grant or loan.
submitting the Response.
In situations where Responses are submitted to the agency
Or
via unencrypted email, Responses should only contain
Under Section 231.006 of the Family Code, the vendor the last four digits of the SSN in order to comply with the

T exas P rocurement
or applicant certifies that the individual or business sensitive personal information acquisition requirements
entity named in this contract, bid or application is not of Section 2054.1125 of the Texas Government Code. In

and
ineligible to receive the specified grant, loan, or payment the event a Respondent is subject to Section 231.006 of
and acknowledges that this contract may be terminated the Texas Family Code, the agency, in accordance with
and payment may be withheld if this certification is its information security protocol, should request the
inaccurate. A bid or an application for a contract, grant, Respondent to submit the complete social security number
or loan paid from state funds must include the name and via separate, secure transmission prior to conducting the
social security number of the individual or sole proprietor evaluation.
and each partner, shareholder, or owner with an
Supplemental text to the required clause may include the
ownership interest of at least 25 percent of the business
following:
entity submitting the bid or application.
FEDERAL PRIVACY ACT NOTICE: This notice is given
pursuant to the Federal Privacy Act. Disclosure of your
Social Security Number (SSN) is required under Section
231.006(c) and Section 231.302(c)(2) of the Texas
Family Code. The Social Security number will be used
to identify persons that may owe child support and will
be kept confidential to the fullest extent allowed under
Section 231.302(e) of the Texas Family Code.

Computer Respondent certifies its compliance with Subchapter Y, If Respondent is submitting a Response for the purchase TEX HEALTH & EXCEPTION: Clause only applies to solicitations and
Equipment Chapter 361 of the Texas Health and Safety Code and the or lease of computer equipment, then Respondent SAFETY CODE § contracts for the purchase or lease of computer
Texas Commission on Environmental Quality rules in 30 TAC certifies that it is in compliance with Subchapter Y, 361.965(c) equipment, which is defined in Section 361.962(2) of the
Recycling Chapter 328. Chapter 361 of the Texas Health and Safety Code related Texas Health and Safety Code as “a desktop or notebook
Program 1 TAC §217.10
to the Computer Equipment Recycling Program and the computer and includes a computer monitor or other
Texas Commission on Environmental Quality rules in 30 30 TAC §§328.131- display device that does not contain a tuner.”
TAC Chapter 328. 155
Section 361.965(c) of the Texas Health and Safety Code
states the following:
(c) A state agency that purchases or leases computer
equipment shall require each prospective bidder
to certify the bidder’s compliance with this
subchapter. Failure to provide that certification
renders the prospective bidder ineligible to
participate in the bidding.

C ontract M anagement G uide - V ersion 1.2 | APPENDIX 22 - PAGE 3

Statewide Procurement Division
 Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
Contracting In accordance with Section 552.372 of the Texas Government Respondent represents and warrants that it will TEX GOVT CODE § EXCEPTION: Clause only applies to certain solicitations
Information Code, Respondent agrees to (1) preserve all contracting comply with the requirements of Section 552.372(a) 552.372 and contracts.
information related to the contract as provided by the of the Texas Government Code. Except as provided by
Responsibilities Section 552.371(a) of the Texas Government Code states
records retention requirements applicable to the Agency Section 552.374(c) of the Texas Government Code,
Statewide Procurement Division

the following:
for the duration of the contract, (2) promptly provide to the the requirements of Subchapter J, Chapter 552 of the
Agency any contracting information related to the contract Government Code, may apply to the contract and the (a) This section applies to an entity that is not a
that is in the custody or possession of the Respondent on Respondent agrees that the contract can be terminated governmental body that executes a contract with
request of the Agency, and (3) on termination or expiration if the Respondent knowingly or intentionally fails to a governmental body that:
of the contract, either provide at no cost to the Agency all comply with a requirement of that subchapter. (1) has a stated expenditure of at least $1 million
contracting information related to the contract that is in the in public funds for the purchase of goods or
custody or possession of the Respondent or preserve the

APPENDIX 22 - PAGE 4 | T exas P rocurement

services by the governmental body; or
contracting information related to the contract as provided by
the records retention requirements applicable to the Agency. (2) results in the expenditure of at least $1

and
Except as provided by Section 552.374(c) of the Texas million in public funds for the purchase of
Government Code, the requirements of Subchapter J, Chapter goods or services by the governmental body
552, Government Code, may apply to the contract and the in a fiscal year of the governmental body.
Respondent agrees that the contract can be terminated if the Section 552.372 of the Texas Government Code states
Respondent knowingly or intentionally fails to comply with a the following:
requirement of that subchapter.
(a) A contract described by Section 552.371 must
require a contracting entity to:
(1) preserve all contracting information related
to the contract as provided by the records
retention requirements applicable to the
governmental body for the duration of the
contract;
(2) promptly provide to the governmental body
any contracting information related to the
contract that is in the custody or possession
of the entity on request of the governmental
body; and
(3) on completion of the contract, either:

C ontract M anagement G uide - V ersion 1.2

(A) provide at no cost to the governmental
body all contracting information related
to the contract that is in the custody or
possession of the entity; or
(B) preserve the contracting information
related to the contract as provided by
the records retention requirements
applicable to the governmental body.
 Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
Contracting (b) Unless Section 552.374(c) applies, a bid for a

T exas P rocurement
Information contract described by Section 552.371 and the
contract must include the following statement:

and
Responsibilities “The requirements of Subchapter J, Chapter
(continued) 552, Government Code, may apply to this
(include “bid” or “contract” as applicable) and
the contractor or vendor agrees that the contract
can be terminated if the contractor or vendor
knowingly or intentionally fails to comply with a
requirement of that subchapter.”
(c) A governmental body may not accept a bid
for a contract described by Section 552.371
or award the contract to an entity that the
governmental body has determined has
knowingly or intentionally failed to comply
with this subchapter in a previous bid or
contract described by that section unless the
governmental body determines and documents
that the entity has taken adequate steps to
ensure future compliance with the requirements
of this subchapter.

C ontract M anagement G uide - V ersion 1.2 | APPENDIX 22 - PAGE 5

Statewide Procurement Division
 Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
Cybersecurity Respondent represents and warrants that it will comply If Respondent has access to any state computer system TEX GOVT CODE § EXCEPTION: Clause only applies to solicitations and
Statewide Procurement Division

Training with the requirements of Section 2054.5192 of the Texas or database, Respondent shall complete cybersecurity contracts where contractors have access to a state
2054.5192
Government Code relating to cybersecurity training and training and verify completion of the training program to computer system or database.
required verification of completion of the training program. the Agency pursuant to and in accordance with Section
Section 2054.5192 of the Texas Government Code states
2054.5192 of the Government Code.
the following;
Or
(a) In this section, "contractor" includes a
Respondent shall ensure that any Respondent subcontractor, officer, or employee of the

APPENDIX 22 - PAGE 6 | T exas P rocurement

employee or subcontractor employee who has access to contractor.
a state computer system or database shall complete a
(b) A state agency shall require any contractor

and
cybersecurity training program certified under Section
who has access to a state computer system or
2054.519 of the Texas Government Code. Such training
database to complete a cybersecurity training
is required to occur during the contract term and the
program certified under Section 2054.519 as
renewal period. Respondent shall provide Agency with
selected by the agency.
verification of the completion of the requisite training
(c) The cybersecurity training program must be
completed by a contractor during the term of the
contract and during any renewal period.
(d) Required completion of a cybersecurity training
program must be included in the terms of
a contract awarded by a state agency to a
contractor.
(e) A contractor required to complete a cybersecurity
training program under this section shall verify
completion of the program to the contracting
state agency. The person who oversees contract
management for the agency shall:
(1) report the contractor's completion to the
department; and
(2) periodically review agency contracts to

C ontract M anagement G uide - V ersion 1.2

ensure compliance with this section.

Dealings Respondent has not given, offered to give, nor intends to Pursuant to Section 2155.003 of the Texas Government TEX GOVT CODE Employees of agencies that perform purchasing functions
with Public give at any time hereafter any economic opportunity, future Code, Respondent represents and warrants that it has §§ 572.051(a)(1), under the delegated authority of SPD shall adhere to the
employment, gift, loan, gratuity, special discount, trip, favor, not given, offered to give, nor intends to give at any time 2155.003 same ethical standards as CPA employees, and shall avoid
Servants or service to a public servant in connection with the submitted hereafter any economic opportunity, future employment, all conflicts of interest in their purchasing activities.
Affirmation 34 TAC § 20.157
Response. gift, loan, gratuity, special discount, trip, favor, or service
The Texas Ethics Commission administers and enforces
to a public servant in connection with the contract.
Section 2155.003 of the Texas Government Code and has
adopted rules at 1 TAC §§ 45.1, 45.3, 45.7.
 Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
Debts and Respondent agrees that any payments due under the contract Respondent agrees that any payments due under the TEX GOVT CODE §
Delinquencies shall be applied towards any debt or delinquency that is owed contract shall be directly applied towards eliminating any 2252.903
to the State of Texas. debt or delinquency it has to the State of Texas including,
Affirmation but not limited to, delinquent taxes, delinquent student
loan payments, and delinquent child support.

T exas P rocurement
Or

and
Respondent acknowledges and agrees that, to the extent
Respondent owes any debt including, but not limited to,
delinquent taxes, delinquent student loans, and child
support owed to the State of Texas, any payments or
other amounts Respondent is otherwise owed under the
contract may be applied toward any debt Respondent
owes the State of Texas until the debt is paid in full.
These provisions are effective at any time Respondent
owes any such debt or delinquency.
Disaster In accordance with 13 TAC § 6.94(a)(9), Respondent shall Upon request of Agency, Respondent shall provide TEX GOVT CODE § EXCEPTION: Clause is recommended for all contracts but
Recovery Plan provide to Agency the descriptions of its business continuity the descriptions of its business continuity and disaster 441.190 is an Essential Clause for solicitations and contracts with
and disaster recovery plans. recovery plans. vendors that have custody of vital state records.
Or 13 TAC § 6.94(a)(9) states that each state agency must
13 TAC § 6.94(a)(9)
require all third-party custodians of records to provide
Upon request of Agency, Respondent shall provide
the state agency with descriptions of their business
copies of its most recent business continuity and
continuity and/or disaster recovery plans as regards to
disaster recovery plans.
the protection of the state agency’s vital state records.
The term “vital state record” is defined in Section
441.180(13) of the Texas Government Code to mean any
state record necessary to:
(C) the resumption or continuation of state agency
operations in an emergency or disaster;
(D) the re-creation of the legal and financial status of
the agency; or
(E) the protection and fulfillment of obligations to the
people of the state.
Supplemental text to the required clause may provide
additional details regarding the required business
continuity and disaster recovery plans (e.g., title and date
of plan).

C ontract M anagement G uide - V ersion 1.2 | APPENDIX 22 - PAGE 7

Statewide Procurement Division
 Statewide Procurement Division

Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
Disclosure of In accordance with Section 2254.033 of the Texas Government TEX GOVT CODE § EXCEPTION: Clause only applies to solicitations and

APPENDIX 22 - PAGE 8 | T exas P rocurement

Prior State Code, relating to consulting services, Respondent certifies 2254.033 contracts for consulting services under Chapter 2254 of
that it does not employ an individual who has been employed the Texas Government Code.

and
Employment by Agency or another agency at any time during the two
Section 2254.034 of the Texas Government Code states
years preceding the submission of the Response or, in the
the following:
alternative, Respondent has disclosed in its Response the
following: (i) the nature of the previous employment with (a) A contract entered into in violation of Sections
Agency or the other agency; (ii) the date the employment was 2254.029 through 2254.031 is void.
terminated; and (iii) the annual rate of compensation for the (b) A contract entered into with a private consultant
employment at the time of its termination. who did not comply with Section 2254.033 is void.
(c) If a contract is void under this section:
(1) the comptroller may not draw a warrant or
transmit money to satisfy an obligation under
the contract; and
(2) a state agency may not make any payment
under the contract with state or federal money
or money held in or outside the state treasury.
(d) This section applies to all consulting services
contracts, including renewals, amendments, and
extensions of consulting services contracts.

C ontract M anagement G uide - V ersion 1.2

 Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
Dispute The dispute resolution process provided for in Chapter 2260 Disputes arising under the contract shall be resolved in TEX GOVT CODE § EXCEPTION: See “Dispute Resolution (Engineering,
Resolution of the Texas Government Code must be used to attempt to accordance with the dispute resolution process provided 2260.004 Architectural, or Construction Services)”
resolve any dispute arising under the contract. in Chapter 2260 of the Texas Government Code.
Section 2260.004 of the Texas Government Code states
(General) Or the following:
The dispute resolution process provided for in Chapter (a) Each unit of state government that enters into a
2260 of the Texas Government Code must be used to contract to which this chapter applies shall include
attempt to resolve any dispute arising under the contract. as a term of the contract a provision stating that
the dispute resolution process used by the unit of

T exas P rocurement
If the Contractor’s claim for breach of Contract cannot
state government under this chapter must be used
be resolved informally with the Agency, the claim shall
to attempt to resolve a dispute arising under the

and
be submitted to the negotiation process provided in
contract.
Chapter 2260. To initiate the process, the Contractor
shall submit written notice, as required by Chapter (b) The attorney general shall provide assistance to a
2260, to the individual identified in the Contract for unit of state government in developing the contract
receipt of notices. Any informal resolution efforts shall in provision required by this section.
no way modify the requirements or toll the timing of the
Supplemental text to the required clause may include
formal written notice of a claim for breach of contract
specific details of the agency’s dispute resolution process
required under §2260.051 of the Texas Government
adopted by rule.
Code. Compliance by the Contractor with Chapter 2260
is a condition precedent to the filing of a contested case
proceeding under Chapter 2260.
The contested case process provided in Chapter 2260 is
the Contractor’s sole and exclusive process for seeking a
remedy for an alleged breach of Contract by the Agency
if the parties are unable to resolve their disputes as
described above.
Notwithstanding any other provision of the Contract to
the contrary, unless otherwise requested or approved
in writing by the Agency, the Contractor shall continue
performance and shall not be excused from performance
during the period any breach of contract claim or while
the dispute is pending. However, the Contractor may
suspend performance during the pendency of such
claim or dispute if the Contractor has complied with
all provisions of Section 2251.051, Texas Government
Code, and such suspension of performance is expressly
applicable and authorized under that law.

C ontract M anagement G uide - V ersion 1.2 | APPENDIX 22 - PAGE 9

Statewide Procurement Division
 Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
Dispute Subject to Texas Government Code, Section 2260.002, the TEX. CIV. PRAC. & EXCEPTION: Clause only applies to solicitations and
Resolution dispute resolution process provided for in Chapter 2260 of the REM. CODE CH 144 contracts for engineering, architectural, or construction
Texas Government Code and set forth below in subsections services.
(Engineering, (a)-(d) shall be used by the parties to attempt to resolve all
Under Chapter 114 of the Texas Civil Practices and
Architectural, disputes arising under this contract. In accordance with the
Statewide Procurement Division

Remedies Code, a claim for breach of a contract for

Texas Civil Practice and Remedies Code, Section 114.005,
or Construction engineering, architectural, or construction services
the parties agree claims encompassed by Texas Government
Services) or for materials related to those services, in which the
Code, Section 2260.002(3) and Texas Civil Practice and
amount of controversy is not less than $250,000 can be
Remedies Code Section 114.002 shall be governed by the
brought directly in district court without exhausting the
dispute resolution process set forth below in subsections (a)-
administrative requirements of Chapter 2260 of the Texas
(d).
Government Code. Consult with legal counsel regarding
(a) Notwithstanding Texas Government Code, Chapter applicability of this clause.

APPENDIX 22 - PAGE 10 | T exas P rocurement

2260.002(3) and Chapter 114.012 and any other
statute or applicable law, if the Respondent’s claim for

and
breach of contract cannot be resolved by the parties
in the ordinary course of business, Respondent may
make a claim against Agency for breach of contract
and the Agency may assert a counterclaim against the
Respondent as is contemplated by Texas Government
Code, Chapter 2260, Subchapter B. In such event,
Respondent must provide written notice to Agency of a
claim for breach of the contract not later than the 180th
day after the date of the event giving rise to the claim.
The notice must state with particularity: (1) the nature
of the alleged breach; (2) the amount the Respondent
seeks as damages; and (3) the legal theory of recovery.
(b) The chief administrative officer, or if designated in the
contract, another officer of the Agency, shall examine
the claim and any counterclaim and negotiate with
the Respondent in an effort to resolve them. The
negotiation must begin no later than the 120th day
after the date the claim is received, as is contemplated
by Texas Government Code, Chapter 2260, Section
2260.052.

C ontract M anagement G uide - V ersion 1.2

(c) If the negotiation under paragraph (b) above results in
the resolution of some disputed issues by agreement or
in a settlement, the parties shall reduce the agreement
or settlement to writing and each party shall sign the
agreement or settlement. A partial settlement or
resolution of a claim does not waive a party’s rights
under this contract as to the parts of the claim that are
not resolved.
 Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
Dispute (d) If a claim is not entirely resolved under paragraph (b)
Resolution above, on or before the 270th day after the date the claim
is filed with Agency, unless the parties agree in writing to
(Engineering, an extension of time, the parties may agree to mediate a
Architectural, claim made under this dispute resolution procedure. This
dispute resolution procedure is the Respondent’s sole
or Construction and exclusive process for seeking a remedy for an alleged
Services) breach of contract by the Agency if the parties are unable

T exas P rocurement
to resolve their disputes as described in this section.

and
(e) Nothing in the contract shall be construed as a waiver
of the state’s or the Agency’s sovereign immunity.
This contract shall not constitute or be construed
as a waiver of any of the privileges, rights, defenses,
remedies, or immunities available to the State of Texas.
The failure to enforce, or any delay in the enforcement,
of any privileges, rights, defenses, remedies, or
immunities available to the State of Texas under this
contract or under applicable law shall not constitute
a waiver of such privileges, rights, defenses, remedies
or immunities or be considered as a basis for estoppel.
Agency does not waive any privileges, rights, defenses,
or immunities available to Agency by entering into this
contract or by its conduct, or by the conduct of any
representative of Agency, prior to or subsequent to
entering into this contract.
(f) Compliance with the dispute resolution process
provided for in Texas Government Code, Chapter
2260, subchapter B and incorporated by reference in
subsection (a)-(d) above is a condition precedent to the
Respondent:
(1) filing suit pursuant to Chapter 114 of the Civil
Practices and Remedies Code; or
(2) initiating a contested case hearing pursuant
to Subchapter C of Chapter 2260 of the Texas
Government Code.

C ontract M anagement G uide - V ersion 1.2 | APPENDIX 22 - PAGE 11

Statewide Procurement Division
 Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
Entities If Respondent is required to make a certification pursuant Pursuant to Section 2271.002 of the Texas Government TEX GOVT CODE § EXCEPTION: Clause only applies to certain solicitations
that Boycott to Section 2271.001 of the Texas Government Code, Code, Respondent certifies that either (i) it meets an 2271.002 and contracts.
Respondent certifies that Respondent does not boycott exemption criteria under Section 2271.002; or (ii) it
Israel Section 2271.002 of the Texas Government Code states
Israel and will not boycott Israel during the term of the does not boycott Israel and will not boycott Israel during
the following:
contract resulting from this solicitation. If Respondent does the term of the contract resulting from this solicitation.
not make that certification, Respondent must indicate that in Respondent shall state any facts that make it exempt (a) This section applies only to a contract that:
its Response and state why the certification is not required. from the boycott certification in its Response.
Statewide Procurement Division

(1) is between a governmental entity and

Or a company with 10 or more full-time
employees; and
Respondent represents and warrants that (1) it does
not, and shall not for the duration of the contract, (2) has a value of $100,000 or more that is to be
boycott Israel or (2) the verification required by Section paid wholly or partly from public funds of the
2271.002 of the Texas Government Code does not governmental entity.
apply to the contract. If circumstances relevant to this (b) A governmental entity may not enter into a

APPENDIX 22 - PAGE 12 | T exas P rocurement

provision change during the course of the contract, contract with a company for goods or services
Respondent shall promptly notify Agency. unless the contract contains a written verification

and
from the company that it:
(1) does not boycott Israel; and
(2) will not boycott Israel during the term of the
contract.
Section 2271.001(2) of the Government Code defines
“company" to be the meaning assigned by Section
808.001 of the Texas Government Code, except that the
term does not include a sole proprietorship.

E-Verify Respondent certifies that for contracts for services, Respondent certifies that it utilizes and will continue Executive Order No. EXCEPTION: Clause only applies to solicitations and
Program Respondent shall utilize the U.S. Department of Homeland to utilize the U.S. Department of Homeland Security’s RP-80 contracts for services from agencies that are under the
Security’s E-Verify system during the term of the contract to E-Verify system to determine the eligibility of: direction of the Governor.
Tex. Att’y Gen. Op.
determine the eligibility of:
1. all persons employed to perform duties within No. KP-70 (2016) EXCEPTION: On a case-by-case basis, and in consultation
1. all persons employed by Respondent to perform duties Texas during the term of the contract; and with legal counsel, the preface “to the extent not
within Texas; and prohibited by federal law or regulation” may be added to
2. all persons, including subcontractors, assigned
the clause in contracts when circumstances indicate that
2. all persons, including subcontractors, assigned by by Respondent to perform work pursuant to the
strict compliance with the required clause is inconsistent
Respondent to perform work pursuant the contract contract within the United States of America.
with current federal law or regulation.
within the United States of America.

C ontract M anagement G uide - V ersion 1.2

Supplemental text to the required clause may include the
following:
If it is determined that Respondent has violated
the certifications set forth in this Section, then (1)
Respondent shall be in breach of contract, (2) Agency
shall have the option to terminate the contract for
cause without prior notice, and (3) in addition to any
other rights or remedies available to Agency under the
contract, Respondent shall be responsible for all costs
incurred by Agency to obtain substitute services to
replace the terminated contract.
 Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
Excess The contract is subject to termination or cancellation, without Any contract resulting from this Solicitation is contingent TEX CONST Art III EXCEPTION: Clause is recommended for every contract
Obligations penalty to Agency, either in whole or in part, subject to the upon the continued availability of lawful appropriations by § 49a but constitutes an Essential Clause for any contract with a
availability of state funds. the Texas Legislature. term that crosses the biennium.
Prohibited
Or The Texas Constitution and the General Appropriations Act
TEX CONST Art
prohibit an agency from incurring obligations in excess of
Respondent understands that all obligations of Agency VIII § 6
amounts lawfully appropriated by the Texas Legislature
under the contract are subject to the availability of state
over the course of a biennium. Therefore, any installment
funds. If such funds are not appropriated or become
General purchase, lease, or any other type of purchase which incurs
unavailable, the contract may be terminated by Agency.
Appropriations Act, an obligation beyond the current appropriations is strictly

T exas P rocurement
Or prohibited, unless such obligation is expressly conditioned
House Bill 1, 86th
The contract shall not be construed as creating a debt on R.S. at Art IX, § 6.03 upon continued legislative appropriation. For information

and
behalf of Agency in violation of Article III, Section 49a of regarding the one exception to the prohibition against
the Texas Constitution. Respondent understands that all incurring excess obligations, refer to the “Termination
obligations of Agency under the contract are subject to for Non-Appropriations, Excess Obligations Prohibited”
the availability of state funds. Section of the Guide.

Or Penalty for Requisitioning Officer or Employee. If General

Appropriations Act, House Bill 1, 86th R.S. at Article IX,
The contract is subject to termination or cancellation, Section 6.03 is violated, the State Auditor shall certify the
without penalty to Agency, either in whole or in part, fact of the violation and the amount of the over-obligation
subject to the availability of state funds. Agency is a to CPA, and CPA shall deduct an amount equivalent to the
state agency whose authority and appropriations are over-obligation from the salary or other compensation
subject to actions of the Texas Legislature. If Agency due to the responsible disbursing or requisitioning officer
becomes subject to a legislative change, revocation of or employee, and apply the amount to the payment
statutory authority, or lack of appropriated funds that obligation.
would render either Agency’s or Respondent’s delivery
or performance under the contract impossible or Supplemental text to the required clause may include the
unnecessary, the contract will be terminated or cancelled following to clarify the effect of the termination in advance
and be deemed null and void. In the event of a termination payment situations such as software procurements:
or cancellation under this Section, Agency will not be Termination under this Section shall not affect
liable to Respondent for any damages, that are caused Agency’s right to use previously paid licensed
or associated with such termination, or cancellation, and software through the term of each such license, or any
Agency will not be required to give prior notice. maintenance or support paid prior to such termination.
Excluded Parties Respondent certifies that it is not listed in the prohibited Executive Order No. EXCEPTION: Clause applies as long as Executive Order No.
vendors list authorized by Executive Order No. 13224, 13224 13224 is in effect.
“Blocking Property and Prohibiting Transactions with Persons
Executive Order 13224 (Blocking Property and Prohibiting
Who Commit, Threaten to Commit, or Support Terrorism”,
Transactions with Persons Who Commit, Threaten to
published by the United States Department of the Treasury,
Commit, or Support Terrorism), was issued by President
Office of Foreign Assets Control.
George W. Bush on September 23, 2001, as a response to
the attacks on September 11, 2001.

C ontract M anagement G uide - V ersion 1.2 | APPENDIX 22 - PAGE 13

Statewide Procurement Division
 Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
Executive Under Section 669.003 of the Texas Government Code, In accordance with Section 669.003 of the Texas TEX GOVT CODE § Section 669.003 of the Texas Government Code states
Statewide Procurement Division

Head of a Respondent certifies that it does not employ, or has disclosed Government Code, relating to contracting with the 669.003 the following:
its employment of, any former executive head of the Agency. executive head of a state agency, Respondent certifies
State Agency A state agency may not enter into a contract with the
Respondent must provide the following information in the that it is not (1) the executive head of the Agency, (2)
Affirmation executive head of the state agency, with a person who
Response. a person who at any time during the four years before
at any time during the four years before the date of the
the date of the contract was the executive head of the
Name of Former Executive: _________________________ contract was the executive head of the state agency,
Agency, or (3) a person who employs a current or former
or with a person who employs a current or former
Name of State Agency: ____________________________ executive head of the Agency.
executive head of a state agency affected by this

APPENDIX 22 - PAGE 14 | T exas P rocurement

Date of Separation from State agency: _________________ Or section, unless the governing body:
Position with Respondent: _________________________ Under Section 669.003 of the Texas Government Code, (1) votes, in an open meeting, to approve the

and
Date of Employment with Respondent: _________________ relating to contracting with an executive head of a contract; and
state agency, Respondent represents that no person
(2) notifies the Legislative Budget Board, not later
who served as an executive of Agency, in the past
than the fifth day before the date of the vote, of
four (4) years, was involved with or has any interest
the terms of the proposed contract.
in the contract. If Respondent employs or has used
the services of a former executive of Agency, then
Respondent shall provide the following information in
the Response: name of the former executive, the name
of the state agency, the date of separation from the state
agency, the position held with Respondent, and the date
of employment with Respondent.
False Statements Respondent represents and warrants that all statements and If Respondent signs the Response with a false statement TEX GOVT CODE § EXCEPTION: Clause is recommended for every contract
information prepared and submitted in this document are or it is subsequently determined that Respondent 2155.077(a)(2) but constitutes an Essential Clause for solicitations.
current, complete, true, and accurate. Submitting a Response has violated any of the representations, warranties,
Under SPD’s debarment rules at 34 TAC § 20.585, the
with a false statement or material misrepresentations made guarantees, certifications, or affirmations included in
director of SPD may debar a contractor for a period of no
during the performance of a contract is a material breach the Response, Respondent will be in default under the
more than five years upon a finding that the contractor
of contract and may void the submitted Response and any contract and Agency may terminate or void the contract.
committed fraud in the procurement or performance
resulting contract.
Or of the contract, including the submission of falsified
documents by the contractor or any person under the
The undersigned certifies that the information contained
direction or control of the contractor.

C ontract M anagement G uide - V ersion 1.2

in this Response is accurate and complete.
Or
Other text that specifies that the Response was reviewed
for accuracy and completeness by Respondent prior to
submission to the Agency.
 Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
Financial Under Section 2155.004(b) of the Texas Government Code, Pursuant to Section 2155.004(a) of the Texas TEX GOVT CODE § Section 2155.004(b) of the Texas Government Code
Participation Respondent certifies that the individual or business entity Government Code, Respondent certifies that neither 2155.004 mandates the use of statutorily specified text.
named in this Response or contract is not ineligible to receive Respondent nor any person or entity represented by
Prohibited Supplemental text to the required clause may include the
the specified contract and acknowledges that the contract Respondent has received compensation from Agency
Affirmation following:
may be terminated and payment withheld if this certification to participate in the preparation of the specifications or
is inaccurate. solicitation on which this Response or contract is based. This Section does not prohibit a Respondent or
Under Section 2155.004(b) of the Texas Government contract participant from providing free technical

T exas P rocurement
Code, Respondent certifies that the individual or assistance.
business entity named in this Response or contract

and
is not ineligible to receive the specified contract and
acknowledges that the contract may be terminated and
payment withheld if this certification is inaccurate.
Foreign Terrorist Respondent represents and warrants that it is not engaged in Section 2252.152 of the Texas Government Code TEX GOVT CODE § Section 2252.152 (Contracts With Companies Engaged
Organizations business with Iran, Sudan, or a foreign terrorist organization, prohibits Agency from awarding a contract to any person 2252.152 In Business With Iran, Sudan, Or Foreign Terrorist
as prohibited by Section 2252.152 of the Texas Government who does business with Iran, Sudan, or a foreign terrorist Organization Prohibited) of the Texas Government Code
Code. organization as defined in Section 2252.151 of the states the following:
Texas Government Code. Respondent certifies that it not
A governmental entity may not enter into a
ineligible to receive the contract.
governmental contract with a company that is
Or identified on a list prepared and maintained under
Section 806.051, 807.051, or 2252.153.
In accordance with Texas Government Code, Chapter
2252, Subchapter G, Respondent hereby represents In accordance with Section 2252.153 of the Texas
and warrants that it is not a company identified on the Government Code, CPA has posted on its website a list
lists prepared and maintained under Texas Government of companies known to have contracts with or provide
Code §§ 806.051 (companies with business operations in supplies or services to a foreign terrorist organization.
Sudan), 807.051 (companies with business operations in
Iran), or 2252.153 (companies known to have contracts
with or provide supplies or services to a foreign terrorist
organization). Notwithstanding the foregoing, a company
that the United States government affirmatively declares
to be excluded from its federal sanctions regime relating
to Sudan, Iran, or to a foreign terrorist organization, is
not subject to contract prohibition under this clause.
A company claiming such exemption must submit the
official copy of the declaration.

C ontract M anagement G uide - V ersion 1.2 | APPENDIX 22 - PAGE 15

Statewide Procurement Division
 Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
Statewide Procurement Division

Former Agency Respondent represents and warrants that none of its In accordance with Section 2252.901 of the Texas TEX GOVT CODE § EXCEPTION: Clause only applies to solicitations and
Employees employees including, but not limited to, those authorized to Government Code, Respondent represents and warrants 2252.901 contracts that are employment contracts or professional
provide services under the contract, were former employees of that none of its employees including, but not limited to, services and consulting services contracts under Chapter
the Agency during the twelve (12) month period immediately those authorized to provide services under the contract, 2254 of the Texas Government Code, if appropriated
prior to the date of execution of the contract. were former employees of the Agency during the twelve money will be used to make payments under the contract.
(12) month period immediately prior to the date of Section 2252.901(a) of the Texas Government Code
execution of the contract. provides a narrow exception to the prohibition with

APPENDIX 22 - PAGE 16 | T exas P rocurement

regards to the professional services contracts.
Or
Section 2252.901(a) of the Texas Government Code

and
For professional services procurements
states the following:
In accordance with Section 2252.901 of the Texas
A state agency may not enter into an employment
Government Code, Respondent represents and warrants
contract, a professional services contract under
that for professional services contracts as described by
Chapter 2254, or a consulting services contract under
Chapter 2254 of the Texas Government Code, if a former
Chapter 2254 with a former or retired employee of the
employee of the Agency was employed by Respondent
agency before the first anniversary of the last date on
within one year of the employee’s leaving the Agency,
which the individual was employed by the agency, if
then such employee will not perform services on projects
appropriated money will be used to make payments
with Respondent that the employee worked on while
under the contract. This section does not prohibit
employed by the Agency.
an agency from entering into a professional services
contract with a corporation, firm, or other business
entity that employs a former or retired employee of
the agency within one year of the employee’s leaving
the agency, provided that the former or retired
employee does not perform services on projects for
the corporation, firm, or other business entity that the
employee worked on while employed by the agency.
Governing Law The contract shall be governed by and construed in accordance TEX GOVT CODE §
and Venue with the laws of the State of Texas, without regard to the 2155.0012

C ontract M anagement G uide - V ersion 1.2

conflicts of law provisions. The venue of any suit arising under
the contract is fixed in any court of competent jurisdiction of
Travis County, Texas, unless the specific venue is otherwise
identified in a statute which directly names or otherwise
identifies its applicability to the contracting Agency.
 Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
Human Under Section 2155.0061 of the Texas Government Code, TEX GOVT CODE § Section 2155.0061 mandate the use of statutorily
Trafficking the Respondent certifies that the individual or business entity 2155.0061 specified text.
named in this Response or contract is not ineligible to receive
Prohibition Section 2155.0061 of the Texas Government Codes
the specified contract and acknowledges that this contract
states the following:
may be terminated and payment withheld if this certification
is inaccurate (a) A state agency may not accept a bid or award

T exas P rocurement
a contract, including a contract for which
purchasing authority is delegated to a state

and
agency, that includes proposed financial
participation by a person who, during the five-
year period preceding the date of the bid or
award, has been convicted of any offense related
to the direct support or promotion of human
trafficking.
(b) A bid or award subject to the requirements of this
section must include the following statement:
"Under Section 2155.0061, Government
Code, the vendor certifies that the individual or
business entity named in this bid or contract is
not ineligible to receive the specified contract
and acknowledges that this contract may
be terminated and payment withheld if this
certification is inaccurate."
(c) If a state agency determines that an individual
or business entity holding a state contract was
ineligible to have the bid accepted or contract
awarded under this section, the state agency
may immediately terminate the contract without
further obligation to the vendor.
(d) This section does not create a cause of action to
contest a bid or award of a state contract.

C ontract M anagement G uide - V ersion 1.2 | APPENDIX 22 - PAGE 17

Statewide Procurement Division
 Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
Statewide Procurement Division

TEX GOVT CODE

§ 2262.051(d)(1)
Indemnification RESPONDENT SHALL DEFEND, INDEMNIFY AND HOLD TEX CONST Art EXCEPTION: See “Indemnification (Engineering or
(General) HARMLESS THE STATE OF TEXAS AND AGENCY, AND/OR VIII § 6 Architectural Services)”
THEIR OFFICERS, AGENTS, EMPLOYEES, REPRESENTATIVES,
TEX GOVT CODE § NOTE: Depending on the transaction, the parties may
CONTRACTORS, ASSIGNEES, AND/OR DESIGNEES FROM
2254.0031 also negotiate an additional indemnification clause
ANY AND ALL LIABILITY, ACTIONS, CLAIMS, DEMANDS, OR

APPENDIX 22 - PAGE 18 | T exas P rocurement

to specifically address intellectual property. See
SUITS, AND ALL RELATED COSTS, ATTORNEY FEES, AND
“Indemnification (IP).”
EXPENSES ARISING OUT OF, OR RESULTING FROM ANY

and
ACTS OR OMISSIONS OF RESPONDENT OR ITS AGENTS, Vendor created liability under a contract may pose a
EMPLOYEES, SUBCONTRACTORS, ORDER FULFILLERS, OR financial risk to the State in violation of the prohibition
SUPPLIERS OF SUBCONTRACTORS IN THE EXECUTION OR against Excess Obligations.
PERFORMANCE OF THE CONTRACT AND ANY PURCHASE Legal counsel should be sought prior to the agency
ORDERS ISSUED UNDER THE CONTRACT. THE DEFENSE agreeing to a mutual indemnification or indemnification
SHALL BE COORDINATED BY RESPONDENT WITH THE of another entity as such an obligation may constitute a
OFFICE OF THE TEXAS ATTORNEY GENERAL WHEN TEXAS “debt” in violation of law. See Tex. Att’y Gen. Op. No. MW-
STATE AGENCIES ARE NAMED DEFENDANTS IN ANY LAWSUIT 475 (1982).
AND RESPONDENT MAY NOT AGREE TO ANY SETTLEMENT
WITHOUT FIRST OBTAINING THE CONCURRENCE FROM THE A statute may expressly authorize the state’s indemnification
OFFICE OF THE TEXAS ATTORNEY GENERAL. RESPONDENT of another entity. See TEX GOV’T CODE § 808.003.
AND AGENCY AGREE TO FURNISH TIMELY WRITTEN NOTICE Supplemental text to the required clause may include the
TO EACH OTHER OF ANY SUCH CLAIM.   following:
THIS PARAGRAPH IS NOT INTENDED TO AND SHALL
NOT BE CONSTRUED TO REQUIRE RESPONDENT
TO INDEMNIFY OR HOLD HARMLESS THE STATE OR
AGENCY FOR ANY CLAIMS OR LIABILITIES RESULTING
FROM THE NEGLIGENT ACTS OR OMISSIONS OF
AGENCY OR ITS EMPLOYEES. 

C ontract M anagement G uide - V ersion 1.2

For the avoidance of doubt, Agency shall not indemnify
Respondent or any other entity under the contract.
 Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
Indemnification RESPONDENT SHALL INDEMNIFY AND HOLD HARMLESS TEX GOVT CODE § EXCEPTION: Clause only applies to solicitations and
(Engineering or THE STATE OF TEXAS AND AGENCY, AND/OR THEIR 2254.0031 contracts involving architectural or engineering services.
OFFICERS, AGENTS, EMPLOYEES, REPRESENTATIVES,
Architectural TEX LOCAL GOVT Section 2254.0031 of the Texas Government Code states

T exas P rocurement
CONTRACTORS, ASSIGNEES, AND/OR DESIGNEES FROM ANY
Services) CODE § 271.904(a)- the following:
AND ALL LIABILITY, ACTIONS, CLAIMS, DEMANDS, OR SUITS,
(e) and (g).

and
AND ALL RELATED DAMAGES, COSTS, ATTORNEY FEES, AND (a) A state governmental entity may require a
EXPENSES TO THE EXTENT CAUSED BY, ARISING OUT OF, OR contractor selected under this subchapter to
RESULTING FROM ANY ACTS OF NEGLIGENCE, INTENTIONAL indemnify or hold harmless the state from claims
TORTS, WILLFUL MISCONDUCT, PERSONAL INJURY OR and liabilities resulting from the negligent acts or
DAMAGE TO PROPERTY, AND/OR OTHERWISE RELATED TO omissions of the contractor or persons employed
RESPONDENT’S PERFORMANCE, AND/OR FAILURES TO PAY by the contractor. A state governmental entity
A SUBCONTRACTOR OR SUPPLIER BY THE RESPONDENT may not require a contractor to indemnify,
OR ITS AGENTS, EMPLOYEES, SUBCONTRACTORS, ORDER hold harmless, or defend the state for claims
FULFILLERS, CONSULTANTS UNDER CONTRACT TO or liabilities resulting from the negligent acts or
RESPONDENT, OR ANY OTHER ENTITY OVER WHICH THE omissions of the state governmental entity or its
CONTRACTOR EXERCISES CONTROL, OR SUPPLIERS OF employees.
SUBCONTRACTORS IN THE EXECUTION OR PERFORMANCE (b) Notwithstanding any other provision of law,
OF THE CONTRACT. THE DEFENSE SHALL BE COORDINATED Sections 271.904(a)-(e) and (g), Local Government
BY RESPONDENT WITH THE OFFICE OF THE TEXAS Code, apply to a contract for architectural or
ATTORNEY GENERAL WHEN TEXAS STATE AGENCIES ARE engineering services between an architect or
NAMED DEFENDANTS IN ANY LAWSUIT AND RESPONDENT engineer selected under this subchapter and a
MAY NOT AGREE TO ANY SETTLEMENT WITHOUT FIRST state agency as defined by Section 2052.101.
OBTAINING THE CONCURRENCE FROM THE OFFICE OF THE
TEXAS ATTORNEY GENERAL. RESPONDENT AND AGENCY Sections (a)-(e) and (g) of the Texas Local Government
AGREE TO FURNISH TIMELY WRITTEN NOTICE TO EACH Code states, among other things, that indemnifications
OTHER OF ANY SUCH CLAIM provisions in contracts for architectural or engineering
services are void and unenforceable unless limited to
specific acts provided for within the statute.

C ontract M anagement G uide - V ersion 1.2 | APPENDIX 22 - PAGE 19

Statewide Procurement Division
 Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
RESPONDENT SHALL DEFEND, INDEMNIFY, AND HOLD TEX CONST Art EXCEPTION: Clause only applies to solicitations and
Statewide Procurement Division

Indemnification
HARMLESS AGENCY AND THE STATE OF TEXAS FROM VIII § 6 contracts involving intellectual property matters.
(IP) AND AGAINST ANY AND ALL CLAIMS, VIOLATIONS,
The IP Indemnification clause is used in addition to a
MISAPPROPRIATIONS OR INFRINGEMENT OF ANY PATENT,
general indemnification clause. Legal counsel should be
TRADEMARK, COPYRIGHT, TRADE SECRET OR OTHER
consulted regarding use of an IP Indemnification clause.
INTELLECTUAL PROPERTY RIGHTS AND/OR OTHER
INTANGIBLE PROPERTY, PUBLICITY OR PRIVACY RIGHTS,
AND/OR IN CONNECTION WITH OR ARISING FROM: (1)

APPENDIX 22 - PAGE 20 | T exas P rocurement

THE PERFORMANCE OR ACTIONS OF RESPONDENT
PURSUANT TO THIS CONTRACT; (2) ANY DELIVERABLE,

and
WORK PRODUCT, CONFIGURED SERVICE OR OTHER
SERVICE PROVIDED HEREUNDER; AND/OR (3) AGENCY’S
AND/OR RESPONDENT’S USE OF OR ACQUISITION OF
ANY REQUESTED SERVICES OR OTHER ITEMS PROVIDED
TO AGENCY BY RESPONDENT OR OTHERWISE TO WHICH
AGENCY HAS ACCESS AS A RESULT OF RESPONDENT’S
PERFORMANCE UNDER THE CONTRACT. RESPONDENT AND
AGENCY AGREE TO FURNISH TIMELY WRITTEN NOTICE TO
EACH OTHER OF ANY SUCH CLAIM. RESPONDENT SHALL
BE LIABLE TO PAY ALL COSTS OF DEFENSE, INCLUDING
ATTORNEYS’ FEES. THE DEFENSE SHALL BE COORDINATED
BY RESPONDENT WITH THE OFFICE OF THE TEXAS ATTORNEY
GENERAL(OAG) WHEN TEXAS STATE AGENCIES ARE NAMED
DEFENDANTS IN ANY LAWSUIT AND RESPONDENT MAY NOT
AGREE TO ANY SETTLEMENT WITHOUT FIRST OBTAINING
THE CONCURRENCE FROM OAG. IN ADDITION, RESPONDENT
WILL REIMBURSE AGENCY AND THE STATE OF TEXAS FOR
ANY CLAIMS, DAMAGES, COSTS, EXPENSES OR OTHER
AMOUNTS, INCLUDING, BUT NOT LIMITED TO, ATTORNEYS’
FEES AND COURT COSTS, ARISING FROM ANY SUCH CLAIM.
IF AGENCY DETERMINES THAT A CONFLICT EXISTS BETWEEN

C ontract M anagement G uide - V ersion 1.2

ITS INTERESTS AND THOSE OF RESPONDENT OR IF AGENCY
IS REQUIRED BY APPLICABLE LAW TO SELECT SEPARATE
COUNSEL, AGENCY WILL BE PERMITTED TO SELECT
SEPARATE COUNSEL AND RESPONDENT WILL PAY ALL
REASONABLE COSTS OF AGENCY’S COUNSEL.
 Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
No Conflicts of Respondent represents and warrants that the provision of Respondent has disclosed in writing to Agency all TEX GOVT CODE Guidance relating to a former state employee’s provision
Interest goods and services or other performance under the contract existing or potential conflicts of interest relative to the §§ 2252.908, of subcontracting services is discussed in Ethics Advisory
will not constitute an actual or potential conflict of interest or performance of the contract. 2254.032, Opinion No. 545 (2017).
reasonably create an appearance of impropriety. 2261.252(b)
Information obtained from the following sources may
indicate an actual or potential conflict of interest:
• Certificate of Interested Parties required by Section

T exas P rocurement
2252.908 of the Texas Government Code.
• Employee disclosure statement required by Section

and
2254.032 of the Texas Government Code.
• Employee disclosure statement required by Section
2261.252 of the Texas Government Code.
• Purchasing personnel disclosure statement required
by 2262.004 of the Texas Government Code.
Supplemental text to the required clause may include the
following:
If circumstances change during the course of the
contract, Respondent shall promptly notify Agency.
Prior Disaster Under Sections 2155.006 and 2261.053 of the Texas Sections 2155.006 and 2261.053 of the Texas TEX GOVT CODE Sections 2155.006 and 2261.053 of the Texas
Relief Contract Government Code, the Respondent certifies that the individual Government Code, prohibit state agencies from accepting §§ 2155.006, Government Code mandate the use of statutorily specified
or business entity named in this Response or contract is not a Response or awarding a contract that includes 2261.053 text.
Violation ineligible to receive the specified contract and acknowledges proposed financial participation by a person who, in the
that this contract may be terminated and payment withheld if past five years, has been convicted of violating a federal
this certification is inaccurate. law or assessed a penalty in connection with a contract
involving relief for Hurricane Rita, Hurricane Katrina, or
any other disaster, as defined by Section 418.004 of the
Texas Government Code, occurring after September 24,
2005. Under Sections 2155.006 and 2261.053 of the
Texas Government Code, Respondent certifies that the
individual or business entity named in this Response or
contract is not ineligible to receive the specified contract
and acknowledges that this contract may be terminated
and payment withheld if this certification is inaccurate.

C ontract M anagement G uide - V ersion 1.2 | APPENDIX 22 - PAGE 21

Statewide Procurement Division
 Statewide Procurement Division

Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
Public Information, documentation, and other material in connection Respondent understands that Agency will comply TEX GOVT CODE Supplemental text to the required clause may include the
with this Solicitation or any resulting contract may be with the Texas Public Information Act (Chapter 552 of Chapter 552 following:

APPENDIX 22 - PAGE 22 | T exas P rocurement

Information Act
subject to public disclosure pursuant to Chapter 552 of the the Texas Government Code) as interpreted by judicial
TEX GOVT CODE § Specific formats acceptable to the Agency include
Texas Government Code (the “Public Information Act”). In rulings and opinions of the Attorney General of the State

and
2252.907 Word, Excel, and pdf.
accordance with Section 2252.907 of the Texas Government of Texas. Information, documentation, and other material
Code, Respondent is required to make any information in connection with this Solicitation or any resulting Supplemental text to the required clause may include
created or exchanged with the State pursuant to the contract, contract may be subject to public disclosure pursuant details of the agency’s protocol for labeling confidential
and not otherwise excepted from disclosure under the Texas to the Texas Public Information Act. In accordance information and procedures for receipt and handling of
Public Information Act, available in a format that is accessible with Section 2252.907 of the Texas Government Code, public information requests.
by the public at no additional charge to the State. Respondent is required to make any information created
or exchanged with the State pursuant to the contract,
and not otherwise excepted from disclosure under the
Texas Public Information Act, available in a format that
is accessible by the public at no additional charge to the
State.
Signature By submitting the Response, Respondent represents and The undersigned certifies that I am duly authorized to TEX GOVT CODE § This clause ensures only individuals that are legally
Authority warrants that the individual submitting this document and submit this Response and execute a contract on my own 2155.0012 empowered to contractually bind the Respondent
the documents made part of this Response is authorized to behalf or on behalf of the Respondent listed below. execute the contract and related documents on behalf of
sign such documents on behalf of the Respondent and to bind the Respondent.
Or
the Respondent under any contract that may result from the
submission of this Response. Other text that specifies that the Respondent signatory
is authorized to act on behalf of the Respondent in
submitting the Response or executing the contract.

C ontract M anagement G uide - V ersion 1.2

 Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
Standard of Care Pursuant to Section 2254.0031 of the Texas Government TEX GOVT CODE § EXCEPTION: Clause only applies to solicitations and
for Architectural Code, which incorporates by reference Section 271.904(d) 2254.0031 contracts involving architectural or engineering services.
of the Texas Local Government Code, Respondent shall
and Engineering TEX LOCAL GOVT Section 2254.0031 of the Texas Government Code
perform services (1) with professional skill and care ordinarily
Contractors CODE § 271.904(a)- incorporates Sections 271.904(a)-(e) and (g) of the Texas
provided by competent engineers or architects practicing
(e) and (g) Local Government Code for all contracts for architectural/
under the same or similar circumstances and professional
engineering services.
license, and (2) as expeditiously as is prudent considering the
ordinary professional skill and care of a competent engineer Section 271.904(d) of the Texas Local Government Code
or architect. states the following:
A contract for engineering or architectural services to
which a governmental agency is a party must require
a licensed engineer or registered architect to perform

T exas P rocurement
services:

and
(1) with the professional skill and care ordinarily
provided by competent engineers or
architects practicing under the same or similar
circumstances and professional license; and
(2) as expeditiously as is prudent considering
the ordinary professional skill and care of a
competent engineer or architect.
Section 271.904(e) of the Texas Local Government Code
states that a provision establishing a different standard of
care than a standard described by Subsection (d) is void
and unenforceable.
State Auditor’s The state auditor may conduct an audit or investigation Pursuant to Section 2262.154 of the Texas Government TEX GOVT CODE § Supplemental text to the required clause may include the
Right to Audit of any entity receiving funds from the state directly under Code, the state auditor may conduct an audit or 2262.154 following:
the contract or indirectly through a subcontract under the investigation of any entity receiving funds from the
The contract may be amended unilaterally by Agency
contract. The acceptance of funds directly under the contract state directly under any contract or indirectly through a
to comply with any rules and procedures of the state
or indirectly through a subcontract under the contract acts subcontract under the contract. The acceptance of funds
auditor in the implementation and enforcement of
as acceptance of the authority of the state auditor, under the by the Respondent or any other entity or person directly
Section 2262.154 of the Texas Government Code.
direction of the legislative audit committee, to conduct an under the contract or indirectly through a subcontract
audit or investigation in connection with those funds. Under under the contract acts as acceptance of the authority
the direction of the legislative audit committee, an entity that of the state auditor, under the direction of the legislative
is the subject of an audit or investigation by the state auditor audit committee, to conduct an audit or investigation in
must provide the state auditor with access to any information connection with those funds. Under the direction of the
the state auditor considers relevant to the investigation or legislative audit committee, the Respondent or other
audit. entity that is the subject of an audit or investigation by
the state auditor must provide the state auditor with
access to any information the state auditor considers
relevant to the investigation or audit. Respondent shall
ensure that this paragraph concerning the authority
to audit funds received indirectly by subcontractors
through the contract and the requirement to cooperate
is included in any subcontract it awards.

C ontract M anagement G uide - V ersion 1.2 | APPENDIX 22 - PAGE 23

Statewide Procurement Division
 Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
Suspension and Respondent certifies that it and its principals are not Respondent certifies that the offering entity and its TEX GOVT CODE §
Debarment suspended or debarred from doing business with the state or principals are eligible to participate in this transaction 2155.077
federal government as listed on the State of Texas Debarred and have not been subjected to suspension, debarment,
Vendor List maintained by the Texas Comptroller of Public or similar ineligibility determined by any federal, state,
Accounts and the System for Award Management (SAM) or local governmental entity. Entities ineligible for federal
maintained by the General Services Administration. procurement are listed at http://www.sam.gov.
Statewide Procurement Division

Or
Respondent certifies that neither it nor its principals are
debarred, suspended, proposed for debarment, declared
ineligible, or otherwise excluded from participation in
the contract by any state or federal agency.
Technology Respondent expressly acknowledges that state funds may not TEX GOVT CODE § EXCEPTION: This clause only applies to contracts for

APPENDIX 22 - PAGE 24 | T exas P rocurement

Access Clause be expended in connection with the purchase of an automated 2157.005 Automated Information Systems entered into before
information system unless that system meets certain statutory September 1, 2006.

and
requirements relating to accessibility by persons with visual
In accordance with Section 2157.005 of the Texas
impairment. Accordingly, Respondent represents and warrants
Government Code, the Technology Access Clause
to Agency that the technology provided to Agency for purchase
contract provision remains in effect for any contract
is capable, either by virtue of features included within the
entered into before September 1, 2006.
technology or because it is readily adaptable by use with other
technology, of: This clause would be applicable to current agreements
involving long term software licenses (e.g., perpetual
• providing equivalent access for effective use by both visual
term) and equipment leases that were effective prior to
and non-visual means;
September 1, 2006.
• presenting information, including prompts used for
interactive communications, in formats intended for non-
visual use; and
• being integrated into networks for obtaining, retrieving,
and disseminating information used by individuals who are
not blind or visually impaired.
For purposes of this Section, the phrase “equivalent access”
means a substantially similar ability to communicate with
or make use of the technology, either directly by features
incorporated within the technology or by other reasonable
means such as assistive devices or services which would

C ontract M anagement G uide - V ersion 1.2

constitute reasonable accommodations under the Americans
With Disabilities Act or similar state or federal laws. Examples
of methods by which equivalent access may be provided
include, but are not limited to, keyboard alternatives to mouse
commands and other means of navigating graphical displays,
and customizable display appearance.
In accordance with Section 2157.005 of the Texas
Government Code, the Technology Access Clause contract
provision remains in effect for any contract entered into
before September 1, 2006.
 Legal Authority
in Addition to
Clause Standard Text Alternate Text Guidance
TEX GOVT CODE
§ 2262.051(d)(1)
Television Respondent certifies its compliance with Subchapter Z, If Respondent is submitting a Response for the TEX HEALTH & EXCEPTION: Clause only applies to solicitations and
Equipment Chapter 361 of the Texas Health and Safety Code, related to purchase or lease of covered television equipment, then SAFETY CODE § contracts for the purchase or lease of covered television
the Television Equipment Recycling Program. Respondent certifies that it is compliant with Subchapter 361.991(c) equipment as defined by Section 361.91(3) of the Texas
Recycling Z, Chapter 361 of the Texas Health and Safety Code Health and Safety Code.
Program related to the Television Equipment Recycling Program.
Section 361.991(c) of the Texas Health and Safety Code
states the following:
(c) A state agency that purchases or leases covered

T exas P rocurement
television equipment shall require a prospective
bidder to certify the bidder’s compliance with this

and
subchapter before the agency may accept the
prospective bidder’s bid.
Section 361.91(3) of the Texas Health and Safety Code
defines “covered television equipment” to mean the
following equipment marketed to and intended for
consumers:
(A) a direct view or projection television with a viewable
screen of nine inches or larger whose display
technology is based on cathode ray tube, plasma,
liquid crystal, digital light processing, liquid crystal
on silicon, silicon crystal reflective display, light-
emitting diode, or similar technology; or
(B) a display device that is peripheral to a computer
that contains a television tuner.

Terms and Any terms and conditions attached to a Response will not be TEX GOVT CODE § EXCEPTION: Clause does not apply to contracts but is an
Conditions considered unless specifically referred to in the Response. 2155.0012 Essential Clause for solicitations.
Attached to This clause ensures that Responses received by the
Response agency are complete prior to the closing date of the
solicitation.
Texas Bidder Respondent certifies that if a Texas address is shown as the TEX GOVT CODE § EXCEPTION: Clause does not apply to contracts but is an
Affirmation address of the Respondent on this Response, Respondent 2155.444(c) Essential Clause for solicitations.
qualifies as a Texas Bidder as defined in Section 2155.444(c)
As defined by TEX GOVT CODE § 2155.444(c), the term
of the Texas Government Code.
“Texas bidder” means a business: (1) incorporated in this
state; (2) that has its principal place of business in this
state; or (3) that has an established physical presence in
this state.

C ontract M anagement G uide - V ersion 1.2 | APPENDIX 22 - PAGE 25

Statewide Procurement Division
 APPENDIX 23
Recommended Contract Clauses
In accordance with Section 2262.051(d)(1) of the Texas Government Code, this document identifies the recommended provisions that an agency may include in a contract. The Recommended
Clauses are terms commonly found in agency solicitations and contracts. For reference, this compendium provides Sample Text for each Recommended Clause.

This compendium does not serve as a substitute for legal counsel. The determination as to the appropriateness of a particular contract term is dependent on the characteristics of the
transaction. Accordingly, legal counsel should be consulted to not only ensure that the text of the Recommended Clause is suitable for the applicable transaction but also that the use of
the clause is consistent with the agency’s internal policies and best practices. While these clauses are recommended clauses, agency legal counsel should carefully review and determine
whether to omit them from its procurement templates.

The following terms in the Recommended Clauses should be revised by the agency as appropriate for conformity with the applicable solicitation and contract documents: Agency,
Respondent, Response, and Solicitation. Examples of conforming terms include, but are not limited to, the following:
• “Agency” to agency name, Customer, or Client

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• “Respondent” to Bidder, Proposer, Applicant, Contractor, or Vendor

and
• “Response” to Bid, Proposal, Offer, or Application
• “Solicitation” to Invitation for Bids, Request for Proposals, Request for Offers, Request for Applications, Pricing Request, or Request for Qualifications
Note: This list does not include “sample” text for terms that by their nature are highly negotiable, unique to a particular type of transaction, or descriptive of an individual agency’s business
practice e.g., confidentiality and data protection safeguards, warranties, software licensing, terms of use, and service levels. Public procurement professionals are advised to seek assistance
from their agency legal counsel to ensure that solicitations and contracts include transaction-specific terms that protect the interests of the State.

Recommended Sample Text

Clause (It is expected that the actual wording of a Recommended Clause may vary by agency and legal counsel will be consulted prior to use.)
Abortion Funding Respondent represents and warrants that payments made by Agency to Respondent and Respondent’s receipt of appropriated funds under the contract are not prohibited by Article IX, Section
Limitation 6.25 of the General Appropriations Act.

Agency’s Right to Audit Respondent will make available at reasonable times and upon reasonable notice, and for reasonable periods, work papers, reports, books, records, and supporting documents kept current by
Respondent pertaining to the contract for purposes of inspecting, monitoring, auditing, or evaluating by Agency and the State of Texas.
Americans With
Disabilities Act Respondent represents and warrants its compliance with the requirements of the Americans With Disabilities Act (ADA) and its implementing regulations, as each may be amended.
Assignment Respondent shall not assign its rights under the contract or delegate the performance of its duties under the contract without prior written approval from the Agency. Any attempted assignment in
(for Goods) violation of this Section is void and without effect.
Or
Neither Party may assign the contract or assign, transfer or delegate, in whole or in part, any of its interest in, or rights or obligations under, the contract without the prior written consent of the other
Party, and any attempted or purported assignment, transfer or delegation thereof without such consent shall be null and void. Notwithstanding the foregoing, upon prior written notification to the
other Party, either Party may assign the contract or assign, transfer or delegate, in whole or in part, any of its interest in, or rights or obligations under, the contract without such prior written consent
to: (1) a successor in interest (for Agency, another state agency as designated by the Texas Legislature) or (2) a subsidiary, parent company, or other entity in connection with a merger, acquisition,
corporate reorganization, or sale of all or substantially all of its assets.

C ontract M anagement G uide - V ersion 1.2 | APPENDIX 23 - PAGE 1

Statewide Procurement Division
 Recommended Sample Text
Clause (It is expected that the actual wording of a Recommended Clause may vary by agency and legal counsel will be consulted prior to use.)
Binding Effect The contract shall inure to the benefit of, be binding upon, and be enforceable against, each Party and their respective permitted successors, assigns, transferees and delegates.
Or
The contract shall be binding upon and shall inure to the benefit of Agency and Respondent and to their representatives, successors and assigns.
Change in Law and Any alterations, additions, or deletions to the terms of the contract that are required by changes in federal or state law or regulations are automatically incorporated into the contract without written
Compliance with Laws amendment hereto, and shall become effective on the date designated by such law or by regulation.
Or
Statewide Procurement Division

Respondent shall comply with all laws, regulations, requirements and guidelines applicable to a vendor providing services and products required by the contract to the State of Texas, as these laws,
regulations, requirements and guidelines currently exist and as amended throughout the term of the contract. Agency reserves the right, in its sole discretion, to unilaterally amend the contract prior
to award and throughout the term of the contract to incorporate any modifications necessary for Agency’s compliance, as an agency of the State of Texas, with all applicable state and federal laws,
regulations, requirements and guidelines.
Contract Term The initial term of the contract shall be for one (1) year from [Insert Date] to [Insert Date]. Agency may, in its sole discretion, exercise the option to extend the contract for up to three (3) additional
one (1) year periods. To exercise the option to extend the term, Agency will notify Respondent; such notice may be by Purchase Order issuance.

APPENDIX 23 - PAGE 2 | T exas P rocurement

Damage to Government Respondent shall be liable for all damage to government-owned, leased, or occupied property and equipment caused by the Respondent and its employees, agents, subcontractors, and suppliers,
Property including any delivery or cartage company, in connection with any performance pursuant to the contract. Respondent shall notify the Agency in writing of any such damage within one (1) calendar

and
day. Respondent is responsible for the removal of all debris resulting from work performed under the contract.
Or
In the event of loss, destruction or damage to any Agency or State of Texas property by Respondent or Respondent’s employees, agents, subcontractors, and suppliers, Respondent shall be liable
to Agency and the State of Texas the full cost of repair, reconstruction or replacement of the lost, destroyed or damaged property. Respondent will reimburse Agency and the State of Texas for such
property damage within ten (10) calendar days after Respondent’s receipt of Agency’s notice of amount due.
Disclosure of Respondent represents and warrants that if selected for award of a contract as a result of the Solicitation, Respondent will submit to Agency a Certificate of Interested Parties prior to contract
Interested Parties execution in accordance with Section 2252.908 of the Texas Government Code.

Discounts If Respondent at any time during the term of the contract provides a discount on the final contract costs, Respondent will notify Agency in writing ten (10) calendar days prior to effective date of
discount. Agency will generate a Purchase Order Change Notice and send a revised Purchase Order to Respondent.
Or
Notwithstanding any other provision to the contrary, all the benefits, pricing and any hourly rates granted by Respondent to Agency herein are at least as favorable as the benefits, pricing and hourly
rates granted by Respondent to any previous client of Respondent for services and/or products similar to those provided hereunder. If Respondent enters into any subsequent agreement with any
other client during the term of this contract which provides for benefits, pricing and/or hourly rates that are more favorable than those contained in this contract, Respondent shall notify Agency
promptly of the existence of such more favorable benefits, pricing and/or hourly rates and Agency shall have the right to receive the more favorable contractual terms immediately. If requested in
writing by Agency, Respondent hereby agrees to amend this contract to contain the more favorable benefits, pricing and/or hourly rates.
Drug-Free Workplace Respondent represents and warrants that it shall comply with the applicable provisions of the Drug-Free Work Place Act of 1988 (41 U.S.C. § 701 et seq.) and maintain a drug-free work environment.

Electrical Items All electrical items must meet all applicable OSHA standards and regulations, and bear the appropriate listing from Underwriters Laboratory (UL), Factory Mutual Resource Corporation (FMRC), or

C ontract M anagement G uide - V ersion 1.2

National Electrical Manufacturers Association (NEMA).

Equal Employment Respondent represents and warrants its compliance with all applicable duly enacted state and federal laws governing equal employment opportunities.
Opportunity
Federal Occupational Respondent represents and warrants that all articles and services shall meet or exceed the safety standards established and promulgated under the Federal Occupational Safety and Health Act of
Safety and Health Law 1970, as amended (29 U.S.C. Chapter 15).

Force Majeure Neither Respondent nor Agency shall be liable to the other for any delay in, or failure of performance, of any requirement included in the contract caused by force majeure. The existence of such
causes of delay or failure shall extend the period of performance until after the causes of delay or failure have been removed provided the non-performing party exercises all reasonable due diligence
to perform. Force majeure is defined as acts of God, war, fires, explosions, hurricanes, floods, failure of transportation, or other causes that are beyond the reasonable control of either party and that
by exercise of due foresight such party could not reasonably have been expected to avoid, and which, by the exercise of all reasonable due diligence, such party is unable to overcome.
 Recommended Sample Text
Clause (It is expected that the actual wording of a Recommended Clause may vary by agency and legal counsel will be consulted prior to use.)
Immigration Respondent represents and warrants that it shall comply with the requirements of the Immigration and Nationality Act (8 U.S.C.§ 1101 et seq.) and all subsequent immigration laws and amendments.

Independent Contractor Respondent acknowledges and agrees that it is furnishing products and services in the capacity of an independent contractor and that Respondent and its personnel are not employees of the Agency
or the State of Texas.
Or
Respondent and Respondent’s employees, representatives, agents, subcontractors, suppliers, and third-party service providers shall serve as independent contractors in providing the services
under the contract. Neither Respondent nor Agency is an agent of the other and neither may make any commitments on the other party’s behalf. Should Respondent subcontract any of the services
required in the contract, Respondent expressly understands and acknowledges that in entering into such subcontract(s), Agency is in no manner liable to any subcontractor(s) of Respondent. In
no event shall this provision relieve Respondent of the responsibility for ensuring that the services performed under all subcontracts are rendered in compliance with the contract. Respondent shall
have no claim against Agency for vacation pay, sick leave, retirement benefits, social security, worker’s compensation, health or disability benefits, unemployment insurance benefits, or employee
benefits of any kind. The contract shall not create any joint venture, partnership, agency, or employment relationship between Respondent and Agency.
Legal and Respondent represents and warrants that it is not aware of and has received no notice of any court or governmental agency actions, proceedings or investigations, etc., pending or threatened
against Respondent or any of the individuals or entities included in the Response within the five (5) calendar years immediately preceding the submission of the Response that would or could impair

T exas P rocurement
Regulatory Actions
Respondent’s performance under the contract, relate to the solicited or similar goods or services, or otherwise be relevant to Agency’s consideration of the Response. If Respondent is unable to make
the preceding representation and warranty, then Respondent instead represents and warrants that it has included as a detailed attachment in its Response a complete disclosure of any such court

and
or governmental agency actions, proceedings or investigations, etc. that would or could impair Respondent’s performance under the contract, relate to the solicited or similar goods or services, or
otherwise be relevant to Agency’s consideration of the Response. In addition, Respondent represents and warrants that it shall notify Agency in writing within five (5) business days of any changes
to the representations or warranties in this clause and understands that failure to so timely update Agency shall constitute breach of contract and may result in immediate termination of the contract.
License Grant Respondent hereby grants to Agency a non-exclusive, perpetual, irrevocable, worldwide, transferable, fully paid, royalty-free, right and license: (a) to reproduce, modify, distribute, store, publicly
(Simple) perform, publicly display, create derivative works of, and otherwise exploit the deliverables, in each case without any restrictions and without accounting to Respondent; and (b) to sublicense any
or all such rights to third parties.
Limitation on Authority Respondent shall have no authority to act for or on behalf of Agency or the State of Texas except as expressly provided for in the contract; no other authority, power or use is granted or implied.
Respondent may not incur any debt, obligation, expense or liability of any kind on behalf of Agency or the State of Texas.
Lobbying Prohibition Respondent represents and warrants that Agency’s payments to Respondent and Respondent’s receipt of appropriated or other funds under the contract are not prohibited by Sections 556.005
or 556.0055 of the Texas Government Code.
Media Releases Respondent shall not use Agency’s name, logo, or other likeness in any press release, marketing material, or other announcement without Agency’s prior written approval. Agency does not endorse
any vendor, commodity, or service. Respondent is not authorized to make or participate in any media releases or public announcements pertaining to this procurement, the Response or the services
to which they relate without Agency’s prior written consent, and then only in accordance with explicit written instructions from Agency.

No Felony Criminal Respondent represents that neither Respondent nor any of its employees, agents, or representatives, including any subcontractors and employees, agents, or representative of such subcontractors,
Convictions have been convicted of a felony criminal offense or that if such a conviction has occurred Respondent has fully advised Agency in writing of the facts and circumstances surrounding the convictions.

No Implied Waiver The failure of a Party to insist at any time upon the strict performance of any covenant or agreement or to exercise any option, right, power, or remedy contained in the contract shall not be construed
as a waiver or a relinquishment thereof for the future.
Or
Failure of a Party to require performance by another Party under the contract will not affect the right of such Party to require performance in the future. No delay, failure, or waiver of either Party’s
exercise or partial exercise of any right or remedy under the contract shall operate to limit, impair, preclude, cancel, waive or otherwise affect such right or remedy. A waiver by a Party of any breach
of any term of the contract will not be construed as a waiver of any continuing or successive breach.
Or
No provision of the contract shall constitute or be construed as a waiver of any of the privileges, rights, defenses, remedies, or immunities available to Agency as an agency of the State of Texas or
otherwise available to Agency. The failure to enforce or any delay in the enforcement of any privileges, rights, defenses, remedies, or immunities detailed in the contract or otherwise available to
Agency by law will not constitute a waiver of said privileges, rights, defenses, remedies, or immunities or be considered as a basis for estoppel.

C ontract M anagement G uide - V ersion 1.2 | APPENDIX 23 - PAGE 3

Statewide Procurement Division
 Recommended Sample Text
Clause (It is expected that the actual wording of a Recommended Clause may vary by agency and legal counsel will be consulted prior to use.)
No Quantity Guarantees Agency makes no express or implied warranty whatsoever that any minimum compensation or minimum quantity will be guaranteed under the contract.
Or
The contract is not exclusive to the Respondent. Agency may obtain products and related services from other sources during the term of the contract. Agency makes no express or implied warranties
whatsoever that any particular quantity or dollar amount of products and related services will be procured through the contract.
No Third-Party The contract is made solely and specifically among and for the benefit of the parties named herein and their respective successors and assigns, and no other person shall have any right, interest, or
Statewide Procurement Division

Beneficiaries claims hereunder or be entitled to any benefits pursuant to or on account of the contract as a third-party beneficiary or otherwise.
Or
Nothing contained in the contract, either expressed or implied, is intended to confer on any person other than the Parties, or their respective permitted successors, assigns, transferees or delegates,
any interests, rights, remedies, obligations or liabilities pursuant to, or by reason of, this contract.
Permits, Certifications, Respondent represents and warrants that it has determined what licenses, certifications and permits are required under the contract and has acquired all applicable licenses, certifications, and permits.

APPENDIX 23 - PAGE 4 | T exas P rocurement

and Licenses

and
Prompt Payment Payment shall be made in accordance with Chapter 2251 of the Texas Government Code, commonly known as the Texas Prompt Payment Act. Chapter 2251 of the Texas Government Code shall
govern remittance of payment and remedies for late payment and non-payment.
Or
All payments to Respondent by Agency, any payments by Respondent to any subcontractor, and any payments by a subcontractor to any other person or entity that provides goods or services under
this contract shall be made in compliance with Chapter 2251 of the Texas Government Code and 34 Texas Administrative Code § 20.487.
Property Rights For purposes of the contract, the term “Work” is defined as all work papers, work products, materials, approaches, designs, specifications, systems, software, programs, source code, documentation
methodologies, concepts, intellectual property or other property developed, produced or generated in connection with the services provided under the contract. Agency and Respondent intend this
agreement to be a contract for the services and each considers the Work and any and all documentation or other products and results of the services to be rendered by Respondent to be a work made
for hire. Respondent and Respondent’s employees will have no rights in or ownership of the Work and any and all documentation or other products and results of the services or any other property
of Agency. Respondent acknowledges and agrees that the Work (and all rights therein) belongs to and shall be the sole and exclusive property of Agency. If for any reason the Work would not be
considered a work-for-hire under applicable law, Respondent does hereby sell, assign, and transfer to Agency, its successors and assigns, the entire right, title and interest in and to the copyright in
the Work and any registrations and copyright applications relating thereto and any renewals and extensions thereof, and in and to all works based upon, derived from, or incorporating the Work, and
in and to all income, royalties, damages, claims and payments now or hereafter due or payable with respect thereto, and in and to all causes of action, either in law or in equity for past, present, or
future infringement based on the copyrights, and in and to all rights corresponding to the foregoing. Respondent agrees to execute all papers and to perform such other property rights, as Agency
may deem necessary to secure for Agency or its designee the rights herein assigned. In the event that Respondent has any rights in and to the Work that cannot be assigned to Agency, Respondent
hereby grants to Agency an exclusive, worldwide, royalty-free, irrevocable, and perpetual license to directly and indirectly reproduce, distribute, modify, create derivative works of, publicly perform
and publicly display, such rights to make, have made, use, sell and offer for sale any products developed by practicing such rights, and to otherwise use such rights, with the right to sublicense such
rights through multiple levels of sublicenses. No later than the first calendar day after the termination or expiration of the contract or upon Agency’s request, Respondent shall deliver to Agency
all completed, or partially completed, Work and any and all documentation or other products and results of the services. Failure to timely deliver such Work or any and all documentation or other
products and results of the services will be considered a material breach of the contract. Respondent will not make or retain any copies of the Work or any and all documentation or other products

C ontract M anagement G uide - V ersion 1.2

and results of the services without the prior written consent of Agency.
Or
For purposes of the contract, the term “Work Product” is defined as all work papers, materials, approaches, designs, specifications, systems, software, programs, source code, documentation,
methodologies, concepts, intellectual property or other property and/or results of the services that are developed, produced, generated or provided to Agency in connection with, or as a result of,
the services provided under the contract. Agency and Respondent intend this agreement to be a contract for the services and each considers and expressly intends and agrees that the Work Product
to be rendered by Respondent shall be a work-made-for-hire. Respondent and Respondent’s employees will have no rights in or ownership of the Work Product or any other property of Agency.
Respondent acknowledges and agrees that the Work Product (and all rights therein, including without limitation all intellectual property rights) belongs to and shall be the sole and exclusive property
of Agency. If for any reason the Work Product would not be considered a work-made-for-hire under applicable law, Respondent does hereby irrevocably sell, assign, and transfer to Agency,
 Recommended Sample Text
Clause (It is expected that the actual wording of a Recommended Clause may vary by agency and legal counsel will be consulted prior to use.)
Property Rights its successors and assigns, the entire right, title and interest in and to the Work Product and any and all intellectual property rights embedded therein or associated therewith, and in and to all works
(continued) based upon, derived from, or incorporating the Work Product, and in and to all income, royalties, damages, claims and payments now or hereafter due or payable with respect thereto, and in and to
all causes of action, either in law or in equity for past, present, or future infringement based on the copyrights, and in and to all rights corresponding to the foregoing. Respondent agrees to execute
all papers and to perform such other property rights, as Agency may deem necessary to secure for Agency or its designee the rights herein assigned. In the event that Respondent has any rights in
and to the Work Product that cannot be assigned to Agency, Respondent hereby grants to Agency an exclusive, worldwide, royalty-free, irrevocable, and perpetual license to directly and indirectly
reproduce, distribute, modify, create derivative works of, publicly perform and publicly display, such rights to make, have made, use, sell and offer for sale any products developed by practicing
such rights, and to otherwise use such rights, with the right to sublicense such rights through multiple levels of sublicenses. No later than the first calendar day after the termination or expiration of
the contract or upon Agency’s request, Respondent shall deliver to Agency all completed, or partially completed, Work Product and any and all versions thereof. Failure to timely deliver such Work
Product will be considered a material breach of the contract. Respondent will not make or retain any copies of the Work Product or any and all documentation or other products and results of the
services without the prior written consent of Agency.
Records Retention Respondent shall maintain and retain all records relating to the performance of the contract including supporting fiscal documents adequate to ensure that claims for contract funds are in
accordance with applicable State of Texas requirements. These records will be maintained and retained by Respondent for a period of seven (7) years after the contract expiration date or until all
audit, claim, and litigation matters are resolved, whichever is later.

T exas P rocurement
Refund Respondent will promptly refund or credit within thirty (30) calendar days any funds erroneously paid by Agency which are not expressly authorized under the contract.

and
Restricted Employment for Pursuant to Section 572.069 of the Texas Government Code, Respondent certifies that it has not employed and will not employ a former state officer or employee who participated in a procurement
Certain State Personnel or contract negotiations for Agency involving Respondent within two (2) years after the date that the contract is signed or the procurement is terminated or withdrawn. This certification only applies
to former state officers or employees whose state service or employment ceased on or after September 1, 2015.
Secure Erasure of Hard All equipment provided to Agency by Respondent that is equipped with hard disk drives (i.e., computers, telephones, printers, fax machines, scanners, multifunction devices, etc.) shall have the
Disk Capability capability to securely erase data written to the hard drive prior to final disposition of such equipment, either at the end of the equipment’s useful life or the end of the related services agreement for
such equipment, in accordance with 1 TAC § Chapter 202.
Severability If any provision of the contract is construed to be illegal or invalid, such construction will not affect the legality or validity of any of its other provisions. The illegal or invalid provision will be deemed
severable and stricken from the contract as if it had never been incorporated herein, but all other provisions will continue in full force and effect.
Or
If any provision of the contract is construed to be illegal, invalid or unenforceable, such construction will not affect the legality, validity or enforceability of any of its other provisions. It is the intent
and agreement of the parties to this contract that that this contract shall be deemed amended by modifying such provision to the extent necessary to render it valid, legal and enforceable while
preserving its intent or, if such modification is not possible, by substituting another provision that is valid, legal and enforceable and that achieves the same objective. All other provisions of this
contract will continue in full force and effect.
Sovereign Immunity The Parties expressly agree that no provision of the contract is in any way intended to constitute a waiver by the Agency or the State of Texas of any immunities from suit or from liability that the
Agency or the State of Texas may have by operation of law.
Or
Nothing in the contract shall be construed as a waiver of the Agency’s or the State’s sovereign immunity. This contract shall not constitute or be construed as a waiver of any of the privileges, rights,
defenses, remedies, or immunities available to the Agency or the State of Texas. The failure to enforce, or any delay in the enforcement, of any privileges, rights, defenses, remedies, or immunities
available to Agency or the State of Texas under the contract or under applicable law shall not constitute a waiver of such privileges, rights, defenses, remedies, or immunities or be considered as a basis
for estoppel. Agency does not waive any privileges, rights, defenses, or immunities available to Agency by entering into the contract or by its conduct prior to or subsequent to entering into the contract.
Subcontractors Respondent may not subcontract any or all of the work and/or obligations due under the contract without prior written approval of the Agency. Subcontracts, if any, entered into by the Respondent
shall be in writing and be subject to the requirements of the contract. Should Respondent subcontract any of the services required in the contract, Respondent expressly understands and
acknowledges that in entering into such subcontract(s), Agency is in no manner liable to any subcontractor(s) of Respondent. In no event shall this provision relieve Respondent of the responsibility
for ensuring that the services performed under all subcontracts are rendered in compliance with the contract.
Survival Expiration or termination of the contract for any reason does not release Respondent from any liability or obligation set forth in the contract that is expressly stated to survive any such expiration or
termination, that by its nature would be intended to be applicable following any such expiration or termination, or that is necessary to fulfill the essential purpose of the contract, including without
limitation the provisions regarding warranty, indemnification, confidentiality, and rights and remedies upon termination.

C ontract M anagement G uide - V ersion 1.2 | APPENDIX 23 - PAGE 5

Statewide Procurement Division
 Recommended Sample Text
Clause (It is expected that the actual wording of a Recommended Clause may vary by agency and legal counsel will be consulted prior to use.)
Taxes Purchases made for State of Texas use are exempt from the State Sales Tax and Federal Excise Tax. Agency will furnish Tax Exemption Certificates upon request. Respondent represents and warrants
that it shall pay all taxes or similar amounts resulting from the contract, including, but not limited to, any federal, State, or local income, sales or excise taxes of Respondent or its employees. Agency
shall not be liable for any taxes resulting from the contract.
Termination for Agency reserves the right to terminate the contract at any time, in whole or in part, without cost or penalty, by providing thirty (30) calendar days’ advance written notice, if Agency determines
Convenience that such termination is in the best interest of the state. In the event of such a termination, Respondent must, unless otherwise mutually agreed upon in writing, cease all work immediately upon
the effective date of termination. Agency shall be liable for payments limited only to the portion of work Agency authorized in writing and which Respondent has completed, delivered to Agency,
Statewide Procurement Division

and which has been accepted by Agency. All such work shall have been completed, in accordance with contract requirements, prior to the effective date of termination. Agency shall have no other
liability, including no liability for any costs associated with the termination.
Or
Agency may terminate the contract for convenience on thirty (30) calendar days’ written notice. There is no buy out or other amounts due if Agency terminates early. Upon termination under this
provision, Respondent shall refund to Agency any amounts attributable to the terminated months within thirty (30) days of the termination.

APPENDIX 23 - PAGE 6 | T exas P rocurement

Trademark License Agency hereby grants to Respondent, for the term of the contract, a limited non-exclusive, royalty-free, non-assignable, non-transferable license to reproduce Agency’s trademarks (as depicted in
Exhibit __) on published materials in the United States related to the performance of the contract, provided that such license is expressly conditional upon, and subject to, the following:

and
(1) Respondent is in compliance with all provisions of the contract;
(2) Respondent’s use of the trademarks is strictly in accordance with the quality standards and in conformance with the reproduction requirements set forth in Exhibit __ or as otherwise
communicated by Agency;
(3) Respondent takes no action to damage the goodwill associated with the trademarks, and refrains from any attempt to contest, attack, dispute, challenge, cancel and/or oppose Agency’s
right, title and interest in the trademarks or their validity;
(4) Respondent makes no attempt to sublicense any rights under this trademark license; and
(5) Respondent complies with any marking requests Agency may make in relation to the trademarks, including without limitation to use the phrase “Registered Trademark”, the symbol “™”,
the registered trademark symbol “®” and/or any equivalent thereof.
Trademark Ownership Respondent hereby acknowledges and agrees that the trademarks remain the exclusive property of Agency, that all right, title and interest in and to the trademarks is exclusively held by Agency,
and all goodwill associated with such trademarks inures solely to Agency.
Unfair Business Practices Respondent represents and warrants that it has not been the subject of allegations of Deceptive Trade Practices violations under Chapter 17 of the Texas Business and Commerce Code, or allegations
of any unfair business practice in any administrative hearing or court suit and that Respondent has not been found to be liable for such practices in such proceedings. Respondent certifies that
it has no officers who have served as officers of other entities who have been the subject of allegations of Deceptive Trade Practices violations or allegations of any unfair business practices in an
administrative hearing or court suit and that such officers have not been found to be liable for such practices in such proceedings.
Use of State Property Respondent is prohibited from using State Property for any purpose other than performing Services authorized under the contract. State Property includes, but is not limited to, Agency’s office
space, identification badges, Agency information technology equipment and networks (e.g., laptops, portable printers, cell phones, iPads, external hard drives, data storage devices, any Agency-
issued software, and the Agency Virtual Private Network (VPN client)), and any other resources of Agency. Respondent shall not remove State Property from the continental United States. In

C ontract M anagement G uide - V ersion 1.2

addition, Respondent may not use any computing device to access Agency’s network or e-mail while outside of the continental United States. Respondent shall not perform any maintenance
services on State Property unless the contract expressly authorizes such services. During the time that State Property is in the possession of Respondent, Respondent shall be responsible for (i) all
repair and replacement charges incurred by Agency that are associated with loss of State Property or damage beyond normal wear and tear and (ii) all charges attributable to Respondent’s use of
State Property that exceeds the contract scope. Respondent shall fully reimburse such charges to Agency within ten (10) calendar days of Respondent’s receipt of Agency’s notice of amount due.
Use of State Property for a purpose not authorized by contract shall constitute breach of contract and may result in termination of the contract and the pursuit of other remedies available to Agency
under contract, at law, or in equity.
Waiver of Consequential NOTWITHSTANDING ANY OTHER PROVISION TO THE CONTRARY HEREIN, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL
Damages DAMAGES OR LOSS OF PROFITS, ANTICIPATED OR OTHERWISE, OR LOSS OF REVENUES IN CONNECTION WITH OR ARISING OUT OF, OR IN CONNECTION WITH, THE SUBJECT MATTER OF THIS
CONTRACT.
 APPENDIX 24
Sample Quality Assessment Plan (QAP) Tools

Contract Monitoring Schedule

Contract Name/ID:
Date of Original Contract Monitoring Schedule:
Revision No. ____; Date:

Results of
Specific Performance Responsible Monitoring
Monitoring Monitoring Results of Monitoring
Deliverables by Deliverables by Deliverable Monitoring Method Including Individual for Activity
Row Activity Activity Used to (include follow
Agency Contractor Due Dates Activities to be Information Each Monitoring Documentation

T exas P rocurement
Frequency Communicated up requirements)
Performed Sources to be Used Activity Method
to

and
1 Status Report Weekly Review Report Compare report Contract Manager, Weekly E-mail findings Division Manager, Provide periodic reports to
provided by Mary Smith Jane Doe Exec. Management.
(Section 1.7)
Contractor
Provide notice to Contractor
against contract
of agency approval/rejection
requirements
of deliverable.
for content and
timeliness. If deliverable not accepted,
provide written notice to
Contractor documenting
noncompliance with
contract requirements
and monitor the corrective
actions taken by Contractor.
2 Provide Once per Site visit Compare facilities Contract Manager, Once for each E-mail findings Division Manager, If Agency obligations
meeting room Fiscal Year provided by Agency Mary Smith scheduled Jane Doe are not being fulfilled,
for contractor against contract training escalate matter internally
provided training requirements for session to proactively and promptly
sessions location and size. correct deficiencies.
(Section 1.15)

3 Traffic Signal Ongoing Site visit Visually inspect Contract Manager, Monthly Findings Report Division Manager, Approve/Dispute
turns green every throughout traffic signal for Mary Smith Jane Doe
Invoice depending on
55 seconds contract term compliance with
findings.
performance
(Section 2.1)
standard of 8 out If warranted, pursue
of 10 consecutive monetary remedy available
cycles under contract.

C ontract M anagement G uide - V ersion 1.2 | APPENDIX 24 - PAGE 1

Statewide Procurement Division
 Findings Report

Contract Name/ID:

Date of Original Findings Report:

Statewide Procurement Division

Deliverable Description and Monitoring [Date of Monitoring [Date of Monitoring

Performance
Location of Requirement in Monitor Methodology and Available Remedies Activity e.g., Activity e.g.,
Measures
Contract Frequency 05/18/2018] Findings 06/10/2018] Findings

APPENDIX 24 - PAGE 2 | T exas P rocurement

1 Traffic Signal turns Contract Manager, Site Visit / Monthly 8 out of 10 $5,000 credit on next 9 out of 10 tests 10 out of 10 tests

and
green every 55 seconds Mary Smith consecutive monthly invoice each meet performance meet performance
(Section 2.1) cycles time site visit doesn’t standard standard
meet performance
standard

2 Five (5) miles of Contract Manager, Progress Report/ 100% on Liquidated damages 100% completion N/A
pavement laid every 10 Mary Smith Quarterly schedule assessed at $1,000 per
days (Section 7.7) day late on completion of
laid pavement

C ontract M anagement G uide - V ersion 1.2

5
 Statewide Procurement Division

APPENDIX 25
Sample Post Award Conference Agenda

It should be clearly communicated at the beginning of the conference that the purpose of the meeting is to explain or clarify contract
requirements and not to make changes to the contract or re-negotiate the contract terms. The post award conference agenda should cover
the following:

• Introduction. Introduce all participants and identify agency and contractor key personnel.
• Scope. Discuss the scope of the contract (i.e., what the agency is buying). Although this may seem overly simplistic, a thorough discussion
by both parties of the agreed contract scope prior to the commencement of services reduces the likelihood of either party having
unrealistic expectations during the course of the contract.
• Terms. Summarize contract terms and conditions, particularly any transaction-specific contract provisions. This can avoid any
misunderstandings later on and allows the both parties to gain a better understanding of the terms prior to beginning work.
• Requirements. Discuss the technical and reporting requirements of the contract. The technical requirements may be discussed as
part of the Scope. It is vital that the contractor and the agency understand their respective responsibilities under the contract regarding
technical requirements. For instance, the contractor must understand the importance of any reports required under the contract and the
importance of submitting them in accordance with contract requirements.
• Administration. Applicable contract administration procedures, including contract monitoring and progress measurement, should be
discussed.
• Rights. The rights and obligations of both parties and the contractor performance evaluation procedures should be summarized,
including that vendor performance will be reported to the Vendor Performance Tracking System. The agency should explain that the
contractor will be evaluated on its performance both during and at the conclusion of the contract and that such information may be
considered in the selection of future contracts.
• Potential Problems. Potential contract problem areas and possible solutions should be addressed.
• Payment. Invoicing requirements and payment procedures should be discussed, especially if the payment will be made according to
milestones achieved by the contractor.
• Authority. The roles and responsibilities of the parties’ contract managers, contract administrators, project managers, key personnel
lead(s), and any other key staff should be identified. Agency personnel should explain the limits of their authority and obtain the same
information regarding contractor personnel.

After the conference, the Contract Manager should prepare a summary of the meeting for the contract file which details the topics covered.
The summary should include areas requiring resolution, a list of participants, and, in particular, those individuals assigned responsibilities
for further action and the due dates for those actions. Copies of the meeting summary should be distributed to all conference participants.

T exas P rocurement and C ontract M anagement G uide - V ersion 1.2 | APPENDIX 25 - PAGE 1
 Statewide Procurement Division

APPENDIX 26
Sample Master Contract File Checklist

MASTER CONTRACT FILE CHECKLIST

 A copy of the entire contract, including all amendments and POs

 A copy of the Acquisition Plan

A copy of the Procurement File Checklist and a list identifying the location of each document (if
 the contract documents are not all maintained in a central repository)

A copy of the Quality Assessment Plan e.g., a schedule of compliance review (Contract
 Monitoring Schedule) and documentation of monitoring activities (Finding Reports), and Vendor
Performance Tracking System entries and periodic reviews

A reference list or a list of prior contracts with this specific vendor (if they offer valuable historical
 data)

The records/minutes of all meetings, both internal and external (Including sign-in sheets and/or
 agendas)

A copy of all reports and written deliverables required by the contract such certificates of
 insurance, cyber security training documentation, sales reports, approval requests, and
inspection reports

A copy of all letters of approval pertaining to such matters as materials, the contractor’s quality
 control program, prospective key personnel, and work schedules

 A copy of all notices to proceed, to stop work, to correct deficiencies or change orders

A copy of all contractor invoices, information related to discount provisions for prompt payment,
 letters pertaining to contract deductions or fee adjustments

 A copy of all general correspondence (internal and external) related to the contract

 A copy of the Contract Close-Out Checklist

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 Statewide Procurement Division

APPENDIX 27
Sample Novation Assignment Agreement
Note: Contract documents should be reviewed by agency legal counsel prior to use.

This Assignment Agreement (“Assignment”) is entered into by and between the [name of agency] (“Agency”);
______________________ [name of current contractor], having offices located _________________________ (“Assignor”);
and __________________[name of new contractor], having offices located at _______________________________
(“Assignee”).

WHEREAS, on __________, 2018, Agency and Assignor entered into a __________ (“Contract”);

WHEREAS, Assignor wishes to assign all of its rights, duties and obligations under the Contract to Assignee; and

WHEREAS, Agency, subject to the limitations and conditions set forth herein, agrees to this Assignment.

NOW, THEREFORE, the parties hereto agree as follows:

1. Assignor hereby assigns all its rights, title, and interest, and delegates all its obligations responsibilities and
duties, in and to the Contract, to Assignee effective immediately.
2. Assignee hereby accepts the assignment of all of Assignor’s obligations, responsibilities and duties under the
Contract and all of Assignor’s rights, title, and interest in and to the Contract to Assignee.
3. Notwithstanding the foregoing, Assignor agrees to defend and indemnify Agency from any and all claims,
actions, judgments, liabilities, proceedings, and costs, including reasonable attorneys’ fees, resulting from
Assignor’s performance prior to the assignment of the Contract.
4. Assignee agrees to indemnify Agency from any and all claims, actions, judgments, liabilities, proceedings and
costs, including reasonable attorneys’ fees and other costs of defense and damages, resulting from Assignee’s
performance after the assignment of the Contract.
5. [Assignee agrees that ______________ shall continue to be the lead effective with this Assignment. Assignee
shall notify Agency in writing immediately of any proposed changes in the lead or other key personnel assigned
to the Contract. Agency shall retain the right of review and approval of any such proposed changes.] [Assignee
shall submit all proposed key personnel under the Contract for Agency review and approval.]
6. Agency, in executing its consent to this Assignment, does not release Assignor from any claims or remedies it
may have against Assignor under the Contract.
7. Agency shall not be charged for any costs incurred by either Assignor or Assignee in connection with the
transition.
8. Except as otherwise provided herein, all terms and conditions of the Contract, including payment provisions,
shall remain in effect and insofar as rights and obligations under the Contract from the date of execution of

T exas P rocurement and C ontract M anagement G uide - V ersion 1.2 | APPENDIX 27 - PAGE 1
Statewide Procurement Division

this Agreement are concerned, references to Assignor therein shall be deemed replaced with references to
Assignee.
9. Assignee has reviewed all representations and certifications in the Contract relating to eligibility for state
contract. By signature hereon, Assignee adopts those representations and certifications. Assignee will notify
Agency of any representations or certifications in the Contract that are not true or become untrue with respect
to Assignee.
10. This Assignment shall be governed by and construed in accordance with the laws of the State of Texas. The
venue of any suit brought for any breach of this Assignment is fixed in any court of competent jurisdiction in
Travis County, Texas.
11. This Assignment shall become effective as of the date of the signature of Agency after having first been signed
by Assignor and Assignee.

IN WITNESS WHEREOF, the parties have signed and executed this Assignment.

Assignor: Assignee:

[company name] [company name]

By:______________________________________ By:______________________________________

Name: ___________________________________ Name: ___________________________________

Title: ____________________________________ Title: ____________________________________

Date: _______________ Date: _______________

Agreed and Accepted by:

[name of Agency]

By:______________________________________

Name: ___________________________________

Title: ____________________________________

Date: _______________

APPENDIX 27 - PAGE 2 | T exas P rocurement and C ontract M anagement G uide - V ersion 1.2
 Statewide Procurement Division

APPENDIX 28
Sample Notices of Termination and Cure Notice
Note: Contract documents should be reviewed by agency legal counsel prior to use.

NOTICE OF TERMINATION FOR CONVENIENCE

Date

Contractor Name
Contractor Address
Re: Contract Title; Notice of Termination for Convenience

Dear ______:

Pursuant to Section ___ (Termination) of the contract, this contract is hereby terminated effective [date]. [Contractor
Name] is directed to immediately stop all work, terminate subcontracts, and place no further orders.

In accordance with this Notice of Termination, you shall:

1. Keep adequate records of your compliance with this notice, including the extent of completion on the date of
termination.
2. Immediately notify all subcontractors and suppliers, if any, of this Notice of Termination.
3. Notify the agency Contract Administrator [name], of any and all matters that may be adversely affected by this
termination; and
4. Take any other action required by [Agency Name] to expedite this termination.

By this correspondence, the [Agency Name] expressly does not waive any rights, remedies, privileges or immunities
available to it as an agency of the State of Texas or otherwise available to it under the referenced contract and under
applicable law.

Sincerely,

T exas P rocurement and C ontract M anagement G uide - V ersion 1.2 | APPENDIX 28 - PAGE 1
Statewide Procurement Division

Note: Contract documents should be reviewed by agency legal counsel prior to use.

NOTICE OF TERMINATION FOR CAUSE

Date

Contractor Name
Contractor Address
RE: Contract Title; Notice of Termination for Cause

Dear ___________:

Pursuant to Section _____ (Termination) of the contract, this contract is hereby terminated effective [date] for failure
by [Contractor Name] to [describe contractor’s non-performance].

[Contractor Name] is directed to immediately stop all work, terminate subcontracts, and place no further orders.

In accordance with this Notice of Termination, you shall:

1. Keep adequate records of your compliance with this notice, including the extent of completion on the date of
termination.
2. Immediately notify all subcontractors and suppliers, if any, of this Notice of Termination.
3. Notify the agency Contract Manager [name], of any and all matters that may be adversely affected by this
termination; and
4. Take any other action required by [Agency Name] to expedite this termination.

By this correspondence, the [Agency Name] expressly does not waive any rights, remedies, privileges or immunities
available to it as an agency of the State of Texas or otherwise available to it under the referenced contract and under
applicable law. Among other things, [Agency Name] reserves the right to refer this matter to the Office of the Attorney
General of the State of Texas for handling.

Sincerely,

APPENDIX 28 - PAGE 2 | T exas P rocurement and C ontract M anagement G uide - V ersion 1.2
 Statewide Procurement Division

Note: Contract documents should be reviewed by agency legal counsel prior to use.

NOTICE OF CURE

Date

Contractor Name
Contractor Address
RE: Contract Title; Notice of Cure

Dear __________:

Pursuant to Section ____ (Termination) of the contract, [Contractor Name] is notified that the [Agency Name] considers
[specify failures] a condition that is endangering performance of the contract. Therefore, unless this condition is cured
within ten (10) business days from the date of this letter, the [Agency Name] may terminate for cause under the terms
and conditions of the termination clause of this contract.

Or

Since [Contractor Name] has failed to perform the above referenced contract within the time required by its terms,
the agency is considering terminating the contract under the provisions for cause. Pending a final decision in this
matter, it will be necessary to determine whether your failure to perform arose from causes beyond your control and
without fault or negligence on your part. Accordingly, you are the given the opportunity to present, in writing, any facts
bearing on the questions to [agency point of contact] within ten (10) business days from the date of this notice. Your
failure to present any excuses within this time may be considered as an admission that none exist.

Any assistance given to you on this contract or any acceptance by [Agency Name] of delinquent goods or services
will be solely for the purpose of mitigating damages, and it is not the intention of [Agency Name] to condone any
delinquency or to waive any rights the [Agency Name] has under the contract.

Sincerely,

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 Statewide Procurement Division

APPENDIX 29
Purchase Category Code List
The following Purchase Category Codes (PCC) are for use with purchase Document Type 2. Document Type 2 refers to purchase vouchers
that are subject to SPD procurement rules. PCCs are codes used to document the purchase method, commodity type and dollar category
of purchases.

Document Type 9 purchases should have a blank or “0“ PCC field because they are not within SPD purchasing authority, exempt from
competitive bidding requirements, or required by statute to be procured through a specific purchasing method. Document Types 2 and 9
are audited after payment.

PCC List:
A - Purchases of items from SPD term contracts using Texas SmartBuy. See 34 Texas Administrative Code § 20.220 – Term Contracts.

B - Purchases made with a State of Texas Retail Fuel Card.

C - Purchases from SPD Managed term contracts using the agency’s internal requisition/purchase order forms. See 34 Texas Administrative
Code § 20.220 – Term Contracts.

D - Purchases of information technology commodities (products or services) not available through DIR contracts. See 34 Texas Administrative
Code § 20.391 – Request for Offer Purchase Method.

E - Purchases of goods and services when the total purchase is estimated to be $0.00 to $5,000.00. See 34 Texas Administrative Code §
20.82 – Delegated Purchases.

F - Purchases of goods (not services) in the total estimated amount of $5,000.01 or more but not more than $25,000.00 for the total contract
value. See 34 Texas Administrative Code § 20.82 – Delegated Purchases.

G - Purchases for non-delegated goods or services from a contract awarded by SPD on behalf of a particular agency. Items are not on SPD
term contract. See 34 Texas Administrative Code § 20.184 – Requisitions and Specifications.

H - Purchases in any category, except PCC B, paid for with a payment card.

I - Purchases of commodity items from DIR Contracts that are not coordinated bulk purchases. See Texas Government Code § 2157.068 –
Purchase of Automated Information Systems (products or services).

K - Purchases of publications directly from the publisher with no dollar limits. See 34 Texas Administrative Code § 20.82 – Delegated
Purchases.

L - Purchases of perishable goods, e.g., fresh fruit, eggs, ice, etc. with no dollar limits. See 34 Texas Administrative Code § 20.82 – Delegated
Purchases.

M - Purchases of distributor items, e.g., repair parts for a unit of major equipment that is needed immediately, or maintenance contracts for
laboratory/medical equipment with no dollar limits. See 34 Texas Administrative Code § 20.82 – Delegated Purchases.

N - Purchases of commodity items from DIR Contracts that are coordinated bulk purchases. See Texas Government Code § 2157 .068(e-3).

P - Purchases of fuel, oil, and grease - (class 405) with no dollar limits. See 34 Texas Administrative Code § 20.82 – Delegated Purchases.

Q - Purchases of services (not goods) in the amounts estimated to be $5,000.01 or more but not more than $25,000.00 for the total contract
value. See 34 Texas Administrative Code § 20.82 – Delegated Purchases.

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Statewide Procurement Division

S - Purchases of services or goods in an amount estimated to exceed $25,000.00 for the total contract value. See 34 Texas Administrative
Code § 20.82 – Delegated Purchases.

T - Emergency purchases of goods and services exceeding $25,000.00. See 34 Texas Administrative Code § 20.210 – Emergency Purchases.

X - Purchases of items from SPD TXMAS Contracts. As of 9-1-2007, PCC X does not include TXMAS Schedule 70 (Information Technology)
contracts. See 34 Texas Administrative Code §§ 20.231-.233 – Multiple Award Schedule.

J, O, R, U, V, W, Y, Z - Not used.

APPENDIX 29 - PAGE 2 | T exas P rocurement and C ontract M anagement G uide - V ersion 1.2
 Statewide Procurement Division

APPENDIX 30
Post-Payment & Procurement Review Agency Document Checklist
Overview:
• Supporting documentation must be provided for each Purchase Category Code (PCC), including the blank or “0“ PCC used for Document
Type 9 purchases.
• If “printout” is noted, hard copy or electronic copy documentation must be placed in the procurement file.
• This checklist is a non-exhaustive list of documentation to be included in the procurement file. Refer to the Texas Procurement and
Contract Management Guide for additional information e.g., requirements pertaining to CAT Reviews, QAT Reviews, State Use Program
Exception Reports, SAO Nepotism Disclosure Statement for Purchasing Personnel, TEC Disclosure of Interested Parties Form 1295, Pro-
curement and Contract Management Conflict of Interest Disclosure, LBB reporting, and VPTS reporting.

PCC A  
Texas SmartBuy Term Contract PO with authorized signature
 
Invoice must match PO
TEXAS SMARTBUY  
Waiver from TCI and WorkQuest included in the documentation indicating that the product or
TERM CONTRACT service may be otherwise procured (if applicable)
PURCHASE  
At the time of PO issuance, file must contain printout of Warrant Hold check for purchases using
local funds; printout dated no more than 7 days prior to contract award

NOTE: WorkQuest and TCI purchases through Texas SmartBuy require the use of Document Type 9,
with a blank PCC field

PCC B  
PO with authorized signature and/or Internal Log
• NIGP Class-Item Codes Listed
STATE OF TEXAS  
List on the PO the item purchased
RETAIL FUEL CARD  
All sales receipts or invoices must be included and signed by authorized user
PURCHASE
 
Prior to purchase, file must contain printout of Warrant Hold check for purchases of $500 or more or
purchases using local funds; printout dated no more than 7 days prior to contract award
NOTE: State of Texas Retail Fuel Cards can only be used for fuel, authorized maintenance, and roadside
assistance purchases

PCC C  
Internal Agency Purchase Order with authorized signature issued against SPD Managed Term
Contract
SPD • Delivery terms and/or contract term defined
MANAGED • NIGP Class-Item Codes listed
TERM CONTRACT
PURCHASE  
Invoice must match PO
 
Waiver from TCI and WorkQuest included in the documentation indicating that the product or
service may be otherwise procured (if applicable)
 
At the time of PO issuance, file must contain printout of Warrant Hold check for purchases using
local funds; printout dated no more than 7 days prior to contract award

NOTE: WorkQuest and TCI purchases through Texas SmartBuy require the use of Document Type 9,
with a blank PCC field

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Statewide Procurement Division

PCC D If using the 34 Texas Administrative Code § 20.391 (Rule for Request for Offers) procedures:

 
PO with authorized signature
PURCHASE • Delivery terms and/or contract term defined
OF
• NIGP Class-Item Codes listed
INFORMATION
TECHNOLOGY  
Invoice must match PO
COMMODITIES  
Purchase Order Change Notice (POCN) for extending/renewing a contract (created prior to the
NOT expiration of contract) (if applicable)
AVAILABLE  
All Essential Provisions (including Texas Required Contract Clauses)
THROUGH
DIR CONTRACTS
 
DIR exemption must be included in the documentation indicating that the product or service may
be otherwise procured; an exemption provided by Legislative Budget Board; or other exemption
such as an express statutory exemption may be accepted
 
If the purchase does not exceed the $5,000 spot purchase limit, documentation must be included
in the file
 
If greater than $5,000 but does not exceed $25,000, file must demonstrate compliance with
informal bidding requirements and bid tabulation/committee evaluation is required
• CMBL printout of at least three (3) vendors that were solicited, two (2) of which must be certified
HUBs (CMBL printout must be dated on or before solicitation)
• Written approval from agency head or designee authorizing supplementation with non-CMBL
vendors

 
If greater than $25,000, file must demonstrate compliance with formal bidding requirements and
bid tabulation/committee evaluation is required
• CMBL printout of each eligible vendor within the agency’s geographic region (CMBL printout
must be dated on or before solicitation)
• Written approval from agency head or designee authorizing supplementation with non-CMBL
vendors

 
For purchases of $100,000 or more, Historically Underutilized Business Subcontracting Plan must
be documented
 
Electronic State Business Daily (ESBD) posting (solicitation and notice of award) printout if
purchase is over $25,000
 
Waiver from WorkQuest included in the file indicating that the product or service may be otherwise
procured (if applicable)
 
Emergency justification letter signed by the agency’s purchasing director or an authorized
representative (if applicable)
 
Proprietary Purchase Justification signed by the Agency Head or designee (if applicable)
 
Response documents (signed) for each awarded vendor (if applicable)
 
At the time of award, file must contain printouts of vendor compliance checks:
• Debarment check
• SAM.gov check; printout dated no more than 7 days prior to contract award
• Iran, Sudan & Foreign Terrorist Organization check
• Boycott Israel check
• Warrant Hold check for purchases by written contract or purchases using local funds; printout
dated no more than 7 days prior to contract award

If using an approved alternate method of procurement per 34 Texas Administrative Code § 20.391,
report as PCC D but follow relevant procurement procedures. For example, the IFB procedure for IT
commodities $5,000.01 to $25,000 would be coded PCC D, but follow the PCC F pattern.

APPENDIX 30 - PAGE 2 | T exas P rocurement and C ontract M anagement G uide - V ersion 1.2
 Statewide Procurement Division

PCC E  
PO with authorized signature
• Delivery terms and/or contract term defined
PURCHASE • NIGP Class-Item Codes listed
$5,000.00
or Less  
Invoice must match PO
 
Purchase Order Change Notice (POCN) for extending/renewing a contract (created prior to the
expiration of contract) (if applicable)
 
All Essential Provisions (including Texas Required Contract Clauses)
 
Waiver from TCI and WorkQuest included in the file indicating that the product or service may be
otherwise procured (if applicable)
 
If the item is on Term Contract, file documentation shows the quantity is less than the minimum
order required for Term Contract
 
At the time of award, file must contain printouts of vendor compliance checks:
• Debarment check
• SAM.gov check; printout dated no more than 7 days prior to contract award
• Iran, Sudan & Foreign Terrorist Organization check
• Boycott Israel check
• Warrant Hold check for purchases by written contract or purchases using local funds; printout
dated no more than 7 days prior to contract award

PCC F  
PO with authorized signature
• Delivery terms and/or contract term defined
GOODS • NIGP Class-Item Codes listed
PURCHASE
$5,000.01  
Invoice must match PO
to  
Purchase Order Change Notice (POCN) for extending/renewing a contract (created prior to the
$25,000.00 expiration of contract) (if applicable)
 
All Essential Provisions (including Texas Required Contract Clauses)
 
File must demonstrate compliance with informal bidding requirements and bid tabulation/
committee evaluation is required
• CMBL printout of at least three (3) vendors that were solicited, two (2) of which must be certified
HUBs (CMBL printout must be dated on or before solicitation)
• Written approval from agency head or designee authorizing supplementation with non-CMBL
vendors

 
Waiver from TCI and WorkQuest included in the file indicating that the product or service may be
otherwise procured (if applicable)
 
Emergency justification letter signed by the agency’s purchasing director or an authorized
representative (if applicable)
 
Proprietary Purchase Justification signed by the Agency Head or designee (if applicable)
 
Response documents (signed) for each awarded vendor
 
At the time of award, file must contain printouts of vendor compliance checks:
• Debarment check
• SAM.gov check; printout dated no more than 7 days prior to contract award
• Iran, Sudan & Foreign Terrorist Organization check
• Boycott Israel check
• Warrant Hold check for purchases by written contract or purchases using local funds; printout
dated no more than 7 days prior to contract award

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Statewide Procurement Division

PCC G  
Agency-specific procurements issued by SPD e.g., goods exceeding $50,000 and services
exceeding $100,000
SPD-  
Notice of Award issued by SPD with contract documentation
ADMINISTERED  
Internal Agency Purchase Order with authorized signature
AGENCY-SPECIFIC • Delivery terms and/or contract term defined
PURCHASE
• Reference to SPD contract number on purchase order
(solicited by SPD)
 
Invoice must match SPD PO
 
At the time of PO issuance, file must contain printout of Warrant Hold check for purchases using
local funds; printout dated no more than 7 days prior to contract award

PCC H  
PO with authorized signature and/or Internal Log
• NIGP Class-Item Codes listed
PAYMENT CARD  
List on the PO the item purchased
PURCHASE  
Waiver from TCI and WorkQuest included in the file indicating that the product or service may be
otherwise procured (if applicable)
 
All sales receipts or invoices must be included and signed by authorized user
 
Prior to purchase, file must contain printouts of Warrant Hold check for purchases of $500 or more
or purchases using local funds; printout dated no more than 7 days prior to contract award
NOTE: Payment card cannot be used for Term Contracts or Managed Team Contracts.
Use PCC B for purchases made with a State of Texas Retail Fuel Card.

APPENDIX 30 - PAGE 4 | T exas P rocurement and C ontract M anagement G uide - V ersion 1.2
 Statewide Procurement Division

PCC I As of 9-1-2007 this Purchase Category Code includes TXMAS Schedule 70 contracts.
As of 9-1-2019 this Purchase Category Code excludes DIR coordinated bulk purchases.
PURCHASE  
PO with authorized signature
FROM • Delivery terms and/or contract term defined
DIR CONTRACT • NIGP Class-Item Codes listed
(Not Coordinated • State DIR Contract number on PO
Bulk Purchase)
 
Invoice must match PO
 
Purchase Order Change Notice (POCN) for extending/renewing a contract (created prior to the
expiration of contract) (if applicable)
 
Waiver from WorkQuest included in the file indicating that the product or service may be otherwise
procured (if applicable)
 
At the time of PO issuance, file must contain printout of Warrant Hold check for purchases by written
contract or purchases using local funds; printout dated no more than 7 days prior to contract award

Purchases of commodity items on DIR contracts.

• If the contract amount is $50,000 or less, the agency may choose any DIR contracted vendor.
• If the contract amount is over $50,000.00 but does not exceed $1M, the agency must request
bids from three DIR contract vendors offering the items.
• If the contract amount is more than $1M but not more than $5M, the agency must request bids
from six DIR contract vendors offering the items or all vendors on the schedule if the category
has less than six vendors.

An agency may not enter into a contract for IT commodity items of more than $5M. TEX. GOV’T CODE
§ 2157.068 (e-1) – (e-2).

Purchases of services requiring a statement of work on DIR contracts greater than $50,000.
An agency must consult with DIR before submitting the statement of work to a vendor. A statement of
work is not valid and money may not be paid to the vendor unless DIR first signs the statement of work.
TEX. GOV’T CODE § 2157.0685.

T exas P rocurement and C ontract M anagement G uide - V ersion 1.2 | APPENDIX 30 - PAGE 5
Statewide Procurement Division

PCC K  
PO with authorized signature
• Delivery terms and/or contract term defined
DIRECT • NIGP Class-Item Codes listed
PUBLICATION
• “Direct Publication - Not available from any other source” declaration placed on PO Invoice must
PURCHASE match PO
 
Invoice must match PO
 
Purchase Order Change Notice (POCN) for extending/renewing a contract (created prior to the
expiration of contract) (if applicable)
 
All Essential Provisions (including Texas Required Contract Clauses)
 
If greater than $25,000, file must demonstrate compliance with formal bidding requirements and
bid tabulation/committee evaluation is required
• CMBL printout of each eligible vendor within the agency’s geographic region (CMBL printout
must be dated on or before solicitation)
• Written approval from agency head or designee authorizing supplementation with non-CMBL
vendors
 
For purchases of $100,000 or more, Historically Underutilized Business Subcontracting Plan must
be documented
 
Electronic State Business Daily (ESBD) posting (solicitation and notice of award) printout if
purchase is over $25,000
 
Waiver from TCI and WorkQuest included in the file indicating that the product or service may be
otherwise procured (if applicable)
 
Emergency justification letter signed by the agency’s purchasing director or an authorized
representative (if applicable)
 
Response documents (signed) for each awarded vendor (if applicable)
 
At the time of award, file must contain printouts of vendor compliance checks:
• Debarment check
• SAM.gov check; printout dated no more than 7 days prior to contract award
• Iran, Sudan & Foreign Terrorist Organization check
• Boycott Israel check
• Warrant Hold check for purchases by written contract or purchases using local funds; printout
dated no more than 7 days prior to contract award.

APPENDIX 30 - PAGE 6 | T exas P rocurement and C ontract M anagement G uide - V ersion 1.2
 Statewide Procurement Division

PCC L  
PO with authorized signature
• Delivery terms and/or contract term defined
PERISHABLE • NIGP Class-Item Codes listed
GOODS PURCHASE
 
Invoice must match PO
 
Purchase Order Change Notice (POCN) for extending/renewing a contract (created prior to the
expiration of contract) (if applicable)
 
All Essential Provisions (including Texas Required Contract Clauses)
 
If greater than $5,000 but does not exceed $25,000, file must demonstrate compliance with
informal bidding requirements and bid tabulation/committee evaluation is required
• CMBL printout of at least three (3) vendors that were solicited, two (2) of which must be certified
HUBs (CMBL printout must be dated on or before solicitation)
• Written approval from agency head or designee authorizing supplementation with non-CMBL
vendors
 
If greater than $25,000, file must demonstrate compliance with formal bidding requirements and
bid tabulation/committee evaluation is required
• CMBL printout of each eligible vendor within the agency’s geographic region (CMBL printout
must be dated on or before solicitation)
• Written approval from agency head or designee authorizing supplementation with non-CMBL
vendors
 
For purchases of $100,000 or more, Historically Underutilized Business Subcontracting Plan must
be documented
 
Electronic State Business Daily (ESBD) posting (solicitation and notice of award) printout if
purchase is over $25,000
 
Emergency justification letter signed by the agency’s purchasing director or an authorized
representative (if applicable)
 
Proprietary Purchase Justification signed by the Agency Head or designee (if applicable)
 
Response documents (signed) for each awarded vendor (if applicable)
 
At the time of award, file must contain printouts of vendor compliance checks:
• Debarment check
• SAM.gov check; printout dated no more than 7 days prior to contract award
• Iran, Sudan & Foreign Terrorist Organization check
• Boycott Israel check
• Warrant Hold check for purchases by written contract or purchases using local funds; printout
dated no more than 7 days prior to contract award

T exas P rocurement and C ontract M anagement G uide - V ersion 1.2 | APPENDIX 30 - PAGE 7
Statewide Procurement Division

PCC M  
PO with authorized signature
• Delivery terms and/or contract term defined
DISTRIBUTOR • NIGP Class-Item Codes listed
PURCHASE
 
Invoice must match PO
 
Purchase Order Change Notice (POCN) for extending/renewing a contract (created prior to the
expiration of contract) (if applicable)
 
All Essential Provisions (including Texas Required Contract Clauses)
 
If greater than $5,000 but does not exceed $25,000, file must demonstrate compliance with
informal bidding requirements and bid tabulation/committee evaluation is required
• CMBL printout of at least three (3) vendors that were solicited, two (2) of which must be certified
HUBs (CMBL printout must be dated on or before solicitation)
• Written approval from agency head or designee authorizing supplementation with non-CMBL vendors
 
If greater than $25,000, file must demonstrate compliance with formal bidding requirements and
bid tabulation/committee evaluation is required
• CMBL printout of each eligible vendor within the agency’s geographic region (CMBL printout
must be dated on or before solicitation)
• Written approval from agency head or designee authorizing supplementation with non-CMBL vendors
 
For purchases of $100,000 or more, Historically Underutilized Business Subcontracting Plan must
be documented
 
Electronic State Business Daily (ESBD) posting (solicitation and notice of award) printout if
purchase is over $25,000
 
Emergency justification letter signed by the agency’s purchasing director or an authorized
representative (if applicable)
 
Proprietary Purchase Justification signed by the Agency Head or designee (if applicable)
 
Response documents (signed) for each awarded vendor (if applicable)
 
At the time of award, file must contain printouts of vendor compliance checks:
• Debarment check
• SAM.gov check; printout dated no more than 7 days prior to contract award
• Iran, Sudan & Foreign Terrorist Organization check
• Boycott Israel check
• Warrant Hold check for purchases by written contract or purchases using local funds; printout
dated no more than 7 days prior to contract award

PCC N  
PO with authorized signature
• Delivery terms and/or contract term defined
COORDINATED • NIGP Class-Item Codes listed
BULK PURCHASE
• State DIR Contract number on PO
FROM
DIR CONTRACT  
Invoice must match PO
 
Purchase Order Change Notice (POCN) for extending/renewing a contract (created prior to the
expiration of contract) (if applicable)
 
Waiver from WorkQuest included in the file indicating that the product or service may be otherwise
procured (if applicable)
 
At the time of PO issuance, file must contain printout of Warrant Hold check for purchases by
written contract or purchases using local funds; printout dated no more than 7 days prior to
contract award

APPENDIX 30 - PAGE 8 | T exas P rocurement and C ontract M anagement G uide - V ersion 1.2
 Statewide Procurement Division

PCC P  
PO with authorized signature
• Delivery terms and/or contract term defined
FUEL, OIL, • NIGP Class-Item Codes listed
OR GREASE
PURCHASE
 
Invoice must match PO
 
Purchase Order Change Notice (POCN) for extending/renewing a contract (created prior to the
expiration of contract) (if applicable)
 
All Essential Provisions (including Texas Required Contract Clauses)
 
If greater than $5,000 but does not exceed $25,000, file must demonstrate compliance with
informal bidding requirements and bid tabulation/committee evaluation is required
• CMBL printout of at least three (3) vendors that were solicited, two (2) of which must be certified
HUBs (CMBL printout must be dated on or before solicitation)
• Written approval from agency head or designee authorizing supplementation with non-CMBL
vendors
 
If greater than $25,000, file must demonstrate compliance with formal bidding requirements and
bid tabulation/committee evaluation is required
• CMBL printout of each eligible vendor within the agency’s geographic region (CMBL printout
must be dated on or before solicitation)
• Written approval from agency head or designee authorizing supplementation with non-CMBL
vendors
 
For purchases of $100,000 or more, Historically Underutilized Business Subcontracting Plan must
be documented
 
Electronic State Business Daily (ESBD) posting (solicitation and notice of award) printout if
purchase is over $25,000
 
Emergency justification letter signed by the agency’s purchasing director or an authorized
representative (if applicable)
 
Proprietary Purchase Justification signed by the Agency Head or designee (if applicable)
 
Response documents (signed) for each awarded vendor (if applicable)
 
At the time of award, file must contain printouts of vendor compliance checks:
• Debarment check
• SAM.gov check; printout dated no more than 7 days prior to contract award
• Iran, Sudan & Foreign Terrorist Organization check
• Boycott Israel check
• Warrant Hold check for purchases by written contract or purchases using local funds; printout
dated no more than 7 days prior to contract award

T exas P rocurement and C ontract M anagement G uide - V ersion 1.2 | APPENDIX 30 - PAGE 9
Statewide Procurement Division

PCC Q  
PO with authorized signature
• Delivery terms and/or contract term defined
SERVICE • NIGP Class-Item Codes listed
PURCHASE
$5,000.01
 
Invoice must match PO
to  
Purchase Order Change Notice (POCN) for extending/renewing a contract (created prior to the
expiration of contract) (if applicable)
$25,000.00
 
All Essential Provisions (including Texas Required Contract Clauses)
 
File must demonstrate compliance with informal bidding requirements and bid tabulation/
committee evaluation is required
• CMBL printout of at least three (3) vendors that were solicited, two (2) of which must be certified
HUBs (CMBL printout must be dated on or before solicitation)
• Written approval from agency head or designee authorizing supplementation with non-CMBL
vendors
 
Waiver from TCI and WorkQuest included in the file indicating that the product or service may be
otherwise procured (if applicable)
 
Emergency justification letter signed by the agency’s purchasing director or an authorized
representative (if applicable)
 
Proprietary Purchase Justification signed by the Agency Head or designee (if applicable)
 
Response documents (signed) for each awarded vendor (if applicable)
 
At the time of award, file must contain printouts of vendor compliance checks:
• Debarment check
• SAM.gov check; printout dated no more than 7 days prior to contract award
• Iran, Sudan & Foreign Terrorist Organization check
• Boycott Israel check
• Warrant Hold check for purchases by written contract or purchases using local funds; printout
dated no more than 7 days prior to contract award

APPENDIX 30 - PAGE 10 | T exas P rocurement and C ontract M anagement G uide - V ersion 1.2
 Statewide Procurement Division

PCC S  
PO with authorized signature
• Delivery terms and/or contract term defined
GOOD OR SERVICE • NIGP Class-Item Codes listed
PURCHASE
EXCEEDING
 
Invoice must match PO
$25,000.00  
Purchase Order Change Notice (POCN) for extending/renewing a contract (created prior to the
expiration of contract) (if applicable)
 
All Essential Provisions (including Texas Required Contract Clauses)
 
SPD Delegation required for purchases of goods over $50,000
 
SPD Delegation required for purchases of services over $100,000
 
File must demonstrate compliance with formal bidding requirements and bid tabulation/committee
evaluation is required
• CMBL printout of each eligible vendor within the agency’s geographic region (CMBL printout
must be dated on or before solicitation)
• Written approval from agency head or designee authorizing supplementation with non-CMBL
vendors
 
For purchases of $100,000 or more, Historically Underutilized Business Subcontracting Plan must
be documented
 
Electronic State Business Daily (ESBD) posting (solicitation and notice of award) printout if
purchase is over $25,000
 
Waiver from TCI and WorkQuest included in the file indicating that the product or service may be
otherwise procured (if applicable)
 
Emergency justification letter signed by the agency’s purchasing director or an authorized
representative (if applicable)
 
Proprietary Purchase Justification signed by the Agency Head or designee (if applicable)
 
Response documents (signed) for each awarded vendor (if applicable)
 
At the time of award, file must contain printouts of vendor compliance checks:
• Debarment check
• SAM.gov check; printout dated no more than 7 days prior to contract award
• Iran, Sudan & Foreign Terrorist Organization check
• Boycott Israel check
• Warrant Hold check for purchases by written contract or purchases using local funds; printout
dated no more than 7 days prior to contract award

T exas P rocurement and C ontract M anagement G uide - V ersion 1.2 | APPENDIX 30 - PAGE 11
Statewide Procurement Division

PCC T  
PO with authorized signature
• Delivery terms and/or contract term defined
EMERGENCY • NIGP Class-Item Codes listed
PURCHASE OF
GOODS AND
 
Invoice must match PO
SERVICES  
Purchase Order Change Notice (POCN) for extending/renewing a contract (created prior to the
expiration of contract) (if applicable)
EXCEEDING
$25,000.00  
All Essential Provisions (including Texas Required Contract Clauses)
 
File must demonstrate compliance with formal bidding requirements and bid tabulation/committee
evaluation is required
• CMBL printout of each eligible vendor within the agency’s geographic region (CMBL printout
must be dated on or before solicitation)
• Written approval from agency head or designee authorizing supplementation with non-CMBL
vendors
 
For purchases of $100,000 or more, Historically Underutilized Business Subcontracting Plan must
be documented
 
Electronic State Business Daily (ESBD) posting (solicitation and notice of award) printout if
purchase is over $25,000
 
Waiver from TCI and WorkQuest included in the file indicating that the product or service may be
otherwise procured (if applicable)
 
Emergency justification letter signed by the agency’s purchasing director or an authorized
representative
 
Proprietary Purchase Justification signed by the Agency Head or designee (if applicable)
 
Response documents (signed) for each awarded vendor (if applicable)
 
At the time of award, file must contain printouts of vendor compliance checks:
• Debarment check
• SAM.gov check; printout dated no more than 7 days prior to contract award
• Iran, Sudan & Foreign Terrorist Organization check
• Boycott Israel check
• Warrant Hold check for purchases by written contract or purchases using local funds; printout
dated no more than 7 days prior to contract award

PCC X As of 9-1-2007 PCC X does not include TXMAS Schedule 70 (Information Technology) contracts

SPD  
Texas SmartBuy TXMAS PO with authorized signature
TEXAS MULTIPLE  
Invoice must match PO
AWARD SCHEDULE  
Purchase Order Change Notice (POCN) for extending/renewing a contract (created prior to the
(TXMAS) expiration of contract) (if applicable)
PURCHASE  
Waiver from TCI and WorkQuest included in the file indicating that the product or service may be
otherwise procured (if applicable)
 
Proprietary Purchase Justification signed by Agency Head or designee (if applicable)
 
Best value statement must be documented on the PO (if applicable)
 
Electronic State Business Daily (ESBD) award posting printout if purchase is over $25,000
 
At the time of PO issuance, file must contain printout of Warrant Hold check for purchases using
local funds; printout dated no more than 7 days prior to contract award

APPENDIX 30 - PAGE 12 | T exas P rocurement and C ontract M anagement G uide - V ersion 1.2
 Statewide Procurement Division

EXEMPT  
PO with authorized signature
PURCHASES
• Delivery terms and/or contract term defined
• NIGP Class-Item Codes listed
Document
Type 9
 
Legal citation applicable to the purchase must be listed on the purchase documentation
• Example: Texas Government Code Section 2254.001
 
Invoice must match PO
 
Other file documentation applicable to the procurement method. Refer to the Post Payment Audit
section of the Guide. If SAM.gov and Warrant Hold compliance checks are required, the printouts
must be dated no more than 7 days prior to contract award.
NOTE: Utility payments made using a payment instrument OTHER THAN a purchase order need not
contain a PO number.

T exas P rocurement and C ontract M anagement G uide - V ersion 1.2 | APPENDIX 30 - PAGE 13
 Statewide Procurement Division

APPENDIX 31
Exemptions List (Document Type 9)

Document Type 9 purchases refer to purchases of certain goods and services that are not within SPD purchasing authority,
exempt from competitive bidding requirements, or required by statute to be procured through a specific purchasing
method. Agency legal counsel should be consulted to determine whether there are agency-specific exemptions which
qualify as “Document 9” purchases in addition to the purchases listed below. Document Type 9 purchases should have a
blank or “0” PCC field depending on whether the entry is to USAS or CAPPS.

If not exempt by the General Appropriations Act, Texas Government Code § 2151 et seq., or other statute, the purchase
must be competitively bid or the purchase should satisfy the requirements of a proprietary sole source purchase and a
proprietary purchase justification should be placed in the procurement file.

NOTE: Document Type 9 purchases are subject to Post-Payment Audit to verify whether the purchases are indeed exempt
and that the agency used the correct Document Type and Comptroller Object Codes.

Texas
Item or Nature of Service Government
Code Section

Auxiliary enterprises. 2155.141

Goods or services made or provided by blind or visually impaired persons and offered for sale
2155.138
to state agencies.
Care/treatment/education services for wards and clients of the state by Texas Juvenile Justice
2155.143
Department.
Construction projects by or under the supervision of any public authorities created by the laws
2166.004
of this state; or state-aided local government projects of any character whatsoever.

Construction projects undertaken by Texas Department of Criminal Justice. 2166.003(b)

Consulting services or services of a Consultant as defined in Texas Government Code §

2254.021 et seq. 2155.001
Must use 7239, 7240, or 7242 comptroller object codes to process expenditures.
Group purchasing program: purchases by state-owned hospital or clinics through a group
2155.139(b)
purchasing program comprised of two or more hospital or clinic facilities.

Health care purchases. 2155.144

Health & Human Service agency purchases and all agencies under its statutory umbrella. 2155.144

Items required by statute to be purchased from a particular source. 2155.132(f)(2)

T exas P rocurement and C ontract M anagement G uide - V ersion 1.2 | APPENDIX 31 - PAGE 1
Statewide Procurement Division

Texas
Item or Nature of Service Government
Code Section

Lease payments for district office space for certain agencies and programs. 2167.002

Legislative agency purchases for the following agencies: 101-Senate, 102 House of
Representatives, 103-Texas Legislative Council, 104-Legislative Budget Board, 105-Legislative
2155.203
Reference Library, 116-Sunset Advisory Commission, 308-State Auditor, 362-Texas Lottery
Commission.
Library materials & services within a university or institutions of higher learning, state-owned
2155.139(a)
hospitals or clinics (including Amigos Library services) for certain limited purchases.
Organized activities relating to instructional departments of institutions of higher learning &
2155.141
similar activities of other state agencies.

Texas Department of Criminal Justice made goods. 2155.065

Professional services & fees: services listed in Texas Government Code § 2254.001 et seq.
2155.001
must use 7253 or 7356 comptroller object codes to process expenditures.
Purchases made from gifts or grants, including industrial grants or contracts in support of
2155.140
research or federal grants or contracts in support of research in aid payments (HEAF).
Purchases of products and services of workshops, organizations, or corporations whose
primary purpose is training and employing individuals having mental retardation or a physical
2155.441
disability (WorkQuest set-aside contracts) if the agency performs the purchase at the
WorkQuest store personally.
Repairs & renovations to buildings excluded by SPD: letter of exclusion from TFC’s Facility
2166.003(a)(7)
Construction and Space Management Division should be attached.
2166.003
Repairs & renovations to buildings & projects by agencies listed.
2166.004
Residential space for Mental Health and Mental Retardation & Texas Juvenile Justice 2167.001(b)(2)
Department. 2167.001(b)(3)

Services of an employee of a state agency. 2155.001

Utilities (services of public utilities): natural gas, electric, water, sewage & garbage services,
other services & charges for utility services, and local telephone service. Does not include cell 2155.001
phone or cable services.
Vehicle maintenance & repair: any contract for repair of vehicles made by the Office of Vehicle
2171.102(c)
Fleet Management of SPD.
Veterans Land Board purchases in connection with improvements, repairs, or maintenance of
2155.149
land or other activities undertaken by Veterans Land Board with respect to land.

APPENDIX 31 - PAGE 2 | T exas P rocurement and C ontract M anagement G uide - V ersion 1.2
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Texas Comptroller of Public Accounts

Publication #96-1809
September 2019