Texas

Key Agency(ies): The Texas Comptroller of Public Accounts (CPA), through its Statewide Procurement Division (SPD), is the central procurement authority for Texas state agencies. SPD establishes statewide contracts for goods and services and oversees purchasing rules and training.

Key Statute: Texas’s procurement laws are primarily found in the Texas Government Code (Tex. Gov’t Code Ann.), Title 10, Subtitle D (State Purchasing and General Services). Key Chapters include Chapter 2155 “General Purchasing Procedures” and Chapter 2156-58 “Purchase Methods and Categories”.

Key Regulations: Texas’s primary procurement regulations are located in the Texas Administrative Code (Tex. Admin. Code) Title 34, Part 1, Chapter 20. Chapter 20 contains the Comptroller’s statewide procurement rules.

Procurement Types/Highlights: Texas utilizes a delegation model for purchasing authority. Under 34 Tex. Admin. Code § 20.82, the SPD delegates to agencies the authority to make purchases up to certain dollar limits. Generally, one-time purchases of goods up to $50,000 and services up to $100,000 may be handled by the agency under its delegated authority. Small purchases under $10,000 only require the agency to obtain informal quotes. Any procurements exceeding the procurement threshold must be approved or conducted by SPD.

Rules for competitive sealed bidding (IFB) and competitive sealed proposals (RFP) are governed by Chapter 2156 of the Government Code. IFB’s are the traditional bid process for goods and non-complex services. Award is made to the bidder offering the best value to the state. Texas law allows consideration of a bidder’s safety record in determining best value, but price is the primary factor for IFB’s. RFPs are used when factors other than price are significant and where negotiation might be necessary. Vendors submit proposals and are evaluated on factors including technical approach, experience, quality, and cost. Award is made to the proposal that provides the best value to the state.

Bid Protests: Under Tex. Gov’t Code Ann. § 2155.076, each state agency must adopt vendor protest procedures by rule, consistent with the CPA’s model rules. Protests must be submitted in writing to a designated official within the agency. Agency rules often require protests concerning a solicitation to be filed prior to contract award. Protests concerning an award decision must be filed within a short period after the protester knew or should have known the adverse action. For procurements conducted by SPD, protests must be filed no later than 10 days after the vendor received notice of the award decision. 34 Tex. Admin. Code § 20.536 provides that agencies may stay the award decision or performance of the contract unless the agency determines that proceeding with the award or performance is necessary to protect the interests of the state.

Once a protest is filed, the agency’s purchasing staff will review the allegations and must make a determination on the protest.  Under 34 Tex. Admin. Code § 20.538, protesters may generally appeal an adverse decision to the Comptroller’. Texas does not provide an external administrative court or independent board for bid protests.

Claims: Texas’ contract claims procedures are governed by Chapter 2260 of the Texas Government Code. Contractors must submit a written notice of the claim to the contracting agency within 180 days after discovering the basis of the claim. The agency must negotiate to attempt to resolve the dispute. If the dispute cannot be resolved through informal methods, the contractor may request the claim proceed to mediation or a contested case before the State Office of Administrative Hearings (SOAH). If the claim moves to a contested case, an SOAH administrative law judge will review evidence and make a recommendation on the claim.

In addition, Texas has not waived sovereign immunity to allow contractors to sue the state in court to enforce a claim or collect monetary damages. As such, even if a contractor prevails in an SOAH hearing, the contractor cannot enforce a monetary judgment in court.

Suspension & Debarment: Suspension and debarment procedures in Texas are governed by Tex. Gov’t Code Ann. § 2155.077 and are administered by the Texas Procurement and Support Services Division within the Comptroller’s office. The Comptroller has the authority to debar vendors for causes including conviction of a criminal offense related to a government contract, breach of contract, failure to perform a contract, or unethical conduct. By rule, debarments in Texas cannot exceed five years.

Under 34 Tex. Admin. Code §§ 20.581–20.587, the SPD Director may conduct investigations into a contractor’s conduct, and may cancel a vendor’s active or pending contracts with the state if the Director determines continuing them could harm the state. Before a final debarment decision is made, the vendor must be given notice of the allegations and an opportunity to respond.

Interesting/Distinctions: The Texas Professional Services Procurement Act (PSPA) forbids state entities from selecting a provider of professional services or awarding a contract for such services through the standard competitive bidding process; instead, they must make the selection and award based on the demonstrated competence and qualifications to perform the services for a fair and reasonable price. Tex. Gov’t Code Ann. § 2254.003. The chapter defines professional services as those services within the scope of the practice of accounting, architecture, landscape architecture, land surveying, medicine, optometry, professional engineering, real estate appraising, professional nursing, or forensic science. Id. at § 2254.003(2). Any contract in violation of the PSPA is considered void as contrary to the public policy. See City of Denton v. Mun. Admin. Servs., Inc., 59 S.W.3d 764, 768 (Tex. App. 2001).