(AUSTIN) — The Texas Senate today (Tuesday) approved unanimously comprehensive legislation by Senator Judith Zaffirini, D-Laredo, that would strengthen oversight and management of state contracts.

"Poor management of some contracts results in inadequate delivery of goods and services and costs taxpayers millions of dollars," Senator Zaffirini said. "Senate Bill 543 would improve state contracting at every stage of the process, including planning, procurement, contract formation and oversight."

Senator Zaffirini, who previously served as Chair of the Senate Government Organization Committee and a member of the Joint General Investigating Committee on State Contracting, has filed legislation to enhance state contracting every legislative session since 2005.

SB 543 also would ensure more state employees who handle contracts receive contract management training and would turn many recommendations from the state's Contract Management Guide into requirements.

The bill is part of a package of meaningful contracting reforms Senator Zaffirini has filed this session. Her SB 1638, for example, would improve the training of state agency employees in contract management, including by requiring not only that the Comptroller's office create a training class schedule, but also that the Department of Information Resources train applicable state employees to use the Cooperative Contracts program. What's more, her SB 1053 would create a contract management division at the Legislative Budget Board, and her SB 1161 would increase the use of competitive bidding in the Cooperative Contracts process.

Senator Zaffirini's legislation is complementary to SB 20 by Senator Jane Nelson, R-Flower Mound, which was passed by the Senate last month.

"My legislation would require agencies to make a reliable determination of best value before proceeding with a contract," Senator Zaffirini added. "Because so much taxpayer money is at stake, it is critical that state agencies take a 'measure twice, cut once' approach to contracting, instead of doing the opposite."

A report released last month by the State Auditor's office revealed serious violations and deficiencies in a Health and Human Services Commission contract to privatize the Terrell State Hospital, including a finding that the agency did not determine "best value" before awarding the contract. The agency also has drawn fire for the way it handled a multimillion dollar contract for anti-Medicaid fraud software. The auditor has identified similar problems with contracting at agencies throughout state government.

The State Auditor previously had identified areas for improvement in all areas of contract management.

Provisions of SB 543 include:

• Planning
• Requires agencies to clearly identify the needed goods or services
• Requires agencies to establish guidelines and procedures for staff involved in contract management
• Requires a work statement that includes contract goals and expected outcomes
• Requires consideration of a range of alternatives for service delivery
• Requires an assessment of risk to the state
• Procurement
• Prohibits an agency from accepting the sole response to a major contract solicitation
• Requires state agencies to consider "best value" during contract procurement
• Contract Formation
• Requires uniform contract provisions that establish cost-effective processes and help hold contractors accountable for producing desired results
• Requires provisions ensuring that contract renewals, revisions, and amendments undergo proper oversight
• Monitoring & Oversight
• Requires each state agency to monitor contracts, review contract performance and report to the Comptroller
• Allows the exclusion of contractors who have performed poorly in the past
• Requires a monetary threshold above which contract changes must have written authorization by the state agency executive director

SENATOR JUDITH ZAFFIRINI is an advocate for legislation strengthening management and oversight of Texas' state agency contracts. Her Senate Bill 543 would improve state contracting at every stage of the process, including planning, procurement, contract formation and oversight.

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