Introduction

This chapter compiles the applicable federal, state and agency requirements governing the procurement of goods and services using public funds administered by the Agency. In the event of conflict between these standards and an applicable federal statute or regulation, the federal statute or regulation will apply.

Prior approval requirements for property purchases are provided in Chapter 13 of this manual.

Return to Top

Administrative Responsibility

Contractors are responsible, in accordance with good administrative practices and sound business judgment, for the settlement and satisfaction of all administrative and contractual issues arising out of the Contractor’s procurements, including micro-purchases.

Procurement issues including, but not limited to, source evaluation, protests of award (see Section 14.20 of this manual), disputes, and claims shall be settled and satisfied by the Contractor, without recourse to federal or state government. Federal or state agencies will not substitute their judgment for that of the Contractor unless the matter is primarily of a federal or state concern. Violations of law should be referred to the federal, state or local authority having jurisdiction.

Authority:

Return to Top

Written Procedures

Contractors shall establish, and require subcontractors to establish, written procurement procedures that when followed, result in procurements that comply with the standards in this Chapter, its cited authorities, and grant award contracts.

Control activities, by definition in the OMB Circular A-133 Compliance Supplement–Part 6, “are the policies and procedures that help ensure that management’s directives are carried out.” In order to have sufficient controls over the procurement process, procedures must be clearly written and communicated, as follows. Also, see Section 14.18 of this manual relating to written selection procedures.

States. A state — meaning “any of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any agency or instrumentality of a state, exclusive of local governments,” as defined in Uniform Administrative Requirements for Grants and Agreements to State and Local Governments (Common Rule), and Uniform Grant Management Standards (UGMS), Part III will follow the same policies and procedures that it uses for procurements from its non-federal funds. States will ensure that every purchase order or other contract includes any clauses required by federal statutes and executive orders, and their implementing regulations.

Local Governments. A local government — meaning “a county, municipality, city, town, township, local public authority (including any public and Indian housing agency under the United States Housing Act of 1937), school district, special district, intrastate district, council of governments (whether or not incorporated as a nonprofit corporation under state law), any other regional or interstate government entity, or any agency or instrumentality of a local government,” as defined in the Common Rule and UGMS, Part III — will use its own procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in this Chapter, its cited authorities, and grant award contracts from the Agency.

The procedures shall include:

  • Providing for a review of proposed procurements to avoid purchase of unnecessary or duplicative items
  • Giving consideration to consolidating or breaking out procurements to obtain a more economical purchase, and promoting participation by historically underutilized businesses, as described in Section 14.5 of this manual; however, aggregate purchases shall not be divided to circumvent procurement requirements
  • Where appropriate, analyzing lease versus purchase alternatives, and performing any other appropriate analysis to determine the most economical approach

Other Organizations. Contractors that are institutions of higher education, hospitals, other non-profit organizations, and commercial organizations shall establish written procurement procedures, which shall, at a minimum, provide for the following:

  • Avoid purchasing unnecessary items.
  • Where appropriate, require that an analysis is made of lease and purchase alternatives to determine which would be the most economical and practical procurement for the Federal Government.
  • Require that solicitations for goods and services provide for all of the following:

Authority:

Return to Top

Full & Open Competition

The procurement of all goods and services shall be conducted, to the maximum extent practical, in a manner providing full and open competition consistent with the standards of Office of Management and Budget Circulars, the Grant Management Common Rule, Uniform Grant Management Standards, and this Manual.

Practices that may eliminate or restrict full and open competition include, but are not limited to:

  • Placing unreasonable requirements on firms in order for them to qualify to do business
  • Requiring unnecessary experience and excessive bonding
  • Noncompetitive pricing practices between firms or between affiliated companies
  • Noncompetitive awards to consultants that are on retainer contracts (or allowing entities that develop or draft specifications, requirements, statements of work, invitations for bids and/or requests for proposals to compete for such procurements)
  • Organizational conflicts of interest
  • Specifying a brand name product instead of allowing an equal product to be offered
  • Any arbitrary action in the procurement process

Unless otherwise required or encouraged by federal statute, procurements must be conducted in a manner that prohibits the use of in-state or local geographical preferences in the evaluation of bids or proposals; however, this does not preempt state licensing laws. Geographic location may be a selection criterion when contracting for architectural and engineering services as long as an appropriate number of qualified firms are able to compete for the contract.

Entity Specific Consideration:

Nongovernmental Entities. OMB Circular A-110, which applies to nongovernmental entities, does not expressly prohibit the use of in-state or local geographical preferences in the evaluation of bids or proposals.

Authority:

Return to Top

Standards of Conduct & Conflicts of Interest

No employee, officer, or agent may participate in the selection, award, or administration of a contract supported by federal or state funds if a real or apparent conflict of interest would be involved.

Contractors shall maintain written standards of conduct, which govern the performance of individuals engaged in the award and administration of contracts and provide for disciplinary action in the event that such standards are violated. Contractors that are Boards are specifically required to include in such provisions, the definition of immediate family and substantial interest. No employee, officer, or agent of the Contractor may participate in the selection, award, or administration of a contract that is supported by federal or state funds if a conflict of interest or apparent conflict of interest would be involved.

In general, a conflict of interest exists when any of the following have a financial or other interest in a firm that is selected to receive an award:

  • An employee, officer or agent
  • Any member of the employee’s immediate family
  • The employee’s partner
  • Any organization that employs or is about to employ any of these groups

The standards of conduct shall prohibit the solicitation and/or acceptance of gratuities, favors or anything of monetary value by an officer, employee, or agent of the Contractor from a bidder or subcontractor. However, rules may be set where the financial interest is not substantial or the gift is an unsolicited item of nominal intrinsic value.

Entity Specific Considerations:

Local Workforce Development Boards. In addition to the general requirements above, the policies and procedures of Boards must comply with the rules at 40 TAC Chapter 802.

Conflict of Interest. In addition to written standards of conduct, Boards must adopt a conflict of interest policy that includes the minimum requirements of state and federal laws and regulations. (Board policy may be more restrictive.) Furthermore, a Board member must:

  • Not vote on the provision of services by the member or any organization which the member represents
  • Not vote on any matter that would provide a direct financial benefit to the member or the member’s immediate family, or on matters of the provision of services by the member or the entity the member represents
  • Not participate in a decision in which the member has a direct or indirect interest, particularly a financial interest, which is in substantial conflict with the discharge of the duties of the Board
  • Avoid even the appearance of a conflict of interest. Prior to taking office, Board members must provide the Board chair a written declaration of all substantial business interests or relationships they, or their immediate families have with all businesses or organizations which have received, currently receive, or are likely to receive contracts or funding from the Board. Such declarations shall be updated within 30 days to reflect any changes in such business interests or relationships. The Board shall appoint an individual to timely review the disclosure information and advise the Board chair and appropriate members of potential conflicts; and
  • Prior to discussion, vote, or decision on any matter before a Board, if a member, or a person in the immediate family of such member, has a substantial interest in or relationship to a business entity, organization, or property that would be pecuniary (financially) affected by any official Board action, that member shall disclose the nature and extent of the interest or relationship and shall abstain from voting on or in any way participating in the decision on the matter. All such abstentions shall be recorded in the minutes of the Board.

Prohibition Against Directly Delivering Services. A Board shall not directly deliver or determine eligibility for workforce services in its local workforce development area (workforce area) or contract with the following persons or entities to deliver or determine eligibility for workforce services:

  • A Board member
  • A business, organization, or institution that a Board member represents on the Board
  • A Board member’s business, organization, or institution in which a Board member has a substantial financial interest
  • A Board employee

This prohibition does not apply to public education agencies (i.e., community colleges and independent school districts) that have Board members who fulfill the requirements in Texas Government Code §2308.256(a)(3)(A). Also, a Board may grant a one-year exception to these prohibitions as set out in 40 TAC §802.43.

The Board, its members, or its employees shall not directly control the daily activities of its workforce service providers. The Agency shall review a Board’s compliance through examination of the Board’s exercise of direction and control over its workforce service providers. The Agency may use factors for testing the employment status as set out in 40 TAC §821.5.

Standards of Conduct. As required by 40 TAC §802.21(c), a Board shall ensure that workforce service providers comply with federal and state statutes and regulations regarding standards of conduct and conflict of interest provisions including, but not limited to:

  • Uniform administrative requirements
  • Professional licensing requirements, where applicable
  • Requirements set forth in applicable Office of Management and Budget Circulars and the Uniform Grant Management Standards

The workforce service provider shall also avoid any conflict of interest or any appearance of a conflict of interest. It shall refrain from using nonpublic information gained through a relationship with the Texas Workforce Commission, an Agency employee, a Board, or a Board employee, to seek or obtain financial gains that would be a conflict of interest or the appearance of a conflict of interest.

Disclosures. As required by 40 TAC §802.21(d), a Board shall require a workforce service provider to disclose the following in writing:

  • A substantial financial interest that the workforce service contractor, or any of its workforce service contract employees in decision-making positions, have in a business entity that is a party to any business transaction with a Board member or Board employee who is in a Board decision-making position
  • A gift greater than $50 in value given to a Board member or Board employee by a workforce service provider or its employees
  • The existence of any conflict of interest and any appearance of a conflict of interest, or the lack thereof

The written disclosure must contain:

  • Information describing the conflict of interest and/or the appearance of a conflict of interest
  • Actions that the workforce service provider and its employees will take in order to prevent any conflict of interest from occurring.

Matters not subject to disclosure are identified in 40 TAC §802.21(d).

The disclosure must be provided:

  • At least annually, and as frequently as necessary, for any conflict of interest and any appearance of a conflict of interest
  • Within 10 days of giving a gift greater than $50 in value
  • At least annually for the disclosure that no conflict of interest and no appearance of conflict of interest exist

Employment of Former Board Employees by Workforce Service Providers. Except as otherwise permitted under 40 TAC §802.42, a Board’s workforce service providers shall not employ or otherwise compensate a former Board employee who was in a Board decision-making position and was employed or compensated by the Board anytime during the previous 12 months. Furthermore, a Board shall ensure that its workforce service providers do not employ or otherwise compensate a former Board employee to work on a particular matter that the employee worked on for the Board. A Board shall ensure that its contracts with workforce service providers require compliance with 40 TAC §802.42 and provide effective enforcement mechanisms allowing it to impose corrective actions, up to an including contract termination, for violation of this section.

Authority:

Return to Top

Small & Minority Firms

All necessary and affirmative steps shall be taken to contract with small and minority business firms and other historically underutilized businesses when possible.

Contractors must take affirmative steps to contract with historically underutilized businesses (HUBs), especially small and minority firms, women’s business enterprise and labor surplus area firms, when possible. Except as noted below under Entity Specific Considerations, affirmative steps must include:

  • Placing qualified HUBs on solicitation lists, e.g. bidders list
  • Assuring that HUBs are solicited whenever they are potential sources
  • Dividing total requirements when economically feasible, into smaller tasks or quantities to permit maximum participation by HUBs
  • Establishing delivery schedules, where the requirement permits, that encourages participation by HUBs
  • Using the services and assistance of the Small Business Administration (SBA), the U.S. Department of Commerce Minority Business Development Agency, and the Texas Comptroller of Public Accounts
  • Requiring the prime contractor, if subcontractors are to be let, to take the steps above

Entity Specific Considerations:

Nongovernmental Entities. A Contractor that is a nongovernmental entity must contract with HUBs to the fullest extent practical; however, it should do so in accordance with the requirements of OMB Circular A-110, as opposed to the steps above. The requirements of OMB Circular A-110 are:

  • Make information on forthcoming opportunities available and arrange timeframes for purchases and contracts to encourage and facilitate participation by HUBs
  • Consider in the contract process whether firms competing for larger contracts intend to subcontract with HUBs
  • Encourage contracting with consortiums of HUBs when a contract is too large for one of the firms to handle individually
  • Use the services and assistance, as appropriate, of such organizations as the SBA and the U.S. Department of Commerce Minority Business Development Agency in the solicitation and utilization of HUBs

Program Specific Considerations:

Supplemental Nutrition Assistance Program (SNAP) Employment and Training (E&T). Contractors that receive federal entitlement funds administered by the U.S. Department of Agriculture (e.g., SNAP E&T) are specifically encouraged to extend the goal of expanding opportunities for HUBs in the selection of banks.

Authority:

Return to Top

Surplus Property Purchases

Whenever cost effective and feasible, federal and state salvage and surplus property should be purchased in lieu of new property.

The Texas Facilities Commission (TFC) manages the disposition of both salvage and surplus personal property from state agencies, as well as, property that has been donated to the state by federal programs. State agencies, political subdivisions, and assistance organizations are eligible to purchase through the state surplus property program. Federal property is available to those entities that TFC certifies as eligible to receive and use salvage and surplus. For more information and property listings go to the Texas Facilities Commission website.

When using the state surplus property program, send a written request to the state agency that listed the property via the respective state agency contact listed on the TFC website. If the Agency listed the property, eligible Contractors may apply in writing to the Agency’s Property Manager no earlier than the first business day of the month. The request may be submitted by email, fax or mail, and will be considered on a “first come-first serve” and “as is-where is” basis. The Agency will coordinate required actions with the Contractor.

Contractors are solely responsible for maintaining, transporting, and disposing of all property acquired through the state surplus property program. When no longer needed by the Contractor, the property shall be disposed of according to the disposition instructions in Chapter 13. The Contractor shall remove all State property tags when it takes possession of the property.

Entity Specific Considerations:

Workforce Development Boards. Boards shall include a copy of their contract with the Agency in written requests for salvage or surplus property from state agencies other than the Texas Workforce Commission.

Authority:

Return to Top

Records

Procurement records providing the historical detail of each procurement action shall be retained and made available to authorized entities and authorized representatives of those entities for a minimum of three years from the date that the audit report for that period is submitted to the Agency.

Contractors shall maintain procurement records detailing the significant history of a procurement, including but not limited to: a) rationale for the method of procurement, b) selection of contract type, c) contractor selection or rejection, and d) the basis for the contract price.

The records shall be retained for a period of three years from the date that the audit report for the period is submitted to the Agency. If any litigation, claims or audit findings arise during the three-year period, the related records shall be maintained until the issues have been resolved and final action is taken, even if this causes the time to extend beyond the three-year time period. See Appendix K to this manual for further details.

Contractors shall allow timely and reasonable access and the right to examine, copy or mechanically reproduce, all reports, books, papers, documents, automated systems and other records pertaining to any grant award or program contract awarded under an Agency contract for as long as the Contractor retains the records. See Appendix K to this manual for further details.

Entity Specific Considerations:

Nongovernmental Entities. Contractors that are nongovernmental entities who are subject to OMB Circular A-110 are only required by federal regulation to maintain procurement records for purchases in excess of the small purchase procurement threshold (see Section 14.10 to this manual). The records must include, at a minimum: (a) the basis for contractor selection, (b) justification for lack of competition when competitive bids or offers are not obtained, and (c) the basis for award cost or price. The same record retention, access and reproduction requirements apply as described above.

Authority:

Procurement Records:

Access to Records:

Record Retention:

 

Return to Top

Micro-Purchases & Small Purchase Method

Small purchase procedures shall be used for relatively simple purchases for which the aggregate cost does not exceed the simplified acquisition threshold specified in Appendix A to this Manual.

The small purchase method of procurement permits the collection of price and rate quotations through informal means, such as documented phone quotes, advertisement, catalog pricing, and Internet pricing. Small purchase procedures are appropriate when: a) purchasing goods or services for which the aggregate cost does not exceed the simplified acquisition threshold, b) price is the overriding factor and can easily be compared, c) delivery is standardized, and d) performance outcomes are not dependent on the content of the goods or services procured. For this reason, it is suited for purchases where specifications can be made in advance and award can be made based on lowest price.

Micro-purchases. Contractors can establish (or choose not to establish) a separate micro-purchase threshold of up to $3,000 per purchase; i.e., relatively simple purchases for which the aggregate cost does not exceed the micro-purchase threshold established by the Contractor. Contractors that establish a separate micro-purchase threshold shall, to the extent practicable, equitably distribute micro-purchases among qualified vendors.

Circumvention. While consideration should be given to consolidating or breaking out procurements to obtain a more economical purchase and participation by historically underutilized businesses as described in Section 14.5 of this manual, aggregate purchases shall not be divided to circumvent procurement requirements, including small purchase and micro-purchase thresholds. Procurements that split or unbundle purchases for this purpose are flawed. Such purchases may be disallowed.

Aggregate Cost. For purposes of determining whether a cost exceeds the simplified acquisition threshold or a micro-purchase threshold, “aggregate cost” means the following:

  • For single purchases or individual recurring purchases made without contract, aggregate cost means the cost of the individual purchase.
  • For contracts, aggregate cost means the total potential cost of the contract, including any option years and amendments.

Price or Rate Quotations for Micro-purchases and Small Purchase Procurements. When using the small purchase method, Contractors must obtain price or rate quotations from an adequate number of qualified sources for all purchases that exceed a Contractor’s micro-purchase threshold. Contractors must obtain price or rate quotations for micro-purchases if:

  • The purchasing entity has information that the price is not reasonable (i.e., based on comparison to the previous price paid, or personal knowledge of the supply or purchase)
  • Purchasing a good or service for which comparative pricing is not readily available (i.e., purchasing a good or service that is not the same as, or similar to other goods or services that have recently been purchased on a competitive basis)

Contractors can make micro-purchases without soliciting price or rate quotations if the Contractor considers the price to be reasonable based on information such as research, experience, prior purchases, or other information. The basis (e.g. research, experience, purchases, or other information) used by the Contractor to determine price reasonableness of a purchase should be noted in support documentation, or specified by the Contractor’s policies and procedures. The Agency may review micro-purchases for price reasonableness.

Awards. The relatively simple nature of small purchase procurements typically results in awarding a purchase based on the lowest price or rate quotation. This includes micro-purchases for which price or rate quotations were obtained because reasonableness could not otherwise be determined. When price or rate quotations were obtained, and award is made to an entity other than the one offering the lowest price or rate, include explanation of the award decision in the support documentation.

Additional Guidance on Small Purchase Procurements. Optional supplemental guidance on the use of the small purchase method of procurement is provided below. The guidance is based on the Federal Acquisition Regulation (FAR) at 48 CFR §13.106. The FAR sets forth procurement regulations that apply to federal agencies. Contractors are not subject to compliance with FAR. However, because of similarities between the FAR and grant procurement standards, FAR policies can be a useful aid to Contractors, and may be incorporated into the Contractor’s local policies and procedures at the Contractor’s discretion unless such provisions are otherwise required by or in conflict with applicable federal, state, and/or Agency requirements. In such cases, compliance with the applicable federal, state, and/or Agency requirements must be maintained.

Considerations. Contractors may refer to the preliminary considerations listed in the FAR prior to requesting quotations or offers at 48 CFR §13.106-1(a).

Soliciting from a Single Source. Bids may be solicited from only one source if the contracting officer determines that only one source is reasonably available. See 48 CFR §13.106-1(b).

Solicitation. Solicitations may be oral or written; however, oral quotations and offers are generally only used for aggregate acquisitions less than $25,000. See 48 CFR §13.106-1(c)-(d).

Options. The solicitation may include renewal options provided that the sum of all options does not exceed the small purchase threshold. See 48 CFR §13.106-1(e).

Evaluation of Quotation or Offers. All offers or quotations should be considered and evaluated by the contracting officer in an impartial manner. See 48 CFR §13.106-2.

Basis for Award. Alternatives for determining price reasonableness are provided at 48 CFR §13.106-3(a).

File Documentation and Retention. Methods for documenting the small purchase procurement are provided at 48 CFR §13.106-3(b).

Notification. Unsuccessful offerors only need to be notified of nonselection if such notification is requested by the offeror. See 48 CFR §13.106-3(c).

Request for Information. If a supplier requests information on an award that was based on factors other than price alone, a brief explanation of the basis for the contract award decisions should be provided. See 48 CFR §13.106-3(d).

Taxpayer Identification Number. When oral solicitation is used, a copy of the award document containing the taxpayer identification number should be sent to the Contractor’s payment office. See 48 CFR §13.106-3(e).

Entity Specific Considerations:

Nongovernmental Entities. For Contractors that are nongovernmental entities, OMB Circular A-110 does not provide any specific requirements for conducting the small purchase method of procurement. Unless otherwise specified, procurements must be conducted in accordance with the standards in this chapter.

Authority:

 

Return to Top

Sealed Bid Method

Sealed bid procedures shall be conducted in accordance with applicable administrative requirements.

The sealed bid and competitive proposal (see Section 14.12 of this manual) methods of procurement are appropriate when purchasing goods or services for which the aggregate cost exceeds the simplified acquisition threshold specified in Appendix A to this manual. The sealed bid method, which is also known as formal advertising, must be used when the following conditions exist:

  • A complete, adequate, and realistic specification or purchase description is available
  • Two or more responsible bidders are willing and able to compete effectively
  • Price is the primary basis for selecting the successful bidder
  • A firm fixed price contract will be awarded

Sealed bid procurements must be conducted in accordance with the following federal requirements:

  • The Invitation for Bid (IFB) must be publicly advertised, as described below
  • Bids must be solicited from an adequate number of known suppliers
  • Bidders must be allowed sufficient time to submit a bid
  • The IFB must include all information needed by the bidder to submit a responsive bid
  • All bids must be publicly opened at the time and place specified in the IFB
  • A firm fixed-price contract must be made in writing to the lowest responsive and responsible bidder
  • When specified in bidding documents, discounts, transportation costs, and life cycle costs must be considered in determining the lowest bid (although payment discounts may only be used if the Contractor takes advantage of them)
  • A Contractor may reject any or all bids when a sound documented reason exits

Additional Guidance on the Sealed Bid Method. Optional supplemental guidance on the use of the sealed bid method of procurement is provided below. The guidance is based on the Federal Acquisition Regulation (FAR) at 48 CFR §§14.401-14.409. The FAR sets forth procurement regulations that apply to federal agencies. Contractors are not subject to compliance with FAR. However, because of similarities between the FAR and grant procurement standards, FAR policies can be a useful aid to Contractors, and may be incorporated into the Contractor’s local policies and procedures at the Contractor’s discretion, unless such provisions are otherwise required by or in conflict with applicable federal, state, and/or agency requirements. In such cases, compliance with applicable federal, state, and/or agency requirements must be maintained.

Develop the IFB. The FAR policy for determining what information to include in an IFB is provided at 48 CFR §14.201.

Bidding Time. While the FAR generally considers 30 days to be a reasonable time to allow between the issuance of the IFB and the bid opening, it also includes a policy for determining whether a longer or shorter bidding time would be appropriate. See 48 CFR §14.202-1.

Telegraphic, Electronic, and Facsimile Bids. Considerations for the use of telegraphic (including mailgrams), electronic, and facsimile bid delivery methods are discussed at 48 CFR §14.202-2 (Telegraphic Bids); 48 CFR §14.202-7 (Facsimile Bids); and 48 CFR §14.202-8 (Electronic Bids).

Bid Envelopes. The FAR policy regarding prepaid postage envelopes and pre-printed address are provided at 48 CFR §14.202-3.

Bid Samples and Descriptive Literature. Treatment of unsolicited bid samples and descriptive literature, as well as, considerations for the use of and waivers for bid samples and descriptive literature are discussed at 48 CFR §14.202-4 (Bid Samples); 48 CFR §14.202-5 (Descriptive Literature); and 48 CFR §14.404-4 (Restrictions on Disclosure of Descriptive Literature).

Final Review of IFB. The FAR policy for conducting a final review of the IFB prior to issuance is provided at 48 CFR §14.202-6.

Public Notice and Use of Bidder’s List. Generally accepted timeframes for publishing public notices and policies for using the bidders list are discussed at 48 CFR §§14.203, 14.203-1, 14.203-2, and 14.203-3.

Records of IFBs and Bids. Policies for documenting the IFB distribution and date of issuance, records of issued solicitations, and the abstract or record of bids are discussed at 48 CFR §14.204.

Pre-Bid Conference. The use of pre-bid conferences, including the FAR policy that conferences should not be used to substitute for amendments to the IFB, are discussed at 48 CFR §14.207.

Amendment of an IFB. Circumstances under which it is appropriate to amend an IFB and relative considerations are discussed at 48 CFR §14.208.

Cancellation of Invitations Before Opening. The FAR discusses situations and considerations used to determine whether to cancel an IFB prior to opening any bids at 48 CFR §14.209.

Release of Acquisition Information. The FAR policy for restricting information concerning sealed bid solicitations is provided at 48 CFR §14.211.

Responsiveness of Bids. The FAR defines a “responsive bid” at 48 CFR §14.301.

Consideration of Late Bids. The FAR defines a late bid, and includes circumstances under which such a bid may be used at 48 CFR §14.302 (Bid Submission); 48 CFR §14.303 (Modification or Withdrawal); and 48 CFR §14.304 (Submission, Modification and Withdrawal).

Receipt and Safeguarding of Bids and Opening Bids by Mistake. Methods for securing bids, as well as, treatment of bids that are opened by mistake are discussed at 48 CFR §14.401.

Opening Bids on Bid Opening Date. The FAR policies for opening bids and making them available to the public are discussed at 48 CFR §14.402-1.

Postponement of Openings. The circumstances under which it is generally acceptable to postpone a bid opening, as well as procedures for doing so, are provided at 48 CFR §14.402-3.

Recording of Bids. The elements of each bid that are significant for purposes of preparing a bid abstract are discussed at 48 CFR §14.403.

Rejection of Bids. The FAR discusses a number of circumstances and procedures relating to the cancellation of invitations after opening, rejection of individual bids, notice to bidders of rejection of all bids, and all or none qualifications at 48 CFR §§14.404-1, 14.404-2, 14.404-3, 14.404-4, and 14.404-5.

Minor Informalities or Irregularities in Bids. The FAR policy for the treatment of minor informalities or irregularities in bids is discussed at 48 CFR §14.405.

Receipt of Unreadable Electronic Bid. The FAR policy for the treatment of unreadable electronic bids is discussed at 48 CFR §14.406.

Mistakes in Bids. The FAR policies relating to the determination of whether a mistake in a bid exists, and treatment of mistakes are discussed at 48 CFR §§14.407-1, 14.407-2, 14.407-3, 14.407-4.

Award. Guidelines for making and documenting the award process are at 48 CFR §§14.408-1, 14.408-2, 14.408-3, 14.408-4, 14.408-6, 14.408-7 and 14.408-8.

Information to Bidders. The FAR discusses procedures for the dissemination of award information to bidders at 48 CFR §§14.409-1 and 14.409-2.

Entity Specific Considerations:

Nongovernmental Entities. For nongovernmental entities, OMB Circular A-110 does not provide any specific requirements for conducting procurements using the sealed bid method. Unless otherwise specified, procurements must be conducted in accordance with the standards in this Chapter.

Authority:

 

Return to Top

Competitive Proposal Method

Competitive proposal procedures shall be conducted in accordance with applicable administrative requirements.

The sealed bid (see Section 14.11 of this manual) and competitive proposal methods of procurement are appropriate when purchasing goods or services for which the aggregate cost exceeds the simplified acquisition threshold specified in Appendix A to this manual. The competitive proposal method is normally used when two or more responsible bidders are willing and able to compete effectively for the business and the procurement lends itself to a fixed-price or cost-reimbursement contract. The competitive proposal method is generally used when conditions are not appropriate for the sealed bid method.

Competitive proposal procurements must meet the following federal requirements:

  • Requests for proposals (RFPs) must be publicized and identify all evaluation factors and their relative importance. Any response to publicized RFPs must be honored to the maximum extent practical.
  • RFPs must be solicited from an adequate number (usually two or more) of qualified sources.
  • Contractors must have a method for conducting technical evaluations of the proposals received and for selecting awardees.
  • Awards must be made to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered.
  • Contractors may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby competitors’ qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. The method, where price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services though A/E firms are a potential source to perform the proposed effort. See Section 14.15 of this manual for additional requirements for the procurement of A/E professional services.

Additional Guidance on the Competitive Proposal Method. Optional supplemental guidance on the use of the competitive proposal method is provided below. The guidance is based on the Federal Acquisition Regulation (FAR) at 48 CFR §§15.000-15.609. The FAR sets forth procurement regulations that apply to federal agencies. Contractors are not subject to compliance with FAR. However, because of similarities between the FAR and grant procurement standards, FAR policies can be a useful aid to Contractors, and may be incorporated into the Contractor’s local policies and procedures at the Contractor’s discretion, unless such provisions are otherwise required by or in conflict with applicable federal, state, and/or agency requirements. In such cases, compliance with applicable federal, state, and/or agency requirements must be maintained.

Best Value. This policy discusses considerations involved in determining best value, and tradeoffs that may occur at 48 CFR §§15.101, 15.101-1 and 15.101-2.

Information Exchange. In accordance with this policy, all exchanges of information conform to procurement integrity requirements. This policy is discussed further at 48 CFR §15.201.

Presolicitation Notices. Presolicitation notices facilitate the competitive proposal process by identifying the level of viable competition that exists for a given acquisition. The FAR describes the specific details of using a presolicitation notice at 48 CFR §15.202.

Requests for Proposals (RFPs). The FAR policy for determining what information to include in the RFP is provided at 48 CFR §15.203.

Uniform Contract Format. The FAR discusses the use of a uniform format to facilitate the preparation of the RFP and the contract. Regardless of whether the Contractor uses a uniform contract format, it may reference the FAR for discussion of the major sections of the RFP and their contents at 48 CFR §§15.204, 15.204-1, 15.204-2, 15.204-3, 15.204-4 and 15.204-5.

Issuing Solicitations. FAR policy for issuing solicitations electronically is provided at 48 CFR §15.205.

Amending the Solicitation. Considerations for amending the RFP are at 48 CFR §15.206.

Handling Proposals and Information. Policies for safeguarding RFPs and Requests for Information (RFI) to prevent unauthorized disclosure are discussed at 48 CFR §15.207.

Oral Presentations. The FAR addresses the type of information that may be obtained through oral presentations, the information that should be included in the RFP, and the types of documentation that should be retained at 48 CFR §15.102.

Submission, Modification, Revision, and Withdrawal of Proposals. The FAR addresses the responsibilities of proposers to submit proposals by the time stated in the RFP, and the treatment and consideration of late proposals at 48 CFR §15.208.

Exchanges with Offerors after Receipt of Proposals. Within certain limitations, the FAR allows for a continued exchange of information after proposals have been received at 48 CFR §15.306.

Contractor Responsibilities Regarding Source Selection. Guidelines for selecting an evaluation team and other responsibilities of the contracting officer are provided at 48 CFR §15.303.

Evaluation Factors. The FAR policy provides that evaluation factors vary by solicitation, but always include price, past performance, historically underutilized business, quality, and subcontracting opportunities; and that all factors that will be used in the evaluation of proposals be included in the RFP along with each factors’ relative significance at 48 CFR §15.304.

Proposal Evaluation. The FAR policy provides that all proposals may be rejected and that the Contractor may opt to make no award at 48 CFR §15.305.

Source Selection Decision. This section provides that all proposals be evaluated against the selection criteria in the RFP and that the selection process be documented and free from bias at 48 CFR §15.308.

Pricing Policy. The FAR provides that goods and services be purchased from responsible sources at reasonable prices, and that contracts be priced separately and independently at 48 CFR §15.402.

Proposal Analysis Techniques. The FAR provides different techniques for analyzing proposals at 48 CFR §15.404-1.

Obtaining Cost or Pricing Data. FAR policy when obtaining cost or pricing data is discussed at 48 CFR §§15.403-1, 15.403-2, 15.403-3, 15.403-4 and 15.403-5.

Subcontract Pricing Considerations. The use of cost or price analysis to determine the reasonableness of prime and subcontracting costs is discussed at 48 CFR §15.404-2.

Profit. FAR policy provides that profit not exceed ten percent of a contract’s estimated cost. This section also provides considerations for negotiating profit at 48 CFR §15.404-4. See also Section 14.16 in this manual.

Should-Cost Review. A should-cost review is a form of cost analysis. The FAR discusses two types of should-cost reviews in further detail at 48 CFR §15.407-4.

Prenegotiation Objectives. The FAR discusses the establishment and use of prenegotiation objectives at 48 CFR §15.406-1.

Price Negotiation. The negotiation of price and profit are discussed in detail at 48 CFR §15.405. See also Section 14.19 in this manual.

Documenting the Negotiation. The FAR discusses the principal elements of negotiation that should be documented in the contract file at 48 CFR §15.406-3.

Proposal Revisions. In accordance with FAR policy, an award may be based on final proposal revisions submitted by each competitive proposer after negotiations. See 48 CFR §15.307.

Award to Successful Offeror. FAR policy provides that the successful proposer be notified of award by receipt of an executed contract or other award notice. See 48 CFR §15.504.

Notifications to Unsuccessful Offerors. The FAR provides that the contracting officer promptly notify proposers in writing if their proposal is excluded or eliminated from competition and that unsuccessful proposers be notified within three days after the date of award. See 48 CFR §15.503.

Preaward Debriefing of Offerors. Proposers excluded from the competitive range or otherwise excluded from the competition before award may request a debriefing before the award. Appropriate procedures for the pre-award debriefing are discussed at 48 CFR §15.505.

Postaward Debriefing of Offerors. The FAR provides that unsuccessful proposers be debriefed in accordance with 48 CFR §15.506.

Defective Cost or Pricing Data. In accordance with FAR policy, if the discovery of inaccurate, incomplete or noncurrent cost, pricing, or other data occurs before the price agreement or after award, the contracting officer should request the proposer to correct the error. Different procedures apply depending on whether the defect is identified before the price agreement or after the award. See 48 CFR §15.407-1.

Discovery of Mistakes. FAR policy is to treat mistakes in a proposal that are disclosed after award in accordance with the procedures for mistakes in bids. See 48 CFR §15.508 and 48 CFR §14.407-4.

Unsolicited Proposals. The FAR handles unsolicited proposals in accordance with 48 CFR §§15.600 (Scope), 15.601 (Definitions), 15.602 (Policy), 15.603 (General), 15.604 (Points of Contact), 15.605 (Proposal Content), 15.606 (Procedures), 15.606-1 (Receipt), 15.606-2 (Evaluation), 15.607 (Criteria), 15.608 (Prohibitions), and 15.609 (Limitations).

Entity Specific Considerations:

Nongovernmental Entities. For nongovernmental entities, OMB Circular A-110 does not provide any specific requirements for conducting the competitive proposal method of procurement. Unless otherwise specified, procurements must be conducted in accordance with the standards in this Chapter.

Authority:

Return to Top

Noncompetitive Method

Noncompetitive procedures shall be conducted in accordance with applicable administrative requirements.

Procurement by noncompetitive procedures is procurement through solicitation of a proposal from only one source (sole source procurement), or if after solicitation of a number of sources, competition is determined to be inadequate. Procurement by noncompetitive proposals may be used only when the award of a contract is infeasible under small purchase procedures (including micro-purchase procedures), sealed bids or competitive proposals, and one of the following circumstances applies:

  • The item is available only from a single source.
  • Public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation.
  • The awarding agency authorized noncompetitive proposals.
  • After solicitation of a number of sources, competition is determined inadequate.

Cost analysis, which includes verification of the proposed cost data, the projections of the data, and the evaluation of the specific elements of costs and profits, is required.

Contractors shall limit use of noncompetitive procurements, consistent with requirements to maximize full and open competition in Section 14.3 of this manual. The Agency monitors Contractors’ use of noncompetitive procurements through on-site reviews of procurement files, policies and procedures, and processes. Such reviews can occur during regularly scheduled monitoring reviews and other Agency visits. If the Agency finds a Contractor’s procurement process to be inconsistent with the principle of maximizing full and open competition, the Agency will require corrective action, which can include imposing prior approval or pre-award review requirements until the matter is resolved to the Agency’s satisfaction.

Entity Specific Considerations:

Nongovernmental Entities. For nongovernmental entities, OMB Circular A-110 does not provide any specific requirements for conducting the non-competitive method of procurement. However, unless otherwise specified, procurements must be conducted in accordance with the standards in this Chapter.

Authority:

Return to Top

Program Related Client Services

Contracts for the purchase of program-related client services must comply with contracting requirements of the General Appropriations Act of the corresponding biennium, in addition to the requirements of Chapter 15 of the Financial Manual for Grants and Contracts (FMGC).

No funds appropriated to the Agency may be used for contracts for the purchase of program-related client services unless:

  • Such contracts include clearly defined goals, outputs, and measurable outcomes which directly related to program objectives
  • Such contracts include clearly defined sanctions or penalties for noncompliance with contract terms and conditions
  • Such contracts specify the accounting, reporting, and auditing requirements applicable to funds received under the contract
  • The Contractor has implemented a formal program using a risk assessment methodology to monitor compliance with financial and performance requirements under the contract, including a determination of whether performance objectives have been achieved
  • The Contractor has implemented a formal program to obtain and evaluate program costs information to ensure that all costs, including administrative costs, are reasonable to achieve program objectives

Contractors must ensure that all client services contracts contain the required contract terms above. The Contractor must maintain a contract administration system that incorporates risk assessment, monitoring, and cost evaluation requirements applicable to client services contracts.

Authority:

Return to Top

Professional & Consulting Services

Professional services, including auditors and consulting services, must be selected and awarded in accordance with applicable administrative requirements.

Professional services, including auditors, and consulting services, must be selected and awarded in accordance with the following requirements.

Professional Services. Award and selection of professional services shall not be based upon competitive bids. Award and selection must be based upon:

  • The basis of demonstrated competence and qualifications to perform the services
  • A fair and reasonable price

Fees must be consistent with, and may not exceed, the recommended practices and fees published by the applicable professional associations. Additionally, the fees may not exceed any maximum provided by law.

Architectural, engineering, or land surveying. In procuring architectural, engineering, or land surveying services, a Contractor must:

  • First select the most highly qualified provider of those services on the basis of demonstrated competence and qualifications
  • Then attempt to negotiate with that provider a contract at a fair and reasonable price

If a satisfactory contract cannot be negotiated with the most highly qualified provider of architectural, engineering, or land surveying services, the Contractor must:

  • Formally end negotiations with that provider
  • Select the next most highly qualified provider
  • Attempt to negotiate a contract with that provider at a fair and reasonable price

The Contractor must continue the process described above to select and negotiate with providers until a contract is entered into, but not to the extent that a contract with an unqualified firm or individual would result. Also, see the reference to A/E professional services in Section 14.12 of this manual.

Audit services. In procuring an auditor, positive efforts must be made to use small businesses, minority-owned firms, and women’s business enterprises. In requesting proposals for audit services, the objectives and scope of the audit should be made clear. Factors to be considered in evaluating each proposal for audit services include the responsiveness to the request for proposal, relevant experience, availability of staff with professional qualifications and technical abilities, the results of external quality control reviews, and price.

As provided by single audit requirements, an auditor who prepares the indirect cost proposal or cost allocation plan must not also be selected to perform the audit required by OMB Circular A-133 and/or the State of Texas Single Audit Circular (in Part IV of the Uniform Grant Management Standards) when the indirect costs recovered by the auditee during the prior year exceeded $1 million.

Consulting Services. A Contractor may contract with a consultant only if:

  • There is a substantial need for the consulting service
  • The Contractor cannot adequately perform the services with its own personnel or obtain the consulting services through a contract with a state governmental entity

Selection must be based on demonstrated competence, knowledge, qualifications, and on the reasonableness of the proposed fee for the services. If other considerations are equal, preference must be given to a consultant whose principle place of business is in the state, or who will manage the consulting contract wholly from an office in the state.

A consulting contract, including renewals, amendments, and extensions, may not be divided into more than one contract to avoid procurement requirements. Consulting services do not fall within the definition of professional services procurement and must be competitively procured.

Authority:

Return to Top

Eligible Training Provider List

Training providers for Workforce Investment Act (WIA) Adult and Dislocated Worker training services shall not be procured, but shall be certified through the Agency’s Eligible Training Provider Certification System and selected for training from the resulting Eligible Training Providers List. Where authorized, training available on the Eligible Training Provider List can be used by other customers.

Training providers for WIA Adult and Dislocated Workers training services shall not be competitively procured. Instead, such providers must apply for eligibility to submit programs for approval to the Eligible Training Providers List (ETPL) (also sometimes referred to as the Statewide List of Certified Training Providers) through the Eligible Training Provider Certification System (ETPS) (also sometimes referred to as TPCS). WIA Adults and Dislocated Workers that are eligible for training may only select training services from the ETPL. WIA-funded training is paid for through Individual Training Accounts (ITAs) established for each customer.

The ETPL and ITAs may also be used to deliver training services funded through Temporary Assistance for Needy Families/Choices, Supplemental Nutrition Assistance Program Employment and Training, Trade Adjustment Assistance, and the North American Free Trade Agreement-Transitional Adjustment Assistance.

Additionally, through a waiver received from the U.S. Department of Labor, Boards may allow WIA Older Youth (ages 19-21) and WIA Out-Of-School Youth to select training providers from the ETPL. Boards choosing to extend the use of the ETPL to WIA Older and Out-Of-School Youth must develop policies for accessing and using both the ETPL and ITAs for Youth. These local policies must be developed with input from the community and include an opportunity for public review and comment. Boards not choosing to extend the ETPL to WIA Older and Out-of-School Youth must competitively procure WIA Youth training providers in accordance with this Chapter.

While On-the-Job Training and customized training under WIA are training services for adults and dislocated workers, training providers for such services do not have to be selected from the ETPL and the training may be made pursuant to a contract for services instead of an ITA.

Authority:

Return to Top

Selection Procedures

Written selection procedures must exist for procurement transactions. An entity on the federal debarment list shall not be selected for an award.

Written selection procedures must identify all requirements and evaluation factors to be used in evaluating bids or proposals. A clear and accurate description of the technical requirements of the goods or services being procured must be included in the solicitation. Such description:

  • Shall not, in competitive procurements, contain features that unduly restrict competition, or otherwise provide one competitor with an unfair advantage over others
  • May include a statement of the qualitative nature of the good or service being procured
  • When necessary, must set forth the minimum essential characteristics and standards that must be met to satisfy the intended use
  • Should avoid detailed product specifications, if at all possible

A “brand name or equal” description may be used to define performance or other salient procurement requirements only when it is impractical or uneconomical to provide a clear and accurate description of the technical requirements. The specific features that must be met must be clearly stated. See also Entity Specific Consideration below.

Debarment. Contractors shall not make awards to any party that is:

  • Debarred or suspended or is otherwise excluded from or ineligible for participation in federal assistance programs under Executive Order 12549, “Debarment and Suspension
  • Barred from participating in State contracts pursuant to Texas Government Code §2155.077, as implemented by 34 TAC §§20.105-20.107
  • Found on the Excluded Persons List System (EPLS) in compliance with Executive Order 13224 (Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), as implemented by 29 CFR, Chapter XII, Part 1471

Contractors shall use the following to conduct a search for such persons or entities prior to awarding or renewing a contract:

  • At the state level, the Texas Comptroller of Public Accounts website
  • At the federal level, the System for Award Management (SAM)

Additional Guidance on the Development of Selection Criteria. Optional supplemental guidance on the development of selection criteria can be found at 48 CFR §13.106-2 (Small Purchase Method); 48 CFR §14.201-8 (Sealed Bid Method); and 48 CFR §§15.304-15.308 (Competitive Proposal Method). The guidance is based on the Federal Acquisition Regulation (FAR). The FAR sets forth procurement regulations that apply to federal agencies. Contractors are not subject to compliance with FAR. However, because of similarities between the FAR and grant procurement standards, FAR policies can be a useful aid to Contractors, and may be incorporated into the Contractor’s local policies and procedures at the Contractor’s discretion, unless such provisions are otherwise required by or in conflict with applicable federal, state, and/or agency requirements. In such cases, compliance with applicable federal, state, and/or agency requirements must be maintained.

Entity Specific Consideration:

Nongovernmental Entities. To the extent practical and economically feasible, nongovernmental entities subject to OMB Circular A-110 must ensure that solicitations include the acceptance of products and services dimensioned in the metric system of measurement and preference for energy efficient products and services that conserve natural resources and protect the environment.

Authority:

Selection:

Debarment:

Return to Top

Cost or Price Analysis

A cost or price analysis must be performed in connection with every procurement action.

Contractors must make independent estimates before receiving bids or proposals. Beyond that, the method and degree of cost analysis or price analysis may vary dependent on the facts surrounding each procurement situation. Note that costs or prices based on estimated costs are allowable only to the extent that costs incurred or cost estimates are consistent with federal cost principles.

A cost analysis is required when an offeror must submit the elements of its estimated cost. It is also required when adequate price competition is lacking (i.e. sole source procurements, contract modifications or change orders) unless price reasonableness can be established using: 1) a catalog or market price of a commercial product that is sold in substantial quantities to the general public; or 2) based on prices set by law or regulation. A price analysis will be used in all other instances to determine the reasonableness of the proposed contract price. For micro-purchases, price reasonableness may be determined as described in Section 14.10 of this manual.

Profit, when applicable, must be negotiated as a separate element of the price anytime a cost analysis is performed and for all contracts in which there is no price competition. Considerations for determining a fair and reasonable profit must include:

  • Complexity of the work to be performed
  • Risk borne by the subcontractor
  • Subcontractor’s investment
  • Amount of subcontracting (by the subcontractor)
  • Quality of its record of past performance
  • Industry profit rates in the surrounding geographical area for similar work

Optional supplemental guidance on performing a cost or price analysis can be found in the Federal Acquisition Regulation (FAR) at 48 CFR §13.106-3 (Small Purchase Method) and 48 CFR §15.404-1 (Sealed Bid and Competitive Negotiation Methods). The FAR sets forth procurement regulations that apply to federal agencies. Contractors are not subject to compliance with the FAR. However, because of similarities between the FAR and grant procurement standards, FAR policies can be a useful aid to Contractors. The guidance may be incorporated into the Contractor’s local policies and procedures at the Contractor’s discretion, unless such provisions are otherwise required by or in conflict with applicable federal, state, and/or agency requirements. In such cases, compliance with applicable federal, state, and/or agency requirements must be maintained.

Entity Specific Considerations:

Nongovernmental Entities. Aside from requiring that “some form of cost or price analysis shall be made and documented in the procurement files in connection with every procurement action,” OMB Circular A-110, which is applicable to nongovernmental entities, does not provide for any of the specific requirements described above.

Authority:

Return to Top

Protest Procedures

Protest procedures must be in place to handle and resolve disputes relating to procurements.

Protests must be settled in accordance with good administrative practice and sound business judgment as prescribed in Section 14.1 of this manual. In all instances, information regarding the protest must be disclosed to the awarding agency. A protester must exhaust all administrative remedies with the Contractor or subcontractor before pursuing a protest with the Agency. Reviews of protest by the Agency will be limited to:

  • Violations of federal law or regulations and procurement standards established by federal regulations (violations of state or local law will be under the jurisdiction of state or local authorities)
  • Violations of the Contractor’s or subcontractor’s protest procedures for failure to review a complaint or protest

Protests received by the Agency other than those specified above will be referred to the Contractor or subcontractor.

Entity Specific Considerations:

Nongovernmental Entities. OMB Circular A-110, which applies to nongovernmental entities, does not provide any specific requirements for protest procedures.

Authority:

Return to Top

Pre-Award Review

A pre-award review should be conducted to determine the adequacy of an offeror’s financial management system prior to award.

In accordance with federal and state regulations, prior to awarding a contract and any time subsequent to award, the Contractor may evaluate an offeror’s financial management system and may make an assessment of the offeror’s level of risk of noncompliance or nonperformance under the contract. A bidder may be considered “high risk” if it:

  • Has a history of poor performance
  • Is not financially stable
  • Has a management system that does not meet the standards prescribed in the OMB Circular A-110 or the Common Rule (as applicable) (see Appendix G to this manual for the codification of the Common Rule)
  • Has not conformed to the terms and conditions of a previous award
  • Is not otherwise responsible

If the bidder is considered “high risk” but will still be awarded the contract, the Contractor should impose additional restrictions on the bidder until the risk conditions have been corrected. When additional requirements will be imposed, the Contractor must notify the bidder in writing as to:

  • The nature of the additional requirements
  • The reason why the additional requirements are being imposed
  • The nature of the corrective action needed
  • The time allowed for completing the corrective actions
  • The method for requesting reconsideration of the additional requirements imposed

Special conditions or restrictions may include:

  • Payment on a reimbursement, where otherwise not required
  • Requiring additional, more detailed financial reports
  • Additional project monitoring
  • Requiring technical or management assistance
  • Establishing additional prior approvals
  • Withholding authority to proceed to the next phase until receipt of evidence of acceptable performance within a given funding period

Any special conditions or restrictions must be promptly removed once the risk conditions have been corrected.

Entity Specific Considerations:

Nongovernmental Entities. Other than the special award conditions summarized above, OMB Circular A-110, which applies to nongovernmental entities, does not provide any specific reference or requirement that provide for the performance of a pre-award review. Additionally, OMB Circular A-110 does not elaborate on the types of special conditions or restrictions that may be imposed before corrective action has been taken.

Local Workforce Development Boards. The rules at 40 TAC §802.21 requires Boards to perform fiscal integrity evaluations of workforce service providers, and sets forth requirements for the performance of such reviews as follows.

  • A Board shall develop fiscal integrity evaluation indicators designed to appraise the fiscal integrity of its workforce service providers.
  • A Board shall assess its workforce service providers to ensure the providers meet the requirements of the Board’s fiscal integrity evaluation based on the following schedule:
  • The fiscal integrity evaluation shall include the following provisions for ensuring that workforce service providers are meeting performance measures in compliance with requirements contained in:
  • The fiscal integrity evaluation shall also include the review and consideration of the prospective or renewing workforce service provider’s prior three-year financial history before the Board awards or renews a workforce service contract. The review shall include any adverse judgments or findings, such as administrative audit findings; Commission, Agency, or Board monitor findings; or sanctions by a Board or court of law.
  • The fiscal integrity evaluation may include provisions such as accounting for program income in accordance with federal regulations, resolving questioned costs and the repayment of disallowed costs in a timely manner, and safeguarding fixed assets, as well as those referenced in this Manual.

The fiscal integrity evaluation required by 40 TAC §802.21 can be accomplished by relying on the work of other reviews, audits, or examinations, to the extent that such work meets the rule’s stated objectives and requirements. Where the previous work only partially meets the rule’s objectives and requirements, additional work is required prior to making the award, but may build upon work performed for the other reviews, audits, or examinations.

To meet the intent of the purpose for the fiscal integrity evaluation, the work of a review, audit, or examination that will be relied on to satisfy performance of the fiscal integrity evaluation will need to have been performed within the last few months of the contract that is being considered for renewal, or for a new contract, within a few months prior to the contract’s start date (i.e., 40 TAC §802.21 requires that the evaluation be performed prior to award and at each renewal.)

Authority:

 

Return to Top

Performance Bonds

Bonding for construction or facility improvements must adequately protect the federal and/or state government’s interest.

Except as otherwise required by statute, Contractors must require any contractor or subcontractor for construction or facility improvements to demonstrate that it is adequately bonded. The policy varies by the amount of the contract as follows:

Contracts < or = $100,000. A Contractor may follow its own policy relating to bonding requirements for construction or facility improvement contracts; i.e. bid guarantees, performance bonds, and payment bonds.

Contracts > $100,000. A Contractor may follow its own policy relating to bonding requirements for construction or facility improvement contracts if the federal or state awarding agency determines that such a policy is sufficient to adequately protect the federal and/or state government’s interest. If no such determination is made, the bidder must at a minimum, provide a bid guarantee equivalent to five percent of the bid price, a performance bond for 100 percent of the contract price, or a payment bond for 100 percent of the contract price.

Entity Specific Considerations:

Nongovernmental Entities. OMB Circular A-110, which is applicable to nongovernmental entities, requires that where bonds are required, such bonds must be obtained from companies holding certificates of authority as acceptable sureties pursuant to 31 CFR Part 223, “Surety Companies Doing Business with the United States.”

Authority:

Return to Top

Contract Types

The appropriate type of contract must be used, and shall not include cost plus a percentage of cost or percentage of construction cost contracts.

The cost plus a percentage of cost and percentage of construction cost methods of contracting are prohibited. Additionally, time and material type contracts may only be used after determining that no other type of contract is suitable, and if the subcontractor exceeds the contract ceiling price, if included, it does so at its own risk.

Contracting requirements are provided in Chapter 15 of this manual. In addition, optional supplemental guidance on determining the appropriate type of contract may be found at 48 CFR Part 16, as indicated below. The guidance is based on the Federal Acquisition Regulation (FAR). The FAR sets forth procurement regulations that apply to federal agencies. Contractors are not subject to compliance with FAR. However, because of similarities between the FAR and grant procurement standards, FAR policies can be a useful aid to Contractors, and may be incorporated into the Contractor’s local policies and procedures at the Contractor’s discretion, unless such provisions are otherwise required by or in conflict with applicable federal, state, and/or agency requirements. In such cases, compliance with applicable federal, state, and/or Agency requirements must be maintained.

  • Fixed price contracts (48 CFR §§16.201-207-3)
  • Cost-reimbursement contracts (48 CFR §§16.301-307)
  • Incentive contracts (48 CFR §§16.401-406)
  • Indefinite-delivery contracts (48 CFR §§16.500-506)
  • Time-and-Materials, Labor-Hour, and Letter Contracts (48 CFR §§16.601-603-4)

Entity Specific Considerations:

Nongovernmental Entities. OMB Circular A-110, which applies to nongovernmental entities, includes additional language that the type of procuring instruments used (e.g., fixed price contracts, cost reimbursable contracts, purchase orders, and incentive contracts) must be determined by the Contractor, but must be appropriate for the particular procurement and promote the best interest of the program involved.

Authority:

Return to Top

Attachment: Bidders & Vendors Lists

Contractors can use bidders and vendors lists in the procurement of goods and services.

Bidder’s List. A bidders list is a list of entities, the entities’ contact information, and product(s) or service(s) offered by those entities, from which mailing lists are compiled and used to promote competition by notifying potential bidders of bid/procurement opportunities. Where public advertisement is required — i.e., under the sealed bid method (Section 14.11 of this manual) and competitive proposal method (Section 14,12 of this manual) — such notifications can supplement but generally do not substitute for public advertisement. (See Public Advertisement in Section 14.11 of this manual.) Additionally, use of a bidders list must not prevent historically underutilized businesses from having an opportunity to compete, and be selected for award of subcontracts as discussed in Section 14.5 of this manual. Procurement documentation must be maintained in accordance with this Chapter.

The bidders list can be developed through a survey of the open market. Efforts to fortify the list occur through market advertising and other means designed to enroll the greatest number of potential bidders. The list requires periodic maintenance to keep it current. The State of Texas Centralized Master Bidders List (CMBL) can be used to supplement the bidders list.

State of Texas Centralized Master Bidders List. As stated above, Contractors can supplement their organizations’ bidders list with the CMBL. As with other bidders lists, entities, goods, and services listed on the CMBL have not been procured, and may not be purchased prior to procuring the goods or services in accordance with the requirements of this Chapter. There are no membership requirements to search the CMBL.

Vendors List. A vendors list is a list of persons, firms, or products that the Contractor has procured, and which it uses to purchase goods and services. A vendors list is developed in anticipation of circumstances that involve occasional and often unpredictable access to specific goods and services, which when the need arises, may require almost immediate acquisition.

Development of the vendors list requires issuance of an invitation for bids, request for proposals, or small purchase solicitation, depending on the aggregate cost and nature of the need. Selection of vendors to be included on the list results from a technical evaluation and the issuance of an instrument of understanding with the vendors, which includes procedures and potential deadlines for eventual selection and contract execution

A vendors list assures that those included on the list have undergone a full technical evaluation for the specific goods or services on the list. At the time of acquisition, the Contractor must notify all entities willing to provide the goods or services required of the intent to procure. The notice shall provide specifics of the purchase, and (as prescribed in the instrument of understanding) a deadline for cost estimate submission. The Contractor shall conduct a cost/price analysis and shall select a vendor(s) for award.

Entity Specific Considerations:

Nongovernmental Entities. OMB Circular A-110, which is applicable to nongovernmental entities, does not provide any specific requirements for using bidders or vendors lists. However, this does not preclude such entities from developing and using bidders and vendors lists in a manner that is consistent with the standards in this Chapter.

Return to Top

Attachment: Cooperative Purchases

Participation in purchasing agreements and cooperatives is encouraged to foster greater economy and efficiency in the procurement of common goods and services. A number of cooperative purchasing opportunities are available to Contractors, as discussed below.

Purchasing Cooperatives. Purchases made through a purchasing cooperative or purchasing network satisfy the procurement requirements of this Chapter if:

  • The Contractor is eligible to participate under the rules of the particular cooperative or network
  • The procurement procedures used by the cooperative or network satisfy the procurement requirements of this manual, e.g. full and open competition, requirements for small purchase, competitive proposal, and sealed bid requirements, conflicts of interest, federal debarment, etc.

Where a Contractor determines that it has met these requirements, it shall retain documentation: (1) that supports its eligibility to participate in the cooperative or network; and (2) of its assessment of the purchasing procedures used by the cooperative or network. In making its assessment, it is recommended that the Contractor contact the cooperative or network directly to discuss and gain an understanding of the procurement procedures used, rather than rely solely on a description provide on the Internet or other literature.

Texas Comptroller of Public Accounts (CPA) Texas Procurement and Support Services Cooperative Purchasing Program (State of Texas CO-OP). Goods and services purchased through the State of Texas CO-OP have been procured through sealed bids or competitive proposals, and are made available to CO-OP members through state term contracts, without requirements to conduct additional procurement activities. Membership is available to eligible entities that apply for membership and pay an annual subscription fee. Documentation must include identification of the state term contract number under which a good or service is purchased, the requisition, and the purchase order.

The following entities are eligible to apply for membership in the State of Texas CO-OP:

  • Local governments, as defined by Texas Government Code §791.003 and Texas Local Government Code §271.081 (including Boards)
  • Mental health and mental retardation community centers that receive state grants-in-aid under Subchapter B, Chapter 534, Texas Health and Safety Code
  • Assistance organizations, as defined by Texas Government Code §2175.001 (including Boards)
  • Child care providers that meet the Texas Rising Star Provider criteria in Texas Workforce Commission rules

More information about the State of Texas CO-OP and purchasing instructions can be found on the Texas Comptroller of Public Accounts website.

Texas Department of Information Resources (DIR) Information and Communications Technology (ICT) CO-OP Contracts Program. Goods and services purchased through the ICT CO-OP Contracts program have been procured through sealed bids or competitive proposals and are made available through state term contracts without requirements to conduct additional procurement activities. Participation is limited to eligible entities. There is no membership fee to participate in the program. Documentation must include identification of the state term contract number under which a good or service is purchased, the requisition, and purchase order.

The following entities are eligible to participate in the DIR ICT CO-OP Contracts Program:

  • State agencies, as defined by Texas Government Code §2251.001
  • Public institutions of higher education, as defined by Texas Education Code §61.003
  • Public school districts
  • Local governments and political subdivisions, as defined by Texas Government Code §791.003 (interpreted by the Agency to include Boards)

More information can be found on the Texas Department of Information Resources website.

Texas Multiple Award Schedule (TXMAS) Program. CPA and DIR have established, as an alternative purchasing method, the use of TXMAS contracts for selected goods and services. These contracts are an extension of contracts already competitively awarded by the federal government or any other governmental entity of any state, and as such may be used for purposes of this Chapter without additional procurement activities. (Note: The prices on TXMAS contracts are the most favored customer prices, but under some circumstances, individual entities may negotiate lower prices). To access the TXMAS contracts and TXMAS Purchasing Program, go to the Texas Comptroller of Public Accounts website.

The following entities are eligible to participate in CPA’s TXMAS Program:

  • State agencies (does not include Boards)
  • State of Texas CO-OP members
  • Local governments, as defined by Texas Local Government Code §271.101(2) (does not include Boards)
  • Child care providers that meet the Texas Rising Star Provider criteria in Texas Workforce Commission rules

The following entities are eligible to participate in the DIR TXMAS Program:

  • State agencies, as defined by Texas Government Code §2054.003(3)
  • Units of local government, as defined by Texas Government Code §2054.003(9)
  • Institutions of higher education, as defined by Texas Education Code §61.003
  • Assistance organizations, as defined by Texas Government Code §2175.001
  • Public entities outside Texas, as defined by Texas Government Code §2054.0565

Council on Competitive Government (CCG) Contracts. CCG contracts meet competitive bidding requirements and are made available through managed state term contracts without requirements to conduct additional procurement activities. Use of the contracts is limited to eligible entities. Counties, municipalities, special districts, school districts, junior college districts, and other legally constituted political subdivisions of the state are eligible to use CCG contracts. For more information, go to the Council on Competitive Government website.

 

Return to Top