Law:Title 8. Acquisition, Sale, Or Lease Of Property. Subtitle C. Acquisition, Sale, Or Lease Provisions Applying To More Than One Type Of Local Government (Texas)

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Subtitle C. Acquisition, Sale, Or Lease Provisions Applying To More Than One Type Of Local Government

Contents

Chapter 271. Purchasing And Contracting Authority Of Municipalities, Counties, And Certain Other Local Governments

Subchapter A. Public Property Finance Act

Section  271.001.  Short Title.

This subchapter may be cited as the Public Property Finance Act.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.



Section  271.002.  Purpose.

(a) The legislature finds that the purchase or other acquisition or the use of property by governmental agencies and the financing of those activities are necessary to the efficient and economic operation of government.

(b)  This subchapter promotes a public purpose by furnishing governmental agencies with a feasible means to purchase or otherwise acquire, use, and finance public property.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1993, 73rd Leg., ch. 752, Sec. 1, eff. Aug. 30, 1993.



Section  271.003.  Definitions.

In this subchapter:

(1)  "Conservation and reclamation district" means a district or authority organized or operating under Article III, Section 52, or Article XVI, Section 59, of the Texas Constitution.

(2)  "Contract" means an agreement entered into under this subchapter but does not mean a contract solely for the construction of improvements to real property.

(3)  "Governing body" means the board, council, commission, agency, court, or other body or group that is authorized by law to acquire personal property for each respective governmental agency.

(4)  "Governmental agency" means a municipality, county, school district, conservation and reclamation district, hospital organization, or other political subdivision of this state.

(5)  "Hospital organization" means a district, authority, board, or joint board organized under the laws of this state for hospital purposes.

(6)  "Net effective interest rate" means, with reference to a contract, the interest amount considered by the governing body of a governmental agency to accrue on a contract.

(7)  "Net interest cost" means the total of all interest to accrue and come due on a contract through the last date a payment is due on the contract, plus any discount or minus any premium included in the contract price or principal sum.

(8)  "Personal property" includes appliances, equipment, facilities, and furnishings, or an interest in personal property, whether movable or fixed, considered by the governing body of the governmental agency to be necessary, useful, or appropriate to one or more purposes of the governmental agency. The term includes all materials and labor incident to the installation of that personal property. The term does not include real property.

(9)  "School district" means an independent school district, common school district, community college district, junior college district, or regional college district organized under the laws of this state.

(10)  "Improvement" means a permanent building, structure, fixture, or fence that is erected on or affixed to land but does not include a transportable building or structure whether or not it is affixed to land.

(11)  "Real property" means land, improvement, or an estate or interest in real property, other than a mortgage or deed of trust creating a lien on property or an interest securing payment or performance of an obligation in real property.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1993, 73rd Leg., ch. 752, Sec. 2, eff. Aug. 30, 1993; Acts 1999, 76th Leg., ch. 396, Sec. 1.37, eff. Sept. 1, 1999.



Section  271.004.  Real Property And Improvements For School Districts.

(a) The board of trustees of a school district may execute, perform, and make payments under a contract under this Act for the use or purchase or other acquisition of real property or an improvement to real property. If the board proposes to enter into such a contract, the board shall publish notice of intent to enter into the contract not less than 60 days before the date set to approve execution of the contract in a newspaper with general circulation in the district. The notice must summarize the major provisions of the proposed contract. The notice shall estimate the construction and other costs, but the board shall not publish the first advertisement for bids for construction of improvements until 60 days has expired from the publication of the notice of intent to enter into the contract.

(b)  If, within 60 days of the date of publication of the notice of intent required by Subsection (a), a written petition signed by at least five percent of the registered voters of the district is filed with the board of trustees requesting that the board order a referendum on the question of whether the contract should be approved, the board may not approve the contract or publish the first advertisement for bids for construction of improvements unless the question is approved by a majority of the votes received in a referendum ordered and held on the question.

(c)  Except as otherwise provided by this section, the referendum shall be held in accordance with the applicable provisions of the Election Code. The requirement that an election must be held on a uniform election date as prescribed by the Election Code does not apply to an election held under this section.

(d)  The contract is a special obligation of the school district if ad valorem taxes are not pledged to the payment of the contract.

(e)  If the contract provides that payments by the school district are to be made from maintenance taxes previously approved by the voters of the school district and are subject to annual appropriation or are paid from a source other than ad valorem taxes, the payments under the contract shall not be considered payment of indebtedness under Section 26.04(c), Tax Code.

(f)  All or part of the obligation of the school district may be evidenced by one or more negotiable promissory notes.

(g)  A lease-purchase contract entered into by the district under this section and the records relating to its execution must be submitted to the attorney general for examination as to their validity.

(h)  If the attorney general finds that the contract has been authorized in accordance with the law, the attorney general shall approve them, and the comptroller of public accounts shall register the contract.

(i)  Following approval and registration, the contract is incontestable and is a binding obligation according to its terms.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1993, 73rd Leg., ch. 752, Sec. 3, eff. Aug. 30, 1993.



Section  271.005.  Authority To Contract For Personal Property.

(a) The governing body of a governmental agency may execute, perform, and make payments under a contract with any person for the use or the purchase or other acquisition of any personal property, or the financing thereof. The contract is an obligation of the governmental agency. The contract may:

(1)  be on the terms considered appropriate by the governing body;

(2)  be in the form of a lease, a lease with an option or options to purchase, an installment purchase, or any other form considered appropriate by the governing body including that of an instrument which would be required to be approved by the attorney general under Chapter 1202, Government Code, provided that contracts in such form must be approved by the attorney general in accordance with the terms of that chapter;

(3)  be for a term approved by the governing body and contain an option or options to renew or extend the term; and

(4)  be made payable from a pledge of all or any part of any revenues, funds, or taxes available to the governmental agency for its public purposes.

(b)  The governing body of a governmental agency may contract under this section for materials and labor incident to the installation of personal property.

(c)  A contract may provide for the payment of interest on the unpaid amounts of the contract at a rate or rates and may contain prepayment provisions, termination penalties, and other provisions determined within the discretion of the governing body. The net effective interest rate on the contract may not exceed the net effective interest rate at which public securities may be issued in accordance with Chapter 1204, Government Code. Interest on the unpaid amounts of a contract shall be computed as simple interest.

(d)  Subject only to applicable constitutional restrictions, the governing body may obligate taxes or revenues for the full term of a contract for the payment of the contract.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1991, 72nd Leg., ch. 82, Sec. 1, eff. May 12, 1991; Acts 1993, 73rd Leg., ch. 104, Sec. 3, eff. May 7, 1993; Acts 1999, 76th Leg., ch. 396, Sec. 1.38, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1420, Sec. 8.293, eff. Sept. 1, 2001.



Section  271.006.  Compliance With Other Requirements.

(a) In entering into the contract, a municipality must comply with the requirements of Chapter 252 and a county must comply with the requirements of Subchapter C, Chapter 262. However, the municipality or county is not required to submit to a referendum the question of entering into the contract.

(b)  The purchasing requirements of Section 361.426, Health and Safety Code, apply to a purchase by a governmental agency under this chapter.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1991, 72nd Leg., ch. 303, Sec. 19, eff. Sept. 1, 1991.



Section  271.0065.  Additional Competitive Procedures.

(a) In any procedure for competitive bidding under this subchapter, the governing body shall provide all bidders with the opportunity to bid on the same items on equal terms and have bids judged according to the same standards as set forth in the specifications.

(b)  A governmental agency shall receive bids or proposals under this subchapter in a fair and confidential manner.

(c)  A governmental agency may receive bids or proposals under this subchapter in hard-copy format or through electronic transmission. A governmental agency shall accept any bids or proposals submitted in hard-copy format.

Added by Acts 2001, 77th Leg., ch. 1063, Sec. 4, eff. Sept. 1, 2001.



Section  271.007.  Approved And Registered Contract.

(a) If the governing body approves the contract and the contract provides for the payment of an aggregate amount of $100,000 or more, the governing body may submit the contract and the record relating to the contract to the attorney general for examination as to the validity of the contract. The attorney general shall approve the contract if it has been made in accordance with the constitution and other laws of this state, and the contract then shall be registered by the comptroller of public accounts.

(b)  After the contract has been approved and registered as provided by this section, the contract is valid and is incontestable for any cause. The legal obligation of the lessor, vendor, or supplier of personal property or of the person installing personal property to the governmental agency is not diminished in any respect by the approval and registration of the contract.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1999, 76th Leg., ch. 396, Sec. 1.39, eff. Sept. 1, 1999.



Section  271.008.  Authorized Investments.

The contract is a legal and authorized investment for:

(1)  banks, savings banks, trust companies, and savings and loan associations;

(2)  insurance companies;

(3)  fiduciaries and trustees; and

(4)  the sinking funds of a county, municipality, school district, or other political subdivision or corporation of this state.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.



Section  271.009.  Term Of Contract.

The contract may be for any term not to exceed 25 years.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.



Subchapter B. Competitive Bidding On Certain Public Works Contracts

Section  271.021.  Definitions.

In this subchapter:

(1)  "Component purchases" means purchases of the component parts of an item that in normal purchasing practices would be purchased in one purchase.

(2)  "Governmental entity" means:

(A)  a county;

(B)  a common or independent school district;

(C)  a hospital district or authority;

(D)  a housing authority; or

(E)  an agency or instrumentality of the governmental entities described by Paragraphs (A) through (D).

(3)  "Separate purchases" means purchases, made separately, of items that in normal purchasing practices would be purchased in one purchase.

(4)  "Sequential purchases" means purchases, made over a period, of items that in normal purchasing practices would be purchased in one purchase.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1989, 71st Leg., ch. 328, Sec. 15, eff. Sept. 1, 1989; Acts 1989, 71st Leg., ch. 1250, Sec. 14, eff. Sept. 1, 1989; Acts 1991, 72nd Leg., ch. 16, Sec. 13.04, eff. Aug. 26, 1991; Acts 1997, 75th Leg., ch. 1370, Sec. 1, eff. Sept. 1, 1997.



Section  271.022.  Exempt Contract.

This subchapter does not affect a contract required to be awarded under Subchapter A, Chapter 2254, Government Code.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1995, 74th Leg., ch. 76, Sec. 5.95(9), eff. Sept. 1, 1995.



Section  271.023.  Conflict Of Laws.

To the extent of any conflict, the provisions of Subchapter B, Chapter 44, Education Code, relating to the purchase of goods and services under contract by a school district prevail over this subchapter.

Added by Acts 1999, 76th Leg., ch. 1383, Sec. 2, eff. June 19, 1999.



Section 271.024.  Competitive Procurement Procedure Applicable To Contract.

If a governmental entity is required by statute to award a contract for the construction, repair, or renovation of a structure, road, highway, or other improvement or addition to real property on the basis of competitive bids, and if the contract requires the expenditure of more than $50,000 from the funds of the entity, the bidding on the contract must be accomplished in the manner provided by this subchapter.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1993, 73rd Leg., ch. 749, Sec. 2, eff. Sept. 1, 1993; Acts 1993, 73rd Leg., ch. 757, Sec. 14, eff. Sept. 1, 1993; Acts 2001, 77th Leg., ch. 115, Sec. 5, eff. Sept. 1, 2001.

Amended by:

Acts 2009, 81st Leg., R.S., Ch. 1266, Sec. 6, eff. June 19, 2009.



Section  271.0245.  Additional Competitive Procedures.

(a) In the procedure for competitive bidding under this subchapter, the governing body of the governmental entity shall provide all bidders with the opportunity to bid on the same items on equal terms and have bids judged according to the same standards as set forth in the specifications.

(b)  A governmental entity shall receive bids under this subchapter in a fair and confidential manner.

(c)  A governmental entity may receive bids under this subchapter in hard-copy format or through electronic transmission. A governmental entity shall accept any bids submitted in hard-copy format.

Added by Acts 2001, 77th Leg., ch. 1063, Sec. 5, eff. Sept. 1, 2001.



Section  271.025.  Advertisement For Bids.

(a) The governmental entity must advertise for bids. The advertisement for bids must include a notice that:

(1)  describes the work;

(2)  states the location at which the bidding documents, plans, specifications, or other data may be examined by all bidders; and

(3)  states the time and place for submitting bids and the time and place that bids will be opened.

(b)  The advertisement must be published as required by law. If no legal requirement for publication exists, the advertisement must be published at least twice in one or more newspapers of general circulation in the county or counties in which the work is to be performed. The second publication must be on or before the 10th day before the first date bids may be submitted.

(c)  The governmental entity must mail a notice containing the information required under Subsection (a) to any organization that:

(1)  requests in advance that notices for bids be sent to it;

(2)  agrees in writing to pay the actual cost of mailing the notice; and

(3)  certifies that it circulates notices for bids to the construction trade in general.

(d)  The governmental entity shall mail a notice required under Subsection (c) on or before the date the first newspaper advertisement under this section is published.

(e)  In a county with a population of 3.3 million or more, the county and any district or authority created under Article XVI, Section 59, of the Texas Constitution of which the governing body is the commissioners court may require that a minimum of 25 percent of the work be performed by the bidder and, notwithstanding any other law to the contrary, may establish financial criteria for the surety companies that provide payment and performance bonds.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1989, 71st Leg., ch. 1019, Sec. 2, eff. Aug. 28, 1989; Acts 2001, 77th Leg., ch. 669, Sec. 82, eff. Sept. 1, 2001.



Section  271.026.  Opening Of Bids.

(a) Bids may be opened only by the governing body of the governmental entity at a public meeting or by an officer or employee of the governmental entity at or in an office of the governmental entity. A bid that has been opened may not be changed for the purpose of correcting an error in the bid price.

(b)  This subchapter does not change the common law right of a bidder to withdraw a bid due to a material mistake in the bid.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.



Section  271.027.  Award Of Contract.

(a) The governmental entity is entitled to reject any and all bids.

(b)  The contract must be awarded to the lowest responsible bidder, but the contract may not be awarded to a bidder who is not the lowest bidder unless before the award each lower bidder is given notice of the proposed award and is given an opportunity to appear before the governing body of the governmental entity or the designated representative of the governing body and present evidence concerning the bidder's responsibility.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.



Section  271.0275.  Safety Record Of Bidder Considered.

In determining who is a responsible bidder, the governmental entity may take into account the safety record of the bidder, of the firm, corporation, partnership, or institution represented by the bidder, or of anyone acting for such a firm, corporation, partnership, or institution if:

(1)  the governing body of the governmental entity has adopted a written definition and criteria for accurately determining the safety record of a bidder;

(2)  the governing body has given notice to prospective bidders in the bid specifications that the safety record of a bidder may be considered in determining the responsibility of the bidder; and

(3)  the determinations are not arbitrary and capricious.

Added by Acts 1989, 71st Leg., ch. 1, Sec. 58(d), eff. Aug. 28, 1989.



Section  271.028.  Effect Of Noncompliance.

A contract awarded in violation of this subchapter is void.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.



Section  271.029.  Criminal Penalties.

(a) An officer or employee of a governmental entity commits an offense if the officer or employee intentionally or knowingly makes or authorizes separate, sequential, or component purchases to avoid the competitive bidding requirements of the statute that requires a contract described by Section 271.024 to be awarded on the basis of competitive bids. An offense under this subsection is a Class B misdemeanor.

(b)  An officer or employee of a governmental entity commits an offense if the officer or employee intentionally or knowingly violates the competitive bidding requirements of the statute that requires a contract described by Section 271.024 to be awarded on the basis of competitive bids, other than by conduct described by Subsection (a). An offense under this subsection is a Class B misdemeanor.

(c)  An officer or employee of a governmental entity commits an offense if the officer or employee intentionally or knowingly violates this subchapter, other than by conduct described by Subsection (a) or (b). An offense under this subsection is a Class C misdemeanor.

Added by Acts 1989, 71st Leg., ch. 1250, Sec. 15, eff. Sept. 1, 1989.



Section  271.030.  Removal; Ineligibility.

(a) The final conviction of an officer or employee of a governmental entity for an offense under Section 271.029(a) or (b) results in the immediate removal from office or employment of that person.

(b)  For four years after the date of the final conviction, the removed officer or employee is ineligible:

(1)  to be a candidate for or to be appointed or elected to a public office in this state;

(2)  to be employed by the governmental entity with which the person served when the offense occurred; and

(3)  to receive any compensation through a contract with that governmental entity.

(c)  This section does not prohibit the payment of retirement or workers' compensation benefits to the removed officer or employee.

Added by Acts 1989, 71st Leg., ch. 1250, Sec. 16, eff. Sept. 1, 1989.



Subchapter C. Certificate Of Obligation Act

Section  271.041.  Short Title.

This subchapter may be cited as the Certificate of Obligation Act of 1971.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.



Section  271.042.  Purpose; Conflict.

(a) It is the purpose of this subchapter to provide:

(1)  a procedure for certain financing that is an alternative to the more cumbersome procedure under Chapter 252; and

(2)  a new class of securities to be issued and delivered within the financial capabilities of an issuer on compliance with the procedures prescribed by this subchapter.

(b)  If there is a conflict between a provision of this subchapter and a provision of Chapter 252, an issuer may use either provision, and it is not necessary for the governing body to designate the law under which action is being taken.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1999, 76th Leg., ch. 1064, Sec. 39, eff. Sept. 1, 1999.



Section  271.043.  Definitions.

In this subchapter:

(1)  "Bond funds" means money received from the sale of bonds by the issuer.

(2)  "Certificate" means a certificate of obligation authorized to be issued under this subchapter.

(3)  "Component purchases" means purchases of the component parts of an item that in normal purchasing practices would be purchased in one purchase.

(4)  "Contractual obligation" means a contract entered into by an issuer through its governing body and executed under Section 271.054 or 271.056.

(5)  "Current funds" means money in the treasury of the issuer, taxes in the process of collection during the current budget year of the issuer, and all other revenues anticipated with reasonable certainty during the current budget year of the issuer.

(6)  "Governing body" means the board, council, commission, court, or other body or group authorized to issue bonds for or on behalf of an issuer.

(7)  "Issuer" means a municipality, county, or hospital district established under Chapter 281, Health and Safety Code.

(8)  "Separate purchases" means purchases, made separately, of items that in normal purchasing practices would be purchased in one purchase.

(9)  "Sequential purchases" means purchases, made over a period, of items that in normal purchasing practices would be purchased in one purchase.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1989, 71st Leg., ch. 1250, Sec. 17, eff. Sept. 1, 1989; Acts 2003, 78th Leg., ch. 47, Sec. 5, eff. Sept. 1, 2003.



Section  271.044.

  

Subchapter

AVAILABLE TO CERTAIN MUNICIPALITIES. (a) A municipality may use this subchapter only if the municipality:

(1)  is incorporated under the home-rule amendment to the constitution (Article XI, Section 5, of the Texas Constitution); or

(2)  is incorporated under a general or special law and the municipality has the authority to levy an ad valorem tax of not less than $1.50 on each $100 valuation of taxable property in the municipality.

(b)  A home-rule municipality may use this subchapter regardless of any provision in the municipality's charter to the contrary.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.



Section  271.045.  Purposes For Which Certificates May Be Authorized.

(a) The governing body of an issuer may authorize certificates to pay a contractual obligation to be incurred for the:

(1)  construction of any public work;

(2)  purchase of materials, supplies, equipment, machinery, buildings, land, and rights-of-way for authorized needs and purposes; or

(3)  payment of contractual obligations for professional services, including services provided by tax appraisers, engineers, architects, attorneys, map makers, auditors, financial advisors, and fiscal agents.

(b)  If necessary because of change orders, certificates may be authorized in an amount not to exceed 25 percent of a contractual obligation incurred for the construction of public works, but certificates may be delivered only in the amount necessary to discharge contractual obligations.

(c)  The governing body of a municipality may issue certificates of obligation to pay all or part of a municipality's obligations incurred by contract for interests in and rights to water or sewer treatment capacity in connection with a water supply and transmission project or sewer treatment or collection project to be constructed in whole or in part on behalf of the municipality by another governmental entity or political subdivision pursuant to a written agreement expressly authorized under Section 552.014 of this code or Section 791.026, Government Code.

(d)  In exercising its authority to issue certificates of obligation for the purposes specified in Subsection (c), the municipality must limit the principal amount of certificates to be issued for the purpose of funding its contractual obligations to an amount equal to (i) the aggregate of the contractual payments or the total costs allocated or attributed, under generally accepted accounting principles, to the capital costs of the project, as opposed to any maintenance or operating costs to be paid under the written agreement or (ii) the total cost of the project multiplied by the percentage of the nameplate capacity of the project acquired or conveyed by the written agreement to the municipality, whichever limitation is applicable to the contractual interests or rights being conveyed or identified in the written agreement.

(e)  Work that is directly attributable under generally accepted accounting principles to the costs of the project and that is performed by employees of the issuer may be allocated or attributed to the capital costs of the project.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1997, 75th Leg., ch. 124, Sec. 1, eff. May 19, 1997; Acts 2001, 77th Leg., ch. 402, Sec. 14, eff. Sept. 1, 2001.

Amended by:

Acts 2005, 79th Leg., Ch. 554, Sec. 1, eff. June 17, 2005.

Acts 2007, 80th Leg., R.S., Ch. 885, Sec. 3.77(4), eff. April 1, 2009.



Section  271.046.  Additional Purposes For Certificates.

(a) Certificates may be issued for the payment of contractual obligations to be incurred in:

(1)  constructing or equipping a jail;

(2)  constructing, renovating, or otherwise improving a county-owned building; or

(3)  constructing a bridge that is part of or connected to a county road or an approach to such a bridge.

(b)  Certificates issued under this section may be sold for cash, subject to the restrictions and other conditions of Section 271.050.

(c)  The provisions of this subchapter relating to advertisement for competitive bids apply to contractual obligations to be incurred for a purpose for which certificates are to be issued under this section.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1989, 71st Leg., ch. 648, Sec. 1, eff. June 14, 1989.



Section  271.0461.  Additional Purpose For Certificates: Demolition Of Dangerous Structures Or Restoration Of Historic Structures. Cer

tificates may be issued by any municipality for the payment of contractual obligations to be incurred in demolishing dangerous structures or restoring historic structures and may be sold for cash, subject to the restrictions and other conditions of Section 271.050.

Added by Acts 1989, 71st Leg., ch. 459, Sec. 1, eff. Aug. 28, 1989. Amended by Acts 1997, 75th Leg., ch. 1056, Sec. 1, eff. June 19, 1997.



Section  271.047.  Authorization Of Certificates By Ordinance Or Order; Other Provisions In Certificates. (a)

Certificates may be authorized by an ordinance adopted by the governing body of a municipality, or by an order adopted by the governing body of a county after compliance with the quorum requirements prescribed by Section 81.006.

(b)  The governing body may:

(1)  make the certificates payable at times and places determined by the governing body;

(2)  issue the certificates in forms and one or more denominations, either in coupon form or registered as to principal and interest, or both;

(3)  make the certificates contain options for redemption before scheduled maturity; and

(4)  make the certificates contain any other provisions the governing body desires.

(c)  A certificate may not mature over a period greater than 40 years from the date of the certificate and may not bear interest at a rate greater than that allowed by Chapter 1204, Government Code.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.294, eff. Sept. 1, 2001.



Section  271.048.  Claims And Accounts; Funding And Exchange.

(a) A governing body may provide that claims and accounts may, after certificates are authorized, be incurred for authorized purposes and that the claims and accounts represent an undivided interest in the certificates simultaneously authorized. The governing body may also provide for the funding or exchange of the claims and accounts for a like total principal amount of the certificates, with any amount in excess of the principal amount of the certificates delivered at one time to be paid in cash or carried forward to a subsequent exchange of claims and accounts for certificates.

(b)  The authorization of certificates and the indebtedness they evidence may occur before the execution of a contract under this subchapter.

(c)  This section does not create any exception to the competitive bidding requirements of this subchapter.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.



Section  271.049.  Notice Of Intention To Issue Certificates; Petition And Election.

(a) Regardless of the sources of payment of certificates, certificates may not be issued unless the issuer publishes notice of its intention to issue the certificates.  The notice must be published once a week for two consecutive weeks in a newspaper, as defined by Subchapter C, Chapter 2051, Government Code, that is of general circulation in the area of the issuer, with the date of the first publication to be before the 30th day before the date tentatively set for the passage of the order or ordinance authorizing the issuance of the certificates.

(b)  The notice must state:

(1)  the time and place tentatively set for the passage of the order or ordinance authorizing the issuance of the certificates;

(2)  the maximum amount and purpose of the certificates to be authorized; and

(3)  the manner in which the certificates will be paid for, whether by taxes, revenues, or a combination of the two.

(c)  If before the date tentatively set for the authorization of the issuance of the certificates or if before the authorization, the municipal secretary or clerk if the issuer is a municipality, or the county clerk if the issuer is a county, receives a petition signed by at least five percent of the qualified voters of the issuer protesting the issuance of the certificates, the issuer may not authorize the issuance of the certificates unless the issuance is approved at an election ordered, held, and conducted in the manner provided for bond elections under Chapter 1251, Government Code.

(d)  This section does not apply to certificates issued for the purposes described by Sections 271.056(1)-(4).

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1995, 74th Leg., ch. 76, Sec. 5.95(3), eff. Sept. 1, 1995; Acts 2001, 77th Leg., ch. 1420, Sec. 8.295, eff. Sept. 1, 2001; Acts 2001, 77th Leg., ch. 402, Sec. 15, eff. Sept. 1, 2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 1008, Sec. 1, eff. June 15, 2007.



Section  271.050.  Sale Of Certificates. (a)

The governing body may sell for cash any certificates authorized to be issued for one or more purposes described by Section 271.056.

(b)  The proceeds may be used only for the purposes for which the certificates were authorized and issued.  The proceeds may be used to pay for work done by employees of the issuer that are hired for the specific purpose of performing work on the project.  The proceeds may be used to pay for work done by other employees of the issuer only if the issuer incurs equivalent or greater costs to replace the normal work that would have otherwise been performed by the employees. The proceeds may not be used to reimburse the issuer for costs that are determined to be indirect costs under generally accepted accounting principles.   Any accrued interest received must be deposited in the interest and sinking fund established for the payment of the certificates.

(c)  A certified copy of the proceedings relating to the authorization of the certificates must be submitted to the attorney general and must be approved by the attorney general as having been authorized in accordance with this subchapter. The attorney general shall examine the proceedings relating to the authorization of the certificates. Subtitles A and C, Title 9, Government Code, and Chapter 618, Government Code, govern the execution, approval, registration, and validity of the certificates. After registration of the certificates by the comptroller, the certificates are incontestable for any cause.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.296, eff. Sept. 1, 2001.

Amended by:

Acts 2005, 79th Leg., Ch. 554, Sec. 2, eff. June 17, 2005.



Section  271.051.  Certificates As Investments Or As Security For Deposits.

(a) Certificates approved by the attorney general are legal and authorized investments for:

(1)  banks, savings banks, trust companies, and savings and loan associations;

(2)  insurance companies;

(3)  fiduciaries, trustees, and guardians; and

(4)  sinking funds of municipalities, counties, school districts, or other political corporations or subdivisions of the state.

(b)  Certificates approved by the attorney general are eligible to secure deposits of public funds of the state or a municipality, county, school district, or other political corporation or subdivision of the state. The certificates are sufficient security for the deposits to the extent of the face value of the certificates, if accompanied by any appurtenant unmatured interest coupons.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.



Section  271.052.  Certificates Payable From And Secured By Other Revenues.

(a) The governing body, instead of or in addition to other methods of payment provided by this subchapter, may provide that certificates will be paid from and secured by other revenues if the issuer is authorized by the state constitution or other statutes to secure or pay any kind of general or special obligation by or from those revenues.

(b)  The issuer may deliver certificates secured under this section in exchange for services or property in the same manner and with the same effect as otherwise provided by this subchapter or may sell the certificates for cash.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.



Section  271.0525.  Refinancing Certificates Issued By County.

(a) A county may not issue certificates to refinance or refund the debt evidenced by certificates issued by the county unless the county complies with the notice requirements of Sections 271.049(a) and (b) for the issuance of certificates.

(b)  If, before the date tentatively set for the authorization of refinancing certificates, the county clerk receives a petition that meets the requirements of Subsection (c) protesting the issuance of the refinancing certificates, the county may not authorize the issuance of the refinancing certificates unless the issuance is approved at an election ordered, held, and conducted in the manner provided for bond elections under Chapter 1251, Government Code.

(c)  A petition to protest the issuance of refinancing certificates under this section must be signed by a number of qualified voters, residing in the county, equal to at least five percent of the number of votes cast in that county for governor in the most recent general election at which that office was filled.

Added by Acts 1989, 71st Leg., ch. 961, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.297, eff. Sept. 1, 2001.



Section  271.053.  Certificates As Debt And Security.

Certificates are debts of the issuer within the meaning of Article XI, Sections 5 and 7, of the Texas Constitution. When delivered, certificates are "security" within the meaning of Chapter 8, Business & Commerce Code, and are general obligations of the issuer within the meaning of Subchapters A and D, Chapter 1207, Government Code.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.298, eff. Sept. 1, 2001.



Section 271.054.  Competitive Procurement Requirement.

Before the governing body of an issuer may enter into a contract requiring an expenditure by or imposing an obligation or liability on the issuer, or on a subdivision of the issuer if the issuer is a county, of more than $50,000, the governing body must submit the proposed contract to competitive procurement.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1993, 73rd Leg., ch. 757, Sec. 15, eff. Sept. 1, 1993; Acts 2001, 77th Leg., ch. 675, Sec. 1, eff. June 13, 2001.

Amended by:

Acts 2009, 81st Leg., R.S., Ch. 1266, Sec. 7, eff. June 19, 2009.



Section  271.055.  Notice To Bidders.

(a) An issuer must give notice of the time, date, and place at which the issuer will publicly open the bids on a contract for which competitive bidding is required by this subchapter and read the bids aloud. The notice must be given in accordance with Subsection (b) or in accordance with:

(1)  Chapter 252, if the issuer is a municipality;

(2)  the municipal charter of the issuer, if the issuer is a home-rule municipality; or

(3)  the County Purchasing Act (Subchapter C, Chapter 262), if the issuer is a county.

(b)  If an issuer gives notice under this subsection, the notice must:

(1)  be published once a week for two consecutive weeks in a newspaper, as defined by Subchapter C, Chapter 2051, Government Code, that is of general circulation in the area of the issuer, with the date of the first publication to be before the 14th day before the date set for the public opening of the bids and the reading of the bids aloud; and

(2)  state that plans and specifications for the work to be done or specifications for the machinery, supplies, equipment, or materials to be purchased are on file with a designated official of the issuer and may be examined without charge.

(c)  If the contract is to be let on a unit price basis, in addition to the other information required to be in the notice, the notice must specify, based on the best available information, the approximate quantities of the items needed by the issuer that are to be bid on.

(d)  An issuer may not authorize certificates unless the notice also states that:

(1)  the successful bidder must accept the certificates in payment for all or part of the contract price; or

(2)  the governing body has made provisions for the contractor to sell and assign the certificates and that each bidder is required, at the time of the receipt of the bids, to elect whether the bidder will:

(A)  accept the certificates in payment of all or part of the contract price; or

(B)  assign the certificates in accordance with the arrangements made by the governing body.

(e)  In a county with a population of 3.3 million or more, the county and any district or authority created under Article XVI, Section 59, of the Texas Constitution of which the governing body is the commissioners court may require that a minimum of 25 percent of the work be performed by the bidder and, notwithstanding any other law to the contrary, may establish financial criteria for the surety companies that provide payment and performance bonds.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1989, 71st Leg., ch. 1019, Sec. 3, eff. Aug. 28, 1989; Acts 1993, 73rd Leg., ch. 749, Sec. 6, eff. Sept. 1, 1993; Acts 1993, 73rd Leg., ch. 757, Sec. 8, eff. Sept. 1, 1993; Acts 1995, 74th Leg., ch. 76, Sec. 5.95(3), eff. Sept. 1, 1995; Acts 2001, 77th Leg., ch. 669, Sec. 83, eff. Sept. 1, 2001.



Section  271.056.  Exemptions From Advertisement Requirement.

The provisions of this subchapter relating to the advertisement for competitive bids do not apply to:

(1)  a case of public calamity if it is necessary to act promptly to relieve the necessity of the residents or to preserve the property of the issuer;

(2)  a case in which it is necessary to preserve or protect the public health of the residents of the issuer;

(3)  a case of unforeseen damage to public machinery, equipment, or other property;

(4)  a contract for personal or professional services;

(5)  work done by employees of the issuer and paid for as the work progresses;

(6)  the purchase of any land, building, existing utility system, or right-of-way for authorized needs and purposes;

(7)  expenditures for or relating to improvements in municipal water systems, sewer systems, streets, or drainage, if at least one-third of the cost of the improvements is to be paid by special assessments levied against properties to be benefitted by the improvements;

(8)  a case in which the entire contractual obligation is to be paid from bond funds or current funds or in which an advertisement for bids has previously been published in accordance with this subchapter but the current funds or bond funds are not adequate to permit the awarding of the contract and certificates are to be awarded to provide for the deficiency;

(9)  the sale of a public security, as that term is defined by Section 1204.001, Government Code;

(10)  a municipal procurement of a kind that, under Chapter 252, is not required to be made in accordance with competitive bidding procedures like those prescribed by this subchapter; or

(11)  a county contract that, under the County Purchasing Act (Subchapter C, Chapter 262), is not required to be made in accordance with competitive bidding procedures like those prescribed by this subchapter.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 2001, 77th Leg., ch. 402, Sec. 16, eff. Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1420, Sec. 8.298, eff. Sept. 1, 2001.



Section 271.0565.  Pre-bid Conference.

(a) The commissioners court of a county or the governing body of a district or authority created under Section 59, Article XVI, Texas Constitution, if the governing body is the commissioners court of the county in which the district is located, may require a principal, officer, or employee of each prospective bidder to attend a mandatory pre-bid conference conducted for the purpose of discussing contract requirements and answering questions of prospective bidders.

(b)  After a conference is conducted under Subsection (a), any additional required notice for the proposed contract may be sent by certified mail, return receipt requested, only to prospective bidders who attended the conference.  Notice under this subsection is not subject to the requirements of Section 271.055.

Added by Acts 2001, 77th Leg., ch. 255, Sec. 3, eff. May 22, 2001. Amended by Acts 2003, 78th Leg., ch. 660, Sec. 2, eff. Sept. 1, 2003.

Reenacted and amended by Acts 2005, 79th Leg., Ch. 728, Sec. 13.001, eff. September 1, 2005.



Section  271.057.  Award Of Contract.

(a) Except as provided by Subsection (b), a contract let under this subchapter for the construction of public works or the purchase of materials, equipment, supplies, or machinery and for which competitive bidding is required by this subchapter must be let to the lowest responsible bidder and, as the governing body determines, may be let on a lump-sum basis or unit price basis.

(b)  The commissioners court may condition acceptance of a bid on compliance with a requirement for attendance at a mandatory pre-bid conference under Section 271.0565.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 2001, 77th Leg., ch. 255, Sec. 4, eff. May 22, 2001.



Section  271.058.  Authority To Reject Bids.

The governing body may reject any and all bids submitted for a contract for which competitive bidding is required by this subchapter.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.



Section  271.059.  Contractor's Bonds.

If a contract is for the construction of public works and is required by this subchapter to be submitted to competitive bidding, the successful bidder must execute a good and sufficient payment bond and performance bond. The bonds must each be:

(1)  in the full amount of the contract price; and

(2)  executed, in accordance with Chapter 2253, Government Code, with a surety company authorized to do business in this state.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1995, 74th Leg., ch. 76, Sec. 5.95(17), eff. Sept. 1, 1995.



Section  271.060.  Change Orders.

(a) After performance of a construction contract begins, a governing body may approve change orders if necessary to:

(1)  make changes in plans or specifications; or

(2)  decrease or increase the quantity of work to be performed or materials, equipment, or supplies to be furnished.

(b)  The total price of a contract may not be increased by a change order unless provision has been made for the payment of the added cost by the appropriation of current funds or bond funds for that purpose, by the authorization of the issuance of certificates, or by a combination of those procedures. The original contract price may not be increased by more than 25 percent. The original price may not be decreased by more than 25 percent without the consent of the contractor.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.



Section  271.061.  Compensation On Unit Price Contracts.

If a contract is let on a unit price basis, the compensation paid to the contractor must be based on the actual quantities of items constructed or supplied.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.



Section  271.062.  Certain Contracts Not Required To Be In Writing.

A contract executed under Section 271.054 or 271.056 is not required to be in writing if the work to be performed under the contract:

(1)  is legal services;

(2)  is to be done by the regular salaried employees of the issuer; or

(3)  is to be paid for as the work progresses.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.



Section  271.063.  Unconstitutional Procedure Corrected By Resolution Of Issuer.

If a procedure used under this subchapter is held to be in violation of the state or federal constitution, an issuer by resolution may provide an alternative procedure that conforms to the constitution.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.



Section  271.064.  Criminal Penalties. (a)

An officer or employee of an issuer commits an offense if the officer or employee intentionally or knowingly makes or authorizes separate, sequential, or component purchases to avoid the competitive bidding requirements of Section 271.054. An offense under this subsection is a Class B misdemeanor.

(b)  An officer or employee of an issuer commits an offense if the officer or employee intentionally or knowingly violates Section 271.054, other than by conduct described by Subsection (a). An offense under this subsection is a Class B misdemeanor.

(c)  An officer or employee of an issuer commits an offense if the officer or employee intentionally or knowingly violates this subchapter, other than by conduct described by Subsection (a) or (b). An offense under this subsection is a Class C misdemeanor.

Added by Acts 1989, 71st Leg., ch. 1250, Sec. 18, eff. Sept. 1, 1989.



Section  271.065.  Removal; Ineligibility.

(a) The final conviction of an officer or employee of an issuer for an offense under Section 271.064(a) or (b) results in the immediate removal from office or employment of that person.

(b)  For four years after the date of the final conviction, the removed officer or employee is ineligible:

(1)  to be a candidate for or to be appointed or elected to a public office in this state;

(2)  to be employed by the issuer with which the person served when the offense occurred; and

(3)  to receive any compensation through a contract with that issuer.

(c)  This section does not prohibit the payment of retirement or workers' compensation benefits to the removed officer or employee.

Added by Acts 1989, 71st Leg., ch. 1250, Sec. 19, eff. Sept. 1, 1989.



Subchapter D. State Cooperation In Local Purchasing Programs

Section  271.081.  Definition.

In this subchapter, "local government" means a county, municipality, special district, school district, junior college district, a local workforce development board created under Section 2308.253, Government Code, or other legally constituted political subdivision of the state.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 2001, 77th Leg., ch. 1004, Sec. 4, eff. Sept. 1, 2001.



Section 271.082.  Purchasing Program.

(a) The comptroller shall establish a program by which the comptroller performs purchasing services for local governments.  The services must include:

(1)  the extension of state contract prices to participating local governments when the comptroller considers it feasible;

(2)  solicitation of bids on items desired by local governments if the solicitation is considered feasible by the comptroller and is desired by the local government; and

(3)  provision of information and technical assistance to local governments about the purchasing program.

(b)  The comptroller may charge a participating local government an amount not to exceed the actual costs incurred by the comptroller in providing purchasing services to the local government under the program.

(c)  The comptroller may adopt rules and procedures necessary to administer the purchasing program.  Before adopting a rule under this subsection, the comptroller must conduct a public hearing regarding the proposed rule regardless of whether the requirements of Section 2001.029(b), Government Code, are met.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 937, Sec. 1.103, eff. September 1, 2007.



Section  271.083.  Local Government Participation.

(a) A local government may participate in the purchasing program of the commission, including participation in purchases that use the reverse auction procedure, as defined by Section 2155.062(d), Government Code, by filing with the commission a resolution adopted by the governing body of the local government requesting that the local government be allowed to participate on a voluntary basis, and to the extent the commission deems feasible, and stating that the local government will:

(1)  designate an official to act for the local government in all matters relating to the program, including the purchase of items from the vendor under any contract, and that the governing body will direct the decisions of the representative;

(2)  be responsible for:

(A)  submitting requisitions to the commission under any contract; or

(B)  electronically sending purchase orders directly to vendors, or complying with commission procedures governing a reverse auction purchase, and electronically sending to the commission reports on actual purchases made under this paragraph that provide the information and are sent at the times required by the commission;

(3)  be responsible for making payment directly to the vendor; and

(4)  be responsible for the vendor's compliance with all conditions of delivery and quality of the purchased item.

(b)  A local government that purchases an item under a state contract or under a reverse auction procedure, as defined by Section 2155.062(d), Government Code, sponsored by the commission satisfies any state law requiring the local government to seek competitive bids for the purchase of the item.

(c)  Repealed by Acts 2009, 81st Leg., R.S., Ch. 393, Sec. 3.07(2), eff. September 1, 2009.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1991, 72nd Leg., ch. 428, Sec. 1, eff. Aug. 26, 1991; Acts 1995, 74th Leg., ch. 746, Sec. 6, eff. Aug. 28, 1995; Acts 1997, 75th Leg., ch. 494, Sec. 5, eff. Sept. 1, 1997; Acts 2001, 77th Leg., ch. 436, Sec. 5, eff. May 28, 2001.

Amended by:

Acts 2009, 81st Leg., R.S., Ch. 393, Sec. 3.07(2), eff. September 1, 2009.



Subchapter E. State Intercept To Increase Credit Rating

Section  271.091.  Definitions.

In this subchapter:

(1)  "Local government" means a municipality, county, or hospital district of the State of Texas.

(2)  "Payment" means the local sales and use tax authorized by the Municipal Sales and Use Tax Act (Chapter 321, Tax Code), the County Sales and Use Tax Act (Chapter 323, Tax Code), and Subchapter E, Chapter 285, Health and Safety Code.

(3)  "Paying agent" means the financial institution that is designated by a local government as its agent for the payment of the principal of and interest on the obligation.

(4)  "Obligation" means bonds, notes, certificates of obligation, and other obligations authorized to be issued by the local government.

(5)  "Agreement" means the document referred to in Section 271.092 and Section 271.093.

(6)  "Board" means the Bond Review Board.

(7)  "Comptroller" means the comptroller of public accounts.

Added by Acts 1993, 73rd Leg., ch. 827, Sec. 1, eff. Aug. 30, 1993. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 8.299, eff. Sept. 1, 2001.



Section  271.092.  Agreement With Texas Bond Review Board And Comptroller.

Prior to the issuance of any obligation, the governing body of any local government may notify the board of the proposed issuance of an obligation and enter into an agreement with the board to authorize and direct the comptroller to withhold from such local government sufficient money from any payment to which such local government may be entitled and apply so much as shall be necessary to pay the principal of and interest on such obligation then due and to continue withholding additional payments until an amount sufficient to satisfy the amount then due has been met.

Added by Acts 1993, 73rd Leg., ch. 827, Sec. 1, eff. Aug. 30, 1993.



Section  271.093.  Form Of Agreement; Conditions.

(a) The agreement shall set forth the following:

(1)  the proposed date of issuance of the obligation and the name and series of the proposed obligation;

(2)  each payment date with respect to the obligation and the principal of and interest on the obligation coming due on each such date; and

(3)  the name and address of the financial institution serving as paying agent for the obligation to whom any payment by the comptroller should be made.

(b)  This subchapter does not require or permit the state to make an appropriation to any local government and shall not be construed as creating an indebtedness of the state. Any agreement made pursuant to this subchapter shall contain a statement to that effect.

(c)  The agreement terminates at the time the final payment of the principal of and interest on the obligation is made or the obligation is refunded.

Added by Acts 1993, 73rd Leg., ch. 827, Sec. 1, eff. Aug. 30, 1993.



Section  271.094.  Notice, Deposit Of Debt Service, Authorization, And Transmittal.

(a) If a local government enters into an agreement with the board under Section 271.092, the board on notification from the local government, the custodian bank, or the paying agent for the local government that the local government is unable or has failed to pay amounts as required by the agreement or to pay principal of or interest on the obligation when due, shall notify the comptroller, who shall withhold sufficient money from any payment to which such local government may be entitled and apply so much thereof as shall be necessary to pay the amounts then due as provided in this section.

(b)  The local government may in the agreement agree to make monthly deposits of one-sixth of the semiannual debt service requirement, or such other amount at such other times as specified in the agreement, into an interest and sinking fund in a custodian bank. If a bank agrees to serve as custodian for the interest and sinking fund, it shall be the duty of the bank to notify the board if the agreed upon amount of funds is not deposited each month or other specified time on a timely basis as specified in the agreement.

(c)  On receiving notification and direction from the board, the comptroller is authorized to withhold from any payment an amount equal to the amount to have been deposited by the local government pursuant to the agreement. The comptroller shall continue to withhold payments until the required amounts have been deposited in the interest and sinking fund with the custodian bank or with the paying agent. If the required amounts have not been deposited at the time interest on or principal of the obligation of the local government is required to be deposited pursuant to the agreement, the comptroller shall transmit, from payments withheld, the appropriate amount to the custodian bank or to the paying agent, as directed by the board.

(d)  The board shall cause a copy of any notice given pursuant to this section to be promptly given to the local government.

Added by Acts 1993, 73rd Leg., ch. 827, Sec. 1, eff. Aug. 30, 1993.



Section  271.095.  Right To Pledge Payments.

(a) The local government may pledge payments to secure any obligation only if the amount of payments received by the local government in the fiscal year of the state preceding the proposed issuance equals or exceeds the amount required in each year to pay the sum of an amount equal to two times (i) the maximum annual principal and interest requirements for the obligation, and (ii) the maximum annual principal and interest requirements on any additional obligation for which payments have been pledged. The local government shall provide evidence that these requirements are met.

(b)  A pledge of payments pursuant to this subchapter is a first priority for application of payments and the comptroller shall apply such payments as provided by this subchapter prior to applying such payments pursuant to any other authorization to withhold or intercept such payments.

(c)  While obligations which are the subject of an agreement remain outstanding, the local government may not repeal the sales tax or reduce the rate of the sales tax below the rate that would provide the amount required by Subsection (a), except as provided by this subsection. If at an election duly held in accordance with law a majority of the qualified voters approve the repeal of the sales tax, the local government shall, at the earliest practicable time, refund or defease the obligations, and after such defeasance or refunding the repeal shall become effective in accordance with law. If the qualified voters vote to reduce the rate of the sales tax, if such is provided for by law, below that which is required to provide the amount required by Subsection (a), the local government shall, at the earliest practicable time, refund or defease the obligations, and after such defeasance or refunding the reduction in rate shall become effective in accordance with law.

Added by Acts 1993, 73rd Leg., ch. 827, Sec. 1, eff. Aug. 30, 1993.



Section  271.096.  Administration, Rules, Fees.

The board shall administer the implementation of this subchapter and may adopt rules and set fees necessary for its administration.

Added by Acts 1993, 73rd Leg., ch. 827, Sec. 1, eff. Aug. 30, 1993.



Subchapter F. Cooperative Purchasing Program

Section  271.101.  Definitions.

In this subchapter:

(1)  "Local cooperative organization" means an organization of governments established to provide local governments access to contracts with vendors for the purchase of materials, supplies, services, or equipment.

(2)  "Local government" means a county, municipality, special district, school district, junior college district, regional planning commission, or other political subdivision of the state.

Added by Acts 1995, 74th Leg., ch. 746, Sec. 7, eff. Aug. 28, 1995.



Section  271.102.  Cooperative Purchasing Program Participation.

(a) A local government may participate in a cooperative purchasing program with another local government or a local cooperative organization.

(b)  A local government that is participating in a cooperative purchasing program may sign an agreement with another participating local government or a local cooperative organization stating that the signing local government will:

(1)  designate a person to act under the direction of, and on behalf of, that local government in all matters relating to the program;

(2)  make payments to another participating local government or a local cooperative organization or directly to a vendor under a contract made under this subchapter, as provided in the agreement between the participating local governments or between a local government and a local cooperative organization; and

(3)  be responsible for a vendor's compliance with provisions relating to the quality of items and terms of delivery, to the extent provided in the agreement between the participating local governments or between a local government and a local cooperative organization.

(c)  A local government that purchases goods or services under this subchapter satisfies any state law requiring the local government to seek competitive bids for the purchase of the goods or services.

Added by Acts 1995, 74th Leg., ch. 746, Sec. 7, eff. Aug. 28, 1995.



Subchapter G. Purchases From Federal Schedule Sources Of Supply

Section  271.103.  Federal Supply Schedule Sources.

(a) A local government may purchase goods or services available under Federal supply schedules of the United States General Services Administration to the extent permitted by federal law.

(b)  A local government that purchases goods or services under this subchapter satisfies any state law requiring the local government to seek competitive bids for the purchase of the goods or services.

Added by Acts 1997, 75th Leg., ch. 826, Sec. 2, eff. June 18, 1997.



Subchapter H. Alternative Project Delivery Methods For Certain Projects

Section  271.111.  Definitions.

In this subchapter:

(1)  "Architect" means an individual registered as an architect under Chapter 1051, Occupations Code.

(2)  "Contractor" in the context of a contract for the construction, rehabilitation, alteration, or repair of a facility means a sole proprietorship, partnership, corporation, or other legal entity that assumes the risk for constructing, rehabilitating, altering, or repairing all or part of the facility at the contracted price.

(3)  "Design-build contract" means a single contract with a design-build firm for the design and construction of a facility.

(4)  "Design-build firm" means a partnership, corporation, or other legal entity or team that includes an engineer or architect and builder qualified to engage in building construction in Texas.

(5)  "Design criteria package" means a set of documents that provides sufficient information to permit a design-build firm to prepare a response to a governmental entity's request for qualifications and any additional information requested, including criteria for selection. The design criteria package must specify criteria the governmental entity considers necessary to describe the project and may include, as appropriate, the legal description of the site, survey information concerning the site, interior space requirements, special material requirements, material quality standards, conceptual criteria for the project, special equipment requirements, cost or budget estimates, time schedules, quality assurance and quality control requirements, site development requirements, applicable codes and ordinances, provisions for utilities, parking requirements, or any other requirement, as applicable.

(6)  "Engineer" means an individual licensed as an engineer under Chapter 1001, Occupations Code.

(7)  "Facility" means, unless otherwise specifically provided, buildings the design and construction of which are governed by accepted building codes.  The term does not include:

(A)  highways, roads, streets, bridges, utilities, water supply projects, water plants, wastewater plants, water and wastewater distribution or conveyance facilities, wharves, docks, airport runways and taxiways, drainage projects, or related types of projects associated with civil engineering construction;  or

(B)  buildings or structures that are incidental to projects that are primarily civil engineering construction projects.

(8)  "Fee" in the context of a contract for the construction, rehabilitation, alteration, or repair of a facility means the payment a construction manager receives for its overhead and profit in performing its services.

(9)  "General conditions" in the context of a contract for the construction, rehabilitation, alteration, or repair of a facility means on-site management, administrative personnel, insurance, bonds, equipment, utilities, and incidental work, including minor field labor and materials.

 

Text of subdivision as amended by Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 2

 

(10)  "Governmental entity" means a municipality, county, hospital district, water district or authority created under Section 59, Article XVI, Texas Constitution, including a river authority or conservation and reclamation district, or a defense base development authority established under Chapter 379B.

 

Text of subdivision as amended by Acts 2007, 80th Leg., R.S., Ch. 1272, Sec. 6

 

(10)  "Governmental entity" means a municipality, county, river authority, conservation and reclamation district created pursuant to Section 59, Article XVI, Texas Constitution, and located in a county with a population of more than 250,000, or defense base development authority established under Chapter 379B.

Added by Acts 2001, 77th Leg., ch. 1409, Sec. 5, eff. Sept. 1, 2001. Amended by Acts 2003, 78th Leg., ch. 877, Sec. 1, eff. Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1276, Sec. 14A.791, eff. Sept. 1, 2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 2, eff. September 1, 2007.

Acts 2007, 80th Leg., R.S., Ch. 1272, Sec. 6, eff. September 1, 2007.



Section  271.112.  Applicability; Other Law.

(a) Any provision in the charter of a home-rule municipality or regulation, if any, of a county, river authority, conservation and reclamation district created pursuant to Section 59, Article XVI, Texas Constitution, and located in a county with a population of more than 250,000, or defense base development authority that requires the use of competitive bidding or competitive sealed proposals or that prescribes procurement procedures and that is in conflict with this subchapter controls over this subchapter unless the governing body of the governmental entity elects to have this subchapter supersede the charter or regulation.

(b)  The purchasing requirements of Section 361.426, Health and Safety Code, apply to purchases by a governmental entity made under this subchapter.

(c)  Except as provided by this section, to the extent of any conflict, this subchapter prevails over any other law relating to the purchasing of goods and services except a law relating to contracting with historically underutilized businesses.

(d)  For a contract entered into by a municipality, river authority, conservation and reclamation district created pursuant to Section 59, Article XVI, Texas Constitution, and located in a county with a population of more than 250,000, or defense base development authority under any of the methods provided by this subchapter, the municipality, river authority, conservation and reclamation district created pursuant to Section 59, Article XVI, Texas Constitution, and located in a county with a population of more than 250,000, or defense base development authority shall publish notice of the time and place the bids or proposals, or the responses to a request for qualifications, will be received and opened.  The notice must be published in a newspaper of general circulation in the county in which the defense base development authority's or municipality's central administrative office is located or the county in which the greatest amount of the river authority's or such conservation and reclamation district's territory is located once each week for at least two weeks before the deadline for receiving bids, proposals, or responses.  If there is not a newspaper of general circulation in that county, the notice shall be published in a newspaper of general circulation in the county nearest the county seat of the county in which the defense base development authority's or municipality's central administrative office is located or the county in which the greatest amount of the river authority's or such conservation and reclamation district's territory is located.  In a two-step procurement process, the time and place the second step bids, proposals, or responses will be received are not required to be published separately.

(e)  For a contract entered into by a county under any of the methods provided by this subchapter, the county shall publish notice of the time and place the bids or proposals, or the responses to a request for qualifications, will be received and opened. The notice must be published in a newspaper of general circulation in the county once each week for at least two weeks before the deadline for receiving bids, proposals, or responses. If there is not a newspaper of general circulation in the county, the notice shall be:

(1)  posted at the courthouse door of the county; and

(2)  published in a newspaper of general circulation in the nearest county.

(f)  A contract entered into or an arrangement made in violation of this subchapter is contrary to public policy and is void.  A court may enjoin performance of a contract made in violation of this subchapter.  A county attorney, a district attorney, a criminal district attorney, a resident of a county that enters into a contract under this subchapter or of a county in which a municipality, river authority, or conservation and reclamation district created pursuant to Section 59, Article XVI, Texas Constitution, and located in a county with a population of more than 250,000 that enters into a contract under this subchapter is located, or any interested party may bring an action for an injunction.  A party who prevails in an action brought under this subsection is entitled to reasonable attorney's fees as approved by the court.

(g)  If the contract for a facility involves the use of state or federal highway funds, the purchasing requirements of the appropriate state or federal funding entity apply, unless otherwise waived by the appropriate state or federal funding entity.

Added by Acts 2001, 77th Leg., ch. 1409, Sec. 5, eff. Sept. 1, 2001. Amended by Acts 2003, 78th Leg., ch. 877, Sec. 2, eff. Sept. 1, 2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 7, eff. September 1, 2007.

Acts 2007, 80th Leg., R.S., Ch. 1272, Sec. 7, eff. September 1, 2007.



Section  271.113.  Procurement Procedures.

(a) In entering into a contract for the construction of a facility, a governmental entity may use any of the following methods that provides the best value for the governmental entity:

(1)  competitive bidding;

(2)  competitive sealed proposals for construction services;

(3)  a design-build contract;

(4)  a contract to construct, rehabilitate, alter, or repair facilities that involves using a construction manager; or

(5)  a job order contract for the minor repair, rehabilitation, or alteration of a facility.

(b)  Except as provided by this subchapter, in determining to whom to award a contract, the governmental entity may consider:

(1)  the purchase price;

(2)  the reputation of the vendor and of the vendor's goods or services;

(3)  the quality of the vendor's goods or services;

(4)  the extent to which the goods or services meet the governmental entity's needs;

(5)  the vendor's past relationship with the governmental entity;

(6)  the impact on the ability of the governmental entity to comply with rules relating to historically underutilized businesses;

(7)  the total long-term cost to the governmental entity to acquire the vendor's goods or services; and

(8)  any other relevant factor specifically listed in the request for bids or proposals.

Added by Acts 2001, 77th Leg., ch. 1409, Sec. 5, eff. Sept. 1, 2001.



Section  271.114.  Evaluation Of Bids And Proposals For Construction Services.

(a) The governing body of a governmental entity that is considering a construction contract using a method specified by Section 271.113(a) other than competitive bidding must, before advertising, determine which method provides the best value for the governmental entity. The governing body may, as appropriate, delegate its authority under this section to a designated representative.

(b)  The governmental entity shall base its selection among offerors on criteria authorized to be used under Section 271.113(b). The governmental entity shall publish in the request for bids, proposals, or qualifications all the criteria that will be used to evaluate the offerors and the relative weights given to the criteria.

(c)  The governmental entity shall document the basis of its selection and shall make the evaluations public not later than the seventh day after the date the contract is awarded.

Added by Acts 2001, 77th Leg., ch. 1409, Sec. 5, eff. Sept. 1, 2001.



Section  271.115.  Selecting Contractor For Construction Services Through Competitive Bidding.

(a) Except to the extent prohibited by other law and to the extent consistent with this subchapter, a governmental entity may use competitive bidding to select a contractor to perform construction, rehabilitation, alteration, or repair services for a facility.

(b)  Except as otherwise specifically provided by this subsection, Subchapter B does not apply to a competitive bidding process under this section. Sections 271.026, 271.027(a), and 271.0275 apply to a competitive bidding process under this section.

(c)  A governmental entity shall award a competitively bid contract at the bid amount to the bidder offering the best value to the governmental entity according to the selection criteria that were established by the governmental entity. The selection criteria may include the factors listed in Section 271.113(b).

Added by Acts 2001, 77th Leg., ch. 1409, Sec. 5, eff. Sept. 1, 2001.



Section  271.116.  Selecting Contractor For Construction Services Through Competitive Sealed Proposals.

(a) In selecting a contractor through competitive sealed proposals for construction, rehabilitation, alteration, or repair services for a facility or for construction of a project to which Section 252.043(d-1) applies, a governmental entity shall follow the procedures prescribed by this section.

(a-1)  In this section "facility" means an improvement to real property.

(b)  The governmental entity shall select or designate an engineer or architect to prepare construction documents for the project. The selected or designated engineer or architect has full responsibility for complying with Chapter 1001 or 1051, Occupations Code, as applicable. If the engineer or architect is not a full-time employee of the governmental entity, the governmental entity shall select the engineer or architect on the basis of demonstrated competence and qualifications as provided by Section 2254.004, Government Code.

(c)  The governmental entity shall provide or contract for, independently of the contractor, the inspection services, the testing of construction materials engineering, and the verification testing services necessary for acceptance of the facility or project by the governmental entity.  The governmental entity shall select those services for which it contracts in accordance with Section 2254.004, Government Code, and shall identify them in the request for proposals.

(d)  The governmental entity shall prepare a request for competitive sealed proposals that includes construction documents, selection criteria, estimated budget, project scope, schedule, and other information that contractors may require to respond to the request. The governmental entity shall state in the request for proposals the selection criteria that will be used in selecting the successful offeror.

(e)  The governmental entity shall receive, publicly open, and read aloud the names of the offerors and, if any are required to be stated, all prices stated in each proposal. Not later than the 45th day after the date of opening the proposals, the governmental entity shall evaluate and rank each proposal submitted in relation to the published selection criteria.

(f)  The governmental entity shall select the offeror that offers the best value for the governmental entity based on the published selection criteria and on its ranking evaluation. The governmental entity shall first attempt to negotiate a contract with the selected offeror. The governmental entity and its engineer or architect may discuss with the selected offeror options for a scope or time modification and any price change associated with the modification. If the governmental entity is unable to negotiate a contract with the selected offeror, the governmental entity shall, formally and in writing, end negotiations with that offeror and proceed to the next offeror in the order of the selection ranking until a contract is reached or all proposals are rejected.

(g)  In determining best value for the governmental entity, the governmental entity is not restricted to considering price alone, but may consider any other factor stated in the selection criteria.

Added by Acts 2001, 77th Leg., ch. 1409, Sec. 5, eff. Sept. 1, 2001. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.792, eff. Sept. 1, 2003.

Amended by:

Acts 2005, 79th Leg., Ch. 739, Sec. 2, eff. September 1, 2005.

Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 3, eff. September 1, 2007.



Section  271.117.  Contracts For Facilities: Construction Manager-agent.

(a) A governmental entity may use the construction manager-agent method for the construction, rehabilitation, alteration, or repair of a facility. In using that method and in entering into a contract for the services of a construction manager-agent, a governmental entity shall follow the procedures prescribed by this section.

(b)  A construction manager-agent is a sole proprietorship, partnership, corporation, or other legal entity that provides consultation to the governmental entity regarding construction, rehabilitation, alteration, or repair of the facility. A governmental entity using the construction manager-agent method may, under the contract between the governmental entity and the construction manager-agent, require the construction manager-agent to provide administrative personnel, equipment necessary to perform duties under this section, and on-site management and other services specified in the contract. A construction manager-agent represents the governmental entity in a fiduciary capacity.

(c)  Before or concurrently with selecting a construction manager-agent, the governmental entity shall select or designate an engineer or architect who shall prepare the construction documents for the project and who has full responsibility for complying with Chapter 1001 or 1051, Occupations Code, as applicable. If the engineer or architect is not a full-time employee of the governmental entity, the governmental entity shall select the engineer or architect on the basis of demonstrated competence and qualifications as provided by Section 2254.004, Government Code. The governmental entity's engineer or architect may not serve, alone or in combination with another person, as the construction manager-agent unless the engineer or architect is hired to serve as the construction manager-agent under a separate or concurrent procurement conducted in accordance with this subchapter. This subsection does not prohibit the governmental entity's engineer or architect from providing customary construction phase services under the engineer's or architect's original professional service agreement in accordance with applicable licensing laws.

(d)  A governmental entity shall select a construction manager-agent on the basis of demonstrated competence and qualifications in the same manner as provided for the selection of engineers or architects under Section 2254.004, Government Code, except that notice must be published as provided by Section 271.112(d).

(e)  A governmental entity using the construction manager-agent method shall procure, in accordance with applicable law, a general contractor, trade contractors, or subcontractors who will serve as the prime contractor for their specific portion of the work.

(f)  The governmental entity or the construction manager-agent shall procure in accordance with Section 2254.004, Government Code, all of the testing of construction materials engineering, the inspection services, and the verification testing services necessary for acceptance of the facility by the governmental entity.

Added by Acts 2001, 77th Leg., ch. 1409, Sec. 5, eff. Sept. 1, 2001. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.793, eff. Sept. 1, 2003.



Section  271.118.  Contracts For Facilities: Construction Manager-at-risk.

(a) A governmental entity may use the construction manager-at-risk method for the construction, rehabilitation, alteration, or repair of a facility. In using that method and in entering into a contract for the services of a construction manager-at-risk, a governmental entity shall follow the procedures prescribed by this section.

(a-1)  In this section "facility" means an improvement to real property.

(b)  A construction manager-at-risk is a sole proprietorship, partnership, corporation, or other legal entity that assumes the risk for construction, rehabilitation, alteration, or repair of a facility at the contracted price as a general contractor and provides consultation to the governmental entity regarding construction during and after the design of the facility.

(c)  Before or concurrently with selecting a construction manager-at-risk, the governmental entity shall select or designate an engineer or architect who shall prepare the construction documents for the project and who has full responsibility for complying with Chapter 1001 or 1051, Occupations Code, as applicable. If the engineer or architect is not a full-time employee of the governmental entity, the governmental entity shall select the engineer or architect on the basis of demonstrated competence and qualifications as provided by Section 2254.004, Government Code. The governmental entity's engineer, architect, or construction manager-agent for a project may not serve, alone or in combination with another, as the construction manager-at-risk unless the engineer or architect is hired to serve as the construction manager-at-risk under a separate or concurrent procurement conducted in accordance with this subchapter.

(d)  The governmental entity shall provide or contract for, independently of the construction manager-at-risk, the inspection services, the testing of construction materials engineering, and the verification testing services necessary for acceptance of the facility by the governmental entity. The governmental entity shall select those services for which it contracts in accordance with Section 2254.004, Government Code.

(e)  The governmental entity shall select the construction manager-at-risk in either a one-step or two-step process. The governmental entity shall prepare a request for proposals, in the case of a one-step process, or a request for qualifications, in the case of a two-step process, that includes general information on the project site, project scope, schedule, selection criteria, estimated budget, and the time and place for receipt of proposals or qualifications, as applicable, and other information that may assist the governmental entity in its selection of a construction manager-at-risk. The governmental entity shall state the selection criteria in the request for proposals or qualifications, as applicable. The selection criteria may include the offeror's experience, past performance, safety record, proposed personnel and methodology, and other appropriate factors that demonstrate the capability of the construction manager-at-risk. If a one-step process is used, the governmental entity may request, as part of the offeror's proposal, proposed fees and prices for fulfilling the general conditions. If a two-step process is used, the governmental entity may not request fees or prices in step one. In step two, the governmental entity may request that five or fewer offerors, selected solely on the basis of qualifications, provide additional information, including the construction manager-at-risk's proposed fee and its price for fulfilling the general conditions.

(f)  At each step, the governmental entity shall receive, publicly open, and read aloud the names of the offerors. At the appropriate step, the governmental entity shall also read aloud the fees and prices, if any, stated in each proposal as the proposal is opened. Not later than the 45th day after the date of opening the proposals, the governmental entity shall evaluate and rank each proposal submitted in relation to the criteria set forth in the request for proposals.

(g)  The governmental entity shall select the offeror that submits the proposal that offers the best value for the governmental entity based on the published selection criteria and on its ranking evaluation. The governmental entity shall first attempt to negotiate a contract with the selected offeror. If the governmental entity is unable to negotiate a satisfactory contract with the selected offeror, the governmental entity shall, formally and in writing, end negotiations with that offeror and proceed to negotiate with the next offeror in the order of the selection ranking until a contract is reached or negotiations with all ranked offerors end.

(h)  A construction manager-at-risk shall publicly advertise, as prescribed for a governmental entity under Section 271.025, and receive bids or proposals from trade contractors or subcontractors for the performance of all major elements of the work other than the minor work that may be included in the general conditions. A construction manager-at-risk may seek to perform portions of the work itself if the construction manager-at-risk submits its bid or proposal for those portions of the work in the same manner as all other trade contractors or subcontractors and if the governmental entity determines that the construction manager-at-risk's bid or proposal provides the best value for the governmental entity.

(i)  The construction manager-at-risk and the governmental entity or its representative shall review all trade contractor or subcontractor bids or proposals in a manner that does not disclose the contents of the bid or proposal during the selection process to a person not employed by the construction manager-at-risk, engineer, architect, or governmental entity. All bids or proposals shall be made public after the award of the contract or not later than the seventh day after the date of final selection of bids or proposals, whichever is later.

(j)  If the construction manager-at-risk reviews, evaluates, and recommends to the governmental entity a bid or proposal from a trade contractor or subcontractor but the governmental entity requires another bid or proposal to be accepted, the governmental entity shall compensate the construction manager-at-risk by a change in price, time, or guaranteed maximum cost for any additional cost and risk that the construction manager-at-risk may incur because of the governmental entity's requirement that another bid or proposal be accepted.

(k)  If a selected trade contractor or subcontractor defaults in the performance of its work or fails to execute a subcontract after being selected in accordance with this section, the construction manager-at-risk may, without advertising, fulfill the contract requirements itself or select a replacement trade contractor or subcontractor to fulfill the contract requirements.

(l)  If a fixed contract amount or guaranteed maximum price has not been determined at the time the contract is awarded, the penal sums of the performance and payment bonds delivered to the governmental entity must each be in an amount equal to the project budget, as specified in the request for qualifications. The construction manager shall deliver the bonds not later than the 10th day after the date the construction manager executes the contract unless the construction manager furnishes a bid bond or other financial security acceptable to the governmental entity to ensure that the construction manager will furnish the required performance and payment bonds when a guaranteed maximum price is established.

Added by Acts 2001, 77th Leg., ch. 1409, Sec. 5, eff. Sept. 1, 2001. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.794, eff. Sept. 1, 2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 4, eff. September 1, 2007.



Section  271.119.  Design-build Contracts For Facilities.

(a) A governmental entity may use the design-build method for the construction, rehabilitation, alteration, or repair of a facility. In using that method and in entering into a contract for the services of a design-build firm, the contracting governmental entity and the design-build firm shall follow the procedures provided by this section.

(b)  The governmental entity shall select or designate an engineer or architect independent of the design-build firm to act as its representative for the duration of the work on the facility. If the governmental entity's engineer or architect is not a full-time employee of the governmental entity, the governmental entity shall select the engineer or architect on the basis of demonstrated competence and qualifications as provided by Section 2254.004, Government Code.

(c)  The governmental entity shall prepare a request for qualifications that includes general information on the project site, project scope, budget, special systems, selection criteria, and other information that may assist potential design-build firms in submitting proposals for the project. The governmental entity shall also prepare a design criteria package that includes more detailed information on the project. If the preparation of the design criteria package requires engineering or architectural services that constitute the practice of engineering within the meaning of Chapter 1001, Occupations Code, or the practice of architecture within the meaning of Chapter 1051, Occupations Code, those services shall be provided in accordance with the applicable law.

(d)  The governmental entity shall evaluate statements of qualifications and select a design-build firm in two phases:

(1)  In phase one, the governmental entity shall prepare a request for qualifications and evaluate each offeror's experience, technical competence, and capability to perform, the past performance of the offeror's team and members of the team, and other appropriate factors submitted by the team or firm in response to the request for qualifications, except that cost-related or price-related evaluation factors are not permitted. Each offeror must certify to the governmental entity that each engineer or architect that is a member of its team was selected based on demonstrated competence and qualifications in the manner provided by Section 2254.004, Government Code. The governmental entity shall qualify a maximum of five offerors to submit additional information and, if the governmental entity chooses, to interview for final selection.

(2)  In phase two, the governmental entity shall evaluate the information submitted by the offerors on the basis of the selection criteria stated in the request for qualifications and the results of an interview. The governmental entity may request additional information regarding demonstrated competence and qualifications, considerations of the safety and long-term durability of the project, the feasibility of implementing the project as proposed, the ability of the offeror to meet schedules, costing methodology, or other factors as appropriate. The governmental entity may not require offerors to submit detailed engineering or architectural designs as part of the proposal. The governmental entity shall rank each proposal submitted on the basis of the criteria set forth in the request for qualifications. The governmental entity shall select the design-build firm that submits the proposal offering the best value for the governmental entity on the basis of the published selection criteria and on its ranking evaluations. The governmental entity shall first attempt to negotiate a contract with the selected offeror. If the governmental entity is unable to negotiate a satisfactory contract with the selected offeror, the governmental entity shall, formally and in writing, end negotiations with that offeror and proceed to negotiate with the next offeror in the order of the selection ranking until a contract is reached or negotiations with all ranked offerors end.

(e)  Following selection of a design-build firm under Subsection (d), that firm's engineers or architects shall complete the design, submitting all design elements for review and determination of scope compliance to the governmental entity or the governmental entity's engineer or architect before or concurrently with construction.

(f)  An engineer shall have responsibility for compliance with the engineering design requirements and all other applicable requirements of Chapter 1001, Occupations Code. An architect shall have responsibility for compliance with the requirements of Chapter 1051, Occupations Code.

(g)  The governmental entity shall provide or contract for, independently of the design-build firm, the inspection services, the testing of construction materials engineering, and the verification testing services necessary for acceptance of the facility by the governmental entity. The governmental entity shall select those services for which it contracts in accordance with Section 2254.004, Government Code.

(h)  The design-build firm shall supply a signed and sealed set of construction documents for the project to the governmental entity at the conclusion of construction.

(i)  A payment or performance bond is not required for, and may not provide coverage for, the portion of a design-build contract under this section that includes design services only. If a fixed contract amount or guaranteed maximum price has not been determined at the time a design-build contract is awarded, the penal sums of the performance and payment bonds delivered to the governmental entity must each be in an amount equal to the project budget, as specified in the design criteria package. The design-build firm shall deliver the bonds not later than the 10th day after the date the design-build firm executes the contract unless the design-build firm furnishes a bid bond or other financial security acceptable to the governmental entity to ensure that the design-build firm will furnish the required performance and payment bonds when a guaranteed maximum price is established.

Added by Acts 2001, 77th Leg., ch. 1409, Sec. 5, eff. Sept. 1, 2001. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.795, eff. Sept. 1, 2003.



Section  271.120.  Job Order Contracts For Facilities Construction Or Repair.

(a) A governmental entity may award job order contracts for the minor construction, repair, rehabilitation, or alteration of a facility if the work is of a recurring nature but the delivery times are indefinite and indefinite quantities and orders are awarded substantially on the basis of predescribed and prepriced tasks.

(b)  The governmental entity may establish contractual unit prices for a job order contract by:

(1)  specifying one or more published construction unit price books and the applicable divisions or line items; or

(2)  providing a list of work items and requiring the offerors to bid or propose one or more coefficients or multipliers to be applied to the price book or work items as the price proposal.

(c)  The governmental entity shall advertise for, receive, and publicly open sealed proposals for job order contracts.

(d)  The governmental entity may require offerors to submit additional information besides rates, including experience, past performance, and proposed personnel and methodology.

(e)  The governmental entity may award job order contracts to one or more job order contractors in connection with each solicitation of bids or proposals.

(f)  An order for a job or project under the job order contract must be signed by the governmental entity's representative and the contractor. The order may be a fixed price, lump-sum contract based substantially on contractual unit pricing applied to estimated quantities or may be a unit price order based on the quantities and line times delivered.

(g)  The contractor shall provide payment and performance bonds, if required by law, based on the amount or estimated amount of any order.

(h)  The base term of a job order contract is for the period and with any renewal options that the governmental entity sets forth in the request for proposals. If the governmental entity fails to advertise that term, the base term may not exceed two years and is not renewable without further advertisement and solicitation of proposals.

(i)  If a job order contract or an order issued under the contract requires engineering or architectural services that constitute the practice of engineering within the meaning of Chapter 1001, Occupations Code, or the practice of architecture within the meaning of Chapter 1051, Occupations Code, the governmental entity shall select or designate an architect or engineer to prepare the construction documents for the facility.  If the architect or engineer is not a full-time employee of the governmental entity, the governmental entity shall select the architect or engineer on the basis of demonstrated competence and qualifications as provided by Section 2254.004, Government Code.

Added by Acts 2001, 77th Leg., ch. 1409, Sec. 5, eff. Sept. 1, 2001. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.796, eff. Sept. 1, 2003.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 5, eff. September 1, 2007.



Section  271.121.  Right To Work.

(a) This section applies to a governmental entity while the governmental entity is engaged in:

(1)  procuring goods or services;

(2)  awarding a contract; or

(3)  overseeing procurement or construction for a public work or public improvement.

(b)  Notwithstanding any other provision of this chapter, a governmental entity:

(1)  may not consider whether a vendor is a member of or has another relationship with any organization; and

(2)  shall ensure that its bid specifications and any subsequent contract or other agreement do not deny or diminish the right of a person to work because of the person's membership or other relationship status with respect to any organization.

Added by Acts 2001, 77th Leg., ch. 1409, Sec. 5, eff. Sept. 1, 2001.



Subchapter I. Adjudication Of Claims Arising Under Written

CONTRACTS WITH LOCAL GOVERNMENTAL ENTITIES


Section 271.151.  Definitions.

In this subchapter:

(1)  "Adjudication" of a claim means the bringing of a civil suit and prosecution to final judgment in county or state court and includes the bringing of an authorized arbitration proceeding and prosecution to final resolution in accordance with any mandatory procedures established in the contract subject to this subchapter for the arbitration proceedings.

(2)  "Contract subject to this subchapter" means a written contract stating the essential terms of the agreement for providing goods or services to the local governmental entity that is properly executed on behalf of the local governmental entity.

(3)  "Local governmental entity" means a political subdivision of this state, other than a county or a unit of state government, as that term is defined by Section 2260.001, Government Code, including a:

(A)  municipality;

(B)  public school district and junior college district; and

(C)  special-purpose district or authority, including any levee improvement district, drainage district, irrigation district, water improvement district, water control and improvement district, water control and preservation district, freshwater supply district, navigation district, conservation and reclamation district, soil conservation district, communication district, public health district, emergency service organization, and river authority.

Added by Acts 2005, 79th Leg., Ch. 604, Sec. 1, eff. September 1, 2005.



Section 271.152.  Waiver Of Immunity To Suit For Certain Claims.

A local governmental entity that is authorized by statute or the constitution to enter into a contract and that enters into a contract subject to this subchapter waives sovereign immunity to suit for the purpose of adjudicating a claim for breach of the contract, subject to the terms and conditions of this subchapter.

Added by Acts 2005, 79th Leg., Ch. 604, Sec. 1, eff. September 1, 2005.



Section 271.153.  Limitations On Adjudication Awards.

(a) The total amount of money awarded in an adjudication brought against a local governmental entity for breach of a contract subject to this subchapter is limited to the following:

(1)  the balance due and owed by the local governmental entity under the contract as it may have been amended, including any amount owed as compensation for the increased cost to perform the work as a direct result of owner-caused delays or acceleration;

(2)  the amount owed for change orders or additional work the contractor is directed to perform by a local governmental entity in connection with the contract;

(3)  reasonable and necessary attorney's fees that are equitable and just; and

(4)  interest as allowed by law.

(b)  Damages awarded in an adjudication brought against a local governmental entity arising under a contract subject to this subchapter may not include:

(1)  consequential damages, except as expressly allowed under Subsection (a)(1);

(2)  exemplary damages; or

(3)  damages for unabsorbed home office overhead.

Added by Acts 2005, 79th Leg., Ch. 604, Sec. 1, eff. September 1, 2005.

Amended by:

Acts 2009, 81st Leg., R.S., Ch. 1266, Sec. 8, eff. June 19, 2009.



Section 271.154.  Contractual Adjudication Procedures Enforceable.

Adjudication procedures, including requirements for serving notices or engaging in alternative dispute resolution proceedings before bringing a suit or an arbitration proceeding, that are stated in the contract subject to this subchapter or that are established by the local governmental entity and expressly incorporated into the contract or incorporated by reference are enforceable except to the extent those procedures conflict with the terms of this subchapter.

Added by Acts 2005, 79th Leg., Ch. 604, Sec. 1, eff. September 1, 2005.



Section 271.155.  No Waiver Of Other Defenses.

This subchapter does not waive a defense or a limitation on damages available to a party to a contract, other than a bar against suit based on sovereign immunity.

Added by Acts 2005, 79th Leg., Ch. 604, Sec. 1, eff. September 1, 2005.



Section 271.156.  No Waiver Of Immunity To Suit In Federal Court.

This subchapter does not waive sovereign immunity to suit in federal court.

Added by Acts 2005, 79th Leg., Ch. 604, Sec. 1, eff. September 1, 2005.



Section 271.157.  No Waiver Of Immunity To Suit For Tort Liability.

This subchapter does not waive sovereign immunity to suit for a cause of action for a negligent or intentional tort.

Added by Acts 2005, 79th Leg., Ch. 604, Sec. 1, eff. September 1, 2005.



Section 271.158.  No Grant Of Immunity To Suit.

Nothing in this subchapter shall constitute a grant of immunity to suit to a local governmental entity.

Added by Acts 2005, 79th Leg., Ch. 604, Sec. 1, eff. September 1, 2005.



Section 271.160.  Joint Enterprise.

A contract entered into by a local government entity is not a joint enterprise for liability purposes.

Added by Acts 2005, 79th Leg., Ch. 604, Sec. 1, eff. September 1, 2005.



Subchapter J. Design-build Procedures For Certain Civil Works Projects

Section 271.181.  Definitions.

In this subchapter:

(1)  "Architect" means an individual registered as an architect under Chapter 1051, Occupations Code.

(2)  "Civil works project" means:

(A)  roads, streets, bridges, utilities, water supply projects, water plants, wastewater plants, water distribution and wastewater conveyance facilities, desalination projects, airport runways and taxiways, storm drainage and flood control projects, or transit projects;

(B)  types of projects or facilities related to those described by Paragraph (A) and associated with civil engineering construction; and

(C)  buildings or structures that are incidental to projects or facilities that are described by Paragraphs (A) and (B) and that are primarily civil engineering construction projects.

(3)  "Design-build firm" means a partnership, corporation, or other legal entity or team that includes an engineer and a construction contractor qualified to engage in civil works construction in Texas.

(4)  "Design criteria package" means a set of documents that:

(A)  provides sufficient information to convey the intent, goals, criteria, and objectives of the civil works project; and

(B)  permits a design-build firm to:

(i)  assess the scope of work and the risk involved;  and

(ii)  submit a proposal on the project.

(5)  "Engineer" means an individual licensed as an engineer under Chapter 1001, Occupations Code.

(6)  "Local governmental entity" means a municipality, a county, a river authority, a defense base development authority established under Chapter 379B, a municipally owned water utility with a separate governing board appointed by the governing body of a municipality, or any other special district or authority authorized by law to enter into a public works contract for a civil works project.  The term does not include a regional tollway authority created under Chapter 366, Transportation Code, a regional mobility authority created under Chapter 370, Transportation Code, or a water district or authority created under Section 52, Article III, or Section 59, Article XVI, Texas Constitution, with a population of less than 50,000.

Added by Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 6, eff. September 1, 2007.



Section 271.182.  Applicability.

This subchapter applies to a local governmental entity with a population of more than 100,000 within its geographic boundaries or service area.

(c) This subchapter applies to a municipally owned combined electric, water, and wastewater utility situated in an economically distressed area and located within 30 miles of the Lower Texas Gulf Coast. For this subchapter, "combined" means that the utilities are managed and controlled by one board whose members are appointed by the governing body of the municipality and that the financing of capital improvements is secured from the revenues of all three utilities.

Added by Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 6, eff. September 1, 2007.

Amended by:

Acts 2009, 81st Leg., R.S., Ch. 135, Sec. 1, eff. May 23, 2009.

Acts 2009, 81st Leg., R.S., Ch. 725, Sec. 1, eff. June 19, 2009.



Section 271.183.  Applicability Of Other Law.

(a) The purchasing requirements of Section 361.426, Health and Safety Code, apply to purchases by a local governmental entity made under this subchapter.

(b)  Except as provided by this section, to the extent of any conflict, this subchapter prevails over any other law relating to the purchasing of goods and services except a law relating to contracting with historically underutilized businesses.

Added by Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 6, eff. September 1, 2007.



Section 271.184.  Notice Requirements.

(a) A local governmental entity shall advertise or publish notice of requests for bids, proposals, or qualifications in any manner prescribed by law.

(b)  For a contract entered into by a local governmental entity under any of the methods provided by this subchapter, the entity shall publish notice of the time and place the bid or proposals or the request for qualifications will be received and opened in any manner prescribed by law.

Added by Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 6, eff. September 1, 2007.



Section 271.185.  Contracts For Civil Works Projects: Design-build.

(a) A local governmental entity may use the design-build method for the construction, rehabilitation, alteration, or repair of a civil works project. In using this method and in entering into a contract for the services of a design-build firm, the contracting local governmental entity and the design-build firm shall follow the procedures provided by this subchapter.

(b)  A contract for a project under this subchapter may cover only a single integrated project.  A local governmental entity may not enter into a contract for aggregated projects at multiple locations.  For purposes of this subsection:

(1)  if a metropolitan transit authority created under Chapter 451, Transportation Code, enters into a contract for a project involving a bus rapid transit system created under Chapter 451, Transportation Code, the bus rapid transit system is a single integrated project; and

(2)  a water treatment plant, including a desalination plant, that includes treatment facilities, well fields, and pipelines is a single integrated project.

(c)  A local governmental entity shall use the following criteria as a minimum basis for determining the circumstances under which the design-build method is appropriate for a project:

(1)  the extent to which the entity can adequately define the project requirements;

(2)  the time constraints for the delivery of the project;

(3)  the ability to ensure that a competitive procurement can be held; and

(4)  the capability of the entity to manage and oversee the project, including the availability of experienced personnel or outside consultants who are familiar with the design-build method of project delivery.

(d)  A local governmental entity shall make a formal finding on the criteria described by Subsection (c) before preparing a request for qualifications under Section 271.189.

Added by Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 6, eff. September 1, 2007.



Section 271.186.  Limitation On Number Of Projects. (a)

During the first four years that this subchapter applies to a local governmental entity under Section 271.182:

(1)  a local governmental entity with a population of 500,000 or more may, under this subchapter, enter into contracts for not more than three projects in any fiscal year;

(2)  a local governmental entity with a population of 100,000 or more but less than 500,000 may, under this subchapter, enter into contracts for not more than two projects in any fiscal year; and

(3)  a municipally owned water utility with a separate governing board appointed by the governing body of a municipality with a population of 500,000 or more may:

(A)  independently enter into a contract for not more than one civil works project in any fiscal year; and

(B)  enter into contracts for additional civil works projects in any fiscal year, but not more than the number of civil works projects prescribed by the limit in Subdivision (1) for the municipality, provided that:

(i)  the additional contracts for the civil works projects entered into by the utility under this paragraph are allocated to the number of contracts the municipality that appoints the utility's governing board may enter under Subdivision (1); and

(ii)  the governing body of the municipality must approve the contracts.

(b)  After the period described by Subsection (a):

(1)  a local governmental entity with a population of 500,000 or more may, under this subchapter, enter into contracts for not more than six projects in any fiscal year;

(2)  a local governmental entity with a population of 100,000 or more but less than 500,000 may, under this subchapter, enter into contracts for not more than four projects in any fiscal year; and

(3)  a municipally owned water utility with a separate governing board appointed by the governing body of a municipality with a population of 500,000 or more may:

(A)  independently enter into contracts for not more than two civil works projects in any fiscal year; and

(B)  enter into contracts for additional civil works projects in any fiscal year, but not more than the number of civil works projects prescribed by the limit in Subdivision (1) for the municipality, provided that:

(i)  the additional contracts for the civil works projects entered into by the utility under this paragraph are allocated to the number of contracts the municipality that appoints the utility's governing board may enter under Subdivision (1); and

(ii)  the governing body of the municipality must approve the contracts.

(c)  For purposes of determining the number of eligible projects under this section, a municipally owned water utility with a separate governing board appointed by the governing body of the municipality is considered part of the municipality.

Added by Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 6, eff. September 1, 2007.



Section 271.187.  Use Of Engineer.

(a) The local governmental entity shall select or designate an engineer who is independent of the design-build firm to act as its representative for the procurement process and for the duration of the work on the civil works project.  The selected or designated engineer has full responsibility for complying with Chapter 1001, Occupations Code.

(b)  If the engineer is not a full-time employee of the local governmental entity, the local governmental entity shall select the engineer on the basis of demonstrated competence and qualifications as provided by Section 2254.004, Government Code.

Added by Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 6, eff. September 1, 2007.



Section 271.188.  Use Of Other Professional Services.

(a) The local governmental entity shall provide or contract for, independently of the design-build firm, the following services as necessary for the acceptance of the civil works project by the entity:

(1)  inspection services;

(2)  construction materials engineering and testing; and

(3)  verification testing services.

(b)  The local governmental entity shall select the services for which it contracts under this section in accordance with Section 2254.004, Government Code.

Added by Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 6, eff. September 1, 2007.



Section 271.189.  Request For Qualifications.

(a) The local governmental entity shall prepare a request for qualifications that includes:

(1)  information on the civil works project site;

(2)  project scope;

(3)  project budget;

(4)  project schedule;

(5)  criteria for selection under Section 271.191 and the weighting of the criteria; and

(6)  other information that may assist potential design-build firms in submitting proposals for the project.

(b)  The local governmental entity shall also prepare a design criteria package as described by Section 271.190.

Added by Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 6, eff. September 1, 2007.



Section 271.190.  Contents Of Design Criteria Package.

A design criteria package may include, as appropriate:

(1)  budget or cost estimates;

(2)  information on the site;

(3)  performance criteria;

(4)  special material requirements;

(5)  initial design calculations;

(6)  known utilities;

(7)  capacity requirements;

(8)  quality assurance and quality control requirements;

(9)  the type, size, and location of structures; and

(10)  notice of any ordinances, rules, or goals adopted by the local governmental entity relating to awarding contracts to historically underutilized businesses.

Added by Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 6, eff. September 1, 2007.



Section 271.191.  Evaluation Of Design-build Firms.

(a) The local governmental entity shall receive proposals and shall evaluate each offeror's experience, technical competence, capability to perform, the past performance of the offeror's team and members of the team, and other appropriate factors submitted by the team or firm in response to the request for qualifications, except that cost-related or price-related evaluation factors are not permitted at this stage.

(b)  Each offeror must:

(1)  select or designate each engineer that is a member of its team based on demonstrated competence and qualifications, in the manner provided by Section 2254.004, Government Code; and

(2)  certify to the local governmental entity that each selection or designation was based on demonstrated competence and qualifications, in the manner provided by Section 2254.004, Government Code.

(c)  The local governmental entity shall qualify offerors to submit additional information and, if the entity chooses, to interview for final selection.

Added by Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 6, eff. September 1, 2007.



Section 271.192.  Selection Of Design-build Firm. The

local governmental entity shall select a design-build firm using a combination of technical and cost proposals as provided by Section 271.193.

Added by Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 6, eff. September 1, 2007.



Section 271.193.  Procedures For Combination Of Technical And Cost Proposals.

(a) A local governmental entity shall request proposals from design-build firms identified under Section 271.191(c).  A firm must submit a proposal not later than the 180th day after the date the local governmental entity makes a public request for the proposals from the selected firms. The request for proposals must include:

(1)  a design criteria package;

(2)  if the project site is identified, a geotechnical baseline report or other information that provides the design-build firm minimum geotechnical design parameters to submit a proposal;

(3)  detailed instructions for preparing the technical proposal and the items to be included, including a description of the form and level of completeness of drawings expected; and

(4)  the relative weighting of the technical and price proposals and the formula by which the proposals will be evaluated and ranked.

(b)  The technical proposal is a component of the proposal under this section.

(c)  Each proposal must include a sealed technical proposal and a separate sealed cost proposal.

(d)  The technical proposal must address:

(1)  project approach;

(2)  anticipated problems;

(3)  proposed solutions to anticipated problems;

(4)  ability to meet schedules;

(5)  conceptual engineering design; and

(6)  other information requested by the local governmental entity.

(e)  The local governmental entity shall first open, evaluate, and score each responsive technical proposal submitted on the basis of the criteria described in the request for proposals and assign points on the basis of the weighting specified in the request for proposals.  The local governmental entity may reject as nonresponsive any firm that makes a significant change to the composition of its firm as initially submitted. The local governmental entity shall subsequently open, evaluate, and score the cost proposals from firms that submitted a responsive technical proposal and assign points on the basis of the weighting specified in the request for proposals.  The local governmental entity shall select the design-build firm in accordance with the formula provided in the request for proposals.

Added by Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 6, eff. September 1, 2007.



Section 271.194.  Negotiation.

After selecting the highest ranked design-build firm under Section 271.193, the local governmental entity shall first attempt to negotiate a contract with the selected firm. If the local governmental entity is unable to negotiate a satisfactory contract with the selected firm, the entity shall, formally and in writing, end all negotiations with that firm and proceed to negotiate with the next firm in the order of the selection ranking until a contract is reached or negotiations with all ranked firms end.

Added by Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 6, eff. September 1, 2007.



Section 271.195.  Assumption Of Risks.

The local governmental entity shall assume:

(1)  all risks and costs associated with:

(A)  scope changes and modifications, as requested by the local governmental entity;

(B)  unknown or differing site conditions unless otherwise provided by the local governmental entity in the request for proposals and final contract;

(C)  regulatory permitting, if the local governmental entity is responsible for those risks and costs by law or contract; and

(D)  natural disasters and other force majeure events unless otherwise provided by the local governmental entity in the request for proposals and final contract; and

(2)  all costs associated with property acquisition, excluding costs associated with acquiring a temporary easement or work area associated with staging or construction for the project.

Added by Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 6, eff. September 1, 2007.



Section 271.196.  Stipend Amount For Unsuccessful Offerors.

(a) Unless a stipend is paid under Subsection (c), the design-build firm retains all rights to the work product submitted in a proposal.  The local governmental entity may not release or disclose to any person, including the successful offeror, the work product contained in an unsuccessful proposal.  The local governmental entity shall return all copies of the proposal and other information submitted to an unsuccessful offeror.  The local governmental entity or its agents may not make use of any unique or nonordinary design element, technique, method, or process contained in the unsuccessful proposal that was not also contained in the successful proposal at the time of the original submittal, unless the entity acquires a license from the unsuccessful offeror.

(b)  A violation of this section voids the contract for the project entered into by the local governmental entity.  The local governmental entity is liable to any unsuccessful offeror, or any member of the design-build team or its assignee, for one-half of the cost savings associated with the unauthorized use of the work product of the unsuccessful offeror.  Any interested party may bring an action for an injunction, declaratory relief, or damages for a violation of this section.  A party who prevails in an action under this subsection is entitled to reasonable attorney's fees as approved by the court.

(c)  The local governmental entity may offer an unsuccessful design-build firm that submits a response to the entity's request for additional information under Section 271.193 a stipend for preliminary engineering costs associated with the development of the proposal.  The stipend must be one-half of one percent of the contract amount and must be specified in the initial request for proposals.  If the offer is accepted and paid, the local governmental entity may make use of any work product contained in the proposal, including the techniques, methods, processes, and information contained in the proposal.  The use by the local governmental entity of any design element contained in an unsuccessful proposal is at the sole risk and discretion of the entity and does not confer liability on the recipient of the stipend under this subsection.

(d)  Notwithstanding other law, including Chapter 552, Government Code, work product contained in an unsuccessful proposal submitted and rejected under this subchapter is confidential and may not be released unless a stipend offer has been accepted and paid as provided by Subsection (c).

Added by Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 6, eff. September 1, 2007.



Section 271.197.  Completion Of Design.

(a) Following selection of a design-build firm under this subchapter, the firm's engineers shall submit all design elements for review and determination of scope compliance to the local governmental entity before or concurrently with construction.

(b)  An appropriately licensed design professional shall sign and seal construction documents before the documents are released for construction.

Added by Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 6, eff. September 1, 2007.



Section 271.198.  Final Construction Documents.

At the conclusion of construction, the design-build firm shall supply to the local governmental entity a record set of construction documents for the project prepared as provided by Chapter 1001, Occupations Code.

Added by Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 6, eff. September 1, 2007.



Section 271.199.  Performance Or Payment Bond.

(a) A payment or performance bond is not required for the portion of a design-build contract under this section that includes design services only.

(b)  If a fixed contract amount or guaranteed maximum price has not been determined at the time a design-build contract is awarded, the penal sums of the performance and payment bonds delivered to the local governmental entity must each be in an amount equal to the construction budget, if commercially available and practical, as specified in the design criteria package.

(c)  If the local governmental entity awards a design-build contract under Section 271.193, the design-build firm shall deliver the bonds not later than the 10th day after the date the design-build firm executes the contract unless the design-build firm furnishes a bid bond or other financial security acceptable to the local governmental entity to ensure that the design-build firm will furnish the required performance and payment bonds before the commencement of construction.

Added by Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 6, eff. September 1, 2007.



Subchapter Z. Miscellaneous Provisions

Section  271.901.  Procedure For Awarding Contract If Municipality Or District Receives Identical Bids.

(a) If a municipality or district is required to accept bids on a contract and receives two or more bids from responsible bidders that are identical, in nature and amount, as the lowest and best bids, the governing body of the municipality or district shall enter into a contract with only one of those bidders and must reject all other bids.

(b)  If only one of the bidders submitting identical bids is a resident of the municipality or district, the municipality or district must select that bidder. If two or more of the bidders submitting identical bids are residents of the municipality or district, the municipality or district must select one of those bidders by the casting of lots. In all other cases, the municipality or district must select from the identical bids by the casting of lots.

(c)  The casting of lots must be in a manner prescribed by the mayor of the municipality or the governing body of the district and must be conducted in the presence of the governing body of the municipality or district. All qualified bidders or their legal representatives may be present at the casting of lots.

(d)  This section does not prohibit a municipality or district from rejecting all bids.

(e)  This section applies to all municipalities and districts required by general or special law or by municipal ordinance or charter to accept bids and award contracts on the basis of the lowest and best bid, but does not apply to bidding for contracts to act as a depository for public funds or as a depository for school funds under Subchapter G, Chapter 45, Education Code.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1989, 71st Leg., ch. 1, Sec. 62(a), eff. Aug. 28, 1989; Acts 1997, 75th Leg., ch. 165, Sec. 6.71, eff. Sept. 1, 1997.



Section  271.902.  Prohibition Of Conflict Of Interest In Purchase By Municipality Or County From Cooperative Associations.

If a member of the governing body or an appointed board or commission of a municipality or county belongs to a cooperative association, the municipality or county may purchase equipment or supplies from the association only if no member of the governing body, board, or commission will receive a pecuniary benefit from the purchase, other than as reflected in an increase in dividends distributed generally to members of the association.

Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.



Section  271.903.  Commitment Of Current Revenue.

(a) If a contract for the acquisition, including lease, of real or personal property retains to the governing body of a local government the continuing right to terminate at the expiration of each budget period of the local government during the term of the contract, is conditioned on a best efforts attempt by the governing body to obtain and appropriate funds for payment of the contract, or contains both the continuing right to terminate and the best efforts conditions, the contract is a commitment of the local government's current revenues only.

(b)  In this section, "local government" means a municipality, county, school district, special purpose district or authority, or other political subdivision of this state.

Added by Acts 1993, 73rd Leg., ch. 104, Sec. 2, eff. May 7, 1993.



Section  271.904.  Indemnification.

(a) A covenant or promise in, in connection with, or collateral to a contract for engineering or architectural services to which a governmental agency is a party is void and unenforceable if the covenant or promise provides that a licensed engineer or registered architect whose work product is the subject of the contract must indemnify, hold harmless, or defend the governmental agency against liability for damage, other than liability for damage that is caused by or results from an act of negligence, intentional tort, intellectual property infringement, or failure to pay a subcontractor or supplier committed by the indemnitor or the indemnitor's agent, consultant under contract, or another entity over which the indemnitor exercises control.

(b)  In this section, "governmental agency" has the meaning assigned by Section 271.003.

Added by Acts 1995, 74th Leg., ch. 746, Sec. 8, eff. Aug. 28, 1995. Amended by Acts 2001, 77th Leg., ch. 351, Sec. 5, eff. Sept. 1, 2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 1213, Sec. 8, eff. September 1, 2007.



Section  271.905.  Consideration Of Location Of Bidder's Principal Place Of Business.

(a) In this section, "local government" means a municipality with a population of 200,000 or less, a county with a population of 400,000 or less, or another political subdivision authorized under this title to purchase real property or personal property that is not affixed to real property. The term does not include a school district.

(b)  In purchasing under this title any real property or personal property that is not affixed to real property, if a local government receives one or more bids from a bidder whose principal place of business is in the local government and whose bid is within three percent of the lowest bid price received by the local government from a bidder who is not a resident of the local government, the local government may enter into a contract with:

(1)  the lowest bidder; or

(2)  the bidder whose principal place of business is in the local government if the governing body of the local government determines, in writing, that the local bidder offers the local government the best combination of contract price and additional economic development opportunities for the local government created by the contract award, including the employment of residents of the local government and increased tax revenues to the local government.

(c)  This section does not prohibit a local government from rejecting all bids.

Added by Acts 1999, 76th Leg., ch. 996, Sec. 1, eff. Aug. 30, 1999. Amended by Acts 2001, 77th Leg., ch. 480, Sec. 1, eff. Sept. 1, 2001.



Section 271.9051.  Consideration Of Location Of Bidder's Principal Place Of Business In Certain Municipalities.

(a) This section applies only to a municipality with a population of less than 250,000 that is authorized under this title to purchase real property or personal property that is not affixed to real property.

(b)  In purchasing under this title any real property, personal property that is not affixed to real property, or services, if a municipality receives one or more competitive sealed bids from a bidder whose principal place of business is in the municipality and whose bid is within five percent of the lowest bid price received by the municipality from a bidder who is not a resident of the municipality, the municipality may enter into a contract for an expenditure of less than $100,000 with:

(1)  the lowest bidder; or

(2)  the bidder whose principal place of business is in the municipality if the governing body of the municipality determines, in writing, that the local bidder offers the municipality the best combination of contract price and additional economic development opportunities for the municipality created by the contract award, including the employment of residents of the municipality and increased tax revenues to the municipality.

(c)  This section does not prohibit a municipality from rejecting all bids.

(d)  This section does not apply to the purchase of telecommunications services or information services, as those terms are defined by 47 U.S.C. Section 153.

Added by Acts 2005, 79th Leg., Ch. 1205, Sec. 1, eff. September 1, 2005.

Amended by:

Acts 2009, 81st Leg., R.S., Ch. 660, Sec. 1, eff. June 19, 2009.

Acts 2009, 81st Leg., R.S., Ch. 1266, Sec. 9, eff. June 19, 2009.



Section  271.906.  Reverse Auction Method Of Purchasing.

(a) A local government, as defined by Section 271.081, may use the reverse auction procedure, as defined by Section 2155.062(d), Government Code, in purchasing goods and services in place of any other method of purchasing that would otherwise apply to the purchase.

(b)  A local government that uses the reverse auction procedure must include in the procedure a notice provision and other provisions necessary to produce a method of purchasing that is advantageous to the local government and fair to vendors.

Added by Acts 2001, 77th Leg., ch. 436, Sec. 6, eff. May 28, 2001.



Section  271.907.  Vendors That Meet Or Exceed Air Quality Standards. (a)

In this section, "governmental agency" has the meaning assigned by Section 271.003.

(b)  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.

(c)  A governmental agency 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 environmental 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 voluntary standards, relating to air quality.

(d)  The preference may be given only if the cost to the governmental agency 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.

Added by Acts 2003, 78th Leg., ch. 1331, Sec. 20, eff. June 20, 2003. Amended by Acts 2003, 78th Leg., 3rd C.S., ch. 3, Sec. 14.02, eff. Jan. 11, 2004; Acts 2003, 78th Leg., 3rd C.S., ch. 11, Sec. 2, eff. Oct 20, 2003.


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