SECTION 201.6. Contract Approval Authority and Responsibilities

(a) Purpose. The purpose of this rule is to establish the approval authority and responsibilities for executing contracts required by the department.

(b) Applicability. This rule applies to all contracts entered into by the department.

(c) Definitions. As used in this section, the following terms shall have the following meanings, unless the context clearly indicates otherwise.

(1) Board--The governing board of the department.

(2) Contract--A written agreement between the department and a contractor for goods or services. As used in this section, "contract" includes the following: letters of agreement; interagency/interlocal agreements with other government entities; and other documents in which state funds or services allocated to the department are exchanged for the delivery of other goods or services.

(3) Major Outsourced Contract--A contract the department executes with entities other than this state or a political subdivision of this state that:

(A) is authorized under Government Code, Chapter 2054, Subchapter I or Subchapter L, or Chapter 2170; or

(B) exceeds the monetary threshold in subsection (d)(1)(A) of this section, other than those contracts described in subparagraph (A) of this paragraph.

(4) Value--The department adopts by reference the determination of contract value set forth in the State of Texas Contract Management Guide. The determination of contract value shall include, in addition to compensation to a contractor from funds allocated to the department, an amount deposited into the State general revenue fund or other state fund in a revenue sharing contract arrangement with a contractor.

(d) Approval Authority.

(1) Board Approval. The executive director or his/her designee shall present certain contracts to the board for approval. After a contractor is selected, a majority of the board shall provide final approval of the contract with the selected contractor. The board shall consider for final approval:

(A) any contract or amendment with a value expected to exceed $1,000,000;

(B) any major outsourced contract;

(C) any amendment to a major outsourced contract if the amendment has significant statewide impact. Significant statewide impact is defined as affecting critical state contractual objectives, assumptions or constraints , rising to the level of substantive impact fiscally, programmatically or otherwise at a statewide level and not as an isolated incident. Examples of situations with significant statewide impact include, but are not limited to, contract renewal, contract termination, and vendor changes. Examples of situations that do not rise to the level of significant statewide impact include but are not limited to, revisions to existing services, addition of optional services, contract language clarifications, changes in definitions, service provider locations, key personnel, and addition of new customers.

(D) any other contract deemed appropriate for board approval as determined by the executive director.

(2) Agency Approval.

(A) The board delegates authority to the executive director or his/her designee to approve all contracts not listed in paragraph (1) of this subsection.

(B) The board delegates authority to the executive director to approve a purchase request or contract listed in paragraph (1) of this subsection for an emergency as such is defined in 34 TAC §20.32, or to avoid undue material additional cost to the state. The executive director shall report any purchase requests or contracts executed by the executive director pursuant to the authority in this subsection to the board chair prior to execution of any such purchase requests or contracts subject to this rule.

(e) Authority to Execute Contracts. The board delegates authority to the executive director to execute all contracts for the department. This authority may be delegated by the executive director to the deputy executive director or other designee.

(f) Contract Planning.

(1) The department will present to the Board for approval a contract plan for the next fiscal year that outlines the agency's anticipated contracting actions that exceed $100,000.

(2) As deemed necessary by the executive director or his/her designee, updates to the contract plan will be provided to the board for approval periodically throughout the fiscal year.

(g) Contract Monitoring

(1) Each contract identified as a major outsourced contract under subsection (c)(3)(A) above shall be subject to enhanced contract and performance monitoring.

(2) Information about contracts subject to such monitoring shall be regularly presented to the board and the executive director of the department.

(3) The department will immediately notify the board of any serious issue or risk that is identified with a contract subject to such monitoring.

Source Note: The provisions of this §201.6 adopted to be effective March 6, 2012, 37 TexReg 1486; amended to be effective March 19, 2014, 39 TexReg 1926; amended to be effective November 23, 2015, 40 TexReg 8191; amended to be effective November 23, 2017, 42 TexReg 6505