1. (a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

   1. (1) Consulting service--A study conducted for a state agency or advice provided to a state agency under a contract that does not involve the traditional relationship of employer and employee. The term does not include a routine service that is necessary to the functioning of a state agency's programs.
   2. (2) Executive director--The individual who is the chief administrative officer of a state agency. The term excludes a member of a governing body.

   3. (3) Executive head--

      1. (A) the elected or appointed state official who is authorized by law to administer a state agency if the agency is not headed by a governing body; or
      2. (B) the executive director of a state agency if the agency is headed by a governing body.
   4. (4) Major consulting services contract--A consulting services contract for which it is reasonably foreseeable that the value of the contract will exceed $10,000.
   5. (5) Person--Includes an individual, a corporation, an organization, a government or governmental subdivision or agency, a business trust, an estate, a trust, a partnership, an association, and any other legal entity.
   6. (6) Private consultant--A person that provides or proposes to provide a consulting service.

   7. (7) State agency--

      1. (A) any department, commission, board, office, or other agency in the executive branch of state government created by the constitution or a statute of this state, except the Texas High-Speed Rail Authority;
      2. (B) the Supreme Court of Texas, the Court of Criminal Appeals of Texas, a court of appeals, or the Texas Judicial Council; or
      3. (C) a university system or an institution of higher education as defined in the Education Code, §61.003, other than a public junior college.

2. (b) Applicability of this section. This section applies to a consulting service that a state agency purchases with funds:

   1. (1) appropriated by the Texas legislature;
   2. (2) derived from the exercise of the statutory duties of a state agency, regardless of whether the Texas legislature has appropriated those funds; or
   3. (3) received from the federal government, unless the application of a federal law or regulation conflicts with the application of this section.

3. (c) Exemptions.

   1. (1) This section does not apply to consulting services provided by:

      1. (A) a practitioner of a professional service as defined under the Texas Government Code, §2254.002(2), Professional Services Procurement Act;
      2. (B) a private legal counsel;
      3. (C) an investment counselor;
      4. (D) an actuary;
      5. (E) a medical service provider; or
      6. (F) a dental service provider.
   2. (2) This paragraph applies if the governing board of a retirement system trust fund determines that consulting services are necessary for the performance of the board's constitutional fiduciary duties. Unless paragraph (1) of this subsection makes this section inapplicable to those services, only the requirements of subsection (i)(1) of this section apply to the purchase of the services.

   3. (3) The comptroller, the governor, and the General Services Commission may jointly decide to subject the purchase of a particular consulting service to the procedures required by Texas Civil Statutes, Article 601b, State Purchasing and General Services Act, Article 3, instead of the procedures required by this section. They may make this decision only if:

      1. (A) they conclude that using the procedures required by the State Purchasing and General Services Act, Article 3, would be more advantageous to the state; and
      2. (B) they each adopt by rule a memorandum of understanding that states the substance of their decision.

4. (d) Effect of noncompliance with this section.

   1. (1) If a state agency contracts for consulting services or renews, amends, or extends a consulting services contract without complying with the requirements of subsections (h), (i)(1), and (j) of this section, then the contract, renewal, amendment, or extension is void.
   2. (2) A major consulting services contract that a state agency enters into without first obtaining the finding of fact from the governor's Budget and Planning Office as required by subsection (g)(3) of this section is void.
   3. (3) If a private consultant contracts with a state agency without complying with the requirements of subsection (m)(1)-(3) of this section, then the contract is void.

   4. (4) When a contract, renewal, amendment, or extension is void under this subsection, the comptroller may not:

      1. (A) draw a warrant or transmit funds to satisfy an obligation under the contract, renewal, amendment, or extension; or
      2. (B) reimburse a state agency for a payment made under the contract, renewal, amendment, or extension.
   5. (5) When a contract, renewal, amendment, or extension is void under paragraph (1) of this subsection, a state agency may not make any payments under the contract, renewal, amendment, or extension from any state or federal funds held in or outside the state treasury until the agency has complied with subsections (h), (i)(1), and (j) of this section, as applicable.

5. (e) Necessity for consulting services. A state agency may use a private consultant only if:

   1. (1) there is a substantial need for the consulting services; and
   2. (2) the agency cannot adequately perform the consulting services with its own personnel or through a contract with another state agency.

6. (f) Selection of private consultants.

   1. (1) In selecting a private consultant, a state agency shall:

      1. (A) base its choice on demonstrated competence, knowledge, and qualifications, and on the reasonableness of the proposed fee for the services; and
      2. (B) if other considerations are equal, give preference to a private consultant whose primary place of business is within the state or who will manage the consulting engagement wholly from an office in the state.

   2. (2) A state agency may not accept a person's offer or proposal to provide consulting services to the agency if:

      1. (A) the person received compensation from the agency to participate in the preparation of the specifications or request for proposals on which the offer is based; and
      2. (B) the person would receive compensation from the agency for providing the services.

7. (g) Notice of intent to employ a private consultant. Before entering into a major consulting services contract, a state agency shall:

   1. (1) notify the Legislative Budget Board and the governor's Budget and Planning Office of the agency's intent to contract with a private consultant;
   2. (2) give information to the Legislative Budget Board and the governor's Budget and Planning Office to demonstrate that the agency has complied or will comply with subsections (e) and (f)(1) of this section; and
   3. (3) obtain a finding of fact from the governor's Budget and Planning Office that the consulting services are necessary.

8. (h) Publication before entering into a major consulting services contract.

   1. (1) Not later than the 30th day before the date it enters into a major consulting services contract, a state agency shall file a document with the secretary of state for publication in the Texas Register. The document must:

      1. (A) invite private consultants to provide offers of consulting services to the agency;
      2. (B) identify the individual employed by the agency who should be contacted by a private consultant who intends to provide an offer;
      3. (C) specify the closing date for the receipt of offers; and
      4. (D) describe the procedure by which the state agency will award the contract.
   2. (2) If the consulting services sought by a state agency relate to services previously provided by a private consultant, the agency must disclose that fact in the invitation for offers required by paragraph (1)(A) of this subsection. If the agency intends to award the contract to the private consultant that previously provided the services unless a better offer is received, the agency must also disclose this intention in the invitation for offers.

9. (i) Publication and notification after entering into a major consulting services contract.

   1. (1) Not later than the tenth day after the date of entering into a major consulting services contract, a state agency shall file with the secretary of state for publication in the Texas Register:

      1. (A) a description of the activities that the private consultant will conduct;
      2. (B) the name and business address of the private consultant;
      3. (C) the total value of the contract;
      4. (D) the beginning and ending dates of the contract; and
      5. (E) the dates on which documents, films, recordings, or reports that the private consultant is required to present to the agency are due.
   2. (2) The General Appropriations Act for the fiscal biennium ending August 31, 1995, contains the following provision. A state agency must provide the information listed in paragraph (1)(A)-(E) of this subsection to the Legislative Budget Board, the House Appropriations Committee, the Senate Finance Committee, and other appropriate legislative committees. The agency must provide the information not later than the tenth day after the date the agency enters into the major consulting services contract.

10. (j) Renewals, extensions, or amendments of consulting services contracts.

    1. (1) A state agency must comply with this paragraph when the agency intends to renew a major consulting services contract.

       1. (A) If the renewal contract itself is not a major consulting services contract, then the agency shall file the information required by subsection (i)(1) of this section with the secretary of state for publication in the Texas Register. The information must be filed not later than the tenth day after the date the renewal contract is entered into.
       2. (B) If the renewal contract itself is a major consulting services, then the agency shall comply with the requirements of subsections (g) and (h) of this section.
    2. (2) A state agency that intends to renew a consulting services contract that is not a major consulting services contract shall comply with the requirements of subsections (g) and (h) of this section if the original contract and the renewal contract have a reasonably foreseeable value totaling more than $10,000.

    3. (3) A state agency must comply with this paragraph when the agency intends to extend or amend a major consulting services contract.

       1. (A) If the contract after the amendment or extension is no longer a major consulting services contract, then the agency shall file the information required by subsection (i)(1) of this section with the secretary of state for publication in the Texas Register. The information must be filed not later than the tenth day after the date the contract is amended or extended.
       2. (B) If the contract after the amendment or extension is still a major consulting services contract, then the agency shall comply with the requirements of subsections (g) and (h) of this section.
    4. (4) A state agency that intends to extend or amend a consulting services contract that is not a major consulting services contract shall comply with the requirements of subsections (g) and (h) of this section if the original contract and the amendment or extension have a reasonably foreseeable value totaling more than $10,000.
11. (k) Dividing contracts. A state agency may not divide a consulting services contract or a renewal, amendment, or extension of a consulting services contract into more than one contract, renewal, amendment, or extension to avoid the requirements of this section.

12. (l) Reporting of financial interests.

    1. (1) This subsection applies only to an officer or employee of a state agency who has a financial interest or who is related within the second degree of consanguinity or affinity to an individual who has a financial interest in a private consultant that submits an offer to provide consulting services to the agency. For the purpose of this subsection, degrees of relationship must be determined in accordance with the Texas Government Code, Chapter 573.
    2. (2) An officer or employee of a state agency shall report the financial interest to the executive head of the agency not later than the tenth day after the date on which the private consultant submits the offer.
    3. (3) This subsection applies to all consulting services contracts and renewals, amendments, and extensions of those contracts.

13. (m) Consulting services provided by former state employees.

    1. (1) Paragraphs (2) and (3) of this subsection apply only to an individual who has been employed by a state agency at anytime during the two years preceding the date on which the individual offers to perform a consulting service for a state agency.

    2. (2) An individual shall disclose in an offer to perform a consulting service for a state agency:

       1. (A) the nature of the individual's employment with the agency or another state agency;
       2. (B) the date the employment was terminated; and
       3. (C) the annual rate of compensation for the employment at the time of termination.

    3. (3) A state agency that accepts an offer to provide consulting services from an individual described in paragraph (1) of this subsection must include, in the information filed under subsection (i)(1) of this section, a statement about:

       1. (A) the individual's employment with a state agency; and
       2. (B) the nature of that employment.
    4. (4) Notwithstanding anything else in this section, a state department or agency may not use funds appropriated by the General Appropriations Act to make a payment under a consulting services contract with an individual who was employed by that department or agency at anytime during the 12 months before the contract was entered into.

14. (n) Archives.

    1. (1) After a state agency's contract with a private consultant has ended, the agency shall, upon request, supply the Legislative Budget Board and the governor's Budget and Planning Office with a copy of each document, film, recording, or report developed by the consultant under the contract.
    2. (2) A state agency shall file with the Texas State Library a copy of each document, film, recording, or report developed by the private consultant.
15. (o) Actions by state agencies on recommendations from private consultants. As part of the biennial budgetary hearing process conducted by the Legislative Budget Board and the governor's Budget and Planning Office, a state agency shall report to each of them on any actions taken in response to the recommendations of any private consultant with whom the agency contracts during the previous biennium.
16. (p) Emergency purchases of consulting services. A state agency that needs private consulting services before compliance with this section can be completed because of an unforeseen emergency shall comply with the governor's rules about emergency waivers of the requirements of this section.
17. (q) Mixed contracts. This section applies to a contract that involves both consulting and other services if the primary objective of the contract is the acquisition of consulting services.
18. (r) Competitive bidding. This section neither requires nor prohibits the use of competitive bidding procedures to purchase consulting services.

19. (s) Procurement of consulting services by the General Services Commission.

    1. (1) At the request of a state agency, the General Services Commission is required to procure consulting services for the agency.

    2. (2) When the General Services Commission procures consulting services for a state agency:

       1. (A) the commission may require the agency to reimburse the commission for the costs incurred by the commission in procuring the services; and
       2. (B) the commission must comply with the requirements of this section that would apply if the agency were procuring the consulting services directly.

20. (t) Purchase document requirements.

    1. (1) This paragraph applies when a purchase document is submitted to the comptroller that requests a payment under a consulting services contract that is not a major consulting services contract. The document must contain the following information in the appropriate descriptive/legal text screen of USAS and be supported by the following documentation:

       1. (A) the reasonably foreseeable value of the contract;
       2. (B) the cumulative total of prior payments made under the contract;
       3. (C) a copy of the contract if the copy has not already been provided to the comptroller; and
       4. (D) a statement that the payment complies with subsections (e), (f), and (m) of this section.

    2. (2) This paragraph applies when a purchase document is submitted to the comptroller that requests a payment under a major consulting services contract. The document must contain the following information in the appropriate descriptive/legal text screen of USAS and be supported by the following documentation:

       1. (A) the reasonably foreseeable value of the contract;
       2. (B) the cumulative total of prior payments made under the contract;
       3. (C) a copy of the contract if the copy has not already been provided to the comptroller;
       4. (D) the volume and page number of the Texas Register in which the requirements of subsections (h), (i)(1), and, if applicable, (m)(3) of this section were fulfilled;
       5. (E) a copy of the governor's finding of fact that the consulting services are necessary if the copy has not already been provided to the comptroller; and
       6. (F) a statement that the payment complies with subsections (e), (f), and (m) of this section.

    3. (3) This paragraph applies when a purchase document is submitted to the comptroller that requests a payment under a renewed consulting services contract if the original contract was a major consulting services contract.

       1. (A) This subparagraph applies if the renewal contract itself is not a major consulting services contract. The document must contain the following information in the appropriate descriptive/legal text screen of USAS and be supported by the following documentation:

          1. (i) the reasonably foreseeable value of the original contract;
          2. (ii) the reasonably foreseeable value of the renewal contract;
          3. (iii) the cumulative total of prior payments made under the original contract;
          4. (iv) the cumulative total of prior payments made under the renewal contract;
          5. (v) a copy of the original contract if the copy has not already been provided to the comptroller;
          6. (vi) a copy of the renewal contract if the copy has not already been provided to the comptroller;
          7. (vii) the volume and page number of the Texas Register in which the requirements of subsections (h), (i)(1), and, if applicable, (m)(3) of this section were fulfilled when the original contract was entered into;
          8. (viii) the volume and page number of the Texas Register in which the requirements of subsection (j)(1)(A) of this section were fulfilled when the renewal contract was entered into;
          9. (ix) a copy of the governor's finding of fact that the consulting services under the original contract are necessary if the copy has not already been provided to the comptroller; and
          10. (x) a statement that the payment complies with subsections (e), (f), and (m) of this section.

       2. (B) This subparagraph applies if the renewal contract itself is a major consulting services contract. The document must contain the following information in the appropriate descriptive/legal text screen of USAS and be supported by the following documentation:

          1. (i) the reasonably foreseeable value of the original contract;
          2. (ii) the reasonably foreseeable value of the renewal contract;
          3. (iii) the cumulative total of prior payments made under the original contract;
          4. (iv) the cumulative total of prior payments made under the renewal contract;
          5. (v) a copy of the original contract if the copy has not already been provided to the comptroller;
          6. (vi) a copy of the renewal contract if the copy has not already been provided to the comptroller;
          7. (vii) the volume and page number of the Texas Register in which the requirements of subsections (h), (i)(1), and, if applicable, (m)(3) of this section were fulfilled when the original contract was entered into;
          8. (viii) the volume and page number of the Texas Register in which the requirements of subsection (j)(1)(B) of this section were fulfilled when the renewal contract was entered into;
          9. (ix) a copy of the governor's finding of fact that the consulting services under the original contract are necessary if the copy has not already been provided to the comptroller;
          10. (x) a copy of the governor's finding of fact that the consulting services under the renewal contract are necessary if the copy has not already been provided to the comptroller; and
          11. (xi) a statement that the payment complies with subsections (e), (f), and (m) of this section.

    4. (4) This paragraph applies when a purchase document is submitted to the comptroller that requests a payment under a renewed consulting services contract if the original contract was not a major consulting services contract.

       1. (A) This subparagraph applies if the original contract and the renewal have a reasonably foreseeable value totaling more than $10,000. The document must contain the following information in the appropriate descriptive/legal text screen of USAS and be supported by the following documentation:

          1. (i) the reasonably foreseeable value of the original contract;
          2. (ii) the reasonably foreseeable value of the renewal contract;
          3. (iii) the cumulative total of prior payments made under the original contract;
          4. (iv) the cumulative total of prior payments made under the renewal contract;
          5. (v) a copy of the original contract if the copy has not already been provided to the comptroller;
          6. (vi) a copy of the renewal contract if the copy has not already been provided to the comptroller;
          7. (vii) the volume and page number of the Texas Register in which the requirements of subsection (j)(2) of this section were fulfilled when the renewal contract was entered into;
          8. (viii) a copy of the governor's finding of fact that the consulting services under the renewal contract are necessary if the copy has not already been provided to the comptroller; and
          9. (ix) a statement that the payment complies with subsections (e), (f), and (m) of this section.

       2. (B) This subparagraph applies if the original contract and the renewal have a reasonably foreseeable value totaling $10,000 or less. The document must contain the following information in the appropriate descriptive/legal text screen of USAS and be supported by the following documentation:

          1. (i) the reasonably foreseeable value of the original contract;
          2. (ii) the reasonably foreseeable value of the renewal contract;
          3. (iii) the cumulative total of prior payments made under the original contract;
          4. (iv) the cumulative total of prior payments made under the renewal contract;
          5. (v) a copy of the original contract if the copy has not already been provided to the comptroller;
          6. (vi) a copy of the renewal contract if the copy has not already been provided to the comptroller;
          7. (vii) a statement that the payment complies with subsections (e), (f), and (m) of this section.

    5. (5) This paragraph applies when a purchase document is submitted to the comptroller that requests a payment under an extended or an amended consulting services contract if the original contract was a major consulting services contract.

       1. (A) This subparagraph applies if the contract after the extension or amendment is still a major consulting services contract. The document must contain the following information in the appropriate descriptive/legal text screen of USAS and be supported by the following documentation:

          1. (i) the reasonably foreseeable value of the original contract;
          2. (ii) the reasonably foreseeable value of the contract after the extension or amendment;
          3. (iii) the cumulative total of prior payments made under the original contract;
          4. (iv) the cumulative total of prior payments made under the contract after the extension or amendment took effect;
          5. (v) a copy of the original contract if the copy has not already been provided to the comptroller;
          6. (vi) a copy of the extension or amendment if the copy has not already been provided to the comptroller;
          7. (vii) the volume and page number of the Texas Register in which the requirements of subsections (h), (i)(1), and, if applicable, (m)(3) of this section were fulfilled when the original contract was entered into;
          8. (viii) the volume and page number of the Texas Register in which the requirements of subsection (j)(3)(B) of this section were fulfilled when the extension or amendment was entered into;
          9. (ix) a copy of the governor's finding of fact that the consulting services under the original contract are necessary if the copy has not already been provided to the comptroller; and
          10. (x) a copy of the governor's finding of fact that the consulting services under the contract after the extension or amendment are necessary if the copy has not already been provided to the comptroller; and
          11. (xi) a statement that the payment complies with subsections (e), (f), and (m) of this section.

       2. (B) This subparagraph applies if the contract after the extension or amendment is no longer a major consulting services contract. The document must contain the following information in the appropriate descriptive/legal text screen of USAS and be supported by the following documentation:

          1. (i) the reasonably foreseeable value of the original contract;
          2. (ii) the reasonably foreseeable value of the contract after the extension or amendment;
          3. (iii) the cumulative total of prior payments made under the original contract;
          4. (iv) the cumulative total of prior payments made under the contract after the extension or amendment took effect;
          5. (v) a copy of the original contract if the copy has not already been provided to the comptroller;
          6. (vi) a copy of the extension or amendment if the copy has not already been provided to the comptroller;
          7. (vii) the volume and page number of the Texas Register in which the requirements of subsections (h), (i)(1), and, if applicable, (m)(3) of this section were fulfilled when the original contract was entered into;
          8. (viii) the volume and page number of the Texas Register in which the requirements of subsection (j)(3)(A) of this section were fulfilled when the extension, or amendment was entered into;
          9. (ix) a copy of the governor's finding of fact that the consulting services under the original contract are necessary if the copy has not already been provided to the comptroller; and
          10. (x) a statement that the payment complies with subsections (e), (f), and (m) of this section.

    6. (6) This paragraph applies when a purchase document is submitted to the comptroller that requests a payment under an extended or an amended consulting services contract if the original contract was not a major consulting services contract.

       1. (A) This subparagraph applies if the original contract and the extension or amendment have a reasonably foreseeable value totaling more than $10,000. The document must contain the following information in the appropriate descriptive/legal text screen of USAS and be supported by the following documentation:

          1. (i) the reasonably foreseeable value of the original contract;
          2. (ii) the reasonably foreseeable value of the extension or amendment;
          3. (iii) the cumulative total of prior payments made under the original contract;
          4. (iv) the cumulative total of prior payments made under the contract after the extension or amendment took effect;
          5. (v) a copy of the original contract if the copy has not already been provided to the comptroller;
          6. (vi) a copy of the extension or amendment if the copy has not already been provided to the comptroller;
          7. (vii) the volume and page number of the Texas Register in which the requirements of subsections (j)(4) and, if applicable, (m)(3) of this section were fulfilled when the extension or amendment was entered into;
          8. (viii) a copy of the governor's finding of fact that the consulting services under the extension or amendment are necessary if the copy has not already been provided to the comptroller; and
          9. (ix) a statement that the payment complies with subsections (e), (f), and (m) of this section.

       2. (B) This subparagraph applies if the original contract and the extension or amendment have a reasonably foreseeable value totaling $10,000 or less. The document must contain the following information in the appropriate descriptive/legal text screen of USAS and be supported by the following documentation:

          1. (i) the reasonably foreseeable value of the original contract;
          2. (ii) the reasonably foreseeable value of the extension or amendment;
          3. (iii) the cumulative total of prior payments made under the original contract;
          4. (iv) the cumulative total of prior payments made under the contract after the extension or amendment took effect;
          5. (v) a copy of the original contract if the copy has not already been provided to the comptroller;
          6. (vi) a copy of the extension or amendment if the copy has not already been provided to the comptroller; and
          7. (vii) a statement that the payment complies with subsections (e), (f), and (m) of this section.
    7. (7) When a state agency has received an emergency waiver of the requirements of this section from the governor, the agency must submit a copy of the emergency waiver with each purchase document submitted to the comptroller to request a payment under the consulting services contract covered by the waiver.

Source Note:The provisions of this §5.54 adopted to be effective January 26, 1995, 20 TexReg 227.