HBA-ALS H.B. 2268 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2268
By: Hamric
Transportation
3/15/1999
Introduced



BACKGROUND AND PURPOSE 
 
Under current law, the Texas Transportation Commission (commission) is
required to award a highway improvement contract involving less than
$300,000 to the lowest bidder.  However, there is no statutory provision
allowing the commission to award the contract to the second lowest bidder
if the lowest bid is withdrawn or the lowest bidder breaches the contract.
Currently, if a lowest bidder withdraws a bid, the Texas Department of
Transportation (TxDOT) must award the contract to that bidder anyway, and
if the lowest bidder breaches an awarded contract, TxDOT must rebid the
contract.  The purpose of this bill is to allow the commission to award
certain highway improvement contracts to the second lowest bidder if the
lowest bidder withdraws its bid or breaches the contract.  

H.B. 2268 requires TxDOT to tabulate and forward all bids for state highway
improvements to the commission for acceptance or rejection.  This bill
requires the commission to award a contract to the lowest bidder, and
allows the commission to recommend awarding the contract to the second
highest bidder in certain instances.  H.B. 2268 grants the commission the
authority to adopt rules relating to bid withdrawals and the awarding of
contracts to the second highest bidder. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Texas Transportation Commission in
SECTION 1 (Section 223.0041, Transportation Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter A, Chapter 223, Transportation Code, by
adding Section 223.0041, as follows: 

Sec. 223.0041.  AWARD OF CONTRACTS.  (a) Requires that all bids received
for state highway improvements and not rejected by the Texas Department of
Transportation (TxDOT) be tabulated and forwarded to the Texas
Transportation Commission (commission) and authorizes the commission to
accept or reject those bids, except as provided by Section 223.005 (Bids on
Contracts Involving Less Than $300,000). 

(b) Requires the commission to award the contract to the lowest bidder if
the bids are accepted, subject to Section 223.045 (Steel Preference
Provisions in Improvement Contracts), and except as provided in Subsection
(c). 

(c) Authorizes the executive director of TxDOT to recommend that the
commission award the contract to the second lowest bidder if the lowest
bidder withdraws its bid before the contract is awarded or fails to execute
the contract.  Authorizes the commission to award the contract to the
second lowest bidder if that bidder agrees to accept the unit bid prices of
the lowest bidder. Requires the commission to adopt rules governing the
conditions under which the department will allow a bid withdrawal and
consider awarding a contract to the second lowest bidder. Provides that
this subsection applies only to contracts involving less than $300,000. 


SECTION 2.  Amends Section 223.005, Transportation Code, to redesignate
existing Subsection (d) to Subsection (b).  Makes conforming changes. 

SECTION 3.  Emergency clause.
  Effective date: upon passage.