HBA-MSH H.B. 1172 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1172
By: Flores
Transportation
4/27/2001
Introduced



BACKGROUND AND PURPOSE 

Under current practices of the Texas Department of Transportation (TxDOT),
when employees determine that their office is low or out of an item, they
issue a supply request to the district warehouse. The district warehouse
fills this request by shipping the item from its inventory, requesting
additional inventory from its regional supply center if that center stocks
the item, ordering goods on state contract, or forwarding supply requests
to the district purchasing department.  The cost of warehousing and
transporting supplies increases TxDOT's operating costs.  In a
"just-in-time" inventory system an employee orders an item directly from a
retail supplier.  While such a system may result in increased unit costs
for items, it may create overall savings by decreasing warehouse and
transfer costs.  House Bill 1172 requires TxDOT and the General Services
Commission to implement a "just-in-time" inventory pilot program. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 1172 amends the Transportation Code to require the General
Services Commission (GSC) and the Texas Department of Transportation
(TxDOT) to implement a "just-in-time" inventory pilot program for the
purchase of office and janitorial supplies for TxDOT in small quantities
with frequent deliveries.  The bill specifies that items should not be
inventoried at a regional supply center or district warehouse, but should
be delivered directly to the location where they are to be used.  The bill
requires TxDOT and GSC to use as a model similar programs adopted in other
states with larger populations as models for the pilot program.  The bill
requires the TxDOT and GSC to determine which items are to be included in
the pilot program.  The bill authorizes TxDOT and GSC to modify the terms
of contracts offered to vendors as a part of the pilot program to ensure
that items are delivered within 24 to 48 hours from the time the order is
placed.  The bill specifies that TxDOT should offer one contract for office
supplies and a separate contract for janitorial items, and sets forth
provisions governing such contracts. 

EFFECTIVE DATE

On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001.