TBPC's New Systems Producing Results: What TxMAS and Reverse Auctions Have Done for State Procurement

Over the last year, the Texas Building and Procurement Commission (TBPC) has achieved considerable success with the implementation of the Texas Multiple Award Schedule Program (TxMAS) and the Reverse Auction procurement process. Both the TxMAS and Reverse Auction processes, which were mandated by legislation passed in the 77th Legislative Session, provide viable purchasing alternatives to the traditional competitive sealed bid purchasing method and have generated savings and other benefits for the State.

One of the primary objectives of the TXMAS program is to improve the efficiency of the purchasing process by allowing the state to take advantage of contracts that have already been competitively awarded. The TXMAS contracts contain preferred customer pricing given to the federal sector by General Services Administration (GSA) contractors or contracts that have been competitively awarded by other elements of the federal government or agencies of other states.

Using a TXMAS contract simplifies the purchasing process for a state purchaser as there is no competition or bidding required in making a TXMAS purchase because a competition occurred when the original contract was awarded. State purchasers are encouraged to make best value determinations by comparing the TXMAS contract schedule pricing, product quality, and any other factor determined appropriate to the purchase. Price quotes for TXMAS pricing are generally part of the methodology used for best value determinations. Once the best value determination is made, state purchasers issue a purchase order directly to the contract or dealer.

Statewide acceptance of the TXMAS program is indicated by the fact that state agencies and TBPC Cooperative Purchasing Program members have purchased over $5.8 million in goods and services from the TXMAS contracts. State agencies have reported considerable savings and faster deliveries through use of TXMAS contracts. TBPC currently has 336 TXMAS contracts available for use by state agencies and other entities. These contracts include commodities and services such as office supplies, office furniture, and moving services. A complete list of vendors, products, and services can be found on TBPC's website: http://www.TBPC.state.tx.us.

TBPC has also been generating savings for the state through the use of the Reverse Auction procurement process. Reverse auctions are on-line, web based procurement tools used to conduct competitive bidding events over the internet. During a reverse auction, vendors view bids of competitors in real time and have the option of responding with better bids. Since November 2002, TBPC has awarded contracts totaling over $91.2 million through the use of the reverse auction process. The cumulative savings on these contracts is approximately $5.6 million, or 5.7 percent.

TBPC is continuing to refine and expand both of these programs as appropriate to improve the efficiency of purchasing practices and to generate cost savings for the state.

Governor Holds First College Ready Summit, Focuses on Involving Business Leaders in Drive to Improve Schools

Gov. Rick Perry hosted the College Ready Summit in Arlington this week, the first in a series of such meetings to be held around the state. Governor Perry has directed the Governors Business Council to organize the series of College Ready Summits around Texas to unite the business community and the education establishment in the common goal of lowering dropout rates and improving the college readiness of graduating high school students.

The College Ready Summits build upon the Texas High School Project (THSP), a $130 million public-private initiative involving to benefit at-risk students and encourage high school graduation.

Under the THSP, the state will offer grants of up to $600,000 to approximately 140 school districts. The grants will help pay for additional services for at-risk students at low-performing high schools to help them graduate and be academically prepared for college. Grants to the first set of 70 districts are expected in February, with a second round to be allocated in September.

Investments from the Michael and Susan Dell Foundation, Bill & Melinda Gates Foundation, and the Communities Foundation of Texas will fund proposals to redesign existing underperforming high schools and to create new ones, including schools that focus on math, sciences and technology. Charter schools and early college high schools would also be created with foundation funds. The first grants for this use are expected in August.

Sunset Advisory Commission Holds First Meeting for 79th Interim

The Sunset Advisory Commission, the state agency review board, met on December 10. The size of the commission has grown from 10 legislators to 12, with one Senator to be appointed in January. Burt Solomons currently chairs the commission and Jane Nelson acts as Vice-Chair.

Legislators discussed the proposed schedule and across-the-boards recommendations for the group. Director of the Commission Joey Longley requested an evaluation exemption for agencies that are inactive for two years. The board agreed to the exemption policy.

From 1982-2003, the Sunset Advisory Committee saved the state $730 million and was awarded by the National Council of State Legislators for their performance. The Commission has an operating budget of $1.6 million each year, and a staff of 29.

TEXAS SHORTS:

Concern Over State Employee's Pension Fund

The Employees Retirement System of Texas $17.5 billion pension fund hasn't been performing as well as projected, according to the system's actuarial consultant. The fund's investment returns are below those of the average large public fund. Furthermore, the fund has failed to meet the system's own projected targets. A small funding shortfall has resulted from the slow returns, the consultant told the board of trustees this week. In order to deal with the deficit, the employees' system has decided to freeze any increases on benefits. The fund witnessed its first positive return in three years this fiscal year, an impressive 9.2%. The way the fund is structured, however, takes into account gains and losses for a five-year period; thus the fund is still dealing with the losses from years past.

White Wins Houston Mayoral Run-off

Bill White, in his first bid for the city's top position, defeated Orlando Sanchez by 136,617 votes to 81,124, or 63 percent to 27 percent of the vote on December 7. White spent approximately $2.2 million of his personal funds in an $8.6 million dollar effort to beat Cuban-born Sanchez who was making his second bid for the mayoral seat. White, a former chairman of the Texas Democratic Party, commanded the lead in the initial election, winning 38% of the vote amongst eight candidates. He ran his campaign on a platform of bipartisan support and the slogan "get Houston moving." Sanchez, a Republican who was aiming to become Houston's first Hispanic mayor, pitched himself as a fiscal conservative who would halt the current tax and spending policies which landed the city $20 million in debt.

TEA Awaiting Verdict on Student Testing Statistics

At the beginning of the school year, 1000 Texas schools were classified as "needs improvement" for failing to meet national education standards. As a result of the TEA's revised participation requirements, only 535 schools remain in this category. The state's commissioner of accountability and data quality argued that the TEA altered requirements in order to make them statistically valid. When the standards were first set, many schools complained that an absence of a mere two or three students of a certain demographic on a testing day could result in an otherwise good school receiving a failing grade. Texas had submitted a proposal for a gradual phase-in of participation standards early in 2003, which was rejected in June, long after the February and April testing dates. Unlike other states, Texas did not have an alternate test day in place when those students who were absent could retake the test, and many schools failed solely on this account. The details of the new classification system were sent to the U.S. Education Department, which will decide if the TEA is adequately enforcing the requirements of the No Child Left Behind Act.

Federal Government Earmarks $7.4 Million for Environmental Impact Report, Promising for Valley Transit

The U.S. House of Representatives passed a measure which allots $7.4 million to Interstate 69, a trans-America highway that would reach from Canada all the way through South Texas. The proposed interstate is particularly promising for Texas as it would create a major NAFTA portal at the state's southern border. Although the money is not for the actual construction, it will support environmental impact studies that are needed to get the construction process underway. The Texas Department of Transportation will use the allotment to determine which corridors will constitute the best route for I-69 through the state. Already certain however is that I-69 will run along the renovated Expressway 78-83 in the Rio Grande Valley, currently the only urban area in the nation lacking an interstate highway system.

NEW SPI GOVERNMENT OPPORTUNITY PACKAGE

As a follow up to its successful roll out of The Guide to the Texas State Government Marketplace, and because of repeated requests, SPI is announcing a new procurement information package comprised of:

• Electronic information on unannounced procurement opportunities for over 120 state agencies plus major cities, counties, and other entities (you choose 3 industries).
  
  
• One year of customized daily bid monitoring.

Event Links

Texas Higher Education Human Resources Association, Winter Conference - 01/11/04-01/13/04

Data Interchange XML Theory and Practice - 1/18/04

GTC Southwest 2004: Fifteenth Annual Government Technology Conference 1/26/04-1/30/04

Second Annual Courts and Local Government Technology Conference - 01/28/04-01/29/04

2004 Texas Higher Education Coordinating Board Facilities Conference - 02/04/04-02/06/04

Fourth Annual Purchasing and HUB Connection Forum - 2/11/04

Past ABJ articles by Mary Scott Nabers

Believe It! It Is Possible to Win Government Business Without Having to Bid For It! - 12/4/03

Fingering opportunities in biometric technology - 11/03/2003

It's smart for vendors to watch 'smart card' deals - 10/6/2003

Watch Cap Metro, AISD for vendor opportunities - 9/22/2003

Watch state water board for flow of grant money - 9/8/2003

New state laws open up market at state agencies - 8/25/2003

Insider Archives

Volume 1 Issue 4 - 12/4/03

Volume 1 Issue 3 - 11/20/03

Volume 1 Issue 2 - 11/13/03

Volume 1 Issue 1 - 11/7/03

Resources

New Texas Fact Book 2004

The Secretary of State Releases Summary of Texas' International Development Prospects

Earlier this month, the Secretary of State's office released a document entitled the "Texas International Economic Development Fact Sheet" which focuses on Texas' critical position with regard to trade and diplomacy in the Americas.

The "Texas International Economic Development Fact Sheet" noted that expanding markets, a pro-business environment, world-class infrastructure, and leadership in technology and research all contribute to Texas' international economic potential. Among the most striking statistics in each category are as follows--

Expanding Markets:

• The number of persons employed in Texas manufacturing industries surpassed 1 million in 1994. Texas has added more new manufacturing jobs since 1990 than any other state.
• The gross state product of Texas was an estimated $807.4 billion (current $) in 2002, third among the 50 U.S. states.
• Texas surpassed California during the first three quarters of 2002 to become the leading exporting state in the nation.

Pro-Business Environment:

• Among the fifteen most populous states, Texas ranks as one of the lowest in business taxes as a percentage of total state tax revenue.
• Leasing costs for Class A office space in Dallas and Houston are priced far below those in Chicago and Boston on a square foot basis, and are half the cost of office space in New York City (2001).
• Texas is home to the third highest number of companies on both the Fortune 500 and Forbes 500 listings for 2002.

World-Class Infrastructure:

• Texas has the largest road network of the 50 U.S. states.
• Fort Worth's Alliance Airport is the first industrial facility of its kind to be planned, designed, and built specifically to serve the needs of businesses.
• Of the state's 29 coastal and inland water ports, the Port of Houston is the largest in size and handles more foreign cargo than any other port in the United States.
• Texas has 29 general-purpose foreign trade zones.

A Leader in High Tech, Research and Emerging Industries:

• Richardson's Telecom Corridor has the nation's highest concentration of telecommunications firms - more than 350 within a two-square-mile area.
• Texas is the nation's second largest producer of electronic components.
• The Texas Medical Center in Houston is the world's largest medical complex. More than 125,000 pass through it daily and it employs more than 51,000.

For the entire expanded document, visit the Texas International Economic Development Fact Sheet on the Secretary of State's website.

Asset Inventory: A Foundation for IT Asset Management--Technology Today Series

Sponsored by DIR at the large auditorium of the Robert E. Johnson Building on December 17, 1:30-3:30 pm, Austin. Before an agency can effectively manage its IT assets, it must identify them, locate them, and determine how these assets are being utilized. Collecting information the first step in developing a formal IT asset management process. For more information or to register, visit http://www.dir.state.tx.us/education/asset/index.htm.

TASSCC Vendor Advisory Group Meeting

Sponsored by TASSCC at the 3925 Braker Lane, 4th Floor, Austin on December 19, 11:30-1:00 pm. Vendors Advisory Group meetings are open to all Associate Members of TASSCC. Each Associate Member is welcome to send a representative. However, only VAG members may participate in voting when necessary. For more information or to RSVP, visit http://www.tasscc.org/vendors/meetings.html.

Congress Approves Bivins as Ambassador to Sweden

Nominated by President Bush on December 1, Congress approved State Senator Teel Bivins' appointment to be Ambassador Extraordinary and Plenipotentiary of the United States of America to Sweden. Senator Bivins has served as a member of the Texas State Senate since 1989.

Oberwetter approved as Ambassador to Saudi Arabia

James Curtis Oberwetter, a Texas oil lobbyist, will serve as Ambassador Extraordinary and Plenipotentiary of the United States of America to the Kingdom of Saudi Arabia. The Congress confirmed Oberwetter on December 9 on a voice vote. He will replace Texas oil lawyer Robert Jordan, who resigned the post in October of this year. Before his nomination, the lobbyist served as Vice President of Governmental and Political Affairs for Hunt Consolidated, Inc. He has also served as Chairman of the Texas Commission on Alcohol and Drug Abuse. Earlier in his life, Mr. Oberwetter worked as Press Secretary for then Houston Congressman George H.W. Bush. He earned his bachelor's degree from the University of Texas at Austin.

Governor Perry Designates Nichols Presiding Officer of the Texas Board of Professional Engineers

Gov. Rick Perry announced on December 8 the designation of James R. Nichols, P.E., of Fort Worth as presiding officer of the Texas Board of Professional Engineers for a term to be decided by the Governor. The board licenses qualified engineers, enforces the Texas Engineering Practice Act, and regulates the practice of professional engineering in Texas.

Nichols has served as chairman emeritus of the board of Freese and Nichols, Inc., since 2002. He has been employed with the firm for 53 years, where he has served as chairman, president and partner in the firm. He was appointed to the Texas Board of Professional Engineers by then Gov. George W. Bush in 2000 and is former chair of the board.

DHS Announces $179 Million for Port Security

The Department of Homeland Security announced on December 10 $179,025,900 million dollars in Port Security Grants. The Port Security Grant Program provides resources for security planning and projects to improve dockside and perimeter security, both vital to securing our the seaports. These new awards will contribute to security upgrades like new patrol boats in the harbor, surveillance equipment and the construction of new command and control facilities. This grant program represents one layer of the Department of Homeland Security's system of defenses for our nation's ports that includes monitoring the people, cargo and vessels entering our ports from the time they leave a foreign port to the time they arrive in the United States.

The Transportation Security Administration, the United States Coast Guard and the Department of Transportation's Maritime Administration evaluated the Port Security Grant Applications and selected the grant award recipients. The latest round of grants has been awarded to 442 projects in 326 locations to 235 applicant organizations from across the nation.

In addition to these awards totaling $179 million, the Department of Homeland Security also awarded $170 million from the FY'03 budget from the Port Security Grant Program in June, and $75 million in port security grants for specific projects from the FY '03 Supplemental Budget from the Office for Domestic Preparedness in May 2003.

Congressional Leaders Call for Public-Private Partnerships to Fight Cyberthreats

U.S. Representatives are calling for the Department of Homeland Security to partner with the private sector to encourage the development of cybersecurity programs and products. Rep. Mac Thornberry of Texas, chairman of the House Homeland Security Select Subcommittee on Cybersecurity, Science, Research and Development, charged that without the cooperation of the private sector, the United States will not be successful on this front. Given the government's massive purchasing power, the government should lead by example to help develop markets for security products, according to Thornberry.

Rep. Zoe Lofgren of California, the committee's ranking minority member drew attention to the fact that "most of the assets needing protection are in private hands." She also noted that the few incentives exist for companies to protect their systems from attack, a problem that DHS needs to confront.

The lawmakers also stated that the DHS needs to focus some of its funding on advanced theoretical research, such as studies on security protocols and advanced detection systems, as well as establishing means to measure the success of initiatives and programs that have been put in place for cybersecurity.