The information below is subject to change because it is updated periodically to incorporate the results from SAO reports with a significant focus on contracting activities as they are released. The reports included were released as of 1/15/2021.
Chapter 1 - The Office Generally Planned, Procured, and Formed the Web Portal Contract in Compliance with Requirements; However, It Should Strengthen Its Policies and Procedures for Those Processes
The Office of the Attorney General (Office) generally planned and procured the Web Portal contract with Adjacent Technologies Inc. in accordance with applicable statutes, rules, and State of Texas Contract Management Guide requirements.
However, the Office should strengthen its contract management policies and procedures and contract formation process. The Office also should strengthen its processes to ensure that it complies with contracting-related document posting requirements.
Chapter 2-A - The Office Generally Planned, Procured, and Formed the YoungWilliams Contract in Compliance with Requirements; However, It Did Not Have All Supporting Documentation or Updated Policies and Procedures
The Office generally planned and procured the YoungWilliams Contract in accordance with applicable statutes, rules, and State of Texas Contract Management Guide requirements. The Office did not have all supporting documentation for the YoungWilliams contract related to planning and procurement requirements.
The Office’s current contracting policies and procedures allowed for deviations from those policies and procedures and did not always align with current practices.
Chapter 1 - The Comptroller’s Office Based TXMAS Contracts on Other Competitively Bid Contracts, But It Should Strengthen Efforts to Ensure That TXMAS Contracts Meet Customers’ Needs and Protect the State’s Interests
As required by Texas Government Code, Section 2155.502, the Comptroller’s Office based TXMAS contracts on contracts that the federal government or other governmental entities had previously bid using a competitive process.
However, the Comptroller’s Office should strengthen its efforts to ensure that TXMAS contracts meet customers’ needs. For example, the Comptroller’s Office has not conducted annual studies of state agency purchases required by Texas Government Code, Section 2155.072, to determine whether the State would benefit by adding certain services to statewide contracting programs such as TXMAS. In addition, ensuring that state agencies submit required vendor performance reports for TXMAS purchases could help the Comptroller’s Office evaluate future contract proposals and assess whether TXMAS contracts meet customers’ needs.
Chapter 2-A - While the Commission Complied with Certain Contract Planning Requirements, It Should Strengthen Its Planning Process
In planning both contracts audited, the Commission prepared solicitation documents that included detailed specifications for quantity and quality of the products to be procured, as required by the State of Texas Contract Management Guide.
However, the Commission did not retain documentation showing that it performed an adequate risk assessment for either contract as required by the State of Texas Contract Management Guide. The Commission also did not have supporting documentation showing that it performed an adequate needs assessment or cost estimate for the 9-1-1 Test Lab Services contract as required by the State of Texas Contract Management Guide.
Additionally, the Commission did not include evaluation criteria or best value considerations in the solicitation documents for the 9-1-1 Test Lab Services contract as required by the State of Texas Contract Management Guide.
Chapter 2-A - The Agency Complied With Most Contract Procurement Requirements
The Agency had sufficient controls in place to help ensure compliance with most procurement requirements. Specifically, the Agency advertised the solicitations tested in accordance with Texas Government Code, Chapter 2155; it ensured that each proposal included all of the information as required by the solicitation before it accepted the proposal; and it implemented consistent evaluation procedures. The Agency also complied with the statutory requirements for vendor selection for three of four procurements tested. The Agency purchaser responsible for overseeing the procurements tested was a Certified Texas Procurement Manager as required by statute.
Chapter 4 - The Agency Complied With Most Requirements for Contract Planning and Formation; However, It Should Strengthen Some Aspects of Those Processes
The Agency had processes to help ensure that it performed most required activities related to contract planning and formation. However, the Agency should strengthen its processes to ensure that (1) its policies and procedures address all applicable areas, (2) it has support for and consistently develops cost estimates, and (3) its contracts include all required vendor affirmations.
Chapter 1-B - The Commission Did Not Adequately Review the Solicitations for Each Contract Audited to Ensure That the Advertised Cost Estimate Matched the Project’s Objectives and Scope
The Commission did not adequately review the solicitations, and as a result, it did not advertise the correct project cost estimate for either contract audited. For the Admiral Nimitz Museum contract, the Commission advertised a cost estimate of $4.0 million, instead of the $2.4 million that was supported by the project objectives and scope included in the solicitation. For the San Felipe Museum contract, the Commission advertised a cost estimate of $4.0 million, instead of the $5.4 million that was supported by the project objectives and scope included in the solicitation.
Chapter 1-C - The Commission Complied with Some Procurement Requirements for Both Contracts; However, It Should Strengthen Its Process to Ensure It Complies with All Applicable Requirements
The Commission complied with some contract procurement requirements for both audited contracts, such as posting both solicitations to the Electronic State Business Daily and using the evaluation criteria that was included in the solicitations. For both contracts audited, the Commission had weaknesses in its procurement processes related to opening solicitation bids, providing guidance to evaluation team members, and ensure that its board members obtain required contract training.
Chapter 3 - The Commission Adequately Monitored the Construction of the San Felipe Museum; However, It Did Not Perform Certain Required Monitoring Activities
The Commission adequately performed oversight activities related to the construction progress of the San Felipe Museum contract. However, the Commission did not (1) monitor the contractor for compliance with certain contract requirements, (2) ensure that contractor payments were sufficiently supported and accurate, or (3) ensure that the contract manager received the appropriate training and certification.
Chapter 1 - The Department Planned, Procured, and Formed the Atos Contract in Accordance with Applicable Requirements, But It Should Improve Certain Aspects of Contract Oversight
The Department of Information Resources (Department) planned, procured, and formed the data center services contract with Atos Governmental IT Outsourcing Services LLC (Atos) in accordance with applicable requirements. However, the Department should improve certain aspects of its contract oversight. The Department had not updated its contract management plan or its risk assessment for the Atos contract since the contract was assigned to Atos in May 2015.
In addition, the Department’s contract monitoring system, Salesforce, did not have adequate controls for the approval and authorization for the payment of invoices for the Atos contract.
The Department also did not adequately control access to a network location where it maintained key invoice review spreadsheets.
Chapter 2-A - The Department Planned and Formed the C&T Contract in Accordance with Applicable Requirements, But It Should Improve Certain Aspects of Contract Procurement
The Department planned the procurement through which it awarded the C&T contract in accordance with the requirements in the State of Texas Contract Management Guide.
The Department adequately performed certain contract formation activities for the C&T contract.
The Department adequately performed certain procurement activities for the C&T contract, such as conducting contract negotiations. However, the Department should improve certain aspects of its procurement process.
The Department should improve controls related to its receipt of proposals. The Department properly documented its receipt of C&T’s proposal in accordance with Department procedures and as the State of Texas Procurement Manual requires. However, it scored two other vendors’ proposals without maintaining evidence that it had received them by or on the due date.
The Department should score proposals using the methodology specified in its solicitation.
Of the 17 Department employees who were involved in planning the procurement, preparing the solicitation, performing preliminary reviews of proposals, and evaluating proposals, 7 (41 percent) did not sign required nondisclosure statements and 9 (53 percent) did not sign required disclosure statements as required.
Chapter 2-C - The Department Should Improve Certain Aspects of Contract Training
The Department notified new and existing board members of contract management training required by statute. However, because it did not review whether its board members completed that training, the Department could not provide documentation to show that one board member completed that training. Additionally, although the Department required board members to receive that training “promptly,” it did not specify a due date for receiving that training.
Chapter 1-A - The Commission Did Not Comply with Requirements for Emergency Purchases
The Commission's procurement process did not comply with certain requirements that help to ensure the reasonableness and necessity for the three emergency purchases tested. The Commission (1) did not ensure that one of the procurements qualified as an emergency purchase because it was not the result of unforeseeable circumstances, and (2) it did not document the reasons for selecting a vendor for the other two emergency purchases.
Chapter 2-B - The Commission Obtained Required Exemptions from the State’s Data Center Services Program for the Two Applicable Competitive Procurements Tested
For the two applicable competitive procurements tested, the Commission obtained required exemptions to allow the awarded vendors to host the information technology systems provided instead of using the State's Data Center Services Program. Specifically, the Commission obtained exemptions for (1) its contract for the Aging Information Management System and (2) its contract for the Provider Management and Enrollment System.
Chapter 3-C - The Commission Did Not Ensure That Its Employees Complied with Disclosure Requirements for Its Procurements, and It Did Not Consistently Develop Reasonable Cost Estimates
The Commission had weaknesses in its processes for (1) ensuring compliance with statutory disclosure requirements related to potential conflicts of interest and (2) developing reasonable cost estimates for one of the competitive procurements tested.
Chapter 3 - The Commission Generally Complied with State Requirements for Contract Planning, Procurement, and Formation
The Commission generally complied with applicable statutes and State of Texas Contract Management Guide requirements for contract planning, procurement, and formation for the contract.
However, the Commission did not specify in the request for proposals the weight that would be applied to each evaluation criteria as required by the State of Texas Contract Management Guide.
Chapter 2 - The Commission and Department Generally Complied with Statutes and Requirements for Contract Planning
Both the Health and Human Services Commission (Commission) and the Department established contracting policies and procedures that provide a standard entity-wide contracting process. Additionally, the Commission ensured that purchasers involved with the Morris & Dickson Company contract complied with training and certification requirements.
However, the Department did not perform a preliminary risk assessment, as required by the State of Texas Contract Management Guide, to determine the level, type, and amount of management, oversight, and resources needed to plan and implement the contract.
Chapter 2-A - The Department Executed the Original Contract Without Obtaining a Required Exemption, Which Resulted in a Contract Amendment That Increased Costs and Caused Project Delays
The Department’s contract with Genesis Systems Inc., executed June 1, 2016, required the vendor to host TxEVER outside the Statewide Data Center Services Program. However, the Department did not obtain the required exemption from the Governor and the Department of Information Resources that would allow TxEVER to be hosted outside the Statewide Data Center Services Program.
On September 1, 2016, the Department of Information Resources sent a written notification to the Department that the contract was non-compliant with state requirements concerning the Statewide Data Center Services Program. On June 22, 2017, the Department executed Amendment No. 1 to its contract with Genesis Systems Inc. Amendment No. 1 changed the contract’s scope of work to require TxEVER to be hosted by the Statewide Data Center Services Program, which led to additional costs and delays for the TxEVER project.
Chapter 4 - The Department Complied with Contract Planning Requirements for a Major Information Resources Project
The Department completed required contract planning activities necessary for defining the contract objective and the procurement approach for the TxEVER solicitation, including complying with the State’s Quality Assurance Team’s requirements for a major information resources projects.
Chapter 1 - The Department Did Not Sufficiently Manage and Monitor the Pharmaceutical Wholesaler Contract to Verify That Morris & Dickson Company Performed According to the Terms of the Contract
The Department of State Health Services (Department) did not sufficiently manage and monitor its pharmaceutical wholesaler contract with Morris & Dickson Company to verify that the contractor performed according to the terms of the contract.
The Department should sufficiently design payment processing controls for payments to Morris & Dickson Company for the contract audited.
The Department did not make payments within the time lines set by the contract or pay interest, and it paid service charges that were not included in the contract as a result of those late payments.
The Department did not have a contract manager assigned to the Morris & Dickson Company contract to oversee compliance with contract terms, and it did not always conduct and document certain monitoring activities.
The Department did not have documented contract management policies and procedures for governing certain aspects of vendor contracts that are primarily for goods.
Chapter 2 - The Commission and Department Generally Complied with Statutes and Requirements for Contract Planning
Both the Health and Human Services Commission (Commission) and the Department established contracting policies and procedures that provide a standard entity-wide contracting process. Additionally, the Commission ensured that purchasers involved with the Morris & Dickson Company contract complied with training and certification requirements.
However, the Department did not perform a preliminary risk assessment, as required by the State of Texas Contract Management Guide, to determine the level, type, and amount of management, oversight, and resources needed to plan and implement the contract.
Chapter 3-A - The Coordinating Board’s Contract for a New Loan Management System Complied with Most Requirements
The Coordinating Board administered the audited contract in accordance with applicable statutes and the State of Texas Contract Management Guide. Specifically, the Coordinating Board (1) performed contract planning activities necessary for determining the contract objectives; (2) identified the appropriate procurement method; (3) formed the contract with all key contract provisions required by the State of Texas Contract Management Guide; and (4) monitored key contract deliverables.
Chapter 1-A - The Agency’s Management Override of Controls Affected the Tembo Contract Award Outcome
On multiple occasions, Agency management overrode contracting controls in order to award the contract to its preferred vendor when it:
•Inappropriately requalified Tembo’s proposal,
•Incorrectly advanced Tembo’s proposal to the final round over a higher scoring proposal, and
•Awarded Tembo the contract over another vendor with the same final score without an explanation for that decision.
Chapter 2 - The Agency Did Not Have an Adequate Control Environment to Protect the Integrity of the SPEDx Procurement
Significant weaknesses in the Agency’s control environment resulted in the Agency awarding the contract to SPEDx without following steps designed to safeguard the procurement process. When taken together, the following factors adversely affected the integrity of the procurement: (1) the Agency’s failure to complete critical planning and procurement steps, including the selection of SPEDx prior to fully identifying the Agency’s needs; (2) the use of a non-competitive sole source procurement to award the contract to SPEDx without completing sole source processes; and (3) the Agency’s primary decision maker’s preexisting professional relationship with a SPEDx subcontractor.
Chapter 2 - The Agency Generally Complied with Statutes and Requirements for Contract Planning and Procurement; However, It Should Strengthen Controls Over Certain Planning, Procurement, and Formation Processes
The Agency established and generally followed entitywide contracting policies and procedures that were consistent with the State of Texas Contract Management Guide to award the fiscal year 2016 TxVSN contract. However, the Agency did not post certain contracting procedures to its Web site or provide a link to those procedures for inclusion on the Comptroller’s Web site, as required. While Agency contract managers met training and certification requirements and applicable personnel completed nondisclosure and conflict of interest statements, the Agency did not ensure that all purchasing personnel completed required disclosure statements prior to awarding the fiscal year 2016 TxVSN contract. The Agency also did not fully define the contract deliverables in its solicitation, which would have helped facilitate the Agency’s monitoring of those deliverables.
Chapter 3 - The University Complied with Applicable Requirements in Texas Education Code, Section 51.9337
The University complied with Texas Education Code, Section 51.9337, which included requirements to implement a code of ethics, policies for internal investigations, a contract management handbook, contract delegation guidelines, training for officers and employees involved in the contracting process, and internal audit protocols.
The University also implemented policies to address the training requirements in Texas Education Code, Section 51.9337(b)(5). However, the University did not provide documentation to support that all members of its board of regents had attended required training related to executing contracts or awarding contracts, including training in ethics, selection of appropriate procurement methods, and information resources purchasing technologies (as the University’s policies required).
Chapter 2 - TAMU San Antonio Should Document Its Processes for Monitoring of FSSA Contractor Performance and Improve Fiscal Monitoring
Texas A&M University - San Antonio (TAMU San Antonio) should (1) document its monitoring processes of FSSA contractor performance and (2) enhance its fiscal monitoring and FSSA change approval process to ensure that it pays the correct amount for services it receives. In addition, TAMU San Antonio should ensure that employees who administer FSSAs obtain the required contract training and certifications.
Chapter 1-A - The System Complied With Selected Contract Planning and Procurement Requirements
The System performed certain contract planning and procurement tasks in compliance with applicable requirements.
Chapter 3-A - The System Implemented Contracting Policies, Procedures, and Training in Accordance with Requirements
The System complied with certain statutory contracting requirements such as developing a contract management handbook and completing training requirements.
Chapter 1 - While the System Planned, Procured, and Formed the HSC Contract in Accordance with Most Applicable Requirements, It Should Strengthen Its Evaluation Scoring Process
The System complied with most applicable requirements to plan, procure, and form the HSC contract. However, the System should strengthen its process for evaluation scoring.
Chapter 1 - The University Planned and Formed the Basketball Arena and Chemical Waste Contracts in Accordance with Applicable Requirements
The University of Houston (University) planned and formed its two contracts related to basketball arena enhancements and chemical waste disposal services in accordance with applicable statutes and its Contract Management Handbook.
Chapter 4-A - The University Complied with Applicable Requirements Related to Contracting Policies, Procedures, and Training
The University implemented policies and procedures to address applicable contract-related requirements in Texas Education Code, Section 51.9337, and Texas Government Code, Chapter 2261, Sections 253, 254, and 256.
Chapter 1 - The System Planned, Procured, and Formed the Audited Contract in Accordance with Applicable Requirements
The University of North Texas System (System) complied with applicable statutes and its Contracting Handbook (May 2012) to plan, procure, and form the contract for the construction of its Interdisciplinary Research Building at the University of North Texas Health Science Center at Fort Worth.
Chapter 3 - The System Substantially Complied with Applicable Requirements Related to Contracting Policies, Procedures, and Training
The System implemented policies and procedures to address most of the applicable contract-related requirements in Texas Education Code, Section 51.9337, and Texas Government Code, Chapter 2261, Subchapter F. However, the System should ensure that it (1) continues to develop and approve policies related to the use of institutional resources and ethics training; (2) includes all significant contract components in its Contract Management Handbook; and (3) maintains documentation to support that all individuals involved in the contracting approval process received all required training.
Chapter 1 - The Department Complied with State Requirements for Contract Planning, Procurement, and Formation for the Contracts Audited
The Department of Criminal Justice (Department) complied with applicable statutes and the State of Texas Contract Management Guide for contract planning, procurement, and formation for (1) its four contracts with Corrections Corporation of America for the operation and management of the four state jail facilities (state jail contracts), awarded in January 2011, and (2) its contract with Sunrise IT Solutions Group for the installation of fiber optic network cabling at multiple Department units and facilities (UNIR contract), awarded in October 2016.
Chapter 1-A - The Department Did Not Use the Appropriate Procurement Method for the Texas Conference of Urban Counties Contract Due to Weaknesses in the Planning Process.
As a result of not properly planning the procurement for JCMS services, the Department did not use the appropriate procurement method for its contract with Urban Counties. Specifically:
The Department inappropriately procured those services in January 2017 as a proprietary purchase with Urban Counties. A proprietary purchase is for products or services that have distinctive characteristics for which only one vendor can provide.
The Department did not properly plan a subsequent competitive request for offer (RFO), which it canceled after scoring the five responses received, asserting that the scoring did not accurately reflect the technical requirements.
It then extended the proprietary contract with Urban Counties, which had submitted a proposal to that competitive RFO and did not receive the highest score. As of May 2019, the proprietary contract was still in effect, and a new contract based on a competitive solicitation has not been executed.
Chapter 1-B - The Department Reissued the TrueCore Contract Without Competitively Rebidding
The Department made the decision to create and issue a new contract to the same vendor (TrueCore) without following the procurement process steps such as planning, method determination, evaluation, and award. Although changes were made to improve the contract, they could have been made with amendments, as the changes were to procedures and how services were delivered, not to the services provided.
Chapter 2 - While the Commission Appropriately Planned and Formed Both Contracts Audited, It Should Improve Its Processes Related to Conflicts of Interest and Non-Disclosure Forms
The Commission generally planned and formed the waste removal contract and the Superfund-related contracts in accordance with applicable statutes, rules, and its policies and procedures. However, the Commission should improve its process related to conflicts of interest and non-disclosure and develop procedures for assessing fraud, waste, or abuse and for reporting liquidated damages assessed or collected, when applicable.
Chapter 1 - The Division Performed Required Planning for the Capital Construction Projects Tested
For the 23 capital construction projects tested, the Parks and Wildlife Department’s (Department) Infrastructure Division (Division) performed required planning necessary to identify each project’s needs and develop a plan to meet those needs.
Chapter 1 - The Commission Generally Planned, Procured, and Formed the Pollard and IGT Contracts According to Applicable Statutes, Rules, Office of the Comptroller of Public Accounts Requirements, and Commission Policies and Procedures
While Texas Government Code, Section 466.105, exempts the Texas Lottery Commission (Commission) from many statutory contracting requirements, the Commission has voluntarily adopted rules and policies to follow certain statewide requirements for contract planning and procurement.
For the Pollard Banknote Limited (Pollard) contract audited and IGT Solutions Corporation (IGT) contract audited, the Commission generally complied with applicable statutes, rules, Office of the Comptroller of Public Accounts requirements, State of Texas Contract Management Guide requirements, and Commission policies and procedures to ensure that it performed the activities discussed below. However, the Commission (1) did not require contracting personnel and evaluation team members to sign conflict of interest forms and (2) did not require contracting personnel to sign non-disclosure forms for the contracts audited, as required by Texas Government Code, Sections 2261.252 and 2262.004 (the Commission is not exempt from those requirements). The Commission has developed procedures that require contracting personnel to complete those forms for future contracts.
Chapter 1-A - The Department’s Facilities Section’s Processes Do Not Ensure That Its Contracts Are Administered in a Consistent Manner
The Department’s Facilities Section does not have a comprehensive set of approved policies and procedures for its administration of facilities-related contracts, including planning, procurement, formation, and oversight. Having detailed policies and procedures for all aspects of the Facilities Section’s planning, procurement, formation, and oversight processes would help ensure that facilities-related contracts are administered in a consistent and effective manner.
Chapter 3-A - The Department’s Facilities Section Planned, Procured, and Formed the Audited Contract in Accordance with Applicable Requirements
The Department’s Facilities Section planned, procured, and formed the audited contract in accordance with applicable requirements.
Chapter 1-B - The Department Lacks a Fully Established Framework for the Design-build Procurement Process to Ensure Consistency and Accuracy Across All Design-build Projects
The Department lacks policies and procedures to ensure that contracts for design-build projects are procured in a consistent manner.
Auditors identified inconsistencies and weaknesses in the Department’s procurement for the four projects audited.
• The Department did not document its determination to use the design-build method for the Energy Sector Road Repair project; the IH35-E (Managed Lanes) project; the US 181 Harbor Bridge Replacement project; or the SH 99 (Grand Parkway) Segments H, I-1, and I-2 project.
• The Department did not ensure that the addenda to the requests for qualifications and requests for proposals were approved by the Department’s authorized representatives identified for each project.
• The Department did not ensure that all personnel who evaluated the qualifications statements and proposals completed an individual scoring worksheet, as required.
• The Department did not have evidence that it considered a contractor’s past performance during the evaluation process.
• The Department did not consistently retain all required contract procurement records.