HBA-NIK S.B. 555 76(R)    BILL ANALYSIS


Office of House Bill AnalysisS.B. 555
By: Ogden
Transportation
4/23/1999
Engrossed



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if the lowest bid is withdrawn or the lowest bidder breaches the contract.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.  

S.B. 555 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
lowest bidder in certain instances.  S.B. 555 grants the commission the
authority to adopt rules relating to bid withdrawals and the awarding of
contracts to the second lowest 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), except as provided by Section
223.005 (Bids on Contracts Involving Less Than $300,000). 

(b) Authorizes the commission to accept or reject the bids. 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, for a contract involving an
amount less than $100,000, 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
TxDOT will allow a bid withdrawal and consider awarding a contract to the
second lowest bidder. 


SECTION 2.  Amends Section 223.005, Transportation Code, to redesignate
existing Subsection (d) to Subsection (b).  Deletes the existing text of
the subsections (b) and (c), regarding the current process for tabulating,
accepting, and rejecting bids. 

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