KBS Reference Desk: SB 943 (contracts for $1 million)

Q:        Our District plans to solicit bids for construction of a new elementary school. It is estimated that the cost of the facility will reach several million dollars. Are there any laws from the recent legislative session that would require the District to update its RFP and/or contract based on the estimated cost?

A:        Yes. Senate Bill 943 imposes new requirements for government contracts that result in the expenditure of $1 million or more in public funds.

Senate Bill 943 went into effect January 1, 2020 and amended the Texas Public Information Act (Chapter 552 of the Texas Government Code) in a variety of substantial ways, including adding a new Subchapter J. This new subchapter requires specific language in both contracts and procurement solicitations (such as RFPs/RFQs) for contracts valued at $1 million or more in public funds that fiscal year.

For a $1 million+ contract, specific language is now required in both the procurement solicitation and the contract related to a vendor’s obligations to safeguard “contracting information” with the governmental entity (e.g., bid responses, negotiation communications, bid tabulations, communications related to contract performance).  Both the solicitation and contract must contain language that requires the vendor to:

(1) preserve all contracting information as provided by the records retention requirements applicable to the purchasing governmental entity for the duration of the contract;

(2) promptly provide to the governmental entity any contracting information that is in the custody or possession of the vendor upon request; and

(3) on completion of the contract, either

(a) provide, at no cost to the governmental entity, all contracting information that is in the vendor’s custody or possession, or

(b) preserve the contracting information as provided by the records retention requirements applicable to the governmental entity. 

            Solicitations and contracts must now also contain the following specific provision:

“The requirements of Subchapter J, Chapter 552, Government Code, may apply to this bid/contract and the contractor or vendor agrees that the contract can be terminated if the contractor or vendor knowingly or intentionally fails to comply with a requirement that subchapter.”

Several types of contracts—mainly those relating to public securities—are excepted from the new requirements. For suggestions on specific contract provisions to include in your solicitations and resulting contracts, or to determine whether the new requirements apply to your bid or contract, we recommend seeking advice of your school district’s attorney.

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