PCS Procurement and Contract Management Handbook

1 Health and Human Services (HHS) System Procurement and Contract Management Handbook The HHS System and Procurement and Contracting Services Division (PCS) are committed to making PCS electronic and information resources (EIR) including all forms, documents, webpages, and software comply with state, federal and EIR accessibility requirements so that PCS information is accessible to everyone, including people with visual, hearing, mobility, cognitive, and other disabilities. Version January 13, 2022 (Revision History Log) Procurement and Contract Management Handbook , v. i Preface Within the past decade, Texas has experienced a significant increase in population. This increase has led to more services being needed to meet the challenges of the expanding population, which in turn has led to the Health and Human Services Commission (HHSC) engaging in more procurements and contracting opportunities. So, it follows, that proper procedures, policies, and guidelines must be in place to provide efficiency and proper oversight to the Procurement and contracting process, while simultaneously protecting the taxpayer s dollar; therefore, it is imperative that the HHSC Procurement and Contracting Services division (PCS) create a Handbook to address various issues in the Procurement and contracting process.

2 This HHS Procurement and Contract Management Handbook ( Handbook ) is designed to be a dynamic document; one that will evolve with legislative changes, best practices, and with feedback from program areas. As you read the Handbook and you find that minor changes need to be made, for example, typographical errors, please email with those suggested changes. Minor, non-substantive changes will be made to the Handbook upon receipt. If any division wants PCS to consider an amendment to any provision of the Handbook , such recommendations should be submitted to PCS at All recommendations will be considered; however, the final content of the Handbook is subject to the approval of the Deputy Executive Commissioner of PCS and/or the Chief Operating Officer or HHS Executive Commissioner, if escalation is necessary. Further, in considering substantive amendments and/or recommendations to the Handbook that could affect process and/or procedural changes to HHS divisions other than PCS, PCS will seek stakeholder input prior to approving and implementing such amendments and will provide messaging of proposed changes throughout the process and at resolution, allowing sufficient time to plan for such change.

3 More specifically, when substantive amendments and/or recommendations are submitted, within one week of receiving the proposed change, a member of PCS will contact the person who submitted the recommended change to gather more information. If, based on the information gathered, PCS determines that the proposed amendment or recommendation would benefit the Handbook , a member of the PCS team will arrange a meeting with identified stakeholders to review the proposed amendment or recommendation and review a draft of the proposed change. The identified stakeholders will then provide written feedback on the proposed change. The PCS member assigned to the change will review the written feedback and incorporate what is necessary to achieve the goal of the proposed recommendation. If necessary and pending the complexity and outcome of the proposed changes, PCS will also complete any research necessary with third-party agencies, consult with the Compliance and Quality Control division, the Office of Chief Counsel, HHS executive Management , and complete any other due diligence necessary to support the recommendation.

4 Thereafter, PCS will meet with the stakeholders one more time to ensure that the proposed change accurately reflects the goal and intended purpose of the amendment or recommendation. Once the amendment or recommendation is approved by the stakeholders, the amendment/recommendation will be submitted to the Deputy Executive Commissioner of PCS and/or the Chief Operating Officer or HHS Executive Commissioner for final approval. Once approved and properly messaged, the changes will be made to the Handbook and documented on the Revision History Log. PCS will complete a review of the entire Handbook biennially to reflect substantive amendments not previously made and to conform with laws enacted by the Texas State Legislature. It is the goal of PCS to make appropriate changes to the Handbook in a timely fashion so that the Handbook remains useful and relevant. Any questions concerning the Handbook should be sent to Procurement and Contract Management Handbook , v.

5 Ii TABLE OF CONTENTS TABLE OF CONTENTS .. ii General Information .. 7 1. Purpose .. 7 The Three Lines of Defense Model Relating to Risk .. 7 Standards and Authority .. 8 Applicability .. 9 2. Introduction .. 9 Procurement and Contracting Authority .. 10 Ethics and Professional Standards .. 11 Nondisclosure, Conflict of Interest, Nepotism Certification .. 13 3. Vendor Communications .. 15 4. Required Training .. 16 Certified Texas Contract Developer (CTCD) .. 16 Certified Texas Contract Manager (CTCM) .. 16 Licensed Attorney .. 17 Continuing Education and Certification Renewal .. 17 Required Cybersecurity Training for HHS and Contracted Staff .. 17 5. Procurement and Contracting Services Division (PCS) .. 17 PCS Procurement Teams .. 18 PCS Stakeholder Partners .. 24 6. Overview of HHS Agency Roles and Responsibilities .. 26 Customer Organizations Roles .. 27 PCS Roles .. 27 CQC Roles .. 27 PCS Operating Model .. 28 Management Pillars of Operations.

6 29 Procurement Planning .. 30 7. Planning and Development .. 31 Procurement Lead Times .. 31 Needs Assessment .. 32 Factors for Assessing Need .. 32 Risk Management .. 33 Contract Value Estimate .. 33 Procurement and Contract Management Handbook , v. iii Request for Information (RFI) .. 34 Procurement Planning Results and Outputs .. 35 Procurement Forecast and Action Plan (PFAP) .. 35 The Statement of Work (SOW) .. 36 Contractor Compensation .. 41 Determination of Payment Type .. 41 Selection Methodology Evaluation Team Selection & Scoring .. 42 Evaluation Criteria .. 47 Direct Contract Award Method .. 56 Historically Underutilized Business (HUB) Determination .. 57 Determination of Subrecipient, Recipient, or Contractor Relationship .. 59 Planning Exception Emergency Procurements .. 60 The Requisition .. 60 Procurement Methods: Solicitations and Grants .. 67 8. Procurement Methods .. 68 Texas Disaster Act of 1975.

7 68 State and Federal Surplus Property Program .. 69 Texas Correctional Industries (TCI) Purchases .. 69 State Use Program .. 70 CPA Statewide Contracts .. 71 Spot Purchases (Non-DIR) .. 73 9. Competitive Procurement .. 74 Informal Bidding (Non-DIR).. 75 Formal Bidding (Non-DIR) .. 75 Work Order Process .. 75 Information Technology Purchases .. 76 Printing 80 Conference and Meeting Room Space .. 82 Emergency Procurements .. 83 Proprietary Purchases .. 84 Consulting Services Contracts .. 85 Request for Proposal (RFP) .. 88 RFP Construction .. 89 Request for Qualifications (RFQ) .. 89 Drafting the Solicitation .. 90 Procurement and Contract Management Handbook , v. iv Specification 90 Entering a Requisition for an RFx or IFB Procurement .. 92 10. Non-Competitive Contracts, Agreements, and Open Enrollments .. 92 Non-Competitive Contracts and Agreements .. 92 Open Enrollment Contracts .. 94 11. Grants .. 96 Request for Applications (RFA).

8 97 Determination of Subrecipient, Recipient, or Contractor Relationship Process .. 98 Non-Competitive Direct Grant Award .. 101 12. Solicitation Review .. 101 System Contracting .. 101 Compliance and Quality Control Review (CQC) .. 102 Contract Advisory Team (CAT) Review .. 102 Quality Assurance Team (QAT) Review Major Information Resources Projects (MIRP) .. 102 CQC Review of Solicitations and Evaluations .. 104 Solicitation Advertisement .. 104 Vendor Conference .. 105 Vendor Selection .. 106 13. Vendor Selection .. 107 Bid Room .. 107 Screening Responses Bids, Proposals, and Applications .. 107 Litigation History Review .. 111 Financial Capacity Review .. 112 Reference Checks .. 112 Notice of Disqualification and Intent to Award (aka Tentative Award Procedure) .. 112 Contract Formation and Award .. 113 14. Contract Formation and Award .. 114 Contract Negotiations .. 114 Purchase Orders and Contracts .. 115 Procurement Card (State Issued Credit Card).

9 116 Contract Terms .. 116 Insurance .. 119 Bonds .. 119 Prevailing Wage Rates .. 123 Uniform General Conditions for Construction .. 123 Procurement and Contract Management Handbook , v. v Grant Awards .. 124 Coordination and Preparation of Contract Documents .. 125 Certification Regarding Lobbying .. 128 Required Screening for Potential Contractors .. 128 Disclosure of Interested Parties .. 130 Contract Award .. 131 Vendor 136 Bid Protests .. 136 Contract Management .. 137 15. Contract Management .. 138 System of Contract Operation and Reporting (SCOR) .. 138 Contract Manager Responsibilities .. 138 Contractor Training and Technical Assistance .. 139 Contract Oversight .. 140 Oversight of Grant 141 Contract Risk Assessment .. 142 Contract Monitoring Plan .. 144 Contract Monitoring .. 144 Contractor and Grantee Screening Post-Award Checks .. 145 Contract Monitoring Activities .. 145 Assessing Internal Controls.

10 150 HSP Monitoring and Progress Assessment Report (PAR) .. 151 Monitoring DUA Compliance .. 151 Monitoring of Staff Augmentation Contractors .. 151 Contract Monitoring Documentation and Follow-Up Activities .. 152 Enhanced Contract and Performance Monitoring .. 153 Financial Management of Contracts .. 154 Review for Amendment, Renewal or Re- Procurement .. 155 Contract Amendments, Bridge Extensions and Renewals .. 155 Contractor Performance Issues and Contract Remedies .. 159 Escalation of Contract Issues .. 160 16. Contract Expiration, Termination, Closeout, and Settlement .. 161 Contract Expiration .. 161 Contract Termination .. 161 Contract Closeout .. 163 Procurement and Contract Management Handbook , v. vi Grant Closeout .. 164 Contract Settlement .. 164 Provide Contractor with Settlement .. 165 17. Contract Records .. 166 System of Contract Operation and Reporting (SCOR) .. 166 Contract File Checklists .. 166 Disclosure or Audit of Contract Records.