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SUBCHAPTER J. Procedures for Vendor Protests of Procurements 28 TAC §1.1101 1.1107

The Commissioner of Insurance adopts new §§1.1101 - 1.1107 concerning procedures for vendor protests. Sections 1.1101 - 1.1107 are adopted without changes to the proposed text published in the September 14, 2001 issue of the Texas Register (26 TexReg 7065) and will not be republished.

The new sections are necessary to establish the procedures for vendor protests of procurements in accordance with §2155.076 of the Texas Government Code. Section 2155.076 requires that each state agency by rule shall develop and adopt protest procedures for resolving vendor protests regarding purchasing issues. The rules must also include standards for maintaining documentation about the purchasing process to be used in the event of a protest.

The new sections set forth the procedures for vendor protests. Section 1.1101 contains definitions and states that the purpose of the subchapter is to implement the provisions of Section 2155.076 of the Government Code. Section 1.1102 addresses the procedures for filing a bid protest. Section 1.1103 describes the process for review and determination of a bid protest. Section 1.1104 addresses appeals of a bid protest determination. Section 1.1105 states that protests and appeals must be filed timely in order to be considered. Section 1.1106 describes the status of the procurement during a protest and appeal. Section 1.1107 indicates the period of time that the department must retain documents related to the procurement.

No comments were received regarding adoption of the new sections.

The new sections are adopted under the Government Code §2155.076 and the Insurance Code §36.001. Section 2155.076 provides that each state agency shall adopt by rule protest procedures for resolving vendor protests regarding purchasing issues. Section 36.001 provides that the Commissioner of Insurance may adopt rules to execute the duties and functions of the Texas Department of Insurance.

§1.1101. Purpose. The purpose of this subchapter is to provide a protest procedure to be used by any actual or prospective bidder, offeror, proposer, or contractor who is aggrieved in connection with the solicitation, evaluation, or award of a contract by the department. These procedures are consistent with rules adopted by the General Services Commission.

§1.1102. Filing of Protest.

(a) An actual or prospective bidder, offeror, proposer, or contractor who is aggrieved in connection with the solicitation, evaluation, or award of a contract by the department may file a written protest. The protest must be addressed to the department's chief financial officer and must be received no later than 10 working days after the aggrieved person knows, or should have known, of the occurrence of the action which is protested.

(b) The protest must be sworn and must contain the following:

(1) a specific identification of the statutory or regulatory provision(s) or procedure(s) that the action complained of is alleged to have violated;

(2) a specific description of each act alleged to have violated the statutory or regulatory provision(s) or procedure(s) identified in the protest;

(3) a precise statement of the relevant facts;

(4) an identification of the issue or issues to be resolved;

(5) argument and authorities in support of the protest; and

(6) a statement that copies of the protest have been mailed or delivered to all other identifiable interested parties.

(c) Upon written request, the department will furnish to the requestor a list of interested parties, as reflected in the records of the department's Purchasing and Contracts Administration Division.

§1.1103. Review of Protest and Determination.

(a) Upon receipt of a timely protest that conforms with this subchapter, the chief financial officer will review the protest. The chief financial officer may request written responses to the protest from any department staff and may request from department staff any and all documents related to the protest. The chief financial officer may solicit written responses to the protest from other interested parties.

(b) The chief financial officer has the authority, prior to appeal to the Commissioner, to settle and resolve the dispute concerning the solicitation or award of the contract.

(c) If the protest is not resolved by mutual agreement, the chief financial officer will issue a written determination on the protest.

(1) If the chief financial officer determines that no violation of rules, statutes, or procedures has occurred, the chief financial officer shall inform the protesting party and all other interested parties of that determination by letter, which must set forth the reasons for the determination.

(2) In a case where a contract has not been awarded, if the chief financial officer determines that a violation of the rules, statutes, or procedures has occurred, the chief financial officer shall inform the protesting party and all other interested parties of that determination by letter. The letter must set forth the reasons for the determination and may set forth any appropriate remedial action.

(3) In a case where a contract has been awarded, if the chief financial officer determines that a violation of the rules, statutes, or procedures has occurred, the chief financial officer shall inform the protesting party and other interested parties of that determination by letter. The letter must set forth the reasons for the determination and may set forth any appropriate remedial action, which may include canceling or voiding the contract to the extent allowed by law.

§1.1104. Appeal.

(a) A protesting party or any other interested party who is not satisfied with the determination of the chief financial officer may appeal the determination to the commissioner. The appeal must be submitted in writing to the commissioner and received in the office of the commissioner no later than 10 working days after the date of the chief financial officer's determination. The appeal is limited to review of the chief financial officer's determination.

(b) The appealing party must mail or deliver copies of the appeal to all other interested parties. The appeal to the commissioner must contain an affidavit that such copies have been provided.

(c) Upon receipt of a timely appeal that conforms with this subchapter, the commissioner may designate one or more members of the department's executive management staff or other employees of the department to review the protest, the determination of the chief financial officer, and the appeal of the determination. The designee(s) will prepare and submit to the commissioner a written recommendation regarding the appeal.

(d) The written decision of the commissioner shall be the final administrative action of the department regarding the protest and appeal.

§§§1.1105. Failure to File Timely. Protests and appeals that are not filed timely will not be considered, unless good cause for delay is shown or the commissioner determines that a protest or appeal raises issues significant to the department's procurement practices or procedures.

§1.1106. Status of Procurement During Protest and Appeal. If the contract being protested has not been awarded, upon the timely filing of a protest and appeal under these procedures, the department shall not proceed further with the solicitation or award of the contract unless the chief financial officer, in consultation with the appropriate executive management staff, makes a written determination that the award of the contract without delay is necessary to protect substantial interests of the State of Texas.

§1.1107. Retention of Documents. The department will maintain all documentation about the purchasing process to be used in the event of a protest or appeal in accordance with the department's retention schedule.



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