ALC-Executive Subcommittee

All right, members, if we can, we'll go get started, gonna call the executive subcommittee of Legislative counsel to order. First on the agenda is Mr. Tom Arnold with Acasso Consulting. Mr. Arnold, you may proceed when, once you recognize yourself. Thanks, Senator Gilmore. So, uh, my name's Tom Arnold with Picasso Consulting. I was here 3 weeks ago to present our recommendations for this report, We started in October with a goal of ensuring that rule and procurement practice aligns with statutory intent. Uh, we've submitted our draft report that includes 16 findings and 63 recommendations, and we'll walk through a subset of those recommendations today. Want to thank the team at OSP, the agency staff that we were able to speak to and the team at BLR for all of their help in getting through this report. We've received nothing but excellent support from everybody and wanted to say thank you for that. I'd also like to acknowledge my team I have with me Max Braam and Chalai Rei as well as, uh, Daniel Bond and Nicholas Caldari, who were not here today. They contributed, uh, very much to the creation of this report, and I'd like to thank them for their effort. So first I'd like to walk through the process through with which we conducted this review. This is the same material that I would like to have this for the record, um. Over the past few months, we've reviewed a broad range of procurement documentation, the review also involved interviewing legislators and subject matter experts. In addition to the statutes and rules, we reviewed 3 examples solicitations and nearly 100 policy and training files. We conducted 9 interviews with 13 individuals including legislators, OSP leadership and staff and agency procurement professionals who are listed here. Our report is divided into 10 main sections and also includes various appendices with respect to the materials we reviewed and also includes in detailed proposed rule red lines for the vast majority of our recommendations that involve rules. These are the 16 findings that we reviewed last time. I'd like to move over though into our recommendations themselves. We highlighted a subset of our recommendations, the first one here is that the level of depth and information covered by the procurement manual and its related policies should be increased so that it can serve as a central source of procurement information for all phases of the process for everyone involved. We have plenty of talented procurement professionals in the state, but a number of individuals who are involved in the procurement process do that as a part-time job and having that manual and in the policies provide the most amount of information. is helpful to ensure the process is followed accurately. Moving down to recommendation 13, uh, and also recommendation one for these two go hand in hand, uh, an increased level of details should be provided in the available procurement training modules and support of individuals who are not fully immersed in the procurement process. And then in-depth procurement training should be provided on all steps of the process, either in recurring interactive in-person sessions or via recorded online courses to all agencies conducting RFPs. Um, this recurring interactive live training can be really much more effective than a self-led series of slides, and so having those on a regular cadence, uh, so that people can interact with procurement training individuals to, to ask questions and learn more is very helpful. And if recording live sessions for use in between the scheduled sessions can help trainees engage with the lessons beyond just words on a page as it currently exists, uh, and provides a refresher material even for people who are in the sessions when they were recorded. Moving on to section 3 recommendation 2. we're recommending that guidance should be developed on when to use the map RFP process and when to use traditional RFPs based on the particular characteristics of each method and how they best fit different solicitation needs. Map is currently not covered in the procurement manual. I believe that will be updated soon. Um, it is, it is a great method when you have flexibility in how services and solutions are delivered, but traditional RFPs work better when there are more strict requirements to adhere to and so having both methodologies is, is great having the map option is great, but having um having the traditional RP available and then providing guidance on when to consider each. One is important. Recommendation 43 is that more detailed guidance should be developed and implemented in relation to expectations for respondent experience and minimum company size requirements for procurements. This is an important principle that we want to encourage competition, but there is a point at which we are attracting unqualified bidders through standards that are too open. We've seen examples where two small companies struggle to roll out an important program on schedule and caused different, uh, different problems to be dealt with later. And so, detailed guidance on, on how to consider what minimum standards should be is important to help successful procurements. And then, uh, recommendation 4 for more detailed guidance should be provided on establishing the time between solicitation posting and response deadline, including cases where an RFP is reissued after an initial posting. We saw that the ADE educational Freedom Accounts RFP was posted for just 3 weeks over the Christmas holiday, uh, released in mid December with the due date right after the new year, which is a very short period of time in my experience for a systems RFP, um, it was then extended to 4 weeks and then reissued for a period of two weeks, all of which felt like. Uh, a little bit more time and planning for the solicitation process could have helped to have a, uh, uh, a better result on the back end. Recommendation 54 and 55 both speak to creating a foundation to challenge pricing that is either too high or too low, and then 55 recommendation 55 on the next page recommends that um there be policy as well as rule updates to, um, to create this foundation for challenging pricing. Currently we have the concept of unreasonable pricing in rural, but there is no further guidance given, uh, on how to apply that. Um, and then this applies both to bids and that's recommendation 54A and RFP's 54B. We saw the impact of this come to the fore with the, uh, education professional learning community RFP that was, that was discussed last year, where the winning bids came in 4 to 5 times the price of, of the all the other respondents who were in a fairly narrow range, um, and it's that concept of a price that seems, seems to be a little too high relative to what, what our, our God is telling us or what the market is telling us and having a tool to, to interrogate that. It's important. important. Next, uh, recommendation 56 A and B, uh, propose updating and the rules slightly and also updating policy to ensure that cost is scored when establishing a competitive range that sometimes called shortlisting down to a subset of the original proposers. Uh, the rule is. Uh, it's, it's, the rule is fine, but I do think it's a a small update to make it very explicit would help. And then The policy aspect of it is, is very important. Currently, the traditional RFP template says sequences cost opening after vendor presentations. So it is natural that somebody might follow that process that that's laid out and. And find themselves having conducted a competitive range before cost has been opened. Now OSP does recommend that agency score cost with as part of the competitive range, but updating policy to make that very clear as well as updating the rule will be helpful. Recommendation 72 is that um rules should be updated to explicitly allow negotiations to proceed during a protest to ensure that time is not lost and the state is not fully stymied by the simple existence of a protest, um, this is implicated already in, in other aspects of rule, but, um, we think it should be made very clear so that when a protest comes in, particularly from an incumbent vendor who might have lost a contract that they can, um, They cannot Hold us up too much by way of the protest process that we can't have a contract ready to go and sign the moment that the protest is resolved. Moving on to the negotiation section, uh, recommendation 82A and 82B recommend correcting a bid rule that is, that is not in line with statute, and then adding a corresponding RFP statute and rule regarding who can lawfully negotiate right now, the statute forbids in in 1911, 229 says that you must have uh successfully completed. Training and be a trained individual to conduct negotiations with the rules says that the negotiation training should be conducted, so it's a simple fix to bring those two into alignment, uh, however, there is currently no parallel statutory requirement guiding negotiation qualifications for RFPs in 1911, 230, so we're proposing to bring that into alignment. There's no reason that somebody needs to be trained for negotiating bids but wouldn't need to be. trained for negotiating RFP. Recommendations 85 and 86 suggest cleaning up rule to remove competitive range guidance that is not constructive. Right now, 85 addresses a clause, uh, uh, sorry, recommendation 85 addresses a clause that suggests it is acceptable to draw an arbitrary line at the top 3 respondents amongst a range of respondents to an RFP where there may very well be a case that um a respondent in 4th place is very close behind and should have been included in the competitive range, but, um, the line was, the line was established in the RFP. 3 and it was drawn at 3 and uh that's where it's cut, even though it could have been very close. And then similarly recommendation 86 addresses a different part of competitive range. There's a list in rule that includes things like price, cost of ownership, best value and potential value after negotiation, as well as the evaluation score as examples. These are either already part of evaluation scores or they're not defensible as a formal criteria that can be established as part of an RFP evaluation, so. We should just use the last thing that's listed in the rule, the evaluation score, that's how the process flows. It goes. Through an evaluation to result in a numerical score, and that should be the basis of establishing a competitive range. Moving on to contract management, the procedures and rules for debarment suspension should be simplified to be less onerous and ensure that worthwhile debarments are not avoided due to procedural hurdles. Currently, there are actually no debarments and suspensions listed on the official OSP list, uh, and that could be among other reasons because the process is very complex. Uh, and then recommendation 93, the debarment suspension rules should also be updated to require that any agency suspension or debarment action be done in consultation with OSP. It does allow agencies to engage in their own suspension and debarment actions. However, apropos, the official OSP list, OSP should always be consulted on any debarment or suspension action. For consistency and also to maintain an accurate and comprehensive list for everyone to access. There's, there's no reason, uh, a vendor should be debarred by one agency and it not have impact on business they do elsewhere around the state. And then finally, uh, this last recommendation is a new one since last time, um, we currently the statute for remedies for unlawful solicitation or award may unintentionally limit what can be ratified, um, in practice, ratification covers things that happen both during and after solicitation and award, but currently the statute speaks just to solicitation and award, and so, uh, to allow ratification to carry on. as it as it's been and and avoid any sort of a challenge the statute might be updated to to expand what can be reviewed. Um, and then in addition to that, OSP has been working on and will be delivering policy and training with respect to ratification, and we believe that having that information about ratification pushed out there will hopefully help reduce the instances in which we need to have contracts brought up for ratification. Nobody wants to see it happen. Uh, knowing that that is a possibility in getting people thinking ahead to avoid that, that eventuality, I think will help reduce the number of ratifications that we have. That's the end of our prepared comments. I'm open to answer any questions about our process or our recommendations or the report itself that we've delivered. All right, thank you, members, do we have any questions? Coach your comments, questions. Right, um. Well, I appreciate the report. I think it was very thorough, um. And I, I look forward to addressing some of these in the, uh. Coming days, um, so with that, um, Members, what's the will of the committee? Mr. Speaker, you're recognized. Amer chair, I move that we accept the, uh, report, the entire report recommendations as provided by Acaso. All right, I have a motion. Have a second. Um, all in favor say aye, aye. All right. Any opposed? I have it. All right. Thank you very much. Thank you. Thank you for your work. Thank you. All right, we'll move on to discussion of procedures on the dynamic fiscal impact requests, Ms. Thayer. Thank you, Mr. Chair, Jill Thayer, Bureau of Legislative Research. Thank you. Please proceed. You all have in your packets the proposed, um, procedures for use of the Remi software and requests for dynamic fiscal impact statements. I'm just going to hit the high points of that, um. Under section one, it discusses the requirements for a request for a dynamic fiscal impact statement, it'll be limited to introduced bills that have already received a static fiscal impact statement showing an impact of at least $1 million. The request will be submitted if it's a house bill to the Speaker of the House for approval if it's a Senate bill to the President pro temp of the Senate. And there is a provision under B3 for a bill draft that has not yet been introduced, uh, for a request to be made, and that would go to both the speaker and the president pro tem of the Senate. During this 2025 regular session, a maximum of 10 bills that meet the requirements, uh, will be approved for, uh, receiving a dynamic fiscal impact statement, that's 5 house bills and 5 Senate bills. And then if you turn to number 2, this discusses amendments to bills. If a bill is amended, um, once the static impact statement is received from DFA an updated dynamic fiscal impact statement would also be created. And then finally, uh these dynamic fiscal impact statements are going to be produced by our legislative economist, um, using the Remi tax modeling software, and it will be limited to looking only at the two-year fiscal periods moving forward, um, for these that are produced during this session. I'll take any questions, um, my co-chair, you're recognized for a question. OK, on B3, the bill draft that has not yet been introduced in either the House or the Senate shall be submitted to both the speaker, um. Is that, I mean, if it's a House member drafting the bill, why do they need to send it to the Senate? Is that something we need to think about? any revisions can be made that y'all would like absolutely Mr Speaker and, and that was one question. The other one was. When we do an amendment to a bill that has had a dynamic fiscal impact, um, my assumption would be that that does not count toward the total of 5 for either the House or the Senate. I'll defer to my colleagues and you guys can. Talk about it and see what you think. Mr. Speaker, you recognized? Thank you, Mr. Chair. Um. Yeah, Jill, I, I, I tend to agree, I think with the question that Representative Eaves has so make sure that I understand this. If a bill has already been filed. Uh, in either the House or the Senate in order for it to be scored through Remy, it must have already received a fiscal back that is equal to or exceeding a million dollars. Yes. But prior to filing that bill. They can with the approval of the speaker and the, the Senate prote. Any number of bills that have not been filed yet could be submitted to be scored through Remy. Well, the way actually the way that this is drafted, the total of 10 would include a bill draft approved in this way. So this, uh, total of 10 under C goes back to all of those listed under B, which includes the bill draft, so that would count towards your total number. So regardless of filed or unfiled. Each chamber is going to have, oh no, we're gonna do a total of 10 for the remainder of this session. That's, yes, that was the instruction direction, but we can change that absolutely. This is just a go ahead sorry you. So what we discovered was other states that have done is, I think, Joe, correct me here, I'm a Texas has something similar to this, if not this, and they have to have a minimum fiscal static score of 50 million before they'll use this program. I believe that's right. Yeah, so what we've discovered is everything's bigger in Texas, right? Trying to figure out a way, number one, we've never used it. We 2, we don't really know what information we're gonna get out of it. Uh, third thing would be. We have to Figure out some way to have some guard rails on it or else every single bill that goes to for example re tax is gonna want to have this done, so, um, a few of us uh co-chair talked about what that should look like. These are our ideas certainly up to um discussion to figure out what we wanna do. Um, but, uh, Uh, and I think this pretty well represents kind of what we talked about. Yeah, and, and if I'm, yeah, I'm jumping here too, and I agree with that. The, the one thing that I would add, um, is maybe we keep it to just filed bills only, um, But I mean, I'm open, I'm open for that discussion because I, again, um, if it's 10 each, um, I think there's a consensus is what those are, um, and, uh, you know, I just, I think that maybe we should just consider keeping it defiled only, but if you wanted to include draft, and I do think maybe a higher level of, of agreement or scrutiny on those as to, um, you know, the workload for staff because I would hate to have draft bills and then have to go back, you know, and make changes to those and. You know, so I, so I think the way that I interpret this, we are still putting emphasis upon the, the fiscal or upon the uh. Um The dynamic No, the static. We're gonna put the emphasis on the static first. Apparently we're gonna get it. We're gonna get it scored statically. They apparently the dynamic scoring model requires a static impact first before they can in all the data or the criteria right. I, I'm good with, with, with either way. I. I think since that we are limiting it to 10. And within that limit of 10, we're limiting it to 5 and 55 on each end. Um, I think that gives pretty good discretion. I don't know that and if we just leave it, it just filed bills, then that would take, take away B3, we wouldn't have to have that. I mean, that would be my recommendation, but I'm, I'm open to. This is all new. I think we're just gonna have to do the best we can with an idea on how to do it and if we want to limit it to. Uh, filed bills. I, I don't think that's a a big issue. Yeah, because now if, if we don't limit it to file, we, we know what we're gonna get. Everyone, they're all gonna want their bills scored to just see what it is without having to go through the Through the static process and the and the delay of DFA there's gonna because I think it's gonna be a much quicker process. It's how you run this real quick for me and let me see what the impact is gonna be so I it helps us put some guardrails on it until we get a better idea for the system since we're already. You know, we're, we're already halfway through pretty much halfway through the session. Seeing how revenue and tax on both ends of the building are sort of on a holding pattern now. Um My little bit of concern is that this dynamic stuff is gonna get hammered right at the very end. Last Whatever, 2 or 3 weeks of session, which may be unavoidable because we're not gonna know where we're at till that point. Um. And so some of that was put in here where you, you see that it has to be a million dollars, um, and then the other requirements, um, were that it would be submitted to the Speaker of the House on our end and of course the Senate president pro tem. On the other end, so we had some way of controlling a little bit of that and and again this is our first time to use it, uh, it may not be as big an issue, well, and I'll just say too, I mean, I, I foresee this being an evolving process, um, as we go through it and of course, you know, I'm sure with guidance from Doctor Silva and and others as we move through this process. I'm sure these rules will evolve, um, so I think Again, I think we're moving 3 is probably ideal. I'm, I'm fine with that. What, um, what are the thoughts on, um, and you might have answered this. I guess I was paying enough attention, but toward the amendments on bills that have already been dynamically scored should that count towards another score or is that the same score? If you amend the bill that's already been dynamically scored, that'd be the same. I wouldn't count that as an extra one. Do we need to offer any other ability for the speaker of the prote to make an exception at the end of session if we see we need one more, I mean, do we need to have that flexibility or 5 is 5 when we're done. I think I would rather Come back to this committee. And not OK. Just, just because we know that. It's going to happen. And rather than just put all that, I, I'd rather that come back because that way if there's 3 or 4, then, then executive subcommittee can meet and decide whether to allow. What what a priority would be. To clarify, are you wanting to add the executive would make the determination to move forward or just amend these rules to allow the speaker and pro tem to make that exception. Just want to make sure we have it, if, if I heard you correct me, Mr. Speaker, that would, that would come back to allow back to this committee to allow a bill to be scored and additional, an additional bill. I don't think Senator Hester or myself, if we get down to the last week or so of session and all of a sudden there's 10 that come flying in there that I don't think either one of us want to just say, uh, you get yours done and the other 9 if you don't, I think we'd rather have, get a, a broader look, broader set of eyes looking at that, make sure we're pro. Well, so we would. After the 5, then it would no longer be up to the member to ask the speaker or the prote they would that member would have to come to the executive to allow it to be scored and prioritizing. That makes sense? I, I'm all I'm trying to do is come up with some way of if there's some extreme circumstance at the very end of the session and we really need to take a look at it dynamically. We should have a way to do that. And again this this Could change next session and to be something completely different, but I think that's a good start. Senator Desma, do you have anything to add to that? All right, any further discussion? I think those were good points raised. Any further discussion? Jack, if you, if, if Representative Lady, if you would, uh, hit your mic. Yeah, just one thing on the amendments. I think that's a good thing because you could have multiple amendments that might affect that. OK. Thank you, Mrs. There, I think, yeah, if you'll make those changes. So, uh, members, what's the will of the committee on this, on these, um, Guidelines. The fiscal dynamic scoring procedures as amended. All right, I have a motion as amended, all in favor. Any, any discussion I'll, OK, all in favor say aye. Any opposed. Let's have it. All right. So you no further business, members, I think we're adjourned. Uh, thank you very much.