Section 2: Contract Standards
Authority
An agency may not enter into an agreement or contract that
requires or permits the agency to exceed its duties and responsibilities
or the limitations of its appropriated funds. Tex. Gov’t Code § 771.010.
An agency may agree or contract with another agency for the
provision of necessary and authorized services or resources. An
agency may not provide services or resources to another agency that
are required by Article XVI, Section 21, of the Texas Constitution
to be provided under a contract awarded to the lowest responsible
bidder. Tex. Gov’t Code § 771.003.
Contract Documents
Although a Letter of Agreement is authorized by statute, it
is TxDOT policy to use the IAC template available on the Contract
Services intranet site.
Signed Contract in Place
A written agreement or contract must be fully executed
before
a
state agency may provide or receive a service or resource.Memorandum of Understanding
A Memorandum of Understanding is a term that is often used,
but has no established legal meaning. Therefore, for all transactions
that are intended to be legally binding, the IAC template must be used.
Subcontracts
Any subcontracting approval will be included in the IAC. All
subcontracting must comply with TxDOT policy as well as state and
federal requirements.
Administration Approval
Administration approval is required in advance on all IACs
in which TxDOT is expending funds regardless of the maximum amount
payable.
Funding
A state agency that receives services or resources shall reimburse
another state agency providing the services or resources the actual
cost of providing the services or resources or the nearest practicable
estimate of that cost.
A state agency that receives services or resources may advance
federal funds to an agency providing the services or resources if
the agency receiving the services or resources determines that the advance
would facilitate the implementation of a federally funded program.
A state agency that receives services or resources may advance
funds to the agency providing the services or resources if an advance
is necessary to enable the providing agency to provide the services
or resources. If an advance is made, the agencies shall ensure after
the services or resources are provided that the providing agency
has received only sufficient funds to reimburse its total costs.
An advance of funds is a reimbursement for the purposes of Tex.
Gov’t Code § 771.008.
See generally Tex. Gov’t Code § 771.007
Records
Contract Services is the Office of Record for all IACs and
amendments, including those under $50,000. The Office of Primary
Responsibility maintains a file for all other documentation relating to
the contract. The file of record is maintained the entire life of
the contract and for the ensuing seven years or longer if audit
issues or litigation occurs. This file is subject to audit and will
be used in resolving contractual issues.
Reports
Within 30 days of the end of each fiscal year, the department
is required to make annual reports available on its website containing
information for all IACs that exceed $10 million in value or those
that may reasonably be expected to exceed $10 million. Information
in the report must identify each state agency that is a party to
an IAC, whether TxDOT is receiving money or disbursing money under
the contract, the amount spent by the disbursing agency for the
contact and the method of finance; and the agency programs for which
the agencies entered the contract and the appropriation line items
from which funds were spent by the agencies to perform the contract.
The Office of Primary Responsibility for IACs that exceed
$10 million or may be reasonably expected to exceed $10 million
must identify the method of finance, agency programs, and the appropriation
line item when submitting those IACs for reporting to Contract Services.
See Article IX, §17.12 of the 2022-2023 General Appropriations
Act.