To Bid or Not to Bid: A Possible Solution to an Age-Old Question

by Todd Shade, Roy Wheeler, and Paul Taylor

It is an age-old question that educational entities face: “Do we need to or are we required to bid our risk management coverage?” A recent change in the competitive procurement requirements along with a review of the acceptable purchasing methods may help to provide a possible solution to this ongoing dilemma.

Effective June 19, 2009, House Bill 987 made changes to school district competitive procurement requirements. 

These changes, found in Texas Education Code 44.031, raise the contractual amount that triggers a school district’s duty to competitively procure a contract (other than for the purchase of produce or vehicle fuel) from $25,000 to $50,000.  The $25,000 threshold amount had been unchanged since its adoption in 1995. 

Purchases valued at $50,000 or more in the aggregate for each 12 month period must still be made by one of nine statutory methods listed below that provide the best value for the district:

1. Competitive bidding
2. Competitive sealed proposals
3.  A request for proposals for services other than construction services
4.  An interlocal contract
5.  A design/build contract
6.  A contract to construct, rehabilitate, alter, or repair facilities that involves using a construction manager
7.  A job order contract for the minor construction, repair, rehabilitation, or alteration of a facility
8.  The reverse auction procedure as defined by Section 2155.062(d), Government Code
9.  The formation of a political subdivision corporation under Section 304.001, Local Government Code

In response to this change, districts should also consider updating their local board policy concerning delegation of purchasing authority.  This policy is normally found at Board Policy CH (LOCAL). 

As stated in the procurement requirements above, a district must select from the nine listed approved methods, which include an interlocal contract, the method that provides the best value to the district. Since their inception, all of the TASB Risk Management Fund (Fund) programs have been and continue to be written via an interlocal contract and as a result, satisfy the competitive procurement requirements as established under Section 44.031 of the Texas Education Code. Therefore, while a district may choose to competitively bid the coverage they have through the Fund, they are not required to do so.

In addition to the peace of mind of knowing the competitive procurement requirements have been satisfied, participation in the Fund’s Property and Liability, Workers’ Compensation, and Unemployment Compensation programs also means members will receive the same comprehensive coverage, exemplary service, and strong financial foundation they have come to know and expect since 1974. To find out more about participation in any of the Fund’s programs, please contact your Risk Management Marketing Consultant at 800.482.7276, ext. 6249.