CONTRACTS; PROCUREMENT

Houston Code of Ordinances ch. 15, art. III

in effect

Houston Code of Ordinances § 15-41 Statement of policy.

Sec. 15-41. - Statement of policy. It is the policy of the city that all procurements shall be made in accordance with relevant state and federal law, as well as the charter and this Code. (Ord. No. 2015-668, § 4(Exh. B), 7-8-2015)

Houston Code of Ordinances § 15-42 Definitions.

Sec. 15-42. - Definitions. As used in this article, the following terms have the meanings set forth below: Bid means the response submitted by a bidder to an invitation to bid (ITB), including any variation of the competitive bid process, such as best-value bid or multi-step bid. Proposal means the response submitted by a vendor in response to a request for proposals (RFP) issued by the city. Procurement means the process by which pricing, qualifications, and bids and/or proposals for goods and services are solicited from vendors, which may result in contracts for the purchase of such goods or services. Procurement includes three phases: planning and sourcing, solicitation (through the selected method of procurement and contract award) and contract administration (performance and close-out). Public work means a project calling for the construction, repair or renovation of buildings, streets, bridges, sewers, water lines, or any other publicly owned improvements to real property. Request for proposals (RFP) means the document used to solicit proposals for services or a combination of goods and services from vendors. Price is not the primary evaluation criterion but is a factor considered in the determination of best value and affordability. The process may consist of two steps (prequalification and proposals) or a single step (proposals including consideration of quality). Public private partnership (P3) means an agreement between the city and the private sector by which the private sector makes physical assets or services available to a public entity for an extended term in exchange for fixed payments over a term of 20 years or more. Request for qualifications (RFQ) means the document used to solicit statements of qualifications from vendors. The process is generally used to pre-qualify vendors as part of a multistep process or to select professional services prohibiting price as a consideration or whenever the best interest of the city is served. Reverse auction means a real time bidding process that occurs online and allows vendors to compete during the short time allowed for the bidding. Each vendor knows the bids of all the others and can repeatedly amend a bid while the auction proceeds. Solicitation means the document used to solicit bids, proposals, or qualifications. Submission means the document responding to a RFQ. Threshold means the amount of expenditure that triggers a requirement for a competitive procurement under state law, as may be amended from time to time. Vendor means a provider of goods and/or services, including professional and construction services, that does business or seeks to do business with the city. Work services means services that are not of a professional or consulting nature that involve manual labor or are performed by skilled trades. (Ord. No. 2015-668, § 4(Exh. B), 7-8-2015)

Houston Code of Ordinances § 15-43 Chief procurement officer; authority; duties.

Sec. 15-43. - Chief procurement officer; authority; duties. (a) There is hereby created the position of the chief procurement officer (CPO). The CPO shall be appointed by the mayor. The CPO shall possess the qualifications and experience necessary to effectively provide leadership on procurement methods and globally accepted public procurement practices. In making procurement decisions, the CPO may delegate purchasing authority to certain departments for a defined period of time, provided that those departments comply with the procurement procedures promulgated by the CPO. The CPO shall develop requirements to be met by delegates prior to commencing any procurement or purchasing activity, including periodic reporting for submission to the CPO. The CPO may at any time withdraw approval for delegated authority if established procedures are not followed. (b) Except as provided in this article, no department director or individual acting under the department director's authority shall order the procurement in excess of the threshold, of supplies, services, construction, or professional or consulting services other than through the office of or with the approval of the CPO. To the extent of any conflict with any other provision of this Code, this article takes precedence. (c) The CPO shall: (1) Lead day-to-day procurement activities across all city departments for direct and indirect sourcing. (2) Accelerate the implementation of procurement best practices and organizational development efforts. (3) Transform procurement operations into a strategic function that optimizes the city's strategic and operational objectives. (4) Drive cross-functional procurement strategy, common process definition and deployment, and personnel and organizational development. (5) Make procurement decisions and recommendations in accordance with globally accepted public procurement standards and promulgate procurement policies in conjunction with department directors. (6) When appropriate, consult with user departments and legal counsel when making decisions regarding procurement. (Ord. No. 2015-668, § 4(Exh. B), 7-8-2015)

Houston Code of Ordinances § 15-44 Procurement methods.

Sec. 15-44. - Procurement methods. Whenever practicable, the CPO shall conduct a competitive process for the selection of a vendor associated with contracting opportunities. The following methods or strategies shall be used, as appropriate, based on the type of procurement: (1) Competitive bid; (2) Best value bids; (3) Request for proposals; (4) Request for qualifications; (5) Hybrid methods; (6) Non-competitive methods: a. Sole source; and b. Emergency procurements; (7) Innovative methods and other procurement strategies: a. Interlocal agreements; b. Public-private partnerships; c. Innovative methods; d. Reverse auctions; e. Cooperative purchasing; and f. Other methods as may be authorized by law. (8) Revenue generating contracts; (9) Alternative delivery methods for construction projects; and (10) Informal procurements for purchases under the threshold. (Ord. No. 2015-668, § 4(Exh. B), 7-8-2015)

Houston Code of Ordinances § 15-45 Competitive sealed bids; bid opening; bid bonds; rejection of bids; return of bid bonds.

Sec. 15-45. - Competitive sealed bids; bid opening; bid bonds; rejection of bids; return of bid bonds. (a) A competitive bidding process or variation (such as best value bid) shall generally be used for the purchase of goods, equipment, and work services. (b) The CPO shall ensure that the specifications for such purchases are not restrictive and provide maximum opportunity for fair and open competition. When a brand name or make is used as the standard to illustrate the requirements in a specification, the ITB shall include language indicating that the requirement may be met by a different source and shall include the phrase "or equal" so as to avoid issuing specifications that are restrictive. (c) Bids shall be opened and read in public. The opening shall be held at a time, date, and place designated in the ITB at a location approved by the CPO. The time and date, and when appropriate, the place of the meeting designated in the ITB may be rescheduled without the necessity of readvertising for bids if: (1) The ITB includes notice that the opening may be rescheduled, provided the rescheduled date or time may not be earlier than the time or date identified in the original solicitation; and (2) A letter of clarification is issued. (d) Late or unsealed bids shall not be read and shall be returned to the bidder unopened. (e) For purposes of this section, bid bond means a valid and enforceable bond that is in substantial compliance with the following requirements: (1) The bond must be executed by a corporate surety authorized by the state board of insurance to conduct insurance business in the State of Texas and shall comply with any other requirements set out by law or included in the bid package. (2) The bond must be payable to the city. (3) The bond must be conditioned such that if the bidder is awarded the contract and then fails to execute the contract timely or to provide any required bonds timely, or to do both, then in that event the surety will be obligated to pay to the city an amount equal to the difference between the bid of the bidder on whom the bond was written and the bid of the bidder who is finally awarded the contract and who executes the contract and provides the required bonds, up to the penal sum of the bond. (f) All bid documents prepared by or on behalf of the city for public works projects or for contracts for the maintenance of public property shall require: (1) That bidders must submit, along with their bids, a bid bond or a certified or cashier's check in an amount equal to ten percent of their bids. (2) That the bidder to whom the contract is awarded must, if the contract amount exceeds the amount set by state law or other amount stated in the project documents, provide a performance bond in an amount equal to 100 percent of the contract amount, as described in section 15-52 of this Code. (3) That the bidder to whom the contract is awarded must provide a payment bond if the contract is in excess of the amount set by state law or other amount stated in the project documents. (4) That the bidder to whom the contract is awarded must provide such other bonds as are required by law or by the terms of the bid documents. (g) Bidders submitting bids for the furnishing of materials only shall have the option of furnishing to the city, with any such bid, a cashier's or certified check in the sum of ten percent of the amount of such bid, in lieu of the bidder's bond required by this section. Such cashier's or certified check shall be furnished on the same terms and conditions as set out in this section. (h) Upon receipt of a tabulation of bids and a recommendation as to the award of a contract, the CPO shall return to each vendor who has made a bid deposit the bond, cashier's check or certified check representing such deposit, except that the CPO shall retain any such deposit made by the lowest and second lowest bidders, as shown by such tabulation. Any deposit so retained shall be returned at such time as a contract has been awarded. (Ord. No. 2015-668, § 4(Exh. B), 7-8-2015)

Houston Code of Ordinances § 15-46 Best value bids.

Sec. 15-46. - Best value bids. In compliance with applicable law, the CPO may utilize a best value bid method, a process under which criteria other than price are considered when making an award. The criteria upon which the outcome will be determined will be identified in the ITB. (Ord. No. 2015-668, § 4(Exh. B), 7-8-2015)

Houston Code of Ordinances § 15-47 Request for proposals.

Sec. 15-47. - Request for proposals. (a) Whenever the experience, qualifications, or overall quality is determined to have an impact on the success of the project, the CPO or authorized delegate may elect to utilize the RFP method in order to serve the best interests of the city. The RFP document shall, at a minimum, clearly state the scope of services, the process that will be followed, the criteria that will be considered in the evaluation of proposals, and a list of submission requirements. (b) The goal of the RFP method is to obtain the best value, highest qualified, or a value-added proposition at an affordable price to the city. (c) The CPO shall develop procedures for the use of the RFP method, specifying when its use is appropriate, and setting forth best practices and guidance to evaluation committee members. (d) Consulting services and professional services not covered by the Professional Services Procurement Act, Texas Government Code Chapter 2254, shall generally be procured using the RFP method. (Ord. No. 2015-668, § 4(Exh. B), 7-8-2015)

Houston Code of Ordinances § 15-48 Request for qualifications.

Sec. 15-48. - Request for qualifications. (a) The purpose of the RFQ method is to identify the highest qualified vendor with whom the city would then negotiate a reasonable fee. (b) The Professional Services Procurement Act of the Texas Government Code, Chapter 2254, requires that the selection of architects, engineers, and land surveyors be made based on qualifications. Price shall not be considered in such selection. (c) Other types of professional services may be procured using a RFQ when the CPO determines that the RFQ method is in the best interest of the city. (Ord. No. 2015-668, § 4(Exh. B), 7-8-2015)

Houston Code of Ordinances § 15-49 Noncompetitive methods.

Sec. 15-49. - Noncompetitive methods. Noncompetitive methods are acceptable only under specific circumstances, such as: (1) Sole source. Procurements of supplies, equipment, goods or services may be made without the use of a competitive method if such supplies, equipment, goods, or services can only be obtained from a single source. The CPO shall promulgate procedures for the review of a sole source requested by an operating department These procedures shall address the evidence necessary to demonstrate that the unique specifications, qualities, or capabilities of the items substantiate a sole source exception. (2) Emergency. The CPO may execute contracts without the use of a competitive method without prior approval of city council when procurements are necessary (i) due to a threat to public health or safety, (ii) for repairs to city property in order to protect against further loss or damage, (iii) to prevent or minimize serious disruption in city services, (iv) to ensure the integrity of city records, or (v) in the reasonable opinion of the CPO, whenever the best interests of the city is served. The CPO shall implement procedures to meet these requirements, and when practicable, conduct informal competition for the award of an emergency contract. Any emergency purchases made in excess of the threshold shall be submitted to city council for approval as soon as practicable. (Ord. No. 2015-668, § 4(Exh. B), 7-8-2015)

Houston Code of Ordinances § 15-50 Innovative methods.

Sec. 15-50. - Innovative methods. Subject to applicable law, the CPO may conduct procurements using innovative methods, including, but not limited to, electronic procurement, reverse auctions, prequalification and pilot procurement programs that have no cost to the city. In order to implement innovative methods of procurement, either directly or through a vendor, the CPO must make a determination that such process is competitive and in the best interest of the city. Innovative methods may take into consideration market conditions, spend analysis, and other factors. Such methods include: (1) Interlocal agreements. The city may enter into interlocal agreements with other governmental entities in order to cooperatively perform governmental functions and services, including purchasing. Such agreements will be entered into as authorized by state and federal law. (2) Public-private partnerships (P3s). The city may enter into public-private partnerships or "P3s" in accordance with state law. If the city elects to move forward with a P3 proposal, the city will conduct a competitive process for the selection of a vendor and negotiation of a contract. (3) As an alternative or in addition to directly conducting procurement using innovative methods, the CPO may conduct reverse auctions, electronic auctions, or provide an on-line or electronic forum for competitive bids, requests for qualifications and requests for proposals and other types of innovative methods of procurement on the city's behalf. (4) Cooperatives. Under Texas law, the city may participate in a cooperative purchasing program with another local government or a local cooperative organization. Provided the city purchases goods and services in accordance with the cooperative purchasing requirements, the city is deemed to have satisfied state law competitive procurement requirements for the purchase of the goods or services. (5) Other methods as may be authorized by law. (Ord. No. 2015-668, § 4(Exh. B), 7-8-2015)

Houston Code of Ordinances § 15-51 Revenue-generating contracts.

Sec. 15-51. - Revenue-generating contracts. The city may enter into contracts with third parties for the purpose of generating revenue for the city. The CPO shall be informed prior to or at the commencement of the negotiation of all revenue-generating contracts. The CPO shall promulgate policies to ensure that a competitive procurement is conducted when market conditions indicate doing so would be in the best interests of the city. (Ord. No. 2015-668, § 4(Exh. B), 7-8-2015)

Houston Code of Ordinances § 15-52 Informal procurement.

Sec. 15-52. - Informal procurement. Any purchase exceeding $3,000.00 but less than the threshold may be made by soliciting quotes from one or more vendors, provided that a city-wide contract is not available for the goods or services required. Such procurement opportunity need not be published in a newspaper of general circulation, but the city may elect to publish such opportunities on a central procurement website so as to promote competition. (Ord. No. 2015-668, § 4(Exh. B), 7-8-2015)

Houston Code of Ordinances § 15-53 Competitive bidding and alternative delivery methods for construction.

Sec. 15-53. - Competitive bidding and alternative delivery methods for construction. (a) Construction shall generally require a competitive bid process; however, the CPO may choose to conduct a variation of the competitive process as authorized by law, whenever the best interest of the city will be served. (b) All solicitations for construction projects in excess of the amount set in state law or other amount set forth in the project documents shall include a requirement that, if awarded the work, the vendor shall furnish a performance bond. For purposes of this requirement, "performance bond" means a valid and enforceable bond which is in substantial compliance with the following requirements: (1) The bond must be executed by a corporate surety authorized by the state board of insurance to conduct insurance business in the State of Texas. (2) The bond must be payable to the city. (3) The bond must be conditioned upon the faithful performance of work in accordance with the plans, specifications and contract documents. (4) The bond must comply with any special requirements contained in the bid package. (5) The bond must be accompanied by satisfactory evidence of the authority of the surety's agent to bind the surety by executing the bond. (Ord. No. 2015-668, § 4(Exh. B), 7-8-2015)

Houston Code of Ordinances § 15-54 Protests.

Sec. 15-54. - Protests. The CPO shall establish protest procedures and steps to be taken by vendors and the city when a vendor is dissatisfied with a procurement process. The bid protest process does not create any due process right, but is intended to allow vendors the opportunity to raise concerns regarding actions taken regarding a competitive solicitation. (Ord. No. 2015-668, § 4(Exh. B), 7-8-2015)

Houston Code of Ordinances § 15-55 Conflicts of interest.

Sec. 15-55. - Conflicts of interest. The CPO shall establish a process for addressing conflicts of interest in the procurement and contracting process. Such conflicts may be set forth in state law, common law, the city charter, and/or city ordinance. Anyone involved in procurement is required to disclose any conflict or appearance of conflict before participating in a procurement process. (Ord. No. 2015-668, § 4(Exh. B), 7-8-2015)

Houston Code of Ordinances § 15-56 Ethics, values, and guiding principles.

Sec. 15-56. - Ethics, values, and guiding principles. Procurement personnel and others involved in a procurement must exhibit the highest level of ethical behavior so as to protect the integrity of the procurement process. Procurement professionals and those involved in any procurement in the city shall observe the values and guiding principles globally accepted and promulgated by public procurement professional organizations. Such values and guiding principles include but are not limited to: transparency, impartiality, accountability, professionalism, ethics and service. (Ord. No. 2015-668, § 4(Exh. B), 7-8-2015)

Houston Code of Ordinances § 15-57 Prohibited practices.

Sec. 15-57. - Prohibited practices. The following practices are prohibited: (1) Restrictive specifications. City employees and officials are prohibited from issuing specifications that restrict fair and open competition for a contracting opportunity. This provision does not prohibit the city from engaging in non-competitive procurements when updating or upgrading a standardized system that was originally procured through a competitive process. (2) Bid splitting, sequential bidding, and component purchases. In accordance with state law, it shall be unlawful to split purchases for the purpose of avoiding a procurement process. The appropriate process shall be determined based on the entirety of the scope to fulfill the project or purpose intended. Public officials and employees shall not segregate components of a project to avoid a procurement or approval process. (3) Bid rotating; bid rigging. It shall be unlawful for any vendor to engage in bid rotating practices. Bid rotation occurs when vendors take turns being the designated successful vendor; for example, each vendor is designated to be the successful bidder on certain contracts, with others designated to win other contracts. Bid rigging is a form of fraud in which a contract is promised to one party even though for the sake of appearance several other parties also present a bid. Such practices interfere with the competitive environment sought for public procurements and are strictly prohibited. (4) Any other act prohibited by law. (Ord. No. 2015-668, § 4(Exh. B), 7-8-2015)

Source: City of Houston, Code of Ordinances and City Charter (Municode Library, library.municode.com)URL: https://library.municode.com/tx/houston/codes/code_of_ordinances?nodeId=COOR_CH15CO_ARTIIICOPRFetched: 10/26/2026