HB 2216

This bill makes various changes to the fiscal review committee's processes. Impact to Commerce Statements This bill deletes the present law requirement that fiscal notes include impact to commerce statements. Mandatory Review Present law requires that all requests of the procuring agency to procure goods or services through a noncompetitive contract must be contemporaneously filed with the fiscal review committee, comptroller of the treasury, and the chief procurement officer . Under present law, "noncompetitive contract"" includes any procurement arrangement except a grant or contract awarded to a: (1) Public institution of higher education to procure research or public service-related goods or services; or (2) Governmental entity, including, but not limited to, a local government. Under present law, the following contracts and contract amendments are subject to review by the fiscal review committee: (1) Proposed noncompetitive contracts with a term of more than one year or which contain a provision to allow for extension by either party that would extend the contract beyond 12 months and which have a cumulative value of not less than $250, 000, incl uding all possible extensions; and (2) Any amendment to a contract meeting the term and dollar threshold requirements in (1), regardless of whether the original contract was procured through competitive or noncompetitive means, where the amendment: (A) Increases or decreases the maximum liability; (B) Extends or shortens the contract term; (C) Changes the entity or name of the entity with which the state is contracting; or (D) Otherwise changes an original contract or amended contract in a substantive manner. The contracts subject to mandatory review under present law include all contracts of the executive branch that otherwise meet the requirements of (1) or (2), including, but not limited to, contracts of higher education, including the board of regents, the University of Tennessee, and THEC. Highway and road improvement contracts reviewed by TDOT, contracts reviewed by the state building commission, and debt issuance contracts reviewed by the comptroller of the treasury are not subject to review. This bill revises the definition of ""noncompetitive contract"" to mean any procurement arrangement for goods or services entered into by, or on behalf of, a procuring agency without a competitive solicitation having been formally conducted by the procurin g agency or by the chief procurement officer, regardless of whether the arrangement is designated as a contract, grant, agreement, amendment, or other procurement vehicle and include any arrangement that binds the agency to the terms of an agreement that wa s competitively procured by another state or governmental entity of another state. This bill revises (1) concerning proposed noncompetitive contracts to instead include those proposed noncompetitive contracts with a maximum liability of not less than $250, 000, as projected through the maximum term of the contract, including considerati on of all provided extensions and renewals, regardless of whether the maximum liability for the original base term is below that amount. The full text of this bill makes technical clarifications to (2) concerning contract amendments. This bill revises the exemption from review for contracts awarded to a public institution of higher education to procure research or goods or services by specifying that, in order for the exemption to apply, the contract must be intended to result in an unambiguous and direct benefit to the public. Permissive Review Present law authorizes the committee to review state contract amendments that are not subject to mandatory review. This bill specifies that in such a case the committee must provide a formal request to the procuring agency. Review Period Present law provides the committee 40 business days from receipt of the procurement request to comment on the proposed contract. After the 40-day period, any such contract authorized by the chief procurement officer may be executed. This bill requires that all contracts and amendments subject to mandatory review be submitted to the committee by no later than 60 calendar days prior to the contract's or amendment's proposed effective date. This bill extends the committee's comment pe riod to 60 calendar days from receipt of a procurement request; provided, however: (1) The chair of the fiscal review committee, or the chair's designee, may waive the 60-day review period and authorize the chief procurement officer to execute a contract or contract amendment determined to be in the best interest of the state, with re porting to and comment by the committee at its next scheduled meeting, if such reporting is required by the chair; and (2) The chair of the fiscal review committee, or the chair's designee, may extend the 60-day review period in extenuating circumstances if, upon consultation with the chief procurement officer and the procuring agency, as applicable, the chair or design ee determines that the extension would not materially delay the timely procurement of the goods or services. Reporting Present law requires the procurement office to file a goods and services contract report quarterly with the fiscal review committee. This bill instead requires that, no later than the fifth business day of each calendar month, the chief procurement offi cer report to the fiscal review committee the following information for the prior calendar month: (1) An itemized listing of all contracts, grants, or any other procurement arrangements that were awarded during the prior month, competitive and noncompetitive; and (2) Any policy, procedure, or rule change to the state procurement processes planned for the following month. The full text of this bill specifies information that must be included in reports to the committee concerning procurements made by agencies granted a special delegated authority, pursuant to rules promulgated by the chief procurement officer, the departm ent of transportation, and the state building commission. ON MARCH 23, 2026, THE SENATE ADOPTED AMENDMENT #1 AND PASSED SENATE BILL 2331, AS AMENDED. AMENDMENT #1 clarifies that the following contracts and contract amendments are subject to review by the fiscal review committee of the general assembly:  Proposed noncompetitive contracts with a term of one year or more or that contain a provision to allow for extension of the contract by either party for one year or more and that have a maximum liability of not less than $250, 000, as projected through the maximum term of the contract, including consideration of all provided extensions and renewals, regardless of whether the maximum liability for the original base term is below that amount.  Any amendment to a contract that meets or, as amended, would meet the term and dollar threshold described above, regardless of whether the original contract was procured through competitive or noncompetitive means, that (i) increases or decreases the maximum liability, (ii) extends or shortens the contract term, (iii) changes the contracting entity or name of the contracting entity, or (iv) otherwise alters the original contract or a prior amendment in a substantive manner, including, changes to scope, deliverables, pricing methodology, or performance requirements. This amendment also clarifies that contracts subject to review include, all contracts of the executive branch that otherwise meet the requirements described above, including, contracts of higher education, including the board of regents, the University of Tennessee, locally governed institutions, and the Tennessee higher education commission. This amendment provides that c ontracts not subject to review include all of the following :  Contracts awarded to a public institution of higher education to procure research or public service-related goods or services.  Contracts awarded to a governmental entity, including, a local government.  Highway and road improvement contracts reviewed by the department of transportation.  Contracts reviewed by the state building commission.  Debt issuance contracts reviewed by the comptroller of the treasury."