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Section 3: Contract Monitoring

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Nepotism Policy

Tex. Gov't Code §2262.004 requires personnel of a state agency to disclose information regarding certain relationships with, and direct or indirect pecuniary interests in, any party to a major contract with the state agency prior to the award of a major contract.

TxDOT has implemented its own Nepotism Policy in order to better monitor its contracts for the potential of nepotism. TxDOT personnel involved in making a decision or recommendation regarding the solicitation, evaluation, award, or terms of a contract that amounts to $1 million or more, as well as a work authorization of $100,000 or more under such contracts, must complete and sign the State Agency Uniform Nepotism Disclosure Form before the contract or work authorization is executed.

This requirement applies to all scientific services, commercial lab, architecture, survey and other professional services that fall into certain categories based on dollar amount. Supplemental agreements and supplemental work authorizations do not require the Disclosure Form. The Executive Director must approve the execution of either the contract or work authorization if a positive response is received.

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Contractor Responsibility

Companies and individuals that contract with TxDOT have a responsibility to report nepotism. When signing contracts with TxDOT, each contractor certifies that it has no knowledge that any of its employees have relatives employed by TxDOT. It also certifies that none of the employees of its subcontractors are related to TxDOT employees. Relatives include any:

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  • great grandparent, grandparent, parent, aunt or uncle, sibling, niece or nephew, spouse, child, grandchild, or great grandchild, or
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  • grandparent, parent, sibling, child, or grandchild of the person's spouse.
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Conflict of Interest

A conflict of interest can be defined as a situation in which an employee's private interest (usually financial or economic in nature) conflicts or raises a reasonable question of conflict with the employee's public duties and responsibilities.

All parties should avoid situations where financial, social, or political relationships impair one's ability to make independent, fair, and impartial judgments.

TxDOT employees, as well as performing entities, have an obligation to disclose situations that may create or give the perception of creating a conflict of interest.

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Travel

Any out-of-state travel by a contractor on a TxDOT project requires D/D approval. Any out-of-country travel requires approval by the Deputy Executive Director.

A contractor may not pay travel expenses for a TxDOT employee unless TxDOT is managing a multistate pooled fund project. In this circumstance, travel paid by the contractor for purposes of information exchange is authorized.

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Selection File

Selection information must be retained in the selection file. This information serves as proof that the managing office followed the procurement process established by law. It assists in proving that selection of the performing entity was based upon its qualifications and reasonableness of fee, and not tainted by a conflict of interest or random selection.

Being able to retrieve this information in a timely manner is critical since it is considered public information (available to public review) and may be requested by an entity that contests not being awarded a contract with TxDOT.

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File of Record

The "progress" file or "work" file is considered to be the File of Record and should be created following execution of the contract. It should contain the originals to all legal documents and is subject to review and internal audit. The file should document monitoring efforts and a project's progress as it is reflected through billing statements and issuance of work authorizations (if used).

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Documentation File

The contract manager must document correspondence with the performing entity throughout the contract period. Any event or circumstance that may affect the work effort, be it external events (turnover, funding, unavailability of materials, and other circumstances beyond TxDOT's control) or ineffectiveness (occurrences such as entity's miscommunication, interpretation, errors, and non-compliance with contractual requirements that TxDOT can take action against) must be thoroughly documented.

Potential problems that may arise during the contract period such as billing disputes, varying interpretations of the contract's scope of work, personnel changes, and an entity's inadequate performance must be thoroughly documented along with instructions for corrective action that the managing office provides. This information will be critical in the event that the contract must be terminated or a dispute with the performing entity cannot be resolved and it files a suit against TxDOT.

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Record Retention and Open Records Requests

TxDOT must keep contract files for seven (7) years following closeout. Advance Funding Agreements, however, must be maintained indefinitely since these agreements specify which parties are responsible for maintaining the roadway and/or certain facilities. Like most government information, these files are considered public information and are subject to open record requests. Refer to 43 TAC ch. 3, subch. B, to obtain TxDOT's rules regarding public information.

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Payment of Work

TxDOT's negotiated contracts do not permit the managing office to pay the performing entity for:

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  • tasks performed that are outside the contract period,
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  • tasks performed that are not authorized in the contract's scope of work, nor
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  • tasks completed that do not meet the specifications set forth in the contract's scope of work.
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Errors and Omissions

If the performing entity has received payment for work that does not comply with contract specifications, it is still accountable for correcting the work. The errors and omissions clause requires the performing entity to correct, at its expense, any work it performs that does not meet specifications during and after the contract period.

Regardless of the actions the performing entity takes, the work must continue unless the entity's performance is of such poor quality that TxDOT has no other recourse but to terminate the contract.

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