(a) Purpose. To establish procurement and contracting standards for purchases made in connection with group purchasing organizations (GPOs).
(b) Authority. HHS and DFPS may acquire goods and services from GPOs in accordance with Texas Government Code §2155.144 and §2155.1441. HHSC may utilize GPOs to acquire health care goods and services that are used in support of the agency's health care programs. HHSC will make purchases that provide best value for the state in consideration of all relevant factors for the purchase.
(c) Standards that GPOs must meet to be an HHSC-approved GPO:
  (1) established organization with a value-added portfolio of contracts;
  (2) transparent and competitive procurement process;
  (3) best value evaluation and award criteria;
  (4) contract management program; and
  (5) historically underutilized businesses policy.
(d) Advertisement. Each September HHSC posts application documents and instructions to the Electronic State Business Daily (ESBD) for 30 days to invite business entities to seek approval to become an HHSC-approved GPO. HHSC, in its sole discretion, may decline to post or accept application documents if it determines that a business need does not exist for contracting with additional GPOs.
(e) Application review. HHSC reviews submitted applications to determine if applications meet HHSC approval standards. The application review may also involve in-person or virtual interviews. HHSC may request additional information or documentation from the business entity during application review.
(f) Approval and term. No later than January 1 of each year, HHSC posts a list of entities to the ESBD that have been approved to contract with HHSC as a GPO. Approved GPO status will remain effective for a term of five years unless HHSC, in its sole discretion, determines the GPO no longer meets approval standards.
(g) Rejected applicants. No later than January 1 of each year, rejected applicants will be contacted to inform the applicant of the reasons the application did not meet HHSC's approval standards. Applicants that fail to receive approval may apply the following year.
(h) Competition thresholds.
  (1) Purchases may be made directly through any approved GPO affiliated with, operated by, or as an extension of a unit of any state or the federal government of the United States, without engaging in formal competition regardless of the amount of the purchase.
  (2) Purchases may be made directly through approved GPOs if the value of the purchase is $50,000 or less.
  (3) For purchases with a value greater than $50,000 up to $1,000,000, three quotes must be obtained from approved GPOs in the same category.
    (A) If there are only two vendors in a category, quotes from both vendors must be obtained.
    (B) If there is only one vendor in a category, this must be documented in the procurement file, and the purchase can be made without further justification.
  (4) For purchases with a value greater than $1,000,000 but less than $5,000,000, six quotes must be obtained from approved GPOs in the same category.
    (A) If there are less than six vendors in a category, quotes from all available vendors must be obtained.
    (B) If there is only one vendor in a category, this must be documented in the procurement file, and the purchase can be made without further justification.
  (5) Purchases valued at $5,000,000 or greater may not be made through a GPO without first obtaining written approval from the Deputy Executive Commissioner of Procurement and Contracting Services.

Source Note: The provisions of this §391.245 adopted to be effective May 10, 2022, 47 TexReg 2732