Summary of Texas Performance Review Recommendations

Previous Texas Performance Review reports contain many proposals to improve the performance and accountability of Texas state government. Shown below are selected proposals from each report which specifically address competition in government, performance measurement, outsourcing, and customer service issues.

Challenging the Status Quo (1999)

ED12 Make Remedial Education Funding Performance-Based.

This proposal included recommendations to allocate all general revenue appropriations for remedial education to institutions of higher education using a performance-based funding approach. Each institution would receive a base amount for each student remediated and a bonus payment for each student who successfully completes remedial education.

Result: The Legislature created a pilot project to test the concept during 2000-01.

CG1 Implement Activity-Based Costing for Selected Agencies.

Currently, Texas state government at large has not yet adopted activity-based costing (ABC). An ABC pilot program had excellent results when applied to agencies as diverse as the Texas Education Agency and the Texas Department of Insurance. These experiences suggest that ABC would be more successful if supported by adequate financial resources and a dedicated interagency task force. This proposal would extend the ABC project to nine additional agencies and implement lessons learned from earlier efforts. The proposal would create a project management team and would provide resources for consultants, software development, and other relevant expenses.

Result: Rider appropriated $250,000 in support of pilot projects.

CG2 Set Customer Service Standards for Texas State Government.

This proposal recommended agencies create an inventory of external customers for each of its budget strategies and appoint a customer relations representative. The Legislative Budget Board would need to create a series of performance measures for customer service and an award system for exemplary agencies to be known as the "Texas Star Award."

Result: The Legislature adopted this proposal intact.

GG7 Privatize Overpayment Collection Functions.

This proposal would require the Texas Workforce Commission (TWC) to issue a request for proposal to those interested in collecting benefit overpayments which are uncollectible under the current recovery process.

Result: No legislation was needed because TWC self-initiated a Request for Proposals to outsource this function.

GG9 Expand Use of Private Adoption Agencies.

This proposal recommended reducing the state's requirements for editing adoption records if a child is at least seven years at the time of adoption; centralizing funding to pay for private adoption agencies; encouraging greater use of such agencies; allowing DPRS to pay for certain services for children up to 21 years of age to prepare them to meet adult responsibilities; providing support services to families after adoption; providing more intensive recruitment of potential adoptive families; expanding DPRS' effectiveness through a coordinated program in two metropolitan areas of the state; and revising policies to relinquish a child placed in adoption under certain circumstances.

Result: The Legislature adopted this proposal with modifications.

HHS8 Enhance Vendor Drug Program By Competitively Bidding Claims Processing.

This proposal recommended requiring the Texas Department of Health (TDH) to work with the Council on Competitive Government (CCG) to seek competitive bids for the claims processing functions of the Vendor Drug Program. TDH had processed claims for the state's Medicaid Vendor Drug Program through an arrangement with the Texas Department of Human Services.

Result: The Legislature adopted this proposal intact.

HOU1 Expand Housing Options for Older Texans.

This proposal recommended directing the Texas Department of Human Services and Texas Department of Housing and Community Affairs to develop a rental assistance pilot program that would use federal housing block grant funds to subsidize the rents of eligible seniors who can live in commercial apartments. Currently, many Texas seniors with low or moderate incomes must resort to living in a nursing home simply because they cannot afford adequate housing in their community. The housing expenses of these seniors are paid from the state's Medicaid program at a cost of about $2.5 million annually.

Result: The Legislature adopted this proposal with modifications.

Disturbing the Peace (1997)

HHS17: Create a Working Group to Coordinate the Purchase of Client Services and Direct the Health and Human Services Commission (HHSC) to Develop Rules to Ensure Consistent Procurement and Monitoring of State Contracts.

The Texas Department of Health, Department of Mental Health and Mental Retardation, and Department of Human Services had independent in-house systems for tracking contract services. These independent systems were not compatible and could not be readily merged into a statewide system. TPR also recommended that the Comptroller, in conjunction with the HHSC, examine the costs and benefits of developing a statewide contract management information system for purchased client services.

Result: The Legislature did not adopt this proposal.

HHS18: Pay Rehabilitation Service Vendors on a Performance Basis.

This proposal recommended the Texas Rehabilitation Commission convert its fee-for-service contracts for vocational services to performance-based contracts.

Result: The Legislature adopted this proposal intact.

HHS30: Require All Agencies With Health-Related Programs to Adopt "Best Value" Purchasing Practices Under the Oversight of the Health and Human Services Commission.

The Texas Department of Health contracts with local health departments and various public, non-profit, and private hospitals to supply Medicaid and other health-related services. Allowing these providers to participate in more efficient purchasing arrangements would allow them to provide improved services to low-income and indigent Texans.

Result: The Legislature adopted the proposal with some modifications.

HHS36: Permit Selective Contracting of Prescription Drugs, Lab Services, Home Health Services, and Other Specialized Health-Related Services Under the State Medicaid Plan.

Result: The Legislature adopted the proposal after limiting savings to prescription drug reimbursements (HCR 215).

GG6: Establish a Quasi-Governmental, Nonprofit Corporation Combining General Services Commission's (GSC) Telecommunications Services Division, the Statewide Telecommunications Section of the Department of Information Resources, and the Health and Human Services Commission Network.

The new organization would be a self-supporting provider of voice, data, video, and Internet services to state agencies, universities, and local government entities.

Result: Consolidation initiated through a multi-agency Memorandum of Understanding. No legislative action taken.

GG7: Direct the Texas Department of Transportation (TxDOT) to Build Partnerships with the Department of Public Safety, Federal and Local Governments, and Private Sector Organizations to Strategically Apply Technological Advancements to Texas' Transportation Infrastructure.

Where possible, TxDOT should ensure that intelligent transportation systems and automated commercial vehicle regulation are compatible with advancements in private sector logistics.

Result: The Legislature adopted this proposal intact.

GG13: Open Certain Child Support Enforcement Functions to Competition.

Other states successfully use outside contractors for certain child support enforcement duties, saving up to 45 percent in administrative costs. The Texas Council on Competitive Government would lead this effort with assistance from the Office of the Attorney General's Child Support Division in identifying which child support enforcement functions could be enhanced or replaced by contractors.

Results: The Legislature adopted this proposal intact.

CG7: Develop Programs to Train State Employees in Contract Negotiation; provide electronic access to vendor catalogs, and investigate whether the Catalog Purchase Procedure can be used to buy items other than automated information systems.

In 1993, the Legislature established the Catalog Purchase Procedure (CPP) to allow state agencies to buy automated information systems directly from vendor catalogs. While the CPP has substantially reduced the cost of automated information systems, considerable room exists for improvement. Only 25 employees were trained in effective contract negotiating practices at a multi-agency sponsored seminar in 1995, far too few in the expensive and rapidly evolving field of information technology.

Result: The Legislature adopted this proposal intact.

Gaining Ground (1995)

ED10: Encourage Competition Among Regional Education Service Centers.

The proposal would have allowed the state independent school districts the opportunity to go to any Regional Education Service Center (RESC) in the state for resource and regional planning services.

Result: The proposal was not introduced in the Legislature.

EI14: The Employee Retirement System of Texas Should Allow Eligible State Retirees to Choose a Medicare Supplemental Health Insurance Policy and to Keep a Portion of the Savings Realized.

Result: The Legislature did not adopt this proposal.

GG14: Privatize Windstorm Inspections.

TPR recommended Texas Department of Insurance (TDI) should consider privatizing its windstorm inspections for Texas catastrophic property insurance association coverage. If privatizing windstorm inspections does not prove cost effective upon analysis, TDI should seek other savings measures, such as closing field offices and using telecommuting to manage inspectors.

Result: No legislation needed. The Texas Council on Competitive Government is implementing.

CG9: Expand the Procurement Credit Card Program.

State agencies should use the procurement credit card program available through the General Services Commission to improve purchasing and payment processes.

Result: No legislation needed.

CG11: Expand Competitive Mail Contracting.

The Council on Competitive Government should expand its mail presorting contract to include more state agencies.

Result: No legislation needed. The Texas Council on Competitive Government is implementing.

Against the Grain (1993)

HHS2: Develop Selective Contracting for Medicaid Inpatient Services.

The state should develop a system of selective contracting for Medicaid inpatient services that would reduce costs through increased competition.

Result: The Legislature adopted the proposal intact.

HHS21: Solicit Private Bids for Client Eligibility Determination Services.

Health and human service agencies should bid against the private sector for client eligibility determination services.

Result: The proposal was not introduced in the Legislature.

HHS28: Create a Non-Profit Organization to Help Businesses Purchase Cost-Effective Health Care.

Result: The proposal was not introduced in the Legislature.

T10: Explore Innovative Approaches to Improving School Bus Transportation Systems.

TPR recommended the state study ways to make public school bus transportation systems more efficient and help school districts pay the cost of converting school buses to alternative fuels. TPR also recommended the Legislature direct a sufficient amount of oil overcharge funds be made available to school districts to purchase and install scheduling and routing software and to train local school district personnel in its use.

Result: The Legislature adopted this proposal intact.

PS7: Use Excess Beds in Privately Operated Prisons.

Result: The Legislature adopted the proposal intact (SB 378 rider).

GG38: Adopt Private Sector Practices of Billing for Financial Audits.

Result: The proposal was not introduced in the Legislature.

CG2: Reengineer the State Procurement Process.

Specific recommendations included: develop an integrated statewide procurement system to capture transaction detail on all purchases and to automate and streamline requisitioning, receiving, and payment activities; give individual agencies greater authority to make purchasing decisions, increase state-level technical automation support, and decrease state-imposed red tape and central involvement in individual procurements.

Result: The Legislature adopted the proposal.

CG7: Reengineer State Vehicle Management.

Consolidate the increasingly complex job of fleet management to allow state agencies to focus on their primary missions. Charge the General Services Commission, as state business manager, with operating the fleet as a coordinated business effort to produce efficiency and cost savings.

Result: The Legislature did not adopt the proposal.

CG36: Establish a State Council on Competitive Government.

TPR recommended creating a council with a five-member panel consisting of representatives from the Governor's Office, the Office of the Lieutenant Governor, the General Services Commission, the Speaker of the House, and the Comptroller's office. Its mission would be to encourage public-sector competition and to promote the most effective and efficient way to deliver state agency services to the public.

Result: The Legislature adopted the proposal intact.

CG37: Explore Opportunities for Consolidating and Contracting for Information Systems Functions.

If the Council on Competitive Government is created, the council should initiate a competitive cost review of state information services to identify cost-saving opportunities for consolidating data centers or other services, outsourcing services or contracting for the management of computer facilities.

Result: The Legislature adopted the proposal intact.

Breaking the Mold (1991)

TR8: Increase Highway Maintenance Contracting Levels.

The Texas Department of Transportation (TxDOT) should establish a cost analysis system for evaluating the cost of highway maintenance conducted by agency personnel and by contractors, which account for all costs, including indirect costs, under both options.

Result: The Legislature adopted the proposal with modifications that dropped a 10-percent minimum savings requirement.

TR9: Increase Vehicle Maintenance Contracting.

Result: The Legislature adopted this proposal intact.

PS4: Increase Privatization of State Prisons.

The Texas Department of Criminal Justice (TDCJ) should expand the current private prison sites to 1000-bed units. It should also perform a cost analysis of each of the department's existing units and compete with the private sector under the Competitive Cost Review Program in instances where the analyses suggest that cost savings would result.

Result: The Legislature adopted this proposal intact.

GG16: Contract With a Private Bond Rating Company.

The State Board of Insurance should contract with a private company to perform the inspection function for setting fire rates and granting of windstorm compliance certificates.

Result: The Legislature did not adopt this proposal.

GG34: Privatize Custodial Services.

The General Services Commission should analyze the cost effectiveness of privatizing state building custodial services and award contracts to private firm in instances where the analyses show it to be beneficial.

Result: The Legislature did not adopt this proposal.

CG6: Privatization Opportunities.

The state should establish a special process to review and recommend opportunities to privatize state functions.

Result: The Legislature adopted this proposal intact.

CG12: Privatize State Information Resources.

The state should study all agencies to identify common functions that would be candidates for consolidation based on: (1) opportunities for horizontal integration, or (2) opportunities for vertical integration. The Comptroller estimated that the state would save over $13 million over two fiscal years as a result of consolidation and privatization of information resources.

Results: This proposal was not adopted.