Bill > HB1198

This bill modifies Texas local government procurement rules by expanding municipalities' ability to choose local bidders for contracts. Specifically, the bill removes previous restrictions that limited the local bidder preference to construction services under $100,000, and now allows municipalities to select a local bidder (whose principal place of business is in the municipality) for contracts up to $500,000 if certain conditions are met. When a local bidder's bid is within 5% of the lowest bid from a non-local bidder, the municipality can choose the local bidder if its governing body determines in writing that the local bidder provides the best combination of contract price and economic development opportunities, such as employing local residents and generating increased tax revenues. The changes will apply only to contracts with initial bid notices issued on or after the effective date of September 1, 2025, ensuring that existing procurement processes are not disrupted. This legislation aims to provide economic advantages to local businesses and support municipal economic development efforts.

Government Affairs

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB1198