Fiscal Review Committee

Plain English Breakdown

The candidate explanation includes details about reporting requirements that are not fully supported in the official source material.

Changes to Tennessee's Fiscal Review Committee

This bill changes how the fiscal review committee reviews contracts and removes requirements for certain statements in fiscal notes.

What This Bill Does

• Removes the requirement that impact on commerce statements be included in fiscal notes prepared by the committee.
• Expands the definition of 'noncompetitive contract' to include any procurement without a competitive solicitation, regardless of how it is labeled.
• Requires proposed noncompetitive contracts with a maximum liability of at least $250,000 to undergo mandatory review by the committee.
• Extends the time frame for submitting and reviewing contracts from 40 business days to 60 calendar days.
• Changes reporting requirements so that the chief procurement officer must report monthly on all state procurements.

Who It Names or Affects

• The fiscal review committee of Tennessee's General Assembly
• Procuring agencies in Tennessee

Terms To Know

noncompetitive contract

A procurement arrangement for goods or services without a competitive solicitation.

mandatory review

The requirement that certain contracts must be reviewed by the fiscal review committee before they can proceed.

Limits and Unknowns

• Does not specify how the removal of impact on commerce statements will affect decision-making processes.
• Does not address potential delays in procurement due to extended review periods.
• The bill's full text may contain additional technical clarifications that are not covered here.

Official Summary Text

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.

Current Bill Text

SENATE BILL 2331
By Gardenhire

HOUSE BILL 2216
By Howell
HB2216
012125
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AN ACT to amend Tennessee Code Annotated, Title 3,
Chapter 2 and Title 4, Chapter 56, relative to fiscal
review.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 3-2-107, is amended by deleting
subdivision (a)(2)(B).
SECTION 2. Tennessee Code Annotated, Section 4-56-107, is amended by deleting the
section and substituting instead:
(a)
(1) The following contracts and contract amendments shall be subject to
review by the fiscal review committee of the general assembly:
(A) Proposed noncompetitive contracts with a maximum liability of
not less than two hundred fifty thousand dollars ($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; and
(B) Any amendment to a contract that meets or, as amended,
would meet the dollar threshold in subdivision (a)(1)(A), 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;

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(iii) Changes the contracting entity or name of the
contracting entity; or
(iv) Otherwise alters the original contract or a prior
amendment, including, but not limited to, changes to scope,
deliverables, pricing methodology, or performance requirements.
(2) For purposes of this section, "noncompetitive contract":
(A) Means 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 procuring 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
(B) Includes any arrangement that binds the agency to the terms
of an agreement that was competitively procured by another state or
governmental entity of another state.
(b)
(1) Contracts subject to review include, but are not limited to, all
contracts of the executive branch that otherwise meet the requirements of
subdivision (a)(1), including, but not limited to, contracts of higher education,
including the board of regents, the University of Tennessee, all other land grant
institutions, and the Tennessee higher education commission.
(2) Contracts not subject to review include:
(A) Contracts awarded to a public institution of higher education
to procure research or goods or services that are intended to result in an
unambiguous and direct benefit to the public;

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(B) Contracts awarded to a governmental entity, including, but not
limited to, a local government;
(C) Highway and road improvement contracts reviewed by the
department of transportation;
(D) Contracts reviewed by the state building commission; and
(E) Debt issuance contracts reviewed by the comptroller of the
treasury.
(3) If the chief procurement officer or procuring agency is unable to
determine whether a proposed contract or contract amendment is subject to
review by the fiscal review committee, the chief procurement officer or procuring
agency shall contact the fiscal review committee staff for a determination.
(4) In addition to the contracts subject to mandatory review under this
section, the fiscal review committee, pursuant to its jurisdiction in § 3-7-103(a),
and upon the committee providing a formal request to the procuring agency, is
authorized to review any other state contract or contract amendment entered into
by any branch of state government in accordance with the procedures
established in this section, without regard to whether the contract or contract
amendment otherwise meets the requirements or the exemptions established in
subsections (a) or (b).
(c) If review is required pursuant to subsection (a), or upon a determination by
the fiscal review committee pursuant to subdivision (b)(4), the procuring agency shall
contemporaneously file a request with the fiscal review committee, the comptroller of the
treasury, and the chief procurement officer, if the contract is otherwise subject to such
entity's oversight. The request submitted to the fiscal review committee must include the
following:

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(1) Description of the goods or services to be acquired;
(2) Explanation of the need for or requirement to acquire the goods or
services;
(3) Name and address of the proposed contractor's principal owner;
(4) Evidence that the proposed contractor has experience in providing
the same or similar goods or services and evidence of the length of time the
contractor has provided the same or similar goods or services;
(5) Explanation of whether the goods or services were purchased by the
procuring agency in the past and, if applicable, the method used to purchase the
goods or services and the name and address of the contractor;
(6) Description of the procuring agency's efforts to use existing state
employees and resources or, in the alternative, to identify reasonable and
competitive procurement alternatives, rather than to use noncompetitive
negotiation;
(7) Justification of why the goods or services should be acquired through
noncompetitive negotiation; and
(8) Any additional information that the fiscal review committee may direct
the procuring agency to provide that will assist the committee in evaluating the
contract.
(d)
(1) All contracts and amendments subject to review pursuant to
subdivision (a) must be submitted to the fiscal review committee by no later than
sixty (60) calendar days prior to the contract's or amendment's proposed
effective date. The fiscal review committee has sixty (60) calendar days from
receipt of a request filed pursuant to this section to comment on a proposed

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contract or contract amendment. Upon expiration of this review period, unless
the review period has been extended pursuant to subdivision (d)(3), any such
contract or amendment authorized by the chief procurement officer may be
executed.
(2) The chair of the fiscal review committee, or the chair's designee, may
waive the sixty-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 reporting to and comment by the committee at its next
scheduled meeting, if such reporting is required by the chair.
(3) The chair of the fiscal review committee, or the chair's designee, may
extend the sixty-day review period in extenuating circumstances if, upon
consultation with the chief procurement officer and the procuring agency, as
applicable, the chair or designee determines that the extension would not
materially delay the timely procurement of the goods or services.
(e)
(1) No later than the fifth business day of each calendar month, the chief
procurement officer shall report to the fiscal review committee the following
information for the prior calendar month:
(A) An itemized listing of all contracts, grants, or any other
procurement arrangements that were awarded during the prior month,
competitive and noncompetitive; and
(B) Any policy, procedure, or rule change to the state
procurement processes planned for the following month.
(2) The report required pursuant to subdivision (e)(1) must include the
name of the department or agency for which the procurement is made, contract

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number, description of the goods or services procured, contractor name, contract
period, contract amount, procurement method, and any additional information
that the fiscal review committee requests the chief procurement officer to provide
or that the chief procurement officer elects to include.
(3) Each procuring agency granted a special delegated authority,
pursuant to rules authorized by § 4-56-105, to establish goods and services
contracts shall report to the fiscal review committee a list of all contracts awarded
under the delegated authority. The list of contracts awarded must be filed
quarterly and must include the description of the goods or services procured,
contractor name, contract period, contract amount, procurement method,
completion date for a monitoring review, and any additional information that the
fiscal review committee requests the procuring agency to provide or that the
procuring agency elects to include.
(4) The department of transportation and the state building commission
shall each report to the fiscal review committee, within thirty (30) days of
approval, contracts approved by the respective entity that were exempt from
committee review pursuant to subdivisions (b)(2)(C) and (D) and that otherwise
meet the requirements of subdivision (a)(1). The report must include a
description of the goods or services procured, contractor name, contract period,
contract amount, procurement method, and any additional information that the
committee requests the department or commission to provide or that the
department or commission elects to include.
SECTION 3. This act takes effect upon becoming a law, the public welfare requiring it.