The Texas Department of Information Resources prepares annual operating budgets that include both administrative fee revenue estimates and expense estimates. DIR’s goals with respect to fee evaluation and fee setting are to
- Maximize cost savings for customers
- Cover and minimize cost of program operations
- Minimize fee volatility
- Comply with laws and regulations
DIR undergoes fee setting and establishment on an annual basis for each program—Cooperative Contracts, Communications Technology Services (CTS), and Data Center Services (DCS). However, financial operating results are monitored throughout the year to determine if DIR is generating revenue at levels needed to recover costs.
DIR’s fee-setting methodology is based on the following process for each program:
- Determine total operating expenses to be recovered by administrative fees
- Forecast customer demand for goods and services
- Set fees at levels that will recover operating costs based on forecasted customer consumption
- Monitor financial operating results throughout the year to determine if DIR is generating revenue at level needed to recover cost; and take corrective action if necessary
While DIR’s primary focus is to serve state agencies, there are a significant number of voluntary customers, such as institutions of higher education, public school districts, local governments, etc., that can purchase services directly from DIR or through DIR administered contracts. Forecasting consumption for these customers adds complexity to the forecasting model because consumption may be impacted by factors external to the state appropriations process. However, DIR utilizes multiple sources of procurement trend and economic data to assist with forecasting customer demand for DIR goods and services.
DIR also actively benchmarks pricing and fees to ensure that customers receive competitive pricing on the goods and services that they consume through DIR.
Cooperative Contracts Program (Clearing Fund Account)
The Cooperative Contracts Program is designed to generate savings for government entities using taxpayer funds by efficiently leveraging volume buying power to lower the IT acquisition cost and improve the quality of the state’s investment in technology commodities.
Government Code Section 2157.068 establishes DIR’s statutory authority to set administrative fees and allows non-state agencies to purchase from DIR contracts. Beginning with the General Appropriations Act for the 2004/05 biennium (78th Legislature), DIR has an administrative fee cap of 2 percent for the Cooperative Contracts Program.