Chapter 121

2008 -- H 8435 SUBSTITUTE A

Enacted 07/01/08

 

A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT

          

     Introduced By: Representatives Lima, Ehrhardt, Gablinske, Fox, and Pacheco

     Date Introduced: June 21, 2008

     

It is enacted by the General Assembly as follows:

 

     SECTION 1. Chapter 42-148 of the General Laws entitled "Privatization of State

Services" is hereby amended by adding thereto the following section:

 

     42-148-9. Severability. – If any provision of this chapter, or the application of this

chapter to any person or circumstances is held invalid by a court of competent jurisdiction, the

remainder of the chapter and the application of that provision to other persons or circumstances

shall not be affected.

 

     SECTION 2. Sections 42-148-2, 42-148-3, 42-148-6 and 42-148-8 of the General Laws

in Chapter 42-148 entitled "Privatization of State Services" are hereby amended to read as

follows:

 

     42-148-2. Definitions. -- When used in this chapter:

      (a) "In-house costs" means a detailed budget breakdown of the current costs of providing

the service or program proposed for privatization.

      (b) "Statement of work and performance standards" means a clear statement of the nature

and extent of the work to be performed with measurable performance standards as set forth in

section 42-148-3(b)(2) of this chapter.

      (c) "In-house bid" shall mean the cost of the proposal proffered by in-house state

programs and employees and their representatives pursuant to section 42-148-3(b)(3) of this

chapter.

      (d) "Cost comparison" means an analysis of the comparative costs of providing the

service in-house or by privatization.

      (e) "Conversion differential" means transition costs and costs associated with starting up

or closing down during conversion to purchase of service purchased services or in the event of the

need to bring services back in-house.

      (f) "Transition costs" means the cost of contracting including monitoring vendors for

accountability, costs associated with unemployment compensation, payment of accrued leave

credits, bumping, and retention factors for those with statutory status. Transitional Transition

costs shall not include department overhead or other costs that would continue even if the

services were privatized.

     (g) "Privatization or privatization contract" means an agreement or combination or series

of agreements by which a non-governmental person or entity agrees with an agency to provide

services expected to result in a fiscal year expenditure of at least one hundred fifty thousand

dollars ($150,000) (as of July 1 of each year, the amount shall increase to reflect increases in the

consumer price index calculated by the United States Bureau of Labor Statistics for all urban

consumers nationally during the most recent twelve (12) month period for which data are

available or more), which would contract services which are substantially similar to and in

replacement of work normally performed by an employee of an agency as of June 30, 2007.

     "Privatization" or "privatization contract" excludes:

     (1) Contracts resulting from an emergency procurement;

     (2) Contracts with a term of one hundred eighty (180) days or less on a non-recurring

basis;

     (3) Contracts to provide highly specialized or technical services not normally provided by

state employees;

     (4) Any subsequent contract which: (a) renews or rebids a prior privatization contract

which existed before June 30, 2007; or (b) renews or rebids a privatization contract that was

subject to the provisions of this statute after its enactment; and

     (5) An agreement to provide legal services or management consulting services.

 

     42-148-3. Preclosure analysis. -- (a) Prior to the closure, consolidation or privatization

of any state facility, function or program, the director of administration or his or her designee,

shall conduct a thorough cost comparison analysis and evaluate quality performance concerns

before deciding to purchase services from private vendors rather than provide services directly.

      (b) The director of administration shall, at least sixty (60) days prior to issuing requests

for bids or proposals, notify the bargaining representatives of state employees who will be

directly impacted by a potential privatization in writing at least six (6) months in advance of its

consideration of privatizing a state service and complete the following process:

      (i) Document the current in-house costs of providing the services with a detailed budget

breakdown. The in-house cost shall include any department overhead and other costs that would

continue even if the service was contracted out.

      (ii) Prepare a statement of work and performance standards which shall form the basis

for the requests for proposals and which shall include the following:

      (A) A clear statement of work with measurable performance standards including

qualitative as well as quantitative standards that bidders must meet or exceed;

      (B) Requirements that contractors meet affirmative action, disability and other

nondiscriminatory and service standards currently required of state agencies.

      (C) A clear format that will enable comparison of competitive bids and in-house bids.

The format must require detailed budget breakdowns.

      (c) Prior to the issuance of the RFP current public employees and program recipients

must be notified of the intent to solicit bid proposals and of the decision timeline. Additionally, at

least sixty (60) calendar days prior to the issuing of a request for proposals, the cost analysis and

statement of work shall be sent to the bargaining representatives of state employees who will be

directly impacted by a potential privatization.

      (d) If the statement of work and performance standards differs from the current in-house

program procedures and requirements or if current state program employees and their

representatives believe that they could perform the work more efficiently, an in-house state work

group Prior to, or up until the time when a prospective offeror is required to submit to the state a

proposal for a privatization contract, directly impacted state employees and their bargaining

representatives shall be afforded an opportunity to present a new cost estimate, reflecting any

innovations that they could incorporate into the work performance standards. This new cost

estimate shall be deemed an in-house bid, which shall form the basis for the eventual cost

comparison. The director shall provide technical and informational assistance to the in-house

state work group in its preparation of an in-house bid.

      (e) Prior to or at any time before or after the normal procurement process, the The

director may elect to accept the in-house bid or proceed with the normal procurement process to

prepare a request for proposal ("RFP") which must:

      (i) Incorporate the statement of work and performance standards, and

      (ii) Require bidders to meet the same statement of work performance standards as would

be expected by an required of the final in-house cost estimate; and

      (iii) Include bid forms requiring a sufficiently detailed breakdown of cost categories to

allow accurate and meaningful comparisons., if applicable.

      (f) The in-house bid developed pursuant to subsection (d) of this section shall be kept

confidential from bidders.

 

     42-148-6. Appeal. -- (a) Before any award is final, the affected parties, which shall

include program recipients, state employees and their representatives shall have a right to appeal

the award decision of the director of the department of administration.

      (b) The parties shall have sixty (60) days from the date of the award to file an appeal. No

contracts shall be awarded or services contracted to vendors if an appeal is pending.

      (c) All documentation supporting the cost and quality comparison shall be made

available to the affected parties upon request after the final decision has been made.

      (d) All appeals of the final decision of an award shall be filed in superior court in

Providence County.

     Before any award is final, state employees or their bargaining representatives shall have a

right to protest the award decision within thirty (30) days to the director of administration. The

director of administration shall have no more than fifteen (15) days to render a decision. Any

state employees or their bargaining representative that files a protest shall have thirty (30) days

from the director's decision to file an appeal to the superior court, Providence County. The

superior court shall determine within thirty (30) days of filing whether to stay the award or allow

the procurement to proceed. Until such time as the superior court makes this determination, no

final award by the state may be made.

 

     42-148-8. Applicability. – (a) The process set forth in this chapter shall apply to

privatization contracts as defined in subsection 42-148-2(g).

     (b) Notwithstanding any general law or special law to the contrary, no award shall be

made or privatization contract entered into by the state of Rhode Island unless and until the

processes and procedures outlined in sections 42-148-3, 42-148-4 and 42-148-5 have been fully

complied with in their entirety. All of the aforementioned sections shall apply to all pending

awards and pending privatization contracts.

 

     SECTION 3. Section 37-2.3-3 of the General Laws in Chapter 37-2.3 entitled

"Government Oversight and Fiscal Accountability Review Act" is hereby amended to read as

follows:

 

     37-2.3-3. Definitions. -- As used in this chapter, the following terms shall have the

following meanings:

      (1) "Agency" includes any executive office, department, division, board, commission, or

other office or officer in the executive branch of the government.

      (2) "Private contractor employee" includes a worker directly employed by a private

contractor, as defined in this section, as well as an employee of a subcontractor or an independent

contractor that provides supplies or services to a private contractor.

      (3) "Services" includes, with respect to a private contractor, all aspects of the provision

of services provided by a private contractor pursuant to a privatization contract, or any services

provided by a subcontractor of a private contractor.

      (4) "Person" includes an individual, institution, federal, state, or local governmental

entity, or any other public or private entity.

      (5) "Privatization contract" is an agreement or combination or series of agreements by

which a nongovernmental person or entity agrees with an agency to provide services, valued at

one hundred thousand dollars ($100,000) or more, which are substantially similar to and in lieu

of, services heretofore provided, in whole or in part, by regular employees of an agency.

     "Privatization or privatization contract" means an agreement or combination or series of

agreements by which a non-governmental person or entity agrees with an agency to provide

services expected to result in a fiscal year expenditure of at least one hundred fifty thousand

dollars ($150,000) (as of July 1 each year, the amount shall increase to reflect increases in the

consumer price index calculated by the United States Bureau of Labor Statistics for all urban

consumers nationally during the most recent twelve (12) month period for which data are

available or more), which would contract services which are substantially similar to and in

replacement of work normally performed by an employee of an agency as of June 30, 2007.

     "Privatization" or "privatization contract" excludes:

     (1) Contracts resulting from an emergency procurement;

     (2) Contracts with a term of one hundred eighty (180) days or less on a non-recurring

basis;

     (3) Contracts to provide highly specialized or technical services not normally provided by

state employees;

     (4) Any subsequent contract which: (a) renews or rebids a prior privatization contract

which existed before June 30, 2007; or (b) renews or rebids a privatization contract that was

subject to the provisions of this statute after its enactment; and

     (5) An agreement to provide legal services or management consulting services.

      (6) "Privatization contractor" is any contractor, consultant, subcontractor, independent

contractor or private business owner that contracts with a state agency to perform services in

accordance with the definition of a "privatization contract." which are substantially similar to and

in lieu of services heretofore provided, in whole or in part, by employees of an agency.

 

     SECTION 4. This act shall take effect on January 1, 2009.

     

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LC03258/SUB A

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