_h1827c1
HB 1827CS

CHAMBER ACTION




1The Health Care Appropriations Committee recommends the
2following:
3
4     Council/Committee Substitute
5     Remove the entire bill and insert:
6
A bill to be entitled
7An act relating to the Department of Children and Family
8Services; providing legislative intent with respect to
9establishing a structure by which the department shall
10monitor and manage contracts with external service
11providers; providing definitions; requiring the department
12to competitively procure certain commodities and
13contractual services; requiring the department to allow
14all public postsecondary institutions to bid on contracts
15intended for any public postsecondary institution;
16authorizing the department to competitively procure and
17contract for systems of treatment or service that involve
18multiple providers; providing requirements if other
19governmental entities contribute matching funds; requiring
20that an entity providing matching funds must comply with
21certain procurement procedures; authorizing the department
22to independently procure and contract for treatment
23services; requiring that the department develop a business
24case before outsourcing any service or function; providing
25requirements for the business case; requiring that the
26business case be submitted to the Legislature for
27approval; requiring that a contractual service that has
28previously been outsourced be subject to the requirements
29for a business case; requiring that a procurement of
30contractual services equal to or in excess of the
31threshold amount for CATEGORY FIVE comply with specified
32requirements, including a scope of work and performance
33standards; authorizing the department to adopt incremental
34penalties by rule; authorizing the department to include
35cost-neutral, performance-based incentives in a contract;
36requiring that a contract in excess of $1 million be
37negotiated by a contract negotiator who is certified
38according to standards established by the Department of
39Management Services; limiting circumstances under which
40the department may amend a contract; requiring that a
41proposed contract amendment be submitted to the Executive
42Office of the Governor for approval; requiring approval of
43a contract amendment by the Administration Commission
44under certain circumstances; requiring the department to
45verify that contractual terms have been satisfied before
46renewing a contract; requiring certain documentation;
47requiring the department to develop, in consultation with
48the Department of Management Services, contract templates
49and guidelines; requiring that the department establish a
50contract-management process; specifying the requirements
51for and components of the contract-management process;
52providing requirements for resolving performance
53deficiencies and terminating a contract; requiring a
54corrective-action plan under certain circumstances;
55requiring the department to develop standards of conduct
56and disciplinary actions; requiring that the department
57establish contract-monitoring units and a contract-
58monitoring process; requiring written reports; requiring
59on-site visits for contracts involving the provision of
60direct client services; requiring the department to make
61certain documents available to the Legislature; requiring
62the department to create an electronic database to store
63the documents; amending s. 402.73, F.S.; requiring the
64Agency for Persons with Disabilities to implement systems
65to ensure quality and fiscal integrity of programs in the
66developmental services Medicaid waiver system; providing
67an exemption for health services from competitive bidding
68requirements; amending s. 409.1671, F.S.; conforming
69provisions to changes made by the act; requiring that the
70Office of Program Policy Analysis and Government
71Accountability conduct two reviews of the contract-
72management and accountability structures of the department
73and report to the Legislature and the Auditor General;
74repealing s. 402.72, F.S., relating to contract-management
75requirements for the Department of Children and Family
76Services; providing an appropriation; providing an
77effective date.
78
79Be It Enacted by the Legislature of the State of Florida:
80
81     Section 1.  Department of Children and Family Services;
82procurement of contractual services; outsourcing or
83privatization; contract management.--
84     (1)  LEGISLATIVE INTENT.--The Legislature intends that the
85Department of Children and Family Services obtain services in
86the manner that is most efficient and cost-effective for the
87state, that provides the greatest long-term benefits to the
88clients receiving services, and that minimizes the disruption of
89client services. In order to meet these legislative goals, the
90department shall comply with legislative policy guidelines that
91require compliance with uniform procedures for procuring
92contractual services, prescribe how the department must
93outsource its programmatic and administrative services to
94external service providers rather than having them provided by
95the department or another state agency, and establish a
96contract-management and contract-monitoring process.
97     (2)  DEFINITIONS.--As used in this section, the term:
98     (a)  "Contract manager" means the department employee who
99is responsible for enforcing the compliance with administrative
100and programmatic terms and conditions of a contract. The
101contract manager is the primary point of contact through which
102all contracting information flows between the department and the
103contractor. The contract manager is responsible for day-to-day
104contract oversight, including approval of contract deliverables
105and invoices. All actions related to the contract shall be
106initiated by or coordinated with the contract manager. The
107contract manager maintains the official contract files.
108     (b)  "Contract monitor" means the department employee who
109is responsible for observing, recording, and reporting to the
110contract manager and other designated entities the information
111necessary to assist the contract manager and program management
112in determining whether the contractor is in compliance with the
113administrative and programmatic terms and conditions of the
114contract.
115     (c)  "Department" means the Department of Children and
116Family Services.
117     (d)  "Outsourcing" means the process of contracting with an
118external service provider to provide a service, in whole or in
119part, while the department retains the responsibility and
120accountability for the service.
121     (e)  "Performance measure" means the quantitative
122indicators used to assess if the service the external provider
123is performing is achieving the desired results. Measures of
124performance include outputs, direct counts of program
125activities, and outcomes or results of program activities in the
126lives of the clients served.
127     (f)  "Performance standard" means the quantifiable,
128specified, and desired level to be achieved for a particular
129performance measure.
130     (g)  "Privatize" means any process aimed at transferring
131the responsibility for a service, in whole or in part, from the
132department to the private sector such that the private sector is
133solely and fully responsible for the performance of the specific
134service.
135     (h)  "Service" means all or any portion of a program or
136program component as defined in section 216.011, Florida
137Statutes.
138     (3)  PROCUREMENT OF COMMODITIES AND CONTRACTUAL SERVICES.--
139     (a)  For the purchase of commodities and contractual
140services in excess of the threshold amount established in
141section 287.017, Florida Statutes, for CATEGORY TWO, the
142department shall comply with the requirements set forth in
143section 287.057, Florida Statutes.
144     (b)  Notwithstanding section 287.057(5)(f)13., Florida
145Statutes, whenever the department intends to contract with a
146public postsecondary institution to provide a service, the
147department must allow all public postsecondary institutions in
148this state that are accredited by the Southern Association of
149Colleges and Schools to bid on the contract. Thereafter,
150notwithstanding any other provision to the contrary, if a public
151postsecondary institution intends to subcontract for any service
152awarded in the contract, the subcontracted service must be
153procured by competitive procedures.
154     (c)  When it is in the best interest of a defined segment
155of its consumer population, the department may competitively
156procure and contract for systems of treatment or service that
157involve multiple providers, rather than procuring and
158contracting for treatment or services separately from each
159participating provider. The department must ensure that all
160providers that participate in the treatment or service system
161meet all applicable statutory, regulatory, service-quality, and
162cost-control requirements. If other governmental entities or
163units of special purpose government contribute matching funds to
164the support of a given system of treatment or service, the
165department shall formally request information from those funding
166entities in the procurement process and may take the information
167received into account in the selection process. If a local
168government contributes matching funds to support the system of
169treatment or contracted service and if the match constitutes at
170least 25 percent of the value of the contract, the department
171shall afford the governmental match contributor an opportunity
172to name an employee as one of the persons required by section
173287.057(17), Florida Statutes, to evaluate or negotiate certain
174contracts, unless the department sets forth in writing the
175reason why the inclusion would be contrary to the best interest
176of the state. Any employee so named by the governmental match
177contributor shall qualify as one of the persons required by
178section 287.057(17), Florida Statutes. A governmental entity or
179unit of special purpose government may not name an employee as
180one of the persons required by section 287.057(17), Florida
181Statutes, if it, or any of its political subdivisions, executive
182agencies, or special districts, intends to compete for the
183contract to be awarded. The governmental funding entity or
184contributor of matching funds must comply with all procurement
185procedures set forth in section 287.057, Florida Statutes, when
186appropriate and required.
187     (d)  The department may procure and contract for or provide
188assessment and case-management services independently from
189treatment services.
190     (4)  SOURCING STANDARDS AND REQUIREMENTS.--If the
191department proposes to outsource a service, the department must
192comply with the requirements of this section prior to the
193procurement process provided for in section 287.057, Florida
194Statutes.
195     (a)  The department shall develop a business case
196describing and analyzing the service proposed for outsourcing. A
197business case is part of the solicitation process and is not a
198rule subject to challenge pursuant to section 120.54, Florida
199Statutes. The business case must include, but need not be
200limited to:
201     1.  A detailed description of the services to be
202outsourced, a description and analysis of the department's
203current performance of the service, and a rationale documenting
204how outsourcing the service would be in the best interest of the
205state, the department, and its clients.
206     2.  A cost-benefit analysis documenting the estimated
207specific direct and indirect costs, savings, performance
208improvements, risks, and qualitative and quantitative benefits
209involved in or resulting from outsourcing the service. The cost-
210benefit analysis must include a detailed plan and timeline
211identifying all actions that must be implemented to realize
212expected benefits. Under section 92.525, Florida Statutes, the
213Secretary of Children and Family Services shall verify that all
214costs, savings, and benefits are valid and achievable.
215     3.  A description of the specific performance measures and
216standards that must be achieved through the outsourcing
217proposal.
218     4.  A statement of the potential effect on applicable
219federal, state, and local revenues and expenditures. The
220statement must specifically describe the effect on general
221revenue, trust funds, general revenue service charges, and
222interest on trust funds, together with the potential direct or
223indirect effect on federal funding and cost allocations.
224     5.  A plan to ensure compliance with public-record laws,
225which must include components that:
226     a.  Provide public access to public records at a cost that
227does not exceed that provided in chapter 119, Florida Statutes.
228     b.  Ensure the confidentiality of records that are exempt
229from disclosure or confidential under law.
230     c.  Meet all legal requirements for record retention.
231     d.  Allow for transfer to the state, at no cost, all public
232records in possession of the external service provider upon
233termination of the contract.
234     6.  A department transition and implementation plan for
235addressing changes in the number of agency personnel, affected
236business processes, and employee-transition issues. Such a plan
237must also specify the mechanism for continuing the operation of
238the service if the contractor fails to perform and comply with
239the performance measures and standards and provisions of the
240contract. Within this plan, the department shall identify all
241resources, including full-time equivalent positions, which are
242subject to outsourcing. All full-time equivalent positions
243identified in the plan shall be placed in reserve by the
244Executive Office of the Governor until the end of the second
245year of the contract. Notwithstanding the provisions of section
246216.262, Florida Statutes, the Executive Office of the Governor
247shall request authority from the Legislative Budget Commission
248to reestablish full-time positions above the number fixed by the
249Legislature when a contract is terminated and the outsourced
250service must be returned to the department.
251     7.  A listing of assets proposed for transfer to or use by
252the external service provider, a description of the proposed
253requirements for maintenance of those assets by the external
254service provider or the department in accordance with chapter
255273, Florida Statutes, a plan for their disposition upon
256termination of the contract, and a description of how the
257planned asset transfer or use by the contractor is in the best
258interest of the department and the state.
259     (b)1.  If the department proposes to outsource the service
260in the next fiscal year, the department shall submit the
261business case with the department's final legislative budget
262request, in the manner and form prescribed in the legislative
263budget request instructions under section 216.023, Florida
264Statutes. Upon approval in the General Appropriations Act, the
265department may initiate and complete the procurement process
266under section 287.057, Florida Statutes, and shall have the
267authority to enter into contracts with the external service
268provider.
269     2.  If a proposed outsourcing initiative would require
270integration with, or would in any way affect other state
271information technology systems, the department shall submit the
272feasibility study documentation required by the legislative
273budget request instructions under section 216.023, Florida
274Statutes.
275     (c)  If the department proposes to outsource a service
276during a fiscal year and the outsourcing provision was not
277included in the approved operating budget of the department, the
278department must provide to the Governor, the President of the
279Senate, the Speaker of the House of Representatives, the chairs
280of the legislative appropriations committees, and the chairs of
281the relevant substantive committees the business case that
282complies with the requirements of paragraph (a) at least 45 days
283before the release of any solicitation documents, as provided
284for in section 287.057, Florida Statutes. Any budgetary changes
285that are inconsistent with the department's approved budget may
286not be made to existing programs unless the changes are
287recommended to the Legislative Budget Commission by the Governor
288and the Legislative Budget Commission expressly approves the
289program changes.
290     (d)  The department may not privatize a service without
291specific authority provided in general law, the General
292Appropriations Act, legislation implementing the General
293Appropriations Act, or a special appropriations act.
294     (5)  CONTRACTING AND PERFORMANCE MEASURES.--In addition to
295the requirements of section 287.058, Florida Statutes, every
296procurement of contractual services by the department which
297meets or is in excess of the threshold amount provided in
298section 287.017, Florida Statutes, for CATEGORY FIVE, must
299comply with the requirements of this subsection.
300     (a)  The department shall execute a contract containing all
301provisions and conditions, which must include, but need not be
302limited to:
303     1.  A detailed scope of work that clearly specifies each
304service and deliverable to be provided, including a description
305of each deliverable or activity that is quantifiable,
306measurable, and verifiable by the department and the contractor.
307     2.  Associated costs and savings, specific payment terms
308and payment schedules, including incentive and penalty
309provisions, criteria governing payment, and a clear and specific
310schedule to complete all required activities needed to transfer
311the service from the state to the contractor.
312     3.  Clear and specific identification of all required
313performance measures and standards, which must, at a minimum,
314include:
315     a.  Acceptance criteria for each deliverable and service to
316be provided to the department under the terms of the contract
317which document, to the greatest extent possible, the required
318performance level. Acceptance criteria must be detailed, clear,
319and unambiguous and shall be used to measure deliverables and
320services to be provided under the contract.
321     b.  A method for monitoring and reporting progress in
322achieving specified performance standards and levels.
323     c.  The sanctions or penalties that shall be assessed for
324contract or state nonperformance. The department may adopt, by
325rule, provisions for including in its contracts incremental
326penalties to be imposed by its contract managers on a contractor
327due to the contractor's failure to comply with a requirement for
328corrective action. Any financial penalty that is imposed upon a
329contractor may not be paid from funds being used to provide
330services to clients, and the contractor may not reduce the
331amount of services being delivered to clients as a method for
332offsetting the effect of the penalty. If a financial penalty is
333imposed upon a contractor that is a corporation, the department
334shall notify, at a minimum, the board of directors of the
335corporation. The department may notify any additional parties
336that the department believes may be helpful in obtaining the
337corrective action that is being sought. In addition, the rules
338adopted by the department must include provisions that permit
339the department to deduct the financial penalties from funds that
340would otherwise be due to the contractor, not to exceed 10
341percent of the amount that otherwise would be due to the
342contractor for the period of noncompliance. If the department
343imposes a financial penalty, it shall advise the contractor in
344writing of the cause for the penalty. A failure to include such
345deductions in a request for payment constitutes grounds for the
346department to reject that request for payment. The remedies
347identified in this paragraph do not limit or restrict the
348department's application of any other remedy available to it in
349the contract or under law. The remedies described in this
350paragraph may be cumulative and may be assessed upon each
351separate failure to comply with instructions from the department
352to complete corrective action.
353     4.  A requirement that the contractor maintain adequate
354accounting records that comply with all applicable federal and
355state laws and generally accepted accounting principles.
356     5.  A requirement authorizing the department and state to
357have access to and conduct audits of all records related to the
358contract and outsourced services.
359     6.  A requirement that ownership of any intellectual
360property developed in the course of, or as a result of, work or
361services performed under the contract shall transfer to the
362state if the contractor ceases to provide the outsourced
363service.
364     7.  A requirement describing the timing and substance of
365all plans and status or progress reports that are to be
366provided. All plans and status or progress reports must comply
367with any relevant state and federal standards for planning,
368implementation, operations, and oversight.
369     8.  A requirement that the contractor shall comply with
370public-record laws. The contractor shall:
371     a.  Keep and maintain the public records that ordinarily
372and necessarily would be required by the department to perform
373the service.
374     b.  Provide public access to such public records on the
375same terms and conditions that the department would and at a
376cost that does not exceed that provided in chapter 119, Florida
377Statutes.
378     c.  Ensure the confidentiality of records that are exempt
379from disclosure or confidential under law.
380     d.  Meet all legal and auditing requirements for record
381retention, and transfer to the state, at no cost to the state,
382all public records in possession of the contractor upon
383termination of the contract. All records stored electronically
384must be provided to the state in the format compatible with
385state information technology systems.
386     9.  A requirement that any state funds provided for the
387purchase of or improvements to real property are contingent upon
388the contractor granting to the state a security interest in the
389property which is at least equal to the amount of the state
390funds provided for at least 5 years following the date of
391purchase or the completion of the improvements or as further
392required by law. The contract must include a provision that, as
393a condition of receipt of state funding for this purpose, the
394contractor agrees that, if it disposes of the property before
395the department's interest is vacated, the contractor must refund
396the proportionate share of the state's initial investment, as
397adjusted by depreciation.
398     10.  A provision that the contractor annually submit and
399verify, under section 92.525, Florida Statutes, all required
400financial statements.
401     11.  A provision that the contractor will be held
402responsible and accountable for all work covered under the
403contract including any work performed by subcontractors. The
404contract must state that the department may monitor the
405performance of any subcontractor.
406     (b)  A contract may include cost-neutral, performance-based
407incentives that may vary according to the extent a contractor
408achieves or surpasses the performance standards set forth in the
409contract. The incentives may be weighted proportionally to
410reflect the extent to which the contractor has demonstrated that
411it has consistently met or exceeded the contractual requirements
412and the performance standards.
413     (c)  The department shall review the time period for which
414it executes contracts and, to the greatest extent practicable,
415shall execute multiyear contracts to make the most efficient use
416of the resources devoted to contract processing and execution.
417     (d)  When the annualized value of a contract is in excess
418of $1 million, at least one of the persons conducting
419negotiations must be certified as a contract negotiator based
420upon standards established by the Department of Management
421Services.
422     (e)  The department may not amend a contract without first
423submitting the proposed contract amendment to the Executive
424Office of the Governor for approval if the effect of the
425amendment would be to increase:
426     1.  The value of the contract by $250,000 for those
427contracts with a total value of at least $250,000 but less than
428$1 million;
429     2.  The value of the contract by $1 million for those
430contracts with a total value of at least $1 million but less
431than $10 million;
432     3.  The value of the contract by 10 percent for those
433contracts with a total value of $10 million or more; or
434     4.  The term of the contract by 1 year or more.
435
436When the department proposes any contract amendment that meets
437the criteria described in this paragraph, it shall submit the
438proposed contract amendment to the Executive Office of the
439Governor for approval and shall immediately notify the chairs of
440the legislative appropriations committees. The Executive Office
441of the Governor may not approve the proposed contract amendment
442until 14 days following receipt of the notification to the
443legislative appropriations chairs. If either chair of the
444legislative appropriations committees objects in writing to a
445proposed contract amendment within 14 days following
446notification and specifies the reasons for the objection, the
447Executive Office of the Governor shall disapprove the proposed
448contract amendment or shall submit the proposed contract
449amendment to the Administration Commission. The proposed
450contract amendment may be approved by the Administration
451Commission by a two-thirds vote of the members present with the
452Governor voting in the affirmative. In the absence of approval
453by the commission, the proposed contract amendment shall be
454automatically disapproved. Otherwise, upon approval by the
455Governor or Administration Commission, the department may
456execute the contract amendment.
457     (f)  An amendment that is issued under legislative
458direction, including funding adjustments annually provided for
459in the General Appropriations Act or the federal appropriations
460acts, need not be submitted for approval in accordance with
461paragraph (d).
462     (g)  In addition to the requirements of section 287.057(13)
463and (14), Florida Statutes, the department shall verify that all
464specific direct and indirect costs, savings, performance
465measures and standards, and qualitative and quantitative
466benefits identified in the original contract have been satisfied
467by a contractor or the department before the contract is
468extended or renewed. The documentation must include an
469explanation of any differences between the required performance
470as identified in the contract and the actual performance of the
471contractor. The documentation must be included in the official
472contract file.
473     (h)  The department shall, in consultation with the
474Department of Management Services, develop contract templates
475and guidelines that define the mandatory contract provisions and
476other requirements identified in this subsection and that must
477be used for all contractual service contracts meeting the
478requirements of this subsection. All contract templates and
479guidelines shall be developed by September 30, 2005.
480     (6)  CONTRACT-MANAGEMENT REQUIREMENTS AND
481PROCESS.--Notwithstanding section 287.057(15), Florida Statutes,
482the department is responsible for establishing a contract-
483management process that requires a member of the department's
484Senior Management Service to assign in writing the
485responsibility of a contract to a contract manager. The
486department shall maintain a set of procedures describing its
487contract-management process which must minimally include the
488following requirements:
489     (a)  The contract manager shall maintain the official
490contract file throughout the duration of the contract and for a
491period not less than 6 years after the termination of the
492contract.
493     (b)  The contract manager shall review all invoices for
494compliance with the criteria and payment schedule provided for
495in the contract and shall approve payment of all invoices before
496their transmission to the Department of Financial Services for
497payment. Only the contract manager shall approve the invoices
498for a specific contract, unless the contract manager is
499temporarily unavailable to review an invoice. The contract file
500must contain an explanation for any periods of temporary
501unavailability of the assigned contract manager. For any
502individual invoice in excess of $500,000, a member of the
503Selected Exempt Service or Senior Management Service shall also
504sign payment approval of the invoice. For any individual invoice
505in excess of $1 million, a member of the Senior Management
506Service shall also sign payment approval of the invoice.
507     (c)  The contract manager shall maintain a schedule of
508payments and total amounts disbursed and shall periodically
509reconcile the records with the state's official accounting
510records.
511     (d)  For contracts involving the provision of direct client
512services, the contract manager shall periodically visit the
513physical location where the services are delivered and speak
514directly to clients receiving the services and the staff
515responsible for delivering the services.
516     (e)  For contracts for which the contractor is a
517corporation, the contract manager shall attend at least one
518board meeting semiannually, if held and if within 100 miles of
519the contract manager's official headquarters.
520     (f)  The contract manager shall meet at least once a month
521directly with the contractor's representative and maintain
522records of such meetings.
523     (g)  The contract manager shall periodically document any
524differences between the required performance measures and the
525actual performance measures. If a contractor fails to meet and
526comply with the performance measures established in the
527contract, the department may allow a reasonable period for the
528contractor to correct performance deficiencies. If performance
529deficiencies are not resolved to the satisfaction of the
530department within the prescribed time, and if no extenuating
531circumstances can be documented by the contractor to the
532department's satisfaction, the department must terminate the
533contract. The department may not enter into a new contract with
534that same contractor for the services for which the contract was
535previously terminated for a period of at least 24 months after
536the date of termination. The contract manager shall obtain and
537enforce corrective-action plans, if appropriate, and maintain
538records regarding the completion or failure to complete
539corrective-action items.
540     (h)  The contract manager shall document any contract
541modifications, which shall include recording any contract
542amendments as provided for in this section.
543     (i)  The contract manager shall be properly trained before
544being assigned responsibility for any contract.
545
546The department shall develop standards of conduct and a range of
547disciplinary actions for its employees which are specifically
548related to carrying out contract-management responsibilities.
549     (7)  CONTRACT-MONITORING REQUIREMENTS AND PROCESS.--The
550department shall establish contract-monitoring units staffed by
551full-time career service employees who report to a member of the
552Select Exempt Service or Senior Management Service and who have
553been properly trained to perform contract monitoring. A member
554of the Senior Management Service shall assign in writing a
555specific contract to a contract-monitoring unit, with at least
556one member of the contract-monitoring unit possessing specific
557knowledge and experience in the contract's program area. The
558department shall establish a contract-monitoring process that
559must include, but need not be limited to, the following
560requirements:
561     (a)  Performing a risk assessment at the start of each
562fiscal year and preparing an annual contract-monitoring schedule
563that includes consideration for the level of risk assigned. The
564department may monitor any contract at any time regardless of
565whether such monitoring was originally included in the annual
566contract-monitoring schedule.
567     (b)  Preparing a contract-monitoring plan, including
568sampling procedures, before performing on-site monitoring at
569external locations of a service provider. The plan must include
570a description of the programmatic, fiscal, and administrative
571components that will be monitored on-site. If appropriate,
572clinical and therapeutic components may be included.
573     (c)  Conducting analyses of the performance and compliance
574of an external service provider by means of desk reviews if the
575external service provider will not be monitored on-site during a
576fiscal year.
577     (d)  Unless the department sets forth in writing the need
578for an extension, providing a written report presenting the
579results of the monitoring within 30 days after the completion of
580the on-site monitoring or desk review. Report extensions may not
581exceed 30 days after the original completion date. The
582department shall develop and use a standard contract-monitoring
583report format and shall provide access to the reports by means
584of a website that is available to the Legislature.
585     (e)  For contracts involving the provision of direct client
586services, requiring the contract monitor to visit the physical
587location where the services are being delivered and to speak
588directly to the clients receiving the services and with the
589staff responsible for delivering the services.
590     (f)  Developing and maintaining a set of procedures
591describing the contract-monitoring process.
592
593The department shall develop standards of conduct and a range of
594disciplinary actions for its employees which are specifically
595related to carrying out contract-monitoring responsibilities.
596     (8)  REPORTS TO THE LEGISLATURE.--Beginning October 1,
5972005, the department shall make available to the Legislature
598electronically all documents associated with the procurement and
599contracting functions of the department. The documents in the
600database must include, but are not limited to, all:
601     (a)  Business cases;
602     (b)  Procurement documents;
603     (c)  Contracts and any related files, attachments, or
604amendments;
605     (d)  Contract monitoring reports;
606     (e)  Corrective action plans and reports of corrective
607actions taken when contractor performance deficiencies are
608identified; and
609     (f)  Status reports on all outsourcing initiatives
610describing the progress by the department towards achieving the
611business objectives, costs, savings, and quantifiable benefits
612identified in the business case.
613     Section 2.  Section 402.73, Florida Statutes, is amended to
614read:
615     402.73  Contracting and performance standards.--
616     (1)  The Department of Children and Family Services shall
617establish performance standards for all contracted client
618services. Notwithstanding s. 287.057(5)(f), the department must
619competitively procure any contract for client services when any
620of the following occurs:
621     (a)  The provider fails to meet appropriate performance
622standards established by the department after the provider has
623been given a reasonable opportunity to achieve the established
624standards.
625     (b)  A new program or service has been authorized and
626funded by the Legislature and the annual value of the contract
627for such program or service is $300,000 or more.
628     (c)  The department has concluded, after reviewing market
629prices and available treatment options, that there is evidence
630that the department can improve the performance outcomes
631produced by its contract resources. At a minimum, the department
632shall review market prices and available treatment options
633biennially. The department shall compile the results of the
634biennial review and include the results in its annual
635performance report to the Legislature pursuant to chapter 94-
636249, Laws of Florida. The department shall provide notice and an
637opportunity for public comment on its review of market prices
638and available treatment options.
639     (2)  The competitive requirements of subsection (1) must be
640initiated for each contract that meets the criteria of this
641subsection, unless the secretary makes a written determination
642that particular facts and circumstances require deferral of the
643competitive process. Facts and circumstances must be
644specifically described for each individual contract proposed for
645deferral and must include one or more of the following:
646     (a)  An immediate threat to the health, safety, or welfare
647of the department's clients.
648     (b)  A threat to appropriate use or disposition of
649facilities that have been financed in whole, or in substantial
650part, through contracts or agreements with a state agency.
651     (c)  A threat to the service infrastructure of a community
652which could endanger the well-being of the department's clients.
653
654Competitive procurement of client services contracts that meet
655the criteria in subsection (1) may not be deferred for longer
656than 1 year.
657     (3)  The Legislature intends that the department obtain
658services in the manner that is most cost-effective for the
659state, that provides the greatest long-term benefits to the
660clients receiving services, and that minimizes the disruption of
661client services. In order to meet these legislative goals, the
662department may adopt rules providing procedures for the
663competitive procurement of contracted client services which
664represent an alternative to the request-for-proposal or
665invitation-to-bid process. The alternative competitive
666procedures shall permit the department to solicit professional
667qualifications from prospective providers and to evaluate such
668statements of qualification before requesting service proposals.
669The department may limit the firms invited to submit service
670proposals to only those firms that have demonstrated the highest
671level of professional capability to provide the services under
672consideration, but may not invite fewer than three firms to
673submit service proposals, unless fewer than three firms
674submitted satisfactory statements of qualification. The
675alternative procedures must, at a minimum, allow the department
676to evaluate competing proposals and select the proposal that
677provides the greatest benefit to the state while considering the
678quality of the services, dependability, and integrity of the
679provider, the dependability of the provider's services, the
680experience of the provider in serving target populations or
681client groups substantially identical to members of the target
682population for the contract in question, and the ability of the
683provider to secure local funds to support the delivery of
684services, including, but not limited to, funds derived from
685local governments. These alternative procedures need not conform
686to the requirements of s. 287.042 or s. 287.057(1) or (2).
687     (4)  The department shall review the period for which it
688executes contracts and, to the greatest extent practicable,
689shall execute multiyear contracts to make the most efficient use
690of the resources devoted to contract processing and execution.
691     (5)  When it is in the best interest of a defined segment
692of its consumer population, the department may competitively
693procure and contract for systems of treatment or service that
694involve multiple providers, rather than procuring and
695contracting for treatment or services separately from each
696participating provider. The department must ensure that all
697providers that participate in the treatment or service system
698meet all applicable statutory, regulatory, service-quality, and
699cost-control requirements. If other governmental entities or
700units of special purpose government contribute matching funds to
701the support of a given system of treatment or service, the
702department shall formally request information from those funding
703entities in the procurement process and may take the information
704received into account in the selection process. If a local
705government contributes match to support the system of treatment
706or contracted service and if the match constitutes at least 25
707percent of the value of the contract, the department shall
708afford the governmental match contributor an opportunity to name
709an employee as one of the persons required by s. 287.057(17) to
710evaluate or negotiate certain contracts, unless the department
711sets forth in writing the reason why such inclusion would be
712contrary to the best interest of the state. Any employee so
713named by the governmental match contributor shall qualify as one
714of the persons required by s. 287.057(17). No governmental
715entity or unit of special purpose government may name an
716employee as one of the persons required by s. 287.057(17) if it,
717or any of its political subdivisions, executive agencies, or
718special districts, intends to compete for the contract to be
719awarded. The governmental funding entity or match contributor
720shall comply with any deadlines and procurement procedures
721established by the department. The department may also involve
722nongovernmental funding entities in the procurement process when
723appropriate.
724     (6)  The department may contract for or provide assessment
725and case management services independently from treatment
726services.
727     (7)  The department shall adopt, by rule, provisions for
728including in its contracts incremental penalties to be imposed
729by its contract managers on a service provider due to the
730provider's failure to comply with a requirement for corrective
731action. Any financial penalty that is imposed upon a provider
732may not be paid from funds being used to provide services to
733clients, and the provider may not reduce the amount of services
734being delivered to clients as a method for offsetting the impact
735of the penalty. If a financial penalty is imposed upon a
736provider that is a corporation, the department shall notify, at
737a minimum, the board of directors of the corporation. The
738department may notify, at its discretion, any additional parties
739that the department believes may be helpful in obtaining the
740corrective action that is being sought. Further, the rules
741adopted by the department must include provisions that permit
742the department to deduct the financial penalties from funds that
743would otherwise be due to the provider, not to exceed 10 percent
744of the amount that otherwise would be due to the provider for
745the period of noncompliance. If the department imposes a
746financial penalty, it shall advise the provider in writing of
747the cause for the penalty. A failure to include such deductions
748in a request for payment constitutes a ground for the department
749to reject that request for payment. The remedies identified in
750this subsection do not limit or restrict the department's
751application of any other remedy available to it in the contract
752or under law. The remedies described in this subsection may be
753cumulative and may be assessed upon each separate failure to
754comply with instructions from the department to complete
755corrective action.
756     (8)  The department shall develop standards of conduct and
757a range of disciplinary actions for its employees which are
758specifically related to carrying out contracting
759responsibilities.
760     (1)(9)  The Agency for Persons with Disabilities department
761must implement systems and controls to ensure financial
762integrity and service provision quality in the developmental
763services Medicaid waiver service system.
764     (10)  If a provider fails to meet the performance standards
765established in the contract, the department may allow a
766reasonable period for the provider to correct performance
767deficiencies. If performance deficiencies are not resolved to
768the satisfaction of the department within the prescribed time,
769and if no extenuating circumstances can be documented by the
770provider to the department's satisfaction, the department must
771cancel the contract with the provider. The department may not
772enter into a new contract with that same provider for the
773services for which the contract was previously canceled for a
774period of at least 24 months after the date of cancellation. If
775an adult substance abuse services provider fails to meet the
776performance standards established in the contract, the
777department may allow a reasonable period, not to exceed 6
778months, for the provider to correct performance deficiencies. If
779the performance deficiencies are not resolved to the
780satisfaction of the department within 6 months, the department
781must cancel the contract with the adult substance abuse
782provider, unless there is no other qualified provider in the
783service district.
784     (11)  The department shall include in its standard contract
785document a requirement that any state funds provided for the
786purchase of or improvements to real property are contingent upon
787the contractor or political subdivision granting to the state a
788security interest in the property at least to the amount of the
789state funds provided for at least 5 years from the date of
790purchase or the completion of the improvements or as further
791required by law. The contract must include a provision that, as
792a condition of receipt of state funding for this purpose, the
793provider agrees that, if it disposes of the property before the
794department's interest is vacated, the provider will refund the
795proportionate share of the state's initial investment, as
796adjusted by depreciation.
797     (12)  The department shall develop and refine contracting
798and accountability methods that are administratively efficient
799and that provide for optimal provider performance.
800     (13)  The department may competitively procure any contract
801when it deems it is in the best interest of the state to do so.
802The requirements described in subsection (1) do not, and may not
803be construed to, limit in any way the department's ability to
804competitively procure any contract it executes, and the absence
805of any or all of the criteria described in subsection (1) may
806not be used as the basis for an administrative or judicial
807protest of the department's determination to conduct
808competition, make an award, or execute any contract.
809     (14)  A contract may include cost-neutral, performance-
810based incentives that may vary according to the extent a
811provider achieves or surpasses the performance standards set
812forth in the contract. Such incentives may be weighted
813proportionally to reflect the extent to which the provider has
814demonstrated that it has consistently met or exceeded the
815contractual requirements and the department's performance
816standards.
817     (2)(15)  Nothing contained in chapter 287 shall require
818competitive bids for health services involving examination,
819diagnosis, or treatment.
820     Section 3.  Paragraphs (a), (b), (e), (f), and (g) of
821subsection (1), paragraph (b) of subsection (2), paragraph (a)
822of subsection (4), and subsections (6) and (9) of section
823409.1671, Florida Statutes, are amended to read:
824     409.1671  Foster care and related services; outsourcing
825privatization.--
826     (1)(a)  It is the intent of the Legislature that the
827Department of Children and Family Services shall outsource
828privatize the provision of foster care and related services
829statewide. It is further the Legislature's intent to encourage
830communities and other stakeholders in the well-being of children
831to participate in assuring that children are safe and well-
832nurtured. However, while recognizing that some local governments
833are presently funding portions of certain foster care and
834related services programs and may choose to expand such funding
835in the future, the Legislature does not intend by its
836outsourcing privatization of foster care and related services
837that any county, municipality, or special district be required
838to assist in funding programs that previously have been funded
839by the state. Counties that provide children and family services
840with at least 40 licensed residential group care beds by July 1,
8412003, and provide at least $2 million annually in county general
842revenue funds to supplement foster and family care services
843shall continue to contract directly with the state and shall be
844exempt from the provisions of this section. Nothing in this
845paragraph prohibits any county, municipality, or special
846district from future voluntary funding participation in foster
847care and related services. As used in this section, the term
848"outsource" "privatize" means to contract with competent,
849community-based agencies. The department shall submit a plan to
850accomplish outsourcing privatization statewide, through a
851competitive process, phased in over a 3-year period beginning
852January 1, 2000. This plan must be developed with local
853community participation, including, but not limited to, input
854from community-based providers that are currently under contract
855with the department to furnish community-based foster care and
856related services, and must include a methodology for determining
857and transferring all available funds, including federal funds
858that the provider is eligible for and agrees to earn and that
859portion of general revenue funds which is currently associated
860with the services that are being furnished under contract. The
861methodology must provide for the transfer of funds appropriated
862and budgeted for all services and programs that have been
863incorporated into the project, including all management, capital
864(including current furniture and equipment), and administrative
865funds to accomplish the transfer of these programs. This
866methodology must address expected workload and at least the 3
867previous years' experience in expenses and workload. With
868respect to any district or portion of a district in which
869outsourcing privatization cannot be accomplished within the 3-
870year timeframe, the department must clearly state in its plan
871the reasons the timeframe cannot be met and the efforts that
872should be made to remediate the obstacles, which may include
873alternatives to total outsourcing privatization, such as public-
874private partnerships. As used in this section, the term "related
875services" includes, but is not limited to, family preservation,
876independent living, emergency shelter, residential group care,
877foster care, therapeutic foster care, intensive residential
878treatment, foster care supervision, case management,
879postplacement supervision, permanent foster care, and family
880reunification. Unless otherwise provided for, the state attorney
881shall provide child welfare legal services, pursuant to chapter
88239 and other relevant provisions, in Pinellas and Pasco
883Counties. When a private nonprofit agency has received case
884management responsibilities, transferred from the state under
885this section, for a child who is sheltered or found to be
886dependent and who is assigned to the care of the outsourcing
887privatization project, the agency may act as the child's
888guardian for the purpose of registering the child in school if a
889parent or guardian of the child is unavailable and his or her
890whereabouts cannot reasonably be ascertained. The private
891nonprofit agency may also seek emergency medical attention for
892such a child, but only if a parent or guardian of the child is
893unavailable, his or her whereabouts cannot reasonably be
894ascertained, and a court order for such emergency medical
895services cannot be obtained because of the severity of the
896emergency or because it is after normal working hours. However,
897the provider may not consent to sterilization, abortion, or
898termination of life support. If a child's parents' rights have
899been terminated, the nonprofit agency shall act as guardian of
900the child in all circumstances.
901     (b)  It is the intent of the Legislature that the
902department will continue to work towards full outsourcing
903privatization in a manner that assures the viability of the
904community-based system of care and best provides for the safety
905of children in the child protection system. To this end, the
906department is directed to continue the process of outsourcing
907privatizing services in those counties in which signed startup
908contracts have been executed. The department may also continue
909to enter into startup contracts with additional counties.
910However, no services shall be transferred to a community-based
911care lead agency until the department, in consultation with the
912local community alliance, has determined and certified in
913writing to the Governor and the Legislature that the district is
914prepared to transition the provision of services to the lead
915agency and that the lead agency is ready to deliver and be
916accountable for such service provision. In making this
917determination, the department shall conduct a readiness
918assessment of the district and the lead agency.
919     1.  The assessment shall evaluate the operational readiness
920of the district and the lead agency based on:
921     a.  A set of uniform criteria, developed in consultation
922with currently operating community-based care lead agencies and
923reflecting national accreditation standards, that evaluate
924programmatic, financial, technical assistance, training and
925organizational competencies; and
926     b.  Local criteria reflective of the local community-based
927care design and the community alliance priorities.
928     2.  The readiness assessment shall be conducted by a joint
929team of district and lead agency staff with direct experience
930with the start up and operation of a community-based care
931service program and representatives from the appropriate
932community alliance. Within resources available for this purpose,
933the department may secure outside audit expertise when necessary
934to assist a readiness assessment team.
935     3.  Upon completion of a readiness assessment, the
936assessment team shall conduct an exit conference with the
937district and lead agency staff responsible for the transition.
938     4.  Within 30 days following the exit conference with staff
939of each district and lead agency, the secretary shall certify in
940writing to the Governor and the Legislature that both the
941district and the lead agency are prepared to begin the
942transition of service provision based on the results of the
943readiness assessment and the exit conference. The document of
944certification must include specific evidence of readiness on
945each element of the readiness instrument utilized by the
946assessment team as well as a description of each element of
947readiness needing improvement and strategies being implemented
948to address each one.
949     (e)  As used in this section, the term "eligible lead
950community-based provider" means a single agency with which the
951department shall contract for the provision of child protective
952services in a community that is no smaller than a county. The
953secretary of the department may authorize more than one eligible
954lead community-based provider within a single county when to do
955so will result in more effective delivery of foster care and
956related services. To compete for an outsourcing a privatization
957project, such agency must have:
958     1.  The ability to coordinate, integrate, and manage all
959child protective services in the designated community in
960cooperation with child protective investigations.
961     2.  The ability to ensure continuity of care from entry to
962exit for all children referred from the protective investigation
963and court systems.
964     3.  The ability to provide directly, or contract for
965through a local network of providers, all necessary child
966protective services. Such agencies should directly provide no
967more than 35 percent of all child protective services provided.
968     4.  The willingness to accept accountability for meeting
969the outcomes and performance standards related to child
970protective services established by the Legislature and the
971Federal Government.
972     5.  The capability and the willingness to serve all
973children referred to it from the protective investigation and
974court systems, regardless of the level of funding allocated to
975the community by the state, provided all related funding is
976transferred.
977     6.  The willingness to ensure that each individual who
978provides child protective services completes the training
979required of child protective service workers by the Department
980of Children and Family Services.
981     7.  The ability to maintain eligibility to receive all
982federal child welfare funds, including Title IV-E and IV-A
983funds, currently being used by the Department of Children and
984Family Services.
985     8.  Written agreements with Healthy Families Florida lead
986entities in their community, pursuant to s. 409.153, to promote
987cooperative planning for the provision of prevention and
988intervention services.
989     9.  A board of directors, of which at least 51 percent of
990the membership is comprised of persons residing in this state.
991Of the state residents, at least 51 percent must also reside
992within the service area of the lead community-based provider.
993     (f)1.  The Legislature finds that the state has
994traditionally provided foster care services to children who have
995been the responsibility of the state. As such, foster children
996have not had the right to recover for injuries beyond the
997limitations specified in s. 768.28. The Legislature has
998determined that foster care and related services need to be
999outsourced privatized pursuant to this section and that the
1000provision of such services is of paramount importance to the
1001state. The purpose for such outsourcing privatization is to
1002increase the level of safety, security, and stability of
1003children who are or become the responsibility of the state. One
1004of the components necessary to secure a safe and stable
1005environment for such children is that private providers maintain
1006liability insurance. As such, insurance needs to be available
1007and remain available to nongovernmental foster care and related
1008services providers without the resources of such providers being
1009significantly reduced by the cost of maintaining such insurance.
1010     2.  The Legislature further finds that, by requiring the
1011following minimum levels of insurance, children in outsourced
1012privatized foster care and related services will gain increased
1013protection and rights of recovery in the event of injury than
1014provided for in s. 768.28.
1015     (g)  In any county in which a service contract has not been
1016executed by December 31, 2004, the department shall ensure
1017access to a model comprehensive residential services program as
1018described in s. 409.1677 which, without imposing undue
1019financial, geographic, or other barriers, ensures reasonable and
1020appropriate participation by the family in the child's program.
1021     1.  In order to ensure that the program is operational by
1022December 31, 2004, the department must, by December 31, 2003,
1023begin the process of establishing access to a program in any
1024county in which the department has not either entered into a
1025transition contract or approved a community plan, as described
1026in paragraph (d), which ensures full outsourcing privatization
1027by the statutory deadline.
1028     2.  The program must be procured through a competitive
1029process.
1030     3.  The Legislature does not intend for the provisions of
1031this paragraph to substitute for the requirement that full
1032conversion to community-based care be accomplished.
1033     (2)
1034     (b)  Persons employed by the department in the provision of
1035foster care and related services whose positions are being
1036outsourced under privatized pursuant to this statute shall be
1037given hiring preference by the provider, if provider
1038qualifications are met.
1039     (4)(a)  The department, in consultation with the community-
1040based agencies that are undertaking the outsourced privatized
1041projects, shall establish a quality assurance program for
1042privatized services. The quality assurance program shall be
1043based on standards established by the Adoption and Safe Families
1044Act as well as by a national accrediting organization such as
1045the Council on Accreditation of Services for Families and
1046Children, Inc. (COA) or CARF--the Rehabilitation Accreditation
1047Commission. Each program operated under contract with a
1048community-based agency must be evaluated annually by the
1049department. The department shall, to the extent possible, use
1050independent financial audits provided by the community-based
1051care agency to eliminate or reduce the ongoing contract and
1052administrative reviews conducted by the department. The
1053department may suggest additional items to be included in such
1054independent financial audits to meet the department's needs.
1055Should the department determine that such independent financial
1056audits are inadequate, then other audits, as necessary, may be
1057conducted by the department. Nothing herein shall abrogate the
1058requirements of s. 215.97. The department shall submit an annual
1059report regarding quality performance, outcome measure
1060attainment, and cost efficiency to the President of the Senate,
1061the Speaker of the House of Representatives, the minority leader
1062of each house of the Legislature, and the Governor no later than
1063January 31 of each year for each project in operation during the
1064preceding fiscal year.
1065     (6)  Beginning January 1, 1999, and continuing at least
1066through June 30, 2000, the Department of Children and Family
1067Services shall outsource privatize all foster care and related
1068services in district 5 while continuing to contract with the
1069current model programs in districts 1, 4, and 13, and in
1070subdistrict 8A, and shall expand the subdistrict 8A pilot
1071program to incorporate Manatee County. Planning for the district
10725 outsourcing privatization shall be done by providers that are
1073currently under contract with the department for foster care and
1074related services and shall be done in consultation with the
1075department.  A lead provider of the district 5 program shall be
1076competitively selected, must demonstrate the ability to provide
1077necessary comprehensive services through a local network of
1078providers, and must meet criteria established in this section.
1079Contracts with organizations responsible for the model programs
1080must include the management and administration of all outsourced
1081privatized services specified in subsection (1). However, the
1082department may use funds for contract management only after
1083obtaining written approval from the Executive Office of the
1084Governor. The request for such approval must include, but is not
1085limited to, a statement of the proposed amount of such funds and
1086a description of the manner in which such funds will be used. If
1087the community-based organization selected for a model program
1088under this subsection is not a Medicaid provider, the
1089organization shall be issued a Medicaid provider number pursuant
1090to s. 409.907 for the provision of services currently authorized
1091under the state Medicaid plan to those children encompassed in
1092this model and in a manner not to exceed the current level of
1093state expenditure.
1094     (9)  Each district and subdistrict that participates in the
1095model program effort or any future outsourcing privatization
1096effort as described in this section must thoroughly analyze and
1097report the complete direct and indirect costs of delivering
1098these services through the department and the full cost of
1099outsourcing privatization, including the cost of monitoring and
1100evaluating the contracted services.
1101     Section 4.  The Office of Program Policy Analysis and
1102Government Accountability shall conduct two reviews of the
1103contract-management and accountability structures of the
1104Department of Children and Family Services, including, but not
1105limited to, whether the department is adequately monitoring and
1106managing its outsourced or privatized functions and services.
1107The office shall report its findings and recommendations to the
1108President of the Senate, the Speaker of the House of
1109Representatives, and the Auditor General by February 1 of 2006
1110and 2007, respectively.
1111     Section 5.  Section 402.72, Florida Statutes, is repealed.
1112     Section 6.  For fiscal year 2005-2006, there is hereby
1113appropriated the sum of $102,232 in nonrecurring General Revenue
1114funds to the Department of Children and Family Services to
1115enable the department to comply with the electronic reporting
1116requirements of section 1 of this act.
1117     Section 7.  This act shall take effect July 1, 2005.


CODING: Words stricken are deletions; words underlined are additions.

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