August 18, 2019
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_h1827c2
HB 1827CS

CHAMBER ACTION




1The Health & Families Council recommends the following:
2
3     Council/Committee Substitute
4     Remove the entire bill and insert:
5
A bill to be entitled
6An act relating to the Department of Children and Family
7Services; providing legislative intent with respect to
8establishing a structure by which the department shall
9monitor and manage contracts with external service
10providers; providing definitions; requiring the department
11to competitively procure certain commodities and
12contractual services; requiring the department to allow
13all public postsecondary institutions to bid on contracts
14intended for any public postsecondary institution;
15authorizing the department to competitively procure and
16contract for systems of treatment or service that involve
17multiple providers; providing requirements if other
18governmental entities contribute matching funds; requiring
19that an entity providing matching funds must comply with
20certain procurement procedures; authorizing the department
21to independently procure and contract for treatment
22services; requiring that the department develop a business
23case before outsourcing any service or function; providing
24requirements for the business case; requiring that the
25business case be submitted to the Legislature for
26approval; requiring that a contractual service that has
27previously been outsourced be subject to the requirements
28for a business case; requiring that a procurement of
29contractual services equal to or in excess of the
30threshold amount for CATEGORY FIVE comply with specified
31requirements, including a scope of work and performance
32standards; authorizing the department to adopt incremental
33penalties by rule; authorizing the department to include
34cost-neutral, performance-based incentives in a contract;
35requiring multiyear contracts; providing an exception and
36a requirement; requiring that a contract in excess of $1
37million be negotiated by a contract negotiator who is
38certified according to standards established by the
39Department of Management Services; limiting circumstances
40under which the department may amend a contract; requiring
41that a proposed contract amendment be submitted to the
42Executive Office of the Governor for approval; requiring
43approval of a contract amendment by the Administration
44Commission under certain circumstances; requiring the
45department to verify that contractual terms have been
46satisfied before renewing a contract; requiring certain
47documentation; requiring the department to develop, in
48consultation with the Department of Management Services,
49contract templates and guidelines; requiring that the
50department establish a contract-management process;
51specifying the requirements for and components of the
52contract-management process; providing requirements for
53resolving performance deficiencies and terminating a
54contract; requiring a corrective-action plan under certain
55circumstances; requiring the department to develop
56standards of conduct and disciplinary actions; requiring
57that the department establish contract-monitoring units
58and a contract-monitoring process; requiring written
59reports; requiring on-site visits for contracts involving
60the provision of direct client services; prohibiting
61contractors from engaging in certain activities; requiring
62the department to make certain documents available to the
63Legislature; requiring the department to create an
64electronic database to store the documents; amending s.
65402.73, F.S.; requiring the Agency for Persons with
66Disabilities to implement systems to ensure quality and
67fiscal integrity of programs in the developmental services
68Medicaid waiver system; providing an exemption for health
69services from competitive bidding requirements; amending
70s. 409.1671, F.S.; conforming provisions to changes made
71by the act; requiring that the Office of Program Policy
72Analysis and Government Accountability conduct two reviews
73of the contract-management and accountability structures
74of the department and report to the Legislature and the
75Auditor General; repealing s. 402.72, F.S., relating to
76contract-management requirements for the Department of
77Children and Family Services; providing an appropriation;
78providing an effective date.
79
80Be It Enacted by the Legislature of the State of Florida:
81
82     Section 1.  Department of Children and Family Services;
83procurement of contractual services; outsourcing or
84privatization; contract management.--
85     (1)  LEGISLATIVE INTENT.--The Legislature intends that the
86Department of Children and Family Services obtain services in
87the manner that is most efficient and cost-effective for the
88state, that provides the greatest long-term benefits to the
89clients receiving services, and that minimizes the disruption of
90client services. In order to meet these legislative goals, the
91department shall comply with legislative policy guidelines that
92require compliance with uniform procedures for procuring
93contractual services, prescribe how the department must
94outsource its programmatic and administrative services to
95external service providers rather than having them provided by
96the department or another state agency, and establish a
97contract-management and contract-monitoring process.
98     (2)  DEFINITIONS.--As used in this section, the term:
99     (a)  "Contract manager" means the department employee who
100is responsible for enforcing the compliance with administrative
101and programmatic terms and conditions of a contract. The
102contract manager is the primary point of contact through which
103all contracting information flows between the department and the
104contractor. The contract manager is responsible for day-to-day
105contract oversight, including approval of contract deliverables
106and invoices. All actions related to the contract shall be
107initiated by or coordinated with the contract manager. The
108contract manager maintains the official contract files.
109     (b)  "Contract monitor" means the department employee who
110is responsible for observing, recording, and reporting to the
111contract manager and other designated entities the information
112necessary to assist the contract manager and program management
113in determining whether the contractor is in compliance with the
114administrative and programmatic terms and conditions of the
115contract.
116     (c)  "Department" means the Department of Children and
117Family Services.
118     (d)  "Outsourcing" means the process of contracting with an
119external service provider to provide a service, in whole or in
120part, while the department retains the responsibility and
121accountability for the service.
122     (e)  "Performance measure" means the quantitative
123indicators used to assess if the service the external provider
124is performing is achieving the desired results. Measures of
125performance include outputs, direct counts of program
126activities, and outcomes or results of program activities in the
127lives of the clients served.
128     (f)  "Performance standard" means the quantifiable,
129specified, and desired level to be achieved for a particular
130performance measure.
131     (g)  "Privatize" means any process aimed at transferring
132the responsibility for a service, in whole or in part, from the
133department to the private sector such that the private sector is
134solely and fully responsible for the performance of the specific
135service.
136     (h)  "Service" means all or any portion of a program or
137program component as defined in section 216.011, Florida
138Statutes.
139     (3)  PROCUREMENT OF COMMODITIES AND CONTRACTUAL SERVICES.--
140     (a)  For the purchase of commodities and contractual
141services in excess of the threshold amount established in
142section 287.017, Florida Statutes, for CATEGORY TWO, the
143department shall comply with the requirements set forth in
144section 287.057, Florida Statutes.
145     (b)  Notwithstanding section 287.057(5)(f)13., Florida
146Statutes, whenever the department intends to contract with a
147public postsecondary institution to provide a service, the
148department must allow all public postsecondary institutions in
149this state that are accredited by the Southern Association of
150Colleges and Schools to bid on the contract. Thereafter,
151notwithstanding any other provision to the contrary, if a public
152postsecondary institution intends to subcontract for any service
153awarded in the contract, the subcontracted service must be
154procured by competitive procedures.
155     (c)  When it is in the best interest of a defined segment
156of its consumer population, the department may competitively
157procure and contract for systems of treatment or service that
158involve multiple providers, rather than procuring and
159contracting for treatment or services separately from each
160participating provider. The department must ensure that all
161providers that participate in the treatment or service system
162meet all applicable statutory, regulatory, service-quality, and
163cost-control requirements. If other governmental entities or
164units of special purpose government contribute matching funds to
165the support of a given system of treatment or service, the
166department shall formally request information from those funding
167entities in the procurement process and may take the information
168received into account in the selection process. If a local
169government contributes matching funds to support the system of
170treatment or contracted service and if the match constitutes at
171least 25 percent of the value of the contract, the department
172shall afford the governmental match contributor an opportunity
173to name an employee as one of the persons required by section
174287.057(17), Florida Statutes, to evaluate or negotiate certain
175contracts, unless the department sets forth in writing the
176reason why the inclusion would be contrary to the best interest
177of the state. Any employee so named by the governmental match
178contributor shall qualify as one of the persons required by
179section 287.057(17), Florida Statutes. A governmental entity or
180unit of special purpose government may not name an employee as
181one of the persons required by section 287.057(17), Florida
182Statutes, if it, or any of its political subdivisions, executive
183agencies, or special districts, intends to compete for the
184contract to be awarded. The governmental funding entity or
185contributor of matching funds must comply with all procurement
186procedures set forth in section 287.057, Florida Statutes, when
187appropriate and required.
188     (d)  The department may procure and contract for or provide
189assessment and case-management services independently from
190treatment services.
191     (4)  SOURCING STANDARDS AND REQUIREMENTS.--If the
192department proposes to outsource a service, the department must
193comply with the requirements of this section prior to the
194procurement process provided for in section 287.057, Florida
195Statutes.
196     (a)  The department shall develop a business case
197describing and analyzing the service proposed for outsourcing. A
198business case is part of the solicitation process and is not a
199rule subject to challenge pursuant to section 120.54, Florida
200Statutes. The business case submitted by the department pursuant
201to this section for a service shall be sufficient for all
202contracts executed by the department for that service. The
203business case must include, but need not be limited to:
204     1.  A detailed description of the services to be
205outsourced, a description and analysis of the department's
206current performance of the service, and a rationale documenting
207how outsourcing the service would be in the best interest of the
208state, the department, and its clients.
209     2.  A cost-benefit analysis documenting the estimated
210specific direct and indirect costs, savings, performance
211improvements, risks, and qualitative and quantitative benefits
212involved in or resulting from outsourcing the service. The cost-
213benefit analysis must include a detailed plan and timeline
214identifying all actions that must be implemented to realize
215expected benefits. Under section 92.525, Florida Statutes, the
216Secretary of Children and Family Services shall verify that all
217costs, savings, and benefits are valid and achievable.
218     3.  A description of the specific performance measures and
219standards that must be achieved through the outsourcing
220proposal.
221     4.  A statement of the potential effect on applicable
222federal, state, and local revenues and expenditures. The
223statement must specifically describe the effect on general
224revenue, trust funds, general revenue service charges, and
225interest on trust funds, together with the potential direct or
226indirect effect on federal funding and cost allocations.
227     5.  A plan to ensure compliance with public-record laws,
228which must include components that:
229     a.  Provide public access to public records at a cost that
230does not exceed that provided in chapter 119, Florida Statutes.
231     b.  Ensure the confidentiality of records that are exempt
232from disclosure or confidential under law.
233     c.  Meet all legal requirements for record retention.
234     d.  Allow for transfer to the state, at no cost, all public
235records in possession of the external service provider upon
236termination of the contract.
237     6.  A department transition and implementation plan for
238addressing changes in the number of agency personnel, affected
239business processes, and employee-transition issues. Such a plan
240must also specify the mechanism for continuing the operation of
241the service if the contractor fails to perform and comply with
242the performance measures and standards and provisions of the
243contract. Within this plan, the department shall identify all
244resources, including full-time equivalent positions, which are
245subject to outsourcing. All full-time equivalent positions
246identified in the plan shall be placed in reserve by the
247Executive Office of the Governor until the end of the second
248year of the contract. Notwithstanding the provisions of section
249216.262, Florida Statutes, the Executive Office of the Governor
250shall request authority from the Legislative Budget Commission
251to reestablish full-time positions above the number fixed by the
252Legislature when a contract is terminated and the outsourced
253service must be returned to the department.
254     7.  A listing of assets proposed for transfer to or use by
255the external service provider, a description of the proposed
256requirements for maintenance of those assets by the external
257service provider or the department in accordance with chapter
258273, Florida Statutes, a plan for their disposition upon
259termination of the contract, and a description of how the
260planned asset transfer or use by the contractor is in the best
261interest of the department and the state.
262     (b)1.  If the department proposes to outsource the service
263in the next fiscal year, the department shall submit the
264business case with the department's final legislative budget
265request, in the manner and form prescribed in the legislative
266budget request instructions under section 216.023, Florida
267Statutes. Prior to approval in the General Appropriations Act,
268the agency may initiate the procurement process pursuant to
269section 287.057, Florida Statutes. The agency may complete
270contract execution pursuant to section 287.057, Florida
271Statutes, only upon approval in the General Appropriations Act.
272     2.  If a proposed outsourcing initiative would require
273integration with, or would in any way affect other state
274information technology systems, the department shall submit the
275feasibility study documentation required by the legislative
276budget request instructions under section 216.023, Florida
277Statutes.
278     (c)  If the department proposes to outsource a service
279during a fiscal year and the outsourcing provision was not
280included in the approved operating budget of the department, the
281department must provide to the Governor, the President of the
282Senate, the Speaker of the House of Representatives, the chairs
283of the legislative appropriations committees, and the chairs of
284the relevant substantive committees the business case that
285complies with the requirements of paragraph (a) at least 45 days
286before the release of any solicitation documents, as provided
287for in section 287.057, Florida Statutes. Any budgetary changes
288that are inconsistent with the department's approved budget may
289not be made to existing programs unless the changes are
290recommended to the Legislative Budget Commission by the Governor
291and the Legislative Budget Commission expressly approves the
292program changes.
293     (d)  The department may not privatize a service without
294specific authority provided in general law, the General
295Appropriations Act, legislation implementing the General
296Appropriations Act, or a special appropriations act.
297     (5)  CONTRACTING AND PERFORMANCE MEASURES.--In addition to
298the requirements of section 287.058, Florida Statutes, every
299procurement of contractual services by the department which
300meets or is in excess of the threshold amount provided in
301section 287.017, Florida Statutes, for CATEGORY FIVE, must
302comply with the requirements of this subsection.
303     (a)  The department shall execute a contract containing all
304provisions and conditions, which must include, but need not be
305limited to:
306     1.  A detailed scope of work that clearly specifies each
307service and deliverable to be provided, including a description
308of each deliverable or activity that is quantifiable,
309measurable, and verifiable by the department and the contractor.
310     2.  Associated costs and savings, specific payment terms
311and payment schedules, including incentive and penalty
312provisions, criteria governing payment, and a clear and specific
313schedule to complete all required activities needed to transfer
314the service from the state to the contractor.
315     3.  Clear and specific identification of all required
316performance measures and standards, which must, at a minimum,
317include:
318     a.  Acceptance criteria for each deliverable and service to
319be provided to the department under the terms of the contract
320which document, to the greatest extent possible, the required
321performance level. Acceptance criteria must be detailed, clear,
322and unambiguous and shall be used to measure deliverables and
323services to be provided under the contract.
324     b.  A method for monitoring and reporting progress in
325achieving specified performance standards and levels.
326     c.  The sanctions or penalties that shall be assessed for
327contract or state nonperformance. The department may adopt, by
328rule, provisions for including in its contracts incremental
329penalties to be imposed by its contract managers on a contractor
330due to the contractor's failure to comply with a requirement for
331corrective action. Any financial penalty that is imposed upon a
332contractor may not be paid from funds being used to provide
333services to clients, and the contractor may not reduce the
334amount of services being delivered to clients as a method for
335offsetting the effect of the penalty. If a financial penalty is
336imposed upon a contractor that is a corporation, the department
337shall notify, at a minimum, the board of directors of the
338corporation. The department may notify any additional parties
339that the department believes may be helpful in obtaining the
340corrective action that is being sought. In addition, the rules
341adopted by the department must include provisions that permit
342the department to deduct the financial penalties from funds that
343would otherwise be due to the contractor, not to exceed 10
344percent of the amount that otherwise would be due to the
345contractor for the period of noncompliance. If the department
346imposes a financial penalty, it shall advise the contractor in
347writing of the cause for the penalty. A failure to include such
348deductions in a request for payment constitutes grounds for the
349department to reject that request for payment. The remedies
350identified in this paragraph do not limit or restrict the
351department's application of any other remedy available to it in
352the contract or under law. The remedies described in this
353paragraph may be cumulative and may be assessed upon each
354separate failure to comply with instructions from the department
355to complete corrective action.
356     4.  A requirement that the contractor maintain adequate
357accounting records that comply with all applicable federal and
358state laws and generally accepted accounting principles.
359     5.  A requirement authorizing the department and state to
360have access to and conduct audits of all records related to the
361contract and outsourced services.
362     6.  A requirement that ownership of any intellectual
363property developed in the course of, or as a result of, work or
364services performed under the contract shall transfer to the
365state if the contractor ceases to provide the outsourced
366service.
367     7.  A requirement describing the timing and substance of
368all plans and status or progress reports that are to be
369provided. All plans and status or progress reports must comply
370with any relevant state and federal standards for planning,
371implementation, operations, and oversight.
372     8.  A requirement that the contractor shall comply with
373public-record laws. The contractor shall:
374     a.  Keep and maintain the public records that ordinarily
375and necessarily would be required by the department to perform
376the service.
377     b.  Provide public access to such public records on the
378same terms and conditions that the department would and at a
379cost that does not exceed that provided in chapter 119, Florida
380Statutes.
381     c.  Ensure the confidentiality of records that are exempt
382from disclosure or confidential under law.
383     d.  Meet all legal and auditing requirements for record
384retention, and transfer to the state, at no cost to the state,
385all public records in possession of the contractor upon
386termination of the contract. All records stored electronically
387must be provided to the state in the format compatible with
388state information technology systems.
389     9.  A requirement that any state funds provided for the
390purchase of or improvements to real property are contingent upon
391the contractor granting to the state a security interest in the
392property which is at least equal to the amount of the state
393funds provided for at least 5 years following the date of
394purchase or the completion of the improvements or as further
395required by law. The contract must include a provision that, as
396a condition of receipt of state funding for this purpose, the
397contractor agrees that, if it disposes of the property before
398the department's interest is vacated, the contractor must refund
399the proportionate share of the state's initial investment, as
400adjusted by depreciation.
401     10.  A provision that the contractor annually submit and
402verify, under section 92.525, Florida Statutes, all required
403financial statements.
404     11.  A provision that the contractor will be held
405responsible and accountable for all work covered under the
406contract including any work performed by subcontractors. The
407contract must state that the department may monitor the
408performance of any subcontractor.
409     (b)  A contract may include cost-neutral, performance-based
410incentives that may vary according to the extent a contractor
411achieves or surpasses the performance standards set forth in the
412contract. The incentives may be weighted proportionally to
413reflect the extent to which the contractor has demonstrated that
414it has consistently met or exceeded the contractual requirements
415and the performance standards.
416     (c)  The department shall review the time period for which
417it executes contracts and shall execute multiyear contracts to
418make the most efficient use of the resources devoted to contract
419processing and execution. Whenever the department chooses not to
420use a multiyear contract, a justification for that decision must
421be contained in the contract.
422     (d)  When the annualized value of a contract is in excess
423of $1 million, at least one of the persons conducting
424negotiations must be certified as a contract negotiator based
425upon standards established by the Department of Management
426Services.
427     (e)  The department may not amend a contract without first
428submitting the proposed contract amendment to the Executive
429Office of the Governor for approval if the effect of the
430amendment would be to increase:
431     1.  The value of the contract by $250,000 for those
432contracts with a total value of at least $250,000 but less than
433$1 million;
434     2.  The value of the contract by $1 million for those
435contracts with a total value of at least $1 million but less
436than $10 million;
437     3.  The value of the contract by 10 percent for those
438contracts with a total value of $10 million or more; or
439     4.  The term of the contract by 1 year or more.
440
441When the department proposes any contract amendment that meets
442the criteria described in this paragraph, it shall submit the
443proposed contract amendment to the Executive Office of the
444Governor for approval and shall immediately notify the chairs of
445the legislative appropriations committees. The Executive Office
446of the Governor may not approve the proposed contract amendment
447until 14 days following receipt of the notification to the
448legislative appropriations chairs. If either chair of the
449legislative appropriations committees objects in writing to a
450proposed contract amendment within 14 days following
451notification and specifies the reasons for the objection, the
452Executive Office of the Governor shall disapprove the proposed
453contract amendment or shall submit the proposed contract
454amendment to the Administration Commission. The proposed
455contract amendment may be approved by the Administration
456Commission by a two-thirds vote of the members present with the
457Governor voting in the affirmative. In the absence of approval
458by the commission, the proposed contract amendment shall be
459automatically disapproved. Otherwise, upon approval by the
460Governor or Administration Commission, the department may
461execute the contract amendment.
462     (f)  An amendment that is issued under legislative
463direction, including funding adjustments annually provided for
464in the General Appropriations Act or the federal appropriations
465acts, need not be submitted for approval in accordance with
466paragraph (d).
467     (g)  In addition to the requirements of section 287.057(13)
468and (14), Florida Statutes, the department shall verify, based
469upon the best available data at the point of contract
470renegotiations, that all specific direct and indirect costs,
471savings, performance measures and standards, and qualitative and
472quantitative benefits identified in the original contract have
473been satisfied by a contractor or the department before the
474contract is extended or renewed. The documentation must include
475an explanation of any differences between the required
476performance as identified in the contract and the actual
477performance of the contractor. The documentation must be
478included in the official contract file.
479     (h)  The department shall, in consultation with the
480Department of Management Services, develop contract templates
481and guidelines that define the mandatory contract provisions and
482other requirements identified in this subsection and that must
483be used for all contractual service contracts meeting the
484requirements of this subsection. All contract templates and
485guidelines shall be developed by September 30, 2005.
486     (6)  CONTRACT-MANAGEMENT REQUIREMENTS AND
487PROCESS.--Notwithstanding section 287.057(15), Florida Statutes,
488the department is responsible for establishing a contract-
489management process that requires a member of the department's
490Senior Management Service to assign in writing the
491responsibility of a contract to a contract manager. The
492department shall maintain a set of procedures describing its
493contract-management process which must minimally include the
494following requirements:
495     (a)  The contract manager shall maintain the official
496contract file throughout the duration of the contract and for a
497period not less than 6 years after the termination of the
498contract.
499     (b)  The contract manager shall review all invoices for
500compliance with the criteria and payment schedule provided for
501in the contract and shall approve payment of all invoices before
502their transmission to the Department of Financial Services for
503payment. Only the contract manager shall approve the invoices
504for a specific contract, unless the contract manager is
505temporarily unavailable to review an invoice. The contract file
506must contain an explanation for any periods of temporary
507unavailability of the assigned contract manager. For any
508individual invoice in excess of $500,000, a member of the
509Selected Exempt Service or Senior Management Service shall also
510sign payment approval of the invoice. For any individual invoice
511in excess of $1 million, a member of the Senior Management
512Service shall also sign payment approval of the invoice.
513     (c)  The contract manager shall maintain a schedule of
514payments and total amounts disbursed and shall periodically
515reconcile the records with the state's official accounting
516records.
517     (d)  For contracts involving the provision of direct client
518services, the contract manager shall periodically visit the
519physical location where the services are delivered and speak
520directly to clients receiving the services and the staff
521responsible for delivering the services.
522     (e)  For contracts for which the contractor is a
523corporation, the contract manager shall attend at least one
524board meeting semiannually, if held and if within 100 miles of
525the contract manager's official headquarters.
526     (f)  The contract manager shall meet at least once a month
527directly with the contractor's representative and maintain
528records of such meetings.
529     (g)  The contract manager shall periodically document any
530differences between the required performance measures and the
531actual performance measures. If a contractor fails to meet and
532comply with the performance measures established in the
533contract, the department may allow a reasonable period for the
534contractor to correct performance deficiencies. If performance
535deficiencies are not resolved to the satisfaction of the
536department within the prescribed time, and if no extenuating
537circumstances can be documented by the contractor to the
538department's satisfaction, the department must terminate the
539contract. The department may not enter into a new contract with
540that same contractor for the services for which the contract was
541previously terminated for a period of at least 24 months after
542the date of termination. The contract manager shall obtain and
543enforce corrective-action plans, if appropriate, and maintain
544records regarding the completion or failure to complete
545corrective-action items.
546     (h)  The contract manager shall document any contract
547modifications, which shall include recording any contract
548amendments as provided for in this section.
549     (i)  The contract manager shall be properly trained before
550being assigned responsibility for any contract.
551
552The department shall develop standards of conduct and a range of
553disciplinary actions for its employees which are specifically
554related to carrying out contract-management responsibilities.
555     (7)  CONTRACT-MONITORING REQUIREMENTS AND PROCESS.--The
556department shall establish contract-monitoring units staffed by
557full-time career service employees who report to a member of the
558Select Exempt Service or Senior Management Service and who have
559been properly trained to perform contract monitoring. A member
560of the Senior Management Service shall assign in writing a
561specific contract to a contract-monitoring unit, with at least
562one member of the contract-monitoring unit possessing specific
563knowledge and experience in the contract's program area. The
564department shall establish a contract-monitoring process that
565must include, but need not be limited to, the following
566requirements:
567     (a)  Performing a risk assessment at the start of each
568fiscal year and preparing an annual contract-monitoring schedule
569that includes consideration for the level of risk assigned. The
570department may monitor any contract at any time regardless of
571whether such monitoring was originally included in the annual
572contract-monitoring schedule.
573     (b)  Preparing a contract-monitoring plan, including
574sampling procedures, before performing on-site monitoring at
575external locations of a service provider. The plan must include
576a description of the programmatic, fiscal, and administrative
577components that will be monitored on-site. If appropriate,
578clinical and therapeutic components may be included.
579     (c)  Conducting analyses of the performance and compliance
580of an external service provider by means of desk reviews if the
581external service provider will not be monitored on-site during a
582fiscal year.
583     (d)  Unless the department sets forth in writing the need
584for an extension, providing a written report presenting the
585results of the monitoring within 30 days after the completion of
586the on-site monitoring or desk review. Report extensions may not
587exceed 30 days after the original completion date. The
588department shall develop and use a standard contract-monitoring
589report format and shall provide access to the reports by means
590of a website that is available to the Legislature.
591     (e)  For contracts involving the provision of direct client
592services, requiring the contract monitor to visit the physical
593location where the services are being delivered and to speak
594directly to the clients receiving the services and with the
595staff responsible for delivering the services.
596     (f)  Developing and maintaining a set of procedures
597describing the contract-monitoring process.
598
599The department shall develop standards of conduct and a range of
600disciplinary actions for its employees which are specifically
601related to carrying out contract-monitoring responsibilities.
602     (8)  CONTRACTOR PROHIBITIONS.--A contractor, as defined in
603chapter 287, Florida Statutes, or the employees, agents, or
604subcontractors of the contractor, may not:
605     (a)  Directly or indirectly supervise, direct, or act as an
606approving authority over any state employee or the action
607committed to the responsibility of state employees.
608     (b)  Knowingly participate through decision, approval,
609disapproval, recommendation, preparation of any part of a
610purchase request, influencing the content of any specification
611or procurement standard, rendering of advice, investigation, or
612auditing, or in any other advisory capacity, in the procurement
613of contractual services from an entity of which the contractor,
614or the employees, agents, or subcontractors of the contractor,
615has a material interest.
616     (9)  REPORTS TO THE LEGISLATURE.--Beginning October 1,
6172005, the department shall make available to the Legislature
618electronically all documents associated with the procurement and
619contracting functions of the department. The documents in the
620database must include, but are not limited to, all:
621     (a)  Business cases;
622     (b)  Procurement documents;
623     (c)  Contracts and any related files, attachments, or
624amendments;
625     (d)  Contract monitoring reports;
626     (e)  Corrective action plans and reports of corrective
627actions taken when contractor performance deficiencies are
628identified; and
629     (f)  Status reports on all outsourcing initiatives
630describing the progress by the department towards achieving the
631business objectives, costs, savings, and quantifiable benefits
632identified in the business case.
633     Section 2.  Section 402.73, Florida Statutes, is amended to
634read:
635     402.73  Contracting and performance standards.--
636     (1)  The Department of Children and Family Services shall
637establish performance standards for all contracted client
638services. Notwithstanding s. 287.057(5)(f), the department must
639competitively procure any contract for client services when any
640of the following occurs:
641     (a)  The provider fails to meet appropriate performance
642standards established by the department after the provider has
643been given a reasonable opportunity to achieve the established
644standards.
645     (b)  A new program or service has been authorized and
646funded by the Legislature and the annual value of the contract
647for such program or service is $300,000 or more.
648     (c)  The department has concluded, after reviewing market
649prices and available treatment options, that there is evidence
650that the department can improve the performance outcomes
651produced by its contract resources. At a minimum, the department
652shall review market prices and available treatment options
653biennially. The department shall compile the results of the
654biennial review and include the results in its annual
655performance report to the Legislature pursuant to chapter 94-
656249, Laws of Florida. The department shall provide notice and an
657opportunity for public comment on its review of market prices
658and available treatment options.
659     (2)  The competitive requirements of subsection (1) must be
660initiated for each contract that meets the criteria of this
661subsection, unless the secretary makes a written determination
662that particular facts and circumstances require deferral of the
663competitive process. Facts and circumstances must be
664specifically described for each individual contract proposed for
665deferral and must include one or more of the following:
666     (a)  An immediate threat to the health, safety, or welfare
667of the department's clients.
668     (b)  A threat to appropriate use or disposition of
669facilities that have been financed in whole, or in substantial
670part, through contracts or agreements with a state agency.
671     (c)  A threat to the service infrastructure of a community
672which could endanger the well-being of the department's clients.
673
674Competitive procurement of client services contracts that meet
675the criteria in subsection (1) may not be deferred for longer
676than 1 year.
677     (3)  The Legislature intends that the department obtain
678services in the manner that is most cost-effective for the
679state, that provides the greatest long-term benefits to the
680clients receiving services, and that minimizes the disruption of
681client services. In order to meet these legislative goals, the
682department may adopt rules providing procedures for the
683competitive procurement of contracted client services which
684represent an alternative to the request-for-proposal or
685invitation-to-bid process. The alternative competitive
686procedures shall permit the department to solicit professional
687qualifications from prospective providers and to evaluate such
688statements of qualification before requesting service proposals.
689The department may limit the firms invited to submit service
690proposals to only those firms that have demonstrated the highest
691level of professional capability to provide the services under
692consideration, but may not invite fewer than three firms to
693submit service proposals, unless fewer than three firms
694submitted satisfactory statements of qualification. The
695alternative procedures must, at a minimum, allow the department
696to evaluate competing proposals and select the proposal that
697provides the greatest benefit to the state while considering the
698quality of the services, dependability, and integrity of the
699provider, the dependability of the provider's services, the
700experience of the provider in serving target populations or
701client groups substantially identical to members of the target
702population for the contract in question, and the ability of the
703provider to secure local funds to support the delivery of
704services, including, but not limited to, funds derived from
705local governments. These alternative procedures need not conform
706to the requirements of s. 287.042 or s. 287.057(1) or (2).
707     (4)  The department shall review the period for which it
708executes contracts and, to the greatest extent practicable,
709shall execute multiyear contracts to make the most efficient use
710of the resources devoted to contract processing and execution.
711     (5)  When it is in the best interest of a defined segment
712of its consumer population, the department may competitively
713procure and contract for systems of treatment or service that
714involve multiple providers, rather than procuring and
715contracting for treatment or services separately from each
716participating provider. The department must ensure that all
717providers that participate in the treatment or service system
718meet all applicable statutory, regulatory, service-quality, and
719cost-control requirements. If other governmental entities or
720units of special purpose government contribute matching funds to
721the support of a given system of treatment or service, the
722department shall formally request information from those funding
723entities in the procurement process and may take the information
724received into account in the selection process. If a local
725government contributes match to support the system of treatment
726or contracted service and if the match constitutes at least 25
727percent of the value of the contract, the department shall
728afford the governmental match contributor an opportunity to name
729an employee as one of the persons required by s. 287.057(17) to
730evaluate or negotiate certain contracts, unless the department
731sets forth in writing the reason why such inclusion would be
732contrary to the best interest of the state. Any employee so
733named by the governmental match contributor shall qualify as one
734of the persons required by s. 287.057(17). No governmental
735entity or unit of special purpose government may name an
736employee as one of the persons required by s. 287.057(17) if it,
737or any of its political subdivisions, executive agencies, or
738special districts, intends to compete for the contract to be
739awarded. The governmental funding entity or match contributor
740shall comply with any deadlines and procurement procedures
741established by the department. The department may also involve
742nongovernmental funding entities in the procurement process when
743appropriate.
744     (6)  The department may contract for or provide assessment
745and case management services independently from treatment
746services.
747     (7)  The department shall adopt, by rule, provisions for
748including in its contracts incremental penalties to be imposed
749by its contract managers on a service provider due to the
750provider's failure to comply with a requirement for corrective
751action. Any financial penalty that is imposed upon a provider
752may not be paid from funds being used to provide services to
753clients, and the provider may not reduce the amount of services
754being delivered to clients as a method for offsetting the impact
755of the penalty. If a financial penalty is imposed upon a
756provider that is a corporation, the department shall notify, at
757a minimum, the board of directors of the corporation. The
758department may notify, at its discretion, any additional parties
759that the department believes may be helpful in obtaining the
760corrective action that is being sought. Further, the rules
761adopted by the department must include provisions that permit
762the department to deduct the financial penalties from funds that
763would otherwise be due to the provider, not to exceed 10 percent
764of the amount that otherwise would be due to the provider for
765the period of noncompliance. If the department imposes a
766financial penalty, it shall advise the provider in writing of
767the cause for the penalty. A failure to include such deductions
768in a request for payment constitutes a ground for the department
769to reject that request for payment. The remedies identified in
770this subsection do not limit or restrict the department's
771application of any other remedy available to it in the contract
772or under law. The remedies described in this subsection may be
773cumulative and may be assessed upon each separate failure to
774comply with instructions from the department to complete
775corrective action.
776     (8)  The department shall develop standards of conduct and
777a range of disciplinary actions for its employees which are
778specifically related to carrying out contracting
779responsibilities.
780     (1)(9)  The Agency for Persons with Disabilities department
781must implement systems and controls to ensure financial
782integrity and service provision quality in the developmental
783services Medicaid waiver service system.
784     (10)  If a provider fails to meet the performance standards
785established in the contract, the department may allow a
786reasonable period for the provider to correct performance
787deficiencies. If performance deficiencies are not resolved to
788the satisfaction of the department within the prescribed time,
789and if no extenuating circumstances can be documented by the
790provider to the department's satisfaction, the department must
791cancel the contract with the provider. The department may not
792enter into a new contract with that same provider for the
793services for which the contract was previously canceled for a
794period of at least 24 months after the date of cancellation. If
795an adult substance abuse services provider fails to meet the
796performance standards established in the contract, the
797department may allow a reasonable period, not to exceed 6
798months, for the provider to correct performance deficiencies. If
799the performance deficiencies are not resolved to the
800satisfaction of the department within 6 months, the department
801must cancel the contract with the adult substance abuse
802provider, unless there is no other qualified provider in the
803service district.
804     (11)  The department shall include in its standard contract
805document a requirement that any state funds provided for the
806purchase of or improvements to real property are contingent upon
807the contractor or political subdivision granting to the state a
808security interest in the property at least to the amount of the
809state funds provided for at least 5 years from the date of
810purchase or the completion of the improvements or as further
811required by law. The contract must include a provision that, as
812a condition of receipt of state funding for this purpose, the
813provider agrees that, if it disposes of the property before the
814department's interest is vacated, the provider will refund the
815proportionate share of the state's initial investment, as
816adjusted by depreciation.
817     (12)  The department shall develop and refine contracting
818and accountability methods that are administratively efficient
819and that provide for optimal provider performance.
820     (13)  The department may competitively procure any contract
821when it deems it is in the best interest of the state to do so.
822The requirements described in subsection (1) do not, and may not
823be construed to, limit in any way the department's ability to
824competitively procure any contract it executes, and the absence
825of any or all of the criteria described in subsection (1) may
826not be used as the basis for an administrative or judicial
827protest of the department's determination to conduct
828competition, make an award, or execute any contract.
829     (14)  A contract may include cost-neutral, performance-
830based incentives that may vary according to the extent a
831provider achieves or surpasses the performance standards set
832forth in the contract. Such incentives may be weighted
833proportionally to reflect the extent to which the provider has
834demonstrated that it has consistently met or exceeded the
835contractual requirements and the department's performance
836standards.
837     (2)(15)  Nothing contained in chapter 287 shall require
838competitive bids for health services involving examination,
839diagnosis, or treatment.
840     Section 3.  Paragraphs (a), (b), (e), (f), and (g) of
841subsection (1), paragraph (b) of subsection (2), paragraph (a)
842of subsection (4), and subsections (6) and (9) of section
843409.1671, Florida Statutes, are amended to read:
844     409.1671  Foster care and related services; outsourcing
845privatization.--
846     (1)(a)  It is the intent of the Legislature that the
847Department of Children and Family Services shall outsource
848privatize the provision of foster care and related services
849statewide. It is further the Legislature's intent to encourage
850communities and other stakeholders in the well-being of children
851to participate in assuring that children are safe and well-
852nurtured. However, while recognizing that some local governments
853are presently funding portions of certain foster care and
854related services programs and may choose to expand such funding
855in the future, the Legislature does not intend by its
856outsourcing privatization of foster care and related services
857that any county, municipality, or special district be required
858to assist in funding programs that previously have been funded
859by the state. Counties that provide children and family services
860with at least 40 licensed residential group care beds by July 1,
8612003, and provide at least $2 million annually in county general
862revenue funds to supplement foster and family care services
863shall continue to contract directly with the state and shall be
864exempt from the provisions of this section. Nothing in this
865paragraph prohibits any county, municipality, or special
866district from future voluntary funding participation in foster
867care and related services. As used in this section, the term
868"outsource" "privatize" means to contract with competent,
869community-based agencies. The department shall submit a plan to
870accomplish outsourcing privatization statewide, through a
871competitive process, phased in over a 3-year period beginning
872January 1, 2000. This plan must be developed with local
873community participation, including, but not limited to, input
874from community-based providers that are currently under contract
875with the department to furnish community-based foster care and
876related services, and must include a methodology for determining
877and transferring all available funds, including federal funds
878that the provider is eligible for and agrees to earn and that
879portion of general revenue funds which is currently associated
880with the services that are being furnished under contract. The
881methodology must provide for the transfer of funds appropriated
882and budgeted for all services and programs that have been
883incorporated into the project, including all management, capital
884(including current furniture and equipment), and administrative
885funds to accomplish the transfer of these programs. This
886methodology must address expected workload and at least the 3
887previous years' experience in expenses and workload. With
888respect to any district or portion of a district in which
889outsourcing privatization cannot be accomplished within the 3-
890year timeframe, the department must clearly state in its plan
891the reasons the timeframe cannot be met and the efforts that
892should be made to remediate the obstacles, which may include
893alternatives to total outsourcing privatization, such as public-
894private partnerships. As used in this section, the term "related
895services" includes, but is not limited to, family preservation,
896independent living, emergency shelter, residential group care,
897foster care, therapeutic foster care, intensive residential
898treatment, foster care supervision, case management,
899postplacement supervision, permanent foster care, and family
900reunification. Unless otherwise provided for, the state attorney
901shall provide child welfare legal services, pursuant to chapter
90239 and other relevant provisions, in Pinellas and Pasco
903Counties. When a private nonprofit agency has received case
904management responsibilities, transferred from the state under
905this section, for a child who is sheltered or found to be
906dependent and who is assigned to the care of the outsourcing
907privatization project, the agency may act as the child's
908guardian for the purpose of registering the child in school if a
909parent or guardian of the child is unavailable and his or her
910whereabouts cannot reasonably be ascertained. The private
911nonprofit agency may also seek emergency medical attention for
912such a child, but only if a parent or guardian of the child is
913unavailable, his or her whereabouts cannot reasonably be
914ascertained, and a court order for such emergency medical
915services cannot be obtained because of the severity of the
916emergency or because it is after normal working hours. However,
917the provider may not consent to sterilization, abortion, or
918termination of life support. If a child's parents' rights have
919been terminated, the nonprofit agency shall act as guardian of
920the child in all circumstances.
921     (b)  It is the intent of the Legislature that the
922department will continue to work towards full outsourcing
923privatization in a manner that assures the viability of the
924community-based system of care and best provides for the safety
925of children in the child protection system. To this end, the
926department is directed to continue the process of outsourcing
927privatizing services in those counties in which signed startup
928contracts have been executed. The department may also continue
929to enter into startup contracts with additional counties.
930However, no services shall be transferred to a community-based
931care lead agency until the department, in consultation with the
932local community alliance, has determined and certified in
933writing to the Governor and the Legislature that the district is
934prepared to transition the provision of services to the lead
935agency and that the lead agency is ready to deliver and be
936accountable for such service provision. In making this
937determination, the department shall conduct a readiness
938assessment of the district and the lead agency.
939     1.  The assessment shall evaluate the operational readiness
940of the district and the lead agency based on:
941     a.  A set of uniform criteria, developed in consultation
942with currently operating community-based care lead agencies and
943reflecting national accreditation standards, that evaluate
944programmatic, financial, technical assistance, training and
945organizational competencies; and
946     b.  Local criteria reflective of the local community-based
947care design and the community alliance priorities.
948     2.  The readiness assessment shall be conducted by a joint
949team of district and lead agency staff with direct experience
950with the start up and operation of a community-based care
951service program and representatives from the appropriate
952community alliance. Within resources available for this purpose,
953the department may secure outside audit expertise when necessary
954to assist a readiness assessment team.
955     3.  Upon completion of a readiness assessment, the
956assessment team shall conduct an exit conference with the
957district and lead agency staff responsible for the transition.
958     4.  Within 30 days following the exit conference with staff
959of each district and lead agency, the secretary shall certify in
960writing to the Governor and the Legislature that both the
961district and the lead agency are prepared to begin the
962transition of service provision based on the results of the
963readiness assessment and the exit conference. The document of
964certification must include specific evidence of readiness on
965each element of the readiness instrument utilized by the
966assessment team as well as a description of each element of
967readiness needing improvement and strategies being implemented
968to address each one.
969     (e)  As used in this section, the term "eligible lead
970community-based provider" means a single agency with which the
971department shall contract for the provision of child protective
972services in a community that is no smaller than a county. The
973secretary of the department may authorize more than one eligible
974lead community-based provider within a single county when to do
975so will result in more effective delivery of foster care and
976related services. To compete for an outsourcing a privatization
977project, such agency must have:
978     1.  The ability to coordinate, integrate, and manage all
979child protective services in the designated community in
980cooperation with child protective investigations.
981     2.  The ability to ensure continuity of care from entry to
982exit for all children referred from the protective investigation
983and court systems.
984     3.  The ability to provide directly, or contract for
985through a local network of providers, all necessary child
986protective services. Such agencies should directly provide no
987more than 35 percent of all child protective services provided.
988     4.  The willingness to accept accountability for meeting
989the outcomes and performance standards related to child
990protective services established by the Legislature and the
991Federal Government.
992     5.  The capability and the willingness to serve all
993children referred to it from the protective investigation and
994court systems, regardless of the level of funding allocated to
995the community by the state, provided all related funding is
996transferred.
997     6.  The willingness to ensure that each individual who
998provides child protective services completes the training
999required of child protective service workers by the Department
1000of Children and Family Services.
1001     7.  The ability to maintain eligibility to receive all
1002federal child welfare funds, including Title IV-E and IV-A
1003funds, currently being used by the Department of Children and
1004Family Services.
1005     8.  Written agreements with Healthy Families Florida lead
1006entities in their community, pursuant to s. 409.153, to promote
1007cooperative planning for the provision of prevention and
1008intervention services.
1009     9.  A board of directors, of which at least 51 percent of
1010the membership is comprised of persons residing in this state.
1011Of the state residents, at least 51 percent must also reside
1012within the service area of the lead community-based provider.
1013     (f)1.  The Legislature finds that the state has
1014traditionally provided foster care services to children who have
1015been the responsibility of the state. As such, foster children
1016have not had the right to recover for injuries beyond the
1017limitations specified in s. 768.28. The Legislature has
1018determined that foster care and related services need to be
1019outsourced privatized pursuant to this section and that the
1020provision of such services is of paramount importance to the
1021state. The purpose for such outsourcing privatization is to
1022increase the level of safety, security, and stability of
1023children who are or become the responsibility of the state. One
1024of the components necessary to secure a safe and stable
1025environment for such children is that private providers maintain
1026liability insurance. As such, insurance needs to be available
1027and remain available to nongovernmental foster care and related
1028services providers without the resources of such providers being
1029significantly reduced by the cost of maintaining such insurance.
1030     2.  The Legislature further finds that, by requiring the
1031following minimum levels of insurance, children in outsourced
1032privatized foster care and related services will gain increased
1033protection and rights of recovery in the event of injury than
1034provided for in s. 768.28.
1035     (g)  In any county in which a service contract has not been
1036executed by December 31, 2004, the department shall ensure
1037access to a model comprehensive residential services program as
1038described in s. 409.1677 which, without imposing undue
1039financial, geographic, or other barriers, ensures reasonable and
1040appropriate participation by the family in the child's program.
1041     1.  In order to ensure that the program is operational by
1042December 31, 2004, the department must, by December 31, 2003,
1043begin the process of establishing access to a program in any
1044county in which the department has not either entered into a
1045transition contract or approved a community plan, as described
1046in paragraph (d), which ensures full outsourcing privatization
1047by the statutory deadline.
1048     2.  The program must be procured through a competitive
1049process.
1050     3.  The Legislature does not intend for the provisions of
1051this paragraph to substitute for the requirement that full
1052conversion to community-based care be accomplished.
1053     (2)
1054     (b)  Persons employed by the department in the provision of
1055foster care and related services whose positions are being
1056outsourced under privatized pursuant to this statute shall be
1057given hiring preference by the provider, if provider
1058qualifications are met.
1059     (4)(a)  The department, in consultation with the community-
1060based agencies that are undertaking the outsourced privatized
1061projects, shall establish a quality assurance program for
1062privatized services. The quality assurance program shall be
1063based on standards established by the Adoption and Safe Families
1064Act as well as by a national accrediting organization such as
1065the Council on Accreditation of Services for Families and
1066Children, Inc. (COA) or CARF--the Rehabilitation Accreditation
1067Commission. Each program operated under contract with a
1068community-based agency must be evaluated annually by the
1069department. The department shall, to the extent possible, use
1070independent financial audits provided by the community-based
1071care agency to eliminate or reduce the ongoing contract and
1072administrative reviews conducted by the department. The
1073department may suggest additional items to be included in such
1074independent financial audits to meet the department's needs.
1075Should the department determine that such independent financial
1076audits are inadequate, then other audits, as necessary, may be
1077conducted by the department. Nothing herein shall abrogate the
1078requirements of s. 215.97. The department shall submit an annual
1079report regarding quality performance, outcome measure
1080attainment, and cost efficiency to the President of the Senate,
1081the Speaker of the House of Representatives, the minority leader
1082of each house of the Legislature, and the Governor no later than
1083January 31 of each year for each project in operation during the
1084preceding fiscal year.
1085     (6)  Beginning January 1, 1999, and continuing at least
1086through June 30, 2000, the Department of Children and Family
1087Services shall outsource privatize all foster care and related
1088services in district 5 while continuing to contract with the
1089current model programs in districts 1, 4, and 13, and in
1090subdistrict 8A, and shall expand the subdistrict 8A pilot
1091program to incorporate Manatee County. Planning for the district
10925 outsourcing privatization shall be done by providers that are
1093currently under contract with the department for foster care and
1094related services and shall be done in consultation with the
1095department.  A lead provider of the district 5 program shall be
1096competitively selected, must demonstrate the ability to provide
1097necessary comprehensive services through a local network of
1098providers, and must meet criteria established in this section.
1099Contracts with organizations responsible for the model programs
1100must include the management and administration of all outsourced
1101privatized services specified in subsection (1). However, the
1102department may use funds for contract management only after
1103obtaining written approval from the Executive Office of the
1104Governor. The request for such approval must include, but is not
1105limited to, a statement of the proposed amount of such funds and
1106a description of the manner in which such funds will be used. If
1107the community-based organization selected for a model program
1108under this subsection is not a Medicaid provider, the
1109organization shall be issued a Medicaid provider number pursuant
1110to s. 409.907 for the provision of services currently authorized
1111under the state Medicaid plan to those children encompassed in
1112this model and in a manner not to exceed the current level of
1113state expenditure.
1114     (9)  Each district and subdistrict that participates in the
1115model program effort or any future outsourcing privatization
1116effort as described in this section must thoroughly analyze and
1117report the complete direct and indirect costs of delivering
1118these services through the department and the full cost of
1119outsourcing privatization, including the cost of monitoring and
1120evaluating the contracted services.
1121     Section 4.  The Office of Program Policy Analysis and
1122Government Accountability shall conduct two reviews of the
1123contract-management and accountability structures of the
1124Department of Children and Family Services, including, but not
1125limited to, whether the department is adequately monitoring and
1126managing its outsourced or privatized functions and services.
1127The office shall report its findings and recommendations to the
1128President of the Senate, the Speaker of the House of
1129Representatives, and the Auditor General by February 1 of 2006
1130and 2007, respectively.
1131     Section 5.  Section 402.72, Florida Statutes, is repealed.
1132     Section 6.  For fiscal year 2005-2006, there is hereby
1133appropriated the sum of $102,232 in nonrecurring General Revenue
1134funds to the Department of Children and Family Services to
1135enable the department to comply with the electronic reporting
1136requirements of section 1 of this act.
1137     Section 7.  This act shall take effect July 1, 2005.


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