_h1835c2
HB 1835CS

CHAMBER ACTION




1The State Administration Council recommends the following:
2
3     Council/Committee Substitute
4     Remove the entire bill and insert:
5
6
A bill to be entitled
7An act relating to procurement of contractual services by
8an agency; amending s. 20.22, F.S.; placing the Center for
9Efficient Government in the Department of Management
10Services; creating s. 287.0571, F.S.; providing a popular
11name; providing legislative intent; providing that
12procurements of specified commodities and services are not
13subject to the act; providing specified applicability;
14creating s. 287.0573, F.S.; providing definitions;
15creating s. 287.0574, F.S.; providing criteria for the
16procurement of contractual services by an agency; creating
17s. 287.0575, F.S.; creating the Commission on Efficient
18Government within the Department of Management Services;
19providing for purpose, membership, and organization of the
20commission; providing duties and responsibilities of the
21commission; creating the Center for Efficient Government;
22providing purpose and organization of the center;
23providing duties and responsibilities of the center;
24requiring the center to recommend and implement a
25centralized gate process for reviewing, evaluating, and
26approving agency projects; requiring state agencies to
27submit specified information, documents, and other
28materials required under commission rules; creating s.
29287.0576, F.S.; specifying procurements which must be
30reviewed and evaluated under the centralized gate process;
31providing minimum requirements for the centralized gate
32process; providing for specified determinations by the
33commission at each gate; providing procedure with respect
34to an unfavorable finding by the commission with respect
35to a procurement required by law; providing that agencies
36under the individual control of the Attorney General,
37Chief Financial Officer, or Commissioner of Agriculture
38are subject to the act, with specified exceptions;
39providing authority of the agency head with respect to
40procurements by such agencies; establishing the gates
41within the centralized gate process; requiring agencies to
42submit specified documents for commission review at each
43gate; providing for nullification of executed contracts
44for procurement under specified circumstances; requiring
45the commission to take action at each gate within a
46specified time period; providing procedure if the
47commission does not take action within such time period;
48requiring the submission of annual project status reports;
49creating s. 287.0577, F.S.; providing requirements for
50procurement of certain contractual services; requiring an
51agency to develop a business case which describes and
52analyzes a contractual services procurement under
53consideration; providing that the business case is not
54subject to challenge or protest under the Administrative
55Procedure Act; providing required components of a business
56case; defining "cost" and "savings"; providing
57requirements with respect to the solicitation for a
58contractual services procurement; providing contract
59requirements for a contractual services procurement;
60providing requirements with respect to contract
61amendments; providing that specified contract amendments
62must be submitted to the Executive Office of the Governor
63for approval; prohibiting the division of a contract
64amendment to avoid specified requirements; requiring
65documentation of contractor performance prior to renewal
66or extension of a contract; creating s. 287.0578, F.S.;
67providing for conditional supersession of the act;
68amending s. 287.057, F.S.; providing a requirement with
69respect to the composition of persons chosen to conduct
70negotiations during a specified competitive sealed reply
71procurement; creating s. 215.4211, F.S.; authorizing the
72Chief Financial Officer to review contracts for state
73agencies; creating s. 216.1817, F.S.; permitting budgetary
74changes for a contractual services procurement only under
75specified conditions; requiring the placement of full-time
76equivalent positions in reserve under certain conditions;
77providing for the reestablishment of full-time equivalent
78positions upon termination of a contract and reversion of
79functions and responsibilities to the agency; providing
80that only public officers or employees must perform
81certain functions; providing restrictions on contractor
82involvement in the procurement of contractual services;
83providing applicability; providing for future termination
84of the Center for Efficient Government and the Commission
85on Efficient Government; providing legislative intent with
86respect to the performance of review functions and
87assistance to agencies for procurements of contractual
88services by state agencies after a specified date;
89providing that positions authorized under the act shall
90remain with the Department of Management Services after a
91specified date; repealing s. 14.203, F.S., which creates
92the State Council on Competitive Government and provides
93duties and authority of the council; providing an
94appropriation; providing full-time equivalent positions;
95amending s. 119.0721, F.S.; removing a cross reference;
96clarifying the meaning of "commercial activity" to conform
97to the removal of the reference; providing an effective
98date.
99
100     WHEREAS, the private sector can often perform services with
101greater efficiency and effectiveness at a lower cost than the
102state, and
103     WHEREAS, the state has long been a leader in innovative
104practices, in part because of its partnerships with the private
105sector, and
106     WHEREAS, the state desires to reap the benefits of lower
107costs, high quality, and innovation by working closely with the
108private sector, and
109     WHEREAS, the state still maintains responsibility for
110ensuring that the services performed by the private sector on
111behalf of the state are of high quality, cost-effective, and
112appropriate functions for the private sector, and
113     WHEREAS, leading businesses have developed best practices
114to determine what to obtain from the market and how to ensure
115that such services are provided at the desired quality and at
116the appropriate cost, and
117     WHEREAS, the executive branch has made great progress in
118promoting the use of such best practices, and the citizens of
119the state could benefit by the increased adoption across state
120government of such best practices, NOW, THEREFORE,
121
122Be It Enacted by the Legislature of the State of Florida:
123
124     Section 1.  Paragraph (i) is added to subsection (2) of
125section 20.22, Florida Statutes, to read:
126     20.22  Department of Management Services.--There is created
127a Department of Management Services.
128     (2)  The following divisions and programs within the
129Department of Management Services are established:
130     (i)  Center for Efficient Government.
131     Section 2.  Section 287.0571, Florida Statutes, is created
132to read:
133     287.0571  Applicability of ss. 287.0571-287.0578.--
134     (1)  Sections 287.0571-287.0578 shall be known as the
135"Center for Efficient Government Act".
136     (2)  It is the intent of the Legislature that state
137agencies focus on their core missions and deliver services
138effectively and efficiently by leveraging resources and
139contracting with the private sector for services that can be
140more effectively provided by the private sector and that reduce
141the cost of government for all citizens of the state.
142     (3)  The provisions of this act shall not apply to:
143     (a)  Procurements of commodities and contractual services:
144     1.  Listed in s. 287.057(5)(e), (f), and (g) and (22).
145     2.  Subject to s. 287.055, F.S.
146     (b)  Contracts in support of the planning, development,
147implementation, operation, or maintenance of the road, bridge,
148and public transportation construction program of the Department
149of Transportation.
150     (4)  Only the provisions of ss 287.0571?287.0576 and
151section 13 of this act shall apply to procurements governed by
152the provisions of HB 1827 or SB 1476, 2005 Regular Session of
153the Legislature, or similar legislation, if adopted in the same
154legislative session or an extension thereof and enacted into
155law.
156     Section 3.  Section 287.0573, Florida Statutes, is created
157to read:
158     287.0573  Definitions.--For the purposes of this act:
159     (1)  "Center" means the Center for Efficient Government.
160     (2)  "Centralized gate process" means the system of review
161phases for a proposed procurement of contractual services, the
162conclusion of each phase being a "gate" or decision point at
163which the commission determines whether the procurement under
164consideration may proceed to the next phase.
165     (3)  "Commission" means the Commission on Efficient
166Government.
167     Section 4.  Section 287.0574, Florida Statutes, is created
168to read:
169     287.0574  Criteria for procurement of contractual
170services.--When compared to the cost and quality of service
171performed by state employees, an agency may procure a
172contractual service currently or previously provided by state
173employees only if, upon full implementation of a procurement,
174it:
175     (1)  Results in reasonable cost savings while maintaining
176at least the same quality of service;
177     (2)  Reasonably increases the quality of service while not
178exceeding the same level of cost; or
179     (3)  Minimally increases the cost while significantly
180increasing the quality by introducing specific new service
181elements that address quantifiable needs of the state or by
182substantially improving performance of existing service elements
183over current performance by the state or contractor.  Only
184projects with an annual cost below $10 million in each fiscal
185year may meet this criterion.  This subsection shall expire on
186July 1, 2006.
187     Section 5.  Section 287.0575, Florida Statutes, is created
188to read:
189     287.0575  Commission on Efficient Government; membership;
190duties; Center for Efficient Government; duties.--
191     (1)  The Commission on Efficient Government is created
192within the Department of Management Services to oversee the
193Center for Efficient Government and carry out the
194responsibilities specified in this section.
195     (a)  The commission shall consist of seven members
196appointed by the Governor:
197     1.  Four members shall be heads of executive branch
198agencies appointed by the Governor.
199     2.  Three members shall be from the private sector and,
200collectively, shall have experience with procurement,
201successfully increasing operational efficiency, and implementing
202complex projects in the private sector business environment. No
203private sector member of the commission may at any time during
204his or her appointment to the commission be registered to lobby
205the executive or legislative branch.
206     (b)  By August 1, 2005, the Governor shall appoint two
207private sector members and two agency heads for terms of 3 years
208and one private sector member and two agency heads for terms of
2094 years. Thereafter, each member shall serve for a term of 4
210years. The private sector members shall serve without
211compensation but shall be entitled to reimbursement for per diem
212and travel expenses pursuant to s. 112.061.
213     (c)  No member of the commission shall participate in
214commission review of a procurement when his or her agency is
215involved in the procurement or, in the case of a private sector
216member, he or she has a business relationship with an entity
217that is involved or reasonably could potentially be involved in
218the procurement.
219     (d)  The members of the commission may not delegate their
220membership to a designee.
221     (e)  A quorum shall consist of at least four members,
222including at least two private-sector members. At least one
223private-sector member must vote on the prevailing side for
224commission action to take effect.
225     (f)  Any vacancy on the commission shall be filled in the
226same manner as the original appointment, and any member
227appointed to fill a vacancy occurring for a reason other than
228the expiration of a term shall serve only for the unexpired term
229of the member's predecessor.
230     (g)  At the first meeting of the commission after August 1,
2312005, the members of the commission shall elect, by majority
232vote of those in attendance, a member to serve as chair of the
233commission. No later than September 1 of each succeeding year,
234the commission shall elect a new chair.
235     (h)  The commission shall:
236     1.  Oversee the Center for Efficient Government.
237     2.  Adopt the centralized gate process.
238     3.  Review, evaluate, grant approval of, withhold approval
239of, or deny approval of a proposed procurement at each gate
240established within the centralized gate process. The commission
241shall adopt rules regarding the procurements that must pass
242through the centralized gate process. Such procurements shall
243include, at a minimum, those subject to the requirements of s.
244287.0576(1).
245     4.  Approve templates and guidelines and adopt rules
246prescribing standards and procedures for use by agencies during
247the procurement process which shall, at a minimum, include the
248requirements under ss. 287.0576-287.0577 for procurements of
249contractual services.
250     5.  Implement a plan for providing information and
251documentation to the Legislature and the Governor on behalf of
252agencies and in compliance with the provisions of this chapter.
253The plan shall include, at a minimum, providing copies of
254documents to be reviewed by the commission to the President of
255the Senate, the Speaker of the House of Representatives, the
256Governor, and the chairs of the relevant appropriations and
257substantive legislative committees at least 14 days prior to the
258meeting of the commission at which the proposed procurement will
259be discussed.
260     6.  Review the performance of procurements which have
261advanced through the full centralized gate process.
262     (2)  The Center for Efficient Government is created in the
263department to establish and promote best business practices so
264that the delivery of services to citizens of the state are
265provided in the most effective and cost-efficient manner
266possible. The secretary of the department shall appoint a
267director of the center. The duties and responsibilities of the
268center are:
269     (a)  Recommending and implementing a centralized gate
270process for reviewing, evaluating, and approving agency
271procurements which, at a minimum, shall include the requirements
272contained in s. 287.0576(1) and (2) for contractual services
273procurements.
274     (b)  Providing support and assistance to the commission,
275including, but not limited to, reviewing and validating agency
276business cases, recommending standards, processes, templates,
277and guidelines for use by agencies during the procurement
278process and providing information and documentation as requested
279or required by law.
280     (c)  Assisting agencies directly in the procurement process
281as needed to ensure a high-quality procurement, including, but
282not limited to, developing and updating business cases, drafting
283solicitation and contract documents, participating in contract
284negotiations, identifying performance measures, and advising
285agencies on performance measurement, contract management, and
286change management. The center shall also provide information,
287training, and technical assistance to agencies on the use of the
288standards, processes, templates, and guidelines developed for
289use by agencies during the procurement process.
290     (d)  Collecting data and information from agencies on an
291ongoing basis with regard to the status and results of
292procurements that have advanced completely through the
293centralized gate process, recommending incorporation of any
294lessons learned from such projects into commission standards,
295procedures, templates, and guidelines, as appropriate, and
296identifying and disseminating to agencies information regarding
297best practices in procurement, particularly contractual services
298procurements.
299     (e)  Developing and implementing, in consultation with the
300Agency for Workforce Innovation, guidelines for assisting
301employees whose jobs are eliminated as a result of procurements.
302     (3)  The department shall employ an adequate number of
303highly skilled, credentialed staff who collectively possess
304significant expertise and experience as required to carry out
305the responsibilities of this act.
306     (4)  Agencies shall submit to the center all information,
307documents, or other materials required by commission rule or
308this chapter.
309     Section 6.  Section 287.0576, Florida Statutes, is created
310to read:
311     287.0576  Review and analysis of proposed procurement of
312contractual services; centralized gate process.--
313     (1)  At a minimum, procurements required to undergo review
314and analysis through the centralized gate process adopted by the
315commission are:
316     (a)  Contractual services procurements that have an
317estimated total cost of $10 million or more in any fiscal year.
318     (b)  New contractual services procurements that will
319require adjustments to the agency's budget in accordance with
320chapter 216. Amendments to existing contracts are excluded.
321     (c)  Contractual services procurements that do not involve
322an outlay of state funds estimated to total $10 million or more
323in any fiscal year because of the provision of services by the
324contractor at a rate significantly below market rate, the
325significant investment of other resources by the agency, or
326other reason, but in which the total value of the services
327performed by the agency and contractor under the contract is
328estimated to total $10 million or more in any fiscal year.
329Examples of such procurements include, but are not limited to,
330free, no-cost, or codevelopment contracts.
331     (d)  Contractual services procurements for which the sum of
332gross revenues or shared savings to be generated for the state
333and contractor over the term of the contract plus the sum of any
334payments to the contractor by the agency over the term of the
335contract, if any, is estimated to total $10 million or more in
336any fiscal year.
337     (e)  Contractual services procurements that do not meet the
338criteria in paragraphs (a)-(d) that the Legislature has directed
339to be subject to the centralized gate process.
340     (2)  Extensions and renewals of contracts resulting from
341procurements in subsection (1) and extensions and renewals of
342contracts meeting the criteria identified in paragraphs (1)(a),
343(c), and (d) which did not pass through the center and were in
344effect on the effective date of this act shall undergo review
345and analysis through the centralized gate process implemented by
346the center, through, notwithstanding any law to the contrary,
347such contracts shall pass only through such gates as the
348commission determines are appropriate based on the legislative
349intent of this act.
350
351For purposes of determining whether a procurement meets the
352requirements of this section, multiple contractual services
353procurements for substantially similar or related functions or
354responsibilities occurring in a coordinated fashion or in close
355time proximity to one another are considered a single
356contractual services procurement for purposes of meeting the
357thresholds set forth in this section.
358     (3)  The centralized gate process shall require, at a
359minimum, review of the procurement by the commission at each
360gate. At each gate, the commission shall determine by majority
361vote to:
362     (a)  Approve the procurement, if the agency has
363sufficiently met the requirements of the current gate, and
364advance the procurement to the next phase;
365     (b)  Withhold approval of the procurement, if additional
366work must be completed in order to satisfy the requirements of
367the current gate, and retain the procurement in that phase; or
368     (c)  Deny the procurement, if the procurement is not a good
369business decision, and remove the procurement from
370consideration.
371
372Notwithstanding the provisions of this section, the commission
373may not deny procurements which are required by law. If the
374commission determines that a procurement required by law is not
375a good business decision, the commission shall withhold approval
376and transmit to the President of the Senate, the Speaker of the
377House of Representatives, and the Governor the reasons why the
378procurement should not be completed and any recommendation for
379legislative action. If the President of the Senate or the
380Speaker of the House of Representatives has not responded within
38114 business days of receipt of the communication, the commission
382shall proceed at its discretion.
383
384Notwithstanding any law to the contrary, agencies under the
385individual control of the Attorney General, the Chief Financial
386Officer, or the Commissioner of Agriculture are subject to the
387provisions of this act, except that the commission shall not
388grant, withhold, or deny approval of a procurement by such
389agency but instead may only provide recommendations to the
390agency. The respective agency head shall have sole authority to
391grant, withhold, or deny approval of such procurement.
392     (4)  The gates and required documentation comprising the
393centralized gate process shall, at a minimum, consist of:
394     (a)  The proposal identification gate, which shall include
395the business case.
396     (b)  The procurement preparation gate, which shall include
397the updated business case and the solicitation documents prior
398to the issuance of such documents. An agency may not release
399solicitation documents without the commission's approval at this
400gate. The commission must review and approve the written
401determination of the agency required pursuant to s.
402287.057(3)(a) before granting approval for the use of an
403invitation to negotiate, or withhold approval pending submission
404by the agency of an acceptable alternative solicitation method.
405     (c)  The contract development gate, which shall include the
406final business case and the proposed unexecuted contract. An
407agency may not execute the contract without the commission's
408approval at this gate.
409     (d)  The transition management gate, which shall include
410updates to the final business case and, for a procurement of
411contractual services, an analysis of the agency's and
412contractor's readiness for the contractor to perform the
413proposed responsibility or function. An agency may not
414transition to contractor performance without the commission's
415approval at this gate.
416     (e)  The post-implementation gate, which shall include
417updates to the final business case and a report on the adequacy
418of contractor performance.
419     (5)(a)  Any executed contract for a procurement passing
420through the centralized gate process pursuant to this section
421shall be null and void if an agency fails to comply with the
422commission decision at the proposal identification, procurement
423preparation, or contract development gate.
424     (b)  Failure to comply with any other requirements of this
425act or implementing rules shall not affect the validity of the
426competitive solicitation and award process or any contract.
427     (6)  The commission shall take action at each gate within
42860 days of the submission of a procurement by an agency.  If the
429commission does not take action within this timeframe, the
430agency head shall determine whether to grant, withhold, or deny
431approval of the procurement at that gate based on the rules and
432guidelines of the commission for that gate and shall notify the
433Governor, the President of the Senate, the Speaker of the House
434of Representatives, and the commission of such action and the
435circumstances thereof.
436     (7)  During the term of the contract, the agency shall
437annually submit with its legislative budget request a project
438status report for each procurement that has passed through at
439least the first three gates of the centralized gate process
440describing the progress made to date, actual completion dates in
441comparison to planned completion dates, actual costs incurred in
442comparison to projected costs incurred, current issues requiring
443resolution, planned project milestones, deliverables, and
444expenditures for the next reporting period, and any other
445information relating to the contractual services that may be
446requested.
447     Section 7.  Section 287.0577, Florida Statutes, is created
448to read:
449     287.0577  Requirements for procurement of certain
450contractual services.--In addition to the other applicable
451requirements of this chapter, an agency shall comply with the
452following requirements for, at a minimum, procurements of
453contractual services estimated to total $1 million or more in
454any fiscal year and those subject to review under s.
455287.0576(1)(b), (c), (d), and (e) and (2):
456     (1)  BUSINESS CASE.--The agency shall develop a business
457case which describes and analyzes the procurement. The business
458case is not subject to challenge or protest pursuant to chapter
459120. The business case shall include, but not be limited to, the
460information in paragraphs (a)-(l). For procurements subject to
461commission review, the business case shall be in such detail as
462is appropriate given the current phase of the procurement but
463shall contain sufficient information to enable the commission to
464determine at that gate whether the procurement may proceed to
465the next procurement phase:
466     (a)1.  A detailed description of the function or
467responsibility for which the procurement is proposed;
468     2.  If the agency is currently performing the function or
469responsibility, a description and analysis of the agency's
470current performance, including, but not limited to, baseline
471costs and performance metrics;
472     3.  The goals desired to be achieved through the
473procurement and the rationale for such goals; and
474     4.  A citation of the existing or proposed legal authority
475for contracting for the function or responsibility.
476     (b)1.  A description of available options for achieving the
477goals. If state employees are currently performing the function
478or responsibility, at least one option involving maintaining
479state provision of the function or responsibility shall be
480included.
481     2.  A description of the current market for the contractual
482services which are under consideration for procurement.
483     3.  An analysis of the advantages and disadvantages of each
484option, including, at a minimum, potential performance
485improvements and risks.
486     (c)  A cost-benefit analysis documenting the direct and
487indirect specific baseline costs, savings, and qualitative and
488quantitative benefits involved in or resulting from the
489implementation of the recommended option or options. Such
490analysis shall specify the schedule that, at a minimum, must be
491adhered to in order to achieve the estimated savings. All
492elements of cost shall be clearly identified in the cost-benefit
493analysis, described in the business case, and supported by
494applicable records and reports. The agency head shall attest
495that, based on the data and information underlying the business
496case, to the best of his or her knowledge, all projected costs,
497savings, and benefits are valid and achievable. "Cost" means the
498reasonable, relevant, and verifiable cost which may include, but
499not be limited to, elements such as personnel costs, materials
500and supplies, services, equipment, capital depreciation costs,
501rent, maintenance and repairs, utilities, insurance, personnel
502travel, overhead, and interim and final payments. The
503appropriate elements shall depend on the nature of the specific
504initiative. "Savings" means the difference between the direct
505and indirect actual annual baseline costs compared to the
506projected annual cost for the contracted functions or
507responsibilities in any succeeding state fiscal year during the
508term of the contract.
509     (d)  A description of variance among agency policies and
510processes and, as appropriate, a discussion of options for or a
511plan to standardize, consolidate, or revise current policies and
512processes, if any, to reduce the customization of any proposed
513solution that would otherwise be required.
514     (e)  A description of the specific performance standards
515that must, at a minimum, be met to ensure adequate performance.
516     (f)  A statement of the potential impact on federal, state,
517and local revenues and expenditures. The statement shall
518specifically describe the effect on general revenue, trust
519funds, general revenue service charges, and interest on trust
520funds together with the potential direct or indirect effect on
521federal funding and cost allocations.
522     (g)  The projected timeframe for key events, from the
523beginning of the procurement process through the expiration of a
524contract.
525     (h)  A plan to ensure compliance with public records law
526which must include components that:
527     1.  Provide public access to public records at a cost that
528does not exceed that provided in chapter 119.
529     2.  Ensure the confidentiality of records that are exempt
530or confidential under law.
531     3.  Meet all legal requirements for record retention
532provided by law.
533     4.  Require transfer to the state, at no cost, of all
534public records in possession of the contractor upon termination
535of the contract.
536     (i)  A specific and feasible contingency plan addressing
537contractor nonperformance and a description of the tasks
538involved in and costs required for its implementation.
539     (j)  An agency transition plan for addressing changes in
540the number of agency personnel, affected business processes,
541employee transition issues, and communication with affected
542stakeholders, such as agency clients and the public. The
543transition plan shall contain a reemployment and retraining
544assistance plan for employees who are not retained by the agency
545or employed by the contractor.
546     (k)  A listing of any assets proposed for surplus or use by
547a contractor. For those assets proposed to be used by a
548contractor, the business case shall include a description of the
549proposed requirements for maintaining those assets by the
550contractor or the agency in accordance with chapter 273, a plan
551for the transitioning of the assets upon termination of the
552contract, and a description of how the planned use by a
553contractor is in the best interest of the agency and state.
554     (l)  A plan for ensuring access by persons with
555disabilities in compliance with applicable state and federal
556law.
557
558If a contractual services procurement meets the criteria for
559submission of feasibility study documentation as required by the
560legislative budget request instructions established pursuant to
561s. 216.023, the agency shall submit such documentation.
562     (2)  SOLICITATION REQUIREMENTS.--The solicitation for a
563contractual services procurement shall include, at a minimum:
564     (a)  A detailed description of the function or
565responsibility under consideration for contracting and, if the
566function or responsibility is currently being performed by an
567agency, a description and analysis of the agency's current
568performance.
569     (b)  Requirements that are achievable, unambiguous,
570measurable, meaningful, and complete.
571     (c)  The criteria that after contract execution will be
572used to assess contractor performance and the minimum acceptable
573contractor performance levels.
574     (3)  CONTRACT.--Each contract must include, but need not be
575limited to:
576     (a)  A detailed scope of work that clearly specifies each
577service or deliverable to be provided, including a description
578of each deliverable or activity that is quantifiable,
579measurable, and verifiable.
580     (b)  All service-level agreements describing all services
581to be provided under the terms of the agreement, the agency's
582service requirements and performance objectives, and specific
583responsibilities of the agency and the contractor.
584     (c)  Associated costs and savings, specific payment terms
585and payment schedule, including incentive and disincentive
586provisions, criteria governing payment, and a clear and specific
587implementation schedule that will be implemented in order to
588complete all required activities needed to transfer the service
589from the agency to the contractor and operate the service
590successfully.
591     (d)  Clear and specific identification of all required
592performance standards, which must include, at a minimum:
593     1.  Detailed measurable acceptance criteria for each
594deliverable and service to be provided to the agency under the
595terms of the contract which document the required performance
596level.
597     2.  A method for monitoring and reporting progress in
598achieving specified performance standards and levels.
599     3.  The sanctions or disincentives that shall be assessed
600for nonperformance by the contractor or agency.
601     (e)  A requirement that the contractor maintain adequate
602accounting records that comply with all applicable federal and
603state laws and generally accepted accounting principles.
604     (f)  A requirement authorizing state access to and audit of
605all records related to the contract or any responsibilities or
606functions under the contract for state audit and legislative
607oversight purposes and a requirement for service organization
608audits in accordance with professional auditing standards, if
609appropriate.
610     (g)  A requirement describing the timing and substance of
611all plans and status or progress reports that are to be
612provided. All plans and status or progress reports must comply
613with any relevant state and federal standards.
614     (h)  A requirement that the contractor comply with public
615records laws. The contractor must:
616     1.  Keep and maintain the public records that ordinarily
617and necessarily would be required by the state agency in order
618to perform the function or service.
619     2.  Provide the public with access to such public records
620on the same terms and conditions that the state agency would and
621at a cost that does not exceed that provided in chapter 119.
622     3.  Ensure the confidentiality of records that are exempt
623from public disclosure or made confidential under law.
624     4.  Meet all requirements for retaining records and
625transfer to the state, at no cost, all public records in
626possession of the contractor upon termination of the contract
627and destroy any duplicate public records which are exempt and
628confidential. All records stored electronically must be provided
629to the state in a format that is compatible with information
630technology systems of the state.
631     (i)  A requirement that any state funds provided for the
632purchase of or improvements to real property be made contingent
633upon the contractor granting to the state a security interest in
634the property which is at least equal to the amount of the state
635funds provided for the most recent years following the date of
636purchase or the completion of improvements, or as otherwise
637required by law. The contract must include a provision that, if
638the contractor disposes of the property before the agency's
639interest is vacated, the contractor will refund the
640proportionate share of the state's initial investment, as
641adjusted by depreciation.
642     (j)  If a contract involves the development or creation of
643intellectual property, the contract must specify the ownership
644of such intellectual property and any rights of the state to
645use, modify, reproduce, or disseminate the intellectual
646property.
647     (k)  A provision that the contractor annually submit and
648verify, pursuant to s. 92.525, all required financial
649statements.
650     (l)  A requirement that the contractor shall interview and
651consider for employment with the contractor each displaced state
652employee who is interested in such employment.
653     (m)  Provisions requiring that venue for any action
654regarding the contract shall be in Leon County and that the
655contract shall be interpreted according to the laws of this
656state.
657     (4)  AMENDMENTS.--An agency may not amend a contract
658without first submitting the proposed contract amendment to the
659Executive Office of the Governor for approval if the effect of
660the amendment would be to:
661     (a)  Increase the value of the contract by $1 million or
662more for those contracts with a total value of at least $1
663million but less than $10 million; or
664     (b)  Increase the value of the contract by 10 percent or
665more for those contracts with a total value of $10 million or
666more.
667
668An agency shall not divide a contract amendment so as to avoid
669the requirements of this section.
670     (5)  In addition to the requirements of subsections
671287.057(13) and (14), prior to the renewal or extension of a
672contract, an agency shall document whether all specific direct
673and indirect costs, savings, performance standards, and
674qualitative and quantitative benefits identified in the contract
675have been met by the contractor and the agency. If the actual
676performance of the contractor does not meet the required
677performance as identified in the contract, the agency shall
678explain the reasons why and provide justification for the
679extensions or renewal of the contract. This documentation shall
680be included in the official contract file.
681     Section 8.  Section 287.0578, Florida Statutes, is created
682to read:
683     287.0578  Subsequent inconsistent laws.--Subsequent
684inconsistent laws shall supersede this act only to the extent
685they do so by express reference to this section.
686     Section 9.  Paragraph (b) of subsection (17) of section
687287.057, Florida Statutes, is amended to read:
688     287.057  Procurement of commodities or contractual
689services.--
690     (17)  For a contract in excess of the threshold amount
691provided in s. 287.017 for CATEGORY FOUR, the agency head shall
692appoint:
693     (b)  At least three persons to conduct negotiations during
694a competitive sealed reply procurement who collectively have
695experience and knowledge in negotiating contracts, contract
696procurement, and the program areas and service requirements for
697which commodities or contractual services are sought. When the
698annual value of a contract is in excess of $1 million, at least
699one of the persons conducting negotiations must be certified as
700a contract negotiator based upon rules adopted by the Department
701of Management Services.
702     Section 10.  Section 215.4211, Florida Statutes, is created
703to read:
704     215.4211  Review of contracts for state agencies.--The
705Chief Financial Officer may request, as he or she deems
706necessary, the option to review and provide comments prior to
707the execution of any contract that is required to be in
708compliance with the provisions of s. 287.0577(3).
709     Section 11.  Section 216.1817, Florida Statutes, is created
710to read:
711     216.1817  Limitation on budgetary changes for contractual
712services procurement; placement of positions in reserve; re-
713establishment of positions.--Notwithstanding s. 216.351:
714     (1)  Any budgetary changes for a contractual services
715procurement that are inconsistent with the agency's approved
716budget may not be made to existing programs unless such changes
717are recommended to the Legislative Budget Commission by the
718Governor, and the Legislative Budget Commission expressly
719approves such program changes.
720     (2)  If a procurement of contractual services involves the
721performance of functions or responsibilities that are being
722shifted from state employees to a contractor, the agency shall
723identify within the business case prepared pursuant to s.
724287.0577 all resources which are affected, including full-time
725equivalent positions. All full-time equivalent positions
726identified in the business case shall be placed in reserve by
727the Executive Office of the Governor until the end of the second
728year of the contract.  However, in the business case, the agency
729may account for any savings from the full-time equivalent
730positions identified and held in reserve.  Notwithstanding the
731provisions of s. 216.262, the Executive Office of the Governor
732shall request authority from the Legislative Budget Commission
733to reestablish full-time equivalent positions above the number
734fixed by the Legislature if a contract is terminated and the
735performance of the functions or responsibilities must be
736returned to the agency.
737     Section 12.  Only a public officer or a public employee
738upon whom the public officer has delegated authority shall,
739consistent with law, take actions including, but not limited to:
740     (1)  Commissioning, appointing, or selecting state officers
741or employees;
742     (2)  Approving position descriptions, performance
743standards, or salary adjustments for state employees; and
744     (3)  Hiring, promoting, disciplining, demoting, and
745dismissing a state employee.
746     Section 13.  A contractor, as defined in chapter 287,
747Florida Statutes, or its employees, agents, or subcontractors,
748may not knowingly participate, through decision, approval,
749disapproval, preparation of any part of a purchase request,
750investigation, or auditing, in the procurement of contractual
751services by an agency from an entity in which the contractor, or
752its employees, agents, or subcontractors has a material
753interest.  This section shall not apply to pre-bid conferences
754or requests for information conducted pursuant to chapter 287,
755Florida Statutes.
756     Section 14.  The Center for Efficient Government and the
757Commission on Efficient Government shall terminate on July 1,
7582010, unless reenacted by the Legislature prior to that date. It
759is the intent of the Legislature that, beginning July 1, 2010,
760the various state agencies shall perform the review functions
761required under this act for procurements of contractual services
762under their jurisdiction. It is also the intent of the
763Legislature that beginning July 1, 2010, the positions
764authorized by this act shall remain with the Department of
765Management Services, which shall continue providing technical
766assistance as required in this act.
767     Section 15.  Section 287.0572, Florida Statutes, is
768renumbered as section 287.0579, Florida Statutes:
769     287.0579 287.0572  Present-value methodology.--
770     (1)  The cost of bids, proposals, or replies for state
771contracts that include provisions for unequal payment streams or
772unequal time payment periods shall be evaluated using present-
773value methodology. Each agency, as defined in s. 287.012(1),
774shall perform the evaluation using the present-value discount
775rate supplied by the department. The present-value discount rate
776shall be the rate for United States Treasury notes and bonds
777published in the Interest Rates: Money and Capital Markets
778section of the most recent copy of the Federal Reserve Bulletin
779published at the time of issuance of the request for proposals,
780the invitation to negotiate, or the invitation to bid.
781     (2)  The department may adopt rules to administer
782subsection (1).
783     Section 16.  Subsection (3) of section 119.0721, Florida
784Statutes, is amended to read:
785     119.0721  Social security number exemption.--
786     (3)  An agency shall not deny a commercial entity engaged
787in the performance of a commercial activity, which, for purposes
788of this subsection, means an activity that provides a product or
789service that is available from a private source as defined in s.
79014.203 or its agents, employees, or contractors access to social
791security numbers, provided the social security numbers will be
792used only in the normal course of business for legitimate
793business purposes, and provided the commercial entity makes a
794written request for social security numbers, verified as
795provided in s. 92.525, legibly signed by an authorized officer,
796employee, or agent of the commercial entity. The verified
797written request must contain the commercial entity's name,
798business mailing and location addresses, business telephone
799number, and a statement of the specific purposes for which it
800needs the social security numbers and how the social security
801numbers will be used in the normal course of business for
802legitimate business purposes. The aggregate of these requests
803shall serve as the basis for the agency report required in
804subsection (7). An agency may request any other information as
805may be reasonably necessary to verify the identity of the entity
806requesting the social security numbers and the specific purposes
807for which such numbers will be used; however, an agency has no
808duty to inquire beyond the information contained in the verified
809written request. A legitimate business purpose includes
810verification of the accuracy of personal information received by
811a commercial entity in the normal course of its business; use in
812a civil, criminal, or administrative proceeding; use for
813insurance purposes; use in law enforcement and investigation of
814crimes; use in identifying and preventing fraud; use in
815matching, verifying, or retrieving information; and use in
816research activities. A legitimate business purpose does not
817include the display or bulk sale of social security numbers to
818the general public or the distribution of such numbers to any
819customer that is not identifiable by the distributor.
820     Section 17.  Section 14.203, Florida Statutes, is repealed.
821     Section 18.  There is hereby appropriated $1,023,554
822recurring budget authority to the Department of Management
823Services from the General Revenue Fund, and nine full-time
824equivalent positions are authorized, to carry out the activities
825of the Center for Efficient Government and the Commission on
826Efficient Government as provided in this act.
827     Section 19.  This act shall take effect July 1, 2005.


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

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