August 11, 2020
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Senate Bill 1146

Senate Bill sb1146

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    Florida Senate - 2005                                  SB 1146

    By Senator Argenziano





    3-907A-05

  1                      A bill to be entitled

  2         An act relating to purchasing and procurement;

  3         amending s. 14.203, F.S.; redesignating the

  4         State Council on Competitive Government as the

  5         "Center for Efficient Government"; transferring

  6         the center from the Administration Commission

  7         to the Department of Management Services;

  8         revising the powers and duties of the center;

  9         requiring the center to adopt rules;

10         prescribing duties of the center before a state

11         function or service is outsourced or

12         privatized; requiring the center to perform a

13         business-case analysis; specifying the

14         requirements for the analysis; requiring that

15         the center submit the proposed business case to

16         the Legislature for approval under certain

17         circumstances; providing requirements for the

18         secretary or executive director of a state

19         agency that proposes to outsource or privatize

20         a function or service; prescribing contract

21         requirements; providing requirements for a

22         contract that exceeds $1 million in value;

23         requiring the Department of Management Services

24         to establish a program to train contract

25         negotiators; requiring that a state agency

26         submit certain contract amendments to the

27         Legislative Budget Commission for approval;

28         providing an effective date.

29  

30  Be It Enacted by the Legislature of the State of Florida:

31  

                                  1

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    Florida Senate - 2005                                  SB 1146
    3-907A-05




 1         Section 1.  Section 14.203, Florida Statutes, is

 2  amended to read:

 3         14.203  Center for Efficient State Council on

 4  Competitive Government.--It is the policy of this state that

 5  all state services be performed in the most effective and

 6  efficient manner in order to provide the best value to the

 7  residents citizens of the state. The state also recognizes

 8  that competition among service providers may improve the

 9  quality of services provided, and that competition,

10  innovation, and creativity among service providers should be

11  encouraged.

12         (1)  For the purposes of this section, the term:

13         (a)  "Commercial activity" means an activity that

14  provides a product or service that is available from a private

15  source.

16         (b)  "Identified state service" means a service

17  provided by the state which that is under consideration to

18  determine whether the service may be better provided through

19  competition with private sources.

20         (2)  There is hereby created the Center for Efficient

21  State Council on Competitive Government, which shall be a

22  function composed of the Department of Management Services

23  Governor and Cabinet, sitting as the Administration Commission

24  as defined in s. 14.202. The center council, on its own

25  initiative, or the Office of Program Policy Analysis and

26  Government Accountability, created pursuant to s. 11.51, may

27  identify commercial activities currently being performed by

28  state agencies and, if it is determined that such services may

29  be better provided by requiring competition with private

30  sources or other state agency service providers, may recommend

31  that a state agency engage in a competitive-selection process

                                  2

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    Florida Senate - 2005                                  SB 1146
    3-907A-05




 1  any process, including competitive bidding, that creates

 2  competition with private sources or other state agency service

 3  providers.

 4         (3)  In performing its duties under this section, the

 5  center council may:

 6         (a)  Adopt rules to administer implement any provision

 7  of this section.

 8         (b)  Hold public hearings or conduct studies.

 9         (c)  Consult with private sources.

10         (4)(a)  Before the outsourcing or privatization of a

11  function or service, the center shall comply with the

12  following requirements:

13         1.  The center shall develop a validated business case

14  describing and analyzing the function or service proposed for

15  outsourcing or privatization. A business case is part of the

16  solicitation process and is not a rule subject to challenge

17  pursuant to s. 120.54. The business case must include, but

18  need not be limited to:

19         a.  A detailed description of the functions or services

20  to be outsourced or privatized, a description and analysis of

21  the state agency's current performance of such function or

22  service, and a rationale documenting how outsourcing or

23  privatizing such function or service would be in the best

24  interest of the state, the agency, or its clients.

25         b.  A validated cost-benefit analysis describing the

26  estimated specific direct and indirect costs, savings,

27  performance improvements, risks, and qualitative and

28  quantitative benefits involved in or resulting from

29  outsourcing or privatizing the function or service. The

30  cost-benefit analysis must include a detailed plan and

31  timeline identifying all actions that must be implemented to

                                  3

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    Florida Senate - 2005                                  SB 1146
    3-907A-05




 1  realize expected benefits. The center shall certify that all

 2  costs, savings, and benefits are valid and achievable.

 3         c.  A statement of the potential effect on applicable

 4  federal, state, and local revenues and expenditures. The

 5  statement must specifically describe the effect on general

 6  revenue, trust funds, general revenue service charges, and

 7  interest on trust funds, together with the potential direct or

 8  indirect effect on federal funding and cost allocations.

 9         d.  A plan to ensure compliance with public-records

10  law, including a plan for:

11         (I)  Providing public access to public records at a

12  cost that does not exceed that provided in chapter 119.

13         (II)  Ensuring the confidentiality of records that are

14  exempt from public disclosure or made confidential by law.

15         (III)  Meeting all legal requirements for retaining

16  records.

17         (IV)  Transferring to the state, at no cost, all public

18  records in possession of the external service provider upon

19  termination of the contract.

20         e.  A transition and implementation plan for addressing

21  changes in organizational structure, affected business

22  processes, and employee-transition issues. Such a plan must

23  also specify the mechanism for continuing the operation of the

24  function or service if the external service provider fails to

25  perform and comply with the performance standards and

26  provisions of the contract.

27         f.  A listing of assets proposed for transfer to or use

28  by an external service provider, a description of the proposed

29  requirements for maintaining those assets by the external

30  service provider or the state agency in accordance with

31  chapter 273, a plan for disposing of the assets upon

                                  4

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    Florida Senate - 2005                                  SB 1146
    3-907A-05




 1  termination of the contract, and a description of how the

 2  planned asset transfer or use by an external service provider

 3  is in the best interest of the agency and state.

 4         2.  If the center proposes to outsource or privatize a

 5  function or service, whether initially or after the expiration

 6  of an existing contract to outsource or privatize, and the

 7  proposal meets one of the following criteria:

 8         a.  The value of the contract, as provided in s.

 9  287.017, over the proposed term of the contract is projected

10  to exceed the lesser of 5 percent of the state agency's total

11  budget or $10 million; or

12         b.  Reductions during the proposed term of the contract

13  are projected to exceed the lesser of 50 full-time equivalent

14  positions, 5 percent of the state agency's authorized

15  full-time equivalent positions, or 5 percent of the agency's

16  authorized salaries and benefits;

17  

18  the center must submit the proposed business case to the

19  Legislature for approval. The proposed business case must be

20  submitted at least 60 days before the first day of the regular

21  legislative session to the President of the Senate and the

22  Speaker of the House of Representatives. At the request of the

23  Legislature, the Office of Program Policy Analysis and

24  Government Accountability may review and validate the

25  information contained in the business case and provide comment

26  and recommendations to the Legislature. Upon approval by the

27  Legislature of the proposed business case, the center may

28  continue the solicitation process and initiate and complete

29  the procurement process under s. 287.057.

30         (b)1.  If any state agency proposes to outsource or

31  privatize a function or service, whether initially or after

                                  5

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    Florida Senate - 2005                                  SB 1146
    3-907A-05




 1  the expiration of an existing contract to outsource or

 2  privatize, and the proposal does not meet one of the criteria

 3  identified in sub-subparagraphs (a)1.a. and b., the secretary

 4  or executive director of the state agency shall approve the

 5  proposed business case, certifying that all costs, savings,

 6  and benefits are valid and achievable. If requested by the

 7  Legislature, copies of the approved business case shall be

 8  submitted to the chairs of the legislative appropriations and

 9  relevant substantive committees.

10         2.  If a proposed outsourcing or privatization

11  initiative would require integration with or would in any way

12  affect other information technology systems of the state, the

13  agency shall submit the feasibility study documentation as

14  required by the instructions for the legislative budget

15  request under s. 216.023.

16         (c)  Notwithstanding s. 287.057(5)(f), upon completion

17  of the procurement process as set forth in s. 287.057, the

18  state agency may enter into contracts with the external

19  service provider.

20         (d)  Any such contract must include detailed and

21  specific terms and conditions and performance standards that

22  provide a clearly defined scope and level of work that is

23  directly related to the goals and objectives of the

24  initiative. The terms must include, but need not be limited

25  to:

26         1.  A detailed scope of work that clearly specifies

27  each service or deliverable to be provided.

28         2.  All service-level agreements describing all

29  services to be provided under the terms of the agreement, the

30  state agency's service requirements and performance

31  

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    Florida Senate - 2005                                  SB 1146
    3-907A-05




 1  objectives, and specific responsibilities of the agency and

 2  the contractor.

 3         3.  Associated costs and savings, specific payment

 4  terms and payment schedule, including incentive and penalty

 5  provisions, criteria governing payment, and a clear and

 6  specific implementation schedule that will be implemented in

 7  order to complete all required activities needed to transfer

 8  the function or service from the state agency to the

 9  contractor and operate the function or service successfully.

10         4.  A description of deliverables, activities, or

11  events that are directly related to the scope of work which

12  are quantifiable, measurable, and verifiable.

13         5.  Clear and specific identification of all required

14  performance standards, which must, at a minimum, include:

15         a.  Detailed measurable acceptance criteria for each

16  deliverable and service to be provided to the state agency

17  under the terms of the contract which document the required

18  performance level.

19         b.  A method for monitoring and reporting progress in

20  achieving specified performance standards and levels.

21         c.  The sanctions or penalties that shall be assessed

22  for nonperformance by the contractor or state agency.

23         6.  A requirement that the contractor maintain adequate

24  accounting records that comply with all applicable federal and

25  state laws.

26         7.  A requirement authorizing the state agency to have

27  access to and conduct audits of all records related to the

28  contract and outsourced functions or services.

29         8.  A requirement that ownership of any intellectual

30  property that is critical for the assumption of the outsourced

31  function or service be transferred from the external service

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    Florida Senate - 2005                                  SB 1146
    3-907A-05




 1  provider to the state agency if the external service provider

 2  ceases to provide the outsourced function or service.

 3         9.  A requirement describing the timing and substance

 4  of all plans and status or progress reports that are to be

 5  provided. All plans and status or progress reports must comply

 6  with any relevant state and federal standards.

 7         10.  A requirement that the contractor comply with

 8  public-records laws. The contractor must:

 9         a.  Keep and maintain the public records that

10  ordinarily and necessarily would be required by the state

11  agency in order to perform the function or service.

12         b.  Provide the public with access to such public

13  records on the same terms and conditions that the state agency

14  would, and at a cost that does not exceed that provided in

15  chapter 119.

16         c.  Ensure the confidentiality of records that are

17  exempt from public disclosure or made confidential under law.

18         d.  Meet all requirements for retaining records and

19  transfer to the state, at no cost, all public records in

20  possession of the contractor upon termination of the contract.

21  All records stored electronically must be provided to the

22  state in a format compatible with information technology

23  systems of the state.

24         11.  A requirement that any state funds provided for

25  the purchase of or improvements to real property be made

26  contingent upon the contractor granting to the state a

27  security interest in the property which is at least equal to

28  the amount of the state funds provided for the most recent 5

29  years following the date of purchase or the completion of

30  improvements, or as otherwise required by law. The contract

31  must include a provision that, if the contractor disposes of

                                  8

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    Florida Senate - 2005                                  SB 1146
    3-907A-05




 1  the property before the state agency's interest is vacated,

 2  the contractor will refund the proportionate share of the

 3  state's initial investment, as adjusted by depreciation.

 4         12.  A provision that the contractor annually submit

 5  all required financial statements, which must comply with 18

 6  U.S.C. s. 1350.

 7         (e)  A contract may include cost-neutral,

 8  performance-based incentives that may vary according to the

 9  extent a contractor achieves or surpasses the performance

10  standards set forth in the contract. Such incentives may be

11  weighted proportionally to reflect the extent to which the

12  contractor has demonstrated that it has consistently met or

13  exceeded the contractual requirements and performance

14  standards.

15         (f)  When the value of a contract is in excess of $1

16  million, at least one of the persons conducting negotiations

17  must be certified as a contract negotiator based upon

18  standards identified by the National Institute of Governmental

19  Purchasing. The Department of Management Services shall

20  establish a program to train contracting personnel in best

21  practices for contract negotiation. The training program shall

22  be based on standards established by a national accrediting or

23  certification program, such as the National Institute of

24  Governmental Purchasing.

25         (g)  Notwithstanding s. 216.181, a state agency may not

26  amend a contract without first submitting the proposed

27  amendment to the Legislative Budget Commission for approval

28  if:

29         1.  The effect of the amendment would be to expand the

30  financial terms, conditions, or duration of the contract and

31  

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    Florida Senate - 2005                                  SB 1146
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 1  the total dollar amount to be paid is increased 10 percent or

 2  more;

 3         2.  The federal or state funding sources or

 4  requirements are changed; or

 5         3.  The contract performance date or the contract

 6  service ending date is extended by 1 year or longer.

 7  

 8  Upon approval of the contract amendment by the Legislative

 9  Budget Commission, the state agency may amend the contract as

10  approved by the Legislative Budget Commission.

11         (d)  Require a state agency to conduct an in-house cost

12  estimate, a management study, or any other hearing, study,

13  review, or cost estimate concerning any aspect of an

14  identified state service.

15         (e)  Develop and require for use by state agencies

16  methods to accurately and fairly estimate and account for the

17  cost of providing an identified state service.

18         (f)  Require that an identified state service be

19  submitted to competitive bidding or another process that

20  creates competition with private sources or other governmental

21  entities. In determining whether an identified state service

22  should be submitted to competitive bidding, the council shall

23  consider, at a minimum:

24         1.  Any constitutional and legal implications which may

25  arise as a result of such action.

26         2.  The cost of supervising the work of any private

27  contractor.

28         3.  The total cost to the state agency of such state

29  agency's performance of a service, including all indirect

30  costs related to that state agency and costs of such agencies

31  as the Chief Financial Officer, the Attorney General, and

                                  10

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    Florida Senate - 2005                                  SB 1146
    3-907A-05




 1  other such support agencies to the extent such costs would not

 2  be incurred if a contract is awarded. Costs for the current

 3  provision of the service shall be considered only when such

 4  costs would actually be saved if the contract were awarded to

 5  another entity.

 6         (g)  Prescribe, in consultation with affected state

 7  agencies, the specifications and conditions of purchase

 8  procedures that must be followed by a state agency or a

 9  private source engaged in competitive bidding to provide an

10  identified state service.

11         (h)  Award a contract to a state agency currently

12  providing the service, another state agency, a private source,

13  or any combination of such entities, if the bidder presents

14  the best and most reasonable bid, which is not necessarily the

15  lowest bid. It is intended that consideration be given as to

16  how to transfer the program back if the bidder is not

17  successful in carrying out the requirements of the contract.

18  The bid shall also include an analysis of health care

19  benefits, retirement, and workers' compensation insurance for

20  employees of the contractor which are reasonably comparable to

21  those provided by the state. 

22         (i)  Determine the terms and conditions of a contract

23  for service or interagency contract to provide an identified

24  state service or other commercial activity. Such terms and

25  conditions may include the requirement that a minimum level of

26  health insurance coverage for employees, including optional

27  family coverage, whether employer-paid or employee-paid, or a

28  combination thereof, is available to employees.

29         (j)  Require the state agency to encourage state

30  employees to organize and submit a bid for the identified

31  state service.

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    Florida Senate - 2005                                  SB 1146
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 1         (5)(4)  A state agency shall perform any activities

 2  required by the center council in the performance of its

 3  duties or the exercise of its powers under this section.

 4         (5)  Contracts entered into by the council to implement

 5  this section and any decision regarding whether a state agency

 6  shall engage in competitive bidding are exempt from state law

 7  regulating or limiting purchasing practices and decisions,

 8  including chapter 120.

 9         (6)  A contract entered into pursuant to this section

10  constitutes an executive branch recommendation only and shall

11  not take effect until a specific appropriation is provided by

12  law to fund such contract. In addition, any contract entered

13  into by a state agency pursuant to this section shall include

14  language that its effect is contingent upon a specific

15  appropriation by law.

16         Section 2.  This act shall take effect July 1, 2005.

17  

18            *****************************************

19                          SENATE SUMMARY

20    Renames the State Council on Competitive Government as
      the "Center for Efficient Government" and transfers it
21    from the Administration Commission to the Department of
      Management Services. Requires the center to perform a
22    business-case analysis before certain state functions or
      services are outsourced or privatized. Requires that the
23    center submit certain business-case analyses to the
      Legislature for approval. Requires that the secretary or
24    executive director of a state agency meet certain
      contract requirements before outsourcing or privatizing a
25    function or service. Requires the Department of
      Management Services to establish a program to train
26    contract negotiators. Requires that a state agency submit
      certain contract amendments to the Legislative Budget
27    Commission for approval. (See bill for details.)

28  

29  

30  

31  

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