August 11, 2020
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Senate Bill 1146

Senate Bill sb1146c1

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    Florida Senate - 2005                           CS for SB 1146

    By the Committee on Governmental Oversight and Productivity;
    and Senator Argenziano




    585-1753C-05

  1                      A bill to be entitled

  2         An act relating to purchasing and procurement;

  3         providing definitions; authorizing the

  4         Department of Management Services to establish

  5         the Center for Efficient Government; providing

  6         for the powers and duties of the center;

  7         prescribing duties of a state agency before a

  8         service may be outsourced; requiring agencies

  9         to do a business case analysis; specifying the

10         requirements for the analysis; requiring that

11         an agency submit the proposed business case

12         with the agency's legislative budget request;

13         prescribing the process for approval if the

14         outsourcing is not included in the agency's

15         approved operating budget; prohibiting an

16         agency from privatizing a service without

17         specific legislative authorization; prescribing

18         contract requirements for a contract that meets

19         or exceeds a specified threshold amount;

20         authorizing a contract to include certain

21         incentives; providing requirements for a

22         contract that exceeds $1 million in value;

23         providing a process for a state agency to

24         submit to the Executive Office of the Governor

25         certain contract amendments for approval;

26         requiring approval of the Administration

27         Commission under certain circumstances;

28         creating s. 215.4211, F.S.; authorizing the

29         Chief Financial Officer to review contracts for

30         state agencies; repealing s. 14.203, F.S.,

31         relating to the State Council on Competitive

                                  1

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    Florida Senate - 2005                           CS for SB 1146
    585-1753C-05




 1         Government; providing an appropriation;

 2         providing restrictions on contractor

 3         supervision of state employees; providing

 4         restrictions on contractor involvement in state

 5         procurement; providing an effective date.

 6  

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

 8  

 9         Section 1.  Center for Efficient Government;

10  outsourcing or privatization; contract management.--

11         (1)  As used in this section, the term:

12         (a)  "Agency" means the entities defined in section

13  287.012(1), Florida Statutes.

14         (b)  "Contractor" has the same meaning as in section

15  287.012(8), Florida Statutes.

16         (c)  "Outsourcing" means the process of contracting

17  with an external service provider to provide a service, in

18  whole or in part, while the agency retains the responsibility

19  and accountability for the service.

20         (d)  "Performance standards" means the quantifiable,

21  specified, and desired level to be achieved for a particular

22  service.

23         (e)  "Privatize" means any process aimed at

24  transferring the responsibility for a service, in whole or in

25  part, from the agency to the private sector such that the

26  private sector is solely and fully responsible for the

27  performance of the specific service.

28         (f)  "Service" means all or any portion of a program or

29  program component as defined in section 216.011, Florida

30  Statutes.

31  

                                  2

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    Florida Senate - 2005                           CS for SB 1146
    585-1753C-05




 1         (2)(a)  The Department of Management Services may

 2  establish the Center for Efficient Government, which shall

 3  promote best business practices in procurement and contracting

 4  in order to allow state agencies to focus on their core

 5  missions and to deliver services efficiently and

 6  cost-effectively and, when validated, contract for services

 7  that can be more effectively provided by the private sector.

 8         (b)  The center shall:

 9         1.  Assist agencies, when requested, in their

10  compliance with this section, which shall include, but need

11  not be limited to, developing and updating business cases and

12  solicitation documents, supporting contract negotiations,

13  contract drafting, change management, performance measurement,

14  and contract management.

15         2.  Develop standards, processes, templates, and

16  guidelines that comply with the appropriate provisions of this

17  section for use by agencies.

18         3.  Create and maintain a database of new and existing

19  state procurement initiatives, which must include, but need

20  not be limited to, those initiatives subject to this section.

21  At a minimum, the database must contain the following

22  information in regard to contractual services:

23         a.  The agency name, the name and description of the

24  contractual service procured, and the names of the prime

25  contractor and any subcontractors.

26         b.  The projected and actual completion dates by

27  project phase.

28         c.  A description of the performance standards

29  contained in the contract, projected performance, and actual

30  performance.

31  

                                  3

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    Florida Senate - 2005                           CS for SB 1146
    585-1753C-05




 1         d.  The projected costs and revenues, as applicable,

 2  and actual costs and revenues.

 3         (3)  If an agency proposes to outsource a service, the

 4  agency must comply with the requirements of paragraph (a)

 5  before beginning the procurement process provided for in

 6  section 287.057, Florida Statutes.

 7         (a)  The agency shall develop a business case

 8  describing and analyzing the function or service proposed for

 9  outsourcing. A business case is part of the solicitation

10  process and is not a rule subject to challenge under section

11  120.54, Florida Statutes. The business case must include, but

12  need not be limited to:

13         1.  A detailed description of the service to be

14  outsourced, a description and analysis of the agency's current

15  performance of the service, and a rationale documenting how

16  outsourcing the service would be in the best interest of the

17  state, the agency, or its clients.

18         2.  A cost-benefit analysis describing the estimated

19  specific direct and indirect costs, savings, performance

20  improvements, risks, and qualitative and quantitative benefits

21  involved in or resulting from outsourcing the service. The

22  cost-benefit analysis must include a detailed plan and

23  timeline identifying all actions that must be implemented to

24  realize expected benefits. Pursuant to section 92.525, Florida

25  Statutes, the agency head shall verify that all costs,

26  savings, and benefits are valid and achievable.

27         3.  A statement of the potential effect on applicable

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

29  statement must specifically describe the effect on general

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

31  

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    Florida Senate - 2005                           CS for SB 1146
    585-1753C-05




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

 2  indirect effect on federal funding and cost allocations.

 3         4.  A plan to ensure compliance with public-records

 4  law, including a plan for:

 5         a.  Providing public access to public records at a cost

 6  that does not exceed that provided in chapter 119, Florida

 7  Statutes.

 8         b.  Ensuring the confidentiality of records that are

 9  exempt from public disclosure or made confidential by law.

10         c.  Meeting all legal requirements for retaining

11  records.

12         d.  Transferring to the state, at no cost, all public

13  records in possession of the contractor upon termination of

14  the contract.

15         5.  A transition and implementation plan for addressing

16  changes in the number of agency personnel, affected business

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

18  also specify the mechanism for continuing the operation of the

19  service if the contractor fails to perform and comply with the

20  performance standards and provisions of the contract. Within

21  this plan, the agency shall identify all resources, including

22  full-time equivalent positions, which are subject to

23  outsourcing. All full-time equivalent positions identified in

24  the plan shall be placed in reserve by the Executive Office of

25  the Governor until the end of the second year of the contract.

26  Notwithstanding the provisions of section 216.262, Florida

27  Statutes, the Executive Office of the Governor shall request

28  authority from the Legislative Budget Commission to

29  reestablish full-time positions above the number fixed by the

30  Legislature when a contract is terminated and the outsourced

31  service must be returned to the agency.

                                  5

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    Florida Senate - 2005                           CS for SB 1146
    585-1753C-05




 1         6.  A listing of assets proposed for transfer to or use

 2  by a contractor, a description of the proposed requirements

 3  for maintaining those assets by the contractor or the agency

 4  in accordance with chapter 273, Florida Statutes, a plan for

 5  disposing of the assets upon termination of the contract, and

 6  a description of how the planned asset transfer or use by a

 7  contractor is in the best interest of the agency and state.

 8         (b)1.  If the agency proposes to outsource a service in

 9  the next fiscal year, the agency shall submit the business

10  case along with the agency's final legislative budget request,

11  in the manner and form prescribed in the legislative budget

12  request instructions pursuant to section 16.023, Florida

13  Statutes. Upon approval in the General Appropriations Act, the

14  agency may initiate and complete the procurement process

15  pursuant to section 287.057, Florida Statutes, and may enter

16  into contracts with the contractor.

17         2.  If a proposed outsourcing initiative would require

18  integration with or would in any way affect other information

19  technology systems of the state, the agency shall submit the

20  feasibility study documentation as required by the

21  instructions for the legislative budget request under section

22  216.023, Florida Statutes.

23         (c)  If the agency proposes to outsource a service

24  during a fiscal year and the outsourcing provision was not

25  included in the agency's approved operating budget, the agency

26  must provide to the Executive Office of the Governor, the

27  President of the Senate, the Speaker of the House of

28  Representatives, the chairs of the legislative appropriations

29  committees, and the chairs of the relevant substantive

30  committees the validated business case that complies with the

31  requirements of paragraph (a) at least 45 days before the

                                  6

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    Florida Senate - 2005                           CS for SB 1146
    585-1753C-05




 1  release of any solicitation documents, as provided in section

 2  287.057, Florida Statutes. Any budgetary changes that are

 3  inconsistent with the agency's approved budget may not be made

 4  to existing programs unless such changes are recommended to

 5  the Legislative Budget Commission by the Governor and the

 6  Legislative Budget Commission expressly approves such program

 7  changes.

 8         (d)  An agency may not privatize a service, as defined

 9  in subsection (1), without specific authority provided for in

10  general law, the General Appropriations Act, legislation

11  implementing the General Appropriations Act, or a special

12  appropriations act.

13         (4)(a)  In addition to the requirements of section

14  287.058, Florida Statutes, each contract for the procurement

15  of contractual services by an agency which meets or is in

16  excess of the threshold amount provided in section 287.017,

17  Florida Statutes, for CATEGORY FIVE, must include, but need

18  not be limited to:

19         1.  A detailed scope of work that clearly specifies

20  each service or deliverable to be provided, including a

21  description of each deliverable or activity that is

22  quantifiable, measurable, and verifiable.

23         2.  All service-level agreements describing all

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

25  agency's service requirements and performance objectives, and

26  specific responsibilities of the agency and the contractor.

27         3.  Associated costs and savings, specific payment

28  terms and payment schedule, including incentive and penalty

29  provisions, criteria governing payment, and a clear and

30  specific implementation schedule that will be implemented in

31  order to complete all required activities needed to transfer

                                  7

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    Florida Senate - 2005                           CS for SB 1146
    585-1753C-05




 1  the service from the agency to the contractor and operate the

 2  service successfully.

 3         4.  Clear and specific identification of all required

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

 5         a.  Detailed measurable acceptance criteria for each

 6  deliverable and service to be provided to the agency under the

 7  terms of the contract which document the required performance

 8  level.

 9         b.  A method for monitoring and reporting progress in

10  achieving specified performance standards and levels.

11         c.  The sanctions or penalties that shall be assessed

12  for nonperformance by the contractor or agency.

13         5.  A requirement that the contractor maintain adequate

14  accounting records that comply with all applicable federal and

15  state laws and generally accepted accounting principles.

16         6.  A requirement authorizing the agency to have access

17  to and conduct audits of all records related to the contract

18  and outsourced services.

19         7.  A requirement that ownership of any intellectual

20  property that is critical for the assumption of the outsourced

21  service be transferred from the contractor to the agency if

22  the contractor ceases to provide the outsourced service.

23         8.  A requirement describing the timing and substance

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

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

26  with any relevant state and federal standards.

27         9.  A requirement that the contractor comply with

28  public-records laws. The contractor must:

29         a.  Keep and maintain the public records that

30  ordinarily and necessarily would be required by the state

31  agency in order to perform the function or service.

                                  8

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    Florida Senate - 2005                           CS for SB 1146
    585-1753C-05




 1         b.  Provide the public with access to such public

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

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

 4  chapter 119, Florida Statutes.

 5         c.  Ensure the confidentiality of records that are

 6  exempt from public disclosure or made confidential under law.

 7         d.  Meet all requirements for retaining records and

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

 9  possession of the contractor upon termination of the contract.

10  All records stored electronically must be provided to the

11  state in a format that is compatible with information

12  technology systems of the state.

13         10.  A requirement that any state funds provided for

14  the purchase of or improvements to real property be made

15  contingent upon the contractor granting to the state a

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

17  the amount of the state funds provided for the most recent

18  years following the date of purchase or the completion of

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

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

21  the property before the agency's interest is vacated, the

22  contractor will refund the proportionate share of the state's

23  initial investment, as adjusted by depreciation.

24         11.  A provision that the contractor annually submit

25  and verify pursuant to section 92.525, Florida Statutes, all

26  required financial statements.

27         (b)  A contract may include cost-neutral,

28  performance-based incentives that may vary according to the

29  extent a contractor achieves or surpasses the performance

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

31  weighted proportionally to reflect the extent to which the

                                  9

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    Florida Senate - 2005                           CS for SB 1146
    585-1753C-05




 1  contractor has demonstrated that it has consistently met or

 2  exceeded the contractual requirements and performance

 3  standards.

 4         (c)  When the annualized value of a contract is in

 5  excess of $1 million, at least one of the persons conducting

 6  negotiations must be certified as a contract negotiator based

 7  upon standards established by the Department of Management

 8  Services.

 9         (d)  An agency may not amend a contract without first

10  submitting the proposed contract amendment to the Executive

11  Office of the Governor for approval if the effect of the

12  amendment would be to increase:

13         1.  The value of the contract by $250,000; or

14         2.  The term of the contract by 1 year or more.

15  

16  When an agency proposes any contract amendment that meets the

17  criteria described in this paragraph, it shall submit the

18  proposed contract amendment to the Executive Office of the

19  Governor for approval and shall immediately notify the chairs

20  of the legislative appropriations committees. The Executive

21  Office of the Governor may not approve the proposed contract

22  amendment until 14 days following receipt of the notification

23  to the legislative appropriations chairs. If either chair of

24  the legislative appropriations committee objects in writing to

25  a proposed contract amendment within the 14 days following

26  notification and specifies the reasons for such objection, the

27  Executive Office of the Governor shall disapprove the proposed

28  contract amendment or shall submit the proposed contract

29  amendment to the Administration Commission. The proposed

30  contract amendment may be approved by the Administration

31  Commission by a two-thirds vote of the members present with

                                  10

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    Florida Senate - 2005                           CS for SB 1146
    585-1753C-05




 1  the Governor voting in the affirmative. In the absence of

 2  approval by the Administration Commission, the proposed

 3  contract amendment shall be automatically disapproved.

 4  Otherwise, upon approval by the Governor or Administration

 5  Commission, the agency may execute the contract amendment. An

 6  amendment that is issued under legislative direction,

 7  including funding adjustments annually provided for in the

 8  General Appropriations Act, need not be submitted for approval

 9  in accordance with this paragraph.

10         (e)  In addition to the requirements of sections

11  287.057(13) and (14), Florida Statutes, prior to the renewal

12  or extension of a contract an agency shall verify that all

13  specific direct and indirect costs, savings, performance

14  standards, and qualitative and quantitative benefits

15  identified in the original contract have been met by the

16  contractor and the agency. Such documentation must include an

17  explanation of any differences between the required

18  performance as identified in the contract and the actual

19  performance of the contractor. Such documentation shall be

20  included in the official contract file.

21         Section 2.  Section 215.4211, Florida Statutes, is

22  created to read:

23         215.4211  Review of contracts for state agencies.--The

24  Chief Financial Officer may request, as he or she deems

25  necessary, the option to review and provide comments prior to

26  the execution of any contract that is required to be in

27  compliance with the provisions identified in paragraph (4)(a)

28  of section 1 of this act.

29         Section 3.  Section 14.203, Florida Statutes, is

30  repealed.

31  

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    Florida Senate - 2005                           CS for SB 1146
    585-1753C-05




 1         Section 4.  The sum of $1 million is appropriated from

 2  the General Revenue Fund to the Center for Efficient

 3  Government in the Department of Management Services, and 8

 4  full-time equivalent positions are authorized, to fund the

 5  center for fiscal year 2005-2006.

 6         Section 5.  A contractor, as defined in chapter 287,

 7  Florida Statutes, or its employees, agents, or subcontractors,

 8  may not directly or indirectly supervise, direct, or act as an

 9  approving authority over any state employee or the actions

10  committed to the responsibility of state employees.

11         Section 6.  A contractor, as defined in chapter 287,

12  Florida Statutes, or its employees, agents, or subcontractors,

13  may not knowingly participate through decision, approval,

14  disapproval, recommendation, preparation of any part of a

15  purchase request, influencing the content of any specification

16  or procurement standard, rendering of advice, investigation,

17  or auditing, or in any other advisory capacity, in the

18  procurement of contractual services from an entity of which

19  the contractor, or its employees, agents, or subcontractors,

20  has a material interest.

21         Section 7.  This act shall take effect July 1, 2005.

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    Florida Senate - 2005                           CS for SB 1146
    585-1753C-05




 1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
 2                         Senate Bill 1146

 3                                 

 4  Repeals the State Council on Competitive Government, instead
    of replacing it with the Center for Efficient Government.
 5  Provides that the Center for Efficient Government will develop
    standards and assist agencies in complying with the business
 6  case and contract requirements of the section. The Center will
    not initiate business cases or procurements.
 7  
    Requires that agencies develop business cases with specific
 8  requirements, and seek approval of the outsourcing via General
    Appropriations Act or Legislative Budget Commission, depending
 9  on the timing of the proposed outsourcing. Requires the
    inclusion of specific terms on agency outsourcing contracts,
10  and that amendments to such contracts must be approved by
    either the Executive Office of the Governor, or the
11  Administration Commission, depending on the circumstances.
    Requires an agency to document and verify contractor
12  performance prior to extending or renewing a contract.

13  Requires that contract negotiators will be trained according
    to DMS standards.
14  
    Provides that the CFO has the option to review and provide
15  comments prior to the execution of any contract that is
    required to be in compliance with the provisions of paragraph
16  (4)(a) of section 1 of this act

17  Appropriates $1 million and authorizes 8 FTEs for the Center
    for Efficient Government for fiscal year 2005-2006.
18  
    Prohibits a contractor or its employees from supervising state
19  employees or working on procurements from entities in which
    the contractor or its employees have an interest.
20  
    Appropriates $1 million and authorizes 8 FTEs for the Center
21  for Efficient Government for fiscal year 2005-2006.

22  

23  

24  

25  

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30  

31  

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