August 11, 2020
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Senate Bill 1146

Senate Bill sb1146e1

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    CS for CS for SB 1146                    First Engrossed (ntc)



  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


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    CS for CS for SB 1146                    First Engrossed (ntc)



 1         Government; providing appropriations and

 2         authorizing positions; providing restrictions

 3         on contractor supervision of state employees;

 4         providing restrictions on contractor

 5         involvement in state procurement; providing an

 6         effective date.

 7  

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

 9  

10         Section 1.  Center for Efficient Government;

11  outsourcing or privatization; contract management.--

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

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

14  287.012(1), Florida Statutes.

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

16  287.012(8), Florida Statutes.

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

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

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

20  and accountability for the service.

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

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

23  service.

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

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

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

27  private sector is solely and fully responsible for the

28  performance of the specific service.

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

30  program component as defined in section 216.011, Florida

31  Statutes.


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    CS for CS for SB 1146                    First Engrossed (ntc)



 1         (g)  The provisions of this section shall not apply to

 2  contracts in support of the planning, development,

 3  implementation, operation or maintenance of the road, bridge,

 4  and public transportation construction program of the

 5  Department of Transportation.

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

 7  establish the Center for Efficient Government, which shall

 8  promote best business practices in procurement and contracting

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

10  missions and to deliver services efficiently and

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

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

13         (b)  The center shall:

14         1.  Assist agencies, when requested, in their

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

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

17  solicitation documents, supporting contract negotiations,

18  contract drafting, change management, performance measurement,

19  and contract management.

20         2.  Develop standards, processes, templates, and

21  guidelines that comply with the appropriate provisions of this

22  section for use by agencies.

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

24  state procurement initiatives, which must include, but need

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

26  At a minimum, the database must contain the following

27  information in regard to contractual services:

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

29  contractual service procured, and the names of the prime

30  contractor and any subcontractors.

31  


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    CS for CS for SB 1146                    First Engrossed (ntc)



 1         b.  The projected and actual completion dates by

 2  project phase.

 3         c.  A description of the performance standards

 4  contained in the contract, projected performance, and actual

 5  performance.

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

 7  and actual costs and revenues.

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

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

10  before beginning the procurement process provided for in

11  section 287.057, Florida Statutes.

12         (a)  The agency shall develop a business case

13  describing and analyzing the function or service proposed for

14  outsourcing. A business case is part of the solicitation

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

16  120.54, Florida Statutes. The business case must include, but

17  need not be limited to:

18         1.  A detailed description of the service to be

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

20  performance of the service, and a rationale documenting how

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

22  state, the agency, or its clients.

23         2.  A cost-benefit analysis describing the estimated

24  specific direct and indirect costs, savings, performance

25  improvements, risks, and qualitative and quantitative benefits

26  involved in or resulting from outsourcing the service. The

27  cost-benefit analysis must include a detailed plan and

28  timeline identifying all actions that must be implemented to

29  realize expected benefits. Pursuant to section 92.525, Florida

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

31  savings, and benefits are valid and achievable.


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    CS for CS for SB 1146                    First Engrossed (ntc)



 1         3.  A statement of the potential effect on applicable

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

 3  statement must specifically describe the effect on general

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

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

 6  indirect effect on federal funding and cost allocations.

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

 8  law, including a plan for:

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

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

11  Statutes.

12         b.  Ensuring the confidentiality of records that are

13  exempt from public disclosure or made confidential by law.

14         c.  Meeting all legal requirements for retaining

15  records.

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

17  records in possession of the contractor upon termination of

18  the contract.

19         5.  A transition and implementation plan for addressing

20  changes in the number of agency personnel, affected business

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

22  also specify the mechanism for continuing the operation of the

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

24  performance standards and provisions of the contract. Within

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

26  full-time equivalent positions, which are subject to

27  outsourcing. All full-time equivalent positions identified in

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

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

30  Notwithstanding the provisions of section 216.262, Florida

31  Statutes, the Executive Office of the Governor shall request


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    CS for CS for SB 1146                    First Engrossed (ntc)



 1  authority from the Legislative Budget Commission to

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

 3  Legislature when a contract is terminated and the outsourced

 4  service must be returned to the agency.

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

 6  by a contractor, a description of the proposed requirements

 7  for maintaining those assets by the contractor or the agency

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

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

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

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

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

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

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

15  in the manner and form prescribed in the legislative budget

16  request instructions pursuant to section 16.023, Florida

17  Statutes. Prior to approval in the General Appropriations Act,

18  the agency may initiate the procurement process pursuant to

19  section 287.057, Florida Statutes, however, only upon approval

20  in the General Appropriations Act, may the agency complete

21  contract execution pursuant to section 287.057, Florida

22  Statutes.

23         2.  If a proposed outsourcing initiative would require

24  integration with or would in any way affect other information

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

26  feasibility study documentation as required by the

27  instructions for the legislative budget request under section

28  216.023, Florida Statutes.

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

30  during a fiscal year and the outsourcing provision was not

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


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    CS for CS for SB 1146                    First Engrossed (ntc)



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

 2  President of the Senate, the Speaker of the House of

 3  Representatives, the chairs of the legislative appropriations

 4  committees, and the chairs of the relevant substantive

 5  committees the validated business case that complies with the

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

 7  release of any solicitation documents, as provided in section

 8  287.057, Florida Statutes. Any budgetary changes that are

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

10  to existing programs unless such changes are recommended to

11  the Legislative Budget Commission by the Governor and the

12  Legislative Budget Commission expressly approves such program

13  changes.

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

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

16  general law, the General Appropriations Act, legislation

17  implementing the General Appropriations Act, or a special

18  appropriations act.

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

20  287.058, Florida Statutes, each contract for the procurement

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

22  excess of the threshold amount provided in section 287.017,

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

24  not be limited to:

25         1.  A detailed scope of work that clearly specifies

26  each service or deliverable to be provided, including a

27  description of each deliverable or activity that is

28  quantifiable, measurable, and verifiable.

29         2.  All service-level agreements describing all

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

31  


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    CS for CS for SB 1146                    First Engrossed (ntc)



 1  agency's service requirements and performance objectives, and

 2  specific responsibilities of the agency and 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 service from the agency to the contractor and operate the

 9  service successfully.

10         4.  Clear and specific identification of all required

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

12         a.  Detailed measurable acceptance criteria for each

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

14  terms of the contract which document the required performance

15  level.

16         b.  A method for monitoring and reporting progress in

17  achieving specified performance standards and levels.

18         c.  The sanctions or penalties that shall be assessed

19  for nonperformance by the contractor or agency.

20         5.  A requirement that the contractor maintain adequate

21  accounting records that comply with all applicable federal and

22  state laws and generally accepted accounting principles.

23         6.  A requirement authorizing the agency to have access

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

25  and outsourced services.

26         7.  A requirement that ownership of any intellectual

27  property that is critical for the assumption of the outsourced

28  service be transferred from the contractor to the agency if

29  the contractor ceases to provide the outsourced service.

30         8.  A requirement describing the timing and substance

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


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    CS for CS for SB 1146                    First Engrossed (ntc)



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

 2  with any relevant state and federal standards.

 3         9.  A requirement that the contractor comply with

 4  public-records laws. The contractor must:

 5         a.  Keep and maintain the public records that

 6  ordinarily and necessarily would be required by the state

 7  agency in order to perform the function or service.

 8         b.  Provide the public with access to such public

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

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

11  chapter 119, Florida Statutes.

12         c.  Ensure the confidentiality of records that are

13  exempt from public disclosure or made confidential under law.

14         d.  Meet all requirements for retaining records and

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

16  possession of the contractor upon termination of the contract.

17  All records stored electronically must be provided to the

18  state in a format that is compatible with information

19  technology systems of the state.

20         10.  A requirement that any state funds provided for

21  the purchase of or improvements to real property be made

22  contingent upon the contractor granting to the state a

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

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

25  years following the date of purchase or the completion of

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

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

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

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

30  initial investment, as adjusted by depreciation.

31  


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    CS for CS for SB 1146                    First Engrossed (ntc)



 1         11.  A provision that the contractor annually submit

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

 3  required financial statements.

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

 5  performance-based incentives that may vary according to the

 6  extent a contractor achieves or surpasses the performance

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

 8  weighted proportionally to reflect the extent to which the

 9  contractor has demonstrated that it has consistently met or

10  exceeded the contractual requirements and performance

11  standards.

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

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

14  negotiations must be certified as a contract negotiator based

15  upon standards established by the Department of Management

16  Services.

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

18  submitting the proposed contract amendment to the Executive

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

20  amendment would be to increase:

21         1.  The value of the contract by $250,000 or more for

22  those contracts with a total value of at least $250,000 but

23  less than $1 million;

24         2.  The value of the contract by $1 million or more for

25  those contracts with a total value of at least $1 million but

26  less than $10 million;

27         3.  The value of the contract by 10 percent or more for

28  those contracts with a total value of $10 million or more; or

29         4.  The term of the contract by 1 year or more.

30  

31  


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    CS for CS for SB 1146                    First Engrossed (ntc)



 1  When an agency proposes any contract amendment that meets the

 2  criteria described in this paragraph, it shall submit the

 3  proposed contract amendment to the Executive Office of the

 4  Governor for approval and shall immediately notify the chairs

 5  of the legislative appropriations committees. The Executive

 6  Office of the Governor may not approve the proposed contract

 7  amendment until 14 days following receipt of the notification

 8  to the legislative appropriations chairs. If either chair of

 9  the legislative appropriations committee objects in writing to

10  a proposed contract amendment within the 14 days following

11  notification and specifies the reasons for such objection, the

12  Executive Office of the Governor shall disapprove the proposed

13  contract amendment or shall submit the proposed contract

14  amendment to the Administration Commission. The proposed

15  contract amendment may be approved by the Administration

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

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

18  approval by the Administration Commission, the proposed

19  contract amendment shall be automatically disapproved.

20  Otherwise, upon approval by the Governor or Administration

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

22  amendment that is issued under legislative direction,

23  including funding adjustments annually provided for in the

24  General Appropriations Act, need not be submitted for approval

25  in accordance with this paragraph.

26         (e)  In addition to the requirements of sections

27  287.057(13) and (14), Florida Statutes, prior to the renewal

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

29  specific direct and indirect costs, savings, performance

30  standards, and qualitative and quantitative benefits

31  identified in the original contract have been met by the


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    CS for CS for SB 1146                    First Engrossed (ntc)



 1  contractor and the agency. Such documentation must include an

 2  explanation of any differences between the required

 3  performance as identified in the contract and the actual

 4  performance of the contractor. Such documentation shall be

 5  included in the official contract file.

 6         Section 2.  Section 215.4211, Florida Statutes, is

 7  created to read:

 8         215.4211  Review of contracts for state agencies.--The

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

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

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

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

13  of section 1 of this act.

14         Section 3.  Section 14.203, Florida Statutes, is

15  repealed.

16         Section 4.  For the 2005-2006 fiscal year, $500,000 in

17  recurring funds from the General Revenue Fund and $500,000 in

18  recurring funds from the Grants and Donations Trust Fund are

19  appropriated and eight positions are authorized in the

20  Department of Management Services for the Center for Efficient

21  Government. Such funds and positions are contingent on the

22  appropriation of funds and positions in section 5.

23         Section 5.  For the 2005-2006 fiscal year, there is

24  appropriated $356,250 in recurring funds from the General

25  Revenue Fund and five positions are authorized in the

26  Department of Financial Services for the review of contracts

27  for state agencies. This appropriation represents 9 months'

28  funding for the positions.

29         Section 6.  For the 2005-2006 fiscal year, there is

30  appropriated $274,700 in nonrecurring funds from the Grants

31  and Donations Trust Fund in the Department of Management


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    CS for CS for SB 1146                    First Engrossed (ntc)



 1  Services for training costs for the certified negotiator

 2  designation for procurement contracting. Such funds represent

 3  335 training units. The Department of Management Services, in

 4  consultation with entities subject to this act, shall identify

 5  personnel to participate in this training based on requested

 6  need and ensuring that each agency is represented. The

 7  Department of Management Services is authorized to remit

 8  payment for this training on behalf of all personnel

 9  identified to participate.

10         Section 7.  A contractor, as defined in chapter 287,

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

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

13  approving authority over any state employee or the actions

14  committed to the responsibility of state employees.

15         Section 8.  A contractor, as defined in chapter 287,

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

17  may not knowingly participate through decision, approval,

18  disapproval, recommendation, preparation of any part of a

19  purchase request, influencing the content of any specification

20  or procurement standard, rendering of advice, investigation,

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

22  procurement of contractual services from an entity of which

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

24  has a material interest.

25         Section 9.  This act shall take effect July 1, 2005.

26  

27  

28  

29  

30  

31  


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