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Senate Bill 1476

Senate Bill sb1476

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    Florida Senate - 2005                                  SB 1476

    By Senator Campbell





    32-1035B-05

  1                      A bill to be entitled

  2         An act relating to the Department of Children

  3         and Family Services; providing legislative

  4         intent with respect to establishing a structure

  5         by which the department shall monitor and

  6         manage contracts with external service

  7         providers; providing definitions; requiring

  8         that the department competitively procure

  9         certain commodities and contractual services;

10         authorizing the department to competitively

11         procure and contract for systems of treatment

12         or service that involve multiple providers;

13         providing requirements if other governmental

14         entities contribute matching funds; requiring

15         that an entity providing matching funds comply

16         with certain procurement procedures;

17         authorizing the department to independently

18         procure and contract for treatment services;

19         requiring that the department ensure the

20         financial integrity of and service quality in

21         certain Medicaid services; requiring that the

22         department develop a validated business case

23         before outsourcing or privatizing any service

24         or function; providing requirements for the

25         business case; requiring that the validated

26         business case be submitted to the Legislature

27         for approval; requiring that a contractual

28         service that has previously been outsourced be

29         subject to the requirements for a validated

30         business case; requiring that a procurement of

31         contractual services equal to or in excess of

                                  1

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    Florida Senate - 2005                                  SB 1476
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 1         the threshold amount for CATEGORY FIVE comply

 2         with specified requirements, including a scope

 3         of work and performance standards; authorizing

 4         the department to adopt incremental penalties

 5         by rule; authorizing the department to include

 6         cost-neutral, performance-based incentives in a

 7         contract; requiring that a contract in excess

 8         of $1 million be negotiated by a contract

 9         negotiator who is certified according to

10         standards established by the Department of

11         Management Services; limiting circumstances

12         under which the department may amend a

13         contract; requiring that a proposed contract

14         amendment be submitted to the Executive Office

15         of the Governor for approval; requiring

16         approval of a contract amendment by the

17         Administration Commission under certain

18         circumstances; requiring the department to

19         develop, in consultation with the Department of

20         Management Services, contract templates and

21         guidelines; requiring that the department

22         establish a contract-management process;

23         specifying the requirements for and components

24         of the contract-management process; providing

25         requirements for resolving performance

26         deficiencies and terminating a contract;

27         requiring a corrective-action plan under

28         certain circumstances; requiring the department

29         to develop standards of conduct and

30         disciplinary actions; requiring that the

31         department establish contract-monitoring units

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    Florida Senate - 2005                                  SB 1476
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 1         and a contract-monitoring process; requiring

 2         written reports; requiring on-site visits for

 3         contracts involving the provision of direct

 4         client services; requiring the department to

 5         annually report to the Legislature and the

 6         Office of Program Policy Analysis and

 7         Government Accountability; specifying

 8         requirements for the annual reports; requiring

 9         that the Office of Program Policy Analysis and

10         Government Accountability conduct two reviews

11         of the contract-management and accountability

12         structures of the department and report to the

13         Legislature and the Auditor General; repealing

14         ss. 402.72 and 402.73, F.S., relating to

15         contract-management requirements for the

16         Department of Children and Family Services;

17         providing an effective date.

18  

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

20  

21         Section 1.  Department of Children and Family Services;

22  procurement of contractual services; outsourcing or

23  privatization; contract management.--

24         (1)  LEGISLATIVE INTENT.--The Legislature intends that

25  the Department of Children and Family Services obtain services

26  in the manner that is most efficient and cost-effective for

27  the state, that provides the greatest long-term benefits to

28  the clients receiving services, and that minimizes the

29  disruption of client services. In order to meet these

30  legislative goals, the department shall comply with

31  legislative policy guidelines that require compliance with

                                  3

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    Florida Senate - 2005                                  SB 1476
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 1  uniform procedures for procuring contractual services,

 2  prescribe how the department must outsource or privatize its

 3  programmatic and administrative functions and services to

 4  external service providers rather than from the department or

 5  another state agency, and establish a contract-management and

 6  contract-monitoring process.

 7         (2)  DEFINITIONS.--As used in this section, the term:

 8         (a)  "Contract manager" means the department employee

 9  who is responsible for enforcing the performance of

10  administrative and programmatic terms and conditions of a

11  contract. The contract manager is the primary point of contact

12  through which all contracting information flows between the

13  department and the contractor. The contract manager is

14  responsible for day-to-day contract oversight, including

15  approval of contract deliverables and invoices. All actions

16  related to the contract shall be initiated by or coordinated

17  with the contract manager. The contract manager maintains the

18  official contract files.

19         (b)  "Contract monitor" means the department employee

20  who is responsible for observing, recording, and reporting to

21  the contract manager the information necessary to determine

22  whether the contractor is in compliance with the

23  administrative and programmatic terms and conditions of the

24  contract.

25         (c)  "Department" means the Department of Children and

26  Family Services.

27         (d)  "Outsourcing" means the establishment of a

28  contractual relationship between the department and an

29  external service provider under which the department remains

30  fully responsible and accountable for the provision of the

31  affected service and maintains control over policy,

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    Florida Senate - 2005                                  SB 1476
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 1  management, and fiscal decisions while the external service

 2  provider performs all or part of the service.

 3         (e)  "Performance measures" mean the detailed,

 4  quantifiable acceptance criteria for each deliverable and

 5  service to be provided to the department under the terms of a

 6  contract.

 7         (f)  "Privatization" means any process aimed at

 8  shifting services, in whole or in part, from the department to

 9  the private sector such that the private sector is solely and

10  fully responsible for the performance of specific services.

11         (g)  "Service" means all or any portion of a program or

12  program component as defined in s. 216.011.

13         (3)  PROCUREMENT OF COMMODITIES AND CONTRACTUAL

14  SERVICES.--

15         (a)  The department shall award all contracts for the

16  purchase of commodities and contractual services in excess of

17  the threshold amount provided in section 287.017, Florida

18  Statutes, for CATEGORY TWO, through competitive solicitation

19  as provided for in section 287.057, Florida Statutes. When the

20  department procures a contractual service or commodity

21  pursuant to section 287.057(5)(f)13., Florida Statutes, the

22  exemption only applies to contractual services and commodities

23  provided by the governmental agency and not between the

24  governmental agency and a private vendor.

25         (b)  When it is in the best interest of a defined

26  segment of its consumer population, the department may

27  competitively procure and contract for systems of treatment or

28  service that involve multiple providers, rather than procuring

29  and contracting for treatment or services separately from each

30  participating provider. The department must ensure that all

31  providers that participate in the treatment or service system

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    Florida Senate - 2005                                  SB 1476
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 1  meet all applicable statutory, regulatory, service-quality,

 2  and cost-control requirements. If other governmental entities

 3  or units of special purpose government contribute matching

 4  funds to the support of a given system of treatment or

 5  service, the department shall formally request information

 6  from those funding entities in the procurement process and may

 7  take the information received into account in the selection

 8  process. If a local government contributes matching funds to

 9  support the system of treatment or contracted service and if

10  the match constitutes at least 25 percent of the value of the

11  contract, the department shall afford the governmental match

12  contributor an opportunity to name an employee as one of the

13  persons required by section 287.057(17), Florida Statutes, to

14  evaluate or negotiate certain contracts, unless the department

15  sets forth in writing the reason why such inclusion would be

16  contrary to the best interest of the state. Any employee so

17  named by the governmental match contributor shall qualify as

18  one of the persons required by section 287.057(17), Florida

19  Statutes. A governmental entity or unit of special purpose

20  government may not name an employee as one of the persons

21  required by section 287.057(17), Florida Statutes, if it, or

22  any of its political subdivisions, executive agencies, or

23  special districts, intends to compete for the contract to be

24  awarded. The governmental funding entity or contributor of

25  matching funds must comply with all procurement procedures set

26  forth in section 287.057, Florida Statutes, when appropriate

27  and required.

28         (c)  The department may procure and contract for or

29  provide assessment and case-management services independently

30  from treatment services.

31  

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    Florida Senate - 2005                                  SB 1476
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 1         (d)  The department must implement systems and controls

 2  in order to ensure financial integrity and service-provision

 3  quality in the developmental services Medicaid waiver service

 4  system.

 5         (4)  SOURCING STANDARDS AND REQUIREMENTS.--If the

 6  department proposes to outsource or privatize a service, the

 7  department must comply with the requirements of this section

 8  prior to the competitive-procurement process provided for in

 9  section 287.057, Florida Statutes.

10         (a)  The department shall develop a validated business

11  case describing and analyzing the service proposed for

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

13  solicitation process and is not a rule subject to challenge

14  pursuant to section 120.54, Florida Statutes. The business

15  case must include, but need not be limited to:

16         1.  A detailed description of the services to be

17  outsourced or privatized, a description and analysis of the

18  department's current performance of such service, and a

19  rationale documenting how outsourcing or privatizing such

20  service would be in the best interest of the state, the

21  department, and its clients.

22         2.  A cost-benefit analysis documenting the estimated

23  specific direct and indirect costs, savings, performance

24  improvements, risks, and qualitative and quantitative benefits

25  involved in or resulting from outsourcing or privatizing the

26  service. The cost-benefit analysis must include a detailed

27  plan and timeline identifying all actions that must be

28  implemented to realize expected benefits. Pursuant to section

29  92.525, Florida Statutes, the Secretary of Children and Family

30  Services shall verify that all costs, savings, and benefits

31  are valid and achievable.

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    Florida Senate - 2005                                  SB 1476
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 1         3.  A description of the specific performance measures

 2  that must be achieved by the outsourcing or privatization

 3  proposal.

 4         4.  A statement of the potential effect on applicable

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

 6  statement must specifically describe the effect on general

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

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

 9  indirect effect on federal funding and cost allocations.

10         5.  A plan to ensure compliance with public-record

11  laws, which must include components that:

12         a.  Provide public access to public records at a cost

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

14  Statutes.

15         b.  Ensure the confidentiality of records that are

16  exempt from disclosure or confidential under law.

17         c.  Meet all legal requirements for record retention.

18         d.  Allow for transfer to the state, at no cost, all

19  public records in possession of the external service provider

20  upon termination of the contract.

21         6.  A department transition and implementation plan for

22  addressing changes in organizational headcount structure,

23  affected business processes, and employee-transition issues.

24  Such a plan must also specify the mechanism for continuing the

25  operation of the function or service if the contractor fails

26  to perform and comply with the performance standards and

27  provisions of the contract. Within this plan, the department

28  shall identify all resources, including full-time equivalent

29  positions, which are subject to outsourcing or privatization.

30  All full-time equivalent positions identified in the plan

31  shall be placed in reserve by the Executive Office of the

                                  8

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    Florida Senate - 2005                                  SB 1476
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 1  Governor until the end of the first year of the contract.

 2  Notwithstanding the provisions of section 216.262, Florida

 3  Statutes, the Executive Office of the Governor shall request

 4  authority from the Legislative Budget Commission to

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

 6  Legislature when a contract is terminated and the outsourced

 7  or privatized function or service must be returned to the

 8  department.

 9         7.  A listing of assets proposed for transfer to or use

10  by the external service provider, a description of the

11  proposed requirements for maintenance of those assets by the

12  external service provider or the department in accordance with

13  chapter 273, Florida Statutes, a plan for their disposition

14  upon termination of the contract, and a description of how the

15  planned asset transfer or use by the contractor is in the best

16  interest of the department and the state.

17         (b)1.  If the department proposes to outsource or

18  privatize the service in the next fiscal year, the department

19  shall submit the validated business case with the department's

20  final legislative budget request, in the manner and form

21  prescribed in the legislative budget request instructions as

22  required by section 216.023, Florida Statutes. Upon approval

23  in the General Appropriations Act, the department may initiate

24  and complete the competitive-procurement process pursuant to

25  section 287.057, Florida Statutes, and shall have the

26  authority to enter into contracts with the external service

27  provider.

28         2.  If a proposed outsourcing or privatization

29  initiative would require integration with, or would in any way

30  affect other state information technology systems, the

31  department shall submit the feasibility study documentation

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    Florida Senate - 2005                                  SB 1476
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 1  required by the legislative budget request instructions

 2  pursuant to section 216.023, Florida Statutes.

 3         (c)  If the department proposes to outsource or

 4  privatize a service during the fiscal year, the department

 5  must provide to the President of the Senate, the Speaker of

 6  the House of Representatives, the chairs of the legislative

 7  appropriations committees, and the chairs of the relevant

 8  substantive committees the validated business case that

 9  complies with the requirements of paragraph (a) at least 30

10  days before the release of any solicitation documents, as

11  provided for in section 287.057, Florida Statutes. Any

12  budgetary changes that are inconsistent with the department's

13  approved budget may not be made to existing programs unless

14  such changes are recommended to the Legislative Budget

15  Commission by the Governor and the Legislative Budget

16  Commission expressly approves such program changes.

17         (d)  If the department is required to competitively

18  procure a contractual service that has previously been

19  outsourced, the department shall comply with the requirements

20  of this section.

21         (5)  CONTRACTING AND PERFORMANCE MEASURES.--In addition

22  to the requirements of section 287.058, Florida Statutes,

23  every procurement of contractual services by the department

24  which meets or is in excess of the threshold amount provided

25  in section 287.017, Florida Statutes, for CATEGORY FIVE, must

26  comply with the requirements of this subsection.

27         (a)  A contract containing all provisions and

28  conditions, which must include, but need not be limited to:

29         1.  A detailed scope of work that clearly specifies

30  each service and deliverable to be provided.

31  

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    Florida Senate - 2005                                  SB 1476
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 1         2.  All required service-level agreements clearly

 2  describing all necessary performance requirements and specific

 3  roles and responsibilities of the department and the

 4  contractor.

 5         3.  Associated costs and savings, specific payment

 6  terms and payment schedules, including incentive and penalty

 7  provisions, criteria governing payment, and a clear and

 8  specific schedule to complete all required activities needed

 9  to transfer the function or service from the state to the

10  contractor.

11         4.  A description of deliverables, activities, or

12  events that are directly related to the scope of work which is

13  quantifiable, measurable, and verifiable.

14         5.  Clear and specific identification of all required

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

16         a.  Acceptance criteria for each deliverable and

17  service to be provided to the department under the terms of

18  the contract which document, to the greatest extent possible,

19  the required performance level. Acceptance criteria must be

20  detailed, clear, and unambiguous and shall be used to measure

21  deliverables and services to be provided under the contract.

22         b.  A method for monitoring and reporting progress in

23  achieving specified performance standards and levels.

24         c.  The sanctions or penalties that shall be assessed

25  for contract or state nonperformance. The department may

26  adopt, by rule, specific incremental penalties to be imposed

27  by its contract managers on a contractor due to the

28  contractor's failure to comply with a requirement for

29  corrective action. Any financial penalty that is imposed upon

30  a contractor may not be paid from funds being used to provide

31  services to clients, and the contractor may not reduce the

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    Florida Senate - 2005                                  SB 1476
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 1  amount of services being delivered to clients as a method for

 2  offsetting the effect of the penalty. If a financial penalty

 3  is imposed upon a contractor that is a corporation, the

 4  department shall notify, at a minimum, the board of directors

 5  of the corporation. The department may notify any additional

 6  parties that the department believes may be helpful in

 7  obtaining the corrective action that is being sought. In

 8  addition, the rules adopted by the department must include

 9  provisions that permit the department to deduct the financial

10  penalties from funds that would otherwise be due to the

11  contractor, not to exceed 10 percent of the amount that

12  otherwise would be due to the contractor for the period of

13  noncompliance. If the department imposes a financial penalty,

14  it shall advise the contractor in writing of the cause for the

15  penalty. A failure to include such deductions in a request for

16  payment constitutes grounds for the department to reject that

17  request for payment. The remedies identified in this paragraph

18  do not limit or restrict the department's application of any

19  other remedy available to it in the contract or under law. The

20  remedies described in this paragraph may be cumulative and may

21  be assessed upon each separate failure to comply with

22  instructions from the department to complete corrective

23  action.

24         6.  A requirement that the contractor maintains

25  adequate accounting records that comply with all applicable

26  federal and state laws.

27         7.  A requirement authorizing the department and state

28  to have access to and conduct audits of all records related to

29  the contract and outsourced functions or services.

30         8.  A requirement that ownership of any intellectual

31  property that is critical for the assumption of the outsourced

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    Florida Senate - 2005                                  SB 1476
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 1  function or service by the department or state or for transfer

 2  to another external service provider shall transfer to the

 3  state if the contractor ceases to provide the outsourced

 4  function or service.

 5         9.  A requirement describing the timing and substance

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

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

 8  with any relevant state and federal standards for planning,

 9  implementation, operations, and oversight.

10         10.  A requirement that the contractor shall comply

11  with public-record laws. The contractor shall:

12         a.  Keep and maintain the public records that

13  ordinarily and necessarily would be required by the department

14  to perform the service.

15         b.  Provide public access to such public records on the

16  same terms and conditions that the department would and at a

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

18         c.  Ensure the confidentiality of records that are

19  exempt from disclosure or confidential under law.

20         d.  Meet all legal and auditing requirements for record

21  retention, and transfer to the state, at no cost to the state,

22  all public records in possession of the contractor upon

23  termination of the contract. All records stored electronically

24  must be provided to the state in the format compatible with

25  state information technology systems.

26         11.  A requirement that any state funds provided for

27  the purchase of or improvements to real property are

28  contingent upon the contractor granting to the state a

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

30  the amount of the state funds provided for at least 5 years

31  following the date of purchase or the completion of the

                                  13

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 1  improvements or as further required by law. The contract must

 2  include a provision that, as a condition of receipt of state

 3  funding for this purpose, the contractor agrees that, if it

 4  disposes of the property before the department's interest is

 5  vacated, the contractor will refund the proportionate share of

 6  the state's initial investment, as adjusted by depreciation.

 7         12.  A provision that the contractor annually submit,

 8  pursuant to section 92.525, Florida Statutes, all required

 9  financial statements.

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

11  performance-based incentives that may vary according to the

12  extent a contractor achieves or surpasses the performance

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

14  weighted proportionally to reflect the extent to which the

15  contractor has demonstrated that it has consistently met or

16  exceeded the contractual requirements and the performance

17  standards.

18         (c)  When the value of a contract is in excess of $1

19  million, at least one of the persons conducting negotiations

20  must be certified as a contract negotiator based upon

21  standards established by the Department of Management

22  Services.

23         (d)  The department may not amend a contract without

24  first submitting the proposed contract amendment to the

25  Executive Office of the Governor for approval if:

26         1.  The effect of the amendment would be to increase

27  the value of the contract by $1 million or 10 percent of the

28  contract value, whichever is less;

29         2.  The total dollar amount to be paid is increased by

30  10 percent or more;

31  

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 1         3.  The federal or state funding sources or

 2  requirements change; or

 3         4.  A contract performance date or the contract service

 4  ending date is extended by 1 year or more.

 5  

 6  When the department proposes any contract amendment that meets

 7  the criteria described in this paragraph, it shall submit the

 8  proposed contract amendment to the Executive Office of the

 9  Governor for approval and shall immediately notify the chairs

10  of the legislative appropriations committees. The Executive

11  Office of the Governor may not approve the proposed contract

12  amendment until 14 days following receipt of the notification

13  to the legislative appropriations chairs. If either chair of

14  the legislative appropriations committees objects in writing

15  to a proposed contract amendment within 14 days following

16  notification and specifies the reasons for such objection, the

17  Executive Office of the Governor shall disapprove the proposed

18  contract amendment or shall submit the proposed contract

19  amendment to the Administration Commission. The proposed

20  contract amendment may be approved by the Administration

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

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

23  approval by the commission, the proposed contract amendment

24  shall be automatically disapproved. Otherwise, upon approval

25  by the Governor or Administration Commission, the department

26  may execute the contract amendment.

27         (e)  An amendment that is issued pursuant to

28  legislative direction, including funding adjustments annually

29  provided for in the General Appropriations Act, need not be

30  submitted for approval in accordance with paragraph (d).

31  

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 1         (f)  The department shall, in consultation with the

 2  Department of Management Services, develop contract templates

 3  and guidelines that define the mandatory contract provisions

 4  and other requirements identified in this subsection and that

 5  must be used for all contractual service contracts meeting the

 6  requirements of this subsection. All contract templates and

 7  guidelines shall be developed by September 30, 2005, and shall

 8  be submitted to the Executive Office of the Governor for

 9  review and approval. Upon request, the approved contract

10  templates and guidelines shall be provided to the President of

11  the Senate and the Speaker of the House of Representatives.

12         (6)  CONTRACT-MANAGEMENT REQUIREMENTS AND

13  PROCESS.--Notwithstanding section 287.057(15), Florida

14  Statutes, the department is responsible for establishing a

15  contract-management process that requires a member of the

16  department's Senior Management Service to assign in writing

17  the responsibility of a contract to a contract manager. The

18  department shall maintain a set of procedures describing its

19  contract-management process which must minimally include the

20  following requirements:

21         (a)  The contract manager shall maintain the official

22  contract file throughout the duration of the contract and for

23  a period not less than 6 years after the termination of the

24  contract.

25         (b)  The contract manager shall review all invoices for

26  compliance with the criteria and payment schedule provided for

27  in the contract and shall approve payment of all invoices

28  before their transmission to the Department of Financial

29  Services for payment. Only the contract manager shall approve

30  the invoices for a specific contract, unless the contract

31  manager is temporarily unavailable to review an invoice. The

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 1  contract file must contain an explanation for any periods of

 2  temporary unavailability of the assigned contract manager. For

 3  any individual invoice in excess of $500,000, a member of the

 4  Selected Exempt Service or Senior Management Service shall

 5  also sign payment approval of the invoice. For any individual

 6  invoice in excess of $1 million, a member of the Senior

 7  Management Service shall also sign payment approval of the

 8  invoice.

 9         (c)  The contract manager shall maintain a schedule of

10  payments and total amounts disbursed and shall periodically

11  reconcile the records with the state's official accounting

12  records.

13         (d)  For contracts involving the provision of direct

14  client services, the contract manager shall periodically visit

15  the physical location where the services are delivered and

16  speak directly to clients receiving the services and the staff

17  responsible for delivering the services.

18         (e)  For contracts for which the contractor is a

19  corporation, the contract manager shall attend at least one

20  board meeting semiannually, if held and if within 100 miles of

21  the contract manager's official headquarters.

22         (f)  The contract manager shall meet at least once a

23  month directly with the contractor's representative and

24  maintain records of such meetings.

25         (g)  The contract manager shall periodically document

26  any differences between the required performance measures and

27  the actual performance measures. If a contractor fails to meet

28  and comply with the performance measures established in the

29  contract, the department may allow a reasonable period for the

30  contractor to correct performance deficiencies. If performance

31  deficiencies are not resolved to the satisfaction of the

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 1  department within the prescribed time, and if no extenuating

 2  circumstances can be documented by the contractor to the

 3  department's satisfaction, the department must terminate the

 4  contract. The department may not enter into a new contract

 5  with that same contractor for the services for which the

 6  contract was previously terminated for a period of at least 24

 7  months after the date of termination. The contract manager

 8  shall obtain and enforce corrective-action plans, if

 9  appropriate, and maintain records regarding the completion or

10  failure to complete corrective-action items.

11         (h)  The contract manager shall document any contract

12  modifications, which shall include recording any contract

13  amendments as provided for in this section.

14         (i)  If the contract manager has been assigned prior to

15  the execution of the contract, the contract manager shall

16  review and approve the contract.

17         (j)  The contract manager shall be properly trained

18  before being assigned responsibility for any contract.

19  

20  The department shall develop standards of conduct and a range

21  of disciplinary actions for its employees which are

22  specifically related to carrying out contract-management

23  responsibilities.

24         (7)  CONTRACT-MONITORING REQUIREMENTS AND PROCESS.--The

25  department shall establish contract-monitoring units staffed

26  by full-time career service employees who report to a member

27  of the Select Exempt Service or Senior Management Service and

28  who have been properly trained to perform contract monitoring.

29  A member of the Senior Management Service shall assign in

30  writing a specific contract to a contract-monitoring unit. The

31  department shall establish a contract-monitoring process that

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    Florida Senate - 2005                                  SB 1476
    32-1035B-05




 1  must include, but need not be limited to, the following

 2  requirements:

 3         (a)  Performing a risk assessment at the start of each

 4  fiscal year and preparing an annual contract-monitoring

 5  schedule that includes consideration for the level of risk

 6  assigned. The department may monitor any contract at any time

 7  regardless of whether such monitoring was originally included

 8  in the annual contract-monitoring schedule.

 9         (b)  Preparing a contract-monitoring plan, including

10  sampling procedures, before performing on-site monitoring at

11  external locations of a service provider. The plan must

12  include a description of the programmatic, fiscal, and

13  administrative components that will be monitored on-site. If

14  appropriate, clinical and therapeutic components may be

15  included.

16         (c)  Conducting analyses of the performance and

17  compliance of an external service provider by means of desk

18  reviews if the external service provider will not be monitored

19  on-site during a fiscal year.

20         (d)  Unless the department sets forth in writing the

21  need for an extension, providing a written report presenting

22  the results of the monitoring within 30 days after the

23  completion of the on-site monitoring or desk review. Report

24  extensions may not exceed 30 days after the original

25  completion date. The department shall develop and use a

26  standard contract-monitoring report format and shall provide

27  access to the reports by means of a website that is available

28  to the Legislature.

29         (e)  For contracts involving the provision of direct

30  client services, requiring the contract monitor to visit the

31  physical location where the services are being delivered and

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    Florida Senate - 2005                                  SB 1476
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 1  to speak directly to the clients receiving the services and

 2  with the staff responsible for delivering the services.

 3         (f)  Developing and maintaining a set of procedures

 4  describing the contract-monitoring process.

 5  

 6  The department shall develop standards of conduct and a range

 7  of disciplinary actions for its employees which are

 8  specifically related to carrying out contract-monitoring

 9  responsibilities.

10         (8)  REPORTS TO THE LEGISLATURE.--Beginning December

11  31, 2005, and by October 31 of each subsequent year, the

12  department shall furnish a report to the President of the

13  Senate, the Speaker of the House of Representatives, the

14  chairs of the legislative appropriations committees, and the

15  Office of Program Policy Analysis and Government

16  Accountability which includes the following components:

17         (a)  A detailed description of all contractual service

18  contracts in excess of $250,000 and their compliance with the

19  performance standards as set forth in their contracts, which

20  must include an explanation of any differences between the

21  required performance standards and the actual performance

22  standards.

23         (b)  A detailed status report on all outsourcing and

24  privatization initiatives, which must include, at a minimum:

25         1.  A description of the department's progress towards

26  achieving the business objectives, costs, savings, and

27  quantifiable benefits identified in the business case;

28         2.  An update on the department's transition and

29  implementation plan which identifies all resources, including

30  full-time equivalent positions, subject to outsourcing or

31  privatization and therefore placed in reserve until the end of

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    Florida Senate - 2005                                  SB 1476
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 1  the first year of an outsourcing or privatization contract;

 2  and

 3         3.  A list of each outsourcing or privatization

 4  contract, and any subcontracts, identifying the name, legal

 5  domicile, and principal place of business of each contractor

 6  or subcontractor and identifying the physical locations where

 7  contractual services required under the outsourcing or

 8  privatization contracts or subcontracts are being performed.

 9         (c)  The adequacy of resources and internal controls

10  used by each program office and service district to ensure

11  effectiveness and quality of contractual services provided

12  through outsourcing and privatization contracts.

13         (d)  The status of the department's progress in

14  complying with the provisions of this section.

15         Section 2.  The Office of Program Policy Analysis and

16  Government Accountability shall conduct two reviews of the

17  contract-management and accountability structures of the

18  Department of Children and Family Services, including, but not

19  limited to, whether the department is adequately monitoring

20  and managing its outsourced or privatized functions and

21  services. The office shall report its findings and

22  recommendations to the President of the Senate, the Speaker of

23  the House of Representatives, and the Auditor General by

24  February 1 of 2005 and 2007, respectively.

25         Section 3.  Sections 402.72 and 402.73, Florida

26  Statutes, are repealed.

27         Section 4.  This act shall take effect July 1, 2005.

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 1            *****************************************

 2                          SENATE SUMMARY

 3    Requires that the Department of Children and Family
      Services establish a structure for monitoring and
 4    managing contracts with external service providers.
      Requires that the department develop a validated business
 5    case before outsourcing or privatizing any service or
      function. Requires that certain contracts be negotiated
 6    by a certified contract negotiator. Provides limitations
      for the department in amending a contract. Requires that
 7    the department establish contract-management units and a
      contract-management process. Requires that the department
 8    annually report to the Legislature and the Office of
      Program Policy Analysis and Government Accountability.
 9    Requires that the Office of Program Policy Analysis and
      Government Accountability conduct two reviews of the
10    contract-management and accountability structures of the
      department. (See bill for details.)
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