HB 0711

1	A bill to be entitled
2	An act relating to procurement; amending s. 287.012, F.S.;
3	providing definitions; creating s. 287.046, F.S.;
4	providing for outsourcing or privatization of functions;
5	providing procedural, contractual, and negotiation
6	requirements; providing contract amendment requirements
7	and limitations; providing requirements for share-in-
8	savings contracts; requiring contracting agencies to
9	annually report to the Governor, the Legislature, and
10	certain entities; providing reporting requirements;
11	requiring the Department of Management Services to
12	annually report to the Governor, Legislature, and certain
13	entities; providing reporting requirements; requiring the
14	Department of Management Services to establish a personnel
15	training program for certain purposes; amending s. 283.33,
16	F.S.; correcting a cross reference; providing an effective
17	date.
18
19	WHEREAS, when appropriately managed, privatization can
20	produce substantial benefits for taxpayers, including saving
21	public dollars and improving service quality, and
22	WHEREAS, the potential benefits of privatization may be
23	lost if privatization initiatives are poorly conceived or
24	implemented, and
25	WHEREAS, careful specification of the services to be
26	provided through privatization and strong systems to monitor
27	contractor performance are needed to avoid service quality
28	problems, higher long-term costs, and disruptions in essential
29	state services, and
30	WHEREAS, the Legislature has found that oversight of state
31	privatization should be strengthened, NOW, THEREFORE,
32
33	Be It Enacted by the Legislature of the State of Florida:
34
35	Section 1.  Subsections (20) through (26) of section
36	287.012, Florida Statutes, are renumbered as subsections (22)
37	through (28), respectively, subsections (27) and (28) are
38	renumbered as subsections (30) and (31), respectively, and new
39	subsections (20), (21), and (29) are added to said section, to
40	read:
41	287.012  Definitions.--As used in this part, the term:
42	(20)  "Outsourcing" means establishing a contractual
43	relationship between an agency and another entity under which
44	the agency remains fully responsible and accountable for the
45	provision of affected services and maintains control over
46	management decisions, while the other entity performs all or
47	part of the function or functions.
48	(21)  "Privatization" means any process aimed at shifting
49	functions and responsibilities, in whole or in part, from the
50	government to the private sector. Privatization may encompass a
51	variety of techniques and activities, such as outsourcing, that
52	promote more involvement of the private sector in providing
53	services that have traditionally been provided by government.
54	(29)  "Share-in-savings contract" means an agreement in
55	which an agency pays a contractor based on the financial
56	benefits derived from the contractor's performance.
57	Section 2.  Section 287.046, Florida Statutes, is created
58	to read:
59	287.046  Outsourcing or privatizing of functions.--No
60	agency may outsource or privatize any function without having or
61	seeking authority except as authorized by general law, the
62	General Appropriations Act, legislation implementing the General
63	Appropriations Act, or special appropriations acts.
64	(1)  Prior to outsourcing or privatizing a function or
65	responsibility, an agency shall develop a business case
66	describing and analyzing the outsourcing or privatization
67	initiative. The business case shall include, but not be limited
68	to, the following information:
69	(a)  A detailed description of the function to be outsourced
70	or privatized, a description and analysis of the agency's current
71	performance, a rationale for the proposed outsourcing or
72	privatization initiative, and a citation to the existing or
73	proposed legal authority for outsourcing or privatizing the
74	function or responsibility.
75	(b)  A cost-benefit analysis describing the current direct
76	and indirect costs of the program or services, an analysis
77	demonstrating the potential savings or increased costs that are
78	expected to occur under privatization or outsourcing, and a
79	sensitivity analysis identifying critical factors that could
80	affect the potential savings and the effect of changes in these
81	factors on costs and benefits of the proposal.
82	(c)  The process the agency plans to use to monitor
83	contractor performance and the estimated monitoring costs the
84	agency will incur for this monitoring.
85	(d)  A contingency plan specifying methods and mechanisms
86	to resolve any situation in which the contractor is found to be
87	not complying with its contract.
88	(e)  A list of state assets that would be transferred to
89	the contractor if privatization or outsourcing is implemented.
90	(2)  The agency shall submit the business case for each
91	privatization or outsourcing proposal to the Legislative Budget
92	Commission for approval prior to entering into a contract with a
93	contractor. Upon the approval of the Legislative Budget
94	Commission, the agency may enter into a contract with the
95	contractor.
96	(3)  Agencies shall enter into contracts for each
97	privatization and outsourcing initiative. At a minimum, the
98	contract shall include:
99	(a)  Performance measures and standards, including output and
100	outcome measures as defined in s. 216.011 and unit cost measures
101	representing the costs of producing an output or outcome. The term
102	"unit cost" means the average total cost of producing a single
103	unit of output, for goods and services, for a specific agency
104	activity, as defined in legislative budget instructions required
105	by s. 216.023.
106	(b)  Incentives and penalties to encourage contractor
107	compliance with contract terms and the achievement of expected
108	performance results, including high-quality and cost-effective
109	services to the citizens of this state.
110	(c)  Provisions providing access to contractor data by
111	government agencies and the public as follows:
112	1.  A contractor must make available for review any record
113	the contractor produces or collects related to the provision of a
114	state function or service to the same extent those records would
115	be available from a state agency by a public records request.
116	2.  A contractor must maintain confidentiality of records
117	which are exempt from public records requests or otherwise
118	confidential and exempt under law.
119	(d)  Reporting of progress in achieving performance standards
120	and outcomes specified in the contract.
121	(e)  A requirement that the contractor provide access for
122	the contracting agency's inspector general, the Office of
123	Program Policy Analysis and Government Accountability, the
124	Auditor General, and the Department of Financial Services to all
125	records of the contractor related to the services being
126	provided, as needed for a properly authorized audit,
127	examination, or investigation.
128	(4)  When the value of an outsourcing or privatization
129	contract is in excess of $1 million, at least one of the persons
130	conducting negotiations must be trained in negotiation.
131	(5)  The agency may not amend a contract for an approved
132	privatization or outsourcing initiative without first submitting
133	the proposed amendment to the Legislative Budget Commission for
134	approval if:
135	(a)  The effect of the amendment would be to expand the
136	financial terms or conditions, or the duration of the contract.
137	(b)1.  The total dollar amount to be paid is increased by
138	10 percent or more; or
139	2.  A contract performance date or the contract service
140	ending date is extended by 1 year or more.
141
142	Upon the approval of the amendment by the Legislative Budget
143	Commission, the agency may amend the contract.
144	(6)  Privatization or outsourcing initiatives that involve
145	a share-in-savings contract must include:
146	(a)  A description of the methodology that will be used to
147	calculate savings to the state and payments to a contractor
148	under the contract.
149	(b)  Quantifiable baseline data that will be used to
150	establish the basis upon which the percentage of savings paid to
151	a contractor will be determined.
152	(7)(a)  An agency shall annually furnish the President of
153	the Senate, the Speaker of the House of Representatives, the
154	Legislative Budget Commission, and the Office of Program Policy
155	Analysis and Government Accountability a report on all its
156	current outsourcing or privatization contracts that describes
157	the progress made in implementing each outsourcing or
158	privatization effort and the contractor's performance in
159	achieving contractually specified performance standards. Part of
160	this report must also include information on the extent to which
161	work formerly performed in this state by state employees is
162	being performed in other states or out of country as a result of
163	the outsourcing or privatization initiative.
164	(b)  The Department of Management Services shall annually
165	furnish the President of the Senate, the Speaker of the House of
166	Representatives, the Legislative Budget Commission, and the
167	Office of Program Policy Analysis and Government Accountability
168	a report that summarizes agency reports required by this
169	section. As part of its report, the department shall identify
170	lessons learned from agency initiatives in outsourcing and
171	privatizing government programs and recommend areas for
172	improvement in developing contracts and monitoring contractor
173	performance.
174	(8)  The Department of Management Services shall establish
175	a program to train state agency contracting personnel in best
176	practices for contract development, negotiation, and monitoring.
177	Part of that training must include curriculum to create a
178	certified negotiator program.
179	Section 3.  Subsection (1) of section 283.33, Florida
180	Statutes, is amended to read:
181	283.33  Printing of publications; lowest bidder awards.--
182	(1)  Publications may be printed and prepared in-house, by
183	another agency or the Legislature, or purchased on bid,
184	whichever is more economical and practicable as determined by
185	the agency. An agency may contract for binding separately when
186	more economical or practicable, whether or not the remainder of
187	the printing is done in-house. A vendor may subcontract for
188	binding and still be considered a responsible vendor,
189	notwithstanding s. 287.012(26)(24).
190	Section 4.  This act shall take effect July 1, 2005.

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