2009 - 2010 LEGISLATURE
March 2, 2010 - Introduced by Representatives Jorgensen, Barca, Mason, Roys,
Vruwink, Berceau, Cullen, Hilgenberg, Hixson, Milroy, Molepske Jr.,
Pasch, Pocan, Pope-Roberts, Sinicki, Smith, Turner, Zepnick and Grigsby,
cosponsored by Senators Lassa, Carpenter, Coggs, Darling, Hansen,
Holperin, Kreitlow, Lehman, Risser, Taylor, Vinehout, Wirch and Ellis.
Referred to Committee on Labor.
1An Act to renumber and amend
16.705 (1), 16.705 (2), 16.705 (6) and 16.87 (2); 2to amend
16.705 (3) (intro.), 16.705 (7), 16.705 (8) (a), 16.75 (1) (b), 16.75 (2m) 3
(b), 16.75 (6) (c), 23.41 (5), 25.18 (1) (a), 25.18 (1) (f), 25.18 (1) (m), 84.01 (13), 4
84.06 (2) (a), 84.06 (3), 84.06 (4), 85.015, 102.81 (2), 165.08, 165.25 (11), 5
221.0903 (4) (b), 801.02 (1), 803.09 (1) and (2), 804.01 (2) (intro.), 805.04 (2m) 6
and 893.981; and to create
16.42 (1) (h), 16.46 (10), 16.705 (1) (a) 3., (b) and (c), 7
16.705 (2) (a) 3., (b) and (c), 16.705 (4), 16.705 (5g), (5m) and (5r), 16.705 (6) (a), 8
16.705 (9), 16.75 (1) (a) 4., 16.771, 16.871, 20.932, 66.0902, 84.01 (13m) and 9
84.06 (13) of the statutes; relating to: state contractual services and false
10claims submitted to state and local governments, requiring the exercise of
11rule-making authority, and providing penalties.
Analysis by the Legislative Reference Bureau
Currently, the Department of Administration (DOA) or any state agency to
which DOA delegates purchasing authority may contract for services if the services
can be performed more efficiently or economically by contract than by state
employees. This bill allows contracting for services if at least two of the following
three conditions are met: 1) The services may be performed more economically by
contract than by state employees; 2) When considering expertise, the services can be
performed more efficiently by contract than by use of current full-time state
positions; or 3) When considering timeliness, the services can be performed more
efficiently by contract than by state employees. If the estimated cost of the services
exceeds $25,000, DOA must solicit bids or competitive sealed proposals. Under
current law, DOA must provide notice of the solicitation and the notice may be
provided either by a class 2 notice or on an Internet site determined by DOA. Under
this bill the notice must provided on the Internet site determined by DOA and may
be posted as a class 2 notice.
Currently, under rules promulgated by DOA, certain persons aggrieved by a
solicitation for, or an award of, a contract have five days from the solicitation or
award to file a notice of intent to protest with the agency soliciting the services or
awarding the contract and ten days to serve that agency with the written protest.
This bill extends the time to file a notice of intent to protest to seven working days
and the time to file a protest to 12 working days and permits both to be done
Under current law, if a state agency enters into or renews a contract for services
that involves an estimated expenditure of more than $25,000, the agency must
conduct either a uniform cost-benefit analysis, for a new contract, or a continued
appropriateness review, for a contract renewal. This bill requires a cost-benefit
analysis or continued appropriateness review to consider all relevant costs including
salaries and benefits, training requirements, liability insurance, overhead, facility
costs, and taxes. Under this bill, no cost-benefit analysis may be shown to any bidder
until a letter of intent to contract has been issued. This bill generally requires that,
if a contract is for more than $25,000, any expenditures of the contractor that exceed
the bid by more than 10 percent may be paid only if the secretary of administration
approves payment of the increased amount and submits to the Joint Committee on
Finance (JCF) his or her rationale for approval. In addition, this bill requires each
contracting agency to perform periodic audits on its cost-benefit analyses and
continued appropriateness reviews and on its subsequent contracts.
The bill requires the Division of Legal Services in DOA to develop standard
performance measures, as well as benchmark indicators, to evaluate services
performed by contract for a state agency and to determine what actions taken by the
contractor would result in the state agency recovering the expenditures it paid to the
contractor. The division also must promulgate rules on signing bonuses,
reimbursements, and per diem costs for such contracts.
Under current law, if a state agency for which services are performed concludes
that the services were unsatisfactory, the agency must file an evaluation with DOA,
and DOA must ensure that future contracts are not awarded to contractors whose
past performance was unsatisfactory. This bill adds that a state agency must file an
evaluation with DOA if the contractual services are unsatisfactory according to the
standard performance measures or benchmark indicators developed by the Division
of Legal Services or if the state agency recovers expenditures from the contractor
under the guidelines developed by the Division of Legal Services.
Currently, if a contractor or vendor does business with this state or a local
government, the terms of the contract or order govern the performance of, and the
price to be paid to, the contractor or vendor. If the contractor or vendor claims
payment for materials, supplies, equipment, or services that are not provided in
accordance with the contract or order, or at a price that is different from the price
specified in the contract or order, the state or a local government has a remedy
against the contractor or vendor for breach of contract. If the contractor or vendor
is asked to swear to the truth of a claim for payment and the claim is false, the
contractor or vendor may be prosecuted for false swearing. Currently, except with
regard to medical assistance, a private person has no means to recover, on behalf of
the state, damages sustained by the state as a result of a fraud committed against
This bill provides that whoever knowingly presents or causes to be presented
a false claim under any contract or order for materials, supplies, equipment, or
services to be provided to a state agency is subject to a forfeiture (civil penalty) of not
less than $5,000 nor more than $10,000, plus three times the amount of the damages
that were sustained by the state or would have been sustained by the state,
whichever is greater, as a result of the false claim. The bill permits the attorney
general to bring an action to recover any forfeiture for which a contractor or vendor
is liable as a result of a false claim submitted to a state agency. This bill contains
similar provisions that apply to local governmental units.
The bill creates separate prohibitions against state contractors, grantees,
vendors, and other recipients of state resources who knowingly commit certain
fraudulent acts against the state. The bill makes these persons liable for treble the
amount of damages sustained by the state resulting from such acts and imposes
additional forfeitures of not less than $5,000 nor more than $10,000 for each
violation. The bill permits the attorney general to pursue an alternate remedy, such
as an administrative remedy, against an alleged offender in lieu of an action in court.
With certain exceptions, the bill provides that a person who brings an action on
behalf of the state is entitled to receive his or her reasonable expenses of bringing the
action, including his or her costs and reasonable, actual attorney fees, which are
assessed against the defendant.
The bill entitles an employee to all relief to make the employee whole if the
employee is discriminated against by an employer as a result of lawful actions the
employee took to further the investigation of any act of fraud, as defined in the bill,
the employer committed against the state. Under the bill, the relief may include
reinstatement and double back pay with interest from the time of any discharge to
the time of reinstatement. The bill also permits the employee to recover any costs,
including reasonable, actual attorney fees, from his or her employer.
This bill also does all of the following relating to state contracts:
1. Requires executive branch state agencies to submit to DOA and the
Legislative Fiscal Bureau, by September 15 of the even-numbered year, information
on the number of contracted positions, including the number of service hours and
recurring service rate payments, providing services for the agency that are paid from
the agency's base level funding and an identification of the appropriation or
appropriations used to fund the contracted positions; the total amount of agency base
level funding used to pay for the contracted positions; and the amount of funding
requested for contracted positions and an identification of the appropriation or
appropriations that will be used to fund the contracted positions.
2. Requires the secretary of administration to include in the biennial budget
report all of the information specified in Item 1.
3. Provides that if in any fiscal year an executive branch agency is prohibited
from hiring employees to fill vacant positions or its employees are required to serve
an unpaid leave of absence, the agency may not enter into, renew, or extend any
contractual services contracts with private contractors or consultants for the
remainder of that fiscal year for the performance of services of agency employees who
would have performed the services had they been hired or had they not have been
required to take an unpaid leave of absence. This provision, however, does not apply
to certain contracts of the Office of the State Public Defender, as well as certain
contractual services contracts funded with federal economic stimulus funds. The bill
further provides that an agency may submit a written request to the JCF to exempt
an agency with respect to a specific contractual services contract. If the
cochairpersons of JCF do not notify the agency within 14 working days after the date
of the agency's submittal that JCF intends to schedule a meeting to review the
request, approval of the request is granted. If, within 14 working days after the date
of the agency's request submittal, the cochairpersons notify the agency that JCF
intends to schedule a meeting to review the request, the request may be granted only
as approved by JCF.
The bill specifically impacts the Department of Transportation (DOT) in
several ways. Under the bill, with respect to DOT's contractual engagement of
engineering, consulting, surveying, and other specialized services (engineering
services), DOT is subject to certain provisions of state procurement law relating to
contractual services from which, under current law, DOT is exempt. The bill also
requires DOT to use DOT employees to conduct all tests of concrete thickness on its
highway improvement projects. Under the bill, DOT must submit a report to JCF
containing recommendations on actions that DOT and local governments can take
to improve the efficiency, cost-effectiveness, and timeliness of local road construction
projects and proposed legislative changes to implement these recommendations.
DOT must also annually submit a report to the governor, JCF, the Joint Legislative
Audit Committee, and the appropriate legislative standing committees relating to
its contractual engagement of engineering services.
For further information see the state and local fiscal estimate, which will be
printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB792, s. 1
16.42 (1) (h) of the statutes is created to read:
(h) 1. The total amount of contracted positions, including the number 2
of service hours and recurring service rate payments, providing services for the 3
agency that are paid from the agency's base level funding and an identification of the 4
appropriation or appropriations used to fund the contract expenditures.
2. The total amount of agency base level funding used to pay for the contracted 6
positions under subd. 1.
3. The amount of funding requested for contracted positions identified under 8
subd. 1 and an identification of the appropriation or appropriations that will be used 9
to fund the contracted positions.
AB792, s. 2
16.46 (10) of the statutes is created to read:
(a) A statement of the number of contracted positions providing 12
services for each state agency that are paid from the agency's base level funding and 13
an identification of the appropriation or appropriations used to fund the contracted 14
(b) A statement of the total amount of each state agency's base level funding 16
used to pay for the contracted positions.
(c) A statement of the amount of funding requested by state agencies for 18
contracted positions and an identification of the appropriation or appropriations that 19
will be used to fund the contracted positions.
AB792, s. 3
16.705 (1) of the statutes is renumbered 16.705 (1) (a) (intro.) and 21
amended to read:
(a) (intro.) The department or its agents may contract for services 23which if at least 2 of the following conditions apply:
241. The services
can be performed more economically
or by contract.
12. When considering expertise of the current full-time positions, whether filled
2or vacant, the services can be performed more
efficiently by such
contract than by use
3of employees in those positions
The department shall, by rule, prescribe uniform procedures for 5
determining whether services are appropriate for contracting under this subsection.
AB792, s. 4
16.705 (1) (a) 3., (b) and (c) of the statutes are created to read:
(a) 3. When considering timeliness of delivery, the services can be 8
performed more efficiently by contract.
(b) Notwithstanding par. (a), the department or its agents may contract for any 10
services if the contract will be for a period that is not more than one year and if the 11
contract is not eligible for renewal.
(c) No contract under this section may be automatically renewed.
AB792, s. 5
16.705 (2) of the statutes is renumbered 16.705 (2) (a) (intro.) and 14
amended to read:
(a) (intro.) The department shall promulgate rules for the 16
procurement of contractual services by the department and its designated agents, 17
including but not limited to rules the following:
prescribing approval and monitoring processes for contractual service 19
202. Except as provided in par. (b)
, a requirement for agencies to conduct a 21
uniform cost-benefit analysis of each proposed contractual service procurement 22
involving an estimated expenditure of more than $25,000 in accordance with 23
standards prescribed in the rules, and, except as provided in par. (b),
a requirement 24
for agencies to review periodically, and before any renewal, the continued 25
appropriateness of contracting under each contractual services agreement involving
an estimated expenditure of more than $25,000. The rules shall require the
2cost-benefit analysis or continued appropriateness review to compare the costs of
3using a current employee who is providing, or who would provide, the service, or a
4similarly situated employee if the current position is vacant, to the costs of using an
5employee under a contract and shall require the comparison to include all relevant
6costs including the salary and fringe benefit costs, costs of any training that will be
7necessary to fulfill the task, materials, inspections, unemployment insurance,
8transitional costs, liability insurance, overhead, facility costs, taxes, and other
Each officer requesting approval to engage any person to perform 11
contractual services shall submit to the department written justification for such 12
contracting which shall include a description of the contractual services to be 13
procured, justification of need, justification for not contracting with other agencies, 14
a specific description of the scope of contractual services to be performed, and 15
justification for the procurement process if a process other than competitive bidding 16
is to be used. The department may not approve any contract for contractual services 17
unless it is satisfied that the justification for contracting conforms to the 18
requirements of this section and ss. 16.71 to 16.77.
AB792, s. 6
16.705 (2) (a) 3., (b) and (c) of the statutes are created to read:
(a) 3. A requirement that each agency that contracts for services 21
under this section perform periodic audits on cost-benefit analyses or continued 22
appropriateness reviews and contracts that required a cost-benefit analysis or 23
continued appropriateness review.
(b) A cost-benefit analysis or continued appropriateness review is not required 25
for services that federal or state law requires to be performed by contract; services
that are incidental to the purchase of a commodity; or services that must be provided 2
per a contract, license, or warranty by the original equipment manufacturer or 3
publisher unless the contract, license, or warranty has expired or is no longer valid.
(c) 1. Neither a cost-benefit analysis nor a continued appropriateness review 5
may be conducted by contract.