LRB-4310/1
RAC/CMH/ARG:bjk/wlj/cjs/nwn:jf
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.
AB792,1,11 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),
484.06 (2) (a), 84.06 (3), 84.06 (4), 85.015, 102.81 (2), 165.08, 165.25 (11),
5221.0903 (4) (b), 801.02 (1), 803.09 (1) and (2), 804.01 (2) (intro.), 805.04 (2m)
6and 893.981; and to create 16.42 (1) (h), 16.46 (10), 16.705 (1) (a) 3., (b) and (c),
716.705 (2) (a) 3., (b) and (c), 16.705 (4), 16.705 (5g), (5m) and (5r), 16.705 (6) (a),
816.705 (9), 16.75 (1) (a) 4., 16.771, 16.871, 20.932, 66.0902, 84.01 (13m) and
984.06 (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
electronically.
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
the state.
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 1Section 1. 16.42 (1) (h) of the statutes is created to read:
AB792,5,4
116.42 (1) (h) 1. The total amount of contracted positions, including the number
2of service hours and recurring service rate payments, providing services for the
3agency that are paid from the agency's base level funding and an identification of the
4appropriation or appropriations used to fund the contract expenditures.
AB792,5,65 2. The total amount of agency base level funding used to pay for the contracted
6positions under subd. 1.
AB792,5,97 3. The amount of funding requested for contracted positions identified under
8subd. 1 and an identification of the appropriation or appropriations that will be used
9to fund the contracted positions.
AB792, s. 2 10Section 2. 16.46 (10) of the statutes is created to read:
AB792,5,1411 16.46 (10) (a) A statement of the number of contracted positions providing
12services for each state agency that are paid from the agency's base level funding and
13an identification of the appropriation or appropriations used to fund the contracted
14positions.
AB792,5,1615 (b) A statement of the total amount of each state agency's base level funding
16used to pay for the contracted positions.
AB792,5,1917 (c) A statement of the amount of funding requested by state agencies for
18contracted positions and an identification of the appropriation or appropriations that
19will be used to fund the contracted positions.
AB792, s. 3 20Section 3. 16.705 (1) of the statutes is renumbered 16.705 (1) (a) (intro.) and
21amended to read:
AB792,5,2322 16.705 (1) (a) (intro.) The department or its agents may contract for services
23which if at least 2 of the following conditions apply:
AB792,5,24 241. The services can be performed more economically or by contract.
AB792,6,3
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
.
AB792,6,5 4(d) The department shall, by rule, prescribe uniform procedures for
5determining whether services are appropriate for contracting under this subsection.
AB792, s. 4 6Section 4. 16.705 (1) (a) 3., (b) and (c) of the statutes are created to read:
AB792,6,87 16.705 (1) (a) 3. When considering timeliness of delivery, the services can be
8performed more efficiently by contract.
AB792,6,119 (b) Notwithstanding par. (a), the department or its agents may contract for any
10services if the contract will be for a period that is not more than one year and if the
11contract is not eligible for renewal.
AB792,6,1212 (c) No contract under this section may be automatically renewed.
AB792, s. 5 13Section 5. 16.705 (2) of the statutes is renumbered 16.705 (2) (a) (intro.) and
14amended to read:
AB792,6,1715 16.705 (2) (a) (intro.) The department shall promulgate rules for the
16procurement of contractual services by the department and its designated agents,
17including but not limited to rules the following:
AB792,6,19 181. Rules prescribing approval and monitoring processes for contractual service
19contracts.
AB792,7,9 202. Except as provided in par. (b), a requirement for agencies to conduct a
21uniform cost-benefit analysis of each proposed contractual service procurement
22involving an estimated expenditure of more than $25,000 in accordance with
23standards prescribed in the rules, and, except as provided in par. (b), a requirement
24for agencies to review periodically, and before any renewal, the continued
25appropriateness of contracting under each contractual services agreement involving

1an 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
9incidental costs.
AB792,7,18 10(d) Each officer requesting approval to engage any person to perform
11contractual services shall submit to the department written justification for such
12contracting which shall include a description of the contractual services to be
13procured, justification of need, justification for not contracting with other agencies,
14a specific description of the scope of contractual services to be performed, and
15justification for the procurement process if a process other than competitive bidding
16is to be used. The department may not approve any contract for contractual services
17unless it is satisfied that the justification for contracting conforms to the
18requirements of this section and ss. 16.71 to 16.77.
AB792, s. 6 19Section 6. 16.705 (2) (a) 3., (b) and (c) of the statutes are created to read:
AB792,7,2320 16.705 (2) (a) 3. A requirement that each agency that contracts for services
21under this section perform periodic audits on cost-benefit analyses or continued
22appropriateness reviews and contracts that required a cost-benefit analysis or
23continued appropriateness review.
AB792,8,324 (b) A cost-benefit analysis or continued appropriateness review is not required
25for services that federal or state law requires to be performed by contract; services

1that are incidental to the purchase of a commodity; or services that must be provided
2per a contract, license, or warranty by the original equipment manufacturer or
3publisher unless the contract, license, or warranty has expired or is no longer valid.
AB792,8,54 (c) 1. Neither a cost-benefit analysis nor a continued appropriateness review
5may be conducted by contract.
AB792,8,76 2. A cost-benefit analysis may not be shown to a bidder prior to the issuance
7of a letter of intent to contract.
AB792, s. 7 8Section 7. 16.705 (3) (intro.) of the statutes is amended to read:
AB792,8,119 16.705 (3) (intro.) The director of the office of state employment relations
10department, prior to award, under conditions established by rule of the department,
11shall review contracts for contractual services in order to ensure that agencies:
AB792, s. 8 12Section 8. 16.705 (4) of the statutes is created to read:
AB792,8,2213 16.705 (4) Any person submitting a bid or proposal or a labor organization that
14is certified under subch. V of ch. 111 to be the representative of the appropriate
15collective bargaining unit that is aggrieved by a solicitation for bids or by a letter of
16intent to contract may protest to the agency that solicited or awarded the contractual
17services. The protesting party shall file a written notice of intent to protest with, or
18send an electronic notice of intent to protest to, the agency that solicited or awarded
19the contractual services within 7 working days after the solicitation or the letter,
20whichever is appropriate, and shall serve a written or send an electronic protest
21within 12 working days after issuance of the solicitation or the letter, whichever is
22appropriate.
AB792, s. 9 23Section 9. 16.705 (5g), (5m) and (5r) of the statutes are created to read:
AB792,9,3
116.705 (5g) All contracts for contractual services must provide notice of the
2rules promulgated by the division of legal services under sub. (5m) (a) and of the
3requirements under sub. (5r).
AB792,9,5 4(5m) The division of legal services shall promulgate rules on all of the
5following:
AB792,9,96 (a) Actions by the person performing the contractual services that would result
7in the agency for which contractual services are performed recovering any
8expenditures for those contractual services that the agency paid to the person
9performing the contractual services.
AB792,9,1110 (b) Standard performance measures, including quantifiable benchmark
11indicators, to evaluate persons performing contractual services.
AB792,9,1312 (c) Signing bonuses, reimbursements, and per diem costs included in all
13contracts for contractual services.
AB792,9,19 14(5r) (a) 1. If the cost of the contractual services exceeds $25,000, any
15expenditures of the person performing the contractual services that exceed its
16original bid by 10 percent or more may not be paid unless the secretary, using only
17the information provided by the agency for which the contractual services are
18performed, approves payment of the increased amount and provides, in writing, to
19the joint committee on finance his or her rationale for the approval.
AB792,9,2420 2. Subdivision 1. does not apply to contractual services purchased for the
21University of Wisconsin System, or for any University of Wisconsin System campus
22or institution, if the contractual services are for research or instructional purposes,
23as determined by the University of Wisconsin System or the campus or institution,
24whichever is appropriate.
AB792,10,6
1(b) No person performing contractual services under this section may provide
2any salary increase if the salary increase would result in greater expenditures for the
3agency for which the contractual services are performed than the amounts specified
4in the original bid. This restriction under this paragraph on salary increases does
5not apply if the salary increase is in accordance with the terms of a collective
6bargaining agreement.
AB792, s. 10 7Section 10. 16.705 (6) of the statutes is renumbered 16.705 (6) (b) and
8amended to read:
AB792,10,169 16.705 (6) (b) If the agency for which contractual services are performed under
10a contractual services agreement concludes under par. (a) that the performance was
11unsatisfactory, recovers expenditures because the contractor's actions were listed in
12the rules developed under sub. (5m) (a), or concludes
that the performance was
13unsatisfactory based on factors the agency considers, the agency shall file with the
14department an evaluation of stating that the contractor's performance was
15unsatisfactory
within 60 days after the fulfillment of the agreement. The evaluation
16shall be in such form as the secretary may require.
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