CMH/ARG/RAC:bjk/nwn/cjs:ph
2009 - 2010 LEGISLATURE
ASSEMBLY SUBSTITUTE AMENDMENT 2,
TO 2009 ASSEMBLY BILL 792
April 6, 2010 - Offered by Representative Jorgensen.
AB792-ASA2,1,11 1An Act to renumber and amend 16.705 (1), 16.705 (2), 16.705 (6) and 16.87 (2);
2to amend 16.705 (7), 16.705 (8) (a), 16.75 (1) (b), 16.75 (2m) (b), 16.75 (6) (c),
325.18 (1) (a), 25.18 (1) (f), 25.18 (1) (m), 84.01 (13), 84.01 (31), 84.06 (2) (a), 84.06
4(3), 84.06 (4), 85.015, 102.81 (2), 103.50 (2), 165.08, 165.25 (11), 221.0903 (4) (b),
5801.02 (1), 803.09 (1) and (2), 804.01 (2) (intro.), 805.04 (2m) and 893.981; and
6to create 16.42 (1) (h), 16.46 (10), 16.705 (1) (a) 3., (b) and (c), 16.705 (2) (a) 3.,
7(b) and (c), 16.705 (4), 16.705 (5g), (5m) and (5r), 16.705 (6) (a), 16.705 (8) (am),
816.705 (9), 16.75 (1) (a) 4., 16.771, 16.871, 20.932, 66.0902, 84.01 (13m) and
985.65 of the statutes; relating to: state contractual services and false claims
10submitted to state and local governments, requiring the exercise of
11rule-making authority, and providing penalties.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB792-ASA2, s. 1
1Section 1. 16.42 (1) (h) of the statutes is created to read:
AB792-ASA2,2,112 16.42 (1) (h) 1. The total amount of contracted positions, including the number
3of service hours and recurring service rate payments, providing services for the
4agency that are paid from the agency's base level funding and an identification of the
5appropriation or appropriations used to fund the contract expenditures. In
6preparing this information, agencies shall use actual salary and service hour data,
7if available. If such data are not available, the agency may use estimates. Any
8estimate relying on state employee salary data for comparable work shall be
9accompanied by a detailed statement explaining why the use of state employee
10salary data is necessary and why such use does not misrepresent the salaries paid
11for contracted positions.
AB792-ASA2,2,1312 2. The total amount of agency base level funding used to pay for the contracted
13positions under subd. 1.
AB792-ASA2,2,1614 3. The amount of funding requested for contracted positions identified under
15subd. 1 and an identification of the appropriation or appropriations that will be used
16to fund the contracted positions.
AB792-ASA2, s. 2 17Section 2. 16.46 (10) of the statutes is created to read:
AB792-ASA2,2,2118 16.46 (10) (a) A statement of the number of contracted positions providing
19services for each state agency that are paid from the agency's base level funding and
20an identification of the appropriation or appropriations used to fund the contracted
21positions.
AB792-ASA2,2,2322 (b) A statement of the total amount of each state agency's base level funding
23used to pay for the contracted positions.
AB792-ASA2,3,3
1(c) A statement of the amount of funding requested by state agencies for
2contracted positions and an identification of the appropriation or appropriations that
3will be used to fund the contracted positions.
AB792-ASA2, s. 3 4Section 3. 16.705 (1) of the statutes is renumbered 16.705 (1) (a) (intro.) and
5amended to read:
AB792-ASA2,3,76 16.705 (1) (a) (intro.) The department or its agents may contract for services
7which if at least 2 of the following conditions apply:
AB792-ASA2,3,8 81. The services can be performed more economically or by contract.
AB792-ASA2,3,11 92. When considering expertise of the current full-time positions, whether filled
10or vacant, the services can be performed more
efficiently by such contract than by use
11of employees in those positions
.
AB792-ASA2,3,13 12(d) The department shall, by rule, prescribe uniform procedures for
13determining whether services are appropriate for contracting under this subsection.
AB792-ASA2, s. 4 14Section 4. 16.705 (1) (a) 3., (b) and (c) of the statutes are created to read:
AB792-ASA2,3,1615 16.705 (1) (a) 3. When considering timeliness of delivery, the services can be
16performed more efficiently by contract.
AB792-ASA2,3,1917 (b) Notwithstanding par. (a), the department or its agents may contract for any
18services if the contract will be for a period that is not more than one year and if the
19contract is not eligible for renewal.
AB792-ASA2,3,2020 (c) No contract under this section may be automatically renewed.
AB792-ASA2, s. 5 21Section 5. 16.705 (2) of the statutes is renumbered 16.705 (2) (a) (intro.) and
22amended to read:
AB792-ASA2,3,2523 16.705 (2) (a) (intro.) The department shall promulgate rules for the
24procurement of contractual services by the department and its designated agents,
25including but not limited to rules the following:
AB792-ASA2,4,2
11. Rules prescribing approval and monitoring processes for contractual service
2contracts.
AB792-ASA2,4,17 32. Except as provided in par. (b), a requirement for agencies to conduct a
4uniform cost-benefit analysis of each proposed contractual service procurement
5involving an estimated expenditure of more than $25,000 $50,000 in accordance with
6standards prescribed in the rules, and, except as provided in par. (b), a requirement
7for agencies to review periodically, and before any renewal, the continued
8appropriateness of contracting under each contractual services agreement involving
9an estimated expenditure of more than $25,000 $50,000. The rules shall require the
10cost-benefit analysis or continued appropriateness review to compare the costs of
11using a current employee who is providing, or who would provide, the service, or a
12similarly situated employee if the current position is vacant, to the costs of using an
13employee under a contract and shall require the comparison to include all relevant
14costs including the salary and fringe benefit costs, costs of any training that will be
15necessary to fulfill the task, materials, inspections, unemployment insurance,
16transitional costs, liability insurance, overhead, facility costs, taxes, and other
17incidental costs
.
AB792-ASA2,5,2 18(d) Each officer requesting approval to engage any person to perform
19contractual services shall submit to the department written justification for such
20contracting which shall include a description of the contractual services to be
21procured, justification of need, justification for not contracting with other agencies,
22a specific description of the scope of contractual services to be performed, and
23justification for the procurement process if a process other than competitive bidding
24is to be used. The department may not approve any contract for contractual services

1unless it is satisfied that the justification for contracting conforms to the
2requirements of this section and ss. 16.71 to 16.77.
AB792-ASA2, s. 6 3Section 6. 16.705 (2) (a) 3., (b) and (c) of the statutes are created to read:
AB792-ASA2,5,74 16.705 (2) (a) 3. A requirement that each agency that contracts for services
5under this section perform periodic audits on cost-benefit analyses or continued
6appropriateness reviews and contracts that required a cost-benefit analysis or
7continued appropriateness review.
AB792-ASA2,5,98 (b) 1. A cost-benefit analysis or continued appropriateness review is not
9required for the following services:
AB792-ASA2,5,1010 a. Services that federal or state law requires to be performed by contract.
AB792-ASA2,5,1111 b. Services that are incidental to the purchase of a commodity.
AB792-ASA2,5,1412 c. Services that are substantially dissimilar to services performed by state
13employees or that state employees have not performed historically and are not able
14to perform without significant retraining or investment in infrastructure or capital.
AB792-ASA2,5,1715 d. Services that must be provided per a contract, license, or warranty by the
16original equipment manufacturer or publisher unless the contract, license, or
17warranty has expired or is no longer valid.
AB792-ASA2,5,2118 2. If an agency is exempted from the cost-benefit analysis or continued
19appropriateness review under subd. 1. c. only, the department must include in the
20report submitted under sub. (8) the services that the agency determined were exempt
21under subd. 1. c.
AB792-ASA2,5,2322 (c) 1. Neither a cost-benefit analysis nor a continued appropriateness review
23may be conducted by contract.
AB792-ASA2,5,2524 2. A cost-benefit analysis may not be shown to a bidder prior to the issuance
25of a letter of intent to contract.
AB792-ASA2, s. 7
1Section 7. 16.705 (4) of the statutes is created to read:
AB792-ASA2,6,112 16.705 (4) Any person submitting a bid or proposal or a labor organization that
3is certified under subch. V or VI of ch. 111 to be the representative of the appropriate
4collective bargaining unit that is aggrieved by a solicitation for bids or by a letter of
5intent to contract may protest to the agency that solicited or awarded the contractual
6services. The protesting party shall file a written notice of intent to protest with, or
7send an electronic notice of intent to protest to, the agency that solicited or awarded
8the contractual services within 7 working days after the solicitation or the letter,
9whichever is appropriate, and shall serve a written or send an electronic protest
10within 12 working days after issuance of the solicitation or the letter, whichever is
11appropriate.
AB792-ASA2, s. 8 12Section 8. 16.705 (5g), (5m) and (5r) of the statutes are created to read:
AB792-ASA2,6,1513 16.705 (5g) All contracts for contractual services must provide notice of the
14rules promulgated by the division of legal services under sub. (5m) (a) and of the
15requirements under sub. (5r).
AB792-ASA2,6,17 16(5m) The division of legal services shall promulgate rules on all of the
17following:
AB792-ASA2,6,2118 (a) Actions by the person performing the contractual services that would result
19in the agency for which contractual services are performed recovering any
20expenditures for those contractual services that the agency paid to the person
21performing the contractual services.
AB792-ASA2,6,2322 (b) Standard performance measures, including quantifiable benchmark
23indicators, to evaluate persons performing contractual services.
AB792-ASA2,6,2524 (c) Signing bonuses, reimbursements, and per diem costs included in all
25contracts for contractual services.
AB792-ASA2,7,6
1(5r) (a) 1. If the cost of the contractual services exceeds $25,000, any
2expenditures of the person performing the contractual services that exceed its
3original bid by 10 percent or more may not be paid unless the agency for which the
4contractual services are performed notifies the governor and the joint committee on
5finance the amount by which the cost exceeds the original bid and the reason for the
6increase.
AB792-ASA2,7,117 2. Subdivision 1. does not apply to contractual services purchased for the
8University of Wisconsin System, or for any University of Wisconsin System campus
9or institution, if the contractual services are for research or instructional purposes,
10as determined by the University of Wisconsin System or the campus or institution,
11whichever is appropriate.
AB792-ASA2,7,1712 (b) No person performing contractual services under this section may provide
13any salary increase if the salary increase would result in greater expenditures for the
14agency for which the contractual services are performed than the amounts specified
15in the original bid. This restriction under this paragraph on salary increases does
16not apply if the salary increase is in accordance with the terms of a collective
17bargaining agreement.
AB792-ASA2, s. 9 18Section 9. 16.705 (6) of the statutes is renumbered 16.705 (6) (b) and amended
19to read:
AB792-ASA2,8,220 16.705 (6) (b) If the agency for which contractual services are performed under
21a contractual services agreement concludes under par. (a) that the performance was
22unsatisfactory, recovers expenditures because the contractor's actions were listed in
23the rules developed under sub. (5m) (a), or concludes
that the performance was
24unsatisfactory based on factors the agency considers, the agency shall file with the
25department an evaluation of stating that the contractor's performance was

1unsatisfactory
within 60 days after the fulfillment of the agreement. The evaluation
2shall be in such form as the secretary may require.
AB792-ASA2, s. 10 3Section 10. 16.705 (6) (a) of the statutes is created to read:
AB792-ASA2,8,74 16.705 (6) (a) An agency for which contractual services are performed under
5a contractual services agreement shall evaluate the contractual services using the
6standard performance measures and benchmark indicators created under sub. (5m)
7(b). No contract may be renewed until the agency completes the evaluation.
AB792-ASA2, s. 11 8Section 11. 16.705 (7) of the statutes is amended to read:
AB792-ASA2,8,129 16.705 (7) The department shall review evaluations submitted under sub. (6)
10(b) and promulgate rules prescribing procedures to assure that future contracts for
11contractual services are not awarded to contractors whose past performance is found
12to be unsatisfactory, to the extent feasible.
AB792-ASA2, s. 12 13Section 12. 16.705 (8) (a) of the statutes is amended to read:
AB792-ASA2,8,1514 16.705 (8) (a) A summary of the cost-benefit analyses completed by agencies
15in compliance with rules promulgated by the department under sub. (2) (a).
AB792-ASA2, s. 13 16Section 13. 16.705 (8) (am) of the statutes is created to read:
AB792-ASA2,8,1917 16.705 (8) (am) As provided under sub. (2) (b) 2., any services on which agencies
18would have had to perform a cost-benefit analysis or a continued appropriateness
19review but for the exemption under sub. (2) (b) 1. c.
AB792-ASA2, s. 14 20Section 14. 16.705 (9) of the statutes is created to read:
AB792-ASA2,8,2321 16.705 (9) (a) In this subsection, "federal economic stimulus funds" means
22federal moneys received by the state, pursuant to federal legislation enacted during
23the 111th Congress for the purpose of reviving the economy of the United States.
AB792-ASA2,9,524 (b) Except as provided in pars. (c) and (d), if in any fiscal year an agency in the
25executive branch is prohibited from hiring employees to fill vacant positions or its

1employees are required to serve an unpaid leave of absence, the agency may not enter
2into, renew, or extend any contractual services contracts with private contractors or
3consultants for the remainder of that fiscal year for the performance of services of
4agency employees who would have performed the services had they been hired or had
5they not have been required to take an unpaid leave of absence.
AB792-ASA2,9,126 (c) Paragraph (b) shall not apply to contractual services contracts that are
7funded with federal economic stimulus funds and the secretary determines that any
8deadlines imposed by the federal government on the expenditure of the federal
9economic stimulus funds cannot be met without an agency's entering into, renewing,
10or extending a contractual services contract or a cost-benefit analysis is conducted
11that demonstrates that a contractual services contract would be more cost effective
12and efficient than having state employees perform the services.
AB792-ASA2,9,1413 (cm) Paragraph (b) shall not apply to contracts entered into, renewed, or
14extended under s. 977.08.
AB792-ASA2,9,2315 (d) An agency in the executive branch may submit a written request to the joint
16committee on finance to have par. (b) not apply to the agency with respect to a specific
17contractual services contract. If the cochairpersons of the committee do not notify
18the agency within 14 working days after the date of the agency's submittal that the
19committee intends to schedule a meeting to review the request, approval of the
20request is granted. If, within 14 working days after the date of the agency's request
21submittal, the cochairpersons of the committee notify the agency that the committee
22intends to schedule a meeting to review the request, the request may be granted only
23as approved by the committee.
AB792-ASA2, s. 15 24Section 15. 16.75 (1) (a) 4. of the statutes is created to read:
AB792-ASA2,9,25
116.75 (1) (a) 4. The contracting agency shall electronically send the successful
2bidder a letter of intent to contract and shall send electronic copies of the letter to all
3other bidders.
AB792-ASA2, s. 16 4Section 16. 16.75 (1) (b) of the statutes is amended to read:
AB792-ASA2,10,195 16.75 (1) (b) When the estimated cost exceeds $25,000, the department shall
6invite bids to be submitted. The department either shall either solicit sealed bids to
7be opened publicly at a specified date and time, or shall solicit bidding by auction to
8be conducted electronically at a specified date and time. Whenever bids are invited,
9due notice inviting bids shall may be published as a class 2 notice, under ch. 985 or,
10and notice inviting bids, including a copy of all documents soliciting bids, shall be

11posted on the Internet at a site determined or approved by the department. The bid
12opening or auction shall occur at least 7 days after the date of the last insertion of
13the notice or
at least 7 days after the date of posting on the Internet. The notice under
14ch. 985, if applicable, and the Internet site
shall specify whether sealed bids are
15invited or bids will be accepted by auction, and shall give a clear description of the
16materials, supplies, equipment, or contractual services to be purchased, the amount
17of any bond, share draft, check, or other draft to be submitted as surety with the bid
18or prior to the auction, and the date and time that the public opening or the auction
19will be held.
AB792-ASA2, s. 17 20Section 17. 16.75 (2m) (b) of the statutes is amended to read:
AB792-ASA2,11,521 16.75 (2m) (b) When the estimated cost exceeds $25,000, the department may
22invite competitive sealed proposals by publishing a class 2 notice under ch. 985 or by
23posting
and shall post notice, including all documents soliciting proposals, on the
24Internet at a site determined or approved by the department. The notice under ch.
25985, if applicable, and the notice on the Internet site
shall describe the materials,

1supplies, equipment, or contractual services to be purchased, the intent to make the
2procurement by solicitation of proposals rather than by solicitation of bids, any
3requirement for surety, and the date the proposals will be opened, which shall be at
4least 7 days after the date of the last insertion of the notice or
at least 7 days after
5the date of posting on the Internet.
AB792-ASA2, s. 18 6Section 18. 16.75 (6) (c) of the statutes is amended to read:
AB792-ASA2,11,197 16.75 (6) (c) If the secretary determines that it is in the best interest of this state
8to do so, he or she may, with the approval of the governor, waive the requirements
9of subs. (1) to (5) and may purchase supplies, material, equipment, or contractual
10services, other than printing and stationery, from a private source other than a
11source specified in par. (b). Except as provided in sub. (2g) (c), if the cost of the
12purchase is expected to exceed $25,000, the department shall may first publish a
13class 2 notice under ch. 985 or and shall post a notice on the Internet at the site
14determined or approved by the department under sub. (1) (b) describing the
15materials, supplies, equipment, or contractual services to be purchased, stating the
16intent to make the purchase from a private source without soliciting bids or
17competitive sealed proposals and stating the date on which the contract or purchase
18order will be awarded. The date of the award shall be at least 7 days after the date
19of the last insertion or
the date of posting on the Internet.
AB792-ASA2, s. 19 20Section 19. 16.771 of the statutes is created to read:
AB792-ASA2,11,22 2116.771 False claims. (1) In this section, "contract" means any of the
22following:
AB792-ASA2,11,2323 (a) Contracts or orders that are subject to s. 16.705.
AB792-ASA2,12,3
1(b) Contracts or orders entered into for projects that are subject to s. 103.49 or
2103.50 if the party presenting the false claim is alleged to have failed to comply with
3s. 103.49 or 103.50.
AB792-ASA2,12,10 4(2) Whoever knowingly presents or causes to be presented a false claim for
5payment under a contract for materials, supplies, equipment, or services to be
6provided to an agency shall forfeit not less than $5,000 nor more than $10,000, plus
73 times the amount of the damages that were sustained by the state or would have
8been sustained by the state, whichever is greater, as a result of the false claim. The
9attorney general may bring an action on behalf of the state to recover any forfeiture
10incurred under this section.
AB792-ASA2, s. 20 11Section 20. 16.87 (2) of the statutes is renumbered 16.87 (2) (a) and amended
12to read:
AB792-ASA2,12,1813 16.87 (2) (a) A contract for engineering services or architectural services or a
14to be done for or furnished to the state or a department, board, commission, or officer
15of the state is exempt from the requirements of ss. 16.75 and 16.705, but an engineer
16or an architect employed at the department shall determine if the project could be
17completed more effectively and efficiently with state employees before a contract
18may be approved under sub. (3).
AB792-ASA2,12,22 19(b) A contract involving an expenditure of $10,000 or more for construction
20work, or $30,000 or more for limited trades work, to be done for or furnished to the
21state or a department, board, commission, or officer of the state is exempt from the
22requirements of ss. 16.705 and 16.75.
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