CMH/ARG/RAC:bjk/nwn/cjs:rs
2009 - 2010 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 1,
TO 2009 SENATE BILL 447
April 20, 2010 - Offered by Joint Committee on Finance.
SB447-SSA1,1,11 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:
SB447-SSA1, s. 1 12Section 1. 16.42 (1) (h) of the statutes is created to read:
SB447-SSA1,2,10
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. In
5preparing this information, agencies shall use actual salary and service hour data,
6if available. If such data are not available, the agency may use estimates. Any
7estimate relying on state employee salary data for comparable work shall be
8accompanied by a detailed statement explaining why the use of state employee
9salary data is necessary and why such use does not misrepresent the salaries paid
10for contracted positions.
SB447-SSA1,2,1211 2. The total amount of agency base level funding used to pay for the contracted
12positions under subd. 1.
SB447-SSA1,2,1513 3. The amount of funding requested for contracted positions identified under
14subd. 1 and an identification of the appropriation or appropriations that will be used
15to fund the contracted positions.
SB447-SSA1, s. 2 16Section 2. 16.46 (10) of the statutes is created to read:
SB447-SSA1,2,2017 16.46 (10) (a) A statement of the number of contracted positions providing
18services for each state agency that are paid from the agency's base level funding and
19an identification of the appropriation or appropriations used to fund the contracted
20positions.
SB447-SSA1,2,2221 (b) A statement of the total amount of each state agency's base level funding
22used to pay for the contracted positions.
SB447-SSA1,2,2523 (c) A statement of the amount of funding requested by state agencies for
24contracted positions and an identification of the appropriation or appropriations that
25will be used to fund the contracted positions.
SB447-SSA1, s. 3
1Section 3. 16.705 (1) of the statutes is renumbered 16.705 (1) (a) (intro.) and
2amended to read:
SB447-SSA1,3,43 16.705 (1) (a) (intro.) The department or its agents may contract for services
4which if at least 2 of the following conditions apply:
SB447-SSA1,3,5 51. The services can be performed more economically or by contract.
SB447-SSA1,3,8 62. When considering expertise of the current full-time positions, whether filled
7or vacant, the services can be performed more
efficiently by such contract than by use
8of employees in those positions
.
SB447-SSA1,3,10 9(d) The department shall, by rule, prescribe uniform procedures for
10determining whether services are appropriate for contracting under this subsection.
SB447-SSA1, s. 4 11Section 4. 16.705 (1) (a) 3., (b) and (c) of the statutes are created to read:
SB447-SSA1,3,1312 16.705 (1) (a) 3. When considering timeliness of delivery, the services can be
13performed more efficiently by contract.
SB447-SSA1,3,1614 (b) Notwithstanding par. (a), the department or its agents may contract for any
15services if the contract will be for a period that is not more than one year and if the
16contract is not eligible for renewal.
SB447-SSA1,3,1717 (c) No contract under this section may be automatically renewed.
SB447-SSA1, s. 5 18Section 5. 16.705 (2) of the statutes is renumbered 16.705 (2) (a) (intro.) and
19amended to read:
SB447-SSA1,3,2220 16.705 (2) (a) (intro.) The department shall promulgate rules for the
21procurement of contractual services by the department and its designated agents,
22including but not limited to rules the following:
SB447-SSA1,3,24 231. Rules prescribing approval and monitoring processes for contractual service
24contracts.
SB447-SSA1,4,15
12. Except as provided in par. (b), a requirement for agencies to conduct a
2uniform cost-benefit analysis of each proposed contractual service procurement
3involving an estimated expenditure of more than $25,000 $50,000 in accordance with
4standards prescribed in the rules, and, except as provided in par. (b), a requirement
5for agencies to review periodically, and before any renewal, the continued
6appropriateness of contracting under each contractual services agreement involving
7an estimated expenditure of more than $25,000 $50,000. The rules shall require the
8cost-benefit analysis or continued appropriateness review to compare the costs of
9using a current employee who is providing, or who would provide, the service, or a
10similarly situated employee if the current position is vacant, to the costs of using an
11employee under a contract and shall require the comparison to include all relevant
12costs including the salary and fringe benefit costs, costs of any training that will be
13necessary to fulfill the task, materials, inspections, unemployment insurance,
14transitional costs, liability insurance, overhead, facility costs, taxes, and other
15incidental costs
.
SB447-SSA1,4,24 16(d) Each officer requesting approval to engage any person to perform
17contractual services shall submit to the department written justification for such
18contracting which shall include a description of the contractual services to be
19procured, justification of need, justification for not contracting with other agencies,
20a specific description of the scope of contractual services to be performed, and
21justification for the procurement process if a process other than competitive bidding
22is to be used. The department may not approve any contract for contractual services
23unless it is satisfied that the justification for contracting conforms to the
24requirements of this section and ss. 16.71 to 16.77.
SB447-SSA1, s. 6 25Section 6. 16.705 (2) (a) 3., (b) and (c) of the statutes are created to read:
SB447-SSA1,5,4
116.705 (2) (a) 3. A requirement that each agency that contracts for services
2under this section perform periodic audits on cost-benefit analyses or continued
3appropriateness reviews and contracts that required a cost-benefit analysis or
4continued appropriateness review.
SB447-SSA1,5,65 (b) 1. A cost-benefit analysis or continued appropriateness review is not
6required for the following services:
SB447-SSA1,5,77 a. Services that federal or state law requires to be performed by contract.
SB447-SSA1,5,88 b. Services that are incidental to the purchase of a commodity.
SB447-SSA1,5,119 c. Services that are substantially dissimilar to services performed by state
10employees or that state employees have not performed historically and are not able
11to perform without significant retraining or investment in infrastructure or capital.
SB447-SSA1,5,1412 d. Services that must be provided per a contract, license, or warranty by the
13original equipment manufacturer or publisher unless the contract, license, or
14warranty has expired or is no longer valid.
SB447-SSA1,5,1815 2. If an agency is exempted from the cost-benefit analysis or continued
16appropriateness review under subd. 1. c. only, the department must include in the
17report submitted under sub. (8) the services that the agency determined were exempt
18under subd. 1. c.
SB447-SSA1,5,2019 (c) 1. Neither a cost-benefit analysis nor a continued appropriateness review
20may be conducted by contract.
SB447-SSA1,5,2221 2. A cost-benefit analysis may not be shown to a bidder prior to the issuance
22of a letter of intent to contract.
SB447-SSA1, s. 7 23Section 7. 16.705 (4) of the statutes is created to read:
SB447-SSA1,6,824 16.705 (4) Any person submitting a bid or proposal or a labor organization that
25is certified under subch. V or VI of ch. 111 to be the representative of the appropriate

1collective bargaining unit that is aggrieved by a solicitation for bids or by a letter of
2intent to contract may protest to the agency that solicited or awarded the contractual
3services. The protesting party shall file a written notice of intent to protest with, or
4send an electronic notice of intent to protest to, the agency that solicited or awarded
5the contractual services within 7 working days after the solicitation or the letter,
6whichever is appropriate, and shall serve a written or send an electronic protest
7within 12 working days after issuance of the solicitation or the letter, whichever is
8appropriate.
SB447-SSA1, s. 8 9Section 8. 16.705 (5g), (5m) and (5r) of the statutes are created to read:
SB447-SSA1,6,1210 16.705 (5g) All contracts for contractual services must provide notice of the
11rules promulgated by the division of legal services under sub. (5m) (a) and of the
12requirements under sub. (5r).
SB447-SSA1,6,14 13(5m) The division of legal services shall promulgate rules on all of the
14following:
SB447-SSA1,6,1815 (a) Actions by the person performing the contractual services that would result
16in the agency for which contractual services are performed recovering any
17expenditures for those contractual services that the agency paid to the person
18performing the contractual services.
SB447-SSA1,6,2019 (b) Standard performance measures, including quantifiable benchmark
20indicators, to evaluate persons performing contractual services.
SB447-SSA1,6,2221 (c) Signing bonuses, reimbursements, and per diem costs included in all
22contracts for contractual services.
SB447-SSA1,7,3 23(5r) (a) 1. If the cost of the contractual services exceeds $25,000, any
24expenditures of the person performing the contractual services that exceed its
25original bid by 10 percent or more may not be paid unless the agency for which the

1contractual services are performed notifies the governor and the joint committee on
2finance the amount by which the cost exceeds the original bid and the reason for the
3increase.
SB447-SSA1,7,84 2. Subdivision 1. does not apply to contractual services purchased for the
5University of Wisconsin System, or for any University of Wisconsin System campus
6or institution, if the contractual services are for research or instructional purposes,
7as determined by the University of Wisconsin System or the campus or institution,
8whichever is appropriate.
SB447-SSA1,7,149 (b) No person performing contractual services under this section may provide
10any salary increase if the salary increase would result in greater expenditures for the
11agency for which the contractual services are performed than the amounts specified
12in the original bid. This restriction under this paragraph on salary increases does
13not apply if the salary increase is in accordance with the terms of a collective
14bargaining agreement.
SB447-SSA1, s. 9 15Section 9. 16.705 (6) of the statutes is renumbered 16.705 (6) (b) and amended
16to read:
SB447-SSA1,7,2417 16.705 (6) (b) If the agency for which contractual services are performed under
18a contractual services agreement concludes under par. (a) that the performance was
19unsatisfactory, recovers expenditures because the contractor's actions were listed in
20the rules developed under sub. (5m) (a), or concludes
that the performance was
21unsatisfactory based on factors the agency considers, the agency shall file with the
22department an evaluation of stating that the contractor's performance was
23unsatisfactory
within 60 days after the fulfillment of the agreement. The evaluation
24shall be in such form as the secretary may require.
SB447-SSA1, s. 10 25Section 10. 16.705 (6) (a) of the statutes is created to read:
SB447-SSA1,8,4
116.705 (6) (a) An agency for which contractual services are performed under
2a contractual services agreement shall evaluate the contractual services using the
3standard performance measures and benchmark indicators created under sub. (5m)
4(b). No contract may be renewed until the agency completes the evaluation.
SB447-SSA1, s. 11 5Section 11. 16.705 (7) of the statutes is amended to read:
SB447-SSA1,8,96 16.705 (7) The department shall review evaluations submitted under sub. (6)
7(b) and promulgate rules prescribing procedures to assure that future contracts for
8contractual services are not awarded to contractors whose past performance is found
9to be unsatisfactory, to the extent feasible.
SB447-SSA1, s. 12 10Section 12. 16.705 (8) (a) of the statutes is amended to read:
SB447-SSA1,8,1211 16.705 (8) (a) A summary of the cost-benefit analyses completed by agencies
12in compliance with rules promulgated by the department under sub. (2) (a).
SB447-SSA1, s. 13 13Section 13. 16.705 (8) (am) of the statutes is created to read:
SB447-SSA1,8,1614 16.705 (8) (am) As provided under sub. (2) (b) 2., any services on which agencies
15would have had to perform a cost-benefit analysis or a continued appropriateness
16review but for the exemption under sub. (2) (b) 1. c.
SB447-SSA1, s. 14 17Section 14. 16.705 (9) of the statutes is created to read:
SB447-SSA1,8,2018 16.705 (9) (a) In this subsection, "federal economic stimulus funds" means
19federal moneys received by the state, pursuant to federal legislation enacted during
20the 111th Congress for the purpose of reviving the economy of the United States.
SB447-SSA1,9,221 (b) Except as provided in pars. (c) and (d), if in any fiscal year an agency in the
22executive branch is prohibited from hiring employees to fill vacant positions or its
23employees are required to serve an unpaid leave of absence, the agency may not enter
24into, renew, or extend any contractual services contracts with private contractors or
25consultants for the remainder of that fiscal year for the performance of services of

1agency employees who would have performed the services had they been hired or had
2they not have been required to take an unpaid leave of absence.
SB447-SSA1,9,93 (c) Paragraph (b) shall not apply to contractual services contracts that are
4funded with federal economic stimulus funds and the secretary determines that any
5deadlines imposed by the federal government on the expenditure of the federal
6economic stimulus funds cannot be met without an agency's entering into, renewing,
7or extending a contractual services contract or a cost-benefit analysis is conducted
8that demonstrates that a contractual services contract would be more cost effective
9and efficient than having state employees perform the services.
SB447-SSA1,9,1110 (cm) Paragraph (b) shall not apply to contracts entered into, renewed, or
11extended under s. 977.08.
SB447-SSA1,9,2012 (d) An agency in the executive branch may submit a written request to the joint
13committee on finance to have par. (b) not apply to the agency with respect to a specific
14contractual services contract. If the cochairpersons of the committee do not notify
15the agency within 14 working days after the date of the agency's submittal that the
16committee intends to schedule a meeting to review the request, approval of the
17request is granted. If, within 14 working days after the date of the agency's request
18submittal, the cochairpersons of the committee notify the agency that the committee
19intends to schedule a meeting to review the request, the request may be granted only
20as approved by the committee.
SB447-SSA1, s. 15 21Section 15. 16.75 (1) (a) 4. of the statutes is created to read:
SB447-SSA1,9,2422 16.75 (1) (a) 4. The contracting agency shall electronically send the successful
23bidder a letter of intent to contract and shall send electronic copies of the letter to all
24other bidders.
SB447-SSA1, s. 16 25Section 16. 16.75 (1) (b) of the statutes is amended to read:
SB447-SSA1,9,26
116.75 (1) (b) When the estimated cost exceeds $25,000, the department shall
2invite bids to be submitted. The department either shall either solicit sealed bids to
3be opened publicly at a specified date and time, or shall solicit bidding by auction to
4be conducted electronically at a specified date and time. Whenever bids are invited,
5due notice inviting bids shall may be published as a class 2 notice, under ch. 985 or,
6and notice inviting bids, including a copy of all documents soliciting bids, shall be

7posted on the Internet at a site determined or approved by the department. The bid
8opening or auction shall occur at least 7 days after the date of the last insertion of
9the notice or
at least 7 days after the date of posting on the Internet. The notice under
10ch. 985, if applicable, and the Internet site
shall specify whether sealed bids are
11invited or bids will be accepted by auction, and shall give a clear description of the
12materials, supplies, equipment, or contractual services to be purchased, the amount
13of any bond, share draft, check, or other draft to be submitted as surety with the bid
14or prior to the auction, and the date and time that the public opening or the auction
15will be held.
SB447-SSA1, s. 17 16Section 17. 16.75 (2m) (b) of the statutes is amended to read:
SB447-SSA1,11,217 16.75 (2m) (b) When the estimated cost exceeds $25,000, the department may
18invite competitive sealed proposals by publishing a class 2 notice under ch. 985 or by
19posting
and shall post notice, including all documents soliciting proposals, on the
20Internet at a site determined or approved by the department. The notice under ch.
21985, if applicable, and the notice on the Internet site
shall describe the materials,
22supplies, equipment, or contractual services to be purchased, the intent to make the
23procurement by solicitation of proposals rather than by solicitation of bids, any
24requirement for surety, and the date the proposals will be opened, which shall be at

1least 7 days after the date of the last insertion of the notice or
at least 7 days after
2the date of posting on the Internet.
SB447-SSA1, s. 18 3Section 18. 16.75 (6) (c) of the statutes is amended to read:
SB447-SSA1,11,164 16.75 (6) (c) If the secretary determines that it is in the best interest of this state
5to do so, he or she may, with the approval of the governor, waive the requirements
6of subs. (1) to (5) and may purchase supplies, material, equipment, or contractual
7services, other than printing and stationery, from a private source other than a
8source specified in par. (b). Except as provided in sub. (2g) (c), if the cost of the
9purchase is expected to exceed $25,000, the department shall may first publish a
10class 2 notice under ch. 985 or and shall post a notice on the Internet at the site
11determined or approved by the department under sub. (1) (b) describing the
12materials, supplies, equipment, or contractual services to be purchased, stating the
13intent to make the purchase from a private source without soliciting bids or
14competitive sealed proposals and stating the date on which the contract or purchase
15order will be awarded. The date of the award shall be at least 7 days after the date
16of the last insertion or
the date of posting on the Internet.
SB447-SSA1, s. 19 17Section 19. 16.771 of the statutes is created to read:
SB447-SSA1,11,19 1816.771 False claims. (1) In this section, "contract" means any of the
19following:
SB447-SSA1,11,2020 (a) Contracts or orders that are subject to s. 16.705.
SB447-SSA1,11,2321 (b) Contracts or orders entered into for projects that are subject to s. 103.49 or
22103.50 if the party presenting the false claim is alleged to have failed to comply with
23s. 103.49 or 103.50.
SB447-SSA1,12,5 24(2) Whoever knowingly presents or causes to be presented a false claim for
25payment under a contract for materials, supplies, equipment, or services to be

1provided to an agency shall forfeit not less than $5,000 nor more than $10,000, plus
23 times the amount of the damages that were sustained by the state or would have
3been sustained by the state, whichever is greater, as a result of the false claim. The
4attorney general may bring an action on behalf of the state to recover any forfeiture
5incurred under this section.
SB447-SSA1, s. 20 6Section 20. 16.87 (2) of the statutes is renumbered 16.87 (2) (a) and amended
7to read:
SB447-SSA1,12,138 16.87 (2) (a) A contract for engineering services or architectural services or a
9to be done for or furnished to the state or a department, board, commission, or officer
10of the state is exempt from the requirements of ss. 16.75 and 16.705, but an engineer
11or an architect employed at the department shall determine if the project could be
12completed more effectively and efficiently with state employees before a contract
13may be approved under sub. (3).
SB447-SSA1,12,17 14(b) A contract involving an expenditure of $10,000 or more for construction
15work, or $30,000 or more for limited trades work, to be done for or furnished to the
16state or a department, board, commission, or officer of the state is exempt from the
17requirements of ss. 16.705 and 16.75.
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