Amendment SSA1-SB447

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 An Act to renumber and amend 16.705 (1), 16.705 (2), 16.705 (6) and 16.87 (2); to amend 16.705 (7), 16.705 (8) (a), 16.75 (1) (b), 16.75 (2m) (b), 16.75 (6) (c), 25.18 (1) (a), 25.18 (1) (f), 25.18 (1) (m), 84.01 (13), 84.01 (31), 84.06 (2) (a), 84.06 (3), 84.06 (4), 85.015, 102.81 (2), 103.50 (2), 165.08, 165.25 (11), 221.0903 (4) (b), 801.02 (1), 803.09 (1) and (2), 804.01 (2) (intro.), 805.04 (2m) and 893.981; and to create 16.42 (1) (h), 16.46 (10), 16.705 (1) (a) 3., (b) and (c), 16.705 (2) (a) 3., (b) and (c), 16.705 (4), 16.705 (5g), (5m) and (5r), 16.705 (6) (a), 16.705 (8) (am), 16.705 (9), 16.75 (1) (a) 4., 16.771, 16.871, 20.932, 66.0902, 84.01 (13m) and 85.65 of the statutes; relating to: state contractual services and false claims submitted to state and local governments, requiring the exercise of rule-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 Section 1. 16.42 (1) (h) of the statutes is created to read:

SB447-SSA1,2,10 16.42 (1) (h) 1. The total amount 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 contract expenditures. In preparing this information, agencies shall use actual salary and service hour data, if available. If such data are not available, the agency may use estimates. Any estimate relying on state employee salary data for comparable work shall be accompanied by a detailed statement explaining why the use of state employee salary data is necessary and why such use does not misrepresent the salaries paid for contracted positions.

SB447-SSA1,2,12 2. The total amount of agency base level funding used to pay for the contracted positions under subd. 1.

SB447-SSA1,2,15 3. The amount of funding requested for contracted positions identified under subd. 1 and an identification of the appropriation or appropriations that will be used to fund the contracted positions.

SB447-SSA1, s. 2 Section 2. 16.46 (10) of the statutes is created to read:

SB447-SSA1,2,20 16.46 (10) (a) A statement of the number of contracted positions providing services for each state 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.

SB447-SSA1,2,22 (b) A statement of the total amount of each state agency's base level funding used to pay for the contracted positions.

SB447-SSA1,2,25 (c) A statement of the amount of funding requested by state agencies for contracted positions and an identification of the appropriation or appropriations that will be used to fund the contracted positions.

SB447-SSA1, s. 3 Section 3. 16.705 (1) of the statutes is renumbered 16.705 (1) (a) (intro.) and amended to read:

SB447-SSA1,3,4 16.705 (1) (a) (intro.) The department or its agents may contract for services which if at least 2 of the following conditions apply:

SB447-SSA1,3,5 1. The services can be performed more economically or by contract.

SB447-SSA1,3,8 2. When considering expertise of the current full-time positions, whether filled or vacant, the services can be performed more efficiently by such contract than by use of employees in those positions.

SB447-SSA1,3,10 (d) The department shall, by rule, prescribe uniform procedures for determining whether services are appropriate for contracting under this subsection.

SB447-SSA1, s. 4 Section 4. 16.705 (1) (a) 3., (b) and (c) of the statutes are created to read:

SB447-SSA1,3,13 16.705 (1) (a) 3. When considering timeliness of delivery, the services can be performed more efficiently by contract.

SB447-SSA1,3,16 (b) Notwithstanding par. (a), the department or its agents may contract for any services if the contract will be for a period that is not more than one year and if the contract is not eligible for renewal.

SB447-SSA1,3,17 (c) No contract under this section may be automatically renewed.

SB447-SSA1, s. 5 Section 5. 16.705 (2) of the statutes is renumbered 16.705 (2) (a) (intro.) and amended to read:

SB447-SSA1,3,22 16.705 (2) (a) (intro.) The department shall promulgate rules for the procurement of contractual services by the department and its designated agents, including but not limited to rules the following:

SB447-SSA1,3,24 1. Rules prescribing approval and monitoring processes for contractual service contracts.

SB447-SSA1,4,15 2. Except as provided in par. (b), a requirement for agencies to conduct a uniform cost-benefit analysis of each proposed contractual service procurement involving an estimated expenditure of more than $25,000 $50,000 in accordance with standards prescribed in the rules, and, except as provided in par. (b), a requirement for agencies to review periodically, and before any renewal, the continued appropriateness of contracting under each contractual services agreement involving an estimated expenditure of more than $25,000 $50,000. The rules shall require the cost-benefit analysis or continued appropriateness review to compare the costs of using a current employee who is providing, or who would provide, the service, or a similarly situated employee if the current position is vacant, to the costs of using an employee under a contract and shall require the comparison to include all relevant costs including the salary and fringe benefit costs, costs of any training that will be necessary to fulfill the task, materials, inspections, unemployment insurance, transitional costs, liability insurance, overhead, facility costs, taxes, and other incidental costs.

SB447-SSA1,4,24 (d) Each officer requesting approval to engage any person to perform contractual services shall submit to the department written justification for such contracting which shall include a description of the contractual services to be procured, justification of need, justification for not contracting with other agencies, a specific description of the scope of contractual services to be performed, and justification for the procurement process if a process other than competitive bidding is to be used. The department may not approve any contract for contractual services unless it is satisfied that the justification for contracting conforms to the requirements of this section and ss. 16.71 to 16.77.

SB447-SSA1, s. 6 Section 6. 16.705 (2) (a) 3., (b) and (c) of the statutes are created to read:

SB447-SSA1,5,4 16.705 (2) (a) 3. A requirement that each agency that contracts for services under this section perform periodic audits on cost-benefit analyses or continued appropriateness reviews and contracts that required a cost-benefit analysis or continued appropriateness review.

SB447-SSA1,5,6 (b) 1. A cost-benefit analysis or continued appropriateness review is not required for the following services:

SB447-SSA1,5,7 a. Services that federal or state law requires to be performed by contract.

SB447-SSA1,5,8 b. Services that are incidental to the purchase of a commodity.

SB447-SSA1,5,11 c. Services that are substantially dissimilar to services performed by state employees or that state employees have not performed historically and are not able to perform without significant retraining or investment in infrastructure or capital.

SB447-SSA1,5,14 d. Services that must be provided per a contract, license, or warranty by the original equipment manufacturer or publisher unless the contract, license, or warranty has expired or is no longer valid.

SB447-SSA1,5,18 2. If an agency is exempted from the cost-benefit analysis or continued appropriateness review under subd. 1. c. only, the department must include in the report submitted under sub. (8) the services that the agency determined were exempt under subd. 1. c.

SB447-SSA1,5,20 (c) 1. Neither a cost-benefit analysis nor a continued appropriateness review may be conducted by contract.

SB447-SSA1,5,22 2. A cost-benefit analysis may not be shown to a bidder prior to the issuance of a letter of intent to contract.

SB447-SSA1, s. 7 Section 7. 16.705 (4) of the statutes is created to read:

SB447-SSA1,6,8 16.705 (4) Any person submitting a bid or proposal or a labor organization that is certified under subch. V or VI of ch. 111 to be the representative of the appropriate collective bargaining unit that is aggrieved by a solicitation for bids or by a letter of intent to contract may protest to the agency that solicited or awarded the contractual services. The protesting party shall file a written notice of intent to protest with, or send an electronic notice of intent to protest to, the agency that solicited or awarded the contractual services within 7 working days after the solicitation or the letter, whichever is appropriate, and shall serve a written or send an electronic protest within 12 working days after issuance of the solicitation or the letter, whichever is appropriate.

SB447-SSA1, s. 8 Section 8. 16.705 (5g), (5m) and (5r) of the statutes are created to read:

SB447-SSA1,6,12 16.705 (5g) All contracts for contractual services must provide notice of the rules promulgated by the division of legal services under sub. (5m) (a) and of the requirements under sub. (5r).

SB447-SSA1,6,14 (5m) The division of legal services shall promulgate rules on all of the following:

SB447-SSA1,6,18 (a) Actions by the person performing the contractual services that would result in the agency for which contractual services are performed recovering any expenditures for those contractual services that the agency paid to the person performing the contractual services.

SB447-SSA1,6,20 (b) Standard performance measures, including quantifiable benchmark indicators, to evaluate persons performing contractual services.

SB447-SSA1,6,22 (c) Signing bonuses, reimbursements, and per diem costs included in all contracts for contractual services.

SB447-SSA1,7,3 (5r) (a) 1. If the cost of the contractual services exceeds $25,000, any expenditures of the person performing the contractual services that exceed its original bid by 10 percent or more may not be paid unless the agency for which the contractual services are performed notifies the governor and the joint committee on finance the amount by which the cost exceeds the original bid and the reason for the increase.

SB447-SSA1,7,8 2. Subdivision 1. does not apply to contractual services purchased for the University of Wisconsin System, or for any University of Wisconsin System campus or institution, if the contractual services are for research or instructional purposes, as determined by the University of Wisconsin System or the campus or institution, whichever is appropriate.

SB447-SSA1,7,14 (b) No person performing contractual services under this section may provide any salary increase if the salary increase would result in greater expenditures for the agency for which the contractual services are performed than the amounts specified in the original bid. This restriction under this paragraph on salary increases does not apply if the salary increase is in accordance with the terms of a collective bargaining agreement.

SB447-SSA1, s. 9 Section 9. 16.705 (6) of the statutes is renumbered 16.705 (6) (b) and amended to read:

SB447-SSA1,7,24 16.705 (6) (b) If the agency for which contractual services are performed under a contractual services agreement concludes under par. (a) that the performance was unsatisfactory, recovers expenditures because the contractor's actions were listed in the rules developed under sub. (5m) (a), or concludes that the performance was unsatisfactory based on factors the agency considers, the agency shall file with the department an evaluation of stating that the contractor's performance was unsatisfactory within 60 days after the fulfillment of the agreement. The evaluation shall be in such form as the secretary may require.

SB447-SSA1, s. 10 Section 10. 16.705 (6) (a) of the statutes is created to read:

SB447-SSA1,8,4 16.705 (6) (a) An agency for which contractual services are performed under a contractual services agreement shall evaluate the contractual services using the standard performance measures and benchmark indicators created under sub. (5m) (b). No contract may be renewed until the agency completes the evaluation.

SB447-SSA1, s. 11 Section 11. 16.705 (7) of the statutes is amended to read:

SB447-SSA1,8,9 16.705 (7) The department shall review evaluations submitted under sub. (6) (b) and promulgate rules prescribing procedures to assure that future contracts for contractual services are not awarded to contractors whose past performance is found to be unsatisfactory, to the extent feasible.

SB447-SSA1, s. 12 Section 12. 16.705 (8) (a) of the statutes is amended to read:

SB447-SSA1,8,12 16.705 (8) (a) A summary of the cost-benefit analyses completed by agencies in compliance with rules promulgated by the department under sub. (2) (a).

SB447-SSA1, s. 13 Section 13. 16.705 (8) (am) of the statutes is created to read:

SB447-SSA1,8,16 16.705 (8) (am) As provided under sub. (2) (b) 2., any services on which agencies would have had to perform a cost-benefit analysis or a continued appropriateness review but for the exemption under sub. (2) (b) 1. c.

SB447-SSA1, s. 14 Section 14. 16.705 (9) of the statutes is created to read:

SB447-SSA1,8,20 16.705 (9) (a) In this subsection, "federal economic stimulus funds" means federal moneys received by the state, pursuant to federal legislation enacted during the 111th Congress for the purpose of reviving the economy of the United States.

SB447-SSA1,9,2 (b) Except as provided in pars. (c) and (d), if in any fiscal year an agency in the executive branch 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.

SB447-SSA1,9,9 (c) Paragraph (b) shall not apply to contractual services contracts that are funded with federal economic stimulus funds and the secretary determines that any deadlines imposed by the federal government on the expenditure of the federal economic stimulus funds cannot be met without an agency's entering into, renewing, or extending a contractual services contract or a cost-benefit analysis is conducted that demonstrates that a contractual services contract would be more cost effective and efficient than having state employees perform the services.

SB447-SSA1,9,11 (cm) Paragraph (b) shall not apply to contracts entered into, renewed, or extended under s. 977.08.

SB447-SSA1,9,20 (d) An agency in the executive branch may submit a written request to the joint committee on finance to have par. (b) not apply to the agency with respect to a specific contractual services contract. If the cochairpersons of the committee do not notify the agency within 14 working days after the date of the agency's submittal that the committee 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 of the committee notify the agency that the committee intends to schedule a meeting to review the request, the request may be granted only as approved by the committee.

SB447-SSA1, s. 15 Section 15. 16.75 (1) (a) 4. of the statutes is created to read:

SB447-SSA1,9,24 16.75 (1) (a) 4. The contracting agency shall electronically send the successful bidder a letter of intent to contract and shall send electronic copies of the letter to all other bidders.

SB447-SSA1, s. 16 Section 16. 16.75 (1) (b) of the statutes is amended to read:

SB447-SSA1,9,26 16.75 (1) (b) When the estimated cost exceeds $25,000, the department shall invite bids to be submitted. The department either shall either solicit sealed bids to be opened publicly at a specified date and time, or shall solicit bidding by auction to be conducted electronically at a specified date and time. Whenever bids are invited, due notice inviting bids shall may be published as a class 2 notice, under ch. 985 or, and notice inviting bids, including a copy of all documents soliciting bids, shall be posted on the Internet at a site determined or approved by the department. The bid opening or auction shall occur at least 7 days after the date of the last insertion of the notice or at least 7 days after the date of posting on the Internet. The notice under ch. 985, if applicable, and the Internet site shall specify whether sealed bids are invited or bids will be accepted by auction, and shall give a clear description of the materials, supplies, equipment, or contractual services to be purchased, the amount of any bond, share draft, check, or other draft to be submitted as surety with the bid or prior to the auction, and the date and time that the public opening or the auction will be held.

SB447-SSA1, s. 17 Section 17. 16.75 (2m) (b) of the statutes is amended to read:

SB447-SSA1,11,2 16.75 (2m) (b) When the estimated cost exceeds $25,000, the department may invite competitive sealed proposals by publishing a class 2 notice under ch. 985 or by posting and shall post notice, including all documents soliciting proposals, on the Internet at a site determined or approved by the department. The notice under ch. 985, if applicable, and the notice on the Internet site shall describe the materials, supplies, equipment, or contractual services to be purchased, the intent to make the procurement by solicitation of proposals rather than by solicitation of bids, any requirement for surety, and the date the proposals will be opened, which shall be at least 7 days after the date of the last insertion of the notice or at least 7 days after the date of posting on the Internet.

SB447-SSA1, s. 18 Section 18. 16.75 (6) (c) of the statutes is amended to read:

SB447-SSA1,11,16 16.75 (6) (c) If the secretary determines that it is in the best interest of this state to do so, he or she may, with the approval of the governor, waive the requirements of subs. (1) to (5) and may purchase supplies, material, equipment, or contractual services, other than printing and stationery, from a private source other than a source specified in par. (b). Except as provided in sub. (2g) (c), if the cost of the purchase is expected to exceed $25,000, the department shall may first publish a class 2 notice under ch. 985 or and shall post a notice on the Internet at the site determined or approved by the department under sub. (1) (b) describing the materials, supplies, equipment, or contractual services to be purchased, stating the intent to make the purchase from a private source without soliciting bids or competitive sealed proposals and stating the date on which the contract or purchase order will be awarded. The date of the award shall be at least 7 days after the date of the last insertion or the date of posting on the Internet.

SB447-SSA1, s. 19 Section 19. 16.771 of the statutes is created to read:

SB447-SSA1,11,19 16.771 False claims. (1) In this section, "contract" means any of the following:

SB447-SSA1,11,20 (a) Contracts or orders that are subject to s. 16.705.

SB447-SSA1,11,23 (b) Contracts or orders entered into for projects that are subject to s. 103.49 or 103.50 if the party presenting the false claim is alleged to have failed to comply with s. 103.49 or 103.50.

SB447-SSA1,12,5 (2) Whoever knowingly presents or causes to be presented a false claim for payment under a contract for materials, supplies, equipment, or services to be provided to an agency shall forfeit not less than $5,000 nor more than $10,000, plus 3 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 attorney general may bring an action on behalf of the state to recover any forfeiture incurred under this section.

SB447-SSA1, s. 20 Section 20. 16.87 (2) of the statutes is renumbered 16.87 (2) (a) and amended to read:

SB447-SSA1,12,13 16.87 (2) (a) A contract for engineering services or architectural services or a to be done for or furnished to the state or a department, board, commission, or officer of the state is exempt from the requirements of ss. 16.75 and 16.705, but an engineer or an architect employed at the department shall determine if the project could be completed more effectively and efficiently with state employees before a contract may be approved under sub. (3).

SB447-SSA1,12,17 (b) A contract involving an expenditure of $10,000 or more for construction work, or $30,000 or more for limited trades work, to be done for or furnished to the state or a department, board, commission, or officer of the state is exempt from the requirements of ss. 16.705 and 16.75.