AB940: Bill Text

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2005 - 2006 LEGISLATURE

2005 Assembly BILL 940

January 24, 2006 - Introduced by Representatives Berceau, Black, Albers, Musser, Molepske, Colon, Boyle, Zepnick, Grigsby and Nelson. Referred to Committee on State Affairs.

AB940,1,6 An Act to amend 16.705 (1), 16.75 (1) (a) 1., 16.75 (6) (bm), 16.75 (6) (e), 23.41 (5), 25.18 (1) (a), 25.18 (1) (f), 25.18 (1) (m), 84.01 (13), 84.06 (2) (a), 84.06 (3), 84.06 (4), 85.015, 102.81 (2), 221.0903 (4) (b) and 655.27 (2); and to create 15.07 (1) (a) 7., 15.07 (5) (zm), 15.55, 16.705 (5m) and 20.240 of the statutes; relating to: review of certain proposed state contractual service engagements and creation of a contract review board.

Analysis by the Legislative Reference Bureau

Currently, the Department of Administration (DOA) and those executive branch agencies to which DOA delegates purchasing authority may enter into contracts for contractual services if the services can be performed more economically or efficiently by contract than through the use of state employees. This bill provides that DOA and its agents may enter into contracts for contractual services only if the services can be performed more economically by contract than through the use of state employees.

Currently, before a vendor is engaged to perform services that are currently being performed by represented state employees, the decision to contract for the services must first be bargained collectively in good faith by the state with the certified representative of the employees to the point of impasse. If no agreement is reached, the state may proceed to contract for the services. In addition, with certain exceptions, any proposal to engage a person to perform contractual services for a state agency must first be submitted to DOA for review and approval. The agency requesting approval of a proposed engagement must submit written justification for the proposal which must include justification of need, justification for not contracting with other state agencies, a specific description of the scope of the services to be performed by contract, and justification for the procurement process if a process other than competitive bidding is to be used. In addition, certain proposed contracts for contractual services must be reviewed by the director of the Office of State Employment Relations in DOA in order to ensure that the contracting agency properly utilizes the services of state employees, evaluates the feasibility of using limited-term appointments prior to entering into the contract, and does not enter into a contract that would conflict with an existing collective bargaining agreement.

This bill provides, in addition to these requirements, with certain exceptions, that each proposed engagement to perform services for an executive branch state agency must be submitted for prior review and approval of a contract review board that is created by the bill. The board consists of seven members serving for two-year terms. Two of the members are appointed by the governor, one of whom must be a representative of an organization that is certified by the Wisconsin Employment Relations Commission to represent state employees, if any. In addition, one member each is appointed by the speaker of the assembly, the minority leader of the assembly, the president of the senate, the senate minority leader, and the director of the Office of State Employment Relations in DOA.

Under the bill, the review requirement applies only if DOA or an agency to which DOA has delegated contracting authority determines that the proposed engagement will result in the net reduction of at least one full-time equivalent state position. The bill requires an agency to provide the board with certain information to be used in conducting its review. The board must approve the proposed engagement if it determines that the proposed engagement is consistent with state law and that the quality of services and cost benefits resulting from the engagement are greater than the quality of services and cost benefits to the state resulting from performance of the services by state employees. The board must exclude any savings resulting from replacement of state employees by nonstate personnel who are younger in age than the state employees.

The review requirements do not apply to a proposed engagement that has been bargained collectively with the certified representative for each state position the majority of whose duties will be displaced under the engagement if the representative agrees to the engagement. The review requirements do not apply to renewal of an existing contractual services agreement upon substantially the same terms and conditions, plus reasonable price adjustments necessitated by actual cost increases. Under the bill, decisions of the Contract Review Board may be appealed under the State Administrative Procedure Act and are subject to judicial review.

For further information see the state 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:

AB940, s. 1 Section 1. 15.07 (1) (a) 7. of the statutes is created to read:

AB940,3,3 15.07 (1) (a) 7. Members of the contract review board shall be appointed as provided in s. 15.55.

AB940, s. 2 Section 2. 15.07 (5) (zm) of the statutes is created to read:

AB940,3,5 15.07 (5) (zm) Members of the contract review board, $25 per day.

AB940, s. 3 Section 3. 15.55 of the statutes is created to read:

AB940,3,15 15.55 Contract review board; creation. There is created a contract review board consisting of 7 members serving for 2-year terms. Two of the members shall be appointed by the governor, of whom one shall be a representative of an organization that is certified to represent employees under such. V of ch. 111, if any; one member shall be appointed by the director of the office of state employment relations in the department of administration; one member shall be appointed by the speaker of the assembly; one member shall be appointed by the minority leader of the assembly; one member shall be appointed by the president of the senate; and one member shall be appointed by the minority leader of the senate.

AB940, s. 4 Section 4. 16.705 (1) of the statutes, as affected by 2005 Wisconsin Act .... (Assembly Bill 105), is amended to read:

AB940,4,2 16.705 (1) The Subject to approval under sub. (5m) whenever required, the department or its agents may contract for services which can be performed more economically or efficiently by such contract. The department shall, by rule, prescribe uniform procedures for determining whether services are appropriate for contracting under this subsection.

AB940, s. 5 Section 5. 16.705 (5m) of the statutes is created to read:

AB940,4,14 16.705 (5m) (a) Except as authorized in par. (e), after each proposed engagement to perform contractual services is approved under sub. (2) and under sub. (3), whenever required, if the department or another agency to whom the department has delegated contracting authority under s. 16.71 (1) determines that the proposed engagement will result in the net reduction of at least one full-time equivalent position, or that the proposed engagement is a renewal of a previous engagement that is not exempted under par. (f), the contracting agency shall not solicit bids or competitive sealed proposals and shall not enter into any contract to perform those services until the agency submits the proposed solicitation, or if there is to be no solicitation, the proposed contract for review of the contract review board and the board approves the proposed engagement.

AB940,4,19 (b) The agency shall provide the contract review board with all information required by the board to determine whether the proposed solicitation or contract should be approved. The information shall include a comprehensive analysis, in the form prescribed by the contract review board, of the costs and benefits of replacing one or more state positions with services performed by contract.

AB940,5,3 (c) The contract review board shall approve the proposed solicitation or contract if the board determines that the proposed contracting is consistent with state law and that the quality of services and the cost benefits to the state of contracting for services are greater than the quality of services and cost benefits resulting from performance of the services by state employees. If the board determines that the quality of services and cost benefits to the state of contracting for services are substantially equivalent to the quality of services and cost benefits to the state resulting from performance of the services by state employees, the board shall disapprove the proposed solicitation or contract.

AB940,5,19 (d) In determining the cost benefits to the state that will result from replacement of one or more net full-time equivalent positions with contractual services under par. (c), the contract review board shall exclude any savings resulting from replacement of state employees who occupy the positions to be replaced with nonstate personnel who are younger in age than those state employees. The contract review board may request information from any proposed vendor concerning the ages of the personnel who will be performing services under any proposed contractual services contract. The contract review board may also request information from any agency for which contractual services will be performed under a proposed solicitation or contract concerning any employees of the agency the majority of whose time would be spent performing services required under the proposed solicitation or contract if no engagement occurs. Each agency shall provide the information requested by the contract review board under this paragraph. No agency may enter into a contract with any vendor who fails to provide complete information to the contract review board pursuant to an authorized request under this paragraph.

AB940,5,24 (e) Paragraph (a) does not apply to a proposed solicitation or contract that has been bargained collectively with the certified representative for each state position the majority of whose duties will be displaced under the proposed solicitation or contract and with respect to which the representative has agreed in writing to the proposed solicitation or contract.

AB940,6,4 (f) Paragraph (a) does not apply to any proposed solicitation or contract to renew an existing contractual services contract under substantially the same terms and conditions, plus reasonable price adjustments necessitated by actual cost increases.

AB940,6,6 (g) Any aggrieved person may appeal a decision of the contract review board and the appeal shall be treated as a contested case under ch. 227.

AB940, s. 6 Section 6. 16.75 (1) (a) 1. of the statutes, as affected by 2005 Wisconsin Act 25, is amended to read:

AB940,6,17 16.75 (1) (a) 1. All orders awarded or contracts made by the department for all materials, supplies, equipment, and contractual services to be provided to any agency, except as otherwise provided in par. (c) and subs. (2), (2g), (2m), (3m), (3t), (6), (7), (8), (9), and (10m) and ss. 16.705 (5m), 16.73 (4) (a), 16.751, 16.754, 50.05 (7) (f), 153.05 (2m) (a), 287.15 (7), and 301.265, shall be awarded to the lowest responsible bidder, taking into consideration life cycle cost estimates under sub. (1m), when appropriate, the location of the agency, the quantities of the articles to be supplied, their conformity with the specifications, and the purposes for which they are required and the date of delivery.

AB940, s. 7 Section 7. 16.75 (6) (bm) of the statutes is amended to read:

AB940,6,24 16.75 (6) (bm) If the secretary determines that it is in the best interest of this state to do so, he or she may waive any requirement under subs. (1) to (5) and ss. 16.705 and 16.72 (2) (e) and (f) and (5) except s. 16.705 (5m) with respect to any contract entered into by the department of workforce development under s. 49.143, if the department of workforce development presents the secretary with a process for the procurement of contracts under s. 49.143 and the secretary approves the process.

AB940, s. 8 Section 8. 16.75 (6) (e) of the statutes is amended to read:

AB940,7,10 16.75 (6) (e) The governor or his or her designee may waive any requirement of this subchapter if the governor or his or her designee finds that there exists an emergency which threatens the public health, safety or welfare and the waiver is necessary to meet the emergency. The governor or his or her designee shall require the award of each contract under this paragraph to be made with such competition as is practicable under the circumstances. The governor or his or her designee shall file with the department a statement of facts constituting the emergency for each waiver issued under this paragraph, and a statement of the basis for selection of each contractor under the emergency procedure. This paragraph does not apply to the requirement requirements specified in sub. (7) and s. 16.705 (5m).

AB940, s. 9 Section 9. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert the following amounts for the purposes indicated: - See PDF for table

AB940, s. 10 Section 10. 20.240 of the statutes is created to read:

AB940,7,15 20.240 Contract review board. There is appropriated to the contract review board for the following program:

AB940,7,18 (1) Review of state contractual services agreements. (a) General program operations. The amounts in the schedule for the general program operations of the contract review board.

AB940, s. 11 Section 11. 23.41 (5) of the statutes is amended to read:

AB940,8,14 23.41 (5) Each contract for construction work entered into by the department under this section shall be awarded on the basis of bids or competitive sealed proposals in accordance with procedures established by the department. Each contract for construction work shall be awarded to the lowest responsible bidder or the person submitting the most advantageous competitive sealed proposal as determined by the department. If the bid of the lowest responsible bidder or the proposal of the person submitting the most advantageous competitive sealed proposal is determined by the department to be in excess of the estimated reasonable value of the work or not in the public interest, the department may reject all bids or competitive sealed proposals. Every such contract is exempted from ss. 16.70 to 16.705 (5), 16.705 (6) to 16.75, 16.755, 16.76, 16.767 to 16.77, 16.78 to 16.82, 16.855, 16.87, and 16.89, but ss. 16.705 (5m), 16.528, 16.754, and 16.765 apply to the contract. Every such contract involving an expenditure of more than $60,000 is not valid until the contract is approved by the governor.

AB940, s. 12 Section 12. 25.18 (1) (a) of the statutes is amended to read:

AB940,8,22 25.18 (1) (a) Notwithstanding s. 20.930 and all provisions of subch. IV of ch. 16 and s. 20.930, except s. 16.705 (5m), employ special legal or investment counsel in any matters arising out of the scope of its investment authority. The employment of special legal counsel shall be with the advice and consent of the attorney general whenever such special counsel is to be compensated by the board. Any expense of counsel so employed shall be borne by the fund for which the services shall be furnished.

AB940, s. 13 Section 13. 25.18 (1) (f) of the statutes is amended to read:

AB940,9,5 25.18 (1) (f) Maintain and repair any building or other structure or premises which it owns in fee or in which it owns the beneficial interest and, notwithstanding all provisions of subch. IV or V of ch. 16 , except s. 16.705 (5m), it shall have exclusive authority to make such agreements and enter into such contracts as it deems necessary for such purpose. All noncapital costs under this paragraph shall be charged to the current income accounts of the funds having an interest in the building, structure or premises.

AB940, s. 14 Section 14. 25.18 (1) (m) of the statutes is amended to read:

AB940,9,12 25.18 (1) (m) Notwithstanding all provisions of subchs. IV and V of ch. 16, except s. 16.705 (5m), employ professionals, contractors or other agents necessary to evaluate or operate any property if a fund managed by the board has an interest in, or is considering purchasing or lending money based upon the value of, that property. Costs under this paragraph shall be paid by the fund and charged to the appropriate account under s. 40.04 (3).

AB940, s. 15 Section 15. 84.01 (13) of the statutes, as affected by 2005 Wisconsin Act .... (Assembly Bill 105), is amended to read:

AB940,9,25 84.01 (13) Engineering services. The department may engage such engineering, consulting, surveying, or other specialized services as it deems advisable. Any engagement of services under this subsection is exempt from ss. 16.70 to 16.705 (5), 16.705 (6) to 16.75, 16.755 to 16.82, and 16.85 to 16.89, but ss. 16.528, 16.705 (5m), 16.752, and 16.754 apply to such engagement. Any engagement involving an expenditure of $3,000 or more shall be by formal contract approved by the governor. The department shall conduct a uniform cost-benefit analysis, as defined in s. 16.70 (3g), of each proposed engagement under this subsection that involves an estimated expenditure of more than $25,000 in accordance with standards prescribed by rule of the department. The department shall review periodically, and before any renewal, the continued appropriateness of contracting pursuant to each engagement under this subsection that involves an estimated expenditure of more than $25,000.

AB940, s. 16 Section 16. 84.06 (2) (a) of the statutes is amended to read:

AB940,10,23 84.06 (2) (a) All such highway improvements shall be executed by contract based on bids unless the department finds that another method as provided in sub. (3) or (4) would be more feasible and advantageous. Bids shall be advertised for in the manner determined by the department. Except as provided in s. 84.075, the contract shall be awarded to the lowest competent and responsible bidder as determined by the department. If the bid of the lowest competent bidder is determined by the department to be in excess of the estimated reasonable value of the work or not in the public interest, all bids may be rejected. The department shall, so far as reasonable, follow uniform methods of advertising for bids and may prescribe and require uniform forms of bids and contracts. Except as provided in par. (b), the secretary shall enter into the contract on behalf of the state. Every such contract is exempted from ss. 16.70 to 16.705 (5), 16.705 (6) to 16.75, 16.755 to 16.82, 16.87 and 16.89, but ss. 16.528, 16.705 (5m), 16.752 , and 16.754 apply to the contract. Any such contract involving an expenditure of $1,000 or more shall not be valid until approved by the governor. The secretary may require the attorney general to examine any contract and any bond submitted in connection with the contract and report on its sufficiency of form and execution. The bond required by s. 779.14 (1m) is exempt from approval by the governor and shall be subject to approval by the secretary. This subsection also applies to contracts with private contractors based on bids for maintenance under s. 84.07.

AB940, s. 17 Section 17. 84.06 (3) of the statutes is amended to read:

AB940,11,17 84.06 (3) Contracts with county or municipality; direct labor; materials. If the department finds that it would be more feasible and advantageous to have the improvement performed by the county in which the proposed improvement is located and without bids, the department may, by arrangement with the county highway committee of the county, enter into a contract satisfactory to the department to have the work done by the county forces and equipment. In such contract the department may authorize the county to purchase, deliver, and store materials and may fix the rental rates of small tools and equipment. The contract shall be between the county and the state and shall not be based on bids, and may be entered into on behalf of the county by the county highway committee and on behalf of the state by the secretary. Such contract is exempted from s. 779.14 and from all provisions of chs. 16 and 230, except s. ss. 16.705 (5m) and 16.754. If the total estimated indebtedness to be incurred exceeds $5,000 the contract shall not be valid until approved by the governor. The provisions of this subsection relating to agreements between a county and the state shall also authorize and apply to such arrangements between a city, town, or a village and the state. In such cases, the governing body of the city, town, or village shall enter into the agreement on behalf of the municipality.

AB940, s. 18 Section 18. 84.06 (4) of the statutes is amended to read:

AB940,12,12 84.06 (4) Special contracts with railroads and utilities. If an improvement undertaken by the department will cross or affect the property or facilities of a railroad or public utility company, the department may, upon finding that it is feasible and advantageous to the state, arrange to perform portions of the improvement work affecting such facilities or property or perform work of altering, rearranging, or relocating such facilities by contract with the railroad or public utility. Such contract shall be between the railroad company or public utility and the state and need not be based on bids. The contract may be entered into on behalf of the state by the secretary. Every such contract is exempted from s. 779.14 and from all provisions of chs. 16 and 230, except ss. 16.528, 16.705 (5m), 16.752, and 16.754. No such contract in which the total estimated debt to be incurred exceeds $5,000 shall be valid until approved by the governor. As used in this subsection, "public utility" means the same as in s. 196.01 (5), and includes a telecommunications carrier as defined in s. 196.01 (8m), and "railroad" means the same as in s. 195.02. "Property" as used in this subsection includes but is not limited to tracks, trestles, signals, grade crossings, rights-of-way, stations, pole lines, plants, substations, and other facilities. Nothing in this subsection shall be construed to relieve any railroad or public utility from any financial obligation, expense, duty, or responsibility otherwise provided by law relative to such property.

AB940, s. 19 Section 19. 85.015 of the statutes is amended to read:

AB940,12,18 85.015 Transportation assistance contracts. All contracts entered into under this chapter to provide financial assistance in the areas of railroads, urban mass transit, specialized transportation, and harbors are subject to ss. 16.528 and, 16.752, and 16.705 (5m) but are exempt from ss. 16.70 to 16.705 (5), 16.705 (6) to 16.75, 16.755 to 16.82, and 16.85 to 16.89.

AB940, s. 20 Section 20. 102.81 (2) of the statutes is amended to read:

AB940,13,7 102.81 (2) The department may retain an insurance carrier or insurance service organization to process, investigate and pay claims under this section and may obtain excess or stop-loss reinsurance with an insurance carrier authorized to do business in this state in an amount that the secretary determines is necessary for the sound operation of the uninsured employers fund. In cases involving disputed claims, the department may retain an attorney to represent the interests of the uninsured employers fund and to make appearances on behalf of the uninsured employers fund in proceedings under ss. 102.16 to 102.29. Section 20.918 and all provisions of subch. IV of ch. 16, except s. 16.705 (5m), do not apply to an attorney hired under this subsection. The charges for the services retained under this subsection shall be paid from the appropriation under s. 20.445 (1) (hp). The cost of any reinsurance obtained under this subsection shall be paid from the appropriation under s. 20.445 (1) (sm).

AB940, s. 21 Section 21. 221.0903 (4) (b) of the statutes is amended to read:

AB940,13,15 221.0903 (4) (b) Contracts for examination services. The division may enter into contracts with any bank supervisory agency with concurrent jurisdiction over a state bank or an in-state branch of an out-of-state state bank to engage the services of the agency's examiners at a reasonable rate of compensation, or to provide the services of the division's examiners to the agency at a reasonable rate of compensation. Contracts entered into under this paragraph are exempt from ss. 16.70 to 16.705 (5), 16.705 (6) to 16.76, and 16.767 to 16.82.

AB940, s. 22 Section 22. 655.27 (2) of the statutes is amended to read:

AB940,14,3 655.27 (2) Fund administration and operation. Management of the fund shall be vested with the board of governors. The commissioner shall either provide staff services necessary for the operation of the fund or, with the approval of the board of governors, contract for all or part of these services. Such a contract is subject to s. ss. 16.750 (5m) and 16.765, but is otherwise exempt from subch. IV of ch. 16. The commissioner shall adopt rules governing the procedures for creating and implementing these contracts before entering into the contracts. At least annually, the contractor shall report to the commissioner and to the board of governors regarding all expenses incurred and subcontracting arrangements. If the board of governors approves, the contractor may hire legal counsel as needed to provide staff services. The cost of contracting for staff services shall be funded from the appropriation under s. 20.145 (2) (u).

AB940, s. 23 Section 23. Nonstatutory provisions.

AB940,14,7 (1) Initial terms. Notwithstanding section 15.55 of the statutes, as created by this act, the members who are initially appointed to serve as members of the contract review board shall serve for terms expiring on May 1, 2007.

AB940,14,10 (2) Authorized positions. There is authorized for the contract review board 1.0 FTE GPR director position and 1.0 FTE GPR support position to be funded from the appropriation under section 20.240 (1) (a) of the statutes, as created by this act.

AB940,14,11 (End)