2009 - 2010 LEGISLATURE
January 7, 2010 - Introduced by Senators Lassa, Carpenter, Coggs, Darling,
Hansen, Holperin, Kreitlow, Lehman, Risser, Taylor, Vinehout
and Wirch,
cosponsored by Representatives Jorgensen, Barca, Mason, Roys, Vruwink,
Berceau, Cullen, Hilgenberg, Hixson, Milroy, Molepske Jr., Pasch, Pocan,
Pope-Roberts, Smith, Turner
and Zepnick. Referred to Committee on Ethics
Reform and Government Operations.
SB447,1,11 1An Act to renumber and amend 16.705 (1), 16.705 (2), 16.705 (3) and 16.705
2(6); to amend 16.705 (7), 16.705 (8) (a), 23.41 (5), 25.18 (1) (a), 25.18 (1) (f), 25.18
3(1) (m), 84.01 (13), 84.06 (2) (a), 84.06 (3), 84.06 (4), 85.015, 102.81 (2), 165.08,
4165.25 (11), 221.0903 (4) (b), 801.02 (1), 803.09 (1) and (2), 804.01 (2) (intro.),
5805.04 (2m) and 893.981; and to create 16.42 (1) (h), 16.46 (10), 16.705 (1) (a)
63., (b) and (c), 16.705 (2) (a) 3. and 4., (b) and (c), 16.705 (3) (am) 4., 16.705 (3)
7(bm), 16.705 (4), 16.705 (5g), (5m) and (5r), 16.705 (6) (a), 16.705 (9), 16.75 (1)
8(a) 4., 16.771, 16.871, 20.932, 66.0902 and 84.06 (13) of the statutes; relating
9to:
state contractual services and false claims submitted to state and local
10governments, requiring the exercise of rule-making authority, and providing
11penalties.
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. 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.
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 DOA
to review each cost-benefit analysis or continued appropriateness review and certify
them as accurate, and 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.
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 also requires the Department of Transportation (DOT), not a
contractor, to conduct all tests of concrete thickness on its highway improvement
projects. Under the bill, DOT must also 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.
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:
SB447, s. 1 1Section 1. 16.42 (1) (h) of the statutes is created to read:
SB447,4,52 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.
SB447,4,76 2. The total amount of agency base level funding used to pay for the contracted
7positions under subd. 1.
SB447,5,3
13. The amount of funding requested for contracted positions identified under
2subd. 1 and an identification of the appropriation or appropriations that will be used
3to fund the contracted positions.
SB447, s. 2 4Section 2. 16.46 (10) of the statutes is created to read:
SB447,5,85 16.46 (10) (a) A statement of the number of contracted positions providing
6services for each state agency that are paid from the agency's base level funding and
7an identification of the appropriation or appropriations used to fund the contracted
8positions.
SB447,5,109 (b) A statement of the total amount of each state agency's base level funding
10used to pay for the contracted positions.
SB447,5,1311 (c) A statement of the amount of funding requested by state agencies for
12contracted positions and an identification of the appropriation or appropriations that
13will be used to fund the contracted positions.
SB447, s. 3 14Section 3. 16.705 (1) of the statutes is renumbered 16.705 (1) (a) (intro.) and
15amended to read:
SB447,5,1716 16.705 (1) (a) (intro.) The department or its agents may contract for services
17which if at least 2 of the following conditions apply:
SB447,5,18 181. The services can be performed more economically or by contract.
SB447,5,21 192. When considering expertise of the current full-time positions, whether filled
20or vacant, the services can be performed more
efficiently by such contract than by use
21of employees in those positions
.
SB447,5,23 22(d) The department shall, by rule, prescribe uniform procedures for
23determining whether services are appropriate for contracting under this subsection.
SB447, s. 4 24Section 4. 16.705 (1) (a) 3., (b) and (c) of the statutes are created to read:
SB447,6,2
116.705 (1) (a) 3. When considering timeliness of delivery, the services can be
2performed more efficiently by contract.
SB447,6,53 (b) Notwithstanding par. (a), the department or its agents may contract for any
4services if the contract will be for a period that is not more than one year and if the
5contract is not eligible for renewal.
SB447,6,66 (c) No contract under this section may be automatically renewed.
SB447, s. 5 7Section 5. 16.705 (2) of the statutes is renumbered 16.705 (2) (a) (intro.) and
8amended to read:
SB447,6,119 16.705 (2) (a) (intro.) The department shall promulgate rules for the
10procurement of contractual services by the department and its designated agents,
11including but not limited to rules the following:
SB447,6,13 121. Rules prescribing approval and monitoring processes for contractual service
13contracts.
SB447,7,3 142. Except as provided in par. (b), a requirement for agencies to conduct a
15uniform cost-benefit analysis of each proposed contractual service procurement
16involving an estimated expenditure of more than $25,000 in accordance with
17standards prescribed in the rules, and, except as provided in par. (b), a requirement
18for agencies to review periodically, and before any renewal, the continued
19appropriateness of contracting under each contractual services agreement involving
20an estimated expenditure of more than $25,000. The rules shall require the
21cost-benefit analysis or continued appropriateness review to compare the costs of
22using a current employee who is providing, or who would provide, the service, or a
23similarly situated employee if the current position is vacant, to the costs of using an
24employee under a contract and shall require the comparison to include all relevant
25costs including the salary and fringe benefit costs, costs of any training that will be

1necessary to fulfill the task, materials, inspections, unemployment insurance,
2transitional costs, liability insurance, overhead, facility costs, taxes, and other
3incidental costs.
SB447,7,12 4(d) Each officer requesting approval to engage any person to perform
5contractual services shall submit to the department written justification for such
6contracting which shall include a description of the contractual services to be
7procured, justification of need, justification for not contracting with other agencies,
8a specific description of the scope of contractual services to be performed, and
9justification for the procurement process if a process other than competitive bidding
10is to be used. The department may not approve any contract for contractual services
11unless it is satisfied that the justification for contracting conforms to the
12requirements of this section and ss. 16.71 to 16.77.
SB447, s. 6 13Section 6. 16.705 (2) (a) 3. and 4., (b) and (c) of the statutes are created to read:
SB447,7,1614 16.705 (2) (a) 3. A requirement that each agency preparing a cost-benefit
15analysis or continued appropriateness review submit the analysis or review to the
16department for certification of accuracy.
SB447,7,2017 4. A requirement that each agency that contracts for services under this section
18perform periodic audits on cost-benefit analyses or continued appropriateness
19reviews and contracts that required a cost-benefit analysis or continued
20appropriateness review.
SB447,8,221 (b) A cost-benefit analysis or continued appropriateness review is not required
22for services that federal or state law requires to be performed by contract; services
23that are incidental to the purchase of a commodity; services that a state employee
24may not or does not perform; or services that must be provided per a contract, license,

1or warranty by the original equipment manufacturer or publisher unless the
2contract, license, or warranty has expired or is no longer valid.
SB447,8,43 (c) 1. Neither a cost-benefit analysis nor a continued appropriateness review
4may be conducted by contract.
SB447,8,65 2. A cost-benefit analysis may not be shown to a bidder prior to the issuance
6of a letter of intent to contract.
SB447, s. 7 7Section 7. 16.705 (3) of the statutes is renumbered 16.705 (3) (am), and 16.705
8(3) (am) (intro.), 1. and 2., as renumbered, are amended to read:
SB447,8,129 16.705 (3) (am) (intro.) The director of the office of state employment relations,
10prior to award, under conditions established by rule of the department, shall review
11contracts for contractual services in order to ensure that agencies do all of the
12following
:
SB447,8,1313 1. Properly utilize the services of state employees; .
SB447,8,1514 2. Evaluate the feasibility of using limited term appointments prior to entering
15into a contract for contractual services; and.
SB447, s. 8 16Section 8. 16.705 (3) (am) 4. of the statutes is created to read:
SB447,8,1917 16.705 (3) (am) 4. Notify all representatives of interested collective bargaining
18units under subch. V of ch. 111 by providing them with a copy of all documents
19soliciting bids or proposals.
SB447, s. 9 20Section 9. 16.705 (3) (bm) of the statutes is created to read:
SB447,9,221 16.705 (3) (bm) The director of the office of state employment relations, after
22the issuance of a letter of intent to contract, under conditions established by rule of
23the department, shall review contracts for contractual services in order to ensure
24that agencies have notified all representatives of interested collective bargaining

1units under subch. V of ch. 111 by providing them with a copy of the letter of intent
2to contract.
SB447, s. 10 3Section 10. 16.705 (4) of the statutes is created to read:
SB447,9,114 16.705 (4) Any person submitting a bid or proposal, or any representative of
5an interested collective bargaining unit under subch. V of ch. 111, that is aggrieved
6by a solicitation for bids or by a letter of intent to contract may protest to the agency
7that solicited or awarded the contractual services. The protesting party shall file a
8written notice of intent to protest with the agency that solicited or awarded the
9contractual services within 7 working days after the solicitation or the letter,
10whichever is appropriate, and shall serve a written protest within 12 working days
11after issuance of the solicitation or the letter, whichever is appropriate.
SB447, s. 11 12Section 11. 16.705 (5g), (5m) and (5r) of the statutes are created to read:
SB447,9,1513 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).
SB447,9,17 16(5m) The division of legal services shall promulgate rules on all of the
17following:
SB447,9,2118 (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.
SB447,9,2322 (b) Standard performance measures, including quantifiable benchmark
23indicators, to evaluate persons performing contractual services.
SB447,9,25 24(5r) (a) 1. If the cost of the contractual services exceeds $25,000, any
25expenditures of the person performing the contractual services that exceed its

1original bid by 10 percent or more may not be paid unless the secretary approves
2payment of the increased amount and provides, in writing, to the joint committee on
3finance his or her rationale for the approval.
SB447,10,84 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.
SB447,10,149 (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, s. 12 15Section 12. 16.705 (6) of the statutes is renumbered 16.705 (6) (b) and
16amended to read:
SB447,10,2417 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, s. 13 25Section 13. 16.705 (6) (a) of the statutes is created to read:
SB447,11,4
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, s. 14 5Section 14. 16.705 (7) of the statutes is amended to read:
SB447,11,96 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, s. 15 10Section 15. 16.705 (8) (a) of the statutes is amended to read:
SB447,11,1211 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, s. 16 13Section 16. 16.705 (9) of the statutes is created to read:
SB447,11,1614 16.705 (9) (a) In this subsection, "federal economic stimulus funds" means
15federal moneys received by the state, pursuant to federal legislation enacted during
16the 111th Congress for the purpose of reviving the economy of the United States.
SB447,11,2317 (b) Except as provided in pars. (c) and (d), if in any fiscal year an agency in the
18executive branch is prohibited from hiring employees to fill vacant positions or its
19employees are required to serve an unpaid leave of absence, the agency may not enter
20into, renew, or extend any contractual services contracts with private contractors or
21consultants for the remainder of that fiscal year for the performance of services of
22agency employees who would have performed the services had they been hired or had
23they not have been required to take an unpaid leave of absence.
SB447,12,524 (c) Paragraph (b) shall not apply to contractual services contracts that are
25funded with federal economic stimulus funds and the secretary determines that any

1deadlines imposed by the federal government on the expenditure of the federal
2economic stimulus funds cannot be met without an agency's entering into, renewing,
3or extending a contractual services contract or a cost-benefit analysis is conducted
4that demonstrates that a contractual services contract would be more cost effective
5and efficient than having state employees perform the services.
SB447,12,76 (cm) Paragraph (b) shall not apply to contracts entered into, renewed, or
7extended under s. 977.08.
SB447,12,168 (d) An agency in the executive branch may submit a written request to the joint
9committee on finance to have par. (b) not apply to the agency with respect to a specific
10contractual services contract. If the cochairpersons of the committee do not notify
11the agency within 14 working days after the date of the agency's submittal that the
12committee intends to schedule a meeting to review the request, approval of the
13request is granted. If, within 14 working days after the date of the agency's request
14submittal, the cochairpersons of the committee notify the agency that the committee
15intends to schedule a meeting to review the request, the request may be granted only
16as approved by the committee.
SB447, s. 17 17Section 17. 16.75 (1) (a) 4. of the statutes is created to read:
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