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OLR Bill Analysis
SB 469
AN ACT CONCERNING THE USE OF COMPETITIVE
PROCUREMENT FOR STATE CONTRACTS.
SUMMARY
This bill expands the types of procurement methods that state
agencies may use when seeking to enter personal services agreements
(PSAs) and contractual services contracts. It allows the agencies to use
“competitive procurement” (i.e., an open and fair process, as defined in
the bill) as an alternative to using requests for proposals (RFPs) to solicit
these procurements.
For PSAs executed on or after July 1, 2023, and lasting for up to one
year, the bill further increases state agencies’ procurement flexibility by
increasing the cost threshold at which they must use competitive
solicitation methods to enter into the PSA. Both of these changes also
generally apply to POS (purchase-of-service) contracts, as by law these
contracts are subject to the same requirements as PSAs (see
BACKGROUND ).
The bill also expands the contents of the Office of Policy and
Management (OPM) secretary’s annual PSA report to the legislature,
which he must submit by October 1 each year. For PSAs executed or
otherwise in effect during the previous fiscal year, existing law requires
him to report, among other things, the amount of all payments to each
individual contractor and the amount of federal and private funds
allocated for them. The bill requires him to additionally report the total
amount of all PSA payments (§ 6).
Additionally, the bill requires the requesting state agency, rather than
the OPM secretary, to notify the state auditors about certain PSAs for
audit services. Lastly, it makes technical changes, including removing
obsolete language. 2022SB-00469-R000490-BA.DOCX
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EFFECTIVE DATE: October 1, 2022
§§ 1, 5 & 7 — COMPETITIVE PROCUREMENT
PSAs (§§ 1 & 5)
The law generally requires state agencies to use competitive
negotiation or competitive quotation when entering into a PSA that
exceeds certain cost thresholds or lasts for more than one year. (The bill
also increases the thresholds at which these requirements apply, see
below.)
Current law defines “competitive negotiation” as a contracting
procedure in which an agency (1) issues an RFP and (2) may negotiate
with respondents for post-submission changes to proposals and prices.
The bill broadens this definition to additionally allow agencies to solicit
proposals using competitive procurement, rather than only by RFP. The
bill defines “competitive procurement” as the purchase of services by a
state agency through an open and fair process where all responsible
sources have an equal opportunity to pursue, and possibly be selected
for, a contract. As with existing law for RFPs, proposals received under
a competitive procurement solicitation may be negotiated post-
submission.
Existing law requires the OPM secretary to establish standards that
state agencies must follow when entering into PSAs, including
standards for developing RFPs. The bill requires that the standards
additionally include provisions for developing forms of competitive
procurement besides RFPs.
Contractual Services (§ 7)
The bill makes a parallel change to the definition of competitive
negotiation that applies to contractual services purchases made by state
agencies. It expands this definition to additionally allow agencies to
solicit contractual services proposals using competitive procurement,
rather than only by RFP as under current law. By law, contractual
services generally must be awarded through competitive bidding or
competitive negotiation (CGS § 4a-57). 2022SB-00469-R000490-BA.DOCX
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“Contractual services” include laundry and cleaning; pest control;
janitorial service; pest control; security; advertising; renting, repairing,
and maintaining state-owned personal property; and other service
arrangements where services are not provided by state employees.
Existing law’s requirements for competitive bidding or negotiation
also apply to supplies, materials, and equipment purchased by state
agencies. However, because the bill’s definition of “competitive
procurement” refers only to services, it appears that the bill makes this
procurement method available only to contractual services.
§§ 2-4 — PSA PROCUREMENTS
Cost Thresholds
The law prohibits state agencies from executing a PSA costing more
than $50,000 or lasting longer than one year without the OPM
secretary’s approval. For PSAs with a term of one year or less, current
law requires agencies to use competitive negotiation or competitive
quotations (1) when possible, for PSAs costing up to $20,000, and (2) for
each PSA that costs more than $20,000 and up to $50,000, unless the
purchasing agency receives a waiver from the OPM secretary to allow a
sole source purchase.
The bill increases both of these thresholds for PSAs executed on or
after July 1, 2023. Specifically, it increases, from $20,000 to $50,000, the
maximum cost of a PSA lasting one year or less for which agencies must
use competitive negotiation or quotations when possible. It makes a
conforming change by requiring these procurement methods for PSAs
that cost more than $50,000 and last for up to one year, unless the OPM
secretary grants the sole source waiver described above.
For PSAs requiring the OPM secretary’s approval (i.e., those with a
term of more than one year or costing more than $50,000), existing law
requires him to act on the application within 15 days after receiving it.
The bill eliminates a provision in current law that deems the application
approved if he does not act within this time period.
2022SB-00469-R000490-BA.DOCX
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Audit Services
Existing law requires that the state auditors be given an opportunity
to review certain PSA applications for audit services and advise whether
they are necessary and, if so, could be provided by the auditors. This
requirement applies to audit services PSAs (1) costing more than $50,000
or lasting for more than one year or (2) for which the purchasing agency
requests a sole source procurement waiver from the OPM secretary (see
above).
Current law requires the secretary to immediately notify the auditors
of these applications upon receipt. The bill instead requires the
purchasing agency to notify the auditors of these applications before
submitting them to the OPM secretary. It requires the auditors to advise
both the purchasing agency and the secretary (rather than only the
secretary as current law provides) of the need for the services and
whether the auditors could provide them.
BACKGROUND
POS Contracts
By law, a POS contract is one between a state agency and a private
provider organization or municipality to obtain direct health and
human services for agency clients and generally not for administrative
or clerical services, material goods, training, or consulting service. The
definition does not include a contract with an individual. The law
subjects POS contract requirements to the same procurement
requirements as PSAs (CGS § 4-70b(a) & (e)).
COMMITTEE ACTION
Government Administration and Elections Committee
Joint Favorable
Yea 12 Nay 6 (03/29/2022)