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OLR Bill Analysis
HB 6867
AN ACT CONCERNING COMPETITIVE NEGOTIATION FOR
CERTAIN STATE CONTRACTS AND OTHER PROCUREMENT
PRACTICES.
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 does so by expanding the
definition of “competitive negotiation” to include any open and fair
process, as described in the bill, as an alternative to using requests for
proposals (RFPs) to solicit these procurements.
The bill also increases state agencies’ procurement flexibility by (1)
increasing, from $20,000 to $50,000, the cost threshold at which they
must use competitive solicitation methods to enter into the PSA and (2)
generally eliminating a PSA’s length as a criterion for determining
whether a competitive solicitation is required.
These changes also generally apply to purchase-of-service (POS)
contracts as, by law, these contracts are subject to the same requirements
as PSAs (see BACKGROUND).
Among other things, the bill also (1) requires the requesting state
agency, rather than the Office of Policy and Management (OPM)
secretary, to notify the state auditors about certain PSAs for audit
services and (2) eliminates a provision in current law that deems PSA
applications requiring approval by the OPM secretary approved if he
does not act on them within a set time period. Lastly, it makes technical
changes, including removing obsolete language.
EFFECTIVE DATE: July 1, 2023
§§ 1, 5 & 7 — PROCUREMENT METHODS 2023HB-06867-R000621-BA.DOCX
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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
increases the thresholds at which these requirements apply, see below.)
Current law defines “competitive negotiation” as a contracting
procedure in which an agency issues an RFP and 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 any open and fair process in which all qualified entities
have an equal opportunity to be selected to provide the services. It also
specifies that an RFP is a competitive procurement regardless of how
many responses are received.
Existing law requires the OPM secretary to set 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 other forms of competitive
negotiation.
Under existing law, PSAs are provided by a “personal services
contractor,” which is a person, firm, or corporation hired by a state
agency to provide services, but is not employed by the state. Current
law excludes several types of contractors from this definition (e.g.,
construction services consultants). The bill additionally excludes
transportation service contracts entered into by the transportation
commissioner.
Contractual Services (§ 7)
The bill makes parallel changes 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 any open and fair process in
which all qualified entities have an equal opportunity to be selected,
rather than only by an RFP as under current law. It also specifies that an
RFP for these services is a competitive procurement regardless of how 2023HB-06867-R000621-BA.DOCX
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many responses are received. By law, contractual services generally
must be awarded through competitive bidding or competitive
negotiation (CGS § 4a-57).
“Contractual services” include laundry and cleaning; pest control;
janitorial service; security; advertising; renting, repairing, and
maintaining state-owned personal property; and other service
arrangements where services are not provided by state employees. The
bill removes obsolete references to photostating and mimeographing.
§§ 2-4 & 6 — PSA PROCUREMENTS
Cost Thresholds
Current law (1) prohibits state agencies from executing a PSA costing
more than $50,000 or lasting longer than one year without the OPM
secretary’s approval and (2) requires the purchasing agency to use
competitive negotiation or competitive quotations for these
procurements unless it receives a waiver from the OPM secretary to
allow a sole source purchase.
The bill eliminates a PSA’s length as a factor for determining whether
these requirements apply, thereby applying them to PSAs only when
their cost exceeds $50,000. It makes a conforming change by eliminating
a provision in current law requiring agencies to get the OPM secretary’s
approval before executing an amendment to a PSA whose original cost
was $50,000 or less if the amendment extends the agreement beyond a
one-year period.
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 makes a conforming change by increasing, 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. 2023HB-06867-R000621-BA.DOCX
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(The bill does not specify what requirements apply when a PSA costs
$50,000 or less but lasts for more than one year.)
For PSAs requiring the OPM secretary’s approval for the PSA or a
sole source purchase waiver, 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.
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. The
requirement applies to audit services PSAs (1) requiring the OPM
secretary’s approval (e.g., costing more than $50,000) 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 at least seven days before
submitting the application to the OPM secretary. It requires the auditors
to advise the purchasing agency, rather than the secretary as under
current law, of the need for the services and whether the auditors could
provide them. Under the bill, the auditors must notify the agency within
the seven-day period before the agency submits the application to the
secretary.
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)). 2023HB-06867-R000621-BA.DOCX
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COMMITTEE ACTION
Government Administration and Elections Committee
Joint Favorable
Yea 13 Nay 6 (03/27/2023)