Researcher: TA Page 1 4/13/23
OLR Bill Analysis
sSB 1223
AN ACT CONCERNING THE STATE CONTRACTING STANDARDS
BOARD.
SUMMARY
This bill makes several changes that expand the State Contracting
Standards Board’s (SCSB) powers and duties. It grants the board certain
protections against modifications to its budget request and reductions
in its allotments. It also subjects (1) quasi-public agencies to the board’s
full authority, including the law on privatization contracts, by making
them “state contracting agencies” under the board’s authorizing
statutes and (2) the UConn Health Center (UCHC) Finance Corporation
to the privatization statute. Additionally, it makes other changes to the
privatization law (e.g., adding to the analyses that agencies must
conduct for a proposed privatization).
Separately, the bill requires agency procurement officers to advise
bidders, proposers, and contractors about certain rights enforced by
SCSB (e.g., the right to contest a contract solicitation or award). It also
(1) requires contracting agencies to post information on their websites
about certain emergency procurements they enter into and (2) limits, to
emergency situations, the Department of Administrative Services’
(DAS) use of on-call construction services consultants.
Lastly, the bill makes other minor, technical, and conforming
changes.
EFFECTIVE DATE: July 1, 2023, except that the provision on budget
request modifications and allotment reductions is effective upon
passage.
§§ 1 & 3 — SCSB BUDGET AND S TAFFING
The bill requires the Office of Policy and Management (OPM) 2023SB-01223-R000572-BA.DOCX
Researcher: TA Page 2 4/13/23
secretary to include the SCSB executive director’s estimates of the
board’s expenditure requirements and recommended adjustments and
revisions in the proposed budget documents that OPM submits to the
legislature, without altering them. It also prohibits the governor from
reducing SCSB’s allotment requisitions or allotments in force. Existing
law grants these same protections to the (1) Office of State Ethics (CGS
§ 1-81a), (2) Freedom of Information Commission (CGS § 1-205a), and
(3) State Elections Enforcement Commission (CGS § 9-7c).
Separately, the bill requires that SCSB employ at least five full-time
employees, subject to the State Personnel Act.
§§ 2-18, 22-32 & 34-44 — SCSB AUTHORITY OVER QUASI-PUBLIC
AGENCIES
Under current law, SCSB has limited authority over quasi-public
agencies, as, with one exception, SCSB’s authorizing statutes generally
exclude them from the definition of “state contracting agency.” (Most of
SCSB’s powers and duties apply to state contracting agencies only, see
BACKGROUND .)
The bill instead subjects quasi-public agencies to SCSB’s full
authority, with limited exceptions. It does so by adding quasi-public
agencies to the definition of “state contracting agency” (see § 2) and
making conforming changes throughout the bill. Under existing law, the
state has 16 quasi-public agencies (CGS § 1-120).
The table below lists a selection of SCSB statutes applicable to state
contracting agencies that the bill extends to quasi-public agencies.
However, the bill does not extend provisions on contractor, bidder, or
proposer suspensions issued by state agencies (§§ 25-27).
Table: Selected SCSB Statutes Applicable to Quasi-Public Agencies Under the Bill
Bill Section
(if applicable)
Statute Description
4 CGS § 4e-3
SCSB may exercise quasi-public agencies’ contracting-
related powers, rights, and duties
5 CGS § 4e-4
SCSB must review, certify, and periodically recertify
quasi-public agency procurement processes
6 CGS § 4e-5 Quasi-public agencies must appoint a procurement officer
— CGS § 4e-6 SCSB must audit each quasi-public agency’s compliance 2023SB-01223-R000572-BA.DOCX
Researcher: TA Page 3 4/13/23
Bill Section
(if applicable)
Statute Description
with procurement laws and regulations every three years
7 CGS § 4e-7
SCSB may, under specified conditions, (1) review and
terminate quasi-public agency contracts and procurement
agreements or (2) restrict or terminate the quasi-public
agency’s ability to enter into contracts or procurement
agreements
10 CGS § 4e-14
Quasi-public agency contracts must contain provisions
ensuring accountability, transparency, and results-based
outcomes, as prescribed by SCSB (it appears SCSB has
not prescribed these standards for state contracting
agencies to date)
11-13 CGS § 4e-16
Quasi-public agencies must comply with the privatization
law (see below)
— CGS § 4e-19
Quasi-public agencies must use specified procurement
methods when purchasing goods and services (these
provisions require SCSB to adopt implementing
regulations before they become operative, but the board
has not adopted them to date)
— CGS § 4e-39
Quasi-public agency solicitations or proposed awards are
subject to cancellation if SCSB finds that a violation of the
law has occurred
28 CGS § 4e-40
SCSB may, after a quasi-public agency contract is
awarded, take certain actions, including terminating the
contract, if SCSB finds it violates the law
Separately, the bill adds four representatives of quasi-public agencies
to the Contracting Standards Advisory Council, two each appointed by
the House speaker and Senate president (§ 8). By law, the council must
meet at least four times per year and make recommendations to SCSB
for improving procurement processes.
§§ 2, 11-14 & 33 — PRIVATIZATION LAW
Application to Quasi-Public Agencies and UCHC Finance
Corporation
The bill applies the privatization law to quasi-public agencies and the
UCHC Finance Corporation. For the corporation, it applies specifically
to joint ventures, shared services agreements, and contracts it or one of
its subsidiaries enters into, and specifies that they are subject to SCSB’s
jurisdiction to the same extent as a constituent unit of higher education.
(Under existing law, the constituent units are subject to the privatization
law.) Existing law allows the corporation to enter into joint ventures or 2023SB-01223-R000572-BA.DOCX
Researcher: TA Page 4 4/13/23
shared service agreements to procure hospital facilities and to contract
for services necessary or useful in connection with procuring hospital
facilities.
Under the privatization law, if a state contracting agency seeks to
enter into a contract that privatizes services performed by state
employees, it generally must conduct a cost-benefit analysis and submit
a business case to SCSB for its approval. The business case must include,
among other things, the cost-benefit analysis and 11 other analyses (the
bill adds one more, see below) relating to the privatized service, such as
its goals and their rationale, and options for achieving them (CGS § 4e-
16(d)). An agency may publish notice soliciting bids for a privatization
contract only after the board approves the business case (CGS § 4e-16(i)).
For privatization contracts not subject to this requirement (i.e.,
contracts for services that are currently privatized), contracting agencies
must instead evaluate the contract to determine if entering into or
renewing it is the most cost-effective way to deliver the service. (The bill
also expands SCSB’s role in this evaluation, see below.)
Other Changes
Business Case. As described above, existing law requires
contracting agencies to develop a business case, consisting of multiple
analyses, for a service it seeks to privatize. The bill requires that the
business case additionally include an analysis of a proposed contract’s
potential impact on workers of color or workers who are women,
including whether it will lessen or increase historical patterns that
produce inequities between these workers and other workers.
Core Governmental Function. The bill expands the definition of
“core governmental function” under the privatization statute to include
providing essential human services to state residents who would
otherwise lack the support necessary to assure basic human needs. The
privatization statute establishes a rebuttable presumption that “core
governmental functions” should not be privatized.
Cost-Effectiveness Evaluation. For privatization contracts not
subject to the business case requirement (i.e., contracts for services that 2023SB-01223-R000572-BA.DOCX
Researcher: TA Page 5 4/13/23
are currently privatized), current law requires contracting agencies to
evaluate the contract, using a template the OPM secretary prescribes, to
determine if entering into or renewing it is the most cost-effective way
to deliver the service. The bill instead requires the secretary to prescribe
the template in consultation with SCSB. It also requires the board, rather
than the secretary, to verify the agency’s evaluation. It similarly allows
the board, rather than the secretary, to waive the evaluation
requirement because of exigent or emergent circumstances.
§ 6 — AGENCY PROCUREMENT O FFICERS
Existing law requires the head of each state contracting agency to
appoint an agency procurement officer who must, among other things,
(1) assure that contractors are properly screened before a contract award
and (2) evaluate contractor performance during and at the conclusion of
a contract. (The bill extends this requirement to quasi-public agencies.)
The bill additionally requires procurement officers to advise bidders,
proposers, and contractors about certain rights enforced by SCSB. These
are (1) bidders’ and proposers’ right to contest a contract solicitation or
award and (2) SCSB’s authority to determine that a solicitation,
proposed award, or actual award violated the law.
Under the bill, the procurement officers must ensure that (1) each bid,
RFP (request for proposals), or other solicitation for goods and services
contains a notice about these rights; (2) contractors are advised about
these rights before entering a contract; and (3) unsuccessful bidders,
proposers, and respondents are advised about these rights when the
contract is awarded.
§§ 17-21 — EMERGENCY PROCUREMEN TS
Purchases of $10,000 or Less (§ 17)
The law allows SCSB, in consultation with the DAS commissioner, to
waive competitive bidding or negotiation requirements for minor,
nonrecurring, or emergency purchases of $10,000 or less. The bill allows
it to do so upon application by a contracting agency. It requires
contracting agencies that obtain this waiver to post notice of the
emergency purchase on their websites before making the purchase. 2023SB-01223-R000572-BA.DOCX
Researcher: TA Page 6 4/13/23
(Existing law also allows the DAS commissioner to waive these
requirements for similar reasons without consulting the board (CGS §
4a-57(b)).)
Threats to Public Health, Welfare, or Safety (§ 18)
Current law requires SCSB to adopt regulations allowing emergency
procurements when a threat to public health, welfare, or safety exists.
(In practice, the board has not done so.) The bill instead directly allows
contracting agencies to enter into these procurements and makes the
board’s adoption of regulations permissive.
The bill requires contracting agencies to (1) notify SCSB about the
need for the procurement and (2) post on their websites their written
determination of the basis for the emergency and selection of the
particular contractor. As under existing law, this determination must
also be in the contract file and sent to the governor and legislative
leaders.
Existing law allows the DAS commissioner or the state’s chief
information officer to allow emergency procurements, subject to the
Standardization Committee’s approval if the cost is $50,000 or more
(CGS § 4a-58).
On-Call Construction Consultant Contracts (§§ 19 & 20)
The law allows the DAS commissioner to establish a list of “on call”
construction services consultants (e.g., architects, professional
engineers, accountants, and others, see BACKGROUND). Under the
bill, DAS may enter into contracts with on-call consultants, without
inviting responses from the consultants, only for an emergency
procurement due to a threat to public health, welfare, or safety. It makes
a conforming change to a statute concerning on-call consultants
specifically for Department of Energy and Environmental Protection
and Military Department projects.
“Fast-Track” Projects (§ 21)
The bill limits, to emergency procurements, DAS’s ability to use
existing law’s “fast-track authority” for five specified categories of
capital projects. 2023SB-01223-R000572-BA.DOCX
Researcher: TA Page 7 4/13/23
Under the fast-track process, the DAS commissioner submits at least
three qualified general contractors who are prequalified to an award
panel, which then makes a recommendation to the commissioner. The
law establishes five fast-track project categories: a community court
project, the downtown Hartford higher education center project, a
correctional facility project, a juvenile detention center project, and
Connecticut State University System student dormitories.
BACKGROUND
SCSB Authority Over Quasi-Public Agencies
Attorney General Opinion. In a 2021 opinion (Attorney General
Opinion 2021-01), the attorney general concluded that most SCSB
statutes give the board authority over state contracting agencies only,
with only limited authority over quasi-public agencies. He noted that
although the board has authority over certain bid contests involving
quasi-public agencies, generally its authority over quasi-public agencies
“is much more limited and circumscribed relative to its authority over
state contracting agencies.”
Exceptions. Under current law, the State Education Resource Center
(SERC) is a state contracting agency under an SCSB statute governing
procurement methods (CGS § 4e-19). Additionally, the 2021 budget
implementer act made the Connecticut Port Authority (CPA) a state
contracting agency until July 1, 2026, under all SCSB authorizing
statutes except the privatization law (PA 21-2, June Special Session, §
309).
On-Call Contracts
An on-call contract defines a broad range of consultant services and
is generally valid for two to three years. An on-call contract is generally
not connected to a specific project; rather, DAS subsequently issues task
letters to firms with on-call contracts that identify a specific scope of
services to be performed and the fee for those services.
DAS must establish selection panels for evaluating consultant
services proposals (including those for on-call contracts) if the value of
the services exceeds $500,000. The panels must submit a list of the most
qualified firms to the DAS commissioner for his consideration. 2023SB-01223-R000572-BA.DOCX
Researcher: TA Page 8 4/13/23
Related Bill
HB 5692, reported favorably by the Government Administration and
Elections Committee, makes SCSB’s authority over CPA permanent by
removing current law’s July 1, 2026, sunset date.
COMMITTEE ACTION
Government Administration and Elections Committee
Joint Favorable Substitute
Yea 16 Nay 3 (03/24/2023)