81R3841 JJT-F
By: Dukes H.B. No. 581
A BILL TO BE ENTITLED
AN ACT
relating to outsourcing a service performed by a state agency to a
private commercial contractor.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2162.103, Government Code, is amended
to read as follows:
Sec. 2162.103. COST COMPARISON AND CONTRACT
CONSIDERATIONS. (a) In comparing the cost of providing a service,
the council shall conduct and consider the conclusions of
cost-benefit analyses that compare the costs and benefits of
[consider the]:
(1) a private contractor's performance of the service,
including considering the cost of supervising the work of a private
contractor; [and]
(2) [cost of] a state agency's performance of the
service, including considering the cost of:
(A) services provided by [the costs of] the
comptroller, attorney general, and other support agencies; and
(B) other indirect expenses [costs] related to
the agency's performance of the service; and
(3) improving the state agency's performance by:
(A) developing and implementing a most efficient
organization model or a similar model developed by the council;
(B) implementing recommendations of state
oversight agencies such as the Legislative Budget Board, the state
auditor, and the Sunset Advisory Commission; and
(C) implementing the recommendations of the
agency's governing body intended to improve the agency's provision
of a service the council identifies under Section 2162.102(a).
(b) The state agency may submit a proposal to the council
describing a reorganized service delivery method to compete
directly with the performance of a private commercial contractor.
(c) In comparing the cost of providing a service, the
council in conjunction with the state agency shall prepare and
consider an estimate of the costs of returning the performance of
the service from the contractor to the state agency in the event
that it proves necessary to do so. The estimate must include a
reasonable proposed timetable for actions necessary to return the
service to the state agency.
(d) [(b)] A bid or contract must include an analysis of
health care benefits, retirement, and workers' compensation
insurance for a contractor's employees that are reasonably
comparable to the health care benefits, retirement, and workers'
compensation insurance of the state.
(e) Cost-benefit analyses used for an evaluation under
Subsection (a) must include a short-term analysis covering a period
of not more than six months and a long-term analysis covering a
period of at least one and not more than five years.
SECTION 2. Chapter 2162, Government Code, is amended by
adding Subchapter D to read as follows:
SUBCHAPTER D. OUTSOURCING MAJOR FUNCTIONS
Sec. 2162.151. APPLICABILITY. This subchapter applies in
relation to a contract, contract amendment, or contract extension
made or proposed to be made between a state agency and a private
commercial contractor only if:
(1) a service performed by the agency at the time the
contract is awarded, amended, or extended will be outsourced under
the contract, contract amendment, or contract extension; and
(2) the contract, contract amendment, or contract
extension, as applicable:
(A) will lead to the loss of 100 or more state
employee positions; or
(B) has a value of $10 million or more.
Sec. 2162.152. DETERMINATION BY COUNCIL REQUIRED. (a) In
circumstances under which this subchapter applies, a state agency
may not award a contract to, amend a contract with, or extend a
contract with a private commercial contractor unless the council
determines that the service that will be outsourced under the
contract, contract amendment, or contract extension is a service
that may be better provided by selecting the provider of the service
through competition with other state agencies and private
commercial contractors that can provide the service.
(b) A state agency may not award a new contract to which this
subchapter applies unless the council has made the determination
required by Subsection (a) and the provider of the service under the
contract is selected through competition with other state agencies
and private commercial contractors. A state agency may amend or
extend an existing contract under circumstances in which this
subchapter applies after the council makes the determination
required by Subsection (a).
Sec. 2162.153. CONTINUATION OF OUTSOURCING CONTRACT;
COMPLIANCE AUDIT. (a) The state auditor shall conduct a
compliance audit with regard to the outsourced service not later
than the end of the sixth month after the month the service was
outsourced under the contract, contract amendment, or contract
extension. The contractor shall pay the costs of the audit. In
conducting the audit, the state auditor shall:
(1) determine whether the contractor has:
(A) met the conditions of the contract with
regard to the outsourced service; and
(B) cooperated with the audit as required by
Subsection (c);
(2) assess whether the contractor has provided a level
of service delivery comparable to that provided by the state agency
that most recently provided the service before the service was
performed by the contractor; and
(3) assess whether the cost savings presented in the
contractor's contract bid or proposal with regard to the outsourced
service are being realized.
(b) Subject to Subsection (e), the contractor may continue
to perform under the contract until the state auditor completes a
second compliance audit. The state auditor shall conduct the
second audit beginning not earlier than the end of the sixth month
after the month in which the first audit is completed under this
section and not later than the 18th month after the month in which
the first audit is completed.
(c) The private commercial contractor shall cooperate with
an audit conducted by the state auditor under this subchapter or
Chapter 321.
(d) After the initial and second audits conducted under this
section, the state auditor shall issue an audit report to the
contractor, the state agency, the governor, the lieutenant
governor, the speaker of the house of representatives, and the
presiding officer of each standing committee of the legislature
with jurisdiction over the state agency and the subject matter of
the contract. The report must explain the auditor's conclusions
regarding whether the contractor:
(1) cooperated satisfactorily with the audit; and
(2) performed satisfactorily under the contract.
(e) If the governing body of the state agency, after
reviewing the auditor's report and any response by the contractor,
concludes that the contractor did not cooperate with the audit or
did not perform satisfactorily under the contract, the governing
body shall terminate the contract as soon as practicable.
(f) A state agency that enters into a contract or agrees to a
contract amendment or extension that is subject to this subchapter
shall notify the state auditor of the existence of the contract not
later than the date the contract, contract amendment, or contract
extension takes effect.
Sec. 2162.154. ACTIONS FOLLOWING RETURN OF SERVICE. If a
service obligation is returned to the state agency after a contract
is terminated under Section 2162.153(e):
(1) the state agency immediately shall complete a
performance evaluation to design a program to improve the delivery
of the service and implement the program designed; and
(2) until the end of the sixth month after the month
the contract is terminated under Section 2162.153(e), with respect
to the service, the council may not:
(A) require the service to be submitted to
competitive bidding; or
(B) make a determination regarding the service
under Section 2162.102(b).
Sec. 2162.155. RECOVERY AUDIT. If, in the performance of a
compliance audit under this subchapter, the state auditor notes an
irregularity that may indicate that the state has overpaid the
contractor or has made a payment for a service not performed, the
state auditor shall conduct a recovery audit designed to identify
any amounts overpaid or amounts paid for unperformed services. The
state auditor shall report the results of the recovery audit to the
attorney general and the affected state agency. The attorney
general and affected state agency shall cooperate in taking action
to recover the amounts owed to the state.
SECTION 3. The changes in law made by this Act apply only
to:
(1) the activities of the State Council on Competitive
Government or a state agency concerning a proposal to contract with
a commercial source to provide services being performed by a state
agency, on or after the effective date of this Act; and
(2) the evaluation of the services performed by a
contractor under a contract, contract amendment, or contract
extension made on or after the effective date of this Act.
SECTION 4. This Act takes effect September 1, 2009.