84R5140 AJZ-D
By: Dukes H.B. No. 881
A BILL TO BE ENTITLED
AN ACT
relating to outsourcing a service performed by a health and human
services agency to a private commercial contractor.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 2162, Government Code, is amended by
adding Subchapter D to read as follows:
SUBCHAPTER D. OUTSOURCING MAJOR FUNCTIONS
Sec. 2162.151. DEFINITION. In this subchapter, "health and
human services agency" has the meaning assigned by Section 531.001.
Sec. 2162.152. APPLICABILITY. This subchapter applies in
relation to a contract, contract amendment, or contract extension
made or proposed to be made between a health and human services
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. 2162.153. COST ANALYSIS AND CONTRACT CONSIDERATIONS
FOR OUTSOURCING STATE SERVICES. (a) Before awarding, amending, or
extending a contract to which this subchapter applies, a health and
human services agency shall perform a cost analysis comparing the
agency's costs of performing the service to be outsourced to the
costs of outsourcing the service as provided by this section. The
council, in making a determination under Section 2162.102(a), shall
perform a cost analysis comparing a health and human services
agency's costs of performing a service to the costs of outsourcing
the service as provided by this section.
(b) In determining a health and human services agency's
costs of performing the service, an analysis shall be prepared that
includes:
(1) the health and human services agency's actual cost
of providing the service currently, including:
(A) services provided by the comptroller,
attorney general, and other support agencies; and
(B) other indirect expenses related to the health
and human services agency's performance of the service;
(2) the assumptions and documentation supporting the
actual cost determination under Subdivision (1); and
(3) recommendations for improving the health and human
services agency's performance by developing the most efficient
organizational model to provide the service, if applicable,
including implementing recommendations of state oversight agencies
such as the Legislative Budget Board, the state auditor, and the
Sunset Advisory Commission.
(c) In comparing the cost of providing the service under
this section, the health and human services agency or council
shall:
(1) include the costs of a private contractor to
perform the state service and the cost to the health and human
services agency of monitoring the contractor's performance against
the terms of the contract;
(2) include an assessment of whether the private
contractor can provide a level of service comparable to that
provided by the health and human services agency that most recently
provided the service; and
(3) prepare and consider an estimate of the costs of
returning the performance of the service from the private
contractor to the health and human services agency in the event that
it proves necessary to do so, including a reasonable proposed
timetable for actions necessary to return the service to the health
and human services agency.
(d) A health and human services agency performing a cost
analysis under this section may consider a reorganized service
delivery method to compete directly with the performance of a
private contractor.
(e) A bid or contract must include an analysis of health
care benefits, retirement, and workers' compensation insurance for
a private contractor's employees that are reasonably comparable to
the health care benefits, retirement, and workers' compensation
insurance of the state.
(f) A cost analysis under this section must cover a period
of at least one year and not more than five years.
(g) A health and human services agency shall send the
analysis and supporting documentation required by Subsection (b) to
the governor, the chairs of the appropriate legislative committees,
the Legislative Budget Board, and the state auditor. The analysis
and supporting documentation must be sent to the state auditor
before extending a solicitation for bids for, amending, or
extending a contract to which this subchapter applies.
(h) Based on a risk assessment, the state auditor may review
and comment on the methodology used to determine the health and
human services agency's cost required by Subsection (a). The state
auditor shall provide the results of the review and comment to the
affected health and human services agency, the governor, the chairs
of the appropriate legislative committees, and the Legislative
Budget Board.
Sec. 2162.154. AUDIT AUTHORITY. (a) Based on a risk
assessment performed by the state auditor, a cost analysis under
Section 2162.153 is subject to audit by the state auditor in
accordance with Chapter 321.
(b) Based on a risk assessment performed by the state
auditor, a contract to which this subchapter applies is subject to
audit by the state auditor in accordance with Chapter 321. The
private contractor shall pay the costs of an audit conducted under
this subsection. In conducting the audit, the state auditor may:
(1) assess whether cost savings have been realized
from the contract; and
(2) address compliance under the terms of the
contract, including amounts paid under the contract.
(c) A contract to which this subchapter applies must include
a provision that authorizes the state auditor to have access to any
information the state auditor considers relevant in performing the
state auditor's duties under this section.
(d) The state auditor shall file an audit report for audits
performed under Subsections (a) and (b).
(e) Reports filed by the state auditor under Subsection (d)
shall be provided to:
(1) the affected health and human services agency;
(2) the governor;
(3) the chairs of the appropriate legislative
committees;
(4) the Legislative Budget Board;
(5) the council, if applicable;
(6) the attorney general; and
(7) the private contractor, if applicable.
Sec. 2162.155. REQUIRED NOTIFICATION. A health and human
services 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. 2162.156. RECOVERY OF FUNDS. If, in the performance of
an audit under this subchapter, the state auditor identifies
amounts overpaid, amounts paid for unperformed services, or
unallowable costs, the attorney general and the affected health and
human services agency shall cooperate in taking action to recover
the amounts owed to the state.
Sec. 2162.157. CONTRACT TERMINATION. If the governing body
of the health and human services agency, after reviewing an audit
report by the state auditor under this subchapter, any response by
the private contractor, and applicable agency performance
evaluations of the private contractor, concludes that the private
contractor did not perform satisfactorily under the contract, the
governing body shall terminate the contract as soon as practicable.
Sec. 2162.158. ACTIONS FOLLOWING RETURN OF SERVICE. If a
service obligation is returned to a health and human services
agency after a contract is terminated under Section 2162.157, the
health and human services agency shall:
(1) immediately complete a performance evaluation to
design a program to improve the delivery of the service and
implement the program designed; or
(2) rebid the contract.
SECTION 2. Section 2162.103(a), Government Code, is amended
to read as follows:
(a) Except as otherwise provided by Section 2162.153, in
[In] comparing the cost of providing a service, the council shall
consider the:
(1) cost of supervising the work of a private
contractor; and
(2) cost of a state agency's performance of the
service, including:
(A) the costs of the comptroller, attorney
general, and other support agencies; and
(B) other indirect costs related to the agency's
performance of the service.
SECTION 3. The changes in law made by this Act apply only
to:
(1) the activities of the State Council on Competitive
Government, the Department of Aging and Disability Services, the
Department of Assistive and Rehabilitative Services, the
Department of Family and Protective Services, or the Department of
State Health Services concerning a proposal to contract with a
private contractor to provide services being performed by the
Department of Aging and Disability Services, the Department of
Assistive and Rehabilitative Services, the Department of Family and
Protective Services, or the Department of State Health Services, on
or after the effective date of this Act; and
(2) the evaluation of the services performed by a
private 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, 2015.