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Relating to certain requirements applicable to contracts entered into by, and the contract management process of, state agencies.
Estimated Two-year Net Impact to General Revenue Related Funds for SB543, Committee Report 1st House, Substituted: a negative impact of ($14,375,246) through the biennium ending August 31, 2017.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
SB 543 would implement a series of new regulations for the contract processes at state agencies. Specifically, state agencies would have to abide by more stringent guidelines over the four phases of contract management: planning, procurement, contract establishment, and contract oversight.
This bill would require certain heads of a state agency to be responsible for the contracts. It would also cover the factors an agency must consider before agreeing to a contract. The contracts would have to be managed by a member of the state agency, meaning a representative of the agency must conduct evaluations and monitor performance measures. Moreover, each contract must have clear and achievable measures in place. Further, each employee of the agency, who is in anyway involved in the contract process, must undergo a training course for the handling of contracts.
Agencies would be responsible for establishing guidelines for the handling of the contracts by employees.
Indefinite contract terms would be prohibited. Instead it would require agencies to make an effort to keep the term of a contract to no longer than four years.
This legislation would require major contracts to be negotiated by more than one employee of the agency. And before agreeing to a contract the agency must evaluate the risks it could pose on the agency.
Finally, if there are cost overruns or major changes to a contract, the executive director of the agency would have to be notified and kept abreast of that contract.
We support SB 543 because it establishes a chain of responsibility for the handling of contracts at each agency. Additionally, many provisions of this bill would create fail-safes throughout every step of the contract process.
Taxpayer money is at stake when an agency signs a contract. This fact alone means agencies should be extra cautious by making sure they are protecting the interests of the taxpayer. SB 543 would help to ensure that taxpayer money is spent judiciously and that taxpayers are getting what they asked for from a contract. For these reasons, we support SB 543 because it comports with our limited government and personal responsibility principles.