79R1605 JJT-D

By:  Dukes                                                        H.B. No. 314



A BILL TO BE ENTITLED

AN ACT

relating to the performance of a private commercial contractor that 
provides a service of a state agency.
	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)  the development and implementation of a most 
efficient organization model;
			(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) [(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.
	(d)  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.   Subchapter C, Chapter 2162, Government Code, is 
amended by adding Section 2162.106 to read as follows:
	Sec. 2162.106.  AUDIT REQUIREMENTS AND CONTRACT CONDITIONS.  
(a)  A contract awarded to a private commercial contractor under 
this subchapter must include a provision that the continuation of 
the contract for the entire contract period is contingent on the 
outcome of audits conducted under this section.
	(b)  A private commercial contractor to which a contract is 
awarded under this subchapter must cooperate with a compliance 
audit conducted by the state auditor.  The state auditor shall 
conduct the audit not later than the end of the sixth month after 
the month the contract was awarded.  In conducting the audit, the 
state auditor shall:
		(1)  determine whether the contractor has met the 
conditions of its contract and cooperated with the audit under this 
section;
		(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 a private commercial contractor; and
		(3)  assess whether the cost savings presented in the 
contractor's contract bid are being realized by the contractor.
	(c)  If the state auditor concludes after the audit that the 
private commercial contractor has performed satisfactorily, the 
contractor may continue to perform under the contract until the 
state auditor completes a second audit.  The state auditor shall 
conduct the second audit not earlier than the end of the sixth month 
after the completion of the first audit under this section and not 
later than the 18th month after that audit is completed.
	(d)  If the state auditor concludes after the initial or 
second audit conducted under this section that the contractor has 
not performed satisfactorily, the contract with the private 
commercial contractor terminates immediately and the state agency 
that most recently provided the service before the service was 
performed by a private commercial contractor shall provide the 
service.
	(e)  If a service obligation is returned to the state agency 
under Subsection (d):
		(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 terminated under Subsection (d), 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).
	SECTION 3.   This Act takes effect September 1, 2005.