HB 530 -- Public Privatization Contracts

Co-Sponsors:  Hosmer, Selby, Hilgemann, Bowman, Marsh, Boucher

This bill regulates the use of privatization contracts by the
state.  The Department of Transportation; municipal fire
departments who contract with private companies as contained in
Section 85.012, RSMo; and public bodies who contract for
architectural services, engineering services, or land surveying
services are not covered.

Privatization contracts are agreements or a combination or
series of agreements in which a non-governmental person or
entity agrees with a public body to provide services valued at
$25,000 or more which could have been provided by regular
employees of a public body.  The bill:

(1)  Creates the Public Service Accountability Act and prohibits
public bodies from entering into privatization contracts, except
under the conditions of the bill;

(2)  Requires public bodies to solicit competitive sealed bids
for privatization contracts based on a written proposal.  Bid
requirements are outlined in the bill;

(3)  Requires contractors who enter into privatization contracts
to compensate employees at the rate a state employee doing
similar work would receive or the average private sector
compensation rate, whichever is greater.  The compensation must
include the value of health insurance and other benefits;

(4)  Limits privatization contracts to 2 years;

(5)  Requires privatization contracts to contain a provision
requiring the contractor to offer available positions to
qualified public employees whose employment was terminated due
to privatization contracts;

(6)  Requires a nondiscrimination and equal opportunity
provision in all privatization contracts;

(7)  Prohibits public funds from being used to support or oppose
unionization;

(8)  Requires public bodies to prepare a comprehensive written
estimate of the cost of using regular public employees before
considering privatization contracts.  The estimate must include
employee pension, insurance, and other benefits;

(9)  Requires a public body to consider a contractor's past
performance and its record of compliance with federal, state,
and local laws before awarding the contract;

(10)  Requires a public body to publicly designate the bidder
that it proposes to award the privatization contract to;

(11)  Requires a public body to prepare a comprehensive written
privatization contract cost analysis;

(12)  Requires a public body to certify in writing that all
provisions of this law have been followed, the quality of
services satisfies fiscal and quality requirements, the cost is
10% less than if the public body had completed the services, and
the privatization contract is in the public's best interest;

(13)  Prohibits a privatization contractor from subcontracting
without the approval of a public body;

(14)  Requires privatization contractors and subcontractors to
file an annual financial audit with a public body;

(15)  Requires that a public body have reasonable access to
privatization contractors' project financial records,
facilities, and employees;

(16)  Requires the privatization contractor to submit at least
an annual report detailing progress and quality of the project.
The contractor must also submit a report of its compliance with
all federal, state, and local laws and citations, complaints, or
findings issued by an administrative agency or court;

(17)  Allows a public body to seek contractual remedies for any
violation of the privatization contract.  Other persons or
entities are also allowed to bring a claim against a contractor
for certain violations of this act;

(18)  Restricts ownership rights or interest in any public
record by a privatization contractor and requires public bodies
and contractors to comply with all open records laws;

(19)  Restricts the use of privatization contract records and
contract records of a public body.  The bill outlines remedies
which may be taken for violation of these restrictions;

(20)  Prohibits retaliation against any public employee or
private contractor employee who, acting in good faith, discloses
information or participates in any investigation or proceedings
against any governmental entity relating to a violation of a
privatization contract.  The identity of any employee
complaining in good faith to a public body or elected official
about a violation of a privatization contract will be
confidential; and

(21)  Requires private contractors to post provisions of the
privatization contract law and information pertaining to the
filing of a charge for the violation of certain provisions of
the act.

The bill has an effective date of July 1, 2002.

Missouri House of Representatives
Last Updated September 13, 2001 at 2:02 pm