MISSISSIPPI LEGISLATURE
2016 Regular Session
To: Appropriations
By: Representative Frierson
AN ACT TO AMEND SECTION 25-9-120, MISSISSIPPI CODE OF 1972, TO AUTHORIZE THE STATE PERSONNEL BOARD TO CHARGE FEES TO AGENCIES AND INSTITUTIONS FOR SERVICES RENDERED TO THEM IN CONNECTION WITH PERSONAL SERVICE CONTRACTS; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 25-9-120, Mississippi Code of 1972, is amended as follows:
25-9-120. (1) Contract personnel, whether classified as contract workers or independent contractors shall not be deemed state service or nonstate service employees of the State of Mississippi, and shall not be eligible to participate in the Public Employees' Retirement System, or the State and School Employees' Health Insurance Plan, nor be allowed credit for personal and sick leave and other leave benefits as employees of the State of Mississippi, notwithstanding Sections 25-3-91 through 25-3-101; 25-9-101 through 25-9-151; 25-11-1 through 25-11-126; 25-11-128 through 25-11-131; 25-15-1 through 25-15-23 and for the purpose set forth herein. Contract workers, i.e., contract personnel who do not meet the criteria of independent contractors, shall be subject to the provisions of Section 25-11-127.
(2) (a) There is hereby created the Personal Service Contract Review Board, which shall be composed of the following members:
(i) The State Personnel Director;
(ii) Two (2) individuals appointed by the Governor with the advice and consent of the Senate;
(iii) Two (2) individuals appointed by the Lieutenant Governor with the advice and consent of the Senate; and
(iv) The Executive Director of the Department of Finance and Administration, serving as an ex officio member;
(b) The initial terms of each appointee shall be as follows:
(i) One (1) member appointed by the Governor to serve for a term ending June 30, 2017;
(ii) One (1) member appointed by the Governor to serve for a term ending June 30, 2020;
(iii) One (1) member appointed by the Lieutenant Governor to serve for a term ending June 30, 2018; and
(iv) One (1) member appointed by the Lieutenant Governor to serve for a term ending June 30, 2019.
After the expiration of the initial terms, all appointed members' terms shall be for a period of four (4) years from the expiration date of the previous term, and until such time as the member's successor is duly appointed and qualified;
(c) When appointing members to the Personal Service Contract Review Board, the Governor and Lieutenant Governor shall take into consideration persons who possess at least five (5) years of management experience in general business, health care, or finance for an organization, corporation, or other public or private entity. Any person, or any employee or owner of a company, who receives any grants, procurements or contracts that are subject to approval under this section shall not be appointed to the Personal Service Contract Review Board. Any person, or any employee or owner of a company, who is a principal of the source providing the personal or professional service shall not be appointed to the Personal Service Contract Review Board if the principal owns or controls a greater than five percent (5%) interest or has an ownership value of One Million Dollars ($1,000,000.00) in the source's business, whichever is smaller;
(d) Members of the Personal Service Contract Review Board shall be entitled to per diem as authorized by Section 25-3-69 and travel reimbursement as authorized by Section 25-3-41;
(e) The State Personnel Director shall be chairman and shall preside over the meetings of the board. The board shall annually elect a vice chairman, who shall serve in the absence of the chairman. No business shall be transacted, including adoption of rules of procedure, without the presence of a quorum of the board. Three (3) members shall be a quorum. No action shall be valid unless approved by the chairman and two (2) other of those members present and voting, entered upon the minutes of the board and signed by the chairman. Necessary clerical and administrative support for the board shall be provided by the State Personnel Board. The State Personnel Board may charge fees to agencies and institutions for services rendered to them under this section. Minutes shall be kept of the proceedings of each meeting, copies of which shall be filed on a monthly basis with the Chairmen of the Accountability, Efficiency and Transparency Committees of the Senate and House of Representatives.
(3) The Personal Service Contract Review Board shall have the following powers and responsibilities:
(a) Promulgate rules and regulations governing the solicitation and selection of contractual services personnel including personal and professional services contracts for any form of consulting, policy analysis, public relations, marketing, public affairs, legislative advocacy services or any other contract that the board deems appropriate for oversight, with the exception of any personal service contracts entered into for computer or information technology-related services governed by the Mississippi Department of Information Technology Services, any personal service contracts entered into by the Mississippi Department of Transportation, and any contract for attorney, accountant, auditor, architect, engineer, and utility rate expert services. Any such rules and regulations shall provide for maintaining continuous internal audit covering the activities of such agency affecting its revenue and expenditures as required under Section 7-7-3(6)(d), Mississippi Code of 1972. Any rules and regulation changes related to personal and professional services contracts that may be proposed by the Personal Service Contract Review Board shall be submitted to the Chairmen of the Accountability, Efficiency and Transparency Committees of the Senate and House of Representatives at least fifteen (15) days prior to the board voting on the proposed changes, and such rules and regulation changes, if adopted, shall be promulgated in accordance with the Mississippi Administrative Procedures Act;
(b) Approve all personal and professional services contracts involving the expenditures of funds in excess of Seventy-five Thousand Dollars ($75,000.00);
(c) Develop mandatory standards with respect to contractual services personnel which require invitations for public bid, requests for proposals, record keeping and financial responsibility of contractors. The Personal Service Contract Review Board shall, unless exempted under this paragraph (c) or under paragraph (d) or (j) of this subsection (3), require the agency involved to advertise such contract for public bid, and may reserve the right to reject any or all bids;
(i) Any agency that seeks to procure personal or professional service contracts that are required to be approved by the Personal Service Contract Review Board may petition for relief from any requirement that the agency use competitive bidding as a procurement method. The agency shall be required to show to the Personal Service Contract Review Board's satisfaction one (1) of the following:
1. Federal law has established limitations on the use of competitive bidding for the personal or professional contracts the agency is seeking to procure; or
2. The agency is required to hire professionals whose members are prohibited from bidding by the rules of professional conduct promulgated by the regulating agency or agencies for that professional; or
3. The agency can establish that the use of competitive bidding will be counterproductive to the business of the agency.
(ii) If the Personal Service Contract Review Board determines that competitive bidding shall not be required for the particular personal or professional service the agency seeks to procure, then the Personal Service Contract Review Board shall direct the agency to establish a competitive procurement procedure for selecting the personal or professional service contract that ensures open, transparent procedures for making a selection. Such procedures shall include, but not be limited to, qualifications based selection or requests for qualifications. The Personal Service Contract Review Board shall also have the authority to audit the records of any agency to ensure it has used competitive procedures to contract for the personal or professional service;
(d) Prescribe certain circumstances whereby agency heads may enter into contracts for personal and professional services without receiving prior approval from the Personal Service Contract Review Board. The Personal Service Contract Review Board may establish a preapproved list of providers of various personal and professional services for set prices with which state agencies may contract without bidding or prior approval from the board;
(e) To provide standards for the issuance of requests for proposals, the evaluation of proposals received, consideration of costs and quality of services proposed, contract negotiations, the administrative monitoring of contract performance by the agency and successful steps in terminating a contract;
(f) To present recommendations for governmental privatization and to evaluate privatization proposals submitted by any state agency;
(g) To authorize personal and professional service contracts to be effective for more than one (1) year provided a funding condition is included in any such multiple year contract, except the State Board of Education, which shall have the authority to enter into contractual agreements for student assessment for a period up to ten (10) years. The State Board of Education shall procure these services in accordance with the Personal Service Contract Review Board procurement regulations;
(h) To request the State Auditor to conduct a performance audit on any personal or professional service contract;
(i) Prepare an annual report to the Legislature concerning the issuance of personal service contracts during the previous year, collecting any necessary information from state agencies in making such report;
(j) Develop and implement the following standards and procedures for the approval of any sole source contract for personal and professional services regardless of the value of the procurement:
(i) For the purposes of this paragraph (j), the term "sole source" means only one (1) source is available that can provide the required personal or professional service.
(ii) An agency that has been issued a binding, valid court order mandating that a particular source or provider must be used for the required service must include a copy of the applicable court order in all future sole source contract reviews for the particular personal or professional service referenced in the court order.
(iii) Any agency alleging to have a sole source for any personal or professional service shall have published on the procurement portal website established by Sections 25-53-151 and 27-104-165, for at least fourteen (14) days, the terms of the proposed contract for those services. In addition, the publication shall include, but is not limited to, the following information:
1. The personal or professional service offered in the contract;
2. An explanation of why the personal or professional service is the only one that can meet the needs of the agency;
3. An explanation of why the source is the only person or entity that can provide the required personal or professional service;
4. An explanation of why the amount to be expended for the personal or professional service is reasonable; and
5. The efforts that the agency went through to obtain the best possible price for the personal or professional service.
(iv) If any person or entity objects and proposes that the personal or professional service published under subparagraph (iii) of this paragraph (j) is not a sole source service and can be provided by another person or entity, then the objecting person or entity shall notify the Personal Service Contract Review Board and the agency that published the proposed sole source contract with a detailed explanation of why the personal or professional service is not a sole source service.
(v) 1. If the agency determines after review that the personal or professional service in the proposed sole source contract can be provided by another person or entity, then the agency must withdraw the sole source contract publication from the procurement portal website and submit the procurement of the personal or professional service to an advertised competitive bid or selection process.
2. If the agency determines after review that there is only one (1) source for the required personal or professional service, then the agency may appeal to the Personal Service Contract Review Board. The agency has the burden of proving that the personal or professional service is only provided by one (1) source.
3. If the Personal Service Contract Review Board has any reasonable doubt as to whether the personal or professional service can only be provided by one (1) source, then the agency must submit the procurement of the personal or professional service to an advertised competitive bid or selection process. No action taken by the Personal Service Contract Review Board in this appeal process shall be valid unless approved by the chairman and two (2) other members of the Personal Service Contract Review Board present and voting.
(vi) The Personal Service Contract Review Board shall prepare and submit a quarterly report to the House of Representatives and Senate Committees on Accountability, Efficiency and Transparency that details the sole source contracts presented to the Personal Service Contract Review Board and the reasons that the Personal Service Contract Review Board approved or rejected each contract. Such quarterly reports shall also include the documentation and memoranda required in subsection (5) of this section. An agency that submitted a sole source contract shall be prepared to explain the sole source contract to each committee by December 15 of each year upon request by the committee.
(4) Any contract submitted to the Personal Service Contract Review Board for review and approval shall be presumed to be approved if the Personal Service Contract Review Board does not object to the contract within thirty (30) days of the agency's submission of the contract. All submissions shall be made thirty (30) days before the monthly meeting of the Personal Service Contract Review Board or as prescribed by the Personal Service Contract Review Board. If the Personal Service Contract Review Board rejects any contract submitted for review or approval, the Personal Service Contract Review Board shall clearly set out the reasons for its action, including, but not limited to, the policy that the agency has violated in its submitted contract and any corrective actions that the agency may take to amend the contract to comply with the rules and regulations of the Personal Service Contract Review Board.
(5) All sole source contracts for personal and professional services awarded by state agencies, whether approved by an agency head or the Personal Service Contract Review Board, shall contain in the procurement file a written determination for the approval, using a request form furnished by the Personal Service Contract Review Board. The written determination shall document the basis for the determination, including any market analysis conducted in order to ensure that the service required was practicably available from only one (1) source. A memorandum shall accompany the request form and address the following four (4) points:
(a) Explanation of why this service is the only service that can meet the needs of the purchasing agency;
(b) Explanation of why this vendor is the only practicably available source from which to obtain this service;
(c) Explanation of why the price is considered reasonable; and
(d) Description of the efforts that were made to conduct a noncompetitive negotiation to get the best possible price for the taxpayers.
(6) The Personal Service Contract Review Board shall develop and promulgate rules and regulations to define the allowable legal relationship between contract employees and the contracting departments, agencies and institutions of state government under the jurisdiction of the State Personnel Board, in compliance with the applicable rules and regulations of the federal Internal Revenue Service (IRS) for federal employment tax purposes. Under these regulations, the usual common law rules are applicable to determine and require that such worker is an independent contractor and not an employee, requiring evidence of lawful behavioral control, lawful financial control and lawful relationship of the parties. Any state department, agency or institution shall only be authorized to contract for personnel services in compliance with said regulations.
(7) No member of the Personal Service Contract Review Board shall use his official authority or influence to coerce, by threat of discharge from employment, or otherwise, the purchase of commodities or the contracting for personal or professional services under this section.
(8) Nothing in this section shall impair or limit the authority of the Board of Trustees of the Public Employees' Retirement System to enter into any personal or professional services contracts directly related to their constitutional obligation to manage the trust funds, including, but not limited to, actuarial, custodial banks, cash management, investment consultant, and investment management contracts.
SECTION 2. This act shall take effect and be in force from and after July 1, 2016.