Bill Text: NJ ACR36 | 2012-2013 | Regular Session | Introduced

---

Bill Title: Amends Constitution to set minimum standards and procedures regarding certain contracts to privatize public services.

Spectrum: Partisan Bill (Democrat 16-0)

Status: (Introduced - Dead) 2012-01-10 - Introduced, Referred to Assembly State Government Committee [ACR36 Detail]

Download: New_Jersey-2012-ACR36-Introduced.html

---

ASSEMBLY CONCURRENT RESOLUTION No. 36

STATE OF NEW JERSEY

215th LEGISLATURE

 

PRE-FILED FOR INTRODUCTION IN THE 2012 SESSION

 

 

Sponsored by:

Assemblyman  PETER J. BARNES, III

District 18 (Middlesex)

Assemblywoman  L. GRACE SPENCER

District 29 (Essex)

Assemblywoman  ANNETTE QUIJANO

District 20 (Union)

Assemblywoman  SHEILA Y. OLIVER

District 34 (Essex and Passaic)

 

Co-Sponsored by:

Assemblyman Coutinho, Assemblywomen Tucker, Jasey, Assemblymen Coughlin, Prieto, Giblin, Johnson, Fuentes, Albano, Diegnan, Assemblywoman Wagner and Assemblyman Conaway

 

 

 

 

SYNOPSIS

     Amends Constitution to set minimum standards and procedures regarding certain contracts to privatize public services.

 

CURRENT VERSION OF TEXT

     Introduced Pending Technical Review by Legislative Counsel

  

A Concurrent Resolution proposing to amend Article VII, Section I of the Constitution of the State of New Jersey by adding a new paragraph thereto.

 

     Be It Resolved by the General Assembly of the State of New Jersey (the Senate concurring):

 

     1.    The following proposed amendment to the Constitution of the State of New Jersey is agreed to:

 

PROPOSED AMENDMENT

 

     Amend Article VII, Section I of the State Constitution by the addition of the following paragraph:

 

     7.    No agency of the State or agency of a political subdivision of the State shall enter into a privatization contract, that is, a contract which is an agreement or series of agreements with a total value of $250,000 or more to purchase from non-governmental persons or entities any services previously performed by employees of the agency or subdivision, other than legal, management consulting, planning, engineering or design services, unless all of the following requirements are met:

     a.     The agency shall solicit competitive sealed bids for each privatization contract based on a comprehensive written statement, prepared by the agency, of the quality and quantity of the services proposed to be the subject of the privatization contract, any fees, fares or other charges to the public, the current costs to the agency of providing those services, the qualifications, compensation and benefits of agency personnel currently performing those services, and a comprehensive description of the information the prospective contractor is required to provide as part of the bid as required for the evaluation of the bid pursuant to this paragraph, and, if the bidder is awarded the contract, a comprehensive description of the information that the contractor is required to provide, including quarterly payroll records, for ongoing oversight and the post-audits conducted pursuant to this paragraph.

     b.    Every bid for a privatization contract and every privatization contract shall require that the public not be subject to any fees, fares, or other charges greater than those currently charged, that the quantity and quality of the services performed under the contract equal or exceed the quantity and quality of services currently performed by agency employees, that the contractor has the demonstrated ability and experience to provide services of that quantity and quality, that the staff used by the contractor have certification, licensing and levels of job proficiency equal to or exceeding those of the agency employees currently performing the services, and that the rate of wages and employee benefits for each position not be less than the rate of wages and employee benefits for comparable agency employees.

     c.     The agency, prior to soliciting bids, shall permit the agency personnel performing the services and the majority representative of those personnel to review the agency's estimates of the cost of agency personnel performing the services and shall permit the majority representative to submit an alternative cost estimate based on that review and any proposal made by the majority representative to reduce costs and increase the efficiency of agency operations in a manner that is in compliance with the requirements of this paragraph, including all requirements regarding charges to the public, the quantity and quality of services, and employee remuneration, and the agency shall review the proposal and the revised estimate after bidding has been completed and make a determination of whether and how much to reduce the agency's estimates of the cost of agency personnel performing the services when making the comparison with the cost to the agency of the contractor's bid pursuant to this paragraph and determining whether the bid will provide savings for the agency.  The agency shall not disclose the majority representative's alternative estimate or proposal to reduce costs prior to the completion of the bidding.

     d.    The contract shall require the contractor to comply with a policy of nondiscrimination and equal opportunity, take affirmative steps to provide that equal opportunity, and offer available employee positions to qualified regular employees of the agency who are displaced or dismissed from agency employment, in whole or in part, because of the privatization contract, and the agency shall prepare a plan of assistance for each employee displaced as a result of the contract, including any training needed to place the employee in a position with the contractor or the agency.

     e.     The contractor making the bid, and its subsidiaries, affiliates, officers, managers, or supervisors, shall have no adjudicated record of substantial or repeated noncompliance with any federal or State law pertaining to the operation of a business, public contracting, conflicts of interest, tax payment, labor relations, workplace standards, occupational safety and health, public safety and health, environmental protection, nondiscrimination, and affirmative action.

     f.     If the agency determines, after soliciting and receiving bids, that one or more of the bids comply with the cost savings requirement and all other requirements of this paragraph, the agency shall publicly designate to which of the compliant bidders it proposes to award the contract and issue a comprehensive written analysis of the total contract cost of the designated bid, including all costs of transition to private operation, any added unemployment and retirement benefits of agency employees, and all costs of monitoring and administering contract performance born pursuant to this paragraph by the agency and any State entity, including the State Auditor and the Office of the State Comptroller established by P.L.2007, c.52 (C.52:15C-1 et seq.).  If a bidder is headquartered outside the State, or proposes to perform any of the work under the contract outside of the State, the contract cost shall be increased by the amount of any resulting loss of tax revenue to the State.

     g.     The agency shall provide to the Office of the State Comptroller, or other State body subsequently designated by law, a written certification:

     (1)   That the agency has complied with all provisions of this paragraph;

     (2)   That the agency finds that the proposed contract is in the public interest and meets all requirements of this paragraph;

     (3)   That the agency finds that the contract cost estimated pursuant to subparagraph f. of this paragraph is less than the cost of agency personnel performing the services, taking into account any reduction of that cost made by the agency pursuant to subparagraph c. of this paragraph; and

     (4)  That sets forth the agency's estimate of the total amount of the cost savings to the agency that would be provided by the contract.

     The Office of the State Comptroller, or other State body subsequently designated by law, shall review the certification of the agency, and prohibit the agency from entering into the privatization contract if the office or body determines that the bid does not provide cost savings or that the agency has failed to comply with any other requirement of this paragraph.  The determination shall be final and binding on the agency, unless withdrawn due to a revision of the certification by the agency found satisfactory by the office or body.  The certification, the proposed contract, the determination and any revision of the determination, with supporting documentation, shall be made available by the office or body to the public on the Internet.

     The State Auditor shall conduct an annual post-audit of each contract subject to the provisions of this paragraph, and issue a report of the post-audit, which shall include an evaluation of the actual entire cost and any actual cost savings of the contract compared with the amount of cost and savings estimated when the contract was awarded, with an analysis of whether any failure to provide the amount of savings was related to misrepresentation, fraud or other malfeasance, misfeasance or nonfeasance of an agency or contractor, and a review of the compliance of the agency and the contractor with the provisions of this paragraph, including all requirements regarding charges to the public, the quantity and quality of services, and the qualifications and remuneration of contractor employees, with an analysis of whether any non-compliance was related to misrepresentation, fraud or other malfeasance, misfeasance or nonfeasance of an agency or contractor.  Any agency or contractor, or officer or agent of the agency or contractor, determined to be responsible for the misrepresentation, fraud or other malfeasance, misfeasance or nonfeasance shall be subject to penalties and sanctions as provided by law, including, where appropriate, debarment, contract rescission, damages, and reimbursement of excess charges to the public and underpayments to employees.  The post-audit reports, with supporting documentation and records, shall be made available by the State Auditor to the public on the Internet on an ongoing basis.

 

     2.  When this proposed amendment to the Constitution is finally agreed to pursuant to Article IX, paragraph 1 of the Constitution, it shall be submitted to the people at the next general election occurring more than three months after the final agreement and shall be published at least once in at least one newspaper of each county designated by the President of the Senate, the Speaker of the General Assembly and the Secretary of State, not less than three months prior to the general election.

 

     3. This proposed amendment to the Constitution shall be submitted to the people at that election in the following manner and form:

     There shall be printed on each official ballot to be used at the general election, the following:

     a. In every municipality in which voting machines are not used, a legend which shall immediately precede the question as follows:

     If you favor the proposition printed below make a cross (X), plus (+), or check (a) in the square opposite the word "Yes." If you are opposed thereto make a cross (X), plus (+) or check (a) in the square opposite the word "No."

     b.    In every municipality the following question:

 

		CONSTITUTIONAL AMENDMENT TO REQUIRE THAT CERTAIN CONTRACTS TO PRIVATIZE PUBLIC SERVICES PROVIDE COST SAVINGS WITHOUT RAISING FEES, REDUCING SERVICES, OR LOWERING WORKFORCE STANDARDS
	YES	Shall the amendment to Article VII, Section II of the Constitution of the State of New Jersey, setting standards and procedures regarding government contracts to purchase services from private contractors and prohibiting a government agency from entering into such a contract unless the contract reduces the cost of services without increasing charges to the public or reducing the quantity and quality of the services or workforce standards, be approved?

 

		INTERPRETIVE STATEMENT
	NO	The purpose of this proposed constitutional amendment is to establish accountability standards, oversight procedures, and remedies for noncompliance sufficient to ensure that public services are not privatized unless there are cost savings to government agencies and taxpayers based on improved management efficiencies, not on increased charges, reduced services, or lowered workforce standards.  It prohibits a government agency from entering into a major contract, with limited exceptions, to purchase from a private contractor services previously provided by agency employees, unless standards are met, including that: (1) the contract does not increase fees, fares or other charges to the public and does not reduce the quantity and quality of services or the qualifications or pay of employees; (2) the contractor complies with contracting, discrimination and conflict of interest laws; and (3) the agency certifies the contract cost to be less than the cost of agency employees providing the services.  The amendment prohibits approval of a contract without certification of compliance with those standards, requires oversight of approved contracts to monitor whether the projected savings actually occur without increased charges or reduced services or workforce standards, and, if not, provides sanctions for noncompliance involving misrepresentation, fraud or other misconduct.

 

 

SCHEDULE

 

     This Constitutional amendment shall apply only to contracts for which agencies solicit bids after the 90th day following the approval of the amendment by the people pursuant to Article IX of the Constitution and shall not be applicable to the renewal of contracts which were entered into before that date.

STATEMENT

 

     The purpose of this proposed constitutional amendment is to ensure that no public services are privatized unless there are cost savings which are not based on increased charges or reduced services to the public, or lowered workforce standards.  Each prospective private contractor would be required to demonstrate cost reductions based on improvements such as management efficiencies or technical innovation, not based on added burdens imposed on the members of the public using the services or the employees producing them.  The amendment requires that a contract for the privatization of public services not be entered into without cost analyses demonstrating that there will be actual cost savings for the public agency and the taxpayers without increased fees, fares, or other charges to the public, reduced quantity or quality of services, or lowered workforce standards, including reduced staff qualifications and remuneration.  The amendment further requires sustained oversight and public disclosure regarding those contracts to provide accountability to taxpayers, public users of the services, and employees producing the services, that the cost savings actually occur without increased charges, or reduced services or workforce standards, and provide penalties and sanctions for any noncompliance involving agency or contractor misrepresentation, fraud or other malfeasance, misfeasance or nonfeasance.

     Specifically, this amendment, if approved by the voters, would prohibit any agency of the State or political subdivision from entering into a contract of $250,000 or more to purchase from private entities services previously performed by agency employees, other than legal, management consulting, planning, engineering or design services, unless:

     1.    The agency solicits competitive sealed bids for the contracts based on a comprehensive statement of requirements by the agency;

     2.    The contract requires that the public not be charged fares, fees or other charges greater than those currently charged, that the quantity and quality of the services provided equal or exceed the quantity and quality of services currently provided, that the contractor is qualified, and that contractor employees have qualifications and wage and benefit rates at least equal to the agency employees currently performing the services;

     3.    The agency permits the union of the affected agency employees to review the agency's estimate of current costs and submit an alternative cost estimate and propose cost saving measures compliant with requirements of the paragraph and the agency reviews the union estimate and proposal and makes a determination whether to reduce the agency's estimate of current costs;

     4.    The contractor provides nondiscrimination and equal opportunity and offers available positions to qualified agency employees displaced due to the privatization, and the agency has a plan to assist displaced employees;

     5.    The contractor and specified associates have no adjudicated record of substantial or repeated noncompliance with any federal or State law pertaining to the operation of a business, including laws regarding contracting and conflict of interest;

     6.    After receiving bids, the agency publicly designates the bidder to which it proposes to award the contract and issues a comprehensive written analysis of the total contract cost of the designated bid; and

     7.    The agency provides written certification that the agency and the proposed contract are in compliance with all provisions of the amendment and the total estimated contract cost is less than the cost of agency employees performing the services, with a statement of the amount of the savings.

     The Office of the State Comptroller would be required to review the certification and prohibit the agency from entering into the privatization contract if the office provides a written determination that the bid does not provide cost savings or that the agency has otherwise failed to comply with any requirement of the amendment.

     The State Auditor would be required to conduct post-audits of contracts subject to the amendment, evaluating whether the projected cost savings were obtained without raising charges or cutting services or workforce standards.  If the noncompliance was related to agency or contractor misrepresentation, fraud or other malfeasance, misfeasance or nonfeasance, the agency or contractor would be subject to penalties and sanctions including, where appropriate, debarment or rescission of contracts, or reimbursement of excess charges to the public and underpayments of employees.