HB 1827

1	A bill to be entitled
2	An act relating to the Department of Children and Family
3	Services; providing legislative intent with respect to
4	establishing a structure by which the department shall
5	monitor and manage contracts with external service
6	providers; providing definitions; requiring the department
7	to competitively procure certain commodities and
8	contractual services; requiring the department to allow
9	all public postsecondary institutions to bid on contracts
10	intended for any public postsecondary institution;
11	authorizing the department to competitively procure and
12	contract for systems of treatment or service that involve
13	multiple providers; providing requirements if other
14	governmental entities contribute matching funds; requiring
15	that an entity providing matching funds must comply with
16	certain procurement procedures; authorizing the department
17	to independently procure and contract for treatment
18	services; requiring that the department develop a business
19	case before outsourcing any service or function; providing
20	requirements for the business case; requiring that the
21	business case be submitted to the Legislature for
22	approval; requiring that a contractual service that has
23	previously been outsourced be subject to the requirements
24	for a business case; requiring that a procurement of
25	contractual services equal to or in excess of the
26	threshold amount for CATEGORY FIVE comply with specified
27	requirements, including a scope of work and performance
28	standards; authorizing the department to adopt incremental
29	penalties by rule; authorizing the department to include
30	cost-neutral, performance-based incentives in a contract;
31	requiring that a contract in excess of $1 million be
32	negotiated by a contract negotiator who is certified
33	according to standards established by the Department of
34	Management Services; limiting circumstances under which
35	the department may amend a contract; requiring that a
36	proposed contract amendment be submitted to the Executive
37	Office of the Governor for approval; requiring approval of
38	a contract amendment by the Administration Commission
39	under certain circumstances; requiring the department to
40	verify that contractual terms have been satisfied before
41	renewing a contract; requiring certain documentation;
42	requiring the department to develop, in consultation with
43	the Department of Management Services, contract templates
44	and guidelines; requiring that the department establish a
45	contract-management process; specifying the requirements
46	for and components of the contract-management process;
47	providing requirements for resolving performance
48	deficiencies and terminating a contract; requiring a
49	corrective-action plan under certain circumstances;
50	requiring the department to develop standards of conduct
51	and disciplinary actions; requiring that the department
52	establish contract-monitoring units and a contract-
53	monitoring process; requiring written reports; requiring
54	on-site visits for contracts involving the provision of
55	direct client services; requiring the department to make
56	certain documents available to the Legislature; requiring
57	the department to create an electronic database to store
58	the documents; amending s. 402.73, F.S.; requiring the
59	Agency for Persons with Disabilities to implement systems
60	to ensure quality and fiscal integrity of programs in the
61	developmental services Medicaid waiver system; providing
62	an exemption for health services from competitive bidding
63	requirements; amending s. 409.1671, F.S.; conforming
64	provisions to changes made by the act; requiring that the
65	Office of Program Policy Analysis and Government
66	Accountability conduct two reviews of the contract-
67	management and accountability structures of the department
68	and report to the Legislature and the Auditor General;
69	repealing s. 402.72, F.S., relating to contract-management
70	requirements for the Department of Children and Family
71	Services; providing an effective date.
72
73	Be It Enacted by the Legislature of the State of Florida:
74
75	Section 1.  Department of Children and Family Services;
76	procurement of contractual services; outsourcing or
77	privatization; contract management.--
78	(1)  LEGISLATIVE INTENT.--The Legislature intends that the
79	Department of Children and Family Services obtain services in
80	the manner that is most efficient and cost-effective for the
81	state, that provides the greatest long-term benefits to the
82	clients receiving services, and that minimizes the disruption of
83	client services. In order to meet these legislative goals, the
84	department shall comply with legislative policy guidelines that
85	require compliance with uniform procedures for procuring
86	contractual services, prescribe how the department must
87	outsource its programmatic and administrative services to
88	external service providers rather than having them provided by
89	the department or another state agency, and establish a
90	contract-management and contract-monitoring process.
91	(2)  DEFINITIONS.--As used in this section, the term:
92	(a)  "Contract manager" means the department employee who
93	is responsible for enforcing the compliance with administrative
94	and programmatic terms and conditions of a contract. The
95	contract manager is the primary point of contact through which
96	all contracting information flows between the department and the
97	contractor. The contract manager is responsible for day-to-day
98	contract oversight, including approval of contract deliverables
99	and invoices. All actions related to the contract shall be
100	initiated by or coordinated with the contract manager. The
101	contract manager maintains the official contract files.
102	(b)  "Contract monitor" means the department employee who
103	is responsible for observing, recording, and reporting to the
104	contract manager and other designated entities the information
105	necessary to assist the contract manager and program management
106	in determining whether the contractor is in compliance with the
107	administrative and programmatic terms and conditions of the
108	contract.
109	(c)  "Department" means the Department of Children and
110	Family Services.
111	(d)  "Outsourcing" means the process of contracting with an
112	external service provider to provide a service, in whole or in
113	part, while the department retains the responsibility and
114	accountability for the service.
115	(e)  "Performance measure" means the quantitative
116	indicators used to assess if the service the external provider
117	is performing is achieving the desired results. Measures of
118	performance include outputs, direct counts of program
119	activities, and outcomes or results of program activities in the
120	lives of the clients served.
121	(f)  "Performance standard" means the quantifiable,
122	specified, and desired level to be achieved for a particular
123	performance measure.
124	(g)  "Privatize" means any process aimed at transferring
125	the responsibility for a service, in whole or in part, from the
126	department to the private sector such that the private sector is
127	solely and fully responsible for the performance of the specific
128	service.
129	(h)  "Service" means all or any portion of a program or
130	program component as defined in section 216.011, Florida
131	Statutes.
132	(3)  PROCUREMENT OF COMMODITIES AND CONTRACTUAL SERVICES.--
133	(a)  For the purchase of commodities and contractual
134	services in excess of the threshold amount established in
135	section 287.017, Florida Statutes, for CATEGORY TWO, the
136	department shall comply with the requirements set forth in
137	section 287.057, Florida Statutes.
138	(b)  Notwithstanding section 287.057(5)(f)13., Florida
139	Statutes, whenever the department intends to contract with a
140	public postsecondary institution to provide a service, the
141	department must allow all public postsecondary institutions in
142	this state that are accredited by the Southern Association of
143	Colleges and Schools to bid on the contract. Thereafter,
144	notwithstanding any other provision to the contrary, if a public
145	postsecondary institution intends to subcontract for any service
146	awarded in the contract, the subcontracted service must be
147	procured by competitive procedures.
148	(c)  When it is in the best interest of a defined segment
149	of its consumer population, the department may competitively
150	procure and contract for systems of treatment or service that
151	involve multiple providers, rather than procuring and
152	contracting for treatment or services separately from each
153	participating provider. The department must ensure that all
154	providers that participate in the treatment or service system
155	meet all applicable statutory, regulatory, service-quality, and
156	cost-control requirements. If other governmental entities or
157	units of special purpose government contribute matching funds to
158	the support of a given system of treatment or service, the
159	department shall formally request information from those funding
160	entities in the procurement process and may take the information
161	received into account in the selection process. If a local
162	government contributes matching funds to support the system of
163	treatment or contracted service and if the match constitutes at
164	least 25 percent of the value of the contract, the department
165	shall afford the governmental match contributor an opportunity
166	to name an employee as one of the persons required by section
167	287.057(17), Florida Statutes, to evaluate or negotiate certain
168	contracts, unless the department sets forth in writing the
169	reason why the inclusion would be contrary to the best interest
170	of the state. Any employee so named by the governmental match
171	contributor shall qualify as one of the persons required by
172	section 287.057(17), Florida Statutes. A governmental entity or
173	unit of special purpose government may not name an employee as
174	one of the persons required by section 287.057(17), Florida
175	Statutes, if it, or any of its political subdivisions, executive
176	agencies, or special districts, intends to compete for the
177	contract to be awarded. The governmental funding entity or
178	contributor of matching funds must comply with all procurement
179	procedures set forth in section 287.057, Florida Statutes, when
180	appropriate and required.
181	(d)  The department may procure and contract for or provide
182	assessment and case-management services independently from
183	treatment services.
184	(4)  SOURCING STANDARDS AND REQUIREMENTS.--If the
185	department proposes to outsource a service, the department must
186	comply with the requirements of this section prior to the
187	procurement process provided for in section 287.057, Florida
188	Statutes.
189	(a)  The department shall develop a business case
190	describing and analyzing the service proposed for outsourcing. A
191	business case is part of the solicitation process and is not a
192	rule subject to challenge pursuant to section 120.54, Florida
193	Statutes. The business case must include, but need not be
194	limited to:
195	1.  A detailed description of the services to be
196	outsourced, a description and analysis of the department's
197	current performance of the service, and a rationale documenting
198	how outsourcing the service would be in the best interest of the
199	state, the department, and its clients.
200	2.  A cost-benefit analysis documenting the estimated
201	specific direct and indirect costs, savings, performance
202	improvements, risks, and qualitative and quantitative benefits
203	involved in or resulting from outsourcing the service. The cost-
204	benefit analysis must include a detailed plan and timeline
205	identifying all actions that must be implemented to realize
206	expected benefits. Under section 92.525, Florida Statutes, the
207	Secretary of Children and Family Services shall verify that all
208	costs, savings, and benefits are valid and achievable.
209	3.  A description of the specific performance measures and
210	standards that must be achieved through the outsourcing
211	proposal.
212	4.  A statement of the potential effect on applicable
213	federal, state, and local revenues and expenditures. The
214	statement must specifically describe the effect on general
215	revenue, trust funds, general revenue service charges, and
216	interest on trust funds, together with the potential direct or
217	indirect effect on federal funding and cost allocations.
218	5.  A plan to ensure compliance with public-record laws,
219	which must include components that:
220	a.  Provide public access to public records at a cost that
221	does not exceed that provided in chapter 119, Florida Statutes.
222	b.  Ensure the confidentiality of records that are exempt
223	from disclosure or confidential under law.
224	c.  Meet all legal requirements for record retention.
225	d.  Allow for transfer to the state, at no cost, all public
226	records in possession of the external service provider upon
227	termination of the contract.
228	6.  A department transition and implementation plan for
229	addressing changes in the number of agency personnel, affected
230	business processes, and employee-transition issues. Such a plan
231	must also specify the mechanism for continuing the operation of
232	the service if the contractor fails to perform and comply with
233	the performance measures and standards and provisions of the
234	contract. Within this plan, the department shall identify all
235	resources, including full-time equivalent positions, which are
236	subject to outsourcing. All full-time equivalent positions
237	identified in the plan shall be placed in reserve by the
238	Executive Office of the Governor until the end of the second
239	year of the contract. Notwithstanding the provisions of section
240	216.262, Florida Statutes, the Executive Office of the Governor
241	shall request authority from the Legislative Budget Commission
242	to reestablish full-time positions above the number fixed by the
243	Legislature when a contract is terminated and the outsourced
244	service must be returned to the department.
245	7.  A listing of assets proposed for transfer to or use by
246	the external service provider, a description of the proposed
247	requirements for maintenance of those assets by the external
248	service provider or the department in accordance with chapter
249	273, Florida Statutes, a plan for their disposition upon
250	termination of the contract, and a description of how the
251	planned asset transfer or use by the contractor is in the best
252	interest of the department and the state.
253	(b)1.  If the department proposes to outsource the service
254	in the next fiscal year, the department shall submit the
255	business case with the department's final legislative budget
256	request, in the manner and form prescribed in the legislative
257	budget request instructions under section 216.023, Florida
258	Statutes. Upon approval in the General Appropriations Act, the
259	department may initiate and complete the procurement process
260	under section 287.057, Florida Statutes, and shall have the
261	authority to enter into contracts with the external service
262	provider.
263	2.  If a proposed outsourcing initiative would require
264	integration with, or would in any way affect other state
265	information technology systems, the department shall submit the
266	feasibility study documentation required by the legislative
267	budget request instructions under section 216.023, Florida
268	Statutes.
269	(c)  If the department proposes to outsource a service
270	during a fiscal year and the outsourcing provision was not
271	included in the approved operating budget of the department, the
272	department must provide to the Governor, the President of the
273	Senate, the Speaker of the House of Representatives, the chairs
274	of the legislative appropriations committees, and the chairs of
275	the relevant substantive committees the business case that
276	complies with the requirements of paragraph (a) at least 45 days
277	before the release of any solicitation documents, as provided
278	for in section 287.057, Florida Statutes. Any budgetary changes
279	that are inconsistent with the department's approved budget may
280	not be made to existing programs unless the changes are
281	recommended to the Legislative Budget Commission by the Governor
282	and the Legislative Budget Commission expressly approves the
283	program changes.
284	(d)  The department may not privatize a service without
285	specific authority provided in general law, the General
286	Appropriations Act, legislation implementing the General
287	Appropriations Act, or a special appropriations act.
288	(5)  CONTRACTING AND PERFORMANCE MEASURES.--In addition to
289	the requirements of section 287.058, Florida Statutes, every
290	procurement of contractual services by the department which
291	meets or is in excess of the threshold amount provided in
292	section 287.017, Florida Statutes, for CATEGORY FIVE, must
293	comply with the requirements of this subsection.
294	(a)  The department shall execute a contract containing all
295	provisions and conditions, which must include, but need not be
296	limited to:
297	1.  A detailed scope of work that clearly specifies each
298	service and deliverable to be provided, including a description
299	of each deliverable or activity that is quantifiable,
300	measurable, and verifiable by the department and the contractor.
301	2.  Associated costs and savings, specific payment terms
302	and payment schedules, including incentive and penalty
303	provisions, criteria governing payment, and a clear and specific
304	schedule to complete all required activities needed to transfer
305	the service from the state to the contractor.
306	3.  Clear and specific identification of all required
307	performance measures and standards, which must, at a minimum,
308	include:
309	a.  Acceptance criteria for each deliverable and service to
310	be provided to the department under the terms of the contract
311	which document, to the greatest extent possible, the required
312	performance level. Acceptance criteria must be detailed, clear,
313	and unambiguous and shall be used to measure deliverables and
314	services to be provided under the contract.
315	b.  A method for monitoring and reporting progress in
316	achieving specified performance standards and levels.
317	c.  The sanctions or penalties that shall be assessed for
318	contract or state nonperformance. The department may adopt, by
319	rule, provisions for including in its contracts incremental
320	penalties to be imposed by its contract managers on a contractor
321	due to the contractor's failure to comply with a requirement for
322	corrective action. Any financial penalty that is imposed upon a
323	contractor may not be paid from funds being used to provide
324	services to clients, and the contractor may not reduce the
325	amount of services being delivered to clients as a method for
326	offsetting the effect of the penalty. If a financial penalty is
327	imposed upon a contractor that is a corporation, the department
328	shall notify, at a minimum, the board of directors of the
329	corporation. The department may notify any additional parties
330	that the department believes may be helpful in obtaining the
331	corrective action that is being sought. In addition, the rules
332	adopted by the department must include provisions that permit
333	the department to deduct the financial penalties from funds that
334	would otherwise be due to the contractor, not to exceed 10
335	percent of the amount that otherwise would be due to the
336	contractor for the period of noncompliance. If the department
337	imposes a financial penalty, it shall advise the contractor in
338	writing of the cause for the penalty. A failure to include such
339	deductions in a request for payment constitutes grounds for the
340	department to reject that request for payment. The remedies
341	identified in this paragraph do not limit or restrict the
342	department's application of any other remedy available to it in
343	the contract or under law. The remedies described in this
344	paragraph may be cumulative and may be assessed upon each
345	separate failure to comply with instructions from the department
346	to complete corrective action.
347	4.  A requirement that the contractor maintain adequate
348	accounting records that comply with all applicable federal and
349	state laws and generally accepted accounting principles.
350	5.  A requirement authorizing the department and state to
351	have access to and conduct audits of all records related to the
352	contract and outsourced services.
353	6.  A requirement that ownership of any intellectual
354	property developed in the course of, or as a result of, work or
355	services performed under the contract shall transfer to the
356	state if the contractor ceases to provide the outsourced
357	service.
358	7.  A requirement describing the timing and substance of
359	all plans and status or progress reports that are to be
360	provided. All plans and status or progress reports must comply
361	with any relevant state and federal standards for planning,
362	implementation, operations, and oversight.
363	8.  A requirement that the contractor shall comply with
364	public-record laws. The contractor shall:
365	a.  Keep and maintain the public records that ordinarily
366	and necessarily would be required by the department to perform
367	the service.
368	b.  Provide public access to such public records on the
369	same terms and conditions that the department would and at a
370	cost that does not exceed that provided in chapter 119, Florida
371	Statutes.
372	c.  Ensure the confidentiality of records that are exempt
373	from disclosure or confidential under law.
374	d.  Meet all legal and auditing requirements for record
375	retention, and transfer to the state, at no cost to the state,
376	all public records in possession of the contractor upon
377	termination of the contract. All records stored electronically
378	must be provided to the state in the format compatible with
379	state information technology systems.
380	9.  A requirement that any state funds provided for the
381	purchase of or improvements to real property are contingent upon
382	the contractor granting to the state a security interest in the
383	property which is at least equal to the amount of the state
384	funds provided for at least 5 years following the date of
385	purchase or the completion of the improvements or as further
386	required by law. The contract must include a provision that, as
387	a condition of receipt of state funding for this purpose, the
388	contractor agrees that, if it disposes of the property before
389	the department's interest is vacated, the contractor must refund
390	the proportionate share of the state's initial investment, as
391	adjusted by depreciation.
392	10.  A provision that the contractor annually submit and
393	verify, under section 92.525, Florida Statutes, all required
394	financial statements.
395	11.  A provision that the contractor will be held
396	responsible and accountable for all work covered under the
397	contract including any work performed by subcontractors. The
398	contract must state that the department may monitor the
399	performance of any subcontractor.
400	(b)  A contract may include cost-neutral, performance-based
401	incentives that may vary according to the extent a contractor
402	achieves or surpasses the performance standards set forth in the
403	contract. The incentives may be weighted proportionally to
404	reflect the extent to which the contractor has demonstrated that
405	it has consistently met or exceeded the contractual requirements
406	and the performance standards.
407	(c)  The department shall review the time period for which
408	it executes contracts and, to the greatest extent practicable,
409	shall execute multiyear contracts to make the most efficient use
410	of the resources devoted to contract processing and execution.
411	(d)  When the annualized value of a contract is in excess
412	of $1 million, at least one of the persons conducting
413	negotiations must be certified as a contract negotiator based
414	upon standards established by the Department of Management
415	Services.
416	(e)  The department may not amend a contract without first
417	submitting the proposed contract amendment to the Executive
418	Office of the Governor for approval if the effect of the
419	amendment would be to increase:
420	1.  The value of the contract by $250,000 for those
421	contracts with a total value of at least $250,000 but less than
422	$1 million;
423	2.  The value of the contract by $1 million for those
424	contracts with a total value of at least $1 million but less
425	than $10 million;
426	3.  The value of the contract by 10 percent for those
427	contracts with a total value of $10 million or more; or
428	4.  The term of the contract by 1 year or more.
429
430	When the department proposes any contract amendment that meets
431	the criteria described in this paragraph, it shall submit the
432	proposed contract amendment to the Executive Office of the
433	Governor for approval and shall immediately notify the chairs of
434	the legislative appropriations committees. The Executive Office
435	of the Governor may not approve the proposed contract amendment
436	until 14 days following receipt of the notification to the
437	legislative appropriations chairs. If either chair of the
438	legislative appropriations committees objects in writing to a
439	proposed contract amendment within 14 days following
440	notification and specifies the reasons for the objection, the
441	Executive Office of the Governor shall disapprove the proposed
442	contract amendment or shall submit the proposed contract
443	amendment to the Administration Commission. The proposed
444	contract amendment may be approved by the Administration
445	Commission by a two-thirds vote of the members present with the
446	Governor voting in the affirmative. In the absence of approval
447	by the commission, the proposed contract amendment shall be
448	automatically disapproved. Otherwise, upon approval by the
449	Governor or Administration Commission, the department may
450	execute the contract amendment.
451	(f)  An amendment that is issued under legislative
452	direction, including funding adjustments annually provided for
453	in the General Appropriations Act or the federal appropriations
454	acts, need not be submitted for approval in accordance with
455	paragraph (d).
456	(g)  In addition to the requirements of section 287.057(13)
457	and (14), Florida Statutes, the department shall verify that all
458	specific direct and indirect costs, savings, performance
459	measures and standards, and qualitative and quantitative
460	benefits identified in the original contract have been satisfied
461	by a contractor or the department before the contract is
462	extended or renewed. The documentation must include an
463	explanation of any differences between the required performance
464	as identified in the contract and the actual performance of the
465	contractor. The documentation must be included in the official
466	contract file.
467	(h)  The department shall, in consultation with the
468	Department of Management Services, develop contract templates
469	and guidelines that define the mandatory contract provisions and
470	other requirements identified in this subsection and that must
471	be used for all contractual service contracts meeting the
472	requirements of this subsection. All contract templates and
473	guidelines shall be developed by September 30, 2005.
474	(6)  CONTRACT-MANAGEMENT REQUIREMENTS AND
475	PROCESS.--Notwithstanding section 287.057(15), Florida Statutes,
476	the department is responsible for establishing a contract-
477	management process that requires a member of the department's
478	Senior Management Service to assign in writing the
479	responsibility of a contract to a contract manager. The
480	department shall maintain a set of procedures describing its
481	contract-management process which must minimally include the
482	following requirements:
483	(a)  The contract manager shall maintain the official
484	contract file throughout the duration of the contract and for a
485	period not less than 6 years after the termination of the
486	contract.
487	(b)  The contract manager shall review all invoices for
488	compliance with the criteria and payment schedule provided for
489	in the contract and shall approve payment of all invoices before
490	their transmission to the Department of Financial Services for
491	payment. Only the contract manager shall approve the invoices
492	for a specific contract, unless the contract manager is
493	temporarily unavailable to review an invoice. The contract file
494	must contain an explanation for any periods of temporary
495	unavailability of the assigned contract manager. For any
496	individual invoice in excess of $500,000, a member of the
497	Selected Exempt Service or Senior Management Service shall also
498	sign payment approval of the invoice. For any individual invoice
499	in excess of $1 million, a member of the Senior Management
500	Service shall also sign payment approval of the invoice.
501	(c)  The contract manager shall maintain a schedule of
502	payments and total amounts disbursed and shall periodically
503	reconcile the records with the state's official accounting
504	records.
505	(d)  For contracts involving the provision of direct client
506	services, the contract manager shall periodically visit the
507	physical location where the services are delivered and speak
508	directly to clients receiving the services and the staff
509	responsible for delivering the services.
510	(e)  For contracts for which the contractor is a
511	corporation, the contract manager shall attend at least one
512	board meeting semiannually, if held and if within 100 miles of
513	the contract manager's official headquarters.
514	(f)  The contract manager shall meet at least once a month
515	directly with the contractor's representative and maintain
516	records of such meetings.
517	(g)  The contract manager shall periodically document any
518	differences between the required performance measures and the
519	actual performance measures. If a contractor fails to meet and
520	comply with the performance measures established in the
521	contract, the department may allow a reasonable period for the
522	contractor to correct performance deficiencies. If performance
523	deficiencies are not resolved to the satisfaction of the
524	department within the prescribed time, and if no extenuating
525	circumstances can be documented by the contractor to the
526	department's satisfaction, the department must terminate the
527	contract. The department may not enter into a new contract with
528	that same contractor for the services for which the contract was
529	previously terminated for a period of at least 24 months after
530	the date of termination. The contract manager shall obtain and
531	enforce corrective-action plans, if appropriate, and maintain
532	records regarding the completion or failure to complete
533	corrective-action items.
534	(h)  The contract manager shall document any contract
535	modifications, which shall include recording any contract
536	amendments as provided for in this section.
537	(i)  The contract manager shall be properly trained before
538	being assigned responsibility for any contract.
539
540	The department shall develop standards of conduct and a range of
541	disciplinary actions for its employees which are specifically
542	related to carrying out contract-management responsibilities.
543	(7)  CONTRACT-MONITORING REQUIREMENTS AND PROCESS.--The
544	department shall establish contract-monitoring units staffed by
545	full-time career service employees who report to a member of the
546	Select Exempt Service or Senior Management Service and who have
547	been properly trained to perform contract monitoring. A member
548	of the Senior Management Service shall assign in writing a
549	specific contract to a contract-monitoring unit, with at least
550	one member of the contract-monitoring unit possessing specific
551	knowledge and experience in the contract's program area. The
552	department shall establish a contract-monitoring process that
553	must include, but need not be limited to, the following
554	requirements:
555	(a)  Performing a risk assessment at the start of each
556	fiscal year and preparing an annual contract-monitoring schedule
557	that includes consideration for the level of risk assigned. The
558	department may monitor any contract at any time regardless of
559	whether such monitoring was originally included in the annual
560	contract-monitoring schedule.
561	(b)  Preparing a contract-monitoring plan, including
562	sampling procedures, before performing on-site monitoring at
563	external locations of a service provider. The plan must include
564	a description of the programmatic, fiscal, and administrative
565	components that will be monitored on-site. If appropriate,
566	clinical and therapeutic components may be included.
567	(c)  Conducting analyses of the performance and compliance
568	of an external service provider by means of desk reviews if the
569	external service provider will not be monitored on-site during a
570	fiscal year.
571	(d)  Unless the department sets forth in writing the need
572	for an extension, providing a written report presenting the
573	results of the monitoring within 30 days after the completion of
574	the on-site monitoring or desk review. Report extensions may not
575	exceed 30 days after the original completion date. The
576	department shall develop and use a standard contract-monitoring
577	report format and shall provide access to the reports by means
578	of a website that is available to the Legislature.
579	(e)  For contracts involving the provision of direct client
580	services, requiring the contract monitor to visit the physical
581	location where the services are being delivered and to speak
582	directly to the clients receiving the services and with the
583	staff responsible for delivering the services.
584	(f)  Developing and maintaining a set of procedures
585	describing the contract-monitoring process.
586
587	The department shall develop standards of conduct and a range of
588	disciplinary actions for its employees which are specifically
589	related to carrying out contract-monitoring responsibilities.
590	(8)  REPORTS TO THE LEGISLATURE.--Beginning October 1,
591	2005, the department shall make available to the Legislature
592	electronically all documents associated with the procurement and
593	contracting functions of the department. The documents in the
594	database must include, but are not limited to, all:
595	(a)  Business cases;
596	(b)  Procurement documents;
597	(c)  Contracts and any related files, attachments, or
598	amendments;
599	(d)  Contract monitoring reports;
600	(e)  Corrective action plans and reports of corrective
601	actions taken when contractor performance deficiencies are
602	identified; and
603	(f)  Status reports on all outsourcing initiatives
604	describing the progress by the department towards achieving the
605	business objectives, costs, savings, and quantifiable benefits
606	identified in the business case.
607	Section 2.  Section 402.73, Florida Statutes, is amended to
608	read:
609	402.73  Contracting and performance standards.--
610	(1)  The Department of Children and Family Services shall
611	establish performance standards for all contracted client
612	services. Notwithstanding s. 287.057(5)(f), the department must
613	competitively procure any contract for client services when any
614	of the following occurs:
615	(a)  The provider fails to meet appropriate performance
616	standards established by the department after the provider has
617	been given a reasonable opportunity to achieve the established
618	standards.
619	(b)  A new program or service has been authorized and
620	funded by the Legislature and the annual value of the contract
621	for such program or service is $300,000 or more.
622	(c)  The department has concluded, after reviewing market
623	prices and available treatment options, that there is evidence
624	that the department can improve the performance outcomes
625	produced by its contract resources. At a minimum, the department
626	shall review market prices and available treatment options
627	biennially. The department shall compile the results of the
628	biennial review and include the results in its annual
629	performance report to the Legislature pursuant to chapter 94-
630	249, Laws of Florida. The department shall provide notice and an
631	opportunity for public comment on its review of market prices
632	and available treatment options.
633	(2)  The competitive requirements of subsection (1) must be
634	initiated for each contract that meets the criteria of this
635	subsection, unless the secretary makes a written determination
636	that particular facts and circumstances require deferral of the
637	competitive process. Facts and circumstances must be
638	specifically described for each individual contract proposed for
639	deferral and must include one or more of the following:
640	(a)  An immediate threat to the health, safety, or welfare
641	of the department's clients.
642	(b)  A threat to appropriate use or disposition of
643	facilities that have been financed in whole, or in substantial
644	part, through contracts or agreements with a state agency.
645	(c)  A threat to the service infrastructure of a community
646	which could endanger the well-being of the department's clients.
647
648	Competitive procurement of client services contracts that meet
649	the criteria in subsection (1) may not be deferred for longer
650	than 1 year.
651	(3)  The Legislature intends that the department obtain
652	services in the manner that is most cost-effective for the
653	state, that provides the greatest long-term benefits to the
654	clients receiving services, and that minimizes the disruption of
655	client services. In order to meet these legislative goals, the
656	department may adopt rules providing procedures for the
657	competitive procurement of contracted client services which
658	represent an alternative to the request-for-proposal or
659	invitation-to-bid process. The alternative competitive
660	procedures shall permit the department to solicit professional
661	qualifications from prospective providers and to evaluate such
662	statements of qualification before requesting service proposals.
663	The department may limit the firms invited to submit service
664	proposals to only those firms that have demonstrated the highest
665	level of professional capability to provide the services under
666	consideration, but may not invite fewer than three firms to
667	submit service proposals, unless fewer than three firms
668	submitted satisfactory statements of qualification. The
669	alternative procedures must, at a minimum, allow the department
670	to evaluate competing proposals and select the proposal that
671	provides the greatest benefit to the state while considering the
672	quality of the services, dependability, and integrity of the
673	provider, the dependability of the provider's services, the
674	experience of the provider in serving target populations or
675	client groups substantially identical to members of the target
676	population for the contract in question, and the ability of the
677	provider to secure local funds to support the delivery of
678	services, including, but not limited to, funds derived from
679	local governments. These alternative procedures need not conform
680	to the requirements of s. 287.042 or s. 287.057(1) or (2).
681	(4)  The department shall review the period for which it
682	executes contracts and, to the greatest extent practicable,
683	shall execute multiyear contracts to make the most efficient use
684	of the resources devoted to contract processing and execution.
685	(5)  When it is in the best interest of a defined segment
686	of its consumer population, the department may competitively
687	procure and contract for systems of treatment or service that
688	involve multiple providers, rather than procuring and
689	contracting for treatment or services separately from each
690	participating provider. The department must ensure that all
691	providers that participate in the treatment or service system
692	meet all applicable statutory, regulatory, service-quality, and
693	cost-control requirements. If other governmental entities or
694	units of special purpose government contribute matching funds to
695	the support of a given system of treatment or service, the
696	department shall formally request information from those funding
697	entities in the procurement process and may take the information
698	received into account in the selection process. If a local
699	government contributes match to support the system of treatment
700	or contracted service and if the match constitutes at least 25
701	percent of the value of the contract, the department shall
702	afford the governmental match contributor an opportunity to name
703	an employee as one of the persons required by s. 287.057(17) to
704	evaluate or negotiate certain contracts, unless the department
705	sets forth in writing the reason why such inclusion would be
706	contrary to the best interest of the state. Any employee so
707	named by the governmental match contributor shall qualify as one
708	of the persons required by s. 287.057(17). No governmental
709	entity or unit of special purpose government may name an
710	employee as one of the persons required by s. 287.057(17) if it,
711	or any of its political subdivisions, executive agencies, or
712	special districts, intends to compete for the contract to be
713	awarded. The governmental funding entity or match contributor
714	shall comply with any deadlines and procurement procedures
715	established by the department. The department may also involve
716	nongovernmental funding entities in the procurement process when
717	appropriate.
718	(6)  The department may contract for or provide assessment
719	and case management services independently from treatment
720	services.
721	(7)  The department shall adopt, by rule, provisions for
722	including in its contracts incremental penalties to be imposed
723	by its contract managers on a service provider due to the
724	provider's failure to comply with a requirement for corrective
725	action. Any financial penalty that is imposed upon a provider
726	may not be paid from funds being used to provide services to
727	clients, and the provider may not reduce the amount of services
728	being delivered to clients as a method for offsetting the impact
729	of the penalty. If a financial penalty is imposed upon a
730	provider that is a corporation, the department shall notify, at
731	a minimum, the board of directors of the corporation. The
732	department may notify, at its discretion, any additional parties
733	that the department believes may be helpful in obtaining the
734	corrective action that is being sought. Further, the rules
735	adopted by the department must include provisions that permit
736	the department to deduct the financial penalties from funds that
737	would otherwise be due to the provider, not to exceed 10 percent
738	of the amount that otherwise would be due to the provider for
739	the period of noncompliance. If the department imposes a
740	financial penalty, it shall advise the provider in writing of
741	the cause for the penalty. A failure to include such deductions
742	in a request for payment constitutes a ground for the department
743	to reject that request for payment. The remedies identified in
744	this subsection do not limit or restrict the department's
745	application of any other remedy available to it in the contract
746	or under law. The remedies described in this subsection may be
747	cumulative and may be assessed upon each separate failure to
748	comply with instructions from the department to complete
749	corrective action.
750	(8)  The department shall develop standards of conduct and
751	a range of disciplinary actions for its employees which are
752	specifically related to carrying out contracting
753	responsibilities.
754	(1)(9)  The Agency for Persons with Disabilities department
755	must implement systems and controls to ensure financial
756	integrity and service provision quality in the developmental
757	services Medicaid waiver service system.
758	(10)  If a provider fails to meet the performance standards
759	established in the contract, the department may allow a
760	reasonable period for the provider to correct performance
761	deficiencies. If performance deficiencies are not resolved to
762	the satisfaction of the department within the prescribed time,
763	and if no extenuating circumstances can be documented by the
764	provider to the department's satisfaction, the department must
765	cancel the contract with the provider. The department may not
766	enter into a new contract with that same provider for the
767	services for which the contract was previously canceled for a
768	period of at least 24 months after the date of cancellation. If
769	an adult substance abuse services provider fails to meet the
770	performance standards established in the contract, the
771	department may allow a reasonable period, not to exceed 6
772	months, for the provider to correct performance deficiencies. If
773	the performance deficiencies are not resolved to the
774	satisfaction of the department within 6 months, the department
775	must cancel the contract with the adult substance abuse
776	provider, unless there is no other qualified provider in the
777	service district.
778	(11)  The department shall include in its standard contract
779	document a requirement that any state funds provided for the
780	purchase of or improvements to real property are contingent upon
781	the contractor or political subdivision granting to the state a
782	security interest in the property at least to the amount of the
783	state funds provided for at least 5 years from the date of
784	purchase or the completion of the improvements or as further
785	required by law. The contract must include a provision that, as
786	a condition of receipt of state funding for this purpose, the
787	provider agrees that, if it disposes of the property before the
788	department's interest is vacated, the provider will refund the
789	proportionate share of the state's initial investment, as
790	adjusted by depreciation.
791	(12)  The department shall develop and refine contracting
792	and accountability methods that are administratively efficient
793	and that provide for optimal provider performance.
794	(13)  The department may competitively procure any contract
795	when it deems it is in the best interest of the state to do so.
796	The requirements described in subsection (1) do not, and may not
797	be construed to, limit in any way the department's ability to
798	competitively procure any contract it executes, and the absence
799	of any or all of the criteria described in subsection (1) may
800	not be used as the basis for an administrative or judicial
801	protest of the department's determination to conduct
802	competition, make an award, or execute any contract.
803	(14)  A contract may include cost-neutral, performance-
804	based incentives that may vary according to the extent a
805	provider achieves or surpasses the performance standards set
806	forth in the contract. Such incentives may be weighted
807	proportionally to reflect the extent to which the provider has
808	demonstrated that it has consistently met or exceeded the
809	contractual requirements and the department's performance
810	standards.
811	(2)(15)  Nothing contained in chapter 287 shall require
812	competitive bids for health services involving examination,
813	diagnosis, or treatment.
814	Section 3.  Paragraphs (a), (b), (e), (f), and (g) of
815	subsection (1), paragraph (b) of subsection (2), paragraph (a)
816	of subsection (4), and subsections (6) and (9) of section
817	409.1671, Florida Statutes, are amended to read:
818	409.1671  Foster care and related services; outsourcing
819	privatization.--
820	(1)(a)  It is the intent of the Legislature that the
821	Department of Children and Family Services shall outsource
822	privatize the provision of foster care and related services
823	statewide. It is further the Legislature's intent to encourage
824	communities and other stakeholders in the well-being of children
825	to participate in assuring that children are safe and well-
826	nurtured. However, while recognizing that some local governments
827	are presently funding portions of certain foster care and
828	related services programs and may choose to expand such funding
829	in the future, the Legislature does not intend by its
830	outsourcing privatization of foster care and related services
831	that any county, municipality, or special district be required
832	to assist in funding programs that previously have been funded
833	by the state. Counties that provide children and family services
834	with at least 40 licensed residential group care beds by July 1,
835	2003, and provide at least $2 million annually in county general
836	revenue funds to supplement foster and family care services
837	shall continue to contract directly with the state and shall be
838	exempt from the provisions of this section. Nothing in this
839	paragraph prohibits any county, municipality, or special
840	district from future voluntary funding participation in foster
841	care and related services. As used in this section, the term
842	"outsource" "privatize" means to contract with competent,
843	community-based agencies. The department shall submit a plan to
844	accomplish outsourcing privatization statewide, through a
845	competitive process, phased in over a 3-year period beginning
846	January 1, 2000. This plan must be developed with local
847	community participation, including, but not limited to, input
848	from community-based providers that are currently under contract
849	with the department to furnish community-based foster care and
850	related services, and must include a methodology for determining
851	and transferring all available funds, including federal funds
852	that the provider is eligible for and agrees to earn and that
853	portion of general revenue funds which is currently associated
854	with the services that are being furnished under contract. The
855	methodology must provide for the transfer of funds appropriated
856	and budgeted for all services and programs that have been
857	incorporated into the project, including all management, capital
858	(including current furniture and equipment), and administrative
859	funds to accomplish the transfer of these programs. This
860	methodology must address expected workload and at least the 3
861	previous years' experience in expenses and workload. With
862	respect to any district or portion of a district in which
863	outsourcing privatization cannot be accomplished within the 3-
864	year timeframe, the department must clearly state in its plan
865	the reasons the timeframe cannot be met and the efforts that
866	should be made to remediate the obstacles, which may include
867	alternatives to total outsourcing privatization, such as public-
868	private partnerships. As used in this section, the term "related
869	services" includes, but is not limited to, family preservation,
870	independent living, emergency shelter, residential group care,
871	foster care, therapeutic foster care, intensive residential
872	treatment, foster care supervision, case management,
873	postplacement supervision, permanent foster care, and family
874	reunification. Unless otherwise provided for, the state attorney
875	shall provide child welfare legal services, pursuant to chapter
876	39 and other relevant provisions, in Pinellas and Pasco
877	Counties. When a private nonprofit agency has received case
878	management responsibilities, transferred from the state under
879	this section, for a child who is sheltered or found to be
880	dependent and who is assigned to the care of the outsourcing
881	privatization project, the agency may act as the child's
882	guardian for the purpose of registering the child in school if a
883	parent or guardian of the child is unavailable and his or her
884	whereabouts cannot reasonably be ascertained. The private
885	nonprofit agency may also seek emergency medical attention for
886	such a child, but only if a parent or guardian of the child is
887	unavailable, his or her whereabouts cannot reasonably be
888	ascertained, and a court order for such emergency medical
889	services cannot be obtained because of the severity of the
890	emergency or because it is after normal working hours. However,
891	the provider may not consent to sterilization, abortion, or
892	termination of life support. If a child's parents' rights have
893	been terminated, the nonprofit agency shall act as guardian of
894	the child in all circumstances.
895	(b)  It is the intent of the Legislature that the
896	department will continue to work towards full outsourcing
897	privatization in a manner that assures the viability of the
898	community-based system of care and best provides for the safety
899	of children in the child protection system. To this end, the
900	department is directed to continue the process of outsourcing
901	privatizing services in those counties in which signed startup
902	contracts have been executed. The department may also continue
903	to enter into startup contracts with additional counties.
904	However, no services shall be transferred to a community-based
905	care lead agency until the department, in consultation with the
906	local community alliance, has determined and certified in
907	writing to the Governor and the Legislature that the district is
908	prepared to transition the provision of services to the lead
909	agency and that the lead agency is ready to deliver and be
910	accountable for such service provision. In making this
911	determination, the department shall conduct a readiness
912	assessment of the district and the lead agency.
913	1.  The assessment shall evaluate the operational readiness
914	of the district and the lead agency based on:
915	a.  A set of uniform criteria, developed in consultation
916	with currently operating community-based care lead agencies and
917	reflecting national accreditation standards, that evaluate
918	programmatic, financial, technical assistance, training and
919	organizational competencies; and
920	b.  Local criteria reflective of the local community-based
921	care design and the community alliance priorities.
922	2.  The readiness assessment shall be conducted by a joint
923	team of district and lead agency staff with direct experience
924	with the start up and operation of a community-based care
925	service program and representatives from the appropriate
926	community alliance. Within resources available for this purpose,
927	the department may secure outside audit expertise when necessary
928	to assist a readiness assessment team.
929	3.  Upon completion of a readiness assessment, the
930	assessment team shall conduct an exit conference with the
931	district and lead agency staff responsible for the transition.
932	4.  Within 30 days following the exit conference with staff
933	of each district and lead agency, the secretary shall certify in
934	writing to the Governor and the Legislature that both the
935	district and the lead agency are prepared to begin the
936	transition of service provision based on the results of the
937	readiness assessment and the exit conference. The document of
938	certification must include specific evidence of readiness on
939	each element of the readiness instrument utilized by the
940	assessment team as well as a description of each element of
941	readiness needing improvement and strategies being implemented
942	to address each one.
943	(e)  As used in this section, the term "eligible lead
944	community-based provider" means a single agency with which the
945	department shall contract for the provision of child protective
946	services in a community that is no smaller than a county. The
947	secretary of the department may authorize more than one eligible
948	lead community-based provider within a single county when to do
949	so will result in more effective delivery of foster care and
950	related services. To compete for an outsourcing a privatization
951	project, such agency must have:
952	1.  The ability to coordinate, integrate, and manage all
953	child protective services in the designated community in
954	cooperation with child protective investigations.
955	2.  The ability to ensure continuity of care from entry to
956	exit for all children referred from the protective investigation
957	and court systems.
958	3.  The ability to provide directly, or contract for
959	through a local network of providers, all necessary child
960	protective services. Such agencies should directly provide no
961	more than 35 percent of all child protective services provided.
962	4.  The willingness to accept accountability for meeting
963	the outcomes and performance standards related to child
964	protective services established by the Legislature and the
965	Federal Government.
966	5.  The capability and the willingness to serve all
967	children referred to it from the protective investigation and
968	court systems, regardless of the level of funding allocated to
969	the community by the state, provided all related funding is
970	transferred.
971	6.  The willingness to ensure that each individual who
972	provides child protective services completes the training
973	required of child protective service workers by the Department
974	of Children and Family Services.
975	7.  The ability to maintain eligibility to receive all
976	federal child welfare funds, including Title IV-E and IV-A
977	funds, currently being used by the Department of Children and
978	Family Services.
979	8.  Written agreements with Healthy Families Florida lead
980	entities in their community, pursuant to s. 409.153, to promote
981	cooperative planning for the provision of prevention and
982	intervention services.
983	9.  A board of directors, of which at least 51 percent of
984	the membership is comprised of persons residing in this state.
985	Of the state residents, at least 51 percent must also reside
986	within the service area of the lead community-based provider.
987	(f)1.  The Legislature finds that the state has
988	traditionally provided foster care services to children who have
989	been the responsibility of the state. As such, foster children
990	have not had the right to recover for injuries beyond the
991	limitations specified in s. 768.28. The Legislature has
992	determined that foster care and related services need to be
993	outsourced privatized pursuant to this section and that the
994	provision of such services is of paramount importance to the
995	state. The purpose for such outsourcing privatization is to
996	increase the level of safety, security, and stability of
997	children who are or become the responsibility of the state. One
998	of the components necessary to secure a safe and stable
999	environment for such children is that private providers maintain
1000	liability insurance. As such, insurance needs to be available
1001	and remain available to nongovernmental foster care and related
1002	services providers without the resources of such providers being
1003	significantly reduced by the cost of maintaining such insurance.
1004	2.  The Legislature further finds that, by requiring the
1005	following minimum levels of insurance, children in outsourced
1006	privatized foster care and related services will gain increased
1007	protection and rights of recovery in the event of injury than
1008	provided for in s. 768.28.
1009	(g)  In any county in which a service contract has not been
1010	executed by December 31, 2004, the department shall ensure
1011	access to a model comprehensive residential services program as
1012	described in s. 409.1677 which, without imposing undue
1013	financial, geographic, or other barriers, ensures reasonable and
1014	appropriate participation by the family in the child's program.
1015	1.  In order to ensure that the program is operational by
1016	December 31, 2004, the department must, by December 31, 2003,
1017	begin the process of establishing access to a program in any
1018	county in which the department has not either entered into a
1019	transition contract or approved a community plan, as described
1020	in paragraph (d), which ensures full outsourcing privatization
1021	by the statutory deadline.
1022	2.  The program must be procured through a competitive
1023	process.
1024	3.  The Legislature does not intend for the provisions of
1025	this paragraph to substitute for the requirement that full
1026	conversion to community-based care be accomplished.
1027	(2)
1028	(b)  Persons employed by the department in the provision of
1029	foster care and related services whose positions are being
1030	outsourced under privatized pursuant to this statute shall be
1031	given hiring preference by the provider, if provider
1032	qualifications are met.
1033	(4)(a)  The department, in consultation with the community-
1034	based agencies that are undertaking the outsourced privatized
1035	projects, shall establish a quality assurance program for
1036	privatized services. The quality assurance program shall be
1037	based on standards established by the Adoption and Safe Families
1038	Act as well as by a national accrediting organization such as
1039	the Council on Accreditation of Services for Families and
1040	Children, Inc. (COA) or CARF--the Rehabilitation Accreditation
1041	Commission. Each program operated under contract with a
1042	community-based agency must be evaluated annually by the
1043	department. The department shall, to the extent possible, use
1044	independent financial audits provided by the community-based
1045	care agency to eliminate or reduce the ongoing contract and
1046	administrative reviews conducted by the department. The
1047	department may suggest additional items to be included in such
1048	independent financial audits to meet the department's needs.
1049	Should the department determine that such independent financial
1050	audits are inadequate, then other audits, as necessary, may be
1051	conducted by the department. Nothing herein shall abrogate the
1052	requirements of s. 215.97. The department shall submit an annual
1053	report regarding quality performance, outcome measure
1054	attainment, and cost efficiency to the President of the Senate,
1055	the Speaker of the House of Representatives, the minority leader
1056	of each house of the Legislature, and the Governor no later than
1057	January 31 of each year for each project in operation during the
1058	preceding fiscal year.
1059	(6)  Beginning January 1, 1999, and continuing at least
1060	through June 30, 2000, the Department of Children and Family
1061	Services shall outsource privatize all foster care and related
1062	services in district 5 while continuing to contract with the
1063	current model programs in districts 1, 4, and 13, and in
1064	subdistrict 8A, and shall expand the subdistrict 8A pilot
1065	program to incorporate Manatee County. Planning for the district
1066	5 outsourcing privatization shall be done by providers that are
1067	currently under contract with the department for foster care and
1068	related services and shall be done in consultation with the
1069	department.  A lead provider of the district 5 program shall be
1070	competitively selected, must demonstrate the ability to provide
1071	necessary comprehensive services through a local network of
1072	providers, and must meet criteria established in this section.
1073	Contracts with organizations responsible for the model programs
1074	must include the management and administration of all outsourced
1075	privatized services specified in subsection (1). However, the
1076	department may use funds for contract management only after
1077	obtaining written approval from the Executive Office of the
1078	Governor. The request for such approval must include, but is not
1079	limited to, a statement of the proposed amount of such funds and
1080	a description of the manner in which such funds will be used. If
1081	the community-based organization selected for a model program
1082	under this subsection is not a Medicaid provider, the
1083	organization shall be issued a Medicaid provider number pursuant
1084	to s. 409.907 for the provision of services currently authorized
1085	under the state Medicaid plan to those children encompassed in
1086	this model and in a manner not to exceed the current level of
1087	state expenditure.
1088	(9)  Each district and subdistrict that participates in the
1089	model program effort or any future outsourcing privatization
1090	effort as described in this section must thoroughly analyze and
1091	report the complete direct and indirect costs of delivering
1092	these services through the department and the full cost of
1093	outsourcing privatization, including the cost of monitoring and
1094	evaluating the contracted services.
1095	Section 4.  The Office of Program Policy Analysis and
1096	Government Accountability shall conduct two reviews of the
1097	contract-management and accountability structures of the
1098	Department of Children and Family Services, including, but not
1099	limited to, whether the department is adequately monitoring and
1100	managing its outsourced or privatized functions and services.
1101	The office shall report its findings and recommendations to the
1102	President of the Senate, the Speaker of the House of
1103	Representatives, and the Auditor General by February 1 of 2006
1104	and 2007, respectively.
1105	Section 5.  Section 402.72, Florida Statutes, is repealed.
1106	Section 6.  This act shall take effect July 1, 2005.

CODING: Words stricken are deletions; words underlined are additions.