Identical to H 16, filed 1/25/17.

Section 1

Enacts new GS 143-50.2, Oversight of certain service contracts, requiring the Secretary of the Department of Administration, in conjunction with the Office of State Budget and Management, to create a business case justification template for use by State agencies to document the business case for selecting providers of agency services.  Sets out 11 required components of the template, including a detailed description of the manner in which the agency service is currently provided, costs as specified for the delivery of the service during the most recently completed fiscal year, and a description of the transition process for a selection of providers. New subsection (b) sets out the following three requirements that must be completed before a provider may be selected: (1) the business case for such a selection has been documented on the business case justification template, (2) specified written approvals have been obtained in accordance with specified financial requirements, and (3) a consultation with the Joint Legislative Commission on Governmental Operations in regards to the provider selection has taken place.  Subsection (c) sets out three exceptions to the requirements in subsection (b) when certain conditions are satisfied, including that the total cost of providing the agency service does not exceed $1 million.  Subsection (d) sets out definitions for use in the section for (1) agency service, (2) service contract, (3) private provider, and (4) total cost.

Enacts new GS 143-50.3 to require the Department of Administration (Department) to establish a schedule for each State agency to review the business case justification for each agency service to verify that the current provider is the most cost-effective provider. Requires each agency to document the results of its review on the business case justification template. Requires that the schedule provide for the review of agency services no less than every five years, but gives the Department authority to change the schedule and extend the time for review when appropriate.

Effective October 1, 2017.

Section 2

Directs the Office of State Budget and Management to develop and submit a plan by which it can determine if agency services can be more effectively and appropriately provided by private providers.  A report on the plan is due to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division no later than December 1, 2017. Sets out requirements of the plan and requires State agencies to fully cooperate in its development.

Section 3

Effective when the act becomes law, enacts new GS 143-50.4, Contract management system. Requires the State Purchasing Officer to operate a contract management system that will be required to be used by all State agencies for the management of any service contracts entered into by that agency.  Sets out specified capacities the system must have, including the ability to ensure that payments are made in accordance with applicable contract terms and conditions.  Requires the State Purchasing Officer to report annually, no later than December 1 of each year, to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division detailing service contracts entered into by state agencies as specified. 

Provides that the use of the contract management system is not required until notice has been received from the Division of Purchase and Control in regards to its operational status; such notice is required within 30 days of when the system becomes operational.

Sections 4 and 5

Amends GS 143-48.3 and GS 143-50.1(e), concerning purchasing and contracting of State agencies, making conforming changes.