ENHANCE OVERSIGHT OF SERVICE CONTRACTS/PED.

View NCGA Bill Details2015-2016 Session
House Bill 976 (Public) Filed Tuesday, April 26, 2016
AN ACT TO ENHANCE OVERSIGHT OF STATE SERVICE CONTRACTS, AS RECOMMENDED BY THE JOINT LEGISLATIVE PROGRAM EVALUATION OVERSIGHT COMMITTEE.
Intro. by Horn, Davis, Hurley, Dollar.

Status: Ref To Com On Rules and Operations of the Senate (Senate Action) (Jun 20 2016)

SOG comments (1):

Identical bill

Identical to S 789, filed 4/28/16.

H 976

Bill Summaries:

  • Summary date: Jun 16 2016 - More information

    House amendments make the following changes to the 2nd edition.

    Amendment #1 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. 

    Amendment #2 amends Section 2(a) of the act to require the Office of State Budget and Management (OSBM) to develop and submit a plan to determine whether services provided by State agencies could be more effectively and appropriately (was, effectively) provided by private providers. Amends the requirements of the plan to also require that if OSBM determines that a service is not appropriate for performance by a private provider, then the plan must describe the basis for that determination.


  • Summary date: Jun 14 2016 - More information

    House committee substitute makes the following changes to the 1st edition.

    Amends proposed GS 143-50.2, Oversight of certain service contracts, by replacing the language "change(s)," "changing," and "change" of a service provider with "select," "selecting," and "selection" of a service provider, throughout the statute. Amends subsection (b) by deleting the "notwithstanding any other provision of law" phrase that precedes the provision prohibiting a State agency from selecting the provider of an agency service until it has done the three specified requirements.

    Amends the directive, now requiring the Office of State Budget and Management to develop and submit (previously, to develop and implement) a plan to determine whether services provided by state agencies could be more effectively provided by private providers, as that term is defined in GS 143-50.2(d)(2), as enacted by Section 1 of the act. Makes a technical change.


  • Summary date: Apr 26 2016 - More information

    Enacts new GS 143-50.2, Oversight of certain service contracts, requiring the Secretary of the Department of Administration to create a business case justification template for use by State agencies to document the business case for changing 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 change in providers. New subsection (b) sets out the following three requirements that must be completed before any change of provider can take place: (1) the business case for such a change has been documented on the business case justification template, (2) specified written approvals have been obtained in accordance with specified financial requirement, and (3) a consultation with the Joint Legislative Commission on Governmental Operations in regards to the provider change has taken place.  Subsection (c) sets out 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. Effective October 1, 2016.

    Directs the Office of State Budget and Management to develop and implement a plan by which they can determine if agency services can be more effectively 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, 2016. Sets out requirements of the plan.

    Enacts new GS 143-50.3, Contract management system, requiring 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 at least 30 days before the system becomes operational.

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


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