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Introduced by Representatives Brooks of Montpelier, Davis of Washington and Pearson of Burlington

Referred to Committee on


Subject:  Executive branch; privatization contracts

Statement of purpose:  This bill proposes to ensure that state personal services and privatization contracts are consistent with the principles of classified service and fiscal responsibility.


It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  3 V.S.A. § 341(3) is amended to read:

(3)  “Privatization contract” means a personal services contract by which an entity or an individual who is not a state employee agrees with an agency to provide services, valued at $20,000.00 or more per year, which are the same or substantially similar to and in lieu of services previously provided, in whole or in part, by permanent, classified state employees, and which result in the elimination of a bargaining unit position through attrition, separation, or reduction in force of at least one permanent, classified employee.

Sec. 2.  3 V.S.A. § 342(4) is amended to read:

(4)  Any of the following apply:

* * *

(D)  The state is not able to provide equipment, materials, facilities, or support services in the location where the services are to be performed in a cost-effective manner as determined by the state auditor.

* * *

(F)  The need for services is urgent, temporary or occasional, such that the time necessary to hire and train employees would render obtaining the services from state employees imprudent. Such contract shall be limited to 90 days duration, with any extension subject to review and approval by the secretary of administration.  Not less than 20 days prior to approval, the secretary of administration shall notify the bargaining agent of a request for a contract subject to this subdivision.

(G)  Contracts for the type of services covered by the contract are specifically authorized by law.

(H)  Efforts to recruit state employees to perform work, authorized by law, have failed in that the department of human resources and the department of labor have posted notice of the position, recruitment efforts have lasted at least 45 days, and no applicant meeting the minimum qualifications has applied for the job.

(I)  The cost of obtaining the services by contract is lower than the cost of obtaining the same services by utilizing state employees.  When comparing costs, the provisions of section 343 of this title shall apply.

Sec. 3.  3 V.S.A. § 343(3) is amended to read:

(3)  When comparing the cost of having a service provided by classified state employees to the cost of having the service provided by a contractor:

* * *

(B)  The basic cost of services by a contractor includes:

(i)  the bid price or maximum acceptable bid identified by the contracting authority; and

(ii)  any additional costs to be incurred by the state or agency for inspection, facilities, reimbursable expenses, supervision, training, and materials, but only to the extent that these costs exceed the costs the agency could expect to incur for inspection, facilities, reimbursable expenses, and materials if the services were provided by classified state employees.

* * *

(D)  Possible reductions in the cost of obtaining services from classified state employees that require concessions shall not be considered unless proposed in writing by the certified collective bargaining agent and mutually agreed to by the state and collective bargaining agent.

Sec. 4.  3 V.S.A. § 344 is amended to read:


(a)  The secretary of administration shall maintain a database with information about approved privatization contracts and approved personal services contracts, including contract extensions.  The database shall include names of contractors, summaries of services to be performed under the contracts, costs and durations of contracts, and values of similar services provided by state agencies.  The secretary shall also maintain a database with information about privatization contracts which are rejected because they fail to qualify under subdivision 343(2) of this title.  Contracts shall be public record to the extent provided under chapter 5 of Title 1, and shall be located at the agency of origin, including information about names of contractors, summaries of work to be performed, costs, and duration.

(b)  The information on contracts described in subsection (a) of this section shall be reported to the general assembly in the annual workforce report required under subdivision 309(a)(19) of this title.

Sec. 5.  3 V.S.A. § 345 is added to read:


An agency may not approve an extension of a contract unless the agency reviews the criteria established by this chapter and determines that the contract will continue to yield at least a 10 percent savings over hiring or utilizing current state employees to perform the services under the contract.

Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont