AN ACT Relating to personal services contracts; amending RCW 39.29.006; and adding new sections to chapter 39.29 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. A new section is added to chapter 39.29 RCW to read as follows:

The legislature finds that: (1) The state of Washington spends in excess of seventy million dollars per biennium on personal service contracts; and (2) there exists confusion regarding definitions, accounting practices, and bid procedures that, in turn, leads to the use of personal service contracts when they may not be appropriate or in a manner that is not cost-effective. In addition, the legislature finds that neither the executive nor the legislative branches of government have oversight procedures that allow them to determine the true extent of personal service contract use or abuse. Therefore, it is in the public interest to establish oversight procedures so that the extent and appropriateness of personal service contracting by the state may be adequately evaluated.

Sec. 2. Section 2, chapter 61, Laws of 1979 ex. sess. as amended by section 1, chapter 263, Laws of 1981 and RCW 39.29.006 are each amended to read as follows:

As used in this chapter:

(1) "Personal service contract" means an agreement, or any amendment or renewal thereto, with an independent contractor for the rendering of personal services to the state.

(2) "Personal service" means performing a specific study, project, or task which requires professional or technical expertise ((~~but~~)). The term does not ((~~mean~~)) include personal services performed for the purpose of providing routine, continuing and necessary services, including, but not limited to, routine maintenance, operation of the physical plant, security, data entry, key punch services, and graphic design.

(3) "Agency" means any state officer or activity of the executive and judicial branches of state government, including state agencies, departments, offices, divisions, boards, commissions, and educational, correctional, and other types of institutions.

(4) "Emergency" or "special emergency" means a set of unforeseen circumstances that are beyond the control of the agency and that either (a) present a real, immediate, and extreme threat to the proper performance of essential functions, or (b) may immediately result in excessive loss or damage to property, bodily injury, or loss of life.

NEW SECTION. Sec. 3. A new section is added to chapter 39.29 RCW to read as follows:

(1) Each agency shall maintain a contract file for each personal service contract entered into by the agency. The contract file shall contain the following:

(a) A statement setting forth the agency's need and justification for the contract;

(b) A copy of the contract;

(d) Correspondence with the contractor, invoices, and information relating to the agency's administration of the contract and evaluation of the contractor's performance.

(2) If a competitive process was used by the agency, the contract file shall also contain the following as applicable:

(a) A copy of the proposal submitted by the contractor to whom the contract was awarded;

(b) A copy of each notice or advertisement soliciting proposals or interest from prospective contractors; and

NEW SECTION. Sec. 4. A new section is added to chapter 39.29 RCW to read as follows:

(1) No later than August 30, 1987, and each year thereafter, every agency which enters into personal service contracts shall submit a report in a format designated by the director of financial management after consultation with the legislative budget committee listing all personal service contracts that were entered into or that were amended or renewed during the immediately preceding fiscal year.

(2) Each report required under this section shall include (a) a designation showing which contracts were entered into under a competitive process, (b) a designation showing which contracts and amendments to contracts were filed under RCW 39.29.010 and 39.29.020, (c) a designation showing whether the contract was reported as a personal service contract for agency accounting purposes, and (d) the total cost of each contract.

(3) The reports required under this section shall be submitted to the office of the governor, the office of financial management, and the legislative budget committee.

NEW SECTION. Sec. 5. A new section is added to chapter 39.29 RCW to read as follows:

If an agency enters into a contract with a personal service contractor without using a competitive process, the agency shall prepare a statement explaining why a competitive process was not used and the reasons for selecting that contractor. If a competitive process was not used because the agency determined that an emergency existed, then the agency shall include in the statement the reasons why it believed the circumstances constituted an emergency.

NEW SECTION. Sec. 6. A new section is added to chapter 39.29 RCW to read as follows:

RCW 39.29.010 and 39.29.020 apply to agency contracts for services entered into under chapter 39.80 RCW.