AN ACT Relating to personal service contracts; amending RCW 39.29.003, 39.29.018, and 39.29.040; adding new sections to chapter 39.29 RCW; and adding a new section to chapter 39.80 RCW.

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

Sec. 1. RCW 39.29.003 and 1987 c 414 s 1 are each amended to read as follows:

It is the intent of this chapter to establish a policy of open competition for all personal service contracts entered into by state agencies, unless specifically exempted under this chapter. It is further the intent to provide for legislative and executive review of all personal service contracts ((~~negotiated without an open competitive process~~)), to centralize the location of information about personal service contracts for ease of public review, and ensure proper accounting of personal services expenditures.

Sec. 2. RCW 39.29.018 and 1987 c 414 s 5 are each amended to read as follows:

(1) Sole source contracts, and modifications thereto, shall be filed with the office of financial management and the legislative budget committee and made available for public inspection at least ten working days prior to the proposed starting date of the contract. Documented justification for sole source contracts shall be provided to the office of financial management and the legislative budget committee when the contract is filed.

(2) The office of financial management shall approve sole source contracts of ten thousand dollars or more, and modifications thereto, before any such contract or modification becomes binding and before any services may be performed under the contract. These requirements shall also apply to sole source contracts of less than ten thousand dollars if the total amount of such contracts, including their modifications, between an agency and the same consultant is ten thousand dollars or more within a fiscal year. The office of financial management shall ensure that the costs, fees, or rates negotiated in filed sole source contracts of ten thousand dollars or more are reasonable.

Sec. 3. RCW 39.29.040 and 1987 c 414 s 7 are each amended to read as follows:

This chapter does not apply to:

(1) ((Contracts specifying a fee of less than two thousand five hundred dollars if the total of the contracts from that agency with the contractor within a fiscal year does not exceed two thousand five hundred dollars;

~~(2)~~)) Contracts awarded to companies that furnish a service where the tariff is established by the utilities and transportation commission or other public entity;

((~~(3)~~)) (2) Intergovernmental agreements awarded to any governmental entity, whether federal, state, or local and any department, division, or subdivision thereof;

((~~(4)~~)) (3) Contracts awarded for services to be performed for a standard fee, when the standard fee is established by the contracting agency or any other governmental entity and a like contract is available to all qualified applicants;

((~~(5)~~)) (4) Contracts for services that are necessary to the conduct of collaborative research if prior approval is granted by the funding source;

((~~(6)~~)) (5) Contracts for client services;

((~~(7)~~)) (6) Contracts for architectural and engineering services as defined in RCW 39.80.020, which shall be entered into under chapter 39.80 RCW; and

((~~(8)~~)) (7) Contracts for the employment of expert witnesses for the purposes of litigation, except that such contracts shall be filed within the same time period as emergency contracts.

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

Personal services may be procured only to resolve a particular agency problem or issue or to expedite a specific project that is temporary in nature. An agency may procure personal services only if it documents that:

(1) The service is critical to agency responsibilities or operations, or is mandated or authorized by the legislature;

(2) Insufficient staffing or expertise is available within the agency to perform the service; and

(3) Other qualified public resources are not available to perform the service.

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

(1) The following personal service contracts, and modifications thereto, shall be filed with the office of financial management and be made available for public inspection at least ten working days prior to the proposed starting date of the contract:

(a) Personal service contracts subject to competitive solicitation, and modifications thereto, that provide services relating to management consulting, organization development, marketing, communications, employee training, or employee recruiting; and

(b) Modifications to personal service contracts subject to competitive solicitation that substantially change the scope or cost of work to be performed.

(2) The office of financial management shall approve personal service contracts, and modifications thereto, required to be filed in subsection (1) of this section before such contracts, and modifications thereto, become binding and before any services may be performed under such contracts.

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

The office of financial management shall maintain a publicly available list of all personal service contracts entered into by state agencies during each fiscal year. The list shall identify the contracting agency, the contractor, the purpose of the contract, effective dates and periods of performance, the cost of the contract and funding source, any modifications to the contract, and whether the contract, including modifications thereto, was competitively procured or awarded on a sole source basis. The office of financial management shall also ensure that state accounting definitions and procedures are consistent with RCW 39.29.006 and permit the reporting of personal services expenditures by agency and by type of service. Designations of type of services shall include, but not be limited to, management and organizational services, legal and expert witness services, financial services, computer and information services, social or technical research, marketing, communications, and employee training or recruiting services.

NEW SECTION. Sec. 7. A new section is added to chapter 39.80 RCW to read as follows:

Contracts entered into by any state agency for architectural and engineering services, and modifications thereto, shall be filed with the office of financial management at least ten working days before the proposed starting date of the contract.

NEW SECTION. Sec. 8. A new section is added to chapter 39.29 RCW to read as follows:

Personal service contracts between state agencies and state legislators or between state agencies and companies in which a state legislator is either employed or has a majority interest often raise questions regarding a conflict of interest. The following rules apply to such proposed personal service contracts:

(1) The contract must be personally approved in writing by the agency director or commission chair; and

(2) The contract must be personally approved in writing by the director of the office of financial management.

The contract must be filed with the house of representatives or senate ethics committee within five business days of being signed.