[atlas:bill]

AN ACT Relating to managed competition for transportation operations and maintenance functions; amending RCW 41.06.380; and adding a new section to chapter 47.04 RCW.

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

NEW SECTION. Sec. 1. A new section is added to chapter 47.04 RCW to read as follows:

(1) The legislature finds that managed competition can be an effective way to unleash creative ideas from the work force and lead to improvements and greater efficiencies for the department of transportation. Managed competition, however, should maintain a level playing field between the public and private sectors and should take into account issues such as wages, health care, and other benefits. Therefore, the legislature directs the department to introduce a pilot program, through negotiation between labor and management, that would provide for managed competition in transportation operations and maintenance functions and to seek private sector bids to compare with bids from the public sector staff currently performing the operation or maintenance function. Under managed competition, the department may purchase any maintenance or operations function, including those customarily and historically provided by classified public employees, from any individual, nonprofit organization, business, employee business unit, or other entity if the following criteria are met:

(a) The invitation for bid or request for proposal contains measurable standards for the performance of the contract;

(b) Classified public employees whose positions or work would be displaced by the contract are provided an opportunity to offer alternatives to purchasing services by contract and, if these alternatives are not accepted, compete for the contract under the process developed in subsection (2) of this section;

(c) The contract with an entity other than an employee business unit includes a provision requiring the entity to consider employment of state employees who may be displaced by the contract;

(d) The department has established a contract monitoring process to measure contract performance, costs, service delivery quality, and other contract standards, and to cancel contracts that do not meet those standards;

(e) The department has collected data that demonstrates that the contract results in savings or efficiency improvements. The department must consider the consequences and potential mitigation of improper or failed performance by the contractor.

(2) The department shall conduct a three-year managed competition pilot project to commence on July 1, 2001, and to conclude on June 30, 2004. The department, working through negotiations with labor and management, shall develop an implementation process for managed competition that would ensure that bids are submitted and evaluated in a fair and objective manner. The implementation process must also be based upon inclusion of the following minimum bid items: (a) Current certified prevailing wages established by the department of labor and industries for the classification of work to be performed under the proposed contract; (b) an overhead factor of not less than sixty-six percent of the base prevailing wage rates; and (c) equipment charges that reflect the current fair market value rate. The pilot project may include, but is not limited to, the following maintenance services: Drainage maintenance and slope repair, roadside and landscape maintenance, bridge and urban tunnel maintenance, safety rest area maintenance, and third-party damages and disaster maintenance. The department shall submit the results of the pilot project to the transportation committees of the senate and house of representatives by October 1, 2004.

Sec. 2. RCW 41.06.380 and 1979 ex.s. c 46 s 2 are each amended to read as follows:

(1) Nothing contained in this chapter shall prohibit any department, as defined in RCW 41.06.020, from purchasing services by contract with individuals or business entities if such services were regularly purchased by valid contract by such department prior to April 23, 1979: PROVIDED, That no such contract may be executed or renewed if it would have the effect of terminating classified employees or classified employee positions existing at the time of the execution or renewal of the contract.

(2) This section does not apply to the managed competition pilot project for operations and maintenance functions of the department of transportation under section 1 of this act.