1. Office of Policy and Management State of Connecticut Presentation to the State Contracting Standards Board January 18, 2006 Office of Policy and Management OPM

2. Office of Policy and Management OPM   OPM – Agency Overview   Personal Service Agreements   Purchase of Service Contracts   Current POS Initiatives   Questions Agenda

3. Office of Policy and Management OPM OPM – Agency Overview Agency Overview  Serves as a staff agency reporting directly to the Governor.  Provides the information and analysis required to formulate public policy.  Assists State agencies and municipalities in implementing policy decisions.

4. Office of Policy and Management OPM OPM – Agency Overview Office of Finance  Accountable for establishing and monitoring State agency financial policies in order to enhance existing management and systems.  Executive Financial Officer reports to the Secretary.

5. Office of Policy and Management OPM Personal Service Agreements Definition  One of the mechanisms used by State agencies to contract for services.  A written, legally binding agreement that specifies the services to be delivered by a contractor to a State agency for a fee.  The contractor may be a person, partnership, limited liability corporation, or corporation.  A PSA may range in duration from a few months to several years.  A PSA may range in cost from a few hundred dollars to several million.

6. Office of Policy and Management OPM Personal Service Agreements Examples  Legal advice and assistance.  Consulting services.  Staff training and organizational development.  Program research, planning and evaluation.

7. Office of Policy and Management OPM Personal Service Agreements Statutes  C.G.S. §§ 4-212 to 4-219, inclusive.  OPM is required to establish standards [rules] for State agencies to follow when entering into a PSA.  Standards include how to develop a Request For Proposal (RFP), advertise for contractors, evaluate submitted proposals, select a contractor, execute a PSA, and monitor and evaluate the contractor’s performance.  Each state agency must establish written procedures for implementing the standards established by OPM.  Written procedures must be submitted to OPM for approval.  Require agencies to request approval from OPM for certain types of PSAs, to select contractors using a competitive negotiation (RFP) process for certain types of PSAs, and to report to OPM on their PSA activity.

8. Office of Policy and Management OPM Recent Activity Revision of PSA Standards: –Ensures the integrity, fairness, and legality of the PSA contracting process. –Instructs agency employees to abide by the standards of conduct set forth in the State’s Code of Ethics and to avoid both actual conflicts of interest and any appearance of impropriety in their official conduct. –Establishes requirements for the three principal phases of the PSA process (preparation, request for proposals, contracting). Personal Service Agreements

9. Office of Policy and Management OPM Personal Service Agreements Cost TermRequirements $20,000 AND 1 year or less or less Competitive (RFP) process is recommended, but not required, to select contractor. OPM approval is not required to enter into a PSA. $20,000.01 – AND 1 year or less $50,000.00 Competitive (RFP) process is required to select contractor. OPM approval is not required to enter into a PSA. $50,000.01 OR more than 1 year or more Competitive (RFP) process is required to select contractor. OPM approval is required to enter into a PSA. Process Overview

10. Office of Policy and Management OPM Personal Service Agreements  Review agency policy decision to enter into a contract.  Agency may request a waiver from the required competitive (RFP) process from OPM.  A PSA having a cost of more than $3,000 within a one-year period must also be reviewed by the Attorney General’s office for legal sufficiency as to form.  For a PSA having a cost of more than $3,000 and with an individual, an agency must request a waiver from the classified service from the Department of Administrative Services.  Upon completion of the PSA, an agency must prepare and submit a written evaluation of the contractor’s performance to the Office of Finance. Process Overview

11. Office of Policy and Management OPM Personal Service Agreements PSA Data Data ElementSFY 2002*SFY 2006 No. of agencies with PSAs4632 No. of PSAs1,678944 Dollar value of PSAs437,279,2331,360,314,835 * Includes current single and multi-year contracts entered in Core-CT.

12. Office of Policy and Management OPM Purchase of Service Contracts Definition  An agreement between a State agency and an organization for the purchase of direct human services to clients.  Not used for purchasing administrative or clerical services, material goods, training and consulting services.  Contract with proprietary organizations, non-profit organizations, and government entities, but not individuals.  Currently over one thousand POS contracts.  Currently over 1 billion dollars in POS contracts.

13. Office of Policy and Management OPM Purchase of Service Contracts Examples  Rehabilitative services.  Nutrition programs.  Counseling services.  Chronic disease programs.  Group homes for persons with disabilities.  Protective services for children and elderly citizens.  Substance abuse treatment services.

14. Office of Policy and Management OPM Purchase of Service Contracts Statutes  C.G.S. 4-70b establishes uniform policies and procedures.  C.G.S. 4-230 to 4-236, inclusive, requires uniform audits for nonprofit organizations.

15. Office of Policy and Management OPM Purchase of Service Contracts History  Commission to Effect Government Reorganization in 1991, commonly referred to as the Hull-Harper Commission, was authorized by Public Act 91- 3.  Commission’s goals were to improve the delivery of services, increase the productivity of service providers and reduce administrative costs.  Commission recommendations set in motion a long-term project overhauling the human service contracting system and assigning primary responsibility to OPM.  Initial activities focused on ways to make the system more responsive to the needs of private providers doing business with the state.  In the past decade OPM has pursued multiple efforts to develop standards for the long-term and evolving contractual relationship between state agencies and private service providers.

16. Office of Policy and Management OPM Purchase of Service Contracts Recent Activity New Standard Contract Language: –Uniform language based on common agency provisions and best practices to replace individual agency provisions. Multi-year Contracting: –Multi-year contracts for those services that remain constant. –Standard multi-year contract should be for three years.

17. Office of Policy and Management OPM Purchase of Service Contracts Recent Activity Consolidated Contracts: –State agencies are consolidating contracts with a contractor for multiple program services within a single agency. –For example, when contractor provides services to three separate agency programs, service requirements for all three programs are combined in a single contract. –Agencies are also exploring the possibility of entering into multi- agency agreements with a single contractor for program services that cross agency lines.

18. Office of Policy and Management OPM Purchase of Service Contracts Recent Activity Cost Accounting Standards: –OPM is mandated to develop state-wide cost accounting standards for the purchase of human services from private providers. –Based largely on the Federal Office of Management and Budget (OMB) Circular A-122, “Cost Principles for Non-profit Organizations”.

19. Office of Policy and Management OPM Purchase of Service Contracts Process Overview  POS contracting process varies from agency to agency.  A POS having a cost of more than $3,000 within a one-year period must be reviewed by the Attorney General’s office for legal sufficiency as to form.

20. Office of Policy and Management OPM Purchase of Service Contracts POS Data AgencyNumber of Contracts Total Dollar Amount Number of Contracts Total Dollar Amount DCF675306,206,472186450,634,569 DMHAS200185,751,170200208,525,816 DMR263353,610,473193925,076,141 DOC2418,722,3883336,944,318 DPH12622,687,82716496,612,726 DSS1,166423,872,236233183,373,714 Total2,4541,310,850,5661,0091,980,142,364 FY 2002*FY 2006 * Includes current single and multi-year contracts entered in Core-CT.

21. Office of Policy and Management OPM Current POS Initiatives POS Business Process Review  Document the current “as is” process for the POS within selected State agencies.  Project scope includes the six major human services agencies (i.e., DCF, DMR, DOC, DPH, DSS, MHA) and the State Department of Education (SDE).  Collected information includes the structural location and organization of each agency’s contracting function, an overview of each agency’s contracting process, and summary data on the number and types of each agency’s POS contracts.

22. Office of Policy and Management OPM Current POS Initiatives OPM Internal Business Process for POS  Develop an internal OPM process for POS contracts that is similar to the current PSA process.  Introduce the process in 2006, but expect that it will take several contracting cycles before a complete, mature system is in place.  OPM will have to approve an agency’s entering into most POS contracts.

23. Office of Policy and Management OPM Current POS Initiatives POS Data Collection  A need for more detailed and current POS contract information.  OPM is currently conducting a survey of the six POS agencies (i.e., DCF, DMR, DOC, DPH, DSS, DMHAS), State Department of Education and Board of Education and Services for the Blind.  Results will provide additional information on both contractors and contracts. For example, the type of contractor (non-profit, proprietary, or government entity) and the type of proposal (competitive or non-competitive).

24. Office of Policy and Management OPM Questions www.opm.state.ct.us/finance/psa/standards.htm http://www.opm.state.ct.us/finance/psa/standards.htm PSA Website POS Website http://www.opm.state.ct.us/pdpd1/pos/main.htm