Illinois General Assembly - Full Text of HB5620
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Full Text of HB5620  101st General Assembly



State of Illinois
2019 and 2020


Introduced , by Rep. Diane Pappas


New Act

    Creates the Council on Efficient Government Act. Creates the Council and sets forth its duties, including review of whether goods and services provided by State agencies should be privatized or outsourced to obtain cost savings or best value. Requires reports. Requires business case analyses. Sets forth outsourcing contract requirements. Requires the Council to establish an accounting method. Exempts transportation construction. Repeals the Act on July 1, 2030. Effective immediately.

LRB101 17497 RJF 66908 b





HB5620LRB101 17497 RJF 66908 b

1    AN ACT concerning efficient government.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 1. Short title. This Act may be cited as the
5Council on Efficient Government Act.
6    Section 5. Purposes. The purposes of the Council on
7efficient government are to:
8    (1) Ensure that each State agency focuses on its core
9mission and delivers goods and services effectively and
10efficiently by leveraging resources and contracting with
11private sector vendors if these vendors can more effectively
12and efficiently provide these goods or services and reduce the
13cost of government.
14    (2) Evaluate for feasibility, cost effectiveness, and
15efficiency business cases to be outsourced before a State
16agency proceeds with any outsourcing of goods or services.
17    Section 10. Council on efficient government; members;
18terms; vacancies.
19    (a) The Council on efficient government is established
20consisting of the following members:
21        (1) The chief executive or administrative officer of a
22    State agency who is appointed by the Governor.



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1        (2) Two members who are engaged in private enterprise
2    and who are appointed by the Governor.
3        (3) Two members who are engaged in private enterprise
4    and who are appointed by the President of the Senate.
5        (4) Two members who are engaged in private enterprise
6    and who are appointed by the Speaker of the House of
7    Representatives.
8    (b) The terms of one of each of the 2 initial appointees
9under each of items (2), (3), and (4) of subsection (a) are for
10one year as determined by lot. Otherwise, the terms of
11appointment to the Council are for 2 years unless the chief
12executive or administrative officer of a State agency ceases to
13hold office. The Governor shall appoint a replacement member
14for the remainder of the unexpired term.
15    (c) A member of the Council who is engaged in private
16enterprise is not eligible to receive compensation but is
17eligible for reimbursement of expenses.
18    (d) A member of the Council may not participate in a
19Council review of a business case to outsource if the State
20agency is conducting the proposed outsourcing or, in the case
21of a member engaged in private enterprise, if the member has a
22business relationship with an entity that is involved or
23potentially could be involved in the proposed outsourcing.
24    (e) A member of the Council who is engaged in private
25enterprise may not delegate the membership to a designee.
26    (f) A quorum shall consist of at least 3 members of the



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2    (g) Any vacancy on the Council shall be filled in the same
3manner as the original appointment, and any member appointed to
4fill a vacancy occurring for a reason other than the expiration
5of a term serves only for the unexpired term of the member's
7    (h) The Council shall select a chairperson from among its
9    Section 15. Powers and duties of Council.
10    (a) The Council shall:
11        (1) Review whether or not a good or service provided by
12    a State agency could be privatized to provide the same type
13    and quality of good or service that would result in cost
14    savings or best value. The Council may hold public hearings
15    as part of its evaluation process and shall report its
16    recommendations to the Governor, the President of the
17    Senate, and the Speaker of the House of Representatives.
18        (2) Review privatization of a good or service at the
19    request of a State agency or a private enterprise.
20        (3) Review issues concerning agency competition with
21    one or more private enterprises to determine ways to
22    eliminate any unfair competition with a private
23    enterprise.
24        (4) Recommend privatization to a State agency if a
25    proposed privatization is demonstrated to provide a more



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1    cost efficient or more effective manner of providing a good
2    or service.
3        (5) Comply with Sections 20 and 25.
4        (6) Employ a standard process for reviewing business
5    cases to outsource.
6        (7) Review and evaluate business cases to outsource as
7    requested by the Governor or the State agency head whose
8    agency is proposing to outsource.
9        (8) No later than 30 days before a State agency's
10    issuance of a solicitation of $10,000,000 or more, provide
11    to the State agency conducting the procurement, the
12    Governor, the President of the Senate, and the Speaker of
13    the House of Representatives an advisory report for each
14    business case reviewed and evaluated by the Council. The
15    report must contain all versions of the business case, an
16    evaluation of the business case, any relevant
17    recommendations and sufficient information to assist the
18    State agency proposing to outsource in determining whether
19    the business case to outsource should be included with the
20    legislative budget request.
21        (9) Recommend and implement standard processes for
22    State agency and Council review and evaluate State agency
23    business cases to outsource, including templates for use by
24    State agencies in submitting business cases to the Council.
25        (10) Recommend standards, processes, and guidelines
26    for use by State agencies in developing business cases to



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1    outsource.
2        (11) Incorporate any lessons learned from outsourcing
3    services and activities into Council standards, procedures
4    and guidelines, as appropriate, and identify and
5    disseminate to agencies information regarding best
6    practices in outsourcing efforts.
7        (12) Develop guidelines for assisting State employees
8    whose jobs are eliminated as a result of outsourcing.
9        (13) Receive complaints of violations of this Act.
10        (14) Transmit complaints received under this Section
11    to the State agency alleged to be in violation.
12        (15) Hold public hearings on complaints and determine
13    whether the agency is in violation of this Act.
14        (16) Issue a written report of its findings to the
15    complainant within 90 days after receiving the State
16    agency's response.
17        (17) Transmit to the Governor, the President of the
18    Senate, and the Speaker of the House of Representatives a
19    complete report of each meeting, including recommendations
20    to correct violations of prohibitions on competition with
21    private enterprise and findings on necessary exceptions to
22    the prohibitions.
23        (18) Solicit petitions of interest from private sector
24    service providers as the Council considers appropriate.
25    The Council may evaluate and review the petitions and may
26    hold public hearings as part of the evaluation process. The



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1    Council may recommend some or all of the petitions to the
2    Governor's Office of Management and Budget for further
3    review. A person does not have a cause of action based on
4    the failure of the Council to consider a petition of
5    interest or make a recommendation.
6    (b) The Council may evaluate and review all State agency
7exemptions and exemptions to the restrictions on competition
8with private enterprise in this Act and may determine that any
9function or functions of State agency are in violation of this
10Act. The Council shall report its findings and recommendations
11to the Governor, the President of the Senate, and the Speaker
12of the House of Representatives.
13    (c) The Council shall prepare an annual report on:
14        (1) Recommendations on innovative methods of
15    delivering government services that would improve the
16    efficiency, effectiveness, or competition in the delivery
17    of government services, including enterprisewide
18    proposals.
19        (2) Outsourcing efforts of each State agency,
20    including the number of outsourcing business cases and
21    solicitations, the number and dollar value of outsourcing
22    contracts, descriptions of performance results as
23    applicable, any contract violations or project slippages,
24    and the status of extensions, renewals, and amendments of
25    outsourcing contracts.
26        (3) Information about the Council's activities.



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1        (4) The status of the inventory created under Section
2    20.
3    (d) The Council shall submit the annual report prescribed
4by subsection (c) of this Section to the Governor, the
5President of the Senate, and the Speaker of the House of
6Representatives no later than January 15 immediately following
7the calendar year for which the report is made. The Council
8shall provide an oral report to the legislative appropriations
9committees and the Governor's Office of Management and Budget
10when the General Assembly is not in session.
11    (e) The Auditor General shall employ an adequate number of
12staff who collectively possess significant expertise and
13experience as required to carry out the responsibilities of
14this Act.
15    (f) Each State agency shall submit to the Council all
16information, documents, and other materials required by the
17Council pursuant to this Act.
18    (g) At the request of the Council and on approval of the
19Legislative Audit Commission, the Auditor General shall
20provide performance audit and other required information
21relating to State agency budgets and functions. The Auditor
22General may assist in the development and review of the agency
23inventory of commercial activities prescribed in Section 20.
24    (h) In addition to filing a copy of recommendations for
25privatization with an agency head, the Council shall file a
26copy of its recommendations for privatization with the



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1Governor's office, the legislative appropriations committees,
2and the Governor's Office of Management and Budget for
3submission to the relevant legislative appropriation
5    (i) The Council may appoint advisory groups to conduct
6studies, research, or analyses and make reports and
7recommendations with respect to a matter within the
8jurisdiction of the Council. At least one member of the Council
9shall serve on each advisory group.
10    (j) Subject to Section 25, subsection (b), this Act does
11not preclude a State agency from privatizing the provision of a
12good or service independent of the Council.
13    (k) Any aggrieved person may elect to directly seek
14judicial relief.
15    Section 20. Commercial activities inventory and review.
16    (a) On or before June 30, 2021, the Council shall create an
17inventory of activities of State agencies to classify whether
18each activity or elements of the activity are:
19        (1) A commercial activity that can be obtained in whole
20    or in part from a private enterprise.
21        (2) An inherently governmental activity.
22    (b) The Council shall update the inventory created under
23this Section at least every 2 years.
24    (c) The Council shall make the inventory available to the
25public through electronic means.



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1    (d) State agencies shall cooperate with inventory requests
2made by the Council.
3    Section 25. Business cases to outsource; review and
4analysis; requirements.
5    (a) A proposal to outsource having a projected cost of more
6than $10,000,000 in any fiscal year shall require:
7        (1) An initial business case analysis conducted by the
8    State agency and submitted to the Council, the Governor,
9    the President of the Senate, and the Speaker of the House
10    of Representatives at least 60 days before a solicitation
11    is issued. The Council shall evaluate the business case
12    analysis and submit an advisory report to the State agency,
13    the Governor, the President of the Senate, and the Speaker
14    of the House of Representatives when the advisory report is
15    completed, but at least 30 days before the agency issues
16    the solicitation.
17        (2) A final business case analysis conducted by the
18    State agency and submitted after the conclusion of any
19    negotiations, at least 30 days before execution of a
20    contract, to the Council, the Governor, the President of
21    the Senate, and the Speaker of the House of
22    Representatives.
23    (b) A proposal to outsource having a projected cost of at
24least $1,000,000, but not more than $10,000,000, in any fiscal
25year shall require:



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1        (1) An initial business case analysis conducted by the
2    State agency and submission of the business case, at least
3    30 days before issuing a solicitation, to the Council, the
4    Governor, the President of the Senate, and the Speaker of
5    the House of Representatives.
6        (2) A final business case analysis conducted by the
7    State agency and submitted after the conclusion of any
8    negotiations, at least 30 days before execution of a
9    contract, to the Council, the Governor, the President of
10    the Senate, and the Speaker of the House of
11    Representatives.
12    (c) A business case to outsource having a projected cost of
13less than $1,000,000 in any fiscal year shall require a final
14business case analysis conducted by the State agency after the
15conclusion of any negotiations and provided to the Council at
16least 30 days before execution of a contract. The Council shall
17provide the business cases in its annual report to the
18President of the Senate and the Speaker of the House of
20    (d) For any proposed outsourcing, the State agency shall
21develop a business case that justifies the proposal to
22outsource. The business case is not subject to challenge or
23protest. The business case must include:
24        (1) A detailed description of the service or activity
25    for which the outsourcing is proposed.
26        (2) A description and analysis of the State agency's



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1    current performance based on existing performance measures
2    if the State agency is currently performing the service or
3    activity.
4        (3) The goals desired to be achieved through the
5    proposed outsourcing and the rationale for the goals.
6        (4) A citation to the existing or proposed legal
7    authority for outsourcing the service or activity.
8        (5) A description of available options for achieving
9    the goals. If State employees are currently performing the
10    service or activity, at least one option involving
11    maintaining State provision of the service or activity
12    shall be included.
13        (6) An analysis of the advantages and disadvantages of
14    each option, including, at a minimum, potential
15    performance improvements and risks.
16        (7) A description of the current market for the
17    contractual services that are under consideration for
18    outsourcing.
19        (8) A cost benefit analysis documenting the direct and
20    indirect specific baseline costs, savings, and qualitative
21    and quantitative benefits involved in or resulting from the
22    implementation of the recommended option or options. The
23    analysis must specify the schedule that, at a minimum, must
24    be adhered to in order to achieve the estimated savings.
25    All elements of cost must be clearly identified in the cost
26    benefit analysis, described in the business case and



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1    supported by applicable records and reports. The State
2    agency head shall attest that based on the data and
3    information underlying the business case and to the best of
4    the State agency head's knowledge all projected costs,
5    savings, and benefits are valid and achievable. For the
6    purposes of this paragraph:
7            "Cost" means the reasonable, relevant, and
8        verifiable cost, which may include elements such as
9        personnel, materials and supplies, services,
10        equipment, capital depreciation, rent, maintenance and
11        repairs, utilities, insurance, personnel travel,
12        overhead, and interim and final payments. The
13        appropriate elements shall depend on the nature of the
14        specific initiative.
15            "Savings" means the difference between the direct
16        and indirect actual annual baseline costs compared to
17        the projected annual cost for the contracted functions
18        or responsibilities in any succeeding State fiscal
19        year during the term of the contract.
20        (9) A description of differences among current State
21    agency policies and processes and, as appropriate, a
22    discussion of options for or a plan to standardize,
23    consolidate, or revise current policies and processes, if
24    any, to reduce the customization of any proposed solution
25    that would otherwise be required.
26        (10) A description of the specific performance



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1    standards that must, at a minimum, be met to ensure
2    adequate performance.
3        (11) The projected time frame for key events from the
4    beginning of the procurement process through the
5    expiration of a contract.
6        (12) A plan to ensure compliance with the public
7    records law.
8        (13) A specific and feasible contingency plan
9    addressing contractor nonperformance and a description of
10    the tasks involved in and costs required for its
11    implementation.
12        (14) A State agency's transition plan for addressing
13    changes in the number of agency personnel, affected
14    business processes, employee transition issues, and
15    communication with affected stakeholders, such as agency
16    clients and the public. The transition plan must contain a
17    reemployment and retraining assistance plan for employees
18    who are not retained by the State agency or employed by the
19    contractor.
20        (15) A plan for ensuring access by persons with
21    disabilities in compliance with applicable State and
22    federal law.
23        (16) A description of legislative and budgetary
24    actions necessary to accomplish the proposed outsourcing.
25    (e) Each contract for a proposed outsourcing pursuant to
26this Section shall include the following:



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1        (1) A scope-of-work provision that clearly specifies
2    each service or deliverable to be provided, including a
3    description of each deliverable or activity that is
4    quantifiable, measurable, and verifiable. This provision
5    must include a clause stating that if a particular service
6    or deliverable is inadvertently omitted or not clearly
7    specified but determined to be operationally necessary and
8    verified to have been performed by the agency within the 12
9    months before the execution of the contract, the service or
10    deliverable will be provided by the contractor through the
11    identified contract amendment process.
12        (2) A service level agreement provision describing all
13    services to be provided under the terms of the agreement,
14    the State agency's service requirements and performance
15    objectives, specific responsibilities of the State agency
16    and the contractor, and the process for amending any
17    portion of the service level agreement. Each service level
18    agreement must contain an exclusivity clause that allows
19    the State agency to retain the right to perform the service
20    or activity, directly or with another contractor, if
21    service levels are not being achieved.
22        (3) A provision that identifies all associated costs,
23    specific payment terms, and payment schedules, including
24    provisions governing incentives and financial
25    disincentives and criteria governing payment.
26        (4) A provision that identifies a clear and specific



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1    transition plan that will be implemented in order to
2    complete all required activities needed to transfer the
3    service or activity from the State agency to the contractor
4    and operate the service or activity successfully.
5        (5) A performance standards provision that identifies
6    all required performance standards, which must include at a
7    minimum:
8            (A) Detailed and measurable acceptance criteria
9        for each deliverable and service to be provided to the
10        State agency under the terms of the contract that
11        document the required performance level.
12            (B) A method for monitoring and reporting progress
13        in achieving specified performance standards and
14        levels.
15            (C) The sanctions or disincentives that will be
16        imposed for nonperformance by the contractor or State
17        agency.
18        (6) A provision that requires the contractor and its
19    subcontractors to maintain adequate accounting records
20    that comply with all applicable federal and State laws and
21    generally accepted accounting principles.
22        (7) A provision that authorizes the State agency to
23    have access to and audit all records related to the
24    contract and subcontracts, or any responsibilities or
25    functions under the contract and subcontracts, for
26    purposes of legislative oversight and a requirement for



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1    audits by a service organization pursuant to professional
2    auditing standards, if appropriate.
3        (8) A provision that requires the contractor to
4    interview and consider for employment with the contractor
5    each displaced State employee who is interested in that
6    employment.
7        (9) A contingency plan provision that describes the
8    mechanism for continuing the operation of the service or
9    activity, including transferring the service or activity
10    back to the State agency or successor contractor, if the
11    contractor fails to perform and comply with the performance
12    standards and levels of the contract and the contract is
13    terminated.
14        (10) A provision that requires the contractor and its
15    subcontractors to comply with public records laws
16    specifically to:
17            (A) Keep and maintain the public records that
18        ordinarily and necessarily would be required by the
19        State agency in order to perform the service or
20        activity.
21            (B) Provide the public with access to the public
22        records on the same terms and conditions that the State
23        agency would provide the records.
24            (C) Ensure that records that are exempt or records
25        that are confidential and exempt are not disclosed
26        except as authorized by law.



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1            (D) Meet all requirements for retaining records
2        and transfer to the State agency, at no cost, all
3        public records in possession of the contractor on
4        termination of the contract and destroy any duplicate
5        public records that are exempt or confidential. All
6        records stored electronically must be provided to the
7        State agency in a format that is compatible with the
8        information technology systems of the State agency.
9        (11) A provision that addresses ownership of
10    intellectual property. This paragraph does not provide the
11    specific authority needed by a State agency to obtain a
12    copyright or trademark.
13        (12) If applicable, a provision that allows the State
14    agency to purchase from the contractor, at its depreciated
15    value, assets used by the contractor in the performance of
16    the contract. If assets have not depreciated, the State
17    agency shall retain the right to negotiate to purchase at
18    an agreed on cost.
19    Section 30. Council accounting method. The Council, by
20rule, shall establish an accounting method that:
21    (1) Is similar to generally accepted accounting principles
22used by a private enterprise.
23    (2) Allows an agency to identify the total actual cost of
24engaging in a commercial activity in a manner similar to how a
25private enterprise identifies the total actual cost to the



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1private enterprise, including the following:
2        (A) Labor expenses, such as compensation and benefits,
3    costs of training, costs of paying overtime, and costs of
4    supervising labor or other personnel expenses.
5        (B) Operating costs, such as vehicle maintenance and
6    repair, marketing, advertising or other sales expenses,
7    office expenses, costs of an accounting operation such as
8    billing, insurance expenses, real estate or equipment
9    costs, debt service costs or a proportionate amount of
10    other overhead or capital expenses, such as vehicle
11    depreciation and depreciation of other fixed assets.
12        (C) Contract management costs.
13        (D) Other costs particular to a person supplying the
14    good or service.
15    (3) Provides a process to estimate the taxes a State agency
16would pay related to engaging in a commercial activity if the
17State agency were required to pay federal, State, and local
18taxes to the same extent as a private enterprise engaging in
19the commercial activity.
20    Section 35. Governor; required review of commercial
21activities. Beginning with fiscal year 2021, the Governor, at
22least once every 2 fiscal years, shall select at least 3
23commercial activities that are being performed by a State
24agency to be examined by the Governor's Office of Management
25and Budget.



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1    Section 40. Duties of the Governor's Office of Management
2and Budget.
3    (a) The Governor's Office of Management and Budget shall:
4        (1) Determine the amount of an appropriation that is no
5    longer needed by an executive branch agency because all or
6    a portion of the agency's provision of a good or service is
7    privatized.
8        (2) Adjust the Governor's budget recommendations to
9    reflect the amount that is determined under paragraph (1).
10        (3) Report its findings to the President of the Senate
11    and the Speaker of the House of Representatives.
12    (b) This Section does not prevent the Governor from making
13a budget recommendation regarding the restoration of a portion
14of the appropriation to a State agency that is reduced under
15this Section.
16    Section 45. Applicability. This Act does not apply to
17contracts in support of the planning, development,
18implementation, operation, or maintenance of the road, bridge,
19and public transportation construction program of the
20Department of Transportation.
21    Section 90. Repeal. This Act is repealed on July 1, 2030.
22    Section 99. Effective date. This Act takes effect upon
23becoming law.