PRINTER'S NO. 1898
No. 1503 Session of 2007
INTRODUCED BY MAHONEY, McCALL, BELFANTI, BENNINGTON, BLACKWELL,
BRENNAN, BUXTON, DeWEESE, EACHUS, FABRIZIO, FRANKEL, FREEMAN,
GEORGE, GIBBONS, GOODMAN, GRUCELA, HARKINS, JAMES, JOSEPHS,
KIRKLAND, KORTZ, KULA, MARKOSEK, MELIO, MOUL, MUNDY, MYERS,
M. O'BRIEN, PASHINSKI, PETRONE, SANTONI, SEIP, SIPTROTH,
K. SMITH, SOLOBAY, SURRA, THOMAS, WALKO AND YUDICHAK,
JUNE 13, 2007
REFERRED TO COMMITTEE ON LABOR RELATIONS, JUNE 13, 2007
AN ACT
1 Providing for public oversight and accountability of
2 privatization contracts; and imposing penalties.
3 The General Assembly of the Commonwealth of Pennsylvania
4 hereby enacts as follows:
5 Section 1. Short title.
6 This act shall be known and may be cited as the Public
7 Services Accountability Act.
8 Section 2. Declaration of policy.
9 The General Assembly finds and declares that using private
10 contractors to provide public services formerly provided by
11 public employees does not always promote the public interest. To
12 ensure that residents of this Commonwealth receive high-quality
13 public services at low cost, with due regard for the taxpayers
14 of this Commonwealth, the service recipients and the needs of
15 public and private workers, the General Assembly finds it
1 necessary to regulate privatization contracts and to protect
2 those workers who report conditions and practices which impact
3 the efficiency and quality of public services provided by
4 private contractors. The General Assembly further finds it
5 necessary to ensure that access to public information guaranteed
6 by the act of June 21, 1957 (P.L.390, No.212), referred to as
7 the Right-to-Know Law, is not in any way hindered by public
8 services being provided by private contractors.
9 Section 3. Definitions.
10 The following words and phrases when used in this act shall
11 have the meanings given to them in this section unless the
12 context clearly indicates otherwise:
13 "Agency." Includes an executive office, department,
14 division, board, commission or other office or officer in the
15 executive branch of the government.
16 "Discrimination or retaliation." Includes a threat,
17 intimidation or any adverse change in an employee's wages,
18 benefits or terms or conditions of employment. In the case of a
19 person who is not an employee of the private contractor, the
20 term includes any adverse action taken against the person or the
21 person's employer, including the cancellation of or refusal to
22 renew a contract with the person or the person's employer.
23 "Employee of a private contractor." Includes a worker
24 directly employed by a private contractor as well as an employee
25 of a subcontractor or an independent contractor that provides
26 supplies or services to a private contractor. The term includes
27 former employees of a private contractor or subcontractor and
28 former independent contractors.
29 "Person." Includes an individual, institution, Federal,
30 State or local governmental entity or any other public or
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1 private entity.
2 "Private contractor." Any entity which enters into a
3 privatization contract.
4 "Privatization contract." An agreement or combination or
5 series of agreements by which a nongovernmental person or entity
6 agrees with an agency to provide services, valued at $100,000 or
7 more, which are substantially similar to and in lieu of services
8 previously provided or that could have been provided in whole or
9 in part by regular employees of an agency.
10 "Public record." A public record as defined in section 1 of
11 the act of June 21, 1957 (P.L.390, No.212), referred to as the
12 Right-to-Know Law. The term includes any document relating to
13 the privatization contract or performance under the contract,
14 prepared, received or retained by a contractor or subcontractor
15 whether the document is handwritten, typed, tape-recorded,
16 printed, photocopied, photographed or recorded by any other
17 method.
18 "Services." Includes, with respect to a private contractor,
19 all aspects of the provision of services provided by a private
20 contractor pursuant to a privatization contract or any services
21 provided by a subcontractor of a private contractor.
22 "Subcontractor." A subcontractor of a private contractor for
23 work under a privatization contract or an amendment to a
24 privatization contract.
25 Section 4. Privatization contracts and requirements.
26 (a) General rule.--No agency shall make any privatization
27 contract and no privatization contract shall be valid unless the
28 agency and the contractor comply with each of the requirements
29 in this section and sections 5 through 8 and include the
30 specified provisions in the privatization contract.
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1 (b) Statement of services and analysis of bids for
2 privatization contract.--The agency shall prepare a specific
3 written statement of the services proposed to be the subject of
4 the privatization contract, including the specific quality and
5 standard of quality of the subject services. The agency shall
6 solicit competitive sealed bids for the privatization contracts
7 based upon this statement. The day designated by the agency upon
8 which it will accept these sealed bids shall be the same for any
9 and all parties. This statement shall be a public record, shall
10 be filed in the agency and shall be published in the
11 Pennsylvania Bulletin not later than 30 business days prior to
12 the date on which bids are due.
13 (c) Disclosure.--Every bid shall detail:
14 (1) The length of continuous employment of current
15 employees with the contractor by job classification without
16 identifying employee names. In addition, the contractor may
17 submit information detailing the relevant prior experience of
18 employees within each job classification. If the positions
19 identified by the bidder shall be newly created, the bid
20 shall identify the minimum requirements for prospective
21 applicants for each position.
22 (2) The annual rate of current staff turnover.
23 (3) The number of hours of training planned for each
24 employee in subject matters directly related to providing
25 services to residents of this Commonwealth and clients.
26 (4) Any legal complaints issued by an enforcement agency
27 for alleged violations of applicable Federal, State or local
28 rules, regulations or laws, including laws governing employee
29 safety and health, labor relations and other employment
30 requirements, and any citations, court findings or
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1 administrative findings for violations of Federal, State or
2 local rules, regulations or laws. The information must
3 include the date, enforcement agency, the rule, law or
4 regulation involved and any additional information the
5 contractor may wish to submit.
6 (5) Any collective bargaining agreements or personnel
7 policies covering the employees to provide services to the
8 Commonwealth.
9 (6) Political contributions made by the bidder or any
10 employee in a management position with the bidding company to
11 any elected officer of the State or member of the General
12 Assembly during the four years prior to the due date of the
13 bid.
14 (d) Maintenance of wage standards.--For each position in
15 which a contractor employs any person pursuant to the
16 privatization contract, the minimum compensation to be paid for
17 the position shall be the greater of the wage rate paid at step
18 one of the grade or classification under which an agency
19 employee whose duties are most similar is paid, plus the cash
20 value of health and other benefits provided to those State
21 employees, or the average private sector compensation rate,
22 including the value of health and other benefits, for the
23 position as determined by the Department of Labor and Industry.
24 (e) Term.--The term of any privatization contract shall not
25 exceed two years. No amendment to a privatization contract shall
26 be valid if it has the purpose or effect of avoiding any
27 requirement of this act.
28 (f) Contract provisions.--A privatization contract shall
29 contain provisions requiring the contractor to offer available
30 employee positions pursuant to the contract to qualified regular
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1 employees of the agency whose State employment is terminated
2 because of the privatization contract. A privatization contract
3 shall also contain provisions requiring the contractor to comply
4 with a policy of nondiscrimination and equal opportunity for all
5 persons and to take affirmative steps to provide equal
6 opportunity for all persons.
7 (g) Union neutrality.--State funds shall not be used to
8 support or oppose unionization, including, but not limited to,
9 preparation and distribution of materials which advocate for or
10 against unionization; hiring or consulting legal counsel or
11 other consultants to advise the contractor about how to assist,
12 promote or deter union organizing or how to impede a union which
13 represents the contractor's employees from fulfilling its
14 representational responsibilities; holding meetings to influence
15 employees about unionization; planning or conducting activities
16 by supervisors to assist, promote or deter union activities; or
17 defending against unfair labor practice charges brought by
18 Federal or State enforcement agencies.
19 Section 5. Review of contract costs.
20 (a) Estimate of costs.--Any agency considering whether to
21 enter into a privatization contract shall prepare a
22 comprehensive written estimate of the costs of regular agency
23 employees providing the subject services in the most cost-
24 efficient manner. The estimate shall include all direct and
25 indirect costs of regular agency employees providing the subject
26 services, including, but not limited to, pension, insurance and
27 other employee benefit costs. For the purpose of this estimate,
28 any employee organization may, at any time before the final day
29 for the agency to receive sealed bids pursuant to section 4(b),
30 propose amendments to any relevant collective bargaining
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1 agreement to which it is a party. Any amendments shall take
2 effect only if necessary to reduce the cost estimate pursuant to
3 this subsection below the contract cost. The estimate shall
4 remain confidential until after the final day for the agency to
5 receive sealed bids for the privatization contract at which time
6 the estimate shall become a public record, shall be filed in the
7 agency and shall be published in the Pennsylvania Bulletin.
8 (b) Evaluation of contractor performance and costs.--After
9 soliciting and receiving bids, the agency shall publicly
10 designate the bidder to which it proposes to award the
11 privatization contract. In selecting a contractor, the agency
12 shall consider the contractor's past performance and its record
13 of compliance with Federal, State and local laws, including the
14 disclosures as required in section 4(c). The agency shall
15 prepare a comprehensive written analysis of the contract cost
16 based upon the designated bid, specifically including the costs
17 of transition from public to private operation, of additional
18 unemployment and retirement benefits, if any, and of monitoring
19 and otherwise administering contract performance. If the
20 designated bidder proposes to perform any or all of the contract
21 outside the boundaries of this Commonwealth, the contract shall
22 be increased by the amount of income tax revenue, if any, which
23 will be lost to the Commonwealth by the corresponding
24 elimination of agency employees, as determined by the Department
25 of Revenue to the extent that it is able to do so.
26 (c) Agency certification.--The head of the agency shall
27 certify in writing that:
28 (1) The agency has complied with all provisions of this
29 section and of all other applicable laws.
30 (2) The quality of the services to be provided by the
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1 designated bidder is likely to satisfy the quality
2 requirements of the statement prepared pursuant to section
3 4(b) and to equal or exceed the quality of services which
4 could be provided by regular agency employees.
5 (3) The contract cost will be at least 10% less than the
6 estimated cost pursuant to subsection (a), taking into
7 account all comparable types of costs and all the additional
8 costs of the contract as specified in subsection (b).
9 (4) The proposed privatization contract is in the public
10 interest in that it meets the applicable quality and fiscal
11 standards set forth in this act.
12 Any privatization contract entered into by an agency and the
13 agency certification described in this subsection shall be
14 public records subject to disclosure pursuant to the act of June
15 21, 1957 (P.L.390, No.212), referred to as the Right-to-Know
16 Law.
17 Section 6. Monitoring and enforcement of privatization
18 contracts.
19 (a) Subcontracts and amendments to privatization
20 contracts.--
21 (1) No contractor shall award a subcontract for work
22 under a contract or for work under an amendment to a contract
23 without the agency's approval of:
24 (i) The selection of the subcontractor.
25 (ii) The provisions of the subcontract.
26 (2) Each contractor shall file a copy of each executed
27 subcontract or amendment to the subcontract with the agency,
28 which shall maintain the subcontract or amendment as a public
29 record, as defined under the act of June 21, 1957 (P.L.390,
30 No.212), referred to as the Right-to-Know Law.
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1 (b) Submission of audits.--Any private contractor awarded a
2 privatization contract, and any subcontractor to a private
3 contractor subject to these provisions, shall file with the
4 agency copies of financial audits of the private contractor
5 prepared at least annually during the course of the contract
6 term.
7 (c) Access.--All privatization contracts shall include a
8 contract provision specifying that in order to determine
9 compliance with these principles as well as the contract, the
10 private contractor shall be required to provide the Commonwealth
11 or its agents, except where prohibited by Federal or State laws,
12 regulations or rules, reasonable access through representatives
13 of the private contractor to facilities, records and employees
14 that are used in conjunction with the provision of contract
15 services.
16 (d) Performance standards.--The private contractor shall
17 submit a report, not less than annually during the term of the
18 privatization contract, detailing the extent to which the
19 contractor has achieved the specific quantity and standard of
20 quality of the subject services as specified by the agency
21 pursuant to section 4(b) and its compliance with all Federal,
22 State and local laws, including any complaints, citations or
23 findings issued by administrative agencies or courts.
24 (e) Enforcement.--The agency may seek contractual remedies
25 for any violation of a privatization contract. In addition, if a
26 contractor fails to comply with section 4(d), (f) or (g), any
27 person or entity aggrieved by the violation may bring a claim
28 for equitable and other relief, including back pay. In such a
29 suit, an aggrieved person or entity shall be entitled to costs
30 and attorney fees.
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1 Section 7. Public record ownership and access.
2 (a) Ownership of public records.--
3 (1) No contractor or subcontractor, or employee or agent
4 of a contractor or subcontractor, shall have any ownership
5 rights or interest in any public records which the
6 contractor, subcontractor, employee or agent possesses,
7 modifies or creates pursuant to a contract, subcontract or
8 amendment to a contract or subcontract.
9 (2) No contractor or subcontractor or employee or agent
10 of a contractor or subcontractor shall impair the integrity
11 of any public records which the contractor, subcontractor,
12 employee or agent possesses or creates.
13 (3) Public records which a contractor, subcontractor or
14 employee or agent of a contractor or subcontractor possesses,
15 modifies or creates pursuant to a contract or subcontract
16 shall at all times and for all purposes remain the property
17 of the Commonwealth.
18 (b) Public access to information.--
19 (1) Any public record which an agency provides to a
20 contractor or subcontractor or which a contractor or
21 subcontractor creates shall be and remain a public record for
22 the purposes of the act of June 21, 1957 (P.L.390, No.212),
23 referred to as the Right-to-Know Law, and the enforcement
24 provisions of that law shall apply to any failure to disclose
25 records under this section.
26 (2) With regard to any public record, the agency and the
27 contractor or subcontractor shall have a joint and several
28 obligation to comply with the obligations of the agency under
29 the Right-to-Know Law, provided the determination of whether
30 to disclose a particular record or type of record shall be
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1 made solely by the agency.
2 (3) No contractor or subcontractor or employee or agent
3 of a contractor or subcontractor shall disclose to the public
4 any public records:
5 (i) Which it possesses, modifies or creates pursuant
6 to a contract, subcontract or amendment to a contract or
7 subcontract.
8 (ii) Which the agency:
9 (A) is prohibited from disclosing pursuant to
10 Federal or State law in all cases;
11 (B) may disclose pursuant to Federal or State
12 law only to certain entities or individuals or under
13 certain conditions; or
14 (C) may withhold from disclosure pursuant to
15 Federal or State law.
16 (4) No provision of this subsection shall be construed
17 to prohibit any contractor from disclosing public records to
18 any of its subcontractors to carry out the purposes of its
19 subcontract.
20 (5) No contractor or subcontractor or employee or agent
21 of a contractor or subcontractor shall sell, market or
22 otherwise profit from the disclosure or use of any public
23 records which are in its possession pursuant to a contract,
24 subcontract or amendment to a contract or subcontract, except
25 as authorized in the contract, subcontract or amendment.
26 (6) Any contractor or subcontractor or employee or agent
27 of a contractor or subcontractor which learns of any
28 violation of this section shall, no later than seven calendar
29 days after learning of the violation, notify the agency and
30 the Attorney General of the violation.
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1 (c) Penalties.--In addition to any remedies provided under
2 the Right-to-Know Law:
3 (1) If any person violates subsection (a) or (b), the
4 Attorney General may bring an action against the person
5 seeking:
6 (i) damages on behalf of the State for the
7 violation;
8 (ii) restitution for damages suffered by any person
9 as a result of the violation; or
10 (iii) imposition and recovery of a civil penalty of
11 not more than $50,000 for the violation.
12 (2) In addition to the remedies under paragraph (1), any
13 person aggrieved by a violation of subsection (a) or (b) may
14 bring an action to recover any damages suffered as a result
15 of the violation.
16 (3) In any action brought under paragraph (1) or (2),
17 the court may:
18 (i) order disgorgement of any profits or other
19 benefits derived as a result of a violation of subsection
20 (a) or (b);
21 (ii) award punitive damages, costs and reasonable
22 attorney fees; and
23 (iii) order injunctive or other equitable relief.
24 (4) Proof of public interest or public injury shall not
25 be required in any action brought under paragraph (1) or (2).
26 No action may be brought under paragraph (1) or (2) more than
27 three years after the occurrence of the violation.
28 (5) Any person who knowingly and willfully violates
29 subsection (a) or (b) shall, for each violation, be fined not
30 more than $5,000 or imprisoned for not less than one year nor
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1 more than five years, or both.
2 Section 8. Prohibition against discrimination or retaliation
3 for disclosure of information.
4 (a) General rule.--No person shall retaliate or discriminate
5 in any manner against any public employee or employee of a
6 private contractor because that employee, or any person acting
7 on behalf of the employee, in good faith:
8 (1) Engaged in any disclosure of information relating to
9 the services provided by a private contractor pursuant to a
10 privatization contract.
11 (2) Advocated on behalf of service recipients with
12 respect to the care or services provided by the private
13 contractor.
14 (3) Initiated, cooperated or otherwise participated in
15 any investigation or proceeding of any governmental entity
16 relating to the services provided pursuant to a privatization
17 contract.
18 (b) Attempts.--No person shall retaliate or discriminate in
19 any manner against any public employee or employee of a private
20 contractor because the employee attempted or had an intention to
21 engage in an action described in subsection (a).
22 (c) Restrictions on reporting prohibited.--No person shall
23 by contract, policy or procedure prohibit or restrict any
24 employee of a private contractor from engaging in any action for
25 which a protection against discrimination or retaliation is
26 provided under subsection (a).
27 (d) Confidential information.--This section does not protect
28 disclosures that would violate Federal or State law or diminish
29 or impair the rights of any person to the continued protection
30 of confidentiality of communications provided by Federal or
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1 State law.
2 (e) Good faith action.--With respect to the conduct
3 described in subsection (a)(1), an employee of a private
4 contractor shall be considered to be acting in good faith if the
5 employee reasonably believes that:
6 (1) the information is true; and
7 (2) the information disclosed by the employee:
8 (i) evidences a violation of any law, rule or
9 regulation or of a generally recognized professional or
10 clinical standard; or
11 (ii) relates to the care, services or conditions
12 which potentially endanger one or more recipients of
13 service or employees employed pursuant to a privatization
14 contract.
15 (f) Confidentiality of complaints to government agencies.--
16 The identity of an employee of a private contractor who
17 complains in good faith to a government agency or department or
18 any member or employee of the General Assembly about the quality
19 of services provided by a private contractor shall remain
20 confidential and shall not be disclosed by any person except
21 upon the knowing written consent of the employee of the private
22 contractor and except in the case in which there is imminent
23 danger to health or public safety or an imminent violation of
24 criminal law.
25 (g) Enforcement.--
26 (1) (i) Any current or former public employee or
27 employee of a private contractor who believes that the
28 employee has been retaliated or discriminated against in
29 violation of subsection (a), (b) or (c) may file a civil
30 action in a court of competent jurisdiction against the
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1 person believed to have violated subsection (a), (b) or
2 (c).
3 (ii) If the court determines that a violation of
4 subsection (a), (b) or (c) has occurred, the court shall
5 award damages which result from the unlawful act or acts,
6 including compensatory damages, reinstatement,
7 reimbursement of any wages, salary, employment benefits
8 or other compensation denied or lost to the employee by
9 reason of the violation, as well as punitive damages,
10 attorney fees and costs, including expert witness fees.
11 The court shall award interest on the amount of damages
12 awarded at the prevailing rate.
13 (iii) The court may issue temporary, preliminary and
14 permanent injunctive relief restraining violations of
15 this act, including the restraint of any withholding of
16 the payment of wages, salary, employment benefits or
17 other compensation, plus interest, found by the court to
18 be due and the restraint of any other change in the terms
19 and conditions of employment and may award other
20 equitable relief as may be appropriate, including
21 employment, reinstatement and promotion.
22 (iv) An action may be brought under this subsection
23 not later than two years after the date of the last event
24 constituting the alleged violation for which the action
25 is brought.
26 (2) Any person who violates subsection (a), (b) or (c)
27 shall be subject to a civil penalty not to exceed $10,000 for
28 each violation. In determining the amount of any penalty
29 under this subsection, the appropriateness of the penalty to
30 the size of the business of the person charged and the
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1 gravity of the violation shall be considered. The amount of
2 any penalty under this subsection, when finally determined,
3 may be:
4 (i) deducted from any sums owing by the Commonwealth
5 to the person charged; or
6 (ii) ordered by the court, in an action brought for
7 a violation of subsection (a), (b) or (c) brought by the
8 employee or employees who suffered retaliation or
9 discrimination.
10 (h) Burden of proof.--
11 (1) In any civil action brought under this act, the
12 complainant shall have the initial burden of making a prima
13 facie showing that any behavior described in subsections (a),
14 (b) and (c) was a contributing factor in the adverse action
15 or inaction alleged in the complaint. A prima facie case
16 shall be established if the complainant can show that:
17 (i) the respondent knew of the complainant's
18 protected activities at the time that the alleged
19 unfavorable action or inaction was taken; and
20 (ii) the discriminatory action occurred within a
21 period of time such that a reasonable person could
22 conclude that an activity protected by subsection (a) or
23 (b) was a contributing factor in the discriminatory
24 treatment.
25 (2) Once the complainant establishes a prima facie case,
26 the burden shifts to the respondent to demonstrate, by clear
27 and convincing evidence, that it would have taken the same
28 action or inaction in the absence of the behavior.
29 (i) Notice.--
30 (1) Each private contractor shall post and keep posted
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1 in conspicuous places on its premises where notices to
2 employees and applicants for employment are customarily
3 posted, a notice setting forth excerpts from or summaries of
4 the pertinent provisions of this act and information
5 pertaining to the filing of a charge under this section.
6 (2) Any employer that willfully violates this section
7 may be assessed a civil penalty not to exceed $100 for each
8 separate offense.
9 Section 9. Nonpreemption.
10 Nothing in this act preempts any other law and nothing in
11 this act shall be construed or interpreted to impair or diminish
12 in any way the authority of any locality, municipality or
13 subdivision to enact and enforce any law which provides
14 equivalent or greater protection for its employees.
15 Section 10. Applicability.
16 This act shall apply as follows:
17 (1) Section 8 shall apply to acts of retaliation or
18 discrimination occurring on or after the first day of the
19 first month that begins after the effective date of this act.
20 (2) The remaining provisions of this act shall apply to
21 any privatization contract entered into after the effective
22 date of this act.
23 Section 11. Effective date.
24 This act shall take effect in 60 days.
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