The Vermont Statutes Online

Title 3: Executive

Chapter 014: Standards for Contracts Including Privatization Contracts

• § 341. Definitions

  As used in this chapter:

  (1) “Agency” means any agency, board, department, commission, committee, or authority of the Executive Branch of State government.

  (2) “Personal services contract” means a contract for services that is categorized as personal services in accordance with procedures developed by the Secretary of Administration and is consistent with subdivisions 342(1), (2), and (3) of this title.

  (3) “Privatization contract” means a contract for services valued at $25,000.00 or more per year, which is the same or substantially similar to and in lieu of services previously provided, in whole or in part, by permanent, classified State employees, and which results in a reduction in force of at least one permanent, classified employee, or the elimination of a vacant position of an employee covered by a collective bargaining agreement.

  (4) “Contract for services” means an agreement or combination or series of agreements by which an entity or individual agrees with an agency to provide services as a contractor, rather than as an employee. (Added 1999, No. 75 (Adj. Sess.), § 2; amended 2009, No. 54, § 107, eff. June 1, 2009; 2015, No. 78 (Adj. Sess.), § 2.)

• § 342. Contracting standards; contracts for services

  Each contract for services valued at $25,000.00 or more per year shall require certification by the Office of the Attorney General to the Secretary of Administration that such contract for services is not contrary to the spirit and intent of the classification plan and merit system and standards of this title. A contract for services is contrary to the spirit and intent of the classification plan and merit system and standards of this title, and shall not be certified by the Office of the Attorney General as provided in this section, unless the provisions of subdivisions (1), (2), and (3) of this section are met, or one or more of the exceptions described in subdivision (4) of this section apply.

  (1) The agency will not exercise supervision over the daily activities or methods and means by which the contractor provides services other than supervision necessary to ensure that the contractor meets performance expectations and standards; and

  (2) The services provided are not the same as those provided by classified State employees within the agency; and

  (3) The contractor customarily engages in an independently established trade, occupation, profession, or business; or

  (4) Any of the following apply:

  (A) The services are not available within the agency or are of such a highly specialized or technical nature that the necessary knowledge, skills, or expertise is not available within the agency.

  (B) The services are incidental to a contract for purchase or lease of real or personal property.

  (C) There is a demonstrated need for an independent audit, review, or investigation; or independent management of a facility is needed as a result of, or in response to, an emergency such as licensure loss or criminal activity.

  (D) The State is not able to provide equipment, materials, facilities, or support services in the location where the services are to be performed in a cost-effective manner.

  (E) The contract is for professional services, such as legal, engineering, or architectural services, that are typically rendered on a case-by-case or project-by-project basis, and the services are for a period limited to the duration of the project, normally not to exceed two years or provided on an intermittent basis for the duration of the contract.

  (F) The need for services is urgent, temporary, or occasional, such that the time necessary to hire and train employees would render obtaining the services from State employees imprudent. Such contract shall be limited to 90 days’ duration, with any extension subject to review and approval by the Secretary of Administration.

  (G) Contracts for the type of services covered by the contract are specifically authorized by law.

  (H) Efforts to recruit State employees to perform work, authorized by law, have failed in that no applicant meeting the minimum qualifications has applied for the job.

  (I) The cost of obtaining the services by contract is lower than the cost of obtaining the same services by utilizing State employees. When comparing costs, the provisions of section 343 of this title shall apply. (Added 1999, No. 75 (Adj. Sess.), § 2; amended 2015, No. 78 (Adj. Sess.), § 3.)

• § 343. Privatization contracts; procedure

  (a) An agency shall not enter into a privatization contract, unless all of the following are satisfied:

  (1) Thirty-five days prior to the beginning of any open bidding process, the agency provides written notice to the collective bargaining representative of the intent to seek to enter a privatization contract. During those 35 days, the collective bargaining representative shall have the opportunity to discuss alternatives to contracting. Such alternatives may include amendments to the contract if mutually agreed upon by the parties. Notices regarding the bid opportunity may not be issued during the 35-day discussion period. The continuation of discussions beyond the end of the 35-day period shall not delay the issuance of notices.

  (2) The proposed contract is projected to result in overall cost savings to the State of at least 10 percent above the projected cost of having the services provided by classified State employees.

  (3) When comparing the cost of having a service provided by classified State employees to the cost of having the service provided by a contractor:

  (A) The expected costs of having services provided by classified State employees and obtaining the service through a contractor should be compared over the life of the contract. One-time costs associated with having services provided by a contractor rather than classified State employees, such as the expected cost of leave pay-outs for separating employees, unemployment compensation, and the cost of meeting the State’s obligation, if any, to continue health insurance benefits, shall be spread over the expected life of the contract.

  (B) The basic cost of services by a contractor includes:

  (i) the bid price or maximum acceptable bid identified by the contracting authority; and

  (ii) any additional costs to be incurred by the agency for inspection, facilities, reimbursable expenses, supervision, training, and materials, but only to the extent that these costs exceed the costs the agency could expect to incur for inspection, facilities, reimbursable expenses, and materials if the services were provided by classified State employees.

  (C) The basic cost for services provided by a classified State employee includes:

  (i) wages, benefits, and training;

  (ii) the cost of supervision and facilities, but only to the extent that these costs exceed the costs the agency could expect to incur for supervision or facilities if the services were provided by a contractor; and

  (iii) the estimated cost of obtaining goods when the comparison is with the cost of a contract that includes both goods and services.

  (D) Possible reductions in the cost of obtaining services from classified State employees that require concessions shall not be considered unless proposed in writing by the certified collective bargaining agent and mutually agreed to by the State and collective bargaining agent.

  (b)(1) A privatization contract shall contain specific performance measures regarding quantity, quality, and results and guarantees regarding the services performed.

  (2) The agency shall provide information in the State’s Workforce Report on the contractor’s compliance with the specific performance measures set out in the contract.

  (3) The agency may not renew the contract if the contractor fails to comply with the specific performance measures set out in the contract as required by subdivision (1) of this subsection.

  (c)(1) Before an agency may renew a privatization contract for the first time, the Auditor of Accounts shall review the privatization contract analyzing whether it is achieving:

  (A) the 10 percent cost-savings requirement set forth in subdivision (a)(2) of this section;

  (B) the performance measures incorporated into the contract as required under subdivision (b)(1) of this section.

  (2) If the Auditor of Accounts finds that a privatization contract has not achieved the cost savings required under subdivision (a)(2) of this section or complied with performance measures required under subdivision (b)(1) of this section, the Auditor of Accounts shall file a report with the agency and the House and Senate Committees on Government Operations, and the agency shall review whether to renew the privatization contract or perform the work with State employees. (Added 1999, No. 75 (Adj. Sess.), § 2; amended 2017, No. 174 (Adj. Sess.), § 1, eff. May 25, 2018.)

• § 344. Contract administration

  (a) The Secretary of Administration shall maintain a database with information about contracts for services, including approved privatization contracts and approved personal services contracts. The Secretary shall also maintain a database with information about privatization contracts that are rejected because they fail to qualify under subdivision 343(2) of this title. Contracts maintained in the database shall be public record to the extent provided under 1 V.S.A. chapter 5, and shall be located at the agency of origin, including information about names of contractors, summaries of work to be performed, costs, and duration.

  (b) The information on contracts maintained in the database shall be reported to the General Assembly in the annual workforce report required under subdivision 309(a)(19) of this title. The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the report to be made under this subsection. (Added 1999, No. 75 (Adj. Sess.), § 2; amended 2013, No. 142 (Adj. Sess.), § 7; 2015, No. 78 (Adj. Sess.), § 4.)

• § 345. Equal pay in government contracts; certification

  (a) Notwithstanding any other provision of law, an agency may not enter into a contract for goods with a contractor who does not provide written certification of compliance with the equal pay provisions of 21 V.S.A. § 495(a)(7).

  (b) A contractor subject to this section shall maintain and make available its books and records at reasonable times and upon notice to the contracting agency and the Attorney General so that either may determine whether the contractor is in compliance with this section. (Added 2013, No. 31, § 3.)

• § 346. State contracting; intellectual property, software design, and information technology

  (a) The Secretary of Administration shall include in Administrative Bulletin 3.5 a policy direction applicable to State procurement contracts that include services for the development of software applications, computer coding, or other intellectual property, which would allow the State of Vermont to grant permission to the contractor to use or own the intellectual property created under the contract for the contractor’s commercial purposes.

  (b) The Secretary may recommend contract provisions that authorize the State to negotiate with a contractor to secure license terms and license fees, royalty rights, or other payment mechanism for the contractor’s commercial use of intellectual property developed under a State contract.

  (c) If the Secretary authorizes a contractor to own intellectual property developed under a State contract, the Secretary may recommend language to ensure the State retains a perpetual, irrevocable, royalty-free, and fully paid right to continue to use the intellectual property including escrow for perpetual use at least annually. (Added 2013, No. 199 (Adj. Sess.), § 18; amended 2019, No. 49, § 2, eff. June 10, 2019.)

• § 347. Contractor contribution restrictions

  The Secretary of Administration shall include in the terms and conditions of sole source contracts a self-certification of compliance with the contractor contribution restrictions set forth in 17 V.S.A. § 2950. (Added 2017, No. 79, § 4a, eff. Dec. 16, 2018.)

• § 348. Internet service providers; net neutrality compliance

  (a) The Secretary of Administration shall develop a process by which an Internet service provider may certify that it is in compliance with the consumer protection and net neutrality standards established in subsection (b) of this section.

  (b) A certificate of net neutrality compliance shall be granted to an Internet service provider that demonstrates and the Secretary finds that the Internet service provider, insofar as the provider is engaged in the provision of broadband Internet access service:

  (1) Does not engage in any of the following practices in Vermont:

  (A) Blocking lawful content, applications, services, or nonharmful devices, subject to reasonable network management.

  (B) Impairing or degrading lawful Internet traffic on the basis of Internet content, application, or service or the use of a nonharmful device, subject to reasonable network management.

  (C) Engaging in paid prioritization, unless this prohibition is waived pursuant to subsection (c) of this section.

  (D) Unreasonably interfering with or unreasonably disadvantaging either a customer’s ability to select, access, and use broadband Internet access service or lawful Internet content, applications, services, or devices of the customer’s choice or an edge provider’s ability to make lawful content, applications, services, or devices available to a customer. Reasonable network management shall not be considered a violation of this prohibition.

  (E) Engaging in deceptive or misleading marketing practices that misrepresent the treatment of Internet traffic or content to its customers.

  (2) Publicly discloses to consumers accurate information regarding the network management practices, performance, and commercial terms of its broadband Internet access services sufficient for consumers to make informed choices regarding use of such services and for content, application, service, and device providers to develop, market, and maintain Internet offerings.

  (c) The Secretary may waive the ban on paid prioritization under subdivision (b)(1)(C) of this section only if the Internet service provider demonstrates and the Secretary finds that the practice would provide some significant public interest benefit and would not harm the open nature of the Internet in Vermont.

  (d) As used in this section:

  (1) “Broadband Internet access service” means a mass-market retail service by wire or radio in Vermont that provides the capability to transmit data to and receive data from all or substantially all Internet endpoints, including any capabilities that are incidental to and enable the operation of the communications service, but excluding dial-up Internet access service. The term also encompasses any service in Vermont that the Secretary finds to be providing a functional equivalent of the service described in this subdivision, or that is used to evade the protections established in this chapter.

  (2) “Edge provider” means any person in Vermont that provides any content, application, or service over the Internet and any person in Vermont that provides a device used for accessing any content, application, or service over the Internet.

  (3) “Internet service provider” or “provider” means a business that provides broadband Internet access service to any person in Vermont.

  (4) “Paid prioritization” means the management of an Internet service provider’s network to favor directly or indirectly some traffic over other traffic, including through the use of techniques such as traffic shaping, prioritization, resource reservation, or other forms of preferential traffic management, either in exchange for consideration, monetary or otherwise, from a third party or to benefit an affiliated entity, or both.

  (5) “Reasonable network management” means a practice that has a primarily technical network management justification but does not include other business practices and that is primarily used for and tailored to achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband Internet access service.

  (e) The terms and definitions of this section shall be interpreted broadly and any exceptions interpreted narrowly, using relevant Federal Communications Commission orders, advisory opinions, rulings, and regulations as persuasive guidance. (Added 2017, No. 169 (Adj. Sess.), § 2.)

• § 349. State contracting; Internet service

  The Secretary of Administration shall include in Administrative Bulletin 3.5 a requirement that State procurement contracts for broadband Internet access service, as defined in subdivision 348(d)(3) of this title, include terms and conditions requiring that the Internet service provider certify that it is in compliance with the consumer protection and net neutrality standards established in section 348 of this title. (Added 2017, No. 169 (Adj. Sess.), § 3.)