An Act establishing the Kansas performance review board; amending K.S.A. 75-3739 and repealing the existing section.

Be it enacted by the Legislature of the State of Kansas:

New Section 1. This act shall be known and may be cited as the Kansas performance review act. The purpose of this act is to provide a continuing process to review functions of state government to determine whether they are being executed in the most efficient manner possible. At all times, the board established hereunder shall endeavor to reduce the cost of state government while maintaining quality public services. State agencies shall use the same or similar analysis of services as the performance review board when identifying areas for privatization.

New Sec. 2. (a) There is hereby established the Kansas performance review board, hereinafter referred to as the board, consisting of five mem- bers. At least one member shall have cost accounting experience. Not more than three members shall be members of the same political party. The governor shall, subject to confirmation by the senate, appoint all board members. The initial five members shall be appointed to a term of four years, except that two members of the first board shall be appointed to a term of two years. The governor shall designate the term of office of each member of the first board. The members appointed to two-year terms must be members of different political parties. Upon expiration of a member's term of office, the governor shall appoint a qualified succes- sor. All such successors shall serve a four-year term. Each member shall serve until a successor is appointed. Whenever a vacancy occurs in the membership of the board prior to the expiration of a term of office, the governor shall appoint a successor. In addition to the five appointed mem- bers, the secretary of administration or the secretary's designee shall serve as an ex officio, nonvoting member.

(b) The board shall organize annually at the first meeting subsequent to June 30 and shall elect a chairperson. Other meetings shall be as the board designates. Four members of the board shall constitute a quorum.

(c) Subject to appropriations, each member of the board shall receive compensation, subsistence allowances, mileage and expenses pursuant to K.S.A. 75-3223, and amendments thereto.

(d) The board may hire an executive director. The executive director shall be in the unclassified service of the Kansas civil service act and shall receive a salary as designated by the board and approved by the governor. The executive director shall provide technical and administrative services to the board and shall have such other duties as the board shall designate. The board may also hire such persons as are necessary to provide support services. Such persons shall be in the unclassified service of the Kansas civil service act and shall receive a salary as designated by the board and approved by the governor.

New Sec. 3. The board shall be responsible for reviewing govern- mental functions and recommending whether such functions should be delegated to the private sector, eliminated, retained in their present form or modified.

The board is authorized to:

(a) Adopt rules and regulations in accordance with K.S.A. 77-415 et seq., and amendments thereto to effectuate the purposes of this act;

(b) conduct research and investigate new methods to promote gov- ernmental efficiency;

(c) employ consultants, who shall be in the unclassified service under the Kansas civil service act, and fix their salaries, or contract for consult- ants; and

(d) submit to the governor and the legislature its recommendations for new or amendatory legislation designed to promote governmental efficiency.

New Sec. 4. (a) The board shall be authorized to initiate an analysis of a governmental function upon receipt of any of the following:

(1) A written suggestion or complaint regarding the opportunity to modify, eliminate or delegate to the private sector a governmental func- tion by a citizen of the state including legislators and public employee organizations;

(2) a petition of private interest, wherein a private firm indicates both the interest and capability of providing a service currently provided by state government;

(3) a private sector complaint of public sector competition, wherein a private firm submits a written allegation that state government is pro- viding or offering a product or service that is available from the private sector and is in competition with the private firm; or

(4) a written suggestion by a public employee or a public employee organization regarding the opportunity to review a governmental function that has been delegated to the private sector.

(b) Upon receipt of any of the above, the board shall meet to consider whether formal analysis of the submission is merited. In making this decision the board shall be authorized to hold hearings, conduct inquiries and gather such other data as may be necessary to make such a determination. The board shall be authorized to exercise the same power as a state agency for purposes of K.S.A. 77-501 et seq., and amendments thereto.

(c) If, by majority vote, the board determines that further inquiry is merited, the board may direct the secretary of administration to collect certain data concerning the governmental function and verify its accuracy. All state agencies shall cooperate with the secretary in the process of data collection. Upon conclusion of the data collection, the secretary shall make a preliminary recommendation to the board concerning whether the governmental function should be delegated to the private sector, elim- inated, retained in its present form or modified. The secretary shall report to the board all factual data upon which the recommendation is based.

(d) After receiving the recommendation of the secretary, the board may conduct its own formal analysis.

Upon completion of the analysis, the board shall publish its own pre- liminary recommendation. After a period of not less than 60 days, the board shall hold a hearing to invite public comment concerning its pre- liminary recommendations. After such hearing, the board shall report its final recommendation to the governor, the speaker of the house of rep- resentatives and the president of the senate. Any such recommendation must consider the economic impact on local communities affected by a decision to delegate a government function to the private sector and in- clude a plan for displaced state workers. Bidding procedures which are in accordance with K.S.A. 75-3739, and amendments thereto, must be utilized before awarding any state contract to private business. No service may be privatized unless either a cost saving or an improved level of service has been identified.

New Sec. 5. For purposes of this act, unless the context clearly in- dicates otherwise, the following terms shall be defined as follows:

(a) ``Analysis'' means a thorough determination of the cost of the per- formance of governmental functions by the public sector compared to performance of the same functions by the private sector. Such costs shall include the direct and indirect, fully allocated and avoidable costs of per- forming the services by the public sector including, but not limited to: Agency overhead, salary, life-cycle equipment costs, contract administra- tion, monitoring and conversion costs. The analysis should determine whether a governmental function can be performed at a cost savings through the private sector at a quality at least equal to that achieved currently. Furthermore, the analysis should determine whether a govern- mental function, if not suitable for delegation to private industry, may be modified to operate more efficiently, whether the service should be re- tained in its present form or eliminated entirely.

(b) ``Governmental function'' means any service required by state law to be provided directly or indirectly by a unit of local government, an agency of state government or any service provided through the procure- ment process.

New Sec. 6. After July 1, 2000, and every three years thereafter Kan- sas Inc. shall contract for an external review of the board's activities to be reported to the next successive session of the legislature. Such report shall include:

(a) The disposition of every governmental function reviewed by the board;

(b) a cost benefit analysis of any of the recommendations of the board which are actually implemented; and

(c) a recommendation to continue or discontinue the board.

New Sec. 7. There is hereby established in the state treasury the Kansas performance review board fund. All moneys credited to such fund shall be used for the operations of the Kansas performance review board in the performance of powers, duties and functions prescribed by law. All expenditures from such fund shall be made in accordance with ap- propriation acts and upon warrants of the director of accounts and reports issued pursuant to vouchers approved by the chairperson of the board or the chairperson's designee.

Sec. 8. K.S.A. 75-3739 is hereby amended to read as follows: 75- 3739. In the manner as provided in this act and rules and regulations established thereunder:

(a) All contracts for construction and repairs, and all purchases of and contracts for supplies, materials, equipment and contractual services to be acquired for state agencies shall be based on competitive bids, except that competitive bids need not be required: (1) For contractual services when, in the judgment of the director of purchases, no competition exists; or (2) when, in the judgment of the director of purchases, chemicals and other material or equipment for use in laboratories or experimental stud- ies by state agencies are best purchased without competition, or where rates are fixed by law or ordinance; or (3) when, in the judgment of the director of purchases, an agency emergency requires immediate delivery of supplies, materials or equipment, or immediate performance of serv- ices; or (4) when any statute authorizes another procedure or provides an exemption from the provisions of this section.

The director of purchases shall make a detailed report at least once in each calendar quarter to the legislative coordinating council and the chair- persons of the senate committee on ways and means and the house of representatives committee on appropriations of all contracts for goods, supplies, materials, equipment or contractual services entered into with- out competitive bids under subsections (a)(1), (a)(2), (a)(3) or (g).

(b) If the amount of the purchase is estimated to exceed approxi- mately $10,000, sealed bids shall be solicited by notice published once in the Kansas register not less than 10 days before the date stated therein for the opening of such bids. The director of purchases may waive this publication of notice requirement when the director determines that a more timely procurement is in the best interest of the state. The director of purchases also may designate a trade journal for such publication. The director of purchases also shall solicit such bids by sending notices by mail to prospective bidders. All bids shall be sealed when received and shall be opened in public at the hour stated in the notice. The director of purchases shall make a detailed report at least once in each calendar quarter to the legislative coordinating council and the chairpersons of the senate committee on ways and means and the house of representatives committee on appropriations of all cases when the publication of notice of bid solicitations in the Kansas register have been waived under this subsection.

(c) All purchases estimated to exceed approximately $5,000 but not more than $10,000, shall be made after receipt of sealed bids following at least three days' notice posted on a public bulletin board in the office of the director of purchases. The director of purchases also may solicit sealed bids by mail in such cases in like manner as provided in subsection (b).

(d) All purchases estimated to be less than $5,000 may be made after the receipt of three or more bid solicitations by telephone and after re- ceipt of sealed bids following at least three days' notice posted on a public bulletin board in the office of the director of purchases. Such bids shall be recorded as provided in subsection (e) of K.S.A. 75-3740 and amend- ments thereto. With the approval of the secretary of administration, the director of purchases may delegate authority to any state agency to make purchases of less than $10,000 either on the open market or under certain prescribed conditions and procedures. The director of purchases shall make a report at least once in each calendar quarter to the legislative coordinating council and the chairpersons of the senate committee on ways and means and the house of representatives committee on appro- priations of all current and existing delegations of authority under this subsection to state agencies.

(e) Subject to the provisions of subsection (d), contracts and pur- chases shall be based on specifications approved by the director of pur- chases. When deemed applicable and feasible by the director of pur- chases, such specifications shall include either energy efficiency standards or appropriate life cycle cost formulas, or both, for all supplies, materials, equipment and contractual services to be purchased by the state. The director of purchases may reject a contract or purchase on the basis that a product is manufactured or assembled outside the United States. No such specifications shall be fixed in a manner to effectively exclude any responsible bidder offering comparable supplies, materials, equipment or contractual services.

(f) Notwithstanding anything herein to the contrary, all contracts with independent construction concerns for the construction, improvement, reconstruction and maintenance of the state highway system and the ac- quisition of rights-of-way for state highway purposes shall be advertised and let as now or hereafter provided by law.

(g) The director of purchases may authorize state agencies to contract for services and materials with other state agencies, or with federal agen- cies, political subdivisions of Kansas, agencies of other states or subdivi- sions thereof, or private nonprofit educational institutions, without com- petitive bids.

(h) Except as otherwise specifically provided by law, no state agency shall enter into any lease of real property without the prior approval of the secretary of administration. Such state agency shall submit to the secretary of administration such information relating to any such pro- posed lease as the secretary may require. The secretary of administration shall either approve, modify and approve or reject any such proposed lease.

(i) The director of purchases shall require all bidders on state con- tracts to disclose all substantial interests held by the bidder in the state.

Sec. 9. K.S.A. 75-3739 is hereby repealed.

Sec. 10. This act shall take effect and be in force from and after its publication in the statute book.

Approved May 11, 1996.