Making our State More Competitive

Authorized by the new law, the purpose of competitive contracting is to help state agencies and higher education institutions find more cost-effective ways to provide services, and it provides the private sector a new opportunity to help the state develop a competitive edge.

By expanding contracting to services “traditionally and historically provided by state employees,” this provision will deliver results whether it’s brought into play or not. That is because employees will see it for what it was meant to be—an excellent opportunity to redesign how they do their jobs in order to deliver better results to those they serve at a competitive price.

• In the first step of the contracting process, employees providing a service made subject to contracting get the opportunity to propose to management alternatives that will achieve the objectives sought through contracting. If the alternatives recommended by employees are accepted by their agency, then the contracting proposal is put aside.
• If contracting goes forward, affected employees can form an employee business unit, known as an EBU, to compete with other bidders for the work. This means an EBU that submits a winning bid can, with agreement of the contracting agency, operate outside the limits imposed by civil service rules or labor contracts.
• Potentially, an EBU living up to its performance agreement can determine organization of the unit, salaries, work rules, training and any other accommodation the EBU believes will support its success. The employees in an EBU will keep the pension and health benefits that other employees have.
• If a contract is awarded to a private-sector company or nonprofit organization, the winning bidder will be encouraged to hire displaced state workers.