OSA Special Reviews Under the Privatization Statute
Chapter 296 of the Acts of 1993, An Act Further Regulating the Purchase of State Services, provides that the State Auditor approve all privatization contracts entered into by state agencies. The OSA must certify that the cost of performing the service by the private vendor is less costly than having the work done by state employees, and that the quality of services will be equal or better. The law, now Chapter 7, sections 52 through 55, MGLs, applies to contracts that have an aggregate value of $200,000 or more.
Pursuant to this law, the privatization process includes preparing a detailed statement of services to be used in soliciting competitive bids, estimating the most cost-efficient method of providing those services with agency employees, and, finally, comparing the in-house cost with the cost of contract performance. Additionally, the agency is responsible for ensuring that the private bids and private contract, if ultimately awarded, contain all Chapter 296 provisions regarding wages, benefits, and personnel.
It is the responsibility of the State Auditor to independently determine whether the process followed by the agency meets the requirements of the law.
Under the privatization law, the State Auditor has 30 business days (and 30 additional days if deemed necessary) from the date of receipt of all necessary agency documents to approve or reject the contract. The law also authorizes the State Auditor to adopt regulations and prescribe forms to carry out statute provisions. The OSA, in response, issued :Guidelines for Implementing the Commonwealth's Privatization Law," outlining the process and prescribing forms agencies must use in preparing and submitting certification data. The OSA issued thirteen formal determinations on privatization proposals.
The OSA routinely responds to many requests from agencies, the Legislature, and the public to clarify or investigate specific privatization compliance issues. OSA responsibilities have included meetings with concerned parties, correspondence, document requests and reviews, and final determinations relative to these inquiries.