STATE OF NEW JERSEY
219th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2020 SESSION
Sponsored by:
Assemblyman PAUL D. MORIARTY
District 4 (Camden and Gloucester)
Assemblyman HERB CONAWAY, JR.
District 7 (Burlington)
Assemblyman GORDON M. JOHNSON
District 37 (Bergen)
Co-Sponsored by:
Assemblywoman Sumter
SYNOPSIS
Requires State Auditor review of certain Department of Corrections privatization contracts.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning Department of Corrections privatization contracts and supplementing chapter 24 of Title 52 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. As used in this act:
"Aggregate cost savings" with respect to a privatization contract means the amount by which the net reduction of in-house costs exceeds the entire cost of the privatization contract.
"Entire cost of the privatization contract” means a detailed accounting of all costs borne by the State under a privatization contract, or pro-rata share of the costs, and all costs resulting from the contract, including:
(1) Costs of labor;
(2) Costs of fringe benefits;
(3) Costs of equipment or materials, whether supplied by the State or a private contractor;
(4) All other costs directly or indirectly attributable to transferring the work being performed by State employees to a private business entity under the contract, including, but not limited to, the costs of preparing and bidding the contract, the costs of training the new workforce, bonding costs, insurance liability costs, costs to the public of delayed or reduced services, and recovery costs of returning the work to the agency if required by future decision makers;
(5) Costs in the maintenance of any publicly supplied property, equipment or materials;
(6) Costs of administering, inspecting or monitoring the subcontracted service, including, but not limited to, the use of consultant services for this purpose;
(7) Costs of any anticipated unemployment compensation or other benefits, including retraining expenses, for State employees who are displaced as a result of the contracted service; and
(8) Costs of lost income tax revenue and other tax revenue to the State through the elimination of agency employees if the contractor performs functions outside of the State.
"Fringe benefits" means all employer-provided fringe benefits including health, dental, vision care, prescription, holidays, vacations, sick and administrative leave, pensions and other retirement benefits.
"Net reduction of in-house costs" means the net reduction of cost to the Department of Corrections caused by the State not providing or performing a service which is instead performed or provided by a private business entity under a privatization contract.
"Private business entity" means a non-governmental person or entity.
2. The State Auditor shall, as part of his responsibility under R.S.52:24-4, conduct a post audit of each privatization contract with a total value of more than $100,000 between the Department of Corrections and a private business entity. The State Auditor shall issue an annual report to the Governor and the Legislature regarding the contract, the first of which shall be issued not more than 90 days after the end of the first year that the contract is in effect, or, in the case of a contract entered into prior to the effective date of this act, not more than six months after the effective date of this act or more than 90 days after the end of the first year that the contract is in effect, whichever is later. The report shall include an evaluation of the actual net reduction of in-house costs, the actual entire cost of the privatization contract, and the actual aggregate cost savings of the contract. For the purposes of paragraph 6 of section 1 of Article 7 of the State Constitution, the duties assigned to the State Auditor by section 2 of this act are duties related to post-audits required pursuant to this section and make an essential contribution to the conduct of those post-audits. Any malfeasance, misfeasance or nonfeasance of the Department of Corrections or any officer of the Department of Corrections in connection with a privatization contract which is disclosed by any audit or investigation conducted pursuant to this act shall be subject to the provisions of R.S.52:24-7.
3. If the State Auditor finds that the privatization contract yielded no actual net reduction of in-house costs, the Commissioner of Corrections shall refrain from contracting with a private business entity for substantially similar services in the future and instead use State employees to perform the service.
4. This act shall take effect immediately.
STATEMENT
This bill requires the State Auditor to conduct a post audit of each privatization contract of more than $100,000 between the Department of Corrections and a private business entity and issue an annual report to the Governor and the Legislature regarding the contract. The report will include an evaluation of the actual net reduction of in-house costs, the actual entire cost of the contract, and the actual aggregate cost savings of the contract. If the State Auditor finds that the contract yielded no actual net reduction of in-house costs, the Commissioner of Corrections will refrain from contracting with a private business entity for the provision of such services in the future and instead use State employees to perform the services.
The bill also requires the State Auditor to report any malfeasance, misfeasance or nonfeasance of the Department of Corrections or any officer of the Department of Corrections in connection with a contract which is disclosed by any audit or investigation.
The bill takes effect immediately upon enactment.