An Act To Protect Taxpayers in the Privatization of Services and To Establish the State Procurement Review Committee
Maine Legislature, Session 130, LD 0875
Committee: State and Local Government
Sponsors: BALDACCI, RAFFERTY, CUDDY, FECTEAU
Amends: 5 MRSA §18, 5 MRSA §18-A, 5 MRSA §1816-B, 5 MRSA §1824-B

Legislative Document
No. 875
S.P. 289
In Senate, March 8, 2021
An Act To Protect Taxpayers in the Privatization of Services and To 
Establish the State Procurement Review Committee
Reference to the Committee on State and Local Government suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator BALDACCI of Penobscot.
Cosponsored by Senator: RAFFERTY of York, Representatives: CUDDY of Winterport, 
Speaker FECTEAU of Biddeford.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  5 MRSA §18, sub-§1, ¶D, as enacted by PL 1979, c. 734, §2, is amended 
to read:
D.  "Proceeding" means a proceeding, application, request, ruling, determination, 
award, contract, claim, controversy, charge, accusation, arrest or other matter relating 
to governmental action or inaction, but does not include an employee organization bid 
or contract to provide agency services under section 1816-B.
Sec. 2.  5 MRSA §18-A, sub-§4, as enacted by PL 2001, c. 203, §2, is amended to 
read:
4.  Exemptions.  This section does not apply:
A.  To purchases by the Governor under authority of Title 1, section 814;
B.  To contracts made with a corporation that has issued shares to the public for the 
general benefit of that corporation; or
C.  If an exemption is approved by the Director of the Bureau of General Services 
within the Department of Administrative and Financial Services or the director's 
designee based upon one of the following and if the director gives notice of the granting 
of this exemption to all parties bidding on the contract in question with a statement of 
the reason for the exemption and if an opportunity is provided for any party to appeal 
the granting of the exemption:
(1)  When the private entity or party that proposes to contract with the State and 
that employs the executive employee, based upon all relevant facts, is the only 
reasonably available source to provide the service or product to the State, as 
determined by the director; or
(2)  When the director determines that the amount of compensation to be paid to 
the private entity or party providing the service or product to the State is de 
minimis.; or
D.  To a contract by an employee organization to provide agency services under section 
1816-B.
Sec. 3.  5 MRSA §1816-B is enacted to read:
§1816-B.  Privatization of agency services
1. Definitions. As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A. "Agency" means a state agency as defined in section 1552, subsection 6, but does 
not include the Maine Community College System. 
B. "Agency cost estimate" means the cost to the agency seeking to privatize services 
to provide the services in the most cost-efficient manner. "Agency cost estimate" is the 
total of all direct and indirect costs to provide the services, including but not limited to 
wages and pension, insurance and other employee benefit costs of agency employees.
C.  "Agency employee" means an employee of the agency seeking to privatize services.
D.  "Business day" means any calendar day, excluding Saturdays, Sundays and legal 
holidays listed in Title 4, section 1051.
E. "Commissioner" means the Commissioner of Administrative and Financial 
Services.
F. "Contract cost" means the total cost to the agency to privatize services.  The total 
cost is the sum of the cost of the proposed bid designated pursuant to subsection 7, the 
costs of transition from public to private operation, the costs of any additional 
unemployment and retirement benefits and the costs of monitoring and otherwise 
administering contract performance.
G.  "Contractor" means a nongovernmental person that has entered into a privatization 
contract with the State. 
H.  ''Dependent'' means the spouse or child of an employee if the spouse or child would 
qualify for dependent status under the United States Internal Revenue Code of 1986 or 
for whom a support order has been or could be granted under Title 19-A, section 1652, 
subsection 2. 
I.  "Employee organization" means an organization that has as its primary purpose the 
representation of employees in their employment relations with an employer under 
Title 26, chapter 9-B. 
J.  ''Privatization contract'' means an agreement or a combination or series of 
agreements by which a nongovernmental person agrees with an agency to provide 
services that are substantially similar to and in lieu of services provided, in whole or in 
part, by agency employees and that has an agency cost estimate of at least $500,000 as 
of October 1, 2021 and annually increased by the amount of increase in the Consumer 
Price Index compiled by the United States Department of Labor, Bureau of Labor 
Statistics for the most recent 12-month period for which data are available.  
"Privatization contract" does not include: 
(1)  Any subsequent agreement to a privatization contract, including an agreement 
resulting from a rebidding of previously privatized service, or an agreement 
renewing or extending a privatization contract; 
(2) A contract for information technology services provided to an agency if an 
employee organization representing the agency employees agrees to the terms of 
the contract in writing; or 
(3) An agreement solely to provide legal, management consulting, planning, 
engineering or design services.
2.  Privatization of services.  Notwithstanding any provision of this chapter or chapter 
to the contrary, an agency seeking to enter into a privatization contract shall, in 
consultation with the commissioner, comply with the requirements of this section. 
A. Prior to issuing a request for proposals under subsection 5 for the privatization of 
services, an agency seeking to enter into a privatization contract shall prepare a written 
statement that includes:
(1) A summary of the services proposed to be the subject of the privatization 
contract, including the specific quantity and standard of quality of the services;
(2) The minimum wage rate for each position for which a contractor may employ 
a person pursuant to the privatization contract and for which the duties are 
substantially similar to the duties performed by an agency employee.  The 
minimum wage rate must be the lowest classification under chapter 372 under 
which the comparable agency employee is paid or the average private sector wage 
rate for the position as determined by the commissioner from data collected by the 
Department of Administrative and Financial Services, Bureau of Human 
Resources and Bureau of General Services, whichever is lower; and
(3) The percentage paid by the State for the costs of health insurance plan coverage 
for the agency employees who are employed for not less than 20 hours per week 
and the percentage paid by the State for such costs for any dependent of such an 
employee.
B. A written statement created by an agency under paragraph A is a public record and 
must be filed, prior to issuance of a request for proposals, with the commissioner, the 
Attorney General and employee organizations that represent agency employees.
C. Prior to issuing a request for proposals under subsection 5 for the privatization of 
services, an agency seeking to enter into a privatization contract shall determine the 
agency cost estimate.  The agency cost estimate is confidential and not a public record 
until the day after the final day for the agency to receive sealed bids for the privatization 
contract pursuant to subsection 5, at which time the agency cost estimate becomes a 
public record and must be filed with the commissioner and the Attorney General.
3. Employee organization request for review; final agency action.  An employee 
organization representing agency employees may file a written request for review with the 
commissioner regarding the contents of the written statement required in subsection 2, 
paragraph A within 10 business days of the date the statement was filed.  The commissioner 
shall issue a written decision on the request for review within 15 business days of receiving 
the request for review.  The commissioner's decision under this subsection constitutes final 
agency action for the purposes of judicial review under chapter 375, subchapter 7.
4.  Collective bargaining agreement amendment.  An employee organization 
representing agency employees may at any time before the final day for the agency to 
receive sealed bids pursuant to subsection 5 propose an amendment to any relevant 
collective bargaining agreement to which the employee organization is a party, but such a 
proposed amendment may take effect only if the effect of the proposed amendment is to 
reduce the agency cost estimate below the contract cost. A proposed amendment under this 
subsection is confidential and not a public record until the day after the final day for the 
agency to receive sealed bids for the privatization contract pursuant to subsection 5, at 
which time the proposed amendment becomes a public record and must be filed with the 
agency, the commissioner and the Attorney General. 
5.  Request for proposals. An agency seeking to enter into a privatization contract 
shall solicit competitive sealed bids for the privatization contract through the request for 
proposals process. The day designated by the agency upon which it will accept sealed bids 
must be the same for all parties.
A. The request for proposals for a privatization contract and the privatization contract 
must require the contractor to:
(1)  Pay a rate no less than the minimum wage rate established pursuant to 
subsection 2, paragraph A, subparagraph (2) for each position subject to a 
minimum wage rate;
(2)  Provide, to an employee employed for not less than 20 hours per week and to 
any dependent of the employee, health insurance plan coverage that is comparable 
to the health insurance plan coverage provided to agency employees;
(3)  Pay not less than the percentage established pursuant to subsection 2, paragraph 
A, subparagraph (3) toward the cost of health insurance plan coverage for an 
employee employed for not less than 20 hours per week and for any dependent of 
such an employee;
(4)  Submit quarterly payroll records to the agency, listing the name, address, social 
security number, hours worked and hourly wage rate paid for each employee in the 
previous quarter. Employee names, addresses and social security numbers are 
confidential;
(5)  Offer available employee positions under the privatization contract to qualified 
agency employees who are displaced or terminated because of the privatization 
contract and who satisfy the nondiscriminatory hiring criteria of the contractor 
under subparagraph (6); and
(6)  Comply with a policy of nondiscrimination and take affirmative steps to 
provide equal opportunity for any person protected by the Maine Human Rights 
Act.
B. The Attorney General may bring a civil action for equitable relief in Superior Court 
to enforce paragraph A or to prevent or remedy the dismissal, demotion or other action 
prejudicing any employee as a result of a report of a violation of paragraph A.
C. The term of a privatization contract, including renewals provided for in a 
privatization contract, may not exceed 5 years unless a longer term is approved by the 
commissioner.
D. A privatization contract may not be amended for the purpose or effect of avoiding 
a requirement of this section. 
6. Employee organization bids.  Agency employees who are represented by an 
employee organization may organize and request that the employee organization submit a 
bid on their behalf to provide the services to be privatized.
A. An employee organization, after consulting with any agency employees seeking to 
bid on a privatization contract, shall provide adequate resources for the purpose of 
encouraging and assisting agency employees to organize and submit a bid to provide 
the services to be privatized.  For purposes of this paragraph, "adequate resources" 
means no less than the minimum level of assistance provided for in:
(1) The terms of the existing collective bargaining agreement covering the agency 
employees seeking to submit a bid; 
(2) The terms of the expired collective bargaining agreement covering the agency 
employees seeking to submit a bid during the period of collective bargaining 
negotiations for a new agreement; or
(3) The terms of a comparable collective bargaining agreement covering 
individuals who provide similar services if the existing or expired collective 
bargaining agreement does not provide for a minimum level of assistance.
B.  An employee organization bid under this subsection may be made as a joint venture 
with other persons.
C.  An employee organization bid under this subsection is confidential and not a public 
record until the day after the agency designates the proposed winning bidder under 
subsection 7.
7. Review of bids; designation of winning bidder.  After soliciting and receiving the 
submitted bids, an agency shall: 
A. Publicly designate the bidder to which the agency proposes to award a privatization 
contract;
B.  Determine the contract cost of the designated bid and file a cost analysis with the 
commissioner and the Attorney General.  If the proposed bidder under paragraph A 
proposes to perform any or all of the contract outside the boundaries of the State, the 
contract cost must be increased by the amount of any lost income tax revenue to the 
State caused by the corresponding elimination of agency employees, as determined by 
the State Tax Assessor; and
C. Determine whether the contract cost under paragraph B is less than the agency cost 
estimate prepared pursuant to subsection 2, paragraph C.  If the contract cost is equal 
to or more than the agency cost estimate, the agency may not enter into a privatization 
contract.
If a bid is received from an employee organization, the commissioner, or the 
commissioner's designee, may include staff from the Department of Administrative and 
Financial Services, Bureau of Human Resources in the bid review process authorized by 
section 1825-D.
8. Negotiation of privatization contract.  If the contract cost calculated pursuant to 
subsection 7, paragraph B is less than the agency cost estimate, the agency may begin 
negotiating the terms of the privatization contract except that, if an employee organization 
bid is awarded the privatization contract pursuant to subsection 7, the Department of 
Administrative and Financial Services, Bureau of Human Resources shall negotiate the 
terms of the privatization contract with the employee organization. If the contract cost is 
equal to or more than the agency cost estimate, the agency may not enter into a privatization 
contract.  The privatization contract must be filed with the commissioner and the Attorney 
General prior to execution.
9.  Attorney General authority.  The authority of the Attorney General over the 
privatization of services is governed by this subsection.
A. At any time during the process of privatizing any services pursuant to this section, 
the Attorney General may:
(1)  Intervene in the process;
(2)  Require by summons the attendance and testimony under oath of state 
employees and the production of documents for the purpose of investigating 
whether the provisions set forth in this chapter and chapter 156 are met.  All 
documents produced and testimony given to the Attorney General pursuant to this 
subparagraph are confidential. The Attorney General may seek an order from the 
Superior Court compelling compliance with a summons issued under this 
subparagraph; and
(3)  Bring an action in Superior Court in the name of the State against an agency 
when the Attorney General has reason to believe that a requirement of this section 
has not been met, the agency has acted unlawfully or beyond the scope of its 
authority, the actions or inactions of the agency are not supported by the record 
required by this section or the privatization of services is not in the public interest.
B.  After the filing of a court action under this subsection, further action by an agency 
under this section must be stayed unless the court orders otherwise.  During the period 
of the stay, any time period specified for agency action under this chapter or chapter 
is tolled until the court action is dismissed by the Attorney General or the Superior 
Court orders an agency to take further action.  Relief from the stay may be granted only 
upon a showing of compelling justification.
C.  Except as provided in this paragraph, at least 10 business days prior to 
commencement of an action under this subsection, the Attorney General shall notify 
the agency and the commissioner of the proposed action and shall provide the 
commissioner and the agency an opportunity to confer with the Attorney General in 
person or by counsel or other representative as to the proposed action.  The Attorney 
General may proceed without notice upon a showing by affidavit of immediate 
irreparable harm to the citizens of the State.
D.  An action by the Attorney General under this subsection may seek to, among other 
things, restrain by temporary or permanent injunction the privatization of services 
under this section, and the court may make such other orders or judgments as may be 
necessary to prevent the privatization of services.
10.  Rules; forms.  The Department of Administrative and Financial Services may 
prescribe forms and adopt rules to carry out the provisions of this section and to ensure that 
the competitive bidding process under this section is consistent with the provisions of 
competitive bids under subchapter 1-A.  Rules adopted pursuant to this subsection are 
routine technical rules as defined in chapter 375, subchapter 2-A.
Sec. 4.  5 MRSA §1824-B is enacted to read:
§1824-B.  State Procurement Review Committee
The State Procurement Review Committee, referred to in this section as "the 
committee," is established to oversee, subject to the provisions of section 1825-B, 
subsection 2, the purchase of services subject to this chapter that cost $1,000,000 or more. 
The purchase of services that cost less than $1,000,000 may be subject to this section at the 
discretion of the chair of the committee.
1.  Membership.  The membership of the committee includes:
A.  A member of the Governor's staff, appointed by the Governor;
B.  The director of the division of procurement services within the Department of 
Administrative and Financial Services or the director's designee;
C.  The State Budget Officer or the State Budget Officer's designee;
D.  The State Controller or the State Controller's designee; and
E.  The Attorney General or the Attorney General's designee, serving as a nonvoting 
member.
The Chief Information Officer or the Chief Information Officer's designee is a committee 
member when the services to be purchased by a department or agency are within the Chief 
Information Officer's responsibilities and duties under chapter 163.
2.  Chair.  The director of the division of procurement services within the Department 
of Administrative and Financial Services or the director's designee shall serve as chair of 
the committee.
3.  Unanimous consent.  A decision by the committee requires unanimous consent.
4.  Requests for review.  Prior to issuing a request for proposals, executing a contract 
or grant or renewing, extending, amending or otherwise altering an existing contract or 
grant to purchase services that cost $1,000,000 or more, a department or agency shall 
submit a request for review to the chair of the committee.  The department or agency shall 
submit to the chair the request for proposals, proposed contract, contract amendment and 
related contract bid documents, as appropriate.  The committee may request additional 
information and documentation from the department or agency.
5.  Attorney General review.  If the cost of the request for proposals, contract or grant 
or renewal, extension, amendment or other alteration to an existing contract or grant is 
likely to equal or exceed $3,000,000, the department or agency shall give the Attorney 
General the opportunity to review the proposal, contract or grant or the renewal, extension, 
amendment or other alteration to an existing contract or grant prior to submitting a request 
for review pursuant to subsection 4.  The Attorney General, or the Attorney General's 
designee, may review the terms of the proposal, contract or grant or the renewal, extension, 
amendment or other alteration to an existing contract or grant and notify the department or 
agency of any concerns with the terms.
6.  Duties.  The committee may approve a request to issue a request for proposals, 
execute a contract or grant or renew, extend, amend or otherwise alter an existing contract 
or grant subject to this section if the committee finds that:
A.  The service to be provided under the contract or grant cannot be economically 
provided by a department or agency;
B.  The contract or grant is the most economical, effective and appropriate means of 
providing the service;
C.  The contract or grant will not impair the ability of a department or agency to meet 
its statutory duties and responsibilities under state or federal laws, rules or regulations; 
and
D.  The contract or grant will not diminish the impact of statewide or other budgetary 
cost-saving initiatives.
7.  Rules; forms.  The Department of Administrative and Financial Services may 
prescribe forms and adopt rules to carry out the provisions of this section.  Rules adopted 
pursuant to this subsection are routine technical rules as defined in chapter 375, subchapter 
2-A.
SUMMARY
This bill sets out requirements for certain state agencies seeking to enter into a contract 
to privatize services.  Prior to issuing a request for proposals, an agency must determine 
the minimum wage rate it pays the employees providing the services, the percentage of 
health insurance plan coverage provided by the State for those employees and their 
dependents and the cost to the agency to provide the services.  All bids and subsequent 
privatization contracts must pay the established minimum wage rate, provide comparable 
health insurance coverage and pay at least the same percentage for health insurance plan 
coverage as paid by the agency to employees providing the services and their dependents 
prior to the privatization.  The bid and successful contractor must offer employment to any 
agency employee displaced or terminated because of the privatization of services who 
meets the contractor's nondiscriminatory hiring criteria.  The bill allows agency employees, 
through an employee organization, to submit a bid to provide the services.  The bill allows 
an employee organization representing employees who will be displaced or terminated if 
the services are privatized to offer an amendment to the collective bargaining agreement 
that will lower the agency's cost to provide the services.  A privatization contract may not 
be executed if the total cost of the contract, including transition costs to move services from 
the agency to the contractor, is more than the agency's estimation of its cost to provide the 
services.  The bill requires all calculations, documents and other relevant materials to be 
submitted to the Attorney General.  The Attorney General may choose to review the 
materials and may request additional information during the review.  The bill grants 
authority to the Attorney General to intervene at any stage of the privatization process.  The 
bill also gives an employee organization the authority to request a review of the written 
statement prepared by the agency seeking to privatize services.  The Commissioner of 
Administrative and Financial Services is required to provide a response to such a request 
within 15 business days, and the decision is considered final agency action for purposes of 
judicial review. The Attorney General has the authority to bring an action to prevent or 
enjoin privatization in appropriate cases. 
The bill also establishes the State Procurement Review Committee to oversee requests 
for proposals and contracts and grants and renewals, extensions, amendments and other 
alterations to existing contracts and grants valued over $1,000,000.  The Office of the 
Attorney General must be consulted when the value equals or exceeds $3,000,000.