Sec. 1. 5 MRSA §1816-A, sub-§2, ķI is enacted to read:

I.__An equivalent basis for cost comparison between state employee and private contractor provision of services is calculated, as established by rules adopted by the State Purchasing Agent pursuant to section 1825-B, subsection 11, and it is determined that the private contractor provides the best value.

Sec. 2. 5 MRSA §1825-B, sub-§11 is enacted to read:

11.__Rulemaking; unfair competition.__State departments and agencies may not achieve cost savings due to cost differentials that derive from a bidder's failure to provide health and retirement benefits to its employees.__The State Purchasing Agent shall adopt rules governing the purchase of services and the awarding of grants or contracts to establish a basis for bid price and cost comparison among businesses that provide health and retirement benefits to their employees and those that do not provide these benefits.__The rules must include a methodology for calculating bid price and cost differentials for services provided by businesses and state employees due to the provision of health and retirement benefits for employees.__The rules must adjust the bid prices to establish an equivalent basis for bid price and cost comparison among businesses when awarding contracts and between businesses and state employees when determining whether or not a contract is permitted under this section.__ These rules must apply to all state departments and agencies.__ Rules adopted pursuant to this subsection are routine technical rules as defined in chapter 375, subchapter 2-A.

Sec. 3. Effective date. Section 1 of this Act takes effect on July 1, 2004.

SUMMARY

This bill requires the State Purchasing Agent to adopt rules to establish a fair basis for bid price comparison among businesses that provide health and retirement benefits and those that do not provide these benefits. It also requires that, before a state agency or department may contract personal services out to a private contractor, it must establish an equivalent basis for cost comparison for businesses that do not provide health insurance or retirement benefits. Personal services contracting is not permitted unless a private contractor provides the best value.