State agencies would check contractors and justify outsourcing public services

State agencies would check prospective contractors and could not award contracts to businesses found to be substantially the same as a barred contractor. The rules would cover barred contractors and successor businesses with meaningful continuity in ownership, management, or operations, including after bankruptcy. Two or more listed signs of business continuity would support treating the businesses as substantially the same, but the business could challenge that conclusion. Agencies would refer possible matches to the State Contracting Standards Board before awarding a contract. These provisions would take effect July 1, 2026. The contract ban would apply throughout the original contractor's full disqualification period.

State agencies proposing to contract out public services would prepare a written case addressing costs, service quality, risks, worker impacts, and backup plans. Core functions include health and safety oversight, setting standards for regulated activities, and law enforcement. Agencies would need evidence overcoming the presumption against outsourcing core government functions. Agencies could hire specialized technical expertise unavailable within the agency while keeping responsibility for the core function. If the case for outsourcing a core function relies on understaffing, the agency would need a plan to provide that service itself in the future. These requirements would take effect July 1, 2026.

The State Contracting Standards Board would employ at least five full-time workers, and its executive director would supply its recommended budget amounts and revisions. The governor could not reduce the board's spending allocations or requests for those allocations. Hiring would follow state personnel rules. The budget provision would set recommended amounts; it would not itself set aside money. The budget protections would take effect upon passage. The minimum staffing requirement would take effect July 1, 2026.

Agency purchasing officers would ensure that requests for bids and proposals include notices of bidders' and contractors' rights under section 4e-36. The notices would cover people and businesses seeking state contracts for goods and services. Contractors would receive notice before entering a covered contract. Unsuccessful bidders and other applicants would receive notice when the covered contract is awarded. The solicitation requirement would cover requests issued on or after July 1, 2026. Contract notices would apply to contracts entered on or after that date.

The State Contracting Standards Board could allow certain purchases of $25,000 or less without competitive bidding or negotiation. The exception would cover state purchases that meet both the dollar limit and an eligible purchase category. Only minor, nonrecurring, or emergency purchases would qualify. The board would act in consultation with the Commissioner of Administrative Services. Every exception would require a written record. Purchases of $10,000 or less would be exempt from online posting. These rules would take effect July 1, 2026. Required records would appear on the State Contracting Portal within five business days after an exception was granted.