KRS 45A.551: Procedures for state agency privatization contracts.

(1) Upon approval of the Finance and Administration Cabinet, a state agency may enter

into a privatization contract.

(2) Before a state agency recommends to the Finance and Administration Cabinet that it

enter into a privatization contract, the state agency sh all determine and set forth in

writing:

(a) The necessity for the service and the intended goals of the service;

(b) Problems and inefficiencies existing with the current governmental operation

of the service; and

(c) Whether the service can efficiently be provided by the agency.

(3) If the state agency determines that the service cannot efficiently be provided by the

agency, the state agency shall be permitted to continue the normal contracting

process for the service. However, if the state agency determin es that the service can

efficiently be provided by the agency and the state agency chooses to proceed with

privatization, it shall set forth in writing to the Finance and Administration Cabinet:

(a) The tangible benefits of privatizing the service;

(b) Any state or federal legal restraints that may limit or prevent privatization of

the government service;

(c) The availability of multiple qualified and competitive private vendors;

(d) 1. A cost-benefit analysis comparison that shall include, but not be limit ed

to, collection and analysis of the total assessible fixed and variable,

direct and indirect, costs of:

a. The current governmental operation; and

b. The private vendor contract.

2. The costs shall include, but not be limited to:

a. Facility and equipment maintenance;

b. Inflation-adjusted costs, where comparison to past years is being

conducted;

c. Transition costs associated with shifting the service delivery from

the government agency to a private vendor;

d. Costs of monitoring, evaluating, and enforcing the contract;

e. Personnel costs such as those providing for benefits, early

retirements, retraining, and relocation in another position; and

f. A plan for resuming government operation of the service if the

privatization effort fails.

(e) A plan of assistance for all state employees who will be adversely affected by

privatizing the service. The plan shall include at least:

1. Efforts to place affected employees in vacant positions in another state

agency and to retrain employees for another position in state

government;

2. Provisions in the contract, if feasible, for the hiring by the contractor of

displaced employees at wages and benefits comparable to the wages and

benefits paid to the state employees, subject to the provisions of KRS

11A.130; and

3. Prior notification to affected state employees the day the contract is

signed, or three (3) months before the day the adverse effect will occur,

whichever is earlier.

(f) A process for monitoring, evaluating, and enforcing a contract wi th a private

vendor which shall include, but not be limited to:

1. Development of a method for ongoing, comprehensive performance

evaluation of the private vendor; and

2. Establishment of performance criteria and standards to evaluate the

private vendor.

(4) All information required by subsections (2) and (3) of this section shall be

submitted to the Finance and Administration Cabinet for its review and approval

prior to proceeding with the contracting provisions of KRS Chapter 45A.

(5) The state agency shall retain responsibility for ensuring the quality and reliability of

the services.

(6) All records in the possession of a state agency in conjunction with the approval,

evaluation, or enforcement of a privatization contract unless exempt under another

statute shall be public records, access to which shall be governed by KRS 61.870 to

61.884.

(7) Any other statute to the contrary notwithstanding, all records prepared, owned,

used, in the possession of, or retained by a state agency in conjunction with the

approval, evaluation, or enforcement of a privatization contract shall be public

records, access to which shall be governed by KRS 61.870 to 61.884.