State of Connecticut Contracting

1. State of ConnecticutContracting Presentation to Northeast Center for Youth and Families October 26, 2010 Judi Jordan, LCSW, MBA

2. Goals of Training • Improve understanding of human service contracting with State of Connecticut • Provide framework for understanding contract requirements • Enable managers to provide guidance to staff on contractual requirements & reporting • Provide information on new directions and developments

3. Department of Children & Families • Plan, create, develop, operate or arrange for, administer and evaluate a comprehensive and integrated state-wide program of services including preventive services for children who are: • Mentally ill, emotionally disturbed, substance abusers; • Delinquent; • Abused, neglected or uncared for; • and all children and youths who are or may be committed to it by any court, and all who are voluntarily admitted to, or remaining voluntarily under the supervision of, the commissioner, for services of any kind.

4. Regulatory Environment • Statute: Law codified in public acts • Regulation: Developed in conjunction with Office of Policy and Management to guide implementation of statute • Policy: Developed by individual purchasing agencies and specific to their operations

5. Types of Contracts • Personal Service Agreement (PSA) • Used to purchase consultation and other services to the state • Purchase of Service (POS) • Used to purchase services for clients of state agencies • Treated differently prior to 2004

6. 2004 Decision • Attorney General issued an opinion stating that no legal distinction exists between a PSA and a POS contract • All requirements established by OPM or other authorities for PSAs shall apply to POS contracts. • An agency’s written procedures for PSAs also shall apply to POS contracts.

7. Procurement • All services must be purchased through competitive bid, according to CGS § 4-212 et seq. • The Office of Policy and Management (OPM) issued Procurement Standards for Personal Service Agreements and Purchase of Service Contracts, last updated in February 2009.

8. Procurement • Outline of the work to be performed • Required minimum qualifications for the contractor • Criteria for review of proposals by the state agency the format for proposals • Deadline for submitting proposals

9. Procurement • Establish a screening committee to evaluate the proposals • Rank all proposals in accordance with the criteria in the RFP • Submit the names of the top three proposers to the executive head of the agency, who selects contractor

10. Waiver of Competitive Bidding • Contracts less than $20,000 and less than one year • May waive competitive bid at agency discretion • Contracts between $20,000-$50,000 or more than one year • May request waiver from OPM • Contracts greater than $50,000 • May request waiver-requires more justification

11. Waiver of Comptetitive Bidding • Cost to the state of a competitive selection procedure would outweigh the benefits of such procedure, as documented by the state agency • Proprietary services • Contractor mandated by the general statutes or a public or special act • Emergency services, including services needed for the protection of life or health.

12. Cost Standards • Developed by OPM in 2006 with input from two committees • State agency representatives • Private providers and CPA’s with non-profit experience • Defines allowable and non-allowable costs • Published in September 2007

13. Cost Standards • Specifies 3 budgeting and reporting categories • Direct costs • Indirect costs • Allocable as direct • Published in Sept 2007

14. Standard POS Contract DCF Consolidated Contract • Scope of Service for each service type • Consolidated budget • State Template language • Acceptance and approval, including HIPPA business associate agreement • Gift & Campaign contribution Affidavit • Non-Discrimination Affidavit

15. Contract Process • Program lead usually manager with social work or behavioral health background • Works with colleagues and providers to develop services • Fiscal lead each assigned 25-30 contracts • Reviews budgets and reports • Assists providers • Issues payments

16. Contract Process • Identify needed service or need for service redesign • Issue Request for Proposal • Program lead requests new contract (new provider) or amendment • Verify availability of funds • Prepare new scope of service

17. Contract Process • Request and receive Attorney General approval • Send scope to provider • Request budget from provider • Assemble paper contract for provider signing • Circulate for internal signing (at least 5 people) • Return executed contract to provider

18. Budget Development • Follows Cost standards • Based on RFP submission • Negotiated with Program Lead

19. Payment Process • Allotment released to Department quarterly • Pay providers in advance • Five steps internally, two at comptrollers • EFT in account 3-5 business days

20. Financial Reports • Due after 8 months and year end • March 31 • September 30 • Must include actual expense • May request budget revision to move funds among lines • Cost reconciliation at year end

21. Cost Reconciliation • If funds unexpended at year end, reduce next year’s payment by that amount • Funds come back to state proportional to percentage of funding • If DCF funds 80% of program, each dollar is split 80/20 • Will allow use of funds for non-budgeted items such as repairs or maintenance

22. Budget Revisions • Can makes changes in salaries by 10% or $3500, whichever is greater • Can changes other expenses by up to $5000 • Requests discussed with program lead • Generally don’t allow moving funds from program to administrative • Will allow movement across programs within same account

23. What’s New • Examining provider costs and comparing public versus private • Outcomes • Standardization across state human service agencies • Budgeting • Reporting

24. Commission on Non-Profit Health and Human Services • Created by CGA in 2010 to analyze the funding provided to non-profit providers of health and human services under purchase of service contracts • Comparison of the costs of services provided by a state agency with the costs of services provided by a private provider • Cost increases for private providers' health and human services programs from 2000 to 2009, inclusive • Projected costs for private providers through December 31, 2014

25. Commission on Non-Profit Health and Human Services • a projection of cost savings that may be achieved by serving individuals who are recipients of benefits under health and human services programs in their communities rather than in institutions. • sources of revenue for health and human services programs. • preliminary report of findings and recommendations by January 1, 2011 and a final report by April 1, 2011. 

26. Increased Accountability • Legislature adopted Results–based accountability in 2005 • Passed legislation requiring contract outcomes in 2009 • Outcomes to be included in provider perfromance evaluation

27. Results-Based Accountability • What did we do • Numbers served, amount of service delivered • How well did we do it • Customer satisfaction, standards met • Is anyone better off • Reduction in problem prevalence, e.g. better school attendance, rate of drug relapse, improved parenting skill

28. Outcomes in DCF Contracts • 1 = No outcomes 17 $ 9,551,198 • 2 = Process Outcomes 16 $ 18,350,972 • 3 = Client outcomes only or both process and client outcomes 51 $ 217,697,789 Total 84 $ 245,599,959

29. State of CT Contracting Websites • State of Connecticut Procurement Standards http://www.ct.gov/opm/lib/opm/finance/psa/psa_pos_procurementstandards_021709_update_082709.pdf • Department of Children and Families Procurement Policy http://www.ct.gov/dcf/cwp/view.asp?a=2639&Q=400002 • Cost Standards http://www.ct.gov/opm/lib/opm/Finance/pos_standards/POSCostStandards090106.doc • Standard POS contract http://www.ct.gov/opm/lib/opm/finance/pos_project/standardcontract2009.doc • DCF Contract Documents, including budget and financial reporting forms and directions http://www.ct.gov/dcf/cwp/view.asp?a=2555&q=314408 • Commission on Non-Profit Health and Human Services http://www.ct.gov/opm/cwp/view.asp?a=3961&q=465440