4 CCR 801-1 Chapter 10 - Personal Services Agreements
Authority for rules promulgated in this chapter is found in ยงยง 24-50-501 through 514 (Part 5), C.R.S.
10-1. The Colorado Constitution does not
specify the services that shall be performed by state employees and offers no
guidance concerning criteria or mechanisms for delineating, enlarging, or
reducing the state personnel system. The Director promulgates these rules to
effectuate the labor policy established by the General Assembly in statute,
balancing personal services contracting and the state personnel system.
Contracts for personal services that create an independent contractor
relationship are permissible if they satisfy the provisions of this chapter
regarding the business case, the impact on the state personnel system, and
contract process and requirements.
10-2.
Determination of the
Business Case. The threshold decision for entering into any
personal services contract requires the department head to determine the
business case based on accountability, cost, and quality.
A. Consideration of accountability includes:
1. whether there are adequate safeguards to
ensure that government authority is not improperly delegated;
2. the extent to which the function requires
direct daily control over individual workers in order to effectively establish
and implement state policy regarding public health, welfare, peace, and
safety;
3. the extent to which the
service can be provided through alternative means should the contractor fail to
perform; and,
4. the extent to
which the department has sufficient resources and expertise to monitor,
measure, and enforce performance of the contract.
B. Consideration of cost includes an analysis
in accordance with appropriate fiscal and procurement requirements, including
the following, if applicable:
1. the extent to
which the state will not realize the full value of, or recover the investment
in, capital improvements or equipment;
2. a comparison of state costs to the
contract price, including any fixed and variable costs solely attributable to
the particular function, as well as inspection, supervision, and
monitoring;
3. any price increases
over the term of the contract; and,
4. the difference between the state's and the
contractor's contributions to employee health insurance, to ensure that
projected state savings are not attributable to lower contractor costs of
health insurance.
C.
Consideration of quality includes timeliness, functionality, durability,
efficiency, contractor qualifications, flexibility, and any additional
investment that yields greater effectiveness over the term of the
contract.
10-3.
Evaluation of Potential Impact on Certified Employees.
In addition to the business case, the department head shall also evaluate the
potential impact on the state personnel system. The following provisions apply
depending on the nature of the contract and the statutory basis for approval.
A. For purposes of determining whether a
"service agreement" exists, in which the services are incidental to the
purchase or lease of real or personal property, the department head shall
consider whether the predominant purpose of the contract is the acquisition of
labor, skills, creativity, or judgment, as opposed to acquisition of
property.
B. If a contract involves
equipment, materials, facilities, or maintenance and operational support
services, the department head will consider the following:
1. whether the demand for services in a
particular geographic area is insufficient to justify investment in hiring
permanent employees and purchasing capital equipment; and,
2. whether it is impractical or cost
effective for departments in a particular geographic area to share the costs
and use permanent state employees to meet the total demand upon the state in
that geographic area.
C.
Services for persons in the physical or legal custody of the state are not
"purchased services".
D. A contract
for personal services does not implicate the state personnel system if the
department head determines that it is necessary to retain outside contractors
to meet a labor demand that is for: (7/1/07)
1. a temporary need for a specific task or
result for a finite period of time. Such a contract shall state an ending
date;
2. an occasional need that is
seasonal, irregular, or fluctuating in nature; or,
3. an urgent need for immediate action to
protect the health, welfare, or safety of people or property, or to meet an
externally imposed deadline beyond the department's control.
E. A department shall not use a
succession of alternating temporary employment and personal services contracts
in order to avoid either the timely creation or filling of permanent positions.
A person may work as a state temporary employee nine (9) months and
subsequently be retained as a contract worker by a different department.
(3/30/13)
F. The department head
shall approve each purchase order or contract for services acquired against an
authorized price agreement unless the Director has approved the agreement in
advance. A proposed acquisition shall comply with any conditions established by
the Director regarding the use of a price agreement.
10-4.
Contract Process and
Requirements. All personal services contracts will conform to the
following requirements regarding forms, reporting, and content.
A. As used in this chapter, contracts include
any amendments but do not include acquisitions where a commitment voucher
(e.g., state contract, purchase order) is not required by state fiscal rule, as
such minor acquisitions of services do not implicate the state personnel system
as a whole. Commitments to acquire services shall not be artificially divided
to avoid review. Departments shall establish methods for retrieval of payment
vouchers for personal services obtained within the scope of this
exemption.
B. All personal services
contracts shall be accompanied by supporting documents in the form prescribed
by the Director.
C. Repealed
(04/01/2020)
D. Consideration shall
be given to contractors providing a preference for hiring veterans of military
service in the following manner.
1. In all
solicitations for personal services, whether by competitive sealed bidding or
competitive sealed proposals, as defined by law, any tie between offerors shall
first be broken by awarding the contract to the offeror utilizing the greatest
quantitative or numerical preference for veterans in hiring offeror's
employees.
2. Solicitations for
personal services done by competitive sealed proposal may include as a scored
criterion the extent and quality of any preference for veterans of military
service given by offeror in the hiring of offeror's employees. The relative
weight assigned such criterion for veteran's preferences in personal services
contract solicitations, consistent with the preference given by the state
personnel system to veterans in the hiring of state employees, shall not exceed
five percent (5%).
E. In
addition to contract provisions required by statute, personal services
contracts shall contain:
1. provisions
addressing the consequences and potential mitigation of improper or failed
performance by the contractor;
2.
clearly defined measurements of performance outcomes;
3. sanctions for untimely or poor
performance;
4. the independent
contractor clause as required within contract special provisions of state
fiscal rules; and
5. provisions
concerning the orderly transition of functions between the department and the
contractor during implementation or following termination of the contract, if
applicable.
F. A personal
services contract shall not create an employment
relationship.
Notes
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