Code of the District of Columbia

§ 2–352.05. Privatization contracts.

(a) A privatization contract shall meet the following requirements:

(1) Except as provided in subsection (d) of this section, a privatization contract shall not cause the displacement of District government employees including by layoff, demotion, involuntary transfer to a new class, involuntary transfer to a new location requiring a change of residence, or time base reductions. For the purposes of this paragraph, the term "displacement" does not include changes in shifts or days off, nor does it include reassignment to other positions within the same class and general location.

(2) The privatization contract shall provide the District with an economic advantage, as demonstrated by the determination and findings issued pursuant to subsection (b) of this section.

(3) The economic advantage of the privatization contract shall not be outweighed by the public's interest in having a particular function performed directly by District employees, as demonstrated in the determination and findings issued pursuant to subsection (b) of this section.

(4) The privatization contract shall be awarded through a publicized, competitive procurement process pursuant to subchapter IV of this chapter.

(5) The privatization contract shall include specific provisions establishing the minimum qualifications for the employees of the contractor who will perform the work under the contract and an affirmation by the contractor that the contractor's hiring practices meet applicable District standards.

(b) Before issuing a solicitation for a privatization contract, the Mayor, instrumentality, or independent agency shall:

(1) Issue a draft determination and findings demonstrating that the cost of having the contracted-for service provided by a contractor will be at least 5% less than if the service were to be provided by employees of the District or its instrumentality or independent agency. The draft determination and findings shall include, at a minimum, the following:

(A) The estimated cost of having a contractor provide the service contrasted with the costs that would be directly associated with having employees of the District or its instrumentality or independent agency continue performance;

(B) Personal services costs attributable to having a contractor provide the service contrasted with the personal services costs that would result from having employees of the District or its instrumentality or independent agency continue performance, including salary and fringe benefits;

(C) Non-personal services costs attributable to having a contractor provide the service contrasted with the non-personal services costs that would result from having employees of the District or its instrumentality or independent agency continue performance, including rent, equipment, and utilities;

(D) Any additional costs that would be built into a privatization contract, including expected costs related to the administration, oversight, and supervision by District government personnel of a privatization contract;

(E) A description of the expected impact of a privatization contract on the quality of goods or services provided to or on behalf of the District government;

(F) The number of employees of the District or its instrumentality or independent agency that are necessary to perform the service proposed to be the subject of a privatization contract; and

(G) The number of employees of the District or its instrumentality or independent agency that would be displaced by the contract within the meaning of subsection (a)(1) of this section;

(2) Request an analysis by the Chief Financial Officer of whether the costs in the draft determination and findings can be substantiated;

(3) Share the draft determination and findings with employees who could be displaced within the meaning of subsection (a)(1) of this section as a result of the privatization contract and any labor unions or groups representing those employees to solicit their comments; and

(4) Issue a final determination and findings that incorporate the full analysis by the Chief Financial Officer, and a summary of comments provided pursuant to paragraph (3) of this subsection. Each final determination and findings shall be made publicly available online before any solicitation for a privatization contract based on the final determination and findings is issued.

(c)(1) If the Mayor, instrumentality, or independent agency issues a solicitation for a privatization contract that would displace employees of the District or its instrumentality or independent agency, those employees or a person or entity representing those employees may submit a bid or proposal to perform the services as a private entity; provided, that the employees agree to resign their employment with the District or its instrumentality or independent agency upon selection as the awardee of the contract after final approval of the contract.

(2) The Mayor, instrumentality, or independent agency shall consider any employee bid or proposal submitted pursuant to paragraph (1) of this subsection on the same basis as any other bid or proposal.

(3) [Not funded].

(4) A solicitation for a privatization contract shall include information describing how displaced employees of the District or its instrumentality or independent agency may exercise their right to compete for the contract pursuant to this subsection.

(d) A privatization contract that causes employees of the District or its instrumentality or independent agency to be displaced within the meaning of subsection (a)(1) of this section may be awarded; provided, that:

(1) The contractor shall offer to each displaced employee a right of first refusal to employment by the contractor, in a comparable available position for which the employee is qualified, for at least a 6-month period during which the employee shall not be discharged by the contractor without cause;

(2) Any District employee who is displaced as a result of a privatization contract and is hired by the contractor who was awarded the contract, shall be entitled to the benefits provided by the Service Contract Act of 1965, approved October 22, 1965 (79 Stat. 1034; 41 U.S.C. § 6701 et seq.);

(3) If the employee's performance during the 6-month transitional employment period described in paragraph (1) of this subsection is satisfactory, the contractor shall offer the employee continued employment under terms and conditions established by the contractor; and

(4) The Mayor, instrumentality, or the independent agency head shall make efforts to assist employees of the District or its instrumentality or independent agency who would be affected by the privatization contract and to promote employment opportunities for District residents with the contractor. These efforts shall include:

(A) Consulting with union representatives and employees of the District or its instrumentality or independent agency who would be affected by the privatization contract;

(B) Providing prior notification of at least 30 days of any adverse impact of a privatization contract to employees of the District or its instrumentality or independent agency who would be affected by the contract, including notification to a labor organization certified as the exclusive representative of employees affected by the contract;

(C) Providing alternative employment in the District government to displaced employees if there are unfilled positions for which those employees are qualified; and

(D) Encouraging the contractor to offer employment to qualified District residents before offering employment to qualified nonresidents.

(e)(1) Any privatization contract shall incorporate specific performance standards and targets including for productivity and cost savings to be achieved under the contract.

(2) The contractor shall submit reports, as required by the contract, to the District government contracting officer and the Chief Financial Officer on the contractor's compliance with the specific performance criteria.

(3) The contract may be canceled without prejudice to the District if the contractor fails to comply with the performance criteria set out in the contract.

(f) An agency or instrumentality shall not attempt to circumvent the requirements of this section by eliminating the provision of services by its own employees before procuring substantially the same services from a person who is not employed by that agency or instrumentality.

(g)(1) Each year the District of Columbia Auditor shall review a selection of privatization contracts, which shall be chosen by the Auditor based on the dollar value and scope of the contracts, their potential impact on the health and safety of District residents, their potential impact on economic development and employment opportunities in the District, and other factors deemed appropriate by the Auditor.

(2) The Auditor shall issue an annual report to the Mayor and the Council on the contracts reviewed pursuant to paragraph (1) of this subsection, analyzing for each contract whether it is achieving:

(A) The minimum 5% cost-savings requirement set forth in subsection (b)(1) of this section; and

(B) The performance standards and targets incorporated into the contracts as required under subsection (e) of this section.

(3) The Auditor may report that the cost and performance data for the selected contracts are inconclusive, but if the District has failed to collect, maintain, or provide cost or performance data, the Auditor reasonably may conclude that the cost savings or performance standards and targets are not being met.

(4) If the Auditor finds in the report issued pursuant to paragraph (2) of this subsection that a privatization contract has not met the cost savings or performance standards and targets, the Mayor or instrumentality or independent agency head shall review the merits of canceling the privatization contract and performing the work with District employees and shall report to the Council on the results of the review.

(h) The requirements of this section shall not apply to:

(1) A contract for a new function for which the Council has specifically mandated or authorized the performance of the work by independent contractors;

(2) Services that cannot be performed satisfactorily by District government employees, or are of such a highly specialized or technical nature that the necessary expert knowledge, experience, and ability, are not available through District employees, as determined by the Mayor;

(3) Contracts for staff augmentation services to be provided pursuant to a contract with a term of less than one year that does not contain options to extend the performance period;

(4) Contracts for services that are incidental to a contract for the purchase or lease of real or personal property such as contracts to maintain office equipment or computers that are leased or rented;

(5) Contracts that are necessary to protect against a conflict of interest or to insure independent and unbiased findings in cases in which there is a clear need for an unbiased and objective outside perspective, as determined by the Mayor;

(6) Contracts entered into pursuant to § 2-352.01(c);

(7) Contracts that will provide equipment, materials, facilities, or support services that could not be provided feasibly by the District in the location where the services are to be performed, as determined by the Mayor;

(8) Contracts to provide training for which appropriately qualified District employees are not available, as determined by the Mayor; and

(9) Contracts for services that are of such an urgent, temporary, or occasional nature that the delay incumbent in their formation under this section would frustrate their very purpose, as determined by the Mayor.

(i) The CPO shall promulgate rules, pursuant to § 2-361.06, with detailed procedures to implement the provisions of this section.

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(Apr. 8, 2011, D.C. Law 18-371, § 205, 58 DCR 1185; Oct. 8, 2016, D.C. Law 21-158, § 3(e), 63 DCR 10752.)

Section References

This section is referenced in § 1-624.22, § 2-381.42, and § 44-1203.01.

Applicability

Section 7017 of Law 22-33 amended section 5 of D.C. Law 21-158, retaining the applicability restriction affecting this section, therefore the changes made to this section by D.C. Law 21-158 have not been implemented.

Applicability of D.C. Law 21-158: § 5 of D.C. Law 21-158 provided that the modification of section 205(c)(3) of this section by § 3(e) of D.C. Law 21-158 is subject to the inclusion of the law’s fiscal effect in an approved budget and financial plan. Therefore that amendment has not been implemented.

Emergency Legislation

For temporary (90 days) amendment of § 5 of D.C. Law 21-158, see § 7017 of Fiscal Year 2018 Budget Support Congressional Review Emergency Act of 2017 (D.C. Act 22-167, Oct. 24, 2017, 64 DCR 10802).

For temporary (90 days) amendment of § 5 of D.C. Law 21-158, see § 7017 of Fiscal Year 2018 Budget Support Emergency Act of 2017 (D.C. Act 22-104, July 20, 2017, 64 DCR 7032).

For temporary (90 days) amendment of this section, see § 3(e) of Procurement Integrity, Transparency, and Accountability Emergency Amendment Act of 2016 (D.C. Act 21-504, Oct. 13, 2016, 63 DCR 12942).