Briefly, a Work Center must do the following to obtain a State contract:
When a Work Center satisfies these requirements, then:
If a State agency is dissatisfied with the performance of a work center, the State agency, first, must attempt to negotiate an adjustment and, second, advise the State Use Board of the situation. Then, the State Use Board, if it decides that the performance is unsatisfactory, may suspend the Work Center’s eligibility to participate in the State Use Program. Such action effectively would cancel the Work Center’s contract with the State.
In the information above, “a State agency” refers to either the State agency with whom a Work Center contracts or to the State Bureau of Procurement when the Bureau contracts on behalf of all State agencies. In the latter situation, all State agencies are obligated to use the State contract with the Work Center.
Set-Asides: Shortly after the legislature re-structured the State Use Program in 1989, the State Use Board established an administrative procedure for Work Center set-asides. Granted on a first come basis, a set-aside is an exclusive 90 working day period given to a Work Center to research and develop a plan to provide a product or service to the State. The Director of the State Use Program may approve the initial set-aside and one extension of an additional 90 working days, when the Work Center reports progress in its planning. The Board must approve any additional set-aside extension. Thus, a set-aside is an administrative means to eliminate duplicate work among multiple Work Centers interested in providing the same product or service to the State.
State Contracts: S.16.752, Wis. Stat., “Procurement from work centers for severely handicapped individuals,” establishes the policies through which State of Wisconsin agencies contract with Work Centers.
First, the statute defines a work center as:
16.572(1)(e): “a charitable organization or nonprofit institution which is licensed under s.104.07 and incorporated in this state … which is operated for the purpose of carrying out a program of rehabilitation for severely handicapped individuals and for providing the individuals with remunerative employment or other occupational rehabilitating activity of an educational or therapeutic nature, and which is engaged in the production of materials, supplies, or equipment or performance of contractual services in connection with which not less than 75% of the total hours of direct labor are performed by severely handicapped individuals.”
Second, the statue defines direct labor as:
16.752(1)(c): “all labor or work involved in producing or supplying materials, supplies or equipment or performing contractual services including preparation, processing, and packing, but excluding supervision, administration, inspection and shipping.”
Shipping here means use of a common carrier to deliver the product. Preparation of a product for shipping is included in packing. Having individuals with severe disabilities perform supervision, administration, inspection and shipping is admirable, but their work is not counted in computing the 75% direct labor hours.
Third, the statue describes the Work Center’s responsibilities as:
While the State Use Board has required access to medical information of a Work Center’s client-workers under items b and g above, the Board has not permitted public release of such information with the client-workers’ names.
Fourth, the statute describes State agencies’ responsibilities as:
The statute does not require the State agency to solicit bids or for the Work Center to submit a bid. Rather, the Work Center submits its price which is accepted or not accepted depending on the State agency’s fair market price information. If the Work Center’s price exceeds fair market price, the Work Center may re-figure its pricing and re-submit its price to the State agency. If an agency solicits bids to establish fair market pricing, then the Work Center, if not the low bidder, is permitted to match the low bid.
More often now, a State agency and a Work Center sign a memorandum of agreement or a contract to identify terms and conditions, specifications, invoicing and payment procedures, and performance requirements for delivery of the product or service. A State agency may issue a purchase order annually to encumber funds or on an as needed basis.
The Board interprets this section to mean that a State agency may not terminate a contract without approval of the Board. Precedence exists for this interpretation.
Fifth, the statute also specifies conditions for establishing prices:
While the Board permits the Work Center to include reasonable overhead costs in its price, the Board does not permit a Work Center to include profit or reserve.
Sixth, the statue identifies the State Use Board responsibilities pertaining to contracting as:
For further information, call 608-266-5462 or write to: State Use Program,
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