SB 469 — AN ACT IMPLEMENTING THE RECOMMENDATIONS OF THE STATE CONTRACTING STANDARDS BOARD.

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2649OFA 8Fiscal ofNote 8State Impact:

Agency Affected Fund-Effect FY 27 $ FY 28 $ Department of Administrative GF - Cost 424,075 224,075 Services State Comptroller - Fringe GF - Cost 66,075 66,075 Benefits1 Various State Agencies GF - Cost See Below See Below State Contracting Standards GF - Potential Minimal Minimal Board Cost State Contracting Standards GF - See Below See Below See Below Board Note:

GF=General Fund Municipal Impact:

None Explanation The billmakes a variety ofchanges to state contracting law, including adjusting business case requirements and expanding disqualification for contractors and subcontractors.

This results in a cost of $424,075 to the Department of Administrative Services (DAS), with an associated annual fringe cost of $66,075, in FY 27 and an annual cost of $224,075 to DAS beginning in FY 28.

The bill also results in potential costs for various state agencies and a minimal potential cost to the State Contracting Standards Board (SCSB) beginning in FY 27.

Section 1 prohibits the Governor from reducing SCSB allotments, which precludes any General Fund savings that would have resulted The fringe benefit costs for most state employees are budgeted centrally in accounts administered by the Comptroller.

The estimated active employee fringe benefit cost associated with most personnel changes is 40.71% of payroll in FY 26.

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574 from the existing process.

Section 2 establishes a minimum staffing threshold, resulting in no fiscal impact.

There is no fiscal impact because SCSB currently exceeds the staffing threshold set by the bill.

Section 4 makes a variety of changes to the existing business case requirements under the privatization law, to include:

(1) quality of services under privatization;

(2) a risk assessment including service continuity and accountability;

(3) a transition plan;

(4) an impact analysis of the privatization on protected classes and historical inequalities;

and (5) an analysis of qualitative impact on the state workforce.

This results in costs for various state agencies beginning in FY 27, to the extent that additional staff time and resources are required to meet the bill's requirements.

It is anticipated that many of these additional responsibilities will impact the Department ofAdministrative Services (DAS)and will result in a cost of $424,075 in FY 27 and $224,075 annually thereafter.

The costs include:

(1) a one-time cost of $200,000 in FY 27 to update systems and documentation to accommodate adjustments to procurement processes across state agencies;

(2) $158,000 in salary and $66,075 in fringe annually beginning in FY 27 to hire two new employees within DAS.

Section 6 expands the reasons that SCSB can disqualify a contractor or subcontractor to include entities that are substantially the same entity, resulting in a potential minimal cost to SCSB beginning in FY 27.

Theremaybeaminimalcostifadditionalstafftimeisrequiredtohandle the additional disqualifications that may result from this section.

The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.

2SCSB currently has seven positions, and the bill requires five.

3The SCSB Disqualification Subcommittee did not hold a meeting in 2025.

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574 OLR Bill Analysis sSB 469 AN ACT IMPLEMENTING THE RECOMMENDATIONS OF THE STATE CONTRACTING STANDARDS BOARD.

SUMMARY This bill makes several changes related to the State Contracting Standards Board’s (SCSB) powers and duties and state contracting processes generally (see BACKGROUND).

It sets requirements for the SCSB’s appropriations estimates, allotments, and staffing minimums.

It requires agency procurement officers to give a notice of certain rights to various entities involved in the contracting process.

The bill changes proposed privatization business case requirements, including requiring additional information and analyses.

It also requires the Department of Administrative Services (DAS) to document any competitive bidding waivers and post them on the State Contracting Portal.

Lastly, the bill expands contracting disqualifications to include contractors that are substantially the same entity as a disqualified contractor and identifies the evidence needed to determine if a contractor is substantially the same entity.

It requires state contracting agencies to make a reasonable inquiry into whether a proposed contractor is substantially the same entity as a disqualified contractor, and if so, prohibits the agencies from awarding a contract to that proposed contractor.

EFFECTIVE DATE:

July 1, 2026 § 1 — APPROPRIATIONS ESTIMATES AND ALLOTMENTS The bill requires the SCSB executive director’s recommended appropriationsfor theboard,which are submittedto theOffice ofPolicy and Management (OPM) secretary, to be estimates of expenditure requirements.

It requires any recommended adjustments and revisions sSB469 / File No.

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574 to the estimates to be the ones the executive director gives OPM.

The bill also prohibits the governor from reducing the SCSB’s allotment requisitions or allotments in force.

§ 2 — SCSB STAFFING MINIMUMS The bill requires the SCSB to employ at least five full-time employees and allows it to employ more as needed.

Current law allows the board to hire employees as necessary to carry out its duties.

By law, the board may also contract with consultants and other professionals as needed.

§ 3 — NOTICE OF RIGHTS REQUIREMENTS The bill requires each contracting agency’s procurement officer to include in any invitation to bid, proposal request, or other solicitation for goods and services issued on or after July 1, 2026, a notice of the rights of prospective bidders, proposers, or contractors to contest the contract solicitation or award.

Similarly, the bill requires the procurementofficertoadvisecontractors,beforeenteringintoacontract on or after July 1, 2026, and the unsuccessful bidders, proposers, or respondents, of these rights.

§ 4 — BUSINESS CASE REQUIREMENTS FOR PRIVATIZATION CONTRACTS The law generally requires state contracting agencies to develop a business case, consisting of multiple analyses, for a service it seeks to privatize.

The billchangessome oftherequiredelementsofthe business case and adds new ones.

Among other things, current law requires the business case to include:

1.

a description and analysis of the state contracting agency’s current performance of the service, 2.

the goals to be achieved through the proposed privatization contract and the rationale for those goals, 3.

a description of the available options to achieve those goals, and sSB469 / File No.

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574 4.

the advantages and disadvantages of each option.

The bill instead requires the business case to include:

1.

an analysis of the quality of services under privatization;

2.

a risk assessment, including service continuity and accountability;

3.

a transition plan, including layoffs, transfers, reassignments, and retraining;

4.

an analysis of the impact on protected classes of workers and whether privatization will impact historical inequities;

and 5.

an analysis of the qualitative impact on the existing state workforce.

§ 5 — WAIVER OF BIDDING REQUIREMENTS By law, the SCSB, in consultation with the DAS commissioner, may waive the competitive bidding or negotiation requirement for a minor, nonrecurring,oremergencypurchaseof$10,000orless.Thebillrequires DAS to document any waiver in writing and post it on the State Contracting Portal within five days after granting the waiver.

§ 6 — EXPANDING DISQUALIFICATION GROUNDS Bylaw,theSCSB,actingthroughasubcommittee,maydisqualifyany contractor, bidder, or proposer for up to five years from bidding, applying, or participating as a contractor or subcontractor under contracts with the state.

The SCSB may disqualify contractors and subcontractors for many reasons, including for a history of failure to perform or unsatisfactory performance on public contracts, willful violation of a statutory or regulatory provision applicable to the contract, various types of criminal convictions, and a disqualification by another state for cause (CGS § 4e-34).

Contracting Prohibition With “Substantially the Same Entity” Under the bill, before awarding a contract, a state contracting agency sSB469 / File No.

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574 must determine if a bidder or proposer is (1) disqualified or (2) a successor contractor that is “substantially the same entity” (see below) as a disqualified contractor.

The bill requires the state contracting agency to make a reasonable inquiry into changes in identity, ownership, or structure, including bankruptcy or re-formation following a conviction that is grounds for disqualification.

If a state contracting agency identifies possible continuity with a disqualified contractor, it must refer the matter to the SCSB before awarding the contract.

When a state contracting agency issues or evaluates a solicitation, the bill requires it to treat a disqualified contractor, and any successor entity that has substantially the same controlling ownership or operations, as disqualified for the full disqualification period, regardless of whether the contractor has reorganized, relocated, re-formed, or filed bankruptcy.

The bill also prohibits state contracting agencies from awarding a contract to a contractor or successor contractor who is determined to be substantially the same entity as the disqualified contractor during the disqualification period.

Evading Disqualification The bill prohibits contractors from avoiding or diminishing the disqualification’s effect by altering the legal identity or structure of their business.

This may include changing the name, trade name, doing- business-as designation, ownership, corporate form, taxpayer identification number, or other identifying information, including through bankruptcy reorganization, or by forming, re-forming, or reorganizing a business entity after a disqualifying conviction.

The bill authorizes the SCSB to initiate proceedings if it has reason to believe that a contractor, principal, or affiliated entity has attempted to evade disqualification through restructuring, asset transfer, bankruptcy, rebranding, reorganization, or another act that obscures or misrepresents identity or continuity.

Substantially the Same Entity sSB469 / File No.

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574 Under the bill, a business is “substantially the same entity” if, despite a change in name, structure, or form, it is substantially the same as and shares meaningful continuity with a disqualified contractor, including continuity after a bankruptcy or a disqualifying conviction.

Under the bill, the following is evidence of an entity being substantially the same entity:

1.

continuity of ownership, beneficial interest, controlling individuals, officers, directors, partners, managers, key personnel responsible for contract performance or oversight, operations, assets, inventory, equipment, business purpose, service lines, contracts, clients, customers, or workforce;

2.

use of the same or substantially similar facilities, addresses, phone numbers, web sites, email domains, or taxpayer identification numbers;

3.

transfer or assignment of assets, contracts, or operations to a related or affiliated entity during the disqualification period;

and 4.

formation or re-formation of an entity by a principal, owner, or controlling individual after a conviction that is grounds for disqualification.

If two or more factors are present, the bill creates a rebuttable presumption that the entity is substantially the same entity as the disqualified contractor.

BACKGROUND SCSB Duties, Responsibilities, and Membership The SCSB is an executive branch agency within the Office of Governmental Accountability with various responsibilities associated with state contracting processes, including (1) helping state agencies comply with the contracting procurement statutes and regulations, (2) reviewing and certifying whether a state contracting agency’s procurement processes comply with statutes and regulations, and (3) sSB469 / File No.

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574 disqualifying contractors for up to five years for offenses detailed in statute.

COMMITTEE ACTION Government Administration and Elections Committee Joint Favorable Substitute Yea 19 Nay 0 (03/20/2026) sSB469 / File No.

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