4 Colo. Code Regs. § 801-1 Chapter 10
Current through Register Vol. 47, No. 9, May 10, 2024
Chapter 10 - Personal Services AgreementsAuthority for rules promulgated in this chapter is found in §§ 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.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; and5. 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.37 CR 22, November 25, 2014, effective 1/1/201537 CR 24, December 25, 2014, effective 1/14/201540 CR 02, January 25, 2017, effective 2/14/201740 CR 23, December 10, 2017, effective 1/1/201840 CR 24, December 25, 2017, effective 1/14/201842 CR 19, October 10, 2019, effective 11/1/201943 CR 05, March 10, 2020, effective 4/1/202043 CR 13, July 10, 2020, effective 8/1/202043 CR 24, December 25, 2020, effective 2/1/202144 CR 05, March 10, 2021, effective 4/1/202144 CR 07, April 10, 2021, effective 5/1/202144 CR 10, May 25, 2021, effective 7/1/202144 CR 12, June 25, 2021, effective 9/1/202145 CR 11, June 10, 2022, effective 7/1/202245 CR 14, July 25, 2022, effective 9/1/202246 CR 08, April 25, 2023, effective 7/1/2023