STATE USE LAW COMMISSION MEETING

June 16, 2015

MEETING MINUTES

MEMBERS PRESENT: Debbie Harrington (Chair), Doyle Dobbins (Co-Chair), Chuck Wagner, James “Ty” Case (Teleconference),Michele Mirabella, Dean Stotler (Teleconference),Mary Page Bailey (Counsel to the SULC), Daniel Madrid (Ex-Officio), Thomas Cook (Ex-Officio)

GUESTS: Paul Beane (DelARF), Devon Cook (Public), Elizabeth Harrington (Public), Amber Mangini (Administrative support)

Ms. Harrington requested a roll-call to determine who was in attendance via teleconference and in person. Once a quorum was determined, the meeting was called to order at 2:04 pm.

  1. APPROVAL OF MINUTES–Ms. Harrington asked the Commission to review the April 21stminutes for accuracy approval. Mr. Dobbins made a motion to approve the April minutes as written. Ms. Mirabella seconded the motion and the Commission was unanimously in favor- the motion carried.

Ms. Harrington then asked the Commission to review the May 27thmeeting minutes for accuracy and approval. Mr. Dobbins made a motion to accept the May minutes as written and Ms. Mirabella seconded the motion. The Commission was unanimously in favor and the May minutes were accepted as written, the motion carried.

  1. OLD BUSINESS
  1. JSC HEARING RECOMMENDATIONS–Mr. Stotler stated that a general concern of the Sunset Committee seemed to be the perception or the potential appearance of conflicts of interest. The construct of the council and its membership have been discussed as a way to repair the perception with regards to who would be eligible to participate, when they could participate, and what “benefit” they could obtain- which is what has created the appearance of potential conflict. His concern was that the Commission would need to eliminate or exclude from discussions the individuals who represent the entities that employ the people with disabilitiesand who can best provide the information to inform the Commission on what’s needed to successfully employ or transition these individuals into employment.

Mr. Stotler suggested that the council consider an alternate way to address the appearance of conflict of interest, which has presented itself as the ability without bid to establish a contract for the benefit of an organization. An alternate method would be to subject the Set-Aside contract to a competitive bidding process with a preference that would remove the decision from the council, therefore removing the potential to benefit by virtue of membership.

Ms. Harrington wanted to know who would approve this and what the approval process would be.

Mr. Stotler explained that generally (in other states) there is a competitive bid process whereby there is a point preference associated with a qualified Set-Aside provider. He said it would go through the competitive bid process and service would be considered by an evaluation group of users the same way a competitive contract is awarded. Afterward, the preference points would be applied to determine whether or not GSS would grant the final contract. The Commission would not award contracts; they would support the opportunities and inform the process but not be the “decider” of awards.

Mr. Cook stated that DelARF’s main concern was the impact it could have retroactively on existing contracts in such a way that the number of disabled people employed in the State Use program could be affected. He said that DelARF wouldn’t object to trying it out on a pilot basis to see how it played out. If a new contract opportunity arose that didn’t affect the existing number of employees, it could be used as a method of assuring the conflict of interest issue was addressed. Mr. Cook also said that fair market value would need to be well established to allow them to move forward successfully with the proposal. The Commission could evaluate the progress after a certain amount of time which would also give the Sunset Committee some assurance.

Mr. Stotler stated that the situation would address multiple areas of concern both on the vendor side and from the community. He said that because no new contracts have been initiated with any regularitythe only comparable example to this “pilot” idea would be the bidding of the new DMV location. The new DMV location was a competitive bid process that was well within the established percentage required. Mr. Stotler suggested that the percentage be tiered to address the legacy contracts, a higher percentage established set-Aside for the first period of award thatwould move down to the new standard over time. He recommended that if this were tried with existing awards (instead of a new award) for a determined period of time, that a greater percentage be allowed to see how the bidding process worked. In the absence of a new process moving forward, the issues such as conflict of interest, recusals, and the board composition concernswill remain until the JSC requires action.

Mr. Cook agreed with the perception issue and he noticed that it came up a lot in the talking points and on the draft recommendations. He stated that the JSC also requested an analysis of the current spend to see if there was any influence by having the current members’ organizations examined. Mr. Cooksaid that the JSC didn’t find anything of concern and there was no preponderance of awards given to KSI or Chimes. Mr. Cook expected a stronger position from the JSC during the recommendations; however they appeared to back off of the original discussion which left him unsure about the Committee’s intentions.

Mr. Stotler’s understanding was that DelARF requested the distribution of awards within the sub-recipient agencies with DelARF being the contract holder.This would allow DelARF to determine whether there was a disproportionate allowance/awarding to a singular entity rather than a competitive offering to others. He said that it wasn’t addressed that the SULC members (by virtue of their representation) have the ability to create business without the action of any other party- thus creating the appearance of conflict of interest. This was the portion of “conflict of interest” that the JSC was attempting to discuss and did address by compelling the SULC to do a competitive process in the selection of a CNA.

Mr. Dobbins stated that he could not recall there ever being an issue or opposition with the structure of the Commission or the way they have operated and dealt with conflict of interest. The Commission members have always recused themselves from any discussion involving their specific entities when appropriate. His opinion was that there would always be the appearance of conflict of interest on some level because Delaware is such a small place.The Community should focus on the great things that the Commission has done for Delawareans with disabilities.

Ms. Bailey pointed out that the SULC’s By-Laws, Regulations, or Statutes didn’t address the issue at all. She suggested that the Commission consider the Committee’s comments and put everything in writing. Mr. Madrid stated that the very first recommendation was that the issue should be addressed, and he agreed that conflict of interest should be addressed in writing and put into the SULC’s By-Laws and Regulations.

Mr. Dobbins agreed that conflict of interest should be addressed in writing. He was concerned that the SULC needed to keep their primary goals in focus and not take any action that could potentially weaken their ability to get their goals accomplished.

Mr. Madrid’s opinion was that if the SULC wanted to adopt a more competitive process, then they should first look at other states that have adopted that type of process to see the success rate. His concern was that the SULC would adopt a process that would ultimately move their mission backwards, therefore he wanted evidence that this type of process has shown to be successful in other states.

Mr. Cook stated that DelARF could collect data that would be useful to the Commission in evaluating Mr. Stotler’s proposal. He said that he had contacts through SUPRA as well as some preliminary information about a group of legacy contracts in Connecticutthat he could look into. After doing some research, Mr. Cook would report back to the Commission based on his contacts within SUPRA.

Mr. Stotler stated that GA, VA, MD, AND CT have all responded to a national survey put out by GSS as a result of this question. The SULC could look to these states to determine the successfulness of their programs.He said that if the SULC decided to adopt a new process, a discussion should be had in regard to changing the 10% preference threshold currently in place to a 15-20% threshold to address the legacy concerns. Ms. Mirabella stated that this would take the deciding power away from the Commission on Set-Aside contracts and therefore she was strongly against the idea.

She stated that the legacy contracts do need to be addressed because they have never had an increase and that is something that the SULC should take on. Her opinion was that the Commission should not adopt such a huge change for the sole reason that the legacy contracts needed an increase.

Mr. Stotler disagreed with the notion that the procurement process would result in the loss of the SULC’s decision power on contracts. He acknowledged that the conflict of interest concern required action from the council and he stated that the one process change would address several issues. When asked how the Commission would still have a voice in the decision making, he stated that the SULC would be able to set the percentage to ensure adequate opportunities for disabled individuals. He stated that if the Council decided against the action then a robust discussion needed to be had in regard to the CNA, all subcontractors of the CNA, and their participation on the council. For example if a janitorial Set-Aside needed to be voted on, then every member that represents the DelARF membership would be considered “conflicted out”.This would cause concern because the members who would be “conflicted-out” are the ones who best understand the employment needs of persons with disabilities specifically in that market sector. Mr. Stotler stated that no matter which way the Commission decided to go on the issue, the JSC made it clear that conflict of interest needed to be addressed.

Ms. Mirabella stated that the JSC wanted clarification of the process regarding conflict of interest in writing. She said that although the SULC has a process to avoid conflict of interest, the JSC wanted the process made clear in writing in the By-Laws and the Regulations.

Mr. Cook stated that after reviewing recommendation #3, he felt that the JSC wanted more than just clarification of the process in writing. His take on it was that they wanted the Commission to draft language to go into the law, which would avoid the perception of conflict of interest.

Ms. Harrington stated that her take on it was that the SULC has been very structured in regard to who can participate on the Commission. This has caused people who don’t meet all of the qualifications, but have worked in the program and been successful in the program to be left out. She believed that the main point of the JSC was that the SULC did not have anything in writing regarding conflict of interest and it needed to be addressed. Ms. Harrington also said that she believed Mr. Stotler’s proposal was a legitimate suggestion that should be considered, however she was concerned about the effect it would have on the Commission.

Mr. Cook recommended that the discussion about Mr. Stotler’s proposal be tabled until further research has been done and presented to the Commission. He suggested that the Commission begin the process to submit the Regulations and the By-Laws prior to the completion of the JSC’s work. This would allow the Commission to get these things in writing and get them off of the JSC’s agenda so that the remaining issues could be discussed.

Ms. Bailey stated that the January meeting with the JSC would be for the SULC to demonstrate how each recommendation was addressed. In the meantime, a package would need to be sent to them containing the adopted Regulations and By-Laws completed by the Commission.

Mr. Stotler specified the mechanics of his recommendation for the Commission. He stated that it would be treated as a competitive procurement with a preference associated to whatever value the Commission applied to the preference. Blind to the evaluators is the pricing component and the RFP scoring associated with the price. The person who evaluated Janitorial Services for the competitive market would evaluate Janitorial Services for the Set-Aside market as well. Theywould also associate the vendor’s responses and apply points based on the submitted proposals. The scoring would be aggregated to the evaluators bid tabulation scoring, and then the preference would be applied. This would all be performed by a procurement professional assigned to the contract to apply the preference and evaluate the price.

Ms. Mirabella asked if it would go to competitive bid again after 5 years like a regular contract and the awarded agency would possibly lose the contract when it came time to bid again.

Mr. Stotler replied that yes the contract would be subject to the competitive process again.

Mr. Dobbins felt as though this process could be done without the Commission, and in a way turn the Commission into “excess baggage”.

Mr. Stotler didn’t agree and stated that the Commission would determine the appropriateness of additional supports that would dictate the percentage of preference applied.

Doyle stated that those things could be done by CNAs with GSS as the authority over the CNA’S, which would render the Commission unnecessary.

Ms. Harrington stated that the Commission would re-address the topic after further data/research has been received and reviewed. She also asked for Mr. Stotler to put in writing all of the advantages and disadvantages of adopting the new process that he proposed.

Mr. Stotler sent out documents to the SULC members that showed the research of the agencies that have adopted sheltered workshops or similar programs within each state’s jurisdiction.

Ms. Harrington said that the topic would be further discussed at the next meeting after the members had a chance to review the information as well as any other data that is found. Ms. Harrington also stated that the official name of the Commission was changed to “The State Use Law Commission”, however if the members weren’t comfortable with the name it could be changed again.

Mr. Wagner stated that he wanted the Commission to have a name that was more consumer-friendly. He felt that the mission of the Commission should be reflected in the name to allow the community to understand and identify what the SULC was about. He said that he would bring some suggestions to the next meeting.

Mr. Cook was concerned that some of the recommended changes required changes in the law. He asked if there was any communication between the JSC and Ms. Harrington that related to whether the JSC would submit revisions to the law at the next session.

Ms. Bailey stated that the JSC made it clear that in January they expected a full package from the Commission that would contain the new By-Laws, Regulations, and a proposed Bill on the revisions of Chapter 96 all based on the recommendations of the JSC.

Ms. Harrington said that her understanding was that everything was due in January, and nothing different was communicated as of yet.

Ms. Bailey stated that she had started to add the recommended changes to the code and once finished, she would send out a copy of the code with a strikethrough and underline edit process to add the changes that were recommended. Once the language was determined, she would then re-format it to fit a Bill format. Ms. Bailey also said that she was working on a section that the JSC wanted about structure and appointments and she would send it to Ms. Mangini to circulate to the members as well.

In regard to recommendation #1 (use of a CNA), Ms. Harrington asked if the subcommittee discussed the topic of a CNA at their meeting. Ms. Bailey explained that procedurally the subcommittee did do what was requested of them, which was to draft so that it could go before the JSC. It then went before the full Commission and the full Commission needed to vote on whether it was something they wanted to move forward with.

Ms. Harrington stated that in regard to recommendation #1, the use of a CNA would be utilized and it would be done through an RFP process.

Mr. Cook stated that when the subcommittee revised the Regulations, they left language from the previous version that related to applications being made. He said that the selection process for an RFP should be different than the originally planned application so the language needed to be changed. He specified that the language was revised to reflect that multiple CNA’s could be considered, but the fact that the CRP’s also have the ability to contract directly with the state was not reflected in the recommendation.