S 118 Session 111 (1995-1996)
S 0118 General Bill, By M.T. Rose
A BILL TO AMEND CHAPTER 67 OF TITLE 59, CODE OF LAWS OF SOUTH CAROLINA, 1976,
RELATING TO TRANSPORTATION OF PUPILS, BY ADDING ARTICLE 7, THE PUPIL
TRANSPORTATION COST EFFECTIVENESS ACT, SO AS TO REDUCE SCHOOL BUS EXPENDITURES
THROUGH THE USE OF COMPETITIVE CONTRACTS WITH PRIVATE COMPANIES SPECIALIZING
IN SCHOOL PUPIL TRANSPORTATION AND TO PROVIDE FOR THE MANNER IN WHICH AND
CONDITIONS UNDER WHICH SUCH TRANSPORTATION SERVICES ARE PROVIDED; AND TO
REPEAL SECTION 59-67-460 OF THE 1976 CODE RELATING TO CONTRACTS FOR SCHOOL
TRANSPORTATION SERVICES WITH PRIVATE INDIVIDUALS OR CONTRACTORS.
10/03/94 Senate Prefiled
10/03/94 Senate Referred to Committee on Education
01/10/95 Senate Introduced and read first time SJ-45
01/10/95 Senate Referred to Committee on Education SJ-45
A BILL
TO AMEND CHAPTER 67 OF TITLE 59, CODE OF LAWS OF
SOUTH CAROLINA, 1976, RELATING TO TRANSPORTATION
OF PUPILS, BY ADDING ARTICLE 7, THE PUPIL
TRANSPORTATION COST EFFECTIVENESS ACT, SO AS TO
REDUCE SCHOOL BUS EXPENDITURES THROUGH THE USE
OF COMPETITIVE CONTRACTS WITH PRIVATE
COMPANIES SPECIALIZING IN SCHOOL PUPIL
TRANSPORTATION AND TO PROVIDE FOR THE MANNER
IN WHICH AND CONDITIONS UNDER WHICH SUCH
TRANSPORTATION SERVICES ARE PROVIDED; AND TO
REPEAL SECTION 59-67-460 OF THE 1976 CODE RELATING
TO CONTRACTS FOR SCHOOL TRANSPORTATION
SERVICES WITH PRIVATE INDIVIDUALS OR
CONTRACTORS.
Whereas, school pupil transportation services are provided for the
fundamental purpose of transporting pupils to school by reason of
distance, physical handicap, or hazardous conditions; and
Whereas, it is in the public interest for school pupil transportation
services to be provided subject to high safety and quality standards;
and
Whereas, it is in the interests of the taxpayers that school pupil
transportation services be provided at the lowest possible cost
consistent with high safety and quality standards; and
Whereas, private companies are provided school pupil transportation
services cost effectively under competitive contracts; and
Whereas, decisions on whether school pupil transportation services
should be operated by a school district itself or by a private
company should be made on economic considerations rather than on
institutional considerations; and
Whereas, school districts should routinely examine all available
options for improving the cost efficiency of school pupil
transportation services.
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. Chapter 67, Title 59 of the 1976 Code is amended
by adding:
"Article 7
The Pupil Transportation
Cost Effectiveness Act
Section 59-67-800. As used in this article:
(A) `Make or buy analysis' means a periodic process in which a
school district arranges for the most cost-efficient provision of the
school bus service that it administers. Make or buy analysis
includes:
(1) issuance of a request for proposals for school bus service;
(2) qualification of private companies for eligibility to
provide school bus service;
(3) evaluation of proposals received in response to the request
for proposals; and
(4) award of a contract for the services described in the
request for proposal to either the school district transportation
division or a private company.
(B) `School district transportation division' means the school
pupil transportation department of the school district issuing the
request for proposals.
(C) `Qualified and responsive proposer' means a private
company or school district transportation division that meets the
qualifications set by the school district and has submitted a proposal
that demonstrates sufficient capability and understanding to provide
the school bus service according to school district service
specifications.
(D) `Proposer' means either a private company or the school
district transportation division.
(E) `Contractor' means a private company with which the school
district has executed a contract for school bus service.
(F) `Unit cost' means any reasonable indicator of cost used by a
school district in requesting and evaluating proposals as a part of
make or buy analysis, including, but not limited to, cost for each
mile, cost for each hour, cost for each transported pupil, and cost
for each school bus.
(G) `Fully allocated cost' means the cost of school bus service
provided by a school district transportation division, including all
direct, indirect, and allocated costs, and all attributable school
district administrative costs.
(H) `Attributable fully allocated cost' means the fully allocated
cost of school bus service provided by the school district
transportation division, minus the cost of any function not
considered for procurement in the make or buy analysis.
(I) `Department' means State Department of Education.
Section 59-67-810. (A) Each school district shall complete the
applicable make or buy analysis requirements above by a deadline
determined as follows:
(1) Within two years of the effective date of this act, with the
exception that the deadline must be extended to the expiration date
of the labor contract under which the corresponding school bus
service is operated if:
(a) the labor contract was executed before January 1, 1995;
(b) the labor contract expiration date in effect as of January
1, 1995, is more than two years after the effective date of this act;
and
(c) the labor is not extended beyond the expiration date
that was in effect on January 1, 1995.
(B) Make or buy analysis must be repeated for applicable school
bus services at least once each five years.
(C) In the event of a contract award to a contractor, all school
district owned buses assigned to the corresponding service must be
sold within eighteen months, or leased to the contractor for use in
the school bus service.
(D) Contractors shall reasonably consider displaced school
district employees for employment.
(E) School bus services operated by private companies under
contract on the effective date of this act or after are subject to make
or buy analysis within five years.
Section 59-67-820. (A) Each school district shall develop
reasonable qualifications with respect to experience, safety records,
and financial responsibility by which proposers can be eligible to
provide school bus services pursuant to this act. Such standards are
not designed to restrict the number of eligible participants in make
or buy analysis.
(B) Proposers must comply with applicable federal and state
school bus laws and regulations to be eligible to provide school bus
services pursuant to this act.
(C) Each school district shall prepare reasonable service
specifications which must be included in a request for proposal for
school bus service and a contract for school bus service. The
service specifications shall describe minimum standards with respect
to, but not limited to:
(1) passenger comfort, safety, and vehicle maintenance
standards;
(2) qualification, training requirements, and safety records for
school bus drivers;
(3) school bus safety programs and records;
(4) requirements for insurance protecting the school district
from liability for the acts, negligence, or omission or private
companies, their agents, and their employees;
(5) reliability and on-time performance;
(6) school bus vehicles;
(7) maintenance and preservation of school buses or other
assets owned by the school district and leased to contractors; and
(8) remedies with respect for unsatisfactory performance and
contract termination provisions.
(D) A school district may revise its qualification standards and
specifications as warranted by the public interest.
(E) No school district may establish a requirement relating to
the wages, benefits, or union organization of contractor employees.
All contractors shall comply with and give adequate certification of
compliance with all applicable federal and labor laws.
Section 59-67-830. (A) Each school district shall maintain a list
of interested companies and advertise for additions to the list at
least annually in accordance with its procurement policy.
(B) Each school district shall seek the widest reasonable
distribution of each request for proposals, and at a minimum shall
send each request for proposals to each company on the list of
interested companies and to a private company requesting the
request for proposals.
(C) A school district may require private companies to submit
qualification information either reasonably in advance of proposal
submittal or as a part of the proposal.
(D) Each request for proposals shall specify the school bus
services sought by the school district, qualifications, service
specifications, and any other information necessary to a complete
understanding of the school bus service being requested and the
proposed terms and conditions.
(E) Each request for proposals shall specify the district owned
school buses and capital facilities that will or may be made
optionally available under lease for use in the specified services.
(F) Each school district shall require that private company costs
be proposed in such a format that only the costs of qualified and
responsive private companies are reviewed, and that any cost
submittal by private company determined not to be qualified and
responsive be returned unopened to the private company.
(G) Each school district shall require that costs be proposed as:
(1) fixed costs based upon unit costs for each year covered by
the proposal, including option years; and
(2) fixed costs based upon unit costs for the first year with
subsequent year unit costs adjusted based upon the change in
appropriate and broadly accepted indicators of the change in prices,
such as the Consumer Price Index.
(H) The school district shall ensure that adequate time is
provided for private companies to prepare proposals in response to
any request for proposals.
(I) A private company may participate in make or buy analysis.
(J) Each school district shall ensure that disadvantaged business
enterprises, as defined in Part 23 of Title 49 of the Code of Federal
Regulations, as amended, or in other applicable provisions of
federal law or regulations, have the greatest possible opportunity to
respond.
Section 59-67-840. (A) With respect to each request for
proposals, the school district shall award a contract to the qualified
proposer whose responsive proposal offers the lowest public cost.
(B) The contract term and renewal option terms added together
shall not exceed five years for a school bus service subjected to
make or buy analysis.
(C) Payments for school bus service shall not exceed the unit
cost rates contained in the proposal that was the basis for contract
award and must be in conformance with Section 59-67-830(G).
(D) No change in contract payment rate must be made except as
specified in the contract, in accordance with the unit costs in the
proposal of the organization awarded the contract.
(E) No private company may be awarded a contract or contracts
covering more than fifty percent of the school bus service
administered by a school district with a school transportation system
requiring more than three hundred twenty-eight school buses.
(F) A school district may execute contracts with private
companies to operate a service on an interim basis in the event of
an emergency that does not permit sufficient time for make or buy
analysis. A service operated under an interim contract is subject to
make or buy analysis at the earliest reasonable opportunity.
Section 59-67-850. (A) The school district transportation
division shall submit a sealed proposal and be awarded a contract
subject to the following conditions:
(1) that the school district transportation division shall submit
a sealed proposal before the deadline specified in the request for
proposals;
(2) that the school district transportation division proposal not
be altered after that deadline;
(3) that the school district transportation division proposal be
opened and made public at such deadline and be fully disclosed to
any interested party;
(4) that the school district transportation division unit cost
proposal be not less that the attributable fully allocated costs and
attributable fully allocated costs be listed and described and that the
school district transportation division unit cost proposal be
consistent with currently adopted budgets and financial plans; and
(5) that the school district transportation division be bound by
the same terms, conditions, service specifications, and other
requirements as would have applied to a private company awarded
contract under the request for proposal.
(B) Each school district shall take reasonable and necessary
steps to ensure an objective and fair evaluation process including,
but not limited to:
(a) prohibition of participation by personnel or departments
involved in preparing the school district transport unit proposal;
(b) prohibition of participation by any personnel employed
within or directly managing the school district transportation
division;
(c) each school district awarding a contract to the school
district transportation division shall annually examine the school
district transportation division costs to determine conformity with
the costs which were the basis of any contract award; and
(d) if the school district transportation division costs are
determined to be greater than proposed, the school district shall
cancel the contract with the school district transportation division
and commence make or buy analysis for the service at the earliest
reasonable opportunity.
Section 59-67-860. (A) Notwithstanding another provision of
law, no state financial expenditure or reimbursements for school
pupil transportation shall result in a preference for operation of
school bus service by school district transportation divisions over
operation of school bus service by private companies.
(B) Notwithstanding any other provision of law, no state policy
or regulation relating to school pupil transportation shall result in a
preference for operation of school bus service by school district
transportation divisions over operation of school bus service by
private companies.
Section 59-67-870. (A) The department shall adopt, within two
years of the effective date of this act, uniform costing procedures
for the determination of the fully allocated costs and attributable
fully allocated costs of school pupil transportation services.
(B) The uniform costing procedures shall include at least the
following:
(1) required procedures for determining fully allocated costs;
(2) required procedures for determining attributable fully
allocated costs;
(3) required procedures for reconciling and describing the
differences between fully allocated costs and attributable fully
allocated costs;
(4) sample forms for cost proposal formats; and
(5) recommended procedures for analyzing longer term
opportunity costs.
(C) The department shall appoint a uniform costing procedures
advisory committee to provide assistance in the development of
uniform costing procedures. The uniform costing procedures
advisory committee includes representatives of school districts,
private school bus companies, state fiscal officers, trade
organizations of school districts, and trade associations of private
school bus companies.
(D) The department shall contract with a qualified accounting
firm to provide professional advice on the development of the
uniform costing procedures. The department shall consult with the
uniform costing procedures advisory committee on:
(1) the development of the requirements and scope of work
for the accounting firm;
(2) selection of the accounting firm; and
(3) review of accounting firm products.
(E) Upon adoption of the uniform costing procedures, each
school district shall develop all school district transportation
division cost proposals considered in make or buy analysis in
conformity with the required procedures contained in the uniform
costing procedures.
Section 59-67-880. The planning of all school bus maintenance
facilities, operations facilities, and garages includes a thorough
review of alternatives available for efficient development,
management, and operations for the facilities. The planning process
includes consultation with private school transportation companies.
Section 59-67-890. No school district shall make or be bound by
any contract, agreement, or assurance entered into subsequent to the
enactment of this act that restricts its ability to comply with this act
in any respect."
SECTION 2. Section 59-67-460 of the 1976 Code is repealed.
SECTION 3. This act takes effect upon approval by the
Governor.
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