S 1359 Session 110 (1993-1994)
S 1359 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.
04/14/94 Senate Introduced and read first time SJ-11
04/14/94 Senate Referred to Committee on Education SJ-11
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.
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. (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 per mile, cost per
hour, cost per transported pupil, and cost per 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' shall mean 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 shall 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, 1992;
(b) the labor contract expiration date in effect as of January
1, 1992, 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, 1992.
(B) Make or buy analysis shall 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 shall 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 thereafter shall be 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 shall not be 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 shall be included in any request for proposal for
school bus service and any 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 any 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 any 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 optionally be made
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 shall be reviewed, and that any cost
submittal by private company determined to be not 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/or as; 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) Any 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, 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 any 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 shall be in conformance with Section 59-67-830(G) of this act.
(D) No change in contract payment rate shall 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 any 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 any service on an interim basis in the event of an
emergency that does not permit sufficient time for make or buy
analysis. Any service operated under an interim contract shall be
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 any other 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, within two years of the
effective date of this act, adopt 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 shall include 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 with respect to the development of the
uniform costing procedures. The department shall consult with the
uniform costing procedures advisory committee with respect to:
(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 shall include a thorough
review of alternatives available for efficient development,
management, and operations for such facilities. The planning process
shall include 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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