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State/Broker RelationshipsState/Broker Relationships

Laura Peterson

State Risk ManagerAgency General Counsel

State of NebraskaDept. of Administrative Services

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OverviewOverview

State of Nebraska 2003 RFP for Broker and Risk Consultant Services

FlexibilityState ProcessCompensation IssuesState Bargaining PositionEffective Working Relationships

Bargain

PayWork

Process

Flexible

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Nebraska’s 2003 RFPNebraska’s 2003 RFPBroker and Risk Consultation Services

– Traditional broker activities plusActuarialSafetyClaims Review/AuditEngineeringOther

– Flexibility to add services and address emerging needs

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State ProcessState ProcessKnow Your State Service Contract Laws

– Competitive Bidding– Lowest Responsible and Responsive Bidder– Standard/Required Terms & Conditions

Define Deliverables/Expectations ClearlyHave Legal/Procurement Review

– Terms and Conditions– Bidding Procedure– Service Deliverables

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Nebraska Compensation IssuesNebraska Compensation IssuesNeb. Rev. Stat. 73-201 to 73-204:

“Fee-for-service contracts are the usual, customary, and accepted manner of contracting on behalf of the state.”

“Contingent fee means any fee, whether commission, percentage, brokerage, finder’s fee, or contingent fee or otherwise denominated, which is a percentage or portion of the amount or value recovered, obtained, or involved.”

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NE Compensation Issues NE Compensation Issues (continued)(continued)

“Any contingent fee contract of any kind whatsoever reasonably anticipated to result in the payment of a contingent fee or fees in excess of twenty-five thousand dollars per annum executed by the state or by any person on behalf of the state after September 9, 1995, is void unless executed by the Governor upon thirty days notice to the public at large.”

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State Bargaining PositionState Bargaining Position

States should bargain from a position of strength

States should determine ahead of time what is important and what is not – both to the State and the Broker

States should know what is and is not negotiable

Put everything in writing and sign it

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Working Together after SelectionWorking Together after Selection

Stay in frequent contactVerbal and written action plansDocument and address failuresDocument successHave some fun!