The Legislature passed Substitute House Bill 1268, The Personnel System Reform Act, in 2002 (Chapter 354, Laws 2002). The Act has three principal components: civil service system restructuring, collective bargaining, and competitive contracting. The Act directs JLARC to conduct a performance audit of the implementation of competitive contracting. The audit focuses on three main questions. 1) Are the statutory processes for competitive contracting in place? The audit found that they are. 2) What are agency experiences with implementing competitive contracting? The audit found little competitive contracting taking place, and that the relationship between contracting and collective bargaining is a key issue. 3) Do other states and the federal government provide employees the opportunity to offer alternatives to contracting or submitting bids? There are some examples of states involving employees, but these examples differ from the "employee business units" specified in Washington State’s law.