BILL ANALYSIS �
AB 906
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ASSEMBLY THIRD READING
AB 906 (Pan)
As Amended May 24, 2013
Majority vote
PUBLIC EMPLOYEES 5-2 APPROPRIATIONS 12-5
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|Ayes:|Bonta, Jones-Sawyer, |Ayes:|Gatto, Bocanegra, |
| |Mullin, Rendon, | |Bradford, |
| |Wieckowski | |Ian Calderon, Campos, |
| | | |Eggman, Gomez, Hall, |
| | | |Ammiano, Pan, Quirk, |
| | | |Weber |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Allen, Harkey |Nays:|Harkey, Bigelow, |
| | | |Donnelly, Linder, Wagner |
| | | | |
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SUMMARY : Imposes restrictions on specified personal service
contracts. Specifically, this bill :
1)Prohibits a state agency from entering into a contract for
work that meets the standards for emergency appointments or
for services that are of an urgent, temporary, or occasional
nature, as specified, from having a term exceeding two years,
subject to the right of the contracting agency to enter into a
single extension or renewal for a term of up to two years.
2)Prohibits a state agency from entering into a personal
services contract until the State Personnel Board has
contacted all of the organizations that represent state
employees who perform the type of work to be contracted.
EXISTING LAW :
1)Requires, based on provisions in the California Constitution,
that services provided by state agencies generally be
performed by state civil service employees.
2)Requires that proposals for contracting for cost saving
purposes must, at a minimum, meet the following criteria:
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a) Contracts must result in cost savings to the state.
b) Contractors' wages are at the industry's level and do
not significantly under-cut state pay rates.
c) Contracts cannot cause the displacement of civil service
employees.
d) Contracts cannot adversely affect the state's
affirmative action efforts.
e) Contract savings must be large enough to ensure that the
savings will not be eliminated by cost fluctuations that
could normally be expected during the contract period.
f) Contract savings clearly justify the size and duration
of the contract.
g) The contract is awarded through a publicized,
competitive bidding procedure.
h) The contract includes specific provisions pertaining to
the qualifications of the staff who will perform the work.
3)Additionally permits personal service contracting when any of
the following conditions can be met:
a) The functions to be performed are exempt from civil
service.
b) The contract is for a new state function and the
Legislature has specifically mandated or authorized that
the work be performed by an independent contractor.
c) The services contracted are not available within the
civil service.
d) The services are incidental to a contract for the
purchase or lease of real or personal property.
e) The contract is needed to protect against a conflict of
interest or to ensure independent and unbiased finding, as
specified.
f) The nature of the work is such that the standards for
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emergency appointments apply.
g) Private counsel is needed because a conflict of interest
on the part of the Attorney General's Office prevents it
from representing the state agency.
h) The contractor will provide equipment, materials,
facilities, or support services that cannot be provided by
the state in the location where the services are to be
performed.
i) The contractor will conduct training courses for which
appropriately qualified civil service instructors are not
available.
j) The services are of such an urgent, temporary, or
occasional nature, as specified.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, minor and absorbable costs for state government.
COMMENTS : According to the author, "Under existing law, state
agencies and departments are undermining the Legislature's
appropriation authority and the state civil service system by
abusing their ability to enter into personal services contracts.
The Department of General Services charged with reviewing and
approving state departments' requests to contract out personal
services. Unfortunately, DGS is failing to thoroughly review
request to ensure the request makes good business sense and the
cost is reasonable.
"According to the Assembly Budget Subcommittee 4 Agenda for its
February 21, 2012 hearing, the state currently has over 14,000
personal service contracts worth $11.8 billion. These
expenditures occur with no substantive legislative oversight."
The author concludes that this bill is a first step in ensuring
that state agencies and departments are working in conjunction
with the Legislature to build and maintain a strong civil
service system, as envisioned in the State Constitution.
Supporters, including the American Federation of State, County
and Municipal Employees (AFSCME), argue that California spends
millions of dollars paying for contracts and temporary employees
at state institutions when it could hire state employees at a
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lower cost. They state privatization contracts are often
unnecessary and violate state constitutional and statutory
prohibitions against overspending on service contracts.
According to supporters, a March 2009 study conducted by the
Service Employees International Union, Local 1000 found that the
state could save approximately $350 million annually by using
civil service employees instead of unnecessary and wasteful
privatization contracts.
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957
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