BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 906 (Pan) - Personal Services Contracts
Amended: August 22, 2013 Policy Vote: PE&R 3-1, GO 7-0
Urgency: No Mandate: No
Hearing Date: August 26, 2013
Consultant: Maureen Ortiz
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 906 prohibits state agency personal services
contracts of an emergency, urgent, temporary, or occasional
nature from having a term greater than two years, and makes
several other changes relating to state personal services
contracts.
Fiscal Impact:
State Personnel Board indicates annual costs of $359,568
for 3 staff attorney positions (General)
Background: Existing law requires a state agency that proposes
to execute a personal services contract (PSC) under the "cost
savings" authorization in Government Code 19130(a), to notify
the State Personnel Board (SPB) of its intention. Upon
notification, SPB must immediately contact all organizations
that represent state employees who perform the type of work to
be contracted as well as anyone else who has filed a request to
be similarly noticed so that they may be given a reasonable
opportunity to comment on the proposed contract. Departments or
agencies submitting proposed contracts must retain all data and
information relevant to the contracts. Any employee
organization may request, within 10 days of notification, that
the State Personnel Board review any contract that is proposed
or executed under the cost savings provisions in statute.
In Professional Engineers in California Government v. Kempton
(2007) 40 Cal.4th 1016, the California Supreme Court held that
Proposition 35, passed by the electorate in 2000, authorizes
public agencies to contract out for architectural and
engineering services without legislative restrictions.
AB 906 (Pan)
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Proposed Law: AB 906 contains the following provisions:
a) Provides that any contract that is authorized on an
emergency basis, or is of an urgent, temporary or occasional
nature must be limited to a term of two years, but makes an
exception for personal services contracts developed pursuant to
specified rehabilitation programs and for contracts for
architectural and engineering services.
b) Adds limited liability companies among the entities eligible
to bid on a state contract award.
c) Adds a new provision to the list of eligible personal
services contract to include when the services are of irregular,
unpredictable or occasional duration and are necessary to carry
out certain instructional training by the Commission on Peace
Officer Standards and Training (POST).
d) Provides that no state agency shall execute any type of
proposed 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.
e) Requires the State Personnel Board to contract all
organizations that represent state employees who perform the
type of work under any type of proposed contract.
Staff Comments: The cost estimate from the State Personnel Board
is based on the requirement to contact employee organizations
for approximately 4,000 state contracts each year. This bill
will require SPB to notify impacted employee organizations of
all PSCs, not only cost savings PSCs. Based on the State
Contract and Procurement Registration System (SCPRS), state
agencies entered into approximately 4,000 PSCs in 2013.
Therefore, if this bill becomes law, SPB may reasonably expect
that it will be required to notify employee organizations of
4,000 PSCs annually.
In 2012, SPB sent notification of 21 contracts to employee
organizations. The drastic increase from 21 PSCs to 4,000 PSCs
requiring notification to employee organizations would
necessitate additional staff at the State Personnel Board. In
addition, the extension of the notice requirement to all PSCs
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may well increase the number of PSC challenges employee
organizations file with the SPB. As a consequence, SPB will
likely need additional staff to handle the increased workload.