BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 906|
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THIRD READING
Bill No: AB 906
Author: Pan (D)
Amended: 9/3/13 in Senate
Vote: 21
SENATE PUBLIC EMPLOYMENT & RETIREMENT COMM. : 3-1, 8/19/13
AYES: Beall, Block, Yee
NOES: Walters
NO VOTE RECORDED: Gaines
SENATE GOVERNMENTAL ORGANIZATION COMMITTEE : 7-0, 8/20/13
AYES: Wright, Cannella, De León, Galgiani, Hernandez, Lieu,
Padilla
NO VOTE RECORDED: Berryhill, Calderon, Correa, Vacancy
SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/30/13
AYES: De León, Hill, Lara, Padilla, Steinberg
NOES: Walters, Gaines
ASSEMBLY FLOOR : 49-27, 5/29/13 - See last page for vote
SUBJECT : Personal services contracts: independent
contractors
SOURCE : Author
DIGEST : This bill authorizes state agencies to use personal
services contracts when the services are of irregular,
unpredictable, or occasional duration and are necessary to carry
out instructional activities related to Peace Officer Standards
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and Training (POST). This bill limits the term of certain
personal services contracts to two years, with exceptions, and
specifies that the provisions applicable to personal services
contracts do not apply to personal services contracts for
architectural or engineering services, as defined. This bill
prohibits a contracting agency from executing certain proposed
personal services contracts until the State Personnel Board
(SPB) has contacted all organizations that represent state
employees who perform the type of work to be contracted.
ANALYSIS :
Existing law:
1. Establishes in the California Constitution a system of civil
service employment for state government. The civil service
includes every officer and employee of the state except as
otherwise provided in the Constitution.
2. Restricts, but does not prohibit, private contracting by
public agencies. Public agencies are authorized to engage in
private contracting in various instances, including:
A. When the "nature of the services" is such that the
services cannot be adequately rendered by an existing
agency of the public entity.
B. If the state seeks to contract for private assistance
to perform "new functions" not previously undertaken by
the state or covered by an existing department.
C. When the state, under specified conditions contracts
with private contractors to achieve cost savings.
D. When the nature of the work is such that the
Government Code standards for emergency appointments
apply.
E. When the services are of such urgent, temporary, or
occasional nature that the delay incumbent in their
implementation under civil service would frustrate their
very purpose.
3. Requires a state agency proposing to enter into a personal
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services contract with a private contractor to notify the
SPB, which shall contact employee organizations and allow a
reasonable opportunity for comment on the proposed contract.
4. Authorizes an employee organization, within 10 days of
receiving notice of a proposed contract, to request that SPB
review the contract for compliance with the statutory
standards.
5. Authorizes public agencies to contract out for architectural
and engineering services on public works projects.
6. Requires state agency personal service contracts to be with a
"firm" defined as a corporation, partnership, nonprofit
organization, or sole proprietorship, but which does not
include limited liability companies (LLCs).
This bill:
1. Adds LLCs to the definition of a "firm," thereby authorizing
LLCs to be authorized contracting parties to state personal
services contracts.
2. Creates a specific category of permissible personal service
contracts for services of an irregular, unpredictable, or
occasional duration that are necessary to carry out
instructional training by the Commission on POST.
3. Prohibits a personal services contract, when the nature of
the work is such that the Government Code standards for
emergency appointments apply or the services are of such an
urgent, temporary, or occasional nature that the delay in
their implementation would frustrate their very purpose, from
having a term in excess of two years.
4. Exempts from this two-year limitation, the following personal
services contracts:
A. Those developed pursuant to rehabilitation programs
as specified;
B. Those developed by habilitation programs in
accordance with the Welfare and Institutions Code, as
defined;
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C. Those developed by a program vendored or contracted
through a regional center or the Department of
Developmental Services pursuant to the Lanterman
Developmental Disabilities Services Act, as specified;
and
D. Those developed for architectural and engineering
services, as defined.
5. Prohibits any state agency from entering into a personal
service contract until the SPB has contacted all
organizations that represent state employees who perform the
type of work to be contracted.
Prior/Related Legislation
SB 335 (Yee, 2013-2014 Session) requires the Governor, upon
implementation of the Financial Information System for
California (FI$Cal), to submit an annual report to the
Legislature detailing specific information on current and
proposed contracts for services awarded by the state that are
valued at $5,000 or more.
SB 252 (Vargas, 2011-2012 Session) would have required the
Department of General Services to compile and publish reports
detailing all "privatization contracts" let by state agencies.
Furthermore, the bill specifies that all contracts and related
subcontracts are public documents subject California Public
Records Act.
AB 740 (Blumenfield, Chapter 685, Statutes of 2011) provides
that if the SPB disapproves a state agency's contract for
personal services, the agency shall immediately discontinue the
contract unless otherwise ordered by the SPB. It prohibits the
state agency from circumventing or disregarding the board's
action by entering into another contract for the same services,
for similar services, or to continue the services provided under
the disapproved contract.
AB 2494 (Blumenfield, 2009-2010 Session) would have specified
that if the SPB disapproves a state agency's contract for
personal services, the agency shall immediately discontinue the
contract unless otherwise ordered by the SPB. This bill was
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vetoed.
AB 756 (Eng, 2009-2010 Session) would have required every state
agency to provide a link to a centrally located and accessible
state-run Internet Web site that includes a listing of personal
services and consulting services contracts that it entered into
during the previous fiscal year. This bill was vetoed.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee, SPB indicates
annual costs of $359,568 for 3 staff attorney positions
(General).
SUPPORT : (Unable to verify at time of writing)
American Federation of State, County and Municipal Employees
California Attorneys, Administrative Law Judges & Hearing
Officers
in State Employment
California Correctional Peace Officers Association
Professional Engineers in California Government
Service Employees International Union, Local 1000
Union of American Physicians and Dentists
OPPOSITION : (Unable to verify at time of writing)
American Council of Engineering Companies
California Chamber of Commerce
ARGUMENTS IN SUPPORT : Supporters state that a broad variety
of studies and analyses have found that the state could save
hundreds of millions annually by utilizing civil service
employees instead of unnecessary and wasteful privatization
contracts. Proponents say that currently, there is very little
oversight of the magnitude of outsourcing performed by the
hundreds of state departments, boards and commissions, and that
these contracts are often unnecessary in any event.
Supporters also cite a 2009 study conducted by the SEUI Local
1000, which found that the state could save about $350 million
annually by utilizing state employees instead of private
contractors. Sponsors state that this bill will "provide the
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increased transparency and oversight needed for those savings to
be realized."
ASSEMBLY FLOOR : 49-27, 5/29/13
AYES: Alejo, Ammiano, Atkins, Bloom, Blumenfield, Bocanegra,
Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon,
Campos, Chau, Chesbro, Cooley, Daly, Dickinson, Eggman, Fong,
Frazier, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gray, Hall,
Roger Hernández, Jones-Sawyer, Lowenthal, Medina, Mitchell,
Mullin, Nazarian, Pan, Perea, V. Manuel Pérez, Quirk, Rendon,
Salas, Skinner, Stone, Ting, Weber, Wieckowski, Williams,
Yamada, John A. Pérez
NOES: Achadjian, Allen, Bigelow, Chávez, Conway, Dahle,
Donnelly, Fox, Beth Gaines, Gorell, Grove, Hagman, Harkey,
Jones, Levine, Logue, Maienschein, Mansoor, Melendez, Morrell,
Nestande, Olsen, Patterson, Quirk-Silva, Wagner, Waldron, Wilk
NO VOTE RECORDED: Holden, Linder, Muratsuchi, Vacancy
JL:d:n 9/3/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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