BILL ANALYSIS �
AB 906
Page 1
( Without Reference to File )
CONCURRENCE IN SENATE AMENDMENTS
AB 906 (Pan)
As Amended September 11, 2013
Majority vote
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|ASSEMBLY: |49-27|(May 29, 2013) |SENATE: |22-12|(September 12, |
| | | | | |2013) |
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Original Committee Reference: P.E., R. & S.S.
SUMMARY : Prohibits a state agency from executing a personal
services contract, except in specified sudden and unexpected
stituations, until it has certified that all employee
organizations that perform the type of work being contracted out
have been notified. Specifically, this bill :
1)Adds a provision that exempts personal services contracts
deemed necessary due to a sudden and unexpected occurrence
that pose a clear and imminent danger, requiring immediate
action to prevent or mitigate the loss or impairment of life,
health, property, or essential public services, from the
notification requirement.
2)Requires, at a minimum, the notification to include a full
copy of the proposed contract. Permits the notifying agency
to redact specific confidential or proprietary information
from the notice.
3)Requires the Department of General Services (DGS) to establish
the certification of notification process.
4)Clarifies that the notification and certification of
notification requirements of this section do not change the
requirements for contracts regarding employment of outside
counsel by a state agency or require an additional
notification.
The Senate amendments :
1)Delete provisions that added limited liability company's to
the definition of a "firm" as an authorized counterparty to a
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state agency's personal services contract.
2)Delete provisions that prohibited 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.
3)Delete provisions that prohibited 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)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
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implementation under civil service would frustrate their
very purpose.
3)Requires a state agency proposing to enter into a personal
services contract with a private contractor to notify the SPB,
which contacts 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.
FISCAL EFFECT : According to the Senate Appropriations
Committee, the State Personnel Board indicates annual costs of
$359,568 for three staff attorney positions (General).
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
lower cost. They state privatization contracts are often
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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
FN:
0002804