BILL ANALYSIS Ó
Bill No: SB
335
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2013-2014 Regular Session
Staff Analysis
SB 335 Author: Yee
As Introduced: February 19, 2013
Hearing Date: April 9, 2013
Consultant: Art Terzakis
SUBJECT
Governor's Budget: services contracts
DESCRIPTION
SB 335 requires the Governor to prepare and submit to the
Legislature, along with the Governor's Budget, a report
that contains certain information regarding current and
proposed contracts for services in the amount of $5,001 or
more. Specifically, this measure requires that the report:
1.Contain the name of the agency contracting for the
services, the name of the contractor and any
subcontractors, a description of the contract and
services being purchased, the effective date and
expiration date of the contract, and whether the contract
was a sole source procurement.
2.Include: (a) the annual amounts paid under the contract,
by funding source, to the contractor in past fiscal years
and in the current fiscal year; (b) the annual amount, by
funding source, proposed to be paid to the contractor
under the Governor's Budget; (c) the amount by funding
source, projected to be paid to the contractor in the
fiscal years covered by the contract beyond the fiscal
years during which the contract will be in effect; (d)
the total projected cost of the contract, by funding
source, for all fiscal years during which the contract
will be in effect; and (e) the total cost of contracting
SB 335 (Yee) continued
Page 2
for services for each fund and agency or comparable
budget category.
3.Be made available to the public by posting it on the
State's Internet website in a format that allows for
searching and sorting by the categories listed above.
EXISTING LAW
Existing law requires the Governor to submit to the
Legislature within the first 10 days of each calendar year,
a proposed budget for the next fiscal year as specified.
The Governor's proposed budget must contain itemized
statements for recommended state expenditures and estimated
state revenue income, as specified.
Existing law requires the Department of General Services
(DGS) to publish, or cause to be published, the California
State Contracts Register, describing contracts proposed by
the state, for construction or alteration of state-owned
real property.
BACKGROUND
Purpose of the bill: According to the author's office,
currently, lawmakers and the public cannot easily access
information to determine how much the state spends on
contracting out services or what services are received for
the money spent. The author's office contends that such
information is lumped together with "Other Operating
Expenses" in the annual budget report. Information on
state employees (position and salary), however, is clearly
outlined under "Salary and Wage Supplement." The
contracting of services is often promoted as a way to cut
costs, especially during fiscally strained times, yet
public officials and taxpayers rarely know how much is
being spent on contracts, and thus, unable to determine if
such contracted services are being provided at a lower cost
to the state.
The author's office states that when budget dollars remain
scarce and insufficient to meet California's pressing
needs, it becomes vital that information on all spending,
including spending on service contracts, be made
transparent.
SB 335 (Yee) continued
Page 3
The author's office notes that the State Contracting and
Procurement and Registration System (SCPRS) already
collects contract information, as the Governor pointed out
in his veto message of AB 172 (Eng) of 2011. However, the
author's office believes that the SCPRS suffers significant
shortcomings which make it inadequate to inform
decision-makers. Specific examples include: (1)
expenditure data cannot be computed by fiscal year; (2) the
names of agencies and contractor names are not recorded
uniformly throughout the database, making calculations of
contract spending by agency or vendor impossible; and, (3)
key data such as contact identification numbers are often
missing.
The author's office emphasizes that SB 335 would remedy the
current information gap by requiring a service contract
expenditure report, as outlined above, for every executive
budget proposal.
Arguments in Support: Proponents stress the importance of
gaining control over spending on service contracts,
temporary employees and consultants - such contracts to
outsource work totals in the billions of dollars.
Proponents argue that this measure simply requires the
Administration to provide relevant and usable information
on spending decisions involving services contracts.
Proponents claim that in 2009, the State of California had
13,600 personal service and consultant contracts in effect
that cost the state $34.7 billion ($28.7 million a day).
This breaks down to 748 Architectural & Engineering
contracts (cost $2.4 billion); 2,345 Information Technology
(IT) contracts (cost $4.1 billion); 10,507 non-IT contracts
(cost $28.2 billion). Proponents estimate that California
could save millions annually by utilizing state workers to
cut unnecessary and wasteful outsourcing. Proponents
believe the public has the right to hold state officials
responsible for how the state spends taxpayer dollars and
that access to the information outlined in SB 335 is
absolutely essential.
Comments: Over the past 10 years numerous identical and
similar bills have been introduced in the Legislature. The
fate of those bills is summarized below.
PRIOR/RELATED LEGISLATION
SB 335 (Yee) continued
Page 4
SB 252 (Vargas) 2011-12 Session. Among other things, would
have required the Department of General Services to compile
and publish reports detailing all privatization contracts
let by state agencies. (This measure was eventually gutted
to become a state employee collective bargaining bill and
died in the Assembly policy committee.)
AB 172 (Eng) 2011-12 Session. Would have required the
California Technology Agency (CTA), to create and maintain
the Reporting Transparency in Government Internet Web Site
listing details provided by state agencies on every audit
of their operations finalized from January 2009 through
December 2011. Also, would have required the posting of
detailed and specific information on contracts awarded by
the state on or after March 31, 2010, valued at $5,000 or
greater. (Vetoed - Governor's message stated there's no
need for a new law in light of the fact that information
regarding state contracts and audits can already be found
at specified state sites.)
AB 756 (Eng) 2009-10 Session. Would have required every
state agency to provide a link to a centrally located and
accessible state-run Internet website that includes a
listing of personal services and consulting services
contracts that it entered into during the fiscal year.
(Vetoed - Governor's message stated "this legislation would
be duplicative of current reporting practices and increases
workload and costs to departments at a time when the state
continues to experience a significant budget shortfall. My
Administration is currently implementing many of the
provisions of this legislation within the existing
appropriation of the Department of General Services to
increase transparency.")
SB 786 (Oropeza) 2007-08 Session. Would have required the
Governor to submit with the budget a report that contains
specified information regarding current and proposed
contracts for services in the amount of $5,001 or more.
(Held in Senate Appropriations)
SB 1331 (Oropeza) 2007-08 Session. Identical to SB 786
(Oropeza) of 2007. (Held in Senate Rules Committee)
SB 1494 (McClintock) 2007-08 Session. Would have required
each state department and agency to develop and operate a
SB 335 (Yee) continued
Page 5
Web site accessible by the public that includes specified
information relating to expenditures of state funds (in
excess of $1,000), defined to include, among other things,
grants, contracts, subcontracts, purchase orders, and tax
refunds, rebates, and credits. (Held in Senate
Appropriations)
AB 983 (Ma) 2007-08 Session . Would have required the
Governor to prepare and submit to the Legislature, along
with the Governor's Budget, a report containing specified
information regarding current and proposed contracts for
services in the amount of $5,001 or more. (Held in Senate
Appropriations)
AB 2603 (Eng) 2007-08 Session. Would have required each
state agency to prepare an annual report for the DOF
listing "information technology" personal services and
consulting services contracts, entered into by the agency
in the previous fiscal year. (Held in Senate
Appropriations)
AB 239 (J. Horton) 2005-06 Session. Would have required
the Governor to submit to the Legislature, along with the
state budget, information regarding current and proposed
service contracts. (Vetoed)
SB 1638 (Romero) 2003-04 Session . Would have required the
Governor to submit to the Legislature, along with the state
budget, information regarding current and proposed service
contracts. (Held in Senate Appropriations)
SUPPORT: As of April 5, 2013:
American Federation of State, County and Municipal
Employees (AFSCME)
OPPOSE: None on file as of April 5, 2013.
FISCAL COMMITTEE: Senate Appropriations Committee
**********
SB 335 (Yee) continued
Page 6