BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
SB 335 (Yee) - Governor's Budget: report on state agency
contracts for services.
Amended: As Introduced Policy Vote: GO 9-2
Urgency: No Mandate: No
Hearing Date: May 23, 2013 Consultant: Mark McKenzie
SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
Bill Summary: SB 335 would require the Governor to submit an
annual report that includes specified information regarding
state agency contracts for services with a value of over $5,000,
upon implementation of the FI$Cal Project.
Fiscal Impact (as approved on May 23, 2013):
Unknown contract costs, estimated in the hundreds of
thousands, to build requirements into the FI$Cal Project to
ensure the system has capacity to report specified
information on contracting (General/Special Funds).
Likely minor costs to various state agencies to compile and
report specified information to the Governor's Office,
assuming the FI$Cal Project has the built in capacity to
report contracting information upon implementation
(General/Special Funds).
Unknown costs to the Department of Finance (DOF) to develop
and establish new accounting rules governing the reporting
of service contract information. (General)
One-time costs of approximately $50,000 to the Department
of General Services (DGS) to develop and publish revisions
to the State Contracting Manual (General).
Ongoing costs to DGS of $100,000 to $200,000 annually to
provide training and assistance to buyers and
budgeting/accounting personnel for state agencies (General).
Background: 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
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Governor's proposed budget must contain itemized statements for
recommended state expenditures and estimated state revenues.
Proposed Law: SB 335 would require the Governor to submit a
report to the Legislature with the Budget that contains the
following information on current and proposed contracts for
services exceeding $5,000, organized by agency or budget
category:
A description of the contract and services being
purchased.
The name of the agency contracting for services.
The effective date and expiration date of the contract.
Annual amounts paid under the contract, by funding
source, to the contractor in the current and past fiscal
years, as well as amounts proposed for payment to the
contractor in the Governor's Budget, and future fiscal
years.
The total projected cost of the contract, by funding
source, for all fiscal years during which the contract will
be in effect.
Whether the contract was sole source procurement.
The report would also provide the total cost of subcontracting
for services for each fund and agency or comparable budget
category, and all information must be made available to the
public on the state's website in a searchable and sortable
format.
Related Legislation: Numerous bills have been introduced over
the past 10 years that were intended to enhance reporting on
state contracting activities, none of which were ultimately
enacted. Of particular note are the following bills that were
substantially similar to this bill: SB 786 (Oropeza) 2007-08
Session; SB 1331 (Oropeza) 2007-08 Session; AB 983 (Ma) 2007-08
Session; AB 239 (Horton) 2005-06 Session; and SB 1638 (Romero)
2003-04 Session.
Staff Comments: The Department of General Services (DGS)
indicates that state agencies reported information to DGS in the
State Contract and Procurement Registration System (SCPRS) in
2011-12 regarding 10,329 service contracts valued at over
$5,000. This system does not capture any contracting
information from the state universities, the Lottery Commission,
the Public Employee Retirement System, and the State Teacher's
Retirement System. Contracting data that is reported to the
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SCPRS includes department names, contractor names, contract
amounts, and contract descriptions. Staff notes that
information on proposed contracts is not reported because the
data entry happens after contracts are awarded.
Staff notes that it would not be feasible to provide all of the
information specified in the bill, particularly with respect to
proposed contracts. For instance, identification of a
contractor and subcontractors, timelines for the contract,
funding sources for a project, and annual amounts paid would not
be known for proposed contracts included prior to the approval
of the Budget and the awarding of a contract. As such, any
reporting related to proposed contracts would be incomplete.
The Department of Finance (DOF) was unable to provide a fiscal
estimate for its costs to comply with SB 335, but state
departments will incur significant costs, likely in excess of
$500,000 annually in the aggregate, to compile and report the
required information to DOF. In addition, DOF would need to
develop and maintain a database to store information received
from departments, and these costs will likely exceed $500,000.
PROPOSED AUTHOR AMENDMENTS would delete the requirement that a
report on state contracting be included in the Governor's
Budget, and instead require the Governor to submit an annual
report on current and proposed contracts for services upon
implementation of the FI$Cal Project.
PROPOSED COMMITTEE AMENDMENTS would delete the requirement to
include information on proposed contracts for services in the
annual report.