BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 335|
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UNFINISHED BUSINESS
Bill No: SB 335
Author: Yee (D)
Amended: 9/6/13
Vote: 21
SENATE GOVERNMENTAL ORGANIZATION COMMITTEE : 9-2, 4/9/13
AYES: Wright, Calderon, Cannella, Correa, De León, Galgiani,
Hernandez, Lieu, Padilla
NOES: Nielsen, Berryhill
SENATE APPROPRIATIONS COMMITTEE : 5-2, 5/23/13
AYES: De León, Hill, Lara, Padilla, Steinberg
NOES: Walters, Gaines
SENATE FLOOR : 28-10, 5/29/13
AYES: Beall, Block, Calderon, Cannella, Corbett, Correa, De
León, DeSaulnier, Evans, Galgiani, Hancock, Hernandez, Hill,
Hueso, Jackson, Lara, Leno, Lieu, Liu, Padilla, Pavley, Price,
Roth, Steinberg, Torres, Wolk, Wright, Yee
NOES: Anderson, Berryhill, Emmerson, Fuller, Gaines, Huff,
Knight, Nielsen, Walters, Wyland
NO VOTE RECORDED: Monning, Vacancy
ASSEMBLY FLOOR : Not available
SUBJECT : Expenditures: services contracts
SOURCE : Author
DIGEST : This bill requires, upon full implementation of the
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Financial Information System for California (FISCal) Project for
state departments and agencies that are utilizing the full
functionality of the FISCal system, specified information
regarding contracts for services in the amount of $5,001 or more
to be made available to the public on the FISCal Project
Internet Web site in a format that allows for searching and
sorting by specified categories.
Assembly Amendments add a requirement for the Governor to submit
to the Legislature an annual report on contracts for services of
over $5,001, delete the requirement for a searchable and
sortable report on the FISCal Project Internet Website, and make
clarifying an conforming changes to the requirements of the
reports.
ANALYSIS : FISCal, the State's effort to modernize the State's
accounting and budgeting practices and install modern automation
tools is well underway. This bill intends to set reporting
requirements upon the new system that are consistent with prior
legislative intent around the goals of the project to provide
accessible information on State expenditures. In creating the
FISCal project, the Legislature set broad goals and priorities
for the information contained in the new system.
Currently, the State operates the State Contracting and
Procurement Reporting System (SCPRS), which provides information
on State contracts. This data cannot be easily analyzed or
sorted, which makes it difficult to analyze and search. The
data is also hard to aggregate because a single vendor name may
be coded inconsistently by different account clerks. This
limitation has been recognized during Assembly budget oversight
hearings in the recent past, when information regarding State
contract expenditures were scrutinized.
The FISCal system is intended to solve these problems with its
improvements to procurement. The system has already developed a
single chart of accounts, which will be rolled out across 140
departments and a centralized vendor management file that will
improve the standardization of the data. The system is designed
to produce reports that have sortable functionality similar to
the requirements of this bill. When the system is fully
operational in 2016, the type of information required in this
bill will be available within the FISCal system.
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Not all State agencies will use the contract procurement
components of FISCal and thus the data requested in this bill
will not be provided for those departments. In particular,
data for Lottery, Corrections, DMV, Caltrans, and Water
Resources will not have contract data available in FISCal.
However, these departments would technically "use the FISCal
system" for other functionality, like budgeting.
Currently the $616.8 million FISCal project is on schedule and
has met its significant project milestones. The project has
implemented its "Pre-Wave" activities to develop the templates
and architecture of the system and then will begin rolling out
the project through four "Waves" of departments over the next
three years.
This bill stipulates that contract information for all contracts
in departments that use FISCal must be searchable and sortable
and contain the name of the contractor, a description of
services, the total projected costs of the contract, the amount
paid to the contractor in the current and prior years, the
effective date of the contract, and the procurement method.
Comments
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.
The author's office notes that the State Contracting and
Procurement and Registration System (SCPRS) already collects
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contract information, as the Governor pointed out in his veto
message of AB 172 (Eng, 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 this bill remedies the
current information gap by requiring a service contract
expenditure report, as outlined above.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Unknown contract costs, estimated in the hundreds of
thousands, to build requirements into the FISCal 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 FISCal 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).
SUPPORT : (Verified 9/10/13)
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AFSCME
ARGUMENTS IN SUPPORT : The proponent stresses 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. They argue that this bill
simply requires the Administration to provide relevant and
usable information on spending decisions involving services
contracts.
Further, they 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 and Engineering contracts (cost $2.4
billion); 2,345 Information Technology (IT) contracts (cost $4.1
billion); and 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. They 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 this bill
is absolutely essential.
MW:ej:n 9/10/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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