Amended in Assembly March 15, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2183

Introduced by Assembly Member Gatto

February 18, 2016

An act to begin delete amend Section 89030 of end delete begin insert add Section 89036.5 to end insert the Education Code, relating to postsecondary education.

LEGISLATIVE COUNSEL’S DIGEST

AB 2183, as amended, Gatto. California State begin delete University. end delete begin insert University: personal service contracts. end insert

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Existing law, the State Civil Service Act, establishes standards for the use of personal services contracts by state agencies. The act provides that personal services contracting is permissible to achieve cost savings when certain conditions are met, including, but not limited to, that the contracting agency demonstrates that the proposed contract will result in actual overall cost savings to the state and that the contract will not cause the displacement of civil service employees. The act also authorizes state agencies to enter into personal services contracts for functions exempted from civil service. The California Constitution excludes the officers and employees of the California State University from the state civil service.

end insert begin insert

Existing law authorizes the trustees of the California State University to enter into agreements with any public or private agency, person, or institution for the furnishing of services, facilities, goods, supplies, or equipment, among others, and requires the trustees to prescribe policies and procedures for the acquisition of those services, facilities, materials, goods, supplies, or equipment.

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This bill would establish standards for the use of personal services contracts by the trustees of the California State University similar to those in the State Civil Service Act.

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Existing law establishes the California State University and its various campuses under the administration of the Trustees of the California State University. Existing law requires the trustees to adopt rules and regulations not inconsistent with the laws of this state for the governance of the trustees, their appointees and employees, and the California State University.

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This bill would make nonsubstantive changes to that provision.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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begin insert Section 89036.5 is added to the end insert begin insert Education Code end insert begin insert ,
to read: end insert

begin insert

begin insert 89036.5. end insert   

(a) The purpose of this section is to establish
standards for the use of personal services contracts.

(b) The trustees may enter into personal services contracts to
achieve cost savings when all the following conditions are met:

(1) The trustees clearly demonstrate that the proposed contract
will result in actual overall cost savings to the California State
University, consistent with the following:

(A) In comparing costs, the trustees shall include the university’s
additional cost of providing the same service as proposed by a
contractor. These additional costs shall include the salaries and
benefits of additional staff that would be needed and the cost of
additional space, equipment, and materials needed to perform the
function.

(B) In comparing costs, the trustees shall not include the
university’s indirect overhead costs unless these costs can be
attributed solely to the function in question and would not exist if
that function was not performed by university employees. “Indirect
overhead costs” means the pro rata share of existing administrative
salaries and benefits, rent, equipment costs, utilities, and materials.

(C) In comparing costs, the trustees shall include in the cost of
a contractor providing a service any continuing university costs
that would be directly associated with the contracted function.
These continuing costs shall include, but not be limited to, those
for inspection, supervision, and monitoring.

(2) Proposals to contract out work shall not be approved solely
on the basis that savings will result from lower contractor pay
rates or benefits. Proposals to contract out work shall be eligible
for approval if the contractor’s wages are at the industry’s level
and do not significantly undercut university pay rates.

(3) The contract does not cause the displacement of university
employees. The term “displacement” includes layoff, demotion,
involuntary transfer to a new class, involuntary transfer to a new
location requiring a change of residence, and time base reductions.
Displacement does not include changes in shifts or days off, nor
does it include reassignment to other positions within the same
class and general location.

(4) The contract does not adversely affect the university’s
nondiscrimination standards.

(5) The savings shall be large enough to ensure that they will
not be eliminated by private sector and university cost fluctuations
that could normally be expected during the contracting period.

(6) The amount of savings clearly justify the size and duration
of the contracting agreement.

(7) The contract is awarded through a publicized, competitive
bidding process.

(8) The contract includes specific provisions pertaining to the
qualifications of the staff that will perform the work under the
contract, as well as assurance that the contractor’s hiring practices
meet applicable nondiscrimination standards.

(9) The potential for future economic risk to the university from
potential contractor rate increases is minimal.

(10) The contract is with a firm. A “firm” means a corporation,
partnership, nonprofit organization, or sole proprietorship.

(11) The potential economic advantage of contracting is not
outweighed by the public’s interest in having a particular function
performed directly by university.

(c) The trustees may also enter into personal services contracts
when any of the following conditions can be met:

(1) The contract is for a new university function and the
Legislature has specifically mandated or authorized the
performance of the work by independent contractors.

(2) The services contracted are not available within the
university, cannot be performed satisfactorily by university
employees, or are of a highly specialized or technical nature that
the necessary expert knowledge, experience, and ability are not
available from the university’s employees.

(3) The services are incidental to a contract for the purchase
or lease of real or personal property. Contracts under this
criterion, known as “service agreements,” shall include, but not
be limited to, agreements to service or maintain office equipment
or computers that are leased or rented.

(4) The legislative, administrative, or legal goals and purposes
cannot be accomplished through the utilization of university
employees because of the need to protect against a conflict of
interest or to ensure independent and unbiased findings in cases
where there is a clear need for a different, outside perspective.
These contracts shall include, but not be limited to, obtaining
expert witnesses in litigation.

(5) Due to an emergency, a contract is necessary for the
immediate preservation of the public health, welfare, or safety.

(6) The contractor will provide equipment, materials, facilities,
or support services that could not feasibly be provided by the
university in the location where the services are to be performed.

(7) The contractor will conduct training courses for which
appropriately qualified university instructors are not available.
Permanent instructor positions in academies or similar settings
shall be filled through the process for hiring university employees.

(8) The services are of an urgent, temporary, or occasional
nature that the delay incumbent in their implementation through
the process for hiring university employees would frustrate their
very purpose.

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SECTION 1.  

Section 89030 of the Education Code is amended
to read:

89030.  

(a) The trustees shall adopt rules and regulations not
inconsistent with the laws of this state for the governance of all of
the following:

(1) The trustees.

(2) The appointees and employees of the trustees.

(3) The California State University.

(b) The adoption of these rules and regulations is not subject to
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division
3 of Title 2 of the Government Code.

(c) The rules and regulations shall be published for distribution
as soon as practicable after adoption.

(d) This section shall be liberally construed in order that the
purposes of the Donahoe Higher Education Act pursuant to Part
40 (commencing with Section 66000) of Division 5 may be
effectuated.

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