BILL NUMBER: AB 2183	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 31, 2016
	AMENDED IN ASSEMBLY  MARCH 15, 2016

INTRODUCED BY   Assembly Member Gatto

                        FEBRUARY 18, 2016

   An act to add Section 89036.5 to the Education Code, relating to
postsecondary education.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2183, as amended, Gatto. California State University: personal
 service  services  contracts.
   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.
   Existing law authorizes the trustees  
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.
   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.   Act for services that are currently or
customarily performed by employees of the university. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 89036.5 is added to the Education Code, to
read:
   89036.5.  (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:
 
   (b) If the trustees enter into a new contract, or renew or extend
an existing contract, for services that are currently or customarily
performed by the university's employees, all of the following
requirements shall apply: 
   (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  the  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.