BILL ANALYSIS Ó
AB 2183
Page 1
Date of Hearing: May 4, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2183 (Gatto) - As Amended March 15, 2016
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill establishes standards for the use of personal service
contracts by the California State University (CSU) substantially
similar to those currently applied to other state agencies.
Specifically, the bill:
AB 2183
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1)Requires and specifies 11 conditions that must be met in order
for any personal services contract to be permissible,
including:
a) Clear demonstration that the proposed contract will
result in actual overall savings to the state, considering
specific elements that can/cannot be included when
comparing contract and in-state costs.
b) Proposals to contract out shall not be approved solely
on the basis that savings will result from lower contractor
pay rates or benefits.
c) The contract does not cause the displacement of
university employees.
2)Permits personal services contracts when any of nine
conditions can be met, including: a) that the services are not
available within the university; b) cannot be performed
satisfactorily by university employees; c) are of an urgent,
temporary, or occasional nature such that delaying
implementation through the hiring of university employees
would frustrate their very purpose; d) or are of such a highly
technical nature that is not available from the pool of
university employees.
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FISCAL EFFECT:
1)CSU will have one-time costs of around $100,000 to establish
the new process, including establishing new policy followed by
training of procurement personnel throughout the system.
2)CSU estimates about 13,000 personal services contracts
systemwide for 2015-16, an average of 565 per campus. If
reviewing each contract for conformance with the bill's
provision required only one-half position per campus,
statewide costs would be $1.6 million annually. This bill
contains no enforcement provisions, which if eventually done
through regulations, could add additional costs.
[The provisions of this bill, as described in (1) and (2) in the
Summary above, mirror Government Code Sections 19130(a) and
19130(b) for state agencies. All agencies proposing to execute a
contract pursuant to 19130(a) must first notify the State
Personnel Board (SPB). The board indicates that, among all
agencies, only a handful of contracts (average of 35 annually
recently) are proposed annually pursuant to this provision.
Instead, almost all state agency personal service contracts are
allowable pursuant to one of the exceptions provided in
19130(b).]
COMMENTS:
1)Purpose. According to the author, the CSU is not subject to
some of the same standards of accountability that apply to
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other state agencies regarding personal service contracts.
The author contends that this has, "resulted in several debunk
contracts, including: a CSU that ended a three-year agreement
with its employees and entered into a five-year contract with
a private and external custodial firm, which resulted in
displacement of those other custodial employees." This measure
aligns the CSU's practice of contracting out with those
required by other state agencies pursuant to Government Code
Section 19130.
2)Current CSU Personal Services Contracting. CSU's collecting
bargaining agreement with the California State University
Employees Union (CSUEU) authorizes contracting out provided it
does not displace bargaining unit employees, and defines
displacement to include layoff, demotion, involuntary transfer
to a new classification, or to a new satellite campus
location, or a location requiring a change of residence, and
involuntary time base reductions. CSU is required to notify
the union when contracting out is to be on a long-term basis
and the union is authorized to request to meet and confer on
the impacts of long-term contracting out work.
Under CSU's agreement with the State Employees Trades Council
(SETC), prior to contracting out, a campus must consider the
availability of SETC employees to perform the work, whether
they have the special skills and licensure necessary, whether
the work can be completed within time constraints applicable
to the project, the availability of required materials and/or
equipment, and the cost involved in performing the work
in-house versus contracting out.
3)Opposition. CSU notes that it's employees are not part of the
civil service system, and argues that, with existing
contracting procedures in place, negotiated through collective
bargaining pursuant to the Higher Education Employer-Employee
Relations Act, this bill appears to be a solution in search of
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a problem.
4)Prior Legislation. SB 669 (Pan) of 2015, which was very
similar to this measure, never had a vote in the Senate
Education Committee.
AB 682 (Leno) of 2015, which placed similar contracting
requirements on the trial courts, was vetoed. The Governor, in
part, argued that the bill "?requires California's courts to
meet overly detailed and in some cases nearly impossible
requirements when entering into or renewing certain contracts.
Other provisions are unclear and will lead to confusion about
what services may or may not be subject to this measure.
"The courts, like many of our governmental agencies, are under
tremendous funding pressure and face the challenge of doing
their work at a lower cost. I am unwilling to restrict the
flexibility of our courts, as specified in this bill, as they
face these challenges."
SB 943 (Beall) of 2014, which failed in the Senate Education
Committee, was similar to this bill but also assigned the
State Personnel Board oversight of CSU contracting practices.
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AB 2225 (Lowenthal) of 2002, which was substantially similar
to SB 943, was held in the Senate Education Committee.
Analysis Prepared by:Chuck Nicol / APPR. / (916)
319-2081