Amended in Assembly August 18, 2015

Amended in Assembly June 29, 2015

Amended in Senate June 1, 2015

Amended in Senate April 6, 2015

Senate Bill No. 376

Introduced by Senator Lara

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(Coauthor: Senator Galgiani)

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(Coauthors: Assembly Members Gonzalez and Thurmond)

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February 24, 2015

An act to amend Section 10507.7 of, and to add Section 10507.6 to, the Public Contract Code, relating to public contracts.

LEGISLATIVE COUNSEL’S DIGEST

SB 376, as amended, Lara. Public contracts: University of California.

Existing provisions of the California Constitution provide that the University of California constitutes a public trust and require the university to be administered by the Regents of the University of California (regents), a corporation in the form of a board, with full powers of organization and government, subject to legislative control only for specified purposes, including such competitive bidding procedures as may be applicable to the university by statute for the letting of construction contracts, sales of real property, and purchasing of materials, goods, and services. Existing law requires the regents, except as provided, to let all contracts involving an expenditure of $100,000 or more annually for goods and materials or services, excepting personal or professional services, to the lowest responsible bidder meeting certain specifications, or to reject all bids. Existing law, until January 1, 2018, also authorizes the bid evaluation and selection for these contracts to be determined by the best value.

This bill would require a bidder, to qualify as a lowest responsible bidder or best value awardee on contracts for specified services, to certify in writing to the University of California (UC) that the bid includes a total employee compensation package that is valued on a per-employee basis at a level sufficient that it does not materially undercut the average per-employee value of total compensation for UC employees who perform comparable work at the relevant campus, medical center, or laboratory at which the bidder proposes to perform the work. The bill would require the UC to include in its request for proposals a calculation of the average per-employee value of total compensation for UC employees who perform comparable work at the relevant location, as prescribed. begin delete The bill, with respect to contracts for services involving an expenditure of $100,000 or more, would not except personal services from the lowest responsible bidder requirement. end delete The bill would require contracts for services involving an expenditure of $100,000 or more annually to include any renewals or extensions of the contract that would result in an expenditure of $100,000 or more annually.

This bill would exclude specified employees and public works from these provisions, as provided.

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.  

The Legislature finds and declares the following:

(a) It is a matter of statewide concern that responsible
competitive bidding at the University of California not undercut
the wages and benefits provided by the University of California
for comparable work, given that a significant percentage of
University of California employees already are eligible for public
benefits and any material decrease in the compensation of
employees performing such work would result in materially
increased General Fund costs for the provision of benefits.

(b) It is a matter of statewide concern that the University of
California not repeat past instances in which public resources have
been squandered via contracting out to for-profit private contractors
that charge significant administrative overhead.

SEC. 2.  

Section 10507.6 is added to the Public Contract Code,
to read:

10507.6.  

(a) For the purposes of this article, to qualify as a
lowest responsible bidder or best value awardee on any contract
for building maintenance, cleaning, or custodial services, call
center services, clerical services, dining and food services,
gardening, grounds keeping and plant nursery services, laborer
services, mailroom services, parking, shuttle bus, truck driving,
or transportation services, security services, storekeeper services,
patient care technical employee services, patient billing services,
medical transcribing services, patient escort services, or nursing
assistant services, a bidder shall certify in writing to the University
of California that the bid includes a total employee compensation
package, including fringe benefits, that is valued on a per-employee
basis at a level sufficient that it does not materially undercut the
average per-employee value of total compensation, including fringe
benefits, for employees of the University of California who perform
comparable work at the relevant campus, medical center, or
laboratory at which the bidder proposes to perform the work.

(b) The University of California shall implement this section
by including in its request for proposals a calculation of the average
per-employee value of total compensation, including fringe
benefits, for employees of the University of California who perform
comparable work at the relevant campus, medical center, or
laboratory, and that calculation shall use all known cost escalators
to project the future rate of growth of average per-employee total
compensation costs.

begin delete

The

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begin insert (c) end insert begin insert   end insert begin insert The end insert requirements of this section shall not apply to employees
subject to Section 1191.5 of the Labor Code or Section 214(c) of
Title 29 of the United States Code. Any employees covered by
Section 1191.5 of the Labor Code or Section 214(c) of Title 29 of
the United States Code shall be omitted from all calculations and
certifications required by this begin delete article. end delete begin insert section. end insert

begin delete

(c)

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begin insert (d) end insert  This section does not apply to any work subject to Chapter
1 (commencing with Section 1720) of Part 7 of Division 2 of the
Labor Code.

SEC. 3.  

Section 10507.7 of the Public Contract Code is
amended to read:

10507.7.  

(a)  Except as provided for in this article, the Regents
of the University of California shall let all contracts involving an
expenditure of more than one hundred thousand dollars ($100,000)
annually for goods and materials to be sold to the University of
California to the lowest responsible bidder meeting specifications,
or else reject all bids. Contracts for services to be performed, other
than begin insert personal or end insert professional services, involving an expenditure
of one hundred thousand dollars ($100,000) or more annually shall
be made or entered into with the lowest responsible bidder meeting
specifications, or else all bids shall be rejected. If the regents deem
it to be for the best interest of the university, the begin delete regents, end delete begin insert regents
may, end insert on the refusal or failure of the successful bidder for materials,
goods, or services to execute a tendered contract, begin delete may end delete award it to
the second lowest responsible bidder meeting specifications. If the
second lowest responsible bidder fails or refuses to execute the
contract, the regents may likewise award it to the third lowest
responsible bidder meeting specifications.

(b) For the purposes of this section, contracts for services
involving an expenditure of one hundred thousand dollars
($100,000) or more annually shall include any renewal or extension
of an existing contract, if the renewal or extension involves an
expenditure of one hundred thousand dollars ($100,000) or more
annually.