BILL ANALYSIS Ó
COMMITTEE ON EDUCATION
Senator Carol Liu, Chair
2015 - 2016 Regular
Bill No: SB 669
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|Author: |Pan |
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|Version: |April 14, 2015 Hearing |
| |Date: April 22, 2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Kathleen Chavira |
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Subject: Civil service: personal services contracts:
California State Universities
SUMMARY
This bill establishes standards for the use of personal services
contracts by the California State University (CSU).
BACKGROUND
Current law provides standards for the use of personal service
contracts by state agencies with specific criteria for
contracting outside state service. These criteria
include demonstration of cost savings, definition of costs, and
requirements that work not be contracted out solely on the basis
of lower pay rates or benefits, and justification of savings
based on the size and duration of the contract.
(Government Code § 19130)
Article 7 of the California Constitution establishes the State
Civil Service and establishes the State Personnel Board, a 5
member body appointed by the Governor and approved by the
Senate, to enforce and administer civil service statutes. The
Constitution establishes several exemptions from the civil
service, including officers and employees of the University of
California and the California State University.
ANALYSIS
This bill establishes nearly identical requirements and review
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processes for personal services contracting by the CSU as those
that exist for State agencies. It:
1. Specifies that use of personal services contracting to
achieve costs savings is permissible when the CSU clearly
demonstrates that the contract will result in overall cost
savings and:
A. Prescribes the specific costs to be
included/excluded in the calculation.
B. Prohibits approval solely on the basis
of savings from lower contractor pay rates or
benefits, and requires that wages be at the industry's
level and that they do not significantly undercut
university pay rates.
C. Displacement of university employees,
as specified, is not caused by the contract.
D. It does not affect nondiscrimination
efforts, savings are large enough to be maintained
during cost fluctuations, are clearly justified by
size and duration, contracts are publicly and
competitively bid, and various other requirements.
2. Restricts personal services contracting, unless the
following conditions are met:
A. The Legislature mandates or authorizes
work be performed by independent contractors, and the
contract is for a new university function.
B. Services are unavailable or unable to
be satisfactorily performed within the university or
by university employees.
C. Services are incidental to a purchase
or lease contract.
D. The legislative, administrative, or
legal goals/purposes cannot be accomplished through
the regular or ordinary hiring process.
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E. University employees cannot feasibly
supply the equipment, materials, facilities, or
support services provided by the contractor.
F. The contract is for the provision of
training courses for which qualified university
employees are not available.
G. The contract is for services of an
urgent, temporary, or occasional nature.
STAFF COMMENTS
1. Need for the bill. According to the author, the intent of
this bill is to provide the California State University
(CSU) employees the same contracting out protections that
apply to state workers.
2. Current CSU practice. According to the CSU, in 2012-13 it
had over 7,000 personal services contracts valued at a cost
of over $500 million for various services within the
University. These contracts are for services that include
animal boarding, agricultural chemicals, archaeologists,
portable toilet suppliers, demolition contractors,
stonemasons, furniture suppliers, fire protection
providers, pest and vermin control, hazardous waste
disposal providers, and more. The CSU contends that, per
the requirements of Higher Education Employer-Employee
Relations Act (HEERA), the University meets and confers
with unions and negotiations have resulted in provisions in
collective bargaining agreements that outline the
conditions and processes to be followed regarding
contracting out.
3. Collective Bargaining. Provisions regarding contracting out
are an element of both the California State University
Employees Union - CSUEU (Article 3) and State Employees
Trades Council - SETC (Article 4) collective bargaining
agreements. The CSUEU agreement authorizes contracting out
provided that 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
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reductions. The California State University (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. Prior to meeting, the CSU is required to provide
the California State University Employees Union (CSUEU) all
existing relevant information, including RFPs, copies of
bids received, and any cost analysis used to evaluate the
need for contracting out. The State Employees Trades
Council (SETC) agreement, prior to contracting out,
requires a campus to 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. Notification of the Chief
Campus Steward is required prior to the start of any such
contracted work.
Should the Legislature insert itself in a matter which it
appears is already being addressed through collective
bargaining?
4. Civil Service exemption. This bill is modeled on State
Civil Service Act language used to govern personal services
contracting within the state.
Provisions of the California Constitution specifically
exclude officers and employees of the CSU from state civil
service, and the Legislature has granted the CSU other
exemptions from Civil Service provisions, including:
A. Exclusion from Public Contract Code provisions
regarding the acquisition of goods and services
B. Authority to promulgate regulations without
having to utilize the procedures outlined in the
Administrative Procedures Act, thereby exempting CSU
from Office of Administrative Law review.
Do the CSU's current contracting out practices rise to a
level of concern that warrants the CSU being subject to
civil service-like provisions?
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1. Purview of the Trustees? The provisions of this bill are
substantively similar to the requirements outlined for
state agencies under the Civil Service Act. However,
unlike state agencies, statute extends the authority to
administer the CSU and to adopt rules and regulations
consistent with the laws of the state, to the CSU Trustees,
a body appointed by the Governor and confirmed by the
Senate.
If the Committee believes there is a need for greater clarity
around the use of personal services contracts at the CSU, staff
recommends the bill be amended to delete its current contents
and to amend Education Code section 89036, which outlines the
power of the Trustees to enter into agreements, to authorize the
Trustees to enter into personal services contracts and to
require the Trustees to establish standards and conditions for
their use.
2. Related and prior legislation.
SB 943 (Beall, 2014) was substantively similar to this bill. In
addition it assigned the State Personnel Board oversight of CSU
contracting practices. SB 943 was heard by this Committee on
April 30, 2014 and failed passage in the Committee by a vote of
2-2.
AB 2225 (Lowenthal, 2002) proposed similar personal services
contracting standards for the CSU. AB 2225 was heard by this
Committee in June 2002, and was held without recommendation.
SUPPORT
California Labor Federation
California State University Employees Union (CSUEU/SEIU)
Service Employees International Union (SEIU)
OPPOSITION
California State University
California State University East Bay
California State University Long Beach
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