BILL ANALYSIS
AB 20
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Date of Hearing: March 17, 2009
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Mary Hayashi, Chair
AB 20 (Solorio) - As Amended: March 10, 2009
SUBJECT : University of California: contracts.
SUMMARY : Requests the University of California (UC) and
requires the Department of General Services (DGS) to establish
standard contract provisions for research contracts between UC
and the State of California (state). Specifically, this bill :
1)Codifies legislative findings that it is unnecessarily costly
and time consuming for UC and the state of California to
develop separate research contracts, and that it would be more
cost effective and efficient if the state and the UC
established "boilerplate" provisions that would apply to all
contracts between the two, allowing for variations only in
unusual situations.
2)Requests the UC Regents and requires DGS, acting for the
state, to establish standard provisions by July 1, 2010 for
contracts between UC and the state, including, but not limited
to, the following:
a) Liability;
b) Intellectual property;
c) The right to undertake additional research;
d) The right to publish;
e) Hiring and other personnel-related matters;
f) Invoicing;
g) Payments;
h) Dispute resolution;
i) Travel;
j) Termination; and,
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aa) Administrative overhead and indirect costs.
3)Authorizes DGS and UC, in consultation with state agencies and
departments that have contracts with UC, to determine those
types of contracts for which use of the model contract would
be inappropriate.
4)Requires that any and all agreed upon standard provisions be
used in contracts between UC and the state unless both
contracting parties mutually determine that a specified
standard contract provision is inappropriate for a specific
contract.
5)Requires DGS to seek the participation of state agencies and
departments that have contracts with UC, and permits the model
contract to be revised in a manner determined by UC and DGS in
consultation with state agencies and departments that have
contracts with the university.
6)Clarifies that it is not the intent of the Legislature that
the model contract provisions waive the requirements of the
law.
EXISTING LAW establishes the UC as a public trust administered
by the UC Regents, with 10 campuses throughout the state.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office, "AB 20
seeks to address the lack of standardized contract provisions in
agreements entered into between UC and the state of California.
The process would be similar to the agreements entered into by
UC and the federal government as dictated by the Federal
Demonstration Project. State contracting costs UC three times as
much as the federal process for one-tenth of the dollar amount
of a contract. These high costs result from non-uniformity of
contract terms, non-uniform and complex financial
accounting/invoicing requirements and lack of harmonization with
relatively uniform federal contracting terms.
"AB 20 will streamline the contracting process between UC and
state agencies while reducing the costs and time associated with
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negotiating standard governmental agreements. AB 20 will also
expedite UC's ability to conduct research for the state."
Background . According to UC, from 2006 to 2007, it entered into
more than 1,250 new contracts or contract amendments with 102
state agencies and programs worth over $321 million. Many of
these contracts have similar provisions dealing with issues such
as intellectual property and liability, yet often take
considerable amount of time to negotiate and complete - some as
long as a year. As of June 30, 2007, UC incurred almost $70
million in expenses that had not yet been reimbursed by the
state. These expenses may not all be from unpaid invoices but
could be a combination of delays in paying invoices, late
issuance of contracts (so invoices could not be submitted and
payment received), and recent expenses not yet invoiced.
In contrast, the federal government issues grants and contracts
with UC under pre-determined and mutually agreeable terms and
conditions. The UC collaborated with the federal government to
standardize terms for contracts between both public entities.
This practice has resulted in almost all federal grants and
contracts being accepted by UC campuses without delay to
negotiate terms. In comparison, each state contract is
negotiated on an individual basis between each state agency
program and each university campus, causing significant delays
to negotiate each provision of the agreement.
Previous legislation . This bill is substantially similar to AB
3033 (Laird) of 2008 which the Governor vetoed. The Governor
vetoed a substantial number of bills that year with the same
message that, due to the delay in passing the 2008-2009 State
Budget, he would only sign bills that were "the highest priority
for California." AB 3033 was vetoed for this reason.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Ross Warren / B. & P. / (916) 319-3301
AB 20
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