BILL ANALYSIS
Bill No: AB
2494
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2009-2010 Regular Session
Staff Analysis
AB 2494 Author: Blumenfield
As Amended: May 28, 2010
Hearing Date: June 29, 2010
Consultant: Art Terzakis
SUBJECT
Personal Services Contracts
DESCRIPTION
AB 2494 adds a new provision to the Government Code
pertaining to personal services contracts that requires a
state agency to immediately discontinue a contract that has
been disapproved by the State Personnel Board (SPB), unless
otherwise ordered. Specifically, this measure:
1. Requires a state agency to immediately discontinue a
contract that SPB or its delegate disapproves, unless
otherwise ordered by SPB or its delegate.
2. Prohibits the state agency from entering into another
contract for the same or similar services, or from
continuing the services that were the subject of the
disapproved contract.
3. Requires a state agency ordered to discontinue a
contract to notify the vendor within 15 days from SPB's
final action, unless another time period is specified,
and requires the state agency to provide a copy of the
notice to SPB and the employee organization that filed
the contract challenge.
4. Stipulates that failure to provide the required notices
may be grounds for rejection of future contracts for the
same or similar services as those discontinued.
5. Makes various legislative findings regarding a
AB 2494 (Blumenfield) continued
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September 2009 State Auditor report relating to personal
services contracts for private vendors and declares that
implementing the recommendation of the Auditor regarding
contracts reviewed by the SPB would provide greater
accountability and transparency without reducing the
ability of state agencies to enter or continue valid
contracts.
EXISTING LAW
Existing law authorizes state agencies to use personal
services contracts if specified standards are satisfied,
including, among other things, the contract does not cause
the displacement of civil service employees and the
contract is awarded through a publicized, competitive
bidding process. The SPB is required to review a proposed
contract upon the request of an employee organization for
compliance with those standards.
BACKGROUND
The Government Code (commencing with Section 19130)
specifies the conditions under which state agencies may
contract for services rather than use civil servants to
perform specified work and the procedures for reviewing and
amending contracts for that permissive contracting. A
union challenging the appropriateness of a personal
services contract with the State Personnel Board must
provide adequate evidence to support its challenge, and
state agencies are given the opportunity to demonstrate how
the contract meets one or more of the conditions permitted
under the Government Code.
Purpose of AB 2494: A September 2009 report by the State
Auditor on the use of information technology (IT) personal
services and consulting contracts at the Department of
Health Care Services (DHCS) and the Department of Public
Health (DPH) found that, over the preceding five years, SPB
had disapproved 17 IT contracts because the departments,
upon formal challenges from a union, could not adequately
justify contracting under Government Code Section 19130 -
the statute providing conditions allowing for
the use of contracting in lieu of civil servants to perform
state services. Although the union prevailed in 17 of its
23 IT contract challenges, many of SPB's decisions were
moot because the contracts had already expired before SPB
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rendered its decisions.
According to the Auditor, because SPB lacks a mechanism for
determining whether state agencies comply with its
decisions, the departments experienced no repercussions for
failing to terminate these contracts. Although not
prohibited by law from doing so, the departments entered
into numerous subsequent contracts for the same services as
those in the contracts previously disapproved by SPB.
The Auditor recommended that the Legislature specify that
contracts disapproved by SPB be terminated and require
state agencies to provide documentation to SPB and the
applicable unions to demonstrate to the satisfaction of SPB
the termination of these contracts. AB 2492 is intended to
implement this recommendation.
SUPPORT: As of June 25, 2010:
Service Employees International Union (SEIU), Local 1000
(sponsor)
California State Employees Association
CSEA Retirees, Inc.
California State University Employees Union
Association of California State Supervisors
Professional Engineers in California Government
OPPOSE: None on file as of June 25, 2010.
FISCAL COMMITTEE: Senate Appropriations Committee
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