BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1122|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
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CONSENT
Bill No: SB 1122
Author: Wright (D)
Amended: 3/22/10
Vote: 21
SENATE EDUCATION COMMITTEE : 8-0, 4/14/10
AYES: Romero, Huff, Alquist, Hancock, Liu, Price,
Simitian, Wyland
NO VOTE RECORDED: Maldonado
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : University of California public contracting
SOURCE : Author
DIGEST : This bill increases the threshold above which
the University of California is required to competitively
bid contracts for materials, goods and services from
$50,000 to $100,000, and expands an exemption from conflict
of interest provisions to include student employees engaged
in multiple campus employment positions.
ANALYSIS : Current law establishes University of
California (UC) competitive bidding laws within the Public
Contract Code and outlines specific procurement priority,
methods and exceptions, with regards to contracting for
materials, goods, and services. The Public Contract Code
also establishes various conflict of interest provisions
and requirements regarding UC contracting.
CONTINUED
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Current law also prohibits officers/employees of the UC
from engaging in any employment, activity, or enterprise
form which they receive compensation or in which they have
a financial interest if it is sponsored and/or funded, by
any university department via a university contract if such
is outside the course and scope of their regularly
university employment. Officers/employees are also
prohibited from contracting on their own behalf as
independent contractors with any university department to
provide services or goods. Officers/employees of the
university with teaching or research responsibilities are
specifically exempted from these prohibitions.'
This bill:
1.Increases the threshold above which the UC is required to
competitively bid contracts for materials, goods and
services from $50,000 to $100,000.
2.Exempts student employees receiving payment for campus
activities or engagements outside the scope of their
primary UC employment from prohibitions against their
contracting for employment sponsored and/or funded by
another university department.
Comments
Need for the Bill . According to the author's office, the
cost of goods and services has more than doubled since the
$50,000 competitive bid threshold was put in place in 1985,
with no adjustment since then to reflect inflation or the
erosion of the value of the dollar. In addition, the
author's office contends that compelling a formal bid
process on relatively small contracts adds significantly to
costs and the complexity can serve as a barrier to small
businesses.
Current law prohibits university employees, including
student employees, from being an independent contractor
with any university department to provide services or
goods. According to the UC, these provisions continually
raise issues for student employees employed by campus
departments but receiving payment for other campus
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activities as well. Though these students eventually get
paid, this requires issuance of an exception, review and
research by campus purchasing and human resource directors,
then manual keying of each check by staff processors,
resulting in delaying payment to students and increased
administrative costs.
What is Affected ? According to the UC, the change in the
bid threshold proposed by this bill affects contracts for
goods, materials and services that can include items such
as laboratory instruments and supplies, chemical reagents,
computer software licenses and updates, janitorial
supplies, commercial kitchen supplies, furniture,
consultant services, and equipment repair, among other
things. This bill does not affect UC contracts for labor
and materials related to construction projects, which,
under current law, are subject to a $50,000 competitive bid
threshold.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the UC, administrative costs related to the
management of a competitive bid proposal will be reduced by
$780,000 annually as the result of the reduced number of
bids which will be issued with the increase in the bid
threshold authorized by this bill. The UC also reports
that approximately 500 students a year are affected by the
conflict of interest provisions. The UC estimates that
this bill will result in administrative cost savings of
$175,000 as a result of the student exemption.
SUPPORT : (Verified 4/26/10)
University of California
CPM:cm 4/27/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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