BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 252|
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THIRD READING
Bill No: SB 252
Author: Vargas (D)
Amended: 5/31/11
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE : 7-4, 4/12/11
AYES: Wright, Calderon, Corbett, De Le�n, Hernandez,
Padilla, Yee
NOES: Anderson, Berryhill, Strickland, Wyland
NO VOTE RECORDED: Cannella, Evans
SENATE JUDICIARY COMMITTEE : 3-2, 4/26/11
AYES: Evans, Corbett, Leno
NOES: Harman, Blakeslee
SENATE APPROPRIATIONS COMMITTEE : 6-2, 5/26/11
AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg
NOES: Walters, Runner
NO VOTE RECORDED: Emmerson
SUBJECT : Public contracts: personal services
SOURCE : American Federation of State, County and
Municipal
Employees, AFL-CIO
DIGEST : This bill requires privatization contractors, as
defined, to file with the contracting agency, as defined, a
copy of each subcontract or amendment to a subcontract
executed under the privatization contract. This bill
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requires the contracting agency to maintain the subcontract
or amendment to the subcontract as a public record pursuant
to the California Public Records Act.
ANALYSIS :
Existing law :
1. Provides requirements and standards for state agencies
when utilizing the use of personal services contracts.
2. Requires the contracting agency to clearly demonstrate
the cost savings of the personal services contract.
4. Provides that personal services contracts entered into
by state agencies with private parties in an amount of
$5,000 or more, unless exempt, are required to be
submitted to the Department f General Services (DGS) for
approval.
5. Declares the people's right to transparency in
government.
6. Governs the disclosure of information collected and
maintained by public agencies. Generally, all public
records are accessible to the public upon request,
unless the record requested is exempt from public
disclosure.
This bill:
1. Define "agency" to include State Agency, department,
division, board, commission, or other office or officer
in the executive branch of government.
2. Define a "privatization contract" to mean an agreement
or combination or series of agreements, including, but
not limited to, a personal services contract, by which a
privatization contractor agrees with a state agency to
provide services valued at $500,000 or more that are
substantially similar to and in lieu of services
provided in whole or in part by civil service employees
of the agency.
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3. Defines "privatization contractor" to mean any
contractor, consultant, subcontractor, independent
contractor, or private business owner that contracts
with an agency to perform services that are
substantially similar to, and in lieu of, services
provided, in whole or in part, by civil service
employees of the agency.
4. Requires privatization contractors to file with the
contracting agency a copy of each subcontract or
amendment to a subcontract executed under the
privatization contract.
5. Requires the contracting agency to maintain the
subcontract or amendment to the subcontract as a public
record pursuant to the California Public Records Act.
6. Requires each privatization contract to include language
providing for public access to the completed contract.
7. Requires an agency, as part of the budgetary process, to
provide an addendum to its submitted budget that
includes information regarding the total cost of each
privatization contract for the prior year, the projected
number of privatization contracts and estimated costs
for the current and upcoming year, and the number of
privatization contractor employees and consultants,
reflected as full-time equivalent positions, and their
hourly wage rates for the current and previous fiscal
years. This bill provides that this addendum shall be a
public record.
8. Requires the agency entering into a privatization
contract to provide to DGS, on or before April 1, 2012
and annually each April thereafter, a report containing
a copy of each privatization contract for that year and
a budget analysis of each privatization contract, as
specified.
9. Requires DGS to compile, publish, and make available for
public inspection all contracting reports received
pursuant to the provisions of this bill.
Background
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At times, state agencies utilize personal services
contracts with private parties in order to reduce costs to
the state. DGS reported that in fiscal year 2009-2010,
California spent $35.4 billion on private contracts.
Before a state agency may enter into a personal services
contract, it must notify the State Personnel Board of the
agency's intention and receive approval from DGS to enter
into the contract. Because these personal services
contracts are entered into and maintained by state
agencies, they are subject to public disclosure pursuant to
the California Public Records Act. Once the personal
services contract has been executed, the state agency must
electronically submit certain contract information to the
State Contract and Procurement Registration System
maintained by DGS.
This bill, sponsored by the American Federation of State,
County and Municipal Employees, AFL-CIO, establishes the
Government Oversight and Fiscal Accountability Review Act
of 2011, in order to increase transparency over
privatization contracts, as defined, and subcontracts
entered into thereunder. Under this bill, privatization
contractors, as defined, is required to submit subcontracts
and subcontract amendments to the state agency, and the
state agency would be required to maintain these
subcontracts as public records pursuant to the California
Public Records Act. This bill requires privatization
contracts to include language providing for public access
to the completed contract. This bill also requires
agencies entering into privatization contracts to provide a
budget addendum, as specified, and a quarterly report, as
specified.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13
2013-14 Fund
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Reporting requirements
-administration Estimated
$1,000 to $1,500 annually
Special*
-contracting dept. $200 $400 $400
General/
Special
-increased contract costs
Unknown, potentially multimillions
Special*
*Service Revolving Fund (a combination of General Funds and
special funds)
SUPPORT : (Verified 5/31/11)
American Federation of State, County and Municipal
Employees, AFL-CIO
California Labor Federation
California Nurses Association
California State Employees Association
California State Supervisors
Glendale City Employees Association
Keeslar & Associates Government Affairs
Organization of SMUD Employees
Professional Engineers in California Government
San Bernardino Public Employees Association
Services Employees International Union, Local 1000
ARGUMENTS IN SUPPORT : According to the author's office,
current law restricts but does not prohibit public agencies
from contracting out services to the private sector public
agencies are prohibited from engaging in private
contracting when the services could be performed by state
employees; requires a state agency proposing to use a
private contractor to contact the State Personnel Board
which will contact the employee organizations and allow for
a comment period on the proposal; authorizes state agencies
to contract out for architectural and engineering services
on public works projects; requires the state agency using
private contractors to make the information available to
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the public.
PQ:do 5/31/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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