BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 1921 (Holden) - Personal services contracts: access to
records.
Amended: April 28, 2014 Policy Vote: GO 7-1
Urgency: No Mandate: No
Hearing Date: June 30, 2014
Consultant: Mark McKenzie
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 1921 would require state agency contracts for
personal services in excess of $25,000 to include provisions
that provide the agency with the right to review and copy any
records and files related to the performance of the contract,
and specify that such information is subject to disclosure under
the Public Records Act (PRA).
Fiscal Impact:
Unknown, potentially minor to significant costs to state
agencies related to staff time for additional contract
administration and responding to PRA requests that would
require off-site visits. (General and special funds)
Unknown, potential increase in state contracting costs to
the extent additional contractor costs for making records
available are added to bid prices, and to the extent that
the requirements discourage contractors from bidding on
state contracts. Reducing the pool of contractors could
decrease competition and increase contract costs. (General
and special funds)
Background: Existing CA regulations define a personal services
contract as "any contract, requisition, purchase order, except
public works contracts under which labor or personal services is
a significant, separately identifiable element" (2 CCR Sec.
547.59). Existing law generally restricts contracting out by
state agencies to services that cannot be performed by civil
service employees, subject to specified statutory exceptions.
State agencies may enter into personal services contracts to
achieve cost savings if the contracting agency demonstrates that
the proposed contract will result in actual overall state cost
savings after considering specified conditions (Government Code
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19130).
Existing law (Government Code 19131) provides that any state
agency proposing to execute a contract shall notify the State
Personnel Board, which in turn must immediately contact all
organizations that represent state employees who perform the
type of work to be contracted as well as anyone else who has
filed a request to be similarly noticed so that they may be
given a reasonable opportunity to comment on the proposed
contract. Departments or agencies submitting proposed contracts
must retain all data and information relevant to the contracts.
Any employee organization may request, within 10 days of
notification, that the State Personnel Board review any contract
that is proposed or executed under the cost savings provisions
in statute.
Existing law, the California Public Records Act (PRA), requires
state and local agencies to make public records open to
inspection by every person, with specified statutory exceptions,
and to promptly provide copies of public records to any person,
upon payment of fees covering direct costs of duplication, or a
statutory fee if applicable. Upon request, an exact copy shall
be provided unless impracticable to do so. Public records
include all communications related to public business regardless
of physical form or characteristics, including any writing,
picture, sound, or symbol, whether paper, magnetic or other
media, and also includes electronic records. Under current law,
an agency has 10 days within receipt of a request to decide
whether records are disclosable. In the following unusual
circumstances this time period may be extended up to 14 days
upon written notice to the person making the request: a single
request requires the examination of a voluminous amount of
distinct records, the requested records are stored off-site,
consultation with other agencies is required, or there is a need
to compile data, construct a computer report, or perform
programming.
Existing law requires every contract entered into by any state
entity involving the expenditure of public funds in excess of
$10,000 to include a provision stating that the contract shall
be subject to the examination and audit of the California State
Auditor, at the request of the state entity or as part of any
audit of that public entity, for a period of three years after
final payment of the contract (Government Code 8546.7). The
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examinations and audits are confined to matters connected to the
performance of the contract.
Proposed Law: AB 1921 would require each personal services
contract in excess of $25,000 to provide that state agencies
have the right to review and copy any records and files related
to the performance of the contract. The bill would also require
personal services contracts to indicate that these records are
subject to the PRA and may be disclosed by the state agency.
The bill further clarifies that any requests for records under
the PRA pertaining to a personal services contract must be
submitted directly to the state agency and not the contractor.
Staff Comments: Standard language in the audit provisions of
state personal services contracts requires contractors to agree
to allow the state to review and copy any records related to the
performance of the contract. Although the information must
currently be made available to state agencies upon request,
existing law and the standard contracting language appears to
imply that disclosure would be made in connection with an audit
of the contract. AB 1921 would make a contractor's records
related to the performance of the contract subject to a public
records request at any time by any member of the public through
the contracting state agency, which would likely result in an
increase in PRA requests that must be processed by state
agencies statewide. Based on the State Contract and Procurement
Registration System, state agencies entered into approximately
4,000 personal services contracts in 2013. Although the bill
promotes the PRA's goal of maximizing transparency in
governmental operations, it would likely result in increased
costs to state agencies.
State agencies would likely incur increased contract
administration costs related to facilitating requests by the
public for a contractor's records. There would be increased
staff time related to the inspection and duplication of records
located off-site on the premises of the contractor. In
addition, contractors' records may contain more information that
is exempt from public disclosure, such as
personally-identifiable information and trade secrets, which may
require more state agency legal staff time for consultation and
redaction. Depending on the volume of additional PRA requests
processed as a result of the bill, increased staff costs may be
relatively minor for some departments, but could be significant
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for agencies that enter into higher volumes of personal services
contracts or large and complex contracts.
The bill could also result in an increase in contracting costs
overall, depending on the behavior of contractors. For example,
some contractors may build into a contract bid price any
additional perceived staffing costs associated with making
records available to state agencies upon request of members of
the public. In addition, some contractors could be dissuaded
from bidding on state contracts because of the potential for
arbitrary requests for record inspection for three years
following the conclusion of payment for services rendered. To
the extent that perceived burdens to private contractors reduce
the overall pool of contractors bidding on a personal services
contract, there could be increased contracting costs related to
reduced competition.