California Senate Bill SB943 Latest Draft

 BILL NUMBER: SB 943AMENDED BILL TEXT AMENDED IN SENATE APRIL 22, 2014 AMENDED IN SENATE MARCH 24, 2014 INTRODUCED BY Senator Beall FEBRUARY 4, 2014 An act to add Part 1.5 (commencing with Section 18300) to Division 5 of Title 2 of the Government Code, relating to the California State University. LEGISLATIVE COUNSEL'S DIGEST SB 943, as amended, Beall. California State University: personal services contracting. Existing provisions of the State Civil Service Act establish standards for the use of personal services contracts by state agencies. An existing provision of the California Constitution excludes the officers and employees of the California State University from the state civil service. Existing law authorizes the Trustees of the California State University to enter into agreements with public or private agencies, persons, officers, institutions, corporations, associations, or foundations for the performance of acts or for the furnishing of services, facilities, materials, goods, supplies, or equipment by or for the trustees or for the joint performance of an act or function or the joint furnishing of services and facilities by the trustees and the other party to the agreement. This bill would establish standards for personal services contracts, similar to those of the State Civil Service Act, that would be applicable to the California State University. The bill would require the  Public Employment Relations   State Personnel  Board to be notified of any proposed or executed personal services contract, and would require the board, upon request of an employee organization, to review and disapprove a contract that does not meet those standards. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Part 1.5 (commencing with Section 18300) is added to Division 5 of Title 2 of the Government Code, to read: PART 1.5. Personal Services Contracts for California State University 18300. (a) For purposes of this part, the following definitions apply: (1) "Board" means the  Public Employment Relations   State Personnel  Board. (2) "Trustees" means the Trustees of the California State University. (3) "University" means an institution of higher education that is part of the California State University. (b) If any provision of this part conflicts with Section 89036 of the Education Code, the provisions of this part shall prevail. 18301. (a) The purpose of this part is to establish standards for the use of personal services contracts by the California State University. (b) Personal services contracting is permissible to achieve cost savings when all the following conditions are met: (1) The university clearly demonstrates that the proposed contract will result in actual overall cost savings to the California State University. In comparing costs, the following shall apply: (A) There shall be included the California State University's additional cost of providing the same service as proposed by a contractor. These additional costs shall include the salaries and benefits of additional staff that would be needed and the cost of additional space, equipment, and materials needed to perform the function. (B) The California State University's indirect overhead costs shall not be included unless these costs can be attributed solely to the function in question and would not exist if that function was not performed in regular university employment service. Indirect overhead costs shall mean the pro rata share of existing administrative salaries and benefits, rent, equipment costs, utilities, and materials. (C) There shall be included in the cost of a contractor providing a service any continuing costs to the California State University that would be directly associated with the contracted function. These continuing costs shall include, but not be limited to, those for inspection, supervision, and monitoring. (2) Proposals to contract out work shall not be approved solely on the basis that savings will result from lower contractor pay rates or benefits. Proposals to contract out work shall be eligible for approval if the contractor's wages are at the industry's level and do not significantly undercut university pay rates. (3) The contract does not cause the displacement of university employees. The term "displacement" includes layoff, demotion, involuntary transfer to a new classification, involuntary transfer to a new location requiring a change of residence, and time base reductions. Displacement does not include changes in shifts or days off, or reassignment to other positions within the same classification and general location. (4) The contract does not adversely affect the trustees' nondiscrimination efforts. (5) The savings shall be large enough to ensure that the savings will not be eliminated by private sector and state cost fluctuations that could normally be expected during the contracting period. (6) The amount of savings clearly justify the size and duration of the contracting agreement. (7) The contract is awarded through a publicized, competitive bidding process. (8) The contract includes specific provisions pertaining to the qualifications of the staff that will perform the work under the contract, as well as assurance that the contractor's hiring practices meet applicable nondiscrimination standards. (9) The potential for future economic risk to the trustees from potential contractor rate increases is minimal. (10) The contract is with a firm. A "firm" means a corporation, partnership, nonprofit organization, or sole proprietorship. (11) The potential economic advantage of contracting is not outweighed by the public's interest in having a particular function performed directly by university employees. (c) Personal services contracting also shall be permissible when any of the following conditions are met: (1) The contract is for a new university function and the Legislature has specifically mandated or authorized the performance of the work by independent contractors. (2) The services contracted are not available through regular university employment procedures, cannot be performed satisfactorily by university employees, or are of such a highly specialized or technical nature that the necessary expert knowledge, experience, and ability are not available through the pool of university employees. (3) The services are incidental to a contract for the purchase or lease of real or personal property. Contracts under this criterion, known as "service agreements," shall include, but not be limited to, agreements to service or maintain office equipment or computers that are leased or rented. (4) The legislative, administrative, or legal goals and purposes cannot be accomplished through the utilization of persons selected pursuant to the regular university employment process. Contracts are permissible under this criterion to protect against a conflict of interest or to ensure independent and unbiased findings in cases where there is a clear need for a different, outside perspective. These contracts shall include, but not be limited to, obtaining expert witnesses in litigation. (5) The contractor will provide equipment, materials, facilities, or support services that could not feasibly be provided by university employees in the location where the services are to be performed. (6) The contractor will conduct employee training courses for which appropriately qualified university employee instructors are not available, provided that permanent instructor positions in academies or similar settings shall be filled through the regular university employment process. (7) The services are of such an urgent, temporary, or occasional nature that the delay incumbent in their implementation through regular university employment procedures would frustrate their very purpose. (d) All persons who provide services to the California State University under conditions the board determines constitute an employment relationship shall be retained pursuant to regular university employment procedures. 18302. (a) A university that proposes to execute a personal services contract pursuant to this part shall notify the board of that intention. All organizations that represent university employees who perform the type of work to be contracted, and any person or organization that has filed with the board a request for notice, shall be contacted immediately by the board upon receipt of this notice so that they may be given a reasonable opportunity to comment on the proposed contract. (b) When a university submits a proposed contract, the university shall retain and provide all data and other information relevant to the contract and necessary for a specific application of the standards for personal services contracts established in Section 18301. (c) An employee organization may request, within 10 days of notification, the board to review a contract proposed or executed pursuant to this part. Upon a request, the board shall review the contract for compliance with the standards for personal services established in Section 18301. The board shall disapprove a contract that does not comply with the standards. (d) The board may adopt regulations to administer the provisions of this part relating to the review of personal service contracts. 18303. (a) Upon the request of an employee organization that represents employees of the California State University, the board shall review the adequacy of a personal services contract proposed or executed pursuant to this part. A contract that was reviewed at the request of an employee organization when it was proposed need not be reviewed again after its execution. (b) (1) Unless a personal services contract is necessary due to a sudden and unexpected occurrence that poses a clear and imminent danger, requiring immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential public services, the contract shall not be executed until the university proposing to execute the contract has notified all organizations that represent university employees who perform the type of work to be contracted. (2) At a minimum, the notice shall include a full copy of the proposed contract. The university may redact specific confidential or proprietary information from the notice. (3) The board shall establish a process to certify the notification in paragraph (1). 18304. (a) If a contract is disapproved by action of the board, the university shall immediately discontinue that contract, unless ordered otherwise by the board. The university shall not circumvent or disregard the board's action by entering into another contract for the same or similar services or to continue the services that were the subject of the contract disapproved by the board. (b) If a university is ordered to discontinue a contract, the university shall serve notice of the discontinuation of the contract to the vendor within 15 days from the board's final action unless a different notice period is specified. A copy of the notice also shall be served on the board and the employee organization that filed the contract challenge. Failure to serve this notice may be grounds for rejection of future contracts for the same or similar services that were discontinued.