“The delay…would frustration their very purpose” – Hasty Last-Minute Add-On to California Budget Clamps Down on University of California’s Contracting Out

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Looks like there’s some sort of union effort to impose great administrative burdens on the University of California to prevent it from contracting out for services that could be done by UC employees. Look at the italicized (new) language on pages 577-581 of the newly-amended budget bill, Assembly Bill 1464, Section 17(a) of 6440-001-0001 “For Support of University of California.” The complete language is below.

My favorite line is 17(a)(2)(F), lines 38-43 on page 580: “The services are of such an urgent, temporary, or occasional nature that the delay incumbent in their implementation under the UC’s regular or ordinary hiring process would frustration their very purpose.”

Is this typo a subconscious expression of frustration with the budget process?


UPDATE: This language – newly added to the proposed FY 2012-13 California budget – is cribbed from California Education Code Sections 45103.1 and 88003.1, enacted through Senate Bill 1419, approved on a party-line vote in the legislature (Democrats in support, Republicans opposed) and signed into law by Governor Gray Davis in 2002.

The bill was sponsored by the California School Employees Assocation, supported by the American Federation of State, County and Municipal Employees (AFSCME) California, and authored by former Senator Richard Alarcon (D-Los Angeles). It is meant to restrict the ability of schools and community colleges from contracting out for services.

Opponents of Senate Bill 1419 argued at the time that the bill imposed “significant costs and administrative burdens by creating added state mandates that include the cost for the process of bidding and the requirement to hire someone if unable to contract out for services.”

Two Republicans have introduced bills to repeal the law since its enactment: (1) former legislator John Benoit (R-Riverside) introduced Assembly Bill 49 in the 2005-06 session (the bill was never considered in its original form and eventually became a vehicle for another proposal), and (2) Senator Bob Huff (R-Diamond Bar) introduced Senate Bill x8 61 in 2010, which was rejected by the Senate Education Committee on a 6-2 party-line vote (Democrats opposed, Republicans in support).


6440-001-0001—For Support of University of California

17.

(a) Notwithstanding any other law, the University of California shall not expend moneys appropriated from the General Fund in the annual Budget Act to contract out for services currently or customarily performed by nonacademic employees to achieve cost savings in instances other than the following:

(1) If all the following conditions are met:

(A) The University of California (UC) or the contracting agency clearly demonstrates that the proposed contract will result in actual overall cost savings to the UC, provided that:

(i) In comparing costs, there shall be included the UC’s additional cost of providing the same service as proposed by the 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.

(ii) In comparing costs, there shall not be included the UC’s indirect overhead costs unless these costs can be attributed solely to the function in question and would not exist if that function was not performed by the UC. Indirect overhead costs shall mean the pro rata share of existing administrative salaries and benefits, rent, equipment costs, utilities, and materials.

(iii) In comparing costs, there shall be included in the cost of a contractor providing a service any UC costs that would be directly associated with the contracted function. These continuing UC costs shall include, but not be limited to, those for inspection, supervision, and monitoring.

(B) 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 undercut UC pay rates.

(C) The contract does not cause the displacement of UC 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, nor does it include reassignment to other positions within the same classification and general location or employment with the contractor, so long as wages and benefits are comparable to those paid by the UC.

(D) The savings shall be large enough to ensure that they will not be eliminated by private sector and UC cost fluctuations that could normally be expected during the contracting period.

(E) The amount of savings clearly justify the size and duration of the contracting agreement.

(F) The contract is awarded through a publicized, competitive bidding process.

(G) 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.

(H) The potential for future economic risk to the UC from potential contractor rate increases is minimal.

(I) The contract is with a firm. A “firm” means a corporation, limited liability company, partnership, nonprofit organization, or sole proprietorship.

(J) The potential economic advantage of contracting is not outweighed by the public’s interest in having a particular function performed directly by the UC.

(2) If any of the following conditions are met:

(A) The services contracted are not available within the UC cannot be performed satisfactorily by UC employees, or are of such highly specialized or technical nature that the necessary expert knowledge, experience, and ability are not available through the UC.

(B) The services are incidental to a contract for purchase or lease or real or personal property. Contracts under this criterion, known as “service agreements,” shall included, but not be limited to, agreements to service or maintain office equipment or computers that are leased or rented.

(C) The policy, administrative, or legal goals and purposes of the UC cannot be accomplished through the utilization of persons selected pursuant to the regular or ordinary hiring 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.

(D) The nature of the work is such that the criteria for emergency appointments apply. “Emergency appointment” means an appointment made for a period not to exceed 60 working days either during an actual emergency to prevent the stoppage of public business or because of the limited duration of the work. The method of selection and the qualification standards for an emergency employee shall be determined by the UC. The frequency of appointment, length of appointment, and the circumstances appropriate shall be restricted so as to prevent the use of emergency appointments to circumvent the regular or ordinary hiring process.

(E) The contractor will provide equipment, materials, facilities, or support services that could not feasibly be provided by the UC in the location where the services are to be performed.

(F) The services are of such an urgent, temporary, or occasional nature that the delay incumbent in their implementation under the UC’s regular or ordinary hiring process would frustration their very purpose.

(b) This section shall apply to personal service contracts entered into after January 1, 2013. This section shall not apply to the renewal of a personal services contract subsequent to January 1, 2013, if the contract was entered into before January 1, 2013, irrespective of whether the contract is renewed or rebid with the existing contractor or with a new contractor unless it has been significantly expanded.

(c) The University of California shall annually post both of the following on its Internet Web site:

(1) The number of, and contract amounts for, contracts entered into during the prior fiscal year, for services currently or customarily performed by nonacademic employees, to achieve cost savings.

(2) If compliance with (a) was required for the prior fiscal year, findings regarding how the University of California complied with that provision.

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