2010 California Code
Government Code
Article 4. Personal Services Contracts

19130.  The purpose of this article is to establish standards for
the use of personal services contracts.
   (a) Personal services contracting is permissible to achieve cost
savings when all the following conditions are met:
   (1) The contracting agency clearly demonstrates that the proposed
contract will result in actual overall cost savings to the state,
provided that:
   (A) In comparing costs, there shall be included the state'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) In comparing costs, there shall not be included the state'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 in state service. Indirect overhead costs shall mean
the pro rata share of existing administrative salaries and benefits,
rent, equipment costs, utilities, and materials.
   (C) In comparing costs, there shall be included in the cost of a
contractor providing a service any continuing state costs that would
be directly associated with the contracted function. These continuing
state 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 state pay rates.
   (3) The contract does not cause the displacement of civil service
employees. The term "displacement" includes layoff, demotion,
involuntary transfer to a new class, 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 class and
general location.
   (4) The contract does not adversely affect the state's affirmative
action efforts.
   (5) The savings shall be large enough to ensure that they 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, affirmative action standards.
   (9) The potential for future economic risk to the state 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 state government.
   (b) Personal services contracting also shall be permissible when
any of the following conditions can be met:
   (1) The functions contracted are exempted from civil service by
Section 4 of Article VII of the California Constitution, which
describes exempt appointments.
   (2) The contract is for a new state function and the Legislature
has specifically mandated or authorized the performance of the work
by independent contractors.
   (3) The services contracted are not available within civil
service, cannot be performed satisfactorily by civil service
employees, or are of such a highly specialized or technical nature
that the necessary expert knowledge, experience, and ability are not
available through the civil service system.
   (4) 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.
   (5) The legislative, administrative, or legal goals and purposes
cannot be accomplished through the utilization of persons selected
pursuant to the regular civil service system. Contracts are
permissible under this criterion to protect against a conflict of
interest or to insure 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.
   (6) The nature of the work is such that the Government Code
standards for emergency appointments apply. These contracts shall
conform with Article 8 (commencing with Section 19888) of Chapter 2.5
of Part 2.6.
   (7) State agencies need private counsel because a conflict of
interest on the part of the Attorney General's office prevents it
from representing the agency without compromising its position. These
contracts shall require the written consent of the Attorney General,
pursuant to Section 11040.
   (8) The contractor will provide equipment, materials, facilities,
or support services that could not feasibly be provided by the state
in the location where the services are to be performed.
   (9) The contractor will conduct training courses for which
appropriately qualified civil service instructors are not available,
provided that permanent instructor positions in academies or similar
settings shall be filled through civil service appointment.
   (10) The services are of such an urgent, temporary, or occasional
nature that the delay incumbent in their implementation under civil
service would frustrate their very purpose.
   (c) All persons who provide services to the state under conditions
the board determines constitute an employment relationship shall,
unless exempted from civil service by Section 4 of Article VII of the
California Constitution, be retained under an appropriate civil
service appointment.



19131.  Any state agency proposing to execute a contract pursuant to
subdivision (a) of Section 19130 shall notify the State Personnel
Board of its intention. All organizations that represent state
employees who perform the type of work to be contracted, and any
person or organization which has filed with the board a request for
notice, shall be contacted immediately by the State Personnel Board
upon receipt of this notice so that they may be given a reasonable
opportunity to comment on the proposed contract. Departments or
agencies submitting proposed contracts shall retain and provide all
data and other information relevant to the contracts and necessary
for a specific application of the standards set forth in subdivision
(a) of Section 19130. Any employee organization may request, within
10 days of notification, the State Personnel Board to review any
contract proposed or executed pursuant to subdivision (a) of Section
19130. The review shall be conducted in accordance with subdivision
(b) of Section 10337 of the Public Contract Code. Upon such a
request, the State Personnel Board shall review the contract for
compliance with the standards specified in subdivision (a) of Section
19130.



19132.  The State Personnel Board, at the request of an employee
organization that represents state employees, shall review the
adequacy of any proposed or executed contract which is of a type
enumerated in subdivision (b) of Section 19130. The review shall be
conducted in accordance with subdivision (c) of Section 10337 of the
Public Contract Code. However, a contract that was reviewed at the
request of an employee organization when it was proposed need not be
reviewed again after its execution.



19133.  (a) Any state agency may enter into an agreement with any
public or private institution of higher education in California,
nonprofit campus foundation, or state higher education foundation to
provide part-time employment to students attending a public or
private institution of higher education that contracts with the state
agency, or to students attending a public or private institution
which is affiliated with a nonprofit campus foundation, or a state
higher education foundation, that contracts with a state agency, in
work related to the field of study of the student.
   (b) Notwithstanding any other provision of law to the contrary, no
student employed pursuant to this section shall do any of the
following:
   (1) Accrue state civil service status.
   (2) Be employed for more than 194 days in the 365 days following
the initial date of employment.
   (3) Cause the displacement of civil service employees.
   (c) "Displacement," for the purposes of this section, includes
layoffs, demotions, involuntary transfers to a new class, involuntary
transfers to a new location requiring a change of residence, and
time-based reductions. "Displacement," for the purposes of this
section, shall not include changes in shifts or days off nor shall it
include reassignment to other positions within the same class and
general location.


19134.  (a) Personal services contracts entered into by a state
agency in accordance with Section 19130 for persons providing
janitorial and housekeeping services, custodians, food service
workers, laundry workers, window cleaners, and security guard
services shall include provisions for employee wages and benefits
that are valued at least 85 percent of the state employer cost of
wages and benefits provided to state employees for performing similar
duties.
   (b) For purposes of this section, "benefits" includes "health,
dental, retirement, and vision benefits, and holiday, sick, and
vacation pay."
   (c) (1) The Department of Personnel Administration shall establish
annually the state employer wage and benefit costs for workers
covered pursuant to this section.
   (2) Benefit costs shall be established using rates based on single
employee, employee plus one dependent, and employee plus two or more
dependents, or the costs may be based on a blended rate, subject to
the determination of the Department of Personnel Administration.
   (d) In lieu of providing actual benefits, contractors may comply
with this section by a cash payment to employees equal to the
applicable determination under subdivision (c).
   (e) Failure to provide benefits or cash-in-lieu to employees as
required under this section shall be deemed to be a material breach
for any contract for personal services covered by this section.
   (f) The Department of General Services and the Department of
Personnel Administration may adopt guidelines and regulations to
implement the requirements of this section.
   (g) This section applies to all contracts exceeding 90 days.
   (h) Holiday pay shall be provided to employees of contractors
providing services specified in subdivision (a) on any state holiday
that the state facility in which the services are being provided is
closed.
   (i) This section also applies to wages and benefits of employees
of subcontractors providing services specified in subdivision (a) in
state-leased facilities where the facility is at least 50,000 square
feet in area and the state leases all of the occupied floorspace of
the facility.
   (j) With the exception of subdivision (h), this section does not
apply to personal services contracts for the services described in
subdivision (a) performed by employees of nonprofit organizations
that are employed in accordance with any of the following:
   (1) A special license issued pursuant to Section 1191.5 of the
Labor Code.
   (2) A special certificate issued pursuant to Section 214 of Title
29 of the United States Code.
   (3) A community rehabilitation plan described in Sections 19152
and 19404 of the Welfare and Institutions Code.
   (4) A habilitation services program as described in Sections 19352
and 19356.6 of the Welfare and Institutions Code.