Contracting Out

The University of California is committed to maintaining a strong in-house workforce that supports living wages and benefits for employees. To reinforce this commitment, the UC Board of Regents approved and implemented Regents Policy 5402: Policy Generally Prohibiting Contracting for Services in November of 2019. Shortly following the implementation of this policy, the University and AFSCME Local 3299 agreed on terms outlined in Article 5 of the SX and EX collective bargaining agreements (CBA/union contracts), that outline specific restrictions on contracting services and functions that can be performed by University staff. In keeping with the intent of the policy/CBA, the following procedures and guidelines for vendor services/contracting out must be followed:

Process Workflow Outline:

All requests for contracting out will route through Employee and Labor Relations (ELR) prior to BOC/Purchasing.

All requests for contracting out for Covered Services must fall under specific and exigent circumstances.

Wage and Benefit Parity – Suppliers will be required to pay employees working in UC locations, UC wage and benefit parity (WBP) – commensurate with total compensation (wages and benefits) for in-house UC employees (for those providing Covered Services as outlined in the Policy/CBA). ELR will provide the appropriate WBP pay rates by position type.

WBP rates are updated annually to include wage increases and changes to benefits premiums. ELR will reach out to locations annually in approximately April/May to update WBP appendix agreements with vendors that will then be effective on June 1 of each year.

If contracting out is for a Covered Service as defined in the Regents Policy 5402/Article 5 and valued at $100,000 or more, then union contract Notice provisions of Article 5 require that AFSCME leadership be notified prior to entering into, extending or renewing. ELR will issue such a notice working in conjunction with the department/location requesting the contracted service.

Please see the following workflow for more information: (Vendor Services - Contracting Out Workflow rev 10.2020)

Additional Considerations Before Contracting Out for Covered Services

Senate Bill 820 – State Funded Buildings

California Senate Bill 820 imposes additional restrictions for contracting out for Covered Services performed in University of California buildings that have received capital state funding. As a condition for UC ANR receiving state capital funding, contracting out for Covered Services is generally not permissible in state-funded buildings.

When filling out Contracting Out for Services forms (COS), please indicate whether or not your facility is state funded. If you don’t know, please indicate “unknown” and ELR will check the status before approving the form.

For more information, please see the following: https://supplychain.ucdavis.edu/procure-contract/buying-srvcs/covered-services/sb820

Non-compliance

Failure to comply with SB 820 may cause the UC System to lose critical, invaluable state capital funding. Employees who fail to follow these guidelines may be subject to disciplinary action.

SB 27 and Contracting Out for Covered Services

The bill, known as the Recovery of Earned but Unpaid Wages Act, establishes regulations for vendors providing services to the University of California. It makes it illegal for vendors to accept payment from the University if they pay their employees less than the total compensation rate specified in their contract with the University or required by University policy.

For more information please see the following: https://www.ucop.edu/sb27/index.html

Compliance

Annual Reporting

All UC locations are required to provide an annual report for all contracts for Covered Services, regardless of amount or duration. The report is compiled throughout the year, then finalized for release to the UC Board of Regents on February 15^th of each year.

Qualified Individuals (QIs)

Workers who have worked for a contractor performing Covered Services work at a University location for 1000 hours over a rolling twelve (12) month period or 35% time over a rolling thirty-six (36) month period, shall be deemed a “qualified individual” (QI) for conversion to UC employment. QI’s should be offered UC career employment at the same location or at a location within ten miles of the campus where they performed the work under the contractor.

ELR – in conjunction with UCOP resources, monitors Qualified Individual status’ of contracted workers and will notify Qualified Individuals of their employment rights if/when they meet Qualified Individual status requirements.

For more information on these matters, please contact Employee and Labor Relations Manager, Ian Smith @ ijsmith@ucanr.edu

Required Forms:

Contracting Out Services Blank Form

Wage and Benefit Parity Appendix - Final - 02252020

Purchase Request Form