Assembly Bill 740, authored by Assemblyman Bob Blumenfield, D-Woodland Hills, cleared the Senate last Thursday on a 24-14 vote. The Assembly voted 54-17 in May to approve it.
SEIU Local 1000, the American Federation of State, County and Municipal Employees and Professional Engineers in California Government, supported the bill, which aims to strengthen laws against needless private contracting.
The law says that departments have to justify contracting out, say, information technology services, or keep the work in-house. If Brown signs Assembly Bill 740, government bodies would have to immediately end business with a private vendor if the State Personnel Board rules that its contract violates state law. The measure would also prohibit that agency from entering into another contract for the same or similar services.
The Senate analysis of the measure notes that there have been problems with swiftly ending illegal deals:
In September 2009, the State Auditor prepared an audit report on the use of information technology personal services and consulting contracts (IT contracts) at the Department of Health Care Services (DHCS) and the Department of Public Health (DPH), following a request by the Joint Legislative Audit Committee. The State Auditor's report discloses that SPB disapproved 17 IT contracts over the last five years because the departments did not justify contracting for these services under the conditions set forth in Government Code Section 19130. The union prevailed in 17 of its 23 IT contract challenges, but many of SPB's decisions were moot because the contracts had already expired before SPB had ruled on the validity of the contract.
Gov. Arnold Schwarzenegger vetoed similar legislation during the 2009-10 session, saying that immediately ending contracts "could leave departments unable to meet their programmatic responsibilities and cause unknown fiscal and operational problems." He also cited concerns over potential legal ramifications of terminating contracts.