(illustration: Lily Therens)

(illustration: Lily Therens)

Pan’s Problems

Push for state contracting legislation fizzles

Back Update Nov 3, 2014 By Allison Joy

In May we reported on efforts by Assemblyman Richard Pan, who represents the 9th district covering parts of Sacramento and San Joaquin counties, to curb outsourcing of government projects to the private sector (“Relationship Troubles,” by Russell Nichols, May 2014). Assembly Bill 906, which required all personal service contracts to be approved by the Legislature, went into effect last January. At the time of our story, Pan had proposed an additional package of bills: AB 1574, 1575 and 1578.

Here’s a look at how the bills have progressed:

AB 1574

  • Status: Vetoed
  • The bill would have required restrictions preventing state agencies from entering into contracts that include guaranteed occupancy rates, inhibit the agency’s infrastructure management, penalize agencies for financial loss due to emergencies or allow unapproved fee increases.
  • Gov. Jerry Brown said, “Existing law appropriately limits the use of personal services contracts and provides safeguards against the misuse of public funds. The additional prohibitions in this bill would not address an identified problem, would limit the state’s ability to make advance payments to community-based nonprofit groups and could invite litigation challenging the validity of existing public contracts.”

AB 1575

  • Status: Vetoed
  • The bill would have required performance and cost parameters for service contracts entered into by a government authority plus quarterly reports demonstrating compliance.
  • Gov. Brown said, “Current law already gives state agencies the discretion to require any reports they deem necessary for personal service contracts. I don’t believe we should mandate additional paperwork without a clear benefit, which I don’t find to be the case here.”

AB 1578

  • Status: Died in committee
  • The bill would have required the creation and maintenance of a database of services contracted, actual and projected costs, employees hired and parties to a given contract.

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