Report 2016-125.1 Recommendation 4 Responses

Report 2016-125.1: The University of California Office of the President: It Has Not Adequately Ensured Compliance With Its Employee Displacement and Services Contract Policies (Release Date: August 2017)

Recommendation #4 To: University of California

To ensure that university locations adequately justify the necessity of contracts that will displace university employees, the Office of the President should revise contracting policies to address situations in which university locations are contemplating entering into services contracts instead of hiring university employees to perform an activity. In these situations, the Office of the President should require university locations to perform an analysis that is similar to the one it requires when current university employees are displaced.

6-Month Agency Response

UC maintains Contracting for Services Guidelines (Guidelines), which were updated on December 6, 2017. This update included changes to address recommendations from the California State Auditor's audit of contracted employees and contracting practices. The Guidelines describe how to contract out for services where University staff would be displaced. The guidelines apply to decisions to contract for services at UC locations, medical centers, and the Office of the President. The guidelines also acknowledge the circumstances under which the University may need to contract for services and which may result in the displacement of University staff. Locations are required to complete a standard form, entitled "Formal Notice Pursuant to University Guidelines on Contracting for Services," as part of the review process. The University has processes to evaluate the need for contracting out for both the union and non-union work. Any changes to services falling under unionized work must be done through the collective bargaining process.

The University's contracting policy (BUS-43) has been revised to require that Procurement/Supply Chain Managers will require the requesting department to provide evidence of an HR approved displacement analysis worksheet (now called, "Formal Notice Pursuant to University Guidelines on Contracting for Services") before Procurement will take action to engage a Supplier.

Training for all Procurement systemwide and campus management and staff was conducted on November 29, 2017. An additional session for the Procurement Leadership Council was conducted on November 7, 2017.

The training educated Procurement leadership and staff about the need to comply with these displacement guidelines and practices so they can comply with these guidelines and practices as part of the contracting process.

  • Completion Date: December 2017
  • Response Date: February 2018

California State Auditor's Assessment of 6-Month Status: Fully Implemented


60-Day Agency Response

To achieve the objective of this recommendation UC Procurement will:

-Review contracting policy (BUS-43) and update as appropriate

-Provide training and/or job aids to ensure campus and local procurement leaders are aware of the displacement guidelines and practices so that they can confirm compliance with these guidelines and practices as part of the contracting process.

  • Estimated Completion Date: December 2017
  • Response Date: October 2017

California State Auditor's Assessment of 60-Day Status: Pending


All Recommendations in 2016-125.1

Agency responses received are posted verbatim.