Outsourcing for Covered Services
UC policy protects against outsourcing of services that can be provided by university employees.
A University of California policy implemented in November 2019 protects against excessive outsourcing.
The University of California is committed to maintaining a strong in-house workforce and supporting living wages and benefits for employees, as is evidenced in Article 5 of the University Collective Bargaining Agreement. To reinforce this commitment, in November 2019, the UC Board of Regents approved Regents Policy 5402, which generally prohibits contracting for services and ensures equitable treatment for any allowable contract workers.
Effective February 1, 2022 the process for initiating contracting services is no longer conducted via paper submitted through DocuSign. All new contracting out requests must be initiated via the Human Resources Management System Contract Out module. Contact our Department SAA to request access.
Policy Summary/Guiding Values and Principles
There shall be a general prohibition on contracting out for services and functions that can be performed by University staff. Under exigent and limited circumstances when an outside contract is a solution of last resort, the following shall apply:
UC Must Value and Protect Its Employees
The University shall prioritize the use of its employees to perform functions and services whenever possible and the use of outside contractors will not cause or facilitate the displacement of university employees.
Equal Pay for Equal Work
The labor conditions of contract workers shall be protected by ensuring they receive wages and benefits equivalent to what the University provides to its employees, and providing those who have performed services to the University on a long-term and continuous basis the opportunity to become University employees.
UC Must Be a Model Employer
Requirements governing state agencies and departments under California Government Code Section 19130 shall serve as minimum standards and, whenever reasonable, shall be exceeded.
Since its founding, the University's public mission has always been to unlock the doors of economic opportunity, uplift the human condition, and serve as an antidote to poverty. This begins from within.
UC's employment and contracting practices for all individuals working on its campuses, medical centers, and laboratories must model what it demands of other employers. In particular, this means the University must remain vigilant in ensuring its use of contract workers does not contribute to the rise of poverty-level jobs, thereby exacerbating growing economic inequality and reliance on taxpayer-funded "safety-net" services. Contracting out should be used sparingly and treated as an option of last resort to address temporary needs, not as a means to replace employees with lower-wage contractors.
As a public trust and one of the largest employers in California, the University is committed to protecting and valuing the lives of those it serves, educates, and employs.
Policy & Procedures
The University of California is committed to maintaining a strong in-house workforce and supporting living wages and benefits for employees. To reinforce this commitment, the UC Board of Regents approved Regents Policy 5402 in the fall of 2019, which generally prohibits contracting for ‘Covered Services’.
‘Covered Services’ is work customarily performed by bargaining unit employees at the University including but not necessarily limited to the following services: cleaning, custodial, janitorial, or housekeeping services; food services; laundry services; grounds keeping; building maintenance (excluding skilled crafts); transportation and parking services; security services, billing and coding services, sterile processing, hospital or nursing assistant services, and medical imaging or other medical technician services.
UC Policy 5402 & Catering at UCR
UC Riverside is committed to bringing in-house all covered services as defined by Article 5 of the University Collective Bargaining Agreement and Regents Policy 5402. As such, contracts that include covered services will only be allowed sparingly and will require demonstration that all other options to utilize or create career UC positions have been exhausted.
Exemptions to the policy will be rarely granted. Reduced cost is not an acceptable justification. By requiring wage and benefit parity in any contract for covered services, there will be no cost advantage to using contracted services in lieu of services provided by a UC Riverside employee.
Article 5 of the Collective Bargaining Agreement provided guidance for the Regents Policy 5402 that explains that contracting for covered services is only permitted when:
Contracting Out Requests
If you believe that your situation merits a carve out, you can request one by following the process outlined in the Contracting Out Process and submitting a request via the Human Resources Management System (HRMS). Please contact your Department SAA to request access to the HRMS.
Transitioning & Amending
UC is committed to protecting employees by insourcing functions and services whenever possible. In support of that goal, UC Riverside has identified a number of services that will be insourced. All outside supplier contracts authorized to continue must be amended to include the policy’s wage and benefit parity provisions. Parity is defined as the cost equivalent of the following:
Employment standards must be applied to contractors
If departments are given authority to contract for covered services, then the contractor must provide its employees with wages and benefits equivalent to those provided by the university.
Outsourcing for Covered Sources - Frequently Asked Questions
What is the scope of the new policy?
The scope of Regents Policy 5402: Regents Policy Generally Prohibiting Contracting for Services applies to all existing and new contracts for covered services.
What has been done to date?
The Contracting Out Process Workgroup has spent considerable time developing a process to ensure carve outs to Article 5 of the University Collective Bargaining Agreement and Regents Policy 5402 will be rarely made, and only after justification has been documented, reviewed and approved up to the level of Vice Chancellor PBA. The Dean or Vice Chancellor for the unit requesting the services must also endorse the requested carve out justification.
What is considered a "covered service"?
This is work customarily performed by SX (service) and EX (patient care technical) bargaining unit employees at the university. You can search for SX and EX job titles on the UCR Job Code Search webpage. For information on pay, please visit the UCR HR Title & Pay Plan tool.
The new policy establishes standards for contracts for services for cleaning, custodial, janitorial or housekeeping services; food services; laundry services; groundskeeping; building maintenance; transportation and parking services; security services; billing and coding services; sterile processing; hospital or nursing assistant services; and medical imaging or other medical technician services.
What are some commonly used covered services that can be provided in house?
Several of the university service providers include
How can I request a carve out?
Information on the process for requesting to hire an outside contractor can be found on the UCR Outsourcing for Covered Services > Outsourcing Policy Carve Outs webpage.
What are the noticing requirements related to covered services contracts?
As outlined in Article 5, Section D of the Collective Bargaining Agreement, the university will provide notice to AFSCME 3299 before entering into, extending or renewing a contract that includes covered services valued at more than $100,000. The notice must specify the duration, scope of work, wage/benefit parity information, dollar value and work location(s), if known.
What are the employment standards for Wage and Benefit Parity?
In general, contracts for covered services exceeding $100,000 and 90 days require the contractor to provide its employees working at university locations wages and benefits equivalent to those provided to university employees performing the same work. "Benefits" includes health, dental, vision, and retirement as well as vacation, sick leave, and holiday pay. More details can be found in Regents Policy 5402, Section C: Employment Standards.
What if a contract is authorized to continue, but the service provider won’t agree to wage/benefit provisions?
If the contractor refuses to meet the requirements of the policy, then the contract must be amended to end by the January 30, 2021 deadline.
If my request for an exception to outsource services is denied, what is the escalation path?
The Vice Chancellor – PBA and the UCR School of Medicine – Dean will have final approval authority for all requests as a delegate of the Chancellor.
Where can I learn more?
Register for and complete the HRMS Contracting Out training.
How do I withdraw a contract out request in the Contract Out HRMS Module?
If the request is in the Requesting Department Coordinator's queue, this role is able to cancel (withdraw) the request. The request can be returned to the Requesting Department up until it reaches the Compensation queue. After Compensation completes the Wage Parity, the request needs to be rejected, with comments, since it can no longer be canceled (withdrawn).
If our department would like to utilize a volunteer vendor to provide services (e.g. food service), do we need to go through the contract out process?
If there is no formal agreement/contract with the University, then Contract Out process would NOT apply. An example below (using food trucks):
Food trucks would not be subject to Article 5/Regents Policy 5402 in the following circumstances:
There is no formal agreement/contract with the food truck operator(s) to provide specific services. The requesting department still needs to contact Employee & Labor Relations (ELR) for Concept Approval and Environmental Health & Safety (EH&S) for a permit.
Food trucks would generally be subject to Article 5/Regents Policy 5402 when any of the following applies:
The location enters into an agreement with a food truck operator, or a third party who contracts with a food truck operator, to cater a specific event.
What is the process for hiring a Food Truck for an event?
Contact ELR first to determine if they need to comply with Policy 5402. Once approved to proceed with food truck, then submit a food permit request to EH&S at least 7 business days in advance.
How can we view the Hourly Parity Rates?
Contact your Compensation Consultant to discuss.
If I initially contacted Labor Relations with the request to contract out and they instructed me to submit the request through the Contract Out HRMS module, why does Labor Relations have to approve again in the HRMS?
The initial concept approval reviewed by Labor Relations does not have as much detail as the information requested through the Contract Out HRMS module. The intent of the initial concept approval reviewed by Labor Relations is to determine if the request could qualify as a contract out.
Does the Contract Out process need to be followed when using a pre-qualified, off-campus caterer?