The UC Regents implemented a policy in late 2019, titled Contracting Out for Covered Services that supports and augments the UC's contract with AFSCME. This policy is essentially synonymous with the term "Article 5".
Utilized interchangablely alongside the QI Workforce Program, UC Regents Policy 5402 and Article 5 of our collective bargaining agreement with AFSCME define how UC handles contracting out for certain services, known as Covered Services.
Additionally, UC must track the hours each supplier-employee spends providing a Covered Service at a UC location. If that supplier-employee meets the criteria in Policy 5402 and Article 5, they become a Qualified Individual (QI) with the right to convert to career employment with UC.
A “Covered Service” is work customarily performed that normally falls under the responsibilities listed in the job description of University staff: "work customarily performed by bargaining unit employees, whether in whole or in part, including but not necessarily limited to the following services: cleaning, custodial, janitorial, or housekeeping services; security services; billing and coding services, sterile processing, hospital and nursing assistant services and medical imaging services.”
Visit the Title Code Search (TCS) website for information on job titles and pay associated with SX (service) and EX (patient care technical) bargaining units to determine whether the service(s) requested fall into this category.
Covered services include work customarily performed by bargaining unit employees, whether in whole or in part, including but not necessarily limited to the following services:
Several UC San Diego service providers are available for work customarily performed by bargaining unit employees, whether in whole or in part:
Procurement and Contracts are required to review purchase agreements for accuracy and compliance with all contract terms.
Labor Relations is responsible for determining what jobs are subject to which WBP rates on the agreement.
Ultimately the department is responsible for providing the correct information to review, the correct purchasing category, and the supporting documentation for purchase agreements with suppliers to use their services.
No, however, it is a priority for UC to align with fair work for UC employees and allow the opportunity to have services sourced in-house first. Departments shall explore all options for completing work with UCSD staff before requesting to contract out with a third-party supplier. Staffing options include per diem pools, overtime, creation of additional FTEs, and temporary reassignment of work. Employee and Labor Relations can assist with exploring alternatives to contracting out.
Please note new orders may have a new review resulting in increased paperwork.
Labor Relations will assist Departments seeking to contract out services to determine whether the services are Covered Services within the meaning of Article 5.
Additional resources are available from UCOP:
A Department may only proceed with contracting out for SX or EX covered services work after all staffing options have been determined to not be feasible and approval has been granted by the local Labor Relations Office. The Contracting Out Request Form should be submitted before requesting a requisition. This form is used to collect specific information from the department regarding their service needs. This includes:
Whenever possible we advise first reaching out to the department that normally performs these services to see if they can accommodate your request. If they are unable, you will begin the process of Contracting out by reaching out to Labor Relations.
Once you have identified the need, we highly recommend starting the process 3 months in advance or ASAP. There are many steps in the process including approval from Labor Relations, notification to the union, agreement with the supplier to compensate their staff the appropriate wage, and registration with AgileOne to track staff.
To begin the contracting out process determine if there is a UC San Diego department can assist with your needs. If they can provide the support needed a carve out is not required.
If they are unable to complete your service in house please keep in mind that documentation will be needed. To gather proper documentation please complete the following steps:
Please note exemptions to the policy will be rarely granted. Reduced cost is not an acceptable justification.
Contracting out for work normally performed by SX or EX-covered employees is only allowed if the circumstances meet one of the rigid exceptions contained in Article 5 of the collective bargaining agreements.
Depends on the statement of work, quantity of hours, and total needed. Over 100K = Competitive Bid, LR and AFSCME approval
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.
Service contracted workers must be provided wages and benefits of equivalent value to those provided to SX and EX bargaining unit employees performing the same or similar work at the location where the work is being performed or the nearest University location if there are no bargaining unit employees performing the same or similar work at UC San Diego.
A Wage Benefit Parity (WBP) form is a document that helps ensure supplier staff are being paid an appropriate wage to what a UCSD employee would be paid to do the same work. This is an hourly rate of labor and benefits.
Rates can either be embedded in the PO or they can be attached separately in a WBP Appendix Template. However, it is recommended that the WBP Appendix Template is used in order to ensure suppliers are fully aware of the rates and so that UC has a counter-signed document. If a supplier has a WBP form on file it is possible that we can reuse it.
If the Appendix Template is not used, the department must ensure that WBP rates are formatted within the PO to be prominently displayed and communicated. Please keep in mind that the rate of pay is subject to change based on what the University is paying its staff at the time. It is also recommended that departments follow up with suppliers in writing, separately, and obtain acknowledgment of the new rates, in case of future contract compliance issues.
UC Office of the President provides the wage and benefits parity rates for all SX and EX job titles annually. The relevant wage and benefit parity rate are determined during the contracting out approval process. During the procurement process, the supplier is required to sign a Wage & Benefits Parity Appendix which contains the minimum hourly rate they must pay their employee.
Normally new WBP rates comes out sometime in April but with an effectivity date of June 1.
1. Compensation Notice: Vendors must provide employees assigned to perform covered services for the University with written notice of their total compensation rate, hourly pay rate, and the hourly value of employer-provided benefits. This notice must be given at various times, including upon assignment, annually in January, and within seven days of any changes to the employee's hourly pay rate.
2. Basic Payroll Information: Vendors are required to provide UC with basic payroll information for all vendor supplied employees who have performed services for the University in the preceding six-month period. This information includes employee names, job titles, contact information, hourly pay rates, and benefits values. This information must be shared with the University and joint labor-management committees twice a year, in January and July. Employees must be informed that this information will be shared.
3. Audits and Findings: Vendors must comply with audits, verifications, notices, reports, or findings related to employee compensation and compliance with the total compensation rate required by contracts or university policies. These audits or findings must be shared with the University and joint labor-management committees.
4. Unlawful Compensation: Vendors are prohibited from accepting payment from the University if they pay employees less than the total compensation rate specified in their contracts with the University or as required by university policy.
The vendor will need to provide a retroactive payment to the employee to match UC requirements.
If the contractor refuses to meet the requirements of the policy, then the contract must be terminated.
Utilizing a deactivated supplier may cause more issues. If the non-compliance aspects are not addressed the supplier must not provide services if they are non-compliant. Employees who fail to follow these guidelines may be subject to disciplinary action.
Failure to comply with Article 5 and Regent Policy 5402 may cause the University to be subjected to unnecessary grievances, arbitrations, and Requests for Information.
Departments must secure Procurement and Labor Relations approval to contract out for Covered Services (SX & EX) work PRIOR TO issuing or executing an RFP, purchase order, change order, P-Card payment, Non-PO Payment request or master services agreement. Otherwise, this is considered an unauthorized/after-the-fact purchase.
Procurement will not be able to issue a Purchase Order without proper documentation. We understand that missteps can happen and, in this instance, we still recommend following the “Contracting Out” procedures, so that proper documentation and notification can be obtained to issue a Purchase order.
As outlined in Section D of Article 5, the Collective Bargaining Agreement, UC must provide notice to AFSCME 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.
AFSCME has the right to refuse a covered services carve-out request.