Contracting Out for Services

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, in 2019 the UC Board of Regents implemented Regents Policy 5402: Policy Generally Prohibiting Contracting for Services, which generally prohibits the contracting out of covered services. Contracting for services where work is traditionally performed by UC employees is generally prohibited and can only be allowed under very narrowly defined circumstances consistent with UC principles, applicable laws and collective bargaining agreements.

As such, contracts that include covered services will only be allowed sparingly and will require demonstration that all other options to utilize UC Merced staff have been exhausted.

Furthermore, Article 5 of the UC-AFSCME (SX-Service & EX-Patient Care Technical) labor agreements reinforce, and in some cases go beyond, the Regents Policy. Article 5 of the AFSCME collective bargaining agreement takes precedence over the Regents Policy, and the information on this website reflect that.

Quick Links

• At A Glance
• SB820 State Funded Buildings
• General Requirements
• Food Services
• UC Merced Lakeside Catering
• Request for Policy Carve Out
• Options and Alternatives
• Human Resources - Contracting Out Information

At A Glance

Departments, student groups, or individuals may not hire or reimburse non-UC entities for services traditionally performed by AFSCME-represented staff. This includes, but is not limited to:

• Custodial/janitorial services
• Food preparation and service (e.g., onsite catering, including food trucks or coffee carts)
• Groundskeeping and landscaping
• Facilities support or maintenance work

Reimbursements will not be approved for services performed by outside vendors that fall within the scope of work covered by AFSCME-represented employees.

Why This Matters

• Legal Compliance: Outside vendors are subject to the same wage and benefit parity requirements outlined in Regents Policy 5402 and California Senate Bill 27 (SB 27).
• Liability Risk: Unauthorized contracting of outside vendors may lead to civil penalties, audit findings, or other legal consequences—for both the university and the individual or department involved.
• Required Reporting: Any covered service must be processed through the AgileOne system, including tracking of hours and assignment information, to ensure transparency and compliance. This is reported up to the Office of the President and California state offices.

Reimbursement Guidelines

• Out-of-pocket payments for these covered services will be denied, as informed by UC systemwide contracting policies and California Senate Bill 27 (SB 27)
• This applies to reimbursement requests, P-Card and T&E transactions, and direct vendor payments.

SB820 State Buildings

SB820 imposes significant restrictions for contracting out in buildings that have received capital state funding. As a condition for UC Merced receiving state capital funding, contracting out for covered services is not permissible. There are no exceptions. In addition, the Chancellor must submit Certifications to the State on an annual basis that no outsourcing of covered services occurred in any SB820 building.

Once a building has received state capital funding, it will always be deemed an SB 820, even after the capital improvement project is completed.

Non-Compliance. Failure to comply with SB 820 may cause the University and the entire UC System to lose critical, invaluable state capital funding and subject the UC System to extreme scrutiny and additional measures for receiving state funds.

General Requirements

Policy 5402 and AFSCME Service (SX) and Patient Care Technical (EX), collective bargaining agreements impose significant limitations on the use of third-party supplier for covered services. Under these requirements, contracting out can only be used as a last resort to address temporary needs.

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:

• Cleaning, custodial, janitorial, or housekeeping services
• Food services
• Laundry services
• Grounds keeping (specialized beyond current capabilities)
• Building maintenance (specialized beyond current capabilities)
• Transportation and parking services
• Security services
• Billing and coding services
• Sterile processing
• Hospital or nursing assistant services
• Medical imaging or other medical technician services

Departments must first explore all UC Merced staffing options before contracting out unless the circumstances meet one of the rigid exceptions outlined in the collective bargaining agreements. Departments must complete the Contracting Out Justification Form (COJF) to contract out for Covered Services (SX & EX) before a purchase order, change order or master services agreement is issued.

Food Services

What You Should Know

Full-Service Catering consists of:

• Menu options and food preparation;
• Dining set-up: tablecloths, chafing dishes, serving utensils, plates, napkins, etc.;
• Food service: serve food from buffet, tableside, or tray; and
• Clean Up: take away all food service-related items when the event has concluded;

The following options are not considered full-service catering and are permissible alternatives to full-service catering or contracting out:

• Takeout: food is picked up from an offsite restaurant or food provider.
• Delivery: food is delivered by an offsite restaurant or food provider and dropped off on campus. No set-up is involved.

What You Should Do

• Use UC Merced’s Lakeside Catering for all on-campus catering needs.
  • To ensure compliance with Regents Policy 5402 and AFSCME Article 5, events at a UC Merced owned or leased facility requiring full-service catering must secure services through UC Merced Lakeside Catering Services. If UC Merced Catering is unable to provide the required services, and the department has considered and exhausted all other staffing options, the department may initiate the Contracting Out Justification Form (COJF).
• Never engage an outside vendor for any AFSCME-covered work without contacting Procurement & Contracting Services first.
• For drop-and-go food delivery, order only from the following pre-vetted local vendors:

Examples

UC Merced Lakeside Catering Services

UC Merced Lakeside Catering Services must be given the opportunity to provide full-service catering before a department seeks an external supplier. Visit the Catering Services website for details on how to submit a request for full-service catering.

If UC Merced Catering Services is unable to fulfill your request for full-service catering, the department may initiate the Contracting Out Justification Form (COJF). The COJF must include written confirmation that Catering Services is unable to provide the services request.

Request for Policy Carve Out/Exception (NOT Applicable to SB820 Buildings)

Article 5 of the Collective Bargaining Agreement provided guidance for the Regents Policy that explains that contracting for covered services is only permitted under one of the following extenuating circumstances:

• Required by law, grants and/or court decisions.
• An emergency which creates a safety risk or jeopardizes University operations.
• Equipment and/or employees with the necessary expertise to perform the service are not available at the University location.
• Services are incidental to a contract for purchase or lease of real or personal property.
• Urgent, temporary, or occasional need so regular processes cannot be used.
• Remote facility – not within 10-mile radius of campus, medical center, or lab.
• Services are performed by registry personnel in clinical operations to address short-term staffing needs.

Approval Process

A Department can only proceed with contracting out for SX or EX work after all staffing options have been considered and determined not feasible. To initiate the process, the department must complete the Contracting Out Justification Form (COJF) before submitting a requisition or ServiceNow request. The COJF is used to collect specific information from the department regarding their service needs. This includes:

• A detailed explanation of all staffing options (e.g. overtime, out-of-class assignment, limited term appointment) considered and why they are not feasible;
• A detailed justification for why contracting out is required, the specific exception(s) used to justify the request, and a narrative justification explaining why the exception(s) applies;
• Detailed scope of work;
• Work location, if known; and
• Dollar value of contract.

Failure by a department to provide detailed justification may delay processing. The Department must attach a copy of the COJF to the requisition or ServiceNow request.

Notice Requirements

Refer to https://hr.ucmerced.edu/hr-units/employeelabor-relations/contracting-out for additional information

Options and Alternatives

Contracting out should be used sparingly and treated as an option of last resort to address temporary needs. Managers and supervisors shall explore all options for completing work with UC Merced staff before considering or requesting a third-party supplier. Temporary staffing options include overtime, out-of-class assignment, and limited-term appointments.

UC Merced Human Resources Employee & Labor Relations and the Talent Acquisition team may be contacted for consultation on these alternatives.