If you request contracts with independent contractors or consultants for your department, you need to know how Senate Bill (SB)1467 amends Public Contract Code and significantly restricts current contracting practices.

SB 1467 establishes restrictions, with severe penalties for violation, in the areas of:

• Contracting with former UC employees as independent contractors to perform work related to contracts that were planned, negotiated, executed, or involving policy created by the employee before the employee's separation from UC
• Purchasing, leasing, or renting goods or services from UC employees
• Awarding successor contracts or follow-on agreements to entities providing consulting to the university

Employee contractors

• University departments cannot contract with current UC employees to provide goods or services as independent contractors. University departments requiring the services of an existing UC employee should work with Human Resources to compensate the employee through the payroll system.
• UC employees with teaching or research responsibilities may be exempted. However, they are still subject to University guidelines for Employee-Vendor Relationships.

Contractors who are former UC employees

• SB 1467 restricts contracting with former UC employees based on the following:
  • Former UC employees cannot be independent contractors for 2 years from the date of separation to perform work related to contracts they planned, negotiated, or executed.
  • Former UC employees cannot be independent contractors for 1 year from the date of separation to perform work on a contract if they were employed by that department in a policymaking position in the same general subject area as that contract.
  • You may be able to rehire, as an employee, a retired UC employee. UCSD departments requiring the services of a retired UC employee should consult with Michael Yates, (858) 822-2583, in Human Resources.

Successor contracts

• Consultants who performed work for the university cannot participate on subsequent projects relating to the previous contract's findings or recommendations.
• If you are planning to contract with a consultant with the expectation that the same consultant could perform work related to the findings, this follow-on contract may not be allowable under this law. Please contact Patrick Little, (858) 534-4439, in the Purchasing Business Contracts Office for direction.

Department Order edits in FinancialLink

• To ensure compliance with these restrictions, IFIS systematically imposes these edits on all Department Orders:
  • If the vendor is currently employed or was employed by UCSD within the past two years, IFIS prohibits the completion of the order.
  • If the vendor is a person, not a company, and the commodity code is P0116 (Professional Services), IFIS displays a warning and suggests using a High Value Purchase Requisition.
• If you are trying to process a Department Order and receive one of these messages, contact Patrick Little, (858) 534-4439, in the Purchasing Business Contracts Office for instructions.

Penalties
SB 1467 imposes serious penalties, including personal criminal sanctions, for non-compliance. They include the following:

• Voided contracts: Every contract or other transaction entered in violation of SB 1467 is void.
• Felony: An officer or employee of the University of California who knowingly engages in a transaction prohibited under SB 1467 may be guilty of a felony.
• Felony: A contractor to the University of California who knowingly engages in a transaction prohibited under SB 1467 may be guilty of a felony.
• Monetary liability: Persons convicted under SB 1467 may be liable for monetary damages.

Questions? Contact Patrick Little, (858) 534-4439.