Restrictions for Contracting with Independent Contractors/Consultants

The California Contract Code regulates our use of independent contractors/consultants and imposes penalties on individuals and entities that violate its restrictions in the following areas:

Public Contract Code - Section 10515-10518 (formerly Senate Bill 1467) established new restrictions, with severe penalties for violation in the areas of:

• Purchasing, leasing, or renting goods or services from UC employees
• Awarding successor contracts or follow-on agreements to consultants or other entities based upon recommendations they previously provided to the university
• Contracting with former UC employees as independent contractors to perform work related to contracts that were planned, negotiated, or executed prior to their separation, or the employee was in a policy-making position involving the subject matter of the agreement

Employee contractors

• UC employees (excluding those with teaching or research responsibilities) may not contract with any university department to provide goods or services as independent contractors. There are no exceptions.
• University departments requiring the services of an existing UC employee should work with Human Resources, Academic Personnel or Payroll 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, as well as Academic Personnel policy

To view examples of typical situations, please see Examples of Restrictions for Contracting with UC Faculty/Staff

Successor contracts

• Consultants who have performed work in the past for the university cannot participate on subsequent projects relating to the findings or recommendations they previously provided to the university
• 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 the new law. Please contact Andrew Calderon, 949.824.1942, for direction.

Contractors who are former UC employees

Public Contract Code - Section 10515-10518 restricts contracting with former UC employees based on the following:

• Former UC employees cannot be independent contractors for two years from the date of separation to perform work related to contracts in which they engaged in any negotiations, transactions, planning, arrangements, or any part of the decision making process relevant to the contract while employed in any capacity by any university department
• Former UC employees cannot be independent contractors for one year from the date of separation to perform work on a contract if they were employed by that department in a policy-making position in the same general subject area as that contract
• You may be able to rehire, as an employee, a retired UC employee. UCI departments requiring the services of a retired UC employee should consult with their representative in Human Resources
• Departments requiring the services of a former UC employee should consult with the Purchasing Department to determine whether the former employee is subject to the prohibition

Penalties

There are serious penalties, including personal criminal sanctions, for non-compliance with Public Contract Code - Section 10520-10526. They include the following:

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