Offshoring California University Contracts

In the California Public Contract Code, there is a general prohibition of “offshoring” University of California and California State University contracts under Division 2, Part 2, Chapter 3.9.

Section 12147 prohibits the UC and CSU from contracting for services with a contractor or subcontractor unless that contractor or subcontractor certifies in his or her bid for that contract that the contract, and any subcontract performed under that contract, will be performed solely with workers within the United States; and describes in his or her bid any parts of the work that will be performed by workers outside of the United States.

If the UC or CSU enters into a services contract with a contractor whose bid indicates that specific work will be performed by workers outside of the United States, the UC and CSU are prohibited from displacing an employee performing that specific work. In addition, neither the UC nor the CSU may expend funds to train service contract employees located in foreign countries or train service contract employees who plan to relocate to a foreign country as part of the service contract, if that service contract displaces an employee of the UC or CSU.

A contractor violates this law only to the extent that he or she fails to note in a bid any work to be accomplished by workers outside of the United States. The UC and CSU violated this law only to the extent that the UC or CSU displaces an employee performing that specific work after having been notified in the contractor’s bid that the specific work would be performed by workers outside of the United States.

The term “displaced” is defined. The UC and CSU can contract with an entity that utilizes workers in offshore operations in circumstances that do not directly result in the displacement of an employee of the UC or CSU.

In addition, this chapter does not apply to a contract if refusing to award that contract, on the basis that the contractor or subcontractor does not certify under penalty of perjury that the contract, and any subcontract performed under that contract, will be performed solely with workers within the United States, would violate the specific terms of the Agreement on Government Procurement of the World Trade Organization or any other bilateral or regional free trade agreement that California has consented to.

Note that this chapter does not apply to contracts relating to study abroad programs conducted by the UC or CSU, nor to contracts relating to international teaching, research, or public service activities and projects conducted by the UC or CSU.