Why does this new regulation apply to the University of California, Berkeley?

As a federal contractor, the University of California is required to establish and maintain an affirmative action program that includes good faith efforts to ensure that women and minorities can compete for jobs on equal footing with other applicants and employees. Proposition 209, approved by the majority of Californians who voted in November 1996, banned the use of race, religion, sex, color, ethnicity, or national origin as criteria in its employment practices. However the proposition permits “action which must be taken to establish or maintain eligibility for any federal program, where ineligibility would result in loss of federal funds to the state.” Since the University of California is a federal contractor, it is required to maintain an affirmative action program to retain eligibility for federal funds.