Cost Benefit Analysis
State wastes more than $300 million, contracting out
The New York State Public Employees Federation (PEF) today released its annual report on the high cost of contracting out work that could be done by state employees for far less. The report reveals the state increased spending on contracting out by more than $285 million while spending on state employee salaries decreased by $395 million.
“The state is in no position to waste millions,” said PEF President Ken Brynien. “Yet that’s exactly what is happening year after year as the state continues the costly practice of relying on outside contractors to do the work state employees can do for less, even when the cost of state employee benefits are included in the price.”
The average consultant cost the state $73.63 per hour last fiscal year, which is 40 percent more than it costs to pay state employees in comparable jobs. The state could save up to $316 million each year simply by replacing some consultants, such as information technology developers, designers and installers, bridge inspectors and accounting and auditing services.
“Significant savings could be achieved by comparing the costs before committing to consultant contracts, much the way each one of us compares costs in our daily lives whether shopping for groceries or a car,” Brynien said.
PEF is calling on state legislators to pass cost-benefit analysis legislation (S3093/A5128-A) sponsored by Senator Joe Robach and Assemblyman Harry Bronson. The bill would simply require state agencies to do a cost comparison before awarding contracts, to determine if state employees could do the same work at a lower cost.
“We are well aware of the need for private consultants on short-term projects,” Brynien added. “But continually contracting out for bridge inspectors, engineers, architects and information technology consultants is an insult to every taxpaying citizen of this state. It is a proven fact, this work can be done in-house by state employees at a much greater savings and it’s high time we start taking advantage of these savings.
“The Cuomo administration has agreed to convene a joint committee as part of our current contract to discuss these issues. We are hopeful this joint committee will agree on measures to reduce unnecessary use of consultants and save the taxpayers millions,” Brynien said.
This is the first of a series of reports PEF will release in coming weeks to document the state’s wasteful contracting practices.
State Workforce Down, Consultants on the Rise and Costing State More
The New York State Public Employees Federation (PEF) today released its second in a series of reports on how much money the state wastes by relying on costly consultants to do the work state employees can do for less.
The most recent report, "New York's Consultants: The Invisible Workforce," reveals that from fiscal year 2008-09 to 2011-12, the state hired at least 1,300 additional consultants, for an increase of 24 percent while decreasing the state workforce by more than 14,000 employees. And it cost the state much more money than having state employees do the same work even with the costs of benefits included.
"The state continues to waste the most money hiring consultants to do work on engineering and information technology, work that will always be there and work our members can do for far less," said PEF President Ken Brynien.
The state paid between $133.31 and $239.67 per hour for some information technology consultants. State employees are paid an average of $55.72 per hour, including benefits to do the same work. It gets worse when you factor in consultant costs for accountants and auditors. Some consultants are paid $204.72 per hour, while state employees are paid $52.82 per hour for the same work.
"There are millions in savings to be had," Brynien added. "We will continue to push the Legislature to pass the cost-benefit analysis bill (S3093/A5128-A) sponsored by Senator Joe Robach and Assemblyman Harry Bronson. The bill requires state agencies to do a cost comparison to determine whether state employees could do the same work at a lower cost. Our research continues to prove we can do the work for less."
The report: "New York's Consultants: The Invisible Workforce," details how many consultants the state employed over the past several years, which agencies rely on consultants the most, what services the consultants provide, the agencies and consulting services with the greatest growth and the type of consultant companies with the largest contracts with the state.
PEF reveals savings of $99 million a year
The New York State Public Employees Federation (PEF) today released its third in a series of reports on how much money the state wastes by relying on costly consultants to do the work state employees can do for less.
The report, "New York State's contracting out IT consultants: A plan to save $99 million by reducing IT consultant waste," reveals the state spent $419.7 million on information technology consulting services in state fiscal year 2011-12. If the state had hired state employees to replace about half of its IT consultants, the state would have saved $99 million a year.
"The average IT consultant costs at least $89 an hour," said PEF President Ken Brynien. "That amounts to 59 percent more than comparable state IT employees, including the cost of their benefits."
The largest increase in any IT consultant spending category was for software maintenance which increased by 189 percent over the past 8 years. And when you look at hourly rates, the state Department of Taxation and Finance charged the state as much as $275 an hour for IT consultants.
"The quickest way for the state to reduce its IT consultant costs is to first focus on reducing the need for IT staff augmentation consultant contracts," Brynien said. "State agencies must include and enforce knowledge transfer provisions in all IT consultant contracts through the greater use of peer mentor training which is commonly used by private industry."
PEF is continuing to push for passage of the cost-benefit analysis bill (S3093/A5128-A) sponsored by Senator Joe Robach and Assemblyman Harry Bronson. The bill has passed the Assembly May 16. It requires state agencies to do a cost comparison to determine whether state employees could do the same work at a lower cost.
Size of DOT workforce goes down as state relies more on costly consultants
The Department of Transportation (DOT) is one of the top four agencies that relies on consultants to do work state employees can do for less. And, the state is continuing toward a costly pattern of hiring more consultants while allowing the number of DOT employees to hit an all time low.
“Staffing levels at DOT have hit a historic low point, decreasing by more than 16 percent since 2008,” said PEF President Ken Brynien. “Yet spending on costly consultants has increased at a time when the state can least afford to be wasting millions of taxpayer dollars.”
PEF’s latest report on taxpayer waste, “The Road to Saving $90 Million,” reveals the state can save more than $90 million annually by replacing most of its DOT consultants with state employees, including the cost of benefits.
DOT engineering consultants in particular are costing the state more. Consulting engineers bill DOT at an average hourly rate of $102 per hour compared to the DOT hourly rate of $58.36, including benefits. By paying this higher rate the state is wasting nearly $99,000 every time a full-time consultant engineer is hired instead of a state employee engineer.
“We are calling on the state Division of Budget (DOB) to direct DOT to immediately begin to have all state employee engineers and technicians do 90 percent of bridge inspection work in-house by 2014-15,” Brynien said. “This is one of the fastest growing categories of DOT consultant spending and it is regularly scheduled routine work that our members can easily do at far less cost to the state.”
PEF is continuing to push the Senate to pass the cost-benefit analysis bill (S3093-A/A5128-B) sponsored by Senator Joe Robach and Assemblyman Harry Bronson. The bill, which has already passed the Assembly, requires state agencies to do a cost comparison to determine whether state employees could do the same work at a lower cost.
PEF: State Health Department bingeing on high-cost consultants; Union calls on NYS Senate to pass bill to control wasteful spending
State taxpayers are losing money every day the state continues to rely on high-priced consultants to do work that state employees can do for less.
The NYS Public Employees Federation (PEF), released today a new study showing the state Health Department could save $41.7 million this year if it just cut its reliance on private consultants by half.
PEF is pressing the New York State Senate to pass a bill that would require state agencies to forgo hiring private consultants if state employees can do the work for less.
“The state Assembly has passed this bill (A5128-B/S03093B), and we urge Sen. Majority Leader Dean Skelos to bring it to the floor for a vote in that house before the session ends in a couple of weeks,” said PEF President Ken Brynien.
“State leaders say they want to reduce state waste and control expenses, but records show the state Health Department is becoming increasingly dependent on costly consultants while it steadily reduces the ranks of its more economical state employees,” Brynien said.
PEF found DOH’s spending on its own workforce dropped by 13 percent from fiscal year 2009-10 to FY 2011-12, but its spending for consultants went up by 28 percent in that same two-year span.
Those two years were no anomaly. Since FY 2006-07, the DOH has larded on 93 percent more consultants and cut its own workforce by 12 percent.
“If you think of the dollars as calories, the DOH has gone on a fast-food binge, and it’s overdue for an ‘extreme makeover,’” Brynien said.
Consultants cost DOH an average of $72.05 per hour and that’s 36 percent more than the department’s own employees who do the same kinds of work for an average of $53.07 per hour and that includes the cost of their benefits and pensions.
If you compare specific cases, the evidence can get even more dramatic. DOH is paying $122 per hour for the services of an information-technology consultant, compared to just $53.39 per hour for its own IT specialists.
This PEF report on consultant spending at the DOH is the fifth such report released in recent weeks by the labor union, which represents nearly 54,000 professional, scientific and technical employees of the state, including more than 3,000 at DOH.
PEF has found state agencies waste more than $300 million annually by hiring private consultants to do work that could be done as well and more economically by state employees.
"NY Needs To Stop It's Addiction To Waste," is available on the PEF website at www.pef.org.
A Sources and Methodology Appendix for this report is also available.
PEF calls on state agency for children and families to account for wasting $9.5M
ALBANY - The state Office of Children and Family Services (OCFS) could have saved taxpayers $9.5 million last year if it had cut its dependence on costly private consultants by half and let its own employees do the work, instead. That's the finding of a new report released today by the NYS Public Employees Federation (PEF).
"New Yorkers cannot afford this irresponsible waste of their hard-earned dollars," said PEF President Ken Brynien. "It's high time the state Senate passed bill (A5128-B/S3093A) that would require state agencies to compare costs and use state employees when they can do work more economically then private consultants. Enacting this law, passed previously by the Assembly, would finally begin to bring down the quarter of a billion dollars state agencies are now wasting every year on private consultants.
The report on consultant spending at OCFS is the sixth in a series of such studies PEF has released this spring, aimed at spotlighting wasteful state spending on private consultants.
PEF found OCFS spent $161.7 million on consultants in the state fiscal year that ended March 31, an increase of 30 percent in just eight years.
OCFS' prime training contractor, the Research Foundation of the State University of New York, has paid its "chief executives" up to $251 an hour for short-term contracts. That's the equivalent of $488,000 a year. On average, the foundation's consultants with the title chief executive are paid $157 per hour, or the equivalent of more than $307,500 a year. That's more than 50 percent higher than OCFS pays its own commissioner.
A Sources and Methodology Appendix for this report is also available