PEF “GO PUBLIC” BILLS

S6575/A1259- Cost/benefit analysis of contracts

• This bill requires that, before a state agency enters into a contract for personal services, it must first conduct a cost/benefit analysis to see if the contract will save money as compared to doing the work in-house with state employees.

• Contracts affected: contracts by state agencies for personal services.

• Agencies affected: state departments or other agencies performing governmental functions for the state. Does not apply to local governments.

• Exceptions- cases in which an agency can enter into a contract without doing a cost/benefit analysis:

Ø Highly specialized services that cannot be performed by state employees due to technical requirements.

Ø Services incidental to a purchase or lease of property or equipment, such as a service contract for office equipment.

Ø Where the goals of a program cannot be achieved by using state employees, for example where an independent review is required.

Ø Outside counsel, where the Department of Law cannot represent an agency due to a conflict.

Ø The services are needed in a location where the state cannot reasonably provide them with its own employees.

Ø Training services for which no state employees are qualified.

Ø Services which are urgent, temporary or occasional, where it is not practical to employ staff to perform them.

Ø The agency demonstrates a quantifiable improvement in quality of services that cannot be achieved with state employees.

• In conducting the cost/benefit analysis, the agency is required to consider several specific factors in order to make sure it considers all of the relevant costs and benefits in a fair comparison- a “level playing field”.

• If the agency conducts its analysis and can demonstrate actual cost savings, it is not prohibited from entering into the proposed contract.

• The agency’s findings and relevant contract data must be kept on record and available to the public under the Freedom of Information Law.