PEF Identifies $300 Million in Savings

ALBANY, NY -- The New York State Public Employees Federation (PEF) released new research today that identifies savings of $300 million annually if the state takes reasonable steps to reduce the excessive use of consultants.The state spent $2.8 billion on consultant services in SFY 2010-11. The majority of the billing went to information technology (IT) and engineering services for work that cost an average of 70 percent more than what it costs to have state employees do the same work, including the cost of state employee benefits.

"Too often state agencies rely on costly contractors for services due to the lack of sufficient in-house staff, even though in-house staff is usually the most cost effective solution," said PEF President Ken Brynien. "The situation has been exacerbated by years of attrition and hiring freezes.

"The best example of the state's wasteful spending on engineering consultants is the bridge inspection program. State and federal law require the inspections at least once every two years. The Department of Transportation complies with these requirements by using a blend of in-house staff and consultants even though their own studies show consultant inspectors cost up to 50 percent more than state employee inspectors," Brynien said.

The average hourly rate for an IT consultant is 77 percent more than the average state employee hourly rate.

"We have long acknowledged there is a need for private consultants on short term projects," Brynien added. "But on continuing work such as bridge inspections and IT services the state is needlessly wasting millions of taxpayer dollars.

"The governor has announced several efforts to identify and reduce state waste through mergers and consolidations. The potential benefits of reducing the state's reliance on consultants and contractors must be a part of the savings strategy," said Brynien.

PEF is urging 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 to determine whether state employees could do the same work at a lower cost.

Consultants – Cost Benefit Analysis

Statement of PEF President Kenneth Brynien on Renewed Threat of Layoffs

Albany - It is irresponsible for the Paterson administration to suggest the possibility of layoffs within the state workforce when it is still unclear how many state employees will be leaving state service through the early retirement incentive (ERI).

The director of the state Divison of Budget (DOB) is quoted in the press suggesting the early retirement program may fail to reach a savings goal of $250 million and if that is the case, plans for layoffs may have to be developed. Before deeming the ERI a failure, the DOB should, instead, be pressuring its agency directors to fully comply with the program.

As was the case with the voluntary severance program offered earlier this year, many PEF members who were willing to leave state service were denied the opportunity to participate in the program. We anticipate the same will hold true for the ERI.

It's unnecessary and irresponsible to threaten to layoff state employees at a time when so many people are turning to state services during these difficult financial times. We call on the Paterson administration to focus on making the ERI program a success, rather than planning for failure.

In addition, PEF reminds the governor of the millions the state could save by relying less on high-priced consultants when research proves state employees can often do the same work for less. One step in the direction of realizing recurring savings is passage of the cost-benefit analysis bill. The bill has already passed in the Assembly. It would require a cost-benefit analysis before contracting out state services. PEF is calling on the Senate to stop taypayer abuse and pass the cost-benefit bill.

PEF calls for investigation into DOT consultant spending and conflicts of interest

Albany - The New York State Public Employees Federation (PEF) calls on the state Inspector General and the Legislature to investigate the Department of Transportation (DOT) as it continues to waste millions of taxpayer dollars hiring private consultants to do work state employees can do for much less.

“It is not uncommon for DOT regional directors, chief engineers, and other high ranking DOT management to find employment with engineering firms that receive significant consulting contracts from DOT,” said PEF President Kenneth Brynien. “This may explain why DOT has made no progress in reducing its reliance on consultant engineers.

“We are asking the Inspector General and Legislature to investigate the post-state employment practices of upper DOT management to determine whether they comply with the current ethics laws, and whether or not current ethics laws provide adequate protection against conflict of interests in DOT’s consultant contracting process,” Brynien said.

PEF has discovered the DOT consultants failed to account for more than $250 million of their expenditures in state fiscal year 2008-09. The department increased consultant spending by $9 million last year and $79 million since 2004.

“The DOT habitually contracts out for engineering-related expenditures, including project design, construction inspection and bridge inspection knowing it costs significantly more. The department is required by law to make its consultants disclose specific costs associated with these contracts, yet more than half of DOT consultant engineering expenditures in the last fiscal year were simply not accounted for. It’s no wonder there is a budget gap. Imagine trying to operate a business without knowing what your employees spend your money on,” said Brynien.

"Time and again, DOT has failed to reign in its wasteful spending practices. If we are ever going to get New York's fiscal house in order, we must begin with cutting inefficient spending right in our own backyard," said State Senator and Deputy Majority Leader Jeffrey D. Klein, Chair of the Senate Task Force on Government Efficiency.

“For the last decade, I have been a strong advocate of replacing consultants with state employees when it can be shown to save the state money. I am particularly disappointed with the Department of Transportation's lack of progress and failure to reduce their use of consultants,” said State Senator Neil D. Breslin.

The state is currently in one of the worse fiscal crises since the Great Depression, yet overall spending on consultants increased by more than $36.6 million last fiscal year totaling $2.925 billion.

“It is unconscionable that DOT has failed to take any meaningful steps to reduce its reliance on costly consultants even though consultants cost up to 150 percent more than state employees who do the same work,” Brynien said.

“DOT could save up to $84.3 million annually by replacing most of its engineering consultants with state employees.

“Last weekend the engineering firm hired for the $42 million Exit 6 bridge replacement project in Latham added four more consultants to cover work scheduled to be done by two state employees. The governor’s new policy eliminating most state employee overtime now means the state will spend more money on higher-priced consultants to do the work state employees could have done for less,” Brynien added.

Based on what PEF has uncovered, it is clear the state could save hundreds of millions of dollars by performing cost-benefit analysis prior to contracting out for consultant services. PEF is encouraging the passage of the cost-benefit bill (A9934/S7011) introduced by Assembly Member Susan John and Senator Jeffrey Klein. The bill requires agencies to perform a cost-benefit analysis prior to contracting out for consultant services in excess of $500,000 annually.

PEF’s examination of DOT consultant engineering contracts shows that DOT wastes million in every region of the state. Below are just a few examples of expenditures for bridge inspections or design services in the last fiscal year 2008-09:

Capital District – Civil Engineering bridge inspection work billed at $112 per hour for a total of $1.2 million. We estimate that DOT engineers could have done the work for $536,000 for a savings of almost $700,000. (Contract #D030511 for Bi-annual and interim bridge inspection in Capital District).

Mohawk Valley – Civil Engineering bridge inspection work billed at $86.02 per hour for a total of $799,000. We estimate that DOT engineers could have done the work for $463,000 for a savings over $300,000. (Contract #D030512 for Bi-annual and interim bridge inspection in the Mohawk Valley region).

Central NY – Civil Engineering for design services work billed at $97.62 per hour for a total of $304,000. We estimate that DOT engineers could have done the work for $155,000 for a savings of nearly $150,000. (Contract #D025401 design work related to rehab of three bridges and I-81 in central NY).

Genesee Valley – Civil Engineering bridge inspection work billed at $103 per hour for a total of $513,000. We estimate that DOT engineers could have done the work for $246,000 for a savings of $266,000. (Contract #D030514 for Bridge Inventory and Biannual Bridge Inspection in the Genesee Valley).

Western NY – Civil Engineering for design services work billed at $95.03 per hour for a total of $302,000. We estimate that DOT engineers could have done the work for $158,000 for a savings of nearly $143,000. (Contract #D025601 for design work including rehab of bridge ramp for NY RT 33).

Central Southern Tier – Civil Engineering bridge inspection work billed at $90.77 per hour for a total of almost $300,000. We estimate that DOT engineers could have done the work for $166,000 for a savings of $133,000. (Contract #D030516 for Biannual Bridge Inspections in the Central Southern Tier).

North Country – Civil Engineering design services billed at $98.06 per hour for a total of $230,000. We estimate that DOT engineers could have done the work for $117,000 for a savings of $113,000. (Contract #D015454 for design work in North Country).

Hudson Valley – Civil Engineering bridge inspection work billed at $97.16 per hour for a total of $1.33 million. We estimate that DOT engineers could have done the work for $724,000 for a savings of $614,000. (Contract #D030517 for Bi-annual and interim bridge inspection in the Hudson Valley).

Southern Tier – Civil Engineering bridge inspection work billed at $92.17 per hour for a total of $1.7 million. We estimate that DOT engineers could have done the work for $870,000 for a savings of $824,000. (Contract #D030518 for Bridge Inspections in Southern Tier).

Long Island – Civil Engineering bridge inspection work billed at $130.50 per hour for a total of $613,000. We estimate that DOT engineers could have done the work for $234,000 for a savings of $378,000. (Contract #D015612 for Bridge Inspections in Long Island region).

New York City – Civil Engineering bridge inspection work billed at $100 per hour for a total of $3.4 million. We estimate that DOT engineers could have done the work for $1.7 million for a savings of $1.7 million. (Contract #D015608 & D015610 for Bi-annual and interim bridge inspection in the Bronx and Queens).

Using just this small sample, the state could have had an additional $5.3 million to use on road and bridge maintenance and repair if DOT engineers were used rather than costly consultants.

Consultant Reduction Report

Letter to state Inspector General Fisch

PEF continues to focus on making government more efficient - Governor focuses on punishing state employees

Albany - The governor stated today he is putting together a plan to layoff state employees. He continues to say his priority is to save the state money, but it appears his real priority is punishing the state work force.

There are other alternatives. In fact, just last week, Judge Lawrence Kahn agreed with PEF that the state needs to explore alternatives to employee givebacks.

“PEF remains willing to work with this governor to achieve the savings in state operations necessary to balance this budget,” said PEF President Kenneth Brynien. “Our suggestions include ways to make state government more efficient by reducing the reliance on higher-priced private consultants and allowing state employees to do the work for less.

“Unfortunately, the governor seems less interested in savings and more interested in getting a pound of flesh from state employees.

“The governor is in such a rush to discuss layoffs, he hasn’t even allowed his commissioners time to implement the early retirement incentive. It’s possible he could achieve the savings he is seeking by properly executing that plan.

“Even though our members continue to do more with less, we are willing to reduce the size of the state work force through retirement and attrition if it means avoiding layoffs.

“The governor’s suggestion, that he may be able to challenge the Memorandum Of Understanding he has with PEF not to impose layoffs for the remainder of the year, is misguided.

“Once again while the governor wastes billions of dollars on consultants, he threatens the state work force with layoffs. While Judge Kahn ruled it is not PEF’s responsibility to close the budget gap, PEF continues to find savings. The union will be releasing another report next week on how the state can save more money replacing costly consultants with state employees.

“We are optimistic that on January 1, we will be working with a governor who is focused on making government more efficient without sacrificing the state work force,” Brynien said.

PEF To Governor; Cuts To The Work Force Aren’t The Only Option

Albany - While the New York State Public Employees Federation (PEF) is pleased with the court decision granting our temporary restraining order to stop the furloughs of state employees, there is more work to do toward closing the budget gap.

"The governor continues to insist state employee unions aren’t sacrificing and are uncooperative in helping to address the state’s fiscal crisis," said PEF President Kenneth Brynien. "That is patently false. PEF has given the governor proposals to cut hundreds of millions of dollars, including cutting contract consultants, reducing overtime and expanding the voluntary severance program," Brynien said.

"Unfortunately, the governor spent the past three weeks focused on the .2 of the 9.2 billion dollar deficit.

Our position has been and remains: the state should be doing everything possible to reduce costs and waste before targeting the work force and the services we provide to the taxpayers. We remain ready to help the governor achieve the savings through the solutions we have provided," Brynien added.