I’m Shocked, Shocked That Consultants Say They Cost Less Than Public Employees

Like Captain Renault in Casablanca it is no surprise that consultant engineers would claim they are less expensive than public employees even if they have to gin up the numbers.  If a study on outsourcing sponsored by the Council of Engineering Consultants of NY (ACECNY) is a display of the analytical skills of those consultants, their clients are in deep trouble.

The study, Engineering Costs:  In House vs. Outsourced Engineering purports to be an objective comparison of the cost of in-house New York State Department of Transportation work versus private consulting engineers.  But the consultants hired to do the study for ACECNY at the Polytechnic Institute of New York University based the research on estimates, assumptions and survey data.  None of that data is solid.

In short, the analysis was done with data conjured out of sand.

Here are some of the problems with ACECNY study:

• It isn’t based on the actual salaries of DOT’s consultants OR state employees.  If the actual data is available, why not use it?
• It contradicts objective studies and audits by the Office of State Comptroller, KPMG and the Fiscal Policy Institute, all of which used actual data from contracts and state employee payrolls, all showing that contract engineers cost significantly more that DOT staff engineers.
• It inflates actual state employee salaries by 168 percent, using unsubstantiated and erroneous overhead assumptions.
• It underestimates the costs of engineering consultants hired by DOT by including the average hourly wages of clerical titles and typists.  How can one suggest that a state engineer is paid too much by comparing his salary with that of a consultant engineer whose salary is averaged with the salaries of low-paid administrative workers?

The ACECNY study is not an valid comparison of the real costs of either NYS Department of Transportation engineers or the cost of contract consultants used by DOT.  Use of actual payroll data provided by the Office of State Comptroller shows that private consulting engineers cost, on average, $99.69 an hour compared with the $53.78 an hour, including benefits, paid on average to state engineers.

The bottom line:
Private consultants cost nearly twice as much as DOT engineers.

Click on this link for a more detailed analysis of the flawed ACECNY study