Relates to the cost effectiveness of consultant contracts by state agencies

1 Co-sponsor

• Tony Avella

BILL NUMBER:S5643A

Title of bill

An act to amend the state finance law, in relation to the cost effectiveness of consultant contracts by state agencies; and providing for the repeal of such provisions upon expiration thereof

Purpose or general idea of bill

Sets forth conditions when an agency shall enter into a contract for consultant services. Requires agencies to conduct a cost comparison prior to entering into a contract for consultant services to determine if there is a less expensive alternative.

Summary provisions

Amends the state finance law by amending section 163 to add a new subdivision 15, setting forth conditions that must be met when an agency shall enter into a contract for consulting services of more than $250,000, The agency shall compare costs to determine whether the work can be performed at lower cost by utilizing state employees rather than consultants. Certain exceptions are specified when this cost comparison is not required. The agency must retain documentation of the cost comparison as a public record.

Justification

The purpose of this bill is to require state agencies to do cost comparisons before entering into contracts for consultant services. Any time the taxpayers' money is used to fund a contract. for services there is a need to insure that this expenditure is necessary and prudent, The State of New York spends over $2 Billion per year on consultants, In many cases these consultants perform work that could be done by professional state employees and the cost of using consultants is substantially higher.

In 1998 the use of engineering consultants by the State Department of Transportation was studied by the State, Comptroller and OSC concluded that the State could save millions of dollars by reducing the use of consultants. The Comptroller recommended cost/benefit. analysis prior to contracting with consultants. Other studies have confirmed this finding, including an analysis by the State Assembly in 2009 that estimated the state could save $250 million over three years by reducing the use of information technology consultants. In 2010 The state Senate Task Force on Government Efficiency estimated that the Department of Transportation could save about $46 million per year by implementing this policy. In 2009 the Federal Office of Management and Budget issued a directive to Federal government agencies that calls for them to perform a cost benefit analysis before entering into contracts and to initiate pilot projects for in-sourcing work in cases where the cost analysis supports the conclusion that the work can be performed by government employers at lower cost that by using contractors. OMB estimates that this and other contracting reforms can save the Federal government $40 Billion.

Legislative history

2012 Vetoed

Fiscal implications

None.

Effective date

This act shall take effect on the ninetieth day after it shall have become a law, with provisions.