SAVEMILLIONSBYREDUCINGNYSRELIANCEONCONSULTANTS 2

Executive Summary

! UnfortunatelyNewYorkStatesconsultantspendingoverthelastyearalsoincreased

SAVEMILLIONSBYREDUCINGNYSRELIANCEONCONSULTANTS 3

New Yorks Spending on Consultants Has Increased by More Than $840 million since SFY 200304
New York State spent over $3.5billion on consultants in SFY 201112,over $840 million more than the State spent on consultants in SFY 200304. Thats a 32% increase! Unfortunately New York States consultant spending over the last year also increased by

Consultant Spending Has Increased by 32% Since SFY 200304 and Continued To Increase in SFY 201112
Figure1

$3.51Billion

$2.67Billion

$3.23Billion

200304

201011

20112012

SAVEMILLIONSBYREDUCINGNYSRELIANCEONCONSULTANTS 4

Spending on State Employees Salaries Has Decreased While State Spending on Consultants Has Increased.
the State reduced personal services spending, the spending dedicated to State employee salaries,byover$395million

Table 1 State Spending on Consultants Goes Up As Spending on Employee Salaries Goes Down
FiscalYear

EmployeeSalaries Consulting Spending

Over 72%ofthemoneytheStatesavedinemployeesalariesinSFY201112wasconsumedby increasedspendingonconsultants. Figure2 $285million

$395million

ConsultantSpendingUp

SpendingonEmployeeSalaries Down

SAVEMILLIONSBYREDUCINGNYSRELIANCEONCONSULTANTS 5

The Average Consultant Costs NY Almost $73 an Hour; 40% More Than Comparable State Employees Cost (including benefits)
11FormBdata theaverageconsultantinalloccupationsandStateagencies,excluding SUNY, cost the State $72.63 an hour for doing work for which comparable State employeescostanaverageof$51.72 whichincludesthecostoftheirbenefits.

$72.63perhr.

$51.72perhr.

ComparableNYStateEmployeesCost AverageNYConsultantCost

Figure3

SAVEMILLIONSBYREDUCINGNYSRELIANCEONCONSULTANTS 6

Table 2

The State Can Save Up To $316 Million Annually by Replacing Some Of Its Consultants
CTL470ConsultantService ObjectCodeDescription ITConsultantDesign/Develop(100%) ITSoftwareInstallation/Integration(50%) ITSoftwareMaintenance(50%) ITServicesOther(30%) Accounting&AuditingServices(50%) LegalServices(50%) Medical/ClinicalServices(50%) Conferences/TrainingServices(25%) Alter&ImpExistingFac(25%) CapProjCnsltSvcsArchitectsStateProjects(90%) CapProjCnsltSvcsEngineersStateProjects(90%) CapProjCnsltSvcsBridgeInspection(90%) CapProjCnsltSvcsEngineeringSupervision(90%) CapProjCnsltSvcsMaterialTesting(90%) CapProjCnsltSvcsOther(50%) Subtotal OtherServices $3,086,572,609 ProjectedAnnual Savings $316,246,746 $1,457,148,053 $484,423,989 $275,234,623 Consultant Cost 201011SFY StateEmployeeCost doingSpecified %ofWork Estimated Savings

d in the ServicescategorymaintainedbyOSC. PEFsanalysisoftheunderlyingcontractscontained

SAVEMILLIONSBYREDUCINGNYSRELIANCEONCONSULTANTS 7

Comptrollerdoneintheearly1990s However,basedontheStatesactionstodateandconsideringthe

savingsderivedfromtheOtherServicescategorythatDOBdisputesiswork

State Employees Can Do the Same Work as Consultants For Up To $316 million Less Annually

$911million
$595million

ConsultantCost

StateEmployeeCost

Figure4

SAVEMILLIONSBYREDUCINGNYSRELIANCEONCONSULTANTS 8

The Division of the Budget Underestimated 201112 Consultant Spending by between $838 Million and $2.7 Billion
s theOtherServicescategory. theStates

Table 3 The Division of Budget Significantly Underestimates Consultant Spending SFY201011

(millions)

SFY201112
(millions)

OtherServices DOBUnderestimateRange $778$2,409 $838$2,717

Consultants Only Reported Salary Information for 15% of the State Funding They Received in SFY 201011

Unfortunately, since the laws enactment

SAVEMILLIONSBYREDUCINGNYSRELIANCEONCONSULTANTS 9

as Other Services,

Consultants only provide employee information on 15% of the state funding they receive.

Figure5

85% 15%

Solution: Enact A Cost Benefit Analysis Law

SAVEMILLIONSBYREDUCINGNYSRELIANCEONCONSULTANTS 10

The State should enact a Consultant Reduction Plan with a goal of saving $300 million annuallyby201415.Phasedinoverthethreeyears,thisplancouldsavetheStatemore than$600million

CONSULTANTREDUCTION PLAN SAVINGS SFY201213TOSFY201415

SFY201213Savings SFY201314Savings SFY201415Savings Total3YearSavings $100million $200million $300million $600million

In December 2009 The Governors Task Force on Personal Services Contracting

Sources and Methodology

Budget(DOB).InparticularOSCsmonthlyCTL470Reports, FormBswhicharepartoftheannualProcurementServicesActReport FormBsarerequired

CTL470Reports . AlterationandImprovementofExistingFacilities . CTL470Reports .

FormBsandStatepayrolldatafor20

AllFormBsfiledby

TipoftheIceberg SFY201112andSFY201213ExecutiveBudgetAgencyPresentations. FormBs