NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2248A
SPONSOR: Bronson TITLE OF BILL: An act to amend the state finance law, in relation to
the cost effectiveness of consultant contracts by state agencies
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 OF PROVISIONS:
Amends the state finance law by amending section 163 to add a new subdi-
vision 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 compar-
isons 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 profes-
sional state employees and the cost of using consultants is substantial-
ly 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 find-
ing, 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 Trans-
portation 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:
A10781 of 2011-12: vetoed;
A7506 of 2013-2014: referred to Government Operations
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law, with provisions.
