STATE OF NEW YORK
________________________________________________________________________
5643--A
2013-2014 Regular Sessions
IN SENATE
May 31, 2013
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Introduced by Sen. ROBACH -- read twice and ordered printed, and when
printed to be committed to the Committee on Finance -- recommitted to
the Committee on Finance in accordance with Senate Rule 6, sec. 8 --
committee discharged, bill amended, ordered reprinted as amended and
recommitted to said committee
AN ACT to amend the state finance law, in relation to the cost effec-
tiveness of consultant contracts by state agencies; and providing for
the repeal of such provisions upon expiration thereof
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Legislative intent. The legislature hereby finds and
2 declares that it is in the public interest to enact a cost benefit
3 review process when a state agency enters into contracts for personal
4 services. New York State spends over $3.5 billion annually on personal
5 service contracts, over $840 million more than the State spent on these
6 contracts in SFY 2003-04, a 32% increase. Despite an Executive Order
7 that has implemented a post contract review process for some personal
8 service contracts the cost of those contracts continues to escalate
9 every year well above the inflation rate. In addition the State Finance
10 Law does not require state agencies to compare the cost or quality of
11 personal services to be provided by consultants with the cost or quality
12 of providing the same services by the state employees. Numerous audits
13 by the Office of State Comptroller as well as a KPMG study commissioned
14 by the department of transportation have found that consultants hired
15 under personal service contracts can cost between fifty percent and
16 seventy-five percent more than state employees that do the exact same
17 work including the cost of state employee benefits. The Contract Disclo-
18 sure Law (Chapter 10 of the laws of 2006) required consultants who
19 provide personal services to file forms for each contract that outline
20 how many consultants they hired, what titles they employed them in and
21 how much they paid them. A review of these forms shows that the average
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD11164-02-4
S. 5643--A 2
1 consultant makes about fifty percent more than state employees doing
2 comparable work. It is in the public interest for state agencies to
3 compare the cost of doing work by consultants with the cost of doing the
4 same work with state employees as well as document whether or not such
5 work can be done by state employees. If state government is to be smar-
6 ter, more efficient, and transparent then a cost benefit analysis proc-
7 ess that makes its findings public should be required by law.
8 § 2. Section 163 of the state finance law is amended by adding a new
9 subdivision 15 to read as follows:
10 15. Consultant services. a. Before a state agency enters into a
11 contract for consultant services which is anticipated to cost more than
12 two hundred fifty thousand dollars in a twelve month period the state
13 agency shall conduct a cost comparison review to determine whether the
14 services to be provided by the consultant can be performed at equal or
15 lower cost by utilizing state employees, unless the contract meets one
16 of the exceptions set forth in paragraph b of this subdivision. As used
17 in this section, the term "consultant services" shall mean any contract
18 entered into by a state agency for analysis, evaluation, research,
19 training, data processing, computer programming, engineering including
20 professional design services, health services, mental health services,
21 accounting, auditing, or similar services, but shall not include legal
22 services or services in connection with litigation including expert
23 witnesses and shall not include contracts for construction of public
24 works. For purposes of this subdivision, the costs of performing the
25 services by state employees shall include any salary, pension costs, all
26 other benefit costs, costs that are required for equipment, facilities
27 and all other overhead. The costs of consultant services shall include
28 the total cost of the contract including costs that are required for
29 equipment, facilities and all other overhead and any continuing state
30 costs directly associated with a contractor providing a contracted func-
31 tion including, but not limited to, those costs for inspection, super-
32 vision, monitoring of the contractor's work and any pro rata share of
33 existing costs or expenses, including administrative salaries and bene-
34 fits, rent, equipment costs, utilities and materials. The cost compar-
35 ison shall be expressed where feasible as an hourly rate, or where such
36 a calculation is not feasible, as a total estimated cost for the antic-
37 ipated term of the contract.
38 b. A cost comparison shall not be required if the contracting agency
39 demonstrates:
40 (i) the services are incidental to the purchase of real or personal
41 property; or
42 (ii) the contract is necessary in order to avoid a conflict of inter-
43 est on the part of the agency or its employees; or
44 (iii) the services are of such a highly specialized nature that it is
45 not feasible to utilize state employees to perform them or require
46 special equipment that is not feasible for the state to purchase or
47 lease; or
48 (iv) the services are of such an urgent nature that it is not feasible
49 to utilize state employees; or
50 (v) the services are anticipated to be short term and are not likely
51 to be extended or repeated after the contract is completed; or
52 (vi) a quantifiable improvement in services that cannot be reasonably
53 duplicated.
54 c. Nothing in this section shall be deemed to authorize a state agency
55 to enter into a contract which is otherwise prohibited by law.
S. 5643--A 3
1 d. All documents related to the cost comparison required by this
2 subdivision and the determinations made pursuant to paragraph b of this
3 subdivision shall be public records subject to disclosure pursuant to
4 article six of the public officers law.
5 e. This analysis shall be completed no more than thirty days after it
6 commences and must be initiated within three days of the contract being
7 identified.
8 § 3. On or before December 31, 2016 the office of general services
9 shall prepare a report, to be delivered to the governor, the temporary
10 president of the senate and the speaker of the assembly. Such report
11 shall include, but need not be limited to, an analysis of the effective-
12 ness of the cost comparison study and an analysis of the cost savings
13 associated with performing such cost comparison.
14 § 4. This act shall take effect on the ninetieth day after it shall
15 have become a law and shall expire and be deemed repealed December 31,
16 2017; provided, however, that the amendments to section 163 of the state
17 finance law made by section one of this act shall not affect the repeal
18 of such section and shall be deemed repealed therewith.
