OCFS
wasted $26 million on IT contracts since ’02
By SHERRY HALBROOK
The state Office of Children and Family Services (OCFS) paid 62 percent more for
information technology (IT) services when it hired private consultants to do
work its own employees could have done, according to a recent analysis of the
contracts by PEF.
“Our study of 13 IT contracts shows the OCFS could have saved $1.68 million if
it had used state employees for the work instead of private consultants, said
PEF Director of Civil Service Enforcement Tom Cetrino.
Those 13 contracts are really just the tip of the iceberg, Cetrino added.
“Applying the same cost ratio to all the OCFS IT contracts since 2002, we find
the state might have saved a total of $26 million, or an average of $6.5 million
annually since 2002, had it used state employees,” he said.
Troubled kids paid for waste
While OCFS was wasting millions on costly consultants, it lost a significant
number of teachers and IT staff. The number of OCFS employees in both
information technology and teaching titles has dropped by more than 40 percent
since 1999.
The agency now has 83 vacant IT positions, up 121 percent since 1999.
The number of vacant teaching positions at OCFS has jumped by 44 percent since
1999 and currently totals $88.
“If this agency had filled those vacant IT positions and relied on those
employees, instead of consultants, it could have used the savings to hire more
teachers and staff to help the troubled children it serves,” Cetrino said.
It would have cost OCFS $5.36 million annually to fill its 83 vacant IT jobs,
including fringe benefits. And it would cost another $5.38 million annually to
keep the 88 vacant teaching jobs filled. Instead, OCFS chose to let private
consultants pocket the profits.
Consultants reap big profits
CMA, the IT contractor most often hired by New York state agencies, has 17
contracts with OCFS, alone. According to news reports, since 1997, the state has
paid CMA more than $55 million for its services.
In the examples PEF examined, staff provided by CMA billed at rates of $110 and
$152 an hour, or $214,500 and $296,400 annually.
The staff provided by CMA were “managed by, and report to, state staff who are
responsible for directing and reviewing their work.”
But the state pays its IT supervisory employees just $88,928 to $150,016,
annually. Their average annual pay (including benefits) is $116,276.
So, the state pays its employees far less to supervise consultants, than it pays
the consultants.
Boston-based Keane Inc. has 89 IT contracts with New York state, 13 of which are
with OCFS. Overall, the Keane Inc. IT consultants cost 108 percent more than
comparable PS&T titles.
“While Keane charges double the cost of state employees for its consultants,”
Cetrino said, “it seems that big markup is still not enough.
“The company plans to hire 8,000 IT employees in India over the next three to
five years.
“Since, it bills the state $94 an hour for programmers and the average computer
programmer in India is paid just $5 an hour, Keane soon will be making an even
bigger financial killing at the expense of New York taxpayers.”
The Communicator July/Aug. '06
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