State employees would cost 49% less than
consultants
DOT documents reveal it’s paying $5.4M too much for IT work
By SHERRY HALBROOK
For years, state and private audits have documented how the state Transportation
Department (DOT) wastes approximately $180 million annually by contracting for
consultants to do engineering and design work, instead of using the department’s
own engineers.
Now, PEF has just completed a study of DOT contracts for 71 information
technology (IT) consultants that reveals the department wasted another $5.4
million in SFY 2005-’06 alone on those consultants.
DOT claims it hired consultants because the state hiring freeze prevented the
DOT Information Services Bureau (ISB) from rehiring to replace staff who left.
As a result, it lost half its staff over three years.
A DOT list, which PEF obtained under the state Freedom of Information Law,
revealed 71 current IT consulting positions were paid at an average annual rate
of $136,037, or an average hourly rate of $69.76, during 2005-’06.
That compares to an average annual rate of $91,042.14 (including all benefits)
for the comparable IT titles at DOT.
That means DOT is paying an average of $50,000 a year more for each of the
private IT consultants than it would pay to have its own public employees do the
same jobs.
“After taking an overall average for the 71 individuals, and the 31 titles that
they hold, it became clear the private IT consultants at DOT are costing
taxpayers 49 percent more than it would to fill those vacant state jobs and let
them do the work,” said Tom Cetrino, PEF’s director of civil service enforcement
who’s department found the wasteful practice.
“I don’t put the entire blame for this waste on DOT,” Cetrino said. “It appears
the department was forced to operate within the confines of a hiring freeze
enforced by Gov. George Pataki and his appointees at the state Division of
Budget — the very people who are supposed to be looking out for the taxpayers’
interests.”
Among the DOT documents PEF reviewed was an “Intent to Purchase Technology
Notification Form” in which DOT officials acknowledge the agency:
“...currently obtains the contractual equivalent of approximately 80 staff
members at a cost approximating $11 million to augment its existing IT staff.
This is a result of the state hiring freeze, which resulted in the Information
Services Bureau being halved as a result of losing 76 state employees over the
last three years.”
In perhaps the single most egregious example of waste, PEF found DOT paying a
consultant “business analyst” $153,660 a year, or $78.80 an hour. It would have
paid less than half that ($60,713.37 annually, or $31.14 hourly) for the state
employee who would do that job.
The private IT business analysts DOT hired are 153 percent more expensive than
their counterpart DOT public employees in a title of IT specialist I — a grade
14 position.
“We keep pointing out examples of this wasteful contracting,” Cetrino said.
“Hopefully, voters will make state policymakers pay attention soon. The state
really cannot afford to go on like this indefinitely.”
Is your state agency wasting money on private consultants/ contractors? If it
is, get the facts and share them with PEF. Contact the PEF Department of Civil
Service Enforcement at (518) 785-1900 or (800) 342-4306, ext. 280.
So far, PEF and the NYS Fiscal Policy Institute have identified more than $500
million wasted annually by the state on “deals” with private contractors for
work that could be done better and for substantially less by state employees.