PEF to lawmakers: Switch to state IT workers and save millions of dollars


By SHERRY HALBROOK
PEF told state Assembly members in November the state could save upwards of $200 million annually if it focused more on using and enhancing the skills of its information technology (IT) employees, and cut its reliance on private consultants by at least half.

PEF Executive Board member Jim Blake presented PEF’s testimony to a joint hearing of the state Assembly committees on governmental operations, governmental employees and labor held in Albany November 17.

The Assembly has begun calling for the state to reduce its IT consultant use by 50 percent over the next three years and hand that work back to state employees.

In calling the hearing, the Assembly committees asked witnesses to talk about how to support and expedite that shift.

Blake said PEF estimates the change would save the state $110 million to $168 million.
“Your consistent advocacy on this issue has begun to result in a shift toward greater use of state IT employees to do the work currently handled by consultants,” said Blake, an information technologist for the state Division of Criminal Justice Services in Albany. “We have a long way to go, but without your advocacy, the journey would not have begun.”

The keys to making it happen, Blake said, lie in creating: a strong systemwide commitment to making the change; an inventory of state employees’ IT skills, more employee training; civil service career tracks to reward technological expertise; and an expanded role for the state Office for Technology (OFT).

“Enacting Cost-Benefit Analysis legislation would provide a big improvement,” Blake said, because it would require state agencies to figure out whether it would cost more money to use state employees or private consultants on a job, before contracts for the work are awarded to consultants.

Dollars and sense
New information is gradually becoming available as more state contractors comply with the Contract Disclosure Law of 2006 (part of PEF’s Go Public campaign), Blake said PEF now believes the state is spending an average of approximately $128 per hour for its IT consultants.

The average hourly cost for the state IT employees is $55.23, which includes pension, health care and other benefits. Even at the lower estimated rate for consultants, they still cost more than twice as much as the state employees.

Blake said the state IT consultant contracts fall into five categories: hardware maintenance, design and development, software installation, software maintenance, and other IT services.

“State employees can handle almost the entire consultant IT design and development work, about half of the consultant IT software installation and integration, and IT software maintenance work, and roughly 30 percent of the other IT services. The one exception is hardware maintenance. Because hardware is proprietary, its maintenance often needs to be done by consultants,” Blake said.

He added, “These percentages should grow as we develop a better trained state- employee IT work force.”

Can they do it?
Since it’s usually substantially less expensive to have state employees do the IT work, why doesn’t the state have them do it?

State managers often say they need to use consultants because their state employees lack the necessary skills. However, when challenged, the managers have not provided any specific evidence.

“We think IT managers are often unaware of their state employees’ specific skills and consistently underestimate them,” Blake said.

“That’s why it’s imperative IT managers in every state agency keep an inventory of their employees’ skills, similar to the process underway in the Office of the State Comptroller (OSC),” Blake added.

Lots of excuses not to train
Blake said PEF members do need more training to do some of the IT work being done by consultants, and the state is just beginning to work with PEF to accomplish that.

According to Blake, however, too often “our members hear a circular argument when they ask for training at their agencies.”

PEF members are often told it isn’t the state’s “job” to train its employees, yet the agencies allow contractors to bill the state for the training consultants receive.

“So, why can’t the state train its own employees, when it pays for the training of the consultants it hires?” Blake asked.

You’ve got OFT; Use it
Blake said the state could save money and solve many problems if it used OFT to better advantage.

“OFT needs to be used more as a central repository for state agencies’ IT needs,” Blake said. “OFT should function as the state’s in-house IT consultant agency and have people on staff with the skills state agencies need to design, develop, implement and maintain IT projects.”

State agencies that need help developing and introducing new technology could borrow the expertise from OFT. Then, OFT could train the agency’s IT staff to use the technology.

When agencies feel they can’t spare IT staff to be trained to take over the work that consultants are doing, OFT could loan them staff to fill in and free the employees for training.
 
In summary, Blake said, “It’s clear our agencies aren’t using the abilities and skills of our public servants to the best advantage.

“It would greatly benefit the taxpayers if we returned the state’s business to public servants.

That we can save up to $200 million dollars a year is an opportunity New York cannot afford to pass up.