Study: NYS agency
wasting $11M yearly on contractors
By SHERRY HALBROOK
The state Office of General Services (OGS) is wasting $11 million annually by contracting for engineering and architectural work that its own state employees could do.
OGS is responsible for the construction, maintenance and renovation of state-owned buildings.
According to a PEF analysis of 12 OGS contracts and subcontracts between 1996 and 2004, OGS could have saved an average of 74 percent by giving the engineering and design work to state employees.
The PEF study was concluded in late August, just as Gov. George Pataki signed into law the first of PEF’s Go Public bills — one aimed at forcing greater transparency and accountability from lobbyists trying to influence the award of state contracts. (See related story)
Why do they do it?
“The level of waste is staggering. It’s hard to imagine how the state can justify this trend toward shifting more and more work to consultants,” PEF President Roger Benson said.
“If the goal of contracting out is to save taxpayers’ money and gain efficiencies, we found no evidence that it’s working at OGS or other state agencies,” he said. “In fact, the data shows just the opposite — contracting out is wasting millions of tax dollars, not saving them.”
Nevertheless, OGS has cut its professional design and engineering staff by 31 percent since 1996, shifting that work to the more costly consultants.
“This confirms what PEF members at OGS already knew — this agency is losing state employees at the same time more and more consultants are being brought in to work alongside us and at a much higher cost to taxpayers,” said PEF Executive Board member Tom Comanzo, the union’s chair of the joint labor-management committee at OGS.
“Many of the consultants are in open-ended contracts that keep them here for years and years,” Comanzo said.
“If the state is serious about managing its budget, then the entire budget of our agency must be considered,” Comanzo added. “Greater economies can be realized through cutting money wasted on contracts, instead of always reducing state employees. OGS staffing levels are already at a low level. This reduced hiring, combined with the additional consultants, is affecting the morale of our members.”
Waste widespread
The $11 million OGS is wasting annually is just the tip of the iceberg. A study released in June by the Fiscal Policy Institute found the state is wasting up to $500 million annually through its agencies’ profligate use of private consultants.
That study did not include the new OGS data PEF recently obtained under the Freedom of Information Law on money OGS is wasting on engineering and design consultant services.
PEF researchers found, for example, OGS pays an average of $156,772 per individual consultant under a contract with the firm of Smith & Mahoney. However, it costs OGS an average of just $96,523 per employee in pay, benefits and overhead for its own staff in comparable jobs.
Title-by-title comparisons often found the gap between the cost for a private contractor and the corresponding state employee was even more substantial.
For instance, over the four-year course of an OGS contract with Delta Engineers PC, OGS paid 90 percent more for the consultant’s staff equivalent of a state senior engineer technician — a state grade 13 title that pays an hourly rate of $27.40 (including benefits and overhead). The consultant cost OGS $52.45 an hour.
In a subcontract of that same agreement, a senior project manager with Ysrael A. Seinuk PC, was paid $150.54 an hour, compared to $59.60 for the comparable state job title.
“We couldn’t find a single instance where a state employee was paid more than the private contractor doing comparable work,” said Tom Cetrino, PEF’s director of civil service enforcement and research. “And we bent over backward to be sure we compared the right job titles and included all of the benefits, pension and overhead costs for the state employees to make the comparisons fair.”
Waste hard to halt
Successive audits, conducted by state comptrollers and a private firm, of engineering and design contracts at the state Transportation Department have found even greater amounts of waste, than those at OGS.
This information has been widely publicized by PEF over many years, but neither the efforts of the union, state comptrollers, nor even state legislators have been able to slow the flood of vital tax dollars into private pockets.
Benson vowed, “As public employees, it’s our duty to safeguard public services and resources, and we are determined to do it — one law and one contract at a time, if that’s what it takes.”
Alfred E. Smith building, Albany. — Photo by John Epting
The
Communicator October 05
Features
NYS wasting $$$ on contractors
Go Public bill now law
PEF, groups fight for TCC jobs
Can't delay agency, union switch
Parole
targeted for
going public
Katrina
makes fed's budget
a mess
Departments
President's
Message
Member's
Mailbag
Health Notes
Member Mobilization
Retirees In Action
Member Highlights
PEF
Membership Benefits &Travel
Union Matters
More
$ for dependent care in 2006
Hutchings PC gains more beds
Reach out and help Katrina victims
Health care workers
salaries up
Region 12 backs Alessi and wins
Audubon Society honors member
Circulation
& Ownership Statement
PEF Audit 2005
Other Links
Professional
Directory
Members'
Classified
Member
Communicator Feedback
Do You Prefer The
Online Edition?
How To
Advertise Here
The
Communicator Staff
Questions on
this site?
Email the Webmaster