The Business Council of New York State opposes A.8555-C, Part O which would impose burdensome, duplicative and ill-defined analysis requirements on state agencies prior to entering into a consultant services contract anticipated to be in excess of $250,000 in a twelve-month period.
The bill specifically requires state agencies to determine whether services can be provided by state employees at equal or lower cost. In the required analysis, the bill requires a consideration of costs associated with the current state employees doing work that would otherwise be handled by a consultant, but makes no mention of the direct or “opportunity" costs related to using or diverting existing state employees to perform the new services. In doing so, the bill ignores a significant potential cost factor and will skew the comparison.
Lastly, this legislation is duplicative, if the intended purpose of the bill is to bring heightened scrutiny to consultant contract spending by agencies and the services those contracts are providing. Chapter 10 of the Laws of 2006 significantly expanded the amount and type of information that agencies must report when they hire outside consultants, including the number of consultants utilized on a specific project, historical information about consultant use by the agency, and a projection of future consultant use and costs throughout the term of the contract.
Current State Procurement Guidelines recommend that agencies provide detailed justification of their purchasing practices in the contract procurement record, and procurements conducted through an RFP process must document how “best value for the State of New York" was determined. State agencies undertake detailed procurement procedures long before an award or contract is given, with many levels of scrutiny both within the agency and from external control agencies. This is an expected management role, and one that achieves the appropriate balance as any spending is proposed.
In this time when state funds from all sources are seriously constrained, there is no question that it is important to identify and cut waste at all levels of government. Cutting waste will not address the scope of our state's fiscal crisis and state agencies have been asked by the Executive and Division of Budget to scrutinize all levels of spending across their agencies, to eliminate or reduce where possible, and agencies have responded. This includes spending on existing contracts and on the issuance of any new awards. State agencies have faced the same daunting tasks that the private sector has faced in this recession: they have had to focus their efforts on continuing to provide the services required of their core mission with limited resources. There is no justification to add at this time additional analysis burdens which will take staff time and resources, when sufficient provisions exist within state law to ensure funds are being appropriately spent and an agency's use of its personnel on carrying out its core mission is not being compromised.
For these reasons, The Business Council opposes this legislation.