Governor David A. Paterson today issued an Executive Order that creates a new set of stringent standards governing the use of consultant contracts by state agencies. Additionally, a new task force will be put in place to review and report on agencies use of consultants. These measures will help ensure consultants will only be utilized when they represent the most cost-effective or efficient option possible for taxpayers. According to the Division of the Budget, the state is projected to spend over $800 million on consultant services in 2008-09.

The Task Force Governor Paterson created will review all future consultant contracts with personnel costs of over $1 million per year. After entering into a contract covered by the Executive Order, a state agency will have ten business days to provide the task force a written justification for why it has chosen to use consultants instead of state employees. If the reason for doing so is cost savings, the agency must also produce an analysis that supports this conclusion.

“I want to make it clear to the citizens of New York and also to our government leaders that we face serious economic difficulty in the coming months and years. Particularly in these challenging fiscal times, we must closely scrutinize every spending choice our state government makes,” said Governor Paterson. “Agencies should only use contractors if it is clear they are necessary or will provide savings to taxpayers. This Executive Order will help to ensure that.”

The Executive Order applies to most consultant contracts where personnel costs exceed $1 million per year. The Order only recommends the use of outside contractor work if the contractor will be more cost effective, efficient, or necessary to protect public health and safety. It also requires agencies to explain why outside consultants – and not state employees – are needed to perform a specific task. This and any other justification would later be reviewed by the new task force. Furthermore, agencies will be required to post this information on their websites, including a full listing of consultant contracts covered by the order.

The Executive Order also seeks to improve the transparency of the consulting contracting process. Agencies must post a list of qualifying contracts, along with the estimated cost and justification for each, on their website. Additionally, copies of the actual contracts must be made available to the public either on the agency’s website or upon request.

The Task Force will meet at least quarterly and evaluate contracts submitted for their review. If the Task Force believes that an agency’s use of consultants is unnecessary or in conflict with the provisions of this Executive Order, it will make recommendations to that entity for reforming its contracting procedures.

On October 1, 2009, and every year thereafter, the task force will issue a public report on the utilization of consultants by state agencies and their compliance with this Executive Order, as well as recommendations for preventing unwarranted contracts. Transportation engineering and information technology will be particular focuses of the report. Both are areas where the use of consulting services is widespread.

(YWN Desk)