PEF Calls for Investigation into DOT Consultant Spending and Conflicts of Interest

ALBANY, NY (06/07/2010)(readMedia)-- The New York State Public Employees Federation (PEF) calls on the state Inspector General and the Legislature to investigate the Department of Transportation (DOT) as it continues to waste millions of taxpayer dollars hiring private consultants to do work state employees can do for much less.

"It is not uncommon for DOT regional directors, chief engineers, and other high-ranking DOT management to find employment with engineering firms that receive significant consulting contracts from DOT," said PEF President Kenneth Brynien. "This may explain why DOT has made no progress in reducing its reliance on consultant engineers.

"We are asking the Inspector General and Legislature to investigate the post-state employment practices of upper DOT management to determine whether they comply with the current ethics laws, and whether or not current ethics laws provide adequate protection against conflict of interests in DOT's consultant contracting process," Brynien said.

PEF has discovered DOT consultants failed to account for more than $250 million of their expenditures in state fiscal year 2008-09. The department increased consultant spending by $9 million last year and $79 million since 2004.

"The DOT habitually contracts out for engineering-related expenditures, including project design, construction inspection and bridge inspection knowing it costs significantly more. The department is required by law to make its consultants disclose specific costs associated with these contracts, yet more than half of DOTconsultant engineering expenditures in the last fiscal year were simply not accounted for. It's no wonder there is a budget gap. Imagine trying to operate a business without knowing what your employees spend your money on," Brynien said.

"Time and again, DOT has failed to reign in its wasteful spending practices. If we are ever going to get New York's fiscal house in order, we must begin with cutting inefficient spending right in our own backyard," said State Senator and Deputy Majority Leader Jeffrey D. Klein, Chair of the Senate Task Force on Government Efficiency.

"For the last decade, I have been a strong advocate of replacing consultants with state employees when it can be shown to save the state money. I am particularly disappointed with the Department of Transportation's lack of progress and failure to reduce their use of consultants," said State Senator Neil D. Breslin.

The state is currently in one of the worse fiscal crises since the Great Depression, yet overall spending on consultants increased by more than $36.6 million last fiscal year totaling $2.925 billion.

"It is unconscionable that DOT has failed to take any meaningful steps to reduce its reliance on costly consultants even though consultants cost up to 150 percent more than state employees who do the same work," Brynien said.

"DOT could save up to $84.3 million annually by replacing most of its engineering consultants with state employees.

"Last weekend the engineering firm hired for the $42 million Exit 6 bridge replacement project in Latham added four more consultants to cover work scheduled to be done by two state employees. The governor's new policy eliminating most state employee overtime now means the state will spend more money on higher-priced consultants to do the work state employees could have done for less," Brynien added.

Based on what PEF has uncovered, it is clear the state could save hundreds of millions of dollars by performing cost-benefit analysis prior to contracting out for consultant services. PEF is encouraging the passage of the cost-benefit bill (A9934/S7011) introduced by Assembly Member Susan John and Senator Jeffrey Klein. The bill requires agencies to perform a cost-benefit analysis prior to contracting out for consultant services in excess of $500,000 annually.

PEF's examination of DOT consultant engineering contracts shows that DOT wastes million in every region of the state. Below are just a few examples of expenditures for bridge inspections or design services in the last fiscal year 2008-09:

Capital District – Civil Engineering bridge inspection work billed at $112 per-hour for a total of $1.2 million. We estimate that DOT engineers could have done the work for $536,000 for a savings of almost $700,000. (Contract #D030511 for Bi-annual and interim bridge inspection in Capital District).

Mohawk Valley – Civil Engineering bridge inspection work billed at $86.02 per-hour for a total of $799,000. We estimate that DOT engineers could have done the work for $463,000 for a savings over $300,000. (Contract #D030512 for Bi-annual and interim bridge inspection in the Mohawk Valley region).

Central NY – Civil Engineering for design services work billed at $97.62 per-hour for a total of $304,000. We estimate that DOT engineers could have done the work for $155,000 for a savings of nearly $150,000. (Contract #D025401 design work related to rehab of three bridges and I-81 in central NY).

Genesee Valley – Civil Engineering bridge inspection work billed at $103 per-hour for a total of $513,000. We estimate that DOT engineers could have done the work for $246,000 for a savings of $266,000. (Contract #D030514 for Bridge Inventory and Biannual Bridge Inspection in the Genesee Valley).

Western NY – Civil Engineering for design services work billed at $95.03 per-hour for a total of $302,000. We estimate that DOT engineers could have done the work for $158,000 for a savings of nearly $143,000. (Contract #D025601 for design work including rehab of bridge ramp for NY RT 33).

Central Southern Tier – Civil Engineering bridge inspection work billed at $90.77 per-hour for a total of almost $300,000. We estimate that DOT engineers could have done the work for $166,000 for a savings of $133,000. (Contract #D030516 for Biannual Bridge Inspections in the Central Southern Tier).

North Country – Civil Engineering design services billed at $98.06 per-hour for a total of $230,000. We estimate that DOT engineers could have done the work for $117,000 for a savings of $113,000. (Contract #D015454 for design work in North Country).

Hudson Valley – Civil Engineering bridge inspection work billed at $97.16 per-hour for a total of $1.33 million. We estimate that DOT engineers could have done the work for $724,000 for a savings of $614,000. (Contract #D030517 for Bi-annual and interim bridge inspection in the Hudson Valley).

Southern Tier – Civil Engineering bridge inspection work billed at $92.17 per-hour for a total of $1.7 million. We estimate that DOT engineers could have done the work for $870,000 for a savings of $824,000. (Contract #D030518 for Bridge Inspections in Southern Tier).

Long Island – Civil Engineering bridge inspection work billed at $130.50 per-hour for a total of $613,000. We estimate that DOT engineers could have done the work for $234,000 for a savings of $378,000. (Contract #D015612 for Bridge Inspections in Long Island region).

New York City – Civil Engineering bridge inspection work billed at $100 per-hour for a total of $3.4 million. We estimate that DOT engineers could have done the work for $1.7 million for a savings of $1.7million. (Contract #D015608 & D015610 for Bi-annual and interim bridge inspection in the Bronx and Queens).

Using just this small sample, the state could have had an additional $5.3 million to use on road and bridge maintenance and repair if DOT engineers were used rather than costly consultants.

PEF is the state's second-largest state-employee union, representing 58,000 professional, scientific and technical employees.

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