S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5356
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                               March 2, 2021
                                ___________
 
 Introduced  by  Sen. BRESLIN -- read twice and ordered printed, and when
   printed to be committed to the Committee on Finance
 
 AN ACT to amend the state finance law, in relation to  the  cost  effec-
   tiveness  of  consultant  contracts by state agencies and ensuring the
   efficient and effective use of state tax dollars

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section 163 of the state finance law is amended by adding
 a new subdivision 16 to read as follows:
   16. CONSULTANT SERVICES. A.  BEFORE  A  STATE  AGENCY  ENTERS  INTO  A
 CONTRACT  FOR CONSULTANT SERVICES WHICH IS ANTICIPATED TO COST MORE THAN
 ONE MILLION DOLLARS IN A TWELVE MONTH  PERIOD  THE  STATE  AGENCY  SHALL
 CONDUCT A COST COMPARISON REVIEW TO DETERMINE WHETHER THE SERVICES TO BE
 PROVIDED  BY  THE  CONSULTANT CAN BE PERFORMED AT EQUAL OR LOWER COST BY
 UTILIZING  STATE  EMPLOYEES,  UNLESS  THE  CONTRACT  MEETS  ONE  OF  THE
 EXCEPTIONS SET FORTH IN PARAGRAPH G OF THIS SUBDIVISION. AS USED IN THIS
 SECTION,  THE TERM "CONSULTANT SERVICES" SHALL MEAN ANY CONTRACT ENTERED
 INTO BY A STATE AGENCY FOR  ANALYSIS,  EVALUATION,  RESEARCH,  TRAINING,
 DATA  PROCESSING,  COMPUTER  PROGRAMMING,  THE  DESIGN,  DEVELOPMENT AND
 IMPLEMENTATION  OF  TECHNOLOGY,  COMMUNICATIONS  OR   TELECOMMUNICATIONS
 SYSTEMS OR THE INFRASTRUCTURE PERTAINING THERETO, INCLUDING HARDWARE AND
 SOFTWARE,  ENGINEERING  INCLUDING  INSPECTION  AND  PROFESSIONAL  DESIGN
 SERVICES, HEALTH SERVICES, MENTAL HEALTH SERVICES, ACCOUNTING, AUDITING,
 OR SIMILAR SERVICES AND SUCH SERVICES THAT ARE SUBSTANTIALLY SIMILAR  TO
 AND  IN LIEU OF SERVICES PROVIDED, IN WHOLE OR IN PART, BY STATE EMPLOY-
 EES, BUT SHALL NOT INCLUDE LEGAL SERVICES OR SERVICES IN CONNECTION WITH
 LITIGATION INCLUDING EXPERT WITNESSES AND SHALL  NOT  INCLUDE  CONTRACTS
 FOR  CONSTRUCTION OF PUBLIC WORKS. FOR PURPOSES OF THIS SUBDIVISION, THE
 COSTS OF PERFORMING THE SERVICES BY STATE EMPLOYEES  SHALL  INCLUDE  ANY
 SALARY,  PENSION COSTS, ALL OTHER BENEFIT COSTS, COSTS THAT ARE REQUIRED
 FOR EQUIPMENT, FACILITIES AND ALL OTHER OVERHEAD. THE COSTS OF  CONSULT-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD05251-02-1

 S. 5356                             2
 
 ANT  SERVICES  SHALL  INCLUDE  THE  TOTAL COST OF THE CONTRACT INCLUDING
 COSTS THAT ARE REQUIRED FOR EQUIPMENT, FACILITIES AND ALL OTHER OVERHEAD
 AND ANY CONTINUING STATE COSTS DIRECTLY  ASSOCIATED  WITH  A  CONTRACTOR
 PROVIDING  A  CONTRACTED  FUNCTION  INCLUDING, BUT NOT LIMITED TO, THOSE
 COSTS FOR INSPECTION, SUPERVISION, MONITORING OF THE  CONTRACTOR'S  WORK
 AND ANY PRO RATA SHARE OF EXISTING COSTS OR EXPENSES, INCLUDING ADMINIS-
 TRATIVE  SALARIES  AND  BENEFITS,  RENT,  EQUIPMENT COSTS, UTILITIES AND
 MATERIALS. THE COST COMPARISON SHALL BE EXPRESSED WHERE FEASIBLE  AS  AN
 HOURLY  RATE,  OR  WHERE  SUCH A CALCULATION IS NOT FEASIBLE, AS A TOTAL
 ESTIMATED COST FOR THE ANTICIPATED TERM OF THE CONTRACT.
   B. PRIOR TO ENTERING ANY CONSULTATION SERVICES CONTRACT FOR THE PRIVA-
 TIZATION OF A STATE SERVICE THAT IS NOT CURRENTLY PRIVATIZED, THE  STATE
 AGENCY  SHALL  DEVELOP  A  COST COMPARISON REVIEW IN ACCORDANCE WITH THE
 PROVISIONS OF PARAGRAPH A OF THIS SUBDIVISION.
   C. (I) IF SUCH COST COMPARISON REVIEW IDENTIFIES A COST SAVINGS TO THE
 STATE OF TEN PERCENT OR MORE, AND SUCH CONSULTANT SERVICES CONTRACT WILL
 NOT DIMINISH THE QUALITY OF SUCH SERVICE, THE STATE AGENCY SHALL DEVELOP
 A BUSINESS PLAN, IN ACCORDANCE WITH THE PROVISIONS  OF  PARAGRAPH  D  OF
 THIS  SUBDIVISION,  IN ORDER TO EVALUATE THE FEASIBILITY OF ENTERING ANY
 SUCH CONTRACT AND TO IDENTIFY THE POTENTIAL RESULTS,  EFFECTIVENESS  AND
 EFFICIENCY OF SUCH CONTRACT.
   (II)  IF SUCH COST COMPARISON REVIEW IDENTIFIES A COST SAVINGS OF LESS
 THAN TEN PERCENT TO THE STATE AND SUCH CONSULTANT SERVICES CONTRACT WILL
 NOT DIMINISH THE QUALITY OF SUCH SERVICE, THE STATE AGENCY MAY DEVELOP A
 BUSINESS PLAN, IN ORDER TO EVALUATE THE FEASIBILITY OF ENTERING ANY SUCH
 CONTRACT AND TO IDENTIFY THE POTENTIAL RESULTS, EFFECTIVENESS AND  EFFI-
 CIENCY  OF  SUCH CONTRACT, PROVIDED THERE IS A SIGNIFICANT PUBLIC POLICY
 REASON TO ENTER INTO SUCH CONSULTANT SERVICES CONTRACT.
   (III) IF ANY SUCH PROPOSED CONSULTANT SERVICES CONTRACT  WOULD  RESULT
 IN  THE  LAYOFF,  TRANSFER OR REASSIGNMENT OF FIFTY OR MORE STATE AGENCY
 EMPLOYEES, AFTER CONSULTING WITH  THE  POTENTIALLY  AFFECTED  BARGAINING
 UNITS, IF ANY, THE STATE AGENCY SHALL NOTIFY THE STATE EMPLOYEES OF SUCH
 BARGAINING  UNIT,  AFTER  SUCH COST COMPARISON REVIEW IS COMPLETED. SUCH
 STATE AGENCY SHALL PROVIDE AN OPPORTUNITY FOR SAID EMPLOYEES  TO  REDUCE
 THE  COSTS  OF  CONDUCTING  THE  OPERATIONS TO BE PRIVATIZED AND PROVIDE
 REASONABLE RESOURCES FOR THE PURPOSE OF ENCOURAGING AND  ASSISTING  SUCH
 STATE  EMPLOYEES  TO  ORGANIZE  AND SUBMIT A BID TO PROVIDE THE SERVICES
 THAT ARE THE SUBJECT OF THE POTENTIAL CONSULTANT SERVICES CONTACT.
   D. ANY BUSINESS PLAN DEVELOPED BY A STATE AGENCY FOR  THE  PURPOSE  OF
 COMPLYING  WITH  PARAGRAPH  C OF THIS SUBDIVISION SHALL INCLUDE: (I) THE
 COST COMPARISON REVIEW AS DESCRIBED IN PARAGRAPH B OF THIS  SUBDIVISION,
 (II)  A  DETAILED  DESCRIPTION  OF  THE  SERVICE OR ACTIVITY THAT IS THE
 SUBJECT OF SUCH BUSINESS PLAN, (III) A DESCRIPTION AND ANALYSIS  OF  THE
 STATE AGENCY'S CURRENT PERFORMANCE OF SUCH SERVICE OR ACTIVITY, (IV) THE
 GOALS  TO  BE ACHIEVED THROUGH THE PROPOSED CONSULTANT SERVICES CONTRACT
 AND THE RATIONALE FOR SUCH GOALS, (V) A DESCRIPTION OF AVAILABLE OPTIONS
 FOR ACHIEVING SUCH GOALS, (VI) AN ANALYSIS OF THE ADVANTAGES AND  DISAD-
 VANTAGES  OF EACH OPTION, INCLUDING, AT A MINIMUM, POTENTIAL PERFORMANCE
 IMPROVEMENTS AND RISKS ATTENDANT  TO  TERMINATION  OF  THE  CONTRACT  OR
 RESCISSION  OF  SUCH CONTRACT, (VII) A DESCRIPTION OF THE CURRENT MARKET
 FOR THE SERVICES OR ACTIVITIES THAT ARE THE  SUBJECT  OF  SUCH  BUSINESS
 PLAN,  (VIII) AN ANALYSIS OF THE QUALITY OF SERVICES AS GAUGED BY STAND-
 ARDIZED MEASURES AND  KEY  PERFORMANCE  REQUIREMENTS  INCLUDING  COMPEN-
 SATION, TURNOVER, AND STAFFING RATIOS, (IX) A DESCRIPTION OF THE SPECIF-
 IC  RESULTS BASED PERFORMANCE STANDARDS THAT SHALL, AT A MINIMUM BE MET,
 TO ENSURE ADEQUATE PERFORMANCE BY ANY PARTY PERFORMING SUCH  SERVICE  OR

 S. 5356                             3
 
 ACTIVITY, (X) THE PROJECTED TIME FRAME FOR KEY EVENTS FROM THE BEGINNING
 OF  THE  PROCUREMENT  PROCESS  THROUGH  THE EXPIRATION OF A CONTRACT, IF
 APPLICABLE, (XI) A SPECIFIC AND FEASIBLE CONTINGENCY PLAN THAT ADDRESSES
 CONTRACTOR NONPERFORMANCE AND A DESCRIPTION OF THE TASKS INVOLVED IN AND
 COSTS  REQUIRED  FOR IMPLEMENTATION OF SUCH PLAN, AND (XII) A TRANSITION
 PLAN, IF APPROPRIATE, FOR ADDRESSING CHANGES IN  THE  NUMBER  OF  AGENCY
 PERSONNEL,  AFFECTED BUSINESS PROCESSES, EMPLOYEE TRANSITION ISSUES, AND
 COMMUNICATIONS WITH AFFECTED STAKEHOLDERS, SUCH AS  AGENCY  CLIENTS  AND
 MEMBERS OF THE PUBLIC, IF APPLICABLE. SUCH TRANSITION PLAN SHALL CONTAIN
 A  REEMPLOYMENT AND RETRAINING ASSISTANCE PLAN FOR EMPLOYEES WHO ARE NOT
 RETAINED BY THE STATE OR EMPLOYED BY THE CONTRACTOR. IF ANY PART OF SUCH
 BUSINESS PLAN IS BASED UPON EVIDENCE THAT THE STATE AGENCY IS NOT SUFFI-
 CIENTLY STAFFED TO PROVIDE  THE  SERVICES  REQUIRED  BY  THE  CONSULTANT
 SERVICES CONTRACT, THE STATE AGENCY SHALL ALSO INCLUDE WITHIN SUCH BUSI-
 NESS PLAN A RECOMMENDATION FOR REMEDIATION OF THE UNDERSTAFFING TO ALLOW
 SUCH SERVICES TO BE PROVIDED DIRECTLY BY THE STATE AGENCY IN THE FUTURE.
   E.  UPON  THE COMPLETION OF SUCH BUSINESS PLAN, THE STATE AGENCY SHALL
 SUBMIT THE BUSINESS PLAN TO THE STATE COMPTROLLER.
   F. (I) NOT LATER THAN SIXTY DAYS AFTER RECEIPT OF ANY  BUSINESS  PLAN,
 THE  STATE  COMPTROLLER  SHALL  TRANSMIT  A REPORT DETAILING ITS REVIEW,
 EVALUATION AND DISPOSITION REGARDING SUCH BUSINESS  PLAN  TO  THE  STATE
 AGENCY THAT SUBMITTED SUCH COST COMPARISON REVIEW. SUCH SIXTY-DAY PERIOD
 MAY  BE  EXTENDED  FOR  AN ADDITIONAL THIRTY DAYS UPON A SHOWING OF GOOD
 CAUSE.
   (II) THE STATE COMPTROLLER'S REPORT SHALL INCLUDE  THE  BUSINESS  PLAN
 PREPARED  BY  THE STATE AGENCY, THE REASONS FOR APPROVAL OR DISAPPROVAL,
 ANY RECOMMENDATIONS OR OTHER INFORMATION TO ASSIST THE STATE  AGENCY  IN
 DETERMINING  IF  ADDITIONAL  STEPS  ARE NECESSARY TO MOVE FORWARD WITH A
 CONSULTANT SERVICES CONTRACT.
   (III) IF THE STATE COMPTROLLER DOES NOT ACT ON A BUSINESS PLAN SUBMIT-
 TED BY A STATE AGENCY WITHIN NINETY DAYS OF  RECEIPT  OF  SUCH  BUSINESS
 PLAN, SUCH BUSINESS PLAN SHALL BE DEEMED APPROVED.
   G.  A  COST COMPARISON SHALL NOT BE REQUIRED IF THE CONTRACTING AGENCY
 DEMONSTRATES:
   (I) THE SERVICES ARE INCIDENTAL TO THE PURCHASE OF  REAL  OR  PERSONAL
 PROPERTY; OR
   (II)  THE CONTRACT IS NECESSARY IN ORDER TO AVOID A CONFLICT OF INTER-
 EST ON THE PART OF THE AGENCY OR ITS EMPLOYEES; OR
   (III) THE SERVICES ARE OF SUCH A HIGHLY SPECIALIZED NATURE THAT IT  IS
 NOT  FEASIBLE  TO  UTILIZE  STATE  EMPLOYEES  TO PERFORM THEM OR REQUIRE
 SPECIAL EQUIPMENT THAT IS NOT FEASIBLE FOR  THE  STATE  TO  PURCHASE  OR
 LEASE; OR
   (IV) THE SERVICES ARE OF SUCH AN URGENT NATURE THAT IT IS NOT FEASIBLE
 TO UTILIZE STATE EMPLOYEES; OR
   (V)  THE  SERVICES ARE ANTICIPATED TO BE SHORT TERM AND ARE NOT LIKELY
 TO BE EXTENDED OR REPEATED AFTER THE CONTRACT IS COMPLETED; OR
   (VI) A QUANTIFIABLE IMPROVEMENT IN SERVICES THAT CANNOT BE  REASONABLY
 DUPLICATED.
   H. NOTHING IN THIS SECTION SHALL BE DEEMED TO AUTHORIZE A STATE AGENCY
 TO ENTER INTO A CONTRACT WHICH IS OTHERWISE PROHIBITED BY LAW.
   I.  ALL  DOCUMENTS  RELATED  TO  THE COST COMPARISON AND BUSINESS PLAN
 REQUIRED BY THIS SUBDIVISION AND THE  DETERMINATIONS  MADE  PURSUANT  TO
 PARAGRAPH  G  OF  THIS  SUBDIVISION  SHALL  BE PUBLIC RECORDS SUBJECT TO
 DISCLOSURE PURSUANT TO ARTICLE SIX OF THE PUBLIC OFFICERS LAW.
   § 2. On or before  December  31,  2023  the  state  comptroller  shall
 prepare  a report, to be delivered to the governor, the temporary presi-

 S. 5356                             4
 
 dent of the senate and the speaker of the assembly.  Such  report  shall
 include, but need not be limited to, an analysis of the effectiveness of
 the  cost  comparison review program and an analysis of the cost savings
 associated with performing such cost comparison.
   §  3.  This  act shall take effect on the ninetieth day after it shall
 have become a law and shall apply to all contracts solicited or  entered
 into  by  state agencies after the effective date of this act; provided,
 however, the amendments to section 163 of the state finance law made  by
 section  one of this act shall not affect the repeal of such section and
 shall be deemed repealed therewith.