(TNS) — As Mayor de Blasio warns of up to 22,000 layoffs of municipal workers this fall, New York City is paying millions of dollars in consulting fees to some of the world’s biggest corporations, the Daily News has learned.
Firms including Deloitte and KPMG are raking in about $163 million in ongoing contracts for services that are vaguely described in jargon-laden city documents.
And that’s only a small portion of the city’s business with contractors, a murky part of the budget that receives little scrutiny from most lawmakers or the public.
In the face of staggering tax revenue shortfalls, this year’s $88 billion city budget inflicted painful cuts to numerous city agencies — including about $770 million to the Education Department, according to the Mayor’s Office of Management and Budget. Meanwhile, contracts were trimmed by just over $300 million, to $17 billion, after ballooning for years.
The city should cancel contracts with multinational businesses like Deloitte and review the rest of the contracts with an eye to trimming or eliminating them, says NYC Councilman Ben Kallos, who chairs the Council’s Committee on Contracts.
“Before we start threatening to lay off and reduce wages for city employees, we should trim the fat and cut these bloated consulting contracts,” Kallos told The News.
Under one contract worth $25 million, accounting and consulting giant Deloitte was hired to create “playbooks” on policy and training to “accelerate adoption of ... cybersecurity capabilities across New York City government agencies,” among other tasks. Deloitte employees bill $170 to $220 an hour for the work, according to a city contract. The project manager’s annual salary is listed as $244,200 and a senior security consultant’s, $240,800.
By comparison, a city employee with the title of IT security specialist earns $75,000 to $180,000 per year, while a cyber security analyst receives $63,860 to $77,250.
“Let’s cut out the middle man. Our workers can do this work. If they can’t, it’s probably a lot cheaper to train them so they can,” Kallos said.
Another big contract went to international IT advisory firm Gartner. It’s receiving $13 million for “quality control service” for the city’s Department of Information Technology and Telecommunications (DoITT). The contract lets the company bill up to $373 per hour for work described as “development of a future-state vision for the city that summarizes the functionality required to support the daily processes for the application’s target audience,” among other tasks.
Accounting and consulting powerhouse KPMG also has a $13 million contract for quality control for DoITT, with contractors earning similar salaries. Including nine other ongoing contracts, Kallos unearthed and The News confirmed a total of $162,867,254 in city contracts with big consultancies, all of which Kallos wants to ax.
Gartner and KPMG declined to comment. Deloitte did not answer a request for comment by deadline.
De Blasio spokesman Bill Neidhardt declined to comment on specific contracts, saying the bigger issue is Albany’s refusal so far to authorize borrowing for the city to cover operating expenses.
“I’m glad the councilman is raising concerns and looking for creative ways to solve this problem, but it really doesn’t take too much creativity to know the city needs long-term borrowing,” he said.
Kallos said giving millions to gigantic firms while the city is facing its biggest financial crisis in decades reflects misplaced priorities.
“The city of New York should focus for the time being on the homeless people who need services and the hungry New Yorkers who are unemployed,” he said. “We can wait on getting a cybersecurity paper from Deloitte & Touche.”
Like the rest of the city budget, spending on contracts has skyrocketed since de Blasio took office. In fiscal year 2015, the city allocated nearly $12 billion to contracts. By the last fiscal year, the spending had reached $17.3 billion.
The Citizens Budget Commission has decried the city’s contract process, saying most bids are not awarded competitively, among other problems. The civic group called for reforms including a streamlined approval process.
“Of course, it’s more imperative now,” CBP’s Ana Champeny said of reforming the contracting process. “The city needs to be taking a long view about how to really bring expenses and revenues in alignment and contracts is definitely a place they should be looking for savings.”
De Blasio has said the city will have to fire or cut pay for thousands of workers if the federal government doesn’t send bailout funds or the state doesn’t authorize borrowing.
As the city mulls cuts, it should also weigh giving municipal employees the jobs contractors would be doing, Kallos said.
“We should start with cutting the corporate consulting contracts,” he said. “And as we reduce the headcount from consultants, if there’s some reduction at agencies that would be helpful for efficiency, we should have our city employees fulfill the duties that the consultants were providing.”
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