Press release

Report reveals state spent $2.5 billion on third-party IT contracts
Reforms could save California more than $700 million per year


July 26, 2017

Jerry Jimenez
SEIU Local 1000 Communications Director
(916) 554-1215


SACRAMENTO, Calif. — In the fiscal year 2016-2017, the state is spending approximately $2.5 billion annually on contracting out IT services, mostly for work well within the expertise of existing civil service IT professionals, according to a white paper released today by SEIU Local 1000.

The study also shows that updating the classification system could save taxpayers more than $700 million per year.

Read the white paper here.

This analysis reveals that an outdated and uncompetitive classification system is subsidizing the state’s longstanding addiction to contracting out for IT work. The need for these third-party contracts stems from the state’s inability to attract and hire sufficient IT professional’s due to a lack of competitive wages, too few professional development programs, and an inadequate staffing strategy—leaving taxpayers footing the bill for billions in misspent dollars.

The white paper illustrates the increase in vacant IT positions today —18.6% vs. 15.6% in 2008. In addition, the average tenure of civil service professionals has dropped from 9.4 years to 8.4 years in the same period. These vacancies force the state to pay a third-party contractor a whopping $110,790 more a year for work that can be performed by a civil servant— a vicious cycle rooted in an inability to recruit top talent with competitive salaries.

“We need to do the right thing for the taxpayer, the state and the state worker,” said Margarita Maldonado, Vice President for Bargaining for Local 1000. “Adjusting salaries so they are competitive will allow the state to attract and retain top talent, lower costs and increase productivity – a true win-win.”

The state is in the process of consolidating and streamlining IT classifications through the Civil Service Improvement Initiative (CSI). In addition to the goals of quicker hiring of the best candidates and streamlining job classifications, Local 1000 strongly recommends the state’s proposed reforms to focus on the retention and professional development of state workers. State workers see an opportunity to make-up ground in recruiting IT professionals and urge the state to expeditiously update the classification system.

“Taxpayers have paid a high price for the lack of a long-term plan for its IT workforce and we look forward to partnering with the state to finally be able to recruit and retain the best IT talent for the critical technology projects that lay ahead,” said Maldonado.

About SEIU Local 1000

Service Employees International Union Local 1000 is the largest union of state employees representing more than 96,000 state employees, including clerical workers, auditors, information technology professionals, teachers, planners, inspectors, printers, librarians, custodians, nurses and other health care professionals.