The State of Colorado has two controls in place to limit the impact of personal services contracts on classified state employees. First, the Department of Personnel is required by statute to review and approve the personnel impacts of all personal services contracts entered into by state agencies. Second, the Division of Human Resource Services within the Department of Personnel performs compliance audits. Together these controls appear to minimize the impact of private contracting on classified state employees. The General Assembly requested that the State Auditor conclude on the cost savings realized by personal services contracts.
State agencies enter into personal services contracts for several reasons, including cost savings.
First, contractors' skills allow them to provide specialized expertise. Second, contractors' independence from the state agency provides more objective perspectives. Third, due to FTE limitations, agencies may not have the necessary state employees to provide the service. Finally, agencies enter into some personal services contracts to achieve cost savings. For those contracts, cost savings were realized.