Written by Hendrick Townley with thanks to Aidan Feldman, Dan Getelman, Ruthie Nachmany and the rest of the Tech Mayor Project.
Did we miss anything? What other questions should we be asking? Send us a note at [email protected].
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Felix Stahlberg, CC BY 2.0 https://creativecommons.org/licenses/by/2.0, via Wikimedia Commons
Digital service teams help governments save money. The UK Government Digital Service saved billions while giving "thousands of hours back" to delivery teams. According to their 2020 impact report, the U.S. Digital Service saved $3.5 billion in one year (a 17x return on their team of ~200).
These savings happen in a few different ways. In-house talent can uncover simpler, less expensive solutions to solving problems for constituents and agency staff. In-house software development itself is less expensive than vendor rates. In-house technical staff also help agencies manage vendor relationships and better determine the true cost of software services, saving even more.
For example, a team of five at the NJ Office of Innovation created $780,000 in annual savings after 6 months of streamlining New Jersey's unemployment insurance portal. Within NYC there are reports of in-house technical staff rejecting multimillion-dollar vendor quotes and finding alternatives for a tenth the price.
How much does NYC spend on vendor work that digital service teams could do instead?
The Bottom Line
In FY2025, NYC spent at least $769 million on outside digital services that could be delivered in-house.
The true figure is certainly higher. The annual budget for NYC’s central technology office, OTI, alone is ~$800 million. More than $2.2 billion flows through vendors providing some mix of digital services and IT hardware. Our analysis also focused on the biggest vendors given the size of the dataset.
State and local government digital service teams with dozens of employees, such as the NJ Office of Innovation or Massachusetts Digital Service, operate on budgets in the tens of millions of dollars.
Why isn’t our city also investing in itself?
Digging Deeper
Checkbook NYC, the comptroller's transparency portal, publishes transaction-level city spending. This data includes the vendor name, budget code (a four-character code identifying the program being funded), and expense category (classifying what type of purchase was made). All three are imperfect indicators for whether a given vendor is relevant to digital services (see “methodology” below).
108 vendors (representing $566M in spending) offer primarily government digital services. Another 43 (representing $1.6B in spending) offer digital services among other products like hardware, infrastructure, and IT reselling.
30 budget codes (representing $492M in spending) are confirmed to primarily represent digital service work. Another 21 (representing $652M in spending) include digital services among other kinds of work (e.g., personnel costs and telecom infrastructure).
3 expense categories (representing $442M in spending) are confirmed to primarily represent digital service work. Another 14 (representing $18.6B in spending) include digital services among other kinds of purchases (e.g., hardware maintenance and general contracting).
Our floor estimate of $769M = $566M (digital vendors) + $203M (digital portion of mixed vendors using highest confidence expense categories)
Big Name Government Tech Projects
Budget codes also allow us to isolate spending on specific government technology projects that have received public attention.
MyCity, the Adams administration’s benefits portal, has received $52.7 million since FY2023 (top vendors: SHI International, CDW, and Prutech Solutions). Independent reporting estimated the project's cost at $100+ million suggesting that our analysis overall understates actual spending.
DOB NOW, the Department of Buildings' newest housing and construction permits portal, has received $114.3 million since FY2017, almost entirely through vendor Spruce Technology.
PASSPort, the city's procurement portal commissioned in 2016 by the Mayor's Office of Contract Services (MOCS), has received $90.2 million since FY2017, entirely through vendor Ivalua Inc.
CityTime, the city's timekeeping system, has received $86.0 million since FY2016 (top vendors: IBM, Mythics, SHI). This represents ongoing maintenance. The original project, which became a $700+ million scandal in 2011, predates our data.
NYC Cyber Command, the city's centralized cybersecurity operation established by de Blasio in 2017, has received $564.1 million through FY2025 (top vendors: SHI, CDW, Deloitte, IBM). Spending peaked at $116M in FY2023.
311, the city's non-emergency services hotline launched by Mayor Bloomberg in 2003, has received $41 million since FY2016 for IT vendors specifically (Mythics, CDW, Presidio) representing ~15% of total spending on the service.
These findings are just a starting point. What other questions should we be asking? We'd love collaborators to dig in with us. Read on for documentation on how to explore the data yourself.
A Note on Methodology
Summary data: NYC Tech Spend (data)
Github repository: nyc-tech-spending
We downloaded all spending transactions from Checkbook NYC for the 10 fiscal years FY2016 through FY2025 (5.6 GB of data, 29 million rows).
To find initial candidate vendors, we looked for top paid vendors serving OTI (still named DoITT in Checkbook agency data) or with the expense category "PROF SERV COMPUTER SERVICES". We then used LLM agents to research each vendor online and determine whether they provided primarily digital services (software development, IT consulting, system implementation) versus hardware resale or unrelated work.
Initial lists of budget codes and expense categories were found among those most commonly associated with the above vendors.
Budget codes are tricky. For example "Management Information Systems" (code 4170) is 41% traffic operations personnel. "Technology Strategy" (code 0901) is 69% juvenile justice and administrative staff.
Expense categories mislead too. "CONSTRUCTION-BUILDINGS" sounds like bricks and mortar, but Spruce Technology and Prutech bill to it for DOB NOW system implementation.
Once we had initial lists of confirmed vendors, budget codes, and expense categories, we cross-referenced them to find more of each in the others.
