Public Employee Press

New law faces Bloomberg veto
Stronger rules on contracting

By GREGORY N. HEIRES

As the Bloomberg administration continued to be embarrassed by reports that it paid millions of dollars to crooked consultants, the City Council voted to strengthen a local law aimed at preventing contracting out from displacing public employees.

As soon as the City Council passed the legislation to improve Local Law 35 on Oct. 5, Mayor Michael R. Bloomberg said he would veto it. DC 37 Executive Director Lillian Roberts said the union would push hard for the Council to override the veto.

The amendments to the law would broaden the definition of displacement, extend coverage to non-mayoral agencies and expand the kinds of contracts covered.

The Council passed Local Law 35 in 1994 to make the contracting process more transparent and protect city workers from being displaced by contract workers.

The law requires the city to notify unions when a proposed contract would displace public employees. But Municipal Labor Committee unions have shown that the city routinely violates the law's intent by certifying falsely that proposed contracts will not cause displacement. In 50,000 contractual transactions since 2005, the city has not acknowledged a single instance of displacement.

"The amended legislation isn't perfect, but it would certainly be an improvement over the existing law," said DC 37 Associate Director Henry Garrido. "The changes will let the unions do a much better job of monitoring contracting."

Key improvements

Unions charge that the city evades the law by not disclosing that municipal jobs will be lost through attrition over the life of a contract. The amended law would make it clear that the city must notify the unions both of immediate displacement and if contracting out will displace city employees or eliminate their jobs down the road.

While the current law doesn't define displacement in detail, the new law says displacement includes any reduction of positions through attrition, layoffs, demotions, bumping or involuntary transfers.

Significantly, the new law would include the Health and Hospitals Corp., the New York City Housing Authority and the Dept. of Education. It would cover contracts of over $250,000 for a broad range of services from technical consulting and emergency procurement to legal services.

"By providing more transparency, the new law will help prevent the corruption that has become all
too common in the procurement process," Roberts said.

"Details about contracting scandals that have come to light recently show that city procurement is totally out of control," Garrido said. "Yet the mayor seems to be in denial about the corruption, which this new law should help prevent."

Contracting scandals

Garrido pointed to a number of contracting scandals that have tarnished Bloomberg's image as a no-nonsense manager:

• The cost overruns and corruption in the CityTime automated payroll project have dealt a major blow to the Bloomberg administration. CityTime's $700 million price tag is 10 times its original budget, and a dozen consultants on the project have been charged with fraud totaling $80 million.
• On Sept. 28, Richard J. Condon, special commissioner of investigation for the public schools, released a scathing report charging that Future Technology Associates stole $6 million from the school system by overcharging for employees.
• Condon said FTA owners Tamer Sevintuna and Jonathan Krohe set up a company in Turkey that hired consultants there for $10 to $14 an hour while charging the Dept. of Education at least $110 an hour. FTA lied about its experience to get its no-bid contract and falsely denied that it illegally hired subcontractors for the work, said the report.
• In September, the New York Times reported on an out-of-control project to modernize the computer system for personnel records: Over nine years, the cost of the New York City Automated Personnel System mushroomed from $60 million to a staggering $363 million. And the costs are still rising.