Part 2 in a
Union fights growth of contracting
Three worst rip-offs
Three cases exposed by DC 37 and the media demonstrate
the pitfalls of doling out projects to contractors for work that union members
could do more efficiently:
Last month, after looking into contracts for the CityTime payroll system,
which he described as an endless money pit, New York City Comptroller
John C. Liu called for a freeze on city payments.
In 1998, the city budgeted
$68 million to com-puterize the Office of Payroll Administrations timesheet
system for 145,000 employees. Now, 12 years later, the project covers only 46,000
workers, but the citys contract with Science Applications International
Corp. to implement the new system has mushroomed to $722 million a 1,000
percent cost overrun.
This is contracting run amok, said
Assistant Associate Director Henry A. Garrido, who heads the unions white
paper project on contracting out. There are more than 300 consultants working
on CityTime, and more than a dozen of them make $300,000 each, nearly triple what
the most highly compensated city computer workers earn. This is a total waste.
The citys contract with Spherion, the company responsible for monitoring
the project, is itself an example of the revolving door between government and
contractors: OPA Executive Director Joe Bundy formerly worked for SAIC, a military
Mayor Michael R. Bloomberg has admitted that the long-delayed
and over-budget system to replace paper timesheets is a disaster.
Yet he has offered no plan to repair it.
This project should be
put on hold and be audited, DC 37 Executive Director Lillian Roberts said.
Emergency Communication Transformation Project
The contracted-out project to revamp the citys 911 emergency call-in
and dispatch system is running $730 million over-budget and two years behind schedule.
Former Dept. of Information, Technology and Telecommunications Commissioner
Gino Menchini and his deputy, Larry Knafo, awarded a $380 million contract to
Hewlett-Packard to oversee the project. Later, they joined Northrop Grumman, one
of H-Ps subcontractors. H-P consultants typically earn $375,000 a year on
School Payroll System
Future Technology Associates has won no-bid contracts to develop a computerized
payroll system and upgrade the financial management software system at the Dept.
The companys administration is a bit mysterious as
FTA maintains mail drop-off offices in Jackson, Fla., and Brooklyn.
average price of the 63 full-time consultants on its payroll is $250,000 a year,
compared with the less than $140,000 it would cost for city workers to do the
job. Many of the high-priced consultants are in the United States under H1B guest
worker visas. By eliminating contracting waste, DOE could have easily funded the
jobs of 500 School Aides laid off last year.
Gregory N. Heires
Bloomberg raises contract budget
GREGORY N. HEIRES
Photo by Gregory N. Heires
and service reductions looming, the Bloomberg administration plans to increase
its wasteful spending on contractors and consultants next year.
on contracts would increase from $9.2 billion in the current 2010 fiscal year
to $9.5 billion in fiscal year 2011 if the mayors preliminary budget is
Its distressing to see this administration con-tinuing
to spend and spend on outside contracts with no effort to curtail the vast waste
in these deals or save money by keeping work in-house, DC 37 Executive Director
Lillian Roberts said. The excessive use of contractors also denies opportunities
for people on civil service lists.
Last February, the union released
Massive Waste in a Time of Need, a study that showed how the city
could save $130 million by scrapping 10 contracts in eight city agencies.
A year later, despite the glaring examples of waste that have come to light
(see article above), the administration has failed to review its 18,000 outside
contracts. Yet while the unmet human needs of the citys population soar,
the mayor chooses to increase the giveaways to contractors and consultants by
On Feb. 23, the City Council Contracts Committee met to
discuss the administrations procurement policy. At the hearing, Assistant
Associate Director Henry Garrido disputed the administrations claim that
it had tightened up its procurement rules.
It doesnt matter
how good the rules are if you dont follow through, said Garrido, who
heads the unions white paper project on contracting out. In fact,
we have seen a proliferation of no-bid contracts.
DC 37 Asst.
noted that new procurement rules allow longer personnel and professional services
contracts. Such contracts used to be limited to three years, but a change in the
rules now allows for seven-year agreements.
Easing city contracting out
is a serious concern for the union, because the administration has apparently
made a policy decision to shift more human services to the private sector.
When the Administration for Childrens Services laid off over 500 workers
last year, SSEU Local 371 President Faye Moore pointed out that the move was driven
more by a policy decision to shift work from public employees to contractors than
a concern about saving money.
Garrido noted that contracting out is also
a major issue at the Dept. of Education.
We are seeing an increase
in no-bid contracts at DOE, where they dont have to follow the same procurement
rules as other mayoral agencies, he said. Ironically, a few years
ago, when the state approved the law to put public schools under the mayors
control, they claimed there would be more transparency. But thats not happening.
Garrido called for greater transparency and accountability in contracting
when he testified on Roberts behalf March 4 at a joint hearing of the City
Councils Finance and Contracts Committees.
Unlike New York
State, the city is not required to report how many consultants it has or how many
hours they are logging, Garrido said. City officials dont even
consider basic business practices, such cost-benefit analyses and cost containment
Progressive new state laws foster savings through contracting
in services previously performed by consultants, he said.
costs and increase accountability, DC 37 believes the city should reform its procurement
process by tracking how many contract workers it employs and performing cost-benefit
analyses on contracts worth more than $1 million.