Public Employee Press

White Paper Anti-Privatization Campaign
Union hits contracting out in schools system

DC 37’s newest white paper, “Massive Waste at a Time of Need,” calls the city’s $9 billion spending on outside contracts “unregulated fiscal irresponsibility” and blasts the Dept. of Education for wasteful contracting out.

— Part 1 of a series on contracting out

By GREGORY N. HEIRES

The Dept. of Education contract budget for the next fiscal year is $3.3 billion, accounting for more than a third of the city’s contracting-out expenditures.

You might think the agency responsible for educating more than 1 million schoolchildren would be held accountable for its spending on outside contracts.

Wrong!

The Dept. of Education has come under fire for what Comptroller William C. Thompson describes as “runaway contracts.”

The criticism by Thompson and other city officials is similar to the charges DC 37 Executive Director Lillian Roberts made in the union’s recent white paper report, “Massive Waste at a Time of Need.” The study, written by Assistant Associate Director Henry Garrido, documents the vast waste in the city’s spending on contracts.

DC 37 President Veronica Montgomery-Costa, who is also president of Board of Education Employees Local 372, pointed out at a City Council hearing on April 1 that the school system could save millions of dollars by cutting back on its wasteful contracts with outside businesses.

“It must not be our mission to make outside corporations richer,” said Montgomery-Costa, who described widespread fraud and cost overruns in DOE’s bidding process and called on the City Council’s Education Committee to investigate.

Attendance program

She questioned the Dept. of Education’s decision to let go Family Paraprofessionals represented by Local 372 to hire the United Way to run its attendance program.

Even with a sophisticated computer program that cost tens of millions of dollars, the attendance program — relying on impersonal phone calls to check on absences — cannot match reliability of the Family Paraprofessionals, who visited homes and interacted with teachers and parents to address attendance problems, said Montgomery-Costa.

The same day that Montgomery-Costa testified, Thompson released his report on “runaway contracts” at DOE.

Thompson said 20 percent of the department’s contracts over the past two years resulted in cost overruns of 25 percent or more. The department had 127 no-bid contracts during the two years. The contracts were supposed to cost $196 million, but the final tab was $525 million.

He charged that DOE has an “ill-considered opinion that its contracts do not require the same stringent safeguards as those of other agencies. As a result, taxpayer money continues to be squandered. This is unacceptable.”

The following day, Garrido blasted contracting out in the schools in testimony before the City Council Education Committee. At a time when tens of thousands of New Yorkers are losing their jobs, the department is “contracting out services at a higher cost than if they hired permanent civil servants,” said Garrido.

City Council members Letitia James, who chairs the Council’s Contracts Committee, and Melinda Katz have sponsored a resolution calling on the State Legislature to require DOE to follow the same procurement rules required of other city agencies under the New York City Charter.

In March, City Council member Bill de Blasio issued a report, “Show and Tell,” about wasteful contracting at DOE. He highlighted a faulty $80 million IBM-designed computer system to track student performance, which ran into huge delays and remained “inaccessible to parents, teachers, and administrators.” In the end, he said, many schools had to buy their own “data tracking systems to ensure compliance with No Child Left Behind.”

When the state abolished the Board of Education in 2002 and put the school system under mayoral control (an arrangement opposed by the union), the legislation failed to deal with oversight of contracting out.

Consequently, no-bid contracts in the schools ballooned from between $37 million and $56 million in 2003, 2004 and 2005 to a high of $121 million in 2006, according to the resolution. No-bid contracts have totaled $315 million over the past five years.