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Public
Employee Press Shadow government
wastes millions Contractors, consultants and
corruption
By GREGORY N. HEIRES
The citys
growing reliance on contracting out municipal work without government oversight
causes a huge waste of taxpayers dollars, say union and other critics of
the practice.
The traditional argument for contracting out is to promote
efficiency and save money. But in reality, as the city has dramatically increased
its spending on contracting out, costs have increased and many services have deteriorated.
Today
the story of contracting out includes criminality, waste, illegal exploitation
of low-paid workers, excessive compensation for high-paid consultants who are
taking jobs from civil servants and a shocking lack of public accountability.
Over
the past eight years, contracting out has eroded services and raised costs,
DC 37 Executive Director Lillian Roberts told City Council members May 7 at a
joint hearing of the Contract Committee and the Civil Service Committee.
James
A. Parrott, Chief Economist of the Fiscal Policy Institute, noted that the mayors
executive budget proposal funds 18,000 outside contracts at a cost of $9.25 billion.
The spending includes tens of millions of dollars for work that is normally done
by city employees, including clerical, cleaning, security, accounting, engineering,
architectural and computer services, Parrott said.
Service contracts
with for-profit providers are more costly because of the very high overhead and
profit margins, Parrott said.
Earlier this year, Roberts issued a
white paper, Massive Waste at a Time of Need, written by Assistant
Associate Director Henry Garrido, that identifies 10 instances in which the city
could save a total of $130 million by contracting in functions such as accounting,
public nursing, computer services and supplying food to public schools.
Shadow
government
Responding to a question
from Contract Committee Chair Letitia James, Garrido estimated that over the years,
DC 37 has lost 5,000 positions through attrition as the city has increased its
spending on contracting out, which has ballooned from $4 billion in 2005 to over
$9 billion today. Roberts charged that contracting out has created a shadow
government of 100,000 consultants and contract workers and said she believes
that civil servants represented by DC 37 could replace an astounding 50,000 of
those workers and do the jobs more efficiently.
Time and time
again, we have seen reports of criminal activity by contract employees and we
have seen contractors make fat profits by illegally underpaying their employees
while the city pays costs that far exceed the salaries and benefits of permanent
employees, Roberts said.
Sleazy contractors
Board
of Education Employees Local 372 Executive Vice President Santos Crespo testified
about the wasteful and corrupt contracting practices in the school system. He
noted that Special Commissioner of Investigations Richard S. Condon and Comptroller
William C. Thompson Jr. had documented bid-rigging, low-balling and no-bid contracts
in the Dept. of Education, resulting in the loss of millions of dollars. Contracting
in food delivery to Loaders and Handlers in Local 372 would save $4 million a
year, he said.
Crespo also slammed DOE for wasting millions of dollars
on an outsourced computer program for checking attendance when using Local 372
Family Paraprofessionals could save tens of millions of tax dollars.
The
outsourcing needs to stop, Crespo said.
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