Wednesday, November 2, 2011

CM James Introduces Legislation To Require City Agencies To Report Cost Overruns On Large Private Contracts

**FOR IMMEDIATE RELEASE** November 2, 2011

Contact: Aja Worthy-Davis at (212) 788-7081

Council Member Letitia James Introduces Legislation To Require City Agencies To Report Cost Overruns On Large Private Contracts

Bill Is In Response To Administration's Lack Of Oversight, Ongoing Review Of Contracts

New York, NY- On November 3, 2011, Council Member Letitia James will introduce legislation that would require City agencies to report to the Council cost overruns on large contracts. Specifically, agencies would be required to notify the Council within seven business days when it authorizes a payment to modify or extend an original contract worth more than $1M, for an additional cost of $500,000 and/or more than 10% over the original contract price.

During Council Member James’ tenure as Chair of the Contracts Committee, the committee held hearings on the outsourcing of public services to the private sector (as it affected both municipal workers throughout the City of New York, and public costs for potentially unnecessary private labor); as well as two oversight hearings on the Office of Payroll Administration’s City Time contract, a payroll system that she’d criticized as being overly costly and difficult to manage.

In September 2010, after Council Member James’ chairmanship ended, she stood with Local 375 (DC 37) to halt any further rolling-out of the Citytime project. She later commended Comptroller John Liu for ending expansion of the project due to ballooning costs and unmet deadlines, as well as his imposing hard deadlines on incomplete work. She joined numerous elected officials in speaking out against the $80M embezzlement of public funds by City Time consultants in December 2010, and praised Mayor Bloomberg for rightfully demanding $600 million from Science Applications International Corporation (contractor of Citytime) for what had become a public disaster for the administration.

In March 2011, former Deputy Mayor Stephen Goldsmith wrote an op-ed in the New York Daily News on the outsourcing of technology positions to private contractors. In the article, Mr. Goldsmith asserted that the issue was not the outsourcing itself, but rather the administration’s need to place more attention towards employing City workers to perform these IT duties. He also announced administrative efforts to increase positions for municipal workers. Council Member James commended the administration for taking these initial steps.

"It is obvious that a lack of administrative oversight of contracted companies leaves the City vulnerable," said Council Member James. "Although I support the administration developing technology that simplifies and updates necessary functions, I do not support the administration handing over blank checks to private companies for IT projects."

The Citytime contract increased from a projected $68 million at its onset to more than $738 million, the Emergency Communications Transformation Program went from an initial $380 million to $666 million, and NYCAPS has ballooned from $66 million in 2002 to $363 million as of 2011.


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