NYC Council To Vote TODAY on CM James’ Legislation To Require City Agencies To Report Cost Overruns On Large Private Contracts

**FOR IMMEDIATE RELEASE**
March 13, 2012

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

New York City Council To Vote on Council Member Letitia James’ Legislation To Require City Agencies To Report Cost Overruns On Large Private Contracts
Bill Is In Response To Administration’s Previous Lack Of Oversight, Ongoing Review Of Contracts

New York, NY— Last fall, Council Member Letitia James introduced legislation that would require City agencies to report to the New York City Council cost overruns on large contracts. The current legislation, Int. 707A-2011, would address construction and service contracts for capital projects with a minimum expenditure of $10 million. The bill would require additional oversight when such projects exceed the original cost by twenty percent or more.

Specifically, the Mayor would be required to notify the Council at two points in time— first, the Council would be notified of the initial request for a cost increase; and additionally, once the project extension or modification has taken place, the Council would be notified of any additional contract extensions or modifications that result in a 10% cost increase above the revised contract value.

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 well as two oversight hearings on the Office of Payroll Administration’s City Time contract, which she criticized at the time as costly and poorly-managed. Since 2010, she has requested that the Council’s Contracts Committee investigate the Emergency Communications Transformation Program (ECTP) project and what was at the time a $286M contract request from the City of New York; the administrative layoffs of the New York City Deputy Sheriffs’ and the contracting out of their collection duties; the rising costs of the NYCAPS program; and more recently a $1.95M NYC Health and Hospitals Corporation contract with Navigat, a private consulting company.

“In the last five years, contract costs have increased at nearly twice the rate of overall budget spending, reaching over ten billion in spent public funds,” said Council Member Letitia James. “The vast majority of these expenditures go towards personnel and professional service contracts, and there has been considerable evidence that some of these contracts are poorly-managed and lack needed oversight. I hope this legislation strengthens the Council’s commitment to contracts review, and the overall goal of cutting costs and identifying savings.”

On October 31, 2011, the Contracts and Technology Committees discussed Int. 707 in a hearing entitled, “Managing NYC Government IT Contracts”. Additionally, in the last year Council Member Letitia James’ has introduced legislation that would create a New York City Chief Procurement Officer who would publish and submit to the Mayor, City Council, and City Comptroller an annual report detailing information on City contracts. She has also introduced legislation that would establish a task force on best practices in City procurement and disposal.

The New York City Council will vote on Int. 707A-2011 at the Stated Meeting on Wednesday, March 14, 2012, following a Contracts Committee vote earlier in the day.

###