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NYC Mayor Demands $600M Refund On Software Project
alphadogg writes "New York Mayor Michael Bloomberg is demanding that systems integrator Science Applications International Corporation reimburse more than $600 million it was paid in connection with the troubled CityTime software project, a long-running effort to overhaul the city's payroll system. 'The City relied on the integrity of SAIC as one of the nation's leading technology application companies to execute the CityTime project within a reasonable amount of time and within budget given the system's size and complexity,' Bloomberg wrote in a letter Wednesday to SAIC CEO Walter Havenstein. CityTime was launched in 2003 at a budget of $63 million, but costs swelled dramatically as the project stumbled along for nearly a decade."
The Honorable Mayor Bloomberg is shocked, shocked, to discover fraud and waste going on here...
Last time I heard of them, it was with the failed FBI casebook system. Does SAIC have a generally good delivery rate on projects otherwise?
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Nothing seems so simple as Time and Attendance software until you to write/consult on/implement Time and Attendance software.
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It's about time someone is calling out a company on their massive budget overrun. The SOP of underbidding contracts just to get them, knowing full well that you can just ignore the budget is nothing more than systemic fraud.
Why they decided to pay $600M and then ask for a refund is a bit perplexing.
The EULA specifically says that you can't ever, never sue us--for any reason. It also says that this software is not in any way obligated to ever function.
Hey, you clicked through it.
SJW: Someone who has run out of real oppression, and has to fake it.
You do not sound like an incompetent bureaucrat that wants to turn around and blame the contractor if anything goes wrong, all-the-while both changing and adding requirements throughout the project.
With that said, I would hope that SAIC could have bought a company that already makes time management software on the desired scale for a fraction of the current cost. Maybe even for a portion of the original $63 million estimate.
I am not sure what is so special about a city that they need their own unique time management system. It's not like there aren't a bajillion in existence already ranging from overly simple to extremely complex. While I'm sure they need the extremely complex region, it really should have been handed to a company with experience in the arena already to either purchase an existing product, or add required features to one.
There I go thinking about someone outside of the government. I'll move along now.
"[New York City] just laid off 500 public school aides who make $18,000 a year, while they’re paying all these [230 software consultants] that are making $400,000 and $500,000 a year for a failed system." http://www.democracynow.org/2010/3/26/juan_gonzalez_ny_pays_230_consultants
Probably a combination of several things. First of all it's probably been a disconnect between the tactical operation of the project (let's approve of budget increase to get enhancements x and y, consulting help to solve problem z and so on) and the strategical operation (should this project be red-flagged and halted/abandoned). You'd be surprised how many organizations really lack that emergency brake and when the train wreck finally happens everybody wonders why it wasn't stopped before.
The second part is that for the most part projects aren't a scandal until they're officially scrapped. That means that in very political organizations you're looking to finish it somehow to back out gracefully. This leads to a high willingness to throw good money after bad, particularly if some of the key decision makers now hold high places in the organization. The only exception to this is when the new boss wants to deliberately throw the old boss' projects under the bus.
And finally since this is turning into criminal investigations and all, they probably sailed under false flag. You can string a client along pretty far if you have absolutely no ethics and make business cases that are utterly false yet plausible. They were probably given a lot of good lies about the system being right around the corner to working and a lot of good excuses for why it'd take just a little more money. At least if the City's project manager was a wimp - and he was either that or corrupt too.
Live today, because you never know what tomorrow brings
CityTime was launched in 2003 at a budget of $63 million, but costs swelled dramatically as the project stumbled along for nearly a decade.
- this is the problem with government programs: from the very beginning they are already deep in trouble. It makes no sense that a computer payroll system should start at 63 million, why did it start at that number from the beginning?
It makes no sense that government should be so large, as to require a computer payroll system that starts as a 63 million project, never mind that anybody getting that contract will make their best to prolong it as much as possible, simply because it IS government and it does not care about costs.
When somebody says that government can do things efficiently, and they use the postal office as an example, they should really go back to that premise and realize, that the US post office is out of cash - it's selling 'forever stamps' today, and assuming it doesn't just dissolve over the next few years, it won't be able to make any money at that time and it will be in a worse fiscal shape than it is today, because the stamps sold today are basically protection against the 10% (current level) of monetary inflation that US Fed and Treasury are incurring on US population. Today the postal office cannot function already and they sell the forever stamps, tomorrow, they'll have to raise the prices but people will use those forever stamps and the postal office will either have to default on that stamp or dissolve, or there will be another bail out, and people use that as one of 'better' examples of government 'efficiency'.
Another example they give is Medicare, while not realizing that Medicare costs are spread out among various parts of government that are not calculated into the costs directly, and just like SS, that program is bankrupt today, being the biggest pyramid scams of all times, making Madoff look like a preschooler.
Anyway, back to this topic - who was the NYC mayor at the time when this ridiculous project started I wonder? Oh wait, Bloomberg has been the mayor of NYC since 2002 and this project started in 2003. So where was he all the time when the costs overran by x2, by x3, by x5, is the magic number for a politician to look at some cost overruns only when they exceed the x10 estimate?
People blame corporations and businesses for waste and fraud, but at least corporations and businesses have to extract their money from customers (well, unless they are government protected monopolies of-course) by selling products that customers want.
When business overruns its costs and credits like that, it likely goes under. Shouldn't the same apply to governments? I think it should. And those, who are allowing the money of tax payers to be wasted like that do need to spend some time thinking about in jail. Same should be done on all levels - federal and state and municipal, maybe then the governments will stop bailing out failing businesses and causing massive economic collapses.
You can't handle the truth.
Did this city have public unions where your software was threatening their jobs?
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Yes, I have actually worked in this field. And yes, payroll is more complicated than it seems on the surface. But it's not that complicated. It's not "I can build a dozen F-14s for less" complicated.
The money spent on these types of applications is just obscene. There's gotta be major corruption in the procurement process. And it's everywhere; this isn't just a NYC problem.
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No one happens to know of a way to take ownership of posts you mistakenly posted anonymously?
Naw, and probably won't happen. Too many people who are afraid of posting something that might not fit in with what ever group think they "think" is happening on /.
You know those "I'm posting AC because I can't speak my mind otherwise because I would get modded down one point." morons. They would just post AC, see how it panned out, then if it didn't work out they would leave it be, but if it got modded positively they would try to reclaim ownership.
Don't know something? Look it up. Still don't know? Then ask.
Firefox just changed to a catch-me-if-you-can model of stability. Wikipedia has errors in the article about the Wikipedia; and what little it has for organizational coherence is owed to limits on who can pwn whom within its ranks. LibreOffice doesn't really know if it exists or if Larry Ellison is just letting them fall to the end of their rope.
Projects that are led by individuals with clear vision of the problem and the solution get done the way they're supposed to.
Projects that are led by groups of individuals with varying understanding of the problem and noisy copies of the solution statement get done by someone saying "ENOUGH!", cutting off the funding, and shipping what remains.
This is what happens when you privatize an important function of government.
Nothing was privatized. The government hired a private contractor to do the job. This is how the vast majority of government projects are completed.
I wonder how much of the federal budget deficit has ended up in the pockets of private contractors who overran costs and then didn't perform up to expectations.
It depends on how you define overruns. Many government contracts are for projects that are large and complex to the point they cannot be completely defined before the work starts. If the government issues a contract with clauses to cover cost escalations, agrees to the cost escalations, and pays for the escalations, is it not the vendor's fault.
Bloomberg should be suing his contracting managers. I'm quite sure SAIC did not bill a dime until they had a contract to bill against.
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Well I'm sure that public projects have boards of individually talented people running them and vested to a degree in their success, and let's not forget that the greatest things we've ever done (sanitation, electricity, the welfare state, insert your own list here, civil engineering mega projects) have been public works.
I dunno, maybe this project is being run by people better suited to another career, it's certainly too complex to sum up in a sentence or two! The point I failed to make was that public projects seem to sit in special sort of bubble immune to anyone really kicking up a stink about them going wrong. The public peeks in from time to time as if gawking at a train crash where no one they know got hurt, gasps and shakes their head, then promptly forgets about it whilst the whole endeavour churns merrily along sucking up resource and offering no value. I was lamenting how easy it is to write something off as somebody else's problem more than anything.
I, for one, am very happy to spend 10 minutes writing about this on Slashdot - instead of actually trying to participate.
This argument only holds weight if we assume that government employees are qualified and capable of managing a project of this size and scope for less money than the private contractors' bid. We have a huge deficit because we keep spending like a piss-drunk sailor, without any regards for how much money the government actually has in its pocket - unless you're arguing that the government could do all of the work it outsources to private firms today for less money in-house, I'm not sure what your point is.
Agreed, and Bloomberg is completely correct in trying to recoup some of the city's losses. However, it's also worth noting that there's way more than simple "management incompetence" at work here - indictments have already been filed against numerous people working on the project for defrauding the city out of millions of dollars. I suspect we'll find a lot of blame that can be shared around between SAIC and its subcontractors, and city officials.
See http://online.wsj.com/article/SB10001424052702303936704576398100826124240.html for a fairly thorough writeup on what investigators have uncovered so far.
You don't have to postulate corruption to see this kind of thing at this scale.
All you have to do is give every little section chief in every backwater bureau of city government an opportunity to make their own little demands for special treatment. Get the unions involved and all bets are off.
Rolling Requirements are the usual cause of such expansions, not corruption.
Sig Battery depleted. Reverting to safe mode.
A piece of advice I was once given by an old coder:
"If you ever do contract work for government make a special effort to cover your arse because you'll be blamed when something goes wrong no matter what.
Especially if it's their fault. "
Compare the cost of US military troops in Iraq vs contractor personnel in Iraq.
If we can handle a moon landing, the invasion of Normandy, the Tennessee Valley Authority and Hoover Dam, and the Manhattan Project, I'm pretty sure we can handle putting together a payroll system.
Here in Chicago, we had a public parking system that was hugely profitable, convenient and cheap. It was sold to a private company over a year ago to cover a budget shortfall arising out of the real estate crash and now parking fees have gone up 1600%, you are limited to 2 hours (in order to increase violations) and the privately hired enforcement workers are rude, ignorant and obnoxious. Sundays and holidays are no longer free. The situation is so bad that businesses along major streets are suffering because people don't want to deal with it. The public operation was far superior to the private one.
Oh, and the private outfit that manages parking says they cannot make a profit even with the 1600% increase, so they're going to be raising parking prices yet again. The prices are so high that they had to take out the parking meters and put in these big machines that take credit cards (but not dollar bills). Oh, and the machines are always broken (which does not prevent you from being fined for not paying).
Governments can certainly handle large, complex projects and do it more efficiently than the private sector. When you take out the 20-100% (minimum) profit margins that privateers add, it's not even close.
Say, how well are those private space exploration companies doing? I'm sure by now they must have mines set up on Mars.
Profit is not all it's cracked up to be.
You are welcome on my lawn.
Because large government programs always run on time and on budget.
The irony that you're missing is this is a Private Corporation who can't get it's crap together and complete a Public Works project, on time and within the budget constraints. So much for the private sector. Perhaps we can stop these broad brush strokes and come to reality, by focusing on efficiency and the quality of solution [public or private] in joint partnerships, instead of the same toothless talking points. We call that growing up.
The reason it's SOP to underbid the contract is that it's the only way to actually win the contract. Government entities award the contract based on the bid. They don't care that there's no way in hell their sprawling (and ever changing) requirements will drive the cost well past the original bid by several orders of magnitude.
That's still criminal fraud on the part of SAIC. If you know you can't do it for the number quoted, to sign a contract saying you can is fraud. To use improper change control procedures in order to take advantage of a client to make an end run around the contract is fraud. There's almost nothing I can think of that would have SAIC not guilty of fraud.
Not that this excuses any actions by the government. They were incompetent at best, and felonious co-conspirators at the worst. But no likely actions by the city excuse SAIC spending so much more than the contract.
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Compare the cost of US military troops in Iraq vs contractor personnel in Iraq.
- excuse me? Since when is a for-profit war supposed to spend less money rather than more money on private contracts?
Are you suggesting that outfits like Blackwater are not enjoying very close government relations and are not treated like a monopoly and are not cycling the money back to various politicians' campaigns and private hands to be part of that racket?
If we can handle a moon landing, the invasion of Normandy, the Tennessee Valley Authority and Hoover Dam, and the Manhattan Project, I'm pretty sure we can handle putting together a payroll system.
- are you saying that all those things were cost-averse? I mean, 'invasion of Normandy' and Moon Landing (which was largely funded by SS money, BTW.)
The only reason to have government is to provide military protection and with wars that have a clear stated objective and that are supported largely by the entire nations, the cost-overruns are totally looked over.
As to things like 'payroll systems' - any government contract will be milked out of as much cash as that branch of government can shell out to the maximum by whoever gets the contract.
Here in Chicago, we had a public parking system that was hugely profitable, convenient and cheap.
- yeah, like post office and US military and Medicare are 'hugely profitable, convenient and cheap'.
Government doesn't have to report to you the real costs, the money that is spent on administration and maintenance and all other costs (never mind not having to pay actual taxes), are spread around multiple government offices, hiding the true costs, and the true costs are taxes and destruction of economy and currency.
Oh, and the private outfit that manages parking says they cannot make a profit even with the 1600% increase, so they're going to be raising parking prices yet again.
- I'd be looking into their ties to the government, that sold them the property.
Governments can certainly handle large, complex projects and do it more efficiently than the private sector. When you take out the 20-100% (minimum) profit margins that privateers add, it's not even close.
- nonsense. They can handle large complex projects simply because they have all the money in the world, which they can borrow and print and tax, not because they are more efficient magically. Efficiencies come out of search for more profit.
You see, to have efficiency you must be looking for profit. If you are not looking for profit, then the difference between your expense and your revenue is irrelevant, so why would you be looking for efficiencies? It makes no sense. And government accounting practices are not different from Enron and Madoff's accounting practices, as government can make all sorts of 'projections', making all sorts of assumptions about the future but it is never called out when all of those assumptions fail (and they do fail).
Just like their rosy assumptions that interest rates will stay low for years to come - total nonsense.
Say, how well are those private space exploration companies doing? I'm sure by now they must have mines set up on Mars.
- maybe, if government wasn't eating all the credit, wasn't mis-allocating all of the resources, wasn't taxing and regulating business out of business, maybe if governments wasn't subsidizing all sorts of large monopolies in energy and mining (and banking and insurance and manufacturing and agriculture and pharma and health and communications and war and education), if gov't wasn't doing all of that with money it steals from actual producers, then companies would find a case for such operations, which are clearly nonsense based on today's reality.
Government does things not because it's more efficient, it does things because it controls the money.
You can't handle the truth.