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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.
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.
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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.
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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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.
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.
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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