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SAIC Settles CityTime Case For $500.4 Million
First time accepted submitter arnott writes "Science Applications International Corp. said that it will pay $500.4 million in restitution and penalties under a settlement over its CityTime program with New York City. From the article: 'Two former SAIC employees have been charged with conspiring to defraud New York, and New York Mayor Michael R. Bloomberg (I) has called on the company to reimburse the city for the more than $600 million it spent on the program over an 11-year period.'"
So who will be the one to keep all that money?
I can hardly believe that the money will be spent for other projects or the citizens of NYC.
It's money they've already spent and it will be returned to the coffers of NYC. The next NYC budget proposal is for more than $68 billion. I'm sure they'll find a way to spend it.
SAIC is a highly evolved obligate parasite of government.
As with many highly evolved parasites, many capabilities are either vestigial or entirely absent; but the apparatus used to find, latch on to, and suck nutrients from, the host has been optimized to an impressive degree.
It's money they've already spent and it will be returned to the coffers of NYC.
http://newsandinsight.thomsonreuters.com/Securities/News/2012/03_-_March/SAIC_to_pay_NY_City_$500_mln_in_fraud_case/
"SAIC agreed to pay $370.4 million in restitution to the city, as well as a penalty of $130 million, according to a deferred prosecution agreement made public on Wednesday. The city will get $96 million of the penalty, with the rest going to the federal government."
So that would be $466 million total, but..
"In addition, New York City will not have to pay about $40 million of the bills it was charged."
So all in all, the judgement nets NYC $506 million.
I live and work in NYC. The Washington Post might love kissing billionaire technocrat ass, but Bloomberg didn't get this money back. In fact Bloomberg is responsible for letting SAIC rob over $600M on this contract, all the way until the bitter end while Bloomberg defended SAIC and its "cost overruns". As he finally admitted last Summer. It's the Federal prosecutor, Manhatttan US Attorney Preet Bharara, who clawed back this money. Though indeed even Bharara couldn't get it all back: the ripoff claimed $652M, the court awarded $540M, and the city might get from $466-518M. Meanwhile Bloomberg whined that getting the $500M wasn't done "in a more pleasant way". (FWIW, when his bankster cops were macing women on public sidewalks last Summer, he had no complaint that it couldn't be done in a more pleasant way). Bloomberg says we now have a functioning system "at a very reasonable cost", because he's not including all the costs of recovering the money in court. He defended this ripoff until the bitter end, and continues to spin it.
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make install -not war
Humanity? This is faith in the courts. If SAIC had been convicted instead of merely agreeing to keep a little more than it originally contracted, it could have lost much of the government contracts that are over 80% of its very big business.
The court told SAIC that its gamble here didn't pay off, but it didn't lose anything either. Try it again with a different city, a different court, and the law of averages (or bribery) could give you a 5:1 payoff!
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make install -not war
Critics say city employees could have done the work far less expensively. Bills spiraled out of control over the years, hitting $692 million, and city investigators brought federal prosecutors into the probe after uncovering payments routed through shell companies.
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SAIC agreed to pay $370.4 million in restitution to the city, as well as a penalty of $130 million, according to a deferred prosecution agreement made public on Wednesday. The city will get $96 million of the penalty, with the rest going to the federal government.
In addition, New York City will not have to pay about $40 million of the bills it was charged.
Let me see if I got this right:
-$692 million in bills +$40 million in canceled bills + $370.4 million in restitution + $(130-96) million in penalty payments = -$247.6 million
Shouldn't the restitution payment at least cover how much NYC originally paid?
This is an idiotic sweeping generalization. You had trouble on one contract therefore the 45,000 employees must all be useless and their billions in projects all have to be redone. Give me a break. There have been tremendous successes from literally genius minds in the company providing tech to the government not seen anywhere on the planet. I know, because I was there.
I worked for SAIC for 15 years. As they went public, the the management sold the soul of the company to centralize like the other huge contractors (Lockheed, NG, etc) and it killed off the culture.
There was a time when it was an entrepreneurial collection of small competing groups that focused on using really smart people to provide solutions. The company's reputation with the government was sterling for decades.
Then there was Trilogy, Greek Olympics, CityTime, and various data loss incidents. Combined with the IPO a few years back the company really stumbled.
That's why I quit.
Admittedly I have no experience with city contracts and living in a different country I don't know much about american government's procurement process but it seems to me that all their deals will be put under a microscope from now on. I wouldn't be surprised if they lost their government contracts anyway, regardless of the fine. Fact that an actual huge multinational corporation has actually been found guilty is what gives me hope.
They technically have not been found guilty of anything. had they been tried and found guilty, then they could have been barred from receiving new contracts but a settlement doesn't do that. At best some agencies may look at this and have second thoughts; but even so it may be tough, under the FAR (Fed Acquisition Regs)*, to not award them a contract on which they are the qualified low bidder simply because of the NYC settlement.
More than likely it will have little, if any, impact on SAIC's ability to win contracts. Oteh regencies will probably chalk it up to the typical implementation spat when a s/w project has problems.
* If you really want a sense of how Byzantine the FARs are; drop by the Defense Acquisition Portal https://dap.dau.mil/Pages/Default.aspx
I'm a consultant - I convert gibberish into cash-flow.
Is that given their federal track record, why would NYC give them something like this? Their prior performance at the federal level looks like the killing fields of Cambodia done on a bank statement. They're an institutional argument of why cost alone should never be a factor in awarding a contract; bang-for-the-buck instead because the feds have almost without fail gotten exactly what they've paid for from this company.