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Comptroller Accuses HP of Overcharging NYC $163m On 911 System
benfrog writes "New York City comptroller John Liu has accused HP of overcharging New York City $163 million on upgrades to its 911 system. According to a statement put out by Liu, an audit of the project revealed that HP did not perform up to spec on the contract between April 2005 and April 2008 and did not bill the city correctly for time and materials on its portion of the contract to upgrade the 911 system. According to Liu's reading, the contract was supposed to cost no more than $378 million over five years, but in January the city projected it would have already spent $307m by mid-April and had to award Northrop-Grumman an additional $286m to do a second part of the original contract, ballooning the cost to $632m, and Liu's office is now estimating that cost overruns beyond this could be as high as an additional $362m. NYC's deputy mayor for operations was quoted defending the contract."
How do I get in on the action? I do quite a bit of contract work these days, and it's almost impossible to pursuade any clients to accept any risk (i.e. by billing time, rather than a fixed cost) on R&D projects, even with a heavy element of R. How these large companies manage to pursuade others to write them a blank cheque is beyond me.
And before anyone mentions the government, Oracle seems to be very good at doing that with companies and other non-governmental organisations. I don't think I've heard of anyone who has done business with Oracle and not been fucked over by them.
I think it's just a reality distortion field which large companies have. Perhaps that's why they are large companies.
SJW n. One who posts facts.
According the the Deputy Mayor for Operations, nothing was overbilled.
The reason these giant IT projects almost always cost more than the original bid is that the purchasing entity (NYC in this case) frequently either hides or isn't aware of some of the items that will affect the cost.
In a bad economic environment, this means there's ALWAYS someone saying "that company screwed this system up, delivered late, overbudget, and violated the terms of the contract!" Sometimes it's true that the contractor screwed up, but frequently the purchaser makes it impossible to deliver according to original cost projections.
You almost have to admire HP for fucking it up so badly that somebody voluntarily hired a defense contractor in the hope that they would be more competent and efficient...
the Apollo program... ..the last time the US goverenment accomplished anything that actually mattered
A fake moon landing? ;-)
This sort of problem is going to be inherent to a system that makes decisions entirely based on the lowest bid.
sign contract
start changing conditions of SoW or the hardware you want
agree to cost overruns
complain
This is the second contract software project over $100 million that NYC has screwed up in just the past couple of years. (CityTime was the other.)
NYC is a big city which no doubt has lots of custom software projects it needs to do. Wouldn't it make more sense to hire employees to do this? It couldn't possibly cost more than the $600 million (!) of overbilling on CityTime plus the $160 million overbilling on this new white elephant. And they'd have actual control over the people they hire, and be able to hold them fully accountable if/when something went wrong.
The old jokes about $500 hammers notwithstanding, it's amusing to me how corporations are almost universally blamed when government contracts overrun. Nobody seems to notice that it's only government contracts that do this regularly -- normal companies that do this go out of business or into bankruptcy.
Back here in the real world, we call this piss-poor planning, usually traced back to marketing/sales causing constant feature creep or declaring ex post facto that a certain spec (that THEY WROTE!) doesn't meet customer/program demands.
I wonder, has anyone ever seen a post-mortem review of a government contract? Does government ever even attempt to figure out where the inefficiencies lie and correct them or at least plan for them next round?
Also, in before the NASA boogeyman shows up.
More than half a billion dollars for a project to take 911 calls? WTF? I mean even in my wildest dreams, with mapping and links to other systems and who knows what, how in the heck does it cost that much?
I bet HP doesn't want to fight a PR battle with a major customer and potential customer. Anything substantive they say about this would probably be in the course of a formal investigation.
Hmmm... Maybe I'm reading this wrong and this is really a political battle between the Comptroller and the Deputy mayor for Operations, where the Comptroller is trying to pin the blame for what he asserts is an overly expensive project on the Operations guy.
Unfortunately a lot of government contracts have all kinds of built in ways for vendors to bid low at the front and charge high at the back (particularly if a high level government official who somehow makes out is willing to run interference.) The Deputy Mayor says this was a good contract... perhaps there's a new McMansion in the Hamptons? Country Club Membership? Pools, Tennis Courts? Yacht? Heck, that wasn't a good contract... that was a great contract!!!
The reason these giant IT projects almost always cost more than the original bid is that the purchasing entity (NYC in this case) frequently either hides or isn't aware of some of the items that will affect the cost.
Whose job is it to ensure that contracts are properly specced out? Who manages that person? Fire the manager.
Give me Classic Slashdot or give me death!
I worked in IT for a city that was bidding on a new city-wide VoIP system. The awarded the project to the lowest bidder, of course. In the end, it ballooned to more than double of what the original bid was (costing more than the most expensive bid that was originally submitted). The stuff they did implement was shoddy at best. Nothing worked as it was proposed. A total nightmare.
The City sued and they settled out of court.
big projects get loaded with contractors and subs and that can add lot's of over head and lot's people sitting on there ass waiting for paper work or other stuff to get done.
No, you are reading this wrong. NYC Comptroller is running for mayor. He is using this "scandal" in order to get his name out in front of the voters. Personally, I think this makes him look like Eliot Spitzer. If you don't know what a sleazeball Eliot Spitzer was, read his Wikipedia page and realize that it was sanitized (not particularly because of political bias, primarily because the unsanitized version would sound too tabloid).
The truth is that all men having power ought to be mistrusted. James Madison
Colour me a non-American, but how is New York City's budget paid for by your federal taxes? In Australia, income taxes are collected at the federal level, and don't get apportioned to city councils - they have to levy their own taxes/rates etc.
... wait, what?