Disclose the details: Cloaked city technology contracts result in $185K for a help desk operator
Juan Gonzalez, Daily News, Friday, March 18th 2011, 4:00 AM
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New York City's private computer army keeps mushrooming under Mayor Bloomberg - and no one has any idea of its exact size.

What we do know is the city's overall contract spending has doubled to more than $10 billion in the last five years - and a huge part of the increase is for technology contracts.

Those computer armies can be found inside every city agency. Its foot soldiers sit at city desks.

They carry city ID cards. They spend all their time - often years - devising and maintaining huge information systems with Orwellian names like NYC WIN, ECTP, ACRIS, NICE, CitiServ.

Yet the outside contractors remain a world apart from the ordinary civil servants of our city. The techies routinely bill taxpayers for enormous salaries.

Since their salaries often come out of the city's capital budget, their names, titles and pay rates rarely appear in any expense reports the mayor makes public.

Last week, Brooklyn City Councilwoman Letitia James took a bold step. She introduced a bill that would require an annual report on the size and cost of outside contractors.

"This period of budget deficits is not the time to increase outsourcing," James said.

This column has documented for more than two years the runaway costs of such contracts. They include:
# The 63 consultants from a little-known Florida-based company, Future Technology Associates, being paid an average of $250,000 a year to develop a new financial accounting system for the Department of Education. All of this money went to a firm that had no office and operated out of a mail drop.


# The 230 consultants from defense giant SAIC who were paid an average of $400,000 a year - some of them for a decade - to design and install the infamous CityTime payroll and timekeeping system.


# The nearly 200 Hewlett-Packard consultants who spent years overseeing the $2 billion upgrade to the city's 911 system, known as ECTP. Before Hewlett-Packard was bounced from the job for repeated delays and cost overruns, most of its consultants were being paid between $300,000 and $400,000.


# The $500 million paid to Northrop Grumman to erect NYC WIN, a wireless network for first responders that has been dogged by problems. On top of that initial expense, the city pays Northrop $37 million annually just to maintain NYC WIN.





Under Northrop's contract, a low-level help desk operator is paid $185,000 annually. Meanwhile, a help desk operator directly employed by the city receives $46,000. Throw in pension and health insurance and the cost of that city employee barely reaches $70,000 - about a third of what Northrop charges.

In 2009, lawmakers in Albany required every state agency to provide annual reports on the number and cost of all outside contracts. Consultant costs have plummeted ever since.

James wants the same thing for the city, but Christine Quinn, the Council's powerful speaker, is bobbing and weaving. A close ally of the mayor, Quinn says she supports legislation to better track outside contracts, but she has yet to back making public the actual number of consultants per agency and their salaries.

Why the hesitation?

Taxpayers have a right to know how many $400,000-a-year consultants it takes to build one of these troubled computer systems.

jgonzalez@nydailynews.com

Gonzalez: CityTime project scandal finally begins to unravel
BY JUAN GONZALEZ - NEWS, DAILY NEWS STAFF WRITER
Thursday, December 16, 2010
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Federal prosecutors have finally begun to unravel one of the biggest scandals of the Bloomberg era.

But one major question remains: Where were city officials all those years that computer consultant Mark Mazer and his cronies allegedly stole more than $80 million in taxpayer money from the CityTime project?

How did a cutting-edge payroll system meant to eliminate fraud and waste by public employees become what prosecutors say is a nest of even bigger fraud, waste and money laundering by private contractors?

The first person who should answer that is Joel Bondy.

As executive director of the Office of Payroll Administration for the past six years, Bondy was the man in charge of CityTime.

He was the guy who kept defending the project at City Council hearings even as it fell years behind schedule and its cost spiraled from $63 million to more than $700 million.

Why has Bondy not been fired?

After all, he made Mark Mazer and Scott Berger, whom prosecutors called the masterminds of the criminal conspiracy, his top supervisors on the project.

He even lauded them at a December 2009 Council committee hearing when Councilwoman Letitia James (WFP-Brooklyn) demanded answers about their high fees.

"These people have proven themselves in the past and currently to be highly capable and competent at their jobs," Bondy said.

Late last year, half a dozen former CityTime workers gave me hair-raising accounts of a web of corruption and fraudulent time sheets on the project, of shell companies that were raking in huge sums of money for little work.

Mazer and Berger, those sources said, were close to Bondy. Mazer even worked with Bondy at the Administration for Children's Services years ago.

That's when I started to investigate CityTime. In January, I asked Bondy's spokeswoman about DA Solutions, one of the project's subcontractors and asked if Bondy was familiar with the firm.

"Mr. Bondy has heard of the firm's name in connection with providing staff to the CityTime project," she told me in an email.

"The city pays SAIC [Science Applications International Corp., the project's main contractor] for the consultants provided by DA Solutions. Over the course of the project, DA Solutions has provided 45-50 consultants."

Turns out Bondy hadn't merely "heard" about DA Solutions, a criminal complaint unveiled Wednesday shows.

In 2005, Bondy told his human resources manager that Mazer "would be bringing some consultants ... that would be doing work on the CityTime project."

December 16, 2010 7:03 PM 4 comments
BREAKING: NYC Payroll Chief Suspended In CityTime Scandal: Updated
BY Celeste Katz
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This just in from the office of City Comptroller John Liu on the CityTime payroll system scandal:
Subsequent to New York City Comptroller John Liu's call for an emergency session of the Office of Payroll Administration Board of Directors, Comptroller Liu and Mayor Bloomberg have agreed to suspend Executive Director Joel Bondy indefinitely without pay.

Comptroller Liu also suspended all payments to the vendor Spherion -- effective immediately -- until the City conducts a comprehensive review of subcontracting, consultant billing and recordkeeping practices.

Comptroller Liu's office will continue to assist the U.S. Attorney's Office and DOI in their ongoing investigation into the CityTime project.

Just yesterday, Comptroller Liu rejected a $32 million encumbrance on the CityTime project, pursuant to the 9/28/2010 agreement that stipulates the City will not pay any more money until the full and timely completion of the Citytime project.

The scandal in a nutshell: Four highly paid consultants hired to computerize the municipal payroll to eliminate waste and fraud were charged Wednesday with using the city as a "cash cow" to steal $80 million.

Update from the mayor's office:

“Any violation of the public’s trust is categorically unacceptable and we are implementing a series of changes to reform oversight of the CityTime project,” said Mayor Bloomberg. “The investigation will continue, and as we learn more facts we will continue to keep the public updated. We will do everything possible to ensure any taxpayer dollars that were fraudulently distributed are recouped and that those who were complicit in attempting the scam the public face the full force of the law.”

Responsibility for the CityTime project will be transferred to the city’s Financial Information Services Agency under the oversight of Deputy Mayor for Operations Stephen Goldsmith in partnership with Liu's office.

The comptroller’s and mayor's offices will also "work with the Office of the U.S. Attorney for the Southern District of New York and the City’s Department of Investigation on a thorough forensic audit of the CityTime project to determine whether any additional dollars were improperly paid and will seek to maximize recovery of any taxpayer dollars that were improperly paid."

NYC payroll chief suspended over CityTime scandal
Office of Payroll Administration Executive Director Joel Bondy suspended pending investigation into fraud allegations; Stephen Goldsmith, John Liu to oversee CityTime project.
By Jeremy Smerd, Crain's, Published: December 16, 2010 - 7:14 pm
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Mayor Michael Bloomberg and city Comptroller John Liu announced Thursday evening that they suspended the executive director of the city's Office of Payroll Administration, Joel Bondy, without pay, pending further investigation of fraud allegations connected to the city's controversial timekeeping system, CityTime.

Federal prosecutors arrested four CityTime subcontractors Wednesday alleging they had defrauded the city of $80 million— more money than what the original contract was worth.

The federal complaint, the product of a joint effort with the city's Department of Investigation, does not accuse the lead software developer, Science Applications International Corp., or any city officials of wrongdoing. Officials said the money was originally intended for one of the contractors, Mark Mazer to conduct quality assurance work on Science Applications' software.

However, Mr. Bondy hired the arrested subcontractors and knew some of them from previous work. The subcontractors are accused of steering more than $76 million in new business to associates who then kicked back $24.5 million to one of the accused, Mr. Mazer, through what prosecutors called a complex network of shell corporations and bank accounts that he controlled.

The arrests immediately raised questions about the oversight of the CityTime project under Mr. Bondy and how his professional relationships with Mr. Mazer may have contributed to the alleged fraud. Mr. Bondy, who worked with Mr. Mazer at the city's Administration for Children's Services, had worked previously for a CityTime contractor called Spherion.

Though at least $200,000 in timesheets were falsified, most of the work was completed and the CityTime project is on schedule to be completed next year, after a long, torturous history.

The OPA is jointly overseen by the mayor and comptroller. Deputy Mayor for Operations Stephen Goldsmith will now oversee with the city Comptroller the CityTime project. Mr. Liu's office will also work with the mayor to conduct a forensic audit of the entire project in order to uncover potential fraud, waste and abuse.

The charges are the latest twist in a saga that began in 1998, when the city earmarked $63 million to computerize its payroll system. CityTime has since ballooned to more than $700 million and is not expected to be completed until next year.