Sunday, April 18, 2010

The Logic of Monitoring Workers

Juan Gonzalez published a fascinating article about New York's over-priced, dysfunctional computer system that pointed to a number of problems with the world we live in.

First of all, the system, like many complex computer systems, does not work.

Second, 230 consultants are getting an average salary of $400,000.

Finally, one of the great ironies is that the system is supposed to keep track of ordinary workers to make sure that they are not overpaid.

Gonzalez, Juan. 2010. "'Consultants' getting $722M from city for doomed CityTime computer project." New York Daily News (26 March).
The city is paying some 230 "consultants" an average salary of $400,000 a year for a computer project that is seven years behind schedule and vastly over budget. The payments continue despite Mayor Bloomberg's admission the computerized timekeeping and payroll system -- called CityTime -- is "a disaster"." Eleven CityTime consultants rake in more than $600,000 annually, with three of them making as much as $676,000, city records obtained under a Freedom of Information request show.

The 40 highest-paid people on the project bill taxpayers at least $500,000 a year. These enormous salaries are coming out of a $139 million extension to the CityTime contract that began July 1 and runs to September 30. Some of the consultants have been working at these rates for as long as a decade. Take, for example, Brian Fallon, a CityTime "project manager." The Science Applications International Corp., which employs Fallon and supplies the consultants, charged $653,554 for his services in 2009. When the Daily News approached Fallon, 40, this week outside his home in Belle Mead, N.J., he declined to say what he does to merit such a fat check.

Then there is Constantin Stanca, a "development manager" for CityTime for 10 years. He made $524,000 in 2009. "It's a difficult project," the 43-year-old Stanca said, as he left his New Hyde Park, L.I., home yesterday for work. "Look at this white hair here," he added, pointing to his salt and pepper goatee.

Gerard Denault, 48, of Darien, Conn., has been a "project director" for several years. He got $543,698 from the city last year -- for less than 30 hours a week of work on CityTime. The actual amounts individual SAIC employees took home are most likely lower than their stated rates, since computer firms typically take a cut of each consultant's charges. Nonetheless, these are breathtaking numbers. "In my three decades in the business, I've never seen salary levels like these," said a veteran technology manager who once worked on CityTime.

CityTime's installation started in 1998 and was supposed to take five years. Officials promised that biometric scanners and automatic timeclocks on all personal computers would eliminate the age-old abuse of city workers punching clocks for their friends and save up to $60 million a year. Defense contractor SAIC took over the original contract in 2000, but the firm has managed to roll out the system to only a third of the 145,000 city employees who were supposed to use it.

Costs have skyrocketed. City Controller John Liu said the price tag has reached $722 million -- more than 10 times the original projection. SAIC, by the way, is the company the FBI threw off the job a few years ago after charging the agency $170 million for a virtual file system that never worked.

Bloomberg conceded three weeks ago CityTime is "a disaster," but offered no plans to fix it. He acknowledged the problem only after the Daily News exposed CityTime's spiraling costs and after the paper revealed that more that a dozen consultants supplied by Spherion -- a second firm hired to monitor CityTime's costs -- were racking up salaries of more than $300,000 each.

Several former CityTime workers have told The News city officials have ignored their complaints about questionable consultant timesheets, defective software and possible conflicts of interest between key CityTime managers and subcontractors. In January, Liu rejected an extension of Spherion's contract and began the first-ever audit of the entire project. Liu has since labeled CityTime a "money pit." He urged Bloomberg to suspend payments until the audit is finished. "People who worked on this aren't stupid and aren't lazy," Bloomberg said. "Some projects are so big and the world changes so fast while you're building them, [you realize] maybe that's not a good way to do anything." That cavalier excuse is unacceptable. Our city is facing its biggest financial crisis in years and Bloomberg has decreed major cuts in jobs and basic services.

Last fall, City Hall laid off 510 public school aides to save $12 million. At the same time, the mayor's aides were adding more than $24 million to the operating budget of the office of payroll administration just to help pay for CityTime's consultants. How can anyone justify firing $18,000-a-year school aides while hiring half-a-million-dollar computer geeks who can't even deliver a good product?

Joel Bondy, head of the city's office of payroll and the man in charge of CityTime, told a City Council hearing in December the project would be completed by September. Yet, the fine print in the new CityTime contract shows Bondy plans to keep as many as 100 of the SAIC consultants employed for another four years. There will be "a need for minimal continued consulting support after the implementation of CityTime," an OPA official confirmed. The existing contract, the official said, does "not accurately reflect the level of such support".

It's time to speak plainly. CityTime is a new-age version of feeding at the government trough. It's a luxury employment project for computer geeks with friends and connections in high places. The mayor should fire everyone in charge of it. He should pull the plug on this boondoggle now.


TheTrucker said...

I was a computer geek consultant for 30 years always self employed and running my own company. I consulted with, Texaco, Pennzoil, Boeing, and Halliburton. The Texaco project was a limited success that presorted and preprocessed seismic data on board an exploration vessel in the GUlf of Mexico. That system worked and I walked away as I should. The Boeing project introduced me to the world of over management. I don't actually recall the name of that project but it involved hundreds of consultants and was a failure. The Halliburton system was called HSYS and it was primarily manned by Anderson Associates whith whom I was not affiliated. That one was canned by Dick Cheney after many millions were flushed down the toilet. Very large computer software tasks are typically failures because they are overmanaged. Tons of paper is created and no real software. Highly paid managers in the computer consulting business profit from _NOT_ getting a job done. This is NOT a government malady. It happens in all projects or firms where size or complexity allows feeding at the trough. Boeing and Halliburton were the worst.

Personal success in large enterprises is typically achieved by playing the game. The primary is the CEO assuring that none of the vice presidents are a threat to the throne, then going outside that inner circle for enhanced profitability. The members of the inner circle are aware and do not do anything risky. The fav is killing someone else's golden goose after it was risen to a threshold where the costs are huge. In all probability the the VP managing the project did not seek it and was chosen as the next victim of the boardroom.

I am of the opinion that government can actually work better than business when we are talking about very large enterprises in which national security is not at issue. And the secret is transparency and accountability that cannot be achieved in profit seeking business activities. Too much intrigue.

Eleanor said...

Wouldn't it have been cheaper to let city workers continue to clock each other in?