Comptroller Accuses HP of Overcharging NYC $163m On 911 System 92
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? (Score:5, Insightful)
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.
Re:How does this happen? (Score:5, Insightful)
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.
Re:How does this happen? (Score:3, Insightful)
This sort of problem is going to be inherent to a system that makes decisions entirely based on the lowest bid.
Re:How does this happen? (Score:5, Insightful)
sign contract
start changing conditions of SoW or the hardware you want
agree to cost overruns
complain
Re:How do I get in on the action? (Score:5, Insightful)
You are obviously not spending enough on money on bribery, I mean "Sales and Entertainment Expenses"
Do it in-house (Score:5, Insightful)
This is the second contract software project over $100 million that NYC has screwed up in just the past couple of years. (CityTime [slashdot.org] 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.
Funny how it's always corporations' fault (Score:4, Insightful)
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.
Re:Amazing (Score:5, Insightful)
I worked on the project for 6 months. I'm not surprised that HP over billed...but rather they got paid so much to do so little. Between Verizon, HP, Gartner, and a multitude of other contractors/sub-contractors, the program bled $$$! To top it off NYC employees on the program came in two varieties: 1. Lazy and waiting to retire with their pensions, or 2. Incredibly incompetent. In some cases a few "gifted" employees managed to be in both of those categories. The very few people who actually cared and wanted to do anything were shutdown, left out of meetings, asked to leave, or just berated for trying to do the right thing and move the program forward.
I got stick and tired of the waste and being a part of a system which did very little work and enabled people from the top down to just simply show up and collect their paychecks. Employees are not rewarded for hard work but rather for how many people they know...they work very hard to protect their respective piece of the cake and do everything possible from allowing anyone to succeed in their jobs. It's a disgusting shame and now I really have seen - up close and personal - where my tax dollars were going.
That's not the entire point (Score:2, Insightful)
In a purely practical and objective standpoint, you are correct. It would make more sense to have employees of the city to do it.
But this is not a practical or objective world. There are politics to be played; Backs to be scratched and palms to be greased. For those in that sort of position of authority, there is a game to be played. Who can they trade this favor of a contract (with the possibility of over-payment) for some future consideration or contribution?
This is not the world of high-school civics that we were taught. These people are not there out of a sense of service to their fellow citizen or because they have good ideas that might make the world a better place.
This is the world where people have ambitions, who want to get ahead and further up the ladder of power. This is the world where people can and do get addicted to the feeling of power that their authority gives them and want only to increase it.
This is also the world where other people, further up the chain of authority tell the lower levels to who and how a contract should be presented. And because it is their boss or their boss's boss or their boss's boss's boss doing this, they fear for their jobs and livelihood and do what they're told instead of going out and shouting to the world of the corruption they've seen.