New
York City Comptroller Scott M. Stringer today rejected a $30 million
Department of Information Technology and Telecommunications (DoITT)
contract to outsource
the selection and oversight of all New York City Information Technology
(IT) contractors to a sole vendor, Pennsylvania-based Computer Aid, Inc
(C.A.I.).
“At
the core of this contract is an unproven service model which provides
no adequate fail-safe if the system is unsuccessful,” Stringer said.
“Information Technology contracts
have been a recurring issue for the City: ballooning costs and
insufficient oversight are a toxic mix for taxpayers. DoITT should come
back to us with a plan that spells out why this vendor – and this model
– actually makes sense.”
The
contract between DoITT and C.A.I. proposes a three-month pilot “Managed
Service Model” which allows one vendor, C.A.I., to take over the
selection of all IT consultants.
Currently, DoITT operates under a “Multiple Services Model,” in which
the Agency conducts mini-bids within a pool of qualified Information
Technology Consulting Services (ITCS) to identify which vendors best fit
the needs of City agencies – with the contract
vehicles centralized through DoITT.
In a letter sent to DoITT Acting Commissioner Evan Hines on Wednesday, the Comptroller’s Office wrote:
The newly proposed Managed Services Model limits
and restricts the City’s direct role in the administration, management,
and oversight of the contracting process. Under the proposed model, the
City intends to outsource
the selection of all IT consultants to a single third-party
intermediary consultant, C.A.I. The creation of an additional level of
outsourcing between end users and IT consultants may prevent consultants
from understanding the proposed scope of services.
Further, DoITT’s categorization of
professional IT consultants selected by C.A.I. as “suppliers” instead of
“subcontractors” removes essential due diligence and accountability
requirements from the City, such as VENDEX and formal
determinations of responsibility. The City would lose the contractual
relationship with the companies providing consultants, thus losing a
crucial oversight tool for determining whether IT consultants are
qualified to receive taxpayer dollars.
Additional questions and concerns were raised about the C.A.I. contract including:
·
Non-competitive procurement, which does not afford the City the
opportunity to benefit from a process in which it leverages its
considerable bargaining
power;
· A three-month pilot period to test the “Managed Service Model” which does not allow for an appropriate review;
·
No limitations on the initial $30 million investment, meaning funds
could be fully depleted over the three-month pilot process;
·
No calculation of how much the model would cost the City if rolled out
to additional agencies. Annual citywide usage via the current citywide
ITCS
service model exceeds $70 million.
The
contract was initially submitted to the Comptroller’s Office on
December 20, 2013, but was returned to DoITT for additional questions
and review. It was resubmitted for registration
on February 19, 2014 and returned on Wednesday following a 30-day review period.
