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Comptroller Accuses HP of Overcharging NYC $163m On 911 System

timothy posted more than 2 years ago | from the oh-that's-only-3-figures dept.

Government 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."

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How does this happen? (1)

Anonymous Coward | more than 2 years ago | (#40171655)

This is a serious question to the technical community of /.; how does this happen? None of the projects I've been on have been this horrifically over budget.

Re:How does this happen? (-1)

Anonymous Coward | more than 2 years ago | (#40171701)

John Liu is butthurt because soon he will not be able to buy GIANT PEPSI at his favorite mcdonald.

Re:How does this happen? (4, Insightful)

jdgeorge (18767) | more than 2 years ago | (#40171865)

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? (1)

NatasRevol (731260) | more than 2 years ago | (#40172077)

In other words, NYC & HP weren't using change control documents.

Re:How does this happen? (1)

jdgeorge (18767) | more than 2 years ago | (#40172331)

No, in other words, the Comptroller is deliberately making it SOUND as if HP and NYC weren't using change control documents.

I don't know what the political situation is, but I'm SURE that the comptroller's office is trying to assert that cost overruns are the fault of somebody other than the city, and trying to force the contract's cost penalty (to the contractor) provisions to kick in, thus saving the city money.

Re:How does this happen? (1)

NatasRevol (731260) | more than 2 years ago | (#40172377)

If that were the case, HP would easily be able to provide CCDs that show the city requested additional items that caused the cost overruns.

Not sure that's a wise strategy.

Re:How does this happen? (3, Interesting)

jdgeorge (18767) | more than 2 years ago | (#40172561)

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.

Re:How does this happen? (1)

NatasRevol (731260) | more than 2 years ago | (#40172631)

That sounds more realistic.

One guy blaming another guy, without seeing all the documentation.

Re:How does this happen? (0)

Anonymous Coward | more than 2 years ago | (#40172657)

Or the NYC comptroller wants to move up to State Comptroller, which is essentially a fourth branch of the government in NYS.

Re:How does this happen? (2)

Attila Dimedici (1036002) | more than 2 years ago | (#40173307)

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).

Re:How does this happen? (2)

Genda (560240) | more than 2 years ago | (#40172601)

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!!!

Re:How does this happen? (1)

Attila Dimedici (1036002) | more than 2 years ago | (#40172685)

If that were the case, HP would easily be able to provide CCDs that show the city requested additional items that caused the cost overruns.

Not sure that's a wise strategy.

And if it is the case, they will happily do so if and when the case goes to court. In the meantime, HP is in a no-win situation. If they keep silent, they take a significant PR hit. On the other hand, if they make defend themselves, they may piss off the next mayor of New York (Liu is running for mayor) and that will be bad for business in the long run.
Basically what you have going on here is John Liu trying to make a big splash to improve his chances in the upcoming mayoral election.

Re:How does this happen? (1)

dgatwood (11270) | more than 2 years ago | (#40172909)

On the other hand, if they make defend themselves, they may piss off the next mayor of New York (Liu is running for mayor) and that will be bad for business in the long run.

Let's try a proof by contradiction. Assuming for the moment that those documents do exist, that means that Liu or his underlings botched things, and he's trying to shift the blame. If HP went on the offensive and provided documentation that the news media could use to paint Liu as a liar trying to blame others for his own incompetence, then Liu almost certainly would not become the next mayor, so HP would have little to worry about. Thus, we can probably conclude that either:

  • HP is too afraid of their imminent collapse to actually act in their own best interest (in which case they are incompetent) or
  • Those documents don't exist (and HP is incompetent).

Either way, it doesn't make HP's leadership look too good....

Re:How does this happen? (1)

b4dc0d3r (1268512) | more than 2 years ago | (#40173835)

Sounds like you are trying to apply logic to a business and/or political situation. Ass-covering, instinct, and emotion are more likely to be a factor, giving us nothing to observe worth basing a conclusion on.

Re:How does this happen? (1)

Attila Dimedici (1036002) | more than 2 years ago | (#40190231)

I am sorry, nothing I have seen in this story indicates that John Liu botched anything. Why would the existence of those documents indicate that the city comptroller's office botched things?

Re:How does this happen? (1)

DaveGod (703167) | more than 2 years ago | (#40173075)

No... One group is saying one thing and another group is saying another. There's no reason to be "sure" which or indeed if either if them is accurate.

The comptroller claims to have documentary evidence and makes quite specific assertions based on them. This generally is a trait of someone who firmly believes they are being truthful, partly because statements of fact are easily debunked if not. NYC responds to this with wishy-washy comments and not statements of fact. The notion that the Comptroller was "misreading provisions of the contract" merely raises the notion that the contract provisions are ridiculous, like allowing $196/h for clerical work.

There's nothing to prove either way, but the Comptroller does offer greater credibility at this point.

Re:How does this happen? (0)

Anonymous Coward | more than 2 years ago | (#40172229)

From TFA:

Auditors said they had found timesheets filled out weeks ahead of the work being reported, as well as instances in which unqualified workers were paid at high pay grades. In one case, a subcontractor charged the city $192 an hour for clerical work and for tasks including reporting a water bug, opening doors and fixing an odor in a bathroom.

Because contractors (and subcontractors) don't just fill in whatever and assume it's going to be rubberstamped.. then cry foul when an audit is done? Yeah it shouldn't have been "rubberstamped" so there is blame there.. but the contractors and subcontractors were clearly expecting to get away with it.

captcha: valued

Re:How does this happen? (2)

Hatta (162192) | more than 2 years ago | (#40172835)

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.

big projects get loaded with contractors and subs (2)

Joe_Dragon (2206452) | more than 2 years ago | (#40173103)

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.

Re:How does this happen? (1)

Anonymous Coward | more than 2 years ago | (#40173281)

Typical Government Competitive bidding.
You give me a vague idea of what it is you want done.
Me and 12 other entities produce our best guess as to what it will cost.
We do so with foreknowledge of the fact that the choice will be made by first tossing out the highest and lowest bidders.
Everyone underestimates because they don't want to be the highest bidder and get tossed out, no real consequences since
it is hard to loose the contract when you are the one who knows everything about it even if there is a rebid. Meanwhile you got paid.

(i've seen it on many contracts).

Re:How does this happen? (0)

Anonymous Coward | more than 2 years ago | (#40178183)

In other words managers and senior executives don't know and am completely clueless about the business, and won't dirty their hands looking at 'details' because the delivery items are set and locked down with a fixed price - not.

Besides calling the 'known' big guys, and blankly signing something - because it is assumed the big guys know their business,
you would be better off doing things slowly and giving it to an 'unknown' who has at least one success (one time on budget).

Re:How does this happen? (3, Insightful)

Grygus (1143095) | more than 2 years ago | (#40171919)

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? (2, Interesting)

Anonymous Coward | more than 2 years ago | (#40173093)

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.

Re:How does this happen? (4, Insightful)

alen (225700) | more than 2 years ago | (#40172039)

sign contract
start changing conditions of SoW or the hardware you want
agree to cost overruns

Re:How does this happen? (1)

alen (225700) | more than 2 years ago | (#40172081)

or sign contract to upgrade software
contractor comes in and tells you that the new software won't work on current hardware. or new current hardware won't work with some old piece of junk you are running somewhere else
new costs for buying new hardware

Re:How does this happen? (1)

Anonymous Coward | more than 2 years ago | (#40172197)

Some advice? Think long and hard about getting into any sort of contract with NYC. There are so many layers of bureaucracy, so many consultants, so many unions, so many special interests that it is virtually impossible to get anything done with less time and money than was originally budgeted. No other city in America comes close. It's a nightmare.

No matter the terms of the contract NYC will find that you do not comply. The only alternative is going to court, which is also not cheap. We had the opportunity to walk away after a year of losing money in NYC and that's what we did -- we walked. This was after a major competitor of ours also failed to implement their system for NYC years earlier. We thought we would add another big name like NYC to our client list and show up our main competitor -- we were mistaken on both counts.

I think people (companies) just get stars in their eyes when dealing with these big name municipalities and multi-million dollar contracts. Eventually, they end up seeing money drained out of their coffers by never-ending "issues" brought up by the various parties involved. Also, NYC was (is still?) essentially broke (financially) at the time, so it was in their best interest to slow down the acceptance & approval process in any way they could.

It was a bad relationship and we made a very good decision by leaving.

Re:How does this happen? (1)

kiwimate (458274) | more than 2 years ago | (#40172833)

You're lucky. Most projects - around 60% or 70%, according to various studies - fail in some regard.

"Fail" can mean they went over budget, took too long, or dropped scope. Lots of projects you work on may come in under budget, but have a very reduced set of features from what was originally described.

Projects may fail for a variety of reasons. The number one reason for failure is usually cited as being poor requirements gathering. Scope creep is also a big problem.

There are ways to disguise this. One easy way is to start charging project labor to internal cost centers, rather than to the project. Despite the prevailing cynical attitude on /., working for government departments tends to make that harder than in a standard IT shop.

Re:How does this happen? (1)

bzipitidoo (647217) | more than 2 years ago | (#40180503)

For software projects, I've heard 90% are failures! About 30% are total failures, and 30% are partial failures. The arguable ones are the 30% that meet specs, but are late and/or over budget. Are those failures? How late and how much over do they have to be to rate as a failure? If they aren't considered failures, then 60% may be about right. The 90% figure counted all those as failures.

It's an appalling rate of fail. And it seems a big reason for it is not incompetence nor that planning is that hard, but politics.

Re:How does this happen? (1)

D'Sphitz (699604) | more than 2 years ago | (#40173213)

A better question is, how do so many of these projects have budgets in the several hundred million dollar range? And we're not even talking about the feds, this is at the city level, ONE CITY! And it seems this article is giving them more credit than they deserve, other articles claim [] they are $1 billion over budget, not the total cost mind you but that is the overrun, and another 7 to 10 years to go on top of that.

About 2 years ago I read NYC was something like $600m over budget on some timekeeping software called "City Time" (or something similar). I'm not clear if this is the same project, but it looks like this is something else, seriously WTF?

I would have to work full time for 10 years to finish a $1 million software project myself. Looking at what I produce, or any developer can produce, in a single year makes it hard to comprehend how even the most complex software ever conceived of would take someone over 10,000 years working full time to complete.

A fucking billion dollars? And then we get to listen to these same beaurocrats lecture about how critical the deficit is and responsible spending that, as they order another hundred $350 million dollar jets that will never see combat. It just makes me sick to my stomach. This is the shit we sacrifice 1/3rd of our income for.

Re:How does this happen? (2)

crafty.munchkin (1220528) | more than 2 years ago | (#40177001)

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.

Re:How does this happen? (1)

sjames (1099) | more than 2 years ago | (#40192445)

The federal government grants large cities and states big chunks of tax money with strings attached in order to effectively extend it's power while sidestepping the Constitution.

Re:How does this happen? (1)

gorzek (647352) | more than 2 years ago | (#40180509)

CityTime is a totally separate initiative, and in fact it was found that the contractor involved with it bilked the city out of tons of money. It cost about $700M, and in the end the city got a settlement for $466M. The original estimate for the project was about $68M, so the city will still have wound up paying about 3.5x that for it.

Re:How does this happen? (0)

Anonymous Coward | more than 2 years ago | (#40176195)

In a nutshell, incompetant managers with neither the domain or technical knowledge to be running the project. Mostly these managers are interesting in building their own private empire rather than successfully completing the project. Typically these managers hold big status meetings with dozens of people at the table where each of them are asked "so, how are you doing?" which they enthusiastically reply "I'm doing great! Everything is great!" but the manager neglects to (and is incapable) actually inspecting and assessing the work that has been done. Then 80% into the project the people at the meeting table change their tone and say "yeah, I'm really only 20% done despite telling you last week that I was 80% done". Shit hits the fan, old consultants are fired, new consultants are hired, rinse/lather/repeat.

Note: if a manager doesn't actually inspect work he is not managing, he is wishing.

And.... (1)

Sparticus789 (2625955) | more than 2 years ago | (#40171671)

When is the last government contract that DIDN'T go more than 50% over budget?

Re:And.... (0)

Anonymous Coward | more than 2 years ago | (#40171781)

the Apollo program... ..the last time the US goverenment accomplished anything that actually mattered

Re:And.... (3, Funny)

jdgeorge (18767) | more than 2 years ago | (#40171915)

the Apollo program... ..the last time the US goverenment accomplished anything that actually mattered

A fake moon landing? ;-)

Re:And.... (1)

Cinder6 (894572) | more than 2 years ago | (#40172031)

They did fake it...on Mars!

Re:And.... (1)

Tablizer (95088) | more than 2 years ago | (#40174795)

They faked it well; it passed MythBusters. Thus, the fakage money was well-spent. Better than the private market: []

So it comes in under twice the projected price? (0)

Anonymous Coward | more than 2 years ago | (#40171697)

Isn't that considered a huge success for a public project? Is someone going to get promoted?

The Mayor... (0)

Anonymous Coward | more than 2 years ago | (#40171723)

Bloomberg was quoted as saying, "This is the second prong, after the CityTime project, in my attack on the city's financial obesity problem. Don't worry, you're going to elect me for a fourth term anyway."

How do I get in on the action? (5, Insightful)

serviscope_minor (664417) | more than 2 years ago | (#40171767)

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 do I get in on the action? (4, Insightful)

rabbit994 (686936) | more than 2 years ago | (#40172187)

You are obviously not spending enough on money on bribery, I mean "Sales and Entertainment Expenses"

Re:How do I get in on the action? (1)

serviscope_minor (664417) | more than 2 years ago | (#40172767)

You are obviously not spending enough on money on bribery, I mean "Sales and Entertainment Expenses"

I'm certainly not big enough to be able to afford that.

Re:How do I get in on the action? (0)

Anonymous Coward | more than 2 years ago | (#40172753)

It's simple. Bid low on a big contract. Wait for customer to ask for changes. Charge 10x on every change.


Re:How do I get in on the action? (2)

Ryanrule (1657199) | more than 2 years ago | (#40174405)

Well, when the people in the mayors office and people at the top of hp shared the same prostitutes in business school, connections are made.

Pi (0)

Anonymous Coward | more than 2 years ago | (#40171809)

The actual cost of any government project divided by its initial estimated cost closely approximates Pi.

Impressive... (4, Funny)

fuzzyfuzzyfungus (1223518) | more than 2 years ago | (#40171873)

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...

Re:Impressive... (1)

mr.mctibbs (1546773) | more than 2 years ago | (#40180657)

HP *is* a defense contractor, and they fuck it up pretty badly in that sector, too.

Yawn (0)

Anonymous Coward | more than 2 years ago | (#40172019)

This kind of dispute is fairly typical for a big IT project. The change requests from the customer roll in, some of customers' systems aren't what the vendor thought was agreed upon, some component prices go up, and their are additional execution problems on the vendors' side. So the result is delay and lots of overtime charges.

BTW this happened mostly on Mark Hurd's watch (although the contract was negotiated by his interim CEO predecessor), not Whitman or Fiorina.

Strategy (0)

Anonymous Coward | more than 2 years ago | (#40172025)

I was reading yesterday that HP's person in charge of strategy was being promoted. I wondered at the idea that HP has a strategy in place. Now I know that strategy is fraud.

Irony for me... (1)

cpu6502 (1960974) | more than 2 years ago | (#40172133)

Just opened my bill and saw a $1 surcharge added for enhanced911. My state's trying to make-up losses. Now I know why.

Do it in-house (4, Insightful)

JDG1980 (2438906) | more than 2 years ago | (#40172283)

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.

Re:Do it in-house (2, Informative)

Anonymous Coward | more than 2 years ago | (#40172365)

Wouldn't it make more sense to hire employees to do this?

Not if they're eligible for pensions, can roll over their unused sick days and vacation time and cash them out on retirement, moonlight during working hours, and are protected from dismissal by a bevy of union-negotiated rules.

Re:Do it in-house (0)

Anonymous Coward | more than 2 years ago | (#40172499)

How do you hold them accountable? The most drastic action would be to fire the person you hired. You still paid the person for the work. Effectively, they fired HP.

That's not the entire point (1, Insightful)

H3lldr0p (40304) | more than 2 years ago | (#40172563)

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.

Re:Do it in-house (2)

BigSlowTarget (325940) | more than 2 years ago | (#40172933)

This assumes competent management hiring competent employees through a fair skills based hiring process and wisely managing the project over multiple administrations and the long term to achieve success.

If you've worked in government or big business that one sentence should be enough to make your risk management tendrils wrap around your neck and attempt to strangle you.

Still no guarantee (1)

swb (14022) | more than 2 years ago | (#40174057)

Part of the problem with government contracts is that the project isn't just a business process with a uniform management struture. There's an operational hierachy that is trying to manage the actual project completion AND a political process capable, willing and actively engaged in influencing key elements of the project which effect it's effective completetion.

In some ways an in-house staff is worse than contrators. Contractors aren't really captured by the political process and once they are awarded a contract should be more willing to resist outside influence. Full-time employees are captured by the political process and more likely to engage in horse trading with the political leadership.

Funny how it's always corporations' fault (3, Insightful)

Loopy (41728) | more than 2 years ago | (#40172337)

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:Funny how it's always corporations' fault (2)

JDG1980 (2438906) | more than 2 years ago | (#40172409)

If you think private companies don't get gouged by badly-thought-out IT contracts, you haven't been looking hard enough.

Re:Funny how it's always corporations' fault (2)

Comrade Ogilvy (1719488) | more than 2 years ago | (#40172779)

Nonsense. The difference is gov't is usually has to say out loud how badly things went because they are accountable to the voters at large.

Corporations do not brag about $100 million thrown down the toilet from a failed 5 years effort. It happens all the time. How often? Hard to say, because this is not something that anyone wants to be easy to track.

For really complex projects, the failure rate could easily be 50%. But it is not reported as a failure. A new contractor comes in to finish the work and the end result is a 200% cost overrun, it is just spread out over the years. The people who should have known better find "new exciting opportunities" elsewhere.

Re:Funny how it's always corporations' fault (2)

QuantumRiff (120817) | more than 2 years ago | (#40173453)

I have yet to see an 'enterprise' project that does not have significant cost overruns. At any larger company I have worked at.

Heck, my buddies company is in the 3rd iteration of trying to 'modernize' their core software. last time, some salesman convinced them to buy big sparc servers (as in many of them), and convert to java.. lots of $200/hour contractors..

Didn't work like they wanted. director got 'moved' and new one brought in. Was going to move everything to .NET since it would apparently save a fortune. (salespeople promised).. He apparently was going to save a fortune, by not replacing millions in hardware. He was figuring they would just install Server 2008 R2 on the sparc's..... hmmmmm That threw the 3rd iteration off a bit...

Re:Funny how it's always corporations' fault (0)

Anonymous Coward | more than 2 years ago | (#40176227)

> Server 2008 R2 on the sparc's.

LOL! Just when I thought I had seen everything, shit like this comes along.

Re:Funny how it's always corporations' fault (1)

geekoid (135745) | more than 2 years ago | (#40174415)

"...only government contracts that do this regularly"
this is completely false.

"I wonder, has anyone ever seen a post-mortem review of a government contract?"
I have, many times.

" Does government ever even attempt to figure out where the inefficiencies lie and correct them or at least plan for them next round?"
'the government" well, we don't have a single governments, so that's not a useful term.
The agencies who I have audited and reviewed certainly did that.

Now some facts:
The vast majority(90%+) of government contracts are done on time, and on cost.
Agencies of the government, as well as state governments have far less waste then corporate entities.
80% of corporate projects fail.
Both those are verifiable with a trip to the library to get the government records. Good luck, it will take weeks to sift through them. The code I wrote to do it is proprietary, otherwise I would get you a copy of it and the data.

Never forget two things when talking about corporate and government projects:
Corporations have a PR dept, and can keep their books to themselves. The control the channel. SO when something is great, you here about it, when it fails you never hear about it, when it's a blunder, it is quickly changed.

Government agencies have poepl one the outside alway trying to look in, even when they don't have the knowledge to evaluate what they see, the media only shows you failures, never success.

SO peoples perception is skewed greatly.
This is also why I cringe whenever some puts 'business leader' as a qualification for an elected position.
Well, one of the reason.

I sued to have the same perception, until I got involved with auditing varies large entities, public and private sectors.
Man, after that I got a lot more confidence in out government, as a whole.
I have pointed out multimillion dollar descrepencies to corporate CEOs, and they found it 'interesting' but didn't care too much.

Re:Funny how it's always corporations' fault (1)

Tablizer (95088) | more than 2 years ago | (#40174761)

Part of the problem is that a government agency is encouraged to "reign in costs" by having fixed-price contracts. However, for a large systems it's very difficult to define a sufficient system up front because of the complexity involved.

The Extreme Programming movement is partly a result of a backlash against "big design up-front", by the way.

So when it's ordered as a fixed-price contract, unforeseen needs are inevitably going to pop up. Well, these result in cost overruns.

I don't know of any easy fix for this kind of problem. It's hard to codify and quantify the unknown. It's possible to include a rate-per-hour of additional work in the contract, but then the boundary of what's part of the "original" product is usually fuzzy.

If the rate is not profitable for the vendor, they will complain that the new requests were not part of the original project and that the customer is just mooching to get subsidized add-ons.

Amazing (2)

countach (534280) | more than 2 years ago | (#40172367)

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?

Re:Amazing (5, Insightful)

Anonymous Coward | more than 2 years ago | (#40172535)

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.

Re:Amazing (1)

evil_aaronm (671521) | more than 2 years ago | (#40172957)

I don't suppose you could blow a whistle or something, could you? Do you have enough to show actual malfeasance?

Re:Amazing (0)

Anonymous Coward | more than 2 years ago | (#40184493)

I wish I did, but sadly I was a peon with no real access to useful documents to shed light on all of the fraudsters not just in the city but all the contractors too! I guess if it was this bad at the "grunt/worker bee" level, it must be much worse up top. After all the s**t usually falls down the ladder.

Within my first week of being there, I knew was that should shut up and find an exit strategy...because being there just to collect a paycheck and be part of that huge waste was intolerable. Don't get me wrong, I'll kill an an hour at work on Slashdot/Facebook/Twitter/etc. from time to time, but it shouldn't be the sole focus of an employee's work day either!

Re:Amazing (1)

weiserfireman (917228) | more than 2 years ago | (#40173497)

It seems like for this much money NYC could have built a whole new 911 system from scratch alongside the old one.

Then flipped a switch to turn on the new system and turn off the old one when it was all finished.

Of course, I know nothing about how this system was designed or built, but having dealt with a few projects, sometimes there is a great deal of expense trying to "save money" by upgrading the old system.

I would be interested hearing more from your inside look at how they were trying to do this project.

Re:Amazing (1)

geekoid (135745) | more than 2 years ago | (#40174435)

It only seems that way because you are pretty clueless about the scope of the project.

How do you run two emergency systems side by side? 911 systems include call center, lines, vehicular communication, radio frequency, every emergence personnel, training, data housing, real time access backing up.
And only about 4500 other things.

911 systems are highly entrenched, custom systems.

Re:Amazing (0)

Anonymous Coward | more than 2 years ago | (#40184565)

Actually they did! The program is for building two 911 centralized call centers....the HP contract was for the one in Brooklyn. So essentially NYC paid a truck load of cash just for the first one. At the time I worked on the program, the new Brooklyn call center was open, but NYPD, and FDNY refused to move into it. They didn't like the new system and felt it was unreliable. Only EMS was staffing the huge building at that time. Since then who knows if they ever started actually using it or not. I'll be the first to admit NYPD/FDNY did have merit to their concerns, but mostly it was just political jockeying and using "safety of the public" as the leverage.

Re:Amazing (0)

Anonymous Coward | more than 2 years ago | (#40189431)

I am on my county 911 system board. I know the scale isn't the same

But last time we upgraded we built new dispatch center and trained people on it but didn't run it side by side. When cutover came the dispatchers clocked in at the new center and calls started routing there at 8am. We shutdown the radios in the old center at noon. Its still there as a backup in case of emergency

Re:Amazing (0)

Anonymous Coward | more than 2 years ago | (#40174511)

You are describing how many state/local government entities operate, not just NYC. It's not the job you do, its the job you are perceived to be doing and how good you look in that perception. On rare occasion, all three will be in alignment.

On contracts this large, you learn to CYA as you go along in case the contract does belly-up or end in a political storm (as it the case here). If HP was smart, they have a long papertrail over the life of the contract documenting delays, cost overruns, etc. primarily caused by the customer, rather than by HP. I'm not defending HP but the accuser needs to bring forth evidence of intentional negligence / gross incompetence before making these claims. The only thing HP has to lose is its brand reputation, which it can easily defend if they have a legitimate papertrail.

Re:Amazing (1)

Tablizer (95088) | more than 2 years ago | (#40174621)

It's not just government, most large bureaucracies are like that in my experience: not rocking the boat is more important than productivity and logic.

Re:Amazing (1)

SCHecklerX (229973) | more than 2 years ago | (#40178737)

You just described the hell that is being a competent sysadmin currently working for a branch of the DoD. I've only been here a few months, and I'm desperate for a fast exit to anything else.

Re:Amazing (0)

Anonymous Coward | more than 2 years ago | (#40184661)

The stories I could tell you would shame even the most lazy private sector employee. I think the only thing which enrages me more is I have to pay taxes to pay these jokers' salaries!

Re:Amazing (0)

aurashift (2037038) | more than 2 years ago | (#40173235)

The costs are due to the actual 911 calls. Anytime somebody on wall street dials 911 and says they're going to jump, they can't seem to talk them down with out writing a million dollar check.

This is not news (1)

Ziggitz (2637281) | more than 2 years ago | (#40172451)

A government IT and infrastructure project went over budget? What a shock. This article would be post-worthy if it was a government contract coming in UNDER budget, this is the norm not the exception. The people in charge of arranging these projects: A) Do not understand the actual requirements. B) Often do not know what they already have. C) Drastically underestimate or do not factor in at all the maintenance costs. D) Don't know what they actually want or how to articulate what it is they think they want. As someone who has worked several 6 figure short term contracts for major airlines, you can hand over enterprise software to these people that they paid you hundreds of thousands of dollars to develop and then shove it on a VM with less power than you can purchase in a home PC with what they paid you per day to develop it. If its software they don't factor in hardware costs, if it's hardware they don't factor in installation and maintenance, if it's maintenance they don't factor in legacy costs, for all of the above they don't factor in training and changeover costs, or downtime. Now if you're willing to be a little bit underhanded, when you're bidding for this contract you smile and nod and accept it knowing that you will never be able to deliver on time. However if you know anything about project management and the likely wording of the contract, the things that will keep you from delivering on time are not outlined in the requirements and you will mark as PCR's(Product Change Requests) and not in scope for the original project and bill out the ass for them which a lot of companies do. The real issue, time and time again, is that the people hired to negotiate these contracts and the people who actually know what they need and what it'll take, never talk. As a result the requirements are always wrong, scope balloons, and so does the cost.

Re:This is not news (1)

geekoid (135745) | more than 2 years ago | (#40174467)

wrong. Most government projects are on or below budget. Most are highly detailed in the specs.

It's nice you can spout off about something you know nothing about and continue to keep those old myths moving along.


I worked on this project... (1)

Anonymous Coward | more than 2 years ago | (#40172607)

It was called ECTP, or the Emergency Communications Transformation Program. I worked in the PMO as one of many subs to HP. The fault for this, if indeed there was "overcharging", is with the City of New York. ECTP was run by the Mayor's Department of Information Technology and Telecommunications, or "DOITT", in conjunction with the NYPD and the FDNY. This project was plagued from the beginning with problems of the government's making.On a daily basis, the cops fought the firefighters , the firefighters fought the cops, and they both fought the mayor. No one from the mayor's office wielded the authority and political will to tell both FDNY and NYPD to shut up and get to work. They both fought the (necessary) transformation from beginning to end. Additionally, the program was staffed by the dregs of New York's civilian workforce. We literally had civilian employees who were mentally ill and completely unstable working on the project. You never knew from hour to hour if you were going to get the sweet and smiling personality, or the bipolar crazy screaming personality. They caused massive staff turnover, constantly changed requirements, played one contractor off against another, and generally made a mess of the entire program. It got so bad that at one point, the City borrowed an executive from a private sector firm to help run the project, because none of their own people could manage it. It's actually amazing that ECTP delivered anything of value, and it's hats off to HP, Winbourne and Costas, BearingPoint, and the other contractors involved that the transformation actually got delivered.

Re:I worked on this project... (0)

Tablizer (95088) | more than 2 years ago | (#40174891)

We literally had civilian employees who were mentally ill and completely unstable working on the project. You never knew from hour to hour if you were going to get the sweet and smiling personality, or the bipolar crazy screaming personality.

The private sector also has such. Donald Trump, Steve Jobs & chair-launcher Ballmer, for example.

Re:I worked on this project... (0)

WOOFYGOOFY (1334993) | more than 2 years ago | (#40177827)

Consider that he posted as AC and the post itself is little more than a boilerplate template of ideas libertarians have of the much hated "goobmint" with "fire department" and "mayor's office" and "police" and "government worker" filled in.

This exact same post could appear to blame the government for any failed project whatsoever across any domain.

Re:I worked on this project... (1)

Anonymous Coward | more than 2 years ago | (#40179055)

This is the AC again.

1. I posted as Anonymous because I have nearly a decade and a half invested in serving government clients at the Federal, State, and Local level, and have no desire to lose my current job as a consequence of sharing what I know about this project;

2. I don't hate the government, and I'm not a libertarian (or even a conservative). My family has served the government in one capacity or another since the American Revolution, and we consider it an honor to serve.

3. I spent close to a year serving this project, and it was easily the most poisonous environment I have ever worked in. This was an opinion shared by several colleagues. The saying among our team was, "You knew the knife was coming for you, you just didn't know who was wielding it that day." Neither the FDNY nor the NYPD wanted to change their current practices, because they perceived them to be adequate. They didn't want to change their technologies, despite the fact that (among other things), they were using 40-50 year old technologies that were no longer manufactured or supported by the manufacturer, and in some cases, were literally held together by baling wire. They fought the creation of an integrated or co-located public safety response function, and fought just about everything else. This consistent opposition caused major delays, re-work, infighting on the project, you name it. And, because of their opposition to changes, both the FDNY and NYPD made sport of picking off personnel who were trying to help, and getting them tossed off the project. So, over time, the quality of both government and contractor personnel supporting the project degraded.

4. As I said, it is legitimately true that ECTP was saddled with cast-offs from within DOITT, NYPD, FDNY, and who knows what other agencies. The government personnel on this project were some of the most maliciously incompetent I have ever encountered, and there were several who appeared to suffer from bipolar disoarder and other mental illnesses. The various PMs from the government side were also responsible for approving every time submittal by HP and its subs. I know this because the gov't PM I supported routinely rejected even the most reasonable and unquestionable time submission, forcing us to justify, sometimes several times over, the most minor submissions. It is actually impossible for "HP" to have overcharged the government -- because it was the government at several levels that was responsible for knowing what its contractor support teams were doing, how much time they were spending, what they were delivering, and also, directly approving time-charging submissions.

5. It is also true that DOITT grew so fed up with its own leadership that they "borrowed' an executive from Gartner (who was actually most famous for being tall, tanned, and handsome, and having a profile named "climbme66") to come in and run the entire project, especially during the time period that is mentioned as being covered by the "overcharging".

Re:I worked on this project... (0)

Anonymous Coward | more than 2 years ago | (#40185111)

This is AC (6th month guy)...

I agree with #1 from AC above wanting to post anonymously...

I also agree with #3...poisonous is the exact right word! It really was a pit of vipers who were only out to enrich themselves and keep anyone who was useful and productive far far away so that they don't look bad.

I'd concur with #4...I was in ECTP...really the dregs as far as skills are concerned. If you took the same people and put them into a private sector company, they'd be axed with the exception of a few.

If AC is still working on the program, I can only say CYA buddy, and find an exit when you can...I did and don't regret it for one minute!

Re:I worked on this project... (1)

WOOFYGOOFY (1334993) | more than 2 years ago | (#40189997)

OK I believe you. Sorry for being so cynical .

Re:I worked on this project... (0)

Anonymous Coward | more than 2 years ago | (#40184901)

Posting anonymously just cause I don't want to get in trouble...FYI, I posted further up above as "Anonymous Coward" as the (6th month guy)...

That being said I can 100% corroborate what this person is saying! Yes I would agree that the reason the HP/VZ/Gartner contractors didn't get shit done is in part the fault of NYPD, FDNY, and mayor's office. Trust me theres plently of blame to go around. I worked along side of the contractors and saw that half the times they were asked to do useless busy work until the agencies got their heads out of their asses for a few mins. First person I met at FDNY dropped F-bombs in meeting like they were going out of style. She's famous in FD for her ability to yell in meetings and intimidate the shit out of you if you let her. And the best part is she runs the show for the FD you know when crazy is running the show nothing will get done. On the PD side, well, that was pure politics...the guy there seemed to want to make things work and compromise where it made sense for PD, but forces worked against him anyways. The private sector "executive" mentioned in the poster's comment above was a one of his big speeches to us he said something to the effect of "wife's mad at me for playing golf all day, so I thought I'd come run ECTP". What an ass! He and the guy working under him running the show were useless and completely disconnected from their staff. You couldn't even get them to say "hi" to you in the morning if you saw them in the break room getting coffee.

Thee credit should be shared just as much as the blame...but I would say that I'd rather work with any of the contractors before I'd work with a fellow city employee! At least the contracts had skills and knowledge...even if the city/agency folks kept getting in their way and asking them to do pointless bullshit "filler" work to keep everyone looking busy.

Good for John Liu (1)

geekoid (135745) | more than 2 years ago | (#40174241)

More governments need to nail those bastard that over charge and don't meet spec. Too many people are afraid they will look bad, so the force a bad system out and don't take recourse.

Portlands former Mayor Katz come screaming to mind.

HP...there is no job... (1)

WOOFYGOOFY (1334993) | more than 2 years ago | (#40175331)

There is no God given right for America to have a job done without us fucking America up the ass so far that whoever pulls it out will be crowned the fucking King of England. .

Carly Fiorina HP CEO, June 14, 2010

There is no job we gave to Americans after we talked Congress into letting us re-patriate the taxes we dodged by relocating our jobs overseas, and with which we promptly paid ourselves huge bonuses and made a huge stock buy-back.

Carly Fiorina HP CEO, June 14, 2010

There is no job that is America's God-given right anymore, except mine.

Carly Fiorina HP CEO, June 14, 2010

There is no job for the 20,000 Americans we laid off so we could pay ourselves tens of millions in bonuses for that quarter...

Carly Fiorina HP CEO, June 14, 2010

There is no job for Americans at HP anymore because HP is going down like a crack whore in a housing project

Carly Fiorina HP CEO, June 14, 2010

There is no job that is America's God given right anymore.

Carly Fiorina HP CEO, June 14, 2010 []

They should of have SAIC build it! (0)

Anonymous Coward | more than 2 years ago | (#40178891)


Total load of crap (0)

Anonymous Coward | more than 2 years ago | (#40181493)

I have worked on many projects like this, including many with NYC government. The spec is usually written by an outside contractor who has no clue about the real requirements. They just take a spec from another similar contract, and copy-paste it. It is usually so vague, you can deliver a box of bricks - or a launch system for the shuttle - and be either totally compliant, or totally non-compliant, depending on who you ask. The people working on the customer side are dumb and incompetent, and terrified of answering even a simple question, for their idiotic answers can be used against them when things head south. They are also mortified of upsetting their unions - and their unions use any such occasion to get upset, as their poor members' jobs get infinitely more challenging with any such system upgrade. They all need to learn which new button to press, and such. They need to attend many long hours of training. The list of grievances the unions submit for any such contract is a mile long.

All vendors, knowing all this, underbid the original contract knowing full well that there is plenty of money in change orders that are billed at T&M. The winning vendors then engage in a complex game of charades and chicken to find out the real requirements and get paid for them. My bet is that HP earned every penny of that T&M money, and Liu is blowing smoke.

I wonder... (1)

whitroth (9367) | more than 2 years ago | (#40181869)

... what software they're running for the 911 center.

Let me say that someone I know very well worked for the vendor who supplied the hardware and software for the City of Chicago 911 system in the late nineties. They heard that the vendor, PRC, which was first part of Litton, but sold around 2000 to Northrop-Grumman, had sold the system, Altaris, based on a prototype, *then* they had to make it actually work. By '97, they had, mostly, and it was to upgrades and enhancements. All of this ran on DEC Alpha failover clusters. By 2000, it ran really, really well.

IIRC, they said that NYC was looking at the software for their use.

Lessee, article says DEC, er, Compaq, um, HP for hardware, and Northop-Grumman for software..... Wonder what enhancements NYC wanted that were worth that much... oh, I know, they wanted it ported from C to Java-on-rails, or whatever.....

                            mark "deponent sayeth not"

Re:I wonder... (0)

Anonymous Coward | more than 2 years ago | (#40185077)

I'm also an anonymous insider who worked briefly on that contract during that time period. At the time, the "legacy" 911 system in FDNY was coded in Vax Macro (assembler) on DEC Vax minicomputers. This was not the Altaris system, but it's precurser. Whoever said FDNY's system was 40 or 50 years old was quite accurate. If that's not scary enough, their system was HEAVILY customized and looked like no other 911 system on the planet, not even others from the same PRC vendor. Entrenched is a pretty good word for this kind of situation. You desparately need an upgrade, but doing so is extremely perilous and expensive. If someone would be brave enough to write a book about it, it would be a fascinating IT case study for software lifecycles.

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