Mayor Bloomberg Demands SAIC Pay Back $600 Million In Cost Overruns For NYC Computer System
from the good-for-him dept
Over the years, we've chronicled a number of absolutely ridiculous over-budget computer systems for government agencies. My favorite still remains the FBI computer system -- which was over budget by hundreds of millions of dollars, was useless at finding terrorists, was so bad that a contractor had to use some free internet tools to hack into the system just to get his work done, and was so confusing that a computer science professor who reviewed the system said he and some others thought of going on a crime spree the day the FBI switched over. That system was built by SAIC, and the FBI ended up scrapping it and starting from scratch. But, as far as I know, the FBI never asked SAIC for the $600 or so million in taxpayer money it spent on the system back.Apparently, NYC Mayor Michael Bloomberg has had a similar experience with SAIC and the new computer system for NYC it's been building. But, Bloomberg is a businessman by trade, rather than a politician, so when a company charges you $600 million (way overbudget from the original $63 million), he knows that you ask for your money back. So that's what he's doing. He's demanding a $600 million refund from SAIC. Part of the issue is that, as with many of these type of projects, there appears to have been significant fraud involved:
The recent indictment of SAIC's leader project manager on the CityTime job, Gerard Denault, as well as the guilty plea to criminal charges made by SAIC systems engineer Carl Bell, who designed the software, are "extremely troubling and raise questions about SAIC's corporate responsibility and internal controls to prevent and combat fraud," he added. Denault and Bell were charged with were charged with taking kickbacks, wire fraud and money laundering.I would imagine that SAIC has no interest in paying back $600 million, but it could make for an interesting lawsuit if Bloomberg decides to press the matter.
Also recently indicted were Reddy and Padma Allen, a couple who head up New Jersey systems integrator TechnoDyne, which was SAIC's primary subcontractor on the CityTime project. Federal authorities allege that the Allens and others conducted an elaborate overbilling and kickback scheme that siphoned millions of dollars from the project.
Federal authorities have also contended that SAIC had received a whistleblower complaint about the project as far back as 2005, Bloomberg said in the letter. "It is unclear what SAIC did at that time to investigate these serious allegations."
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: computers, cost overrun, michael bloomberg, nyc
Companies: saic
Reader Comments
Subscribe: RSS
View by: Time | Thread
[ link to this | view in chronology ]
Re:
Stupid fuckers should have hired three companies to build seperate systems and then picked the best one to use. The incentive for the builders would be the ongoing maintenance and equipment replacement contracts for whoevers design was chosen.
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Government Designed Systems
Sometimes it is true that contractors come in and milk the contract for cash without any interest in delivering a usable system.
Most of the time, contractors do everything in their power to chase ever moving, ever changing requirements. At the same time, restrictions on code development methodologies force them into continual modifications of increasingly cryptic code bases, until there is just no hope.
I have no knowledge of this system in particular. However, I'd double down on any bet that NYC's specifications, restrictions, and moving requirements are really at fault.
[ link to this | view in chronology ]
Re: Government Designed Systems
There seems to be a continual inability of the client to accurately specify their requirements... and the larger the number of "managers" the greater the shift in requirements. As government agencies everywhere in the United States are bloated--mainly with useless middle managers seeking to justify their existence--the requirements become an ever moving target.
[ link to this | view in chronology ]
Re: Re: Government Designed Systems
Oh, and to even get into a position in one of these agencies where you'll be put in charge of such a contract, you'll have to be a master at a number of skills that are not business, cost-cutting or engineering.
[ link to this | view in chronology ]
Re: Re: Re: Government Designed Systems
XD
I know... I know.
[ link to this | view in chronology ]
Re: Re: Government Designed Systems
[ link to this | view in chronology ]
Re: Re: Government Designed Systems
I work for a defense contractor, and while at a military health systems helpdesk, we dealt with Army, AF, and Navy with all sorts of applications like CHCS, DMHRSi, AHLTA, CCQAS, et al. And for each application, you had to build into the software specs for each branch of service since they couldn't agree on one format.
I'm guessing the same thing is happening in NYC with all the cities agencies wanting their own personal look to it all.
This doesn't excuse SAIC from what its employees did, and they ought to be held liable. They should give back the money & provide a working system.
And on a personal note, when we lost the MHS contract to HP/SAIC due to them vastly underbidding, I was 2 days away from accepting the job with SAIC before LM offered me another position.
[ link to this | view in chronology ]
Re: Re: Re: Government Designed Systems
And, yes, multi-agency SOWs are the worst, with each having its own perceived needs that each insist be worked into the contract.
You were fortunate LM offered you another position. Far too often the loss of a contract = loss of charge number = loss of job. I daresay few people realize the precarious position those who are "directs" are in.
[ link to this | view in chronology ]
Re: Re: Government Designed Systems
and...
There seems to be a continual inability of the client to accurately specify their requirements...
And how is this any different than in private business?
[ link to this | view in chronology ]
Re: Re: Re: Government Designed Systems
[ link to this | view in chronology ]
Re: Government Designed Systems
[ link to this | view in chronology ]
And tax revenues are low at the moment.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
SAIC pretty spooky
In fact, I bet that sometime next week, he'll mysteriously suddenly find a reason to let the whole kerfuffle slide quietly into oblivion.
[ link to this | view in chronology ]
SAIC
[ link to this | view in chronology ]
Re: SAIC
You say "same old. same old." Until recently the company was owned by its employees, which to me means that you must have at one time been an owner.
I was SAI's/SAIC's outside counsel for many years, and while perhaps I dealt with other programs, I never met a single person, from the most lowly up to Bob who founded SAI, who was anything other than honest, hardworking, and dedicated to doing the very best job they were able to do.
[ link to this | view in chronology ]
Re: Re: SAIC
[ link to this | view in chronology ]
Serves them right
[ link to this | view in chronology ]