More Insight into the New York CityTime Payroll Project Fiasco

It will take a few years before the definitive history of both the New York City CityTime project fiasco and kickback scandal can be written, but more insights into why the project continued despite persistent and increasing cost overruns are slowly coming to light.

There is an article in today's New York Times, for instance, that identifies the "project champion" who has kept the project alive despite a decade plus of problems as being New York City Director of the Office of Management and Budget Mark Page.

The Times article states that:

"Mr. Page, a lawyer, had little familiarity with technology, but he believed CityTime would curb timekeeping abuses and save the city tens of millions annually. So, wielding his power over agency budgets, he persuaded reluctant commissioners to adopt CityTime. And, brushing aside criticism, he insisted year after year that the project was inching closer to completion."

As you may recall, the CityTime project was planned in 1998 to cost around $63 million and take five years to complete; it is now estimated to cost some $720 million before it is finished sometime this summer (although Mayor Michael Bloomberg claims it will be completed earlier than that).

Both the Mayor and Budget Director Page insist that the effort will eventually save New York City taxpayers copious amounts of money when it is completed, although I doubt that even the most optimistic return on investment analysis would show a break even point anytime soon.

The Times article notes that while "Mr. Page had long been frustrated by myriad union timekeeping rules...," the CityTime system doesn't currently look for unauthorized overtime, says this story a few days ago at NBC New York. Unauthorized overtime can have long term financial consequences for the city in terms of increased pension payouts to city workers, the NBC story points out.

The Times article also goes on to state that one reason New York City didn't buy an existing commercial payroll system but decided to build one itself was that the city apparently thought it could eventually sell the CityTime system to other city and state governments for $200K plus user fees. That hope frequently turns to be wishful thinking, and adds to the difficulty of trying to control an out-of-control IT project.

In other CityTime-related news, the New York Daily News reports that more safety deposit boxes were searched by Federal agents looking for cash from those allegedly involved in an $80 million kick-back scheme that has been operating for several years on the project. Apparently, the safety deposit boxes were empty.

Finally, driven in large part because of the CityTime mess, the Daily News reported late last week that New York City Deputy Mayor Stephen Goldsmith has decided that there are too many consultants and contractors working on city contracts. As a result, in the future more work would be insourced to city workers. Furthermore, work that was still to be outsourced would be "more closely controlled" by city managers. Deputy Mayor Goldsmith made his intentions clear on the outsourcing/insourcing topic in an op-ed column in the Daily News last Thursday.

How this insourcing decision would apply to the CityTime project as it moves from development into full scale operation is unclear, especially given that, as City Comptroller John Liu noted in January, the contract  "... as it currently stands may allow the vendor [SAIC] to maintain an indefinite monopoly on the development and maintenance of New York City’s timekeeping system."

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Willie D. Jones
 
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