In The News › Government watchdog report highlights questionable spending at City Hall

Nov 8, 2010

Source: Fox 8

Filed under: Contracting, Orleans Parish

Government watchdog report highlights questionable spending at City Hall

Monday, November 8, 2010
By Staff
Fox 8 News

A new report by the Bureau of Governmental Research highlights questionable spending by the city, mismanagement of public records, as well as inefficiency and waste at New Orleans City Hall. After reviewing hundreds of city contracts from 2009, BGR now questions why the city hired certain companies, without ever giving other businesses a shot at applying for the same job. The group’s findings, released Monday, also point to a number of city projects that, despite being funded by tax payers, went absolutely nowhere.

“Contracting was very loosely managed, to put it kindly,” said Janet Howard, BGR President and CEO. “Every dollar we waste on a contract where the project doesn’t accomplish what it was supposed to is money down the tubes.”

BGR’s findings, titled Inside Outsourcing: A Year in the Life of City Contracting, include a list of “projects that went nowhere,” despite being funded by taxpayers.

“The Nagin administration changed the scope of work on a complex of storm-damaged Parks & Parkways buildings from repair to reconstruction despite the fact that FEMA had not declared the property eligible for reconstruction,” the report stated. “The estimated cost soared … causing the architect’s fee to increase as well. The City paid approximately $513,000 on the contract, multiple times what the City would have paid if the project had been scoped properly.”

“And that’s just a waste of money,” said Howard. “Why put a contract to design something you don’t have the funds for?”

BGR notes the Landrieu administration has since changed the project back to renovations, instead of reconstruction.

The report also sheds light on a city website few actually know about, but cost tax payers thousands. It was supposed to feature information on the recovery effort for the former Office of Recovery and Development, but the site failed to gain momentum.

“The City paid the firm approximately $88,000,” BGR writes. “But now, only two years after the contract took effect, the website is not publicly accessible.” If you try to log on today, you’re automatically redirected to the city’s homepage.

And what BGR refers to as the “IT Debacle,” also extends to the much criticized crime camera program. The watchdog group says in September of 2009, the Nagin administration paid a contractor $400,000 to repair the city’s network of crime cameras. Yet, according to BGR, the work never improved the reliability of the system. Just last month, Mayor Mitch Landrieu announced the city was nixing the entire program. Since its inception, the crime camera system cost taxpayers more than $6 million dollars, but only netted less than 10 convictions.

The report also accuses the Nagin administration of avoiding the public bidding of contracts, saying the city, instead, often handed the work directly to certain companies.

According to the City Charter, a contract must be awarded to the “lowest responsible bidder,” unless the contract is considered a ‘professional service.’ Citing the Home Rule Charter of New Orleans, BGR outlines ‘professional services’ as jobs dealing with “law, architecture and accounting, and occupations requiring a high level of training and proficiency, such as information technology.

“The City avoided going through a bid process by inappropriately designating certain services as professional,” BGR wrote. “These included call center, copying, news clipping and boat towing services.”

The largest of these, according to BGR, was a $5.7 million contract with ACS State and Local Solutions, Inc. to provide the system and staffing for the city’s maligned 311 call center, which has since been dismantled.

“Categorizing nonprofessional services as professional services inappropriately removes them from competitive bidding rules that require them to go to the lowest responsible bidder,” BGR wrote. “It allows for the selection of contractors who may not be offering the lowest price, leaving taxpayers to cover the difference.

BGR’s investigation into city contracting under the Nagin administration also found the city was avoiding the public bidding of contracts by simply renewing current city contracts, and then later altering them.

BGR found that the City circumvented the competitive selection process by inappropriately expanding the scope of services and dramatically increasing the dollar value of several large professional services contracts,” the report stated.”

“You lose out because you aren’t looking at the field to see who can give you the best service and you also aren’t seeing if someone can give the same service at same quality, at a lower price,” Howard said.

One example, says Howard, yet again surrounds the city’s crime cameras. The tech firm Ciber Inc. was hired in 2005 to integrate the city’s technology systems, but “over time the city assigned Ciber tasks outside the scope of the initial contract,” including the installation of the city’s crime cameras.

As a result of that expansion and more, Ciber’s budget cap of $5.5 million dollars, first set in 2005, ballooned to $46.8 million by 2009—more than 8 times the original amount.

The BGR report also focused on the city’s management of public records, saying, “The City incurred significant costs for outside attorneys and other consultants as a result of officials’ failure to properly retain and provide public records.

The report specifically cites the lawsuit, Lee Zurik vs. C. Ray Nagin, in which Zurik sought e-mail messages and calendar pages from the mayor under public records laws. The Nagin administration, however, failed to provide much of the requested information.

“The lawsuit generated several contracts: a $15,000 contract for legal advice; an $8,500 contract for a technology trade association to recover missing e-mails from the City’s computer systems; and later a $15,000 contract with another tech firm to review the first one’s work and test for additional e-mails,” BGR wrote.

In addition, the City entered into yet another contract, once the lawsuit was settled, to update the city’s policies and procedures for retaining e-mails as public records. That contract, according to BGR, was capped at $50,000.

In total, BGR reviewed 822 complete city contracts. It remains unclear how many more city contracts were active in 2009 because BGR says the city was unable to provide a complete list.

Howard says the full report, including a list of recommendations, was recently provided to the Landrieu administration for its review.

Nov 8, 2010

Source: Fox 8

Filed under: Contracting, Orleans Parish

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