Tish James Offers Bill to Crack Down on Contractor Fraud

City agencies may soon have to report their cost overruns on large contracts, according to legislation being introduced today by Councilwoman Letitia James.

According to a news release, agencies would be required to notify the city council within seven business days when it authorizes a payment to modify or extend an original contract worth more than $1M, for an additional cost of $500,000 and/or more than 10 percent over the original contract price.

This legislation comes after hearings on the Office of Payroll Administration’s contract with CityTime, a payroll system that was marred with fraud and conspiracy. According to the Wall Street Journal, CityTime was expected to cost $63 million when it was launched in 1998, but the cost kept growing as contractors took kickbacks and consultants billed the city for hours they never worked. According to the New York Post, the project’s cost a decade later was closer to $760 million.

“It is obvious that a lack of administrative oversight of contracted companies leaves the City vulnerable,” said Council Member James, in the statement. “Although I support the administration developing technology that simplifies and updates necessary functions, I do not support the administration handing over blank checks to private companies for IT projects.”

Besides the CityTime contract, other debacles include the Emergency Communications Transformation Program, which went from an initial $380 million to $666 million, and the NYCAPS program, which has ballooned from $66 million in 2002 to $363 million as of 2011.