Take TWO (AYR’s) On Times Coverage- Revisiting Light Shed by CityTime Outsourcing Scandal When Reexamining Bloomberg Management Myth

In beating the New York Times to the punch covering the Bloomberg administration’s admissions about the city’s failed outsourcing policy, an about-face in that came in response to the CityTime scandal, Noticing New York presented a very different and much bigger big picture story than did the Times Sunday. - - Missed in being so Johnny-on-the-spot was the opportunity to incorporate observations by Atlantic Yards Report today about how the Times story buttressing a key point of that Noticing New York coverage: That the ill-fated trust the administration placed in delegations of government duties to the private sector carries over into its failures with respect to the management of the city’s mega-development projects.

Atlantic Yards Report (Monday, March 28, 2011, Behind the Bloomberg administration's CityTime scandal: budget director Mark Page (who helped steer the revision of Forest City Ratner's MTA deal)) connects a dot the Times article neglected to (Behind Troubled City Payroll Project, Lax Oversight and One Powerful Insider, by David W. Chen, Serge F. Kovaleski and John Eligon, March 27, 2011). . .

. . . Atlantic Yards Report points out that the “drive to install the” [disastrously outsourced CityTime] “system could be traced to the determination of one powerful administration insider: the budget director, Mark Page” (Times quote) “one of the two Bloomberg appointees on the board of the Metropolitan Transportation Authority who pushed hard against any skepticism” (AYR quote) for the continued uncontrolled outsourcing of the Atlantic Yards megadevelopment (as a monopoly) to Forest City Ratner in June 2009 when that entailed a substantial revamping of the project without bid for the developer's benefit (and the public’s detriment).

Atlantic Yards Report thereupon lays out the course the city, MTA and ESDC should have taken at that juncture in 2009, which course might well have been pursued were it not for the obdurate case that budget director Mark Page helped spearhead to continue outsourcing to the weaseling Forest City Ratner as developer; Atlantic Yards Report does so, quoting shrewdly from a 1994 New York Times editorial written when a similar juncture was reached with respect to the Coliseum site at Columbus Circle:

The most sensible course now is for the city to find out anew the market value of this property, and that cannot be accomplished through negotiations with one bidder.

New Details in Times Coverage Plus Blame-Trading

Yesterday’s Times story and the Noticing New York coverage from Sunday (which draws partly on prior New York Times coverage) are `apples and oranges' enough so that one cannot really say either is necessarily, per se, better than the other. But let's consider.

The Time article gets to the issue of private sector outsourcing in its third and fourth paragraphs and then never returns to examine the issue of that policy (now reversed):

Last week, Deputy Mayor Stephen Goldsmith declared what had become obvious: the city cannot rely on outside consultants to monitor multimillion-dollar technology contracts, which it had done with CityTime. He added that the city would create a new office inside City Hall to do so.

An examination of the events that led to the CityTime scandal reveals lax oversight, mismanagement and a basic failure to control costs.

The Noticing New York article spent some reviewing the flaws likely inherent in outsourcing of government responsibilities.

What the Times article does do is furnish details about who saw or should have seen the CityTime disaster coming and how the ill-advised work proceeded at great expense anyway. The details for the story seem to have been furnished and fueled by some behind-the-scenes efforts at blame-trading even as the Bloomberg administration was publicly accepting responsibility with adult sobriety.

Mounting Ironies

One thing the Times failed to do is observe this irony noted in the Noticing New York Coverage:

. . . that a fraud involving a system to reliably monitor city employee attendance was perpetrated in part with the submission of false time sheets.

The details in the Times, however, addressed other management ironies:

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.

(To fully savor this one has to remember- unstated in the Times- that other factors aside, the city is said to have been taken for $80 million in fraud, perhaps more than it hoped to save.)

And:

The industry standard for payroll or other automated projects is typically a cost per user of $200 to $1,000. By contrast, CityTime’s cost per user is roughly $4,000. New York State, for example, is spending only $217 million to modernize its finance and accounting systems — a far more ambitious project — that will be used by 200,000 people.

(Previously in its story the Times provides the context that: CityTime switched from being a “fixed-price contract, in which a negotiated amount is paid for services delivered, to an hourly one. The cost then climbed from $224 million in 2006 to $628 million by 2009. Investigators say the hourly-wage arrangement, coupled with a lack of oversight, facilitated the corruption scheme.” Incidentally, when you think of the lack of any fixed enforceable price or scope of work leading to disaster, think Atlantic Yards- and Mark Page’s support for it.)

Administration Turning on Page (With Blame for Thompson Added In)

The main effort in the article to deflect blame from the Bloomberg administration is by pointing to supervision over the CityTime contract that was supposedly shared with Bill Thompson as the then city comptroller, but immediately before getting into that the article first disassociates the rest of the Bloomberg administration from Mr. Page:

“Nobody was enthusiastic about CityTime,” said one former high-ranking Bloomberg administration official who, like most people interviewed, insisted on anonymity because the investigation was continuing. “Our take was that CityTime was long and troubled, but that it had a champion, and that champion was Mark Page.”

Shades of the Atlantic Yards, also so generally unpopular (but supported by the mayor)! (Page is described in the article by a senior Bloomberg administration official as an obsessed “Ahab”.)

We learn that Thompson did not “audit CityTime, despite a crescendo of grumblings” but conversely (according to one of his former high-ranking aides) “the comptroller’s office raised, on at least five occasions, concerns over costs in meetings with Mr. Page, as well as with others working for Mr. Bloomberg.” So does the quoted claim that Thompson was “asleep at the switch” hold up?

The debate about Thompson vs. Bloomberg administration responsibility for shared responsibilities that went wrong is reminiscent of the Bloomberg/Thompson debates during the last campaign for mayor when they traded play-to-pay accusations about city pension fund investments previously covered by Noticing New York.

The skinny on this is that Thompson defended against Bloomberg’s charges saying that Bloomberg was accountable for pension funds investments since the mayor appoints the majority of board members and the chairman of the pension boards that vote on the investments. (The Times offered the judgment that the buck ought to stop with Thompson under the city charter.)

Thompson’s defense meant that he and the mayor were pointing fingers at each other, each saying that the other either 1.) had the responsibility (all of the “buck”), or 2.) was at least supposed to be acting as a check against their own abuse. Could we really expect Bloomberg and Thompson to be a check and balance for each other when it came to the pension fund investments, or CityTime or Atlantic Yards?

What came out after the election was that Bloomberg and Thompson were far cozier than almost anyone knew: “The mayor has directed or triggered between $43 million and $51 million in public and personal subsidies into a museum project led by Thompson's current wife and longtime companion, Elsie McCabe-Thompson, dumping $2 million of additional city funding into it as late as September 30, in the middle of the mayoral campaign.” (See: Bloomberg and Thompson: The (Really) Odd Couple, Now it can be told: The surprising ties between the billionaire mayor and the poor slob who ran against him, by Wayne Barrett, January 05, 2010.)

So much for the idea that the two men were a check and balance against each other.

Connect the Dots

So, bottom line, the Times article is pretty good for some original reporting that surfaces additional details respecting the particulars of Bloomberg’s CityTime embarrassment and, in addition, thank God that Atlantic Yards Report weighed in afterwards pointing out the Mark Page/Budget Director link between the CityTime scandal, but if you want a bigger picture of the connected dots when it comes to delegating the duties of government to the private sector with outsourcing together with basic examination of the myth of Bloomberg management expertise, I think you will find the Noticing New York article on this subject extremely valuable: The Myth Of Bloomberg’s Management Expertise Reexamined: What Happens When Government Doesn’t Manage Its Programs (Saturday, March 26, 2011)