To tighten belts, let's insource: Deputy Mayor Stephen Goldsmith says
city workers can do more
BY STEPHEN GOLDSMITH
DAILY NEWS STAFF WRITER
March 24, 2011-Usually, when government officials talk about spending
less money, they talk about outsourcing services to the private sector.
And in many cases, that can be very effective. But union leaders
often argue that it would be more cost-effective to give the work to city
employees - and sometimes, they are right.
When Mayor Bloomberg asked me to review the problems with the CityTime
timekeeping project, he also requested that I review all information
technology, or IT, contracting. After conducting a thorough review, I
have concluded that much of the solution lies not in more outsourcing
to the private sector, but rather in employing city workers to perform
more of our IT work. So in the weeks and months ahead, we will
decisively shift more work from consultants outside government to our
talented public employees. This will save taxpayers millions of
dollars a year.
Here is one example: This month, the mayor opened the city's first
consolidated data center. Instead of 40 separate data server rooms, we
will now have only a few centralized ones. Sounds simple - but it took
a lot of hard work to get done: It's part of our citywide technology
consolidation plan that will save taxpayers $100 million over the next
To build our new data center, instead of hiring an outside vendor for
project management and quality assurance as we would have done in the
past, we insourced the work to the Department of Information
Technology and Telecommunications' project management team. They
supervised the successful construction of the facility. Using the
know-how of city staff to oversee these projects will save an
additional $25 million over and above the $100 million we will save
from having fewer server rooms and other efficiencies.
That center where the mayor stood was built in record time, from start
to finish in only six months.
Also, when we recently renewed the contract with the company that
successfully built our state-of-the-art wireless network, we moved
much of the day-to-day management and servicing to our technology
agency, where it belongs. Insourcing this work alone is expected to
save $16 million. There are other examples. Our Business Express tool
- which helps businesses get permits faster - and our expanded 311
online program are both now led by insourced city employees, not
consultants. The Finance Department is hiring 45 city employees to
replace outside consultants, almost entirely in its technology
department. That will save millions more.
At the same time as we intelligently insource, we need to tighten our
oversight over outside contractors. Competent and honest vendors
respond best when they are well-managed by able city officials. We are
proposing, therefore, to expand a high-level city vendor management
office - and in the process, reduce the cost of outside projects and
test whether certain projects are even necessary.
And we are going to start challenging all components of technology
contracts and ensure that the city does not pay a markup to a
consultant for work we could just as well do internally.
We must also focus on subcontractors - companies hired by our own
vendors to help them complete their assignments. Insufficient
subcontractor oversight can lead to mismanagement or worse.
Subcontractors working on the CityTime project have been charged with
stealing $80 million from taxpayers.
Insourcing the management of projects and important decisions about
scope and cost will allow us to save taxpayer dollars, enhance service
delivery and ensure that IT vendor resources throughout the city are
delivering on time and on-budget for New Yorkers.
Goldsmith is New York City's deputy mayor for operations.