New York State Comptroller Plans Audit of Office for Technology Procurements

Planned audit comes after New York State comptroller Thomas P. DiNapoli rejected a $7.5 billion contract that would have consolidated IT staff augmentation services.

by / October 22, 2010
A Cyber Storm III exercise participant briefs Department of Homeland Security (DHS) Deputy Secretary Jane Holl Lute during the exercise kickoff at U.S. Secret Service headquarters in Washington, D.C. U.S. Dept. of Homeland Security

New York State Comptroller Thomas P. DiNapoli announced Thursday, Oct. 21, that his office will investigate the Office for Technology’s (OFT) procurement process, after he rejected a $7.5 billion contract that would have consolidated the state’s IT staff augmentation services.

Auditors for the comptroller’s office have estimated the contract, which was awarded to COMSYS and subsidiary TAPFIN Process Solutions, is worth “only a fraction of that amount.” In a letter addressed Thursday to the New York State CIO/OFT, the comptroller’s office said the cost methodologies used for the contract were flawed and the contract didn’t provide the best value for the state. The review by the comptroller’s office was prompted by a protest from an unsuccessful bidder.

The comptroller’s office wrote that it “appreciates that the proposed model of consolidating purchasing power is intended to achieve savings for the state, previously estimated by OFT at $24 million.”

“However, the total expected contract cost of $7.5 billion for three years of consulting services appears to overstate IT consultant spending in the state and warrants greater consideration given the state’s ongoing fiscal constraints.” The comptroller’s office said it would welcome a rewritten bid with additional cost justifications.

A call to CIO/OFT for comment wasn’t returned Friday afternoon.

DiNapoli said he would launch a “full-scale” examination of the CIO/OFT’s procurement processes.

“These are tough times,” DiNapoli said in a statement. “The last thing the state should do is waste taxpayer dollars. In case OFT hasn’t noticed, the state can’t afford to waste $7, much less $7 billion. My auditors are going to take a very close look at OFT’s procurement practices to be sure taxpayers are getting what they pay for.”

DiNapoli is currently running for re-election.

In a pre-bid announcement last year for the IT staff augmentation contract, the CIO/OFT said the procurement was expected to reduce the cost, time and effort it takes to agencies to procure IT staff augmentation. The technology office was seeking a diverse network of subcontractors.

The contract award was first announced in January.

New York State CIO Melodie Mayberry-Stewart said at the time that TAPFIN was determined to have the best value for New York state. “The contract is expected to generate millions in savings statewide by aggregating IT staff augmentation consulting services and eliminating redundant efforts expended by state agencies,” she said.