Contract overruns are very common at the New York City Department of Education.
In the most egregious overrun, a contract with Xerox Corporation to lease copy machines to schools ended up costing the taxpayers more than $67 million. It had been estimated at a cost of $1 million.
In a letter written to the board from City Comptroller and Mayoral Candidate, William Thompson, called the a “troubling pattern of mismanagement” at the department.
Thompson's claim has been disputed. Representatives say that city records show that the Xerox contract was estimated originally at $31 million, not $1 million, as Thompson reported. Meaning the overrun $36 million, not $66 million.
See the complete article here.
In a written response to the Comptroller, the Chancellor explains:
The figure you give for the contract’s original amount, $1 million, is incorrect. The Xerox contract was actually registered for $31 million. We originally registered the contract for $20 million in 2002, and later extended it twice, once by $10 million and a second time by $1 million. It appears that you cite the amount of this last extension as if it were the entire registration amount. The accurate estimate is still less than the amount actually expended, but as we explain below this fact in itself is neither problematic nor atypical in a requirements contract.
For the record, a review of the original Xerox contract documents shows that the original estimate was reached through a standard process. Procurement for the Xerox and T&G Industries contracts began before the start of mayoral control (the contracts went into effect on August 1, 2002). The Board of Education provided vendors bidding on this RFP (including T&G Industries) with a comprehensive inventory of the Department’s copy machines; the number and types of machines guided the unit pricing proposed by the vendors, ultimately resulting in a contract estimate..."
Seems this is politically motivated, who woulda thunk.
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