Municipal Government

NYCHA Consultants Cost Taxpayers Millions

September 16, 2013
By Neal Tepel

New York, NY – While recent news reports have brought attention to thousands of needed repairs gone unaddressed  in New York City's public Housing Authority (NYCHA), the other story is the poorly managed  NYCHA Capital Projects. At each of the 14 companies which have been "pre-qualified" to do major physical upgrade work for  NYCHA, employees earn as much or more than workers employed by the City of  New York who do the same jobs.

An audit by the City Comptroller  released just  last year found that the bulk of these projects are inadequately  supervised, allowing consultants with an incentive to hike their salaries, go over budget, and gain even more profits at the expense of  taxpayers. Millions of dollars are poorly spent on consultants and the outsourcing of various administrative functions.

The mismanagement of funds within NYCHA’s Capital Projects Division takes millions away from addressing much needed repairs. NYCHA staffing has been cut by more than 25% over the last ten years. At the same time, cuts in federal funding by HUD have been going on for 30 years.  Sequestration has also had a further devastating effect on building maintenance. It's more important than ever that funds be managed properly.

"Local 375 played a major role in bringing the excessive  overbilling  at CityTime to light," said President Claude Fort of Local 375. "Now we are doing the same with The NYCHA consultants." Claude pointed to a recent audit by  City Comptroller  John Liu released in March of last year. Liu said that NYCHA's internal software system, "Primavera" "did not provide accurate and complete information,"  and that the minutes of meetings with consultants were routinely missing. The report conclusions were  ignored by the  Bloomberg Administration and NYCHA Management.

A letter sent in March of this year by  House Rep. Tom Coburn to Cabinet Secretary of HUD Shaun  Donovan (who  used to be a top housing official in New York City) pointed  to a recent expose in the Daily News of years going by without needed  repairs having been made in  thousands  of cases. Coburn slammed NYCHA for mismanagement, including the well-popularized case of $42 million for security cameras going unspent. Yet Coburn overlooked the greatest problem at NYCHA — the collaboration and collusion between NYCHA officials and consultant firms to pocket exorbitant profits.

Local 375 Secretary-Treasurer Mitch Feder, a NYCHA employee  said that  "NYCHA's over  ten-year experiment with Construction Management (CM) firms  has  shown they produce no savings over doing the work in-house  — on the contrary, the CM's cost much  more."

September 15, 2013

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