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New York City Launches a Tool to Drill Down On Government Spending

BY Miranda Neubauer | Wednesday, March 20 2013

A little over a week after the first milestone for New York City's Open Data Law, Mayor Michael Bloomberg and Comptroller John Liu announced Tuesday that New York City would become the first municipality in the country to establish a comprehensive subcontracting database that would publicly report payments made by primary contractors to subcontractors.

Currently, information about payments to primary vendors is available through the contracts section of the city's recently launched Checkbook NYC platform, Connor Osetek, spokesperson for Liu, explained. But the platform did not give details about instances where those vendors contracted projects out, he said.

"We've seen a lot of city projects that have run hundreds of millions of dollars over and were contracted out so that the public doesn't know how that money is being used," he said. Currently, he added, the usual way to obtain that information is by filing a Freedom of Information Law request to a specific agency for details on a specific contract.

"Before there was just not a centralized system for the tracking of contractors throughout the city," he said. "It was done agency by agency, and some did it better than others, there wasn't a central location where the information was being stored. This has that function and we're going one step further so that you can see it online."

The CityTime project scandal in connection with the city's effort to modernize its payroll system involved a kickback scheme between a prime contractor, Science Applications International Corporation, and a subcontractor, TechnoDyne, that caused the project's costs to grow to almost $700 million from $73 million, the New York Times reported last year. Last year, Liu — who is also a mayoral candidate — released an audit indicating that an emergency communications platform was behind schedule and over budget and criticizing Hewlett Packard for marking up subcontractor bills.

According to a city press release, starting this month, for any new contract over $1 million, prime vendors will have to disclose information about the names of subcontractors hired and all payments to them through the City’s Payee Information Portal. Beginning in June, that mandate will also apply to contracts over $250,000, meaning that the new database will cover 96 percent of all dollars spent on city contracts, according to the press release.

The new tracking system was built by CGI Group, which has completed work for New York City for the past 35 years, for a fixed-price deliverable contract of $1.6 million. According to the press release, the Mayor’s Office of Contract Services and the Comptroller's Office have been working on the effort for over a year, and recently started a pilot program with some vendors to test the system, which functions as a new application on existing systems for accounting and databases of information about past and current vendors. A tutorial on the existing site shows vendors how to add subcontractor information.

New York City says it has the right to withhold payment to prime vendors that fail to submit the required information.

Osetek said he thought the new information would be available to the public later this year. "Once these new protocols are established, each payment and data set will be fully integrated with the Comptroller’s Checkbook NYC fiscal transparency website ... placing never-before-seen subcontract data in the public domain," the press release says.

The city's effort is modeled on the Federal Funding Accountability and Transparency Act, which was signed into law in 2006 and requires federal contractors to disclose subcontractors through a searchable database. "Unlike the Federal government, however, the City is the first in the nation to publicly disclose both the names of subcontractors and payments made to them," the press release says.

“From creating a Citywide Performance Reporting tool, which allows the public to track agency performance, to establishing the City’s Open Data Portal, which makes more than a thousand agency data sets available for public use, we’ve worked to make City government more open and transparent,” said Mayor Bloomberg in a statement. “These new reporting requirements will help us to continue to lead the way in making government more accessible and accountable to the public.”

“Giving all New Yorkers the ability to keep an eye on this information will give contractors 8.3 million more reasons to spend tax dollars as prudently as possible. It’s great that the Big Apple is setting another national benchmark for government transparency," Liu said in a statement.

The new plan also earned high praise from open government advocates, who had previously worked with the Comptroller's Office on the Checkbook NYC platform.

"Digitizing and reporting subcontractor payments is a huge leap forward in accountability and transparency," the city's statement cited John Kaehny, executive director of Reinvent Albany and co-chair of the NYC Transparency Working Group. "Though somewhat dry and esoteric, this new reporting system has big implications for reducing corruption and improving efficiency, and when fully in place, will make New York City one of the most fiscally transparent cities in the world. When the subcontractor data is put into the Checkbook NYC platform, it will become instantly available for the rest of government and the public to use.”

In previewing the city's first Open Data Law milestone, techPresident reported that City Councilwoman Gale Brewer, who spearheaded that legislation, was interested in further legislation related to data on agencies' contracts with profit and non-profit vendors.