HP fleeced New York, claims accountant

New York, New York, the city which was named twice, is furious that HP tried to demand it was paid twice.

New York, New York City comptroller John Liu has penned a report which slams HP for overbilling the Big Apple by $163 million on a long-delayed upgrade to the 911 emergency call system.

Liu said in a statement that his office did an extensive audit of the Emergency Communications Transformation Program (ECTP) project.

The project is managed by the city’s Department of Information Technology and Telecommunications. When the project was awarded to HP in 2004 it was supposed to be done in 2008. Now it looks like it’s going to take until 2015 to complete.

It is not surprising that Liu is accusing HP of not performing on the contract between April 2005 and April 2008.

However, it also seemed to be issuing incorrect bills for time and materials on its portion of the contract to upgrade the 911 system used by NYPD and the Fire Department City of New York (FDNY).

Liu waded into the DoITT and said everyone must pull up their socks when it comes to vendor selection and payment control processes.

He thinks that the original ECTP contract was fairly straight forward. The system was supposed to cost no more than $380 million over a five-year term with two options to extend until June 2012.

But in January of this year, the city projected it would have spent $307 million by mid-April. Last year Northrup Grumman was awarded $286 million to do a second part of the original contract, ballooning the cost to $632m. Liu thinks that the cost overruns beyond this could be as high as an additional $362 million.

The equipment and systems integration portion of the original HP contract was supposed to cost $270 million, with $156 million coming from hardware and software and $114 million for integration services.

Basically it means that HP has overbilled the city by $113 million during the 2005 through 2008 time period despite “unsatisfactory performance”.

HP’s performance looks particularly bad when Liu had a look at the the timesheets filled out by HP and subcontractors on the project.

He found that as much as $50 million in similarly unjustified costs might have been added to the ECTP contract by HP.

After pressing equal on his calculator the city could recoup as much as $163 million from the HP portion of the contract.

“Taxpayers should be outraged at the fleecing that transpired under City Hall’s watch,” Liu said in his statement.

Liu has handed off the report to the Manhattan District Attorney’s office for a review to see if fraud charges should be brought against HP.

It seems that Liu’s report has not been blessed by those elected officials higher up the food chain.

Cas Holloway, Deputy Mayor for Operations for the City of New York told AP that Liu was not going to allow the facts to get in the way of the story he wants to tell.

Liu, Holloway says, misread portions of the HP contract and there was “rigorous oversight” of the billing. Not surprisingly HP agrees.

It said that it was only to deliver the Public Safety Answering Center (PSAC1) system, not a unified computer-aided dispatch system or the PSAC2 system that was awarded to Northrup Grumman.