Former New Orleans mayor wasted money with outsourcing, IG says

 

Connecting state and local government leaders

Inspector general faults former Mayor Ray Nagin for outsourcing technology that increased the costs of recovery after Hurricane Katrina.

Former New Orleans Mayor Ray Nagin’s technology outsourcing cost the city an unnecessary $1 million more than if the work had been done in-house, according to a new report from Ed Quatrevaux, the city's inspector general.

The report, issued Aug. 30th, found the city’s contract with Telecommunications Development Corp. wasted more than $750,000 in an eight-month period from salaries alone. TDC salaries would have cost the city $960,000 more annually than having city employees do those tasks, Quatrevaux said in the report. The sum is equal to nearly a third of the $2.8 million shortfall the technology office faces this year, according to a story in the New Orleans Times-Picayune.

Read the IG report here.

Additionally, the inspector general noted that the city unnecessarily increased the cost of the Federal Emergency Management Agency reimbursement assistance for Hurricane Katrina by hiring TDC to receive invoices from Integrated Disaster Solutions, a firm hired to work with FEMA for Hurricane Katrina repair payments. TDC billed the city $275,000 while providing no additional services, when New Orleans could have hired IDS directly, Quatrevaux said. New Orleans also incurred an additional unnecessary expense of $52,000 “by shifting administrative workers from a competitively bid contract for non-professional services to the higher priced TDC contract for professional services,” he wrote.

The inspector general also found the procurement process of TDC was flawed and did not promote fair competition. “The city passed over a higher ranked proposal and chose TDC despite lower scores for experience and competency and higher proposed hourly rates," Quatrevaux said in the report. "After negotiating a reduction in TDC’s proposed hourly rates for the contract, the city increased the rates through a questionable contract amendment.”

Moreover, the report concluded, “the contract maximum swelled from $450,000 to more than $5 million, without regard for the impact on the city’s budget….The responsible officials did not ensure that adequate funds were available for the contract, jeopardizing the integrity of the city’s budget.” By the end of May, TDC had billed the city $3.7 million, the report states.

In a formal response, current Mayor Mitch Landrieu's chief administrative officer, Andy Kopplin, said the new administration wasn't involved in hiring TDC and since taking office has overhauled the city's procurement process. Kopplin added that the new administration agreed that the IT department had developed an over-reliance on contractors and as a consequence the administration was working on reducing the use of contractors as well as contractor rates.

In the Times-Picayune article, Landrieu spokesman Ryan Berni said TDC quit handling all recovery-related work June 30. The technology portion of its contract expires Sept. 30, he said.

Nagin paid TDC and other contractors in part with a $200 million state-financed revolving loan intended to jump-start rebuilding projects, according to The Times-Picayune.

New Orleans is not the only government entity to recently experience technology outsourcing issues. Virginia is still fighting massive computer failures that are inhibiting the state's Department of Motor Vehicles and other agencies from carrying out their duties. And like New Orleans, Defense Secretary Robert Gates’ announced that part of his plan to reduce Defense Department spending by $100 billion over five years included eliminating thousands of DOD positions and thousands more contractor jobs.

 

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.