A contractor hired by New York City to overhaul its 911 system may have received as much as $163 million in unjustified payments, city Comptroller John Liu announced Wednesday, saying he had asked prosecutors to investigate whether there had been any criminal fraud.
Auditors in Liu's office found what they said were instances of questionable billing by the contractor, Hewlett-Packard Co., and they accused the city of mismanaging the project. City Hall officials disputed the report, saying they had carefully overseen the contractor's work and had saved time and money by demanding improvements from the contractor rather than seeking a replacement.
Liu said that a contract provision could allow the city to recoup $113 million paid to the company during a three-year period in which it had received poor evaluations for its work. Additionally, auditors believe the company may have overcharged the city by about $50 million, based on their review of a sampling of timesheets that found $2.5 million in erroneous charges.
Auditors said they had found timesheets filled out weeks ahead of the work being reported, as well as instances in which unqualified workers were paid at high pay grades. In one case, a subcontractor charged the city $192 an hour for clerical work and for tasks including reporting a water bug, opening doors and fixing an odor in a bathroom.
A spokesman for Hewlett-Packard didn't return a call seeking comment. A spokeswoman for the Manhattan District Attorney declined to say whether prosecutors would investigate the matter.
At a news conference Wednesday, Liu tried to link the report's findings to the city's scandal-plagued payroll effort that led to a $500 million settlement and multiple fraud prosecutions — calling the 911 overhaul "CityTime II." He appeared alongside union leaders who have long argued that such contractor-led technology projects are magnets for waste.
Deputy Mayor for Operations Cas Holloway accused Liu of twisting the facts.
"The comptroller ... is not going to allow the facts to get in the way of the story he wants to tell," said Holloway, who argued that Liu's office was misreading provisions of the contract with Hewlett-Packard.
"Ultimately, the system's been delivered," and the city recognized the problems in the project and addressed them, said Holloway. "There was rigorous oversight of billing," he said, adding that the city would perform an additional review following the audit. "We don't think that there's the basis to believe that there was substantial overbilling or that the billing was incorrect on the project."
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