By Carol F. Yost
On May 5, the Daily News printed the dramatic story that, after years of outsourcing technical services to private vendors, New York City agencies are going to go in-house. Under the heading “City to In-Source Consultant Gigs, Save Millions,” they report that “city officials expect to save 3.6 million this year” and potentially “nearly $100 million over five years” by cutting off the “legions of $500,000-a-year consultants camped at scores of city agencies for years.”
The practice of outsourcing had been in place for more than twenty years, the article said, and it cited the colossal and very expensive failure of Northrup-Grumman in its attempt to fix the 911 system as an example of why privatization of needed services was a bad idea. The project was turned over to City workers.
For too long, the attitude has been that for-profit consultants or companies, with their money-making incentive and drive, could do a job more efficiently and better than City drudges. That’s changing. The privatization cost the City more, often did not yield better results, and was unfair to City workers—union members—who had toiled in the system, rising through the ranks after taking tough civil service exams; it made for fewer jobs being available to them, and insultingly implied that they just couldn’t be as good as outside consultants who often were paid much more. Now, job titles that are normally outsourced are being changed to regular city-agency positions.
A central pool of IT technicians is also planned, based at the Department of Information Technology and Telecommunications; they will be able to go from agency to agency to handle different projects as needed.
I recall one instance of a private consultant at HPD, where I was working at the time, a dozen years ago. Rafael Naveh seemed a quiet, unassuming man who for at least ten years was in charge of overseeing our entire computer system, which agency heads hoped to maintain as state-of-the-art.
Meanwhile, I knew a number of top-flight City workers who could surely have done an excellent job in the same position; they had style, too, and “the chops,” as they say. No drudges, these. But Raffi, originally from Israel, was nice, and he padded around in a gray flannel pajama-like outfit all day long, not bothering with the stylish duds some of the City techs wore.
Then on January 27, 2003, an article appeared in the New York Post, embarrassing the agency considerably and shocking many of its own employees. A photo of a McMansion in a leafy suburb accompanied the article. It was Raffi’s Paramus, NJ, home. He was bringing in $437,272 a year—much more than any City worker ever could, and in fact it was more than our Governor, our Mayor (if Bloomberg had accepted a salary), and even our President was being paid.
HPD management, interviewed for the article, had quickly responded that to get the best, you had to pay for it; after all, you were competing with private firms for the greatest talent. But with the appearance of the article the damage was done. This was a time when the City was facing a multibillion-dollar debt, and the Mayor (though not a friend of unions or City workers in general) had ordered agencies to cut costs. Shortly, after stroking its agency chin and reflecting upon the matter, HPD quietly terminated Raffi’s contract and turned to its well-dressed but lower-paid in-house staff.