County Bigwigs Rant About Multimillion-Dollar Cost Overruns
In the end, they throw more money at a couple of costly and controversial projects.
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Millions of dollars in cost overruns left Orange County officials fuming Tuesday, but that was about all they could do.
At issue were a couple of pricey projects seeking additional funding from the Orange County Board of Supervisors.
The first involves a massive overhaul of the county's computerized property tax management system, which hasn't been updated since Ronald Reagan was president.
A few years ago, the county hired Tata Consulting Services, an Indian company, to design a new system based on a 6,000-page memo developed by the county. Estimated cost: $7.6 million.
Apparently, the 6,000-page memo wasn't detailed enough.
"There were a lot of loose ends in that document," county auditor-controller David Sundstrom told a frustrated Supervisor John Moorlach at Tuesday's board meeting. And revisions to the state tax code caused additional snafus, delaying the completion date from July 2011 to June 2012--and jacking up the price tag.
Earlier this year, Tata asked for an additional $4 million to finish the project, plus $800,000 for travel expenses and support. County officials negotiated the price increase down to $2.7 million, bringing the final tab to $10.3 million (which also includes a six-month warranty), an amount the supervisors unanimously, albeit somewhat reluctantly, approved Tuesday morning.
But wait, there's more. In addition to buying the new computer system, the county also has to train employees to use it. On Tuesday, supervisors OK'd another $2 million to GCAP Services Inc. to teach county workers to use the new property tax system, as well as new software for the county's payroll, purchasing and human resources departments.
Last year, the county employees union blasted all the computer system upgrades, saying they were ridiculously overpriced, full of bugs and inefficient. (See the video that accompanies this story.)
The $3.7-Million Landfill Office
Another item that riled supervisors was a request for an extra $400,000 to manage construction of an eco-friendly office building at the Prima Deshecha landfill, which serves South Orange County.
In 2009, the county budgeted $3.7 million to build a 10,000-square-foot "green" office building at the landfill. The project was supposed to be done last August but has turned into "a disaster," according to county officials, who said they expect to file a lawsuit against the construction company, Horizon Construction Co. International Inc.
However, much of Tuesday's ire was aimed at Bryan A. Stirrat & Associates, which was hired to oversee the project and provide archeological services. Normally, a project manager's fee equals 15 percent of the total construction cost, officials said, which would have been $555,000 in this case.
But, so far, the county has paid Stirrat $1.6 million. And, on Tuesday, the firm asked for an additional $400,000 to oversee final touches on the project, primarily landscaping at this stage, officials said.
Giving Stirrat $400,000 "to watch a guy finish landscaping ... is ridiculous," Supervisor Shawn Nelson snarled. It's like "paying nuclear engineers to keep track of someone changing a 9-volt battery."
In the end, supervisors agreed to pay Stirrat $138,000 for work already done and ask the county's public works department how much it would charge to take over the rest of the project.
But Supervisor Janet Nguyen said she wasn't sure in-house oversight would be much cheaper. Nguyen said she's seen how much the public works department charges its fellow county agencies and "they're expensive."
John
8:10 pm on Tuesday, June 21, 2011
Supervisors gave themselves a 33 percent raise. County employees have not had a raise for over 4 years and we have the worst benefit packgage of any County. We pay a hugh amount for our pension, medical etc. The supervisors make the County a very bad place to work and when you add on these stupid projects that could of been completed internally. We need a 10-20 percent raise next budget cycle to keep us from starving to death. This BOS hate the employees and we are the ones keeping the County going.
Heather Pritchard
7:37 am on Wednesday, June 22, 2011
Orange County doesn't have a company that could do these upgrades? Seriously? We had to pay a company outside of the Country to do this? Wouldn't you want the company who built the system to be close by if there were issues? And think about the jobs it would create by keeping it local? How many technology companies do we have in Irvine alone?
The mind boggles.
Shripathi Kamath
1:08 pm on Wednesday, June 22, 2011
You see, the fad is all about outsourcing to cut costs. I get approximately twenty emails a day, and perhaps ten phone calls a month from a "cheap" company to "offshore" my company's software development. Having worked in the industry for about a quarter of a century, the elusive myth that you can get something done using "cheaper labor" has often led to the downfall of many software companies.
Software development is a labor-intensive profession. It is ironic in the sense that software actually automates other forms of labor. Going with the low(est) bidder, and that too on a "specification" is a sure recipe for overruns, spectacularly low quality, and is begging for lawsuits.
Like met00 says 'It is about creating a spec that "local" talent would be willing to take.' It gives me hope that "local" talent is not stupid enough to accept a 6,000 page specification written by (likely) computer science illiterate bureaucrats/their minions.
Buy off-shelf software from companies that have solved problems like yours. Adapt your business, yes ADAPT, to how the software works. That is what you do when you have a limited budget.
You want to do custom software, you'll need to spend a lot more than you're willing/planning to. Time and money. You'll always find someone who'll "accept" the job at the "stated rates", and you'll almost always find yourself fighting, renegotiating, suing, and rarely getting what you paid for.
Exceptions exist, but are rare.
Roy Rivenburg
1:42 pm on Wednesday, June 22, 2011
The 6,000-page document was a "needs assessment" describing what the county wanted out of the system. After TaTa was hired, I believe it put together a "requirements assessment," which detailed over 1,000 processes to bring the 6,000-page memo to life. About 1.5 million lines of code were written.
Shripathi Kamath
3:14 pm on Wednesday, June 22, 2011
Paying software professionals by lines of code, or the number of words in a "requirements assessment" is equally brain-dead. (No, you weren't advocating that Roy, just to be clear)
Not an exact simile, but it is like judging writers by the number of words they used in an article, or a book, as a measure of the utility of the book.
BTW, the company is Tata, not TaTa. A patriarchal global conglomerate, and one of the wealthiest in the world (think family who owns Walmart), who have their footprint in every industry. Steel, automotive, energy, software...
Roy Rivenburg
8:20 pm on Wednesday, June 22, 2011
@shripathi, Thanks for the correction on Tata vs. TaTa (the latter was how the board of supervisors agenda packet spelled it). I fixed that. Also, in digging through other documents, it appears the county might have hired a consultant to help develop the 6,000-page memo. But it wasn't written by Tata.
Kerry
10:46 am on Wednesday, June 22, 2011
Exactly my thoughts too Heather. Using our tax dollars for a program that collects tax dollars. They couldn't use a local company that pays taxes and hires employees that pay taxes? Has our tax system and employment laws made us uncompetitive? Even our own government recognizes this? If our businesses our forced to obey these laws then they need protection from foreign companies that do not have to follow the same laws. Here is the root of our decline as a nation. We can not compete with companies in countries that have little or no employment laws. Minimum wage laws, federal and state income tax, social security tax. Where are the tariffs that should be in place to level the playing field? Meanwhile our citizens are forced to struggle in a job market that has record unemployment levels! Government is not protecting our citizens. Unemployment is responsible for crime, loss of homes, suicide, breaking up of families, poverty. Buy American made products, if you can find them. We need a level playing field where everyone is following the same rules.
Dweezle
11:14 am on Thursday, June 23, 2011
I agree Kerry, I refuse to walk into a WALMART store, when I have the privilege to shop, even for groceries, I look for Made in California or Made in USA. Yes, I miss out on good deals on fruit & vegetables that are grown in Mexico or Chile, but oh well.
I firmly believe is using US contractors, especially for Government Work. In my opinion it is against National Security Interests to use any foreign companies in the manufacture or software design of any US Government Project, be it city, county, state or national. Just like Pakistan, our so called ally, who was hiding Bin Laden the entire time. One never can predict when an ally will turn on us, and who knows what little bug they will add into software they develop for us.
Kerry
1:22 pm on Wednesday, June 22, 2011
I'm in construction. The bidding process is competitive and often the plans and specs are insufficient and open to question. That never stops the bidding. Those who bid high enough to do the job right don't usually win the job. Once the project is underway then these issues are brought up and extras are the norm. I doubt if anyone refused to bid on the job for that reason.
James Schumaker
4:06 pm on Wednesday, June 22, 2011
I'm trying to figure out why we need a radical upgrade to the property tax management system in the first place. The current system may not be the last word in information technology, but from my own parochial point of view it seems to be working OK. I get my tax bills and can pay online. That's all I really need. After all, it wasn't so long ago that we managed property taxes with a couple of clerical staff, some adding machines and a few pens, pencils and yellow legal pads. What has changed so much that we need a ten-million dollar system?
KC
4:56 pm on Wednesday, June 22, 2011
Mostly that an antiquated system like that is often filled with errors and is not properly archived. Also, tax laws have changed since the 80's, I would imagine, and the system they had in place probably wasn't as nible or scaleable as it needed to be. Plus if it needed to run on legacy machines that also poses a massive problem as well, lacking security, etc.
Kerry
4:30 pm on Wednesday, June 22, 2011
My guess is that it will eliminate more jobs.
Shripathi Kamath
4:33 pm on Wednesday, June 22, 2011
Ah, so now we can bash the unions.
Game on!
John
4:00 pm on Sunday, June 26, 2011
They could of done the whole project internally with full time County employees. You can really get alot of work in the other duties as required clause that you sign. Plus giving them a decent salary and benefits they buy things that make the economy grow. My department saves the County at least a million dollars a year in saving. Contracting especially to a foreign company is just not right and I bet it is the brainchild of that moron Moorloch!