Which NYC Official Failed to Collect Ivalua’s $25M Bond for Non-Performance — and Why?

2019-09-30

Ivalua

Two Years and Tens of Millions of Dollars into a Contract for an eProcurement System, There Was No Design 

New York City wanted to modernize the way goods and services are purchased by some 40 departments with a web-based eProcurement system that would streamline processes and reduce costs. But for some unknown reason, in May 2016 the City gave a $30.5 million contract to Ivalua, a French software company that had never worked for any government in the U.S., and KPMG, a services and accounting firm not known for systems integration.

Was it because Ivalua-KPMG offered the lowest bid? Not according to our sources.

Two years after the contract was signed, not even the design was done. By June 2018, KPMG had been replaced with Accenture. And the City’s Chief Procurement Officer Michael Owh had left town.

NYC’s contract with Ivalua appears to give it the right to cancel and collect $25 million from the company if it failed to perform the scope of work. But rather than cancel and collect the bond, the de Blasio administration gave Ivalua another $15 million. Who made that decision — and why?

Costs to Taxpayers Approach $50 Million

The question remains relevant because the online procurement project is far from working as promised. And costs are now approaching $50 million.

Since last summer, Checks and Balances Project (C&BP) has been investigating questions about this taxpayer boondoggle.

On August 23, 2019, C&BP filed a new request for emails and other public records with the NYC agency that contracted with Ivalua, the Dept. of Information, Technology and Telecommunications (DoITT). A separate records request and an update was sent to the Mayor’s Office of Contract Supervision (MOCS), which is “the City’s central compliance and oversight agency for procurement.” MOCS is referred to in the DoITT-Ivalua contract 75 times.

Taxpayers Deserve to Know

We asked DoITT for all emails sent to or from any of the individuals listed below. NYC taxpayers deserve to know, among other things, who failed to collect Ivalua’s $25 million bond when it didn’t meet its commitments — and why. The insiders are:

  • Anne Roest, former DoITT Commissioner (May 2014-March 2018)
  • Guy Oliveri, DoITT Director of IT Procurement Administration (October 2016-present); formerly Executive Director of Procurement Innovation, MOCS, (December 2015-Octoctober 2016)
  • John Katsorhis, DoITT Chief Contracting Officer (March 2015-May 2019)
  • Michael Owh, former MOCS Director and Chief Procurement Officer (March 2016-February 2018)
  • Samir Khushalani, former KPMG Practice Leader Americas (August 2007-August 2017)
  • Anthony Dalessio, KPMG Managing Director
  • Lorna Stark, KPMG Partner
  • Roger Albritton, KPMG Managing Director, State and Local Government
  • Alan Rosenberg, RG Group lobbyist
  • Daniel Amzallag, Ivalua CEO
  • Amol Joshi, Ivalua SVP Sales and Business Development.

The 20-day deadline for the city agencies to produce the records is today, September 30th.

Do you have information to share? Send us a note through our confidential tip line. Your tip can be completely anonymous.

 

Scott Peterson is executive director of Checks and Balances Project, an investigative watchdog holding government officials, lobbyists and corporate management accountable to the public. Funding for C&BP is provided by Renew American Prosperity and individual donors.

 

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