From personal experience I can confirm that this is exactly how it works when governments try to do things. There's such a compulsive need to negate risk that everything is all about the process instead of the results - and inevitably this leads to huge amounts of wasted time and money while people try to decide the right thing to do.
Separately, New York Comptroller John Liu issued a statement on Wednesday regarding an agreement with Bloomberg's office now that the contract with SAIC is over. The pact calls for a "gradual transfer of the management of the system from outside consultants to city employees for a savings of more than $20 million per year."
Bloomberg and Liu have joint control of the city's Financial Information Services Agency, which governs the CityTime project. Liu is seen as a potential challenger in the city's 2013 mayoral election, and has invoked CityTime's woes in publicly criticizing Bloomberg's management of New York's finances.
Some 71 consultants on the project will be let go, according to the agreement. Another 83 will be kept, but will undergo "extensive background checks conducted by an independent third-party." Those 83 consultants will be replaced by city workers over the next several years.
The city is also planning to launch a request for information (RFI) process in January in search of alternative timekeeping systems.
Some 163,000 workers are now using the CityTime system, compared to 73,000 in Sept. 2010, according to Liu's office.
SAIC "understands and shares the outrage expressed by the city at the fraud alleged on the part of former employees and subcontractors on the CityTime program. These actions are an affront to everything we stand for as a company," it said in an e-mailed statement Thursday.
The company is also "ready to discuss appropriate resolution of this matter, considering the breadth of the fraud alleged and the fact that SAIC delivered a system that the city said this week is working well," the statement added.
New York should definitely pursue all legal options to recover the lost money, but the project "likely suffers from ambiguous lines of management responsibility that will make it difficult to establish clear audit trails of legal liability," said Michael Krigsman, CEO of Asuret, a consulting firm that helps companies run successful IT projects.