Water Watch NYC

Everything you need to know about water in NYC.

Ten Ways to Save the DEP – #3: Stop Using the Water Board to Bypass Contract Bidding


Like every government agency, every so often the DEP needs to outsource some of its work. They need studies done to determine the efficiency of their procedures or they need construction done on new or existing facilities.

The fact that some of their work is outsourced actually should benefit the public. We don’t need the costs of training and maintaining additional DEP staff worked into our water/sewer rates. What we pay for water is already high enough. Let the DEP worry about being the best at distributing water to New York City and let them pay others to be the best at other things, like environmental impact studies and rate analysis studies.

Considering how often work is outsourced, it’s a good thing government agencies have a system in place to ensure that the outsourcing is executed fairly and efficiently. Whenever work needs to be outsourced the DEP puts out a Request for Proposals (RFP) and anyone interested responds in writing with what they can do to complete the work and how much they’ll charge to do it. The DEP now has to look at two things in each bid: 1) Can this company complete this job effectively? and 2) who will do it for the least amount of money?

After all, it is our money that these government agencies are throwing around. Following the rules above ensures that they’re not abusing that right.

If only this was how the DEP obtained their contracts. Steven Lawitts, Emily Lloyd and other past DEP commissioners found a way to bypass the contract bidding process and they milked it for all it was worth.

The purpose of the Water Board is to be a regulatory agency, constantly monitoring the DEP and keeping them in line. After all, the DEP’s capital budget is over $1 billion. Someone’s gotta make sure all that money is being used correctly. Ideally, as a regulatory agency, the Water Board should be watching everything the DEP does and telling them where they’ve overstepped their bounds. In actuality what the Water Board does is back up and support every action that the DEP takes.

Since the Water Board controls the DEP’s finances and blindly supports their every move, it stands to reason that all the DEP has to do is ask the Water Board for money for a specific project and the Water Board will hand it to them with a big smile on their faces. So instead of finding the company that will complete a job most effectively for the least amount of money, they just pick the company they want to work with and ask the Water Board to give them any amount of money they ask for without any regard for whether or not they’re the right people for the job.

This is how we got ourselves into the current Booz Allen Hamilton rate study mess. Years ago (under former DEP Commissioner Emily Lloyd), the DEP asked the Water Board to pay BAH to audit its customer service and collections procedures. BAH came back (after asking for more money and turning in their report after the deadline) and said that in order to maximize collections the DEP needed to perform a rate study. Then they got the DEP to hire them (without putting out an RFP) to perform that rate study. They released their results a couple of weeks ago and they are woefully lacking.

Let’s break down the string of failures here, shall we? Audit of customer service and collections procedures goes straight to BAH without an RFP – failure #1. BAH asks for more money (which they get) and turns in the report late – failure #2. BAH report’s only conclusion is that to increase collections BAH should be hired again for more money to perform a rate study – failure #3. Rate study goes straight to BAH without an RFP – failure #4. Rate study comes back with no analysis or conclusions – failure #5.

So where we started with a simple, minor problem–the DEP giving a small contract to BAH without letting others bid on it–now we have a major problem in that we’ve shelled out millions of dollars for a report with no conclusions or recommendations. The original contract may have been small but because of it we ended up with bad advice and a poorly run agency!

At a recent Water Board hearing, Chairman Alan Moss asked if one of these days newly appointed DEP Commissioner Caswell Holloway could be brought in on a hearing. Moss’s reasoning behind the request? He wanted to assure Holloway in person that the Water Board is behind the DEP 100%. Does that sound to you like the right attitude for a regulatory agency to have?

Maybe if the Water Board started actually auditing the DEP’s expenses and maybe if the DEP stopped using the Water Board to bypass contract bidding, there wouldn’t be so much wasteful spending with our money.

[CORRECTION – 3/3/10: The assertions above, that the Booz-Allen contracts were obtained without competition, are incorrect. The public records indicate that the Booz-Allen contracts were procured through a competitive Request for Proposal process. The Water Board’s website posts the official minutes from past Water Board meetings. The minutes from the June 2008 meeting summarizes the competitive process the Water Board used to award the Booz-Allen contract.

We apologize to the DEP, Water Board and the public for the error .]

Author: Hershel

Hershel is a Water Management Engineer with Ashokan Water Services, where he's actively involved with conservation and building design issues. Prior to his Ashokan, he was a Mechanical Engineer with the City of New York. He is a former President of the New York chapter of the American Society of Plumbing Engineers (ASPE) and is a member of BOMA, IREM and NYARM. Hershel is an avid kayaker.

10 thoughts on “Ten Ways to Save the DEP – #3: Stop Using the Water Board to Bypass Contract Bidding

  1. It’s unfortunate that no one from DEP nor the Mayor’s office will reply to a blogger but even from what I know working for an NGO it is very clear that you have not researched this issue very well. Not that minimizing contracting directly through the Water Board is not a laudable goal, but the errors in your description of the specific example damage your argument. The problem with bloggers is that your unsupported assertions will not be properly countered and people will actually believe them. it’s a useful forum for people who are not accountable to anyone but themselves.

    Your description of the original Booz Allen Hamilton (BAH) contract as “small” strongly suggests you have never seen this report nor understand its origins. Your claim that the report’s “only” conclusion is a rate study is simply an out-and-out lie. The claim that BAH conducted the rate study is factually incorrect.

    If you actually have an intention to understand these issues you would research the following questions and report back to your readers:

    Who ordered/directed/strongly recommended that the BAH study be conducted? What were the purposes of the study? What were the findings/recommendations . What changes have been implemented as a result of the study? Why would it have been beneficial for DEP to perform the BAH study bid through the Water Board instead of the regular public bidding process?

    The answers to all of these questions are a matter of public record, although it is questionable that the city council staffers, etc. who receive copies of all of these materials actually read them. But it’s all there. It’s clear you have not done the research and probably don’t have any intention to, It’s much for fun to rant.

    The problem is that there are genuine, legitimate questions surrounding DEP but the problem with bloggers is that there isn’t a copy editor or fact checker reviewing what they’ve written. Real journalists work for organizations that have some commitment to reporting facts and separating facts from pure, uninformed or slightly-informed opinion. Bloggers write for pure self pleasure.

  2. Hey to you all!

    It seemed necessary to introduce myself to everyone. I am hoping that that we all will have great conversations together!

    So Greetings!


  3. City Govt agencies put people into positions to make these contracting decisions. The same few consultants win most every DEP RFP job because these firms put the decision makers in place, either before they left DEP as former workers or through the political system.

    These same few firms design and often manage the same project. It’s all a gimmick and the taxpayers foot the bill. DEP’s current chief contracting officer is hand picked. Hopefully, the new Commissioner will straighten the mess out, but it’s very tangled from years of shenanigans.

    • It’s your fault I’ve got a ferret viarutlly running around in my underwear. (I really needed that meeting tonight, support group all concur your making fun of me and to get the rodent out of my pants)

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    NY, NY

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  8. E-Gah! That sounds like a nhaitmgre and very similar to what I would imagine would happen around here in the same situation.Your lovely wife is a very smart, astute and loving woman. Keep her and the cold beer close.(MD) If I didn’t have her, a lot of things would end up smashed beyond recognition following one of my temper tantrums. And then I’d be spending money on both the plumber and at the store buying new stuff.

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